SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO
1(a) AND AMENDMENTS THERETO FILED PURSUANT TO 13d-2(a)
(Amendment No. )*
Insignia Financial Group, Inc.
(Name of Issuer)
Common Stock, $.01 par value
(Title of Class and Securities)
457956 20 9
(CUSIP Number)
Terry Considine Copy to:
Apartment Investment and Patrick J. Foye, Esq.
Management Company Skadden, Arps et al.
1873 South Bellaire Street 919 Third Avenue
17th Floor New York, New York 10022
Denver, Colorado 80222 (212) 735-2274
(303) 757-8101
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
March 17, 1998
(Date of Event which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the
following box: ( )
- -------------------------
* The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to the subject
class of securities, and for any subsequent amendment containing
information which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall
not be deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 or otherwise subject to the liabilities of that
section of the Act but shall be subject to all other provisions of the Act
(however, see the Notes).
CUSIP No. 457956 20 9 13D
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(1) NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY)
Apartment Investment and Management Company
I.R.S. # 84-1259577
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(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) ( )
(b) ( )
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(3) SEC USE ONLY
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(4) SOURCE OF FUNDS*
WC
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(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) ( )
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(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Maryland
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(7) SOLE VOTING POWER
4,415,737(1)
NUMBER OF SHARES ----------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY 4,415,737(2)
EACH ----------------------------------------------
REPORTING (9) SOLE DISPOSITIVE POWER
PERSON 4,415,737(3)
WITH ----------------------------------------------
(10) SHARED DISPOSITIVE POWER
0
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(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,415,737
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(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* ( )
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(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13.4%
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(14) TYPE OF REPORTING PERSON*
CO
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1 The shares of Issuer common stock (the "Shares") covered by (7) of the
cover page this Schedule 13D are purchasable by AIMCO upon exercise of
Call Options granted to AIMCO as of March 17, 1998, or upon exercise of
Put Options granted to certain stockholders of the Issuer by AIMCO as of
March 17, 1998, and described in Item 4 of this Schedule 13D. Prior to
the exercise of the Call Options or the Put Options, AIMCO is not
entitled to any rights as a stockholder of Issuer as to the Shares
covered by the Call Options or the Put Options, except for the limited
voting rights granted to AIMCO pursuant to the Voting Agreements and the
Irrevocable Proxies, as described in Item 4. The Call Options or the Put
Options may only be exercised upon the happening of certain events
referred to in Item 4, none of which has occurred as of the date hereof.
AIMCO expressly disclaims beneficial ownership (except for the limited
voting rights granted to AIMCO pursuant to the Voting Agreements and the
Irrevocable Proxies) of any of the Shares which are purchasable by AIMCO
upon exercise of the Call Options or the Put Options until such time as
AIMCO purchases such Shares upon any such exercise.
2 The shares of Issuer common stock covered by (8) of the cover page of
this Schedule 13D are subject to the limited voting rights granted to
AIMCO pursuant to Voting Agreements with certain stockholders of the
Issuer, and Irrevocable Proxies executed by such stockholders of the
Issuer in favor of AIMCO, as described in Item 4 of this Schedule 13D.
3 See footnote (1) above.
4 After giving effect to the exercise of all of the Call Options or all of
the Put Options as described herein.
ITEM 1: SECURITY AND ISSUER
This Schedule 13D relates to the Class A Common Stock, $.01 par
value per share (the "Shares"), of Insignia Financial Group,
Inc. (the "Issuer") which has its principal executive office at
One Insignia Financial Plaza, P.O. Box 1089, Greenville, South
Carolina 29602.
ITEM 2: IDENTITY AND BACKGROUND
This Schedule 13D is being filed by Apartment Investment and
Management Company, a Maryland corporation ("AIMCO"). The
executive office of AIMCO is 1873 South Bellaire Street, 17th
Floor, Denver, Colorado 80222. The principal business of AIMCO
is to own and operate multi-family residential properties.
Certain information concerning the directors and executive
officers of AIMCO is set forth in Schedule I hereto.
(a-c) Not applicable.
(d) AND (e) To the best knowledge of AIMCO, none of the persons
listed in Schedule I hereto have, during the last five years
(i) been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors), or (ii) been 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
future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any
violation with respect to such laws.
(f) Not applicable.
ITEM 3: SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
The Call Options (as defined in Item 4 below) to acquire Shares
were granted to AIMCO as an inducement to AIMCO's entering
into an agreement and plan of merger (the "Merger Agreement"),
dated as of March 17, 1998, by and among AIMCO, the Issuer,
AIMCO Properties, L.P., a Delaware limited partnership, and
Insignia/ESG, Inc., a Delaware corporation, providing for the
merger (the "Merger") of the Issuer with and into AIMCO, with
AIMCO being the surviving corporation. The Merger Agreement
provides that prior to the Merger, the Issuer will spin off
(the "Spin Off") to its stockholders all of the common stock of
Insignia/ESG, Inc., an entity to which the Issuer will transfer
all of its assets unrelated to its multifamily apartment
business, as well as its multifamily apartment business located
in the New York metropolitan area. Pursuant to the Merger, each
outstanding Share will be converted into the right to receive,
in the aggregate, approximately $303 million in Series E
Preferred Stock, par value $0.01 per share, of AIMCO (the
"Series E Preferred Stock"). In addition to receiving the same
dividend as holders of shares of common stock, $0.01 par value
per share, of AIMCO (the "AIMCO Shares"), holders of Series E
Preferred Stock are entitled to a preferred dividend of, in the
aggregate, $50 million; when such preferred dividends is paid,
each share of Series E Preferred Stock will automatically
convert into one AIMCO Share. In addition, AIMCO will assume
approximately $308 million in outstanding indebtedness of the
Issuer, and approximately $150 million of 6 1/2% Trust
Convertible Preferred Securities of Insignia Financing I, a
Delaware business trust controlled by the Issuer. Furthermore,
the Merger Agreement provides that following consummation of
the Merger, AIMCO is required to offer to purchase the
outstanding shares of beneficial interest (the "IPT Shares") in
Insignia Properties Trust, a Maryland real estate investment
trust ("IPT"), not owned by the Issuer, at a price of at least
$13.25 per IPT Share. 75% of the outstanding IPT Shares are
owned by the Issuer, and, assuming a price of $13.25 per IPT
Share, the remaining outstanding IPT Shares are valued at an
aggregate price of approximately $100 million.
If the stockholders of AIMCO do not approve the Merger, the
Merger Agreement provides that AIMCO will issue to holders of
Shares, in the aggregate, approximately $203 million in Series
E Preferred Stock and $100 million in Series F Preferred Stock,
par value $0.01 per share, of AIMCO (the "Series F Preferred
Stock"). Holders of Series F Preferred Stock are entitled to
receive the same dividends as holders of AIMCO Shares, as well
as preferred distributions of 10% of the face value of such
Series F Preferred Stock, with the preferred return rate
escalating by 1% each year until a 15% annual return is
achieved. Upon the approval of stockholders of AIMCO, each
share of Series F Preferred Stock will convert into a share of
Series E Preferred Stock.
The Merger is subject to the approval of the Issuer's
stockholders, regulatory approvals, and the satisfaction or
waiver of various other conditions. None of the Call Option
Triggering Events (as defined in Item 4 below) permitting the
exercise of the Call Options, or the Put Option Triggering
Events (as defined in Item 4 below) permitting the exercise of
the Put Options, has occurred as of the date hereof. In the
event that the Call Options become exercisable and AIMCO wishes
to purchase the Shares subject thereto, or in the event that
the Put Options become exercisable and one or more of the
Stockholders exercise their Put Options, AIMCO anticipates that
it would fund the purchase of such Shares with working capital
or through other financing sources available to AIMCO at the
time of exercise.
ITEM 4: PURPOSE OF TRANSACTION
As an inducement to AIMCO to enter into the Merger Agreement,
each of Andrew L. Farkas, Ronald Uretta, James A. Aston, Frank
M. Garrison, Metropolitan Acquisition Partners IV, L.P.,
Metropolitan Acquisition Partners V, L.P. and the Andrew Farkas
Trust U/A dated February 25, 1998 (each a "Stockholder" and
collectively, the "Stockholders") has entered into a call
option, put option and purchase price adjustment agreement with
AIMCO, each dated as of March 17, 1998 (each an "Option
Agreement"), whereby each Stockholder granted to AIMCO an
option (each a "Call Option") to purchase, under certain
circumstances described below, 45% of the Shares owned by such
Stockholder, and 45% of the Shares issuable upon the exercise
of any options and/or warrants to purchase Shares
(collectively, the "Convertible Shares") that have vested at
the time of a Call Option Triggering Event (as defined below)
owned by such Stockholder (or 100% of such shares, and such
Convertible Shares, if the Spin Off has previously occurred or
the Merger Agreement has been terminated under certain
circumstances described in the Merger Agreement), at a price of
$25.00 per Share, or $11.00 per Share in the event that the
Spin Off has occurred, subject to adjustment in the event that
AIMCO increases the consideration it would pay in the Merger.
Each Option Agreement requires AIMCO, in the event that it
chooses to exercise its Call Option pursuant to such Option
Agreement, to exercise all Call Options granted to it pursuant
to all seven Call Option Agreements. After receiving notice
from AIMCO concerning the exercise of its Call Option, each
Stockholder is required to exercise his or its vested options
and warrants and acquire the Shares underlying such options and
warrants. The Option Agreement requires AIMCO to loan to the
Stockholders the money needed to exercise such options and
warrants. As of March 20, 1998, 4,415,737 Shares were, in the
aggregate, subject to the Call Option provisions of the Option
Agreements. Based on the number of Shares outstanding on March
20, 1998, all of the Call Options would be exercisable for
approximately 13.4% of the Shares then outstanding.
AIMCO may exercise each Call Option, in whole or in part,
following the happening of certain events (each a "Call Option
Triggering Event"), provided that AIMCO provide notice of the
exercise of the Call Options in accordance with the Option
Agreements. After receiving notice from AIMCO concerning the
exercise of its Call Option, each Stockholder is required to
exercise his or its vested options and warrants and acquire the
Shares underlying such options and warrants. The Option
Agreement requires AIMCO to loan to the Stockholders the money
needed to exercise such options and warrants. A Call Option
Triggering Event is deemed to have occurred in the event that
the Merger Agreement is terminated due to (a) failure of any
waiting period under the Hart-Scott- Rodino Antitrust
Improvements Act of 1976 applicable to the Merger to have
expired or terminated, (b) any permanent injunction or other
order by any federal or state court preventing consummation of
the Merger or (c)(i) the Issuer validly terminating the Merger
Agreement pursuant to Section 9.1(b)(i) thereof and (ii) the
absence of a right by AIMCO to validly terminate the Merger
Agreement pursuant to Section 9.1(b)(i) thereof. Each Option
Agreement provides that the Call Option will terminate upon the
Termination Date. "Termination Date" means the earlier to occur
of (i) the time immediately prior to the Effective Time (as
defined in the Merger Agreement), and (ii) five business days
after the occurrence of a Call Option Trigger Event, Put Option
Trigger Event or a Price Protection Trigger Event (as defined
in the Merger Agreement), provided that if AIMCO or the
Stockholder, as the case may be, provides written notice to the
other party of its wish to exercise the Call Option, in the
case of AIMCO, or the Price Protection Right or the Put Option,
in the case of the Stockholder, then ten business days after
the earliest of (a) delivery of the written notice, if any,
exercising the Call Option, (b) delivery of the written notice,
if any, exercising the Price Protection Right, if there has
been no Call Option Trigger Event or if no exercise of the Call
Option has been delivered, (c) delivery of the written notice,
if any, exercising the Put Option and (d) the satisfaction or
waiver of the applicable conditions set forth in the first
paragraph of Section 3 of such Option Agreement.
Pursuant to the terms of the Option Agreements, AIMCO granted
the Stockholders options to sell (each a "Put Option") to
AIMCO, under certain circumstances described below, all of the
Shares and Convertible Shares owned by such Stockholder, all at
a price of $25.00 per Share, or $11.00 per Share in the event
that the Spin Off has occurred, subject to adjustment as
provided in each such Option Agreement. As of March 20, 1998,
4,415,737 Shares in the aggregate were subject to the Put
Option provisions of the Option Agreements. Based on the number
of Shares outstanding on March 20, 1998, all of the Put Options
would be exercisable for approximately 13.4% of the Shares then
outstanding.
Each Stockholder may exercise its Put Option, in whole or in
part, following the happening of certain events (each a "Put
Option Triggering Event"), provided that such Stockholder
provide notice of the exercise of his or its Put Option in
accordance with his or its Option Agreement. A Put Option
Triggering Event is deemed to have occurred in the event that
the Merger Agreement has been validly terminated by the Issuer
pursuant to Section 9.1(b)(i) thereof, but if, and only if,
AIMCO did not have the right to validly terminate the Merger
Agreement pursuant to Section 9.1(b)(i) thereof on the date of
such termination. Each Option Agreement provides that the Put
Option will terminate upon the Termination Date.
Pursuant to the Option Agreements, each Stockholder agreed not
to transfer, pledge, hypothecate, sell, exchange or offer to
transfer or sell or otherwise dispose of or encumber or grant
any proxy or consent with respect to any of his or its Shares
or Convertible Shares at any time prior to the Termination
Date, except that each Stockholder may execute a Voting
Agreement (as defined below) and an Irrevocable Proxy (as
defined below) as contemplated by the Merger Agreement, sell
options and/or warrants for Convertible Shares to the Issuer
after the Spin Off and prior to the consummation of the Merger
or pledge all or part of the Shares to a bona fide financial
institution which agrees in writing to be bound by such
Stockholder's Option Agreement. Each Stockholder further agreed
that prior to the Closing (as defined in the Merger Agreement)
such Stockholder would retain record (to the extent he or it
possesses record ownership as of March 17, 1998) and beneficial
ownership of all of such Stockholder's Shares and, except for
the sale of options and/or warrants for Convertible Shares to
the Issuer after the Spin Off and prior to the consummation of
the Merger, such Stockholder's options and/or warrants for
Convertible Shares.
The description contained in this Item 4 of the transactions
contemplated by the Option Agreements is qualified in its
entirety by reference to the full text of the Option Agreements
which are incorporated by reference herein. A form of the
Option Agreements is filed as Exhibit 1 hereto.
As a further inducement to AIMCO entering into the Merger
Agreement, each Stockholder agreed to enter into a voting
agreement with AIMCO (each a "Voting Agreement"), whereby each
such Stockholder agreed to vote all Shares owned by such
Stockholder in favor of the Merger Agreement and all
transactions contemplated thereby, and against any proposals by
entities unaffiliated with AIMCO to (i) acquire at least 20% of
the outstanding equity securities of the Issuer or IPT, (ii)
acquire in any manner all or substantially all of the assets of
the Issuer or IPT, or (iii) enter into a merger, consolida
tion, share exchange or other business combination or spin off
or similar distribution involving the Issuer or IPT. In
connection with the Voting Agreements, each Stockholder also
delivered to AIMCO an irrevocable proxy (each an "Irrevocable
Proxy") empowering representatives of AIMCO to exercise all
voting rights related to the matters covered by such
Stockholder's Voting Agreement. The Voting Agreements and the
Irrevocable Proxies shall terminate upon termination of the
Option Agreements. As of March 20, 1998, 4,415,737 Shares in
the aggregate were subject to Voting Agreements. Based on the
number of Shares outstanding on March 20, 1998, 13.4% of the
outstanding Shares are subject to Voting Agreements.
The description contained in this Item 4 of the Voting
Agreements and Irrevocable Proxies is qualified in its entirety
by reference to the full text of the Voting Agreements and the
Irrevocable Proxies which are incorporated by reference herein.
A form of the Voting Agreements is filed as Exhibit 2 hereto,
and a form of the Irrevocable Proxies is filed as Exhibit 3
hereto.
(a)-(j) The Merger Agreement provides that prior to the Merger,
the Issuer will cause the occurrence of the Spin Off, which
would result in (a) the Issuer owning all assets related to its
multifamily apartment business (except for its multifamily
apartment business located in the New York metropolitan area),
and (b) Insignia/ESG, Inc. owning all assets unrelated to the
Issuer's multifamily apartment business, as well as the
Issuer's multifamily apartment business located in the New York
metropolitan area. Upon the consummation of the Merger, the
Issuer shall be merged with and into AIMCO, with AIMCO being
the surviving corporation, all Shares of the Issuer will be
canceled and retired and shall cease to exist, and all options
and warrants to purchase Shares shall be assumed by AIMCO and
will be converted into options and warrants to purchase AIMCO
Shares.
ITEM 5: INTEREST IN SECURITIES OF THE ISSUER
(a) As a result of the Voting Agreements and the Irrevocable
Proxies, AIMCO has shared power to vote an aggregate of
4,415,737 Shares, including Convertible Shares, for the limited
purposes described in Item 4 above, and such Shares constitute
approximately 13.4% of the issued and outstanding Shares as of
March 20, 1998.
The number of Shares covered by the Option Agreements,
including Convertible Shares, is equal to 4,415,737, which
constitutes 13.4% of the issued and outstanding Shares as of
March 20, 1998. Prior to the exercise of the Call Options by
AIMCO, or the Put Options by the Stockholders, AIMCO is not
entitled to any rights as a stockholder of Issuer with respect
to the Shares covered by the Option Agreements, except for
those limited voting rights granted to AIMCO by the
Stockholders pursuant to Voting Agreements and the Irrevocable
Proxies, because such options are exercisable only in the
limited circumstances referred to in Item 4 above.
To AIMCO's knowledge, no Shares are beneficially owned by any
of the persons named in Schedule I hereto.
(b) Schedule II sets forth the persons, and their Shares
subject to Option Agreements, Voting Agreements and Irrevocable
Proxies, with whom AIMCO shares the power to vote or to direct
the vote or to dispose or direct the disposition of the Shares
covered by this Schedule 13D.
Schedule III to this Schedule 13D sets forth the name, present
principal occupation or employment and business address of each
person with whom AIMCO shares the power to vote or to direct
the vote or to dispose or direct the disposition of the Shares
covered by this Schedule 13D.
During the past five years, to AIMCO's knowledge, no person
named in Schedule II to this Schedule 13D has been convicted in
a criminal proceeding (excluding traffic violations or similar
misdemeanors) and to AIMCO's knowledge, no person named in
Schedule II to this Schedule 13D has been a party to a civil
proceeding of a judicial or administrative body of competent
jurisdiction as a result of which such person was or is subject
to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activity subject to,
federal or state securities laws or finding any violation with
respect to such laws.
To AIMCO's knowledge, all persons named in Schedule II and
Schedule III to this Schedule 13D are United States citizens.
(c) Other than as set forth in this Item 5, to AIMCO's
knowledge as of the date hereof (i) neither AIMCO nor any
subsidiary or affiliate of AIMCO nor any of the persons listed
on Schedule I hereto, beneficially owns any Shares, and (ii)
there have been no transactions in the Shares effected during
the past 60 days by AIMCO, nor to the knowledge of AIMCO, by
any subsidiary or affiliate of AIMCO or any of the persons
listed on Schedule I hereto.
(d) No other person is known by AIMCO to have the right to
receive or the power to direct the receipt of dividends from,
or the proceeds from the sale of, the Shares obtainable by
AIMCO upon exercise of the Call Options or the Put Options.
(e) Not applicable.
ITEM 6: CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER
Other than as described herein, to AIMCO's knowledge, there are
no contracts, arrangements, understandings or relationships
(legal or otherwise) among the persons named in Item 2 and
between such persons and any person with respect to any
securities of the Issuer including but not limited to transfer
or voting of any of the securities, finder's fees, joint
ventures, loan or option agreements, puts or calls, guarantees
of profits, division of profits or loss, or the giving or
withholding of proxies.
ITEM 7: MATERIAL TO BE FILED AS EXHIBITS
Exhibit Description
- ------- -----------
1 Form of Call Option, Put Option and Purchase Price Adjustment
Agreement.
2 Form of Voting Agreement.
3 Form of Irrevocable Proxy.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete
and correct.
Dated: March 31, 1998 APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
By: /s/ Peter K. Kompaniez
-----------------------------------
Name: Peter K. Kompaniez
Title: President
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF AIMCO
1. DIRECTORS AND EXECUTIVE OFFICERS OF AIMCO. The names and
positions of the executive officers and directors of AIMCO are set forth
below. Unless otherwise indicated, the business address of each executive
officer and director is 1873 South Bellaire Street, 17th Floor, Denver,
Colorado 80222. Each executive officer and director is a citizen of the
United States of America.
NAME POSITION
Terry Considine Chairman of the Board of Directors and
Chief Executive Officer
Peter K. Kompaniez Vice Chairman, President and Director
Thomas W. Toomey Executive Vice President - Finance and Administration
Joel F. Bonder Executive Vice President and General Counsel
Robert Ty Howard Executive Vice President - Ancillary Services
Steven D. Ira Executive Vice President - START
David L. Williams Executive Vice President - Property Operations
Harry G. Alcock Senior Vice President - Acquisitions
Troy D. Butts Senior Vice President and Chief Financial Officer
Martha Carlin Senior Vice President - Ancillary Services
Joseph DeTuno Senior Vice President - Property Redevelopment
Jack W. Marquardt Senior Vice President - Accounting
Leeann Morein Senior Vice President - Investor Services and Secretary
David O'Leary Senior Vice President - Buyers Access
R. Scott Wesson Senior Vice President - Chief Information Officer
Patricia K. Heath Vice President and Chief Accounting Officer
Richard S. Ellwood Independent Director; Chairman, Audit Committee
J. Landis Martin Independent Director; Chairman, Compensation Committe
Thomas L. Rhodes Independent Director
John D. Smith Independent Director
2. BIOGRAPHICAL INFORMATION. The following is a biographical
summary of the experience of the current directors and executive officers
of AIMCO for the past five years or more.
NAME PRINCIPAL OCCUPATIONS FOR THE LAST FIVE YEARS
Terry Considine Mr. Considine has been Chairman of the Board
of Directors and Chief Executive Officer of
AIMCO since July 1994. From July 1994 to
July 1997, Mr. Considine also served as
President of AIMCO. He is the sole owner of
Considine Investment Co. and prior to July
1994 was owner of approximately 75% of
Property Asset Management, L.L.C., Limited
Liability Company, a Colorado limited
liability company, and its related entities
(collectively, "PAM"), one of AIMCO's
predecessors. On October 1, 1996, Mr.
Considine was appointed Co-Chairman and
director of Asset Investors Corp. and
Commercial Asset Investors, Inc., two other
public real estate investment trusts, and
appointed a director of Financial Assets
Management, LLC, a real estate investment
trust manager. Mr. Considine has been
involved as a principal in a variety of real
estate activities, including the acquisition,
renovation, development and disposition of
properties. Mr. Considine has also
controlled entities engaged in other
businesses such as television broadcasting,
gasoline distribution and environmental
laboratories. Mr. Considine received a B.A.
from Harvard College, a J.D. from Harvard Law
School and is admitted as a member of the
Massachusetts Bar. He served as a Colorado
State Senator from 1987-1992 and in 1992 was
the Republican nominee for election to the
United States Senate from Colorado.
Peter K. Kompaniez Mr. Kompaniez has been President of AIMCO since
July 1997, and Vice Chairman and a Director of
AIMCO since July 1994. Since September 1993
Mr. Kompaniez has owned 75% of PDI Realty
Enterprises, Inc., a Delaware corporation ("PDI"),
one of AIMCO's predecessors, and serves as its
President and Chief Executive Officer. From 1986
to 1993, he served as President and Chief
Executive Officer of Heron Financial Corporation
("HFC"), a United States holding company for Heron
International, N.V.'s real estate and related
assets. While at HFC, Mr. Kompaniez administered
the acquisition, development and disposition of
approximately 8,150 apartment units (including
6,217 units that have been acquired by the
Company) and 3.1 million square feet of commercial
real estate. Prior to joining HFC, Mr. Kompaniez
was a senior partner with the law firm of Loeb and
Loeb where he had extensive real estate and REIT
experience. Mr. Kompaniez received a B.A. from
Yale College and a J.D. from the University of
California (Boalt Hall).
Thomas W. Toomey Mr. Toomey was promoted to Executive Vice
President - Finance and Administration of AIMCO
in March 1997 and has served as Senior Vice
President - Finance and Administration since
January 1996. From 1990 until 1995, Mr. Toomey
served in a similar capacity with Lincoln Property
Company ("LPC") as well as Vice President/Senior
Controller and Director of Administrative Services
of Lincoln Property Services where he was
responsible for LPC's computer systems,
accounting, tax, treasury services and benefits
administration. From 1984 to 1990, he was an
audit manager with Arthur Andersen & Co. where he
served real estate and banking clients. From 1981
to 1983, Mr. Toomey was on the audit staff of
Kenneth Leventhal & Company. Mr. Toomey received
a B.S. in Business Administration/Finance from
Oregon State University and is a Certified Public
Accountant.
Joel F. Bonder Mr. Bonder was appointed Executive Vice President
and General Counsel of AIMCO effective December 8,
1997. Prior to joining AIMCO, Mr. Bonder served
as Senior Vice President and General Counsel of
NHP Partners, Inc. ("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 from 1986 to 1991. From 1983 to 1985,
Mr. Bonder was with the Washington, D.C. law
firm of Lane & Edson, P.C. From 1979 to 1983, Mr.
Bonder practiced with the Chicago law firm of Ross
and Hardies.
Robert Ty Howard Mr. Howard was appointed Executive Vice President
- Ancillary Services in February 1998. Prior to
joining AIMCO, Mr. Howard served as an officer and
director of four affiliated companies, Hecco
Ventures, Craig Corporation, Reading Company and
Decurion Corporation. Mr. Howard was responsible
for financing, mergers and acquisitions
activities, investments in commercial real estate,
both nationally and internationally, cinema
development and interest rate risk management.
From 1983 to 1988, he was employed by Spieker
Properties. Mr. Howard received a B.A. from
Amherst College, a J.D. from Harvard Law School
and an M.B.A. from Stanford University Graduate
School of Business.
Steven D. Ira Mr. Ira has served as Executive Vice President of
AIMCO since July 1994. From 1987 until July 1994,
he served as President of PAM. Prior to merging
his firm with PAM in 1987, Mr. Ira acquired
extensive experience in property management.
Between 1977 and 1981 he supervised the property
management of over 3,000 apartment and mobile home
units in Colorado, Michigan, Pennsylvania and
Florida, and in 1981 he joined with others to form
the property management firm of McDermott, Stein
and Ira. Mr. Ira served for several years on the
National Apartment Manager Accreditation Board and
is a former president of both the National
Apartment Association and the Colorado Apartment
Association. Mr. Ira is the sixth individual
elected to the Hall of Fame of the National
Apartment Association in its 54-year history. He
holds a Certified Apartment Property Supervisor
(CAPS) and a Certified Apartment Manager
designation from the National Apartment
Association, a Certified Property Manager (CPM)
designation from the National Institute of Real
Estate Management (IREM) and he is a member of the
Boards of Directors of the National Multi-Housing
Council, the National Apartment Association and
the Apartment Association of Metro Denver. Mr. Ira
received a B.S. from Metropolitan State College in
1975.
David L. Williams Mr. Williams has been Executive Vice President -
Property Operations of AIMCO since January 1997.
Prior to joining AIMCO, Mr. Williams was Senior
Vice President of Operations at Evans Withycombe
Residential, Inc. from January 1996 to January
1997. Previously, he was Executive Vice President
at Equity Residential Properties Trust from
October 1989 to December 1995. He has served on
National Multi-Housing Council Boards and NAREIT
committees. Mr. Williams also served as Senior
Vice President of Operations and Acquisitions of
US Shelter Corporation from 1983 to 1989. Mr.
Williams has been involved in the management,
development and acquisition of real estate
properties since 1973. Mr. Williams received his
B.A. in education and administration from the
University of Washington in 1967.
Harry G. Alcock Mr. Alcock has served as Vice President since
July 1996, and was promoted to Senior Vice
President - Acquisitions in October 1997,
with responsibility for acquisition and
financing activities since July 1994. From
June 1992 until July 1994, Mr. Alcock served
as Senior Financial Analyst for PDI and HFC.
From 1988 to 1992, Mr. Alcock worked for
Larwin Development Corp., a Los Angeles based
real estate developer, with responsibility
for raising debt and joint venture equity to
fund land acquisitions and development. From
1987 to 1988, Mr. Alcock worked for Ford
Aerospace Corp. He received his B.S. from
San Jose State University.
Troy D. Butts Mr. Butts has served as Senior Vice President and
Chief Financial Officer of AIMCO since November
1997. Prior to joining AIMCO, Mr. Butts served as
a Senior Manager in the audit practice of the Real
Estate Services Group for Arthur Andersen LLP in
Dallas, Texas. Mr. Butts was employed by Arthur
Andersen LLP for ten years and his clients were
primarily publicly-held real estate companies,
including office and multi-family real estate
investment trusts. Mr. Butts holds a Bachelor of
Business Administration degree in Accounting from
Angelo State University and is a Certified Public
Accountant.
Martha Carlin Ms. Carlin has served as Vice President since
September 1996 and was promoted to Senior Vice
President - Ancillary Services in December 1997.
From December 1995 until September 1996, Ms.
Carlin served as Chief Financial Officer for
Wentwood Investment Partners. Ms. Carlin was
employed by Arthur Andersen L.L.P. for six years,
with a primary focus in real estate. Ms. Carlin
was also employed by MCI Communications and
Lincoln Property Company. Ms. Carlin received a
B.S. from the University of Kentucky and is a
certified public accountant.
Joseph DeTuno Mr. DeTuno has been Senior Vice President -
Property Redevelopment of AIMCO since September
1997. Mr. DeTuno was president and founder of JD
Associates, his own full service real estate
consulting, advisory and project management
company which he founded in 1990. JD Associates
provided development management, financial
analysis, business plan preparation and
implementation services. Previously, Mr. DeTuno
served as President/Partner of Gulfstream
Commercial Properties, President and Co-managing
Partner of Criswell Development Company, Vice
President of Crow Hotel and Company and Project
Director with Perkins & Will Architects and
Planners. Mr. DeTuno received his B.A. in
architecture and is a registered architect in
Illinois and Texas.
Jack W. Marquardt Mr. Marquardt has been Senior Vice President -
Accounting of AIMCO since September 1997. Mr.
Marquardt brings over 17 years of real estate
accounting experience to AIMCO. From October 1992
through August 1997, Mr. Marquardt served as Vice
President/Corporate Controller and Manager of Data
Processing for Transwestern Property Company,
where he was responsible for corporate accounting,
tax, treasury services and computer systems. From
August 1986 through September 1992, Mr. Marquardt
worked in the real estate accounting area of Aetna
Realty Investors, Inc. serving as Regional
Controller from April 1990 through September 1992.
Mr. Marquardt received a B.S. in Business
Administration/Finance from Ohio State University.
Leeann Morein Ms. Morein has served as Senior Vice President -
Investor Services since November 1997. Ms. Morein
has served as Secretary of AIMCO since July 1994.
From July 1994 until October 1997 Ms. Morein also
served as Chief Financial Officer. From
September 1990 to March 1994, Ms. Morein served as
Chief Financial Officer of the real estate
subsidiaries of California Federal Bank, including
the general partner of CF Income Partners, L.P., a
publicly-traded master limited partnership. Ms.
Morein joined California Federal in September 1988
as Director of Real Estate Syndications Accounting
and became Vice President - Financial
Administration in January 1990. From 1983 to 1988,
Ms. Morein was Controller of Storage
Equities, Inc., a real estate investment trust,
and from 1981 to 1983, she was Director of
Corporate Accounting for Angeles Corporation, a
real estate syndication firm. Ms. Morein worked on
the audit staff of Price Waterhouse from 1979 to
1981. Ms. Morein received a B.A. from Pomona
College and is a Certified Public Accountant.
David O'Leary Mr. O'Leary has been President of Property
Services Group, Inc., an AIMCO subsidiary since
December 1997. Property Services Group, Inc.
administers the Buyers Access program. From 1993
until 1997, Mr. O'Leary served as Regional Vice
President and Senior Vice President for Property
Services Group, Inc., with responsibility for
program marketing and sales. From 1981 to 1993
Mr. O'Leary served as Vice President and Executive
Vice President for Commonwealth Pacific Inc., a
privately held real estate investment and
management firm based in Seattle, Washington.
During his tenure with Commonwealth Pacific, Inc.,
Mr. O'Leary was responsible for acquisitions,
dispositions, development, and asset management
from offices located in Houston and Dallas, Texas,
Atlanta, Georgia and Seattle, Washington. Mr.
O'Leary also served as Vice President for
Johnstown American Companies, directing
acquisition activities for the Northeast United
States. Mr. O'Leary received his B.A. Degree from
the University of Utah in 1979.
R. Scott Wesson Mr. Wesson has served as Senior Vice
President - Chief Information Officer of
AIMCO since July 1997. From 1994 until 1997,
Mr. Wesson served as Vice President of
Information Services at Lincoln Property
Company, where he was responsible for
information systems infrastructure,
technology planning and business process re-
engineering. From 1992 to 1994, Mr. Wesson
served in the role of Director of Network
Services for Lincoln Property Company, where
he was responsible for the design and
deployment of the company's Wide Area Network
and Local Area Networks, comprising over
2,500 workstations in over 40 locations
nationwide. From 1988 to 1992, he was a
systems consultant with Automatic Data
Processing involved in design, planning and
deployment of financial and human resources
systems for several major, multinational
organizations. From 1984 to 1987, he was a
Senior Analyst with Federated Department
Stores, Inc. involved in planning and
distribution. Mr. Wesson received his B.S.
from the University of Texas in 1984.
Patricia K. Heath Ms. Heath has served as Vice President and
Chief Accounting Officer of AIMCO since July
1994. From 1992 to July 1994, Ms. Heath served
as Manager of Accounting, then Chief Financial
Officer, of HFC, and effective September 1993,
as Chief Financial Officer of PDI. She had
responsibility for all internal and external
financial reporting, cash management and
budgeting for HFC, its subsidiaries, related
joint ventures and partnerships and for PDI.
Ms. Heath served as Controller for the real
estate investment, development and syndication
firms of Guilford Glazer & Associates from 1990
to 1992, Ginarra Holdings, Inc. from 1984 to
1990, and Fox & Carskadon Financial Corporation
from 1980 to 1983. Ms. Heath worked from 1978 to
1980 as an auditor with Deloitte, Haskins and
Sells. She received her B.S. in Business from
California State University at Chico and is a
Certified Public Accountant.
Richard S. Ellwood Mr. Ellwood was appointed a Director of AIMCO in
July 1994 and is currently Chairman of the Audit
Committee. Mr. Ellwood is the founder and
President of R.S. Ellwood & Co., Incorporated, a
real estate investment banking firm. Prior to
forming R.S. Ellwood & Co., Incorporated in 1987,
Mr. Ellwood had 31 years experience as an
investment banker, serving as: Managing Director
and senior banker at Merrill Lynch Capital Markets
from 1984 to 1987; Managing Director at Warburg
Paribas Becker from 1978 to 1984; general partner
and then Senior Vice President and a Director at
White, Weld & Co. from 1968 to 1978; and in
various capacities at J.P. Morgan & Co. from 1955
to 1968. Mr. Ellwood currently serves as a
Director of Corporate Realty Income Trust and
FelCor Suite Hotels, Inc. He is a registered
investment advisor.
J. Landis Martin Mr. Martin was appointed a Director of AIMCO
in July 1994 and became Chairman of the
Compensation Committee in March 1998. Mr. Martin
has served as President, Chief Executive Officer
and a Director of NL Industries, Inc., a
manufacturer of specialty chemicals, since
1987. Since 1988, he has served as the
President and Chief Executive Officer of
Tremont Corporation, an integrated producer
of titanium metals. Mr. Martin has also
served as a Director and the Chairman of the
Board of Directors of Tremont Corporation
since August 1990. From December 1988 until
January 1994, he served as Chairman of the
Board of Directors of Baroid Corporation, an
oilfield services company. In January 1994,
Baroid Corporation became a wholly owned
subsidiary of Dresser Industries, Inc. and
Mr. Martin currently serves as a Director of
Dresser Industries, Inc. Mr. Martin also
serves as President and Chief Executive
Officer of Titanium Metals Corporation, an
integrated producer of titanium.
Thomas L. Rhodes Mr. Rhodes was appointed a Director of AIMCO in
July 1994. Mr. Rhodes has served as the
President and a director of National Review
since 1992. From 1976 to 1992, Mr. Rhodes served
in various positions at Goldman, Sachs & Co. and
was elected a General Partner in 1986. Mr. Rhodes
also served as a Director of Underwriters
Reinsurance Corporation from 1987 to 1993 and was
a member of the Advisory Board of TransTerra Co.
during 1993. He currently serves as Co-Chairman
and director of Financial Assets Management, LLC
and its subsidiaries, and as a director of Delphi
Financial Group, Inc. and its subsidiaries, The
Lynde and Harry Bradley Foundation, and the
Reserve Special Portfolio Trusts. Mr. Rhodes is
Chairman of the Empire Foundation for Policy
Research, a Trustee of the Heritage Foundation, a
Trustee of the Manhattan Institute, a Board Member
of the National Center for Neighborhood Enterprise
and a Member of the Council on Foreign Relations.
John D. Smith Mr. Smith was appointed a Director of AIMCO in
November 1994. Mr. Smith is Principal and
President of John D. Smith Developments. Mr. Smith
has been a shopping center developer, owner and
consultant for over 8.6 million square feet of
shopping center projects including Lenox Square in
Atlanta, Georgia. Mr. Smith is a Trustee and
former President of the International Council of
Shopping Centers and was selected to be a member
of the American Society of Real Estate Counselors.
Mr. Smith served as a Director for Pan-American
Properties, Inc. (National Coal Board of Great
Britain) formerly known as Continental Illinois
Properties. He also serves as a director of
American Fidelity Assurance Companies and is
retained as an advisor by Shop System Study
Society, Tokyo, Japan.
SCHEDULE II
Beneficial Ownership of Shares Subject to Voting Agreements, Irrevocable
Proxies and Option Agreements (As of March 20, 1998).
832,818 Shares beneficially owned by Metropolitan Acquisition
Partners IV, L.P. ("MAP IV") are subject to a Voting Agreement, an
Irrevocable Proxy and an Option Agreement. Such Shares represent that
portion of Shares directly owned by MAP IV that are allocated to Metro
Shelter Directives, Inc. ("MSD"), the general partner of MAP IV.
186,167 Shares beneficially owned by Metropolitan Acquisition
Partners V, L.P. ("MAP V") are subject to a Voting Agreement, an
Irrevocable Proxy and an Option Agreement. Such Shares represent that
portion of Shares directly owned by MAP V that are allocated to MV, Inc.
("MV"), the general partner of MAP V.
3,414,105 Shares beneficially owned by Andrew L. Farkas ("AF")
(comprised of 207,047 Shares directly owned, 928,000 Shares purchasable
pursuant to options and warrants which are exercisable within 60 days, 184
Shares directly owned by F III, Inc., a corporation directly owned by AF,
887,973 Shares directly owned by MSD, a corporation wholly owned by AF,
195,658 Shares directly owned by MV, a corporation wholly owned by AF,
832,818 Shares directly owned by MAP IV, 186,167 Shares directly owned by
MAP V and 176,257 Shares beneficially owned by R.A.F. Resources ("R.A.F."),
a general partnership in which AF is one of two general partners), are
subject to a Voting Agreement, an Irrevocable Proxy and an Option
Agreement. The 832,818 Shares directly owned by MAP IV, and the 186,167
Shares directly owned by MAP V, respectively, are subject to a Voting
Agreement, an Irrevocable Proxy and an Option Agreement executed by MAP IV,
and MAP V, respectively.
250,000 Shares beneficially owned by The Andrew Farkas Trust
U/A dated February 25, 1998 (the "AF Trust") are subject to a Voting
Agreement, an Irrevocable Proxy and an Option Agreement. Andrew S. Jacobs
("ASJ"), Charles Garner ("CG") and William P. Lauder ("WLP") are trustees
of AF Trust. A majority of the trustees of the AF Trust must agree in order
to vote or dispose of the 250,000 Shares held by the AF Trust.
279,506 Shares (56,506 Shares directly owned, and 223,000
Shares purchasable pursuant to options and warrants which are exercisable
within 60 days) beneficially owned by James A. Aston ("JAA") are subject to
a Voting Agreement, an Irrevocable Proxy and an Option Agreement.
226,305 Shares (39,805 Shares directly owned and 186,500 Shares
purchasable pursuant to options and warrants which are exercisable within
60 days) beneficially owned by Frank M. Garrison ("FMG") are subject to a
Voting Agreement, an Irrevocable Proxy and an
Option Agreement.
255,821 Shares (72,521 Shares directly owned and 193,300 Shares
purchasable pursuant to options and warrants which are exercisable within
60 days) beneficially owned by Robert Uretta ("RU") are subject to a Voting
Agreement, an Irrevocable Proxy and an Option Agreement.
SCHEDULE III
1) Andrew L. Farkas. The business address of AF is 375 Park
Avenue, Suite 3401, New York, New York 10152. The present principal
occupation of AF is (i) the Chairman of the Board, President and Chief
Executive Officer and a director of the Issuer, (ii) the President and sole
director and stockholder of MV, (iii) the President and sole director and
stockholder of MSD and (iv) the President and sole director and stockholder
of Metropolitan Asset Group, Ltd., a New York corporation and real estate
investment banking firm located at P.O. Box 1417, Greenville, South
Carolina 29602.
F III, Inc. ("F III") is a corporation organized under
the laws of the State of Delaware. The principal business of F III is to be
the sole general partner of Metropolitan Partners I, L.P., which is a
limited partner of MAP IV, and to serve as a general partner of a limited
partnership that owns real estate in New York City. F III is wholly owned
by AF. The address of the principal office of F III is One Insignia
Financial Plaza, Greenville, South Carolina 29062.
R.A.F. is a general partnership organized under the laws
of the State of New York and has a 10% limited partnership interest in MAP
IV. Andrew L. Farkas and Robin L. Farkas ("RF") are the general partners of
R.A.F. The principal business of R.A.F. is to make investments of various
types. The principal address of R.A.F. is One Insignia Financial Plaza,
Greenville, South Carolina 29602.
The principal business address of RF is 730 Park Avenue,
New York, New York 10021. The present principal occupation of RF is (i)
private investing and (ii) a general partner of R.A.F. RF is a United
States citizen.
2) Metropolitan Acquisition Partners IV, L.P. MAP IV is a
limited partnership organized under the laws of the State of Delaware. The
principal business of MAP IV is to own securities of the Issuer. The
principal address of MAP IV is One Insignia Financial Plaza, Greenville,
South Carolina 29602. The general partner of MAP IV is MSD, a corporation
organized under the laws of the State of Delaware. The principal business
of MSD is to act as the general partner of MAP IV. The principal address of
MSD is One Insignia Financial Plaza, Greenville, South Carolina 29602. AF
is the President, sole director and sole stockholder of MSD.
3) Metropolitan Acquisition Partners V, L.P. MAP V is a limited
partnership organized under the laws of the State of Delaware. The
principal business of MAP V is to own securities of the Issuer. The
principal address of MAP V is One Insignia Financial Plaza, Greenville,
South Carolina 29602. The general partner of MAP V is MV, a corporation
organized under the laws of the State of Delaware. The principal business
of the MV is to act as the general partner of MAP V. The principal address
of MV is One Insignia Financial Plaza, Greenville, South Carolina 29602. AF
is the President, sole director and sole stockholder of MV.
4) The Andrew Farkas Trust U/A dated February 25, 1998. The AF
Trust is a trust organized under the laws of the State of New York. The
principal business of the AF Trust is to own securities of the Issuer. The
address of the principal office of the AF Trust is 1585 Broadway, New York,
New York 10036.
The three trustees of the AF Trust are CG, ASJ and WL.
The business address of CG is Simpson Thacher & Bartlett, 425 Lexington
Avenue, New York, New York 10017. The present principal occupation of CG is
associate at the law firm of Simpson Thacher & Bartlett, the principal
address of which is CG's business address. CG is also a trustee of the AF
Trust. CG is a United States citizen.
The business address of ASJ is Proskauer Rose LLP, 1585
Broadway, New York, New York 10036. The present principal occupation of ASJ
is Partner at the law firm of Proskauer Rose LLP, the principal address of
which is ASJ's business address. ASJ is also a trustee of the AF Trust. ASJ
is a United States citizen.
The business address of WL is 767 Fifth Avenue, New York,
New York 10153. The present principal occupation of WL is President of
Origins Natural Resources, Inc., a subsidiary of The Estee Lauder
Companies, Inc. ("Estee Lauder"), a cosmetics company, and a director of
Estee Lauder. The principal address of Estee Lauder is WL's principal
business address. WL is also a trustee of the AF Trust. WL is a United
States citizen.
5) James A. Aston. The business address of JAA is One Insignia
Financial Plaza, Greenville, South Carolina, 29602. The present principal
occupation of JAA is (i) Office of the Chairman and Chief Financial Officer
of the Issuer and (ii) President of IPT. The principal business of IPT is
to acquire and own interests in multifamily residential and commercial
properties. The principal address of IPT is One Insignia Financial Plaza,
Greenville, South Carolina 29602. JAA is a United States citizen.
6) Frank M. Garrison. The business address of FMG is 102
Woodmont Boulevard, Suite 400, Nashville, Tennessee, 37205. The present
principal occupation of FMG is (i) Executive Managing Director and
President of the Financial Services Division of the Issuer and (ii)
Executive Managing Director of IPT. FMG is a United States citizen.
7) Ronald Uretta. The business address of RU is One Insignia
Plaza, Greenville, South Carolina, 29602. The present principal occupation
of RU is (i) Chief Operating Officer and Treasurer of the Issuer and
(ii)Vice President and Treasurer of IPT. RU is a United States citizen.
CALL OPTION, PUT OPTION AND PURCHASE PRICE ADJUSTMENT AGREEMENT
(this "Agreement") dated as of March 17, 1998, by and between Apartment
Investment and Management Company, a Maryland corporation ("AIMCO"), and
Ronald Uretta (the "Stockholder").
WHEREAS, the Stockholder beneficially owns (i) an aggregate of
_____________ shares of Common Stock, par value $.01 per share ("IFG
Stock"), of Insignia Financial Group, Inc. ("IFG"), (ii) options and/or
warrants to purchase an aggregate of ___________ shares of IFG Stock, but
only to the extent they are outstanding on the Call Option Trigger Date (as
hereinafter defined) or the Put Option Trigger Date (as hereinafter
defined), and if any option or warrant is exercised, then the number of
shares of IFG Stock shall be increased by the number of shares received
upon such exercise (collectively, "Insignia Options"), and (iii) ________
shares of beneficial interest, par value $0.01 per share ("IPT Stock"), of
Insignia Properties Trust ("IPT");
WHEREAS, AIMCO, IFG and Insignia/ESG, Inc., a Delaware
corporation ("SpinCo"), are entering into an Agreement and Plan of Merger
dated as of the date hereof (the "Merger Agreement"), which provides, among
other things, for the merger of IFG with and into AIMCO, with AIMCO as the
surviving corporation; and
WHEREAS, in order to induce AIMCO to enter into the Merger
Agreement and in further consideration thereof, the Stockholder has agreed
to grant AIMCO the Call Option (as hereinafter defined) on the terms and
subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth herein, the parties hereto intending to
be legally bound agree as follows:
1. Grant of Call Option; Price Protection; Put Option. (a)
Upon the terms and subject to the conditions contained herein, the
Stockholder hereby grants AIMCO an irrevocable option (the "Call Option")
to purchase in the aggregate 45% of the shares of IFG Stock, 45% of the
shares of IFG Stock issuable upon the exercise of the Insignia Options and
45% of the shares of IPT Stock (collectively, the "Stockholder's Shares");
provided, however, in the event (a) the Spin Off has occurred or (b) the
Merger Agreement is terminated by Target pursuant to Section 9.1(e)
thereof, or pursuant to Section 9.1(b), (c) or (d) of the Merger Agreement
following the making of an Acquisition Proposal, unless such Acquisition
Proposal relates only to SpinCo (whether or not the Spin Off has occurred),
"Stockholder's Shares" shall mean 100% of the shares of IFG Stock, 100% of
the shares of IFG Stock issuable upon the exercise of the Insignia Options
and 100% of the shares of IPT Stock. The per share purchase price for each
share of IFG Stock shall be $25.00 per share (the "IFG Per Share Purchase
Price") and the per share purchase price for each share of IPT Stock shall
be $13.25 per share; provided, however, that in the event the Spin Off has
occurred, the IFG Per Share Purchase Price shall be reduced to $11.00 per
share. The aggregate purchase price for the Stockholder's Shares shall be
payable by AIMCO at the Closing (as hereinafter defined) by wire transfer
in immediately available funds to an account or accounts designated by the
Stockholder prior to the Closing Date (as hereinafter defined).
If during the term of this Agreement AIMCO increases the Merger
Consideration payable pursuant to the Merger Agreement in response to an
Acquisition Proposal, then the IFG Per Share Purchase Price for the
Stockholder's Shares shall be increased by the amount of the increase of
the Merger Consideration. If any portion of the Merger Consideration is
payable in a form of consideration that is not cash, then AIMCO and the
Stockholder shall mutually determine the dollar value of the non-cash
portion of the Merger Consideration (it being understood that for the
purposes of this Agreement the Merger Consideration set forth in the Merger
Agreement is valued by the parties at $25.00 per share, and the Independent
Appraiser (as defined below) shall be bound by such valuation). If AIMCO
and the Stockholder are unable to agree on the dollar value of such non-
cash consideration, then the IFG Per Share Purchase Price shall be
immediately increased to the lower of (a) the estimate of the dollar value
of such non-cash consideration offered by AIMCO and (b) the estimate of the
dollar value of such non-cash consideration offered by the Stockholder, but
in no case shall the IFG Per Share Purchase Price be less than $25 per
share before the Spin Off has occurred or less than $11 per share after the
Spin Off has occurred and no less than the lower of clause (a) or (b) above
(the "Agreed Price"). The IFG Per Share Purchase Price shall later be
adjusted to the extent that the Independent Appraiser provides an appraisal
of the dollar value of the non-cash portion of the increase in the Merger
Consideration offered by AIMCO. "Independent Appraiser" shall mean that
independent qualified appraiser jointly selected by AIMCO and the
Stockholder. AIMCO and the Stockholder shall each bear one-half of the
cost of any appraisal provided by the Independent Appraiser, and shall
instruct the Independent Appraiser to render his report within 30 days.
In the event that, after payment of the Aggregate Purchase Price
to the Stockholder pursuant to this Section 1(a) or Section 1(c) hereof,
the Independent Appraiser delivers an appraisal report to AIMCO and the
Stockholder which indicates that the IFG Per Share Purchase Price is
subject to adjustment pursuant to this Section 1(a), then if the appraisal
report indicates that the Agreed Price was lower than indicated by such
appraisal report, then AIMCO shall, within 10 days, wire transfer
immediately available funds to an account or accounts designated by the
Stockholder the difference between the value set forth in such appraisal
report and the amount theretofore paid to the Stockholder pursuant to this
Section 1(a) or Section 1(c) hereof.
The "Aggregate Purchase Price" shall mean the aggregate purchase
price for the Stockholder's Shares as established pursuant to the preceding
portions of this Section 1(a).
(b) Upon the terms and subject to the conditions contained
herein, AIMCO hereby grants to Stockholder the irrevocable right (the
"Price Protection Right") to receive from AIMCO an amount (the "Price
Protection Payment") equal to the difference between (i) the Aggregate
Purchase Price and (ii) (a) the average closing sale price per share of
IFG Stock on the New York Stock Exchange (the "NYSE") for the three (3)
trading days preceding the date on which the Stockholder gives written
notice to exercise its Purchase Price Right multiplied by 45% of the
aggregate number of shares of IFG Stock plus the aggregate number of shares
of IFG Stock issuable upon the exercise of the Insignia Options which are
subject to the Price Protection Right plus (b) the average closing sale
price per share of IPT Stock on the securities exchange or listing or
quotation service on which the IPT Stock is traded for the three (3)
trading days preceding the date on which the Stockholder gives written
notice to exercise its Price Protection Right, or $13.25, if IPT Stock is
not then listed on any securities exchange or listing or quotation services
multiplied by 45% of the aggregate number of shares of IPT Stock subject to
the Price Protection Right; provided, however, that in the event that (i)
the Spin Off has occurred or (ii) the Merger Agreement is terminated by
Target pursuant to Section 9.1(e) thereof, or pursuant to Section 9.1(b),
(c) or (d) of the Merger Agreement following the making of an Acquisition
Proposal, unless such Acquisition Proposal relates only to SpinCo (whether
or not the Spin Off has occurred), before the Closing with respect to the
Price Protection Trigger Event (as hereinafter defined), "Price Protection
Payment" shall mean an amount equal to the difference between (i) the
Aggregate Purchase Price giving effect to the Spin Off (if the Spin Off has
occurred) and (ii) (a) the average closing sale price per share of IFG
Stock on the NYSE for the three (3) trading days preceding the date the
Stockholder gives written notice to exercise its Price Protection Right
multiplied by the sum of 100% of the shares of IFG Stock plus the aggregate
number of shares of IFG Stock issuable upon the exercise of the Insignia
Options which are subject to the Price Protection Right plus (b) the
average closing sale price per share of IPT Stock on the securities
exchange or listing or quotation service on which the IPT Stock is traded
for the three (3) trading days preceding the date on which the Stockholder
gives written notice to exercise its Price Protection Right, or $13.25 if
the IPT Stock is not then listed on any securities exchange or listing or
quotation service, multiplied by 100% of the shares of IPT Stock subject to
the Price Protection Right. The Price Protection Payment shall be payable
by wire transfer in immediately available funds to an account or accounts
designated by the Stockholder prior to the Closing Date.
(c) Upon the terms and subject to the conditions contained
herein, AIMCO hereby grants to the Shareholder an irrevocable option (the
"Put Option") to sell to AIMCO the Stockholder's Shares. The per share
purchase price for each share of IFG Stock purchased in connection with the
Put Option shall be the IFG Per Share Purchase Price and the per share
purchase price for each share of IPT Stock purchased in connection with the
Put Option shall be $13.25 per share; provided, however, that in the event
the Spin Off has occurred, the IFG Per Share Purchase Price shall be
reduced to $11.00 per share. The Aggregate Purchase Price shall be payable
by AIMCO at the Closing by wire transfer in immediately available funds to
an account or accounts designated by the Stockholder prior to the Closing
Date.
2. Term of Call Option, Price Protection Right and Put Option.
Each of the Call Option, the Price Protection Right and the Put Option
shall commence on the date hereof and shall expire on the Termination Date
(the "Expiration Date"). "Termination Date" means the earlier to occur of
(i) the time immediately prior to the Effective Time (as defined in the
Merger Agreement), and (ii) five business days after the occurrence of
either, a Call Option Trigger Event, a Put Option Trigger Event or a Price
Protection Trigger Event, provided that if AIMCO or the Stockholder, as the
case may be, provides written notice to the other party of its wish to
exercise the Call Option, in the case of AIMCO, or the Price Protection
Right or the Put Option, in the case of the Stockholder, then ten business
days after the earliest of (a) delivery of the written notice, if any,
exercising the Call Option, (b) delivery of the written notice, if any,
exercising the Price Protection Right, if there has been no Call Option
Trigger Event or if no exercise of the Call Option has been delivered, (c)
delivery of the written notice, if any, exercising the Put Option and (d)
the satisfaction or waiver of the applicable conditions set forth in the
first paragraph of Section 3 hereof.
3. Exercise of Call Option, Price Protection Right and Put
Option. Subject to the provisions set forth below, each of the Call
Option, the Price Protection Right or the Put Option may be exercised by
either AIMCO or the Stockholder, as the case may be, at any time on and
after the date hereof through and including the Expiration Date; provided
that (a) no statute, rule, regulation, court order, or injunction shall
have been enacted, entered, promulgated or enforced, and be in force, by
any court or governmental authority which prohibits the consummation of the
purchase and sale of the Stockholder's Shares hereunder; (b) any waiting
period applicable to the purchase and sale of the Stockholder's Shares
hereunder under the Hart-Scott-Rodino Antitrust Improvements Act of 1976
(the "HSR Act") shall have expired or been terminated; (c) a Call Option
Trigger Event, with respect to exercise, if any, of the Call Option shall
have occurred prior to the Termination Date; and (d) a Price Protection
Trigger Event, with respect to exercise, if any, of the Price Protection
Right, shall have occurred prior to the Termination Date and (e) a Put
Option Trigger Event, with respect to exercise, if any, of the Put Option,
shall have occurred prior to the Termination Date; provided, further, that
in the case of the Price Protection Right or the Put Option (x) the
representations and warranties of the Stockholder contained in Section 5
hereof shall be true and correct in all material respects as of the Closing
Date with the same force and effect as though the same had been made on and
as of the Closing Date; and (y) the Stockholder shall have performed and
complied in all material respects with each of its obligations under this
Agreement required to be performed by it at or prior to the Closing Date.
For purposes of this Agreement, a "Call Option Trigger Event" means the
date on which the Merger Agreement has been terminated for any reason prior
to consummation of the Merger, other than termination due to (aa) failure
of any waiting period under the HSR Act applicable to the Merger to have
expired or terminated, (bb) any permanent injunction or other order by any
federal or state court preventing consummation of the Merger or (cc)(i)
Target validly terminating the Merger Agreement pursuant to Section
9.1(b)(i) thereof and (ii) the absence of a right by AIMCO to validly
terminate the Merger Agreement pursuant to Section 9.1(b)(i) thereof. For
purposes of this Agreement, "Price Protection Trigger Event" means the date
which is five business days after the occurrence of a Call Option Trigger
Event, provided that no exercise of the Call Option has been delivered by
the last day for the giving of such notice. For purposes of this
Agreement, a "Put Option Trigger Event" means the date on which the Merger
Agreement has been validly terminated by Target pursuant to Section
9.1(b)(i) thereof, but if, and only if, AIMCO did not have the right to
validly terminate the Merger Agreement pursuant to Section 9.1(b)(i)
thereof on the date of such termination.
In the event AIMCO wishes to exercise the Call Option, or the
Stockholder wishes to exercise the Price Protection Right or the Put
Option, such exercising party shall send written notice (which shall be
irrevocable) to the other party specifying that it wishes to purchase the
Stockholder's Shares, in the case of the Call Option, receive the Price
Protection Payment, in the case of the Price Protection Right, or sell the
Stockholder's Shares, in the case of the Put Option, and a date (the
"Closing Date") for the closing of such purchase or receipt of such payment
(a "Closing"). Such notice shall be sent no later than the fifth business
day following the Call Option Trigger Event, the Price Protection Trigger
Event or the Put Option Trigger Event, as the case may be. The Closing
shall take place on the tenth business day after the earliest of (a)
delivery of the written notice, if any, exercising the Call Option, (b)
delivery of the written notice, if any, exercising the Price Protection
Right, (c) delivery of the written notice, if any, exercising the Put
Option, and (d) the satisfaction or waiver of the applicable conditions set
forth in the preceding paragraph, at the offices of Skadden, Arps, Slate,
Meagher & Flom LLP, 919 Third Avenue, New York, New York or at such other
place as may be mutually agreed upon by AIMCO and the Stockholder. Until
either the Call Option, in the case of AIMCO, or the Price Protection Right
or the Put Option, in the case of the Stockholder, has been exercised and
AIMCO has paid the Aggregate Purchase Price or the Price Protection
Payment, as the case may be, in full as provided for in Section 1 hereof,
the parties hereto agree that the Stockholder shall own the Stockholder's
Shares and Insignia Options for all purposes.
In the event AIMCO delivers written notice exercising the Call
Option, Stockholder shall, immediately prior to the Closing, exercise the
Insignia Options and purchase from IFG the shares of IFG Stock issuable
upon the exercise of the Insignia Options. Concurrent with Stockholder's
exercise of the Insignia Options, AIMCO shall loan to Stockholder an amount
equal to the aggregate exercise price of the Insignia Options in
consideration for a promissory note payable on demand (the "Promissory
Note") which shall be secured by all the shares of IFG Stock owned by
Stockholder, the Insignia Options and the IFG Stock acquired upon the
exercise of the Insignia Options and with full recourse against the
Stockholder. The Promissory Note shall bear interest at a rate equal to
AIMCO's weighted average cost of funds.
If the person signing this Agreement is Andrew Farkas, he agrees
that in the event the Call Option is exercised and he is unable to deliver
any of the Stockholder's Shares for any reason including, without
limitation, because Metropolitan Asset Partners IV L.P. ("MAP IV") and/or
Metropolitan Asset Partners V L.P. ("MAP V") have not distributed shares to
Mr. Farkas for any reason, he will be in breach of this Agreement and
liable to AIMCO for damages.
4. Payment and Delivery of Certificates. At any Closing
pursuant to an exercise of the Call Option, the Price Protection Right or
the Put Option hereunder:
(a) AIMCO will make payment to the Stockholder of the Aggregate
Purchase Price or the Price Protection Payment, as the case may be, as
provided for in Section 1 hereof in immediately available funds.
(b) In the event of the exercise of the Call Option or the Put
Option, Stockholder shall deliver to AIMCO certificates evidencing
Stockholder's Shares, in form ready for transfer, duly endorsed in blank
with all signatures guaranteed by a member firm of the New York Stock
Exchange or by a national bank. At the Closing, and from time to time
thereafter, Stockholder shall execute and deliver such other documents and
instruments, and take such other actions, as AIMCO may reasonably request,
in order to more fully vest in AIMCO and perfect its title to Stockholder's
Shares.
5. Representations and Warranties of Stockholder. Except as
set forth on Schedule 5 attached hereto, the Stockholder represents and
warrants to AIMCO that: (a) Stockholder has duly authorized, executed and
delivered this Agreement and this Agreement is a legal, valid and binding
obligation of Stockholder, enforceable against Stockholder in accordance
with its terms; and neither the execution of this Agreement nor the
consummation by such Stockholder of the transactions contemplated hereby
will constitute a violation of or default under, or conflict with, any
contract, commitment, agreement, understanding, arrangement or restriction
of any kind to which such Stockholder is a party or by which Stockholder is
bound; (b) as of the date hereof, the Shares and Insignia Options listed on
Annex A to this Agreement represent all the shares of IFG Stock and IPT
Stock and Insignia Options as to which the Stockholder has a pecuniary
beneficial interest (other than through a limited partnership of which he
or his controlled entity is not a general partner) and (as to restricted
stock and Insignia Options) are vested, and there are no options, warrants
or rights to purchase or acquire, or agreements relating to, the
Stockholder's Shares and Insignia Options other than this Agreement, and
the instruments permitting or effectuating the grant of restricted stock
and Insignia Options; (c) upon dissolution of MAP IV and MAP V, the
Stockholder will have (without exception) good title to the Stockholder's
Shares and Insignia Options free and clear of all claims, liens, charges,
encumbrances and security interest of any nature whatsoever, except that
the Stockholder may have pledged all or part of the Stockholder's Shares to
a bona fide financial institution if (unless the person signing this
Agreement is one of Messrs. Aston, Garrison, or Uretta) such institution
agrees in writing to be bound by this Agreement, and the Stockholder will
transfer to AIMCO good title to the Stockholder's Shares other than the
Insignia Options, free and clear of all claims, liens, charges,
encumbrances and security interests of any nature whatsoever placed thereon
by the Stockholder or, if the person signing this Agreement is Andrew L.
Farkas, by MAP IV and MAP V; (d) except for the Voting Agreement and the
Proxy, the Stockholder is not a party to or otherwise bound by any proxy,
voting agreement or restriction which affects the voting rights of the
Shares or any shares underlying the Insignia Options or any capital stock
or other security of IFG; and (e) in the case of a Stockholder which is a
trust, the undersigned individual trustees of such trust are lawful and
duly appointed trustees of such trust and have full power and authority on
behalf of such trust to enter into this Agreement and to consummate the
transactions contemplated hereby.
6. Representations and Warranties of AIMCO. AIMCO represents
and warrants to the Stockholder as follows: (a) AIMCO is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Maryland; (b) AIMCO has full power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated
hereby; (c) the execution, delivery and performance of this Agreement by
AIMCO and the consummation by it of the transactions contemplated hereby
have been approved by all necessary corporate action on the part of AIMCO;
(d) this Agreement constitutes the legal, valid and binding obligation of
AIMCO; and (e) AIMCO is purchasing the Stockholder's Shares for investment
only and not with a view to the distribution thereof.
7. Covenants of the Stockholder. (a) The Stockholder shall not
transfer, pledge, hypothecate, sell, exchange or offer to transfer or sell
or otherwise dispose of or encumber or grant any proxy or consent with
respect to any of the Shares or Insignia Options at any time prior to the
Termination Date, except that the Stockholder may execute the Voting
Agreement and the Irrevocable Proxy, dated as of the date hereof, by and
between the parties hereto (the "Voting Agreement and the Proxy"), sell the
Insignia Options to IFG after the Spin Off and prior to the consummation of
the Merger or pledge all or part of the Stockholder's Shares to a bona fide
financial institution which agrees in writing to be bound by this
Agreement.
(b) The Stockholder, in his or its capacity as a holder of
Shares and Insignia Options, agrees that prior to the Closing the
Stockholder will retain record (to the extent he or it possesses record
ownership as of the date hereof) and beneficial ownership of all of the
Stockholder's Shares and (except as contemplated by Section 7(a)) the
Insignia Options.
(c) If this Agreement is signed by Andrew L. Farkas, in the
event that (a) at the time of delivery of the Call Option Notice or (b) at
any time following an Acquisition Proposal (as defined in the Merger
Agreement) upon the written request of AIMCO, Mr. Farkas does not own of
record any of the Stockholder's Shares and such shares are beneficially
owned by MAP IV or MAP V, Mr. Farkas in his capacity as the sole
stockholder and director of Metro Shelter Directives, Inc., the sole
general partner of MAP IV, and in his capacity as the sole stockholder and
director of MV Inc., the sole general partner of MAP V, will cause each of
MAP IV and MAP V to distribute, within three business days following
delivery of the Call Option or within three business days following AIMCO's
written request, to him the number of shares of IFG Stock set forth on
Annex A.
8. Resale of AIMCO Shares. The Stockholder hereby agrees that
unless he or it receives prior written consent of AIMCO, such Stockholder
will not sell, assign, transfer or otherwise dispose of any shares of
capital stock of AIMCO obtained pursuant to the Merger, or enter into any
negotiations, commitments or agreements with respect to any such
disposition, during the period ending on the second anniversary of the
consummation of the Merger, as applicable; provided; however, such
Stockholder may dispose of any such capital stock to a family member or
related trust or estate planning vehicle if such person, trust or entity
agrees in writing to be bound by the provisions of this Agreement, or may
pledge all or part of the shares of capital stock of AIMCO held by the
Stockholder to a bona fide financial institution which agrees in writing to
be bound by this Agreement; provided further, that the Stockholder may sell
or otherwise dispose of up to twenty-five (25)% of such shares of capital
stock of AIMCO during the period commencing on the Closing Date and ending
six months thereafter and an additional 25% during each subsequent six
month period. AIMCO agrees that it will respond to any request by the
Stockholder pursuant to the preceding sentence within five business days of
its receipt thereof.
If the Stockholder is unable after reasonable efforts to locate a
bona fide financial institution which is willing to be bound in writing to
this Agreement, then AIMCO shall, upon execution of customary loan and
security agreements, provide a loan to the Stockholder, in an amount equal
to fifty (50)% of the aggregate fair market value of the shares of capital
stock of AIMCO then owned by the Stockholder (or the Stockholder's Shares,
if the Merger has not been consummated), which loan shall be secured by all
the shares of capital stock of AIMCO then owned by the Stockholder (or the
Stockholder's Shares, if the Merger has not been consummated) provided,
however, that the value of such loan shall not exceed five percent of the
value of the total assets of AIMCO, all as measured for purposes of Section
856(c)(4)(B) of the Code. Such loan shall be recourse to the Stockholder,
shall be for a term of three years, shall bear interest at a rate which is
equal to AIMCO's weighted average cost of capital, as calculated on the
date such loan is provided to the Stockholder, and all accrued interest on
the principal amount of such loan shall be due and payable semi-annually.
This Section 8 shall not apply if the Stockholder is a Trust.
9. Covenants of AIMCO. AIMCO hereby agrees that if it consents
in writing to the Stockholder's request to sell shares of capital stock of
AIMCO pursuant to Section 8 hereof, then it will, from the date of
delivering such written consent to the Stockholder, consent in writing to
any requests by any other person or entity signing an agreement
substantially the same as this Agreement in the two weeks before or after
this Agreement is executed (the "Parallel Agreements") to sell shares of
capital stock of AIMCO pursuant to Section 8 of the Parallel Agreements.
AIMCO hereby agrees not to exercise the Call Option granted herein unless
it simultaneously exercises the call options granted to it pursuant to the
Parallel Agreements.
10. Trustee Liability. Any undersigned individual trustee of a
trust which is a Stockholder of IFG shall have no personal liability
hereunder, and it is understood that any such trustee that signs this
Agreement shall do so on behalf of such trust in his or her capacity as
trustee of such trust, and not in his or her individual capacity.
11. HSR Act. Each party hereto shall file or cause to be filed
with the FTC and the Department of Justice any notifications required to be
filed by their respective "ultimate parent" companies under the HSR Act and
the rules and regulations promulgated thereunder with respect to the
transactions contemplated hereby. Such parties will use all commercially
reasonable efforts to make any such filings in a timely manner and respond
on a timely basis to any requests for additional information made by either
of such agencies.
12. Specific Performance. The parties hereto agree that their
respective remedies at law would be inadequate in the event of any default
by the other party in the performance of such party's obligations under
this Agreement. Accordingly, the parties hereto agree that in the event of
any such default the non-defaulting party shall have the right to seek
specific performance of such obligations as well as any other legal
remedies to which such non-defaulting party may be entitled.
13. Assignment; Parties in Interest. This Agreement shall not
be assignable, except that AIMCO may assign its rights under this Agreement
to a subsidiary or affiliate of AIMCO or, if AIMCO determines that its
status as a real estate investment trust would make advisable a partial
purchase by AIMCO and assignment of its remaining rights under this
Agreement to a third party, to any third party who agrees in writing to be
bound by this Agreement; provided, however, that no assignment shall effect
the obligations of AIMCO under this Agreement. This Agreement shall be
binding upon, inure to the benefit of and be enforceable by and against the
parties hereto and their successors (including administrators and executors
of individuals or trusts).
14. Amendments. No amendment or waiver of any provision of this
Agreement shall be effective unless the same shall be in writing and signed
by or on behalf of AIMCO and by or on behalf of each Stockholder or their
respective heirs, representatives, successors or assigns. All notices and
other communications pursuant to this Agreement shall be in writing or by
fax and mailed or sent to each party hereto at its address set forth on the
signature page hereto or at such other address as shall be designated by
such party in a written notice to the other parties hereto.
15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO PRINCIPLES OF CONFLICT OF LAWS THEREOF.
16. Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed to be an original but all of
which together will constitute one and the same instrument.
15. Effect of Headings. The descriptive headings
contained herein are for convenience only and shall not effect in any way
the meaning or interpretation of this Agreement.
16. Capitalized Terms. Capitalized terms used and not defined
herein shall have the meanings ascribed to them in the Merger Agreement.
17. Information to be Supplied. If the person signing this
Agreement is one of Messrs. Aston, Garrison, or Uretta, the number of
shares and options is not yet filled in and he agrees to supply such
information to AIMCO promptly but in any case within two weeks and agrees
that he is bound by this Agreement prior to and following delivery of such
information.
* * * * *
IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed on the day and year first written above.
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
By: ____________________________
Name: Peter Kompaniez
Its: President
Address: 1873 South Bellaire Street
Suite 1700
Denver, Colorado 80222
Tel: (303) 757-8101
Fax: (303) 757-8735
STOCKHOLDER
By: _________________________
Name: [ ]
Address:
VOTING AGREEMENT
This Voting Agreement ("Agreement") is made and entered into as of
March 17, 1998 by and among Apartment Investment and Management Company, a
Maryland corporation ("AIMCO"), the undersigned stockholder of Insignia
Financial Group, Inc., a Delaware corporation ("IFG"), and IFG.
RECITALS
Concurrently with the execution of this Agreement, AIMCO, IFG and
Insignia/ESG, Inc., a Delaware corporation ("SpinCo") have entered into an
Agreement and Plan of Merger dated as of March 17, 1998 (the "Merger
Agreement"), providing for the merger of IFG with and into AIMCO, with
AIMCO being the surviving corporation (the "Merger"). The Merger Agreement
further contemplates that all of the issued and outstanding shares of
SpinCo, a wholly-owned subsidiary of IFG, shall be distributed to the
stockholders of IFG prior to the Merger. The stockholder named on the
signature page hereof (the "Stockholder") is the holder of record of at
least the number of shares of the outstanding common stock, par value $.01
per share, of IFG ("IFG Common Stock"), as is indicated on the final page
of this Agreement (the "Shares"), and the number of options to purchase
shares of IFG Common Stock as is indicated on the final page of this
Agreement (the "Options"). In consideration of and to induce the execution
of the Merger Agreement by AIMCO, the Stockholder agrees to vote the Shares
so as to facilitate consummation of the Merger to the extent more fully
described below.
NOW, THEREFORE, in consideration of the mutual promises and the mutual
covenants and agreements contained herein, the parties agree as follows:
1. Agreement to Vote Shares. At any meeting of the
stockholders of IFG called with respect to the Merger and the Merger
Agreement, and at any adjournment thereof, and with respect to any consent
solicited with respect to the Merger and the Merger Agreement, the Spin-Off
and any related transactions, the Stockholder shall vote the Shares (a) in
favor of approval of the Merger and the Merger Agreement, the Spin-Off and
any matter which could reasonably be expected to facilitate the Merger and
such other transactions and (b) against any Acquisition Proposal as such
term is defined in the Merger Agreement. The Stockholder may vote on all
other matters. The Stockholder, as the holder of voting stock of IFG shall
be present, in person or by proxy, at all meetings of stockholders of IFG
and at any adjournment thereof so that all Shares are counted for the
purpose of determining the presence of a quorum at such meetings. This
Agreement is intended to bind the Stockholder only with respect to the
voting of his Shares as a Stockholder herein, and shall not prohibit the
Stockholder from acting in accordance with his fiduciary duties as an
officer or director of IFG.
2. Irrevocable Proxy. Concurrently with the execution of this
Agreement, the Stockholder agrees to deliver to AIMCO an irrevocable proxy
in the form attached hereto as Annex A (the "Proxy"), provided that the
Proxy shall be revoked only upon termination of the Call Option and
Purchase Price Adjustment Agreement of even date between AIMCO and Andrew
L. Farkas (the "Expiration Date"). The Proxy is irrevocable and coupled
with an interest in the obligations of Stockholder.
3. Definition of Shares. For purposes of this Agreement, the
term "Shares" shall (unless the Stockholder, MAP IV or MAP V (both as
hereinafter defined)) include any shares of IFG capital stock which the
Stockholder purchases for his own account or otherwise acquires for his own
account after the execution of this Agreement and prior to the Expiration
Date, including shares obtained upon exercise of Options, or upon
dissolution of Metropolitan Asset Partners IV L.P. ("MAP IV") and
Metropolitan Asset Partners V L.P. ("MAP V"). However, unless the
Stockholder is MAP IV or MAP V, "Shares" includes only those shares of IFG
Common Stock owned of record and beneficially by Stockholder and does not
include shares of IFG Common Stock beneficially owned by others
notwithstanding that such shares may be owned of record by Stockholder. As
to MAP IV and MAP V, "Shares" means only those shares of IFG Common Stock
as is indicated on the final page of this Agreement less any shares
distributed to Andrew L. Fortras.
4. Representations, Warranties and Covenants of the
Stockholder. The Stockholder hereby represents, warrants and covenants to
AIMCO that, except as specifically described on Annex B to this Agreement,
(a) the Stockholder has duly authorized, executed and delivered this
Agreement and this Agreement is a legal, valid and binding obligation of
the Stockholder, enforceable against the Stockholder in accordance with its
terms; and neither the execution of this Agreement nor the consummation by
the Stockholder of the transactions contemplated hereby will constitute a
violation of or default under, or conflict with, any contract, commitment,
agreement, understanding, arrangement or restriction of any kind to which
the Stockholder is a party or by which the Stockholder is bound; (b) unless
the Stockholder is MAP IV or MAP V, as of the date hereof, the Shares and
the Options listed on the signature page of this Agreement represent all
the vested shares of IFG Common Stock and Options owned by the Stockholder
and there are no options, warrants or rights to purchase or acquire, or
agreements relating to, the Shares and Options other than this Agreement
and the Call Option and Price Adjustment Agreement of even date; (c) upon
dissolution of MAP IV and MAP V, the Stockholder will have (without
exception) good title to the Shares and Options free and clear of all
claims, liens, charges, encumbrances and security interest of any nature
whatsoever, except that the Stockholder may have pledged all or part of the
Shares to a bona fide financial institution which agrees in writing to be
bound by this Agreement or to AIMCO; (d) except for this Agreement and the
Irrevocable Proxy contemplated hereby, Stockholder is not a party to or
otherwise bound by any proxy, voting agreement or restriction which affects
the voting rights of the Shares or any shares underlying the Options or any
capital stock or other security of IFG; and (e) in the case of a
Stockholder which is a trust, the undersigned individual trustees of such
trust are lawful and duly appointed trustees of such trust and have full
power and authority on behalf of such trust to enter into this Agreement
and to consummate the transactions contemplated hereby.
5. Representations, Warranties and Covenants of AIMCO. AIMCO
represents, warrants and covenants to the Stockholder, as follows:
5.1. Due Authorization. This Agreement has been authorized
by all necessary corporate action on the part of AIMCO and has
been duly executed by a duly authorized representative of AIMCO.
5.2 Validity; No Conflict. This Agreement constitutes the
legal, valid and binding obligation of AIMCO. Neither the
execution of this Agreement by AIMCO nor the consummation of the
transactions contemplated hereby will result in a breach or
violation of the terms of any agreement by which AIMCO is bound
or of any decree, judgment, order, law or regulation now in
effect of any court or other governmental body applicable to
AIMCO.
6. Additional Documents. The Stockholder and AIMCO hereby
covenant and agree to execute and deliver any additional documents
necessary or desirable, in the reasonable opinion of AIMCO's legal counsel
or the Stockholder, as the case may be, to carry out the intent of this
Agreement.
7. Consent and Waiver. The Stockholder hereby gives any
consent or waivers that are reasonably required for the consummation of the
Merger and any related transactions under the terms of any agreement to
which the Stockholder is a party or pursuant to any rights the Stockholder
may have.
8. Miscellaneous.
8.1 Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, void or unenforceable, the remainder
of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no
way be affected, impaired or invalidated.
8.2 Binding Effect and Assignment. This Agreement and all
of the provisions hereof shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and
permitted assigns, but, except as otherwise specifically provided
herein, neither this Agreement nor any of the rights, interests
or obligations of the parties hereto may be assigned by any of
the parties without the prior written consent of the other.
8.3 Amendments and Modifications. This Agreement may not
be modified, amended, altered or supplemented except upon the
execution and delivery of a written agreement executed by the
parties hereto.
8.4 Specific Performance; Injunctive Relief. The parties
hereto acknowledge that AIMCO will be irreparably harmed and that
there will be no adequate remedy at law for a violation of any of
the covenants or agreements of the Stockholder set forth herein.
Therefore, it is agreed that, in addition to any other remedies
which may be available to AIMCO upon such violation, AIMCO shall
have the right to enforce such covenants and agreements by
specific performance, injunctive relief or by any other means
available to it at law or in equity.
8.5 Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and sufficient
if delivered in person, by commercial overnight courier service,
by confirmed telecopy, or sent by mail (registered or certified
mail, postage prepaid, return receipt requested) to the
respective parties as follows:
(a) if to AIMCO, to
Apartment Investment and Management Company
1873 South Bellaire Street
17th Floor
Denver, Colorado 80222
Attention: Peter K. Kompaniez
Facsimile No.: (303) 757-8735
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022-3897
Attention: Patrick J. Foye, Esq.
Facsimile: (212) 735-2000
(b) if to IFG or Stockholder, to
Insignia Financial Group, Inc.
200 Park Avenue
New York, New York 10166
Attention: Adam Gilbert
Facsimile No.: (212) 984-8040
with a copy to:
Proskauer Rose LLP
1585 Broadway
New York, New York 10036
Attention: Arnold S. Jacobs, Esq.
Facsimile No.: (212) 969-2900
or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notices of change
of address shall only be effective upon receipt.
8.6 Governing Law. This Agreement shall be governed by,
construed and enforced in accordance with the laws of the State
of New York without giving effect to principles of conflicts of
law.
8.7 Entire Agreement. This Agreement contains the entire
understanding of the parties in respect of the subject matter
hereof, and supersedes all prior negotiations and understandings
between the parties with respect to such subject matter.
8.8 Counterparts. This Agreement may be executed in
counterparts, each of which shall be an original, but all of
which together shall constitute one and the same agreement.
8.9 Effect of Headings. The section headings herein are
for convenience only and shall not affect the construction or
interpretation of this Agreement.
8.10 Termination. Notwithstanding anything else in this
Agreement, this Agreement and the Proxy, and all obligations of
the Stockholder under either of them, shall automatically
terminate as of the Expiration Date.
8.11 Capitalized Terms. Capitalized terms used and not
defined herein shall have the meaning ascribed to them in the
Merger Agreement.
8.12 IFG Action. IFG agrees to take whatever action may be
reasonably necessary to effect the transactions contemplated by
this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed on the day and year first above written.
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
By: __________________________
Name: Peter Kompaniez
Title: President
Shares Subject to this Agreement: [STOCKHOLDER]
____ shares of IFG Common Stock
By:___________________________
____ Options Subject to this
Agreement:
____ shares of IFG Common Stock
subject to the Options
INSIGNIA FINANCIAL GROUP,
INC.
By: __________________________
Name: Frank M. Garrison
Title: Executive Managing Director
ANNEX A
IRREVOCABLE PROXY
The undersigned holder of shares of capital stock (the "Stockholder")
of Insignia Financial Group, Inc., a Delaware corporation ("IFG"), hereby
irrevocably appoints and constitutes each of Terry Considine, Peter
Kompaniez and Tom Toomey who are duly authorized representatives of
Apartment Investment and Management Company and each of them (the
"Proxyholders"), the agents and proxies of the undersigned, with full power
of substitution and resubstitution, to the full extent of the undersigned's
rights with respect to the shares of capital stock of IFG owned by the
undersigned and listed below (specifically excluding any shares
beneficially owned by a third party which are owned of record by the
Stockholder), which shares are listed below (the "Shares"), and any and all
other shares or securities issued or issuable in respect thereof or issued
in respect of the options listed below (the "Options"), on or after the
date hereof and prior to the date this proxy terminated, to vote the Shares
and other shares as follows:
The agents and proxies named above are empowered at any time prior to
termination of this proxy to exercise all voting and other rights
(including, without limitation, the power to execute and deliver written
consents with respect to the Shares) of the undersigned at every annual,
special or adjourned meeting of the stockholders of IFG, and in every
written consent in lieu of such a meeting, or otherwise, (a) in favor of
approval of the Merger, the Merger Agreement and the Spin Off (as such
terms are defined in the Voting Agreement dated as of the date hereof, by
and among IFG, the Stockholder and AIMCO (the "Voting Agreement")), and any
matter that could reasonably be expected to facilitate the Merger, the
Spin-Off and any related transactions and (b) against any Acquisition
Proposal as such term is defined in the Merger Agreement. The Proxyholders
may not exercise this proxy on any other matter. The Stockholder may vote
the Shares and other shares on all such other matters.
The proxy granted by the Stockholder to the Proxyholders hereby is
granted as of the date of this Proxy in order to secure the obligations of
the Stockholder set forth in Section 1 of the Voting Agreement, and is
irrevocable and coupled with an interest in such obligations and in the
interests in IFG held by Stockholder. This proxy will terminate upon the
Expiration Date (as defined in the Voting Agreement).
Upon the execution hereof, all prior proxies given by the undersigned
with respect to the Shares and any and all other shares or securities
issued or issuable in respect thereof or issued in respect of the Options
on or after the date hereof are hereby revoked and no subsequent proxies
will be given until such time as this proxy shall be terminated in
accordance with its terms.
Any obligation of the undersigned hereunder shall be binding upon the
successors and assigns of the undersigned. The Stockholder authorizes the
Proxyholders to file this proxy and any substitution or revocation of
substitution with the Secretary of IFG and with any Inspector of Elections
at any meeting of the stockholders of IFG.
This proxy is irrevocable and shall survive the insolvency,
incapacity, death or liquidation of the undersigned.
Dated: March 17, 1998
[STOCKHOLDER]
By: ______________________________
Shares and Options to which this Irrevocable Proxy relates:
________ shares of IFG Common Stock
________ Options for shares of IFG Common Stock
ANNEX B
ENCUMBRANCES UPON THE SHARES HELD BY THE UNDERSIGNED
IRREVOCABLE PROXY
The undersigned holder of shares of capital stock (the "Stockholder")
of Insignia Financial Group, Inc., a Delaware corporation ("IFG"), hereby
irrevocably appoints and constitutes each of Terry Considine, Peter
Kompaniez and Tom Toomey who are duly authorized representatives of
Apartment Investment and Management Company and each of them (the
"Proxyholders"), the agents and proxies of the undersigned, with full power
of substitution and resubstitution, to the full extent of the undersigned's
rights with respect to the shares of capital stock of IFG owned by the
undersigned and listed below (specifically excluding any shares
beneficially owned by a third party which are owned of record by the
Stockholder), which shares are listed below (the "Shares"), and any and all
other shares or securities issued or issuable in respect thereof or issued
in respect of the options listed below (the "Options"), on or after the
date hereof and prior to the date this proxy terminated, to vote the Shares
and other shares as follows:
The agents and proxies named above are empowered at any time prior to
termination of this proxy to exercise all voting and other rights
(including, without limitation, the power to execute and deliver written
consents with respect to the Shares) of the undersigned at every annual,
special or adjourned meeting of the stockholders of IFG, and in every
written consent in lieu of such a meeting, or otherwise, (a) in favor of
approval of the Merger, the Merger Agreement and the Spin Off (as such
terms are defined in the Voting Agreement dated as of the date hereof, by
and among IFG, the Stockholder and AIMCO (the "Voting Agreement")), and any
matter that could reasonably be expected to facilitate the Merger, the
Spin-Off and any related transactions and (b) against any Acquisition
Proposal as such term is defined in the Merger Agreement. The Proxyholders
may not exercise this proxy on any other matter. The Stockholder may vote
the Shares and other shares on all such other matters.
The proxy granted by the Stockholder to the Proxyholders hereby is
granted as of the date of this Proxy in order to secure the obligations of
the Stockholder set forth in Section 1 of the Voting Agreement, and is
irrevocable and coupled with an interest in such obligations and in the
interests in IFG held by Stockholder. This proxy will terminate upon the
Expiration Date (as defined in the Voting Agreement).
Upon the execution hereof, all prior proxies given by the undersigned
with respect to the Shares and any and all other shares or securities
issued or issuable in respect thereof or issued in respect of the Options
on or after the date hereof are hereby revoked and no subsequent proxies
will be given until such time as this proxy shall be terminated in
accordance with its terms.
Any obligation of the undersigned hereunder shall be binding upon the
successors and assigns of the undersigned. The Stockholder authorizes the
Proxyholders to file this proxy and any substitution or revocation of
substitution with the Secretary of IFG and with any Inspector of Elections
at any meeting of the stockholders of IFG.
This proxy is irrevocable and shall survive the insolvency,
incapacity, death or liquidation of the undersigned.
Dated: March 17, 1998
[STOCKHOLDER]
By:________________________________
Shares and Options to which this Irrevocable Proxy relates:
________ shares of IFG Common Stock
________ Options for shares of IFG Common Stock
