<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE TO
TENDER OFFER STATEMENT UNDER SECTION 14(D)(1) OR 13(E)(1) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
AND
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 5)
Riverside Park Associates Limited Partnership
- --------------------------------------------------------------------------------
(Name of Subject Company (Issuer))
AIMCO Properties, L.P. -- Offeror
- --------------------------------------------------------------------------------
(Names of Filing Persons (Identifying Status as Offeror,
Issuer or Other Person))
Limited Partnership Units
- --------------------------------------------------------------------------------
(Title of Class Securities)
None
- --------------------------------------------------------------------------------
(CUSIP Number of Class Securities)
Patrick J. Foye
Apartment Investment And Management Company
Colorado Center, Tower Two
2000 South Colorado Boulevard, Suite 2-1000
Denver, Colorado 80222
(303) 757-8101
- --------------------------------------------------------------------------------
(Name, address, and telephone numbers of person authorized
to receive notices and communications on behalf of filing persons)
Copy To:
Jonathan L. Friedman
Skadden, Arps, Slate, Meagher & Flom LLP
300 South Grand Avenue, 34th Floor
Los Angeles, California 90071
(213) 687-5000
<PAGE> 2
Calculation of Filing Fee
<TABLE>
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Transaction valuation* Amount of filing fee
- ---------------------- --------------------
$ 9,997,432.90 $ 1,999.49
</TABLE>
* For purposes of calculating the fee only. This amount assumes the
purchase of 280.15 units of limited partnership interest of the subject
partnership for $35,686 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 the 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 Party:
--------------------- ------------------
Form or Registration No.: Date Filed:
------------------- ---------------
-----------------------------------
[ ] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which the
statement relates:
[X] third-party tender offer subject to Rule 14d-1
[ ] issuer tender offer subject to Rule 13e-4
[ ] going-private transaction subject to Rule 13e-3
[X] amendment to Schedule 13D under Rule 13d-2
Check the following box if the filing is a final amendment reporting the results
of the tender offer: [ ]
2
<PAGE> 3
CUSIP No. NONE
1. NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only)
AIMCO PROPERTIES, L.P.
84-1275721
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF GROUP
(a) [ ]
(b) [X]
3. SEC USE ONLY
4. SOURCE OF FUNDS
WC, BK
5. (CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
7. SOLE VOTING POWER
--
8. SHARED VOTING POWER
83.42
9. SOLE DISPOSITIVE POWER
--
10. SHARED DISPOSITIVE POWER
83.42
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
83.42
12. CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
[ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
Approximately 14.7%
14. TYPE OF REPORTING PERSON
PN
3
<PAGE> 4
CUSIP No. NONE
1. NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only)
AIMCO-GP, INC.
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF GROUP
(a) [ ]
(b) [X]
3. SEC USE ONLY
4. SOURCE OF FUNDS
Not Applicable
5. (CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
7. SOLE VOTING POWER
--
8. SHARED VOTING POWER
83.42
9. SOLE DISPOSITIVE POWER
--
10. SHARED DISPOSITIVE POWER
83.42
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
83.42
12. CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
[ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
Approximately 14.7%
14. TYPE OF REPORTING PERSON
CO
4
<PAGE> 5
CUSIP No. NONE
1. NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only)
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
84-129577
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF GROUP
(a) [ ]
(b) [X]
3. SEC USE ONLY
4. SOURCE OF FUNDS
Not Applicable
5. (CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Maryland
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
7. SOLE VOTING POWER
200.6638
8. SHARED VOTING POWER
83.4200
9. SOLE DISPOSITIVE POWER
200.6638
10. SHARED DISPOSITIVE POWER
83.4200
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
284.0883
12. CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
[ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
Approximately 50.00%
14. TYPE OF REPORTING PERSON
CO
5
<PAGE> 6
TENDER OFFER STATEMENT/ AMENDMENT NO. 5 TO SCHEDULE 13D
This Statement (the "Statement") constitutes (a) the Tender
Offer Statement on Schedule TO of AIMCO Properties, L.P. (the "AIMCO OP"),
relating to an offer to purchase units of limited partnership interest ("Units")
of Riverside Park Associates Limited Partnership (the "Partnership"); and (b)
Amendment No. 5 to the Schedule 13D (the "Schedule 13D") originally filed with
the Securities and Exchange Commission (the "Commission") on May 14, 1999, by
Apartment Investment and Management Company ("AIMCO"), AIMCO-GP, Inc.
("AIMCO-GP") and AIMCO OP as amended by (i) Amendment No. 1, filed with the
Commission on June 29, 1999, by AIMCO, AIMCO-GP and AIMCO OP, (ii) Amendment No.
2, filed with the Commission on July 9, 1999, by AIMCO, AIMCO-GP and AIMCO OP,
(iii) Amendment No. 3, filed with the Commission on July 16, 1999, by AIMCO,
AIMCO-GP, and AIMCO OP and (iv) Amendment No. 4, filed with the Commission on
August 6, 1999, by AIMCO, AIMCO-GP and AIMCO OP.
-----------------------------------
The information in the "Offer to Purchase" of AIMCO
Properties, L.P., dated May 15, 2000 (the "Offer"), Exhibit (a)(1) hereto, is
incorporated herein by reference in answer to all of the Items of this Schedule
TO except as otherwise set forth below:
Item 3. Identity and Background of Filing Person.
(a) This Statement is being filed by AIMCO Properties, L.P., a
Delaware limited partnership, and, insofar as this Statement constitutes
Amendment No. 5 to the Schedule 13D, by AIMCO Properties, L.P., a Delaware
limited partnership, AIMCO-GP, Inc., a Delaware corporation, Apartment
Investments and Management Company, a Maryland corporation (the "Reporting
Person"). The principal business of the Reporting Person is the ownership,
acquisition, development, expansion and management of multi-family apartment
properties. The principal executive offices and telephone number of the
Reporting Person are located at Colorado Center, Tower Two, 2000 South Colorado
Boulevard, Suite 2-1000, Denver, Colorado 80222; (303) 757-8101.
During the last five years, none of the Reporting Person nor,
to the best of its knowledge, any of the persons listed in Annex I to the Offer
(i) has been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or (ii) was a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining further
violations of or prohibiting activities subject to federal or state securities
laws or finding any violation with respect to such laws.
Item 5. Past Contacts, Transactions, Negotiations and Agreements.
Except as described in the Offer, none of the events set forth
in Item 1005(b) of Regulation S-K has occurred.
Item 6. Purposes of the Transaction and Plans or Proposals.
Except as set forth in the Offer, none of the events set forth
in Item 1006 (c) of Regulations S-K is planned, proposed or being negotiated.
6
<PAGE> 7
Item 7. Source and Amount of Funds or Other Consideration.
Except as set forth in the Offer, there are no alternative
plans to finance the tender offer and no plans to repay any borrowed funds used
in the tender offer.
Item 8. Interest in Securities of the Subject Company.
(AIMCO) directly owns 200.6638 Units and AIMCO OP directly owns 83.42
Units, representing 35.3 and 14.7% (aggregating 50%), of the outstanding Units
based on the 568.29 Units outstanding at December 31, 1999.
AIMCO-GP and AIMCO may be deemed to beneficially own the Units directly
owned by AIMCO OP by each of their relationship with AIMCO OP. AIMCO-GP is the
general partner of AIMCO OP (owning approximately 1% of the total equity
interests). AIMCO-GP is a wholly owned subsidiary of AIMCO.
Accordingly, for purposes of this Statement: (i) AIMCO OP is reporting
that it shares the power to vote or direct the power to vote and the power to
dispose or direct the disposition of the 83.42 Units directly by it; (ii)
AIMCO-GP is reporting that it shares the power to vote or direct the disposition
of the 84.32 Units owned by AIMCO OP; and (iii) AIMCO is reporting that it
shares the power to vote or direct the vote and the power to dispose or direct
the disposition of the 83.42 Units directly owned by AIMCO-GP, and it has the
sole power to vote or direct the power to vote and the sole power to dispose or
direct the disposition of the 200.6638 Units directly owned by it.
Item 10. Financial Statements.
The financial statements included in AIMCO OP's Annual Report on Form
10-K for the year ended December 31, 1999, which are listed on the Index to
Financial Statements on page F-1 of such Report, are incorporated herein by
reference. Such report may be inspected at the public reference facilities
maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549; Citicorp Center, 500 West Madison Street, Chicago,
Illinois 60661; and 7 World Trade Center, 13th Floor, New York, New York 10048.
Copies of such material can also be obtained from the Public Reference Room of
the Commission in Washington, D.C. at prescribed rates and from the Commission's
web site at www.sec.gov.
Item 12. Exhibits.
(a)(1) Offer to Purchase, dated May 15, 2000
(a)(2)(i) Letter of Transmittal and related Instructions (Annex II to
Exhibit (a)(1).)
(a)(2)(ii)Acknowledgment and Agreement
(a)(3) Letter, dated May 15, 2000, from AIMCO OP to the limited
partners of the Partnership
(b)(1) Credit Agreement (Secured Revolving Credit Facility), dated
as of August 16, 1999, among AIMCO Properties, L.P., Bank of
America, Bank Boston, N.A., and First Union National Bank.
(Exhibit 10.1 to AIMCO's Current Report on Form 8-K, dated
August 16, 1999, is incorporated herein by this reference.)
(b)(2) Amended and Restated Credit Agreement, dated as of March 15,
2000, among AIMCO Properties, L.P., Bank of America, Bank
Boston, N.A., and First Union National Bank. (Exhibit 10.20
to AIMCO Properties, L.P.'s Annual Report on Form 10-K for
the year ended December 31, 1999, is incorporated herein by
this reference.)
(b)(3) First Amendment to $345,000,000 Amended and Restated Credit
Agreement, dated as of April 14, 2000, among AIMCO
Properties, L.P., Bank of America, as
7
<PAGE> 8
Administrative Agent, and U.S. Bank National Association, as
Lender. (Exhibit 10.4 to AIMCO's Current Report on Form 10-Q
for quarter ended March 31, 2000, is incorporated herein by
this reference.)
(d) Not applicable.
(g) Not applicable.
(h) Not applicable.
(z)(1) Agreement of Joint Filing, dated May 15, 2000, among AIMCO,
AIMCO-GP and AIMCO OP.
Item 13. Information Required by Schedule 13E-3.
Not applicable.
8
<PAGE> 9
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.
Date May 15, 2000 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
9
<PAGE> 10
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<S> <C>
(a)(1) Offer to Purchase, dated May 15, 2000
(a)(2)(i) Letter of Transmittal and related Instructions (Annex II to
Exhibit (a)(1).)
(a)(2)(ii) Acknowledgment and Agreement
(a)(3) Letter, dated May 15, 2000, from AIMCO OP to the limited
partners of the Partnership
(b)(1) Credit Agreement (Secured Revolving Credit Facility), dated as
of August 16, 1999, among AIMCO Properties, L.P., Bank of
America, Bank Boston, N.A., and First Union National Bank.
(Exhibit 10.1 to AIMCO's Current Report on Form 8-K, dated
August 16, 1999, is incorporated herein by this reference.)
(b)(2) Amended and Restated Credit Agreement, dated as of March 15,
2000, among AIMCO Properties, L.P., Bank of America, Bank
Boston, N.A., and First Union National Bank. (Exhibit 10.20 to
AIMCO Properties, L.P.'s Annual Report on Form 10-K for the
year ended December 31, 1999, is incorporated herein by this
reference.)
(b)(3) First Amendment to $345,000,000 Amended and Restated Credit
Agreement, dated as of April 14, 2000, among AIMCO Properties,
L.P., Bank of America, as Administrative Agent, and U.S. Bank
National Association, as Lender. (Exhibit 10.4 to AIMCO's
Current Report on Form 10-Q for quarter ended March 31, 2000,
is incorporated herein by this reference.)
(d) Not applicable.
(g) Not applicable.
(h) Not applicable.
(z)(1) Agreement of Joint Filing, dated May 15, 2000, among AIMCO,
AIMCO-GP and AIMCO OP.
</TABLE>
<PAGE> 1
OFFER TO PURCHASE FOR CASH
AIMCO
AIMCO PROPERTIES, L.P.
is offering to purchase any and all units of limited partnership interest in
RIVERSIDE PARK ASSOCIATES LIMITED PARTNERSHIP
FOR $35,686 PER UNIT IN CASH
Upon the terms and subject to the conditions set forth herein, we will accept
any and all units validly tendered in response to our offer. If units are
validly tendered and not properly withdrawn prior to the expiration date and the
purchase of all such units would result in there being less than 320
unitholders, we will purchase only 99% of the total number of units so tendered
by each limited partner.
Our offer and your withdrawal rights will expire at 5:00 P.M., New York City
time, on June 13, 2000, unless we extend the deadline.
You will not pay any partnership transfer fees if you tender your units. You
will pay any other fees and costs, including any transfer taxes.
Our offer is not subject to a minimum number of units being tendered.
Our offer price will be reduced for any distributions subsequently made by your
partnership prior to the expiration of our offer.
SEE "RISK FACTORS" BEGINNING ON PAGE 4 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 $35,686 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
properties are subsidiaries of ours and, therefore, the general partner
has substantial conflicts of interest with respect to our offer.
o We are making this offer with a view to making a profit and, therefore,
there is a conflict between our desire to purchase your units at a low
price and your desire to sell your units at a high price.
(Continued on next page)
--------------------------------------
If you desire to accept our offer, you should complete and sign the
enclosed Acknowledgment and Agreement as instructed in the letter of transmittal
attached as Annex II hereto (collectively the "the letter of transmittal"). The
signed yellow letter of transmittal and any other required documents must be
mailed or delivered 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. It is only necessary to
return the acknowledgment and agreement part of the letter of transmittal.
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 15, 2000
<PAGE> 2
(continued from cover page)
o Continuation of your partnership will result in our affiliates
continuing to receive management fees from your partnership.
Such fees would not be payable if your partnership was
liquidated.
o It is possible that we may conduct a future offer at a higher
price.
o For any units that we acquire from you, you will not receive
any future distributions from operating cash flow of your
partnership or upon a sale or refinancing of property owned by
your partnership.
o If we acquire a substantial number of units, we will increase
our ability to influence voting decisions with respect to your
partnership and may control such voting decisions, including
but not limited to the removal of the general partner, most
amendments to the partnership agreement and the sale of all or
substantially all of your partnership's assets.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
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Page
----
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SUMMARY TERM SHEET..........................................................................................1
INTRODUCTION................................................................................................3
RISK FACTORS................................................................................................4
No Third Party Valuation or Appraisal; No Arms-Length Negotiation......................................4
No Fairness Opinion From a Third Party.................................................................4
Offer Price May Not Represent Fair Market Value........................................................4
Offer Price Does Not Reflect Future Prospects..........................................................4
Offer Price Based on Our Estimate of Liquidation Proceeds..............................................4
Offer Price May Not Represent Liquidation Value........................................................4
Continuation of the Partnership; No Time Frame Regarding Sale of Properties............................4
Holding Units May Result in Greater Future Value.......................................................5
Conflicts of Interest With Respect to the Offer........................................................5
No General Partner Recommendation......................................................................5
Conflicts of Interest Relating to Management Fees......................................................5
Possible Future Offer at a Higher Price................................................................5
Recognition of Taxable Gain on a Sale of Your Units....................................................5
Loss of Future Distributions from Your Partnership.....................................................6
Possible Increase in Control of Your Partnership by Us.................................................6
Recognition of Gain Resulting from Possible Future Reduction in Your Partnership Liabilities...........6
Risk of Inability to Transfer Units for 12-Month Period................................................6
Potential Delay in Payment.............................................................................6
Debt Summary...........................................................................................6
Proposed Debt Refinancing..............................................................................7
THE OFFER...................................................................................................7
Section 1. Terms of the Offer; Expiration Date; Proration............................................7
Section 2. Acceptance for Payment and Payment for Units..............................................8
Section 3. Procedure for Tendering Units.............................................................9
Section 4. Withdrawal Rights........................................................................11
Section 5. Extension of Tender Period; Termination; Amendment; Subsequent Offering Period...........12
Section 6. Certain Federal Income Tax Matters.......................................................12
Section 7. Effects of the Offer.....................................................................15
Section 8. Information Concerning Us and Certain of Our Affiliates..................................16
Section 9. Background and Reasons for the Offer.....................................................20
Section 10. Position of the General Partner of Your Partnership With Respect to the Offer............26
Section 11. Conflicts of Interest and Transactions with Affiliates...................................27
Section 12. Future Plans of the Purchaser............................................................28
Section 13. Certain Information Concerning Your Partnership..........................................29
Section 14. Voting Power.............................................................................34
Section 15. Source of Funds..........................................................................34
Section 16. Dissenters' Rights.......................................................................35
Section 17. Conditions of the Offer..................................................................35
Section 18. Certain Legal Matters....................................................................37
Section 19. Fees and Expenses........................................................................37
ANNEX I - OFFICERS AND DIRECTORS..........................................................................I-1
ANNEX II - LETTER OF TRANSMITTAL.........................................................................II-1
</TABLE>
<PAGE> 4
Page 1
SUMMARY TERM SHEET
This summary term sheet highlights the most material information regarding
our offer, but it does not describe all of the details thereof. We urge you to
read this entire offer to purchase which contains the full details of our offer.
We have also included in the summary term sheet references to the sections of
this offer to purchase where a more complete discussion may be found.
o THE OFFER. Subject to the terms hereof, we are offering to acquire any and
all of the limited partnership interests (units) in Riverside Park
Associates Limited Partnership, your partnership for $35,686 per unit in
cash. See "The Offer--Section 1. Terms of the Offer; Expiration Date;
Proration" and "The Offer--Section 9. Background and Reasons for the
Offer--Determination of Offer Price."
o FACTORS IN DETERMINING THE OFFER PRICE. In determining the offering price
per unit we considered:
o The fact that we believe the per unit liquidation value of
your partnership is equal to our offer price per unit.
o There is no trading market for the units. See "The
Offer--Section 9. Background and Reasons for the
Offer--Comparison of Consideration to Alternative
Consideration."
o PRORATIONS. If the purchase of all validly tendered units would result in
there being less than 320 unitholders, we will purchase only 99% of the
total number of units so tendered by each limited partner. See "The
Offer--Section 1. Terms of the Offer; Expiration Date; Proration."
o EXPIRATION DATE. Our offer expires on June 13, 2000, unless extended, and
you can tender your units until our offer expires. See "The Offer--Section
1. Terms of the Offer; Expiration Date; Proration."
o RIGHT TO EXTEND THE EXPIRATION DATE. We can extend the offer in our sole
discretion, and we will send you a notice of any such extension. See "The
Offer--Section 5. Extension of Tender Period; Termination; Amendment;
Subsequent Offering Period."
o HOW TO TENDER. To tender your units, complete the accompanying letter of
transmittal and send it to the Information Agent, River Oaks Partnership,
Inc., at one of the address set forth on the back of this offer to
purchase. See "The Offer--Section 3. Procedures for Tendering."
o WITHDRAWAL RIGHTS. You can withdraw your units at any time prior to the
expiration of the offer, including any extensions. In addition, you can
withdraw your units any time on or after July 17, 2000, if we have not
already accepted units for purchase and payment. See "The Offer--Section 4.
Withdrawal Rights."
o HOW TO WITHDRAW. To withdraw your units, you need to send in a notice of
withdrawal identifying yourself and the units to be withdrawn. See "The
Offer--Section 4. Withdrawal Rights."
o TAX CONSEQUENCES. Your sale of units will be a taxable transaction for
federal income tax purposes, the consequences to each limited partner may
vary and you should consult your tax advisor on the precise tax
consequences to you. See "The Offer--Section 6. Certain Federal Income Tax
Matters."
o AVAILABILITY OF FUNDS. We currently have the necessary cash and a line of
credit to consummate the offers. See "The Offer--Section 15. Source of
Funds."
o CONDITIONS TO THE OFFER. There are a number of conditions to our offer,
including having adequate cash on hand and borrowings under a line of
credit, lack of competing tender offers, lack of certain changes in your
partnership, and lack of certain changes in the financial markets. See "The
Offer--Section 17.
<PAGE> 5
Page 2
Condition to the Offer."
o REMAINING AS A LIMITED PARTNER. If you do not tender your units, you will
continue to remain a limited partner in your partnership and we have no
plans to alter the operations, business or financial position of your
partnership or to take your partnership private. See "The Offer--Section 7.
Effects of the Offer."
o WHO WE ARE. We are AIMCO Properties, L.P., the main operating partnership
of Apartment Investment and Management Company, a New York Stock Exchange
listed company. See "The Offer--Section 8. Information Concerning Us and
Certain of Our Affiliates."
o CONFLICTS OF INTEREST. The general partner of your partnership and the
residential property manager are our subsidiaries and we and our affiliates
currently own 49% of the outstanding units in your partnership. See "The
Offer--Section 11. Conflicts of Interests" and "The Offer--Section 13.
Certain Information Concerning Your Partnership."
o NO GENERAL PARTNER RECOMMENDATION. The general partner of your partnership
makes no recommendation as to whether you should tender or refrain from
tendering your units and believes each limited partner should make his or
her own decision whether or not to tender. See "Terms of the Offer--Section
10. Position of the General Partner of Your Partnership With Respect to the
Offer."
o NO SUBSEQUENT OFFERING PERIOD. We will not have a subsequent offering
period after the expiration date of the initial offering period (including
any extensions). See "The Offer--Extension of Tender Period; Termination;
Amendment; Subsequent Offer Period."
o ADDITIONAL INFORMATION. For more assistance in tendering your units, please
contact our Information Agent at one of the addresses or telephone numbers
set forth on the back cover page of this offer to purchase.
<PAGE> 6
Page 3
INTRODUCTION
We are offering to purchase any and all of the outstanding units of
limited partnership interest in your partnership, for the purchase price of
$35,686 per unit, net to the seller in cash, without interest, less the amount
of distributions, if any, made by your partnership in respect of any unit from
the date hereof until the expiration date. Our offer is made upon the terms and
subject to the conditions set forth in this offer to purchase and in the
accompanying letter of transmittal.
Upon the terms and subject to the conditions set forth herein, we will
accept any and all units validly tendered in response to our offer. If units are
validly tendered prior to the expiration date and not properly withdrawn prior
to the expiration date in accordance with the procedures set forth in "The
Offer--Section 4. Withdrawal Rights" and the purchase of all such units would
result in there being less than 320 unitholders, we will purchase only 99% of
the total number of units so tendered by each limited partner. If we are going
to purchase only 99% of the units validly tendered, we will notify you of such
fact.
We will pay any transfer fees imposed for the transfer of units by your
partnership. However, you will have to pay any taxes that arise from your sale
of units. You will also have to pay any fees or commissions imposed by your
broker, or by any custodian or other trustee of any Individual Retirement
Account or benefit plan which is the owner of record of your units. Although the
fees charged for transferring units from an Individual Retirement Account vary,
such fees are typically $25-$50 per transaction. Depending on the number of
units that you tender, any fees charged on a per transaction basis could exceed
the aggregate offer price you receive (as a result of proration or otherwise).
We have retained River Oaks Partnership Services, Inc. to act as the
Information Agent in connection with our offer. We will pay all charges and
expenses in connection with the services of the Information Agent. The offer is
not conditioned on any minimum number of units being tendered. However, certain
other conditions do apply. See "The Offer--Section 17. Conditions of the Offer."
You may tender all or any portion of the units that you own. Under no
circumstances will we be required to accept any unit if the transfer of that
unit to us would be prohibited by the agreement of limited partnership of your
partnership.
Our offer will expire at 5:00 P.M. New York City time, on June 13,
2000, 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 17, 2000.
We are AIMCO Properties, L.P., a Delaware limited partnership. Together
with our subsidiaries, we conduct substantially all of the operations of
Apartment Investment and Management Company, or AIMCO. AIMCO is a
self-administered and self-managed real estate investment trust engaged in the
ownership, acquisition, development, expansion and management of multifamily
apartment properties. As of December 31, 1999, AIMCO owned or controlled, held
an equity interest in or managed 363,462 apartment units in 1,942 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."
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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 properties owned by your
partnership on any third-party appraisal or valuation. We established the terms
of our offer without any arms-length negotiation. The terms of the offer could
differ if they were subject to independent third party negotiations. It is
uncertain whether our offer price reflects the value which would be realized
upon a sale of your units to a third party.
NO FAIRNESS OPINION FROM A THIRD PARTY
We did not obtain an opinion from a third party that our offer price is
fair from a financial point of view.
OFFER PRICE MAY NOT REPRESENT FAIR MARKET VALUE
There is no established or regular trading market for your units, nor
is there another reliable standard for determining the fair market value of the
units. Our offer price does not necessarily reflect the price that you would
receive in an open market for your units. Such prices could be higher than our
offer price.
OFFER PRICE DOES NOT REFLECT FUTURE PROSPECTS
Our offer price is based on your partnership's historical property
income. It does not ascribe any value to potential future improvements in the
operating performance of your partnership's residential properties.
OFFER PRICE BASED ON OUR ESTIMATE OF LIQUIDATION PROCEEDS
The offer price represents only our estimate of the amount you would
receive if we liquidated the partnership. In determining the liquidation value,
we used for the residential properties the direct capitalization method to
estimate the value of your partnership's properties because we think a
prospective purchaser of the properties would value the properties using this
method. In doing so, we applied a capitalization rate to your partnership's
property income for [the year ended December 31, 1999. If property income for a
different period or a different capitalization rate was used, a higher valuation
could result. Other methods of valuing your units could also result in a higher
valuation.
OFFER PRICE MAY NOT REPRESENT LIQUIDATION VALUE
The actual proceeds obtained from a liquidation are highly uncertain
and could be more than our estimate. Accordingly, our offer price could be less
than the net proceeds that you would realize upon an actual liquidation of your
partnership.
CONTINUATION OF THE PARTNERSHIP; NO TIME FRAME REGARDING SALE OF PROPERTIES
Your general partner (which is our subsidiary) is proposing to continue
to operate your partnership and not to attempt to liquidate it at the present
time. It is not known when the properties owned by your partnership may be sold.
There may be no way to liquidate your investment in a partnership in the future
until the residential properties are sold and the partnership is liquidated. The
general partner of your partnership continually considers whether a property
should be sold or otherwise disposed of after consideration of relevant factors,
including prevailing economic conditions, availability of favorable financing
and tax
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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 sale of the properties would not be advantageous given market
conditions, the condition of the properties and tax considerations. In
particular, the general partner considered the changes in the local rental
market, the potential for appreciation in the value of a property and the tax
consequences to you and your partners on a sale of property. We cannot predict
when any property will be sold or otherwise disposed of.
HOLDING UNITS MAY RESULT IN GREATER FUTURE VALUE
Although a liquidation of your partnership is not currently
contemplated in the near future, you might receive more value if you retain your
units until your partnership is liquidated.
CONFLICTS OF INTEREST WITH RESPECT TO THE OFFER
The general partner of your partnership is our subsidiary and,
therefore, has substantial conflicts of interest with respect to our offer. We
are making this offer with a view to making a profit. There is a conflict
between our desire to purchase your units at a low price and your desire to sell
your units at a high price. We determined our offer price without negotiation
with any other party, including any general or limited partner.
NO GENERAL PARTNER RECOMMENDATION
The general partner of your partnership makes no recommendation as to
whether you should tender or refrain from tendering your units. Although the
general partner believes the offer is fair, you must make your own decision
whether or not to participate in the offer, based upon a number of factors,
including several factors that may be personal to you, such as your financial
position, your need or desire for liquidity, your preferences regarding the
timing of when you might wish to sell your units, other financial opportunities
available to you, and your tax position and the tax consequences to you of
selling your units.
CONFLICTS OF INTEREST RELATING TO MANAGEMENT FEES
Since we or our subsidiaries receive fees for managing your partnership
and its residential properties, a conflict of interest exists between our
continuing the partnership and receiving such fees, and the liquidation of the
partnership and the termination of such fees. Another conflict is the fact that
a decision of the limited partners of your partnership to remove, for any
reason, the general partner of your partnership or the residential property
manager of any property owned by your partnership would result in a decrease or
elimination of the substantial fees paid to them for services provided to your
partnership.
POSSIBLE FUTURE OFFER AT A HIGHER PRICE
It is possible that we may conduct a future offer at a higher price.
Such a decision will depend on, among other things, the performance of the
partnership, prevailing economic conditions, and our interest in acquiring
additional limited partnership interests.
RECOGNITION OF TAXABLE GAIN ON A SALE OF YOUR UNITS
Your sale of units for cash will be a taxable sale, with the result
that you will recognize taxable gain or loss measured by the difference between
the amount realized on the sale and your adjusted tax basis in the units of
limited partnership interest of your partnership you transfer to us. The "amount
realized" with respect to a unit of limited partnership interest you transfer to
us will be equal to the sum of the amount of cash received by you for the unit
sold pursuant to the offer plus the amount of partnership liabilities allocable
to the unit. The particular tax consequences for you of our offer will depend
upon a number of factors related to your tax situation, including your tax basis
in the units you transfer to us, whether you dispose of all of your units and
whether you have available suspended passive losses, credits or other tax items
to offset any gain
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recognized as a result of your sale of your units. Therefore, depending on your
basis in the units and your tax position, your taxable gain and any tax
liability resulting from a sale of units to us pursuant to the offer could
exceed our offer price. Because the income tax consequences of tendering units
will not be the same for everyone, you should consult your own tax advisor to
determine the tax consequences of the offer to you.
LOSS OF FUTURE DISTRIBUTIONS FROM YOUR PARTNERSHIP
If you tender your units in response to our offer, you will transfer to
us all right, title and interest in and to all of the units we accept, and the
right to receive all distributions in respect of such units on and after the
date on which we accept such units for purchase. Accordingly, for any units that
we acquire from you, you will not receive any future distributions from
operating cash flow of your partnership or upon a sale or refinancing of
properties owned by your partnership.
POSSIBLE INCREASE IN CONTROL OF YOUR PARTNERSHIP BY US
Decisions with respect to the day-to-day management of your partnership
are the responsibility of the general partner. Because the general partner of
your partnership is our affiliate, we control the management of your
partnership. Under your partnership's agreement of limited partnership, limited
partners holding a majority of the outstanding units must approve certain
extraordinary transactions, including the removal of the general partner, the
addition of a new general partner, most amendments to the partnership agreement
and the sale of all or substantially all of your partnership's assets. If we
acquire 9.83 additional units, we will own a majority of the outstanding units
and will have the ability to control any vote of the limited partners.
RECOGNITION OF GAIN RESULTING FROM POSSIBLE FUTURE REDUCTION IN YOUR PARTNERSHIP
LIABILITIES
Generally, a decrease in your share of partnership liabilities is
treated, for Federal income tax purposes, as a deemed cash distribution.
Although no general partner of your partnership has any current plan or
intention to reduce the liabilities of your partnership, it is possible that
future economic, market, legal, tax or other considerations may cause a general
partner to reduce the liabilities of your partnership. If you retain all or a
portion of your units and the liabilities of your partnership were to be
reduced, you would be treated as receiving a hypothetical distribution of cash
resulting from a decrease in your share of the liabilities of the partnership.
Any such hypothetical distribution of cash would be treated as a nontaxable
return of capital to the extent of your adjusted tax basis in your units and
thereafter as gain. Gain recognized by you on the disposition of retained units
with a holding period of 12 months or less may be classified as short-term
capital gain and subject to taxation at ordinary income tax rates.
RISK OF INABILITY TO TRANSFER UNITS FOR 12-MONTH PERIOD
Your partnership's agreement of limited partnership prohibits any
transfer of an interest if such transfer, together with all other transfers
during the preceding 12 months, would cause 50% or more of the total interest in
capital and profits of your partnership to be transferred within such 12-month
period. If we acquire a significant percentage of the interest in your
partnership, you may not be able to transfer your units for a 12-month period
following our offer.
POTENTIAL DELAY IN PAYMENT
We reserve the right to extend the period of time during which our
offer is open and thereby delay acceptance for payment of any tendered units.
The offer may be extended indefinitely, and no payment will be made in respect
of tendered units until the expiration of the offer and acceptance of units for
payment.
DEBT SUMMARY
As of December 31, 1999, you partnership has approximately $43,349,600
of balloon payments due
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on its mortgage debt in September, 2001. You partnership will have to refinance
such debt, sell assets or otherwise obtain additional funds prior to the balloon
payment dates, or it will be in default and could lose the property to
foreclosure.
PROPOSED DEBT REFINANCING
Your partnership has entered into a commitment letter to refinance the
existing mortgage. The new mortgage is expected to be for $51,000,000 with
monthly payments of $415,543, which fully amortize the principal over the new
mortgage's term. The new mortgage will mature in 2020. The new mortgage is
expected to have a fixed interest rate of 7.65%. No assurances can be given that
the proposed mortgage will be entered into or that the terms will be as
described herein.
THE OFFER
SECTION 1. TERMS OF THE OFFER; EXPIRATION DATE; PRORATION.
Upon the terms and subject to the conditions of the offer, we will
accept (and thereby purchase) any and all units that are validly tendered on or
prior to the expiration date and not withdrawn in accordance with the procedures
set forth in "The Offer -- Section 4. Withdrawal Rights." For purposes of the
offer, the term "expiration date" shall mean 5:00 P.M., New York City time, on
June 13, 2000, unless we in our sole discretion shall have extended the period
of time for which the offer is open, in which event the term "expiration date"
shall mean the latest time and date on which the offer, as extended by us, shall
expire. See "The Offer -- Section 5. Extension of Tender Period; Termination;
Amendment; Subsequent Offering Period," for a description of our right to extend
the period of time during which the offer is open and to amend or terminate the
offer.
The purchase price per unit will automatically be reduced by the
aggregate amount of distributions per unit, if any, made by your partnership to
you on or after the commencement of our offer and prior to the date on which we
acquire your units pursuant to our offer.
If, prior to the expiration date, we increase the consideration offered
to limited partners pursuant to the offer, the increased consideration will be
paid for all units accepted for payment pursuant to the offer, whether or not
the units were tendered prior to the increase in consideration.
If units are validly tendered prior to the expiration date and not
properly withdrawn prior to the expiration date in accordance with the
procedures set forth in "The Offer--Section 4. Withdrawal Rights" and the
purchase of all such units would result in (i) a "Rule 13e-3 transaction" within
the meaning of the Securities Exchange Act of 1934 (the "Exchange Act") , or
(ii) there being less than 320 unitholders, we will purchase only 99% of the
total number of units so tendered by each limited partner (subject to any
necessary adjustment for fractional units). If we are going to purchase only 99%
of the units validly tendered, we will notify you of such fact. In such case,
you would continue to be a limited partner and receive a K-1 for tax reporting
purposes. See "The Offer--Section 7. Effects of the Offer--Effect on Trading
Market; Registration Under 12(g) of the Exchange Act."
The offer is conditioned on satisfaction of certain conditions. THE
OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF UNITS BEING TENDERED. See
"The Offer--Section 17. Conditions to the Offer," which sets forth in full the
conditions of the offer. We reserve the right (but in no event shall we be
obligated), in our reasonable discretion, to waive any or all of those
conditions. If, on or prior to the expiration date, any or all of the conditions
have not been satisfied or waived, we reserve the right to (i) decline to
purchase any of the units tendered, terminate the offer and return all tendered
units to tendering limited partners, (ii) waive all the unsatisfied conditions
and purchase, subject to the terms of the offer, any and all units validly
tendered, (iii) extend the offer and, subject to the withdrawal rights of
limited partners, retain the units that have been tendered during the period or
periods for which the offer is extended, or (iv) amend the offer. The transfer
of units will be effective April 1, 2000.
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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 15, 2000.
SECTION 2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR UNITS.
Upon the terms and subject to the conditions of the offer, we will
purchase, by accepting for payment, and will pay for any and all units validly
tendered as promptly as practicable following the expiration date. A tendering
beneficial owner of units whose units are owned of record by an Individual
Retirement Account or other qualified plan will not receive direct payment of
the offer price; rather, payment will be made to the custodian of such account
or plan. In all cases, payment for units purchased pursuant to the offer will be
made only after timely receipt by the Information Agent of a properly completed
and duly executed letter of transmittal and other documents required by the
letter of transmittal. See "The Offer--Section 3. Procedure for Tendering
Units." UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE OFFER PRICE BY
REASON OF ANY DELAY IN MAKING SUCH PAYMENT.
We will, upon the terms and subject to the conditions of the offer,
accept for payment and pay for any and all units validly tendered, with
appropriate adjustments to avoid purchases that would violate the agreement of
limited partnership of your partnership and any relevant procedures or
regulations promulgated by the general partner. Accordingly, in some
circumstances, we may pay you the full offer price and accept an assignment of
your right to receive distributions and other payments and an irrevocable proxy
in respect of the units and defer, perhaps indefinitely, the transfer of
ownership of the units on the partnership books. In other circumstance we may
only be able to purchase units which, together with units previously transferred
within the preceding twelve months, do not exceed 50% of the outstanding units.
If more units than can be purchased under the partnership agreement are
validly tendered prior to the expiration date and not properly withdrawn prior
to the expiration date in accordance with the procedures specified herein, we
will, upon the terms and subject to the conditions of the offer, accept for
payment and pay for those units so tendered which do not violate the terms of
the partnership agreement, pro rata according to the number of units validly
tendered by each limited partner and not properly withdrawn on or prior to the
expiration date, with appropriate adjustments to avoid purchases of fractional
units. If the number of units validly tendered and not properly withdrawn on or
prior to the expiration date is less than or equal to the maximum number we can
purchase under the partnership agreement, we will purchase all units so tendered
and not withdrawn, upon the terms and subject to the conditions of the offer.
If proration of tendered units is required, then, subject to our
obligation under Rule 14e-1(c) under the Exchange Act to pay limited partners
the purchase price in respect of units tendered or return those units promptly
after termination or withdrawal of the offer, we do not intend to pay for any
units accepted for payment pursuant to the offer until the final proration
results are known. Notwithstanding any such delay in payment, no interest will
be paid on the cash offer price.
For purposes of the offer, we will be deemed to have accepted for
payment pursuant to the offer, and thereby purchased, validly tendered units,
if, as and when we give verbal or written notice to the Information Agent of our
acceptance of those units for payment pursuant to the offer. Payment for units
accepted for payment pursuant to the offer will be made through the Information
Agent, which will act as agent for tendering limited partners for the purpose of
receiving cash payments from us and transmitting cash payments to tendering
limited partners.
If any tendered units are not accepted for payment by us for any
reason, the letter of transmittal with respect to such units not purchased may
be destroyed by us or the Information Agent or returned to you. You may withdraw
tendered units until the expiration date (including any extensions). In
addition, if we have not
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accepted units for payment by July 17, 2000, you may then withdraw any tendered
units. After the expiration date, the Information Agent may, on our behalf,
retain tendered units, and those units may not be otherwise withdrawn, 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. Any such action is
subject, however, to our obligation under Rule 14e-1(c) under the Exchange Act,
to pay you the offer price in respect of units tendered or return those units
promptly after termination or withdrawal of the offer.
We reserve the right to transfer or assign, in whole or in part, to one
or more of our affiliates, the right to purchase units tendered pursuant to the
offer, but no such transfer or assignment will relieve us of our obligations
under the offer or prejudice your rights to receive payment for units validly
tendered and accepted for payment pursuant to the offer.
SECTION 3. PROCEDURE FOR TENDERING UNITS.
VALID TENDER. To validly tender units pursuant to the offer, a properly
completed and duly executed letter of transmittal and any other documents
required by such letter of transmittal must be received by the Information
Agent, at one of its addresses set forth on the back cover of this offer to
purchase, on or prior to the expiration date. You may tender all or any portion
of your units. No alternative, conditional or contingent tenders will be
accepted.
SIGNATURE REQUIREMENTS. If the letter of transmittal is signed by the
registered holder of a unit and payment is to be made directly to that holder,
then no signature guarantee is required on the letter of transmittal. Similarly,
if a unit is tendered for the account of a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc. or a commercial bank, savings bank, credit union, savings and loan
association or trust company having an office, branch or agency in the United
States (each an "Eligible Institution"), no signature guarantee is required on
the letter of transmittal. However, in all other cases, all signatures on the
letter of transmittal must be guaranteed by an Eligible Institution.
In order for you to tender in the offer, your units must be validly
tendered and not withdrawn on or prior to the expiration date.
THE METHOD OF DELIVERY OF THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS IS AT YOUR OPTION AND RISK AND DELIVERY WILL BE DEEMED MADE
ONLY WHEN ACTUALLY RECEIVED BY THE INFORMATION AGENT. IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED IS RECOMMENDED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY.
APPOINTMENT AS PROXY; POWER OF ATTORNEY. By executing the letter of
transmittal, you are irrevocably appointing us and our designees as your proxy,
in the manner set forth in the letter of transmittal, each with full power of
substitution, to the fullest extent of the your rights with respect to the units
tendered by you and accepted for payment by us. Each such proxy shall be
considered coupled with an interest in the tendered units. Such appointment will
be effective when, and only to the extent that, we accept the tendered unit for
payment. Upon such acceptance for payment, all prior proxies given by you with
respect to the units will, without further action, be revoked, and no subsequent
proxies may be given (and if given will not be effective). We and our designees
will, as to those units, be empowered to exercise all voting and other rights as
a limited partner as we, in our sole discretion, may deem proper at any meeting
of limited partners, by written consent or otherwise. We reserve the right to
require that, in order for units to be deemed validly tendered, immediately upon
our acceptance for payment of the units, we must be able to exercise full voting
rights with respect to the units, including voting at any meeting of limited
partners then scheduled or acting by written consent without a meeting. By
executing the letter of transmittal, you agree to execute all such documents and
take such other actions as shall be reasonably required to enable the units
tendered to be voted in accordance with our directions. The proxy granted by you
to us will remain effective and be irrevocable for a period of ten years
following the termination of our offer.
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By executing the letter of transmittal, you also irrevocably constitute
and appoint us and our 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 will remain
effective and be irrevocable for a period of ten years following the termination
of our offer. You will agree not to exercise any rights pertaining to the
tendered units without our prior consent. Upon such payment, all prior powers of
attorney granted by you with respect to such units will, without further action,
be revoked, and no subsequent powers of attorney may be granted (and if granted
will not be effective). Pursuant to such appointment as attorneys-in-fact, we
and our designees each will have the power, among other things, (i) to transfer
ownership of such units on the partnership books maintained by your general
partner (and execute and deliver any accompanying evidences of transfer and
authenticity it may deem necessary or appropriate in connection therewith), (ii)
upon receipt by the Information Agent of the offer consideration, to become a
substituted limited partner, to receive any and all distributions made by your
partnership on or after the date on which we acquire such units, and to receive
all benefits and otherwise exercise all rights of beneficial ownership of such
units in accordance with the terms of our offer, (iii) to execute and deliver to
the general partner of your partnership a change of address form instructing the
general partner to send any and all future distributions to which we are
entitled pursuant to the terms of the offer in respect of tendered units to the
address specified in such form, and (iv) to endorse any check payable to you or
upon your order representing a distribution to which we are entitled pursuant to
the terms of our offer, in each case, in your name and on your behalf.
By executing the letter of transmittal, you will irrevocably constitute
and appoint us and any of our designees as your true and lawful agent and
attorney-in-fact with respect to such units, with full power of substitution
(such power of attorney being deemed to be an irrevocable power coupled with an
interest), to withdraw any or all of such units that have been previously
tendered in response to any other tender or exchange offer, provided that the
price per unit we are offering is equal to or higher than the price per unit
being offered in the other tender or exchange offer. Such appointment is
effective upon the execution and receipt of the letter of transmittal and shall
continue to be effective unless and until you withdraw such units from this
offer prior to the expiration date.
ASSIGNMENT OF INTEREST IN FUTURE DISTRIBUTIONS. By executing the letter
of transmittal, you will irrevocably assign to us and our assigns all of your
right, title and interest in and to any and all distributions made by your
partnership from any source and of any nature, including, without limitation,
distributions in the ordinary course, distributions from sales of assets,
distributions upon liquidation, winding-up, or dissolution, payments in
settlement of existing or future litigation, and all other distributions and
payments from and after the expiration date of our offer, in respect of the
units tendered by you and accepted for payment and thereby purchased by us. If,
after the unit is accepted for payment and purchased by us, you receive any
distribution from any source and of any nature, including, without limitation,
distributions in the ordinary course, distributions from sales of assets,
distributions upon liquidation, winding-up or dissolution, payments in
settlement of existing or future litigation and all other distributions and
payments, from your partnership in respect of such unit, you will agree to
forward promptly such distribution to us.
DETERMINATION OF VALIDITY; REJECTION OF UNITS; WAIVER OF DEFECTS; NO
OBLIGATION TO GIVE NOTICE OF DEFECTS. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of units pursuant to our offer will be determined by us, in our reasonable
discretion, which determination shall be final and binding on all parties. We
reserve the absolute right to reject any or all tenders of any particular unit
determined by us not to be in proper form or if the acceptance of or payment for
that unit may, in the opinion of our counsel, be unlawful. We also reserve the
absolute right to waive or amend any of the conditions of the offer that we are
legally permitted to waive as to the tender of any particular unit and to waive
any defect or irregularity in any tender with respect to any particular unit of
any particular limited partner. Our interpretation of the terms and conditions
of the offer (including the letter of transmittal) will be final and binding on
all parties. No tender of units will be deemed to have been validly
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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. Certain Federal Income Tax Matters."
FIRPTA WITHHOLDING. To prevent the withholding of Federal income tax in
an amount equal to 10% of the amount realized on the disposition (the amount
realized is generally the offer price plus the partnership liabilities allocable
to each unit purchased), you must certify that you are not a foreign person if
you tender units. See the instructions to the letter of transmittal and "The
Offer--Section 6. Certain Federal Income Tax Matters."
TRANSFER TAXES. The amount of any transfer taxes (whether imposed on
the registered holder of units or any person) payable on account of the transfer
to such person will be deducted from the purchase price unless satisfactory
evidence of the payment of such taxes or exemption therefrom is submitted.
BINDING AGREEMENT. A tender of a unit pursuant to any of the procedures
described above and the acceptance for payment of such unit will constitute a
binding agreement between the tendering unitholder and us on the terms set forth
in this offer to purchase and the related letter of transmittal.
SECTION 4. WITHDRAWAL RIGHTS.
You may withdraw tendered units at any time prior to the expiration
date, including any extensions thereof, or on or after July 17, 2000, if the
units have not been previously accepted for payment.
For a withdrawal to be effective, a written notice of withdrawal must
be timely received by the Information Agent at one of its addresses set forth on
the back cover of the offer to purchase. Any such notice of withdrawal must
specify the name of the person who tendered, the number of units to be withdrawn
and the name of the registered holder of such units, if different from the
person who tendered. In addition, the notice of withdrawal must be signed by the
person who signed the letter of transmittal in the same manner as the letter of
transmittal was signed.
If purchase of, or payment for, a unit is delayed for any reason, or if
we are unable to purchase or pay for a unit for any reason, then, without
prejudice to our rights under the offer, tendered units may be retained by the
Information Agent; subject, however, to our obligation, pursuant to Rule
14e-1(c) under the Exchange Act, to pay the offer price in respect of units
tendered or return those units promptly after termination or withdrawal of our
offer.
Any units properly withdrawn will thereafter be deemed not to have been
validly tendered for purposes of our offer. However, withdrawn units may be
re-tendered at any time prior to the expiration date by following the procedures
described in "The Offer--Section 3. Procedures for Tendering Units."
All questions as to the validity and form (including time of receipt)
of notices of withdrawal will be determined by us in our reasonable discretion,
which determination will be final and binding on all parties. Neither we, the
Information Agent, nor any other person will be under any duty to give
notification of any defects or irregularities in any notice of withdrawal or
incur any liability for failure to give any such notification.
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SECTION 5. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENT; SUBSEQUENT
OFFERING PERIOD.
We expressly reserve the right, in our reasonable discretion, at any
time and from time to time, (i) to extend the period of time during which our
offer is open and thereby delay acceptance for payment of, and the payment for,
any unit, (ii) to terminate the offer and not accept any units not theretofore
accepted for payment or paid for if any of the conditions to the offer are not
satisfied or if any event occurs that might reasonably be expected to result in
a failure to satisfy such conditions, (iii) upon the occurrence of any of the
conditions specified in "The Offer--Section 17. Conditions to the Offer," to
delay the acceptance for payment of, or payment for, any units not already
accepted for payment or paid for, and (iv) to amend our offer in any respect
(including, without limitation, by increasing or decreasing 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 may be followed by a press release or
public announcement which will be issued no later than 9:00 a.m., New York City
time, on the next business day after the scheduled expiration date of our offer,
in accordance with Rule 14e-1(d) under the Exchange Act.
If we extend the offer, or if we delay payment for a unit (whether
before or after its acceptance for payment) or are unable to pay for a unit
pursuant to our offer for any reason, then, without prejudice to our rights
under the offer, the Information Agent may retain tendered units and those units
may not be withdrawn except to the extent tendering unitholders are entitled to
withdrawal rights as described in "The Offer--Section 4. Withdrawal Rights";
subject, however, to our obligation, pursuant to Rule 14e-l(c) under the
Exchange Act, to pay the offer price in respect of units tendered or return
those units promptly after termination or withdrawal of the offer.
If we make a material change in the terms of our offer, or if we waive
a material condition to our offer, we will extend the offer and disseminate
additional tender offer materials to the extent required by Rule 14e-1 under the
Exchange Act. The minimum period during which the offer must remain open
following any material change in the terms of the offer, other than a change in
price or a change in percentage of securities sought or a change in any dealer's
soliciting fee, if any, will depend upon the facts and circumstances, including
the materiality of the change, but generally will be five business days. 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.
Pursuant to Rule 14d-11 under the Exchange Act, we may be able to
provide for a subsequent offering period in tender offers for any and all
outstanding units. A subsequent offering period is an additional period of from
three to twenty business days following the expiration date of the offer
(including any extensions), in which unitholders may continue to tender units
not tendered in the offer for the offer price. In a public release, the
Securities and Exchange Commission (the "SEC") has expressed the view that the
inclusion of a subsequent offering period would constitute a material change to
the terms of the offer requiring us to disseminate new information to
unitholders in a manner reasonably calculated to inform them of such change
sufficiently in advance of the expiration date (generally five business days).
We do not plan to offer a subsequent offering period. In the event we elect to
include a subsequent offering period, we will so notify you consistent with the
requirements of the SEC.
SECTION 6. CERTAIN FEDERAL INCOME TAX MATTERS.
The following summary is a general discussion of certain of the United
States federal income tax
<PAGE> 16
Page 13
consequences of the offer that may be relevant to (i) unitholders who tender
some or all of their units for cash pursuant to our offer, and (ii) unitholders
who do not tender any of their units pursuant to our offer. This discussion is
based on the Internal Revenue Code of 1986, as amended (the "Internal Revenue
Code"), Treasury Regulations, rulings issued by the Internal Revenue Service
(the "IRS"), and judicial decisions, all as of the date of this offer to
purchase. All of the foregoing are subject to change or alternative
construction, possibly with retroactive effect, and any such change or
alternative construction could affect the continuing accuracy of this summary.
This summary is based on the assumption that your partnership is operated in
accordance with its organizational documents including its certificate of
limited partnership and agreement of limited partnership. This summary is for
general information only and does not purport to discuss all aspects of federal
income taxation which may be important to a particular person in light of its
investment or tax circumstances, or to certain types of investors subject to
special tax rules (including financial institutions, broker-dealers, insurance
companies, and, except to the extent discussed below, tax-exempt organizations
and foreign investors, as determined for United States federal income tax
purposes), nor (except as otherwise expressly indicated) does it describe any
aspect of state, local, foreign or other tax laws. This summary assumes that the
units constitute capital assets in the hands of the unitholders (generally,
property held for investment). No advance ruling has been or will be sought from
the IRS regarding any matter discussed in this offer to purchase. Further, no
opinion of counsel has been obtained with regard to the offer.
THE UNITED STATES FEDERAL INCOME TAX TREATMENT OF A UNITHOLDER
PARTICIPATING IN THE OFFER DEPENDS IN SOME INSTANCES ON DETERMINATIONS OF FACT
AND INTERPRETATIONS OF COMPLEX PROVISIONS OF UNITED STATES FEDERAL INCOME TAX
LAW FOR WHICH NO CLEAR PRECEDENT OR AUTHORITY MAY BE AVAILABLE. ACCORDINGLY, YOU
SHOULD CONSULT YOUR TAX ADVISOR REGARDING THE UNITED STATES FEDERAL, STATE,
LOCAL AND FOREIGN TAX CONSEQUENCES OF SELLING THE LIMITED PARTNERSHIP INTERESTS
IN YOUR PARTNERSHIP REPRESENTED BY UNITS PURSUANT TO OUR OFFER OR OF A DECISION
NOT TO SELL IN LIGHT OF YOUR SPECIFIC TAX SITUATION.
TAX CONSEQUENCES TO LIMITED PARTNERS TENDERING UNITS FOR CASH. You will
recognize gain or loss on a sale of a unit of limited partnership of your
partnership equal to the difference between (i) your "amount realized" on the
sale and (ii) your adjusted tax basis in the unit sold. The "amount realized"
with respect to a unit of limited partnership of your partnership will be equal
to the sum of the amount of cash received by you for the unit sold pursuant to
the offer plus the amount of partnership liabilities allocable to the unit (as
determined under Section 752 of the Internal Revenue Code). Thus, your taxable
gain and tax liability resulting from a sale of a unit of limited partnership of
your partnership could exceed the cash received upon such sale.
ADJUSTED TAX BASIS. If you acquired your units of limited partnership
of your partnership for cash, your initial tax basis in such units was generally
equal to your cash investment in your partnership increased by your share of
partnership liabilities at the time you acquired such units. Your initial tax
basis generally has been increased by (i) your share of partnership income and
gains, and (ii) any increases in your share of partnership liabilities, and has
been decreased (but not below zero) by (i) your share of partnership cash
distributions, (ii) any decreases in your share of partnership liabilities,
(iii) your share of partnership losses, and (iv) your share of nondeductible
partnership expenditures that are not chargeable to capital. For purposes of
determining your adjusted tax basis in units of limited partnership of your
partnership immediately prior to a disposition of your units, your adjusted tax
basis in your units will include your allocable share of partnership income,
gain or loss for the taxable year of disposition. If your adjusted tax basis is
less than your share of partnership liabilities (e.g., as a result of the effect
of net loss allocations and/or distributions exceeding the cost of your unit),
your gain recognized with respect to a unit of limited partnership of your
partnership pursuant to the offer will exceed the cash proceeds realized upon
the sale of such unit.
CHARACTER OF GAIN OR LOSS RECOGNIZED PURSUANT TO THE OFFER. Except as
described below, the gain or loss recognized by you on a sale of a unit of
limited partnership of your partnership pursuant to the offer generally will be
treated as a long-term capital gain or loss if you held the unit for more than
one year. Long-term capital gains recognized by individuals and certain other
noncorporate taxpayers generally will be subject to a maximum United States
federal income tax rate of 20%. If the amount realized with respect to a
<PAGE> 17
Page 14
unit of limited partnership of your partnership that is attributable to your
share of "unrealized receivables" of your partnership exceeds the tax basis
attributable to those assets, such excess will be treated as ordinary income.
Among other things, "unrealized receivables" include depreciation recapture for
certain types of property. In addition, the maximum United States federal income
tax rate applicable to persons who are noncorporate taxpayers for net capital
gains attributable to the sale of depreciable real property (which may be
determined to include an interest in a partnership such as your units) held for
more than one year is currently 25% (rather than 20%) with respect to that
portion of the gain attributable to depreciation deductions previously taken on
the property.
If you tender a unit of limited partnership interest of your
partnership in the offer, you will be allocated a share of partnership taxable
income or loss for the year of tender with respect to any units sold. You will
not receive any future distributions on units of limited partnership interest of
your partnership tendered on or after the date on which such units are accepted
for purchase and, accordingly, you may not receive any distributions with
respect to such accreted income. Such allocation and any partnership cash
distributions to you for that year will affect your adjusted tax basis in your
unit of limited partnership interest of your partnership and, therefore, the
amount of your taxable gain or loss upon a sale of a unit pursuant to the offer.
PASSIVE ACTIVITY LOSSES. The passive activity loss rules of the
Internal Revenue Code limit the use of losses derived from passive activities,
which generally include investments in limited partnership interests such as the
units of limited partnership interest of your partnership. An individual, as
well as certain other types of investors, generally cannot use losses from
passive activities to offset nonpassive activity income received during the
taxable year. Passive losses that are disallowed for a particular tax year are
"suspended" and may be carried forward to offset passive activity income earned
by the investor in future taxable years. In addition, such suspended losses may
be claimed as a deduction, subject to other applicable limitations, upon a
taxable disposition of the investor's interest in such activity.
Accordingly, if your investment in your units is treated as a passive
activity, you may be able to reduce gain from the sale of your units of limited
partnership interest of your partnership pursuant to the offer with passive
losses in the manner described below. If you sell all or a portion of your units
of limited partnership interest of your partnership pursuant to the offer and
recognize a gain on your sale, you will generally be entitled to use your
current and "suspended" passive activity losses (if any) from your partnership
and other passive sources to offset that gain. In general, if you sell all or a
portion of your units of limited partnership interest of your partnership
pursuant to the offer and recognize a loss on such sale, you will be entitled to
deduct that loss currently (subject to other applicable limitations) against the
sum of your passive activity income from your partnership for that year (if any)
plus any passive activity income from other sources for that year. If you sell
all of your units pursuant to the offer, the balance of any "suspended" losses
from your partnership that were not otherwise utilized against passive activity
income as described in the two preceding sentences will generally no longer be
suspended and will generally therefore be deductible (subject to any other
applicable limitations) by you against any other income for that year,
regardless of the character of that income. You are urged to consult your tax
advisor concerning whether, and the extent to which, you have available
"suspended" passive activity losses from your partnership or other investments
that may be used to reduce gain from the sale of units pursuant to the offer.
INFORMATION REPORTING, BACKUP WITHHOLDING AND FIRPTA. If you tender any
units, you must report the transaction by filing a statement with your United
States federal income tax return for the year of the tender which provides
certain required information to the IRS. To prevent the possible application of
back-up United States federal income tax withholding of 31% with respect to the
payment of the offer consideration, you are generally required to provide us
with your correct taxpayer identification number. See the instructions to the
letter of transmittal.
Gain realized by a foreign person on the sale of a unit pursuant to the
offer will be subject to federal income tax under the Foreign Investment in Real
Property Tax Act of 1980. Under these provisions of the
<PAGE> 18
Page 15
Internal Revenue Code, the transferee of an interest held by a foreign person in
a partnership which owns United States real property generally is required to
deduct and withhold 10% of the amount realized on the disposition. Amounts
withheld would be creditable against a foreign person's United States federal
income tax liability and, if in excess thereof, a refund could be claimed from
the Internal Revenue Service by filing a United States income tax return. See
the instructions to the letter of transmittal.
TAX CONSEQUENCES TO NON-TENDERING AND PARTIALLY-TENDERING LIMITED
PARTNERS. Section 708 of the Internal Revenue Code provides that if there is a
sale or exchange of 50% or more of the total interest in capital and profits of
a partnership within any 12-month period, such partnership terminates for United
States federal income tax purposes. It is possible that our acquisition of units
pursuant to the offer alone or in combination with other transfers of interests
in your partnership could result in such a termination of your partnership. If
your partnership is deemed to terminate for tax purposes, the following Federal
income tax events will be deemed to occur: the terminated partnership will be
deemed to have contributed all of its assets (subject to its liabilities) to a
new partnership in exchange for an interest in the new partnership and,
immediately thereafter, the old partnership will be deemed to have distributed
interests in the new partnership to the remaining limited partners in proportion
to their respective interests in the old partnership in liquidation of the old
partnership.
You will not recognize any gain or loss upon such deemed contribution
of your partnership's assets to the new partnership or upon such deemed
distribution of interests in the new partnership, and your capital account in
your partnership will carry over to the new partnership. A termination of your
partnership for Federal income tax purposes may change (and possibly shorten)
your holding period with respect to interest in you partnership that you choose
to retain. Gain recognized by you on the disposition of retained units with a
holding period of 12 months or less may be classified as short-term capital gain
and subject to taxation at ordinary income tax rates.
A termination of your partnership for Federal income tax purpose may
also subject the assets of your partnership to longer depreciable lives than
those currently applicable to the assets of your partnership. This would
generally decrease the annual average depreciation deductions allocable to you
for certain years following our offer if you do not tender all of your interests
in your partnership (thereby increasing the taxable income allocable to your
interests in your partnership each such year), but would have no effect on the
total depreciation deductions available over the useful lives of the assets of
your partnership. Additionally, upon a termination of your partnership, the
taxable year of your partnership will close for Federal income tax purposes.
SECTION 7. EFFECTS OF THE OFFER.
FUTURE CONTROL BY AIMCO. Because the general partner of your
partnership is our subsidiary, we have control over the management of your
partnership. If we are successful in acquiring more than 1.68% of the units
pursuant to the offer, we will own more than 50% of the total outstanding units
and, as a result, we 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, because we currently own approximately 49.18% 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
properties owned by your partnership. In the event that we acquire a substantial
number of units pursuant to the offer, removal of a property manager may become
more difficult or impossible.
DISTRIBUTIONS TO US. If we acquire units in the offer, we will
participate in any subsequent distributions to limited partners to the extent of
the units purchased.
PARTNERSHIP STATUS. We believe our purchase of units should not
adversely affect the issue of whether your partnership is classified as a
partnership for Federal income tax purposes.
<PAGE> 19
Page 16
BUSINESS. Our offer will not affect the operation of the properties
owned by your partnership. We will continue to control the general partner of
your partnership and the residential property manager, both of which will remain
the same. Consummation of the offer will not affect your agreement of limited
partnership, the operations of any partnership, the business and properties
owned by your partnership, the management compensation payable to your general
partner or any other matter relating to your partnership, except it would result
in us increasing our ownership of units. We have no current intention of
changing the fee structure for your general partner or the manager of your
partnership's residential properties.
EFFECT ON TRADING MARKET; REGISTRATION UNDER 12(g) OF THE EXCHANGE ACT.
If a substantial number of units are purchased pursuant to the offer, the result
will be a reduction in the number of limited partners in your partnership. In
the case of certain kinds of equity securities, a reduction in the number of
securityholders might be expected to result in a reduction in the liquidity and
volume of activity in the trading market for the security. In the case of your
partnership, however, there is no established public trading market for the
units and, therefore, we do not believe a reduction in the number of limited
partners will materially further restrict your ability to find purchasers for
your units through secondary market transactions.
The units are registered under Section 12(g) of the Exchange Act, which
means, among other things, that your partnership is required to file periodic
reports with the 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. Your partnership currently has 1,140 unitholders of
record. If units are tendered which would result in less than 320 unitholders,
we will purchase no more than 99% of the units tendered by each unitholder to
assure that there are more than 300 unitholders after the offer. See "The
Offer--Section 1. Terms of the Offer; Expiration Date."
ACCOUNTING TREATMENT. Upon consummation of the offer, we will account
for our investment in any acquired units under the purchase method of
accounting. There will be no effect on the accounting treatment of your
partnership as a result of the offer.
SECTION 8. INFORMATION CONCERNING US AND CERTAIN OF OUR AFFILIATES.
GENERAL. 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. AIMCO's Class A
Common Stock is listed and traded on the New York Stock Exchange under the
symbol "AIV." As of December 31, 1999, we owned or managed 363,462 apartment
units in 1,942 properties located in 49 states, the District of Columbia and
Puerto Rico. Based on apartment unit data compiled as of January 1, 1999, by the
National Multi Housing Council, we believe that we are the largest owner and
manager of multi-family apartment properties in the United States. As of
December 31, 1999, we:
- owned or controlled 106,148 units in 373 apartment properties;
- held an equity interest in 133,113 units in 751 apartment properties;
and
- managed 124,201 units in 818 apartment properties for third party
owners and affiliates.
Our general partner is AIMCO-GP, Inc., a Delaware corporation, which is
a wholly-owned subsidiary of AIMCO. Our principal executive offices are located
at Colorado Center, Tower Two, 2000 South Colorado Boulevard, Suite 2-1000,
Denver, Colorado 80222, and our telephone number is (303) 757-8101.
<PAGE> 20
Page 17
The names, positions and business addresses of the directors and
executive officers of AIMCO and your general partner (which is our subsidiary)
as well as a biographical summary of the experience of such persons for the past
five years or more, are set forth on Annex I attached hereto and are
incorporated herein by reference.
We and AIMCO are both subject to the information and reporting
requirements of the Exchange Act and, in accordance therewith, file reports and
other information with the Securities and Exchange Commission relating to our
business, financial condition and other matters, including the complete
financial statements summarized below. 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, 1999,
(particularly the management's discussion and analysis of financial condition
and results of operations) and other reports and documents filed by us with the
SEC.
Except as described in "The Offer--Section 9. Background and Reasons
for the Offer," and "The Offer--Section 11. Conflicts of Interests and
Transactions with Affiliates" neither we nor, to the best of our knowledge, any
of the persons listed on Annex I attached hereto, (i) beneficially own or have a
right to acquire any units, (ii) has effected any transaction in the units in
the past 60 days, or (iii) have any contract, arrangement, understanding or
relationship with any other person with respect to any securities of your
partnership, including, but not limited to, contracts, arrangements,
understandings or relationships concerning transfer or voting thereof, joint
ventures, loan or option arrangements, puts or calls, guarantees of loans,
guarantees against loss or the giving or withholding of proxies. Neither we nor
our affiliates intend to tender any units beneficially owned in this offer.
SUMMARY SELECTED FINANCIAL INFORMATION FOR AIMCO PROPERTIES, L.P. The
historical summary financial data for AIMCO Properties, L.P. for the years ended
December 31, 1999 and 1998, is based on audited financial statements. This
information should be read in conjunction with such financial statements,
including the notes thereto, and "Management's Discussion and Analysis of
Financial Condition and Results of Operations of the AIMCO Operating
Partnership" included in the AIMCO Operating Partnership's Form 10-K for the
year ended December 31, 1999.
<PAGE> 21
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<TABLE>
<CAPTION>
Year Ended
December 31,
--------------------------
1999 1998
----------- -----------
(Dollars in thousands,
except per unit data)
<S> <C> <C>
OPERATING DATA:
RENTAL PROPERTY OPERATIONS
Rental and other property revenue $ 531,883 $ 373,963
Property operating expenses (213,959) (145,966)
Owned property management expenses (15,322) (10,882)
Depreciation (131,257) (83,908)
----------- -----------
Income from property operations 171,345 133,207
----------- -----------
SERVICE COMPANY BUSINESS:
Management fees and other income 42,877 22,675
Management and other expenses (25,470) (16,960)
----------- -----------
Income from service company business 17,407 5,715
----------- -----------
General and administrative expenses (12,016) (11,418)
Interest expense (139,124) (88,208)
Interest income 62,183 29,252
Equity in earnings of unconsolidated subsidiaries (a) (2,588) 12,009
Equity in earnings (losses) of unconsolidated real estate partnerships (b) (2,400) (2,665)
Loss from IPLP exchange and assumption (684) (2,648)
Minority interest (5,788) (1,868)
Amortization of goodwill (5,860) (8,735)
----------- -----------
Income from operations 82,475 64,641
Gain on disposition of properties (1,785) 4,287
----------- -----------
Income before extraordinary item 80,690 68,928
Extraordinary item--early extinguishment of debt -- --
Net income $ 80,690 $ 68,928
=========== ===========
BALANCE SHEET INFORMATION
(end of period):
Real estate, before accumulated depreciation $ 4,508,535 $ 2,743,865
Real estate, net of accumulated depreciation 4,092,543 2,515,710
Total assets 5,684,251 4,186,764
Total mortgages and notes payable 2,584,289 1,601,730
Redeemable Partnership Units -- --
Partnership-obligated mandatory redeemable
convertible preferred securities of a subsidiary trust 149,500 149,500
Partners' capital 2,486,889 2,153,335
OTHER INFORMATION:
Total owned or controlled properties (end of period) 373 234
Total owned or controlled apartment units (end of period) 106,148 61,672
Total equity apartment units (end of period) 133,113 171,657
Units under management (end of period) 124,201 146,034
Basic earnings per Common OP Unit $ 0.39 $ 0.80
Diluted earnings per Common OP Unit $ 0.38 $ 0.78
Distributions paid per Common OP Unit $ 2.50 $ 2.25
Cash flows provided by operating activities $ 254,380 $ 144,152
Cash flows used in investing activities $ (243,078) $ (342,541)
Cash flows provided by (used in) financing activities $ 37,470 $ 214,133
Funds from operations (c) $ 320,434 $ 193,830
Weighted average number of Common OP Units outstanding 78,531 56,567
</TABLE>
- -----------
(a) Represents AIMCO Properties, L.P. equity earnings in unconsolidated
subsidiaries.
(b) Represents AIMCO Properties, L.P.'s share of earnings from partnerships
that own 133,113 apartment units at December 31, 1999 in which
partnerships AIMCO Properties, L.P. owns an equity interest.
(c) AIMCO Properties, L.P.'s management believes that the presentation of
funds from operations or "FFO", when considered with the financial data
determined in accordance with generally accepted accounting principles,
provides a useful measure of performance. However, FFO does not
represent cash flow and is not necessarily indicative of cash flow or
liquidity available to AIMCO Properties, L.P., nor should it be
considered as an alternative to net income as an indicator of operating
performance. The Board of Governors of the National Association of Real
Estate Investment Trusts ("NAREIT") defines FFO as net income (loss),
computed in accordance with generally accepted accounting principles,
excluding gains and losses from debt restructuring and sales of
property, plus real estate related depreciation and amortization
(excluding amortization of financing costs), and after
<PAGE> 22
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adjustments for unconsolidated partnerships and joint ventures. AIMCO
Properties, L.P. calculates FFO based on the NAREIT definition, as
adjusted for the amortization of goodwill, the non-cash deferred
portion of the income tax provision for unconsolidated subsidiaries and
less the payments of dividends on preferred stock. AIMCO Properties,
L.P.'s management believes that presentation of FFO provides investors
with industry-accepted measurements which help facilitate an
understanding of its ability to make required dividend payments,
capital expenditures and principal payments on its debt. There can be
no assurance that AIMCO Properties, L.P.'s basis of computing FFO is
comparable with that of other REITs.
<PAGE> 23
Page 20
The following is a reconciliation of net income to funds from operations:
<TABLE>
<CAPTION>
Year Ended
December 31,
----------------------
1999 1998
--------- ---------
(in thousands)
<S> <C> <C>
Net income $ 80,690 $ 68,928
Extraordinary item -- --
Gain (loss) on disposition of property 1,785 (4,287)
Real estate depreciation, net of minority interests 121,084 79,869
Real estate depreciation related to unconsolidated entities 104,754 34,765
Amortization 36,731 26,177
Deferred taxes 1,763 9,215
Expenses associated with convertible preferred securities 6,892 --
Preferred unit distributions (33,265) (20,837)
--------- ---------
Funds from operations $ 320,434 $ 193,830
========= =========
</TABLE>
RATIOS OF EARNINGS TO FIXED CHARGES OF AIMCO PROPERTIES, L.P. The following
table shows for the AIMCO Properties, L.P. (i) the ratio of income to fixed
charges and (ii) the ratio of income to fixed charges and preferred unit
distributions.
<TABLE>
<CAPTION>
Year Ended
December 31,
-------------------
1999 1998
-------- --------
<S> <C> <C>
Ratio of earnings to fixed charges (1) 2.37:1 1.6:1
Ratio of earnings to combined fixed charges
and preferred unit distributions (2) 1.73:1 1.7:1
</TABLE>
- -------------------------------------
(1) Our ratio of earnings to fixed charges was computed by dividing earnings by
fixed charges. For this purpose, "earnings" consists of income before
minority interests (which includes equity in earnings of unconsolidated
subsidiaries and partnerships only to the extent of dividends received)
plus fixed charges (other than any interest which has been capitalized);
and "fixed charges" consists of interest expense (including amortization of
loan costs) and interest which has been capitalized.
(2) Our ratio of earnings to combined fixed charges and preferred unit
distributions was computed by dividing earnings by the total of fixed
charges and preferred unit distributions. For this purpose, "earnings"
consists of income before minority interests (which includes equity in
earnings of unconsolidated subsidiaries and partnerships only to the extent
of dividends received) plus fixed charges (other than any interest which
has been capitalized); "fixed charges" consists of interest expense
(including amortization of loan costs) and interest which has been
capitalized; and "preferred unit distributions" consists of the amount of
pre-tax earnings that would be required to cover preferred unit
distributions requirements.
SECTION 9. BACKGROUND AND REASONS FOR THE OFFER.
GENERAL. We are in the business of acquiring direct and indirect
interests in apartment properties such as the properties owned by your
partnership. Our offer provides us with an opportunity to increase our ownership
interest in your partnership's properties while providing you and other
investors with an opportunity to liquidate your current investment.
<PAGE> 24
Page 21
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"). Through the Insignia Merger,
AIMCO also acquired a majority ownership interest in the entity that manages the
residential properties owned by your partnership. On October 31, 1998, IPT and
AIMCO entered into an agreement and plan of merger, dated as of October 1, 1998,
pursuant to which IPT merged with AIMCO on February 26, 1999. AIMCO then
contributed IPT's interest in Insignia Properties L. P., IPT's operating
partnership, to AIMCO's wholly owned subsidiary, AIMCO/IPT, Inc. AIMCO also
replaced IPT as the sole general partner of Insignia Properties L.P. As a
result, the general partner of your partnership is an indirect wholly owned
subsidiary of AIMCO/IPT and the residential property manager is our indirect
wholly owned subsidiary. Together with its subsidiaries, AIMCO currently owns,
in the aggregate, approximately 49% of your partnership's outstanding limited
partnership units.
During our negotiations with Insignia in early 1998, we decided that if
the merger with Insignia were consummated, we could also benefit from making
offers for limited partnership interests of some of the limited partnerships
formerly controlled or managed by Insignia (the "Insignia Partnerships"). Such
offers would provide liquidity for the limited partners of the Insignia
Partnerships, and would provide AIMCO Properties, L.P. with a larger asset and
capital base and increased diversification. While some of the Insignia
Partnerships are public partnerships and information is publicly available on
such partnerships for weighing the benefits of making a tender offer, many of
the partnerships are private partnerships and information about such
partnerships comes principally from the general partner. Our control of the
general partner makes it possible for us to obtain access to such information.
Further, such control also means that we control the operations of the
partnerships and their properties. Insignia did not propose that we conduct such
tender offers, rather we initiated the offers on our own. As of the date of this
offering, AIMCO Properties, L.P. has made offers to approximately 40 of the
Insignia Partnerships, including your partnership.
ALTERNATIVES CONSIDERED BY YOUR GENERAL PARTNER. Before we commenced
this offer, your general partner (which is our subsidiary) considered a number
of alternative transactions. The following is a brief discussion of the
advantages and disadvantages of the alternatives considered by your general
partner.
LIQUIDATION
One alternative would be for the partnership to sell its assets,
distribute the net liquidation proceeds to its partners in accordance with the
agreement of limited partnership, and thereafter dissolve. Partners would be at
liberty to use the net liquidation proceeds after taxes for investment,
business, personal or other purposes, at their option. If your partnership were
to sell its assets and liquidate, you and your partners would not need to rely
upon capitalization of income or other valuation methods to estimate the fair
market value of partnership assets. Instead, such assets would be valued through
negotiations with prospective purchasers (in many cases unrelated third
parties).
However, in the opinion of your general partner (which is our
subsidiary), the present time may not be the most desirable time to sell the
real estate assets of your partnership in a private transaction, and the
proceeds realized from any such sale would be uncertain. Your general partner
believes it currently is in the best interest of your partnership to continue
holding its real estate assets. Liquidation of the partnership assets may
trigger a prepayment penalty under the mortgages for the properties. Although
there might be a prepayment penalty of approximately 1 to 2% of the outstanding
balance of the mortgages depending on when and under what circumstances they are
prepaid, such prepayment penalties are not a significant factor in determining
when a property may be sold. See "The Offer--Section 13. Certain Information
Concerning Your Partnership--Investment Objectives and Policies; Sale or
Financing of Investments."
<PAGE> 25
Page 22
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 or improved operating
performance, the level of distributions might increase over time. It is possible
that the private resale market for properties could improve over time, making a
sale of the partnership's properties in a private transaction at some point in
the future a more attractive option than it is currently. The continuation of
your partnership will allow you to continue to participate in the net income and
any increases in revenue of your partnership and any net proceeds from the sale
of any property owned by your partnership. However, no assurance can be given as
to future operating results or as to the results of any attempts to sell any
property owned by your partnership.
There are several risks and disadvantages that result from continuing
the operations of your partnership without our offer. If your partnership were
to continue operating as presently structured, your partnership could be forced
to borrow on terms that could result in net losses from operations. In addition,
continuation of your partnership without our offer would deny you and your
partners the benefits of our offer. For example, you might have no opportunity
for liquidity unless you were to sell your units in a private transaction. Any
such sale would likely be at a discount from your pro rata share of the fair
market value of the properties owned by your partnership.
SALE OF ASSETS
Your partnership could sell the properties it owns and not liquidate.
Your general partner (which is our subsidiary) considers the sale of partnership
properties from time to time. However, any such sale would likely be a taxable
transaction, and, without a liquidating distribution, would not provide limited
partners with any cash to pay any tax liabilities arising as a result thereof.
ALTERNATIVE TRANSACTIONS CONSIDERED BY US. Before we decided to make
our offer, we considered a number of alternative transactions, including
purchasing some or all of your partnership's properties or merging your
partnership with us. However, both of these alternatives would require a vote of
all the limited partners. If the transaction was approved, all limited partners,
including those who wish to continue to participate in the ownership of your
partnership's properties, would be forced to participate in the transaction. If
the transaction was not approved, all limited partners, including those who
would like to dispose of their investment in your partnership's properties,
would be forced to retain their investment. We also considered an offer to
exchange units in your partnership for units of AIMCO Properties, L.P. However,
because of the expense and delay associated with making such an exchange offer,
we decided to make an offer for cash only. In addition, our historical
experience has been that most holders of limited partnership units, when given a
choice, prefer cash.
DETERMINATION OF OFFER PRICE. In establishing the offer price, we
reviewed certain publicly available information and certain information made
available to us by the general partner (which is our subsidiary) and our other
affiliates, including among other things: (i) the agreement of limited
partnership, as amended to date; (ii) the partnership's Annual Report on Form
10-KSB for the year ended December 31, 1999; (iii) the operating budgets
prepared by the property manager with respect to the partnership's properties
for the year ending December 31, 2000; and (iv) tender offer statements,
solicitation/recommendation statements and beneficial ownership reports on
Schedules TO, 14D-1, 14D-9 and 13D. Our determination of the offer price was
based on our review and analysis of the foregoing information, the other
financial information and the analyses concerning the partnership summarized
below.
VALUATION OF UNITS. We determined our offer price by estimating the
value of each residential property owned by your partnership using the direct
capitalization method. This method involves applying a capitalization rate to
your partnership's annual residential 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
<PAGE> 26
Page 23
produced, and the higher the capitalization rate utilized the lower the value
produced. We used your partnership's property income for the year ended December
31, 1999. Our method for selecting a capitalization rate begins with each
property being assigned a location and condition rating (e.g., "A" for
excellent, "B" for good, "C" for fair, and "D" for poor). We then adjust the
capitalization rate based on whether the property's mortgage debt bears interest
at a rate above or below 7.5% per annum. Generally, for every 0.5% in excess of
7.5%, the capitalization rate would be increased by 0.25% The evaluation of a
property's location and condition, and the determination of an appropriate
capitalization rate for a property, is subjective in nature, and others
evaluating the same property might use a different capitalization rate and
derive a different property value.
Property income is the difference between the revenues from the
property and related costs and expenses, excluding income derived from sources
other than its regular activities and before income deductions. Income
deductions include interest, income taxes, prior-year adjustments, charges to
reserves, write-off of intangibles, adjustments arising from major changes in
accounting methods and other material and nonrecurring items. In this respect,
property income differs from net income disclosed in the partnership's financial
statements, which does not exclude these income sources and deductions. The
following is a reconciliation of your partnership's property income for the year
ended December 31, 1999 to your partnership's net operating income for the same
period:
<TABLE>
<S> <C>
Net Income (Loss) $ (77,000)
Other Non-Operating Expense 200,000
Depreciation 2,814,000
Interest 3,949,000
-----------
Property Income $ 6,886,000
===========
</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 residential property
owned by your partnership using the direct capitalization
method. We selected capitalization rates based on our
experience in valuing similar properties. The lower the
capitalization rate applied to a property's income, the higher
its value. We considered local market sales information for
comparable properties, estimated actual capitalization rates
(property income less capital reserves divided by sales price)
and then evaluated each property in light of its relative
competitive position, taking into account property location,
occupancy rate, overall property condition and other relevant
factors. We believe that arms-length purchasers would base
their purchase offers on capitalization rates comparable to
those used by us, however there is no single correct
capitalization rate and others might use different rates. We
used property income for 1999 and then divided such amount by
the property's capitalization rate to derive an estimated
gross property value as described in the following table.
Based on the above, we estimated the gross property value of each
property as follows:
<TABLE>
<CAPTION>
1999 ESTIMATED GROSS
PROPERTY PROPERTY INCOME CAPITALIZATION RATE PROPERTY VALUE
- -------------- --------------- ------------------- ---------------
<S> <C> <C> <C>
Riverside Park $ 6,886,000 10.13% $ 68,000,000
</TABLE>
<PAGE> 27
Page 24
o Second, we calculated the value of the equity of your
partnership by adding to the aggregate gross property value of
all properties owned by your partnership, the value of the
non-real estate assets of your partnership, and deducting the
liabilities of your partnership, including mortgage debt and
debt, if any, owed by your partnership to its general partner
(which is our subsidiary) or its affiliates after
consideration of any applicable subordination provisions
affecting payment of such debt. We deducted from this value
certain other costs, including required capital expenditures,
deferred maintenance, and closing costs, to derive a net
equity value for your partnership of $20,485,054. 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,
99.00% of the estimated liquidation proceeds are assumed to be
distributed to holders of units. Our offer price represents
the per unit liquidation proceeds determined in this manner.
<TABLE>
<S> <C>
Gross valuation of partnership properties $ 68,000,600
Plus: Cash and cash equivalents 3,003,588
Plus: Other partnership assets, net of security deposits 519,751
Less: Mortgage debt, including accrued interest (45,147,150)
Less: Accounts payable and accrued expenses (367,380)
Less: Other liabilities (315,039)
------------
Partnership valuation before taxes and certain costs $ 25,693,770
Less: Extraordinary capital expenditures for deferred maintenance (3,508,716)
Less: Closing costs 1,700,000
------------
Estimated net valuation of your partnership $ 20,485,054
Percentage of estimated net valuation allocated to holders of units 99%
------------
Estimated net valuation of units 20,280,203
Total number of units 568.29
------------
Estimated valuation per unit $ 35,686
============
Cash consideration per unit $ 35,686
============
</TABLE>
COMPARISON OF CONSIDERATION TO ALTERNATIVE CONSIDERATION. To assist
holders of units in evaluating the offer, your general partner (which is our
subsidiary) has attempted to compare the offer price against: (a) prices at
which the units have sold in the secondary market; and (b) 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 chart
below. You should bear in mind that some of the alternative values are based on
a variety of assumptions that have been made by us. These assumptions relate to,
among other things, the operating results, if any, since December 31, 1999 as to
income and expenses of the property, other projected amounts and the
capitalization rates that may be used by prospective buyers if your partnership
assets were to be liquidated.
In addition, these estimates are based upon certain information
available to your general partner (which is our subsidiary) or an affiliate 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
<PAGE> 28
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offer. The assumptions used have been determined by the general partner of your
partnership or an affiliate in good faith, and, where appropriate, are based
upon current and historical information regarding your partnership and current
real estate markets, and have been highlighted below to the extent critical to
the conclusions of the general partner of your partnership. Actual results may
vary from those set forth below based on numerous factors, including interest
rate fluctuations, tax law changes, supply and demand for similar apartment
properties, the manner in which your partnership's properties is sold and
changes in availability of capital to finance acquisitions of apartment
properties.
Under your partnership's agreement of limited partnership, the term of
the partnership will continue until 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 $ 35,686
Alternatives
Prior cash tender offer price $ 12,786
Prior cash tender offer price $ 21,500
Estimated liquidation proceeds $ 35,686
</TABLE>
PRIOR TENDER OFFERS
In May, 1999, we commenced a tender offer at the original offer price
of $12,786 per unit. Our offer price was increased to $21,500 per unit. We
determined the original offer price using the same basic method for the current
offer but used property income for an earlier period.
On June 24, 1999, an unaffiliated third party commenced a tender offer
for 60 units at $18,000 per unit.
We are aware that tender offers may have been made by unaffiliated
third parties to acquire units in your partnership in exchange for cash. We are
unaware of the amounts offered, terms, tendering parties or number of units
involved in these tender offers. In connection with tender offers made by
Insignia affiliates with respect to partnerships for which we are making offers,
some limited partners filed lawsuits, all of which but one has been. We are not
aware of any merger, consolidation or other combination involving any of the
Insignia Partnerships, or any acquisitions of any of such partnerships or a
material amount of the assets of such partnerships.
PRICES ON SECONDARY MARKET
Secondary market sales information is not a reliable measure of value
because of the limited amount of any known trades. At present, privately
negotiated sales and sales through intermediaries are the only means which may
be available to a limited partner to liquidate an investment in units (other
than our offer) because the units are not listed or traded on any exchange or
quoted on NASDAQ, on the Electronic Bulletin Board, or in "pink sheets."
Secondary sales activity for the units, including privately negotiated sales,
has been limited and sporadic.
The Partnership Spectrum, which is an independent, third-party source
of information regarding sales of partnership units, reported no sales of your
partnership units for the years ended December 31, 1998 and 1999 and the three
months ended March 31, 2000. The American Partnership Board, which is an
independent, third-party source of information regarding sales of partnership
units, reported no sales of your partnership units for the year ended December
31, 1998 and 1999 and the three months ended March 31, 2000.
<PAGE> 29
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ESTIMATED LIQUIDATION PROCEEDS
Liquidation value is a measure of the price at which the assets of your
partnership would sell if disposed of in an arms-length transaction between a
willing buyer and your partnership, each having access to relevant information
regarding the historical revenues and expenses of the business. Your general
partner (which is our subsidiary) estimated the liquidation value of units using
the same direct capitalization method and assumptions as we did in valuing the
units for the offer price. The liquidation analysis assumes that your
partnership's properties are sold to an independent third-party buyer at the
current property value and that other balance sheet assets (excluding amortizing
assets) and liabilities of your partnership are sold at their book value, and
that the net proceeds of sale are allocated to your partners in accordance with
your partnership's agreement of limited partnership.
The liquidation analysis assumes that the assets of your partnership
are sold in a single transaction. Should the assets be liquidated over time,
even at prices equal to those projected, distributions to limited partners from
cash flow from operations might be reduced because your partnership's fixed
costs, such as general and administrative expenses, are not proportionately
reduced with the liquidation of assets. However, for simplification purposes,
the sales of the assets are assumed to occur concurrently. The liquidation
analysis assumes that the assets are disposed of in an orderly manner and are
not sold in forced or distressed sales where sellers might be expected to
dispose of their interests at substantial discounts to their actual fair market
value.
ALLOCATION OF CONSIDERATION. We have allocated to the limited partners
the amount of the estimated net valuation of your partnership based on your
partnership's agreement of limited partnership as if your partnership was being
liquidated at the current time.
SECTION 10. POSITION OF THE GENERAL PARTNER OF YOUR PARTNERSHIP WITH RESPECT TO
THE OFFER.
The partnership and the general partner of your partnership have
provided the following information for inclusion in this Offer to Purchase:
The general partner of your partnership believes the offer price and
the structure of the transaction are fair to the limited partners. In making
such determination, the general partner considered all of the factors and
information set forth below, but did not quantify or otherwise attach particular
weight to any such factors or information:
o The offer gives you an opportunity to make an individual decision on
whether to tender your units or to continue to hold them.
o The offer price and the method used to determine the offer price.
o The fact that the price offered for your units is based on an estimated
value of your partnership's properties that has been determined using a
method believed to reflect the valuation of such assets by buyers in
the market for similar assets.
o Prices at which the units have recently sold, to the extent such
information is available.
o The absence of an established trading market for your units.
o An analysis of possible alternative transactions, including a property
sale, or a liquidation of the partnership.
<PAGE> 30
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o An evaluation of the financial condition and results of operations of
your partnership.
The general partner of your partnership is remaining neutral and makes
no recommendation as to whether you should tender or refrain from tendering your
units in the offer. Although the general partner believes our offer is fair, the
general partner also believes that you must make your own decision whether or
not to participate in any offer, based upon a number of factors, including
several factors that may be personal to you, such as your financial position,
your need or desire for liquidity, your preferences regarding the timing of when
you might wish to sell your units, other financial opportunities available to
you, and your tax position and the tax consequences to you of selling your
units.
Neither the general partner of your partnership or its affiliates have
any plans or arrangements to tender any units. Except as otherwise provided in
"The Offer-Section 12. Future Plans of the Purchaser," the general partner does
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; a purchase or sale or transfer of a material amount
of your partnership's assets; or any changes in your partnership's present
capitalization, indebtedness or distribution policies. For information relating
to certain relationships between your partnership and its general partner, on
one hand, and AIMCO and its affiliates, on the other and conflicts of interests
with respect to the tender offer, see "The Offer--Section 9. Background and
Reasons for the Offer" and "The Offer--Section 11. Conflicts of Interests and
Transactions with Affiliates." See also "The Offer--Section 9. Background and
Reasons for the Offer--Comparison to Alternative Consideration--Prior Tender
Offers" and "The Offer--Section 13. Certain Information Concerning Your
Partnership--Beneficial Ownership of Interests in Your Partnership," for certain
information regarding transactions in units of your partnership.
SECTION 11. CONFLICTS OF INTEREST AND TRANSACTIONS WITH AFFILIATES.
CONFLICTS OF INTEREST WITH RESPECT TO THE OFFER. The general partner of
your partnership became a majority-owned subsidiary of AIMCO on October 1, 1998,
when AIMCO merged with Insignia. Your general partner became a wholly owned
subsidiary of AIMCO on February 26, 1999, when IPT merged with AIMCO.
Accordingly, the general partner of your partnership has substantial conflicts
of interest with respect to the offer. The general partner of your partnership
has a fiduciary obligation to obtain a fair offer price for you, even as a
subsidiary of AIMCO. As a consequence of our ownership of units, we may have
incentives to seek to maximize the value of our ownership of units, which in
turn may result in a conflict for your general partner in attempting to
reconcile our interests with the interests of the other limited partners.
Additionally, we desire to purchase units at a low price and you desire to sell
units at a high price. The general partner of your partnership makes no
recommendation as to whether you should tender or refrain from tendering your
units. Such conflicts of interest in connection with the offer and the operation
of AIMCO differ from those conflicts of interest that currently exist for your
partnership. Your general partner has filed a Solicitation/Recommendation
Statement on Schedule 14D-9 with the SEC, which indicates that it is 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 IN ITS
ENTIRETY BEFORE DECIDING WHETHER TO TENDER THEIR UNITS.
CONFLICTS OF INTEREST THAT CURRENTLY EXIST FOR YOUR PARTNERSHIP. We own
both the general partner of your partnership and the property manager of your
partnership's 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 reimbursements of $186,000 in 1997, $272,000 in 1998 and $366,000
in 1999. The reimbursement amount to your general partner for the 1998 fiscal
year included $10,000 which was paid to an affiliate of your general partner for
costs incurred in connection with construction overnight services. The property
manager for the residential properties received management fees of $423,000 in
1997, $445,000 in 1998 and $479,000 in 1999. We have
<PAGE> 31
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no current intention of changing the fee structure for your general partner or
the manager of your partnership's residential properties.
COMPETITION AMONG PROPERTIES. Because AIMCO and your partnership both
invest in apartment properties, these properties may compete with one another
for tenants. Furthermore, you should bear in mind that AIMCO may acquire
properties in general market areas where your partnership properties are
located. It is believed that this concentration of properties in a general
market area will facilitate overall operations through collective advertising
efforts and other operational efficiencies. In managing AIMCO's properties, we
will attempt to reduce conflicts between competing properties by referring
prospective customers to the property considered to be most conveniently located
for the customer's needs.
FUTURE OFFERS. Although we have no current plans to conduct future
tender offers for your units, our plans may change based on future
circumstances, including tender offers made by third parties. 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 properties.
We currently intend that, upon consummation of the offer, we will hold the units
acquired and your partnership will continue its business and operations
substantially as they are currently being conducted. The offer is not expected
to have any effect on partnership operations.
Although we have no present intention to do so, we may acquire
additional units or sell units after completion or termination of the offer. Any
acquisition may be made through private purchases, through one or more future
tender or exchange offers, by merger, consolidation or by any other means deemed
advisable. Any acquisition may be at a price higher or lower than the price to
be paid for the units purchased pursuant to this offer, and may be for cash,
limited partnership interests in AIMCO Properties, L.P. or other consideration.
We also may consider selling some or all of the units we acquire pursuant to the
offer to persons not yet determined, which may include our affiliates. We may
also buy your partnership's properties, although we have no present intention to
do so. There can be no assurance, however, that we will initiate or complete, or
will cause your partnership to initiate or complete, any subsequent transaction
during any specific time period following the expiration of the offer or at all.
Except as set forth herein, we do not have any present plans or
proposals which relate to or would result in an extraordinary transaction, such
as a merger, reorganization or liquidation, involving your partnership; a
purchase or sale or transfer of a material amount of your partnership's assets;
any changes in composition of your partnership's senior management or personnel
or their compensation; any changes in your partnership's present capitalization,
indebtedness or distribution policy; or any other material changes in your
partnership's structure or business. We or our affiliates may loan funds to your
partnership which may be secured by your partnership's properties. If any such
loans are made, upon default of such loans, we or our affiliates could seek to
foreclose on the loan and related mortgage or security interest. However, we
expect that consistent with your general partner's fiduciary obligations, the
general partner will seek and review opportunities (including opportunities
identified by us) to engage in transactions which could benefit your
partnership, such as sales or refinancings of assets or a combination of the
partnership with one or more other entities, with the objective of seeking to
maximize returns to limited partners.
We have been advised that the possible future transactions the general
partner expects to consider on behalf of your partnership include: (1) payment
of extraordinary distributions; (2) refinancing, reducing or increasing existing
indebtedness of the partnership; (3) sales of assets, individually or as part of
a complete liquidation; and (4) mergers or other consolidation transactions
involving the partnership. Any such merger or consolidation transaction could
involve other limited partnerships in which your general partner or its
affiliates
<PAGE> 32
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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 49% of the outstanding limited
partnership units we will be able to significantly influence the outcome of any
such vote. Our primary objective in seeking to acquire the units pursuant to the
offer is not, however, to influence the vote on any particular transaction, but
rather to generate a profit on the investment represented by those units.
SECTION 13. CERTAIN INFORMATION CONCERNING YOUR PARTNERSHIP.
GENERAL. 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 a wholly owned subsidiary of AIMCO. A wholly owned
subsidiary of AIMCO serves as manager of the residential properties owned by
your partnership. As of March 31, 1999 , there were 568.29 units issued and
outstanding, which were held of record by 1,140 limited partners. Your
partnership's principal executive offices are located at Colorado Center, Tower
Two, 2000 South Colorado Boulevard, Suite 2-1000, Denver, Colorado 80222, and
its telephone number at that address is (303) 757-8101.
For additional information about your partnership, please refer to the
annual report prepared by your partnership, particularly Item 2 of Form 10-KSB
which contains detailed information regarding the properties owned, including
mortgages, rental rates and taxes.
INVESTMENT OBJECTIVES AND POLICIES; SALE OR FINANCING OF INVESTMENTS.
In general, your general partner (which is our subsidiary) regularly evaluates
the partnership's properties by considering various factors, such as the
partnership's financial position and real estate and capital markets conditions.
The general partner monitors the properties' specific locale and sub-market
conditions (including stability of the surrounding neighborhood) evaluating
current trends, competition, new construction and economic changes. The general
partner oversees each asset's operating performance and continuously evaluates
the physical improvement requirements. In addition, the financing structure for
each property (including any prepayment penalties), tax implications,
availability of attractive mortgage financing to a purchaser, and the investment
climate are all considered. Any of these factors, and possibly others, could
potentially contribute to any decision by the general partner to sell,
refinance, upgrade with capital improvements or hold a particular partnership
property. If rental market conditions improve, the level of distributions might
increase over time. It is possible that the private resale market for
residential properties could improve over time, making a sale of the
partnership's properties in a private transaction at some point in the future a
more viable option than it is currently. After taking into account the foregoing
considerations, your general partner is not currently seeking a sale of your
partnership's residential properties primarily because it expects the
properties' operating performance to improve in the near term. In making this
assessment, your general partner noted that occupancy and rental rates at the
residential properties were 97% and $9,284, respectively, at December 31, 1999,
compared to 96% and $8,775, respectively, at December 31, 1998. In particular,
the general partner noted that it expects to
<PAGE> 33
Page 30
spend approximately $3,508,716 for capital improvements at the residential
properties in 2000 to repair and update the properties. Although there can be no
assurance as to future performance, however, these expenditures are expected to
improve the desirability of the property to tenants. The general partner does
not believe that a sale of the residential properties at the present time would
adequately reflect the properties' future prospects. Another significant factor
considered by your general partner is the likely tax consequences of a sale of
the residential properties for cash. Such a transaction would likely result in
tax liabilities for many limited partners. The general partner has not received
any recent indication of interest or offer to purchase the residential
properties.
TERM OF YOUR PARTNERSHIP. 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.
CAPITAL REPLACEMENTS. Your partnership has an ongoing program of
capital improvements, replacements and renovations, including roof replacements,
kitchen and bath renovations, balcony repairs (where applicable), replacement of
various building systems and other replacements and renovations in the ordinary
course of business. All capital improvement and renovation costs, which are
budgeted at $3,508,716 for 2000, are expected to be paid from operating cash
flows, cash reserves, or from short-term or long-term borrowings.
COMPETITION. There are other residential properties within the market
area of your partnership's properties. The number and quality of competitive
properties in such an area could have a material effect on the rental market for
the apartments at your partnership's properties and the rents that may be
charged for such apartments. While AIMCO is a significant factor in the United
States in the apartment industry, competition for apartments is local. According
to data published by the National Multi-Housing Council, as of January 1, 1999,
our portfolio of 373,409 owned or managed apartment units represents
approximately 2.2% of the national stock of rental apartments in structures with
at least five apartments.
FINANCIAL DATA. The selected financial information of your partnership
set forth below for the years ended December 31, 1999 and 1998 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-K[SB] of your partnership for the
year ended December 31, 1999.
<PAGE> 34
Page 30
RIVERSIDE PARK ASSOCIATES LIMITED PARTNERSHIP
(IN THOUSANDS, EXCEPT PER UNIT DATA)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31,
--------------------
1999 1998
-------- --------
<S> <C> <C>
OPERATING DATA:
Total Revenues $ 12,066 $ 11,204
Net Income (Loss) (77) (1,128)
Net Income per limited partnership unit (132.51) (1,932.86)
Distributions per limited partnership unit -- --
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1999 1998
-------- --------
<S> <C> <C>
BALANCE SHEET DATA:
Cash and Cash Equivalents $ 3,139 $ 2,078
Real Estate, Net of Accumulated Depreciation 39,513 40,422
Total Assets 43,394 44,293
Notes Payable 44,823 45,517
General Partners' Capital (Deficit) (1,211) (1,209)
Limited Partners' Capital (Deficit) (1,410) (1,335)
Partners' Capital (Deficit) (2,621) (2,544)
Total Distributions -- --
Net Increase (Decrease) in Cash and Cash Equivalents 1,061 (400)
Net Cash Provided by Operating Activities 2,958 (2,296)
</TABLE>
DESCRIPTION OF PROPERTIES. The following shows the location, the date of
purchase, the nature of your partnership's ownership interest in and the use of
each of your partnership's properties.
<TABLE>
<CAPTION>
Date of
Property Purchase Type of Ownership Use
- -------- -------- ----------------- ---
<S> <C> <C> <C>
Riverside Park 5/15/86 Fee ownership subject to Apartment
Fairfax County, Virginia first mortgage 1,222 units
</TABLE>
ACCUMULATED DEPRECIATION SCHEDULE. The following shows the gross
carrying value, accumulated depreciation and federal tax basis of each of your
partnership's properties as of December 31, 1999.
<TABLE>
<CAPTION>
Gross Accumulated Federal
Property Carrying Value Depreciation Rate Method Tax Basis
- -------------- -------------- ------------ ------------ ------ ---------
(in thousands) (in thousands)
<S> <C> <C> <C> <C> <C>
Riverside Park $ 76,652 $ 37,139 5-27.5 years S/L $ 28,231
</TABLE>
SCHEDULE OF MORTGAGES. The following shows certain information regarding
the outstanding mortgages encumbering each of your partnership's properties as
of December 31, 1999.
<PAGE> 35
Page 32
<TABLE>
<CAPTION>
Principal
Principal Stated Balance
Balance At Interest Period Maturity Due At
Property December 31, 1999 Rate Amortized Date Maturity
- ------------ ----------------- --------- --------- ------------ --------------
(in thousands) (in thousands)
<S> <C> <C> <C> <C> <C>
Current
Riverside $ 44,823 9.25%(2) (1) 9/27/01 $ 43,664
Park
1st mortgage
Proposed 1st $ 51,000,000(3) 7.65% 20 years 20 year term Fully amortized
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%. The above is the
interest rate for December, 1999.
(3) Proposed 1st mortgage beginning balance.
Your partnership has entered into a commitment letter to refinance the
existing mortgage. The new mortgage is expected to be for $51,000,000 with
monthly payments of $415,543, which fully amortize the principal over the new
mortgage's term. The new mortgage will mature in 2020. The new mortgage is
expected to have a fixed interest rate of 7.65%. No assurances can be given that
the proposed mortgage will be entered into or that the terms will be as
described herein.
AVERAGE ANNUAL RENTAL RATES AND OCCUPANCY. The following shows the
average annual rental rates and occupancy percentages for each of your
partnership's properties during the past two years.
<TABLE>
<CAPTION>
Property Average Annual Rental Rates Average Annual Occupancy
-------- --------------------------- ----------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Riverside Park $ 9,284 $ 8,775 97% 96%
</TABLE>
SCHEDULE OF REAL ESTATE TAXES AND RATES. The following shows the real
estate taxes and rates for 1999 for each of your partnership's properties.
<TABLE>
<CAPTION>
Property 1999 Billing 1999 Rate
-------- ------------ ------------
(in thousands)
<S> <C> <C>
Riverside Park $ 768 1.23%
</TABLE>
PROPERTY MANAGEMENT. Your partnership's residential properties are
managed by an entity which is a wholly owned subsidiary of AIMCO. Pursuant to
the management agreement between the property manager and your partnership, the
property manager operates your partnership's residential properties, establishes
rental policies and rates and directs marketing activities. The property manager
also is responsible for maintenance, the purchase of equipment and supplies, and
the selection and engagement of all vendors, suppliers and independent
contractors.
DISTRIBUTIONS. There have been no distributions paid in your
partnership.
OPERATING BUDGETS OF THE PARTNERSHIP. A summary of the operating
budgets of your partnership's properties for the year ending on December 31,
2000 is as follows:
<TABLE>
<CAPTION>
Riverside Park
--------------
<S> <C>
Total Revenues $ 12,552,821
Operating Expenses (4,949,759)
Replacement Reserves - Net 366,600
Debt Service (3,508,517)
Capital Expenditures (4,892,256)
--------------
Net Cash Flow $ (431,111)
==============
</TABLE>
<PAGE> 36
Page 33
The above budget, at the time it was made, was forward-looking
information developed by the general partner of your partnership. Therefore, the
budget was dependent upon future events with respect to the ability of your
partnership to meet such budget. The budget incorporated various assumptions
including, but not limited to, revenue (including occupancy rates), various
operating expenses, general and administrative expenses, capital expenditures,
and working capital levels. While the general partner deemed such budget to be
reasonable and valid at the date made, there is no assurance that the assumed
facts will be validated or that the budgeted results will actually occur. Any
estimate of the future performance of a business, such as your partnership's
business, is forward-looking and based on assumptions some of which inevitably
will prove to be incorrect.
The budget amounts provided above are figures that were not computed in
accordance with GAAP. In particular, items that are categorized as capital
expenditures for purposes of preparing the operating budget are often
re-categorized as expenses when the financial statements are audited and
presented in accordance with GAAP. Therefore, the summary operating budget
presented for fiscal 2000 should not necessarily be considered as indicative of
what the audited operating results for fiscal 2000 will be.
BENEFICIAL OWNERSHIP OF INTERESTS IN YOUR PARTNERSHIP. Together with
our subsidiaries, we currently own, in the aggregate, approximately 49% your
partnership's limited partnership units. Except as set forth above, neither we,
nor, to the best of our knowledge, any of our affiliates, (i) beneficially own
or have a right to acquire any units, (ii) has effected any transactions in the
units in the past 60 days, or (iii) have any contract, arrangement,
understanding or relationship with any other person with respect to any
securities of your partnership, including, but not limited to, contracts,
arrangements, understandings or relationships concerning transfer or voting
thereof, joint ventures, loan or option arrangements, puts or calls, guarantees
of loans, guarantees against loss or the giving or withholding of proxies.
COMPENSATION PAID TO THE GENERAL PARTNER AND ITS AFFILIATES. The
following table shows, for each of the years indicated, compensation paid to
your general partner and its affiliates on a historical basis.
<PAGE> 37
Page 34
<TABLE>
<CAPTION>
PARTNERSHIP FEES PROPERTY
YEAR AND EXPENSES MANAGEMENT FEES
- ---- ---------------- ---------------
<S> <C> <C>
1996 $ 176,000 $ 415,000
1997 186,000 423,000
1998 272,000 445,000
1999 366,000 479,000
</TABLE>
LEGAL PROCEEDINGS. Your partnership may be a party to a variety of
legal proceedings related to its ownership of the partnership's properties,
arising in the ordinary course of the business, which are not expected to have a
material adverse effect on your partnership.
ADDITIONAL INFORMATION CONCERNING YOUR PARTNERSHIP. Your partnership
files annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document your partnership
files at the SEC's public reference rooms in Washington, D.C., New York, New
York, and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. Your partnership's SEC filings are
also available to the public at the SEC's web site at http://www.sec.gov.
SECTION 14. VOTING POWER.
Decisions with respect to the day-to-day management of your partnership
are the responsibility of the general partner. Because the general partner of
your partnership is our affiliate, we control the management of your
partnership. Under your partnership's agreement of limited partnership, limited
partners holding a majority of the outstanding units must approve certain
extraordinary transactions, including the removal of the general partner, the
addition of a new general partner, most amendments to the partnership agreement
and the sale of all or substantially all of your partnership's assets. If we
acquire 9.83 additional units that we are offering to purchase, we will own a
majority of the outstanding units and will have the ability to control any vote
of the limited partners.
SECTION 15. SOURCE OF FUNDS.
We expect that approximately $9,997,297 will be required to purchase
all of the limited partnership units that we are seeking in this offer
(exclusive of fees and expenses estimated to be $15,000). For more information
regarding fees and expenses, see "The Offer - Section 19. Fees and Expenses."
In addition to this offer, we are concurrently making offers to acquire
interest in approximately 40 other limited partnerships. If all such offers were
fully subscribed for cash, we would be required to pay approximately $187
million for all such units. If for some reason we did not have such funds
available we might extend this offer for a period of time sufficient for us to
obtain additional funds, or we might terminate this offer. However, based on our
past experience with similar offers, we do not expect all such offers to be
fully subscribed. As a result, we expect that the funds that will be necessary
to consummate all the offers will be substantially less than $187 million. We
believe that we have sufficient cash on hand and available sources of financing
to pay such amounts. As of March 31, 2000, we had $22 million of cash on hand
and $90 million available for borrowing under our existing lines of credit.
Under our secured $350 million revolving credit facility with Bank of
America, BankBoston, N.A. and First Union National Bank, AIMCO Properties, L.P.
is the borrower and all obligations thereunder are guaranteed by AIMCO and
certain of its subsidiaries. The credit facility includes a swing line of up to
$30 million. The obligations under the credit facility are secured by AIMCO
Properties, L.P.'s pledge of its stock ownership in certain subsidiaries of
AIMCO as well as a pledge of its interests in notes issued by it to certain
subsidiaries of AIMCO. The annual interest rate under the credit facility is
based on either LIBOR or a base rate which is the higher of Bank of America's
reference rate or 0.5% over the federal funds rate, plus, in either
<PAGE> 38
Page 35
case, an applicable margin. The margin ranges between 2.05% and 2.55% in the
case of LIBOR-based loans and between 0.55% and 1.05% in the case of base rate
loans, based upon a fixed charge coverage ratio. The credit facility expires on
July 31, 2001 unless extended at the discretion of AIMCO Properties, L.P., at
which time the revolving facility would be converted into a term loan for up to
two successive one-year periods. The financial covenants contained in the credit
facility require us to maintain a ratio of debt to gross asset value of no more
than 0.55 to 1.0, and an interest coverage ratio of 2.25 to 1.0, and a fixed
charge coverage ratio of at least 1.75 to 1.0. In addition, the credit facility
limits us from distributing more than 80% of our Funds From Operations (as
defined) (or such amounts as may be necessary for us to maintain our status as a
REIT), imposes minimum net worth requirements and provides other financial
covenants related to certain of our assets and obligations.
SECTION 16. DISSENTERS' RIGHTS.
Neither the agreement of limited partnership of your partnership nor
applicable law provides any right for you to have your units appraised or
redeemed in connection with, or as a result of, our offer. You have the
opportunity to make an individual decision on whether or not to tender your
units in the offer.
SECTION 17. CONDITIONS OF THE OFFER.
Notwithstanding any other provisions of our offer, we will not be
required to accept for payment and pay for any units tendered pursuant to our
offer, may postpone the purchase of, and payment for, units tendered, and may
terminate or amend our offer if at any time on or after the date of this offer
to purchase and at or before the expiration of our offer (including any
extension thereof), any of the following shall occur or may be reasonably
expected to occur:
(1) any change (or any condition, event or development involving a
prospective change) shall have occurred or been threatened in the business,
properties, assets, liabilities, indebtedness, capitalization, condition
(financial or otherwise), operations, licenses or franchises, management
contract, or results of operations or prospects of your partnership or local
markets in which your partnership owns property, including any fire, flood,
natural disaster, casualty loss, or act of God that, in our reasonable judgment,
are or may be materially adverse to your partnership or the value of the units
to us, or we shall have become aware of any facts relating to your partnership,
its indebtedness or its operations which, in our reasonable judgment, has or may
have material significance with respect to the value of your partnership or the
value of the units to us; or
(2) there shall have occurred (i) any general suspension of trading in,
or limitation on prices for, securities on any national securities exchange or
the over-the-counter market in the United States, (ii) a decline in the closing
price of a share of AIMCO's Class A Common Stock of more than 7.5% from the date
hereof, (iii) any extraordinary or material adverse change in the financial,
real estate or money markets or major equity security indices in the United
States such that there shall have occurred at least a 25 basis point increase in
LIBOR, the price of the 10-year Treasury Bond or the 30-year Treasury Bond, or
at least a 7.5% decrease in the S&P 500 Index or the Morgan Stanley REIT Index,
in each case, from the date hereof, (iii) any material adverse change in the
commercial mortgage financing markets, (iv) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States (not existing on the date hereof), (vi) a commencement of a war,
conflict, armed hostilities or other national or international calamity directly
or indirectly involving the United States (not existing on the date hereof),
(vii) any limitation (whether or not mandatory) by any governmental authority
on, or any other event which, in our reasonable judgment, might affect the
extension of credit by banks or other lending institutions, or (viii) in the
case of any of the foregoing existing at the time of the commencement of the
offer, in our reasonable judgment, a material acceleration or worsening thereof;
or
(3) there shall have been threatened, instituted or pending any action,
proceeding, application or counterclaim by any Federal, state, local or foreign
government, governmental authority or governmental
<PAGE> 39
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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 your partnership or to
remove such entity as general partner of your partnership, or seeks to impose
any material limitation on our ability or the ability of any affiliate of ours
to conduct your partnership's business or own such assets, (iv) seeks to impose
material limitations on our ability to acquire or hold or to exercise full
rights of ownership of the units including, but not limited to, the right to
vote the units purchased by us on all matters properly presented to the limited
partners, or (v) might result, in our reasonable judgment, in a diminution in
the value of your partnership or a limitation of the benefits expected to be
derived by us as a result of the transactions contemplated by our offer or the
value of the units to us; or
(4) there shall be any action taken, or any statute, rule, regulation,
order or injunction shall be sought, proposed, enacted, promulgated, entered,
enforced or deemed applicable to our offer, your partnership, any general
partner of your partnership, us or any affiliate of ours or your partnership, or
any other action shall have been taken, proposed or threatened, by any
government, governmental authority or court, that, in our reasonable judgment,
might, directly or indirectly, result in any of the consequences referred to in
clauses (i) through (v) of paragraph (c) above; or
(5) your partnership shall have (i) changed, or authorized a change of,
the units or your partnership's capitalization, (ii) issued, distributed, sold
or pledged, or authorized, proposed or announced the issuance, distribution,
sale or pledge of (A) any equity interests (including, without limitation,
units), or securities convertible into any such equity interests or any rights,
warrants or options to acquire any such equity interests or convertible
securities, or (B) any other securities in respect of, in lieu of, or in
substitution for units outstanding on the date hereof, (iii) purchased or
otherwise acquired, or proposed or offered to purchase or otherwise acquire, any
outstanding units or other securities, (iv) declared or paid any dividend or
distribution on any units or issued, authorized, recommended or proposed the
issuance of any other distribution in respect of the units, whether payable in
cash, securities or other property, (v) authorized, recommended, proposed or
announced an agreement, or intention to enter into an agreement, with respect to
any merger, consolidation, liquidation or business combination, any acquisition
or disposition of a material amount of assets or securities, or any release or
relinquishment of any material contract rights, or any comparable event, not in
the ordinary course of business, (vi) taken any action to implement such a
transaction previously authorized, recommended, proposed or publicly announced,
(vii) issued, or announced its intention to issue, any debt securities, or
securities convertible into, or rights, warrants or options to acquire, any debt
securities, or incurred, or announced its intention to incur, any debt other
than in the ordinary course of business and consistent with past practice,
(viii) authorized, recommended or proposed, or entered into, any transaction
which, in our reasonable judgment, has or could have an adverse affect on the
value of your partnership or the units, (ix) proposed, adopted or authorized any
amendment of its organizational documents, (x) agreed in writing or otherwise to
take any of the foregoing actions or (xi) been notified that any debt of your
partnership or any of its subsidiaries secured by any of its or their assets is
in default or has been accelerated; or
(6) a tender or exchange offer for any units shall have been commenced
or publicly proposed to be made by another person or "group" (as defined in
Section 13(d)(3) of the Exchange Act), or it shall have been publicly disclosed
or we shall have otherwise learned that (i) any person or group shall have
acquired or proposed or be attempting to acquire beneficial ownership of more
than five percent of the units, or shall have been granted any option, warrant
or right, conditional or otherwise, to acquire beneficial ownership of more than
five percent of the units, other than acquisitions for bona fide arbitrage
purposes, or (ii) any person or group shall have entered into a definitive
agreement or an agreement in principle or made a proposal with
<PAGE> 40
Page 37
respect to a merger, consolidation or other business combination with or
involving your partnership; or
(7) the offer to purchase may have an adverse effect on AIMCO's status
as a REIT; or
(8) we shall not have adequate cash or financing commitments available
to pay the for the units validly tendered.
The foregoing conditions are for our sole benefit and may be asserted
by us regardless of the circumstances giving rise to such conditions or may be
waived by us in whole or in part at any time and from time to time in our
reasonable discretion. The failure by us at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such right, the waiver of
any such right with respect to any particular facts or circumstances shall not
be deemed a waiver with respect to any other facts or circumstances and each
right shall be deemed a continuing right which may be asserted at any time and
from time to time.
SECTION 18. CERTAIN LEGAL MATTERS.
GENERAL. Except as set forth in this Section 18, we are not, based on
information provided by your general partner (which is our subsidiary), aware of
any licenses or regulatory permits that would be material to the business of
your partnership, taken as a whole, and that might be adversely affected by our
acquisition of units as contemplated herein, or any filings, approvals or other
actions by or with any domestic or foreign governmental authority or
administrative or regulatory agency that would be required prior to the
acquisition of units by us pursuant to the offer, other than the filing of a
Tender Offer Statement on Schedule TO with the SEC (which has already been
filed) and any required amendments thereto. While there is no present intent to
delay the purchase of units tendered pursuant to the offer pending receipt of
any such additional approval or the taking of any such action, there can be no
assurance that any such additional approval or action, if needed, would be
obtained without substantial conditions or that adverse consequences might not
result to your partnership or its business, or that certain parts of its
business might not have to be disposed of or other substantial conditions
complied with in order to obtain such approval or action, any of which could
cause us to elect to terminate the offer without purchasing units thereunder.
Our obligation to purchase and pay for units is subject to certain conditions,
including conditions related to the legal matters discussed in this Section 18.
ANTITRUST. We do not believe that the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, is applicable to the acquisition of units
contemplated by our offer.
MARGIN REQUIREMENTS. The units are not "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System and,
accordingly, those regulations generally are not applicable to our offer.
STATE LAWS. We are not aware of any jurisdiction in which the making of
our offer is not in compliance with applicable law. If we become aware of any
jurisdiction in which the making of the offer would not be in compliance with
applicable law, we will make a good faith effort to comply with any such law.
If, after such good faith effort, we cannot comply with any such law, the offer
will not be made to (nor will tenders be accepted from or on behalf of)
unitholders residing in such jurisdiction. In those jurisdictions with
securities or blue sky laws that require the offer to be made by a licensed
broker or dealer, the offer shall be made on behalf of us, if at all, only by
one or more registered brokers or dealers licensed under the laws of that
jurisdiction.
SECTION 19. FEES AND EXPENSES.
Except as set forth herein, 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, e-mail, telephone, telex, telegraph and
personal interview and may request brokers, dealers and
<PAGE> 41
Page 38
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 any related legal fees and expenses.
----------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF US NOT CONTAINED HEREIN OR IN THE LETTER OF
TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED.
We have filed with the SEC a Tender Offer Statement on Schedule TO,
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. Your partnership has filed with the SEC a
Solicitation/Recommendation Statement on Schedule 14D-9 pursuant to Section
14(d)(4) and Rule 14d-9 under the Exchange Act, furnishing certain additional
information about your partnership's and the general partner's position
concerning our offer, and your partnership may file amendments thereto. The
Schedules TO and 14D-9 and any amendments to either Schedule, 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. Certain Information
Concerning Your Partnership--Additional Information Concerning Your
Partnership."
AIMCO PROPERTIES, L.P.
<PAGE> 42
ANNEX I
OFFICERS AND DIRECTORS
The names and positions of the executive officers of Apartment
Investment and Management Company ("AIMCO"), and 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 sole executive
officer of the general partner of your partnership is Patrick J. Foye, Executive
Vice President. Unless otherwise indicated, the business address of each
executive officer and director is Colorado Center, Tower Two, 2000 South
Colorado Boulevard, Suite 2-1000, 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 Chief Executive Officer
Harry G. Alcock Executive Vice President and Chief Investment Officer
Joel F. Bonder Executive Vice President, General Counsel and Secretary
Patrick J. Foye Executive Vice President
Lance J. Graber Executive Vice President--Acquisitions
Steven D. Ira Co-Founder and Executive Vice President
Paul J. McAuliffe Executive Vice President and Chief Financial Officer
Richard S. Ellwood Director
J. Landis Martin Director
Thomas L. Rhodes Director
</TABLE>
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATIONS FOR THE LAST FIVE YEARS
---- ---------------------------------------------
<S> <C>
Terry Considine Mr. Considine has been Chairman of the Board of Directors and
Chief Executive Officer of AIMCO since July 1994. Mr. Considine serves
as Chairman and director of Asset Investors Corporation ("Asset
Investors") and Commercial Assets, Inc. ("Commercial Assets"), two
other public real estate investment trusts. Mr.Considine has been and
remains involved as a principal in a variety of other business
activities.
Peter K. Kompaniez Mr. Kompaniez has been Vice Chairman of the Board of Directors
of AIMCO since July 1994 and was appointed President in July 1997. Mr.
Kompaniez has also served as Chief Operating Officer of NHP
Incorporated ("NHP"), which was acquired by the Company in December
1997. 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 AIMCO) and 3.1 million square feet of
commercial real estate.
Thomas W. Toomey Mr. Toomey served as Senior Vice President -- Finance and
Administration of AIMCO from January 1996 to March 1997, when he was
promoted to Executive Vice President -- Finance and Administration. Mr.
Toomey served as Executive Vice President --
</TABLE>
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<PAGE> 43
<TABLE>
<S> <C>
Finance and Administration until December 1999, when he was appointed
Chief Operating Officer. From 1990 until 1995, Mr. Toomey served in a
similar capacity with Lincoln Property Company ("LPC") 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. Mr.
Toomey received a B.S. in Business Administration/Finance from Oregon
State University.
Harry G. Alcock Mr. Alcock served as a Vice President of AIMCO from July 1996 to
October 1997, when he was promoted to Senior Vice President --
Acquisitions. Mr. Alcock served as Senior Vice President --
Acquisitions until October 1999, when he was promoted to Executive
Vice President and Chief Investment Officer. Mr. Alcock has had
responsibility for acquisition and financing activities of the Company
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 acquisition and development. From 1987 to 1988, Mr.
Alcock worked for Ford Aerospace Corp. He received his B.S. from San
Jose State University.
Joel F. Bonder Mr. Bonder was appointed Executive Vice President, General
Counsel and Secretary of AIMCO effective December 1997. Prior to
joining AIMCO, Mr. Bonder served as Senior Vice President and General
Counsel of NHP from April 1994 until December 1997. Mr. Bonder served
as Vice President and Deputy General Counsel of NHP from June 1991 to
March 1994 and as Associate General Counsel of NHP Incorporated from
1986 to 1991. From 1983 to 1985, Mr. Bonder practiced with the
Washington, D.C. law firm of Lane & Edson, P.C. and from 1979 to 1983
practiced with the Chicago law firm of Ross and Hardies. Mr. Bonder
received a B.A. from the University of Rochester and a J.D. from
Washington University School of Law.
Patrick J. Foye Mr. Foye was appointed Executive Vice President of AIMCO in
May 1998. He is responsible for acquisitions of partnership securities,
consolidation of minority interests, and corporate and other
acquisitions. Prior to joining AIMCO Mr. Foye was a Merger and
Acquisitions 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 Law School and was
Associate Editor of the Fordham Law Review.
Lance J. Graber Mr. Graber was appointed Executive Vice President -- Acquisitions
of AIMCO in October 1999. His principal business
</TABLE>
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<PAGE> 44
<TABLE>
<S> <C>
function is acquisitions. Prior to joining the Company, Mr. Graber was
an Associate from 1991 through 1992 and then a Vice President from 1992
through 1994 at Credit Suisse First Boston engaged in real estate
financial advisory services and principal investing. He was a Director
there from 1994 to May 1999, during which time he supervised a staff of
seven in the making of principal investments in hotel, multi-family and
assisted living properties. Mr. Graber received a B.S. and an M.B.A.
from the Wharton School of the University of Pennsylvania.
Steven D. Ira Mr. Ira is a Co-Founder of AIMCO and has served as Executive Vice
President -- Property Operations of the Company since July 1994. From
1987 until July 1994, he served as President of Property Asset
Management ("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 (CPM) designation from the National
Institute of Real Estate Management (IREM) and he is a member of the
Boards of Directors of the National Multi-Housing Council, the National
Apartment Association and the Apartment Association of Greater Orlando.
Mr. Ira received a B.S. from Metropolitan State College in 1975.
Paul J. McAuliffe Mr. McAuliffe has been Executive Vice President of AIMCO since
February 1999 and was appointed Chief Financial Officer in October
1999. Prior to joining AIMCO, Mr. McAuliffe was Senior Managing
Director of Secured Capital Corp and prior to that time had been a
Managing Director of Smith Barney, Inc. from 1993 to 1996, where he was
senior member of the underwriting team that lead AIMCO's initial public
offering in 1994. Mr. McAuliffe was also a Managing Director and head
of the real estate group at CS First Boston from 1990 to 1993 and he
was a Principal in the real estate group at Morgan Stanley & Co., Inc.
where he worked from 1983 to 1990. Mr. McAuliffe received a B.A. from
Columbia College and an M.B.A. from University of Virginia, Darden
School.
Richard S. Ellwood 12 Auldwood Lane, Rumson, NJ 07660 Mr. Ellwood was appointed a
director of AIMCO in July 1994. Mr. Ellwood is currently Chairman of
the Audit Committee and a member of the Compensation 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
</TABLE>
I-3
<PAGE> 45
<TABLE>
<S> <C>
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 director of Felcor Lodging Trust, Incorporated and
Florida East Coast Industries, Inc.
J. Landis Martin 199 Broadway, Suite 4300, Denver, CO 80202, Mr. Martin was
appointed a director of AIMCO in July 1994 and became Chairman of the
Compensation Committee on March 19, 1998. Mr. Martin is a member of the
Audit Committee. Mr. Martin has served as President and Chief Executive
Officer of NL Industries, Inc., a manufacturer of titanium dioxide
since 1987. Mr. Martin has served as Chairman of Tremont Corporation
("Tremont"), a holding company operating through its affiliates
Titanium Metals Corporation ("TIMET") and NL Industries, Inc. ("NL"),
since 1990 and as Chief Executive Officer and a director of Tremont
since 1988. Mr. Martin has served as Chairman of TIMET, an integrated
producer of titanium since 1987 and Chief Executive Officer since
January, 1995. From 1990 until its acquisition by a predecessor of
Halliburton Company ("Halliburton") 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 Halliburton, which is engaged in
the petroleum services, hydrocarbon and engineering industries, and
Crown Castle International Corporation, a communications company.
Thomas L. Rhodes 215 Lexington Avenue, 4th Floor, New York, NY 10016 Mr. Rhodes
was appointed a Director of AIMCO in July 1994 and is currently a
member of the Audit and Compensation Committees. Mr. Rhodes has served
as the President and Director of National Review magazine since
November 1992, where he has also served as a Director since 1988. 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 1992. He is currently Co-Chairman of the Board,
Co-Chief Executive Officer and a Director of Asset Investors and
Commercial Assets. He also serves as a Director of Delphi Financial
Group and its subsidiaries, Delphi International Ltd., Oracle
Reinsurance Company and The Lynde and Harry Bradley Foundation.
</TABLE>
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<PAGE> 46
The letter of transmittal and any other required documents should be sent or
delivered by each unitholder or such unitholder's broker, dealer, bank, trust
company or other nominee to the Information Agent at one of its addresses set
forth below.
THE INFORMATION AGENT FOR THE OFFER IS:
RIVER OAKS PARTNERSHIP SERVICES, INC.
<TABLE>
<CAPTION>
By Mail: By Overnight Courier: By Hand:
<S> <C> <C>
P.O. Box 2065S. 111 Commerce Road 111 Commerce Road
Hackensack, N.J. 07606-2065 Carlstadt, N.J. 07072 Carlstadt, N.J. 07072
Attn.: Reorganization Dept. Attn.: Reorganization Dept.
</TABLE>
For information, please call:
TOLL FREE: (888) 349-2005
I-5
<PAGE> 1
ANNEX II
LETTER OF TRANSMITTAL
TO TENDER UNITS OF LIMITED PARTNERSHIP IN
RIVERSIDE PARK ASSOCIATES LIMITED PARTNERSHIP (THE "PARTNERSHIP")
PURSUANT TO AN OFFER TO PURCHASE
DATED MAY 15, 2000 (THE "OFFER DATE")
BY
AIMCO PROPERTIES, L.P.
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 5:00 P.M., NEW YORK TIME,
ON JUNE 13, 2000, UNLESS EXTENDED (AS EXTENDED FROM TIME TO
TIME, THE "EXPIRATION DATE")
- --------------------------------------------------------------------------------
TO PARTICIPATE IN THE OFFER, YOU MUST SEND A DULY COMPLETED AND EXECUTED COPY OF
THE ENCLOSED ACKNOWLEDGMENT AND AGREEMENT AND ANY OTHER DOCUMENTS REQUIRED BY
THIS LETTER OF TRANSMITTAL SO THAT SUCH DOCUMENTS ARE RECEIVED BY RIVER OAKS
PARTNERSHIP SERVICES, INC., THE INFORMATION AGENT, ON OR PRIOR TO THE EXPIRATION
DATE. 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 THE
ACKNOWLEDGMENT AND AGREEMENT OR ANY OTHER REQUIRED DOCUMENTS TO AN ADDRESS OTHER
THAN AS SET FORTH BELOW 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 THE ACKNOWLEDGMENT AND AGREEMENT.
---------------------------
FOR INFORMATION OR ASSISTANCE IN CONNECTION WITH THE OFFER OR THE
COMPLETION OF THE ACKNOWLEDGMENT AND AGREEMENT, PLEASE CONTACT THE INFORMATION
AGENT AT (888) 349-2005 (TOLL FREE).
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>
NOTE: PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THE ACKNOWLEDGMENT AND AGREEMENT IS COMPLETED.
II-1
<PAGE> 2
Ladies and Gentlemen:
The Signatory (the "Signatory") executing the Acknowledgment and Agreement
relating to the captioned offer (the "Acknowledgment and Agreement"), which is
enclosed, upon the terms and subject to the conditions set forth in the Offer,
hereby and thereby tenders to the Purchaser the units set forth in the box
entitled "Description of Units Tendered" on the Acknowledgment and Agreement,
including all interests in any limited partnership represented by such units
(collectively, the "Units"), at the price indicated in the Offer as supplemented
or amended, less the amount of distributions, if any, made or declared by the
Partnership from the Offer Date until the Expiration Date (the "Offer Price"),
net to the Signatory in cash, without interest. Capitalized terms used herein
but not otherwise defined herein shall have the meanings ascribed thereto in
such Acknowledgment and Agreement.
Subject to and effective upon acceptance for payment of any of the Units
tendered hereby and thereby in accordance with the terms of the Offer, the
Signatory hereby and thereby 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 and thereby that are accepted for payment
pursuant to the Offer, including, without limitation, (i) all of the Signatory's
interest in the capital of the Partnership, and the Signatory's interest in all
profits, losses and distributions of any kind to which the Signatory shall at
any time be entitled in respect of the Units, including, without limitation,
distributions in the ordinary course, distributions from sales of assets,
distributions upon liquidation, winding-up, or dissolution, payments in
settlement of existing or future litigation, and all other distributions and
payments from and after the Expiration Date, in respect of the Units tendered by
the Signatory and accepted for payment and thereby purchased by the Purchaser;
(ii) all other payments, if any, due or to become due to the Signatory in
respect of the Units, under or arising out of the agreement and certificate 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 Signatory'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
Signatory'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 Signatory against the Partnership, the other
partners of the Partnership, or the general partner and its affiliates, under or
arising out of the Partnership Agreement, the Purchase Agreement, the
Signatory'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.
NOTWITHSTANDING ANY PROVISION IN THE PARTNERSHIP AGREEMENT OR ANY PURCHASE
AGREEMENT TO THE CONTRARY, THE SIGNATORY HEREBY AND THEREBY 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 and thereby,
the Signatory 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 Signatory 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
thereby 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 the enclosed Acknowledgment and Agreement, the Signatory
represents that either (i) the Signatory 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 Signatory understands that a tender of Units to the Purchaser will
constitute a binding
II-2
<PAGE> 3
agreement between the Signatory and the Purchaser upon the terms and subject to
the conditions of the Offer. The Signatory recognizes that under certain
circumstances set forth in the Offer, the Purchaser may not be required to
accept for payment any or all of the Units tendered hereby. In such event, the
Signatory understands that any Acknowledgment and Agreement for Units not
accepted for payment may be returned to the Signatory or destroyed by the
Purchaser (or its agent). THIS TENDER IS IRREVOCABLE, EXCEPT THAT UNITS TENDERED
PURSUANT TO THE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION DATE,
OR UNLESS ALREADY ACCEPTED FOR PAYMENT, ANY TIME AFTER 60 DAYS FROM THE OFFER
DATE.
THE SIGNATORY 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 SIGNATORY HAS MADE HIS OR HER OWN DECISION TO TENDER UNITS.
The Signatory hereby and thereby represents and warrants for the benefit of
the Partnership and the Purchaser that the Signatory owns the Units tendered
hereby and thereby 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 thereby 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 and therein are in
compliance with all applicable laws and regulations.
All authority herein or therein conferred or agreed to be conferred shall
survive the death or incapacity of the Signatory, and any obligations of the
Signatory shall be binding upon the heirs, personal representatives, trustees in
bankruptcy, legal representatives, and successors and assigns of the Signatory.
The Signatory represents and warrants that, to the extent a certificate
evidencing the Units tendered hereby and thereby (the "original certificate") is
not delivered by the Signatory together with the Acknowledgment and Agreement,
(i) the Signatory represents and warrants to the Purchaser that the Signatory
has not sold, transferred, conveyed, assigned, pledged, deposited or otherwise
disposed of any portion of the Units, (ii) the Signatory has caused a diligent
search of its records to be taken and has been unable to locate the original
certificate, (iii) if the Signatory shall find or recover the original
certificate evidencing the Units, the Signatory will immediately and without
consideration surrender it to the Purchaser; and (iv) the Signatory 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.
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<PAGE> 4
INSTRUCTIONS FOR COMPLETING THE ACKNOWLEDGMENT AND AGREEMENT
1. REQUIREMENTS OF TENDER. To be effective, a duly completed and signed
Acknowledgment and Agreement (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
Acknowledgment and Agreement and any other required documents, it is
suggested that you use overnight courier delivery or, if the Acknowledgment
and Agreement and any other required documents are to be delivered by
United States mail, that you use certified or registered mail, return
receipt requested.
Our records indicate that you own the number of Units set forth in Box
2 entitled "Description of Units Tendered" on the Acknowledgment and
Agreement under the column entitled "Name(s), Address(es), Number of
Units Owned and Tax Identification Number of Registered Holder(s)." If
you would like to tender only a portion of your Units, please so
indicate in the space provided in the box.
THE METHOD OF DELIVERY OF THE ACKNOWLEDGMENT AND AGREEMENT 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 the Letter of
Transmittal and completing the Acknowledgment and Agreement, to tender
Units, unitholders must sign at the "X" in the Signature Box of the
Acknowledgment and Agreement. The signature(s) must correspond exactly with
the names printed (or corrected) on the front of the Acknowledgment and
Agreement. NO SIGNATURE GUARANTEE ON THE ACKNOWLEDGMENT AND AGREEMENT IS
REQUIRED IF THE ACKNOWLEDGMENT AND AGREEMENT IS SIGNED BY THE UNITHOLDER
(OR BENEFICIAL OWNER IN THE CASE OF AN IRA). If any tendered Units are
registered in the names of two or more joint owners, all such owners must
sign the Acknowledgment and Agreement.
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, no signature guarantee is required if
Units are tendered for the account of a bank, broker, dealer, credit union,
savings association, or other entity which is a member in good standing of
the Securities Agents Medallion Program or a bank, broker, dealer, credit
union, savings association, or other entity which is an "eligible guarantor
institution" as the term is defined in Rule 17Ad-15 under the Securities
Exchange Act of 1934 (each an "Eligible Institution").
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 Box 3 in the Acknowledgment and
Agreement. If the Acknowledgment and Agreement 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 Acknowledgment and Agreement, 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
(a) a copy of applicable provisions
of the
II-4
<PAGE> 5
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.
Partnerships 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. 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 6 and Box 7 of the Acknowledgment
and Agreement. By signing the Signature Box, the unitholder(s) certifies
that the TIN as printed (or corrected) on Acknowledgment and Agreement in
the box entitled "Description of Units Tendered" and the representations
made in Box 6 and Box 7 of the Acknowledgment and Agreement 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 6
and Box 7 of the Acknowledgment and Agreement.
BOX 6 - SUBSTITUTE FORM W-9.
Part (i), Taxpayer Identification Number -- Tendering unitholders must certify
to the Purchaser that the TIN as printed (or corrected) on the Acknowledgment
and Agreement 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.
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.
By signing the Signature Box, the unitholder(s) certifies that the TIN as
printed (or corrected) on the front of the Acknowledgment and Agreement is
correct.
BOX 7 - 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 claimed from the IRS.
II-5
<PAGE> 6
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 submit a statement, signed under
penalties of perjury, attesting to that individual's exempt status. Forms for
such statements can be obtained from the Information Agent.
5. VALIDITY OF ACKNOWLEDGMENT AND AGREEMENT. All questions as to the validity,
form, eligibility (including time of receipt) and acceptance of an
Acknowledgment and Agreement 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 the Acknowledgment and Agreement)
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. The Acknowledgment and
Agreement 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 an Acknowledgment and Agreement and will
incur no liability for failure to give such notification.
6. 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.
7. 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.
8. 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 Acknowledgment and Agreement or if consideration is to be sent to
someone other than such signer or to an address other than that set forth
on the Acknowledgment and Agreement in the box entitled "Description of
Units Tendered," the appropriate boxes on the Acknowledgment and Agreement
must be completed.
II-6
<PAGE> 7
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER -- Social Security numbers have nine digits separated by two hyphens:
i.e., 000-00-0000. Employer identification numbers have nine digits separated by
only one hyphen: i.e., 00-0000000. The table below will help determine the
number to give the payer.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
GIVE THE TAXPAYER IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF --
- ------------------------------------------------------------------------------------------------------------------
<S> <C>
1. An individual account The individual
2. Two or more individuals (joint account) The actual owner of the account or, if
combined Funds, the first individual on
the account
3. Husband and wife (joint account) The actual owner of the account or, if joint
funds, Either person
4. Custodian account of a minor (Uniform Gift The minor(2)
to Minors Act)
5. Adult and minor (joint account) The adult or, if the minor is the only contributor,
the minor(1)
6. Account in the name of guardian or The ward, minor or incompetent person(3)
committee for a designated ward, minor or
incompetent person(3)
7.a. The usual revocable savings trust 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 The organization
organization account
12. Partnership account held in the name of the The partnership
business
13. Association, club, or other tax-exempt The organization
organization
14. A broker or registered nominee The broker or nominee
</TABLE>
II-7
<PAGE> 8
<TABLE>
<S> <C>
15. Account with the Department of Agriculture The public entity
in the name of a public entity (such as a
State or local government, school district,
or prison) that receives agricultural program
payments
- ------------------------------------------------------------------------------------------------------------------
</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.
- 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.
II-8
<PAGE> 9
- 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.
II-9
<PAGE> 1
ACKNOWLEDGMENT AND AGREEMENT
TO TENDER UNITS OF LIMITED PARTNERSHIP IN
RIVERSIDE PARK ASSOCIATES LIMITED PARTNERSHIP (THE "PARTNERSHIP")
PURSUANT TO AN OFFER TO PURCHASE
dated May 15, 2000 (the "Offer Date")
by
AIMCO PROPERTIES, L.P.
-------------------------------------------------------------
FOR INFORMATION OR ASSISTANCE IN CONNECTION WITH THE OFFER OR THE COMPLETION OF
THIS ACKNOWLEDGMENT AND AGREEMENT, PLEASE CONTACT THE INFORMATION AGENT AT (888)
349-2005 (TOLL FREE).
-------------------------------------------------------------
WHEN COMPLETING THIS ACKNOWLEDGMENT AND AGREEMENT, PLEASE
REFER TO THE INSTRUCTIONS SET FORTH ON THE LAST PAGE OF THIS
ACKNOWLEDGMENT AND AGREEMENT.
The undersigned hereby agrees as set forth under "ACKNOWLEDGMENT AND AGREEMENT"
below.
================================================================================
1 SIGNATURE BOX
(SEE INSTRUCTION 2 IN THE LETTER OF TRANSMITTAL)
================================================================================
Please sign exactly as your name is printed in Box 2 below. For joint
owners, each joint owner must sign. (See Instruction 2 in the Letter of
Transmittal).
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):
--------------------------------------------
================================================================================
================================================================================
2 DESCRIPTION OF UNITS TENDERED
================================================================================
Name(s), Address(es), Number of Units Owned and Tax Identification Number
of Registered Holder(s). (Please indicate changes or corrections to the name,
address, number of units owned and tax identification number printed below.)
Total Number of Units Tendered (#)
- ---------------------------------------
[ ] Check box if the units have been tendered in another tender offer.
================================================================================
1
<PAGE> 2
================================================================================
3 SIGNATURE GUARANTEE (IF REQUIRED)
(SEE INSTRUCTION 2 IN THE LETTER OF TRANSMITTAL)
================================================================================
YOU DO NOT NEED TO HAVE YOUR SIGNATURE GUARANTEED UNLESS YOU ARE A TRUSTEE,
EXECUTOR, ADMINISTRATOR, GUARDIAN, ATTORNEY-IN-FACT, OFFICER OF A CORPORATION OR
OTHER PERSON ACTING IN A FIDUCIARY OR REPRESENTATIVE CAPACITY.
Name and Address of Eligible Institution:
----------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Authorized Signature: X
----------------------------------------------------
Name:
----------------------------------------------------------------------
Title: Date:
-------------------------------------------- -------------------
================================================================================
================================================================================
4 SPECIAL PAYMENT INSTRUCTIONS (SEE INSTRUCTIONS 2, 7 AND 8 IN THE LETTER
OF TRANSMITTAL)
- --------------------------------------------------------------------------------
To be completed ONLY if the consideration for the purchase price of Units
accepted for payment is to be issued in the name of someone other than the
Signatory. Issue consideration to:
Name
------------------------------------------------------------------
(Please Type or Print)
Address
----------------------------------------------------------------
- -----------------------------------------------------------------------
(Include Zip Code)
- -----------------------------------------------------------------------
(TAX IDENTIFICATION OR SOCIAL SECURITY NO.)
(See Substitute Form W-9 below)
===============================================================================
===============================================================================
5 SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 2, 7 AND 8 IN
THE LETTER OF TRANSMITTAL)
- --------------------------------------------------------------------------------
To be completed ONLY if the consideration for the purchase price of Units
accepted for payment is to be sent to someone other than the Signatory or to the
Signatory at an address other than that shown in Box 2 above.
Mail consideration to:
Name
-------------------------------------------------------------------
(Please Type or Print)
Address
----------------------------------------------------------------
- ------------------------------------------------------------------------
(Include Zip Code)
================================================================================
================================================================================
6 SUBSTITUTE FORM W-9
(SEE INSTRUCTION 4 - BOX 6 OF THE LETTER OF TRANSMITTAL)
- --------------------------------------------------------------------------------
[ ] Under penalties of perjury, the Signatory certifies that: (1) the
number shown on this form is the unitholder's correct Taxpayer Identification
No. ("TIN") or the unitholder has applied for a TIN; and (2) the unitholder is
not subject to backup withholding either because the unitholder : (a) is exempt
for backup withholding; (b) has not been notified by the Internal Revenue
Service ("IRS") that the unitholder is subject to back-up withholding as a
result of 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.
Certification Instructions - You must cross out item (2) in the paragraph
above if you have been notified by the IRS that you are subject to back-up
withholding because of underreporting interest or dividends on your tax return.
However, if after being notified by the IRS that you were subject to back-up
withholding you received another notification from the IRS that you are no
longer subject to back-up withholding, do not cross out item (2).
Please check this box [ ] 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).
================================================================================
2
<PAGE> 3
================================================================================
7 FIRPTA AFFIDAVIT
(SEE INSTRUCTION 4 - BOX 7 OF THE LETTER OF TRANSMITTAL)
- --------------------------------------------------------------------------------
Section 1445(e)(5) of the Internal Revenue Code and Treas.
Reg.1.1445-11T(d) provide that a transferee of the U.S. real property interest
must withhold tax equal to 10% of the amount realized if the transferor is a
foreign person. To inform the Purchaser that withholding of tax is not required
upon this disposition of a U.S. real property interest, the undersigned hereby
certifies the following under penalties of perjury: (i) 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 this Acknowledgment and Agreement; and (iii) the unitholder's
home address (for individuals), or office address (for non-individuals), is
correctly printed (or corrected) on the front of this Acknowledgment and
Agreement. The person signing this Acknowledgment and Agreement 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.
[ ] Please check this box if the withholding of tax is required because the
unitholder does not satisfy all of the above conditions.
================================================================================
ACKNOWLEDGMENT AND AGREEMENT. The signatory hereto (the "Signatory") hereby
acknowledges that he or she has received and reviewed (i) the Purchaser's Offer
to Purchase, dated the Offer Date (as supplemented or amended from time to time,
the "Offer to Purchase") relating to the offer by AIMCO Properties, L.P. (the
"Purchaser") to purchase limited partnership interests in the Partnership, (ii)
the Letter of Transmittal attached as Annex III thereto (the "Letter of
Transmittal"), (iii) this Acknowledgment and Agreement, and (iv) the
Instructions hereto in the Letter of Transmittal, as each may be supplemented or
amended from time to time, and whose terms and conditions are incorporated by
reference herein (collectively, the "Offer"). Capitalized terms used herein but
not otherwise defined herein shall have the meanings ascribed thereto in the
Offer to Purchase. The Signatory hereby understands and agrees that the Letter
of Transmittal is hereby incorporated by reference herein and is hereby made a
part hereof.
The Signatory hereby makes the representations, warranties, and covenants,
and agrees to the terms and conditions, in each case set forth in the Letter of
Transmittal, and hereby tenders to the Purchaser the units set forth in the box
entitled "Description of Units Tendered" herein, including all interests in any
limited partnership represented by such units (collectively, the "Units"), on
the terms and conditions set forth in the Offer, and certifies under penalties
of perjury that the statements in Box 6 and Box 7 herein are true.
The Signatory 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 Signatory 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
on any matter submitted for the consent or approval of holders of 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
Signatory 's agent) of the offer price pursuant to the terms of the Offer, to
become a substitute limited partner, to receive any and all distributions made
by the Partnership to which the Purchaser is entitled pursuant to the terms 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
shall be effective upon the purchase of the Units by the Purchaser as provided
in the Offer and shall be irrevocable for a period of the lesser of (i) five
years following the termination of the Offer, or (ii) the maximum period
permitted by applicable law. Upon the purchase of Units pursuant to the Offer,
all prior proxies and consents given by the Signatory 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
Signatory 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 Units to the Purchaser (or its designee)
and to admit the Purchaser as a substitute limited partner in the Partnership
under the terms of the certificate and agreement of partnership of the
Partnership; (ii) empowers the Purchaser and its agent to execute and deliver to
each general partner a change of address form instructing the general partner to
send any and all future distributions to the address specified in the form, and
to endorse any check payable to or upon the order of such unitholder
representing a distribution to which the Purchaser is entitled pursuant to the
terms of the Offer, in each case in the name and on behalf of the tendering
unitholder; (iii) agrees not to exercise any rights pertaining to the Units
without the prior consent of the Purchaser; and (iv) requests and consents to
the transfer of the Units, to be effective on the books and records of the
Partnership as of the effective date set forth in the Offer.
In addition, the Signatory irrevocably constitutes and appoints the
Purchaser and any designees of the Purchaser as the true and lawful agent and
attorney-in-fact of the Signatory with respect to such Units, with full power of
substitution (such power of
3
<PAGE> 4
attorney being deemed to be an irrevocable power coupled with an interest), to
withdraw any or all of such Units that have been previously tendered in response
to any tender or exchange offer provided that the price per unit being offered
by the Purchaser is equal to or higher than the price per unit being offered in
the other tender or exchange offer. This appointment is effective immediately
and shall continue to be effective unless and until such Units are withdrawn
from the offer by the Signatory prior to the expiration date (as defined in the
Offer to Purchase).
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the Signatory, and any obligations of the Signatory shall
be binding upon the heirs, personal representatives, trustees in bankruptcy,
legal representatives, and successors and assigns of the Signatory.
4
<PAGE> 5
INSTRUCTIONS
(THESE INSTRUCTIONS APPLY IF YOU DESIRE TO PARTICIPATE IN THE OFFER)
For complete instructions on completing this Acknowledgement and Agreement,
please refer to the Letter of Transmittal (Annex III in the Offer to Purchase).
IMPORTANT:
1. ALL registered owners must sign at the X in Box 1.
2. When signing as a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation, or in another fiduciary or
representative capacity, please indicate your title in Box 1, submit proper
evidence of your authority to so act, and provide a signature guarantee in
Box 3.
3. Please confirm that your name, address and tax identification number are
correct in Box 2. If there is no label in Box 2, you must fill in this
information.
4. Box 4 is to be used only if payment is to be made to someone other than the
signer.
5. Box 5 is to be used only if payment is to be mailed to someone other than
the signer or the signer at a different address from that in Box 2.
6. Please review Box 6 and Box 7. Crossing out item 2 in Box 6 and/or checking
the box in Box 7 may result in the withholding of a substantial portion of
the proceeds payable to you.
7. Please return all pages of this Acknowledgment and Agreement (along with
all other required documentation) to the Information Agent at one of its
addresses below. A postage-paid envelope is enclosed for your convenience.
FOR INFORMATION OR ASSISTANCE IN CONNECTION WITH THE OFFER OR THE COMPLETION OF
THIS ACKNOWLEDGMENT AND AGREEMENT, PLEASE CONTACT THE INFORMATION AGENT AT (888)
349-2005 (TOLL FREE).
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>
5
<PAGE> 1
Page 1
IMPORTANT - TENDER OFFER
AIMCO
AIMCO PROPERTIES, L.P.
c/o River Oaks Partnership Services, Inc.
P.O. Box 2065
S. Hackensack, N.J., 07606-2065
(888) 349-2005
May 15, 2000
Dear Limited Partner:
We are pleased to announce that we are offering to purchase units in
your partnership, Riverside Park Associates Limited Partnership, for $35,686 per
unit, pursuant to the enclosed Offer to Purchase. 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 $35,686
in cash, in which case you may recognize a gain or loss for federal
income tax purposes.
2. You may retain any or all of your units. If you choose to
retain any or all of your units, your rights as a holder of units will
remain unchanged. You will continue to participate in gains and losses
of your partnership(s), and you will receive distributions, if any,
payable in respect of your units.
The offer is scheduled to expire on June 13, 2000, unless otherwise
extended.
We are offering to purchase any and all units in your partnership,
subject to the terms of the offer. Our offer is not subject to any minimum
number of units being tendered. You will not be required to pay any partnership
transfer fees in connection with any disposition of your units pursuant to our
offer. Our offer price will be reduced for any distributions subsequently made
by your partnership prior to the expiration of our offer.
<PAGE> 2
May 15, 2000
Page 2
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, which you should read carefully. These documents describe the
material risks and opportunities associated with the offer, including certain
tax considerations. The general partner of your partnership is remaining neutral
and makes no recommendation as to whether you should tender or refrain from
tendering your units in any offer. Although the general partner believes our
offer is fair, the general partner also believes that you must make your own
decision whether or not to participate in any offer, based upon a number of
factors, including several factors that may be personal to you, such as your
financial position, your need or desire for liquidity, your preferences
regarding the timing of when you might wish to sell your units, other financial
opportunities available to you, and your tax position and the tax consequences
to you of selling your units. The general partner is our affiliate. LIMITED
PARTNERS ARE URGED TO READ OUR OFFER TO PURCHASE AND THE RELATED MATERIALS
CAREFULLY AND IN THEIR ENTIRETY BEFORE DECIDING WHETHER TO TENDER THEIR UNITS.
You should be aware, however, that, as with any rational investment
decision, we are making our offer with a view to making a profit.
If you desire to tender any of your units in response to our offer, you
should complete and sign the enclosed yellow acknowledgment and agreement in
accordance with the enclosed instructions and mail or deliver the signed yellow
acknowledgment and agreement 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 13, 2000, unless extended. If you have any 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
AIMCO Properties, L.P., AIMCO-GP, Inc. and Apartment Investment and
Management Company agree that the Amendment No. 5 to Schedule 13D to which this
agreement is attached as an exhibit, and all further amendments thereto, and all
filings under Schedule TO to which this agreement is attached as an exhibit, and
all further amendments thereto, shall be filed on behalf of each of them. This
agreement is intended to satisfy the requirements the requirements of Rule 13d-
1(f)(1)(iii) under the Securities Exchange Act of 1934, as amended.
Dated: May 15, 2000
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
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