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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K/A Amendment No. 1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) December 21, 1998
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APARTMENT INVESTMENT AND MANAGEMENT COMPANY
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(Exact name of registrant as specified in its charter)
MARYLAND 1-13232 84-1259577
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(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
1873 SOUTH BELLAIRE STREET, SUITE 1700, DENVER, CO 80222-4348
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (303) 757-8101
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NOT APPLICABLE
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(Former Name or Former Address, if Changed Since Last Report)
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Item 5. OTHER EVENTS
On November 3, 1998, AIMCO Properties, L.P., a Delaware limited
partnership ("AIMCO Properties"), a subsidiary limited partnership of Apartment
Investment and Management Company, a Maryland corporation ("AIMCO") (AIMCO and
AIMCO Properties together with their subsidiaries, collectively the "Company"),
entered into an Acquisition and Contribution Agreement and Joint Escrow
Instructions with Calhoun Beach Associates II Limited Partnership, an unrelated
third party, to acquire the Calhoun Beach Club Apartments, a 351-unit, high-rise
apartment community with approximately 83,000 square feet of commercial space
located in Minneapolis, Minnesota (the "Property"). This transaction closed on
December 30, 1998. The purchase price by the Company was approximately $77.1
million, consisting of the assumption of $43.5 million in mortgage indebtedness
and $10 million in unsecured indebtedness, with the remaining $23.625 million to
be paid $6.0 million in cash, and $17.625 million in limited partnership units
("OP Units") of AIMCO Properties, of which $8.625 million are common OP Units
priced at $41 per share, and $9.0 million are 8% preferred OP Units. Of the
total OP Units to be issued, approximately $4.5 million in common OP Units will
be issued upon the achievement of certain occupancy levels. In connection with
the issuance of the preferred OP Units, the Second Amendment to the Third
Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P.
was executed. An additional $1 million has been budgeted as initial capital
expenditures for the Property.
The Property consists of two main buildings. The phase one building,
which contains 76 units and approximately 67,000 square feet of commercial
space, was designed in 1928, and the phase two building, which contains 275
units, approximately 16,000 square feet of commercial space and 750
climate-controlled indoor parking spaces, was completed in November 1998.
AIMCO and AIMCO Properties, in assessing this transaction, considered a
number of factors related to revenue, including, but not limited to: i) the
advantageous lakefront location of the Property with views of Lake Calhoun and
downtown Minneapolis; ii) the high occupancy rate of approximately ninety-six
percent for the units and the commercial space in the phase one building; iii)
the geographic area's low market vacancy rate of less than two percent in
comparable high-end high-rise facilities; iv) the anticipated additional unit
and commercial space rental amounts, as well as parking fees from tenants and
commercial space customers, to be generated on the Property by the recently
completed phase two building; and v) the comparative attractiveness of this
Property to other properties in the area based upon such factors as location,
access to health club facilities in the phase one building and additional luxury
amenities included in the phase two building. AIMCO and AIMCO Properties, in
assessing this transaction, also considered a number of factors related to
expenses, including, but not limited to: i) the condition of the phase one
building and the budgeting of an additional $1 million of initial capital
expenditures to upgrade the existing building interior and exterior; ii) the
property tax increase expected to begin in the year 2000, based upon the
addition of the phase two building; iii) anticipated increases in expenses at
the Property such as utility and maintenance expenses related to the addition of
the phase two building, tempered by such factors as its new condition and
utility submetering in the building units; and iv) the anticipation that no
significant additional capital maintenance expense will be required for the new
phase two building in the near term. Additional general analysis of the
Property including neighborhood review, renter profiles, comparative rental
surveys, and general market background were done. The phase two building is a
significant addition to the Property.
After reasonable inquiry, AIMCO and AIMCO Properties are not aware of
any material factors relating to the Property, other than those discussed above,
that would cause the reported financial information for the Property not to be
necessarily indicative of future operating results.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Businesses Acquired
Historical Summary of Gross Income and Direct Operating Expenses of
Calhoun Beach Club Apartments for the year ended December 31, 1997 and the nine
months ended September 30, 1998 (unaudited), together with the Independent
Auditors' Report (included as Exhibit 99.1 to this Report and incorporated
herein by this reference).
(b) Pro Forma Financial Information
The required pro forma financial information is included as Exhibit
99.2 to this Report and incorporated herein by this reference.
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(b) Exhibits
The following exhibits are filed with this report:
<TABLE>
<CAPTION>
Exhibit
Number Description
- -------- -----------
<S> <C>
10.1 Second Amendment to the Third Amended and Restated Agreement of
Limited Partnership of AIMCO Properties, L.P.
*23.1 Consent of Ernst & Young LLP
*99.1 Historical Summary of Gross Income and Direct Operating Expenses of
Calhoun Beach Club Apartments for the year ended December 31, 1997
and the nine months ended September 30, 1998 (unaudited), together
with the Independent Auditors' Report.
*99.2 Pro Forma Financial Information of Apartment Investment and
Management Company.
</TABLE>
* Previously filed
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
Date: February 11, 1999 By: /s/ Troy Butts
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Troy Butts
Senior Vice President,
Chief Financial Officer
5
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
- -------- -----------
<S> <C>
10.1 Second Amendment to the Third Amended and Restated Agreement of
Limited Partnership of AIMCO Properties, L.P.
*23.1 Consent of Ernst & Young LLP
*99.1 Historical Summary of Gross Income and Direct Operating Expenses of
Calhoun Beach Club Apartments for the year ended December 31, 1997
and the nine months ended September 30, 1998 (unaudited), together with
the Independent Auditors' Report.
*99.2 Pro Forma Financial Information of Apartment Investment and Management
Company.
</TABLE>
*Previously filed
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EXHIBIT 10.1
SECOND AMENDMENT TO THE THIRD
AMENDED AND RESTATED AGREEMENT OF
LIMITED PARTNERSHIP OF AIMCO PROPERTIES, L.P.
This SECOND AMENDMENT TO THE THIRD AMENDED AND RESTATED AGREEMENT OF
LIMITED PARTNERSHIP OF AIMCO PROPERTIES, L.P., dated as of December 30, 1998
(this "Amendment"), is being executed by AIMCO-GP, Inc., a Delaware corporation
(the "General Partner"), as the general partner of AIMCO Properties, L.P., a
Delaware limited partnership (the "Partnership"), pursuant to the authority
conferred on the General Partner by Section 7.3.C(7) of the Third Amended and
Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of
July 29, 1994, as amended and/or supplemented from time to time (the
"Agreement"). Capitalized terms used, but not otherwise defined herein, shall
have the respective meanings ascribed thereto in the Agreement.
WHEREAS, on November 3, 1998, the Partnership entered into an
Acquisition and Contribution Agreement and Joint Escrow Instructions, pursuant
to which it is to issue Common Preferred Units and Class One Partnership
Preferred Units.
WHEREAS, pursuant to Section 4.2.A of the Agreement, the General
Partner is authorized to determine the designations, preferences and relative,
participating, optional or other special rights, powers and duties of such
Partnership Preferred Units.
NOW, THEREFORE, in consideration of the foregoing, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. The Agreement is hereby amended by the addition of a new exhibit,
entitled "Exhibit O," in the form attached hereto, which shall be attached to
and made a part of the Agreement.
2. Except as specifically amended hereby, the terms, covenants,
provisions and conditions of the Agreement shall remain unmodified and continue
in full force and effect and, except as amended hereby, all of the terms,
covenants, provisions and conditions of the Agreement are hereby ratified and
confirmed in all respects.
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IN WITNESS WHEREOF, this Amendment has been executed as of the date
first written above.
GENERAL PARTNER:
AIMCO-GP, INC.
By: /s/ Peter Kompaniez
-------------------------------------
Name: Peter Kompaniez
Title: President and Vice Chairman
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EXHIBIT O
PARTNERSHIP UNIT DESIGNATION
OF THE
CLASS ONE PARTNERSHIP PREFERRED UNITS
OF
AIMCO PROPERTIES, L.P.
1. NUMBER OF UNITS AND DESIGNATION.
A class of Partnership Preferred Units is hereby designated as "Class
One Partnership Preferred Units," and the number of Partnership Preferred Units
constituting such class shall be Ninety Thousand (90,000).
2. DEFINITIONS.
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned thereto in the Third Amended and Restated Agreement of Limited
Partnership of AIMCO Properties, L.P. as amended, supplemented or restated from
time to time (the "Agreement"), as modified by this Partnership Unit Designation
and the defined terms used herein. For purposes of this Partnership Unit
Designation, the following terms shall have the respective meanings ascribed
below:
"Assignee" shall mean a Person to whom one or more Preferred Units have
been Transferred in a manner permitted under the Agreement, but who has not
become a Substituted Limited Partner, and who has the rights set forth in
Section 11.5 of the Agreement.
"Cash Amount" shall mean, with respect to any Tendered Units, cash in
an amount equal to the product of (i) the number of Tendered Units, multiplied
by (ii) the quotient obtained by dividing $8 by the lesser of (a) the Dividend
Yield on the Previous General Partner's Class D Cumulative Preferred Stock as of
the date of receipt by the General Partner of a Notice of Redemption for such
Tendered Units, or (b) the average of the Dividend Yields of the three preferred
stocks listed on Annex I hereof as of the date of receipt by the General Partner
of a Notice of Redemption for such Tendered Units.
"Class One Partnership Preferred Unit" or "Preferred Unit" shall mean a
Partnership Preferred Unit with the designations, preferences and relative,
participating, optional or other special rights, powers and duties as are set
forth in this Partnership Unit Designation.
"Cut-Off Date" shall mean the fifth (5th) Business Day after the
General Partner's receipt of a Notice of Redemption.
"Declination" shall have the meaning set forth in Section 6(f) of this
Partnership Unit Designation.
"Distribution Payment Date" shall have the meaning set forth of Section
3(a) of this Partnership Unit Designation.
"Dividend Yield" shall mean, as of any calculation date and with
respect to any class or series of capital stock, the quotient obtained by
dividing (i) the aggregate dollar amount of dividends payable on one share of
such class or series of capital stock, in accordance with its terms, for the 12
month period ending on the dividend payment date immediately preceding such
calculation date, by (ii) the
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Market Value of one share of such stock as of such calculation date.
"Junior Partnership Units" shall have the meaning set forth in Section
3(c) of this Partnership Unit Designation.
"Liquidation Preference" shall have the meaning set forth in Section
5(a) of this Partnership Unit Designation.
"Market Value" shall mean, as of any calculation date and with respect
to any share of stock, the average of the daily market prices for ten (10)
consecutive trading days immediately preceding the calculation date. The market
price for any such trading day shall be:
(i) if the shares are listed or admitted to trading on any
securities exchange or The Nasdaq Stock Market's National Market
System, the closing price, regular way, on such day, or if no such sale
takes place on such day, the average of the closing bid and asked
prices on such day, in either case as reported in the principal
consolidated transaction reporting system,
(ii) if the shares are not listed or admitted to trading on
any securities exchange or The Nasdaq Stock Market's National Market
System, the last reported sale price on such day or, if no sale takes
place on such day, the average of the closing bid and asked prices on
such day, as reported by a reliable quotation source designated by the
General Partner, or
(iii) if the shares are not listed or admitted to trading on
any securities exchange or The Nasdaq Stock Market's National Market
System and no such last reported sale price or closing bid and asked
prices are available, the average of the reported high bid and low
asked prices on such day, as reported by a reliable quotation source
designated by the General Partner, or if there shall be no bid and
asked prices on such day, the average of the high bid and low asked
prices, as so reported, on the most recent day (not more than ten (10)
days prior to the date in question) for which prices have been so
reported;
provided, however, that, if there are no bid and asked prices reported during
the ten (10) days prior to the date in question, the Market Value of the shares
shall be determined by the General Partner acting in good faith on the basis of
such quotations and other information as it considers, in its reasonable
judgment, appropriate; provided, further, that the General Partner is authorized
to adjust the market price for any trading day as may be necessary, in its
judgment, to reflect an event that occurs at any time after the commencement of
such ten day period that would unfairly distort the Market Value, including,
without limitation, a stock dividend, split, subdivision, reverse stock split,
or share combination.
"Notice of Redemption" shall mean a Notice of Redemption in the form of
Annex II to this Partnership Unit Designation.
"Parity Partnership Units" shall have the meaning set forth in Section
3(b) of this Partnership Unit Designation.
"Partnership" shall mean AIMCO Properties, L.P., a Delaware limited
partnership.
"Primary Offering Notice" shall have the meaning set forth in Section
6(h)(3) of this Partnership Unit Designation.
"Public Offering Funding" shall have the meaning set forth in Section
6(f)(2) of this
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Partnership Unit Designation.
"Redemption" shall have the meaning set forth in Section 6(b) of this
Partnership Unit Designation.
"Registrable Shares" shall have the meaning set forth in Section
6(f)(2) of this Partnership Unit Designation.
"REIT Shares Amount" shall mean, with respect to any Tendered Units, a
number of REIT Shares equal to the quotient obtained by dividing (i) the Cash
Amount for such Tendered Units, by (ii) the Market Value of a REIT Share as of
the fifth (5th) Business Day prior to the date of receipt by the General Partner
of a Notice of Redemption for such Tendered Units.
"Senior Partnership Units" shall have the meaning set forth in Section
3(a) of this Partnership Unit Designation.
"Single Funding Notice" shall have the meaning set forth in Section
6(f)(3) of this Partnership Unit Designation.
"Specified Redemption Date" shall mean, with respect to any Redemption,
the later of (a) the tenth (10th) Business Day after the receipt by the General
Partner of a Notice of Redemption or (b) in the case of a Declination followed
by a Public Offering Funding, the Business Day next following the date of the
closing of the Public Offering Funding; provided, however, that the Specified
Redemption Date, as well as the closing of a Redemption, or an acquisition of
Tendered Units by the Previous General Partner pursuant to Section 6 hereof, on
any Specified Redemption Date, may be deferred, in the General Partner's sole
and absolute discretion, for such time (but in any event not more than one
hundred fifty (150) days in the aggregate) as may reasonably be required to
effect, as applicable, (i) a Public Offering Funding or other necessary funding
arrangements, (ii) compliance with the Securities Act or other law (including,
but not limited to, (a) state "blue sky" or other securities laws and (b) the
expiration or termination of the applicable waiting period, if any, under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended) and (iii)
satisfaction or waiver of other commercially reasonable and customary closing
conditions and requirements for a transaction of such nature.
"Tendering Party" shall have the meaning set forth in Section 6(b) of
this Partnership Unit Designation.
"Tendered Units" shall have the meaning set forth in Section 6(b) of
this Partnership Unit Designation.
3. RANKING.
Any class or series of Partnership Units of the Partnership shall be
deemed to rank:
a. prior or senior to the Class One Partnership Preferred
Units, as to the payment of distributions and as to distributions of assets upon
liquidation, dissolution or winding up, if the holders of such class or series
shall be entitled to the receipt of distributions and of amounts distributable
upon liquidation, dissolution or winding up, as the case may be, in preference
or priority to the holders of Class One Partnership Preferred Units (the
Partnership Units referred to in this paragraph being hereinafter referred to,
collectively, as "Senior Partnership Units");
b. on a parity with the Class One Partnership Preferred Units,
as to the
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payment of distributions and as to distribution of assets upon liquidation,
dissolution or winding up, whether or not the distribution rates, distribution
payment dates or redemption or liquidation prices per unit or other denomination
thereof be different from those of the Class One Partnership Preferred Units if
the holders of such class or series of Partnership Units and the Class One
Partnership Preferred Units shall be entitled to the receipt of distributions
and of amounts distributable upon liquidation, dissolution or winding up in
proportion to their respective amounts of accrued and unpaid distributions per
unit or other denomination or liquidation preferences, without preference or
priority one over the other (the Partnership Units referred to in this paragraph
being hereinafter referred to, collectively, as "Parity Partnership Units"); and
c. junior to the Class One Partnership Preferred Units, as to
the payment of distributions and as to the distribution of assets upon
liquidation, dissolution or winding up, (i) if such class or series of
Partnership Units shall be Class B Partnership Preferred Units, Class C
Partnership Preferred Units, Class D Partnership Preferred Units, Class E
Partnership Preferred Units, Class G Partnership Preferred Units, Class H
Partnership Preferred Units or Class J Partnership Preferred Units, Partnership
Common Units, or Class I High Performance Partnership Units or (ii) if the
holders of Class One Partnership Preferred Units shall be entitled to receipt of
distributions or of amounts distributable upon liquidation, dissolution or
winding up, as the case may be, in preference or priority to the holders of such
class or series of Partnership Units (the Partnership Units referred to in
clauses (i) and (ii) of this paragraph being hereinafter referred to,
collectively, as "Junior Partnership Units").
4. QUARTERLY CASH DISTRIBUTIONS.
a. Holders of Preferred Units will be entitled to receive,
when and as declared by the General Partner, quarterly cash distributions at the
rate of $2.00 per Preferred Unit. Any such distributions will be cumulative from
the date of original issue, whether or not in any distribution period or periods
such distributions have been declared, and shall be payable quarterly on
February 15, May 15, August 15 and November 15 of each year (or, if not a
Business Day, the next succeeding Business Day) (each a "Distribution Payment
Date"), commencing on the first such date occurring after the date of original
issue. If the Preferred Units are issued on any day other than a Distribution
Payment Date, the first distribution payable on such Preferred Units will be
prorated for the portion of the quarterly period that such Preferred Units are
outstanding on the basis of twelve 30-day months and a 360-day year.
Distributions will be payable in arrears to holders of record as they appear on
the records of the Partnership at the close of business on the February 1, May
1, August 1 or November 1, as the case may be, immediately preceding each
Distribution Payment Date. Holders of Preferred Units will not be entitled to
receive any distributions in excess of cumulative distributions on the Preferred
Units. No interest, or sum of money in lieu of interest, shall be payable in
respect of any distribution payment or payments on the Preferred Units that may
be in arrears. Holders of any Preferred Units that are issued after the date of
original issuance will be entitled to receive the same distributions as holders
of any Preferred Units issued on the date of original issuance.
b. When distributions are not paid in full upon the Preferred
Units or any Parity Partnership Units, or a sum sufficient for such payment is
not set apart, all distributions declared upon the Preferred Units and any
Parity Partnership Units shall be declared ratably in proportion to the
respective amounts of distributions accumulated and unpaid on the Preferred
Units and accumulated and unpaid on such Parity Partnership Units. Except as set
forth in the preceding sentence, unless distributions on the Preferred Units
equal to the full amount of accumulated and unpaid distributions have been or
contemporaneously are declared and paid, or declared and a sum sufficient for
the payment thereof has been or contemporaneously is set apart for such payment,
for all past distribution periods, no distributions shall be declared or paid or
set apart for payment by the Partnership with respect to any Parity Partnership
Units.
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c. Unless full cumulative distributions (including all
accumulated, accrued and unpaid distributions) on the Preferred Units have been
declared and paid, or declared and set apart for payment, for all past
distribution periods, no distributions (other than distributions paid in Junior
Partnership Units or options, warrants or rights to subscribe for or purchase
Junior Partnership Units) may be declared or paid or set apart for payment by
the Partnership and no other distribution of cash or other property may be
declared or made, directly or indirectly, by the Partnership with respect to any
Junior Partnership Units, nor shall any Junior Partnership Units be redeemed,
purchased or otherwise acquired (except for a redemption, purchase or other
acquisition of Partnership Common Units made for purposes of an employee
incentive or benefit plan of the Partnership or any affiliate thereof,
including, without limitation, Previous General Partner and its affiliates) for
any consideration (or any monies be paid to or made available for a sinking fund
for the redemption of any such Junior Partnership Units), directly or
indirectly, by the Partnership (except by conversion into or exchange for Junior
Partnership Units, or options, warrants or rights to subscribe for or purchase
Junior Partnership Units), nor shall any other cash or other property be paid or
distributed to or for the benefit of holders of Junior Partnership Units.
d. Notwithstanding the foregoing provisions of this Section 4,
the Partnership shall not be prohibited from (i) declaring or paying or setting
apart for payment any distribution on any Parity Partnership Units or (ii)
redeeming, purchasing or otherwise acquiring any Parity Partnership Units, in
each case, if such declaration, payment, redemption, purchase or other
acquisition is necessary to maintain the Previous General Partner's
qualification as a REIT.
5. LIQUIDATION PREFERENCE.
a. Upon any voluntary or involuntary liquidation, dissolution
or winding up of the Partnership, before any allocation of income or gain by the
Partnership shall be made to or set apart for the holders of any Junior
Partnership Units, to the extent possible, the holders of Preferred Units shall
be entitled to be allocated income and gain to effectively enable them to
receive a liquidation preference (the "Liquidation Preference") per Preferred
Unit equal to the sum of (i) the quotient obtained by dividing $8 by the lesser
of (a) the Dividend Yield on the Previous General Partner's Class D Cumulative
Preferred Stock as of the date of such liquidation, dissolution or winding up,
or (b) the average of the Dividend Yields of the three preferred stocks listed
on Annex I hereto as of the date of such liquidation, dissolution or winding up,
plus (ii) any accumulated, accrued and unpaid distributions (whether or not
earned or declared) to the date of final distribution to such holders; but such
holders will not be entitled to any further payment or allocation. Until all
holders of the Preferred Units have been paid the Liquidation Preference in
full, no allocation of income or gain will be made to any holder of Junior
Partnership Units upon the liquidation, dissolution or winding up of the
Partnership.
b. If, upon any liquidation, dissolution or winding up of the
Partnership, the assets of the Partnership, or proceeds thereof, distributable
among the holders of Preferred Units shall be insufficient to pay in full the
Liquidation Preference and liquidating payments on any Parity Partnership Units,
then following certain allocations made by the Partnership, such assets, or the
proceeds thereof, shall be distributed among the holders of Preferred Units and
any such Parity Partnership Units ratably in the same proportion as the
respective amounts that would be payable on such Preferred Units and any such
Parity Partnership Units if all amounts payable thereon were paid in full.
c. A voluntary or involuntary liquidation, dissolution or
winding up of the Partnership will not include a consolidation or merger of the
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Partnership with one or more partnerships, corporations or other entities, or a
sale or transfer of all or substantially all of the Partnership's assets.
d. Upon any liquidation, dissolution or winding up of the
Partnership, after all allocations shall have been made in full to the holders
of Preferred Units and any Parity Partnership Units to enable them to receive
their respective liquidation preferences, any Junior Partnership Units shall be
entitled to receive any and all assets remaining to be paid or distributed, and
the holders of the Preferred Units and any Parity Partnership Units shall not be
entitled to share therein.
6. REDEMPTION.
a. Except as set forth in Section 6(l) hereof, the Preferred
Units may not be redeemed at the option of the Partnership, and will not be
required to be redeemed or repurchased by the Partnership or the Previous
General Partner except if a holder of a Preferred Unit effects a Redemption, as
provided for in Section 6(b) hereof. The Partnership or the Previous General
Partner may purchase Preferred Units from time to time in the open market, by
tender or exchange offer, in privately negotiated purchases or otherwise.
b. On or after the first (1st) anniversary of becoming a
holder of Preferred Units, a Qualifying Party shall have the right (subject to
the terms and conditions set forth herein) to require the Partnership to redeem
all or a portion of the Preferred Units held by such Qualifying Party (such
Preferred Units being hereafter "Tendered Units") in exchange (a "Redemption")
for REIT Shares issuable on, or the Cash Amount payable on, the Specified
Redemption Date, as determined by the Partnership in its sole discretion. Any
Redemption shall be exercised pursuant to a Notice of Redemption delivered to
the General Partner by the Qualifying Party when exercising the Redemption right
(the "Tendering Party").
c. If the Partnership elects to redeem Tendered Units for REIT
Shares rather than cash, then the Partnership shall direct the Previous General
Partner to issue and deliver such REIT Shares to the Tendering Party pursuant to
the terms set forth in this Section 6, in which case, (i) the Previous General
Partner, acting as a distinct legal entity, shall assume directly the obligation
with respect thereto and shall satisfy the Tendering Party's exercise of its
Redemption right, and (ii) such transaction shall be treated, for federal income
tax purposes, as a transfer by the Tendering Party of such Tendered Units to the
Previous General Partner in exchange for REIT Shares. In making such election to
cause the Previous General Partner to acquire Tendered Units, the Partnership
shall act in a fair, equitable and reasonable manner that neither prefers one
group or class of Tendering Parties over another nor discriminates against a
group or class of Tendering Parties. If the Partnership elects to redeem any
number of Tendered Units for REIT Shares, rather than cash, on the Specified
Redemption Date, the Tendering Party shall sell such number of the Tendered
Units to the Previous General Partner in exchange for a number of REIT Shares
equal to the REIT Shares Amount for such number of the Tendered Units. The
Tendering Party shall submit (i) such information, certification or affidavit as
the Previous General Partner may reasonably require in connection with the
application of the Ownership Limit and other restrictions and limitations of the
Charter to any such acquisition and (ii) such written representations,
investment letters, legal opinions or other instruments necessary, in the
Previous General Partner's view, to effect compliance with the Securities Act.
The REIT Shares shall be delivered by the Previous General Partner as duly
authorized, validly issued, fully paid and accessible REIT Shares, free of any
pledge, lien, encumbrance or restriction, other than the Ownership Limit and
other restrictions provided in the Charter, the Bylaws of the Previous General
Partner, the Securities Act and relevant state securities or "blue sky" laws.
Neither any Tendering Party whose Tendered Units are acquired by the Previous
General Partner pursuant to this Section 6, any Partner, any Assignee nor any
other interested Person shall have any right to require or cause the Previous
General Partner or the General Partner to register, qualify or list any REIT
Shares owned or held by
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such Person, whether or not such REIT Shares are issued pursuant to this Section
6, with the SEC, with any state securities commissioner, department or agency,
under the Securities Act or the Exchange Act or with any stock exchange;
provided, however, that this limitation shall not be in derogation of any
registration or similar rights granted pursuant to any other written agreement
between the Previous General Partner and any such Person. Notwithstanding any
delay in such delivery, the Tendering Party shall be deemed the owner of such
REIT Shares for all purposes, including, without limitation, rights to vote or
consent, receive dividends, and exercise rights, as of the Specified Redemption
Date. REIT Shares issued upon an acquisition of the Tendered Units by the
Previous General Partner pursuant to this Section 6 may contain such legends
regarding restrictions under the Securities Act and applicable state securities
laws as the Previous General Partner in good faith determines to be necessary or
advisable in order to ensure compliance with such laws.
d. The Partnership shall have no obligation to effect any
redemption unless and until a Tendering Party has given the Partnership a Notice
of Redemption. Each Notice of Redemption shall be sent by hand delivery or by
first class mail, postage prepaid, to AIMCO Properties, L.P., c/o AIMCO-GP,
Inc., 1873 South Bellaire Street, 17th Floor, Denver, Colorado 80222, Attention:
Investor Relations, or to such other address as the Partnership shall specify in
writing by delivery to the holders of the Preferred Units in the same manner as
that set forth above for delivery of the Notice of Redemption. At any time prior
to the Specified Redemption Date for any Redemption, any holder may revoke its
Notice of Redemption.
e. A Tendering Party shall have no right to receive
distributions with respect to any Tendered Units (other than the Cash Amount)
paid after delivery of the Notice of Redemption, whether or not the record date
for such distribution precedes or coincides with such delivery of the Notice of
Redemption. If the Partnership elects to redeem any number of Tendered Units for
cash, the Cash Amount for such number of Tendered Units shall be delivered as a
certified check payable to the Tendering Party or, in the General Partner's sole
and absolute discretion, in immediately available funds.
f. In the event that the Partnership declines to cause the
Previous General Partner to acquire all of the Tendered Units from the Tendering
Party in exchange for REIT Shares pursuant to this Section 6 following receipt
of a Notice of Redemption (a "Declination"):
i. The Previous General Partner or the General Partner
shall give notice of such Declination to the Tendering Party on or
before the close of business on the Cut-Off Date.
ii. The Partnership may elect to raise funds for the
payment of the Cash Amount either (a) by requiring that the
Previous General Partner contribute such funds from the proceeds
of a registered public offering (a "Public Offering Funding") by
the Previous General Partner of a number of REIT Shares
("Registrable Shares") equal to the REIT Shares Amount with
respect to the Tendered Units or (b) from any other sources
(including, but not limited to, the sale of any Property and the
incurrence of additional Debt) available to the Partnership.
iii. Promptly upon the General Partner's receipt of the
Notice of Redemption and the Previous General Partner or the
General Partner giving notice of the Partnership's Declination,
the General Partner shall give notice (a "Single Funding Notice")
to all Qualifying Parties then holding Preferred Units and having
Redemption rights pursuant to this Section 6 and require that all
such Qualifying Parties elect whether or not to effect a
Redemption of their Preferred Units to be
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funded through such Public Offering Funding. In the event that any
such Qualifying Party elects to effect such a Redemption, it shall
give notice thereof and of the number of Preferred Units to be
made subject thereon in writing to the General Partner within ten
(10) Business Days after receipt of the Single Funding Notice, and
such Qualifying Party shall be treated as a Tendering Party for
all purposes of this Section 6. In the event that a Qualifying
Party does not so elect, it shall be deemed to have waived its
right to effect a Redemption for the next twelve months; provided,
however, that the Previous General Partner shall not be required
to acquire Preferred Units pursuant to this Section 6(f) more than
twice within any twelve-month period.
Any proceeds from a Public Offering Funding that are in excess of the Cash
Amount shall be for the sole benefit of the Previous General Partner and/or the
General Partner. The General Partner and/or the Special Limited Partner shall
make a Capital Contribution of such amounts to the Partnership for an additional
General Partner Interest and/or Limited Partner Interest. Any such contribution
shall entitle the General Partner and the Special Limited Partner, as the case
may be, to an equitable Percentage Interest adjustment.
g. Notwithstanding the provisions of this Section 6, the
Previous General Partner shall not, under any circumstances, elect to acquire
Tendered Units in exchange for the REIT Shares if such exchange would be
prohibited under the Charter.
h. Notwithstanding anything herein to the contrary, with
respect to any Redemption pursuant to this Section 6:
i. All Preferred Units acquired by the Previous General
Partner pursuant to this Section 6 hereof shall be contributed by
the Previous General Partner to either or both of the General
Partner and the Special Limited Partner in such proportions as the
Previous General Partner, the General Partner and the Special
Limited Partner shall determine. Any Preferred Units so
contributed to the General Partner shall automatically, and
without further action required, be converted into and deemed to
be a General Partner Interest comprised of an equal number of
Partnership Common Units. Any Preferred Units so contributed to
the Special Limited Partner shall be converted into Partnership
Common Units.
ii. Subject to the Ownership Limit, no Tendering Party may
effect a Redemption for less than five hundred (500) Preferred
Units or, if such Tendering Party holds (as a Limited Partner or,
economically, as an Assignee) less than five hundred (500)
Preferred Units, all of the Preferred Units held by such Tendering
Party.
iii. Notwithstanding anything herein to the contrary, with
respect to any Redemption or acquisition of Tendered Units by the
Previous General Partner pursuant to this Section 6, in the event
that the Previous General Partner or the General Partner gives
notice to all Limited Partners (but excluding any Assignees) then
owning Partnership Interests (a "Primary Offering Notice") that
the Previous General Partner desires to effect a primary offering
of its equity securities then, unless the Previous General Partner
and the General Partner otherwise consent, commencement of the
actions denoted in Section 6(f) hereof as to a Public Offering
Funding with respect to any Notice of Redemption thereafter
received, whether or not the Tendering Party is a Limited Partner,
may be delayed until the earlier of (a) the completion of the
primary offering or (b) ninety (90) days following the giving of
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the Primary Offering Notice.
iv. Without the Consent of the Previous General Partner,
no Tendering Party may effect a Redemption within ninety (90) days
following the closing of any prior Public Offering Funding.
v. The consummation of such Redemption shall be subject to
the expiration or termination of the applicable waiting period, if
any, under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
vi. The Tendering Party shall continue to own (subject, in
the case of an Assignee, to the provision of Section 11.5 of the
Agreement) all Preferred Units subject to any Redemption, and be
treated as a Limited Partner or an Assignee, as applicable, with
respect to such Preferred Units for all purposes of the Agreement,
until such Preferred Units are either paid for by the Partnership
pursuant to this Section 6 or transferred to the Previous General
Partner (or directly to the General Partner or Special Limited
Partner) and paid for, by the issuance of the REIT Shares,
pursuant to this Section 6 on the Specified Redemption Date. Until
a Specified Redemption Date and an acquisition of the Tendered
Units by the Previous General Partner pursuant to this Section 6,
the Tendering Party shall have no rights as a shareholder of the
Previous General Partner with respect to the REIT Shares issuable
in connection with such acquisition.
For purposes of determining compliance with the restrictions set forth in this
Section 6(h), all Partnership Common Units and Partnership Preferred Units,
including Preferred Units, beneficially owned by a Related Party of a Tendering
Party shall be considered to be owned or held by such Tendering Party.
i. In connection with an exercise of Redemption rights
pursuant to this Section 6, the Tendering Party shall submit the following to
the General Partner, in addition to the Notice of Redemption:
i. A written affidavit, dated the same date as the Notice
of Redemption, (a) disclosing the actual and constructive
ownership, as determined for purposes of Code Sections 856(a)(6)
and 856(h), of REIT Shares and any other classes or shares of the
Previous General Partner by (i) such Tendering Party and (ii) any
Related Party and (b) representing that, after giving effect to
the Redemption, neither the Tendering Party nor any Related Party
will own REIT Shares in excess of the Ownership Limit;
ii. A written representation that neither the Tendering
Party nor any Related Party has any intention to acquire any
additional REIT Shares or any other class of shares of the
Previous General Partner prior to the closing of the Redemption on
the Specified Redemption Date; and
iii. An undertaking to certify, at and as a condition to
the closing of the Redemption on the Specified Redemption Date,
that either (a) the actual and constructive ownership of REIT
Shares or any other class of shares of the Previous General
Partner by the Tendering Party and any Related Party remain
unchanged from that disclosed in the affidavit required by Section
6(i)(a) or (b)) after giving effect to the Redemption, neither the
Tendering Party nor any Related Party shall
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<PAGE> 12
own REIT Shares or other shares of the Previous General Partner in
violation of the Ownership Limit.
j. On or after the Specific Redemption Date, each holder of
Preferred Units shall surrender to the Partnership the certificate evidencing
such holder's Preferred Units, at the address to which a Notice of Redemption is
required to be sent. Upon such surrender of a certificate, the Partnership shall
thereupon pay the former holder thereof the applicable Cash Amount and/or
deliver REIT Shares for the Preferred Units evidenced thereby. From and after
the Specific Redemption Date (i) distributions with respect to the Preferred
Units shall cease to accumulate, (ii) the Preferred Units shall no longer be
deemed outstanding, (iii) the holders thereof shall cease to be Partners to the
extent of their interest in such Preferred Units, and (iv) all rights whatsoever
with respect to the Preferred Units shall terminate, except the right of the
holders of the Preferred Units to receive Cash Amount and/or REIT Shares
therefor, without interest or any sum of money in lieu of interest thereon, upon
surrender of their certificates therefor.
k. Notwithstanding the provisions of this Section 6, the
Tendering Parties (i) shall not be entitled to elect or effect a Redemption
where the Redemption would consist of less than all the Preferred Units held by
Partners and, to the extent that the aggregate Percentage Interests of the
Limited Partners would be reduced, as a result of the Redemption, to less than
one percent (1%) and (ii) shall have no rights under the Agreement that would
otherwise be prohibited under the Charter. To the extent that any attempted
Redemption would be in violation of this Section 6(k), it shall be null and void
ab initio, and the Tendering Party shall not acquire any rights or economic
interests in REIT Shares otherwise issuable by the Previous General Partner
hereunder.
l. Notwithstanding any other provision of the Agreement, on
and after the date on which the aggregate Percentage Interests of the Limited
Partners (other than the Special Limited Partner) are less than one percent
(1%), the Partnership shall have the right, but not the obligation, from time to
time and at any time to redeem any and all outstanding Limited Partner Interests
(other than the Special Limited Partner's Limited Partner Interest) by treating
any Limited Partner as a Tendering Party who has delivered a Notice of
Redemption pursuant to this Section 6 for the amount of Preferred Units to be
specified by the General Partner, in its sole and absolute discretion, by notice
to such Limited Partner that the Partnership has elected to exercise its rights
under this Section 6(l). Such notice given by the General Partner to a Limited
Partner pursuant to this Section 6(l) shall be treated as if it were a Notice of
Redemption delivered to the General Partner by such Limited Partner. For
purposes of this Section 6(l), (a) any Limited Partner (whether or not eligible
to be a Tendering Party) may, in the General Partner's sole and absolute
discretion, be treated as a Tendering Party and (b) the provisions of Sections
6(f)(1), 6(h)(2), 6(h)(3) and 6(h)(5) hereof shall not apply, but the remainder
of this Section shall apply, mutatis mutandis.
7. STATUS OF REACQUIRED UNITS.
All Preferred Units which shall have been issued and reacquired in any
manner by the Partnership shall be deemed cancelled and no longer outstanding.
8. GENERAL.
The ownership of the Preferred Units shall be evidenced by one or more
certificates in the form of Annex III hereto. The General Partner shall amend
Exhibit A to the Agreement from time to time to the extent necessary to reflect
accurately the issuance of, and subsequent redemption, or any other event having
an effect on the ownership of, the Class One Partnership Preferred Units.
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<PAGE> 13
9. ALLOCATIONS OF INCOME AND LOSS.
For each taxable year, (i) each holder of Preferred Units will be
allocated net income of the Partnership in an amount equal to the distributions
made on such holder's Preferred Units during such taxable year, and (ii) each
holder of Preferred Units will be allocated its pro rata share, based on the
portion of outstanding Preferred Units held by it, of any net loss of the
Partnership that is not allocated to holders of Partnership Common Units or
other interests in the Partnership. Upon liquidation, dissolution or winding up
of the Partnership, the holders of Preferred Units will be allocated income and
gain sufficient to enable them to realize the Liquidation Preference in full.
10. VOTING RIGHTS.
Except as otherwise required by applicable law or in the Agreement, the
holders of the Preferred Units will have the same voting rights as holders of
the Partnership Common Units. So long as any Preferred Units are outstanding, in
addition to any other vote or consent of partners required by law or by the
Agreement, the affirmative vote or consent of holders of at least 50% of the
outstanding Preferred Units will be necessary for effecting any amendment of any
of the provisions of the Partnership Unit Designation of the Preferred Units
that materially and adversely affects the rights or preferences of the holders
of the Preferred Units. The creation or issuance of any class or series of
Partnership units, including, without limitation, any Partnership units that may
have rights junior to, on a parity with, or senior or superior to the Preferred
Units will not be deemed to have a material adverse effect on the rights or
preferences of the holders of Preferred Units. The Partnership shall give the
holders of the Preferred Units at least twenty-one (21) days' advance notice of
the proposed issuance of any Senior Partnership Units. With respect to the
exercise of the above described voting rights, each Preferred Unit will have one
(1) vote per Preferred Unit.
11. RESTRICTIONS ON TRANSFER.
Preferred Units are subject to the same restrictions on transfer
applicable to Common Units, as set forth in the Agreement.
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<PAGE> 14
ANNEX I
TO EXHIBIT O
1. Associated Estates Realty Corporation Class A Cumulative Preferred Shares.
2. Colonial Properties Trust 8.75% Series A Cumulative Redeemable Preferred
Shares.
3. Walden Residential Properties, Inc., 9.20% Senior Preferred Stock.
O-I-1
<PAGE> 15
ANNEX II
TO EXHIBIT O
NOTICE OF REDEMPTION
To: AIMCO Properties, L.P.
c/o AIMCO-GP, Inc.
1873 South Bellaire Street, 17th Floor
Denver, Colorado 80222
Attention: Investor Relations
The undersigned Limited Partner or Assignee hereby irrevocably
tenders for redemption Class One Partnership Preferred Units in AIMCO
Properties, L.P. in accordance with the terms of the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of July 29,
1994, as it may be amended and supplemented from time to time (the "Agreement").
All capitalized terms used herein and not otherwise defined shall have the
respective meanings ascribed thereto in the Partnership Unit Designation of the
Class One Partnership Preferred Units. The undersigned Limited Partner or
Assignee:
(a) if the Partnership elects to redeem such Class One
Partnership Preferred Units for REIT Shares rather than cash, hereby
irrevocably transfers, assigns, contributes and sets over to the
Previous General Partner all of the undersigned Limited Partner's or
Assignee's right, title and interest in and to such Class One
Partnership Preferred Units;
(b) undertakes (i) to surrender such Class One Partnership
Preferred Units and any certificate therefor at the closing of the
Redemption contemplated hereby and (ii) to furnish to the Previous
General Partner, prior to the Specified Redemption Date:
(1) A written affidavit, dated the same date as this
Notice of Redemption, (a) disclosing the actual and
constructive ownership, as determined for purposes of Code
Sections 856(a)(6) and 856(h), of REIT Shares by (i) the
undersigned Limited Partner or Assignee and (ii) any Related
Party and (b) representing that, after giving effect to the
Redemption, neither the undersigned Limited Partner or
Assignee nor any Related Party will own REIT Shares in excess
of the Ownership Limit;
(2) A written representation that neither the
undersigned Limited Partner or Assignee nor any Related Party
has any intention to acquire any additional REIT Shares prior
to the closing of the Redemption contemplated hereby on the
Specified Redemption Date; and
(3) An undertaking to certify, at and as a condition
to the closing of the Redemption contemplated hereby on the
Specified Redemption Date, that either (a) the actual and
constructive ownership of REIT Shares by the undersigned
Limited Partner or Assignee and any Related Party remain
unchanged from that disclosed in the affidavit required by
paragraph (1) above, or (b) after giving effect to the
Redemption contemplated hereby, neither the undersigned
Limited Partner or Assignee nor any Related Party shall own
REIT Shares in violation of the Ownership Limit.
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<PAGE> 16
(c) directs that the certificate representing the REIT Shares,
or the certified check representing the Cash Amount, in either case,
deliverable upon the closing of the Redemption contemplated hereby be
delivered to the address specified below;
(d) represents, warrants, certifies and agrees that:
(i) the undersigned Limited Partner or Assignee has,
and at the closing of the Redemption will have, good,
marketable and unencumbered title to such Preferred Units,
free and clear of the rights or interests of any other person
or entity;
(ii) the undersigned Limited Partner or Assignee has,
and at the closing of the Redemption will have, the full
right, power and authority to tender and surrender such
Preferred Units as provided herein; and
(iii) the undersigned Limited Partner or Assignee has
obtained the consent or approval of all persons and entities,
if any, having the right to consent to or approve such tender
and surrender.
Dated:
--------------------------
Name of Limited Partner or Assignee:
-----------------------------------------
-----------------------------------------
(Signature of Limited Partner or Assignee)
-----------------------------------------
(Street Address)
-----------------------------------------
(City) (State) (Zip Code)
O-II-2
<PAGE> 17
Issue check payable to
or Certificates in the
name of:
----------------------------------------------
Please insert social security
or identifying number:
------------------------------------------
Signature Guaranteed by:
------------------------------------------
NOTICE: THE SIGNATURE OF THIS NOTICE OF REDEMPTION MUST CORRESPOND WITH THE
NAME(S) AS WRITTEN UPON THE FACE OF THE CERTIFICATE FOR THE CLASS ONE PREFERRED
UNITS WHICH ARE BEING REDEEMED IN EVERY PARTICULAR WITHOUT ALTERATION OR
ENLARGEMENT OR ANY CHANGE WHATEVER.
THE SIGNATURE SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION, (Banks,
Stockbrokers, Savings and Loan Associations and Credit Unions), WITH MEMBERSHIP
IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM PURSUANT TO SEC RULE
17Ad-15.
O-II-3
<PAGE> 18
ANNEX III
TO EXHIBIT O
FORM OF UNIT CERTIFICATE
OF
CLASS ONE PARTNERSHIP PREFERRED UNITS
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT
BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION, UNLESS THE TRANSFEROR DELIVERS TO THE PARTNERSHIP AN OPINION OF
COUNSEL SATISFACTORY TO THE PARTNERSHIP, IN FORM AND SUBSTANCE SATISFACTORY TO
THE PARTNERSHIP, TO THE EFFECT THAT THE PROPOSED SALE, TRANSFER OR OTHER
DISPOSITION MAY BE EFFECTED WITHOUT REGISTRATION UNDER THE ACT AND UNDER
APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS. IN ADDITION, THE LIMITED
PARTNERSHIP INTEREST EVIDENCED BY THIS CERTIFICATE MAY BE SOLD OR OTHERWISE
TRANSFERRED ONLY IN COMPLIANCE WITH THE RESTRICTIONS ON TRANSFER SET FORTH IN
THE THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF AIMCO
PROPERTIES, L.P., DATED AS OF JULY 29, 1994, AS IT MAY BE AMENDED AND/OR
SUPPLEMENTED FROM TIME TO TIME, A COPY OF WHICH MAY BE OBTAINED FROM AIMCO-GP,
INC, THE GENERAL PARTNER, AT ITS PRINCIPAL EXECUTIVE OFFICE.
Certificate Number
-------
AIMCO PROPERTIES, L.P.
FORMED UNDER THE LAWS OF THE STATE OF DELAWARE
This certifies that ___________________________________________________________
is the owner of _______________________________________________________________
CLASS ONE PARTNERSHIP PREFERRED UNITS
OF
AIMCO PROPERTIES, L.P.,
transferable on the books of the Partnership in person or by duly authorized
attorney on the surrender of this Certificate properly endorsed. This
Certificate and the Class One Partnership Preferred Units represented hereby are
issued and shall be held subject to all of the provisions of the Third Amended
and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., as the
same may be amended and/or supplemented from time to time.
IN WITNESS WHEREOF, the undersigned has signed this Certificate.
Dated:
By
-------------------------------------
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<PAGE> 19
ASSIGNMENT
For Value Received, ___________________________ hereby sells, assigns
and transfers unto
- -------------------------------------------------------------------------------
______________________ Class One Partnership Preferred Unit(s) represented by
the within Certificate, and does hereby irrevocably constitute and appoint the
General Partner of AIMCO Properties, L.P. as its Attorney to transfer said Class
One Partnership Preferred Unit(s) on the books of AIMCO Properties, L.P. with
full power of substitution in the premises.
Dated:
------------------------------
By:
-----------------------------
Name:
Signature Guaranteed by:
---------------------------------
NOTICE: THE SIGNATURE OF THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S) AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR WITHOUT ALTERATION
OR ENLARGEMENT OR ANY CHANGE WHATEVER.
THE SIGNATURE SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION, (Banks,
Stockbrokers, Savings and Loan Associations and Credit Unions), WITH MEMBERSHIP
IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM PURSUANT TO SEC RULE
17Ad-15.
O-III-2
