<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. 9)
ANGELES PARTNERS XII
(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* $6,895,866 Amount of Filing Fee: $1,379.17
- --------------------------------------------------------------------------------
* For purposes of calculating the fee only. This amount assumes the
purchase of 12,098.01 units of limited partnership interest of the
subject partnership for $570 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 2 of 8 Pages
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SCHEDULE 14D-1/AMENDMENT NO. 9 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 Partners XII (the "Partnership"); and (b) Amendment No. 9 to the
Schedule 13D (the "Schedule 13D") originally filed with the Securities and
Exchange Commission (the "Commission") on June 22, 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, AIMCO OP,
AIMCO-GP, Inc. ("AIMCO-GP") and Apartment Investment and Management Company
("AIMCO"), (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, (vi)
Amendment No. 6, filed with the Commission on May 14, 1999, by Cooper River,
Broad River, AIMCO/IPT, Inc. ("AIMCO/IPT"), IPLP, AIMCO OP, AIMCO-GP and AIMCO,
(vii) Amendment No. 7, filed with the Commission on July 1, 1999, by Cooper
River, Broad River, AIMCO/IPT, IPLP, AIMCO OP, AIMCO-GP and AIMCO, and (viii)
Amendment No. 8, filed with the Commission on August 6, 1999, by Cooper River,
Broad River, AIMCO/IPT, IPLP, AIMCO OP, AIMCO-GP and AIMCO. Cooper River, Broad
River, AIMCO/IPT, IPLP, AIMCO OP, AIMCO-GP and AIMCO are herein referred to as
the "Reporting Persons." The item numbers and responses thereto are set forth
below in accordance with the requirements of Schedule 14D-1.
(1) SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Angeles Partners XII, 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 12,098.01 of the 44,718 outstanding units of limited partnership interest
(the "Units") of the Partnership at a purchase price per Unit, net to the
seller, of $570 in cash (less the amount of any distributions paid by the
Partnership on and after August 19, 1999), upon the terms and subject to the
conditions set forth in an Offer to Purchase, dated August 19, 1999 (as amended
or supplemented from time to time, the "Offer to Purchase"), and the related
Letter of Transmittal and Instructions thereto (as amended or supplemented from
time to time, the "Letter of Transmittal"), copies of which are filed as
Exhibits (a)(1) and (a)(2) hereto, respectively.
(c) The information set forth in the Offer to Purchase under
"The Offer -- Section 9. Background and Reasons for the Offer -- Prices on
Secondary Market" is incorporated herein by reference.
(2) IDENTITY AND BACKGROUND.
(a)-(d), (g) This Statement is being filed by AIMCO
Properties, L.P., a Delaware limited partnership, and, insofar as this Statement
constitutes Amendment No. 9 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 3 of 8 Pages
<PAGE> 4
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 and AIMCO-GP are
listed on Annex I to the Offer to Purchase ("Annex I"), which is incorporated
herein by reference.
(e)-(f) During the last five years, none of the Reporting
Persons nor, to the best of their knowledge, any of the persons listed in Annex
I (i) has been convicted in a criminal proceeding (excluding traffic violations
or similar misdemeanors) or (ii) was a party to a civil proceeding of a judicial
or administrative body of competent jurisdiction and as a result of such
proceeding was or is subject to a judgment, decree or final order enjoining
further violations of or prohibiting activities subject to federal or state
securities laws or finding any violation with respect to such laws.
(3) PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT
COMPANY.
(a)-(b) The information set forth in Item 1 of Part I and
Items 9 through 12 of Part III of the Partnership's Form 10-KSB for the year
ended December 31, 1998, and the financial statements and notes thereto included
therein, and the information set forth in the Offer to Purchase under "The Offer
- -- Section 9. Background and Reasons for the Offer -- General," "The Offer --
Section 9. Background and Reasons for the Offer -- Prior Tender Offers," "The
Offer - Section 11. Conflicts of Interest and Transactions with Affiliates,"
"The Offer -- Section 13. Certain Information Concerning Your Partnership --
Distributions" and "The Offer -- Section 13. Certain Information Concerning Your
Partnership -- Compensation Paid to the General Partner and Its Affiliates" is
incorporated herein by reference.
(4) SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(c) The information set forth in the Offer to Purchase
under "The Offer -- Section 15. Source of Funds" is incorporated herein by
reference.
(5) PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a)-(g) The information set forth in the Offer to Purchase
under "The Offer -- Section 9. Background and Reasons for the Offer," "The Offer
- -- Section 12. Future Plans of the Purchaser" and "The Offer -- Section 7.
Effects of the Offer" is incorporated herein by reference.
(6) INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a)-(b) Cooper River directly owns 4,607 Units, Broad River
directly owns 8,002 Units, IPLP directly owns 1,814 Units and AIMCO OP directly
owns 12,527 Units (for an aggregate of 17,950 Units), representing 10.3%, 17.9%,
4.1% and 7.9%, respectively, or a total of 40.10% of the outstanding Units based
on the 44,718 Units outstanding at December 31, 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
general partner of IPLP (owning approximately 66.17% of the total equity
interests). AIMCO/IPT is a wholly owned subsidiary of AIMCO.
Page 4 of 8 Pages
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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 reason 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 4,607 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 1,814 Units owned by it
and the 4,607 Units owned by Cooper River; (iii) AIMCO/IPT is reporting that it
share the power to vote or direct the vote and the power to dispose or direct
the disposition of the 4,607 Units directly owned by Cooper River and 1,814
Units 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 8,002 Units directly owned by it; (v) AIMCO OP is reporting that it shares
the power to vote or direct the vote and the power to dispose or direct the
disposition of the 12,527 Units directly owned by it and the 8,002 Units
directly owned by Broad River; (vi) AIMCO-GP is reporting that it shares the
power to vote or direct the vote and the power to dispose or direct the
disposition of the 8,002 Units directly owned by Broad River and the 12,527
Units directly owned by AIMCO OP; and (vi) AIMCO is reporting that it shares the
power to vote or direct the vote and the power to dispose or direct the
disposition of the 4,607 Units directly owned by Cooper River, the 8,002 Units
directly owned by Broad River, the 1,814 Units directly owned by IPLP and the
12,527 Units directly owned by AIMCO OP.
(7) CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO THE SUBJECT COMPANY'S SECURITIES.
Not applicable.
(8) PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the Offer to Purchase under "The
Offer -- Fees and Expenses" is incorporated herein by reference.
(9) FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The financial statements included in AIMCO OP's Annual Report
on Form 10-K for the year ended December 31, 1998, which are listed on the Index
to Financial Statements on page F-1 of such report, are incorporated herein by
reference. Such report may be inspected at the public reference facilities
maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549; Citicorp Center, 500 West Madison Street, Chicago,
Illinois 60661; and 7 World Trade Center, 13th Floor, New York, New York 10048.
Copies of such material can also be obtained from the Public Reference Room of
the Commission in Washington, D.C. at prescribed rates and from the Commission's
web site at www.sec.gov.
Page 5 of 8 Pages
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(10) ADDITIONAL INFORMATION.
(a) Not applicable.
(b)-(d) The information set forth in the Offer to Purchase
under "The Offer -- Section 18. Certain Legal Matters" is incorporated herein by
reference.
(e) The information set forth in the Offer to Purchase under
"The Offer -- Section 9. Background and Reasons for the Offer -- Certain
Litigation" is incorporated herein by reference
(f) The Offer to Purchase is hereby incorporated by reference.
(11) MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase, dated August 19, 1999.
(a)(2) Letter of Transmittal and related Instructions.
(a)(3) Letter, dated August 19, 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 August 19, 1999,
among AIMCO, AIMCO- GP, AIMCO OP, AIMCO/IPT, IPLP,
Broad River and Cooper River.
Page 6 of 8 Pages
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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: August 19, 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 7 of 8 Pages
<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<S> <C>
(a)(1) Offer to Purchase, dated August 19, 1999.
(a)(2) Letter of Transmittal and related Instructions.
(a)(3) Letter, dated August 19, 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 August 19, 1999, among AIMCO, AIMCO- GP, AIMCO OP, AIMCO/IPT, IPLP,
Broad River and Cooper River.
</TABLE>
Page 8 of 8 Pages
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OFFER TO PURCHASE FOR CASH
AIMCO Properties, L.P.
is offering to purchase up to 12,098.01 units of limited partnership interest in
Angeles Partners XII
for $570 per unit in CASH
We will only accept a maximum of 12,098.01 units in response to our offer. If
more units are tendered to us, we will generally accept units on a pro rata
basis according to the number of units tendered by each person.
We will pay for accepted units promptly after expiration of the offer.
Our offer price will be reduced for any distributions subsequently made by your
partnership prior to the expiration of our offer.
Our offer and your withdrawal rights will expire at 5:00 p.m., New York City
time, on September 16, 1999, unless we extend the deadline.
YOU WILL NOT PAY ANY PARTNERSHIP TRANSFER FEES IF YOU TENDER YOUR UNITS.
Our offer is subject to a minimum of 35% of the units being tendered.
SEE "RISK FACTORS" BEGINNING ON PAGE 1 OF THIS OFFER TO PURCHASE FOR A
DESCRIPTION OF RISK FACTORS THAT YOU SHOULD CONSIDER IN CONNECTION WITH OUR
OFFER, INCLUDING THE FOLLOWING:
o We determined the offer price of $570 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 based on recent appraisals,
to be $948 per unit and an affiliate of your general partner estimated
the net liquidation value of your units to be $911.06 per unit.
o While secondary sales activity in the units of your partnership has
been limited and sporadic, sales prices of units in your partnership
ranged from $30 to $671.22 since January 1, 1996.
o Although your partnership's agreement of limited partnership provides
for termination in the year 2035, the prospectus pursuant to which the
units were sold in 1984 indicated that the properties owned by your
partnership might be sold within 5 to 8 years of their acquisition if
conditions permitted.
(continued on next page)
---------------------------------------------------------
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.
August 19, 1999
<PAGE> 2
(continued from cover page)
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, including but not limited to the
removal of the general partner, most amendments to the partnership
agreement and the sale of all or substantially all of your
partnership's assets.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<S> <C>
INTRODUCTION........................................................................................1
RISK FACTORS........................................................................................1
No Third Party Valuation or Appraisal; No Arms-Length Negotiation..............................1
No Fairness Opinion From a Third Party.........................................................2
Offer Price May Not Represent Fair Market Value................................................2
Offer Price Does Not Reflect Future Prospects..................................................2
Offer Price Based on Our Estimate of Liquidation Proceeds......................................2
Offer Price May Not Represent Liquidation Value................................................2
Continuation of the Partnership; No Time Frame Regarding Sale of Properties....................2
Holding Units May Result in Greater Future Value...............................................2
Conflicts of Interest With Respect to the Offer................................................3
No General Partner Recommendation..............................................................3
Conflicts of Interest Relating to Management Fees..............................................3
Possible Subsequent Offer at a Higher Price....................................................3
Recognition of Taxable Gain on a Sale of Your Units............................................3
Loss of Future Distributions from Your Partnership.............................................3
Possible Increase in Control of Your Partnership by Us.........................................4
Recognition of Gain Resulting from Possible Future Reduction in Your Partnership Liabilities...4
Risk of Inability to Transfer Units for 12-Month Period........................................4
Potential Delay in Payment.....................................................................4
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.................................................................8
Section 5. Extension of Tender Period; Termination; Amendment................................9
Section 6. Certain Federal Income Tax Matters...............................................10
Section 7. Effects of the Offer.............................................................13
Section 8. Information Concerning Us and Certain of Our Affiliates..........................13
Section 9. Background and Reasons for the Offer.............................................15
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.....................................................................32
Section 15. Source of Funds..................................................................32
Section 16. Dissenters' Rights...............................................................33
Section 17. Conditions of the Offer..........................................................33
Section 18. Certain Legal Matters............................................................35
Section 19. Fees and Expenses................................................................36
ANNEX I - OFFICERS AND DIRECTORS..................................................................I-1
</TABLE>
i
<PAGE> 4
INTRODUCTION
We are offering to purchase up to 12,098.01 units, representing
approximately 27.05% of the outstanding units of limited partnership interest in
your partnership, for the purchase price of $570 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 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 conditioned on a
minimum of 35% of the units being tendered. In addition, certain other
conditions 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 September
16, 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 units for payment, on or after October 19, 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 June 30, 1999, AIMCO owned or managed 269,404
apartment units in 2,037 properties located in 49 states, the District of
Columbia and Puerto Rico. AIMCO's Class A Common Stock is listed and traded on
the New York Stock Exchange under the symbol "AIV."
As 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.
1
<PAGE> 5
NO FAIRNESS OPINION FROM A THIRD PARTY
We did not obtain an opinion from a third party that our offer price is
fair from a financial point of view.
OFFER PRICE MAY NOT REPRESENT FAIR MARKET VALUE
There is no established or regular trading market for your units, nor
is there another reliable standard for determining the fair market value of the
units. Our offer price does not necessarily reflect the price that you would
receive in an open market for your units. Such prices could be higher than our
offer price.
OFFER PRICE DOES NOT REFLECT FUTURE PROSPECTS
Our offer price is based on your partnership's historical property
income. It does not ascribe any value to potential future improvements in the
operating performance of your partnership's properties.
OFFER PRICE BASED ON OUR ESTIMATE OF LIQUIDATION PROCEEDS
The offer price represents only our estimate of the amount you would
receive if we liquidated the partnership. In determining the liquidation value,
we used for the 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. 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.
HOLDING UNITS MAY RESULT IN GREATER FUTURE VALUE
You might receive more value if you retain your units until your
partnership is liquidated.
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CONFLICTS OF INTEREST WITH RESPECT TO THE OFFER
The general partner of your partnership is our subsidiary and,
therefore, has substantial conflicts of interest with respect to our offer. We
are making this offer with a view to making a profit. There is a conflict
between our desire to purchase your units at a low price and your desire to sell
your units at a high price. We determined our offer price without negotiation
with any other party, including any general or limited partner.
NO GENERAL PARTNER RECOMMENDATION
The general partner of your partnership makes no recommendation as to
whether you should tender or refrain from tendering your units. Although the
general partner believes the offer is fair, you must make your own decision
whether or not to participate in the offer, based upon a number of factors,
including your financial position, your need or desire for liquidity, other
financial opportunities available to you, and your tax position and the tax
consequences to you of selling your units.
CONFLICTS OF INTEREST RELATING TO MANAGEMENT FEES
Since 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 taxable gain or loss measured by the difference between
the amount realized on the sale and your adjusted tax basis in the units of
limited partnership interest of your partnership you transfer to us. The "amount
realized" with respect to a unit of limited partnership interest of your
partnership you transfer to us will be equal to the sum of the amount of cash
received by you for the unit sold pursuant to the offer plus the amount of
partnership liabilities allocable to the unit. The particular tax consequences
for you of our offer will depend upon a number of factors related to your tax
situation, including your tax basis in your units of limited partnership
interest of your partnership you transfer to us, whether you dispose of all of
your units and whether you have available suspended passive losses, credits or
other tax items to offset any gain recognized as a result of your sale of your
units of limited partnership interest of your partnership. Therefore, depending
on your basis in the units and your tax position, your taxable gain and any tax
liability resulting from a sale of units to us pursuant to the offer could
exceed our offer price. Because the income tax consequences of tendering units
will not be the same for everyone, you should consult your own tax advisor to
determine the tax consequences of the offer to you.
LOSS OF FUTURE DISTRIBUTIONS FROM YOUR PARTNERSHIP
If you tender your units in response to our offer, you will transfer to
us all right, title and interest in and to all of the units we accept, and the
right to receive all distributions in respect of such units on and after the
date on which we accept such units for purchase. Accordingly, for any units that
we acquire from you, you will not
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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
Decisions with respect to the day-to-day management of your partnership
are the responsibility of the general partner. Because the general partner of
your partnership is our affiliate, we control the management of your
partnership. Under your partnership's agreement of limited partnership, limited
partners holding a majority of the outstanding units must approve certain
extraordinary transactions, including the removal of the general partner, the
addition of a new general partner, most amendments to the partnership agreement
and the sale of all or substantially all of your partnership's assets. If we
acquire all the units we are offering to purchase, we will own a majority of the
outstanding units and will have the ability to control any vote of the limited
partners.
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.
POTENTIAL DELAY IN PAYMENT
We reserve the right to extend the period of time during which our
offer is open and thereby delay acceptance for payment of any tendered units.
The offer may be extended indefinitely and no payment will be made in respect of
rendered units until the expiration of the offer and acceptance of units for
payment.
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 12,098.01 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 September
16, 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
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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 12,098.01 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 12,098.01 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 12,098.01 units, we will purchase all units so tendered and not withdrawn,
upon the terms and subject to the conditions of the offer.
If proration of tendered units is required, then, subject to our
obligation under Rule 14e-1(c) under the Securities Exchange Act of 1934 (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 CONDITIONED UPON A MINIMUM OF 35% OF THE 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 withdrawal rights of
limited partners, retain the units that have been tendered during the period or
periods for which the offer is extended, or (iv) amend the offer. The transfer
of units will be effective May 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 August 19, 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 12,098.01 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
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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.
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.
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APPOINTMENT AS PROXY; POWER OF ATTORNEY. By executing the letter of
transmittal, you are irrevocably appointing us and our designees as your proxy,
in the manner set forth in the letter of transmittal, each with full power of
substitution, to the fullest extent of the your rights with respect to the units
tendered by you and accepted for payment by us. Each such proxy shall be
considered coupled with an interest in the tendered units. Such appointment will
be effective when, and only to the extent that, we accept the tendered unit for
payment. Upon such acceptance for payment, all prior proxies given by you with
respect to the units will, without further action, be revoked, and no subsequent
proxies may be given (and if given will not be effective). We and our designees
will, as to those units, be empowered to exercise all voting and other rights as
a limited partner as we, in our sole discretion, may deem proper at any meeting
of limited partners, by written consent or otherwise. We reserve the right to
require that, in order for units to be deemed validly tendered, immediately upon
our acceptance for payment 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 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.
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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 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 payment of such taxes or exemption therefrom is submitted.
BINDING AGREEMENT. A tender of a unit pursuant to any of the procedures
described above and the acceptance for payment of such unit will constitute a
binding agreement between the tendering unitholder and us on the terms set forth
in this offer to purchase and the related letter of transmittal.
SECTION 4. WITHDRAWAL RIGHTS.
You may withdraw tendered units at any time prior to the expiration
date or on or after October 19, 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.
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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 payment for, any
unit, (ii) to terminate the offer and not accept any units not theretofore
accepted for payment or paid for if any of the conditions to the offer are not
satisfied or if any event occurs that might reasonably be expected to result in
a failure to satisfy such conditions, (iii) upon the occurrence of any of the
conditions specified in "The Offer - Section 17," 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 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.
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SECTION 6. CERTAIN FEDERAL INCOME TAX MATTERS.
The following summary is a general discussion of certain of the United
States federal income tax consequences of the offer that may be relevant to (i)
unitholders who tender some or all of their units for cash pursuant to our
offer, and (ii) unitholders who do not tender any of their units pursuant to our
offer. This discussion is based on the Internal Revenue Code of 1986, as amended
(the "Internal Revenue Code"), Treasury Regulations, rulings issued by the
Internal Revenue Service (the "IRS"), and judicial decisions, all as of the date
of this offer to purchase. All of the foregoing are subject to change or
alternative construction, possibly with retroactive effect, and any such change
or alternative construction could affect the continuing accuracy of this
summary. This summary is based on the assumption that your partnership is
operated in accordance with its organizational documents including its
certificate of limited partnership and agreement of limited partnership. This
summary is for general information only and does not purport to discuss all
aspects of federal income taxation which may be important to a particular person
in light of its investment or tax circumstances, or to certain types of
investors subject to special tax rules (including financial institutions,
broker-dealers, insurance companies, and, except to the extent discussed below,
tax-exempt organizations and foreign investors, as determined for United States
federal income tax purposes), nor (except as otherwise expressly indicated) does
it describe any aspect of state, local, foreign or other tax laws. This summary
assumes that the units constitute capital assets in the hands of the unitholders
(generally, property held for investment). No advance ruling has been or will be
sought from the IRS regarding any matter discussed in this offer to purchase.
Further, no opinion of counsel has been obtained with regard to the offer.
THE UNITED STATES FEDERAL INCOME TAX TREATMENT OF A UNITHOLDER
PARTICIPATING IN THE OFFER DEPENDS IN SOME INSTANCES ON DETERMINATIONS OF FACT
AND INTERPRETATIONS OF COMPLEX PROVISIONS OF UNITED STATES FEDERAL INCOME TAX
LAW FOR WHICH NO CLEAR PRECEDENT OR AUTHORITY MAY BE AVAILABLE. ACCORDINGLY, YOU
SHOULD CONSULT YOUR TAX ADVISOR REGARDING THE UNITED STATES FEDERAL, STATE,
LOCAL AND FOREIGN TAX CONSEQUENCES OF SELLING THE LIMITED PARTNERSHIP INTERESTS
IN YOUR PARTNERSHIP REPRESENTED BY UNITS PURSUANT TO OUR OFFER OR OF A DECISION
NOT TO SELL IN LIGHT OF YOUR SPECIFIC TAX SITUATION.
TAX CONSEQUENCES TO LIMITED PARTNERS TENDERING UNITS FOR CASH. You will
recognize gain or loss on a sale of a unit of limited partnership of your
partnership equal to the difference between (i) your "amount realized" on the
sale and (ii) your adjusted tax basis in the unit sold. The "amount realized"
with respect to a unit of limited partnership of your partnership will be equal
to the sum of the amount of cash received by you for the unit sold pursuant to
the offer plus the amount of partnership liabilities allocable to the unit (as
determined under Section 752 of the Internal Revenue Code). Thus, your taxable
gain and tax liability resulting from a sale of a unit of limited partnership of
your partnership could exceed the cash received upon such sale.
ADJUSTED TAX BASIS. If you acquired your units of limited partnership
of your partnership for cash, your initial tax basis in such units was generally
equal to your cash investment in your partnership increased by your share of
partnership liabilities at the time you acquired such units. Your initial tax
basis generally has been increased by (i) your share of partnership income and
gains, and (ii) any increases in your share of partnership liabilities, and has
been decreased (but not below zero) by (i) your share of partnership cash
distributions, (ii) any decreases in your share of partnership liabilities,
(iii) your share of partnership losses, and (iv) your share of nondeductible
partnership expenditures that are not chargeable to capital. For purposes of
determining your adjusted tax basis in units of limited partnership of your
partnership immediately prior to a disposition of your units, your adjusted tax
basis in your units will include your allocable share of partnership income,
gain or loss for the taxable year of disposition. If your adjusted tax basis is
less than your share of partnership liabilities (e.g., as a result of the effect
of net loss allocations and/or distributions exceeding the cost of your unit),
your gain recognized with respect to a unit of limited partnership of your
partnership pursuant to the offer will exceed the cash proceeds realized upon
the sale of such unit.
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CHARACTER OF GAIN OR LOSS RECOGNIZED PURSUANT TO THE OFFER. Except as
described below, the gain or loss recognized by you on a sale of a unit of
limited partnership of your partnership pursuant to the offer generally will be
treated as a long-term capital gain or loss if you held the unit for more than
one year. Long-term capital gains recognized by individuals and certain other
noncorporate taxpayers generally will be subject to a maximum United States
federal income tax rate of 20%. If the amount realized with respect to a unit of
limited partnership of your partnership that is attributable to your share of
"unrealized receivables" of your partnership exceeds the tax basis attributable
to those assets, such excess will be treated as ordinary income. Among other
things, "unrealized receivables" include depreciation recapture for certain
types of property. In addition, the maximum United States federal income tax
rate applicable to persons who are noncorporate taxpayers for net capital gains
attributable to the sale of depreciable real property (which may be determined
to include an interest in a partnership such as your units) held for more than
one year is currently 25% (rather than 20%) with respect to that portion of the
gain attributable to depreciation deductions previously taken on the property.
If you tender a unit of limited partnership interest of your
partnership in the offer, you will be allocated a share of partnership taxable
income or loss for the year of tender with respect to any units sold. You will
not receive any future distributions on units of limited partnership interest of
your partnership tendered on or after the date on which such units are accepted
for purchase and, accordingly, you may not receive any distributions with
respect to such accreted income. Such allocation and any partnership cash
distributions to you for that year will affect your adjusted tax basis in your
unit of limited partnership interest of your partnership and, therefore, the
amount of your taxable gain or loss upon a sale of a unit pursuant to the offer.
PASSIVE ACTIVITY LOSSES. The passive activity loss rules of the
Internal Revenue Code limit the use of losses derived from passive activities,
which generally include investments in limited partnership interests such as the
units of limited partnership interest of your partnership. An individual, as
well as certain other types of investors, generally cannot use losses from
passive activities to offset nonpassive activity income received during the
taxable year. Passive losses that are disallowed for a particular tax year are
"suspended" and may be carried forward to offset passive activity income earned
by the investor in future taxable years. In addition, such suspended losses may
be claimed as a deduction, subject to other applicable limitations, upon a
taxable disposition of the investor's interest in such activity.
Accordingly, if your investment in your units is treated as a passive
activity, you may be able to reduce gain from the sale of your units of limited
partnership interest of your partnership pursuant to the offer with passive
losses in the manner described below. If you sell all or a portion of your units
of limited partnership interest of your partnership pursuant to the offer and
recognize a gain on your sale, you will generally be entitled to use your
current and "suspended" passive activity losses (if any) from your partnership
and other passive sources to offset that gain. In general, if you sell all or a
portion of your units of limited partnership interest of your partnership
pursuant to the offer and recognize a loss on such sale, you will be entitled to
deduct that loss currently (subject to other applicable limitations) against the
sum of your passive activity income from your partnership for that year (if any)
plus any passive activity income from other sources for that year. If you sell
all of your units pursuant to the offer, the balance of any "suspended" losses
from your partnership that were not otherwise utilized against passive activity
income as described in the two preceding sentences will generally no longer be
suspended and will generally therefore be deductible (subject to any other
applicable limitations) by you against any other income for that year,
regardless of the character of that income. You are urged to consult your tax
advisor concerning whether, and the extent to which, you have available
"suspended" passive activity losses from your partnership or other investments
that may be used to reduce gain from the sale of units pursuant to the offer.
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<PAGE> 15
INFORMATION REPORTING, BACKUP WITHHOLDING AND FIRPTA. If you tender any
units, you must report the transaction by filing a statement with your United
States federal income tax return for the year of the tender which provides
certain required information to the IRS. To prevent the possible application of
back-up United States federal income tax withholding of 31% with respect to the
payment of the offer consideration, you are generally required to provide us
with your correct taxpayer identification number. See the instructions to the
letter of transmittal.
Gain realized by a foreign person on the sale of a unit pursuant to the
offer will be subject to federal income tax under the Foreign Investment in Real
Property Tax Act of 1980. Under these provisions of the Internal Revenue Code,
the transferee of an interest held by a foreign person in a partnership which
owns United States real property generally is required to deduct and withhold
10% of the amount realized on the disposition. Amounts withheld would be
creditable against a foreign person's United States federal income tax liability
and, if in excess thereof, a refund could be claimed from the Internal Revenue
Service by filing a United States income tax return. See the instructions to the
letter of transmittal.
TAX CONSEQUENCES TO NON-TENDERING AND PARTIALLY-TENDERING LIMITED
PARTNERS. Section 708 of the Internal Revenue Code provides that if there is a
sale or exchange of 50% or more of the total interest in capital and profits of
a partnership within any 12-month period, such partnership terminates for United
States federal income tax purposes. It is possible that our acquisition of units
pursuant to the offer alone or in combination with other transfers of interests
in your partnership could result in such a termination of your partnership. If
your partnership is deemed to terminate for tax purposes, the following Federal
income tax events will be deemed to occur: the terminated partnership will be
deemed to have contributed all of its assets (subject to its liabilities) to a
new partnership in exchange for an interest in the new partnership and,
immediately thereafter, the old partnership will be deemed to have distributed
interests in the new partnership to the remaining limited partners in proportion
to their respective interests in the old partnership in liquidation of the old
partnership.
A remaining limited partner will generally not recognize any gain or
loss upon the deemed distribution or upon the deemed contribution and the
capital accounts of the remaining limited partners in the old partnership will
carry over intact into the new partnership. A termination may change (and
possibly shorten) a remaining partner's holding period with respect to its
retained units in your partnership for United States federal income tax
purposes.
The new partnership's adjusted tax basis in its assets will be the same
as the old partnership's basis in such assets immediately before the
termination. A termination may also subject the assets of the new partnership to
depreciable lives in excess of those currently applicable to the old
partnership. This would generally decrease the annual average depreciation
deductions allocable to the remaining limited partners for a number of years
following consummation of the offer (thereby increasing the taxable income
allocable to their units in each such year), but would have no effect on the
total depreciation deductions available over the useful lives of the assets of
your partnership.
Elections as to certain tax matters previously made by the old
partnership prior to termination will not be applicable to the new partnership
unless the new partnership chooses to make the same elections.
Additionally, upon a termination for tax purposes, the old
partnership's taxable year will close for all limited partners. In the case of a
remaining limited partner or a partially tendering limited partner reporting on
a tax year other than a calendar year, the closing of the partnership's taxable
year may result in more than 12 months' taxable income or loss of the old
partnership being includible in such limited partner's taxable income for the
year of termination.
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<PAGE> 16
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 10.12% 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 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
39.88% of the outstanding units, we will be able to significantly influence the
outcome of all voting decisions with respect to your partnership. In general, we
will vote the units owned by us in whatever manner we deem to be in our best
interests, which may not be in the interest of other limited partners. This
could (1) prevent non-tendering limited partners from taking action they desire
but that we oppose and (2) enable us to take action desired by us but opposed by
non-tendering limited partners. We also own the company that manages the
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 your agreement of limited
partnership, the operations of any partnership, the business and properties
owned by your partnership, the management compensation payable to your 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
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<PAGE> 17
properties throughout the United States. Based on apartment unit data compiled
by the National Multi-Housing Council, we believe that, as of June 30, 1999,
AIMCO was one of the largest owners and managers of multifamily apartment
properties in the United States, with a total portfolio of 369,404 apartment
units in 2,037 properties located in 49 states, the District of Columbia and
Puerto Rico. AIMCO's Class A Common Stock is listed and traded on the New York
Stock Exchange under the symbol "AIV." As of June 30, 1999, AIMCO:
o owned or controlled 64,640 units in 240 apartment properties;
o held an equity interest in 168,817 units in 887 apartment
properties; and
o managed 136,523 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 and the
Quarterly Report for the quarterly period endeds March 31, 1999 and June 30,
1999 (particularly the management's discussion and analysis of financial
condition and results of operations) and other reports and documents filed by it
with the SEC.
Except as described below in "The Offer -- Section 9" and "The Offer --
Section 11," neither we nor, to the best of our knowledge, any of the persons
listed on Annex I attached hereto, (i) beneficially own or have a right to
acquire any units, (ii) has effected any transaction in the units in the past 60
days, or (iii) have any contract, arrangement, understanding or relationship
with any other person with respect to any securities of your partnership,
including, but not limited to, contracts, arrangements, understandings or
relationships concerning transfer or voting thereof, joint ventures, loan or
option arrangements, puts or calls, guarantees of loans, guarantees against loss
or the giving or withholding of proxies (except for previous tender offers we
may have conducted for units).
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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 its subsidiaries, AIMCO currently owns, in the aggregate,
approximately 39.88% of your partnership's outstanding limited partnership
units.
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 certain 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 April 14, 1998,
Broad River Properties, L.L.C., then an affiliate of Insignia and now our
affiliate, commenced a tender offer pursuant to which it acquired 8,002 units
(representing approximately 17.9% of the number outstanding) at a cash purchase
price of $500 per unit. On May 13, 1999, we commenced a tender offer for $534
per unit. A total of 1,275 units, representing 2.9% of the outstanding units,
was validly tendered pursuant to the offer.
On August 13, 1998, Cooper River Properties, L.L.C., then an affiliate
of Insignia and now our affiliate, together with Insignia Properties, L.P.,
Insignia Properties Trust, and Insignia Financial Group, Inc., commenced a
tender offer for $600 per unit and purchased 4,533 units.
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 and tenants of properties owned by the
partnerships. The complaint also alleges that the foregoing allegations
constitute violations of various California securities, corporate and
partnership statutes, as well as conversion and common law fraud. The complaint
seeks unspecified compensatory and punitive damages, an injunction blocking the
sale of control of the general partners and a court order directing the
defendants to discharge their fiduciary duties to the plaintiffs. On June 25,
1998, the defendants filed motions seeking dismissal of the action. In lieu of
responding to the motion, plaintiffs have filed an amended complaint. On October
14, 1998, the AIMCO and Insignia defendants filed demurrers to the amended
complaint. The demurrers (which are requests to dismiss the action as a matter
of law) were heard on February 8, 1999, but no decision has been reached by the
Court. While no assurances can be given, we believe that the ultimate outcome of
this litigation will not have a material adverse effect on us.
ALTERNATIVES CONSIDERED BY YOUR GENERAL PARTNER. Before we commenced
this offer, your general partner (which is our subsidiary) considered a number
of alternative transactions. The following is a brief discussion of the
advantages and disadvantages of the alternatives considered by your general
partner.
LIQUIDATION
One alternative would be for the partnership to sell its assets,
distribute the net liquidation proceeds to its partners in accordance with the
agreement of limited partnership, and thereafter dissolve. Partners would be at
liberty to use the net liquidation proceeds after taxes for investment,
business, personal or other purposes, at their option. If your partnership were
to sell its assets and liquidate, you and your partners would not need to rely
upon capitalization of income or other valuation methods to estimate the fair
market value of partnership assets. Instead, such assets would be valued through
negotiations with prospective purchasers (in many cases unrelated third
parties).
However, in the opinion of your general partner (which is our
subsidiary), the present time may not be the most desirable time to sell the
residential real estate assets of your partnership in a private transaction, and
the proceeds realized from any such sale would be uncertain. Liquidation of the
partnership assets may trigger a substantial prepayment penalty under the
mortgages for the properties. Your general partner believes it currently is in
the best interest of your partnership to continue holding its real estate
assets. Although there might be a prepayment penalty of approximately 1 to 2% of
the outstanding balance of the mortgages depending on when
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and under what circumstances they are prepaid, such prepayment penalties are not
a significant factor in determining when a property may be sold. See "The Offer
- - Section 13. Certain Information Concerning Your Partnership - Investment
Objectives and Policies; Sale or Financing of Investments."
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.
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.
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 (v) tender
offer statements,
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<PAGE> 20
solicitation/recommendation statements and beneficial ownership reports on
Schedules 14D-1, 14D-9 and 13D. Our determination of the offer price was based
on our review and analysis of the foregoing information, the other financial
information and the analyses concerning the partnership summarized below.
VALUATION OF UNITS. We determined our offer price by estimating the
value of each property owned by your partnership using the direct capitalization
method. This method involves applying a capitalization rate to your
partnership's annual property income. A capitalization rate is a percentage
(rate of return), commonly applied by purchasers of 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.
Net Income (Loss).................... $ (648,000)
Other Non-Operating Expense.......... 4,849,000
Depreciation......................... 4,995,000
Equity in Income of Joint Venture... 6,000
Interest............................. 6,414,000
------------
Property Income...................... $ 15,580,000
Although the direct capitalization method is a widely accepted way of
valuing real estate, there are a number of other methods available to value real
estate, each of which may result in different valuations of a property. Further,
in applying the direct capitalization method, others may make different
assumptions and obtain different results. The proceeds that you would receive if
you sold your units to someone else or if your partnership were actually
liquidated might be higher than our offer price. We determined our offer price
as follows:
o First, we estimated the value of the 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
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<PAGE> 21
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.
<TABLE>
<CAPTION>
FISCAL 1998 CAPITALIZATION ESTIMATED GROSS
PROPERTY PROPERTY INCOME RATE PROPERTY VALUE
-------- --------------- -------------- -------------
<S> <C> <C> <C>
Briarwood Apartments $ 143,000 11.25% $ 1,269,000
Chambers Ridge Apartments 807,000 10.50% 7,690,000
Gateway Gardens Apartments 960,000 11.25% 8,538,000
Hunters Glen Apartments - IV 1,266,000 9.50% 13,329,000
Hunters Glen Apartments - V 1,520,000 9.50% 15,999,000
Hunters Glen Apartments - VI 1,621,000 9.50% 17,067,000
Pickwick Place Apartments 7,375,000
Southpointe Apartments 11,000,000
Twin Lake Towers Apartments 1,711,000 9.90% 17,283,000
-----------
Estimated Total Gross Property Value $99,550,000
</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 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 $25,728,981. 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>
Gross valuation of partnership properties ......................... $ 99,550,000
Plus: Cash and cash equivalents .................................. 9,031,680
Plus: Other partnership assets, net of security deposits ......... 3,415,582
Less: Mortgage debt, including accrued interest .................. (68,843,289)
Less: Accounts payable and accrued interest ...................... (245,768)
Less: Other liabilities .......................................... (2,348,976)
------------
Partnership valuation before taxes and certain costs .............. $ 40,559,228
Less: Disposition fees ........................................... 0
Less: Extraordinary capital expenditures and deferred maintenance (9,852,747)
Less: Closing costs .............................................. (4,977,500)
------------
Estimated net valuation of your partnership ....................... $ 25,728,981
Percentage of estimated net valuation allocated to holders of units 99%
------------
Estimated net valuation of units .................................. $ 25,471,601
Total number of units ................................... 44,718
------------
Estimated valuation per unit ...................................... $ 570
------------
Cash consideration per unit ....................................... $ 570
============
</TABLE>
18
<PAGE> 22
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, the
operating results, if any since March 31, 1999 as to income and expenses of the
property, other projected amounts and the capitalization rates that may be used
by prospective buyers if your partnership assets were to be liquidated.
In addition, these estimates are based upon certain information
available to your general partner (which is our subsidiary) at the time the
estimates were computed, and no assurance can be given that the same conditions
analyzed by it in arriving at the estimates of value would exist at the time of
the offer. The assumptions used have been determined by the general partner of
your partnership in good faith, and, where appropriate, are based upon current
and historical information regarding your partnership and current real estate
markets, and have been highlighted below to the extent critical to the
conclusions of the general partner of your partnership. Actual results may vary
from those set forth below based on numerous factors, including interest rate
fluctuations, tax law changes, supply and demand for similar apartment
properties, the manner in which your partnership's 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 2035, unless sooner terminated as provided
in the agreement or by law. Limited partners could, as an alternative to
tendering their units, take a variety of possible actions, including voting to
liquidate the partnership or amending the agreement of limited partnership to
authorize limited partners to cause the partnership to merge with another entity
or engage in a "roll-up" or similar transaction.
COMPARISON TABLE
<TABLE>
<CAPTION>
PER UNIT
--------
<S> <C>
Cash offer price .................................... $570
Alternatives.........................................
Prior cash offer price............................ $534
Prices on secondary market........................ $30 to $671.22
Estimated liquidation proceeds.................... $570
General partner's estimate of net asset value..... $948
Affiliate's estimate of net liquidation value..... $911.06
</TABLE>
19
<PAGE> 23
Prior Tender Offer
On May 13, 1999, we commenced a tender offer for $534 per unit. A total
of 1,275 units, representing 2.9% of the outstanding units, was validly tendered
pursuant to the offer.
PRICES ON SECONDARY MARKET
Secondary market sales information is not a reliable measure of value
because of the limited amount of any known trades. At present, privately
negotiated sales and sales through intermediaries are the only means which may
be available to a limited partner to liquidate an investment in units (other
than our offer) because the units are not listed or traded on any exchange or
quoted on NASDAQ, on the Electronic Bulletin Board, or in "pink sheets."
Secondary sales activity for the units, including privately negotiated sales,
has been limited and sporadic.
Prior to our acquisition of the general partner, the general partner
received from time to time information on the prices at which units were sold;
however, it did not regularly receive or maintain information regarding the bid
or asked quotations of secondary market makers, if any. The prices in the table
below are based solely on information provided to the general partner by sellers
and buyers of units transferred in sale transactions (i.e., excluding
transactions believed to result from the death of a limited partner, rollover to
an IRA account, establishment of a trust, trustee to trustee transfers,
termination of a benefit plan, distributions from a qualified or nonqualified
plan, uniform gifts to minors, abandonment of units or similar non-sale
transactions). The transfer paperwork submitted to the general partner often did
not include the requested price information or contained conflicting information
as to the actual sales price. Sale prices not reported or disclosed could exceed
the reported prices. According to information obtained from your general partner
(which is our subsidiary) from January 1, 1996 to September 30, 1998, an
aggregate of 12,102 units (representing approximately 27.07% of the total
outstanding units) were transferred (including any tender offers) in sale
transactions. Set forth in the table below are the high and low sales prices of
units for the quarterly periods from January 1, 1996 to September 30, 1998, as
reported by your general partner:
SALES PRICES OF PARTNERSHIP UNITS, AS REPORTED BY THE GENERAL PARTNER
<TABLE>
<CAPTION>
HIGH LOW
------- -------
<S> <C> <C>
Third Quarter........................................................ $535.00 $175.00
Second Quarter....................................................... 450.00 175.00
First Quarter........................................................ 403.12 30.00
Fiscal Year Ended December 31, 1997:
Fourth Quarter....................................................... 410.00 110.00
Third Quarter........................................................ 406.10 65.10
Second Quarter....................................................... 421.00 125.00
First Quarter........................................................ 420.00 35.00
Fiscal Year Ended December 31, 1996:
Fourth Quarter....................................................... 450.00 125.00
Third Quarter........................................................ 397.17 65.00
Second Quarter....................................................... 395.95 110.00
First Quarter........................................................ 392.00 110.00
</TABLE>
Set forth below are the high and low sale prices of units for the years
ended December 31, 1996, 1997
20
<PAGE> 24
and 1998 and for the first two months of 1999, as reported by The Partnership
Spectrum, which is an independent, third-party source. The gross sales prices
reported by The Partnership Spectrum do not necessarily reflect the net sales
proceeds received by sellers of units, which typically are reduced by
commissions and other secondary market transaction costs to amounts less than
the reported price. The Partnership Spectrum represents only one source of
secondary sales information, and other services may contain prices for the units
that equal or exceed sales prices reported in The Partnership Spectrum. We do
not know whether the information compiled by The Partnership Spectrum is
accurate or complete.
SALES PRICES OF PARTNERSHIP UNITS, AS REPORTED BY THE PARTNERSHIP SPECTRUM
<TABLE>
<CAPTION>
HIGH LOW
------- -------
<S> <C> <C>
Fiscal Year Ended December 31, 1999
First Two Months................................................... -- --
Fiscal Year Ended December 31, 1998:...................................... $616.00 $340.00
Fiscal Year Ended December 31, 1997:...................................... 450.50 300.00
Fiscal Year Ended December 31, 1996:...................................... 455.00 212.00
</TABLE>
Set forth in the table below are the high and low sales prices of units
for the year ended December 31, 1998, the first quarter of 1999 and the two
months ended May 31, 1999, as reported by the American Partnership Board, which
is an independent, third-party source. The gross sales prices reported by
American Partnership Board do not necessarily reflect the net sales proceeds
received by sellers of units, which typically are reduced by commissions and
other secondary market transaction costs to amounts less than the reported
prices. The American Partnership Board represents one source of secondary sales
information, and the other services may contain prices for units that equal or
exceed sales prices reported by the American Partnership Board. We do not know
whether the information compiled by the American Partnership Board is accurate
or complete.
SALES PRICES OF PARTNERSHIP UNITS, AS REPORTED BY THE AMERICAN PARTNERSHIP BOARD
<TABLE>
<CAPTION>
HIGH LOW
------- -------
<S> <C> <C>
Fiscal Year Ended December 31, 1999
Two Months ended May 31, 1999...................... $575.00 $575.00
First Quarter...................................... 601.10 601.10
Fiscal Year Ended December 31, 1998:.................... 671.22 386.00
</TABLE>
ESTIMATED LIQUIDATION PROCEEDS
Liquidation value is a measure of the price at which the assets of your
partnership would sell if disposed of in an arms-length transaction between a
willing buyer and your partnership, each having access to relevant information
regarding the historical revenues and expenses of the business. Your general
partner (which is our subsidiary) estimated the liquidation value of units using
the same direct capitalization method and assumptions as we did in valuing the
units for the offer price. The liquidation analysis 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
21
<PAGE> 25
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 $948. This estimated net asset value is based on a
hypothetical sale of the partnership's properties and the joint venture's
property 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 and the joint venture. This net asset
value does not take into account (i) timing considerations, (ii) costs
associated with winding up the partnership and the joint venture, (iii) the
distribution paid by your partnership of $14.54 per unit for the fiscal year
ended December 31, 1998, or (iv) the $10,102,852 in extraordinary capital
expenditures and 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.
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 a tender offer by an unaffiliated party to purchase units for
$360 each which closed in September 1998. That estimate of your partnership's
net liquidation value per unit as of June 30, 1998 was $911.06. This estimated
net liquidation value is based on an income capitalization approached similar to
the one we used, adjusted for your partnership's other assets and liabilities
(excluding prepaid and deferred expenses and security deposits). Four percent
was then deducted from the resulting amount to cover the estimated costs of
selling the properties. This final amount was then divided by the number of
units outstanding to obtain the $911.06 per unit. While this value is higher
than our offer price per unit, because different income and capitalization rates
were used and we believe that the income capitalization amounts used overstate
the value of the properties. Further, such amount did not take into account (i)
timing considerations, (ii) costs associated with winding up the partnership and
the joint venture, (iii) the distribution paid by your partnership of $14.54 per
unit for the fiscal year ended December 31, 1998, or (iv) the $10,102,852 in
extraordinary capital expenditures and deferred maintenance costs.
ALLOCATION OF CONSIDERATION. We have allocated to the limited partners
the amount of the estimated net valuation of your partnership based on your
partnership's agreement of limited partnership as if your partnership was being
liquidated at the current time.
SECTION 10. POSITION OF THE GENERAL PARTNER OF YOUR PARTNERSHIP WITH RESPECT
TO THE OFFER.
The general partner of your partnership believes the offer price and
the structure of the transaction are fair to the limited partners. In making
such determination, the general partner considered all of the factors and
22
<PAGE> 26
information set forth below, but did not quantify or otherwise attach particular
weight to any such factors or information:
o The offer gives you an opportunity to make an individual
decision on whether to tender your units or to continue to
hold them.
o Our offer price, and the method we used to determine our offer
price.
o The fact that the price offered for your units is based on an
estimated value of your partnership's properties that has been
determined using a method believed to reflect the valuation of
such assets by buyers in the market for similar assets.
o Prices at which the units have recently sold, to the extent
such information is available.
o The absence of an established trading market for your units.
o An analysis of possible alternative transactions, including a
property sale or refinancing, or a liquidation of the
partnership.
o An evaluation of the financial condition and results of
operations of your partnership including the decrease in
property income of your partnership from $2,025,000 for the
year ended December 31, 1997 to $684,000 for the year ended
December 31, 1998.
The general partner of your partnership makes no recommendation as to
whether you should tender or refrain from tendering your units. Although the
general partner believes the offer is fair, you must make your own decision
whether or not to participate in the offer, based upon a number of factors,
including your financial position, your need or desire for liquidity, other
financial opportunities available to you, and your tax position and the tax
consequences to you of selling your units.
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
23
<PAGE> 27
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 of your partnership
received total fees and reimbursements of $453,000 in 1996, $431,000 in 1997 and
$639,000 in 1998. The reimbursement amount to your general partner for the 1998
fiscal year included $56,000 which was paid to an affiliate of your general
partner for costs incurred in connection with construction oversight services.
The residential property manager received management fees of $1,033,000 in 1996,
$1,029,000 in 1997 and $1,034,000 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. See "The Offer - Section 9." 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;
24
<PAGE> 28
or any other material changes in your partnership's structure or business. We or
our affiliates may loan funds to your partnership which may be secured by your
partnership's property. If any such loans are made, upon default of such loans,
the lender could seek to foreclose on the loan and related mortgage or security
interest. However, we expect that consistent with your general partner's
fiduciary obligations, the general partner will seek and review opportunities
(including opportunities identified by us) to engage in transactions which could
benefit your partnership, such as sales or refinancings of assets or a
combination of the partnership with one or more other entities, with the
objective of seeking to maximize returns to limited partners.
We have been advised that the possible future transactions the general
partner expects to consider on behalf of your partnership include: (1) payment
of extraordinary distributions; (2) refinancing, reducing or increasing existing
indebtedness of the partnership; (3) sales of assets, individually or as part of
a complete liquidation; and (4) mergers or other consolidation transactions
involving the partnership. Any such merger or consolidation transaction could
involve other limited partnerships in which your general partner or its
affiliates serve as general partners, or a combination of the partnership with
one or more existing, publicly traded entities (including, possibly, affiliates
of AIMCO), in any of which limited partners might receive cash, common stock or
other securities or consideration. There is no assurance, however, as to when or
whether any of the transactions referred to above might occur. If any such
transaction is effected by the partnership and financial benefits accrue to the
limited partners of your partnership, we will participate in those benefits to
the extent of our ownership of units. The agreement of limited partnership
prohibits limited partners from voting on actions taken by the partnership,
unless otherwise specifically permitted therein. Limited partners may vote on a
liquidation, and if we are successful in acquiring a substantial number of units
pursuant to the offer, we will be able to control the outcome of any such vote.
Even if we acquire a lesser number of units pursuant to the offer, however,
because we currently own approximately 39.88% 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 Partners XII was organized on May 26, 1983, under the
laws of the State of California. Its primary business is real estate ownership
and related operations. Your partnership was formed for the purpose of making
investments in various types of real properties which offer potential capital
appreciation and cash distributions to its limited partners.
Your partnership's investment portfolio currently consists of the
following nine residential apartment complexes and an interest in a real estate
joint venture: Briarwood Apartments, a 73-unit complex in Cedar Rapids, Iowa;
Chambers Ridge Apartments, a 324-unit complex in Harrisburg, Pennsylvania;
Gateway Gardens Apartments, a 328-unit complex in Cedar Rapids, Iowa; Hunters
Glen Apartments-IV, a 264-unit complex in Plainsboro, New Jersey; Hunters Glen
Apartments-V, a 304-unit complex in Plainsboro, New Jersey; Hunters Glen
Apartments-VI, a 328-unit complex in Plainsboro, New Jersey; Pickwick Place
Apartments, a 336-unit complex in Indianapolis, Indiana; Southpointe Apartments,
a 499-unit complex in Bedford Heights, Ohio; Twin Lake Towers Apartments, a
399-unit complex in Westmont, Illinois; and a 44.5% interest in Princeton
Meadows Joint Venture, which owns Princeton Meadows Golf Course in Princeton,
New Jersey. On February 26, 1999, the joint venture sold its only investment
property, Princeton Meadows Golf Course, to an unaffiliated third party. On
January 4, 1999, your partnership sold its only commercial property, Cooper
Point Plaza, 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
25
<PAGE> 29
owned by your partnership. As of December 31, 1998, there were 44,718 units
issued and outstanding, which were held of record by 2,571 limited partners of
record. 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 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 near term. In making this assessment, your general partner
compared the occupancy and rental rates at the properties for each of 1997 and
1998, as described in this Section under "Average Annual Rental Rates and
Occupancy." In particular, the general partner noted that it expects to spend
approximately $9,453,000 for capital improvements at the properties in 1999 to
repair and update the properties. Although there can be no assurance as to
future performance, however, these expenditures are expected to improve the
desirability of the property to tenants. The general partner does not believe
that a sale of the 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.
ORIGINALLY ANTICIPATED TERM OF PARTNERSHIP. Your partnership's
prospectus, dated February 14, 1994, pursuant to which units in your partnership
were sold, indicated that your partnership was intended to be self-liquidating
and that it was anticipated that the partnership's properties would be sold
within 5 to 8 years of their acquisition, provided market conditions permit. The
prospectus also indicated that there could be no assurance that the partnership
would be able to so liquidate and that, unless sooner terminated as provided in
the partnership agreement, the existence of the partnership would continue until
the year 2035. The partnership currently owns nine residential properties and a
44.5% interest in a joint venture, which owns a golf course. Your general
partner (which is our subsidiary) 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. We cannot predict when any of the properties will be sold
or otherwise disposed of. However, there is no current plan or intention to sell
the properties in the near future.
Under your partnership's agreement of limited partnership, the term of
the partnership will continue until
26
<PAGE> 30
December 31, 2035, unless sooner terminated as provided in the agreement or by
law. Limited partners could, as an alternative to tendering their units, take a
variety of possible actions, including voting to liquidate the partnership or
amending the agreement of limited partnership to authorize limited partners to
cause the partnership to merge with another entity or engage in a "roll-up" or
similar transaction.
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
$9,453,000 for 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 then 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 Partners XII for the years ended December 30, 1998 and
1997 is based on audited financial statements. The summary financial information
for the six months ended June 30, 1999 and 1998 is based on unaudited financial
statements. This information should be read in conjunction with such financial
statements, including notes thereto, and "Management's Discussion and Analysis
of Financial Condition and Results of Operations of Your Partnership" in the
Annual Report on Form 10-KSB of your partnership for the year ended December 31,
1998.
ANGELES PARTNERS XII
(IN THOUSANDS, EXCEPT PER UNIT DATA)
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED FOR THE YEAR ENDED
JUNE 30, DECEMBER 31,
--------------------- ----------------------
1999 1998 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
OPERATING DATA:
Total Revenues ................................ $ 13,131 $ 10,870 $ 22,411 $ 21,115
Net Income (Loss) ............................. 3,108 (516) (684) (2,025)
Net Income per limited partnership unit ....... 68.81 (11.43) (15.14) (44.83)
Distributions per limited partnership unit .... 55.79 -- (14.54) --
JUNE 30, DECEMBER 31,
--------------------- ----------------------
1999 1998 1998 1997
-------- -------- -------- --------
BALANCE SHEET DATA:
Cash and Cash Equivalents ..................... $ 8,792 $ 6,891 $ 7,611 $ 6,459
Real Estate, Net of Accumulated Depreciation .. 32,378 38,275 37,138 39,990
Total Assets .................................. 45,737 49,923 49,543 51,365
Notes Payable ................................. 67,560 71,736 71,351 72,105
General Partners' Capital (Deficit) ........... (639) (636) (638) (631)
Limited Partners' Capital (Deficit) ........... (24,729) (24,495) (25,311) (23,984)
Partners' Capital (Deficit) ................... (25,368) (25,131) (25,949) (24,615)
Total Distributions ........................... (3,177) -- (650) --
Net increase (decrease) in cash and cash ...... 1,181 432 1,152 1,632
equivalents
Net cash provided by operating activities ..... 2,706 1,527 3,835 4,056
</TABLE>
27
<PAGE> 31
DESCRIPTION OF PROPERTIES. The following shows the location, the date
of purchase, the nature of your partnership's ownership interest in and the use
of each of your partnership's properties.
<TABLE>
<CAPTION>
Date of
Property Purchase Type of Ownership Use
-------- -------- ----------------- ---
<S> <C> <C> <C>
Briarwood Apartments 06/25/85 Fee ownership subject to first and Apartment
Cedar Rapids, Iowa second mortgages (1) 73 units
Chambers Ridge Apartments 07/26/84 Fee ownership subject to first and Apartment
Harrisburg, Pennsylvania second mortgages (1) 324 units
Gateway Gardens Apartments 12/21/84 Fee ownership subject to first and Apartment
Cedar Rapids, Iowa second mortgages (1) 328 units
Hunters Glen Apartments - IV 01/31/85 Fee ownership subject to a first Apartment
Plainsboro, New Jersey mortgage (1) 264 units
Hunters Glen Apartments - V 01/31/85 Fee ownership subject to first and Apartment
Plainsboro, New Jersey second mortgages (1) 304 units
Hunters Glen Apartments - VI 01/31/85 Fee ownership subject to first and Apartment
Plainsboro, New Jersey second mortgages (1) 328 units
Pickwick Place Apartments 05/11/84 Fee ownership subject to a first Apartment
Indianapolis, Indiana mortgage (1) 336 units
Southpointe Apartments 06/12/85 Fee ownership subject to a first Apartment
Bedford Heights, Ohio mortgage 499 units
Twin Lake Towers Apartments 03/30/84 Fee ownership subject to first and Apartment
Westmont, Illinois second mortgages (1) 399 units
</TABLE>
(1) Property is held by a limited partnership which your partnership ultimately
owns a 100% interest in.
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.
28
<PAGE> 32
<TABLE>
<CAPTION>
Gross
Carrying Accumulated Federal
Property Value Depreciation Rate Method Tax Basis
-------- -------- ------------ --------- ------ --------------
(in thousands) (in thousands)
<S> <C> <C> <C> <C> <C>
Briarwood Apartments $ 1,867 $ 1,190 5-40 yrs. (1) $ 664
Chambers Ridge Apartments 9,986 6,796 5-40 yrs. (1) 3,257
Gateway Gardena Apartments 7,816 5,358 5-40 yrs. (1) 2,330
Hunters Glen Apartments - IV 11,290 6,846 5-40 yrs. (1) 4,240
Hunters Glen Apartments - V 13,132 7,991 5-40 yrs. (1) 4,874
Hunters Glen Apartments - VI 14,168 8,607 5-40 yrs. (1) 5,204
Pickwick Place Apartments 9,626 5,712 5-40 yrs. (1) 3,663
Southpointe Apartments 10,138 6,890 5-40 yrs. (1) 3,007
Twin Lake Tower Apartments 15,525 10,479 5-40 yrs. (1) 4,241
-------- ------- -------
$102,413 $65,275 $36,068
======== ======= =======
</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.
<TABLE>
<CAPTION>
Principal
Principal Stated Balance
Balance At Interest Period Maturity Due At
Property December 31, 1998 Rate Amortized Date Maturity
-------- ----------------- -------- --------- -------- --------------
(in thousands) (in thousands)
<S> <C> <C> <C> <C> <C>
Briarwood Apartments
1st mortgage $ 1,535 7.83% 28.67 yrs 10/2003 $ 1,404
2nd mortgage 50 7.83%(1) 10/2003 50
Chambers Ridge Apartments
1st mortgage 5,304 7.83% 28.67 yrs 10/2003 4,849
2nd mortgage 174 7.83%(1) 10/2003 174
Gateway Gardens
1st mortgage 6,187 7.83% 28.67 yrs 10/2003 5,657
2nd mortgage 203 7.83%(1) 10/2003 203
Hunters Glen Apartments - IV
1st mortgage 8,267 8.43% 28.67 yrs 10/2003 7,787
Hunters Glen Apartments - V
1st mortgage 8,662 7.83% 28.67 yrs 10/2003 7,920
2nd mortgage 285 7.83%(1) 10/2003 285
Hunters Glen Apartments - VI
1st mortgage 9,016 7.83% 28.67 yrs 10/2003 8,243
2nd mortgage 297 7.83%(1) 10/2003 297
Pickwick Place Apartments
1st mortgage 6,383 9.1% 28 yrs 05/2005 5,775
Southpointe Apartments
1st mortgage 11,000 8.59%(1) 01/2002 11,000
(in default) (2)
Additional borrowing
(in default) (2) 17 9.00%(2) 01/2002 1
Twin Lake Towers
Apartments
1st mortgage 10,700 7.83% 28.67 yrs 10/2003 9,782
2nd mortgage 352 7.83%(1) 10/2003 352
--------- ---------
72,338 $ 63,822
=========
Less unamortized discounts (987)
---------
$ 71,351
=========
</TABLE>
29
<PAGE> 33
(1) Interest only payments.
(2) The mortgage note secured by Southpointe Apartments was modified as of
December 31, 1997. The modification agreement extended the term of the
mortgage note from July 1999 to January 2002. The lender also agreed to
advance to the partnership an amount up to $180,000 for the payment of
real estate taxes. The lender advanced approximately $23,000 to the
partnership for this purpose in 1997.
AVERAGE ANNUAL RENTAL RATES AND OCCUPANCY. The following shows the
average annual rental rates and occupancy percentages for each of your
partnership's properties during the past two years.
<TABLE>
<CAPTION>
Average Annual Rental Rates Average Annual Occupancy
---------------------------- ------------------------
Property 1998 1997 1998 1997
-------- ---- ---- ---- ----
<S> <C> <C> <C> <C>
Briarwood Apartments $6,638/unit $6,485/unit 97% 96%
Chambers Ridge Apartments 6,928/unit 6,874/unit 92% 91%
Gateway Gardens Apartments 6,507/unit 6,331/unit 96% 94%
Hunters Glen Apartments - IV 8,950/unit 8,702/unit 97% 96%
Hunters Glen Apartments - V 8,995/unit 8,831/unit 97% 96%
Hunters Glen Apartments - VI 8,846/unit 8,712/unit 96% 96%
Pickwick Place Apartments 6,947/unit 6,805/unit 95% 91%
Southpointe Apartments 5,726/unit 5,654/unit 70% 63%
Twin Lake Towers Apartments 8,635/unit 8,269/unit 97% 97%
</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>
Briarwood Apartments $ 77(1) 3.48%
Chambers Ridge Apartments 161 2.78%
Gateway Gardens Apartments 257(2) 3.07%
Hunters Glen Apartments - IV 296 2.62%
Hunters Glen Apartments - V 320 2.62%
Hunters Glen Apartments - VI 324 2.62%
Pickwick Place Apartments 204(1) 7.39%
Southpointe Apartments 237 5.93%
Twin Lake Towers Apartments 272(1) 5.52%
</TABLE>
(1) Represents 1997 billing. Tax bills for 1998 not yet received.
(2) Represents a fiscal year ending June 30, 1998. Since the properties'
fiscal year end is different from the tax year end, the actual tax
expense for this property for its fiscal year ended June 30, 1998 is
partially based on 1997 calendar year rates which may be slightly
different from 1998 rates.
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.
30
<PAGE> 34
DISTRIBUTIONS. The following table shows, for each of the years
indicated, the distributions paid per unit for such years.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31 AMOUNT
- ---------------------- ------
<S> <C>
1994..................... $ 0
1995..................... 0
1996..................... 0
1997..................... 0
1998..................... 14.54
-----------
Total $ 14.54
===========
</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:
<TABLE>
<CAPTION>
CHAMBERS GATEWAY HUNTERS TWIN LAKE
BRIARWOOD RIDGE GARDENS GLEN IV TOWERS
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Total Revenues $ 509,316 $ 2,190,900 $ 2,259,650 $ 2,623,916 $ 3,483,213
Operating Expenses (216,079) (1,105,105) (1,091,615) (1,104,046) (1,361,826)
Replacement Reserves - Net -- -- -- -- --
Debt Service (147,120) (542,850) (592,944) (779,262) (1,024,668)
Capital Expenditures -- -- (575,563) -- --
----------- ----------- ----------- ----------- -----------
Net Cash Flow $ 146,117 $ 542,945 $ (472) $ 740,608 $ 1,096,719
</TABLE>
<TABLE>
<CAPTION>
HUNTERS HUNTERS PICKWICK
GLEN V GLEN VI PLACE SOUTHPOINTE
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Total Revenues $ 2,959,852 $ 3,195,677 $ 2,376,919 $ 2,367,318
Operating Expenses (1,178,118) (1,285,388) (1,233,903) (1,485,556)
Replacement Reserves - Net -- -- 7,000 --
Debt Service (830,180) (864,010) (652,112) (944,904)
Capital Expenditures -- -- -- --
----------- ----------- ----------- -----------
Net Cash Flow $ 951,554 $ 1,046,279 $ 497,904 $ (63,142)
</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
recategorized as expenses when the financial statements are audited and
presented in accordance with
31
<PAGE> 35
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 $22,411,000, operating expenses of $8,571,000
and replacement reserves and capital expenditures of $568,563.
BENEFICIAL OWNERSHIP OF INTERESTS IN YOUR PARTNERSHIP. Together with
our subsidiaries, we currently own, in the aggregate, approximately 39.88% of
your partnership's limited partnership units. Except as set forth above, neither
we, nor, to the best of our knowledge, any of our affiliates, (i) beneficially
own or have a right to acquire any units, (ii) has effected any transactions in
the units in the past 60 days, or (iii) have any contract, arrangement,
understanding or relationship with any other person with respect to any
securities of your partnership, including, but not limited to, contracts,
arrangements, understandings or relationships concerning transfer or voting
thereof, joint ventures, loan or option arrangements, puts or calls, guarantees
of loans, guarantees against loss or the giving or withholding of proxies.
COMPENSATION PAID TO THE GENERAL PARTNER AND ITS AFFILIATES. The
following table shows, for each of the years indicated, compensation paid to
your general partner and its affiliates on a historical basis.
<TABLE>
<CAPTION>
PARTNERSHIP PROPERTY
FEES AND MANAGEMENT
YEAR EXPENSES FEES
---- -------- ----------
<S> <C> <C>
1995......... $443,417 $1,031,693
1996......... 453,000 1,033,000
1997......... 431,000 1,029,000
1998......... 639,000 1,034,000
</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.
Decisions with respect to the day-to-day management of your partnership
are the responsibility of the general partner. Because the general partner of
your partnership is our affiliate, we control the management of your
partnership. Under your partnership's agreement of limited partnership, limited
partners holding a majority of the outstanding units must approve certain
extraordinary transactions, including the removal of the general partner, the
addition of a new general partner, most amendments to the partnership agreement
and the sale of all or substantially all of your partnership's assets. If we
acquire all the units we are offering to purchase, we will own a majority of the
outstanding units and will have the ability to control any vote of the limited
partners.
SECTION 15. SOURCE OF FUNDS.
We expect that approximately $6,895,866 will be required to purchase
all of the 12,098.01 limited partnership units that we are seeking in this offer
(exclusive of fees and expenses estimated to be $11,500). For
32
<PAGE> 36
more information regarding fees and expenses, see "The Offer - Section 19. Fees
and Expenses" in the Offer to Purchase.
In addition to this offer, we are concurrently making offers to acquire
interests in approximately 100 other limited partnerships. If all such offers
were fully subscribed for cash, we would be required to pay approximately $260
million for all such units. If for some reason we did not have such funds
available we might extend this offer for a period of time sufficient for us to
obtain additional funds, or we might terminate this offer. However, based on our
past experience with similar offers, we do not expect all such offers to be
fully subscribed. Also, in some offers, investors have been offered a choice of
cash or securities. As a result, we expect that the funds that will be necessary
to consummate all the offers will be substantially less than $200 million. We
believe that we have sufficient cash on hand and available sources of financing
to pay such amounts. As of March 31, 1999, we had $38,000,000 of cash on hand
and $145,000,000 available for borrowing under our existing lines of credit.
Under our secured $300 million revolving credit facility with Bank of
America, BankBoston, N.A and First Union National Bank, AIMCO Properties, L.P.
is the borrower and all obligations thereunder are guaranteed by AIMCO and
certain of its subsidiaries. The credit facility includes a swing line of up to
$30 million. The obligations under the credit facility are secured by AIMCO
Properties, L.P.'s pledge of its stock ownership in certain subsidiaries of
AIMCO as well as a pledge of its interests in notes issued by it to certain
subsidiaries of AIMCO. The annual interest rate under the credit facility is
based on either LIBOR or a base rate which is the higher of Bank of America's
reference rate or 0.5% over the federal funds rate, plus, in either case, an
applicable margin. The margin ranges between 2.05% and 2.55% in the case of
LIBOR-based loans and between 0.55% and 1.05% in the case of base rate loans,
based upon a fixed charge coverage ratio. The credit facility expires on July
31, 2001 unless extended at the discretion of AIMCO Properties, L.P., at which
time the revolving facility would be converted into a term loan for up to two
successive one-year periods. The financial covenants contained in the credit
facility require us to maintain a ratio of debt to gross asset value of no more
than 0.55 to 1.0, and an interest coverage ratio of 2.25 to 1.0, and a fixed
charge coverage ratio of at least 1.7 to 1.0 through September 31, 1999 and 1.75
to 1.0 thereafter. In addition, the credit facility limits us from distributing
more than 80% of our Funds From Operations (as defined) (or such amounts as may
be necessary for us to maintain our status as a REIT), imposes minimum net worth
requirements and provides other financial covenants related to certain of our
assets and obligations.
SECTION 16. DISSENTERS' RIGHTS.
Neither the agreement of limited partnership of your partnership nor
applicable law provides any right for you to have your units appraised or
redeemed in connection with, or as a result of, our offer. You have the
opportunity to make an individual decision on whether or not to tender your
units in the offer.
SECTION 17. CONDITIONS OF THE OFFER.
Notwithstanding any other provisions of our offer, we will not be
required to accept for payment and pay for any units tendered pursuant to our
offer, may postpone the purchase of, and payment for, units tendered, and may
terminate or amend our offer if at any time on or after the date of this offer
to purchase and at or before the expiration of our offer (including any
extension thereof), any of the following shall occur or may be reasonably
expected to occur:
(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
33
<PAGE> 37
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 25 basis point increase in
LIBOR, the price of the 10-year Treasury Bond or the 30-year Treasury Bond, or
at least a 7.5% decrease in the S&P 500 Index, the Morgan Stanley REIT Index, in
each case from the date hereof, (iii) any material adverse change in the
commercial mortgage financing markets, (iv) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States (not existing on the date hereof), (vi) a commencement of a war,
conflict, armed hostilities or other national or international calamity directly
or indirectly involving the United States (not existing on the date hereof),
(vii) any limitation (whether or not mandatory) by any governmental authority
on, or any other event which, in our reasonable judgment, might affect the
extension of credit by banks or other lending institutions, or (viii) in the
case of any of the foregoing existing at the time of the commencement of the
offer, in our reasonable judgment, a material acceleration or worsening thereof;
or
(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
(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
34
<PAGE> 38
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; or
(i) a minimum of 35% of the units has not been validly tendered.
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.
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
35
<PAGE> 39
has already been filed) and any required amendments thereto. While there is no
present intent to delay the purchase of units tendered pursuant to the offer
pending receipt of any such additional approval or the taking of any such
action, there can be no assurance that any such additional approval or action,
if needed, would be obtained without substantial conditions or that adverse
consequences might not result to your partnership or its business, or that
certain parts of its business might not have to be disposed of or other
substantial conditions complied with in order to obtain such approval or action,
any of which could cause us to elect to terminate the offer without purchasing
units thereunder. Our obligation to purchase and pay for units is subject to
certain conditions, including conditions related to the legal matters discussed
in this Section 18.
ANTITRUST. We do not believe that the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, is applicable to the acquisition of units
contemplated by our offer.
MARGIN REQUIREMENTS. The units are not "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System and,
accordingly, those regulations generally are not applicable to our offer.
STATE LAWS. We are not aware of any jurisdiction in which the making of
our offer is not in compliance with applicable law. If we become aware of any
jurisdiction in which the making of the offer would not be in compliance with
applicable law, we will make a good faith effort to comply with any such law.
If, after such good faith effort, we cannot comply with any such law, the offer
will not be made to (nor will tenders be accepted from or on behalf of)
unitholders residing in such jurisdiction. In those jurisdictions with
securities or blue sky laws that require the offer to be made by a licensed
broker or dealer, the offer shall be made on behalf of us, if at all, only by
one or more registered brokers or dealers licensed under the laws of that
jurisdiction.
SECTION 19. FEES AND EXPENSES.
Except as set forth in this Section 19, we will not pay any fees or
commissions to any broker, dealer or other person for soliciting tenders of
units pursuant to the offer. We have retained River Oaks Partnership Services,
Inc. to act as Information Agent in connection with our offer. The Information
Agent may contact holders of units by mail, telephone, telex, telegraph and
personal interview and may request brokers, dealers and other nominee limited
partners to forward materials relating to the offer to beneficial owners of the
units. We will pay the Information Agent reasonable and customary compensation
for its services in connection with the offer, plus reimbursement for
out-of-pocket expenses, and will indemnify it against certain liabilities and
expenses in connection therewith, including liabilities under the
Federal securities laws. We will also pay all costs and expenses of printing and
mailing the offer and its legal fees and expenses.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF US NOT CONTAINED HEREIN OR IN THE LETTER OF
TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED.
We have filed with the 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.
36
<PAGE> 40
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 R. 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
Paul J. McAuliffe................................ Executive Vice President -- Capital Markets
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>
NAME PRINCIPAL OCCUPATIONS FOR THE LAST FIVE YEARS
---- -----------------------------------------------
Terry Considine............... Chief Executive Officer of AIMCO and AIMCO-GP
since July 1994. He is the sole owner of
Considine Investment Co. and prior to July 1994
was owner of approximately 75% of Property
Asset Management, L.L.C., Limited Liability
Company, a Colorado limited liability company,
and its related entities (collectively, "PAM"),
one of AIMCO's predecessors. On October 1,
1996, Mr. Considine was appointed Co- Chairman
and director of Asset Investors Corp. and
Commercial Asset Investors, Inc., two other
public real estate investment trusts, and
appointed as a director of Financial Assets
Management, LLC, a real estate investment trust
manager. Mr. Considine has been involved as a
principal in a variety of real estate
activities, including the acquisition,
renovation, development and disposition of
properties. Mr. Considine has also controlled
entities engaged in other businesses such as
television broadcasting, gasoline distribution
and environmental laboratories. Mr. Considine
received a B.A. from Harvard College, a J.D.
from Harvard Law School and was formerly
admitted as a member of the Massachu setts Bar
(inactive).
I-1
<PAGE> 41
NAME PRINCIPAL OCCUPATIONS FOR THE LAST FIVE YEARS
---- -----------------------------------------------
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, develop ment 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 Adminis tration 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
Administra tive 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.
I-2
<PAGE> 42
NAME PRINCIPAL OCCUPATIONS FOR THE LAST FIVE YEARS
---- -----------------------------------------------
Joel F. Bonder................ Mr. Bonder has served as Executive Vice
President and General Counsel of AIMCO since
December 8, 1997. Mr. Bonder has been Executive
Vice President and General Counsel of AIMCO-GP
since July 1998. Prior to joining AIMCO, Mr.
Bonder served as Senior Vice President and
General Counsel of NHP Incorporated from April
1994 until December 1997. Mr. Bonder served as
Vice President and Deputy General Counsel of
NHP Incorporated from June 1991 to March 1994
and as Associate General Counsel of NHP from
1986 to 1991. From 1983 to 1985, Mr. Bonder was
with the Washington, D.C. law firm of Lane &
Edson, P.C. From 1979 to 1983, Mr. Bonder
practiced with the Chicago law firm of Ross and
Hardies. Mr. Bonder received an A.B. from the
University of Rochester and a J.D. from
Washington University School of Law.
Patrick J. Foye............... Mr. Foye has served as Executive Vice President
of AIMCO and AIMCO-GP since May 1998. Prior to
joining AIMCO, Mr. Foye was a partner in the
law firm of Skadden, Arps, Slate, Meagher &
Flom LLP from 1989 to 1998 and was Managing
Partner of the firm's Brussels, Budapest and
Moscow offices from 1992 through 1994. Mr. Foye
is also Deputy Chairman of the Long Island
Power Authority and serves as a member of the
New York State Privatization Council. He
received a B.A. from Fordham College and a J.D.
from Fordham University Law School.
Paul J. McAuliffe............. Mr. McAuliffe was appointed Executive Vice
President -- Capital Markets in February 1999.
Prior to joining AIMCO, Mr. McAuliffe was
Senior Managing Director of Secured Capital
Corporation and prior to that time had been a
Managing Director of Smith Barney, Inc. from
1993 to 1996, where he was a key member of the
underwriting team that led AIMCO's initial
public offering in 1994. Mr. McAuliffe was also
a Managing Director and head of the real estate
group at CS First Boston from 1990 to 1993 and
he was a Principal in the real estate group at
Morgan Stanley & Co., Inc. from 1983 to 1990.
Mr. McAuliffe received a B.A. from Columbia
College and an MBA from University of Virginia,
Darden School.
I-3
<PAGE> 43
NAME PRINCIPAL OCCUPATIONS FOR THE LAST FIVE YEARS
---- -----------------------------------------------
Steven D. Ira................. Mr. Ira is a Co-Founder of AIMCO and has served
as Executive Vice President of AIMCO since July
1994. Mr. Ira has been Executive Vice President
of AIMCO-GP since July 1998. From 1987 until
July 1994, he served as President of PAM. Prior
to merging his firm with PAM in 1987, Mr. Ira
acquired extensive experience in property
management. Between 1977 and 1981 he supervised
the property management of over 3,000 apartment
and mobile home units in Colorado, Michigan,
Pennsylvania and Florida, and in 1981 he joined
with others to form the property management
firm of McDermott, Stein and Ira. Mr. Ira
served for several years on the National
Apartment Manager Accreditation Board and is a
former president of both the National Apartment
Association and the Colorado Apartment
Association. Mr. Ira is the sixth individual
elected to the Hall of Fame of the National
Apartment Association in its 54-year history.
He holds a Certified Apartment Property
Supervisor (CAPS) and a Certified Apartment
Manager designation from the National Apartment
Association, a Certified Property Manager (CPM)
designation from the National Institute of Real
Estate Management (IREM) and he is a member of
the Board of Directors of the National
Multi-Housing Council, the National Apart ment
Association and the Apartment Association of
Metro Denver. Mr. Ira received a B.S. from
Metropolitan State College in 1975.
Harry G. Alcock............... Mr. Alcock has served as Vice President of
AIMCO and AIMCO-GP since July 1996, and was
promoted to Senior Vice President - Acquisi
tions 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
Administra tion degree in Accounting from
Angelo State University and is a Certified
Public Accountant.
I-4
<PAGE> 44
NAME PRINCIPAL OCCUPATIONS FOR THE LAST FIVE YEARS
---- -----------------------------------------------
Richard S. Ellwood............ Mr. Ellwood was appointed a Director of AIMCO
in July 1994 and is currently Chairman of the
Audit Committee. Mr. Ellwood is the 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 became Chairman of the
Compensation Committee in March 1998. Mr.
Martin has served as President and Chief
Executive Officer and a Director of NL
Industries, Inc., a manufacturer of titanium
dioxide, since 1987. Mr. Martin has served as
Chairman of Tremont Corporation, a holding
company operating through its affiliates
Titanium Metals Corporation ("TIMET") and NL
Industries, Inc., since 1990 and as Chief
Executive Officer and a director of Tremont
since 1998. Mr. Martin has served as Chairman
of Timet, an integrated producer of titanium,
since 1987 and Chief Executive Officer since
January 1995. From 1990 until its acquisition
by Dresser Industries, Inc. ("Dresser") in
1994, Mr. Martin served as Chairman of the
Board and Chief Executive Officer of Baroid
Corporation, an oilfield services company. In
addition to Tremont, NL and TIMET, Mr. Martin
is a director of Dresser, which is engaged in
the petroleum services, hydrocarbon and
engineering industries.
Carla R. Stoner............... Ms. Stoner joined AIMCO in July 1997 as Vice
President of Finance and Administration and
became Senior Vice President - Real Estate
Accounting in November 1998. Prior to joining
AIMCO, Ms. Stoner was with National Housing
Partners since 1989. While at National Housing
Partners, Ms. Stoner served as a real estate
controller from 1989 to 1992, as Vice President
of Accounting from 1992 to 1995 and as Interim
Chief Information Officer from 1995 to July
1997. Prior to joining National Housing
Partners, Ms. Stoner was a Senior Auditor with
Deloitte & Touche from 1984 to 1989. Ms. Stoner
received a B.A. in accounting from Virginia
Tech.
I-5
<PAGE> 45
NAME PRINCIPAL OCCUPATIONS FOR THE LAST FIVE YEARS
---- -----------------------------------------------
Thomas L. Rhodes.............. Mr. Rhodes was appointed a Director of AIMCO in
July 1994. Mr. Rhodes has served as the
President and a Director of National Review
magazine since November 30, 1992, where he has
also served as a Director since 1998. From 1976
to 1992 , he held various positions at Goldman,
Sachs & Co. and was elected a General Partner
in 1986 and served as a General Partner from
1987 until November 27, 1992. He is currently
Co-Chairman of the Board , Co-Chief Executive
Officer and a Director of Commercial Assets
Inc. and Asset Investors Corporation. He also
serves as a Director of Delphi Financial Group,
Inc. and its subsidiaries, Delphi International
Ltd., Oracle Reinsurance Company, and the Lynde
and Harry Bradley Foundation. Mr. Rhodes is
Chairman of the Empire Foundation for Policy
Research, a Founder and Trustee of Change NY, a
Trustee of The Heritage Foundation, and a
Trustee of the Manhattan Institute
John D. Smith................. Mr. Smith was appointed a Director of AIMCO in
November 1994. Mr. Smith is Principal and
President of John D. Smith Developments. Mr.
Smith has been a shopping center developer,
owner and 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 Shop ping 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.
I-6
<PAGE> 46
The letter of transmittal and any other required documents should be
sent or delivered by each unitholder or such unitholder's broker, dealer, bank,
trust company or other nominee to the Information Agent at one of its addresses
set forth below.
THE INFORMATION AGENT FOR THE OFFER IS:
RIVER OAKS PARTNERSHIP SERVICES, INC.
<TABLE>
<CAPTION>
By Mail: By Overnight Courier: By Hand:
<S> <C> <C>
P.O. Box 2065 111 Commerce Road 111 Commerce Road
S. Hackensack, N.J. 07606-2065 Carlstadt, N.J. 07072 Carlstadt, N.J. 07072
Attn.: Reorganization Dept. Attn.: Reorganization Dept.
</TABLE>
For information, please call:
TOLL FREE: (888) 349-2005
I-7
<PAGE> 1
LETTER OF TRANSMITTAL
TO TENDER UNITS OF LIMITED PARTNERSHIP IN ANGELES PARTNERS XII
(THE "PARTNERSHIP")
PURSUANT TO AN OFFER TO PURCHASE
DATED AUGUST 19, 1999 (THE "OFFER DATE")
BY
AIMCO PROPERTIES, L.P.
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 5:00 P.M., NEW YORK TIME,
ON SEPTEMBER 16, 1999, UNLESS EXTENDED (the "Expiration Date")
- --------------------------------------------------------------------------------
We are offering to purchase units in your partnership for $570 per Unit.
The Information Agent for the offer is:
RIVER OAKS PARTNERSHIP SERVICES, INC.
<TABLE>
<CAPTION>
By Mail: By Overnight Courier: By Hand:
<S> <C> <C>
P.O. Box 2065 111 Commerce Road 111 Commerce Road
S. Hackensack, N.J. 07606-2065 Carlstadt, N.J. 07072 Carlstadt, N.J. 07072
Attn.: Reorganization Dept. Attn.: Reorganization Dept.
By Telephone:
TOLL FREE (888) 349-2005
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
DESCRIPTION OF UNITS TENDERED
- ------------------------------------------------------------ ---------------------------------------------------
Name(s) and Address(es) of Registered Holder(s) (Please Units in Angeles Partners XII
indicate changes or corrections to the name, address and
tax identification number printed below.)
- ------------------------------------------------------------ ------------------ ---------------- ---------------
1. Total Number 2. Number of 3. Total Num-
of Units Owned Units Tendered ber of Units
(#) 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 the Expiration Date,
unless extended. THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS IS AT YOUR OPTION AND RISK, AND DELIVERY WILL BE DEEMED
MADE ONLY WHEN ACTUALLY RECEIVED BY THE INFORMATION AGENT. IF DELIVERY IS BY
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED IS RECOMMENDED. IN ALL
CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY. DELIVERY OF
THIS LETTER OF TRANSMITTAL OR ANY OTHER REQUIRED DOCUMENTS TO AN ADDRESS OTHER
THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE VALID DELIVERY.
--------------------------
IF YOU HAVE THE CERTIFICATE ORIGINALLY ISSUED TO REPRESENT YOUR
INTEREST IN THE PARTNERSHIP PLEASE SEND IT TO THE INFORMATION
AGENT WITH THIS LETTER OF TRANSMITTAL.
---------------------------
FOR INFORMATION OR ASSISTANCE IN CONNECTION WITH THE OFFER OR THE
COMPLETION OF THIS LETTER OF TRANSMITTAL, PLEASE CONTACT THE INFORMATION AGENT
AT (888) 349-2005 (TOLL FREE).
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
- --------------------------------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 2, 4 AND 9)
To be completed ONLY if the consideration for the purchase price of
Units accepted for payment is to be issued in the name of someone other than the
undersigned.
[ ] Issue consideration to:
Name
----------------------------------------------------------------------------
(Please Type or Print)
Address
-------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Include Zip Code)
- --------------------------------------------------------------------------------
(Tax Identification or Social Security No.)
(See Substitute Form W-9)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 2, 4 AND 9)
To be completed ONLY if the consideration for the purchase price of
Units accepted for payment is to be sent to someone other than the undersigned
or to the undersigned at an address other than that shown above.
[ ] Mail consideration to:
Name
----------------------------------------------------------------------------
(Please Type or Print)
Address
-------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Include Zip Code)
- --------------------------------------------------------------------------------
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
2
<PAGE> 3
Ladies and Gentlemen:
The undersigned hereby acknowledges that he or she has received and reviewed
(i) the Purchaser's Offer to Purchase relating to the offer by AIMCO Properties,
L.P. (the "Purchaser") to purchase Limited Partnership Interests (the "Units")
in the Partnership and (ii) this Letter of Transmittal and the Instructions
hereto, as each may be supplemented or amended from time to time (collectively,
the "Offer").
Upon the terms and subject to the conditions set forth in the Offer to
Purchase, and this Letter of Transmittal, the undersigned hereby tenders to the
Purchaser the Units set forth in the box above entitled "Description of Units
Tendered," including all interests in any limited partnership represented by
such units (collectively, the "Units"), at the price indicated on the Offer to
Purchase, less the amount of distributions, if any, made by the Partnership from
the Offer Date until the Expiration Date (the "Offer Price"), net to the
undersigned in cash, without interest.
Subject to and effective upon acceptance for payment of any of the Units
tendered hereby in accordance with the terms of the Offer, the undersigned
hereby irrevocably sells, assigns, transfers, conveys and delivers to, or upon
the order of, the Purchaser all right, title and interest in and to such Units
tendered hereby that are accepted for payment pursuant to the Offer, including,
without limitation, (i) all of the undersigned's interest in the capital of the
Partnership, and the undersigned's interest in all profits, losses and
distributions of any kind to which the undersigned shall at any time be entitled
in respect of the Units; (ii) all other payments, if any, due or to become due
to the undersigned in respect of the Units, under or arising out of the
agreement of limited partnership of the Partnership (the "Partnership
Agreement"), or any agreement pursuant to which the Units were sold (the
"Purchase Agreement"), whether as contractual obligations, damages, insurance
proceeds, condemnation awards or otherwise; (iii) all of the undersigned's
claims, rights, powers, privileges, authority, options, security interests,
liens and remedies, if any, under or arising out of the Partnership Agreement or
Purchase Agreement or the undersigned's ownership of the Units, including,
without limitation, all voting rights, rights of first offer, first refusal or
similar rights, and rights to be substituted as a limited partner of the
Partnership; and (iv) all present and future claims, if any, of the undersigned
against the Partnership, the other partners of the Partnership, or the general
partner and its affiliates, including the Purchaser, under or arising out of the
Partnership Agreement, the Purchase Agreement, the undersigned's status as a
limited partner, or the terms or conditions of the Offer, for monies loaned or
advanced, for services rendered, for the management of the Partnership or
otherwise.
The undersigned hereby irrevocably constitutes and appoints the Purchaser
and any designees of the Purchaser as the true and lawful agent and
attorney-in-fact of the undersigned with respect to such Units, with full power
of substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest), to vote or act in such manner as any such attorney
and proxy or substitute shall, in its sole discretion, deem proper with respect
to such Units, to do all such acts and things necessary or expedient to deliver
such Units and transfer ownership of such Units on the partnership books
maintained by the general partner of the Partnership, together with all
accompanying evidence of transfer and authenticity to, or upon the order of, the
Purchaser, to sign any and all documents necessary to authorize the transfer of
the Units to the Purchaser including, without limitation, the "Transferor's
(Seller's) Application for Transfer" created by the National Association of
Securities Dealers, Inc., if required, and upon receipt by the Information Agent
(as the undersigned's agent) of the Offer Price, to become a substitute limited
partner, to receive any and all distributions made by the Partnership from and
after the Expiration Date of the Offer (regardless of the record date for any
such distribution), and to receive all benefits and otherwise exercise all
rights of beneficial ownership of such Units, all in accordance with the terms
of the Offer. This appointment is effective upon the purchase of the Units by
the Purchaser as provided in the Offer and shall be irrevocable for a period of
ten years following the termination of the Offer. Upon the purchase of Units
pursuant to the Offer, all prior proxies and consents given by the undersigned
with respect to such Units will be revoked and no subsequent proxies or consents
may be given (and if given will not be deemed effective).
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 the Offer Date.
NOTWITHSTANDING ANY PROVISION IN A PARTNERSHIP AGREEMENT OR ANY PURCHASE
AGREEMENT TO THE CONTRARY, THE UNDERSIGNED HEREBY DIRECTS EACH GENERAL PARTNER
OF THE PARTNERSHIP TO MAKE ALL DISTRIBUTIONS AFTER THE PURCHASER ACCEPTS THE
TENDERED UNITS FOR PAYMENT TO THE PURCHASER OR ITS DESIGNEE. Subject to and
effective upon acceptance for payment of any Unit tendered hereby, the
undersigned hereby requests that the Purchaser be admitted to the Partnership as
a substitute limited partner under the terms of the Partnership Agreement. Upon
request, the undersigned will execute and deliver additional documents deemed by
the Information Agent or the Purchaser to be necessary or desirable to complete
the assignment, transfer and purchase of Units tendered hereby and will hold any
distributions received from the Partnership after the Expiration Date in trust
for the benefit of the Purchaser and, if necessary, will promptly forward to the
Purchaser any such distributions immediately upon receipt. The Purchaser
reserves the right to transfer or assign, in whole or in part, from time to
time, to one or more of its affiliates, the right to purchase Units tendered
pursuant to the Offer, but any such transfer or assignment will not relieve the
Purchaser of its obligations under the Offer or prejudice the rights of
tendering unitholders to receive payment for Units validly tendered and accepted
for payment pursuant to the Offer.
By executing this Letter of Transmittal, the undersigned represents that
either (i) the undersigned is not a plan subject to Title I of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or Section 4975 of
the Internal Revenue Code of 1986, as amended (the "Code"), or an entity deemed
to hold "plan assets" within the meaning of 29 C.F.R. Section 2510.3-101 of any
such plan, or (ii) the tender and acceptance of Units pursuant to the Offer will
not result in a nonexempt prohibited transaction under Section 406 of ERISA or
Section 4975 of the Code.
The undersigned understands that a tender of Units to the Purchaser will
constitute a binding agreement between the undersigned and the Purchaser upon
the terms and subject to the conditions of the Offer. The undersigned recognizes
that under certain circumstances set forth in the Offer, the Purchaser may not
be required to accept for payment any of the Units tendered hereby. In such
event, the undersigned understands that any Letter of Transmittal for Units not
accepted for payment may be destroyed by the Purchaser (or its agent). EXCEPT AS
STATED IN THE OFFER, THIS TENDER IS IRREVOCABLE, PROVIDED THAT UNITS TENDERED
PURSUANT TO THE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION DATE,
OR UNLESS ALREADY ACCEPTED FOR PAYMENT, ANY TIME AFTER 60 DAYS FROM THE OFFER
DATE.
THE UNDERSIGNED HAS BEEN ADVISED THAT THE PURCHASER IS AN AFFILIATE OF THE
GENERAL PARTNER OF THE PARTNERSHIP AND NO SUCH GENERAL PARTNER MAKES ANY
RECOMMENDATION AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING UNITS IN THE
OFFER. THE UNDERSIGNED HAS MADE HIS OR HER OWN DECISION TO TENDER UNITS.
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.
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 The actual owner of the account or,
(joint account) if combined funds, the first
individual on the account
3. Husband and wife (joint account) The actual owner of the account or,
if joint funds, either person
4. Custodian account of a minor (Uniform The minor (2)
Gift to Minors Act)
5. Adult and minor (joint account) The adult or, if the minor is the
only contributor, the minor (1)
6. Account in the name of guardian or The ward, minor or incompetent
committee for a designated ward, minor person (3)
or incompetent person (3)
7. a. The usual revocable savings trust The grantor trustee (1)
account (grantor is also trustee)
b. So-called trust account that The actual owner (1)
is not a legal or valid trust
under state law
8. Sole proprietorship account The owner (4)
9. A valid trust, estate or pension The legal entity (Do not furnish
trust 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 The organization
organization account
12. Partnership account held in the The partnership
name of the business
13. Association, club, or other The organization
tax-exempt organization
14. A broker or registered nominee The broker or nominee
15. Account with the Department of The public entity
Agriculture in the name of a public
entity (such as a State or local
government, school district, or
prison) that receives agricultural
program payments
</TABLE>
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
<PAGE> 12
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's or incompetent person's name and furnish such person's
social security number or employer identification number.
(4) Show your individual name. You may also enter your business name. You may
use your social security number or employer identification number.
(5) List first and circle the name of the legal trust, estate, or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
OBTAINING A NUMBER
If you do not have a taxpayer identification number or you do not know your
number, obtain Form SS-5, Application for a Social Security Number Card (for
individuals), or Form SS-4, Application for Employer Identification Number (for
businesses and all other entities), at the local office of the Social Security
Administration or the Internal Revenue Service and apply for a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include
the following:
- A corporation.
- A financial institution.
- An organization exempt from tax under section 501(a) of the Internal
Revenue Code of 1986, as amended (the "Code"), or an individual
retirement plan.
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States,
or any subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government,
or any agency or instrumentality thereof.
- An international organization or any agency or instrumentality thereof.
- A registered dealer in securities or commodities registered in the U.S.
or a possession of the U.S.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a) of the
Code.
- An exempt charitable remainder trust, or a non-exempt trust described
in section 4947 (a)(1).
- An entity registered at all times under the Investment Company Act of
1940.
- A foreign central bank of issue.
- A futures commission merchant registered with the Commodity Futures
Trading Commission.
Payments of dividends and patronage dividends not generally subject to
backup withholding include the following:
- Payments to nonresident aliens subject to withholding under section
1441 of the Code.
- Payments to Partnerships not engaged in a trade or business in the U.S.
and which have at least one nonresident partner.
- Payments of patronage dividends where the amount received is not paid
in money.
12
<PAGE> 13
- Payments made by certain foreign organizations.
- Payments made to an appropriate nominee.
- Section 404(k) payments made by an ESOP.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals.NOTE: You may
be subject to backup withholding if this interest is $600 or more and
is paid in the course of the payer's trade or business and you have not
provided your correct taxpayer identification number to the payer.
Payments of tax exempt interest (including exempt interest dividends
under section 852 of the Code).
- Payments described in section 6049(b)(5) of the Code to nonresident
aliens.
- Payments on tax-free covenant bonds under section 1451 of the Code.
- Payments made by certain foreign organizations.
- Payments of mortgage interest to you.
- Payments made to an appropriate nominee.
Exempt payees described above should file a substitute Form W-9 to avoid
possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER. FURNISH
YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND
RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE
DIVIDENDS, ALSO SIGN AND DATE THE FORM. IF YOU ARE A NONRESIDENT ALIEN OR A
FOREIGN ENTITY NOT SUBJECT TO BACKUP WITHHOLDING, FILE WITH PAYER A COMPLETED
INTERNAL REVENUE FORM W-8 (CERTIFICATE OF FOREIGN STATUS).
Certain payments other than interest, dividends, and patronage dividends,
that are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(A),
6045, and 6050A of the Code.
PRIVACY ACT NOTICE - - Section 6109 of the Code requires most recipients of
dividend, interest, or other payments to give correct taxpayer identification
numbers to payers who must report the payments to the IRS. The IRS uses the
numbers for identification purposes. Payers must be given the numbers whether or
not recipients are required to file a tax return. Payers must generally withhold
31% of taxable interest, dividend, and certain other payments to a payee who
does not furnish a correct taxpayer identification number to a payer. Certain
penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER - - If you
fail to furnish your correct taxpayer identification number to a payer, you are
subject to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING - - If
you make a false statement with no reasonable basis that results in no
imposition of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION - - Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL
REVENUE SERVICE.
13
<PAGE> 14
The Information Agent for the offer is:
RIVER OAKS PARTNERSHIP SERVICES, INC.
<TABLE>
By Mail: By Overnight Courier: By Hand:
<S> <C> <C>
P.O. Box 2065 111 Commerce Road 111 Commerce Road
S. Hackensack, N.J. 07606-2065 Carlstadt, N.J. 07072 Carlstadt, N.J. 07072
Attn.: Reorganization Dept. Attn.: Reorganization Dept.
By Telephone:
TOLL FREE (888) 349-2005
</TABLE>
14
<PAGE> 1
AIMCO PROPERTIES, L.P.
1873 SOUTH BELLAIRE STREET, 17TH FLOOR
DENVER, COLORADO 80222
August 19, 1999
Dear Unitholder:
We are offering to acquire up to 12,098.01 units in your partnership,
Angeles Partners XII. 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 $570 in
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, and you will receive distributions, if any,
payable in respect of your units.
We are offering to acquire up to 12,098.01 outstanding units in your
partnership. Our offer is subject to a minimum of 35% of the units being
tendered. 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. YOU WILL NOT BE REQUIRED TO PAY US ANY
PARTNERSHIP TRANSFER 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. We
will pay for accepted units promptly after 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 makes no
recommendation as to whether you should tender or refrain from tendering your
units. Although the general partner believes the offer is fair, you must make
your own decision whether or not to participate in the offer, based upon a
number of factors, including your financial position, your need or desire for
liquidity, other financial opportunities available to you, and your tax position
and the tax consequences to you of selling your units.
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 September 16, 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., 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. 4 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: August 19, 1999
COOPER 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
