UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SHEDULE 13D
Under the Securities Exchange Act of 1934
Apartment Investment and Management Company
(Name of Issuer)
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Common Stock, Par Value $0.01 Per Share
(Title of Class of Securities)
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03748R101
(CUSIP Number)
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Cornelius J. Dwyer, Jr.
Shearman & Sterling
599 Lexington Avenue
New York, NY 10022
Telephone: (212) 848-7019
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
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May 13, 1999
(Date of Event which requires Filing of this Statement)
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If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check
the following box. [ ]
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Section 240.13d-7 for other
parties to whom copies are to be sent.
*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 ("Act") 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).
<PAGE>
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1. Name of Reporting Person
IRS Identification Nos. of above persons (entities only).
Stichting Pesioenfonds ABP
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2. Check the Appropriate Box if a Member of a Group (See Instruction)
(a) [ ]
(b) [ ]
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3. SEC Use Only
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4. Source of Funds (See Instructions)
00
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5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e)
[ ]
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6. Citizenship of Place of Organization
The Kingdom of the Netherlands
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7. Sole Voting Power
Number of 3,444,800
Shares ------------------------------------------------------
8. Beneficially Shared Voting Power
Owned by
Each 0
Reporting ------------------------------------------------------
9. Person Sole Dispositive Power
With
3,444,800
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10. Shared Dispositive Power
0
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11. Aggregate amount Beneficially Owned by Each Reporting Person
3,444,800
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12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instruction)
[ ]
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13. Percent of Class Represent by Amount in Row (1)
5.27%
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14. Type of Reporting Person (See Instructions)
EP
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Page 2 of 7
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Item 1. Security and Issuer.
This statement relates to the shares of common stock, par value $0.01
per share (the "Common Stock"), of Apartment Investment and Management Company
(the "Issuer"). The Issuer is a real estate investment trust formed in the state
of Maryland and has its principal executive offices located at 1873 South
Bellaire Street, 17th Floor, Denver, Colorado 80222.
Item 2. Identity and Background.
This statement is filed by Stichting Pensioenfonds ABP, an entity
established under the laws of The Kingdom of the Netherlands (the "Fund"), whose
principal business is investing funds held on behalf of public sector employees
of the Kingdom of the Netherlands. The address of the Fund's principal executive
office is Oude Lindestraat 70; Postbus 2889, 6401 DL Heerlen. The Netherlands.
The name, principal occupation, citizenship and business address of each
director and of each executive officer of the Fund are as follows:
PRINCIPAL BUSINESS
NAME OCCUPATION CITIZENSHIP ADDRESS
- ---- ---------- ----------- --------
B. de Vries Independent The Netherlands Oude Lindestraat
Chairman of the 70 6411 EJ
Governing Board Heerlen
The Netherlands
J. Riezenkamp First Vice Chairman The Netherlands Oude Lindestraat
of the Governing 70 6411 EJ
Board Heerlen
The Netherlands
H.J. Albersen Secretary of the The Netherlands Oude Lindestraat
Governing Board 70 6411 EJ
Heerlen
The Netherlands
J.W.E. Neervens Chairman of the The Netherlands Oude Lindestraat
Board of Directors 70 6411 EJ
Heerlen
The Netherlands
J.M.G Frijns Member of the Board The Netherlands Oude Lindestraat
of Directors 70 6411 EJ
Heerlen
The Netherlands
J.F. Maassen Member of the Board The Netherlands Oude Lindestraat
of Directors 70 6411 EJ
Heerlen
The Netherlands
J.H.R. van de Poel Member of the Board The Netherlands Oude Lindestraat
of Directors 70 6411 EJ
Heerlen
The Netherlands
J.M.G Frijns Chief Investment The Netherlands Oude Lindestraat
Officer Managing 70 6411 EJ
Director Heerlen
The Netherlands
W. Borgdorff Managing Director The Netherlands Oude Lindestraat
70 6411 EJ
Heerlen
The Netherlands
Page 3 of 7
<PAGE>
PRINCIPAL BUSINESS
NAME OCCUPATION CITIZENSHIP ADDRESS
- ---- ---------- ----------- --------
R. Coomans Managing Director The Netherlands Oude Lindestraat
70 6411 EJ
Heerlen
The Netherlands
E. van Geideren Managing Director The Netherlands Oude Lindestraat
70 6411 EJ
Heerlen
The Netherlands
J. Mensonides Managing Director The Netherlands Oude Lindestraat
70 6411 EJ
Heerlen
The Netherlands
P.A.W.M. Spijkers Managing Director The Netherlands Oude Lindestraat
70 6411 EJ
Heerlen
The Netherlands
B.C.T.A. Scholts Managing Director The Netherlands Oude Lindestraat
70 6411 EJ
Heerlen
The Netherlands
B. Bos Managing Director The Netherlands Oude Lindestraat
70 6411 EJ
Heerlen
The Netherlands
During the last five years, neither the Fund nor any of its executive
officers or directors has been (i) convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors) or (ii) a party to a civil
proceeding of a judicial or administrative judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, United States federal or state securities laws or finding any violation with
respect to such laws.
Item 3. Source and Amount of Funds or Other Contributions.
On November 6, 1998, the Fund acquired 1,000,000 shares of Class J
Cumulative Convertible Preferred Stock, par value $.01 per share, (the "Class J
Preferred Stock") directly from the Issuer. On May 12, 1999, the Fund received
written notice (the "Conversion Notice Letter") from the Issuer regarding the
conversion of the Fund's 1,000,000 shares of Class J Preferred Stock into
2,500,000 shares of Common Stock. On May 13, 1999, pursuant to the terms of the
Conversion Notice Letter and the Issuer's Articles Supplementary relating to the
Class J Preferred Stock, the Fund's 1,000,000 shares of Class J Preferred Stock
were converted into 2,500,000 shares of Common Stock. Pursuant to such
conversion, the Fund beneficially owned a total of 3,444,800 shares of Common
Stock of the Issuer (approximately 5.27% of the aggregate number of shares of
Common Stock outstanding).
The funds for the purchase of the Class J Preferred Stock by the Fund
and the funds underlying the conversion of the Preferred Stock into Common Stock
were supplied from Dutch public sector pensioners' contributions to the Fund.
Page 4 of 7
<PAGE>
Item 4. Purpose of Transaction.
The Fund has acquired the shares of Common Stock for the purpose of
making an investment in the Issuer and not with the present intention of
acquiring control of the Issuer's business.
The Fund from time to time intends to review its investment in the
Issuer on the basis of various factors, including the Issuer's business,
financial condition, results of operations and prospects, general economic and
industry conditions, the securities markets in general and those for the
Issuer's securities in particular, as well as other developments and other
investment opportunities. Based on such review, the Fund will take such actions
in the future as the Fund may deem appropriate in light of the circumstances
existing from time to time. If the Fund believes that further investment in the
Issuer is attractive, whether because of the market price of the Issuer's
securities or otherwise, it may acquire shares of Common Stock or other
securities of the Issuer either in the open market or in privately negotiated
transactions. Similarly, depending on market and other factors, the Fund may
determine to dispose of some or all of the shares of Common Stock currently
owned by the Fund or otherwise acquired by the Fund either in the open market or
in privately negotiated transactions.
Except as set forth above, the Fund has not formulated any plans or
proposals which relate to or would result in: (a) the acquisition by any person
of additional securities of the Issuer or the disposition of securities of the
Issuer, (b) an extraordinary corporate transaction involving the Issuer or any
of its subsidiaries, (c) a sale or transfer of a material amount of the assets
of the Issuer or any of its subsidiaries, (d) any change in the present board of
directors or management of the Issuer, (e) any material change in the Issuer's
capitalization or dividend policy, (f) any other material change in the Issuer's
business or corporate structure, (g) any change in the Issuer's charter or
bylaws by any person, (h) causing any class of the Issuer's securities to be
deregistered or delisted, (i) a class of equity securities of the Issuer
becoming eligible for termination of registration or (j) any action similar to
any of those enumerated above.
Item 5. Interest in Securities of the Issuer.
(a)-(b) As of the May 13, 1999 the Fund has the sole power to vote and
dispose of 3,444,800 shares of Common stock. Based on information provided by
the Issuer to the Fund on May 13, 1999 the 3,444,800 shares of Common Stock
beneficially owned by the Fund constitute approximately 5.27% of the outstanding
issues. To the knowledge of the Fund, there are no shares of Common Stock which
are beneficially owned by any director or executive officer listed under Item 2.
(c) On May 12, 1999, the Fund acquired 944,800 shares of Common Stock
in the open market.
(d) To the knowledge of the Fund, no other person has the right to
receive or the power to direct the receipt of dividends from, or proceeds from
the sale of, any shares of Common Stock beneficially owned by the Fund.
(e) Not applicable.
Page 5 of 7
<PAGE>
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
Neither the Fund nor any of its executive officers or directors has any
contracts, arrangements or understandings with any person with respect to any
securities of the Issuer.
Item 7. Material to be Filed as Exhibits.
o Exhibit A - Subscription Agreement dated as of November 6, 1998,
between Issuer and the Fund.
o Exhibit B - Conversion Notice Letter dated May 12, 1999
Page 6 of 7
<PAGE>
Signature
After due inquiry and to the best of my knowledge and belief, we
certify that the information set forth in this statement is true, complete and
correct.
STICHTING PENSIOENFONDS ABP
Dated September 24, 1999
By
------------------------------------
Wim Borgdorff
Managing Director
By
------------------------------------
Jean Frijns
Managing Director
Page 7 of 7
<PAGE>
SUBSCRIPTION AGREEMENT
SUBSCRIPTION AGREEMENT, dated as of November 6, 1998, between APARTMENT
INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation (the "Company") and
STICHTING PENSIOENFONDS ABP, an entity established under the laws of The Kingdom
of the Netherlands, whose principal business is investing in funds held on
behalf of public sector employees of The Kingdom of the Netherlands (the
"Purchaser").
W I T N E S S E T H:
WHEREAS, the Company desires to sell to the Purchaser, and Purchaser
desires to purchase from the Company 1,000,000 shares of Class J Cumulative
Convertible Preferred Stock, par value $.01 per share, of the Company (the
"Shares") having the terms and conditions set forth in the Articles
Supplementary to the Charter of the Company, in the form set forth in Exhibit A
hereto (the "Class J Articles Supplementary");
NOW, THEREFORE, in consideration of the representations, warranties and
agreements herein contained, the parties hereto agree as follows:
Section 1. Sale and Purchase. (a) The Company shall adopt and file with
the State Department of Assessments and Taxation of Maryland (the "SDAT") on or
before the Closing Date (as defined below) the Class J Articles Supplementary.
(b) In reliance upon the representations and warranties contained herein and
subject to the terms and conditions hereof, the Company agrees to sell to the
Purchaser, and the Purchaser agrees to purchase, on the Closing Date (as defined
in Section 2), the Shares.
Section 2. Closing.
2.1. Place and Date. The closing of the sale and purchase of the Shares
(the "Closing") shall take place at the office of Skadden, Arps, Slate, Meagher
& Flom LLP, 919 Third Avenue, New York, NY 10022, at 9:00 a.m. New York time on
November 6, 1998, or at such other time and place as the parties to this
Agreement shall agree (the "Closing Date").
2.2. Purchase of Shares. Subject to all of the terms and conditions of
this Agreement, the Purchaser hereby subscribes for and shall purchase, and the
Company shall sell to the Purchaser at the Closing referred to in Section 2.1
hereof, 1,000,000 Shares, at a per share price of $100.00, resulting in an
aggregate purchase price of US$100,000,000 (the "Purchase Price").
2.3. Payment of Purchase Price. Subject to all of the terms and
conditions of this Agreement, the Purchaser shall deliver at the Closing cash in
an amount equal to the Purchase Price by wire transfer in immediately available
funds to such account of the Company
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<PAGE>
as shall be specified by written notice from the Company to ABN AMRO prior to
the Closing Date, in full payment for the Shares.
2.4. Failure of Conditions. If any of the conditions specified in
Section 3 or 4 hereof shall not have been fulfilled when and as required by this
Agreement to be fulfilled, this Agreement may be terminated by either party by
notice to the other party without liability to any other party.
Section 3. Conditions to the Obligations of the Purchaser. The
obligations of the Purchaser under this Agreement are subject to the fulfillment
prior to the Closing of the following conditions:
3.1. Representations and Warranties. The representations and warranties
of the Company set forth herein and in any written statement, certificate or
other instrument delivered to the Purchaser pursuant hereto shall be true and
correct on the Closing Date, and the Purchaser shall have received a certificate
of the chief executive officer or the chief financial officer of the Company,
dated as of the Closing Date, to such effect.
3.2. Performance. The Company shall have performed and complied with
all covenants, agreements and conditions required by this Agreement to be
performed or complied with by it prior to or at the Closing, as the case may be.
3.3. Registration Rights. Simultaneous with the Closing, the Company
and the Purchaser shall have entered into a registration rights agreement (the
"Registration Rights Agreement") in the form set forth in Exhibit B hereto.
3.4. Proceedings and Documents. All proceedings in connection with the
transactions contemplated hereby and all documents and instruments incidental
thereto shall be reasonably satisfactory in substance and form to the Purchaser,
and the Purchaser shall have received all such originals or certified or other
copies of such documents as the Purchaser may reasonably request.
3.5. Opinions of Counsel. The Purchaser shall have received (i) an
opinion of Skadden, Arps, Slate, Meagher & Flom LLP, New York, New York, special
counsel to the Company, or other counsel reasonably satisfactory to the
Purchaser, dated a date not later than the Closing Date in the form set forth in
Exhibit C hereto; (ii) an opinion of Skadden, Arps, Slate, Meagher & Flom, LLP,
Chicago, special tax counsel to the Company, or other counsel reasonably
satisfactory to the Purchaser, dated a date not later than the Closing Date in
the form set forth in Exhibit D hereto; and (iii) an opinion of Piper & Marbury
L.L.P. or other counsel reasonably satisfactory to the Purchaser, as special
Maryland counsel for the Company, dated a date not later than the Closing Date
in the form set forth in Exhibit E hereto.
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<PAGE>
3.6. Material Adverse Change. After the date of this Agreement and
through the Closing Date, there shall not have occurred any material adverse
change, or any act, omission or thing which, in the reasonable opinion of the
Purchaser, could reasonably be expected to result in a material adverse change,
in the business, operations or conditions (financial or otherwise) of the
Company, whether or not arising in the ordinary course of business.
3.7. No Violation. On the Closing Date, the purchase of and payment for
the Shares to be purchased by the Purchaser on the Closing Date shall not be
prohibited by any applicable law or governmental regulation (other than any such
law or regulation of the jurisdiction in which the Purchaser is organized which
was in effect on the date hereof).
Section 4. Conditions to the Obligations of the Company. The
obligations of the Company under this Agreement are subject to the fulfillment
prior to the Closing of the following conditions:
4.1. Representations and Warranties. The representations and warranties
of the Purchaser set forth herein and in any written statement, certificate or
other instrument delivered to the Company pursuant hereto shall be true and
correct on the Closing Date.
4.2. Performance. The Purchaser shall have performed and complied with
all covenants, agreements and conditions required by this Agreement to be
performed or complied with by it prior to or at the Closing, as the case may be.
Section 5. Representations and Warranties of the Company. The Company
represents, warrants and covenants to the Purchaser as follows:
5.1. Status; Power and Authority. The Company is a corporation duly
organized , validly existing and in good standing under the laws of the State of
Maryland and has all requisite power and authority to enter into and perform its
obligations under this Agreement, the Registration Rights Agreement and the
Class J Articles Supplementary (collectively, the "Transaction Documents").
5.2. No Violation or Conflict. The execution and delivery of this
Agreement, the Registration Rights Agreement and the Class J Articles
Supplementary by the Company and the consummation of the transactions
contemplated herein and therein (including the sale and delivery of the Shares)
will not result in a breach by the Company of, or constitute a default by the
Company under (i) the charter or by-laws or any contract, agreement or
instrument to which the Company is a party or by which the Company is bound or
its properties may be subject or (ii) any existing applicable law, rule,
published regulation, judgment, order or decree of any government, governmental
instrumentality or court having jurisdiction over the Company (except for such
breaches or defaults that, singly or in the aggregate, would not result in a
Material Adverse Effect and would not materially impair the Company's ability to
perform its obligations under the Transaction Documents). "Material Adverse
Effect" means any material adverse effect
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<PAGE>
on the business, operations or condition (financial or otherwise) of the Company
and its Subsidiaries, taken as a whole.
5.3. No Default. (a) The Company is not in default in the performance,
observance or fulfillment of any material obligation, covenant or condition
contained in any agreement, contract, commitment, instrument, plan or
undertaking material to the business or assets of the Company (including,
without limitation, any and all leases, mortgages, and other contractual
arrangements with respect to real property) (collectively, the "Contracts") and
(b) no event has occurred which with or without the giving of notice or lapse of
time, or both, would constitute or result in a default thereunder (except, in
the case of each of (a) and (b), for such defaults as would not, individually or
in the aggregate, have a Material Adverse Effect or materially impair the
Company's ability to perform in all material respects its obligations under the
Transaction Documents). Each of the Contracts is valid and enforceable in
accordance with its terms except to the extent that enforcement thereof may be
limited by (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other similar laws now or hereafter in effect relating to creditors'
rights generally and (ii) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity) and except for
those failures of Contracts (or provisions thereof) to be valid or enforceable
which would not, individually or in the aggregate, have a Material Adverse
Effect or materially impair the Company's ability to perform in all material
respects its obligations under the Transaction Documents.
5.4. Shares. The Company has full right, power and authority to issue,
sell, and deliver the Shares as contemplated by this Agreement; and upon such
issuance, sale and delivery, and payment of the Purchase Price therefore as
contemplated by this Agreement, the Purchaser will receive good and valid title
to the Shares purchased by it, free and clear of any pledge, lien, security
interest, charge, claim, equity or encumbrance of any kind and such Shares will
be fully paid and non-assessable, except that there are certain restrictions on
ownership and transfer of the Shares described herein and in Section 11 of the
Class J Articles Supplementary. The shares of Class A Common Stock issuable (or
deliverable from the Company's treasury) upon conversion of the Shares have been
duly authorized and have been reserved for such purpose. Upon such conversion,
the Purchaser will receive the appropriate number of Class A Common Shares free
and clear of any pledge, lien, security interest, charge, claim, equity or
encumbrance of any kind and such Class A Common Shares will be fully paid and
nonassessable.
5.5. Obligations Binding. The Transaction Documents have been duly
authorized by all necessary action on the part of the Company, have been duly
executed and delivered by the Company and constitute the legal, valid and
binding obligations of the Company, enforceable against it in accordance with
the terms hereof and thereof, except as such enforceability may be limited by
(i) bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or
other similar laws now or hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity).
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<PAGE>
5.6. Federal Securities Law Matters. (i) Neither the Company nor any
persons acting on its behalf has engaged or will engage in any directed selling
efforts in the United States within the meaning of Regulation S ("Regulation S")
under the United States Securities Act of 1933, as amended (the "Securities
Act") with respect to the Shares, (ii) the Company has complied with the
offering restriction requirements of Regulation S, (iii) neither the Company,
nor any person acting on its behalf has offered or will offer to sell any of the
Shares by means of any general solicitation or general advertising (as those
terms are used in Regulation D under the Securities Act) or in any manner
involving a public offering within the meaning of Section 4(2) of the Securities
Act and (iv) the Company reasonably believes that there is no "substantial U.S.
market interest" (as such term is defined in Regulation S) in the Shares.
5.7. Investment Company. The Company is not an "investment company",
and is not directly or indirectly controlled by any person which is required to
register as an "investment company", within the meaning of and under the U.S.
Investment Company Act of 1940, as amended, and the transactions contemplated by
this Agreement will not cause the Company to become an "investment company"
subject to registration under such Act.
5.8. REIT Status. The Company is organized in conformity with the
requirements for qualification as a real estate investment trust ("REIT") under
Sections 856 through 860 of the U.S. Internal Revenue Code of 1986, as amended
(the "Code"), and the present and contemplated method of operation of the
Company does and will enable the Company to meet the requirements for taxation
as a REIT under the Code. The Company believes that it is, and expects to
continue to be, a "domestically controlled REIT" under Section 897 of the Code.
5.9. Capitalization. Subject to the Company's adoption of the Class J
Articles Supplementary, the authorized capital stock of the Company consists of
(a) 484,027,500 shares of the Company's Class A Common Stock, par value $0.01
per share; (b) 262,500 shares of the Company's Class B Common Stock, par value
$0.01 per share; (c) 750,000 shares of the Company's Class B Cumulative
Convertible Preferred Stock, par value $0.01 per share; (d) 2,760,000 shares of
the Company's Class C Cumulative Preferred Stock, par value $0.01 per share; (e)
4,600,000 shares of the Company's Class D Cumulative Preferred Stock, par value
$0.01 per share; (g) 10,000,000 shares of the Company's Class E Cumulative
Convertible Preferred Stock, par value $0.01 per share; (h) 4,050,000 shares of
the Company's Class G Cumulative Preferred Stock, par value $0.01 per share; (i)
2,300,000 shares of the Company's Class H Cumulative Preferred Stock, par value
$0.01 per share. All of the issued and outstanding shares of capital stock of
the Company have been duly and validly authorized and issued and are fully paid
and are nonassessable.
5.10. No Registration Under the Securities Act. Assuming (i) the
accuracy of the Purchaser's representations and warranties set forth in Section
6, and (ii) the due performance by the Purchaser of its covenants and agreements
contained herein, it is not necessary in connection with the offer, sale and
delivery of the Class J Preferred Shares in the manner
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contemplated by this Agreement to register the Class J Preferred Shares under
the Securities Act of 1933, as amended (the "Securities Act").
5.11. Financial Statements. The financial statements and supporting
schedules included in the Company's periodic filings filed pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), are complete
and correct in all material respects and present fairly in all material respects
the consolidated financial position of the Company and its consolidated
Subsidiaries (as defined below) as of the dates specified (subject to normal
year-end audit adjustments in the case of unaudited interim financial
statements) and the consolidated results of their operations for the periods
specified (subject to normal year-end audit adjustments in the case of unaudited
interim financial statements); such financial statements, including the related
schedules and notes thereto, were prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis during the periods
involved, except as indicated therein or in the notes thereto. As used in this
Agreement, "Subsidiaries" shall mean any entity which would be a subsidiary of
the Company for the purposes of GAAP as applied in the United States.
5.12. Exchange Act Compliance. The Company has timely filed all
documents required to be filed with the Commission pursuant to the Exchange Act.
All such documents, when so filed, complied in form and substance in all
material respects with such acts and did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
5.13. No Material Adverse Changes. Since the date that the Company
filed its most recent annual report on Form 10-K pursuant to the Exchange Act,
except as stated in, or contemplated by, such annual report or by any other
report filed by the Company under the Exchange Act since such date through the
date hereof (collectively, the "Exchange Act Reports") or this Agreement: (i)
there has been no material adverse change in the business, operations or
financial condition of the Company and its Subsidiaries considered as one
enterprise, or in the earnings or the ability to continue to conduct business in
the usual and ordinary course of the Company and its Subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of business, other
than changes affecting REITs and real estate generally; and (ii) except for the
transactions contemplated by this Agreement or the Exchange Act Reports, there
has been no material transaction entered into by the Company or any of its
Subsidiaries other than (a) transactions in the ordinary course of business or
(b) transactions which are not material in relation to the Company and its
Subsidiaries considered as one enterprise; and (iii) there have not been any
changes in the capital stock (except as set forth in Section 5.9) or any
material increases in the debt of the Company or any of its Subsidiaries.
5.14. Litigation. Except as described in any Exchange Act Report, there
is no action, suit or proceeding (whether or not purportedly on behalf of the
Company or any of its Subsidiaries) before or by any court or governmental
agency or body, domestic or foreign, now
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pending or, to the knowledge of the Company, threatened against or affecting the
Company or any of its Subsidiaries, which either alone or in the aggregate,
could reasonably be expected to have a Material Adverse Effect or materially
impair the Company's ability to perform in all material respects its obligations
under the Transaction Documents.
5.15. Title to Properties; Leasehold Interests. (a) Except as disclosed
in the Exchange Act Reports, or except to the extent that the inaccuracy of any
of the following, either individually or in the aggregate, would not have a
Material Adverse Effect: (i) the Company, through one or more Subsidiaries, has
good and marketable title to all real properties and all other assets that are
required for the effective operation of the Company's business in the manner in
which they currently are operated, in each case, subject only to Permitted
Exceptions (as herein defined); (ii) all leases under which the Company or any
of its Subsidiaries leases any property that is material to the business of the
Company and its Subsidiaries taken as a whole is in full force and effect, and
neither the Company nor any such Subsidiary is in default in any material
respect of any of the terms or provisions of any of such leases and to the
Company's knowledge no claim has been asserted by anyone adverse to any such
entity's rights as lessee under any of such leases, or affecting or questioning
any such entity's right to the continued possession or use of the properties
under any such leases or asserting a default under any such leases; and (iii)
all liens, charges or encumbrances on or affecting any of the property and
assets of the Company and its Subsidiaries which are required to be disclosed in
the Company's periodic reports filed pursuant to the Exchange Act are disclosed
therein;
(b) As used in this Agreement, "Permitted Exceptions" means: (i) real
estate taxes and assessments not yet delinquent; (ii) covenants, restrictions,
easements and other similar agreements, provided that the same are not violated
in any material respect by existing improvements or the current use and
operation of the Company's or any Subsidiary's property; (iii) zoning laws,
ordinances and regulations, building codes, rules and other governmental laws,
regulations, rules and orders affecting any of the Company's or any Subsidiary's
property, provided that the same are not violated in any material respect by
existing improvements or the current use and operation of such property; (iv)
any imperfection of title which does not materially and adversely affect the
current use, operation or enjoyment of any of the Company's or any Subsidiary's
real property and does not render title to such real property unmarketable or
uninsurable an does not materially impair the value of such property; and (v)
mortgage financing.
5.16. Environmental Compliance.
(a) Except as disclosed in Schedule 5.16, the operations and properties
of the Company and its Subsidiaries comply in all respects with all
Environmental Statutes (as defined below), except such non-compliance as would
not result in liability which could reasonably be expected to result in a
Material Adverse Effect.
(b) Except as described in Schedule 5.16, the Company and its
Subsidiaries have obtained and maintained all material licenses, permits,
authorizations and registrations
7
<PAGE>
required under any Environmental Statute ("Environmental Permits"). All such
Environmental Permits are in good standing, and the Company and its Subsidiaries
are in compliance with all terms and conditions thereof, except where the
failure to be in compliance could not reasonably be expected to have a Material
Adverse Effect.
(c) Except as specifically disclosed in Schedule 5.16, there are no
outstanding written orders from or agreements with any Governmental Authority
(as defined below) nor any judicial or docketed administrative proceedings
respecting any Environmental Statute, Environmental Claim (as defined below) or
Hazardous Material (as defined below) to which the Company or any of its
Subsidiaries, or any of their properties or operations, is subject that could
reasonably be expected to have a Material Adverse Effect.
(d) Except as disclosed in Schedule 5.16, there are no Hazardous
Materials or other conditions or circumstances existing with respect to any of
the properties of the Company or its Subsidiaries, or arising from operations
prior to the Closing Date, that would reasonably be expected to give rise to
Environmental Claims for any such condition, circumstance or property that could
reasonably be expected to have a Material Adverse Effect. In addition, (i) there
are not located on any of the properties owned by the Company or its
Subsidiaries underground storage tanks (x) that are not properly registered or
permitted under applicable Environmental Statutes, or (y) that are leaking or
emitting Hazardous Materials whether on-or off-site, and (ii) the Company and
its Subsidiaries have notified all of their employees of the existence, if any,
of any health hazard arising from the conditions of their employment to the
extent required under any Environmental Statutes and have met all notification
requirements under Title III of CERCLA (as defined below) and all other
Environmental Statutes, in each case with respect to any property owned by the
Company or its Subsidiaries, that could reasonably be expected to have a
Material Adverse Effect.
(e) As used herein, "Hazardous Material" shall include without
limitation any flammable explosives, radioactive materials, hazardous materials,
hazardous wastes, toxic substances or related materials, asbestos or any
hazardous material as defined by any federal, state or local environmental law,
ordinance, rule or regulation, including without limitation the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. Sections 9601 et seq. ("CERLA"), the Hazardous Materials Transportation
Act, as amended, 49 U.S.C. Sections 1801 et seq., the Resource Conservation and
Recovery Act, as amended, 42 U.S.C. Sections 9601 et seq., the Emergency
Planning and Community Right-to-Know Act of 1986, 42 U.S.C. Sections 11001 et
seq., the Toxic Substances Control Act, 15 U.S.C. Sections 2601 et seq., the
Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. Sections 136 et
seq., the Clean Air Act, 42 U.S.C. Sections 7401 et seq., the Clean Water Act
(Federal Water Pollution Control Act), 33 U.S.C. Sections 1251 et seq., the Safe
Drinking Water Act, 42 U.S.C. Sections 300F to 300j-11, and the Occupational
Safety and Health Act, 29 U.S.C. Sections 651 et seq., as any of the above
statutes may be amended from time to time, and in the regulations adopted and
publications promulgated pursuant to each of the foregoing (individually, an
"Environmental Statute") or by any federal, state or local governmental
authority having or claiming jurisdiction over the properties and
8
<PAGE>
assets described in the Company's Exchange Act Reports (a "Governmental
Authority"). As used herein, "Environmental Claims" means all claims, however
asserted, by any Governmental Authority or other person alleging potential
liability or responsibility for violation of any Environmental Statute or for
release or injury to the environmental or threat to public health, personal
injury (including sickness, disease or death), property damage, natural
resources damage, or otherwise alleging liability or responsibility for damages
(punitive or otherwise), cleanup, removal, remedial or response for damages
(punitive or otherwise), cleanup, removal, remedial or response costs,
restitution, civil or criminal penalties, injunctive relief, or other type of
relief, resulting from or based upon (a) the presence, placement, discharge,
emissions or release (including intentional and unintentional, negligent and
non-negligent, sudden or non-sudden, accidental or non-accidental placement,
spills, leaks, discharges, emissions or releases) of any Hazardous Material at,
in, or from any property owned by the Company or any of its Subsidiaries or (b)
any other circumstances forming the basis of any violation, or alleged
violation, of any Environmental Statute.
5.17. Taxes.
The Company and its Subsidiaries have filed or caused to be filed all
federal, state, local, foreign and other tax returns, reports, information
returns and statements (except for returns, reports, information returns and
statements the failure to file which will not result in any Material Adverse
Effect) required to be filed by them. The Company and its Subsidiaries have paid
or caused to be paid all taxes (including interest and penalties) that are shown
as due and payable on such returns or claimed in writing by any taxing authority
to be due and payable with respect to such returns, except those which are being
contested by them in good faith by appropriate proceedings and in respect of
which adequate reserves are being maintained on their books in accordance with
generally accepted accounting principles consistently applied. The Company and
its Subsidiaries do not have any material liabilities for taxes other than those
incurred in the ordinary course of business and in respect of which adequate
reserves are being maintained by it in accordance with generally accepted
accounting principles consistently applied. No material deficiency assessment
with respect to or proposed material adjustment of the Company's or any of its
Subsidiaries' federal, state, local, foreign or other tax returns is pending or,
to the best of the Company's or any of its Subsidiaries' knowledge, threatened
in writing. There is no tax lien, whether imposed by any federal, state, local
or other tax authority, outstanding against the assets, properties or business
of the Company other than statutory liens in respect of taxes that are not
delinquent. There are no applicable taxes, fees or other governmental charges
payable by the Company or any of its Subsidiaries in connection with the
execution and delivery of any Transaction Document or the issuance by the
Company of the Shares or the shares of Class A Common Stock.
5.18. Insurance. The Company and its Subsidiaries each carry or is
entitled to the benefits of insurance in such amounts and covering such risks as
is reasonably sufficient under the circumstances or is customary in the industry
and all such insurance is in full force and effect.
9
<PAGE>
5.19. Employees; ERISA. There is no strike or work stoppage existing
or, to the knowledge of the Company, threatened against the Company or its
Subsidiaries. The Company does not have any knowledge as to any intentions of
any key employees or any group of employees to leave the employ of the Company
where such departure would have a Material Adverse Effect. Other than as
disclosed in any Exchange Act Report, the Company has not established,
sponsored, maintained, made any contributions to or been obligated by law to
establish, maintain, sponsor or make any contributions to any "employee pension
benefit plan" or "employee welfare benefit plan" (as such terms are defined in
the Employee Retirement Income Security Act of 1974, as amended ("ERISA")),
including, without limitation, any "multi-employer plan." The Company is in
compliance with all applicable law relating to the employment of labor,
including bargaining and the payment of Social Security and other taxes, and
with ERISA, except where the failure to so comply would not have a Material
Adverse Effect.
5.20. Governmental Consent. Other than such consents as have already
been obtained or made or which will be made at or prior to the Closing Date, no
consent, approval or authorization of, or declaration or filing with, any
governmental authority on the part of the Company is required for the valid
execution, delivery or performance of any of the Transaction Documents or the
valid offer, issue, sale and delivery of the Shares pursuant to this Agreement
and the Class J Articles Supplementary.
Section 6. Representations and Warranties of the Purchaser. The
Purchaser represents, warrants and covenants to the Company as follows:
6.1. Organization and Standing. The Purchaser has all requisite power
and authority to enter into and perform its obligations under this Agreement and
the Registration Rights Agreement.
6.2. Agreement. This Agreement and the Registration Rights Agreement
have been duly authorized by all necessary action on the part of the Purchaser,
have been duly executed and delivered by the Purchaser and constitute the legal,
valid and binding obligations of the Purchaser, enforceable against the
Purchaser in accordance with their terms, except as such enforceability may be
limited by (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other similar laws now or hereafter in effect relating to creditors'
rights generally and (ii) general principles of equity (regardless of whether
enforeceability is considered in a proceeding at law or in equity).
6.3. Governmental and Other Consents. No consent, approval or
authorization of, or registration, qualification, designation, declaration or
filing with, any governmental authority or any other person is required to be
obtained by the Purchaser in connection with the execution, delivery or
performance of this Agreement or the Registration Rights Agreement by the
Purchaser or of any of the transactions contemplated hereby or thereby.
10
<PAGE>
6.4. ERISA Matters. None of the funds proposed to be used by the
Purchaser to purchase any Shares constitutes assets of an employee benefit plan
within the meaning of ERISA.
6.5. Investment Representation; Transfer Restrictions. The Purchaser is
acquiring the Shares for its own account and not with a view to, or for sale in
connection with, any distribution thereof. The Purchaser understands that the
Shares are being offered in a transaction not involving any public offering in
the United States within the meaning of the Securities Act, that the Shares have
not been and will not be registered under the Securities Act (except in
accordance with the Registration Rights Agreement) and that (i) if it decides to
resell, pledge or otherwise transfer such Shares, such Shares may be offered,
resold, pledged or otherwise transferred only (A) pursuant to an effective
registration statement under the Securities Act, (B) outside the United States
to a non-U.S. person in a transaction meeting the requirements of Rule 903 or
904 of Regulation S under the Securities Act, (C) to the Company or its
affiliates, (D) to a person whom the Purchaser reasonably believes is a
qualified institutional buyer in a transaction meeting the requirements of Rule
144A under the Securities Act, (E) to an institutional "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities
Act) pursuant to an exemption from the registration requirements of the
Securities Act, if available (subject, in certain cases, to satisfaction of
certain conditions set forth in the letter set forth as Exhibit F to this
Agreement (the "Purchaser's Letter") or (F) pursuant to an exemption from
registration provided by Rule 144 under the Securities Act (if applicable), in
each of the foregoing cases in accordance with any applicable securities laws of
any applicable jurisdiction and subject to the restrictions on ownership and
transfer set forth in Section 11 of the Class J Articles Supplementary; and (ii)
the Purchaser will, and each subsequent holder is required to, notify any
subsequent purchaser from it of the resale restrictions set forth in Section 11
of the Class J Articles Supplementary and any other resale restrictions that are
then effective under this Agreement or the Purchaser's Letter.
6.6. Ownership. No individual owns, directly or indirectly, more than a
five percent beneficial interest in the Purchaser.
6.7. No Violation. As of the date of this Agreement, the purchase of
and payment for the Shares to be purchased by the Purchaser on the Closing Date
is not prohibited by any applicable law or governmental regulation of the
jurisdiction in which the Purchaser is organized.
6.8. Compliance with Other Instruments. The execution, delivery and
performance of this Agreement and the Registration Rights Agreement by the
Purchaser and the consummation by the Purchaser of the transactions contemplated
hereby and thereby do not (i) result in a violation of the Purchaser's
constituent documents or (ii) conflict with, or constitute a default under (or
an event which with notice or lapse of time or both would become a default), or
give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Purchaser
is a party, or result in a violation of
11
<PAGE>
any law, rule, regulation, order, judgment or decree applicable to the Purchaser
or by which any property or asset of the Purchaser is bound or affected (except
for such conflicts, defaults, terminations, amendments, accelerations,
cancellations and violations that, singly or in the aggregate, would not result
in a material adverse effect and would not materially impair the Purchaser's
ability to perform its obligations under this Agreement and the Registration
Rights Agreement).
6.9. Sophisticated Investor. In the normal course of its business or
its investing activities, the Purchaser invests in or purchases Shares similar
to the Class J Preferred Shares or the Class A Common Stock and it has such
knowledge and experience in financial and business matters that it is capable of
evaluating the merits and risks of purchasing such securities. The Purchaser is
aware that it may be required to bear the economic risk of an investment in the
Class J Preferred Shares or the Class A Common Stock into which such shares are
convertible for an indefinite period of time and is able to bear such risk for
an indefinite period.
6.10. Ownership Limitations. The Purchaser has received a copy of the
Company's Articles of Restatement, as amended (the "Articles of Restatement"),
and understands the restrictions on transfer and ownership of the Company's
capital stock included therein. The Purchaser's acquisition of the Shares will
not violate the Ownership Limit (as defined in the Articles of Restatement).
6.11. Access to Information. The Purchaser has had access to such
financial and other information concerning the Company and its affiliates and
the Shares and the Class A Common Stock as it deemed necessary in connection
with its decision to purchase any of the Shares, including an opportunity to ask
questions and request information from the Company.
Section 7. Covenants of the Company.
7.1. Class A Common Stock. The Company covenants and agrees that it
shall at all times reserve and keep available, free from preemptive rights, out
of the aggregate of its authorized but unissued Class A Common Stock solely for
the purpose of effecting conversion of the Shares as provided in the Class J
Articles Supplementary, the full number of shares of Class A Common Stock as
shall then be deliverable upon the conversion of all outstanding Shares not
theretofore converted into Class A Common Stock. Such shares of Class A Common
Stock shall, when issued or delivered in accordance with the Class J Articles
Supplementary, be validly issued and fully paid and non-assessable.
7.2. Certification of Domestic Control. The Company covenants and
agrees that, upon the request of the Purchaser, it shall use its best efforts
promptly to deliver to the Purchaser a certificate of the chief executive
officer or the chief financial officer of the Company pursuant to Treasury
Regulation 1.897-2(h) stating that, to his knowledge and belief, consistent with
the Company's description of its status as a domestically-controlled REIT in its
Exchange Act Reports, and using the same methodology as it uses to determine
such status for purposes of
12
<PAGE>
such filings, the Company believes that the Shares or the Class A Common Stock,
as the case may be, are not United States real property interests under the
Code.
7.3. Maintenance of REIT Status. So long as any of the Shares or the
shares of Class A Common Stock remain issued and outstanding, the Company shall
use its best efforts to continue to be taxed as a REIT pursuant to Section 856
through 860 of the Code.
7.4. Additional Amounts.
(a) The Company will pay to the Purchaser such additional amounts (the
"Additional Amounts") as may be necessary in order that the net payment of
dividends paid by the Company to the Purchaser with respect to the Shares, other
than dividends realized or deemed realized for tax purposes from gains realized
by the Company on the disposition of real property situated in the United States
(the "Ordinary Dividends"), after deduction or withholding, for or on account
of, any present or future gross income or withholding tax, now or hereafter
imposed, levied, collected, withheld or assessed by the United States of
America, or any state or other political subdivision thereof (for the purposes
of this Section 7.4, a "Governmental Authority"), excluding net income taxes and
franchise taxes imposed on Purchaser as a result of a present or former
connection between such Purchaser and the jurisdiction of the Governmental
Authority imposing such tax (other than any such connection arising solely from
such Purchaser having executed, delivered or performed its obligations or
received a payment under, or enforced, this Agreement or any other documents
pertaining to the acquisition of the Shares) will not be less than the amount of
Ordinary Dividends that the Purchaser would have received with respect to the
Shares absent such deduction or withholding of taxes on the Ordinary Dividend
and the Additional Amount. If any such gross income or withholding tax
("Non-Excluded Taxes") are required to be deducted or withheld from any Ordinary
Dividend payable to the Purchaser, the Company shall, within 60 days of the
applicable Dividend Payment Date (as defined in the Class J Articles
Supplementary) with respect to such Ordinary Dividend, pay the Additional
Amounts to the Purchaser, to the extent the Company shall have funds legally
available therefor.
(b) Whenever any Non-Excluded Taxes are required to be deducted or
withheld by the Company, as promptly as reasonably possible thereafter, the
Company shall send to the Purchaser a certified copy of an original official
receipt received by the Company showing payment thereof to the extent available.
If the Company fails to pay any Non-Excluded Taxes when due to the appropriate
taxing authority or fails to remit to the Purchaser the required receipts or
other required documentary evidence, the Company shall indemnify the Purchaser
for any incremental taxes, interest or penalties that may become payable to the
Purchaser as a result of any such failure, provided however, that any such
indemnification by the Company to the Purchaser shall be by the Company to the
Purchaser within 60 days of the Purchaser providing the Company a written notice
establishing the amount and basis for such incremental taxes, interest or
penalties.
13
<PAGE>
(c) The Company and the Purchaser intend to treat an Ordinary Dividend
as not being subject to any Non-Excluded Taxes and shall take no position
contrary thereto in any tax return, any proceeding before any taxing authority
or otherwise. The Purchaser shall deliver to the Company two copies of any
certification, identification or any other document or information required
concerning the nationality, residence, identity, classification, status as an
exempt pension trust, or connection with the United States of the Purchaser or
beneficial owner of the Shares properly completed and duly executed by the
Purchaser claiming complete exemption from U.S. federal withholding tax on
Ordinary Dividends by the Company pursuant to Article 35 of the treaty between
the Government of the United States of America and the Government of the Kingdom
of the Netherlands signed December 18, 1992, as amended (the "Treaty"). The
Purchaser shall deliver such certificate or other document referred to in the
proceeding sentence prior to the first Dividend Payment Date. In addition, the
Purchaser shall deliver a replacement certificate or other document promptly
upon the obsolescence or invalidity of any certificate or other document
previously delivered by the Purchaser. The Purchaser shall promptly notify the
Company at any time it determines that it is no longer in a position to provide
any previously delivered certificate or document to the Company (or any other
form of certification or other document adopted by the Governmental Authorities
for such purpose).
(d) Notwithstanding anything herein to the contrary including, but not
limited to, Section 13 of this Agreement, the agreements contained in this
Section 7.2 shall be for the sole and exclusive benefit of the Purchaser and
shall not inure to the benefit of the successors, assigns and subsequent
acquirors of the Shares from the Purchaser.
(e) Notwithstanding anything else herein to the contrary, the Company
shall not be required to pay Additional Amounts to the Purchaser pursuant to
paragraph (a) of this Section or to indemnify Purchaser for any incremental
taxes, interest or penalties pursuant to paragraph(b) of this Section (i) if,
and to the extent that, any such deduction or withholding on Non-Excluded Taxes
or incremental taxes, interest or penalties of the Purchaser results directly or
indirectly from the Purchaser's failure to comply with the requirements of
paragraph (c) of this Section, or (ii) if, and to the extent that, any such
deduction or withholding of Non-Excluded Taxes or incremental taxes, interest,
or penalties of the Purchaser results directly or indirectly from a change in,
or different administrative or judicial interpretation of, law including a
change in, or different administrative or judicial interpretation of, the laws
of the United States of America or any political subdivision thereof (including,
but not limited to, the Internal Revenue Code of 1986, as amended), the laws of
the Kingdom of the Netherlands, or any political subdivision thereof or the
Treaty.
Section 8. Look-Through Entity. The Purchaser and the Company agree
that notwithstanding anything in this Agreement, the Transaction Documents or
the Articles of Restatement to the contrary, in connection with the application
of the restrictions on ownership and transfer of shares of Class A Common Stock
set forth in the Articles of Restatement, the Purchaser or any party related
thereto shall not be treated as a "Look-Through Entity" for purposes of the
Articles of Restatement without regard to whether the Purchaser or a party
14
<PAGE>
related thereto, as the case may be, is or subsequently becomes (1) an entity
described in Section 401(a) of the Code as provided under Section 856(h)(3) of
the Code or (2) registered under the Investment Company Act of 1940.
Section 9. Restrictions on Transfer The Purchaser understands and
agrees that any certificates evidencing the Shares purchased pursuant to this
Agreement shall be stamped or endorsed with legends in the form set out in
Section 11 of the Class J Articles Supplementary, and the Purchaser shall be
subject to the provisions of such legends.
Section 10. Survival of Representations and Warranties. The
representations and warranties of the parties hereto contained in this Agreement
or otherwise made in writing in connection with the transactions contemplated
herein shall survive the making of this Agreement and sale of the Shares.
Section 11. Notices. All notices and other communications hereunder
shall be in writing and shall be delivered by hand or sent by first-class mail,
postage pre-paid, or by telecopy, as follows:
If to the Purchaser, at:
P.O. Box 2889
6401 DJ Heerien
The Netherlands
and
ABP Investments
Schiphol Boulevard 239
Tower B 6th Floor
1118 BH Schiphol Airport
The Netherlands
Facsimile: 31-45-579-2194
Attention: Peter Wittendorp
and
ABP Investments
450 Lexington Avenue
Suite 1800
New York, New York 10017
Facsimile: (212) 338-9421
Attention: Barden Gale
15
<PAGE>
If to the Company, at:
Apartment Investment
and Management Company
1873 South Bellaire Street, 17th Floor
Denver, Colorado 80222
Facsimile: (303) 504-4889
Attention: Terry Considine
and
Apartment Investment
and Management Company
18350 Mt. Langley Avenue
Suite 220
Fountain Valley, California 92708
Facsimile: (714) 593-1603
Attention: Peter Kompaniez
with a copy to:
Skadden, Arps, Slate, Meagher
& Flom LLP
919 Third Avenue
New York, New York 10022
Facsimile: (212) 735-2000
Attention: Susan J. Sutherland, Esq.
or, in each case, at such address and to the attention of such person as either
party shall have furnished to the other by notice.
Section 12. Entire Agreement. This Agreement constitutes the entire
understanding between the parties hereto. This Agreement may be modified or
terminated only by an instrument in writing signed by the parties hereto.
Section 13. Successors and Assigns. This Agreement shall be binding on
and shall inure to the benefit of the successors and assigns of the parties
hereto.
Section 14. Headings. The headings of the sections of this Agreement
are solely for convenience of reference and shall not affect the meaning of any
of the provisions hereof.
Section 15. Governing Law. This Agreement shall be governed by the laws
of the State of New York applicable to contracts made and fully performed in New
York, provided,
16
<PAGE>
however, that matters relating to the issuance of Class J Preferred Stock, the
terms of the Class J Preferred Stock and other internal corporate matters
relating to the Company shall be governed by the laws of the State of Maryland.
Section 16. Counterparts. This Agreement may be executed in one or more
separate counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
Section 17. Issuance and Other Taxes. The Company shall pay or cause to
be paid all stamp, stamp duty, stamp duty reserve, documentary, registration,
transfer or similar taxes required to be paid in connection with the issuance
and sale to the Purchaser of the Shares, and shall have caused all appropriate
stock transfer tax stamps to be affixed to the certificates representing the
Shares so sold and delivered. The Company shall file, independently or jointly
with the Purchaser, as the law requires, all transfer tax filings required to be
filed by it in connection with the sale and delivery to Purchaser of the Shares.
Section 18. No Delay; Waiver. No delay on the part of any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver on the part of any party of any such right, power
or privilege, preclude any further exercise thereof or the exercise of any other
such right, power or privilege.
Section 19. Severability. If any provision of this Agreement, or the
application of any such provision to any person or circumstance, shall be held
invalid by a court of competent jurisdiction, the remainder of this Agreement,
or the application of such provision to persons or circumstances other than
those as to which it is held invalid, shall not be affected thereby.
Section 20. Appointment of Agent for Service, Waiver or Immunity. The
Company represents to the Purchaser that it has appointed CSC, 2 World Trade
Center, suite 8746, New York, New York 10048 as the authorized agent of the
Company for service of process in any action, suit or proceeding against the
Company instituted by the Purchaser based on or arising under this Agreement in
any Federal or state court in the State of New York, and expressly accepts the
non-exclusive jurisdiction of any such court in respect of any such suit or
proceeding. The Company represents to the Purchaser that it has notified CSC of
such designation and appointment and that CSC has accepted the same in writing.
The Company agrees to take any and all action, including the execution and
filing of all such instruments and documents, as may be necessary to continue
such designation and appointment in full force and effect for so long as the
Shares remain outstanding from the Closing Date.
Section 21. Exchange Act Reports. The Company will deliver (in
duplicate) to the Purchaser, so long as the Purchaser shall hold any of the
Shares, promptly upon transmission thereof, copies of all financial statements,
proxy statements, reports and returns sent by the Company to any class of its
stockholders and of all registration statements and regular and
17
<PAGE>
periodic reports, if any, filed by the Company with the Commission or any
governmental authority succeeding to the functions of such Commission.
Section 22. Inspection. The Company will permit any authorized
representatives designated by the Purchaser (so long as the Purchaser shall hold
any of the Shares) at the Purchaser's expense, to visit and inspect any of the
properties of the Company or any of its Subsidiaries, and to discuss its and
their affairs, finances and accounts with its and their officers, all at such
reasonable times and as often as may be reasonably requested.
Section 23. Lost, etc. Certificates. Upon receipt of evidence
satisfactory to the Company of the loss, theft, destruction or mutilation of any
certificate representing any of the Shares and, in case of any such loss, theft
or destruction, upon delivery of indemnity satisfactory to the Company, or in
case of any such mutilation, upon surrender and cancellation of such
certificate, the Company will at its expense make and deliver a new certificate,
of like tenor, in lieu of such lost, stolen, destroyed or mutilated certificate.
Upon surrender of any certificate representing any of the Shares to the Company
as its principal office, the Company at its expense will issue in exchange
therefor and deliver to the holder of the surrendered certificate a new
certificate or certificates, in such denomination or denominations as may be
requested by such holder.
18
<PAGE>
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of
the date first above written.
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
By:
--------------------------------------
Name:
Title:
STICHTING PENSIOENFONDS ABP
By:
--------------------------------------
Name:
Title:
19
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
By:
--------------------------------------
Name:
Title:
STICHTING PENSIOENFONDS ABP
By:
--------------------------------------
Name: E. van Gelderen
Title: Managing Director
By:
--------------------------------------
Name: R. Cocmans
Title: Managing Director
20
<PAGE>
Apartment Investment and Management Company
1873 South Bellaire Street, 17th Floor
Denver, Colorado 80222
May 12, 1999
BY FACSIMILE AND FIRST CLASS MAIL
Stichting Pensioenfonds ABP
P.O. Box 2889
6401 DJ Hleerien
The Netherlands
ABP Investments ABP Investments
Schiphol Boulevard 239 450 Lexington Avenue
Tower B 6th Floor Suite 1800
1118 BH Schiphol Airport New York, New York 10017
The Netherlands Facsimile: (212) 338-9421
Facsimile: 31-45-579-2194 Attention: Barden Gale
Attention: Mr. Peter Wittendorp
Re: Class J. Cumulative Convertible Preferred Stock of
Apartment Investment and Management Company
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Ladies and Gentlemen:
Reference is made to the Articles Supplementary (the "Articles") relating
to the Class J Cumulative Convertible Preferred Stock, par value $.01 per share,
of Apartment Investment and Management Company, a Maryland corporation (the
"Corporation"). Capitalized terms used but not otherwise defined herein shall
have the respective meanings ascribed thereto in the Articles. Pursuant to
Section 7.2 of the Articles, the Corporation hereby notifies you as follows:
(i) As of May 12, 1999, the Internal Rate of Return exceeds 12.5%, and the
Corporation hereby exercises its right to require that all of the shares of
Class J Preferred Stock held by Stichting Pensioenfonds ABP, an entity organized
under the laws of the Kingdom of the Netherlands ("ABP"), be converted into
shares of Class A Common Stock.
(ii) The date of conversion is May 13, 1999.
(iii) The number of shares of Class J Preferred Stock to be converted is
1,000,000.
(iv) The current Conversion Price is $40.
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(v) Accordingly, ABP will be entitle to receive 2,500,000 shares of Class A
Common Stock in exchange for the 1,000,000 converted shares of Class J Preferred
Stock.
In accordance with Section 7.2 of the Articles, upon receiving this notice
of conversion, please surrender the certificate(s) representing such shares of
Class J Preferred Stock, duly endorsed or assigned to the Corporation or in
blank, at the office of the Corporation. Unless the shares issuable on
conversion are to be issued in the name of ABP, each such share shall be
accompanied by instruments of transfer, in form satisfactory to the Corporation,
duly executed by ABP or ABP's duly authorized attorney and an amount sufficient
to pay any transfer or similar tax (or evidence reasonable satisfactory to the
Corporation demonstrating that such taxes have been paid).
As promptly as practicable after the surrender of certificates for shares
of Class J Preferred Stock as aforesaid, and in any event no later than three
business days after the date of such surrender, the Corporation will issue and
deliver to ABP, or send on ABP's written order, a certificate or certificates
for 2,500,00 shares of Class A Common Stock in accordance with the provisions of
Section 7.2 of the Articles.
The conversion shall be deemed to have been effected immediately prior to
the close of business on the date identified above as the conversion date, and
the Person or Persons in whose name or names any certificate or certificates for
shares of Class A Common Stock shall be issuable upon conversion shall be deemed
to have become the holder of holders of record of the shares represented thereby
at such time on such date.
Pursuant to Section 7.2 of the Articles, ABP shall, as of the date hereof,
be entitled to receive a cash payment in respect of any dividends (whether or
not earned or declared) that are accumulated, accrued and unpaid on such shares
of Class J Preferred Stock as of the time of such conversion (except that
payment in respect of any divided on such shares that has been declared but for
which the Divided Payment Date has not yet been reached shall be payable as of
such Divided Payment Date).
If you have any questions, please contact me at (714) 593-1733 or Paul
McAuliffe at (201) 291-2826.
Very truly yours,
Peter Kompaniez
President
