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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 1-13232
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
MARYLAND 84-1259577
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2000 SOUTH COLORADO BOULEVARD,
TOWER TWO, SUITE 2-1000,
DENVER, CO 80222-7900
(Address of principal executive offices) (Zip Code)
</TABLE>
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Registrant's Telephone Number, Including Area Code: (303) 757-8101
Securities Registered Pursuant to Section 12(b) of the Act:
<TABLE>
<CAPTION>
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
------------------- ---------------------
<S> <C>
Class A Common Stock New York Stock Exchange
Class C Cumulative Preferred Stock New York Stock Exchange
Class D Cumulative Preferred Stock New York Stock Exchange
Class G Cumulative Preferred Stock New York Stock Exchange
Class H Cumulative Preferred Stock New York Stock Exchange
Class K Convertible Cumulative Preferred Stock New York Stock Exchange
</TABLE>
Securities Registered Pursuant to Section 12(g) of the Act: NONE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
As of February 29, 2000, there were 67,096,142 shares of Class A Common
Stock outstanding. The aggregate market value of the voting and non-voting
common stock held by non-affiliates of the registrant, was approximately
$2,482.6 million as of February 29, 2000.
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DOCUMENTS INCORPORATED BY REFERENCE
Portions of the proxy statement for the registrant's 2000 annual meeting of
stockholders are incorporated by reference into Part III of this Annual Report.
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APARTMENT INVESTMENT AND MANAGEMENT COMPANY
TABLE OF CONTENTS
ANNUAL REPORT ON FORM 10-K
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
ITEM PAGE
- ---- ----
<C> <S> <C>
PART I
1. Business....................................................
1999 Developments...........................................
Financial Information About Industry Segments...............
Operating and Financial Strategies..........................
Growth Strategies...........................................
Property Management Strategies..............................
Taxation of the Company.....................................
Competition.................................................
Regulation..................................................
Insurance...................................................
Employees...................................................
2. Properties..................................................
3. Legal Proceedings...........................................
4. Submission of Matters to a Vote of Security Holders.........
PART II
5. Market for the Registrant's Common Equity and Related
Stockholder Matters.........................................
6. Selected Financial Data.....................................
7. Management's Discussion and Analysis of Financial Condition
and Results of Operations...................................
7a. Quantitative and Qualitative Disclosures About Market
Risk........................................................
8. Financial Statements and Supplementary Data.................
9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure....................................
PART III
10. Directors and Executive Officers of the Registrant..........
11. Executive Compensation......................................
12. Security Ownership of Certain Beneficial Owners and
Management..................................................
13. Certain Relationships and Related Transactions..............
PART IV
14. Exhibits, Financial Statement Schedule and Reports on Form
8-K.........................................................
</TABLE>
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PART I
ITEM 1. BUSINESS.
Apartment Investment and Management Company ("AIMCO"), a Maryland
corporation formed on January 10, 1994, is a self-administered and self-managed
REIT engaged in the ownership, acquisition, development, expansion and
management of multi-family apartment properties. As of December 31, 1999, we
owned or managed 363,462 apartment units in 1,942 properties located in 48
states, the District of Columbia and Puerto Rico. Based on apartment unit data
compiled by the National Multi Housing Council, we believe that, as of December
31, 1999, we were the largest owner and manager of multifamily apartment
properties in the United States. As of December 31, 1999, we:
- owned or controlled 106,148 units in 373 apartment properties;
- held an equity interest in 133,113 units in 751 apartment properties; and
- managed 124,201 units in 818 apartment properties for third party owners
and affiliates.
We conduct substantially all of our operations through our operating
partnership, AIMCO Properties, L.P. Through a wholly-owned subsidiary, we act as
the sole general partner of the AIMCO operating partnership. As of December 31,
1999, we owned approximately a 91% interest in the AIMCO operating partnership.
We manage apartment properties for third parties and affiliates through
unconsolidated subsidiaries that we refer to as the "management companies."
Generally, when we refer to "we," "us" or the "Company" in this annual report on
Form 10-K, we are referring to AIMCO, the AIMCO operating partnership, the
management companies and their respective subsidiaries. We refer to interests in
the AIMCO operating partnership that are held by third parties as "OP Units."
The Company's principal executive offices are located at 2000 South
Colorado Blvd., Tower Two, Suite 2-1000, Denver, Colorado 80222-7900 and its
telephone number is (303) 757-8101.
1999 DEVELOPMENTS
Individual Property Acquisitions
The Company directly acquired 28 apartment communities in unrelated
transactions during 1999 (not including those acquired in connection with the
merger with Insignia Properties Trust, "IPT"). The aggregate consideration paid
by the Company of $495.0 million consisted of $91.5 million in cash, 2.4 million
Preferred OP Units, 0.9 million common OP Units and 0.5 million shares of Class
A Common Stock with a total recorded value of $116.8 million, assumption of
$110.1 million of secured long-term indebtedness, the assumption of $15.2
million of other liabilities, and new financing of $161.4 million of secured
long-term indebtedness. The Company has budgeted an additional $23.9 million for
initial capital enhancements related to these properties.
Tender Offers
During 1999, the Company made separate offers to the limited partners of
approximately 600 partnerships to acquire their limited partnership interests.
The Company paid approximately $271 million in cash and OP Units to acquire
limited partnership interests pursuant to the offers.
Property Dispositions
In 1999, the Company sold 63 properties for an aggregate sales price of
approximately $426.0 million. Net cash proceeds to the Company from the sales of
$135.8 million were used to repay a portion of the Company's outstanding
short-term indebtedness. The results of operations of 55 of these properties
were accounted for by the Company under the equity method.
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Debt Assumptions and Financings
In August 1999, the Company closed a $300 million revolving credit facility
arranged by Bank of America, N.A. BankBoston, N.A. and First Union National Bank
and comprised of a total of nine lender participants. The obligations under the
new credit facility are secured by certain non-real estate assets of the
Company. The existing lines of credit were terminated. The credit facility is
used for general corporate purposes and has a two-year term with two one-year
extensions. The annual interest rate under the new credit facility is based on
either LIBOR or a base rate which is the higher of Bank of America's reference
rate or 0.5% over the federal funds rate, plus, in either case, an applicable
margin. The margin ranges between 2.05% and 2.55%, in the case of LIBOR-based
loans, and between 0.55% and 1.05%, in the case of base rate loans, based upon a
fixed charge coverage ratio. The weighted average interest rate at December 31,
1999 was 8.84%. The amount available under the credit facility at December 31,
1999 was $90.8 million.
During the year ended December 31, 1999, the Company issued $410.3 million
of long-term fixed rate, fully amortizing non-recourse mortgage notes payable
with a weighted average interest rate of 7.3%. Each of the notes is individually
secured by one of forty properties with no cross-collateralization. The Company
used the net proceeds after transaction costs of $373.6 million to repay
existing debt. During the year ended December 31, 1999, the Company has also
assumed $110.1 million of long-term fixed rate, fully amortizing notes payables
with a weighted average interest rate of 7.9% in connection with the acquisition
of properties. Each of the notes is individually secured by one of thirteen
properties with no cross-collateralization.
Equity Offerings
In 1999, the Company raised proceeds of $304.6 million in one public
offering and two direct placements of equity securities (excluding equity issued
in connection with the completion of the IPT merger discussed below and in
connection with the purchase of real estate and limited partnership interests).
These transactions are summarized below:
<TABLE>
<CAPTION>
NUMBER TOTAL PROCEEDS DIVIDEND OR
OF IN DISTRIBUTION
TRANSACTION TYPE DATE SHARES MILLIONS RATE
- ----------- ---- ---- --------- -------------- ------------
<S> <C> <C> <C> <C> <C>
Class K Convertible Cumulative
Preferred Stock of AIMCO........... Public Feb. 1999 5,000,000 $125.0 (1)
Class L Convertible Cumulative
Preferred Stock of AIMCO........... Direct May 1999 5,000,000 125.0 (2)
Class A Common Stock of AIMCO........ Direct Sept. 1999 1,382,580 54.6
------
TOTAL PROCEEDS 1999................................................... $304.6
======
</TABLE>
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(1) For three years from the date of original issuance, the Class K Preferred
Stock dividend will be in an amount per share equal to the greater of (i)
$2.00 per year (equivalent to 8% of the liquidation preference), or (ii) the
cash dividends payable on the number of shares of Class A Common Stock (or
portion thereof) into which a share of Class K Preferred Stock is
convertible. Beginning with the third anniversary of the date of original
issuance, the Class K Preferred Stock dividend per share will be increased
to the greater of (i) $2.50 per year (equivalent to 10% of the liquidation
preference), or (ii) the cash dividends payable on the number of shares of
Class A Common Stock (or portion thereof) into which a share of Class K
Preferred Stock is convertible.
(2) For three years from the date of original issuance, the Class L Preferred
Stock dividend will be in an amount per share equal to the greater of (i)
$2.025 per year (equivalent to 8.1% of the liquidation preference), or (ii)
the cash dividends payable on the number of shares of Class A Common Stock
into which a share of Class L Preferred Stock is convertible. Beginning with
the third anniversary of the date of original issuance, the holder of Class
L Preferred Stock will be entitled to receive an amount per share equal to
the greater of (i) $2.50 per year (equivalent to 10% of the liquidation
preference), or (ii) the cash dividends payable on the number of shares of
Class A Common Stock into which a share of Class L Preferred Stock is
convertible.
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Insignia Properties Trust Merger
As a result of the Insignia merger on October 1, 1998, AIMCO acquired
approximately 51% of the outstanding shares of beneficial interest of IPT. On
February 26, 1999, IPT was merged into AIMCO. Pursuant to the merger, each of
the outstanding shares of IPT that were not held by AIMCO were converted into
the right to receive 0.3601 shares of AIMCO Class A Common Stock, resulting in
the issuance of approximately 4.3 million shares of AIMCO Class A Common Stock
(valued at approximately $158.8 million).
Pending Acquisitions
In the ordinary course of business, the Company engages in discussions and
negotiations regarding the acquisition of apartment properties (including
interests in entities that own apartment properties). The Company frequently
enters into contracts and non-binding letters of intent with respect to the
purchase of properties. These contracts are typically subject to certain
conditions and permit the Company to terminate the contract in its sole and
absolute discretion if it is not satisfied with the results of its due diligence
investigation of the properties. The Company believes that such contracts
essentially result in the creation of an option on the subject properties and
give the Company greater flexibility in seeking to acquire properties. As of
February 29, 2000, the Company had under contract or letter of intent an
aggregate of 10 multi-family apartment properties with a maximum aggregate
purchase price of $107.6 million, including estimated capital improvements,
which, in some cases, may be paid in the form of assumption of existing debt.
All such contracts are subject to termination by the Company as described above.
No assurance can be given that any of these possible acquisitions will be
completed or, if completed, that they will be accretive on a per share basis.
FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
The Company operates in one industry segment, the ownership and management
of real estate properties. See the consolidated financial statements and notes
thereto included elsewhere in this Annual Report on Form 10-K for financial
information relating to the Company.
OPERATING AND FINANCIAL STRATEGIES
The Company strives to meet its objective of providing long-term,
predictable funds from operations ("FFO") per share of Class A Common Stock,
less an allowance for Capital Replacements of $300 per apartment unit, by
implementing its operating and financing strategies which include the following:
- Acquisition of Properties at Less Than Replacement Cost. AIMCO attempts
to acquire properties at a significant discount to their replacement
cost.
- Geographic Diversification. AIMCO operates in 48 states, the District of
Columbia and Puerto Rico. This geographic diversification insulates the
Company, to some degree, from inevitable downturns in any one market.
AIMCO's net income before depreciation and interest expense is earned in
more than 175 local markets. In 1999, the largest single market
contributed 7% to net income before depreciation and interest expense,
and the five largest markets contributed 32%.
- Market Growth. The Company seeks to operate in markets where population
and employment growth are expected to exceed the national average and
where it believes it can become a regionally significant owner or manager
of properties. For the period from 1997 through 2000, annual population
and employment growth rates in AIMCO's five largest regional markets are
forecasted to be 2.2% and 3.6%, respectively.
- Product Diversification. The Company's portfolio of apartment properties
spans a wide range of apartment community types, both within and among
markets, including garden and high-rise apartments, as well as corporate
and student housing.
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- Capital Replacement. AIMCO believes that the physical condition and
amenities of its apartment communities are important factors in its
ability to maintain and increase rental rates. The Company allocates
approximately $300 annually per owned apartment unit for capital
replacements, and reserves unexpended amounts for future capital
replacements.
- Debt Financing. AIMCO's strategy is generally to incur debt to increase
its return on equity while maintaining acceptable interest coverage
ratios. AIMCO seeks to maintain a ratio of free cash flow to combined
interest expense and preferred stock dividends of between 2:1 and 3:1,
and a ratio of earnings before interest, income taxes, depreciation and
amortization (with certain adjustments and after a provision of
approximately $300 per owned apartment unit) to debt service of at least
2:1, and to match debt maturities to the character of the assets
financed. For the year ended December 31, 1999, the Company was within
these targets. The Company uses predominantly long-term, fixed-rate and
self-amortizing non-recourse debt in order to avoid the refunding or
repricing risks of short-term borrowings. The Company uses short-term
debt financing to fund acquisitions and generally expects to refinance
such borrowings with proceeds from equity offerings or long-term debt
financings. As of December 31, 1999, approximately 9% of AIMCO's
outstanding debt was short-term debt and 91% was long-term debt.
- Dispositions. The Company regularly sells properties that do not meet its
return on investment criteria or that are located in areas where AIMCO
does not believe that the long-term neighborhood values justify the
continued investment in the properties.
- Dividend Policy. AIMCO pays dividends on its Class A Common Stock to
share its profitability with its stockholders. The Company distributed
61.3%, 65.8% and 66.5% of FFO to holders of Class A Common Stock for the
years ended December 31, 1999, 1998 and 1997, respectively. It is the
present policy of the Board of Directors to increase the dividend
annually in an amount equal to one-half of the projected increase in FFO,
adjusted for capital replacements, subject to minimum distribution
requirements to maintain its REIT status.
GROWTH STRATEGIES
The Company seeks growth through two primary sources -- internal expansion
and acquisitions.
Internal Growth Strategies.
The Company pursues internal growth primarily through the following
strategies:
- Revenue Increases. The Company increases rents where feasible and seeks
to improve occupancy rates.
- Controlling Expenses. Cost reductions are accomplished by local focus on
the regional operating center level and by exploiting economies of scale.
As a result of the size of its portfolio and its creation of regional
concentrations of properties, the Company has the ability to leverage
fixed costs for general and administrative expenditures and certain
operating functions, such as insurance, information technology and
training, over a large property base.
- Redevelopment of Properties. The Company believes redevelopment of
selected properties in superior locations provides advantages over
development of new properties. AIMCO believes that redevelopment
generally allows the Company to maintain rents comparable to new
properties and, compared to development of new properties, can be
accomplished with relatively lower financial risk, in less time and with
reduced delays due to governmental regulation.
- Expansion of Properties. The Company believes that expansion within or
adjacent to properties already owned or managed by the Company also
provides growth opportunities at lower risk than new development. Such
expansion can offer cost advantages to the extent common area amenities
and on-site management personnel can service the property expansions.
AIMCO's current policy is to limit redevelopments and expansions to 10%
of total equity market capitalization.
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- Ancillary Services. The Company believes that its ownership and
management of properties provides it with unique access to a customer
base that allows us to provide additional services and thereby increase
occupancy, increase rents and generate incremental revenue. The Company
currently provides cable television, telephone services, appliance
rental, and carport, garage and storage space rental at certain
properties.
Acquisition Strategies.
The Company believes its acquisition strategies will increase profitability
and predictability of earnings by increasing its geographic diversification,
economies of scale and opportunities to provide ancillary services to tenants at
its properties. Since AIMCO's initial public offering in July 1994, the Company
has completed numerous acquisition and management transactions, expanding its
portfolio of owned or managed properties from 132 apartment properties with
29,343 units to 1,942 apartment properties with 363,462 units as of December 31,
1999. The Company acquires additional properties primarily in three ways:
- Direct Acquisitions. AIMCO may directly, including through mergers and
other business combinations, acquire individual properties or portfolios
of properties and controlling interests in entities that own or control
such properties or portfolios. To date, a significant portion of AIMCO's
growth has resulted from the acquisition of other companies that owned or
controlled properties.
- Acquisition of Managed Properties. AIMCO believes that its property
management operations support its acquisition activities. Since AIMCO's
initial public offering, the Company has acquired from its managed
portfolio 16 properties comprising 5,697 units for total consideration of
$189.9 million.
- Increasing its Interest in Partnerships. For properties where AIMCO owns
a general partnership interest in the property-owning partnership, the
Company may seek to acquire, subject to its fiduciary duties, the
interests in the partnership held by third parties for cash or, in some
cases, in exchange for OP Units. AIMCO has completed tender offers with
respect to approximately 1,000 partnerships and has purchased additional
interests in such partnerships for cash and for OP Units.
PROPERTY MANAGEMENT STRATEGIES
AIMCO seeks to improve the operating results from its property management
business by, among other methods, combining centralized financial control and
uniform operating procedures with localized property management decision-making
and market knowledge. AIMCO's management operations are organized into 31
regional operating centers. Each of the regional operating centers is supervised
by a Regional Vice-President.
TAXATION OF THE COMPANY
The Company has elected to be taxed as a REIT under the Internal Revenue
Code of 1986, as amended, commencing with its taxable year ended December 31,
1994, and the Company intends to continue to operate in such a manner. The
Company's current and continuing qualification as a REIT depends on its ability
to meet the various requirements imposed by the Internal Revenue Code, through
actual operating results, distribution levels and diversity of stock ownership.
If the Company qualifies for taxation as a REIT, it will generally not be
subject to U.S. federal corporate income tax on its net income that is currently
distributed to stockholders. This treatment substantially eliminates the "double
taxation" (at the corporate and stockholder levels) that generally results from
investment in a corporation. If the Company fails to qualify as a REIT in any
taxable year, its taxable income will be subject to U.S. federal income tax at
regular corporate rates (including any applicable alternative minimum tax). Even
if the Company qualifies as a REIT, it may be subject to certain state and local
income taxes and to U.S. federal income and excise taxes on its undistributed
income.
If in any taxable year the Company fails to qualify as a REIT and incurs
additional tax liability, the Company may need to borrow funds or liquidate
certain investments in order to pay the applicable tax and the
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Company would not be compelled to make distributions under the Code. Unless
entitled to relief under certain statutory provisions, the Company would also be
disqualified from treatment as a REIT for the four taxable years following the
year during which qualification is lost. Although the Company currently intends
to operate in a manner designed to qualify as a REIT, it is possible that future
economic, market, legal, tax or other considerations may cause the Company to
fail to qualify as a REIT or may cause the Board of Directors to revoke the REIT
election.
The Company and its stockholders may be subject to state or local taxation
in various state or local jurisdictions, including those in which it or they
transact business or reside. The state and local tax treatment of the Company
and its stockholders may not conform to the U.S. federal income tax treatment.
COMPETITION
There are numerous housing alternatives that compete with the Company's
properties in attracting residents. The Company's properties compete directly
with other multi-family rental apartments and single family homes that are
available for rent or purchase in the markets in which the Company's properties
are located. The Company's properties also compete for residents with new and
existing and condominiums. The number of competitive properties in a particular
area could have a material effect on the Company's ability to lease apartment
units at its properties and on the rents charged. The Company competes with
numerous real estate companies in acquiring, developing and managing
multi-family apartment properties and seeking tenants to occupy its properties.
In addition, the Company competes with numerous property management companies in
the markets where the properties managed by the Company are located.
REGULATION
General
Multifamily apartment properties are subject to various laws, ordinances
and regulations, including regulations relating to recreational facilities such
as swimming pools, activity centers and other common areas. Changes in laws
increasing the potential liability for environmental conditions existing on
properties or increasing the restrictions on discharges or other conditions, as
well as changes in laws affecting development, construction and safety
requirements, may result in significant unanticipated expenditures, which would
adversely affect the Company's cash flows from operating activities. In
addition, future enactment of rent control or rent stabilization laws or other
laws regulating multi-family housing may reduce rental revenue or increase
operating costs in particular markets.
Laws Benefiting Disabled Persons
Under the Americans with Disabilities Act of 1990, all places of public
accommodation are required to meet certain Federal requirements related to
access and use by disabled persons. These requirements became effective in 1992.
A number of additional Federal, state and local laws may also require
modifications to the Company's properties, or restrict certain further
renovations of the properties, with respect to access thereto by disabled
persons. For example, the Fair Housing Amendments Act of 1988 requires apartment
properties first occupied after March 13, 1990 to be accessible to the
handicapped. Noncompliance with these laws could result in the imposition of
fines or an award of damages to private litigants and also could result in an
order to correct any non-complying feature, which could result in substantial
capital expenditures. Although the Company believes that its properties are
substantially in compliance with present requirements, it may incur
unanticipated expenses to comply with these laws.
Regulation of Affordable Housing
As of December 31, 1999, the Company owned or controlled 27 properties and
held an equity interest in 434 properties with a combined weighted average
ownership percentage of 24%. AIMCO also managed for third parties and affiliates
477 properties that benefit from governmental programs intended to provide
housing to people with low or moderate incomes. These programs, which are
usually administered by the United States Department of Housing and Urban
Development ("HUD") or state housing finance agencies, typically
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provide mortgage insurance, favorable financing terms or rental assistance
payments to the property owners. As a condition to the receipt of assistance
under these programs, the properties must comply with various requirements,
which typically limit rents to pre-approved amounts. If permitted rents on a
property are insufficient to cover costs, a sale of the property may become
necessary, which could result in a loss of management fee revenue. The Company
must obtain the approval of HUD in order to manage, or acquire a significant
interest in, a HUD-assisted or HUD-insured property. This approval process is
commonly referred to as "2530 Clearance." The Company had three unresolved flags
in the 2530 system as of December 31, 1999, which the Company believes will not
have a material effect on its ability to receive 2530 approval. The Company can
make no assurance, however, that it will always receive such approval.
Environmental
The Company is subject to various Federal, state and local laws that impose
liability on property owners or operators for the costs of removal or
remediation of certain hazardous substances present on a property. Such laws
often impose liability without regard to whether the owner or operator knew of,
or was responsible for, the release of the hazardous substances. The presence
of, or the failure to properly remediate, hazardous substances may adversely
affect occupancy at contaminated apartment communities and our ability to sell
or borrow against contaminated properties. In addition to the costs associated
with investigation and remediation actions brought by governmental agencies, the
presence of hazardous wastes on a property could result in personal injury or
similar claims by private plaintiffs. The Company also is subject to various
laws that impose liability for the cost of removal or remediation of hazardous
substances at a disposal or treatment facility. Anyone who arranges for the
disposal or treatment of hazardous or toxic substances is potentially liable
under such laws. These laws often impose liability whether or not the person
arranging for the disposal ever owned or operated the disposal facility. In
connection with the ownership, operation and management of our properties, we
could potentially be liable for environmental liabilities or costs associated
with our properties or properties we may acquire or manage in the future.
INSURANCE
Management believes that the Company's properties are covered by adequate
fire, flood and property insurance provided by reputable companies and with
commercially reasonable deductibles and limits.
EMPLOYEES
The Company has a staff of employees performing various acquisition,
redevelopment and management functions. The Company, through the AIMCO operating
partnership and the management companies, has approximately 12,500 employees,
most of whom are employed at the property level. None of the employees are
represented by a union, and the Company has never experienced a work stoppage.
The Company believes it maintains satisfactory relations with its employees.
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ITEM 2. PROPERTIES.
The Company's properties are located in 48 states, Puerto Rico and the
District of Columbia. The properties are managed by four Division
Vice-Presidents controlling 31 regional operating centers. The following table
sets forth information for the regional operating centers as of December 31,
1999:
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF
REGIONAL OPERATING CENTER DIVISION PROPERTIES UNITS
- ------------------------- -------- ---------- ---------
<S> <C> <C> <C>
Chicago, IL.......................................... Far West 57 10,761
Denver, CO........................................... Far West 84 14,279
Kansas City, MO...................................... Far West 72 11,094
Los Angeles, CA...................................... Far West 53 9,505
Oakland, CA.......................................... Far West 69 8,013
Phoenix, AZ.......................................... Far West 52 13,008
----- -------
387 66,660
----- -------
Allentown, PA........................................ East 116 9,693
Columbia, SC......................................... East 73 13,767
Greenville, SC....................................... East 86 12,016
Philadelphia, PA..................................... East 62 19,512
Rockville, MD........................................ East 62 16,881
Tarrytown, NY........................................ East 67 9,413
----- -------
466 81,282
----- -------
Atlanta, GA.......................................... Southeast 56 11,066
Boca Raton, FL....................................... Southeast 25 6,083
Miami, FL............................................ Southeast 32 7,400
Mobile, AL........................................... Southeast 60 9,893
Nashville, TN........................................ Southeast 58 10,720
Orlando, FL.......................................... Southeast 48 10,444
Tampa, FL............................................ Southeast 56 12,921
----- -------
335 68,527
----- -------
Austin, TX........................................... West 54 10,202
Columbus, OH......................................... West 62 12,426
Dallas I, TX......................................... West 58 10,989
Dallas II, TX........................................ West 68 13,281
Houston I, TX........................................ West 47 10,290
Houston II, TX....................................... West 48 12,062
Indianapolis, IN..................................... West 51 13,741
----- -------
388 82,991
----- -------
Portfolio:
Senior Living Sub ROC 1.............................. Oxford 8 1,637
Affordable Midwest................................... Oxford 42 5,409
Conventional Mideast................................. Oxford 32 8,289
Conventional Midwest................................. Oxford 45 10,725
Conventional South................................... Oxford 38 10,337
----- -------
165 36,397
----- -------
Other................................................ 201 27,605
----- -------
1,942 363,462
===== =======
</TABLE>
At December 31, 1999, the Company owned or controlled 373 properties
containing 106,148 units. These owned or controlled properties contain, on
average, 285 apartment units, with the largest property containing 2,113
apartment units. These properties offer residents a range of amenities,
including swimming pools,
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clubhouses, spas, fitness centers, tennis courts and saunas. Many of the
apartment units offer design and appliance features such as vaulted ceilings,
fireplaces, washer and dryer hook-ups, cable television, balconies and patios.
In addition, at December 31, 1999, the Company held an equity interest in 751
properties containing 133,113 units, and managed 818 other properties containing
124,201 units. The Company's total portfolio of 1,942 properties contain, on
average, 187 apartment units, with the largest property containing 2,907
apartment units.
Substantially all of the properties owned or controlled by the Company are
encumbered by mortgage indebtedness or serve as collateral for the Company's
indebtedness. At December 31, 1999, the Company had aggregate mortgage
indebtedness totaling $2,375.1 million, which was secured by 361 properties with
a combined net book value of $4,028.8 million, having an aggregate weighted
average interest rate of 6.66%. As of December 31, 1999, approximately 9% of
AIMCO's outstanding debt was short-term debt and 91% was long-term debt. See the
financial statements included elsewhere in this Annual Report on Form 10-K for
additional information about the Company's indebtedness.
ITEM 3. LEGAL PROCEEDINGS.
General
The Company is a party to various legal actions resulting from its
operating activities. These actions are routine litigation and administrative
proceedings arising in the ordinary course of business, some of which are
covered by liability issuance, and none of which are expected to have a material
adverse effect on the consolidated financial condition or results of operations
of the Company.
Limited Partnerships
In connection with the Company's offers to purchase interests in limited
partnerships that own properties, the Company and its affiliates are sometimes
subject to legal actions, including allegations that such activities may involve
breaches of fiduciary duties to the limited partners of such partnerships or
violations of the relevant partnership agreements. The Company believes it
complies with its fiduciary obligations and relevant partnership agreements, and
does not expect such legal actions to have a material adverse effect on the
consolidated financial condition or results of operations of the Company and its
subsidiaries taken as a whole. The Company may incur costs in connection with
the defense or settlement of such litigation, which could adversely affect the
Company's desire or ability to complete certain transactions and thereby have a
material adverse effect on the Company and its subsidiaries.
Pending Investigations of HUD Management Arrangements
In 1997, NHP received subpoenas from the HUD Inspector General ("IG")
requesting documents relating to arrangements whereby NHP or any of its
affiliates provides compensation to owners of HUD-assisted or HUD-insured
multi-family projects in exchange for or in connection with property management
of a HUD project. In July 1999, NHP received a grand jury subpoena requesting
documents relating to the same subject matter as the HUD IG subpoenas and NHP's
operation of a group purchasing program created by NHP, known as Buyers Access.
To date, neither the HUD IG nor the grand jury has initiated any action against
NHP or AIMCO or, to NHP's or AIMCO's knowledge, any owner of a HUD property
managed by NHP. AIMCO believes that NHP's operations and programs are in
compliance, in all material respects, with all laws, rules and regulations
relating to HUD-assisted or HUD-insured properties. AIMCO is cooperating with
the investigations and does not believe that the investigations will result in a
material adverse impact on its operations. However, as with any similar
investigation, there can be no assurance that these will not result in material
fines, penalties or other costs.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
10
<PAGE> 12
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
AIMCO's Class A Common Stock has been listed and traded on the NYSE under
the symbol "AIV" since July 22, 1994. The following table sets forth the
quarterly high and low sales prices of the Class A Common Stock, as reported on
the NYSE, and the dividends paid by the Company for the periods indicated.
<TABLE>
<CAPTION>
DIVIDENDS
PAID
QUARTER ENDED HIGH LOW (PER SHARE)
- ------------- ---- --- -----------
<S> <C> <C> <C>
1997
March 31, 1997....................................... 30 1/2 25 1/2 0.4625
June 30, 1997........................................ 29 3/4 26 0.4625
September 30, 1997................................... 36 3/16 28 1/8 0.4625
December 31, 1997.................................... 38 32 0.4625
1998
March 31, 1998....................................... 38 9/16 34 1/4 0.5625
June 30, 1998........................................ 39 7/8 36 1/2 0.5625
September 30, 1998................................... 41 31 0.5625
December 31, 1998.................................... 37 3/8 30 0.5625
1999
March 31, 1999....................................... 41 5/8 35 0.625
June 30, 1999........................................ 44 1/16 35 5/16 0.625
September 30, 1999................................... 42 5/8 37 5/16 0.625
December 31, 1999.................................... 40 3/16 34 1/16 0.625
2000
March 31, 2000 (through March 8, 2000)............... 39 11/16 36 5/8 0.70(1)
</TABLE>
- ---------------
(1) On January 19, 2000, the Company's Board of Directors declared a cash
dividend of $0.70 per share of Class A Common Stock, paid on February 11,
2000 to stockholders of record on February 4, 2000.
On March 8, 2000, there were 67,109,473 shares of Class A Common Stock
outstanding, held by 2,627 stockholders of record.
AIMCO, as a REIT, is required to distribute annually to holders of common
stock at least 95% of its "real estate investment trust taxable income," which,
as defined by the Internal Revenue Code and Treasury regulations, is generally
equivalent to net taxable ordinary income. AIMCO measures its economic
profitability and intends to pay regular dividends to its stockholders based on
FFO during the relevant period. However, the future payment of dividends by
AIMCO will be at the discretion of the Board of Directors and will depend on
numerous factors including AIMCO's financial condition, its capital
requirements, the annual distribution requirements under the provisions of the
Internal Revenue Code applicable to REITs and such other factors as the Board of
Directors deems relevant.
From time to time, AIMCO issues shares of Class A Common Stock in exchange
for OP Units tendered to the AIMCO operating partnership for redemption in
accordance with the terms and provisions of the agreement of limited partnership
of the AIMCO operating partnership. Such shares are issued based on an exchange
ratio of one share for each OP Unit. The shares are issued in exchange for OP
Units in private transactions exempt from registration under the Securities Act
of 1933, as amended (the "Securities Act"), pursuant to Section 4(2) thereof.
During 1999, a total of 963,951 shares of Class A Common Stock were issued in
exchange for OP Units.
On September 15, 1999, AIMCO completed a direct placement of 1,382,580
shares of Class A Common Stock at a net price of $39.50 per share to five
institutional investors. The net proceeds of approximately $54.6 million were
used to repay outstanding indebtedness under the Company's credit facility.
11
<PAGE> 13
During 1999, the Company repurchased 205,300 shares of Class A Common Stock
at a net price of $8.0 million.
ITEM 6. SELECTED FINANCIAL DATA
The following historical selected financial data for AIMCO is based on
audited financial statements. This information should be read in conjunction
with such financial statements, including the notes thereto, and "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
included herein.
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
----------------------------------------------------------
1999 1998 1997 1996 1995
---------- ---------- ---------- -------- --------
<S> <C> <C> <C> <C> <C>
OPERATING DATA:
RENTAL PROPERTY OPERATIONS:
Rental and other income................................... $ 533,917 $ 377,139 $ 193,006 $100,516 $ 74,947
Property operating expenses............................... (214,693) (147,541) (76,168) (38,400) (30,150)
Owned property management expenses........................ (15,429) (11,013) (6,620) (2,746) (2,276)
Depreciation.............................................. (131,753) (84,635) (37,741) (19,556) (15,038)
---------- ---------- ---------- -------- --------
Income from property operations........................... 172,042 133,950 72,477 39,814 27,483
---------- ---------- ---------- -------- --------
SERVICE COMPANY BUSINESS:
Management fees and other income.......................... 43,455 24,103 13,937 8,367 8,132
Management and other expenses............................. (25,470) (16,960) (10,961) (6,150) (5,731)
---------- ---------- ---------- -------- --------
Income from service company business...................... 17,985 7,143 2,976 2,217 2,401
---------- ---------- ---------- -------- --------
General and administrative expenses....................... (13,112) (13,568) (5,396) (1,512) (1,804)
Interest expense.......................................... (140,094) (89,424) (51,385) (24,802) (13,322)
Interest income........................................... 62,721 29,368 8,676 523 658
Equity in losses of unconsolidated real estate
partnerships............................................ (4,467) (4,854) (1,798) -- --
Equity in earnings (losses) of unconsolidated
subsidiaries............................................ (2,818) 11,570 4,636 -- --
Minority interest in other entities....................... (900) (468) 1,008 (111) --
Amortization.............................................. (5,860) (8,735) (948) (500) (428)
---------- ---------- ---------- -------- --------
Income from operations.................................... 85,497 64,982 30,246 15,629 14,988
Gain (loss) on disposition of properties.................. (1,785) 4,674 2,720 44 --
---------- ---------- ---------- -------- --------
Income before extraordinary item and minority interest in
operating partnership................................... 83,712 69,656 32,966 15,673 14,988
Extraordinary item -- early extinguishment of debt........ -- -- (269) -- --
---------- ---------- ---------- -------- --------
Income before minority interest in operating
partnership............................................. 83,712 69,656 32,697 15,673 14,988
Minority interest in operating partnership................ (2,753) (5,182) (4,064) (2,689) (1,613)
---------- ---------- ---------- -------- --------
Net income................................................ $ 80,959 $ 64,474 $ 28,633 $ 12,984 $ 13,375
========== ========== ========== ======== ========
OTHER INFORMATION:
Total owned or controlled properties (end of period)...... 373 242 147 94 56
Total owned or controlled apartment units (end of
period)................................................. 106,148 63,086 40,039 23,764 14,453
Total equity apartment units (end of period).............. 133,113 170,243 83,431 3,611 6,349
Units under management (end of period).................... 124,201 146,034 69,587 15,434 13,245
Basic earnings per common share........................... $ 0.39 $ 0.84 $ 1.09 $ 1.05 $ 0.86
Diluted earnings per common share......................... $ 0.38 $ 0.80 $ 1.08 $ 1.04 $ 0.86
Dividends paid per common share........................... $ 2.50 $ 2.25 $ 1.85 $ 1.70 $ 1.66
BALANCE SHEET INFORMATION:
Real estate, before accumulated depreciation.............. $4,508,535 $2,802,598 $1,657,207 $865,222 $477,162
Real estate, net of accumulated depreciation.............. 4,092,038 2,573,718 1,503,922 745,145 448,425
Total assets...................................... 5,684,951 4,248,800 2,100,510 827,673 480,361
Total indebtedness................................ 2,584,289 1,660,715 808,530 522,146 268,692
Company-obligated mandatory redeemable convertible
preferred securities of a subsidiary trust.............. 149,500 149,500 -- -- --
Stockholders' equity...................................... 2,262,828 1,902,564 1,045,300 215,749 169,032
</TABLE>
12
<PAGE> 14
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
OVERVIEW
The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements in certain circumstances. Certain
information included in this Report, the Company's Annual Report to Stockholders
and other filings (collectively "SEC Filings") under the Securities Act of 1933,
as amended, and the Securities Exchange Act of 1934, as amended (as well as
information communicated orally or in writing between the dates of such SEC
Filings) contains or may contain information that is forward looking, including,
without limitation, statements regarding the effect of acquisitions, the
Company's future financial performance and the effect of government regulations.
Actual results may differ materially from those described in the forward looking
statements and will be affected by a variety of risks and factors including,
without limitation, national and local economic conditions, the general level of
interest rates, terms of governmental regulations that affect the Company and
interpretations of those regulations, the competitive environment in which the
Company operates, financing risks, including the risk that the Company's cash
flows from operations may be insufficient to meet required payments of principal
and interest, real estate risks, including variations of real estate values and
the general economic climate in local markets and competition for tenants in
such markets, acquisition and development risks, including failure of such
acquisitions to perform in accordance with projections, and possible
environmental liabilities, including costs which may be incurred due to
necessary remediation of contamination of properties presently owned or
previously owned by the Company. In addition, the Company's continued
qualification as a real estate investment trust involves the application of
highly technical and complex provisions of the Internal Revenue Code. Readers
should carefully review the Company's financial statements and the notes
thereto, as well as the risk factors described in the SEC Filings.
The following discussion and analysis of the results of operations and
financial condition of the Company should be read in conjunction with the
financial statements incorporated by reference in Item 8 of this Annual Report
on Form 10-K. The following discussion of results of operations is based on net
income calculated under accounting principles generally accepted in the United
States. The Company, however, considers funds from operations, less a reserve
for capital replacements, to be a more meaningful measure of economic
performance.
RESULTS OF OPERATIONS
Comparison of the Year Ended December 31, 1999 to the Year Ended December 31,
1998
NET INCOME
The Company recognized net income of $81.0 million, and net income
attributable to common stockholders of $24.1 million, for the year ended
December 31, 1999, compared to net income and net income attributable to common
stockholders of $64.5 million and $37.9 million, respectively, for the year
ended December 31, 1998. Net income attributable to common stockholders
represents net income less dividends on preferred stock.
The increase in net income of $16.5 million, or 25.6%, was primarily the
result of the following:
- the increase in net "same store" property results;
- the acquisition of 22,459 units in 82 apartment communities during 1998;
- the acquisition of 12,721 units in 28 apartment communities during 1999;
- the acquisition of Ambassador Apartments, Inc. in May 1998 which impacted
the second half of 1998;
- the acquisition of the Insignia Multi-family Business in October 1998
which primarily impacted 1999;
- the completion of the Insignia Properties Trust Merger in February 1999;
- the purchase of $271 million in limited partnership interests from
unaffiliated third parties; and
- an increase in interest income on notes receivable from unconsolidated
real estate partnerships.
13
<PAGE> 15
The effect of the above on net income was partially offset by the sale of
eight properties in 1999 and five properties in 1998. These factors are
discussed in more detail in the following paragraphs.
Rental Property Operations
The increases in rental property operations resulted primarily from
improved same store sales results, acquisitions of properties in 1998 and 1999,
and through the purchase of limited partnership interests from unaffiliated
third parties which gave the Company a controlling interest in partnerships
owning 125 properties in 1999.
Rental and other property revenues from the Company's owned and controlled
properties totaled $533.9 million for the year ended December 31, 1999, compared
to $377.1 million for the year ended December 31, 1998, an increase of $156.8
million, or 41.6%.
Property operating expenses totaled $214.7 million for the year ended
December 31, 1999, compared to $147.5 million for the year ended December 31,
1998, an increase of $67.2 million, or 45.6%. Property operating expenses
consist of on-site payroll costs, utilities (net of reimbursements received from
tenants), contract services, turnover costs, repairs and maintenance,
advertising and marketing, property taxes and insurance.
Owned property management expenses, representing the costs of managing the
Company's owned or controlled properties, totaled $15.4 million for the year
ended December 31, 1999, compared to $11.0 million for the year ended December
31, 1998, an increase of $4.4 million, or 40.0%.
Service Company Business
Income from the service company business was $18.0 million for the year
ended December 31, 1999, compared to $7.1 million for the year ended December
31, 1998, an increase of $10.9 million or 153.5%. The increase was primarily due
to management contracts acquired in the Insignia and IPT mergers that are held
by the Company, as well as the transfer of majority-owned management contracts
from the unconsolidated management companies to the AIMCO operating partnership.
When the Company owns at least a 40% interest in a real estate partnership, the
management contract with that real estate partnership is assigned to the AIMCO
operating partnership increasing the amount of revenues recognized by the
consolidated service company operations.
General and Administrative Expenses
General and administrative expenses totaled $13.1 million for the year
ended December 31, 1999, compared to $13.6 million for the year ended December
31, 1998, a decrease of $0.5 million, or 3.7%. The decrease in general and
administrative expenses is primarily due to efforts to align expenses with the
revenues they help generate. The results of these efforts increased the amount
of expenses allocated to both consolidated and unconsolidated service company
management expenses.
Interest Expense
Interest expense, which includes the amortization of deferred finance
costs, totaled $140.1 million for the year ended December 31, 1999, compared to
$89.4 million for the year ended December 31, 1998, an increase of $50.7 million
or 56.7%. The increase was primarily due to interest expense incurred in
connection with 1999 and 1998 acquisitions, as well as the consolidation of an
additional 125 properties when control was obtained.
Interest Income
Interest income totaled $62.7 million for the year ended December 31, 1999,
compared to $29.4 million for the year ended December 31, 1998, an increase of
$33.3 million or 113.3%. The Company holds investments in notes receivable which
were either extended by the Company and are carried at the face amount plus
accrued interest ("par value notes") or were made by predecessors whose
positions have been acquired by the Company at a discount and are carried at the
acquisition amount using the cost recovery
14
<PAGE> 16
method ("discounted notes"). $32.5 million of the increase in interest income is
due to the recognition of interest income that had previously been deferred and
portions of the related discounts for certain discounted notes. Based upon
closed or pending transactions, market conditions, and improved operations of
the obligor, the collectibility of such notes is now believed to be probable and
the amounts and timing of collections are estimable. The remaining increase is
primarily related to other recurring interest earned on both the par value and
discounted notes made by the Company to partnerships in which the Company acts
as the general partner and interest earned on notes receivable acquired in the
mergers with Insignia and IPT.
Comparison of the Year Ended December 31, 1998 to the Year Ended December 31,
1997
NET INCOME
The Company recognized net income of $64.5 million, and net income
attributable to common stockholders of $37.9 million, for the year ended
December 31, 1998, compared to net income and net income attributable to common
stockholders of $28.6 million and $26.3 million, respectively, for the year
ended December 31, 1997. Net income attributable to common stockholders
represents net income less dividends on preferred stock.
The increase in net income of $35.9 million, or 125.5%, was primarily the
result of the following:
- the increase in net "same store" property results;
- the acquisition of 11,706 units in 44 apartment communities during 1997;
- the acquisition of 22,459 units in 82 apartment communities during 1998;
- the acquisition of NHP Incorporated ("NHP") in December 1997 which
impacted operations in 1998;
- the acquisition of Ambassador Apartments, Inc. in May 1998 which impacted
the second half of 1998;
- the acquisition of the Insignia Multi-family Business in October 1998
which impacted the last quarter of 1998; and
- an increase in interest income on notes receivable from unconsolidated
real estate partnerships.
The effect of the above on net income was partially offset by the sale of
five properties in 1998 and five properties in 1997. These factors are discussed
in more detail in the following paragraphs.
Rental Property Operations
The increases in rental property operations resulted primarily from
improved same store sale results, acquisitions of properties in 1997 and 1998,
and acquisitions of controlling interests in properties through the NHP,
Ambassador and Insignia mergers.
Rental and other property revenues from the Company's owned and controlled
properties totaled $377.1 million for the year ended December 31, 1998, compared
to $193.0 million for the year ended December 31, 1997, an increase of $184.1
million, or 95.4%.
Property operating expenses totaled $147.5 million for the year ended
December 31, 1998, compared to $76.2 million for the year ended December 31,
1997, an increase of $71.3 million, or 93.6%. Property operating expenses
consist of on-site payroll costs, utilities (net of reimbursements received from
tenants), contract services, turnover costs, repairs and maintenance,
advertising and marketing, property taxes and insurance.
Owned property management expenses, representing the costs of managing the
Company's owned or controlled properties, totaled $11.0 million for the year
ended December 31, 1998, compared to $6.6 million for the year ended December
31, 1997, an increase of $4.4 million, or 66.7%.
Service Company Business
Income from the service company business was $7.1 million for the year
ended December 31, 1998, compared to $3.0 million for the year ended December
31, 1997, an increase of $4.1 million or 136.7%. The increase was primarily due
to management contracts acquired in the Insignia merger that are held by the
15
<PAGE> 17
Company, as well as the transfer of majority-owned management contracts from the
management companies to the AIMCO operating partnership. When the Company owns
at least a 40% interest in a real estate partnership, the management contract
with that real estate partnership is assigned to the AIMCO operating partnership
increasing the amount of revenues recognized by the consolidated service company
operations.
General and Administrative Expenses
General and administrative expenses totaled $13.6 million for the year
ended December 31, 1998, compared to $5.4 million for the year ended December
31, 1997, an increase of $8.2 million, or 151.9%. The increase in general and
administrative expenses is primarily due to additional corporate costs and
additional employee salaries associated with the purchase of NHP Real Estate
Companies in June 1997 and the mergers with NHP Incorporated in December 1997,
Ambassador Apartments, Inc. in May 1998 and Insignia Financial Group, Inc. in
October 1998. In addition, due to the growth of the Company, several new
departments have been added including legal, tax and Limited Partnership
administration, as well as increased levels of personnel in the accounting and
finance departments.
Interest Expense
Interest expense, which includes the amortization of deferred finance
costs, totaled $89.4 million for the year ended December 31, 1998, compared to
$51.4 million for the year ended December 31, 1997, an increase of $38.0 million
or 73.9%. The increase was primarily due to interest expense incurred in
connection with the acquisition of interests in Ambassador Apartments, Inc. and
Insignia Financial Group, Inc. and interest expense incurred in connection with
1998 and 1997 acquisitions.
Interest Income
Interest income totaled $29.4 million for the year ended December 31, 1998,
compared to $8.7 million for the year ended December 31, 1997. The increase is
primarily due to interest earned on the increased average outstanding balances
of notes receivable from unconsolidated real estate partnerships and
subsidiaries.
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 1999, the Company had $101.6 million in cash and cash
equivalents and $84.6 million of restricted cash, primarily consisting of
reserves and impounds held by lenders for capital expenditures, property taxes
and insurance. In addition, cash, cash equivalents and restricted cash are held
by partnerships and subsidiaries which are not presented on a consolidated
basis. The Company's principal demands for liquidity include normal operating
activities, payments of principal and interest on outstanding debt, capital
improvements, acquisitions of and investments in properties, dividends paid to
stockholders and distributions paid to limited partners. The Company considers
its cash provided by operating activities to be adequate to meet short-term
liquidity demands.
In August 1999, the Company closed a $300 million revolving credit facility
arranged by Bank of America, N.A. BankBoston, N.A. and First Union National Bank
and comprised of a total of nine lender participants. The obligations under the
credit facility are secured by certain non-real estate assets of the Company.
The existing lines of credit were terminated. The credit facility is used for
general corporate purposes and has a two-year term with two one-year extensions.
The annual interest rate under the credit facility is based on either LIBOR or a
base rate which is the higher of Bank of America's reference rate or 0.5% over
the federal funds rate, plus, in either case, an applicable margin. The margin
ranges between 2.05% and 2.55%, in the case of LIBOR-based loans, and between
0.55% and 1.05%, in the case of base rate loans, based upon a fixed charge
coverage ratio. The weighted average interest rate at December 31, 1999 was
8.84%. The amount available under the credit facility at December 31, 1999 was
$90.8 million.
As of December 31, 1999, 96.8% of the Company's owned or controlled
properties and 45.4% of its total assets were encumbered by debt. The Company
had total outstanding indebtedness of $2,584.3 million, of which $2,375.1
million was secured by properties. The Company's indebtedness is comprised of
$1,954.3 million of secured long-term financing, $420.8 million of secured
tax-exempt bond financing and $209.2 in
16
<PAGE> 18
unsecured short-term financing. As of December 31, 1999, approximately 9% of the
Company's indebtedness bears interest at variable rates. General Motors
Acceptance Corporation has made 113 loans (the "GMAC Loans") to property owning
partnerships of the Company, each of which is secured by the property owned by
such partnership. The 113 GMAC Loans had an aggregate outstanding principal
balance of $570.1 million as of December 31, 1999. Certain GMAC Loans are
cross-collateralized with certain other GMAC Loans. Other than certain GMAC
Loans, none of the Company's debt is subject to cross-collateralization
provisions. The weighted average interest rate on the Company's secured,
long-term notes payable was 6.66% with a weighted average maturity of 12.8 years
as of December 31, 1999. At December 31, 1999, the weighted average interest
rate on the Company's unsecured short-term financing was 8.84%.
During the year ended December 31, 1999, the Company issued $410.3 million
of long-term fixed rate, fully amortizing notes payable with a weighted average
interest rate of 7.3%. Each of the notes is individually secured by one of forty
properties with no cross-collateralization. The Company used the net proceeds
after transaction costs of $373.6 million to repay existing debt. During the
year ended December 31, 1999, the Company has also assumed $110.1 million of
long-term fixed rate, fully amortizing notes payable with a weighted average
interest rate of 7.9% in connection with the acquisition of properties. Each of
the notes is individually secured by one of thirteen properties with no
cross-collateralization.
The Company expects to meet its long-term liquidity requirements, such as
refinancing debt and property acquisitions, through long-term borrowings, both
secured and unsecured, the issuance of debt or equity securities (including OP
Units) and cash generated from operations. In August 1998, AIMCO and the AIMCO
operating partnership filed a shelf registration statement with the Securities
and Exchange Commission ("SEC") with respect to an aggregate of $1,268 million
of debt and equity securities of AIMCO (of which $268 million was carried
forward from AIMCO's 1997 shelf registration statement) and $500 million of debt
securities of the AIMCO operating partnership. The registration statement was
declared effective by the SEC on December 10, 1998. As of December 31, 1999, the
Company had $1,088 million available and the AIMCO operating partnership had
$500 million available from this registration statement. The Company expects to
finance acquisition of real estate interests with cash from operations or the
issuance of equity securities and debt.
CAPITAL EXPENDITURES
For the year ended December 31, 1999, the Company spent a total of $291.7
million for capital expenditures on its portfolio of assets. The Company's share
of those expenditures for its conventional assets are as follows: $38.4 million
for capital replacements (expenditures for routine maintenance of a property);
$54.8 million for Initial Capital Expenditures ("ICE", expenditures at a
property that have been identified, at the time the property is acquired, as
expenditures to be incurred within one year of the acquisition); and $43.3
million for construction and capital enhancements (amenities that add a material
new feature or revenue source at a property). The expenditures for capital
replacements in 1999 exceeded the provision of $300 per apartment provided for
by the Company by $9.7 million which represents unspent capital replacements and
ICE from prior years. These expenditures were funded by net cash provided by
operating activities, working capital reserves, and borrowings under the
Company's credit facility. ICE and capital enhancements will primarily be funded
by cash from operating activities and borrowings under the Company's credit
facility.
17
<PAGE> 19
The Company's accounting treatment of various capital and maintenance costs
is detailed in the following table:
<TABLE>
<CAPTION>
DEPRECIABLE LIFE
EXPENDITURE ACCOUNTING TREATMENT IN YEARS
- ----------- -------------------- ----------------
<S> <C> <C>
Initial capital expenditures........................ capitalize 5 to 15
Capital enhancements................................ capitalize 5 to 30
Capital replacements:
Carpet/vinyl replacement............................ capitalize 5
Carpet cleaning..................................... expense N/A
Major appliance replacement (refrigerators, stoves,
dishwashers, washers/dryers)...................... capitalize 5
Cabinet replacement................................. capitalize 5
Major new landscaping............................... capitalize 5
Seasonal plantings and landscape replacements....... expense N/A
Roof replacements................................... capitalize 15
Roof repairs........................................ expense N/A
Model furniture..................................... capitalize 5
Office equipment.................................... capitalize 5
Exterior painting, significant...................... capitalize 5
Interior painting................................... expense N/A
Parking lot repairs................................. expense N/A
Parking lot repaving................................ capitalize 15
Equipment repairs................................... expense N/A
General policy for capitalization................... capitalize amounts Various
in excess of $ 250
</TABLE>
FUNDS FROM OPERATIONS
The Company measures its economic profitability based on funds from
operations ("FFO"), less a reserve for capital replacements of $300 per
apartment unit. The Company's management believes that FFO, less such a reserve,
provides investors with an understanding of the Company's ability to incur and
service debt and make capital expenditures. The Board of Governors of the
National Association of Real Estate Investment Trusts ("NAREIT") defines FFO as
net income (loss), computed in accordance with generally accepted accounting
principles ("GAAP"), excluding gains and losses from debt restructuring and
sales of property, plus real estate related depreciation and amortization
(excluding amortization of financing costs), and after adjustments for
unconsolidated partnerships and joint ventures. The Company calculates FFO based
on the NAREIT definition, as adjusted for minority interest in the AIMCO
operating partnership, amortization, the non-cash deferred portion of the income
tax provision for unconsolidated subsidiaries and less the payment of dividends
on preferred stock. FFO should not be considered an alternative to net income or
net cash flows from operating activities, as calculated in accordance with GAAP,
as an indication of the Company's performance or as a measure of liquidity. FFO
is not necessarily indicative of cash available to fund future cash needs. In
addition, there can be no assurance that the Company's basis for computing FFO
is comparable with that of other real estate investment trusts.
18
<PAGE> 20
For the years ended December 31, 1999, 1998 and 1997, the Company's FFO is
calculated as follows (amounts in thousands):
<TABLE>
<CAPTION>
1999 1998 1997
--------- --------- ---------
<S> <C> <C> <C>
Income before minority interest in operating
partnership.................................... $ 83,712 $ 69,656 $ 32,697
Extraordinary item............................... -- -- 269
(Gain) loss on disposition of properties......... 1,785 (4,674) (2,720)
Real estate depreciation, net of minority
interests...................................... 121,689 80,369 33,751
Real estate depreciation related to
unconsolidated entities........................ 104,764 34,840 9,864
Amortization..................................... 36,731 26,177 2,535
Deferred taxes................................... 1,763 9,215 4,894
TOPR's interest expense.......................... 4,858 -- --
Preferred stock dividends........................ (32,905) (20,701) (135)
Preferred OP Unit distributions.................. (1,038) (136) --
--------- --------- ---------
Funds From Operations (FFO)...................... $ 321,359 $ 194,746 $ 81,155
========= ========= =========
Weighted average number of common shares, common
Share equivalents and OP Units outstanding:
Common stock................................... 63,644 45,187 24,055
Common stock equivalents....................... 91 2,437 381
Preferred stock, OP Units, and other securities
convertible into common stock............... 8,625 2,463 1,006
OP Units....................................... 6,313 6,732 3,677
--------- --------- ---------
78,673 56,819 29,119
========= ========= =========
CASH FLOW INFORMATION:
Cash flow provided by operating activities....... $ 253,257 $ 148,414 $ 73,032
Cash flow used in investing activities........... (281,106) (328,321) (717,663)
Cash flow provided by financing activities....... 58,148 214,124 668,549
</TABLE>
CONTRIBUTION TO FREE CASH FLOW
The Company seeks to improve funds from operations, less a reserve for
capital replacements, on a per share basis. In this regard, in addition to the
year-to-year comparative discussion, the Company has provided disclosure (see
Footnote 23 in the accompanying Notes to Consolidated Financial Statements) on
the contribution (separated between consolidated and unconsolidated activity) to
the Company's free cash flow from several components of the Company and a
reconciliation of free cash flow to FFO, less a reserve for capital
replacements, and to net income for the year ended December 31, 1999. The
Company defines free cash flow as FFO, less a reserve for capital replacements,
plus interest expense and preferred stock dividends.
The contributors to the Company's free cash flow of $528 million were real
estate -- $421 million (80%), service businesses -- $51 million (10%), recurring
interest income -- $32 million (6%) and transactions (fees and recovery of loan
discounts) -- $37 million (7%), less general and administrative expenses -- $13
million (3%).
Expenses to arrive at FFO, less a reserve for capital replacements, were
interest expense -- $201 million, and preferred stock and preferred OP unit
dividends -- $34 million. This results in FFO, less a reserve for capital
replacements, of $293 million of which $180 million (62%) is from consolidated
activities and $113 million (38%) is from unconsolidated activities.
The real estate free cash flow contribution of $443 million before a $22
million minority interest deduction is concentrated in conventional apartment
properties, which comprise $389 million or 88% of the real estate free cash flow
contribution. Conventional apartments with rents of $500 per month or higher
comprise $332 million or 85% of the real estate free cash flow contribution from
conventional units. Conventional apartments with rents of $600 per month or
higher comprise $222 million or 57% of the real estate free cash flow
contribution from conventional units. Overall, the Company has balanced
contributions to conventional real estate free cash flow from monthly rents of
less than $500 per unit to monthly rents greater than $800 per unit.
19
<PAGE> 21
Contributions to conventional real estate free cash flow for 1999 were as
follows:
<TABLE>
<CAPTION>
TOTAL CONTR. %
-------- --------
<S> <C> <C>
Average monthly rent greater than $800 per unit............. $ 78,100 21%
Average monthly rent $700 to $800 per unit.................. 57,627 15%
Average monthly rent $600 to $700 per unit.................. 86,133 22%
Average monthly rent $500 to $600 per unit.................. 110,499 28%
Average monthly rent $500 per unit.......................... 56,385 14%
-------- ---
$388,744 100%
======== ===
</TABLE>
The service businesses contributed $51 million (10%) to free cash flow. The
service businesses provide management services to properties and partnerships
and includes Buyers Access, the nation's largest group purchasing organization
serving the apartment industry. Management contracts contribute $47 million
(92%) to the service businesses contribution. $36 million (75%) of the
management contract contribution is derived from properties the Company controls
through economic ownership or its general partner position. $10 million (22%) of
the management contract contribution is from long-term management contracts.
Less than $1 million is contributed from short-term third party management
contracts (30 day cancelable). Buyer's Access contributed $3 million or 6% to
the service businesses contribution.
The Company received recurring interest income from par value notes and
other receivables and interest bearing accounts of $32 million (50% of total
interest income in 1999). In addition, the Company has realized interest income
from recoveries of notes receivable that were acquired at a discount to actual
face value. As the Company improved property operations, some of these notes
have become collectible. In 1999, the Company recognized $32 million (50% of
total interest income) in recoveries from notes purchased at a discount.
Fees contributed $5 million (1%) to free cash flow contribution. Fees are
earned in partnership sales and financing transactions. The Company considers
fees and interest income from notes purchased at a discount as transactional.
Together, the transactional contribution was $37 million (7%) of free cash flows
contribution.
Footnote 23 in the accompanying Notes to Consolidated Financial Statements
provides additional detail on each component of free cash flow. We believe this
disclosure is complementary to the previous year-to-year results of operations
comparisons.
CONTINGENCIES
Pending Investigations of HUD Management Arrangements
In 1997, NHP received subpoenas from the HUD Inspector General ("IG")
requesting documents relating to arrangements whereby NHP or any of its
affiliates provides compensation to owners of HUD-assisted or HUD-insured
multi-family projects in exchange for or in connection with property management
of a HUD project. In July 1999, NHP received a grand jury subpoena requesting
documents relating to the same subject matter as the HUD IG subpoenas and NHP's
operation of a group purchasing program created by NHP, known as Buyers Access.
To date, neither the HUD IG nor the grand jury has initiated any action against
NHP or AIMCO or, to NHP's or AIMCO's knowledge, any owner of a HUD property
managed by NHP. AIMCO believes that NHP's operations and programs are in
compliance, in all material respects, with all laws, rules and regulations
relating to HUD-assisted or HUD-insured properties. AIMCO is cooperating with
the investigations and does not believe that the investigations will result in a
material adverse impact on its operations. However, as with any similar
investigation, there can be no assurance that these will not result in material
fines, penalties or other costs.
INFLATION
Substantially all of the leases at the Company's apartment properties are
for a period of twelve months or less, allowing, at the time of renewal, for
adjustments in the rental rate and the opportunity to re-lease the apartment
unit at the prevailing market rate. The short term nature of these leases
generally serves to
20
<PAGE> 22
minimize the risk to the Company of the adverse effect of inflation and the
Company does not believe that inflation has had a material adverse impact on its
revenues.
ITEM 7a. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company's primary market risk exposure relates to changes in interest
rates. The Company is not subject to any foreign currency exchange rate risk or
commodity price risk, or any other material market rate or price risks. The
Company uses predominantly long-term, fixed-rate and self-amortizing
non-recourse mortgage debt in order to avoid the refunding or repricing risks of
short-term borrowings. The Company uses short-term debt financing and working
capital primarily to fund acquisitions and generally expects to refinance such
borrowings with proceeds from operating activities, equity offerings or
long-term debt financings.
The Company had $240.9 million of variable rate debt outstanding at
December 31, 1999, which represents 9% of the Company's total outstanding debt.
Based on this level of debt, an increase in interest rates of 1% would result in
the Company's income and cash flows being reduced by $2.4 million on an annual
basis. At December 31, 1999, the Company had $2,343.4 million of fixed rate debt
outstanding. The partnership debt secured by individual properties in an
aggregate amount of $51.8 million, $92.7 million, $66.9 million, $139.7 million
and $205.7 million will mature in the years 2000, 2001, 2002, 2003 and 2004,
respectively.
The estimated aggregate fair value of the Company's cash and cash
equivalents, receivables, payables and short-term unsecured debt as of December
31, 1999 is assumed to approximate their carrying value due to their relatively
short terms. Management further believes that the fair market value of the
Company's secured tax-exempt bond debt and secured long-term debt approximates
their carrying value, based on market comparisons to similar types of debt
instruments having similar maturities.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The independent auditor's reports, consolidated financial statements and
schedules listed in the accompanying index are filed as part of this report and
incorporated herein by this reference. See "Index to Financial Statements" on
page F-1.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
21
<PAGE> 23
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information regarding the Company's Directors required by this item is
presented under the caption "Board of Directors and Officers" in AIMCO's proxy
statement for its 2000 annual meeting of stockholders and is incorporated herein
by reference.
The directors and executive officers of the Company as of February 29, 2000
are:
<TABLE>
<CAPTION>
NAME AGE FIRST ELECTED POSITION
- ---- --- ------------- --------
<S> <C> <C> <C>
Terry Considine..... 52 July 1994 Chairman of the Board of Directors and
Chief Executive Officer
Peter K. 55 July 1994 Vice Chairman of the Board of Directors
Kompaniez......... and President
Thomas W. Toomey.... 39 January 1996 Chief Operating Officer
Harry G. Alcock..... 36 July 1996 Executive Vice President and Chief
Investment Officer
Joel F. Bonder...... 51 December 1997 Executive Vice President, General
Counsel and Secretary
Patrick J. Foye..... 43 May 1998 Executive Vice President
Lance J. Graber..... 38 October 1999 Executive Vice President -- Acquisitions
Steven D. Ira....... 49 July 1994 Co-Founder and Executive Vice
President -- Property Operations
Paul J. McAuliffe... 43 February 1999 Executive Vice President and Chief
Financial Officer
Richard S. 68 July 1994 Director, Chairman of the Audit
Ellwood........... Committee
J. Landis Martin.... 54 July 1994 Director, Chairman of the Compensation
Committee
Thomas L. Rhodes.... 60 July 1994 Director
John D. Smith....... 71 November 1994 Director
</TABLE>
The following is a biographical summary of the experience of the current
directors and executive officers of the Company for the past five years or more.
Terry Considine. Mr. Considine has been Chairman of the Board of Directors
and Chief Executive Officer of the Company since July 1994. Mr. Considine serves
as Chairman and director of Asset Investors Corporation ("Asset Investors") and
Commercial Assets, Inc. ("Commercial Assets"), two other public real estate
investment trusts. Mr. Considine has been and remains involved as a principal in
a variety of other business activities.
Peter K. Kompaniez. Mr. Kompaniez has been Vice Chairman of the Board of
Directors since July 1994 and was appointed President in July 1997. Mr.
Kompaniez has also served as Chief Operating Officer of NHP Incorporated
("NHP"), which was acquired by the Company in December 1997. From 1986 to 1993,
he served as President and Chief Executive Officer of Heron Financial
Corporation ("HFC"), a United States holding company for Heron International,
N.V.'s real estate and related assets. While at HFC, Mr. Kompaniez administered
the acquisition, development and disposition of approximately 8,150 apartment
units (including 6,217 units that have been acquired by the Company) and 3.1
million square feet of commercial real estate.
Thomas W. Toomey. Mr. Toomey served as Senior Vice President-Finance and
Administration of the Company from January 1996 to March 1997, when he was
promoted to Executive Vice President-Finance and Administration. Mr. Toomey
served as Executive Vice President -- Finance and Administration until December
1999, when he was appointed Chief Operating Officer. From 1990 until 1995, Mr.
Toomey served in a similar capacity with Lincoln Property Company ("LPC") as
Vice President/Senior Controller and
22
<PAGE> 24
Director of Administrative Services of Lincoln Property Services where he was
responsible for LPC's computer systems, accounting, tax, treasury services and
benefits administration. From 1984 to 1990, he was an audit manager with Arthur
Andersen & Co. where he served real estate and banking clients. Mr. Toomey
received a B.S. in Business Administration/Finance from Oregon State University.
Harry G. Alcock. Mr. Alcock served as a Vice President of the Company from
July 1996 to October 1997, when he was promoted to Senior Vice
President-Acquisitions. Mr. Alcock served as Senior Vice President-Acquisitions
until October 1999, when he was promoted to Executive Vice President and Chief
Investment Officer. Mr. Alcock has had responsibility for acquisition and
financing activities of the Company since July 1994. From June 1992 until July
1994, Mr. Alcock served as Senior Financial Analyst for PDI and HFC. From 1988
to 1992, Mr. Alcock worked for Larwin Development Corp., a Los Angeles-based
real estate developer, with responsibility for raising debt and joint venture
equity to fund land acquisitions and development. From 1987 to 1988, Mr. Alcock
worked for Ford Aerospace Corp. He received his B.S. from San Jose State
University.
Joel F. Bonder. Mr. Bonder was appointed Executive Vice President, General
Counsel and Secretary of the Company effective December 1997. Prior to joining
the Company, Mr. Bonder served as Senior Vice President and General Counsel of
NHP from April 1994 until December 1997. Mr. Bonder served as Vice President and
Deputy General Counsel of NHP from June 1991 to March 1994 and as Associate
General Counsel of NHP Incorporated from 1986 to 1991. From 1983 to 1985, Mr.
Bonder practiced with the Washington, D.C. law firm of Lane & Edson, P.C. and
from 1979 to 1983 practiced with the Chicago law firm of Ross and Hardies. Mr.
Bonder received a B.A. from the University of Rochester and a J.D. from
Washington University School of Law.
Patrick J. Foye. Mr. Foye was appointed Executive Vice President of the
Company in May 1998. He is responsible for acquisitions of partnership
securities, consolidation of minority interests, and corporate and other
acquisitions. Prior to joining the Company, Mr. Foye was a Merger and
Acquisitions Partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP
from 1989 to 1998 and was Managing Partner of the firm's Brussels, Budapest and
Moscow offices from 1992 through 1994. Mr. Foye is also Deputy Chairman of the
Long Island Power Authority and serves as a member of the New York State
Privatization Council. He received a B.A. from Fordham College and a J.D. from
Fordham Law School and was Associate Editor of the Fordham Law Review.
Lance J. Graber. Mr. Graber was appointed Executive Vice
President-Acquisitions of the Company in October 1999. His principal business
function is acquisitions. Prior to joining the Company, Mr. Graber was an
Associate from 1991 through 1992 and then a Vice President from 1992 through
1994 at Credit Suisse First Boston engaged in real estate financial advisory
services and principal investing. He was a Director there from 1994 to May 1999,
during which time he supervised a staff of seven in the making of principal
investments in hotel, multi-family and assisted living properties. Mr. Graber
received a B.S. and an M.B.A. from the Wharton School of the University of
Pennsylvania.
Steven D. Ira. Mr. Ira is a Co-Founder of the Company and has served as
Executive Vice President -- Property Operations of the Company since July 1994.
From 1987 until July 1994, he served as President of Property Asset Management
("PAM"). Prior to merging his firm with PAM in 1987, Mr. Ira acquired extensive
experience in property management. Between 1977 and 1981 he supervised the
property management of over 3,000 apartment and mobile home units in Colorado,
Michigan, Pennsylvania and Florida, and in 1981 he joined with others to form
the property management firm of McDermott, Stein and Ira. Mr. Ira served for
several years on the National Apartment Manager Accreditation Board and is a
former president of both the National Apartment Association and the Colorado
Apartment Association. Mr. Ira is the sixth individual elected to the Hall of
Fame of the National Apartment Association in its 54-year history. He holds a
Certified Apartment Property Supervisor (CAPS) and a Certified Apartment Manager
designation from the National Apartment Association, a Certified Property
Manager (CPM) designation from the National Institute of Real Estate Management
(IREM) and he is a member of the Boards of Directors of the National
Multi-Housing Council, the National Apartment Association and the Apartment
Association of Greater Orlando. Mr. Ira received a B.S. from Metropolitan State
College in 1975.
23
<PAGE> 25
Paul J. McAuliffe. Mr. McAuliffe has been Executive Vice President of the
Company since February 1999 and was appointed Chief Financial Officer in October
1999. Prior to joining the Company, Mr. McAuliffe was Senior Managing Director
of Secured Capital Corp and prior to that time had been a Managing Director of
Smith Barney, Inc. from 1993 to 1996, where he was senior member of the
underwriting team that lead AIMCO's initial public offering in 1994. Mr.
McAuliffe was also a Managing Director and head of the real estate group at CS
First Boston from 1990 to 1993 and he was a Principal in the real estate group
at Morgan Stanley & Co., Inc. where he worked from 1983 to 1990. Mr. McAuliffe
received a B.A. from Columbia College and an M.B.A. from University of Virginia,
Darden School.
Richard S. Ellwood. Mr. Ellwood was appointed a director of the Company in
July 1994. Mr. Ellwood is currently Chairman of the Audit Committee and a member
of the Compensation Committee. Mr. Ellwood is the founder and President of R.S.
Ellwood & Co., Incorporated, a real estate investment banking firm. Prior to
forming R.S. Ellwood & Co., Incorporated in 1987, Mr. Ellwood had 31 years
experience on Wall Street as an investment 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 Lodging Trust, Incorporated and Florida
East Coast Industries, Inc.
J. Landis Martin. Mr. Martin was appointed a director of the Company in
July 1994 and became Chairman of the Compensation Committee on March 19, 1998.
Mr. Martin is a member of the Audit Committee. Mr. Martin has served as
President and Chief Executive Officer of NL Industries, Inc., a manufacturer of
titanium dioxide since 1987. Mr. Martin has served as Chairman of Tremont
Corporation ("Tremont"), a holding company operating through its affiliates
Titanium Metals Corporation ("TIMET") and NL Industries, Inc. ("NL"), since 1990
and as Chief Executive Officer and a director of Tremont since 1988. Mr. Martin
has served as Chairman of TIMET, an integrated producer of titanium since 1987
and Chief Executive Officer since January, 1995. From 1990 until its acquisition
by a predecessor of Halliburton Company ("Halliburton") in 1994, Mr. Martin
served as Chairman of the Board and Chief Executive Officer of Baroid
Corporation, an oilfield services company. In addition to Tremont, NL and TIMET,
Mr. Martin is a director of Halliburton, which is engaged in the petroleum
services, hydrocarbon and engineering industries, and Crown Castle International
Corporation, a telecommunications company.
Thomas L. Rhodes. Mr. Rhodes was appointed a Director of the Company in
July 1994 and is currently a member of the Audit and Compensation Committees.
Mr. Rhodes has served as the President and Director of National Review magazine
since November 1992, where he has also served as a Director since 1988. From
1976 to 1992, he held various positions at Goldman, Sachs & Co. and was elected
a General Partner in 1986 and served as a General Partner from 1987 until
November 1992. He is currently Co-Chairman of the Board, Co-Chief Executive
Officer and a Director of Asset Investors and Commercial Assets. He also serves
as a Director of Delphi Financial Group and its subsidiaries, Delphi
International Ltd., Oracle Reinsurance Company and The Lynde and Harry Bradley
Foundation.
John D. Smith. Mr. Smith was appointed a director of the Company in
November 1994. Mr. Smith is a member of the Compensation Committee and the Audit
Committee. Mr. Smith is Principal and President of John D. Smith Developments.
Mr. Smith has been a shopping center developer, owner and consultant for over
8.6 million square feet of shopping center projects including Lenox Square in
Atlanta, Georgia. Mr. Smith is a Trustee and former President of the
International Council of Shopping Centers and was selected to be a member of the
American Society of Real Estate Counselors. Mr. Smith served as a director for
Pan-American Properties, Inc. (National Coal Board of Great Britain) formerly
known as Continental Illinois Properties. He also serves as a director of
American Fidelity Assurance Companies and is retained as an advisor by Shop
System Study Society, Tokyo, Japan.
Additional information required by this item is presented under the caption
"Other Matters -- Section 16(a) Compliance" in the Company's proxy statement for
its 2000 annual meeting of stockholders and is incorporated herein by reference.
24
<PAGE> 26
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item is presented under the captions
"Summary Compensation Table," "Option/SAR Grants in Last Fiscal Year" and
"Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-end
Options/SAR Values" in AIMCO's proxy statement for its 2000 annual meeting of
stockholders and is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this item is presented under the caption
"Security Ownership of Certain Beneficial Owners and Management" in AIMCO's
proxy statement for its 2000 annual meeting of stockholders and is incorporated
herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this item is presented under the caption
"Certain Relationships and Transactions" in AIMCO's proxy statement for its 2000
annual meeting of stockholders and is incorporated herein by reference.
25
<PAGE> 27
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE, AND REPORTS ON FORM 8-K
(a) (1) The financial statements listed in the Index to Financial
Statements on Page F-1 of this report are filed as part of this report and
incorporated herein by reference.
(a) (2) The financial statement schedule listed in the Index to Financial
Statements on Page F-1 of this report is filed as part of this report and
incorporated herein by reference.
(a) (3) The Exhibit Index is included on page 23 of this report and
incorporated herein by reference.
(b) Reports on Form 8-K for the quarter ended December 31, 1999:
None.
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
2.1 -- Second Amended and Restated Agreement and Plan of Merger,
dated as of January 22, 1999, by and between Apartment
Investment and Management Company and Insignia Properties
Trust (Exhibit 2.2 to the Current Report on Form 8-K of
Insignia Properties Trust, dated February 11, 1999, is
incorporated herein by this reference)
2.2 -- Amended and Restated Agreement and Plan of Merger, dated
as of May 26, 1998, by and among Apartment Investment
Management Company, AIMCO Properties, L.P., Insignia
Financial Group, Inc., and Insignia/ESG Holdings, Inc.
(Exhibit 2.1 to AIMCO's Registration Statement on Form
S-4, filed August 5, 1998, is incorporated herein by this
reference)
3.1 -- Charter
3.2 -- Bylaws
4.1 -- Amended and Restated Declaration of Trust of IFT
Financing I (formerly Insignia Financing I), dated as of
November 1, 1996, among Insignia Financial Group, Inc. as
Sponsor, First Union National Bank of South Carolina as
Property Trustee, First Union Bank of Delaware, as
Delaware Trustee and Andrew I. Farkas, John K. Lines and
Ronald Uretta as Regular Trustees (Exhibit 4.2 to Form
S-3 of Insignia Financial Group, Inc. dated December 10,
1996, is incorporated herein by this reference)
4.2 -- Indenture for the 6.5% Convertible Subordinated
Debentures, dated as of November 1, 1996, between
Insignia Financial Group, Inc., as Issuer and First Union
National Bank of South Carolina, as Trustee (Exhibit 4.2
to Form S-3 of Insignia Financial Group, Inc., dated
December 10, 1996, is incorporated herein by this
reference)
4.3 -- First Supplemental Indenture, dated as of October 1,
1998, by and among Apartment Investment and Management
Company, Insignia Financial Group, Inc., and First Union
National Bank (formerly First Union National Bank of
South Carolina, as Trustee) (Exhibit 4.3 to AIMCO's
Annual Report on Form 10-K for the fiscal year 1998, is
incorporated herein by this reference)
10.1 -- Third Amended and Restated Agreement of Limited
Partnership of AIMCO Properties, L.P., dated as of July
29, 1994 as amended and restated as of October 1, 1998
(Exhibit 10.8 to AIMCO's Quarterly Report on Form 10-Q
for the quarterly period ending September 30, 1998, is
incorporated herein by this reference)
</TABLE>
26
<PAGE> 28
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
10.2 -- First Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of November 6, 1998 (Exhibit 10.9 to
AIMCO's Quarterly Report on Form 10-Q for the quarterly
period ending September 30, 1998, is incorporated herein
by this reference)
10.3 -- Second Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of December 30, 1998 (Exhibit 10.1 to
Amendment No. 1 to AIMCO's Current Report on Form 8-K/A,
filed February 11, 1999, is incorporated herein by this
reference)
10.4 -- Third Amendment to Third Amended and Restated Agreement
of Limited Partnership of AIMCO Properties, L.P., dated
as of February 18, 1999 (Exhibit 10.12 to AIMCO's Annual
Report on Form 10-K for the fiscal year 1998, is
incorporated herein by this reference)
10.5 -- Fourth Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of March 25, 1999 (Exhibit 10.2 to AIMCO's
Quarterly Report on Form 10-Q for the quarterly period
ending March 31, 1999, is incorporated herein by this
reference)
10.6 -- Fifth Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of March 26, 1999 (Exhibit 10.3 to AIMCO's
Quarterly Report on Form 10-Q for the quarterly period
ending March 31, 1999, is incorporated herein by this
reference)
10.7 -- Sixth Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of March 26, 1999 (Exhibit 10.1 to AIMCO's
Quarterly Report on Form 10-Q for the quarterly period
ending June 30, 1999, is incorporated herein by this
reference)
10.8 -- Seventh Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of September 27, 1999 (Exhibit 10.1 to
AIMCO's Quarterly Report on Form 10-Q for the quarterly
period ending September 30, 1999, is incorporated herein
by this reference)
10.9 -- Eighth Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of December 14, 1999
10.10 -- Ninth Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of December 21, 1999
10.11 -- Tenth Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of December 21, 1999
10.12 -- Eleventh Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of January 13, 2000
10.13 -- Shareholders Agreement, dated October 1, 1998, by and
among Apartment Investment and Management Company, Andrew
L. Farkas, James A. Aston and Frank M. Garrison (Exhibit
10.4 to AIMCO's Schedule 13D filed on October 15, 1998,
is incorporated herein by this reference)
10.14 -- Common Stock Purchase Agreement made as of August 26,
1997, by and between Apartment Investment and Management
Company and ABKB/LaSalle Securities Limited Partnership
(Exhibit 99.1 to AIMCO's Current Report on Form 8-K,
dated August 26, 1997, is incorporated herein by this
reference)
10.15 -- Amended and Restated Assignment and Assumption Agreement,
dated as of December 7, 1998, by and among Insignia
Properties, L.P. and AIMCO Properties, L.P. (Exhibit 10.1
to the Current Report on Form 8-K of Insignia Properties
Trust, dated February 11, 1999, is incorporated herein by
this reference)
</TABLE>
27
<PAGE> 29
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
10.16 -- Amended and Restated Indemnification Agreement, dated as
of May 26, 1998, by and between Apartment Investment and
Management Company and Insignia/ESG Holdings, Inc.
(Exhibit 2.2 to AIMCO's Registration Statement on Form
S-4, filed August 5, 1998, is incorporated herein by this
reference)
10.17 -- Credit Agreement (Secured Revolving Credit Facility),
dated as of August 16, 1999, among AIMCO Properties,
L.P., Bank of America, BankBoston, N.A., and First Union
National Bank (Exhibit 10.1 to the Current Report on Form
8-K of Apartment Investment and Management Company, dated
as of August 16, 1999, is incorporated herein by this
reference)
10.18 -- Borrower Pledge Agreement, dated August 16, 1999 between
AIMCO Properties, L.P. and Bank of America (Exhibit 10.2
to the Current Report on Form 8-K of Apartment Investment
and Management Company, dated August 16, 1999 is
incorporated herein by this reference)
10.19 -- Form of Committed Loan Note, issued by AIMCO Properties,
L.P. to Bank of America, BankBoston, N.A., and First
Union National Bank (Exhibit 10.3 to the Current Report
on Form 8-K of Apartment Investment and Management
Company, dated August 16, 1999, is incorporated herein by
this reference)
10.20 -- Form of Swing Line Note, issued by AIMCO Properties, L.P.
to Bank of America, BankBoston, N.A., and First Union
National Bank (Exhibit 10.4 to the Current Report on Form
8-K of Apartment Investment and Management Company, dated
August 16, 1999, is incorporated herein by this
reference)
10.21 -- Form of Payment Guaranty, by Apartment Investment and
Management Company, AIMCO/NHP Holdings, Inc., NHP A&R
Services, Inc., and NHP Management Company (Exhibit 10.5
to the Current Report on Form 8-K of Apartment Investment
and Management Company, dated August 16, 1999, is
incorporated herein by this reference)
10.22 -- Employment Contract, executed on July 29, 1994, by and
between AIMCO Properties, L.P., and Peter Kompaniez
(Exhibit 10.44A to AIMCO's Annual Report on Form 10-K for
the fiscal year 1994, is incorporated herein by this
reference)*
10.23 -- Employment Contract executed on July 29, 1994 by and
between AIMCO Properties, L.P. and Terry Considine
(Exhibit 10.44C to AIMCO's Annual Report on Form 10-K for
the fiscal year 1994, is incorporated herein by this
reference)*
10.24 -- Employment Contract executed on July 29, 1994 by and
between AIMCO Properties, L.P. and Steven D. Ira (Exhibit
10.44D to AIMCO's Annual Report on Form 10-K for fiscal
year 1994, is incorporated herein by this reference)*
10.25 -- Apartment Investment and Management Company 1998
Incentive Compensation Plan (Annex B to AIMCO's Proxy
Statement for Annual Meeting of Stockholders to be held
on May 8, 1998, is incorporated herein by this
reference)*
10.26 -- Apartment Investment and Management Company 1997 Stock
Award and Incentive Plan (October 1999)*
10.27 -- Form of Restricted Stock Agreement (1997 Stock Award and
Incentive Plan) (Exhibit 10.11 to AIMCO's Quarterly
Report on Form 10-Q for the quarterly period ending
September 30, 1997, is incorporated herein by this
reference)*
10.28 -- Form of Incentive Stock Option Agreement (1997 Stock
Award and Incentive Plan) (Exhibit 10.42 to AIMCO's
Annual Report on Form 10-K for the fiscal year 1998, is
incorporated herein by this reference)*
</TABLE>
28
<PAGE> 30
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
10.29 -- Apartment Investment and Management Company Non-Qualified
Employee Stock Option Plan, adopted August 29, 1996
(Exhibit 10.8 to AIMCO's Quarterly Report on Form 10-Q
for the quarterly period ending September 30, 1996, is
incorporated herein by this reference)*
10.30 -- Amended and Restated Apartment Investment and Management
Company Non-Qualified Employee Stock Option Plan (Annex B
to AIMCO's Proxy Statement for the Annual Meeting of
Stockholders to be held on April 24, 1997, is
incorporated herein by this reference)*
10.31 -- The 1994 Stock Incentive Plan for Officers, Directors and
Key Employees of Ambassador Apartments, Inc., Ambassador
Apartments, L.P., and Subsidiaries (Exhibit 10.40 to
Ambassador Apartments, Inc. Annual Report on Form 10-K
for the fiscal year 1997, is incorporated herein by this
reference)*
10.32 -- Amendment to the 1994 Stock Incentive Plan for Officers,
Directors and Key Employees of Ambassador Apartments,
Inc., Ambassador Apartments, L.P. and Subsidiaries
(Exhibit 10.41 to Ambassador Apartments, Inc. Annual
Report on Form 10-K for the fiscal year 1997, is
incorporated herein by this reference)*
10.33 -- The 1996 Stock Incentive Plan for Officers, Directors and
Key Employees of Ambassador Apartments, Inc., Ambassador
Apartments, L.P., and Subsidiaries, as amended March 20,
1997 (Exhibit 10.42 to Ambassador Apartments, Inc. Annual
Report on Form 10-K for the fiscal year 1997, is
incorporated herein by this reference)*
10.34 -- Insignia 1992 Stock Incentive Plan, as amended through
March 28, 1994 and November 13, 1995 (Exhibit 10.1 to
Insignia Financial Group, Inc. Annual Report on Form 10-K
for the fiscal year 1997, is incorporated herein by this
reference)*
10.35 -- NHP Incorporated 1990 Stock Option Plan (Exhibit 10.9 to
NHP Incorporated Annual Report on Form 10-K for the
fiscal year 1995, is incorporated herein by this
reference)*
10.36 -- NHP Incorporated 1995 Incentive Stock Option Plan
(Exhibit 10.10 to NHP Incorporated Annual Report on Form
10-K for the fiscal year 1995, is incorporated herein by
this reference)*
10.37 -- Summary of Agreement for Sale of Stock to Executive
Officers (Exhibit 10.104 to AIMCO's Annual Report on Form
10-K for the fiscal year 1996, is incorporated herein by
this reference)*
21.1 -- List of Subsidiaries
23.1 -- Consent of Ernst & Young LLP
27.1 -- Financial Data Schedule
99.1 -- Agreement re: disclosure of long-term debt instruments
</TABLE>
- ---------------
(1) Schedule and supplemental materials to the exhibits have been omitted but
will be provided to the Securities and Exchange Commission upon request.
* Management contract
29
<PAGE> 31
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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, on the 13th day of
March, 2000.
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
/s/ TERRY CONSIDINE
------------------------------------
Terry Considine
Chairman of the Board
And Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ TERRY CONSIDINE Chairman of the Board and March 13, 2000
- ----------------------------------------------------- Chief Executive Officer
Terry Considine
/s/ PETER K. KOMPANIEZ Vice Chairman, President and March 13, 2000
- ----------------------------------------------------- Director
Peter K. Kompaniez
/s/ THOMAS W. TOOMEY Chief Operating Officer March 13, 2000
- -----------------------------------------------------
Thomas W. Toomey
/s/ PATRICK FOYE Executive Vice President March 13, 2000
- -----------------------------------------------------
Patrick Foye
/s/ PAUL MCAULIFFE Executive Vice President and March 13, 2000
- ----------------------------------------------------- Chief Financial Officer
Paul McAuliffe
/s/ RICHARD S. ELLWOOD Director March 13, 2000
- -----------------------------------------------------
Richard S. Ellwood
/s/ J. LANDIS MARTIN Director March 13, 2000
- -----------------------------------------------------
J. Landis Martin
/s/ THOMAS L. RHODES Director March 13, 2000
- -----------------------------------------------------
Thomas L. Rhodes
/s/ JOHN D. SMITH Director March 13, 2000
- -----------------------------------------------------
John D. Smith
</TABLE>
30
<PAGE> 32
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
FINANCIAL STATEMENTS:
Report of Independent Auditors............................ F-2
Consolidated Balance Sheets as of December 31, 1999 and
1998................................................... F-3
Consolidated Statements of Income for the Years Ended
December 31, 1999, 1998 and 1997....................... F-4
Consolidated Statements of Stockholders' Equity for the
Years Ended December 31, 1999, 1998 and 1997........... F-5
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1999, 1998
and 1997............................................... F-6
Notes to Consolidated Financial Statements................ F-8
FINANCIAL STATEMENT SCHEDULE:
Schedule III -- Real Estate and Accumulated
Depreciation........................................... F-32
All other schedules are omitted because they are not
applicable or the required information is shown in the
financial statements or notes thereto
</TABLE>
F-1
<PAGE> 33
REPORT OF INDEPENDENT AUDITORS
Stockholders and Board of Directors
Apartment Investment and Management Company
We have audited the accompanying consolidated balance sheets of Apartment
Investment and Management Company as of December 31, 1999 and 1998, and the
related consolidated statements of income, stockholders' equity and cash flows
for each of the three years in the period ended December 31, 1999. Our audits
also included the financial statement schedule listed in the Index at Item
14(a)(2). These financial statements and schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements and schedule based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
Apartment Investment and Management Company at December 31, 1999 and 1998, and
the consolidated results of its operations and its cash flows for each of the
three years in the period ended December 31, 1999 in conformity with accounting
principles generally accepted in the United States. Also, in our opinion, the
related financial statement schedule when considered in relation to the basic
financial statements taken as a whole, presents fairly, in all material respects
the information set forth therein.
/s/ ERNST & YOUNG LLP
Denver, Colorado
January 20, 2000
F-2
<PAGE> 34
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 1999 AND 1998
(IN THOUSANDS, EXCEPT SHARE DATA)
ASSETS
<TABLE>
<CAPTION>
1999 1998
---------- ----------
<S> <C> <C>
Real estate, net of accumulated depreciation of $416,497 and
$228,880.................................................. $4,092,038 $2,573,718
Property held for sale...................................... 4,162 27,304
Investments in unconsolidated real estate partnerships...... 891,449 945,035
Investments in unconsolidated subsidiaries.................. 44,921 62,244
Notes receivable from unconsolidated real estate
partnerships.............................................. 142,828 103,979
Notes receivable from unconsolidated subsidiaries........... 88,754 116,688
Cash and cash equivalents................................... 101,604 71,305
Restricted cash............................................. 84,595 55,826
Other assets................................................ 234,600 292,701
---------- ----------
$5,684,951 $4,248,800
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Secured notes payable....................................... $1,954,259 $ 843,791
Secured tax-exempt bond financing........................... 420,830 398,602
Unsecured short-term financing.............................. 209,200 310,300
Secured short-term financing................................ -- 108,022
---------- ----------
Total indebtedness................................ 2,584,289 1,660,715
Accounts payable, accrued and other liabilities............. 271,627 188,815
Resident security deposits and prepaid rents................ 22,793 12,654
---------- ----------
Total liabilities................................. 2,878,709 1,862,184
---------- ----------
Commitments and contingencies............................... -- --
Company-obligated mandatorily redeemable convertible
preferred securities of a subsidiary trust................ 149,500 149,500
Minority interest in other entities......................... 168,533 185,705
Minority interest in operating partnership.................. 225,381 148,847
Stockholders' equity
Preferred Stock........................................... 641,250 792,468
Class A Common Stock, $.01 par value, 474,121,284 shares
and 484,027,500 shares authorized, 66,802,886 and
48,451,388 shares issued and outstanding,
respectively........................................... 668 485
Additional paid-in capital................................ 1,885,424 1,246,962
Notes receivable on common stock purchases................ (51,619) (49,658)
Distributions in excess of earnings....................... (212,895) (87,693)
---------- ----------
Total stockholders' equity........................ 2,262,828 1,902,564
---------- ----------
$5,684,951 $4,248,800
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
F-3
<PAGE> 35
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
1999 1998 1997
--------- --------- --------
<S> <C> <C> <C>
RENTAL PROPERTY OPERATIONS
Rental and other property revenues......................... $ 533,917 $ 377,139 $193,006
Property operating expenses................................ (214,693) (147,541) (76,168)
Owned property management expense.......................... (15,429) (11,013) (6,620)
Depreciation............................................... (131,753) (84,635) (37,741)
--------- --------- --------
Income from property operations............................ 172,042 133,950 72,477
--------- --------- --------
SERVICE COMPANY BUSINESS
Management fees and other income........................... 43,455 24,103 13,937
Management and other expenses.............................. (25,470) (16,960) (10,961)
--------- --------- --------
Income from service company business....................... 17,985 7,143 2,976
--------- --------- --------
General and administrative expenses........................ (13,112) (13,568) (5,396)
Interest expense........................................... (140,094) (89,424) (51,385)
Interest income............................................ 62,721 29,368 8,676
Equity in losses of unconsolidated real estate
partnerships............................................. (4,467) (4,854) (1,798)
Equity in earnings (losses) of unconsolidated
subsidiaries............................................. (2,818) 11,570 4,636
Minority interest in other entities........................ (900) (468) 1,008
Amortization............................................... (5,860) (8,735) (948)
--------- --------- --------
Income from operations..................................... 85,497 64,982 30,246
Gain (loss) on disposition of properties................... (1,785) 4,674 2,720
--------- --------- --------
Income before extraordinary item and minority interest in
operating partnership.................................... 83,712 69,656 32,966
Extraordinary item -- early extinguishment of debt......... -- -- (269)
--------- --------- --------
Income before minority interest in operating partnership... 83,712 69,656 32,697
Minority interest in operating partnership................. (2,753) (5,182) (4,064)
--------- --------- --------
Net income................................................. 80,959 64,474 28,633
Net income attributable to preferred stockholders.......... 56,885 26,533 2,315
--------- --------- --------
Net income attributable to common stockholders............. $ 24,074 $ 37,941 $ 26,318
========= ========= ========
Comprehensive Income
Net income................................................. $ 80,959 $ 64,474 $ 28,633
Other comprehensive income:
Net unrealized gains on investment in securities......... -- -- (1,683)
--------- --------- --------
Comprehensive income....................................... $ 80,959 $ 64,474 $ 26,950
========= ========= ========
Basic earnings per common share............................ $ 0.39 $ 0.84 $ 1.09
========= ========= ========
Diluted earnings per common share.......................... $ 0.38 $ 0.80 $ 1.08
========= ========= ========
Weighted average common shares outstanding................. 62,242 45,187 24,055
========= ========= ========
Weighted average common shares and common share equivalents
outstanding.............................................. 63,446 47,624 24,436
========= ========= ========
Dividends paid per common share............................ $ 2.50 $ 2.25 $ 1.85
========= ========= ========
</TABLE>
See accompanying notes to consolidated financial statements.
F-4
<PAGE> 36
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
(IN THOUSANDS)
<TABLE>
<CAPTION>
CLASS A CLASS B
PREFERRED STOCK COMMON STOCK COMMON STOCK NOTES
------------------ --------------- --------------- ADDITIONAL RECEIVABLE
SHARES SHARES SHARES PAID-IN FROM
ISSUED AMOUNT ISSUED AMOUNT ISSUED AMOUNT CAPITAL OFFICERS
------ --------- ------ ------ ------ ------ ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE DECEMBER 31, 1996................. -- $ -- 14,980 $150 325 $ 3 $ 236,791 $ (7,140)
Net proceeds from issuance of Class A
Common Stock............................. -- -- 16,367 164 -- -- 509,950 --
Net proceeds from issuance of Preferred
Stock.................................... 750 75,000 -- -- -- -- -- --
Net proceeds from issuance of Class C
Preferred Stock.......................... 2,400 60,000 -- -- -- -- (1,890) --
Repurchase of Class A Common Stock from
officer.................................. -- -- -- -- -- -- (67) 67
Conversion of Class B Common Stock to
Class A Common Stock..................... -- -- 163 1 (163) (1) -- --
Conversion of operating partnership units
to Class A Common Stock.................. -- -- 562 6 -- -- 8,615 --
Purchase of stock by officers............. -- -- 1,149 11 -- -- 34,704 (33,517)
Repayment of notes receivable from
officers................................. -- -- -- -- -- -- -- 14,540
Stock options and warrants exercised...... -- -- 458 4 -- -- 8,714 (9,045)
Class A Common Stock issued as
consideration for NHP common stock....... -- -- 6,760 67 -- -- 180,784 --
Net income................................ -- -- -- -- -- -- -- --
Dividends paid -- Class A Common Stock.... -- -- -- -- -- -- -- --
Dividends paid -- Preferred Stock......... -- -- -- -- -- -- -- --
Unrealized loss on investments............ -- -- -- -- -- -- -- --
------ --------- ------ ---- ---- --- ---------- --------
BALANCE DECEMBER 31, 1997................. 3,150 135,000 40,439 403 162 2 977,601 (35,095)
Net proceeds from issuances of Preferred
Stock.................................... 11,250 356,250 -- -- -- -- (15,353) --
Repurchase of Class A Common Stock........ -- -- (303) (3) -- -- (11,064) --
Conversion of Class B Common Stock to
Class A Common Stock..................... -- -- 162 2 (162) (2) -- --
Conversion of operating partnership units
to Class A Common Stock.................. -- -- 275 3 -- -- 5,792 --
Purchase of stock by officers and awards
of restricted stock...................... -- -- 640 7 -- -- 23,619 (23,471)
Repayment of notes receivable from
officers................................. -- -- -- -- -- -- -- 8,908
Stock options and warrants exercised...... -- -- 658 7 -- -- 11,008 --
Class A Common Stock issued as
consideration for Ambassador common
stock.................................... -- -- 6,580 66 -- -- 251,209 --
Class E Preferred Stock issued as
consideration for Insignia common
stock.................................... 8,424 301,218 -- -- -- -- -- --
Issuance of warrants to purchase Class A
Common Stock............................. -- -- -- -- -- -- 4,150 --
Net income................................ -- -- -- -- -- -- -- --
Dividends paid -- Class A Common Stock.... -- -- -- -- -- -- -- --
Dividends paid -- Preferred Stock......... -- -- -- -- -- -- -- --
Unrealized gain (loss) on investments..... -- -- -- -- -- -- -- --
------ --------- ------ ---- ---- --- ---------- --------
BALANCE DECEMBER 31, 1998................. 22,824 792,468 48,451 485 -- -- 1,246,962 (49,658)
Net proceeds from issuances of Preferred
Stock.................................... 10,000 250,000 -- -- -- -- (16,899) --
Repurchase of Class A Common Stock........ -- -- (205) (2) -- -- (8,036) --
Conversion of operating partnership units
to Class A Common Stock.................. -- -- 964 10 -- -- 13,756 --
Conversion of Preferred Stock to Class A
Common Stock............................. (9,424) (401,218) 10,924 109 -- -- 401,109 --
Purchase of stock by officers and awards
of restricted stock...................... -- -- 240 2 -- -- 8,824 (8,202)
Repayment of notes receivable from
officers................................. -- -- -- -- -- -- -- 6,241
Stock options and warrants exercised...... -- -- 129 1 -- -- 3,201 --
Class A Common Stock issued as
consideration for Insignia Property Trust
merger................................... -- -- 4,044 40 -- -- 158,753 --
Class A Common Stock issued as
consideration for First Union
Acquisition.............................. -- -- 530 5 -- -- 21,135 --
Class A Common Stock Offering............. -- -- 1,383 14 -- -- 54,598 --
Warrants exercised........................ -- -- 343 4 -- -- 2,021 --
Net income................................ -- -- -- -- -- -- -- --
Dividends paid -- Class A Common Stock.... -- -- -- -- -- -- -- --
Dividends paid -- Preferred Stock......... -- -- -- -- -- -- -- --
------ --------- ------ ---- ---- --- ---------- --------
BALANCE DECEMBER 31, 1999................. 23,400 $ 641,250 66,803 $668 -- $-- $1,885,424 $(51,619)
====== ========= ====== ==== ==== === ========== ========
<CAPTION>
UNREALIZED
DISTRIBUTIONS GAIN
IN EXCESS (LOSS) ON
OF EARNINGS INVESTMENTS TOTAL
------------- ----------- ----------
<S> <C> <C> <C>
BALANCE DECEMBER 31, 1996................. $ (14,055) $ -- $ 215,749
Net proceeds from issuance of Class A
Common Stock............................. -- -- 510,114
Net proceeds from issuance of Preferred
Stock.................................... -- -- 75,000
Net proceeds from issuance of Class C
Preferred Stock.......................... -- -- 58,110
Repurchase of Class A Common Stock from
officer.................................. -- -- --
Conversion of Class B Common Stock to
Class A Common Stock..................... -- -- --
Conversion of operating partnership units
to Class A Common Stock.................. -- -- 8,621
Purchase of stock by officers............. -- -- 1,198
Repayment of notes receivable from
officers................................. -- -- 14,540
Stock options and warrants exercised...... -- -- (327)
Class A Common Stock issued as
consideration for NHP common stock....... -- -- 180,851
Net income................................ 28,633 -- 28,633
Dividends paid -- Class A Common Stock.... (44,660) -- (44,660)
Dividends paid -- Preferred Stock......... (846) -- (846)
Unrealized loss on investments............ -- (1,683) (1,683)
--------- ------- ----------
BALANCE DECEMBER 31, 1997................. (30,928) (1,683) 1,045,300
Net proceeds from issuances of Preferred
Stock.................................... -- -- 340,897
Repurchase of Class A Common Stock........ -- -- (11,067)
Conversion of Class B Common Stock to
Class A Common Stock..................... -- -- --
Conversion of operating partnership units
to Class A Common Stock.................. -- -- 5,795
Purchase of stock by officers and awards
of restricted stock...................... -- -- 155
Repayment of notes receivable from
officers................................. -- -- 8,908
Stock options and warrants exercised...... -- -- 11,015
Class A Common Stock issued as
consideration for Ambassador common
stock.................................... -- -- 251,275
Class E Preferred Stock issued as
consideration for Insignia common
stock.................................... -- -- 301,218
Issuance of warrants to purchase Class A
Common Stock............................. -- -- 4,150
Net income................................ 64,474 -- 64,474
Dividends paid -- Class A Common Stock.... (100,045) -- (100,045)
Dividends paid -- Preferred Stock......... (21,194) -- (21,194)
Unrealized gain (loss) on investments..... -- 1,683 1,683
--------- ------- ----------
BALANCE DECEMBER 31, 1998................. (87,693) -- 1,902,564
Net proceeds from issuances of Preferred
Stock.................................... -- -- 233,101
Repurchase of Class A Common Stock........ -- -- (8,038)
Conversion of operating partnership units
to Class A Common Stock.................. -- -- 13,766
Conversion of Preferred Stock to Class A
Common Stock............................. -- -- --
Purchase of stock by officers and awards
of restricted stock...................... -- -- 624
Repayment of notes receivable from
officers................................. -- -- 6,241
Stock options and warrants exercised...... -- -- 3,202
Class A Common Stock issued as
consideration for Insignia Property Trust
merger................................... -- -- 158,793
Class A Common Stock issued as
consideration for First Union
Acquisition.............................. -- -- 21,140
Class A Common Stock Offering............. -- -- 54,612
Warrants exercised........................ -- -- 2,025
Net income................................ 80,959 -- 80,959
Dividends paid -- Class A Common Stock.... (154,654) -- (154,654)
Dividends paid -- Preferred Stock......... (51,507) -- (51,507)
--------- ------- ----------
BALANCE DECEMBER 31, 1999................. $(212,895) $ -- $2,262,828
========= ======= ==========
</TABLE>
See accompanying notes to consolidated financial statements.
F-5
<PAGE> 37
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
(IN THOUSANDS)
<TABLE>
<CAPTION>
1999 1998 1997
--------- --------- ---------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income................................................ $ 80,959 $ 64,474 $ 28,633
--------- --------- ---------
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization........................... 151,166 101,610 43,520
Gain (loss) on disposition of properties................ 1,785 (4,674) (2,720)
Minority interest in operating partnership.............. 2,753 5,182 4,064
Minority interests in other entities.................... 900 468 (1,008)
Equity in losses of unconsolidated real estate
partnerships........................................... 4,467 4,854 1,798
Equity in earnings (losses) of unconsolidated
subsidiaries........................................... 2,818 (11,570) (4,636)
Extraordinary loss on early extinguishment of debt...... -- -- 269
Changes in operating assets and operating liabilities... 8,409 (11,930) 3,112
--------- --------- ---------
Total adjustments................................... 172,298 83,940 44,399
--------- --------- ---------
Net cash provided by operating activities........... 253,257 148,414 73,032
--------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of real estate................................... (103,354) (155,456) (376,315)
Additions to real estate.................................. (114,026) (79,675) (26,966)
Proceeds from sale of property held for sale.............. 49,023 36,468 22,095
Purchase of common stock, notes receivable, general and
limited partnership interests and other assets.......... (233,640) (56,760) (199,146)
Purchase of/additions to notes receivable................. (103,943) (81,587) (60,575)
Advances to unconsolidated real estate partnerships....... -- -- (42,879)
Proceeds from sale of notes receivable.................... 17,788 -- --
Proceeds from repayment of notes receivable............... 61,407 29,290 --
Cash from newly consolidated properties................... 68,127 -- --
Cash received in connection with acquisitions............. -- 60,777 --
Cash paid for merger related costs........................ (19,347) (78,568) --
Distributions received from investments in real estate
partnerships............................................ 87,284 15,673 --
Distributions received from (contributions to)
unconsolidated subsidiaries............................. 9,575 (13,032) (13,996)
Purchase of investments held for sale..................... -- (4,935) (19,881)
Redemption of OP Units.................................... -- (516) --
--------- --------- ---------
Net cash used in investing activities............... (281,106) (328,321) (717,663)
--------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from secured notes payable borrowings............ 297,536 102,115 225,436
Principal repayments on secured notes payable............. (53,572) (93,469) (12,512)
Proceeds from secured tax-exempt bond financing........... 20,731 210,720 --
Principal repayments on secured tax-exempt bond
financing............................................... (41,894) (224,395) (1,487)
Payoff of unsecured short-term financing.................. -- -- (12,579)
Proceeds from secured short-term financing................ -- 57,140 19,050
Repayments on secured short-term financing................ (4,522) (34,333) --
Net paydowns on the revolving credit facilities........... (151,100) (46,262) (162,008)
Payment of loan costs, including proceeds and costs from
interest rate hedges.................................... (16,070) (7,407) (6,387)
Proceeds from issuance of common and preferred stock,
exercise of options/warrants............................ 293,225 386,912 644,095
Principal repayments received on notes due from officers
on Class A Common Stock purchases....................... 6,241 8,951 25,957
Repurchase of common stock................................ (8,038) (11,066)
Payment of common stock dividends......................... (154,654) (100,045) (44,660)
Payment of distributions to minority interest............. (32,898) (15,531) (5,510)
Payment of preferred stock dividends...................... (96,837) (21,194) (846)
Proceeds from issuance of High Performance Units.......... -- 1,988 --
--------- --------- ---------
Net cash provided by financing activities........... 58,148 214,124 668,549
--------- --------- ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS................... 30,299 34,217 23,918
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR.............. 71,305 37,088 13,170
--------- --------- ---------
CASH AND CASH EQUIVALENTS AT END OF YEAR.................... $ 101,604 $ 71,305 $ 37,088
========= ========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
F-6
<PAGE> 38
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
(IN THOUSANDS)
<TABLE>
<CAPTION>
1999 1998 1997
---------- -------- --------
<S> <C> <C> <C>
SUPPLEMENTAL CASH INFORMATION:
Interest paid............................................. $ 140,410 $ 91,795 $ 51,076
Non Cash Transactions Associated with the Acquisition of
Properties:
Secured debt assumed in connection with purchase of real
estate................................................ 110,101 115,151 150,051
Real estate, assets acquired............................ 230,194 43,756 55,906
Assumption of operating liabilities..................... 15,233 857 --
Accrual of contingent consideration..................... (4,500) 4,500 --
OP Units issued......................................... 83,810 -- --
Class A Common Stock issued............................. 21,140 -- --
Non Cash Transactions Associated with Acquisition of
Limited Partnership Interests and Interests in the
Unconsolidated Subsidiaries:
Issuance of OP Units for interests in unconsolidated
real estate partnerships.............................. 15,085 4,045 7,469
Issuance of OP Units and assumption of liabilities for
interests in unconsolidated subsidiaries.............. 4,762 -- --
Non Cash Transactions Associated with Mergers:
Real estate............................................. 6,012 773,189 638,944
Investments in and notes receivable from unconsolidated
real estate partnerships.............................. 97,708 801,467 --
Investments in and notes receivable from unconsolidated
subsidiaries.......................................... (13,137) 68,168 --
Restricted cash......................................... -- 38,210 --
Other assets............................................ -- 110,969 --
Secured debt............................................ -- 764,543 71,055
Unsecured debt.......................................... -- 2,513 --
Accounts payable, accrued and other liabilities......... 30,183 181,158 239,699
Mandatorily redeemable convertible preferred securities
of a subsidiary trust................................. -- 149,500 --
Minority interest in other entities..................... (98,353) 117,922 --
Class A Common Stock issued............................. 158,753 552,492 185,061
Non Cash Transactions Associated with Consolidation of
Assets:
Real estate............................................. 1,016,343 22,089
Investments in and notes receivable from unconsolidated
real estate partnerships.............................. (380,359) (16,683) --
Restricted cash......................................... 43,605 -- --
Secured debt............................................ 561,129 4,679 --
Accounts payable, accrued and other liabilities......... 44,361 727 --
Minority interest in other entities..................... 77,774 -- --
Non Cash Transfer of Assets to an Unconsolidated
Subsidiary:
Real estate............................................. (32,091) -- --
Notes receivable........................................ 6,245 -- --
Secured debt............................................ (25,620) -- --
Other:
Redemption of OP Units.................................. 13,766 5,650 8,621
Receipt of notes payable from officers.................. 8,202 23,471 42,562
Conversion of Preferred Stock into Class A Common
Stock................................................. 401,218 -- --
Tenders payable for purchase of limited partner
interest.............................................. 77,380 -- --
</TABLE>
See accompanying notes to consolidated financial statements.
F-7
<PAGE> 39
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998, AND 1997
NOTE 1 ORGANIZATION
Apartment Investment and Management Company ("AIMCO" or the "Company"), a
Maryland corporation formed on January 10, 1994, is a self-administered and
self-managed REIT engaged in the ownership, acquisition, development, expansion
and management of multi-family apartment properties. As of December 31, 1999,
the Company owned or managed 363,462 apartment units in 1,942 properties located
in 48 states, the District of Columbia and Puerto Rico. Based on apartment unit
data compiled by the National Multi-Housing Council, we believe that, as of
December 31, 1999, AIMCO was the largest owner and manager of multi-family
apartment properties in the United States. As of December 31, 1999, AIMCO:
- owned or controlled 106,148 units in 373 apartment properties;
- held an equity interest in 133,113 units in 751 apartment properties; and
- managed 124,201 units in 818 apartment properties for third party owners
and affiliates.
AIMCO conducts substantially all of its operations through its operating
partnership, AIMCO Properties, L.P. (the "AIMCO operating partnership"). Through
a wholly owned subsidiary, AIMCO acts as the sole general partner of the AIMCO
operating partnership. As of December 31, 1999, AIMCO owned approximately a 91%
interest in the AIMCO operating partnership. AIMCO manages apartment properties
for third parties and affiliates through unconsolidated subsidiaries referred to
as the "management companies".
At December 31, 1999, AIMCO had 66,802,886 shares of Class A Common Stock
outstanding and the AIMCO operating partnership had 6,440,932 common units
outstanding, for a combined total of 73,243,818 shares and units.
NOTE 2 BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of
AIMCO, the AIMCO operating partnership, majority owned subsidiaries and
controlled real estate partnerships. Interests held by limited partners in real
estate partnerships controlled by the Company and interests held by the minority
shareholders of Insignia Properties Trust (through February 26, 1999) are
reflected as Minority Interest in Other Entities. Significant intercompany
balances and transactions have been eliminated in consolidation.
Interests in the AIMCO operating partnership held by limited partners other
than AIMCO are referred to as "OP Units". The AIMCO operating partnership's
income is allocated to holders of OP Units based on the weighted average number
of OP Units outstanding during the period. The AIMCO operating partnership
records the issuance of OP Units and the assets acquired in purchase
transactions based on the market price of the Company's Class A Common Stock at
the date of execution of the purchase contract. The holders of the OP Units
receive distributions, prorated from the date of issuance, in an amount
equivalent to the dividends paid to holders of Class A Common Stock. During
1999, 1998 and 1997, the weighted average ownership interest in the AIMCO
operating partnership held by the OP Unit holders was 9%, 12% and 13%,
respectively.
After holding the OP Units for one year, the limited partners generally
have the right to redeem their OP Units for cash. Notwithstanding that right,
the AIMCO operating partnership may elect to acquire some or all of the OP Units
tendered for redemption in exchange for shares of Class A Common Stock in lieu
of cash.
F-8
<PAGE> 40
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Real Estate and Depreciation
Real estate is recorded at cost, less accumulated depreciation, unless
considered impaired. If events or circumstances indicate that the carrying
amount of a property may be impaired, the Company will make an assessment of its
recoverability by estimating the undiscounted future cash flows, excluding
interest charges, of the property. If the carrying amount exceeds the aggregate
future cash flows, the Company would recognize an impairment loss to the extent
the carrying amount exceeds the fair value of the property. As of December 31,
1999, management believes that no impairments exist based on periodic reviews.
No impairment losses were recognized for the years ended December 31, 1999, 1998
and 1997.
Direct costs associated with the acquisition of ownership or control of
properties are capitalized as a cost of the assets acquired, and are depreciated
over the estimated useful lives of the related assets. Expenditures for ordinary
repairs, maintenance and apartment turnover costs are expensed as incurred.
Initial Capital Expenditures ("ICE") are those costs considered necessary
by the Company in its investment decision to correct deferred maintenance or
improve a property. Capital enhancements are costs incurred that add a material
new feature or increase the revenue potential of a property. ICE and capital
enhancement costs are capitalized and depreciated over the estimated useful
lives of the related assets.
Expenditures in excess of $250 that maintain an existing asset which has a
useful life of more than one year are capitalized as capital replacement
expenditures and depreciated over the estimated useful life of the asset.
Depreciation is calculated on the straight-line method based on a fifteen
to thirty year life for buildings and improvements and five years for furniture,
fixtures and equipment.
Property Held For Sale
Property held for sale is recorded at the lower of carrying amount or fair
value less costs to sell.
Redevelopment
The Company capitalizes direct and indirect costs (including interest,
taxes and other costs) in connection with the redevelopment of its owned or
controlled properties and land under development. Interest of $6.6 million, $2.8
million and $1.3 million was capitalized for the years ended December 31, 1999,
1998 and 1997, respectively.
Investments in Unconsolidated Real Estate Partnerships
The Company owns general and limited partnership interests in numerous
partnerships that own multi-family apartment properties. Investments in real
estate partnerships in which the Company has significant influence but does not
have control are accounted for under the equity method. Under the equity method,
the Company's pro-rata share of the earnings or losses of the entity for the
periods being presented is included in earnings (losses) from unconsolidated
partnerships (see Note 5).
Investments in Unconsolidated Subsidiaries
The Company has investments in numerous subsidiaries. Investments in
entities in which the Company has significant influence but does not have
control are accounted for under the equity method. Under the equity method, the
Company's pro-rata share of the earnings or losses of the entity for the periods
being presented is included in earnings (losses) from unconsolidated
subsidiaries (see Note 6).
F-9
<PAGE> 41
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Notes Receivable from Unconsolidated Real Estate Partnerships and Subsidiaries
The Company has investments in numerous notes receivable, which were either
extended by the Company or were made by predecessors whose positions have been
acquired by the Company. Interest income is recognized on these investments
based upon whether the collectibility of such amounts is both probable and
estimable (see Note 7).
Cash Equivalents
The Company considers highly liquid investments with an original maturity
of three months or less to be cash equivalents.
Restricted Cash
Restricted cash includes capital replacement reserves, completion repair
reserves, bond sinking fund amounts and tax and insurance impound accounts held
by lenders.
Other Assets
Fees and costs incurred in obtaining financing are capitalized and are
included in other assets. Such costs are amortized over the terms of the related
loan agreements and are charged to interest expense.
Certain intangible assets are included in other assets and consist of costs
associated with the purchase of property management businesses, including
property management contracts, legal and other acquisition costs. These costs
are amortized on a straight-line basis over terms ranging from five to twenty
years.
Revenue Recognition
The Company's properties have operating leases with apartment residents
with terms generally of six months or less. Rental revenues and property
management and asset management fees are recognized when earned.
Income Taxes
AIMCO has elected to be taxed as a real estate investment trust ("REIT"),
as defined under the Internal Revenue Code of 1986, as amended. In order for
AIMCO to qualify as a REIT, at least 95% of AIMCO's gross income in any year
must be derived from qualifying sources. The activities of unconsolidated
subsidiaries engaged in the service company business are not qualifying sources.
As a REIT, AIMCO generally will not be subject to U.S. Federal income taxes
at the corporate level if it distributes at least 95% of its REIT taxable income
to its stockholders. REITs are also subject to a number of other organizational
and operational requirements. If AIMCO fails to qualify as a REIT in any taxable
year, its taxable income will be subject to U.S. Federal income tax at regular
corporate rates (including any applicable alternative minimum tax). Even if
AIMCO qualifies as a REIT, it may be subject to certain state and local income
taxes and to U.S. Federal income and excise taxes on its undistributed income.
Earnings and profits, which determine the taxability of dividends to
stockholders, differ from net income reported for financial reporting purposes
due to differences for U.S. Federal tax purposes in the estimated useful lives
and methods used to compute depreciation and the carrying value (basis) of the
investments in
F-10
<PAGE> 42
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
properties, among other things. The following table reconciles the Company's net
income to REIT taxable income for the year ended December 31, 1999:
<TABLE>
<S> <C>
Net income............................................... $ 80,959
Losses from unconsolidated subsidiaries.................. 2,559
Depreciation and amortization expenses not deductible for
tax.................................................... 70,733
Gain on disposition of properties........................ 17,359
Interest income, not taxable............................. (6,583)
Depreciation timing differences on real estate........... 13,881
Dividends on officer stock, not deductible for tax....... 2,435
Transaction and project costs, deductible for tax........ (7,349)
--------
REIT taxable income...................................... $173,994
========
</TABLE>
For income tax purposes, distributions paid to common stockholders consist
of ordinary income, capital gains, return of capital or a combination thereof.
For the years ended December 31, 1999, 1998 and 1997, distributions paid per
share were taxable as follows:
<TABLE>
<CAPTION>
1999 1998 1997
------------------- ------------------- -------------------
AMOUNT PERCENTAGE AMOUNT PERCENTAGE AMOUNT PERCENTAGE
------ ---------- ------ ---------- ------ ----------
<S> <C> <C> <C> <C> <C> <C>
Ordinary income..................... $2.04 82% $0.90 40% $1.74 94%
Return of capital................... 0.16 6% 1.33 59% -- --
Capital gains....................... 0.12 5% -- -- 0.04 2%
Unrecaptured SEC.1250 gain.......... 0.18 7% 0.02 1% 0.07 4%
----- --- ----- --- ----- ---
$2.50 100% $2.25 100% $1.85 100%
===== === ===== === ===== ===
</TABLE>
Earnings Per Share
Earnings per share is calculated based on the weighted average number of
shares of common stock, common stock equivalents and dilutive convertible
securities outstanding during the period (see Note 18).
Fair Value of Financial Instruments
The estimated aggregate fair value of the Company's cash and cash
equivalents, receivables, payables and short-term unsecured debt as of December
31, 1999 is assumed to approximate their carrying value due to their relatively
short terms. Management further believes that the fair market value of the
Company's secured tax-exempt bond debt and secured long-term debt approximate
their carrying value, based on market comparisons to similar types of debt
instruments having similar maturities.
Reclassifications
Certain items included in the 1998 and 1997 consolidated financial
statements have been reclassified to conform with the 1999 presentation.
Use of Estimates
The preparation of the Company's consolidated financial statements in
conformity with accounting principles generally accepted in the United States
requires management to make estimates and assumptions that affect the reported
amounts included in the financial statements and accompanying notes thereto.
Actual results could differ from those estimates.
F-11
<PAGE> 43
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 3 -- REAL ESTATE
Real estate at December 31, 1999 and 1998, is as follows (in thousands):
<TABLE>
<CAPTION>
1999 1998
---------- ----------
<S> <C> <C>
Land........................................................ $ 661,502 $ 413,577
Buildings and improvements.................................. 3,847,033 2,389,021
---------- ----------
4,508,535 2,802,598
Accumulated depreciation.................................... (416,497) (228,880)
---------- ----------
$4,092,038 $2,573,718
========== ==========
</TABLE>
During the years ended December 31, 1999 and 1998, the Company purchased 28
properties (12,721 units) and 82 properties (22,459 units), respectively, and
disposed of eight properties (2,309 units) and five properties (1,468 units),
respectively, as described below.
The Company directly acquired 28 apartment communities in unrelated
transactions during 1999 (not including those acquired in connection with the
merger with Insignia Properties Trust (see Note 4)). The aggregate consideration
paid by the Company of $495.0 million consisted of $91.5 million in cash, 2.4
million Preferred OP Units, 0.9 million common OP Units and 0.5 million shares
of Class A Common Stock with a total recorded value of $116.8 million, the
assumption of $110.1 million of secured long-term indebtedness, the assumption
of $15.2 million of other liabilities, and new financing of $161.4 million of
secured long-term indebtedness. Four of these assets were then contributed to an
unconsolidated subsidiary
The Company directly acquired 30 apartment communities in unrelated
transactions during 1998 (not including those acquired in connection with the
mergers with Ambassador Apartments, Inc. and Insignia Financial Group, Inc. (see
Note 4)). The aggregate consideration paid by the Company of $316.5 million
consisted of $96.0 million in cash, 1.2 million OP Units with a total recorded
value of $48.2 million, and the assumption of $172.3 million of secured
long-term indebtedness.
In addition to the acquisitions described above, in 1999 the Company
acquired controlling interests in partnerships owning 125 properties (34,228
units) and began consolidating these entities. Control was obtained through the
purchase of limited partnership interests from unaffiliated third parties or
other increases in the Company's equity investment in the partnerships.
During 1999, the Company sold eight properties containing 2,309 units to
unaffiliated third parties. Cash proceeds from the sales of approximately $49.0
million were used to repay a portion of the Company's outstanding indebtedness.
The Company recognized a loss of approximately $1.8 million on the disposition
of these properties, of which 96% of the loss related to one property.
During 1998, the Company sold five apartment properties containing 1,468
units to unaffiliated third parties. Cash proceeds from the sales of
approximately $40.1 million were used to repay a portion of the Company's
outstanding indebtedness. The Company recognized a gain of approximately $4.7
million on the disposition of these five properties.
NOTE 4 -- MERGERS
NHP Merger
In May and September 1997, the Company acquired an aggregate of
approximately 6.9 million shares of common stock ("NHP Common Stock") of NHP. On
December 8, 1997, the Company acquired the remaining shares of NHP Common Stock
in a merger transaction accounted for as a purchase (the "NHP Merger"). Pursuant
to the NHP Merger, each outstanding share of NHP Common Stock was converted into
either (i) 0.74766 shares of Class A Common Stock or (ii) at the stockholder's
option, 0.37383 shares of
F-12
<PAGE> 44
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Class A Common Stock and $10.00 in cash. As a result of the NHP Merger, AIMCO
issued approximately 6.8 million shares of Class A Common Stock, valued at
$180.8 million, and paid $86.5 million in cash. The total cost of the purchase
was $349.5 million.
Ambassador Merger
On May 8, 1998, Ambassador Apartments, Inc. ("Ambassador"), was merged with
and into AIMCO, with AIMCO being the surviving corporation. The merger was
accounted for as a purchase. The purchase price of $713.6 million was comprised
of $90.3 million in cash, $372.0 million of assumed debt and approximately 6.6
million shares of Class A Common Stock valued at $251.3 million. Pursuant to the
Ambassador merger agreement, each outstanding share of Ambassador common stock
not owned by AIMCO was converted into the right to receive 0.553 shares of Class
A Common Stock. Concurrently, all outstanding options to purchase Ambassador
common stock were converted into cash or options to purchase Class A Common
Stock, at the same conversion ratio. Contemporaneously with the consummation of
the Ambassador merger, a subsidiary of the AIMCO operating partnership merged
with Ambassador's operating partnership and each outstanding unit of limited
partnership interest in the Ambassador operating partnership was converted into
the right to receive 0.553 OP Units. Prior to its acquisition by AIMCO,
Ambassador was a self-administered and self-managed real estate investment trust
engaged in the ownership and management of garden-style apartment properties
leased primarily to middle income tenants. Ambassador owned 52 apartment
communities with a total of 15,728 units located in Arizona, Colorado, Florida,
Georgia, Illinois, Tennessee and Texas, and managed one property containing 252
units for an unrelated third party.
Insignia Merger
On October 1, 1998, Insignia Financial Group, Inc., a Delaware Corporation,
("Insignia") was merged with and into AIMCO with AIMCO being the surviving
corporation. The merger was accounted for as a purchase. The purchase price of
$1,125.7 million was comprised of the issuance of up to approximately 8.9
million shares of Class E Cumulative Convertible Preferred Stock (the "Class E
Preferred Stock") valued at $301.2 million, $670.1 million in assumed debt and
liabilities (including a $50 million special dividend, assumed liabilities of
Insignia Properties Trust and transaction costs), $149.5 million in assumed
mandatory redeemable convertible preferred securities, and $4.9 million in cash.
The Class E Preferred Stock entitled the holders thereof to receive the same
cash dividends per share as holders of Class A Common Stock. On January 15,
1999, holders of Class E Preferred Stock received a special dividend in an
aggregate amount of approximately $50 million, and all outstanding shares of
Class E Preferred Stock automatically converted into an equal number of shares
of Class A Common Stock.
As a result of the Insignia merger, AIMCO acquired: (i) Insignia's
interests in Insignia Properties Trust, ("IPT"), a Maryland REIT, which was a
majority owned subsidiary of Insignia; (ii) Insignia's interest in Insignia
Properties, L.P., IPT's operating partnership; (iii) 100% of the ownership of
the Insignia entities that provide multifamily property management and
partnership administrative services; (iv) Insignia's interest in multi-family
co-investments; (v) Insignia's ownership of subsidiaries that control
multi-family properties not included in IPT; (vi) Insignia's limited partner
interests in public and private syndicated real estate limited partnerships; and
(vii) assets incidental to the foregoing businesses. Insignia owned or managed
in excess of 170,000 apartment units.
Insignia Properties Trust Merger
As a result of the Insignia merger, AIMCO acquired approximately 51% of the
outstanding shares of beneficial interest of IPT. On February 26, 1999, IPT was
merged into AIMCO. Pursuant to the merger, each of the outstanding shares of IPT
that were not held by AIMCO was converted into the right to receive
F-13
<PAGE> 45
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
0.3601 shares of Class A Common Stock, resulting in the issuance of
approximately 4.3 million shares of Class A Common Stock (with a recorded value
of approximately $158.8 million).
NOTE 5 -- INVESTMENTS IN UNCONSOLIDATED REAL ESTATE PARTNERSHIPS
The Company owns general and limited partner interests in approximately 900
partnerships which it acquired through acquisitions, direct purchases and
separate offers to other limited partners. The Company's total ownership
interests in these unconsolidated real estate partnerships range from 1% to 99%.
However, based on the provisions of the related partnership agreements, which
grant varying degrees of control, the Company does not possess control of these
partnerships.
During 1999 and 1998, the Company made separate offers to the limited
partners of approximately 600 and 300 partnerships, respectively, to acquire
their limited partnership interests. The Company paid approximately $271 million
and $96 million during 1999 and 1998, respectively, in connection with such
tender offers.
The following table provides selected combined financial information for
the Company's unconsolidated real estate partnerships as of and for the years
ended December 31, 1999 and 1998 (in thousands):
<TABLE>
<CAPTION>
1999 1998
---------- ----------
<S> <C> <C>
Real estate, net of accumulated depreciation................ $2,930,748 $3,705,342
Total assets................................................ 3,501,195 4,221,817
Secured notes payable....................................... 2,940,819 3,234,310
Total liabilities........................................... 3,536,646 3,547,859
Partners' capital (deficit)................................. (35,451) 673,958
Rental and other property revenues.......................... 1,120,888 873,531
Property operating expenses................................. (582,523) (524,010)
Depreciation expense........................................ (237,066) (151,569)
Interest expense............................................ (269,163) (220,134)
Net income (loss)........................................... 42,106 (12,468)
</TABLE>
NOTE 6 -- INVESTMENTS IN UNCONSOLIDATED SUBSIDIARIES
In order to satisfy certain requirements of the Internal Revenue Code
applicable to AIMCO's status as a REIT, certain assets of the Company are held
through corporations in which the AIMCO operating partnership holds non-voting
preferred stock and certain officers and/or directors of AIMCO hold, directly or
indirectly, all of the voting common stock. Effective January 1, 1999, a portion
of the voting common stock was purchased by the Company and was exchanged for
non-voting preferred stock, bringing the total voting common stock interests to
represent a 1% economic interest and the non-voting preferred stock to represent
a 99% economic interest.
As a result of the controlling ownership interest in the unconsolidated
subsidiaries being held by others, AIMCO accounts for its interest in the
unconsolidated subsidiaries using the equity method. As of December 31, 1999,
the unconsolidated subsidiaries included AIMCO/NHP Holdings, Inc., AIMCO/NHP
Properties, Inc., NHP Management Company, and NHP A&R Services, Inc.
F-14
<PAGE> 46
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The following table provides selected combined financial information for
the Company's unconsolidated subsidiaries as of and for the years ended December
31, 1999 and 1998 (in thousands):
<TABLE>
<CAPTION>
1999 1998
--------- --------
<S> <C> <C>
Management contracts........................................ $ 25,181 $122,291
Total assets................................................ 166,019 236,976
Total liabilities........................................... 128,423 169,560
Stockholders' equity........................................ 37,596 67,416
Service company revenues.................................... 139,667 99,845
Service company expenses.................................... (133,231) (70,771)
Interest expense............................................ (7,832) (7,699)
Net income (loss)........................................... (2,848) 12,177
</TABLE>
NOTE 7 -- INTEREST INCOME RECOGNITION
The Company recognizes interest income earned from its investments in notes
receivable based upon whether the collectibility of such amounts is both
probable and estimable. The notes receivable were either extended by the Company
and are carried at the face amount plus accrued interest ("par value notes") or
were made by predecessors whose positions have been acquired by the Company at a
discount and are carried at the acquisition amount using the cost recovery
method ("discounted notes").
As of December 31, 1999 and 1998, the Company held $157.3 million and
$212.3 million, respectively, of par value notes, including accrued interest,
for which management believes the collectibility of such amounts is both
probable and estimable. As such, interest income from the par value notes is
generally recognized as it is earned. Interest income from such notes for the
year ended December 31, 1999, 1998 and 1997, totaled $12.8 million, $15.3
million, and $0.4 million, respectively. The decrease in the Company's
investment in par value notes from December 31, 1998 to December 31, 1999 is
primarily due to a reduction in certain notes receivable from the unconsolidated
subsidiaries during 1999.
As of December 31, 1999 and 1998, the Company held discounted notes,
including accrued interest, with a carrying value of $92.5 million and $52.0
million, respectively. The total face value plus accrued interest of these notes
was $173.1 million at December 31, 1999. In general, interest income from the
discounted notes is not recognized as it is earned because the timing and
amounts of cash flows are not probable and estimable. The increase in the
Company's investment in discounted notes from December 31, 1998 to December 31,
1999 is primarily due to a purchase of a portfolio of discounted notes for
approximately $26.1 million.
Under the cost recovery method, the discounted notes are carried at the
acquisition amount, less subsequent cash collections, until such time as
collectibility is probable and the timing and amounts are estimable. Based upon
closed or pending transactions (including sales activity), market conditions,
and improved operations of the obligor, among other things, certain notes and
the related discounts have been determined to be collectible. Accordingly,
interest income that had previously been deferred and portions of the related
discounts were recognized as interest income during the period. For the years
ended December 31, 1999 and 1998, the Company recognized deferred interest
income and discounts of approximately $32.5 million ($0.52 per basic and $0.51
per diluted share), and $1.4 million ($0.03 per basic and diluted share),
respectively. There was no recognition of deferred interest income and discounts
for the year ended December 31, 1997.
NOTE 8 -- SECURED NOTES PAYABLE
During 1999, the Company issued $392.5 million of long-term fixed rate,
fully amortizing non-recourse notes payable with a weighted average interest
rate of 7.3%. Each of the notes is individually secured by one of
F-15
<PAGE> 47
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
thirty-eight properties with no cross-collateralization. The Company used the
net proceeds after transaction costs of $356.3 million to repay existing debt.
The following table summarizes the Company's secured notes payable at
December 31, 1999 and 1998, all of which are non-recourse to the Company (in
thousands):
<TABLE>
<CAPTION>
1999 1998
---------- --------
<S> <C> <C>
Fixed rate, ranging from 5.99% to 10.13%, fully-amortizing
notes maturing at various dates through 2034.............. $1,597,772 $659,953
Fixed rate, ranging from 5.00% to 10.63%, non-amortizing
notes maturing at various dates through 2029.............. 356,487 178,258
Floating rate, ranging from 5.0% to 7.1%, non-amortizing
notes..................................................... -- 5,580
---------- --------
Total............................................. $1,954,259 $843,791
========== ========
</TABLE>
As of December 31, 1999, the scheduled principal amortization and balloon
payments for the Company's secured notes payable are as follows (in thousands):
<TABLE>
<S> <C>
2000........................................................ $ 30,074
2001........................................................ 78,739
2002........................................................ 57,144
2003........................................................ 129,448
2004........................................................ 178,886
Thereafter.................................................. 1,479,968
----------
$1,954,259
==========
</TABLE>
NOTE 9 -- SECURED TAX-EXEMPT BOND FINANCING
During 1999, the Company issued $17.8 million of long-term fixed rate,
fully amortizing non-recourse tax-exempt bonds with a weighted average interest
rate of 7.1%. Each of the bonds is individually secured by one of two properties
with no cross-collateralization. The Company used the net proceeds after
transaction costs of $17.3 million to repay existing debt.
In December 1998, the Company completed the refinancing of $222 million in
variable rate tax-exempt debt assumed in conjunction with the May 1998 merger
with Ambassador Apartments, Inc. The debt was secured by 27 properties located
in Texas, Arizona, Tennessee and Illinois. Through the refinancing, the Company
converted the previous tax-exempt debt to $204 million in fixed rate, fully
amortizing tax-exempt debt secured by 26 properties. The new debt has a weighted
average interest rate of 5.8% and matures in 22 years. The Company also incurred
$7.1 million of taxable debt secured by three of the properties, repaid $11.4
million of the previous tax-exempt debt, released $21.5 million in cash reserves
and impound accounts held by the prior mortgagors, and released two properties
that served as additional collateral for the previous debt.
F-16
<PAGE> 48
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The following table summarizes the Company's secured tax-exempt bond
financing at December 31, 1999 and 1998, all of which is non-recourse to the
Company (in thousands):
<TABLE>
<CAPTION>
1999 1998
-------- --------
<S> <C> <C>
7.0% fully-amortizing bonds, due July 2016.................. $ 43,889 $ 45,237
6.9% fully-amortizing bonds, due July 2016.................. 8,987 9,267
Fixed rate fully-amortizing bonds, ranging from 5.1% to
5.8%, due 2021............................................ 157,578 159,555
Fixed rate fully-amortizing bonds, ranging from 6.5% to
7.3%, due at various dates through 2028................... 79,866 78,926
Fixed rate non-amortizing bonds, ranging from 5.0% to 8.19%,
due at various dates through 2017......................... 50,158 55,747
4.0% interest-only bonds, due December 2020................. 4,453 4,525
Floating rate non-amortizing bonds, due 2001 and 2008....... 31,689 --
Variable rate bonds, ranging from 4.9% to 5.3%, due 2021.... 44,210 45,345
-------- --------
Total............................................. $420,830 $398,602
======== ========
</TABLE>
As of December 31, 1999, the scheduled principal amortization and balloon
payments for the Company's secured tax-exempt bonds are as follows (in
thousands):
<TABLE>
<S> <C>
2000........................................................ $ 21,761
2001........................................................ 13,978
2002........................................................ 9,752
2003........................................................ 10,239
2004........................................................ 26,842
Thereafter.................................................. 338,258
--------
$420,830
========
</TABLE>
NOTE 10 -- UNSECURED SHORT-TERM FINANCING
In August 1999, the Company closed a $300 million revolving credit facility
arranged by Bank of America, N.A., BankBoston, N.A. and First Union National
Bank and comprised of a total of nine lender participants. The obligations under
the credit facility are secured by certain non-real estate assets of the
Company. The existing lines of credit were terminated. The credit facility is
used for general corporate purposes and has a two-year term with two one-year
extensions. The annual interest rate under the credit facility is based on
either LIBOR or a base rate which is the higher of Bank of America's reference
rate or 0.5% over the federal funds rate, plus, in either case, an applicable
margin. The margin ranges between 2.05% and 2.55%, in the case of LIBOR-based
loans, and between 0.55% and 1.05%, in the case of base rate loans, based upon a
fixed charge coverage ratio. At December 31, 1999, the weighted average interest
rate was 8.84%, the balance was $209.2 million, and the remaining available
credit was $90.8 million.
NOTE 11 -- SECURED SHORT-TERM FINANCING
In February 1999, the Company terminated its $50 million secured credit
facility with Washington Mortgage Financial Group, Ltd. and repaid all
outstanding borrowings with proceeds from new long-term, fully amortizing notes
payable totaling $58.2 million secured by certain properties that previously
secured the credit facility.
F-17
<PAGE> 49
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 12 -- COMMITMENTS AND CONTINGENCIES
Legal
The Company is a party to various legal actions resulting from its
operating activities. These actions are routine litigation and administrative
proceedings arising in the ordinary course of business, some of which are
covered by liability insurance, and none of which are expected to have a
material adverse effect on the consolidated financial condition or results of
operations of the Company and its subsidiaries taken as a whole.
Limited Partnerships
In connection with the Company's offers to purchase interests in limited
partnerships that own properties, the Company and its affiliates are sometimes
subject to legal actions, including allegations that such activities may involve
breaches of fiduciary duties to the limited partners of such partnerships or
violations of the relevant partnership agreements. The Company believes it
complies with its fiduciary obligations and relevant partnership agreements, and
does not expect such legal actions to have a material adverse effect on the
consolidated financial condition or results of operations of the Company and its
subsidiaries taken as a whole.
Pending Investigations of HUD Management Arrangements
In 1997, NHP received subpoenas from the HUD Inspector General ("IG")
requesting documents relating to arrangements whereby NHP or any of its
affiliates provides compensation to owners of HUD-assisted or HUD-insured
multi-family projects in exchange for or in connection with property management
of a HUD project. In July 1999, NHP received a grand jury subpoena requesting
documents relating to the same subject matter as the HUD IG subpoenas and NHP's
operation of a group purchasing program created by NHP, known as Buyers Access.
To date, neither the HUD IG nor the grand jury has initiated any action against
NHP or AIMCO or, to NHP's or AIMCO's knowledge, any owner of a HUD property
managed by NHP. AIMCO believes that NHP's operations and programs are in
compliance, in all material respects, with all laws, rules and regulations
relating to HUD-assisted or HUD-insured properties. AIMCO is cooperating with
the investigations and does not believe that the investigations will result in a
material adverse impact on its operations. However, as with any similar
investigation, there can be no assurance that these will not result in material
fines, penalties or other costs.
Environmental
The Company is subject to various Federal, state and local laws that impose
liability on property owners or operators for the costs of removal or
remediation of certain hazardous substances present on a property. Such laws
often impose liability without regard to whether the owner or operator knew of,
or was responsible for, the release of the hazardous substances. The presence
of, or the failure to properly remediate, hazardous substances may adversely
affect occupancy at contaminated apartment communities and our ability to sell
or borrow against contaminated properties. In addition to the costs associated
with investigation and remediation actions brought by governmental agencies, the
presence of hazardous wastes on a property could result in personal injury or
similar claims by private plaintiffs. The Company is also subject to various
laws that impose liability for the cost of removal or remediation of hazardous
substances at a disposal or treatment facility. Anyone who arranges for a
disposal or treatment of hazardous or toxic substances is potentially liable
under such laws. These laws often impose liability whether or not the person
arranging for the disposal ever owned or operated the disposal facility. In
connection with the ownership, operation and management of our properties, we
could potentially be liable for environmental liabilities or costs associated
with our properties or properties we may acquire or manage in the future.
F-18
<PAGE> 50
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Operating Leases
The Company is obligated under office space and equipment non-cancelable
operating leases. In addition, the Company subleases certain of its office space
to tenants under non-cancelable subleases. Approximate minimum annual rentals
under operating leases and approximate minimum payments to be received under
annual subleases for the five years ending after December 31, 1999 are as
follows (in thousands):
<TABLE>
<CAPTION>
OPERATING LEASE SUBLEASE
PAYMENTS PAYMENTS
--------------- --------
<S> <C> <C>
2000................................................. $11,792 $3,037
2001................................................. 10,429 2,250
2002................................................. 5,295 81
2003................................................. 3,602 --
2004................................................. 2,936 --
------- ------
Total................................................ $34,054 $5,368
======= ======
</TABLE>
Under the Company's current operating structure, substantially all of the
office space and equipment subject to the operating leases described above are
for the use of its regional operating centers, which are operated by certain of
the Company's unconsolidated subsidiaries (see Note 6). Rent expense recognized
by the unconsolidated subsidiaries totaled $5.8 and $6.2 million in 1999 and
1998, respectively. Rent expense recognized by the Company totaled $0.7 million
in 1997. Sublease payments for 1999, 1998 and 1997 were not material.
NOTE 13 -- TRUST BASED CONVERTIBLE PREFERRED SECURITIES
In connection with the Insignia merger, the Company assumed the obligations
under the Trust Based Convertible Preferred Securities (the "Securities") with
an aggregate liquidation amount of $149.5 million. The Securities will mature on
September 30, 2016 and require distributions at the rate of 6.5% per annum, with
quarterly distributions payable in arrears. The Securities are convertible by
the holders at any time through September 30, 2016 and may be redeemed by the
Company on or after November 1, 1999. Each $50 of liquidation value of the
Securities can be converted into Class A Common Stock at a conversion price of
$49.61, which equates to 1.007 shares of Class A Common Stock.
NOTE 14 -- TRANSACTIONS INVOLVING MINORITY INTEREST IN OPERATING PARTNERSHIP
In 1999, the Company completed tender offers for limited partnership
interests resulting in the issuance of 1,084,000 Common OP Units, 11,000 Class
Two Preferred OP Units, 1,682,000 Class Three Preferred OP Units, and 580,000
Class Four Preferred OP Units.
In 1998, the Company acquired Calhoun Beach Club Apartments, a 351 unit,
high-rise apartment community and 83,300 square feet of commercial space for
approximately $77.1 million, including the issuance of 90,000 Class One
Preferred OP Units valued at $9.0 million and approximately 100,300 common OP
units valued at $4.1 million. The Company also withheld, as contingent
consideration, approximately 109,800 common OP units valued at approximately
$4.5 million. In September 1999, the contingent consideration was met and the
109,800 common OP units were issued.
F-19
<PAGE> 51
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
As of December 31, 1999 and 1998, the following amounts of preferred OP
Units are outstanding (in thousands):
<TABLE>
<CAPTION>
1999 1998
----- ----
<S> <C> <C>
Class One Partnership Preferred Units, redeemable to Class A
Common Stock in one year,
holder to receive dividends at 8% ($2.00 per annum per
unit)..................................................... 90 90
Class Two Partnership Preferred Units, redeemable to Class A
Common Stock in one year,
holders to receive dividends at 8% ($2.00 per annum per
unit)..................................................... 11 --
Class Three Partnership Preferred Units, redeemable to Class
A Common Stock in one
year, holders to receive dividends at 9.5% ($2.375 per
annum per unit)........................................... 1,682 --
Class Four Partnership Preferred Units, redeemable to Class
A Common Stock in two
years, holders to receive dividends at 8% ($2.00 per annum
per unit)................................................. 580 --
--
-----
2,363 90
--
--
=====
</TABLE>
On December 14, 1998, the Company sold, in a private placement, 1.4 million
Class B partnership preferred units of a subsidiary of the AIMCO operating
partnership for $30.85 million. The partnership units may be redeemed at the
option of the holders at any time, and at the option of the Company under
certain circumstances. Any redemption of the units may be satisfied by delivery
of cash, Class A Common Stock or OP Units.
NOTE 15 -- REGISTRATION STATEMENTS
In August 1998, AIMCO and the AIMCO operating partnership filed a shelf
registration statement with the Securities and Exchange Commission with respect
to an aggregate of $1,268 million of debt and equity securities of AIMCO (of
which $268 million was carried forward from a 1997 shelf registration statement)
and $500 million of debt securities of the AIMCO operating partnership. The
registration statement was declared effective by the SEC on December 10, 1998.
As of December 31, 1999, the Company had $1,088 million available and the AIMCO
operating partnership had $500 million available from this registration
statement. The Company expects to finance pending acquisitions of real estate
interests with the issuance of equity and debt securities under the shelf
registration statement.
F-20
<PAGE> 52
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 16 -- STOCKHOLDERS' EQUITY
Preferred Stock
At December 31, 1999 and 1998, the Company had the following classes of
preferred stock outstanding:
<TABLE>
<CAPTION>
1999 1998
-------- --------
<S> <C> <C>
Class B Cumulative Convertible Preferred Stock, $.01 par
value, 750,000 shares authorized, 750,000 and 750,000
shares issued and outstanding............................. $ 75,000 $ 75,000
Class C Cumulative Preferred Stock, $.01 par value,
2,400,000 shares authorized, 2,400,000 and 2,400,000
shares issued and outstanding; dividends payable at 9.0%,
per annum................................................. 60,000 60,000
Class D Cumulative Preferred Stock, $.01 par value,
4,200,000 shares authorized, 4,200,000 and 4,200,000
shares issued and outstanding; dividends payable at 8.75%,
per annum................................................. 105,000 105,000
Class G Cumulative Preferred Stock, $.01 par value,
4,050,000 shares authorized, 4,050,000 and 4,050,000
shares issued and outstanding; dividends payable at
9.375%, per annum......................................... 101,250 101,250
Class H Cumulative Preferred Stock, $.01 par value,
2,000,000 shares authorized, 2,000,000 and 2,000,000
shares issued and outstanding; dividends payable at 9.5%,
per annum................................................. 50,000 50,000
Class J Cumulative Convertible Preferred Stock, $.01 par
value, 1,250,000 shares authorized, 250,000 and 1,250,000
shares issued and outstanding............................. -- 100,000
Class K Convertible Cumulative Preferred Stock, $.01 par
value, 5,000,000 shares authorized, 5,000,000 and no
shares issued and outstanding............................. 125,000 --
Class L Convertible Cumulative Preferred Stock, $.01 par
value, 5,000,000 shares authorized, 5,000,000 and no
shares issued and outstanding............................. 125,000 --
Class E Cumulative Convertible Preferred Stock, $.01 par
value, no shares authorized, no shares and 8,423,658
shares issued and outstanding............................. -- 301,218
-------- --------
$641,250 $792,468
======== ========
</TABLE>
All classes of preferred stock are on equal parity and are senior to the
Class A Common Stock, except the Class E Preferred Stock, which was junior to
all other classes of preferred stock and senior to the Class A Common Stock. The
holders of each class of preferred stock are generally not entitled to vote on
matters submitted to stockholders.
Holders of the Class B Cumulative Convertible Preferred Stock (the "Class B
Preferred Stock") are entitled to receive, when, as and if declared by the Board
of Directors, quarterly cash dividends per share equal to the greater of
$1.78125 or the cash dividends declared on the number of shares of Class A
Common Stock into which one share of Class B Preferred Stock is convertible.
Each share of Class B Preferred Stock is convertible at the option of the
holder, beginning August 1998, into 3.28407 shares of Class A Common Stock,
subject to certain anti-dilution adjustments.
Holders of the Class J Cumulative Convertible Preferred Stock (the "Class J
Preferred Stock") were entitled to receive cash dividends at the rate of 7% per
annum of the $100 liquidation preference (equivalent to $7 per annum per share)
for the period beginning November 6, 1998 and lasting until November 15, 1998,
and 8% per annum of the liquidation preference (equivalent to $8 per annum per
share) for the period beginning November 15, 1998 and lasting until November 15,
1999. On May 14, 1999, the Company notified the holders of the Class J Preferred
Stock that the defined internal rate of return threshold had been met, and the
Company exercised its right to convert all of the Class J Preferred Stock into
2.5 million shares of Class A Common Stock.
F-21
<PAGE> 53
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Class K Convertible Cumulative Preferred Stock (the "Class K Preferred
Stock"), which was issued on February 18, 1999, are entitled to receive cash
dividends in an amount per share equal to the greater of (i) $2.00 per year
(equivalent to 8% of the liquidation preference), or (ii) the cash dividends
payable on the number of shares of Class A Common Stock into which a share of
Class K Preferred Stock is convertible. Beginning with the third anniversary of
the date of original issuance, holders of Class K Preferred Stock will be
entitled to receive an amount per share equal to the greater of (i) $2.50 per
year (equivalent to 10% of the liquidation preference), or (ii) the cash
dividends payable on the number of Class A Common Stock into which a share of
Class K Preferred is convertible.
Holder of Class L Convertible Cumulative Preferred Stock (the "Class L
Preferred Stock"), which was issued on May 28, 1999, are entitled to receive
cash dividends in an amount per share equal to the greater of (i) $2.025 per
year (equivalent to 8.1% of the liquidation preference), or (ii) the cash
dividends payable on the number of shares of Class A Common Stock into which a
share of Class L Preferred Stock is convertible. Beginning with the third
anniversary of the date of original issuance, the holder of Class L Preferred
Stock will be entitled to receive an amount per share equal to the greater of
(i) $2.50 per year (equivalent to 10% of the liquidation preference), or (ii)
the cash dividends payable on the number of shares of Class A Common Stock into
which a share of Class L Preferred Stock is convertible.
The Class E Preferred Stock was issued in connection with the Insignia
merger. Holders of Class E Preferred Stock were entitled to receive the same
cash dividends per share as holders of Class A Common Stock. In addition, on
January 15, 1999, holders of Class E Preferred Stock received a special dividend
in an aggregate amount of approximately $50 million. Concurrently with the
payment of such special dividend, all outstanding shares of Class E Preferred
Stock automatically converted into an equal number of shares of Class A Common
Stock.
The dividends paid on each class of preferred stock for the years ended
December 31, 1999, 1998, and 1997 are as follows (in thousands, except per share
data):
<TABLE>
<CAPTION>
1999 1998 1997
-------------------- -------------------- -------------------
AMOUNT TOTAL AMOUNT TOTAL AMOUNT TOTAL
CLASS OF PER AMOUNT PER AMOUNT PER AMOUNT
PREFERRED STOCK SHARE(1) PAID SHARE(1) PAID SHARE(1) PAID
- --------------- -------- ------- -------- ------- -------- ------
<S> <C> <C> <C> <C> <C> <C>
Class B........................ $8.21 $ 6,158 $7.39 $ 5,542 $1.13(2) $846
Class C........................ 2.25 5,400 1.89(3) 4,538 -- --
Class D........................ 2.19 9,188 1.40(3) 5,869 -- --
Class E........................ -- -- 0.22(4) 1,892 -- --
Class G........................ 2.34 9,492 0.59(3) 2,373 -- --
Class H........................ 2.38 4,750 0.40(3) 805 -- --
Class J........................ 3.16(5) 3,956 0.14(3) 175 -- --
Class K........................ 1.50(6) 7,500 -- -- -- --
Class L........................ 1.01(6) 5,063 -- -- -- --
------- ------- ----
$51,507 $21,194 $846
======= ======= ====
</TABLE>
- ---------------
(1) Amounts per share are calculated based on number of preferred shares
outstanding at the end of each year.
(2) For the period from the date of issuance to December 31, 1997.
(3) For the period from the date of issuance to December 31, 1998.
(4) For the period from the date of issuance to December 31, 1998. The Class E
Preferred Stock was converted to Class A Common Stock on January 15, 1999.
(5) For the period from January 1, 1999 to the date of conversion to Class A
Common Stock.
(6) For the period from the date of issuance to December 31, 1999.
F-22
<PAGE> 54
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Common Stock
During 1999 and 1998, the Company issued approximately 215,000 and 600,000
shares, respectively, of Class A Common Stock to certain executive officers (or
entities controlled by them) at market prices. In exchange for the shares
purchased, the executive officers (or entities controlled by them) executed
notes payable totaling $8.2 million and $23.5 million, respectively. Total
payments on such notes from officers in 1999 and 1998 were $6.2 million and $8.9
million, respectively. In addition, in 1999 and 1998, the Company issued
approximately 37,000 and 40,000 restricted shares of Class A Common Stock,
respectively, to certain executive officers.
On September 15, 1999, the Company completed a direct placement of
1,382,580 shares of Class A Common Stock at a net price of $39.50 per share to
five institutional investors. The net proceeds of approximately $54.6 million
were used to repay outstanding indebtedness under the new credit facility.
During 1999, the Company repurchased 205,300 shares of Class A Common Stock
at an average price of $38.82 per share.
NOTE 17 -- STOCK OPTION PLANS AND STOCK WARRANTS
The Company has adopted the 1994 Stock Option Plan of Apartment Investment
and Management Company (the "1994 Plan"), the Apartment Investment and
Management Company 1996 Stock Award and Incentive Plan (the "1996 Plan"), the
Apartment Investment and Management Company 1997 Stock Award and Incentive Plan
(the "1997 Plan") and the Apartment Investment and Management Company Non-
Qualified Employee Stock Option Plan (the "Non-Qualified Plan") to attract and
retain officers, key employees and independent directors. The 1994 Plan provides
for the granting of a maximum of 150,000 options to purchase common shares. The
1996 Plan provides for the granting of a maximum of 500,000 options to purchase
common shares. The 1997 Plan provides for the granting of a maximum of
20,000,000 options to purchase common shares. The Non-Qualified Plan provides
for the granting of a maximum of 500,000 options to purchase common shares. The
1994 Plan, the 1996 Plan, the 1997 Plan and the Non-Qualified Plan allow for the
grant of incentive and non-qualified stock options, and are administered by the
Compensation Committee of the Board of Directors. The 1994 Plan also provides
for a formula grant of the non-qualified stock options to the independent
directors to be administered by the Board of Directors to the extent necessary.
The exercise price of the options granted may not be less than the fair market
value of the common stock at the date of grant. The term of the incentive and
non-qualified options is ten years from the date of grant. The options vest over
a one to five-year period from the date of grant. Terms may be modified at the
discretion of the Compensation Committee of the Board of Directors.
The Company has elected to follow Accounting Principles Board Opinion No.
25, Accounting for Stock Issued to Employees ("APB 25") and related
interpretations in accounting for its employee stock options because, as
discussed below, the alternative fair value accounting provided for under
Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based
Compensation ("SFAS 123"), requires the use of option valuation models that were
not developed for use in valuing employee stock options and warrants. Under APB
25, because the exercise price of the Company's employee stock options and
warrants equals the market price of the underlying stock on the date of grant,
no compensation expense is recognized.
Pro forma information regarding net income and earnings per share is
required by SFAS 123, which also requires that the information be determined as
if the Company had accounted for its employee stock options and warrants granted
subsequent to December 31, 1994 under the fair value method. The fair value for
these
F-23
<PAGE> 55
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
options and warrants were estimated at the date of grant using a Black-Scholes
valuation model with the following assumptions:
<TABLE>
<CAPTION>
1999 1998 1997
---------- ---------- ----------
<S> <C> <C> <C>
4.5% to 4.4% to 5.8% to
Range of risk free interest rates........... 6.5% 5.6% 6.6%
Expected dividend yield..................... 6.6% 6.0% 6.0%
Volatility factor of the expected market
price of the Company's common stock....... 0.183 0.183 0.175
Weighted average expected life of options... 4.5 years 4.5 years 4.5 years
</TABLE>
The Black-Scholes valuation model was developed for use in estimating the
fair value of traded options and for warrants which have no vesting restrictions
and are fully transferable. In addition, the valuation model requires the input
of highly subjective assumptions including the expected stock price volatility.
Because the Company's stock options and warrants have characteristics
significantly different from those of traded options and warrants, and because
changes in the subjective input assumptions can materially affect the fair value
estimate, in management's opinion, the existing model does not necessarily
provide a reliable single measure of the fair value of its employee stock
options and warrants.
For purposes of pro forma disclosures, the estimated fair values of the
options are amortized over the options' vesting period. The Company's pro forma
information for the years ended December 31, 1999, 1998 and 1997 is as follows
(in thousands, except per share data):
<TABLE>
<CAPTION>
1999 1998 1997
------- ------- -------
<S> <C> <C> <C>
Pro forma net income attributable to common
stockholders.......................................... $17,606 $34,396 $26,096
Pro forma basic earnings per common share............... $ 0.28 $ 0.76 $ 1.00
Pro forma diluted earnings per common share............. $ 0.28 $ 0.75 $ 1.00
</TABLE>
The effects of applying SFAS 123 in calculating pro forma income
attributable to common stockholders and pro forma basic earnings per share may
not necessarily be indicative of the effects of applying SFAS 123 to future
years' earnings.
F-24
<PAGE> 56
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The following table summarizes the option and warrants activity for the
years ended December 31, 1999, 1998 and 1997:
<TABLE>
<CAPTION>
1999 1998 1997
-------------------- -------------------- --------------------
WEIGHTED WEIGHTED WEIGHTED
OPTIONS AVERAGE OPTIONS AVERAGE OPTIONS AVERAGE
AND EXERCISE AND EXERCISE AND EXERCISE
WARRANTS PRICE WARRANTS PRICE WARRANTS PRICE
--------- -------- --------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at
beginning of year.... 7,450,000 $36.21 1,684,000 $30.53 505,000 $20.74
Granted................ 1,000,000 37.14 5,811,000 37.78 627,000 38.77
Assumed in connection
with acquisitions.... -- -- 671,000 25.99 995,000 24.77
Exercised.............. (490,000) 13.78 (661,000) 25.19 (437,000) 18.11
Forfeited.............. (175,000) 34.68 (55,000) 35.71 (6,000) 18.50
--------- ------ --------- ------ --------- ------
Outstanding at end of
year................. 7,785,000 $37.78 7,450,000 $36.21 1,684,000 $30.53
Exercisable at end of
year................. 1,643,000 $37.55 1,793,000 $31.69 690,000 $19.95
Weighted-average fair
value of options and
warrants granted
during the year...... $ 3.41 $ 3.70 $ 3.24
</TABLE>
At December 31, 1999, exercise prices for outstanding and exercisable
options range from $15.21 to $43.85 and warrants range from $36.00 to $51.67,
and the remaining weighted-average contractual life of the options and warrants
is 9.06 years.
On June 3, 1997, AIMCO issued warrants (the "NHP Warrants") exercisable to
purchase an aggregate of 399,999 shares of Class A Common Stock at $36 per share
at any time prior to June 3, 2002. The NHP Warrants were issued as part of the
consideration for the NHP Real Estate Companies.
On December 2, 1997, AIMCO issued warrants (the "Oxford Warrants")
exercisable to purchase up to an aggregate of 500,000 shares of Class A Common
Stock at $41 per share. The Oxford Warrants were issued to affiliates of Oxford
Realty Financial Group, Inc., a Maryland corporation ("Oxford"), in connection
with the amendment of certain agreements pursuant to which the Company manages
properties controlled by Oxford or its affiliates. The actual number of shares
of Class A Common Stock for which the Oxford Warrants will be exercisable is
based on certain performance criteria with respect to the Company's management
arrangements with Oxford for each of the five years ending December 31, 2001.
The Oxford Warrants are exercisable for six years after the determination of
such criteria for each of the five years.
In connection with the Insignia merger, the Company assumed warrants that
allowed the holders to purchase shares of Class A Common Stock at prices ranging
from approximately $4 to $52 per share. As of December 31, 1999, approximately
15,000 of the Insignia warrants were still outstanding.
On December 14, 1998, the Company sold, in a private placement, a warrant
to purchase 875,000 shares of Class A Common Stock for $4.15 million. The
warrant has an exercise price of $40 per share. The warrant may be exercised at
any time, and expires upon a redemption of the Class B partnership preferred
units issued by a subsidiary of the AIMCO Operating Partnership (see Note 14).
F-25
<PAGE> 57
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 18 EARNINGS PER SHARE
The following table illustrates the calculation of basic and diluted
earnings per share for the years ended December 31, 1999, 1998 and 1997 (in
thousands, except per share data):
<TABLE>
<CAPTION>
1999 1998 1997
-------- -------- -------
<S> <C> <C> <C>
Numerator:
Net income............................................ $ 80,959 $ 64,474 $28,633
Preferred stock dividends............................. (56,885) (26,533) (2,315)
-------- -------- -------
Numerator for basic and diluted earnings per
share -- income attributable to common
stockholders........................................ $ 24,074 $ 37,941 $26,318
======== ======== =======
Denominator:
Denominator for basic earnings per share -- weighted
average number of shares of common stock
outstanding......................................... 62,242 45,187 24,055
Effect of dilutive securities:
Dilutive potential common shares...................... 1,204 2,437 381
-------- -------- -------
Denominator for diluted earnings per share............ 63,446 47,624 24,436
======== ======== =======
Basic earnings per common share:
Operations.......................................... $ 0.42 $ 0.74 $ 0.99
Gain on disposition of properties................... (0.03) 0.10 0.11
Extraordinary item.................................. -- -- (0.01)
-------- -------- -------
Total....................................... $ 0.39 $ 0.84 $ 1.09
======== ======== =======
Diluted earnings per common share:
Operations.......................................... $ 0.41 $ 0.70 $ 0.98
Gain on dispositions of properties.................. (0.03) 0.10 0.11
Extraordinary item.................................. -- -- (0.01)
-------- -------- -------
Total....................................... $ 0.38 $ 0.80 $ 1.08
======== ======== =======
</TABLE>
The Class B Preferred Stock, the Class J Preferred Stock, the Class K
Preferred Stock, and the Class L Preferred Stock are convertible into Class A
Common Stock (see Note 16). The Class C Preferred Stock, the Class D Preferred
Stock, the Class G Preferred Stock, and the Class H Preferred Stock are not
convertible.
NOTE 19 RECENT ACCOUNTING DEVELOPMENTS
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, Accounting for Derivative Instruments
and Hedging Activities ("Statement 133"). Statement 133 requires recording all
derivative instruments as assets or liabilities, measured at fair value.
Statement 133 is effective beginning after 2000. The Company has elected not to
early adopt the provisions of Statement 133 as of December 31, 1999 and when
Statement 133 is adopted, the Company does not expect the Statement to have a
significant impact on its financial position and results of operations.
NOTE 20 TRANSACTIONS WITH AFFILIATES
In January 1998, AIMCO's operating partnership sold an aggregate of 15,000
of its Class I High Performance Partnership Units (the "High Performance Units")
to a joint venture of twelve members of AIMCO's senior management and three of
its independent directors for $2.1 million in cash. The High Performance Units
have nominal value unless the Company's total return, defined as dividend income
plus share price appreciation, over the three year period ending December 31,
2000, is at least 30% and exceeds the industry average, as determined by a peer
group index, by at least 15% (the "Total Return"). At the
F-26
<PAGE> 58
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
conclusion of the three year period, if the Company's Total Return satisfies
these criteria, the holders of the High Performance Units will receive
distributions and allocations of income and loss from the AIMCO operating
partnership in the same amounts and at the same times as would holders of a
number of OP Units equal to the quotient obtained by dividing the product of
(i)(a) 15% of the amount by which the Company's cumulative Total Return over the
three year period exceeds the greater of 115% of a peer group index or 30% (such
excess being the "Excess Return"), multiplied by (b) the weighted average market
value of the Company's outstanding Class A Common Stock and OP Units, by (ii)
the market value of one share of Class A Common Stock at the end of the three
year period. The three year measurement period will be shortened in the event of
a change of control of the Company. Unlike OP Units, the High Performance Units
are not redeemable or convertible into Class A Common Stock unless a change of
control of the Company occurs. Because there is substantial uncertainty that the
High Performance Units will have more than nominal value due to the required
Total Return over the three year term, the Company has not recorded any value to
the High Performance Units. If the measurement period had ended December 31,
1999, the Excess Return would have been $83.8 million and the value of the High
Performance Units would have been $12.6 million.
Fees earned based on services provided by the Company, as general partner,
to real estate partnerships for customary services including refinancing,
construction supervisory and disposition fees for the years ended December 31,
1999 and 1998 were $14.2 million and $6.4 million, respectively. Fees earned by
the Company for the year ended December 31, 1997 were not significant.
NOTE 21 EMPLOYEE BENEFIT PLANS
The Company offers medical, dental, life and short-term and long-term
disability benefits to employees of the Company through insurance coverage of
Company-sponsored plans. The medical and dental plans are self-funded and are
administered by independent third parties. In addition, the Company also
participates in a 401(k) defined-contribution employee savings plan. Employees
who have completed six months of service are eligible to participate. The
Company matches 50%-100% of the participant's contributions to the plan up to a
maximum of 6% of the participant's prior year compensation. The Company match
percentage is based on employee tenure.
NOTE 22 UNAUDITED SUMMARIZED CONSOLIDATED QUARTERLY INFORMATION
Summarized unaudited consolidated quarterly information for 1999 and 1998
is provided below (amounts in thousands, except per share amounts).
<TABLE>
<CAPTION>
QUARTER
-----------------------------------------
YEAR ENDED DECEMBER 31, 1999 FIRST SECOND THIRD FOURTH
- ---------------------------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenue from property operations................... $112,586 $116,237 $120,398 $184,696
Income from property operations.................... 38,802 39,815 40,456 52,969
Revenue from service company business.............. 8,556 7,536 10,280 17,083
Company's share of income from service company
business......................................... (346) 5,150 (4,315) 17,496
Income before minority interest in operating
partnership...................................... 15,175 23,993 19,889 24,655
Net income......................................... 13,956 23,117 19,487 24,399
Basic earnings per common share.................... $ 0.01 $ 0.15 $ 0.08 $ 0.15
Diluted earnings per common share.................. $ 0.01 $ 0.14 $ 0.07 $ 0.15
Weighted average common shares outstanding......... 56,468 62,323 64,370 65,805
Weighted average common shares and common share
equivalents outstanding.......................... 58,412 63,552 65,451 66,368
</TABLE>
F-27
<PAGE> 59
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
<TABLE>
<CAPTION>
QUARTER
---------------------------------------
YEAR ENDED DECEMBER 31, 1998 FIRST SECOND THIRD FOURTH
- ---------------------------- ------- ------- -------- --------
<S> <C> <C> <C> <C>
Revenue from property operations..................... $71,336 $89,928 $104,436 $111,439
Income from property operations...................... 28,918 33,701 33,943 37,388
Revenue from service company business................ 4,821 4,741 4,406 10,135
Company's share of income from service company
Business........................................... 992 1,183 1,775 1,475
Income before minority interest in operating
partnership........................................ 23,930 14,594 17,745 13,387
Net income........................................... 21,642 13,620 16,582 12,630
Basic earnings per common share...................... $ 0.44 $ 0.19 $ 0.19 $ 0.05
Diluted earnings per common share.................... $ 0.43 $ 0.19 $ 0.19 $ 0.05
Weighted average common shares outstanding........... 41,128 45,298 47,062 47,261
Weighted average common shares and common share
equivalents outstanding............................ 41,310 45,539 47,403 56,244
</TABLE>
NOTE 23 INDUSTRY SEGMENTS
The Company owns and operates multi-family apartment communities throughout
the United States and Puerto Rico which generate rental and other property
related income through the leasing of apartment units to a diverse base of
tenants. The Company separately evaluates the performance of each of its
apartment communities. However, because each of the apartment communities has
similar economic characteristics, facilities, services and tenants, the
apartment communities have been aggregated into a single apartment communities
segment. All segment disclosures are included in or can be derived from the
Company's consolidated financial statements.
All revenues are from external customers and no revenues are generated from
transactions with other segments. There are no tenants which contributed 10% or
more of the Company's total revenues during 1999, 1998 or 1997.
Although the Company operates in only one segment, there are different
components of the multi-family business for which management considers
disclosure to be useful. The following table presents the contribution
(separated between consolidated and unconsolidated activity) to the Company's
free cash flow for the year ended December 31, 1999, from the components of the
Company and a reconciliation of free cash flow to funds from operations, less a
reserve for capital replacements, and net income (in thousands, except
equivalent units and monthly rents):
<TABLE>
<CAPTION>
CONSOLIDATED UNCONSOLIDATED TOTAL CONTR. %
------------ -------------- --------- --------
<S> <C> <C> <C> <C>
REAL ESTATE:
Conventional:
Average monthly rent greater than $800 per
unit (9,008 equivalent units)............ $ 62,428 $ 15,672 $ 78,100 15 %
Average monthly rent $700 to $800 per unit
(9,310 equivalent units)................. 36,295 21,332 57,627 11 %
Average monthly rent $600 to $700 per unit
(16,494 equivalent units)................ 58,518 27,615 86,133 16 %
Average monthly rent $500 to $600 per unit
(29,492 equivalent units)................ 78,163 32,336 110,499 21 %
Average monthly rent less than $500 per
unit (29,387 equivalent units)........... 36,348 20,037 56,385 11 %
--------- --------- --------- ---
Subtotal conventional real estate
contribution to free cash flow(1)..... 271,752 116,992 388,744 74 %
Affordable (9,809 equivalent units)........... 5,131 31,964 37,095 7 %
</TABLE>
F-28
<PAGE> 60
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
<TABLE>
<CAPTION>
CONSOLIDATED UNCONSOLIDATED TOTAL CONTR. %
------------ -------------- --------- --------
<S> <C> <C> <C> <C>
College housing (average rent of $663 per
month) (2,214 equivalent units)............ 3,633 4,553 8,186 2 %
Other real estate............................. 1,933 4,956 6,889 1 %
Resident services............................. 1,914 436 2,350 --
Minority interest............................. (22,212) -- (22,212) (4)%
--------- --------- --------- ---
Total real estate contribution to free
cash flow(1)........................ 262,151 158,901 421,052 80 %
--------- --------- --------- ---
SERVICE BUSINESSES:
Management contracts (property and asset
management)
Controlled properties...................... 18,999 16,396 35,395 7 %
Third party with terms in excess of one
year..................................... -- 10,281 10,281 2 %
Third party cancelable in 30 days.......... -- 908 908 --
--------- --------- --------- ---
Subtotal management contracts
contribution to free cash flow(1)..... 18,999 27,585 46,584 9 %
Buyers Access................................. -- 3,314 3,314 1 %
Other service businesses...................... 4,068 (2,703) 1,365 --
--------- --------- --------- ---
Total service businesses contribution
to free cash flow(1)................ 23,067 28,196 51,263 10 %
--------- --------- --------- ---
INTEREST INCOME:
General partner loan interest................. 12,243 -- 12,243 2 %
Notes receivable from officers................ 869 -- 869 --
Other notes receivable........................ 8,863 -- 8,863 2 %
Money market and interest bearing accounts.... 8,286 1,568 9,854 2 %
--------- --------- --------- ---
Subtotal interest income................. 30,261 1,568 31,829 6 %
Accretion of loan discount(2)................. 32,460 -- 32,460 6 %
--------- --------- --------- ---
Total interest income contribution to
free cash flow(1)................... 62,721 1,568 64,289 12 %
--------- --------- --------- ---
FEES:
Disposition fees.............................. 3,070 801 3,871 1 %
Refinancing fees.............................. 283 331 614 --
--------- --------- --------- ---
Total fees contribution to free cash
flow(1)............................. 3,353 1,132 4,485 1 %
--------- --------- --------- ---
GENERAL AND ADMINISTRATIVE EXPENSES............. (13,112) -- (13,112) (3)%
--------- --------- --------- ---
Total contribution to free cash flow
from business components(1)......... 338,180 189,797 527,977 100 %
--------- --------- --------- ---
OTHER EXPENSES:
Interest expense:
Secured debt
Long-term, fixed rate...................... (107,368) (63,112) (170,480)
Long-term, variable rate................... (1,314) (2,008) (3,322)
Short-term................................. (14,906) (2,846) (17,752)
General partner loans and deferred acquisition
notes...................................... -- (1,744) (1,744)
Lines of credit and other unsecured debt...... (13,378) (384) (13,762)
Interest on notes payable to AIMCO............ -- (7,401) (7,401)
</TABLE>
F-29
<PAGE> 61
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
<TABLE>
<CAPTION>
CONSOLIDATED UNCONSOLIDATED TOTAL CONTR. %
------------ -------------- --------- --------
<S> <C> <C> <C> <C>
Convertible preferred securities.............. (4,858) -- (4,858)
Interest capitalized.......................... 6,588 93 6,681
--------- --------- ---------
Total interest expense before minority
interest............................ (135,236) (77,402) (212,638)
Minority interest share of interest expense... 11,248 -- 11,248
--------- --------- ---------
Total interest expense after minority
interest............................ (123,988) (77,402) (201,390)
--------- --------- ---------
Funds from operations, less a reserve for
capital replacements, before preferred
dividends(1)............................... 214,192 112,395 326,587
Preferred Stock and Preferred OP Unit
dividends..................................... (33,943) -- (33,943)
--------- --------- ---------
Funds from operations, less a reserve for
capital replacements(1).................... 180,249 112,395 292,644
Capital replacement reserve..................... 19,434 9,281 28,715
Preferred Stock and Preferred OP Unit
dividends..................................... 33,943 -- 33,943
Equity in losses of unconsolidated real estate
partnerships.................................. (4,467) 4,467 --
Equity in losses of unconsolidated
subsidiaries.................................. (2,818) 2,818 --
Additional interest expense on convertible
preferred securities.......................... (4,858) -- (4,858)
Loss on disposition of properties............... (1,785) -- (1,785)
Depreciation.................................... (131,753) (104,764) (236,517)
Minority interest in depreciation............... 10,064 -- 10,064
Amortization.................................... (14,297) (22,434) (36,731)
Deferred tax provision.......................... -- (1,763) (1,763)
Minority interest in operating partnership...... (2,753) -- (2,753)
--------- --------- ---------
Net income............................ $ 80,959 $ -- $ 80,959
========= ========= =========
</TABLE>
- ---------------
(1) "Funds from operations" and "free cash flow" are measurement standards used
by the Company's management, as follows:
- The Company measures its economic profitability based on funds from
operations ("FFO"), less a reserve for capital replacements of $300 per
apartment unit. The Company's management believes that FFO, less such a
reserve (or adjusted funds from operations, "AFFO") provides investors
with an understanding of the Company's ability to incur and service debt
and make capital expenditures. The Board of Governors of the National
Association of Real Estate Investment Trusts ("NAREIT") defines FFO as
net income (loss), computed in accordance with generally accepted
accounting principles ("GAAP"), excluding gains and losses from debt
restructuring and sales of property, plus real estate related
depreciation and amortization (excluding amortization of financing
costs), and after adjustments for unconsolidated partnerships and joint
ventures. The Company calculates FFO based on the NAREIT definition, as
adjusted for minority interest in the AIMCO operating partnership,
amortization, the non-cash deferred portion of the income tax provision
for unconsolidated subsidiaries and less the payment of dividends on
preferred stock. FFO should not be considered an alternative to net
income or net cash flows from operating activities, as calculated in
accordance with GAAP, as an indication of the Company's performance or as
a measure of liquidity. FFO is not necessarily indicative of cash
available to fund future cash needs. In addition, there can be no
assurance that the Company's basis for computing FFO is comparable with
that of other real estate investment trusts.
- Free cash flow is defined by the Company as AFFO plus interest expense
and Preferred Stock dividends. It measures profitability prior to the
cost of capital. Free cash flow should not be considered an alternative
to net income or net cash flows from operating activities, as calculated
in accordance
F-30
<PAGE> 62
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
with GAAP, as an indication of the Company's performance or as a measure
of liquidity. Free cash flow is not necessarily indicative of cash
available to fund future cash needs.
(2) See Note 7.
NOTE 24 SUBSEQUENT EVENTS
Dividend Declared
On January 19, 2000, the Board of Directors declared a quarterly cash
dividend of $0.70 per common share for the quarter ended December 31, 1999, paid
on February 11, 2000, to stockholders of record on February 4, 2000. The
increased dividend is equivalent to an annualized dividend rate of $2.80 per
common share, a 12% increase from the previous annual dividend rate of $2.50.
Class M Preferred Stock
On January 13, 2000, AIMCO issued 1,200,000 shares of newly created Class M
Convertible Cumulative Preferred Stock, par value $.01 per share ("Class M
Preferred Stock") in a direct placement. The net proceeds of $30.0 million were
used to repay certain indebtedness and for working capital. For three years,
holders of the Class M Preferred Stock are entitled to receive, when, as and if
declared by the Board of Directors, annual cash dividends in an amount per share
equal to the greater of (i) $2.125 per year (equivalent to 8.5% of the
liquidation preference), or (ii) the cash dividends (payable quarterly) payable
on the number of shares of Class A Common Stock into which a share of Class M
Preferred Stock is convertible. Beginning with the third anniversary of the date
of original issuance, holders of Class M Preferred Stock will be entitled to
receive an amount per share equal to the greater of (i) $2.3125 per year
(equivalent to 9.25% of the liquidation preference), or (ii) the cash dividends
payable on the number of Class A Common Stock into which a share of Class M
Preferred is convertible. The Class M Preferred Stock is senior to the Class A
Common Stock as to dividends and liquidation. Upon any liquidation, dissolution
or winding up of AIMCO, before payment or distributions by AIMCO shall be made
to any holders of Class A Common Stock, the holders of the Class M Preferred
Stock shall be entitled to receive a liquidation preference of $25 per share,
plus accumulated, accrued and unpaid dividends.
F-31
<PAGE> 63
SCHEDULE III
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
(IN THOUSANDS EXCEPT UNIT DATA)
<TABLE>
<CAPTION>
INITIAL COST COST
----------------------- CAPITALIZED
BUILDINGS SUBSEQUENT
DATE YEAR NUMBER AND TO
PROPERTY NAME ACQUIRED LOCATION BUILT OF UNITS LAND IMPROVEMENTS ACQUISITION
- ------------- -------- ---------------------- --------- -------- -------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
100 Forest Place............. Oct-97 OakPark, IL 1986 234 $ 2,498 $ 14,154 $ 3,591
40th North................... Jul-94 Phoenix, AZ 1970 556 2,546 14,437 2,156
Alpine Village............... Oct-98 Birmingham, AL 1972 160 751 3,034 83
Anchorage.................... Nov-96 League City, TX 1985 264 523 9,097 1,994
Arbor Crossing............... May-97 Lithonia, GA 1988 240 1,879 10,647 1,517
Arbor Station................ Apr-98 Montgomery, AL 1987 264 1,627 9,218 702
Arbor Station II............. Apr-99 Montgomery, AL 1988 288 198 1,133 --
Arbors....................... Oct-97 Tempe, AZ 1971 200 1,092 6,189 509
Arbors....................... May-98 Deland, FL 1983 224 1,507 8,537 936
Ashford Plantation........... Dec-95 Atlanta, GA 1975 211 2,770 9,956 1,604
Aspen Hills.................. May-98 Austin, TX 1986 344 2,645 14,989 518
Aspen Point.................. Jul-99 Arvada, CO 1974 120 288 5,935 135
Atriums of Plantation........ Aug-98 Plantation, FL 1980 210 1,807 9,756 799
Baldwin Oaks................. May-97 Parsippany, NJ 1980 251 689 7,226 201
Barcelona.................... Oct-98 Houston, TX 1963 126 852 4,184 275
Bay Club..................... Apr-97 Aventura, FL 1990 702 10,530 60,830 2,523
Baymeadows................... Oct-98 Jacksonville, FL 1972 904 5,308 20,953 163
Beacon Hill.................. Oct-97 Chamblee, GA 1978 120 928 5,261 406
Beech Lake................... May-99 Durham, NC 1986 345 2,284 13,011 --
Bella Vista.................. Jul-99 Miami, FL 1986 352 2,560 14,660 --
Bent Oaks.................... May-98 Austin, TX 1979 146 1,117 6,328 227
Blossomtree.................. Oct-97 Scottsdale, AZ 1970 125 535 3,029 381
Boardwalk.................... Dec-95 Tamarac, FL 1986 291 3,350 8,196 1,283
Boulder Creek (Bluffs)....... Sep-83 Boulder, CO 1971 232 696 7,779 5,657
Bradford Place............... Dec-99 Suitland, MD 1968 214 1,176 6,666 --
Braesview.................... May-98 San Antonio, TX 1982 396 3,135 17,764 392
Brandywine................... Apr-83 St. Petersburg, FL 1971 477 1,423 11,336 2,269
Brant Rock................... Oct-97 Houston, TX 1984 84 337 1,908 330
Brentwood.................... Nov-96 Lake Jackson, TX 1980 104 200 3,092 479
Briarwest.................... Oct-98 Houston, TX 1970 380 2,671 15,362 258
Briarwood.................... Oct-98 Cedar Rapids, IA 1975 73 453 1,831 55
Briarwood.................... Oct-98 Houston, TX 1970 351 2,138 10,159 99
Bridgewater.................. Nov-96 Tomball, TX 1978 206 333 4,033 2,894
Brittany Point............... Oct-98 Hunstville, AL 1978 431 1,627 9,220 207
Broadmoor Apartments......... May-98 Austin, TX 1985 200 1,370 7,765 1,035
Brookdale Lakes.............. May-98 Naperville, IL 1990 200 2,709 15,350 269
Brookside Village............ Apr-96 Tustin, CA 1970 628 2,498 14,180 21,605
Burke Shire Commons.......... May-97 Burke, VA 1986 360 2,785 23,320 145
Calhoun Beach................ Dec-98 Minneapolis, MN 1928/1998 351 11,567 65,546 4,177
Cambridge Heights............ May-97 Natchez, MS 1979 94 249 1,413 825
Canterbury Green............. Dec-99 Fort Wayne, IN 1979 2,007 13,929 73,975 --
<CAPTION>
DECEMBER 31, 1999
---------------------------------------------------------------------------------
TOTAL COST
BUILDINGS NET OF
AND ACCUMULATED ACCUMULATED
PROPERTY NAME LAND IMPROVEMENTS TOTAL DEPRECIATION DEPRECIATION ENCUMBRANCES
- ------------- -------- ------------ ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
100 Forest Place............. $ 759 $ 19,484 $ 20,243 $ 5,165 $ 15,078 $ 15,080
40th North................... 2,546 16,592 19,139 3,783 15,356 10,202
Alpine Village............... 751 3,117 3,868 410 3,459 2,100
Anchorage.................... 615 10,999 11,614 3,660 7,954 4,708
Arbor Crossing............... 740 13,303 14,043 2,168 11,875 4,956
Arbor Station................ 1,627 9,920 11,547 653 10,894 7,385
Arbor Station II............. 198 1,133 1,331 54 1,277 776
Arbors....................... 1,092 6,698 7,790 647 7,143 3,715
Arbors....................... 1,507 9,474 10,980 700 10,280 7,605
Ashford Plantation........... 2,770 11,560 14,330 1,994 12,335 7,100
Aspen Hills.................. 2,645 15,507 18,152 1,102 17,050 9,570
Aspen Point.................. 288 6,070 6,358 1,647 4,711 --
Atriums of Plantation........ 1,807 10,555 12,362 617 11,745 7,629
Baldwin Oaks................. 689 7,427 8,116 718 7,399 7,384
Barcelona.................... 852 4,459 5,312 171 5,141 2,371
Bay Club..................... 10,533 63,350 73,883 6,330 67,552 49,000
Baymeadows................... 5,308 21,115 26,423 2,256 24,167 13,657
Beacon Hill.................. 929 5,666 6,595 534 6,060 3,496
Beech Lake................... 2,284 13,011 15,294 543 14,751 11,783
Bella Vista.................. 2,560 14,660 17,220 365 16,856 12,765
Bent Oaks.................... 1,117 6,555 7,672 458 7,214 4,300
Blossomtree.................. 535 3,411 3,945 322 3,623 2,037
Boardwalk.................... 3,350 9,479 12,829 1,702 11,128 8,987
Boulder Creek (Bluffs)....... 755 13,378 14,132 5,059 9,074 --
Bradford Place............... 1,176 6,666 7,842 -- 7,842 5,218
Braesview.................... 3,135 18,155 21,290 1,284 20,006 13,690
Brandywine................... 1,437 13,591 15,028 6,089 8,939 6,216
Brant Rock................... 337 2,238 2,575 208 2,367 1,178
Brentwood.................... -- 3,771 3,771 409 3,362 1,725
Briarwest.................... 2,671 15,619 18,290 596 17,694 6,992
Briarwood.................... 453 1,886 2,339 184 2,156 1,562
Briarwood.................... 2,138 10,258 12,397 454 11,943 4,949
Bridgewater.................. 398 6,863 7,260 1,389 5,871 4,055
Brittany Point............... 1,658 9,396 11,054 -- 11,054 9,159
Broadmoor Apartments......... 1,370 8,800 10,170 637 9,533 6,000
Brookdale Lakes.............. 2,709 15,619 18,328 1,089 17,239 13,280
Brookside Village............ 7,263 31,021 38,283 4,286 33,998 26,492
Burke Shire Commons.......... 2,785 23,465 26,250 906 25,344 22,055
Calhoun Beach................ 11,821 69,469 81,290 3,378 77,912 52,763
Cambridge Heights............ 90 2,397 2,487 1,018 1,469 1,520
Canterbury Green............. 13,929 73,975 87,904 87,904 52,804
</TABLE>
F-32
<PAGE> 64
<TABLE>
<CAPTION>
INITIAL COST COST
----------------------- CAPITALIZED
BUILDINGS SUBSEQUENT
DATE YEAR NUMBER AND TO
PROPERTY NAME ACQUIRED LOCATION BUILT OF UNITS LAND IMPROVEMENTS ACQUISITION
- ------------- -------- ---------------------- --------- -------- -------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Cape Cod..................... May-98 San Antonio, TX 1985 244 1,582 8,946 234
Captiva Club................. Dec-96 Tampa, FL 1975 357 1,500 7,085 9,147
Carlin Manor................. Oct-98 Columbus, OH 1966 278 1,353 3,883 114
Carriage House............... Oct-98 Gastonia, NC 1970 102 486 2,059 99
Casa Anita................... Mar-98 Phoenix, AZ 1986 224 1,125 6,404 386
Cedar Creek.................. May-98 San Antonio, TX 1979 392 1,788 10,131 1,753
Center Square................ May-97 Doylestown, PA 1975 352 372 5,347 14
Chambers Ridge............... Oct-98 Harrisburg, PA 1973 324 1,469 6,135 1,690
Chapel NDP................... May-97 Baltimore, MD 1974 175 131 3,354 113
Chatham Harbor............... Oct-99 Altamonte Springs, FL 1985 324 2,288 12,999 --
Chesapeake................... Dec-96 Houston, TX 1983 320 775 7,317 778
Chestnut Hill Village........ May-97 Middletown, CT 1985 314 6,300 15,328 35
Citrus Grove................. Jun-98 Redlands, CA 1985 198 1,118 6,333 235
Citrus Sunset................ Mar-98 Vista, CA 1985 96 663 3,758 208
Cobble Creek................. Mar-98 Tucson, AZ 1980 301 1,299 7,395 575
Colonade Gardens
(Ferntree).................. Oct-97 Phoenix, AZ 1973 196 765 4,337 411
Colonial Crest............... Dec-99 Bloomington, IN 1965 208 938 4,488 --
Colony....................... Sep-98 Bradenton, FL 1986 166 1,121 6,350 316
Colony At Kenilworth......... Oct-98 Towson, MD 1966 383 2,600 11,255 437
Colony House................. Oct-98 Murfreesboro, TN 1973 194 898 3,336 208
Copper Chase................. Dec-96 Katy, TX 1982 316 1,354 7,672 1,348
Copperfield.................. Nov-96 Houston, TX 1983 196 702 7,003 1,158
Coral Cove................... May-98 Tampa, FL 1985 200 727 4,119 3,431
Coral Gardens................ Apr-93 Las Vegas, NV 1983 670 3,190 12,745 2,530
Country Club Villas.......... Jul-94 Amarillo, TX 1984 282 1,049 5,951 993
Country Club West............ May-98 Greeley, CO 1986 288 2,848 16,138 614
Country Wood................. Oct-98 Raleigh, NC 1972 384 2,652 8,816 130
Courtney Park................ May-98 Fort Collins, CO 1986 248 2,726 15,450 400
Coventry Square.............. Nov-96 Houston, TX 1983 270 975 6,355 1,722
Crossbridge.................. Oct-98 Dallas, TX 1980 160 490 3,994 19
Crossings at Belle........... Jan-98 Amarillo, TX 1976 160 483 2,737 1,256
Crossings of Bellevue........ May-98 Nashville, TN 1985 300 2,588 14,667 680
Crossroads................... May-98 Phoenix, AZ 1982 316 2,180 12,353 410
Crows Nest................... Nov-96 League City, TX 1984 176 795 5,400 1,090
Cypress Landing.............. Dec-96 Savannah, GA 1984 200 915 5,188 603
Cypress Ridge................ May-98 Houston, TX 1979 268 870 4,931 1,204
Debaliviere I................ May-97 St. Louis, MO 1979 146 188 2,795 80
Dolphins Landing............. Dec-96 Corpus Christi, TX 1980 218 1,740 5,589 806
Douglaston Villas and
Townhomes (Cameron Villas).. Aug-99 Altamonte Springs, FL 1979 234 1,721 9,835 242
Dunwoody Park................ Jul-94 Dunwoody, GA 1980 318 1,838 10,538 1,484
Eagle's Nest................. May-98 San Antonio, TX 1973 226 1,053 5,966 294
Eaglewood(s)................. Jun-98 Memphis, TN 1983 584 750 16,544 4,285
Easton Village............... Nov-96 Houston, TX 1983 146 440 6,584 1,957
Eden Crossing................ Nov-94 Pensacola, FL 1985 200 1,111 6,332 895
Elm Creek.................... May-97 Elmhurst, IL 1986 372 5,339 30,253 6,958
Emerald Ridge................ Feb-98 Tyler, TX 1984 484 1,469 8,324 926
Essex Park................... Oct-98 Columbia, SC 1971 323 1,570 5,554 141
Evanston Place............... May-97 Evanston, IL 1988 190 1,503 19,960 6,858
Fairway View I............... Oct-98 Baton Rouge, LA 1972 242 1,456 5,992 126
Fairway View II.............. Oct-98 Baton Rouge, LA 1981 204 1,428 5,899 94
<CAPTION>
DECEMBER 31, 1999
---------------------------------------------------------------------------------
TOTAL COST
BUILDINGS NET OF
AND ACCUMULATED ACCUMULATED
PROPERTY NAME LAND IMPROVEMENTS TOTAL DEPRECIATION DEPRECIATION ENCUMBRANCES
- ------------- -------- ------------ ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Cape Cod..................... 1,582 9,180 10,762 625 10,137 6,640
Captiva Club................. 1,752 15,980 17,732 816 16,916 8,950
Carlin Manor................. 1,353 3,997 5,350 520 4,830 2,500
Carriage House............... 486 2,158 2,643 229 2,414 1,892
Casa Anita................... 1,125 6,790 7,915 491 7,424 4,050
Cedar Creek.................. 1,788 11,884 13,671 768 12,903 4,609
Center Square................ 372 5,360 5,733 316 5,416 5,619
Chambers Ridge............... 1,469 7,825 9,294 901 8,393 5,396
Chapel NDP................... 131 3,467 3,598 142 3,456 3,269
Chatham Harbor............... 2,288 12,999 15,287 68 15,219 --
Chesapeake................... 775 8,095 8,870 1,015 7,854 7,199
Chestnut Hill Village........ 6,300 15,363 21,663 1,324 20,340 16,070
Citrus Grove................. 1,118 6,569 7,686 435 7,251 5,056
Citrus Sunset................ 663 3,966 4,629 256 4,373 3,561
Cobble Creek................. 1,299 7,970 9,269 669 8,600 6,924
Colonade Gardens
(Ferntree).................. 766 4,747 5,513 452 5,061 2,752
Colonial Crest............... 938 4,488 5,426 -- 5,426 1,789
Colony....................... 1,121 6,666 7,787 392 7,395 3,277
Colony At Kenilworth......... 2,600 11,692 14,292 1,474 12,818 7,985
Colony House................. 898 3,544 4,442 381 4,061 2,249
Copper Chase................. 1,354 9,020 10,374 750 9,624 5,289
Copperfield.................. 646 8,217 8,863 1,589 7,274 3,367
Coral Cove................... 1,381 6,896 8,277 882 7,395 3,928
Coral Gardens................ 3,190 15,275 18,465 4,627 13,838 10,661
Country Club Villas.......... 1,049 6,944 7,993 1,489 6,504 3,837
Country Club West............ 2,848 16,752 19,600 1,228 18,372 11,158
Country Wood................. 2,652 8,946 11,598 1,004 10,593 4,267
Courtney Park................ 2,726 15,850 18,577 1,117 17,460 9,895
Coventry Square.............. 1,054 7,997 9,052 2,982 6,070 2,928
Crossbridge.................. 490 4,013 4,504 420 4,083 1,700
Crossings at Belle........... 483 3,993 4,476 306 4,171 2,388
Crossings of Bellevue........ 2,588 15,348 17,936 1,109 16,826 8,325
Crossroads................... 2,180 12,763 14,943 912 14,031 6,853
Crows Nest................... 856 6,429 7,285 1,923 5,362 2,784
Cypress Landing.............. 915 5,791 6,706 750 5,957 4,165
Cypress Ridge................ 870 6,135 7,005 461 6,545 4,250
Debaliviere I................ 188 2,874 3,062 233 2,830 2,534
Dolphins Landing............. 1,740 6,395 8,135 887 7,248 4,431
Douglaston Villas and
Townhomes (Cameron Villas).. 1,721 10,077 11,798 245 11,554 --
Dunwoody Park................ 1,838 12,022 13,860 2,681 11,179 7,114
Eagle's Nest................. 1,053 6,260 7,313 461 6,851 4,685
Eaglewood(s)................. 945 20,634 21,579 8,101 13,478 --
Easton Village............... 565 8,416 8,981 1,890 7,091 2,789
Eden Crossing................ 1,111 7,227 8,338 1,547 6,791 5,603
Elm Creek.................... 5,421 37,130 42,550 10,348 32,202 23,508
Emerald Ridge................ 1,469 9,249 10,719 755 9,964 6,089
Essex Park................... 1,570 5,694 7,264 638 6,626 3,017
Evanston Place............... 2,101 26,220 28,321 5,697 22,624 18,425
Fairway View I............... 1,456 6,118 7,574 516 7,058 4,000
Fairway View II.............. 1,428 5,993 7,421 669 6,753 4,200
</TABLE>
F-33
<PAGE> 65
<TABLE>
<CAPTION>
INITIAL COST COST
----------------------- CAPITALIZED
BUILDINGS SUBSEQUENT
DATE YEAR NUMBER AND TO
PROPERTY NAME ACQUIRED LOCATION BUILT OF UNITS LAND IMPROVEMENTS ACQUISITION
- ------------- -------- ---------------------- --------- -------- -------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Fairways..................... Jul-94 Chandler, AZ 1986 352 1,830 10,403 15,999
Ferntree Apartments.......... Oct-98 Phoenix, AZ 1970 219 1,243 12,818 404
Fieldcrest................... Oct-98 Jacksonville, FL 1982 240 1,331 7,544 315
Fishermans Landing........... Sep-98 Temple Terrace, FL 1986 256 1,643 9,311 603
Fishermans Landing........... Dec-97 Bradenton, FL 1984 200 1,275 7,225 767
Fishermans Wharf............. Nov-96 Clute, TX 1981 360 830 9,969 1,478
Foothills.................... Oct-97 Tucson, AZ 1982 270 1,203 6,817 351
Forest River................. Oct-98 Gadsden, AL 1979 248 795 3,499 204
Foxchase..................... May-97 Alexandria, VA 1947 2,113 39,390 93,181 7,949
Foxfire...................... Oct-98 Doraville, GA 1971 266 1,691 8,568 264
Foxfire-Barcelona/Durham..... Oct-98 Durham, NC 1972 354 2,357 7,898 134
Foxtree...................... Oct-97 Tempe, AZ 1976 487 2,505 14,194 1,191
Frankford Place.............. Jul-94 Carrollton, TX 1982 274 1,125 6,382 844
Franklin Oaks................ May-98 Franklin, TN 1987 468 4,031 22,842 1,087
Freedom Place Club........... Oct-97 Jacksonville, FL 1988 352 2,289 12,970 867
Gateway Gardens.............. Oct-98 Cedar Rapids, IA 1969 328 1,857 7,522 178
Georgetown................... Oct-98 Columbus, OH 1962 150 1,004 3,827 175
Glen Hollow.................. Dec-99 Charlotte, NC 1972 336 2,133 10,174 --
Grand Flamingo (Morton
Towers)..................... Sep-97 Miami Beach, FL 1960 1,277 8,736 49,774 51,840
Greens of Naperville......... May-97 Naperville, IL 1986 400 3,756 21,284 624
Greentree.................... Dec-96 Carrollton, TX 1983 365 1,955 11,098 761
Hampton Hill................. Nov-96 Houston, TX 1984 332 1,574 8,408 4,824
Harbor Cove.................. May-98 San Antonio, TX 1980 256 1,446 8,193 353
Hastings Place............... Nov-96 Houston, TX 1984 176 734 3,382 1,830
Haverhill Commons............ May-98 W. Palm Beach, FL 1986 222 1,656 9,386 1,149
Hazeltree.................... Oct-97 Phoenix, AZ 1970 310 997 5,650 1,118
Heather Ridge................ Dec-96 Arlington, TX 1983 180 614 3,478 272
Heather Ridge................ May-98 Phoenix, AZ 1983 252 1,609 9,119 244
Heritage Pointe.............. Oct-98 Rome, GA 1976 149 510 1,985 71
Heritage Village............. Dec-97 Temple Terrace, FL 1967 252 713 10,678 2,441
Hidden Lake.................. May-98 Tampa, FL 1983 267 1,361 7,715 287
Hiddentree................... Oct-97 East Lansing, MI 1966 261 1,470 8,330 1,134
Highland Park................ Dec-96 Fort Worth, TX 1985 500 1,823 10,330 5,193
Hillmeade.................... Nov-94 Nashville, TN 1985 288 2,872 16,066 2,999
Hunt Club.................... Oct-98 Indianapolis, IN 1972 200 689 4,045 --
Hunters Creek................ May-99 Cincinnati, OH 1981 146 661 3,832 --
Hunters Glen................. Apr-98 Austell, GA 1983 72 301 1,704 112
Hunters Glen IV.............. Oct-98 Plainsboro, NJ 1976 264 2,488 9,738 149
Hunters Glen V............... Oct-98 Plainsboro, NJ 1977 304 2,997 10,912 279
Hunters Glen VI.............. Oct-98 Plainsboro, NJ 1977 328 3,120 11,376 300
Huntington Athletic Club..... Oct-98 Morrisville, NC 1986 212 1,830 8,535 52
Indian Creek Village......... Oct-98 Overland Park, KS 1972 273 1,959 3,033 159
Islandtree................... Oct-97 Savannah, GA 1985 216 1,267 7,181 645
Jefferson Place.............. Nov-94 Baton Rouge, LA 1985 234 2,696 15,115 1,493
La Colina.................... Oct-98 Denton, TX 1984 264 1,599 5,034 130
La Jolla de San Antonio...... May-98 San Antonio, TX 1975 300 2,071 11,733 378
La Jolla de Tucson........... May-98 Tucson, AZ 1978 223 1,342 7,603 441
Lake Castleton Arms.......... Oct-98 Indianapolis, IN 1997 1,265 5,188 33,504 147
Lake Crossing................ May-97 Austell, GA 1988 300 1,683 9,538 1,756
Lake Johnson Mews............ Oct-98 Raleigh, NC 1972 201 1,683 5,803 181
<CAPTION>
DECEMBER 31, 1999
---------------------------------------------------------------------------------
TOTAL COST
BUILDINGS NET OF
AND ACCUMULATED ACCUMULATED
PROPERTY NAME LAND IMPROVEMENTS TOTAL DEPRECIATION DEPRECIATION ENCUMBRANCES
- ------------- -------- ------------ ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Fairways..................... 4,133 24,099 28,232 2,822 25,410 6,040
Ferntree Apartments.......... 1,242 13,223 14,465 478 13,987 5,191
Fieldcrest................... 1,331 7,859 9,190 411 8,779 5,705
Fishermans Landing........... 1,643 9,915 11,557 573 10,984 5,554
Fishermans Landing........... 1,276 7,990 9,267 691 8,575 4,687
Fishermans Wharf............. 933 11,344 12,277 4,640 7,637 3,407
Foothills.................... 1,203 7,168 8,371 668 7,703 3,734
Forest River................. 795 3,702 4,498 405 4,093 3,266
Foxchase..................... 16,028 124,492 140,520 8,527 131,993 63,015
Foxfire...................... 1,691 8,832 10,522 776 9,746 7,187
Foxfire-Barcelona/Durham..... 2,357 8,032 10,389 896 9,493 5,355
Foxtree...................... 2,505 15,385 17,890 1,542 16,348 8,613
Frankford Place.............. 1,125 7,226 8,351 1,778 6,573 3,779
Franklin Oaks................ 4,031 23,929 27,960 1,719 26,241 17,255
Freedom Place Club........... 2,289 13,838 16,126 1,271 14,856 6,753
Gateway Gardens.............. 1,857 7,700 9,557 847 8,709 6,295
Georgetown................... 1,004 4,002 5,006 183 4,823 3,646
Glen Hollow.................. 2,133 10,174 12,307 -- 12,307 7,690
Grand Flamingo (Morton
Towers)..................... 13,182 97,168 110,350 4,936 105,414 26,299
Greens of Naperville......... 1,995 23,669 25,664 6,138 19,526 12,181
Greentree.................... 1,955 11,859 13,814 1,199 12,615 7,169
Hampton Hill................. 2,227 12,580 14,806 4,569 10,238 3,991
Harbor Cove.................. 1,446 8,545 9,991 605 9,386 5,755
Hastings Place............... 799 5,147 5,946 1,333 4,613 2,558
Haverhill Commons............ 1,656 10,534 12,191 771 11,420 9,045
Hazeltree.................... 997 6,768 7,765 618 7,147 3,928
Heather Ridge................ 614 3,751 4,364 436 3,929 2,573
Heather Ridge................ 1,609 9,362 10,972 662 10,310 5,850
Heritage Pointe.............. 510 2,056 2,566 251 2,315 1,400
Heritage Village............. 1,022 12,810 13,832 4,008 9,824 5,180
Hidden Lake.................. 1,361 8,002 9,363 583 8,780 5,347
Hiddentree................... 1,470 9,464 10,934 939 9,995 4,227
Highland Park................ 2,098 15,249 17,347 1,459 15,888 9,030
Hillmeade.................... 2,872 19,065 21,937 3,903 18,034 10,458
Hunt Club.................... 689 4,045 4,734 502 4,232 3,637
Hunters Creek................ 661 3,832 4,493 160 4,333 2,684
Hunters Glen................. 301 1,816 2,117 126 1,991 1,063
Hunters Glen IV.............. 2,488 9,887 12,375 1,038 11,337 8,181
Hunters Glen V............... 2,997 11,191 14,188 1,189 12,999 8,813
Hunters Glen VI.............. 3,120 11,676 14,796 1,268 13,527 9,173
Huntington Athletic Club..... 1,830 8,587 10,418 745 9,673 3,386
Indian Creek Village......... 1,959 3,192 5,152 782 4,369 4,485
Islandtree................... 1,267 7,825 9,093 731 8,362 4,080
Jefferson Place.............. 2,697 16,607 19,304 3,545 15,759 8,998
La Colina.................... 1,599 5,165 6,763 121 6,643 5,064
La Jolla de San Antonio...... 2,071 12,111 14,182 841 13,341 8,645
La Jolla de Tucson........... 1,342 8,044 9,386 575 8,811 5,880
Lake Castleton Arms.......... 5,188 33,650 38,838 260 38,578 28,748
Lake Crossing................ 1,123 11,854 12,977 2,977 10,000 9,541
Lake Johnson Mews............ 1,683 5,983 7,666 735 6,931 4,350
</TABLE>
F-34
<PAGE> 66
<TABLE>
<CAPTION>
INITIAL COST COST
----------------------- CAPITALIZED
BUILDINGS SUBSEQUENT
DATE YEAR NUMBER AND TO
PROPERTY NAME ACQUIRED LOCATION BUILT OF UNITS LAND IMPROVEMENTS ACQUISITION
- ------------- -------- ---------------------- --------- -------- -------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Lakehaven I.................. May-97 Carol Stream, IL 1984 144 701 3,974 (796)
Lakehaven II................. May-97 Carol Stream, IL 1985 348 1,673 9,482 (119)
Lakeland East................ May-97 Jackson, MS 1984 144 426 3,435 12
Lakeside..................... Oct-98 Lisle, IL 1972 568 4,866 20,380 137
Lakeside Place............... Oct-98 Houston, TX 1976 734 6,186 22,681 112
Landmark..................... May-98 Albuquerque, NM 1965 101 780 4,455 326
Las Brisas................... Jul-94 Casa Grande, AZ 1985 132 573 3,260 305
Las Brisas................... Dec-95 San Antonio, TX 1983 176 1,100 5,454 501
Lebanon Station.............. Oct-98 Columbus, OH 1974 387 1,790 8,671 71
Legend Oaks (The Woodlands).. May-98 Tampa, FL 1983 416 2,304 13,058 507
Lexington.................... Jul-94 San Antonio, TX 1981 72 311 1,764 161
Lexington Green.............. Oct-98 Sarasota, FL 1974 267 1,726 6,204 376
Los Arboles.................. Sep-97 Chandler, AZ 1985 232 1,662 9,418 746
Madera Point................. May-98 Phoenix, AZ 1986 256 2,103 11,916 986
Magnolia Trace............... Oct-98 Baton Rouge, LA 1973 246 1,205 37 200
Maple Bay.................... Dec-99 Virginia Beach, VA 1971 414 2,598 14,719 1,223
Marbella Club................ Jul-99 Miami, FL 1988 504 2,815 16,193 --
Meadow Creek................. Apr-85 Boulder, CO 1972 332 1,387 10,027 1,517
Meadows...................... Dec-96 Austin, TX 1983 100 579 3,283 280
Mesa Ridge................... May-98 San Antonio, TX 1986 200 1,209 6,852 222
Michigan Meadows............. Dec-99 Indianapolis, IN 1965 253 582 3,539 --
Millhopper Village........... Oct-98 Gainesville, FL 1969 136 988 3,497 50
Mills........................ May-98 Houston, TX 1979 708 3,936 22,306 1,309
Montecito.................... Jul-94 Austin, TX 1985 268 1,268 7,194 1,933
Mountain Run................. Jul-99 Lakewood, CO 1970 96 240 7,391 135
Mountain View................ May-98 Colorado Springs, CO 1985 252 2,536 14,371 480
Newberry Park................ May-97 Chicago, IL 1985 84 181 1,027 1,989
Newport...................... Jul-94 Avondale, AZ 1986 204 800 4,554 713
North River Village.......... Oct-98 Atlanta, GA 1970 133 931 3,488 21
Northview Harbor............. Dec-99 Grand Rapids, MI 1982 360 2,016 10,696 --
Northwoods Apartments........ Oct-98 Pensacola, FL 1979 320 1,784 6,615 166
Nottingham Square............ Oct-98 Urbandale, IA 1974 442 1,772 8,010 48
Oak Falls.................... Nov-96 Spring, TX 1983 144 514 3,585 1,937
Oakbrook..................... Dec-99 Battle Creek, MI 1981 586 3,512 16,501 --
Oakwood Village on Lake
Nan......................... Oct-98 Winter Park, FL 1973 278 1,475 5,746 145
Ocean Oaks................... May-98 Port Orange, FL 1988 296 2,132 12,083 1,150
Old Farm..................... Dec-98 Lexington, KY 1985 330 1,893 10,725 430
Old Orchard.................. Dec-99 Grand Rapids, MI 1974 664 3,217 14,077 --
Old Salem.................... Oct-98 Charlottesville, VA 1967 364 2,809 12,713 871
Olmos Club................... Oct-97 San Antonio, TX 1983 134 322 1,825 186
Olympiad..................... Nov-94 Montgomery, AL 1986 176 1,046 5,958 736
Orchidtree................... Oct-97 Scottsdale, AZ 1971 278 2,314 13,112 617
Palencia..................... May-98 Tampa, FL 1985 420 2,804 15,887 2,269
Palm Lake (Village Square)... Oct-98 Tampa, FL 1972 150 832 1,143 190
Panorama Terrace............. Oct-98 Birmingham, AL 1975 227 1,401 4,672 115
Paradise Palms............... Jul-94 Phoenix, AZ 1970 130 647 3,684 540
Park at Cedar Lawn........... Nov-96 Galveston, TX 1985 192 769 5,073 2,659
Park at Deerbrook............ Oct-98 Humble, TX 1984 100 563 2,720 42
Park Colony.................. May-98 Norcross, GA 1984 352 3,257 18,454 409
Parktown Townhouses.......... Oct-98 Deer Park, TX 1968 309 2,031 6,674 93
Parliament Bend.............. Jul-94 San Antonio, TX 1980 232 765 4,342 769
<CAPTION>
DECEMBER 31, 1999
---------------------------------------------------------------------------------
TOTAL COST
BUILDINGS NET OF
AND ACCUMULATED ACCUMULATED
PROPERTY NAME LAND IMPROVEMENTS TOTAL DEPRECIATION DEPRECIATION ENCUMBRANCES
- ------------- -------- ------------ ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Lakehaven I.................. 510 3,369 3,879 220 3,659 5,387
Lakehaven II................. 1,219 9,818 11,036 467 10,569 13,714
Lakeland East................ 426 3,447 3,873 227 3,646 3,450
Lakeside..................... 4,866 20,517 25,384 1,272 24,111 17,200
Lakeside Place............... 6,186 22,793 28,979 2,289 26,690 14,261
Landmark..................... 780 4,781 5,561 340 5,221 2,400
Las Brisas................... 573 3,565 4,138 796 3,342 --
Las Brisas................... 1,100 5,955 7,055 1,069 5,986 3,217
Lebanon Station.............. 1,790 8,741 10,531 374 10,157 6,927
Legend Oaks (The Woodlands).. 2,304 13,565 15,869 996 14,873 7,779
Lexington.................... 312 1,924 2,236 433 1,803 1,007
Lexington Green.............. 1,726 6,580 8,306 769 7,536 3,392
Los Arboles.................. 1,662 10,164 11,826 944 10,882 7,149
Madera Point................. 2,103 12,903 15,006 921 14,084 8,067
Magnolia Trace............... 1,205 237 1,442 541 901 --
Maple Bay.................... 2,781 15,758 18,539 -- 18,539 10,176
Marbella Club................ 2,815 16,193 19,009 402 18,606 13,896
Meadow Creek................. 1,435 11,495 12,931 4,581 8,350 7,485
Meadows...................... 579 3,563 4,143 347 3,796 2,008
Mesa Ridge................... 1,209 7,075 8,284 498 7,786 4,980
Michigan Meadows............. 582 3,539 4,121 -- 4,121 1,726
Millhopper Village........... 988 3,547 4,534 477 4,058 2,700
Mills........................ 3,936 23,615 27,551 1,739 25,812 14,230
Montecito.................... 1,268 9,127 10,395 2,066 8,329 4,749
Mountain Run................. 240 7,526 7,766 1,977 5,789 --
Mountain View................ 2,536 14,851 17,387 1,044 16,343 9,093
Newberry Park................ 431 2,767 3,197 980 2,217 8,455
Newport...................... 800 5,267 6,067 1,250 4,817 2,456
North River Village.......... 931 3,509 4,440 399 4,041 1,657
Northview Harbor............. 2,016 10,696 12,712 -- 12,712 8,019
Northwoods Apartments........ 1,784 6,781 8,565 730 7,835 5,000
Nottingham Square............ 1,772 8,058 9,830 982 8,848 7,412
Oak Falls.................... 574 5,462 6,036 1,369 4,667 2,632
Oakbrook..................... 3,512 16,501 20,013 -- 20,013 8,727
Oakwood Village on Lake
Nan......................... 1,475 5,891 7,365 774 6,591 3,884
Ocean Oaks................... 2,132 13,234 15,366 957 14,410 10,251
Old Farm..................... 1,893 11,156 13,048 451 12,597 9,824
Old Orchard.................. 3,217 14,077 17,293 -- 17,293 10,723
Old Salem.................... 2,809 13,584 16,394 1,296 15,098 10,187
Olmos Club................... 322 2,011 2,333 196 2,137 1,209
Olympiad..................... 1,046 6,694 7,740 1,438 6,301 4,993
Orchidtree................... 2,314 13,729 16,043 1,283 14,760 7,037
Palencia..................... 2,804 18,156 20,959 1,290 19,670 13,172
Palm Lake (Village Square)... 832 1,333 2,165 406 1,759 1,670
Panorama Terrace............. 1,401 4,787 6,188 694 5,494 3,731
Paradise Palms............... 647 4,224 4,871 961 3,910 2,205
Park at Cedar Lawn........... 843 7,658 8,501 1,650 6,851 5,150
Park at Deerbrook............ 563 2,762 3,326 90 3,236 1,510
Park Colony.................. 3,257 18,864 22,120 1,352 20,769 11,072
Parktown Townhouses.......... 2,031 6,767 8,798 722 8,076 3,017
Parliament Bend.............. 765 5,111 5,876 1,191 4,686 --
</TABLE>
F-35
<PAGE> 67
<TABLE>
<CAPTION>
INITIAL COST COST
----------------------- CAPITALIZED
BUILDINGS SUBSEQUENT
DATE YEAR NUMBER AND TO
PROPERTY NAME ACQUIRED LOCATION BUILT OF UNITS LAND IMPROVEMENTS ACQUISITION
- ------------- -------- ---------------------- --------- -------- -------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Patchen Place................ Oct-98 Lexington, KY 1974 202 883 3,794 136
Peachtree Park............... Jan-96 Atlanta, GA 1962/1995 295 4,681 12,957 2,359
Penn Square.................. Dec-94 Albuquerque, NM 1982 210 1,128 6,478 657
Peppermill Place............. Nov-96 Houston, TX 1983 224 406 3,957 2,269
Pickwick Place............... Oct-98 Indianapolis, IN 1973 336 963 7,607 63
Pine Creek................... Oct-97 Clio, MI 1978 233 852 4,830 510
Pine Shadows................. May-98 Phoenix, AZ 1983 272 2,093 11,858 333
Pinebrook.................... Oct-98 Jacksonville, FL 1974 208 856 4,854 340
Pines of Northwest
Crossing.................... Oct-98 Houston, TX 1973 412 1,566 5,974 233
Pines of Roanoke............. Oct-98 Roanoke, VA 1978 216 1,169 5,108 189
Pinetree..................... Oct-98 Charlotte, NC 1972 220 1,350 6,787 242
Place du Plantier............ Oct-98 Baton Rouge, LA 1972 268 1,702 6,252 127
Plantation Gardens........... Oct-98 Plantation, FL 1971 372 2,163 5,048 119
Pleasant Ridge............... Nov-94 Little Rock, AR 1982 200 1,660 9,464 972
Pleasant Valley Pointe....... Nov-94 Little Rock, AR 1985 112 907 5,069 910
Point West................... May-97 Lenexa, KS 1985 172 979 5,548 1,049
Pointe James................. Oct-98 Charleston, SC 1977 128 886 926 111
Polo Park.................... Oct-97 Midland, TX 1983 184 800 4,532 587
Prairie Hills................ Jul-94 Albuquerque, NM 1985 360 1,680 9,633 1,214
Preston Creek................ Oct-98 Dallas, TX 1979 228 1,625 6,650 83
Pride Gardens................ May-97 Flora, MS 1975 76 265 1,502 2,223
Prime Crest.................. May-98 Austin, TX 1973 148 724 4,104 486
Privado Park................. May-98 Phoenix, AZ 1984 352 2,636 14,937 382
Quail Hollow................. Oct-98 West Columbia, SC 1973 215 1,271 4,396 95
Quail Ridge.................. May-98 Tucson, AZ 1974 253 1,613 9,143 513
Quail Run.................... Oct-98 Zionsville, IN 1972 166 1,293 4,568 112
Quail Run.................... Oct-98 Columbia, SC 1970 332 1,885 8,270 75
Quail Woods.................. Oct-98 Gastonia, NC 1974 188 1,079 1,789 127
Quailtree.................... Oct-97 Phoenix, AZ 1978 184 659 3,735 412
Raintree..................... Oct-98 Pensacola, FL 1971 168 192 1,091 1,162
Raintree..................... Oct-98 Anderson, SC 1972 176 706 2,385 114
Ramblewood................... Dec-99 Grand Rapids, MI 1973 1,710 9,742 59,378 --
Rancho Sunset................ Mar-98 Escondido, CA 1985 344 3,103 16,755 1,436
Randol Crossing.............. Dec-96 Fort Worth, TX 1984 160 728 4,125 286
Regency Oaks................. Oct-98 Fern Park, FL 1965 343 1,666 (48) 50
Ridgecrest................... Dec-96 Denton, TX 1983 152 393 2,228 403
Rio Cancion.................. Oct-98 Tucson, AZ 1983 379 2,832 16,090 521
River Loft Apartments........ May-97 Philadelphia, PA 1910 197 1,103 12,223 79
River Reach.................. Oct-98 Jacksonville, FL 1972 298 2,271 8,575 78
Rivercrest................... Oct-97 Tucson, AZ 1984 310 751 4,253 280
Rivercrest................... Oct-98 Atlanta, GA 1970 312 2,929 5,416 31
Riverside.................... Jul-94 Littleton, CO 1987 248 1,553 8,828 1,447
Riverwalk.................... Dec-95 Little Rock, AR 1988 262 1,075 9,295 634
Rocky Creek.................. Oct-98 Augusta, GA 1979 120 620 2,555 32
Rocky Ridge.................. Oct-98 Birmingham, AL 1973 116 566 2,197 69
Rosemont Crossing (The
Greens)..................... Oct-98 San Antonio, TX 1974 217 668 3,094 607
Royal Crest.................. May-98 Austin, TX 1973 204 1,220 5,912 1,402
Royal Gardens................ Oct-98 Hemet, CA 1987 137 521 2,817 458
Royal Palms.................. Jul-94 Mesa, AZ 1985 152 832 4,730 345
Ryan's Pointe................ Oct-98 Houston, TX 1983 280 1,551 8,313 146
<CAPTION>
DECEMBER 31, 1999
---------------------------------------------------------------------------------
TOTAL COST
BUILDINGS NET OF
AND ACCUMULATED ACCUMULATED
PROPERTY NAME LAND IMPROVEMENTS TOTAL DEPRECIATION DEPRECIATION ENCUMBRANCES
- ------------- -------- ------------ ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Patchen Place................ 883 3,930 4,813 620 4,192 3,000
Peachtree Park............... 4,683 15,314 19,997 2,557 17,440 9,111
Penn Square.................. 1,128 7,135 8,263 1,529 6,734 4,147
Peppermill Place............. 474 6,157 6,632 1,365 5,266 4,793
Pickwick Place............... 963 7,670 8,633 841 7,792 6,308
Pine Creek................... 852 5,339 6,192 406 5,786 2,292
Pine Shadows................. 2,093 12,191 14,283 866 13,418 7,500
Pinebrook.................... 857 5,193 6,050 256 5,793 3,594
Pines of Northwest
Crossing.................... 1,566 6,207 7,773 845 6,929 4,828
Pines of Roanoke............. 1,169 5,297 6,466 571 5,895 4,225
Pinetree..................... 1,350 7,029 8,379 524 7,855 4,996
Place du Plantier............ 1,702 6,379 8,081 849 7,232 3,800
Plantation Gardens........... 2,163 5,167 7,330 1,194 6,136 6,776
Pleasant Ridge............... 1,661 10,435 12,096 2,292 9,803 6,700
Pleasant Valley Pointe....... 907 5,979 6,886 1,327 5,559 3,267
Point West................... 1,044 6,532 7,576 1,973 5,603 5,505
Pointe James................. 886 1,038 1,923 215 1,708 1,270
Polo Park.................... 800 5,119 5,919 475 5,444 2,209
Prairie Hills................ 2,011 10,516 12,527 2,326 10,201 6,916
Preston Creek................ 1,625 6,733 8,358 588 7,770 4,500
Pride Gardens................ 35 3,955 3,990 1,411 2,578 866
Prime Crest.................. 724 4,591 5,315 340 4,975 2,340
Privado Park................. 2,636 15,319 17,955 1,075 16,880 8,980
Quail Hollow................. 1,271 4,491 5,762 437 5,324 2,850
Quail Ridge.................. 1,613 9,657 11,270 703 10,567 6,245
Quail Run.................... 1,293 4,680 5,972 464 5,508 4,427
Quail Run.................... 1,885 8,345 10,230 903 9,327 5,508
Quail Woods.................. 1,079 1,917 2,996 244 2,752 2,447
Quailtree.................... 659 4,147 4,806 388 4,418 2,141
Raintree..................... 356 2,090 2,445 -- 2,445 2,610
Raintree..................... 706 2,499 3,204 316 2,888 1,339
Ramblewood................... 9,742 59,378 69,120 -- 69,120 37,854
Rancho Sunset................ 3,103 18,191 21,294 1,137 20,157 13,661
Randol Crossing.............. 728 4,411 5,140 469 4,671 2,365
Regency Oaks................. 1,666 2 1,668 983 685 --
Ridgecrest................... 393 2,631 3,024 376 2,648 2,390
Rio Cancion.................. 2,832 16,611 19,443 1,294 18,149 12,851
River Loft Apartments........ 1,103 12,302 13,405 749 12,656 6,499
River Reach.................. 2,271 8,653 10,924 1,017 9,907 6,962
Rivercrest................... 751 4,533 5,284 418 4,866 2,727
Rivercrest................... 2,929 5,447 8,376 (4,818) 13,194 6,659
Riverside.................... 1,956 9,872 11,828 2,278 9,551 5,708
Riverwalk.................... 1,075 9,929 11,004 1,704 9,300 5,411
Rocky Creek.................. 620 2,586 3,206 277 2,930 2,053
Rocky Ridge.................. 566 2,266 2,832 326 2,506 1,450
Rosemont Crossing (The
Greens)..................... 668 3,701 4,369 404 3,965 2,840
Royal Crest.................. 1,220 7,314 8,534 529 8,005 3,320
Royal Gardens................ 521 3,275 3,796 118 3,678 2,396
Royal Palms.................. 832 5,076 5,907 1,135 4,773 3,358
Ryan's Pointe................ 1,551 8,459 10,010 315 9,695 4,317
</TABLE>
F-36
<PAGE> 68
<TABLE>
<CAPTION>
INITIAL COST COST
----------------------- CAPITALIZED
BUILDINGS SUBSEQUENT
DATE YEAR NUMBER AND TO
PROPERTY NAME ACQUIRED LOCATION BUILT OF UNITS LAND IMPROVEMENTS ACQUISITION
- ------------- -------- ---------------------- --------- -------- -------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Salem Arms................... Oct-98 Augusta, GA 1971 136 598 1,421 64
San Marina................... Mar-98 Phoenix, AZ 1986 399 1,926 10,954 765
Sand Castles................. Oct-97 League City, TX 1987 136 978 5,541 408
Sand Pebble.................. Oct-97 El Paso, TX 1983 208 861 4,879 436
Sandalwood................... May-98 Houston, TX 1979 352 1,462 8,287 408
Sandpiper Cove............... May-97 Boynton Beach, FL 1987 416 11,447 29,088 (53)
Sawgrass..................... Jul-97 Orlando, FL 1986 208 1,443 8,157 621
Seaside Point................ Nov-96 Galveston, TX 1985 102 295 2,994 2,851
Seasons...................... Oct-95 San Antonio, TX 1976 280 974 5,749 1,010
Shadetree.................... Oct-97 Tempe, AZ 1965 123 591 3,349 638
Shadow Brook................. Oct-98 Salt Lake, UT 1984 300 911 5,164 3,392
Shadow Creek................. May-98 Phoenix, AZ 1984 266 2,087 11,824 483
Shadow Lake.................. Oct-97 Greensboro, NC 1988 136 1,054 5,972 585
Shadowood.................... May-97 Chapel Hill, NC 1987 336 1,268 14,574 30
Shaker Square................ Oct-98 Whitehall, OH 1968 194 1,078 4,195 55
Shallow Creek................ May-98 San Antonio, TX 1982 208 1,234 6,995 263
Shirewood Townhomes.......... Oct-98 Shreveport, LA 1948 228 697 246 196
Shoreview.................... May-97 San Francisco, CA 1976 156 106 4,063 78
Signal Pointe (Squire One)... Oct-98 Winter Park, FL 1971 368 1,973 6,768 179
Signature Point.............. Nov-96 League City, TX 1994 304 2,160 13,627 3,344
Silktree..................... Oct-97 Phoenix, AZ 1979 86 421 2,383 222
Silver Ridge................. Oct-98 Maplewood, MN 1986 186 650 3,677 489
Silverado.................... Oct-98 El Paso, TX 1973 248 799 22 89
Ski Lodge.................... Oct-98 Montgomery, AL 1978 522 2,428 9,436 88
Snowden Village I............ Oct-98 Fredericksburg, VA 1970 132 905 2,337 478
Snowden Village II........... Oct-98 Fredericksburg, VA 1980 122 804 2,484 353
Snug Harbor.................. Dec-95 Las Vegas, NV 1990 64 750 2,966 392
Society Park................. Oct-98 Tampa, FL 1968 324 1,154 308 170
Society Park East............ Oct-98 Indian Harbor, FL 1963 200 899 1,256 291
Somerset Lakes............... May-99 Indianapolis, IN 1974 360 3,533 20,285 --
Somerset Village............. May-96 West Valley City, UT 1985 486 4,375 17,600 1,419
South Point.................. Oct-98 Durham, NC 1980 180 2,113 (520) 78
South Willow................. Jul-94 West Jordan, UT 1987 440 2,218 12,612 1,366
Southridge................... Dec-96 Greenville, TX 1984 160 643 3,645 421
Spectrum Pointe.............. Jul-94 Marietta, GA 1984 196 1,029 5,903 728
St. Charleston Village....... Oct-98 Las Vegas, NV 1980 312 1,909 7,697 93
Steeplechase................. May-99 Loveland, OH 1988 272 1,669 9,539 --
Stirling Court............... Nov-96 Houston, TX 1984 228 946 5,958 1,664
Stone Mountain West.......... Oct-98 Stone Mountain, GA 1971 142 1,143 4,019 28
Stone Pointe Village......... Dec-99 Fort Wayne, IN 1980 296 1,809 8,591 --
Stonebrook................... Jun-97 Sanford, FL 1991 244 1,583 9,046 1,279
Stoney Brook................. Nov-96 Houston, TX 1972 113 579 3,871 2,402
Stonybrook................... May-98 Tucson, AZ 1983 411 2,187 12,278 1,090
Strawbridge Square........... May-97 Alexandria, VA 1979 128 86 4,743 36
Summerchase.................. May-97 Van Buren, AR 1974 72 170 962 1,399
Summerwalk................... Oct-98 Winter Park, FL 1974 306 353 2,000 6,355
Summit Creek................. May-98 Austin, TX 1985 164 611 3,464 3,068
Sun Grove.................... Jul-94 Peoria, AZ 1986 86 659 3,749 230
Sun Katcher (Teal Pointe).... Dec-95 Jacksonville, FL 1972 360 578 3,440 6,191
Sun Lake..................... May-98 Lake Mary, FL 1986 600 4,556 25,819 980
Sun River Village............ Oct-98 Tempe, AZ 1981 334 2,518 9,063 189
<CAPTION>
DECEMBER 31, 1999
---------------------------------------------------------------------------------
TOTAL COST
BUILDINGS NET OF
AND ACCUMULATED ACCUMULATED
PROPERTY NAME LAND IMPROVEMENTS TOTAL DEPRECIATION DEPRECIATION ENCUMBRANCES
- ------------- -------- ------------ ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Salem Arms................... 598 1,485 2,084 139 1,945 1,193
San Marina................... 1,926 11,719 13,645 924 12,721 7,828
Sand Castles................. 978 5,949 6,927 566 6,361 3,000
Sand Pebble.................. 861 5,315 6,176 519 5,657 2,620
Sandalwood................... 1,462 8,695 10,158 622 9,536 4,619
Sandpiper Cove............... 7,459 33,023 40,482 6,233 34,249 12,814
Sawgrass..................... 1,443 8,778 10,221 905 9,315 4,564
Seaside Point................ 334 5,807 6,140 1,029 5,112 2,027
Seasons...................... 982 6,751 7,733 1,200 6,534 4,405
Shadetree.................... 591 3,987 4,578 392 4,186 1,994
Shadow Brook................. 2,153 7,314 9,467 801 8,666 6,000
Shadow Creek................. 2,087 12,306 14,393 867 13,526 6,815
Shadow Lake.................. 1,054 6,557 7,611 599 7,012 3,132
Shadowood.................... 1,268 14,605 15,872 1,575 14,297 9,834
Shaker Square................ 1,078 4,250 5,328 (547) 5,874 3,320
Shallow Creek................ 1,234 7,257 8,492 514 7,978 4,500
Shirewood Townhomes.......... 697 442 1,139 501 637 --
Shoreview.................... 106 4,141 4,248 405 3,843 4,283
Signal Pointe (Squire One)... 1,973 6,946 8,920 803 8,117 3,998
Signature Point.............. 2,161 16,970 19,131 2,690 16,441 7,121
Silktree..................... 421 2,606 3,026 249 2,777 1,506
Silver Ridge................. 722 4,095 4,816 -- 4,816 4,453
Silverado.................... 799 111 910 412 497 --
Ski Lodge.................... 2,428 9,524 11,952 1,287 10,665 6,800
Snowden Village I............ 905 2,816 3,720 225 3,496 2,472
Snowden Village II........... 804 2,836 3,640 171 3,469 2,616
Snug Harbor.................. 751 3,357 4,108 629 3,479 1,976
Society Park................. 1,154 478 1,633 728 905 --
Society Park East............ 899 1,547 2,447 512 1,935 1,966
Somerset Lakes............... 3,533 20,285 23,819 844 22,975 14,182
Somerset Village............. 4,375 19,019 23,394 2,843 20,551 8,061
South Point.................. 2,113 (443) 1,670 (5,997) 7,668 4,600
South Willow................. 2,218 13,979 16,196 3,185 13,012 7,842
Southridge................... 643 4,066 4,709 498 4,211 2,029
Spectrum Pointe.............. 1,029 6,631 7,660 1,486 6,175 4,108
St. Charleston Village....... 1,909 7,790 9,699 723 8,977 6,060
Steeplechase................. 1,669 9,539 11,208 396 10,812 8,442
Stirling Court............... 1,010 7,558 8,568 3,227 5,341 3,455
Stone Mountain West.......... 1,143 4,047 5,191 375 4,816 3,000
Stone Pointe Village......... 1,809 8,591 10,400 -- 10,400 6,414
Stonebrook................... 2,070 9,838 11,908 1,055 10,853 7,695
Stoney Brook................. 704 6,148 6,852 992 5,860 705
Stonybrook................... 2,167 13,388 15,554 994 14,561 4,028
Strawbridge Square........... 86 4,779 4,865 246 4,618 3,267
Summerchase.................. 59 2,472 2,531 1,482 1,049 643
Summerwalk................... 1,895 6,812 8,707 605 8,102 4,902
Summit Creek................. 1,153 5,990 7,143 787 6,356 3,491
Sun Grove.................... 659 3,978 4,638 912 3,725 --
Sun Katcher (Teal Pointe).... 785 9,424 10,209 1,005 9,204 8,675
Sun Lake..................... 4,556 26,799 31,355 1,935 29,420 14,889
Sun River Village............ 2,518 9,252 11,771 870 10,900 6,126
</TABLE>
F-37
<PAGE> 69
<TABLE>
<CAPTION>
INITIAL COST COST
----------------------- CAPITALIZED
BUILDINGS SUBSEQUENT
DATE YEAR NUMBER AND TO
PROPERTY NAME ACQUIRED LOCATION BUILT OF UNITS LAND IMPROVEMENTS ACQUISITION
- ------------- -------- ---------------------- --------- -------- -------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Sunbury Downs................ Nov-96 Houston, TX 1982 240 565 4,380 2,521
Sunchase of Clearwater....... Nov-94 Clearwater, FL 1985 461 2,177 19,641 1,821
Sunchase of Orlando East..... Nov-94 Orlando, FL 1985 296 927 8,361 970
Sunchase of Orlando North.... Nov-94 Orlando, FL 1985 324 1,013 9,142 1,175
Sunchase Tampa............... Nov-94 Tampa, FL 1985 216 757 6,831 897
Sundown Village.............. Mar-98 Tucson, AZ 1984/1994 330 2,214 12,582 349
Sunlake...................... Sep-98 Brandon, FL 1986 88 189 1,086 3,777
Sunset Village............... Mar-98 Oceanside, CA 1987 114 1,128 6,392 262
Surrey Oaks.................. Oct-97 Bedford, TX 1983 152 628 3,560 377
Swiss Village................ Nov-96 Houston, TX 1972 360 1,011 11,310 391
Tall Timbers................. Oct-97 Houston, TX 1982 256 1,238 7,016 493
Tar River Estates............ Oct-98 Greenville, NC 1969 402 521 2,953 3,243
Tara Bridge.................. May-97 Jonesboro, GA 1988 220 1,253 7,100 1,213
Tates Creek Village.......... Oct-98 Lexington, KY 1970 204 1,145 1,788 126
Tatum Gardens Apartments..... May-98 Phoenix, AZ 1985 128 653 3,699 3,009
The Bluffs................... Dec-98 Lafayette, IN 1982 181 979 5,549 527
The Bradford................. Oct-97 Midland, TX 1982 264 705 3,996 (519)
The Breakers................. Oct-98 Daytona Beach, FL 1985 258 1,008 5,710 397
The Falls of Bells Ferry..... May-98 Marietta, GA 1987 720 6,568 37,218 701
The Hills.................... Oct-97 Austin, TX 1983 329 1,367 7,747 531
The Knolls................... Oct-98 Colorado Springs, CO 1972 262 2,406 3,210 100
The Landings................. Oct-98 Tampa, FL 1978 200 800 3,508 116
The Loft..................... Oct-98 Raleigh, NC 1974 184 1,575 14,576 86
The Palisaides............... Oct-98 Montgomery, AL 1968 432 1,214 5,714 76
The Park..................... Oct-98 Melbourne, FL 1983 120 719 4,072 193
The Pines.................... Oct-98 Palm Bay, FL 1984 216 601 3,406 354
The Sterling................. Oct-98 Philadelphia, PA 1962 536 6,427 85,108 98
The Stratford................ May-98 San Antonio, TX 1979 269 1,920 10,879 398
Thurber Manor................ Oct-98 Columbus, OH 1965 115 810 2,281 237
Timber Ridge................. Oct-98 Sharonville, OH 1972 248 1,427 5,315 120
Timberlake................... May-97 Arlington, TX 1971 224 753 6,327 50
Timbermill................... Oct-95 San Antonio, TX 1982 296 778 4,674 784
Timbertree................... Oct-97 Phoenix, AZ 1980 387 2,334 13,229 875
Tor.......................... Dec-99 Columbia, MD 1974 324 2,715 15,382 1,223
Torrey Pines Village......... Oct-98 Las Vegas, NV 1980 204 1,230 4,743 99
Township at Highlands........ Nov-96 Littleton, CO 1986 119 1,058 11,166 10,853
Trails of Ashford............ May-98 Houston, TX 1979 514 2,650 15,018 497
Twin Lake Towers............. Oct-98 Westmont, IL 1969 399 3,233 11,262 2,551
Victoria Station............. Jun-98 Victoria, TX 1997 224 425 3,946 2,848
Villa La Paz................. Jun-98 Sun City, CA 1990 96 573 3,096 260
Villa Ladera................. Jan-96 Albuquerque, NM 1985 280 1,765 10,013 1,667
Village Creek at Brookhill... Jul-94 Westminster, CO 1987 324 2,446 13,901 1,162
Village Crossing............. May-98 W. Palm Beach, FL 1986 289 1,618 9,167 1,130
Village Gardens.............. Oct-98 Fort Collins, CO 1973 141 1,080 3,549 39
Village Green................ Oct-98 Montgomery, AL 1972 337 1,681 5,659 79
Village of Pennbrook......... Oct-98 Levitown, PA 1970 722 5,533 31,345 4,031
Vista Ventana................ May-98 Phoenix, AZ 1982 275 1,908 10,810 440
Walnut Springs............... Dec-96 San Antonio, TX 1983 224 998 5,657 347
Waterford.................... Nov-96 Houston, TX 1984 312 533 5,692 768
Waterways Village............ Jun-97 Aventura, FL 1991 180 4,504 11,702 458
Weatherly.................... Oct-98 Stone Mountain, GA 1984 274 1,275 6,887 541
<CAPTION>
DECEMBER 31, 1999
---------------------------------------------------------------------------------
TOTAL COST
BUILDINGS NET OF
AND ACCUMULATED ACCUMULATED
PROPERTY NAME LAND IMPROVEMENTS TOTAL DEPRECIATION DEPRECIATION ENCUMBRANCES
- ------------- -------- ------------ ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Sunbury Downs................ 633 6,834 7,466 1,348 6,118 2,370
Sunchase of Clearwater....... 2,177 21,462 23,639 4,625 19,014 16,566
Sunchase of Orlando East..... 927 9,331 10,258 1,994 8,264 8,694
Sunchase of Orlando North.... 1,013 10,317 11,330 2,189 9,141 11,660
Sunchase Tampa............... 757 7,727 8,485 1,728 6,757 6,969
Sundown Village.............. 2,214 12,931 15,145 970 14,175 8,373
Sunlake...................... 632 4,419 5,052 776 4,276 2,766
Sunset Village............... 1,128 6,654 7,782 412 7,370 5,498
Surrey Oaks.................. 628 3,937 4,565 314 4,251 2,230
Swiss Village................ 1,129 11,583 12,712 4,692 8,019 4,373
Tall Timbers................. 1,238 7,509 8,747 722 8,025 3,973
Tar River Estates............ 2,203 4,513 6,716 (1,085) 7,801 4,686
Tara Bridge.................. 1,009 8,557 9,566 2,104 7,462 6,642
Tates Creek Village.......... 1,145 1,914 3,058 696 2,362 2,481
Tatum Gardens Apartments..... 1,117 6,244 7,360 795 6,565 3,394
The Bluffs................... 979 6,076 7,055 255 6,800 3,848
The Bradford................. 519 3,663 4,182 333 3,850 1,588
The Breakers................. 1,008 6,107 7,115 318 6,797 3,747
The Falls of Bells Ferry..... 6,568 37,919 44,487 2,635 41,852 26,980
The Hills.................... 1,367 8,278 9,645 787 8,858 8,029
The Knolls................... 2,406 3,309 5,716 766 4,950 5,177
The Landings................. 800 3,624 4,424 362 4,062 2,213
The Loft..................... 1,575 14,662 16,237 497 15,741 4,338
The Palisaides............... 1,214 5,790 7,004 854 6,149 4,547
The Park..................... 720 4,264 4,984 222 4,761 2,518
The Pines.................... 603 3,758 4,361 168 4,192 2,209
The Sterling................. 6,427 85,207 91,633 5,071 86,562 22,736
The Stratford................ 1,920 11,278 13,198 835 12,362 5,805
Thurber Manor................ 810 2,518 3,328 158 3,170 2,303
Timber Ridge................. 1,427 5,435 6,862 337 6,525 5,206
Timberlake................... 753 6,377 7,130 160 6,970 2,042
Timbermill................... 778 5,457 6,236 1,027 5,209 3,456
Timbertree................... 2,334 14,104 16,438 1,314 15,124 7,637
Tor.......................... 2,898 16,422 19,320 -- 19,320 11,615
Torrey Pines Village......... 1,230 4,842 6,072 406 5,666 3,607
Township at Highlands........ 1,064 22,014 23,077 2,857 20,220 9,279
Trails of Ashford............ 2,650 15,514 18,165 1,089 17,076 8,840
Twin Lake Towers............. 3,233 13,813 17,046 1,411 15,635 10,886
Victoria Station............. 682 6,537 7,219 2,016 5,203 3,199
Villa La Paz................. 573 3,355 3,929 223 3,705 2,362
Villa Ladera................. 2,235 11,210 13,445 1,882 11,563 5,345
Village Creek at Brookhill... 2,446 15,063 17,509 3,341 14,168 --
Village Crossing............. 1,618 10,296 11,914 748 11,166 6,955
Village Gardens.............. 1,080 3,588 4,668 379 4,289 2,410
Village Green................ 1,681 5,739 7,419 705 6,715 4,744
Village of Pennbrook......... 6,401 34,508 40,909 -- 40,909 19,300
Vista Ventana................ 1,908 11,251 13,158 783 12,375 6,245
Walnut Springs............... 998 6,004 7,002 536 6,466 4,170
Waterford.................... 533 6,460 6,993 2,106 4,887 3,870
Waterways Village............ 4,504 12,160 16,664 1,372 15,292 7,575
Weatherly.................... 1,275 7,427 8,703 386 8,316 4,607
</TABLE>
F-38
<PAGE> 70
<TABLE>
<CAPTION>
INITIAL COST COST
----------------------- CAPITALIZED
BUILDINGS SUBSEQUENT
DATE YEAR NUMBER AND TO
PROPERTY NAME ACQUIRED LOCATION BUILT OF UNITS LAND IMPROVEMENTS ACQUISITION
- ------------- -------- ---------------------- --------- -------- -------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
West 135th Street............ Aug-98 New York, NY 1979 242 1,195 14,969 1,374
West Lake Arms Apartments.... May-97 Indianapolis, IN 1977 1,381 2,816 24,661 27
Westway Village.............. May-98 Houston, TX 1979 276 980 5,554 4,768
Westgate..................... Oct-98 Houston, TX 1971 313 1,985 9,158 124
Whispering Pines............. Oct-98 Madison, WI 1986 186 719 4,046 (191)
Wickertree................... Oct-97 Phoenix, AZ 1983 226 1,225 6,944 335
Wildflower................... Oct-97 Midland, TX 1982 264 705 3,996 1,003
Williams Cove................ Jul-94 Irving, TX 1984 260 1,227 6,972 631
Williamsburg................. May-98 Rolling Meadows, IL 1985 379 2,717 15,398 685
Williamsburg Apartments...... Oct-98 Indianapolis, IN 1974 460 2,333 9,803 129
Williamsburg on the Wabash... Dec-99 West Lafayette, IN 1967 473 3,225 17,569 --
Willow Park on Lake
Adelaide.................... Oct-98 Altamonte Springs, FL 1972 185 1,045 5,404 178
Willowick.................... Oct-98 Greenville, SC 1974 180 734 2,529 226
Windridge.................... May-98 San Antonio, TX 1983 286 1,480 8,386 306
Windsor at South Square...... Oct-98 Durham, NC 1972 230 1,415 4,852 103
Windsor Hills................ Oct-98 Blacksburg, VA 1970 300 1,859 6,857 137
Windsor Landing.............. Oct-97 Morrow, GA 1991 200 1,641 9,298 330
Windward at the Villages..... Oct-97 W. Palm Beach, FL 1988 196 1,595 9,037 683
Woodhill..................... Dec-96 Denton, TX 1985 352 1,554 8,805 983
Woodhollow................... Oct-97 Austin, TX 1974 108 658 3,728 299
Woodland Ridge............... Dec-96 Irving, TX 1984 130 595 3,373 267
Woodland Village I........... Oct-98 Columbia, SC 1970 308 768 4,351 3,491
Woodlands.................... Dec-99 Battle Creek, MI 1987 76 496 3,513 --
Woodlands/Odessa............. Jul-94 Odessa, TX 1982 240 676 3,835 888
Woodlands/Tyler.............. Jul-94 Tyler, TX 1984 256 1,029 5,845 733
Woods of Inverness........... Oct-98 Houston, TX 1983 272 1,774 6,802 121
Wyntre Brook Apartments...... May-97 West Chester, PA 1976 212 536 8,182 46
Yorktown Apartments.......... Oct-98 Lombard, IL 1973 368 3,712 10,447 657
Yorktree..................... Oct-97 Carolstream, IL 1972 293 1,968 11,151 911
-------- ---------- --------
$667,279 $3,432,295 $408,961
======== ========== ========
<CAPTION>
DECEMBER 31, 1999
---------------------------------------------------------------------------------
TOTAL COST
BUILDINGS NET OF
AND ACCUMULATED ACCUMULATED
PROPERTY NAME LAND IMPROVEMENTS TOTAL DEPRECIATION DEPRECIATION ENCUMBRANCES
- ------------- -------- ------------ ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
West 135th Street............ 1,196 16,342 17,538 5,416 12,122 328
West Lake Arms Apartments.... 2,816 24,689 27,505 1,040 26,465 16,446
Westway Village.............. 2,457 8,844 11,301 1,124 10,178 4,798
Westgate..................... 1,985 9,283 11,268 426 10,842 5,987
Whispering Pines............. 693 3,881 4,574 -- 4,574 4,251
Wickertree................... 1,225 7,279 8,504 718 7,786 4,014
Wildflower................... 705 4,999 5,704 458 5,246 2,011
Williams Cove................ 1,227 7,603 8,830 1,774 7,056 3,708
Williamsburg................. 2,717 16,083 18,800 1,154 17,646 12,240
Williamsburg Apartments...... 2,333 9,932 12,265 1,394 10,871 7,400
Williamsburg on the Wabash... 3,225 17,569 20,794 -- 20,794 12,554
Willow Park on Lake
Adelaide.................... 1,045 5,582 6,627 553 6,073 4,000
Willowick.................... 734 2,755 3,489 320 3,169 1,178
Windridge.................... 1,480 8,692 10,172 614 9,557 6,115
Windsor at South Square...... 1,415 4,956 6,370 547 5,824 2,146
Windsor Hills................ 1,859 6,995 8,854 554 8,300 4,123
Windsor Landing.............. 1,642 9,627 11,269 901 10,367 5,278
Windward at the Villages..... 1,595 9,721 11,315 887 10,429 4,408
Woodhill..................... 1,554 9,789 11,343 819 10,524 5,627
Woodhollow................... 658 4,027 4,685 380 4,305 2,027
Woodland Ridge............... 595 3,639 4,234 402 3,832 2,006
Woodland Village I........... 1,913 6,697 8,610 709 7,901 4,950
Woodlands.................... 496 3,513 4,009 -- 4,009 2,154
Woodlands/Odessa............. 676 4,724 5,399 1,127 4,272 --
Woodlands/Tyler.............. 1,029 6,578 7,607 1,510 6,097 4,049
Woods of Inverness........... 1,774 6,923 8,697 629 8,068 5,052
Wyntre Brook Apartments...... 536 8,228 8,764 406 8,358 6,651
Yorktown Apartments.......... 3,712 11,105 14,817 900 13,917 12,187
Yorktree..................... 1,968 12,062 14,030 1,131 12,899 6,431
-------- ---------- ---------- -------- ---------- ----------
$661,502 $3,847,033 $4,508,535 $416,497 $4,092,038 $2,375,089
======== ========== ========== ======== ========== ==========
</TABLE>
F-39
<PAGE> 71
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
REAL ESTATE AND ACCUMULATED DEPRECIATION
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
(IN THOUSANDS)
<TABLE>
<CAPTION>
1999 1998 1997
---------- ---------- ----------
<S> <C> <C> <C>
REAL ESTATE
Balance at beginning of year........................... $2,802,598 $1,657,207 $ 865,222
Additions during the year:
Newly consolidated assets........................... 1,101,134
Acquisitions........................................ 462,891 1,116,643 786,571
Additions........................................... 177,245 80,368 26,808
Sales/transfers to held for sale.................... (35,333) (51,620) (21,394)
---------- ---------- ----------
Balance at end of year................................. $4,508,535 $2,802,598 $1,657,207
========== ========== ==========
ACCUMULATED DEPRECIATION
Balance at beginning of year........................... $ 228,880 $ 153,285 $ 120,077
Additions during the year:
Depreciation........................................ 131,754 84,635 37,741
Newly consolidated assets........................... 59,627 -- --
Sales/transfers to held for sale.................... (3,765) (9,040) (4,533)
---------- ---------- ----------
Balance at end of year................................. $ 416,497 $ 228,880 $ 153,285
========== ========== ==========
</TABLE>
F-40
<PAGE> 72
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
2.1 -- Second Amended and Restated Agreement and Plan of Merger,
dated as of January 22, 1999, by and between Apartment
Investment and Management Company and Insignia Properties
Trust (Exhibit 2.2 to the Current Report on Form 8-K of
Insignia Properties Trust, dated February 11, 1999, is
incorporated herein by this reference)
2.2 -- Amended and Restated Agreement and Plan of Merger, dated
as of May 26, 1998, by and among Apartment Investment
Management Company, AIMCO Properties, L.P., Insignia
Financial Group, Inc., and Insignia/ESG Holdings, Inc.
(Exhibit 2.1 to AIMCO's Registration Statement on Form
S-4, filed August 5, 1998, is incorporated herein by this
reference)
3.1 -- Charter
3.2 -- Bylaws
4.1 -- Amended and Restated Declaration of Trust of IFT
Financing I (formerly Insignia Financing I), dated as of
November 1, 1996, among Insignia Financial Group, Inc. as
Sponsor, First Union National Bank of South Carolina as
Property Trustee, First Union Bank of Delaware, as
Delaware Trustee and Andrew I. Farkas, John K. Lines and
Ronald Uretta as Regular Trustees (Exhibit 4.2 to Form
S-3 of Insignia Financial Group, Inc. dated December 10,
1996, is incorporated herein by this reference)
4.2 -- Indenture for the 6.5% Convertible Subordinated
Debentures, dated as of November 1, 1996, between
Insignia Financial Group, Inc., as Issuer and First Union
National Bank of South Carolina, as Trustee (Exhibit 4.2
to Form S-3 of Insignia Financial Group, Inc., dated
December 10, 1996, is incorporated herein by this
reference)
4.3 -- First Supplemental Indenture, dated as of October 1,
1998, by and among Apartment Investment and Management
Company, Insignia Financial Group, Inc., and First Union
National Bank (formerly First Union National Bank of
South Carolina, as Trustee) (Exhibit 4.3 to AIMCO's
Annual Report on Form 10-K for the fiscal year 1998, is
incorporated herein by this reference)
10.1 -- Third Amended and Restated Agreement of Limited
Partnership of AIMCO Properties, L.P., dated as of July
29, 1994 as amended and restated as of October 1, 1998
(Exhibit 10.8 to AIMCO's Quarterly Report on Form 10-Q
for the quarterly period ending September 30, 1998, is
incorporated herein by this reference)
10.2 -- First Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of November 6, 1998 (Exhibit 10.9 to
AIMCO's Quarterly Report on Form 10-Q for the quarterly
period ending September 30, 1998, is incorporated herein
by this reference)
10.3 -- Second Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of December 30, 1998 (Exhibit 10.1 to
Amendment No. 1 to AIMCO's Current Report on Form 8-K/A,
filed February 11, 1999, is incorporated herein by this
reference)
10.4 -- Third Amendment to Third Amended and Restated Agreement
of Limited Partnership of AIMCO Properties, L.P., dated
as of February 18, 1999 (Exhibit 10.12 to AIMCO's Annual
Report on Form 10-K for the fiscal year 1998, is
incorporated herein by this reference)
</TABLE>
<PAGE> 73
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
10.5 -- Fourth Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of March 25, 1999 (Exhibit 10.2 to AIMCO's
Quarterly Report on Form 10-Q for the quarterly period
ending March 31, 1999, is incorporated herein by this
reference)
10.6 -- Fifth Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of March 26, 1999 (Exhibit 10.3 to AIMCO's
Quarterly Report on Form 10-Q for the quarterly period
ending March 31, 1999, is incorporated herein by this
reference)
10.7 -- Sixth Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of March 26, 1999 (Exhibit 10.1 to AIMCO's
Quarterly Report on Form 10-Q for the quarterly period
ending June 30, 1999, is incorporated herein by this
reference)
10.8 -- Seventh Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of September 27, 1999 (Exhibit 10.1 to
AIMCO's Quarterly Report on Form 10-Q for the quarterly
period ending September 30, 1999, is incorporated herein
by this reference)
10.9 -- Eighth Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of December 14, 1999
10.10 -- Ninth Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of December 21, 1999
10.11 -- Tenth Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of December 21, 1999
10.12 -- Eleventh Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of January 13, 2000
10.13 -- Shareholders Agreement, dated October 1, 1998, by and
among Apartment Investment and Management Company, Andrew
L. Farkas, James A. Aston and Frank M. Garrison (Exhibit
10.4 to AIMCO's Schedule 13D filed on October 15, 1998,
is incorporated herein by this reference)
10.14 -- Common Stock Purchase Agreement made as of August 26,
1997, by and between Apartment Investment and Management
Company and ABKB/LaSalle Securities Limited Partnership
(Exhibit 99.1 to AIMCO's Current Report on Form 8-K,
dated August 26, 1997, is incorporated herein by this
reference)
10.15 -- Amended and Restated Assignment and Assumption Agreement,
dated as of December 7, 1998, by and among Insignia
Properties, L.P. and AIMCO Properties, L.P. (Exhibit 10.1
to the Current Report on Form 8-K of Insignia Properties
Trust, dated February 11, 1999, is incorporated herein by
this reference)
10.16 -- Amended and Restated Indemnification Agreement, dated as
of May 26, 1998, by and between Apartment Investment and
Management Company and Insignia/ESG Holdings, Inc.
(Exhibit 2.2 to AIMCO's Registration Statement on Form
S-4, filed August 5, 1998, is incorporated herein by this
reference)
10.17 -- Credit Agreement (Secured Revolving Credit Facility),
dated as of August 16, 1999, among AIMCO Properties,
L.P., Bank of America, BankBoston, N.A., and First Union
National Bank (Exhibit 10.1 to the Current Report on Form
8-K of Apartment Investment and Management Company, dated
as of August 16, 1999, is incorporated herein by this
reference)
</TABLE>
<PAGE> 74
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
10.18 -- Borrower Pledge Agreement, dated August 16, 1999 between
AIMCO Properties, L.P. and Bank of America (Exhibit 10.2
to the Current Report on Form 8-K of Apartment Investment
and Management Company, dated August 16, 1999 is
incorporated herein by this reference)
10.19 -- Form of Committed Loan Note, issued by AIMCO Properties,
L.P. to Bank of America, BankBoston, N.A., and First
Union National Bank (Exhibit 10.3 to the Current Report
on Form 8-K of Apartment Investment and Management
Company, dated August 16, 1999, is incorporated herein by
this reference)
10.20 -- Form of Swing Line Note, issued by AIMCO Properties, L.P.
to Bank of America, BankBoston, N.A., and First Union
National Bank (Exhibit 10.4 to the Current Report on Form
8-K of Apartment Investment and Management Company, dated
August 16, 1999, is incorporated herein by this
reference)
10.21 -- Form of Payment Guaranty, by Apartment Investment and
Management Company, AIMCO/NHP Holdings, Inc., NHP A&R
Services, Inc., and NHP Management Company (Exhibit 10.5
to the Current Report on Form 8-K of Apartment Investment
and Management Company, dated August 16, 1999, is
incorporated herein by this reference)
10.22 -- Employment Contract, executed on July 29, 1994, by and
between AIMCO Properties, L.P., and Peter Kompaniez
(Exhibit 10.44A to AIMCO's Annual Report on Form 10-K for
the fiscal year 1994, is incorporated herein by this
reference)*
10.23 -- Employment Contract executed on July 29, 1994 by and
between AIMCO Properties, L.P. and Terry Considine
(Exhibit 10.44C to AIMCO's Annual Report on Form 10-K for
the fiscal year 1994, is incorporated herein by this
reference)*
10.24 -- Employment Contract executed on July 29, 1994 by and
between AIMCO Properties, L.P. and Steven D. Ira (Exhibit
10.44D to AIMCO's Annual Report on Form 10-K for fiscal
year 1994, is incorporated herein by this reference)*
10.25 -- Apartment Investment and Management Company 1998
Incentive Compensation Plan (Annex B to AIMCO's Proxy
Statement for Annual Meeting of Stockholders to be held
on May 8, 1998, is incorporated herein by this
reference)*
10.26 -- Apartment Investment and Management Company 1997 Stock
Award and Incentive Plan (October 1999)*
10.27 -- Form of Restricted Stock Agreement (1997 Stock Award and
Incentive Plan) (Exhibit 10.11 to AIMCO's Quarterly
Report on Form 10-Q for the quarterly period ending
September 30, 1997, is incorporated herein by this
reference)*
10.28 -- Form of Incentive Stock Option Agreement (1997 Stock
Award and Incentive Plan) (Exhibit 10.42 to AIMCO's
Annual Report on Form 10-K for the fiscal year 1998, is
incorporated herein by this reference)*
10.29 -- Apartment Investment and Management Company Non-Qualified
Employee Stock Option Plan, adopted August 29, 1996
(Exhibit 10.8 to AIMCO's Quarterly Report on Form 10-Q
for the quarterly period ending September 30, 1996, is
incorporated herein by this reference)*
10.30 -- Amended and Restated Apartment Investment and Management
Company Non-Qualified Employee Stock Option Plan (Annex B
to AIMCO's Proxy Statement for the Annual Meeting of
Stockholders to be held on April 24, 1997, is
incorporated herein by this reference)*
</TABLE>
<PAGE> 75
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
10.31 -- The 1994 Stock Incentive Plan for Officers, Directors and
Key Employees of Ambassador Apartments, Inc., Ambassador
Apartments, L.P., and Subsidiaries (Exhibit 10.40 to
Ambassador Apartments, Inc. Annual Report on Form 10-K
for the fiscal year 1997, is incorporated herein by this
reference)*
10.32 -- Amendment to the 1994 Stock Incentive Plan for Officers,
Directors and Key Employees of Ambassador Apartments,
Inc., Ambassador Apartments, L.P. and Subsidiaries
(Exhibit 10.41 to Ambassador Apartments, Inc. Annual
Report on Form 10-K for the fiscal year 1997, is
incorporated herein by this reference)*
10.33 -- The 1996 Stock Incentive Plan for Officers, Directors and
Key Employees of Ambassador Apartments, Inc., Ambassador
Apartments, L.P., and Subsidiaries, as amended March 20,
1997 (Exhibit 10.42 to Ambassador Apartments, Inc. Annual
Report on Form 10-K for the fiscal year 1997, is
incorporated herein by this reference)*
10.34 -- Insignia 1992 Stock Incentive Plan, as amended through
March 28, 1994 and November 13, 1995 (Exhibit 10.1 to
Insignia Financial Group, Inc. Annual Report on Form 10-K
for the fiscal year 1997, is incorporated herein by this
reference)*
10.35 -- NHP Incorporated 1990 Stock Option Plan (Exhibit 10.9 to
NHP Incorporated Annual Report on Form 10-K for the
fiscal year 1995, is incorporated herein by this
reference)*
10.36 -- NHP Incorporated 1995 Incentive Stock Option Plan
(Exhibit 10.10 to NHP Incorporated Annual Report on Form
10-K for the fiscal year 1995, is incorporated herein by
this reference)*
10.37 -- Summary of Agreement for Sale of Stock to Executive
Officers (Exhibit 10.104 to AIMCO's Annual Report on Form
10-K for the fiscal year 1996, is incorporated herein by
this reference)*
21.1 -- List of Subsidiaries
23.1 -- Consent of Ernst & Young LLP
27.1 -- Financial Data Schedule
99.1 -- Agreement re: disclosure of long-term debt instruments
</TABLE>
- ---------------
(1) Schedule and supplemental materials to the exhibits have been omitted but
will be provided to the Securities and Exchange Commission upon request.
* Management contract
<PAGE> 1
EXHIBIT 3.1
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
ARTICLES OF RESTATEMENT
APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation,
having its principal office in Baltimore City, Maryland (hereinafter referred to
as the "CORPORATION" or "AIMCO"), hereby certifies to the State Department of
Assessments and Taxation of Maryland that:
FIRST: The Corporation desires to and does hereby restate its Charter
as currently in effect. The Charter as currently in effect is found in the
following charter documents filed with the State Department of Assessments and
Taxation of Maryland (the "SDAT"):
(1) Articles of Amendment and Restatement as filed with the
SDAT on July 15, 1994 (as corrected by Certificates of Correction as
filed with the SDAT on November 6, 1997 at 1:35 p.m., on November 30,
1998 at 1:22 p.m., on May 24, 1999 at 1:38 p.m. and on May 24, 1999 at
1:47 p.m., respectively);
(2) Articles of Amendment as filed with the SDAT on July 28,
1994 at 11:33 a.m. (as corrected by Certificate of Correction as filed
with the SDAT on November 6, 1997 at 1:37 p.m. and on May 24, 1999 at
1:43 p.m.);
(3) Articles Supplementary as filed with the SDAT on August 4,
1997 (Class B Preferred Stock);
<PAGE> 2
(4) Articles Supplementary as filed with the SDAT on December
22, 1997 (as corrected by Certificates of Correction as filed with the
SDAT on February 18, 1998 and on November 30, 1998 at 1:24 p.m.,
respectively) (Class C Preferred Stock);
(5) Articles Supplementary as filed with the SDAT on February
18, 1998 (as corrected by Certificate of Correction as filed with the
SDAT on November 30, 1998 at 1:26 p.m.) (Class D Preferred Stock);
(6) Articles of Amendment as filed with the SDAT on June 19,
1998;
(7) Articles Supplementary as filed with the SDAT on July 13,
1998 (Class G Preferred Stock);
(8) Articles Supplementary as filed with the SDAT on August
13, 1998 (Class H Preferred Stock);
(9) Articles of Merger as filed with the SDAT on October 1,
1998 (as corrected by Certificate of Correction as filed with the SDAT
on May 24, 1999 at 1:33 p.m.);
(10) Articles Supplementary as filed with the SDAT on November
6, 1998 (Class J Preferred Stock);
(11) Articles Supplementary as filed with the SDAT on February
17, 1999 (Class K Preferred Stock);
2
<PAGE> 3
(12) Articles Supplementary as filed with the SDAT on May 25,
1999 at 1:24 p.m. (Class I Preferred Stock); and
(13) Articles Supplementary as filed with the SDAT on May 25,
1999 at l:29 p.m.
SECOND: The Charter of the Corporation as restated in its entirety
(except to the extent that the provisions of Articles Supplementary referred to
in Article FIRST, paragraphs (3), (4), (5), (7), (8), (10), (11), and (12) above
relating to the various classes of Preferred Stock of the Corporation are
incorporated by reference) is as follows:
ARTICLE I
ARTICLE II
PURPOSE
The purpose for which the Corporation is formed is to engage in any
lawful act or activity for which corporations may be organized under the general
laws of the State of Maryland authorizing the formation of corporations as now
or hereafter in force.
ARTICLE III
PRINCIPAL OFFICE IN STATE AND RESIDENT AGENT
The post office address of the principal office of the Corporation in
the State of Maryland is c/o CSC -- Lawyers Incorporating Service Company, 11
East Chase Street, Baltimore, Maryland 21202. The name and address of the
resident agent of the Corporation in the State of Maryland is CSC -- Lawyers
Incorporating Service Company, 11 East Chase Street, Baltimore, Maryland 21202.
The resident agent is a Maryland corporation located in the State of Maryland.
3
<PAGE> 4
ARTICLE IV
STOCK
SECTION 1. AUTHORIZED SHARES
1.1 CLASS AND NUMBER OF SHARES. The total number of shares of
stock that the Corporation from time to time shall have authority to issue is
510,587,500 shares of capital stock having a par value of $.01 per share,
amounting to an aggregate par value of $5,105,875, consisting of 480,937,500
shares currently classified as Class A Common Stock, par value $.01 per share
(the "CLASS A COMMON STOCK") (the Class A Common Stock and all other classes or
series of common stock hereafter classified being referred to collectively
herein as the "COMMON STOCK"), 750,000 shares currently classified as Class B
Cumulative Convertible Preferred Stock, par value $.01 per share (the "CLASS B
PREFERRED STOCK"), 2,400,000 shares currently classified as Class C Cumulative
Preferred Stock, par value $.01 per share (the "CLASS C PREFERRED STOCK"),
4,200,000 shares currently classified as Class D Cumulative Preferred Stock, par
value $.01 per share (the "CLASS D PREFERRED STOCK"), 4,050,000 shares currently
classified as Class G Cumulative Preferred Stock, par value $.01 per share (the
"CLASS G PREFERRED STOCK"), 2,000,000 shares currently classified as Class H
Cumulative Preferred Stock, par value $.01 per share (the "CLASS H PREFERRED
STOCK"), 10,000,000 shares currently classified as Class I Cumulative Preferred
Stock, par value $.01 per share (the "CLASS I PREFERRED STOCK"), 1,250,000
shares currently classified as Class J Cumulative Convertible Preferred Stock,
par value $.01 per share (the "CLASS J PREFERRED STOCK"), and 5,000,000 shares
currently classified as Class K Convertible Cumulative Preferred Stock, par
value $.01 per share (the "CLASS K PREFERRED STOCK") (the Class B Preferred
Stock, the Class C Preferred Stock, the Class D Preferred Stock, the Class G
Preferred Stock, the Class H Preferred Stock, the Class J Preferred Stock, Class
K Preferred Stock, and all other classes or series of preferred stock hereafter
classified being referred to collectively herein as the "PREFERRED STOCK").(1)
- -----------------------
(1) This section has been revised to reflect action taken in articles
supplementary filed since the section was last amended on June 19, 1998: (i) to
delete language relating to Class B Common Stock, the shares of which were
either cancelled or reclassified into Class A Common Stock; (ii) to add language
relating to Class G Preferred Stock, Class H Preferred Stock, Class I Preferred
Stock, Class J Preferred Stock, and Class K Preferred Stock which were
reclassified from Class A Common Stock; (iii) to adjust the number of shares and
aggregate par value of the authorized
(continued...)
4
<PAGE> 5
1.2 CHANGES IN CLASSIFICATION AND PREFERENCES. The Board of
Directors by resolution or resolutions from time to time may classify and
reclassify any unissued shares of capital stock by setting or changing in any
one or more respects the preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends, qualifications or terms or conditions
of redemption of such shares of capital stock, including, but not limited to,
ownership restrictions consistent with the Ownership Restrictions with respect
to each such class or subclass of capital stock, and the number of shares
constituting each such class or subclass, and to increase or decrease the number
of shares of any such class or subclass.
SECTION 2. NO PREEMPTIVE RIGHTS. No holder of shares of stock of the
Corporation shall, as such holder, have any preemptive right to purchase or
subscribe for any additional shares of the stock of the Corporation or any other
security of the Corporation that it may issue or sell.
SECTION 3. COMMON STOCK.
3.1 DIVIDEND RIGHTS. The holders of shares of Common Stock
shall be entitled to receive such dividends as may be declared by the Board of
Directors of the Corporation out of funds legally available therefor.
3.2 RIGHTS UPON LIQUIDATION. Subject to the preferential
rights of Preferred Stock, if any, as may be determined by the Board of
Directors pursuant to Section l of this Article IV, in the event of any
voluntary or involuntary liquidation, dissolution or winding up of, or any
distribution of the assets of the Corporation, each holder of shares of Common
Stock shall be entitled to receive, ratably with each other holder of Common
Stock, that portion of the assets of the Corporation available for distribution
to its shareholders as the number of shares of the Common Stock held by such
holder bears to the total number of shares of Common Stock then outstanding.
- -----------------------
(1) (...continued)
capital stock of the Corporation for those shares of Class B Common Stock that
were cancelled, and (iv) to adjust the number of shares of authorized Class A
Common Stock, Class C Preferred Stock, Class D Preferred Stock, Class H
Preferred Stock, Class I Preferred Stock, and Class K Preferred Stock for shares
reclassified into or from Class A Common Stock. Class E Preferred Stock was
authorized, issued, converted and reclassified into Class A Common Stock. Class
F Preferred Stock has not heretofore been used as class a designations.
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3.3 VOTING RIGHTS. The holders of shares of Common Stock shall
be entitled to vote on all matters (on which a holder of shares of Common Stock
shall be entitled to vote) at the meetings of the shareholders of the
Corporation, and shall be entitled to one vote for each share of Common Stock
entitled to vote at such meeting.
3.4 RESTRICTION ON OWNERSHIP AND TRANSFERS. The Beneficial
Ownership and Transfer of Common Stock shall be subject to the restrictions set
forth in this Section 3.4 of this Article IV.
3.4.1 RESTRICTIONS.
(A) LIMITATION ON BENEFICIAL OWNERSHIP.
Except as provided in Section 3.4.8 of this Article IV, from and after the date
of the Initial Public Offering, no Person (other than the Initial Holder or a
Look-Through Entity) shall Beneficially Own shares of Common Stock in excess of
the Ownership Limit, the Initial Holder shall not Beneficially Own shares of
Common Stock in excess of the Initial Holder Limit and no Look-Through Entity
shall Beneficially Own shares of Common Stock in excess of the Look-Through
Ownership Limit.
(B) TRANSFERS IN EXCESS OF OWNERSHIP LIMIT.
Except as provided in Section 3.4.8 of this Article IV, from and after the date
of the Initial Public Offering (and subject to Section 3.4.12 of this Article
IV), any Transfer (whether or not such Transfer is the result of transactions
entered into through the facilities of the NYSE or other securities exchange or
an automated inter-dealer quotation system) that, if effective, would result in
any Person (other than the Initial Holder or a Look-Through Entity) Beneficially
Owning shares of Common Stock in excess of the Ownership Limit shall be void ab
initio as to the Transfer of such shares of Common Stock that would be otherwise
Beneficially Owned by such Person in excess of the Ownership Limit, and the
intended transferee shall acquire no rights in such shares of Common Stock.
(C) TRANSFERS IN EXCESS OF INITIAL HOLDER
LIMIT. Except as provided in Section 3.4.8 of this Article IV, from and after
the date of the Initial Public Offering (and subject to Section 3.4.12 of this
Article IV), any Transfer (whether or not such Transfer is the result of
transactions entered into through the facilities of the NYSE or other securities
exchange or an automated inter-dealer quotation system) that, if effective,
would result in the Initial Holder Beneficially Owning shares of Common Stock in
excess of the Initial Holder Limit shall be void ab initio as to the Transfer of
such shares of Common Stock that would be otherwise
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Beneficially Owned by the Initial Holder in excess of the Initial Holder Limit,
and the Initial Holder shall acquire no rights in such shares of Common Stock.
(D) TRANSFERS IN EXCESS OF LOOK-THROUGH
OWNERSHIP LIMIT. Except as provided in Section 3.4.8 of this Article IV, from
and after the date of the Initial Public Offering (and subject to Section 3.4.12
of this Article IV), any Transfer (whether or not such Transfer is the result of
transactions entered into through the facilities of the NYSE or other securities
exchange or an automated inter-dealer quotation system) that, if effective,
would result in any Look-Through Entity Beneficially Owning shares of Common
Stock in excess of the Look-Through Ownership Limit shall be void ab initio as
to the Transfer of such shares of Common Stock that would be otherwise
Beneficially Owned by such Look-Through Entity in excess of the Look- Through
Ownership Limit, and such Look-Through Entity shall acquire no rights in such
shares of Common Stock.
(E) TRANSFERS RESULTING IN OWNERSHIP BY
FEWER THAN 100 PERSONS. Except as provided in Section 3.4.8 of this Article IV,
from and after the date of the Initial Public Offering (and subject to Section
3.4.12 of this Article IV), any Transfer (whether or not such Transfer is the
result of transactions entered into through the facilities of the NYSE or other
securities exchange or an automated inter-dealer quotation system) that, if
effective, would result in the Common Stock being Beneficially Owned by less
than 100 Persons (determined without reference to any rules of attribution)
shall be void ab initio as to the Transfer of such shares of Common Stock that
would be otherwise Beneficially Owned by the transferee, and the intended
transferee shall acquire no rights in such shares of Common Stock.
(F) TRANSFERS RESULTING IN "CLOSELY HELD"
STATUS. From and after the date of the Initial Public Offering, any Transfer
that, if effective, would result in the Corporation being "closely held" within
the meaning of Section 856(h) of the Code, or would otherwise result in the
Corporation failing to qualify as a REIT (including, without limitation, a
Transfer or other event that would result in the Corporation owning (directly or
constructively) an interest in a tenant that is described in Section
856(d)(2)(B) of the Code if the income derived by the Corporation from such
tenant would cause the Corporation to fail to satisfy any of the gross income
requirements of Section 856(c) of the Code) shall be void ab initio as to the
Transfer of shares of Common Stock that would cause the Corporation (i) to be
"closely held" within the meaning of Section 856(h) of the Code or (ii)
otherwise fail to qualify as a REIT, as the case may be, and the intended
transferee shall acquire no rights in such shares of Common Stock.
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(G) SEVERABILITY ON VOID TRANSACTIONS. A
Transfer of a share of Common Stock that is null and void under Sections
3.4.1(B), (C), (D), (E) or (F) of this Article IV because it would, if
effective, result in (i) the ownership of Common Stock in excess of the Initial
Holder Limit, the Ownership Limit, or the Look-Through Ownership Limit, (ii)
the Common Stock being Beneficially Owned by less than 100 Persons (determined
without reference to any rules of attribution), (iii) the Corporation being
"closely held" within the meaning of Section 856(h) of the Code or (iv) the
Corporation otherwise failing to qualify as a REIT, shall not adversely affect
the validity of the Transfer of any other share of Common Stock in the same or
any other related transaction.
3.4.2 REMEDIES FOR BREACH. If the Board of Directors
or a committee thereof shall at any time determine in good faith that a Transfer
or other event has taken place in violation of Section 3.4.1 of this Article IV
or that a Person intends to acquire or has attempted to acquire Beneficial
Ownership of any shares of Common Stock in violation of Section 3.4.1 of this
Article IV (whether or not such violation is intended), the Board of Directors
or a committee thereof shall be empowered to take any action as it deems
advisable to refuse to give effect to or to prevent such Transfer or other
event, including, but not limited to, refusing to give effect to such Transfer
or other event on the books of the Corporation, causing the Corporation to
redeem such shares at the then current Market Price and upon such terms and
conditions as may be specified by the Board of Directors in its sole discretion
(including, but not limited to, by means of the issuance of long-term
indebtedness for the purpose of such redemption), demanding the repayment of any
distributions received in respect of shares of Common Stock acquired in
violation of Section 3.4.1 of this Article IV or instituting proceedings to
enjoin such Transfer or to rescind such Transfer or attempted Transfer;
provided, however, that any Transfers or attempted Transfers (or in the case of
events other than a Transfer, Beneficial Ownership) in violation of Section
3.4.1 of this Article IV, regardless of any action (or non-action) by the Board
of Directors or such committee, (a) shall be void ab initio or (b) shall
automatically result in the transfer described in Section 3.4.3 of this Article
IV; provided, further, that the provisions of this Section 3.4.2 shall be
subject to the provisions of Section 3.4.12 of this Article IV; provided,
further, that neither the Board of Directors nor any committee thereof may
exercise such authority in a manner that interferes with any ownership or
transfer of Common Stock that is expressly authorized pursuant to Section
3.4.8(D) of this Article IV.
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3.4.3. TRANSFER IN TRUST.
(A) ESTABLISHMENT OF TRUST. If,
notwithstanding the other provisions contained in this Article IV, at any time
after the date of the Initial Public Offering there is a purported Transfer (an
"EXCESS TRANSFER") (whether or not such Transfer is the result of transactions
entered into through the facilities of the NYSE or other securities exchange or
an automated inter-dealer quotation system) or other change in the capital
structure of the Corporation (including, but not limited to, any redemption of
Preferred Stock) or other event such that (a) any Person (other than the Initial
Holder or a Look-Through Entity) would Beneficially Own shares of Common Stock
in excess of the Ownership Limit, or (b) the Initial Holder would Beneficially
Own shares of Common Stock in excess of the Initial Holder Limit, or (c) any
Person that is a Look-Through Entity would Beneficially Own shares of Common
Stock in excess of the Look-Through Ownership Limit (in any such event, the
Person, Initial Holder or Look-Through Entity that would Beneficially Own shares
of Common Stock in excess of the Ownership Limit, the Initial Holder Limit or
the Look-Through Entity Limit is referred to as a "PROHIBITED TRANSFEREE"),
then, except as otherwise provided in Section 3.4.8 of this Article IV, such
shares of Common Stock in excess of the Ownership Limit, the Initial Holder
Limit or the Look-Through Ownership Limit, as the case may be, (rounded up to
the nearest whole share) shall be automatically transferred to a Trustee in his
capacity as trustee of a Trust for the exclusive benefit of one or more
Charitable Beneficiaries. Such transfer to the Trustee shall be deemed to be
effective as of the close of business on the business day prior to the date of
the Excess Transfer, change in capital structure or another event giving rise to
a potential violation of the Ownership Limit, the Initial Holder Limit or the
Look Through Entity Ownership Limit.
(B) APPOINTMENT OF TRUSTEE. The Trustee
shall be appointed by the Corporation and shall be a Person unaffiliated with
either the Corporation or any Prohibited Transferee. The Trustee may be an
individual or a bank or trust company duly licensed to conduct a trust business.
(C) STATUS OF SHARES HELD BY THE TRUSTEE.
Shares of Common Stock held by the Trustee shall be issued and outstanding
shares of capital stock of the Corporation. Except to the event provided in
Section 3.4.3(E), the Prohibited Transferee shall have no rights in the Common
Stock held by the Trustee, and the Prohibited Transferee shall not benefit
economically from ownership of any shares held in trust by the Trustee, shall
have no rights to dividends and shall not possess any rights to vote or other
rights attributable to the shares held in the Trust.
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(D) DIVIDEND AND VOTING RIGHTS. The Trustee
shall have all voting rights and rights to dividends with respect to shares of
Common Stock held in the Trust, which rights shall be exercised for the benefit
of the Charitable Beneficiary. Any dividend or distribution paid prior to the
discovery by the Corporation that the shares of Common Stock have been
transferred to the Trustee shall be repaid to the Corporation upon demand, and
any dividend or distribution declared but unpaid shall be rescinded as void ab
initio with respect to such shares of Common Stock. Any dividends or
distributions so disgorged or rescinded shall be paid over to the Trustee and
held in trust for the Charitable Beneficiary. Any vote cast by a Prohibited
Transferee prior to the discovery by the Corporation that the shares of Common
Stock have been transferred to the Trustee will be rescinded as void ab initio
and shall be recast in accordance with the desires of the Trustee acting for the
benefit of the Charitable Beneficiary. The owner of the shares at the time of
the Excess Transfer, change in capital structure or other event giving rise to a
potential violation of the Ownership Limit, Initial Holder Limit or Look-Through
Entity Ownership Limit shall be deemed to have given an irrevocable proxy to the
Trustee to vote the shares of Common Stock for the benefit of the Charitable
Beneficiary.
(E) RESTRICTIONS ON TRANSFER. The Trustee of
the Trust may transfer the shares held in the Trust to a person, designated by
the Trustee, whose ownership of the shares will not violate the Ownership
Restrictions. If such a transfer is made, the interest of the Charitable
Beneficiary shall terminate and proceeds of the sale shall be payable to the
Prohibited Transferee and to the Charitable Beneficiary as provided in this
Section 3.4.3(E). The Prohibited Transferee shall receive the lesser of (l) the
price paid by the Prohibited Transferee for the shares or, if the Prohibited
Transferee did not give value for the shares (through a gift, devise or other
transaction), the Market Price of the shares on the day of the event causing the
shares to be held in the Trust and (2) the price per share received by the
Trustee from the sale or other disposition of the shares held in the Trust. Any
proceeds in excess of the amount payable to the Prohibited Transferee shall be
payable to the Charitable Beneficiary. if any of the transfer restrictions set
forth in this Section 3.4.3(E) or any application thereof is determined in a
final judgment to be void, invalid or unenforceable by any court having
jurisdiction over the issue, the Prohibited Transferee may be deemed, at the
option of the Corporation, to have acted as the agent of the Corporation in
acquiring the Common Stock as to which such restrictions would, by their terms,
apply, and to hold such Common Stock on behalf of the Corporation.
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(F) PURCHASE RIGHT IN STOCK TRANSFERRED TO
THE TRUSTEE. Shares of Common Stock transferred to the Trustee shall be deemed
to have been offered for sale to the Corporation, or its designee, at a price
per share equal to the lesser of (i) the price per share in the transaction that
resulted in such transfer to the Trust (or, in the case of a devise or gift, the
Market Price at the time of such devise or gift) and (ii) the Market Price on
the date the Corporation, or its designee, accepts such offer. The Corporation
shall have the right to accept such offer for a period of 90 days after the
later of (i) the date of the Excess Transfer or other event resulting in a
transfer to the Trust and (ii) the date that the Board of Directors determines
in good faith that an Excess Transfer or other event occurred.
(G) DESIGNATION OF CHARITABLE BENEFICIARIES.
By written notice to the Trustee, the Corporation shall designate one or more
nonprofit organizations to be the Charitable Beneficiary of the interest in the
Trust relating to such Prohibited Transferee if (i) the shares of Common Stock
held in the Trust would not violate the Ownership Restrictions in the hands of
such Charitable Beneficiary and (ii) each Charitable Beneficiary is an
organization described in Sections 170(b)(1)(A), 170(c)(2) and 501(c)(3) of the
Code.
3.4.4 NOTICE OF RESTRICTED TRANSFER. Any Person that
acquires or attempts to acquire shares of Common Stock in violation of Section
3.4.1 of this Article IV, or any Person that is a Prohibited Transferee such
that stock is transferred to the Trustee under Section 3.4.3 of this Article IV,
shall immediately give written notice to the Corporation of such event and shall
provide to the Corporation such other information as the Corporation may request
in order to determine the effect, if any, of such Transfer or attempted Transfer
or other event on the Corporation's status as a REIT. Failure to give such
notice shall not limit the rights and remedies of the Board of Directors
provided herein in any way.
3.4.5 OWNERS REQUIRED TO PROVIDE INFORMATION. From
and after the date of the Initial Public Offering certain record and Beneficial
Owners and transferees of shares of Common Stock will be required to provide
certain information as set out below.
(A) ANNUAL DISCLOSURE. Every record and
Beneficial Owner of more than 5% (or such other percentage between 0.5% and 5%,
as provided in the applicable regulations adopted under the Code) of the number
of Outstanding shares of Common Stock shall, within 30 days after January l of
each year, give written notice to the Corporation stating the name and address
of such record or Beneficial Owner, the number of shares of Common Stock
Beneficially Owned, and a full
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description of how such shares are held. Each such record or Beneficial Owner of
Common Stock shall, upon demand by the Corporation, disclose to the Corporation
in writing such additional information with respect to the Beneficial Ownership
of the Common Stock as the Board of Directors, in its sole discretion, deems
appropriate or necessary to (i) comply with the provisions of the Code regarding
the qualification of the Corporation as a REIT under the Code and (ii) ensure
compliance with the Ownership Limit, the Initial Holder Limit or the
Look-Through Ownership Limit, as applicable. Each shareholder of record,
including without limitation any Person that holds shares of Common Stock on
behalf of a Beneficial Owner, shall take all reasonable steps to obtain the
written notice described in this Section 3.4.5 from the Beneficial Owner.
(B) DISCLOSURE AT THE REQUEST OF THE
CORPORATION. Any Person that is a Beneficial Owner of shares of Common Stock and
any Person (including the shareholder of record) that is holding shares of
Common Stock for a Beneficial Owner, and any proposed transferee of shares,
shall provide such information as the Corporation, in its sole discretion, may
request in order to determine the Corporation's status as a REIT, to comply with
the requirements of any taxing authority or other governmental agency, to
determine any such compliance or to ensure compliance with the Ownership Limit,
the Initial Holder Limit and the Look-Through Ownership Limit, and shall provide
a statement or affidavit to the Corporation setting forth the number of shares
of Common Stock already Beneficially Owned by such shareholder or proposed
transferee and any related persons specified, which statement or affidavit shall
be in the form prescribed by the Corporation for that purpose.
3.4.6 REMEDIES NOT LIMITED. Nothing contained in this
Article IV shall limit the authority of the Board of Directors to take such
other action as it deems necessary or advisable (subject to the provisions of
Section 3.4.12 of this Article IV) (i) to protect the Corporation and the
interests of its shareholders in the preservation of the Corporation's status as
a REIT and (ii) to insure compliance with the Ownership Limit, the Initial
Holder Limit and the Look-Through Ownership Limit.
3.4.7 AMBIGUITY. In the case of an ambiguity in the
application of any of the provisions of Section 3.4 of this Article IV, or in
the case of an ambiguity in any definition contained in Section 4 of this
Article IV, the Board of Directors shall have the power to determine the
application of the provisions of this Article IV with respect to any situation
based on its reasonable belief, understanding or knowledge of the circumstances.
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3.4.8 EXCEPTIONS. The following exceptions shall
apply or may be established with respect to the limitations of Section 3.4.1 of
this Article IV.
(A) WAIVER OF OWNERSHIP LIMIT. The Board of
Directors, upon receipt of a ruling from the Internal Revenue Service or an
opinion of tax counsel or other evidence or undertaking acceptable to it, may
waive the application, in whole or in part, of the Ownership Limit to a Person
subject to the Ownership Limit, if such person is not an individual for purpose
of Section 542(a) of the Code and is a corporation, partnership, estate or
trust; provided, however, that in no event may any such exception cause such
Person's ownership, direct or indirect (without taking into account such
Person's ownership of interests in any partnership of which the Corporation is a
partner), to exceed 9.8% of the number of Outstanding shares of Common Stock. In
connection with any such exemption, the Board of Directors may require such
representations and undertakings from such Person and may impose such other
conditions as the Board deems necessary, in its sole discretion, to determine
the effect, if any, of the proposed Transfer on the Corporation's status as a
REIT.
(B) PLEDGE BY INITIAL HOLDER.
Notwithstanding any other provision of this Article IV, the pledge by the
Initial Holder of all or any portion of the Common Stock directly owned at any
time or from time to time shall not constitute a violation of Section 3.4.1 of
this Article IV and the pledgee shall not be subject to the Ownership Limit with
respect to the Common Stock so pledged to it either as a result of the pledge or
upon foreclosure.
(C) UNDERWRITERS. For a period of 270 days
following the purchase of Common Stock by an underwriter that (i) is a
corporation or a partnership and (ii) participates in an offering of the Common
Stock, such underwriter shall not be subject to the Ownership Limit with respect
to the Common Stock purchased by it as a part of or in connection with such
offering and with respect to any Common Stock purchased in connection with
market making activities.
(D) OWNERSHIP AND TRANSFERS BY THE CMO
TRUSTEE. The Ownership Limit shall not apply to the initial holding of Common
Stock by the "CMO TRUSTEE" (as that term is defined in the "Glossary" to the
Prospectus) for the benefit of "HF FUNDING TRUST" (as that term is defined in
the "Glossary" to the Prospectus), to any subsequent acquisition of Common Stock
by the CMO Trustee in connection with any conversion of Preferred Stock or to
any transfer or assignment of all or any part of the legal or beneficial
interest in the Common Stock to the CMO Trustee, "FSA" (as that term is defined
in the "Glossary" to the Prospectus), any entity
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controlled by FSA, or any direct or indirect creditor of HF Funding Trust
(including without limitation any reinsurer of any obligation of HF Funding
Trust) or any acquisition of Common Stock by any such person in connection with
any conversion of Preferred Stock.
3.4.9 LEGEND. Each certificate for Common Stock shall
bear the following legend:
"The shares of Class A Common Stock represented by this
certificate are subject to restrictions on transfer. No person may
Beneficially Own shares of Class A Common Stock in excess of the
Ownership Restrictions, as applicable, with certain further
restrictions and exceptions set forth in the Charter. Any Person that
attempts to Beneficially Own shares of Class A Common Stock in excess
of the applicable limitation must immediately notify the Corporation.
All capitalized terms in this legend have the meanings ascribed to such
terms in the Charter, as the same may be amended from time to time, a
copy of which, including the restrictions on transfer, will be sent
without charge to each stockholder that so requests. If the
restrictions on transfer are violated, (i) the transfer of shares of
Class A Common Stock represented hereby will be void in accordance with
the Charter or (ii) the shares of Class A Common Stock represented
hereby automatically be will transferred to a Trustee of a Trust for
the benefit of one or more Charitable Beneficiaries."
3.4.10 SEVERABILITY. If any provision of this Article
IV or any application of any such provision is determined in a final and
unappealable judgment to be void, invalid or unenforceable by any Federal or
state court having jurisdiction over the issues, the validity and enforceability
of the remaining provisions shall not be affected and other applications of such
provision shall be affected only to the extent necessary to comply with the
determination of such court.
3.4.11 BOARD OF DIRECTORS DISCRETION. Anything in
this Article IV to the contrary notwithstanding, the Board of Directors shall be
entitled to take or omit to take such actions as it in its discretion shall
determine to be advisable in order that the Corporation maintain its status as
and continue to qualify as a REIT, including, but not limited to, reducing the
Ownership Limit, the Initial Holder Limit and the Look- Through Ownership Limit
in the event of a change in law.
3.4.12 SETTLEMENT. Nothing in this Section 3.4 of
this Article IV shall be interpreted to preclude the settlement of any
transaction entered into through the
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facilities of the NYSE or other securities exchange or an automated inter-dealer
quotation system.
SECTION 4. DEFINITIONS. The terms set forth below shall have the
meanings specified below when used in this Article IV or in Article V of the
Charter.(2)
4.1 BENEFICIAL OWNERSHIP. The term "BENEFICIAL OWNERSHIP"
shall mean, with respect to any Person, ownership of shares of Common Stock
equal to the sum of (i) the shares of Common Stock directly owned by such
Person, (ii) the number of shares of Common Stock indirectly owned by such
Person (if such Person is an "individual" as defined in Section 542(a)(2) of the
Code) taking into account the constructive ownership rules of Section 544 of the
Code, as modified by Section 856(h)(1)(B) of the Code, and (iii) the number of
shares of Common Stock that such Person is deemed to beneficially own pursuant
to Rule 13d-3 under the Exchange Act or that is attributed to such Person
pursuant to Section 318 of the Code, as modified by Section 856(d)(5) of the
Code, provided that when applying this definition of Beneficial Ownership to the
Initial Holder, clause (iii) of this definition, and clause (b) of the
definition of "Person" shall be disregarded. The terms "BENEFICIAL OWNER,"
"BENEFICIALLY OWNS" and "BENEFICIALLY OWNED" shall have the correlative
meanings.
4.2 CHARITABLE BENEFICIARY. The term "CHARITABLE BENEFICIARY"
shall mean one or more beneficiaries of the Trust as determined pursuant to
Section 3.4.3 of this Article IV, each of which shall be an organization
described in Section 170(b)(1)(A), 170(c)(2) and 501(c)(3) of the Code.
4.3 CODE. The term "CODE" shall mean the Internal Revenue Code
of 1986, as amended from time to time, or any successor statute thereto.
Reference to any provision of the Code shall mean such provision as in effect
from time to time, as the same may be amended, and any successor thereto, as
interpreted by any applicable regulations or other administrative pronouncements
as in effect from time to time.
4.4 COMMON STOCK. The term "COMMON STOCK" shall mean all
shares now or hereafter authorized of any class of Common Stock of the
Corporation and any other capital stock of the Corporation, however designated,
authorized after the Issue Date, that has the right (subject always to prior
rights of any class of Preferred Stock)
- ------------------------
(2) This section has been revised to replace the term "these Articles of
Amendment and Restatement" with "the Charter."
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to participate in the distribution of the assets and earnings of the Corporation
without limit as to per share amount.
4.5 EXCESS TRANSFER. The term "EXCESS TRANSFER" has the
meaning set forth in Section 3.4.3(A) of this Article IV.
4.6 EXCHANGE ACT. The term "EXCHANGE ACT" shall mean the
Securities Exchange Act of 1934, as amended.
4.7 INITIAL HOLDER. The term "INITIAL HOLDER" shall mean Terry
Considine.
4.8 INITIAL HOLDER LIMIT. The term "INITIAL HOLDER LIMIT"
shall mean 15% of the number of Outstanding shares of Common Stock applied, in
the aggregate, to the Initial Holder. From the date of the Initial Public
Offering, the secretary of the Corporation, or such other person as shall be
designated by the Board of Directors, shall upon request make available to the
representative(s) of the Initial Holder and the Board of Directors, a schedule
that sets forth the then-current Initial Holder Limit applicable to the Initial
Holder.
4.9 INITIAL PUBLIC OFFERING. The term "INITIAL PUBLIC
OFFERING" shall mean the first underwritten public offering of Class A Common
Stock registered under the Securities Act of 1933, as amended, on a registration
statement on Form S-11 filed with the Securities and Exchange Commission.
4.10 LOOK-THROUGH ENTITY. The term "LOOK-THROUGH ENTITY" shall
mean a Person that is either (i) described in Section 401(a) of the Code as
provided under Section 856(h)(3) of the Code or (ii) registered under the
Investment Company Act of 1940.
4.11 LOOK-THROUGH OWNERSHIP LIMIT. The term "LOOK-THROUGH
OWNERSHIP LIMIT" shall mean 15% of the number of Outstanding shares of Common
Stock.
4.12 MARKET PRICE. The term "MARKET PRICE" on any date shall
mean the Closing Price on the Trading Day immediately preceding such date. The
term "CLOSING PRICE" on any date shall mean the last sale price, regular way,
or, in case no such sale takes place on such day, the average of the closing bid
and asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting
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system with respect to securities listed or admitted to trading on the NYSE or,
if the Common Stock is not listed or admitted to trading on the NYSE, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which the
Common Stock is listed or admitted to trading or, if the Common Stock is not
listed or admitted to trading on any national securities exchange, the last
quoted price, or if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by the National Association
of Securities Dealers, Inc. Automated Quotation System or, if such system is no
longer in use, the principal other automated quotations system that may then be
in use or, if the Common Stock is not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Common Stock selected by the Board of
Directors of the Company. The term "TRADING DAY" shall mean a day on which the
principal national securities exchange on which the Common Stock is listed or
admitted to trading is open for the transaction of business or, if the Common
Stock is not listed or admitted to trading on any national securities exchange,
shall mean any day other than a Saturday, a Sunday or a day on which banking
institutions in the State of New York are authorized or obligated by law or
executive order to close.
4.13 NYSE. The term "NYSE" shall mean the New York Stock
Exchange, Inc.
4.14 OUTSTANDING. The term "OUTSTANDING" shall mean issued and
outstanding shares of Common Stock of the Corporation, provided that for
purposes of the application of the Ownership Limit, the Look-Through Ownership
Limit or the Initial Holder Limit to any Person, the term "OUTSTANDING" shall be
deemed to include the number of shares of Common Stock that such Person alone,
at that time, could acquire pursuant to any options or convertible securities.
4.15 OWNERSHIP LIMIT. The term "OWNERSHIP LIMIT" shall mean,
for any Person other than the Initial Holder or a Look-Through Entity, 8.7% of
the number of the Outstanding shares of Common Stock of the Corporation.
4.16 OWNERSHIP RESTRICTIONS. The term "OWNERSHIP RESTRICTIONS"
shall mean collectively the Ownership Limit as applied to Persons other than the
Initial Holder or Look-Through Entities, the Initial Holder Limit as applied to
the Initial Holder and the Look-Through Ownership Limit as applied to
Look-Through Entities.
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4.17 PERSON. The term "PERSON" shall mean (A) an individual,
corporation, partnership, estate, trust (including a trust qualifying under
Section 401(a) or 501(c) of the Code), association, private foundation within
the meaning of Section 509(a) of the Code, joint stock company or other entity,
and (B) also includes a group as that term is used for purposes of Section
13(d)(3) of the Exchange Act.
4.18 PROHIBITED TRANSFEREE. The term "PROHIBITED TRANSFEREE"
has the meaning set forth in Section 3.4.3(A) of this Article IV.
4.19 REIT. The term "REIT" shall mean a "real estate
investment trust" as defined in Section 856 of the Code.
4.20 TRANSFER. The term "TRANSFER" shall mean any sale,
transfer, gift, assignment, devise or other disposition of a share of Common
Stock (including (i) the granting of an option or any series of such options or
entering into any agreement for the sale, transfer or other disposition of
Common Stock or (ii) the sale, transfer, assignment or other disposition of any
securities or rights convertible into or exchangeable for Common Stock), whether
voluntary or involuntary, whether of record or Beneficial Ownership, and whether
by operation of law or otherwise (including, but not limited to, any transfer of
an interest in other entities that results in a change in the Beneficial
Ownership of shares of Common Stock). The term "TRANSFERS" and "TRANSFERRED"
shall have correlative meanings.
4.21 TRUST. The term "TRUST" shall mean the trust created
pursuant to Section 3.4.3 of this Article IV.
4.22 TRUSTEE. The term "TRUSTEE" shall mean the Person
unaffiliated with either the Corporation or the Prohibited Transferee that is
appointed by the Corporation to serve as trustee of the Trust.
4.23 PROSPECTUS. The term "PROSPECTUS" shall mean the
prospectus that forms a part of the registration statement filed with the
Securities and Exchange Commission in connection with the initial Public
Offering, in the form included in the registration statement at the time the
registration statement becomes effective; provided, however, that, if such
prospectus is subsequently supplemented or amended for use in connection with
the Initial Public Offering, "PROSPECTUS" shall refer to such prospectus as so
supplemented or amended.
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ARTICLE V
GENERAL REIT PROVISIONS
SECTION 1. TERMINATION OF REIT STATUS. The Board of Directors shall
take no action to terminate the Corporation's status as a REIT until such time
as (i) the Board of Directors adopts a resolution recommending that the
Corporation terminate its status as a REIT, (ii) the Board of Directors presents
the resolution at an annual or special meeting of the shareholders and (iii)
such resolution is approved by the vote of a majority of the shares entitled to
be cast on the resolution.
SECTION 2. EXCHANGE OR MARKET TRANSACTIONS. Nothing in Article IV or
this Article V shall preclude the settlement of any transaction entered into
through the facilities of the NYSE or other national securities exchange or an
automated inter-dealer quotation system. The fact that the settlement of any
transaction is permitted shall not negate the effect of any other provision of
this Article V or any provision of Article IV, and the transferee, including but
not limited to any Prohibited Transferee, in such a transaction shall remain
subject to all the provisions and limitations of Article IV and this Article V.
SECTION 3. SEVERABILITY. If any provision of Article IV or this Article
V or any application of any such provision is determined to be invalid by any
federal or state court having jurisdiction over the issues, the validity of the
remaining provisions shall not be affected and other applications of such
provision shall be affected only to the extent necessary to comply with the
determination of such court.
SECTION 4. WAIVER. The Corporation shall have authority at any time to
waive the requirement that the Corporation redeem shares of Preferred Stock if,
in the sole discretion of the Board of Directors, any such redemption would
jeopardize the status of the Corporation as a REIT for federal income tax
purposes.
ARTICLE VI
BOARD OF DIRECTORS
SECTION 1. MANAGEMENT. The business and the affairs of the Corporation
shall managed under the direction of its Board of Directors.
SECTION 2. NUMBER. The number of directors that will constitute the
entire Board of Directors shall be fixed by, or in the manner provided in, the
Bylaws but shall
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in no event be less than three. Any increases or decreases in the size of the
board shall be apportioned equally among the classes of directors to prevent
stacking in any one class of directors. There are currently six directors in
office whose names are as follows: Terry Considine, Peter K. Kompaniez, Richard
S. Ellwood, J. Landis Martin, Thomas L. Rhodes and John D. Smith.(3)
SECTION 3. Intentionally deleted.
SECTION 4. VACANCIES. Except as otherwise provided in the Charter,(4)
newly created directorships resulting from any increase in the number of
directors may be filled by the majority vote of the Board of Directors, and any
vacancies on the Board of Directors resulting from death, resignation, removal
or other cause shall be filled by the affirmative vote of a majority of the
remaining directors then in office, even if less than a quorum of the Board of
Directors, or, if applicable, by a sole remaining director. Any director elected
in accordance with the preceding sentence shall hold office until the next
annual meeting of the Corporation at which time a successor shall be elected to
fill the remaining term of the position filled by such director.
SECTION 5. REMOVAL. Except as otherwise provided in the Charter,(5) any
director may be removed from office only for cause and only by the affirmative
vote of two-thirds of the aggregate number of votes then entitled to be cast
generally in the election of directors. For purposes of this Section 5, "CAUSE"
shall mean the willful and continuous failure of a director to substantially
perform the duties to the Corporation of such director (other than any such
failure resulting from temporary incapacity due to physical or mental illness)
or the willful engaging by a director in gross misconduct materially and
demonstrably injurious to the Corporation.
SECTION 6. BYLAWS. The Board of Directors shall have power to adopt,
amend, alter, change and repeal any Bylaws of the Corporation by vote of the
majority of the Board of Directors then in office. Any adoption, amendment,
alteration, change or repeal of any Bylaws by the shareholders of the
Corporation shall require the affirmative vote
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(3) See Article FORTH.
(4) This section has been revised to replace the term "these Articles of
Amendment and Restatement" with "the Charter."
(5) This section has been revised to replace the term "these Articles of
Amendment and Restatement" with "the Charter."
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<PAGE> 21
of a majority of the aggregate number of votes then entitled to be cast
generally in the election of directors. Notwithstanding anything in this Section
6 to the contrary, no amendment, alteration, change or repeal of any provision
of the Bylaws relating to the removal of directors or repeal of the Bylaws shall
be effected without the vote of two-thirds of the aggregate number of votes
entitled be cast generally in the election of Directors.
SECTION 7. POWERS. The enumeration and definition of particular powers
of the Board of Directors included elsewhere in the Charter(6) shall in no way
be limited or restricted by reference to or inference from the terms of any
other clause of this or any other Article of the Charter,(7) or construed as
excluding or limiting, or deemed by inference or otherwise in any manner to
exclude or limit, the powers conferred upon the Board of Directors under the
Maryland General Corporation Law ("MGCL") as now or hereafter in force.
ARTICLE VII
LIMITATION OF LIABILITY
No director or officer of the Corporation shall be liable to the
Corporation or its shareholders for money damages to the maximum extent that
Maryland law in effect from time to time permits limitation of the liability of
directors and officers. Neither the amendment nor repeal of this Article VII,
nor the adoption or amendment of any other provision of the charter or Bylaws of
the Corporation inconsistent with this Article VII, shall apply to or affect in
any respect the applicability of the preceding sentence with respect to any act
or failure to act that occurred prior to such amendment, repeal or adoption.
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(6) This section has been revised to replace the term "these Articles of
Amendment and Restatement" with "the Charter."
(7) This section has been revised to replace the term "these Articles of
Amendment and Restatement" with "the Charter."
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ARTICLE VIII
INDEMNIFICATION
The Corporation shall indemnify, to the fullest extent permitted by
Maryland law, as applicable from time to time, all persons who at any time were
or are directors or officers of the Corporation for any threatened, pending or
completed action, suit or proceeding (whether civil, criminal, administrative or
investigative) relating to any action alleged to have been taken or omitted in
such capacity as a director or an officer. The Corporation shall pay or
reimburse all reasonable expenses incurred by a present or former director or
officer of the Corporation in connection with any threatened, pending or
completed action, suit or proceeding (whether civil, criminal, administrative or
investigative) in which the present or former director or officer is a party, in
advance of the final disposition of the proceeding, to the fullest extent
permitted by, and in accordance with the applicable requirements of, Maryland
law, as applicable from time to time. The Corporation may indemnify any other
persons permitted but not required to be indemnified by Maryland law, as
applicable from time to time, if and to extent indemnification is authorized and
determined to be appropriate, in each case in accordance with applicable law, by
the Board of Directors, the majority of the shareholders of the Corporation
entitled to vote thereon or special legal counsel appointed by the Board of
Directors. No amendment of the Charter(8) of the Corporation or repeal of any of
its provisions shall limit or eliminate any of the benefits provided to
directors and officers under this Article VIII in respect of any act or omission
that occurred prior to such amendment or repeal.
ARTICLE IX
WRITTEN CONSENT OF SHAREHOLDERS
Any corporate action upon which a vote of shareholders is required or
permitted may be taken without a meeting or vote of shareholders with the
unanimous written consent of shareholders entitled to vote thereon.
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(8) This section has been revised to replace the term "these Articles of
Amendment and Restatement" with "the Charter."
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ARTICLE X
AMENDMENT
The Corporation reserves the right to amend, alter or repeal any
provision contained in this charter upon (i) adoption by the Board of Directors
of a resolution recommending such amendment, alteration, or repeal, (ii)
presentation by the Board of Directors to the shareholders of a resolution at an
annual or special meeting of the shareholders and (iii) approval of such
resolution by the affirmative vote of the holders of a majority (or, as
applicable, a two-thirds vote) of the aggregate number of votes entitled to be
case generally in the election of directors. All rights conferred upon
shareholders herein are subject to this reservation.
ARTICLE XI
EXISTENCE
The Corporation is to have a perpetual existence.
ARTICLE XII
[Reserved.]
ARTICLE XIII
CLASS B PREFERRED STOCK
The terms of the Class B Preferred Stock (including the preferences,
conversion or other rights, voting powers, restrictions, limitations as to
dividends and other distributions, qualifications, or terms or conditions of
redemption) as set by the Board of Directors are as set forth in the Articles
Supplementary relating to the Class B Preferred Stock, as filed with the SDAT on
August 4, 1997.
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ARTICLE XIV
CLASS C PREFERRED STOCK
The terms of the Class C Preferred Stock (including the preferences,
conversion or other rights, voting powers, restrictions, limitations as to
dividends and other distributions, qualifications, or terms or conditions of
redemption) as set by the Board of Directors are as set forth in the Articles
Supplementary relating to the Class C Preferred Stock, as filed with the SDAT on
December 22, 1997 (as corrected by Certificates of Correction as filed with the
SDAT on February 18, 1998 and on November 30, 1998 at 1:24 p.m., respectively).
ARTICLE XV
CLASS D PREFERRED STOCK
The terms of the Class D Preferred Stock (including the preferences,
conversion or other rights, voting powers, restrictions, limitations as to
dividends and other distributions, qualifications, or terms or conditions of
redemption) as set by the Board of Directors are as set forth in the Articles
Supplementary relating to the Class D Preferred Stock, as filed with the SDAT on
February 18, 1998 (as corrected by Certificate of Correction as filed with the
SDAT on November 30, 1998 at 1:26 p.m.).
ARTICLE XVI
CLASS G PREFERRED STOCK
The terms of the Class G Preferred Stock (including the preferences,
conversion or other rights, voting powers, restrictions, limitations as to
dividends and other
distributions, qualifications, or terms or conditions of redemption) as set by
the Board of Directors are as set forth in the Articles Supplementary relating
to the Class G Preferred Stock, as filed with the SDAT on July 13, 1998.
ARTICLE XVII
CLASS H PREFERRED STOCK
The terms of the Class H Preferred Stock (including the preferences,
conversion or other rights, voting powers, restrictions, limitations as to
dividends and other distributions, qualifications, or terms or conditions of
redemption) as set by the Board of Directors are as set forth in the Articles
Supplementary relating to the Class G Preferred Stock, as filed with the SDAT on
July 13, 1998.
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ARTICLE XVIII
[Reserved.]
ARTICLE XIX
In accordance with Section 15.4 of the Indenture, dated as of November
1, 1996. by and between Insignia Financial Group, Inc. ("INSIGNIA"), a Delaware
corporation (as Issuer) and First Union National Bank of South Carolina (as
Trustee)(the "INDENTURE"), upon effectiveness of the Merger (as defined in the
Amended and Restated Agreement and Plan of Merger, dated as of May 26, 1998, by
and among the Corporation, Insignia, Insignia/ESG Holdings, Inc., a Delaware
corporation, and AIMCO Properties, L.P., a Delaware limited partnership (the
"MERGER AGREEMENT")), the 6 1/2% Convertible Subordinated Debentures due 2016
issued by Insignia (the "CONVERTIBLE DEBENTURES") will become convertible into
the same consideration received by holders of Class A Common Stock, par value
$.01 per share, of Insignia, pursuant to the Merger (i.e., shares of Class E
Cumulative Preferred Stock, par value $.01 per share, of AIMCO (the "AIMCO CLASS
E PREFERRED STOCK"), (or shares of Class A Common Stock, par value $.01 per
share, of the Corporation (the "AIMCO COMMON STOCK"), if such Convertible
Debentures are converted after the AIMCO Class E Preferred Stock has been
converted into AIMCO Common Stock), the Cash Amount (as defined in the Merger
Agreement), if any, and cash in lieu of fractional shares). Furthermore, the
consideration to be received by holders of Convertible Debentures who convert
such Convertible Debentures subsequent to the effectiveness of the Merger shall
be adjusted as required by Article XV of the Indenture.(9)
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(9) All of the outstanding shares of AIMCO Class E Preferred Stock were
converted into shares of AIMCO Common Stock on January 15, 1999 and all of the
authorized shares of AIMCO Class E Preferred Stock have been reclassified into
Class A Common Stock.
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ARTICLE XX
CLASS J PREFERRED STOCK
The terms of the Class J Preferred Stock (including the preferences,
conversion or other rights, voting powers, restrictions, limitations as to
dividends and other distributions, qualifications, or terms or conditions of
redemption) as set by the Board of Directors are as set forth in the Articles
Supplementary relating to the Class J Preferred Stock, as filed with the SDAT on
November 6, 1998.
ARTICLE XXI
CLASS K PREFERRED STOCK
The terms of the Class K Preferred Stock (including the preferences,
conversion or other rights, voting powers, restrictions, limitations as to
dividends and other distributions, qualifications, or terms or conditions of
redemption) as set by the Board of Directors are as set forth in the Articles
Supplementary relating to the Class K Preferred Stock, as filed with the SDAT on
February 17, 1999.
ARTICLE XXII
CLASS I PREFERRED STOCK
The terms of the Class I Preferred Stock (including the preferences,
conversion or other rights, voting powers, restrictions, limitations as to
dividends and other distributions, forth in the Articles Supplementary relating
to the Class K Preferred Stock, as filed with the SDAT on February 17, 1999.
ARTICLE XXII
CLASS I PREFERRED STOCK
The terms of the Class I Preferred Stock (including the preferences,
conversion or other rights, voting powers restrictions, limitations as to
dividends and other distributions, qualifications, or terms or conditions of
redemption) as set by the Board of Directors are as set forth in the Articles
Supplementary relating to the Class I Preferred Stock, as filed with the SDAT on
May 25, 1999 at 1:24 p.m.
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* * * * * * *
THIRD: The Board of Directors of the Corporation at a meeting or by a
unanimous consent in writing in lieu of a meeting under Section 2-408 of the
Maryland General Corporation Law adopted a resolution that set forth and
approved the foregoing restatement of the Charter.
FORTH: The Charter of the Corporation is not amended by these Articles
of Amendment and Restatement; provided, however, consistent with Section
2-608(b)(7) of the Maryland General Corporation Law, the current number and
names of directors are provided in the last sentence of Section 2 of Article VI
of the restated Charter of the Corporation.
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IN WITNESS WHEREOF, APARTMENT INVESTMENT AND MANAGEMENT COMPANY has
caused these presents to be signed in its name and on its behalf by its Vice
Chairman and President and witnessed by its Secretary on April 21, 1999.
WITNESS: APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
/s/ JOEL F. BONDER By: /s/ PETER K. KOMPANIEZ
- -------------------------------- ----------------------------------
Joel F. Bonder, Peter K. Kompaniez,
Secretary Vice Chairman and President
THE UNDERSIGNED, Vice Chairman and President of APARTMENT INVESTMENT
AND MANAGEMENT COMPANY, who executed on behalf of the Corporation the foregoing
Articles of Restatement of which this certificate is made a part, hereby
acknowledges in the name and on behalf of said Corporation the foregoing
Articles of Restatement to be the corporate act of said Corporation and hereby
certifies that to the best of his knowledge, information, and belief the matters
and facts set forth therein with respect to the authorization and approval
thereof are true in all material respects under the penalties of perjury.
/s/ PETER K. KOMPANIEZ
----------------------------------
Peter K. Kompaniez,
Vice Chairman and President
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ARTICLES SUPPLEMENTARY
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
CLASS B CUMULATIVE CONVERTIBLE PREFERRED STOCK
(PAR VALUE $.01 PER SHARE)
APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation
(hereinafter called the "Corporation"), having its principal office in Baltimore
City, Maryland, hereby certifies to the Department of Assessments and Taxation
of the State of Maryland that:
FIRST: Pursuant to authority expressly vested in the Board of Directors
of the Corporation by Section 1.2 of Article IV of the Charter of the
Corporation, the Board of Directors has duly divided and classified 750,000
authorized but unissued shares of the capital stock of the Corporation into a
class designated as Class B Cumulative Convertible Preferred Stock and has
provided for the issuance of such class.
SECOND: The reclassification increases the number of shares classified
as Class B Cumulative Convertible Preferred Stock, par value $.01 per share,
from no shares immediately prior to the reclassification to 750,000 shares
immediately after the reclassification. The reclassification decreases the
number of shares classified as Preferred Stock, par value $.01 per share, from
10,000,000 shares immediately prior to the reclassification to 9,250,000 shares
immediately after the reclassification. The number of shares classified as Class
B Cumulative Convertible Preferred Stock may be decreased pursuant to Section 6
of Article Third of these Articles Supplementary upon reacquisition thereof in
any manner, or by retirement thereof, by the Corporation.
THIRD: The terms of the Class B Cumulative Convertible Preferred Stock
(including the preferences, conversions or other rights, voting powers,
restrictions, limitations as to dividends and other distributions,
qualifications, or terms or conditions of redemption) as set by the Board of
Directors are as follows:
1. NUMBER OF SHARES AND DESIGNATION.
This class of Preferred Stock shall be designated as Class B Cumulative
Convertible Preferred Stock (the "Class B Preferred Stock") and Seven Hundred
Fifty Thousand (750,000) shall be the authorized number of shares of such Class
B Preferred Stock constituting such class.
2. DEFINITIONS.
For purposes of the Class B Preferred Stock, the following terms shall
have the meanings indicated:
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"Act" shall mean the Securities Act of 1933, as amended.
"affiliate" of a Person means a Person that directly, or indirectly
through one or more intermediaries, controls or is controlled by, or is
under common control with, the Person specified.
"Aggregate Value" shall mean, with respect to any block of Equity
Stock, the sum of the products of (i) the number of shares of each
class of Equity Stock within such block multiplied by (ii) the
corresponding Market Price of one share of Equity Stock of such class.
"Base Common Stock Dividend" shall have the meaning set forth in
paragraph (a) of Section 9 of this Article.
"Beneficial Ownership" shall mean, with respect to any Person,
ownership of shares of Equity Stock equal to the sum of (i) the number
of shares of Equity Stock directly owned by such Person, (ii) the
number of shares of Equity Stock indirectly owned by such Person (if
such Person is an "individual" as defined in Section 542(a)(2) of the
Code) taking into account the constructive ownership rules of Section
544 of the Code, as modified by Section 856(h)(1)(B) of the Code, and
(iii) the number of shares of Equity Stock that such Person is deemed
to beneficially own pursuant to Rule 13d-3 under the Exchange Act or
that is attributed to such Person pursuant to Section 318 of the Code,
as modified by Section 856(d)(5) of the Code, provided that when
applying this definition of Beneficial Ownership to the Initial Holder,
clause (iii) of this definition, and clause (ii) of the definition of
"Person" shall be disregarded. The terms "Beneficial Owner,"
"Beneficially Owns" and "Beneficially Owned" shall have the correlative
meanings.
"Board of Directors" shall mean the Board of Directors of the
Corporation or any committee authorized by such Board of Directors to
perform any of its responsibilities with respect to the Class B
Preferred Stock.
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which state or federally chartered banking institutions in New
York, New York are not required to be open.
"Call Date" shall have the meaning set forth in paragraph (b) of
Section 5 of this Article.
"Charitable Beneficiary" shall mean one or more beneficiaries of the
Trust as determined pursuant to Section 11.3 of this Article, each of
which shall be an organization described in Section 170(b)(1)(A),
170(c)(2) and 501(c)(3) of the Code.
"Class B Preferred Stock" shall have the meaning set forth in Section 1
of this Article.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, or
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any successor statute thereto. Reference to any provision of the Code
shall mean such provision as in effect from time to time, as the same
may be amended, and any successor thereto, as interpreted by any
applicable regulations or other administrative pronouncements as in
effect from time to time.
"Common Stock" shall mean the Class A Common Stock, $.01 par value per
share, of the Corporation or such shares of the Corporation's capital
stock into which outstanding shares of Common Stock shall be
reclassified.
"Conversion Price" shall mean the conversion price per share of Common
Stock for which each share of Class B Preferred Stock is convertible,
as such Conversion Price may be adjusted pursuant to paragraph (d) of
Section 7 of this Article. The initial Conversion Price shall be $30.45
(equivalent to an initial conversion rate of 3.28407 shares of Common
Stock for each share of Class B Preferred Stock).
"Current Market Price" of publicly traded shares of Common Stock or any
other class or series of capital stock or other security of the
Corporation or of any similar security of any other issuer for any day
shall mean the closing price, regular way on such day, or, if no sale
takes place on such day, the average of the reported closing bid and
asked prices regular way on such day, in either case as reported on the
principal national securities exchange on which such securities are
listed or admitted for trading, or, if such security is not quoted on
any national securities exchange, on the National Market of the
National Association of Securities Dealers, Inc. Automated Quotations
System ("NASDAQ") or, if such security is not quoted on the NASDAQ
National Market, the average of the closing bid and asked prices on
such day in the over-the-counter market as reported by NASDAQ or, if
bid and asked prices for such security on such day shall not have been
reported through NASDAQ, the average of the bid and asked prices on
such day as furnished by any New York Stock Exchange or National
Association of Securities Dealers, Inc. member firm regularly making a
market in such security selected for such purpose by the Chief
Executive Officer or the Board of Directors or if any class or series
of securities are not publicly traded, the fair value of the shares of
such class as determined reasonably and in good faith by the Board of
Directors of the Corporation.
"distribution" shall have the meaning set forth in paragraph (d)(iii)
of Section 7 of this Article.
"Dividend Payment Date" shall mean, with respect to each Dividend
Period, (a) the date that cash dividends are paid on the Common Stock
with respect to such Dividend Period; or (b) if such dividends have not
been paid on the Common Stock by 9:00 a.m., New York City time, on the
sixtieth day from and including the last day of such Dividend Period,
then on such day; provided, further, that if any Dividend Payment Date
falls on any day other than a Business Day, the dividend payment
payable on such Dividend Payment Date shall be paid on the Business Day
immediately following such Dividend Payment Date.
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"Dividend Periods" shall mean the Initial Dividend Period and each
subsequent quarterly dividend period commencing on and including
January 1, April 1, July 1 and October 1 of each year and ending on and
including the day preceding the first day of the next succeeding
Dividend Period, other than the Dividend Period during which any Class
B Preferred Stock shall be redeemed pursuant to Section 5 hereof, which
shall end on and include the Call Date with respect to the Class B
Preferred Stock being redeemed.
"Equity Stock" shall mean one or more shares of any class of capital
stock of the Corporation.
"Excess Transfer" has the meaning set forth in Section 11.3(A) of this
Article.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" shall mean the average of the daily Current Market
Prices of a share of Common Stock during five (5) consecutive Trading
Days selected by the Corporation commencing not more than twenty (20)
Trading Days before, and ending not later than, the earlier of the day
in question and the day before the "ex" date with respect to the
issuance or distribution requiring such computation. The term "'ex'
date," when used with respect to any issuance or distribution, means
the first day on which the share of Common Stock trades regular way,
without the right to receive such issuance or distribution, on the
exchange or in the market, as the case may be, used to determine that
day's Current Market Price.
"Issue Date" shall mean August 4, 1997.
"Initial Dividend Period" shall mean the period commencing on and
including the Issue Date and ending on and including September 30,
1997.
"Initial Holder" shall mean Terry Considine.
"Initial Holder Limit" shall mean a number of the Outstanding shares of
Class B Preferred Stock of the Corporation having an Aggregate Value
not in excess of the excess of (x) 15% of the Aggregate Value of all
Outstanding shares of Equity Stock over (y) the Aggregate Value of all
shares of Equity Stock other than Class B Preferred Stock that are
Beneficially Owned by the Initial Holder. From the Issue Date, the
secretary of the Corporation, or such other person as shall be
designated by the Board of Directors, shall upon request make available
to the representative(s) of the Initial Holder and the Board of
Directors, a schedule that sets forth the then-current Initial Holder
Limit applicable to the Initial Holder.
"Junior Stock" shall have the meaning set forth in paragraph (c) of
Section 8 of this Article.
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"Look-Through Entity" shall mean a Person that is either (i) described
in Section 401(a) of the Code as provided under Section 856(h)(3) of
the Code or (ii) registered under the Investment Company Act of 1940.
"Look-Through Ownership Limit" shall mean, for any Look-Through Entity,
a number of the Outstanding shares of Class B Preferred Stock of the
Corporation having an Aggregate Value not in excess of the excess of
(x) 15% of the Aggregate Value of all Outstanding shares of Equity
Stock over (y) by the Aggregate Value of all shares of Equity Stock
other than Class B Preferred Stock that are Beneficially Owned by the
Look-Through Entity.
"Market Price" on any date shall mean, with respect to any share of
Equity Stock, the Closing Price of a share of that class of Equity
Stock on the Trading Day immediately preceding such date. The term
"Closing Price" on any date shall mean the last sale price, regular
way, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system
with respect to securities listed or admitted to trading on the NYSE
or, if the Equity Stock is not listed or admitted to trading on the
NYSE, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national
securities exchange on which the Equity Stock is listed or admitted to
trading or, if the Equity Stock is not listed or admitted to trading on
any national securities exchange, the last quoted price, or if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System or, if such system
is no longer in use, the principal other automated quotations system
that may then be in use or, if the Equity Stock is not quoted by any
such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Equity
Stock selected by the Board of Directors of the Company.
"NYSE" shall mean the New York Stock Exchange, Inc.
"Outstanding" shall mean issued and outstanding shares of Equity Stock
of the Corporation, provided that for purposes of the application of
the Ownership Limit, the Look-Through Ownership Limit or the Initial
Holder Limit to any Person, the term "Outstanding" shall be deemed to
include the number of shares of Equity Stock that such Person alone, at
that time, could acquire pursuant to any options or convertible
securities.
"Ownership Limit" shall mean, for any Person other than the Initial
Holder or a Look-Through Entity, a number of the Outstanding shares of
Class B Preferred Stock of the Corporation having an Aggregate Value
not in excess of the excess of (x) 8.7% of the Aggregate Value of all
Outstanding shares of Equity Stock over (y) the Aggregate Value
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of all shares of Equity Stock other than Class B Preferred Stock that
are Beneficially Owned by the Person.
"Ownership Restrictions" shall mean collectively the Ownership Limit as
applied to Persons other than the Initial Holder or Look-Through
Entities, the Initial Holder Limit as applied to the Initial Holder and
the Look-Through Ownership Limit as applied to Look-Through Entities.
"Parity Stock" shall have the meaning set forth in paragraph (b) of
Section 8 of this Article.
"Person" shall mean (a) for purposes of Section 11 of this Article, (i)
an individual, corporation, partnership, estate, trust (including a
trust qualifying under Section 401(a) or 501(c) of the Code),
association, private foundation within the meaning of Section 509(a) of
the Code, joint stock company or other entity, and (ii) also includes a
group as that term is used for purposes of Section 13(d)(3) of the
Exchange Act and (b) for purposes of the remaining Sections of this
Article, any individual, firm, partnership, corporation or other entity
and shall include any successor (by merger or otherwise) of such
entity.
"Prohibited Transferee" has the meaning set forth in Section 11.3(A) of
this Article.
"REIT" shall mean a "real estate investment trust" as defined in
Section 856 of the Code.
"Senior Stock" shall have the meaning set forth in paragraph (a) of
Section 8 of this Article.
"set apart for payment" shall be deemed to include, without any action
other than the following, the recording by the Corporation in its
accounting ledgers of any accounting or bookkeeping entry which
indicates, pursuant to a declaration of dividends or other distribution
by the Board of Directors, the allocation of funds to be so paid on any
series or class of capital stock of the Corporation; provided, however,
that if any funds for any class or series of Junior Stock or any class
or series of Parity Stock are placed in a separate account of the
Corporation or delivered to a disbursing, paying or other similar
agent, then "set apart for payment" with respect to the Class B
Preferred Stock shall mean placing such funds in a separate account or
delivering such funds to a disbursing, paying or other similar agent.
"Trading Day", as to any securities, shall mean any day on which such
securities are traded on the principal national securities exchange on
which such securities are listed or admitted or, if such securities are
not listed or admitted for trading on any national securities exchange,
the NASDAQ National Market or, if such securities are not listed or
admitted for trading on the NASDAQ National Market, any day other than
a Saturday, a Sunday or a day on which banking institutions in the
State of New York are authorized or obligated by law or executive order
to close.
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"Transaction" shall have the meaning set forth in paragraph (e) of
Section 7 of this Article.
"Transfer" shall mean any sale, transfer, gift, assignment, devise or
other disposition of a share of Class B Preferred Stock (including (i)
the granting of an option or any series of such options or entering
into any agreement for the sale, transfer or other disposition of Class
B Preferred Stock or (ii) the sale, transfer, assignment or other
disposition of any securities or rights convertible into or
exchangeable for Class B Preferred Stock), whether voluntary or
involuntary, whether of record or Beneficial Ownership, and whether by
operation of law or otherwise (including, but not limited to, any
transfer of an interest in other entities that results in a change in
the Beneficial Ownership of shares of Class B Preferred Stock). The
term "Transfers" and "Transferred" shall have correlative meanings.
"Transfer Agent" means such transfer agent as may be designated by the
Board of Directors or their designee as the transfer agent for the
Class B Preferred Stock; provided, that if the Corporation has not
designated a transfer agent then the Corporation shall act as the
transfer agent for the Class B Preferred Stock.
"Trust" shall mean the trust created pursuant to Section 11.3 of this
Article.
"Trustee" shall mean the Person unaffiliated with either the
Corporation or the Prohibited Transferee that is appointed by the
Corporation to serve as trustee of the Trust.
"Voting Preferred Stock" shall have the meaning set forth in Section 9
of this Article.
3. DIVIDENDS.
(a) The holders of Class B Preferred Stock shall be entitled
to receive, when and as declared by the Board of Directors out of funds legally
available for that purpose, cumulative dividends payable in cash in an amount
per share of Class B Preferred Stock equal to the greater of (i) the base
dividend of $1.78125 per quarter (the "Base Rate") or (ii) the cash dividends
declared on the number of shares of Common Stock, or portion thereof, into which
a share of Class B Preferred Stock is convertible. The dividends payable with
respect to the Initial Dividend Period shall be determined solely by reference
to the Base Rate. The amount referred to in clause (ii) of this paragraph (a)
with respect to each succeeding Dividend Period shall be determined as of the
applicable Dividend Payment Date by multiplying the number of shares of Common
Stock, or portion thereof calculated to the fourth decimal point, into which a
share of Class B Preferred Stock would be convertible at the opening of business
on such Dividend Payment Date (based on the Conversion Price then in effect) by
the aggregate cash dividends payable or paid for such Dividend Period in respect
of a share of Common Stock outstanding as of the record date for the payment of
dividends on the Common Stock with respect to such Dividend Period. If (A) the
Corporation pays a cash dividend on the Common Stock after the
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Dividend Payment Date for the corresponding Dividend Period and (B) the dividend
on the Class B Preferred Stock for such Dividend Period calculated pursuant to
clause (ii) of this paragraph (a), taking into account the Common Stock dividend
referenced in clause (A), exceeds the dividend previously declared on the Class
B Preferred Stock for such Dividend Period, the Corporation shall pay an
additional dividend to the holders of the Class B Preferred Stock on the date
that the Common Stock dividend referenced in clause (A) is paid, in an amount
equal to the difference between the dividend calculated pursuant to clause (B)
and the dividends previously declared on the Class B Preferred Stock with
respect to such Dividend Period. Such dividends shall be cumulative from the
Issue Date, whether or not in any Dividend Period or Periods such dividends
shall be declared or there shall be funds of the Corporation legally available
for the payment of such dividends, and shall be payable quarterly in arrears on
the Dividend Payment Dates, commencing on the first Dividend Payment Date after
the Issue Date. Each such dividend shall be payable in arrears to the holders of
record of the Class B Preferred Stock, as they appear on the stock records of
the Corporation at the close of business on a record date fixed by the Board of
Directors which shall be not more than 60 days prior to the applicable Dividend
Payment Date and, within such 60 day period, shall be the same date as the
record date for the regular quarterly dividend payable with respect to the
Common Stock for the Dividend Period to which such Dividend Payment Date relates
(or, if there is no such record date for Common Stock, then such date as the
Board of Directors may fix). Accumulated, accrued and unpaid dividends for any
past Dividend Periods may be declared and paid at any time, without reference to
any regular Dividend Payment Date, to holders of record on such date, which date
shall not precede by more than 45 days the payment date thereof, as may be fixed
by the Board of Directors.
Upon a final administrative determination by the Internal
Revenue Service that the Corporation does not qualify as a real estate
investment trust in accordance with Section 856 of the Code, the Base Rate set
forth in (a)(i) will be increased to $3.03125 until such time as the Corporation
regains its status as a real estate investment trust; provided, however, that if
the Corporation contests its loss of real estate investment trust status in
Federal Court, following its receipt of an opinion of nationally recognized tax
counsel to the effect that there is a reasonable basis to contest such loss of
status, the Base Rate shall not be increased during the pendency of such
judicial proceeding; provided further, however, that upon a final judicial
determination in Federal Tax Court, Federal District Court or the Federal Claims
Court that the Corporation does not qualify as a real estate investment trust,
the Base Rate will be increased as stated above from the date of such judicial
determination.
(b) The amount of dividends payable per share of Class B
Preferred Stock for the Initial Dividend Period, or any other period shorter
than a full Dividend Period, shall be computed ratably on the basis of twelve
30-day months and a 360-day year. Holders of Class B Preferred Stock shall not
be entitled to any dividends, whether payable in cash, property or stock, in
excess of cumulative dividends, as herein provided, on the Class B Preferred
Stock. No interest, or sum of money in lieu of interest, shall be payable in
respect of any dividend payment or payments on the Class B Preferred Stock that
may be in arrears.
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(c) So long as any of the shares of Class B Preferred Stock
are outstanding, except as described in the immediately following sentence, no
dividends shall be declared or paid or set apart for payment by the Corporation
and no other distribution of cash or other property shall be declared or made
directly or indirectly by the Corporation with respect to any class or series of
Parity Stock for any period unless dividends equal to the full amount of
accumulated, accrued and unpaid dividends 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 on the Class B Preferred
Stock for all Dividend Periods terminating on or prior to the Dividend Payment
Date with respect to such class or series of Parity Stock. When dividends are
not paid in full or a sum sufficient for such payment is not set apart, as
aforesaid, all dividends declared upon the Class B Preferred Stock and all
dividends declared upon any other class or series of Parity Stock shall be
declared ratably in proportion to the respective amounts of dividends
accumulated, accrued and unpaid on the Class B Preferred Stock and accumulated,
accrued and unpaid on such Parity Stock.
(d) So long as any of the shares of Class B Preferred Stock
are outstanding, no dividends (other than dividends or distributions paid in
shares of or options, warrants or rights to subscribe for or purchase shares of
Junior Stock) shall be declared or paid or set apart for payment by the
Corporation and no other distribution of cash or other property shall be
declared or made directly or indirectly by the Corporation with respect to any
shares of Junior Stock, nor shall any shares of Junior Stock be redeemed,
purchased or otherwise acquired (other than a redemption, purchase or other
acquisition of Common Stock made for purposes of an employee incentive or
benefit plan of the Corporation or any subsidiary) for any consideration (or any
moneys be paid to or made available for a sinking fund for the redemption of any
shares of any such stock) directly or indirectly by the Corporation (except by
conversion into or exchange for Junior Stock), nor shall any other cash or other
property otherwise be paid or distributed to or for the benefit of any holder of
shares of Junior Stock in respect thereof, directly or indirectly, by the
Corporation unless in each case (i) the full cumulative dividends (including all
accumulated, accrued and unpaid dividends) on all outstanding shares of Class B
Preferred Stock and any other Parity Stock of the Corporation shall have been
paid or such dividends have been declared and set apart for payment for all past
Dividend Periods with respect to the Class B Preferred Stock and all past
dividend periods with respect to such Parity Stock and (ii) sufficient funds
shall have been paid or set apart for the payment of the full dividend for the
current Dividend Period with respect to the Class B Preferred Stock and the
current dividend period with respect to such Parity Stock.
4. LIQUIDATION PREFERENCE.
(a) In the event of any liquidation, dissolution or winding up
of the Corporation, whether voluntary or involuntary, before any payment or
distribution of the Corporation (whether capital or surplus) shall be made to or
set apart for the holders of Junior Stock, the holders of shares of Class B
Preferred Stock shall be entitled to receive One Hundred Dollars ($100) per
share of Class B Preferred Stock (the "Liquidation Preference"), plus an amount
equal to all dividends (whether or not earned or declared) accumulated, accrued
and unpaid thereon to the date of final distribution to such holders; but such
holders shall not be entitled to any further payment. Until the holders of the
Class B Preferred Stock have been paid the Liquidation Preference in full, plus
an
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amount equal to all dividends (whether or not earned or declared) accumulated,
accrued and unpaid thereon to the date of final distribution to such holders, no
payment will be made to any holder of Junior Stock upon the liquidation,
dissolution or winding up of the Corporation. If, upon any liquidation,
dissolution or winding up of the Corporation, the assets of the Corporation, or
proceeds thereof, distributable among the holders of Class B Preferred Stock
shall be insufficient to pay in full the preferential amount aforesaid and
liquidating payments on any other shares of any class or series of Parity Stock,
then such assets, or the proceeds thereof, shall be distributed among the
holders of Class B Preferred Stock and any such other Parity Stock ratably in
the same proportion as the respective amounts that would be payable on such
Class B Preferred Stock and any such other Parity Stock if all amounts payable
thereon were paid in full. For the purposes of this Section 4, (i) a
consolidation or merger of the Corporation with one or more corporations, (ii) a
sale or transfer of all or substantially all of the Corporation's assets, or
(iii) a statutory share exchange shall not be deemed to be a liquidation,
dissolution or winding up, voluntary or involuntary, of the Corporation.
(b) Upon any liquidation, dissolution or winding up of the
Corporation, after payment shall have been made in full to the holders of Class
B Preferred Stock and any Parity Stock, as provided in this Section 4, any other
series or class or classes of Junior Stock shall, subject to the respective
terms thereof, be entitled to receive any and all assets remaining to be paid or
distributed, and the holders of the Class B Preferred Stock and any Parity Stock
shall not be entitled to share therein.
5. REDEMPTION AT THE OPTION OF THE CORPORATION.
(a) Shares of Class B Preferred Stock shall not be redeemable
by the Corporation prior to August 4, 2002. On and after August 4, 2002, the
Corporation, at its option, may redeem shares of Class B Preferred Stock, in
whole or from time to time in part, at a redemption price payable in cash equal
to 100% of the Liquidation Preference thereof, plus all accrued and unpaid
dividends to the Call Date.
(b) Shares of Class B Preferred Stock shall be redeemed by the
Corporation on the date specified in the notice to holders required under
paragraph (d) of this Section 5 (the "Call Date"). The Call Date shall be
selected by the Corporation, shall be specified in the notice of redemption and
shall be not less than 30 days nor more than 60 days after the date notice of
redemption is sent by the Corporation.
(c) If full cumulative dividends on all outstanding shares of
Class B Preferred Stock and any other class or series of Parity Stock of the
Corporation have not been paid or declared and set apart for payment, no shares
of Class B Preferred Stock may be redeemed unless
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all outstanding shares of Class B Preferred Stock are simultaneously redeemed
and neither the Corporation nor any affiliate of the Corporation may purchase or
acquire shares of Class B Preferred Stock, otherwise than pursuant to a purchase
or exchange offer made on the same terms to all holders of shares of Class B
Preferred Stock.
(d) If the Corporation shall redeem shares of Class B
Preferred Stock pursuant to paragraph (a) of this Section 5, notice of such
redemption shall be given to each holder of record of the shares to be redeemed.
Such notice shall be provided by first class mail, postage prepaid, at such
holder's address as the same appears on the stock records of the Corporation.
Neither the failure to mail any notice required by this paragraph (d), nor any
defect therein or in the mailing thereof to any particular holder, shall affect
the sufficiency of the notice or the validity of the proceedings for redemption
with respect to the other holders. Any notice which was mailed in the manner
herein provided shall be conclusively presumed to have been duly given on the
date mailed whether or not the holder receives the notice. Each such notice
shall state, as appropriate: (1) the Call Date; (2) the number of shares of
Class B Preferred Stock to be redeemed and, if fewer than all such shares held
by such holder are to be redeemed, the number of such shares to be redeemed from
such holder; (3) the place or places at which certificates for such shares are
to be surrendered for cash; and (4) the then-current Conversion Price. Notice
having been mailed as aforesaid, from and after the Call Date (unless the
Corporation shall fail to make available the amount of cash necessary to effect
such redemption), (i) except as otherwise provided herein, dividends on the
shares of Class B Preferred Stock so called for redemption shall cease to
accumulate or accrue on the shares of Class B Preferred Stock called for
redemption (except that, in the case of a Call Date after a dividend record date
and prior to the related Dividend Payment Date, holders of Class B Preferred
Stock on the dividend record date will be entitled on such Dividend Payment Date
to receive the dividend payable on such shares), (ii) said shares shall no
longer be deemed to be outstanding, and (iii) all rights of the holders thereof
as holders of Class B Preferred Stock of the Corporation shall cease (except the
rights to receive the cash payable upon such redemption, without interest
thereon, upon surrender and endorsement of their certificates if so required and
to receive any dividends payable thereon). The Corporation's obligation to make
available the redemption price in accordance with the preceding sentence shall
be deemed fulfilled if, on or before the Call Date, the Corporation shall
deposit with a bank or trust company (which may be an affiliate of the
Corporation) that has, or is an affiliate of a bank or trust company that has, a
capital and surplus of at least $50,000,000, such amount of cash as is necessary
for such redemption, in trust, with irrevocable instructions that such cash be
applied to the redemption of the shares of Class B Preferred Stock so called for
redemption. No interest shall accrue for the benefit of the holders of shares of
Class B Preferred Stock to be redeemed on any cash so set aside by the
Corporation. Subject to applicable escheat laws, any such cash unclaimed at the
end of two years from the Call Date shall revert to the general funds of the
Corporation, after which reversion the holders of shares of Class B Preferred
Stock so called for redemption shall look only to the general funds of the
Corporation for the payment of such cash.
As promptly as practicable after the surrender in accordance with such
notice of the
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certificates for any such shares of Class B Preferred Stock to be so redeemed
(properly endorsed or assigned for transfer, if the Corporation shall so require
and the notice shall so state), such certificates shall be exchanged for cash
(without interest thereon) for which such shares have been redeemed in
accordance with such notice. If fewer than all the outstanding shares of Class B
Preferred Stock are to be redeemed, shares to be redeemed shall be selected by
the Corporation from outstanding shares of Class B Preferred Stock not
previously called for redemption by lot or, with respect to the number of shares
of Class B Preferred Stock held of record by each holder of such shares, pro
rata (as nearly as may be) or by any other method as may be determined by the
Board of Directors in its discretion to be equitable. If fewer than all the
shares of Class B Preferred Stock represented by any certificate are redeemed,
then a new certificate representing the unredeemed shares shall be issued
without cost to the holders thereof.
6. STATUS OF REACQUIRED STOCK.
All shares of Class B Preferred Stock which shall have been issued and
reacquired in any manner by the Corporation (including shares of Class B
Preferred Stock which have been surrendered for conversion into Common Stock)
shall be returned to the status of authorized, but unissued shares of Class B
Preferred Stock.
7. CONVERSION.
At any time on or after August 4, 1998. Holders of shares of Class B
Preferred Stock shall have the right to convert all or a portion of such shares
into shares of Common Stock, as follows:
(a) Subject to and upon compliance with the provisions of this
Section 7, a holder of shares of Class B Preferred Stock shall have the right,
at such holder's option, at any time on or after August 4, 1998 to convert such
shares, in whole or in part, into the number of fully paid and non-assessable
shares of authorized but previously unissued shares of Common Stock per each
share of Class B Preferred Stock obtained by dividing the Liquidation Preference
(excluding any accumulated, accrued and unpaid dividends) per share of Class B
Preferred Stock by the Conversion Price (as in effect at the time and on the
date provided for in the last subparagraph of paragraph (b) of this Section 7)
and by surrendering such shares to be converted, such surrender to be made in
the manner provided in paragraph (b) of this Section 7; provided, however, that
the right to convert shares of Class B Preferred Stock called for redemption
pursuant to Section 5 shall terminate at the close of business on the Call Date
fixed for such redemption, unless the Corporation shall default in making
payment of cash payable upon such redemption under Section 5 of this Article.
(b) In order to exercise the conversion right, the holder of
each share of Class B Preferred Stock to be converted shall surrender the
certificate representing such share, duly endorsed or assigned to the
Corporation or in blank, at the office of the Transfer Agent, accompanied by
written notice to the Corporation that the holder thereof elects to convert such
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share of Class B Preferred Stock. Unless the shares issuable on conversion are
to be issued in the same name as the name in which such share of Class B
Preferred Stock is registered, each share surrendered for conversion shall be
accompanied by instruments of transfer, in form satisfactory to the Corporation,
duly executed by the holder or such holder's duly authorized attorney and an
amount sufficient to pay any transfer or similar tax (or evidence reasonably
satisfactory to the Corporation demonstrating that such taxes have been paid).
Holders of shares of Class B Preferred Stock at the close of business
on a dividend payment record date shall be entitled to receive the dividend
payable on such shares on the corresponding Dividend Payment Date
notwithstanding the conversion thereof following such dividend payment record
date and prior to such Dividend Payment Date. Except as provided above, the
Corporation shall make no payment or allowance for unpaid dividends, whether or
not in arrears, on converted shares or for dividends on the shares of Common
Stock issued upon such conversion.
As promptly as practicable after the surrender of certificates for
shares of Class B Preferred Stock as aforesaid, the Corporation shall issue and
shall deliver at such office to such holder, or send on such holder's written
order, a certificate or certificates for the number of full shares of Common
Stock issuable upon the conversion of such shares of Class B Preferred Stock in
accordance with provisions of this Section 7, and any fractional interest in
respect of a share of Common Stock arising upon such conversion shall be settled
as provided in paragraph (c) of this Section 7.
Each conversion shall be deemed to have been effected immediately prior
to the close of business on the date on which the certificates for shares of
Class B Preferred Stock shall have been surrendered and such notice received by
the Corporation as aforesaid, and the Person or Persons in whose name or names
any certificate or certificates for shares of Common Stock shall be issuable
upon such conversion shall be deemed to have become the holder or holders of
record of the shares represented thereby at such time on such date and such
conversion shall be at the Conversion Price in effect at such time on such date
unless the stock transfer books of the Corporation shall be closed on that date,
in which event such Person or Persons shall be deemed to have become such holder
or holders of record at the close of business on the next succeeding day on
which such stock transfer books are open, but such conversion shall be at the
Conversion Price in effect on the date on which such shares shall have been
surrendered and such notice received by the Corporation. If the dividend payment
record date for the Class B Preferred Stock and Common Stock do not coincide,
and the preceding sentence does not operate to ensure that a holder of shares of
Class B Preferred Stock whose shares are converted into Common Stock does not
receive dividends on both the shares of Class B Preferred Stock and the Common
Stock into which such shares are converted for the same Dividend Period, then
notwithstanding anything herein to the contrary, it is the intent, and the
Transfer Agent is authorized to ensure that no conversion after the earlier of
such record dates will be accepted until after the latter of such record dates.
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(c) No fractional share of Common Stock or scrip representing
fractions of a share of Common Stock shall be issued upon conversion of the
shares of Class B Preferred Stock. Instead of any fractional interest in a share
of Common Stock that would otherwise be deliverable upon the conversion of
shares of Class B Preferred Stock, the Corporation shall pay to the holder of
such share an amount in cash based upon the Current Market Price of the Common
Stock on the Trading Day immediately preceding the date of conversion. If more
than one share shall be surrendered for conversion at one time by the same
holder, the number of full shares of Common Stock issuable upon conversion
thereof shall be computed on the basis of the aggregate number of shares of
Class B Preferred Stock so surrendered.
(d) The Conversion Price shall be adjusted from time to time
as follows:
(i) If the Corporation shall after the Issue Date (A)
pay a dividend or make a distribution on its capital stock in shares of Common
Stock, (B) subdivide its outstanding Common Stock into a greater number of
shares, (C) combine its outstanding Common Stock into a smaller number of shares
or (D) issue any shares of capital stock by reclassification of its outstanding
Common Stock, the Conversion Price in effect at the opening of business on the
day following the date fixed for the determination of stockholders entitled to
receive such dividend or distribution or at the opening of business on the day
following the day on which such subdivision, combination or reclassification
becomes effective, as the case may be, shall be adjusted so that the holder of
any share of Class B Preferred Stock thereafter surrendered for conversion shall
be entitled to receive the number of shares of Common Stock (or fraction of a
share of Common Stock) that such holder would have owned or have been entitled
to receive after the happening of any of the events described above had such
share of Class B Preferred Stock been converted immediately prior to the record
date in the case of a dividend or distribution or the effective date in the case
of a subdivision, combination or reclassification. An adjustment made pursuant
to this paragraph (d)(i) of this Section 7 shall become effective immediately
after the opening of business on the day next following the record date (except
as provided in paragraph (h) below) in the case of a dividend or distribution
and shall become effective immediately after the opening of business on the day
next following the effective date in the case of a subdivision, combination or
reclassification.
(ii) If the Corporation shall issue after the Issue
Date rights, options or warrants to all holders of Common Stock entitling them
(for a period expiring within 45 days after the record date described below in
this paragraph (d)(ii) of this Section 7) to subscribe for or purchase Common
Stock at a price per share less than the Fair Market Value per share of the
Common Stock on the record date for the determination of stockholders entitled
to receive such rights, options or warrants, then the Conversion Price in effect
at the opening of business on the day next following such record date shall be
adjusted to equal the price determined by multiplying (A) the Conversion Price
in effect immediately prior to the opening of business on the day following the
date fixed for such determination by (B) a fraction, the numerator of which
shall be the sum of (X) the number of shares of Common Stock outstanding on the
close of business on the date fixed for such determination and (Y) the number of
shares that could be
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purchased at such Fair Market Value from the aggregate proceeds to the
Corporation from the exercise of such rights, options or warrants for Common
Stock, and the denominator of which shall be the sum of (XX) the number of
shares of Common Stock outstanding on the close of business on the date fixed
for such determination and (YY) the number of additional shares of Common Stock
offered for subscription or purchase pursuant to such rights, options or
warrants. Such adjustment shall become effective immediately after the opening
of business on the day next following such record date (except as provided in
paragraph (h) below). In determining whether any rights, options or warrants
entitle the holders of Common Stock to subscribe for or purchase Common Stock at
less than such Fair Market Value, there shall be taken into account any
consideration received by the Corporation upon issuance and upon exercise of
such rights, options or warrants, the value of such consideration, if other than
cash, to be determined in good faith by the Board of Directors.
(iii) If the Corporation shall after the Issue Date
make a distribution on its Common Stock other than in cash or shares of Common
Stock (including any distribution in securities (other than rights, options or
warrants referred to in paragraph (d)(ii) of this Section 7)) (each of the
foregoing being referred to herein as a "distribution"), then the Conversion
Price in effect at the opening of business on the next day following the record
date for determination of stockholders entitled to receive such distribution
shall be adjusted to equal the price determined by multiplying (A) the
Conversion Price in effect immediately prior to the opening of business on the
day following the record date by (B) a fraction, the numerator of which shall be
the difference between (X) the number of shares of Common Stock outstanding on
the close of business on the record date and (Y) the number of shares determined
by dividing (aa) the aggregate value of the property being distributed by (bb)
the Fair Market Value per share of Common Stock on the record date, and the
denominator of which shall be the number of shares of Common Stock outstanding
on the close of business on the record date. Such adjustment shall become
effective immediately after the opening of business on the day next following
such record date (except as provided below). The value of the property being
distributed shall be as determined in good faith by the Board of Directors;
provided, however, if the property being distributed is a publicly traded
security, its value shall be calculated in accordance with the procedure for
calculating the Fair Market Value of a share of Common Stock (calculated for a
period of five consecutive Trading Days commencing on the twentieth Trading Day
after the distribution). Neither the issuance by the Corporation of rights,
options or warrants to subscribe for or purchase securities of the Corporation
nor the exercise thereof shall be deemed a distribution under this paragraph.
(iv) If after the Issue Date the Corporation shall
acquire, pursuant to an issuer or self tender offer, all or any portion of the
outstanding Common Stock and such tender offer involves the payment of
consideration per share of Common Stock having a fair market value (as
determined in good faith by the Board of Directors), at the last time (the
"Expiration Time") tenders may be made pursuant to such offer, that exceeds the
Current Market Price per share of Common Stock on the Trading Day next
succeeding the Expiration Time, then the Conversion Price in effect on the
opening of business on the day next succeeding the Expiration
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Time shall be adjusted to equal the price determined by multiplying (A) the
Conversion Price in effect immediately prior to the Expiration Time by (B) a
fraction, the numerator of which shall be (X) the number of shares of Common
Stock outstanding (including the shares acquired in the tender offer (the
"Acquired Shares")) immediately prior to the Expiration Time, multiplied by (Y)
the Current Market Price per share of Common Stock on the Trading Day next
succeeding the Expiration Time, and the denominator of which shall be the sum of
(XX) the fair market value (determined as aforesaid) of the aggregate
consideration paid to acquire the Acquired Shares and (YY) the product of (I)
the number of shares of Common Stock outstanding (less any Acquired Shares) at
the Expiration Time, multiplied by (II) the Current Market Price per share of
Common Stock on the Trading Day next succeeding the Expiration Time.
(v) No adjustment in the Conversion Price shall be
required unless such adjustment would require a cumulative increase or decrease
of at least 1% in such price; provided, however, that any adjustments that by
reason of this paragraph (d)(v) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment until made; and
provided, further, that any adjustment shall be required and made in accordance
with the provisions of this Section 7 (other than this paragraph (d)(v)) not
later than such time as may be required in order to preserve the tax-free nature
of a distribution to the holders of shares of Common Stock. Notwithstanding any
other provisions of this Section 7, the Corporation shall not be required to
make any adjustment of the Conversion Price for the issuance of (A) any shares
of Common Stock pursuant to any plan providing for the reinvestment of dividends
or interest payable on securities of the Corporation and the investment of
optional amounts in shares of Common Stock under such plan or (B) any options,
rights or shares of Common Stock pursuant to any stock option, stock purchase or
other stock-based plan maintained by the Corporation. All calculations under
this Section 7 shall be made to the nearest cent (with $.005 being rounded
upward) or to the nearest one-tenth of a share (with .05 of a share being
rounded upward), as the case may be. Anything in this paragraph (d) of this
Section 7 to the contrary notwithstanding, the Corporation shall be entitled, to
the extent permitted by law, to make such reductions in the Conversion Price, in
addition to those required by this paragraph (d), as it in its discretion shall
determine to be advisable in order that any stock dividends, subdivision of
shares, reclassification or combination of shares, distribution of rights or
warrants to purchase stock or securities, or a distribution of other assets
(other than cash dividends) hereafter made by the Corporation to its
stockholders shall not be taxable, or if that is not possible, to diminish any
income taxes that are otherwise payable because of such event.
(e) If the Corporation shall be a party to any transaction
(including without limitation a merger, consolidation, statutory share exchange,
issuer or self tender offer for at least 30% of the shares of Common Stock
outstanding, sale of all or substantially all of the Corporation's assets or
recapitalization of the Common Stock, but excluding any transaction as to which
paragraph (d)(i) of this Section 7 applies) (each of the foregoing being
referred to herein as a "Transaction"), in each case as a result of which shares
of Common Stock shall be converted into the right to receive stock, securities
or other property (including cash or any combination thereof), each share of
Class B Preferred Stock which is not converted into the right to receive
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stock, securities or other property in connection with such Transaction shall
thereupon be convertible into the kind and amount of shares of stock, securities
and other property (including cash or any combination thereof) receivable upon
such consummation by a holder of that number of shares of Common Stock into
which one share of Class B Preferred Stock was convertible immediately prior to
such Transaction (without giving effect to any Conversion Price adjustment
pursuant to Section 7(d)(iv) of this Article). The Corporation shall not be a
party to any Transaction unless the terms of such Transaction are consistent
with the provisions of this paragraph (e), and it shall not consent or agree to
the occurrence of any Transaction until the Corporation has entered into an
agreement with the successor or purchasing entity, as the case may be, for the
benefit of the holders of the Class B Preferred Stock that will contain
provisions enabling the holders of the Class B Preferred Stock that remain
outstanding after such Transaction to convert into the consideration received by
holders of Common Stock at the Conversion Price in effect immediately prior to
such Transaction. The provisions of this paragraph (e) shall similarly apply to
successive Transactions.
(f) If:
(i) the Corporation shall declare a dividend (or any
other distribution) on the Common Stock (other than cash dividends and cash
distributions); or
(ii) the Corporation shall authorize the granting to
all holders of the Common Stock of rights or warrants to subscribe for or
purchase any shares of any class or series of capital stock or any other rights
or warrants; or
(iii) there shall be any reclassification of the
outstanding Common Stock or any consolidation or merger to which the Corporation
is a party and for which approval of any stockholders of the Corporation is
required, or a statutory share exchange, an issuer or self tender offer shall
have been commenced for at least 30% of the outstanding shares of Common Stock
(or an amendment thereto changing the maximum number of shares sought or the
amount or type of consideration being offered therefor shall have been adopted),
or the sale or transfer of all or substantially all of the assets of the
Corporation as an entirety; or
(iv) there shall occur the voluntary or involuntary
liquidation, dissolution or winding up of the Corporation,
then the Corporation shall cause to be filed with the Transfer Agent and shall
cause to be mailed to each holder of shares of Class B Preferred Stock at such
holder's address as shown on the stock records of the Corporation, as promptly
as possible, a notice stating (A) the record date for the payment of such
dividend, distribution or rights or warrants, or, if a record date is not
established, the date as of which the holders of Common Stock of record to be
entitled to such dividend, distribution or rights or warrants are to be
determined or (B) the date on which such reclassification, consolidation,
merger, statutory share exchange, sale, transfer, liquidation, dissolution or
winding up is expected to become effective, and the date as of which it is
expected
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that holders of Common Stock of record shall be entitled to exchange their
shares of Common Stock for securities or other property, if any, deliverable
upon such reclassification, consolidation, merger, statutory share exchange,
sale, transfer, liquidation, dissolution or winding up or (C) the date on which
such tender offer commenced, the date on which such tender offer is scheduled to
expire unless extended, the consideration offered and the other material terms
thereof (or the material terms of any amendment thereto). Failure to give or
receive such notice or any defect therein shall not affect the legality or
validity of the proceedings described in this Section 7.
(g) Whenever the Conversion Price is adjusted as herein
provided, the Corporation shall promptly file with the Transfer Agent an
officer's certificate setting forth the Conversion Price after such adjustment
and setting forth a brief statement of the facts requiring such adjustment which
certificate shall be conclusive evidence of the correctness of such adjustment
absent manifest error. Promptly after delivery of such certificate, the
Corporation shall prepare a notice of such adjustment of the Conversion Price
setting forth the adjusted Conversion Price and the effective date such
adjustment becomes effective and shall mail such notice of such adjustment of
the Conversion Price to each holder of shares of Class B Preferred Stock at such
holder's last address as shown on the stock records of the Corporation.
(h) In any case in which paragraph (d) of this Section 7
provides that an adjustment shall become effective on the day next following the
record date for an event, the Corporation may defer until the occurrence of such
event (A) issuing to the holder of any share of Class B Preferred Stock
converted after such record date and before the occurrence of such event the
additional Common Stock issuable upon such conversion by reason of the
adjustment required by such event over and above the Common Stock issuable upon
such conversion before giving effect to such adjustment and (B) paying to such
holder any amount of cash in lieu of any fraction pursuant to paragraph (c) of
this Section 7.
(i) There shall be no adjustment of the Conversion Price in
case of the issuance of any capital stock of the Corporation in a
reorganization, acquisition or other similar transaction except as specifically
set forth in this Section 7.
(j) If the Corporation shall take any action affecting the
Common Stock, other than action described in this Section 7, that in the opinion
of the Board of Directors would materially adversely affect the conversion
rights of the holders of Class B Preferred Stock, the Conversion Price for the
Class B Preferred Stock may be adjusted, to the extent permitted by law, in such
manner, if any, and at such time as the Board of Directors, in its sole
discretion, may determine to be equitable under the circumstances.
(k) The Corporation shall at all times reserve and keep
available, free from preemptive rights, out of the aggregate of its authorized
but unissued Common Stock solely for the purpose of effecting conversion of the
Class B Preferred Stock, the full number of shares of Common Stock deliverable
upon the conversion of all outstanding shares of Class B Preferred
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Stock not theretofore converted into Common Stock. For purposes of this
paragraph (k), the number of shares of Common Stock that shall be deliverable
upon the conversion of all outstanding shares of Class B Preferred Stock shall
be computed as if at the time of computation all such outstanding shares were
held by a single holder (and without regard to the Ownership Limit set forth in
the Charter of the Corporation).
The Corporation covenants that any shares of Common Stock issued upon
conversion of the shares of Class B Preferred Stock shall be validly issued,
fully paid and nonassessable.
The Corporation shall use its best efforts to list the shares of Common
Stock required to be delivered upon conversion of the shares of Class B
Preferred Stock, prior to such delivery, upon each national securities exchange,
if any, upon which the outstanding shares of Common Stock are listed at the time
of such delivery.
(l) The Corporation will pay any and all documentary stamp or
similar issue or transfer taxes payable in respect of the issue or delivery of
shares of Common Stock or other securities or property on conversion or
redemption of shares of Class B Preferred Stock pursuant hereto; provided,
however, that the Corporation shall not be required to pay any tax that may be
payable in respect of any transfer involved in the issue or delivery of shares
of Common Stock or other securities or property in a name other than that of the
holder of the shares of Class B Preferred Stock to be converted or redeemed, and
no such issue or delivery shall be made unless and until the Person requesting
such issue or delivery has paid to the Corporation the amount of any such tax or
established, to the reasonable satisfaction of the Corporation, that such tax
has been paid.
(m) In addition to any other adjustment required hereby, to
the extent permitted by law, the Corporation from time to time may decrease the
Conversion Price by any amount, permanently or for a period of at least twenty
Business Days, if the decrease is irrevocable during the period.
(n) Notwithstanding anything to the contrary contained in this
Section 7, conversion of Class B Preferred Stock pursuant to this Section 7
shall be permitted only to the extent that such conversion would not result in a
violation of the Ownership Restrictions (as defined in the Charter), after
taking into account any waiver of such limitation granted to any holder of the
shares of Class B Preferred Stock.
8. RANKING.
Any class or series of capital stock of the Corporation shall be deemed
to rank:
(a) prior or senior to the Class B Preferred Stock, as to the
payment of dividends and as to distribution of assets upon liquidation,
dissolution or winding up, if the holders of such class or series shall be
entitled to the receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in preference or
priority to the holders of Class B Preferred Stock ("Senior Stock");
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(b) on a parity with the Class B Preferred Stock, as to the
payment of dividends and as to distribution of assets upon liquidation,
dissolution or winding up, whether or not the dividend rates, dividend payment
dates or redemption or liquidation prices per share thereof be different from
those of the Class B Preferred Stock, if the holders of such class of stock or
series and the Class B Preferred Stock shall be entitled to the receipt of
dividends and of amounts distributable upon liquidation, dissolution or winding
up in proportion to their respective amounts of accrued and unpaid dividends per
share or liquidation preferences, without preference or priority one over the
other ("Parity Stock"); and
(c) junior to the Class B Preferred Stock, as to the payment
of dividends or as to the distribution of assets upon liquidation, dissolution
or winding up, if such stock or series shall be Common Stock or if the holders
of Class B Preferred Stock shall be entitled to receipt of dividends or of
amounts distributable upon liquidation, dissolution or winding up, as the case
may be, in preference or priority to the holders of shares of such class or
series ("Junior Stock").
9. VOTING.
(a) If and whenever (i) six quarterly dividends (whether or
not consecutive) payable on the Class B Preferred Stock or any series or class
of Parity Stock shall be in arrears (which shall, with respect to any such
quarterly dividend, mean that any such dividend has not been paid in full),
whether or not earned or declared, or (ii) for two consecutive quarterly
dividend periods the Corporation fails to pay dividends on the Common Stock in
an amount per share at least equal to $0.4625 (subject to adjustment consistent
with any adjustment of the Conversion Price pursuant to Section 7(d) of this
Article) (the "Base Common Stock Dividend") the number of directors then
constituting the Board of Directors shall be increased by two (in the case of an
arrearage in dividends described in clause (i)) or one additional director (in
the case of an arrearage in dividends described in clause (ii)) (in each case if
not already increased by reason of similar types of provisions with respect to
Voting Preferred Stock (as defined below)) and the holders of shares of Class B
Preferred Stock, together with the holders of shares of every other series or
class of Parity Stock (any other such series, the "Voting Preferred Stock"),
voting as a single class regardless of series, shall be entitled to elect the
two additional directors (in the case of an arrearage in dividends described in
clause (i)) or one (in the case of an arrearage in dividends described in clause
(ii)) to serve on the Board of Directors at any annual meeting of stockholders
or special meeting held in place thereof, or at a special meeting of the holders
of the Class B Preferred Stock and the Voting Preferred Stock called as
hereinafter provided. Whenever (1) in the case of an arrearage in dividends
described in clause (i), all arrears in dividends on the Class B Preferred Stock
and the Voting Preferred Stock then outstanding shall have been paid and
dividends thereon for the current quarterly dividend period shall have been paid
or declared and set apart for payment, or (2) in the case of an arrearage in
dividends described in clause (ii), the Corporation makes a quarterly dividend
payment on the Common Stock in an amount per share equal to or exceeding the
Base Common Stock Dividend, then the
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right of the holders of the Class B Preferred Stock and the Voting Preferred
Stock to elect such additional two directors (in the case of an arrearage in
dividends described in clause (i)) or one additional director (in the case of an
arrearage in dividends described in clause (ii)) shall cease (but subject always
to the same provision for the vesting of such voting rights in the case of any
similar future arrearages), and the terms of office of all Persons elected as
directors by the holders of the Class B Preferred Stock and the Voting Preferred
Stock shall forthwith terminate and the number of directors constituting the
Board of Directors shall be reduced accordingly. At any time after such voting
power shall have been so vested in the holders of Class B Preferred Stock and
the Voting Preferred Stock, if applicable, the Secretary of the Corporation may,
and upon the written request of any holder of Class B Preferred Stock (addressed
to the Secretary at the principal office of the Corporation) shall, call a
special meeting of the holders of the Class B Preferred Stock and of the Voting
Preferred Stock for the election of the two directors (in the case of an
arrearage in dividends described in clause (i)) or one director (in the case of
an arrearage in dividends described in clause (ii)) to be elected by them as
herein provided, such call to be made by notice similar to that provided in the
Bylaws of the Corporation for a special meeting of the stockholders or as
required by law. If any such special meeting required to be called as above
provided shall not be called by the Secretary within 20 days after receipt of
any such request, then any holder of Class B Preferred Stock may call such
meeting, upon the notice above provided, and for that purpose shall have access
to the stock books of the Corporation. The directors or director elected at any
such special meeting shall hold office until the next annual meeting of the
stockholders or special meeting held in lieu thereof if such office shall not
have previously terminated as above provided. If any vacancy shall occur among
the directors elected by the holders of the Class B Preferred Stock and the
Voting Preferred Stock, a successor shall be elected by the Board of Directors,
upon the nomination of the then-remaining director elected by the holders of the
Class B Preferred Stock and the Voting Preferred Stock or the successor of such
remaining director, to serve until the next annual meeting of the stockholders
or special meeting held in place thereof if such office shall not have
previously terminated as provided above.
(b) So long as any shares of Class B Preferred Stock are
outstanding, in addition to any other vote or consent of stockholders required
by law or by the Charter of the Corporation, the affirmative vote of at least
66-2/3% of the votes entitled to be cast by the holders of the Class B Preferred
Stock, given in Person or by proxy, either in writing without a meeting or by
vote at any meeting called for the purpose, shall be necessary for effecting or
validating:
(i) Any amendment, alteration or repeal of any of the
provisions of these Articles Supplementary, the Charter or the By-Laws of the
Corporation that materially adversely affects the voting powers, rights or
preferences of the holders of the Class B Preferred Stock; provided, however,
that the amendment of the provisions of the Charter so as to authorize or
create, or to increase the authorized amount of, any Junior Stock or any shares
of any class of Parity Stock shall not be deemed to materially adversely affect
the voting powers, rights or preferences of the holders of Class B Preferred
Stock; or
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(ii) The authorization, creation of, the increase in
the authorized amount of, or issuance of , any shares of any class of Senior
Stock or any security convertible into shares of any class of Senior Stock
(whether or not such class of Senior Stock is currently authorized); provided,
however, that no such vote of the holders of Class B Preferred Stock shall be
required if, at or prior to the time when such amendment, alteration or repeal
is to take effect, or when the issuance of any such prior shares or convertible
security is to be made, as the case may be, provision is made for the redemption
of all shares of Class B Preferred Stock at the time outstanding to the extent
such redemption is authorized by Section 5 of this Article.
For purposes of the foregoing provisions and all other voting rights
under these Articles Supplementary, each share of Class B Preferred Stock shall
have one (1) vote per share, except that when any other class or series of
preferred stock shall have the right to vote with the Class B Preferred Stock as
a single class on any matter, then the Class B Preferred Stock and such other
class or series shall have with respect to such matters one (1) vote per $100 of
stated liquidation preference. Except as otherwise required by applicable law or
as set forth herein, the Class B Preferred Stock shall not have any relative,
participating, optional or other special voting rights and powers other than as
set forth herein, and the consent of the holders thereof shall not be required
for the taking of any corporate action.
10. RECORD HOLDERS.
The Corporation and the Transfer Agent may deem and treat the record
holder of any share of Class B Preferred Stock as the true and lawful owner
thereof for all purposes, and neither the Corporation nor the Transfer Agent
shall be affected by any notice to the contrary.
11.1 RESTRICTIONS ON OWNERSHIP AND TRANSFERS.
(A) LIMITATION ON BENEFICIAL OWNERSHIP. Except as provided in
Section 11.8, from and after the Issue Date, no Person (other than the Initial
Holder or a Look-Through Entity) shall Beneficially Own shares of Class B
Preferred Stock in excess of the Ownership Limit, the Initial Holder shall not
Beneficially Own shares of Class B Preferred Stock in excess of the Initial
Holder Limit and no Look-Through Entity shall Beneficially Own shares of Class B
Preferred Stock in excess of the Look-Through Ownership Limit.
(B) TRANSFERS IN EXCESS OF OWNERSHIP LIMIT. Except as provided
in Section 11.8, from and after the Issue Date (and subject to Section 11.12),
any Transfer (whether or not such Transfer is the result of transactions entered
into through the facilities of the NYSE or other securities exchange or an
automated inter-dealer quotation system) that, if effective, would result in any
Person (other than the Initial Holder or a Look-Through Entity) Beneficially
Owning shares of Class B Preferred Stock in excess of the Ownership Limit shall
be void ab initio as to the Transfer of such shares of Class B Preferred Stock
that would be otherwise Beneficially Owned by such Person in excess of the
Ownership Limit, and the intended transferee shall acquire no rights in such
shares of Class B Preferred Stock.
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(C) TRANSFERS IN EXCESS OF INITIAL HOLDER LIMIT. Except as
provided in Section 11.8, from and after the Issue Date (and subject to Section
11.12), any Transfer (whether or not such Transfer is the result of transactions
entered into through the facilities of the NYSE or other securities exchange or
an automated inter-dealer quotation system) that, if effective, would result in
the Initial Holder Beneficially Owning shares of Class B Preferred Stock in
excess of the Initial Holder Limit shall be void ab initio as to the Transfer of
such shares of Class B Preferred Stock that would be otherwise Beneficially
Owned by the Initial Holder in excess of the Initial Holder limit, and the
Initial Holder shall acquire no rights in such shares of Class B Preferred
Stock.
(D) TRANSFERS IN EXCESS OF LOOK-THROUGH OWNERSHIP LIMIT.
Except as provided in Section 11.8 from and after the Issue Date (and subject to
Section 11.12), any Transfer (whether or not such Transfer is the result of
transactions entered into through the facilities of the NYSE or other securities
exchange or an automated inter-dealer quotation system) that, if effective,
would result in any Look-Through Entity Beneficially Owning shares of Class B
Preferred Stock in excess of the Look-Through Ownership limit shall be void ab
initio as to the Transfer of such shares of Class B Preferred Stock that would
be otherwise Beneficially Owned by such Look-Through Entity in excess of the
Look-Through Ownership Limit and such Look-Through Entity shall acquire no
rights in such shares of Class B Preferred Stock.
(E) TRANSFERS RESULTING IN "CLOSELY HELD" STATUS. From and
after the Issue Date, any Transfer that, if effective would result in the
Corporation being "closely held" within the meaning of Section 856(h) of the
Code, or would otherwise result in the Corporation failing to qualify as a REIT
(including, without limitation, a Transfer or other event that would result in
the Corporation owning (directly or constructively) an interest in a tenant that
is described in Section 856(d)(2)(B) of the Code if the income derived by the
Corporation from such tenant would cause the Corporation to fail to satisfy any
of the gross income requirements of Section 856(c) of the Code) shall be void ab
initio as to the Transfer of shares of Class B Preferred Stock that would cause
the Corporation (i) to be "closely held" within the meaning of Section 856(h) of
the Code or (ii) otherwise fail to qualify as a REIT, as the case may be, and
the intended transferee shall acquire no rights in such shares of Class B
Preferred Stock.
(F) SEVERABILITY ON VOID TRANSACTIONS. A Transfer of a share
of Class B Preferred Stock that is null and void under Sections 11.1(B), (C),
(D), or (E) of this Article because it would, if effective, result in (i) the
ownership of Class B Preferred Stock in excess of the Initial Holder Limit, the
Ownership Limit, or the Look-Through Ownership Limit, (ii) the Corporation being
"closely held" within the meaning of Section 856(h) of the Code or (iii) the
Corporation otherwise failing to qualify as a REIT, shall not adversely affect
the validity of the Transfer of any other share of Class B Preferred Stock in
the same or any other related transaction.
11.2 REMEDIES FOR BREACH. If the Board of Directors or a committee
thereof shall at any time determine in good faith that a Transfer or other event
has taken place in violation of Section
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11.1 of this Article or that a Person intends to acquire or has attempted to
acquire Beneficial Ownership of any shares of Class B Preferred Stock in
violation of Section 11.1 of this Article (whether or not such violation is
intended), the Board of Directors or a committee thereof shall be empowered to
take any action as it deems advisable to refuse to give effect to or to prevent
such Transfer or other event, including, but not limited to, refusing to give
effect to such Transfer or other event on the books of the Corporation, causing
the Corporation to redeem such shares at the then current Market Price and upon
such terms and conditions as may be specified by the Board of Directors in its
sole discretion (including, but not limited to, by means of the issuance of
long-term indebtedness for the purpose of such redemption), demanding the
repayment of any distributions received in respect of shares of Class B
Preferred Stock acquired in violation of Section 11.1 of this Article or
instituting proceedings to enjoin such Transfer or to rescind such Transfer or
attempted Transfer; provided, however, that any Transfers or attempted Transfers
(or in the case of events other than a Transfer, Beneficial Ownership) in
violation of Section 11.1 of this Article, regardless of any action (or
non-action) by the Board of Directors or such committee, (a) shall be void ab
initio or (b) shall automatically result in the transfer described in Section
11.3 of this Article; provided, further, that the provisions of this Section
11.2 shall be subject to the provisions of Section 11.12 of this Article;
provided, further, that neither the Board of Directors nor any committee thereof
may exercise such authority in a manner that interferes with any ownership or
transfer of Class B Preferred Stock that is expressly authorized pursuant to
Section 11.8(d) of this Article.
11.3. TRANSFER IN TRUST.
(A) ESTABLISHMENT OF TRUST. If, notwithstanding the other
provisions contained in this Article, at any time after the Issue Date there is
a purported Transfer (an "Excess Transfer") (whether or not such Transfer is the
result of transactions entered into through the facilities of the NYSE or other
securities exchange or an automated inter-dealer quotation system) or other
change in the capital structure of the Corporation (including, but not limited
to, any redemption of Preferred Stock) or other event (including, but not
limited to, any acquisition of any share of Equity Stock) such that (a) any
Person (other than the Initial Holder or a Look-Through Entity) would
Beneficially Own shares of Class B Preferred Stock in excess of the Ownership
Limit, or (b) the Initial Holder would Beneficially Own shares of Class B
Preferred Stock in excess of the Initial Holder Limit, or (c) any Person that is
a Look-Through Entity would Beneficially Own shares of Class B Preferred Stock
in excess of the Look-Through Ownership Limit (in any such event, the Person,
Initial Holder or Look-Through Entity that would Beneficially Own shares of
Class B Preferred Stock in excess of the Ownership Limit, the Initial Holder
Limit or the Look-Through Entity Limit, respectively, is referred to as a
"Prohibited Transferee"), then, except as otherwise provided in Section 11.8 of
this Article, such shares of Class B Preferred Stock in excess of the Ownership
Limit, the Initial Holder Limit or the Look-Through Ownership Limit, as the case
may be, (rounded up to the nearest whole share) shall be automatically
transferred to a Trustee in his capacity as trustee of a Trust for the exclusive
benefit of one or more Charitable Beneficiaries. Such transfer to the Trustee
shall be deemed to be effective as of the close of business on the business day
prior to the Excess
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Transfer, change in capital structure or another event giving rise to a
potential violation of the Ownership Limit, the Initial Holder Limit or the Look
Through Entity Ownership Limit.
(B) APPOINTMENT OF TRUSTEE. The Trustee shall be appointed by
the Corporation and shall be a Person unaffiliated with either the Corporation
or any Prohibited Transferee. The Trustee may be an individual or a bank or
trust company duly licensed to conduct a trust business.
(C) STATUS OF SHARES HELD BY THE TRUSTEE. Shares of Class B
Preferred Stock held by the Trustee shall be issued and outstanding shares of
capital stock of the Corporation. Except to the extent provided in Section
11.3(E), the Prohibited Transferee shall have no rights in the Class B Preferred
Stock held by the Trustee, and the Prohibited Transferee shall not benefit
economically from ownership of any shares held in trust by the Trustee, shall
have no rights to dividends and shall not possess any rights to vote or other
rights attributable to the shares held in the Trust.
(D) DIVIDEND AND VOTING RIGHTS. The Trustee shall have all
voting rights and rights to dividends with respect to shares of Class B
Preferred Stock held in the Trust, which rights shall be exercised for the
benefit of the Charitable Beneficiary. Any dividend or distribution paid prior
to the discovery by the Corporation that the shares of Class B Preferred Stock
have been transferred to the Trustee shall be repaid to the Corporation upon
demand, and any dividend or distribution declared but unpaid shall be rescinded
as void ab initio with respect to such shares of Class B Preferred Stock. Any
dividends or distributions so disgorged or rescinded shall be paid over to the
Trustee and held in trust for the Charitable Beneficiary. Any vote cast by a
Prohibited Transferee prior to the discovery by the Corporation that the shares
of Class B Preferred Stock have been transferred to the Trustee will be
rescinded as void ab initio and shall be recast in accordance with the desires
of the Trustee acting for the benefit of the Charitable Beneficiary. The owner
of the shares at the time of the Excess Transfer, change in capital structure or
other event giving rise to a potential violation of the Ownership Limit, Initial
Holder Limit or Look-Through Entity Ownership Limit shall be deemed to have
given an irrevocable proxy to the Trustee to vote the shares of Class B
Preferred Stock for the benefit of the Charitable Beneficiary.
(E) RESTRICTIONS ON TRANSFER. The Trustee of the Trust may
sell the shares held in the Trust to a person, designated by the Trustee, whose
ownership of the shares will not violate the Ownership Restrictions. If such a
sale is made, the interest of the Charitable Beneficiary shall terminate and
proceeds of the sale shall be payable to the Prohibited Transferee and to the
Charitable Beneficiary as provided in this Section 11.3(E). The Prohibited
Transferee shall receive the lesser of (1) the price paid by the Prohibited
Transferee for the shares or, if the Prohibited Transferee did not give value
for the shares (through a gift, devise or other transaction), the Market Price
of the shares on the day of the event causing the shares to be held in the Trust
and (2) the price per share received by the Trustee from the sale or other
disposition of the shares held in the Trust. Any proceeds in excess of the
amount payable to the Prohibited
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Transferee shall be payable to the Charitable Beneficiary. If any of the
transfer restrictions set forth in this Section 11.3(E) or any application
thereof is determined in a final judgment to be void, invalid or unenforceable
by any court having jurisdiction over the issue, the Prohibited Transferee may
be deemed, at the option of the Corporation, to have acted as the agent of the
Corporation in acquiring the Class B Preferred Stock as to which such
restrictions would, by their terms, apply, and to hold such Class B Preferred
Stock on behalf of the Corporation.
(F) PURCHASE RIGHT IN STOCK TRANSFERRED TO THE TRUSTEE. Shares
of Class B Preferred Stock transferred to the Trustee shall be deemed to have
been offered for sale to the Corporation, or its designee, at a price per share
equal to the lesser of (i) the price per share in the transaction that resulted
in such transfer to the Trust (or, in the case of a devise or gift, the Market
Price at the time of such devise or gift) and (ii) the Market Price on the date
the Corporation, or its designee, accepts such offer. The Corporation shall have
the right to accept such offer for a period of 90 days after the later of (i)
the date of the Excess Transfer or other event resulting in a transfer to the
Trust and (ii) the date that the Board of Directors determines in good faith
that an Excess Transfer or other event occurred.
(G) DESIGNATION OF CHARITABLE BENEFICIARIES. By written notice
to the Trustee, the Corporation shall designate one or more nonprofit
organizations to be the Charitable Beneficiary of the interest in the Trust
relating to such Prohibited Transferee if (i) the shares of Class B Preferred
Stock held in the Trust would not violate the Ownership Restrictions in the
hands of such Charitable Beneficiary and (ii) each Charitable Beneficiary is an
organization described in Sections 170(b)(1)(A), 170(c)(2) and 501(c)(3) of the
Code.
11.4 NOTICE OF RESTRICTED TRANSFER. Any Person that acquires or
attempts to acquire shares of Class B Preferred Stock in violation of Section
11.1 of this Article, or any Person that is a Prohibited Transferee such that
stock is transferred to the Trustee under Section 11.3 of this Article, shall
immediately give written notice to the Corporation of such event and shall
provide to the Corporation such other information as the Corporation may request
in order to determine the effect, if any, of such Transfer or attempted Transfer
or other event on the Corporation's status as a REIT. Failure to give such
notice shall not limit the rights and remedies of the Board of Directors
provided herein in any way.
11.5 OWNERS REQUIRED TO PROVIDE INFORMATION. From and after the Issue
Date certain record and Beneficial Owners and transferees of shares of Class B
Preferred Stock will be required to provide certain information as set out
below.
(A) ANNUAL DISCLOSURE. Every record and Beneficial Owner of
more than 5% (or such other percentage between 0.5% and 5%, as provided in the
applicable regulations adopted under the Code) of the number of Outstanding
shares of Class B Preferred Stock shall, within 30 days after January 1 of each
year, give written notice to the Corporation stating the name and address of
such record or Beneficial Owner, the number of shares of Class B Preferred Stock
Beneficially Owned, and a full description of how such shares are held. Each
such record
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or Beneficial Owner of Class B Preferred Stock shall, upon demand by the
Corporation, disclose to the Corporation in writing such additional information
with respect to the Beneficial Ownership of the Class B Preferred Stock as the
Board of Directors, in its sole discretion, deems appropriate or necessary to
(i) comply with the provisions of the Code regarding the qualification of the
Corporation as a REIT under the Code and (ii) ensure compliance with the
Ownership Limit, the Initial Holder Limit or the Look-Through Ownership Limit,
as applicable. Each stockholder of record, including without limitation any
Person that holds shares of Class B Preferred Stock on behalf of a Beneficial
Owner, shall take all reasonable steps to obtain the written notice described in
this Section 11.5 from the Beneficial Owner.
(B) DISCLOSURE AT THE REQUEST OF THE CORPORATION. Any Person
that is a Beneficial Owner of shares of Class B Preferred Stock and any Person
(including the stockholder of record) that is holding shares of Class B
Preferred Stock for a Beneficial Owner, and any proposed transferee of shares,
shall provide such information as the Corporation, in its sole discretion, may
request in order to determine the Corporation's status as a REIT, to comply with
the requirements of any taxing authority or other governmental agency, to
determine any such compliance or to ensure compliance with the Ownership Limit,
the Initial Holder Limit and the Look-Through Ownership Limit, and shall provide
a statement or affidavit to the Corporation setting forth the number of shares
of Class B Preferred Stock already Beneficially Owned by such stockholder or
proposed transferee and any related persons specified, which statement or
affidavit shall be in the form prescribed by the Corporation for that purpose.
11.6 REMEDIES NOT LIMITED. Nothing contained in this Article shall
limit the authority of the Board of Directors to take such other action as it
deems necessary or advisable (subject to the provisions of Section 11.12 of this
Article) (i) to protect the Corporation and the interests of its stockholders in
the preservation of the Corporation's status as a REIT and (ii) to insure
compliance with the Ownership Limit, the Initial Holder Limit and the
Look-Through Ownership Limit.
11.7 AMBIGUITY. In the case of an ambiguity in the application of any
of the provisions of Section 11 of this Article, or in the case of an ambiguity
in any definition contained in Section 11 of this Article, the Board of
Directors shall have the power to determine the application of the provisions of
this Article with respect to any situation based on its reasonable belief,
understanding or knowledge of the circumstances.
11.8 EXCEPTIONS. The following exceptions shall apply or may be
established with respect to the limitations of Section 11.1 of this Article.
(A) WAIVER OF OWNERSHIP LIMIT. The Board of Directors, upon
receipt of a ruling from the Internal Revenue Service or an opinion of tax
counsel or other evidence or undertaking acceptable to it, may waive the
application, in whole or in part, of the Ownership Limit to a Person subject to
the Ownership Limit, if such person is not an individual for purposes of Section
542(a) of the Code and is a corporation, partnership, estate or trust. In
connection
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with any such exemption, the Board of Directors may require such representations
and undertakings from such Person and may impose such other conditions as the
Board deems necessary, in its sole discretion, to determine the effect, if any,
of the proposed Transfer on the Corporation's status as a REIT.
(B) PLEDGE BY INITIAL HOLDER. Notwithstanding any other
provision of this Article, the pledge by the Initial Holder of all or any
portion of the Class B Preferred Stock directly owned at any time or from time
to time shall not constitute a violation of Section 11.1 of this Article and the
pledgee shall not be subject to the Ownership Limit with respect to the Class B
Preferred Stock so pledged to it either as a result of the pledge or upon
foreclosure.
(C) UNDERWRITERS. For a period of 270 days following the
purchase of Class B Preferred Stock by an underwriter that (i) is a corporation
or a partnership and (ii) participates in an offering of the Class B Preferred
Stock, such underwriter shall not be subject to the Ownership Limit with respect
to the Class B Preferred Stock purchased by it as a part of or in connection
with such offering and with respect to any Class B Preferred Stock purchased in
connection with market making activities.
11.9 LEGEND. Each certificate for Class B Preferred Stock shall bear
the following legend:
"The shares of Class B Preferred Stock represented by
this certificate are subject to restrictions on transfer. No person may
Beneficially Own shares of Class B Preferred Stock in excess of the
Ownership Restrictions, as applicable, with certain further
restrictions and exceptions set forth in the Corporation's Charter
(including the Articles Supplementary setting forth the terms of the
Class B Preferred Stock). Any Person that attempts to Beneficially Own
shares of Class B Preferred Stock in excess of the applicable
limitation must immediately notify the Corporation. All capitalized
terms in this legend have the meanings ascribed to such terms in the
Corporation's Charter (including the Articles Supplementary setting
forth the terms of the Class B Preferred Stock), as the same may be
amended from time to time, a copy of which, including the restrictions
on transfer, will be sent without charge to each stockholder that so
requests. If the restrictions on transfer are violated, the shares of
Class B Preferred Stock represented hereby will be either (i) void in
accordance with the Certificate or (ii) automatically transferred to a
Trustee of a Trust for the benefit of one or more Charitable
Beneficiaries."
11.10 SEVERABILITY. If any provision of this Article or any application
of any such provision is determined in a final and unappealable judgment to be
void, invalid or unenforceable by any Federal or state court having jurisdiction
over the issues, the validity and enforceability of the remaining provisions
shall not be affected and other applications of such provision shall be affected
only to the extent necessary to comply with the determination of such court.
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11.11 BOARD OF DIRECTORS DISCRETION. Anything in this Article to the
contrary notwithstanding, the Board of Directors shall be entitled to take or
omit to take such actions as it in its discretion shall determine to be
advisable in order that the Corporation maintain its status as and continue to
qualify as a REIT, including, but not limited to, reducing the Ownership Limit,
the Initial Holder Limit and the Look-Through Ownership Limit in the event of a
change in law.
11.12 SETTLEMENT. Nothing in this Section 11 of this Article shall be
interpreted to preclude the settlement of any transaction entered into through
the facilities of the NYSE or other securities exchange or an automated
inter-dealer quotation system.
FOURTH: The terms of the Class B Cumulative Convertible Preferred Stock
set forth in Article Third hereof shall become Article XIII of the Charter.
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IN WITNESS WHEREOF, the Corporation has caused these presents to be
signed in its name and on its behalf by its Vice President and witnessed by its
Secretary on August 1, 1997.
WITNESS: APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
/s/ Leeann Morein /s/ Patricia K. Heath
Leeann Morein, Patricia K. Heath,
Secretary Vice President
THE UNDERSIGNED, Vice President of APARTMENT INVESTMENT AND MANAGEMENT
COMPANY, who executed on behalf of the Corporation the Articles Supplementary of
which this Certificate is made a part, hereby acknowledges in the name and on
behalf of said Corporation the foregoing Articles Supplementary to be the
corporate act of said Corporation and hereby certifies that the matters and
facts set forth herein with respect to the authorization and approval thereof
are true in all material respects under the penalties of perjury.
/s/ Patricia K. Heath
Patricia K. Heath,
Vice President
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ARTICLES SUPPLEMENTARY
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
CLASS C CUMULATIVE PREFERRED STOCK
(PAR VALUE $.01 PER SHARE)
APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation
(hereinafter called the "Corporation"), having its principal office in Baltimore
City, Maryland, hereby certifies to the Department of Assessments and Taxation
of the State of Maryland that:
FIRST: Pursuant to authority expressly vested in the Board of Directors of
the Corporation by Section 1.2 of Article IV of the Charter of the Corporation,
the Board of Directors has duly divided and classified 2,760,000 authorized but
unissued shares of the capital stock of the Corporation into a class designated
as Class C Cumulative Preferred Stock and has provided for the issuance of such
class.
SECOND: The reclassification increases the number of shares classified as
Class C Cumulative Preferred Stock, par value $.01 per share, from no shares
immediately prior to the reclassification to 2,760,000 shares immediately after
the reclassification. The reclassification decreases the number of shares
classified as Preferred Stock, par value $.01 per share, from 9,250,000 shares
immediately prior to the reclassification to 6,490,000 shares immediately after
the reclassification. The number of shares classified as Class C Cumulative
Preferred Stock may be decreased pursuant to Section 6 of Article Third of these
Articles Supplementary upon reacquisition thereof in any manner, or by
retirement thereof, by the Corporation.
THIRD: The terms of the Class C Cumulative Preferred Stock (including the
preferences, conversions or other rights, voting powers, restrictions,
limitations as to dividends and other distributions, qualifications, or terms or
conditions of redemption) as set by the Board of Directors are as follows:
1. NUMBER OF SHARES AND DESIGNATION.
This class of Preferred Stock shall be designated as Class C Cumulative
Preferred Stock (the "Class C Preferred Stock") and Two Million Seven Hundred
Sixty Thousand (2,760,000) shall be the authorized number of shares of such
Class C Preferred Stock constituting such class.
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2. DEFINITIONS.
For purposes of the Class C Preferred Stock, the following terms shall have
the meanings indicated:
"ACT" shall mean the Securities Act of 1933, as amended.
"AFFILIATE" of a Person means a Person that directly, or indirectly through
one or more intermediaries, controls or is controlled by, or is under common
control with, the Person specified.
"AGGREGATE VALUE" shall mean, with respect to any block of Equity Stock, the
sum of the products of (i) the number of shares of each class of Equity Stock
within such block multiplied by (ii) the corresponding Market Price of one share
of Equity Stock of such class.
"BENEFICIAL OWNERSHIP" shall mean, with respect to any Person, ownership of
shares of Equity Stock equal to the sum of (i) the number of shares of Equity
Stock directly owned by such Person, (ii) the number of shares of Equity Stock
indirectly owned by such Person (if such Person is an "individual" as defined in
Section 542(a)(2) of the Code) taking into account the constructive ownership
rules of Section 544 of the Code, as modified by Section 856(h)(1)(B) of the
Code, and (iii) the number of shares of Equity Stock that such Person is deemed
to beneficially own pursuant to Rule 13d3 under the Exchange Act or that is
attributed to such Person pursuant to Section 318 of the Code, as modified by
Section 856(d)(5) of the Code, PROVIDED that when applying this definition of
Beneficial Ownership to the Initial Holder, clause (iii) of this definition, and
clause (ii) of the definition of "Person" shall be disregarded. The terms
"BENEFICIAL OWNER," "BENEFICIALLY OWNS" and "BENEFICIALLY OWNED" shall have the
correlative meanings.
"BOARD OF DIRECTORS" shall mean the Board of Directors of the Corporation or
any committee authorized by such Board of Directors to perform any of its
responsibilities with respect to the Class C Preferred Stock.
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or a day on
which state or federally chartered banking institutions in New York, New York
are not required to be open.
"CHARITABLE BENEFICIARY" shall mean one or more beneficiaries of the Trust
as determined pursuant to Section 10.3 of this Article, each of which shall be
an organization described in Section 170(b)(1)(A), 170(c)(2) and 501(c)(3) of
the Code.
"CLASS C PREFERRED STOCK" shall have the meaning set forth in Section 1 of
this Article.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from time to
time, or any successor statute thereto. Reference to any provision of the Code
shall mean such provision as in effect from time to time, as the same may be
amended, and any successor thereto, as interpreted by any applicable
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regulations or other administrative pronouncements as in effect from time to
time.
"COMMON STOCK" shall mean the Class A Common Stock, $.01 par value per
share, of the Corporation or such shares of the Corporation's capital stock into
which outstanding shares of Common Stock shall be reclassified.
"DIVIDEND PAYMENT DATE" shall mean January 15, April 15, July 15 and October
15 of each year; provided, further, that if any Dividend Payment Date falls on
any day other than a Business Day, the dividend payment payable on such Dividend
Payment Date shall be paid on the Business Day immediately following such
Dividend Payment Date and no interest shall accrue on such dividend from such
date to such Dividend Payment Date.
"DIVIDEND PERIODS" shall mean the Initial Dividend Period and each
subsequent quarterly dividend period commencing on and including January 15,
April 15, July 15 and October 15 of each year and ending on and including the
day preceding the first day of the next succeeding Dividend Period, other than
the Dividend Period during which any Class B Preferred Stock shall be redeemed
pursuant to Section 5 hereof, which shall end on and include the Redemption Date
with respect to the Class C Preferred Stock being redeemed.
"EQUITY STOCK" shall mean one or more shares of any class of capital stock
of the Corporation.
"EXCESS TRANSFER" has the meaning set forth in Section 10.3(A) of this
Article.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended.
"ISSUE DATE" shall mean December 23, 1997(1).
"INITIAL DIVIDEND PERIOD" shall mean the period commencing on and including
the Issue Date and ending on and including April 14, 1998.
"INITIAL HOLDER" shall mean Terry Considine.
"INITIAL HOLDER LIMIT" shall mean a number of the Outstanding shares of
Class C Preferred Stock of the Corporation having an Aggregate Value not in
excess of the excess of (x) 15% of the Aggregate Value of all Outstanding shares
of Equity Stock over (y) the Aggregate Value of all shares of Equity Stock other
than Class B Preferred Stock that are Beneficially Owned by the Initial Holder.
From the Issue Date, the secretary of the Corporation, or such other person as
shall be designated by the Board of Directors, shall upon request make available
to the representative(s) of the Initial Holder and the Board of Directors, a
schedule that sets forth the thencurrent Initial Holder Limit applicable to the
Initial Holder.
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"JUNIOR STOCK" shall mean the Common Stock and any other class or series of
capital stock of the Corporation over which the shares of Class C Preferred
Stock have preference or priority in the payment of dividends or in the
distribution of assets on any liquidation, dissolution or winding up of the
Corporation.
"LOOK-THROUGH ENTITY" shall mean a Person that is either (i) described in
Section 401(a) of the Code as provided under Section 856(h)(3) of the Code or
(ii) registered under the Investment Company Act of 1940.
"LOOK-THROUGH OWNERSHIP LIMIT" shall mean, for any Look-Through Entity, a
number of the Outstanding shares of Class C Preferred Stock of the Corporation
having an Aggregate Value not in excess of the excess of (x) 15% of the
Aggregate Value of all Outstanding shares of Equity Stock over (y) by the
Aggregate Value of all shares of Equity Stock other than Class B Preferred Stock
that are Beneficially Owned by the Look-Through Entity.
"MARKET PRICE" on any date shall mean, with respect to any share of Equity
Stock, the Closing Price of share of that class of Equity Stock on the Trading
Day immediately preceding such date. The term "CLOSING PRICE" on any date shall
mean the last sale price, regular way, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the NYSE or,
if the Equity Stock is not listed or admitted to trading on the NYSE, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which the
Equity Stock is listed or admitted to trading or, if the Equity Stock is not
listed or admitted to trading on any national securities exchange, the last
quoted price, or if not so quoted, the average of the high bid and low asked
prices in the overthecounter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System or, if such system is no
longer in use, the principal other automated quotations system that may then be
in use or, if the Equity Stock is not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Equity Stock selected by the Board of
Directors of the Company. The term "TRADING DAY" shall mean a day on which the
principal national securities exchange on which the Equity Stock is listed or
admitted to trading is open for the transaction of business or, if the Equity
Stock is not listed or admitted to trading on any national securities exchange,
shall mean any day other than a Saturday, a Sunday or a day on which banking
institutions in the State of New York are authorized or obligated by law or
executive order to close.
"NYSE" shall mean the New York Stock Exchange, Inc.
"OUTSTANDING" shall mean issued and outstanding shares of Equity Stock of
the Corporation, PROVIDED that for purposes of the application of the Ownership
Limit, the Look-Through Ownership Limit or the Initial Holder Limit to any
Person, the term "OUTSTANDING" shall be deemed to include the number of shares
of Equity Stock that such Person alone, at that time, could acquire pursuant to
any options or convertible securities.
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"OWNERSHIP LIMIT" shall mean, for any Person other than the Initial Holder
or a Look-Through Entity, a number of the Outstanding shares of Class C
Preferred Stock of the Corporation having an Aggregate Value not in excess of
the excess of (x) 8.7% of the Aggregate Value of all Outstanding shares of
Equity Stock over (y) the Aggregate Value of all shares of Equity Stock other
than Class C Preferred Stock that are Beneficially Owned by the Person.
"OWNERSHIP RESTRICTIONS" shall mean collectively the Ownership Limit as
applied to Persons other than the Initial Holder or Look-Through Entities, the
Initial Holder Limit as applied to the Initial Holder and the Look-Through
Ownership Limit as applied to Look-Through Entities.
"PARITY STOCK" shall have the meaning set forth in paragraph (b) of Section
7 of this Article. The Class B Preferred Stock shall be a Parity Stock.
"PERSON" shall mean (a) for purposes of Section 10 of this Article, (i) an
individual, corporation, partnership, estate, trust (including a trust
qualifying under Section 401(a) or 501(c) of the Code), association, private
foundation within the meaning of Section 509(a) of the Code, joint stock company
or other entity, and (ii) also includes a group as that term is used for
purposes of Section 13(d)(3) of the Exchange Act and (b) for purposes of the
remaining Sections of this Article, any individual, firm, partnership,
corporation or other entity and shall include any successor (by merger or
otherwise) of such entity.
"PROHIBITED TRANSFEREE" has the meaning set forth in Section 10.3(A) of
this Article.
"REDEMPTION DATE" shall have the meaning set forth in paragraph (b) of
Section 5 of this Article.
"REIT" shall mean a "real estate investment trust" as defined in Section 856
of the Code.
"SENIOR STOCK" shall have the meaning set forth in paragraph (a) of Section
7 of this Article.
"SET APART FOR PAYMENT" shall be deemed to include, without any action other
than the following, the recording by the Corporation in its accounting ledgers
of any accounting or bookkeeping entry which indicates, pursuant to a
declaration of dividends or other distribution by the Board of Directors, the
allocation of funds to be so paid on any series or class of capital stock of the
Corporation; provided, however, that if any funds for any class or series of
Junior Stock or any class or series of Parity Stock are placed in a separate
account of the Corporation or delivered to a disbursing, paying or other similar
agent, then "set apart for payment" with respect to the Class C Preferred Stock
shall mean placing such funds in a separate account or delivering such funds to
a disbursing, paying or other similar agent.
"TRADING DAY", as to any securities, shall mean any day on which such
securities are traded on the principal national securities exchange on which
such securities are listed or admitted or, if such securities are not listed or
admitted for trading on any national securities exchange, the NASDAQ
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National Market or, if such securities are not listed or admitted for trading on
the NASDAQ National Market, in the securities market in which such securities
are traded.
"TRANSFER" shall mean any sale, transfer, gift, assignment, devise or other
disposition of a share of Class C Preferred Stock (including (i) the granting of
an option or any series of such options or entering into any agreement for the
sale, transfer or other disposition of Class C Preferred Stock or (ii) the sale,
transfer, assignment or other disposition of any securities or rights
convertible into or exchangeable for Class C Preferred Stock), whether voluntary
or involuntary, whether of record or Beneficial Ownership, and whether by
operation of law or otherwise (including, but not limited to, any transfer of an
interest in other entities that results in a change in the Beneficial Ownership
of shares of Class C Preferred Stock). The term "TRANSFERS" and "TRANSFERRED"
shall have correlative meanings.
"TRANSFER AGENT" means such transfer agent as may be designated by the Board
of Directors or their designee as the transfer agent for the Class C Preferred
Stock; provided, that if the Corporation has not designated a transfer agent
then the Corporation shall act as the transfer agent for the Class C Preferred
Stock.
"TRUST" shall mean the trust created pursuant to Section 10.3 of this
Article.
"TRUSTEE" shall mean the Person unaffiliated with either the Corporation or
the Prohibited Transferee that is appointed by the Corporation to serve as
trustee of the Trust.
"VOTING PREFERRED STOCK" shall have the meaning set forth in Section 8 of
this Article.
3. DIVIDENDS.
(a) The holders of Class C Preferred Stock shall be entitled to
receive, when and as declared by the Board of Directors out of funds legally
available for that purpose, cumulative dividends payable in cash in an amount
per share of Class C Preferred Stock equal to $2.25 per annum. Such dividends
shall be cumulative from the Issue Date, whether or not in any Dividend Period
or Periods such dividends shall be declared or there shall be funds of the
Corporation legally available for the payment of such dividends, and shall be
payable quarterly in arrears on each Dividend Payment Date, commencing on April
15, 1998. Each such dividend shall be payable in arrears to the holders of
record of the Class C Preferred Stock, as they appear on the stock records of
the Corporation at the close of business on the January 1, April 1, July 1 or
October 1, as the case may be, immediately preceding such Dividend Payment Date.
Accumulated, accrued and unpaid dividends for any past Dividend Periods may be
declared and paid at any time, without reference to any regular Dividend Payment
Date, to holders of record on such date, which date shall not precede by more
than 45 days the payment date thereof, as may be fixed by the Board of
Directors.
(b) The amount of dividends payable per share of Class C Preferred
Stock for the Initial Dividend Period, or any other period shorter than a full
Dividend Period, shall be computed ratably on the basis of twelve 30day months
and a 360day
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year. Holders of Class C Preferred Stock shall not be entitled to any dividends,
whether payable in cash, property or stock, in excess of cumulative dividends,
as herein provided, on the Class C Preferred Stock. No interest, or sum of money
in lieu of interest, shall be payable in respect of any dividend payment or
payments on the Class C Preferred Stock that may be in arrears.
(c) So long as any of the shares of Class C Preferred Stock are
outstanding, except as described in the immediately following sentence, no
dividends shall be declared or paid or set apart for payment by the Corporation
and no other distribution of cash or other property shall be declared or made
directly or indirectly by the Corporation with respect to any class or series of
Parity Stock for any period unless dividends equal to the full amount of
accumulated, accrued and unpaid dividends 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 on the Class C Preferred
Stock for all Dividend Periods terminating on or prior to the Dividend Payment
Date with respect to such class or series of Parity Stock. When dividends are
not paid in full or a sum sufficient for such payment is not set apart, as
aforesaid, all dividends declared upon the Class C Preferred Stock and all
dividends declared upon any other class or series of Parity Stock shall be
declared ratably in proportion to the respective amounts of dividends
accumulated, accrued and unpaid on the Class C Preferred Stock and accumulated,
accrued and unpaid on such Parity Stock.
(d) So long as any of the shares of Class C Preferred Stock are
outstanding, no dividends (other than dividends or distributions paid in shares
of, or options, warrants or rights to subscribe for or purchase shares of,
Junior Stock) shall be declared or paid or set apart for payment by the
Corporation and no other distribution of cash or other property shall be
declared or made, directly or indirectly, by the Corporation with respect to any
shares of Junior Stock, nor shall any shares of Junior Stock be redeemed,
purchased or otherwise acquired (other than a redemption, purchase or other
acquisition of Common Stock made for purposes of an employee incentive or
benefit plan of the Corporation or any subsidiary) for any consideration (or any
moneys be paid to or made available for a sinking fund for the redemption of any
shares of any such stock), directly or indirectly, by the Corporation (except by
conversion into or exchange for shares of, or options, warrants or rights to
subscribe for or purchase shares of, Junior Stock), nor shall any other cash or
other property otherwise be paid or distributed to or for the benefit of any
holder of shares of Junior Stock in respect thereof, directly or indirectly, by
the Corporation unless in each case the full cumulative dividends (including all
accumulated, accrued and unpaid dividends) on all outstanding shares of Class C
Preferred Stock shall have been paid or such dividends have been declared and
set apart for payment for all past Dividend Periods with respect to the Class C
Preferred Stock.
Notwithstanding the provisions of this Section 3(d), the Corporation
shall not be prohibited from (i) declaring or paying or setting apart for
payment any dividend or distribution on any shares of Parity Stock or (ii) or
redeeming, purchasing or otherwise acquiring any Parity Stock, in each case, if
such declaration, payment, redemption, purchase or other acquisition is
necessary in order to maintain the continued qualification of the Corporation as
a REIT under Section 856 of the Code.
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4. LIQUIDATION PREFERENCE.
(a) In the event of any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, before any payment or
distribution by the Corporation (whether of capital or surplus) shall be made to
or set apart for the holders of Junior Stock, the holders of shares of Class C
Preferred Stock shall be entitled to receive TwentyFive Dollars ($25) per share
of Class C Preferred Stock (the "Liquidation Preference"), plus an amount equal
to all dividends (whether or not earned or declared) accumulated, accrued and
unpaid thereon to the date of final distribution to such holders; but such
holders shall not be entitled to any further payment. Until the holders of the
Class C Preferred Stock have been paid the Liquidation Preference in full, plus
an amount equal to all dividends (whether or not earned or declared)
accumulated, accrued and unpaid thereon to the date of final distribution to
such holders, no payment will be made to any holder of Junior Stock upon the
liquidation, dissolution or winding up of the Corporation. If, upon any
liquidation, dissolution or winding up of the Corporation, the assets of the
Corporation, or proceeds thereof, distributable among the holders of Class C
Preferred Stock shall be insufficient to pay in full the preferential amount
aforesaid and liquidating payments on any other shares of any class or series of
Parity Stock, then such assets, or the proceeds thereof, shall be distributed
among the holders of Class C Preferred Stock and any such other Parity Stock
ratably in the same proportion as the respective amounts that would be payable
on such Class C Preferred Stock and any such other Parity Stock if all amounts
payable thereon were paid in full. For the purposes of this Section 4, (i) a
consolidation or merger of the Corporation with one or more corporations, (ii) a
sale or transfer of all or substantially all of the Corporation's assets, or
(iii) a statutory share exchange shall not be deemed to be a liquidation,
dissolution or winding up, voluntary or involuntary, of the Corporation.
(b) Upon any liquidation, dissolution or winding up of the Corporation,
after payment shall have been made in full to the holders of Class C Preferred
Stock and any Parity Stock, as provided in this Section 4, any other series or
class or classes of Junior Stock shall, subject to the respective terms thereof,
be entitled to receive any and all assets remaining to be paid or distributed,
and the holders of the Class C Preferred Stock and any Parity Stock shall not be
entitled to share therein.
5. REDEMPTION AT THE OPTION OF THE CORPORATION.
(a) Shares of Class C Preferred Stock shall not be redeemable by the
Corporation prior to December 23, 2002(2) except as set forth in Section 10.2 of
this Article. On and after December 23, 2002(3), the Corporation, at its option,
may redeem shares of Class C Preferred Stock, in whole or from time to time in
part, at a redemption price payable in cash equal to 100% of the Liquidation
Preference thereof, plus all accrued and unpaid dividends to the date fixed for
redemption (the "Redemption Date"). In connection with any redemption pursuant
to this Section 5(a), the redemption price of the Class C Preferred Stock (other
than any portion thereof consisting of accrued and unpaid dividends) shall be
payable solely with the proceeds from the sale by the Corporation or AIMCO
Properties, L.P., a Delaware limited partnership (the "Operating Partnership")
of other capital shares of the Corporation or the Operating Partnership (whether
or not such sale occurs concurrently with such redemption). For purposes of the
preceding sentence, 'capital shares' means any common stock, preferred stock,
depositary shares, partnership or other interests, participations or other
ownership interests (however designated) and any rights (other than debt
securities convertible into or exchangeable at the option of the holder for
equity securities (unless and to the extent such debt securities are
subsequently converted into capital shares)) or options to purchase any of the
foregoing of or in the Corporation or the Operating Partnership.
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(b) The Redemption Date shall be selected by the Corporation, shall be
specified in the notice of redemption and shall be not less than 30 days nor
more than 60 days after the date notice of redemption is sent by the
Corporation.
(c) If full cumulative dividends on all outstanding shares of Class C
Preferred Stock have not been paid or declared and set apart for payment, no
shares of Class C Preferred Stock may be redeemed unless all outstanding shares
of Class C Preferred Stock are simultaneously redeemed and neither the
Corporation nor any affiliate of the Corporation may purchase or acquire shares
of Class C Preferred Stock, otherwise than pursuant to a purchase or exchange
offer made on the same terms to all holders of shares of Class C Preferred
Stock.
(d) If the Corporation shall redeem shares of Class C Preferred Stock
pursuant to paragraph (a) of this Section 5, notice of such redemption shall be
given to each holder of record of the shares to be redeemed. Such notice shall
be provided by first class mail, postage prepaid, at such holder's address as
the same appears on the stock records of the Corporation.
Neither the failure to mail any notice required by this paragraph (d), nor any
defect therein or in the mailing thereof to any particular holder, shall affect
the sufficiency of the notice or the validity of the proceedings for redemption
with respect to the other holders. Any notice which was mailed in the manner
herein provided shall be conclusively presumed to have been duly given on the
date mailed whether or not the holder receives the notice. Each such notice
shall state, as appropriate: (1) the Redemption Date; (2) the number of shares
of Class C Preferred Stock to be redeemed and, if fewer than all such shares
held by such holder are to be redeemed, the number of such shares to be redeemed
from such holder; and (3) the place or places at which certificates for such
shares are to be surrendered for cash. Notice having been mailed as aforesaid,
from and after the Redemption Date (unless the Corporation shall fail to make
available the amount of cash necessary to effect such redemption), (i) except as
otherwise provided herein, dividends on the shares of Class C Preferred Stock so
called for redemption shall cease to accumulate or accrue on the shares of Class
C Preferred Stock called for redemption (except that, in the case of a
Redemption Date after a dividend record date and prior to the related Dividend
Payment Date, holders of Class C Preferred Stock on the dividend record date
will be entitled on such Dividend Payment Date to receive the dividend payable
on such shares), (ii) said shares shall no longer be deemed to be outstanding,
and (iii) all rights of the holders thereof as holders of Class C Preferred
Stock of the Corporation shall cease (except the rights to receive the cash
payable upon such redemption, without interest thereon, upon surrender and
endorsement of their certificates if so required and to receive any dividends
payable thereon). The Corporation's obligation to make available the redemption
price in accordance with the preceding sentence shall be deemed fulfilled if, on
or before the Call Date, the Corporation shall deposit with a bank or trust
company (which may be an affiliate of the Corporation) that has, or is an
affiliate of a bank or trust company that has, a capital and surplus of at least
$50,000,000, such amount of cash as is necessary for such redemption, in trust,
with irrevocable instructions that such cash be applied to the redemption of the
shares of Class C Preferred Stock so called for redemption. No interest shall
accrue for the benefit of the holders of shares of Class C Preferred Stock to be
redeemed on any cash so set aside by the Corporation. Subject to applicable
escheat laws, any such cash unclaimed at the end of two years from the
Redemption Date shall revert to the general funds of the Corporation, after
which reversion the holders of shares of Class C Preferred Stock so called for
redemption shall look only to the general funds of the Corporation for the
payment of such cash.
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As promptly as practicable after the surrender in accordance with such
notice of the certificates for any such shares of Class C Preferred Stock to be
so redeemed (properly endorsed or assigned for transfer, if the Corporation
shall so require and the notice shall so state), such certificates shall be
exchanged for cash (without interest thereon) for which such shares have been
redeemed in accordance with such notice. If fewer than all the outstanding
shares of Class C Preferred Stock are to be redeemed, shares to be redeemed
shall be selected by the Corporation from outstanding shares of Class C
Preferred Stock not previously called for redemption by lot or, with respect to
the number of shares of Class C Preferred Stock held of record by each holder of
such shares, pro rata (as nearly as may be) or by any other method as may be
determined by the Board of Directors in its discretion to be equitable. If fewer
than all the shares of Class C Preferred Stock represented by any certificate
are redeemed, then a new certificate representing the unredeemed shares shall be
issued without cost to the holders thereof.
6. STATUS OF REACQUIRED STOCK.
All shares of Class C Preferred Stock which shall have been issued and
reacquired in any manner by the Corporation shall be returned to the status of
authorized, but unissued shares of Class C Preferred Stock.
7. RANKING.
Any class or series of capital stock of the Corporation shall be deemed to
rank:
(a) prior or senior to the Class C Preferred Stock, as to the payment
of dividends and as to distribution of assets upon liquidation, dissolution or
winding up, if the holders of such class or series shall be entitled to the
receipt of dividends or of amounts distributable upon liquidation, dissolution
or winding up, as the case may be, in preference or priority to the holders of
Class C Preferred Stock ("Senior Stock");
(b) on a parity with the Class C Preferred Stock, as to the payment of
dividends and as to distribution of assets upon liquidation, dissolution or
winding up, whether or not the dividend rates, dividend payment dates or
redemption or liquidation prices per share thereof be different from those of
the Class C Preferred Stock, if the holders of such class of stock or series and
the Class C Preferred Stock shall be entitled to the receipt of dividends and of
amounts distributable upon liquidation, dissolution or winding up in proportion
to their respective amounts of accrued and unpaid dividends per share or
liquidation preferences, without preference or priority one over the other
("Parity Stock"); and
(c) junior to the Class C Preferred Stock, as to the payment of
dividends or as to the distribution of assets upon liquidation, dissolution or
winding up, if such stock or series shall be Common Stock or if the holders of
Class C Preferred Stock shall be entitled to receipt of dividends or of amounts
distributable upon liquidation, dissolution or winding up, as the case may be,
in preference or priority to the holders of shares of such class or series
("Junior Stock").
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8. VOTING.
(a) If and whenever six quarterly dividends (whether or not
consecutive) payable on the Class C Preferred Stock or any series or class of
Parity Stock shall be in arrears (which shall, with respect to any such
quarterly dividend, mean that any such dividend has not been paid in full),
whether or not earned or declared, the number of directors then constituting the
Board of Directors shall be increased by two (if not already increased by reason
of similar types of provisions with respect to shares of Parity Stock of any
other class or series which is entitled to similar voting rights (the "Voting
Preferred Stock")) and the holders of shares of Class C Preferred Stock,
together with the holders of shares of all other Voting Preferred Stock then
entitled to exercise similar voting rights, voting as a single class regardless
of series, shall be entitled to elect the two additional directors to serve on
the Board of Directors at any annual meeting of stockholders or special meeting
held in place thereof, or at a special meeting of the holders of the Class C
Preferred Stock and the Voting Preferred Stock called as hereinafter provided.
Whenever all arrears in dividends on the Class C Preferred Stock and the Voting
Preferred Stock then outstanding shall have been paid and dividends thereon for
the current quarterly dividend period shall have been paid or declared and set
apart for payment, then the right of the holders of the Class C Preferred Stock
and the Voting Preferred Stock to elect such additional two directors shall
cease (but subject always to the same provision for the vesting of such voting
rights in the case of any similar future arrearages), and the terms of office of
all Persons elected as directors by the holders of the Class C Preferred Stock
and the Voting Preferred Stock shall forthwith terminate and the number of
directors constituting the Board of Directors shall be reduced accordingly. At
any time after such voting power shall have been so vested in the holders of
Class C Preferred Stock and the Voting Preferred Stock, if applicable, the
Secretary of the Corporation may, and upon the written request of any holder of
Class C Preferred Stock (addressed to the Secretary at the principal office of
the Corporation) shall, call a special meeting of the holders of the Class C
Preferred Stock and of the Voting Preferred Stock for the election of the two
directors to be elected by them as herein provided, such call to be made by
notice similar to that provided in the Bylaws of the Corporation for a special
meeting of the stockholders or as required by law. If any such special meeting
required to be called as above provided shall not be called by the Secretary
within 20 days after receipt of any such request, then any holder of Class C
Preferred Stock may call such meeting, upon the notice above provided, and for
that purpose shall have access to the stock books of the Corporation. The
directors elected at any such special meeting shall hold office until the next
annual meeting of the stockholders or special meeting held in lieu thereof if
such office shall not have previously terminated as above provided. If any
vacancy shall occur among the directors elected by the holders of the Class C
Preferred Stock and the Voting Preferred Stock, a successor shall be elected by
the Board of Directors, upon the nomination of the thenremaining director
elected by the holders of the Class C Preferred Stock and the Voting Preferred
Stock or the successor of such remaining director, to serve until the next
annual meeting of the stockholders or special meeting held in place thereof if
such office shall not have previously terminated as provided above.
(b) So long as any shares of Class C Preferred Stock are outstanding,
in addition to any other vote or consent of stockholders required by law or by
the Charter of the Corporation, the affirmative vote of at least 662/3% of the
votes entitled to be cast by the holders of the Class C Preferred Stock voting
as a single class
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with the holders of all other classes or series of Preferred Stock entitled to
vote on such matters, given in Person or by proxy, either in writing without a
meeting or by vote at any meeting called for the purpose, shall be necessary for
effecting or validating:
(i) Any amendment, alteration or repeal of any of the provisions
of these Articles Supplementary, the Charter or the ByLaws of the Corporation
that materially adversely affects the voting powers, rights or preferences of
the holders of the Class C Preferred Stock; provided, however, that the
amendment of the provisions of the Charter so as to authorize or create, or to
increase the authorized amount of, or issue any Junior Stock or any shares of
any class of Parity Stock shall not be deemed to materially adversely affect the
voting powers, rights or preferences of the holders of Class C Preferred Stock;
or
(ii) The authorization, creation of, the increase in the
authorized amount of, or issuance of any shares of any class of Senior Stock or
any security convertible into shares of any class of Senior Stock (whether or
not such class of Senior Stock is currently authorized); provided, however, that
no such vote of the holders of Class C Preferred Stock shall be required if, at
or prior to the time when such amendment, alteration or repeal is to take
effect, or when the issuance of any such prior shares or convertible security is
to be made, as the case may be, provision is made for the redemption of all
shares of Class C Preferred Stock at the time outstanding to the extent such
redemption is authorized by Section 5 of this Article.
For purposes of the foregoing provisions and all other voting rights under
these Articles Supplementary, each share of Class C Preferred Stock shall have
one (1) vote per share, except that when any other class or series of preferred
stock shall have the right to vote with the Class C Preferred Stock as a single
class on any matter, then the Class C Preferred Stock and such other class or
series shall have with respect to such matters one quarter of one (.25) vote per
$25 of stated liquidation preference. Except as otherwise required by applicable
law or as set forth herein, the Class C Preferred Stock shall not have any
relative, participating, optional or other special voting rights and powers
other than as set forth herein, and the consent of the holders thereof shall not
be required for the taking of any corporate action.
9. RECORD HOLDERS.
The Corporation and the Transfer Agent may deem and treat the record holder
of any share of Class C Preferred Stock as the true and lawful owner thereof for
all purposes, and neither the Corporation nor the Transfer Agent shall be
affected by any notice to the contrary.
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10.1 RESTRICTIONS ON OWNERSHIP AND TRANSFERS.
(A) LIMITATION ON BENEFICIAL OWNERSHIP. Except as provided in Section 10.8,
from and after the Issue Date, no Person (other than the Initial Holder or a
Look-Through Entity) shall Beneficially Own shares of Class C Preferred Stock in
excess of the Ownership Limit, the Initial Holder shall not Beneficially Own
shares of Class C Preferred Stock in excess of the Initial Holder Limit and no
Look-Through Entity shall Beneficially Own shares of Class C Preferred Stock in
excess of the Look-Through Ownership Limit.
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(B) TRANSFERS IN EXCESS OF OWNERSHIP LIMIT. Except as provided in
Section 10.8, from and after the Issue Date (and subject to Section 10.12), any
Transfer (whether or not such Transfer is the result of transactions entered
into through the facilities of the NYSE or other securities exchange or an
automated interdealer quotation system) that, if effective, would result in any
Person (other than the Initial Holder or a Look-Through Entity) Beneficially
Owning shares of Class C Preferred Stock in excess of the Ownership Limit shall
be void AB INITIO as to the Transfer of such shares of Class C Preferred Stock
that would be otherwise Beneficially Owned by such Person in excess of the
Ownership Limit, and the intended transferee shall acquire no rights in such
shares of Class C Preferred Stock.
(C) TRANSFERS IN EXCESS OF INITIAL HOLDER LIMIT. Except as provided in
Section 10.8, from and after the Issue Date (and subject to Section 10.12), any
Transfer (whether or not such Transfer is the result of transactions entered
into through the facilities of the NYSE or other securities exchange or an
automated interdealer quotation system) that, if effective, would result in the
Initial Holder Beneficially Owning shares of Class C Preferred Stock in excess
of the Initial Holder Limit shall be void AB INITIO as to the Transfer of such
shares of Class C Preferred Stock that would be otherwise Beneficially Owned by
the Initial Holder in excess of the Initial Holder limit, and the Initial Holder
shall acquire no rights in such shares of Class C Preferred Stock.
(D) TRANSFERS IN EXCESS OF LOOK-THROUGH OWNERSHIP LIMIT. Except as
provided in Section 10.8 from and after the Issue Date (and subject to Section
10.12), any Transfer (whether or not such Transfer is the result of transactions
entered into through the facilities of the NYSE or other securities exchange or
an automated interdealer quotation system) that, if effective, would result in
any Look-Through Entity Beneficially Owning shares of Class C Preferred Stock in
excess of the Look-Through Ownership limit shall be void AB INITIO as to the
Transfer of such shares of Class C Preferred Stock that would be otherwise
Beneficially Owned by such Look-Through Entity in excess of the Look-Through
Ownership Limit and such Look-Through Entity shall acquire no rights in such
shares of Class C Preferred Stock.
(E) TRANSFERS RESULTING IN "CLOSELY HELD" STATUS. From and after the
Issue Date, any Transfer that, if effective would result in the Corporation
being "closely held" within the meaning of Section 856(h) of the Code, or would
otherwise result in the Corporation failing to qualify as a REIT (including,
without limitation, a Transfer or other event that would result in the
Corporation owning (directly or constructively) an interest in a tenant that is
described in Section 856(d)(2)(B) of the Code if the income derived by the
Corporation from such tenant would cause the Corporation to fail to satisfy any
of the gross income requirements of Section 856(c) of the Code) shall be void AB
INITIO as to the Transfer of shares of Class C Preferred Stock that would cause
the Corporation (i) to be "closely held" within the meaning of Section 856(h) of
the Code or (ii) otherwise fail to qualify as a REIT, as the case may be, and
the intended transferee shall acquire no rights in such shares of Class C
Preferred Stock.
(F) SEVERABILITY ON VOID TRANSACTIONS. A Transfer of a share of Class
C Preferred Stock that is null and void under Sections 10.1(B), (C), (D), or (E)
of this Article because it would, if effective, result in (i) the ownership of
Class C Preferred Stock in excess of the Initial Holder Limit, the Ownership
Limit, or the Look-Through Ownership Limit, (ii) the Corporation being "closely
held" within the
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meaning of Section 856(h) of the Code or (iii) the Corporation otherwise failing
to qualify as a REIT, shall not adversely affect the validity of the Transfer of
any other share of Class C Preferred Stock in the same or any other related
transaction.
10.2 REMEDIES FOR BREACH. If the Board of Directors or a committee thereof
shall at any time determine in good faith that a Transfer or other event has
taken place in violation of Section 10.1 of this Article or that a Person
intends to acquire or has attempted to acquire Beneficial Ownership of any
shares of Class C Preferred Stock in violation of Section 10.1 of this Article
(whether or not such violation is intended), the Board of Directors or a
committee thereof shall be empowered to take any action as it deems advisable to
refuse to give effect to or to prevent such Transfer or other event, including,
but not limited to, refusing to give effect to such Transfer or other event on
the books of the Corporation, causing the Corporation to redeem such shares at
the then current Market Price and upon such terms and conditions as may be
specified by the Board of Directors in its sole discretion (including, but not
limited to, by means of the issuance of longterm indebtedness for the purpose of
such redemption), demanding the repayment of any distributions received in
respect of shares of Class C Preferred Stock acquired in violation of Section
10.1 of this Article or instituting proceedings to enjoin such Transfer or to
rescind such Transfer or attempted Transfer; PROVIDED, HOWEVER, that any
Transfers or attempted Transfers (or in the case of events other than a
Transfer, Beneficial Ownership) in violation of Section 10.1 of this Article,
regardless of any action (or nonaction) by the Board of Directors or such
committee, (a) shall be void AB INITIO or (b) shall automatically result in the
transfer described in Section 10.3 of this Article; PROVIDED, FURTHER, that the
provisions of this Section 10.2 shall be subject to the provisions of Section
10.12 of this Article; PROVIDED, FURTHER, that neither the Board of Directors
nor any committee thereof may exercise such authority in a manner that
interferes with any ownership or transfer of Class C Preferred Stock that is
expressly authorized pursuant to Section 10.8(d) of this Article.
10.3. TRANSFER IN TRUST.
(A) ESTABLISHMENT OF TRUST. If, notwithstanding the other provisions
contained in this Article, at any time after the Issue Date there is a purported
Transfer (an "EXCESS TRANSFER") (whether or not such Transfer is the result of
transactions entered into through the facilities of the NYSE or other securities
exchange or an automated interdealer quotation system) or other change in the
capital structure of the Corporation (including, but not limited to, any
redemption of Preferred Stock) or other event (including, but not limited to,
any acquisition of any share of Equity Stock) such that (a) any Person (other
than the Initial Holder or a Look-Through Entity) would Beneficially Own shares
of Class C Preferred Stock in excess of the Ownership Limit, or (b) the Initial
Holder would Beneficially Own shares of Class C Preferred Stock in excess of the
Initial Holder Limit, or (c) any Person that is a Look-Through Entity would
Beneficially Own shares of Class C Preferred Stock in excess of the Look-Through
Ownership Limit (in any such event, the Person, Initial Holder or Look-Through
Entity that would Beneficially Own shares of Class C Preferred Stock in excess
of the Ownership Limit, the Initial Holder Limit or the Look-Through Entity
Limit, respectively, is referred to as a "PROHIBITED TRANSFEREE"), then, except
as otherwise provided in Section 10.8 of this Article, such shares of Class C
Preferred Stock in excess of the Ownership Limit, the Initial Holder Limit or
the Look-Through Ownership Limit, as the case may be, (rounded up to the nearest
whole share) shall be automatically transferred to a Trustee in his capacity as
trustee of a Trust for the
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exclusive benefit of one or more Charitable Beneficiaries. Such transfer to the
Trustee shall be deemed to be effective as of the close of business on the
business day prior to the Excess Transfer, change in capital structure or
another event giving rise to a potential violation of the Ownership Limit, the
Initial Holder Limit or the Look-Through Entity Ownership Limit.
(B) APPOINTMENT OF TRUSTEE. The Trustee shall be appointed by the
Corporation and shall be a Person unaffiliated with either the Corporation or
any Prohibited Transferee. The Trustee may be an individual or a bank or trust
company duly licensed to conduct a trust business.
(C) STATUS OF SHARES HELD BY THE TRUSTEE. Shares of Class C Preferred
Stock held by the Trustee shall be issued and outstanding shares of capital
stock of the Corporation. Except to the extent provided in Section 10.3(E), the
Prohibited Transferee shall have no rights in the Class C Preferred Stock held
by the Trustee, and the Prohibited Transferee shall not benefit economically
from ownership of any shares held in trust by the Trustee, shall have no rights
to dividends and shall not possess any rights to vote or other rights
attributable to the shares held in the Trust.
(D) DIVIDEND AND VOTING RIGHTS. The Trustee shall have all voting
rights and rights to dividends with respect to shares of Class C Preferred Stock
held in the Trust, which rights shall be exercised for the benefit of the
Charitable Beneficiary. Any dividend or distribution paid prior to the discovery
by the Corporation that the shares of Class C Preferred Stock have been
transferred to the Trustee shall be repaid to the Corporation upon demand, and
any dividend or distribution declared but unpaid shall be rescinded as void AB
INITIO with respect to such shares of Class C Preferred Stock. Any dividends or
distributions so disgorged or rescinded shall be paid over to the Trustee and
held in trust for the Charitable Beneficiary. Any vote cast by a Prohibited
Transferee prior to the discovery by the Corporation that the shares of Class C
Preferred Stock have been transferred to the Trustee will be rescinded as void
AB INITIO and shall be recast in accordance with the desires of the Trustee
acting for the benefit of the Charitable Beneficiary. The owner of the shares at
the time of the Excess Transfer, change in capital structure or other event
giving rise to a potential violation of the Ownership Limit, Initial Holder
Limit or Look-Through Entity Ownership Limit shall be deemed to have given an
irrevocable proxy to the Trustee to vote the shares of Class C Preferred Stock
for the benefit of the Charitable Beneficiary.
(E) RESTRICTIONS ON TRANSFER. The Trustee of the Trust may sell the
shares held in the Trust to a person, designated by the Trustee, whose ownership
of the shares will not violate the Ownership Restrictions. If such a sale is
made, the interest of the Charitable Beneficiary shall terminate and proceeds of
the sale shall be payable to the Prohibited Transferee and to the Charitable
Beneficiary as provided in this Section 10.3(E). The Prohibited Transferee shall
receive the lesser of (1) the price paid by the Prohibited Transferee for the
shares or, if the Prohibited Transferee did not give value for the shares
(through a gift, devise or other transaction), the Market Price of the shares on
the day of the event causing the shares to be held in the Trust and (2) the
price per share received by the Trustee from the sale or other disposition of
the shares held in the Trust. Any proceeds in excess of the amount payable to
the Prohibited Transferee shall be payable to the Charitable Beneficiary. If any
of the transfer restrictions set forth in this Section 10.3(E) or any
application thereof is determined in a final judgment to be void, invalid or
unenforceable by any court
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having jurisdiction over the issue, the Prohibited Transferee may be deemed, at
the option of the Corporation, to have acted as the agent of the Corporation in
acquiring the Class C Preferred Stock as to which such restrictions would, by
their terms, apply, and to hold such Class C Preferred Stock on behalf of the
Corporation.
(F) PURCHASE RIGHT IN STOCK TRANSFERRED TO THE TRUSTEE. Shares of
Class C Preferred Stock transferred to the Trustee shall be deemed to have been
offered for sale to the Corporation, or its designee, at a price per share equal
to the lesser of (i) the price per share in the transaction that resulted in
such transfer to the Trust (or, in the case of a devise or gift, the Market
Price at the time of such devise or gift) and (ii) the Market Price on the date
the Corporation, or its designee, accepts such offer. The Corporation shall have
the right to accept such offer for a period of 90 days after the later of (i)
the date of the Excess Transfer or other event resulting in a transfer to the
Trust and (ii) the date that the Board of Directors determines in good faith
that an Excess Transfer or other event occurred.
(G) DESIGNATION OF CHARITABLE BENEFICIARIES. By written notice to the
Trustee, the Corporation shall designate one or more nonprofit organizations to
be the Charitable Beneficiary of the interest in the Trust relating to such
Prohibited Transferee if (i) the shares of Class C Preferred Stock held in the
Trust would not violate the Ownership Restrictions in the hands of such
Charitable Beneficiary and (ii) each Charitable Beneficiary is an organization
described in Sections 170(b)(1)(A), 170(c)(2) and 501(c)(3) of the Code.
10.4 NOTICE OF RESTRICTED TRANSFER. Any Person that acquires or attempts to
acquire shares of Class C Preferred Stock in violation of Section 10.1 of this
Article, or any Person that is a Prohibited Transferee such that stock is
transferred to the Trustee under Section 10.3 of this Article, shall immediately
give written notice to the Corporation of such event and shall provide to the
Corporation such other information as the Corporation may request in order to
determine the effect, if any, of such Transfer or attempted Transfer or other
event on the Corporation's status as a REIT. Failure to give such notice shall
not limit the rights and remedies of the Board of Directors provided herein in
any way.
10.5 OWNERS REQUIRED TO PROVIDE INFORMATION. From and after the Issue Date
certain record and Beneficial Owners and transferees of shares of Class C
Preferred Stock will be required to provide certain information as set out
below.
(A) ANNUAL DISCLOSURE. Every record and Beneficial Owner of more than
5% (or such other percentage between 0.5% and 5%, as provided in the applicable
regulations adopted under the Code) of the number of Outstanding shares of Class
C Preferred Stock shall, within 30 days after January 1 of each year, give
written notice to the Corporation stating the name and address of such record or
Beneficial Owner, the number of shares of Class C Preferred Stock Beneficially
Owned, and a full description of how such shares are held. Each such record or
Beneficial Owner of Class C Preferred Stock shall, upon demand by the
Corporation, disclose to the Corporation in writing such additional information
with respect to the Beneficial Ownership of the Class C Preferred Stock as the
Board of Directors, in its sole discretion, deems appropriate or necessary to
(i) comply with the provisions of the Code regarding the qualification of the
Corporation as a REIT under the Code and (ii) ensure compliance with the
Ownership Limit, the Initial Holder Limit or the Look-Through Ownership Limit,
as applicable. Each stockholder of record, including
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<PAGE> 76
without limitation any Person that holds shares of Class C Preferred Stock on
behalf of a Beneficial Owner, shall take all reasonable steps to obtain the
written notice described in this Section 10.5 from the Beneficial Owner.
(B) DISCLOSURE AT THE REQUEST OF THE CORPORATION. Any Person that is a
Beneficial Owner of shares of Class C Preferred Stock and any Person (including
the stockholder of record) that is holding shares of Class C Preferred Stock for
a Beneficial Owner, and any proposed transferee of shares, shall provide such
information as the Corporation, in its sole discretion, may request in order to
determine the Corporation's status as a REIT, to comply with the requirements of
any taxing authority or other governmental agency, to determine any such
compliance or to ensure compliance with the Ownership Limit, the Initial Holder
Limit and the Look-Through Ownership Limit, and shall provide a statement or
affidavit to the Corporation setting forth the number of shares of Class C
Preferred Stock already Beneficially Owned by such stockholder or proposed
transferee and any related persons specified, which statement or affidavit shall
be in the form prescribed by the Corporation for that purpose.
10.6 REMEDIES NOT LIMITED. Nothing contained in this Article shall limit the
authority of the Board of Directors to take such other action as it deems
necessary or advisable (subject to the provisions of Section 10.12 of this
Article) (i) to protect the Corporation and the interests of its stockholders in
the preservation of the Corporation's status as a REIT and (ii) to insure
compliance with the Ownership Limit, the Initial Holder Limit and the
Look-Through Ownership Limit.
10.7 AMBIGUITY. In the case of an ambiguity in the application of any of the
provisions of Section 10 of this Article, or in the case of an ambiguity in any
definition contained in Section 10 of this Article, the Board of Directors shall
have the power to determine the application of the provisions of this Article
with respect to any situation based on its reasonable belief, understanding or
knowledge of the circumstances.
10.8 EXCEPTIONS. The following exceptions shall apply or may be established
with respect to the limitations of Section 10.1 of this Article.
(A) WAIVER OF OWNERSHIP LIMIT. The Board of Directors, upon receipt of a
ruling from the Internal Revenue Service or an opinion of tax counsel or other
evidence or undertaking acceptable to it, may waive the application, in whole or
in part, of the Ownership Limit to a Person subject to the Ownership Limit, if
such person is not an individual for purposes of Section 542(a) of the Code and
is a corporation, partnership, estate or trust. In connection with any such
exemption, the Board of Directors may require such representations and
undertakings from such Person and may impose such other conditions as the Board
deems necessary, in its sole discretion, to determine the effect, if any, of the
proposed Transfer on the Corporation's status as a REIT.
(B) PLEDGE BY INITIAL HOLDER. Notwithstanding any other provision of this
Article, the pledge by the Initial Holder of all or any portion of the Class C
Preferred Stock directly owned at any time or from time to time shall not
constitute a violation of Section 10.1 of this Article and the pledgee shall not
be subject to the Ownership Limit with respect to the Class C Preferred Stock so
pledged to it either as a result of the pledge or upon foreclosure.
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<PAGE> 77
(C) UNDERWRITERS. For a period of 270 days following the purchase of
Class C Preferred Stock by an underwriter that (i) is a corporation or a
partnership and (ii) participates in an offering of the Class C Preferred Stock,
such underwriter shall not be subject to the Ownership Limit with respect to the
Class C Preferred Stock purchased by it as a part of or in connection with such
offering and with respect to any Class C Preferred Stock purchased in connection
with market making activities.
10.9 LEGEND. Each certificate for Class C Preferred Stock shall bear the
following legend:
"The shares of Class C Cumulative Preferred Stock represented by
this certificate are subject to restrictions on transfer. No person may
Beneficially Own shares of Class C Cumulative Preferred Stock in excess of
the Ownership Restrictions, as applicable, with certain further restrictions
and exceptions set forth in the Corporation's Charter (including the
Articles Supplementary setting forth the terms of the Class C Cumulative
Preferred Stock). Any Person that attempts to Beneficially Own shares of
Class C Cumulative Preferred Stock in excess of the applicable limitation
must immediately notify the Corporation. All capitalized terms in this
legend have the meanings ascribed to such terms in the Corporation's Charter
(including the Articles Supplementary setting forth the terms of the Class C
Cumulative Preferred Stock), as the same may be amended from time to time, a
copy of which, including the restrictions on transfer, will be sent without
charge to each stockholder that so requests. If the restrictions on transfer
are violated, the shares of Class C Cumulative Preferred Stock represented
hereby will be either (i) void in accordance with the Certificate or (ii)
automatically transferred to a Trustee of a Trust for the benefit of one or
more Charitable Beneficiaries."
10.10 SEVERABILITY. If any provision of this Article or any application of
any such provision is determined in a final and unappealable judgment to be
void, invalid or unenforceable by any Federal or state court having jurisdiction
over the issues, the validity and enforceability of the remaining provisions
shall not be affected and other applications of such provision shall be affected
only to the extent necessary to comply with the determination of such court.
10.11 BOARD OF DIRECTORS DISCRETION. Anything in this Article to the
contrary notwithstanding, the Board of Directors shall be entitled to take or
omit to take such actions as it in its discretion shall determine to be
advisable in order that the Corporation maintain its status as and continue to
qualify as a REIT, including, but not limited to, reducing the Ownership Limit,
the Initial Holder Limit and the Look-Through Ownership Limit in the event of a
change in law.
10.12 SETTLEMENT. Nothing in this Section 10 of this Article shall be
interpreted to preclude the settlement of any transaction entered into through
the facilities of the NYSE or other securities exchange or an automated
interdealer quotation system.
FOURTH: The terms of the Class C Cumulative Preferred Stock set forth in
Article Third hereof shall become Article XIV of the Charter.
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<PAGE> 78
IN WITNESS WHEREOF, the Corporation has caused these presents to be signed
in its name and on its behalf by its Chairman and witnessed by its Secretary on
December 19, 1997.
WITNESS: APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
/s/ Leeann Morein /s/ Terry Considine
- ----------------------- --------------------------
Leeann Morein, Terry Considine
Secretary Chairman
THE UNDERSIGNED, Chairman of APARTMENT INVESTMENT AND MANAGEMENT COMPANY,
who executed on behalf of the Corporation the Articles Supplementary of which
this Certificate is made a part, hereby acknowledges in the name and on behalf
of said Corporation the foregoing Articles Supplementary to be the corporate act
of said Corporation and hereby certifies that the matters and facts set forth
herein with respect to the authorization and approval thereof are true in all
material respects under the penalties of perjury.
/s/ Terry Considine
Terry Considine
-----------------------
Chairman
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<PAGE> 79
CERTIFICATE OF CORRECTION
TO
ARTICLES SUPPLEMENTARY
CLASS C CUMULATIVE PREFERRED STOCK
(PAR VALUE $.01 PER SHARE)
OF
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
(A MARYLAND CORPORATION)
APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation (the
"Corporation"), having its principal office in Baltimore City, Maryland, hereby
certifies to the State Department of Assessments and Taxation of Maryland that:
FIRST: Articles Supplementary, dated December, 1997, of the Corporation
relating to its Class C Cumulative Preferred Stock (par value $.01 per share)
were filed with the State Department of Assessments and Taxation of Maryland on
December 22, 1997, and said Articles Supplementary require correction as
permitted by Section 1-207 of the Corporations and Associations Article of the
Annotated Code of Maryland.
SECOND: ARTICLE FIRST of the Articles Supplementary as previously filed
and to be corrected hereby read as follows:
FIRST: Pursuant to authority expressly vested in the Board of
Directors of the Corporation by Section 1.2 of Article IV of the Charter of
the Corporation, the Board of Directors has duly divided and classified
2,300,000 authorized but unissued shares of the capital stock of the
Corporation into a class designated as Class C Cumulative Preferred Stock
and has provided for the issuance of such class.
THIRD: ARTICLE FIRST of the Articles Supplementary as corrected hereby is
as follows:
FIRST: Pursuant to authority expressly vested in the Board of
Directors of the Corporation by Section 1.2 of Article IV of the Charter of
the Corporation, the Board of Directors has duly divided and classified
2,760,000 authorized but unissued shares of the capital stock of the
Corporation into a class designated as Class C Cumulative Preferred Stock
and has provided for the issuance of such class.
FOURTH: The inaccuracy or defect in ARTICLE FIRST of the Articles
Supplementary as previously filed is that ARTICLE FIRST contained the wrong
number of shares classified as Class C Cumulative Preferred Stock.
<PAGE> 80
FIFTH: ARTICLE SECOND of the Articles Supplementary as previously filed
and to be corrected hereby reads as follows:
SECOND: The reclassification increases the number of shares
classified as Class C Cumulative Preferred Stock, par value $.01 per share,
from no shares immediately prior to the reclassification to 2,300,000 shares
immediately after the reclassification. The reclassification decreases the
number of shares classified as Preferred Stock, par value $.01 per share, from
9,250,000 shares immediately prior to the reclassification to 6,950,000
shares immediately after the reclassification. The number of shares classified
as Class C Cumulative Preferred Stock may be decreased pursuant to Section 6 of
Article Third of these Articles Supplementary upon reacquisition thereof in any
manner, or by retirement thereof, by the Corporation.
SIXTH: ARTICLE SECOND of the Articles Supplementary as corrected
hereby is as follows:
SECOND: The reclassification increases the number of shares
classified as Class C Cumulative Preferred Stock, par value $.01 per share,
from no shares immediately prior to the reclassification to 2,760,00 shares
immediately after the reclassification. The reclassification decreases the
number of shares classified as Preferred Stock, par value $.01 per share, from
9,250,000 shares immediately prior to the reclassification to 6,490,000 shares
immediately after the reclassification. The number of shares classified as
Class C Cumulative Preferred Stock may be decreases pursuant to Section 6 of
Article Third of these Articles Supplementary upon reacquisition thereof in any
manner, or by retirement thereof, by the Corporation.
SEVENTH: The inaccuracies or defects in ARTICLE SECOND of the Articles
Supplementary as previously filed are that ARTICLE SECOND contained the wrong
number of shares classified as Class C Cumulative Preferred Stock immediately
after the reclassification and the wrong number of shares classified as
Preferred Stock, par value $.01 per share, immediately after the
reclassification.
EIGHTH: Section 1 of ARTICLE THIRD of the Articles Supplementary as
previously filed and to be corrected hereby reads as follows:
1. Number of Shares and Designation.
This class of Preferred Stock shall be designated as Class C
Cumulative Preferred Stock (the "Class C Preferred Stock") and Two Million
Three Hundred Thousand (2,300,000) shall be the authorized number of shares of
such Class C Preferred Stock constituting such class.
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<PAGE> 81
NINTH: The first paragraph of Section 1 of ARTICLE THIRD of the Articles
Supplementary as corrected hereby is as follows:
1. Number of Shares and Designation.
This class of Preferred Stock shall be designated as Class C
Cumulative Preferred Stock (the "Class C Preferred Stock") and Two Million
Seven Hundred Sixty Thousand (2,760,000) shall be the authorized number of
shares of such Class C Preferred Stock constituting such class.
TENTH: The inaccuracy or defect in Section 1 of ARTICLE THIRD of the
Articles Supplementary as previously filed is that Section 1 of ARTICLE FIRST
contained the wrong number of shares classified as Class C Cumulative Preferred
Stock.
ELEVENTH: The definition of "Dividend Periods" contained in Section 2 of
ARTICLE THIRD of the Articles Supplementary as previously filed and to be
corrected hereby reads as follows:
"DIVIDEND PERIODS" shall mean the Initial Dividend Period and each
subsequent quarterly dividend period commencing on and including January
15, April 15, July 15 and October 15 of each year and ending on and
including the day preceding the first day of the next succeeding Dividend
Period, other than the Dividend Period during which any Class B Preferred
Stock shall be redeemed pursuant to Section 5 hereof, which shall end on
and include the Redemption Date with respect to the Class C Preferred Stock
being redeemed.
TWELFTH: The definition of "Dividend Periods" contained in Section 2 of
ARTICLE THIRD of the Articles Supplementary as corrected hereby is as follows:
"DIVIDEND PERIODS" shall mean the Initial Dividend Period and each
subsequent quarterly dividend period commencing on and including January
15, April 15, July 15 and October 15 of each year and ending on and
including the day preceding the first day of the next succeeding Dividend
Period, other than the Dividend Period during which any Class C Preferred
Stock shall be redeemed pursuant to Section 5 hereof, which shall end on
and include the Redemption Date with respect to the Class C Preferred Stock
being redeemed.
THIRTEENTH: The inaccuracy or defect in the definition of "Dividend
Periods" contained in Section 2 of ARTICLE THIRD of the Articles Supplementary
as previously filed is that the reference to "Class B Preferred Stock" in the
fifth line thereof should be to "Class C Preferred Stock."
FOURTEENTH: The definition of "Initial Holder Limit" contained in Section
2 of ARTICLE THIRD of the Articles Supplementary as previously filed and to be
corrected hereby reads as follows:
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<PAGE> 82
"INITIAL HOLDER LIMIT" shall mean a number of the Outstanding shares of
Class C Preferred Stock of the Corporation having an Aggregate Value not in
excess of the excess of (x) 15% of the Aggregate Value of all Outstanding
shares of Equity Stock over (y) the Aggregate Value of all shares of Equity
Stock other than Class B Preferred Stock that are Beneficially Owned by the
Initial Holder. From the Issue Date, the secretary of the Corporation, or
such other person as shall be designated by the Board of Directors, shall
upon request make available to the representative(s) of the Initial Holder
and the Board of Directors' a schedule that sets forth the then-current
Initial Holder Limit applicable to the Initial Holder.
FIFTEENTH: The definition of "Initial Holder Limit" contained in Section 2
of ARTICLE THIRD of the Articles Supplementary as corrected hereby is as
follows:
"INITIAL HOLDER LIMIT" shall mean a number of the Outstanding shares of
Class C Preferred Stock of the Corporation having an Aggregate Value not in
excess of the excess of (x) 15% of the Aggregate Value of all Outstanding
shares of Equity Stock over (y) the Aggregate Value of all shares of Equity
Stock other than Class C Preferred Stock that are Beneficially Owned by the
Initial Holder. From the Issue Date, the secretary of the Corporation, or
such other person as shall be designated by the Board of Directors, shall
upon request make available to the representative(s) of the Initial Holder
and the Board of Directors, a schedule that sets forth the then-current
Initial Holder Limit applicable to the Initial Holder.
SIXTEENTH: The inaccuracy or defect in the definition of "Initial Holder
Limit" contained in Section 2 of ARTICLE THIRD of the Articles Supplementary as
previously filed is that the reference to "Class B Preferred Stock" in the
fourth and fifth lines thereof should be to "Class C Preferred Stock."
SEVENTEENTH: The definition of "Look-Through Ownership Limit" contained in
Section 2 of ARTICLE THIRD of the Articles Supplementary as previously filed
and to be corrected hereby reads as follows:
"LOOK-THROUGH OWNERSHIP LIMIT" shall mean, for any Look-Through Entity, a
number of the Outstanding shares of Class C Preferred Stock of the
Corporation having an Aggregate Value not in excess of the excess of (x)
15% of the Aggregate Value of all Outstanding shares of Equity Stock over
(y) by the Aggregate Value of all shares of Equity Stock other than Class B
Preferred Stock that are Beneficially Owned by the Look-Through Entity.
EIGHTEENTH: The definition of "Look-Through Ownership Limit" contained in
Section 2 of ARTICLE THIRD of the Articles Supplementary as corrected hereby is
as follows:
"LOOK-THROUGH OWNERSHIP LIMIT" shall mean, for any Look-Through Entity, a
number of the Outstanding shares of Class C Preferred Stock of the
Corporation
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<PAGE> 83
having an Aggregate Value not in excess of the (x) 15% of the Aggregate
Value of all Outstanding shares of Equity Stock over (y) by the Aggregate
Value of all shares of Equity Stock other than Class C Preferred Stock that
are Beneficially Owned by the Look-Through Entity.
NINETEENTH: The inaccuracy or defect in the definition of "Look-Through
Ownership Limit" contained in Section 2 of ARTICLE THIRD of the Articles
Supplementary as previously filed is that the reference to "Class B Preferred
Stock" in the fifth line thereof should be to "Class C Preferred Stock."
TWENTIETH: The provision in the Articles Supplementary as previously filed
and to be corrected hereby reads as follows:
IN WITNESS WHEREOF, the Corporation has caused these presents to be
signed in its name and on its behalf by its Chairman and witnessed by its
Secretary on December ____, 1997.
TWENTY-FIRST: The provision in the Articles Supplementary as corrected
hereby is as follows:
IN WITNESS WHEREOF, the Corporation has caused these presents to be
signed in its name and on its behalf by its Chairman and witnessed by its
Secretary on December 22, 1997.
TWENTY-SECOND: The inaccuracy or defect in the provision of the Articles
Supplementary as previously filed is that such statement failed to state
correctly the date such Articles were signed.
-5-
<PAGE> 84
IN WITNESS WHEREOF, Apartment Investment and Management Company has caused
this Certificate of Correction to be signed in its name and on its behalf by its
Chairman and witnessed by its Secretary on February 17, 1998.
WITNESS: APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
/s/ LEEANN MOREIN By: TERRY CONSIDINE
- ----------------------------- -----------------------------
Leeann Morein, Secretary Terry Considine, Chairman
The undersigned, Chairman of APARTMENT INVESTMENT AND MANAGEMENT COMPANY,
with respect to the foregoing Certificate of Correction of which this
certificate is made a part, hereby acknowledges, in the name and on behalf of
said Corporation, the foregoing Certificate of Correction to be the act of said
Corporation and further certifies that, to the best of his knowledge,
information and belief, the matters and facts set forth therein with respect to
the authorization and approval thereof are true in all material respects, under
the penalties of perjury.
/s/ TERRY CONSIDINE
-----------------------------
Terry Considine, Chairman
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<PAGE> 85
ARTICLES SUPPLEMENTARY
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
CLASS D CUMULATIVE PREFERRED STOCK
(PAR VALUE $.01 PER SHARE)
APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation
(hereinafter called the "Corporation"), having its principal office in Baltimore
City, Maryland, hereby certifies to the Department of Assessments and Taxation
of the State of Maryland that:
FIRST: Pursuant to authority expressly vested in the Board of Directors of
the Corporation by Section 1.2 of Article IV of the Charter of the Corporation,
the Board of Directors has duly divided and classified 4,600,000 authorized but
unissued shares of the capital stock of the Corporation into a class designated
as Class D Cumulative Preferred Stock and has provided for the issuance of such
class.
SECOND: The reclassification increases the number of shares classified as
Class D Cumulative Preferred Stock, par value $.01 per share, from no shares
immediately prior to the reclassification to 4,600,000 shares immediately after
the reclassification. The reclassification decreases the number of shares
classified as Preferred Stock, par value $.01 per share, from 6,490,000 shares
immediately prior to the reclassification to 1,890,000 shares immediately after
the reclassification. The number of shares classified as Class D Cumulative
Preferred Stock may be decreased pursuant to Section 6 of Article Third of these
Articles Supplementary upon reacquisition thereof in any manner, or by
retirement thereof, by the Corporation.
THIRD: The terms of the Class D Cumulative Preferred Stock (including the
preferences, conversions or other rights, voting powers, restrictions,
limitations as to dividends and other distributions, qualifications, or terms or
conditions of redemption) as set by the Board of Directors are as follows:
1. NUMBER OF SHARES AND DESIGNATION.
This class of Preferred Stock shall be designated as Class D Cumulative
Preferred Stock (the "Class D Preferred Stock") and Four Million Six Hundred
Thousand (4,600,000) shall be the authorized number of shares of such Class D
Preferred Stock constituting such class.
<PAGE> 86
2. DEFINITIONS.
For purposes of the Class D Preferred Stock, the following terms shall have
the meanings indicated:
"ACT" shall mean the Securities Act of 1933, as amended.
"AFFILIATE" of a Person means a Person that directly, or indirectly through
one or more intermediaries, controls or is controlled by, or is under
common control with, the Person specified.
"AGGREGATE VALUE" shall mean, with respect to any block of Equity Stock,
the sum of the products of (i) the number of shares of each class of Equity
Stock within such block multiplied by (ii) the corresponding Market Price
of one share of Equity Stock of such class.
"BENEFICIAL OWNERSHIP" shall mean, with respect to any Person, ownership of
shares of Equity Stock equal to the sum of (i) the number of shares of
Equity Stock directly owned by such Person, (ii) the number of shares of
Equity Stock indirectly owned by such Person (if such Person is an
"individual" as defined in Section 542(a)(2) of the Code) taking into
account the constructive ownership rules of Section 544 of the Code, as
modified by Section 856(h)(1)(B) of the Code, and (iii) the number of
shares of Equity Stock that such Person is deemed to beneficially own
pursuant to Rule 13d3 under the Exchange Act or that is attributed to such
Person pursuant to Section 318 of the Code, as modified by Section
856(d)(5) of the Code, PROVIDED that when applying this definition of
Beneficial Ownership to the Initial Holder, clause (iii) of this
definition, and clause (ii) of the definition of "Person" shall be
disregarded. The terms "BENEFICIAL OWNER," "BENEFICIALLY OWNS" and
"BENEFICIALLY OWNED" shall have the correlative meanings.
"BOARD OF DIRECTORS" shall mean the Board of Directors of the Corporation
or any committee authorized by such Board of Directors to perform any of
its responsibilities with respect to the Class D Preferred Stock.
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or a day on
which state or federally chartered banking institutions in New York, New
York are not required to be open.
"CHARITABLE BENEFICIARY" shall mean one or more beneficiaries of the Trust
as determined pursuant to Section 10.3 of this Article, each of which shall
be an organization described in Section 170(b)(1)(A), 170(c)(2) and
501(c)(3) of the Code.
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<PAGE> 87
"CLASS D PREFERRED STOCK" shall have the meaning set forth in Section 1 of
this Article.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from time
to time, or any successor statute thereto. Reference to any provision of
the Code shall mean such provision as in effect from time to time, as the
same may be amended, and any successor thereto, as interpreted by any
applicable regulations or other administrative pronouncements as in effect
from time to time.
"COMMON STOCK" shall mean the Class A Common Stock, $.01 par value per
share, of the Corporation or such shares of the Corporation's capital stock
into which outstanding shares of Common Stock shall be reclassified.
"DIVIDEND PAYMENT DATE" shall mean January 15, April 15, July 15 and
October 15 of each year; provided, further, that if any Dividend Payment
Date falls on any day other than a Business Day, the dividend payment
payable on such Dividend Payment Date shall be paid on the Business Day
immediately following such Dividend Payment Date and no interest shall
accrue on such dividend from such date to such Dividend Payment Date.
"DIVIDEND PERIODS" shall mean the Initial Dividend Period and each
subsequent quarterly dividend period commencing on and including January
15, April 15, July 15 and October 15 of each year and ending on and
including the day preceding the first day of the next succeeding Dividend
Period, other than the Dividend Period during which any Class D Preferred
Stock shall be redeemed pursuant to Section 5 hereof, which shall end on
and include the Redemption Date with respect to the Class D Preferred Stock
being redeemed.
"EQUITY STOCK" shall mean one or more shares of any class of capital stock
of the Corporation.
"EXCESS TRANSFER" has the meaning set forth in Section 10.3(A) of this
Article.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended.
"ISSUE DATE" shall mean February 19, 1998.
"INITIAL DIVIDEND PERIOD" shall mean the period commencing on and including
the Issue Date and ending on and including April 14, 1998.
"INITIAL HOLDER" shall mean Terry Considine.
"INITIAL HOLDER LIMIT" shall mean a number of the Outstanding shares of
Class D Preferred Stock of the Corporation having an Aggregate Value not in
excess
3
<PAGE> 88
of the excess of (x) 15% of the Aggregate Value of all Outstanding shares
of Equity Stock over (y) the Aggregate Value of all shares of Equity Stock
other than Class D Preferred Stock that are Beneficially Owned by the
Initial Holder. From the Issue Date, the secretary of the Corporation, or
such other person as shall be designated by the Board of Directors, shall
upon request make available to the representative(s) of the Initial Holder
and the Board of Directors, a schedule that sets forth the thencurrent
Initial Holder Limit applicable to the Initial Holder.
"JUNIOR STOCK" shall mean the Common Stock and any other class or series of
capital stock of the Corporation over which the shares of Class D Preferred
Stock have preference or priority in the payment of dividends or in the
distribution of assets on any liquidation, dissolution or winding up of the
Corporation.
"LOOK-THROUGH ENTITY" shall mean a Person that is either (i) described in
Section 401(a) of the Code as provided under Section 856(h)(3) of the Code
or (ii) registered under the Investment Company Act of 1940.
"LOOK-THROUGH OWNERSHIP LIMIT" shall mean, for any Look-Through Entity, a
number of the Outstanding shares of Class D Preferred Stock of the
Corporation having an Aggregate Value not in excess of the excess of (x)
15% of the Aggregate Value of all Outstanding shares of Equity Stock over
(y) by the Aggregate Value of all shares of Equity Stock other than Class D
Preferred Stock that are Beneficially Owned by the Look-Through Entity.
"MARKET PRICE" on any date shall mean, with respect to any share of Equity
Stock, the Closing Price of share of that class of Equity Stock on the
Trading Day immediately preceding such date. The term "CLOSING PRICE" on
any date shall mean the last sale price, regular way, or, in case no such
sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed
or admitted to trading on the NYSE or, if the Equity Stock is not listed or
admitted to trading on the NYSE, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the
principal national securities exchange on which the Equity Stock is listed
or admitted to trading or, if the Equity Stock is not listed or admitted to
trading on any national securities exchange, the last quoted price, or if
not so quoted, the average of the high bid and low asked prices in the
overthecounter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System or, if such system is
no longer in use, the principal other automated quotations system that may
then be in use or, if the Equity Stock is not quoted by any such
organization, the average of the closing bid and asked prices as furnished
by a professional market maker making a market in the Equity Stock selected
by the Board of
4
<PAGE> 89
Directors of the Company. The term "TRADING DAY" shall mean a day on which
the principal national securities exchange on which the Equity Stock is
listed or admitted to trading is open for the transaction of business or,
if the Equity Stock is not listed or admitted to trading on any national
securities exchange, shall mean any day other than a Saturday, a Sunday or
a day on which banking institutions in the State of New York are authorized
or obligated by law or executive order to close.
"NYSE" shall mean the New York Stock Exchange, Inc.
"OUTSTANDING" shall mean issued and outstanding shares of Equity Stock of
the Corporation, PROVIDED that for purposes of the application of the
Ownership Limit, the Look-Through Ownership Limit or the Initial Holder
Limit to any Person, the term "OUTSTANDING" shall be deemed to include the
number of shares of Equity Stock that such Person alone, at that time,
could acquire pursuant to any options or convertible securities.
"OWNERSHIP LIMIT" shall mean, for any Person other than the Initial Holder
or a Look-Through Entity, a number of the Outstanding shares of Class D
Preferred Stock of the Corporation having an Aggregate Value not in excess
of the excess of (x) 8.7% of the Aggregate Value of all Outstanding shares
of Equity Stock over (y) the Aggregate Value of all shares of Equity Stock
other than Class D Preferred Stock that are Beneficially Owned by the
Person.
"OWNERSHIP RESTRICTIONS" shall mean collectively the Ownership Limit as
applied to Persons other than the Initial Holder or Look-Through Entities,
the Initial Holder Limit as applied to the Initial Holder and the
Look-Through Ownership Limit as applied to Look-Through Entities.
"PARITY STOCK" shall have the meaning set forth in paragraph (b) of Section
7 of this Article. The Class B Preferred Stock and the Class C Preferred
Stock shall each be a Parity Stock.
"PERSON" shall mean (a) for purposes of Section 10 of this Article, (i) an
individual, corporation, partnership, estate, trust (including a trust
qualifying under Section 401(a) or 501(c) of the Code), association,
private foundation within the meaning of Section 509(a) of the Code, joint
stock company or other entity, and (ii) also includes a group as that term
is used for purposes of Section 13(d)(3) of the Exchange Act and (b) for
purposes of the remaining Sections of this Article, any individual, firm,
partnership, corporation or other entity and shall include any successor
(by merger or otherwise) of such entity.
"PROHIBITED TRANSFEREE" has the meaning set forth in Section 10.3(A) of
this Article.
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"REDEMPTION DATE" shall have the meaning set forth in paragraph (b) of
Section 5 of this Article.
"REIT" shall mean a "real estate investment trust" as defined in Section
856 of the Code.
"SENIOR STOCK" shall have the meaning set forth in paragraph (a) of Section
7 of this Article.
"SET APART FOR PAYMENT" shall be deemed to include, without any action
other than the following, the recording by the Corporation in its
accounting ledgers of any accounting or bookkeeping entry which indicates,
pursuant to a declaration of dividends or other distribution by the Board
of Directors, the allocation of funds to be so paid on any series or class
of capital stock of the Corporation; provided, however, that if any funds
for any class or series of Junior Stock or any class or series of Parity
Stock are placed in a separate account of the Corporation or delivered to a
disbursing, paying or other similar agent, then "set apart for payment"
with respect to the Class D Preferred Stock shall mean placing such funds
in a separate account or delivering such funds to a disbursing, paying or
other similar agent.
"TRADING DAY", as to any securities, shall mean any day on which such
securities are traded on the principal national securities exchange on
which such securities are listed or admitted or, if such securities are not
listed or admitted for trading on any national securities exchange, the
NASDAQ National Market or, if such securities are not listed or admitted
for trading on the NASDAQ National Market, in the securities market in
which such securities are traded.
"TRANSFER" shall mean any sale, transfer, gift, assignment, devise or other
disposition of a share of Class D Preferred Stock (including (i) the
granting of an option or any series of such options or entering into any
agreement for the sale, transfer or other disposition of Class D Preferred
Stock or (ii) the sale, transfer, assignment or other disposition of any
securities or rights convertible into or exchangeable for Class D Preferred
Stock), whether voluntary or involuntary, whether of record or Beneficial
Ownership, and whether by operation of law or otherwise (including, but not
limited to, any transfer of an interest in other entities that results in a
change in the Beneficial Ownership of shares of Class D Preferred Stock).
The term "TRANSFERS" and "TRANSFERRED" shall have correlative meanings.
"TRANSFER AGENT" means such transfer agent as may be designated by the
Board of Directors or their designee as the transfer agent for the Class D
Preferred Stock; provided, that if the Corporation has not designated a
transfer agent then the Corporation shall act as the transfer agent for the
Class D Preferred Stock.
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"TRUST" shall mean the trust created pursuant to Section 10.3 of this
Article.
"TRUSTEE" shall mean the Person unaffiliated with either the Corporation or
the Prohibited Transferee that is appointed by the Corporation to serve as
trustee of the Trust.
"VOTING PREFERRED STOCK" shall have the meaning set forth in Section 8 of
this Article.
3. DIVIDENDS.
(a) The holders of Class D Preferred Stock shall be entitled to
receive, when and as declared by the Board of Directors out of funds legally
available for that purpose, cumulative dividends payable in cash in an amount
per share of Class D Preferred Stock equal to $2.1875 per annum. Such dividends
shall be cumulative from the Issue Date, whether or not in any Dividend Period
or Periods such dividends shall be declared or there shall be funds of the
Corporation legally available for the payment of such dividends, and shall be
payable quarterly in arrears on each Dividend Payment Date, commencing on April
15, 1998. Each such dividend shall be payable in arrears to the holders of
record of the Class D Preferred Stock, as they appear on the stock records of
the Corporation at the close of business on the January 1, April 1, July 1 or
October 1, as the case may be, immediately preceding such Dividend Payment Date.
Accumulated, accrued and unpaid dividends for any past Dividend Periods may be
declared and paid at any time, without reference to any regular Dividend Payment
Date, to holders of record on such date, which date shall not precede by more
than 45 days the payment date thereof, as may be fixed by the Board of
Directors.
(b) The amount of dividends payable per share of Class D Preferred
Stock for the Initial Dividend Period, or any other period shorter than a full
Dividend Period, shall be computed ratably on the basis of twelve 30day months
and a 360day year. Holders of Class D Preferred Stock shall not be entitled to
any dividends, whether payable in cash, property or stock, in excess of
cumulative dividends, as herein provided, on the Class D Preferred Stock. No
interest, or sum of money in lieu of interest, shall be payable in respect of
any dividend payment or payments on the Class D Preferred Stock that may be in
arrears.
(c) So long as any of the shares of Class D Preferred Stock are
outstanding, except as described in the immediately following sentence, no
dividends shall be declared or paid or set apart for payment by the Corporation
and no other distribution of cash or other property shall be declared or made
directly or indirectly by the Corporation with respect to any class or series of
Parity Stock for any period unless dividends equal to the full amount of
accumulated, accrued and unpaid dividends 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
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such payment on the Class D Preferred Stock for all Dividend Periods terminating
on or prior to the Dividend Payment Date with respect to such class or series of
Parity Stock. When dividends are not paid in full or a sum sufficient for such
payment is not set apart, as aforesaid, all dividends declared upon the Class D
Preferred Stock and all dividends declared upon any other class or series of
Parity Stock shall be declared ratably in proportion to the respective amounts
of dividends accumulated, accrued and unpaid on the Class D Preferred Stock and
accumulated, accrued and unpaid on such Parity Stock.
(d) So long as any of the shares of Class D Preferred Stock are
outstanding, no dividends (other than dividends or distributions paid in shares
of, or options, warrants or rights to subscribe for or purchase shares of,
Junior Stock) shall be declared or paid or set apart for payment by the
Corporation and no other distribution of cash or other property shall be
declared or made, directly or indirectly, by the Corporation with respect to any
shares of Junior Stock, nor shall any shares of Junior Stock be redeemed,
purchased or otherwise acquired (other than a redemption, purchase or other
acquisition of Common Stock made for purposes of an employee incentive or
benefit plan of the Corporation or any subsidiary) for any consideration (or any
moneys be paid to or made available for a sinking fund for the redemption of any
shares of any such stock), directly or indirectly, by the Corporation (except by
conversion into or exchange for shares of, or options, warrants or rights to
subscribe for or purchase shares of, Junior Stock), nor shall any other cash or
other property otherwise be paid or distributed to or for the benefit of any
holder of shares of Junior Stock in respect thereof, directly or indirectly, by
the Corporation unless in each case the full cumulative dividends (including all
accumulated, accrued and unpaid dividends) on all outstanding shares of Class D
Preferred Stock shall have been paid or such dividends have been declared and
set apart for payment for all past Dividend Periods with respect to the Class D
Preferred Stock.
Notwithstanding the provisions of this Section 3(d), the Corporation
shall not be prohibited from (i) declaring or paying or setting apart for
payment any dividend or distribution on any shares of Parity Stock or (ii) or
redeeming, purchasing or otherwise acquiring any Parity Stock, in each case, if
such declaration, payment, redemption, purchase or other acquisition is
necessary in order to maintain the continued qualification of the Corporation as
a REIT under Section 856 of the Code.
4. LIQUIDATION PREFERENCE.
(a) In the event of any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, before any payment or
distribution by the Corporation (whether of capital or surplus) shall be made to
or set apart for the holders of Junior Stock, the holders of shares of Class D
Preferred Stock shall be entitled to receive TwentyFive Dollars ($25) per share
of Class D Preferred Stock (the "Liquidation Preference"), plus an amount equal
to all dividends (whether or not earned or declared) accumulated, accrued and
unpaid thereon to the date of final
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distribution to such holders; but such holders shall not be entitled to any
further payment. Until the holders of the Class D Preferred Stock have been paid
the Liquidation Preference in full, plus an amount equal to all dividends
(whether or not earned or declared) accumulated, accrued and unpaid thereon to
the date of final distribution to such holders, no payment will be made to any
holder of Junior Stock upon the liquidation, dissolution or winding up of the
Corporation. If, upon any liquidation, dissolution or winding up of the
Corporation, the assets of the Corporation, or proceeds thereof, distributable
among the holders of Class D Preferred Stock shall be insufficient to pay in
full the preferential amount aforesaid and liquidating payments on any other
shares of any class or series of Parity Stock, then such assets, or the proceeds
thereof, shall be distributed among the holders of Class D Preferred Stock and
any such other Parity Stock ratably in the same proportion as the respective
amounts that would be payable on such Class D Preferred Stock and any such other
Parity Stock if all amounts payable thereon were paid in full. For the purposes
of this Section 4, (i) a consolidation or merger of the Corporation with one or
more corporations, (ii) a sale or transfer of all or substantially all of the
Corporation's assets, or (iii) a statutory share exchange shall not be deemed to
be a liquidation, dissolution or winding up, voluntary or involuntary, of the
Corporation.
(b) Upon any liquidation, dissolution or winding up of the
Corporation, after payment shall have been made in full to the holders of Class
D Preferred Stock and any Parity Stock, as provided in this Section 4, any other
series or class or classes of Junior Stock shall, subject to the respective
terms thereof, be entitled to receive any and all assets remaining to be paid or
distributed, and the holders of the Class D Preferred Stock and any Parity Stock
shall not be entitled to share therein.
5. REDEMPTION AT THE OPTION OF THE CORPORATION.
(a) Shares of Class D Preferred Stock shall not be redeemable by the
Corporation prior to February 19, 2003, except as set forth in Section 10.2 of
this Article. On and after February 19, 2003, the Corporation, at its option,
may redeem shares of Class D Preferred Stock, in whole or from time to time in
part, at a redemption price payable in cash equal to 100% of the Liquidation
Preference thereof, plus all accrued and unpaid dividends to the date fixed for
redemption (the "Redemption Date"). In connection with any redemption pursuant
to this Section 5(a), the redemption price of the Class D Preferred Stock (other
than any portion thereof consisting of accrued and unpaid dividends) shall be
payable solely with the proceeds from the sale by the Corporation or AIMCO
Properties, L.P., a Delaware limited Partnership (the "Operating Partnership"),
of other capital shares of the Corporation or the Operating Partnership (whether
or not such sale occurs concurrently with such redemption). For purposes of the
preceding sentence, 'capital shares' means any common stock, preferred stock,
depositary shares, partnership or other interests, participations or other
ownership interests (however designated) and any rights (other than debt
securities convertible into or exchangeable at the option of the holder for
equity securities (unless
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and to the extent such debt securities are subsequently converted into capital
shares)) or options to purchase any of the foregoing of or in the Corporation or
the Operating Partnership.
(b) The Redemption Date shall be selected by the Corporation, shall be
specified in the notice of redemption and shall be not less than 30 days nor
more than 60 days after the date notice of redemption is sent by the
Corporation.
(c) If full cumulative dividends on all outstanding shares of Class D
Preferred Stock have not been paid or declared and set apart for payment, no
shares of Class D Preferred Stock may be redeemed unless all outstanding shares
of Class D Preferred Stock are simultaneously redeemed and neither the
Corporation nor any affiliate of the Corporation may purchase or acquire shares
of Class D Preferred Stock, otherwise than pursuant to a purchase or exchange
offer made on the same terms to all holders of shares of Class D Preferred
Stock.
(d) If the Corporation shall redeem shares of Class D Preferred Stock
pursuant to paragraph (a) of this Section 5, notice of such redemption shall be
given to each holder of record of the shares to be redeemed. Such notice shall
be provided by first class mail, postage prepaid, at such holder's address as
the same appears on the stock records of the Corporation. Neither the failure to
mail any notice required by this paragraph (d), nor any defect therein or in the
mailing thereof to any particular holder, shall affect the sufficiency of the
notice or the validity of the proceedings for redemption with respect to the
other holders. Any notice which was mailed in the manner herein provided shall
be conclusively presumed to have been duly given on the date mailed whether or
not the holder receives the notice. Each such notice shall state, as
appropriate: (1) the Redemption Date; (2) the number of shares of Class D
Preferred Stock to be redeemed and, if fewer than all such shares held by such
holder are to be redeemed, the number of such shares to be redeemed from such
holder; and (3) the place or places at which certificates for such shares are to
be surrendered for cash. Notice having been mailed as aforesaid, from and after
the Redemption Date (unless the Corporation shall fail to make available the
amount of cash necessary to effect such redemption), (i) except as otherwise
provided herein, dividends on the shares of Class D Preferred Stock so called
for redemption shall cease to accumulate or accrue on the shares of Class D
Preferred Stock called for redemption (except that, in the case of a Redemption
Date after a dividend record date and prior to the related Dividend Payment
Date, holders of Class D Preferred Stock on the dividend record date will be
entitled on such Dividend Payment Date to receive the dividend payable on such
shares), (ii) said shares shall no longer be deemed to be outstanding, and (iii)
all rights of the holders thereof as holders of Class D Preferred Stock of the
Corporation shall cease (except the rights to receive the cash payable upon such
redemption, without interest thereon, upon surrender and endorsement of their
certificates if so required and to receive any dividends payable thereon). The
Corporation's obligation to make available the redemption price in accordance
with the preceding sentence shall be deemed fulfilled if, on or before the Call
Date, the
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Corporation shall deposit with a bank or trust company (which may be an
affiliate of the Corporation) that has, or is an affiliate of a bank or trust
company that has, a capital and surplus of at least $50,000,000, such amount of
cash as is necessary for such redemption, in trust, with irrevocable
instructions that such cash be applied to the redemption of the shares of Class
D Preferred Stock so called for redemption. No interest shall accrue for the
benefit of the holders of shares of Class D Preferred Stock to be redeemed on
any cash so set aside by the Corporation. Subject to applicable escheat laws,
any such cash unclaimed at the end of two years from the Redemption Date shall
revert to the general funds of the Corporation, after which reversion the
holders of shares of Class D Preferred Stock so called for redemption shall look
only to the general funds of the Corporation for the payment of such cash.
As promptly as practicable after the surrender in accordance with such
notice of the certificates for any such shares of Class D Preferred Stock to be
so redeemed (properly endorsed or assigned for transfer, if the Corporation
shall so require and the notice shall so state), such certificates shall be
exchanged for cash (without interest thereon) for which such shares have been
redeemed in accordance with such notice. If fewer than all the outstanding
shares of Class D Preferred Stock are to be redeemed, shares to be redeemed
shall be selected by the Corporation from outstanding shares of Class D
Preferred Stock not previously called for redemption by lot or, with respect to
the number of shares of Class D Preferred Stock held of record by each holder of
such shares, pro rata (as nearly as may be) or by any other method as may be
determined by the Board of Directors in its discretion to be equitable. If fewer
than all the shares of Class D Preferred Stock represented by any certificate
are redeemed, then a new certificate representing the unredeemed shares shall be
issued without cost to the holders thereof.
6. STATUS OF REACQUIRED STOCK.
All shares of Class D Preferred Stock which shall have been issued and
reacquired in any manner by the Corporation shall be returned to the status of
authorized, but unissued shares of Class D Preferred Stock.
7. RANKING.
Any class or series of capital stock of the Corporation shall be deemed to
rank:
(a) prior or senior to the Class D Preferred Stock, as to the payment
of dividends and as to distribution of assets upon liquidation, dissolution or
winding up, if the holders of such class or series shall be entitled to the
receipt of dividends or of amounts distributable upon liquidation, dissolution
or winding up, as the case may be, in preference or priority to the holders of
Class D Preferred Stock ("Senior Stock");
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(b) on a parity with the Class D Preferred Stock, as to the payment of
dividends and as to distribution of assets upon liquidation, dissolution or
winding up, whether or not the dividend rates, dividend payment dates or
redemption or liquidation prices per share thereof be different from those of
the Class D Preferred Stock, if the holders of such class of stock or series and
the Class D Preferred Stock shall be entitled to the receipt of dividends and of
amounts distributable upon liquidation, dissolution or winding up in proportion
to their respective amounts of accrued and unpaid dividends per share or
liquidation preferences, without preference or priority one over the other
("Parity Stock"); and
(c) junior to the Class D Preferred Stock, as to the payment of
dividends or as to the distribution of assets upon liquidation, dissolution or
winding up, if such stock or series shall be Common Stock or if the holders of
Class D Preferred Stock shall be entitled to receipt of dividends or of amounts
distributable upon liquidation, dissolution or winding up, as the case may be,
in preference or priority to the holders of shares of such class or series
("Junior Stock").
8. VOTING.
(a) If and whenever six quarterly dividends (whether or not
consecutive) payable on the Class D Preferred Stock or any series or class of
Parity Stock shall be in arrears (which shall, with respect to any such
quarterly dividend, mean that any such dividend has not been paid in full),
whether or not earned or declared, the number of directors then constituting the
Board of Directors shall be increased by two (if not already increased by reason
of similar types of provisions with respect to shares of Parity Stock of any
other class or series which is entitled to similar voting rights (the "Voting
Preferred Stock")) and the holders of shares of Class D Preferred Stock,
together with the holders of shares of all other Voting Preferred Stock then
entitled to exercise similar voting rights, voting as a single class regardless
of series, shall be entitled to elect the two additional directors to serve on
the Board of Directors at any annual meeting of stockholders or special meeting
held in place thereof, or at a special meeting of the holders of the Class D
Preferred Stock and the Voting Preferred Stock called as hereinafter provided.
Whenever all arrears in dividends on the Class D Preferred Stock and the Voting
Preferred Stock then outstanding shall have been paid and dividends thereon for
the current quarterly dividend period shall have been paid or declared and set
apart for payment, then the right of the holders of the Class D Preferred Stock
and the Voting Preferred Stock to elect such additional two directors shall
cease (but subject always to the same provision for the vesting of such voting
rights in the case of any similar future arrearages), and the terms of office of
all Persons elected as directors by the holders of the Class D Preferred Stock
and the Voting Preferred Stock shall forthwith terminate and the number of
directors constituting the Board of Directors shall be reduced accordingly. At
any time after such voting power shall have been so vested in the holders of
Class D Preferred Stock and the Voting Preferred Stock, if applicable, the
Secretary of the Corporation may, and upon the written request of any holder of
Class D Preferred
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Stock (addressed to the Secretary at the principal office of the Corporation)
shall, call a special meeting of the holders of the Class D Preferred Stock and
of the Voting Preferred Stock for the election of the two directors to be
elected by them as herein provided, such call to be made by notice similar to
that provided in the Bylaws of the Corporation for a special meeting of the
stockholders or as required by law. If any such special meeting required to be
called as above provided shall not be called by the Secretary within 20 days
after receipt of any such request, then any holder of Class D Preferred Stock
may call such meeting, upon the notice above provided, and for that purpose
shall have access to the stock books of the Corporation. The directors elected
at any such special meeting shall hold office until the next annual meeting of
the stockholders or special meeting held in lieu thereof if such office shall
not have previously terminated as above provided. If any vacancy shall occur
among the directors elected by the holders of the Class D Preferred Stock and
the Voting Preferred Stock, a successor shall be elected by the Board of
Directors, upon the nomination of the then remaining director elected by the
holders of the Class D Preferred Stock and the Voting Preferred Stock or the
successor of such remaining director, to serve until the next annual meeting of
the stockholders or special meeting held in place thereof if such office shall
not have previously terminated as provided above.
(b) So long as any shares of Class D Preferred Stock are outstanding,
in addition to any other vote or consent of stockholders required by law or by
the Charter of the Corporation, the affirmative vote of at least 662/3% of the
votes entitled to be cast by the holders of the Class D Preferred Stock voting
as a single class with the holders of all other classes or series of Preferred
Stock entitled to vote on such matters, given in Person or by proxy, either in
writing without a meeting or by vote at any meeting called for the purpose,
shall be necessary for effecting or validating:
(i) Any amendment, alteration or repeal of any of the provisions
of these Articles Supplementary, the Charter or the ByLaws of the Corporation
that materially adversely affects the voting powers, rights or preferences of
the holders of the Class D Preferred Stock; provided, however, that the
amendment of the provisions of the Charter so as to authorize or create, or to
increase the authorized amount of, or issue any Junior Stock or any shares of
any class of Parity Stock shall not be deemed to materially adversely affect the
voting powers, rights or preferences of the holders of Class D Preferred Stock;
or
(ii) The authorization, creation of, the increase in the
authorized amount of, or issuance of any shares of any class of Senior Stock or
any security convertible into shares of any class of Senior Stock (whether or
not such class of Senior Stock is currently authorized); provided, however, that
no such vote of the holders of Class D Preferred Stock shall be required if, at
or prior to the time when such amendment, alteration or repeal is to take
effect, or when the issuance of any such prior shares or convertible security is
to be made, as the case may be, provision
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is made for the redemption of all shares of Class D Preferred Stock at the time
outstanding to the extent such redemption is authorized by Section 5 of this
Article.
For purposes of the foregoing provisions and all other voting rights under
these Articles Supplementary, each share of Class D Preferred Stock shall have
one (1) vote per share, except that when any other class or series of preferred
stock shall have the right to vote with the Class D Preferred Stock as a single
class on any matter, then the Class D Preferred Stock and such other class or
series shall have with respect to such matters one quarter of one (.25) vote per
$25 of stated liquidation preference. Except as otherwise required by applicable
law or as set forth herein, the Class D Preferred Stock shall not have any
relative, participating, optional or other special voting rights and powers
other than as set forth herein, and the consent of the holders thereof shall not
be required for the taking of any corporate action.
9. RECORD HOLDERS.
The Corporation and the Transfer Agent may deem and treat the record holder
of any share of Class D Preferred Stock as the true and lawful owner thereof for
all purposes, and neither the Corporation nor the Transfer Agent shall be
affected by any notice to the contrary.
10.1 RESTRICTIONS ON OWNERSHIP AND TRANSFERS.
(A) LIMITATION ON BENEFICIAL OWNERSHIP. Except as provided in Section
10.8, from and after the Issue Date, no Person (other than the Initial Holder or
a Look-Through Entity) shall Beneficially Own shares of Class D Preferred Stock
in excess of the Ownership Limit, the Initial Holder shall not Beneficially Own
shares of Class D Preferred Stock in excess of the Initial Holder Limit and no
Look-Through Entity shall Beneficially Own shares of Class D Preferred Stock in
excess of the Look-Through Ownership Limit.
(B) TRANSFERS IN EXCESS OF OWNERSHIP LIMIT. Except as provided in
Section 10.8, from and after the Issue Date (and subject to Section 10.12), any
Transfer (whether or not such Transfer is the result of transactions entered
into through the facilities of the NYSE or other securities exchange or an
automated interdealer quotation system) that, if effective, would result in any
Person (other than the Initial Holder or a Look-Through Entity) Beneficially
Owning shares of Class D Preferred Stock in excess of the Ownership Limit shall
be void AB INITIO as to the Transfer of such shares of Class D Preferred Stock
that would be otherwise Beneficially Owned by such Person in excess of the
Ownership Limit, and the intended transferee shall acquire no rights in such
shares of Class D Preferred Stock.
(C) TRANSFERS IN EXCESS OF INITIAL HOLDER LIMIT. Except as provided in
Section 10.8, from and after the Issue Date (and subject to Section 10.12), any
Transfer (whether or not such Transfer is the result of transactions entered
into
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through the facilities of the NYSE or other securities exchange or an automated
interdealer quotation system) that, if effective, would result in the Initial
Holder Beneficially Owning shares of Class D Preferred Stock in excess of the
Initial Holder Limit shall be void AB INITIO as to the Transfer of such shares
of Class D Preferred Stock that would be otherwise Beneficially Owned by the
Initial Holder in excess of the Initial Holder limit, and the Initial Holder
shall acquire no rights in such shares of Class D Preferred Stock.
(D) TRANSFERS IN EXCESS OF LOOK-THROUGH OWNERSHIP LIMIT. Except as
provided in Section 10.8 from and after the Issue Date (and subject to Section
10.12), any Transfer (whether or not such Transfer is the result of transactions
entered into through the facilities of the NYSE or other securities exchange or
an automated interdealer quotation system) that, if effective, would result in
any Look-Through Entity Beneficially Owning shares of Class D Preferred Stock in
excess of the Look-Through Ownership limit shall be void AB INITIO as to the
Transfer of such shares of Class D Preferred Stock that would be otherwise
Beneficially Owned by such Look-Through Entity in excess of the Look-Through
Ownership Limit and such Look-Through Entity shall acquire no rights in such
shares of Class D Preferred Stock.
(E) TRANSFERS RESULTING IN "CLOSELY HELD" STATUS. From and after the
Issue Date, any Transfer that, if effective would result in the Corporation
being "closely held" within the meaning of Section 856(h) of the Code, or would
otherwise result in the Corporation failing to qualify as a REIT (including,
without limitation, a Transfer or other event that would result in the
Corporation owning (directly or constructively) an interest in a tenant that is
described in Section 856(d)(2)(B) of the Code if the income derived by the
Corporation from such tenant would cause the Corporation to fail to satisfy any
of the gross income requirements of Section 856(c) of the Code) shall be void AB
INITIO as to the Transfer of shares of Class D Preferred Stock that would cause
the Corporation (i) to be "closely held" within the meaning of Section 856(h) of
the Code or (ii) otherwise fail to qualify as a REIT, as the case may be, and
the intended transferee shall acquire no rights in such shares of Class D
Preferred Stock.
(F) SEVERABILITY ON VOID TRANSACTIONS. A Transfer of a share of Class
D Preferred Stock that is null and void under Sections 10.1(B), (C), (D), or (E)
of this Article because it would, if effective, result in (i) the ownership of
Class D Preferred Stock in excess of the Initial Holder Limit, the Ownership
Limit, or the Look-Through Ownership Limit, (ii) the Corporation being "closely
held" within the meaning of Section 856(h) of the Code or (iii) the Corporation
otherwise failing to qualify as a REIT, shall not adversely affect the validity
of the Transfer of any other share of Class D Preferred Stock in the same or any
other related transaction.
10.2 REMEDIES FOR BREACH. If the Board of Directors or a committee thereof
shall at any time determine in good faith that a Transfer or other event has
taken place in violation of Section 10.1 of this Article or that a Person
intends to acquire or has
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attempted to acquire Beneficial Ownership of any shares of Class D Preferred
Stock in violation of Section 10.1 of this Article (whether or not such
violation is intended), the Board of Directors or a committee thereof shall be
empowered to take any action as it deems advisable to refuse to give effect to
or to prevent such Transfer or other event, including, but not limited to,
refusing to give effect to such Transfer or other event on the books of the
Corporation, causing the Corporation to redeem such shares at the then current
Market Price and upon such terms and conditions as may be specified by the Board
of Directors in its sole discretion (including, but not limited to, by means of
the issuance of longterm indebtedness for the purpose of such redemption),
demanding the repayment of any distributions received in respect of shares of
Class D Preferred Stock acquired in violation of Section 10.1 of this Article or
instituting proceedings to enjoin such Transfer or to rescind such Transfer or
attempted Transfer; PROVIDED, HOWEVER, that any Transfers or attempted Transfers
(or in the case of events other than a Transfer, Beneficial Ownership) in
violation of Section 10.1 of this Article, regardless of any action (or
nonaction) by the Board of Directors or such committee, (a) shall be void AB
INITIO or (b) shall automatically result in the transfer described in Section
10.3 of this Article; PROVIDED, FURTHER, that the provisions of this Section
10.2 shall be subject to the provisions of Section 10.12 of this Article;
PROVIDED, FURTHER, that neither the Board of Directors nor any committee thereof
may exercise such authority in a manner that interferes with any ownership or
transfer of Class D Preferred Stock that is expressly authorized pursuant to
Section 10.8(d) of this Article.
10.3. TRANSFER IN TRUST.
(A) ESTABLISHMENT OF TRUST. If, notwithstanding the other provisions
contained in this Article, at any time after the Issue Date there is a purported
Transfer (an "EXCESS TRANSFER") (whether or not such Transfer is the result of
transactions entered into through the facilities of the NYSE or other securities
exchange or an automated interdealer quotation system) or other change in the
capital structure of the Corporation (including, but not limited to, any
redemption of Preferred Stock) or other event (including, but not limited to,
any acquisition of any share of Equity Stock) such that (a) any Person (other
than the Initial Holder or a Look-Through Entity) would Beneficially Own shares
of Class D Preferred Stock in excess of the Ownership Limit, or (b) the Initial
Holder would Beneficially Own shares of Class D Preferred Stock in excess of the
Initial Holder Limit, or (c) any Person that is a Look-Through Entity would
Beneficially Own shares of Class D Preferred Stock in excess of the Look-Through
Ownership Limit (in any such event, the Person, Initial Holder or Look-Through
Entity that would Beneficially Own shares of Class D Preferred Stock in excess
of the Ownership Limit, the Initial Holder Limit or the Look-Through Entity
Limit, respectively, is referred to as a "PROHIBITED TRANSFEREE"), then, except
as otherwise provided in Section 10.8 of this Article, such shares of Class D
Preferred Stock in excess of the Ownership Limit, the Initial Holder Limit or
the Look-Through Ownership Limit, as the case may be, (rounded up to the nearest
whole share) shall be automatically transferred to a Trustee in his capacity as
trustee of a Trust for the
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exclusive benefit of one or more Charitable Beneficiaries. Such transfer to the
Trustee shall be deemed to be effective as of the close of business on the
business day prior to the Excess Transfer, change in capital structure or
another event giving rise to a potential violation of the Ownership Limit, the
Initial Holder Limit or the Look-Through Entity Ownership Limit.
(B) APPOINTMENT OF TRUSTEE. The Trustee shall be appointed by the
Corporation and shall be a Person unaffiliated with either the Corporation or
any Prohibited Transferee. The Trustee may be an individual or a bank or trust
company duly licensed to conduct a trust business.
(C) STATUS OF SHARES HELD BY THE TRUSTEE. Shares of Class D
Preferred Stock held by the Trustee shall be issued and outstanding shares of
capital stock of the Corporation. Except to the extent provided in Section
10.3(E), the Prohibited Transferee shall have no rights in the Class D Preferred
Stock held by the Trustee, and the Prohibited Transferee shall not benefit
economically from ownership of any shares held in trust by the Trustee, shall
have no rights to dividends and shall not possess any rights to vote or other
rights attributable to the shares held in the Trust.
(D) DIVIDEND AND VOTING RIGHTS. The Trustee shall have all voting
rights and rights to dividends with respect to shares of Class D Preferred Stock
held in the Trust, which rights shall be exercised for the benefit of the
Charitable Beneficiary. Any dividend or distribution paid prior to the discovery
by the Corporation that the shares of Class D Preferred Stock have been
transferred to the Trustee shall be repaid to the Corporation upon demand, and
any dividend or distribution declared but unpaid shall be rescinded as void AB
INITIO with respect to such shares of Class D Preferred Stock. Any dividends or
distributions so disgorged or rescinded shall be paid over to the Trustee and
held in trust for the Charitable Beneficiary. Any vote cast by a Prohibited
Transferee prior to the discovery by the Corporation that the shares of Class D
Preferred Stock have been transferred to the Trustee will be rescinded as void
AB INITIO and shall be recast in accordance with the desires of the Trustee
acting for the benefit of the Charitable Beneficiary. The owner of the shares at
the time of the Excess Transfer, change in capital structure or other event
giving rise to a potential violation of the Ownership Limit, Initial Holder
Limit or Look-Through Entity Ownership Limit shall be deemed to have given an
irrevocable proxy to the Trustee to vote the shares of Class D Preferred Stock
for the benefit of the Charitable Beneficiary.
(E) RESTRICTIONS ON TRANSFER. The Trustee of the Trust may sell the
shares held in the Trust to a person, designated by the Trustee, whose ownership
of the shares will not violate the Ownership Restrictions. If such a sale is
made, the interest of the Charitable Beneficiary shall terminate and proceeds of
the sale shall be payable to the Prohibited Transferee and to the Charitable
Beneficiary as provided in this Section 10.3(E). The Prohibited Transferee shall
receive the lesser of (1) the price
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paid by the Prohibited Transferee for the shares or, if the Prohibited
Transferee did not give value for the shares (through a gift, devise or other
transaction), the Market Price of the shares on the day of the event causing the
shares to be held in the Trust and (2) the price per share received by the
Trustee from the sale or other disposition of the shares held in the Trust. Any
proceeds in excess of the amount payable to the Prohibited Transferee shall be
payable to the Charitable Beneficiary. If any of the transfer restrictions set
forth in this Section 10.3(E) or any application thereof is determined in a
final judgment to be void, invalid or unenforceable by any court having
jurisdiction over the issue, the Prohibited Transferee may be deemed, at the
option of the Corporation, to have acted as the agent of the Corporation in
acquiring the Class D Preferred Stock as to which such restrictions would, by
their terms, apply, and to hold such Class D Preferred Stock on behalf of the
Corporation.
(F) PURCHASE RIGHT IN STOCK TRANSFERRED TO THE TRUSTEE. Shares of
Class D Preferred Stock transferred to the Trustee shall be deemed to have been
offered for sale to the Corporation, or its designee, at a price per share equal
to the lesser of (i) the price per share in the transaction that resulted in
such transfer to the Trust (or, in the case of a devise or gift, the Market
Price at the time of such devise or gift) and (ii) the Market Price on the date
the Corporation, or its designee, accepts such offer. The Corporation shall have
the right to accept such offer for a period of 90 days after the later of (i)
the date of the Excess Transfer or other event resulting in a transfer to the
Trust and (ii) the date that the Board of Directors determines in good faith
that an Excess Transfer or other event occurred.
(G) DESIGNATION OF CHARITABLE BENEFICIARIES. By written notice to
the Trustee, the Corporation shall designate one or more nonprofit organizations
to be the Charitable Beneficiary of the interest in the Trust relating to such
Prohibited Transferee if (i) the shares of Class D Preferred Stock held in the
Trust would not violate the Ownership Restrictions in the hands of such
Charitable Beneficiary and (ii) each Charitable Beneficiary is an organization
described in Sections 170(b)(1)(A), 170(c)(2) and 501(c)(3) of the Code.
10.4 NOTICE OF RESTRICTED TRANSFER. Any Person that acquires or attempts to
acquire shares of Class D Preferred Stock in violation of Section 10.1 of this
Article, or any Person that is a Prohibited Transferee such that stock is
transferred to the Trustee under Section 10.3 of this Article, shall immediately
give written notice to the Corporation of such event and shall provide to the
Corporation such other information as the Corporation may request in order to
determine the effect, if any, of such Transfer or attempted Transfer or other
event on the Corporation's status as a REIT. Failure to give such notice shall
not limit the rights and remedies of the Board of Directors provided herein in
any way.
10.5 OWNERS REQUIRED TO PROVIDE INFORMATION. From and after the Issue Date
certain record and Beneficial Owners and transferees of shares of Class D
Preferred Stock will be required to provide certain information as set out
below.
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(A) ANNUAL DISCLOSURE. Every record and Beneficial Owner of more
than 5% (or such other percentage between 0.5% and 5%, as provided in the
applicable regulations adopted under the Code) of the number of Outstanding
shares of Class D Preferred Stock shall, within 30 days after January 1 of each
year, give written notice to the Corporation stating the name and address of
such record or Beneficial Owner, the number of shares of Class D Preferred Stock
Beneficially Owned, and a full description of how such shares are held. Each
such record or Beneficial Owner of Class D Preferred Stock shall, upon demand by
the Corporation, disclose to the Corporation in writing such additional
information with respect to the Beneficial Ownership of the Class D Preferred
Stock as the Board of Directors, in its sole discretion, deems appropriate or
necessary to (i) comply with the provisions of the Code regarding the
qualification of the Corporation as a REIT under the Code and (ii) ensure
compliance with the Ownership Limit, the Initial Holder Limit or the
Look-Through Ownership Limit, as applicable. Each stockholder of record,
including without limitation any Person that holds shares of Class D Preferred
Stock on behalf of a Beneficial Owner, shall take all reasonable steps to obtain
the written notice described in this Section 10.5 from the Beneficial Owner.
(B) DISCLOSURE AT THE REQUEST OF THE CORPORATION. Any Person that is
a Beneficial Owner of shares of Class D Preferred Stock and any Person
(including the stockholder of record) that is holding shares of Class D
Preferred Stock for a Beneficial Owner, and any proposed transferee of shares,
shall provide such information as the Corporation, in its sole discretion, may
request in order to determine the Corporation's status as a REIT, to comply with
the requirements of any taxing authority or other governmental agency, to
determine any such compliance or to ensure compliance with the Ownership Limit,
the Initial Holder Limit and the Look-Through Ownership Limit, and shall provide
a statement or affidavit to the Corporation setting forth the number of shares
of Class D Preferred Stock already Beneficially Owned by such stockholder or
proposed transferee and any related persons specified, which statement or
affidavit shall be in the form prescribed by the Corporation for that purpose.
10.6 REMEDIES NOT LIMITED. Nothing contained in this Article shall limit
the authority of the Board of Directors to take such other action as it deems
necessary or advisable (subject to the provisions of Section 10.12 of this
Article) (i) to protect the Corporation and the interests of its stockholders in
the preservation of the Corporation's status as a REIT and (ii) to insure
compliance with the Ownership Limit, the Initial Holder Limit and the
Look-Through Ownership Limit.
10.7 AMBIGUITY. In the case of an ambiguity in the application of any of
the provisions of Section 10 of this Article, or in the case of an ambiguity in
any definition contained in Section 10 of this Article, the Board of Directors
shall have the power to determine the application of the provisions of this
Article with respect to any situation based on its reasonable belief,
understanding or knowledge of the circumstances.
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10.8 EXCEPTIONS. The following exceptions shall apply or may be established
with respect to the limitations of Section 10.1 of this Article.
(A) WAIVER OF OWNERSHIP LIMIT. The Board of Directors, upon receipt
of a ruling from the Internal Revenue Service or an opinion of tax counsel or
other evidence or undertaking acceptable to it, may waive the application, in
whole or in part, of the Ownership Limit to a Person subject to the Ownership
Limit, if such person is not an individual for purposes of Section 542(a) of the
Code and is a corporation, partnership, estate or trust. In connection with any
such exemption, the Board of Directors may require such representations and
undertakings from such Person and may impose such other conditions as the Board
deems necessary, in its sole discretion, to determine the effect, if any, of the
proposed Transfer on the Corporation's status as a REIT.
(B) PLEDGE BY INITIAL HOLDER. Notwithstanding any other provision of
this Article, the pledge by the Initial Holder of all or any portion of the
Class D Preferred Stock directly owned at any time or from time to time shall
not constitute a violation of Section 10.1 of this Article and the pledgee shall
not be subject to the Ownership Limit with respect to the Class D Preferred
Stock so pledged to it either as a result of the pledge or upon foreclosure.
(C) UNDERWRITERS. For a period of 270 days following the purchase of
Class D Preferred Stock by an underwriter that (i) is a corporation or a
partnership and (ii) participates in an offering of the Class D Preferred Stock,
such underwriter shall not be subject to the Ownership Limit with respect to the
Class D Preferred Stock purchased by it as a part of or in connection with such
offering and with respect to any Class D Preferred Stock purchased in connection
with market making activities.
10.9 LEGEND. Each certificate for Class D Preferred Stock shall bear the
following legend:
"The shares of Class D Cumulative Preferred Stock represented by
this certificate are subject to restrictions on transfer. No person may
Beneficially Own shares of Class D Cumulative Preferred Stock in excess of
the Ownership Restrictions, as applicable, with certain further
restrictions and exceptions set forth in the Corporation's Charter
(including the Articles Supplementary setting forth the terms of the Class
D Cumulative Preferred Stock). Any Person that attempts to Beneficially Own
shares of Class D Cumulative Preferred Stock in excess of the applicable
limitation must immediately notify the Corporation. All capitalized terms
in this legend have the meanings ascribed to such terms in the
Corporation's Charter (including the Articles Supplementary setting forth
the terms of the Class D Cumulative Preferred Stock), as the same may be
amended from time to time, a copy of which, including the restrictions on
transfer, will be sent
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without charge to each stockholder that so requests. If the restrictions on
transfer are violated, the shares of Class D Cumulative Preferred Stock
represented hereby will be either (i) void in accordance with the
Certificate or (ii) automatically transferred to a Trustee of a Trust for
the benefit of one or more Charitable Beneficiaries."
10.10 SEVERABILITY. If any provision of this Article or any application of
any such provision is determined in a final and unappealable judgment to be
void, invalid or unenforceable by any Federal or state court having jurisdiction
over the issues, the validity and enforceability of the remaining provisions
shall not be affected and other applications of such provision shall be affected
only to the extent necessary to comply with the determination of such court.
10.11 BOARD OF DIRECTORS DISCRETION. Anything in this Article to the
contrary notwithstanding, the Board of Directors shall be entitled to take or
omit to take such actions as it in its discretion shall determine to be
advisable in order that the Corporation maintain its status as and continue to
qualify as a REIT, including, but not limited to, reducing the Ownership Limit,
the Initial Holder Limit and the Look-Through Ownership Limit in the event of a
change in law.
10.12 SETTLEMENT. Nothing in this Section 10 of this Article shall be
interpreted to preclude the settlement of any transaction entered into through
the facilities of the NYSE or other securities exchange or an automated
interdealer quotation system.
FOURTH: The terms of the Class D Cumulative Preferred Stock set forth
in Article Third hereof shall become Article XV of the Charter.
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IN WITNESS WHEREOF, the Corporation has caused these presents to be signed
in its name and on its behalf by its Senior Vice President and Chief Financial
Officer and witnessed by its Secretary on February 17, 1998.
WITNESS: APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
/s/ Leeann Morein /s/ Troy D. Butts
- --------------------------- ------------------------------
Leeann Morein, Troy D. Butts
Secretary Senior Vice President and
Chief Financial Officer
THE UNDERSIGNED, Senior Vice President and Chief Financial Officer of
APARTMENT INVESTMENT AND MANAGEMENT COMPANY, who executed on behalf of the
Corporation the Articles Supplementary of which this Certificate is made a part,
hereby acknowledges in the name and on behalf of said Corporation the foregoing
Articles Supplementary to be the corporate act of said Corporation and hereby
certifies that the matters and facts set forth herein with respect to the
authorization and approval thereof are true in all material respects under the
penalties of perjury.
/s/ Troy D. Butts
-----------------------------------
Troy D. Butts
Senior Vice President and
Chief Financial Officer
<PAGE> 107
ARTICLES SUPPLEMENTARY
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
CLASS G CUMULATIVE PREFERRED STOCK
(PAR VALUE $.01 PER SHARE)
APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation
(hereinafter called the "Corporation"), having its principal office in
Baltimore City, Maryland, hereby certifies to the Department of Assessments and
Taxation of the State of Maryland that:
FIRST: Pursuant to authority expressly vested in the Board of Directors
of the Corporation by Section 1.2 of Article IV of the Charter of the
Corporation, as amended to date (the "Charter"), the Board of Directors has
duly divided and classified 4,050,000 authorized but unissued shares of Class A
Common Stock of the Corporation, par value $.01 per share (the "Class A Common
Stock"), into a class designated as Class G Cumulative Preferred Stock, par
value $.01 per share, and has provided for the issuance of such class.
SECOND: The reclassification increases the number of shares classified as
Class G Cumulative Preferred Stock, par value $.01 per share, from no shares
immediately prior to the reclassification to 4,050,000 shares immediately after
the reclassification. The reclassification decreases the number of shares
classified as Class A Common Stock from 502,377,500 shares immediately prior to
the reclassification to 498,327,500 shares immediately after the
reclassification.
THIRD: The terms of the Class G Cumulative Preferred Stock (including the
preferences, conversions or other rights, voting powers, restrictions,
limitations as to dividends and other distributions, qualifications, or terms
or conditions of redemption) as set by the Board of Directors are as follows:
1. NUMBER OF SHARES AND DESIGNATION.
This class of Preferred Stock shall be designated as Class G Cumulative
Preferred Stock, par value $.01 per share (the "Class G Preferred Stock") and
Four Million Fifty Thousand (4,050,000) shall be the authorized number of
shares of such Class G Preferred Stock constituting such class.
<PAGE> 108
2. DEFINITIONS.
For purposes of the Class G Preferred Stock, the following terms shall
have the meanings indicated:
"Act" shall mean the Securities Act of 1933, as amended.
"affiliate" of a Person means a Person that directly, or indirectly through
one or more intermediaries, controls or is controlled by, or is under
common control with, the Person specified.
"Aggregate Value" shall mean, with respect to any block of Equity Stock,
the sum of the products of (i) the number of shares of each class of Equity
Stock within such block multiplied by (ii) the corresponding Market Price
of one share of Equity Stock of such class.
"Beneficial Ownership" shall mean, with respect to any Person, ownership of
shares of Equity Stock equal to the sum of (i) the number of shares of
Equity Stock directly owned by such Person, (ii) the number of shares of
Equity Stock indirectly owned by such Person (if such Person is an
"individual" as defined in Section 542(a)(2) of the Code) taking into
account the constructive ownership rules of Section 544 of the Code, as
modified by Section 856(h)(1)(B) of the Code, and (iii) the number of
shares of Equity Stock that such Person is deemed to beneficially own
pursuant to Rule 13d-3 under the Exchange Act or that is attributed to such
Person pursuant to Section 318 of the Code, as modified by Section
856(d)(5) of the Code, provided that when applying this definition of
Beneficial Ownership to the Initial Holder, clause (iii) of this
definition, and clause (ii) of the definition of "Person" shall be
disregarded. The terms "Beneficial Owner,""Beneficially Owns" and
"Beneficially Owned" shall have the correlative meanings.
"Board of Directors" shall mean the Board of Directors of the Corporation
or any committee authorized by such Board of Directors to perform any of
its responsibilities with respect to the Class G Preferred Stock.
"Business Day" shall mean any day other than a Saturday, Sunday or a day on
which state or federally chartered banking institutions in New York, New
York are not required to be open.
"Charitable Beneficiary" shall mean one or more beneficiaries of the Trust
as determined pursuant to Section 10.3 of this Article, each of which shall
be an organization described in Section 170(b)(1)(A), 170(c)(2) and
501(c)(3) of the Code.
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"Class G Preferred Stock" shall have the meaning set forth in Section 1 of this
Article.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time to
time, or any successor statute thereto. Reference to any provision of the Code
shall mean such provision as in effect from time to time, as the same may be
amended, and any successor thereto, as interpreted by any applicable
regulations or other administrative pronouncements as in effect from time to
time.
"Common Stock" shall mean the Class A Common Stock, $.01 par value per share,
of the Corporation or such shares of the Corporation's capital stock into which
outstanding shares of Common Stock shall be reclassified.
"Dividend Payment Date" shall mean January 15, April 15, July 15 and October 15
of each year; provided, further, that if any Dividend Payment Date falls on any
day other than a Business Day, the dividend payment payable on such Dividend
Payment Date shall be paid on the Business Day immediately following such
Dividend Payment Date and no interest shall accrue on such dividend from such
date to such Dividend Payment Date.
"Dividend Periods" shall mean the Initial Dividend Period and each subsequent
quarterly dividend period commencing on and including January 15, April 15,
July 15 and October 15 of each year and ending on and including the day
preceding the first day of the next succeeding Dividend Period, other than the
Dividend Period during which any Class G Preferred Stock shall be redeemed
pursuant to Section 5 hereof, which shall end on and include the Redemption
Date with respect to the Class G Preferred Stock being redeemed.
"Equity Stock" shall mean one or more shares of any class of capital stock of
the Corporation.
"Excess Transfer" has the meaning set forth in Section 10.3(A) of this Article.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Issue Date" shall mean July 15, 1998.
"Initial Dividend Period" shall mean the period commencing on and including the
Issue Date and ending on and including October 15, 1998.
"Initial Holder" shall mean Terry Considine.
"Initial Holder Limit" shall mean a number of the Outstanding shares of Class G
Preferred Stock of the Corporation having an Aggregate Value not in excess of
the excess of (x) 15% of the Aggregate Value of all Outstanding shares of
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<PAGE> 110
Equity Stock over (y) the Aggregate Value of all shares of Equity Stock other
than Class G Preferred Stock that are Beneficially Owned by the Initial
Holder. From the Issue Date, the secretary of the Corporation, or such other
person as shall be designated by the Board of Directors, shall upon request
make available to the representative(s) of the Initial Holder and the Board of
Directors, a schedule that sets forth the then-current Initial Holder Limit
applicable to the Initial Holder.
"Junior Stock" shall mean the Common Stock and any other class or series of
capital stock of the Corporation over which the shares of Class G Preferred
Stock have preference or priority in the payment of dividends or in the
distribution of assets on any liquidation, dissolution or winding up of the
Corporation.
"Look-Through Entity" shall mean a Person that is either (i) described in
Section 401(a) of the Code as provided under Section 856(h)(3) of the Code or
(ii) registered under the Investment Company Act of 1940.
"Look-Through Ownership Limit" shall mean, for any Look-Through Entity, a
number of the Outstanding shares of Class G Preferred Stock of the Corporation
having an Aggregate Value not in excess of the excess of (x) 15% of the
Aggregate Value of all Outstanding shares of Equity Stock over (y) by the
Aggregate Value of all shares of Equity Stock other than Class G Preferred
Stock that are Beneficially Owned by the Look-Through Entity.
"Market Price" on any date shall mean, with respect to any share of Equity
Stock, the Closing Price of share of that class of Equity Stock on the Trading
Day immediately preceding such date. The term "Closing Price" on any date
shall mean that last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading on
the NYSE or, if the Equity Stock is not listed or admitted to trading on the
NYSE, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Equity Stock is listed or admitted to trading or, if the Equity
Stock is not listed or admitted to trading on any national securities exchange,
the last quoted price, or if not so quoted, the average of the high bid and
low asked prices in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotation System or, if such
system is no longer in use, the principal other automated quotations system
that may then be in use or, if the Equity Stock is not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Equity Stock selected by the
Board of Directors of the Company. The term "Trading Day" shall mean a day on
which the principal national securities exchange on which
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<PAGE> 111
the Equity Stock is listed or admitted to trading is open for the
transaction of business or, if the Equity Stock is not listed or admitted to
trading on any national securities exchange, shall mean any day other than a
Saturday, a Sunday or a day on which banking institutions in the State of New
York are authorized or obligated by law or executive order to close.
"NYSE" shall mean the New York Stock Exchange, Inc.
"Outstanding" shall mean issued and outstanding shares of Equity Stock of the
Corporation, provided that for purposes of the application of the Ownership
Limit, the Look-Through Ownership Limit or the Initial Holder Limit to any
Person, the term "Outstanding" shall be deemed to include the number of shares
of Equity Stock that such Person alone, at that time, could acquire pursuant to
any options or convertible securities.
"Ownership Limit" shall mean, for any Person other than the Initial Holder or a
Look-Through Entity, a number of the Outstanding shares of Class G Preferred
Stock of the Corporation having an Aggregate Value not in excess of the excess
of (x) 8.7% of the Aggregate Value of all Outstanding shares of Equity Stock
over (y) the Aggregate Value of all shares of Equity Stock other than Class G
Preferred Stock that are Beneficially Owned by the Person.
"Ownership Restrictions" shall mean collectively the Ownership Limit as applied
to Persons other than the Initial Holder or Look-Through Entities, the Initial
Holder Limit as applied to the Initial Holder and the Look-Through Ownership
Limit as applied to Look-Through Entities.
"Parity Stock" shall have the meaning set forth in paragraph (b) of Section 7
of this Article. The Class B Preferred Stock, the Class C Preferred Stock and
the Class D Preferred Stock shall each be a Parity Stock.
"Person" shall mean (a) for purposes of Section 10 of this Article, (i) an
individual, corporation, partnership, estate, trust (including a trust
qualifying under Section 401(a) or 501(c) of the Code), association, private
foundation within the meaning of Section 509(a) of the Code, joint stock
company or other entity, and (ii) also includes a group as that term is used
for purposes of Section 13(d)(3) of the Exchange Act and (b) for purposes of the
remaining Sections of this Article, any individual, firm, partnership,
corporation or other entity and shall include any successor (by merger or
otherwise) of such entity.
"Prohibited Transferee" has the meaning set forth in Section 10.3(A) of this
Article.
"Redemption Date" shall have the meaning set forth in paragraph (b) of Section
5 of this Article.
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"REIT" shall mean a "real estate investment trust" as defined in Section 856 of
the Code.
"Senior Stock" shall have the meaning set forth in paragraph (a) of Section 7
of this Article.
"set apart for payment" shall be deemed to include, without any action other
than the following, the recording by the Corporation in its accounting ledgers
of any accounting or bookkeeping entry which indicates, pursuant to a
declaration of dividends or other distribution by the Board of Directors, the
allocation of funds to be so paid on any series or class of capital stock of
the Corporation; provided, however, that if any funds for any class or series
of Junior Stock or any class or series of Parity Stock are placed in a separate
account of the Corporation or delivered to a disbursing, paying or other
similar agent, then "set apart for payment" with respect to the Class G
Preferred Stock shall mean placing such funds in a separate account or
delivering such funds to a disbursing, paying or other similar agent.
"Trading Day", as to any securities, shall mean any day on which such
securities are traded on the principal national securities exchange on which
such securities are listed or admitted or, if such securities are not listed or
admitted for trading on any national securities exchange, the NASDAQ National
Market or, if such securities are not listed or admitted for trading on the
NASDAQ National Market, in the securities market in which such securities are
traded.
"Transfer" shall mean any sale, transfer, gift, assignment, devise or other
disposition of a share of Class G Preferred Stock (including (i) the granting of
an option or any series of such options or entering into any agreement for the
sale, transfer or other disposition of Class G Preferred Stock or (ii) the
sale, transfer, assignment or other disposition of any securities or rights
convertible into or exchangeable for Class G Preferred Stock), whether
voluntary or involuntary, whether of record or Beneficial Ownership, and
whether by operation of law or otherwise (including, but not limited to, any
transfer of an interest in other entities that results in a change in the
Beneficial Ownership of shares of Class G Preferred Stock). The term
"Transfers" and "Transferred" shall have correlative meanings.
"Transfer Agent" means such transfer agent as may be designated by the Board of
Directors or their designee as the transfer agent for the Class G Preferred
Stock; provided, that if the Corporation has not designated a transfer agent
then the Corporation shall act as the transfer agent for the Class G Preferred
Stock.
"Trust" shall mean the trust created pursuant to Section 10.3 of this Article.
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<PAGE> 113
"Trustee" shall mean the Person unaffiliated with either the Corporation or
the Prohibited Transferee that is appointed by the Corporation to serve as
trustee of the Trust.
"Voting Preferred Stock" shall have the meaning set forth in Section 8 of
this Article.
3. DIVIDENDS.
(a) The holders of Class G Preferred Stock shall be entitled to
receive, when and as declared by the Board of Directors out of funds legally
available for that purpose, cumulative dividends payable in cash in an amount
per share of Class G Preferred Stock equal to $2.34375 per annum. Such
dividends shall be cumulative from the Issue Date, whether or not in any
Dividend Period or Periods such dividends shall be declared or there shall be
funds of the Corporation legally available for the payment of such dividends,
and shall be payable quarterly in arrears on each Dividend Payment Date,
commencing on October 15, 1998. Each such dividend shall be payable in arrears
to the holders of record of the Class G Preferred Stock, as they appear on the
stock records of the Corporation at the close of business on the January 1,
April 1, July 1 or October 1, as the case may be, immediately preceding such
Dividend Payment Date. Accumulated, accrued and unpaid dividends for any past
Dividend Periods may be declared and paid at any time, without reference to any
regular Dividend Payment Date, to holders of record on such date, which date
shall not precede by more than 45 days the payment date thereof, as may be fixed
by the Board of Directors.
(b) Any dividend payable on the Class G Preferred Stock for any
partial dividend period shall be computed ratably on the basis of twelve 30-day
months and a 360-day year. Holders of Class G Preferred Stock shall not be
entitled to any dividends, whether payable in cash, property or stock, in excess
of cumulative dividends, as herein provided, on the Class G Preferred Stock. No
interest, or sum of money in lieu of interest, shall be payable in respect of
any dividend payment or payments on the Class G Preferred Stock that may be in
arrears.
(c) So long as any of the shares of Class G Preferred Stock are
outstanding, except as described in the immediately following sentence, no
dividends shall be declared or paid or set apart for payment by the Corporation
and no other distribution of cash or other property shall be declared or made
directly or indirectly by the Corporation with respect to any class or series of
Parity Stock for any period unless dividends equal to the full amount of
accumulated, accrued and unpaid dividends 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 on the Class G Preferred
Stock for all Dividend Periods terminating on or prior to the Dividend Payment
Date with respect to such class or series of Parity Stock. When dividends are
not paid in full or a sum sufficient for such payment is not set apart, as
aforesaid, all dividends declared upon the Class G Preferred Stock and all
dividends declared upon any
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other class or series of Parity Stock shall be declared ratably in proportion
to the respective amounts of dividends accumulated, accrued and unpaid on the
Class G Preferred Stock and accumulated, accrued and unpaid on such Parity
Stock.
(d) So long as any of the shares of Class G Preferred Stock are
outstanding, no dividends (other than dividends or distributions paid in shares
of, or options, warrants or rights to subscribe for or purchase shares of,
Junior Stock) shall be declared or paid or set apart for payment by the
Corporation and no other distribution of cash or other property shall be
declared or made, directly or indirectly, by the Corporation with respect to
any shares of Junior Stock, nor shall any shares of Junior Stock be redeemed,
purchased or otherwise acquired (other than a redemption, purchase or other
acquisition of Common Stock made for purposes of an employee incentive or
benefit plan of the Corporation or any subsidiary) for any consideration (or
any moneys be paid to or made available for a sinking fund for the redemption
of any shares of any such stock), directly or indirectly, by the Corporation
(except by conversion into or exchange for shares of, or options, warrants or
rights to subscribe for or purchase shares of, Junior Stock), nor shall any
other cash or other property otherwise be paid or distributed to or for the
benefit of any holder of shares of Junior Stock in respect thereof, directly or
indirectly, by the Corporation unless in each case the full cumulative
dividends (including all accumulated, accrued and unpaid dividends) on all
outstanding shares of Class G Preferred Stock shall have been paid or such
dividends have been declared and set apart for payment for all past Dividend
Periods with respect to the Class G Preferred Stock.
Notwithstanding the provisions of this Section 3(d), the Corporation
shall not be prohibited from (i) declaring or paying or setting apart for
payment any dividend or distribution on any shares of Parity Stock or (ii) or
redeeming, purchasing or otherwise acquiring any Parity Stock, in each case, if
such declaration, payment, redemption, purchase or other acquisition is
necessary in order to maintain the continued qualification of the Corporation
as a REIT under Section 856 of the Code.
4. LIQUIDATION PREFERENCE.
(a) In the event of any liquidation, dissolution or winding up of
the Corporation, whether voluntary or involuntary, before any payment or
distribution by the Corporation (whether of capital or surplus) shall be made
to or set apart for the holders of Junior Stock, the holders of shares of Class
G Preferred Stock shall be entitled to receive Twenty-Five Dollars ($25) per
share of Class G Preferred Stock (the "Liquidation Preference"), plus an amount
equal to all dividends (whether or not earned or declared) accumulated, accrued
and unpaid thereon to the date of final distribution to such holders; but such
holders shall not be entitled to any further payment. Until the holders of the
Class G Preferred Stock have been paid the Liquidation Preference in full, plus
an amount equal to all dividends (whether or not earned or declared)
accumulated, accrued and unpaid thereon to the date of final distribution to
such holders, no payment will be made to any holder of Junior Stock upon the
liquidation, dissolution or winding up of the
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Corporation. If, upon any liquidation, dissolution or winding up of the
Corporation, the assets of the Corporation, or proceeds thereof, distributable
among the holders of Class G Preferred Stock shall be insufficient to pay in
full the preferential amount aforesaid and liquidating payments on any other
shares of any class or series of Parity Stock, then such assets, or the
proceeds thereof, shall be distributed among the holders of Class G Preferred
Stock and any such other Parity Stock ratably in the same proportion as the
respective amounts that would be payable on such Class G Preferred Stock and
any such other Parity Stock if all amounts payable thereon were paid in full.
For the purposes of this Section 4, (i) a consolidation or merger of the
Corporation with one or more corporations, (ii) a sale or transfer of all or
substantially all of the Corporation's assets, or (iii) a statutory share
exchange shall not be deemed to be a liquidation, dissolution or winding up,
voluntary or involuntary, of the Corporation.
(b) Upon any liquidation, dissolution or winding up of the
Corporation, after payment shall have been made in full to the holders of Class
G Preferred Stock and any Parity Stock, as provided in this Section 4, any other
series or class or classes of Junior Stock shall, subject to the respective
terms thereof, be entitled to receive any and all assets remaining to be paid or
distributed, and the holders of the Class G Preferred Stock and any Parity Stock
shall not be entitled to share therein.
5. REDEMPTION AT THE OPTION OF THE CORPORATION.
(a) Shares of Class G Preferred Stock shall not be redeemable by the
Corporation prior to July 15, 2008, except as set forth in Section 10.2 of this
Article. On and after July 15, 2008, the Corporation, at its option, may redeem
shares of Class G Preferred Stock, in whole or from time to time in part, at a
redemption price payable in cash equal to 100% of the Liquidation Preference
thereof, plus all accrued and unpaid dividends to the date fixed for redemption
(the "Redemption Date"). In connection with any redemption pursuant to this
Section 5(a), the redemption price of the Class G Preferred Stock (other than
any portion thereof consisting of accrued and unpaid dividends) shall be payable
solely with the proceeds from the sale by the Corporation or AIMCO Properties,
L.P., a Delaware limited Partnership (the "Operating Partnership"), of other
capital shares of the Corporation or the Operating Partnership (whether or not
such sale occurs concurrently with such redemption). For purposes of the
preceding sentence, "capital shares" means any common stock, preferred stock,
depositary shares, partnership or other interests, participations or other
ownership interests (however designated) and any rights (other than debt
securities convertible into or exchangeable at the option of the holder for
equity securities (unless and to the extent such debt securities are
subsequently converted into capital shares)) or options to purchase any of the
foregoing of or in the Corporation or the Operating Partnership.
(b) The Redemption Date shall be selected by the Corporation, shall
be specified in the notice of redemption and shall be not less than 30 days nor
more than 60 days after the date notice of redemption is sent by the
Corporation.
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(c) If full cumulative dividends on all outstanding shares of Class G
Preferred Stock have not been paid or declared and set apart for payment, no
shares of Class G Preferred Stock may be redeemed unless all outstanding shares
of Class G Preferred Stock are simultaneously redeemed and neither the
Corporation nor any affiliate of the Corporation may purchase or acquire shares
of Class G Preferred Stock, otherwise than pursuant to a purchase or exchange
offer made on the same terms to all holders of shares of Class G Preferred
Stock.
(d) If the Corporation shall redeem shares of Class G Preferred Stock
pursuant to paragraph (a) of this Section 5, notice of such redemption shall be
given to each holder of record of the shares to be redeemed. Such notice shall
be provided by first class mail, postage prepaid, at such holder's address as
the same appears on the stock records of the Corporation. Neither the failure
to mail any notice required by this paragraph (d), nor any defect therein or in
the mailing thereof to any particular holder, shall affect the sufficiency of
the notice of the validity of the proceedings for redemption with respect to
the other holders. Any notice which was mailed in the manner herein provided
shall be conclusively presumed to have been duly given on the date mailed
whether or not the holder receives the notice. Each such notice shall state,
as appropriate: (1) the Redemption Date; (2) the number of shares of Class G
Preferred Stock to be redeemed and, if fewer than all such shares held by such
holder are to be redeemed, the number of such shares to be redeemed from such
holder; and (3) the place or places at which certificates for such shares are
to be surrendered for cash. Notice having been mailed as aforesaid, from and
after the Redemption Date (unless the Corporation shall fail to make available
the amount of cash necessary to effect such redemption), (i) except as
otherwise provided herein, dividends on the shares of Class G Preferred Stock
so called for redemption shall cease to accumulate or accrue on the shares of
Class G Preferred Stock called for redemption(except that, in the case of a
Redemption Date after a dividend record date and prior to the related Dividend
Payment Date, holders of Class G Preferred Stock on the dividend record date
will be entitled to such Dividend Payment Date to receive the dividend payable
on such shares), (ii) said shares shall no longer be deemed to be outstanding,
and (iii) all rights of the holders thereof as holders of Class G Preferred
Stock of the Corporation shall cease (except the rights to receive the cash
payable upon such redemption, without interest thereon, upon surrender and
endorsement of their certificates if so required and to receive any dividends
payable thereon). The Corporation's obligation to make available the redemption
price in accordance with the preceding sentence shall be deemed fulfilled if, on
or before the Call Date, the Corporation shall deposit with a bank or trust
company (which may be an affiliate of the Corporation) that has, or is an
affiliate of a bank or trust company that has, a capital and surplus of at least
$50,000,000, such amount of cash as is necessary for such redemption, in trust,
with irrevocable instructions that such cash be applied to the redemption of the
shares of Class G Preferred Stock so called for redemption. No interest shall
accrue for the benefit of the holders of shares of Class G Preferred Stock to
be redeemed on any cash so set aside by the Corporation. Subject to applicable
escheat laws, any such cash unclaimed at the end of two years from the
Redemption Date shall revert to the general funds of the Corporation, after
which reversion the holders of shares of Class G Preferred
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Stock so called for redemption shall look only to the general funds of the
Corporation for the payment of such cash.
As promptly as practicable after the surrender in accordance with such
notice of the certificates for any such shares of Class G Preferred Stock to be
so redeemed (properly endorsed or assigned for transfer, if the Corporation
shall so require and the notice shall so state), such certificates shall be
exchanged for cash (without interest thereon) for which such shares have been
redeemed in accordance with such notice. If fewer than all the outstanding
shares of Class G Preferred Stock are to be redeemed, shares to be redeemed
shall be selected by the Corporation from outstanding shares of Class G
Preferred Stock not previously called for redemption by lot or, with respect to
the number of shares of Class G Preferred Stock held of record by each holder of
such shares, pro rata (as nearly as may be) or by any other method as may be
determined by the Board of Directors in its discretion to be equitable. If
fewer than all the shares of Class G Preferred Stock represented by any
certificate are redeemed, then a new certificate representing the unredeemed
shares shall be issued without cost to the holders thereof.
6. Status of Reacquired Stock.
All shares of Class G Preferred Stock which shall have been issued and
reacquired in any manner by the Corporation shall be returned to the status of
authorized, but unissued shares of Class G Preferred Stock.
7. Ranking.
Any class or series of capital stock of the Corporation shall be deemed to
rank:
(a) prior or senior to the Class G Preferred Stock, as to the payment
of dividends and as to distribution of assets upon liquidation, dissolution or
winding up, if the holders of such class or series shall be entitled to the
receipt of dividends or of amounts distributable upon liquidation, dissolution
or winding up, as the case may be, in preference or priority to the holders of
Class G Preferred Stock ("Senior Stock");
(b) on a parity with the Class G Preferred Stock, as to the payment
of dividends and as to distribution of assets upon liquidation, dissolution or
winding up, whether or not the dividend rates, dividend payment dates or
redemption or liquidation prices per share thereof be different from those of
the Class G Preferred Stock, if the holders of such class of stock or series and
the Class G Preferred Stock shall be entitled to the receipt of dividends and of
amounts distributable upon liquidation, dissolution or winding up in proportion
to their respective amounts of accrued and unpaid dividends per share or
liquidation preferences, without preference or priority one over the other
("Parity Stock"); and
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(c) junior to the Class G Preferred Stock, as to the payment of
dividends or as to the distribution of assets upon liquidation, dissolution or
winding up, if such stock or series shall be Common Stock or if the holders of
Class G Preferred Stock shall be entitled to receipt of dividends or of amounts
distributable upon liquidation, dissolution or winding up, as the case may be,
in preference or priority to the holders of shares of such class or series
("Junior Stock").
8. VOTING.
(a) If and whenever six quarterly dividends (whether or not
consecutive) payable on the Class G Preferred Stock or any series or class of
Parity Stock shall be in arrears (which shall, with respect to any such
quarterly dividend, mean that any such dividend has not been paid in full),
whether or not earned or declared, the number of directors then constituting the
Board of Directors shall be increased by two (if not already increased by reason
of similar types of provisions with respect to shares of Parity Stock of any
other class or series which is entitled to similar voting rights (the "Voting
Preferred Stock")) and the holders of shares of Class G Preferred Stock,
together with the holders of shares of all other Voting Preferred Stock then
entitled to exercise similar voting rights, voting as a single class regardless
of series, shall be entitled to elect the two additional directors to serve on
the Board of Directors at any annual meeting of stockholders or special meeting
held in place thereof, or at a special meeting of the holders of the Class G
Preferred Stock and the Voting Preferred Stock called as hereinafter
provided. Whenever all arrears in dividends on the Class G Preferred Stock and
the Voting Preferred Stock then outstanding shall have been paid and dividends
thereon for the current quarterly dividend period shall have been paid or
declared and set apart for payment, then the right of the holders of the Class G
Preferred Stock and the Voting Preferred Stock to elect such additional two
directors shall cease (but subject always to the same provision for the vesting
of such voting rights in the case of any similar future arrearages), and the
terms of office of all Persons elected as directors by the holders of the Class
G Preferred Stock and the Voting Preferred Stock shall forthwith terminate and
the number of directors constituting the Board of Directors shall be reduced
accordingly. At any time after such voting power shall have been so vested in
the holders of Class G Preferred Stock and the Voting Preferred Stock, if
applicable, the Secretary of the Corporation may, and upon the written request
of any holder of Class G Preferred Stock (addressed to the Secretary at the
principal office of the Corporation) shall, call a special meeting of the
holders of the Class G Preferred Stock and of the Voting Preferred Stock for the
election of the two directors to be elected by them as herein provided, such
call to be made by notice similar to that provided in the Bylaws of the
Corporation for a special meeting of the stockholders or as required by law. If
any such special meeting required to be called as above provided shall not be
called by the Secretary within 20 days after receipt of any such request, then
any holder of Class G Preferred Stock may call such meeting, upon the notice
above provided, and for that purpose shall have access to the stock books of the
Corporation. The directors elected at any such special meeting shall hold
office until the next annual meeting of the stockholders or special meeting held
in lieu thereof if such office shall not have
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previously terminated as above provided. If any vacancy shall occur among the
directors elected by the holders of the Class G Preferred Stock and the Voting
Preferred Stock, a successor shall be elected by the Board of Directors, upon
the nomination of the then-remaining director elected by the holders of the
Class G Preferred Stock and the Voting Preferred Stock or the successor of such
remaining director, to serve until the next annual meeting of the stockholders
or special meeting held in place thereof if such office shall not have
previously terminated as provided above.
(b) So long as any shares of Class G Preferred Stock are
outstanding, in addition to any other vote or consent of stockholders required
by law or by the Charter of the Corporation, the affirmative vote of at least
66-2/3% of the votes entitled to be cast by the holders of the Class G
Preferred Stock voting as a single class with the holders of all other classes
or series of Preferred Stock entitled to vote on such matters, given in Person
or by proxy, either in writing without a meeting or by vote at any meeting
called for the purpose, shall be necessary for effecting or validating:
(i) Any amendment, alteration or repeal of any of the
provisions of these Articles Supplementary, the Charter or the By-Laws of the
Corporation that materially adversely affects the voting powers, rights or
preferences of the holders of the Class G Preferred Stock; provided, however,
that the amendment of the provisions of the Charter so as to authorize or
create, or to increase the authorized amount of, or issue any Junior Stock or
any shares of any class of Parity Stock shall not be deemed to materially
adversely affect the voting powers, rights or preferences of the holders of
Class G Preferred Stock; or
(ii) The authorization, creation of, the increase in the
authorized amount of, or issuance of any shares of any class of Senior Stock or
any security convertible into shares of any class of Senior Stock (whether or
not such class of Senior Stock is currently authorized); provided, however, that
no such vote of the holders of Class G Preferred Stock shall be required if, at
or prior to the time when such amendment, alteration or repeal is to take
effect, or when the issuance of any such prior shares or convertible security
is to be made, as the case may be, provision is made for the redemption of all
shares of Class G Preferred Stock at the time outstanding to the extent such
redemption is authorized by Section 5 of this Article.
For purposes of the foregoing provisions and all other voting rights under
these Articles Supplementary, each share of Class G Preferred Stock shall have
one (1) vote per share, except that when any other class or series of preferred
stock shall have the right to vote with the Class G Preferred Stock as a single
class on any matter, then the Class G Preferred Stock and such other class or
series shall have with respect to such matters one quarter of one(.25) vote per
$25 of stated liquidation preference. Except as otherwise required by
applicable law or as set forth herein, the Class G Preferred Stock shall not
have any relative, participating, optional or other special voting rights and
powers other than as set forth herein, and the consent of the holders thereof
shall not be required for the taking of any corporate action.
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9. RECORD HOLDERS.
The Corporation and the Transfer Agent may deem and treat the record holder
of any share of Class G Preferred Stock as the true and lawful owner thereof for
all purposes, and neither the Corporation nor the Transfer Agent shall be
affected by any notice to the contrary.
10.1 RESTRICTIONS ON OWNERSHIP AND TRANSFERS.
(A) LIMITATION ON BENEFICIAL OWNERSHIP. Except as provided in
Section 10.8, from and after the Issue Date, no Person (other than the Initial
Holder or a Look-Through Entity) shall Beneficially Own shares of Class G
Preferred Stock in excess of the Ownership Limit, the Initial Holder shall not
Beneficially Own shares of Class G Preferred Stock in excess of the Initial
Holder Limit and no Look-Through Entity shall Beneficially Own shares of Class G
Preferred Stock in excess of the Look-Through Ownership Limit.
(B) TRANSFERS IN EXCESS OF OWNERSHIP LIMIT. Except as provided in
Section 10.8, from and after the Issue Date (and subject to Section 10.12), any
Transfer (whether or not such Transfer is the result of transactions entered
into through the facilities of the NYSE or other securities exchange or
automated inter-dealer quotation system) that, if effective, would result in
any Person (other than the Initial Holder or a Look-Through Entity) Beneficially
Owning shares of Class G Preferred Stock in excess of the Ownership Limit shall
be void ab initio as to the Transfer of such shares of Class G Preferred Stock
that would be otherwise Beneficially Owned by such Person in excess of the
Ownership Limit, and the intended transferee shall acquire no rights in such
shares of Class G Preferred Stock.
(C) TRANSFERS IN EXCESS OF INITIAL HOLDER LIMIT. Except as provided
in Section 10.8, from and after the Issue Date (and subject to Section 10.12),
any Transfer (whether or not such Transfer is the result of transactions entered
into through the facilities of the NYSE or other securities exchange or an
automated inter-dealer quotation system) that, if effective, would result in the
Initial Holder Beneficially Owning shares of Class G Preferred Stock in excess
of the Initial Holder Limit shall be void ab initio as to the Transfer of such
shares of Class G Preferred Stock that would be otherwise Beneficially Owned by
the Initial Holder in excess of the Initial Holder limit, and the Initial Holder
shall acquire no rights in such shares of Class G Preferred Stock.
(D) TRANSFERS IN EXCESS OF LOOK-THROUGH OWNERSHIP LIMIT. Except as
provided in Section 10.8 from and after the Issue Date (and subject to Section
10.12), any Transfer (whether or not such Transfer is the result of transactions
entered into through facilities of the NYSE or other securities exchange or an
automated inter-dealer quotation system) that, if effective, would result in any
Look-Through Entity Beneficially Owning shares of Class G Preferred Stock in
excess of the Look-Through Ownership limit shall be void ab initio as to the
Transfer of such shares of Class G
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Preferred Stock that would be otherwise Beneficially Owned by such Look-Through
Entity in excess of the Look-Through Ownership Limit and such Look-Through
Entity shall acquire no rights in such shares of Class G Preferred Stock.
(E) TRANSFERS RESULTING IN "CLOSELY HELD" STATUS. From and after the Issue
Date any Transfer that, if effective would result in the Corporation being
"closely held" within the meaning of Section 856(h) of the Code, or would
otherwise result in the Corporation failing to qualify as a REIT (including
without limitation, a Transfer or other event that would result in the
Corporation owning (directly or constructively) an interest in a tenant that is
described in Section 856(d)(2)(B) of the Code if the income derived by the
Corporation from such tenant would cause the Corporation to fail to satisfy any
of the gross income requirements of Section 856(c) of the Code) shall be void ab
initio as to the Transfer of shares of Class G Preferred Stock that would cause
the Corporation (i) to be "closely held" within the meaning of Section 856(h) of
the Code or (ii) otherwise fail to qualify as a REIT, as the case may be, and
the intended transferee shall acquire no rights in such shares of Class G
Preferred Stock.
(F) SEVERABILITY ON VOID TRANSACTIONS. A Transfer of a share of Class G
Preferred Stock that is null and void under Sections 10.1(B), (C), (D), or (E)
of this Article because it would, if effective, result in (i) the ownership of
Class G Preferred Stock in excess of the Initial Holder Limit, the Ownership
Limit, or the Look-Through Ownership Limit, (ii) the Corporation being "closely
held" within the meaning of Section 856(h) of the Code or (iii) the Corporation
otherwise failing to qualify as a REIT, shall not adversely affect the validity
of the Transfer of any other share of Class G Preferred Stock in the same or
any other related transaction.
10.2 REMEDIES FOR BREACH. If the Board of Directors or a committee thereof
shall at any time determine in good faith that a Transfer or other event has
taken place in violation of Section 10.1 of this Article or that a Person
intends to acquire or has attempted to acquire Beneficial Ownership of any
shares of Class G Preferred Stock in violation of Section 10.1 of this Article
(whether or not such violation is intended), the Board of Directors or a
committee thereof shall be empowered to take any action as it deems advisable
to refuse to give effect to or to prevent such Transfer or other event,
including, but not limited to, refusing to give effect to such Transfer or
other event on the books of the Corporation, causing the Corporation to redeem
such shares at the then current Market Price and upon such terms and conditions
as may be specified by the Board of Directors in its sole discretion
(including, but not limited to, by means of the issuance of long-term
indebtedness for the purpose of such redemption), demanding the repayment of
any distributions received in respect of shares of Class G Preferred Stock
acquired in violation of Section 10.1 of this Article or instituting
proceedings to enjoin such Transfer or to rescind such Transfer or attempted
Transfer; provided, however, that any Transfers or attempted Transfers (or in
the case of events other than a Transfer, Beneficial Ownership) in violation of
Section 10.1 of this Article, regardless of any action (or non-action) by the
Board of Directors or such committee, (a) shall be void ab initio or (b) shall
automatically result in the transfer described in Section 10.3 of this
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Article; provided, further, that the provisions of this Section 10.2 shall be
subject to the provisions of Section 10.12 of this Article; provided, further,
that neither the Board of Directors nor any committee thereof may exercise such
authority in a manner that interferes with any ownership or transfer of Class G
Preferred Stock that is expressly authorized pursuant to Section 10.8(d) of
this Article.
10.3. TRANSFER IN TRUST.
(A) ESTABLISHMENT OF TRUST. If, notwithstanding the other provisions
contained in this Article, at any time after the Issue Date there is a purported
Transfer (an "Excess Transfer") (whether or not such Transfer is the result of
transactions entered into through the facilities of the NYSE or other securities
exchange or an automated interdealer quotation system) or other change in the
capital structure of the Corporation (including, but not limited to, any
redemption of Preferred Stock) or other event (including, but not limited to,
any acquisition of any share of Equity Stock) such that (a) any Person (other
than the Initial Holder or a Look-Through Entity) would Beneficially Own shares
of Class G Preferred Stock in excess of the Ownership Limit, or (b) the Initial
Holder would Beneficially Own shares of Class G Preferred Stock in excess of the
Initial Holder Limit, or (c) any Person that is a Look-Through Entity would
Beneficially Own shares of Class G Preferred Stock in excess of the Look-Through
Ownership Limit (in any such event, the Person, Initial Holder or Look-Through
Entity that would Beneficially Own shares of Class G Preferred Stock in excess
of the Ownership Limit, the Initial Holder Limit or the Look-Through Entity
Limit, respectively, is referred to as a "Prohibited Transferee"), then, except
as otherwise provided in Section 10.8 of this Article, such shares of Class G
Preferred Stock in excess of the Ownership Limit, the Initial Holder Limit or
the Look-Through Ownership Limit, as the case may be, (rounded up to the nearest
whole share) shall be automatically transferred to a Trustee in his capacity as
trustee of a Trust for the exclusive benefit of one or more Charitable
Beneficiaries. Such transfer to the Trustee shall be deemed to be effective as
of the close of business on the business day prior to the Excess Transfer,
change in capital structure or another event giving rise to a potential
violation of the Ownership Limit, the Initial Holder Limit or the Look-Through
Entity Ownership Limit.
(B) APPOINTMENT OF TRUSTEE. The Trustee shall be appointed by the
Corporation and shall be a Person unaffiliated with either the Corporation or
any Prohibited Transferee. The Trustee may be an individual or a bank or trust
company duly licensed to conduct a trust business.
(C) STATUS OF SHARES HELD BY THE TRUSTEE. Shares of Class G
Preferred Stock held by the Trustee shall be issued and outstanding shares of
capital stock of the Corporation. Except to the extent provided in Section
10.3(E), the Prohibited Transferee shall have no rights in the Class G
Preferred Stock held by the Trustee, and the Prohibited Transferee shall not
benefit economically from ownership of any shares held in trust by the Trustee,
shall have no rights to dividends and shall not possess any rights to vote or
other rights attributable to the shares held in the Trust.
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(D) DIVIDEND AND VOTING RIGHTS. The Trustee shall have all voting rights
and rights to dividends with respect to shares of Class G Preferred Stock held
in the Trust, which rights shall be exercised for the benefit of the Charitable
Beneficiary. Any dividend or distribution paid prior to the discovery by the
Corporation that the shares of Class G Preferred Stock have been transferred to
the Trustee shall be repaid to the Corporation upon demand, and any dividend or
distribution declared but unpaid shall be rescinded as void ab initio with
respect to such shares of Class G Preferred Stock. Any dividends or
distributions so disgorged or rescinded shall be paid over to the Trustee and
held in trust for the Charitable Beneficiary. Any vote cast by a Prohibited
Transferee prior to the discovery by the Corporation that the shares of Class G
Preferred Stock have been transferred to the Trustee will be rescinded as void
ab initio and shall be recast in accordance with the desires of the Trustee
acting for the benefit of the Charitable Beneficiary. The owner of the shares at
the time of the Excess Transfer, change in capital structure or other event
giving rise to a potential violation of the Ownership Limit, Initial Holder
Limit or Look-Through Entity Ownership Limit shall be deemed to have given an
irrevocable proxy to the Trustee to vote the shares of Class G Preferred Stock
for the benefit of the Charitable Beneficiary.
(E) RESTRICTIONS ON TRANSFER. The Trustee of the Trust may sell the
shares held in the Trust to a person, designated by the Trustee, whose
ownership of the shares will not violate the Ownership Restrictions. If such a
sale is made, the interest of the Charitable Beneficiary shall terminate and
proceeds of the sale shall be payable to the Prohibited Transferee and to the
Charitable Beneficiary as provided in this Section 10.3(E). The Prohibited
Transferee shall receive the lesser of (1) the price paid by the Prohibited
Transferee for the shares or, if the Prohibited Transferee did not give value
for the shares (through a gift, devise or other transaction), the Market Price
of the shares on the day of the event causing the shares to be held in the
Trust and (2) the price per share received by the Trustee from the sale or
other disposition of the shares held in the Trust. Any proceeds in excess of
the amount payable to the Prohibited Transferee shall be payable to the
Charitable Beneficiary. If any of the transfer restrictions set forth in this
Section 10.3(E) or any application thereof is determined in a final judgement
to be void, invalid or unenforceable by any court having jurisdiction over the
issue, the Prohibited Transferee may be deemed, at the option of the
Corporation, to have acted as the agent of the Corporation in acquiring the
Class G Preferred Stock as to which such restrictions would, by their terms,
apply, and to hold such Class G Preferred Stock on behalf of the Corporation.
(F) PURCHASE RIGHT IN STOCK TRANSFERRED TO THE TRUSTEE. Shares of
Class G Preferred Stock transferred to the Trustee shall be deemed to have been
offered for sale to the Corporation, or its designee, at a price per share
equal to the lesser of (i) the price per share in the transaction that resulted
in such transfer to the Trust (or, in the case of a devise or gift, the Market
Price at the time of such devise or gift) and (ii) the Market Price on the date
the Corporation, or its designee, accepts such offer. The Corporation shall
have the right to accept such offer for a period of 90 days after the later of
(i) the date of the Excess Transfer or other event resulting in a transfer to
the Trust and
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(ii) the date that the Board of Directors determines in good faith that an
Excess Transfer or other event occurred.
(G) DESIGNATION OF CHARITABLE BENEFICIARIES. By written notice
to the Trustee, the Corporation shall designate one or more nonprofit
organizations to be the Charitable Beneficiary of the interest in the Trust
relating to such Prohibited Transferee if (i) the shares of Class G Preferred
Stock held in the Trust would not violate the Ownership Restrictions in the
hands of such Charitable Beneficiary and (ii) each Charitable Beneficiary is an
organization described in Sections 170(b)(1)(A), 170(c)(2) and 501(c)(3) of the
Code.
10.4 NOTICE OF RESTRICTED TRANSFER. Any Person that acquires or
attempts to acquire shares of Class G Preferred Stock in violation of Section
10.1 of this Article, or any Person that is a Prohibited Transferee such that
stock is transferred to the Trustee under Section 10.3 of this Article, shall
immediately give written notice to the Corporation of such event and shall
provide to the Corporation such other information as the Corporation may
request in order to determine the effect, if any, of such Transfer or attempted
Transfer or other event on the Corporations's status as a REIT. Failure to
give such notice shall not limit the rights and remedies of the Board of
Directors provided herein in any way.
10.5 OWNERS REQUIRED TO PROVIDE INFORMATION. From and after the Issue
Date certain record and Beneficial Owners and transferees of shares of Class G
Preferred Stock will be required to provide certain information as set out
below.
(A) ANNUAL DISCLOSURE. Every record and Beneficial Owner of
more than 5% (or such other percentage between 0.5% and 5%, as provided in the
applicable regulations adopted under the Code) of the number of Outstanding
shares of Class G Preferred Stock shall, within 30 days after January 1 of each
year, give written notice to the Corporation stating the name and address of
such record or Beneficial Owner, the number of shares of Class G Preferred
Stock Beneficially Owned, and a full description of how such shared are held.
Each such record or Beneficial Owner of Class G Preferred Stock shall, upon
demand by the Corporation, disclose to the Corporation in writing such
additional information with respect to the Beneficial Ownership of the Class G
Preferred Stock as the Board of Directors, in its sole discretion, deems
appropriate or necessary to (i) comply with the provisions of the Code
regarding the qualification of the Corporation as a REIT under the Code and
(ii) ensure compliance with the Ownership Limit, the Initial Holder Limit or
the Look-Through Ownership Limit, as applicable. Each stockholder of record,
including without limitation any Person that holds shares of Class G Preferred
Stock on behalf of a Beneficial Owner, shall take all reasonable steps to
obtain the written notice described in this Section 10.5 from the Beneficial
Owner.
(B) DISCLOSURE AT THE REQUEST OF THE CORPORATION. Any Person
that is a Beneficial Owner of shares of Class G Preferred Stock and any Person
(including the stockholder of record) that is holding shares of Class G
Preferred Stock for a Beneficial
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Owner, and any proposed transferee of shares, shall provide such information as
the Corporation, in its sole discretion, may request in order to determine the
Corporation's status as a REIT, to comply with the requirements of any taxing
authority or other governmental agency, to determine any such compliance or to
ensure compliance with the Ownership Limit, the Initial Holder Limit and the
Look-Through Ownership Limit, and shall provide a statement or affidavit to the
Corporation setting forth the number of shares of Class G Preferred Stock
already Beneficially Owned by such stockholder or proposed transferee and any
related persons specified, which statement or affidavit shall be in the form
prescribed by the Corporation for that purpose.
10.6 REMEDIES NOT LIMITED. Nothing contained in this Article shall
limit the authority of the Board of Directors to take such other action as it
deems necessary or advisable (subject to the provisions of Section 10.12 of
this Article) (i) to protect the Corporation and the interests of its
stockholders in the preservation of the Corporation's status as a REIT and (ii)
to insure compliance with the Ownership Limit, the Initial Holder Limit and the
Look-Through Ownership Limit.
10.7 AMBIGUITY. In the case of an ambiguity in the application of any
of the provisions of Section 10 of this Article, or in the case of an ambiguity
in any definition contained in Section 10 of this Article, the Board of
Directors shall have the power to determine the application of the provisions
of this Article with respect to any situation based on its reasonable belief,
understanding or knowledge of the circumstances.
10.8 EXPECTATIONS. The following exceptions shall apply or may be
established with respect to the limitations of Section 10.1 of this Article.
(A) WAIVER OF OWNERSHIP LIMIT. The Board of Directors, upon
receipt of a ruling from the Internal Revenue Service or an opinion of tax
counsel or other evidence or undertaking acceptable to it, may waive the
application, in whole or in part, of the Ownership Limit to a Person subject to
the Ownership Limit, if such person is not an individual for purposes of
Section 542(a) of the Code and is a corporation, partnership, estate or trust.
In connection with any such exemption, the Board of Directors may require such
representations and undertakings from such Person and may impose such other
conditions as the Board of Directors deems necessary, in its sole discretion,
to determine the effect, if any, of the proposed Transfer on the Corporation's
status as a REIT.
(B) PLEDGE BY INITIAL HOLDER. Notwithstanding any other
provision of this Article, the pledge by the Initial Holder of all or any
portion of the Class G Preferred Stock directly owned at any time or from time
to time shall not constitute a violation of Section 10.1 of this Article and the
pledgee shall not be subject to the Ownership Limit with respect to the Class G
Preferred Stock so pledged to it either as a result of the pledge or upon
foreclosure.
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(C) UNDERWRITERS. For a period of 270 days following the purchase
of Class G Preferred Stock by an underwriter that (i) is a corporation or a
partnership and (ii) participates in an offering of the Class G Preferred
Stock, such underwriter shall not be subject to the Ownership Limit with
respect to the Class G Preferred Stock purchased by it as a part of or in
connection with such offering and with respect to any Class G Preferred Stock
purchased in connection with market making activities.
10.9 LEGEND. Each certificate for Class G Preferred Stock shall bear the
following legend:
"The shares of Class G Cumulative Preferred Stock
represented by this certificate are subject to restrictions on transfer.
No person may Beneficially Own shares of Class G Cumulative Preferred
Stock in excess of the Ownership Restrictions, as applicable, with certain
further restrictions and exceptions set forth in the Charter (including
the Articles Supplementary setting forth the terms of the Class G
Cumulative Preferred Stock). Any Person that attempts to Beneficially
Own shares of Class G Cumulative Preferred Stock in excess of the
applicable limitation must immediately notify the Corporation. All
capitalized terms in this legend have the meanings ascribed to such terms
in the Charter (including the Articles Supplementary setting forth the
terms of the Class G Cumulative Preferred Stock), as the same may be
amended from time to time, a copy of which, including the restrictions on
transfer, will be sent without charge to each stockholder that so requests.
If the restrictions on transfer are violated (i) the transfer of the
shares of Class G Cumulative Preferred Stock represented hereby will be
void in accordance with the Charter (including the Articles Supplementary
setting forth the terms of the Class G Cumulative Preferred Stock) or (ii)
the shares of Class G Cumulative Preferred Stock represented hereby will
automatically be transferred to a Trustee of a Trust for the benefit of one
or more Charitable Beneficiaries."
10.10 SEVERABILITY. If any provision of this Article or any
application of any such provision is determined in a final and unappealable
judgment to be void, invalid or unenforceable by any Federal or state court
having jurisdiction over the issues, the validity and enforceability of the
remaining provisions shall not be affected and other applications of such
provision shall be affected only to the extent necessary to comply with the
determination of such court.
10.11 BOARD OF DIRECTORS DISCRETION. Anything in this Article to the
contrary notwithstanding, the Board of Directors shall be entitled to take or
omit to take such actions as it in its discretion shall determine to be
advisable in order that the Corporation maintain its status as and continue to
qualify as a REIT, including, but not limited to, reducing the Ownership Limit,
the Initial Holder Limit and the Look-Through Ownership Limit in the event of a
change in law.
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10.12 SETTLEMENT. Nothing in this Section 10 of this Article shall
be interpreted to preclude the settlement of any transaction entered into
through the facilities of the NYSE or other securities exchange or an automated
inter-dealer quotation system.
FOURTH: The terms of the Class G Cumulative Preferred Stock set forth in
Article Third hereof shall become Article XVI of the Charter.
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IN WITNESS WHEREOF, the Corporation has caused these presents to be signed
in its name and on its behalf by its Senior Vice President and Chief Financial
Officer and witnessed by its Secretary on July 13, 1998.
WITNESS: APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
/s/ JOEL BONDER /s/ TROY D. BUTTS
- ------------------------------ -----------------------------
Joel Bonder Troy D. Butts
Secretary Senior Vice President and
Chief Financial Officer
THE UNDERSIGNED, Senior Vice President and Chief Financial Officer of
APARTMENT INVESTMENT AND MANAGEMENT COMPANY, who executed on behalf of the
Corporation the Articles Supplementary of which this Certificate is made a
part, hereby acknowledges in the name and on behalf of said Corporation the
foregoing Articles Supplementary to be the corporate act of said Corporation
and hereby certifies that the matters and facts set forth herein with respect
to the authorization and approval thereof are true in all material respects
under the penalties of perjury.
/s/ TROY D. BUTTS
-----------------------------
Troy D. Butts
Senior Vice President and
Chief Financial Officer
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ARTICLES SUPPLEMENTARY
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
CLASS H CUMULATIVE PREFERRED STOCK
(PAR VALUE $.01 PER SHARE)
APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation
(hereinafter called the "Corporation"), having its principal office in
Baltimore City, Maryland, hereby certifies to the Department of Assessments and
Taxation of the State of Maryland that:
FIRST: Pursuant to authority expressly vested in the Board of
Directors of the Corporation by Section 1.2 of Article IV of the Charter of the
Corporation, as amended to date (the "Charter"), the Board of Directors has
duly divided and classified 2,300,000 authorized but unissued shares of Class A
Common Stock of the Corporation, par value $.01 per share (the "Class A Common
Stock"), into a class designated as Class H Cumulative Preferred Stock, par
value $.01 per share, and has provided for the issuance of such class.
SECOND: The reclassification increases the number of shares classified
as Class H Cumulative Preferred Stock, par value $.01 per share, from no shares
immediately prior to the reclassification to 2,300,000 shares immediately after
the reclassification. The reclassification decreases the number of shares
classified as Class A Common Stock from 498,327,500 shares immediately prior to
the reclassification to 496,027,500 shares immediately after the
reclassification.
THIRD: The terms of the Class H Cumulative Preferred Stock (including
the preferences, conversions or other rights, voting powers, restrictions,
limitations as to dividends and other distributions, qualifications, or terms
or conditions of redemption) as set by the Board of Directors are as follows:
1. NUMBER OF SHARES AND DESIGNATION.
This class of Preferred Stock shall be designated as Class H Cumulative
Preferred Stock, par value $.01 per share (the "Class H Preferred Stock") and
Two Million Three Hundred Thousand (2,300,000) shall be the authorized number
of shares of such Class H Preferred Stock constituting such class.
2. DEFINITIONS.
For purposes of the Class H Preferred Stock, the following terms shall
have the meanings indicated:
<PAGE> 130
"Act" shall mean the Securities Act of 1933, as amended.
"affiliate" of a Person means a Person that directly, or indirectly
through one or more intermediaries, controls or is controlled by, or
is under common control with, the Person specified.
"Aggregate Value" shall mean, with respect to any block of Equity
Stock, the sum of the products of (i) the number of shares of each
class of Equity Stock within such block multiplied by (ii) the
corresponding Market Price of one share of Equity Stock of such class.
"Beneficial Ownership" shall mean, with respect to any Person,
ownership of shares of Equity Stock equal to the sum of (i) the number
of shares of Equity Stock directly owned by such Person, (ii) the
number of shares of Equity Stock indirectly owned by such Person (if
such Person is an "individual" as defined in Section 542(a)(2) of the
Code) taking into account the constructive ownership rules of Section
544 of the Code, as modified by Section 856(h)(1)(B) of the Code, and
(iii) the number of shares of Equity Stock that such Person is deemed
to beneficially own pursuant to Rule 13d-3 under the Exchange Act or
that is attributed to such Person pursuant to Section 318 of the Code,
as modified by Section 856(d)(5) of the Code, provided that when
applying this definition of Beneficial Ownership to the Initial
Holder, clause (iii) of this definition, and clause (a) (ii) of the
definition of "Person" shall be disregarded. The terms "Beneficial
Owner," "Beneficially Owns" and "Beneficially Owned" shall have the
correlative meanings.
"Board of Directors" shall mean the Board of Directors of the
Corporation or any committee authorized by such Board of Directors to
perform any of its responsibilities with respect to the Class H
Preferred Stock; provided that, for purposes of paragraph (a) of
Section 8 of this Article, the term "Board of Directors" shall not
include any such committee.
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which state or federally chartered banking institutions in New
York, New York are not required to be open.
"Charitable Beneficiary" shall mean one or more beneficiaries of the
Trust as determined pursuant to Section 10.3 of this Article, each of
which shall be an organization described in Section 170(b)(1)(A),
170(c)(2) and 501(c)(3) of the Code.
"Class H Preferred Stock" shall have the meaning set forth in Section
1 of this Article.
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"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, or any successor statute thereto. Reference to any
provision of the Code shall mean such provision as in effect from time
to time, as the same may be amended, and any successor thereto, as
interpreted by any applicable regulations or other administrative
pronouncements as in effect from time to time.
"Common Stock" shall mean the Class A Common Stock, $.01 par value per
share, of the Corporation, and the Class B Common Stock, $.01 par
value per share, of the Corporation and such other shares of the
Corporation's capital stock into which outstanding shares of such
Class A Common Stock or Class B Common Stock shall be reclassified.
"Dividend Payment Date" shall mean January 15, April 15, July 15 and
October 15 of each year; provided, that if any Dividend Payment Date
falls on any day other than a Business Day, the dividend payment
payable on such Dividend Payment Date shall be paid on the Business
Day immediately following such Dividend Payment Date and no interest
shall accrue on such dividend from such date to such Dividend Payment
Date.
"Dividend Periods" shall mean the Initial Dividend Period and each
subsequent quarterly dividend period commencing on and including
January 15, April 15, July 15 and October 15 of each year and ending
on and including the day preceding the first day of the next
succeeding Dividend Period, other than the Dividend Period during
which any Class H Preferred Stock shall be redeemed pursuant to
Section 5 hereof, which shall end on and include the Redemption Date
with respect to the Class H Preferred Stock being redeemed.
"Equity Stock" shall mean one or more shares of any class of capital
stock of the Corporation.
"Excess Transfer" has the meaning set forth in Section 10.3(A) of this
Article.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Issue Date" shall mean August 14, 1998.
"Initial Dividend Period" shall mean the period commencing on and
including the Issue Date and ending on and including October 14, 1998.
"Initial Holder" shall mean Terry Considine.
"Initial Holder Limit" shall mean a number of the Outstanding shares
of Class H Preferred Stock of the Corporation having an Aggregate
Value not in excess of the excess of (x) 15% of the Aggregate Value of
all Outstanding shares of
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Equity Stock over (y) the Aggregate Value of all shares of Equity
Stock other than Class H Preferred Stock that are Beneficially Owned
by the Initial Holder. From the Issue Date, the secretary of the
Corporation, or such other person as shall be designated by the Board
of Directors, shall upon request make available to the
representative(s) of the Initial Holder and the Board of Directors, a
schedule that sets forth the then-current Initial Holder Limit
applicable to the Initial Holder.
"Junior Stock" shall have the meaning set forth in paragraph (c) of
Section 7 of this Article.
"Look-Through Entity" shall mean a Person that is either (i) described
in Section 401(a) of the Code as provided under Section 856(h)(3) of
the Code or (ii) registered under the Investment Company Act of 1940.
"Look-Through Ownership Limit" shall mean, for any Look-Through
Entity, a number of the Outstanding shares of Class H Preferred Stock
of the Corporation having an Aggregate Value not in excess of the
excess of (x) 15% of the Aggregate Value of all Outstanding shares of
Equity Stock over (y) the Aggregate Value of all shares of Equity
Stock other than Class H Preferred Stock that are Beneficially Owned
by the Look-Through Entity.
"Market Price" on any date shall mean, with respect to any share of
Equity Stock, the Closing Price of a share of that class of Equity
Stock on the Trading Day immediately preceding such date. The term
"Closing Price," when used with respect to a share of any Equity Stock
and for any date, shall mean the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing
bid and asked prices, regular way, in either case, as reported in the
principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the NYSE or, if the Equity
Stock is not listed or admitted to trading on the NYSE, as reported in
the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on
which the Equity Stock is listed or admitted to trading or, if the
Equity Stock is not listed or admitted to trading on any national
securities exchange, the last quoted price, or if not so quoted, the
average of the high bid and low asked prices in the over-the-counter
market, as reported by the National Association of Securities Dealers,
Inc. Automated Quotation System or, if such system is no longer in
use, the principal other automated quotations system that may then be
in use or, if the Equity Stock is not quoted by any such organization,
the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Equity Stock selected
by the Board of Directors of the Corporation. The term "Trading Day,"
when used with respect to the Closing Price of a share of any Equity
Stock, shall mean (i) if the Equity Stock is listed or admitted to
trading on the NYSE, a day on which the NYSE is open for the
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transaction of business, (ii) if the Equity Stock is not listed or
admitted to trading on the NYSE but is listed or admitted to trading
on another national securities exchange or automated quotation system,
a day on which the principal national securities exchange or automated
quotation system, as the case may be, on which the Equity Stock is
listed or admitted to trading is open for the transaction of business,
or (iii) if the Equity Stock is not listed or admitted to trading on
any national securities exchange or automated quotation system, any
day other than a Saturday, a Sunday or a day on which banking
institutions in the State of New York are authorized or obligated by
law or executive order to close.
"NYSE" shall mean the New York Stock Exchange, Inc.
"Operating Partnership" shall mean AIMCO Properties, L.P., a Delaware
limited partnership.
"Outstanding" shall mean issued and outstanding shares of Equity Stock
of the Corporation, provided that for purposes of the application of
the Ownership Limit, the Look-Through Ownership Limit or the Initial
Holder Limit to any Person, the term "Outstanding" shall be deemed to
include the number of shares of Equity Stock that such Person alone,
at that time, could acquire pursuant to any options or convertible
securities.
"Ownership Limit" shall mean, for any Person other than the Initial
Holder or a Look-Through Entity, a number of the Outstanding shares of
Class H Preferred Stock of the Corporation having an Aggregate Value
not in excess of the excess of (x) 8.7% of the Aggregate Value of all
Outstanding shares of Equity Stock over (y) the Aggregate Value of all
shares of Equity Stock other than Class H Preferred Stock that are
Beneficially Owned by the Person.
"Ownership Restrictions" shall mean collectively the Ownership Limit
as applied to Persons other than the Initial Holder or Look-Through
Entities, the Initial Holder Limit as applied to the Initial Holder
and the Look-Through Ownership Limit as applied to Look-Through
Entities.
"Parity Stock" shall have the meaning set forth in paragraph (b) of
Section 7 of this Article.
"Person" shall mean (a) for purposes of Section 10 of this Article,
(i) an individual, corporation, partnership, estate, trust (including
a trust qualifying under Section 401(a) or 501(c) of the Code),
association, private foundation within the meaning of Section 509(a)
of the Code, joint stock company or other entity, and (ii) also
includes a group as that term is used for purposes of Section 13(d)(3)
of the Exchange Act and (b) for purposes of the remaining
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<PAGE> 134
Sections of this Article, any individual, firm, partnership,
corporation or other entity and shall include any successor (by merger
or otherwise) of such entity.
"Prohibited Transferee" has the meaning set forth in Section 10.3(A)
of this Article.
"Redemption Date" shall have the meaning set forth in paragraph (a) of
Section 5 of this Article.
"REIT" shall mean a "real estate investment trust" as defined in
Section 856 of the Code.
"Senior Stock" shall have the meaning set forth in paragraph (a) of
Section 7 of this Article.
"set apart for payment" shall be deemed to include, without any action
other than the following, the recording by the Corporation in its
accounting ledgers of any accounting or bookkeeping entry which
indicates, pursuant to a declaration of dividends or other
distribution by the Board of Directors, the allocation of funds to be
so paid on any series or class of capital stock of the Corporation;
provided, however, that if any funds for any class or series of Junior
Stock or any class or series of Parity Stock are placed in a separate
account of the Corporation or delivered to a disbursing, paying or
other similar agent, then "set apart for payment" with respect to the
Class H Preferred Stock shall mean placing such funds in a separate
account or delivering such funds to a disbursing, paying or other
similar agent.
"Transfer" shall mean any sale, transfer, gift, assignment, devise or
other disposition of a share of Class H Preferred Stock (including (i)
the granting of an option or any series of such options or entering
into any agreement for the sale, transfer or other disposition of
Class H Preferred Stock or (ii) the sale, transfer, assignment or
other disposition of any securities or rights convertible into or
exchangeable for Class H Preferred Stock), whether voluntary or
involuntary, whether of record or Beneficial Ownership, and whether by
operation of law or otherwise (including, but not limited to, any
transfer of an interest in other entities that results in a change in
the Beneficial Ownership of shares of Class H Preferred Stock). The
term "Transfers" and "Transferred" shall have correlative meanings.
"Transfer Agent" means such transfer agent as may be designated by the
Board of Directors or their designee as the transfer agent for the
Class H Preferred Stock; provided, that if the Corporation has not
designated a transfer agent then the Corporation shall act as the
transfer agent for the Class H Preferred Stock.
"Trust" shall mean the trust created pursuant to Section 10.3 of this
Article.
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<PAGE> 135
"Trustee" shall mean the Person unaffiliated with either the
Corporation or the Prohibited Transferee that is appointed by the
Corporation to serve as trustee of the Trust.
"Voting Preferred Stock" shall have the meaning set forth in Section 8
of this Article.
3. DIVIDENDS.
(a) The holders of Class H Preferred Stock shall be
entitled to receive, when and as declared by the Board of Directors out of
funds legally available for that purpose, cumulative dividends payable in cash
in an amount per share of Class H Preferred Stock equal to $2.375 per annum
(equivalent to 9 1/2% per annum of the per share Liquidation Preference (as
hereinafter defined)). Such dividends shall be cumulative from the Issue Date,
whether or not in any Dividend Period or Periods such dividends shall be
declared or there shall be funds of the Corporation legally available for the
payment of such dividends, and shall be payable quarterly in arrears on each
Dividend Payment Date, commencing on October 15, 1998. Each such dividend
shall be payable in arrears to the holders of record of the Class H Preferred
Stock, as they appear on the stock records of the Corporation at the close of
business on the January 1, April 1, July 1 or October 1, as the case may be,
immediately preceding such Dividend Payment Date. Accumulated, accrued and
unpaid dividends for any past Dividend Periods may be declared and paid at any
time, without reference to any regular Dividend Payment Date, to holders of
record on such date, which date shall not precede by more than 45 days the
payment date thereof, as may be fixed by the Board of Directors.
(b) Any dividend payable on the Class H Preferred Stock
for any partial dividend period shall be computed ratably on the basis of
twelve 30-day months and a 360-day year. Holders of Class H Preferred Stock
shall not be entitled to any dividends, whether payable in cash, property or
stock, in excess of full cumulative dividends, as herein provided, on the Class
H Preferred Stock. No interest, or sum of money in lieu of interest, shall be
payable in respect of any dividend payment or payments on the Class H Preferred
Stock that may be in arrears.
(c) So long as any of the shares of Class H Preferred
Stock are outstanding, except as described in the immediately following
sentence, no dividends shall be declared or paid or set apart for payment by
the Corporation and no other distribution of cash or other property shall be
declared or made, directly or indirectly, by the Corporation with respect to
any shares of Parity Stock unless, in each case, dividends equal to the full
amount of accumulated, accrued and unpaid dividends on all outstanding shares
of Class H Preferred Stock 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 payment of such dividends on the Class H
Preferred Stock for all Dividend Periods ending on or prior to the date such
dividend
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<PAGE> 136
or distribution is declared, paid, set apart for payment or made, as the case
may be, with respect to such shares of Parity Stock. When dividends are not
paid in full or a sum sufficient for such payment is not set apart, as
aforesaid, all dividends declared upon the Class H Preferred Stock and all
dividends declared upon any shares of Parity Stock shall be declared ratably in
proportion to the respective amounts of dividends accumulated, accrued and
unpaid on the Class H Preferred Stock and accumulated, accrued and unpaid on
such Parity Stock.
(d) So long as any of the shares of Class H Preferred
Stock are outstanding, no dividends (other than dividends or distributions paid
in shares of, or options, warrants or rights to subscribe for or purchase
shares of, Junior Stock) shall be declared or paid or set apart for payment by
the Corporation and no other distribution of cash or other property shall be
declared or made, directly or indirectly, by the Corporation with respect to
any shares of Junior Stock, nor shall any shares of Junior Stock be redeemed,
purchased or otherwise acquired (other than a redemption, purchase or other
acquisition of Common Stock made for purposes of an employee incentive or
benefit plan of the Corporation or any subsidiary) for any consideration (or
any moneys be paid to or made available for a sinking fund for the redemption
of any shares of any such stock), directly or indirectly, by the Corporation
(except by conversion into or exchange for shares of, or options, warrants or
rights to subscribe for or purchase shares of, Junior Stock), nor shall any
other cash or other property otherwise be paid or distributed to or for the
benefit of any holder of shares of Junior Stock in respect thereof, directly or
indirectly, by the Corporation unless, in each case, dividends equal to the
full amount of all accumulated, accrued and unpaid dividends on all outstanding
shares of Class H Preferred Stock have been declared and paid, or such
dividends have been declared and a sum sufficient for the payment thereof has
been set apart for such payment, on all outstanding shares of Class H Preferred
Stock for all Dividend Periods ending on or prior to the date such dividend or
distribution is declared, paid, set apart for payment or made with respect to
such shares of Junior Stock, or the date such shares of Junior Stock are
redeemed, purchased or otherwise acquired or monies paid to or made available
for any sinking fund for such redemption, or the date any such cash or other
property is paid or distributed to or for the benefit of any holders of Junior
Stock in respect thereof, as the case may be.
Notwithstanding the provisions of this Section 3, the
Corporation shall not be prohibited from (i) declaring or paying or setting
apart for payment any dividend or distribution on any shares of Parity Stock or
(ii) or redeeming, purchasing or otherwise acquiring any Parity Stock, in each
case, if such declaration, payment, redemption, purchase or other acquisition
is necessary in order to maintain the continued qualification of the
Corporation as a REIT under Section 856 of the Code.
4. LIQUIDATION PREFERENCE.
(a) In the event of any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, before any
payment or distribution by
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the Corporation (whether of capital, surplus or otherwise) shall be made to or
set apart for the holders of Junior Stock, the holders of shares of Class H
Preferred Stock shall be entitled to receive Twenty-Five Dollars ($25) per
share of Class H Preferred Stock (the "Liquidation Preference"), plus an amount
equal to all dividends (whether or not earned or declared) accumulated, accrued
and unpaid thereon to the date of final distribution to such holders; but such
holders shall not be entitled to any further payment. Until the holders of the
Class H Preferred Stock have been paid the Liquidation Preference in full, plus
an amount equal to all dividends (whether or not earned or declared)
accumulated, accrued and unpaid thereon to the date of final distribution to
such holders, no payment will be made to any holder of Junior Stock upon the
liquidation, dissolution or winding up of the Corporation. If, upon any
liquidation, dissolution or winding up of the Corporation, the assets of the
Corporation, or proceeds thereof, distributable among the holders of Class H
Preferred Stock shall be insufficient to pay in full the preferential amount
aforesaid and liquidating payments on any other shares of any class or series
of Parity Stock, then such assets, or the proceeds thereof, shall be
distributed among the holders of Class H Preferred Stock and any such other
Parity Stock ratably in the same proportion as the respective amounts that
would be payable on such Class H Preferred Stock and any such other Parity
Stock if all amounts payable thereon were paid in full. For the purposes of
this Section 4, (i) a consolidation or merger of the Corporation with one or
more corporations, (ii) a sale or transfer of all or substantially all of the
Corporation's assets, or (iii) a statutory share exchange shall not be deemed
to be a liquidation, dissolution or winding up, voluntary or involuntary, of
the Corporation.
(b) Upon any liquidation, dissolution or winding up of
the Corporation, after payment shall have been made in full to the holders of
Class H Preferred Stock and any Parity Stock, as provided in this Section 4,
any other series or class or classes of Junior Stock shall, subject to the
respective terms thereof, be entitled to receive any and all assets remaining
to be paid or distributed, and the holders of the Class H Preferred Stock and
any Parity Stock shall not be entitled to share therein.
5. REDEMPTION AT THE OPTION OF THE CORPORATION.
(a) Shares of Class H Preferred Stock shall not be
redeemable by the Corporation prior to August 14, 2003, except as set forth in
Section 10.2 of this Article. On and after August 14, 2003, the Corporation,
at its option, may redeem shares of Class H Preferred Stock, in whole or from
time to time in part, at a redemption price payable in cash equal to 100% of
the Liquidation Preference thereof, plus all accumulated, accrued and unpaid
dividends to the date fixed for redemption (the "Redemption Date"); provided,
however, that in the event of a redemption of shares of Class H Preferred
Stock, if the Redemption Date occurs after a dividend record date and on or
prior to the related Dividend Payment Date, the dividend payable on such
Dividend Payment Date in respect of such shares called for redemption shall be
payable on such Dividend Payment Date to the holders of record at the close of
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business on such dividend record date, and shall not be payable as part of the
redemption price for such shares. In connection with any redemption pursuant
to this Section 5(a), the redemption price of the Class H Preferred Stock
(other than any portion thereof consisting of accumulated, accrued and unpaid
dividends) shall be payable solely with the proceeds from the sale by the
Corporation or the Operating Partnership, of other capital shares of the
Corporation or the Operating Partnership (whether or not such sale occurs
concurrently with such redemption). For purposes of the preceding sentence,
"capital shares" means any common stock, preferred stock, depositary shares,
partnership or other interests, participations or other ownership interests
(however designated) and any rights (other than debt securities convertible
into or exchangeable at the option of the holder for equity securities (unless
and to the extent such debt securities are subsequently converted into capital
shares)) or options to purchase any of the foregoing of or in the Corporation
or the Operating Partnership.
(b) The Redemption Date shall be selected by the
Corporation, shall be specified in the notice of redemption and shall be not
less than 30 days nor more than 60 days after the date notice of redemption is
sent by the Corporation.
(c) If full cumulative dividends on all outstanding shares
of Class H Preferred Stock have not been declared and paid, or declared and set
apart for payment, no shares of Class H Preferred Stock may be redeemed unless
all outstanding shares of Class H Preferred Stock are simultaneously redeemed
and neither the Corporation nor any affiliate of the Corporation may purchase
or acquire shares of Class H Preferred Stock, otherwise than pursuant to a
purchase or exchange offer made on the same terms to all holders of shares of
Class H Preferred Stock.
(d) If the Corporation shall redeem shares of Class H
Preferred Stock pursuant to paragraph (a) of this Section 5, notice of such
redemption shall be given to each holder of record of the shares to be
redeemed. Such notice shall be provided by first class mail, postage prepaid,
at such holder's address as the same appears on the stock records of the
Corporation. Neither the failure to mail any notice required by this paragraph
(d), nor any defect therein or in the mailing thereof to any particular holder,
shall affect the sufficiency of the notice or the validity of the proceedings
for redemption with respect to the other holders. Any notice which was mailed
in the manner herein provided shall be conclusively presumed to have been duly
given on the date mailed whether or not the holder receives the notice. Each
such notice shall state, as appropriate: (1) the Redemption Date; (2) the
number of shares of Class H Preferred Stock to be redeemed and, if fewer than
all such shares held by such holder are to be redeemed, the number of such
shares to be redeemed from such holder; (3) the place or places at which
certificates for such shares are to be surrendered for cash; and (4) the
redemption price payable on such Redemption Date, including, without
limitation, a statement as to whether or not accumulated, accrued and unpaid
dividends will be (x) payable as part of the redemption price, or (y) payable
on the next Dividend Payment Date to the record holder at the close of business
on the relevant record date as described in the next succeeding sentence.
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Notice having been mailed as aforesaid, from and after the Redemption Date
(unless the Corporation shall fail to make available the amount of cash
necessary to effect such redemption), (i) dividends on the shares of Class H
Preferred Stock so called for redemption shall cease to accumulate or accrue on
the shares of Class H Preferred Stock called for redemption, (ii) said shares
shall no longer be deemed to be outstanding, and (iii) all rights of the
holders thereof as holders of Class H Preferred Stock of the Corporation shall
cease except the rights to receive the cash payable upon such redemption,
without interest thereon, upon surrender and endorsement of their certificates
if so required; provided, however, that if the Redemption Date for any shares
of Class H Preferred Stock occurs after any dividend record date and on or
prior to the related Dividend Payment Date, the full dividend payable on such
Dividend Payment Date in respect of such shares of Class H Preferred Stock
called for redemption shall be payable on such Dividend Payment Date to the
holders of record of such shares at the close of business on the corresponding
dividend record date notwithstanding the prior redemption of such shares. The
Corporation's obligation to make available the redemption price in accordance
with the preceding sentence shall be deemed fulfilled if, on or before the
applicable Redemption Date, the Corporation shall irrevocably deposit in trust
with a bank or trust company (which may not be an affiliate of the Corporation)
that has, or is an affiliate of a bank or trust company that has, a capital and
surplus of at least $50,000,000, such amount of cash as is necessary for such
redemption plus, if such Redemption Date occurs after any dividend record date
and on or prior to the related Dividend Payment Date, such amount of cash as is
necessary to pay the dividend payable on such Dividend Payment Date in respect
of such shares of Class H Preferred Stock called for redemption, with
irrevocable instructions that such cash be applied to the redemption of the
shares of Class H Preferred Stock so called for redemption and, if applicable,
the payment of such dividend. No interest shall accrue for the benefit of the
holders of shares of Class H Preferred Stock to be redeemed on any cash so set
aside by the Corporation. Subject to applicable escheat laws, any such cash
unclaimed at the end of two years from the Redemption Date shall revert to the
general funds of the Corporation, after which reversion the holders of shares
of Class H Preferred Stock so called for redemption shall look only to the
general funds of the Corporation for the payment of such cash.
As promptly as practicable after the surrender in accordance with such
notice of the certificates for any such shares of Class H Preferred Stock to be
so redeemed (properly endorsed or assigned for transfer, if the Corporation
shall so require and the notice shall so state), such certificates shall be
exchanged for cash (without interest thereon) for which such shares have been
redeemed in accordance with such notice. If fewer than all the outstanding
shares of Class H Preferred Stock are to be redeemed, shares to be redeemed
shall be selected by the Corporation from outstanding shares of Class H
Preferred Stock not previously called for redemption by lot or, with respect to
the number of shares of Class H Preferred Stock held of record by each holder
of such shares, pro rata (as nearly as may be) or by any other method as may be
determined by the Board of Directors in its discretion to be equitable. If
fewer than all the shares of Class H Preferred Stock represented by any
certificate are redeemed,
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then a new certificate representing the unredeemed shares shall be issued
without cost to the holders thereof.
6. STATUS OF REACQUIRED STOCK.
All shares of Class H Preferred Stock which shall have been issued and
reacquired in any manner by the Corporation shall be returned to the status of
authorized, but unissued shares of Class H Preferred Stock.
7. RANKING.
Any class or series of capital stock of the Corporation shall be deemed
to rank:
(a) prior or senior to the Class H Preferred Stock, as to
the payment of dividends and as to distribution of assets upon liquidation,
dissolution or winding up, if the holders of such class or series shall be
entitled to the receipt of dividends and of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in preference or
priority to the holders of Class H Preferred Stock ("Senior Stock");
(b) on a parity with the Class H Preferred Stock, as to
the payment of dividends and as to distribution of assets upon liquidation,
dissolution or winding up, whether or not the dividend rates, dividend payment
dates or redemption or liquidation prices per share thereof be different from
those of the Class H Preferred Stock, if (i) such capital stock is Class B
Cumulative Convertible Preferred Stock, Class C Cumulative Preferred Stock,
Class D Cumulative Preferred Stock, or Class G Cumulative Preferred Stock of
the Corporation, or (ii) the holders of such class of stock or series and the
Class H Preferred Stock shall be entitled to the receipt of dividends and of
amounts distributable upon liquidation, dissolution or winding up in proportion
to their respective amounts of accrued and unpaid dividends per share or
liquidation preferences, without preference or priority of one over the other
(the capital stock referred to in clauses (i) and (ii) of this paragraph being
hereinafter referred to, collectively, as "Parity Stock"); and
(c) junior to the Class H Preferred Stock, as to the
payment of dividends and as to the distribution of assets upon liquidation,
dissolution or winding up, if (i) such capital stock or series shall be Common
Stock or (ii) the holders of Class H Preferred Stock shall be entitled to
receipt of dividends or of amounts distributable upon liquidation, dissolution
or winding up, as the case may be, in preference or priority to the holders of
shares of such class or series (the capital stock referred to in clauses (i)
and (ii) of this paragraph being hereinafter referred to, collectively, as
"Junior Stock").
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8. VOTING.
(a) If and whenever six quarterly dividends (whether or
not consecutive) payable on the Class H Preferred Stock or any series or class
of Parity Stock shall be in arrears (which shall, with respect to any such
quarterly dividend, mean that any such dividend has not been paid in full),
whether or not earned or declared, the number of directors then constituting
the Board of Directors shall be increased by two (if not already increased by
reason of similar types of provisions with respect to shares of Parity Stock of
any other class or series which is entitled to similar voting rights (the
"Voting Preferred Stock")) and the holders of shares of Class H Preferred
Stock, together with the holders of shares of all other Voting Preferred Stock
then entitled to exercise similar voting rights, voting as a single class
regardless of series, shall be entitled to elect the two additional directors
to serve on the Board of Directors at any annual meeting of stockholders or
special meeting held in place thereof, or at a special meeting of the holders
of the Class H Preferred Stock and the Voting Preferred Stock called as
hereinafter provided. Whenever all arrears in dividends on the Class H
Preferred Stock and the Voting Preferred Stock then outstanding shall have been
paid and dividends thereon for the current quarterly dividend period shall have
been declared and paid, or declared and set apart for payment, then the right
of the holders of the Class H Preferred Stock and the Voting Preferred Stock to
elect such additional two directors shall cease (but subject always to the same
provision for the vesting of such voting rights in the case of any similar
future arrearages), and the terms of office of all persons elected as directors
by the holders of the Class H Preferred Stock and the Voting Preferred Stock
shall forthwith terminate and the number of directors constituting the Board of
Directors shall be reduced accordingly. At any time after such voting power
shall have been so vested in the holders of Class H Preferred Stock and the
Voting Preferred Stock, if applicable, the Secretary of the Corporation may,
and upon the written request of any holder of Class H Preferred Stock
(addressed to the Secretary at the principal office of the Corporation) shall,
call a special meeting of the holders of the Class H Preferred Stock and of the
Voting Preferred Stock for the election of the two directors to be elected by
them as herein provided, such call to be made by notice similar to that
provided in the Bylaws of the Corporation for a special meeting of the
stockholders or as required by law. If any such special meeting required to be
called as above provided shall not be called by the Secretary within 20 days
after receipt of any such request, then any holder of Class H Preferred Stock
may call such meeting, upon the notice above provided, and for that purpose
shall have access to the stock books of the Corporation. The directors elected
at any such special meeting shall hold office until the next annual meeting of
the stockholders or special meeting held in lieu thereof if such office shall
not have previously terminated as above provided. If any vacancy shall occur
among the directors elected by the holders of the Class H Preferred Stock and
the Voting Preferred Stock, a successor shall be elected by the Board of
Directors, upon the nomination of the then-remaining director elected by the
holders of the Class H Preferred Stock and the Voting Preferred Stock or the
successor of such remaining director, to serve until the next annual meeting of
the stockholders or special meeting held in place thereof if such office shall
not have previously terminated as provided above.
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(b) So long as any shares of Class H Preferred Stock are
outstanding, in addition to any other vote or consent of stockholders required
by law or by the Charter of the Corporation, the affirmative vote of at least
66- 2/3% of the votes entitled to be cast by the holders of the Class H
Preferred Stock voting as a single class with the holders of all other classes
or series of Parity Stock entitled to vote on such matters, given in person or
by proxy, either in writing without a meeting or by vote at any meeting called
for the purpose, shall be necessary for effecting or validating:
(i) Any amendment, alteration or repeal of any of
the provisions of, or the addition of any provision to, these Articles
Supplementary, the Charter or the By-Laws of the Corporation that materially
adversely affects the voting powers, rights or preferences of the holders of
the Class H Preferred Stock; provided, however, that the amendment of the
provisions of the Charter so as to authorize or create, or to increase the
authorized amount of, or issue any Junior Stock or any shares of any class of
Parity Stock shall not be deemed to materially adversely affect the voting
powers, rights or preferences of the holders of Class H Preferred Stock; or
(ii) The authorization, creation of, increase in
the authorized amount of, or issuance of any shares of any class or series of
Senior Stock or any security convertible into shares of any class or series of
Senior Stock (whether or not such class or series of Senior Stock is currently
authorized);
provided, however, that no such vote of the holders of Class H Preferred Stock
shall be required if, at or prior to the time when such amendment, alteration
or repeal is to take effect, or when the issuance of any such Senior Stock or
convertible or exchangeable security is to be made, as the case may be,
provision is made for the redemption of all shares of Class H Preferred Stock
at the time outstanding to the extent such redemption is authorized by Section
5 of this Article.
For purposes of the foregoing provisions and all other voting rights
under these Articles Supplementary, each share of Class H Preferred Stock shall
have one (1) vote per share, except that when any other class or series of
preferred stock of the Corporation shall have the right to vote with the Class
H Preferred Stock as a single class on any matter, then the Class H Preferred
Stock and such other class or series shall have with respect to such matters
one quarter of one (.25) vote per $25 of stated liquidation preference. Except
as otherwise required by applicable law or as set forth herein or in the
Charter, the Class H Preferred Stock shall not have any relative,
participating, optional or other special voting rights and powers other than as
set forth herein, and the consent of the holders thereof shall not be required
for the taking of any corporate action.
9. RECORD HOLDERS.
The Corporation and the Transfer Agent may deem and treat the record
holder of any share of Class H Preferred Stock as the true and lawful owner
thereof for all
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purposes, and neither the Corporation nor the Transfer Agent shall be affected
by any notice to the contrary.
10.1 RESTRICTIONS ON OWNERSHIP AND TRANSFERS.
(A) LIMITATION ON BENEFICIAL OWNERSHIP. Except as provided
in Section 10.8, from and after the Issue Date, no Person (other than the
Initial Holder or a Look-Through Entity) shall Beneficially Own shares of Class
H Preferred Stock in excess of the Ownership Limit, the Initial Holder shall
not Beneficially Own shares of Class H Preferred Stock in excess of the Initial
Holder Limit and no Look-Through Entity shall Beneficially Own shares of Class
H Preferred Stock in excess of the Look-Through Ownership Limit.
(B) TRANSFERS IN EXCESS OF OWNERSHIP LIMIT. Except as
provided in Section 10.8, from and after the Issue Date (and subject to Section
10.12), any Transfer (whether or not such Transfer is the result of
transactions entered into through the facilities of the NYSE or other
securities exchange or an automated inter-dealer quotation system) that, if
effective, would result in any Person (other than the Initial Holder or a
Look-Through Entity) Beneficially Owning shares of Class H Preferred Stock in
excess of the Ownership Limit shall be void ab initio as to the Transfer of
such shares of Class H Preferred Stock that would be otherwise Beneficially
Owned by such Person in excess of the Ownership Limit, and the intended
transferee shall acquire no rights in such shares of Class H Preferred Stock.
(C) TRANSFERS IN EXCESS OF INITIAL HOLDER LIMIT. Except as
provided in Section 10.8, from and after the Issue Date (and subject to Section
10.12), any Transfer (whether or not such Transfer is the result of
transactions entered into through the facilities of the NYSE or other
securities exchange or an automated inter-dealer quotation system) that, if
effective, would result in the Initial Holder Beneficially Owning shares of
Class H Preferred Stock in excess of the Initial Holder Limit shall be void ab
initio as to the Transfer of such shares of Class H Preferred Stock that would
be otherwise Beneficially Owned by the Initial Holder in excess of the Initial
Holder limit, and the Initial Holder shall acquire no rights in such shares of
Class H Preferred Stock.
(D) TRANSFERS IN EXCESS OF LOOK-THROUGH OWNERSHIP LIMIT.
Except as provided in Section 10.8 from and after the Issue Date (and subject
to Section 10.12), any Transfer (whether or not such Transfer is the result of
transactions entered into through the facilities of the NYSE or other
securities exchange or an automated inter-dealer quotation system) that, if
effective, would result in any Look-Through Entity Beneficially Owning shares
of Class H Preferred Stock in excess of the Look-Through Ownership limit shall
be void ab initio as to the Transfer of such shares of Class H Preferred Stock
that would be otherwise Beneficially Owned by such Look-Through Entity in
excess of the Look- Through Ownership Limit and such Look-Through Entity shall
acquire no rights in such shares of Class H Preferred Stock.
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(E) TRANSFERS RESULTING IN "CLOSELY HELD" STATUS. From and
after the Issue Date, any Transfer that, if effective would result in the
Corporation being "closely held" within the meaning of Section 856(h) of the
Code, or would otherwise result in the Corporation failing to qualify as a REIT
(including, without limitation, a Transfer or other event that would result in
the Corporation owning (directly or constructively) an interest in a tenant
that is described in Section 856(d)(2)(B) of the Code if the income derived by
the Corporation from such tenant would cause the Corporation to fail to satisfy
any of the gross income requirements of Section 856(c) of the Code) shall be
void ab initio as to the Transfer of shares of Class H Preferred Stock that
would cause the Corporation (i) to be "closely held" within the meaning of
Section 856(h) of the Code or (ii) otherwise fail to qualify as a REIT, as the
case may be, and the intended transferee shall acquire no rights in such shares
of Class H Preferred Stock.
(F) SEVERABILITY ON VOID TRANSACTIONS. A Transfer of a share
of Class H Preferred Stock that is null and void under Sections 10.1(B), (C),
(D), or (E) of this Article because it would, if effective, result in (i) the
ownership of Class H Preferred Stock in excess of the Initial Holder Limit, the
Ownership Limit, or the Look-Through Ownership Limit, (ii) the Corporation
being "closely held" within the meaning of Section 856(h) of the Code or (iii)
the Corporation otherwise failing to qualify as a REIT, shall not adversely
affect the validity of the Transfer of any other share of Class H Preferred
Stock in the same or any other related transaction.
10.2 REMEDIES FOR BREACH. If the Board of Directors or a committee
thereof shall at any time determine in good faith that a Transfer or other
event has taken place in violation of Section 10.1 of this Article or that a
Person intends to acquire or has attempted to acquire Beneficial Ownership of
any shares of Class H Preferred Stock in violation of Section 10.1 of this
Article (whether or not such violation is intended), the Board of Directors or
a committee thereof shall be empowered to take any action as it deems advisable
to refuse to give effect to or to prevent such Transfer or other event,
including, but not limited to, refusing to give effect to such Transfer or
other event on the books of the Corporation, causing the Corporation to redeem
such shares at the then current Market Price and upon such terms and conditions
as may be specified by the Board of Directors in its sole discretion
(including, but not limited to, by means of the issuance of long-term
indebtedness for the purpose of such redemption), demanding the repayment of
any distributions received in respect of shares of Class H Preferred Stock
acquired in violation of Section 10.1 of this Article or instituting
proceedings to enjoin such Transfer or to rescind such Transfer or attempted
Transfer; provided, however, that any Transfers or attempted Transfers (or, in
the case of events other than a Transfer, Beneficial Ownership) in violation of
Section 10.1 of this Article, regardless of any action (or non-action) by the
Board of Directors or such committee, (a) shall be void ab initio or (b) shall
automatically result in the transfer described in Section 10.3 of this Article;
provided, further, that the provisions of this Section 10.2 shall be subject to
the provisions of Section 10.12 of this Article; provided, further, that
neither the Board of Directors nor any committee thereof may
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exercise such authority in a manner that interferes with any ownership or
transfer of Class H Preferred Stock that is expressly authorized pursuant to
Section 10.8(C) of this Article.
10.3. TRANSFER IN TRUST.
(A) ESTABLISHMENT OF TRUST. If, notwithstanding the other
provisions contained in this Article, at any time after the Issue Date there is
a purported Transfer (an "Excess Transfer") (whether or not such Transfer is
the result of transactions entered into through the facilities of the NYSE or
other securities exchange or an automated inter-dealer quotation system) or
other change in the capital structure of the Corporation (including, but not
limited to, any redemption of Equity Stock) or other event (including, but not
limited to, any acquisition of any share of Equity Stock) such that (a) any
Person (other than the Initial Holder or a Look-Through Entity) would
Beneficially Own shares of Class H Preferred Stock in excess of the Ownership
Limit, or (b) the Initial Holder would Beneficially Own shares of Class H
Preferred Stock in excess of the Initial Holder Limit, or (c) any Person that
is a Look-Through Entity would Beneficially Own shares of Class H Preferred
Stock in excess of the Look-Through Ownership Limit (in any such event, the
Person, Initial Holder or Look-Through Entity that would Beneficially Own
shares of Class H Preferred Stock in excess of the Ownership Limit, the Initial
Holder Limit or the Look-Through Entity Limit, respectively, is referred to as
a "Prohibited Transferee"), then, except as otherwise provided in Section 10.8
of this Article, such shares of Class H Preferred Stock in excess of the
Ownership Limit, the Initial Holder Limit or the Look-Through Ownership Limit,
as the case may be, (rounded up to the nearest whole share) shall be
automatically transferred to a Trustee in his capacity as trustee of a Trust
for the exclusive benefit of one or more Charitable Beneficiaries. Such
transfer to the Trustee shall be deemed to be effective as of the close of
business on the Business Day prior to the Excess Transfer, change in capital
structure or another event giving rise to a potential violation of the
Ownership Limit, the Initial Holder Limit or the Look-Through Entity Ownership
Limit.
(B) APPOINTMENT OF TRUSTEE. The Trustee shall be appointed
by the Corporation and shall be a Person unaffiliated with either the
Corporation or any Prohibited Transferee. The Trustee may be an individual or
a bank or trust company duly licensed to conduct a trust business.
(C) STATUS OF SHARES HELD BY THE TRUSTEE. Shares of Class H
Preferred Stock held by the Trustee shall be issued and outstanding shares of
capital stock of the Corporation. Except to the extent provided in Section
10.3(E), the Prohibited Transferee shall have no rights in the Class H
Preferred Stock held by the Trustee, and the Prohibited Transferee shall not
benefit economically from ownership of any shares held in trust by the Trustee,
shall have no rights to dividends and shall not possess any rights to vote or
other rights attributable to the shares held in the Trust.
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(D) DIVIDEND AND VOTING RIGHTS. The Trustee shall have all
voting rights and rights to dividends with respect to shares of Class H
Preferred Stock held in the Trust, which rights shall be exercised for the
benefit of the Charitable Beneficiary. Any dividend or distribution paid prior
to the discovery by the Corporation that the shares of Class H Preferred Stock
have been transferred to the Trustee shall be repaid to the Corporation upon
demand, and any dividend or distribution declared but unpaid shall be rescinded
as void ab initio with respect to such shares of Class H Preferred Stock. Any
dividends or distributions so disgorged or rescinded shall be paid over to the
Trustee and held in trust for the Charitable Beneficiary. Any vote cast by a
Prohibited Transferee prior to the discovery by the Corporation that the shares
of Class H Preferred Stock have been transferred to the Trustee will be
rescinded as void ab initio and shall be recast in accordance with the desires
of the Trustee acting for the benefit of the Charitable Beneficiary. The owner
of the shares at the time of the Excess Transfer, change in capital structure
or other event giving rise to a potential violation of the Ownership Limit,
Initial Holder Limit or Look-Through Entity Ownership Limit shall be deemed to
have given an irrevocable proxy to the Trustee to vote the shares of Class H
Preferred Stock for the benefit of the Charitable Beneficiary.
(E) RESTRICTIONS ON TRANSFER. The Trustee of the Trust may
sell the shares held in the Trust to a Person, designated by the Trustee, whose
ownership of the shares will not violate the Ownership Restrictions. If such a
sale is made, the interest of the Charitable Beneficiary shall terminate and
proceeds of the sale shall be payable to the Prohibited Transferee and to the
Charitable Beneficiary as provided in this Section 10.3(E). The Prohibited
Transferee shall receive the lesser of (1) the price paid by the Prohibited
Transferee for the shares or, if the Prohibited Transferee did not give value
for the shares (through a gift, devise or other transaction), the Market Price
of the shares on the day of the event causing the shares to be held in the
Trust and (2) the price per share received by the Trustee from the sale or
other disposition of the shares held in the Trust. Any proceeds in excess of
the amount payable to the Prohibited Transferee shall be payable to the
Charitable Beneficiary. If any of the transfer restrictions set forth in this
Section 10.3(E) or any application thereof is determined in a final judgment to
be void, invalid or unenforceable by any court having jurisdiction over the
issue, the Prohibited Transferee may be deemed, at the option of the
Corporation, to have acted as the agent of the Corporation in acquiring the
Class H Preferred Stock as to which such restrictions would, by their terms,
apply, and to hold such Class H Preferred Stock on behalf of the Corporation.
(F) PURCHASE RIGHT IN STOCK TRANSFERRED TO THE TRUSTEE.
Shares of Class H Preferred Stock transferred to the Trustee shall be deemed to
have been offered for sale to the Corporation, or its designee, at a price per
share equal to the lesser of (i) the price per share in the transaction that
resulted in such transfer to the Trust (or, in the case of a devise or gift,
the Market Price at the time of such devise or gift) and (ii) the Market Price
on the date the Corporation, or its designee, accepts such offer. The
Corporation shall have the right to accept such offer for a period of
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90 days after the later of (i) the date of the Excess Transfer or other event
resulting in a transfer to the Trust and (ii) the date that the Board of
Directors determines in good faith that an Excess Transfer or other event
occurred.
(G) DESIGNATION OF CHARITABLE BENEFICIARIES. By written
notice to the Trustee, the Corporation shall designate one or more nonprofit
organizations to be the Charitable Beneficiary of the interest in the Trust
relating to such Prohibited Transferee if (i) the shares of Class H Preferred
Stock held in the Trust would not violate the Ownership Restrictions in the
hands of such Charitable Beneficiary and (ii) each Charitable Beneficiary is an
organization described in Sections 170(b)(1)(A), 170(c)(2) and 501(c)(3) of the
Code.
10.4 NOTICE OF RESTRICTED TRANSFER. Any Person that acquires or
attempts to acquire shares of Class H Preferred Stock in violation of Section
10.1 of this Article, or any Person that is a Prohibited Transferee such that
stock is transferred to the Trustee under Section 10.3 of this Article, shall
immediately give written notice to the Corporation of such event and shall
provide to the Corporation such other information as the Corporation may
request in order to determine the effect, if any, of such Transfer or attempted
Transfer or other event on the Corporation's status as a REIT. Failure to give
such notice shall not limit the rights and remedies of the Board of Directors
provided herein in any way.
10.5 OWNERS REQUIRED TO PROVIDE INFORMATION. From and after the
Issue Date certain record and Beneficial Owners and transferees of shares of
Class H Preferred Stock will be required to provide certain information as set
out below.
(A) ANNUAL DISCLOSURE. Every record and Beneficial Owner of
more than 5% (or such other percentage between 0.5% and 5%, as provided in the
applicable regulations adopted under the Code) of the number of Outstanding
shares of Class H Preferred Stock shall, within 30 days after January 1 of each
year, give written notice to the Corporation stating the name and address of
such record or Beneficial Owner, the number of shares of Class H Preferred
Stock Beneficially Owned, and a full description of how such shares are held.
Each such record or Beneficial Owner of Class H Preferred Stock shall, upon
demand by the Corporation, disclose to the Corporation in writing such
additional information with respect to the Beneficial Ownership of the Class H
Preferred Stock as the Board of Directors, in its sole discretion, deems
appropriate or necessary to (i) comply with the provisions of the Code
regarding the qualification of the Corporation as a REIT under the Code and
(ii) ensure compliance with the Ownership Limit, the Initial Holder Limit or
the Look-Through Ownership Limit, as applicable. Each stockholder of record,
including without limitation any Person that holds shares of Class H Preferred
Stock on behalf of a Beneficial Owner, shall take all reasonable steps to
obtain the written notice described in this Section 10.5 from the Beneficial
Owner.
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(B) DISCLOSURE AT THE REQUEST OF THE CORPORATION. Any Person
that is a Beneficial Owner of shares of Class H Preferred Stock and any Person
(including the stockholder of record) that is holding shares of Class H
Preferred Stock for a Beneficial Owner, and any proposed transferee of shares,
shall provide such information as the Corporation, in its sole discretion, may
request in order to determine the Corporation's status as a REIT, to comply
with the requirements of any taxing authority or other governmental agency, to
determine any such compliance or to ensure compliance with the Ownership Limit,
the Initial Holder Limit and the Look-Through Ownership Limit, and shall
provide a statement or affidavit to the Corporation setting forth the number of
shares of Class H Preferred Stock already Beneficially Owned by such
stockholder or proposed transferee and any related persons specified, which
statement or affidavit shall be in the form prescribed by the Corporation for
that purpose.
10.6 REMEDIES NOT LIMITED. Nothing contained in this Article shall
limit the authority of the Board of Directors to take such other action as it
deems necessary or advisable (subject to the provisions of Section 10.12 of
this Article) (i) to protect the Corporation and the interests of its
stockholders in the preservation of the Corporation's status as a REIT and (ii)
to insure compliance with the Ownership Limit, the Initial Holder Limit and the
Look-Through Ownership Limit.
10.7 AMBIGUITY. In the case of an ambiguity in the application of
any of the provisions of Section 10 of this Article, or in the case of an
ambiguity in any definition contained in Section 10 of this Article, the Board
of Directors shall have the power to determine the application of the
provisions of this Article with respect to any situation based on its
reasonable belief, understanding or knowledge of the circumstances.
10.8 EXCEPTIONS. The following exceptions shall apply or may be
established with respect to the limitations of Section 10.1 of this Article.
(A) WAIVER OF OWNERSHIP LIMIT. The Board of Directors, upon
receipt of a ruling from the Internal Revenue Service or an opinion of tax
counsel or other evidence or undertaking acceptable to it, may waive the
application, in whole or in part, of the Ownership Limit to a Person subject to
the Ownership Limit, if such person is not an individual for purposes of
Section 542(a) of the Code and is a corporation, partnership, estate or trust.
In connection with any such exemption, the Board of Directors may require such
representations and undertakings from such Person and may impose such other
conditions as the Board of Directors deems necessary, in its sole discretion,
to determine the effect, if any, of the proposed Transfer on the Corporation's
status as a REIT.
(B) PLEDGE BY INITIAL HOLDER. Notwithstanding any other
provision of this Article, the pledge by the Initial Holder of all or any
portion of the Class H Preferred Stock directly owned at any time or from time
to time shall not constitute a violation of Section 10.1 of this Article and
the pledgee shall not be subject to the
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Ownership Limit with respect to the Class H Preferred Stock so pledged to it
either as a result of the pledge or upon foreclosure.
(C) UNDERWRITERS. For a period of 270 days (or such longer
period of time as any underwriter described below shall hold an unsold
allotment of Class H Preferred Stock) following the purchase of Class H
Preferred Stock by an underwriter that (i) is a corporation, partnership or
other legal entity and (ii) participates in an offering of the Class H
Preferred Stock, such underwriter shall not be subject to the Ownership Limit
with respect to the Class H Preferred Stock purchased by it as a part of or in
connection with such offering and with respect to any Class H Preferred Stock
purchased in connection with market making activities.
10.9 LEGEND. Each certificate for Class H Preferred Stock shall
bear substantially the following legend:
"The shares of Class H Cumulative Preferred Stock
represented by this certificate are subject to restrictions on
transfer. No person may Beneficially Own shares of Class H Cumulative
Preferred Stock in excess of the Ownership Restrictions, as
applicable, with certain further restrictions and exceptions set forth
in the Charter (including the Articles Supplementary setting forth the
terms of the Class H Cumulative Preferred Stock). Any Person that
attempts to Beneficially Own shares of Class H Cumulative Preferred
Stock in excess of the applicable limitation must immediately notify
the Corporation. All capitalized terms in this legend have the
meanings ascribed to such terms in the Charter (including the Articles
Supplementary setting forth the terms of the Class H Cumulative
Preferred Stock), as the same may be amended from time to time, a copy
of which, including the restrictions on transfer, will be sent without
charge to each stockholder that so requests. If the restrictions on
transfer are violated (i) the transfer of the shares of Class H
Cumulative Preferred Stock represented hereby will be void in
accordance with the Charter (including the Articles Supplementary
setting forth the terms of the Class H Cumulative Preferred Stock) or
(ii) the shares of Class H Cumulative Preferred Stock represented
hereby will automatically be transferred to a Trustee of a Trust for
the benefit of one or more Charitable Beneficiaries."
10.10 SEVERABILITY. If any provision of this Article or any
application of any such provision is determined in a final and unappealable
judgment to be void, invalid or unenforceable by any Federal or state court
having jurisdiction over the issues, the validity and enforceability of the
remaining provisions shall not be affected and other applications of such
provision shall be affected only to the extent necessary to comply with the
determination of such court.
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10.11 BOARD OF DIRECTORS DISCRETION. Anything in this Article to the
contrary notwithstanding, the Board of Directors shall be entitled to take or
omit to take such actions as it in its discretion shall determine to be
advisable in order that the Corporation maintain its status as and continue to
qualify as a REIT, including, but not limited to, reducing the Ownership Limit,
the Initial Holder Limit and the Look-Through Ownership Limit in the event of a
change in law.
10.12 SETTLEMENT. Nothing in this Section 10 of this Article shall
be interpreted to preclude the settlement of any transaction entered into
through the facilities of the NYSE or other securities exchange or an automated
inter- dealer quotation system.
FOURTH: The terms of the Class H Cumulative Preferred Stock set forth
in Article Third hereof shall become Article XVII of the Charter.
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IN WITNESS WHEREOF, the Corporation has caused these presents to be
signed in its name and on its behalf by its Senior Vice President and Chief
Financial Officer and witnessed by its Assistant Secretary on August 12,
1998.
WITNESS: APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
/s/ KATHLEEN HARVEY /s/ TROY D. BUTTS
- ---------------------------------- -------------------------------------
Kathleen Harvey Troy D. Butts
Assistant Secretary Senior Vice President and
Chief Financial Officer
THE UNDERSIGNED, Senior Vice President and Chief Financial Officer of
APARTMENT INVESTMENT AND MANAGEMENT COMPANY, who executed on behalf of the
Corporation the Articles Supplementary of which this Certificate is made a
part, hereby acknowledges in the name and on behalf of said Corporation the
foregoing Articles Supplementary to be the corporate act of said Corporation
and hereby certifies that the matters and facts set forth herein with respect
to the authorization and approval thereof are true in all material respects
under the penalties of perjury.
/s/ TROY D. BUTTS
-------------------------------------
Troy D. Butts
Senior Vice President and
Chief Financial Officer
<PAGE> 152
ARTICLES SUPPLEMENTARY
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
CLASS J CUMULATIVE CONVERTIBLE PREFERRED STOCK
(PAR VALUE $.01 PER SHARE)
APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation
(hereinafter called the "Corporation"), having its principal office in
Baltimore City, Maryland, hereby certifies to the Department of Assessments and
Taxation of the State of Maryland that:
FIRST: Pursuant to authority expressly vested in the Board of
Directors of the Corporation by Section 1.2 of Article IV of the Charter of the
Corporation, as amended to date (the "Charter"), the Board of Directors has
duly divided and classified 2,000,000 authorized but unissued shares of Class A
Common Stock of the Corporation, par value $.01 per share (the "Class A Common
Stock"), into a class designated as Class J Cumulative Convertible Preferred
Stock, par value $.01 per share, and has provided for the issuance of such
class.
SECOND: The reclassification increases the number of shares classified
as Class J Cumulative Convertible Preferred Stock, par value $.01 per share,
from no shares immediately prior to the reclassification to 2,000,000 shares
immediately after the reclassification. The reclassification decreases the
number of shares classified as Class A Common Stock from 486,027,500 shares
immediately prior to the reclassification to 484,027,500 shares immediately
after the reclassification.
THIRD: The terms of the Class J Cumulative Convertible Preferred Stock
(including the preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends and other distributions and
qualifications) as set by the Board of Directors are as follows:
1. NUMBER OF SHARES AND DESIGNATION.
This class of Preferred Stock shall be designated as Class J
Cumulative Convertible Preferred Stock, par value $.01 per share (the "Class J
Preferred Stock") and Two Million (2,000,000) shall be the authorized number of
shares of such Class J Preferred Stock constituting such class.
<PAGE> 153
2. DEFINITIONS.
For purposes of the Class J Preferred Stock, the following terms shall
have the meanings indicated:
"ABP Subscription Agreement" shall mean the Subscription Agreement
dated as of November 6, 1998 between the Corporation and Stichting
Pensioenfonds ABP.
"Act" shall mean the Securities Act of 1933, as amended.
"affiliate" of a Person means a Person that directly, or indirectly
through one or more intermediaries, controls or is controlled by, or
is under common control with, the Person specified.
"Aggregate Value" shall mean, with respect to any block of Equity
Stock, the sum of the products of (i) the number of shares of each
class of Equity Stock within such block multiplied by (ii) the
corresponding Market Price of one share of Equity Stock of such class.
"Beneficial Ownership" shall mean, with respect to any Person,
ownership of shares of Equity Stock equal to the sum of (i) the number
of shares of Equity Stock directly owned by such Person, (ii) the
number of shares of Equity Stock indirectly owned by such Person (if
such Person is an "individual" as defined in Section 542(a)(2) of the
Code) taking into account the constructive ownership rules of Section
544 of the Code, as modified by Section 856(h)(1)(B) of the Code, and
(iii) the number of shares of Equity Stock that such Person is deemed
to beneficially own pursuant to Rule 13d-3 under the Exchange Act or
that is attributed to such Person pursuant to Section 318 of the Code,
as modified by Section 856(d)(5) of the Code, provided that when
applying this definition of Beneficial Ownership to the Initial
Holder, clause (iii) of this definition, and clause (a) (ii) of the
definition of "Person" shall be disregarded. The terms "Beneficial
Owner," "Beneficially Owns" and "Beneficially Owned" shall have the
correlative meanings.
"Board of Directors" shall mean the Board of Directors of the
Corporation or any committee authorized by such Board of Directors to
perform any of its responsibilities with respect to the Class J
Preferred Stock; provided that, for purposes of paragraph (a) of
Section 8 of this Article, the term "Board of Directors" shall not
include any such committee.
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which state or federally chartered banking institutions in New
York, New York are not required to be open.
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"Charitable Beneficiary" shall mean one or more beneficiaries of the
Trust as determined pursuant to Section 11.3 of this Article, each of
which shall be an organization described in Section 170(b)(1)(A),
170(c)(2) and 501(c)(3) of the Code.
"Class E Articles Supplementary" shall have the meaning set forth in
Section 7.3 of this Article.
"Class J Preferred Stock" shall have the meaning set forth in Section
1 of this Article.
"Closing Price" shall mean, when used with respect to a share of any
Equity Stock and for any date, the last sale price, regular way, or,
in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case, as reported
in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the NYSE or, if
the Equity Stock is not listed or admitted to trading on the NYSE, as
reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities
exchange on which the Equity Stock is listed or admitted to trading
or, if the Equity Stock is not listed or admitted to trading on any
national securities exchange, the last quoted price, or if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or, if
such system is no longer in use, the principal other automated
quotations system that may then be in use or, if the Equity Stock is
not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker making a
market in the Equity Stock selected by the Board of Directors of the
Corporation.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, or any successor statute thereto. Reference to any
provision of the Code shall mean such provision as in effect from time
to time, as the same may be amended, and any successor thereto, as
interpreted by any applicable regulations or other administrative
pronouncements as in effect from time to time.
"Common Stock" shall mean the Class A Common Stock, $.01 par value per
share, of the Corporation, and the Class B Common Stock, $.01 par
value per share, of the Corporation and such other shares of the
Corporation's capital stock into which outstanding shares of such
Class A Common Stock or Class B Common Stock shall be reclassified.
"Conversion Price" shall mean the conversion price per share of Class
A Common Stock for which each share of Class J Preferred Stock is
convertible,
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as such Conversion Price may be adjusted pursuant to Section 7 of this
Article. The initial Conversion Price shall be $40 (equivalent to a
conversion rate of 2.50 shares of Class A Common Stock for each share
of Class J Preferred Stock).
"Current Market Price" of a share of any Equity Stock shall mean the
closing price, regular way on such day, or, if no sale takes place on
such day, the average of the reported closing bid and asked prices,
regular way, on such day, in either case as reported on the principal
national securities exchange on which such securities are listed or
admitted for trading, or, if such security is not quoted on any
national securities exchange, on the NASDAQ National Market or if such
security is not quoted on the NASDAQ National Market, the average of
the closing bid and asked prices on such day in the over-the-counter
market as reported by NASDAQ or, if bid and asked prices for each
security on such day shall not have been reported through NASDAQ, the
average of the bid and asked prices on such day as furnished by any
New York Stock Exchange or National Association of Securities Dealers,
Inc. member firm regularly making a market in such security selected
for such purpose by the Chief Executive Officer of the Corporation or
the Board of Directors of the Corporation or if any class or series of
securities are not publicly traded, the fair value of the shares of
such class as determined reasonably and in good faith by the Board of
Directors of the Corporation.
"distribution" shall have the meaning set forth in paragraph (a)(iii)
of Section 7.3 of this Article.
"Dividend Payment Date" shall mean, with respect to each Dividend
Period, (a) the date that cash dividends are paid on the Class A
Common Stock with respect to such Dividend Period; or (b) if such
dividends have not been paid on the Class A Common Stock by 9:00 a.m.,
New York City time, on the sixtieth day from and including the last
day of such Dividend Period, then on such day; provided, that if any
Dividend Payment Date falls on any day other than a Business Day, the
dividend payment payable on such Dividend Payment Date shall be paid
on the Business Day immediately following such Dividend Payment Date
and no interest shall accrue on such dividend from such date to such
Dividend Payment Date.
"Dividend Periods" shall mean the Initial Dividend Period and each
subsequent quarterly dividend period commencing on and including
February 15, May 15, August 15 and November 15 of each year and ending
on and including the day preceding the first day of the next
succeeding Dividend Period.
"Equity Stock" shall mean one or more shares of any class of capital
stock of the Corporation.
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"Excess Transfer" has the meaning set forth in Section 11.3(a) of this
Article.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" shall mean the average of the daily Current Market
Prices of a share of Class A Common Stock during five (5) consecutive
Trading Days selected by the Corporation commencing not more than
twenty (20) Trading Days before, and ending not later than, the
earlier of the day in question and the day before the "ex" date, if
any, with respect to any issuance or distribution requiring such
computation. The term "'ex' date," when used with respect to any
issuance or distribution, means the first day on which the share of
Class A Common Stock trades regular way, without the right to receive
such issuance or distribution, on the exchange or in the market, as
the case may be, used to determine that day's Current Market Price.
"Issue Date" shall mean the date on which shares of Class J Preferred
Stock are issued pursuant to the ABP Subscription Agreement and the OP
Subscription Agreement.
"Initial Dividend Period" shall mean the period commencing on and
including the Issue Date and ending on and including November 14,
1998.
"Initial Holder" shall mean Terry Considine.
"Initial Holder Limit" shall mean a number of the Outstanding shares
of Class J Preferred Stock of the Corporation having an Aggregate
Value not in excess of the excess of (x) 15% of the Aggregate Value of
all Outstanding shares of Equity Stock over (y) the Aggregate Value of
all shares of Equity Stock other than Class J Preferred Stock that are
Beneficially Owned by the Initial Holder. From the Issue Date, the
secretary of the Corporation, or such other person as shall be
designated by the Board of Directors, shall upon request make
available to the representative(s) of the Initial Holder and the Board
of Directors, a schedule that sets forth the then-current Initial
Holder Limit applicable to the Initial Holder.
"Internal Rate of Return" shall mean, as of any determination date,
the effective discount rate under which the present value of the
Inflows associated with an outstanding share of Class J Preferred
Stock equals the Outflow on the Issue Date associated with such share.
For purposes of calculation of Internal Rate of Return:
(i) "Inflows" shall mean (a) all dividends (whether paid in
cash, property or stock) that have been received on such share, (b)
any other distributions that have been received on such share, and (c)
as of the determination date, the average of the daily Current Market
Prices of a share
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of the Corporation's Class A Common Stock during the five most recent
Trading Days, such average multiplied by the Liquidation Preference
(excluding any accumulated, accrued and unpaid dividends) per share of
Class J Preferred Stock, and such product divided by the Conversion
Price. For purposes of calculating the amounts of any Inflows, all
dividends or distributions received in property or stock shall be
deemed to have a value equal to the fair market value of such
dividends or distributions as of the date such dividend or
distribution is received, as determined in good faith by the Board of
Directors. All Inflows shall be deemed to have taken place on the date
on which payment was actually received by the holder.
(ii) "Outflow" shall mean $100 plus an amount equal to one
one-millionth of any and all out-of-pocket costs of Stichting
Pensioenfonds ABP relating to the acquisition of 1,000,000 shares of
the Corporation's Class J Preferred Stock on the Issue Date. Outflow
shall be deemed to have taken place on the Closing Date of the ABP
Subscription Agreement and the OP Subscription Agreement, and
(iii) Neither the fact of any transfer of Class J Preferred
Stock nor the amount of any consideration received by the holder
thereof or paid by any successor holder in connection with any
transfer shall affect the calculation of Internal Rate of Return.
Schedule A attached hereto shows the calculation of Internal Rate of
Return at certain hypothetical dates of determination and given a
certain hypothetical aggregate purchase price, certain hypothetical
Inflows and certain hypothetical levels of the Current Market Price of
the Corporation's Class A Common Stock.
"Junior Stock" shall have the meaning set forth in paragraph (c) of
Section 8 of this Article.
"Liquidation Preference" shall have the meaning set forth in paragraph
(a) of Section 4 of this Article.
"Market Price" on any date shall mean, with respect to any share of
Equity Stock, the Closing Price of a share of that class of Equity
Stock on the Trading Day immediately preceding such date.
"NYSE" shall mean the New York Stock Exchange, Inc.
"OP Subscription Agreement" shall mean the Stock Purchase Agreement
dated as of November 6, 1998 between the Corporation and AIMCO
Properties, L.P.
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"Outstanding" shall mean issued and outstanding shares of Equity Stock
of the Corporation, provided that for purposes of the application of
the Ownership Limit or the Initial Holder Limit to any Person, the
term "Outstanding" shall be deemed to include the number of shares of
Equity Stock that such Person alone, at that time, could acquire
pursuant to any options or convertible securities.
"Ownership Limit" shall mean, for any Person other than the Initial
Holder, a number of the Outstanding shares of Class J Preferred Stock
of the Corporation having an Aggregate Value not in excess of the
excess of (x) 8.7% of the Aggregate Value of all Outstanding shares of
Equity Stock over (y) the Aggregate Value of all shares of Equity
Stock other than Class J Preferred Stock that are Beneficially Owned
by the Person.
"Ownership Restrictions" shall mean, collectively, the Ownership Limit
as applied to Persons other than the Initial Holder and the Initial
Holder Limit as applied to the Initial Holder.
"Parity Stock" shall have the meaning set forth in paragraph (b) of
Section 8 of this Article.
"Person" shall mean (a) for purposes of Section 11 of this Article,
(i) an individual, corporation, partnership, estate, trust (including
a trust qualifying under Section 401(a) or 501(c) of the Code),
association, private foundation within the meaning of Section 509(a)
of the Code, joint stock company or other entity, and (ii) also
includes a group as that term is used for purposes of Section 13(d)(3)
of the Exchange Act and (b) for purposes of the remaining Sections of
this Article, any individual, firm, partnership, corporation or other
entity and shall include any successor (by merger or otherwise) of
such entity.
"Prohibited Transferee" has the meaning set forth in Section 11.3(a)
of this Article.
"REIT" shall mean a "real estate investment trust" as defined in
Section 856 of the Code.
"Senior Stock" shall have the meaning set forth in paragraph (a) of
Section 8 of this Article.
"set apart for payment" shall be deemed to include, without any action
other than the following, the recording by the Corporation in its
accounting ledgers of any accounting or bookkeeping entry which
indicates, pursuant to a declaration of dividends or other
distribution by the Board of Directors, the allocation of funds to be
so paid on any series or class of capital stock of the Corporation;
provided, however, that if any funds for any class or series of
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Junior Stock or any class or series of Parity Stock are placed in a
separate account of the Corporation or delivered to a disbursing,
paying or other similar agent, then "set apart for payment" with
respect to the Class J Preferred Stock shall mean placing such funds
in a separate account or delivering such funds to a disbursing, paying
or other similar agent.
"Trading Day" shall mean, when used with respect to the Closing Price
of a share of any Equity Stock, (i) if the Equity Stock is listed or
admitted to trading on the NYSE, a day on which the NYSE is open for
the transaction of business, (ii) if the Equity Stock is not listed or
admitted to trading on the NYSE but is listed or admitted to trading
on another national securities exchange or automated quotation system,
a day on which the principal national securities exchange or automated
quotation system, as the case may be, on which the Equity Stock is
listed or admitted to trading is open for the transaction of business,
or (iii) if the Equity Stock is not listed or admitted to trading on
any national securities exchange or automated quotation system, any
day other than a Saturday, a Sunday or a day on which banking
institutions in the State of New York are authorized or obligated by
law or executive order to close.
"Transaction" shall have the meaning set forth in Section 7.3 of this
Article.
"Transfer" shall mean any sale, transfer, gift, assignment, devise or
other disposition of a share of Class J Preferred Stock (including (i)
the granting of an option or any series of such options or entering
into any agreement for the sale, transfer or other disposition of
Class J Preferred Stock or (ii) the sale, transfer, assignment or
other disposition of any securities or rights convertible into or
exchangeable for Class J Preferred Stock), whether voluntary or
involuntary, whether of record or Beneficial Ownership, and whether by
operation of law or otherwise (including, but not limited to, any
transfer of an interest in other entities that results in a change in
the Beneficial Ownership of shares of Class J Preferred Stock). The
term "Transfers" and "Transferred" shall have correlative meanings.
"Transfer Agent" means such transfer agent as may be designated by the
Board of Directors or their designee as the transfer agent for the
Class J Preferred Stock; provided, that if the Corporation has not
designated a transfer agent then the Corporation shall act as the
transfer agent for the Class J Preferred Stock.
"Trust" shall mean the trust created pursuant to Section 11.3 of this
Article.
"Trustee" shall mean the Person unaffiliated with either the
Corporation or the Prohibited Transferee that is appointed by the
Corporation to serve as trustee of the Trust.
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"Voting Preferred Stock" shall have the meaning set forth in Section 9
of this Article.
3. DIVIDENDS.
(a) The holders of Class J Preferred Stock shall be entitled
to receive, when and as declared by the Board of Directors out of funds legally
available for that purpose, cumulative dividends payable in cash in an amount
per share of Class J Preferred Stock equal to (i) 7% per annum of the per share
Liquidation Preference (as hereinafter defined) for the period beginning on and
including the Issue Date and lasting until November 15, 1998; (ii) 8% per annum
of the per share Liquidation Preference for the period beginning on and
including November 15, 1998 and lasting until November 15, 1999; (iii) 9% per
annum of the per share Liquidation Preference for the period beginning on and
including November 15, 1999 and lasting until November 15, 2000; and (iv) 9.5%
per annum of the per share Liquidation Preference thereafter. Such dividends
shall be cumulative from the Issue Date, whether or not in any Dividend Period
or Periods such dividends shall be declared or there shall be funds of the
Corporation legally available for the payment of such dividends, and shall be
payable quarterly in arrears on each Dividend Payment Date, commencing on
November 15, 1998. Each such dividend shall be payable in arrears to the
holders of record of the Class J Preferred Stock, as they appear on the stock
records of the Corporation at the close of business on a record date fixed by
the Board of Directors which shall not be more than 60 days prior to the
applicable Dividend Payment Date and, within such 60 day period, shall be the
same date as the record date for the regular quarterly dividend payable with
respect to the Class A Common Stock for the Dividend Period to which such
Dividend Payment Date relates (or if there is no such record date for Class A
Common Stock, then such date as the Board of Directors may fix). Accumulated,
accrued and unpaid dividends for any past Dividend Periods may be declared and
paid at any time, without reference to any regular Dividend Payment Date, to
holders of record on such date, which date shall not precede by more than 45
days the payment date thereof, as may be fixed by the Board of Directors.
(b) Any dividend payable on the Class J Preferred Stock for
any partial dividend period shall be computed ratably on the basis of twelve
30-day months and a 360-day year. Holders of Class J Preferred Stock shall not
be entitled to any dividends, whether payable in cash, property or stock, in
excess of full cumulative dividends, as herein provided, on the Class J
Preferred Stock. No interest, or sum of money in lieu of interest, shall be
payable in respect of any dividend payment or payments on the Class J Preferred
Stock that may be in arrears.
(c) So long as any of the shares of Class J Preferred Stock
are outstanding, except as described in the immediately following sentence, no
dividends shall be declared or paid or set apart for payment by the Corporation
and no other
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distribution of cash or other property shall be declared or made, directly or
indirectly, by the Corporation with respect to any shares of Parity Stock
unless, in each case, dividends equal to the full amount of accumulated,
accrued and unpaid dividends on all outstanding shares of Class J Preferred
Stock 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 payment of such dividends on the Class J Preferred Stock for all
Dividend Periods ending on or prior to the date such dividend or distribution
is declared, paid, set apart for payment or made, as the case may be, with
respect to such shares of Parity Stock. When dividends are not paid in full or
a sum sufficient for such payment is not set apart, as aforesaid, all dividends
declared upon the Class J Preferred Stock and all dividends declared upon any
shares of Parity Stock shall be declared ratably in proportion to the
respective amounts of dividends accumulated, accrued and unpaid on the Class J
Preferred Stock and accumulated, accrued and unpaid on such Parity Stock.
(d) So long as any of the shares of Class J Preferred Stock
are outstanding, no dividends (other than dividends or distributions paid in
shares of, or options, warrants or rights to subscribe for or purchase shares
of, Junior Stock) shall be declared or paid or set apart for payment by the
Corporation and no other distribution of cash or other property shall be
declared or made, directly or indirectly, by the Corporation with respect to
any shares of Junior Stock, nor shall any shares of Junior Stock be redeemed,
purchased or otherwise acquired (other than a redemption, purchase or other
acquisition of Common Stock made for purposes of an employee incentive or
benefit plan of the Corporation or any subsidiary) for any consideration (or
any moneys be paid to or made available for a sinking fund for the redemption
of any shares of any such stock), directly or indirectly, by the Corporation
(except by conversion into or exchange for shares of, or options, warrants or
rights to subscribe for or purchase shares of, Junior Stock), nor shall any
other cash or other property otherwise be paid or distributed to or for the
benefit of any holder of shares of Junior Stock in respect thereof, directly or
indirectly, by the Corporation unless, in each case, dividends equal to the
full amount of all accumulated, accrued and unpaid dividends on all outstanding
shares of Class J Preferred Stock have been declared and paid, or such
dividends have been declared and a sum sufficient for the payment thereof has
been set apart for such payment, on all outstanding shares of Class J Preferred
Stock for all Dividend Periods ending on or prior to the date such dividend or
distribution is declared, paid, set apart for payment or made with respect to
such shares of Junior Stock, or the date such shares of Junior Stock are
redeemed, purchased or otherwise acquired or monies paid to or made available
for any sinking fund for such redemption, or the date any such cash or other
property is paid or distributed to or for the benefit of any holders of Junior
Stock in respect thereof, as the case may be.
Notwithstanding the provisions of this Section 3, the
Corporation shall not be prohibited from (i) declaring or paying or setting
apart for payment any dividend or distribution on any shares of Parity Stock or
(ii) redeeming, purchasing
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or otherwise acquiring any Parity Stock, in each case, if such declaration,
payment, setting apart for payment, redemption, purchase or other acquisition
is necessary in order to maintain the continued qualification of the
Corporation as a REIT under Section 856 of the Code.
4. LIQUIDATION PREFERENCE.
(a) In the event of any liquidation, dissolution or winding
up of the Corporation, whether voluntary or involuntary, before any payment or
distribution by the Corporation (whether of capital, surplus or otherwise)
shall be made to or set apart for the holders of Junior Stock, the holders of
shares of Class J Preferred Stock shall be entitled to receive One Hundred
Dollars ($100) per share of Class J Preferred Stock (the "Liquidation
Preference"), plus an amount equal to all dividends (whether or not earned or
declared) accumulated, accrued and unpaid thereon to the date of final
distribution to such holders; but such holders shall not be entitled to any
further payment. Until the holders of the Class J Preferred Stock have been
paid the Liquidation Preference in full, plus an amount equal to all dividends
(whether or not earned or declared) accumulated, accrued and unpaid thereon to
the date of final distribution to such holders, no payment will be made to any
holder of Junior Stock upon the liquidation, dissolution or winding up of the
Corporation. If, upon any liquidation, dissolution or winding up of the
Corporation, the assets of the Corporation, or proceeds thereof, distributable
among the holders of Class J Preferred Stock shall be insufficient to pay in
full the preferential amount aforesaid and liquidating payments on any other
shares of any class or series of Parity Stock, then such assets, or the
proceeds thereof, shall be distributed among the holders of Class J Preferred
Stock and any such other Parity Stock ratably in the same proportion as the
respective amounts that would be payable on such Class J Preferred Stock and
any such other Parity Stock if all amounts payable thereon were paid in full.
For the purposes of this Section 4, (i) a consolidation or merger of the
Corporation with one or more corporations, (ii) a sale or transfer of all or
substantially all of the Corporation's assets, or (iii) a statutory share
exchange shall not be deemed to be a liquidation, dissolution or winding up,
voluntary or involuntary, of the Corporation.
(b) Upon any liquidation, dissolution or winding up of the
Corporation, after payment shall have been made in full to the holders of Class
J Preferred Stock and any Parity Stock, as provided in this Section 4, any
other series or class or classes of Junior Stock shall, subject to the
respective terms thereof, be entitled to receive any and all assets remaining
to be paid or distributed, and the holders of the Class J Preferred Stock and
any Parity Stock shall not be entitled to share therein.
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5. REDEMPTION.
The Class J Preferred Stock is not redeemable, other than as
specified in Section 11.2 hereof.
6. STATUS OF REACQUIRED STOCK.
All shares of Class J Preferred Stock which shall have been issued and
reacquired in any manner by the Corporation (including without limitation
shares of Class J Preferred Stock which have been surrendered for conversion
into Class A Common Stock) shall be returned to the status of authorized, but
unissued shares of Class J Preferred Stock.
7. CONVERSION.
7.1 CONVERSION AT HOLDERS' OPTION.
At any time on or after the Issue Date, holders of shares of
Class J Preferred Stock shall have the right to convert all or a portion of
such shares into shares of Class A Common Stock, as follows:
(a) Subject to and upon compliance with the provisions of
this Section 7, a holder of shares of Class J Preferred Stock shall have the
right, at such holder's option, at any time on or after the Issue Date to
convert such shares, in whole or in part, into the number of fully paid and
non-assessable shares of authorized but previously unissued shares of Class A
Common Stock per each share of Class J Preferred Stock obtained by dividing the
Liquidation Preference (excluding any accumulated accrued and unpaid dividends)
per share of Class J Preferred Stock by the Conversion Price (as in effect at
the time and on the date provided for in subparagraph (b)(iv) of this Section
7.1) and by surrendering such shares to be converted, such surrender to be made
in the manner provided in paragraph (b) of this Section 7.1.
(b) (i) In order to exercise the conversion right, the holder
of each share of Class J Preferred Stock to be converted shall surrender the
certificate representing such share, duly endorsed or assigned to the
Corporation or in blank, at the office of the Transfer Agent, accompanied by
written notice to the Corporation that the holder thereof elects to convert
such share of Class J Preferred Stock. Unless the shares issuable on conversion
are to be issued in the same name as the name in which such share of Class J
Preferred Stock is registered, each share surrendered for conversion shall be
accompanied by instruments of transfer, in form satisfactory to the
Corporation, duly executed by the holder or such holder's duly authorized
attorney and an amount sufficient to pay any transfer or similar tax (or
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evidence reasonably satisfactory to the Corporation demonstrating that such
taxes have been paid).
(ii) A holder of shares of Class J Preferred Stock shall,
as of the date of the conversion of such shares to shares of Class A Common
Stock, be entitled to receive cash payment in respect of any dividends (whether
or not earned or declared) that are accumulated, accrued and unpaid thereon as
of the time of such conversion, provided, however, that payment in respect of
any dividend on such shares that has been declared but for which the Dividend
Payment Date has not yet been reached shall be payable as of such Dividend
Payment Date. Except as provided above, the Corporation shall make no payment
or allowance for unpaid dividends, whether or not in arrears, on converted
shares.
(iii) As promptly as practicable after the surrender of
certificates for shares of Class J Preferred Stock as aforesaid, the
Corporation shall issue and shall deliver at such office to such holder, or
send on such holder's written order, a certificate or certificates for the
number of full shares of Class A Common Stock issuable upon the conversion of
such shares of Class J Preferred Stock in accordance with provisions of this
Section 7, and any fractional interest in respect of a share of Class A Common
Stock arising upon such conversion shall be settled as provided in paragraph
(c) of this Section 7.1.
(iv) Each conversion shall be deemed to have been
effected immediately prior to the close of business on the date on which the
certificates for shares of Class J Preferred Stock shall have been surrendered
and such notice received by the Corporation as aforesaid, and the Person or
Persons in whose name or names any certificate or certificates for shares of
Class A Common Stock shall be issuable upon such conversion shall be deemed to
have become the holder or holders of record of the shares represented thereby
at such time on such date and such conversion shall be at the Conversion Price
in effect at such time on such date unless the stock transfer books of the
Corporation shall be closed on that date, in which event such Person or Persons
shall be deemed to have become such holder or holders of record at the close of
business on the next succeeding day on which such stock transfer books are
open, but such conversion shall be at the Conversion Price in effect on the
date on which such shares shall have been surrendered and such notice received
by the Corporation. If the dividend payment record date for the Class J
Preferred Stock and Class A Common Stock do not coincide, and the preceding
sentence does not operate to ensure that a holder of shares of Class J
Preferred Stock whose shares are converted into Class A Common Stock does not
receive dividends on both the shares of Class J Preferred Stock and the Class A
Common Stock into which such shares are converted for the same Dividend Period,
then notwithstanding anything herein to the contrary, it is the intent, and the
Transfer Agent is authorized to ensure, that no conversion after the earlier of
such record dates will be accepted until after the latter of such record dates.
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(c) No fractional share of Class A Common Stock or scrip
representing fractions of a share of Class A Common Stock shall be issued upon
conversion of the shares of Class J Preferred Stock. Instead of any fractional
interest in a share of Class A Common Stock that would otherwise be deliverable
upon the conversion of shares of Class J Preferred Stock, the Corporation shall
pay to the holder of such share an amount in cash based upon the Current Market
Price of the Class A Common Stock on the Trading Day immediately preceding the
date of conversion. If more than one share shall be surrendered for conversion
at one time by the same holder, the number of full shares of Class A Common
Stock issuable upon conversion thereof shall be computed on the basis of the
aggregate number of shares of Class J Preferred Stock so surrendered.
7.2 MANDATORY CONVERSION.
(a) The Corporation shall have the right to require that all
or part of the issued and outstanding shares of Class J Preferred Stock be
converted into shares of Class A Common Stock under the following
circumstances:
(i) At any time on or prior to the fourth anniversary of
the Issue Date, in the event that the Internal Rate of Return exceeds 12.5%,
the Corporation shall have the right to require the issued and outstanding
shares of Class J Preferred Stock to be converted, in whole or in part, into
shares of Class A Common Stock as set forth in this Section 7.2.
(ii) At any time after the fourth anniversary of the
Issue Date, so long as the average of the daily Current Market Prices of the
issued and outstanding shares of Class A Common Stock during the five most
recent Trading Days is equal to or greater than $40, the Corporation shall have
the right to require the issued and outstanding shares of Class J Preferred
Stock to be converted, in whole or in part, into shares of Class A Common Stock
as set forth in this Section 7.2.
(b) Subject to and upon compliance with the provisions of
this Section 7, the Corporation shall have the right, under the circumstances
set forth in (a) (i) or (ii) above, to convert such shares, in whole or in
part, into the number of fully paid and non-assessable shares of authorized but
previously unissued shares of Class A Common Stock per each share of Class J
Preferred Stock obtained by dividing the Liquidation Preference (excluding any
accumulated accrued and unpaid dividends) per share of Class J Preferred Stock
by the Conversion Price (as in effect at the time and on the date provided for
in subparagraph (c)(v) of this Section 7.2).
(c) (i) In order to exercise the conversion right, the
Corporation shall, promptly upon the occurrence of an event described in (a)(i)
or (ii) above, and in no event later than the close of business on the next
succeeding business day, give notice of such conversion to each holder of
record of the shares to be converted. Such
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notice shall be provided by facsimile or, if facsimile is not available, then
by first class mail, postage prepaid, at such holder's address as the same
appears on the stock records of the Corporation. Any notice which was
transmitted or mailed in the manner herein provided shall be conclusively
presumed to have been duly given on the date received by the holder. Each such
notice shall state, as appropriate: (1) the date of conversion, which date may
be any date within one business day following the date on which the notice is
transmitted or mailed; (2) the number of shares of Class J Preferred Stock to
be converted and, if fewer than all such shares held by such holder are to be
converted, the number of such shares to be converted; (3) the event which gave
rise to the conversion right; and (4) the then current Conversion Price.
(ii) Upon receiving such notice of conversion, each such
holder shall promptly surrender the certificates representing such shares of
Class J Preferred Stock as are being converted on the conversion date, duly
endorsed or assigned to the Corporation or in blank, at the office of the
Transfer Agent; provided, however, that the failure to so surrender any such
certificates shall not in any way affect the validity of the conversion of the
underlying shares of Class J Preferred Stock into shares of Class A Common
Stock. Unless the shares issuable on conversion are to be issued in the same
name as the name in which such shares of Class J Preferred Stock are
registered, each such share surrendered following conversion shall be
accompanied by instruments of transfer, in form satisfactory to the
Corporation, duly executed by the holder or such holder's duly authorized
attorney and an amount sufficient to pay any transfer or similar tax (or
evidence reasonably satisfactory to the Corporation demonstrating that such
taxes have been paid).
(iii) A holder of shares of Class J Preferred Stock
shall, as of the date of the conversion of such shares to shares of Class A
Common Stock, be entitled to receive cash payment in respect of any dividends
(whether or not earned or declared) that are accumulated, accrued and unpaid
thereon as of the time of such conversion, provided, however, that payment in
respect of any dividend on such shares that has been declared but for which the
Dividend Payment Date has not yet been reached shall be payable as of such
Dividend Payment Date. Except as provided above, the Corporation shall make no
payment or allowance for unpaid dividends, whether or not in arrears, on
converted shares.
(iv) As promptly as practicable after the surrender of
certificates for shares of Class J Preferred Stock as aforesaid, and in any
event no later than three business days after the date of such surrender, the
Corporation shall issue and shall deliver at such office to such holder, or
send on such holder's written order, a certificate or certificates for the
number of full shares of Class A Common Stock issuable upon the conversion of
such shares of Class J Preferred Stock in accordance with the provisions of
this Section 7.2, and any fractional interest in respect of a share of Class A
Common Stock arising upon such conversion shall be settled as provided in
paragraph (d) of this Section 7.2.
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(v) Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date identified as the
conversion date in the notice of conversion sent by the Corporation as
aforesaid, and the Person or Persons in whose name or names any certificate or
certificates for shares of Class A Common Stock shall be issuable upon such
conversion shall be deemed to have become the holder or holders of record of
the shares represented thereby at such time on such date and such conversion
shall be at the Conversion Price in effect at such time on such date unless the
stock transfer books of the Corporation shall be closed on that date, in which
event such Person or Persons shall be deemed to have become such holder or
holders of record at the close of business on the next succeeding day on which
such stock transfer books are open, but such conversion shall be at the
Conversion Price in effect on the date identified as the conversion date in the
notice of conversion sent by the Corporation as aforesaid. If the dividend
payment record dates for the Class J Preferred Stock and Class A Common Stock
do not coincide, and the preceding sentence does not operate to ensure that a
holder of shares of Class J Preferred Stock whose shares are converted into
Class A Common Stock does not receive dividends on both the shares of Class J
Preferred Stock and the Class A Common Stock into which such shares are
converted for the same Dividend Period, then notwithstanding anything herein to
the contrary, it is the intent, and the Transfer Agent is authorized to ensure,
that no conversion after the earlier of such record dates will be accepted
until after the latter of such record dates.
(d) No fractional share of Class A Common Stock or scrip
representing fractions of a share of Class A Common Stock shall be issued upon
conversion of the shares of Class J Preferred Stock. Instead of any fractional
interest in a share of Class A Common Stock that would otherwise be deliverable
upon the conversion of shares of Class J Preferred Stock, the Corporation shall
pay to the holder of such share an amount of cash based upon the Current Market
Price of the Class A Common Stock on the Trading Day immediately preceding the
date of conversion. If more than one of any holder's shares shall be converted
at one time, the number of full shares of Class A Common Stock issuable upon
conversion thereof shall be computed on the basis of the aggregate number of
shares of Class J Preferred Stock so surrendered.
7.3 ADJUSTMENTS TO CONVERSION PRICE
(a) The Conversion Price shall be adjusted from time to time
as follows:
(i) If the Corporation shall after the Issue Date (A) pay
a dividend or make a distribution on its capital stock in shares of Class A
Common Stock, (B) subdivide its outstanding Class A Common Stock into a greater
number of shares, (C) combine its outstanding Class A Common Stock into a
smaller number of shares or (D) issue any shares of capital stock by
reclassification of its outstanding Class A Common Stock, the Conversion Price
in effect at the opening of business on
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the day following the date fixed for the determination of stockholders entitled
to receive such dividend or distribution or at the opening of business on the
day following the day on which such subdivision, combination or
reclassification becomes effective, as the case may be, shall be adjusted so
that the holder of any share of Class J Preferred Stock thereafter converted
shall be entitled to receive the number of shares of Class A Common Stock (or
fraction of a share of Class A Common Stock) that such holder would have owned
or have been entitled to receive after the happening of any of the events
described above had such share of Class J Preferred Stock been converted
immediately prior to the record date in the case of a dividend or distribution
or the effective date in the case of a subdivision, combination or
reclassification. An adjustment made pursuant to this paragraph (a)(i) of this
Section 7.3 shall become effective immediately after the opening of business on
the day next following the record date (except as provided in paragraph (e)
below) in the case of a dividend or distribution and shall become effective
immediately after the opening of business on the day next following the
effective date in the case of a subdivision, combination or reclassification.
(ii) If the Corporation shall, after the Issue Date,
issue rights, options or warrants to all holders of Class A Common Stock
entitling them (for a period expiring within 45 days after the record date
described below in this paragraph (a)(ii) of this Section 7.3) to subscribe for
or purchase Class A Common Stock at a price per share less than the Fair Market
Value per share of the Class A Common Stock on the record date for the
determination of stockholders entitled to receive such rights, options or
warrants, then the Conversion Price in effect at the opening of business on the
day next following such record date shall be adjusted to equal the price
determined by multiplying (A) the Conversion Price in effect immediately prior
to the opening of business on the day following the date fixed for such
determination by (B) a fraction, the numerator of which shall be the sum of (X)
the number of shares of Class A Common Stock outstanding on the close of
business on the date fixed for such determination and (Y) the number of shares
that could be purchased at such Fair Market Value from the aggregate proceeds
to the Corporation from the exercise of such rights, options or warrants for
Class A Common Stock, and the denominator of which shall be the sum of (XX) the
number of shares of Class A Common Stock outstanding on the close of business
on the date fixed for such determination and (YY) the number of additional
shares of Class A Common Stock offered for subscription or purchase pursuant to
such rights, options or warrants. Such adjustment shall become effective
immediately after the opening of business on the day next following such record
date (except as provided in paragraph (e) below). In determining whether any
rights, options or warrants entitle the holders of Class A Common Stock to
subscribe for or purchase Class A Common Stock at less than such Fair Market
Value, there shall be taken into account any consideration received by the
Corporation upon issuance and upon exercise of such rights, options or
warrants, the value of such consideration, if other than cash, to be determined
in good faith by the Board of Directors.
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(iii) If the Corporation shall after the Issue Date make
a distribution on its Class A Common Stock other than in cash or shares of
Class A Common Stock (including any distribution in securities (other than
rights, options or warrants referred to in paragraph (a)(ii) of this Section
7.3)) (each of the foregoing being referred to herein as a "distribution"),
then the Conversion Price in effect at the opening of business on the next day
following the record date for determination of stockholders entitled to receive
such distribution shall be adjusted to equal the price determined by
multiplying (A) the Conversion Price in effect immediately prior to the opening
of business on the day following the record date by (B) a fraction, the
numerator of which shall be the difference between (X) the number of shares of
Class A Common Stock outstanding on the close of business on the record date
and (Y) the number of shares determined by dividing (aa) the aggregate value of
the property being distributed by (bb) the Fair Market Value per share of Class
A Common Stock on the record date, and the denominator of which shall be the
number of shares of Class A Common Stock outstanding on the close of business
on the record date. Such adjustment shall become effective immediately after
the opening of business on the day next following such record date (except as
provided below). The value of the property being distributed shall be as
determined in good faith by the Board of Directors; provided, however, if the
property being distributed is a publicly traded security, its value shall be
calculated in accordance with the procedure for calculating the Fair Market
Value of a share of Class A Common Stock (calculated for a period of five
consecutive Trading Days commencing on the twentieth Trading Day after the
distribution). Neither the issuance by the Corporation of rights, options or
warrants to subscribe for or purchase securities of the Corporation nor the
exercise thereof shall be deemed a distribution under this paragraph.
(iv) No adjustment in the Conversion Price shall be
required unless such adjustment would require a cumulative increase or decrease
of at least 1% in such price: provided, however, that any adjustments that by
reason of this paragraph (a)(iv) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment until made; and
provided, further, that any adjustment shall be required and made in accordance
with the provisions of this Section 7.3 (other than this paragraph (a)(iv)) not
later than such time as may be required in order to preserve the tax-free
nature of a distribution to the holders of shares of Class A Common Stock.
Notwithstanding any other provisions of this Section 7, the Corporation shall
not be required to make any adjustment of the Conversion Price for the issuance
of (A) any shares of Class A Common Stock pursuant to any plan providing for
the reinvestment of dividends or interest payable on securities of the
Corporation and the investment of optional amounts in shares of Class A Common
Stock under such plan or (B) any options, rights or shares of Class A Common
Stock pursuant to any stock option, stock purchases or other stock-based plan
maintained by the Corporation. All calculations under this Section 7 shall be
made to the nearest cent ($.005 being rounded upward) or to the nearest
one-tenth of a share (with .05 of a share being rounded upward), as the case
may be. Anything in this paragraph (a) of this Section 7 to the contrary
notwithstanding, the Corporation
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shall be entitled, to the extent permitted by law, to make such reductions in
the Conversion Price, in addition to those required by this paragraph (a), as
it in its discretion shall determine to be advisable in order that any stock
dividends, subdivision of shares, reclassification or combination of shares,
distribution of rights or warrants to purchase stock or securities, or a
distribution of other assets (other than cash dividends) hereafter made by the
Corporation to its stockholders shall not be taxable, or if that is not
possible, to diminish any income taxes that are otherwise payable because of
such event.
(b) If the Corporation shall be a party to any transaction
(including with limitation a merger, consolidation, statutory share exchange,
sale of all or substantially all of the Corporation's assets or
recapitalization of the Class A Common Stock, but excluding any transaction as
to which paragraph (a)(i) of this Section 7.3 applies) (each of the foregoing
being referred to herein as a "Transaction"), in each case as a result of which
shares of Class A Common Stock shall be converted into the right to receive
stock, securities or other property (including cash or any combination
thereof), each share of Class J Preferred Stock which is not converted into the
right to receive stock, securities or other property in connection with such
Transaction shall thereupon be convertible into the kind and amount of shares
of stock, securities and other property (including cash or any combination
thereof) receivable upon such consummation by a holder of that number of shares
of Class A Common Stock into which one share of Class J Preferred Stock was
convertible immediately prior to such Transaction. The Corporation shall not be
a party to any Transaction unless the terms of such Transaction are consistent
with the provisions of this paragraph (b), and it shall not consent or agree to
the occurrence of any Transaction until the Corporation has entered into an
agreement with the successor or purchasing entity, as the case may be, for the
benefit of the holders of the Class J Preferred Stock that will contain
provisions enabling the holders of the Class J Preferred Stock that remain
outstanding after such Transaction to convert into the consideration received
by holders of Class A Common Stock at the Conversion Price in effect
immediately apply to successive Transactions:
(c) If:
(i) the Corporation shall declare a dividend (or any
other distribution) on the Class A Common Stock (other than cash dividends and
cash distributions); or
(ii) the Corporation shall authorize the granting to all
holders of the Class A Common Stock of rights or warrants to subscribe for or
purchase any shares of any class or series of capital stock or any other rights
or warrants; or
(iii) there shall be any reclassification of the
outstanding Class A Common Stock or any consolidation or merger to which the
Corporation is a party and for which approval of any stockholders of the
Corporation is required, or a statutory share exchange, or the sale or transfer
of all or substantially all of the assets of the Corporation as an entirety; or
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(iv) there shall occur the voluntary or involuntary
liquidation, dissolution or winding up of the Corporation,
then the Corporation shall cause to be filed with the Transfer Agent and shall
cause to be mailed to each holder of shares of Class J Preferred Stock at such
holder's address as shown on the stock records of the Corporation, as promptly
as possible, a notice stating (A) the record date for the payment of such
dividend, distribution or rights or warrants, or, if a record date is not
established, the date as of which the holders of Class A Common Stock of record
to be entitled to such dividend, distribution or rights or warrants are to be
determined or (B) the date on which such reclassification, consolidation,
merger, statutory share exchange, sale, transfer, liquidation, dissolution or
winding up is expected to become effective, and the date as of which it is
expected that holders of Class A Common Stock of record shall be entitled to
exchange their shares of Class A Common Stock for securities or other property,
if any, deliverable upon such reclassification, consolidation, merger, statutory
share exchange, sale, transfer, liquidation, dissolution or winding up. Failure
to give or receive such notice or any defect therein shall not affect the
legality or validity of the proceedings described in this Section 7.
(d) Whenever the Conversion Price is adjusted as herein
provided, the Corporation shall promptly file with the Transfer Agent an
officer's certificate setting forth the Conversion Price after such adjustment
and setting forth a brief statement of the facts requiring such adjustment
which certificate shall be conclusive evidence of the correctness of such
adjustment absent manifest error. Promptly after delivery of such certificate,
the Corporation shall prepare a notice of such adjustment of the Conversion
Price setting forth the adjusted Conversion Price and the effective date such
adjustment becomes effective and shall mail such notice of such adjustment of
the Conversion Price to each holder of shares of Class J Preferred Stock at
such holder's address as shown on the stock record of the Corporation.
(e) In any case in which paragraph (a) of this Section 7.3
provides that an adjustment shall become effective on the day next following
the record date for an event, the Corporation may defer until the occurrence of
such event (A) issuing to the holder of any share of Class J Preferred Stock
converted after such record date and before the occurrence of such event the
additional Class A Common Stock issuable upon such conversion by reason of the
adjustment required by such event over and above the Class A Common Stock
issuable upon such conversion before giving effect to such adjustment and (B)
paying to such holder any amount of cash in lieu of any fraction pursuant to
Section 7.2(d) or Section 7.1(c).
(f) There shall be no adjustment of the Conversion Price in
case of the issuance of any capital stock of the Corporation except as
specifically set forth in
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this Section 7. In addition, notwithstanding any other provision contained
in this Section 7, there shall be no adjustment of the Conversion Price upon
the payment of any cash dividends or distributions on any capital stock of the
Corporation, including, without limitation, the Special Dividend (as such term
is defined in the Class E Articles Supplementary) on the Corporation's Class E
Preferred Stock or upon the automatic conversion of the shares of such
Preferred Stock into shares of Class A Common Stock, as provided in the Class E
Articles Supplementary.
(g) If the Corporation shall take any action affecting the
Class A Common Stock, other than action described in this Section 7, that in
the opinion of the Board of Directors would materially adversely affect the
conversion rights of the holders of Class J Preferred Stock, the Conversion
Price for the Class J Preferred Stock may be adjusted, to the extent permitted
by law in such manner, if any, and at such time as the Board of Directors, in
its sole discretion, may determine to be equitable under the circumstances.
(h) The Corporation shall at all times reserve and keep
available, free from preemptive rights, out of the aggregate of its authorized
but unissued Class A Common Stock solely for the purpose of effecting
conversion of the Class J Preferred Stock, the full number of shares of Class A
Common Stock deliverable upon the conversion of all outstanding shares of Class
J Preferred Stock not theretofore converted into Class A Common Stock. For
purposes of this paragraph (h), the number of shares of Class A Common Stock
that shall be deliverable upon the conversion of all outstanding shares of
Class J Preferred Stock shall be computed as if at the time of computation all
such outstanding shares were held by a single holder (and without regard to the
Ownership Limit).
The Corporation covenants that any shares of Class A Common Stock
issued upon conversion of the shares of Class J Preferred Stock shall be
validly issued, fully paid and nonassessable.
The Corporation shall use its best efforts to list the shares of Class
A Common Stock required to be delivered upon conversion of the shares of Class
J Preferred Stock, prior to such delivery, upon each national securities
exchange, if any, upon which the outstanding shares of Class A Common Stock are
listed at the time of such delivery.
(i) The Corporation will pay any and all documentary stamp or
similar issue or transfer taxes payable in respect of the issue or delivery of
shares of Class A Common Stock or other securities or property on conversion of
shares of Class J Preferred Stock pursuant hereto; provided, however, that the
Corporation shall not be required to pay any tax that may be payable in respect
of any transfer involved in the issue or delivery of shares of Class A Common
Stock or other securities or property in a name other than that of the holder
of the shares of Class J Preferred Stock to be converted, and no such issue or
delivery shall be made unless
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and until the Person requesting such issue or delivery has paid to the
Corporation the amount of any such tax or established, to the reasonable
satisfaction of the Corporation, that such tax has been paid.
(j) In addition to any other adjustment required hereby, to
the extent permitted by law, the Corporation from time to time may decrease the
Conversion Price by any amount, permanently or for a period of at least twenty
Business Days, if the decrease is irrevocable during the period.
(k) Notwithstanding anything to the contrary contained in
this Section 7, conversion of Class J Preferred Stock pursuant to this Section
7 shall be permitted only to the extent that such conversion would not result
in a violation of the Ownership Restrictions (as defined in the Charter), after
taking into account any waiver of such limitation granted to any holder of the
shares of Class J Preferred Stock.
8. RANKING.
Any class or series of capital stock of the Corporation shall be
deemed to rank:
(a) prior or senior to the Class J Preferred Stock, as to the
payment of dividends and as to distribution of assets upon liquidation,
dissolution or winding up, if the holders of such class or series shall be
entitled to the receipt of dividends and of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in preference or
priority to the holders of Class J Preferred Stock ("Senior Stock");
(b) on a parity with the Class J Preferred Stock, as to the
payment of dividends and as to distribution of assets upon liquidation,
dissolution or winding up, whether or not the dividend rates, dividend payment
dates or liquidation prices per share thereof be different from those of the
Class J Preferred Stock, if (i) such capital stock is Class B Cumulative
Convertible Preferred Stock, Class C Cumulative Preferred Stock, Class D
Cumulative Preferred Stock, Class G Cumulative Preferred Stock, or Class H
Cumulative Preferred Stock of the Corporation, or (ii) the holders of such
class of stock or series and the Class J Preferred Stock shall be entitled to
the receipt of dividends and of amounts distributable upon liquidation,
dissolution or winding up in proportion to their respective amounts of accrued
and unpaid dividends per share or liquidation preferences, without preference
or priority of one over the other (the capital stock referred to in clauses (i)
and (ii) of this paragraph being hereinafter referred to, collectively, as
"Parity Stock"); and
(c) junior to the Class J Preferred Stock, as to the payment
of dividends and as to the distribution of assets upon liquidation, dissolution
or winding up, if (i) such capital stock or series shall be Common Stock, (ii)
such capital stock is Class E Cumulative Convertible Preferred Stock or (iii)
the holders of Class J
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Preferred Stock shall be entitled to receipt of dividends or of amounts
distributable upon liquidation, dissolution or winding up, as the case may be,
in preference or priority to the holders of shares of such class or series (the
capital stock referred to in clauses (i), (ii) and (iii) of this paragraph
being hereinafter referred to, collectively, as "Junior Stock").
9. VOTING.
(a) If and whenever six quarterly dividends (whether or not
consecutive) payable on the Class J Preferred Stock or any series or class of
Parity Stock shall be in arrears (which shall, with respect to any such
quarterly dividend, mean that any such dividend has not been paid in full),
whether or not earned or declared, the number of directors then constituting
the Board of Directors shall be increased by two (if not already increased by
reason of similar types of provisions with respect to shares of Parity Stock of
any other class or series which is entitled to similar voting rights (the
"Voting Preferred Stock")) and the holders of shares of Class J Preferred
Stock, together with the holders of shares of all other Voting Preferred Stock
then entitled to exercise similar voting rights, voting as a single class
regardless of series, shall be entitled to elect the two additional directors
to serve on the Board of Directors at any annual meeting of stockholders or
special meeting held in place thereof, or at a special meeting of the holders
of the Class J Preferred Stock and the Voting Preferred Stock called as
hereinafter provided. Whenever all arrears in dividends on the Class J
Preferred Stock and the Voting Preferred Stock then outstanding shall have been
paid and dividends thereon for the current quarterly dividend period shall have
been declared and paid, or declared and set apart for payment, then the right
of the holders of the Class J Preferred Stock and the Voting Preferred Stock to
elect such additional two directors shall cease (but subject always to the same
provision for the vesting of such voting rights in the case of any similar
future arrearages), and the terms of office of all persons elected as directors
by the holders of the Class J Preferred Stock and the Voting Preferred Stock
shall forthwith terminate and the number of directors constituting the Board of
Directors shall be reduced accordingly. At any time after such voting power
shall have been so vested in the holders of Class J Preferred Stock and the
Voting Preferred Stock, if applicable, the Secretary of the Corporation may,
and upon the written request of any holder of Class J Preferred Stock
(addressed to the Secretary at the principal office of the Corporation) shall,
call a special meeting of the holders of the Class J Preferred Stock and of the
Voting Preferred Stock for the election of the two directors to be elected by
them as herein provided, such call to be made by notice similar to that
provided in the Bylaws of the Corporation for a special meeting of the
stockholders or as required by law. If any such special meeting required to be
called as above provided shall not be called by the Secretary within 20 days
after receipt of any such request, then any holder of Class J Preferred Stock
may call such meeting, upon the notice above provided, and for that purpose
shall have access to the stock books of the Corporation. The directors elected
at any such special meeting shall hold office until the next annual meeting of
the stockholders or special meeting held in lieu
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thereof if such office shall not have previously terminated as above provided.
If any vacancy shall occur among the directors elected by the holders of the
Class J Preferred Stock and the Voting Preferred Stock, a successor shall be
elected by the Board of Directors, upon the nomination of the then-remaining
director elected by the holders of the Class J Preferred Stock and the Voting
Preferred Stock or the successor of such remaining director, to serve until the
next annual meeting of the stockholders or special meeting held in place
thereof if such office shall not have previously terminated as provided above.
(b) So long as any shares of Class J Preferred Stock are
outstand ing, in addition to any other vote or consent of stockholders required
by law or by the Charter of the Corporation, the affirmative vote of at least
66-2/3% of the votes entitled to be cast by the holders of the Class J
Preferred Stock voting as a single class with the holders of all other classes
or series of Parity Stock entitled to vote on such matters, given in person or
by proxy, either in writing without a meeting or by vote at any meeting called
for the purpose, shall be necessary for effecting or validating:
(i) Any amendment, alteration or repeal of any of the
provisions of, or the addition of any provision to, these Articles
Supplementary, the Charter or the By-Laws of the Corporation that materially
adversely affects the voting powers, rights or preferences of the holders of
the Class J Preferred Stock; provided, however, that the amendment of or
supplement to the provisions of the Charter so as to authorize or create, or to
increase or decrease the authorized amount of, or to issue any Junior Stock,
Class J Preferred Stock or any shares of any class of Parity Stock shall not be
deemed to materially adversely affect the voting powers, rights or preferences
of the holders of Class J Preferred Stock; or
(ii) The authorization, creation of, increase in the
authorized amount of, or issuance of any shares of any class or series of
Senior Stock or any security convertible into shares of any class or series of
Senior Stock (whether or not such class or series of Senior Stock is currently
authorized).
For purposes of the foregoing provisions and all other voting rights
under these Articles Supplementary, each share of Class J Preferred Stock shall
have one (1) vote per share, except that when any other class or series of
preferred stock of the Corporation shall have the right to vote with the Class
J Preferred Stock as a single class on any matter, then the Class J Preferred
Stock and such other class or series shall have with respect to such matters
one quarter of one (.25) vote per $25 of stated liquidation preference. Except
as otherwise required by applicable law or as set forth herein or in the
Charter, the Class J Preferred Stock shall not have any relative,
participating, optional or other special voting rights and powers other than as
set forth herein, and the consent of the holders thereof shall not be required
for the taking of any corporate action.
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10. RECORD HOLDERS.
The Corporation and the Transfer Agent may deem and treat the record
holder of any share of Class J Preferred Stock as the true and lawful owner
thereof for all purposes, and neither the Corporation nor the Transfer Agent
shall be affected by any notice to the contrary.
11. OWNERSHIP AND TRANSFERS.
11.1 RESTRICTIONS ON OWNERSHIP AND TRANSFERS.
(a) Limitation on Beneficial Ownership. Except as
provided in Section 11.8, from and after the Issue Date, no Person (other than
the Initial Holder) shall Beneficially Own shares of Class J Preferred Stock in
excess of the Ownership Limit and the Initial Holder shall not Beneficially Own
shares of Class J Preferred Stock in excess of the Initial Holder Limit.
(b) Transfers in Excess of Ownership Limit. Except as
provided in Section 11.8, from and after the Issue Date (and subject to Section
11.12), any Transfer (whether or not such Transfer is the result of
transactions entered into through the facilities of the NYSE or other
securities exchange or an automated inter-dealer quotation system) that, if
effective, would result in any Person (other than the Initial Holder)
Beneficially Owning shares of Class J Preferred Stock in excess of the
Ownership Limit shall be void ab initio as to the Transfer of such shares of
Class J Preferred Stock that would be otherwise Beneficially Owned by such
Person in excess of the Ownership Limit, and the intended transferee shall
acquire no rights in such shares of Class J Preferred Stock.
(c) Transfers in Excess of Initial Holder Limit. Except
as provided in Section 11.8, from and after the Issue Date (and subject to
Section 11.12), any Transfer (whether or not such Transfer is the result of
transactions entered into through the facilities of the NYSE or other
securities exchange or an automated inter-dealer quotation system) that, if
effective, would result in the Initial Holder Beneficially Owning shares of
Class J Preferred Stock in excess of the Initial Holder Limit shall be void ab
initio as to the Transfer of such shares of Class J Preferred Stock that would
be otherwise Beneficially Owned by the Initial Holder in excess of the Initial
Holder limit, and the Initial Holder shall acquire no rights in such shares of
Class J Preferred Stock.
(d) Transfers Resulting in "Closely Held" Status. From
and after the Issue Date, any Transfer that, if effective would result in the
Corporation being "closely held" within the meaning of Section 856(h) of the
Code, or would otherwise result in the Corporation failing to qualify as a REIT
(including, without limitation, a Transfer or other event that would result in
the Corporation owning (directly or constructively) an interest in a tenant
that is described in Section
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856(d)(2)(B) of the Code if the income derived by the Corporation from such
tenant would cause the Corporation to fail to satisfy any of the gross income
requirements of Section 856(c) of the Code) shall be void ab initio as to the
Transfer of shares of Class J Preferred Stock that would cause the Corporation
(i) to be "closely held" within the meaning of Section 856(h) of the Code or
(ii) otherwise fail to qualify as a REIT, as the case may be, and the intended
transferee shall acquire no rights in such shares of Class J Preferred Stock.
(e) Severability on Void Transactions. A Transfer of a
share of Class J Preferred Stock that is null and void under Sections 11.1(b),
(c) or (d) of this Article because it would, if effective, result in (i) the
ownership of Class J Preferred Stock in excess of the Initial Holder Limit or
the Ownership Limit, (ii) the Corporation being "closely held" within the
meaning of Section 856(h) of the Code or (iii) the Corporation otherwise
failing to qualify as a REIT, shall not adversely affect the validity of the
Transfer of any other share of Class J Preferred Stock in the same or any other
related transaction.
11.2 REMEDIES FOR BREACH. If the Board of Directors or a
committee thereof shall at any time determine in good faith that a Transfer or
other event has taken place in violation of Section 11.1 of this Article or
that a Person intends to acquire or has attempted to acquire Beneficial
Ownership of any shares of Class J Preferred Stock in violation of Section 11.1
of this Article (whether or not such violation is intended), the Board of
Directors or a committee thereof shall be empowered to take any action as it
deems advisable to refuse to give effect to or to prevent such Transfer or
other event, including, but not limited to, refusing to give effect to such
Transfer or other event on the books of the Corporation, causing the
Corporation to redeem such shares at the then Current Market Price and upon
such terms and conditions as may be specified by the Board of Directors in its
sole discretion (including, but not limited to, by means of the issuance of
long-term indebtedness for the purpose of such redemption), demanding the
repayment of any distributions received in respect of shares of Class J
Preferred Stock acquired in violation of Section 11.1 of this Article or
instituting proceedings to enjoin such Transfer or to rescind such Transfer or
attempted Transfer; provided, however, that any Transfers or attempted
Transfers (or, in the case of events other than a Transfer, Beneficial
Ownership) in violation of Section 11.1 of this Article, regardless of any
action (or non-action) by the Board of Directors or such committee, (a) shall
be void ab initio or (b) shall automatically result in the transfer described
in Section 11.3 of this Article; provided, further, that the provisions of this
Section 11.2 shall be subject to the provisions of Section 11.12 of this
Article; provided, further, that neither the Board of Directors nor any
committee thereof may exercise such authority in a manner that interferes with
any ownership or transfer of Class J Preferred Stock that is expressly
authorized pursuant to Section 11.8(c) of this Article.
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11.3 TRANSFER IN TRUST.
(a) Establishment of Trust. If, notwithstanding the
other provisions contained in this Article, at any time after the Issue Date
there is a purported Transfer (an "Excess Transfer") (whether or not such
Transfer is the result of transactions entered into through the facilities of
the NYSE or other securities exchange or an automated inter-dealer quotation
system) or other change in the capital structure of the Corporation (including,
but not limited to, any redemption of Equity Stock) or other event (including,
but not limited to, any acquisition of any share of Equity Stock) such that (a)
any Person (other than the Initial Holder) would Beneficially Own shares of
Class J Preferred Stock in excess of the Ownership Limit, or (b) the Initial
Holder would Beneficially Own shares of Class J Preferred Stock in excess of
the Initial Holder Limit (in either such event, the Person or Initial Holder
that would Beneficially Own shares of Class J Preferred Stock in excess of the
Ownership Limit or the Initial Holder Limit, respectively, is referred to as a
"Prohibited Transferee"), then, except as otherwise provided in Section 11.8 of
this Article, such shares of Class J Preferred Stock in excess of the Ownership
Limit or the Initial Holder Limit, as the case may be, (rounded up to the
nearest whole share) shall be automatically transferred to a Trustee in his
capacity as trustee of a Trust for the exclusive benefit of one or more
Charitable Beneficiaries. Such transfer to the Trustee shall be deemed to be
effective as of the close of business on the Business Day prior to the Excess
Transfer, change in capital structure or another event giving rise to a
potential violation of the Ownership Limit or the Initial Holder Limit.
(b) Appointment of Trustee. The Trustee shall be
appointed by the Corporation and shall be a Person unaffiliated with either the
Corporation or any Prohibited Transferee. The Trustee may be an individual or a
bank or trust company duly licensed to conduct a trust business.
(c) Status of Shares Held by the Trustee. Shares of
Class J Preferred Stock held by the Trustee shall be issued and outstanding
shares of capital stock of the Corporation. Except to the extent provided in
Section 11.3(e), the Prohibited Transferee shall have no rights in the Class J
Preferred Stock held by the Trustee, and the Prohibited Transferee shall not
benefit economically from ownership of any shares held in trust by the Trustee,
shall have no rights to dividends and shall not possess any rights to vote or
other rights attributable to the shares held in the Trust.
(d) Dividend and Voting Rights. The Trustee shall have
all voting rights and rights to dividends with respect to shares of Class J
Preferred Stock held in the Trust, which rights shall be exercised for the
benefit of the Charitable Beneficiary. Any dividend or distribution paid prior
to the discovery by the Corporation that the shares of Class J Preferred Stock
have been transferred to the Trustee shall be repaid to the Corporation upon
demand, and any dividend or distribution declared but unpaid shall be rescinded
as void ab initio with respect to such shares of Class J Preferred Stock. Any
dividends or distributions so disgorged or rescinded shall be paid over to the
Trustee and held in trust for the Charitable
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Beneficiary. Any vote cast by a Prohibited Transferee prior to the discovery by
the Corporation that the shares of Class J Preferred Stock have been
transferred to the Trustee will be rescinded as void ab initio and shall be
recast in accordance with the desires of the Trustee acting for the benefit of
the Charitable Beneficiary. The owner of the shares at the time of the Excess
Transfer, change in capital structure or other event giving rise to a potential
violation of the Ownership Limit or the Initial Holder Limit shall be deemed to
have given an irrevocable proxy to the Trustee to vote the shares of Class J
Preferred Stock for the benefit of the Charitable Beneficiary.
(e) Restrictions on Transfer. The Trustee of the Trust
may sell the shares held in the Trust to a Person, designated by the Trustee,
whose ownership of the shares will not violate the Ownership Restrictions. If
such a sale is made, the interest of the Charitable Beneficiary shall terminate
and proceeds of the sale shall be payable to the Prohibited Transferee and to
the Charitable Beneficiary as provided in this Section 11.3(e). The Prohibited
Transferee shall receive the lesser of (1) the price paid by the Prohibited
Transferee for the shares or, if the Prohibited Transferee did not give value
for the shares (through a gift, devise or other transaction), the Market Price
of the shares on the day of the event causing the shares to be held in the
Trust and (2) the price per share received by the Trustee from the sale or
other disposition of the shares held in the Trust. Any proceeds in excess of
the amount payable to the Prohibited Transferee shall be payable to the
Charitable Beneficiary. If any of the transfer restrictions set forth in this
Section 11.3(e) or any application thereof is determined in a final judgment to
be void, invalid or unenforceable by any court having jurisdiction over the
issue, the Prohibited Transferee may be deemed, at the option of the
Corporation, to have acted as the agent of the Corporation in acquiring the
Class J Preferred Stock as to which such restrictions would, by their terms,
apply, and to hold such Class J Preferred Stock on behalf of the Corporation.
(f) Purchase Right in Stock Transferred to the Trustee.
Shares of Class J Preferred Stock transferred to the Trustee shall be deemed to
have been offered for sale to the Corporation, or its designee, at a price per
share equal to the lesser of (i) the price per share in the transaction that
resulted in such transfer to the Trust (or, in the case of a devise or gift,
the Market Price at the time of such devise or gift) and (ii) the Market Price
on the date the Corporation, or its designee, accepts such offer. The
Corporation shall have the right to accept such offer for a period of 90 days
after the later of (i) the date of the Excess Transfer or other event resulting
in a transfer to the Trust and (ii) the date that the Board of Directors
determines in good faith that an Excess Transfer or other event occurred.
(g) Designation of Charitable Beneficiaries. By written
notice to the Trustee, the Corporation shall designate one or more nonprofit
organizations to be the Charitable Beneficiary of the interest in the Trust
relating to such Prohibited Transferee if (i) the shares of Class J Preferred
Stock held in the Trust would not violate the Ownership Restrictions in the
hands of such Charitable Beneficiary and (ii)
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each Charitable Beneficiary is an organization described in Sections
170(b)(1)(A), 170(c)(2) and 501(c)(3) of the Code.
11.4 NOTICE OF RESTRICTED TRANSFER. Any Person that acquires
or attempts to acquire shares of Class J Preferred Stock in violation of
Section 11.1 of this Article, or any Person that is a Prohibited Transferee
such that stock is transferred to the Trustee under Section 11.3 of this
Article, shall immediately give written notice to the Corporation of such event
and shall provide to the Corporation such other information as the Corporation
may request in order to determine the effect, if any, of such Transfer or
attempted Transfer or other event on the Corporation's status as a REIT.
Failure to give such notice shall not limit the rights and remedies of the
Board of Directors provided herein in any way.
11.5 OWNERS REQUIRED TO PROVIDE INFORMATION. From and after
the Issue Date certain record and Beneficial Owners and transferees of shares
of Class J Preferred Stock will be required to provide certain information as
set out below.
(a) Annual Disclosure. Every record and Beneficial Owner
of more than 5% (or such other percentage between 0.5% and 5%, as provided in
the applicable regulations adopted under the Code) of the number of Outstanding
shares of Class J Preferred Stock shall, within 30 days after January 1 of each
year, give written notice to the Corporation stating the name and address of
such record or Beneficial Owner, the number of shares of Class J Preferred
Stock Beneficially Owned, and a full description of how such shares are held.
Each such record or Beneficial Owner of Class J Preferred Stock shall, upon
demand by the Corporation, disclose to the Corporation in writing such
additional information with respect to the Beneficial Ownership of the Class J
Preferred Stock as the Board of Directors, in its sole discretion, deems
appropriate or necessary to (i) comply with the provisions of the Code
regarding the qualification of the Corporation as a REIT under the Code and
(ii) ensure compliance with the Ownership Limit or the Initial Holder Limit, as
applicable. Each stockholder of record, including without limitation any Person
that holds shares of Class J Preferred Stock on behalf of a Beneficial Owner,
shall take all reasonable steps to obtain the written notice described in this
Section 11.5 from the Beneficial Owner.
(b) Disclosure at the Request of the Corporation. Any
Person that is a Beneficial Owner of shares of Class J Preferred Stock and any
Person (including the stockholder of record) that is holding shares of Class J
Preferred Stock for a Beneficial Owner, and any proposed transferee of shares,
shall provide such information as the Corporation, in its sole discretion, may
request in order to determine the Corporation's status as a REIT, to comply
with the requirements of any taxing authority or other governmental agency, to
determine any such compliance or to ensure compliance with the Ownership Limit
and the Initial Holder Limit, and shall provide a statement or affidavit to the
Corporation setting forth the number of shares of Class J Preferred Stock
already Beneficially Owned by such stockholder or
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proposed transferee and any related persons specified, which statement or
affidavit shall be in the form prescribed by the Corporation for that purpose.
11.6 REMEDIES NOT LIMITED. Nothing contained in this Article
shall limit the authority of the Board of Directors to take such other action
as it deems necessary or advisable (subject to the provisions of Section 11.12
of this Article) (i) to protect the Corporation and the interests of its
stockholders in the preservation of the Corporation's status as a REIT and (ii)
to insure compliance with the Ownership Limit and the Initial Holder Limit.
11.7 AMBIGUITY. In the case of an ambiguity in the
application of any of the provisions of Section 11 of this Article, or in the
case of an ambiguity in any definition contained in Section 11 of this Article,
the Board of Directors shall have the power to determine the application of the
provisions of this Article with respect to any situation based on its
reasonable belief, understanding or knowledge of the circumstances.
11.8 EXCEPTIONS. The following exceptions shall apply or may
be established with respect to the limitations of Section 11.1 of this Article.
(a) Waiver of Ownership Limit. The Board of Directors,
upon receipt of a ruling from the Internal Revenue Service or an opinion of tax
counsel or other evidence or undertaking acceptable to it, may, but shall not
be required to, waive the application, in whole or in part, of the Ownership
Limit to a Person subject to the Ownership Limit, if such person is not an
individual for purposes of Section 542(a) of the Code and is a corporation,
partnership, estate or trust. In connection with any such exemption, the Board
of Directors may require such representations and undertakings from such Person
and may impose such other conditions as the Board of Directors deems necessary,
in its sole discretion.
(b) Pledge by Initial Holder. Notwithstanding any other
provision of this Article, the pledge by the Initial Holder of all or any
portion of the Class J Preferred Stock directly owned at any time or from time
to time shall not constitute a violation of Section 11.1 of this Article and
the pledgee shall not be subject to the Ownership Limit with respect to the
Class J Preferred Stock so pledged to it either as a result of the pledge or
upon foreclosure.
(c) Underwriters. For a period of 270 days (or such
longer period of time as any underwriter described below shall hold an unsold
allotment of Class J Preferred Stock) following the purchase of Class J
Preferred Stock by an underwriter that (i) is a corporation, partnership or
other legal entity and (ii) participates in an offering of the Class J
Preferred Stock, such underwriter shall not be subject to the Ownership Limit
with respect to the Class J Preferred Stock purchased by it as a part of or in
connection with such offering and with respect to any Class J Preferred Stock
purchased in connection with market making activities.
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11.9 LEGEND. Each certificate for Class J Preferred Stock
shall bear substantially the following legend:
"The shares of Class J Cumulative Convertible Preferred
Stock represented by this certificate are subject to restrictions on
transfer. No person may Beneficially Own shares of Class J Cumulative
Convertible Preferred Stock in excess of the Ownership Restrictions,
as applicable, with certain further restrictions and exceptions set
forth in the Charter (including the Articles Supplementary setting
forth the terms of the Class J Cumulative Convertible Preferred
Stock). Any Person that attempts to Beneficially Own shares of Class J
Cumulative Convertible Preferred Stock in excess of the applicable
limitation must immediately notify the Corporation. All capitalized
terms in this legend have the meanings ascribed to such terms in the
Charter (including the Articles Supplementary setting forth the terms
of the Class J Cumulative Convertible Preferred Stock), as the same
may be amended from time to time, a copy of which, including the
restrictions on transfer, will be sent without charge to each
stockholder that so requests. If the restrictions on transfer are
violated (i) the transfer of the shares of Class J Cumulative
Convertible Preferred Stock represented hereby will be void in
accordance with the Charter (including the Articles Supplementary
setting forth the terms of the Class J Cumulative Convertible
Preferred Stock) or (ii) the shares of Class J Cumulative Convertible
Preferred Stock represented hereby will automatically be transferred
to a Trustee of a Trust for the benefit of one or more Charitable
Beneficiaries."
11.10 SEVERABILITY. If any provision of this Article or any
application of any such provision is determined in a final and unappealable
judgment to be void, invalid or unenforceable by any Federal or state court
having jurisdiction over the issues, the validity and enforceability of the
remaining provisions shall not be affected and other applications of such
provision shall be affected only to the extent necessary to comply with the
determination of such court.
11.11 BOARD OF DIRECTORS DISCRETION. Anything in this Article
to the contrary notwithstanding, the Board of Directors shall be entitled to
take or omit to take such actions as it in its discretion shall determine to be
advisable in order that the Corporation maintain its status as and continue to
qualify as a REIT, including, but not limited to, reducing the Ownership Limit
and the Initial Holder Limit in the event of a change in law.
11.12 SETTLEMENT. Nothing in this Section 11 of this Article
shall be interpreted to preclude the settlement of any transaction entered into
through the facilities of the NYSE or other securities exchange or an automated
inter-dealer quotation system.
31
<PAGE> 183
FOURTH: The terms of the Class J Cumulative Convertible Preferred
Stock set forth in Article Third hereof shall become Article XX of the Charter.
32
<PAGE> 184
IN WITNESS WHEREOF, the Corporation has caused these presents to be
signed in its name and on its behalf by its Senior Vice President and Chief
Financial Officer and witnessed by its Assistant Secretary on November 6, 1998.
WITNESS: APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
/s/ LUCY CORDOVA /s/ TROY D. BUTTS
- ------------------------- ---------------------------------------------
Lucy Cordova Troy D. Butts
Assistant Secretary Senior Vice President and
Chief Financial Officer
THE UNDERSIGNED, Senior Vice President and Chief Financial Officer of
APARTMENT INVESTMENT AND MANAGEMENT COMPANY, who executed on behalf of the
Corporation the Articles Supplementary of which this Certificate is made a
part, hereby acknowledges in the name and on behalf of said Corporation the
foregoing Articles Supplementary to be the corporate act of said Corporation
and hereby certifies that the matters and facts set forth herein with respect
to the authorization and approval thereof are true in all material respects
under the penalties of perjury.
/s/ TROY D. BUTTS
---------------------------------------------
Troy D. Butts
Senior Vice President and
Chief Financial Officer
<PAGE> 185
CERTIFICATE OF CORRECTION
to
ARTICLES SUPPLEMENTARY
Class C Cumulative Preferred Stock
(Par Value $.01 Per Share)
of
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
(a Maryland corporation)
APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation
(the "Corporation"), having its principal office in Baltimore City, Maryland,
hereby certifies to the State Department of Assessments and Taxation of
Maryland that:
FIRST: Articles Supplementary, dated December 22, 1997, of the
Corporation were filed with the State Department of Assessments and Taxation of
Maryland on December 22, 1997, at 1:38 p.m. (as corrected by the Certificate of
Correction to Articles Supplementary of the Corporation, dated February 17,
1998 and filed with the State Department of Assessments and Taxation of
Maryland on February 18, 1998) and said Articles Supplementary require
correction as permitted by Section 1-207 of the Corporations and Associations
Article of the Annotated Code of Maryland.
SECOND: Section 10.9 of ARTICLE THIRD of the Articles Supplementary as
previously filed and to be corrected hereby reads as follows:
10.9 Legend. Each certificate for Class C Preferred Stock
shall bear the following legend:
"The shares of Class C Cumulative Preferred Stock
represented by this certificate are subject to restrictions
on transfer. No person may Beneficially Own shares of Class C
Cumulative Preferred Stock in excess of the Ownership
Restrictions, as applicable, with certain further
restrictions and exceptions set forth in the Corporation's
Charter (including the Articles Supplementary setting forth
the terms of the Class C Cumulative Preferred Stock). Any
Person that attempts to Beneficially Own shares of Class C
Cumulative Preferred Stock in excess of the applicable
limitation must immediately notify the Corporation. All
capitalized terms in this legend have the meanings ascribed
to such terms in the Corporation's Charter (including the
Articles Supplementary setting forth the terms of the Class C
Cumulative Preferred Stock), as the same may be amended from
time to time, a copy of which, including the restrictions on
transfer, will be sent without charge to each stockholder
that so requests. If the restrictions on transfer are
violated, the shares of Class C Cumulative Preferred Stock
represented hereby will be either (i)
<PAGE> 186
void in accordance with the Certificate or (ii) automatically
transferred to a Trustee of a Trust for the benefit of one or
more Charitable Beneficiaries."
THIRD: Section 10.9 of ARTICLE THIRD of the Articles Supplementary as
corrected hereby is as follows:
10.9 Legend. Each certificate for Class C Preferred Stock
shall bear the following legend:
"The shares of Class C Cumulative Preferred Stock
represented by this certificate are subject to restrictions
on transfer. No person may Beneficially Own shares of Class C
Cumulative Preferred Stock in excess of the Ownership
Restrictions, as applicable, with certain further
restrictions and exceptions set forth in the Charter
(including the Articles Supplementary setting forth the terms
of the Class C Cumulative Preferred Stock). Any Person that
attempts to Beneficially Own shares of Class C Cumulative
Preferred Stock in excess of the applicable limitation must
immediately notify the Corporation. All capitalized terms in
this legend have the meanings ascribed to such terms in the
Charter (including the Articles Supplementary setting forth
the terms of the Class C Cumulative Preferred Stock), as the
same may be amended from time to time, a copy of which,
including the restrictions on transfer, will be sent without
charge to each stockholder that so requests. If the
restrictions on transfer are violated (i) the transfer of the
shares of Class C Cumulative Preferred Stock represented
hereby will be void in accordance with the Charter (including
the Articles Supplementary setting forth the terms of the
Class C Cumulative Preferred Stock) or (ii) the shares of
Class C Cumulative Preferred Stock represented hereby will
automatically be transferred to a Trustee of a Trust for the
benefit of one or more Charitable Beneficiaries."
FOURTH: The inaccuracy or defect in the legend contained in Section
10.9 of ARTICLE THIRD of the Articles Supplementary as previously filed is
that the legend contains an inaccurate description of the effects of an
improper transfer as set forth elsewhere in the Charter.
2
<PAGE> 187
IN WITNESS WHEREOF, Apartment Investment and Management Company has
caused this Certificate of Correction to be signed in its name and on its
behalf by its Vice Chairman and President and witnessed by its Secretary on
October 21, 1998.
WITNESS: APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
/s/ JOEL F. BONDER By: /s/ PETER K. KOMPANIEZ
- ------------------------------- -----------------------------
Joel F. Bonder, Peter K. Kompaniez,
Secretary Vice Chairman and President
THE UNDERSIGNED, Vice Chairman and President of APARTMENT INVESTMENT
AND MANAGEMENT COMPANY, with respect to the foregoing Certificate of Correction
of which this certificate is made a part, hereby acknowledges, in the name and
on behalf of said Corporation, the foregoing Certificate of Correction to be
the act of said Corporation and further certifies that, to the best of his
knowledge, information and belief, the matters and facts set forth therein with
respect to the authorization and approval thereof are true in all material
respects, under the penalties of perjury.
By: /s/ PETER K. KOMPANIEZ
--------------------------------
Peter K. Kompaniez,
Vice Chairman and President
3
<PAGE> 188
CERTIFICATE OF CORRECTION
to
ARTICLES SUPPLEMENTARY
Class D Cumulative Preferred Stock
(Par Value $.01 Per Share)
of
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
(a Maryland corporation)
APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation
(the "Corporation"), having its principal office in Baltimore City, Maryland,
hereby certifies to the State Department of Assessments and Taxation of
Maryland that:
FIRST: Articles Supplementary, dated February 17, 1998, of the
Corporation were filed with the State Department of Assessments and Taxation of
Maryland on February 18, 1998, at 1:40 p.m. and said Articles Supplementary
require correction as permitted by Section 1-207 of the Corporations and
Associations Article of the Annotated Code of Maryland.
SECOND: Section 10.9 of ARTICLE THIRD of the Articles Supplementary as
previously filed and to be corrected hereby reads as follows:
10.9 Legend. Each certificate for Class D Preferred Stock
shall bear the following legend:
"The shares of Class D Cumulative Preferred Stock
represented by this certificate are subject to restrictions
on transfer. No person may Beneficially Own shares of Class D
Cumulative Preferred Stock in excess of the Ownership
Restrictions, as applicable, with certain further
restrictions and exceptions set forth in the Corporation's
Charter (including the Articles Supplementary setting forth
the terms of the Class D Cumulative Preferred Stock). Any
Person that attempts to Beneficially Own shares of Class D
Cumulative Preferred Stock in excess of the applicable
limitation must immediately notify the Corporation. All
capitalized terms in this legend have the meanings ascribed
to such terms in the Corporation's Charter (including the
Articles Supplementary setting forth the terms of the Class D
Cumulative Preferred Stock), as the same may be amended from
time to time, a copy of which, including the restrictions on
transfer, will be sent without charge to each stockholder
that so requests. If the restrictions on transfer are
violated, the shares of Class D Cumulative Preferred Stock
represented hereby will be either (i) void in accordance with
the Certificate or (ii) automatically transferred to a
Trustee of a Trust for the benefit of one or more Charitable
Beneficiaries."
<PAGE> 189
THIRD: Section 10.9 of ARTICLE THIRD of the Articles Supplementary as
corrected hereby is as follows:
10.9 Legend. Each certificate for Class D Preferred Stock
shall bear the following legend:
"The shares of Class D Cumulative Preferred Stock
represented by this certificate are subject to restrictions
on transfer. No person may Beneficially Own shares of Class D
Cumulative Preferred Stock in excess of the Ownership
Restrictions, as applicable, with certain further
restrictions and exceptions set forth in the Charter
(including the Articles Supplementary setting forth the terms
of the Class D Cumulative Preferred Stock). Any Person that
attempts to Beneficially Own shares of Class D Cumulative
Preferred Stock in excess of the applicable limitation must
immediately notify the Corporation. All capitalized terms in
this legend have the meanings ascribed to such terms in the
Charter (including the Articles Supplementary setting forth
the terms of the Class D Cumulative Preferred Stock), as the
same may be amended from time to time, a copy of which,
including the restrictions on transfer, will be sent without
charge to each stockholder that so requests. If the
restrictions on transfer are violated (i) the transfer of
shares of Class D Cumulative Preferred Stock represented
hereby will be void in accordance with the Charter (including
the Articles Supplementary setting forth the terms of the
Class D Cumulative Preferred Stock) or (ii) the shares of
Class D Cumulative Preferred Stock represented hereby will
automatically be transferred to a Trustee of a Trust for the
benefit of one or more Charitable Beneficiaries.
FOURTH: The inaccuracy or defect in the legend contained in Section
10.9 of ARTICLE THIRD of the Articles Supplementary as previously filed is that
the legend contains an inaccurate description of the effects of an improper
transfer as set forth elsewhere in the Charter.
2
<PAGE> 190
IN WITNESS WHEREOF, Apartment Investment and Management Company has
caused this Certificate of Correction to be signed in its name and on its
behalf by its Vice Chairman and President and witnessed by its Secretary on
October 21, 1998.
WITNESS: APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
/s/ JOEL F. BONDER By: /s/ PETER K. KOMPANIEZ
- ------------------------------- -----------------------------
Joel F. Bonder, Peter K. Kompaniez,
Secretary Vice Chairman and President
THE UNDERSIGNED, Vice Chairman and President of APARTMENT INVESTMENT
AND MANAGEMENT COMPANY, with respect to the foregoing Certificate of Correction
of which this certificate is made a part, hereby acknowledges, in the name and
on behalf of said Corporation, the foregoing Certificate of Correction to be
the act of said Corporation and further certifies that, to the best of his
knowledge, information and belief, the matters and facts set forth therein with
respect to the authorization and approval thereof are true in all material
respects, under the penalties of perjury.
By: /s/ PETER K. KOMPANIEZ
--------------------------------
Peter K. Kompaniez,
Vice Chairman and President
3
<PAGE> 191
ARTICLES SUPPLEMENTARY
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
CLASS K CONVERTIBLE CUMULATIVE PREFERRED STOCK
(PAR VALUE $.01 PER SHARE)
APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation
(hereinafter called the "Corporation"), having its principal office in
Baltimore City, Maryland, hereby certifies to the Department of Assessments and
Taxation of the State of Maryland that:
FIRST: Pursuant to authority expressly vested in the Board of
Directors of the Corporation by Section 1.2 of Article IV of the Charter of the
Corporation, as amended to date (the "Charter"), the Board of Directors has
duly divided and classified 5,750,000 authorized but unissued shares of Class A
Common Stock of the Corporation, par value $.01 per share (the "Class A Common
Stock"), into a class designated as Class K Convertible Cumulative Preferred
Stock, par value $.01 per share, and has provided for the issuance of such
class.
SECOND: The reclassification increases the number of shares classified
as Class K Convertible Cumulative Preferred Stock, par value $.01 per share,
from no shares immediately prior to the reclassification to 5,750,000 shares
immediately after the reclassification. The reclassification decreases the
number of shares classified as Class A Common Stock from 484,027,500 shares
immediately prior to the reclassification to 478,277,500 shares immediately
after the reclassification.
THIRD: The terms of the Class K Convertible Cumulative Preferred Stock
(including the preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends and other distributions,
qualifications, or terms or conditions of redemption) as set by the Board of
Directors are as follows:
1. NUMBER OF SHARES AND DESIGNATION.
This class of Preferred Stock shall be designated as Class K
Convertible Cumulative Preferred Stock, par value $.01 per share (the "Class K
Preferred Stock"), and Five Million Seven Hundred Fifty Thousand (5,750,000)
shall be the authorized number of shares of such Class K Preferred Stock
constituting such class.
2. DEFINITIONS.
For purposes of the Class K Preferred Stock, the following terms shall
have the meanings indicated:
<PAGE> 192
"Act" shall mean the Securities Act of 1933, as amended.
"affiliate" of a Person means a Person that directly, or indirectly
through one or more intermediaries, controls or is controlled by, or
is under common control with, the Person specified.
"Aggregate Value" shall mean, with respect to any block of Equity
Stock, the sum of the products of (i) the number of shares of each
class of Equity Stock within such block multiplied by (ii) the
corresponding Market Price of one share of Equity Stock of such class.
"Beneficial Ownership" shall mean, with respect to any Person,
ownership of shares of Equity Stock equal to the sum of (i) the number
of shares of Equity Stock directly owned by such Person, (ii) the
number of shares of Equity Stock indirectly owned by such Person (if
such Person is an "individual" as defined in Section 542(a)(2) of the
Code) taking into account the constructive ownership rules of Section
544 of the Code, as modified by Section 856(h)(1)(B) of the Code, and
(iii) the number of shares of Equity Stock that such Person is deemed
to beneficially own pursuant to Rule 13d-3 under the Exchange Act or
that is attributed to such Person pursuant to Section 318 of the Code,
as modified by Section 856(d)(5) of the Code, provided that when
applying this definition of Beneficial Ownership to the Initial
Holder, clause (iii) of this definition, and clause (a) (ii) of the
definition of "Person" shall be disregarded. The terms "Beneficial
Owner," "Beneficially Owns" and "Beneficially Owned" shall have the
correlative meanings.
"Board of Directors" shall mean the Board of Directors of the
Corporation or any committee authorized by such Board of Directors to
perform any of its responsibilities with respect to the Class K
Preferred Stock; provided that, for purposes of paragraph (a) of
Section 9 of this Article, the term "Board of Directors" shall not
include any such committee.
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which state or federally chartered banking institutions in New
York, New York are not required to be open.
"Cash Redemption Price" shall mean, with respect to any shares of
Class K Preferred Stock to be redeemed, (i) if the Redemption Date
occurs during the period from and including February 20, 2002, to but
excluding February 18, 2003, 102% of the Liquidation Preference
thereof, and (ii) if the Redemption Date occurs on or after February
18, 2003, 100% of the Liquidation Preference thereof, plus, in the
case of clause (i) or (ii), all accumulated, accrued and unpaid
dividends (whether or not earned or declared), if any, to the
Redemption Date.
2
<PAGE> 193
"Charitable Beneficiary" shall mean one or more beneficiaries of the
Trust as determined pursuant to Section 11.3 of this Article, each of
which shall be an organization described in Section 170(b)(1)(A),
170(c)(2) and 501(c)(3) of the Code.
"Class K Preferred Stock" shall have the meaning set forth in Section
1 of this Article.
"Closing Price" shall mean, when used with respect to a share of any
Equity Stock and for any date, the last sale price, regular way, or,
in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case, as reported
in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the NYSE or, if
the Equity Stock is not listed or admitted to trading on the NYSE, as
reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities
exchange on which the Equity Stock is listed or admitted to trading
or, if the Equity Stock is not listed or admitted to trading on any
national securities exchange, the last quoted price, or if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System or, if such system
is no longer in use, the principal other automated quotation system
that may then be in use or, if the Equity Stock is not quoted by any
such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Equity
Stock selected by the Board of Directors of the Corporation.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, or any successor statute thereto. Reference to any
provision of the Code shall mean such provision as in effect from time
to time, as the same may be amended, and any successor thereto, as
interpreted by any applicable regulations or other administrative
pronouncements as in effect from time to time.
"Common Stock" shall mean the Class A Common Stock, $.01 par value per
share, of the Corporation, and the Class B Common Stock, $.01 par
value per share, of the Corporation and such other shares of the
Corporation's capital stock into which outstanding shares of such
Class A Common Stock or Class B Common Stock shall be reclassified.
"Conversion Price" shall mean the conversion price per share of Class
A Common Stock for which each share of Class K Preferred Stock is
convertible, as such Conversion Price may be adjusted pursuant to
Section 7 of this Article. The initial Conversion Price shall be
$42.00 (equivalent to a
3
<PAGE> 194
conversion rate of 0.59524 shares of Class A Common Stock for each
share of Class K Preferred Stock).
"Dividend Payment Date" shall mean January 15, April 15, July 15 and
October 15 of each year; provided, that if any Dividend Payment Date
falls on any day other than a Business Day, the dividend payment
payable on such Dividend Payment Date shall be paid on the Business
Day immediately following such Dividend Payment Date and no interest
shall accrue on such dividend from such date to such Dividend Payment
Date.
"Dividend Periods" shall mean the Initial Dividend Period and each
subsequent quarterly dividend period commencing on and including
February 18, May 18, August 18 and November 18 of each year and ending
on and including the day preceding the first day of the next
succeeding Dividend Period, other than the Dividend Period during
which any Class K Preferred Stock shall be redeemed pursuant to
Section 5 hereof, which shall end on and include the Redemption Date
with respect to the Class K Preferred Stock being redeemed.
"Equity Stock" shall mean one or more shares of any class of capital
stock of the Corporation.
"Excess Transfer" has the meaning set forth in Section 11.3(A) of this
Article.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Issue Date" shall mean February 18, 1999.
"Initial Dividend Period" shall mean the period commencing on and
including the Issue Date and ending on and including May 17, 1999.
"Initial Holder" shall mean Terry Considine.
"Initial Holder Limit" shall mean a number of the Outstanding shares
of Class K Preferred Stock of the Corporation having an Aggregate
Value not in excess of the excess of (x) 15% of the Aggregate Value of
all Outstanding shares of Equity Stock over (y) the Aggregate Value of
all shares of Equity Stock other than Class K Preferred Stock that are
Beneficially Owned by the Initial Holder. From the Issue Date, the
secretary of the Corporation, or such other person as shall be
designated by the Board of Directors, shall upon request make
available to the representative(s) of the Initial Holder and the Board
of Directors, a schedule that sets forth the then-current Initial
Holder Limit applicable to the Initial Holder.
"Junior Stock" shall have the meaning set forth in paragraph (c) of
Section 8 of this Article.
4
<PAGE> 195
"Liquidation Preference" shall have the meaning set forth in paragraph
(a) of Section 4 of this Article.
"Look-Through Entity" shall mean a Person that is either (i) described
in Section 401(a) of the Code as provided under Section 856(h)(3) of
the Code or (ii) registered under the Investment Company Act of 1940.
"Look-Through Ownership Limit" shall mean, for any Look-Through
Entity, a number of the Outstanding shares of Class K Preferred Stock
of the Corporation having an Aggregate Value not in excess of the
excess of (x) 15% of the Aggregate Value of all Outstanding shares of
Equity Stock over (y) the Aggregate Value of all shares of Equity
Stock other than Class K Preferred Stock that are Beneficially Owned
by the Look-Through Entity.
"Market Price" on any date shall mean, with respect to any share of
Equity Stock, the Closing Price of a share of that class of Equity
Stock on the Trading Day immediately preceding such date.
"NYSE" shall mean the New York Stock Exchange, Inc.
"Operating Partnership" shall mean AIMCO Properties, L.P., a Delaware
limited partnership.
"Outstanding" shall mean issued and outstanding shares of Equity Stock
of the Corporation, provided that for purposes of the application of
the Ownership Limit, the Look-Through Ownership Limit or the Initial
Holder Limit to any Person, the term "Outstanding" shall be deemed to
include the number of shares of Equity Stock that such Person alone,
at that time, could acquire pursuant to any options or convertible
securities.
"Ownership Limit" shall mean, for any Person other than the Initial
Holder or a Look-Through Entity, a number of the Outstanding shares of
Class K Preferred Stock of the Corporation having an Aggregate Value
not in excess of the excess of (x) 8.7% of the Aggregate Value of all
Outstanding shares of Equity Stock over (y) the Aggregate Value of all
shares of Equity Stock other than Class K Preferred Stock that are
Beneficially Owned by the Person.
"Ownership Restrictions" shall mean collectively the Ownership Limit,
as applied to Persons other than the Initial Holder or Look-Through
Entities, the Initial Holder Limit, as applied to the Initial Holder,
and the Look-Through Ownership Limit, as applied to Look-Through
Entities.
"Parity Stock" shall have the meaning set forth in paragraph (b) of
Section 8 of this Article.
5
<PAGE> 196
"Person" shall mean (a) for purposes of Section 11 of this Article,
(i) an individual, corporation, partnership, estate, trust (including
a trust qualifying under Section 401(a) or 501(c) of the Code),
association, "private foundation," within the meaning of Section
509(a) of the Code, joint stock company or other entity, and (ii) a
"group," as that term is used for purposes of Section 13(d)(3) of the
Exchange Act, and (b) for purposes of the remaining Sections of this
Article, any individual, firm, partnership, corporation or other
entity, including any successor (by merger or otherwise) of such
entity.
"Prohibited Transferee" has the meaning set forth in Section 11.3(A)
of this Article.
"Record Date" shall have the meaning set forth in paragraph (a) of
Section 3 of this Article.
"Redemption Market Price" shall mean, with respect to any redemption
of shares of Class K Preferred Stock, the lesser of (i) the average of
the daily Closing Prices of the Class A Common Stock for the 20
consecutive Trading Days immediately preceding the first Business Day
immediately preceding the date of the applicable redemption notice and
(ii) the Closing Price of the Class A Common Stock on the Trading Day
immediately preceding the first Business Day immediately preceding the
date of the applicable redemption notice.
"Redemption Date" shall mean, in the case of any redemption of any
shares of Class K Preferred Stock, the date fixed for redemption of
such shares.
"REIT" shall mean a "real estate investment trust," as defined in
Section 856 of the Code.
"Senior Stock" shall have the meaning set forth in paragraph (a) of
Section 8 of this Article.
"set apart for payment" shall be deemed to include, without any action
other than the following, the recording by the Corporation in its
accounting ledgers of any accounting or bookkeeping entry which
indicates, pursuant to a declaration of dividends or other
distribution by the Board of Directors, the allocation of funds to be
so paid on any series or class of capital stock of the Corporation;
provided, however, that if any funds for any class or series of Junior
Stock or any class or series of Parity Stock are placed in a separate
account of the Corporation or delivered to a disbursing, paying or
other similar agent, then "set apart for payment" with respect to the
Class K Preferred Stock shall mean placing such funds in a separate
account or delivering such funds to a disbursing, paying or other
similar agent.
6
<PAGE> 197
"Trading Day" shall mean, when used with respect to any Equity Stock,
(i) if the Equity Stock is listed or admitted to trading on the NYSE,
a day on which the NYSE is open for the transaction of business, (ii)
if the Equity Stock is not listed or admitted to trading on the NYSE
but is listed or admitted to trading on another national securities
exchange or automated quotation system, a day on which the principal
national securities exchange or automated quotation system, as the
case may be, on which the Equity Stock is listed or admitted to
trading is open for the transaction of business, or (iii) if the
Equity Stock is not listed or admitted to trading on any national
securities exchange or automated quotation system, any day other than
a Saturday, a Sunday or a day on which banking institutions in the
State of New York are authorized or obligated by law or executive
order to close.
"Transfer" shall mean any sale, transfer, gift, assignment, devise or
other disposition of a share of Class K Preferred Stock (including (i)
the granting of an option or any series of such options or entering
into any agreement for the sale, transfer or other disposition of
Class K Preferred Stock or (ii) the sale, transfer, assignment or
other disposition of any securities or rights convertible into or
exchangeable for Class K Preferred Stock), whether voluntary or
involuntary, whether of record or Beneficial Ownership, and whether by
operation of law or otherwise (including, but not limited to, any
transfer of an interest in other entities that results in a change in
the Beneficial Ownership of shares of Class K Preferred Stock). The
term "Transfers" and "Transferred" shall have correlative meanings.
"Transfer Agent" means such transfer agent as may be designated by the
Board of Directors or their designee as the transfer agent for the
Class K Preferred Stock; provided, that if the Corporation has not
designated a transfer agent then the Corporation shall act as the
transfer agent for the Class K Preferred Stock.
"Trust" shall mean the trust created pursuant to Section 11.3 of this
Article.
"Trustee" shall mean the Person unaffiliated with either the
Corporation or the Prohibited Transferee that is appointed by the
Corporation to serve as trustee of the Trust.
"Voting Preferred Stock" shall have the meaning set forth in Section 9
of this Article.
3. DIVIDENDS.
(a) The holders of Class K Preferred Stock shall be entitled
to receive, when and as declared by the Board of Directors, out of funds
legally available for that purpose, quarterly cash dividends on the Class K
Preferred Stock in an amount per share equal to (i) during the period from the
Issue Date through and including
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February 17, 2002, the greater of $0.50 or the quarterly cash dividend paid or
payable (determined on each Dividend Payment Date) on the number of shares of
Class A Common Stock (or portion thereof) into which a share of Class K
Preferred Stock is convertible, and (ii) during the period from and after
February 18, 2002, the greater of $0.625 or the quarterly cash dividend paid or
payable (determined on each Dividend Payment Date) on the number of shares of
Class A Common Stock (or portion thereof) into which a share of Class K
Preferred Stock is convertible. Such dividends shall be cumulative from the
Issue Date, whether or not in any Dividend Period or Periods such dividends
shall be declared or there shall be funds of the Corporation legally available
for the payment of such dividends, and shall be payable quarterly in arrears on
each Dividend Payment Date, commencing on May 18, 1999. Each such dividend
shall be payable in arrears to the holders of record of the Class K Preferred
Stock, as they appear on the stock records of the Corporation at the close of
business on the February 1, May 1, August 1 or November 1 (each a "Record
Date"), as the case may be, immediately preceding such Dividend Payment Date.
Accumulated, accrued and unpaid dividends for any past Dividend Periods may be
declared and paid at any time, without reference to any regular Dividend
Payment Date, to holders of record on such date, which date shall not precede
by more than 45 days the payment date thereof, as may be fixed by the Board of
Directors.
(b) Any dividend payable on the Class K Preferred Stock for
any partial dividend period shall be computed ratably on the basis of twelve
30-day months and a 360-day year. Holders of Class K Preferred Stock shall not
be entitled to any dividends, whether payable in cash, property or stock, in
excess of full cumulative dividends, as herein provided, on the Class K
Preferred Stock. No interest, or sum of money in lieu of interest, shall be
payable in respect of any dividend payment or payments on the Class K Preferred
Stock that may be in arrears.
(c) So long as any of the shares of Class K Preferred Stock
are outstanding, except as described in the immediately following sentence, no
dividends shall be declared or paid or set apart for payment by the Corporation
and no other distribution of cash or other property shall be declared or made,
directly or indirectly, by the Corporation with respect to any shares of Parity
Stock unless, in each case, dividends equal to the full amount of accumulated,
accrued and unpaid dividends on all outstanding shares of Class K Preferred
Stock 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 payment of such dividends on the Class K Preferred Stock for all
Dividend Periods ending on or prior to the date such dividend or distribution
is declared, paid, set apart for payment or made, as the case may be, with
respect to such shares of Parity Stock. When dividends are not paid in full or
a sum sufficient for such payment is not set apart, as aforesaid, all dividends
declared upon the Class K Preferred Stock and all dividends declared upon any
shares of Parity Stock shall be declared ratably in proportion to the
respective amounts of dividends accumulated, accrued and unpaid on the Class K
Preferred Stock and accumulated, accrued and unpaid on such Parity Stock.
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(d) So long as any of the shares of Class K Preferred Stock
are outstanding, no dividends (other than dividends or distributions paid in
shares of, or options, warrants or rights to subscribe for or purchase shares
of, Junior Stock) shall be declared or paid or set apart for payment by the
Corporation and no other distribution of cash or other property shall be
declared or made, directly or indirectly, by the Corporation with respect to
any shares of Junior Stock, nor shall any shares of Junior Stock be redeemed,
purchased or otherwise acquired (other than a redemption, purchase or other
acquisition of Common Stock made for purposes of an employee incentive or
benefit plan of the Corporation or any subsidiary) for any consideration (or
any moneys be paid to or made available for a sinking fund for the redemption
of any shares of any such stock), directly or indirectly, by the Corporation
(except by conversion into or exchange for shares of, or options, warrants or
rights to subscribe for or purchase shares of, Junior Stock), nor shall any
other cash or other property otherwise be paid or distributed to or for the
benefit of any holder of shares of Junior Stock in respect thereof, directly or
indirectly, by the Corporation unless, in each case, dividends equal to the
full amount of all accumulated, accrued and unpaid dividends on all outstanding
shares of Class K Preferred Stock have been declared and paid, or such
dividends have been declared and a sum sufficient for the payment thereof has
been set apart for such payment, on all outstanding shares of Class K Preferred
Stock for all Dividend Periods ending on or prior to the date such dividend or
distribution is declared, paid, set apart for payment or made with respect to
such shares of Junior Stock, or the date such shares of Junior Stock are
redeemed, purchased or otherwise acquired or monies paid to or made available
for any sinking fund for such redemption, or the date any such cash or other
property is paid or distributed to or for the benefit of any holders of Junior
Stock in respect thereof, as the case may be.
Notwithstanding the provisions of this Section 3, the
Corporation shall not be prohibited from (i) declaring or paying or setting
apart for payment any dividend or distribution on any shares of Parity Stock or
(ii) redeeming, purchasing or otherwise acquiring any Parity Stock, in each
case, if such declaration, payment, redemption, purchase or other acquisition
is necessary in order to maintain the continued qualification of the
Corporation as a REIT under Section 856 of the Code.
4. LIQUIDATION PREFERENCE.
(a) In the event of any liquidation, dissolution or winding
up of the Corporation, whether voluntary or involuntary, before any payment or
distribution by the Corporation (whether of capital, surplus or otherwise)
shall be made to or set apart for the holders of Junior Stock, the holders of
shares of Class K Preferred Stock shall be entitled to receive Twenty-Five
Dollars ($25) per share of Class K Preferred Stock (the "Liquidation
Preference"), plus an amount equal to all dividends (whether or not earned or
declared) accumulated, accrued and unpaid thereon to the date of final
distribution to such holders; but such holders shall not be entitled to any
further payment. Until the holders of the Class K Preferred Stock have been
paid the Liquidation Preference in full, plus an amount equal to all dividends
(whether or not
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earned or declared) accumulated, accrued and unpaid thereon to the date of
final distribution to such holders, no payment will be made to any holder of
Junior Stock upon the liquidation, dissolution or winding up of the
Corporation. If, upon any liquidation, dissolution or winding up of the
Corporation, the assets of the Corporation, or proceeds thereof, distributable
among the holders of Class K Preferred Stock shall be insufficient to pay in
full the preferential amount aforesaid and liquidating payments on any other
shares of any class or series of Parity Stock, then such assets, or the
proceeds thereof, shall be distributed among the holders of Class K Preferred
Stock and any such other Parity Stock ratably in the same proportion as the
respective amounts that would be payable on such Class K Preferred Stock and
any such other Parity Stock if all amounts payable thereon were paid in full.
For the purposes of this Section 4, (i) a consolidation or merger of the
Corporation with one or more corporations, (ii) a sale or transfer of all or
substantially all of the Corporation's assets, or (iii) a statutory share
exchange shall not be deemed to be a liquidation, dissolution or winding up,
voluntary or involuntary, of the Corporation.
(b) Upon any liquidation, dissolution or winding up of the
Corporation, after payment shall have been made in full to the holders of Class
K Preferred Stock and any Parity Stock, as provided in Section 4(a), any other
series or class or classes of Junior Stock shall, subject to the respective
terms thereof, be entitled to receive any and all assets remaining to be paid
or distributed, and the holders of the Class K Preferred Stock and any Parity
Stock shall not be entitled to share therein.
5. REDEMPTION AT THE OPTION OF THE CORPORATION.
(a) Shares of Class K Preferred Stock shall not be redeemable
by the Corporation prior to February 20, 2002, except as set forth in Section
11.2 of this Article. During the period beginning on February 20, 2002, the
Corporation, at its option, may redeem shares of Class K Preferred Stock, in
whole or from time to time in part, at a redemption price payable in cash equal
to the Cash Redemption Price applicable thereto. On and after February 20,
2002, the Corporation, at its option, may redeem shares of Class K Preferred
Stock, in whole or from time to time in part, in exchange for a number of
shares of Class A Common Stock equal to (i) 105% of the applicable Cash
Redemption Price, divided by (ii) the Redemption Market Price applicable to
such redemption. In lieu of any fractional shares of Class A Common Stock which
would otherwise be issuable upon any redemption of Class K Preferred Stock, the
Corporation shall pay a cash adjustment in respect of such fractional interest
in an amount in cash (computed to the nearest cent) equal to the applicable
Redemption Market Price multiplied by the fractional interest (computed to the
nearest 1/100th of a percent) that otherwise would have been deliverable upon
such redemption of Class K Preferred Stock. In the event of a redemption of
shares of Class K Preferred Stock, if the Redemption Date occurs after a
dividend record date and on or prior to the related Dividend Payment Date, the
dividend payable on such Dividend Payment Date in respect of such shares called
for redemption shall be payable on such Dividend Payment Date to the holders of
record at the close of business on such dividend record
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date notwithstanding the redemption of such shares, and shall not be payable as
part of the redemption price for such shares. In connection with any redemption
for cash pursuant to this Section 5(a), the redemption price of the Class K
Preferred Stock (other than any portion thereof consisting of accumulated,
accrued and unpaid dividends) shall be payable solely with the proceeds from
the sale by the Corporation or the Operating Partnership of other capital
shares of the Corporation or the Operating Partnership (whether or not such
sale occurs concurrently with such redemption). For purposes of the preceding
sentence, "capital shares" means any common stock, preferred stock, depositary
shares, partnership or other interests, participations or other ownership
interests (however designated) and any rights (other than debt securities
convertible into or exchangeable at the option of the holder for equity
securities (unless and to the extent such debt securities are subsequently
converted into capital shares)) or options to purchase any of the foregoing of
or in the Corporation or the Operating Partnership.
(b) The Redemption Date shall be selected by the Corporation,
shall be specified in the notice of redemption and shall be not less than 30
days nor more than 60 days after the date notice of redemption is sent by the
Corporation.
(c) If full cumulative dividends on all outstanding shares of
Class K Preferred Stock have not been declared and paid, or declared and set
apart for payment, no shares of Class K Preferred Stock may be redeemed unless
all outstanding shares of Class K Preferred Stock are simultaneously redeemed,
and neither the Corporation nor any affiliate of the Corporation may purchase
or acquire shares of Class K Preferred Stock, otherwise than pursuant to a
purchase or exchange offer made on the same terms to all holders of shares of
Class K Preferred Stock.
(d) If the Corporation shall redeem shares of Class K
Preferred Stock pursuant to paragraph (a) of this Section 5, notice of such
redemption shall be given to each holder of record of the shares to be
redeemed. Such notice shall be provided by first class mail, postage prepaid,
at such holder's address as the same appears on the stock records of the
Corporation. Neither the failure to mail any notice required by this paragraph
(d), nor any defect therein or in the mailing thereof to any particular holder,
shall affect the sufficiency of the notice or the validity of the proceedings
for redemption with respect to the other holders. Any notice which has been
mailed in the manner herein provided shall be conclusively presumed to have
been duly given on the date mailed whether or not the holder receives the
notice. Each such notice shall state, as appropriate: (i) the Redemption Date;
(ii) the number of shares of Class K Preferred Stock to be redeemed and, if
fewer than all such shares held by such holder are to be redeemed, the number
of such shares to be redeemed from such holder; (iii) the place or places at
which certificates for such shares are to be surrendered for cash or shares of
Class A Common Stock; and (iv) the redemption price payable on such Redemption
Date (whether in cash or shares of Class A Common Stock), including, without
limitation, a statement as to whether or not accumulated, accrued and unpaid
dividends will be payable as part of the redemption price, or payable on the
next Dividend
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Payment Date to the record holder at the close of business on the relevant
record date as described in the next succeeding sentence. Notice having been
mailed as aforesaid, from and after the Redemption Date (unless the Corporation
shall fail to make available the amount of cash necessary to effect such
redemption), (i) dividends on the shares of Class K Preferred Stock so called
for redemption shall cease to accumulate or accrue on the shares of Class K
Preferred Stock called for redemption, (ii) said shares shall no longer be
deemed to be outstanding, and (iii) all rights of the holders thereof as
holders of Class K Preferred Stock of the Corporation shall cease except the
right to receive the cash payable, or shares of Class A Common Stock issuable,
upon such redemption, without interest thereon, upon surrender of their
certificates if so required; provided, however, that if the Redemption Date for
any shares of Class K Preferred Stock occurs after any dividend record date and
on or prior to the related Dividend Payment Date, the full dividend payable on
such Dividend Payment Date in respect of such shares of Class K Preferred Stock
called for redemption shall be payable on such Dividend Payment Date to the
holders of record of such shares at the close of business on the corresponding
dividend record date notwithstanding the prior redemption of such shares. At
the close of business on the Redemption Date, without any further action, each
holder of shares of Class K Preferred Stock redeemed for shares of Class A
Common Stock shall be deemed a holder of the number of shares of Class A Common
Stock for which such Class K Convertible Preferred Stock has been redeemed
(unless the Corporation defaults on its obligation to deliver shares of Class A
Common Stock or cash). The Corporation's obligation to make available the cash
necessary to effect such redemption in accordance with the preceding sentence
shall be deemed fulfilled if, on or before the applicable Redemption Date, the
Corporation shall irrevocably deposit in trust with a bank or trust company
(which may not be an affiliate of the Corporation) that has, or is an
affiliate of a bank or trust company that has, a capital and surplus of at
least $50,000,000, such amount of cash as is necessary for such redemption
plus, if such Redemption Date occurs after any dividend record date and on or
prior to the related Dividend Payment Date, such amount of cash as is necessary
to pay the dividend payable on such Dividend Payment Date in respect of such
shares of Class K Preferred Stock called for redemption, with irrevocable
instructions that such cash be applied to the redemption of the shares of Class
K Preferred Stock so called for redemption and, if applicable, the payment of
such dividend. No interest shall accrue for the benefit of the holders of
shares of Class K Preferred Stock to be redeemed on any cash so set aside by
the Corporation. Subject to applicable escheat laws, any such cash unclaimed at
the end of two years from the Redemption Date shall revert to the general funds
of the Corporation, after which reversion the holders of shares of Class K
Preferred Stock so called for redemption shall look only to the general funds
of the Corporation for the payment of such cash.
As promptly as practicable after the surrender in accordance with such
notice of the certificates for any such shares of Class K Preferred Stock to be
so redeemed (properly endorsed or assigned for transfer, if the Corporation
shall so require and the notice shall so state), such certificates shall be
exchanged for cash (without interest thereon) or shares of Class A Common Stock
for which such shares have been
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redeemed in accordance with such notice. If fewer than all the outstanding
shares of Class K Preferred Stock are to be redeemed, shares to be redeemed
shall be selected by the Corporation from outstanding shares of Class K
Preferred Stock not previously called for redemption by lot or, with respect to
the number of shares of Class K Preferred Stock held of record by each holder
of such shares, pro rata (as nearly as may be) or by any other method as may be
determined by the Board of Directors in its discretion to be equitable. If
fewer than all the shares of Class K Preferred Stock represented by any
certificate are redeemed, then a new certificate representing the unredeemed
shares shall be issued without cost to the holders thereof.
(e) All shares of Class A Common Stock that may be issued
upon redemption of shares of Class K Preferred Stock shall be duly and validly
issued and fully paid and non-assessable, and prior to giving any notice of
redemption the Corporation shall take any corporate action necessary therefor.
6. STATUS OF REACQUIRED STOCK.
All shares of Class K Preferred Stock that have been issued and
reacquired in any manner by the Corporation (including, without limitation,
shares of Class K Preferred Stock which have been surrendered for conversion)
shall be returned to the status of authorized but unissued shares of Class K
Preferred Stock.
7. CONVERSION.
7.1 CONVERSION AT HOLDERS' OPTION.
At any time on or after the Issue Date, holders of shares of Class K
Preferred Stock shall have the right to convert all or a portion of such shares
into shares of Class A Common Stock, as follows:
(a) Subject to and upon compliance with the provisions of
this Section 7, each share of Class K Preferred Stock shall, at the option of
the holder thereof, be convertible at any time (unless such share is called for
redemption, then to and including but not after the close of business on the
date immediately prior to the Redemption Date, unless the Corporation shall
default in payment due upon redemption thereof), into that number of fully paid
and non-assessable shares of Class A Common Stock (calculated as to each
conversion to the nearest 1/100th of a share) obtained by dividing $25 by the
Conversion Price in effect at such time and by surrender of the certificate
representing such shares to be converted in the manner provided in subsection
(b) of this Section 7.1.
(b) In order to convert shares of Class K Preferred Stock,
the holder of the shares to be converted shall surrender the certificate
representing such shares at any office or agency maintained by the Corporation
for such purpose, accompanied by
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the funds, if any, required by the last paragraph of this subsection (b), and
shall give written notice of conversion in the form provided on such
certificate representing shares of Class K Preferred Stock (or such other
notice as is acceptable to the Corporation) to the Corporation at such office
or agency that the holder elects to convert the shares of Class K Preferred
Stock specified in such notice. Such notice shall also state the name or names,
together with address or addresses, in which the certificate or certificates
for shares of Class A Common Stock which shall be issuable in such conversion
shall be issued. Unless the shares issuable on conversion are to be issued in
the same name as the name in which such share of Class K Preferred Stock is
registered, each certificate representing a share of Class K Preferred Stock
surrendered for conversion shall be accompanied by instruments of transfer, in
form satisfactory to the Corporation, duly executed by the holder or such
holder's duly authorized attorney and an amount sufficient to pay any transfer
or similar tax.
As promptly as practicable after the surrender of
certificates representing such shares of Class K Preferred Stock and the
receipt of such notice, instruments of transfer and funds, if any, as
aforesaid, the Corporation shall issue and shall deliver at such office or
agency to such holder, or as designated in such holder's written instructions,
a certificate or certificates for the number of full shares of Class A Common
Stock issuable upon the conversion of such share or shares of Class K Preferred
Stock in accordance with provisions of this Section 7, and a check or cash in
respect of any fractional interest in a share of Class A Common Stock arising
upon such conversion, as provided in paragraph (c) of this Section 7.1.
Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which certificates
representing such shares of Class K Preferred Stock shall have been surrendered
and such notice (and any applicable instruments of transfer and any required
taxes) received by the Corporation as aforesaid, and the Person or Persons in
whose name or names any certificate or certificates for shares of Class A
Common Stock shall be issuable upon such conversion shall be deemed to have
become the holder or holders of record of the shares represented thereby at
such time on such date, and such conversion shall be at the Conversion Price in
effect at such time on such date, unless the stock transfer books of the
Corporation shall be closed on that date, in which event such Person or Persons
shall be deemed to have become such holder or holders of record at the close of
business on the next succeeding day on which such stock transfer books are
open, but such conversion shall be at the Conversion Price in effect on the
date on which such shares shall have been surrendered and such notice received
by the Corporation.
Holders of Class K Preferred Stock at the close of business
on a Record Date will be entitled to receive an amount equal to the dividend
payable on such shares on the corresponding Dividend Payment Date
notwithstanding the conversion of such shares following such Record Date and
prior to such Dividend Payment Date; provided, however, that Class K Preferred
Stock surrendered for conversion during the period between the close of
business on any Record Date and the opening of business
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on the corresponding Dividend Payment Date (except shares converted after the
issuance of a notice of redemption with respect to a Redemption Date during
such period or coinciding with such Dividend Payment Date, which will be
entitled to such dividend) must be accompanied by payment of an amount equal to
the dividend payable on such shares on such Dividend Payment Date. A holder of
Class K Preferred Stock on a Record Date who (or whose transferee) tenders any
such shares for conversion into shares of Class A Common Stock on such Dividend
Payment Date will receive the dividend payable by the Corporation on such
shares of Class K Preferred Stock on such date, and the converting holder need
not include payment of the amount of such dividend upon surrender of Class K
Preferred Stock for conversion. Except as provided herein, the Corporation will
make no payment or allowance for unpaid dividends, whether or not in arrears,
on converted shares or for dividends on the Class A Common Stock issued upon
such conversion.
(c) No fractional shares of Class A Common Stock or scrip
representing fractions of a share of Class A Common Stock shall be issued upon
conversion of shares of Class K Preferred Stock. If more than one share of
Class K Preferred Stock shall be surrendered for conversion at one time by the
same holder, the number of full shares of Class A Common Stock issuable upon
conversion thereof shall be computed on the basis of the aggregate number of
shares of Class K Preferred Stock so surrendered. In lieu of any fractional
interest in a share of Class A Common Stock that would otherwise be deliverable
upon the conversion of any share of Class K Preferred Stock, the Corporation
shall pay to the holder of such shares an amount in cash (computed to the
nearest cent) equal to the Closing Price of the Class A Common Stock on the
Trading Day immediately preceding the date of conversion, multiplied by the
fractional interest that otherwise would have been deliverable upon conversion
of such share.
7.2 ADJUSTMENTS TO CONVERSION PRICE
(a) The Conversion Price shall be adjusted from time to
time as follows:
(i) If the Corporation shall after the Issue Date
(A) pay a dividend or make a distribution on its Class A Common Stock in shares
of Class A Common Stock, (B) subdivide its outstanding shares of Class A Common
Stock into a greater number of shares, (C) combine its outstanding shares of
Class A Common Stock into a smaller number of shares or (D) issue any shares of
capital stock by reclassification of its outstanding Class A Common Stock,
then, in each such case, the Conversion Price in effect immediately prior to
such action shall be adjusted so that the holder of any share of Class K
Preferred Stock thereafter surrendered for conversion shall be entitled to
receive the number of shares of Class A Common Stock or other capital stock of
the Corporation which such holder would have owned or been entitled to receive
immediately following such action had such share been converted immediately
prior to the occurrence of such event. An adjustment made pursuant to
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this subsection (i) of this Section 7.2(a) shall become effective immediately
after the record date, in the case of a dividend or distribution, or
immediately after the effective date, in the case of a subdivision, combination
or reclassification. If, as a result of an adjustment made pursuant to this
subsection (i), the holder of any share of Class K Preferred Stock thereafter
surrendered for conversion shall become entitled to receive shares of two or
more classes of capital stock or shares of Class A Common Stock and other
capital stock of the Corporation, the Board of Directors (whose determination
shall be conclusive and shall be described in a statement filed by the
Corporation with the Transfer Agent) shall determine the allocation of the
adjusted Conversion Price between or among shares of such classes of capital
stock or shares of Class A Common Stock and other capital stock.
(ii) If the Corporation shall, after the Issue Date,
issue rights, options or warrants to all holders of its outstanding shares of
Class A Common Stock entitling them (for a period expiring within 45 days after
the record date described below) to subscribe for or purchase shares of Class A
Common Stock at a price per share less than the current market price per share
(determined pursuant to subsection (iv) of this Section 7.2(a)) of the Class A
Common Stock (other than pursuant to any stock option, restricted stock or
other incentive or benefit plan or stock ownership or purchase plan for the
benefit of employees, directors or officers or any dividend reinvestment plan
of the Corporation in effect at the time hereof or any other similar plan
adopted or implemented hereafter), then the Conversion Price in effect
immediately prior thereto shall be adjusted so that it shall equal the price
determined by multiplying the Conversion Price in effect immediately prior to
the record date by a fraction, the numerator of which shall be the sum of (A)
the number of shares of Class A Common Stock outstanding on the record date and
(B) the number of shares which the aggregate proceeds to the Corporation from
the exercise of such rights, options or warrants for Class A Common Stock would
purchase at such current market price, and the denominator of which shall be
the sum of (A) the number of shares of Class A Common Stock outstanding on the
record date and (B) the number of additional shares of Class A Common Stock
offered for subscription or purchase pursuant to such rights, options or
warrants. Such adjustment shall be made successively whenever any rights,
options or warrants are issued, and shall become effective immediately after
the record date for the determination of stockholders entitled to receive such
rights, options or warrants; provided, however, that if all of the shares of
Class A Common Stock offered for subscription or purchase are not delivered
upon the exercise of such rights, options or warrants, upon the expiration of
such rights, options or warrants, the Conversion Price shall be readjusted to
the Conversion Price which would have been in effect had the numerator and the
denominator of the foregoing fraction and the resulting adjustment been made
based upon the number of shares of Class A Common Stock actually delivered upon
the exercise of such rights, options or warrants rather than upon the number of
shares of Class A Common Stock offered for subscription or purchase. In
determining whether any rights, options or warrants entitle the holders to
subscribe for or purchase shares of Class A Common Stock at less than such
current market price, and in determining
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the aggregate offering price of such shares of Class A Common Stock, there
shall be taken into account any consideration received by the Corporation for
such rights, options or warrants, with the value of such consideration, if
other than cash, determined by the Board of Directors (whose determination
shall be conclusive and shall be described in a statement filed by the
Corporation with the Transfer Agent).
(iii) In case the Corporation shall, by dividend or
otherwise, distribute to all holders of its outstanding Class A Common Stock
any capital stock (other than Class A Common Stock), evidences of its
indebtedness or assets or rights or warrants to subscribe for or purchase
securities of the Corporation (excluding (A) those referred to in subsections
(i) and (ii) of this Section 7.2(a), (B) dividends and distributions paid in
cash out of the retained earnings of the Corporation, and (C) distributions
upon mergers or consolidations to which subsection (b) of this Section 7.2
applies), then, in each such case, the Conversion Price shall be adjusted to
equal the price determined by multiplying the Conversion Price in effect
immediately prior to the record date of such distribution by a fraction, the
numerator of which shall be the current market price per share (determined
pursuant to subsection (iv) of this Section 7.2(a)) of the Class A Common
Stock, less the fair market value on such record date (determined by the Board
or Directors, whose determination shall be conclusive and shall be described in
a statement filed by the Corporation with the Transfer Agent) of the portion of
the capital stock or assets or the evidences of indebtedness or assets so
distributed to the holder of one share of Class A Common Stock or of such
subscription rights or warrants applicable to one share of Class A Common
Stock, and the denominator of which shall be such current market price per
share of Class A Common Stock. Such adjustment shall become effective
immediately after the record date for the determination of stockholders
entitled to receive such distribution.
(iv) For the purpose of any computation under
subsections (ii) and (iii) of this Section 7.2(a), the current market price per
share of Class A Common Stock on any date shall be the average of the Closing
Price of the Class A Common Stock for the shorter of (A) 20 consecutive Trading
Days ending on the last full Trading Day prior to the Time of Determination or
(B) the period commencing on the date next succeeding the first public
announcement of the issuance of such rights or warrants or such distribution
through such last full Trading Day prior to the Time of Determination. For
purposes of the foregoing, the term "Time of Determination" shall mean the time
and date of the earlier of (A) the record date for determining stockholders
entitled to receive the rights, warrants or distribution referred to in
subsections (ii) and (iii) of this Section 7.2, or (B) the commencement of
"ex-dividend" trading on the exchange or market referred to in the definition
of "Closing Price."
(v) No adjustment in the Conversion Price shall
be required to be made unless such adjustment would require an increase or
decrease of at least one percent of such price; provided, however, that any
adjustment which by reason of this subsection (v) is not required to be made
shall be carried forward and taken into
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account in any subsequent adjustment. All calculations under this Section 7.2
shall be made to the nearest cent or to the nearest 1/100th of a share, as the
case may be. Anything in this Section 7.2 to the contrary notwithstanding, the
Corporation shall be entitled to make such reduction in the Conversion Price,
in addition to those required by this Section 7.2, as it shall determine in its
discretion to be advisable in order that any stock dividend, subdivision of
shares, distribution of rights to purchase stock or securities, or distribution
of securities convertible into or exchangeable for stock hereafter made by the
Corporation to its stockholders shall not be taxable to the recipients. Except
as set forth in subsections (i), (ii) and (iii) above, the Conversion Price
shall not be adjusted for the issuance of Class A Common Stock, or any
securities convertible into or exchangeable for Class A Common Stock or
carrying the right to purchase any of the foregoing, in exchange for cash,
property or services.
(vi) The Corporation from time to time may decrease the
Conversion Price by any amount for any period of time if the period is at least
20 days and if the decrease is irrevocable during the period. Whenever the
Conversion Price is so decreased, the Corporation shall mail to holders of
record of shares of Class K Preferred Stock a notice of the decrease at least
15 days before the date the decreased Conversion Price takes effect, and such
notice shall state the decreased Conversion Price and the period it will be in
effect.
(b) Notwithstanding any other provision herein to the
contrary, in case of any merger or consolidation to which the Corporation is a
party (other than a merger or consolidation in which the Corporation is the
continuing entity and in which the Class A Common Stock outstanding immediately
prior to the merger or consolidation is not exchanged for cash, or the
securities or other property of another entity), or in the case of any sale or
transfer of all or substantially all of the Corporation's property and assets
to another entity, there will be no adjustment of the Conversion Price, and
lawful provision shall be made by the entity formed by such consolidation or
the entity whose securities, cash or other property will immediately after the
merger or consolidation be owned, by virtue of the merger or consolidation, by
the holders of Class A Common Stock immediately prior to the merger or
consolidation, or the entity which shall have acquired such assets of the
Corporation, such that each share of Class K Preferred Stock then outstanding
will, without the consent of the holder thereof, become convertible into the
kind and amount of securities, cash or other property receivable upon such
merger, consolidation, sale or transfer by a holder of the number of shares of
Class A Common Stock into which such share of Class K Preferred Stock was
convertible immediately prior to such merger, consolidation, sale or transfer
assuming such holder of Class A Common Stock did not exercise his rights of
election, if any, as to the kind or amount of securities, cash or other
property receivable upon such merger, consolidation, sale or transfer. In the
case of a cash merger of the Corporation into another entity or any other cash
transaction of the type mentioned in this Section 7.2(b), each share of Class K
Preferred Stock will thereafter be convertible at the Conversion Price in
effect at such time into the same amount of cash per share into which each
share of Class K Preferred Stock would have been convertible had
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such share been converted into Class A Common Stock immediately prior to the
effective date of such cash merger or other transaction. The foregoing
provisions of this Section 7.2(b) shall similarly apply to successive mergers,
consolidations, sales or transfers.
(c) If (i) the Corporation shall take any action that would
require an adjustment in the Conversion Price pursuant to Section 7.2; (ii) the
Corporation shall authorize the granting to the holders of the Class A Common
Stock generally of rights or warrants to subscribe for or purchase any shares
of stock of any class or series or of any other rights or warrants; (iii) there
shall be any reorganization or reclassification of the Class A Common Stock
(other than an event to which subsection (i) of Section 7.2(a) applies) or any
consolidation or merger to which the Corporation is a party or any sale or
transfer of all or substantially all of the assets of the Corporation, in each
case, for which approval of any stockholders of the Corporation is required; or
(iv) there shall be a voluntary or involuntary liquidation, dissolution or
winding up of the Corporation; then, in each such case, the Corporation shall
cause to be given to the holders of shares of Class K Preferred Stock and the
Transfer Agent as promptly as possible, but in any event at least 15 days prior
to the applicable date hereinafter specified, a notice stating (i) the date on
which a record is to be taken for the purpose of such action or granting of
rights or warrants, or, if a record is not to be taken, the date as of which
the holders of Class A Common Stock of record to be entitled to such dividend,
distribution, rights or warrants are to be determined, or (ii) the date on
which such reorganization, reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution or winding up is expected to become
effective or occur, and the date as of which it is expected that holders of
Class A Common Stock of record shall be entitled to exchange their shares of
Class A Common Stock for securities, cash or other property deliverable upon
such reorganization, reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution or winding up. Failure to give such notice or any
defect therein shall not affect the legality or validity of the proceedings
described in this Section 7.2(c).
(d) Whenever the Conversion Price is adjusted as herein
provided, (i) the Corporation shall promptly file with the Transfer Agent a
certificate setting forth the Conversion Price after such adjustment and a
brief statement of the facts requiring such adjustment and the manner of
computing the same, which certificate shall be conclusive evidence of the
correctness of such adjustment, and (ii) the Corporation shall mail or cause to
be mailed by first class mail, postage prepaid, as soon as practicable to each
holder of record of shares of Class K Preferred Stock a notice stating that the
Conversion Price has been adjusted and setting forth the adjusted Conversion
Price.
(e) In any case in which paragraph (a) of this Section 7.2
shall require that an adjustment be made immediately following a record date or
an effective date, the Corporation may elect to defer (but only until the
filing by the Corporation with the Transfer Agent of the certificate required
by subsection 7.2(d)) (i) issuing to
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the holder of any share of Class K Preferred Stock converted after such record
date or effective date the shares of Class A Common Stock issuable upon such
conversion in excess of the shares of Class A Common Stock issuable upon such
conversion on the basis of the Conversion Price prior to adjustment, and (ii)
paying to such holder any amount of cash in lieu of a fractional share.
(f) In the event that at any time, as a result of an
adjustment made pursuant to subsection (i) of Section 7.2(a), the holder of any
share of Class K Preferred Stock thereafter surrendered for conversion shall
become entitled to receive any shares of the Corporation other than shares of
Class A Common Stock, thereafter the Conversion Price of such other shares so
receivable upon conversion of any share of Class K Preferred Stock shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to Class A Common
Stock contained in this Section 7.2.
(g) The Corporation shall at all times reserve and keep
available, free from preemptive rights, out of the aggregate of its authorized
but unissued shares of Class A Common Stock, for the purpose of effecting
conversion of shares of Class K Preferred Stock, the full number of shares of
Class A Common Stock deliverable upon the conversion of all outstanding shares
of Class K Preferred Stock not theretofore converted and on or before (and as a
condition of) taking any action that would cause an adjustment of the
Conversion Price resulting in an increase in the number of shares of Class A
Common Stock deliverable upon conversion in excess of the number thereof
previously reserved and available therefor, the Corporation shall take all such
action so required. For purposes of this paragraph (g), the number of shares of
Class A Common Stock which shall be deliverable upon the conversion of all
outstanding shares of Class K Preferred Stock shall be computed as if at the
time of computation all such outstanding shares of Class K Preferred Stock were
held by a single holder (and without regard to the Ownership Limit).
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value (if any) of the shares of Class A
Common Stock deliverable upon conversion of the shares of Class K Preferred
Stock, the Corporation shall take any corporate action which may, in the
opinion of its counsel, be necessary in order that the Corporation may validly
and legally issue fully paid and non-assessable shares of Class A Common Stock
at such adjusted Conversion Price.
(h) The Corporation will pay any and all documentary stamp,
issue or transfer taxes, and any other similar taxes, payable in respect of the
issue or delivery of shares of Class A Common Stock upon conversion of shares
of Class K Preferred Stock pursuant hereto; provided, however, that the
Corporation shall not be required to pay any tax that may be payable in respect
of any transfer involved in the issue or delivery of shares of Class A Common
Stock in a name other than that of the holder of the shares of Class K
Preferred Stock to be converted, and no such issue or delivery shall be made
unless and until the Person requesting such issue or delivery has paid to the
Corporation the amount of any such tax or established, to the reasonable
satisfaction of the Corporation, that such tax has been paid.
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(i) Notwithstanding anything to the contrary contained in
this Section 7, conversion of Class K Preferred Stock pursuant to this Section
7 shall be permitted only to the extent that such conversion would not result
in a violation of the Ownership Restrictions (as defined in the Charter).
8. RANKING.
Any class or series of capital stock of the Corporation shall be
deemed to rank:
(a) prior or senior to the Class K Preferred Stock, as to the
payment of dividends and as to distribution of assets upon liquidation,
dissolution or winding up, if the holders of such class or series shall be
entitled to the receipt of dividends and of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in preference or
priority to the holders of Class K Preferred Stock ("Senior Stock");
(b) on a parity with the Class K Preferred Stock, as to the
payment of dividends and as to distribution of assets upon liquidation,
dissolution or winding up, whether or not the dividend rates, dividend payment
dates or redemption or liquidation prices per share thereof be different from
those of the Class K Preferred Stock, if (i) such capital stock is Class B
Cumulative Convertible Preferred Stock, Class C Cumulative Preferred Stock,
Class D Cumulative Preferred Stock, Class G Cumulative Preferred Stock, Class H
Cumulative Preferred Stock or Class J Cumulative Convertible Preferred Stock of
the Corporation, or (ii) the holders of such class of stock or series and the
Class K Preferred Stock shall be entitled to the receipt of dividends and of
amounts distributable upon liquidation, dissolution or winding up in proportion
to their respective amounts of accrued and unpaid dividends per share or
liquidation preferences, without preference or priority of one over the other
(the capital stock referred to in clauses (i) and (ii) of this paragraph being
hereinafter referred to, collectively, as "Parity Stock"); and
(c) junior to the Class K Preferred Stock, as to the payment
of dividends and as to the distribution of assets upon liquidation, dissolution
or winding up, if (i) such capital stock or series shall be Common Stock or
(ii) the holders of Class K Preferred Stock shall be entitled to receipt of
dividends or of amounts distributable upon liquidation, dissolution or winding
up, as the case may be, in preference or priority to the holders of shares of
such class or series (the capital stock referred to in clauses (i) and (ii) of
this paragraph being hereinafter referred to, collectively, as "Junior Stock").
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9. VOTING.
(a) If and whenever six quarterly dividends (whether or not
consecutive) payable on the Class K Preferred Stock or any series or class of
Parity Stock shall be in arrears (which shall, with respect to any such
quarterly dividend, mean that any such dividend has not been paid in full),
whether or not earned or declared, the number of directors then constituting
the Board of Directors shall be increased by two (if not already increased by
reason of similar types of provisions with respect to shares of Parity Stock of
any other class or series which is entitled to similar voting rights (the
"Voting Preferred Stock")) and the holders of shares of Class K Preferred
Stock, together with the holders of shares of all other Voting Preferred Stock
then entitled to exercise similar voting rights, voting as a single class
regardless of series, shall be entitled to elect the two additional directors
to serve on the Board of Directors at any annual meeting of stockholders or
special meeting held in place thereof, or at a special meeting of the holders
of the Class K Preferred Stock and the Voting Preferred Stock called as
hereinafter provided. Whenever all arrears in dividends on the Class K
Preferred Stock and the Voting Preferred Stock then outstanding shall have been
paid and dividends thereon for the current quarterly dividend period shall have
been declared and paid, or declared and set apart for payment, then the right
of the holders of the Class K Preferred Stock and the Voting Preferred Stock to
elect such additional two directors shall cease (but subject always to the same
provision for the vesting of such voting rights in the case of any similar
future arrearages), and the terms of office of all persons elected as directors
by the holders of the Class K Preferred Stock and the Voting Preferred Stock
shall forthwith terminate and the number of directors constituting the Board of
Directors shall be reduced accordingly. At any time after such voting power
shall have been so vested in the holders of Class K Preferred Stock and the
Voting Preferred Stock, if applicable, the Secretary of the Corporation may,
and upon the written request of any holder of Class K Preferred Stock
(addressed to the Secretary at the principal office of the Corporation) shall,
call a special meeting of the holders of the Class K Preferred Stock and of the
Voting Preferred Stock for the election of the two directors to be elected by
them as herein provided, such call to be made by notice similar to that
provided in the Bylaws of the Corporation for a special meeting of the
stockholders or as required by law. If any such special meeting required to be
called as above provided shall not be called by the Secretary within 20 days
after receipt of any such request, then any holder of Class K Preferred Stock
may call such meeting, upon the notice above provided, and for that purpose
shall have access to the stock books of the Corporation. The directors elected
at any such special meeting shall hold office until the next annual meeting of
the stockholders or special meeting held in lieu thereof if such office shall
not have previously terminated as above provided. If any vacancy shall occur
among the directors elected by the holders of the Class K Preferred Stock and
the Voting Preferred Stock, a successor shall be elected by the Board of
Directors, upon the nomination of the then-remaining director elected by the
holders of the Class K Preferred Stock and the Voting Preferred Stock or the
successor of such remaining director, to serve until the next annual meeting of
the stockholders or special meeting held in place thereof if such office shall
not have previously terminated as provided above.
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(b) So long as any shares of Class K Preferred Stock are
outstanding, in addition to any other vote or consent of stockholders required
by law or by the Charter of the Corporation, the affirmative vote of at least
66-2/3% of the votes entitled to be cast by the holders of the Class K
Preferred Stock voting as a single class with the holders of all other classes
or series of Parity Stock entitled to vote on such matters, given in person or
by proxy, either in writing without a meeting or by vote at any meeting called
for the purpose, shall be necessary for effecting or validating:
(i) Any amendment, alteration or repeal of any
of the provisions of, or the addition of any provision to, these Articles
Supplementary, the Charter or the By-Laws of the Corporation that materially
adversely affects the voting powers, rights or preferences of the holders of
the Class K Preferred Stock; provided, however, that the amendment of the
provisions of the Charter so as to authorize or create, or to increase the
authorized amount of, or issue any Junior Stock or any shares of any class of
Parity Stock shall not be deemed to materially adversely affect the voting
powers, rights or preferences of the holders of Class K Preferred Stock; or
(ii) The authorization, creation of, increase in the
authorized amount of, or issuance of any shares of any class or series of
Senior Stock or any security convertible into shares of any class or series of
Senior Stock (whether or not such class or series of Senior Stock is currently
authorized); provided, however, that no such vote of the holders of Class K
Preferred Stock shall be required if, at or prior to the time when such
amendment, alteration or repeal is to take effect, or when the issuance of any
such Senior Stock or convertible or exchangeable security is to be made, as the
case may be, provision is made for the redemption of all shares of Class K
Preferred Stock at the time outstanding to the extent such redemption is
authorized by Section 5 of this Article.
For purposes of the foregoing provisions and all other voting rights
under these Articles Supplementary, each share of Class K Preferred Stock shall
have one (1) vote per share, except that when any other class or series of
preferred stock of the Corporation shall have the right to vote with the Class
K Preferred Stock as a single class on any matter, then the Class K Preferred
Stock and such other class or series shall have with respect to such matters
one quarter of one vote per $25 of stated liquidation preference. Except as
otherwise required by applicable law or as set forth herein or in the Charter,
the Class K Preferred Stock shall not have any relative, participating,
optional or other special voting rights and powers other than as set forth
herein, and the consent of the holders thereof shall not be required for the
taking of any corporate action.
10. RECORD HOLDERS.
The Corporation and the Transfer Agent may deem and treat the record
holder of any share of Class K Preferred Stock as the true and lawful owner
thereof for all purposes, and neither the Corporation nor the Transfer Agent
shall be affected by any notice to the contrary.
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11.1 RESTRICTIONS ON OWNERSHIP AND TRANSFERS.
(A) LIMITATION ON BENEFICIAL OWNERSHIP. Except as provided in
Section 11.8, from and after the Issue Date, no Person (other than the Initial
Holder or a Look-Through Entity) shall Beneficially Own shares of Class K
Preferred Stock in excess of the Ownership Limit, the Initial Holder shall not
Beneficially Own shares of Class K Preferred Stock in excess of the Initial
Holder Limit and no Look-Through Entity shall Beneficially Own shares of Class
K Preferred Stock in excess of the Look- Through Ownership Limit.
(B) TRANSFERS IN EXCESS OF OWNERSHIP LIMIT. Except as
provided in Section 11.8, from and after the Issue Date (and subject to Section
11.12), any Transfer (whether or not such Transfer is the result of
transactions entered into through the facilities of the NYSE or other
securities exchange or an automated inter-dealer quotation system) that, if
effective, would result in any Person (other than the Initial Holder or a
Look-Through Entity) Beneficially Owning shares of Class K Preferred Stock in
excess of the Ownership Limit shall be void ab initio as to the Transfer of
such shares of Class K Preferred Stock that would be otherwise Beneficially
Owned by such Person in excess of the Ownership Limit, and the intended
transferee shall acquire no rights in such shares of Class K Preferred Stock.
(C) TRANSFERS IN EXCESS OF INITIAL HOLDER LIMIT. Except as
provided in Section 11.8, from and after the Issue Date (and subject to Section
11.12), any Transfer (whether or not such Transfer is the result of
transactions entered into through the facilities of the NYSE or other
securities exchange or an automated inter-dealer quotation system) that, if
effective, would result in the Initial Holder Beneficially Owning shares of
Class K Preferred Stock in excess of the Initial Holder Limit shall be void ab
initio as to the Transfer of such shares of Class K Preferred Stock that would
be otherwise Beneficially Owned by the Initial Holder in excess of the Initial
Holder limit, and the Initial Holder shall acquire no rights in such shares of
Class K Preferred Stock.
(D) TRANSFERS IN EXCESS OF LOOK-THROUGH OWNERSHIP LIMIT.
Except as provided in Section 11.8 from and after the Issue Date (and subject
to Section 11.12), any Transfer (whether or not such Transfer is the result of
transactions entered into through the facilities of the NYSE or other
securities exchange or an automated inter-dealer quotation system) that, if
effective, would result in any Look-Through Entity Beneficially Owning shares
of Class K Preferred Stock in excess of the Look- Through Ownership limit shall
be void ab initio as to the Transfer of such shares of Class K Preferred Stock
that would be otherwise Beneficially Owned by such Look- Through Entity in
excess of the Look-Through Ownership Limit and such Look- Through Entity shall
acquire no rights in such shares of Class K Preferred Stock.
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(E) TRANSFERS RESULTING IN "CLOSELY HELD" STATUS. From and
after the Issue Date, any Transfer that, if effective would result in the
Corporation being "closely held" within the meaning of Section 856(h) of the
Code, or would otherwise result in the Corporation failing to qualify as a REIT
(including, without limitation, a Transfer or other event that would result in
the Corporation owning (directly or constructively) an interest in a tenant
that is described in Section 856(d)(2)(B) of the Code if the income derived by
the Corporation from such tenant would cause the Corporation to fail to satisfy
any of the gross income requirements of Section 856(c) of the Code) shall be
void ab initio as to the Transfer of shares of Class K Preferred Stock that
would cause the Corporation (i) to be "closely held" within the meaning of
Section 856(h) of the Code or (ii) otherwise fail to qualify as a REIT, as the
case may be, and the intended transferee shall acquire no rights in such shares
of Class K Preferred Stock.
(F) SEVERABILITY ON VOID TRANSACTIONS. A Transfer of a share
of Class K Preferred Stock that is null and void under Sections 11.1(B), (C),
(D), or (E) of this Article because it would, if effective, result in (i) the
ownership of Class K Preferred Stock in excess of the Initial Holder Limit, the
Ownership Limit, or the Look-Through Ownership Limit, (ii) the Corporation
being "closely held" within the meaning of Section 856(h) of the Code or (iii)
the Corporation otherwise failing to qualify as a REIT, shall not adversely
affect the validity of the Transfer of any other share of Class K Preferred
Stock in the same or any other related transaction.
11.2 REMEDIES FOR BREACH. If the Board of Directors or a committee
thereof shall at any time determine in good faith that a Transfer or other
event has taken place in violation of Section 11.1 of this Article or that a
Person intends to acquire or has attempted to acquire Beneficial Ownership of
any shares of Class K Preferred Stock in violation of Section 11.1 of this
Article (whether or not such violation is intended), the Board of Directors or
a committee thereof shall be empowered to take any action as it deems advisable
to refuse to give effect to or to prevent such Transfer or other event,
including, but not limited to, refusing to give effect to such Transfer or
other event on the books of the Corporation, causing the Corporation to redeem
such shares at the then current Market Price and upon such terms and conditions
as may be specified by the Board of Directors in its sole discretion
(including, but not limited to, by means of the issuance of long-term
indebtedness for the purpose of such redemption), demanding the repayment of
any distributions received in respect of shares of Class K Preferred Stock
acquired in violation of Section 11.1 of this Article or instituting
proceedings to enjoin such Transfer or to rescind such Transfer or attempted
Transfer; provided, however, that any Transfers or attempted Transfers (or, in
the case of events other than a Transfer, Beneficial Ownership) in violation of
Section 11.1 of this Article, regardless of any action (or non-action) by the
Board of Directors or such committee, (a) shall be void ab initio or (b) shall
automatically result in the transfer described in Section 11.3 of this Article;
provided, further, that the provisions of this Section 11.2 shall be subject to
the provisions of Section 11.12 of this Article; provided, further, that
neither the Board of Directors nor any committee thereof may exercise such
authority in a manner that interferes with any ownership or transfer of Class K
Preferred Stock that is expressly authorized pursuant to Section 11.8(C) of
this Article.
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11.3. TRANSFER IN TRUST.
(A) ESTABLISHMENT OF TRUST. If, notwithstanding the other
provisions contained in this Article, at any time after the Issue Date there is
a purported Transfer (an "Excess Transfer") (whether or not such Transfer is
the result of transactions entered into through the facilities of the NYSE or
other securities exchange or an automated inter-dealer quotation system) or
other change in the capital structure of the Corporation (including, but not
limited to, any redemption of Equity Stock) or other event (including, but not
limited to, any acquisition of any share of Equity Stock) such that (a) any
Person (other than the Initial Holder or a Look-Through Entity) would
Beneficially Own shares of Class K Preferred Stock in excess of the Ownership
Limit, or (b) the Initial Holder would Beneficially Own shares of Class K
Preferred Stock in excess of the Initial Holder Limit, or (c) any Person that
is a Look-Through Entity would Beneficially Own shares of Class K Preferred
Stock in excess of the Look- Through Ownership Limit (in any such event, the
Person, Initial Holder or Look- Through Entity that would Beneficially Own
shares of Class K Preferred Stock in excess of the Ownership Limit, the Initial
Holder Limit or the Look-Through Entity Limit, respectively, is referred to as
a "Prohibited Transferee"), then, except as otherwise provided in Section 11.8
of this Article, such shares of Class K Preferred Stock in excess of the
Ownership Limit, the Initial Holder Limit or the Look-Through Ownership Limit,
as the case may be, (rounded up to the nearest whole share) shall be
automatically transferred to a Trustee in his capacity as trustee of a Trust
for the exclusive benefit of one or more Charitable Beneficiaries. Such
transfer to the Trustee shall be deemed to be effective as of the close of
business on the Business Day prior to the Excess Transfer, change in capital
structure or another event giving rise to a potential violation of the
Ownership Limit, the Initial Holder Limit or the Look- Through Entity Ownership
Limit.
(B) APPOINTMENT OF TRUSTEE. The Trustee shall be appointed by
the Corporation and shall be a Person unaffiliated with either the Corporation
or any Prohibited Transferee. The Trustee may be an individual or a bank or
trust company duly licensed to conduct a trust business.
(C) STATUS OF SHARES HELD BY THE TRUSTEE. Shares of Class K
Preferred Stock held by the Trustee shall be issued and outstanding shares of
capital stock of the Corporation. Except to the extent provided in Section
11.3(E), the Prohibited Transferee shall have no rights in the Class K
Preferred Stock held by the Trustee, and the Prohibited Transferee shall not
benefit economically from ownership of any shares held in trust by the Trustee,
shall have no rights to dividends and shall not possess any rights to vote or
other rights attributable to the shares held in the Trust.
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(D) DIVIDEND AND VOTING RIGHTS. The Trustee shall have all
voting rights and rights to dividends with respect to shares of Class K
Preferred Stock held in the Trust, which rights shall be exercised for the
benefit of the Charitable Beneficiary. Any dividend or distribution paid prior
to the discovery by the Corporation that the shares of Class K Preferred Stock
have been transferred to the Trustee shall be repaid to the Corporation upon
demand, and any dividend or distribution declared but unpaid shall be rescinded
as void ab initio with respect to such shares of Class K Preferred Stock. Any
dividends or distributions so disgorged or rescinded shall be paid over to the
Trustee and held in trust for the Charitable Beneficiary. Any vote cast by a
Prohibited Transferee prior to the discovery by the Corporation that the shares
of Class K Preferred Stock have been transferred to the Trustee will be
rescinded as void ab initio and shall be recast in accordance with the desires
of the Trustee acting for the benefit of the Charitable Beneficiary. The owner
of the shares at the time of the Excess Transfer, change in capital structure
or other event giving rise to a potential violation of the Ownership Limit,
Initial Holder Limit or Look-Through Entity Ownership Limit shall be deemed to
have given an irrevocable proxy to the Trustee to vote the shares of Class K
Preferred Stock for the benefit of the Charitable Beneficiary.
(E) RESTRICTIONS ON TRANSFER. The Trustee of the Trust may
sell the shares held in the Trust to a Person, designated by the Trustee, whose
ownership of the shares will not violate the Ownership Restrictions. If such a
sale is made, the interest of the Charitable Beneficiary shall terminate and
proceeds of the sale shall be payable to the Prohibited Transferee and to the
Charitable Beneficiary as provided in this Section 11.3(E). The Prohibited
Transferee shall receive the lesser of (1) the price paid by the Prohibited
Transferee for the shares or, if the Prohibited Transferee did not give value
for the shares (through a gift, devise or other transaction), the Market Price
of the shares on the day of the event causing the shares to be held in the
Trust and (2) the price per share received by the Trustee from the sale or
other disposition of the shares held in the Trust. Any proceeds in excess of
the amount payable to the Prohibited Transferee shall be payable to the
Charitable Beneficiary. If any of the transfer restrictions set forth in this
Section 11.3(E) or any application thereof is determined in a final judgment to
be void, invalid or unenforceable by any court having jurisdiction over the
issue, the Prohibited Transferee may be deemed, at the option of the
Corporation, to have acted as the agent of the Corporation in acquiring the
Class K Preferred Stock as to which such restrictions would, by their terms,
apply, and to hold such Class K Preferred Stock on behalf of the Corporation.
(F) PURCHASE RIGHT IN STOCK TRANSFERRED TO THE TRUSTEE.
Shares of Class K Preferred Stock transferred to the Trustee shall be deemed to
have been offered for sale to the Corporation, or its designee, at a price per
share equal to the lesser of (i) the price per share in the transaction that
resulted in such transfer to the Trust (or, in the case of a devise or gift,
the Market Price at the time of such devise or gift) and (ii) the Market Price
on the date the Corporation, or its designee, accepts such offer. The
Corporation shall have the right to accept such offer for a period of
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90 days after the later of (i) the date of the Excess Transfer or other event
resulting in a transfer to the Trust and (ii) the date that the Board of
Directors determines in good faith that an Excess Transfer or other event
occurred.
(G) DESIGNATION OF CHARITABLE BENEFICIARIES. By written
notice to the Trustee, the Corporation shall designate one or more nonprofit
organizations to be the Charitable Beneficiary of the interest in the Trust
relating to such Prohibited Transferee if (i) the shares of Class K Preferred
Stock held in the Trust would not violate the Ownership Restrictions in the
hands of such Charitable Beneficiary and (ii) each Charitable Beneficiary is an
organization described in Sections 170(b)(1)(A), 170(c)(2) and 501(c)(3) of the
Code.
11.4 NOTICE OF RESTRICTED TRANSFER. Any Person that acquires or
attempts to acquire shares of Class K Preferred Stock in violation of Section
11.1 of this Article, or any Person that is a Prohibited Transferee such that
stock is transferred to the Trustee under Section 11.3 of this Article, shall
immediately give written notice to the Corporation of such event and shall
provide to the Corporation such other information as the Corporation may
request in order to determine the effect, if any, of such Transfer or attempted
Transfer or other event on the Corporation's status as a REIT. Failure to give
such notice shall not limit the rights and remedies of the Board of Directors
provided herein in any way.
11.5 OWNERS REQUIRED TO PROVIDE INFORMATION. From and after the Issue
Date certain record and Beneficial Owners and transferees of shares of Class K
Preferred Stock will be required to provide certain information as set out
below.
(A) ANNUAL DISCLOSURE. Every record and Beneficial Owner of
more than 5% (or such other percentage between 0.5% and 5%, as provided in the
applicable regulations adopted under the Code) of the number of Outstanding
shares of Class K Preferred Stock shall, within 30 days after January 1 of each
year, give written notice to the Corporation stating the name and address of
such record or Beneficial Owner, the number of shares of Class K Preferred
Stock Beneficially Owned, and a full description of how such shares are held.
Each such record or Beneficial Owner of Class K Preferred Stock shall, upon
demand by the Corporation, disclose to the Corporation in writing such
additional information with respect to the Beneficial Ownership of the Class K
Preferred Stock as the Board of Directors, in its sole discretion, deems
appropriate or necessary to (i) comply with the provisions of the Code
regarding the qualification of the Corporation as a REIT under the Code and
(ii) ensure compliance with the Ownership Limit, the Initial Holder Limit or
the Look- Through Ownership Limit, as applicable. Each stockholder of record,
including without limitation any Person that holds shares of Class K Preferred
Stock on behalf of a Beneficial Owner, shall take all reasonable steps to
obtain the written notice described in this Section 11.5 from the Beneficial
Owner.
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(B) DISCLOSURE AT THE REQUEST OF THE CORPORATION. Any Person
that is a Beneficial Owner of shares of Class K Preferred Stock and any Person
(including the stockholder of record) that is holding shares of Class K
Preferred Stock for a Beneficial Owner, and any proposed transferee of shares,
shall provide such information as the Corporation, in its sole discretion, may
request in order to determine the Corporation's status as a REIT, to comply
with the requirements of any taxing authority or other governmental agency, to
determine any such compliance or to ensure compliance with the Ownership Limit,
the Initial Holder Limit and the Look- Through Ownership Limit, and shall
provide a statement or affidavit to the Corporation setting forth the number
of shares of Class K Preferred Stock already Beneficially Owned by such
stockholder or proposed transferee and any related persons specified, which
statement or affidavit shall be in the form prescribed by the Corporation for
that purpose.
11.6 REMEDIES NOT LIMITED. Nothing contained in this Article shall
limit the authority of the Board of Directors to take such other action as it
deems necessary or advisable (subject to the provisions of Section 11.12 of
this Article) (i) to protect the Corporation and the interests of its
stockholders in the preservation of the Corporation's status as a REIT and
(ii) to insure compliance with the Ownership Limit, the Initial Holder Limit
and the Look-Through Ownership Limit.
11.7 AMBIGUITY. In the case of an ambiguity in the application of any
of the provisions of Section 11 of this Article, or in the case of an ambiguity
in any definition contained in Section 11 of this Article, the Board of
Directors shall have the power to determine the application of the provisions
of this Article with respect to any situation based on its reasonable belief,
understanding or knowledge of the circumstances.
11.8 EXCEPTIONS. The following exceptions shall apply or may be
established with respect to the limitations of Section 11.1 of this Article.
(A) WAIVER OF OWNERSHIP LIMIT. The Board of Directors, upon
receipt of a ruling from the Internal Revenue Service or an opinion of tax
counsel or other evidence or undertaking acceptable to it, may waive the
application, in whole or in part, of the Ownership Limit to a Person subject to
the Ownership Limit, if such person is not an individual for purposes of
Section 542(a) of the Code and is a corporation, partnership, estate or trust.
In connection with any such exemption, the Board of Directors may require such
representations and undertakings from such Person and may impose such other
conditions as the Board of Directors deems necessary, in its sole discretion,
to determine the effect, if any, of the proposed Transfer on the Corporation's
status as a REIT.
(B) PLEDGE BY INITIAL HOLDER. Notwithstanding any other
provision of this Article, the pledge by the Initial Holder of all or any
portion of the Class K Preferred Stock directly owned at any time or from time
to time shall not constitute a violation of Section 11.1 of this Article and
the pledgee shall not be subject to the Ownership Limit with respect to the
Class K Preferred Stock so pledged to it either as a result of the pledge or
upon foreclosure.
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(C) UNDERWRITERS. For a period of 270 days (or such longer
period of time as any underwriter described below shall hold an unsold
allotment of Class K Preferred Stock) following the purchase of Class K
Preferred Stock by an underwriter that (i) is a corporation, partnership or
other legal entity and (ii) participates in an offering of the Class K
Preferred Stock, such underwriter shall not be subject to the Ownership Limit
with respect to the Class K Preferred Stock purchased by it as a part of or in
connection with such offering and with respect to any Class K Preferred Stock
purchased in connection with market making activities.
11.9 LEGEND. Each certificate for Class K Preferred Stock shall bear
substantially the following legend:
"The shares of Class K Convertible Cumulative Preferred Stock
represented by this certificate are subject to restrictions on
transfer. No person may Beneficially Own shares of Class K Convertible
Cumulative Preferred Stock in excess of the Ownership Restrictions, as
applicable, with certain further restrictions and exceptions set forth
in the Charter (including the Articles Supplementary setting forth the
terms of the Class K Convertible Cumulative Preferred Stock). Any
Person that attempts to Beneficially Own shares of Class K Convertible
Cumulative Preferred Stock in excess of the applicable limitation must
immediately notify the Corporation. All capitalized terms in this
legend have the meanings ascribed to such terms in the Charter
(including the Articles Supplementary setting forth the terms of the
Class K Convertible Cumulative Preferred Stock), as the same may be
amended from time to time, a copy of which, including the restrictions
on transfer, will be sent without charge to each stockholder that so
requests. If the restrictions on transfer are violated (i) the
transfer of the shares of Class K Convertible Cumulative Preferred
Stock represented hereby will be void in accordance with the Charter
(including the Articles Supplementary setting forth the terms of the
Class K Convertible Cumulative Preferred Stock) or (ii) the shares of
Class K Convertible Cumulative Preferred Stock represented hereby will
automatically be transferred to a Trustee of a Trust for the benefit
of one or more Charitable Beneficiaries."
11.10 SEVERABILITY. If any provision of this Article or any
application of any such provision is determined in a final and unappealable
judgment to be void, invalid or unenforceable by any Federal or state court
having jurisdiction over the issues, the validity and enforceability of the
remaining provisions shall not be affected and other applications of such
provision shall be affected only to the extent necessary to comply with the
determination of such court.
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11.11 BOARD OF DIRECTORS DISCRETION. Anything in this Article to the
contrary notwithstanding, the Board of Directors shall be entitled to take or
omit to take such actions as it in its discretion shall determine to be
advisable in order that the Corporation maintain its status as and continue to
qualify as a REIT, including, but not limited to, reducing the Ownership Limit,
the Initial Holder Limit and the Look-Through Ownership Limit in the event of
a change in law.
11.12 SETTLEMENT. Nothing in this Section 11 of this Article shall be
interpreted to preclude the settlement of any transaction entered into through
the facilities of the NYSE or other securities exchange or an automated
inter-dealer quotation system.
FOURTH: The terms of the Class K Cumulative Preferred Stock set forth
in Article Third hereof shall become Article XXI of the Charter.
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IN WITNESS WHEREOF, the Corporation has caused these presents to be
signed in its name and on its behalf by its Senior Vice President and Chief
Financial Officer and witnessed by its Assistant Secretary on February 17,
1999.
WITNESS: APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
/s/ LUCY CORDOVA /s/ TROY D. BUTTS
- ----------------------------- --------------------------------
Lucy Cordova Troy D. Butts
Assistant Secretary Senior Vice President and
Chief Financial Officer
THE UNDERSIGNED, Senior Vice President and Chief Financial Officer of
APARTMENT INVESTMENT AND MANAGEMENT COMPANY, who executed on behalf of the
Corporation the Articles Supplementary of which this Certificate is made a
part, hereby acknowledges in the name and on behalf of said Corporation the
foregoing Articles Supplementary to be the corporate act of said Corporation
and hereby certifies that the matters and facts set forth herein with respect
to the authorization and approval thereof are true in all material respects
under the penalties of perjury.
/s/ TROY D. BUTTS
--------------------------------
Troy D. Butts
Senior Vice President and
Chief Financial Officer
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ARTICLES SUPPLEMENTARY
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
CLASS I CUMULATIVE PREFERRED STOCK
(PAR VALUE $.01 PER SHARE)
APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation
(hereinafter called the "Corporation"), having its principal office in Baltimore
City, Maryland, hereby certifies to the Department of Assessments and Taxation
of the State of Maryland that:
FIRST: Pursuant to authority expressly vested in the Board of Directors
of the Corporation by Section 1.2 of Article IV of the Charter of the
Corporation, as amended to date (the "Charter"), the Board of Directors has duly
divided and classified 10,000,000 authorized but unissued shares of Class A
Common Stock of the Corporation, par value $.01 per share (the "Class A Common
Stock"), into a class designated as Class I Cumulative Preferred Stock, par
value $.01 per share, and has provided for the issuance of such class.
SECOND: The reclassification increases the number of shares classified
as Class I Cumulative Preferred Stock, par value $.01 per share, from no shares
immediately prior to the reclassification to 10,000,000 shares immediately after
the reclassification. The reclassification decreases the number of shares
classified as Class A Common Stock from 478,277,500 shares immediately prior to
the reclassification to 468,277,500 shares immediately after the
reclassification.
THIRD: The terms of the Class I Cumulative Preferred Stock (including
the preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends and other distributions, qualifications, or terms or
conditions of redemption) as set by the Board of Directors are as follows:
1. NUMBER OF SHARES AND DESIGNATION.
This class of Preferred Stock shall be designated as Class I Cumulative
Preferred Stock, par value $.01 per share (the "Class I Preferred Stock") and
Ten Million (10,000,000) shall be the authorized number of shares of such Class
I Preferred Stock constituting such class.
2. DEFINITIONS.
For purposes of the Class I Preferred Stock, the following terms shall
have the meanings indicated:
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"Act" shall mean the Securities Act of 1933, as amended.
"affiliate" of a Person means a Person that directly, or indirectly
through one or more intermediaries, controls or is controlled by, or is
under common control with, the Person specified.
"Aggregate Value" shall mean, with respect to any block of Equity
Stock, the sum of the products of (i) the number of shares of each
class of Equity Stock within such block multiplied by (ii) the
corresponding Market Price of one share of Equity Stock of such class.
"Beneficial Ownership" shall mean, with respect to any Person,
ownership of shares of Equity Stock equal to the sum of (i) the number
of shares of Equity Stock directly owned by such Person, (ii) the
number of shares of Equity Stock indirectly owned by such Person (if
such Person is an "individual" as defined in Section 542(a)(2) of the
Code) taking into account the constructive ownership rules of Section
544 of the Code, as modified by Section 856(h)(1)(B) of the Code, and
(iii) the number of shares of Equity Stock that such Person is deemed
to beneficially own pursuant to Rule 13d-3 under the Exchange Act or
that is attributed to such Person pursuant to Section 318 of the Code,
as modified by Section 856(d)(5) of the Code, provided that when
applying this definition of Beneficial Ownership to the Initial Holder,
clause (iii) of this definition, and clause (a) (ii) of the definition
of "Person" shall be disregarded. The terms "Beneficial Owner,"
"Beneficially Owns" and "Beneficially Owned" shall have the correlative
meanings.
"Board of Directors" shall mean the Board of Directors of the
Corporation or any committee authorized by such Board of Directors to
perform any of its responsibilities with respect to the Class I
Preferred Stock; provided that, for purposes of paragraph (a) of
Section 8 of this Article, the term "Board of Directors" shall not
include any such committee.
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which state or federally chartered banking institutions in New
York, New York are not required to be open.
"Charitable Beneficiary" shall mean one or more beneficiaries of the
Trust as determined pursuant to Section 10(c) of this Article, each of
which shall be an organization described in Section 170(b)(1)(A),
170(c)(2) and 501(c)(3) of the Code.
"Class I Preferred Stock" shall have the meaning set forth in Section 1
of this Article.
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"Closing Price," when used with respect to a share of any Equity Stock
and for any date, shall mean the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing
bid and asked prices, regular way, in either case, as reported in the
principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the NYSE or, if the Equity
Stock is not listed or admitted to trading on the NYSE, as reported in
the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on
which the Equity Stock is listed or admitted to trading or, if the
Equity Stock is not listed or admitted to trading on any national
securities exchange, the last quoted price, or if not so quoted, the
average of the high bid and low asked prices in the over-the-counter
market, as reported by the National Association of Securities Dealers,
Inc. Automated Quotation System ("NASDAQ") or, if such system is no
longer in use, the principal other automated quotations system that may
then be in use or, if the Equity Stock is not quoted by any such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Equity
Stock selected by the Board of Directors of the Corporation.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, or any successor statute thereto. Reference to any
provision of the Code shall mean such provision as in effect from time
to time, as the same may be amended, and any successor thereto, as
interpreted by any applicable regulations or other administrative
pronouncements as in effect from time to time.
"Common Stock" shall mean the Class A Common Stock, $.01 par value per
share, of the Corporation, and the Class B Common Stock, $.01 par value
per share, of the Corporation and such other shares of the
Corporation's capital stock into which outstanding shares of such Class
A Common Stock or Class B Common Stock shall be reclassified.
"Dividend Payment Date" shall mean January 15, April 15, July 15 and
October 15 of each year; provided, that if any Dividend Payment Date
falls on any day other than a Business Day, the dividend payment
payable on such Dividend Payment Date shall be paid on the Business Day
immediately following such Dividend Payment Date and no interest shall
accrue on such dividend from such date to such Dividend Payment Date.
"Dividend Periods" shall mean the Initial Dividend Period and each
quarterly dividend period commencing on and including, January 15,
April 15, July 15 and October 15 of each year and ending on and
including the day preceding the first day of the next succeeding
Dividend Period, other than the Dividend Period during which any Class
I Preferred Stock shall be redeemed pursuant
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to Section 5 hereof, which shall end on and include the Redemption Date
with respect to the Class I Preferred Stock being redeemed.
"Equity Stock" shall mean one or more shares of any class of capital
stock of the Corporation.
"Excess Transfer" has the meaning set forth in Section 10(c)(i) of this
Article.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Issue Date" shall mean the date on which shares of Class I Preferred
Stock are first issued.
"Initial Dividend Period" shall mean the period commencing on and
including the Issue Date and ending on and including the day preceding
the first January 15, April 15, July 15, or October 15 to occur
thereafter.
"Initial Holder" shall mean Terry Considine.
"Initial Holder Limit" shall mean a number of the Outstanding shares of
Class I Preferred Stock of the Corporation having an Aggregate Value
not in excess of the excess of (x) 15% of the Aggregate Value of all
Outstanding shares of Equity Stock over (y) the Aggregate Value of all
shares of Equity Stock other than Class I Preferred Stock that are
Beneficially Owned by the Initial Holder. From the Issue Date, the
Secretary of the Corporation, or such other person as shall be
designated by the Board of Directors, shall upon request make available
to the representative(s) of the Initial Holder and the Board of
Directors, a schedule that sets forth the then-current Initial Holder
Limit applicable to the Initial Holder.
"Junior Stock" shall have the meaning set forth in paragraph (c) of
Section 7 of this Article.
"Liquidation Preference" shall have the meaning set forth in paragraph
(a) of Section 4 of this Article.
"Look-Through Entity" shall mean a Person that is either (i) described
in Section 401(a) of the Code as provided under Section 856(h)(3) of
the Code or (ii) registered under the Investment Company Act of 1940.
"Look-Through Ownership Limit" shall mean, for any Look-Through Entity,
a number of the Outstanding shares of Class I Preferred Stock of the
Corporation having an Aggregate Value not in excess of the excess of
(x) 15% of the Aggregate Value of all Outstanding shares of Equity
Stock over (y) the
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Aggregate Value of all shares of Equity Stock other than Class I
Preferred Stock that are Beneficially Owned by the Look-Through Entity.
"Market Price" on any date shall mean, with respect to any share of
Equity Stock, the Closing Price of a share of that class of Equity
Stock on the Trading Day immediately preceding such date.
"NYSE" shall mean the New York Stock Exchange, Inc.
"Operating Partnership" shall mean AIMCO Properties, L.P., a Delaware
limited partnership.
"Outstanding" shall mean issued and outstanding shares of Equity Stock
of the Corporation, provided that for purposes of the application of
the Ownership Limit, the Look-Through Ownership Limit or the Initial
Holder Limit to any Person, the term "Outstanding" shall be deemed to
include the number of shares of Equity Stock that such Person alone, at
that time, could acquire pursuant to any options or convertible
securities.
"Ownership Limit" shall mean, for any Person other than the Initial
Holder or a Look-Through Entity, a number of the Outstanding shares of
Class I Preferred Stock of the Corporation having an Aggregate Value
not in excess of the excess of (x) 8.7% of the Aggregate Value of all
Outstanding shares of Equity Stock over (y) the Aggregate Value of all
shares of Equity Stock other than Class I Preferred Stock that are
Beneficially Owned by the Person.
"Ownership Restrictions" shall mean collectively the Ownership Limit as
applied to Persons other than the Initial Holder or Look-Through
Entities, the Initial Holder Limit as applied to the Initial Holder and
the Look-Through Ownership Limit as applied to Look-Through Entities.
"Parity Stock" shall have the meaning set forth in paragraph (b) of
Section 7 of this Article.
"Person" shall mean (a) for purposes of Section 10 of this Article, (i)
an individual, corporation, partnership, limited liability company,
estate, trust (including a trust qualifying under Section 401(a) or
501(c) of the Code), association, private foundation within the meaning
of Section 509(a) of the Code, joint stock company or other entity, and
(ii) also includes a group as that term is used for purposes of Section
13(d)(3) of the Exchange Act and (b) for purposes of the remaining
Sections of this Article, any individual, firm, partnership, limited
liability company, corporation or other entity and shall include any
successor (by merger or otherwise) of such entity.
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"Prohibited Transferee" has the meaning set forth in Section 10(c)(i)
of this Article.
"Redemption Date" shall have the meaning set forth in paragraph (a) of
Section 5 of this Article.
"REIT" shall mean a "real estate investment trust" as defined in
Section 856 of the Code.
"Senior Stock" shall have the meaning set forth in paragraph (a) of
Section 7 of this Article.
"set apart for payment" shall be deemed to include, without any action
other than the following, the recording by the Corporation in its
accounting ledgers of any accounting or bookkeeping entry which
indicates, pursuant to a declaration of dividends or other distribution
by the Board of Directors, the allocation of funds to be so paid on any
series or class of capital stock of the Corporation; provided, however,
that if any funds for any class or series of Junior Stock or any class
or series of Parity Stock are placed in a separate account of the
Corporation or delivered to a disbursing, paying or other similar
agent, then "set apart for payment" with respect to the Class I
Preferred Stock shall mean placing such funds in a separate account or
delivering such funds to a disbursing, paying or other similar agent.
"Trading Day," when used with respect to the Closing Price of a share
of any Equity Stock, shall mean (i) if the Equity Stock is listed or
admitted to trading on the NYSE, a day on which the NYSE is open for
the transaction of business, (ii) if the Equity Stock is not listed or
admitted to trading on the NYSE but is listed or admitted to trading on
another national securities exchange or automated quotation system, a
day on which the principal national securities exchange or automated
quotation system, as the case may be, on which the Equity Stock is
listed or admitted to trading is open for the transaction of business,
or (iii) if the Equity Stock is not listed or admitted to trading on
any national securities exchange or automated quotation system, any day
other than a Saturday, a Sunday or a day on which banking institutions
in the State of New York are authorized or obligated by law or
executive order to close.
"Transfer" shall mean any sale, transfer, gift, assignment, devise or
other disposition of a share of Class I Preferred Stock (including (i)
the granting of an option or any series of such options or entering
into any agreement for the sale, transfer or other disposition of Class
I Preferred Stock or (ii) the sale, transfer, assignment or other
disposition of any securities or rights convertible into or
exchangeable for Class I Preferred Stock), whether voluntary or
involuntary, whether of record or Beneficial Ownership, and whether by
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operation of law or otherwise (including, but not limited to, any
transfer of an interest in other entities that results in a change in
the Beneficial Ownership of shares of Class I Preferred Stock). The
term "Transfers" and "Transferred" shall have correlative meanings.
"Transfer Agent" means such transfer agent as may be designated by the
Board of Directors or their designee as the transfer agent for the
Class I Preferred Stock; provided, that if the Corporation has not
designated a transfer agent then the Corporation shall act as the
transfer agent for the Class I Preferred Stock.
"Trust" shall mean the trust created pursuant to Section 10(c) of this
Article.
"Trustee" shall mean the Person unaffiliated with either the
Corporation or the Prohibited Transferee that is appointed by the
Corporation to serve as trustee of the Trust.
"Voting Preferred Stock" shall have the meaning set forth in Section 8
of this Article.
3. DIVIDENDS.
(a) The holders of Class I Preferred Stock shall be entitled
to receive, when and as declared by the Board of Directors out of funds legally
available for that purpose, cumulative dividends payable in cash in an amount
per share of Class I Preferred Stock equal to $2.00 per annum (equivalent to 8%
per annum of the per share Liquidation Preference (as hereinafter defined)). As
of any particular date, such dividends shall be cumulative from the later of (i)
the Issue Date or (ii) the first day after the most recent Dividend Period in
respective of which dividends have been paid or a sum sufficient for such
payment has been set apart for such payment, in each case, whether or not in any
Dividend Period or Dividend Periods such dividends shall be declared or there
shall be funds of the Corporation legally available for the payment of such
dividends. Dividends shall be payable quarterly in arrears on each Dividend
Payment Date. Each such dividend shall be payable in arrears to the holders of
record of the Class I Preferred Stock, as they appear on the stock records of
the Corporation at the close of business on the January 1, April 1, July 1 or
October 1, as the case may be, immediately preceding such Dividend Payment Date.
Accumulated, accrued and unpaid dividends for any past Dividend Periods may be
declared and paid at any time, without reference to any regular Dividend Payment
Date, to holders of record on such date, which date shall not precede by more
than 45 days the payment date thereof, as may be fixed by the Board of
Directors. All holders of record of shares of Class I Preferred Stock as of any
record date shall be entitled to receive the same per share dividend payment,
notwithstanding the fact that any of such shares were not outstanding during the
entire Dividend Period in respect of which such payment is made.
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(b) Any dividend payable on the Class I Preferred Stock for
any partial dividend period shall be computed ratably on the basis of twelve
30-day months and a 360-day year. Holders of Class I Preferred Stock shall not
be entitled to any dividends, whether payable in cash, property or stock, in
excess of full cumulative dividends, as herein provided, on the Class I
Preferred Stock. No interest, or sum of money in lieu of interest, shall be
payable in respect of any dividend payment or payments on the Class I Preferred
Stock that may be in arrears.
(c) So long as any of the shares of Class I Preferred Stock
are outstanding, except as described in the immediately following sentence, no
dividends shall be declared or paid or set apart for payment by the Corporation
and no other distribution of cash or other property shall be declared or made,
directly or indirectly, by the Corporation with respect to any shares of Parity
Stock unless, in each case, dividends equal to the full amount of accumulated,
accrued and unpaid dividends on all outstanding shares of Class I Preferred
Stock 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 payment of such dividends on the Class I Preferred Stock for all Dividend
Periods ending on or prior to the date such dividend or distribution is
declared, paid, set apart for payment or made, as the case may be, with respect
to such shares of Parity Stock. When dividends are not paid in full or a sum
sufficient for such payment is not set apart, as aforesaid, all dividends
declared upon the Class I Preferred Stock and all dividends declared upon any
shares of Parity Stock shall be declared ratably in proportion to the respective
amounts of dividends accumulated, accrued and unpaid on the Class I Preferred
Stock and accumulated, accrued and unpaid on such Parity Stock.
(d) So long as any of the shares of Class I Preferred Stock
are outstanding, no dividends (other than dividends or distributions paid in
shares of, or options, warrants or rights to subscribe for or purchase shares
of, Junior Stock) shall be declared or paid or set apart for payment by the
Corporation and no other distribution of cash or other property shall be
declared or made, directly or indirectly, by the Corporation with respect to any
shares of Junior Stock, nor shall any shares of Junior Stock be redeemed,
purchased or otherwise acquired (other than a redemption, purchase or other
acquisition of Common Stock made for purposes of an employee incentive or
benefit plan of the Corporation or any subsidiary) for any consideration (or any
moneys be paid to or made available for a sinking fund for the redemption of any
shares of any such stock), directly or indirectly, by the Corporation (except by
conversion into or exchange for shares of, or options, warrants or rights to
subscribe for or purchase shares of, Junior Stock), nor shall any other cash or
other property otherwise be paid or distributed to or for the benefit of any
holder of shares of Junior Stock in respect thereof, directly or indirectly, by
the Corporation unless, in each case, dividends equal to the full amount of all
accumulated, accrued and unpaid dividends on all outstanding shares of Class I
Preferred Stock have been declared and paid, or such dividends have been
declared and a sum sufficient for the payment thereof has been set apart for
such payment, on all outstanding shares of Class I Preferred Stock
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for all Dividend Periods ending on or prior to the date such dividend or
distribution is declared, paid, set apart for payment or made with respect to
such shares of Junior Stock, or the date such shares of Junior Stock are
redeemed, purchased or otherwise acquired or monies paid to or made available
for any sinking fund for such redemption, or the date any such cash or other
property is paid or distributed to or for the benefit of any holders of Junior
Stock in respect thereof, as the case may be.
Notwithstanding the provisions of this Section 3, the
Corporation shall not be prohibited from (i) declaring or paying or setting
apart for payment any dividend or distribution on any shares of Parity Stock or
(ii) or redeeming, purchasing or otherwise acquiring any Parity Stock, in each
case, if such declaration, payment, setting apart for payment, redemption,
purchase or other acquisition is necessary in order to maintain the continued
qualification of the Corporation as a REIT under Section 856 of the Code.
4. LIQUIDATION PREFERENCE.
(a) In the event of any liquidation, dissolution or winding up
of the Corporation, whether voluntary or involuntary, before any payment or
distribution by the Corporation (whether of capital, surplus or otherwise) shall
be made to or set apart for the holders of Junior Stock, the holders of shares
of Class I Preferred Stock shall be entitled to receive Twenty-Five Dollars
($25) per share of Class I Preferred Stock (the "Liquidation Preference"), plus
an amount equal to all dividends (whether or not earned or declared)
accumulated, accrued and unpaid thereon to the date of final distribution to
such holders; but such holders shall not be entitled to any further payment.
Until the holders of the Class I Preferred Stock have been paid the Liquidation
Preference in full, plus an amount equal to all dividends (whether or not earned
or declared) accumulated, accrued and unpaid thereon to the date of final
distribution to such holders, no payment will be made to any holder of Junior
Stock upon the liquidation, dissolution or winding up of the Corporation. If,
upon any liquidation, dissolution or winding up of the Corporation, the assets
of the Corporation, or proceeds thereof, distributable among the holders of
Class I Preferred Stock shall be insufficient to pay in full the preferential
amount aforesaid and liquidating payments on any other shares of any class or
series of Parity Stock, then such assets, or the proceeds thereof, shall be
distributed among the holders of Class I Preferred Stock and any such other
Parity Stock ratably in the same proportion as the respective amounts that would
be payable on such Class I Preferred Stock and any such other Parity Stock if
all amounts payable thereon were paid in full. For the purposes of this Section
4, (i) a consolidation or merger of the Corporation with one or more
corporations, (ii) a sale or transfer of all or substantially all of the
Corporation's assets, or (iii) a statutory share exchange shall not be deemed to
be a liquidation, dissolution or winding up, voluntary or involuntary, of the
Corporation.
(b) Upon any liquidation, dissolution or winding up of the
Corporation, after payment shall have been made in full to the holders of Class
I
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Preferred Stock and any Parity Stock, as provided in this Section 4, any other
series or class or classes of Junior Stock shall, subject to the respective
terms thereof, be entitled to receive any and all assets remaining to be paid or
distributed, and the holders of the Class I Preferred Stock and any Parity Stock
shall not be entitled to share therein.
5. REDEMPTION AT THE OPTION OF THE CORPORATION.
(a) Shares of Class I Preferred Stock shall not be redeemable
by the Corporation prior to March 1, 2005, except as set forth in Section 10(b)
of this Article. On and after March 1, 2005, the Corporation, at its option, may
redeem shares of Class I Preferred Stock, in whole or from time to time in part,
at a redemption price payable in cash equal to 100% of the Liquidation
Preference thereof, plus all accumulated, accrued and unpaid dividends to the
date fixed for redemption (the "Redemption Date"); provided, however, that in
the event of a redemption of shares of Class I Preferred Stock, if the
Redemption Date occurs after a dividend record date and on or prior to the
related Dividend Payment Date, the dividend payable on such Dividend Payment
Date in respect of such shares called for redemption shall be payable on such
Dividend Payment Date to the holders of record at the close of business on such
dividend record date, and shall not be payable as part of the redemption price
for such shares. In connection with any redemption pursuant to this Section
5(a), the redemption price of the Class I Preferred Stock (other than any
portion thereof consisting of accumulated, accrued and unpaid dividends) shall
be payable solely with the proceeds from the sale by the Corporation or the
Operating Partnership, of other capital shares of the Corporation or the
Operating Partnership (whether or not such sale occurs concurrently with such
redemption). For purposes of the preceding sentence, "capital shares" means any
common stock, preferred stock, depositary shares, partnership or other
interests, participations or other ownership interests (however designated) and
any rights (other than debt securities convertible into or exchangeable at the
option of the holder for equity securities (unless and to the extent such debt
securities are subsequently converted into capital shares)) or options to
purchase any of the foregoing of or in the Corporation or the Operating
Partnership.
(b) The Redemption Date shall be selected by the Corporation,
shall be specified in the notice of redemption and shall be not less than 30
days nor more than 60 days after the date notice of redemption is sent by the
Corporation.
(c) If full cumulative dividends on all outstanding shares of
Class I Preferred Stock have not been declared and paid, or declared and set
apart for payment, no shares of Class I Preferred Stock may be redeemed unless
all outstanding shares of Class I Preferred Stock are simultaneously redeemed
and neither the Corporation nor any affiliate of the Corporation may purchase or
acquire shares of Class I Preferred Stock, otherwise than pursuant to a purchase
or exchange offer made on the same terms to all holders of shares of Class I
Preferred Stock.
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(d) If the Corporation shall redeem shares of Class I
Preferred Stock pursuant to paragraph (a) of this Section 5, notice of such
redemption shall be given to each holder of record of the shares to be redeemed.
Such notice shall be provided by first class mail, postage prepaid, at such
holder's address as the same appears on the stock records of the Corporation.
Neither the failure to mail any notice required by this paragraph (d), nor any
defect therein or in the mailing thereof to any particular holder, shall affect
the sufficiency of the notice or the validity of the proceedings for redemption
with respect to the other holders. Any notice which was mailed in the manner
herein provided shall be conclusively presumed to have been duly given on the
date mailed whether or not the holder receives the notice. Each such notice
shall state, as appropriate: (1) the Redemption Date; (2) the number of shares
of Class I Preferred Stock to be redeemed and, if fewer than all such shares
held by such holder are to be redeemed, the number of such shares to be redeemed
from such holder; (3) the place or places at which certificates for such shares
are to be surrendered for cash; and (4) the redemption price payable on such
Redemption Date, including, without limitation, a statement as to whether or not
accumulated, accrued and unpaid dividends will be (x) payable as part of the
redemption price, or (y) payable on the next Dividend Payment Date to the record
holder at the close of business on the relevant record date as described in the
next succeeding sentence. Notice having been mailed as aforesaid, from and after
the Redemption Date (unless the Corporation shall fail to make available the
amount of cash necessary to effect such redemption), (i) dividends on the shares
of Class I Preferred Stock so called for redemption shall cease to accumulate or
accrue on the shares of Class I Preferred Stock called for redemption, (ii) said
shares shall no longer be deemed to be outstanding, and (iii) all rights of the
holders thereof as holders of Class I Preferred Stock of the Corporation shall
cease except the rights to receive the cash payable upon such redemption,
without interest thereon, upon surrender and endorsement of their certificates
if so required; provided, however, that if the Redemption Date for any shares of
Class I Preferred Stock occurs after any dividend record date and on or prior to
the related Dividend Payment Date, the full dividend payable on such Dividend
Payment Date in respect of such shares of Class I Preferred Stock called for
redemption shall be payable on such Dividend Payment Date to the holders of
record of such shares at the close of business on the corresponding dividend
record date notwithstanding the prior redemption of such shares. The
Corporation's obligation to make available the redemption price in accordance
with the preceding sentence shall be deemed fulfilled if, on or before the
applicable Redemption Date, the Corporation shall irrevocably deposit in trust
with a bank or trust company (which may not be an affiliate of the Corporation)
that has, or is an affiliate of a bank or trust company that has, a capital and
surplus of at least $50,000,000, such amount of cash as is necessary for such
redemption plus, if such Redemption Date occurs after any dividend record date
and on or prior to the related Dividend Payment Date, such amount of cash as is
necessary to pay the dividend payable on such Dividend Payment Date in respect
of such shares of Class I Preferred Stock called for redemption, with
irrevocable instructions that such cash be applied to the redemption of the
shares of Class I Preferred Stock so called for redemption and, if applicable,
the payment of such dividend. No interest shall accrue for the benefit of the
holders of shares of Class
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I Preferred Stock to be redeemed on any cash so set aside by the Corporation.
Subject to applicable escheat laws, any such cash unclaimed at the end of two
years from the Redemption Date shall revert to the general funds of the
Corporation, after which reversion the holders of shares of Class I Preferred
Stock so called for redemption shall look only to the general funds of the
Corporation for the payment of such cash.
As promptly as practicable after the surrender in accordance with such
notice of the certificates for any such shares of Class I Preferred Stock to be
so redeemed (properly endorsed or assigned for transfer, if the Corporation
shall so require and the notice shall so state), such certificates shall be
exchanged for cash (without interest thereon) for which such shares have been
redeemed in accordance with such notice. If fewer than all the outstanding
shares of Class I Preferred Stock are to be redeemed, shares to be redeemed
shall be selected by the Corporation from outstanding shares of Class I
Preferred Stock not previously called for redemption by lot or, with respect to
the number of shares of Class I Preferred Stock held of record by each holder of
such shares, pro rata (as nearly as may be) or by any other method as may be
determined by the Board of Directors in its discretion to be equitable. If fewer
than all the shares of Class I Preferred Stock represented by any certificate
are redeemed, then a new certificate representing the unredeemed shares shall be
issued without cost to the holders thereof.
6. STATUS OF REACQUIRED STOCK.
All shares of Class I Preferred Stock which shall have been issued and
reacquired in any manner by the Corporation shall be returned to the status of
authorized, but unissued shares of Class I Preferred Stock.
7. RANKING.
Any class or series of capital stock of the Corporation shall be deemed
to rank:
(a) prior or senior to the Class I Preferred Stock, as to the
payment of dividends and as to distribution of assets upon liquidation,
dissolution or winding up, if the holders of such class or series shall be
entitled to the receipt of dividends and of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in preference or
priority to the holders of Class I Preferred Stock ("Senior Stock");
(b) on a parity with the Class I Preferred Stock, as to the
payment of dividends and as to distribution of assets upon liquidation,
dissolution or winding up, whether or not the dividend rates, dividend payment
dates or redemption or liquidation prices per share thereof be different from
those of the Class I Preferred Stock, if (i) such capital stock is Class B
Cumulative Convertible Preferred Stock, Class C Cumulative Preferred Stock,
Class D Cumulative Preferred Stock, Class G Cumulative Preferred Stock, Class H
Cumulative Preferred Stock, Class J Cumulative Convertible Preferred Stock or
Class K Convertible Cumulative Preferred Stock of the
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Corporation, or (ii) the holders of such class of stock or series and the Class
I Preferred Stock shall be entitled to the receipt of dividends and of amounts
distributable upon liquidation, dissolution or winding up in proportion to
their respective amounts of accrued and unpaid dividends per share or
liquidation preferences, without preference or priority of one over the other
(the capital stock referred to in clauses (i) and (ii) of this paragraph being
hereinafter referred to, collectively, as "Parity Stock"); and
(c) junior to the Class I Preferred Stock, as to the payment
of dividends and as to the distribution of assets upon liquidation, dissolution
or winding up, if (i) such capital stock or series shall be Common Stock or (ii)
the holders of Class I Preferred Stock shall be entitled to receipt of dividends
or of amounts distributable upon liquidation, dissolution or winding up, as the
case may be, in preference or priority to the holders of shares of such class or
series (the capital stock referred to in clauses (i) and (ii) of this paragraph
being hereinafter referred to, collectively, as "Junior Stock").
8. VOTING.
(a) If and whenever six quarterly dividends (whether or not
consecutive) payable on the Class I Preferred Stock or any series or class of
Parity Stock shall be in arrears (which shall, with respect to any such
quarterly dividend, mean that any such dividend has not been paid in full),
whether or not earned or declared, the number of directors then constituting the
Board of Directors shall be increased by two (if not already increased by reason
of similar types of provisions with respect to shares of Parity Stock of any
other class or series which is entitled to similar voting rights (the "Voting
Preferred Stock")) and the holders of shares of Class I Preferred Stock,
together with the holders of shares of all other Voting Preferred Stock then
entitled to exercise similar voting rights, voting as a single class regardless
of series, shall be entitled to elect the two additional directors to serve on
the Board of Directors at any annual meeting of stockholders or special meeting
held in place thereof, or at a special meeting of the holders of the Class I
Preferred Stock and the Voting Preferred Stock called as hereinafter provided.
Whenever all arrears in dividends on the Class I Preferred Stock and the Voting
Preferred Stock then outstanding shall have been paid and dividends thereon for
the current quarterly dividend period shall have been declared and paid, or
declared and set apart for payment, then the right of the holders of the Class I
Preferred Stock and the Voting Preferred Stock to elect such additional two
directors shall cease (but subject always to the same provision for the vesting
of such voting rights in the case of any similar future arrearages), and the
terms of office of all persons elected as directors by the holders of the Class
I Preferred Stock and the Voting Preferred Stock shall forthwith terminate and
the number of directors constituting the Board of Directors shall be reduced
accordingly. At any time after such voting power shall have been so vested in
the holders of Class I Preferred Stock and the Voting Preferred Stock, if
applicable, the Secretary of the Corporation may, and upon the written request
of any holder of
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Class I Preferred Stock (addressed to the Secretary at the principal office of
the Corporation) shall, call a special meeting of the holders of the Class I
Preferred Stock and of the Voting Preferred Stock for the election of the two
directors to be elected by them as herein provided, such call to be made by
notice similar to that provided in the Bylaws of the Corporation for a special
meeting of the stockholders or as required by law. If any such special meeting
required to be called as above provided shall not be called by the Secretary
within 20 days after receipt of any such request, then any holder of Class I
Preferred Stock may call such meeting, upon the notice above provided, and for
that purpose shall have access to the stock books of the Corporation. The
directors elected at any such special meeting shall hold office until the next
annual meeting of the stockholders or special meeting held in lieu thereof if
such office shall not have previously terminated as above provided. If any
vacancy shall occur among the directors elected by the holders of the Class I
Preferred Stock and the Voting Preferred Stock, a successor shall be elected by
the Board of Directors, upon the nomination of the then-remaining director
elected by the holders of the Class I Preferred Stock and the Voting Preferred
Stock or the successor of such remaining director, to serve until the next
annual meeting of the stockholders or special meeting held in place thereof if
such office shall not have previously terminated as provided above.
(b) So long as any shares of Class I Preferred Stock are
outstanding, in addition to any other vote or consent of stockholders required
by law or by the Charter of the Corporation, the affirmative vote of at least
66-2/3% of the votes entitled to be cast by the holders of the Class I Preferred
Stock voting as a single class with the holders of all other classes or series
of Parity Stock entitled to vote on such matters, given in person or by proxy,
either in writing without a meeting or by vote at any meeting called for the
purpose, shall be necessary for effecting or validating:
(i) Any amendment, alteration or repeal of any of the
provisions of, or the addition of any provision to, these Articles
Supplementary, the Charter or the By-Laws of the Corporation that materially
adversely affects the voting powers, rights or preferences of the holders of the
Class I Preferred Stock; provided, however, that the amendment of or supplement
to the provisions of the Charter so as to authorize or create, or to increase or
decrease the authorized amount of, or to issue any Junior Stock, Class I
Preferred Stock or any shares of any class of Parity Stock shall not be deemed
to materially adversely affect the voting powers, rights or preferences of the
holders of Class I Preferred Stock; or
(ii) The authorization, creation of, increase in the
authorized amount of, or issuance of any shares of any class or series of Senior
Stock or any security convertible into shares of any class or series of Senior
Stock (whether or not such class or series of Senior Stock is currently
authorized);
provided, however, that no such vote of the holders of Class I Preferred Stock
shall be required if, at or prior to the time when such amendment, alteration or
repeal is to
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take effect, or when the issuance of any such Senior Stock or convertible or
exchangeable security is to be made, as the case may be, provision is made for
the redemption of all shares of Class I Preferred Stock at the time outstanding
to the extent such redemption is authorized by Section 5 of this Article.
For purposes of the foregoing provisions and all other voting rights
under these Articles Supplementary, each share of Class I Preferred Stock shall
have one (1) vote per share, except that when any other class or series of
preferred stock of the Corporation shall have the right to vote with the Class I
Preferred Stock as a single class on any matter, then the Class I Preferred
Stock and such other class or series shall have with respect to such matters one
quarter of one vote per $25 of stated liquidation preference. Except as
otherwise required by applicable law or as set forth herein or in the Charter,
the Class I Preferred Stock shall not have any relative, participating, optional
or other special voting rights and powers other than as set forth herein, and
the consent of the holders thereof shall not be required for the taking of any
corporate action.
9. RECORD HOLDERS.
The Corporation and the Transfer Agent may deem and treat the record
holder of any share of Class I Preferred Stock as the true and lawful owner
thereof for all purposes, and neither the Corporation nor the Transfer Agent
shall be affected by any notice to the contrary.
10. RESTRICTIONS ON OWNERSHIP AND TRANSFERS.
(a) (i) LIMITATION ON BENEFICIAL OWNERS. Except as provided in Section
10(h), from and after the Issue Date, no Person (other than the Initial Holder
or a Look-Through Entity) shall Beneficially Own shares of Class I Preferred
Stock in excess of the Ownership Limit, the Initial Holder shall not
Beneficially Own shares of Class I Preferred Stock in excess of the Initial
Holder Limit and no Look-Through Entity shall Beneficially Own shares of Class I
Preferred Stock in excess of the Look-Through Ownership Limit.
(ii) TRANSFERS IN EXCESS OF OWNERSHIP LIMIT. Except as provided in
Section 10(h), from and after the Issue Date (and subject to Section 10(l)), any
Transfer (whether or not such Transfer is the result of transactions entered
into through the facilities of the NYSE or other securities exchange or an
automated inter-dealer quotation system) that, if effective, would result in any
Person (other than the Initial Holder or a Look-Through Entity) Beneficially
Owning shares of Class I Preferred Stock in excess of the Ownership Limit shall
be void ab initio as to the Transfer of such shares of Class I Preferred Stock
that would be otherwise Beneficially Owned by such Person in excess of the
Ownership Limit, and the intended transferee shall acquire no rights in such
shares of Class I Preferred Stock.
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(iii) TRANSFERS IN EXCESS OF INITIAL HOLDER LIMIT. Except as
provided in Section 10(h), from and after the Issue Date (and subject to Section
10(l)), any Transfer (whether or not such Transfer is the result of transactions
entered into through the facilities of the NYSE or other securities exchange or
an automated inter-dealer quotation system) that, if effective, would result in
the Initial Holder Beneficially Owning shares of Class I Preferred Stock in
excess of the Initial Holder Limit shall be void ab initio as to the Transfer of
such shares of Class I Preferred Stock that would be otherwise Beneficially
Owned by the Initial Holder in excess of the Initial Holder Limit, and the
Initial Holder shall acquire no rights in such shares of Class I Preferred
Stock.
(iv) TRANSFERS IN EXCESS OF LOOK-THROUGH OWNERSHIP LIMIT. Except as
provided in Section 10(h) from and after the Issue Date (and subject to Section
10(l)), any Transfer (whether or not such Transfer is the result of transactions
entered into through the facilities of the NYSE or other securities exchange or
an automated inter-dealer quotation system) that, if effective, would result in
any Look-Through Entity Beneficially Owning shares of Class I Preferred Stock in
excess of the Look-Through Ownership Limit shall be void ab initio as to the
Transfer of such shares of Class I Preferred Stock that would be otherwise
Beneficially Owned by such Look-Through Entity in excess of the Look-Through
Ownership Limit and such Look-Through Entity shall acquire no rights in such
shares of Class I Preferred Stock.
(v) TRANSFERS RESULTING IN "CLOSELY HELD" SHARES. From and after
the Issue Date, any Transfer that, if effective would result in the Corporation
being "closely held" within the meaning of Section 856(h) of the Code, or would
otherwise result in the Corporation failing to qualify as a REIT (including,
without limitation, a Transfer or other event that would result in the
Corporation owning (directly or constructively) an interest in a tenant that is
described in Section 856(d)(2)(B) of the Code if the income derived by the
Corporation from such tenant would cause the Corporation to fail to satisfy any
of the gross income requirements of Section 856(c) of the Code) shall be void ab
initio as to the Transfer of shares of Class I Preferred Stock that would cause
the Corporation (i) to be "closely held" within the meaning of Section 856(h) of
the Code or (ii) otherwise fail to qualify as a REIT, as the case may be, and
the intended transferee shall acquire no rights in such shares of Class I
Preferred Stock.
(vi) SEVERABILITY ON VOID TRANSACTIONS. A Transfer of a share of
Class I Preferred Stock that is null and void under Sections 10(a)(ii), (iii),
(iv), or (v) of this Article because it would, if effective, result in (i) the
ownership of Class I Preferred Stock in excess of the Initial Holder Limit, the
Ownership Limit, or the Look-Through Ownership Limit, (ii) the Corporation being
"closely held" within the meaning of Section 856(h) of the Code or (iii) the
Corporation otherwise failing to qualify as a REIT, shall not adversely affect
the validity of the Transfer of any other share of Class I Preferred Stock in
the same or any other related transaction.
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(b) REMEDIES FOR BREACH. If the Board of Directors shall at any time
determine in good faith that a Transfer or other event has taken place in
violation of Section 10(a) of this Article or that a Person intends to acquire
or has attempted to acquire Beneficial Ownership of any shares of Class I
Preferred Stock in violation of Section 10(a) of this Article (whether or not
such violation is intended), the Board of Directors shall be empowered to take
any action as it deems advisable to refuse to give effect to or to prevent such
Transfer or other event, including, but not limited to, refusing to give effect
to such Transfer or other event on the books of the Corporation, causing the
Corporation to redeem such shares at the then current Market Price and upon such
terms and conditions as may be specified by the Board of Directors in its sole
discretion (including, but not limited to, by means of the issuance of long-term
indebtedness for the purpose of such redemption), demanding the repayment of any
distributions received in respect of shares of Class I Preferred Stock acquired
in violation of Section 10(a) of this Article or instituting proceedings to
enjoin such Transfer or to rescind such Transfer or attempted Transfer;
provided, however, that any Transfers or attempted Transfers (or, in the case of
events other than a Transfer, Beneficial Ownership) in violation of Section
10(a) of this Article, regardless of any action (or non-action) by the Board of
Directors (a) shall be void ab initio or (b) shall automatically result in the
transfer described in Section 10(c) of this Article; provided, further, that the
provisions of this Section 10(b) shall be subject to the provisions of Section
10(l) of this Article; provided, further, that the Board of Directors may not
exercise such authority in a manner that interferes with any ownership or
transfer of Class I Preferred Stock that is expressly authorized pursuant to
Section 10(h)(iii) of this Article.
(c)(i) ESTABLISHMENT OF TRUST. If, notwithstanding the other provisions
contained in this Article, at any time after the Issue Date there is a purported
Transfer (an "Excess Transfer") (whether or not such Transfer is the result of
transactions entered into through the facilities of the NYSE or other securities
exchange or an automated inter-dealer quotation system) or other change in the
capital structure of the Corporation (including, but not limited to, any
redemption of Equity Stock) or other event (including, but not limited to, any
acquisition of any share of Equity Stock) such that (a) any Person (other than
the Initial Holder or a Look-Through Entity) would Beneficially Own shares of
Class I Preferred Stock in excess of the Ownership Limit, or (b) the Initial
Holder would Beneficially Own shares of Class I Preferred Stock in excess of the
Initial Holder Limit, or (c) any Person that is a Look-Through Entity would
Beneficially Own shares of Class I Preferred Stock in excess of the Look-Through
Ownership Limit (in any such event, the Person, Initial Holder or Look-Through
Entity that would Beneficially Own shares of Class I Preferred Stock in excess
of the Ownership Limit, the Initial Holder Limit or the Look-Through Entity
Limit, respectively, is referred to as a "Prohibited Transferee"), then, except
as otherwise provided in Section 10(h) of this Article, such shares of Class I
Preferred Stock in excess of the Ownership Limit, the Initial Holder Limit or
the Look-Through Ownership Limit, as the case may be, (rounded up to the nearest
whole share) shall be automatically transferred to a Trustee in his capacity as
trustee of a Trust for the
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exclusive benefit of one or more Charitable Beneficiaries. Such transfer to the
Trustee shall be deemed to be effective as of the close of business on the
Business Day prior to the Excess Transfer, change in capital structure or
another event giving rise to a potential violation of the Ownership Limit, the
Initial Holder Limit or the Look-Through Entity Ownership Limit.
(ii) APPOINTMENT OF TRUSTEE. The Trustee shall be appointed by the
Corporation and shall be a Person unaffiliated with either the Corporation or
any Prohibited Transferee. The Trustee may be an individual or a bank or trust
company duly licensed to conduct a trust business.
(iii) STATUS OF SHARES HELD BY THE TRUSTEE. Shares of Class I
Preferred Stock held by the Trustee shall be issued and outstanding shares of
capital stock of the Corporation. Except to the extent provided in Section
10(c)(v), the Prohibited Transferee shall have no rights in the Class I
Preferred Stock held by the Trustee, and the Prohibited Transferee shall not
benefit economically from ownership of any shares held in trust by the Trustee,
shall have no rights to dividends and shall not possess any rights to vote or
other rights attributable to the shares held in the Trust.
(iv) DIVIDEND AND VOTING RIGHTS. The Trustee shall have all voting
rights and rights to dividends with respect to shares of Class I Preferred Stock
held in the Trust, which rights shall be exercised for the benefit of the
Charitable Beneficiary. Any dividend or distribution paid prior to the discovery
by the Corporation that the shares of Class I Preferred Stock have been
transferred to the Trustee shall be repaid to the Corporation upon demand, and
any dividend or distribution declared but unpaid shall be rescinded as void ab
initio with respect to such shares of Class I Preferred Stock. Any dividends or
distributions so disgorged or rescinded shall be paid over to the Trustee and
held in trust for the Charitable Beneficiary. Any vote cast by a Prohibited
Transferee prior to the discovery by the Corporation that the shares of Class I
Preferred Stock have been transferred to the Trustee will be rescinded as void
ab initio and shall be recast in accordance with the desires of the Trustee
acting for the benefit of the Charitable Beneficiary. The owner of the shares at
the time of the Excess Transfer, change in capital structure or other event
giving rise to a potential violation of the Ownership Limit, Initial Holder
Limit or Look-Through Entity Ownership Limit shall be deemed to have given an
irrevocable proxy to the Trustee to vote the shares of Class I Preferred Stock
for the benefit of the Charitable Beneficiary.
(v) RESTRICTIONS ON TRANSFER. The Trustee of the Trust may sell the
shares held in the Trust to a Person, designated by the Trustee, whose ownership
of the shares will not violate the Ownership Restrictions. If such a sale is
made, the interest of the Charitable Beneficiary shall terminate and proceeds of
the sale shall be payable to the Prohibited Transferee and to the Charitable
Beneficiary as provided in this Section 10(c)(v). The Prohibited Transferee
shall receive the lesser of (1) the price paid by the Prohibited Transferee for
the shares or, if the Prohibited Transferee
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did not give value for the shares (through a gift, devise or other transaction),
the Market Price of the shares on the day of the event causing the shares to be
held in the Trust and (2) the price per share received by the Trustee from the
sale or other disposition of the shares held in the Trust. Any proceeds in
excess of the amount payable to the Prohibited Transferee shall be payable to
the Charitable Beneficiary. If any of the transfer restrictions set forth in
this Section 10(c)(v) or any application thereof is determined in a final
judgment to be void, invalid or unenforceable by any court having jurisdiction
over the issue, the Prohibited Transferee may be deemed, at the option of the
Corporation, to have acted as the agent of the Corporation in acquiring the
Class I Preferred Stock as to which such restrictions would, by their terms,
apply, and to hold such Class I Preferred Stock on behalf of the Corporation.
(vi) PURCHASE RIGHT IN STOCK TRANSFERRED TO TRUSTEE. Shares of
Class I Preferred Stock transferred to the Trustee shall be deemed to have been
offered for sale to the Corporation, or its designee, at a price per share equal
to the lesser of (i) the price per share in the transaction that resulted in
such transfer to the Trust (or, in the case of a devise or gift, the Market
Price at the time of such devise or gift) and (ii) the Market Price on the date
the Corporation, or its designee, accepts such offer. The Corporation shall have
the right to accept such offer for a period of 90 days after the later of (i)
the date of the Excess Transfer or other event resulting in a transfer to the
Trust and (ii) the date that the Board of Directors or a committee thereof
determines in good faith that an Excess Transfer or other event occurred.
(vii) REGISTRATION OF CHARITABLE BENEFICIARIES. By written notice
to the Trustee, the Corporation shall designate one or more nonprofit
organizations to be the Charitable Beneficiary of the interest in the Trust
relating to such Prohibited Transferee if (i) the shares of Class I Preferred
Stock held in the Trust would not violate the Ownership Restrictions in the
hands of such Charitable Beneficiary and (ii) each Charitable Beneficiary is an
organization described in Sections 170(b)(1)(A), 170(c)(2) and 501(c)(3) of the
Code.
(d) NOTICE OF RESTRICTED TRANSFER. Any Person that acquires or attempts
to acquire shares of Class I Preferred Stock in violation of Section 10(a) of
this Article, or any Person that is a Prohibited Transferee such that stock is
transferred to the Trustee under Section 10(c) of this Article, shall
immediately give written notice to the Corporation of such event and shall
provide to the Corporation such other information as the Corporation may request
in order to determine the effect, if any, of such Transfer or attempted Transfer
or other event on the Corporation's status as a REIT. Failure to give such
notice shall not limit the rights and remedies of the Board of Directors
provided herein in any way.
(e) OWNERS REQUIRED TO PROVIDE INFORMATION. From and after the Issue
Date certain record and Beneficial Owners and transferees of shares of Class I
Preferred Stock will be required to provide certain information as set out
below.
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(i) ANNUAL DISCLOSURE. Every record and Beneficial Owner of more
than 5% (or such other percentage between 0.5% and 5%, as provided in the
applicable regulations adopted under the Code) of the number of Outstanding
shares of Class I Preferred Stock shall, within 30 days after January 1 of each
year, give written notice to the Corporation stating the name and address of
such record or Beneficial Owner, the number of shares of Class I Preferred Stock
Beneficially Owned, and a full description of how such shares are held. Each
such record or Beneficial Owner of Class I Preferred Stock shall, upon demand by
the Corporation, disclose to the Corporation in writing such additional
information with respect to the Beneficial Ownership of the Class I Preferred
Stock as the Board of Directors, in its sole discretion, deems appropriate or
necessary to (i) comply with the provisions of the Code regarding the
qualification of the Corporation as a REIT under the Code and (ii) ensure
compliance with the Ownership Limit, the Initial Holder Limit or the
Look-Through Ownership Limit, as applicable. Each stockholder of record,
including without limitation any Person that holds shares of Class I Preferred
Stock on behalf of a Beneficial Owner, shall take all reasonable steps to obtain
the written notice described in this Section 10(e) from the Beneficial Owner.
(ii) DISCLOSURE AT THE REQUEST OF THE CORPORATION. Any Person that
is a Beneficial Owner of shares of Class I Preferred Stock and any Person
(including the stockholder of record) that is holding shares of Class I
Preferred Stock for a Beneficial Owner, and any proposed transferee of shares,
shall provide such information as the Corporation, in its sole discretion, may
request in order to determine the Corporation's status as a REIT, to comply with
the requirements of any taxing authority or other governmental agency, to
determine any such compliance or to ensure compliance with the Ownership Limit,
the Initial Holder Limit and the Look-Through Ownership Limit, and shall provide
a statement or affidavit to the Corporation setting forth the number of shares
of Class I Preferred Stock already Beneficially Owned by such stockholder or
proposed transferee and any related persons specified, which statement or
affidavit shall be in the form prescribed by the Corporation for that purpose.
(f) REMEDIES NOT LIMITED. Nothing contained in this Article shall limit
the authority of the Board of Directors to take such other action as it deems
necessary or advisable (subject to the provisions of Section 10(l) of this
Article) (i) to protect the Corporation and the interests of its stockholders in
the preservation of the Corporation's status as a REIT and (ii) to insure
compliance with the Ownership Limit, the Initial Holder Limit and the
Look-Through Ownership Limit.
(g) AMBIGUITY. In the case of an ambiguity in the application of any of
the provisions of Section 10 of this Article, or in the case of an ambiguity in
any definition contained in Section 10 of this Article, the Board of Directors
shall have the power to determine the application of the provisions of this
Article with respect to any situation based on its reasonable belief,
understanding or knowledge of the circumstances.
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(h) EXCEPTIONS. The following exceptions shall apply or may be
established with respect to the limitations of Section 10(a) of this Article.
(i) WAIVER OF OWNERSHIP LIMITS. The Board of Directors, upon
receipt of a ruling from the Internal Revenue Service or an opinion of tax
counsel or other evidence or undertaking acceptable to it, may waive the
application, in whole or in part, of the Ownership Limit to a Person subject to
the Ownership Limit, if such person is not an individual for purposes of Section
542(a) of the Code and is a corporation, partnership, estate or trust. In
connection with any such exemption, the Board of Directors may require such
representations and undertakings from such Person and may impose such other
conditions as the Board of Directors deems necessary, in its sole discretion, to
determine the effect, if any, of the proposed Transfer on the Corporation's
status as a REIT.
(ii) PLEDGE BY INITIAL HOLDER. Notwithstanding any other provision
of this Article, the pledge by the Initial Holder of all or any portion of the
Class I Preferred Stock directly owned at any time or from time to time shall
not constitute a violation of Section 10(a) of this Article and the pledgee
shall not be subject to the Ownership Limit with respect to the Class I
Preferred Stock so pledged to it either as a result of the pledge or upon
foreclosure.
(iii) UNDERWRITERS. For a period of 270 days (or such longer period
of time as any underwriter described below shall hold an unsold allotment of
Class I Preferred Stock) following the purchase of Class I Preferred Stock by an
underwriter that (i) is a corporation, partnership or other legal entity and
(ii) participates in an offering of the Class I Preferred Stock, such
underwriter shall not be subject to the Ownership Limit with respect to the
Class I Preferred Stock purchased by it as a part of or in connection with such
offering and with respect to any Class I Preferred Stock purchased in connection
with market making activities.
(i) LEGEND. Each certificate for Class I Preferred Stock shall bear
substantially the following legend:
"The shares of Class I Cumulative Preferred Stock represented
by this certificate are subject to restrictions on transfer. No person
may Beneficially Own shares of Class I Cumulative Preferred Stock in
excess of the Ownership Restrictions, as applicable, with certain
further restrictions and exceptions set forth in the Charter (including
the Articles Supplementary setting forth the terms of the Class I
Cumulative Preferred Stock). Any Person that attempts to Beneficially
Own shares of Class I Cumulative Preferred Stock in excess of the
applicable limitation must immediately notify the Corporation. All
capitalized terms in this legend have the meanings ascribed to such
terms in the Charter (including the Articles Supplementary setting
forth the terms of the Class I Cumulative Preferred
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Stock), as the same may be amended from time to time, a copy of which,
including the restrictions on transfer, will be sent without charge to
each stockholder that so requests. If the restrictions on transfer are
violated (i) the transfer of the shares of Class I Cumulative Preferred
Stock represented hereby will be void in accordance with the Charter
(including the Articles Supplementary setting forth the terms of the
Class I Cumulative Preferred Stock) or (ii) the shares of Class I
Cumulative Preferred Stock represented hereby will automatically be
transferred to a Trustee of a Trust for the benefit of one or more
Charitable Beneficiaries."
(j) SEVERABILITY. If any provision of this Article or any application
of any such provision is determined in a final and unappealable judgment to be
void, invalid or unenforceable by any Federal or state court having jurisdiction
over the issues, the validity and enforceability of the remaining provisions
shall not be affected and other applications of such provision shall be affected
only to the extent necessary to comply with the determination of such court.
(k) BOARD OF DIRECTORS DISCRETION. Anything in this Article to the
contrary notwithstanding, the Board of Directors shall be entitled to take or
omit to take such actions as it in its discretion shall determine to be
advisable in order that the Corporation maintain its status as and continue to
qualify as a REIT, including, but not limited to, reducing the Ownership Limit,
the Initial Holder Limit and the Look-Through Ownership Limit in the event of a
change in law.
(l) SETTLEMENT. Nothing in this Section 10 of this Article shall be
interpreted to preclude the settlement of any transaction entered into through
the facilities of the NYSE or other securities exchange or an automated
inter-dealer quotation system.
FOURTH: The terms of the Class I Cumulative Preferred Stock set forth
in Article Third hereof shall become Article XXII of the Charter.
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IN WITNESS WHEREOF, the Corporation has caused these presents to be
signed in its name and on its behalf by its Senior Vice President and Chief
Financial Officer and witnessed by its Assistant Secretary on April 21, 1999.
WITNESS: APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
/s/ LESLIE OBLAS /s/ JOEL BONDER
- ------------------------------ ---------------------------------
Leslie Oblas
Assistant Secretary Senior Vice President and
Chief Financial Officer
THE UNDERSIGNED, Senior Vice President and Chief Financial Officer of
APARTMENT INVESTMENT AND MANAGEMENT COMPANY, who executed on behalf of the
Corporation the Articles Supplementary of which this Certificate is made a part,
hereby acknowledges in the name and on behalf of said Corporation the foregoing
Articles Supplementary to be the corporate act of said Corporation and hereby
certifies that the matters and facts set forth herein with respect to the
authorization and approval thereof are true in all material respects under the
penalties of perjury.
/s/ JOEL BONDER
---------------------------------
Senior Vice President and
Chief Financial Officer
<PAGE> 246
ARTICLES SUPPLEMENTARY
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
CLASS L CONVERTIBLE CUMULATIVE PREFERRED STOCK
(PAR VALUE $.01 PER SHARE)
APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation
(hereinafter called the "Corporation"), having its principal office in Baltimore
City, Maryland, hereby certifies to the Department of Assessments and Taxation
of the State of Maryland that:
FIRST: Pursuant to authority expressly vested in the Board of Directors
of the Corporation by Section 1.2 of Article IV of the Charter of the
Corporation, as amended to date (the "Charter"), the Board of Directors has duly
divided and classified 5,000,000 authorized but unissued shares of Class A
Common Stock of the Corporation, par value $.01 per share (the "Class A Common
Stock"), into a class designated as Class L Convertible Cumulative Preferred
Stock, par value $.01 per share, and has provided for the issuance of such
class.
SECOND: The reclassification increases the number of shares classified
as Class L Convertible Cumulative Preferred Stock, par value $.01 per share,
from no shares immediately prior to the reclassification to 5,000,000 shares
immediately after the reclassification. The reclassification decreases the
number of shares classified as Class A Common Stock from 480,937,500 shares
immediately prior to the reclassification to 475,937,500 shares immediately
after the reclassification.
THIRD: The terms of the Class L Convertible Cumulative Preferred Stock
(including the preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends and other distributions,
qualifications, or terms or conditions of redemption) as set by the Board of
Directors are as follows:
1. NUMBER OF SHARES AND DESIGNATION.
This class of Preferred Stock shall be designated as Class L
Convertible Cumulative Preferred Stock, par value $.01 per share (the "Class L
Preferred Stock"), and Five Million (5,000,000) shall be the authorized number
of shares of such Class L Preferred Stock constituting such class.
2. DEFINITIONS.
For purposes of the Class L Preferred Stock, the following terms shall
have the meanings indicated:
<PAGE> 247
"Act" shall mean the Securities Act of 1933, as amended.
"affiliate" of a Person means a Person that directly, or indirectly
through one or more intermediaries, controls or is controlled by, or is
under common control with, the Person specified.
"Aggregate Value" shall mean, with respect to any block of Equity
Stock, the sum of the products of (i) the number of shares of each
class of Equity Stock within such block multiplied by (ii) the
corresponding Market Price of one share of Equity Stock of such class.
"Beneficial Ownership" shall mean, with respect to any Person,
ownership of shares of Equity Stock equal to the sum of (i) the number
of shares of Equity Stock directly owned by such Person, (ii) the
number of shares of Equity Stock indirectly owned by such Person (if
such Person is an "individual" as defined in Section 542(a)(2) of the
Code) taking into account the constructive ownership rules of Section
544 of the Code, as modified by Section 856(h)(1)(B) of the Code, and
(iii) the number of shares of Equity Stock that such Person is deemed
to beneficially own pursuant to Rule 13d-3 under the Exchange Act or
that is attributed to such Person pursuant to Section 318 of the Code,
as modified by Section 856(d)(5) of the Code, provided that when
applying this definition of Beneficial Ownership to the Initial Holder,
clause (iii) of this definition, and clause (a) (ii) of the definition
of "Person" shall be disregarded. The terms "Beneficial Owner,"
"Beneficially Owns" and "Beneficially Owned" shall have the correlative
meanings.
"Board of Directors" shall mean the Board of Directors of the
Corporation or any committee authorized by such Board of Directors to
perform any of its responsibilities with respect to the Class L
Preferred Stock; provided that, for purposes of paragraph (a) of
Section 9 of this Article, the term "Board of Directors" shall not
include any such committee.
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which state or federally chartered banking institutions in New
York, New York are not required to be open.
"Charitable Beneficiary" shall mean one or more beneficiaries of the
Trust as determined pursuant to Section 11.3 of this Article, each of
which shall be an organization described in Section 170(b)(1)(A),
170(c)(2) and 501(c)(3) of the Code.
"Class L Preferred Stock" shall have the meaning set forth in Section 1
of this Article.
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"Closing Price" shall mean, when used with respect to a share of any
Equity Stock and for any date, the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing
bid and asked prices, regular way, in either case, as reported in the
principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the NYSE or, if the Equity
Stock is not listed or admitted to trading on the NYSE, as reported in
the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on
which the Equity Stock is listed or admitted to trading or, if the
Equity Stock is not listed or admitted to trading on any national
securities exchange, the last quoted price, or if not so quoted, the
average of the high bid and low asked prices in the over-the-counter
market, as reported by the National Association of Securities Dealers,
Inc. Automated Quotation System or, if such system is no longer in use,
the principal other automated quotation system that may then be in use
or, if the Equity Stock is not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Equity Stock selected
by the Board of Directors of the Corporation.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, or any successor statute thereto. Reference to any
provision of the Code shall mean such provision as in effect from time
to time, as the same may be amended, and any successor thereto, as
interpreted by any applicable regulations or other administrative
pronouncements as in effect from time to time.
"Common Stock" shall mean the Class A Common Stock, $.01 par value per
share, of the Corporation and such other shares of the Corporation's
capital stock into which outstanding shares of such Class A Common
Stock shall be reclassified.
"Conversion Price" shall mean the conversion price per share of Class A
Common Stock for which each share of Class L Preferred Stock is
convertible, as such Conversion Price may be adjusted pursuant to
Section 7 of this Article. The initial Conversion Price shall be $46.48
(equivalent to a conversion rate of 0.5379 shares of Class A Common
Stock for each share of Class L Preferred Stock).
"Dividend Payment Date" shall mean February 28, May 28, August 28, and
November 28 of each year; provided, that if any Dividend Payment Date
falls on any day other than a Business Day, the dividend payment
payable on such Dividend Payment Date shall be paid on the Business Day
immediately following such Dividend Payment Date and no interest shall
accrue on such dividend from such date to such Dividend Payment Date.
3
<PAGE> 249
"Dividend Periods" shall mean the Initial Dividend Period and each
subsequent quarterly dividend period commencing on and including
February 28, May 28, August 28, and November 28 of each year and ending
on and including the day preceding the first day of the next succeeding
Dividend Period, other than the Dividend Period during which any Class
L Preferred Stock shall be redeemed pursuant to Section 5 hereof, which
shall end on and include the Optional Redemption Date or Mandatory
Redemption Date, as applicable, with respect to the Class L Preferred
Stock being redeemed.
"Equity Stock" shall mean one or more shares of any class of capital
stock of the Corporation.
"Excess Transfer" has the meaning set forth in Section 11.3(A) of this
Article.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Issue Date" shall mean May 28, 1999.
"Initial Dividend Period" shall mean the period commencing on and
including the Issue Date and ending on and including August 27, 1999.
"Initial Holder" shall mean Terry Considine.
"Initial Holder Limit" shall mean a number of the Outstanding shares of
Class L Preferred Stock of the Corporation having an Aggregate Value
not in excess of the excess of (x) 15% of the Aggregate Value of all
Outstanding shares of Equity Stock over (y) the Aggregate Value of all
shares of Equity Stock other than Class L Preferred Stock that are
Beneficially Owned by the Initial Holder. From the Issue Date, the
secretary of the Corporation, or such other person as shall be
designated by the Board of Directors, shall upon request make available
to the representative(s) of the Initial Holder and the Board of
Directors, a schedule that sets forth the then-current Initial Holder
Limit applicable to the Initial Holder.
"Junior Stock" shall have the meaning set forth in paragraph (c) of
Section 8 of this Article.
"Liquidation Preference" shall have the meaning set forth in paragraph
(a) of Section 4 of this Article.
"Look-Through Entity" shall mean a Person that is either (i) described
in Section 401(a) of the Code as provided under Section 856(h)(3) of
the Code or (ii) registered under the Investment Company Act of 1940.
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"Look-Through Ownership Limit" shall mean, for any Look-Through Entity,
a number of the Outstanding shares of Class L Preferred Stock of the
Corporation having an Aggregate Value not in excess of the excess of
(x) 15% of the Aggregate Value of all Outstanding shares of Equity
Stock over (y) the Aggregate Value of all shares of Equity Stock other
than Class L Preferred Stock that are Beneficially Owned by the
Look-Through Entity.
"Market Price" on any date shall mean, with respect to any share of
Equity Stock, the Closing Price of a share of that class of Equity
Stock on the Trading Day immediately preceding such date.
"NYSE" shall mean the New York Stock Exchange, Inc.
"Outstanding" shall mean issued and outstanding shares of Equity Stock
of the Corporation, provided that for purposes of the application of
the Ownership Limit, the Look-Through Ownership Limit or the Initial
Holder Limit to any Person, the term "Outstanding" shall be deemed to
include the number of shares of Equity Stock that such Person alone, at
that time, could acquire pursuant to any options or convertible
securities.
"Ownership Limit" shall mean, for any Person other than the Initial
Holder or a Look-Through Entity, a number of the Outstanding shares of
Class L Preferred Stock of the Corporation having an Aggregate Value
not in excess of the excess of (x) 8.7% of the Aggregate Value of all
Outstanding shares of Equity Stock over (y) the Aggregate Value of all
shares of Equity Stock other than Class L Preferred Stock that are
Beneficially Owned by the Person.
"Ownership Restrictions" shall mean collectively the Ownership Limit,
as applied to Persons other than the Initial Holder or Look-Through
Entities, the Initial Holder Limit, as applied to the Initial Holder,
and the Look-Through Ownership Limit, as applied to Look-Through
Entities.
"Parity Stock" shall have the meaning set forth in paragraph (b) of
Section 8 of this Article.
"Person" shall mean (a) for purposes of Section 11 of this Article, (i)
an individual, corporation, partnership, estate, trust (including a
trust qualifying under Section 401(a) or 501(c) of the Code),
association, "private foundation," within the meaning of Section 509(a)
of the Code, joint stock company or other entity, and (ii) a "group,"
as that term is used for purposes of Section 13(d)(3) of the Exchange
Act, and (b) for purposes of the remaining Sections of this Article,
any individual, firm, partnership, corporation or other entity,
including any successor (by merger or otherwise) of such entity.
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"Prohibited Transferee" has the meaning set forth in Section 11.3(A) of
this Article.
"Record Date" shall have the meaning set forth in paragraph (a) of
Section 3 of this Article.
"Redemption Date" shall mean, in the case of any redemption of any
shares of Class L Preferred Stock, the date fixed for redemption of
such shares.
"Redemption Price" shall mean, with respect to any shares of Class L
Preferred Stock to be redeemed, (i) if the Redemption Date occurs
during the period from and including May 28, 2002, to but excluding May
27, 2003, 102.025% of the Liquidation Preference thereof, and (ii) if
the Redemption Date occurs on or after May 28, 2003, 100.000% of the
Liquidation Preference thereof, plus, in the case of clause (i) or
(ii), all accumulated, accrued and unpaid dividends (whether or not
earned or declared), if any, to the Redemption Date; provided, however,
that if a Redemption Date occurs after a dividend record date and on or
prior to the related Dividend Payment Date, the dividend payable on
such Dividend Payment Date in respect of such shares called for
redemption shall be payable on such Dividend Payment Date to the
holders of record at the close of business on such dividend record date
notwithstanding the redemption of such shares, and shall not be payable
as part of the redemption price for such shares.
"REIT" shall mean a "real estate investment trust," as defined in
Section 856 of the Code.
"Senior Stock" shall have the meaning set forth in paragraph (a) of
Section 8 of this Article.
"set apart for payment" shall be deemed to include, without any action
other than the following, the recording by the Corporation in its
accounting ledgers of any accounting or bookkeeping entry which
indicates, pursuant to a declaration of dividends or other distribution
by the Board of Directors, the allocation of funds to be so paid on any
series or class of capital stock of the Corporation; provided, however,
that if any funds for any class or series of Junior Stock or any class
or series of Parity Stock are placed in a separate account of the
Corporation or delivered to a disbursing, paying or other similar
agent, then "set apart for payment" with respect to the Class L
Preferred Stock shall mean placing such funds in a separate account or
delivering such funds to a disbursing, paying or other similar agent.
"Trading Day" shall mean, when used with respect to any Equity Stock,
(i) if the Equity Stock is listed or admitted to trading on the NYSE, a
day on which the NYSE is open for the transaction of business, (ii) if
the Equity Stock is not
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listed or admitted to trading on the NYSE but is listed or admitted to
trading on another national securities exchange or automated quotation
system, a day on which the principal national securities exchange or
automated quotation system, as the case may be, on which the Equity
Stock is listed or admitted to trading is open for the transaction of
business, or (iii) if the Equity Stock is not listed or admitted to
trading on any national securities exchange or automated quotation
system, any day other than a Saturday, a Sunday or a day on which
banking institutions in the State of New York are authorized or
obligated by law or executive order to close.
"Transfer" shall mean any sale, transfer, gift, assignment, devise or
other disposition of a share of Class L Preferred Stock (including (i)
the granting of an option or any series of such options or entering
into any agreement for the sale, transfer or other disposition of Class
L Preferred Stock or (ii) the sale, transfer, assignment or other
disposition of any securities or rights convertible into or
exchangeable for Class L Preferred Stock), whether voluntary or
involuntary, whether of record or Beneficial Ownership, and whether by
operation of law or otherwise (including, but not limited to, any
transfer of an interest in other entities that results in a change in
the Beneficial Ownership of shares of Class L Preferred Stock). The
term "Transfers" and "Transferred" shall have correlative meanings.
"Transfer Agent" means such transfer agent as may be designated by the
Board of Directors or their designee as the transfer agent for the
Class L Preferred Stock; provided, that if the Corporation has not
designated a transfer agent then the Corporation shall act as the
transfer agent for the Class L Preferred Stock.
"Trust" shall mean the trust created pursuant to Section 11.3 of this
Article.
"Trustee" shall mean the Person unaffiliated with either the
Corporation or the Prohibited Transferee that is appointed by the
Corporation to serve as trustee of the Trust.
"Voting Preferred Stock" shall have the meaning set forth in Section 9
of this Article.
3. DIVIDENDS.
(a) The holders of Class L Preferred Stock shall be entitled
to receive, when and as declared by the Board of Directors, out of funds legally
available for that purpose, quarterly cash dividends on the Class L Preferred
Stock in an amount per share equal to (i) during the period from the Issue Date
through and including May 27, 2002, the greater of $0.50625 or the quarterly
cash dividend paid or payable (determined on each Dividend Payment Date by
reference to the dividend most recently declared on the Class A Common Stock) on
the number of shares of Class A
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Common Stock (or portion thereof) into which a share of Class L Preferred Stock
is convertible, and (ii) during the period from and after May 28, 2002, the
greater of $0.625 or the quarterly cash dividend paid or payable (determined on
each Dividend Payment Date by reference to the dividend most recently declared
on the Class A Common Stock) on the number of shares of Class A Common Stock (or
portion thereof) into which a share of Class L Preferred Stock is convertible.
Such dividends shall be cumulative from the Issue Date, whether or not in any
Dividend Period or Periods such dividends shall be declared or there shall be
funds of the Corporation legally available for the payment of such dividends,
and shall be payable quarterly in arrears on each Dividend Payment Date,
commencing on August 28, 1999. Each such dividend shall be payable in arrears to
the holders of record of the Class L Preferred Stock, as they appear on the
stock records of the Corporation at the close of business on the tenth Business
Day immediately preceding such Dividend Payment Date (each a "Record Date").
Accumulated, accrued and unpaid dividends for any past Dividend Periods may be
declared and paid at any time, without reference to any regular Dividend Payment
Date, to holders of record on such date, which date shall not precede by more
than 45 days the payment date thereof, as may be fixed by the Board of
Directors.
(b) Any dividend payable on the Class L Preferred Stock for
any partial dividend period shall be computed ratably on the basis of twelve
30-day months and a 360-day year. Holders of Class L Preferred Stock shall not
be entitled to any dividends, whether payable in cash, property or stock, in
excess of full cumulative dividends, as herein provided, on the Class L
Preferred Stock. No interest, or sum of money in lieu of interest, shall be
payable in respect of any dividend payment or payments on the Class L Preferred
Stock that may be in arrears.
(c) So long as any of the shares of Class L Preferred Stock
are outstanding, except as described in the immediately following sentence, no
dividends shall be declared or paid or set apart for payment by the Corporation
and no other distribution of cash or other property shall be declared or made,
directly or indirectly, by the Corporation with respect to any shares of Parity
Stock unless, in each case, dividends equal to the full amount of accumulated,
accrued and unpaid dividends on all outstanding shares of Class L Preferred
Stock 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 payment of such dividends on the Class L Preferred Stock for all Dividend
Periods ending on or prior to the date such dividend or distribution is
declared, paid, set apart for payment or made, as the case may be, with respect
to such shares of Parity Stock. When dividends are not paid in full or a sum
sufficient for such payment is not set apart, as aforesaid, all dividends
declared upon the Class L Preferred Stock and all dividends declared upon any
shares of Parity Stock shall be declared ratably in proportion to the respective
amounts of dividends accumulated, accrued and unpaid on the Class L Preferred
Stock and accumulated, accrued and unpaid on such Parity Stock.
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(d) So long as any of the shares of Class L Preferred Stock
are outstanding, no dividends (other than dividends or distributions paid in
shares of, or options, warrants or rights to subscribe for or purchase shares
of, Junior Stock) shall be declared or paid or set apart for payment by the
Corporation and no other distribution of cash or other property shall be
declared or made, directly or indirectly, by the Corporation with respect to any
shares of Junior Stock, nor shall any shares of Junior Stock be redeemed,
purchased or otherwise acquired (other than a redemption, purchase or other
acquisition of Common Stock made for purposes of an employee incentive or
benefit plan of the Corporation or any subsidiary) for any consideration (or any
moneys be paid to or made available for a sinking fund for the redemption of any
shares of any such stock), directly or indirectly, by the Corporation (except by
conversion into or exchange for shares of, or options, warrants or rights to
subscribe for or purchase shares of, Junior Stock), nor shall any other cash or
other property otherwise be paid or distributed to or for the benefit of any
holder of shares of Junior Stock in respect thereof, directly or indirectly, by
the Corporation unless, in each case, dividends equal to the full amount of all
accumulated, accrued and unpaid dividends on all outstanding shares of Class L
Preferred Stock have been declared and paid, or such dividends have been
declared and a sum sufficient for the payment thereof has been set apart for
such payment, on all outstanding shares of Class L Preferred Stock for all
Dividend Periods ending on or prior to the date such dividend or distribution is
declared, paid, set apart for payment or made with respect to such shares of
Junior Stock, or the date such shares of Junior Stock are redeemed, purchased or
otherwise acquired or monies paid to or made available for any sinking fund for
such redemption, or the date any such cash or other property is paid or
distributed to or for the benefit of any holders of Junior Stock in respect
thereof, as the case may be.
Notwithstanding the provisions of this Section 3, the
Corporation shall not be prohibited from (i) declaring or paying or setting
apart for payment any dividend or distribution on any shares of Parity Stock or
(ii) redeeming, purchasing or otherwise acquiring any Parity Stock, in each
case, if such declaration, payment, redemption, purchase or other acquisition is
necessary in order to maintain the continued qualification of the Corporation as
a REIT under Section 856 of the Code.
4. LIQUIDATION PREFERENCE.
(a) In the event of any liquidation, dissolution or winding up
of the Corporation, whether voluntary or involuntary, before any payment or
distribution by the Corporation (whether of capital, surplus or otherwise) shall
be made to or set apart for the holders of Junior Stock, the holders of shares
of Class L Preferred Stock shall be entitled to receive Twenty-Five Dollars
($25) per share of Class L Preferred Stock (the "Liquidation Preference"), plus
an amount equal to all dividends (whether or not earned or declared)
accumulated, accrued and unpaid thereon to the date of final distribution to
such holders; but such holders shall not be entitled to any further payment.
Until the holders of the Class L Preferred Stock have been paid the Liquidation
Preference in full, plus an amount equal to all dividends (whether or not
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earned or declared) accumulated, accrued and unpaid thereon to the date of final
distribution to such holders, no payment will be made to any holder of Junior
Stock upon the liquidation, dissolution or winding up of the Corporation. If,
upon any liquidation, dissolution or winding up of the Corporation, the assets
of the Corporation, or proceeds thereof, distributable among the holders of
Class L Preferred Stock shall be insufficient to pay in full the preferential
amount aforesaid and liquidating payments on any other shares of any class or
series of Parity Stock, then such assets, or the proceeds thereof, shall be
distributed among the holders of Class L Preferred Stock and any such other
Parity Stock ratably in the same proportion as the respective amounts that would
be payable on such Class L Preferred Stock and any such other Parity Stock if
all amounts payable thereon were paid in full. For the purposes of this Section
4, (i) a consolidation or merger of the Corporation with one or more
corporations, (ii) a sale or transfer of all or substantially all of the
Corporation's assets, or (iii) a statutory share exchange shall not be deemed to
be a liquidation, dissolution or winding up, voluntary or involuntary, of the
Corporation.
(b) Upon any liquidation, dissolution or winding up of the
Corporation, after payment shall have been made in full to the holders of Class
L Preferred Stock and any Parity Stock, as provided in Section 4(a), any other
series or class or classes of Junior Stock shall, subject to the respective
terms thereof, be entitled to receive any and all assets remaining to be paid or
distributed, and the holders of the Class L Preferred Stock and any Parity Stock
shall not be entitled to share therein.
5. REDEMPTION
(a) Shares of Class L Preferred Stock shall not be redeemable
by the Corporation prior to May 28, 2002, except as set forth in Section 11.2 of
this Article. On or after May 28, 2002, the Corporation, at its option, may
redeem shares of Class L Preferred Stock, in whole or from time to time in part,
for cash in an amount equal to the applicable Redemption Price.
(b) In the event of any redemption, the Redemption Date shall
be selected by the Corporation, shall be specified in the notice of redemption
and shall be not less than 30 days nor more than 60 days after the date notice
of redemption is sent by the Corporation.
(c) If full cumulative dividends on all outstanding shares of
Class L Preferred Stock have not been declared and paid, or declared and set
apart for payment, for all preceding Dividend Periods no shares of Class L
Preferred Stock may be redeemed unless all outstanding shares of Class L
Preferred Stock are simultaneously redeemed, and neither the Corporation nor any
affiliate of the Corporation may purchase or acquire shares of Class L Preferred
Stock, otherwise than pursuant to a purchase or exchange offer made on the same
terms to all holders of shares of Class L Preferred Stock.
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(d) In the event of a redemption, notice of such redemption
shall be given to each holder of record of the shares to be redeemed. Such
notice shall be provided by first class mail, postage prepaid, at such holder's
address as the same appears on the stock records of the Corporation. Neither the
failure to mail any notice required by this paragraph (d), nor any defect
therein or in the mailing thereof to any particular holder, shall affect the
sufficiency of the notice or the validity of the proceedings for redemption with
respect to the other holders. Any notice which has been mailed in the manner
herein provided shall be conclusively presumed to have been duly given on the
date mailed whether or not the holder receives the notice. Each such notice
shall state, as appropriate: (i) the Redemption Date; (ii) the number of shares
of Class L Preferred Stock to be redeemed and, if fewer than all such shares
held by such holder are to be redeemed, the number of such shares to be redeemed
from such holder; (iii) the place or places at which certificates for such
shares are to be surrendered for cash; and (iv) the Redemption Price payable on
such Redemption Date, including, without limitation, a statement as to whether
or not accumulated, accrued and unpaid dividends will be payable as part of the
Redemption Price, or payable on the next Dividend Payment Date to the record
holder at the close of business on the relevant record date as described in the
next succeeding sentence. Notice having been mailed as aforesaid, from and after
the Redemption Date (unless the Corporation shall fail to make available the
amount of cash necessary to effect such redemption), (i) dividends on the shares
of Class L Preferred Stock so called for redemption shall cease to accumulate or
accrue on the shares of Class L Preferred Stock called for redemption, (ii) said
shares shall no longer be deemed to be outstanding, and (iii) all rights of the
holders thereof as holders of Class L Preferred Stock of the Corporation shall
cease except the right to receive the cash payable upon such redemption, without
interest thereon, upon surrender of their certificates if so required. The
Corporation's obligation to make available the cash necessary to effect such
redemption in accordance with the preceding sentence shall be deemed fulfilled
if, on or before the applicable Redemption Date, the Corporation shall
irrevocably deposit in trust with a bank or trust company (which may not be an
affiliate of the Corporation) that has, or is an affiliate of a bank or trust
company that has, a capital and surplus of at least $50,000,000, such amount of
cash as is necessary for such redemption plus, if such Redemption Date occurs
after any dividend record date and on or prior to the related Dividend Payment
Date, such amount of cash as is necessary to pay the dividend payable on such
Dividend Payment Date in respect of such shares of Class L Preferred Stock
called for redemption, with irrevocable instructions that such cash be applied
to the redemption of the shares of Class L Preferred Stock so called for
redemption and, if applicable, the payment of such dividend. No interest shall
accrue for the benefit of the holders of shares of Class L Preferred Stock to be
redeemed on any cash so set aside by the Corporation. Subject to applicable
escheat laws, any such cash unclaimed at the end of two years from the
Redemption Date shall revert to the general funds of the Corporation, after
which reversion the holders of shares of Class L Preferred Stock so called for
redemption shall look only to the general funds of the Corporation for the
payment of such cash.
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As promptly as practicable after the surrender in accordance
with such notice of the certificates for any such shares of Class L Preferred
Stock to be so redeemed (properly endorsed or assigned for transfer, if the
Corporation shall so require and the notice shall so state), such certificates
shall be exchanged for the cash (without interest thereon) for which such shares
have been redeemed in accordance with such notice. If fewer than all the
outstanding shares of Class L Preferred Stock are to be redeemed, shares to be
redeemed shall be selected by the Corporation from outstanding shares of Class L
Preferred Stock not previously called for redemption by lot or, with respect to
the number of shares of Class L Preferred Stock held of record by each holder of
such shares, pro rata (as nearly as may be) or by any other method as may be
determined by the Board of Directors in its discretion to be equitable. If fewer
than all the shares of Class L Preferred Stock represented by any certificate
are redeemed, then a new certificate representing the unredeemed shares shall be
issued without cost to the holders thereof.
6. STATUS OF REACQUIRED STOCK.
All shares of Class L Preferred Stock that have been issued
and reacquired in any manner by the Corporation (including, without limitation,
shares of Class L Preferred Stock which have been surrendered for conversion)
shall be returned to the status of authorized but unissued shares of Class L
Preferred Stock.
7. CONVERSION.
7.1 CONVERSION AT HOLDERS' OPTION.
At any time on or after the Issue Date, holders of shares of
Class L Preferred Stock shall have the right to convert all or a portion of such
shares into shares of Class A Common Stock, as follows:
(a) Subject to and upon compliance with the provisions of this
Section 7, each share of Class L Preferred Stock shall, at the option of the
holder thereof, be convertible at any time (unless such share is called for
redemption, then to and including but not after the close of business on the
date immediately prior to the Redemption Date, unless the Corporation shall
default in payment due upon redemption thereof), into that number of fully paid
and non-assessable shares of Class A Common Stock (calculated as to each
conversion to the nearest 1/100th of a share) obtained by dividing $25 by the
Conversion Price in effect at such time and by surrender of the certificate
representing such shares to be converted in the manner provided in subsection
(b) of this Section 7.1.
(b) In order to convert shares of Class L Preferred Stock, the
holder of the shares to be converted shall surrender the certificate
representing such shares at any office or agency maintained by the Corporation
for such purpose, accompanied by the funds, if any, required by the last
paragraph of this subsection (b) to be paid by
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such holder, and shall give written notice of conversion in the form provided on
such certificate representing shares of Class L Preferred Stock (or such other
notice as is acceptable to the Corporation) to the Corporation at such office or
agency that the holder elects to convert the shares of Class L Preferred Stock
specified in such notice. Such notice shall also state the name or names,
together with address or addresses, in which the certificate or certificates for
shares of Class A Common Stock which shall be issuable in such conversion shall
be issued. Unless the shares issuable on conversion are to be issued in the same
name as the name in which such share of Class L Preferred Stock is registered,
each certificate representing a share of Class L Preferred Stock surrendered for
conversion shall be accompanied by instruments of transfer, in form satisfactory
to the Corporation, duly executed by the holder or such holder's duly authorized
attorney and an amount sufficient to pay any transfer or similar tax (or
evidence reasonably satisfactory to the Corporation that such taxes have been
paid).
As promptly as practicable after the surrender of certificates
representing such shares of Class L Preferred Stock and the receipt of such
notice and instruments of transfer as aforesaid, the Corporation shall issue and
shall deliver at such office or agency to such holder, or as designated in such
holder's written instructions, a certificate or certificates for the number of
full shares of Class A Common Stock issuable upon the conversion of such share
or shares of Class L Preferred Stock in accordance with provisions of this
Section 7, and a check or cash in respect of (i) the cash amount payable to such
holder, if any, referred to in the last paragraph of this subsection (b), and
(ii) any fractional interest in a share of Class A Common Stock arising upon
such conversion, as provided in paragraph (c) of this Section 7.1.
Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which certificates
representing such shares of Class L Preferred Stock shall have been surrendered
and such notice (and any applicable instruments of transfer and any required
taxes) received by the Corporation as aforesaid, and the Person or Persons in
whose name or names any certificate or certificates for shares of Class A Common
Stock shall be issuable upon such conversion shall be deemed to have become the
holder or holders of record of the shares represented thereby at such time on
such date, and such conversion shall be at the Conversion Price in effect at
such time on such date, unless the stock transfer books of the Corporation shall
be closed on that date, in which event such Person or Persons shall be deemed to
have become such holder or holders of record at the close of business on the
next succeeding day on which such stock transfer books are open, but such
conversion shall be at the Conversion Price in effect on the date on which such
shares shall have been surrendered and such notice received by the Corporation.
Except as provided herein, the Corporation will make no
payment or allowance for unpaid dividends, whether or not in arrears, on
converted shares or for dividends (other than dividends on the Class A Common
Stock the record date for
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which is after the conversion date and which the Corporation shall pay in the
ordinary course to the record holder as of the record date) on the Class A
Common Stock issued upon such conversion. Holders of Class L Preferred Stock at
the close of business on a Record Date will be entitled to receive an amount
equal to the dividend payable on such shares on the corresponding Dividend
Payment Date notwithstanding the conversion of such shares following such Record
Date. If the Dividend Adjustment Amount (as defined below) with respect to any
shares of Class L Preferred Stock surrendered for conversion is positive, the
holders of such shares shall, as of the date of conversion, be entitled to
receive a cash payment equal to such Dividend Adjustment Amount. If the Dividend
Adjustment Amount with respect to any shares of Class L Preferred Stock
surrendered for conversion is negative, such shares must be accompanied by
payment of a cash amount equal to the absolute value of such Dividend Adjustment
Amount. As used herein, "Dividend Adjustment Amount" shall mean, with respect to
any share of Class L Preferred Stock that has been surrendered for conversion,
the sum of:
(i) the aggregate amount of any dividends (whether or not
earned or declared) that are accumulated, accrued and unpaid on such
share as of the time of such conversion; minus
(ii) if such share has been surrendered for conversion during
the period between the close of business on any Record Date and the
opening of business on the corresponding Dividend Payment Date, the
amount of the dividend payable thereon on such Dividend Payment Date;
minus
(iii) if such share has not been surrendered for conversion
during the period between the close of business on any record date for
the payment of a dividend on the Class A Common Stock and the opening
of business on the corresponding dividend payment date, an amount equal
to the product of (A) the quarterly cash dividend per share that was
most recently declared on the Class A Common Stock, determined as of
the date of conversion, and (B) a fraction, the numerator of which is
the number of days in the period from and including the date of the
most recent dividend payment date for the Class A Common Stock or the
Class L Preferred Stock, whichever is later, to but excluding the date
of such conversion, and the denominator of which is 90.
(c) No fractional shares of Class A Common Stock or scrip
representing fractions of a share of Class A Common Stock shall be issued upon
conversion of shares of Class L Preferred Stock. If more than one share of Class
L Preferred Stock shall be surrendered for conversion at one time by the same
holder, the number of full shares of Class A Common Stock issuable upon
conversion thereof shall be computed on the basis of the aggregate number of
shares of Class L Preferred Stock so surrendered. In lieu of any fractional
interest in a share of Class A Common Stock that would otherwise be deliverable
upon the conversion of any share of Class L Preferred Stock, the Corporation
shall pay to the holder of such shares an amount
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in cash (computed to the nearest cent) equal to the Closing Price of the Class A
Common Stock on the Trading Day immediately preceding the date of conversion,
multiplied by the fractional interest that otherwise would have been deliverable
upon conversion of such share.
7.2 ADJUSTMENTS TO CONVERSION PRICE
(a) The Conversion Price shall be adjusted from time to
time as follows:
(i) If the Corporation shall after the Issue Date (A)
pay a dividend or make a distribution on its Class A Common Stock in shares of
Class A Common Stock, (B) subdivide its outstanding shares of Class A Common
Stock into a greater number of shares, (C) combine its outstanding shares of
Class A Common Stock into a smaller number of shares or (D) issue any shares of
capital stock by reclassification of its outstanding Class A Common Stock
(including a reclassification pursuant to a merger or consolidation in which the
Corporation is the continuing entity and in which the Class A Common Stock
outstanding immediately prior to the merger or consolidation is not exchanged
for cash, or securities or other property of another entity), then, in each such
case, the Conversion Price in effect immediately prior to such action shall be
adjusted so that the holder of any share of Class L Preferred Stock thereafter
surrendered for conversion shall be entitled to receive the number of shares of
Class A Common Stock or other capital stock of the Corporation which such holder
would have owned or been entitled to receive immediately following such action
had such share been converted immediately prior to the occurrence of such event.
An adjustment made pursuant to this subsection (i) of this Section 7.2(a) shall
become effective immediately after the record date, in the case of a dividend or
distribution, or immediately after the effective date, in the case of a
subdivision, combination or reclassification. If, as a result of an adjustment
made pursuant to this subsection (i), the holder of any share of Class L
Preferred Stock thereafter surrendered for conversion shall become entitled to
receive shares of two or more classes of capital stock or shares of Class A
Common Stock and other capital stock of the Corporation, the Board of Directors
(whose determination shall be conclusive and shall be described in a statement
filed by the Corporation with the Transfer Agent) shall determine the allocation
of the adjusted Conversion Price between or among shares of such classes of
capital stock or shares of Class A Common Stock and other capital stock.
(ii) If the Corporation shall, after the Issue Date,
issue rights, options or warrants to all holders of its outstanding shares of
Class A Common Stock entitling them (for a period expiring within 45 days after
the record date described below) to subscribe for or purchase shares of Class A
Common Stock at a price per share less than the current market price per share
(determined pursuant to subsection (iv) of this Section 7.2(a)) of the Class A
Common Stock (other than pursuant to any stock option, restricted stock or other
incentive or benefit plan or stock ownership or purchase plan for the benefit of
employees, directors or officers or any dividend
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reinvestment plan of the Corporation in effect at the time hereof or any other
similar plan adopted or implemented hereafter), then the Conversion Price in
effect immediately prior thereto shall be adjusted so that it shall equal the
price determined by multiplying the Conversion Price in effect immediately prior
to the record date by a fraction, the numerator of which shall be the sum of (A)
the number of shares of Class A Common Stock outstanding on the record date and
(B) the number of shares which the aggregate proceeds to the Corporation from
the exercise of such rights, options or warrants for Class A Common Stock would
purchase at such current market price, and the denominator of which shall be the
sum of (A) the number of shares of Class A Common Stock outstanding on the
record date and (B) the number of additional shares of Class A Common Stock
offered for subscription or purchase pursuant to such rights, options or
warrants. Such adjustment shall be made successively whenever any rights,
options or warrants are issued, and shall become effective immediately after the
record date for the determination of stockholders entitled to receive such
rights, options or warrants; provided, however, that if all of the shares of
Class A Common Stock offered for subscription or purchase are not delivered upon
the exercise of such rights, options or warrants, upon the expiration of such
rights, options or warrants, the Conversion Price shall be readjusted to the
Conversion Price which would have been in effect had the numerator and the
denominator of the foregoing fraction and the resulting adjustment been made
based upon the number of shares of Class A Common Stock actually delivered upon
the exercise of such rights, options or warrants rather than upon the number of
shares of Class A Common Stock offered for subscription or purchase. In
determining whether any rights, options or warrants entitle the holders to
subscribe for or purchase shares of Class A Common Stock at less than such
current market price, and in determining the aggregate offering price of such
shares of Class A Common Stock, there shall be taken into account any
consideration received by the Corporation for such rights, options or warrants,
with the value of such consideration, if other than cash, determined by the
Board of Directors (whose determination shall be conclusive and shall be
described in a statement filed by the Corporation with the Transfer Agent).
(iii) In case the Corporation shall, by dividend or
otherwise, distribute to all holders of its outstanding Class A Common Stock any
capital stock (other than Class A Common Stock), evidences of its indebtedness
or assets or rights or warrants to subscribe for or purchase securities of the
Corporation (excluding (A) those referred to in subsections (i) and (ii) of this
Section 7.2(a), (B) dividends and distributions paid in cash out of the retained
earnings of the Corporation, and (C) distributions upon mergers or
consolidations to which subsection (b) of this Section 7.2 applies), then, in
each such case, the Conversion Price shall be adjusted to equal the price
determined by multiplying the Conversion Price in effect immediately prior to
the record date of such distribution by a fraction, the numerator of which shall
be the current market price per share (determined pursuant to subsection (iv) of
this Section 7.2(a)) of the Class A Common Stock, less the fair market value on
such record date (determined by the Board or Directors, whose determination
shall be conclusive and shall be described in a statement filed by the
Corporation with the Transfer Agent) of
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the portion of the capital stock or assets or the evidences of indebtedness or
assets so distributed to the holder of one share of Class A Common Stock or of
such subscription rights or warrants applicable to one share of Class A Common
Stock, and the denominator of which shall be such current market price per share
of Class A Common Stock. Such adjustment shall become effective immediately
after the record date for the determination of stockholders entitled to receive
such distribution.
(iv) For the purpose of any computation under
subsections (ii) and (iii) of this Section 7.2(a), the current market price per
share of Class A Common Stock on any date shall be the average of the Closing
Price of the Class A Common Stock for the shorter of (A) 20 consecutive Trading
Days ending on the last full Trading Day prior to the Time of Determination or
(B) the period commencing on the date next succeeding the first public
announcement of the issuance of such rights or warrants or such distribution
through such last full Trading Day prior to the Time of Determination. For
purposes of the foregoing, the term "Time of Determination" shall mean the time
and date of the earlier of (A) the record date for determining stockholders
entitled to receive the rights, warrants or distribution referred to in
subsections (ii) and (iii) of this Section 7.2, or (B) the commencement of
"ex-dividend" trading on the exchange or market referred to in the definition of
"Closing Price."
(v) No adjustment in the Conversion Price shall be
required to be made unless such adjustment would require an increase or decrease
of at least one percent of such price; provided, however, that any adjustment
which by reason of this subsection (v) is not required to be made shall be
carried forward and taken into account in any subsequent adjustment. All
calculations under this Section 7.2 shall be made to the nearest cent or to the
nearest 1/100th of a share, as the case may be. Anything in this Section 7.2 to
the contrary notwithstanding, the Corporation shall be entitled to make such
reduction in the Conversion Price, in addition to those required by this Section
7.2, as it shall determine in its discretion to be advisable in order that any
stock dividend, subdivision of shares, distribution of rights to purchase stock
or securities, or distribution of securities convertible into or exchangeable
for stock hereafter made by the Corporation to its stockholders shall not be
taxable to the recipients. Except as set forth in subsections (i), (ii) and
(iii) above, the Conversion Price shall not be adjusted for the issuance of
Class A Common Stock, or any securities convertible into or exchangeable for
Class A Common Stock or carrying the right to purchase any of the foregoing, in
exchange for cash, property or services.
(vi) The Corporation from time to time may decrease
the Conversion Price by any amount for any period of time if the period is at
least 20 days and if the decrease is irrevocable during the period. Whenever the
Conversion Price is so decreased, the Corporation shall mail to holders of
record of shares of Class L Preferred Stock a notice of the decrease at least 15
days before the date the decreased Conversion Price takes effect, and such
notice shall state the decreased Conversion Price and the period it will be in
effect.
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(b) Notwithstanding any other provision herein to the
contrary, in case of any merger or consolidation to which the Corporation is a
party (other than a merger or consolidation in which the Corporation is the
continuing entity and in which the Class A Common Stock outstanding immediately
prior to the merger or consolidation is not exchanged for cash, or the
securities or other property of another entity), or in the case of any sale or
transfer of all or substantially all of the Corporation's property and assets to
another entity, there will be no adjustment of the Conversion Price, and lawful
provision shall be made by the entity formed by such consolidation or the entity
whose securities, cash or other property will immediately after the merger or
consolidation be owned, by virtue of the merger or consolidation, by the holders
of Class A Common Stock immediately prior to the merger or consolidation, or the
entity which shall have acquired such assets of the Corporation, such that each
share of Class L Preferred Stock then outstanding will, without the consent of
the holder thereof, become convertible into the kind and amount of securities,
cash or other property receivable upon such merger, consolidation, sale or
transfer by a holder of the number of shares of Class A Common Stock into which
such share of Class L Preferred Stock was convertible immediately prior to such
merger, consolidation, sale or transfer assuming such holder of Class A Common
Stock did not exercise his rights of election, if any, as to the kind or amount
of securities, cash or other property receivable upon such merger,
consolidation, sale or transfer. In the case of a cash merger of the Corporation
into another entity or any other cash transaction of the type mentioned in this
Section 7.2(b), each share of Class L Preferred Stock will thereafter be
convertible at the Conversion Price in effect at such time into the same amount
of cash per share into which each share of Class L Preferred Stock would have
been convertible had such share been converted into Class A Common Stock
immediately prior to the effective date of such cash merger or other
transaction. The foregoing provisions of this Section 7.2(b) shall similarly
apply to successive mergers, consolidations, sales or transfers.
(c) If (i) the Corporation shall take any action that would
require an adjustment in the Conversion Price pursuant to Section 7.2; (ii) the
Corporation shall authorize the granting to the holders of the Class A Common
Stock generally of rights or warrants to subscribe for or purchase any shares of
stock of any class or series or of any other rights or warrants; (iii) there
shall be any reorganization or reclassification of the Class A Common Stock
(other than an event to which subsection (i) of Section 7.2(a) applies) or any
consolidation or merger to which the Corporation is a party or any sale or
transfer of all or substantially all of the assets of the Corporation, in each
case, for which approval of any stockholders of the Corporation is required; or
(iv) there shall be a voluntary or involuntary liquidation, dissolution or
winding up of the Corporation; then, in each such case, the Corporation shall
cause to be given to the holders of shares of Class L Preferred Stock and the
Transfer Agent as promptly as possible, but in any event at least 15 days prior
to the applicable date hereinafter specified, a notice stating (i) the date on
which a record is to be taken for the purpose of such action or granting of
rights or warrants, or, if a record is not to be taken, the date as of which the
holders of Class A Common Stock of record to be entitled to such
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dividend, distribution, rights or warrants are to be determined, or (ii) the
date on which such reorganization, reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution or winding up is expected to become
effective or occur, and the date as of which it is expected that holders of
Class A Common Stock of record shall be entitled to exchange their shares of
Class A Common Stock for securities, cash or other property deliverable upon
such reorganization, reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution or winding up. Failure to give such notice or any
defect therein shall not affect the legality or validity of the proceedings
described in this Section 7.2(c).
(d) Whenever the Conversion Price is adjusted as herein
provided, (i) the Corporation shall promptly file with the Transfer Agent a
certificate setting forth the Conversion Price after such adjustment and a brief
statement of the facts requiring such adjustment and the manner of computing the
same, which certificate shall be conclusive evidence of the correctness of such
adjustment, and (ii) the Corporation shall mail or cause to be mailed by first
class mail, postage prepaid, as soon as practicable to each holder of record of
shares of Class L Preferred Stock a notice stating that the Conversion Price has
been adjusted and setting forth the adjusted Conversion Price.
(e) In any case in which paragraph (a) of this Section 7.2
shall require that an adjustment be made immediately following a record date or
an effective date, the Corporation may elect to defer (but only until the filing
by the Corporation with the Transfer Agent of the certificate required by
subsection 7.2(d)) (i) issuing to the holder of any share of Class L Preferred
Stock converted after such record date or effective date the shares of Class A
Common Stock issuable upon such conversion in excess of the shares of Class A
Common Stock issuable upon such conversion on the basis of the Conversion Price
prior to adjustment, and (ii) paying to such holder any amount of cash in lieu
of a fractional share.
(f) In the event that at any time, as a result of an
adjustment made pursuant to subsection (i) of Section 7.2(a), the holder of any
share of Class L Preferred Stock thereafter surrendered for conversion shall
become entitled to receive any shares of the Corporation other than shares of
Class A Common Stock, thereafter the Conversion Price of such other shares so
receivable upon conversion of any share of Class L Preferred Stock shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to Class A Common Stock
contained in this Section 7.2.
(g) The Corporation shall at all times reserve and keep
available, free from preemptive rights, out of the aggregate of its authorized
but unissued shares of Class A Common Stock, for the purpose of effecting
conversion of shares of Class L Preferred Stock, the full number of shares of
Class A Common Stock deliverable upon the conversion of all outstanding shares
of Class L Preferred Stock not theretofore converted and on or before (and as a
condition of) taking any action that
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would cause an adjustment of the Conversion Price resulting in an increase in
the number of shares of Class A Common Stock deliverable upon conversion in
excess of the number thereof previously reserved and available therefor, the
Corporation shall take all such action so required. For purposes of this
paragraph (g), the number of shares of Class A Common Stock which shall be
deliverable upon the conversion of all outstanding shares of Class L Preferred
Stock shall be computed as if at the time of computation all such outstanding
shares of Class L Preferred Stock were held by a single holder (and without
regard to the Ownership Limit).
Before taking any action which would cause an adjustment
reducing the Conversion Price below the then par value (if any) of the shares of
Class A Common Stock deliverable upon conversion of the shares of Class L
Preferred Stock, the Corporation shall take any corporate action which may, in
the opinion of its counsel, be necessary in order that the Corporation may
validly and legally issue fully paid and non-assessable shares of Class A Common
Stock at such adjusted Conversion Price.
(h) The Corporation will pay any and all documentary stamp,
issue or transfer taxes, and any other similar taxes, payable in respect of the
issue or delivery of shares of Class A Common Stock upon conversion of shares of
Class L Preferred Stock pursuant hereto; provided, however, that the Corporation
shall not be required to pay any tax that may be payable in respect of any
transfer involved in the issue or delivery of shares of Class A Common Stock in
a name other than that of the holder of the shares of Class L Preferred Stock to
be converted, and no such issue or delivery shall be made unless and until the
Person requesting such issue or delivery has paid to the Corporation the amount
of any such tax or established, to the reasonable satisfaction of the
Corporation, that such tax has been paid.
(i) Notwithstanding anything to the contrary contained in this
Section 7, conversion of Class L Preferred Stock pursuant to this Section 7
shall be permitted only to the extent that such conversion would not result in a
violation of the Ownership Restrictions (as defined in the Charter).
(j) If the Corporation shall take any action affecting the
Class A Common Stock, other than action described in this Section 7, that in the
opinion of the Board of Directors would materially adversely affect the
conversion rights of the holders of Class L Preferred Stock, the Board of
Directors may, but shall have no obligation to, adjust the Conversion Price for
the Class L Preferred Stock to the extent permitted by law in such manner, if
any, and at such time as the Board of Directors, in its sole discretion, may
determine to be equitable under the circumstances.
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8. RANKING.
Any class or series of capital stock of the Corporation shall
be deemed to rank:
(a) prior or senior to the Class L Preferred Stock, as to the
payment of dividends and as to distribution of assets upon liquidation,
dissolution or winding up, if the holders of such class or series shall be
entitled to the receipt of dividends and of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in preference or
priority to the holders of Class L Preferred Stock ("Senior Stock");
(b) on a parity with the Class L Preferred Stock, as to the
payment of dividends and as to distribution of assets upon liquidation,
dissolution or winding up, whether or not the dividend rates, dividend payment
dates or redemption or liquidation prices per share thereof be different from
those of the Class L Preferred Stock, if (i) such capital stock is Class B
Cumulative Convertible Preferred Stock, Class C Cumulative Preferred Stock,
Class D Cumulative Preferred Stock, Class G Cumulative Preferred Stock, Class H
Cumulative Preferred Stock, Class I Cumulative Preferred Stock, Class J
Cumulative Convertible Preferred Stock or Class K Convertible Cumulative
Preferred Stock of the Corporation, or (ii) the holders of such class of stock
or series and the Class L Preferred Stock shall be entitled to the receipt of
dividends and of amounts distributable upon liquidation, dissolution or winding
up in proportion to their respective amounts of accrued and unpaid dividends per
share or liquidation preferences, without preference or priority of one over the
other (the capital stock referred to in clauses (i) and (ii) of this paragraph
being hereinafter referred to, collectively, as "Parity Stock"); and
(c) junior to the Class L Preferred Stock, as to the payment
of dividends and as to the distribution of assets upon liquidation, dissolution
or winding up, if (i) such capital stock or series shall be Common Stock or (ii)
the holders of Class L Preferred Stock shall be entitled to receipt of dividends
or of amounts distributable upon liquidation, dissolution or winding up, as the
case may be, in preference or priority to the holders of shares of such class or
series (the capital stock referred to in clauses (i) and (ii) of this paragraph
being hereinafter referred to, collectively, as "Junior Stock").
9. VOTING.
(a) If and whenever six quarterly dividends (whether or not
consecutive) payable on the Class L Preferred Stock shall be in arrears (which
shall, with respect to any such quarterly dividend, mean that any such dividend
has not been paid in full), whether or not earned or declared, the number of
directors then constituting the Board of Directors shall be increased by two (if
not already increased by reason of similar types of provisions with respect to
shares of Parity Stock of any
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other class or series which is entitled to similar voting rights (the "Voting
Preferred Stock")) and the holders of shares of Class L Preferred Stock,
together with the holders of shares of all other Voting Preferred Stock then
entitled to exercise similar voting rights, voting as a single class regardless
of series, shall be entitled to elect the two additional directors to serve on
the Board of Directors at any annual meeting of stockholders or special meeting
held in place thereof, or at a special meeting of the holders of the Class L
Preferred Stock and the Voting Preferred Stock called as hereinafter provided.
Whenever all arrears in dividends on the Class L Preferred Stock and the Voting
Preferred Stock then outstanding shall have been paid and dividends thereon for
the current quarterly dividend period shall have been declared and paid, or
declared and set apart for payment, then the right of the holders of the Class L
Preferred Stock and the Voting Preferred Stock to elect such additional two
directors shall cease (but subject always to the same provision for the vesting
of such voting rights in the case of any similar future arrearages), and the
terms of office of all persons elected as directors by the holders of the Class
L Preferred Stock and the Voting Preferred Stock shall forthwith terminate and
the number of directors constituting the Board of Directors shall be reduced
accordingly. At any time after such voting power shall have been so vested in
the holders of Class L Preferred Stock and the Voting Preferred Stock, if
applicable, the Secretary of the Corporation may, and upon the written request
of any holder of Class L Preferred Stock (addressed to the Secretary at the
principal office of the Corporation) shall, call a special meeting of the
holders of the Class L Preferred Stock and of the Voting Preferred Stock for the
election of the two directors to be elected by them as herein provided, such
call to be made by notice similar to that provided in the Bylaws of the
Corporation for a special meeting of the stockholders or as required by law. If
any such special meeting required to be called as above provided shall not be
called by the Secretary within 20 days after receipt of any such request, then
any holder of Class L Preferred Stock may call such meeting, upon the notice
above provided, and for that purpose shall have access to the stock books of the
Corporation. The directors elected at any such special meeting shall hold office
until the next annual meeting of the stockholders or special meeting held in
lieu thereof if such office shall not have previously terminated as above
provided. If any vacancy shall occur among the directors elected by the holders
of the Class L Preferred Stock and the Voting Preferred Stock, a successor shall
be elected by the Board of Directors, upon the nomination of the then-remaining
director elected by the holders of the Class L Preferred Stock and the Voting
Preferred Stock or the successor of such remaining director, to serve until the
next annual meeting of the stockholders or special meeting held in place thereof
if such office shall not have previously terminated as provided above.
(b) So long as any shares of Class L Preferred Stock are
outstanding, in addition to any other vote or consent of stockholders required
by law or by the Charter of the Corporation, the affirmative vote of at least
66-2/3% of the votes entitled to be cast by the holders of the Class L Preferred
Stock voting as a single class, given in person or by proxy, either in writing
without a meeting or by vote at any meeting called for the purpose, shall be
necessary for effecting or validating:
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(i) Any amendment, alteration or repeal of any of the
provisions of, or the addition of any provision to, these Articles
Supplementary, the Charter or the By-Laws of the Corporation that materially
adversely affects the voting powers, rights or preferences of the holders of the
Class L Preferred Stock (including any amendment, alteration or repeal effected
pursuant to a merger, consolidation or similar transaction) or would convert the
Class L Preferred Stock into cash or any other security other than a preferred
stock with terms and provisions equivalent to those set forth in these Articles
Supplementary; provided, however, that the amendment of the provisions of the
Charter so as to authorize or create, or to increase the authorized amount of,
or issue any Junior Stock or any shares of any class of Parity Stock shall not
be deemed to materially adversely affect the voting powers, rights or
preferences of the holders of Class L Preferred Stock; or
(ii) The authorization, creation of, increase in the
authorized amount of, or issuance of any shares of any class or series of Senior
Stock or any security convertible into shares of any class or series of Senior
Stock (whether or not such class or series of Senior Stock is currently
authorized);
provided, however, that no such vote of the holders of Class L Preferred Stock
shall be required if, at or prior to the time when such amendment, alteration or
repeal is to take effect, or when the issuance of any such Senior Stock or
convertible or exchangeable security is to be made, as the case may be,
provision is made for the redemption of all shares of Class L Preferred Stock at
the time outstanding to the extent such redemption is authorized by Section 5 of
this Article.
For purposes of the foregoing provisions and all other voting
rights under these Articles Supplementary, each share of Class L Preferred Stock
shall have one (1) vote per share, except that when any other class or series of
preferred stock of the Corporation shall have the right to vote with the Class L
Preferred Stock as a single class on any matter, then the Class L Preferred
Stock and such other class or series shall have with respect to such matters one
quarter of one vote per $25 of stated liquidation preference. Except as
otherwise required by applicable law or as set forth herein or in the Charter,
the Class L Preferred Stock shall not have any relative, participating, optional
or other special voting rights and powers other than as set forth herein, and
the consent of the holders thereof shall not be required for the taking of any
corporate action.
10. RECORD HOLDERS.
The Corporation and the Transfer Agent may deem and treat the
record holder of any share of Class L Preferred Stock as the true and lawful
owner thereof for all purposes, and neither the Corporation nor the Transfer
Agent shall be affected by any notice to the contrary.
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11.1 RESTRICTIONS ON OWNERSHIP AND TRANSFERS.
(A) LIMITATION ON BENEFICIAL OWNERSHIP. Except as provided in
Section 11.8, from and after the Issue Date, no Person (other than the Initial
Holder or a Look-Through Entity) shall Beneficially Own shares of Class L
Preferred Stock in excess of the Ownership Limit, the Initial Holder shall not
Beneficially Own shares of Class L Preferred Stock in excess of the Initial
Holder Limit and no Look-Through Entity shall Beneficially Own shares of Class L
Preferred Stock in excess of the Look- Through Ownership Limit.
(B) TRANSFERS IN EXCESS OF OWNERSHIP LIMIT. Except as provided
in Section 11.8, from and after the Issue Date (and subject to Section 11.12),
any Transfer (whether or not such Transfer is the result of transactions entered
into through the facilities of the NYSE or other securities exchange or an
automated inter-dealer quotation system) that, if effective, would result in any
Person (other than the Initial Holder or a Look-Through Entity) Beneficially
Owning shares of Class L Preferred Stock in excess of the Ownership Limit shall
be void ab initio as to the Transfer of such shares of Class L Preferred Stock
that would be otherwise Beneficially Owned by such Person in excess of the
Ownership Limit, and the intended transferee shall acquire no rights in such
shares of Class L Preferred Stock.
(C) TRANSFERS IN EXCESS OF INITIAL HOLDER LIMIT. Except as
provided in Section 11.8, from and after the Issue Date (and subject to Section
11.12), any Transfer (whether or not such Transfer is the result of transactions
entered into through the facilities of the NYSE or other securities exchange or
an automated inter-dealer quotation system) that, if effective, would result in
the Initial Holder Beneficially Owning shares of Class L Preferred Stock in
excess of the Initial Holder Limit shall be void ab initio as to the Transfer of
such shares of Class L Preferred Stock that would be otherwise Beneficially
Owned by the Initial Holder in excess of the Initial Holder limit, and the
Initial Holder shall acquire no rights in such shares of Class L Preferred
Stock.
(D) TRANSFERS IN EXCESS OF LOOK-THROUGH OWNERSHIP LIMIT.
Except as provided in Section 11.8 from and after the Issue Date (and subject to
Section 11.12), any Transfer (whether or not such Transfer is the result of
transactions entered into through the facilities of the NYSE or other securities
exchange or an automated inter-dealer quotation system) that, if effective,
would result in any Look-Through Entity Beneficially Owning shares of Class L
Preferred Stock in excess of the Look- Through Ownership limit shall be void ab
initio as to the Transfer of such shares of Class L Preferred Stock that would
be otherwise Beneficially Owned by such Look- Through Entity in excess of the
Look-Through Ownership Limit and such Look- Through Entity shall acquire no
rights in such shares of Class L Preferred Stock.
(E) TRANSFERS RESULTING IN "CLOSELY HELD" STATUS. From and
after the Issue Date, any Transfer that, if effective would result in the
Corporation being
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"closely held" within the meaning of Section 856(h) of the Code, or would
otherwise result in the Corporation failing to qualify as a REIT (including,
without limitation, a Transfer or other event that would result in the
Corporation owning (directly or constructively) an interest in a tenant that is
described in Section 856(d)(2)(B) of the Code if the income derived by the
Corporation from such tenant would cause the Corporation to fail to satisfy any
of the gross income requirements of Section 856(c) of the Code) shall be void ab
initio as to the Transfer of shares of Class L Preferred Stock that would cause
the Corporation (i) to be "closely held" within the meaning of Section 856(h) of
the Code or (ii) otherwise fail to qualify as a REIT, as the case may be, and
the intended transferee shall acquire no rights in such shares of Class L
Preferred Stock.
(F) SEVERABILITY ON VOID TRANSACTIONS. A Transfer of a share
of Class L Preferred Stock that is null and void under Sections 11.1(B), (C),
(D), or (E) of this Article because it would, if effective, result in (i) the
ownership of Class L Preferred Stock in excess of the Initial Holder Limit, the
Ownership Limit, or the Look-Through Ownership Limit, (ii) the Corporation being
"closely held" within the meaning of Section 856(h) of the Code or (iii) the
Corporation otherwise failing to qualify as a REIT, shall not adversely affect
the validity of the Transfer of any other share of Class L Preferred Stock in
the same or any other related transaction.
11.2 REMEDIES FOR BREACH. If the Board of Directors or a committee
thereof shall at any time determine in good faith that a Transfer or other event
has taken place in violation of Section 11.1 of this Article or that a Person
intends to acquire or has attempted to acquire Beneficial Ownership of any
shares of Class L Preferred Stock in violation of Section 11.1 of this Article
(whether or not such violation is intended), the Board of Directors or a
committee thereof shall be empowered to take any action as it deems advisable to
refuse to give effect to or to prevent such Transfer or other event, including,
but not limited to, refusing to give effect to such Transfer or other event on
the books of the Corporation, causing the Corporation to redeem such shares at
the then current Market Price and upon such terms and conditions as may be
specified by the Board of Directors in its sole discretion (including, but not
limited to, by means of the issuance of long-term indebtedness for the purpose
of such redemption), demanding the repayment of any distributions received in
respect of shares of Class L Preferred Stock acquired in violation of Section
11.1 of this Article or instituting proceedings to enjoin such Transfer or to
rescind such Transfer or attempted Transfer; provided, however, that any
Transfers or attempted Transfers (or, in the case of events other than a
Transfer, Beneficial Ownership) in violation of Section 11.1 of this Article,
regardless of any action (or non-action) by the Board of Directors or such
committee, (a) shall be void ab initio or (b) shall automatically result in the
transfer described in Section 11.3 of this Article; provided, further, that the
provisions of this Section 11.2 shall be subject to the provisions of Section
11.12 of this Article; provided, further, that neither the Board of Directors
nor any committee thereof may exercise such authority in a manner that
interferes with any ownership or transfer of
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Class L Preferred Stock that is expressly authorized pursuant to Section 11.8(C)
of this Article.
11.3. TRANSFER IN TRUST.
(A) ESTABLISHMENT OF TRUST. If, notwithstanding the other
provisions contained in this Article, at any time after the Issue Date there is
a purported Transfer (an "Excess Transfer") (whether or not such Transfer is the
result of transactions entered into through the facilities of the NYSE or other
securities exchange or an automated inter-dealer quotation system) or other
change in the capital structure of the Corporation (including, but not limited
to, any redemption of Equity Stock) or other event (including, but not limited
to, any acquisition of any share of Equity Stock) such that (a) any Person
(other than the Initial Holder or a Look-Through Entity) would Beneficially Own
shares of Class L Preferred Stock in excess of the Ownership Limit, or (b) the
Initial Holder would Beneficially Own shares of Class L Preferred Stock in
excess of the Initial Holder Limit, or (c) any Person that is a Look-Through
Entity would Beneficially Own shares of Class L Preferred Stock in excess of the
Look- Through Ownership Limit (in any such event, the Person, Initial Holder or
Look- Through Entity that would Beneficially Own shares of Class L Preferred
Stock in excess of the Ownership Limit, the Initial Holder Limit or the
Look-Through Entity Limit, respectively, is referred to as a "Prohibited
Transferee"), then, except as otherwise provided in Section 11.8 of this
Article, such shares of Class L Preferred Stock in excess of the Ownership
Limit, the Initial Holder Limit or the Look-Through Ownership Limit, as the case
may be, (rounded up to the nearest whole share) shall be automatically
transferred to a Trustee in his capacity as trustee of a Trust for the exclusive
benefit of one or more Charitable Beneficiaries. Such transfer to the Trustee
shall be deemed to be effective as of the close of business on the Business Day
prior to the Excess Transfer, change in capital structure or another event
giving rise to a potential violation of the Ownership Limit, the Initial Holder
Limit or the Look- Through Entity Ownership Limit.
(B) APPOINTMENT OF TRUSTEE. The Trustee shall be appointed by
the Corporation and shall be a Person unaffiliated with either the Corporation
or any Prohibited Transferee. The Trustee may be an individual or a bank or
trust company duly licensed to conduct a trust business.
(C) STATUS OF SHARES HELD BY THE TRUSTEE. Shares of Class L
Preferred Stock held by the Trustee shall be issued and outstanding shares of
capital stock of the Corporation. Except to the extent provided in Section
11.3(E), the Prohibited Transferee shall have no rights in the Class L Preferred
Stock held by the Trustee, and the Prohibited Transferee shall not benefit
economically from ownership of any shares held in trust by the Trustee, shall
have no rights to dividends and shall not possess any rights to vote or other
rights attributable to the shares held in the Trust.
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(D) DIVIDEND AND VOTING RIGHTS. The Trustee shall have all
voting rights and rights to dividends with respect to shares of Class L
Preferred Stock held in the Trust, which rights shall be exercised for the
benefit of the Charitable Beneficiary. Any dividend or distribution paid prior
to the discovery by the Corporation that the shares of Class L Preferred Stock
have been transferred to the Trustee shall be repaid to the Corporation upon
demand, and any dividend or distribution declared but unpaid shall be rescinded
as void ab initio with respect to such shares of Class L Preferred Stock. Any
dividends or distributions so disgorged or rescinded shall be paid over to the
Trustee and held in trust for the Charitable Beneficiary. Any vote cast by a
Prohibited Transferee prior to the discovery by the Corporation that the shares
of Class L Preferred Stock have been transferred to the Trustee will be
rescinded as void ab initio and shall be recast in accordance with the desires
of the Trustee acting for the benefit of the Charitable Beneficiary. The owner
of the shares at the time of the Excess Transfer, change in capital structure or
other event giving rise to a potential violation of the Ownership Limit, Initial
Holder Limit or Look-Through Entity Ownership Limit shall be deemed to have
given an irrevocable proxy to the Trustee to vote the shares of Class L
Preferred Stock for the benefit of the Charitable Beneficiary.
(E) RESTRICTIONS ON TRANSFER. The Trustee of the Trust may
sell the shares held in the Trust to a Person, designated by the Trustee, whose
ownership of the shares will not violate the Ownership Restrictions. If such a
sale is made, the interest of the Charitable Beneficiary shall terminate and
proceeds of the sale shall be payable to the Prohibited Transferee and to the
Charitable Beneficiary as provided in this Section 11.3(E). The Prohibited
Transferee shall receive the lesser of (1) the price paid by the Prohibited
Transferee for the shares or, if the Prohibited Transferee did not give value
for the shares (through a gift, devise or other transaction), the Market Price
of the shares on the day of the event causing the shares to be held in the Trust
and (2) the price per share received by the Trustee from the sale or other
disposition of the shares held in the Trust. Any proceeds in excess of the
amount payable to the Prohibited Transferee shall be payable to the Charitable
Beneficiary. If any of the transfer restrictions set forth in this Section
11.3(E) or any application thereof is determined in a final judgment to be void,
invalid or unenforceable by any court having jurisdiction over the issue, the
Prohibited Transferee may be deemed, at the option of the Corporation, to have
acted as the agent of the Corporation in acquiring the Class L Preferred Stock
as to which such restrictions would, by their terms, apply, and to hold such
Class L Preferred Stock on behalf of the Corporation.
(F) PURCHASE RIGHT IN STOCK TRANSFERRED TO THE TRUSTEE. Shares
of Class L Preferred Stock transferred to the Trustee shall be deemed to have
been offered for sale to the Corporation, or its designee, at a price per share
equal to the lesser of (i) the price per share in the transaction that resulted
in such transfer to the Trust (or, in the case of a devise or gift, the Market
Price at the time of such devise or gift) and (ii) the Market Price on the date
the Corporation, or its designee, accepts such offer. The Corporation shall have
the right to accept such offer for a period of
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90 days after the later of (i) the date of the Excess Transfer or other event
resulting in a transfer to the Trust and (ii) the date that the Board of
Directors determines in good faith that an Excess Transfer or other event
occurred.
(G) DESIGNATION OF CHARITABLE BENEFICIARIES. By written notice
to the Trustee, the Corporation shall designate one or more nonprofit
organizations to be the Charitable Beneficiary of the interest in the Trust
relating to such Prohibited Transferee if (i) the shares of Class L Preferred
Stock held in the Trust would not violate the Ownership Restrictions in the
hands of such Charitable Beneficiary and (ii) each Charitable Beneficiary is an
organization described in Sections 170(b)(1)(A), 170(c)(2) and 501(c)(3) of the
Code.
11.4 NOTICE OF RESTRICTED TRANSFER. Any Person that acquires or
attempts to acquire shares of Class L Preferred Stock in violation of Section
11.1 of this Article, or any Person that is a Prohibited Transferee such that
stock is transferred to the Trustee under Section 11.3 of this Article, shall
immediately give written notice to the Corporation of such event and shall
provide to the Corporation such other information as the Corporation may request
in order to determine the effect, if any, of such Transfer or attempted Transfer
or other event on the Corporation's status as a REIT. Failure to give such
notice shall not limit the rights and remedies of the Board of Directors
provided herein in any way.
11.5 OWNERS REQUIRED TO PROVIDE INFORMATION. From and after the Issue
Date certain record and Beneficial Owners and transferees of shares of Class L
Preferred Stock will be required to provide certain information as set out
below.
(A) ANNUAL DISCLOSURE. Every record and Beneficial Owner of
more than 5% (or such other percentage between 0.5% and 5%, as provided in the
applicable regulations adopted under the Code) of the number of Outstanding
shares of Class L Preferred Stock shall, upon written request by the
Corporation, such request to be made within 30 days after January 1 of each
year, give written notice to the Corporation stating the name and address of
such record or Beneficial Owner, the number of shares of Class L Preferred Stock
Beneficially Owned, and a full description of how such shares are held. Each
such record or Beneficial Owner of Class L Preferred Stock shall, upon demand by
the Corporation, disclose to the Corporation in writing such additional
information with respect to the Beneficial Ownership of the Class L Preferred
Stock as the Board of Directors, in its sole discretion, deems appropriate or
necessary to (i) comply with the provisions of the Code regarding the
qualification of the Corporation as a REIT under the Code and (ii) ensure
compliance with the Ownership Limit, the Initial Holder Limit or the Look-
Through Ownership Limit, as applicable. Each stockholder of record, including
without limitation any Person that holds shares of Class L Preferred Stock on
behalf of a Beneficial Owner, shall take all reasonable steps to obtain the
written notice described in this Section 11.5 from the Beneficial Owner.
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(B) DISCLOSURE AT THE REQUEST OF THE CORPORATION. Any Person
that is a Beneficial Owner of shares of Class L Preferred Stock and any Person
(including the stockholder of record) that is holding shares of Class L
Preferred Stock for a Beneficial Owner, and any proposed transferee of shares,
shall provide such information as the Corporation, in its sole discretion, may
request in order to determine the Corporation's status as a REIT, to comply with
the requirements of any taxing authority or other governmental agency, to
determine any such compliance or to ensure compliance with the Ownership Limit,
the Initial Holder Limit and the Look-Through Ownership Limit, and shall
provide a statement or affidavit to the Corporation setting forth the number of
shares of Class L Preferred Stock already Beneficially Owned by such stockholder
or proposed transferee and any related persons specified, which statement or
affidavit shall be in the form prescribed by the Corporation for that purpose.
11.6 REMEDIES NOT LIMITED. Nothing contained in this Article shall
limit the authority of the Board of Directors to take such other action as it
deems necessary or advisable (subject to the provisions of Section 11.12 of this
Article) (i) to protect the Corporation and the interests of its stockholders in
the preservation of the Corporation's status as a REIT and (ii) to insure
compliance with the Ownership Limit, the Initial Holder Limit and the
Look-Through Ownership Limit.
11.7 AMBIGUITY. In the case of an ambiguity in the application of any
of the provisions of Section 11 of this Article, or in the case of an ambiguity
in any definition contained in Section 11 of this Article, the Board of
Directors shall have the power to determine the application of the provisions of
this Article with respect to any situation based on its reasonable belief,
understanding or knowledge of the circumstances.
11.8 EXCEPTIONS. The following exceptions shall apply or may be
established with respect to the limitations of Section 11.1 of this Article.
(A) WAIVER OF OWNERSHIP LIMIT. The Board of Directors, upon
receipt of a ruling from the Internal Revenue Service or an opinion of tax
counsel or other evidence or undertaking acceptable to it, may waive the
application, in whole or in part, of the Ownership Limit to a Person subject to
the Ownership Limit, if such person is not an individual for purposes of Section
542(a) of the Code and is a corporation, partnership, estate or trust. In
connection with any such exemption, the Board of Directors may require such
representations and undertakings from such Person and may impose such other
conditions as the Board of Directors deems necessary, in its sole discretion, to
determine the effect, if any, of the proposed Transfer on the Corporation's
status as a REIT.
(B) PLEDGE BY INITIAL HOLDER. Notwithstanding any other
provision of this Article, the pledge by the Initial Holder of all or any
portion of the Class L Preferred Stock directly owned at any time or from time
to time shall not constitute a violation of Section 11.1 of this Article and the
pledgee shall not be subject to the
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Ownership Limit with respect to the Class L Preferred Stock so pledged to it
either as a result of the pledge or upon foreclosure.
(C) UNDERWRITERS. For a period of 270 days (or such longer
period of time as any underwriter described below shall hold an unsold allotment
of Class L Preferred Stock) following the purchase of Class L Preferred Stock by
an underwriter that (i) is a corporation, partnership or other legal entity and
(ii) participates in an offering of the Class L Preferred Stock, such
underwriter shall not be subject to the Ownership Limit with respect to the
Class L Preferred Stock purchased by it as a part of or in connection with such
offering and with respect to any Class L Preferred Stock purchased in connection
with market making activities.
11.9 LEGEND. Each certificate for Class L Preferred Stock shall bear
substantially the following legend:
"The shares of Class L Convertible Cumulative Preferred Stock
represented by this certificate are subject to restrictions on
transfer. No person may Beneficially Own shares of Class L Convertible
Cumulative Preferred Stock in excess of the Ownership Restrictions, as
applicable, with certain further restrictions and exceptions set forth
in the Charter (including the Articles Supplementary setting forth the
terms of the Class L Convertible Cumulative Preferred Stock). Any
Person that attempts to Beneficially Own shares of Class L Convertible
Cumulative Preferred Stock in excess of the applicable limitation must
immediately notify the Corporation. All capitalized terms in this
legend have the meanings ascribed to such terms in the Charter
(including the Articles Supplementary setting forth the terms of the
Class L Convertible Cumulative Preferred Stock), as the same may be
amended from time to time, a copy of which, including the restrictions
on transfer, will be sent without charge to each stockholder that so
requests. If the restrictions on transfer are violated (i) the transfer
of the shares of Class L Convertible Cumulative Preferred Stock
represented hereby will be void in accordance with the Charter
(including the Articles Supplementary setting forth the terms of the
Class L Convertible Cumulative Preferred Stock) or (ii) the shares of
Class L Convertible Cumulative Preferred Stock represented hereby will
automatically be transferred to a Trustee of a Trust for the benefit of
one or more Charitable Beneficiaries."
11.10 SEVERABILITY. If any provision of this Article or any application
of any such provision is determined in a final and unappealable judgment to be
void, invalid or unenforceable by any Federal or state court having jurisdiction
over the issues, the validity and enforceability of the remaining provisions
shall not be affected and other applications of such provision shall be affected
only to the extent necessary to comply with the determination of such court.
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11.11 BOARD OF DIRECTORS DISCRETION. Anything in this Article to the
contrary notwithstanding, the Board of Directors shall be entitled to take or
omit to take such actions as it in its discretion shall determine to be
advisable in order that the Corporation maintain its status as and continue to
qualify as a REIT, including, but not limited to, reducing the Ownership Limit,
the Initial Holder Limit and the Look- Through Ownership Limit in the event of a
change in law.
11.12 SETTLEMENT. Nothing in this Section 11 of this Article shall be
interpreted to preclude the settlement of any transaction entered into through
the facilities of the NYSE or other securities exchange or an automated
inter-dealer quotation system.
FOURTH: The terms of the Class L Cumulative Preferred Stock set forth
in Article Third hereof shall become Article XXIII of the Charter.
(the next page is the signature page)
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IN WITNESS WHEREOF, the Corporation has caused these presents to be
signed in its name and on its behalf by its Senior Vice President and Chief
Financial Officer and witnessed by its Assistant Secretary on May 28, 1999.
WITNESS: APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
/s/ KATHLEEN HARVEY /s/ TROY D. BUTTS
- ------------------------- ---------------------------
Kathleen Harvey Troy D. Butts
Assistant Secretary Senior Vice President and
Chief Financial Officer
THE UNDERSIGNED, Senior Vice President and Chief Financial Officer of
APARTMENT INVESTMENT AND MANAGEMENT COMPANY, who executed on behalf of the
Corporation the Articles Supplementary of which this Certificate is made a part,
hereby acknowledges in the name and on behalf of said Corporation the foregoing
Articles Supplementary to be the corporate act of said Corporation and hereby
certifies that the matters and facts set forth herein with respect to the
authorization and approval thereof are true in all material respects under the
penalties of perjury.
/s/ TROY D. BUTTS
---------------------------
Troy D. Butts
Senior Vice President and
Chief Financial Officer
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ARTICLES SUPPLEMENTARY
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
CLASS M CONVERTIBLE CUMULATIVE PREFERRED STOCK
(PAR VALUE $.01 PER SHARE)
APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation
(hereinafter called the "Corporation"), having its principal office in Baltimore
City, Maryland, hereby certifies to the Department of Assessments and Taxation
of the State of Maryland that:
FIRST: Pursuant to authority expressly vested in the Board of Directors of
the Corporation by Section 1.2 of Article IV of the Charter of the Corporation,
as amended to date (the "Charter"), the Board of Directors has duly divided and
classified 1,600,000 authorized but unissued shares of Class A Common Stock of
the Corporation, par value $.01 per share (the "Class A Common Stock"), into a
class designated as Class M Convertible Cumulative Preferred Stock, par value
$.01 per share, and has provided for the issuance of such class.
SECOND: The reclassification increases the number of shares classified as
Class M Convertible Cumulative Preferred Stock, par value $.01 per share, from
no shares immediately prior to the reclassification to 1,600,000 shares
immediately after the reclassification. The reclassification decreases the
number of shares classified as Class A Common Stock from 475,937,500 shares
immediately prior to the reclassification to 474,337,500 shares immediately
after the reclassification.
THIRD: The terms of the Class M Convertible Cumulative Preferred Stock
(including the preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends and other distributions,
qualifications, or terms or conditions of redemption) as set by the Board of
Directors are as follows:
1. NUMBER OF SHARES AND DESIGNATION.
This class of Preferred Stock shall be designated as Class M Convertible
Cumulative Preferred Stock, par value $.01 per share (the "Class M Preferred
Stock"), and One Million, Six Hundred Thousand (1,600,000) shall be the
authorized number of shares of such Class M Preferred Stock constituting such
class.
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2. DEFINITIONS.
For purposes of the Class M Preferred Stock, the following terms shall have
the meanings indicated:
"Act" shall mean the Securities Act of 1933, as amended.
"affiliate" of a Person means a Person that directly, or indirectly through
one or more intermediaries, controls or is controlled by, or is under
common control with, the Person specified.
"Aggregate Value" shall mean, with respect to any block of Equity Stock,
the sum of the product of (i) the number of shares of each class of Equity
Stock within such block multiplied by (ii) the corresponding Market Price
of one share of Equity Stock of such class.
"Beneficial Ownership" shall mean, with respect to any Person, ownership of
shares of Equity Stock equal to the sum of (i) the number of shares of
Equity Stock directly owned by such Person, (ii) the number of shares of
Equity Stock indirectly owned by such Person (if such Person is an
"individual" as defined in Section 542(a)(2) of the Code) taking into
account the constructive ownership rules of Section 544 of the Code, as
modified by Section 856(h)(1)(B) of the Code, and (iii) the number of
shares of Equity Stock that such Person is deemed to beneficially own
pursuant to Rule 13d-3 under the Exchange Act, provided that when applying
this definition of Beneficial Ownership to the Initial Holder, clause (iii)
of this definition, and clause (a) (ii) of the definition of "Person" shall
be disregarded. The terms "Beneficial Owner," "Beneficially Owns" and
"Beneficially Owned" shall have the correlative meanings.
"Board of Directors" shall mean the Board of Directors of the Corporation
or any committee authorized by such Board of Directors to perform any of
its responsibilities with respect to the Class M Preferred Stock; provided
that, for purposes of paragraph (a) of Section 9 of this Article, the term
"Board of Directors" shall not include any such committee.
"Business Day" shall mean any day other than a Saturday, Sunday or a day on
which state or federally chartered banking institutions in New York, New
York are not required to be open.
"Charitable Beneficiary" shall mean one or more beneficiaries of the Trust
as determined pursuant to Section 11.3 of this Article, each of which shall
be an organization described in Section 170(b)(1)(A), 170(c)(2) and
501(c)(3) of the Code.
"Class M Preferred Stock" shall have the meaning set forth in Section 1 of
this Article.
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"Closing Price" shall mean, when used with respect to a share of any Equity
Stock and for any date, the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case, as reported in the principal
consolidated transaction reporting system with respect to securities listed
or admitted to trading on the NYSE or, if the Equity Stock is not listed or
admitted to trading on the NYSE, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the
principal national securities exchange on which the Equity Stock is listed
or admitted to trading or, if the Equity Stock is not listed or admitted to
trading on any national securities exchange, the last quoted price, or if
not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System or, if such system is
no longer in use, the principal other automated quotation system that may
then be in use or, if the Equity Stock is not quoted by any such
organization, the average of the closing bid and asked prices as furnished
by a professional market maker making a market in the Equity Stock selected
by the Board of Directors of the Corporation.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, or any successor statute thereto. Reference to any provision of
the Code shall mean such provision as in effect from time to time, as the
same may be amended, and any successor thereto, as interpreted by any
applicable regulations or other administrative pronouncements as in effect
from time to time.
"Common Stock" shall mean the Class A Common Stock, par value $.01 per
share, of the Corporation, and such other shares of the Corporation's
capital stock into which outstanding shares of such Class A Common Stock
shall be reclassified.
"Conversion Price" shall mean the conversion price per share of Class A
Common Stock for which each share of Class M Preferred Stock is
convertible, as such Conversion Price may be adjusted pursuant to Section 7
of this Article. The initial Conversion Price shall be $44.00 (equivalent
to a conversion rate of approximately 0.5681818 shares of Class A Common
Stock for each share of Class M Preferred Stock).
"Dividend Payment Date" shall mean January 13, April 13, July 13 and
October 13 of each year; provided, that if any Dividend Payment Date falls
on any day other than a Business Day, the dividend payment payable on such
Dividend Payment Date shall be paid on the Business Day immediately
following such Dividend Payment Date and no interest shall accrue on such
dividend from such date to such Dividend Payment Date.
"Dividend Periods" shall mean the Initial Dividend Period and each
subsequent quarterly dividend period commencing on and including January
13, April 13, July 13 and October 13 of each year and ending on and
including the day preceding the first day of the next succeeding Dividend
Period, other than the Dividend Period during which any Class M
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Preferred Stock shall be redeemed pursuant to Section 5 hereof, which shall
end on and include the Redemption Date with respect to the Class M
Preferred Stock being redeemed.
"Equity Stock" shall mean one or more shares of any class of capital stock
of the Corporation.
"Excess Transfer" has the meaning set forth in Section 11.3(A) of this
Article.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Issue Date" shall mean January 13, 2000.
"Initial Dividend Period" shall mean the period commencing on and including
the Issue Date and ending on and including April 12, 2000.
"Initial Holder" shall mean Terry Considine.
"Initial Holder Limit" shall mean a number of the Outstanding shares of
Class M Preferred Stock of the Corporation having an Aggregate Value not in
excess of the excess of (x) 15% of the Aggregate Value of all Outstanding
shares of Equity Stock over (y) the Aggregate Value of all shares of Equity
Stock other than Class M Preferred Stock that are Beneficially Owned by the
Initial Holder. From the Issue Date, the secretary of the Corporation, or
such other person as shall be designated by the Board of Directors, shall
upon request make available to the representative(s) of the Initial Holder
and the Board of Directors, a schedule that sets forth the then-current
Initial Holder Limit applicable to the Initial Holder.
"Junior Stock" shall have the meaning set forth in paragraph (c) of Section
8 of this Article.
"Liquidation Preference" shall have the meaning set forth in paragraph (a)
of Section 4 of this Article.
"Look-Through Entity" shall mean a Person that is either (i) described in
Section 401(a) of the Code as provided under Section 856(h)(3) of the Code
or (ii) registered under the Investment Company Act of 1940.
"Look-Through Ownership Limit" shall mean, for any Look-Through Entity, a
number of the Outstanding shares of Class M Preferred Stock of the
Corporation having an Aggregate Value not in excess of the excess of (x)
15% of the Aggregate Value of all Outstanding shares of Equity
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Stock over (y) the Aggregate Value of all shares of Equity Stock other than
Class M Preferred Stock that are Beneficially Owned by the Look-Through
Entity.
"Market Price" on any date shall mean, with respect to any share of Equity
Stock, the Closing Price of a share of that class of Equity Stock on the
Trading Day immediately preceding such date.
"NYSE" shall mean the New York Stock Exchange, Inc.
"Outstanding" shall mean issued and outstanding shares of Equity Stock of
the Corporation, provided that for purposes of the application of the
Ownership Limit, the Look-Through Ownership Limit or the Initial Holder
Limit to any Person, the term "Outstanding" shall be deemed to include the
number of shares of Equity Stock that such Person alone, at that time,
could acquire pursuant to any options or convertible securities.
"Ownership Limit" shall mean, for any Person other than the Initial Holder
or a Look-Through Entity, a number of the Outstanding shares of Class M
Preferred Stock of the Corporation having an Aggregate Value not in excess
of the excess of (x) 8.7% of the Aggregate Value of all Outstanding shares
of Equity Stock over (y) the Aggregate Value of all shares of Equity Stock
other than Class M Preferred Stock that are Beneficially Owned by the
Person.
"Ownership Restrictions" shall mean collectively the Ownership Limit, as
applied to Persons other than the Initial Holder or Look-Through Entities,
the Initial Holder Limit, as applied to the Initial Holder, and the
Look-Through Ownership Limit, as applied to Look-Through Entities.
"Parity Stock" shall have the meaning set forth in paragraph (b) of Section
8 of this Article.
"Person" shall mean (a) for purposes of Section 11 of this Article, (i) an
individual, corporation, partnership, estate, trust (including a trust
qualifying under Section 401(a) or 501(c) of the Code), association,
"private foundation," within the meaning of Section 509(a) of the Code,
joint stock company or other entity, and (ii) a "group," as that term is
used for purposes of Section 13(d)(3) of the Exchange Act, and (b) for
purposes of the remaining Sections of this Article, any individual, firm,
partnership, corporation or other entity, including any successor (by
merger or otherwise) of such entity.
"Prohibited Transferee" has the meaning set forth in Section 11.3(A) of
this Article.
"Record Date" shall have the meaning set forth in paragraph (a) of Section
3 of this Article.
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"Redemption Date" shall mean, in the case of any redemption of any shares
of Class M Preferred Stock, the date fixed for redemption of such shares.
"Redemption Price" shall mean, with respect to any shares of Class M
Preferred Stock to be redeemed, (i) if the Redemption Date occurs during
the period from and including January 13, 2003, to but excluding January
13, 2004, 102% of the Liquidation Preference thereof, and (ii) if the
Redemption Date occurs on or after January 13, 2004, 100% of the
Liquidation Preference thereof, plus, in the case of clause (i) or (ii),
all accumulated, accrued and unpaid dividends (whether or not earned or
declared), if any, to the Redemption Date.
"REIT" shall mean a "real estate investment trust," as defined in Section
856 of the Code.
"Senior Stock" shall have the meaning set forth in paragraph (a) of Section
8 of this Article.
"set apart for payment" shall be deemed to include, without any action
other than the following, the recording by the Corporation in its
accounting ledgers of any accounting or bookkeeping entry which indicates,
pursuant to a declaration of dividends or other distribution by the Board
of Directors, the allocation of funds to be so paid on any series or class
of capital stock of the Corporation; provided, however, that if any funds
for any class or series of Junior Stock or any class or series of Parity
Stock are placed in a separate account of the Corporation or delivered to a
disbursing, paying or other similar agent, then "set apart for payment"
with respect to the Class M Preferred Stock shall mean placing such funds
in a separate account or delivering such funds to a disbursing, paying or
other similar agent.
"Trading Day" shall mean, when used with respect to any Equity Stock, (i)
if the Equity Stock is listed or admitted to trading on the NYSE, a day on
which the NYSE is open for the transaction of business, (ii) if the Equity
Stock is not listed or admitted to trading on the NYSE but is listed or
admitted to trading on another national securities exchange or automated
quotation system, a day on which the principal national securities exchange
or automated quotation system, as the case may be, on which the Equity
Stock is listed or admitted to trading is open for the transaction of
business, or (iii) if the Equity Stock is not listed or admitted to trading
on any national securities exchange or automated quotation system, any day
other than a Saturday, a Sunday or a day on which banking institutions in
the State of New York are authorized or obligated by law or executive order
to close.
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"Transfer" shall mean any sale, transfer, gift, assignment, devise or other
disposition of a share of Class M Preferred Stock (including (i) the
granting of an option or any series of such options or entering into any
agreement for the sale, transfer or other disposition of Class M Preferred
Stock or (ii) the sale, transfer, assignment or other disposition of any
securities or rights convertible into or exchangeable for Class M Preferred
Stock), whether voluntary or involuntary, whether of record or Beneficial
Ownership, and whether by operation of law or otherwise (including, but not
limited to, any transfer of an interest in other entities that results in a
change in the Beneficial Ownership of shares of Class M Preferred Stock).
The term "Transfers" and "Transferred" shall have correlative meanings.
"Transfer Agent" means such transfer agent as may be designated by the
Board of Directors or their designee as the transfer agent for the Class M
Preferred Stock; provided, that if the Corporation has not designated a
transfer agent then the Corporation shall act as the transfer agent for the
Class M Preferred Stock.
"Trust" shall mean the trust created pursuant to Section 11.3 of this
Article.
"Trustee" shall mean the Person unaffiliated with either the Corporation or
the Prohibited Transferee that is appointed by the Corporation to serve as
trustee of the Trust.
"Voting Preferred Stock" shall have the meaning set forth in Section 9 of
this Article.
3. DIVIDENDS.
(a) The holders of Class M Preferred Stock shall be entitled to
receive, when and as declared by the Board of Directors, out of funds legally
available for that purpose, quarterly cash dividends on the Class M Preferred
Stock in an amount per share equal to (i) during the period from the Issue Date
through and including January 13, 2003, the greater of $0.53125 or the quarterly
cash dividend paid or payable (determined on each Dividend Payment Date by
reference to the dividend most recently declared on the Class A Common Stock) on
the number of shares of Class A Common Stock (or portion thereof) into which a
share of Class M Preferred Stock is then convertible, and (ii) during the period
from and after January 13, 2003, the greater of $0.578125 or the quarterly cash
dividend paid or payable (determined on each Dividend Payment Date by reference
to the dividend most recently declared on the Class A Common Stock) on the
number of shares of Class A Common Stock (or portion thereof) into which a share
of Class M Preferred Stock is then convertible. Such dividends shall be
cumulative from the Issue Date, whether or not in any Dividend Period or Periods
such dividends shall be declared or there shall be funds of the Corporation
legally available for the payment of such dividends, and shall be payable
quarterly in arrears on each Dividend Payment Date, commencing on April 13,
2000. Each such dividend shall be payable in arrears to the holders of record of
the Class M Preferred Stock, as they appear on the stock records of the
Corporation at the close of business on the tenth Business Day immediately
preceding such Dividend Payment
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Date (each a "Record Date"). Accumulated, accrued and unpaid dividends for any
past Dividend Periods may be declared and paid at any time, without reference to
any regular Dividend Payment Date, to holders of record on such date, which date
shall not precede by more than 45 days the payment date thereof, as may be fixed
by the Board of Directors.
(b) Any dividend payable on the Class M Preferred Stock for any partial
dividend period shall be computed ratably on the basis of twelve 30-day months
and a 360-day year. Holders of Class M Preferred Stock shall not be entitled to
any dividends, whether payable in cash, property or stock, in excess of full
cumulative dividends, as herein provided, on the Class M Preferred Stock. No
interest, or sum of money in lieu of interest, shall be payable in respect of
any dividend payment or payments on the Class M Preferred Stock that may be in
arrears.
(c) So long as any of the shares of Class M Preferred Stock are
outstanding, except as described in the immediately following sentence, no
dividends shall be declared or paid or set apart for payment by the Corporation
and no other distribution of cash or other property shall be declared or made,
directly or indirectly, by the Corporation with respect to any shares of Parity
Stock unless, in each case, dividends equal to the full amount of accumulated,
accrued and unpaid dividends on all outstanding shares of Class M Preferred
Stock 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 payment of such dividends on the Class M Preferred Stock for all Dividend
Periods ending on or prior to the date such dividend or distribution is
declared, paid, set apart for payment or made, as the case may be, with respect
to such shares of Parity Stock. When dividends are not paid in full or a sum
sufficient for such payment is not set apart, as aforesaid, all dividends
declared upon the Class M Preferred Stock and all dividends declared upon any
shares of Parity Stock shall be declared ratably in proportion to the respective
amounts of dividends accumulated, accrued and unpaid on the Class M Preferred
Stock and accumulated, accrued and unpaid on such Parity Stock.
(d) So long as any of the shares of Class M Preferred Stock are
outstanding, no dividends (other than dividends or distributions paid in shares
of, or options, warrants or rights to subscribe for or purchase shares of,
Junior Stock) shall be declared or paid or set apart for payment by the
Corporation and no other distribution of cash or other property shall be
declared or made, directly or indirectly, by the Corporation with respect to any
shares of Junior Stock, nor shall any shares of Junior Stock be redeemed,
purchased or otherwise acquired (other than a redemption, purchase or other
acquisition of Common Stock made for purposes of an employee incentive or
benefit plan of the Corporation or any subsidiary) for any consideration (or any
moneys be paid to or made available for a sinking fund for the redemption of any
shares of any such stock), directly or indirectly, by the Corporation (except by
conversion into or exchange for shares of, or options, warrants or rights to
subscribe for or purchase shares of, Junior Stock), nor shall any other cash or
other property otherwise be paid or distributed to or for the benefit of any
holder of shares of Junior Stock in respect thereof, directly or indirectly, by
the
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Corporation unless, in each case, dividends equal to the full amount of all
accumulated, accrued and unpaid dividends on all outstanding shares of Class M
Preferred Stock have been declared and paid, or such dividends have been
declared and a sum sufficient for the payment thereof has been set apart for
such payment, on all outstanding shares of Class M Preferred Stock for all
Dividend Periods ending on or prior to the date such dividend or distribution is
declared, paid, set apart for payment or made with respect to such shares of
Junior Stock, or the date such shares of Junior Stock are redeemed, purchased or
otherwise acquired or monies paid to or made available for any sinking fund for
such redemption, or the date any such cash or other property is paid or
distributed to or for the benefit of any holders of Junior Stock in respect
thereof, as the case may be.
Notwithstanding the provisions of this Section 3, the Corporation shall
not be prohibited from (i) declaring or paying or setting apart for payment any
dividend or distribution on any shares of Parity Stock or (ii) redeeming,
purchasing or otherwise acquiring any Parity Stock, in each case, if such
declaration, payment, redemption, purchase or other acquisition is necessary in
order to maintain the continued qualification of the Corporation as a REIT under
Section 856 of the Code.
4. LIQUIDATION PREFERENCE.
(a) In the event of any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, before any payment or
distribution by the Corporation (whether of capital, surplus or otherwise) shall
be made to or set apart for the holders of Junior Stock, the holders of shares
of Class M Preferred Stock shall be entitled to receive the greater of (i)
Twenty-Five Dollars ($25) per share of Class M Preferred Stock (the "Liquidation
Preference"), plus an amount equal to all dividends (whether or not earned or
declared) accumulated, accrued and unpaid thereon to the date of final
distribution to such holders, or (ii) the amount that would be payable to the
holders of Class M Preferred Stock if they had converted all outstanding shares
of Class M Preferred Stock into shares of Common Stock immediately prior to such
liquidation, dissolution or winding up; but such holders shall not be entitled
to any further payment. Until the holders of the Class M Preferred Stock have
been paid the Liquidation Preference in full, plus an amount equal to all
dividends (whether or not earned or declared) accumulated, accrued and unpaid
thereon to the date of final distribution to such holders, no payment will be
made to any holder of Junior Stock upon the liquidation, dissolution or winding
up of the Corporation. If, upon any liquidation, dissolution or winding up of
the Corporation, the assets of the Corporation, or proceeds thereof,
distributable among the holders of Class M Preferred Stock shall be insufficient
to pay in full the preferential amount aforesaid and liquidating payments on any
other shares of any class or series of Parity Stock, then such assets, or the
proceeds thereof, shall be distributed among the holders of Class M Preferred
Stock and any such other Parity Stock ratably in the same proportion as the
respective amounts that would be payable on such Class M Preferred Stock and any
such other Parity Stock if all amounts payable thereon were paid in full. For
the purposes of this Section 4, (i) a
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consolidation or merger of the Corporation with one or more corporations, (ii) a
sale or transfer of all or substantially all of the Corporation's assets, or
(iii) a statutory share exchange shall not be deemed to be a liquidation,
dissolution or winding up, voluntary or involuntary, of the Corporation.
(b) Upon any liquidation, dissolution or winding up of the Corporation,
after payment shall have been made in full to the holders of Class M Preferred
Stock and any Parity Stock, as provided in Section 4(a), any other series or
class or classes of Junior Stock shall, subject to the respective terms thereof,
be entitled to receive any and all assets remaining to be paid or distributed,
and the holders of the Class M Preferred Stock and any Parity Stock shall not be
entitled to share therein.
5. REDEMPTION AT THE OPTION OF THE CORPORATION.
(a) Shares of Class M Preferred Stock shall not be redeemable by the
Corporation prior to January 13, 2003, except as set forth in Section 11.2 of
this Article. On and after January 13, 2003, except as set forth in paragraph
(e) below, the Corporation, at its option, may redeem shares of Class M
Preferred Stock, in whole but not in part, at a redemption price payable in cash
equal to the Redemption Price applicable thereto. In the event of a redemption
of shares of Class M Preferred Stock, if the Redemption Date occurs after a
dividend record date and on or prior to the related Dividend Payment Date, the
dividend payable on such Dividend Payment Date in respect of such shares called
for redemption shall be payable on such Dividend Payment Date to the holders of
record at the close of business on such dividend record date notwithstanding the
redemption of such shares, and shall not be payable as part of the redemption
price for such shares.
(b) The Redemption Date shall be selected by the Corporation, shall be
specified in the notice of redemption and shall be not less than 30 days nor
more than 60 days after the date notice of redemption is sent by the
Corporation.
(c) If full cumulative dividends on all outstanding shares of Class M
Preferred Stock have not been declared and paid, or declared and set apart for
payment, no shares of Class M Preferred Stock may be redeemed unless all
outstanding shares of Class M Preferred Stock are simultaneously redeemed.
Neither the Corporation nor any affiliate of the Corporation may purchase or
acquire shares of Class M Preferred Stock, otherwise than pursuant to a purchase
or exchange offer made on the same terms to all holders of shares of Class M
Preferred Stock.
(d) If the Corporation shall redeem shares of Class M Preferred Stock
pursuant to paragraph (a) of this Section 5, notice of such redemption shall be
given to each holder of record of the shares to be redeemed. Such notice shall
be provided by first class mail, postage prepaid, at such holder's address as
the same appears on the stock records of the Corporation. Neither the failure to
mail any notice required by this paragraph (d), nor any defect
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therein or in the mailing thereof to any particular holder, shall affect the
sufficiency of the notice or the validity of the proceedings for redemption with
respect to the other holders. Any notice which has been mailed in the manner
herein provided shall be conclusively presumed to have been duly given on the
date mailed whether or not the holder receives the notice. Each such notice
shall state, as appropriate: (i) the Redemption Date; (ii) the place or places
at which certificates for such shares are to be surrendered for cash; and (iii)
the redemption price payable on such Redemption Date, including, without
limitation, a statement as to whether or not accumulated, accrued and unpaid
dividends will be payable as part of the redemption price, or payable on the
next Dividend Payment Date to the record holder at the close of business on the
relevant record date as described in the next succeeding sentence. Notice having
been mailed as aforesaid, from and after the Redemption Date (unless the
Corporation shall fail to make available the amount of cash necessary to effect
such redemption), (i) dividends on the shares of Class M Preferred Stock so
called for redemption shall cease to accumulate or accrue on the shares of Class
M Preferred Stock called for redemption, (ii) said shares shall no longer be
deemed to be outstanding, and (iii) all rights of the holders thereof as holders
of Class M Preferred Stock of the Corporation shall cease except the right to
receive the cash payable upon such redemption, without interest thereon, upon
surrender of their certificates if so required; provided, however, that if the
Redemption Date for any shares of Class M Preferred Stock occurs after any
dividend record date and on or prior to the related Dividend Payment Date, the
full dividend payable on such Dividend Payment Date in respect of such shares of
Class M Preferred Stock called for redemption shall be payable on such Dividend
Payment Date to the holders of record of such shares at the close of business on
the corresponding dividend record date notwithstanding the prior redemption of
such shares. The Corporation's obligation to make available the cash necessary
to effect such redemption in accordance with the preceding sentence shall be
deemed fulfilled if, on or before the applicable Redemption Date, the
Corporation shall irrevocably deposit in trust with a bank or trust company
(which may not be an affiliate of the Corporation) that has, or is an affiliate
of a bank or trust company that has, a capital and surplus of at least
$50,000,000, such amount of cash as is necessary for such redemption plus, if
such Redemption Date occurs after any dividend record date and on or prior to
the related Dividend Payment Date, such amount of cash as is necessary to pay
the dividend payable on such Dividend Payment Date in respect of such shares of
Class M Preferred Stock called for redemption, with irrevocable instructions
that such cash be applied to the redemption of the shares of Class M Preferred
Stock so called for redemption and, if applicable, the payment of such dividend.
No interest shall accrue for the benefit of the holders of shares of Class M
Preferred Stock to be redeemed on any cash so set aside by the Corporation.
Subject to applicable escheat laws, any such cash unclaimed at the end of two
years from the Redemption Date shall revert to the general funds of the
Corporation, after which reversion the holders of shares of Class M Preferred
Stock so called for redemption shall look only to the general funds of the
Corporation for the payment of such cash.
As promptly as practicable after the surrender in accordance with such
notice of the certificates for any such shares of Class M Preferred Stock to be
so redeemed (properly endorsed
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or assigned for transfer, if the Corporation shall so require and the notice
shall so state), such certificates shall be exchanged for cash (without interest
thereon) for which such shares have been redeemed in accordance with such
notice.
6. STATUS OF REACQUIRED STOCK.
All shares of Class M Preferred Stock that have been issued and reacquired
in any manner by the Corporation (including, without limitation, shares of Class
M Preferred Stock which have been surrendered for conversion) shall be returned
to the status of authorized but unissued shares of Class M Preferred Stock.
7. CONVERSION.
7.1 CONVERSION AT HOLDERS' OPTION.
At any time on or after the Issue Date, except as set forth in Section
7.2(i) of this Article, holders of shares of Class M Preferred Stock shall have
the right to convert all or a portion of such shares into shares of Class A
Common Stock, as follows:
(a) Subject to and upon compliance with the provisions of this Section
7, each share of Class M Preferred Stock shall, at the option of the holder
thereof, be convertible at any time (unless such share is called for redemption,
then to and including but not after the close of business on the date
immediately prior to the Redemption Date, unless the Corporation shall default
in payment due upon redemption thereof), into that number of fully paid and
non-assessable shares of Class A Common Stock (calculated as to each conversion
to the nearest 1/100th of a share) obtained by dividing $25 by the Conversion
Price in effect at such time and by surrender of the certificate representing
such shares to be converted in the manner provided in subsection (b) of this
Section 7.1.
(b) In order to convert shares of Class M Preferred Stock, the holder
of the shares to be converted shall surrender the certificate representing such
shares at any office or agency maintained by the Corporation for such purpose,
accompanied by the funds, if any, required by the last paragraph of this
subsection (b) to be paid by such holder, and shall give written notice of
conversion in the form provided on such certificate representing shares of Class
M Preferred Stock (or such other notice as is acceptable to the Corporation) to
the Corporation at such office or agency that the holder elects to convert the
shares of Class M Preferred Stock specified in such notice. Such notice shall
also state the name or names, together with address or addresses, in which the
certificate or certificates for shares of Class A Common Stock which shall be
issuable in such conversion shall be issued. Unless the shares issuable on
conversion are to be issued in the same name as the name in which such share of
Class M Preferred Stock is registered, each certificate representing a share of
Class M Preferred Stock surrendered for conversion shall be accompanied by
instruments of transfer, in form satisfactory to the
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Corporation, duly executed by the holder or such holder's duly authorized
attorney and an amount sufficient to pay any transfer or similar tax (or
evidence reasonably satisfactory to the Corporation that such taxes have been
paid).
As promptly as practicable after the surrender of certificates
representing such shares of Class M Preferred Stock and the receipt of such
notice, instruments of transfer and funds, if any, as aforesaid, the Corporation
shall issue and shall deliver at such office or agency to such holder, or as
designated in such holder's written instructions, a certificate or certificates
for the number of full shares of Class A Common Stock issuable upon the
conversion of such share or shares of Class M Preferred Stock in accordance with
provisions of this Section 7, and a check or cash in respect of (i) the cash
amount payable to such holder, if any, referred to in the last paragraph of this
subsection (b), and (ii) any fractional interest in a share of Class A Common
Stock arising upon such conversion, as provided in paragraph (c) of this Section
7.1.
Each conversion shall be deemed to have been effected immediately prior
to the close of business on the date on which certificates representing such
shares of Class M Preferred Stock shall have been surrendered and such notice
(and any applicable instruments of transfer and any required taxes) received by
the Corporation as aforesaid, and the Person or Persons in whose name or names
any certificate or certificates for shares of Class A Common Stock shall be
issuable upon such conversion shall be deemed to have become the holder or
holders of record of the shares represented thereby at such time on such date,
and such conversion shall be at the Conversion Price in effect at such time on
such date, unless the stock transfer books of the Corporation shall be closed on
that date, in which event such Person or Persons shall be deemed to have become
such holder or holders of record at the close of business on the next succeeding
day on which such stock transfer books are open, but such conversion shall be at
the Conversion Price in effect on the date on which such shares shall have been
surrendered and such notice received by the Corporation.
Except as provided herein, the Corporation will make no payment or
allowance for unpaid dividends, whether or not in arrears, on converted shares
or for dividends (other than dividends on the Class A Common Stock the record
date for which is after the conversion date and which the Corporation shall pay
in the ordinary course to the record holder as of the record date) on the Class
A Common Stock issued upon such conversion. Holders of Class M Preferred Stock
at the close of business on a Record Date will be entitled to receive an amount
equal to the dividend payable on such shares on the corresponding Dividend
Payment Date notwithstanding the conversion of such shares following such Record
Date. In addition to any such dividend, if the Dividend Adjustment Amount (as
defined below) with respect to any shares of Class M Preferred Stock surrendered
for conversion is positive, the holders of such shares shall, as of the date of
conversion, be entitled to receive a cash payment equal to the Dividend
Adjustment Amount. If the Dividend Adjustment Amount with respect to any shares
of Class M Preferred Stock surrendered for conversion is negative, such shares
must be accompanied by payment of a cash amount equal to the absolute value of
the Dividend Adjustment Amount. As used herein,
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the "Dividend Adjustment Amount" shall mean, with respect to any share of Class
M Preferred Stock that has been surrendered for conversion, the sum of:
(i) the aggregate amount of any dividends (whether or not earned
or declared) that are accumulated, accrued and unpaid on such share as of the
time of such conversion; minus
(ii) if such share has been surrendered for conversion during the
period between the close of business on any Record Date and the opening of
business on the corresponding Dividend Payment Date, the amount of the dividend
payable thereon on such Dividend Payment Date; minus
(iii) an amount equal to the product of (A) the number (which may
be a fraction) of shares of Class A Common Stock into which a share of Class M
Preferred Stock is then convertible, multiplied by (B) the quarterly cash
dividend per share that was most recently declared on the Class A Common Stock,
determined as of the date of conversion, and if the date of such conversion is
not a record date for the payment of a dividend on the Class A Common Stock,
multiplied by (C) a fraction, the numerator of which is the number of days in
the period from and including the date of the most recent record date for the
payment of a dividend on the Class A Common Stock to but excluding the date of
such conversion, and the denominator of which is 90.
(c) No fractional shares of Class A Common Stock or scrip representing
fractions of a share of Class A Common Stock shall be issued upon conversion of
shares of Class M Preferred Stock. If more than one share of Class M Preferred
Stock shall be surrendered for conversion at one time by the same holder, the
number of full shares of Class A Common Stock issuable upon conversion thereof
shall be computed on the basis of the aggregate number of shares of Class M
Preferred Stock so surrendered. In lieu of any fractional interest in a share of
Class A Common Stock that would otherwise be deliverable upon the conversion of
any share of Class M Preferred Stock, the Corporation shall pay to the holder of
such shares an amount in cash (computed to the nearest cent) equal to the
Closing Price of the Class A Common Stock on the Trading Day immediately
preceding the date of conversion, multiplied by the fractional interest that
otherwise would have been deliverable upon conversion of such share.
7.2 ADJUSTMENTS TO CONVERSION PRICE
(a) The Conversion Price shall be adjusted from time to time as
follows:
(i) If the Corporation shall after the Issue Date (A) pay a
dividend or make a distribution on its Class A Common Stock in shares of Class A
Common Stock, (B) subdivide its outstanding shares of Class A Common Stock into
a greater number of shares, (C) combine its outstanding shares of Class A Common
Stock into a smaller number of shares or (D)
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issue any shares of capital stock by reclassification of its outstanding Class A
Common Stock, then, in each such case, the Conversion Price in effect
immediately prior to such action shall be adjusted so that the holder of any
share of Class M Preferred Stock thereafter surrendered for conversion shall be
entitled to receive the number of shares of Class A Common Stock or other
capital stock of the Corporation which such holder would have owned or been
entitled to receive immediately following such action had such share been
converted immediately prior to the occurrence of such event. An adjustment made
pursuant to this subsection (i) of this Section 7.2(a) shall become effective
immediately after the record date, in the case of a dividend or distribution, or
immediately after the effective date, in the case of a subdivision, combination
or reclassification. If, as a result of an adjustment made pursuant to this
subsection (i), the holder of any share of Class M Preferred Stock thereafter
surrendered for conversion shall become entitled to receive shares of two or
more classes of capital stock or shares of Class A Common Stock and other
capital stock of the Corporation, the Board of Directors (whose determination
shall be conclusive and shall be described in a statement filed by the
Corporation with the Transfer Agent) shall determine the allocation of the
adjusted Conversion Price between or among shares of such classes of capital
stock or shares of Class A Common Stock and other capital stock.
(ii) If the Corporation shall, after the Issue Date, issue
rights, options or warrants to all holders of its outstanding shares of Class A
Common Stock entitling them (for a period expiring within 45 days after the
record date described below) to subscribe for or purchase shares of Class A
Common Stock at a price per share less than the current market price per share
(determined pursuant to subsection (iv) of this Section 7.2(a)) of the Class A
Common Stock (other than pursuant to any stock option, restricted stock or other
incentive or benefit plan or stock ownership or purchase plan for the benefit of
employees, directors or officers or any dividend reinvestment plan of the
Corporation in effect at the time hereof or any other similar plan adopted or
implemented hereafter), then the Conversion Price in effect immediately prior
thereto shall be adjusted so that it shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the record date
by a fraction, the numerator of which shall be the sum of (A) the number of
shares of Class A Common Stock outstanding on the record date and (B) the number
of shares which the aggregate proceeds to the Corporation from the exercise of
such rights, options or warrants for Class A Common Stock would purchase at such
current market price, and the denominator of which shall be the sum of (A) the
number of shares of Class A Common Stock outstanding on the record date and (B)
the number of additional shares of Class A Common Stock offered for subscription
or purchase pursuant to such rights, options or warrants. Such adjustment shall
be made successively whenever any rights, options or warrants are issued, and
shall become effective immediately after the record date for the determination
of stockholders entitled to receive such rights, options or warrants; provided,
however, that if all of the shares of Class A Common Stock offered for
subscription or purchase are not delivered upon the exercise of such rights,
options or warrants, upon the expiration of such rights, options or warrants,
the Conversion Price shall be readjusted to the Conversion Price which would
have been in effect had the numerator and the denominator of the foregoing
fraction and the resulting adjustment been made based upon the number of shares
of Class A Common
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Stock actually delivered upon the exercise of such rights, options or warrants
rather than upon the number of shares of Class A Common Stock offered for
subscription or purchase. In determining whether any rights, options or warrants
entitle the holders to subscribe for or purchase shares of Class A Common Stock
at less than such current market price, and in determining the aggregate
offering price of such shares of Class A Common Stock, there shall be taken into
account any consideration received by the Corporation for such rights, options
or warrants, with the value of such consideration, if other than cash,
determined by the Board of Directors (whose determination shall be conclusive
and shall be described in a statement filed by the Corporation with the Transfer
Agent).
(iii) In case the Corporation shall, by dividend or otherwise,
distribute to all holders of its outstanding Class A Common Stock any capital
stock (other than Class A Common Stock), evidences of its indebtedness or assets
or rights or warrants to subscribe for or purchase securities of the Corporation
(excluding (A) those referred to in subsections (i) and (ii) of this Section
7.2(a), (B) dividends and distributions paid in cash out of the retained
earnings of the Corporation, and (C) distributions upon mergers or
consolidations to which subsection (b) of this Section 7.2 applies), then, in
each such case, the Conversion Price shall be adjusted to equal the price
determined by multiplying the Conversion Price in effect immediately prior to
the record date of such distribution by a fraction, the numerator of which shall
be the current market price per share (determined pursuant to subsection (iv) of
this Section 7.2(a)) of the Class A Common Stock, less the fair market value on
such record date (determined by the Board or Directors, whose determination
shall be conclusive and shall be described in a statement filed by the
Corporation with the Transfer Agent) of the portion of the capital stock or
assets or the evidences of indebtedness or assets so distributed to the holder
of one share of Class A Common Stock or of such subscription rights or warrants
applicable to one share of Class A Common Stock, and the denominator of which
shall be such current market price per share of Class A Common Stock. Such
adjustment shall become effective immediately after the record date for the
determination of stockholders entitled to receive such distribution.
(iv) For the purpose of any computation under subsections (ii)
and (iii) of this Section 7.2(a), the current market price per share of Class A
Common Stock on any date shall be the average of the Closing Price of the Class
A Common Stock for the shorter of (A) 10 consecutive Trading Days ending on the
last full Trading Day prior to the Time of Determination or (B) the period
commencing on the date next succeeding the first public announcement of the
issuance of such rights or warrants or such distribution through such last full
Trading Day prior to the Time of Determination. For purposes of the foregoing,
the term "Time of Determination" shall mean the time and date of the earlier of
(A) the record date for determining stockholders entitled to receive the rights,
warrants or distribution referred to in subsections (ii) and (iii) of this
Section 7.2, or (B) the commencement of "ex-dividend" trading on the exchange or
market referred to in the definition of "Closing Price."
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(v) No adjustment in the Conversion Price shall be required to be
made unless such adjustment would require an increase or decrease of at least
one percent of such price; provided, however, that any adjustment which by
reason of this subsection (v) is not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 7.2 shall be made to the nearest cent or to the nearest
1/100th of a share, as the case may be. Anything in this Section 7.2 to the
contrary notwithstanding, the Corporation shall be entitled to make such
reduction in the Conversion Price, in addition to those required by this Section
7.2, as it shall determine in its discretion to be advisable in order that any
stock dividend, subdivision of shares, distribution of rights to purchase stock
or securities, or distribution of securities convertible into or exchangeable
for stock hereafter made by the Corporation to its stockholders shall not be
taxable to the recipients. Except as set forth in subsections (i), (ii) and
(iii) above, the Conversion Price shall not be adjusted for the issuance of
Class A Common Stock, or any securities convertible into or exchangeable for
Class A Common Stock or carrying the right to purchase any of the foregoing, in
exchange for cash, property or services.
(vi) The Corporation from time to time may decrease the
Conversion Price by any amount for any period of time if the period is at least
20 days and if the decrease is irrevocable during the period. Whenever the
Conversion Price is so decreased, the Corporation shall mail to holders of
record of shares of Class M Preferred Stock a notice of the decrease at least 15
days before the date the decreased Conversion Price takes effect, and such
notice shall state the decreased Conversion Price and the period it will be in
effect.
(b) Notwithstanding any other provision herein to the contrary, in case
of any merger or consolidation to which the Corporation is a party (other than a
merger or consolidation in which the Corporation is the continuing entity and in
which the Class A Common Stock outstanding immediately prior to the merger or
consolidation is not exchanged for cash, or the securities or other property of
another entity), or in the case of any sale or transfer of all or substantially
all of the Corporation's property and assets to another entity, there will be no
adjustment of the Conversion Price, and lawful provision shall be made by the
entity formed by such consolidation or the entity whose securities, cash or
other property will immediately after the merger or consolidation be owned, by
virtue of the merger or consolidation, by the holders of Class A Common Stock
immediately prior to the merger or consolidation, or the entity which shall have
acquired such assets of the Corporation, such that each share of Class M
Preferred Stock then outstanding will, without the consent of the holder
thereof, become convertible into the kind and amount of securities, cash or
other property receivable upon such merger, consolidation, sale or transfer by a
holder of the number of shares of Class A Common Stock into which such share of
Class M Preferred Stock was convertible immediately prior to such merger,
consolidation, sale or transfer (without regard to any Ownership Restrictions as
defined in Article IV of the Charter) assuming such holder of Class A Common
Stock did not exercise his rights of election, if any, as to the kind or amount
of securities, cash or other property receivable upon such merger,
consolidation, sale or transfer. In the case of a cash merger of the Corporation
into another entity or any other cash transaction of the type mentioned in this
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Section 7.2(b), each share of Class M Preferred Stock will thereafter be
convertible at the Conversion Price in effect at such time into the same amount
of cash per share into which each share of Class M Preferred Stock would have
been convertible had (without regard to any Ownership Restrictions as defined in
Article IV of the Charter) such share been converted into Class A Common Stock
immediately prior to the effective date of such cash merger or other
transaction. The foregoing provisions of this Section 7.2(b) shall similarly
apply to successive mergers, consolidations, sales or transfers.
(c) If (i) the Corporation shall take any action that would require an
adjustment in the Conversion Price pursuant to Section 7.2; (ii) the Corporation
shall authorize the granting to the holders of the Class A Common Stock
generally of rights or warrants to subscribe for or purchase any shares of stock
of any class or series or of any other rights or warrants; (iii) there shall be
any reorganization or reclassification of the Class A Common Stock (other than
an event to which subsection (i) of Section 7.2(a) applies) or any consolidation
or merger to which the Corporation is a party or any sale or transfer of all or
substantially all of the assets of the Corporation, in each case, for which
approval of any stockholders of the Corporation is required; or (iv) there shall
be a voluntary or involuntary liquidation, dissolution or winding up of the
Corporation; then, in each such case, the Corporation shall cause to be given to
the holders of shares of Class M Preferred Stock and the Transfer Agent as
promptly as possible, but in any event at least 15 days prior to the applicable
date hereinafter specified, a notice stating (i) the date on which a record is
to be taken for the purpose of such action or granting of rights or warrants,
or, if a record is not to be taken, the date as of which the holders of Class A
Common Stock of record to be entitled to such dividend, distribution, rights or
warrants are to be determined, or (ii) the date on which such reorganization,
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution or winding up is expected to become effective or occur, and the date
as of which it is expected that holders of Class A Common Stock of record shall
be entitled to exchange their shares of Class A Common Stock for securities,
cash or other property deliverable upon such reorganization, reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution or winding up.
Failure to give such notice or any defect therein shall not affect the legality
or validity of the proceedings described in this Section 7.2(c).
(d) Whenever the Conversion Price is adjusted as herein provided, (i)
the Corporation shall promptly file with the Transfer Agent a certificate
setting forth the Conversion Price after such adjustment and a brief statement
of the facts requiring such adjustment and the manner of computing the same,
which certificate shall be conclusive evidence of the correctness of such
adjustment, and (ii) the Corporation shall mail or cause to be mailed by first
class mail, postage prepaid, as soon as practicable to each holder of record of
shares of Class M Preferred Stock a notice stating that the Conversion Price has
been adjusted and setting forth the adjusted Conversion Price and the effective
date thereof.
(e) In any case in which paragraph (a) of this Section 7.2 shall require
that an adjustment be made immediately following a record date or an effective
date, the Corporation
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may elect to defer (but only until the filing by the Corporation with the
Transfer Agent of the certificate required by subsection 7.2(d)) (i) issuing to
the holder of any share of Class M Preferred Stock converted after such record
date or effective date the shares of Class A Common Stock issuable upon such
conversion in excess of the shares of Class A Common Stock issuable upon such
conversion on the basis of the Conversion Price prior to adjustment, and (ii)
paying to such holder any amount of cash in lieu of a fractional share.
(f) In the event that at any time, as a result of an adjustment made
pursuant to subsection (i) of Section 7.2(a), the holder of any share of Class M
Preferred Stock thereafter surrendered for conversion shall become entitled to
receive any shares of the Corporation other than shares of Class A Common Stock,
thereafter the Conversion Price of such other shares so receivable upon
conversion of any share of Class M Preferred Stock shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to Class A Common Stock contained in
this Section 7.2.
(g) The Corporation shall at all times reserve and keep available, free
from preemptive rights, out of the aggregate of its authorized but unissued
shares of Class A Common Stock, for the purpose of effecting conversion of
shares of Class M Preferred Stock, the full number of shares of Class A Common
Stock deliverable upon the conversion of all outstanding shares of Class M
Preferred Stock not theretofore converted and on or before (and as a condition
of) taking any action that would cause an adjustment of the Conversion Price
resulting in an increase in the number of shares of Class A Common Stock
deliverable upon conversion in excess of the number thereof previously reserved
and available therefor, the Corporation shall take all such action so required.
For purposes of this paragraph (g), the number of shares of Class A Common Stock
which shall be deliverable upon the conversion of all outstanding shares of
Class M Preferred Stock shall be computed as if at the time of computation all
such outstanding shares of Class M Preferred Stock were held by a single holder
(and without regard to the Ownership Limit).
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value (if any) of the shares of Class A
Common Stock deliverable upon conversion of the shares of Class M Preferred
Stock, the Corporation shall take any corporate action which may, in the opinion
of its counsel, be necessary in order that the Corporation may validly and
legally issue fully paid and non-assessable shares of Class A Common Stock at
such adjusted Conversion Price.
(h) The Corporation will pay any and all documentary stamp, issue or
transfer taxes, and any other similar taxes, payable in respect of the issue or
delivery of shares of Class A Common Stock upon conversion of shares of Class M
Preferred Stock pursuant hereto; provided, however, that the Corporation shall
not be required to pay any tax that may be payable in respect of any transfer
involved in the issue or delivery of shares of Class A Common Stock in a name
other than that of the holder of the shares of Class M Preferred Stock to be
converted, and no
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such issue or delivery shall be made unless and until the Person requesting such
issue or delivery has paid to the Corporation the amount of any such tax or
established, to the reasonable satisfaction of the Corporation, that such tax
has been paid.
(i) Notwithstanding anything to the contrary contained in this Section
7, conversion of Class M Preferred Stock pursuant to this Section 7 shall be
permitted only to the extent that such conversion would not result in a
violation of the Ownership Restrictions (as defined in Article IV of the
Charter), after taking into account any applicable waivers. This limitation
shall not, however, be taken into account in determining any amounts to which
the holders of any shares of Class M Preferred Stock may be entitled under
Sections 3, 4 or 5.
(j) If the Corporation shall take any action affecting the Class A
Common Stock, other than an action described in this Section 7, that in the
opinion of the Board of Directors would materially adversely affect the
conversion rights of the holders of Class M Preferred Stock, the Board of
Directors may, but shall have no obligation to, adjust the Conversion Price for
the Class M Preferred Stock to the extent permitted by law in such manner, if
any, and at such time as the Board of Directors, in its sole discretion, may
determine to be equitable under the circumstances.
8. RANKING.
Any class or series of capital stock of the Corporation shall be deemed to
rank:
(a) prior or senior to the Class M Preferred Stock, as to the payment
of dividends and as to distribution of assets upon liquidation, dissolution or
winding up, if the holders of such class or series shall be entitled to the
receipt of dividends and of amounts distributable upon liquidation, dissolution
or winding up, as the case may be, in preference or priority to the holders of
Class M Preferred Stock ("Senior Stock");
(b) on a parity with the Class M Preferred Stock, as to the payment of
dividends and as to distribution of assets upon liquidation, dissolution or
winding up, whether or not the dividend rates, dividend payment dates or
redemption or liquidation prices per share thereof be different from those of
the Class M Preferred Stock, if (i) such capital stock is Class B Cumulative
Convertible Preferred Stock, Class C Cumulative Preferred Stock, Class D
Cumulative Preferred Stock, Class G Cumulative Preferred Stock, Class H
Cumulative Preferred Stock, Class I Cumulative Preferred Stock, Class J
Cumulative Convertible Preferred Stock, Class K Convertible Cumulative Preferred
Stock or Class L Convertible Cumulative Preferred Stock of the Corporation, or
(ii) the holders of such class of stock or series and the Class M Preferred
Stock shall be entitled to the receipt of dividends and of amounts distributable
upon liquidation, dissolution or winding up in proportion to their respective
amounts of accrued and unpaid dividends per share or liquidation preferences,
without preference or priority of one over the other (the capital stock referred
to in clauses (i) and (ii) of this paragraph being hereinafter referred to,
collectively, as "Parity Stock"); and
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(c) junior to the Class M Preferred Stock, as to the payment of
dividends and as to the distribution of assets upon liquidation, dissolution or
winding up, if (i) such capital stock or series shall be Common Stock or (ii)
the holders of Class M Preferred Stock shall be entitled to receipt of dividends
or of amounts distributable upon liquidation, dissolution or winding up, as the
case may be, in preference or priority to the holders of shares of such class or
series (the capital stock referred to in clauses (i) and (ii) of this paragraph
being hereinafter referred to, collectively, as "Junior Stock").
9. VOTING.
(a) If and whenever six quarterly dividends (whether or not
consecutive) payable on the Class M Preferred Stock shall be in arrears (which
shall, with respect to any such quarterly dividend, mean that any such dividend
has not been paid in full), whether or not earned or declared, the number of
directors then constituting the Board of Directors shall be increased by two (if
not already increased by reason of similar types of provisions with respect to
shares of Parity Stock of any other class or series which is entitled to similar
voting rights (the "Voting Preferred Stock")) and the holders of shares of Class
M Preferred Stock, together with the holders of shares of all other Voting
Preferred Stock then entitled to exercise similar voting rights, voting as a
single class regardless of series, shall be entitled to elect the two additional
directors to serve on the Board of Directors at any annual meeting of
stockholders or special meeting held in place thereof, or at a special meeting
of the holders of the Class M Preferred Stock and the Voting Preferred Stock
called as hereinafter provided. Whenever all arrears in dividends on the Class M
Preferred Stock and the Voting Preferred Stock then outstanding shall have been
paid and dividends thereon for the current quarterly dividend period shall have
been declared and paid, or declared and set apart for payment, then the right of
the holders of the Class M Preferred Stock and the Voting Preferred Stock to
elect such additional two directors shall cease (but subject always to the same
provision for the vesting of such voting rights in the case of any similar
future arrearages), and the terms of office of all persons elected as directors
by the holders of the Class M Preferred Stock and the Voting Preferred Stock
shall forthwith terminate and the number of directors constituting the Board of
Directors shall be reduced accordingly. At any time after such voting power
shall have been so vested in the holders of Class M Preferred Stock and the
Voting Preferred Stock, if applicable, the Secretary of the Corporation may, and
upon the written request of any holder of Class M Preferred Stock (addressed to
the Secretary at the principal office of the Corporation) shall, call a special
meeting of the holders of the Class M Preferred Stock and of the Voting
Preferred Stock for the election of the two directors to be elected by them as
herein provided, such call to be made by notice similar to that provided in the
Bylaws of the Corporation for a special meeting of the stockholders or as
required by law. If any such special meeting required to be called as above
provided shall not be called by the Secretary within 20 days after receipt of
any such request, then any holder of Class M Preferred Stock may call such
meeting, upon the notice above provided, and for that purpose shall have access
to the
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stock books of the Corporation. The directors elected at any such special
meeting shall hold office until the next annual meeting of the stockholders or
special meeting held in lieu thereof if such office shall not have previously
terminated as above provided. If any vacancy shall occur among the directors
elected by the holders of the Class M Preferred Stock and the Voting Preferred
Stock, a successor shall be elected by the Board of Directors, upon the
nomination of the then-remaining director elected by the holders of the Class M
Preferred Stock and the Voting Preferred Stock or the successor of such
remaining director, to serve until the next annual meeting of the stockholders
or special meeting held in place thereof if such office shall not have
previously terminated as provided above.
(b) So long as any shares of Class M Preferred Stock are outstanding,
in addition to any other vote or consent of stockholders required by law or by
the Charter of the Corporation, the affirmative vote of at least 66-2/3% of the
votes entitled to be cast by the holders of the Class M Preferred Stock voting
as a single class, given in person or by proxy, either in writing without a
meeting or by vote at any meeting called for the purpose, shall be necessary for
effecting or validating:
(i) Any amendment, alteration or repeal of any of the provisions
of, or the addition of any provision to, these Articles Supplementary, the
Charter or the By-Laws of the Corporation that materially adversely affects the
voting powers, rights or preferences of the holders of the Class M Preferred
Stock; provided, however, that the amendment of the provisions of the Charter so
as to authorize or create, or to increase the authorized amount of, or issue any
Junior Stock or any shares of any class of Parity Stock shall not be deemed to
materially adversely affect the voting powers, rights or preferences of the
holders of Class M Preferred Stock; or
(ii) The authorization, creation of, increase in the authorized
amount of, or issuance of any shares of any class or series of Senior Stock or
any security convertible into shares of any class or series of Senior Stock
(whether or not such class or series of Senior Stock is currently authorized);
provided, however, that no such vote of the holders of Class M Preferred Stock
shall be required if, at or prior to the time when such amendment, alteration or
repeal is to take effect, or when the issuance of any such Senior Stock or
convertible or exchangeable security is to be made, as the case may be,
provision is made for the redemption of all shares of Class M Preferred Stock at
the time outstanding to the extent such redemption is authorized by Section 5 of
this Article.
For purposes of the foregoing provisions and all other voting rights under
these Articles Supplementary, each share of Class M Preferred Stock shall have
one (1) vote per share, except that when any other class or series of preferred
stock of the Corporation shall have the right to vote with the Class M Preferred
Stock as a single class on any matter, then the Class M Preferred Stock and such
other class or series shall have with respect to such matters one quarter of one
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vote per $25 of stated liquidation preference. Except as otherwise required by
applicable law or as set forth herein or in the Charter, the Class M Preferred
Stock shall not have any relative, participating, optional or other special
voting rights and powers other than as set forth herein, and the consent of the
holders thereof shall not be required for the taking of any corporate action.
10. RECORD HOLDERS.
The Corporation and the Transfer Agent may deem and treat the record holder
of any share of Class M Preferred Stock as the true and lawful owner thereof for
all purposes, and neither the Corporation nor the Transfer Agent shall be
affected by any notice to the contrary.
11.1. RESTRICTIONS ON OWNERSHIP AND TRANSFERS.
(A) LIMITATION ON BENEFICIAL OWNERSHIP. Except as provided in Section
11.8, from and after the Issue Date, no Person (other than the Initial Holder or
a Look-Through Entity) shall Beneficially Own shares of Class M Preferred Stock
in excess of the Ownership Limit, the Initial Holder shall not Beneficially Own
shares of Class M Preferred Stock in excess of the Initial Holder Limit and no
Look-Through Entity shall Beneficially Own shares of Class M Preferred Stock in
excess of the Look-Through Ownership Limit.
(B) TRANSFERS IN EXCESS OF OWNERSHIP LIMIT. Except as provided in
Section 11.8, from and after the Issue Date (and subject to Section 11.12), any
Transfer (whether or not such Transfer is the result of transactions entered
into through the facilities of the NYSE or other securities exchange or an
automated inter-dealer quotation system) that, if effective, would result in any
Person (other than the Initial Holder or a Look-Through Entity) Beneficially
Owning shares of Class M Preferred Stock in excess of the Ownership Limit shall
be void ab initio as to the Transfer of such shares of Class M Preferred Stock
that would be otherwise Beneficially Owned by such Person in excess of the
Ownership Limit, and the intended transferee shall acquire no rights in such
shares of Class M Preferred Stock.
(C) TRANSFERS IN EXCESS OF INITIAL HOLDER LIMIT. Except as provided
in Section 11.8, from and after the Issue Date (and subject to Section 11.12),
any Transfer (whether or not such Transfer is the result of transactions entered
into through the facilities of the NYSE or other securities exchange or an
automated inter-dealer quotation system) that, if effective, would result in the
Initial Holder Beneficially Owning shares of Class M Preferred Stock in excess
of the Initial Holder Limit shall be void ab initio as to the Transfer of such
shares of Class M Preferred Stock that would be otherwise Beneficially Owned by
the Initial Holder in excess of the Initial Holder limit, and the Initial Holder
shall acquire no rights in such shares of Class M Preferred Stock.
(D) TRANSFERS IN EXCESS OF LOOK-THROUGH OWNERSHIP LIMIT. Except as
provided in Section 11.8 from and after the Issue Date (and subject to Section
11.12), any
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Transfer (whether or not such Transfer is the result of transactions entered
into through the facilities of the NYSE or other securities exchange or an
automated inter-dealer quotation system) that, if effective, would result in any
Look-Through Entity Beneficially Owning shares of Class M Preferred Stock in
excess of the Look-Through Ownership limit shall be void ab initio as to the
Transfer of such shares of Class M Preferred Stock that would be otherwise
Beneficially Owned by such Look-Through Entity in excess of the Look-Through
Ownership Limit and such Look-Through Entity shall acquire no rights in such
shares of Class M Preferred Stock.
(E) TRANSFERS RESULTING IN "CLOSELY HELD" STATUS. From and after the
Issue Date, any Transfer that, if effective would result in the Corporation
being "closely held" within the meaning of Section 856(h) of the Code, or would
otherwise result in the Corporation failing to qualify as a REIT (including,
without limitation, a Transfer or other event that would result in the
Corporation owning (directly or constructively) an interest in a tenant that is
described in Section 856(d)(2)(B) of the Code if the income derived by the
Corporation from such tenant would cause the Corporation to fail to satisfy any
of the gross income requirements of Section 856(c) of the Code) shall be void ab
initio as to the Transfer of shares of Class M Preferred Stock that would cause
the Corporation (i) to be "closely held" within the meaning of Section 856(h) of
the Code or (ii) otherwise fail to qualify as a REIT, as the case may be, and
the intended transferee shall acquire no rights in such shares of Class M
Preferred Stock.
(F) SEVERABILITY ON VOID TRANSACTIONS. A Transfer of a share of Class
M Preferred Stock that is null and void under Sections 11.1(B), (C), (D), or (E)
of this Article because it would, if effective, result in (i) the ownership of
Class M Preferred Stock in excess of the Initial Holder Limit, the Ownership
Limit, or the Look-Through Ownership Limit, (ii) the Corporation being "closely
held" within the meaning of Section 856(h) of the Code or (iii) the Corporation
otherwise failing to qualify as a REIT, shall not adversely affect the validity
of the Transfer of any other share of Class M Preferred Stock in the same or any
other related transaction.
11.2. REMEDIES FOR BREACH. If the Board of Directors or a committee thereof
shall at any time determine in good faith that a Transfer or other event has
taken place in violation of Section 11.1 of this Article or that a Person
intends to acquire or has attempted to acquire Beneficial Ownership of any
shares of Class M Preferred Stock in violation of Section 11.1 of this Article
(whether or not such violation is intended), the Board of Directors or a
committee thereof shall be empowered to take any action as it deems advisable to
refuse to give effect to or to prevent such Transfer or other event, including,
but not limited to, refusing to give effect to such Transfer or other event on
the books of the Corporation, causing the Corporation to redeem such shares at
the then current Market Price and upon such terms and conditions as may be
specified by the Board of Directors in its sole discretion (including, but not
limited to, by means of the issuance of long-term indebtedness for the purpose
of such redemption), demanding the repayment of any distributions received in
respect of shares of Class M Preferred Stock acquired
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in violation of Section 11.1 of this Article or instituting proceedings to
enjoin such Transfer or to rescind such Transfer or attempted Transfer;
provided, however, that any Transfers or attempted Transfers (or, in the case of
events other than a Transfer, Beneficial Ownership) in violation of Section 11.1
of this Article, regardless of any action (or non-action) by the Board of
Directors or such committee, (a) shall be void ab initio or (b) shall
automatically result in the transfer described in Section 11.3 of this Article;
provided, further, that the provisions of this Section 11.2 shall be subject to
the provisions of Section 11.12 of this Article; provided, further, that neither
the Board of Directors nor any committee thereof may exercise such authority in
a manner that interferes with any ownership or transfer of Class M Preferred
Stock that is expressly authorized pursuant to Section 11.8(C) of this Article.
11.3. TRANSFER IN TRUST.
(A) ESTABLISHMENT OF TRUST. If, notwithstanding the other provisions
contained in this Article, at any time after the Issue Date there is a purported
Transfer (an "Excess Transfer") (whether or not such Transfer is the result of
transactions entered into through the facilities of the NYSE or other securities
exchange or an automated inter-dealer quotation system) or other change in the
capital structure of the Corporation (including, but not limited to, any
redemption of Equity Stock) or other event (including, but not limited to, any
acquisition of any share of Equity Stock) such that (a) any Person (other than
the Initial Holder or a Look-Through Entity) would Beneficially Own shares of
Class M Preferred Stock in excess of the Ownership Limit, or (b) the Initial
Holder would Beneficially Own shares of Class M Preferred Stock in excess of the
Initial Holder Limit, or (c) any Person that is a Look-Through Entity would
Beneficially Own shares of Class M Preferred Stock in excess of the Look-Through
Ownership Limit (in any such event, the Person, Initial Holder or Look-Through
Entity that would Beneficially Own shares of Class M Preferred Stock in excess
of the Ownership Limit, the Initial Holder Limit or the Look-Through Entity
Limit, respectively, is referred to as a "Prohibited Transferee"), then, except
as otherwise provided in Section 11.8 of this Article, such shares of Class M
Preferred Stock in excess of the Ownership Limit, the Initial Holder Limit or
the Look-Through Ownership Limit, as the case may be, (rounded up to the nearest
whole share) shall be automatically transferred to a Trustee in his capacity as
trustee of a Trust for the exclusive benefit of one or more Charitable
Beneficiaries. Such transfer to the Trustee shall be deemed to be effective as
of the close of business on the Business Day prior to the Excess Transfer,
change in capital structure or another event giving rise to a potential
violation of the Ownership Limit, the Initial Holder Limit or the Look-Through
Entity Ownership Limit.
(B) APPOINTMENT OF TRUSTEE. The Trustee shall be appointed by the
Corporation and shall be a Person unaffiliated with either the Corporation or
any Prohibited Transferee. The Trustee may be an individual or a bank or trust
company duly licensed to conduct a trust business.
(C) STATUS OF SHARES HELD BY THE TRUSTEE. Shares of Class M Preferred
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Stock held by the Trustee shall be issued and outstanding shares of capital
stock of the Corporation. Except to the extent provided in Section 11.3(E), the
Prohibited Transferee shall have no rights in the Class M Preferred Stock held
by the Trustee, and the Prohibited Transferee shall not benefit economically
from ownership of any shares held in trust by the Trustee, shall have no rights
to dividends and shall not possess any rights to vote or other rights
attributable to the shares held in the Trust.
(D) DIVIDEND AND VOTING RIGHTS. The Trustee shall have all voting
rights and rights to dividends with respect to shares of Class M Preferred Stock
held in the Trust, which rights shall be exercised for the benefit of the
Charitable Beneficiary. Any dividend or distribution paid prior to the discovery
by the Corporation that the shares of Class M Preferred Stock have been
transferred to the Trustee shall be repaid to the Corporation upon demand, and
any dividend or distribution declared but unpaid shall be rescinded as void ab
initio with respect to such shares of Class M Preferred Stock. Any dividends or
distributions so disgorged or rescinded shall be paid over to the Trustee and
held in trust for the Charitable Beneficiary. Any vote cast by a Prohibited
Transferee prior to the discovery by the Corporation that the shares of Class M
Preferred Stock have been transferred to the Trustee will be rescinded as void
ab initio and shall be recast in accordance with the desires of the Trustee
acting for the benefit of the Charitable Beneficiary. The owner of the shares at
the time of the Excess Transfer, change in capital structure or other event
giving rise to a potential violation of the Ownership Limit, Initial Holder
Limit or Look-Through Entity Ownership Limit shall be deemed to have given an
irrevocable proxy to the Trustee to vote the shares of Class M Preferred Stock
for the benefit of the Charitable Beneficiary.
(E) RESTRICTIONS ON TRANSFER. The Trustee of the Trust may sell the
shares held in the Trust to a Person, designated by the Trustee, whose ownership
of the shares will not violate the Ownership Restrictions. If such a sale is
made, the interest of the Charitable Beneficiary shall terminate and proceeds of
the sale shall be payable to the Prohibited Transferee and to the Charitable
Beneficiary as provided in this Section 11.3(E). The Prohibited Transferee shall
receive the lesser of (1) the price paid by the Prohibited Transferee for the
shares or, if the Prohibited Transferee did not give value for the shares
(through a gift, devise or other transaction), the Market Price of the shares on
the day of the event causing the shares to be held in the Trust and (2) the
price per share received by the Trustee from the sale or other disposition of
the shares held in the Trust. Any proceeds in excess of the amount payable to
the Prohibited Transferee shall be payable to the Charitable Beneficiary. If any
of the transfer restrictions set forth in this Section 11.3(E) or any
application thereof is determined in a final judgment to be void, invalid or
unenforceable by any court having jurisdiction over the issue, the Prohibited
Transferee may be deemed, at the option of the Corporation, to have acted as the
agent of the Corporation in acquiring the Class M Preferred Stock as to which
such restrictions would, by their terms, apply, and to hold such Class M
Preferred Stock on behalf of the Corporation.
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(F) PURCHASE RIGHT IN STOCK TRANSFERRED TO THE TRUSTEE. Shares of Class
M Preferred Stock transferred to the Trustee shall be deemed to have been
offered for sale to the Corporation, or its designee, at a price per share equal
to the lesser of (i) the price per share in the transaction that resulted in
such transfer to the Trust (or, in the case of a devise or gift, the Market
Price at the time of such devise or gift) and (ii) the Market Price on the date
the Corporation, or its designee, accepts such offer. The Corporation shall have
the right to accept such offer for a period of 90 days after the later of (i)
the date of the Excess Transfer or other event resulting in a transfer to the
Trust and (ii) the date that the Board of Directors determines in good faith
that an Excess Transfer or other event occurred.
(G) DESIGNATION OF CHARITABLE BENEFICIARIES. By written notice to the
Trustee, the Corporation shall designate one or more nonprofit organizations to
be the Charitable Beneficiary of the interest in the Trust relating to such
Prohibited Transferee if (i) the shares of Class M Preferred Stock held in the
Trust would not violate the Ownership Restrictions in the hands of such
Charitable Beneficiary and (ii) each Charitable Beneficiary is an organization
described in Sections 170(b)(1)(A), 170(c)(2) and 501(c)(3) of the Code.
11.4. NOTICE OF RESTRICTED TRANSFER. Any Person that acquires or attempts
to acquire shares of Class M Preferred Stock in violation of Section 11.1 of
this Article, or any Person that is a Prohibited Transferee such that stock is
transferred to the Trustee under Section 11.3 of this Article, shall immediately
give written notice to the Corporation of such event and shall provide to the
Corporation such other information as the Corporation may request in order to
determine the effect, if any, of such Transfer or attempted Transfer or other
event on the Corporation's status as a REIT. Failure to give such notice shall
not limit the rights and remedies of the Board of Directors provided herein in
any way.
11.5. OWNERS REQUIRED TO PROVIDE INFORMATION. From and after the Issue Date
certain record and Beneficial Owners and transferees of shares of Class M
Preferred Stock will be required to provide certain information as set out
below.
(A) ANNUAL DISCLOSURE. Every record and Beneficial Owner of shares of
Class M Preferred Stock convertible into more than 5% (or such other percentage
between 0.5% and 5%, as provided in the applicable regulations adopted under the
Code) of the number of Outstanding shares of Equity Stock shall upon written
request by the Corporation, such request to be made within 30 days after January
1 of each year, give written notice to the Corporation stating the name and
address of such record or Beneficial Owner, the number of shares of Class M
Preferred Stock Beneficially Owned, and a full description of how such shares
are held. Each such record or Beneficial Owner of Class M Preferred Stock shall,
upon demand by the Corporation, disclose to the Corporation in writing such
additional information with respect to the Beneficial Ownership of the Class M
Preferred Stock as the Board of Directors, in its sole discretion, deems
appropriate or necessary to (i) comply with the provisions of the Code regarding
the qualification of the Corporation as a REIT under the Code and (ii) ensure
compliance with the Ownership Limit, the Initial Holder Limit or the
Look-Through Ownership
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Limit, as applicable. Each stockholder of record, including without limitation
any Person that holds shares of Class M Preferred Stock on behalf of a
Beneficial Owner, shall take all reasonable steps to obtain the written notice
described in this Section 11.5 from the Beneficial Owner.
(B) DISCLOSURE AT THE REQUEST OF THE CORPORATION. Any Person that
is a Beneficial Owner of shares of Class M Preferred Stock and any Person
(including the stockholder of record) that is holding shares of Class M
Preferred Stock for a Beneficial Owner, and any proposed transferee of shares,
shall provide such information as the Corporation, in its sole discretion, may
request in order to determine the Corporation's status as a REIT, to comply with
the requirements of any taxing authority or other governmental agency, to
determine any such compliance or to ensure compliance with the Ownership Limit,
the Initial Holder Limit and the Look-Through Ownership Limit, and shall provide
a statement or affidavit to the Corporation setting forth the number of shares
of Class M Preferred Stock already Beneficially Owned by such stockholder or
proposed transferee and any related persons specified, which statement or
affidavit shall be in the form prescribed by the Corporation for that purpose.
11.6. REMEDIES NOT LIMITED. Nothing contained in this Article shall limit
the authority of the Board of Directors to take such other action as it deems
necessary or advisable (subject to the provisions of Section 11.12 of this
Article) (i) to protect the Corporation and the interests of its stockholders in
the preservation of the Corporation's status as a REIT and (ii) to insure
compliance with the Ownership Limit, the Initial Holder Limit and the
Look-Through Ownership Limit.
11.7. AMBIGUITY. In the case of an ambiguity in the application of any of
the provisions of Section 11 of this Article, or in the case of an ambiguity in
any definition contained in Section 11 of this Article, the Board of Directors
shall have the power to determine the application of the provisions of this
Article with respect to any situation based on its reasonable belief,
understanding or knowledge of the circumstances.
11.8. EXCEPTIONS. The following exceptions shall apply or may be
established with respect to the limitations of Section 11.1 of this Article.
(A) WAIVER OF OWNERSHIP LIMIT. The Board of Directors, upon
receipt of a ruling from the Internal Revenue Service or an opinion of tax
counsel or other evidence or undertaking acceptable to it, may waive the
application, in whole or in part, of the Ownership Limit to a Person subject to
the Ownership Limit, if such person is not an individual for purposes of Section
542(a) of the Code (as modified to exclude qualified trusts from treatment as
individuals pursuant to Section 856(h)(3) of the Code) and is a corporation,
partnership, limited liability company, estate or trust. In connection with any
such exemption, the Board of Directors may require such representations and
undertakings from such Person and may impose such other conditions as the Board
of Directors deems necessary, in its sole discretion, to determine the effect,
if any, of the proposed Transfer on the Corporation's status as a REIT.
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(B) PLEDGE BY INITIAL HOLDER. Notwithstanding any other provision
of this Article, the pledge by the Initial Holder of all or any portion of the
Class M Preferred Stock directly owned at any time or from time to time shall
not constitute a violation of Section 11.1 of this Article and the pledgee shall
not be subject to the Ownership Limit with respect to the Class M Preferred
Stock so pledged to it either as a result of the pledge or upon foreclosure.
(C) UNDERWRITERS. For a period of 270 days (or such longer period
of time as any underwriter described below shall hold an unsold allotment of
Class M Preferred Stock) following the purchase of Class M Preferred Stock by an
underwriter that (i) is a corporation, partnership or other legal entity and
(ii) participates in an offering of the Class M Preferred Stock, such
underwriter shall not be subject to the Ownership Limit with respect to the
Class M Preferred Stock purchased by it as a part of or in connection with such
offering and with respect to any Class M Preferred Stock purchased in connection
with market making activities.
11.9. LEGEND. Each certificate for Class M Preferred Stock shall bear
substantially the following legend:
"The shares of Class M Convertible Cumulative Preferred Stock
represented by this certificate are subject to restrictions on
transfer. No person may Beneficially Own shares of Class M Convertible
Cumulative Preferred Stock in excess of the Ownership Restrictions, as
applicable, with certain further restrictions and exceptions set forth
in the Charter (including the Articles Supplementary setting forth the
terms of the Class M Convertible Cumulative Preferred Stock). Any
Person that attempts to Beneficially Own shares of Class M Convertible
Cumulative Preferred Stock in excess of the applicable limitation must
immediately notify the Corporation. All capitalized terms in this
legend have the meanings ascribed to such terms in the Charter
(including the Articles Supplementary setting forth the terms of the
Class M Convertible Cumulative Preferred Stock), as the same may be
amended from time to time, a copy of which, including the restrictions
on transfer, will be sent without charge to each stockholder that so
requests. If the restrictions on transfer are violated (i) the transfer
of the shares of Class M Convertible Cumulative Preferred Stock
represented hereby will be void in accordance with the Charter
(including the Articles Supplementary setting forth the terms of the
Class M Convertible Cumulative Preferred Stock) or (ii) the shares of
Class M Convertible Cumulative Preferred Stock represented hereby will
automatically be transferred to a Trustee of a Trust for the benefit of
one or more Charitable Beneficiaries."
11.10. SEVERABILITY. If any provision of this Article or any application of
any such provision is determined in a final and unappealable judgment to be
void, invalid or unenforceable
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by any Federal or state court having jurisdiction over the issues, the validity
and enforceability of the remaining provisions shall not be affected and other
applications of such provision shall be affected only to the extent necessary to
comply with the determination of such court.
11.11. BOARD OF DIRECTORS DISCRETION. Anything in this Article to the
contrary notwithstanding, the Board of Directors shall be entitled to take or
omit to take such actions as it in its discretion shall determine to be
advisable in order that the Corporation maintain its status as and continue to
qualify as a REIT, including, but not limited to, reducing the Ownership Limit,
the Initial Holder Limit and the Look-Through Ownership Limit in the event of a
change in law.
11.12. SETTLEMENT. Nothing in this Section 11 of this Article shall be
interpreted to preclude the settlement of any transaction entered into through
the facilities of the NYSE or other securities exchange or an automated
inter-dealer quotation system.
FOURTH: The terms of the Class M Cumulative Preferred Stock set forth
in Article Third hereof shall become Article XXIV of the Charter.
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IN WITNESS WHEREOF, the Corporation has caused these presents to be signed
in its name and on its behalf by its Executive Vice President, General Counsel
and Secretary and witnessed by its Assistant Secretary on January , 2000.
WITNESS: APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
- ------------------- ---------------------------------------------
Barb Foster Joel Bonder
Assistant Secretary Executive Vice President, General Counsel and
Secretary
THE UNDERSIGNED, Executive Vice President, General Counsel and Secretary of
APARTMENT INVESTMENT AND MANAGEMENT COMPANY, who executed on behalf of the
Corporation the Articles Supplementary of which this Certificate is made a part,
hereby acknowledges in the name and on behalf of said Corporation the foregoing
Articles Supplementary to be the corporate act of said Corporation and hereby
certifies that the matters and facts set forth herein with respect to the
authorization and approval thereof are true in all material respects under the
penalties of perjury.
---------------------------------------------
Joel Bonder
Executive Vice President, General Counsel and
Secretary
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EXHIBIT 3.2
{As Adopted on January 19, 2000}
================================================================================
AMENDED AND RESTATED BY-LAWS
OF
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
================================================================================
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE I. STOCKHOLDERS 5
SECTION 1.01. Annual Meeting 5
SECTION 1.02. Special Meeting 5
SECTION 1.03. Place of Meetings 5
SECTION 1.04. Notice of Meetings; Waiver of Notice 5
SECTION 1.05. Quorum; Voting 6
SECTION 1.06. Adjournments 6
SECTION 1.07. General Right to Vote; Proxies 6
SECTION 1.08. List of Stockholders 7
SECTION 1.09. Conduct of Voting 7
SECTION 1.10. Meeting by Conference Telephone 7
ARTICLE II. BOARD OF DIRECTORS 7
SECTION 2.01. Function of Directors 7
SECTION 2.02. Qualification and Number of Directors 8
SECTION 2.03. Election and Tenure of Directors 8
SECTION 2.04. Removal of Director 8
SECTION 2.05. Vacancy on Board of Directors 8
SECTION 2.06. Regular Meetings 8
SECTION 2.07. Special Meetings 9
SECTION 2.08. Notice of Meeting 9
SECTION 2.09. Quorum; Action by Directors 9
SECTION 2.10. Meeting by Conference Telephone 9
SECTION 2.11. Compensation 10
SECTION 2.12. Resignation 10
SECTION 2.13. Presumption of Assent 10
ARTICLE III. COMMITTEES 10
SECTION 3.01. Committees 10
SECTION 3.02. Committee Procedure 10
ARTICLE IV. OFFICERS 11
SECTION 4.01. Executive and Other Officers 11
SECTION 4.02. Chairman of the Board 11
SECTION 4.03. Vice Chairman of the Board 11
</TABLE>
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<TABLE>
<S> <C> <C>
SECTION 4.04. President 11
SECTION 4.05. Vice-Presidents 12
SECTION 4.06. Secretary 12
SECTION 4.07. Treasurer 12
SECTION 4.08. Assistant and Subordinate Officers 12
SECTION 4.09. Election, Tenure and Removal of Officers 13
SECTION 4.10. Compensation 13
ARTICLE V. DIVISIONAL TITLES 13
SECTION 5.01. Conferring Divisional Titles 13
SECTION 5.02. Effect of Divisional Titles 13
ARTICLE VI. STOCK 10
SECTION 6.01. Certificates for Stock 13
SECTION 6.02. Transfers 14
SECTION 6.03. Record Dates or Closing of Transfer Books 14
SECTION 6.04. Stock Ledger 14
SECTION 6.05. Certification of Beneficial Owners 14
SECTION 6.06. Lost Stock Certificates 14
SECTION 6.07. Fractional Share Interests or Scrip 14
ARTICLE VII. FINANCE 16
SECTION 7.01. Checks, Drafts, Etc. 16
SECTION 7.02. Annual Statement of Affairs 16
SECTION 7.03. Fiscal Year 16
SECTION 7.04. Dividends 16
SECTION 7.05. Bonds 16
ARTICLE VIII. INDEMNIFICATION 16
SECTION 8.01. Procedure 16
SECTION 8.02. Exclusivity, Etc. 17
SECTION 8.03. Severability; Definitions 17
ARTICLE IX. SUNDRY PROVISIONS 17
SECTION 9.01. Books and Records 17
SECTION 9.02. Corporate Seal 18
SECTION 9.03. Voting Stock in Other Corporations 18
SECTION 9.04. Mail 18
SECTION 9.05. Contracts and Agreements 18
SECTION 9.06. Resident Agent; Principal Office 18
</TABLE>
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<TABLE>
<S> <C> <C>
SECTION 9.07. Amendments 18
SECTION 9.08. Reliance 19
</TABLE>
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AMENDED AND RESTATED BY-LAWS
OF
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
ARTICLE I.
STOCKHOLDERS
SECTION 1.01. ANNUAL MEETING. The Corporation shall hold an annual
meeting of its stockholders to elect directors and transact any other business
within its powers, either at 9:00 a.m. on the third Wednesday of April in each
year if not a legal holiday, or at such other time on such other day falling on
or before the 30th day thereafter as shall be set by the Board of Directors.
Except as the Charter or statute provides otherwise, any business may be
considered at an annual meeting without the purpose of the meeting having been
specified in the notice. Failure to hold an annual meeting does not invalidate
the Corporation's existence or affect any otherwise valid corporate acts.
SECTION 1.02. SPECIAL MEETING. At any time in the interval between
annual meetings, a special meeting of the stockholders may be called by the
Chairman of the Board, the Vice Chairman of the Board or the President or by a
majority of the Board of Directors by vote at a meeting or in writing (addressed
to the Secretary of the Corporation) with or without a meeting. Special meetings
of the stockholders shall be called by the Secretary at the request of
stockholders only on the written request of stockholders entitled to cast at
least 25% of all the votes entitled to be cast at the meeting. A request for a
special meeting shall state the purpose of the meeting and the matters proposed
to be acted on at it. The Secretary shall inform the stockholders who make the
request of the reasonably estimated costs of preparing and mailing a notice of
the meeting and, on payment of these costs to the Corporation, notify each
stockholder entitled to notice of the meeting. The Board of Directors shall have
sole power to fix the date and time of the special meeting. Unless requested by
stockholders entitled to cast a majority of all the votes entitled to be cast at
the meeting, a special meeting need not be called to consider any matter which
is substantially the same as a matter voted on at any special meeting of
stockholders held in the preceding 12 months.
SECTION 1.03. PLACE OF MEETINGS. Unless the Charter provides otherwise,
meetings of stockholders shall be held at such place as is set from time to time
by the Board of Directors.
SECTION 1.04. NOTICE OF MEETINGS; WAIVER OF NOTICE. Not less than ten
nor more than 90 days before each stockholders' meeting, the Secretary shall
give written notice of the
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meeting to each stockholder entitled to vote at the meeting and each other
stockholder entitled to notice of the meeting. The notice shall state the time
and place of the meeting and, if the meeting is a special meeting or notice of
the purpose is required by statute, the purpose of the meeting. Notice is given
to a stockholder when it is personally delivered to him or her, left at his or
her residence or usual place of business, or mailed to him or her at his or her
address as it appears on the records of the Corporation or transmitted to the
stockholder by electronic mail to any electronic mail address of the stockholder
or by any other electronic means. Notwithstanding the foregoing provisions, each
person who is entitled to notice waives notice if he or she before or after the
meeting signs a waiver of the notice which is filed with the records of
stockholders' meetings, or is present at the meeting in person or by proxy.
SECTION 1.05. QUORUM; VOTING. Unless any statute or the Charter
provides otherwise, at a meeting of stockholders the presence in person or by
proxy of stockholders entitled to cast a majority of all the votes entitled to
be cast at the meeting constitutes a quorum, and a majority of all the votes
cast at a meeting at which a quorum is present is sufficient to approve any
matter which properly comes before the meeting, except that a plurality of all
the votes cast at a meeting at which a quorum is present is sufficient to elect
a director.
SECTION 1.06. ADJOURNMENTS. Whether or not a quorum is present, a
meeting of stockholders convened on the date for which it was called may be
adjourned from time to time without further notice by a majority vote of the
stockholders present in person or by proxy to a date not more than 120 days
after the original record date. Any business which might have been transacted at
the meeting as originally notified may be deferred and transacted at any such
adjourned meeting at which a quorum shall be present.
SECTION 1.07. GENERAL RIGHT TO VOTE; PROXIES. Unless the Charter
provides for a greater or lesser number of votes per share or limits or denies
voting rights, each outstanding share of stock, regardless of class, is entitled
to one vote on each matter submitted to a vote at a meeting of stockholders;
however, a share is not entitled to be voted if any installment payable on it is
overdue and unpaid. In all elections for directors, each share of stock may be
voted for as many individuals as there are directors to be elected and for whose
election the share is entitled to be voted. A stockholder may vote the stock the
stockholder owns of record either in person or by proxy. A stockholder may sign
a writing authorizing another person to act as proxy. Signing may be
accomplished by the stockholder or the stockholder's authorized agent signing
the writing or causing the stockholder's signature to be affixed to the writing
by any reasonable means, including facsimile signature. A stockholder may
authorize another person to act as proxy by transmitting, or authorizing the
transmission of, an authorization by a telegram, cablegram, datagram, electronic
mail or any other electronic or telephonic means to the person authorized to act
as proxy or to any other person authorized to receive the proxy authorization on
behalf of the person authorized to act as the proxy, including a proxy
solicitation firm or proxy support service organization. Unless a proxy provides
otherwise, it is not valid more than 11 months after its date. A proxy is
revocable by a stockholder at any time without condition or qualification unless
the proxy states that it is irrevocable and the proxy is coupled with an
interest. A proxy may be made irrevocable for so long as it is coupled with an
interest. The
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interest with which a proxy may be coupled includes an interest in the stock to
be voted under the proxy or another general interest in the Corporation or its
assets or liabilities.
SECTION 1.08. LIST OF STOCKHOLDERS. At each meeting of stockholders, a
full, true and complete list of all stockholders entitled to vote at such
meeting, showing the number and class of shares held by each and certified by
the transfer agent for such class or by the Secretary, shall be furnished by the
Secretary.
SECTION 1.09. CONDUCT OF VOTING. At all meetings of stockholders,
unless the voting is conducted by inspectors, the proxies and ballots shall be
received, and all questions touching the qualification of voters and the
validity of proxies, the acceptance or rejection of votes and procedures for the
conduct of business not otherwise specified by these By-Laws, the Charter or
law, shall be decided or determined by the chairman of the meeting. If demanded
by stockholders, present in person or by proxy, entitled to cast 10% in number
of votes entitled to be cast, or if ordered by the chairman of the meeting, the
vote upon any election or question shall be taken by ballot. Before any meeting
of the stockholders, the Board of Directors may appoint persons to act as
inspectors of election at the meeting and any adjournment thereof. If no
inspectors of election are so appointed, the chairman of the meeting may appoint
inspectors of election at the meeting. The number of inspectors shall be either
one or three. If inspectors are appointed at a meeting on the request of
stockholders, the holders of a majority of shares present in person or by proxy
shall determine whether one or three inspectors are to be appointed. No
candidate for election as a director at a meeting shall serve as an inspector
thereat. If any person appointed as inspector fails to appear or fails or
refuses to act, the chairman of the meeting may, and upon the request of any
stockholder shall, appoint a person to fill that vacancy. The inspectors shall
determine the number of shares outstanding and the voting power of each, the
shares represented at the meeting, the existence of a quorum, and the
authenticity, validity and effect of proxies; receive votes, ballots or
consents; hear and determine all challenges and questions in any way arising in
connection with the right to vote; count and tabulate all votes or consents;
determine when polls shall close; determine the result; and do any other acts
that may be proper to conduct the election or vote with fairness to all
stockholders. Unless so demanded or ordered, no vote need be by ballot and
voting need not be conducted by inspectors.
SECTION 1.10. MEETING BY CONFERENCE TELEPHONE. Stockholders may
participate in a meeting by means of a conference telephone or similar
communications equipment if all persons participating in the meeting can hear
each other at the same time. Participation in a meeting by these means
constitutes presence in person at a meeting.
ARTICLE II.
BOARD OF DIRECTORS
SECTION 2.01. FUNCTION OF DIRECTORS. The business and affairs of the
Corporation shall be managed under the direction of its Board of Directors. All
powers of the Corporation may be exercised by or under authority of the Board of
Directors, except as conferred on or reserved to the stockholders by statute or
by the Charter or By-Laws.
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SECTION 2.02. QUALIFICATION AND NUMBER OF DIRECTORS. Each director
shall be a natural person at least 18 years of age. The Corporation shall have
at least three directors. The Corporation shall have the number of directors
provided in the Charter until changed as herein provided. A majority of the
entire Board of Directors may alter the number of directors set by the Charter
to not exceeding 9 (plus such additional number as may needed to satisfy the
right of the holders of any class of stock of the Corporation to demand
nomination of a director) nor less than the minimum number then permitted
herein, but the action may not affect the tenure of office of any director.
SECTION 2.03. ELECTION AND TENURE OF DIRECTORS. Subject to the rights
of the holders of any class of stock separately entitled to elect one or more
directors, at each annual meeting, the stockholders shall elect directors to
hold office until the next annual meeting and until their successors are elected
and qualify.
SECTION 2.04. REMOVAL OF DIRECTOR. Any or all of the directors may be
removed, with or without cause by the affirmative vote of a majority of all the
votes entitled to be cast for the election of directors.(1)
SECTION 2.05. VACANCY ON BOARD OF DIRECTORS. Subject to the rights of
the holders of any class of stock separately entitled to elect one or more
directors, the stockholders may elect a successor to fill a vacancy on the Board
of Directors which results from the removal of a director. A director elected by
the stockholders to fill a vacancy which results from the removal of a director
serves for the balance of the term of the removed director. Subject to the
rights of the holders of any class of stock separately entitled to elect one or
more directors, a majority of the remaining directors, whether or not sufficient
to constitute a quorum, may fill a vacancy on the Board of Directors which
results from any cause except an increase in the number of directors, and a
majority of the entire Board of Directors may fill a vacancy which results from
an increase in the number of directors. A director elected by the Board of
Directors to fill a vacancy serves until the next annual meeting of stockholders
and until his or her successor is elected and qualifies.
SECTION 2.06. REGULAR MEETINGS. After each meeting of stockholders at
which directors shall have been elected, the Board of Directors shall meet as
soon thereafter as practicable for the purpose of organization and the
transaction of other business. In the event that no other time and place are
specified by resolution of the Board of Directors or announced by the President
or the Chairman of the Board at such stockholders meeting, the Board of
Directors shall meet immediately following the close of, and at the place of,
such stockholders meeting. Any other regular meeting of the Board of Directors
shall be held on such date and time and at such place as may be designated from
time to time by the Board of Directors. No notice of such
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1 Under Article VI, Section 6 of the Charter, this section of the By-Laws may
not be amended without the approval of 2/3 of the stockholders.
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meeting following a stockholders meeting or any other regular meeting shall be
necessary if held as hereinabove provided.
SECTION 2.07. SPECIAL MEETINGS. Special meetings of the Board of
Directors may be called at any time by the Chairman of the Board or the
President or by a majority of the Board of Directors by vote at a meeting, or in
writing with or without a meeting. A special meeting of the Board of Directors
shall be held on such date and at any place as may be designated from time to
time by the Board of Directors. In the absence of designation such meeting shall
be held at such place as may be designated in the call.
SECTION 2.08. NOTICE OF MEETING. Except as provided in Section 2.06,
the Secretary shall give notice to each director of each regular and special
meeting of the Board of Directors. The notice shall state the time and place of
the meeting. Notice is given to a director when it is delivered personally to
him or her, left at his or her residence or usual place of business, or sent by
telegraph, facsimile transmission or telephone, at least 24 hours before the
time of the meeting or, in the alternative by mail to his or her address as it
shall appear on the records of the Corporation, at least 72 hours before the
time of the meeting. Unless these By-Laws or a resolution of the Board of
Directors provides otherwise, the notice need not state the business to be
transacted at or the purposes of any regular or special meeting of the Board of
Directors. No notice of any meeting of the Board of Directors need be given to
any director who attends except where a director attends a meeting for the
express purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened, or to any director who, in writing
executed and filed with the records of the meeting either before or after the
holding thereof, waives such notice. Any meeting of the Board of Directors,
regular or special, may adjourn from time to time to reconvene at the same or
some other place, and no notice need be given of any such adjourned meeting
other than by announcement.
SECTION 2.09. QUORUM; ACTION BY DIRECTORS. A majority of the entire
Board of Directors shall constitute a quorum for the transaction of business. In
the absence of a quorum, the directors present by majority vote and without
notice other than by announcement may adjourn the meeting from time to time
until a quorum shall attend. At any 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. Unless statute or the Charter
or By-Laws requires a greater proportion, the action of a majority of the
directors present at a meeting at which a quorum is present is action of the
Board of Directors. Any action required or permitted to be taken at a meeting of
the Board of Directors may be taken without a meeting, if a unanimous written
consent which sets forth the action is signed by each member of the Board of
Directors and filed with the minutes of proceedings of the Board of Directors.
SECTION 2.10. MEETING BY CONFERENCE TELEPHONE. Members of the Board of
Directors may participate in a meeting by means of a conference telephone or
similar communications equipment if all persons participating in the meeting can
hear each other at the same time. Participation in a meeting by these means
constitutes presence in person at a meeting.
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SECTION 2.11. COMPENSATION. By resolution of the Board of Directors a
fixed sum and expenses, if any, for attendance at each regular or special
meeting of the Board of Directors or of committees thereof, and other
compensation for their services as such or on committees of the Board of
Directors, may be paid to directors. Directors who are full-time employees of
the Corporation need not be paid for attendance at meetings of the Board of
Directors or committees thereof for which fees are paid to other directors. A
director who serves the Corporation in any other capacity also may receive
compensation for such other services, pursuant to a resolution of the directors.
SECTION 2.12. RESIGNATION. Any director may resign at any time by
sending a written notice of such resignation to the home office of the
Corporation addressed to the Chairman of the Board or the President. Unless
otherwise specified therein such resignation shall take effect upon receipt
thereof by the Chairman of the Board or the President.
SECTION 2.13. PRESUMPTION OF ASSENT. A director of the Corporation who
is present at a meeting of the Board of Directors at which action on any
corporate matter is taken shall be presumed to have assented to the action taken
unless his or her dissent or abstention shall be entered in the minutes of the
meeting or unless he or she shall file his or her written dissent to such action
with the person acting as the secretary of the meeting before the adjournment
thereof or shall forward such dissent by registered mail to the Secretary of the
Corporation immediately after the adjournment of the meeting. Such right to
dissent shall not apply to a director who votes in favor of such action or fails
to make his dissent known at the meeting.
ARTICLE III.
COMMITTEES
SECTION 3.01. COMMITTEES. The Board of Directors may appoint from among
its members an Executive Committee and other committees composed of one or more
directors and delegate to these committees any of the powers of the Board of
Directors, except the power to authorize dividends on stock, elect directors,
issue stock other than as provided in the next sentence, recommend to the
stockholders any action which requires stockholder approval, amend these
By-Laws, or approve any merger or share exchange which does not require
stockholder approval. If the Board of Directors has given general authorization
for the issuance of stock providing for or establishing a method or procedure
for determining the maximum number of shares to be issued, a committee of the
Board of Directors, in accordance with that general authorization or any stock
option or other plan or program adopted by the Board of Directors, may authorize
or fix the terms of stock subject to classification or reclassification and the
terms on which any stock may be issued, including all terms and conditions
required or permitted to be established or authorized by the Board of Directors.
SECTION 3.02. COMMITTEE PROCEDURE. Each committee may fix rules of
procedure for its business. A majority of the members of a committee shall
constitute a quorum for the transaction of business and the act of a majority of
those present at a meeting at which a quorum
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is present shall be the act of the committee. The members of a committee present
at any meeting, whether or not they constitute a quorum, may appoint a director
to act in the place of an absent member. Any action required or permitted to be
taken at a meeting of a committee may be taken without a meeting, if an
unanimous written consent which sets forth the action is signed by each member
of the committee and filed with the minutes of the committee. The members of a
committee may conduct any meeting thereof by conference telephone in accordance
with the provisions of Section 2.10.
ARTICLE IV.
OFFICERS
SECTION 4.01. EXECUTIVE AND OTHER OFFICERS. The Corporation shall have
a President, a Secretary, and a Treasurer. It may also have a Chairman of the
Board and a Vice Chairman of the Board. The Board of Directors shall designate
who shall serve as chief executive officer, who shall have general supervision
of the business and affairs of the Corporation, and may designate a chief
operating officer, who shall have supervision of the operations of the
Corporation. In the absence of any designation the Chairman of the Board, if
there be one, shall serve as chief executive officer, and the President shall
serve as chief operating officer. In the absence of the Chairman of the Board,
or if there be none, the President shall be the chief executive officer. The
same person may hold both offices. The Corporation may also have one or more
Vice-Presidents, assistant officers, and subordinate officers as may be
established by the Board of Directors. A person may hold more than one office in
the Corporation except that no person may serve concurrently as both President
and Vice-President of the Corporation. The Chairman of the Board and the Vice
Chairman of the Board shall be directors, and the other officers may be
directors.
SECTION 4.02. CHAIRMAN OF THE BOARD. The Chairman of the Board, if one
be elected, shall preside at all meetings of the Board of Directors and of the
stockholders at which he or she shall be present. Unless otherwise specified by
the Board of Directors, he or she shall be the chief executive officer of the
Corporation. In general, he or she shall perform such duties as are customarily
performed by the chief executive officer of a corporation, may perform any
duties of the President and shall perform such other duties and have such other
powers as are from time to time assigned to him or her by the Board of
Directors.
SECTION 4.03. VICE CHAIRMAN OF THE BOARD. Unless otherwise provided by
resolution of the Board of Directors, the Vice Chairman of the Board, in the
absence of the Chairman of the Board, shall preside at all meetings of the Board
of Directors and of the stockholders at which he or she shall be present, and
shall perform such other duties and have such other powers as are from time to
time assigned to him or her by the Board of Directors.
SECTION 4.04. PRESIDENT. Unless otherwise specified by the Board of
Directors, the President shall be the chief operating officer of the Corporation
and perform the duties customarily performed by chief operating officers. He or
she may execute, in the name of the Corporation, all authorized deeds,
mortgages, bonds, contracts or other instruments, except in
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cases in which the signing and execution thereof shall have been expressly
delegated to some other officer or agent of the Corporation. In general, he or
she shall perform such other duties customarily performed by a president of a
corporation and shall perform such other duties and have such other powers as
are from time to time assigned to him or her by the Board of Directors or the
chief executive officer of the Corporation.
SECTION 4.05. VICE-PRESIDENTS. The Vice-President or Vice-Presidents,
at the request of the chief executive officer or the President, or in the
President's absence or during his or her inability to act, shall perform the
duties and exercise the functions of the President, and when so acting shall
have the powers of the President. If there be more than one Vice-President, the
Board of Directors may determine which one or more of the Vice-Presidents shall
perform any of such duties or exercise any of such functions, or if such
determination is not made by the Board of Directors, the chief executive
officer, or the President may make such determination; otherwise any of the
Vice-Presidents may perform any of such duties or exercise any of such
functions. Each Vice-President shall perform such other duties and have such
other powers, and have such additional descriptive designations in their titles
(if any), as are from time to time assigned to them by the Board of Directors,
the chief executive officer, or the President.
SECTION 4.06. SECRETARY. The Secretary shall keep the minutes of the
meetings of the stockholders, of the Board of Directors and of any committees,
in books provided for the purpose; he or she shall see that all notices are duly
given in accordance with the provisions of these By-Laws or as required by law;
he or she shall be custodian of the records of the Corporation; he or she may
witness any document on behalf of the Corporation, the execution of which is
duly authorized, see that the corporate seal is affixed where such document is
required or desired to be under its seal, and, when so affixed, may attest the
same. In general, he or she shall perform such other duties customarily
performed by a secretary of a corporation, and shall perform such other duties
and have such other powers as are from time to time assigned to him or her by
the Board of Directors, the chief executive officer, or the President.
SECTION 4.07. TREASURER. The Treasurer shall have charge of and be
responsible for all funds, securities, receipts and disbursements of the
Corporation, and shall deposit, or cause to be deposited, in the name of the
Corporation, all moneys or other valuable effects in such banks, trust companies
or other depositories as shall, from time to time, be selected by the Board of
Directors; he or she shall render to the President and to the Board of
Directors, whenever requested, an account of the financial condition of the
Corporation. In general, he or she shall perform such other duties customarily
performed by a treasurer of a corporation, and shall perform such other duties
and have such other powers as are from time to time assigned to him or her by
the Board of Directors, the chief executive officer, or the President.
SECTION 4.08. ASSISTANT AND SUBORDINATE OFFICERS. The assistant and
subordinate officers of the Corporation are all officers below the office of
Vice-President, Secretary, or Treasurer. The assistant or subordinate officers
shall have such duties as are from time to time assigned to them by the Board of
Directors, the chief executive officer, or the President.
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SECTION 4.09. ELECTION, TENURE AND REMOVAL OF OFFICERS. The Board of
Directors shall elect the officers of the Corporation. The Board of Directors
may from time to time authorize any committee or officer to appoint assistant
and subordinate officers. Election or appointment of an officer, employee or
agent shall not of itself create contract rights. All officers shall be
appointed to hold their offices, respectively, during the pleasure of the Board
of Directors. The Board of Directors (or, as to any assistant or subordinate
officer, any committee or officer authorized by the Board of Directors) may
remove an officer at any time. The removal of an officer does not prejudice any
of his or her contract rights. The Board of Directors (or, as to any assistant
or subordinate officer, any committee or officer authorized by the Board of
Directors) may fill a vacancy which occurs in any office for the unexpired
portion of the term.
SECTION 4.10. COMPENSATION. The Board of Directors shall have power to
fix the salaries and other compensation and remuneration, of whatever kind, of
all officers of the Corporation. No officer shall be prevented from receiving
such salary by reason of the fact that he or she is also a director of the
Corporation. The Board of Directors may authorize any committee or officer, upon
whom the power of appointing assistant and subordinate officers may have been
conferred, to fix the salaries, compensation and remuneration of such assistant
and subordinate officers.
ARTICLE V.
DIVISIONAL TITLES
SECTION 5.01. CONFERRING DIVISIONAL TITLES. The Board of Directors may
from time to time confer upon any employee of a division of the Corporation the
title of President, Vice President, Treasurer or Controller of such division or
any other title or titles deemed appropriate, or may authorize the Chairman of
the Board or the President to do so. Any such titles so conferred may be
discontinued and withdrawn at any time by the Board of Directors, or by the
Chairman of the Board or the President if so authorized by the Board of
Directors. Any employee of a division designated by such a divisional title
shall have the powers and duties with respect to such division as shall be
prescribed by the Board of Directors, the Chairman of the Board or the
President.
SECTION 5.02. EFFECT OF DIVISIONAL TITLES. The conferring of divisional
titles shall not create an office of the Corporation under Article IV unless
specifically designated as such by the Board of Directors; but any person who is
an officer of the Corporation may also have a divisional title.
ARTICLE VI.
STOCK
SECTION 6.01. CERTIFICATES FOR STOCK. Each stockholder is entitled to
certificates which represent and certify the shares of stock he or she holds in
the Corporation. Each stock certificate shall include on its face the name of
the Corporation, the name of the stockholder or
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other person to whom it is issued, and the class of stock and number of shares
it represents. It shall also include on its face or back (a) a statement of any
restrictions on transferability and a statement of the designations and any
preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and conditions of
redemption of the stock of each class which the Corporation is authorized to
issue, of the differences in the relative rights and preferences between the
shares of each series of a preferred or special class in series which the
Corporation is authorized to issue, to the extent they have been set, and of the
authority of the Board of Directors to set the relative rights and preferences
of subsequent series of a preferred or special class of stock or (b) a statement
which provides in substance that the Corporation will furnish a full statement
of such information to any stockholder on request and without charge. Such
request may be made to the Secretary or to its transfer agent. Except as
provided in the Maryland Uniform Commercial Code - Investment Securities, the
fact that a stock certificate does not contain or refer to a restriction on
transferability that is adopted after the date of issuance does not mean that
the restriction is invalid or unenforceable. It shall be in such form, not
inconsistent with law or with the Charter, as shall be approved by the Board of
Directors or any officer or officers designated for such purpose by resolution
of the Board of Directors. Each stock certificate shall be signed by the
Chairman of the Board, the President, or a Vice-President, and countersigned by
the Secretary, an Assistant Secretary, the Treasurer, or an Assistant Treasurer.
Each certificate may be sealed with the actual corporate seal or a facsimile of
it or in any other form and the signatures may be either manual or facsimile
signatures. A certificate is valid and may be issued whether or not an officer
who signed it is still an officer when it is issued. A certificate may not be
issued until the stock represented by it is fully paid.
SECTION 6.02. TRANSFERS. The Board of Directors shall have power and
authority to make such rules and regulations as it may deem expedient concerning
the issue, transfer and registration of certificates of stock; and may appoint
transfer agents and registrars thereof. The duties of transfer agent and
registrar may be combined.
SECTION 6.03. RECORD DATES OR CLOSING OF TRANSFER BOOKS. The Board of
Directors may, and shall have the sole power to, set a record date or direct
that the stock transfer books be closed for a stated period for the purpose of
making any proper determination with respect to stockholders, including which
stockholders are entitled to request a special meeting of stockholders, notice
of a meeting of stockholders, vote at a meeting of stockholders, receive a
dividend, or be allotted other rights. The record date may not be prior to the
close of business on the day the record date is fixed nor, subject to Section
1.06, more than 90 days before the date on which the action requiring the
determination will be taken; the transfer books may not be closed for a period
longer than 20 days; and, in the case of a meeting of stockholders, the record
date or the closing of the transfer books shall be at least ten days before the
date of the meeting. Any shares of the Corporation's own stock acquired by the
Corporation between the record date for determining stockholders entitled to
notice of or to vote at a meeting of stockholders and the time of the meeting
may be voted at the meeting by the holder of record as of the record date and
shall be counted in determining the total number of outstanding shares entitled
to be voted at the meeting.
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SECTION 6.04. STOCK LEDGER. The Corporation shall maintain a stock
ledger which contains the name and address of each stockholder and the number of
shares of stock of each class which the stockholder holds. The stock ledger may
be in written form or in any other form which can be converted within a
reasonable time into written form for visual inspection. The original or a
duplicate of the stock ledger shall be kept at the offices of a transfer agent
for the particular class of stock, or, if none, at the principal office in the
State of Maryland or the principal executive offices of the Corporation.
SECTION 6.05. CERTIFICATION OF BENEFICIAL OWNERS. The Board of
Directors may adopt by resolution a procedure by which a stockholder of the
Corporation may certify in writing to the Corporation that any shares of stock
registered in the name of the stockholder are held for the account of a
specified person other than the stockholder. The resolution shall set forth the
class of stockholders who may certify; 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
stock transfer books, the time after the record date or closing of the stock
transfer books within which the certification must be received by the
Corporation; and any other provisions with respect to the procedure which the
Board of Directors considers necessary or desirable. On receipt of a
certification which complies with the procedure adopted by the Board of
Directors in accordance with this Section, the person specified in the
certification is, for the purpose set forth in the certification, the holder of
record of the specified stock in place of the stockholder who makes the
certification.
SECTION 6.06. LOST STOCK CERTIFICATES. The Board of Directors may
determine the conditions for issuing a new stock certificate in place of one
which is alleged to have been lost, stolen, or destroyed, or the Board of
Directors may delegate such power to any officer or officers of the Corporation.
In their discretion, the Board of Directors or such officer or officers may
require the owner of the certificate to give bond, with sufficient surety, to
indemnify the Corporation against any loss or claim arising as a result of the
issuance of a new certificate. In their discretion, the Board of Directors or
such officer or officers may refuse to issue such new certificate save upon the
order of some court having jurisdiction in the premises.
SECTION 6.07. FRACTIONAL SHARE INTERESTS OR SCRIP. The Corporation may,
but shall not be obliged to, issue fractional shares of stock, eliminate a
fractional interest by rounding off to a full share of stock, arrange for the
disposition of a fractional interest by the person entitled to it, pay cash for
the fair value of a fractional share of stock determined as of the time when the
person entitled to receive it is determined, or issue scrip or other evidence of
ownership aggregating a full share for a certificate which represents the share;
but such scrip or other evidence of ownership shall not, unless otherwise
provided, entitle the holder to exercise any voting rights, to receive dividends
thereon or to participate in any of the assets of the Corporation in the event
of liquidation. The Board of Directors may impose any reasonable condition on
the issuance of scrip or other evidence of ownership, and may cause such scrip
or other evidence of ownership to be issued subject to the condition that it
shall become void if not exchanged for a certificate representing a full share
of stock before a specified date or subject to the condition that
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<PAGE> 16
the shares for which such scrip or other evidence of indebtedness is
exchangeable may be sold by the Corporation and the proceeds thereof distributed
to the holders of such scrip or other evidence of indebtedness, or subject to a
provision of forfeiture of such proceeds to the Corporation if not claimed
within a period of not less than three years from the date the scrip or other
evidence of ownership was originally issued.
ARTICLE VII.
FINANCE
SECTION 7.01. CHECKS, DRAFTS, ETC. All checks, drafts and orders for
the payment of money, notes and other evidences of indebtedness, issued in the
name of the Corporation, shall, unless otherwise provided by resolution of the
Board of Directors, be signed by the Chairman of the Board, the President, a
Vice-President, an Assistant Vice-President, the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary.
SECTION 7.02. ANNUAL STATEMENT OF AFFAIRS. The President, chief
accounting officer or such other executive officer designated by the Board of
Directors by resolution shall prepare annually a full and correct statement of
the affairs of the Corporation, to include a balance sheet and a financial
statement of operations for the preceding fiscal year. The statement of affairs
shall be submitted at the annual meeting of the stockholders and, within 20 days
after the meeting, placed on file at the Corporation's principal office.
SECTION 7.03. FISCAL YEAR. The fiscal year of the Corporation shall be
the 12 calendar months period ending December 31 in each year, unless otherwise
provided by the Board of Directors.
SECTION 7.04. DIVIDENDS. If declared by the Board of Directors at any
meeting thereof, the Corporation may pay dividends on its shares in cash,
property, or in shares of the capital stock of the Corporation, unless such
dividend is contrary to law or to a restriction contained in the Charter.
SECTION 7.05. BONDS. The Board of Directors may require any officer,
agent or employee of the Corporation to give a bond to the Corporation,
conditioned upon the faithful discharge of his or her duties, with one or more
sureties and in such amount as may be satisfactory to the Board of Directors.
ARTICLE VIII.
INDEMNIFICATION
SECTION 8.01. PROCEDURE. Any indemnification, or payment of expenses in
advance of the final disposition of any proceeding, shall be made promptly, and
in any event within 60 days, upon the written request of the director or officer
entitled to seek indemnification (the "Indemnified Party"). The right to
indemnification and advances hereunder shall be enforceable by the Indemnified
Party in any court of competent jurisdiction, if (i) the
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<PAGE> 17
Corporation denies such request, in whole or in part, or (ii) no disposition
thereof is made within 60 days. The Indemnified Party's costs and expenses
incurred in connection with successfully establishing his or her right to
indemnification, in whole or in part, in any such action shall also be
reimbursed by the Corporation. It shall be a defense to any action for advance
for expenses that (a) a determination has been made that the facts then known to
those making the determination would preclude indemnification or (b) the
Corporation has not received both (i) an undertaking as required by law to repay
such advances in the event it shall ultimately be determined that the standard
of conduct has not been met and (ii) a written affirmation by the Indemnified
Party of such Indemnified Party's good faith belief that the standard of conduct
necessary for indemnification by the Corporation has been met.
SECTION 8.02. EXCLUSIVITY, ETC. The indemnification and advance of
expenses provided by the Charter and these By-Laws shall not be deemed exclusive
of any other rights to which a person seeking indemnification or advance of
expenses may be entitled under any law (common or statutory), or any agreement,
vote of stockholders or disinterested directors or other provision that is
consistent with law, both as to action in his or her official capacity and as to
action in another capacity while holding office or while employed by or acting
as agent for the Corporation, shall continue in respect of all events occurring
while a person was a director or officer after such person has ceased to be a
director or officer, and shall inure to the benefit of the estate, heirs,
executors and administrators of such person. The Corporation shall not be liable
for any payment under this By-Law in connection with a claim made by a director
or officer to the extent such director or officer has otherwise actually
received payment under insurance policy, agreement, vote or otherwise, of the
amounts otherwise indemnifiable hereunder. All rights to indemnification and
advance of expenses under the Charter of the Corporation and hereunder shall be
deemed to be a contract between the Corporation and each director or officer of
the Corporation who serves or served in such capacity at any time while this
By-Law is in effect. Nothing herein shall prevent the amendment of this By-Law,
provided that no such amendment shall diminish the rights of any person
hereunder with respect to events occurring or claims made before its adoption or
as to claims made after its adoption in respect of events occurring before its
adoption. Any repeal or modification of this By-Law shall not in any way
diminish any rights to indemnification or advance of expenses of such director
or officer or the obligations of the Corporation arising hereunder with respect
to events occurring, or claims made, while this By-Law or any provision hereof
is in force.
SECTION 8.03. SEVERABILITY; DEFINITIONS. The invalidity or
unenforceability of any provision of this Article VIII shall not affect the
validity or enforceability of any other provision hereof. The phrase "this
By-Law" in this Article VIII means this Article VIII in its entirety.
ARTICLE IX.
SUNDRY PROVISIONS
SECTION 9.01. BOOKS AND RECORDS. The Corporation shall keep correct and
complete books and records of its accounts and transactions and minutes of the
proceedings of its stockholders and Board of Directors and of any executive or
other committee when exercising
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any of the powers of the Board of Directors. The books and records of the
Corporation may be in written form or in any other form which can be converted
within a reasonable time into written form for visual inspection. Minutes shall
be recorded in written form but may be maintained in the form of a reproduction.
The original or a certified copy of these By-Laws shall be kept at the principal
office of the Corporation.
SECTION 9.02. CORPORATE SEAL. The Board of Directors shall provide a
suitable seal, bearing the name of the Corporation, which shall be in the charge
of the Secretary. The Board of Directors may authorize one or more duplicate
seals and provide for the custody thereof. If the Corporation is required to
place its corporate seal to a document, it is sufficient to meet the requirement
of any law, rule, or regulation relating to a corporate seal to place the word
"(seal)" adjacent to the signature of the person authorized to sign the document
on behalf of the Corporation.
SECTION 9.03. VOTING STOCK IN OTHER CORPORATIONS. Stock of other
corporations or associations, registered in the name of the Corporation, may be
voted by the Chairman of the Board, the President, a Vice-President, or a proxy
appointed by either of them. The Board of Directors, however, may by resolution
appoint some other person to vote such shares, in which case such person shall
be entitled to vote such shares upon the production of a certified copy of such
resolution.
SECTION 9.04. MAIL. Any notice or other document which is required by
these By-Laws to be mailed shall be deposited in the United States mails,
postage prepaid.
SECTION 9.05. CONTRACTS AND AGREEMENTS. To the extent permitted by
applicable law, and except as otherwise prescribed by the Charter or these
By-Laws, the Board of Directors may authorize any officer, employee or agent of
the Corporation to enter into any contract or execute and deliver any instrument
in the name of and on behalf of the Corporation. Such authority may be general
or confined to specific instances. A person who holds more than one office in
the Corporation may not act in more than one capacity to execute, acknowledge,
or verify an instrument required by law to be executed, acknowledged, or
verified by more than one officer.
SECTION 9.06. RESIDENT AGENT; PRINCIPAL OFFICE. The initial name and
address of the resident agent of the Corporation and the initial address of the
principal office of the Corporation in the State of Maryland shall be as set
forth in the Charter. The Corporation may change its resident agent or principal
office from time to time by filing with the Maryland State Department of
Assessments and Taxation (the "Department") a resolution of the Board of
Directors authorizing the change, and the Corporation may change from time to
time the address of its resident agent by filing with the Department a statement
of the change executed by the President or any Vice-President.
SECTION 9.07. AMENDMENTS. These By-Laws may be altered, amended or
repealed or new By-Laws may be adopted by the stockholders or by the Board of
Directors, when such
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<PAGE> 19
power is conferred upon the Board of Directors by the Charter, at any regular
meeting of the stockholders or of the Board of Directors or at any special
meeting of the stockholders or of the Board of Directors if notice of such
alteration, amendment, repeal or adoption of new By-Laws be contained in the
notice of such special meeting. If the power to adopt, amend or repeal By-Laws
is conferred upon the Board of Directors by the Charter it shall not divest or
limit the power of the stockholders to adopt, amend or repeal By-Laws.(2)
SECTION 9.08. RELIANCE. Each director of the Corporation shall, in the
performance of his or her duties with respect to the Corporation, be entitled to
rely on any information, opinion report or statement, including financial
statement or other financial data, prepared or presented by an officer or
employee of the Corporation whom the director reasonably believes to be reliable
and competent in the matters presented, by a lawyer, certified public accountant
or other person as to a matter which the director reasonably believes to be
within the person's professional or expert competence or by a committee of the
Board of Directors on which the director does not serve, as to a matter within
its designated authority, if the director believes the committee to merit
confidence.
- -------------
(2) Under Article VI, Section 6 of the Charter, this section of the By-Laws may
not be amended without the approval of 2/3 of the stockholders.
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<PAGE> 1
EXHIBIT 10.9
EIGHTH AMENDMENT TO THE
THIRD AMENDED AND RESTATED AGREEMENT OF
LIMITED PARTNERSHIP OF AIMCO PROPERTIES, L.P.
This EIGHTH AMENDMENT TO THE THIRD AMENDED AND RESTATED AGREEMENT OF
LIMITED PARTNERSHIP OF AIMCO PROPERTIES, L.P., dated as of December 14, 1999
(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, 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
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 T," 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.
IN WITNESS WHEREOF, this Amendment has been executed as of the date
first written above.
THE GENERAL PARTNER:
AIMCO-GP, INC.
By: /s/ PETER KOMPANIEZ
---------------------------------
Name:
Title:
<PAGE> 2
EXHIBIT T
PARTNERSHIP UNIT DESIGNATION OF
THE CLASS FOUR 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
Four Partnership Preferred Units," and the number of Partnership Preferred Units
constituting such class shall be 5,100,000.
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:
"Adjustment Factor" means 1.0; provided, however, that in the event
that:
(i) the Previous General Partner (a) declares or pays a dividend on its
outstanding REIT Shares in REIT Shares or makes a distribution to all holders of
its outstanding REIT Shares in REIT Shares, (b) splits or subdivides its
outstanding REIT Shares or (c) effects a reverse stock split or otherwise
combines its outstanding REIT Shares into a smaller number of REIT Shares, the
Adjustment Factor shall be adjusted by multiplying the Adjustment Factor
previously in effect by a fraction, (i) the numerator of which shall be the
number of REIT Shares issued and outstanding on the record date for such
dividend, distribution, split, subdivision, reverse split or combination
(assuming for such purposes that such dividend, distribution, split,
subdivision, reverse split or combination has occurred as of such time) and (ii)
the denominator of which shall be the actual number of REIT Shares (determined
without the above assumption) issued and outstanding on the record date for such
dividend, distribution, split, subdivision, reverse split or combination;
(ii) the Previous General Partner distributes any rights, options or
warrants to all holders of its REIT Shares to subscribe for or to purchase or to
otherwise acquire REIT Shares (or other securities or rights convertible into,
exchangeable for or exercisable for REIT Shares) at a price per share less than
the Value of a REIT Share on the record date for such distribution (each a
"Distributed Right"), then the Adjustment Factor shall be adjusted by
multiplying the Adjustment Factor previously in effect by a fraction (a) the
numerator of which shall be the number of REIT Shares issued and outstanding on
the record date plus the maximum number of REIT Shares purchasable under such
Distributed Rights and (b) the denominator of which shall be the number of REIT
Shares issued and outstanding on the record date plus a fraction (1) the
numerator of which is the maximum number of REIT Shares purchasable under such
Distributed Rights times the minimum purchase price per REIT Share under such
Distributed Rights and (2) the denominator of which is the Value of a REIT Share
as of the record date; provided, however, that, if any such Distributed Rights
expire or become no longer exercisable, then the Adjustment Factor shall be
adjusted, effective retroactive to the date of distribution of the Distributed
Rights, to reflect a reduced maximum number of REIT Shares or any change in the
minimum purchase price for the purposes of the above fraction; and
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<PAGE> 3
(iii) the Previous General Partner shall, by dividend or otherwise,
distribute to all holders of its REIT Shares evidences of its indebtedness or
assets (including securities, but excluding any dividend or distribution
referred to in subsection (i) above), which evidences of indebtedness or assets
relate to assets not received by the Previous General Partner, the General
Partner and/or the Special Limited Partner pursuant to a pro rata distribution
by the Partnership, then the Adjustment Factor shall be adjusted to equal the
amount determined by multiplying the Adjustment Factor in effect immediately
prior to the close of business on the date fixed for determination of
shareholders entitled to receive such distribution by a fraction (i) the
numerator shall be such Value of a REIT Share on the date fixed for such
determination and (ii) the denominator shall be the Value of a REIT Share on the
dates fixed for such determination less the then fair market value (as
determined by the General Partner, whose determination shall be conclusive) of
the portion of the evidences of indebtedness or assets so distributed applicable
to one REIT Share.
Any adjustments to the Adjustment Factor shall become effective
immediately after the effective date of such event, retroactive to the record
date, if any, for such event.
"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 sum of (x) the product of (i) the number of Tendered
Units, multiplied by (ii) the Liquidation Preference for a Preferred Unit, plus,
(y) if positive, the product of (i) the number of Tendered Units, multiplied by
(ii) the Liquidation Preference for a Preferred Unit (excluding any accumulated,
accrued or unpaid distributions), multiplied by (iii) the quotient obtained by
dividing (a) the amount by which the Market Value of a Common Share, calculated
as of the date of receipt by the General Partner of a Notice of Redemption for
such Tendered Units, exceeds $45, by (b) $45.
"Class Four 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.
"Common Shares" shall mean the shares of Class A Common Stock of the
Previous General Partner.
"Common Shares Amount" shall mean, with respect to any Tendered Units,
a number of Common Shares equal to the quotient obtained by dividing (i) the
Cash Amount for such Tendered Units, by (ii) the Market Value of a Common Share
calculated as of the date of receipt by the General Partner of a Notice of
Redemption for such Tendered Units.
"Conversion Price" shall mean, as of any date, the quotient obtained by
dividing $45 by the Adjustment Factor in effect as of such date.
"Current Market Price" of a share of any Equity Stock shall mean the
closing price, regular way on such day, or, if no sale takes place on such day,
the average of the reported closing bid and asked prices, regular way, on such
day, in either case as reported on the principal national securities exchange on
which such securities are listed or admitted for trading, or, if such security
is not quoted on any national securities exchange, on the NASDAQ National Market
or if such security is not quoted on the NASDAQ National Market, the average of
the closing bid and asked prices on such day in the over-the-counter market as
reported by NASDAQ or, if bid and asked prices for each security on such
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day shall not have been reported through NASDAQ, the average of the bid and
asked prices on such day as furnished by any New York Stock Exchange or National
Association of Securities Dealers, Inc. member firm regularly making a market in
such security selected for such purpose by the Chief Executive Officer of the
General Partner or the Board of Directors of the General Partner or if any class
or series of securities are not publicly traded, the fair value of the shares of
such class as determined reasonably and in good faith by the Board of Directors
of the General Partner.
"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 in Section
4(a) of this Partnership Unit Designation.
"Equity Stock" shall mean one or more shares of any class of capital
stock of the Previous General Partner.
Internal Rate of Return" shall mean, as of any determination date, the
effective discount rate under which the present value of the Inflows associated
with an outstanding Class Four Partnership Preferred Unit equals $25. For
purposes of calculation of Internal Rate of Return, "Inflows" shall mean (a) all
distributions (whether paid in cash or property) that have been received in
respect of such unit, (b) the cash payment in respect of distributions payable
on such unit pursuant to Section 7(b)(iii) hereof if such unit were converted to
Partnership Common Units on the determination date, and (c) the amount by which
the Market Value of a REIT Share, as of the determination date, exceeds the
Conversion Price then in effect. For purposes of calculating the amounts of any
Inflows, all distributions received in property shall be deemed to have a value
equal to the Market Value of such distributions as of the date such distribution
is received. Neither the fact of any transfer of any units of the Class Four
Partnership Preferred Units nor the amount of any consideration received by the
holder thereof or paid by any successor holder in connection with any transfer
shall affect the calculation of Internal Rate of Return.
"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.
"Majority in Interest of the Limited Partners" means Limited Partners
(other than (i) the Special Limited Partner and (ii) any Limited Partner fifty
percent (50%) or more of whose equity is owned, directly or indirectly, by the
(a) General Partner or (b) any REIT as to which the General Partner is a
"qualified REIT subsidiary" (within the meaning of Code Section 856(i)(2)))
holding more than fifty percent (50%) of the outstanding Partnership Common
Units, Class I High Performance Partnership Units, Class Four Partnership
Preferred Units and all other outstanding classes of Partnership Units held by
all Limited Partners (other than (i) the Special Limited Partner and (ii) any
Limited Partner fifty percent (50%) or more of whose equity is owned, directly
or indirectly, by (a) the General Partner or (b) any REIT as to which the
General Partner is a "qualified REIT subsidiary" (within the meaning of Code
Section 856(i)(2))).
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<PAGE> 5
"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 (or twenty (20) consecutive Trading Days for purposes
of calculating "Internal Rate of Return") 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 I 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)(4) of this Partnership Unit Designation.
"Public Offering Funding" shall have the meaning set forth in Section
6(f)(2) of this Partnership Unit Designation.
"Redemption" shall have the meaning set forth in Section 6(b) of this
Partnership Unit Designation.
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"Registrable Shares" shall have the meaning set forth in Section
6(f)(2) of this Partnership Unit Designation.
"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 5 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)
hereof.
"Tendered Units" shall have the meaning set forth in Section 6(b)
hereof.
"Trading Day" shall mean, when used with respect to the Closing Price
of a share of any Equity Stock, (i) if the Equity Stock is listed or admitted to
trading on the NYSE, a day on which the NYSE is open for the transaction of
business, (ii) if the Equity Stock is not listed or admitted to trading on the
NYSE but is listed or admitted to trading on another national securities
exchange or automated quotation system, a day on which the principal national
securities exchange or automated quotation system, as the case may be, on which
the Equity Stock is listed or admitted to trading is open for the transaction of
business, or (iii) if the Equity Stock is not listed or admitted to trading on
any national securities exchange or automated quotation system, any day other
than a Saturday, a Sunday or a day on which banking institutions in the State of
New York are authorized or obligated by law or executive order to close.
"Transfer Agent" shall mean such transfer agent as may be designated by
the Partnership or its designee as the transfer agent for the Class Four
Partnership Preferred Units; provided, that if the Partnership has not
designated a transfer agent then the Partnership shall act as the transfer agent
for the Class Four Partnership Preferred Units.
3. RANKING.
Any class or series of Partnership Units of the Partnership shall be
deemed to rank:
(a) prior or senior to the Class Four Partnership Preferred
Units, as to the payment of distributions and as to the distribution 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
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distributable upon liquidation, dissolution or winding up, as the case may be,
in preference or priority to the holders of Class Four 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 Four Partnership Preferred
Units, as to the payment of distributions and as to the 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 Four
Partnership Preferred Units if (i) 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 G Partnership Preferred Units,
Class H Partnership Preferred Units, Class I Partnership Preferred Units, Class
J Partnership Preferred Units, Class K Partnership Preferred Units, Class L
Partnership Preferred Units, Class One Partnership Preferred Units or Class Two
Partnership Preferred Units or (ii) the holders of such class or series of
Partnership Units and the Class Four 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 clauses (i) and (ii) of this paragraph being
hereinafter referred to, collectively, as "Parity Partnership Units"); and
(c) junior to the Class Four Partnership Preferred Units, as
to the payment of distributions and as to the distribution of assets upon
liquidation, dissolution or winding up, if (i) such class or series of
Partnership Units shall be Partnership Common Units or Class I High Performance
Partnership Units or (ii) the holders of Class Four 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 $0.50 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 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.
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(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.
(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, the 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") of (i) $25 per
Preferred Unit, plus (ii) accumulated, accrued and unpaid distributions (whether
or not earned or declared) to the date of final distribution to such holders;
but such holders shall not be entitled to any further allocation of income or
gain. 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 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 Partnership 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
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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
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 (any
Preferred Units tendered for Redemption being hereafter "Tendered Units") in
exchange (a "Redemption") for Common 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
Common Shares rather than cash, then the Partnership shall direct the Previous
General Partner to issue and deliver such Common 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 Common
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 Common 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 Common Shares equal to the Common Shares Amount for
such number of 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
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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 Common Shares shall be
delivered by the Previous General Partner as duly authorized, validly issued,
fully paid and non-assessable 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 such
Person, whether or not such Common 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
Common Shares for all purposes, including, without limitation, rights to vote or
consent, receive dividends, and exercise rights, as of the Specified Redemption
Date. Common 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., Colorado Center, Tower Two, 2000 South Colorado Boulevard, Suite 2-1000,
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 Common Shares pursuant to this Section 6 following receipt
of a Notice of Redemption (a "Declination"):
(1) 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.
(2) 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
Common Shares
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("Registrable Shares") equal to the Common 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.
(3) 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 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 Common 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:
(1) 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.
(2) 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.
(3) Each Tendering Party (a) may effect a Redemption
only once in each fiscal quarter of a Twelve-Month Period and
(b) may not effect a Redemption during the period after the
Partnership Record Date with respect to a distribution and
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<PAGE> 12
before the record date established by the Previous General
Partner for a distribution to its shareholders of some or all
of its portion of such Partnership distribution.
(4) 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 the Primary Offering Notice.
(5) 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.
(6) 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.
(7) 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:
(1) A written affidavit, dated the same date as the
Notice of Redemp tion, (a) disclosing the actual and
constructive ownership, as determined for purposes of Code
Sections 856(a)(6) and 856(h), of Common Shares and any other
classes or shares of the Previous General Partner by (i) such
Tendering Party and (ii) any
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Related Party and (b) representing that, after giving effect
to the Redemption, neither the Tendering Party nor any Related
Party will own Common Shares in excess of the Ownership Limit;
(2) A written representation that neither the
Tendering Party nor any Related Party has any intention to
acquire any additional Common 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
(3) 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
Common 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 own Common 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 Common 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 Common 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 Common 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
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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. CONVERSION.
(a) (i) Subject to and upon compliance with the provisions of
this Section 7, a holder of Class Four Partnership Preferred Units shall have
the right, at such holder's option, to convert such units, in whole or in part,
into the number of Partnership Common Units per Class Four Partnership Preferred
Unit obtained by dividing the Liquidation Preference (excluding any accumulated,
accrued and unpaid distributions) per Class Four Partnership Preferred Unit by
the Conversion Price in effect at the time and on the date provided for in
subparagraph (b)(iv) of this Section 7. In order to exercise the conversion
right, the holder of each Class Four Partnership Preferred Unit to be converted
shall surrender the certificate representing such unit, duly endorsed or
assigned to the Partnership or in blank, at the office of the Transfer Agent,
accompanied by written notice to the Partnership that the holder thereof elects
to convert such Class Four Partnership Preferred Unit.
(ii) With respect to any Class Four Partnership Preferred
Units that have been issued and outstanding for at least two (2) years, if, as
of any date, the Internal Rate of Return exceeds 12.5%, then the Partnership
shall have the right, but not the obligation, to cause such Class Four
Partnership Preferred Units to be converted, in whole or in part, into the
number of Partnership Common Units per Class Four Partnership Preferred Unit
obtained by dividing the Liquidation Preference (excluding any accumulated,
accrued and unpaid distributions) per Class Four Partnership Preferred Unit by
the Conversion Price in effect at the time and on the date provided for in
subparagraph (b)(iv) of this Section 7. In order to exercise the conversion
right, the Partnership shall send notice of such conversion to each holder of
record of Class Four Partnership Preferred Units no later than five Business
Days after a date on which the Internal Rate of Return exceeds 12.5%. Such
notice shall be provided by facsimile or, if facsimile is not available, then by
first class mail, postage prepaid, at such holders' address as the same appears
on the records of the Partnership. Any notice which was transmitted or mailed in
the manner herein provided shall be conclusively presumed to have been duly
given on the date received by the holder. Each such notice shall state, as
appropriate: (1) the date of conversion, which date may be any date within one
business day following the date on which the notice is transmitted or mailed;
(2) the number of units of Class Four Partnership Preferred Units to be
converted and, if fewer than all such units held by such holder are to be
converted, the number of such units to be converted; and (3) the then current
Conversion Price. Upon receiving such notice of conversion, each such holder
shall promptly surrender the certificates representing such Class Four
Partnership Preferred Units as are being converted on the conversion date, duly
endorsed or assigned to the Partnership or in blank, at the office of the
Transfer Agent; provided, however, that the failure to so surrender any such
certificates shall not in any way affect the validity of the conversion of the
underlying Class Four Partnership Preferred Units into Partnership Common Units.
(b) (i) Unless the Partnership Common Units issuable on
conversion are to be issued in the same name as the name in which such Class
Four Partnership Preferred Units are registered, each such unit surrendered
following conversion shall be accompanied by instruments of transfer, in form
satisfactory to the Partnership, duly executed by the holder or such holder's
duly authorized representative, and an amount sufficient to pay any transfer or
similar tax (or evidence reasonably satisfactory to the Partnership
demonstrating that such taxes have been paid).
(ii) A holder of Class Four Partnership Preferred Units
shall, as of the date of the conversion of such units to Partnership Common
Units, be entitled to receive a cash payment in
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respect of any distributions (whether or not earned or declared) that are
accumulated, accrued and unpaid thereon as of the time of such conversion,
provided, however, that payment in respect of any distributions on such units
that has been declared but for which the Distribution Payment Date has not yet
been reached shall be payable as of such Distribution Payment Date. Except as
provided above, the Partnership shall make no payment or allowance for unpaid
distributions, whether or nor in arrears, on converted units.
(iii) As promptly as practicable after the surrender
of certificates for Class Four Partnership Preferred Units as aforesaid, and in
any event no later than three business days after the date of such surrender,
the Partnership shall issue and deliver at such office to such holder, or send
on such holders' written order, a certificate or certificates for the number of
full Partnership Common Units issuable upon the conversion of such Class Four
Partnership Preferred Units in accordance with the provisions of this Section 7,
and any fractional interest in respect of a Partnership Common Unit arising upon
such conversion shall be settled as provided in paragraph (c) of this Section 7.
(iv) Each conversion shall be deemed to have been
effected (x) in the case of a conversion pursuant to subparagraph (a)(i) of this
Section 7 immediately prior to the close of business on the date on which the
certificates for Class Four Partnership Preferred Units shall have been
surrendered and such notice received by the Partnership as provided in
subparagraph (a)(i) of this Section 7, and (y) in the case of a conversion
pursuant to subparagraph (a)(ii) of this Section 7, immediately prior to the
close of business on the date identified as the conversion date in the notice of
conversion sent by the Partnership pursuant to subparagraph (a)(ii) of this
Section 7; and, in the case of (x) or (y), the person or persons in whose name
or names any certificate or certificates for Partnership Common Units shall be
issuable upon such conversion shall be deemed to have become the holder or
holders of record of the units represented thereby at such time on such date,
and such conversion shall be at the Conversion Price in effect at such time on
such date, unless the transfer books of the Partnership shall be closed on that
date, in which event such person or persons shall be deemed to become such
holder or holders of record at the close of business on the next succeeding day
on which such transfer books are open, but such conversion shall be at the
Conversion Price in effect on the date in the notice of conversion sent by the
Partnership as aforesaid.
(c) No fractional Partnership Common Units or scrip
representing fractions of a Partnership Common Unit shall be issued upon
conversion of the Class Four Partnership Preferred Units. Instead of any
fractional interest in a Partnership Common Unit that would otherwise be
deliverable upon the conversion of Class Four Partnership Preferred Units, the
Partnership shall pay to the holder of such units an amount of cash equal to the
product of (i) such fraction and (ii) the value of a REIT Share as of the date
of conversion. If more than one of any holder's units shall be converted at one
time, the number of full Partnership Common Units issuable upon conversion
thereof shall be computed on the basis of the aggregate number of Class Four
Partnership Preferred Units so converted.
(d) If the Partnership shall be a party to any transaction
(including with limitation a merger, consolidation, statutory exchange, sale of
all or substantially all of the Partnership's assets or recapitalization of the
Partnership Common Units, but excluding any transaction as to which a charge in
the Adjustment Factor would be effected) (each of the foregoing being referred
to herein as a "Transaction"), in each case, as a result of which Partnership
Common Units shall be converted into the right to receive securities or other
property (including cash or any combination thereof), each Class Four
Partnership Preferred Unit which is not converted into the right to receive
securities or other property in connection with such Transaction shall thereupon
be convertible into the kind and amount of securities and other property
(including cash or any combination thereof) receivable upon such consummation by
a holder of that number of Partnership Common Units into which Class Four
T-14
<PAGE> 16
Partnership Preferred Units were convertible immediately prior to such
Transaction. The Partnership shall not be a party to any transaction unless the
terms of such Transaction are consistent with the provisions of this paragraph
(d), and it shall not consent or agree to the occurrence of any Transaction
until the Partnership has entered into an agreement with the successor or
purchasing entity, as the case may be, for the benefit of the holders of the
Class Four Partnership Preferred Units that will contain provisions enabling the
holders of the Class Four Partnership Preferred Units that remain outstanding
after such Transaction to convert into the consideration received by holders of
Partnership Common Units at the Conversion Price in effect immediately prior to
such Transaction. The provisions of this Paragraph (d) shall apply to successive
Transactions.
(e) Whenever the Conversion Price is adjusted as herein
provided (whether pursuant to paragraph (d) of this Section 7 or as a result of
a change in the Adjustment Factor), the General Partner shall promptly file with
the Transfer Agent an officer's certificate setting forth the Conversion Price
after such adjustment and setting forth a brief statement of the facts requiring
such adjustment which certificate shall be conclusive evidence of the
correctness of such adjustment absent manifest error. Promptly after delivery of
such certificate, the General Partner shall prepare a notice of such adjustment
of the Conversion Price setting forth the adjusted Conversion Price and the
effective date such adjustment becomes effective and shall mail such notice of
such adjustment of the Conversion Price to each holder of Class Four Partnership
Preferred Units at such holder's address as shown on the records of the
Partnership.
(f) In any case in which an adjustment to the Adjustment
Factor shall become effective immediately after the effective date of an event,
retroactive to the record date, if any, for such event, the Partnership may
defer until the occurrence of such event (A) issuing to the holder of any Class
Four Partnership Preferred Units converted after such record date and before the
occurrence of such event the additional Partnership Common Units issuable upon
such conversion by reason of the adjustment required by such event over and
above the Partnership Common Units issuable upon such conversion before giving
effect to such adjustment and (B) paying to such holder any amount of cash in
lieu of any fraction pursuant to Section 7(c).
(g) There shall be no adjustment of the Conversion Price in
case of the issuance of any unit of the Partnership except as specifically set
forth in the definition of "Adjustment Factor" or in this Section 7. In
addition, notwithstanding any other provision contained in the definition of
"Adjustment Factor" or in this Section 7, there shall be no adjustment of the
Conversion Price upon the payment of any cash distributions on any units of the
Partnership.
(h) If the Partnership shall take any action affecting the
Partnership Common Units, other than action described in the definition of
"Adjustment Factor" or in this Section 7 that, in the opinion of the General
Partner would materially adversely affect the conversion rights of the holders
of Class Four Partnership Preferred Units, the Conversion Price for the Class
Four Partnership Preferred Units may be adjusted, to the extent permitted by law
in such manner, if any, and at such time as the General Partner, in its sole
discretion, may determine to be equitable under the circumstances.
(i) The Partnership will pay any and all documentary stamp or
similar issue or transfer taxes payable in respect of the issue or delivery of
Partnership Common Units or other securities or property on conversion of Class
Four Partnership Preferred Units pursuant hereto; provided, however, that the
Partnership shall not be required to pay any tax that may be payable in respect
of any transfer involved in the issue or delivery of Partnership Common Units or
other securities or property in a name other than that of the holder of the
Class Four Partnership Preferred
T-15
<PAGE> 17
Units to be converted, and no such issue or delivery shall be made unless and
until the person requesting such issue or delivery has paid to the Partnership
the amount of any such tax or established, to the reasonable satisfaction of the
Partnership, that such tax has been paid.
(j) In addition to any other adjustment required hereby, to
the extent permitted by law, the Partnership from time to time may decrease the
Conversion Price by any amount, permanently or for a period of at least twenty
Business Days, if the decrease is irrevocable during the period.
(k) For purposes of the definition of "Twelve-Month Period" in
the Agreement, any holder of Class Four Partnership Preferred Units that have
been converted to Partnership Common Units shall be deemed to have acquired such
Partnership Common Units when such Class Four Partnership Units were acquired.
8. 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.
9. GENERAL.
The ownership of the Preferred Units shall be evidenced by one or more
certificates in the form of Annex II 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 Preferred Units.
10. ALLOCATIONS OF INCOME AND LOSS.
For each taxable year, each holder of Preferred Units will be allocated
a portion of the Net Income and Net Loss of the Partnership equal to the portion
of the Net Income and Net Loss of the Partnership that would be allocated to
such holder pursuant to Article 6 of the Agreement if such holder held a number
of Partnership Common Units equal to (i) the number of Preferred Units held by
such holder, multiplied by (ii) 0.625. Upon liquidation, dissolution or winding
up of the Partnership, the Partnership shall endeavor to allocate income and
gain to the holders of the Preferred Units such that the Capital Accounts
related to the Preferred Units are equal to their Liquidation Preference.
11. 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. As long as any Preferred Units are outstanding,
for purposes of determining the Consent of Limited Partners under the Agreement,
the "Majority In Interest of the Limited Partners" shall have the meaning set
forth in Section 2 hereof. As 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 materially and adversely affect the rights or
preferences of the holders of Preferred Units.
T-16
<PAGE> 18
With respect to the exercise of the above-described voting rights, each
Preferred Unit will have one (1) vote per Preferred Unit.
12. RESTRICTIONS ON TRANSFER.
Preferred Units are subject to the same restrictions on transfer
applicable to Common Units, as set forth in the Agreement.
T-17
<PAGE> 19
ANNEX I
TO EXHIBIT T
NOTICE OF REDEMPTION
To: AIMCO Properties, L.P.
c/o AIMCO-GP, Inc.
Colorado Center, Tower Two
2000 South Colorado Boulevard, Suite 2-1000
Denver, Colorado 80222
Attention: Investor Relations
The undersigned Limited Partner or Assignee hereby irrevocably
tenders for redemption Class Four Partnership Preferred Units in AIMCO
Properties, L.P. in accordance with the terms of the 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 Four
Partnership Preferred Units. The undersigned Limited Partner or Assignee:
(a) if the Partnership elects to redeem such Class Four
Partnership Preferred Units for Common 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 Four
Partnership Preferred Units;
(b) undertakes (i) to surrender such Class Four 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 Common Shares by (i) the
undersigned Limited Partner or Assignee and (ii) any Related
Party and (b) representing that, after giving effect to the
Redemp tion, neither the undersigned Limited Partner or
Assignee nor any Related Party will own Common 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 Common Shares
prior to the closing of the Redemp tion 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 Common 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 contem plated hereby, neither the undersigned
Limited Partner or Assignee nor any
T-I-1
<PAGE> 20
Related Party shall own Common Shares in violation of the
Ownership Limit.
(c) directs that the certificate representing the Common
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 surren der.
Dated: __________________
Name of Limited Partner or Assignee:
--------------------------------------------
--------------------------------------------
(Signature of Limited Partner or Assignee)
--------------------------------------------
(Street Address)
--------------------------------------------
(City) (State) (Zip Code)
Signature Guaranteed by:
--------------------------------------------
(continued on next page)
T-I-2
<PAGE> 21
Issue check payable to
or Certificates in the
name of:
------------------------------------------
Please insert social security
or identifying number:
-----------------------------------
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 FOUR 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 INSTITU
TION, (Banks, Stockbrokers, Savings and Loan Associations and Credit Unions),
WITH MEMBER SHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM PURSUANT
TO SEC RULE 17Ad-15.
T-I-3
<PAGE> 22
ANNEX II
TO EXHIBIT T
FORM OF UNIT CERTIFICATE
OF
CLASS FOUR 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,]1 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 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 FOUR 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 Four Partnership Preferred Units represented hereby
are issued and shall be held subject to all of the provisions of the 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
---------------------------
- ------------
1 Not required if Units are issued pursuant to a current and effective
registra tion statement under the Act.
T-II-1
<PAGE> 23
ASSIGNMENT
For Value Received, ____________________________ hereby sells, assigns
and transfers unto _____________________________________________________________
________________________________________________________________________________
______________________ Class Four 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
Four 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 INSTITU
TION, (Banks, Stockbrokers, Savings and Loan Associations and Credit Unions),
WITH MEMBER SHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM PURSUANT
TO SEC RULE 17Ad-15.
T-II-2
<PAGE> 1
EXHIBIT 10.10
NINTH AMENDMENT TO THE THIRD
AMENDED AND RESTATED AGREEMENT OF
LIMITED PARTNERSHIP OF AIMCO PROPERTIES, L.P.
THIS NINTH AMENDMENT TO THE THIRD AMENDED AND RESTATED AGREEMENT OF
LIMITED PARTNERSHIP OF AIMCO PROPERTIES, L.P., dated as of December 21, 1999
(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 (the "Agreement"). Capitalized terms used, but not otherwise
defined herein, shall have the respective meanings ascribed thereto in the
Agreement.
WHEREAS, on March 22, 1999, the Partnership entered into several
agreements with the Regency Windsor Companies, whereby the Partnership agreed to
offer Class Three Partnership Preferred Units (the "Partnership Preferred
Units"), with the designations, preferences and other rights, terms and
provisions set forth herein to partners of certain limited partnerships
affiliated with the Regency Windsor Companies; and
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:
i. The Agreement is hereby amended by the addition of a new exhibit,
entitled "Exhibit U", in the form attached hereto, which shall be attached to
and made a part of the Agreement.
ii. 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.
<PAGE> 2
IN WITNESS WHEREOF, this Amendment has been executed as of the date
first written above.
GENERAL PARTNER:
AIMCO-GP, INC.
By: /s/ PETER K. KOMPANIEZ
----------------------------------------
Name: Peter K. Kompaniez
Title: President and Vice Chairman
2
<PAGE> 3
EXHIBIT "U"
PARTNERSHIP UNIT DESIGNATION
OF THE
CLASS THREE 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
Three Partnership Preferred Units," and the number of Partnership Preferred
Units constituting such class shall be three million (3,000,000).
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 Unit, cash in an
amount equal to the Liquidation Preference of such Tendered Unit.
"Class Three 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
4(b) of this Partnership Unit Designation.
"Distribution Rate" shall mean 9.5%, subject to adjustment as provided
in Section 4(a) of this Partnership Unit Designation.
U-1
<PAGE> 4
"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 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.
"Majority in Interest of the Limited Partners" means Limited Partners
(other than (i) the Special Limited Partner and (ii) any Limited Partner fifty
percent (50%) or more of whose equity is owned, directly or indirectly, by the
(a) General Partner or (b) any REIT as to which the General Partner is a
"qualified REIT subsidiary" (within the meaning of Code Section 856(i)(2)))
holding more than fifty percent (50%) of the outstanding Partnership Common
Units, Class I High Performance Partnership Units, Class I Partnership Preferred
Units, Class One Partnership Preferred Units, Class Two Partnership Preferred
Units, Class Three Partnership Preferred Units and Class Four Partnership
Preferred Units held by all Limited Partners (other than (i) the Special Limited
Partner and (ii) any Limited Partner fifty percent (50%) or more of whose equity
is owned, directly or indirectly, by (a) the General Partner or (b) any REIT as
to which the General Partner is a "qualified REIT subsidiary" (within the
meaning of Code Section 856(i)(2))).
"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;
U-2
<PAGE> 5
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 I 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.
"Previous General Partner" shall mean Apartment Investment and
Management Company, a Maryland corporation.
"Primary Offering Notice" shall have the meaning set forth in Section
6(h)(4) of this Partnership Unit Designation.
"Public Offering Funding" shall have the meaning set forth in Section
6(f)(2) of this Partnership Unit Designation.
"Qualifying Preferred Stock" shall mean any class or series of
non-convertible perpetual preferred stock that (i) has been issued by a
corporation that has elected to be taxed as a REIT, (ii) has a fixed rate of
distributions or dividends, (iii) has a fixed liquidation preference (and which
entitles the holder thereof to no payments other than the payment of
distributions at a fixed rate and the payment of a fixed liquidation
preference), (iv) is listed on the New York Stock Exchange, (v) cannot be
redeemed at the option of the issuer for the first five years after issuance of
such class or series of preferred stock and that, at the Reset Date (or, if
applicable, as of the date the calculation of the Weighted Average of Preferred
Stock Dividend Yields is being made for purposes hereof in respect of such Reset
Date) cannot be so redeemed and (vi) is issued by an issuer the unsecured debt
of which has an average rating from Moody's Investors Services, Inc., Standard &
Poors Rating Services or Duff & Phelps Credit Rating Co. in a category that is
one rating category below the average rating, as of such date, of the Previous
General Partner's unsecured debt.
"Redemption" shall have the meaning set forth in Section 6(b)(i) of
this Partnership Unit Designation.
"Registrable Shares" shall have the meaning set forth in Section
6(f)(2) of this Partnership Unit Designation.
U-3
<PAGE> 6
"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.
"Reset Date" shall mean December 21, 2004 and every fifth anniversary
of such date that occurs thereafter.
"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.
"Weighted Average of Preferred Stock Dividend Yields" shall mean, as of
any date of calculation, the average of the Dividend Yields, as of such date, of
each Qualifying Preferred Stock (other than a Qualifying Preferred Stock issued
by the Previous General Partner) that has been outstanding during the entire
year immediately preceding the date of calculation. Each such class of
Qualifying Preferred Stock (except Qualifying Preferred Stock of the Previous
General Partner) shall be weighted for its total market value.
3. RANKING.
Any class or series of Partnership Units of the Partnership shall be
deemed to rank:
U-4
<PAGE> 7
a. prior or senior to the Class Three Partnership Preferred
Units, as to the payment of distributions and as to the distribution 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 Three Partnership Preferred
Units (the partnership units being hereinafter referred to, collectively, as
"Senior Partnership Units");
b. on a parity with the Class Three Partnership Preferred
Units, as to the payment of distributions and as to the 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 Three
Partnership Preferred Units (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 G Partnership Preferred Units,
Class H Partnership Preferred Units, Class J Partnership Preferred Units or
Class One Partnership Preferred Units or (ii) if the holders of such class or
series of partnership units and the Class Three 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 clauses (i) and (ii) of this paragraph being
hereinafter referred to, collectively, as "Parity Partnership Units"); and
c. junior to the Class Three 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 Partnership Common Units or Class I High Performance
Partnership Units or (ii) if the holders of Class Three 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. The "Quarterly Distribution Amount," as of any date, shall
be equal to (i) the Distribution Rate then in effect, multiplied by (ii) $25,
and divided by (iii) four. Holders of Preferred Units will be entitled to
receive, when and as declared by the General Partner, quarterly cash
distributions in an amount per Preferred Unit equal to the Quarterly
Distribution Amount in effect as of the date such distribution is declared by
the General Partner, and no more. On each Reset Date, the Distribution Rate
thereafter in effect shall be adjusted by the General Partner to equal the
lesser of (i) the Distribution Rate in effect immediately prior to such Reset
Date or (ii) the Dividend Yield of the class of Qualifying Preferred Stock most
recently issued by the Previous General Partner or, if there is no class of
Qualifying Preferred Stock of the Previous General Partner outstanding as of any
Reset Date, the Weighted Average of Preferred Stock Dividend Yields, calculated
as of the end of the calendar quarter immediately preceding such Reset Date;
provided, further, that if for any reason there are no classes of Qualifying
Preferred Stock of the type described in the definition of "Weighted Average of
Preferred Stock Dividend Yields" outstanding on any Reset Date and the reference
to the Weighted Average of Preferred Stock Dividend Yields would otherwise be
determinative of the
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calculation of the adjusted Distribution Rate on such Reset Date, the adjusted
Distribution Rate for the succeeding five (5) year period shall be the
Distribution Rate in effect immediately prior to such Reset Date. Upon any such
adjustment of the Distribution Rate, the General Partner shall send a notice
describing such adjustment to the holders of the Preferred Units at their
respective addresses, as set forth on Exhibit A to the Agreement.
b. 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. If the
Preferred Units are issued other than on a record date for the payment of
distributions to the holders of Preferred Units, the Quarterly Distribution
Amount shall, for any quarter in which the Distribution Rate changes on any
Reset Date, be appropriately prorated based on the portions of such quarter
during which the different Distribution Rates were in effect, on the basis of
twelve 30-day months and a 360-day year. 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.
c. 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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d. 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.
e. 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 the extent necessary to enable
them to receive a liquidation preference (the "Liquidation Preference") per
Preferred Unit equal to the sum of (i) $25 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 voluntary or involuntary 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 appropriate allocations of
Partnership income, gain, deduction and loss, 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
Partnership with one or more partnerships,
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corporations or other entities, or a sale or transfer of all or substantially
all of the Partnership's assets.
d. Upon any voluntary or involuntary 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 the
extent necessary 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
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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 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., Tower Two, 2000 South Colorado Boulevard, Suites 2-1000, 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"):
(1) 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.
(2) 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
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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.
(3) 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 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 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:
(1) 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.
(2) 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.
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(3) No Tendering Party may (a) effect a Redemption
more than once in any fiscal quarter of a Twelve-Month Period or (b) effect a
Redemption during the period after the Partnership Record Date with respect to a
distribution and before the record date established by the Previous General
Partner for a distribution to its shareholders of some or all of its portion of
such Partnership distribution.
(4) 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 the Primary
Offering Notice.
(5) 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.
(6) 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.
(7) 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:
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(1) 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;
(2) 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
(3) 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 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
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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 II 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 Three Partnership Preferred Units.
9. ALLOCATIONS OF INCOME AND LOSS.
Subject to the terms of Section 5 hereof, for each taxable year, (i)
each holder of Preferred Units will be allocated, to the extent possible, 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.
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,
for purposes of determining the Consent of Limited Partners under the Agreement,
the "Majority in Interest of the Limited Partners" shall have the meaning set
forth in Section 2 hereof. As long as my 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. With respect to the exercise of
the above described voting rights, each Preferred Unit will have one (1) vote
per Preferred Unit.
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11. RESTRICTIONS ON TRANSFER.
Preferred Units are subject to the same restrictions on transfer as
are, and the holders of Preferred Units shall be entitled to the same rights of
transfer as are, applicable to Common Units as set forth in the Agreement.
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ANNEX I
TO EXHIBIT U
NOTICE OF REDEMPTION
To: AIMCO Properties, L.P.
c/o AIMCO-GP, Inc.
Tower Two
2000 South Colorado Boulevard, Suite 2-1000
Denver, Colorado 80222
Attention: Investor Relations
The undersigned Limited Partner or Assignee hereby irrevocably
tenders for redemption Class Three 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 Three Partnership Preferred Units. The undersigned Limited Partner or
Assignee:
(a) if the Partnership elects to redeem such Class Three
Partnership Preferred Units for REIT Shares rather than cash, hereby
irrevocably transfers, assigns, contributes and sets over to Previous
General Partner all of the undersigned Limited Partner's or Assignee's
right, title and interest in and to such Class Three Partnership
Preferred Units;
(b) undertakes (i) to surrender such Class Three Partnership
Preferred Units and any certificate therefor at the closing of the
Redemption contemplated hereby and (ii) to furnish to 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
Redemp tion, 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
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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.
(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)
(continued on the next page)
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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 THREE
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.
U-17
<PAGE> 20
ANNEX II
TO EXHIBIT U
FORM OF UNIT CERTIFICATE
OF
CLASS THREE 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 SUPPLE-
MENTED 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 THREE 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 Three Partnership Preferred Units represented hereby
are issued and shall be held subject to all of the provisions of the 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
-------------------------------
U-18
<PAGE> 21
ASSIGNMENT
For Value Received, ________________________________ hereby sells,
assigns and transfers unto ______________________ Class Three 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 Three 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.
U-19
<PAGE> 1
EXHIBIT 10.11
TENTH AMENDMENT TO THE
THIRD AMENDED AND RESTATED AGREEMENT OF
LIMITED PARTNERSHIP OF AIMCO PROPERTIES, L.P.
This TENTH AMENDMENT TO THE THIRD AMENDED AND RESTATED AGREEMENT OF
LIMITED PARTNERSHIP OF AIMCO PROPERTIES, L.P., dated as of December 21, 1999
(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, 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
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 V," 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.
IN WITNESS WHEREOF, this Amendment has been executed as of the date
first written above.
THE GENERAL PARTNER:
AIMCO-GP, INC.
By: /s/ PETER KOMPANIEZ
--------------------------------
Name:
Title:
<PAGE> 2
EXHIBIT V
PARTNERSHIP UNIT DESIGNATION OF
THE CLASS FIVE 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
Five Partnership Preferred Units," and the number of Partnership Preferred Units
constituting such class shall be 150,000.
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 Class Five
Partnership 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.
"Class Five Partnership 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.
"Fair Market Value" shall mean, at any time and with respect to any
Class Five Partnership Preferred Units, the greater of (i) that portion of the
capital account balance of the holder of such Class Five Partnership Preferred
Units at that time attributable solely to such Class Five Partnership Preferred
Units, or (ii) zero.
Majority in Interest of the Limited Partners" means Limited Partners
(other than (i) the Special Limited Partner and (ii) any Limited Partner fifty
percent (50%) or more of whose equity is owned, directly or indirectly, by the
(a) General Partner or (b) any REIT as to which the General Partner is a
"qualified REIT subsidiary" (within the meaning of Code Section 856(i)(2)))
holding more than fifty percent (50%) of the outstanding Partnership Common
Units, Class I High Performance Partnership Units, Class Four Partnership
Preferred Units, Class Five Partnership Preferred Units, and all other
outstanding classes of Partnership Units held by all Limited Partners (other
than (i) the Special Limited Partner and (ii) any Limited Partner fifty percent
(50%) or more of whose equity is owned, directly or indirectly, by (a) the
General Partner or (b) any REIT as to which the General Partner is a "qualified
REIT subsidiary" (within the meaning of Code Section 856(i)(2))).
"Notice of Redemption" shall mean a Notice of Redemption in the form of
Annex I to this Partnership Unit Designation.
V-1
<PAGE> 3
"Partnership" shall mean AIMCO Properties, L.P., a Delaware limited
partnership.
"Transfer Agent" shall mean such transfer agent as may be designated by
the Partnership or its designee as the transfer agent for the Class Five
Partnership Preferred Units; provided, that if the Partnership has not
designated a transfer agent, then the Partnership shall act as the Transfer
Agent for the Class Five Partnership Preferred Units.
3. CASH DISTRIBUTIONS.
At any time that the Partnership pays cash distributions to
holders of Partnership Common Units, the Partnership shall pay cash
distributions to holders of the Class Five Partnership Preferred Units in an
amount per Class Five Partnership Preferred Unit equal to the per unit
distribution on the Partnership Common Units; provided, that distributions upon
liquidation of the Partnership shall be made in accordance with Section 13.2 of
the Agreement. Holders of Class Five Partnership Preferred Units will not be
entitled to receive any other distributions. If a record date is established by
the General Partner for the payment of distributions in respect of Partnership
Common Units, the same date shall be the record date for payment of
distributions in respect of the Class Five Partnership Preferred Units. With
respect to the first distribution paid to holders of Class Five Partnership
Preferred Units after the initial issuance thereof, such distribution shall be
pro rated based on the portion of the period in respect of which such
distribution is paid that such that such Class Five Partnership Preferred Units
were outstanding.
4. REDEMPTION.
(a) The Class Five Partnership Preferred Units may be redeemed
at the option of the Partnership at any time at a redemption price payable in
cash equal to the Fair Market Value of such Class Five Partnership Preferred
Units.
(b) The redemption date shall be selected by the Partnership,
shall be specified in a notice of redemption, and shall be not less than 5 days
nor more than 60 days after the date notice of redemption is sent by the
Partnership.
(c) If the Partnership shall redeem Class Five Partnership
Preferred Units, notice of such redemption shall be given to each holder of
record of the Class Five Partnership Preferred Units to be redeemed. Such notice
shall be provided by first class mail, postage prepaid, at such holder's address
as the same appears on the records of the Partnership. Neither the failure to
mail any notice required by this paragraph (c), nor any defect therein or in the
mailing thereof to any particular holder, shall affect the sufficiency of the
notice or the validity of the proceedings for redemption with respect to the
other holders. Any notice which has been mailed in the manner herein provided
shall be conclusively presumed to have been duly given on the date mailed
whether or not the holder receives the notice. Each such notice shall state, as
appropriate: (i) the redemption date; (ii) the place or places at which
certificates for such shares are to be surrendered for cash; and (iii) the
redemption price payable on such redemption date. Notice having been mailed as
aforesaid, from and after the redemption date (unless the Partnership shall fail
to make available the amount of cash necessary to effect such redemption), (i)
such Class Five Partnership Preferred Units shall no longer be deemed to be
outstanding, and (ii) all rights of the holders thereof as holders of Class Five
Partnership Preferred Units shall cease except the right to receive the cash
payable upon such redemption, without interest thereon, upon surrender of their
certificates if so required. As promptly as practicable after the surrender in
accordance with such notice of the certificates for any
V-2
<PAGE> 4
such Class Five Partnership Preferred Units to be so redeemed (properly endorsed
or assigned for transfer, if the Partnership shall so require and the notice
shall so state), such certificates shall be exchanged for cash (without interest
thereon) for which such shares have been redeemed in accordance with such
notice.
5. CONVERSION.
(a) Subject to and upon compliance with the provisions of this
Section 5, on or after December 21, 2000, a holder of Class Five Partnership
Preferred Units shall have the right, at such holder's option, to convert such
units, in whole or in part, into the number of Partnership Common Units obtained
by dividing (i) the Fair Market Value of the Class Five Partnership Preferred
Units converted, by (ii) the value of a REIT Share (assuming, for such purpose,
that the Valuation Date is the date of conversion of such units). In order to
exercise the conversion right, the holder of each Class Five Partnership
Preferred Unit to be converted shall surrender the certificate representing such
unit, duly endorsed or assigned to the Partnership or in blank at the office of
the Transfer Agent, accompanied by written notice to the Partnership that the
holder thereof elects to covert such Class Five Partnership Preferred Unit.
(b) (i) Unless the Partnership Common Units issuable on
conversion are to be issued in the same name as the name in which such Class
Five Partnership Preferred Units are registered, each such unit surrendered
following conversion shall be accompanied by instruments of transfer, in form
satisfactory to the Partnership, duly executed by the holder or such holder's
duly authorized representa tive, and an amount sufficient to pay any transfer or
similar tax (or evidence reasonably satisfactory to the Partnership
demonstrating that such taxes have been paid).
(ii) As promptly as practicable after the surrender
of certificates for Class Five Partnership Preferred Units as aforesaid, and in
any event no later than three business days after the date of such surrender,
the Partnership shall issue and deliver at such office to such holder, or send
on such holders' written order, a certificate or certificates for the number of
full Partnership Common Units issuable upon the conversion of such Class Five
Partnership Preferred Units in accordance with the provisions of this Section 5,
and any fractional interest in respect of a Partnership Common Unit arising upon
such conversion shall be settled as provided in paragraph (c) of this Section 5.
(iii) Each conversion shall be deemed to have been
effected immediately prior to the close of business on the date on which the
certificates for Class Five Partnership Preferred Units shall have been
surrendered to the Partnership for conversion as provided in paragraph (a) of
this Section 5; and the person or persons in whose name or names any certificate
or certificates for Partnership Common Units shall be issuable upon such
conversion shall be deemed to have become the holder or holders of record of the
units represented thereby at such time on such date unless the transfer books of
the Partnership shall be closed on that date, in which event such person or
persons shall be deemed to become such holder or holders of record at the close
of business on the next succeeding day on which such transfer books are open.
(c) No fractional Partnership Common Units or scrip
representing fractions of a Partnership Common Unit shall be issued upon
conversion of the Class Five Partnership Preferred Units. Instead of any
fractional interest in a Partnership Common Unit that would otherwise be
deliverable upon the conversion of Class Five Partnership Preferred Units, the
Partnership shall pay to the holder of such
V-3
<PAGE> 5
units an amount of cash equal to the Fair Market Value of such fractional
interest as of the date of conversion. If more than one of any holder's units
shall be converted at one time, the number of full Partnership Common Units
issuable upon conversion thereof shall be computed on the basis of the aggregate
number of Class Five Partnership Preferred Units so converted.
(d) If the Partnership shall be a party to any transaction
(including with limitation a merger, consolidation, statutory exchange, sale of
all or substantially all of the Partnership's assets or recapitalization of the
Partnership Common Units, but excluding any transaction as to which a change in
the Adjustment Factor would be effected) (each of the foregoing being referred
to herein as a "Transaction"), in each case, as a result of which Partnership
Common Units shall be converted into the right to receive securities or other
property (including cash or any combination thereof), each Class Five
Partnership Preferred Unit which is not converted into the right to receive
securities or other property in connection with such Transaction shall thereupon
be convertible into the kind and amount of securities and other property
(including cash or any combination thereof) receivable upon such consummation by
a holder of that number of Partnership Common Units into which a Class Five
Partnership Preferred Unit was convertible immediately prior to such
Transaction. The Partnership shall not be a party to any Transaction unless the
terms of such Transaction are consistent with the provisions of this paragraph
(d), and it shall not consent or agree to the occurrence of any Transaction
until the Partnership has entered into an agreement with the successor or
purchasing entity, as the case may be, for the benefit of the holders of the
Class Five Partnership Preferred Units that will contain provisions enabling the
holders of Class Five Partnership Preferred Units that remain outstanding after
such Transaction to convert into the consideration received by holders of
Partnership Common Units at the conversion price in effect immediately prior to
such Transaction. The provisions of this paragraph (d) shall apply to successive
Transactions.
(e) The Partnership will pay any and all documentary stamp or
similar issue or transfer taxes payable in respect of the issue or delivery of
Partnership Common Units or other securities or property on conversion of Class
Five Partnership Preferred Units pursuant hereto; provided, however, that the
Partnership shall not be required to pay any tax that may be payable in respect
of any transfer involved in the issue or delivery of Partnership Common Units or
other securities or property in a name other than that of the holder of the
Class Five Partnership Preferred Units to be converted, and no such issue or
delivery shall be made unless and until the person requesting such issue or
delivery has paid to the Partnership the amount of any such tax or established,
to the reasonable satisfaction of the Partnership, that such tax has been paid.
6. STATUS OF REACQUIRED UNITS.
All Class Five Partnership Preferred Units which shall have
been issued and reacquired in any manner by the Partnership shall be deemed
cancelled and no longer outstanding.
7. GENERAL.
The ownership of the Class Five Partnership Preferred Units
shall be evidenced by one or more certificates in the form of Annex II 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
Five Partnership Preferred Units.
V-4
<PAGE> 6
8. ALLOCATIONS OF INCOME AND LOSS; CAPITAL ACCOUNTS.
Upon initial issuance, the capital account balance
attributable to the Class Five Partnership Preferred Units shall be zero.
Thereafter, for each Fiscal Year, the Class Five Partnership Preferred Units
shall be allocated a portion of the Net Income and Net Loss of the Partnership
equal to the portion of the Net Income and Net Loss of the Partnership that
would be allocated to such Class Five Partnership Preferred Units pursuant to
Article 6 of the Agreement if the Class Five Partnership Preferred Units were
Partnership Common Units. In addition, (i) not more than 60 days prior to a
redemption of Class Five Partnership Preferred Units pursuant to Section 4
hereof and (ii) at any time after December 21, 2001, upon (x) a sale of
substantially all of the assets of the Partnership or a liquidation,
dissolution, or winding up of the Partnership or (y) in the event the Gross
Asset Value of any Partnership Asset is adjusted pursuant to subsection (b) or
(c) of the definition of "Gross Asset Value" in the Agreement, to the extent
possible, the Partnership shall first allocate Partnership gain (and, to the
extent necessary, gross income) among the Class Five Partnership Preferred Units
(the "Special Allocation") in an amount equal to that necessary to permit each
Class Five Partnership Preferred Unit to receive, upon a liquidation,
dissolution, or winding up of the Partnership pursuant to Section 13.2 of the
Agreement, an amount of assets of the Partnership equal to the amount of assets
that would be receivable with respect to a Partnership Common Unit, as
determined on a per unit basis. Notwithstanding the foregoing, the Class Five
Partnership Preferred Units shall not be entitled to receive, and shall not
receive, the Special Allocation unless and until the Class I High Performance
Partnership Units have been allocated the full amount of Partnership income and
gain required under Section 5 of the Partnership Unit Designation for the Class
I High Performance Partnership Units.
9. VOTING RIGHTS
Except as otherwise required by applicable law or in the
Agreement, the holders of the Class Five Partnership Preferred Units will have
the same voting rights as holders of the Partnership Common Units. As long as
any Class Five Partnership Preferred Units are outstanding, for purposes of
determining the Consent of Limited Partners under the Agreement, the "Majority
In Interest of the Limited Partners" shall have the meaning set forth in Section
2 hereof. As long as any Class Five Partnership 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 Class Five Partnership Preferred Units will be necessary for
effecting any amendment of any of the provisions of the Partnership Unit
Designation of the Class Five Partnership Preferred Units that materially and
adversely affects the rights or preferences of the holders of the Class Five
Partnership 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 Class Five
Partnership Preferred Units, will not be deemed to materially and adversely
affect the rights or preferences of the holders of the Class Five Partnership
Preferred Units. With respect to the exercise of the above-described voting
rights, each Class Five Partnership Preferred Unit will have one (1) vote per
Class Five Partnership Preferred Unit.
10. RESTRICTIONS ON TRANSFER.
Class Five Partnership Preferred Units are subject to the same
restrictions on transfer applicable to Partnership Common Units, as set forth in
the Agreement.
V-5
<PAGE> 7
ANNEX I
TO EXHIBIT V
FORM OF UNIT CERTIFICATE
OF
CLASS FIVE 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 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 FIVE 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 Five Partnership Preferred Units represented hereby
are issued and shall be held subject to all of the provisions of the 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:
-------- ------------------------------------
Name:
Title:
V-I-1
<PAGE> 8
ASSIGNMENT
For Value Received, ____________________________ hereby sells, assigns
and transfers unto _____________________________________________________________
______________________________________________ Class Five 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 Five 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.
V-I-2
<PAGE> 1
EXHIBIT 10.12
ELEVENTH AMENDMENT TO THE THIRD
AMENDED AND RESTATED AGREEMENT OF
LIMITED PARTNERSHIP OF AIMCO PROPERTIES, L.P.
This ELEVENTH AMENDMENT TO THE THIRD AMENDED AND RESTATED AGREEMENT OF
LIMITED PARTNERSHIP OF AIMCO PROPERTIES, L.P., dated as of January 13, 2000
(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 (the "Agreement"). Capitalized terms used, but not otherwise
defined herein, shall have the respective meanings ascribed thereto in the
Agreement.
WHEREAS, on January 11, 2000, the Previous General Partner filed
Articles Supplementary amending its Charter to reclassify 1,816,216 shares of
authorized but unissued shares of its Class A Common Stock, par value $.01 per
share, as shares of its Class M Convertible Cumulative Preferred Stock, par
value $.01 per share (the "Class M Preferred Stock");
WHEREAS, in accordance with Section 4.3.E of the Agreement, upon the
issuance of any such shares of Class M Preferred Stock, the Previous General
Partner will contribute the net cash proceeds from such issuance to the Special
Limited Partner, which will contribute such net cash proceeds to the Partnership
in exchange for a number of Partnership Preferred Units equal to the number of
shares of Class M Preferred Stock so issued, which Partnership Preferred Units
shall have designations, preferences and other rights, terms and provisions that
are substantially the same as the designations, preferences and other rights,
terms and provisions of the Class M Preferred Stock, except as otherwise set
forth herein; and
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 W," 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.
<PAGE> 2
IN WITNESS WHEREOF, this Amendment has been executed as of the date
first written above.
GENERAL PARTNER:
AIMCO-GP, INC.
By: /s/ PETER K. KOMPANIEZ
--------------------------------------
Name: Peter K. Kompaniez
Title: President and Vice Chairman
2
<PAGE> 3
EXHIBIT W
PARTNERSHIP UNIT DESIGNATION OF THE
CLASS M 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 M
Partnership Preferred Units," and the number of Partnership Preferred Units
constituting such class shall be 1,816,216.
2. DEFINITIONS.
For purposes of the Class M Partnership Preferred Units, the following
terms shall have the meanings indicated in this Section 2, and capitalized terms
used and not otherwise defined herein shall have the meanings assigned thereto
in the Agreement:
"Agreement" shall mean the Third Amended and Restated Agreement of
Limited Partnership of the Partnership, dated as of July 29, 1994, as
amended.
"Call Date" shall have the meaning set forth in paragraph (a) of
Section 5 of this Exhibit W.
"Class M Partnership Preferred Unit" means 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 Exhibit W. It is the intention of the General Partner that each
Class M Partnership Preferred Unit shall be substantially the economic
equivalent of one share of Class M Preferred Stock.
"Class M Preferred Stock" means the Class M Convertible Cumulative
Preferred Stock, par value $0.01 per share, of the Previous General
Partner.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, or any successor statute thereto. Reference to any
provision of the Code shall mean such provision as in effect from time
to time, as the same may be amended, and any successor thereto, as
interpreted by any applicable regulations or other administrative
pronouncements as in effect from time to time.
"Common Stock" shall mean the Class A Common Stock, $.01 par value per
share, of the Previous General Partner or such shares of the Previous
General Partner's capital stock into which outstanding shares of Common
Stock shall be reclassified.
W-1
<PAGE> 4
"Distribution Payment Date" shall mean any date on which cash dividends
are paid on all outstanding shares of the Class M Preferred Stock.
"Junior Partnership Units" shall have the meaning set forth in
paragraph (c) of Section 8 of this Exhibit W.
"Parity Partnership Units" shall have the meaning set forth in
paragraph (b) of Section 8 of this Exhibit W.
"Partnership" shall mean AIMCO Properties, L.P., a Delaware limited
partnership.
"Senior Partnership Units" shall have the meaning set forth in
paragraph (a) of Section 8 of this Exhibit W.
3. DISTRIBUTIONS.
On every Distribution Payment Date, the holders of Class M
Partnership Preferred Units shall be entitled to receive distributions payable
in cash in an amount per Class M Partnership Preferred Unit equal to the per
share dividend payable on the Class M Preferred Stock on such Distribution
Payment Date. Each such distribution shall be payable to the holders of record
of the Class M Partnership Preferred Units, as they appear on the records of the
Partnership at the close of business on the record date for the dividend payable
with respect to the Class M Preferred Stock on such Distribution Payment Date.
Holders of Class M Partnership Preferred Units shall not be entitled to any
distributions on the Class M Partnership Preferred Units, whether payable in
cash, property or stock, except as provided herein.
4. LIQUIDATION PREFERENCE.
(a) In the event of any liquidation, dissolution or winding up
of the Partnership, whether voluntary or involuntary, before any payment or
distribution of the Partnership (whether capital, surplus or otherwise) shall be
made to or set apart for the holders of Junior Partnership Units, the holders of
Class M Partnership Preferred Units shall be entitled to receive the greater of
(i) Twenty-Five Dollars ($25) per Class M Partnership Preferred Unit (the
"Liquidation Preference"), plus an amount per Class M Partnership Preferred Unit
equal to all dividends (whether or not declared or earned) accumulated, accrued
and unpaid on one share of Class M Preferred Stock to the date of final
distribution to such holders, or (ii) the amount that would be payable to the
holders of Partnership Common Units if they had converted all outstanding shares
of Class M Partnership Preferred Units into shares of Partnership Common Units
immediately prior to such liquidation, dissolution or winding up; but such
holders shall not be entitled to any further payment. Until the holders of the
Class M Partnership Preferred Units have been paid the Liquidation Preference in
full, plus an amount equal to all dividends (whether or not declared or earned)
accumulated, accrued and unpaid on the Class M Preferred Stock to the date of
final distribution to such holders, no payment shall be made to any holder of
Junior Partnership Units upon the liquidation, dissolution or winding
W-2
<PAGE> 5
up of the Partnership. If, upon any liquidation, dissolution or winding up of
the Partnership, the assets of the Partnership, or proceeds thereof,
distributable among the holders of Class M Partnership Preferred Units shall be
insufficient to pay in full the preferential amount aforesaid and liquidating
payments on any Parity Partnership Units, then such assets, or the proceeds
thereof, shall be distributed among the holders of Class M Partnership Preferred
Units and any such Parity Partnership Units ratably in the same proportion as
the respective amounts that would be payable on such Class M Partnership
Preferred Units and any such other Parity Partnership Units if all amounts
payable thereon were paid in full. For the purposes of this Section 4, (i) a
consolidation or merger of the Partnership with one or more partnerships, or
(ii) a sale or transfer of all or substantially all of the Partnership's assets
shall not be deemed to be a liquidation, dissolution or winding up, voluntary or
involuntary, of the Partnership.
(b) Upon any liquidation, dissolution or winding up of the
Partnership, after payment shall have been made in full to the holders of Class
M Partnership Preferred Units and any Parity Partnership Units, as provided in
this Section 4, any other series or class or classes of Junior Partnership Units
shall, subject to the respective terms thereof, be entitled to receive any and
all assets remaining to be paid or distributed, and the holders of the Class M
Partnership Preferred Units and any Parity Partnership Units shall not be
entitled to share therein.
5. REDEMPTION.
Class M Partnership Preferred Units shall be redeemable by the
Partnership as follows:
(a) At any time that the Previous General Partner exercises
its right to redeem all or any of the shares of Class M Preferred Stock, the
General Partner shall cause the Partnership to redeem an equal number of Class M
Partnership Preferred Units, at a redemption price per Class M Partnership
Preferred Unit equal to the same price paid by the Previous General Partner to
redeem the Class M Preferred Stock and such price shall be paid in the same
manner (including but not limited to, by means of issuance of long-term
indebtedness for purpose of such redemption) as paid by the Previous General
Partner for the Class M Preferred Stock redeemed (the "Call Date"), in the
manner set forth herein; provided, however, that in the event of a redemption of
Class M Partnership Preferred Units, if the Call Date occurs after a dividend
record date for the Class M Preferred Stock and on or prior to the related
Distribution Payment Date, the distribution payable on such Distribution Payment
Date in respect of such Class M Partnership Preferred Units called for
redemption shall be payable on such Distribution Payment Date to the holders of
record of such Class M Partnership Preferred Units on the applicable dividend
record date, and shall not be payable as part of the redemption price for such
Class M Partnership Preferred Units.
(b) If the Partnership shall redeem Class M Partnership
Preferred Units pursuant to paragraph (a) of this Section 5, from and after the
Call Date (unless the Partnership shall fail to make available the amount of
cash or other forms of consideration necessary to effect such redemption), (i)
except for payment of the redemption price, the Partnership shall not make any
further distributions on the Class M Partnership Preferred Units so called for
redemption, (ii) said
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<PAGE> 6
units shall no longer be deemed to be outstanding, and (iii) all rights of the
holders thereof as holders of Class M Partnership Preferred Units of the
Partnership shall cease except the rights to receive the cash payable upon such
redemption, without interest thereon; provided, however, that if a Call Date
occurs after a dividend record date for the Class M Preferred Stock and on or
prior to the related Distribution Payment Date, the full distribution payable on
such Distribution Payment Date in respect of such Class M Partnership Preferred
Units called for redemption shall be payable on such Distribution Payment Date
to the holders of record of such Class M Partnership Preferred Units on the
applicable dividend record date notwithstanding the prior redemption of such
Class M Partnership Preferred Units. No interest shall accrue for the benefit of
the holders of Class M Partnership Preferred Units to be redeemed on any cash
set aside by the Partnership.
6. STATUS OF REACQUIRED UNITS.
All Class M Partnership Preferred Units which shall have been issued
and reacquired in any manner by the Partnership shall be deemed cancelled.
7. CONVERSION.
Class M Partnership Preferred Units shall be convertible as follows:
(a) Upon any conversion of shares of Class M Preferred Stock
into shares of Common Stock, the General Partner shall cause a number of Class M
Partnership Preferred Units equal to the number of such converted shares of
Class M Preferred Stock to be converted by the holders thereof into Partnership
Common Units. The conversion ratio in effect from time to time for the
conversion of Class M Partnership Preferred Units into Partnership Common Units
pursuant to this Section 7 shall at all times be equal to, and shall be
automatically adjusted as necessary to reflect, the conversion ratio in effect
from time to time for the conversion of Class M Preferred Stock into Common
Stock.
(b) In the event of a conversion of any Class M Partnership
Preferred Units, the Partnership shall make a cash payment to the holder thereof
equal to the cash payment required to be made by the Previous General Partner to
the holder of the shares of Class M Preferred Stock the conversion of which
required the conversion of such Class M Partnership Preferred Units. Holders of
Class M Partnership Preferred Units at the close of business on a distribution
payment record date shall be entitled to receive the distribution payable on
such units on the corresponding Distribution Payment Date notwithstanding the
conversion thereof following such distribution payment record date and prior to
such Distribution Payment Date. Except as provided above, the Partnership shall
make no payment or allowance for unpaid distributions on converted units or for
distributions on the Partnership Common Units issued upon such conversion. Each
conversion of Class M Partnership Preferred Units into Partnership Common Units
shall be deemed to have been effected at the same time and date that the
corresponding conversion of Class M Preferred Stock into Common Stock is deemed
to have been effected.
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<PAGE> 7
(c) No fractional Partnership Common Units shall be issued
upon conversion of Class M Partnership Preferred Units. Instead of any
fractional Partnership Common Units that would otherwise be deliverable upon the
conversion of Class M Partnership Preferred Units, the Partnership shall pay to
the holder of such converted units an amount in cash equal to the cash payable
to a holder of an equivalent number of converted shares of Class M Preferred
Stock in lieu of fractional shares of Common Stock.
(d) The Partnership will pay any and all documentary stamp or
similar issue or transfer taxes payable in respect of (i) the issue or delivery
of Partnership Common Units or other securities or property on conversion or
redemption of Class M Partnership Preferred Units pursuant hereto, and (ii) the
issue or delivery of Common Stock or other securities or property on conversion
or redemption of Class M Preferred Stock pursuant to the terms hereof.
8. RANKING.
Any class or series of Partnership Units of the Partnership shall be
deemed to rank:
(a) prior or senior to the Class M 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 M Partnership Preferred Units ("Senior
Partnership Units");
(b) on a parity with the Class M Partnership Preferred Units,
as to the 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 M Partnership
Preferred Units if (i) 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 G Partnership Preferred Units, Class H
Partnership Preferred Units, Class I Partnership Preferred Units, Class J
Partnership Preferred Units, Class K Partnership Preferred Units, Class L
Partnership Preferred Units, Class One Partnership Preferred Units, or Class Two
Partnership Preferred Units or (ii) the holders of such class or series of
Partnership Units and the Class M 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 clauses (i) and (ii) of this paragraph being hereinafter
referred to, collectively, as "Parity Partnership Units"); and
(c) junior to the Class M Partnership Preferred Units, as to
the payment of distributions and as to the distribution of assets upon
liquidation, dissolution or winding up, if (i) such class or series of
Partnership Units shall be Partnership Common Units or Class I High Performance
Partnership Units or (ii) the holders of Class M Partnership Preferred Units
shall be
W-5
<PAGE> 8
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").
9. SPECIAL ALLOCATIONS.
(a) Gross income and, if necessary, gain shall be allocated to
the holders of Class M Partnership Preferred Units for any Fiscal Year (and, if
necessary, subsequent Fiscal Years) to the extent that the holders of Class M
Partnership Preferred Units receive a distribution on any Class M Partnership
Preferred Units (other than an amount included in any redemption pursuant to
Section 5 hereof) with respect to such Fiscal Year.
(b) If any Class M Partnership Preferred Units are redeemed
pursuant to Section 5 hereof, for the Fiscal Year that includes such redemption
(and, if necessary, for subsequent Fiscal Years) (a) gross income and gain (in
such relative proportions as the General Partner in its discretion shall
determine) shall be allocated to the holders of Class M Partnership Preferred
Units to the extent that the redemption amounts paid or payable with respect to
the Class M Partnership Preferred Units so redeemed exceeds the aggregate
Capital Contributions (net of liabilities assumed or taken subject to by the
Partnership) per Class M Partnership Preferred Unit allocable to the Class M
Partnership Preferred Units so redeemed and (b) deductions and losses (in such
relative proportions as the General Partner in its discretion shall determine)
shall be allocated to the holders of Class M Partnership Preferred Units to the
extent that the aggregate Capital Contributions (net of liabilities assumed or
taken subject to by the Partnership) per Class M Partnership Preferred Unit
allocable to the Class M Partnership Preferred Units so redeemed exceeds the
redemption amount paid or payable with respect to the Class M Partnership
Preferred Units so redeemed.
10. RESTRICTIONS ON OWNERSHIP.
The Class M Partnership Preferred Units shall be owned and held solely
by the General Partner or the Special Limited Partner.
11. GENERAL.
(a) The ownership of Class M Partnership Preferred Units may
(but need not, in the sole and absolute discretion of the General Partner) be
evidenced by one or more certificates. 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 conversion, redemption, or any other event
having an effect on the ownership of, Class M Partnership Preferred Units.
(b) The rights of the General Partner and the Special Limited
Partner, in their capacity as holders of the Class M Partnership Preferred
Units, are in addition to and not in limitation of any other rights or authority
of the General Partner or the Special Limited Partner,
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<PAGE> 9
respectively, in any other capacity under the Agreement or applicable law. In
addition, nothing contained herein shall be deemed to limit or otherwise
restrict the authority of the General Partner or the Special Limited Partner
under the Agreement, other than in their capacity as holders of the Class M
Partnership Preferred Units.
W-7
<PAGE> 1
EXHIBIT 21.1
List of Subsidiaries
1. 7400 Roosevelt Corp. (MA)
2. AG A&R Services, Inc. (DE)
3. AG Management Company (DE)
4. AG Properties, Inc. (DE)
5. AIMCO/Beacon Hill, Inc. (DE)
6. AIMCO/Blossomtree, Inc. (DE)
7. AIMCO/Brant Rock, Inc. (DE)
8. AIMCO Calhoun, Inc. (DE)
9. AIMCO/Colonnade, Inc. (DE)
10. AIMCO/Foothills, Inc. (DE)
11. AIMCO/Fox Bay, Inc. (DE)
12. AIMCO/Foxtree, Inc. (DE)
13. AIMCO/Freedom Place, Inc. (DE)
14. AIMCO/Grovetree, Inc. (DE)
15. AIMCO/Hazeltree, Inc. (DE)
16. AIMCO/Hiddentree, Inc. (DE)
17. AIMCO Holdings QRS, Inc. (DE - incorporated September 27, 1995)
18. AIMCO/IPT, Inc. (DE)
19. AIMCO/Islandtree, Inc. (DE)
20. AIMCO LJ Tucson, Inc. (DE)
21. AIMCO/Olmos, Inc. (DE)
22. AIMCO/Orchidtree, Inc. (DE)
<PAGE> 2
23. AIMCO/OTC QRS, Inc. (DE)
24. AIMCO/Pine Creek, Inc. (DE)
25. AIMCO/Polo Park, Inc. (DE)
26. AIMCO Properties Finance Corp. (DE - incorporated August 18, 1995)
27. AIMCO/Quailtree, Inc. (DE)
28. AIMCO/Rivercrest, Inc. (DE)
29. AIMCO/Sand Castles, Inc. (DE)
30. AIMCO/Sand Pebble, Inc. (DE)
31. AIMCO/Shadetree, Inc. (DE)
32. AIMCO/Shadow Lake, Inc. (DE)
33. AIMCO/Silktree, Inc. (DE)
34. AIMCO Somerset Inc. (DE)
35. AIMCO/Surrey Oaks, Inc. (DE)
36. AIMCO/Tall Timbers, Inc. (DE)
37. AIMCO/The Hills, Inc. (DE)
38. AIMCO/Timbertree, Inc. (DE)
39. AIMCO/Twinbridge, Inc. (DE)
40. AIMCO/Wickertree, Inc. (DE)
41. AIMCO/Wildflower, Inc. (DE)
42. AIMCO/Windsor Landing, Inc. (DE)
43. AIMCO/Woodhollow, Inc. (DE)
44. AIMCO/Wydewood, Inc. (DE)
45. AIMCO/Yorktree, Inc. (DE)
2
<PAGE> 3
46. AIMCO-GP, Inc. (DE)
47. AIMCO-LP, Inc. (DE)
48. A.J. One, Inc. (DE)
49. A.J. Two, Inc. (DE)
50. Ambassador I, Inc. (DE)
51. Ambassador II, Inc. (DE)
52. Ambassador IV, Inc. (DE)
53. Ambassador V, Inc. (DE)
54. Ambassador VI, Inc. (DE)
55. Ambassador VII, Inc. (DE)
56. Ambassador VIII, Inc. (DE)
57. Ambassador IX, Inc. (DE)
58. Ambassador X, Inc. (DE)
59. Ambassador XI, Inc. (DE)
60. Ambassador Florida Partners, Inc. (DE)
61. Ambassador Texas, Inc. (DE)
62. AmReal Corporation (SC)
63. AmReal Realty, Inc. (SC)
64. Angeles Acceptance Directives, Inc. (DE)
65. Angeles Acceptance Pool, L.P. (CA)
66. Angeles Investment Properties, Inc. (CA)
67. Angeles Properties, Inc. (CA)
68. Angeles Realty Corporation (CA)
3
<PAGE> 4
69. Angeles Realty Corporation II (CA)
70. Angeles Securitization Corporation (DE)
71. Brampton Corp. (CT)
72. Calmark/Fort Collins, Inc. (CA)
73. Capital Commercial, Inc. (MD)
74. Carriage AP X, Inc. (MI)
75. Casa del Mar, Inc. (FL)
76. CCP/III Village Greens GP, Inc. (SC)
77. CCP/IV Briar Bay GP, Inc. (SC)
78. Century Stoney Greens, Inc. (CA)
79. Colony of Springdale Properties, Inc. (TX)
80. ConCap CCP/IV River's Edge Properties, Inc. (TX)
81. ConCap CCP/IV Stratford Place Properties, Inc. (TX)
82. ConCap Equities, Inc. (DE)
83. ConCap Holdings, Inc. (TX)
84. Congress Realty Corp. (MA)
85. CPF 16 Landings GP, Inc. (SC)
86. CPF XIV/St. Charleston, Inc. (NV)
87. CPF XIV/Sun River, Inc. (AZ)
88. CPF XIV/Torrey Pines, Inc. (NV)
89. CPF XV/Lakeside Place, Inc. (TX)
90. Cragin Service Corporation (IL)
91. CRC Congress Realty Corp. (MA)
92. CRC Scotch Lane Corp. (MA)
4
<PAGE> 5
93. CRPTEX, Inc. (TX)
94. Davidson Diversified Properties, Inc. (TN)
95. Davidson Growth Plus GP Corporation (DE)
96. Davidson Properties, Inc. (TX)
97. East Windsor 255, Inc. (DE)
98. Fox Capital Management Corporation (CA)
99. Fox Strategic Housing Income Partners, Inc. (CA)
100. GP Services III, Inc. (DE)
101. GP Services IV, Inc. (SC)
102. GP Services IX, Inc. (SC)
103. GP Services V, Inc. (SC)
104. GP Services VI, Inc. (SC)
105. GP Services XI, Inc. (SC)
106. GP Services XIII, Inc. (SC)
107. GP Services XV, Inc. (SC)
108. GP Services XVIII, Inc. (SC)
109. Granada AIPL 6, Inc. (TX)
110. Hamilton House, Inc. (FL)
111. Heritage Park Investors, Inc. (CA)
112. Heritage Park/MRA, Inc. (CA)
113. Holbrook Enterprises, Inc. (IL)
114. HPI, Ltd. (Bermuda)
115. Hunters Run Properties Corporation (GA)
116. IAP GP Corporation (DE)
5
<PAGE> 6
117. IFT Financing I (DE)
118. IH Inc. (DE)
119. InCap Management, Inc. (TX)
120. Insignia Capital Corporation (DE)
121. IPGP, Inc. (DE)
122. Lakewood AOPL, Inc. (TX)
123. Lucerne Florida Development Corporation (FL)
124. MAE California, Inc. (DE)
125. MAE Delta, Inc. (DE)
126. MAE Investments, Inc. (DE)
127. MAE Ventures, Inc. (DE)
128. MAE-JMA, Inc. (DE)
129. MAERIL, Inc. (DE)
130. National Corporation for Housing Partnerships (DC)
131. National Corporation for Housing Partnerships/Development
Corporation (DC)
132. National Property Investors, Inc. (DE)
133. NCHP Development Corp.
134. Neighborhood Reinvestment Resources Corporation (IL)
135. NHP Acquisition Corporation (DE)
136. NHP Capital Corporation (VA)
137. NHP-HDV, Inc. (DE)
138. NHP-HDV Two, Inc. (DE)
139. NHP-HDV Four, Inc. (DE)
140. NHP-HDV Five, Inc. (DE)
6
<PAGE> 7
141. NHP-HDV Six, Inc. (DE)
142. NHP-HDV Seven, Inc. (DE)
143. NHP-HDV Eight, Inc. (DE)
144. NHP-HDV Nine, Inc. (DE)
145. NHP-HDV 21, Inc. (VA)
146. NHP-HG, Inc. (VA)
147. NHP-HG III, Inc. (VA)
148. NHP-HG Four, Inc. (VA)
149. NHP-HG Five, Inc. (VA)
150. NHP-HG Ten, Inc. (DE)
151. NHP-HG Eleven, Inc. (DE)
152. NHP-HG Twelve, Inc. (DE)
153. NHP-HG Fourteen, Inc. (DE)
154. NHP-HS, Inc. (DE)
155. NHP-HS Two, Inc. (DE)
156. NHP-HS Five, Inc. (DE)
157. NHP-HS Six, Inc. (DE)
158. NHP Joint Ventures, Inc. (DE)
159. NHP Multi-Family Capital Corporation (DC)
160. NHP Real Estate Corporation (DE)
161. NHP Real Estate Securities, Inc. (DC)
162. NHP Ridgewood, Inc. (DE)
163. NHP Servicing, Inc. (VA)
164. NPI Equity Investments II, Inc. (FL)
7
<PAGE> 8
165. NPI Equity Investments, Inc. (FL)
166. NPI III Pinetree, Inc. (NC)
167. Pebblepoint 55, Inc. (DE)
168. Plainview GP, Inc. (DE)
169. Pleasant Hill 287, Inc. (DE)
170. PRA, Inc. (GA)
171. Rescorp Development, Inc. (IL)
172. Ridge Carlton Corp. (MA)
173. SAHF Funding Corp. (DE)
174. Scotch Lane Corp. (MA)
175. SF General, Inc. (DE)
176. Shelter Realty Corporation (SC)
177. Shelter Realty II Corporation (SC)
178. Shelter Realty III Corporation (SC)
179. Shelter Realty IV Corporation (SC)
180. Shelter Realty V Corporation (SC)
181. Shelter Realty VI Corporation (SC)
182. Shelter Realty VII Corporation (SC)
183. Sturbrook Investors, Inc. (CA)
184. Summerwalk GP, Inc. (SC)
185. Tennessee Trust Company (TN)
186. Tenntruco, Inc. (NC)
187. Top of the World 735, Inc. (DE)
188. U.S. Realty I Corporation (SC)
8
<PAGE> 9
189. United Investors Real Estate, Inc. (DE)
190. Vista APX, Inc. (TX)
191. Wilbur and Company, Inc. (DE)
192. AIMCO/NHP Holdings, Inc. (DE)
193. AIMCO/NHP Properties, Inc. (DE)
194. NHP A&R Services, Inc. (VA)
195. NHP Management Company (DC)
196. Property Asset Management Services, Inc.
(DE - incorporated February 2, 1996)
197. 5 Mile Limited Partnership (MI)
198. 711 West Casino Associates (WA)
199. 735 Willoughby Avenue Company
200. AG A&R Services, L.L.C. (DE)
201. AG Management, L.L.C. (DE)
202. AG Properties, L.L.C. (DE)
203. AIMCO Equity Services, Inc. (VA)
204. AIMCO Colorado Residential Group, Inc. (CO)
205. AIMCO Residential Group of California, Inc. (DE)
206. AIMCO of Florida, Inc. (FL)
207. AIMCO Residential Group, L.P. (DE)
208. AIMCO Residential Group of Texas, Inc. (DE)
209. Alaska House Associates (WA)
210. Allegheny Associates
211. Allison Village Associates
212. Alms Hill II Limited
9
<PAGE> 10
213. Alpine Company Ltd.
214. Alpine II Company Ltd.
215. Anderson Oaks Limited Partnership (WA)
216. Apartment CCG 17, L.P. (CA)
217. Apartment CCG 17, L.L.C. (SC)
218. Apartment CCG 17, Inc. (CA)
219. Apartment Creek 17 A, L.L.C. (CO)
220. Apartment CRK 17, L.P.
221. Apartment LDG 17, Inc. (CA)
222. Apartment LDG 17, L.P. (CA)
223. Apartment Lodge 17, L.L.C. (SC)
224. Apartment Lodge 17 A, L.L.C. (CO)
225. Apartment Lodge 17, L.P. (CA)
226. Aptek Maintenance Services Company LLC (DE)
227. Aptek Management Company LLC (DE)
228. Arch-Way Ltd
229. Argus Land Company, Inc. (AL)
230. Arizona Development Partners (MA)
231. Aspen Ridge Properties, Inc. (TX)
232. Athens Gardens Ltd
233. Athens Station, Ltd
234. Atlanta Shallowford Associates, LP (GA)
235. Atrium Village Associates
236. Avon Development Company (PA)
10
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237. Banning Villa (CA)
238. Bannock Arms Apartments
239. Barnett Plaza Ltd
240. Bellerive Associates Limited
241. Bethlehem Development Company
242. Birchfield Associates
243. Blackhawk Hills Associates
244. Blanchard Apts
245. Bluefield Associates
246. Bluff Estate II
247. Bluff Estates Limited
248. Brentwood Manor, Ltd.
249. Briarwood Member, Inc. (DE)
250. Brighton Meadows Associates (IN)
251. Broad Street Management, Inc. (OH)
252. Broadleaf Manor Associates (NV)
253. Broadway Associates
254. Broadway Glenn Associates
255. Broadway Plaza Associates
256. Buckannon Manor Associates
257. Bulldogger Housing Associates, (OK)
258. Burnsville Apartments Limited Partnership (MN)
259. Calmark Heritage Park, L.P. (CA)
260. Calmark Heritage Park III, L.P. (CA)
11
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261. Canyon Terrace Inc. (DE)
262. Capital Heights Associates
263. Carolina Associates Limited
264. Carriage House Apartments Limited Partnership (VA)
265. Cascade Associates, Ltd
266. Cascadian Apartments (WA)
267. Catwil Liquidating Trust
268. Cayuga Village Associates (NY)
269. CCP/III Mountain Plaza Properties, Inc. (TX)
270. Central Park Towers
271. Central Park Towers II
272. Century 23 Sunnymead, Inc. (CA)
273. Century HillCreste Apartment Investors, L.P. (CA)
274. Century Summerhill, Inc. (CA)
275. Century Sunrunner 19, Inc. (CA)
276. CHA Properties, Inc. (DE)
277. Charney Associates Ltd Partnership(WA)
278. Childress Manor Associates
279. Cider Mills Associates
280. Clayton Associates Limited (WA)
281. Coastal Commons Limited Partnership (SC)
282. Colchester Stage II Company (MI)
283. Cold Harbor Limited Partnership
284. College Trace Apartments Ltd (FL)
12
<PAGE> 13
285. Colony House Apartments Ltd (CA)
286. Combined Properties Ltd
287. Commencement Terrace Associates (WA)
288. Compleat Resource Group, Inc. (DE)
289. ConCap CCP/III Properties, Inc. (TX)
290. ConCap CCP/IV Apartment Properties, Inc. (TX)
291. ConCap CCP/IV Citadel Properties, Inc. (TX)
292. ConCap CCP/IV Properties, Inc. (TX)
293. ConCap CCP/IV Residential, Inc. (TX)
294. ConCap CCP/V Properties, Inc. (TX)
295. ConCap MBRF Properties, Inc. (TX)
296. Conifer Bedford 116, A Limited Partnership
297. Conifer Medford (P.R.)
298. Conifer Wenatchee Apartments (WA)
299. Continental Apartments (MI)
300. Continental Plaza Limited Partnership (IL)
301. Continental Plaza Associates Limited Partnership (IL)
302. Coventry Properties, Inc. (TX)
303. Creekside Inc. (DE)
304. Creekside Investment Company (ID)
305. Crestview Apartments Company (WA)
306. Cumberland Apartments
307. Cypress Housing Associates Ltd (WA)
308. DalCap Management, Inc. (TX)
13
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309. Dallas Glen Oaks Associates, L.P.
310. Damen Court Associates
311. Daytona Village, Ltd (OH)
312. DBL Airport Valley, L.P.
313. DBL Properties Corporation (NY)
314. Decatur Arms, Limited Partnership (NV)
315. Deer Grove Associates
316. DEK Associates
317. Delta Associates, Ltd (WA)
318. Delta Park Investment Company (UT)
319. Deshler Apartment Associates (NY)
320. Dewitt Clinton Associates
321. Direct Access Association, Inc. (TN)
322. Dorchester Place Apartments
323. Drexel Burnham Lambert Real Estate Associates (NY)
324. Drexel Chandler Land Limited Partnership
325. Drexel Orlando Land Limited Partnership (FL)
326. Dunlop Tobacco Associates Limited Partnership (MD)
327. Eastgate Apartments (IA)
328. Eco Village, Ltd (OH)
329. Edgewood Apartments Associates
330. Edgewood Associates (WA)
331. Edgewood Housing Associates
332. Edgewood, Ltd. (AZ)
14
<PAGE> 15
333. Eighth Springhill Lake Limited Partnership (MD)
334. El Cazador Ltd.
335. El Coronado Apts, Ltd (TX)
336. Elkhart Town & Country Apartments Limited Partnership
337. Elms Common Associates (CT)
338. Everett Square Plaza
339. Evergreen Club Corporation (MA)
340. Evergreen Property Ltd
341. Fairwind Associates, Ltd
342. Fernwood Ltd.
343. First Atlantic Management Corporation (DE)
344. First Piedmont Mortgage, Inc. (SC)
345. First Winthrop Corporation (DE)
346. Fish Creek Plaza, Ltd (OH)
347. Five (5) Mile Ltd
348. Fleetwood Village Apartments
349. Forest Park South Ltd (FL)
350. Fort Vancouver Terrace (WA)
351. Fox Assignor, Inc. (CA)
352. Fox Run Associates Limited
353. Franklin Mountain Run Associates Liquidating Trust (PA)
354. Franklin Partnership Liquidating Trust (PA)
355. Franklin Woods Ltd (OH)
15
<PAGE> 16
356. Fremont Investment Company
357. G.V. II Limited Partnership
358. Galleria Park Associates Limited Partnership (MA)
359. Garden Court Associates (CA)
360. Glenbrook Corporation (MA)
361. Glenn Acres Associates
362. Goler Metropolitan Apartments (NC)
363. Goose Hollow Village Limited (OR)
364. Gotham Apartments, Ltd. (MO)
365. GP Real Estate Services II Inc. (DE)
366. GP Services II, Inc. (SC)
367. GP Real Estate Services II Inc. (DE)
368. GP Services II-B, Inc. (DE)
369. Grand Glaize Associates
370. Granite Properties Limited Partnership
371. Green Acres Apartments Limited
372. Green Village Associates
373. Greenbriar Manor, Ltd. (TX)
374. Greene Valley Associates
375. Greenfair Tower II (CA) I
376. Greenfair-ABC California Corporation (CA)
377. Greenfair-DCW Ltd (CA)
378. Greenfair-Tower II Cal Ltd
16
<PAGE> 17
379. Greensburg Associates, Ltd
380. Greenwood Acres
381. Greenwood Villa Apts Ltd
382. Guilford Company, Inc. (AL)
383. Hamlet Manor Limited Partnership
384. Hamlet Manor, Ltd.
385. Hampton Hills Associates
386. Harlan Associates Limited
387. Harold Apartment (Aprs) Associates
388. Hawthorne Plaza Associates
389. Haynes House Associates
390. Heritage Park Inc. (DE)
391. Heritage Park II Inc. (DE)
392. HHP, L.P. (DE)
393. Hi View Gardens Development Company
394. Hibben Ferry Recreation Inc. (SC)
395. HillCreste Properties Inc. (DE)
396. Hilltop Apartments Phase I (MO)
397. Hilltop Apartments Phase II (MO)
398. Hinton House Associates
399. Historic Properties, Inc. (DE)
400. Holiday Acres Apts
401. Holiday Acres Associates
402. Holliday Associates Limited Partnership (DC)
17
<PAGE> 18
403. Hollidaysburg Limited Partnership (PA)
404. Holly Point Associates
405. Housing Programs Corp. II (DE)
406. Housing Programs Ltd. (CA)
407. Hugo Plaza Apartments Ltd.
408. Hyde Park Apts. (Apartments Limited)
409. IFG-SCN Corporation (DE)
410. IHMG of Alabama, Inc. (AL)
411. IMH, Inc. (DE)
412. Indian River Associates
413. Insignia Allegiance Management, Inc. (DE)
414. Insignia CCP III Acquisition, LLC (DE)
415. Insignia Hospitality Management Group, Inc. (DE)
416. Insignia Related, Inc. (DE)
417. Insignia Related, L.P. (DE)
418. Insignia Residential Group of Alabama, Inc. (DE)
419. Insignia Residential Management, Inc. (DE)
420. International House Ltd (NC)
421. IPT I LLC (DE)
422. Ironman Housing Association (OK)
423. ISPMC, Inc. (DE)
424. ISTC Corporation (DE)
425. Ivanhoe Corporation (MA)
426. Jardines De Mayaguez Associates
18
<PAGE> 19
427. Jenny Lind Hall
428. Kennedy Boulevard I, Inc. (PA)
429. Kennedy Boulevard II, Inc. (PA)
430. Kennedy Boulevard III, Inc. (PA)
431. Kenosha Gardens Associates (WI)
432. Kenton Development Company
433. Kenton Village Associates
434. Kenton Village Ltd (OH)
435. Kenyon House Co (WA)
436. Kings Row Associates (CT)
437. Kingston Greene Associates Ltd (OH)
438. Kohler Gardens Apartments (CA)
439. Kona Plus Associates (Limited) (WA)
440. L.M. Associates
441. Lafayette Terrace Associates
442. Lake June Village II Ltd (TX)
443. Lake June Village Ltd (TX)
444. Lake Towers Associates
445. Lakehurst Apts I
446. Lakehurst II Ltd.
447. Landmark Apts (Apartment) Associates (IL)
448. Leeco Co
449. Lemay Village Ltd (MO)
450. Lifton/MAQ S.E. Investments II, Inc. (GA)
19
<PAGE> 20
451. Lincoln Village Oregon, Ltd
452. Linnaeus Hawthorne Associates
453. Linnaeus Lexington Associates
454. Lone Star Properties Limited (TX)
455. Long Beach/Wilmington Associates (WA)
456. Louisville Apartment Limited Partnership (TX)
457. Lytle Place Community Urban Redevelopment Corp. (OH)
458. Madison Park III Associates (MA)
459. Madison Park Properties Ltd (WA)
460. Madison Terrace Associates
461. MAE-SPI, L.P. (DE)
462. Maine Maintenance Corporation (DE)
463. Mallards of Wedgewood Limited (WA)
464. Mandarin Trace Apts Ltd (FL)
465. Manor Green Ltd (WA)
466. MAQ/Lifton Acquisition Corp. (FL)
467. Marcella Manor Associates
468. Marinette Woods (Apartment) Apt Associates
469. Market Ventures, L.L.C. (DE)
470. Mayer Canyon Terrace (CA)
471. Mayer Creekside (CA)
472. Mayer Warner Center Ltd. (CA)
473. Meadow Lane LP (MI)
20
<PAGE> 21
474. MHO Partners Ltd (FL)
475. Midpark Development Company (OH)
476. Midtown Plaza Associates (WA)
477. Minneapolis Associates II Limited Partnership (MA)
478. Minneapolis Associates Limited Partnership
479. Morningside Housing Phase B (NY)
480. Mount Pleasant Associates Limited Partnership
481. New Wesley Highland Towers
482. Newark Ohio Townehouses Ltd
483. NHP Asset Management Services, Inc. (VA)
484. NHP Cash Management Services, Inc. (VA)
485. NHP/Congress Management Limited Partnership (VA)
486. NHP Financial Services, Ltd. (DE)
487. NHP Florida Management Company (FL)
488. NHP Maintenance Services Company (VA)
489. NHP/PRC Management Company LLC (DE)
490. NHP Puerto Rico Management Company (DE)
491. NHP Southeast Partners, L.P. (DE)
492. NHP Southwark HA, Inc. (VA)
493. NHP Texas Management Company (TX)
494. NHP-HDV 20, Inc. (VA)
495. NHP-HDV Eighteen, Inc. (DE)
496. NHP-HDV Eleven, Inc. (DE)
497. NHP-HDV Fifteen, Inc. (VA)
21
<PAGE> 22
498. NHP-HDV Fourteen, Inc. (DE)
499. NHP-HDV Nineteen, Inc. (DE)
500. NHP-HDV Seventeen, Inc. (DE)
501. NHP-HDV Sixteen, Inc. (DE)
502. NHP-HDV Ten, Inc. (DE)
503. NHP-HDV Three, Inc. (DE)
504. NHP-HDV Twelve, Inc. (DE)
505. NHP-HG 15, Inc. (VA)
506. NHP-HG 16, Inc. (VA)
507. NHP-HG 17, Inc. (VA)
508. NHP-HG Six, Inc. (VA)
509. NHP-HS Four, Inc. (DE)
510. NHP-HS Three, Inc. (DE)
511. Nichols Townehomes Ltd (OH)
512. Normandy Group, Ltd. (IL)
513. North Omaha Homes (NE)
514. North Park Associates (TX)
515. North Washington Park Estates
516. Northern States Properties Ltd (WA)
517. Northwest Village Ltd.
518. Northwind Forest Ltd (MI)
519. Nova Associates Limited (WA)
520. NPI Property Management Corporation (FL)
521. NPI Realty Advisors, Inc. (FL)
22
<PAGE> 23
522. NPI Realty Management Corp. (FL)
523. O'Dea Investment Company (CA)
524. Oak Knoll (Apartments) Apts Ltd
525. Oak Woods Associates
526. One Linwood Associates Ltd. (DC)
527. Orchard Park Apartments, L.P. (SC)
528. Oxford Holding Corporation
529. Oxford Realty Finance Group, Inc.
530. P&R Investment Services
531. Pacific Coast Plaza (CA)
532. Palace Apartments (NV)
533. Palisades Apartments LTD (FL)
534. PAM Consolidated Assurance Company, Ltd. (Bermuda)
535. Park Manor, Oregon, Ltd.
536. Park Towne Place Associates Limited Partnership (DE)
537. Parkview Associates (GA)
538. Parkview Development Co. (MN)
539. Partners of the National Housing Partnership - II Liquidating Trust
540. Penview Associates (NY)
541. Phillips Village Associates (CA)
542. Pine Haven Apartments, Ltd (MI)
543. Pine Tree Apartments, Ltd. (FL)
544. Pinetree Associates (__)
545. Pinewood Ltd.
23
<PAGE> 24
546. Piney Branch Associates (MD)
547. Plains Village Ltd. (TX)
548. Playa Blanca Inc. (DE)
549. Playa Blanca, Inc. CA)
550. Pleasanton Greens Investment Co.
551. Plumly Townhomes Ltd
552. Point Village Associates
553. Portage Associates Limited Partnership (MI)
554. Prairie Village Associates
555. Preferred Home Health, Inc. (FL)
556. Preferred Home Health Limited Partnership (FL)
557. Preston Drive Ltd Partnership
558. Property Asset Brokerage of Florida (FL)
559. Property Services Group, Inc. (DC)
560. PTP Properties, Inc. (DE)
561. Pullman Wheelworks Assoc I
562. Queensgate II Associates (OH)
563. Quincy Manor Associates (WA)
564. Raintree GP Inc. (DE)
565. Raintree Meadows (CA)
566. Ravensworth Associates (MA)
567. Real Estate Equity Partners, Inc. (DE)
568. Real Estate Equity Partners, L.P.
569. RealMark, Inc. (SC)
24
<PAGE> 25
570. Rescorp Realty, Inc. (IL)
571. Residents Direct Access Association, Inc. (MO)
572. RH Associates
573. Richton Park Investment (WA)
574. Richton Square Elderly, Ltd.
575. Richton Square, Phase IV, Ltd.
576. River Crossing Apartments, Ltd.
577. River Oaks Associates
578. Rivercrest Apartments, L.P. (SC)
579. Riverfront Associates Ltd
580. Rochester Avenue Associates
581. Rockledge Associates
582. Rockville Associates, Ltd.
583. Rowland Heights Apartments
584. Rowland Heights II Ltd (CA)
585. Rowland Heights Liquidating Trust
586. Royal De Leon Apartments, Ltd. (FL)
587. Royal Shore Associates
588. Running Brooke II Associates
589. The Risk Specialist Group, Inc. (DC)
590. Sagewood Manor Associates ((NV)
591. Saginaw Village Oregon, Ltd. (OR)
592. Salem Manor Oregon Ltd (OR)
25
<PAGE> 26
593. Scott Manor Apartments
594. Seattle Rochester Avenue Associates (NY)
595. Second Springhill Lake Limited Partnership(MD)
596. Secured Income, L.P. (DE)
597. Security House, Ltd. (WA)
598. Security Management Inc. (WA)
599. Security Properties (WA general partnership)
600. Security Properties 73 (WA general partnership)
601. Security Properties 74 (WA general partnership)
602. Security Properties 74 II (WA general partnership)
603. Security Properties 74 III (WA general partnership)
604. Security Properties 74A (WA general partnership)
605. Security Properties 75 (WA general partnership)
606. Security Properties 76 (WA general partnership)
607. Security Properties 77 (WA general partnership)
608. Security Properties 77A (WA general partnership)
609. Security Properties 78 (WA general partnership)
610. Security Properties 78A (WA general partnership)
611. Security Properties 79 (WA general partnership)
612. Security Properties 79 II (WA general partnership)
613. Security Properties 80 (WA general partnership)
614. Security Properties 81 (WA general partnership)
615. Security Properties 81A (WA general partnership)
26
<PAGE> 27
616. Security Properties FHA (WA)
617. Shadowood Apartments
618. Silverwood Village Apartments
619. Six Winthrop Properties, Inc. (DE)
620. Smith House Associates (MD)
621. South Arsenal Neighborhood Associates (CT)
622. South Shore Village Leased
623. Southside Village Apts. Liquidating Trust
624. Southwest Parkway Holdings, Inc. (WA)
625. Southwest Parkway, Ltd. (TX)
626. SP Bolingbrook Associates (WA)
627. SP Buckeye Properties (WA)
628. SP Columbia Limited (CT)
629. SP Diversified 1980 (WA)
630. SP Diversified Properties -I (WA)
631. SP/Hotel Associates, Ltd. (WA)
632. SP Illinois Partnership Ltd. (WA)
633. SP Jayhawk Properties (WA)
634. SP Mid Term Income Fund, Ltd. (WA)
635. SP Pine Hills Properties (WA)
636. SP Properties 1982 (WA general partnership)
637. SP Properties 1983 (WA general partnership)
638. SP Properties 1983 Two (WA general partnership)
27
<PAGE> 28
639. SP Properties 1984 (WA general partnership)
640. SP Properties I
641. SPI Hartford Associates (WA)
642. SPI Willoughby Avenue (WA)
643. Springdale West (CA)
644. Springdale West II California Ltd (CA)
645. Spruce Hill Apartments, Ltd.
646. St. Joseph Limited Partnership (MD)
647. Standpoint Vista Limited Partnership (MD)
648. Steeplechase (Ailken) Ltd. (SC)
649. Stewartown Associates Ltd. (MD)
650. Stonegate Park Apartments, Ltd
651. Stuyvesant Limited Dividend (MI)
652. Summit Square Associates (PA)
653. Sun Terrace Associates (PA)
654. Suncrest Village (IA)
655. Sunrise Gardens (CA)
656. Sunset Capital Apartments Liquidating Trust
657. Sunset Silver Bow Apts
658. Sunset Village Apartments Ltd
659. Swan Creek Associates Liquidating Trust
660. Table Mesa Joint Venture
661. TAHF Funding Corp. (DE)
28
<PAGE> 29
662. Tanara Villa Associates I Liquidating Trust
663. Tandem Properties
664. TEB Municipal Trust II (DE)
665. Ten Winthrop Properties, Inc. (MD)
666. TERRA II Ltd. (PA)
667. Terrace Investors Ltd.
668. The Advance Fund, Ltd. (WA)
669. The New Fairways, L.P. (DE)
670. The Tinley Company
671. The Villa Limited Partnership
672. The Villas, A Limited Partnership (TX)
673. The Woods Associates
674. Three Fountains Limited (MI)
675. Three Winthrop Properties, L.P.
676. Tower of David
677. Town & Country Club Apartments LP
678. Town One, Phase I
679. Town One, Phase II (SD)
680. Trail Ridge Apartments, Ltd.
681. Treeline Associates
682. Tri-State Ltd
683. Uptown Village Ltd (OH)
684. Urbana Village (OH)
685. USS Depositary, Inc. (SC)
29
<PAGE> 30
686. Valley Associates
687. Victoria Arms Apts (MO)
688. Victorian Associates Limited
689. Villa Del Norte Associates (TX)
690. Villa Del Norte II Associates (TX)
691. Village East Towers Limited (MO)
692. Village South Associates (TX)
693. Vincennes Associates (IL)
694. Virginia Apartments Limited
695. Vivendas Associates
696. W.T. Limited Partnership
697. WAI Associates Limited Partnership (TX)
698. WAI Properties, Inc. (TX)
699. Walden Member, Inc. (DE)
700. Walnut Towers Development Liquidating Trust
701. Walton-Perry Ltd. (MI)
702. Warden Associates, A Limited Partnership
703. Warner Center Inc. (DE)
704. Warner Center/MGP Inc. (DE)
705. Warwick Terrace Company Liquidating Trust
706. Washington Plaza, Oreg., Ltd. (OR)
707. Watergate II Apartments Ltd.
708. Watergate II Associates
709. Waterman Crossing Associates, L.P.
30
<PAGE> 31
710. Wedgewood Club Estates Limited (WA)
711. Wedgewood Golf Associates
712. Wesley Madison Towers Ltd.
713. West Alameda Apartments (OR)
714. West Virginian Manor Associates
715. Western Hills, Assoc. LLC
716. Westgate (Spartanburg) Ltd (SC)
717. Westgate Apartments
718. Westlake Terrace Associates
719. Westminster Commons Associates (VA)
720. Westminster Properties Ltd.
721. Westview-Youngstown Ltd (OH)
722. Westwick Apartments, Ltd.
723. Westwick II Ltd.
724. Westwood Terrace Associates
725. WFC Realty Co., Inc. (MA)
726. WFC Realty Saugus, Inc. (MA)
727. Wilder Richman Historic Properties II, L.P. (DE)
728. Wilder Richman Historic Properties, L.P. (DE)
729. Willow Park Associates, L.P.)
730. Willows Associates Limited
731. Windgate Member, Inc. (DE)
732. Win-Wood Village, Ltd.
31
<PAGE> 32
733. Winding Brook Associates
734. Winhaven Associates
735. Winslowe Apts Ltd.
736. Winthrop Apartment Investors 2 Limited Partnership (MD)
737. Winthrop Financial Associates (MD)
738. Winthrop Financial Co., Inc. (MA)
739. Winthrop Metro Equities Corporation (DE)
740. Winthrop Northeast Properties, Inc. (MA)
741. Winthrop Petersburg Co., Inc. (MD)
742. Winthrop Properties, L.P.
743. WoodCrest Apartments, Ltd.
744. Woodfield Member, Inc. (DE)
745. Woodlake Associates, a Limited Partnership
746. Woodsong I
747. Woodsong II
748. Woodsong Limited Partnership
749. Woodsvilla Associates (WA)
750. WRC -87A Corp.
32
<PAGE> 33
751. Creekside Industrial Associates, Inc. (NY)
752. Monroeville Development Corporation (MA)
753. ISLP Limited Partnership (DE)
754. Partners Liquidating Trust (DE)
755. Stratford Village Realty Trust (MA)
756. 51 North High Street L.P.
757. 62nd Street Joint Venture
758. 62nd Street Ltd Partnership (IN)
759. 107-145 West 135th Street Associates Ltd Partnership (NY)
760. 630 East Lincoln Avenue Associates Ltd Partnership (NY)
761. 1133 Fifteenth Street Fourth Associates (MD)
762. 1133 Fifteenth Street Associates (DC)
763. 2900 Van Ness Associates (DC)
764. 7400 Roosevelt Investors (PA)
765. 8503 Westheimer Partners, Ltd.
766. Abbott Associates Ltd Partnership (NY)
767. Academy Gardens Associates LP (NY)
768. Adirondack Apartments Saranac Associates LP (NY)
769. Advanced Affordable Mill, Ltd. (FL)
770. AG Services, L.P. (DE)
771. AIMCO Anchorage, L.P. (DE)
772. AIMCO Arbors, L.L.C. (DE)
773. AIMCO Arbor Station, L.P. (DE)
774. AIMCO Arbor Station Two, L.P. (DE)
33
<PAGE> 34
775. AIMCO Atriums of Plantation L.P. (DE)
776. AIMCO Bay Club II, L.P. (DE)
777. AIMCO Bay Club, L.P. (DE)
778. AIMCO/Beacon Hill, L.L.C. (DE)
779. AIMCO/Beacon Hill, L.P. (DE)
780. AIMCO Beau Jardin, L.L.C. (DE)
781. AIMCO Beech Lake, L.L.C. (DE)
782. AIMCO Bella Vista, L.L.C. (DE)
783. AIMCO/Blossomtree L.L.C. (DE)
784. AIMCO/Blossomtree L.P. (DE)
785. AIMCO/Bluffs, L.L.C. (DE)
786. AIMCO/Boardwalk, L.P. (DE - formed on November 20, 1995)
787. AIMCO/Boardwalk Finance, L.P. (DE - formed on December 6, 1995)
788. AIMCO Bradford, L.L.C. (DE)
789. AIMCO/Brandywine, L.P. (DE)
790. AIMCO/Brant Rock, L.L.C. (DE)
791. AIMCO/Brant Rock, L.P. (DE)
792. AIMCO Breakers, L.P. (DE)
793. AIMCO Briarwood, L.L.C. (DE)
794. AIMCO Bridgewater, L.P. (DE)
795. AIMCO Brookside, L.L.C. (DE)
796. AIMCO Brookside/Tustin, L.L.C. (DE)
797. AIMCO Brookville, L.L.C. (DE)
34
<PAGE> 35
798. AIMCO Brookwood, L.L.C. (DE)
799. AIMCO Burgundy Park, L.P. (DE)
800. AIMCO Calhoun, L.L.C. (DE)
801. AIMCO Cameron Villas, L.L.C. (DE)
802. AIMCO Canterbury Green, L.L.C. (DE)
803. AIMCO Captiva Club, L.L.C. (DE)
804. AIMCO Casa Anita, L.P. (DE)
805. AIMCO Cedar Creek, L.P. (DE)
806. AIMCO Chatham Harbor, L.L.C. (DE)
807. AIMCO Chesapeake, L.P. (DE)
808. AIMCO Citrus Grove, L.P. (DE)
809. AIMCO Citrus Sunset, L.L.C. (DE)
810. AIMCO Cobble Creek, L.P. (DE)
811. AIMCO Colonial Crest, L.L.C. (DE)
812. AIMCO/Colonnade, L.L.C. (DE)
813. AIMCO/Colonnade, L.P. (DE)
814. AIMCO Colony, L.P. (DE)
815. AIMCO Copperfield, L.P. (DE)
816. AIMCO Crossings at Belle, L.P. (DE)
817. AIMCO Crows Nest, L.P. (DE)
818. AIMCO Dolphin's Landing, L.P. (DE)
819. AIMCO/Easton Falls, L.P. (DE)
820. AIMCO Elm Creek, L.P. (DE)
821. AIMCO Fieldcrest, L.P. (DE)
35
<PAGE> 36
822. AIMCO Fisherman's Landing, L.P. (DE)
823. AIMCO Fondren Court, L.P. (DE)
824. AIMCO/Foothills, L.P. (DE)
825. AIMCO/Foothills, L.L.C. (DE)
826. AIMCO/Fox Bay, L.P. (DE)
827. AIMCO/Fox Bay, L.L.C. (DE)
828. AIMCO Foxchase, L.P. (DE)
829. AIMCO/Foxtree, L.L.C. (DE)
830. AIMCO/Foxtree, L.P. (DE)
831. AIMCO/Freedom Place, L.L.C. (DE)
832. AIMCO/Freedom Place, L.P. (DE)
833. AIMCO Galleria Office, L.P. (DE)
834. AIMCO Glen Hollow, L.L.C. (DE)
835. AIMCO Group, L.P. (DE)
836. AIMCO/Grovetree, L.L.C. (DE)
837. AIMCO/Grovetree, L.P. (DE)
838. AIMCO Hampton Hill, L.P. (DE)
839. AIMCO Hanover Square/DIP, L.L.C. (DE)
840. AIMCO Hastings Green, L.P. (DE)
841. AIMCO Hastings Place, L.P. (DE)
842. AIMCO Haverhill, L.L.C. (DE)
843. AIMCO/Hazeltree, L.P. (DE)
844. AIMCO/Hazeltree, L.L.C. (DE)
845. AIMCO/Hiddentree, L.L.C. (DE)
36
<PAGE> 37
846. AIMCO/Hiddentree, L.P. (DE)
847. AIMCO/HIL, L.L.C. (DE)
848. AIMCO Holdings, L.P. (DE - formed September 29, 1995)
849. AIMCO Hunters Creek, L.L.C. (DE)
850. AIMCO Hunters Crossing, L.P. (DE)
851. AIMCO Hunters Glen, L.P. (DE)
852. AIMCO/Islandtree, L.P. (DE)
853. AIMCO/Islandtree, L.L.C. (DE)
854. AIMCO Key Towers, L.P. (DE)
855. AIMCO Lake Castleton Arms, L.L.C. (DE)
856. AIMCO Lakehaven, L.P. (DE)
857. AIMCO Lakehaven Two, L.P. (DE)
858. AIMCO Landmark, L.P. (DE)
859. AIMCO LaValle, L.L.C. (DE)
860. AIMCO LJ Tucson, L.P. (DE)
861. AIMCO Los Arboles, L.P. (DE)
862. AIMCO LT, L.P. (DE)
863. AIMCO Maple Bay, L.L.C. (DE)
864. AIMCO Marbella Club, L.L.C. (DE)
865. AIMCO Mayfair Village, L.L.C. (DE)
866. AIMCO Merrill House, L.L.C. (DE)
867. AIMCO Michigan Meadows, L.L.C. (DE)
868. AIMCO Michigan Meadows Holdings, L.L.C. (DE)
869. AIMCO/Montecito, L.P. (DE)
37
<PAGE> 38
870. AIMCO Mountain View, L.L.C. (DE)
871. AIMCO Northview Harbor, L.L.C. (DE)
872. AIMCO/NHP Partners, L.P. (DE)
873. AIMCO Oakbrook, L.L.C. (DE)
874. AIMCO Oak Falls, L.P. (DE)
875. AIMCO Ocean Oaks, L.L.C. (DE)
876. AIMCO Old Farm, L.L.C. (DE)
877. AIMCO Old Orchard, L.L.C. (DE)
878. AIMCO/Olmos, L.L.C. (DE)
879. AIMCO/Olmos, L.P. (DE)
880. AIMCO/Orchidtree, L.L.C. (DE)
881. AIMCO/Orchidtree, L.P. (DE)
882. AIMCO/OTC, L.L.C. (DE)
883. AIMCO/OTC, L.P. (DE - formed February 15, 1996)
884. AIMCO/PAM Properties, L.P. (DE)
885. AIMCO Park at Cedar Lawn, L.P. (DE)
886. AIMCO Park Colony, L.L.C. (DE)
887. AIMCO Park Townhomes, L.P. (DE)
888. AIMCO Parker House, L.P. (DE)
889. AIMCO Pavilion, G.P., L.L.C. (DE)
890. AIMCO Pavilion, L.P., L.L.C. (DE)
891. AIMCO/Penn Square, L.L.C. (DE)
892. AIMCO Peppermill Place, L.P. (DE)
893. AIMCO/Pine Creek, L.P. (DE)
38
<PAGE> 39
894. AIMCO/Pine Creek, L.L.C. (DE)
895. AIMCO Pine Shadows, L.L.C. (DE)
896. AIMCO Pinebrook, L.P. (DE)
897. AIMCO Pines, L.P. (DE)
898. AIMCO Placid Lake, L.P. (DE)
899. AIMCO/Polo Park, L.L.C. (DE)
900. AIMCO/Polo Park, L.P. (DE)
901. AIMCO Properties, L.P. (DE) (As of 6-13-97)
902. AIMCO Properties Finance Partnership, L.P.
(DE - formed August 30, 1995)
903. AIMCO Properties Holdings, L.L.C. (DE)
904. AIMCO/Quailtree, L.L.C. (DE)
905. AIMCO/Quailtree, L.P. (DE)
906. AIMCO/RALS, L.P. (DE - formed December 19, 1995)
907. AIMCO Ramblewood, L.L.C. (DE)
908. AIMCO Recovery Fund, L.P. (DE)
909. AIMCO Rio Cancion, L.P. (DE)
910. AIMCO/Rivercrest, L.P. (DE)
911. AIMCO/Rivercrest, L.L.C. (DE)
912. AIMCO Rosecroft Mews, L.P. (DE)
913. AIMCO Royal Gardens, L.L.C. (DE)
914. AIMCO/SA, L.L.C. (DE)
915. AIMCO San Marina, L.P. (DE)
916. AIMCO/Sand Castles, L.P. (DE)
917. AIMCO/Sand Pebble, L.L.C. (DE)
39
<PAGE> 40
918. AIMCO/Sand Pebble, L.P. (DE)
919. AIMCO/Sand Castles, L.L.C. (DE)
920. AIMCO Sandalwood, L.P. (DE)
921. AIMCO Sandpiper, L.P. (DE)
922. AIMCO Seaside Point, L.P. (DE)
923. AIMCO/Shadetree, L.P. (DE)
924. AIMCO/Shadetree, L.L.C. (DE)
925. AIMCO/Shadow Lake, L.P. (DE)
926. AIMCO/Shadow Lake, L.L.C. (DE)
927. AIMCO Signature Point, L.P. (DE)
928. AIMCO/Silktree, L.P. (DE)
929. AIMCO/Silktree, L.L.C. (DE)
930. AIMCO Silver Ridge, L.L.C. (DE)
931. AIMCO Somerset Lakes, L.L.C. (DE)
932. AIMCO Steeplechase, L.L.C. (DE)
933. AIMCO Steeplechase, L.P. (DE)
934. AIMCO Stirling Court, L.P. (DE)
935. AIMCO/Stonegate, L.P. (DE)
936. AIMCO Stone Pointe, L.L.C. (DE)
937. AIMCO Sunbury, L.P. (DE)
938. AIMCO Sundown, L.P. (DE)
939. AIMCO Sunset Village, L.L.C. (DE)
940. AIMCO Sunset Escondido, L.L.C. (DE)
40
<PAGE> 41
941. AIMCO/Surrey Oaks, L.L.C. (DE)
942. AIMCO/Surrey Oaks, L.P. (DE)
943. AIMCO/Tall Timbers, L.P. (DE)
944. AIMCO/Tall Timbers, L.L.C. (DE)
945. AIMCO/Teal Pointe, L.P. (DE - formed December 19, 1995)
946. AIMCO Terrace Royale, L.L.C. (DE)
947. AIMCO/The Hills, L.P. (DE)
948. AIMCO/The Hills, L.L.C. (DE)
949. AIMCO Timbermill, L.P. (DE)
950. AIMCO/Timbertree, L.P. (DE)
951. AIMCO/Timbertree, L.L.C. (DE)
952. AIMCO Tor, L.L.C. (DE)
953. AIMCO Township at Highlands, L.P. (DE)
954. AIMCO Tustin, L.P. (DE)
955. AIMCO/Twinbridge, L.P. (DE)
956. AIMCO/Twinbridge, L.L.C. (DE)
957. AIMCO UT, L.P. (DE)
958. AIMCO Villa Del Sol, L.L.C. (DE)
959. AIMCO/Villa Ladera, L.P. (DE - formed November 20, 1995)
960. AIMCO Villa La Paz, L.P. (DE)
961. AIMCO Village Crossing, L.L.C. (DE)
962. AIMCO Walden, L.L.C. (DE)
963. AIMCO Walnut Springs, L.P. (DE)
964. AIMCO Weatherly, L.P. (DE)
41
<PAGE> 42
965. AIMCO West Trails, L.P. (DE)
966. AIMCO Westchase Midrise, L.P. (DE)
967. AIMCO Whispering Pines, L.L.C. (DE)
968. AIMCO/Wickertree, L.P. (DE)
969. AIMCO/Wickertree, L.L.C. (DE)
970. AIMCO/Wildflower, L.P. (DE)
971. AIMCO/Wildflower, L.L.C. (DE)
972. AIMCO Williamsburg, L.L.C. (DE)
973. AIMCO/Williams Cove, L.P. (DE)
974. AIMCO Wimbledon Square, L.L.C. (DE)
975. AIMCO Windgate, L.L.C. (DE)
976. AIMCO/Windsor Landing, L.L.C. (DE)
977. AIMCO/Windsor Landing, L.P. (DE)
978. AIMCO Woodfield, L.L.C. (DE)
979. AIMCO/Woodhollow, L.P. (DE)
980. AIMCO/Woodhollow, L.L.C. (DE)
981. AIMCO Woodlands, L.L.C. (DE)
982. AIMCO/Woodlands-Tyler, L.P. (DE)
983. AIMCO Woods of Burnsville, L.L.C. (DE)
984. AIMCO Woodway Offices, L.P. (DE)
985. AIMCO/Wydewood, L.P. (DE)
986. AIMCO/Wydewood, L.L.C. (DE)
987. AIMCO/Yorktree, L.L.C. (DE)
42
<PAGE> 43
988. AIMCO/Yorktree, L.P. (DE)
989. AIP 6 GP, L.P. (SC)
990. AIP II Georgetown GP, L.L.C. (SC)
991. AIP II Georgetown, L.L.C. (MA)
992. AIP III GP Limited Partnership (SC)
993. AIP IV GP Limited Partnership (SC)
994. AIP IV Factory GP, LLC (SC)
995. AIP IV GP Limited Partnership (SC)
996. AIV Properties, L.P. (DE)
997. AJ One, L.P. (DE)
998. AJ Two, L.P. (DE)
999. Algonquin Tower Ltd Partnership (CT)
1000. All Hallows Associates (DC)
1001. Allentown Towne House Ltd Partnership (PA)
1002. Ambassador Apartments, L.P. (DE)
1003. Ambassador CRM Florida Partners Limited Partnership (DE)
1004. Ambassador Florida Partners Limited Partnership (DE)
1005. Ambassador I, L.P. (IL)
1006. Ambassador II, L.P. (DE)
1007. Ambassador III, L.P. (DE)
1008. Ambassador IV, L.P. (DE)
1009. Ambassador IX, L.P. (DE)
1010. Ambassador Texas Partners, L.P. (DE)
1011. Ambassador V, L.P. (DE)
43
<PAGE> 44
1012. Ambassador VI, L.P. (DE)
1013. Ambassador VII, L.P. (DE)
1014. Ambassador VIII, L.P. (DE)
1015. Ambassador X, L.P. (DE)
1016. Ambassador XI, L.P. (DE)
1017. Anchorage Partners (TX)
1018. Anderson Mill Associates (IL)
1019. Anderson Mill Associates (IL)
1020. Angeles Eastgate Joint Venture (CA)
1021. Angeles Income Properties II GP LP
1022. Angeles Income Properties, Ltd. II (CA)
1023. Angeles Income Properties, Ltd. III (CA)
1024. Angeles Income Properties Ltd. IV (CA)
1025. Angeles Income Properties Ltd. V (CA)
1026. Angeles Income Properties IV GP LP
1027. Angeles Income Properties, Ltd. 6 (CA)
1028. Angeles Income Properties Ltd 6 GP LP
1029. Angeles Opportunity Properties, Ltd. (CA)
1030. Angeles Opportunity Properties Ltd GP LP
1031. Angeles Park Communities GP LP (SC)
1032. Angeles Park Communities, Ltd. (CA)
1033. Angeles Partners VII (CA)
1034. Angeles Partners VIII (CA)
44
<PAGE> 45
1035. Angeles Partners IX (CA)
1036. Angeles Partners X (CA)
1037. Angeles Partners X GP Limited Partnership
1038. Angeles Partners XI (CA)
1039. Angeles Partners XI GP Limited Partnership (SC)
1040. Angeles Partners XII (CA)
1041. Angeles Partners XIV (CA)
1042. Angeles Partners XV (CA)
1043. Angeles Partners XII GP LP
1044. Angeles Partners 16 (CA)
1045. Antioch Apartments Ltd.
1046. Anton Square Ltd.
1047. AP XI Fox Run GP, LLC
1048. AP XII Associates GP, L.L.C. (SC)
1049. AP XII Associates Limited Partnership
1050. AP XII GP, LP
1051. Apartment Associates, Ltd.
1052. Apartment LDG 17, LLC
1053. API/AREC Partners, Ltd. (CA)
1054. ARC II/AREMCO Partners
1055. Arvada House Ltd Partnership
1056. Ashland Town Square-REO, L.P. (TX)
1057. Ashley Woods LLC
1058. Aspen Point, L.P. (DE)
45
<PAGE> 46
1059. Aspen Ridge Associates, Ltd.
1060. Aspen Stratford Apartments Company B
1061. Aspen Stratford Apartments Company C Limited Partnership
1062. Athens Arms Associates
1063. Audobon Park Associates
1064. Aurora/GHI Associates
1065. Autumn Chase-REO, L.P. (TX)
1066. Baisley Park Associates LP
1067. Balcor/Sportvest-II (IL)
1068. Baldwin Towers Associates
1069. Baldwin Oaks Elderly Ltd.
1070. Barrington Park-REO, L.P. (TX)
1071. Basswood Manor Ltd Partnership
1072. Bayview Hunters Point Apartments
1073. Baywood Partners. Ltd
1074. Baywood Apts. Ltd
1075. Beautiful Village Associates LP Redevelopment Company
1076. Beaux Gardens Associates, LTD.
1077. Ellmire LP
1078. Benjamin Banneker Plaza Associates
1079. Bennington Square Associates, L.P.
1080. Bensalem Gardens Associates Ltd.
1081. Bensalem Gardens Associates Ltd Partnership
46
<PAGE> 47
1082. Benton Square Partnership
1083. Berkley Ltd Partnership
1084. Beverly Apartments Assoc., LP
1085. Bexley House GP, L.L.C. (SC)
1086. Bexley House, LP (DE)
1087. Big Walnut, L.P. (DE)
1088. Biscayne Apartments Associates, Ltd.
1089. Blakewood Properties Assoc.
1090. Blakewood Apartments Associates
1091. Bloomsburg Elderly Associates
1092. Boca West Shopping Center Associates, Ltd. (FL)
1093. Boynton Sandpiper Limited Partnership (FL)
1094. Braesview Partnership (TX)
1095. Brampton Associates Limited Partnership (CT)
1096. Branchwood Towers Ltd Partnership
1097. Brandemere-REO Assoc., L.P. (TX)
1098. Brandon Lake, Ltd. (FL)
1099. Briar Bay Apartments Associates, Ltd.
1100. Briarwood Apartments
1101. Bridgewater Partners, Ltd. (TX)
1102. Brighton Crest LP
1103. Brighton GP, L.L.C.
1104. Brightwood Ltd Partnership
1105. Brightwood Manor Associates
47
<PAGE> 48
1106. Brinton Towers Associates
1107. Brinton Manor No. 1 Associates
1108. Brittany Point AP VIII LP (SC)
1109. Brittany Point GP Limited Partnership (SC)
1110. Broad River Properties, L.L.C. (DE)
1111. Broadmoor Apt. Assoc.
1112. Brook Run Associates, L. P. (IL)
1113. Brookdale Lakes Partnership (IL)
1114. Brookside Apartments Associates
1115. Brookview Apartments Co Ltd
1116. Brunswick Village Limited Partnership
1117. Buccaneer Trace, Limited Partnership (SC)
1118. Buckingham Hall Associates Ltd Partnership
1119. Buena Vista Apartments Ltd.
1120. Buena Vista Rehabilitation Associates, LTD.
1121. Buffalo Village Associates
1122. Burgundy Court Associates, L.P. (DE)
1123. Burnt Oaks Ltd
1124. Cabell Associates of Lakeview (VA)
1125. California Square Ltd Partnership
1126. California Square II Ltd Partnership
1127. Calmark/Fort Collins, Ltd.
1128. Calmark Investors, a California Limited Partnership
48
<PAGE> 49
1129. Calmark MRA Limited Partnership
1130. Calmark Heritage Park II, Limited Partnership
1131. Calvert City LP
1132. Calverton Construction Co. Limited Partnership (MD)
1133. Calverton Associates Limited Partnership
1134. Cambridge Heights Apartments Ltd
1135. Campbell Heights Associates Ltd Partnership
1136. Canterbury Gardens Associates Ltd Partnership
1137. Canterbury Services, LLC (DE)
1138. Cape Cod Partnership (TX)
1139. Capital Park Limited Partnership
1140. Cardinal Woods Apts. Ltd (CA)
1141. Caroline Associates I Ltd Partnership
1142. Caroline Arms Limited Partnership
1143. Carriage AP X Ltd
1144. Carter Associates Ltd Partnership
1145. Casa del Mar Associates Limited Partnership (FL)
1146. Castle Rock Joint Venture (TX)
1147. Catawba Club Associates, L.P. (DE)
1148. CB L-2 B Associates (FL general partnership)
1149. CB Associates (FL general partnership)
1150. CB L-2 C Associates (FL general partnership)
1151. CC Office Associates
1152. CCP V/Aspen Ridge GP, LLC (SC)
49
<PAGE> 50
1153. CCP VI Springdale GP, LLC (SC)
1154. CCP V GP Limited Partnership (SC)
1155. CCP/IV Nob Hill GP, LLC
1156. CCP V Fifty-One GP LLC (SC)
1157. CCP/IV Residential GP, LLC (SC)
1158. CCP/IV Apartments GP, LLC
1159. CCP V Sutton Place GP LLC (SC)
1160. CCP/IV Citadel GP, LLC
1161. CCP/IV Associates Ltd.
1162. Cedar Creek Partners, Ltd.
1163. Cedar Creek Partners, Ltd. (AL)
1164. Cedar Tree, L.L.C.
1165. Cedar Tree Investors, Limited Partnership (KS)
1166. Center Square Associates
1167. Centinella GP LP (SC)
1168. Central Woodlawn LP
1169. Central Woodlawn Rehabilitation Joint Venture
1170. Central Village Associates Ltd Partnership
1171. Central Court LP
1172. Century St. Charleston, L.P. (NV)
1173. Century Stoney Greens, L.P. (CA)
1174. Century Sun River, L.P. (AZ)
1175. Century Properties Fund XI (CA)
50
<PAGE> 51
1176. Century Properties Growth Fund XXII (CA)
1177. Century Torrey Pines, L.P. (NV)
1178. Century Pension Income Fund XXIII, A California Limited Partnership
1179. Century Pension Income Fund XXIV, A California Limited Partnership
1180. Century Lakeside Place, L.P.
1181. Century Properties Fund XX (CA)
1182. Century Properties Fund XIX (CA)
1183. Century 23 Sunnymead, L.P. (CA)
1184. Century Properties Fund XVI (CA)
1185. Century Properties Fund XIV (CA)
1186. Century Properties Fund XVII (CA)
1187. Century Properties Fund XVIII (CA)
1188. Century Properties Fund XV (CA)
1189. Chapel Housing Ltd Partnership
1190. Chapel Hill, Limited (DE)
1191. Chateau Gardens L.P. (CA)
1192. Cheek Road Ltd Partnership
1193. Chelsea Place, Limited (TN)
1194. Chesterfield Housing Associates
1195. Chestnut Hill Associates Limited Partnership (DE)
1196. Cheyenne Woods LLC
1197. Cheyenne Woods United Investors LP
1198. Cheyenne Woods GP LP
1199. Cheyenne Village Apartments Ltd Partnership
51
<PAGE> 52
1200. Chimney Ridge, LP
1201. Christopher Court Housing Company Ltd Partnership
1202. Church Street Associates (IL)
1203. Churchview Gardens Ltd Partnership
1204. Citrus Park Associates Ltd
1205. Civic Tower Associates, LTD.
1206. Clay Courts Associates Ltd Partnership
1207. Clear Lake Land Partners, Ltd. (TX)
1208. Clinton Manor, L.P.
1209. Clover Ridge East Ltd Partnership
1210. Cloverleaf Farms Limited Partnership (SC)
1211. Club Apartments Associates
1212. Cobble Creek, LLC
1213. College Park Associates
1214. College Heights Ltd Partnership
1215. College Park Associates Ltd Partnership
1216. Colonial Terrace I Associates
1217. Colonial Terrace II Associates
1218. Colony of Springdale Associates, Ltd.
1219. Colony Apartments Company Ltd
1220. Colony-REO, L.P. (TX)
1221. Columbus Court LP
1222. Columbus Square Associates I Ltd Partnership
52
<PAGE> 53
1223. Columbus Associates, Ltd. (TN)
1224. Columbus Square Associates II Ltd Partnership
1225. Community Developers Of High Point Limited Partnership (NC)
1226. Community Circle II Ltd
1227. Community Developers Of Princeville Ltd Partnership
1228. ConCap Metro Centre Associates, Ltd.
1229. ConCap Village Green Associates, Ltd.
1230. ConCap River's Edge Associates, Ltd.
1231. ConCap Citadel Associates, Ltd.
1232. ConCap Stratford Place Associates, Ltd.
1233. Concord Houses Associates
1234. Congress Park Associates Ltd Partnership
1235. Congress Park Associates II Ltd Partnership
1236. Congress Realty Companies Limited Partnership (MA)
1237. Congress Management Company Limited Partnership (MA)
1238. Connecticut Colony Associates (GA)
1239. Consolidated Capital Institutional Properties/3 (CA)
1240. Consolidated Capital Equity Partners / Two, L.P. (CA)
1241. Consolidated Capital Properties III (CA)
1242. Consolidated Capital Equity Partners, L.P. (CA)
1243. Consolidated Capital Properties IV (CA)
1244. Consolidated Capital Properties V (CA)
1245. Consolidated Capital Growth Fund (CA)
1246. Consolidated Capital Institutional Properties (CA)
53
<PAGE> 54
1247. Consolidated Capital Institutional Properties/2 (CA)
1248. Consolidated Capital Properties VI (CA)
1249. Cooper River Properties, L.L.C. (CA)
1250. Cooper's Pointe CPGF 22, LP
1251. Copper Chase Partners (IL)
1252. Copper Mill CPGF 22, LP
1253. Copper Chase Associates (IL)
1254. Copperfield Partners, Ltd. (TX)
1255. Copperwood II Ltd Partnership
1256. Copperwood Ltd Partnership
1257. Coral Palm Plaza Joint Venture
1258. Corinth Square Assocs.
1259. Cottonwood Apartments
1260. Country Lake Associates Two Limited Partnership (IL)
1261. Country Villa Associates
1262. Countrybrook Associates
1263. Court Street Plaza Ltd
1264. Coventry Square Partners (TX)
1265. Covington Pike Associates
1266. CPF Misty Woods GP, L.L.C.
1267. CPF 16 Woods of Inverness, LLC
1268. CPF 16 Woods of Inverness GP, L.L.C. (SC)
1269. CPGF 22 Hampton Greens, L.L.C.
54
<PAGE> 55
1270. CPGF 22 Hampton Greens GP, L.L.C.
1271. CPGF 22 Cooper's Pointe GP, L.L.C. (SC)
1272. CPGF 22 Copper Mill GP, L.L.C.
1273. CPGF 22 Four Winds GP, L.L.C.
1274. CPGF 22 Wood Creek GP, L.L.C.
1275. CPGF 22 Plantation Creek GP, L.L.C.
1276. CPGF 22 Stoney Creek GP, L.L.C.
1277. CRA Investors, Ltd. (TX)
1278. Creekside Industrial Associates (CA general partnership)
1279. Creekside Partners (NY general partnership)
1280. Crosland Housing Associates
1281. Cross Creek Limited Partnership (GA)
1282. Crows Nest Partners, Ltd. (TX)
1283. Cumberland Court Associates
1284. Cutler Canal Associates, Ltd.
1285. Cutler Canal II Associates, Ltd.
1286. Cutler Canal III Associates, Ltd.
1287. Cypress Landing Associates (IL)
1288. Cypress Landing Limited Partnership (IL)
1289. Daniel Lake Apts. Ltd
1290. Darby Townhouses Associates
1291. Darbytown Development Associates LP (VA)
1292. Davidson Income GP Limited Partnership (DE)
1293. Davidson IRE Assocs. LP
55
<PAGE> 56
1294. Davidson GP, L.L.C. (SC)
1295. Davidson Diversified Real Estate I, L.P. (DE)
1296. Davidson Diversified Real Estate II, L.P. (DE)
1297. Davidson Diversified Real Estate Investors III GP, L.P. (DE)
1298. Davidson Diversified Real Estate Investors III, L.P. (DE)
1299. Davidson IRE GP LP
1300. Davidson Growth Plus, L.P. (DE)
1301. Davidson Income Real Estate, L.P. (DE)
1302. Dawson Springs Ltd.
1303. Decatur Meadows Housing Partners Ltd
1304. Deerfield Apartments, L.L.C.
1305. Deerfield Beach Associates, LTD.
1306. Delcar-S Ltd
1307. Delcar T Ltd Partnership
1308. Desoto Estates, LP
1309. DFW Apartment Investors Limited Partnership (DE)
1310. DFW Residential Investors Limited Partnership (DE)
1311. DGP, GP, L.P.
1312. Diakonia Associates
1313. Dip Limited Partnership
1314. Dip Limited Partnership II
1315. Dip Limited Partnership III
1316. Discovery Limited Partnership (MA)
56
<PAGE> 57
1317. Diversified Equities, L.P.
1318. Dixie Apartments Associates, LTD.
1319. Downing Apartments
1320. Drexel Burnham Lambert Real Estate Associates II (NY)
1321. Drexel Burnham Lambert Real Estate Associates III (NY)
1322. Druid Hills Apartments, LP
1323. Duke Manor Associates
1324. Duquesne Associates No. 1
1325. Eagle's Nest Partnership (TX)
1326. East Hampton Ltd Partnership
1327. East Windsor 255 Limited Partnership [(DE)]
1328. Eastcourt Village Partners
1329. Eastgreen, Ltd. (TN)
1330. Easton Terrace II Associates Ltd Partnership (DE)
1331. Easton Terrace I Associates Ltd Partnership
1332. Eastridge Apartments
1333. Edgewood II Associates (GA)
1334. Edmond Estates Limited Partnership (AL)
1335. Elden Limited Partnership
1336. Elderly Housing Associates Limited Partnership (MD)
1337. Elm Creek Limited Partnership (IL)
1338. Emory Grove Limited Partnership
1339. English Manor Joint Venture (TX)
1340. English Manor Partners (TX)
57
<PAGE> 58
1341. Esbro Limited Partnership
1342. Eustis Apartments Ltd
1343. Everest Investors 5, L.L.C. (CA)
1344. Evergreen Club Limited Partnership (MA)
1345. Factory Merchants AIP IV LP
1346. Fairburn & Gordon Associates Phase II
1347. Fairburn & Gordon Associates Phase I
1348. Fairfax Associates (VA)
1349. Fairmeadows Limited Partnership
1350. Fairmont #2 Ltd Partnership
1351. Fairmont #1 Ltd Partnership
1352. Fairview Homes Associates
1353. Fairview Gardens LP
1354. Fairwood Associates
1355. Federal Square Village Ltd Partnership
1356. Fernando Associates, LTD.
1357. Ferncliff Limited Partnership
1358. Field Associates
1359. Fifth Springhill Lake Limited Partnership
1360. Fifty-One North High Street LP
1361. First Springhill Lake Limited Partnership
1362. First Alexandria Associates (VA)
1363. Fisherman's Wharf Partners (TX)
58
<PAGE> 59
1364. Fisherman's Landing Apartments Limited Partnership (FL)
1365. Flatbush Nsa Associates Ltd Partnership
1366. FMI Limited Partnership (PA)
1367. Fondren Court Partners, Ltd. (TX)
1368. Foothill Chimney Assocs. LP
1369. Forest Apartments Associates
1370. Forest Green Limited Partnership
1371. Forrester Gardens Ltd
1372. Forst Park Elderly Associates Ltd Partnership
1373. Fort Collins Co. Ltd
1374. Fort Carson Associates Ltd Partnership
1375. Four Winds CPGF 22, LP
1376. Four Quarters Habitat Apts. Assocs.
1377. Fox Growth Partners (CA) - Active
1378. Fourth Springhill Lake Limited Partnership
1379. Fox Partners VIII (CA general partnership)
1380. Fox Partners IX (CA general partnership)
1381. Fox Partners V (CA general partnership)
1382. Fox Partners VI (CA general partnership)
1383. Fox Realty Partners '77, Ltd. (CA) - Active
1384. Fox Run AP XI LP
1385. Fox Run AP XI GP, LP
1386. Fox Partners VII (CA general partnership)
1387. Fox Partners IX (CA General Partnership)
59
<PAGE> 60
1388. Fox Partners IV (CA general partnership)
1389. Fox Partners III (CA general partnership)
1390. Fox Partners II (CA general partnership)
1391. Fox Partners (CA general partnership)
1392. Fox Strategic Housing Income Partners (CA)
1393. Foxfire Apts. V LP
1394. Foxfire Associates, a South Carolina Limited Partnership (SC)
1395. Foxwood II-REO, L.P.
1396. Franklin Park Ltd Partnership (PA)
1397. Franklin Chandler Associates (PA)
1398. Franklin Chapel Hill Associates (PA)
1399. Franklin Eagle Rock Associates (PA)
1400. Franklin Housing Associates [(PA)]
1401. Franklin Huntsville Associates (PA)
1402. Franklin New York Avenue Associates [(PA)]
1403. Franklin Woods Associates (PA)
1404. Franklin Pheasant Ridge Associates (PA)
1405. Franklin Pine Ridge Associates (PA)
1406. Franklin Ridgewood Associates (PA)
1407. Franklin Square School Associates Ltd Partnership (PA)
1408. Franklin Victoria Associates I (TX)
1409. Freeman Equities, L.P.
1410. Friendset Housing Co Ltd Partnership
60
<PAGE> 61
1411. Friendship Court, LP
1412. Frio Housing Ltd Partnership
1413. FRP Limited Partnership (PA)
1414. G.P. Municipal Holdings, LLC (DE)
1415. Galion Limited Partnership
1416. Galleria Office Partners, Ltd. (TX)
1417. Garfield Hills Associates (DC)
1418. Gate Manor Apartments Ltd
1419. Gates Mills I Limited Partnership
1420. Gateway Village Associates
1421. Genesee Gardens Associates Ltd Partnership
1422. Georgetown of Columbus Associates, L.P. (DE)
1423. Georgetown AIP II, Ltd. (MA)
1424. GHI II Big River Associates
1425. GHI Associates
1426. Gladys Hampton Homes Associates Ltd Partnership
1427. Glenbrook Limited Partnership (MA)
1428. Glendale Terrace LP
1429. Golden Apartments II
1430. Golden Apartments I
1431. Governor's Park Apt. VII LP
1432. Governors Associates, L.P.
1433. GP Services XIX, Inc. (SC)
1434. GP Services XVII, Inc. (SC)
61
<PAGE> 62
1435. Granada AIP 6 Ltd
1436. Grandland Realty Associates (GA)
1437. Grandview Apartments
1438. Great Southwest GP, L.L.C (SC)
1439. Great Southwest Industrial, L.P. (SC)
1440. Greater Richmond Community Development Corp. #2 & Associates
1441. Greater Mount Calvary Terrace, Ltd. (GA)
1442. Greater Hartford Associates (CT)
1443. Greater Richmond Community Development Corp. #1 & Associates
1444. Green Mountain Manor Ltd Partnership
1445. Greenfield Apartments Ltd Partnership
1446. Greenfield North Apartments Ltd Partnership
1447. Greentree Associates (IL)
1448. Greenville Arms, LP
1449. Griffith Limited Partnership
1450. Grosvenor House Associates Limited Partnership (MA)
1451. Grove Park Villas, Ltd
1452. Growth Hotel Investors II (CA) - Active
1453. Growth Hotel Investors (CA) - Active
1454. Growth Hotel Investors Combined Fund #1
1455. GSSW-REO Confederate Ridge, L.P. (MS)
1456. GSSW-REO Providence Place, L.P. (TX)
1457. GSSW-REO Pebblecreek, L.P. (TX)
62
<PAGE> 63
1458. GSSW-REO Dallas, L.P. (TX)
1459. GSSW-REO Limited Partnership II (SC)
1460. GSSW-REO Timberline, L.P. (TX)
1461. GSSW-Woods on the Fairway, L.P. (TX)
1462. Gulf Coast Partners, Ltd. (AL)
1463. Gulf Coast Holdings Ltd
1464. Gulfgate Partners, Ltd. (TX)
1465. Gulfport Apts. Ltd.
1466. Gulfway Limited Partnership
1467. GW Carver Ltd
1468. Haili Associates
1469. Haines Associates Ltd Partnership
1470. Hainlin Mills Apt. Assoc., Ltd.
1471. Halls Mill Ltd.
1472. Hamilton House Associates (FL)
1473. Hampton Hill Partners (TX)
1474. Hampton Greens CPGF 22, LP
1475. Hampton/GHI Associates No. 1
1476. Hampton/GHI Associates No. 2
1477. Harbor Court Associates, LTD.
1478. Harbor Landing AP XI, LP (SC)
1479. Harold House Limited Partnership (FL)
1480. Harris Park Ltd Partnership
1481. Hastings Green Partners, Ltd. (TX)
63
<PAGE> 64
1482. Hastings Place Partners (TX)
1483. Hatillo Housing Associates
1484. Hattiesburg Ltd.
1485. HCW General Partners, Ltd. (TX)
1486. HCW Pension Real Estate Fund Limited Partnership (MA)
1487. Heather Associates (IL)
1488. Heatherwood-REO, L.P. (TX)
1489. Heights Associates Ltd Partnership
1490. Hemingway Housing Associates Ltd Partnership
1491. Heritage Village Limited Partnership (CT)
1492. Hickory Ridge Associates, Ltd. (FL)
1493. Hickory Heights Apartments, LP
1494. Highland Park Partners (IL)
1495. Highlands Village II Ltd
1496. Highridge Associates, L.P. (DE)
1497. Hillcrest Green Apartments Ltd
1498. Hillside Village Associates
1499. Hilltop Apartments Associates
1500. Hilltop Limited Partnership
1501. Hollows Associates Ltd Partnership
1502. Holly Court, LP
1503. Hollywood Gardens (DC)
1504. HomeCorp Investments, Ltd. (AL)
64
<PAGE> 65
1505. Homestead Apartments Associates, Ltd.
1506. Homestead Apartments Associates II, Ltd.
1507. Homestead III Associates, Ltd.
1508. Hospitality Inns Jacksonville Ltd II
1509. Hospitality Inns Pensacola, Ltd.
1510. Hospitality Inns Pensacola, Ltd. II
1511. Hospitality Partners II (CA)
1512. Hospitality Pensacola Partners, Ltd. (CA)
1513. Housing Assistance Of Mt. Dora Ltd
1514. Housing Assistance Sebring Ltd
1515. Housing Assistance Of Vero Beach Ltd
1516. Housing Assistance Of Orange City Ltd
1517. Houston Pines Ltd
1518. Houston Aristocrat Apartments Ltd Partnership
1519. HRH Properties, Ltd.
1520. Hudson Terrace Associates Ltd Partnership
1521. Hunt Club Associates, Ltd. (TX) (pending dissolution)
1522. Hunter's Glen (Phase I) AP XII LP
1523. Hunter's Glen AP XII LP
1524. Hunter's Glen Phase I GP, LLC (SC)
1525. Hunter's Glen Phase V GP, LLC (SC)
1526. Hunters Run Partners Ltd. (GA)
1527. Hurbell II Limited Partnership
1528. Hurbell III Ltd Partnership
65
<PAGE> 66
1529. Hurbell IV Limited Partnership
1530. Hurbell I Limited Partnership
1531. IDA Tower
1532. Indian Valley III Limited Partnership
1533. Indian Valley I Limited Partnership
1534. Indian Valley II Limited Partnership
1535. Ingram Square Apartments Ltd
1536. Insignia Jacques Miller, L.P.
1537. Insignia Properties, L.P. (DE)
1538. International Plaza Associates, LTD
1539. Intown West Associates Ltd Partnership
1540. Investors First-Staged Equity, L.P. (DE)
1541. Investors First-Staged Equity, L.P. II (DE)
1542. IPLP Midrise, L.L.C. (DE)
1543. IPLP Acquisition I, L.L.C. (DE)
1544. Ivanhoe Associates Limited Partnership (PA)
1545. J.W. English, Fondren Court Partners (TX)
1546. J.W. English, Camelot Apartments (TX)
1547. J.W. English Swiss Village Partners, Ltd. (TX)
1548. Jacques-Miller Associates (TN limited partnership)
1549. Jamestown Village Associates
1550. Jersey Park Associates Ltd Partnership
1551. JFK Associates
66
<PAGE> 67
1552. JMA Equities, L.P. (DE)
1553. Johnson Court LP
1554. Johnston Square Associates Ltd Partnership
1555. Johnstown/Consolidated Income Partners / 2 (CA)
1556. Johnstown/Consolidated Income Partners, A California Limited
Partnership
1557. Jupiter - I, L.P. (DE)
1558. Jupiter - II, L.P. (DE)
1559. JVL 19 Associates Ltd Partnership Verified
1560. JVL Limited Partnership
1561. JVL Sixteen Limited Partnership
1562. JVL 18 Associates Ltd Partnership Verified
1563. Kalmia Apts. LP
1564. Kapuna Associates
1565. Kemar Townhouse Associates, L.P. (IN)
1566. Kendall Court Associates, Ltd.
1567. Kendall Townhome Investors, Ltd. (FL)
1568. Kennedy Boulevard II GP, LLC
1569. Kennedy Boulevard III GP, LLC (SC)
1570. Kennedy Boulevard Associates
1571. Kennedy Boulevard I GP, LLC (SC)
1572. Kennedy Boulevard Associates I, L.P. (PA)
1573. Kennedy Boulevard Associates II, L.P. (PA) (pending dissolution)
1574. Kennedy Boulevard Associates III, L.P. (PA) (pending dissolution)
1575. Kennedy Boulevard Associates IV, L.P. (PA)(1) (pending dissolution)
67
<PAGE> 68
1576. Kennedy Homes Limited Partnership
1577. Kenneth Court LP
1578. Kenneth Arms
1579. Key Parkway West Associates (MA)
1580. Kimberly Associates Limited Partnership
1581. Kimberton Apartments Associates Limited Partnership
1582. Kinard LP
1583. King Bell Associates
1584. Knollcrest Apartments Ltd Partnership
1585. Koolau Housing Associates
1586. La Colina Partners, Ltd.
1587. La Colina Partners, Ltd. (CA)
1588. La Colina Ranch Apartments Ltd.
1589. La Salle Apartments
1590. La Vista Associates
1591. La Fontenay LP
1592. Lafayette Square, Ltd. (TN)
1593. Lafayette Manor Associates Ltd Partnership
1594. Lafayette Square Associates
1595. Lafayette Towne Elderly, Ltd. (MO)
1596. Lafayette Towne Family, Ltd. (MO)
1597. Laing Village Ltd Partnership
1598. LaJolla Partnership (TX)
68
<PAGE> 69
1599. Lake Avenue Associates
1600. Lake Avenue Offices Ltd
1601. Lake Crossing Limited Partnership (GA)
1602. Lake Forest Apartments
1603. Lake Wales Villas Ltd
1604. Lake Eden Associates, L.P. (DE)
1605. Lake Avenue Partners, Ltd. (CA)
1606. Lake Meadows GP, LLC (SC)
1607. Lakehaven Associates One (IL)
1608. Lakehaven Associates Two (IL)
1609. Lakeland East Limited Partnership (CT)
1610. Lakeshore LP
1611. Lakeside Village, Limited Partnership (TN)
1612. Lakeside Villa Associates, Ltd.
1613. Lakeview Arms Associates Lts Partnership
1614. Lakeview Villas Ltd
1615. Lakewood Associates, L.P. (DE)
1616. Lakewood AOPL LP
1617. Landau Apartments Company, LP
1618. Landings CPF 16, L.P. (DE)
1619. La Fontenay LLC
1620. Landmark Associates, Ltd. (TN)
1621. Las Americas Housing Associates
1622. Lassen Associates (DC)
69
<PAGE> 70
1623. Lauderdale Towers-REO, L.P. (TX)
1624. Lauderdale Lakes Associates, Ltd.
1625. Laurel Gardens, a Partnership In Commendam
1626. Laurens Villas, LP
1627. Lawndale Square-REO, L.P. (TX)
1628. Lazy Hollow Partners (a general partnership)
1629. Le Mans Apartments LP
1630. Lee Hy Manor Associates Ltd Partnership
1631. Lewisburg Associates
1632. Lincmar Associates (CA)
1633. Lincoln Park Associates (CO)
1634. Linden Court Associates Ltd Partnership
1635. Lock Haven Gardens Associates
1636. Lock Haven Elderly Associates
1637. Long Meadow Apartments, LP
1638. Loring Towers Associates
1639. Loring Towers Apartments Limited Partnership
1640. Loudoun House Ltd Partnership
1641. Louisbourg Elderly Associates
1642. Ludlam Gardens Apartments, LTD.
1643. Lyncstar Integrated Communications LLC (CO)
1644. M&P Development Co.
1645. Madison River Properties, L.L.C. (DE)
70
<PAGE> 71
1646. Madison Apts. Assocs.
1647. Madisonville, Ltd.
1648. Magnolia State Partners, Ltd. (MS)
1649. Manzanita Arms
1650. Maple Park West Ltd Partnership
1651. Maple Hill Associates
1652. Marten Manor Realty Associates (IN)
1653. Mayfair Manor Limited Partnership
1654. MBRF Hunt Club GP, LLC (SC)
1655. McColl Housing Associates
1656. McCombs Pension Investment Fund, Ltd. (CA)
1657. McCombs Realty Partners, L.P. (CA)
1658. Meadow Wood Associates General Partnership
1659. Meadowbrook Drive Limited Partnership (IL)
1660. Meadowgreen Associates, LTD
1661. Meadowood Townhouses III Limited Partnership
1662. Meadowood Townhouses I Limited Partnership
1663. Meadows IV Ltd.
1664. Meadows II Ltd
1665. Meadows Partners IV, Ltd. (MS)
1666. Meadows Partners, Ltd. (MS)
1667. Meadows Apartments Limited Partnership
1668. Meadows East Apartments Limited Partnership
1669. Meadows Limited Partnership (IL)
71
<PAGE> 72
1670. Menlo Limited Partnership
1671. Merced Commons (DC)
1672. Merced Commons II (DC)
1673. Meridian-REO, L.P. (TX)
1674. Merrifields Associates
1675. Mesa Dunes MHP LP
1676. Mesa Ridge Partnership (TX)
1677. Mesa Dunes GP, LLC (SC)
1678. Miami Elderly Associates Ltd Partnership
1679. Miami Court Associates, LTD
1680. Mid States Industrial Complex Ltd
1681. Mid-States Partners, Ltd. (CA)
1682. Midtown Plaza Associates, Ltd.
1683. Mill Street Associates Ltd Partnership
1684. Miller Village (Eastline Associates)
1685. Milliken Apartments Company
1686. Minneapolis Business Park JV
1687. Miramar Housing Associates Ltd Partnership
1688. Misty Woods CPF 19, LP (DE)
1689. Monaco Arms Associates II Ltd
1690. Monaco Arms Associates I
1691. Monmouth Associates Ltd Partnership
1692. Montblanc Gardens Apartments Associates
72
<PAGE> 73
1693. Montblanc Housing Associates
1694. Montgomery Realty Company - 84 (CA General Partnership)
1695. Montgomery Partners, Ltd.
1696. Montgomery Realty Company - 85 (CA General Partnership)
1697. Montgomery Realty Company - 80 (CA)
1698. Montgomery Realty Company - 83 (CA General Partnership)
1699. Monument Street Ltd Partnership
1700. Moral Gardens Associates
1701. Morrisania Towers Housing Company Ltd Partnership
1702. Morton Towers Apartments, L.P. (DE)
1703. Moss Gardens Ltd, a Partnership in Commendam
1704. Mountain Run, L.P. (DE)
1705. MRI Business Properties Fund, Ltd. (CA) - Active
1706. MRR Ltd Partnership
1707. Multi-Benefit Realty Funds 87-1, California Limited Partnerships (A)
1708. Multi-Benefit Realty Funds 87-1, California Limited Partnerships (B)
1709. Murphy-Blair Associates III (MO)
1710. Muske Ltd Partnership
1711. Natchez Ltd
1712. Natick Associates
1713. National Housing Partnership Realty Fund I
1714. National Housing Partnership Realty Fund III
1715. National Housing Partnership Realty Fund IV
1716. National Housing Partnership Realty Fund Two
73
<PAGE> 74
1717. National Pinetree Limited Partnership (NC)
1718. National Property Investors III (CA)
1719. National Property Investors 4 (CA)
1720. National Property Investors 5 (CA)
1721. National Property Investors 6 (CA)
1722. National Property Investors 7 (CA)
1723. National Property Investors 8 (CA)
1724. Neighborhoods of The Universities Lock Street Apartments Company
1725. New Vistas Apartments Associates Phase II
1726. New Fairways LP
1727. New Hidden Acres, LP
1728. New Horizons Associates, LTD.
1729. New Lake Meadows LP
1730. New Shelter V LP (DE)
1731. New Timber Ridge GP, L.P. (DE)
1732. New Timber Ridge, L.P. (DE)
1733. New Snowden Village I LP (DE)
1734. New Vistas Apartments Ltd Partnership
1735. New West 111th Street Housing Company Ltd Partnership
1736. New West 111th Street Two Associates Ltd Partnership
1737. Newberry Arms, LP
1738. Newton Hill Limited Partnership
1739. NHP Bayberry Associates LP
74
<PAGE> 75
1740. NHP Bayberry, LP
1741. NHP Bayshore Associates L.P.
1742. NHP Bayshore, L.P.
1743. NHP Carriage Associates LP
1744. NHP Carriage, LP
1745. NHP Center Associates LP
1746. NHP Center, LP
1747. NHP Chapparal Associates LP
1748. NHP Coach Associates LP
1749. NHP Coach, LP
1750. NHP Cornerstone Associates, LP
1751. NHP Cornerstone, LP
1752. NHP Country Club Woods Associates LP
1753. NHP Cranbrook Club Associates L.P.
1754. NHP Cranbrook Club Limited Partnership
1755. NHP Dove Associates, LP
1756. NHP Dove, LP
1757. NHP Elk Associates, LP
1758. NHP Elk, LP
1759. NHP Employee Limited Partnership (DC)
1760. NHP Forest II Associates, LP
1761. NHP Forest II, LP
1762. NHP Forest IV Associates, LP
1763. NHP Forest IV, LP
75
<PAGE> 76
1764. NHP Gates of Arlington Associates LP
1765. NHP Gates of Arlington, LP
1766. NHP Green Associates LP
1767. NHP Green, LP
1768. NHP Greenbriar Associates LP
1769. NHP Heather I Associates LP
1770. NHP Heather I, LP
1771. NHP Heather II Associates, LP
1772. NHP Heather II LP
1773. NHP Hessian Hills Associates LP
1774. NHP/HG Ten, L.P. (DE)
1775. NHP High River Associates LP
1776. NHP Hollymead Associates L.P.
1777. NHP Hollymead L.P.
1778. NHP Joint Ventures, Inc. (DE)
1779. NHP Kingston Associates L.P.
1780. NHP Kingston L.P.
1781. NHP Lane Associates LP
1782. NHP Lane, LP
1783. NHP Laurel III Associates, LP
1784. NHP Laurel III, LP
1785. NHP Longfellow Associates, LP
1786. NHP Longfellow, LP
76
<PAGE> 77
1787. NHP Mattapony, LP
1788. NHP Mid-Atlantic Partners One Limited Partnership (DE)
1789. NHP Mid-Atlantic Partners Three Limited Partnership (DE)
1790. NHP Mid-Atlantic Partners Two Limited Partnership (DE)
1791. NHP Midland Associates LP
1792. NHP Midland, LP
1793. NHP Mill Creek Associates LP
1794. NHP Mill Creek, LP
1795. NHP Oak Associates LP
1796. NHP Oak, LP
1797. NHP Paradise Bay Associates, LP
1798. NHP Paradise Bay, LP
1799. NHP Park Associates LP
1800. NHP Park, LP
1801. NHP Park Village Associates L.P.
1802. NHP Park Village Limited Partnership
1803. NHP Parkview Associates LP
1804. NHP Parkview, LP
1805. NHP Parkway Associates L.P.
1806. NHP Parkway L.P.
1807. NHP Partners Two Limited Partnership (DE)
1808. NHP Pembroke Associates LP
1809. NHP Pembroke Courts Associates L.P
1810. NHP Pembroke Courts L.P
77
<PAGE> 78
1811. NHP Pine Creek Manor Associates, LP
1812. NHP Pine Creek Manor, LP
1813. NHP Port Richey Associates LP
1814. NHP Port Richey, LP
1815. NHP Ramblewood Associates L.P.
1816. NHP Ramblewood L.P.
1817. NHP Regal Associates LP
1818. NHP Regal, LP
1819. NHP Ridgewood Partners, L.P. (DE)
1820. NHP Southwest Partners, L.P. (DE)
1821. NHP Spring Lake Manor Associates LP
1822. NHP Summer Associates LP
1823. NHP Summer, LP
1824. NHP Summit Associates LP
1825. NHP Summit, LP
1826. NHP Sunridge Associates LP
1827. NHP Sunridge, LP
1828. NHP Three Chopt West Associates LP
1829. NHP Timberview Associates LP
1830. NHP Timberview, LP
1831. NHP Town & Country/Country Place, LP
1832. NHP Townhouse Associates LP
1833. NHP Tropical Gardens Associates L.P.
78
<PAGE> 79
1834. NHP Tropical Gardens Limited Partnership
1835. NHP Twin Associates LP
1836. NHP Twin Gates East Associates LP
1837. NHP Twin, LP
1838. NHP Villa Associates LP
1839. NHP Villa, LP
1840. NHP Villas Associates L.P.
1841. NHP Villas L.P.
1842. NHP Will-O-Wisp Arms Associates LP
1843. NHP Windsor Crossing Associates, L.P.
1844. NHP Windsor Crossing, L.P.
1845. NHP Woodcreek Associates LP
1846. NHP Woodcreek, LP
1847. NHP Woodshire Associates L.P.
1848. NHP Woodshire, L.P.
1849. Ninth Springhill Lake Limited Partnership
1850. Nob Hill Villa Apts. Assocs. LP
1851. Norco Associates (PA)
1852. North River Village III
1853. North Lake Terrace Associates Ltd Partnership
1854. North Washington Park Partnership
1855. North River Village III GP LP
1856. North Coast/Syracuse LP
1857. Northbrook Partners, Ltd.
79
<PAGE> 80
1858. Northbrook Apts. Ltd
1859. Northgate Limited, L.P. (DE)
1860. Northgate Village Limited Partnership
1861. Northwest Terrace Associates Ltd Partnership
1862. NPI-AP Management, L.P. (DE)
1863. NPI-CL Management, L.P. (DE)
1864. Oak Park Partnership (IL)
1865. Oak West Ltd Partnership
1866. Oak Run LLC (SC)
1867. Oak Falls Partners (TX)
1868. Oak Hill Apartment Associates
1869. Oak Hollow South Associates
1870. Oak Park Partnership (IL)
1871. Oakland City/West End Associates, Ltd. (GA)
1872. Oakland Village Townhouse Associates Ltd Partnership
1873. Oakland Company, LP
1874. Oakwood Limited Partnership
1875. Ocala Place Ltd.
1876. OFA Partners (PA)
1877. Old Farm Associates (PA)
1878. Olde Rivertown Venture (IN)
1879. Olde Mill Investors Limited Partnership (DE)
1880. One West Conway Associates Ltd Partnership
80
<PAGE> 81
1881. One Lytle Place (OH)
1882. Opa Locka Associates, LTD.
1883. Orange Village Associates (PA)
1884. Orange City Villas II Ltd
1885. Orangeburg Manor
1886. Orchard Park Joint Venture
1887. Orchard Mews Associates Ltd Partnership
1888. Orchard Park Apartments, L.P.
1889. Orlando-Lake Conway Limited Partnership (CT)
1890. OTC Apartments Limited Partnership (FL)
1891. Outlets GP, L.L.C. (SC)
1892. Outlets Mall LP (DE)
1893. Outlets Mall GP Limited Partnership (DE)
1894. Overbrook Park Ltd
1895. Overlook Apartments Associates Ltd (GA)
1896. Oxford Apartments Ltd
1897. Oxford Place Associates
1898. Oxford Oaks Investors Ltd Partnership
1899. P W VI Associates Ltd Partnership
1900. P W III Associates Ltd Partnership
1901. P W IV Associates Ltd Partnership
1902. P W V Associates Ltd Partnership
1903. P.A.C. Land II Limited Partnership (OH)
1904. Palm Lake Associates, LTD.
81
<PAGE> 82
1905. Palm Beach Apartments, L.P.
1906. Palm House Ltd Partnership
1907. Palmer Square Apartments Associates
1908. Park Avenue West I Limited Partnership
1909. Park Avenue West II Limited Partnership
1910. Park Creek Ltd Partnership
1911. Parkview Arms Associates I Ltd Partnership
1912. Parkview Arms Associates II Ltd Partnership
1913. Parkview Apartments Ltd Partnership
1914. Parkview Associates Ltd Partnership Verified
1915. Parkways Associates Ltd Partnership
1916. Patman Switch Associates
1917. Pavilion Associates
1918. Pelham Place GP Limited Partnership
1919. Pelham Place L.P.
1920. Pendleton Riverside Apartments Oregon Ltd
1921. Penn Hall Associates Ltd Partnership
1922. Peppermill Place Partners (TX)
1923. Peppertree Village Of Avon Park Ltd
1924. Pershing Waterman Phase I Ltd Partnership
1925. Pickwick Place AP XII, LP
1926. PineHaven Villas Apartments LP
1927. Pinehurst, Ltd.
82
<PAGE> 83
1928. Pittsfield Neighborhood Associates
1929. Place One Ltd Partnership
1930. Placid Lake Associates, Ltd. (FL)
1931. Plainview Apartments, LP
1932. Plantation Partners Ltd. (FL)
1933. Plantation Creek CPGF 22, LP
1934. Pleasant Valley Apartments Ltd Partnership
1935. Point West Associates Limited Partnership (pending dissolution)
1936. Point West Limited Partnership (KS)
1937. Point James Apts., LP
1938. Polynesian Apartments Associates, LTD.
1939. Poplar Square GP LP (SC)
1940. Poplar Square AIP III LP (SC)
1941. Porterwood-REO, L.P. (TX)
1942. Portfolio Properties Eight Associates (DC)
1943. Portland Plaza Ltd Partnership
1944. Portner Place Associates Ltd Partnership
1945. Post Ridge Associates, Ltd.
1946. Post Street Associates Ltd Partnership
1947. Preferred Properties Fund 82 (CA)
1948. Preferred Properties Fund 80 (CA)
1949. Pride Gardens
1950. Prime H.C. Limited Partnership (TX)
1951. Prime Crest, L.P. (TX)
83
<PAGE> 84
1952. Prime Aspen Limited Partnership (TX)
1953. Prince Street Towers Ltd Partnership
1954. Property Asset Management Services, L.L.C.
(DE- converted from L.P. in 1999)
1955. Property Asset Management Services-California, L.L.C. (CA)
1956. Pueblo Ltd Partnership
1957. Quail Run IV GP LP
1958. Quail Woods Developers
1959. Quail Run IV LP
1960. Quail Run Associates, L.P. (DE)
1961. Queen's Court Joint Venture (TN)
1962. Queenstown Apartments Ltd Partnership
1963. Quint Properties
1964. Raintree Pensacola, L.P. (SC)
1965. Raintree GP, L.L.C. (SC)
1966. Ramblewood LP
1967. Ramblewood Services, LLC (DE)
1968. Rancho Townhouse Associates (DC)
1969. Rancho Arms
1970. Randol Crossing Investors (IL)
1971. Randol Crossing Partners (IL)
1972. Raymonia Apts. LP
1973. RC Associates (IL)
1974. Real Estate Venture Fund III Limited Partnership
84
<PAGE> 85
1975. Red River Estates, LP
1976. Reedy River, L.L.C. (DE)
1977. Registry Square Ltd Partnership
1978. Related/Advance Capital, Ltd. (FL)
1979. Related/GMN Biscayne, Ltd. (FL)
1980. Related/GMN Teal, Ltd. (FL)
1981. Related Management Company of Florida
1982. Related/Winchester, Ltd. (FL)
1983. Residual Equities, L.P. (DE)
1984. Restaurant Properties 1978, Ltd. (TN)
1985. Retirement Manor Associates (CA)
1986. RI-15 Limited Partnership (DC)
1987. Richlieu Associates
1988. Ridge Carlton Associates (MA)
1989. Ridgecrest Associates (IL)
1990. Riding Club, Ltd. (DE)
1991. River Loft Associates (MA)
1992. River Hill, Limited (TN)
1993. River Loft Apartments Limited Partnership (PA)
1994. River Woods Associates Ltd Partnership
1995. Rivercreek Apartments Limited Partnership
1996. Rivercrest Apartments LP (SC)
1997. Riverfront Apartments Ltd Partnership
1998. Riverside Park Associates Limited Partnership (DE)
85
<PAGE> 86
1999. Riverview II Associates
2000. Riverwalk Associates LP
2001. Rockwell Limited Partnership
2002. Rodeo Drive Limited Partnership (CA)
2003. Rolling Meadows Of Ada Ltd
2004. Roosevelt Gardens II
2005. Roosevelt Gardens LP
2006. Royal Coast Apt. Assoc., Ltd.
2007. Royal Towers Limited Partnership
2008. RT Homestead Assoc., Ltd. (FL)
2009. RT Walden Associates, Ltd. (FL)
2010. Ruffin Road Associates Limited Partnership (VA)
2011. Ruscombe Gardens Ltd Partnership
2012. Russ Allen Plaza Associates, LTD
2013. Rutherford Park Townhouses Associates
2014. S.A. Apartments, Ltd. (AL)
2015. Sabal Palm Associates, Ltd.
2016. SAHF I Limited Partnership (DE)
2017. SAHF II Limited Partnership (DE)
2018. Saint George Villas (SC)
2019. Salem GP, L.L.C. (SC)
2020. Salem Court House LP
2021. Salem Arms of Augusta LP
86
<PAGE> 87
2022. San Juan Apartments
2023. San Souci-REO, L.P. (TX)
2024. San Juan del Centro Limited Partnership
2025. San Jose Limited Partnership
2026. Sandy Springs Associates Ltd
2027. Scotch Associates Limited Partnership (PA)
2028. Scotch Lane Associates (PA)
2029. Seagrape Village Associates, LTD.
2030. Seaside Point Partners, Ltd. (TX)
2031. Seasons Apartments, L.L.C. (TX)
2032. Seasons Apartments, L.P. (TX)
2033. Sencit Selinsgrove Associates
2034. Sencit Towne House LP
2035. Sencit New York Avenue Associates
2036. Sencit Kelly Township Associates
2037. Sencit F/G Metropolitan Associates (NJ)
2038. Sencit Lebanon Company
2039. Sencit Jacksonville Company, Ltd
2040. Serramonte Plaza, a California Limited Partnership
2041. Shaker Square, L.P. (DE)
2042. Serramonte Plaza, a California Limited Partnership
2043. Seventh Springhill Lake Limited Partnership
2044. Shannon Manor
2045. Sharon Woods, Limited (A Tennessee Limited Partnership)
87
<PAGE> 88
2046. Shearson/Calmark Heritage Park, Ltd. (CA)
2047. Shearson/Calmark Heritage Park II, Ltd. (CA)
2048. Shelter V GP SC LP
2049. Shelter Properties V (A South Carolina Limited Partnership)
2050. Shelter IV GP LP
2051. Shelter Properties I (A South Carolina Limited Partnership)
2052. Shelter Properties III (A South Carolina Limited Partnership)
2053. Shelter Properties VII (A South Carolina Limited Partnership)
2054. Shelter Properties VI (A South Carolina Limited Partnership)
2055. Shelter Properties IV (A South Carolina Limited Partnership)
2056. Shelter Properties II (A South Carolina Limited Partnership)
2057. Shelter I GP LP (DE)
2058. Shelter III GP LP
2059. Shelter V GP LP (DE)
2060. Shelter VII GP LP
2061. Sherman Terrace Associates
2062. Shoreview Apartments
2063. Signature Point Partners, Ltd. (TX)
2064. Signature Point Joint Venture (TX)\
2065. Silver Blue Lake Apartments, LTD
2066. Site 10 Community Alliance Associates Ltd Partnership
2067. Sixth Springhill Lake Limited Partnership
2068. Sleepy Hollow Apartments Ltd Partnership
88
<PAGE> 89
2069. Snap IV Ltd Partnership
2070. SNI Development Company Ltd Partnership
2071. Snowden Village Associates, L.P. (DE)
2072. Snowden Village GP Limited Partnership (DE)
2073. Snowden GP, L.L.C.
2074. Somerset Utah, L.P. (CO)
2075. South Port CCP/IV, L.L.C.
2076. South Brittany Oaks, L.P. (DE)
2077. South Windrush Properties, L.P. (TX)
2078. South Port Apartments, A California Limited Partnership
2079. South Mountain Terrace Ltd
2080. South Dade Apartments, LTD.
2081. South Hiawassee Village Ltd
2082. South La Mancha, L.P. (DE)
2083. South Landmark Properties, L.P. (TX)
2084. Southmont Apartments
2085. Southridge Apartments Limited Partnership
2086. Southridge Investors (IL)
2087. Southridge Associates (IL)
2088. Southward Limited Partnership (TX)
2089. Southwest Associates, L.P. (DE)
2090. Spring Meadow Limited Partnership
2091. Springfield Facilities, LLC (MD)
2092. Springhill Commercial Limited Partnership (MD)
89
<PAGE> 90
2093. Springhill Lake Investors Limited Partnership (MD)
2094. Spruce Ltd Partnership
2095. St. Nicholas Associates Ltd Partnership
2096. Stafford Apartments Ltd Partnership
2097. Stanbridge LP (Lakeshore I)
2098. Standart Woods Associates Limited Partnership (DE)
2099. Star Creek Assoc., Ltd.
2100. Star Creek II Assoc., Ltd.
2101. Staunton Heights LP (Lakeshore III)
2102. Sterling Crest Joint Venture
2103. Stirling Court Partners (TX)
2104. Stock Island Ltd Partnership
2105. Stone Hollow-REO, L.P. (TX)
2106. Stone Ridge LLC
2107. Stonecreek, Limited (TN)
2108. Stoney Creek CPGF 22, LP
2109. Stoney Greens, LLC (SC)
2110. Stonybrook Apartments Associates (SC)
2111. Storey Manor Associates Ltd Partnership
2112. Stratford Place Investors Limited Partnership (DE)
2113. Strawbridge Square Associates Ltd Partnership
2114. Sturbrook Investors, Ltd.
2115. Summersong Townhouse Ltd Partnership
90
<PAGE> 91
2116. Summerwalk NPI III, L.P.
2117. Sunbury Partners, Ltd. (TX)
2118. Sunrise Associates Ltd Partnership
2119. Sunset Plaza Apartments
2120. Susquehanna View LP
2121. Sutton Place CCP V, LP
2122. Swift Creek Apts. of Hartsville, LP
2123. Sycamore Creek Associates, L.P. (DE)
2124. T.M. Alexander Associates, LTD.
2125. TAHF II Limited Partnership (DE)
2126. Tamarac Pines II Ltd Partnership
2127. Tamarac Pines Ltd Partnership
2128. Tara Bridge Limited Partnership (GA)
2129. Taunton II Associates
2130. Taunton Green Associates
2131. Teal Pointe Assoc., Ltd.
2132. Texas Apartment Investors General Partnership (DE)
2133. Texas Affordable Housing Investment Fund I Limited Partnership (NC)
2134. Texas Residential Investors Limited Partnership (DE)
2135. The Bluffs Development Limited Partnership
2136. The Corners Apartments IV Limited Partnership (SC)
2137. The Crossings II Limited Partnership (GA)
2138. The Fondren Court Joint Venture (TX)
2139. The Glens LP
91
<PAGE> 92
2140. The Houston Recovery Fund (TX)
2141. The Meadows Apartments
2142. The National Housing Partnership (DC)
2143. The Park at Cedar Lawn, Ltd. (TX)
2144. The Rogers Park Partnership
2145. The Trails GP Limited Partnership
2146. The Trails, LP
2147. Third Springhill Lake Limited Partnership
2148. Thrippence Associates, Ltd. (GA)
2149. Thurber Manor Associates, L.P. (DE)
2150. Tiffany Rehab Associates (MO)
2151. Timberhill Associates LP
2152. Timberlake Apartments Limited Partnership (TX)
2153. Timberwoods Associates, LP
2154. Timuquana Park Associates
2155. Tinker Creek Limited Partnership
2156. Tompkins Terrace Associates
2157. Town North, a Limited Partnership
2158. Towne Parc-REO, L.P. (TX)
2159. Township at Highlands Partners, Ltd. (TX)
2160. Townview Towers I Partnership, Ltd.
2161. Treeslope Apartments Limited Partnership (SC)
2162. Tri-Properties Associates, LP (SC)
92
<PAGE> 93
2163. Trianon Ltd. A LP
2164. Trinity Hills Village Apartments Ltd Partnership
2165. Trinity Towers 14th Street Associates Ltd Partnership
2166. Tumast Associates
2167. Turnberry-REO, L.P. (TX)
2168. Twin Gables Associates Ltd Partnership
2169. Twin Towers Associates
2170. Two Bridges Associates Ltd Partnership
2171. Tyee Associates
2172. U.S. Realty Partners, Limited Partnership (SC)
2173. U.S. Shelter, LP
2174. United Investors Income Properties (A Missouri Limited Partnership)
2175. United Investors Growth Properties II (MO)
2176. United Investors Growth Properties (A Missouri Limited Partnership)
2177. United Investors Income Properties II (MO)
2178. United Front Homes
2179. United Handicap Federation Apartments Associates (MN)
2180. United House Associates
2181. United Housing Partners-Cuthbert Ltd
2182. United Housing Partners Elmwood Ltd
2183. United Housing Partners Morristown Ltd Partnership
2184. United Housing Partners Welch Ltd
2185. United Housing Partnership Carbondale Ltd
2186. United Redevelopment Associates Ltd Partnership
93
<PAGE> 94
2187. University Plaza Associates
2188. Urbanizacion Maria Lopez Housing Company Ltd Partnership
2189. US Realty I Limited Partnership
2190. Vantage '78 Ltd Partnership
2191. Verdes Del Oriente
2192. Villa De Guadalupe Associates (DC)
2193. Villa Nova, Ltd. (TN)
2194. Village Apts.
2195. Village Circle Apartments Ltd Partnership
2196. Village Green Limited Partnership (FL)
2197. Village Green Apartments Company Ltd
2198. Vineville Towers Associates Ltd
2199. Vista APX, Ltd.
2200. Vistas De San Juan Associates Ltd Partnership
2201. Vistula Heritage Village
2202. VMS Apartment Portfolio Associates III, a California Limited
Partnership
2203. VMS 1985-253 Ltd (CA)
2204. VMS National Residential Properties Joint Venture (IL)
2205. VMS 1985-254 Ltd (CA)
2206. VMS Apartment Portfolio Associates II, a California Limited Partnership
2207. VMS National Residential Portfolio II
2208. VMS National Residential Portfolio I
2209. Voltaire Assocs. (GA)
94
<PAGE> 95
2210. Waico Phase II Associates Ltd Partnership
2211. Waico Apartments Associates Ltd Partnership
2212. Waipahu Associates
2213. Walden Oaks Associates Ltd Partnership
2214. Walden Pond Assoc., Ltd.
2215. Walden Joint Venture Limited Partnership
2216. Walhalla Gardens LP
2217. Walker Springs, Limited (A Tennessee Limited Partnership)
2218. Walmsley Terrace Associates Limited Partnership (VA)
2219. Walnut Springs Associates (IL)
2220. Walnut Springs Limited Partnership (IL)
2221. Walnut Hills Associates Ltd
2222. Walters/Property Asset Management Services, L.L.C. (DE)
2223. Wash-West Properties
2224. Washington Manor Limited Partnership (TX)
2225. Washington Chinatown Associates Ltd Partnership
2226. Waterford Square Apartments, Ltd.
2227. Waterman Ltd Partnership
2228. Waters Towers Associates Ltd Partnership
2229. Waynesboro Ltd.
2230. West Trails Partners, Ltd. (TX)
2231. West Oak Village Limited Partnership
2232. West Lake Arms Limited Partnership (DE)
2233. Westbury Investors Limited Partnership (DE)
95
<PAGE> 96
2234. Westbury Limited Partnership (MD)
2235. Westchase Midrise Office Partners, Ltd. (TX)
2236. Western Can Ltd
2237. Westgate Apartments
2238. Westlake Apts. Assocs.
2239. Westlake East Associates, L.P.
2240. Westminster Ltd Partnership
2241. Whispering Pines AIP 6 LP
2242. Whitefield Place Ltd Partnership
2243. Wigar Ltd Partnership
2244. Williamsburg South Apartments LP
2245. Williamsburg East-REO, L.P.
2246. Williamsburg Limited Partnership (IL)
2247. Willow Creek, L.P. (DE)
2248. Winchester Gardens, Ltd.
2249. Windsor Apartments Associates Limited Partnership
2250. Windsor Crossings Limited Partnership
2251. Windsor Hills I LP (DE)
2252. Wingfield Club Investors, Limited Partnership (KS)
2253. Wingfield Investors LP
2254. Winnsboro Arms LP
2255. Winrock Houston Limited Partnership (DE)
2256. Winter Park Associates LP
96
<PAGE> 97
2257. Winthrop Houston Associates Limited Partnership (DE)
2258. Winthrop Apartment Investors Limited Partnership (MD)
2259. Winthrop Growth Investors I Limited Partnership (MA)
2260. Winthrop Texas Investors Limited Partnership (MD)
2261. Wolf Ridge Apartments, Ltd.
2262. Wollaston Manor Associates
2263. Wood Creek CPGF 22, LP
2264. Woodberry Forest-REO, L.P. (TX)
2265. Woodcrest Apartments, Ltd. (TX)
2266. Woodhaven Associates, a Virginia Limited Partnership
2267. Woodhill Associates (IL)
2268. Woodland Ridge Associates (IL)
2269. Woodland Ridge II Partners (IL)
2270. Woodland Apartments L.P.
2271. Woodlawn Village Associates, L.P. (DE)
2272. Woodmark Limited Partnership
2273. Woodmere Associates, L.P. (DE)
2274. Woods Mortgage Associates (PA)
2275. Woods of Inverness CPF 16, L.P.
2276. Woodside Village
2277. Woodside Villas of Arcadia Ltd
2278. Woodway Office Partners, Ltd. (TX)
2279. Worcester Episcopal Housing Company
2280. Wyckford Commons, L.P. (DE)
97
<PAGE> 98
2281. Wyntre Brook Associates (PA)
2282. Yadkin Associates Ltd Partnership
2283. Yorktown Towers Associates (IL)
98
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statements
listed below of Apartment Investment and Management Company and in the related
Prospectuses of our report dated January 20, 2000, with respect to the
consolidated financial statements and schedule of Apartment Investment and
Management Company included in this Annual Report (Form 10-K) for the year
ended December 31, 1999.
Form S-3 (No. 333-828)
Form S-3 (No. 333-8997)
Form S-3 (No. 333-17431)
Form S-3 (No. 333-20755)
Form S-3 (No. 333-4546)
Form S-3 (No. 333-36531)
Form S-3 (No. 333-36537)
Form S-3 (No. 333-4542)
Form S-8 (No. 333-4550)
Form S-8 (No. 333-4548)
Form S-8 (No. 333-14481)
Form S-8 (No. 333-36803)
Form S-8 (No. 333-41719)
Form S-4 (No. 333-49075)
Form S-3 (No. 333-47201)
Form S-8 (No. 333-57617)
Form S-4 (No. 333-60663)
Form S-8 (No. 333-70409)
Form S-3 (No. 333-61409)
Form S-3 (No. 333-69121)
Form S-3 (No. 333-75109)
Form S-4 (No. 333-60355)
Form S-8 (No. 333-75349)
Form S-3 (No. 333-77257)
Form S-3 (No. 333-77067)
Form S-3 (No. 333-81689)
Form S-3 (No. 333-92743)
Form S-3 (No. 333-31718)
/s/ ERNST & YOUNG LLP
Denver, Colorado
March 10, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
10-K AND IS QUALIFIED IN ITS ENTIRETY TO SUCH 10-K
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 186,199
<SECURITIES> 0
<RECEIVABLES> 231,508
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 4,508,535
<DEPRECIATION> (416,497)
<TOTAL-ASSETS> 5,684,951
<CURRENT-LIABILITIES> 0
<BONDS> 2,584,289
149,500
641,250
<COMMON> 668
<OTHER-SE> 1,620,910
<TOTAL-LIABILITY-AND-EQUITY> 5,684,951
<SALES> 577,372
<TOTAL-REVENUES> 640,093
<CGS> 387,345
<TOTAL-COSTS> 406,317
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 140,094
<INCOME-PRETAX> 80,959
<INCOME-TAX> 0
<INCOME-CONTINUING> 80,959
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 80,959
<EPS-BASIC> 0.39
<EPS-DILUTED> 0.38
</TABLE>
<PAGE> 1
EXHIBIT 99.1
Agreement Regarding Disclosure of Long-Term Debt Instruments
In reliance upon Item 601(b)(4)(iii)(A), of Regulation S-K, Apartment
Investment and Management Company, a Maryland corporation (the "Company") has
not filed as an exhibit to its Annual Report on Form 10-K for the fiscal year
ended December 31, 1999, any instrument with respect to long-term debt not being
registered where the total amount of securities authorized thereunder does not
exceed 10 percent of the total assets of the Company and its subsidiaries on a
consolidated basis. Pursuant to Item 601(b)(4)(iii)(A), of Regulation S-K, the
Company hereby agrees to furnish a copy of any such agreement to the Securities
Exchange Commission upon request.
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
By: /s/ PETER KOMPANIEZ
------------------------------------
Peter Kompaniez
President
