<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
RIVERSIDE PARK ASSOCIATES LP
(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
-------------------
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CALCULATION OF FILING FEE
Transaction Valuation* $2,149,874 Amount of Filing Fee: $429.97
- -------------------------------------------------------------------------------
* For purposes of calculating the fee only. This amount assumes the
purchase of 168.14 units of limited partnership interest of the
subject partnership for $12,786 per unit. The amount of the filing
fee, calculated in accordance with Section 14(g)(1)(B)(3) and Rule 0-
11(d) under the Securities Exchange Act of 1934, as amended, equals
1/50th of one percent of the aggregate of the cash offered by the
bidder.
[ ] Check box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration
statement number or the form or schedule and the date of its filing.
Amount Previously Paid: Filing Parties:
Form or Registration No.: Date Filed:
(Continued on following pages)
Page 1 of 8 Pages
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CUSIP No. NONE 14D-1 AND 13D/A Page 2 of 8 Pages
1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
3. SEC USE ONLY
4. SOURCE OF FUNDS
Not Applicable
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(e) OR 2(f) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
200.6638
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN
SHARES [ ]
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
35.3%
10. TYPE OF REPORTING PERSON
CO
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SCHEDULE 14D-1/AMENDMENT NO. 2 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 Riverside Park
Associates Limited Partnership (the "Partnership"); and (b) the Schedule 13D
(the "Schedule 13D") of Apartment Investment and Management Company ("AIMCO").
AIMCO, AIMCO-GP, Inc. ("AIMCO") and AIMCO OP are herein referred to as the
"Reporting Persons." The item numbers and responses thereto are set forth below
in accordance with the requirements of Schedule 14D-1.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Riverside Park Associates
Limited Partnership, 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
168.14 of the 568.29 outstanding units of limited partnership interest (the
"Units") of the Partnership at a purchase price per Unit, net to the seller, of
$12,786 in cash (less the amount of any distributions paid by the Partnership
on and after May 13, 1999), upon the terms and subject to the conditions set
forth in an Offer to Purchase, dated May 13, 1999 (as amended or supplemented
from time to time, the "Offer to Purchase"), and the related Letter of
Transmittal and Instructions thereto (as amended or supplemented from time to
time, the "Letter of Transmittal"), copies of which are filed as Exhibits
(a)(1) and (a)(2) hereto, respectively.
(c) The information set forth in the Offer to Purchase under "The
Offer -- Section 9. Background and Reasons for the Offer -- Prices on Secondary
Market" is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d), (g) This Statement is being filed by AIMCO Properties, L.P.,
a Delaware limited partnership, and, insofar as this Statement constitutes the
Schedule 13D by 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 October 1, 1998, Insignia Financial Group,
Inc. ("Insignia") was merged into AIMCO, and AIMCO acquired Insignia interests
in 200.58 Units in the Partnership. 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" and "The Offer - Section 9 - Background and Reason for the Offer"
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
Page 3 of 8 Pages
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a judgment, decree or final order enjoining further violations of or
prohibiting activities subject to federal or state securities laws or finding
any violation with respect to such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a)-(b) The information set forth in Part III of the Partnership's
Form 10-KSB for the year ended December 31, 1998, and the financial statements
and notes thereto included therein, and the information set forth in the Offer
to Purchase under "The Offer -- Section 9. Background and Reasons for the Offer
- -- General," "The Offer -- Section 9. Background and Reasons for the Offer --
Prior Tender Offers," "The Offer - Section 11. Conflicts of Interest and
Transactions with Affiliates," "The Offer -- Section 13. Certain Information
Concerning Your Partnership -- Distributions" and "The Offer -- Section 13.
Certain Information Concerning Your Partnership -- Compensation Paid to the
General Partner and Its Affiliates" is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(c) The information set forth in the Offer to Purchase under "The
Offer -- Section 15. Source of Funds" is incorporated herein by reference.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a)-(g) The information set forth in the Offer to Purchase under "The
Offer -- Section 9. Background and Reasons for the Offer," "The Offer --
Section 12. Future Plans of the Purchaser" and "The Offer -- Section 7. Effects
of the Offer" is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a)-(b) AIMCO directly owns 200.6638 Unit, representing 35.3% of the
outstanding Units based on the 568.29 Units outstanding at December 31, 1998
and has sole voting and investment power over such Unit.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
Not applicable.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the Offer to Purchase under "The Offer --
Fees and Expenses" is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The financial statements included in AIMCO OP's Annual Report on Form
10-K for the year ended December 31, 1998, which are listed on the Index to
Financial Statements on page F-1 of such report, are incorporated herein by
reference. Such report may be inspected at the public reference facilities
maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549; Citicorp Center, 500 West Madison Street, Chicago,
Illinois 60661; and 7 World Trade Center, 13th Floor, New York, New York 10048.
Copies of such material can also be obtained from the Public
Page 4 of 8 Pages
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Reference Room of the Commission in Washington, D.C. at prescribed rates and
from the Commission's web site at www.sec.gov.
ITEM 10. ADDITIONAL INFORMATION.
(a) Not applicable.
(b)-(d) The information set forth in the Offer to Purchase
under "The Offer -- Section 18. Certain Legal Matters" is incorporated herein
by reference.
(e) The information set forth in the Offer to Purchase under "The
Offer -- Section 9. Background and Reasons for the Offer -- Certain Litigation"
is incorporated herein by reference
(f) The Offer to Purchase is hereby incorporated by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase, dated May 13, 1999.
(a)(2) Letter of Transmittal and related Instructions.
(a)(3) Letter, dated May 13, 1999, from AIMCO OP to the
Limited Partners of the Partnership.
(b) Amended and Restated Credit Agreement (Unsecured
Revolver-to-Term Facility), dated as of October 1,
1998, among AIMCO OP, Bank of America National Trust
and Savings Association, and BankBoston, N.A.
(Exhibit 10.1 to AIMCO's Current Report on Form 8-K,
dated October l, 1998, is incorporated herein by
this reference).
(b)(2) First Amendment to Credit Agreement, dated as of
November 6, 1998, by and among AIMCO OP, the
financial institutions listed on the signature pages
thereof and Bank of America National Trust and
Savings Association (Exhibit 10.2 to AIMCO's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1998, is incorporated herein by this
reference).
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
(z)(1) Agreement of Joint Filing, dated May 13, 1999, among
AIMCO, AIMCO-GP and AIMCO OP.
Page 5 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: May 13, 1999 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 6 of 8 Pages
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ---------- -----------
<S> <C>
(a)(1) Offer to Purchase, dated May 13, 1999.
(a)(2) Letter of Transmittal and related Instructions.
(a)(3) Letter, dated May 13, 1999, from AIMCO OP to the
Limited Partners of the Partnership.
(b) Amended and Restated Credit Agreement (Unsecured
Revolver-to-Term Facility), dated as of October 1,
1998, among AIMCO OP, Bank of America National Trust
and Savings Association, and BankBoston, N.A.
(Exhibit 10.1 to AIMCO's Current Report on Form 8-K,
dated October l, 1998, is incorporated herein by
this reference).
(b)(2) First Amendment to Credit Agreement, dated as of
November 6, 1998, by and among AIMCO OP, the
financial institutions listed on the signature pages
thereof and Bank of America National Trust and
Savings Association (Exhibit 10.2 to AIMCO's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1998, is incorporated herein by this
reference).
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
(z)(1) Agreement of Joint Filing, dated May 13, 1999, among
AIMCO, AIMCO-GP and AIMCO OP.
</TABLE>
Page 7 of 8 Pages
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OFFER TO PURCHASE FOR CASH
AIMCO PROPERTIES, L.P.
is offering to purchase up to 168.14 units of limited partnership interest in
RIVERSIDE PARK ASSOCIATES LIMITED PARTNERSHIP
FOR $12,786 PER UNIT IN CASH
<TABLE>
<S> <C>
Our offer price will be reduced for any distributions Our offer and your withdrawal rights will expire at 5:00
subsequently made by your partnership prior to the p.m., New York City time, on June 29, 1999, unless we
expiration of our offer. extend the deadline.
We will only accept a maximum of 29.59% of the YOU WILL NOT PAY ANY FEES OR COMMISSIONS IF YOU
outstanding units in response to our offer. If more units TENDER YOUR UNITS.
are tendered to us, we will generally accept units on a
pro rata basis according to the number of units tendered Our offer is not subject to any minimum number of units
by each person. being tendered.
</TABLE>
SEE "RISK FACTORS" BEGINNING ON PAGE 1 OF THIS OFFER TO PURCHASE FOR A
DESCRIPTION OF RISK FACTORS THAT YOU SHOULD CONSIDER IN CONNECTION WITH OUR
OFFER, INCLUDING THE FOLLOWING:
o We determined the offer price of $12,786 per unit without any
arms-length negotiations. Accordingly, our offer price may not reflect
the fair market value of your units.
o Your general partner and the property manager of the residential
property are affiliates of ours and, therefore, the general partner has
substantial conflicts of interest with respect to our offer.
o We are making this offer with a view to making a profit and, therefore,
there is a conflict between our desire to purchase your units at a low
price and your desire to sell your units at a high price.
o Continuation of your partnership will result in our affiliates
continuing to receive management fees from your partnership. Such fees
would not be payable if your partnership was liquidated.
o It is possible that we may conduct a subsequent offer at a higher
price.
o For any units that we acquire from you, you will not receive any future
distributions from operating cash flow of your partnership or upon a
sale or refinancing of property owned by your partnership.
o If we acquire a substantial number of units, we will increase our
ability to influence voting decisions with respect to your partnership
and may control such voting decisions.
If you desire accept our offer, you should complete and sign the letter of
transmittal in accordance with the instructions thereto and mail or deliver the
signed letter of transmittal and any other required documents to River Oaks
Partnership Services, Inc., which is acting as Information Agent in connection
with our offer, at one of its addresses set forth on the back cover of this
offer to purchase. QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL
COPIES OF THIS OFFER TO PURCHASE OR THE LETTER OF TRANSMITTAL MAY ALSO BE
DIRECTED TO THE INFORMATION AGENT AT (888) 349-2005.
May 13, 1999
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
INTRODUCTION............................................................................................1
RISK FACTORS............................................................................................1
No Third Party Valuation or Appraisal; No Arms-Length Negotiation.....................................1
No Fairness Opinion From a Third Party................................................................1
Offer Price May Not Represent Fair Market Value.......................................................2
Offer Price Does Not Reflect Future Prospects.........................................................2
Offer Price Based on Our Estimate of Liquidation Proceeds.............................................2
Offer Price May Not Represent Liquidation Value.......................................................2
Continuation of the Partnership; No Time Frame Regarding Sale of Properties...........................2
Holding Units May Result in Greater Future Value......................................................2
Conflicts of Interest With Respect to the Offer; No General Partner Recommendation....................2
Conflicts of Interest Relating to Management Fees.....................................................3
Possible Subsequent Offer at a Higher Price...........................................................3
Recognition of Taxable Gain on a Sale of Your Units...................................................3
Loss of Future Distributions from Your Partnership....................................................3
Possible Increase in Control of Your Partnership by Us................................................3
Recognition of Gain Resulting from Possible Future Reduction in Your Partnership Liabilities..........3
Risk of Inability to Transfer Units for 12-Month Period...............................................4
THE OFFER...............................................................................................4
Section 1. Terms of the Offer; Expiration Date; Proration............................................4
Section 2. Acceptance for Payment and Payment for Units..............................................5
Section 3. Procedure for Tendering Units.............................................................6
Section 4. Withdrawal Rights.........................................................................8
Section 5. Extension of Tender Period; Termination; Amendment........................................8
Section 6. Certain Federal Income Tax Matters........................................................9
Section 7. Effects of the Offer.....................................................................12
Section 8. Information Concerning Us and Certain of Our Affiliates..................................12
Section 9. Background and Reasons for the Offer.....................................................13
Section 10. Position of the General Partner of Your Partnership With Respect to the Offer............19
Section 11. Conflicts of Interest and Transactions with Affiliates...................................20
Section 12. Future Plans of the Purchaser............................................................21
Section 13. Certain Information Concerning Your Partnership..........................................22
Section 14. Voting Power.............................................................................26
Section 15. Source of Funds..........................................................................26
Section 16. Dissenters' Rights.......................................................................27
Section 17. Conditions of the Offer..................................................................27
Section 18. Certain Legal Matters....................................................................29
Section 19. Fees and Expenses........................................................................30
ANNEX I - OFFICERS AND DIRECTORS..........................................................................I-1
</TABLE>
i
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INTRODUCTION
We are offering to purchase up to 168.14 units, representing
approximately 29.59% of the outstanding units of limited partnership interest in
your partnership, for the purchase price of $12,786 per unit, net to the seller
in cash, without interest, less the amount of distributions, if any, made by
your partnership in respect of any unit from the date hereof until the
expiration date. Our offer is made upon the terms and subject to the conditions
set forth in this offer to purchase and in the accompanying letter of
transmittal.
If you tender your units in response to our offer you will not be
obligated to pay any commissions or partnership transfer fees but will be
obligated to pay any transfer taxes (see Instruction 8 to the letter of
transmittal). We have retained River Oaks Partnership Services, Inc. to act as
the Information Agent in connection with our offer. We will pay all charges and
expenses in connection with the services of the Information Agent. The offer is
not conditioned on any minimum number of units being tendered. However, certain
other conditions do apply. See "The Offer -- Section 17." You may tender all or
any portion of the units that you own. Under no circumstances will we be
required to accept any unit if the transfer of that unit to us would be
prohibited by the agreement of limited partnership of your partnership.
Our offer will expire at 5:00 P.M., New York City time, on June 29,
1999, unless extended. If you desire to accept our offer, you must complete and
sign the letter of transmittal in accordance with the instructions contained
therein and forward or hand deliver it, together with any other required
documents, to the Information Agent. You may withdraw your tender of units
pursuant to the offer at any time prior to the expiration date of our offer and,
if we have not accepted such units for payment, on or after July 11, 1999.
We are AIMCO Properties, L.P., a Delaware limited partnership. Together
with our subsidiaries, we conduct substantially all of the operations of
Apartment Investment and Management Company, or AIMCO. AIMCO is a
self-administered and self-managed real estate investment trust engaged in the
ownership, acquisition, development, expansion and management of multifamily
apartment properties. As of March 31, 1999, AIMCO owned or managed 373,409
apartment units in 2,071 properties located in 49 states, the District of
Columbia and Puerto Rico. AIMCO's Class A Common Stock is listed and traded on
the New York Stock Exchange under the symbol "AIV."
As a result of our October 1, 1998 merger with Insignia Financial
Group, Inc. and our February 26, 1999 merger with Insignia Properties Trust, we
acquired control of the general partner of your partnership and the company that
manages the residential property owned by your partnership.
RISK FACTORS
Before deciding whether or not to tender any of your units, you should
consider carefully the following risks and disadvantages of the offer:
NO THIRD PARTY VALUATION OR APPRAISAL; NO ARMS-LENGTH NEGOTIATION
We did not base our valuation of the property owned by your partnership
on any third-party appraisal or valuation. We established the terms of our offer
without any arms-length negotiation. The terms of the offer could differ if they
were subject to independent third party negotiations. It is uncertain whether
our offer price reflects the value which would be realized upon a sale of your
units to a third party.
NO FAIRNESS OPINION FROM A THIRD PARTY
We did not obtain an opinion from a third party that our offer price is
fair from a financial point of view.
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OFFER PRICE MAY NOT REPRESENT FAIR MARKET VALUE
There is no established or regular trading market for your units, nor
is there another reliable standard for determining the fair market value of the
units. Our offer price does not necessarily reflect the price that you would
receive in an open market for your units. Such prices could be higher than our
offer price.
OFFER PRICE DOES NOT REFLECT FUTURE PROSPECTS
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 property.
OFFER PRICE BASED ON OUR ESTIMATE OF LIQUIDATION PROCEEDS
The offer price represents only our estimate of the amount you would
receive if we liquidated the partnership. In determining the liquidation value,
we used the direct capitalization method to estimate the value of your
partnership's property because we think a prospective purchaser of the property
would value the property 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 is proposing to continue to operate your
partnership and not to attempt to liquidate it at the present time. Thus, our
offer does not satisfy any expectation that you would receive the return of your
investment in the partnership through a sale of any property. It is not known
when the property owned by your partnership may be sold. There may be no way to
liquidate your investment in a partnership in the future until the property is
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 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.
CONFLICTS OF INTEREST WITH RESPECT TO THE OFFER; NO GENERAL PARTNER
RECOMMENDATION
The general partner of your partnership is our affiliate 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
2
<PAGE> 5
our offer price without negotiation with any other party, including any general
or limited partner. Because of our affiliation with the general partner of your
partnership, your general partner makes no recommendation as to whether you
should tender your units.
CONFLICTS OF INTEREST RELATING TO MANAGEMENT FEES
Since our affiliates receive fees for managing your partnership and its
residential property, a conflict of interest exists between our continuing the
partnership and receiving such fees, and the liquidation of the partnership and
the termination of such fees. Another conflict is the fact that a decision of
the limited partners of your partnership to remove, for any reason, the general
partner of your partnership or the residential property manager of any property
owned by your partnership would result in a decrease or elimination of the
substantial fees paid to them for services provided to your partnership.
POSSIBLE SUBSEQUENT OFFER AT A HIGHER PRICE
It is possible that we may conduct a subsequent offer at a higher
price. Such a decision will depend on, among other things, the performance of
the partnership, prevailing economic conditions, and our interest in acquiring
additional limited partnership interests.
RECOGNITION OF TAXABLE GAIN ON A SALE OF YOUR UNITS
Your sale of units for cash will be a taxable sale, with the result
that you will recognize gain or loss measured by the difference between the
amount realized on the sale and your adjusted tax basis in the units of limited
partnership interest of your partnership you transfer to us. The particular tax
consequences for you of our offer will depend upon a number of factors related
to your tax situation, including your tax basis in your units of limited
partnership interest of your partnership you transfer to us, whether you dispose
of all of your units and whether you are no longer subject to the "passive loss"
rules with respect to your partnership. Because the income tax consequences of
tendering units will not be the same for everyone, you should consult your own
tax advisor with specific reference to your own tax situation.
LOSS OF FUTURE DISTRIBUTIONS FROM YOUR PARTNERSHIP
If you tender your units in response to our offer, you will transfer to
us all right, title and interest in and to all of the units we accept, and the
right to receive all distributions in respect of such units on and after the
date on which we accept such units for purchase. Accordingly, for any units that
we acquire from you, you will not receive any future distributions from
operating cash flow of your partnership or upon a sale or refinancing of
property owned by your partnership.
POSSIBLE INCREASE IN CONTROL OF YOUR PARTNERSHIP BY US
Because the general partner of your partnership is our affiliate, we
control the management of your partnership. In addition, if we acquire more
units, we will increase our ability to influence voting decisions with respect
to your partnership and may control such voting decisions. Furthermore, in the
event that we acquire a substantial number of units pursuant to our offer,
removal of a general partner without our consent may become more difficult or
impossible. We also control the company that manages the residential property
owned by your partnership. In the event that we acquire a substantial number of
units pursuant to our offer, removal of any property manager without our consent
may become more difficult or even impossible.
RECOGNITION OF GAIN RESULTING FROM POSSIBLE FUTURE REDUCTION IN YOUR PARTNERSHIP
LIABILITIES
Generally, a decrease in your share of partnership liabilities is
treated, for Federal income tax purposes,
3
<PAGE> 6
as a deemed cash distribution. Although no general partner of your partnership
has any current plan or intention to reduce the liabilities of your partnership,
it is possible that future economic, market, legal, tax or other considerations
may cause a general partner to reduce the liabilities of your partnership. If
you retain all or a portion of your units of limited partnership interest of
your partnership and the liabilities of your partnership were to be reduced, you
will be treated as receiving a hypothetical distribution of cash resulting from
a decrease in your share of the liabilities of the partnership. Any such
hypothetical distribution of cash would be treated as a nontaxable return of
capital to the extent of your adjusted tax basis in your units and thereafter as
gain.
RISK OF INABILITY TO TRANSFER UNITS FOR 12-MONTH PERIOD
Your partnership's agreement of limited partnership prohibits any
transfer of an interest if such transfer, together with all other transfers
during the preceding 12 months, would cause 50% or more of the total interest in
capital and profits of your partnership to be transferred within such 12-month
period. If we acquire a significant percentage of the interest in your
partnership, you may not be able to transfer your units for a 12-month period
following our offer.
THE OFFER
SECTION 1. TERMS OF THE OFFER; EXPIRATION DATE; PRORATION.
Upon the terms and subject to the conditions of the offer, we will
accept (and thereby purchase) up to 168.14 units that are validly tendered on or
prior to the expiration date and not withdrawn in accordance with the procedures
set forth in "The Offer -- Section 4." For purposes of the offer, the term
"expiration date" shall mean 5:00 p.m., New York City time, on June 29, 1999,
unless we in our sole discretion shall have extended the period of time for
which the offer is open, in which event the term "expiration date" shall mean
the latest time and date on which the offer, as extended by us, shall expire.
See "The Offer -- Section 5" for a description of our right to extend the period
of time during which the offer is open and to amend or terminate the offer.
The purchase price per unit will automatically be reduced by the
aggregate amount of distributions per unit, if any, made by your partnership to
you on or after the commencement of our offer and prior to the date on which we
acquire your units pursuant to our offer.
If, prior to the expiration date, we increase the consideration offered
to limited partners pursuant to the offer, the increased consideration will be
paid for all units accepted for payment pursuant to the offer, whether or not
the units were tendered prior to the increase in consideration.
If more than 168.14 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
168.14 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 168.14
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.
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The offer is conditioned on satisfaction of certain conditions. THE
OFFER IS NOT CONDITIONED UPON ANY MINIMUM AMOUNT OF UNITS BEING TENDERED. See
"The Offer -- Section 17," which sets forth in full the conditions of the offer.
We reserve the right (but in no event shall we be obligated), in our reasonable
discretion, to waive any or all of those conditions. If, on or prior to the
expiration date, any or all of the conditions have not been satisfied or waived,
we reserve the right to (i) decline to purchase any of the units tendered,
terminate the offer and return all tendered units to tendering limited partners,
(ii) waive all the unsatisfied conditions and purchase all units validly
tendered, (iii) extend the offer and, subject to the right of limited partners
to withdraw units until the expiration date or on or after July 11, 1999, retain
the units that have been tendered during the period or periods for which the
offer is extended, or (iv) amend the offer. For administrative purposes, the
transfer of units will be effective March 1, 1999.
This offer is being mailed to the persons shown by your partnership's
records to have been limited partners or, in the case of units owned of record
by Individual Retirement Accounts and qualified plans, beneficial owners of
units, as of May 13, 1999.
SECTION 2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR UNITS.
Upon the terms and subject to the conditions of the offer, we will
purchase, by accepting for payment, and will pay for, up to 168.14 units validly
tendered as promptly as practicable following the expiration date. A tendering
beneficial owner of units whose units are owned of record by an Individual
Retirement Account or other qualified plan will not receive direct payment of
the offer price; rather, payment will be made to the custodian of such account
or plan. In all cases, payment for units purchased pursuant to the offer will be
made only after timely receipt by the Information Agent of a properly completed
and duly executed letter of transmittal and other documents required by the
letter of transmittal. See "The Offer -- Section 3." UNDER NO CIRCUMSTANCES WILL
INTEREST BE PAID ON THE OFFER PRICE BY REASON OF ANY DELAY IN MAKING SUCH
PAYMENT.
For purposes of the offer, we will be deemed to have accepted for
payment pursuant to the offer, and thereby purchased, validly tendered units,
if, as and when we give verbal or written notice to the Information Agent of our
acceptance of those units for payment pursuant to the offer. Payment for units
accepted for payment pursuant to the offer will be made through the Information
Agent, which will act as agent for tendering limited partners for the purpose of
receiving cash payments from us and transmitting cash payments to tendering
limited partners.
If any tendered units are not accepted for payment by us for any
reason, the letter of transmittal with respect to such units not purchased may
be destroyed by us or the Information Agent. If, for any reason, acceptance for
payment of, or payment for, any units tendered pursuant to the offer is delayed
or we are unable to accept for payment, purchase or pay for units tendered
pursuant to the offer, then, without prejudice to our rights under "The Offer --
Section 17," the Information Agent may, nevertheless, on our behalf retain
tendered units, and those units may not be withdrawn except to the extent that
the tendering limited partners are entitled to withdrawal rights as described in
"The Offer -- Section 4"; subject, however, to our obligation under Rule 14e-
1(c) under the Exchange Act, to pay you the offer price in respect of units
tendered or return those units promptly after termination or withdrawal of the
offer.
We reserve the right to transfer or assign, in whole or in part, to one
or more of our affiliates, the right to purchase units tendered pursuant to the
offer, but no such transfer or assignment will relieve us of our obligations
under the offer or prejudice your rights to receive payment for units validly
tendered and accepted for payment pursuant to the offer.
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SECTION 3. PROCEDURE FOR TENDERING UNITS.
VALID TENDER. To validly tender units pursuant to the offer, a properly
completed and duly executed letter of transmittal and any other documents
required by such letter of transmittal must be received by the Information
Agent, at one of its addresses set forth on the back cover of this offer to
purchase, on or prior to the expiration date. You may tender all or any portion
of your units. No alternative, conditional or contingent tenders will be
accepted.
SIGNATURE REQUIREMENTS. If the letter of transmittal is signed by the
registered holder of a unit and payment is to be made directly to that holder,
then no signature guarantee is required on the letter of transmittal. Similarly,
if a unit is tendered for the account of a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc. or a commercial bank, savings bank, credit union, savings and loan
association or trust company having an office, branch or agency in the United
States (each an "Eligible Institution"), no signature guarantee is required on
the letter of transmittal. However, in all other cases, all signatures on the
letter of transmittal must be guaranteed by an Eligible Institution.
In order for you to tender in the offer, your units must be validly
tendered and not withdrawn on or prior to the expiration date.
THE METHOD OF DELIVERY OF THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS IS AT YOUR OPTION AND RISK AND DELIVERY WILL BE DEEMED MADE
ONLY WHEN ACTUALLY RECEIVED BY THE INFORMATION AGENT. IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED IS RECOMMENDED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY.
APPOINTMENT AS PROXY; POWER OF ATTORNEY. By executing the letter of
transmittal, you are irrevocably appointing us and our designees as your proxy,
in the manner set forth in the letter of transmittal, each with full power of
substitution, to the fullest extent of the your rights with respect to the units
tendered by and accepted for payment by you. Each such proxy shall be considered
coupled with an interest in the tendered units. Such appointment will be
effective when, and only to the extent that, we accept the tendered unit for
payment. Upon such acceptance for payment, all prior proxies given by you with
respect to the units will, without further action, be revoked, and no subsequent
proxies may be given (and if given will not be effective). We and our designees
will, as to those units, be empowered to exercise all voting and other rights as
a limited partner as we, in our sole discretion, may deem proper at any meeting
of limited partners, by written consent or otherwise. We reserve the right to
require that, in order for units to be deemed validly tendered, immediately upon
our acceptance for payment for the units, we must be able to exercise full
voting rights with respect to the units, including voting at any meeting of
limited partners then scheduled or acting by written consent without a meeting.
By executing the letter of transmittal, you agree to execute all such documents
and take such other actions as shall be reasonably required to enable the units
tendered to be voted in accordance with out directions. The proxy and power of
attorney granted by you to us upon your execution of the letter of transmittal
will remain effective and be irrevocable for a period of ten years following the
termination of our offer.
By executing the letter of transmittal, you also irrevocably constitute
and appoint us and our managers and designees as your attorneys-in-fact, each
with full power of substitution, to the full extent of your rights with respect
to the units tendered by you and accepted for payment by us. Such appointment
will be effective when, and only to the extent that, we pay for your units. You
agree not to exercise any rights pertaining to the tendered units without our
prior consent. Upon such payment, all prior powers of attorney granted by you
with respect to such units will, without further action, be revoked, and no
subsequent powers of attorney may be granted (and if granted will not be
effective). Pursuant to such appointment as attorneys-in-fact, we and our
managers and designees each will have the power, among other things, (i) to
transfer ownership of such units on the partnership books maintained by your
general partner (and execute and deliver any accompanying evidences of transfer
and authenticity it may deem necessary or appropriate in connection therewith),
(ii) upon receipt by the Information
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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.
DETERMINATION OF VALIDITY; REJECTION OF UNITS; WAIVER OF DEFECTS; NO
OBLIGATION TO GIVE NOTICE OF DEFECTS. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of units pursuant to our offer will be determined by us, in our reasonable
discretion, which determination shall be final and binding on all parties. We
reserve the absolute right to reject any or all tenders of any particular unit
determined by us not to be in proper form or if the acceptance of or payment for
that unit may, in the opinion of our counsel, be unlawful. We also reserve the
absolute right to waive or amend any of the conditions of the offer that we are
legally permitted to waive as to the tender of any particular unit and to waive
any defect or irregularity in any tender with respect to any particular unit of
any particular limited partner. Our interpretation of the terms and conditions
of the offer (including the letter of transmittal) will be final and binding on
all parties. No tender of units will be deemed to have been validly made unless
and until all defects and irregularities have been cured or waived. Neither us,
the Information Agent, nor any other person will be under any duty to give
notification of any defects or irregularities in the tender of any unit or will
incur any liability for failure to give any such notification.
BACKUP FEDERAL INCOME TAX WITHHOLDING. To prevent the possible
application of back-up Federal income tax withholding of 31% with respect to
payment of the offer price, you may have to provide us with your correct
taxpayer identification number. See the instructions to the letter of
transmittal and "The Offer -- Section 6."
FIRPTA WITHHOLDING. To prevent the withholding of Federal income tax in
an amount equal to 10% of the amount realized on the disposition (the amount
realized is generally the offer price plus the partnership liabilities allocable
to each unit purchased), you must certify that the you are not a foreign person
if you tender units. See the instructions to the letter of transmittal and "The
Offer -- Section 6."
TRANSFER TAXES. The amount of any transfer taxes (whether imposed on
the registered holder of units or any person) payable on account of the transfer
to such person will be deducted from the purchase price unless satisfactory
evidence of the such taxes or exemption therefrom is submitted.
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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 July 11, 1999, if the units have not been previously
accepted for payment.
For a withdrawal to be effective, a written notice of withdrawal must
be timely received by the Information Agent at one of its addresses set forth on
the back cover of the offer to purchase. Any such notice of withdrawal must
specify the name of the person who tendered, the number of units to be withdrawn
and the name of the registered holder of such units, if different from the
person who tendered. In addition, the notice of withdrawal must be signed by the
person who signed the letter of transmittal in the same manner as the letter of
transmittal was signed.
If purchase of, or payment for, a unit is delayed for any reason, or if
we are unable to purchase or pay for a unit for any reason, then, without
prejudice to our rights under the offer, tendered units may be retained by the
Information Agent; subject, however, to our obligation, pursuant to Rule
14e-1(c) under the Exchange Act, to pay the offer price in respect of units
tendered or return those units promptly after termination or withdrawal of our
offer.
Any units properly withdrawn will thereafter be deemed not to have been
validly tendered for purposes of our offer. However, withdrawn units may be
re-tendered at any time prior to the expiration date by following the procedures
described in "The Offer -- Section 3."
All questions as to the validity and form (including time of receipt)
of notices of withdrawal will be determined by us in our reasonable discretion,
which determination shall be final and binding on all parties. Neither we, the
Information Agent, nor any other person will be under any duty to give
notification of any defects or irregularities in any notice of withdrawal or
incur any liability for failure to give any such notification.
SECTION 5. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENT.
We expressly reserve the right, in our reasonable discretion, at any
time and from time to time, (i) to extend the period of time during which our
offer is open and thereby delay acceptance for payment of, and the payment for,
any unit, (ii) to terminate our offer and not accept for payment any units not
theretofore accepted for payment or paid for, (iii) upon the occurrence of any
of the conditions specified in "The Offer -- Section 17," to delay the
acceptance for payment of, or payment for, any units not already accepted for
payment or paid for, and (iv) to amend our offer in any respect (including,
without limitation, by increasing the consideration offered, increasing or
decreasing the units being sought, or both). Notice of any such extension,
termination or amendment will promptly be disseminated to you in a manner
reasonably designed to inform you of such change. In the case of an extension of
the offer, the extension will be followed by a press release or public
announcement which will be issued no later than 9:00 a.m., New York City time,
on the next business day after the scheduled expiration date of our offer, in
accordance with Rule 14e-1(d) under the Exchange Act.
If we extend the offer, or if we delay payment for a unit (whether
before or after its acceptance for payment) or are unable to pay for a unit
pursuant to our offer for any reason, then, without prejudice to our rights
under the offer, the Information Agent may retain tendered units and those units
may not be withdrawn except to the extent tendering unitholders are entitled to
withdrawal rights as described in "The Offer -- Section 4"; subject, however, to
our obligation, pursuant to Rule 14e-l(c) under the Exchange Act, to pay the
offer price in respect of units tendered or return those units promptly after
termination or withdrawal of the offer.
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If we make a material change in the terms of our offer, or if we waive
a material condition to our offer, we will extend the offer and disseminate
additional tender offer materials to the extent required by Rule 14e-1 under the
Exchange Act. The minimum period during which the offer must remain open
following any material change in the terms of the offer, other than a change in
price or a change in percentage of securities sought or a change in any dealer's
soliciting fee, if any, will depend upon the facts and circumstances, including
the materiality of the change. With respect to a change in price or, subject to
certain limitations, a change in the percentage of securities sought or a change
in any dealer's soliciting fee, if any, a minimum of ten business days from the
date of such change is generally required to allow for adequate dissemination to
unitholders. Accordingly, if prior to the expiration date, we increase (other
than increases of not more than two percent of the outstanding units) or
decrease the number of units being sought, or increase or decrease the offer
price, and if the offer is scheduled to expire at any time earlier than the
tenth business day after the date that notice of such increase or decrease is
first published, sent or given to unitholders, the offer will be extended at
least until the expiration of such ten business days. As used in the offer to
purchase, "business day" means any day other than a Saturday, Sunday or a
Federal holiday, and consists of the time period from 12:01 a.m. through 12:00
midnight, New York City time.
SECTION 6. CERTAIN FEDERAL INCOME TAX MATTERS.
The following summary is a general discussion of certain of the Federal
income tax consequences of the offer that may be relevant to (i) unitholders who
tender some or all of their units for cash pursuant to our offer, and (ii)
unitholders who do not tender any of their units pursuant to our offer. This
discussion is based on the Internal Revenue Code of 1986, as amended (the
"Internal Revenue Code"), Treasury Regulations, rulings issued by the Internal
Revenue Service (the "IRS"), and judicial decisions, all as of the date of this
offer to purchase. All of the foregoing are subject to change or alternative
construction with possible retroactive effect, and any such change or
alternative construction could affect the continuing accuracy of this summary.
Such summary is based on the assumption that your partnership will be operated
in accordance with its organizational documents including its certificate of
limited partnership and agreement of limited partnership. This summary is for
general information only and does not purport to discuss all aspects of Federal
income taxation which may be important to a particular person in light of its
investment or tax circumstances, or to certain types of investors subject to
special tax rules (including financial institutions, broker-dealers, insurance
companies, and, except to the extent discussed below, tax-exempt organizations
and foreign investors, as determined for United States Federal income tax
purposes), nor (except as otherwise expressly indicated) does it describe any
aspect of state, local, foreign or other tax laws. This summary assumes that the
units constitute capital assets in the hands of the unitholders (generally,
property held for investment). No advance ruling has been or will be sought from
the IRS regarding any matter discussed in this offer to purchase. Further, no
opinion of tax counsel has been obtained with regard to the offer.
THE FEDERAL INCOME TAX TREATMENT OF A UNITHOLDER PARTICIPATING IN THE
OFFER DEPENDS IN SOME INSTANCES ON DETERMINATIONS OF FACT AND INTERPRETATIONS OF
COMPLEX PROVISIONS OF FEDERAL INCOME TAX LAW FOR WHICH NO CLEAR PRECEDENT OR
AUTHORITY MAY BE AVAILABLE. ACCORDINGLY, YOU SHOULD CONSULT YOUR TAX ADVISOR
REGARDING THE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF SELLING THE
LIMITED PARTNERSHIP INTERESTS IN YOUR PARTNERSHIP REPRESENTED BY UNITS PURSUANT
TO OUR OFFER OR OF A DECISION NOT TO SELL IN LIGHT OF YOUR SPECIFIC TAX
SITUATION.
TAX CONSEQUENCES TO LIMITED PARTNERS TENDERING UNITS FOR CASH. You will
recognize gain or loss on a sale of a unit of limited partnership of your
partnership pursuant to the offer equal to the difference between (i) your
"amount realized" on the sale and (ii) your adjusted tax basis in the unit sold.
The "amount realized" with respect to a unit of limited partnership of your
partnership will be equal to the sum of the amount of cash received by you for
the unit sold pursuant to the offer plus the amount of partnership liabilities
allocable to the unit (as determined under Section 752 of the Internal Revenue
Code). Thus, your tax liability resulting from a sale of a unit of limited
partnership of your partnership could exceed the cash received upon such sale.
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ADJUSTED TAX BASIS. If you acquired your units of limited partnership
of your partnership for cash, your initial tax basis in such units is generally
equal to the cash investment in your partnership increased by your share of
partnership liabilities at the time you acquired such units. Your initial tax
basis generally has been increased by (i) your share of partnership income and
gains, and (ii) any increases in your share of partnership liabilities, and has
been decreased (but not below zero) by (i) your share of partnership cash
distributions, (ii) any decreases in your share of partnership liabilities,
(iii) your share of partnership losses, and (iv) your share of nondeductible
partnership expenditures that are not chargeable to capital. For purposes of
determining your adjusted tax basis in units of limited partnership of your
partnership immediately prior to a disposition of your units, your adjusted tax
basis in your units will include your allocable share of partnership income,
gain or loss for the taxable year of disposition. If your adjusted tax basis is
less than your share of partnership liabilities (e.g., as a result of the effect
of net loss allocations and/or distributions exceeding the cost of your unit),
your gain recognized with respect to a unit of limited partnership of your
partnership pursuant to the offer will exceed the cash proceeds realized upon
the sale of such unit.
CHARACTER OF GAIN OR LOSS RECOGNIZED PURSUANT TO THE OFFER. Except as
described below, the gain or loss recognized by you on a sale of a unit of
limited partnership of your partnership pursuant to the offer generally will be
treated as a long-term capital gain or loss if you held the unit for more than
one year. Long-term capital gains recognized by individuals and certain other
noncorporate taxpayers generally will be subject to a maximum Federal income tax
rate of 20%. If the amount realized with respect to a unit of limited
partnership of your partnership that is attributable to your share of
"unrealized receivables" of your partnership exceeds the tax basis attributable
to those assets, such excess will be treated as ordinary income. Among other
things, "unrealized receivables" include depreciation recapture for certain
types of property. In addition, the maximum Federal income tax rate applicable
to persons who are noncorporate taxpayers for net capital gains attributable to
the sale of depreciable real property (which may be determined to include an
interest in a partnership such as your units) held for more than one year is
currently 25% (rather than 20%) to the extent of previously claimed depreciation
deductions that would not be treated as "unrealized receivables."
If you tender a unit of limited partnership interest of your
partnership in the offer, you will be allocated a share of partnership taxable
income or loss for the year of tender with respect to any units sold. You will
not receive any future distributions on units of limited partnership interest of
your partnership tendered on or after the date on which such units are accepted
for purchase and, accordingly, you may not receive any distributions with
respect to such accreted income. Such allocation and any partnership cash
distributions to you for that year will affect your adjusted tax basis in your
unit of limited partnership interest of your partnership and, therefore, the
amount of your taxable gain or loss upon a sale of a unit pursuant to the offer.
PASSIVE ACTIVITY LOSSES. The passive activity loss rules of the
Internal Revenue Code limit the use of losses derived from passive activities,
which generally include investments in limited partnership interests such as the
units of limited partnership interest of your partnership. An individual, as
well as certain other types of investors, generally cannot use losses from
passive activities to offset nonpassive activity income received during the
taxable year. Passive losses that are disallowed for a particular tax year are
"suspended" and may be carried forward to offset passive activity income earned
by the investor in future taxable years. In addition, such suspended losses may
be claimed as a deduction, subject to other applicable limitations, upon a
taxable disposition of the investor's interest in such activity.
Accordingly, if your investment in your units is treated as a passive
activity, you may be able to shelter gain from the sale of your units of limited
partnership interest of your partnership pursuant to the offer with passive
losses in the manner described below. If you sell all or a portion of your units
of limited partnership interest of your partnership pursuant to the offer and
recognize a gain on your sale, you will be entitled to use your current and
"suspended" passive activity losses (if any) from your partnership and other
passive sources to offset that gain. In general, if you sell all or a portion of
your units of limited partnership interest of your partnership pursuant to the
offer and recognize a loss on such sale, you will be entitled to deduct that
loss currently (subject to other
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applicable limitations) against the sum of your passive activity income from
your partnership for that year (if any) plus any passive activity income from
other sources for that year. If you sell all of your units pursuant to the
offer, the balance of any "suspended" losses from your partnership that were not
otherwise utilized against passive activity income as described in the two
preceding sentences will no longer be suspended and will therefore be deductible
(subject to any other applicable limitations) by you against any other income
for that year, regardless of the character of that income. Accordingly, you
should consult your tax advisor concerning whether, and the extent to which, you
have available "suspended" passive activity losses from your partnership or
other investments that may be used to offset gain from the sale of units
pursuant to the offer.
INFORMATION REPORTING, BACKUP WITHHOLDING AND FIRPTA. If you tender any
units, you must report the transaction by filing a statement with your Federal
income tax return for the year of the tender which provides certain required
information to the IRS. To prevent the possible application of back-up Federal
income tax withholding of 31% with respect to the payment of the offer
consideration, you may have to provide us with your correct taxpayer
identification number. See the instructions to the letter of transmittal.
Gain realized by a foreign person on the sale of a unit pursuant to the
offer will be subject to Federal income tax under the Foreign Investment in Real
Property Tax Act. Under these provisions of the Internal Revenue Code, the
transferee of an interest held by a foreign person in a partnership which owns
United States real property generally is required to deduct and withhold 10% of
the amount realized on the disposition. Amounts withheld would be creditable
against a foreign person's Federal income tax liability and, if in excess
thereof, a refund could be obtained from the Internal Revenue Service by filing
a U.S. income tax return. See the instructions to the letter of transmittal.
TAX CONSEQUENCES TO NON-TENDERING AND PARTIALLY-TENDERING LIMITED
PARTNERS. Section 708 of the Internal Revenue Code provides that if there is a
sale or exchange of 50% or more of the total interest in capital and profits of
a partnership within any 12-month period, such partnership terminates for
Federal income tax purposes. It is possible that our acquisition of units
pursuant to the offer could result in such a termination of your partnership.
Notwithstanding the fact that the agreement of limited partnership of your
partnership may prohibit a transfer of ownership of an interest that would cause
a tax termination, the assignment to us of rights to distributions with respect
to units may cause a termination of your partnership for Federal income tax
purposes. If your partnership is deemed to terminate for tax purposes, the
following Federal income tax events will be deemed to occur: the terminated
partnership will be deemed to have contributed all of its assets (subject to its
liabilities) to a new partnership in exchange for an interest in the new
partnership and, immediately thereafter, the old partnership will be deemed to
have distributed interests in the new partnership to the remaining limited
partners in proportion to their respective interests in the old partnership in
liquidation of the old partnership.
A remaining limited partner will not recognize any gain or loss upon
the deemed distribution or upon the deemed contribution and the capital accounts
of the remaining limited partners in the old partnership will carry over intact
into the new partnership. A termination will change (and possibly shorten) a
remaining partner's holding period with respect to its retained units in your
partnership for federal income tax purposes.
The new partnership's adjusted tax basis in its assets will be the same
as the old partnership's basis in such assets immediately before the
termination. A termination may also subject the assets of the new partnership to
depreciable lives in excess of those currently applicable to the old
partnership. This would generally decrease the annual average depreciation
deductions allocable to the remaining limited partners for a number of years
following consummation of the offer (thereby increasing the taxable income
allocable to their units in each such year), but would have no effect on the
total depreciation deductions available over the useful lives of the assets of
your partnership.
Elections as to certain tax matters previously made by the old
partnership prior to termination will not be applicable to the new partnership
unless the new partnership chooses to make the same elections.
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Additionally, upon a termination for tax purposes, the old
partnership's taxable year will close for all limited partners. In the case of a
remaining limited partner or a partially tendering limited partner reporting on
a tax year other than a calendar year, the closing of the partnership's taxable
year may result in more than 12 months' taxable income or loss of the old
partnership being includible in such limited partner's taxable income for the
year of termination.
SECTION 7. EFFECTS OF THE OFFER.
FUTURE CONTROL BY AIMCO. Because the general partner of your
partnership is our affiliate, we have control over the management of your
partnership. If we are successful in acquiring more than 15.75% 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
34.25% 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 any agreement of limited
partnership, the operations of any partnership, the business and property owned
by any partnership, the management compensation payable to any general partner
or any other matter relating to your partnership, except it would result in us
increasing our ownership of units. We have no current intention of changing the
fee structure for your general partner or the manager of your partnership's
residential property.
EFFECT ON TRADING MARKET; REGISTRATION UNDER 12(G) OF THE EXCHANGE ACT.
If a substantial number of units are purchased pursuant to the offer, the result
will be a reduction in the number of limited partners in your partnership. In
the case of certain kinds of equity securities, a reduction in the number of
securityholders might be expected to result in a reduction in the liquidity and
volume of activity in the trading market for the security. In this case,
however, there is no established public trading market for the units and,
therefore, we do not believe a reduction in the number of limited partners will
materially further restrict your ability to find purchasers for your units
through secondary market transactions.
The units are registered under Section 12(g) of the Exchange Act, which
means, among other things, that your partnership is required to file periodic
reports with the SEC and to comply with the SEC's proxy rules. We do not expect
or intend that consummation of the offer will cause the units to cease to be
registered under Section 12(g) of the Exchange Act. If the units were to be held
by fewer than 300 persons, your partnership could apply to de-register the units
under the Exchange Act. Because the units are widely-held, however, we believe
that, even if we purchase the maximum number of units in the offer, the units
will be held of record by more than 300 persons.
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<PAGE> 15
SECTION 8. INFORMATION CONCERNING US AND CERTAIN OF OUR AFFILIATES.
We are AIMCO Properties, L.P., a Delaware limited partnership. Together
with our subsidiaries, we conduct substantially all of the operations of
Apartment Investment and Management Company, a Maryland corporation ("AIMCO").
AIMCO is a real estate investment trust that owns and manages multifamily
apartment properties throughout the United States. Based on apartment unit data
compiled by the National Multi-Housing Council, we believe that, as of March 31,
1999, AIMCO was one of the largest owners and managers of multifamily apartment
properties in the United States, with a total portfolio of 373,409 apartment
units in 2,071 properties located in 49 states, the District of Columbia and
Puerto Rico. AIMCO's Class A Common Stock is listed and traded on the New York
Stock Exchange under the symbol "AIV." As of March 31, 1999, AIMCO:
o owned or controlled 63,069 units in 240 apartment properties;
o held an equity interest in 168,817 units in 891 apartment
properties; and
o managed 141,523 units in 940 apartment properties for third
party owners and affiliates.
Our general partner is AIMCO-GP, Inc., which is a wholly owned
subsidiary of AIMCO. Our principal executive offices are located at 1873 South
Bellaire Street, Denver, Colorado 80222, and our telephone number is (303)
757-8101.
The names, positions and business addresses of the directors and
executive officers of AIMCO and your general partner as well as a biographical
summary of the experience of such persons for the past five years or more, are
set forth on Annex I attached hereto and are incorporated herein by reference.
We and AIMCO are both subject to the information and reporting
requirements of the Exchange Act and, in accordance therewith, file reports and
other information with the Securities and Exchange Commission relating to our
business, financial condition and other matters. Such reports and other
information may be inspected at the public reference facilities maintained by
the SEC at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549;
Citicorp Center, 500 West Madison Street, Chicago, Illinois 60661; and 7 World
Trade Center, 13th Floor, New York, New York 10048. Copies of such material can
also be obtained from the Public Reference Room of the SEC in Washington, D.C.
at prescribed rates. The SEC also maintains a site on the World Wide Web at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the SEC.
In addition, information filed by AIMCO with the New York Stock Exchange may be
inspected at the offices of the New York Stock Exchange at 20 Broad Street, New
York, New York 10005.
For more information regarding AIMCO Properties, L.P., please refer to
the Annual Report on Form 10-K for the year ended December 31, 1998
(particularly the management's discussion and analysis of financial condition
and results of operations) and other reports and documents filed by it with the
SEC.
Neither we nor, to the best of our knowledge, any of the persons listed
on Annex I attached hereto, (i) beneficially own or have a right to acquire any
units, (ii) have effected any transaction in the units in the past three years,
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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<PAGE> 16
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 control of the entity that manages the residential property
owned by your partnership. On October 31, 1998, IPT and AIMCO entered into an
agreement and plan of merger, dated as of October 1, 1998, pursuant to which IPT
merged with AIMCO on February 26, 1999 (the "IPT Merger"). Together with our
subsidiaries, AIMCO currently owns, in the aggregate, approximately 34.25% of
the outstanding limited partnership units of your partnership.
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. 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 (excluding your partnership) filed a
purported class and derivative action in California Superior Court in the County
of San Mateo against AIMCO, Insignia, the general partners of the partnerships,
certain persons and entities who purportedly formerly controlled the general
partners, and additional entities affiliated with and individuals who are
officers, directors and/or principals of several of the defendants. The
complaint contains allegations that, among other things, (i) the defendants
breached fiduciary duties owed to the plaintiffs, or aided and abetted in those
purported breaches, by selling or agreeing to sell their "fiduciary positions"
as stockholders, officers and directors of the general partners for a profit and
retaining said profit rather than distributing it to the plaintiffs; (ii) the
defendants breached fiduciary duties, or aided and abetted in those purported
breaches, by mismanaging the partnerships and
14
<PAGE> 17
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 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, the present time may
not be the most desirable time to sell the real estate assets of your
partnership in private transactions, and any liquidation sale would be
uncertain. Liquidation of the partnership assets may trigger a substantial
prepayment penalty under the mortgage for the property. Your general partner
believes it currently is in the best interest of your partnership to continue
holding its real estate assets.
CONTINUATION OF THE PARTNERSHIP WITHOUT THE OFFER
A second alternative would be for your partnership to continue as a
separate legal entity, with its own assets and liabilities and continue to be
governed by its existing agreement of limited partnership, without our offer. A
number of advantages could result from the continued operation of your
partnership. Given improving rental market conditions, the level of
distributions might increase over time. It is possible that the private resale
market for properties could improve over time, making a sale of the
partnership's property in a private transaction at some point in the future a
more attractive option than it is currently. The continuation of your
partnership will allow you to continue to participate in the net income and any
increases in revenue of your partnership and any net proceeds from the sale of
any property owned by your partnership. However, no assurance can be given as to
future operating results or as to the results of any attempts to sell any
property owned by your partnership.
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
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<PAGE> 18
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 property it owns and not liquidate.
Your general partner considers the sale of partnership property 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 your partnership's property 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 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 property 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 property for the year ending December
31, 1999; and (v) tender offer statements and beneficial ownership reports on
Schedules 13D, 14D-1 and 14D-9. Our determination of the offer price was based
on our review and analysis of the foregoing information and the analyses
concerning the partnership summarized below.
VALUATION OF UNITS. We determined our offer price by estimating the
value of each 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 nonrecurrent items. In this
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<PAGE> 19
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.
<TABLE>
<S> <C>
Net Income (Loss) ................. $(1,128,000)
Other Non-Operating Expense ....... (55,000)
Depreciation ...................... 2,745,000
Interest .......................... 4,291,000
-----------
Property Income ................... $ 5,853,000
</TABLE>
Although the direct capitalization method is a widely accepted way of
valuing real estate, there are a number of other methods available to value real
estate, each of which may result in different valuations of a property. Further,
in applying the direct capitalization method, others may make different
assumptions and obtain different results. The proceeds that you would receive if
you sold your units to someone else or if your partnership were actually
liquidated might be higher than our offer price. We determined our offer price
as follows:
o First, we estimated the value of the property owned by your partnership
using the direct capitalization method. We selected capitalization
rates based on our experience in valuing similar properties. The lower
the capitalization rate applied to a property's income, the higher its
value. We considered local market sales information for comparable
properties, estimated actual capitalization rates (property income less
capital reserves divided by sales price) and then evaluated each
property in light of its relative competitive position, taking into
account property location, occupancy rate, overall property condition
and other relevant factors. We believe that arms-length purchasers
would base their purchase offers on capitalization rates comparable to
those used by us, however there is no single correct capitalization
rate and others might use different rates. We divided the fiscal 1998
property income of $5,853,000 by the property's capitalization rate of
10% to derive an estimated gross property value of $58,529,000.
o Second, we calculated the value of the equity of your partnership by
adding to the aggregate gross property value of the property 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 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 $7,309,994. 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.
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<PAGE> 20
<TABLE>
<S> <C>
Estimated gross valuation of partnership property .................... $ 58,529,000
Plus: Cash and cash equivalents ...................................... 2,077,806
Plus: Other partnership assets, net of security deposits ............. 1,528,932
Less: Mortgage debt, including accrued interest ...................... (45,517,229)
Less: Notes payable, including accrued interest ...................... (396,849)
Less: Other liabilities .............................................. (1,110,532)
------------
Partnership valuation before taxes and certain costs ................. $ 15,111,128
Less: Disposition Fees ............................................... 0
Less: Extraordinary capital expenditures for deferred maintenance .... (4,874,684)
Less: Closing costs .................................................. (2,926,450)
------------
Estimated net valuation of your partnership .......................... $ 7,309,994
Percentage of estimated net valuation allocated to units ............. 99%
------------
Estimated net valuation of units ..................................... $ 7,236,894
Total number of units ...................................... 566
------------
Estimated valuation per unit ......................................... $ 12,786
------------
Cash consideration per unit .......................................... $ 12,786
------------
</TABLE>
COMPARISON OF CONSIDERATION TO ALTERNATIVE CONSIDERATION. To assist
holders of units in evaluating the offer, your general partner has attempted to
compare the offer price against estimates of the value of the units on a
liquidation basis. The general partner of your partnership believes that
analyzing the alternatives in terms of estimated value, based upon currently
available data and, where appropriate, reasonable assumptions made in good
faith, establishes a reasonable framework for comparing alternatives. Since the
value of the consideration for alternatives to the offer is dependent upon
varying market conditions, no assurance can be given that the estimated values
reflect the range of possible values.
The results of these comparative analyses are summarized in the
following chart. You should bear in mind that the estimated values assigned to
the alternate forms of consideration are based on a variety of assumptions that
have been made by us. These assumptions relate to, among other things,
projected amounts and the capitalization rates that may be used by prospective
buyers if your partnership assets were to be liquidated.
In addition, these estimates are based upon certain information
available to your general partner 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 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.
COMPARISON TABLE
<TABLE>
<CAPTION>
PER UNIT
--------
<S> <C>
Cash offer price.............................. $ 12,786
Alternatives:
Estimated liquidation proceeds............. $ 12,786
</TABLE>
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<PAGE> 21
PRICES ON SECONDARY MARKET
There is no active market for your units. Your general partner (which
is our subsidiary) is unaware of any secondary market activity in the units.
Therefore any comparison to prices on the secondary market is not possible at
the present time.
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 estimated the liquidation value of units using the same direct
capitalization method and assumptions as we did in valuing the units for the
offer price. The liquidation analysis also assumed that your partnership's
property was sold to an independent third-party buyer at the current property
value and that other balance sheet assets (excluding amortizing assets) and
liabilities of your partnership were sold at their book value, and that the net
proceeds of sale were allocated to your partners in accordance with your
partnership's agreement of limited partnership.
The liquidation analysis assumes that the assets of your partnership
are sold in a single transaction. Should the assets be liquidated over time,
even at prices equal to those projected, distributions to limited partners from
cash flow from operations might be reduced because your partnership's
relatively fixed costs, such as general and administrative expenses, are not
proportionately reduced with the liquidation of assets. However, for
simplification purposes, the sales of the assets are assumed to occur
concurrently. The liquidation analysis assumes that the assets would be
disposed of in an orderly manner and not sold in forced or distressed sales
where sellers might be expected to dispose of their interests at substantial
discounts to their actual fair market value.
ALLOCATION OF CONSIDERATION. We have allocated to the limited partners
the amount of the estimated net valuation of your partnership based on your
partnership's agreement of limited partnership as if your partnership was being
liquidated at the current time.
SECTION 10. POSITION OF THE GENERAL PARTNER OF YOUR PARTNERSHIP WITH
RESPECT TO THE OFFER.
Your general partner is affiliated with us. Therefore, the general
partner of your partnership has substantial conflicts of interest with regard
to the offer and makes no recommendation as to whether you should tender or
refrain from tendering your units. You must make your own decision whether or
not to participate in the offer, based upon a number of factors, including your
financial position, need or desire for liquidity, other financial opportunities
and tax position.
Your general partner has not retained an unaffiliated representative to
act on behalf of the limited partners in negotiating the terms of the offer
since each individual limited partner can make his or her own decision as to
whether or not to tender. Unlike a merger or other form of partnership
reorganization, the preferences of other limited partners in your partnership
cannot bind you. If an unaffiliated representative had been obtained, it is
possible that such representative could have negotiated a higher price for your
units than we are offering.
The terms of our offer have been established by us and are not the
result of arms-length negotiations. In determining the terms of the offer, we
considered the following factors and information:
1. The opportunity for you to make an individual decision on
whether to tender your units in the offer and that the offer
allows each investor to continue to hold his or her units.
2. The estimated value of your partnership's property has been
determined based on a method believed to reflect the valuation
of such assets by buyers in the market.
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<PAGE> 22
3. An analysis of the possible alternatives including liquidation
and continuation without the option of the offer. See "The
Offer -- Section 9. Background and Reasons for the Offer --
Alternatives Considered."
4. An evaluation of the financial condition and results of
operations of your partnership and AIMCO Properties, L.P. and
their anticipated level of operating results. The offer is not
expected to have an effect on your partnership's financial
condition or results of operations. The net income of your
partnership has increased from a loss of $1,003,000 for the
year ended December 31, 1997 to a loss of $1,094,000 for the
year ended December 31, 1998. These factors are reflected in
our valuation of your partnership.
5. The method of determining the offer price which is
substantially the financial equivalent to your interest in
your partnership. See "The Offer -- Section 9. Background and
Reasons for the Offer -- Valuation of Units."
6. The fact that the units are illiquid and the offer provides
holders of units with liquidity. However, we did review
whether trading information was available.
7. The estimated unit value of $12,786, based on a total
estimated value of your partnership's property of $58,529,000.
Your general partner has no present intention to liquidate
your partnership or to sell or refinance your partnership's
property. See "The Offer -- Section 9. Background and Reasons
for the Offer -- Valuation of Units" for a detailed
explanation of the methods we used to value your partnership.
8. The offer price in light of any previous tender offers and the
results of such offers since the results of the offer indicate
a price at which some limited partners sold their units. See
"The Offer -- Section 9. Background and Reasons for the Offer
-- Prior Tender Offers."
9. The fact that if your partnership was liquidated as opposed to
continuing, the general partner would not receive the
substantial management fees it currently receives. We do not
believe that liquidation of the partnership is in the best
interests of the unitholders. We are not proposing to change
the current management fee arrangement.
In evaluating these factors, we did not quantify or otherwise attach
particular weight to any of them.
SECTION 11. CONFLICTS OF INTEREST AND TRANSACTIONS WITH AFFILIATES.
CONFLICTS OF INTEREST WITH RESPECT TO THE OFFER. The general partner of
your partnership became an affiliate of AIMCO on October 1, 1998, when AIMCO
merged with Insignia. Your general partner became an affiliate 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 an affiliate 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
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<PAGE> 23
to whether you should tender or refrain from tendering your units. Such
conflicts of interest in connection with the offer and the operation of AIMCO
differ from those conflicts of interest that currently exist for your
partnership. See "Risk Factors -- Conflicts of Interest With Respect to the
Offer." Your general partner has filed a Solicitation/Recommendation Statement
on Schedule 14D-9 with the SEC, which indicates that it is remaining neutral
and making no recommendation as to whether limited partners should tender their
units pursuant to the offer. LIMITED PARTNERS ARE URGED TO READ THIS OFFER TO
PURCHASE AND THE SCHEDULE 14D-9 AND THE RELATED MATERIALS CAREFULLY AND IN
THEIR ENTIRETY BEFORE DECIDING WHETHER TO TENDER THEIR UNITS.
CONFLICTS OF INTEREST THAT CURRENTLY EXIST FOR YOUR PARTNERSHIP. We own
both the general partner of your partnership and the manager of your
partnership's residential property. The general partner does not receive an
annual management fee but may receive reimbursements for expenses incurred in
its capacity as general partner. The general partner of your partnership
received total fees and reimbursements of $176,000 in 1996, $186,000 in 1997
and $272,000 in 1998. The reimbursement amount to your general partner for the
1998 fiscal year included $5,000 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 $415,000 in 1996,
$423,000 in 1997 and $445,000 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 property is located.
It is believed that this concentration of properties in a general market area
will facilitate overall operations through collective advertising efforts and
other operational efficiencies. In managing AIMCO's properties, we will attempt
to reduce such conflicts between competing properties by referring prospective
customers to the property considered to be most conveniently located for the
customer's needs.
FUTURE OFFERS. Although we have no current plans to conduct future
tender offers for your units, our plans may change based on future
circumstances. Any such future offers that we might make could be for
consideration that is more or less than the consideration we are currently
offering.
SECTION 12. FUTURE PLANS OF THE PURCHASER.
As described above under "The Offer -- Section 9. Background and
Reasons for the Offer," we own the general partner and thereby control the
management of your partnership. In addition, we own the manager of the
residential property. We currently intend that, upon consummation of the offer,
your partnership will continue its business and operations substantially as
they are currently being conducted. The offer is not expected to have any
effect on partnership operations.
Although we have no present intention to do so, we may acquire
additional units or sell units after completion or termination of the offer.
Any acquisition may be made through private purchases, through one or more
future tender or exchange offers, by merger, consolidation or by any other
means deemed advisable. Any acquisition may be at a price higher or lower than
the price to be paid for the units purchased pursuant to this offer, and may be
for cash, limited partnership interests in AIMCO Properties, L.P. or other
consideration. We also may consider selling some or all of the units we acquire
pursuant to the offer to persons not yet determined, which may include our
affiliates. We may also buy your partnership's property, although we have no
present intention to do so. There can be no assurance, however, that we will
initiate or complete, or will cause your partnership to initiate or complete,
any subsequent transaction during any specific time period following the
expiration of the offer or at all.
Except as set forth herein, we do not have any present plans or
proposals which relate to or would result in an extraordinary transaction, such
as a merger, reorganization or liquidation, involving your partnership or any
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<PAGE> 24
of your partnership's subsidiaries; a sale or transfer of a material amount of
your partnership's assets (or assets of the partnership's subsidiaries); any
changes in composition of your partnership's senior management or personnel or
their compensation; any changes in your partnership's present capitalization or
distribution policy; or any other material changes in your partnership's
structure or business. However, we expect that consistent with your general
partner's fiduciary obligations, the general partner will seek and review
opportunities (including opportunities identified by us) to engage in
transactions which could benefit your partnership, such as sales or
refinancings of assets or a combination of the partnership with one or more
other entities, with the objective of seeking to maximize returns to limited
partners.
We have been advised that the possible future transactions the general
partner expects to consider on behalf of your partnership include: (1) payment
of extraordinary distributions; (2) refinancing, reducing or increasing
existing indebtedness of the partnership; (3) sales of assets, individually or
as part of a complete liquidation; and (4) mergers or other consolidation
transactions involving the partnership. Any such merger or consolidation
transaction could involve other limited partnerships in which your general
partner or its affiliates serve as general partners, or a combination of the
partnership with one or more existing, publicly traded entities (including,
possibly, affiliates of 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 34.25% of the outstanding 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. Riverside Park Associates Limited Partnership was organized on
May 14, 1986, under the laws of the State of Delaware. 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 a single
residential apartment complex, Riverside Park, a 1,222-unit complex in Fairfax
County Virginia.
The general partner of your partnership is Winthrop Financial
Associates, which is an affiliate of AIMCO. An affiliate of AIMCO serves as
manager of the residential property owned by your partnership. As of December
31, 1998, there were 566 units issued and outstanding, which were held of
record by 666 limited partners. Your partnership's principal executive offices
are located at 1873 South Bellaire Street, 17th Floor, Denver, Colorado 80222,
and its telephone number at that address is (303) 757-8101.
For additional information about your partnership, please refer to the
annual report prepared by your partnership which was sent to you prior to this
offer to purchase, particularly Item 2 of Form 10-KSB which contains detailed
information regarding the property owned, including mortgages, rental rates and
taxes.
INVESTMENT OBJECTIVES AND POLICIES; SALE OR FINANCING OF INVESTMENTS.
In general, your general partner regularly evaluates the partnership's property
by considering various factors, such as the partnership's financial position
and real estate and capital markets conditions. The general partner monitors
the property's
22
<PAGE> 25
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 property could improve over
time, making a sale of the partnership's property 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 property primarily because it
expects the property's operating performance to improve in the near term. In
making this assessment, your general partner noted that occupancy and rental
rates at the property were 96% and $8,775/unit, respectively, at December 31,
1998, compared to 95% and $8,440/unit, respectively, at December 31, 1997.
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 property at
the present time would adequately reflect the property's future prospects.
Another significant factor considered by your general partner is the likely tax
consequences of a sale of the property 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
property.
Your partnership has an ongoing program of capital improvements,
replacements and renovations, including roof replacements, kitchen and bath
renovations, balcony repairs (where applicable), replacement of various
building systems and other replacements and renovations in the ordinary course
of business. All capital improvement and renovation costs are expected to be
paid from operating cash flows, cash reserves, or from short-term or long-term
borrowings.
COMPETITION. There are other residential properties within the market
area of your partnership's property. 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 property and the rents that may be
charged for such apartments. While we are a significant factor in the United
States in the apartment industry, competition for apartments is local.
According to data published by the National Multi-Housing Council, as of
January 1, 1999, our portfolio of 373,409 owned or managed apartment units
represents approximately 2.2% of the national stock of rental apartments in
structures with at least five apartments.
SELECTED FINANCIAL AND PROPERTY-RELATED DATA. The summary financial
information of Riverside Park Associates Limited Partnership for the years
ended December 1998 and 1997 is based on audited financial statements. This
information should be read in conjunction with such financial statements,
including notes thereto, and "Management's Discussion and Analysis of Financial
Condition and Results of Operations of Your Partnership" in the Annual Report
on Form 10-KSB of your partnership for the year ended December 31, 1998.
RIVERSIDE PARK ASSOCIATES LIMITED PARTNERSHIP
(in thousands, except per unit data)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
-------------------------------
1998 1997
---- ----
<S> <C> <C>
OPERATING DATA:
Total Revenues........................................... $11,204 $10,939
Net Income (Loss)........................................ (1,128) (1,034)
Net Income per limited partnership unit.................. (1,933) (1,772)
Distributions per limited partnership unit............... -- 2,500
</TABLE>
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<PAGE> 26
<TABLE>
<CAPTION>
DECEMBER 31,
------------
1998 1997
---- ----
<S> <C> <C>
BALANCE SHEET DATA:
Cash and Cash Equivalents ....................... $ 2,078 $ 2,478
Real Estate, Net of Accumulated Depreciation .... 40,422 41,538
Total Assets .................................... 44,293 45,783
Notes Payable ................................... 45,517 46,157
General Partners' Capital (Deficit) ............. (1,209) (1,175)
Limited Partners' Capital (Deficit) ............. (1,335) (241)
Partners' Capital (Deficit) ..................... (2,544) (1,416)
Total Distributions ............................. -- (1,459)
Net increase (decrease) in cash
and cash equivalents ......................... (400) (158)
Net cash provided by operating activities ....... (2,296) (2,965)
</TABLE>
DESCRIPTION OF PROPERTIES. The following shows the location, the date
of purchase, the nature of your partnership's ownership interest in and the use
of your partnership's property.
<TABLE>
<CAPTION>
Property Date of Purchase Type of Ownership Use
-------- ---------------- ----------------- ---
<S> <C> <C> <C>
Riverside Park 05/86 Fee ownership subject Apartment
Fairfax County, Virginia to first mortgage 1,222 units
</TABLE>
ACCUMULATED DEPRECIATION SCHEDULE. The following shows the gross
carrying value, accumulated depreciation and federal tax basis of your
partnership's property as of December 31, 1998.
<TABLE>
<CAPTION>
Gross
Carrying Accumulated Federal
Property Value Depreciation Rate Method Tax Basis
-------- ----- ------------ ---- ------ ---------
(in thousands) (in thousands)
<S> <C> <C> <C> <C> <C>
Riverside Park $74,747 $34,325 5-27.5 S/L $29,256
yrs.
</TABLE>
SCHEDULE OF MORTGAGES. The following shows certain information
regarding the outstanding mortgages encumbering your partnership's property 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>
Riverside Park $45,517 8.315%(2) (1) 09/27/01 $43,220
1st Mortgage
</TABLE>
(1) The principal balance is amortized over 25 years with a balloon payment
due September 27, 2001.
(2) Interest rate is based on the 30 day LIBOR + 2.75%.
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<PAGE> 27
AVERAGE ANNUAL RENTAL RATE AND OCCUPANCY. The following shows the
average annual rental rates and occupancy percentages for your partnership's
property during the past two years.
<TABLE>
<CAPTION>
Property Average Annual Rental Rate Average Annual Occupancy
-------- -------------------------- ------------------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Riverside Park $8,775/unit $8,440/unit 96% 95%
</TABLE>
SCHEDULE OF REAL ESTATE TAXES AND RATES. The following shows the real
estate taxes and rates for 1998 for your partnership's property.
<TABLE>
<CAPTION>
Property 1998 Billing 1998 Rate
-------- ------------ ---------
(in thousands)
<S> <C> <C>
Riverside Park $ 757 1.23%
</TABLE>
PROPERTY MANAGEMENT. Your partnership's residential property is
managed by an entity which is an affiliate of AIMCO. Pursuant to the management
agreement between the property manager and your partnership, the property
manager operates your partnership's residential property, establishes rental
policies and rates and directs marketing activities. The property manager also
is responsible for maintenance, the purchase of equipment and supplies, and the
selection and engagement of all vendors, suppliers and independent contractors.
DISTRIBUTIONS. The following table shows, for each of the years
indicated, the distributions paid per unit in such years.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31 AMOUNT
---------------------- ------
<S> <C>
1995.................... $ 1,000
1996.................... 13,500
1997.................... 2,500
1998.................... 0
--------
Total......... $ 17,000
</TABLE>
OPERATING BUDGETS OF THE PARTNERSHIP. A summary of the operating budget
of your partnership's property for the year ending on December 31, 1999 is as
follows:
FISCAL 1999 OPERATING BUDGET
<TABLE>
<S> <C>
Total Revenues .................... $ 11,514,988
Operating Expenses ................ (5,006,609)
Replacement Reserves-- Net ........ 366,600
Debt Service ...................... (4,665,712)
Capital Expenditures .............. (6,610,354)
------------
Net Cash Flow ........... $ (4,401,087)
============
</TABLE>
The above budget at the time they were made were forward-looking
information developed by your general partner. Therefore, the budget was
dependent upon future events with respect to the ability of your partnership to
meet such budget. The budget incorporated various assumptions including, but
not limited to, lease revenue (including occupancy rates), various operating
expenses, general and administrative expenses, depreciation expenses, capital
expenditures, and working capital levels. While we deemed such budget to be
reasonable and valid at the date made, there is no assurance that the assumed
facts will be validated or that the
25
<PAGE> 28
circumstances will actually occur. Any estimate of the future performance of a
business, such as your partnership's business, is forward-looking and based on
assumptions some of which inevitably will prove to be incorrect.
The budget amounts provided above are figures that were not computed in
accordance with GAAP. In particular, items that are categorized as capital
expenditures for purposes of preparing the operating budget are often
re-categorized as expenses when the financial statements are audited and
presented in accordance with GAAP. Therefore, the summary operating budget
presented for fiscal 1999 should not necessarily be considered as indicative of
what the audited operating results for fiscal 1999 will be. For the year ended
December 31, 1998, the partnership reported revenues of $11,204,000, operating
expenses of $4,219,000 and replacement reserves and capital expenditures of
$6,243,754.
BENEFICIAL OWNERSHIP OF INTERESTS IN YOUR PARTNERSHIP. Together with
our subsidiaries, we currently own, in the aggregate, approximately 34.25% of
the outstanding limited partnership units of your partnership. Except as set
forth above, neither we, nor, to the best of our knowledge, any of our
affiliates, (i) beneficially own or have a right to acquire any units, (ii)
have effected any transactions in the units in the past three years, 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, and on a pro
forma basis assuming that all of the units sought in our offer had been
acquired at the beginning of each period:
<TABLE>
<CAPTION>
PARTNERSHIP PROPERTY
FEES AND MANAGEMENT
YEAR EXPENSES FEES
---- -------- ----
<S> <C> <C>
1995........... $ 0 $ 0
1996........... 176,000 415,000
1997........... 186,000 423,000
1998........... 272,000 445,000
</TABLE>
LEGAL PROCEEDINGS. Your partnership may be a party to a variety of
legal proceedings related to its ownership of the partnership's property and
management and leasing business, respectively, arising in the ordinary course
of the business, which are not expected to have a material adverse effect on
your partnership.
ADDITIONAL INFORMATION CONCERNING YOUR PARTNERSHIP. Your partnership
files annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document your partnership
files at the SEC's public reference rooms in Washington, D.C., New York, New
York, and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. Your partnership's SEC filings are
also available to the public at the SEC's web site at http://www.sec.gov.
SECTION 14. VOTING POWER.
If we acquire a substantial number of additional units pursuant to our
offer, we may be in a position to influence or control voting decisions with
respect to the limited partners of your partnership. See "The Offer -- Section
7 Effects of the Offer."
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<PAGE> 29
SECTION 15. SOURCE OF FUNDS.
We expect that approximately $2,149,874 will be required to purchase up
to 168.14 of the outstanding limited partnership units (exclusive of fees and
expenses estimated to be $12,000). For more information regarding the fees and
expenses, see "The Offer -- Section 19."
We will obtain all necessary funds from working capital or from our
$100 million revolving credit facility with Bank of America National Trust and
Savings Association ("Bank of America") and BankBoston, N.A. AIMCO Properties,
L.P. are the borrower under the credit facility, and all obligations thereunder
are guaranteed by AIMCO and certain of its subsidiaries. The annual interest
rate under the credit facility is based on either LIBOR or Bank of America's
reference rate, at our election, plus, an applicable margin. We elect which
interest rate will be applicable to particular borrowings under the credit
facility. The margin ranges between 2.25% and 2.75% in the case of LIBOR-based
loans and between 0.75% and 1.25% in the case of base rate loans, depending
upon a ratio of our consolidated unsecured indebtedness to the value of certain
unencumbered assets. The credit facility matures on September 30, 1999 unless
extended, at the discretion of the lenders. The credit facility provides for
the conversion of the revolving facility into a three year term loan. The
availability of funds to us under the credit facility is subject to certain
borrowing base restrictions and other customary restrictions, including
compliance with financial and other covenants thereunder. The financial
covenants require us to maintain a ratio of debt to gross asset value of no
more than 0.55 to 1.0, an interest coverage ratio of 2.25 to 1.0 and a fixed
charge coverage ratio of at least 1.7 to 1.0 from January 1, 1999 through June
30, 1999, and 1.8 to 1.0 thereafter. In addition, the credit facility limits us
from distributing more than 80% of our Funds From Operations (as defined) to
holders of our units, imposes minimum net worth requirements and provides other
financial covenants related to certain unencumbered assets.
SECTION 16. DISSENTERS' RIGHTS.
Neither the agreement of limited partnership of your partnership nor
applicable law provides any right for you to have your units appraised or
redeemed in connection with, or as a result of, our offer. You have the
opportunity to make an individual decision on whether or not to tender your
units in the offer.
SECTION 17. CONDITIONS OF THE OFFER.
Notwithstanding any other provisions of our offer, we will not be
required to accept for payment and pay for any units tendered pursuant to our
offer, may postpone the purchase of, and payment for, units tendered, and may
terminate or amend our offer if at any time on or after the date of this offer
to purchase and at or before the expiration of our offer (including any
extension thereof), any of the following shall occur:
(a) any change (or any condition, event or development involving a
prospective change) shall have occurred or been threatened in the business,
properties, assets, liabilities, indebtedness, capitalization, condition
(financial or otherwise), operations, licenses or franchises, management
contract, or results of operations or prospects of your partnership or local
markets in which your partnership owns property, including any fire, flood,
natural disaster, casualty loss, or act of God that, in our reasonable
judgment, are or may be materially adverse to your partnership or the value of
the units to us, or we shall have become aware of any facts relating to your
partnership, its indebtedness or its operations which, in our reasonable
judgment, has or may have material significance with respect to the value of
your partnership or the value of the units to us; or
(b) there shall have occurred (i) any general suspension of trading in,
or limitation on prices for, securities on any national securities exchange or
the over-the-counter market in the United States,(ii) a decline in the closing
price of a share of AIMCO's Class A Common Stock of more than 7.5% from the
date hereof, (iii) any extraordinary or material adverse change in the
financial, real estate or money markets or major equity security indices in the
United States such that there shall have occurred at least a 7.5% increase in
LIBOR or at least a 7.5%
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<PAGE> 30
decrease in the S&P 500 Index, the Morgan Stanley REIT Index, or the price of
the 10-year Treasury Bond or the 30-year Treasury Bond, in each case from the
date hereof, (iii) any material adverse change in the commercial mortgage
financing markets, (iv) a declaration of a banking moratorium or any suspension
of payments in respect of banks in the United States, (vi) a commencement of a
war, conflict, armed hostilities or other national or international calamity
directly or indirectly involving the United States (not existing on the date
hereof), (vii) any limitation (whether or not mandatory) by any governmental
authority on, or any other event which, in our reasonable judgment, might
affect the extension of credit by banks or other lending institutions, or
(viii) in the case of any of the foregoing existing at the time of the
commencement of the offer, in our reasonable judgment, a material acceleration
or worsening thereof; or
(c) there shall have been threatened, instituted or pending any action,
proceeding, application or counterclaim by any Federal, state, local or foreign
government, governmental authority or governmental agency, or by any other
person, before any governmental authority, court or regulatory or
administrative agency, authority or tribunal, which (i) challenges or seeks to
challenge our purchase of the units, restrains, prohibits or delays the making
or consummation of our offer, prohibits the performance of any of the contracts
or other arrangements entered into by us (or any affiliates of ours), seeks to
obtain any material amount of damages as a result of the transactions
contemplated by our offer, (ii) seeks to make the purchase of, or payment for,
some or all of the units pursuant to our offer illegal or results in a delay in
our ability to accept for payment or pay for some or all of the units, (iii)
seeks to prohibit or limit the ownership or operation by us or any of our
affiliates of the entity serving as general partner of the partnership or to
remove such entity as general partner of your partnership, or seeks to impose
any material limitation on our ability or the ability of any affiliate of ours
to conduct your partnership's business or own such assets, (iv) seeks to impose
material limitations on our ability to acquire or hold or to exercise full
rights of ownership of the units including, but not limited to, the right to
vote the units purchased by us on all matters properly presented to the limited
partners, or (v) might result, in our reasonable judgment, in a diminution in
the value of your partnership or a limitation of the benefits expected to be
derived by us as a result of the transactions contemplated by our offer or the
value of the units to us; or
(d) there shall be any action taken, or any statute, rule, regulation,
order or injunction shall be sought, proposed, enacted, promulgated, entered,
enforced or deemed applicable to our offer, your partnership, any general
partner of your partnership, us or any affiliate of ours or your partnership,
or any other action shall have been taken, proposed or threatened, by any
government, governmental authority or court, that, in our reasonable judgment,
might, directly or indirectly, result in any of the consequences referred to in
clauses (i) through (vi) of paragraph (c) above; or
(e) your partnership shall have (i) changed, or authorized a change of,
the units or your partnership's capitalization, (ii) issued, distributed, sold
or pledged, or authorized, proposed or announced the issuance, distribution,
sale or pledge of (A) any equity interests (including, without limitation,
units), or securities convertible into any such equity interests or any rights,
warrants or options to acquire any such equity interests or convertible
securities, or (B) any other securities in respect of, in lieu of, or in
substitution for units outstanding on the date hereof, (iii) purchased or
otherwise acquired, or proposed or offered to purchase or otherwise acquire,
any outstanding units or other securities, (iv) declared or paid any dividend
or distribution on any units or issued, authorized, recommended or proposed the
issuance of any other distribution in respect of the units, whether payable in
cash, securities or other property, (v) authorized, recommended, proposed or
announced an agreement, or intention to enter into an agreement, with respect
to any merger, consolidation, liquidation or business combination, any
acquisition or disposition of a material amount of assets or securities, or any
release or relinquishment of any material contract rights, or any comparable
event, not in the ordinary course of business, (vi) taken any action to
implement such a transaction previously authorized, recommended, proposed or
publicly announced, (vii) issued, or announced its intention to issue, any debt
securities, or securities convertible into, or rights, warrants or options to
acquire, any debt securities, or incurred, or announced its intention to incur,
any debt other than in the ordinary course of business and consistent with past
practice, (viii) authorized, recommended or proposed, or entered into, any
transaction which, in our reasonable judgment, has or could have an adverse
affect
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<PAGE> 31
on the value of your partnership or the units, (ix) proposed, adopted or
authorized any amendment of its organizational documents, (x) agreed in writing
or otherwise to take any of the foregoing actions or (xi) been notified that
any debt of your partnership or any of its subsidiaries secured by any of its
or their assets is in default or has been accelerated; or
(f) a tender or exchange offer for any units shall have been commenced
or publicly proposed to be made by another person or "group" (as defined in
Section 13(d)(3) of the Exchange Act), or it shall have been publicly disclosed
or we shall have otherwise learned that (i) any person or group shall have
acquired or proposed or be attempting to acquire beneficial ownership of more
than five percent of the units, or shall have been granted any option, warrant
or right, conditional or otherwise, to acquire beneficial ownership of more
than five percent of the units, other than acquisitions for bona fide arbitrage
purposes, or (ii) any person or group shall have entered into a definitive
agreement or an agreement in principle or made a proposal with respect to a
merger, consolidation or other business combination with or involving your
partnership; or
(g) we shall not have adequate cash or financing commitments available
to pay the for the units validly tendered; or
(h) the offer to purchase may have an adverse effect on AIMCO's status
as a REIT.
The foregoing conditions are for our sole benefit and may be asserted
by us regardless of the circumstances giving rise to such conditions or may be
waived by us in whole or in part at any time and from time to time in our
reasonable discretion. The failure by us at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such right, the waiver of
any such right with respect to any particular facts or circumstances shall not
be deemed a waiver with respect to any other facts or circumstances and each
right shall be deemed a continuing right which may be asserted at any time and
from time to time.
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, aware of any licenses or
regulatory permits that would be material to the business of your partnership,
taken as a whole, and that might be adversely affected by our acquisition of
units as contemplated herein, or any filings, approvals or other actions by or
with any domestic or foreign governmental authority or administrative or
regulatory agency that would be required prior to the acquisition of units by
us pursuant to the offer, other than the filing of a Tender Offer Statement on
Schedule 14D-1 with the SEC (which has already been filed) and any required
amendments thereto. While there is no present intent to delay the purchase of
units tendered pursuant to the offer pending receipt of any such additional
approval or the taking of any such action, there can be no assurance that any
such additional approval or action, if needed, would be obtained without
substantial conditions or that adverse consequences might not result to your
partnership or its business, or that certain parts of its business might not
have to be disposed of or other substantial conditions complied with in order
to obtain such approval or action, any of which could cause us to elect to
terminate the offer without purchasing units thereunder. Our obligation to
purchase and pay for units is subject to certain conditions, including
conditions related to the legal matters discussed in this Section 18.
ANTITRUST. We do not believe that the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, is applicable to the acquisition of units
contemplated by our offer.
MARGIN REQUIREMENTS. The units are not "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System and,
accordingly, those regulations generally are not applicable to our offer.
29
<PAGE> 32
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.
30
<PAGE> 33
ANNEX I
OFFICERS AND DIRECTORS
The names and positions of the executive officers of Apartment
Investment and Management Company ("AIMCO"), AIMCO-GP, Inc. ("AIMCO-GP") and
the directors of AIMCO are set forth below. The two directors of AIMCO-GP are
Terry Considine and Peter Kompaniez. The two directors of the general partner
of your partnership are Peter K. Kompaniez and Patrick J. Foye. The two
executive officers of the general partner of your partnership are Patrick J.
Foye, Executive Vice President, and Carla Stoner, Senior Vice President - Real
Estate Accounting. Unless otherwise indicated, the business address of each
executive officer and director is 1873 South Bellaire Street, 17th Floor,
Denver, Colorado 80222. Each executive officer and director is a citizen of the
United States of America.
<TABLE>
<CAPTION>
NAME POSITION
---- --------
<S> <C>
Terry Considine................................. Chairman of the Board of Directors and Chief Executive
Officer
Peter K. Kompaniez.............................. Vice Chairman, President and Director
Thomas W. Toomey................................ Executive Vice President-- Finance and Administration
Joel F. Bonder.................................. Executive Vice President, General Counsel and Secretary
Patrick J. Foye................................. Executive Vice President
Robert Ty Howard................................ Executive Vice President-- Ancillary Services
Steven D. Ira................................... Executive Vice President and Co-Founder
Harry G. Alcock................................. Senior Vice President-- Acquisitions
Troy D. Butts................................... Senior Vice President and Chief Financial Officer
Richard S. Ellwood.............................. Director
J. Landis Martin................................ Director
Thomas L. Rhodes................................ Director
John D. Smith................................... Director
</TABLE>
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATIONS FOR THE LAST FIVE YEARS
---- ---------------------------------------------
<S> <C>
Terry Considine............... Chief Executive Officer of AIMCO and AIMCO-GP since July
1994. He is the sole owner of Considine
Investment Co. and prior to July 1994 was owner
of approximately 75% of Property Asset
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, renova
tion, development and disposition of
properties. Mr. Considine has also controlled
entities engaged in other businesses such as
television broadcasting, gasoline distribution
and environmental laboratories. Mr. Considine
received a B.A. from Harvard College, a J.D.
from Harvard Law School and was formerly
admitted as a member of the Massachusetts Bar
(inactive).
</TABLE>
I-1
<PAGE> 34
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATIONS FOR THE LAST FIVE YEARS
---- ---------------------------------------------
<S> <C>
Peter K. Kompaniez............ Mr. Kompaniez has been Vice Chairman and a
director of AIMCO since July 1994 and was
appointed President of AIMCO in July 1997.
Mr. Kompaniez has served as Vice President
of AIMCO-GP from July 1994 through July 1998
and was appointed President in July 1998.
Mr. Kompaniez has been a director of
AIMCO-GP since July 1994. Since September
1993, Mr. Kompaniez has owned 75% of PDI
Realty Enterprises, Inc, a Delaware corpora-
tion ("PDI"), one of AIMCO's predecessors,
and serves as its President and Chief
Executive Officer. From 1986 to 1993, he
served as President and Chief Executive
Officer of Heron Financial Corporation
("HFC"), a United States holding company for
Heron International, N.V.'s real estate and
related assets. While at HFC, Mr. Kompaniez
administered the acquisition, development
and disposition of approximately 8,150
apartment units (including 6,217 units that
have been acquired by the AIMCO) and 3.1
million square feet of commercial real
estate. Prior to joining HFC, Mr. Kompaniez
was a senior partner with the law firm of
Loeb and Loeb where he had extensive real
estate and REIT experience. Mr. Kompaniez
received a B.A. from Yale College and a J.D.
from the University of California (Boalt
Hall).
Thomas W. Toomey.............. Mr. Toomey has served as Senior Vice
President - Finance and Administration of
AIMCO since January 1996 and was promoted to
Executive Vice-President - Finance and
Administration in March 1997. Mr. Toomey has
been Executive Vice President-Finance and
Administration of AIMCO-GP similar capacity
with Lincoln Property Company ("LPC") as
well as Vice President/Senior Controller and
Director of Administrative Services of
Lincoln Property Services where he was
responsible for LPC's computer systems,
accounting, tax, treasury services and
benefits administration. From 1984 to 1990,
he was an audit manager with Arthur Andersen
& Co. where he served real estate and
banking clients. From 1981 to 1983, Mr.
Toomey was on the audit staff of Kenneth
Leventhal & Company. Mr. Toomey received a
B.S. in Business Administration/Finance from
Oregon State University and is a Certified
Public Accountant.
Joel F. Bonder................ Mr. Bonder has served as Executive Vice
President and General Counsel of AIMCO since
December 8, 1997. Mr. Bonder has been
Executive Vice President and General Counsel
of AIMCO-GP since July 1998. Prior to
joining AIMCO, Mr. Bonder served as Senior
Vice President and General Counsel of NHP
Incorporated from April 1994 until December
1997. Mr. Bonder served as Vice President
and Deputy General Counsel of NHP
Incorporated from June 1991 to March 1994
and as Associate General Counsel of NHP from
1986 to 1991. From 1983 to 1985, Mr. Bonder
was with the Washington, D.C. law firm of
Lane & Edson, P.C. From 1979 to 1983, Mr.
Bonder practiced with the Chicago law firm
of Ross and Hardies. Mr. Bonder received an
A.B. from the University of Rochester and a
J.D. from Washington University School of
Law.
</TABLE>
I-2
<PAGE> 35
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATIONS FOR THE LAST FIVE YEARS
---- ---------------------------------------------
<S> <C>
Patrick J. Foye............... Mr. Foye has served as Executive Vice
President of AIMCO and AIMCO-GP since May
1998. Prior to joining AIMCO, Mr. Foye was a
partner in the law firm of Skadden, Arps,
Slate, Meagher & Flom LLP from 1989 to 1998
and was Managing Partner of the firm's
Brussels, Budapest and Moscow offices from
1992 through 1994. Mr. Foye is also Deputy
Chairman of the Long Island Power Authority
and serves as a member of the New York State
Privatization Council. He received a B.A.
from Fordham College and a J.D. from Fordham
University Law School.
Robert Ty Howard.............. Mr. Howard has served as Executive Vice
President - Ancillary Services since
February 1998. Mr. Howard was appointed
Executive Vice President - Ancillary
Services of AIMCO-GP in July 1998. Prior to
joining AIMCO, Mr. Howard served as an
officer and/or director of four affiliated
companies, Hecco Ventures, Craig
Corporation, Reading Company and Decurion
Corporation. Mr. Howard was responsible for
financing, mergers and acquisitions
activities, investments in commercial real
estate, both nationally and internationally,
cinema development and interest rate risk
management. From 1983 to 1988, he was
employed by Spieker Properties. Mr. Howard
received a B.A. from Amherst College, a J.D.
from Harvard Law School and an M.B.A. from
Stanford University Graduate School of
Business.
Steven D. Ira................. Mr. Ira is a Co-Founder of AIMCO and has
served as Executive Vice President of AIMCO
since July 1994. Mr. Ira has been Executive
Vice President of AIMCO-GP since July 1998.
From 1987 until July 1994, he served as
President of PAM. Prior to merging his firm
with PAM in 1987, Mr. Ira acquired extensive
experience in property management. Between
1977 and 1981 he supervised the property
management of over 3,000 apartment and
mobile home units in Colorado, Michigan,
Pennsylvania and Florida, and in 1981 he
joined with others to form the property
management firm of McDermott, Stein and Ira.
Mr. Ira served for several years on the
National Apartment Manager Accreditation
Board and is a former president of both the
National Apartment Association and the
Colorado Apartment Association. Mr. Ira is
the sixth individual elected to the Hall of
Fame of the National Apartment Association
in its 54-year history. He holds a Certified
Apartment Property Supervisor (CAPS) and a
Certified Apartment Manager designation from
the National Apartment Association, a
Certified Property Manager (CPM) designation
from the National Institute of Real Estate
Management (IREM) and he is a member of the
Board of Directors of the National
Multi-Housing Council, the National
Apartment Association and the Apartment
Association of Metro Denver. Mr. Ira
received a B.S. from Metropolitan State
College in 1975.
</TABLE>
I-3
<PAGE> 36
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATIONS FOR THE LAST FIVE YEARS
---- ---------------------------------------------
<S> <C>
Harry G. Alcock............... Mr. Alcock has served as Vice President of
AIMCO and AIMCO- GP since July 1996, and was
promoted to Senior Vice President
Acquisitions in October 1997, with
responsibility for acquisition and financing
activities since July 1994. From June 1992
until July 1994, Mr. Alcock served as Senior
Financial Analyst for PDI and HFC. From 1988
to 1992, Mr. Alcock worked for Larwin
Development Corp., a Los Angeles based real
estate developer, with responsibility for
raising debt and joint venture equity to
fund land acquisitions and development. From
1987 to 1988, Mr. Alcock worked for Ford
Aerospace Corp. He received his B.S. from
San Jose State University.
Troy D. Butts................. Mr. Butts has served as Senior Vice
President and Chief Financial Officer of
AIMCO since November 1997. Mr. Butts has
been Senior Vice President and Chief
Financial Officer of AIMCO-GP since July
1998. Prior to joining AIMCO, Mr. Butts
served as a Senior Manager in the audit
practice of the Real Estate Services Group
for Arthur Andersen LLP in Dallas, Texas.
Mr. Butts was employed by Arthur Andersen
LLP for ten years and his clients were
primarily publicly-held real estate
companies, including office and multi-family
real estate investment trusts. Mr. Butts
holds a Bachelor of Business Administration
degree in Accounting from Angelo State
University and is a Certified Public
Accountant.
Richard S. Ellwood............ Mr. Ellwood was appointed a Director of
12 Auldwood Lane AIMCO in July 1994 and is currently Chairman
Rumson, NJ 07660 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.
</TABLE>
I-4
<PAGE> 37
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATIONS FOR THE LAST FIVE YEARS
---- ---------------------------------------------
<S> <C>
J. Landis Martin.............. Mr. Martin was appointed a Director of AIMCO in July 1994 and
199 Broadway became Chairman of the Compensation Committee in March 1998.
Suite 4300 Mr. Martin has served as President and Chief Executive Officer
Denver, CO 80202 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
Chair man of Timet, an integrated producer of titanium, since
1987 and Chief Executive Officer since January 1995. From 1990
until its acquisition by Dresser Industries, Inc. ("Dresser")
in 1994, Mr. Martin served as Chairman of the Board and Chief
Executive Officer of Baroid Corporation, an oilfield services
company. In addition to Tremont, NL and TIMET, Mr. Martin is a
director of Dresser, which is engaged in the petroleum
services, hydrocarbon and engineering industries.
Carla R. Stoner............... Ms. Stoner joined AIMCO in July 1997 as Vice President of
Finance and Administration and became Senior Vice President -
Real Estate Accounting in November 1998. Prior to joining
AIMCO, Ms. Stoner was with National Housing Partners since
1989. While at National Housing Partners, Ms. Stoner served as
a real estate controller from 1989 to 1992, as Vice President of
Accounting from 1992 to 1995 and as Interim Chief Information
Officer from 1995 to July 1997. Prior to joining National Housing
Partners, Ms. Stoner was a Senior Auditor with Deloitte & Touche
from 1984 to 1989. Ms. Stoner received a B.A. in accounting
from Virginia Tech.
Thomas L. Rhodes.............. Mr. Rhodes was appointed a Director of AIMCO in July 1994.
215 Lexingon Avenue Mr. Rhodes has served as the President and a Director of National
4th Floor Review magazine since November 30, 1992, where he has also
New York, NY 10016 served as a Director since 1998. From 1976 to 1992 , he held
various positions at Goldman, Sachs & Co. and was elected a
General Partner in 1986 and served as a General Partner from 1987
until November 27, 1992. He is currently Co-Chairman of the
Board , Co-Chief Executive Officer and a Director of Commercial
Assets Inc. and Asset Investors Corporation. He also serves as a
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
</TABLE>
I-5
<PAGE> 38
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATIONS FOR THE LAST FIVE YEARS
---- ---------------------------------------------
<S> <C>
John D. Smith................. Mr. Smith was appointed a Director of AIMCO in November
3400 Peachtree Road 1994. Mr. Smith is Principal and President of John D. Smith
Suite 831 Developments. Mr. Smith has been a shopping center developer,
Atlanta, GA 30326 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.
</TABLE>
I-6
<PAGE> 39
The letter of transmittal and any other required documents should be
sent or delivered by each unitholder or such unitholder's broker, dealer, bank,
trust company or other nominee to the Information Agent at one of its addresses
set forth below.
THE INFORMATION AGENT FOR THE OFFER IS:
RIVER OAKS PARTNERSHIP SERVICES, INC.
<TABLE>
<CAPTION>
By Mail: By Overnight Courier: By Hand:
<S> <C> <C>
P.O. Box 2065 111 Commerce Road 111 Commerce Road
S. Hackensack, N.J. 07606-2065 Carlstadt, N.J. 07072 Carlstadt, N.J. 07072
Attn.: Reorganization Dept. Attn.: Reorganization Dept.
</TABLE>
For information, please call:
TOLL FREE: (888) 349-2005
<PAGE> 1
LETTER OF TRANSMITTAL
TO TENDER UNITS OF LIMITED PARTNERSHIP IN
RIVERSIDE PARK ASSOCIATES LIMITED PARTNERSHIP
PURSUANT TO AN OFFER TO PURCHASE
DATED MAY 13, 1999
BY
AIMCO PROPERTIES, L.P.
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 5:00 P.M., NEW YORK TIME,
ON JUNE 29, 1999, UNLESS EXTENDED.
- --------------------------------------------------------------------------------
The Information Agent for the offer is:
RIVER OAKS PARTNERSHIP SERVICES, INC.
<TABLE>
<S> <C> <C>
By Mail: By Overnight Courier: By Hand:
P.O. Box 2065 111 Commerce Road 111 Commerce Road
S. Hackensack, N.J. 07606-2065 Carlstadt, N.J. 07072 Carlstadt, N.J. 07072
Attn.: Reorganization Dept. Attn.: Reorganization Dept.
By Telephone:
TOLL FREE (888) 349-2005
</TABLE>
DESCRIPTION OF UNITS TENDERED
<TABLE>
Name(s) and Address(es) of Registered Holder(s) (Please indicate Units in Riverside Park Associates Limited Partnership
changes or corrections to the name, address and tax
identification number printed below.)
<S> <C> <C> <C>
2. Number of 3. Total Num-
1. Total Number of Units Tendered ber of Units
Units Owned for Cash Tendered
(#) (#) (#)
</TABLE>
<PAGE> 2
To participate in the offer, you must send a duly completed and executed copy of
this Letter of Transmittal and any other documents required by this Letter of
Transmittal so that such documents are received by River Oaks Partnership
Services, Inc., the Information Agent, on or prior to June 29, 1999, unless
extended (the "Expiration Date"). THE METHOD OF DELIVERY OF THIS LETTER OF
TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT YOUR OPTION AND RISK, AND
DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE INFORMATION
AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY
DELIVERY. DELIVERY OF THIS LETTER OF TRANSMITTAL OR ANY OTHER REQUIRED DOCUMENTS
TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE VALID DELIVERY.
--------------------------
IF YOU HAVE THE CERTIFICATE ORIGINALLY ISSUED TO REPRESENT YOUR
INTEREST IN THE PARTNERSHIP PLEASE SEND IT TO THE INFORMATION
AGENT WITH THIS LETTER OF TRANSMITTAL.
---------------------------
FOR INFORMATION OR ASSISTANCE IN CONNECTION WITH THE OFFER OR THE
COMPLETION OF THIS LETTER OF TRANSMITTAL, PLEASE CONTACT THE INFORMATION AGENT
AT (888) 349-2005 (TOLL FREE).
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 2, 4 AND 9)
To be completed ONLY if the consideration for the pur- chase 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 pur- chase price of Units
accepted for payment is to be sent to some- one other than the undersigned or to
the undersigned at an address other than that shown above.
[ ] Mail consideration to:
Name
--------------------------------------------
(Please Type or Print)
Address
-----------------------------------------
- ------------------------------------------------
- ------------------------------------------------
(Include Zip Code)
- ------------------------------------------------
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
2
<PAGE> 3
Ladies and Gentlemen:
The undersigned hereby acknowledges that he or she has received and reviewed
(i) the Purchaser's Offer to Purchase, dated May 13, 1999 (the "Offer Date")
relating to the offer by AIMCO Properties, L.P. (the "Purchaser") to purchase
Limited Partnership Interests (the "Units") in Riverside Park Associates Limited
Partnership, a Delaware limited partnership (the "Partnership") and (ii) this
Letter of Transmittal and the Instructions hereto, as each may be supplemented
or amended from time to time (collectively, the "Offer").
Upon the terms and subject to the conditions set forth in the Offer to
Purchase, and this Letter of Transmittal, the undersigned hereby tenders to the
Purchaser the Units set forth in the box above entitled "Description of Units
Tendered," including all interests in any limited partnership represented by
such units (collectively, the "Units"), at the price of $12,786 per Unit, less
the amount of distributions, if any, made by the Partnership from the Offer Date
until the Expiration Date (the "Offer Price"), net to the undersigned in cash,
without interest.
Subject to and effective upon acceptance for payment of any of the Units
tendered hereby in accordance with the terms of the Offer, the undersigned
hereby irrevocably sells, assigns, transfers, conveys and delivers to, or upon
the order of, the Purchaser all right, title and interest in and to such Units
tendered hereby that are accepted for payment pursuant to the Offer, including,
without limitation, (i) all of the undersigned's interest in the capital of the
Partnership, and the undersigned's interest in all profits, losses and
distributions of any kind to which the undersigned shall at any time be entitled
in respect of the Units; (ii) all other payments, if any, due or to become due
to the undersigned in respect of the Units, under or arising out of the
agreement of limited partnership of the Partnership (the "Partnership
Agreement"), or any agreement pursuant to which the Units were sold (the
"Purchase Agreement"), whether as contractual obligations, damages, insurance
proceeds, condemnation awards or otherwise; (iii) all of the undersigned's
claims, rights, powers, privileges, authority, options, security interests,
liens and remedies, if any, under or arising out of the Partnership Agreement or
Purchase Agreement or the undersigned's ownership of the Units, including,
without limitation, all voting rights, rights of first offer, first refusal or
similar rights, and rights to be substituted as a limited partner of the
Partnership; and (iv) all present and future claims, if any, of the undersigned
against the Partnership, the other partners of the Partnership, or the general
partner and its affiliates, including the Purchaser, under or arising out of the
Partnership Agreement, the Purchase Agreement, the undersigned's status as a
limited partner, or the terms or conditions of the Offer, for monies loaned or
advanced, for services rendered, for the management of the Partnership or
otherwise.
The undersigned hereby irrevocably constitutes and appoints the Purchaser
and any designees of the Purchaser as the true and lawful agent and
attorney-in-fact of the undersigned with respect to such Units, with full power
of substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest), to vote or act in such manner as any such attorney
and proxy or substitute shall, in its sole discretion, deem proper with respect
to such Units, to do all such acts and things necessary or expedient to deliver
such Units and transfer ownership of such Units on the partnership books
maintained by the general partner of the Partnership, together with all
accompanying evidence of transfer and authenticity to, or upon the order of, the
Purchaser, to sign any and all documents necessary to authorize the transfer of
the Units to the Purchaser including, without limitation, the "Transferor's
(Seller's) Application for Transfer" created by the National Association of
Securities Dealers, Inc., if required, and upon receipt by the Information Agent
(as the undersigned's agent) of the Offer Price, to become a substitute limited
partner, to receive any and all distributions made by the Partnership from and
after the Expiration Date of the Offer (regardless of the record date for any
such distribution), and to receive all benefits and otherwise exercise all
rights of beneficial ownership of such Units, all in accordance with the terms
of the Offer. This appointment is effective upon the purchase of the Units by
the Purchaser as provided in the Offer. Upon the purchase of Units pursuant to
the Offer, all prior proxies and consents given by the undersigned with respect
to such Units will be revoked and no subsequent proxies or consents may be given
(and if given will not be deemed effective).
In addition to and without limiting the generality of the foregoing, the
undersigned hereby irrevocably (i) requests and authorizes (subject to and
effective upon acceptance for payment of any Unit tendered hereby) the
Partnership and its general partners to take any and all actions as may be
required to effect the transfer of the undersigned's Units to the Purchaser (or
its designee) and to admit the Purchaser as a substitute limited partner in the
Partnership under the
3
<PAGE> 4
terms of the Partnership Agreement; (ii) empowers the Purchaser and its agent to
execute and deliver to each general partner a change of address form instructing
the general partner to send any and all future distributions to the address
specified in the form, and to endorse any check payable to or upon the order of
such unitholder representing a distribution to which the Purchaser is entitled
pursuant to the terms of the offer, in each case, in the name and on behalf of
the tendering unitholder; (iii) agrees not to exercise any rights pertaining to
the Units without the prior consent of the Purchaser; and (iv) requests and
consents to the transfer of the Units, to be effective on the books and records
of the Partnership as of March 1, 1999.
NOTWITHSTANDING ANY PROVISION IN A PARTNERSHIP AGREEMENT OR ANY PURCHASE
AGREEMENT TO THE CONTRARY, THE UNDERSIGNED HEREBY DIRECTS EACH GENERAL PARTNER
OF THE PARTNERSHIP TO MAKE ALL DISTRIBUTIONS AFTER THE PURCHASER ACCEPTS THE
TENDERED UNITS FOR PAYMENT TO THE PURCHASER OR ITS DESIGNEE. Subject to and
effective upon acceptance for payment of any Unit tendered hereby, the
undersigned hereby requests that the Purchaser be admitted to the Partnership as
a substitute limited partner under the terms of the Partnership Agreement. Upon
request, the undersigned will execute and deliver additional documents deemed by
the Information Agent or the Purchaser to be necessary or desirable to complete
the assignment, transfer and purchase of Units tendered hereby and will hold any
distributions received from the Partnership after the Expiration Date in trust
for the benefit of the Purchaser and, if necessary, will promptly forward to the
Purchaser any such distributions immediately upon receipt. The Purchaser
reserves the right to transfer or assign, in whole or in part, from time to
time, to one or more of its affiliates, the right to purchase Units tendered
pursuant to the Offer, but any such transfer or assignment will not relieve the
Purchaser of its obligations under the Offer or prejudice the rights of
tendering unitholders to receive payment for Units validly tendered and accepted
for payment pursuant to the Offer.
By executing this Letter of Transmittal, the undersigned represents that
either (i) the undersigned is not a plan subject to Title I of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or Section 4975 of
the Internal Revenue Code of 1986, as amended (the "Code"), or an entity deemed
to hold "plan assets" within the meaning of 29 C.F.R. Section 2510.3-101 of any
such plan, or (ii) the tender and acceptance of Units pursuant to the Offer will
not result in a nonexempt prohibited transaction under Section 406 of ERISA or
Section 4975 of the Code.
The undersigned understands that a tender of Units to the Purchaser will
constitute a binding agreement between the undersigned and the Purchaser upon
the terms and subject to the conditions of the Offer. The undersigned recognizes
that under certain circumstances set forth in the Offer, the Purchaser may not
be required to accept for payment any of the Units tendered hereby. In such
event, the undersigned understands that any Letter of Transmittal for Units not
accepted for payment may be destroyed by the Purchaser (or its agent). EXCEPT AS
STATED IN THE OFFER, THIS TENDER IS IRREVOCABLE, PROVIDED THAT UNITS TENDERED
PURSUANT TO THE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION DATE,
OR UNLESS ALREADY ACCEPTED FOR PAYMENT, ANY TIME AFTER JULY 11, 1999.
THE UNDERSIGNED HAS BEEN ADVISED THAT THE PURCHASER IS AN AFFILIATE OF THE
GENERAL PARTNER OF THE PARTNERSHIP AND NO SUCH GENERAL PARTNER MAKES ANY
RECOMMENDATION AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING UNITS IN THE
OFFER. THE UNDERSIGNED HAS MADE HIS OR HER OWN DECISION TO TENDER UNITS.
The undersigned hereby represents and warrants for the benefit of the
Partnership and the Purchaser that the undersigned owns the Units tendered
hereby and has full power and authority and has taken all necessary action to
validly tender, sell, assign, transfer, convey and deliver the Units tendered
hereby and that when the same are accepted for payment by the Purchaser, the
Purchaser will acquire good, marketable and unencumbered title thereto, free and
clear of all liens, restrictions, charges, encumbrances, conditional sales
agreements or other obligations relating to the sale or transfer thereof, and
such Units will not be subject to any adverse claims and that the transfer and
assignment contemplated herein are in compliance with all applicable laws and
regulations.
Our records indicate that the undersigned owns the number of Units set forth
in the box above entitled "Description of Units Tendered" under the column
entitled "Total Number of Units Owned." If you would like to tender only a
portion of your Units, please so indicate in the space provided in the box above
entitled "Description of Units Tendered."
4
<PAGE> 5
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned, and any obligations of the undersigned
shall be binding upon the heirs, personal representatives, trustees in
bankruptcy, legal representatives, and successors and assigns of the
undersigned.
The undersigned further represents and warrants that, to the extent a
certificate evidencing the Units tendered hereby (the "original certificate") is
not delivered by the undersigned together with this Letter of Transmittal, (i)
the undersigned represents and warrants to the Purchaser that the undersigned
has not sold, transferred, conveyed, assigned, pledged, deposited or otherwise
disposed of any portion of the Units, (ii) the undersigned has caused a diligent
search of its records to be taken and has been unable to locate the original
certificate, (iii) if the undersigned shall find or recover the original
certificate evidencing the Units, the undersigned will immediately and without
consideration surrender it to the Purchaser; and (iv) the undersigned shall at
all times indemnify, defend, and save harmless the Purchaser and the
Partnership, its successors, and its assigns from and against any and all
claims, actions, and suits whether groundless or otherwise, and from and against
any and all liabilities, losses, damages, judgments, costs, charges, counsel
fees, and other expenses of every nature and character by reason of honoring or
refusing to honor the original certificate when presented by or on behalf of a
holder in due course of a holder appearing to or believed by the partnership to
be such, or by issuance or delivery of a replacement certificate, or the making
of any payment, delivery, or credit in respect of the original certificate
without surrender thereof, or in respect of the replacement certificate.
5
<PAGE> 6
SIGNATURE BOX
(SEE INSTRUCTION 2)
Please sign exactly as your name is printed on the front of this Letter of
Transmittal. For joint owners, each joint owner must sign. (See Instruction 2).
TRUSTEES, EXECUTORS, ADMINISTRATORS, GUARDIANS, ATTORNEYS-IN-FACT, OFFICERS
OF A CORPORATION OR OTHER PERSONS ACTING IN A FIDUCIARY OR REPRESENTATIVE
CAPACITY, PLEASE COMPLETE THIS BOX AND SEE INSTRUCTION 2.
The signatory hereto hereby tenders the Units indicated in this Letter of
Transmittal to the Purchaser pursuant to the terms of the Offer, and certifies
under penalties of perjury that the statements in Box A, Box B and, if
applicable, Box C and Box D are true.
X
----------------------------------------------------------------------
(Signature of Owner)
X
----------------------------------------------------------------------
(Signature of Joint Owner)
Name and Capacity (if other than individuals):
-------------------------
Title:
-----------------------------------------------------------------
Address:
---------------------------------------------------------------
-----------------------------------------------------------------------
(City) (State) (Zip)
Area Code and Telephone No. (Day):
-------------------------------------
(Evening):
----------------------------------
SIGNATURE GUARANTEE (IF REQUIRED)
(SEE INSTRUCTION 2)
Name and Address of Eligible Institution:
------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Authorized Signature: X
------------------------------------------------
Name:
------------------------------------------------------------------
Title: Date:
------------------------------- -------------------------
6
<PAGE> 7
TAX CERTIFICATIONS
(See Instruction 4)
By signing the Letter of Transmittal in the Signature Box, the
unitholder certifies as true under penalty of perjury, the representations in
Boxes A, B and C below. Please refer to the attached Instructions for completing
this Letter of Transmittal and Boxes A, B and C below.
================================================================================
BOX A
SUBSTITUTE FORM W-9
(SEE INSTRUCTION 4 - BOX A)
- --------------------------------------------------------------------------------
The unitholder hereby certifies the following to the Purchaser under
penalties of perjury:
(i) The Taxpayer Identification No. ("TIN") printed (or corrected) on
the front of this Letter of Transmittal is the correct TIN of the unitholder,
unless the Units are held in an Individual Retirement Account ("IRA"); or if
this box o 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 o 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 o 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 o, the person signing this Letter of Transmittal hereby
certifies under penalties of perjury that the unitholder is an "exempt foreign
person" for purposes of the Backup Withholding rules under the U.S. Federal
income tax laws, because the unitholder has the following characteristics:
(i) Is a nonresident alien individual or a foreign corporation,
partnership, estate or trust;
(ii) If an individual, has not been and plans not to be present in the
U.S. for a total of 183 days or more during the calendar year;
and
(iii) Neither engages, nor plans to engage, in a U.S. trade or business
that has effectively connected gains from transactions with a
broker or barter exchange.
================================================================================
7
<PAGE> 8
INSTRUCTIONS
FOR COMPLETING LETTER OF TRANSMITTAL
1. REQUIREMENTS OF TENDER. To be effective, a duly completed and signed
Letter of Transmittal (or facsimile thereof) and any other required
documents must be received by the Information Agent at one of its
addresses (or its facsimile number) set forth herein before 5:00 p.m.,
New York Time, on the Expiration Date, unless extended. To ensure
receipt of the Letter of Transmittal and any other required documents,
it is suggested that you use overnight courier delivery or, if the
Letter of Transmittal and any other required documents are to be
delivered by United States mail, that you use certified or registered
mail, return receipt requested.
WHEN TENDERING, YOU MUST SEND ALL PAGES OF THE LETTER OF TRANSMITTAL,
INCLUDING TAX CERTIFICATIONS (BOXES A, B, AND C).
THE METHOD OF DELIVERY OF THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED
DOCUMENTS IS AT THE OPTION AND RISK OF THE TENDERING UNITHOLDER AND
DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE INFORMATION
AGENT. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY
DELIVERY.
2. SIGNATURE REQUIREMENTS.
INDIVIDUAL AND JOINT OWNERS -- After carefully reading and completing the
Letter of Transmittal, to tender Units, unitholders must sign at the "X"
in the Signature Box of the Letter of Transmittal. The signature(s) must
correspond exactly with the names printed (or corrected) on the front of
the Letter of Transmittal. If the Letter of Transmittal is signed by the
unitholder (or beneficial owner in the case of an IRA), no signature
guarantee on the Letter of Transmittal is required. If any tendered Units
are registered in the names of two or more joint owners, all such owners
must sign this Letter of Transmittal.
IRAS/ELIGIBLE INSTITUTIONS -- For Units held in an IRA account, the
beneficial owner should sign in the Signature Box and no signature
guarantee is required. Similarly, if Units are tendered for the account of
a member firm of a registered national security exchange, a member firm of
the National Association of Securities Dealers, Inc. or a commercial bank,
savings bank, credit union, savings and loan association or trust company
having an office, branch or agency in the United States (each an "Eligible
Institution"), no signature guarantee is required.
TRUSTEES, CORPORATIONS, PARTNERSHIP AND FIDUCIARIES -- Trustees, executors,
administrators, guardians, attorneys-in-fact, officers of a corporation,
authorized partners of a partnership or other persons acting in a fiduciary
or representative capacity must sign at the "X" in the Signature Box and
have their signatures guaranteed by an Eligible Institution by completing
the signature guarantee set forth in the Signature Box of the Letter of
Transmittal. If the Letter of Transmittal is signed by trustees,
administrators, guardians, attorneys-in-fact, officers of a corporation,
authorized partners of a partnership or others acting in a fiduciary or
representative capacity, such persons should, in addition to having their
signatures guaranteed, indicate their title in the Signature Box and must
submit proper evidence satisfactory to the Purchaser of their authority to
so act (see Instruction 3 below).
3. DOCUMENTATION REQUIREMENTS. In addition to the information required to
be completed on the Letter of Transmittal, additional documentation may
be required by the Purchaser under certain circumstances including, but
not limited to, those listed below. Questions on documentation should
be directed to the Information Agent at its telephone number set forth
herein.
DECEASED OWNER (JOINT TENANT) -- Copy of death certificate.
DECEASED OWNER (OTHERS) -- Copy of death certificate (see also
Executor/Administrator/Guardian below).
EXECUTOR/ADMINISTRATOR/GUARDIAN -- Copy of court appointment documents
for executor or administrator; and
8
<PAGE> 9
(a) a copy of applicable provisions of
the will (title page, executor(s)'
powers, asset distribution); or (b)
estate distribution documents.
ATTORNEY-IN-FACT -- Current power of attorney.
CORPORATION/PARTNERSHIP -- Corporate resolution(s) or other
evidence of authority to act.
Partnership should furnish a copy of
the partnership agreement.
TRUST/PENSION PLANS -- Unless the trustee(s) are named in the
registration, a copy of the cover page
of the trust or pension plan, along
with a copy of the section(s) setting
forth names and powers of trustee(s)
and any amendments to such sections or
appointment of successor trustee(s).
4. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If consideration is to be
issued in the name of a person other than the person signing the
Signature Box of the Letter of Transmittal or if consideration is to be
sent to someone other than such signer or to an address other than that
set forth on the Letter of Transmittal in the box entitled "Description
of Units Tendered," the appropriate boxes on the Letter of Transmittal
should be completed.
5. TAX CERTIFICATIONS. The unitholder(s) tendering Units to the Purchaser
pursuant to the Offer must furnish the Purchaser with the
unitholder(s)' taxpayer identification number ("TIN") and certify as
true, under penalties of perjury, the representations in Box A, Box B
and, if applicable, Box C. By signing the Signature Box, the
unitholder(s) certifies that the TIN as printed (or corrected) on this
Letter of Transmittal in the box entitled "Description of Units
Tendered" and the representations made in Box A, Box B and, if
applicable, Box C, are correct. See attached Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9
for guidance in determining the proper TIN to give the Purchaser.
U.S. PERSONS. A unitholder that is a U.S. citizen or a resident alien
individual, a domestic corporation, a domestic partnership, a domestic trust
or a domestic estate (collectively, "U.S. Persons"), as those terms are
defined in the Code, should follow the instructions below with respect to
certifying Box A and Box B.
BOX A - SUBSTITUTE FORM W-9.
Part (i), Taxpayer Identification Number -- Tendering unitholders must certify
to the Purchaser that the TIN as printed (or corrected) on this Letter of
Transmittal in the box entitled "Description of Units Tendered" is correct. If
a correct TIN is not provided, penalties may be imposed by the Internal
Revenue Service (the "IRS"), in addition to the unitholder being subject to
backup withholding.
Part (ii), Backup Withholding -- In order to avoid 31% Federal income tax
backup withholding, the tendering unitholder must certify, under penalty of
perjury, that such unitholder is not subject to backup withholding. Certain
unitholders (including, among others, all corporations and certain exempt
non-profit organizations) are not subject to backup withholding. Backup
withholding is not an additional tax. If withholding results in an overpayment
of taxes, a refund may be obtained from the IRS. DO NOT CHECK THE BOX IN BOX
A, PART (II), UNLESS YOU HAVE BEEN NOTIFIED BY THE IRS THAT YOU ARE SUBJECT TO
BACKUP WITHHOLDING.
When determining the TIN to be furnished, please refer to the following as a
guide:
Individual accounts - should reflect owner's TIN.
Joint accounts - should reflect the TIN of the owner whose name appears first.
Trust accounts - should reflect the TIN assigned to the trust.
IRA custodial accounts - should reflect the TIN of the custodian (not
necessary to provide).
Custodial accounts for the benefit of minors-should reflect the TIN of the
minor.
Corporations, partnership or other business entities - should reflect the TIN
assigned to that entity.
9
<PAGE> 10
By signing the Signature Box, the unitholder(s) certifies that the TIN as
printed (or corrected) on the front of the Letter of Transmittal is
correct.
BOX B - FIRPTA AFFIDAVIT -- Section 1445 of the Code requires that each
unitholder transferring interests in a partnership with real estate assets
meeting certain criteria certify under penalty of perjury the
representations made in Box B, or be subject to withholding of tax equal to
10% of the purchase price for interests purchased. Tax withheld under
Section 1445 of the Code is not an additional tax. If withholding results
in an overpayment of tax, a refund may be obtained from the IRS. PART (I)
SHOULD BE CHECKED ONLY IF THE TENDERING UNITHOLDER IS NOT A U.S. PERSON, AS
DESCRIBED THEREIN.
BOX C - FOREIGN PERSONS -- In order for a tendering unitholder who is a
Foreign Person (i.e., not a U.S. Person, as defined above) to qualify as
exempt from 31% backup withholding, such foreign Unitholder must certify,
under penalties of perjury, the statement in Box C of this Letter of
Transmittal, attesting to that Foreign Person's status by checking the box
preceding such statement. UNLESS THE BOX IS CHECKED, SUCH UNITHOLDER WILL
BE SUBJECT TO 31% WITHHOLDING OF TAX.
6. VALIDITY OF LETTER OF TRANSMITTAL. All questions as to the validity,
form, eligibility (including time of receipt) and acceptance of a
Letter of Transmittal and other required documents will be determined
by the Purchaser and such determination will be final and binding. The
Purchaser's interpretation of the terms and conditions of the Offer
(including these Instructions for this Letter of Transmittal) will be
final and binding. The Purchaser will have the right to waive any
irregularities or conditions as to the manner of tendering. Any
irregularities in connection with tenders, unless waived, must be cured
within such time as the Purchaser shall determine. This Letter of
Transmittal will not be valid until any irregularities have been cured
or waived. Neither the Purchaser nor the Information Agent are under
any duty to give notification of defects in a Letter of Transmittal and
will incur no liability for failure to give such notification.
7. ASSIGNEE STATUS. Assignees must provide documentation to the
Information Agent which demonstrates, to the satisfaction of the
Purchaser, such person's status as an assignee.
8. TRANSFER TAXES. The amount of any transfer taxes (whether imposed on
the registered holder or such person) payable on account of the
transfer to such person will be deducted from the purchase price unless
satisfactory evidence of the payment of such taxes or exemption
therefrom is submitted.
9. MINIMUM TENDERS. A unitholder may tender any or all of his, her or its
Units.
10. CONDITIONAL TENDERS. No alternative, conditional or contingent tenders
will be accepted.
10
<PAGE> 11
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER - - Social Security numbers have nine digits separated by two hyphens:
i.e., 000-00-0000. Employer identification numbers have nine digits separated by
only one hyphen: i.e., 00-0000000. The table below will help determine the
number to give the payer.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
GIVE THE
TAXPAYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF - -
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. An individual account The individual
2. Two or more individuals (joint account) The actual owner of the account or, if combined
funds, the first individual on the account
3. Husband and wife (joint account) The actual owner of the account or, if joint funds,
either person
4. Custodian account of a minor (Uniform The minor(2)
Gift to Minors Act)
5. Adult and minor (joint account) The adult or, if the minor is the only contributor,
the minor(1)
6. Account in the name of guardian or com- The ward, minor or incompetent person(3)
mittee for a designated ward, minor or
incompetent person (3)
7. a. The usual revocable savings trust account The grantor trustee(1)
(grantor is also trustee)
b. So-called trust account that is not a legal The actual owner(1)
or valid trust under state law
8. Sole proprietorship account The owner(4)
9. A valid trust, estate or pension trust The legal entity (Do not furnish the identifying
number of the personal representative or trustee
unless the legal entity itself is not designated in the
account title.)(5)
10. Corporate account The corporation
11. Religious, charitable, or educational organi- The organization
zation account
12. Partnership account held in the name of the The partnership
business
13. Association, club, or other tax-exempt orga- The organization
nization
14. A broker or registered nominee The broker or nominee
</TABLE>
11
<PAGE> 12
<TABLE>
<S> <C> <C>
15. Account with the Department of Agriculture The public entity
in the name of a public entity (such as a
State or local government, school district,
or prison) that receives agricultural
program payments
</TABLE>
- --------------------------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security
number.
(3) Circle the ward's or incompetent person's name and furnish such
person's social security number or employer identification number.
(4) Show your individual name. You may also enter your business name. You
may use your social security number or employer identification number.
(5) List first and circle the name of the legal trust, estate, or pension
trust.
NOTE: If no name is circled when there is more than one name, the number
will be considered to be that of the first name listed.
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
OBTAINING A NUMBER
If you do not have a taxpayer identification number or you do not know your
number, obtain Form SS-5, Application for a Social Security Number Card (for
individuals), or Form SS-4, Application for Employer Identification Number (for
businesses and all other entities), at the local office of the Social Security
Administration or the Internal Revenue Service and apply for a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include
the following:
- A corporation.
- A financial institution.
- An organization exempt from tax under section 501(a) of the Internal
Revenue Code of 1986, as amended (the "Code"), or an individual
retirement plan.
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States,
or any subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government,
or any agency or instrumentality thereof.
- An international organization or any agency or instrumentality
thereof.
- A registered dealer in securities or commodities registered in the
U.S. or a possession of the U.S.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a) of the
Code.
- An exempt charitable remainder trust, or a non-exempt trust described
in section 4947 (a)(1). - An entity registered at all times under the
Investment Company Act of 1940.
- A foreign central bank of issue.
- A futures commission merchant registered with the Commodity Futures
Trading Commission.
Payments of dividends and patronage dividends not generally subject to
backup withholding include the following:
- Payments to nonresident aliens subject to withholding under section
1441 of the Code.
- Payments to Partnerships not engaged in a trade or business in the
U.S. and which have at least one nonresident partner.
- Payments of patronage dividends where the amount received is not paid
in money.
12
<PAGE> 13
- Payments made by certain foreign organizations.
- Payments made to an appropriate nominee.
- Section 404(k) payments made by an ESOP.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals. NOTE: You
may be subject to backup withholding if this interest is $600 or more
and is paid in the course of the payer's trade or business and you
have not provided your correct taxpayer identification number to the
payer. Payments of tax exempt interest (including exempt interest
dividends under section 852 of the Code).
- Payments described in section 6049(b)(5) of the Code to nonresident
aliens.
- Payments on tax-free covenant bonds under section 1451 of the Code.
- Payments made by certain foreign organizations.
- Payments of mortgage interest to you.
- Payments made to an appropriate nominee.
Exempt payees described above should file a substitute Form W-9 to avoid
possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER. FURNISH
YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND
RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE
DIVIDENDS, ALSO SIGN AND DATE THE FORM. IF YOU ARE A NONRESIDENT ALIEN OR A
FOREIGN ENTITY NOT SUBJECT TO BACKUP WITHHOLDING, FILE WITH PAYER A COMPLETED
INTERNAL REVENUE FORM W-8 (CERTIFICATE OF FOREIGN STATUS).
Certain payments other than interest, dividends, and patronage dividends,
that are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(A),
6045, and 6050A of the Code.
PRIVACY ACT NOTICE -- Section 6109 of the Code requires most recipients of
dividend, interest, or other payments to give correct taxpayer identification
numbers to payers who must report the payments to the IRS. The IRS uses the
numbers for identification purposes. Payers must be given the numbers whether or
not recipients are required to file a tax return. Payers must generally withhold
31% of taxable interest, dividend, and certain other payments to a payee who
does not furnish a correct taxpayer identification number to a payer. Certain
penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER - - If
you fail to furnish your correct taxpayer identification number to a payer, you
are subject to a penalty of $50 for each such failure unless your failure is due
to reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING - - If
you make a false statement with no reasonable basis that results in no
imposition of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION - - Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL
REVENUE SERVICE.
13
<PAGE> 14
The Information Agent for the offer is:
RIVER OAKS PARTNERSHIP SERVICES, INC.
<TABLE>
<S> <C> <C>
By Mail: By Overnight Courier: By Hand:
P.O. Box 2065 111 Commerce Road 111 Commerce Road
S. Hackensack, N.J. 07606-2065 Carlstadt, N.J. 07072 Carlstadt, N.J. 07072
Attn.: Reorganization Dept. Attn.: Reorganization Dept.
By Telephone:
TOLL FREE (888) 349-2005
</TABLE>
14
<PAGE> 1
AIMCO PROPERTIES, L.P.
1873 SOUTH BELLAIRE STREET, 17TH FLOOR
DENVER, COLORADO 80222
May 13, 1999
Dear Unitholder:
We are offering to acquire up to 168.14 units in your partnership,
Riverside Park Associates Limited Partnership. 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 $12,786
cash, in which case you may recognize a gain or loss for federal income
tax purposes.
2. You may retain any or all of your units. If you choose to
retain any or all of your units, your rights as a holder of units will
remain unchanged. You will continue to participate in gains and losses
of your partnership(s), and you will receive distributions, if any,
payable in respect of your units.
If more units are tendered than we are offering to acquire, we will
prorate the purchase so that the same approximate percentage of units tendered
by each partner will be purchased. We are offering to acquire any and all
outstanding units in your partnership. Our offer is not subject to any minimum
number of units being tendered. YOU WILL NOT BE REQUIRED TO PAY ANY COMMISSIONS
OR FEES IN CONNECTION WITH ANY DISPOSITION OF YOUR UNITS PURSUANT TO OUR OFFER.
Our offer price will be reduced for any distributions subsequently made by your
partnership prior to the expiration of our offer.
There are advantages and disadvantages to you of accepting or declining
our offer. The terms of the offer are more fully described in the enclosed
materials. These documents describe the material risks and opportunities
associated with the offer, including certain tax considerations. Please review
these documents carefully. The general partner of your partnership, which is
owned by us, has substantial conflicts of interest with respect to the offer.
Accordingly, the general partner of your partnership makes no recommendation to
you as to whether you should tender or refrain from tendering your units in the
offer.
If you desire to tender any of your units in response to our offer, you
should complete and sign the enclosed letter of transmittal in accordance with
the enclosed instructions and mail or deliver the signed letter of transmittal
and any other required documents to River Oaks Partnership Services, Inc., which
is acting as the Information Agent in connection with our offer, at the address
set forth on the back cover of the enclosed Offer to Purchase. The offer will
expire at 5:00 p.m. New York City time on June 29, 1999, unless extended. If you
have questions or require further information, please call the Information
Agent, toll free, at (888) 349-2005.
Very truly yours,
AIMCO PROPERTIES, L.P.
<PAGE> 1
Exhibit (z)(1)
AGREEMENT OF JOINT FILING
Insignia 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. 2 to Schedule 13D to which this agreement is attached as an
exhibit, and all further amendments thereto, and all filings under Schedule
14D-1 to which this agreement is attached as an exhibit, and all amendments
thereto, shall be filed on behalf of each of them. This agreement is intended
to satisfy the requirements of Rule 13d- 1(f)(1)(iii) under the Securities
Exchange Act of 1934, as amended.
Dated: May 13, 1999 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 8 of 8 Pages
