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 Properties Trust
(Name of Issuer)
Common Shares of Beneficial Ownership, $.01 par value
(Title of Class and Securities)
45767U 10 1
(CUSIP Number)
Patrick J. Foye Copy to:
Apartment Investment and Michael V. Gisser, Esq.
Management Company Skadden, Arps et al.
1873 South Bellaire Street 300 South Grand Avenue
17th Floor Los Angeles, California 90071
Denver, Colorado 80222 (213) 687-5213
(303) 757-8101
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
October 1, 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. 45767U 10 1 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) (x)
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(3) SEC USE ONLY
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(4) SOURCE OF FUNDS*
N/A
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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
NUMBER OF 0
SHARES ---------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY 21,821,283
EACH ---------------------------------
REPORTING (9) SOLE DISPOSITIVE POWER
PERSON 11,886,808
WITH ---------------------------------
(10) SHARED DISPOSITIVE POWER
9,934,475
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(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
21,821,283
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(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* ( )
- ------------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
65.4 %
- ------------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
CO
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CUSIP No. 45767U 10 1 13D
- ------------------------------------------------------------------------
(1) NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY)
AIMCO-GP, Inc.
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(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) ( )
(b) (x)
- ------------------------------------------------------------------------
(3) SEC USE ONLY
- ------------------------------------------------------------------------
(4) SOURCE OF FUNDS*
N/A
- ------------------------------------------------------------------------
(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
Delaware
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(7) SOLE VOTING POWER
NUMBER OF 0
SHARES ---------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY 9,934,475
EACH ---------------------------------
REPORTING (9) SOLE DISPOSITIVE POWER
PERSON 0
WITH ---------------------------------
(10) SHARED DISPOSITIVE POWER
9,934,475
- ------------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
21,821,823
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(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* ( )
- ------------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
65.4 %
- ------------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
CO
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CUSIP No. 45767U 10 1 13D
- ------------------------------------------------------------------------
(1) NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY)
AIMCO Properties, L.P.
- -----------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) ( )
(b) (x)
- ------------------------------------------------------------------------
(3) SEC USE ONLY
- ------------------------------------------------------------------------
(4) SOURCE OF FUNDS*
N/A
- ------------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) ( )
- ------------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ------------------------------------------------------------------------
(7) SOLE VOTING POWER
NUMBER OF 0
SHARES ---------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY 9,934,475
EACH ---------------------------------
REPORTING (9) SOLE DISPOSITIVE POWER
PERSON 0
WITH ---------------------------------
(10) SHARED DISPOSITIVE POWER
9,934,475
- ------------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
21,821,283
- ------------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* ( )
- ------------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
65.4 %
- ------------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
PN
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Item 1: Security and Issuer
This Schedule 13D relates to the Common Shares of Beneficial
Ownership, $.01 par value per share (the "Shares"), of Insignia
Properties Trust, a Maryland real estate investment trust (the
"Issuer"), which has its principal executive office at One
Insignia Financial Plaza, P.O. Box 19059, 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"), AIMCO-GP,
Inc., a Delaware corporation ("AIMCO-GP"), and AIMCO
Properties, L.P., a Delaware limited partnership ("AIMCO OP"
and, together with AIMCO and AIMCO-GP, the "Reporting
Persons"). The executive office of the Reporting Persons is
1873 South Bellaire Street, 17th Floor, Denver, Colorado 80222.
As of June 30, 1998, AIMCO owned an approximately 89%
controlling interest in AIMCO OP through its wholly-owned
subsidiaries, AIMCO-GP and AIMCO-LP, Inc., a Delaware
corporation ("AIMCO-LP"). AIMCO-GP is the sole general partner
of AIMCO OP, owning approximately 1% of the equity interests,
and AIMCO-LP is a limited partner, owning approximately 88% of
the equity interests. The executive officers of AIMCO-GP are
the same as those of AIMCO and the two directors of AIMCO-GP,
Terry Considine and Peter Kompaniez, are also directors of
AIMCO. The principal business of AIMCO is to own and operate
multi-family residential properties. Certain information
concerning the directors and executive officers of AIMCO and
AIMCO-GP is set forth in Schedule I hereto.
(a-c) Not applicable.
(d) and (e) To the best knowledge of the Reporting Persons,
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
AIMCO became the beneficial owner of 11,886,808 Shares pursuant
to the merger (the "Merger") of Insignia Financial Group, Inc.
("IFG") with and into AIMCO, with AIMCO being the surviving
corporation. Pursuant to the Merger, AIMCO succeeded to
Insignia's direct ownership of 4,502,741 Shares. Moreover, upon
consummation of the Merger, Insignia Capital Corporation, a
Delaware corporation and, upon consummation of the Merger, a
wholly-owned subsidiary of AIMCO, distributed 7,283,780 Shares
to AIMCO, and National Property Investors, Inc., a Florida
corporation and, upon consummation of the Merger, a
wholly-owned subsidiary of AIMCO, distributed 100,287 Shares to
AIMCO (such contributions shall hereinafter be referred to,
collectively, as the "Distributions").
Pursuant to the Merger, AIMCO succeeded to IFG's ownership of
8,919,480 common partnership units (the "Units") of Insignia
Properties, L.P., a Delaware limited partnership. Upon
consummation of the Merger, AIMCO contributed the
aforementioned Units to AIMCO OP. Furthermore, Insignia Capital
Corporation, a Delaware corporation and a wholly-owned
subsidiary of AIMCO after the Merger, contributed 1,014,995
Units to AIMCO OP upon consummation of the Merger. Accordingly,
AIMCO OP became the beneficial owner of 9,934,475 Units upon
consummation of the Merger.
Under the limited partnership agreement of IPLP (the
"Partnership Agreement"), a holder of Units has the right (a
"Redemption Right") to cause IPLP to redeem each of such
holder's Units for cash equal to the value of a Share (subject,
however, to the first right of the Issuer to purchase each Unit
offered for redemption for one Share, subject to adjustment
upon the occurrence of stock splits, stock dividends or similar
transactions with respect to the Shares, as described in the
Partnership Agreement). The number of Shares that AIMCO OP
would receive upon such an exchange, if such exchange took
place currently, would be 9,934,475, and such Shares would
constitute approximately 29.76% of the issued and outstanding
Shares as of October 1, 1998. Furthermore, assuming such
exchange, the Reporting Persons would beneficially own, in the
aggregate, 21,821,283 Shares, and such Shares would constitute
approximately 65.4% of the issued and outstanding Shares as of
October 1, 1998. AIMCO disclaims beneficial ownership of the
9,934,475 Shares which would be beneficially owned by AIMCO OP
upon exercise of the Redemption Right by AIMCO and election by
the Issuer to purchase such redeemed Units.
Item 4: Purpose of Transaction
(a) - (c), (f) - (g), (j) As of October 1, 1998, AIMCO and the
Issuer entered into an agreement and plan of merger (the "IPT
Merger Agreement"), which provides for, among other things, the
merger of the Issuer with AIMCO or a subsidiary of AIMCO (the
"IPT Merger"). The IPT Merger Agreement provides that, upon
consummation of the IPT Merger, shareholders of IPT (the "IPT
Shareholders") will receive $13.25 per Share in cash, or $13.28
per Share in shares of AIMCO Common Stock, at AIMCO's option.
In connection with the execution of the IPT Merger Agreement,
the Bylaws of the Issuer in effect immediately prior to such
signing have been amended and restated in their entirety; a
copy of the Second Amended and Restated Bylaws of the Issuer
(the "IPT Bylaws") is attached hereto as Exhibit 10.2.
The IPT Merger is subject to the approval of the IPT
Shareholders, regulatory approvals, and the satisfaction or
waiver of various other conditions. AIMCO has agreed to vote
all Shares owned by it in favor of the IPT Merger Agreement and
the transactions contemplated thereby, and granted certain
members of the Board of Trustees of the Issuer (the "IPT
Board") an irrevocable proxy (the "Proxy") to vote all Shares
held by AIMCO at all meetings of IPT Shareholders, and in every
written consent in lieu of such meetings, in favor of approval
of the IPT Merger and any matter that could reasonably be
expected to facilitate the IPT Merger. Each grantee under the
Proxy explicitly agreed in writing to vote all Shares subject
to the Proxy in favor of the IPT Merger. The Proxy shall
terminate upon the earlier of (a) January 1, 2002 and (b) the
consummation of the IPT Merger.
The board of directors of AIMCO and the IPT Board may agree in
writing to terminate the IPT Merger Agreement without
completing the IPT Merger. The IPT Merger Agreement may also be
terminated in certain other circumstances.
In connection with the execution of the IPT Merger Agreement,
AIMCO and certain shareholders of the Issuer entered into an
agreement, dated October 1, 1998 (the "Shareholder's
Agreement"), whereby AIMCO agreed that, following a termination
of the IPT Merger Agreement under certain circumstances, it
will vote its Shares as follows: for the first two annual
meetings of IPT Shareholders following such a termination, in
favor of designees of Andrew L. Farkas, James A. Aston, Warren
M. Eckstein, Frank M. Garrison and Brian L. Herrmann
(collectively, the "Continuing Trustees"), so that such
designees constitute a majority of the trustees of the IPT
Board, and thereafter in favor of designees of the Continuing
Trustees so that such designees constitute one less than a
majority of the trustees of the IPT Board. The Shareholder's
Agreement remains in effect as long as AIMCO and/or its
affiliates own at least 10% of the outstanding Shares, but
terminates upon consummation of the IPT Merger.
If the IPT Merger is not completed, AIMCO will continue to
control the majority of outstanding Shares. However, certain
transactions involving AIMCO and the Issuer that occur between
the effective time of the Merger and the termination of the IPT
Merger Agreement between AIMCO and the Issuer, including the
acquisition by AIMCO of assets of IPLP and interests in
partnerships controlled by the Issuer, will be unwound.
(d) Pursuant to the IPT Merger Agreement, no later than
promptly after the execution and delivery of the IPT Merger
Agreement (the "Signing Date"), the Issuer shall (a) cause two
members of the IPT Board to resign their trusteeships, (b)
increase the size of the IPT Board to eleven and cause each of
Terry Considine, Peter K. Kompaniez, Patrick J. Foye, Steven D.
Ira, Thomas W. Toomey and Harry G. Alcock (collectively,
together with their successors, the "AIMCO-nominated Trustees")
to be elected as a trustee of the Issuer, (c) cause certain
individuals to be appointed as officers of the Issuer, (d)
establish a committee of the IPT Board, consisting solely of
AIMCO-nominated Trustees, authorized and empowered to act to
the extent set forth in the IPT Bylaws, (e) recognize that the
Continuing Trustees are authorized and empowered to act to the
extent set forth in the IPT Bylaws, and (f) establish an
executive committee of the IPT Board, to consist solely of
Terry Considine, Peter K. Kompaniez, Patrick J. Foye and Thomas
W. Toomey, to act to the extent set forth in the IPT Bylaws.
The IPT Merger Agreement provides that the aforementioned
committees shall not be dissolved prior to the effective time
of the IPT Merger (the "Effective Time") or the termination of
the IPT Merger Agreement. The IPT Merger Agreement further
provides that the powers of the Continuing Trustees shall not
be modified prior to the Effective Time or the termination of
the IPT Merger Agreement without the consent of a majority of
the Continuing Trustees.
The IPT Merger Agreement provides that if, after the Signing
Date and prior to the Effective Time, any IPT Shareholder vote
is taken for the election of a trustee to any position on the
IPT Board currently occupied by any of the Continuing Trustees
or by their successors duly elected hereunder, AIMCO shall vote
its Shares for the reelection of each such Continuing Trustee
or for the election of such Continuing Trustee's successor
designated by a majority of the Continuing Trustees. The IPT
Merger Agreement further provides that if, after the Signing
Date and prior to the Effective Time, any vacancy on the IPT
Board arises with respect to a trustee position occupied by a
Continuing Trustee, AIMCO shall cause the AIMCO-nominated
Trustees to vote to fill such vacancy by electing a person
nominated by a majority of the Continuing Trustees. The IPT
Merger Agreement further provides that, without the approval of
a majority of the Continuing Trustees, AIMCO shall not, and
shall not permit any AIMCO-nominated Trustee to, remove a
Continuing Trustee as a trustee of the IPT Board or amend the
charter of the Issuer unless such amendment shall have been
approved by a majority of the Continuing Trustees.
(e) The IPT Merger Agreement requires the Issuer to continue to
make regular quarterly distributions, as follows: the Issuer
shall pay on October 15, 1998 its previously declared
distribution of $.16 per Share to IPT Shareholders of record on
September 30, 1998; thereafter, the Issuer shall declare and
pay quarterly distributions with record dates and payment dates
which are exactly the same as the record dates and payment
dates for regular quarterly distributions paid by AIMCO in
respect of the AIMCO Common Stock, in each case at $.16, or,
after February 28, 1999, the greater of (a) $.16 and (b) the
amount determined by dividing $13.28 by the lesser of (i) the
average price of AIMCO Common Stock over a ten-day measuring
period set forth in the IPT Merger Agreement and (ii) the
average price of AIMCO Common Stock over a ten-day measuring
period ending on (and including) December 31, 1998 (determined
as of the applicable record date) (the "IPT Distribution
Amount"); provided, however, that the first such distribution
by the Issuer to be declared and paid after October 15, 1998
shall be adjusted as provided in the IPT Merger Agreement.
In the event that the Effective Time has not occurred on or
before February 28, 1999, if at any time thereafter AIMCO
declares any distribution on the AIMCO Common Stock other than
a regular quarterly distribution, with a record date for such
distribution which is a date prior to the date of the Effective
Time (a "Special AIMCO Distribution"), then the Issuer shall
promptly declare and pay a corresponding distribution in an
amount equal to the amount of such Special AIMCO Distribution,
multiplied by $13.28, divided by the IPT Distribution Amount.
(h)-(i) Upon completion of the IPT Merger, the Shares will
become eligible for termination of registration pursuant to
Section 12(g)(4) of the Securities Exchange Act of 1934, as
amended from time to time (the "Act"), and AIMCO intends to
seek delisting of the Shares from the American Stock Exchange
and the termination of the registration of the Shares under the
Act as soon after the completion of the IPT Merger as the
requirements for such delisting and termination are met.
Item 5: Interest in Securities of the Issuer
(a)-(b) As a result of the Merger and the Distributions, AIMCO
is the direct beneficial owner of an aggregate of 11,886,808
Shares. AIMCO has the sole power to dispose of, and has the
shared power to vote such Shares, and such Shares constitute
approximately 50.7% of the issued and outstanding Shares as of
October 1, 1998.
As a result of the Merger and subsequent transfer of Units to
AIMCO OP, AIMCO OP is the beneficial owner of an aggregate of
9,934,475 Units. Under the Partnership Agreement, a holder of
Units has a Redemption Right to cause IPLP to redeem each of
such holder's Units for cash equal to the value of a Share
(subject, however, to the first right of the Issuer to purchase
each Unit offered for redemption for one Share, subject to
adjustment upon the occurrence of stock splits, stock dividends
or similar transactions with respect to the Shares, as
described in the Partnership Agreement). The number of Shares
that AIMCO OP would receive upon such an exchange, if such
exchange took place currently, would be 9,934,475, and such
Shares would constitute approximately 29.76% of the issued and
outstanding Shares as of October 1, 1998. Furthermore, assuming
such exchange, the Reporting Persons would beneficially own, in
the aggregate, 21,821,283 Shares, and such Shares would
constitute approximately 65.4% of the issued and outstanding
Shares as of October 1, 1998. AIMCO disclaims beneficial
ownership of the 9,934,475 Shares which would be beneficially
owned by AIMCO OP upon exercise of the Redemption Right by
AIMCO and election by the Issuer to purchase the redeemed
Units. Prior to an exchange of Units for Shares, AIMCO OP is
not entitled to any rights as a shareholder of the Issuer with
respect to the Shares AIMCO OP would be entitled to receive
upon the exchange of the Units held by AIMCO OP.
To the knowledge of the Reporting Persons, no Shares are
beneficially owned by any of the persons named in Schedule I
hereto.
Schedule II to this Schedule 13D sets forth the persons with
whom AIMCO shares the power to vote or to direct the vote of
11,886,808 Shares covered by this Schedule 13D, as well as the
present principal occupation or employment and business address
of each such person.
During the past five years, to the knowledge of the Reporting
Persons, 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 the knowledge of the
Reporting Persons, 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 the knowledge of the Reporting Persons, all persons named in
Schedule II to this Schedule 13D are United States citizens.
(c) Other than as set forth in this Item 5 and in Item 3 and
Item 4, to the knowledge of the Reporting Persons as of the
date hereof (i) neither the Reporting Persons nor any
subsidiary or affiliate of the Reporting Persons 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 the Reporting Persons, nor
to the knowledge of the Reporting Persons, by any subsidiary or
affiliate of the Reporting Persons or any of the persons listed
on Schedule I hereto.
(d) No other person is known by the Reporting Persons 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.
(e) Not applicable.
Item 6: Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer
Other than as described herein, to the knowledge of the
Reporting Persons, 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
10.1 Agreement and Plan of Merger, dated as of October 1, 1998,
between Apartment Investment and Management Company and
Insignia Properties Trust.
10.2 Second Amended and Restated Bylaws of Insignia Properties
Trust.
10.3 Irrevocable Proxy, dated as of October 1, 1998, granted by
Apartment Investment and Management Company to Andrew L.
Farkas, James A. Aston and Frank M. Garrison.
10.4 Shareholder's Agreement, dated October 1, 1998, by and among
Apartment Investment and Management Company, Andrew L. Farkas,
James A. Aston and Frank M. Garrison.
10.5 Agreement of Joint Filing, dated October 15, 1998, by and among
Apartment Investment and Management Company, AIMCO-GP, Inc. and
AIMCO Properties, L.P.
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: October 14, 1998 APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
By: /s/ Patrick J. Foye
____________________________
Name: Patrick J. Foye
Title: Executive Vice President
AIMCO-GP, INC.
By: /s/ Patrick J. Foye
_____________________________
Name: Patrick J. Foye
Title: Executive Vice President
AIMCO PROPERTIES, L.P.
By: AIMCO-GP, Inc.,
its General Partner
By: /s/ Patrick J. Foye
____________________________
Name: Patrick J. Foye
Title: Executive Vice President
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF AIMCO AND AIMCO-GP, INC.
1. Directors and Executive Officers of AIMCO. The names and
positions of the executive officers of AIMCO and AIMCO-GP, Inc., and the
directors of AIMCO, are set forth below. The two directors of AIMCO-GP,
Inc. are Terry Considine and Peter Kompaniez. 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
and Secretary
Patrick J. Foye Executive Vice President
Robert Ty Howard Executive Vice President - Ancillary Services
Steven D. Ira Executive Vice President and Co-Founder
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
Richard S. Ellwood Independent Director; Chairman, Audit
Committee
J. Landis Martin Director; Chairman, Compensation Committee
Thomas L. Rhodes Director
John D. Smith Director
2. Biographical Information. The following is a biographical
summary of the experience of the current directors and executive officers
of AIMCO and AIMCO-GP, Inc. 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. He is the sole owner of Considine
Investment Co. and prior to July 1994 was owner of
approximately 75% of Property Asset Management,
L.L.C., Limited Liability Company, a Colorado
limited liability company, and its related entities
(collectively, "PAM"), one of AIMCO's predecessors.
On October 1, 1996, Mr. Considine was appointed
Co-Chairman and director of Asset Investors Corp.
and Commercial Asset Investors, Inc., two other
public real estate investment trusts, and appointed
as a director of Financial Assets Management, LLC,
a real estate investment trust manager. Mr.
Considine has been involved as a principal in a
variety of real estate activities, including the
acquisition, renovation, development and
disposition of properties. Mr. Considine has also
controlled entities engaged in other businesses
such as television broadcasting, gasoline
distribution and environmental laboratories. Mr.
Considine received a B.A. from Harvard College, a
J.D. from Harvard Law School and is admitted as a
member of the Massachusetts Bar.
Mr. Considine has had substantial multifamily real
estate experience. From 1975 through July 1994,
partnerships or other entities in which Mr.
Considine had controlling interests invested in
approximately 35 multifamily apartment properties
and commercial real estate properties . Six of
these real estate assets (four of which were
multifamily apartment properties and two of which
were office properties) did not generate
sufficient cash flow to service their related
indebtedness and were foreclosed upon by their
lenders , causing pre-tax losses of approximately
$11.9 million to investors and losses of
approximately $2.7 million to Mr. Considine .
Peter K. Kompaniez Mr. Kompaniez has been Vice Chairman, President
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 AIMCO)
and 3.1 million square feet of commercial real
estate. Prior to joining HFC, Mr. Kompaniez was a
senior partner with the law firm of Loeb and Loeb
where he had extensive real estate and REIT
experience. Mr. Kompaniez received a B.A. from Yale
College and a J.D. from the University of
California (Boalt Hall).
The downturn in the real estate markets in the late
1980s and early 1990s adversely affected the United
States real estate operations of Heron
International N.V. and its subsidiaries and
affiliates (the "Heron Group"). During this period
from 1986 to 1993, Mr. Kompaniez served as
President and Chief Executive Officer of Heron
Financial Corporation ("HFC"), and as a director or
officer of certain other Heron Group entities. In
1993, HFC, its parent Heron International, and
certain other members of the Heron Group
voluntarily entered into restructuring agreements
with separate groups of their United States and
international creditors. The restructuring
agreement for the United States members of the
Heron Group generally provided for the joint
assumption of certain liabilities and the pledge of
unencumbered assets in support of such liabilities
for the benefit of their United States creditors.
As a result of the restructuring , the operations
and assets of the United States members of the
Heron Group were generally separated from those of
Heron International and its non-United States
subsidiaries. At the conclusion of the
restructuring, Mr. Kompaniez commenced the
operations of PDI, which was engaged to act as
asset and corporate manager of the continuing
United States operations of HFC and the other
United States Heron Group members for the benefit
of the United States creditors. In connection with
certain transactions effected at the time of the
initial public offering of AIMCO Common Stock, Mr.
Kompaniez was appointed Vice Chairman of AIMCO and
substantially all of the property management assets
of PDI were transferred or assigned to AIMCO.
Thomas W. Toomey Mr. Toomey has served as Senior Vice President -
Finance and Administration of AIMCO since January
1996 and was promoted to Executive
Vice-President-Finance and Administration in March
1997. 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
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. Mr. Bonder
received an A.B. from the University of Rochester
and a J.D. from Washington University School of
Law.
Patrick J. Foye Mr. Foye has served as Executive Vice President of
AIMCO since May 1998. Prior to joining AIMCO, Mr.
Foye was a partner in the law firm of Skadden,
Arps, Slate, Meagher & Flom LLP from 1989 to 1998
and was Managing Partner of the firm's Brussels,
Budapest and Moscow offices from 1992 through 1994.
Mr. Foye is also Deputy Chairman of the Long Island
Power Authority and serves as a member of the New
York State Privatization Council. He received a
B.A. from Fordham College and a J.D. from Fordham
University Law School.
Robert Ty Howard Mr. Howard was appointed Executive Vice President
- Ancillary Services in February 1998. Prior to
joining AIMCO, Mr. Howard served as an officer
and/or director of four affiliated companies, Hecco
Ventures, Craig Corporation, Reading Company and
Decurion Corporation. Mr. Howard was responsible
for financing, mergers and acquisitions activities,
investments in commercial real estate, both
nationally and internationally, cinema development
and interest rate risk management. From 1983 to
1988, he was employed by Spieker Properties. Mr.
Howard received a B.A. from Amherst College, a J.D.
from Harvard Law School and an M.B.A. from Stanford
University Graduate School of Business.
Steven D. Ira Mr. Ira is a Co-Founder of AIMCO and has served as
Executive Vice President of AIMCO since July 1994.
From 1987 until July 1994, he served as President
of PAM. Prior to merging his firm with PAM in 1987,
Mr. Ira acquired extensive experience in property
management. Between 1977 and 1981 he supervised the
property management of over 3,000 apartment and
mobile home units in Colorado, Michigan,
Pennsylvania and Florida, and in 1981 he joined
with others to form the property management firm of
McDermott, Stein and Ira. Mr. Ira served for
several years on the National Apartment Manager
Accreditation Board and is a former president of
both the National Apartment Association and the
Colorado Apartment Association. Mr. Ira is the
sixth individual elected to the Hall of Fame of the
National Apartment Association in its 54-year
history. He holds a Certified Apartment Property
Supervisor (CAPS) and a Certified Apartment Manager
designation from the National Apartment
Association, a Certified Property Manager (CPM)
designation from the National Institute of Real
Estate Management (IREM) and he is a member of the
Board of Directors of the National Multi-Housing
Council, the National Apartment Association and the
Apartment Association of Metro Denver. Mr. Ira
received a B.S. from Metropolitan State College in
1975.
David L. Williams Mr. Williams has been Executive Vice President -
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 property 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 LLP 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.
Richard S. Ellwood Mr. Ellwood was appointed a Director of AIMCO in
12 Auldwood Lane July 1994 and is currently Chairman of the Audit
Rumson, NJ 07760 Committee. Mr. Ellwood is the founder and President
of R.S. Ellwood & Co., Incorporated, a real estate
investment banking firm. Prior to forming R.S.
Ellwood & Co., Incorporated in 1987, Mr. Ellwood
had 31 years experience on Wall Street as an
investment banker, serving as: Managing Director
and senior banker at Merrill Lynch Capital Markets
from 1984 to 1987; Managing Director at Warburg
Paribas Becker from 1978 to 1984; general partner
and then Senior Vice President and a director at
White, Weld & Co. from 1968 to 1978; and in various
capacities at J.P. Morgan & Co. from 1955 to 1968.
Mr. Ellwood currently serves as a director of
FelCor Suite Hotels, Inc. and Florida East Coast
Industries, Inc.
J. Landis Martin Mr. Martin was appointed a Director of AIMCO in July
1999 Broadway 1994 and became Chairman of the Compensation Committee
Suite 4300 in March 1998. Mr. Martin has served as President
Denver, CO 80202 and Chief Executive Officer and a Director of NL
Industries, Inc., a manufacturer of titanium
dioxide, since 1987. Mr. Martin has served as
Chairman of Tremont Corporation, a holding company
operating through its affiliates Titanium Metals
Corporation ("TIMET") and NL Industries, Inc.,
since 1990 and as Chief Executive Officer and a
director of Tremont since 1998. Mr. Martin has
served as Chairman of Timet, an integrated producer
of titanium, since 1987 and Chief Executive Officer
since January 1995. From 1990 until its acquisition
by Dresser Industries , Inc. ("Dresser") in 1994,
Mr. Martin served as Chairman of the Board and
Chief Executive Officer of Baroid Corporation, an
oilfield services company. In addition to Tremont,
NL and TIMET, Mr. Martin is a director of Dresser,
which is engaged in the petroleum services,
hydrocarbon and engineering industries.
Thomas L. Rhodes Mr. Rhodes was appointed a Director of AIMCO in July
215 Lexington Avenue 1994. Mr. Rhodes has served as the President and a
4th Floor Director of National Review magazine since November 30,
New York, NY 10016 1992, where he has also served as a Director since
1998. From 1976 to 1992, he held various positions
at Goldman, Sachs & Co. and was elected a General
Partner in 1986 and served as a General Partner
from 1987 until November 27, 1992. He is currently
Co-Chairman of the Board , Co-Chief Executive
Officer and a Director of Commercial Assets Inc.
and Asset Investors Corporation. He also serves as
a Director of Delphi Financial Group, Inc. and its
subsidiaries , Delphi International Ltd., Oracle
Reinsurance Company, and the Lynde and Harry
Bradley Foundation. Mr. Rhodes is Chairman of the
Empire Foundation for Policy Research, a Founder
and Trustee of Change NY, a Trustee of The Heritage
Foundation, and a Trustee of the Manhattan
Institute.
John D. Smith Mr. Smith was appointed a Director of AIMCO in
3400 Peachtree Road November 1994. Mr. Smith is Principal and President
Suite 831 of John D. Smith Developments. Mr. Smith has been a
Atlanta, GA 30326 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
The name, present principal occupation, business address and
citizenship of each individual who shares voting power with Apartment
Investment and Management Company pursuant to the irrevocable proxy, dated
as of October 1, 1998, granted by Apartment Investment and Management
Company with respect to its common shares of beneficial ownership of
Insignia Properties Trust, are set forth below.
Andrew L. Farkas. The business address of Andrew L. Farkas ("AF") is 375
Park Avenue, Suite 3401, New York, New York 10152. The present principal
occupation of AF is the Chairman of the Board and Chief Executive Officer
of Insignia/ESG Holdings, Inc., a Delaware corporation ("Holdings"), which
is the parent company of an international real estate organization,
specializing in commercial real estate services, single-family brokerage
and mortgage origination, condominium and cooperative apartment management,
equity co-investment and other services. Holdings' principal executive
offices are located at 200 Park Avenue, New York, New York 10166. AF is a
United States citizen.
James A. Aston. The business address of James A. Aston ("JAA") is 15 South
Main Street, Suite 900, Greenville, South Carolina, 29602. The present
principal occupation of JAA is member of the Office of the Chairman and
Chief Financial Officer of Holdings. JAA is a United States citizen.
Frank M. Garrison. The business address of Frank M. Garrison ("FMG") is 102
Woodmont Boulevard, Suite 400, Nashville, Tennessee, 37205. The present
principal occupation of FMG is member of the Office of the Chairman of
Holdings. FMG is a United States citizen.
EXHIBIT INDEX
Exhibit Description
10.1 Agreement and Plan of Merger, dated as of October 1, 1998,
between Apartment Investment and Management Company and
Insignia Properties Trust.
10.2 Second Amended and Restated Bylaws of Insignia Properties
Trust.
10.3 Irrevocable Proxy, dated as of October 1, 1998, granted by
Apartment Investment and Management Company to Andrew L.
Farkas, James A. Aston and Frank M. Garrison.
10.4 Shareholder's Agreement, dated October 1, 1998, by and among
Apartment Investment and Management Company, Andrew L. Farkas,
James A. Aston and Frank M. Garrison.
10.5 Agreement of Joint Filing, dated October 15, 1998, by and among
Apartment Investment and Management Company, AIMCO-GP, Inc. and
AIMCO Properties, L.P.
AGREEMENT AND PLAN OF MERGER
BETWEEN
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
and
INSIGNIA PROPERTIES TRUST
Dated as of October 1, 1998
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of
October 1, 1998, by and between Apartment Investment and Management
Company, a Maryland corporation ("AIMCO"), and Insignia Properties Trust, a
Maryland real estate investment trust ("IPT").
WHEREAS, AIMCO, AIMCO Properties, L.P., a Delaware limited
partnership ("AIMCO OP"), Insignia Financial Group, Inc., a Delaware
corporation ("IFG"), and Insignia/ESG Holdings, Inc., a Delaware
corporation, have entered into an Amended and Restated Agreement and Plan
of Merger (the "IFG Agreement"), dated as of May 26, 1998;
WHEREAS, pursuant to the IFG Agreement, IFG has merged with and
into AIMCO, with AIMCO being the surviving entity (the "Insignia Merger");
WHEREAS, the IFG Agreement requires AIMCO to propose to acquire
(by merger) IPT and to use its reasonable best efforts to consummate such
merger within three months following the effective time of the Insignia
Merger, and the performance of AIMCO's obligations under this Agreement, if
it uses its reasonable best efforts to consummate the Merger (as
hereinafter defined) within such period, will constitute AIMCO's
performance of such obligations under the IFG Agreement;
WHEREAS, pursuant to an Agreement and Plan of Merger, dated as
of July 18, 1997, by and among Angeles Mortgage Investment Trust, an
unincorporated California business trust ("AMIT"), IPT, IFG and MAE GP
Corporation, a Delaware corporation, AMIT was merged with and into IPT on
September 17, 1998, with IPT being the surviving entity (the "AMIT
Merger");
WHEREAS, the Board of Trustees of IPT (the "IPT Board") has
received the written opinion of Lehman Brothers Inc. dated the date hereof
that the Merger Consideration (as defined in Section 2.1(b)) is fair from a
financial point of view to the holders (the "IPT Shareholders") of common
shares of beneficial interest, par value $.01 per share, of IPT ("IPT
Shares"), other than IFG and AIMCO and their respective Subsidiaries (as
defined in Section 2.1(a));
WHEREAS, the Board of Directors of AIMCO (the "AIMCO Board")
and the IPT Board have approved the merger of IPT and AIMCO (the "Merger"),
upon the terms and subject to the conditions set forth in this Agreement;
and
WHEREAS, the surviving entity in the Merger intends that,
following the Merger, it shall continue to be subject to taxation as a real
estate investment trust (a "REIT") within the meaning of the Internal
Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements contained herein, the
parties hereto, intending to be legally bound hereby, agree as follows:
ARTICLE I
THE MERGER
Section 1.1 Structure of the Merger.
(a) At least 14 business days prior to the anticipated mailing
of the Information Statement/Prospectus (as defined in Section 6.2) AIMCO
shall notify IPT whether, at the Effective Time (as defined in Section 1.4)
(x) IPT shall be merged with and into AIMCO, with AIMCO being the surviving
entity or (y) a subsidiary of AIMCO shall be merged with and into IPT, with
IPT being the surviving entity. If AIMCO elects to cause the Merger to
occur pursuant to (y) above, then this Agreement shall be amended to (i)
add such subsidiary as a party to this Agreement, (ii) make such other
additional incidental amendments as are needed to provide for a subsidiary
merger, and where required, to provide that AIMCO will cause its subsidiary
to take action in lieu of AIMCO, as agreed by IPT and AIMCO and their
respective counsel, and (iii) include an unconditional guarantee by AIMCO
of the obligations of its subsidiary in the Merger.
(b) In the event AIMCO shall have been advised by its tax
counsel that it does not expect to be able to issue the opinion referred to
in Section 7.2(f) of this Agreement at the Closing, in addition to the
actions referenced to in the second sentence of this Section 1.1, IPT,
acting through a majority of the Continuing Trustees, and AIMCO shall use
their best efforts to restructure the form of the transaction to provide
for the issuance of AIMCO Common Stock without materially changing either
the consideration to be received by IPT Shareholders or the tax or other
economic consequences of the transaction to AIMCO and its Subsidiaries, but
if the transaction cannot reasonably be so restructured, it shall be
restructured as an all cash transaction.
Section 1.2 The Merger. Upon the terms and subject to the
conditions of this Agreement, at the Effective Time IPT shall be merged
with and into AIMCO in accordance with the laws of the State of Maryland.
AIMCO shall be the surviving entity in the Merger and shall continue its
corporate existence under the laws of the State of Maryland. AIMCO after
the Effective Time is sometimes referred to herein as the "Surviving
Entity." The effects of the Merger shall be as set forth in Section 1.3.
AIMCO covenants and agrees to use its reasonable best efforts to consummate
the Merger as soon as possible.
Section 1.3 Effects of the Merger. At the Effective Time, (a)
the charter of AIMCO (the "AIMCO Charter"), as in effect immediately prior
to the Effective Time, shall be the charter of the Surviving Entity until
thereafter amended as provided by law and the AIMCO Charter, (b) the
by-laws of AIMCO, as in effect immediately prior to the Effective Time,
shall be the by-laws of the Surviving Entity until thereafter amended as
provided by law, the AIMCO Charter and such by-laws and (c) the directors
and officers of AIMCO immediately prior to the Effective Time shall be the
directors and officers, respectively, of the Surviving Entity until their
respective successors are duly elected and qualified. Subject to the
foregoing, the additional effects of the Merger shall be as provided in
Section 3-114 of the Maryland General Corporation Law ("MGCL") and Section
8-501.1(n) of Title 8 of the Corporations and Associations Article of the
Annotated Code of Maryland (the "MCAA").
Section 1.4 Effective Time of the Merger. On the Closing Date
(as defined in Section 3.1), articles of merger shall be executed and filed
by AIMCO and IPT with the State Department of Assessments and Taxation of
the State of Maryland pursuant to the MGCL and the MCAA. The Merger shall
become effective upon the acceptance of the articles of merger for record
by the State Department of Assessments and Taxation of the State of
Maryland (the "Effective Time").
ARTICLE II
TREATMENT OF SHARES
Section 2.1 Effect of the Merger on IPT Shares.
(a) Certain Definitions. As used in this Agreement, the
following terms have the following meanings:
"AIMCO Collar Price" means the average price (computed based on
the sum of the high and low sales prices of AIMCO Common Stock (as reported
in the NYSE Composite Transactions reporting system as published in The
Wall Street Journal or, if not published therein, in another authoritative
source) divided by two) of a share of AIMCO Common Stock during the ten
consecutive NYSE trading day period ending on (and including) December 31,
1998.
"AIMCO Common Stock" means the Class A Common Stock, par value
$.01 per share, of AIMCO.
"AIMCO Exchange Value" means (a) the AIMCO Reference Price, if
the Effective Time occurs on or prior to December 31, 1998, or (b) the
lesser of the AIMCO Collar Price or the AIMCO Reference Price, if the
Effective Time occurs on or after January 1, 1999.
"AIMCO Reference Period" means the ten consecutive NYSE trading
day period commencing on and including the tenth (10th) NYSE trading day
preceding the IPT Meeting Date (as defined in Section 6.4) and ending on
and including the NYSE trading day immediately preceding the IPT Meeting
Date.
"AIMCO Reference Price" means the average price (computed based
on the sum of the high and low sales prices of AIMCO Common Stock (as
reported in the NYSE Composite Transactions reporting system as published
in The Wall Street Journal or, if not published therein, in another
authoritative source) divided by two) of a share of AIMCO Common Stock
during the AIMCO Reference Period.
"Cash Election Notice" is defined in Section 2.1(e).
"Cash Percentage" is defined in Section 2.1(e).
"Conversion Ratio" means the IPT Exchange Value divided by the
AIMCO Exchange Value.
"Distribution Shortfall Amount" means the aggregate per-IPT
Share amount, if any, of the distributions required to be paid by IPT
pursuant to Section 6.1 but which IPT fails to make for any reason, plus a
return on the amount of each such unpaid distribution at an annual rate
equal to the lesser of 20% or the maximum rate permitted by applicable law,
to be calculated based on the number of days elapsed from and including the
date on which such distribution was required to be paid through and
including the date of the Effective Time (and assuming a 365 day year).
"Excess Distribution Amount" is defined in Section 6.1(c).
"IPT Distribution Amount" means, as of any date of
determination, (a) $.16 during the period from the date of this Agreement
through and including February 28, 1999, and (b) thereafter, the greater of
(i) $.16 and (ii) the amount determined by dividing $13.28 by the AIMCO
Collar Price and multiplying the result by the per share amount of the
corresponding distribution declared by AIMCO in respect of AIMCO Common
Stock.
"IPT Exchange Value" means $13.28.
"NYSE" means the New York Stock Exchange.
"Person" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust,
a joint venture, an unincorporated organization and a governmental entity
or any department, agency or political subdivision thereof.
"Stock Percentage" means a percentage equal to 100% minus the
Cash Percentage.
"Subsidiary" means as to any Person, any other Person of which
at least a majority of the voting power represented by the outstanding
shares of capital stock or other voting securities or interests (including,
without limitation, general partner interests) having voting power under
ordinary circumstances to elect directors or similar members of the
governing body of such other Person shall at the time be held, directly or
indirectly, by such first Person.
(b) General. Subject to Sections 2.1(c) and (d), as of the
Effective Time, by virtue of the Merger and without any action on the part
of any holder of an IPT Share, each issued and outstanding IPT Share shall
be converted into and become the right to receive the following (together
with any cash to be issued in lieu of fractional shares pursuant to Section
2.4, the "Merger Consideration"):
(i) If the Effective Time occurs on or prior to December
31, 1998: (A) that number of shares of AIMCO Common Stock equal to
the Stock Percentage multiplied by the Conversion Ratio; and (B) an
amount in cash equal to the Cash Percentage multiplied by the sum of
(x) $13.25, plus (y) the Distribution Shortfall Amount (if any),
minus (z) the Excess Distribution Amount (if any); and (C) an amount
in cash equal to the IPT Distribution Amount, determined as of
Effective Time, multiplied by the number of days that have elapsed
from and including the day immediately following the record date for
the last regular quarterly distribution declared by IPT through and
including the date immediately preceding the Closing Date, divided by
91; or
(ii) If the Effective Time occurs between January 1, 1999
and January 31, 1999: (A) that number of shares of AIMCO Common Stock
equal to the Stock Percentage multiplied by the Conversion Ratio; and
(B) an amount in cash equal to the Cash Percentage multiplied by the
sum of (w) $13.25, plus (x) $.0018 multiplied by the number of days
that has elapsed from and including January 1, 1999 through and
including the day immediately preceding the Closing Date, plus (y)
the Distribution Shortfall Amount (if any), minus (z) the Excess
Distribution Amount (if any); and (C) an amount in cash equal to the
IPT Distribution Amount, determined as of Effective Time, multiplied
by the number of days that have elapsed from and including the day
immediately following the record date for the last regular quarterly
distribution declared by IPT through and including the date immediately
preceding the Closing Date, divided by 91; or
(iii) If the Effective Time occurs between February 1,
1999 and February 28, 1999: (A) that number of shares of AIMCO Common
Stock equal to the Stock Percentage multiplied by the Conversion
Ratio; and (B) an amount in cash equal to the Cash Percentage
multiplied by the sum of (w) $13.25, plus (x) $.0036 multiplied by
the number of days that has elapsed from and including January 1,
1999 through and including the day immediately preceding the Closing
Date, plus (y) the Distribution Shortfall Amount (if any), minus (z)
the Excess Distribution Amount (if any); and (C) an amount in cash
equal to the IPT Distribution Amount, determined as of Effective
Time, multiplied by the number of days that have elapsed from and
including the day immediately following the record date for the last
regular quarterly distribution declared by IPT through and including
the date immediately preceding the Closing Date, divided by 91; or
(iv) If the Effective Time occurs on or after March 1,
1999: (A) that number of shares of AIMCO Common Stock equal to the
Conversion Ratio; and (B) an amount in cash equal to the IPT
Distribution Amount, determined as of Effective Time, multiplied by
the number of days that have elapsed from and including the day
immediately following the record date for the last regular quarterly
distribution declared by IPT through and including the date immediately
preceding the Closing Date, divided by 91;
and shall no longer be outstanding and shall automatically be canceled and
retired and shall cease to exist, and each holder of a certificate (a
"Certificate") which immediately prior to the Effective Time represented
any such IPT Share shall cease to have any rights with respect to such IPT
Share, except the right to receive the Merger Consideration contemplated by
this Section 2.1.
(c) Cancellation of Certain IPT Shares. As of the Effective
Time, by virtue of the Merger and without any action on the part of any IPT
Shareholder, all IPT Shares owned directly or indirectly by AIMCO and its
Subsidiaries shall automatically be canceled and retired and shall cease to
exist, and no Merger Consideration or other consideration shall be issued
or delivered in exchange therefor.
(d) Restricted Shares.
(i) Treatment. At the Effective Time, each unvested
restricted IPT Share awarded under the IPT 1997 Share Incentive Plan
(the "IPT Share Plan") shall, by virtue of this Agreement and without
any further action of IPT, AIMCO or the holder of such restricted
share, be converted into that number of restricted shares ("AIMCO
Restricted Shares") of AIMCO Common Stock equal to the Conversion
Ratio. Each such AIMCO Restricted Share shall continue to have, and
be subject to, the same terms and conditions (including rights to
Dividend Equivalents (as defined in the IPT Share Plan), if any) set
forth in the IPT Share Plan and the applicable restricted share
agreement, each as in effect immediately prior to the Effective Time.
(ii) Registration. AIMCO shall (A) cause such shares of
AIMCO Common Stock to be covered by an effective registration
statement on Form S-8 (or any successor or other appropriate forms),
and (B) use its reasonable best efforts to maintain the effectiveness
of such registration statement (and maintain the current status of
the prospectus contained therein) for so long as the restricted
shares remain outstanding.
(e) Cash Election Option. Not later than the close of business
on the second NYSE trading day immediately preceding the first day of the
AIMCO Reference Period, AIMCO shall deliver to IPT a written notice (the
"Cash Election Notice"), which shall be irrevocable, in which AIMCO
specifies a percentage, from 0% to 100%, of the Merger Consideration to be
paid in cash (the "Cash Percentage"); provided, however, that if (x) AIMCO
fails to timely deliver the Cash Election Notice to IPT or (y) the IPT
Meeting Date is on or after March 1, 1999, then AIMCO shall not be entitled
to deliver a Cash Election Notice (i.e., the Cash Percentage shall be
deemed to be zero percent (0%) and AIMCO shall not be entitled to pay any
portion of the Merger Consideration in cash). AIMCO shall use its best
efforts to cause IPT to issue, on the date the Cash Election Notice is
required to be delivered, via the Dow Jones News Service and PR Newswire, a
press release announcing the Cash Percentage.
Section 2.2 Surrender of Certificates.
(a) AIMCO shall provide on the date of the Effective Time to
the paying agent selected by AIMCO (the "Paying Agent") certificates
representing shares of AIMCO Common Stock and funds as necessary to make
issuances and payments pursuant to Sections 2.l(b) and 2.4 (such
certificates and funds being hereinafter referred to as the "Exchange
Fund"). Out of the Exchange Fund, the Paying Agent shall make, pursuant to
irrevocable instructions, the issuances and payments referred to in
Sections 2.1(b) and 2.4, and the Exchange Fund shall not be used for any
other purpose. The Paying Agent may invest portions of the Exchange Fund as
AIMCO may direct, provided that such investments be in obligations of, or
guaranteed by, the United States of America, in commercial paper
obligations receiving the highest rating from either Moody's Investors
Service or Standard & Poor's Corporation or in certificates of deposit,
bank repurchase agreements or bankers' acceptances of commercial banks with
capital exceeding $100,000,000. Any net profit resulting from, or interest
or income produced by, such investments shall be payable to AIMCO. AIMCO
shall replace any monies lost through any investment made pursuant to this
Section 2.2(a) upon request therefor by the Paying Agent. Any portion of
the Exchange Fund that remains unclaimed after 180 days after the Effective
Time shall be returned to AIMCO upon its request made to the Paying Agent,
after which time the holder of any unsurrendered Certificates shall look
only to AIMCO for delivery of the Merger Consideration. AIMCO shall not be
liable to any Person for any funds delivered to a public official pursuant
to any applicable abandoned property, escheat or similar law.
(b) As soon as practicable after the Effective Time, AIMCO
shall cause the Paying Agent to mail to each holder of record of a
Certificate which immediately prior to the Effective Time represented an
IPT Share that was canceled and became instead the right to receive Merger
Consideration pursuant to Section 2.1(b): (i) a letter of transmittal
(which shall specify that delivery shall be effected, and risk of loss and
title to the Certificates shall pass, only upon actual delivery of the
Certificates to the Paying Agent); and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for the Merger
Consideration. Upon surrender of a Certificate to the Paying Agent for
exchange (or to such other agent or agents as may be appointed by AIMCO),
together with a duly executed letter of transmittal and such other
documents as the Paying Agent shall require, the holder of such Certificate
shall be entitled to receive, in respect of the IPT Shares formerly
represented thereby, (A) a certificate or certificates representing that
number of whole shares of AIMCO Common Stock which such holder has the
right to receive pursuant to the provisions of Section 2.1(b), if any, (B)
the amount of cash which such holder has the right to receive pursuant to
the provisions of Section 2.1(b) and (C) cash in lieu of fractional shares
which such holder is entitled to receive pursuant to Section 2.4. If
payment is to be made to a Person other than the one in whose name a
surrendered Certificate is registered, it shall be a condition of receipt
of the Merger Consideration that the Certificate so surrendered be properly
endorsed or otherwise in proper form for transfer and that the Person
requesting such payment either pay any transfer or other taxes required by
reason of the payment to a Person other than the registered holder of the
Certificate surrendered or establish to the satisfaction of the Surviving
Entity that such tax has been paid or is not applicable. Until surrendered
in accordance with the provisions of this Section 2.2, after the Effective
Time each Certificate shall represent for all purposes only the right to
receive the Merger Consideration for each IPT Share represented by such
Certificate, together with any dividends and other distributions paid in
respect thereof after the Effective Time.
Section 2.3 Closing of Transfer Books; Etc. From and after the
Effective Time, the share transfer books of IPT shall be closed, and no
registration of any transfer of any IPT Shares shall thereafter be made on
the records of IPT. If, after the Effective Time, Certificates are
presented to AIMCO for any reason, they shall be canceled, and each IPT
Share represented thereby shall be exchanged for the Merger Consideration,
together with any dividends and other distributions paid in respect thereof
after the Effective Time. Shares of AIMCO Common Stock issued in the Merger
shall be issued as of, and be deemed to be outstanding as of, the Effective
Time. AIMCO shall cause all such shares of AIMCO Common Stock issued
pursuant to the Merger to be duly authorized, validly issued, fully paid
and nonassessable and not subject to preemptive rights. In the event any
Certificate(s) shall have been lost, stolen or destroyed, upon the making
of any affidavit of that fact by the IPT Shareholder claiming such
Certificate(s) to be lost, stolen or destroyed and, if reasonably required
by AIMCO or the Paying Agent, upon the posting by such IPT Shareholder of a
bond in such amount as reasonably determined as indemnity against any claim
that may be made against either of them with respect to such
Certificate(s), the Paying Agent shall issue the Merger Consideration in
respect of each IPT Share represented by such lost, stolen or destroyed
Certificate(s). Appropriate procedures shall be established by AIMCO and
the Paying Agent so that each holder of a Certificate at the Effective Time
shall be entitled to vote on all matters subject to the vote of holders of
AIMCO Common Stock with a record date on or after the date of the Effective
Time, whether or not such Certificate holder shall have surrendered
Certificates in accordance with the provisions of this Agreement. For
purposes of the immediately preceding sentence, AIMCO may rely conclusively
on the shareholder records of IPT in determining the identity of, and the
number of IPT Shares held by, each holder of a Certificate at the Effective
Time.
Section 2.4 Fractional Shares. Notwithstanding any other
provision of this Agreement, no fractional shares of AIMCO Common Stock
will be issued, and any IPT Shareholder entitled to receive a fractional
share of AIMCO Common Stock but for this Section 2.4 will be entitled to
receive a cash payment in lieu thereof equal to such shareholder's
proportionate interest in a share of AIMCO Common Stock multiplied by the
AIMCO Reference Price as of the Effective Time.
Section 2.5 No Other Rights. Upon consummation of the Merger,
the holder of a Certificate at and after the Effective Time shall have no
rights under this Agreement with respect to the IPT Shares represented
thereby other than the right to receive the Merger Consideration together
with any dividends and other distributions paid in respect thereof after
the Effective Time, upon the surrender of such Certificate pursuant to
Section 2.2 and the right to receive any declared but unpaid distributions
in respect of such IPT Shares. Nothing in this Agreement supersedes the
right of the IPT Shareholders to enforce Section 5.6 for the period
provided in Section 9.1.
ARTICLE III
THE CLOSING
Section 3.1 Closing. The closing of the Merger (the "Closing")
shall take place at the offices of Skadden, Arps, Slate, Meagher & Flom
LLP, 919 Third Avenue, New York, New York 10022, at 10:00 A.M., local time,
on the business day on which all of the conditions set forth in Article VII
hereof are first fulfilled or have been waived, provided that all of the
conditions set forth in Article VII hereof continue to be so satisfied or
waived on such day, and if not so satisfied or waived, the Closing shall be
automatically extended from time to time until the first subsequent day on
which all such conditions are again so satisfied or waived, subject,
however, to Article VIII hereof, or shall take place at such other time,
date and place as AIMCO and IPT shall mutually agree (the "Closing Date").
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF IPT
IPT represents and warrants to AIMCO as follows:
Section 4.1 Organization and Qualification of IPT. IPT is a
real estate investment trust duly formed, validly existing and in good
standing under the laws of the State of Maryland. IPT has furnished to
AIMCO true and complete copies of IPT's Declaration of Trust (the "IPT
Charter") and bylaws (the "IPT Bylaws"), each as is in effect on the date
of this Agreement.
Section 4.2 Organization and Qualification of IPLP. IPLP is a
limited partnership duly formed, validly existing and in good standing
under the laws of the State of Delaware. IPT has furnished to AIMCO true
and complete copies of the Fourth Amended and Restated Agreement of Limited
Partnership of IPLP as in effect on the date of this Agreement (the "IPLP
Limited Partnership Agreement"). As of the date hereof, the sole general
partner of IPLP is IPT, and the sole limited partners of IPLP are IFG and
Insignia Capital Corporation (which is a wholly-owned subsidiary of IFG).
Section 4.3 Capitalization. As of the date hereof, the
authorized shares of IPT beneficial interest consist of 400,000,000 IPT
Shares and 100,000,000 preferred shares of beneficial interest, par value
$.01 per share, of IPT ("IPT Preferred Shares"). As of the date hereof,
23,446,538 IPT Shares were issued and outstanding, of which 510,000 have
been issued under the IPT Share Plan. In addition, (a) 25,000 IPT Shares
are issuable upon exercise of outstanding options, and 28,000 IPT Shares
are issuable upon vesting of restricted share awards under the IPT Share
Plan, (b) no IPT Shares were held by IPT's Subsidiaries, (c) no IPT
Preferred Shares were issued and (d) no bonds, debentures, notes or other
indebtedness having the right to vote (or convertible into securities
having the right to vote) on any matters on which shareholders of IPT may
vote ("Voting Debt") were issued or outstanding. All outstanding IPT Shares
are validly issued, fully paid and nonassessable and are not subject to
preemptive rights. Except as described above, as of the date hereof there
are no outstanding subscriptions, calls, options, contracts, voting trusts,
proxies or other commitments, understandings, restrictions, arrangements,
rights or warrants, including any right of conversion or exchange under any
outstanding security, instrument or other agreement, obligating IPT or IPLP
to issue, deliver or sell, or cause to be issued, delivered or sold,
additional IPT Shares, IPT Preferred Shares or other ownership interests in
IPT or IPLP or any Voting Debt of IPT or IPLP or obligating IPT or IPLP to
grant, extend or enter into any such agreement or commitment.
Section 4.4 Authority; Non-Contravention
(a) Authority. IPT has all requisite power to enter into this
Agreement and, subject to obtaining the IPT Shareholders' Approval (as
defined in Section 4.6), to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation
by IPT of the transactions contemplated hereby have been duly authorized by
the IPT Board, which constitutes all necessary action on the part of IPT,
subject to obtaining the IPT Shareholders' Approval. This Agreement has
been duly and validly executed and delivered by IPT and, assuming the due
authorization, execution and delivery hereof by AIMCO, constitutes the
legal, valid and binding obligation of IPT enforceable against IPT in
accordance with its terms.
(b) Non-Contravention. As of the date hereof, the execution and
delivery of this Agreement by IPT do not, and, subject to obtaining the IPT
Shareholders' Approval, the consummation of the transactions contemplated
hereby will not, in any respect, violate, conflict with or result in a
breach of any provision of the IPT Charter or the IPT Bylaws.
Section 4.5 Tax Matters. "Taxes," as used in this Agreement,
means any and all federal, state, local and foreign taxes, including,
without limitation, income, sales and use, withholding, transfer,
franchise, real and personal property, employment, and payroll taxes,
together with any interest, penalties and additions thereto. "Tax Return,"
as used in this Agreement, means any report, return or other information
required to be supplied to any person with respect to Taxes.
(a) REIT Classification. At all times since its organization,
IPT has been organized and operated in conformity with Section 856-860 of
the Code (the "Status Requirements"), and its proposed method of operation
will enable it to meet the Status Requirements and otherwise qualify as a
REIT. The consummation by IPT of the transactions contemplated hereby and
the compliance with or fulfillment of the terms and provisions hereof by
IPT will not adversely affect the qualification of IPT as a REIT for each
taxable year ending on or after the Closing Date.
(b) Subchapter C Earnings and Profits. IPT does not have any
earnings and profits in excess of $1 million accumulated in any non-REIT
year within the meaning of Section 857 of the Code, including as a result
of the AMIT Merger.
Section 4.6 Vote Required. The affirmative vote of a majority
of the IPT Shares outstanding on the record date for the IPT Meeting (as
defined below) at which such vote is taken (the "IPT Shareholders'
Approval") is the only vote of the holders of any class of shares of
beneficial interest of IPT that is required to approve this Agreement, the
Merger and the other transactions contemplated hereby.
Section 4.7 AMIT Merger. AMIT was merged with and into IPT on
September 17, 1998.
Section 4.8 Opinion of Financial Advisor. The IPT Board has
received the opinion of Lehman Brothers Inc., dated the date hereof, that
the Merger Consideration is fair from a financial point of view to the
holders of IPT Shares other than IFG and AIMCO and their respective
Subsidiaries.
Section 4.9 Brokers. Except for Lehman Brothers Inc., no
broker, finder or investment banker is entitled to any broker's, finder's
or other fee or commission in connection with the Merger or the
transactions contemplated by this Agreement based upon arrangements made by
or on behalf of IPT.
Section 4.10 Absence of Inducement. In entering into this
Agreement, IPT has not been induced by, or relied upon, any
representations, warranties, or statements by AIMCO not set forth or
referred to in this Agreement, the schedules hereto or the other documents
required to be delivered hereby, whether or not such representations,
warranties, or statements have actually been made, in writing or orally,
and IPT acknowledges that, in entering into this Agreement, AIMCO has been
induced by and relied upon the representations and warranties of IPT herein
set forth and in the other documents required to be delivered hereby. IPT
has made its own investigation of AIMCO prior to the execution of this
Agreement and has not been induced by or relied upon any representations,
warranties or statements as to the advisability of entering into this
Agreement other than as set forth above or in the AIMCO SEC Reports (as
defined in Section 5.4).
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF AIMCO
AIMCO represents and warrants to IPT as follows:
Section 5.1 Organization and Qualification. AIMCO is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Maryland. AIMCO is duly qualified and in good standing
to do business in each jurisdiction where such qualification is required,
other than in such jurisdictions where the failure to so qualify would not
have, individually or in the aggregate, a material adverse effect on the
business, assets, financial condition, results of operations or prospects
(a "Material Adverse Effect") of AIMCO and its Subsidiaries taken as a
whole (an "AIMCO Material Adverse Effect"). AIMCO has all requisite
corporate power and authority, and has been duly authorized by all
necessary approvals and orders, to own, lease and operate its assets and
properties to the extent owned, leased and operated and to carry on it
business as it is now being conducted.
Section 5.2 Capitalization. As of the date hereof, the
authorized stock of AIMCO consists of 486,027,500 shares of AIMCO Common
Stock, 262,500 shares of Class B Common Stock, par value $.01 per share
("AIMCO Class B Common Stock") and 24,460,000 shares of Preferred Stock,
par value $.01 per share ("AIMCO Preferred Stock"). As of the date hereof,
(a) 47,982,057 shares of AIMCO Common Stock were issued and outstanding,
(b) 162,500 shares of AIMCO Class B Common Stock were issued and
outstanding, (c) 22,345,921 shares of AIMCO Preferred Stock were issued and
outstanding (including 750,000 shares of AIMCO Class B Cumulative
Convertible Preferred Stock, par value $.01 per share, 2,400,000 shares of
AIMCO 9% Class C Cumulative Preferred Stock, par value $.01 per share,
4,200,000 shares of AIMCO 8.75% Class D Cumulative Preferred Stock, par
value $.01 per share, 8,945,921 shares of AIMCO Class E Cumulative
Convertible Preferred Stock, par value $.01 per share, 4,050,000 shares of
AIMCO Class G Preferred Stock, par value $.01 per share, and 2,000,000
shares of AIMCO Class H Preferred Stock, par value $.01 per share), (d)
5,362,879 shares of AIMCO Common Stock were reserved for issuance upon the
exchange of units of limited partnership in AIMCO OP, (e) 5,115,246 shares
of AIMCO Common Stock were reserved for issuance pursuant to the AIMCO
benefit plans (the "AIMCO Benefit Plans") listed on Schedule 5.2 hereof and
outstanding warrants, (f) 11,408,973 shares of AIMCO Common Stock were
reserved for issuance upon conversion of AIMCO Preferred Stock, (g) 162,500
shares of AIMCO Common Stock were reserved for issuance upon conversion of
AIMCO Class B Common Stock and (h) no Voting Debt of AIMCO was issued or
outstanding. All outstanding shares of AIMCO Common Stock and AIMCO
Preferred Stock are validly issued, fully paid and nonassessable and are
not subject to preemptive rights. Upon consummation of the Merger and
issuance of shares of AIMCO Common Stock which comprise all or a part of
the Merger Consideration, all such shares will be validly issued, fully
paid and nonassessable and will not be subject to preemptive rights. As of
the date hereof, except as set forth on Schedule 5.2 hereof or pursuant to
this Agreement or the AIMCO Benefit Plans, there are no outstanding
subscriptions, calls, options, contracts, voting trusts, proxies or other
commitments, understandings, restrictions, arrangements, rights or
warrants, including any right of conversion or exchange under any
outstanding security, instrument or other agreement, obligating AIMCO or
any of its Subsidiaries to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock or other ownership
interest or any Voting Debt of AIMCO or any AIMCO Subsidiary or obligating
AIMCO or any AIMCO Subsidiary to grant, extend or enter into any such
agreement or commitment. Except as set forth on Schedule 5.2 hereof or in
connection with the AIMCO Benefit Plans, after the Effective Time, there
will be no agreement or commitment of any character obligating AIMCO or any
AIMCO Subsidiary to issue, deliver or sell, or cause to be issued,
delivered or sold, any shares of capital stock or other ownership interest
or any Voting Debt of AIMCO or any AIMCO Subsidiary, or obligating AIMCO or
any AIMCO Subsidiary to grant, extend or enter into any such agreement or
commitment.
Section 5.3 Authority; Non-Contravention; Required Filings.
(a) Authority. AIMCO has all requisite corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation by AIMCO of the transactions contemplated hereby have been
duly authorized by the AIMCO Board, which constitutes all necessary
corporate action on the part of AIMCO. This Agreement has been duly and
validly executed and delivered by AIMCO and, assuming the due
authorization, execution and delivery hereof by IPT, constitutes the legal,
valid and binding obligation of AIMCO enforceable against AIMCO in
accordance with its terms.
(b) Non-Contravention. The execution and delivery of this
Agreement by AIMCO do not, and the consummation of the transactions
contemplated hereby will not, result in a violation, conflict with or
breach of (any such violation, conflict or breach is referred to herein as
a "Violation") any provisions of (i) the AIMCO Charter or by-laws of AIMCO,
(ii) any statute, law, ordinance, rule, regulation, judgment, decree,
order, injunction, writ, permit or license of any governmental authority
applicable to AIMCO or any AIMCO Subsidiary or any of their respective
properties or assets or (iii) any note, bond, mortgage, indenture, credit
enhancement agreement, deed of trust, license, franchise, permit,
concession, contract, lease or other instrument, obligation or agreement of
any kind to which AIMCO or any AIMCO Subsidiary is a party or by which it
or any of its properties or assets may be bound or affected, except in the
case of clause (ii) or (iii) for any such Violation which would not have,
individually or in the aggregate, an AIMCO Material Adverse Effect.
(c) Required Filings. Except as required under the Securities
Act of 1933, as amended (the "Securities Act"), the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and the rules of the NYSE (the
"AIMCO Required Filings"), no declaration, filing or registration with, or
notice to, or authorization, consent or approval of, any court, federal,
state, local or foreign government or regulatory body (including the United
States Department of Housing and Urban Development and/or applicable state
housing agencies (collectively, "HUD"), a stock exchange or other
self-regulatory body) or authority (each, a "Governmental Authority") is
necessary for the execution and delivery of this Agreement by AIMCO or the
consummation by AIMCO of the transactions contemplated hereby, except as
would not result, individually or in the aggregate, in an AIMCO Material
Adverse Effect.
Section 5.4 Reports and Financial Statements. All filings
required to be made by AIMCO since December 31, 1997 under Section 13(a),
13(c), 14 or 15(d) of the Exchange Act have been filed with the Securities
and Exchange Commission ( the "SEC") (the "AIMCO SEC Reports"). The AIMCO
SEC Reports, as of their respective dates, complied in all material
respects with all applicable requirements of the appropriate statutes and
the rules and regulations thereunder. As of their respective dates, the
AIMCO SEC Reports did not contain any 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. The audited consolidated financial
statements and unaudited interim financial statements of AIMCO included in
the AIMCO SEC Reports have been prepared in accordance with generally
accepted accounting principles ("GAAP") applied on a consistent basis
(except as may be indicated therein or in the notes thereto or, with
respect to unaudited interim financial statements, as permitted by Form
10-Q of the SEC) and fairly present, in all material respects, the
financial position of AIMCO as of the dates thereof and the results of its
operations and cash flows for the periods then ended, subject, in the case
of the unaudited interim financial statements, to normal, recurring audit
and year-end adjustments.
Section 5.5 Absence of Certain Changes or Events. Except as set
forth in the AIMCO SEC Reports, since December 31, 1997, each of AIMCO and
its Subsidiaries has conducted its business in the ordinary course of
business consistent with past practice, and there has not been any AIMCO
Material Adverse Effect.
Section 5.6 Registration Statement, Information
Statement/Prospectus and Schedule 13E-3. The information supplied or to be
supplied by or on behalf of AIMCO for inclusion or incorporation by
reference in (a) the Registration Statement (as defined in Section 6.2), at
the time it is filed with the SEC, at the time it becomes effective under
the Securities Act and at the Effective Time, (b) the Information
Statement/Prospectus (as defined in Section 6.2), at the time it is filed
with the SEC, at the time it is mailed to the IPT Shareholders and at the
time of the IPT Meeting and (c) the Schedule 13E-3 (as defined in Section
6.2), at the time such statement is filed with the SEC, will not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. The Registration Statement, the Information
Statement/Prospectus and the Schedule 13E-3 will comply as to form in all
material respects with the provisions of the Securities Act and the
Exchange Act and the rules and regulations thereunder.
Section 5.7 No Vote Required. The approval of this Agreement,
the Merger and the other transactions contemplated hereby, including
without limitation, the issuance and listing on the NYSE of the AIMCO
Common Stock to be issued in the Merger, does not require the vote of the
holders of any class or series of the capital stock of AIMCO or any of its
Subsidiaries.
Section 5.8 Tax Matters.
(a) Filing of Timely Tax Returns. AIMCO and each of its
Subsidiaries have filed (or there has been filed on its behalf) all Tax
Returns required to be filed by each of them under applicable law. All such
Tax Returns were and are in all material respects true, complete and
correct and filed on a timely basis.
(b) Payment of Taxes. AIMCO and each of its Subsidiaries have,
within the time and in the manner prescribed by law, paid all Taxes that
are currently due and payable for all periods through and including the
Closing Date, except for those contested in good faith and for which
adequate reserves have been taken.
(c) Tax Reserves. AIMCO and its Subsidiaries have established
on their books and records reserves adequate to pay all material Taxes and
reserves for deferred income Taxes in accordance with GAAP.
(d) Tax Liens. There are no Tax liens upon the material assets
of AIMCO or any of its Subsidiaries except liens for Taxes not yet
delinquent.
(e) REIT Classification. At all times since the initial public
offering of AIMCO, AIMCO has been organized and operated in conformity with
the Status Requirements, and its proposed method of operation will enable
it to continue to meet the Status Requirements and otherwise qualify as a
REIT.
(f) Continuation as REIT. The consummation by AIMCO of the
transactions contemplated hereby or compliance with or fulfillment of terms
and provisions hereof by AIMCO, will not adversely affect the qualification
of AIMCO as a REIT for each taxable year ending on or after the Closing
Date.
(g) Deficiencies. No deficiencies for any Taxes have been
proposed, asserted or assessed against AIMCO and there is no outstanding
waiver of the statute of limitations with respect to any Taxes or Tax
Returns of AIMCO.
(h) Domestic Control. AIMCO believes that it is a
"domestically-controlled" REIT within the meaning of Section 897(h)(4)(B)
of the Code.
Section 5.9 Brokers. No broker, finder or investment banker is
entitled to any broker's, finder's or other fee or commission in connection
with the Merger or the transactions contemplated by this Agreement based
upon arrangements made by or on behalf of AIMCO.
Section 5.10 Absence of Inducement. In entering into this
Agreement, AIMCO has not been induced by, or relied upon, any
representations, warranties, or statements by IPT not set forth or referred
to in this Agreement or the other documents required to be delivered
hereby, whether or not such representations, warranties, or statements have
actually been made, in writing or orally, and AIMCO acknowledges that, in
entering into this Agreement, IPT has been induced by and relied upon the
representations and warranties of AIMCO herein set forth, the information
set forth in the AIMCO SEC Reports and in the other documents required to
be delivered hereby. AIMCO has made its own investigation of IPT prior to
the execution of this Agreement and has not been induced by or relied upon
any representations, warranties or statements as to the advisability of
entering into this Agreement other than as set forth above.
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1 IPT and IPLP Distributions.
(a) IPT shall (and shall cause IPLP to) continue to make
regular quarterly distributions, as follows: IPT shall pay on October 15,
1998 its previously declared distribution of $.16 per IPT Share to IPT
Shareholders of record on September 30, 1998; thereafter, IPT shall declare
and pay quarterly distributions with record dates and payment dates which
are exactly the same as the record dates and payment dates for regular
quarterly distributions paid by AIMCO in respect of the AIMCO Common Stock,
in each case at the then current IPT Distribution Amount (determined as of
the applicable record date); provided, however, that with respect to the
first such IPT distribution required to be declared and paid after October
15, 1998, the per-IPT Share amount of such distribution shall be an amount
equal to the otherwise applicable IPT Distribution Amount, multiplied by
the number of days that have elapsed from and including December 23, 1998
through and including the record date for such distribution, divided by 91
(rounded up to the next whole cent).
(b) In the event that the Effective Time has not occurred on or
before February 28, 1999, if at any time thereafter AIMCO declares any
distribution on the AIMCO Common Stock other than a regular quarterly
distribution, with a record date for such distribution which is a date
prior to the date of the Effective Time (a "Special AIMCO Distribution"),
then IPT shall promptly declare and pay a corresponding distribution in an
amount equal to the amount of such Special AIMCO Distribution, multiplied
by the IPT Exchange Value, divided by the AIMCO Collar Price.
(c) If and to the extent that IPT reasonably determines that
the distributions paid by IPT pursuant to the foregoing subsections (a) and
(b) of this Section 6.1 are not sufficient for IPT to meet the distribution
requirements applicable to REITs for its taxable year ended on the Closing
Date, including as a result of the AMIT Merger, then IPT shall, prior to
the Effective Time, pay one or more special distributions, in respect of
the IPT Shares in an aggregate amount equal to amount of such shortfall
(the per-IPT Share aggregate amount of such distributions, if any, is
referred to herein as the "Excess Distribution Amount").
(d) AIMCO covenants and agrees that AIMCO will use its best
efforts to cause IPT to timely declare and pay the distributions it is
required to make pursuant to the foregoing subsections (a), (b) and (c) of
this Section 6.1.
Section 6.2 Registration Statement, Information
Statement/Prospectus and Schedule 13E-3. As soon as reasonably practicable
after the date hereof (a) AIMCO shall prepare and file with the SEC a
registration statement (as amended, the "Registration Statement") in
connection with the issuance of AIMCO Common Stock pursuant to the Merger,
in which the Information Statement/Prospectus (as defined below) shall be
included as a prospectus, and (b) the parties shall prepare and file with
the SEC a combined information statement and prospectus to be distributed
in connection with the Merger and the transactions contemplated hereby (as
amended, the "Information Statement/Prospectus") and a transaction
statement on Schedule 13E-3 (the "Schedule 13E-3"). The parties shall use
their reasonable best efforts to have the Registration Statement declared
effective under the Securities Act by the SEC as soon as practicable after
such filing and to cause the Information Statement/Prospectus to be mailed
to IPT Shareholders as soon as practicable after the Registration Statement
is declared effective by the SEC. Each party shall furnish all information
concerning itself which is required or customary for inclusion in the
Registration Statement, the Information Statement/Prospectus or the
Schedule 13E-3. The information provided by any party for use in the
Registration Statement, the Information Statement/Prospectus or the
Schedule 13E-3 shall be true and correct in all material respects without
omission of any material fact which is required to make such information
not false or misleading. No representation, covenant or agreement is made
by any party with respect to information supplied by the other party for
inclusion in the Registration Statement, the Information
Statement/Prospectus or the Schedule 13E-3. Each party shall also take such
action as may be reasonably required to cause the shares of AIMCO Common
Stock covered by the Registration Statement to be approved for listing on
the NYSE as of the Effective Time, upon official notice of issuance. Each
party shall also take such action as may be reasonably required to cause
the shares of AIMCO Common Stock issuable in connection with the Merger to
be registered or to obtain an exemption from registration under applicable
state "blue sky" or securities laws; provided, however, that no party shall
be required to register or qualify as a foreign corporation or to take
other action which would subject it to general service of process in any
jurisdiction where the Surviving Entity will not be, following the Merger,
so subject.
Section 6.3 Regulatory Matters. Each party shall cooperate and
use its reasonable best efforts to promptly prepare and file all necessary
documentation and to effect all necessary applications, notices, petitions,
filings and other documents, including, without limitation, the AIMCO
Required Filings.
Section 6.4 Shareholder Approval. IPT shall, as soon as
practicable after the date hereof, (a) take all steps necessary to duly
call, give notice of, convene and hold a meeting of the IPT Shareholders
(an "IPT Meeting") for the purpose of voting on the Merger, which meeting
shall be held on a date (the "IPT Meeting Date") which is a NYSE trading
day, provided that the day immediately preceding such date must also be a
NYSE trading day, and (b) distribute to IPT Shareholders the Information
Statement/Prospectus. The IPT Board, acting upon the recommendation of a
majority of the Continuing Trustees (as defined in the IPT Bylaws), unless
otherwise required in accordance with its fiduciary duties to IPT
Shareholders, shall recommend to such shareholders the approval of the
Merger, this Agreement and the transactions contemplated hereby and
cooperate and consult with AIMCO with respect to each of the foregoing
matters. Notwithstanding the foregoing, IPT and the Continuing Trustees may
take and disclose to IPT Shareholders a position contemplated by Rule 14e-2
promulgated under the Exchange Act if required to do so by the Exchange
Act, comply with Rule 14d-9 thereunder and make all other disclosures
required by applicable law.
Section 6.5 Vote of IPT Shares Owned by AIMCO. AIMCO agrees to
vote all IPT Shares owned of record by it, and to cause all IPT Shares
owned of record by its Subsidiaries to be voted, for approval of this
Agreement and the transactions contemplated hereby and has executed a proxy
in favor of Messrs. Aston, Farkas and Garrison (the "Proxyholders") to vote
all such IPT Shares held by AIMCO, directly or indirectly, in favor of the
Merger. AIMCO further agrees that, through the Effective Time, it shall not
(i) sell, transfer or otherwise dispose of any IPT Shares owned by it or
any of its Subsidiaries, (ii) cause or permit IPT to issue additional IPT
Shares to any other Person or take any other action which could have the
effect of reducing the proportion of IPT Shares owned by AIMCO and its
Subsidiaries that are entitled to vote on this Agreement and the
transactions contemplated hereby, or (iii) grant any proxies with respect
to such shares; provided, however, that AIMCO may (a) transfer IPT Shares
owned by it to its Subsidiaries so long as such Subsidiary agrees to be
bound by the terms of this Agreement and to execute a proxy to vote such
IPT Shares in favor of the Merger in the form attached as Exhibit 6.5 or
(b) pledge such IPT Shares to a commercial bank or other bona fide
financial institution with capital exceeding $100,000,000 (a "Financial
Institution") so long as such Financial Institution agrees in writing to
(1) honor the proxy given by AIMCO to the Proxyholders with respect to such
pledged IPT Shares on the date hereof, (2) execute a proxy in favor of the
Proxyholders or their successors once the Financial Institution obtains the
right to vote such pledged IPT Shares and (3) cause any transferee of such
IPT Shares from the Financial Institution to execute a proxy in favor of
the Proxyholders or their successors and to agree to cause any subsequent
transferee of the IPT Shares to also agree to the obligations in subsection
(3).
Section 6.6 Public Announcements. Subject to each party's
disclosure obligations imposed by law and the rules of any national
securities exchange or inter-dealer quotation system on or in which the
shares of stock, beneficial interest or other ownership interests of IPT or
AIMCO are now or may later be listed or authorized to be quoted, IPT and
AIMCO shall cooperate with each other in the development and distribution
of all news releases and other public announcements with respect to this
Agreement or any of the transactions contemplated hereby and shall not
issue any public announcement or statement with respect hereto or thereto
without the consent of the other party (which consent shall not be
unreasonably withheld).
Section 6.7 Expenses. All costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby
shall be paid by the party incurring such expenses.
Section 6.8 Further Assurances. Each party shall, and shall
cause its Subsidiaries to, execute such further documents and instruments
and take such further action, including, without limitation, obtaining any
consents, authorizations, exemptions and approvals, as may be necessary to
perform the obligations and satisfy the conditions to be performed or
satisfied by either party pursuant to this Agreement or as may reasonably
be requested by the other party in order to consummate the Merger in
accordance with the terms hereof. In addition, AIMCO agrees to use its
commercially reasonable efforts to retain counsel within 30 days from the
date hereof to provide the form of opinion required by Section 7.2(g).
Section 6.9 Transfer Taxes. The parties shall cooperate in the
preparation, execution and filing of all returns, questionnaires,
applications or other documents regarding the real property transfer or
gains, sales, use, transfer, value added, stock transfer and stamp taxes,
any transfer, recording, registration and other fees or similar Taxes
("Transfer Taxes") which become payable in connection with the transactions
contemplated by this Agreement that are required to be filed on or before
the Closing Date.
Section 6.10 IPT Trustees and Officers. No later than promptly
after the execution and delivery of this Agreement by both parties, IPT
shall (a) cause two members of the IPT Board to resign their trusteeships,
(b) increase the size of the IPT Board to eleven and cause each of the
trustee candidates designated by AIMCO listed on Schedule 6.10-1 hereto
(together with their successors, the "AIMCO-nominated Trustees") to be
elected as a trustee of IPT, (c) cause the officer candidates designated by
AIMCO and listed on Schedule 6.10-2 hereto to be appointed to the
respective positions indicated on such Schedule, (d) establish a committee
of the IPT Board, consisting solely of AIMCO-nominated Trustees, authorized
and empowered to act to the extent set forth in the IPT Bylaws, (e)
recognize that the Continuing Trustees (as defined in the IPT Bylaws) of
the IPT Board, consisting of Andrew L. Farkas, James A. Aston, Warren M.
Eckstein, Frank M. Garrison and Bryan L. Herrmann, are authorized and
empowered to act to the extent set forth in the IPT Bylaws, and (f)
establish an executive committee of the IPT Board, to consist solely of
AIMCO-nominated Trustees listed on Schedule 6.10-3, to act to the extent
set forth in the IPT Bylaws. The committees referred to in the preceding
sentence shall not be dissolved prior to the Effective Time or the
termination of this Agreement. The powers of the Continuing Trustees shall
not be modified prior to the Effective Time or the termination of this
Agreement without the consent of a majority of the Continuing Trustees. If,
after the date hereof and prior to the Effective Time, any IPT Shareholder
vote is taken for the election of a trustee to any position on the IPT
Board currently occupied by any of the Continuing Trustees or by their
successors duly elected hereunder, AIMCO shall vote its IPT Shares for the
reelection of each such Continuing Trustee or for the election of such
Continuing Trustee's successor designated by a majority of the Continuing
Trustees. If, after the date hereof and prior to the Effective Time, any
vacancy on the IPT Board arises with respect to a trustee position occupied
by a Continuing Trustee, AIMCO shall cause the AIMCO-nominated Trustees to
vote to fill such vacancy by electing a person nominated by a majority of
the Continuing Trustees. After the date hereof and prior to the earlier of
the Effective Time or the termination of this Agreement, without the prior
written consent of a majority of the Continuing Trustees, which shall not
be unreasonably withheld, IPT shall not terminate (x) its independent
auditors, (y) Lehman Brothers Inc. from serving as its financial advisor
with respect to the Merger, or (z) Proskauer Rose LLP, Miles & Stockbridge,
Rogers & Wells or Akin, Gump, Strauss, Hauer & Feld from serving as its
legal counsel with respect to the Merger. The parties agree that Jeffrey P.
Cohen shall remain as Secretary of the Company, and in such capacity shall
be invited and entitled to attend all meetings of the IPT Board and each
committee thereof. In the event that Jeffrey P. Cohen shall cease to serve
as Secretary of the Company for any reason, another individual nominated by
a majority of the Continuing Trustees shall be appointed to such position
and be so invited and entitled to attend such meetings. Without the
approval of a majority of the Continuing Trustees, AIMCO shall not, and
shall not permit any AIMCO-nominated Trustee to, remove a Continuing
Trustee as a trustee of the IPT Board or amend the IPT Charter unless such
amendment shall have been approved by a majority of the Continuing
Trustees.
Section 6.11 Modification of Form of Transaction. Upon the
earlier to occur of (i) December 31, 2000 or (ii) such time (if ever) as
any Law is adopted or issued after the date hereof which has the effect, as
supported by the written opinion of outside counsel for AIMCO, of
prohibiting the Merger, or any court of competent jurisdiction in the
United States shall have issued an order, judgment or decree permanently
restraining, enjoining or otherwise prohibiting the Merger, which order,
judgment or decree has become final and nonappealable, IPT, acting upon the
recommendation of the Continuing Trustees, and AIMCO shall use their best
efforts to restructure the form of the transaction to one which has a
materially improved chance of completion and can be accomplished without
materially changing either the consideration to be received by IPT
Shareholders or the tax or other economic consequences of the transaction
to AIMCO and its Subsidiaries. Pending a definitive agreement between IPT
and AIMCO providing for such a restructured transaction, AIMCO and IPT
shall continue to be obligated to diligently pursue the consummation of the
Merger on the terms contemplated by this Agreement until such time, if
ever, as this Agreement is terminated pursuant to Section 8.1.
Section 6.12 Indemnification.
(a) "Losses" shall mean any and all actual costs or expenses
(including, without limitation, attorneys' fees billed at standard hourly
rates, investigation costs and remediation costs, interest, penalties and
fines and all legal and other costs, expenses and disbursements in giving
testimony or furnishing documents in response to a subpoena or otherwise),
judgments, amounts paid in settlement, fines, penalties, assessments, Taxes
(as defined in the IFG Agreement, but excluding Taxes arising from amounts
paid to an Indemnitee (as defined in Section 6.12(b)), losses, actions or
causes of action, claims, demands, damages, liabilities, obligations,
awards, disbursements or assessments of every kind, nature and description
(including, without limitation, counsel's fees billed at standard hourly
rates and expenses, as and when incurred, in connection with any action,
claim or proceeding relating thereto). Notwithstanding the foregoing,
Losses shall be reduced to reflect any insurance proceeds actually
recovered by the Indemnitee relating to such claim, provided that this
reduction shall not be applied if to do so would excuse any insurer from
any obligation to cover any loss. If the Indemnitee receives insurance
proceeds after it receives indemnity hereunder, then the Indemnitee, within
10 days of receipt of such proceeds, shall pay to AIMCO the amount by which
AIMCO's payment would have been reduced if the insurance proceeds had been
received before the indemnity payments.
(b) AIMCO shall save, defend, indemnify and hold harmless each
person who is a trustee or officer of IPT, any person succeeding to their
position prior to the Closing Date, and their respective successors and
heirs (each, an "Indemnitee") to the fullest extent permitted by applicable
law from and against all Losses, as and when incurred, whether or not
involving a third party, that arise out of or are the result of the fact
that he is, was, or is to be, either prior to or after the execution of
this Agreement, a trustee, officer or employee of IPT, except that no
Indemnitee shall be entitled to be indemnified hereunder with respect to
any Loss determined to have been incurred (i) by reason of such
Indemnitee's wilful misconduct or (ii) with respect to attorney's fees and
expenses which are not reasonable, in each case in a written factual
finding issued in a court proceeding or other adjudication not subject to
further appeal or issued in an arbitration (as to (ii) only), and, in the
event of such a finding, any funds advanced to such Indemnitee pursuant to
Section 6.12(c) and which are not found to be within the provision of
clause (i) or (ii) shall be returned by such Indemnitee promptly to AIMCO.
AIMCO shall make payments under this Section 6.12 within 30 days from the
date that an Indemnitee has requested indemnification hereunder.
(c) If any action, suit, proceeding or investigation is
commenced as to which an Indemnitee proposes to demand indemnification, he
shall notify AIMCO with reasonable promptness; provided, however, that
failure to give reasonably prompt notice to AIMCO shall not affect the
indemnification obligations of AIMCO hereunder except to the extent that
the failure to so notify has led to prejudice against AIMCO in such action,
suit, proceeding or investigation. The Indemnitee shall have the right to
retain counsel of its own choice to represent him; and such counsel shall,
to the extent consistent with its professional responsibilities, cooperate
with AIMCO and any counsel designated by AIMCO. AIMCO shall be liable only
for any settlement of any claim against an Indemnitee made with AIMCO's
written consent, which consent shall not be unreasonably withheld. AIMCO
shall not, without the prior written consent of an Indemnitee, settle or
compromise any claim, or permit a default or consent to the entry of any
judgment in respect thereof, unless such settlement, compromise or consent
includes, as an unconditional term thereof, the giving by the claimant to
such Indemnitee of an unconditional release from all liability in respect
of such claim.
(d) Before enforcing his rights under this Section 6.12, an
Indemnitee must first demand indemnification from IPT pursuant to the
indemnification provisions set forth in the IPT Charter, IPT Bylaws and any
contractual arrangement between such Indemnitee and IPT. If, after ten
business days from the date that such Indemnitee had requested
indemnification from IPT pursuant to the indemnification provisions of the
IPT Charter, IPT Bylaws and any contractual arrangement between such
Indemnitee and IPT, IPT has not paid the Indemnitee's claim or
satisfactorily responded to such Indemnitee's request, as reasonably
determined by the Indemnitee, the Indemnitee shall be free to assert a
claim for indemnification pursuant to this Section 6.12.
(e) Notwithstanding any other provision of this Agreement to
the contrary, this Section 6.12 and Section 6.13 shall survive the
consummation of the Merger and termination of this Agreement.
Section 6.13 Insurance. AIMCO and IPT agree that after the date
hereof and until the Effective Time, IPT shall maintain in full force and
effect, and AIMCO shall use its best efforts to cause IPT to maintain in
full force and effect, directors', trustees' and officers' liability
insurance covering the existing and Continuing Trustees, directors and
officers of IPT and its Subsidiaries which is no less favorable than the
insurance coverage which is in effect and covering such trustees, directors
and officers on the date hereof. AIMCO further agrees that following the
Effective Time, the Surviving Entity will maintain such insurance covering
such persons, and each such person covered by such insurance immediately
prior to the Effective Time shall be named as additional insureds.
Section 6.14 Conduct of IPT's Business Pending the Effective
Time.
Each of IPT and AIMCO covenants and agrees that from the date
of this Agreement until the Effective Time:
(a) IPT shall use its best efforts to maintain its listing on
the American Stock Exchange;
(b) none of IPT, IPLP or any Controlled IPT Entity (as defined
in Section 8.2) shall loan money to AIMCO or any Controlled AIMCO Entity
(as defined in Section 8.2);
(c) neither IPT nor IPLP shall reclassify any of their
respective equity securities or other interests or issue or authorize or
propose the issuance of any other securities or interests in respect of, in
lieu or, or in substitution for, their respective equity securities or
other interests;
(d) neither IPT nor AIMCO shall cause the IPLP Limited
Partnership Agreement to be amended, except with the prior consent of a
majority of the Continuing Trustees, provided that IPLP may admit
Additional Limited Partners (as defined the IPLP Limited Partnership
Agreement) other than AIMCO or its affiliates to IPLP in accordance with
the terms of the IPLP Limited Partnership Agreement without such consent;
(e) during such time as AIMCO controls (as such term is defined
in the rules and regulations promulgated under Rule 12b-2 of the Exchange
Act) IPT, neither IPT nor AIMCO shall cause IPT to make termination fee
payments to IFG or any of its subsidiaries under sections 7.1(c), 7.2(c) or
7.2(d) of the IPLP Limited Partnership Agreement or benefit from the rights
provided in Section 9.6 thereof;
(f) IPT shall duly and timely file all reports and other
documents required to be filed pursuant to the Securities Act, the Exchange
Act and the rules and regulations thereunder;
(g) IPT shall follow the same general policy as AIMCO in
releasing and drafting its future press releases and such releases will
include the AIMCO Collar Price (if determinable), the IPT Exchange Value
and, if applicable, the future date through which AIMCO may elect to pay
cash;
(h) AIMCO shall not, nor shall AIMCO permit any of its
Subsidiaries to, willfully take any action that would result in a state of
facts which would make the Merger impossible to be consummated or would
result in a material breach of any provision of this Agreement or in any of
its material representations and warranties set forth in this Agreement
being untrue on and as of the Closing Date; provided, however, that AIMCO
and its Subsidiaries (other than IPT) may issue securities, acquire
securities or assets and otherwise act in the ordinary course of their
business;
(i) all transactions between IPT, IPLP or any Controlled IPT
Entity, on the one hand, and AIMCO or any Controlled AIMCO Entity, on the
other hand, shall be on arms' length terms;
(j) IPT shall not increase its annual general and
administrative expenses in excess of an annual increase based on the
Consumer Price Index (with the amortization of restricted stock outstanding
as of the date hereof being excluded from the definition of general and
administrative expenses); and
(k) neither AIMCO nor any of its affiliates (as defined in Rule
12b-2 of the Exchange Act), directly or indirectly, shall bid for, purchase
or attempt to induce any Person to bid for or purchase AIMCO Common Stock
except in compliance with Regulation M and, treating the purchasing entity
as the "issuer," Rule 10b-18 under the Exchange Act (a) from the fifth
business day prior to the first day of the period in which the AIMCO Collar
Price is determined until the last day of the period in which the AIMCO
Collar Price is determined or (b) from the fifth business day prior to the
first day of the period in which the AIMCO Reference Price is determined
until the last day of the period on which the AIMCO Reference Price is
determined. AIMCO shall report the volume, dates and prices of such
purchases to IPT's Secretary weekly.
ARTICLE VII
CONDITIONS
Section 7.1 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligations of each party to effect the Merger shall
be subject to the satisfaction of the following conditions:
(a) Shareholder Approval. The IPT Shareholders' Approval shall
have been obtained on or prior to the Closing Date.
(b) No Injunction. No temporary restraining order or
preliminary or permanent injunction or other order by any federal or state
court preventing consummation of the Merger shall have been issued and be
continuing in effect.
(c) No Change in Law. The Merger and the other transactions
contemplated hereby shall not have been prohibited under any applicable
federal or state law or regulation adopted or amended after the date
hereof.
(d) Effectiveness of Registration Statement. If the Merger
Consideration to be issued pursuant to Section 2.1 consists of any shares
of AIMCO Common Stock, (i) the Registration Statement shall continue to be
effective under the Securities Act at the Effective Time, and no stop order
suspending such effectiveness shall be in effect, and (ii) all applicable
time periods required under the Exchange Act following the mailing of the
Information Statement/Prospectus to IPT Shareholders shall have elapsed.
Section 7.2 Additional Conditions to Obligation of IPT to
Effect the Merger. The obligation of IPT to effect the Merger shall be
further subject to the satisfaction of the following conditions, unless
waived by a majority of the Continuing Trustees of the IPT Board in
writing.
(a) Fairness Opinion. As of the Closing Date, the opinion of
Lehman Brothers Inc. referred to in Section 4.8 shall not have been
withdrawn.
(b) Representations and Warranties. If the Merger Consideration
is to be comprised in whole or in part of AIMCO Common Stock, the
representations and warranties of AIMCO contained in Article V which are
qualified as to materiality shall be true and correct, and all other
representations and warranties of AIMCO contained in this Agreement shall
be true and correct, in all material respects, in each case (i) on and as
of the date hereof and (ii) at and as of the Effective Time with the same
effect as though such representations and warranties had been made at and
as of the Effective Time (except for representations and warranties that
expressly speak only as of a specific date or time which need only be true
and correct as of such date or time); provided that this condition to the
obligation of IPT to consummate the Merger shall be deemed satisfied if the
aggregate losses, costs, damages and expenses to IPT due to breaches of
such representations and warranties (without giving effect to any
materiality qualification or standard contained in any such representations
and warranties), when aggregated with failures to comply with covenants by
AIMCO and AIMCO Material Adverse Effects, does not exceed $50.0 million.
(c) Performance of Obligations of AIMCO. If the Merger
Consideration is to be comprised in whole or in part of AIMCO Common Stock,
each of AIMCO and the AIMCO Subsidiaries shall have performed, in all
respects, all obligations set forth in Sections 6.10, 6.13, 6.14(d) and
6.14(k).
(d) AIMCO Officer's Certificate. If the Merger Consideration is
to be comprised in whole or in part of AIMCO Common Stock, IPT shall have
received a certificate signed by the President of AIMCO, dated as of the
Closing Date, to the effect that, to the best of such officer's knowledge,
the conditions set forth in Sections 7.2(b) and (c) have been satisfied.
(e) AIMCO REIT Opinion. If the Merger Consideration is to be
comprised in whole or in part of AIMCO Common Stock, IPT shall have
received an opinion of Skadden, Arps, Slate, Meagher & Flom LLP, counsel to
AIMCO, dated as of the Closing Date, substantially in the form attached
hereto as Exhibit 7.2(e).
(f) AIMCO Reorganization Opinion. If the Merger Consideration
is to be comprised in whole or in part of AIMCO Common Stock, IPT shall
have received an opinion of Skadden, Arps, Slate, Meagher & Flom LLP,
counsel to AIMCO, dated as of the Closing Date, substantially in the form
attached hereto as Exhibit 7.2(f) or such revised opinion as contemplated
by Section 1.1 which is reasonably satisfactory to a majority of Continuing
Trustees and their counsel; provided, however, that if AIMCO is unable to
deliver either opinion, the Merger Consideration shall include only cash,
regardless of any Cash Election Notice to the contrary.
(g) AIMCO Corporate Law Opinion. IPT shall have received an
opinion, dated as of the Closing Date, substantially in the form attached
hereto as Exhibit 7.2(g) from counsel mutually satisfactory to the parties
hereto.
Section 7.3 Additional Conditions to Obligation of AIMCO to
Effect the Merger. The obligation of AIMCO to effect the Merger shall be
further subject to the satisfaction of the following conditions, unless
waived by AIMCO in writing:
(a) Representations and Warranties. The representations and
warranties of IPT contained in Article IV which are qualified as to
materiality shall be true and correct and all other representations and
warranties of IPT contained in this Agreement shall be true and correct, in
all material respects, on and as of the date hereof; provided that this
condition to the obligation of AIMCO to consummate the Merger shall be
deemed satisfied if the aggregate loss, cost, damage or expense to AIMCO
due to breaches of such representations and warranties (without giving
effect to any materiality qualification or standard contained in any such
representations and warranties) does not exceed $50.0 million.
(b) REIT Opinion. The opinion of Akin, Gump, Strauss, Hauer and
Feld, L.L.P., counsel to IPT, dated and delivered to AIMCO on the date
hereof, receipt of which is hereby acknowledged by AIMCO, shall not have
been withdrawn on the basis solely of facts existing as of the date hereof.
(c) Opinion of IPT's Counsel. The opinion of Miles &
Stockbridge, counsel to IPT, dated and delivered to AIMCO on the date
hereof, receipt of which is hereby acknowledged by AIMCO, shall not have
been withdrawn on the basis solely of facts existing as of the date hereof.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
Section 8.1 Termination. This Agreement may be terminated at
any time prior to the Effective Time, whether before or after receipt of
the IPT Shareholders' Approval contemplated by this Agreement:
(a) by mutual written consent of a majority of the Continuing
Trustees and the AIMCO Board; or
(b) by AIMCO, by written notice to each of the Continuing
Trustees, if the Effective Time shall not have occurred on or before
December 31, 2001; or
(c) by a majority of the Continuing Trustees, on behalf of IPT,
by written notice to AIMCO, if:
(i) the Effective Time shall not have occurred
on or before December 31, 2001;
(ii) a majority of the Continuing Trustees shall
determine in good faith that any proposal by or offer from any Person
relating to any (A) acquisition of a substantial amount of assets of
IPT or IPLP or any of the outstanding IPT Shares or IPLP partnership
interests, (B) offer to purchase outstanding IPT Shares or IPLP
partnership interests or (C) merger, consolidation, business
combination, sale of substantially all assets, recapitalization,
liquidation or similar transaction involving IPT or IPLP, other than
the transactions contemplated by this Agreement (an "Alternative
Proposal"), constitutes a proposal that is reasonably likely to be
consummated and would, if consummated, result in a transaction which
is more favorable, from a financial point of view, to IPT
Shareholders than the transactions contemplated by this Agreement (a
"Superior Proposal"); provided, however, that the Continuing Trustees
may not terminate this Agreement pursuant to this Section 8.1(c)(ii)
unless (x) five days shall have elapsed after delivery to AIMCO of a
written notice of such determination by the Continuing Trustees and
at all reasonable times during such five-day period the Continuing
Trustees shall have cooperated with AIMCO in informing AIMCO of the
terms and conditions of such Alternative Proposal and the identity of
the person or group making such Alternative Proposal, with the
objective of providing AIMCO a reasonable opportunity, during such
five-day period, to propose a modification of the terms and
conditions of this Agreement so that a business combination between
IPT and AIMCO may be effected, (y) during such five-day period, the
Continuing Trustees negotiate in good faith with AIMCO with respect
to such proposed modifications, and (z) at the end of such five-day
period, a majority of the Continuing Trustees continues to believe in
good faith that such Alternative Proposal constitutes a Superior
Proposal; or
(iii) AIMCO has taken any action that constitutes an
anticipatory repudiation of this Agreement and has failed to cure
such action within 10 days from receipt of notice (whether written or
oral) from a majority of the Continuing Trustees.
Section 8.2 Effect of Termination. In the event of termination
of this Agreement by either IPT or AIMCO pursuant to Section 8.1, the
effects and consequences of such termination, and relative rights and
obligations of the parties as a result thereof, shall be as set forth in
this Section 8.2 and in the IPT Bylaws.
(a) Certain Definitions. As used in this Agreement, the
following terms have the following meanings:
"AIMCO Termination Reference Price" means the average
price (computed based on the sum of the high and low sales prices of AIMCO
Common Stock (as reported in the NYSE Composite Transactions reporting
system as published in The Wall Street Journal or, if not published
therein, in another authoritative source) divided by two) of a share of
AIMCO Common Stock during the ten consecutive NYSE trading day period
ending on and including the Termination Date.
"AIMCO Termination Share Value" means (i) the AIMCO
Termination Reference Price, if the Termination Date is on or prior to
December 31, 1998, or (ii) the lesser of the AIMCO Collar Price or the
AIMCO Termination Reference Price, if the Termination Date is on or after
January 1, 1999.
"Control" has the meaning specified in Rule 12b-2
of the Exchange Act.
"Controlled AIMCO Entity" means AIMCO and each Person
which, as of or after the date of this Agreement, is or becomes directly or
indirectly Controlled by AIMCO.
"Controlled IPT Entity" means any Person which, as of or
after the date of this Agreement, is or becomes directly or indirectly
Controlled by IPT, other than IPLP and each wholly-owned Subsidiary of IPT
or IPLP.
"Covered IPT Assets" means any and all (i) securities,
assets (whether real or personal, tangible or intangible) and other things
of value acquired by any Controlled AIMCO Entity from any of IPT, IPLP or
any wholly-owned Subsidiary of IPT or IPLP at any time prior to the
Termination Date (including prior to the Insignia Merger) and (ii) cash and
non-cash distributions received in respect of the foregoing, together, in
the case of cash distributions, with a return thereon at an annual rate of
10%, compounded annually, from the date of receipt thereof through the
Termination Date; provided that to the extent any item which would have
otherwise constituted a Covered IPT Asset has been sold or otherwise
disposed of, the consideration received therefor, together with interest on
any cash portion thereof on the same basis, shall be substituted for such
item.
"Covered Third-Party Assets" means any and all of the
following acquired by any Controlled AIMCO Entity from any Person other
than IPT, IPLP or a wholly-owned Subsidiary of IPT or IPLP at any time
prior to the Termination Date (including prior to the Insignia Merger): (i)
equity securities or debt securities of, or other ownership interests in or
indebtedness of, any Controlled IPT Entity; (ii) assets, whether real or
personal, tangible or intangible, of any Controlled IPT Entity; (iii) any
other thing of value acquired from a Controlled IPT Entity; and (iv) cash
and non-cash distributions received in respect of the foregoing, together,
in the case of cash distributions, with a return thereon at an annual rate
of 10%, compounded annually, from the date of receipt thereof through the
Termination Date; provided that to the extent any item which would have
otherwise constituted a Covered Third-Party Asset has been sold or
otherwise disposed of, the consideration received therefor, together with
interest on any cash portion thereof on the same basis, shall be
substituted for such item.
"IPT Unwind Consideration" means any and all (i)
consideration delivered to IPT, IPLP and wholly-owned Subsidiaries of IPT
and IPLP in exchange for the Covered IPT Assets, and (ii) cash and non-cash
distributions received in respect of the foregoing, together, in the case
of cash distributions, with a return thereon at an annual rate of 10%,
compounded annually, from the date of receipt thereof through the
Termination Date; provided that to the extent any item which would have
otherwise constituted IPT Unwind Consideration has been sold or otherwise
disposed of, the consideration received therefor, together with interest on
any cash portion thereof on the same basis, shall be substituted for such
item.
"IPT Security" means, at the option of the recipients,
either an IPT Share or a Common Partnership Unit (as defined in the IPLP
Limited Partnership Agreement).
"IPT Termination Share Value" means an amount equal to
the IPT Exchange Value, divided by the AIMCO Termination Share Value,
multiplied by the AIMCO Termination Reference Price.
"IPT Unwind Consideration" means the issuance to AIMCO
(or its designee) of a number of fully paid, validly issued and
non-assessable IPT Securities equal to the Termination Purchase Price
divided by the IPT Termination Share Value.
"IPT Unwind Consideration Price" means the consideration
originally paid or delivered by AIMCO or its affiliates to IPT or its
affiliate together with all distributions received with respect thereto
together, in the case of a cash distribution, with interest thereon at an
annual rate of 10%, compounded annually; provided that to the extent any
such consideration has been sold or otherwise disposed of, the
consideration received therefor, together with interest on any cash portion
thereof on the same basis, shall be substituted for such consideration.
"Termination Date" means the date on which this Agreement
is terminated pursuant to Section 8.1.
"Third-Party Unwind Consideration" means a number of
fully paid, validly issued and non-assessable IPT Securities equal to the
Third-Party Unwind Price divided by the IPT Termination Share Value.
"Third-Party Unwind Price" means the aggregate fair value
of the consideration originally paid or delivered by the applicable
Controlled AIMCO Entity in exchange for the Covered Third-Party Assets,
plus interest thereon at an annual rate of 10%, compounded annually, from
the date of acquisition through the Termination Date, minus the aggregate
fair value of all cash and non-cash distributions received in respect of
the Covered Third-Party Assets, minus interest on the amount of cash
distributions at an annual rate of 10%, compounded annually, from the date
of receipt through the Termination Date; provided that to the extent any
such consideration has been sold or otherwise disposed of, the
consideration received therefor, together with interest on any cash portion
thereof on the same basis, shall be substituted for such consideration.
(b) "Third-Party Unwind". As soon as practicable after such
termination, AIMCO shall transfer and assign to IPT or IPLP, as
appropriate, all of the Covered Third-Party Assets, in exchange for which
IPT or IPLP, as appropriate, shall issue to AIMCO (or its designee) the
Third-Party Unwind Consideration, provided that equal cash amounts due from
each party may be netted out.
(c) "IPT Unwind". As soon as practicable after such
termination, AIMCO shall assign and transfer to IPT, IPLP of the
wholly-owned Subsidiary or IPT or IPLP, as applicable, all of the Covered
IPT Assets, in exchange for which IPLP shall return to the applicable
Controlled AIMCO Entity the applicable IPT Unwind Consideration, provided
that equal cash amounts due from each party may be netted out.
(d) Limitation on Liability; Survival. Except as set forth in
this Section 8.2, there shall be no liability on the part of either IPT or
AIMCO or their respective officers, trustees or directors hereunder after a
termination, except that (i) the foregoing limitation on liability shall
not apply with respect to any party whose breach of any representation,
warranty, covenant or agreement is reason for such termination, and (ii) in
all events, in addition to the provisions of Section 9.1, Sections 6.7,
6.10, 6.12, 6.13, 9.10 and this Section 8.2 hereof shall survive such
termination.
Section 8.3 Amendment. This Agreement may be amended, at any
time before or after the IPT Shareholders' Approval has been obtained and
prior to the Effective Time, only by a written instrument signed by AIMCO
and a majority of the Continuing Trustees, on behalf of IPT; provided,
however, that after the IPT Shareholders' Approval has been obtained, no
such amendment shall, without the further approval of the IPT Shareholders,
(a) alter or change the amount or type of Merger Consideration or any
proceedings relating to the treatment of IPT Shares under Article II hereof
or (b) alter or change any of the other terms and conditions of this
Agreement if such alterations or changes, individually or in the aggregate,
would adversely affect the rights of holders of IPT Shares.
Section 8.4 Waiver. At any time prior to the Effective Time,
AIMCO or IPT, acting pursuant to the decision of a majority of the
Continuing Trustees may (a) extend the time for the performance of any of
the obligations or other acts of the other party, (b) waive any
inaccuracies in the representations and warranties of the other party
contained herein or in any document delivered pursuant hereto and (c) waive
compliance with any of the agreements or conditions of the other party
contained herein, to the extent permitted by applicable law. Any agreement
on the part of a party to any such extension or waiver shall be valid if
set forth in an instrument in writing signed on behalf of such party,
provided that in order for a waiver by IPT to be valid and effective, such
instrument must be signed by a majority of the Continuing Trustees.
ARTICLE IX
GENERAL PROVISIONS
Section 9.1 Survival of Representations and Warranties. In
addition to the provisions of Section 8.2, the representations and
warranties contained in this Agreement shall not survive the Effective
Time, except for (i) Section 5.6, which shall remain in effect until one
year after the Effective Time and shall survive the consummation of the
Merger and the termination of this Agreement (ii) Sections 6.14(e), which
shall survive the termination of this Agreement, indefinitely, and (iii)
the third sentence of Section 5.2, which shall survive the consummation of
the Merger indefinitely.
Section 9.2 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given (a) when delivered
personally, (b) one business day after delivered to a reputable overnight
courier service or (c) when sent via facsimile (which is confirmed by copy
sent within one business day by a reputable overnight courier service) to
the parties at the following addresses (or at such other address for a
party as shall be specified by like notice):
(a) If to IPT, to:
Insignia Properties Trust
375 Park Avenue, Suite 3401
New York, New York 10152
Attn: Jeffrey P. Cohen
Facsimile: (212) 980-8544
Telephone: (212) 750-6070
with a copy (which shall not constitute notice) to:
Proskauer Rose LLP
1585 Broadway
New York, New York 10036
Attn: Arnold S. Jacobs
Facsimile: (212) 969-2900
Telephone: (212) 969-3210
(b) If to AIMCO, to:
Apartment Investment and Management Company
1873 South Bellaire Street, 17th Floor
Denver, Colorado 80222
Attn: Peter K. Kompaniez
Facsimile: (303) 757-8735
Telephone: (303) 757-8101
with a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, Meagher & Flom, LLP
300 South Grand Avenue, Suite 3400
Los Angeles, California 90071
Attn: Michael V. Gisser
Facsimile: (213) 687-5600
Telephone: (213) 687-5000
Section 9.3 Adjustment for Dilution. All references in this
Agreement to per share amounts and prices shall be equitably adjusted to
take into account any splits, combinations, equity dividends,
reclassifications and similar transactions, such that no party or IPT
Shareholder is any better or worse off than they would have been had such
transaction not occurred.
Section 9.4 Entire Agreement. This Agreement and the schedules
hereto constitute the entire agreement, and supersede all other prior
agreements and understandings, both written and oral, between the parties
with respect to the subject matter hereof.
Section 9.5 Assignment. This Agreement may not be assigned by
either party and any attempted assignment shall be void and of no effect.
Section 9.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
INCLUDING, WITHOUT LIMITATION, SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK
GENERAL OBLIGATIONS LAW AND SECTION 327(b) OF THE NEW YORK CIVIL PRACTICE
LAWS AND RULES, EXCEPT TO THE EXTENT THAT SECTIONS 1.1, 1.2, 1.3, 1.4 AND
2.1(b) AND (c) ARE EXPRESSLY GOVERNED BY OR DERIVE THEIR AUTHORITY FROM THE
MGCL OR MCAA.
Section 9.7 Interpretation. When reference is made in this
Agreement to Sections or Exhibits, such reference shall be to a Section or
Exhibit of this Agreement unless otherwise indicated. The table of contents
and headings contained in this Agreement are for convenience only and shall
not affect in any way the meaning or interpretation of this Agreement.
Whenever the words "include," "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words "without
limitation."
Section 9.8 Counterparts; Effect. This Agreement may be
executed in counterparts, each of which shall be deemed to be an original,
but all of which shall constitute one and the same agreement.
Section 9.9 Parties' Interest. This Agreement shall be binding
upon each party hereto and shall inure solely to the benefit of each party
hereto and the IPT Shareholders. Nothing in this Agreement, express or
implied, is intended to confer upon any third party, other than the IPT
Shareholders, any rights or remedies of any nature whatsoever under or by
reason of this Agreement.
Section 9.10 Enforcement. The parties agree that irreparable
damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or
were otherwise breached. Accordingly, it is agreed that the parties shall
be entitled to an injunction or injunctions, in addition to any other
remedy to which they are entitled at law or in equity, to prevent breaches
of this Agreement and to specifically enforce the terms and provisions of
this Agreement in any federal or state court located in the County of New
York, State of New York. In addition, each of the parties hereto (a)
consents to submit itself to the personal jurisdiction of any federal or
state court located in the County of New York in the event any dispute
arises out of this Agreement or any of the transactions contemplated by
this Agreement, (b) agrees that it shall not attempt to deny such personal
jurisdiction by motion or other request for leave from any such court and
(c) agrees that it shall not bring any action relating to this Agreement or
any of the transactions contemplated by this Agreement in any court other
than a federal or state court sitting in the County of New York.
Section 9.11 Severability. The provisions of this Agreement
shall be deemed severable, and the invalidity or unenforceability of any
provision shall not affect the validity or enforceability of the other
provisions hereof. If any provision of this Agreement, or the application
thereof to any person or entity or any circumstance, is invalid or
unenforceable, (a) a suitable and equitable provision shall be substituted
therefor in order to carry out, so far as may be valid and enforceable, the
intent and purpose of such invalid or unenforceable provision and (b) the
remainder of this Agreement and the application of such provision to other
persons, entities or circumstances shall not be affected by such invalidity
or unenforceability, nor shall such invalidity or unenforceability affect
the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.
Section 9.12 Letter Agreement. The letter agreement, dated
October 14, 1997, as amended by the letter dated March 2, 1998, between
AIMCO and IFG, if it has been terminated, shall be reinstated each time
AIMCO breaches any of its obligations under Section 6.12, whereupon it
shall remain in effect for a period of two years from the date of breach,
insofar as such agreement applies to Controlled IPT Entities.
Section 9.13 Knowledge. As used herein, the "knowledge"of IPT
or any IPT Subsidiary shall mean the actual knowledge of any of Andrew L.
Farkas, James A. Aston, Frank M. Garrison, Ronald Uretta or Jeffrey P.
Cohen, and the "knowledge" of AIMCO or any AIMCO Subsidiary shall mean the
actual knowledge of any of Terry Considine, Peter Kompaniez, Patrick Foye,
Thomas M. Toomey or (with respect to property-related matters only) Harry
G. Alcock.
Section 9.14 Breaches. Notwithstanding any other provision
herein, if at the time of execution of this Agreement AIMCO has actual
knowledge of a breach of any representation or warranty by IPT, or IPT has
actual knowledge of a breach of any representation or warranty by AIMCO,
such party shall be deemed to have waived such breach to the extent of its
actual knowledge of such breach at such time.
* * * * *
IN WITNESS WHEREOF, AIMCO and IPT have caused this Agreement to
be signed by their respective officers thereunto duly authorized as of the
date first written above.
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
By: _____________________________
Name:
Title:
INSIGNIA PROPERTIES TRUST
By: _____________________________
Name:
Title:
TABLE OF CONTENTS
Page
ARTICLE I
THE MERGER.......................................................2
Section 1.1 Structure of the Merger.................2
Section 1.2 The Merger..............................2
Section 1.3 Effects of the Merger. ................3
Section 1.4 Effective Time of the Merger . .........3
ARTICLE II
TREATMENT OF SHARES..............................................3
Section 2.1 Effect of the Merger on IPT Shares......3
Section 2.2 Surrender of Certificates...............8
Section 2.3 Closing of Transfer Books; Etc. .......9
Section 2.4 Fractional Shares. ....................9
Section 2.5 No Other Rights. .....................10
ARTICLE III
THE CLOSING.....................................................10
Section 3.1 Closing................................10
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF IPT...........................10
Section 4.1 Organization and Qualification of IPT..10
Section 4.2 Organization and Qualification of IPLP.11
Section 4.3 Capitalization.........................11
Section 4.4 Authority; Non-Contravention...........11
Section 4.5 Tax Matters............................12
Section 4.6 Vote Required..........................12
Section 4.7 AMIT Merger............................12
Section 4.8 Opinion of Financial Advisor...........12
Section 4.9 Brokers................................12
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF AIMCO.........................13
Section 5.1 Organization and Qualification.........13
Section 5.2 Capitalization.........................13
Section 5.3 Authority; Non-Contravention; Required
Filings .............................14
Section 5.4 Reports and Financial Statements.......15
Section 5.5 Absence of Certain Changes or Events...16
Section 5.6 Registration Statement, Information
Statement/Prospectus and
Schedule 13E-3.......................16
Section 5.7 No Vote Required.......................16
Section 5.8 Tax Matters............................16
Section 5.9 Brokers................................17
Section 5.10 Absence of Inducement..................17
ARTICLE VI
ADDITIONAL AGREEMENTS...........................................18
Section 6.1 IPT and IPLP Distributions.............18
Section 6.2 Registration Statement, Information
Statement/Prospectus and
Schedule 13E-3.......................19
Section 6.3 Regulatory Matters.....................20
Section 6.4 Shareholder Approval. .................20
Section 6.5 Vote of IPT Shares Owned by AIMCO......20
Section 6.6 Public Announcements...................21
Section 6.7 Expenses...............................21
Section 6.8 Further Assurances. ...................21
Section 6.9 Transfer Taxes.........................21
Section 6.10 IPT Trustees and Officers..............21
Section 6.11 Modification of Form of Transaction....22
Section 6.12 Indemnification........................23
Section 6.13 Insurance. ............................25
Section 6.14 Conduct of IPT's Business Pending the
Effective Time.......................25
ARTICLE VII
CONDITIONS......................................................27
Section 7.1 Conditions to Each Party's
Obligation to Effect the Merger......27
Section 7.2 Additional Conditions to Obligation
of IPT to Effect the Merger..........27
Section 7.3 Additional Conditions to Obligation
of AIMCO to Effect the Merger........28
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER...............................29
Section 8.1 Termination............................29
Section 8.2 Effect of Termination..................30
Section 8.3 Amendment..............................33
Section 8.4 Waiver.................................34
ARTICLE IX
GENERAL PROVISIONS..............................................34
Section 9.1 Survival of Representations and
Warranties...........................34
Section 9.2 Notices................................34
Section 9.3 Adjustment for Dilution................35
Section 9.4 Entire Agreement.......................35
Section 9.5 Assignment. ..........................36
Section 9.6 GOVERNING LAW..........................36
Section 9.7 Interpretation. ......................36
Section 9.8 Counterparts; Effect...................36
Section 9.9 Parties' Interest......................36
Section 9.10 Enforcement............................36
Section 9.11 Severability...........................37
Section 9.12 Letter Agreement.......................37
Section 9.13 Knowledge. ...........................37
Section 9.14 Breaches. ............................37
INDEX OF DEFINED TERMS
Page
Agreement.............................................................1
AIMCO.................................................................1
AIMCO Benefit Plans..................................................14
AIMCO Board ..........................................................1
AIMCO Charter.........................................................3
AIMCO Class B Common Stock...........................................13
AIMCO Collar Price....................................................3
AIMCO Common Stock....................................................4
AIMCO Exchange Value..................................................4
AIMCO Material Adverse Effect........................................13
AIMCO OP..............................................................1
AIMCO Preferred Stock................................................13
AIMCO Reference Period................................................4
AIMCO Reference Price.................................................4
AIMCO Required Filings...............................................15
AIMCO Restricted Shares...............................................7
AIMCO SEC Reports....................................................15
AIMCO Termination Reference Price....................................31
AIMCO Termination Share Value........................................31
AIMCO-nominated Trustees.............................................21
Alternative Proposal.................................................30
AMIT..................................................................1
AMIT Merger...........................................................1
Cash Election Notice...............................................4, 7
Cash Percentage....................................................4, 7
Certificate ..........................................................6
Closing .............................................................10
Closing Date.........................................................10
Code .................................................................2
Control..............................................................31
Controlled AIMCO Entity..............................................31
Controlled IPT Entity................................................31
Conversion Ratio......................................................4
Distribution Shortfall Amount.........................................4
Effective Time........................................................3
Excess Distribution Amount........................................4, 19
Exchange Act.........................................................15
Exchange Fund.........................................................8
Financial Institution................................................20
GAAP ................................................................16
Governmental Authority...............................................15
HUD .................................................................15
IFG ..................................................................1
IFG Agreement.........................................................1
Indemnitee .........................................................23
Information Statement/Prospectus.....................................19
Insignia Merger.......................................................1
IPLP Limited Partnership Agreement...................................11
IPT ..................................................................1
IPT Board.............................................................1
IPT Bylaws...........................................................10
IPT Charter..........................................................10
IPT Distribution Amount...............................................4
IPT Exchange Value....................................................5
IPT Meeting Date.....................................................20
IPT Preferred Shares.................................................11
IPT Security.........................................................32
IPT Share Plan........................................................7
IPT Shareholders......................................................1
IPT Shareholders' Approval...........................................12
IPT Shares............................................................1
IPT Termination Share Value..........................................32
IPT Unwind Consideration.............................................32
IPT Unwind Consideration Price.......................................32
Losses...............................................................23
Material Adverse Effect..............................................13
MCAA..................................................................3
Merger................................................................1
Merger Consideration..................................................5
MGCL..................................................................3
NYSE..................................................................5
Paying Agent..........................................................8
Person................................................................5
Proxyholders.........................................................20
Registration Statement...............................................19
REIT..................................................................2
Schedule 13E-3.......................................................19
SEC..................................................................15
Securities Act.......................................................15
Special AIMCO Distribution...........................................18
Status Requirements..................................................17
Stock Percentage......................................................5
Subsidiary ..........................................................5
Superior Proposal....................................................30
Surviving Entity......................................................3
Tax Return...........................................................12
Taxes................................................................12
Termination Date.....................................................32
Transfer Taxes.......................................................21
Violation............................................................15
Voting Debt..........................................................11
INSIGNIA PROPERTIES TRUST
SECOND AMENDED AND RESTATED
BYLAWS
ARTICLE I
OFFICES
Section 1. PRINCIPAL OFFICE. The principal office of the Trust
shall be located at such place or places as the Trustees my designate.
Section 2. ADDITIONAL OFFICES. The Trust may have additional
offices at such places as the Trustees may from time to time determine or
the business of the Trust may require.
Section 3. FISCAL AND TAXABLE YEARS. The fiscal and taxable
years of the Trust shall begin on January 1 and end on December 31.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 1. PLACE. All meetings of shareholders shall be held at
the principal office of the Trust or at such other place within the United
States as shall be stated in the notice of the meeting.
Section 2. ANNUAL MEETING. An annual meeting of the shareholders
for the election of Trustees and the transaction of any business within the
powers of the Trust shall be held each year, at a convenient location and
on proper notice, on the date and at the time set by the Trustees. The
Trust shall use its efforts to hold its annual meeting before June 30 of
each year. Failure to hold an annual meeting at all or on a timely basis
does not invalidate the Trust's existence or affect any otherwise valid
acts of the Trust.
Section 3. SPECIAL MEETINGS. The Chairman of the Board or the
President may call special meetings of the shareholders. Special meetings
of shareholders may also be called by a majority of the Trustees or by the
secretary upon the written request of the holders of shares entitled to
cast not less than 25% of all the votes entitled to be cast at such
meeting. Such request shall state the purpose of such meeting and the
matters proposed to be acted on at such meeting. The secretary shall
inform such shareholders of the reasonably estimated cost of preparing and
mailing notice of the meeting and, upon payment by such shareholders to the
Trust of such costs, the secretary shall give notice to each shareholder
entitled to notice of the meeting.
Section 4. NOTICE. Not less than ten nor more than 60 days before
each meeting of shareholders, the secretary shall give to each shareholder
entitled to vote at such meeting and to each shareholder not entitled to
vote (but who is entitled to notice of the meeting) written or printed
notice stating the time and place of the meeting and, in the case of a
special meeting or as otherwise may be required by any statute, the purpose
for which the meeting is called, either by mail or by presenting it to such
shareholder personally or by leaving it at his or her residence or usual
place of business. If mailed, such notice shall be deemed to be given when
deposited in the United States mail addressed to the shareholder at his
post office address as it appears on the records of the Trust, with postage
thereon prepaid.
Section 5. SCOPE OF NOTICE. Any business of the Trust may be
transacted at an annual meeting of shareholders without being specifically
designated in the notice, except such business as is required by any
statute to be stated in such notice. No business shall be transacted at a
special meeting of shareholders except as specifically designated in the
notice.
Section 6. ORGANIZATION. At every meeting of the shareholders,
the Chairman of the Board, if there is one, shall conduct the meeting or,
in the case of vacancy in office or absence of the Chairman of the Board,
one of the following officers present shall conduct the meeting in the
order stated: the Vice Chairman of the Board, if there is one, the
President, the Vice Presidents in their order of rank and seniority, or a
Chairman chosen by the shareholders entitled to cast a majority of the
votes which all shareholders present in person or by proxy are entitled to
cast, shall serve as Chairman, and the Secretary, or, in his absence, an
assistant secretary, or in the absence of both the Secretary and assistant
secretaries, a person appointed by the Chairman shall serve as Secretary.
Section 7. QUORUM. At any meeting of shareholders, the presence
in person or by proxy of shareholders entitled to cast a majority of all
the votes entitled to be cast at such meeting shall constitute a quorum;
but this Section shall not affect any requirement under any statute or the
Declaration of Trust for the vote necessary for the adoption of any
measure. If, however, such quorum shall not be present at any meeting of
the shareholders, the shareholders entitled to vote at such meeting,
present in person or by proxy, shall have the power to adjourn the meeting
from time to time to a date not more than 120 days after the original
record date without notice other than announcement at the meeting. At such
adjourned meeting at which a quorum shall be present, any business may be
transacted which might have been transacted at the meeting as originally
notified.
Section 8. VOTING. A Majority of all the votes cast at a meeting
of shareholders duly called and at which a quorum is present shall be
sufficient to elect a Trustee. Each share may be voted for as many
individuals as there are Trustee to be elected and for whose election the
share is entitled to be voted. A majority of the votes cast at a meeting
of shareholders duly called and at which a quorum is present shall be
sufficient to approve any other matter which may properly come before the
meeting, unless more than a majority of the votes cast is required herein
or by statute or by the Declaration of Trust. Unless other wise provided
in the Declaration of Trust, each outstanding share, regardless of class,
shall be entitled to one vote on each matter submitted to a vote at a
meeting of shareholders.
Section 9. PROXIES. A shareholder may cast the votes entitled to
be cast by the shares owned of record by him, her or it, either in person
or by proxy executed in writing by the shareholder or by his, her or its
duly authorized attorney in fact. Such proxy shall be filed with the
secretary of the Trust before or at the time of the meeting. No proxy
shall be valid more than eleven months from the date of its execution,
unless otherwise provided in the proxy.
Section 10. VOTING OF SHARES BY CERTAIN HOLDERS. Shares of the
Trust registered in the name of a corporation, partnership, trust or other
entity, if entitled to be voted, may be voted by the president or a vice
president, a general partner or trustee thereof, as the case may be, or a
proxy appointed by any of the foregoing individuals, unless some other
person who has been appointed to vote such shares pursuant to a bylaw or a
resolution of the governing board of such corporation or other entity or
agreement of the partners of the partnership presents a certified copy of
such bylaw, resolution or agreement, in which case such person may vote
such shares. Any trustee or other fiduciary may vote shares registered in
his, her or its name as such fiduciary, either in person or by proxy.
Shares of the Trust directly or indirectly owned by it shall not be
voted at any meeting and shall not be counted in determining the total
number of outstanding shares entitled to be voted at any given time, unless
they are held by it in a fiduciary capacity, in which case they may be
voted and shall be counted in determining the total number of outstanding
shares at any given time.
The Trustees may adopt by resolution a procedure by which a
shareholder may certify in writing to the Trust that any shares registered
in the name of the shareholder are held for the account of a specified
person other than the shareholder. The resolution shall set forth the
class of shareholders who may make the certification, the purpose for which
the certification may be made, the form of certification and the
information to be contained in it; if the certification is with respect to
a record date or closing of the share transfer books, the resolution shall
state the time after the record date or closing of the share transfer books
within which the certification must be received by the Trust; and any other
provisions with respect to the procedure which the Trustees consider
necessary or desirable. On receipt of such certification, the person
specified in the certification shall be regarded as, for the purposes set
forth in the certification, the shareholder of record of the specified
shares in place of the shareholder who makes the certification.
Section 11. INSPECTORS. At any meeting of shareholders, the
chairman of the meeting may, or upon the request of any shareholder shall,
appoint one or more persons as inspectors for such meeting. Such
inspectors shall ascertain and report the number of shares represented at
the meeting based upon their determination of the validity and effect of
proxies, count all votes, report the results and perform such other acts as
are proper to conduct the election and voting with impartiality and
fairness to all the shareholders.
Each report of any inspector shall be in writing and signed by him
or her or by a majority of them if there is more than one inspector acting
at such meeting. If there is more than one inspector, the report of a
majority shall be the report of the inspectors. The report of the
inspector or inspectors on the number of shares represented at the meeting
and the results of the voting shall be prima facie evidence thereof.
Section 12. NOMINATIONS AND SHAREHOLDER BUSINESS.
(a) ANNUAL MEETINGS OF SHAREHOLDERS.
(1) Nominations of persons for election to the Board of
Trustees and the proposal of business to be considered by the
shareholders may be made at an annual meeting of shareholders (i)
pursuant to the Trust's notice of meeting, (ii) by or at the
direction of the Trustees or (iii) by any shareholder of the
Trust who was a shareholder of record at the time of giving of
notice provided for in this Section 12(a), who is entitled to
vote at the meeting and who complied with the notice procedures
set forth in this Section 12.
(2) For nominations or other business to be properly
brought before an annual meeting by a shareholder pursuant to
clause (iii) of paragraph (a)(1) of this Section 12, the
shareholder must have given timely notice thereof in writing to
the secretary of the Trust. To be timely, a shareholder's
notice shall be delivered to the secretary at the principal
executive offices of the Trust not less than 60 days nor more
than 90 days prior to the first anniversary of the preceding
year's annual meeting; provided, however, that in the event that
the date of the annual meeting is advanced by more than 30 days
or delayed by more than 60 days from such anniversary date,
notice by the shareholder to be timely must be so delivered not
earlier than the 90th day prior to such annual meeting and not
later than the close of business on the later of the 60th day
prior to such annual meeting or the tenth day following the day
on which public announcement of the date of such meeting is first
made. Such shareholder's notice shall set forth (i) each person
whom the shareholder proposes to nominate for election or
reelection as a Trustee; (ii) as to any other business that the
shareholder proposes to bring before the meeting, a brief
description of the business desired to be brought before the
meeting, the reasons for conducting such business at the meeting
and any material interest in such business of such shareholder
and of the beneficial owner, if any, on whose behalf the proposal
is made; and (iii) as to the shareholder giving the notice and
the beneficial owner, if any, on whose behalf the nomination or
proposal is made, (x) the name and address of such shareholder,
as they appear on the Trust's books, and of such beneficial owner
and (y) the number of each class of shares of the Trust which are
owned beneficially and of record by such shareholder and such
beneficial owner.
(3) Notwithstanding anything in the second sentence of
paragraph (a)(2) of this Section 12 to the contrary, in the event
that the number of Trustees to be elected to the Board of
Trustees is increased and there is no public announcement naming
all of the nominees for Trustee or specifying the size of the
increased Board of Trustees made by the Trust at least 70 days
prior to the first anniversary of the preceding year's annual
meeting, a shareholder's notice required by this Section 12(a)
shall also be considered timely, but only with respect to
nominees for any new positions created by such increase, if it
shall be delivered to the secretary at the principal executive
offices of the Trust not later than the close of business on the
tenth day following the day on which such public announcement is
first made by the Trust.
(b) SPECIAL MEETINGS OF SHAREHOLDERS. Only such business shall
be conducted at a special meeting of shareholders as shall have been
brought before the meeting pursuant to the Trust's notice of meeting.
Nominations of persons for election to the Board of Trustees may be made at
a special meeting of shareholders at which Trustees are to be elected (i)
pursuant to the Trust's notice of meeting, (ii) by or at the direction of
the Board of Trustees or (iii) provided that the Board of Trustees has
determined that Trustees shall be elected at such special meeting, by any
shareholder of the Trust who was a shareholder of record at the time of
giving of notice provided for in this Section 12(b) and at the time of the
special meeting, who is entitled to vote at the meeting and who complied
with the notice procedures set forth in this Section 12(b). In the event
the Trust calls a special meeting of shareholders for the purpose of
electing one or more Trustees to the Board of Trustees, any such
shareholder may nominate a person or persons (as the case may be) for
election to such position as specified in the Trust's notice of meeting, if
the shareholder's notice containing the information required by paragraph
(a)(2) of this Section 12 shall be delivered to the secretary at the
principal executive offices of the Trust not earlier than the 90th day
prior to such special meeting and not later than the close of business on
the later of the 60th day prior to such special meeting or the tenth day
following the day on which public announcement is first made of the date of
the special meeting and of the nominees proposed by the Trustees to be
elected at such meeting.
(c) GENERAL. Only such persons who are nominated in accordance
with the procedures set forth in this Section 12 shall be eligible to serve
as Trustees and only such business shall be conducted at a meeting of
shareholders as shall have been brought before the meeting in accordance
with the procedures set forth in this Section 12. The presiding officer of
the meeting shall have the power and duty to determine whether a nomination
or any business proposed to be brought before the meeting was made in
accordance with the procedures set forth in this Section 12 and, if any
proposed nomination or business is not in compliance with this Section 12,
to declare that such defective nomination or proposal be disregarded.
Section 13. VOTING BY BALLOT. Voting on any question or in any
election may be via voice vote unless the presiding officer shall order or
any shareholder shall demand that voting be by ballot.
ARTICLE III
TRUSTEES
Section 1. GENERAL POWERS; QUALIFICATIONS; TRUSTEES HOLDING OVER.
The business and affairs of the Trust shall be managed under the direction
of its Board of Trustees. A Trustee shall be an individual at least 21
years of age who is not under legal disability. In case of failure to
elect Trustees at an annual meeting of the shareholders, the Trustees
holding over shall continue to direct the management of the business and
affairs of the Trust until their successors are elected and qualify.
Section 2. ANNUAL AND REGULAR MEETINGS. An annual meeting of the
Trustees shall be held immediately after and at the same place as the
annual meeting of shareholders, no notice other than this Bylaw being
necessary. The Trustees may provide, by resolution, the time and place,
either within or without the State of Maryland, for the holding of regular
meetings of the Trustees without other notice than such resolution.
Section 3. SPECIAL MEETINGS. Special meetings of the Trustees may
be called by or at the request of the Chairman of the Board or the
President or by a majority of the Trustees then in office. The person or
persons authorized to call special meetings of the Trustees may fix any
place, either within or without the State of Maryland, as the place for
holding any special meeting of the Trustees called by them.
Section 4. NOTICE. Notice of any special meeting shall be given
by written notice delivered personally, by overnight courier or mailed to
each Trustee at his business or residence address or by telephone,
telegram, telex, facsimile transmission or similar means of same day
delivery. Notice personally delivered or sent by overnight courier shall
be given at least two days prior to the meeting. Notice by mail shall be
given at least five days prior to the meeting. Telephone, facsimile-
transmission or other same day delivery notice shall be given at least 24
hours prior to the meeting. If mailed, such notice shall be deemed to be
given when deposited in the United States mail properly addressed, with
postage thereon prepaid. If given by telegram, such notice shall be deemed
to be given when the Trustee is personally given such notice in a telephone
call to which he is a party. Facsimile-transmission notice shall be deemed
given upon completion of the transmission of the message to the number
given to the Trust by the Trustee and receipt of a completed answer-back
indicating receipt. Neither the business to be transacted at, nor the
purpose of, any annual, regular or special meeting of the Trustees need be
stated in the notice, unless specifically required by statute or these
Bylaws.
Section 5. QUORUM. A majority of the entire Board of Trustees
shall constitute a quorum for transaction of business at any meeting of the
Trustees, provided that, if less than a majority of such Trustees are
present at said meeting, a majority of the Trustees present may adjourn the
meeting from time to time without further notice, and provided further that
if, pursuant to the Declaration of Trust or these Bylaws, the vote of a
majority of a particular group of Trustees is required for action, a quorum
must also include a majority of such group.
The Trustees present at a meeting which has been duly called and
convened may continue to transact business until adjournment,
notwithstanding the withdrawal of enough Trustees to leave less than a
quorum.
Section 6. VOTING. (a) Except as provided in subsections (b) and
(c) of this Section 6, the action of the majority of the Trustees present
at a meeting at which a quorum is present shall be the action of the
Trustees, unless the concurrence of a greater proportion is required for
such action by applicable statute or Declaration of Trust.
(b) Notwithstanding anything in these Bylaws to the contrary,
any action pertaining to any transaction involving the Trust, including the
purchase, sale, lease or mortgage of any real estate asset or any other
transaction, in which a Trustee or officer of the Trust, or any Affiliate
(as defined in the Declaration of Trust of the Trust) of any of the
foregoing persons, has any direct or indirect interest other than solely as
a result of his status as a Trustee, officer, or shareholder of the Trust,
must be approved by a majority of disinterested Trustees.
(c) Notwithstanding the general power of the Board of Trustees
to manage the business and affairs of the Trust and anything else in these
Bylaws to the contrary, the Board of Trustees shall not take any action and
shall not permit the Trust to take any action of any nature with respect to
any of the matters described in (i) through (vii) below without the
approval of a majority of the Continuing Trustees (as defined below);
(i) Making any determination to be made with respect to, or
waiver or amendment of any term or condition of, the Agreement and
Plan of Merger, dated as of October 1, 1998 (the "Merger Agreement"),
between Apartment Investment and Management Company, a Maryland
corporation ("AIMCO"), and the Trust;
(ii) Taking any action on the part of the Trust with respect
to matters contemplated in Section 8.1(c)(ii) of the Merger Agreement;
(iii) Directing the enforcement of any employment
agreements, consulting agreements, retention agreements or any
restricted share agreements with employees of or consultants to the
Trust, provided the agreements are in existence on October 1, 1998.
(iv) Approving any amendment to or waiver with respect to
the Fourth Amended and Restated Agreement of Limited Partnership of
Insignia Properties, L.P., a Delaware limited partnership, as the same
may be amended from time to time;
(v) Approving any amendment to the Declaration of Trust of
the Trust or these Bylaws (except for Article XIII, Section 2 which
may be amended without approval of a majority of the continuing
Trustees);
(vi) Making any loans or advances of monies to be made by
the Trust or any of its subsidiaries to AIMCO or any of its
subsidiaries; and
(vii) Declaring dividends on any shares of beneficial
ownership of the Trust.
The Continuing Trustees shall be empowered to direct the grant of up 10,000
restricted IPT shares under the Trust's 1997 Incentive Share Plan ("the
Plan"), subject to the approval of the Compensation Committee to the extent
required by the Plan, or to direct the payment of up to $132,500 cash
compensation (any such awards of cash compensation hereunder will reduce
pro rata the number of IPT shares that the Continuing Trustees may grant).
The Continuing Trustees shall be entitled to retain, at the Trust's
expense, their own legal, financial and other advisors as they deem
appropriate. The Continuing Trustees shall be entitled to direct the Trust
to make payment and to write and sign checks on behalf of the Trust, to
make payment to such legal, financial and other advisors and with respect
to other amounts payable by the Trust in connection with the matters
described in items (i) through (vii) above. A special account of the Trust
at a financial institution acceptable to the Continuing Trustees shall be
made available to them and funded in such amounts as they request for that
purpose. The Continuing Trustees may act by majority, with or without a
meeting. The Continuing Trustees shall have the power to initiate action
with respect to those matters as to which a right of approval is reserved
to them under this section. Notwithstanding any other provisions of these
Bylaws, any rights of approval over actions of the Trust and any powers
granted to the Continuing Trustees under these Bylaws shall terminate
January 1, 2002 or, if earlier, on the date the Merger Agreement is
terminated pursuant to Section 8.1(c)(iii) thereof (the earlier of such
dates, the "Reshuffling Date").
Section 7. TELEPHONE MEETINGS. Trustees may participate in a
meeting by means of a conference telephone or similar communications
equipment if all persons participating in the meeting are able, at all
times, to hear one another. Participation in a meeting by these means
shall constitute presence in person at the meeting.
Section 8. INFORMAL ACTION BY TRUSTEES. Any action required or
permitted to be taken at any meeting of the Trustees may be taken without a
meeting, if a consent in writing to such action is signed by all Trustees
and such written consent is filed with the minutes of proceedings of the
Trustees.
Section 9. VACANCIES. If for any reason any or all the Trustees
cease to be Trustees, such event shall not terminate the Trust or affect
these Bylaws or the powers of the remaining trustees hereunder (even if
fewer than two Trustees remain). Any vacancy (including a vacancy created
by removal of a Trustee or by an increase in the number of Trustees) may be
filled, at any regular meeting or at any special meeting called for that
purpose, by the remaining Trustees in accordance with Section 2.3 of the
Declaration of Trust. Any individual so elected as Trustee shall hold
office for the unexpired term of the class of Trustees to which he or she
is elected. In the event that, at any time, a Continuing Trustee ceases to
be a Trustee for any reason (including removal for cause), the vacancy
created thereby shall be filled in accordance with the Declaration of Trust
but only with an individual nominated and approved by a majority of the
remaining Continuing Trustees. In the event that an AIMCO-nominated
Trustee (as defined below) shall cease to be a Trustee for any reason
(including removal for cause), except one whose seat is vacated by
acceptance of his or her resignation as contemplated by Section 18 of this
Article III, the vacancy created thereby shall be filed in accordance with
the Declaration of Trust but only with an individual nominated and approved
by the remaining AIMCO-nominated Trustees. A person shall be eligible for
service as an AIMCO-nominated Trustee only if he or she has delivered to
the Trust, in form and substance satisfactory to a majority of the
Continuing Trustees, a signed and undated resignation as Trustee which will
according to its terms be effective without further action by the Trust or
such person when accepted by the Continuing Trustees in accordance with
Section 18 of this Article III.
Section 10. COMPENSATION. Trustees shall not receive any stated
salary for their services as Trustees but, by resolution of the Trustees,
may receive a fixed sum of cash and/or common shares of beneficial interest
of the Trust (or options to acquire shares) per year and/or per visit to
real property owned or to be acquired by the Trust and for any service or
activity they performed or engaged in as Trustees. Trustees may be
reimbursed for expenses of attendance, if any, at each annual, regular or
special meeting of the Trustees or of any committee thereof; and for their
expenses, if any, in connection with each property visit and any other
service or activity performed or engaged in as Trustees; but nothing herein
contained shall be construed to preclude any Trustees from serving the
Trust in any other capacity and receiving compensation therefor.
Section 11. REMOVAL OF TRUSTEES. The shareholders may, at any
time, remove any Trustee in the manner provided in the Declaration of
Trust.
Section 12. LOSS OF DEPOSITS. No Trustee shall be liable for any
loss which may occur by reason of the failure of the bank, trust company,
savings and loan association, or other institution with whom moneys or
shares have been deposited.
Section 13. SURETY BONDS. Unless required by law, no Trustee shall
be obligated to give any bond or surety or other security for the
performance of any of his duties.
Section 14. RELIANCE. Each Trustee, officer, employee and agent of
the Trust shall, in the performance of his or her duties with respect to
the Trust, be fully justified and protected with regard to any act or
failure to act in reliance in good faith upon the books of account or other
records of the Trust, upon an opinion of counsel or upon reports made to
the Trust by any of its officers or employees or by the adviser,
accountants, appraisers or other experts or consultants selected by the
Trustees or officers of the Trust, regardless of whether such counsel or
expert may also be a Trustee.
Section 15. NUMBER AND QUALIFICATIONS. The number of Trustees of
the Trust shall be 11. The Trustees shall be classified, with respect to
the terms for which they severally hold office, into separate classes, if
and in the manner prescribed in the Trust's Declaration of Trust. In the
event that the Board of Trustees amends these Bylaws to decrease the number
of Trustees, the tenure of office of a Trustee shall not be affected by any
decrease in the number of Trustees. Trustees need not be shareholders of
the Trust.
Section 16. INTERESTED TRUSTEE TRANSACTIONS. Section 2-419 of the
Maryland General Corporation Law (the "MGCL") shall be available for and
apply to any contract or other transaction between the Trust and any of its
Trustees or between the Trust and any other trust, corporation, firm or
other entity in which any of its Trustees is a trustee or director or has a
material financial interest.
Section 17. TRUSTEE DESIGNATIONS. "Continuing Trustee" means a
Trustee who is a member of the Board of Trustees on October 1, 1998, when
the Board of Trustees acted to approve this amendment and restatement of
these Bylaws, or whose election to the Board of Trustees is approved by a
majority of the other Continuing Trustees. "AIMCO-nominated Trustee" means
a Trustee elected to the Board of Trustees on October 1, 1998, at the
request of AIMCO upon the increase in the size of the Board of Trustees on
that date, or whose election to the Board of Trustees is approved by a
majority of the other AIMCO-nominated Trustees.
Section 18. AGREED RESIGNATIONS. On and after the Reshuffling
Date, the continuing Trustees shall be entitled, acting by a majority, to
accept sufficient number of the resignations theretofore submitted by the
AIMCO-nominated Trustees in accordance with the last sentence of Section 9
of this Article III, and to fill the vacancies created thereby with their
own nominees, in order that the Continuing Trustees shall thereafter
constitute a majority of the Board of Trustees. After the second annual
meeting of shareholders of the Trust occurring after the Reshuffling Date,
that privilege shall terminate. Thereafter, the continuing Trustees shall
be entitled to approve and nominate individuals to stand for election to
the Board of Trustees to occupy seats previously held by Continuing
Trustees and to occupy one less than a majority of the Board of Trustees,
but such nominees must be reasonably acceptable to the Trust, it being
understood that any Continuing Trustee choosing to continue to serve as a
Trustee shall be acceptable.
ARTICLE IV
COMMITTEES
Section 1. NUMBER, TENURE AND QUALIFICATIONS; VACANCIES. The
Board of Trustees may appoint from among its members an Executive Committee
and other committees comprised of two or more Trustees.
Notice of committee meetings shall be given in the same manner as
notice for special meetings of the Board of Trustees.
Subject to the provisions hereof, the Board of Trustees shall have
the power at any time to change the membership of any committee, to fill
all vacancies, to designate alternative members to replace any absent or
disqualified member, or to dissolve any such committee.
Section 2. POWERS. The Trustees may delegate to committees
appointed under Section 1 of this Article any of the powers of the
Trustees, except as prohibited by law.
Section 3. MEETINGS. One-Third, but not less than two, of the
members of any committee shall be present in person at any meeting of such
committee in order to constitute a quorum for the transaction of business
at such meeting, and the act of a majority present shall be the act of such
committee.
Each committee shall keep minutes of its proceedings and shall report
the same to the Board of Trustees at the meeting next succeeding, and any
action by the committees shall be subject to revision and alteration by the
Board of Trustees, provided that no rights of third persons shall be
affected by any such revision or alteration.
Section 4. TELEPHONE MEETINGS. Members of a committee of the
Trustees may participate in a meeting by means of a conference telephone or
similar communications equipments if all persons participating in the
meeting are able, at all times, to hear one another. Participation in a
meeting by these means shall constitute presence in person at the meeting.
Section 5. INFORMAL ACTION BY COMMITTEES. Any action required or
permitted to be taken at any meeting of a committee of the Trustees may be
taken without a meeting, if a consent in writing to such action is signed
by all members of the committee and such written consent is filed with the
minutes of proceedings of such committee.
Section 6. STANDING COMMITTEES.
(a) Executive Committee. Until January 1, 2002, the Board of
Trustees shall appoint and maintain an Executive Committee comprising the
Trustees designated in the Merger Agreement, each of whose successors on
the Executive Committee shall be appointed only with the approval of a
majority of the AIMCO-nominated Trustees. Subject to the limitations set
forth in Section 2.8 of the Declaration of Trust, the Executive Committee
shall be authorized to act with respect to all matters relating to the
general management of the Trust except for such matters as are specifically
referred to other committees under these Bylaws.
(b) AIMCO Committee. Until January 1, 2002, the Board of
Trustees shall appoint and maintain an AIMCO Committee comprising the
AIMCO-nominated Trustees. The AIMCO Committee shall be authorized and
empowered to act on behalf of the Board of Trustees with respect to all
matters and all actions required or desired to be taken by the Trust
related to (i) all transactions between the Trust or its subsidiaries and
AIMCO or its subsidiaries other than those described in items (i), (ii) and
(vi) of Article III, Section 6 of these Bylaws, (ii) any offer by AIMCO or
its affiliates to purchase limited partnership interest in limited
partnerships that are controlled by or affiliated with the Trust or
controlled by Winthrop Financial Associates and (iii) any public
announcement or filing with a governmental authority.
ARTICLE V
OFFICERS
Section 1. GENERAL PROVISIONS. The officers of the Trust may
consist of a Chairman of the Board, one or more Chief Operating Officers, a
President, one or more Vice Presidents, a Treasurer, one or more Assistant
Treasurers, a Secretary, and one or more Assistant Secretaries. In
addition, the Trustees may from time to time appoint such other officers
with such powers and duties as they shall deem necessary or desirable. The
officers of the Trust shall be elected annually by the Trustees at the
first meeting of the Trustees held after each annual meeting of
shareholders. If the election of officers shall not be held at such
meeting, such election shall be held as soon thereafter as may be
convenient. Each officer shall hold office until his or her successor is
elected and qualified or until his or her death, resignation or removal in
the manner hereinafter provided. Any two or more offices (except President
and Vice President or President and Secretary) may be held by the same
person. In their discretion, the Trustees may leave unfilled any office
except that of President and Secretary. Election of an officer or agent
shall not of itself create contract rights between the Trust and such
officer or agent.
Section 2. REMOVAL AND RESIGNATION. Any officer or agent of the
Trust may be removed by the Trustees if in their judgment the best
interests of the Trust would be served thereby, but such removal shall be
without prejudice to the contract rights, if any, of the person so removed.
Any officer of the Trust may resign at any time by giving written notice of
his or her resignation to the Trustees, the Chairman of the Board, the
President or the Secretary. Any resignation shall take effect at any time
subsequent to the time specified therein or, if the time when it shall
become effective is not specified therein, immediately upon its receipt.
The acceptance of a resignation shall not be necessary to make it effective
unless otherwise stated in the resignation. Such resignation shall be
without prejudice to the contract rights, if any, of the Trust.
Section 3. VACANCIES. A vacancy in any office may be filled by
the Trustees for the balance of the term.
Section 4. CHIEF EXECUTIVE OFFICER. The Trustees may designate a
chief executive officer from among the elected officers. The Chief
Executive Officer shall have responsibility for implementation of the
policies of the trust, as determined by the Trustees, and for the
administration of the business affairs of the Trust. In the absence of
both the Chairman and the Vice Chairman of the Board, the Chief Executive
Officer shall preside over the meetings of the Trustees and of the
shareholders at which he or she shall be present.
Section 5. CHIEF OPERATING OFFICER. The Trustees may designate
one or more Chief Operating Officers from among the elected officers. Said
officer will have the responsibilities and duties as set forth by the
Trustees.
Section 6. CHIEF FINANCIAL OFFICER. The Trustees may designate a
Chief Financial Officer from among the elected Officers. Said Officer will
have the responsibilities and duties as set forth by the Trustees or the
Chief Executive Officer.
Section 7. CHAIRMAN AND VICE CHAIRMAN OF THE BOARD. The Chairman
of the Board shall preside over the meetings of the Trustees and of the
shareholders at which he or she shall be present and shall in general
oversee all of the business and affairs of the Trust. In the absence of
the Chairman of the Board, the Vice Chairman of the Board shall preside at
such meetings at which he shall be present. The Chairman and the Vice
Chairman of the Board may execute any deed, mortgage, bond, contract or
other instrument, except in cases where the execution thereof shall be
expressly delegate by the Trustees or by these Bylaws to some other officer
or agent of the Trust or shall be required by law to be otherwise executed.
The Chairman of the Board and the Vice Chairman of the Board shall perform
such other duties as may be assigned to him or her or them by the Trustees.
Section 8. PRESIDENT. In the absence of the Chairman, the Vice
Chairman of the Board and the Chief Executive Officer, the President shall
preside over the meetings of the Trustees and of the shareholders at which
he or she shall be present. In the absence of a designation of a Chief
Executive Officer by the Trustees, the President shall be the Chief
Executive Officer and shall be ex officio a member of all committees that
may, from time to time, be constituted by the Trustees. The President may
execute any deed, mortgage, bond, contract or other instrument, except in
cases where the execution thereof shall be expressly delegated by the
Trustees or by these Bylaws to some other officer or agent of the Trust or
shall be required by law to be otherwise executed; and in general shall
perform all duties incident to the office of president and such other
duties as may be prescribed by the Trustees from time to time.
Section 9. VICE PRESIDENTS. In the absence of the President or in
the event of a vacancy in such office, the Vice President (or in the event
there be more than one Vice President, the Vice Presidents in the order
designated at the time of their election or, in the absence of any
designation, then in the order of their election) shall perform the duties
of the President and when so acting shall have all the powers of and be
subject to all the restrictions upon the President; and shall perform such
other duties as from time to time may be assigned to him by the President
or by the Trustees. The Trustees may designate one or more Vice Presidents
as Executive Vice President or as Vice President for particular areas of
responsibility.
Section 10. SECRETARY. The Secretary shall (a) keep the minutes of
the proceeding of the shareholders, the Trustees and the committees of the
Trustees in one or more books provided for that purpose; (b) see that all
notices are duly given in accordance with the provisions of these Bylaws or
as required by law; (c) be custodian of the trust records and of the seal
of the Trust; (d) keep a register of the post office address of each
shareholder which shall be furnished to the secretary by such shareholder;
(e) have general charge of the share transfer books of the Trust; and (f)
in general perform such other duties as from time to time may be assigned
to him or her by the Chief Executive Officer, the President or by the
Trustees.
Section 11. TREASURER. The Treasurer shall have the custody of the
funds and securities of the Trust and shall keep full and accurate accounts
of receipts and disbursements in books belonging to the Trust and shall
deposit all moneys and other valuable effects in the name and to the credit
of the Trust in such depositories as may be designated by the Trustees.
The Treasurer shall disburse the funds of the Trust as may be ordered
by the Trustees, taking proper vouchers for such disbursements, and shall
render to the president and Trustees, at the regular meetings of the
Trustees or whenever they may require it, an account of all his or her
transactions as Treasurer and of the financial condition of the Trust.
If required by the Trustees, the Treasurer shall give the Trust a
bond in such sum and with such surety or sureties as shall be satisfactory
to the Trustees for the faithful performance of the duties of the Treasurer's
office and for the restoration to the Trust, in case of his or her death,
resignation, retirement or removal from office, of all books, papers,
vouchers, moneys and other property of whatever kind in his or her
possession or under his or her control belonging to the Trust.
Section 12. ASSISTANT SECRETARIES AND ASSISTANT TREASURERS. The
Assistant Secretaries and Assistant Treasurers, in general, shall perform
such duties as shall be assigned to them by the Secretary or Treasurer,
respectively, or by the president or the Trustees. The Assistant
Treasurers shall, if required by the Trustees, give bonds for the faithful
performance of their duties in such sums and with such surety or sureties
as shall be satisfactory to the Trustees.
Section 13. SALARIES. The salaries of the officers shall be fixed
from time to time by the Trustees and no officer shall be prevented from
receiving such salary by reason of the fact that he is also a Trustee.
ARTICLE VI
CONTRACTS, LOANS, CHECKS AND DEPOSITS
Section 1. CONTRACTS. The Trustees may authorize any officer or
agent to enter into any contract or to execute and deliver any instrument
in the name of and on behalf of the Trust and such authority may be general
or confined to specific instances. Any agreement, deed, mortgage, lease or
other document executed by one or more of the Trustees or by an authorized
person shall be valid and binding upon the Trustees and upon the Trust when
authorized or ratified by action of the Trustees.
Section 2. CHECKS AND DRAFTS. All checks, drafts or other orders
for the payment of money, notes or other evidences of indebtedness issued
in the name of the Trust shall be signed by such officer or officers, agent
or agents of the Trust in such manner as shall from time to time be
determined by the Trustees.
Section 3. DEPOSITS. All funds of the Trust not otherwise
employed shall be deposited from time to time to the credit of the Trust in
such banks, trust companies or other depositories as the Trustees may
designate.
ARTICLE VII
SHARES
Section 1. CERTIFICATES. Each shareholder shall be entitled to a
certificate or certificates which shall represent and certify the number of
shares of each class of beneficial interests held by him or her in the
Trust. Each certificate shall be signed by the Chief Executive Officer,
the President or a Vice President and countersigned by the Secretary or an
Assistant Secretary or the Treasurer or an Assistant Treasurer and may be
sealed with the seal, if any, of the Trust. The signatures may be either
manual or facsimile. Certificates shall be consecutively numbered; and if
the Trust shall, from time to time, issue several classes of shares, each
class may have its own number series. A certificate is valid and may be
issued whether or not an officer who signed it is still an officer when it
is issued. Each certificate representing shares which are restricted as to
their transferability or voting powers, which are preferred or limited as
to their dividends or as to their allocable portion of the assets upon
liquidation or which are redeemable at the option of the Trust, shall have
a statement of such restriction, limitation, preference or redemption
provision, or a summary thereof, plainly stated on the certificate. In
lieu of such statement or summary, the Trust may set forth upon the face or
back of the certificate a statement that the Trust will furnish to any
shareholder, upon request and without charge, a full statement of such
information.
Section 2. TRANSFERS. Certificates shall be treated as
negotiable, and title thereto and to the shares they represent shall be
transferred by delivery thereof to the same extent as those of a Maryland
stock corporation. No transfers of shares of the Trust shall be made if
(i) void ab initio pursuant to any provision of the Declaration of Trust or
(ii) the Board of Trustees, pursuant to any provision of the Declaration of
Trust, shall have refused to permit the transfer of such shares. Permitted
transfers of shares of the Trust shall be made on the share records of the
Trust only upon the instruction of the registered holder thereof, or by his
or her attorney thereunto authorized by power of attorney duly executed and
filed with the secretary or with a transfer agent or transfer clerk, and
upon surrender of the certificate or certificates, if issued, for such
shares properly endorsed or accompanied by a duly executed share transfer
power and the payment of all taxes thereon. Upon surrender to the Trust or
the transfer agent of the Trust of a certificate for shares duly endorsed
or accompanied by proper evidence of succession, assignment or authority to
transfer, as to any transfers not prohibited by any provision of the
Declaration of Trust or by action of the Board of Trustees thereunder, it
shall be the duty of the Trust to issue a new certificate to the person
entitled thereto, cancel the old certificate and record the transaction
upon its books.
Section 3. REPLACEMENT CERTIFICATE. Any officer designated by the
Trustees may direct a new certificate to be issued in place of any
certificate previously issued by the Trust alleged to have been lost,
stolen or destroyed upon the making of an affidavit of that fact by the
person claiming the certificate to be lost, stolen or destroyed. When
authorizing the issuance of a new certificate, the officer designated by
the Trustees may, in his or her discretion and as a condition precedent to
the issuance thereof, require the owner of such lost, stolen or destroyed
certificate or the owner's legal representative to advertise the same in
such manner as he or she shall require and/or to give bond, with sufficient
surety, to the Trust to indemnify it against any loss or claim which may
arise as a result of the issuance of a new certificate.
Section 4. CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE.
The Trustees may set, in advance, a record date for the purpose of
determining shareholders entitled to notice of or to vote at any meeting of
shareholders or determining shareholders entitled to receive payment of any
dividend or the allotment of any other rights, or in order to make a
determination of shareholders for any other purpose. Such date, in any
case, shall not be prior to the close of business on the day the record
date is fixed and shall be not more than 90 days and, in the case of a
meeting of shareholders not less than ten days, before the date on which
the meeting or particular action requiring such determination of
shareholders of record is to be held to taken.
In lieu of fixing a record date, the Trustees may provide that the
share transfer books shall be closed for a stated period by not longer than
20 days. If the share transfer books are closed for the purpose of
determining shareholders entitled to notice of or to vote at a meeting of
shareholders, such books shall be closed for at least ten days before the
date of such meeting.
If no record date is fixed and the share transfer books are not
closed for the determination of shareholders, (a) the record date for the
determination of shareholders entitled to notice of or to vote at a meeting
of shareholders shall be at the close of business on the day on which the
notice of meeting is mailed or the 30th day before the meeting, whichever
is the closer date to the meetings; and (b) the record date for the
determination of shareholders entitled to receive payment of a dividend or
an allotment of any other rights shall be the close of business on the day
on which the resolution of the Trustees, declaring the dividend or
allotment of rights, is adopted.
When a determination of shareholders entitled to vote at any meeting
of shareholders has been made as provided in this section, such
determination shall apply to any adjournment thereof, except when (i) the
determination has been made through the closing of the transfer books and
the stated period of closing has expired or (ii) the meeting is adjourned
to a date more than 120 days after the record date fixed for the original
meeting, in either of which case a new record date shall be determined as
set forth herein.
Section 5. STOCKLEDGER. The Trust shall maintain at its principal
office or at the office of its counsel, accountants or transfer agent, an
original or duplicate share ledger containing the name and address of each
shareholder and the number of shares of each class held by such
shareholder.
Section 6. FRACTIONAL SHARES; ISSUANCE OF UNITS. The Trustees may
issue fractional shares or provide for the issuance of scrip, all on such
terms and under such conditions as they may determine. Notwithstanding any
other provision of the Declaration of Trust or these Bylaws, the Trustees
may issue units consisting of different securities of the Trust. Any
security issued in a unit shall have the same characteristics as any
identical securities issued by the Trust, except that the Trustees may
provide that for a specified period securities of the Trust issued in such
unit may be transferred on the books of the Trust only in such unit.
ARTICLE VIII
DISTRIBUTIONS
Section 1. AUTHORIZATION. Dividends and other distributions upon
the shares of the Trust may be authorized and declared by the Trustees,
subject to the provisions of law and the Declaration of Trust. Dividends
may be paid in cash, property or shares of the Trust, subject to the
provisions of law and the Declaration of Trust.
Section 2. CONTINGENCIES. Before payment of any dividends, there
may be set aside out of any funds of the Trust available for dividends such
sum or sums as the Trustees may from time to time, in their absolute
discretion, think proper as a reserve fund for contingencies, for
equalizing dividends, for repairing or maintaining any property of the
Trust or for such other purpose as the Trustees shall determine to be in
the best interest of the Trust, and the Trustees may modify or abolish any
such reserve in the manner in which it was created.
ARTICLE IX
SEAL
Section 1. SEAL. The Trustees may authorize the adoption of a
seal by the Trust. The seal shall have inscribed thereon the name of the
Trust and the year of its formation. The Trustees may authorize one or
more duplicate seals and provide for the custody thereof.
Section 2. AFFIXING SEAL. Whenever the Trust is required to place
its seal to a document, it shall be sufficient to meet the requirements of
any law, rule or regulation relating to a seal to place the word "(SEAL)"
adjacent to the signature of the person authorized to execute the document
on behalf of the Trust.
ARTICLE X
INDEMNIFICATION AND ADVANCE FOR EXPENSES
(a) Any person who was or is a party or is threatened to be made
a party to any threatened, pending, or completed action, suit, or
proceeding, whether civil, criminal, administrative, or investigative
(whether or not by or in the right of the Trust), by reason of the fact
that he or she is or was a Trustee, officer, incorporator, employee,
partner, trustee, member or agent of another corporation, partnership,
joint venture, trust, or other enterprise (including an employee benefit
plan), shall be entitled to be indemnified by the Trust to the fullest
extent then permitted by Maryland law against expenses (including
attorney's fees and disbursements), judgments, fines (including excise
taxes assessed on a person with respect to an employee benefit plan), and
amount paid in settlement incurred by him or her in connection with such
action, suit or proceeding. Neither the amendment nor repeal of this
Article X, nor the adoption or amendment of any other provision of these
Bylaws or the Declaration of Trust inconsistent with this Article X, shall
apply to or affect in any respect the applicability of the indemnification
provided for herein with respect to any act or failure to act which
occurred prior to such amendment, repeal or adoption. Such right of
indemnification shall continue as to a person who has ceased to be a
Trustee, director, officer, incorporator, employee, partner, trustee,
member or agent, and shall inure to the benefit of the heirs, executors,
and administrators of such a person. The indemnification provide by this
Article X shall not be deemed exclusive of any other rights which may be
provided now or in the future under any provision currently in effect or
hereafter adopted in these Bylaws, the Declaration of Trust, by any
agreement, by vote of Shareholders, by resolution of disinterested
Trustees, by provision of law, or otherwise. The Board of Trustees may
take such actions as it may from time to time deem necessary or appropriate
to carry out these indemnification provisions, and is expressly empowered
to adopt, approve and amend from time to time such bylaws, resolutions or
contracts implementing such provisions or such further indemnification
arrangements as may be permitted by laws. Notwithstanding the foregoing,
the Trust shall be required to indemnify a person in connection with a
proceeding initiated by such person only if such proceeding was authorized
by the Board of Trustees.
(b) The Trust shall advance any person who is eligible for
reasonable expenses incurred by such person who is a party to a proceeding
prior to the final disposition of the proceeding upon receipt by the Trust
of (i) a written affirmation by such person of such person's good faith
belief that the standard of conduct necessary for indemnification by the
Trust as authorized in this Article X has been met and (ii) a written
undertaking by or on behalf of such person to repay the amount if it shall
ultimately be determined that the standard of conduct has not been met.
ARTICLE XI
WAIVER OF NOTICE
Whenever any notice is required to be given pursuant to the
Declaration of Trust or Bylaws or pursuant to applicable law, a waiver
thereof in writing, signed by the person or persons entitled to such
notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice. Neither the business to be
transacted at nor the purpose of any meeting need be set forth in the
waiver of notice, unless specifically required by statute. The attendance
of any person at any meeting shall constitute a waiver of notice of such
meeting, except where such person attends a meeting for the express purpose
of objecting to the transaction of any business on the ground that the
meeting is not lawfully called or convened.
ARTICLE XII
AMENDMENT OF BYLAWS
The Trustees shall have the exclusive power to adopt, alter or repeal
any provision of these Bylaws and to make new Bylaws; provided, however,
that no amendment, alteration or repeal of any provision of these Bylaws
will be made, and no other Bylaws will be made or adopted, without the
approval of a majority of the Continuing Trustees (except for Article XIII,
Section 2 which may be amended without approval of a majority of the
Continuing Trustees); and provided further that any amendment to Article
III, Section 6(b) shall require the affirmative vote of at least a majority
of shareholders entitled to vote thereon.
ARTICLE XIII
MISCELLANEOUS
Section 1. DECLARATION OF TRUST. All references to the
Declaration of Trust shall include any amendments thereto.
Section 2. EXEMPTION FROM CONTROL SHARE ACQUISITION STATUTE. The
acquisition of shares of beneficial interest of the Trust by AIMCO
occurring as a result of the merger of Insignia Financial Group, Inc., a
Delaware corporation ("IFG"), with in and into AIMCO, pursuant to the
Amended and Restated Agreement and Plan of Merger, dated as of May 26,
1998, among IFG, AIMCO and the other parties named therein, shall be exempt
from the provisions of Title 3, Subtitle 7 of the MGCL.
Section 3. EXEMPTION FROM OWNERSHIP LIMIT. Pursuant to Section
6.12(b) of the Declaration of Trust, the Board of Trustees hereby does
exempt AIMCO from the Ownership Limit.
IRREVOCABLE LIMITED PROXY
The undersigned holder (the "Shareholder") of common shares of
beneficial interest, par value $.01 per share (the "Shares"), of Insignia
Properties Trust, a Maryland real estate investment trust ("IPT"), hereby
irrevocably appoints and constitutes each of Andrew L. Farkas, James A.
Aston and Frank M. Garrison who are duly authorized representatives of IPT
and each of them (the "Proxyholders"), the agents and proxies of the
undersigned, with full power of substitution and resubstitution, as set
forth below with respect to the Shares, and any and all other shares or
securities issued or issuable in respect thereof on or after the date
hereof and prior to the date this proxy terminates.
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 shareholders of IPT (the "IPT Meeting")
and in every written consent in lieu of such a meeting, or otherwise in
favor of approval of the Merger (as defined in the Agreement and Plan of
Merger, dated as of October 1, 1998 (the "Merger Agreement") between IPT
and Apartment Investment and Management Company), and any matter that could
reasonably be expected to facilitate the Merger. The Proxyholders may not
exercise this proxy on any other matter. The Shareholder may vote the
Shares and other shares on all such other matters.
The proxy granted by the Shareholder to the Proxyholders hereby is
granted as of the date of this Proxy pursuant to Section 6.5 of the Merger
Agreement and is irrevocable and coupled with an interest in IPT held by
the Shareholder.
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 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.
Notwithstanding any provision of this proxy to the contrary, the
Shares and any other shares, securities, cash or other property issued or
issuable or distributed or distributable with respect thereto are and shall
be the property of the Shareholder, and the Proxyholders shall have no
ownership interest therein.
Any obligation of the undersigned hereunder shall be binding upon
the successors and assigns of the undersigned. The Shareholder authorizes
the Proxyholders to file this proxy and any substitution or revocation of
substitution with the Secretary of IPT and with any Inspector of Elections
at any meeting of the shareholders of IPT.
This proxy is irrevocable and shall survive the insolvency,
dissolution or liquidation of the undersigned. This proxy shall terminate
on the earlier of (a) January 1, 2002 and (b) consummation of the Merger.
Dated: October __, 1998
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
By:____________________________
Name:
Title:
I, the undersigned, hereby agree to vote the Shares subject to this
Irrevocable Proxy in favor of the Merger at every IPT Meeting and in every
written consent in lieu of such a meeting, or otherwise.
Dated: October __, 1998
_______________________________
Andrew L. Farkas
_______________________________
James A. Aston
_______________________________
Frank M. Garrison
EXHIBIT 10.4
SHAREHOLDER'S AGREEMENT
This SHAREHOLDER'S AGREEMENT (this "Shareholder's Agreement"), dated
October 1, 1998, is made by and among Andrew L. Farkas, James A. Aston and
Frank M. Garrison (the "Shareholders") and APARTMENT INVESTMENT AND
MANAGEMENT COMPANY, a Maryland corporation ("AIMCO"). Each of the
Shareholders is a shareholder of Insignia Properties Trust, a Maryland real
estate investment trust ("IPT").
1. On the date hereof, AIMCO has acquired a majority of the issued
and outstanding shares of beneficial interest of IPT as a result of the
closing of the merger of Insignia Financial Group, a Delaware corporation
("IFG"), with and into AIMCO pursuant to the Amended and Restated Agreement
and Plan of Merger, dated as of May 28, 1998, among IFG, AIMCO and the
other parties named therein.
2. On the date hereof, IPT and AIMCO will enter into the Agreement
and Plan of Merger, dated as of October I, 1998 (the "Merger Agreement"),
between IPT and AIMCO and providing for the merger of IPT with and into
AIMCO on the terms and subject to the conditions set forth therein.
3. AIMCO is entering into this Shareholder's Agreement in order to
induce IPT to enter into the Merger Agreement.
4. AIMCO hereby agrees that, following a termination of the Merger
Agreement pursuant to Section 8.1(b), 8.1(c) (i) or 8.1(c) (iii) with
respect to every matter that is submitted to a vote of IPT shareholders at
an annual or special matter that is submitted to a vote of IPT shareholders
at an annual or special meeting of shareholders, AIMCO will attend such
meeting and vote, and will cause its affiliates (as that term is defined in
Rule 12b-2 under the Securities Exchange Act of 1934, as amended) to attend
such meeting and vote, all shares of beneficial interest of IPT held by it
or any of them as follows: For the first two annual meetings of IPT
following such a termination, in favor of designees of the Continuing
Trustees (as defined in IPT's bylaws) so that such designees constitute a
majority of the IPT Trustees, and thereafter in favor of designees of the
Continuing Trustees so that such designees constitute one less than a
majority of the IPT Trustees; provided, however, that any nominee of the
Continuing Trustees (other than a nominee of the Continuing Trustees
immediately after the execution of the Merger Agreement) must be reasonably
satisfactory to AIMCO.
5. This Shareholder's Agreement shall remain in effect for as long
as AIMCO and any of its affiliates own more than 10% of the IPT shares
entitled to vote but shall terminate upon consummation of the Merger.
6. If for whatever reason any provision of this Shareholder's
Agreement is determined to be invalid or unenforceable, a suitable and
equitable provision shall be substituted therefor in order to carry out, so
far as may be valid and enforceable, the intent and purpose hereof. If
paragraph 4 hereof is determined to be invalid or unenforceable, AIMCO
agrees to provide to the Trustees of IPT who are either Trustees
immediately prior to the execution and delivery of the Merger Agreement or
whose election to the Board of Trustees is designated by such Trustees or
their successors (i.e., Trustees that are not AIMCO-nominated Trustees) its
proxy to vote its IPT shares. The proxy shall be in form and substance
satisfactory to such Trustees, shall have a term of not less than 10 years
and shall, being coupled with an interest, state that it is irrevocable.
7. AIMCO is entering into this Shareholder's Agreement for the
benefit of the Shareholders, IPT and for the benefit of all shareholders of
IPT other than AIMCO and its affiliates.
8. (a) This Shareholder's Agreement shall be governed by and
construed in accordance with the laws of the State of Maryland, without
giving effect to its conflicts of laws provisions.
(b) This Shareholder's Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(c) This Shareholder's Agreement may not be amended or modified
except in writing between the parties hereto.
IN WITNESS WHEREOF, the parties have executed this Shareholder's
Agreement as of the day and year first above written.
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
By: /s/ Patrick Foye (SEAL)
_________________________________
Name: Patrick Foye
Title: Executive Vice President
/s/ Andrew L. Farkas
_________________________________
Andrew L. Farkas
/s/ James A. Aston
_________________________________
James A. Aston
/s/ Frank M. Garrison
_________________________________
Frank M. Garrison
EXHIBIT 10.5
AGREEMENT OF JOINT FILING
AIMCO Properties, L.P., AIMCO-GP, Inc. and Apartment Investment
and Management Company agree that the Statement on Schedule 13D to which
this Agreement is attached as an exhibit, and all future amendments to this
Statement, shall be filed on behalf of each of them. This Agreement is
intended to satisfy Rule 13d-1(f) under the Securities Exchange Act of
1934, as amended. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Dated: October 15, 1998.
AIMCO PROPERTIES, L.P.
By: AIMCO-GP, Inc.,
its General Partner
By: /s/ Patrick J. Foye
____________________________
Name: Patrick J. Foye
Title: Executive Vice President
AIMCO-GP, INC.
By: /s/ Patrick J. Foye
____________________________
Name: Patrick J. Foye
Title: Executive Vice President
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
By: /s/ Patrick J. Foye
____________________________
Name: Patrick J. Foye
Title: Executive Vice President
