<PAGE> 1
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported)
February 20, 1997
NHP INCORPORATED
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 000-26572 52-1445137
- -------- --------- ----------
(State or Other Jurisdiction of (Commission File (I.R.S. Employer
Incorporation or Organization) Number) Identification No.
8065 LEESBURG PIKE, VIENNA, VIRGINIA 22182-2738
- ------------------------------------ ----------
(Address of principal executive offices) (Zip Code)
</TABLE>
Registrant's telephone number, including area code (703) 394-2400
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<PAGE> 2
Item 5. Other Events
On February 20, 1997, NHP Incorporated ("NHP") announced that Apartment
Investment and Management Company ("AIMCO"), a real estate investment trust
whose shares are traded on the New York Stock Exchange (AIV-NYSE), had entered
into a letter agreement to acquire all the shares of NHP common stock owned by
Demeter Holdings Corporation ("Demeter"), an affiliate of Harvard Private
Capital Group, Inc., and Capricorn Investors, L.P. ("Capricorn") for a price of
$20 per share in AIMCO stock, plus retention by Demeter and Capricorn of
Washington Mortgage Financial Group, NHP's wholly-owned Financial Services
Division, through a spin-off on a pro-rata basis with all current NHP
stockholders. Demeter and Capricorn own in the aggregate approximately 54.9% of
NHP's outstanding shares. The letter agreement between AIMCO, Demeter and
Capricorn, attached hereto as Exhibit 99.1, is incorporated in its entirety by
reference in response to this Item 5.
NHP also announced that it had received a merger proposal from AIMCO,
pursuant to which AIMCO would acquire the balance of the outstanding shares of
NHP on the same terms agreed to by Harvard and Capricorn. It is not yet known
whether any shares received would be tax-free to NHP's shareholders. Closing of
AIMCO's purchase of the Demeter and Capricorn shares is not conditioned on the
acceptance by NHP of AIMCO's merger proposal. AIMCO also has agreed to acquire
certain multifamily real estate interests of NHP Partners, Inc. ("NHP
Partners"), an entity also controlled by Demeter and Capricorn. Closing of this
proposed acquisition may be subject to NHP's right of first refusal pursuant to
intercompany agreements between NHP and NHP Partners, but is independent of
AIMCO's purchase of the Demeter and Capricorn shares and the success of AIMCO's
merger proposal. The proposed merger letter and the registrant's press release,
attached hereto as Exhibits 99.2 and 99.3, respectively, are incorporated in
their entirety by reference in response to this Item 5.
On February 21, 1997, NHP announced it had received a letter from
Insignia Financial Group, Inc. ("Insignia"), stating that Insignia wishes to
make an offer to buy 100% of the outstanding common stock of NHP in a tax-free
transaction at a price higher than the offer by AIMCO. The registrant's press
release, attached hereto as Exhibit 99.4, is incorporated in its entirety by
reference in response to this Item 5.
On February 27, 1997, NHP announced it had received a second letter
from Insignia stating that Insignia is prepared to offer $24 per share of NHP
common stock -- 50% cash and 50% in Insignia Class A Common Stock -- for all
outstanding stock of NHP, including the stock held by Demeter and Capricorn. The
offer that Insignia wishes to make does not contemplate a spin-off of NHP's
Washington Mortgage Financial Group subsidiary. The registrant's press release,
attached hereto as Exhibit 99.5, is incorporated in its entirety by reference in
response to this Item 5.
2
<PAGE> 3
Item 7. Financial Statements and Exhibits
(c) EXHIBITS
<TABLE>
<CAPTION>
<S> <C>
99.1 - Letter Agreement between Apartment Investment and
Management Company, Demeter Holdings Corporation and
Capricorn Investors, L.P., dated February 13, 1997.
99.2 - Proposed merger letter from Apartment Investment and
Management Company to Mr. J. Roderick Heller, III, dated
February 19, 1997.
99.3 - Press Release - February 20, 1997.
99.4 - Press Release - February 21, 1997.
99.5 - Press Release - February 27, 1997.
</TABLE>
3
<PAGE> 4
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NHP INCORPORATED
(Registrant)
<TABLE>
<CAPTION>
<S> <C>
By: /S/ JOEL F. BONDER
----------------------------------
Joel F. Bonder
Senior Vice President, General
Counsel
</TABLE>
Dated February 27, 1996
4
<PAGE> 5
INDEX TO EXHIBITS
FORM 8-K
<TABLE>
<CAPTION>
ITEM PAGE
- ---- ----
<S> <C> <C>
99.1 Letter Agreement between Apartment Investment and Management
Company, Demeter Holdings Corporation and Capricorn
Investors, L.P., dated February 13, 1997 6
99.2 Proposed merger letter from Apartment Investment and
Management Company to Mr. J. Roderick Heller, III,
dated February 19, 1997 25
99.3 Press Release - February 20, 1997 27
99.4 Press Release - February 21, 1997 28
99.5 Press Release - February 27, 1997 29
</TABLE>
5
<PAGE> 1
EXHIBIT 99.1
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
1873 SOUTH BELLAIRE STREET, 17th Floor
DENVER, COLORADO 8O222
February 13, 1997
Demeter Holdings Corporation
Phemus Corporation
600 Atlantic Avenue
Boston, MA 02210
Capricorn Investors, L.P.
72 Cummings Point Road
Stanford, CT 06902
Gentlemen:
This letter agreement is intended to set forth our understanding pursuant to
which Apartment Investment and Management Company, a Maryland corporation
("AIMCO"), or certain of its affiliates will acquire certain assets from Demeter
Holdings Corporation, a Massachusetts corporation ("Demeter"), Phemus
Corporation, a Massachusetts corporation ("Phemus"), and Capricorn Investors,
L.P., a Delaware Limited partnership ("Capricorn" and, together with Demeter and
Phemus, the "Sellers") and certain of their affiliates.
1. STOCK PURCHASE. AIMCO will purchase (the "Stock Purchase") (a) all
shares of Common Stock, par value $.01 per share ("NHP Stock"), of NHP
Incorporated, a Delaware corporation ("NHP"), owned by Demeter, and (b) all
shares of NHP Stock owned by Capricorn.
(a) The purchase price will be (i) $2O per share of NHP Stock,
payable in shares of Class A Common Stock, par value $.01 per share ("AIMCO
Stock"), of AIMCO, with such shares of AIMCO Stock valued at their Market Price
(as defined) at closing, plus (ii) the additional consideration payable pursuant
to paragraph 1(h) and paragraph 6. "Market Price" means $26.75.
(b) To the extent that Demeter would directly and indirectly through
its affiliate's interests in Capricorn, or otherwise receive AIMCO
<PAGE> 2
Demeter Holdings Corporation
Phemus Corporation
Capricorn Investors, L.P.
February 13, 1997
Page 2
Stock that would, in the aggregate, exceed 8.7% of AIMCO's outstanding common
stock, AIMCO will pay cash to the extent of such excess.
(c) Demeter and Capricorn will vote their shares of NHP Stock in
favor of the Merger (as defined below) and against any alternative acquisition
proposals. Capricorn may transfer any or all of its shares of NHP Stock to its
partners.
(d) If the NHP Board of Directors approves the Merger, Capricorn will
not be obligated to sell, and AIMCO will not have the right to buy, such number
of shares of Capricorn's NHP Stock as Capricorn shall specify to AIMCO. On the
earlier of September 1, 1997, if the Merger is not then effective, or the date
on which NHP stockholders, at a meeting duly convened at which the Merger shall
have been submitted for the approval thereof, shall have failed to approve the
Merger, Capricorn shall be entitled to cause AIMCO to purchase such shares, and
AIMCO shall be entitled to purchase from Capricorn such shares, in each case, at
the purchase price and on the other terms of the Stock Purchase.
(e) The closing of the Stock Purchase will be subject to certain
conditions, including approval of AIMCO's Board of Directors, the expiration or
early termination of the waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), any necessary clearances
from the Department of Housing and Urban Development ("HUD") and other necessary
governmental approvals. AIMCO's Board of Directors will meet to consider and
vote on the Stock Purchase as soon as possible and, in any event, not later than
February 20, 1997.
<PAGE> 3
Demeter Holdings Corporation
Phemus Corporation
Capricorn Investors, L.P.
February 13, 1997
Page 3
(f) AIMCO, Demeter and Capricorn will promptly and diligently
negotiate in good faith a definitive Stock Purchase Agreement consistent with
this letter agreement. The parties will make representations with respect to
organization, authority, effect of transactions, litigation, brokerage, purchase
for own account, acknowledgment of receipt of restricted securities, formation
not for the purpose, suitability, and experience. AIMCO will also make certain
representations relating to the issuance of shares of AIMCO Stock. In addition,
AIMCO will make certain additional representations, including with respect to
its financial statements, its filings with the SEC, the absence of undisclosed
material liabilities, litigation, certain developments (including material
agreements) and defaults with respect to the charter documents and material
agreements of AIMCO and its subsidiaries. Demeter and Capricorn will make
substantially similar additional representations with respect to NHP, which
representations (except with respect to NHP's financial statements) shall be
subject to the actual knowledge of Demeter and Capricorn, and will also make
representations relating to title to their shares of NHP Stock. The
representations and warranties of Demeter and Capricorn shall be several and not
joint. The representations and warranties will survive for one year except as
to title and authority, which should survive indefinitely.
(g) AIMCO will agree, at its cost, to use its best efforts to provide
Demeter and Capricorn with an effective shelf registration promptly following
the closing of the Stock Purchase to permit the sale of their shares of AIMCO
Stock; provided, however, that this provision shall not require AIMCO to delay
the Merger or the Exchange offer. AIMCO shall maintain the effectiveness of
such registration statement for not less than three years.
<PAGE> 4
Demeter Holdings Corporation
Phemus Corporation
Capricorn Investors, L.P.
February 13, 1997
Page 4
(h) If the record date for the distribution (the "Spin-Off") of
shares of common stock of NHP Financial Services, Ltd. ("NFS") shall occur on
or before the closing of the Stock Purchase, then the sale of the shares of NHP
Stock shall be made on an ex-dividend basis. If the record date for the Spin-
Off shall occur after the closing of the Stock Purchase and on or before
September 1, 1997, then, as additional consideration for the sale of NHP Stock
by Demeter and Capricorn to AIMCO, AIMCO will deliver to Demeter and Capricorn
the NFS shares that will be distributed with respect to the outstanding shares
of NHP Stock acquired by AIMCO in the Stock Purchase. If the record date of the
Spin-Off shall not have occurred on or before September 1, 1997, then, as
additional consideration for the sale of NHP Stock by Demeter and Capricorn to
AIMCO, AIMCO shall pay $3.05 per share of NHP Stock sold to AIMCO. AIMCO will
use its best efforts to cause the record date for the Spin-Off to occur on or
before September 1, 1997.
(i) The closing of the Stock Purchase shall take place on April 1,
1997, or as soon thereafter as practicable after all requisite approvals have
been obtained.
(j) Subject to the approval of AIMCO's Board of Directors of this
letter agreement. upon three business days' notice, Demeter and Capricorn may
require AIMCO to purchase from the Sellers up to 10% of the shares of NHP Stock.
2. PURCHASE OF REAL ESTATE ASSETS. Subject to any rights of first refusal
of NHP, AIMCO OP will purchase (the "Real Estate Purchase") certain real estate
and related assets (or interests therein) owned by affiliates of the Sellers, as
follows:
(a) AIMCO's operating partnership, AIMCO properties, L.P., a Delaware
limited partnership
<PAGE> 5
Demeter Holdings Corporation
Phemus Corporation
Capricorn Investors, L.P.
February 13, 1997
Page 5
("AIMCO OP"), will agree to purchase from Demeter, Phemus and Capricorn (or
their affiliates) their respective interests in the conventional multifamily
properties listed on Schedule 1 hereto at the respective prices set forth on
Schedule 1. AIMCO OP will have an option to purchase from Demeter, Phemus and
Capricorn (or their affiliates) their respective interests in the conventional
multifamily properties listed on Schedule 2 hereto for no additional
consideration. Any property listed on Schedule 2 the interests in which are not
acquired by AIMCO OP will be moved to Schedule 5 as an Affordable Property. The
purchase price for properties listed on Schedules 1 and 2 will be paid in cash;
provided however that, in lieu of cash, Demeter and Capricorn shall be entitled
to receive all or any portion of such purchase price in units ("OP Units") of
AIMCO OP valued at the Market Price. Holders of such OP Units shall be
entitled, but not obligated, to guarantee such amount of indebtedness of AIMCO
OP, and on such terms, as such holders may elect, AIMCO OP shall use reasonable
efforts to minimize tax liabilities associated with a sale of such conventional
multifamily properties or interests therein. AIMCO will agree, at its cost, to
use its best efforts to provide holders of such OP Units with an effective shelf
registration promptly following the closing of the Real Estate Purchase to
permit the sale of the shares of AIMCO Stock issued upon the redemption or
exchange of such OP Units: provided, however, that this provision shall not
require AIMCO to delay the Merger or the Exchange offer. AIMCO shall maintain
the effectiveness of such shelf registration for not less than three years.
(b) The properties listed on Schedule 1 and Schedule 2 are currently
owned by entities that are owned or controlled, directly or indirectly, by the
Sellers. The Sellers will cause the entities that own such properties to sell
to AIMCO OP, at Seller's election, either (i) such properties directly, (ii)
<PAGE> 6
Demeter Holdings Corporation
Phemus Corporation
Capricorn Investors, L.P.
February 13, 1997
Page 6
their interest in the property-owning entities, or (iii) their interests in
entities that own, directly or indirectly, such property-owning entities;
provided, however, that, at the time of the closing of the sale, no such entity
shall own any properties or assets other than the properties listed on Schedule
1 or the properties listed on Schedule 2 that AIMCO OP has elected to purchase.
(c) AIMCO and the Sellers will promptly and diligently negotiate in
good faith a definitive Real Estate Purchase Agreement consistent with this
letter agreement. The Sellers will make representations with respect to the
properties and the entities that own them as to title, environmental matters,
financial statements, surveys, structural integrity, organization, authority,
effect of transactions, brokerage, litigation, purchase for own account,
acknowledgment of receipt of restricted securities, formation not for the
purpose, suitability and experience.
(d) With respect to any property listed on Schedule 1 that is
acquired by AIMCO OP, if, within 60 days after the date on which AIMCO OP
acquires such property from the Sellers, AIMCO OP discovers a breach of a
representation relating to title, environmental matters, financial statements or
structural integrity or if AIMCO OP discovers a material tax liability or a
circumstance that jeopardizes REIT status, or an extraordinary partnership issue
relating to such acquired property, then AIMCO OP may put to the Sellers the
interests acquired from the Sellers (the "Put"). The Put will be AIMCO's sole
remedy with respect to a breach of any representation, or the determination of a
material tax liability, with respect to the properties listed on Schedule 1 or
the interests related thereto.
(e) AIMCO will purchase all of the out standing capital stock of HPI
for $3.52 million.
<PAGE> 7
Demeter Holdings Corporation
Phemus Corporation
Capricorn Investors, L.P.
February 13, 1997
Page 7
Within 60 days after such purchase, AIMCO may require the Sellers to assume all
liabilities of HPI in consideration for an assignment of all of HPI's assets.
3. C PROPERTIES JOINT VENTURE. Subject to any rights of first refusal of
NHP, AIMCO OP and the Sellers will form a joint venture (the "C Properties Joint
Venture"). The C Properties Joint Venture will be organized as a Delaware
limited partnership in which AIMCO, on one hand, and the Sellers, on the other
hand, will have equal (50/50) ownership interests and control rights.
(a) In the event of a Merger, or if AIMCO OP otherwise owns the Great
Atlantic property, AIMCO OP will contribute to the C Properties Joint Venture
the Great Atlantic property currently owned by NHP, valued at $13,700,000. Upon
any contribution of Properties listed on Schedule 3 or 4, AIMCO OP and the
Sellers will contribute cash to, or receive distributions from, the C Properties
Joint Venture to maintain their respective 50% interests. The Sellers will
contribute to the C Properties Joint Venture all general and limited partnership
interests, loans and other interests in the entities that own the properties set
forth on Schedule 3 hereto, valued as set forth on Schedule 3.
(b) AIMCO will have the option to require that the Sellers contribute
to the C Properties Joint Venture all of their interests in the entities that
own the properties set forth on Schedule 4 hereto.
(c) AIMCO and the Sellers will promptly and diligently negotiate in
good faith a definitive C Properties Joint Venture Agreement consistent with the
terms of this letter agreement which will contain representations, warranties,
covenants and conditions customary for transactions of this type.
<PAGE> 8
Demeter Holdings Corporation
Phemus Corporation
Capricorn Investors, L.P.
February 13, 1997
Page 8
4. SALE OF 25% INTEREST IN AFFORDABLE PROPERTIES TO AIMCO.
(a) Subject to any rights of first refusal of NHP, the Sellers will
sell to AIMCO a 25% interest in the entities which will hold (indirectly) only
the properties listed on Schedule 5 (the "Affordable Properties"). AIMCO will
purchase the interests in the entities holding the Affordable Properties for a
cash purchase price equal to $3,437,500.
(b) AIMCO and the Sellers will promptly and diligently negotiate in
good faith a definitive Purchase Agreement consistent with the terms of this
letter agreement. No representations or warranties will be given with respect
to the Affordable Properties by the Sellers.
5. MERGER OR EXCHANGE OFFER. AIMCO will promptly propose a merger
agreement with NHP pursuant to which NHP and a wholly owned subsidiary of AIMCO
would merge (the "Merger"). In the Merger, NHP stockholders would receive at
least $2O of AIMCO Stock for each share of NHP Stock owned at the effective time
of the Merger (plus, if the Spin-Off has not occurred, a share of NFS). For
this purpose, AIMCO Stock will be valued at the Market Price. AIMCO will use
its best efforts to cause the Spin-Off to occur before or contemporaneously with
the Merger or the Exchange offer. If the NHP Board of Directors or the
stockholders of NHP fail to approve the Merger, or if the Merger is not
consummated for any reason, AIMCO will within one year after the date hereof,
offer (the "Exchange Offer") to acquire all outstanding shares of NHP Stock for
$2O of AIMCO Stock (valued at its Market Price). AIMCO's obligation to issue
AIMCO Stock pursuant to this paragraph will be subject to obtaining any AIMCO
shareholder approvals necessary to issue such AIMCO Stock and comply with the
requirements of the NYSE. AIMCO will use its best efforts to obtain such AIMCO
shareholder approval. The $20 per share purchase price set forth above shall be
increased
<PAGE> 9
Demeter Holdings Corporation
Phemus Corporation
Capricorn Investors, L.P.
February 13, 1997
Page 9
by $3.05 per share if the record date for the Spin-Off has not occurred as of
the effective date of the Merger or the date of consummation of the Exchange
offer.
6. FREE CASH FLOW. The amount, if any, by which (i) NHP's earnings less
cash taxes, cash interest and $500,000 per month ("Free Cash Flow"), for the
period from February 1, 1997 until the earlier of the effective date of the
Spin-Off, the effective date of the Merger or the date of consummation of the
Exchange offer, as the case may be, exceeds (ii) NHP's severance costs,
transaction costs and transition costs associated with the Merger or the
Exchange offer, prior to the Spin-Off, the effective time of the Merger or the
consummation of the Exchange Offer, as the case may be, shall be contributed to
NFS and included in the Spin-Off.
7. CERTAIN CONDITIONS. AIMCO's obligations under paragraphs 1-5, 10 and
16 of this letter agreement are subject to the approval of AIMCO's Board of
Directors. AIMCO's Board of Directors will meet to consider and vote on the
transactions and obligations under paragraphs 1-5, 10 and 16 as soon as possible
and, in any event, not later than February 20, 1997. The Sellers' obligations
under this letter agreement (other than under paragraph 11) are subject to their
receipt, by February 28, 1997. of advice from counsel to AIMCO that the
transactions contemplated hereby will not result in AIMCO not qualifying as a
real estate investment trust under Federal tax laws.
8. AUTHORITY OF AIMCO. AIMCO represents and warrants to the Sellers that:
(a) it has the power and authority to execute and deliver this letter agreement
and to perform its obligations hereunder, subject to the approval of its Board
of Directors; and (b) this letter agreement has been duly executed and delivered
by it and, assuming this letter agreement is a binding obligation of the
Sellers, this letter agreement constitutes a valid and binding obligation of it,
enforceable against it in accordance with its terms.
<PAGE> 10
Demeter Holdings Corporation
Phemus Corporation
Capricorn Investors, L.P.
February 13, 1997
Page 10
9. AUTHORITY OF SELLERS. Each of the Sellers represents and warrants to
AIMCO that: (a) it has the power and authority to execute and deliver this
letter agreement and to perform its obligations hereunder and no other corporate
or partnership proceedings on its part are necessary for the execution and
delivery of this letter agreement and the performance of its obligations
hereunder; and (b) this letter agreement has been duly executed and delivered by
it and, assuming this letter agreement is a binding obligation of AIMCO, this
letter agreement constitutes a valid and binding obligation of it, enforceable
against it in accordance with its terms.
10. CLOSING. AIMCO and the Sellers shall use their best efforts to
consummate the Stock Purchase and the transactions contemplated by paragraphs 2,
3 and 4 as soon as practicable after all necessary consents and approvals have
been obtained.
11. EXCLUSIVE DEALING. Until the execution of the Stock Purchase
Agreement or the earlier termination of this letter agreement pursuant to
paragraph 13, (a) the Sellers will not, directly or indirectly, solicit or
entertain offers from, negotiate with or in any manner encourage, accept or
consider any proposal of any person other than AIMCO relating to an acquisition
of their shares of NHP Stock, their interests in the Real Estate Companies (as
defined in NHP's Annual Report on Form 10-K for the year ended December 31,
1995) or the properties listed on Schedules 1 through 5 hereto, in whole or in
part, whether directly or indirectly, through purchase, merger, consolidation or
otherwise (whether in a single transaction or a series of related transactions)
and (b) the Sellers will immediately notify AIMCO regarding any contact between
the Sellers or their respective representatives and any other person regarding
any such offer or proposal or any related inquiry.
12. NO EXTRAORDINARY TRANSACTIONS. Until the execution of the Stock
Purchase Agreement or the earlier
<PAGE> 11
Demeter Holdings Corporation
Phemus Corporation
Capricorn Investors, L.P.
February 13, 1997
Page 11
termination of this letter agreement pursuant to paragraph 13, the Sellers shall
not vote their shares of NHP Stock in favor of or consent in writing to any
action by NHP that might impede or delay the transactions contemplated hereby or
impair the value of such transactions to AIMCO.
13. TERMINATION. This letter agreement may be terminated: (a) by mutual
agreement of AIMCO and the Sellers; (b) by AIMCO if any of the Sellers commits a
material breach of this letter agreement; (c) by any of the Sellers if AIMCO
commits a material breach of this letter agreement; or (d) by AIMCO or the
Sellers if AIMCO's Board of Directors fails to approve this letter agreement by
February 20, 1997.
14. DISCLOSURE. Except as and to the extent required by law, without the
prior written consent of the other parties, neither AIMCO nor any Seller will,
and each will direct its representatives not to make, directly or indirectly,
any public comment, statement, or communication with respect to, or otherwise to
disclose or to permit the disclosure of the existence of discussions regarding,
a possible transaction between AIMCO and the Sellers or any of the terms,
conditions, or other aspects of the transaction proposed in this letter. If
AIMCO or one of the Sellers is required by law to make any such disclosure, it
must first provide to the other parties the content of the proposed disclosure,
the reasons that such disclosure is required by law, and the time and place that
the disclosure will be made.
15. COSTS. AIMCO and each Seller will be responsible for and bear all of
its own costs and expenses (including any broker's or finder's fees and the
expenses of its representatives) incurred at any time in connection with
pursuing or consummating the transactions contemplated by this letter agreement.
Notwithstanding the preceding sentence, AIMCO will pay one-half and the Sellers,
collectively, will pay one-half of all HSR Act filing fees. AIMCO will pay up
to $350,000 to Demeter, Phemus and
<PAGE> 12
Demeter Holdings Corporation
Phemus Corporation
Capricorn Investors, L.P.
February 13, 1997
Page 12
Capricorn as reimbursement of expenses incurred by them in connection with the
transactions contemplated by paragraphs 2, 3 and 4.
16. CONSENTS AND APPROVALS. AIMCO and each Seller will cooperate with
each other and proceed, as promptly as is reasonably practical, to prepare and
to file the notifications required by the HSR Act and to seek any necessary
approvals from HUD and any other governmental authorities. AIMCO and the
Sellers shall request early termination of the waiting period under the HSR Act
and shall use their best efforts to obtain clearance or authorization of the
Stock Purchase under the HSR Act.
17. ENTIRE AGREEMENT. This letter agreement constitutes the entire
agreement between AIMCO and the Sellers, and supersedes all prior oral or
written agreements, understandings, representations and warranties, and courses
of conduct and dealing between AIMCO and the Sellers on the subject matter
hereof. Except as otherwise provided herein, this letter agreement may be
amended or modified only by a writing executed by all of the parties.
18. GOVERNING LAW. This letter agreement will be governed by and
construed under the laws of the State of Delaware without regard to conflicts of
laws principles.
19. NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by overnight
delivery service or mailed by registered or certified mail (return receipt
requested) to the parties hereto at the addresses set forth on the first page of
this letter agreement (or at such other address for a party as shall be
specified by like notice).
20. TIME IS OF THE ESSENCE. Time is of the essence of this letter
agreement.
<PAGE> 13
Demeter Holdings Corporation
Phemus Corporation
Capricorn Investors, L.P.
February 13, 1997
Page 13
If you are in agreement with the foregoing, please sign and return one copy
of this letter agreement which will thereupon constitute our agreement with
respect to the subject matter hereof.
Very truly yours,
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
<TABLE>
<CAPTION>
By: /s/ Terry Considine
-------------------
<S> <C>
Terry Considine
President
</TABLE>
<PAGE> 14
Demeter Holdings Corporation
Phemus Corporation
Capricorn Investors, L.P.
February 13, 1997
Page 14
Accepted and agreed to as of the date first set forth above.
DEMETER HOLDINGS CORPORATION
<TABLE>
<CAPTION>
By: /s/ Michael R. Eisenson
-----------------------
<S> <C>
Michael R. Eisenson
Authorized Signatory
</TABLE>
PHEMUS CORPORATION
<TABLE>
<CAPTION>
By: /s/ Michael R. Eisenson
-----------------------
<S> <C>
Michael R. Eisenson
Authorized Signatory
</TABLE>
CAPRICORN INVESTORS, L.P.
<TABLE>
<CAPTION>
By: Capricorn Holdings, G.P.,
its General Partner
By: Winokur Holdings, Inc.,
its General Partner
By: /s/ Herbert S. Winokur, Jr.
---------------------------
<S> <C>
Herbert S. Winokur, Jr.
President
</TABLE>
<PAGE> 15
NHP PARTNERS
SCHEDULE 1
AIMCO PURCHASE 100%
<TABLE>
<CAPTION>
Property
Name Location Units Price Debt Equity Total NHP
- -------- -------- ----- ----------- ----------- ----------- -----------
A. NHP Equity, Agreed Upon Prices
<S> <C> <C> <C> <C> <C> <C>
One
Lytle
Place Cincinnati 231 17,944,474 12,845,800 4,940,051 4,940,051
100
Forest
Place Oak Park, 234 21,124,906 15,954,148 4,959,509 1,160,514
Grosvenor Rockville,
House MD 405 43,791,213 32,500,000 10,853,300 1,138,118
Elm Creek Elmhurst, Il 372 33,591,094 30,785,000 2,470,183 1,136,284
Hamilton Plantation,
House FL 271 24,284,476 21,481,000 2,560,631 1,280,315
Foxchase Alexandria,
VA 2,113 110,268,270 69,540,161 39,625,426 5,384,309
Greens of Naperville,
Naper- IL
ville 400 19,609,880 16,700,000 2,713,781 1,963,781
Shadowood Chapel Hill,
NC 336 15,176,680 10,306,066 4,718,847 1,493,181
Arbor Lithonia,
Crossing GA 240 9,826,410 8,000,000 1,728,146 1,728,146
Point Lenexa,
West KS 172 6,255,720 5,770,000 423,163 425,035
Victoria Victoria,
Station TX 224 5,397,690 3,488,886 1,854,827 923,363
Trinity Irving, TX 496 13,885,700 13,140,000 606,843 606,843
Lakehaven Carol Stream,
I & II Il 492 22,259,900 19,132,000 2,905,301 492,847
Eagle Witchita,
Rock KS
Village 354 14,496,260 10,028,793 4,322,504 331,589
Well- Columbia,
spring SC 232 8,845,160 8,000,000 756,708 529,402
Pheasant Pittsburgh,
Ridge CA 242 8,548,330 7,750,000 712,847 714,341
Ridgewood St. Peters,
Village MO 252 7,564,760 7,450,000 39,112 36,335
Wyntre West Chester,
Brook PA 212 7,289,438 6,870,000 346,544 213,479
----------
Total Schedule I 7,278 390,160,360 299,741,854 86,537,724 24,497,934
==========
</TABLE>
<PAGE> 16
NHP PARTNERS
SCHEDULE 2
AIMCO PURCHASE 100%
<TABLE>
<CAPTION>
Property
Name Location Units Price Debt Equity Total NHP
- -------- -------- ----- ----------- ----------- ----------- -----------
A. No NHP Equity, AIMCO Purchase Option
<S> <C> <C> <C> <C> <C> <C>
Sandpiper Boyton
Cove * Beach, FL 416 21,721,643 21,721,643 0 0
West Columbia,
Winds SC 100 2,607,784 2,607,784 0 0
Burkshire Arlington,
Commons VA 360 22,330,000 22,330,000 0 0
Chestnut Middletown,
Hill CT 314 17,280,000 17,280,000 0 0
The Washington,
Consulate DC 269 13,654,639 13,654,639 0 0
Evanston Evanston,
Square Il 189 15,841,403 15,841,403 0 0
Lake Austell,
Crossing GA 300 11,739,960 11,739,960 0 0
Tara Jonesboro,
Bridge GA 220 7,775,546 7,775,546 0 0
Temple
Heritage Terrace,
Village FL 252 5,266,050 5,266,050 0 0
Plantation Jackson-
ville,FL 282 7,450,969 7,450,969 0 0
Casa Boca Raton,
del Mar FL 214 14,365,000 14,365,000 0 0
7400 Philadelphia,
Roosevelt PA 196 4,827,490 4,827,490 0 0
Ivanhoe Pittsburgh,
Ridge PA 327 8,275,411 8,275,411 0 0
Carlton Phila-
delphia,PA 163 3,437,161 3,437,161 0 0
River Loft Phila-
delphia, PA 198 5,915,470 5,915,470 0 0
Subtotal 3,800 98,549,099 98,549,099 0 0
</TABLE>
* AIMCO has a 60 day option to buy NHP's interest for zero, subject to existing
debt, release of NHP's guaranty and with no yield maintenance obligation to NHP
related to paying off the existing first mortgage debt. Thereafter, the property
is subject to sale, with AIMCO retaining a right of first refusal to match any
offer.
<TABLE>
<CAPTION>
<S> <C>
---------
Total Schedule 2 0
=========
</TABLE>
<PAGE> 17
NHP PARTNERS
SCHEDULE 3
JOINT VENTURE
AIMCO PURCHASES 50%
<TABLE>
<CAPTION>
Property
Name Location Units Price Debt Equity Total NHP
- -------- -------- ----- ----------- ----------- ----------- -----------
A. NHP Equity, Agreed Upon Prices
<S> <C> <C> <C> <C> <C> <C>
Hickory Frederick
Hill MD 162 4,431,100 4,300,000 86,789 86,789
Eaglewood Memphis
Woods TN 584 19,233,482 14,500,000 3,042,632 108,309
TAHFLP Texas 2,725 34,827,535 26,184,067 8,295,189 8,295,189
SAHFLP Texas,
New
Mexico 1,817 32,861,479 25,304,061 7,228,803 1,947,401
Latrobe Washington
DC 176 8,685,429 5,997,561 2,601,013 2,601,013
----------
Total Schedule 3 5,464 100,039,024 76,285,689 21,254,426 13,038,701
==========
50% 6,519,351
==========
</TABLE>
<PAGE> 18
NHP PARTNERS
SCHEDULE 4
JOINT VENTURE
AIMCO PURCHASE 50%
<TABLE>
<CAPTION>
Property
Name Location Units Price Debt Equity Total NHP
- -------- -------- ----- ----------- ----------- ----------- -----------
A. No NHP Equity, AIMCO Purchase Option
<S> <C> <C> <C> <C> <C> <C>
Standart Auburn
Woods (upstate),
NY 330 5,243,040 5,243,040 0 0
West Lake Indiana-
Arms polis 1,381 20,131,680 20,131,680 0 0
Manor at Reno, NV 91 3,163,376 3,163,376 0 0
Lakeside
Old Farm Lexington,
KY 330 11,232,250 11,232,250 0 0
Hunter's Baltimore,
Crossing MD 168 4,458,244 4,458,244 0 0
Lakeview Colonial
Terrace Heights,
VA 76 1,109,986 1,109,986 0 0
Cross Albany,
Creek GA 200 2,589,381 2,589,381 0 0
Hunters Columbus,
Run GA 160 3,189,055 3,189,055 0 0
Lake Orlando,
Conway FL 168 2,982,038 2,982,038 0 0
Woods
Tall Tree Valdosta,
GA 148 1,867,375 1,867,375 0 0
Chateau Fond du
Gardens Lac, WI 82 0 0
Country W.
Villa Lafayette,
IN 92 0 0
Country- Columbus,
brook OH 200 3,309,175 3,309,175 0 0
Kemar Frankfort,
IN 80 0 0
Lakeland Jackson,
East MS 144 3,092,087 3,092,087 0 0
Marten Indiana-
Manor polis 144 1,495,547 1,495,547 0 0
East
The Club Lexington,
NC 87 0 0
Meadows Newburgh,
IN 150 871,145 871,145 0 0
Metro- Atlantic
politan City 201 1,949,736 1,949,736 0 0
Scotch Phila-
Lane delphia 300 6,910,132 6,910,132 0 0
Subtotal 4,532 73,594,247 73,594,247 0 0
C. Great Atlantic* 13,720,000
----------
Total Schedule 4 13,720,000
==========
50% 6,860,000
==========
</TABLE>
*Subject to completion of merger.
<PAGE> 19
NHP PARTNERS
SCHEDULE 5
AFFORDABLE AND OTHER
AIMCO PURCHASES 25%
<TABLE>
<CAPTION>
Property
Name Location Units Price Debt Equity Total NHP
- -------- -------- ----- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
A. Affordable
Properties 50,309 20,000,000
</TABLE>
<TABLE>
<CAPTION>
B. Other Affordable Properties
<S> <C> <C> <C> <C> <C> <C>
Queenstown MD 1,052 0 0 0
Sun Ridge Blandens-
burg, MD 647 0 0 0
New Chicago
Vistas I 148 0 0 0
New Chicago
Vistas II 154 0 0 0
Palmer Chicago
Square 160 0 0 0
Plaze on Chicago
the Park 151 0 0 0
North Cincinnati
River
Place 120 0 0 0
</TABLE>
<TABLE>
<CAPTION>
C. Guilford
<S> <C> <C> <C> <C> <C> <C>
Guilford AL,FL,
VA,NC 2,995 65,804,000 1,350,000
</TABLE>
<TABLE>
<CAPTION>
D. St. Louis
<S> <C> <C> <C> <C> <C> <C>
Caroline St. Louis 112
Columbus
Square I St. Louis 115
Columbus
Square II St. Louis 217
Debaliviere
I St. Louis 146
Debaliviere
II St. Louis 242
Debaliviere
III St. Louis 132
Debaliviere
IV St. Louis 219
Debaliviere
V St. Louis 309
Subtotal 1,492 0 TBD 0 0
</TABLE>
*NHP is negotiating with the lender to payoff the debt at a discount, with the
LP's, NHP and AIMCO to contribute additional capital as needed in an amount
proportionate to their ownership.
<TABLE>
<CAPTION>
E. Hall Portfolio
<S> <C> <C> <C> <C> <C> <C>
Baybentree Houston 268 5,643,300 5,643,300 0 0
Carriage- Indiana-
tree polis 136 3,635,578 3,635,578 0 0
Centertree Phoenix 349 1,099,253 1,099,253 0 0
Cornerstone Huntsville,
TX 84 2,259,614 2,259,614 0 0
Dovetree Tyler,TX 200 3,098,588 3,098,588 0 0
Forestree Webster,TX 324 6,573,411 6,573,411 0 0
Gates of Arlington,
Arlington VA 465 11,326,600 11,326,600 0 0
Gatewood Albuquerque 324 8,238,012 8,238,012 0 0
Greentree Indiana-
polis 456 6,951,292 6,951,292 0 0
Heather- Scottsdale
tree I 121 2,951,051 2,951,051 0 0
Heather- Scottsdale
tree II 123 2,787,276 2,787,276 0 0
The Lakes Albu-
querque 299 9,894,230 8,984,230 0 0
Lauretree Columbus,
OH 76 1,247,991 1,247,991 0 0
Los Altos Albu-
Tower querque 186 6,399,219 6,399,219 0 0
Mill Creek Clio,MI 174 2,594,711 2,594,711 0 0
Northcross Austin 276 7,716,127 7,716,127 0 0
Oaktree Indiana-
polis 396 2,639,691 2,639,691 0 0
Paradise Corpus
Bay Christi 782 13,804,389 13,804,389 0 0
Parktree Tempe, AZ 110 1,500,567 1,500,567 0 0
Parkview
Tower Warren,MI 158 4,016,752 4,016,752 0 0
Pine Creek
Manor Clio, MI 105 1,526,314 1,526,314 0 0
Summertree Scottsdale 193 3,707,585 3,707,585 0 0
Summittree Nashville,
TN 244 5,024,305 5,024,305 0 0
Sunridge Albu-
Village querque 320 10,658,877 10,658,877 0 0
Three Albu-
Fountains querque 410 13,407,967 13,407,967 0 0
The Villas Albu-
querque 198 2,065,065 2,065,065 0 0
Villatree Tempe 150 3,465,010 3,465,010 0 0
Whisper-
Tree I Houston 248 4,600,725 4,600,725 0 0
Whisper-
Tree II Houston 256 4,567,584 4,567,584 0 0
Windtree Port Richey,
(FL) FL 242 3,853,235 3,853,235 0 0
Windtree Midland,
(TX) TX 232 1,346,249 1,346,249 0 0
Woodcreek Huntsville,
TX 196 4,055,937 4,055,937 0 0
Mezzanine debt 20,000,000 20,000,000 0 0
Subtotal Hall 8,101 182,656,505 182,656,505 0 0
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
F. Lease Liability (9,600,000)
G. Oxford Notes 2,000,000
H. Hall Notes 0
-----------
Total Schedule 5 13,750,000
===========
AIMCO 25% 3,437,500
===========
</TABLE>
<PAGE> 1
EXHIBIT 99.2
February 19, 1997
VIA FACSIMILE
(703) 394-2980
Mr. J. Roderick Heller, III
Chairman of the Board
NHP Incorporated
8065 Leesburg Pike, Suite 400
Vienna, VA 22182-2738
Dear Rod:
We are pleased to present the following proposal for your consideration:
Apartment Investment and Management Company ("AIMCO") proposes a transaction
with NHP Incorporated ("NHP") in which NHP would merge with AIMCO or one of its
subsidiaries (the "merger"). In the Merger, NHP stockholders (other than AIMCO)
would receive $20 of AIMCO Class A Common stock (valued for such purpose at
$26.75 per share) for each share of NHP common stock.
The Merger would be conditioned on the prior distribution (the "Spin-Off") of
all of the outstanding capital stock of NHP's mortgage subsidiary (NHP Financial
Services, Inc. or Washington Mortgage Financial Group, Ltd.) to NHP
stockholders. Alternatively, AIMCO may elect to waive such condition and either
(i) increase the Merger consideration to NHP stockholders by $3.05 per share of
NHP common stock, or (ii) subsequently distribute shares in such subsidiary to
those persons who were NHP stockholders immediately prior to the Merger.
The amount, if any, by which (I) NHP's Free Cash Flow (as defined below) for the
period from February 1, 1997 until the earlier of the effective date of the
Spin-Off or the Merger, exceeds (ii) NHP's severance costs, transaction costs
and transition costs in respect of such transactions, will be contributed to
the mortgage subsidiary and included in the Spin-Off. "NHP's Free Cash Flow"
for any period means NHP's EBITDA for such period less (a) the amount of cash
payments made in respect of taxes and interest during such period, and
(b) $500,000 for each month (or ratable portion thereof) included in such
period.
Although this proposal has been approved by AIMCO's Board of Directors subject
to the conditions set forth below, it is, of course, subject to stockholder
approval, the approval of all appropriate governmental and regulatory
authorities, completion of our due diligence, as well as
<PAGE> 2
J. Rod Heller, III
February 19, 1997
Page 2
the execution of a definitive agreement that would contain representations,
warranties, covenants, conditions and other terms customary for a transaction of
this type. The Merger would also be conditioned on the transaction not having
any adverse consequences with respect to AIMCO's status as a real estate
investment trust under Federal tax laws.
We are very interested in the possibility of a transaction with NHP and are
prepared to move promptly and expeditiously. We believe our proposal presents an
attractive opportunity for NHP and its investors. We look forward to your
response to this proposal and are prepared to meet with you or other
representatives of NHP at any time to discuss any aspect of it. I can be reached
at (303) 691-4330.
Sincerely yours,
Terry Considine
Chairman and CEO
cc: M. Eisenson
H. Winokur
P. Kompaniez
<PAGE> 1
EXHIBIT 99.3
NHP INCORPORATED ANNOUNCES HARVARD'S AGREEMENT
TO SELL OWNERSHIP AND RECEIPT OF A MERGER
PROPOSAL FROM AIMCO MULTIFAMILY REIT
<TABLE>
<S> <C>
Contact: Ann Torre Grant
EVP and CFO
(703) 394-2420
[email protected]
</TABLE>
VIENNA, VA, FEBRUARY 20, 1997/PRNewswire/--NHP Incorporated (NHP) of Vienna, VA
announced today that Apartment Investment and Management Company (AIMCO), a real
estate investment trust (REIT) whose shares are traded on the New York Stock
Exchange (AIV-NYSE), has entered into a letter agreement to acquire all the
shares of NHP common stock owned by Demeter Holdings Corporation (Demeter), an
affiliate of Harvard Private Capital Group, Inc., and Capricorn Investors, L.P.
(Capricorn) for a price of $20 per share in AIMCO stock, plus retention by
Demeter and Capricorn of Washington Mortgage Financial Group, NHP's wholly-owned
Financial Services Division, through a spin-off on a pro-rata basis with all
current NHP shareholders. Demeter and Capricorn own in the aggregate
approximately 54.9% of NHP's outstanding shares. Although there can be no
assurance of the price at which the shares of Washington Mortgage Financial
Group will trade, the AIMCO-Demeter agreement provides for a further payment of
$3.05 per share by AIMCO to Demeter and Capricorn if the spin-off of Washington
Mortgage does not occur. The conversion ratio for the stock for stock
transaction would be 0.7476 shares of AIMCO stock for each NHP share, based on
an agreed price for AIMCO stock of $26.75 per share (AIMCO's stock closed
yesterday at $26.38 per share). Demeter will receive cash for certain of its
shares since no single shareholder of AIMCO can own more than 8.7% of its
outstanding shares. The acquisition by AIMCO of Demeter and Capricorn's stock
is subject to certain conditions and is expected to close on or about April 1,
1997.
NHP also announced that it has received a merger proposal from AIMCO, pursuant
to which AIMCO would acquire the balance of the outstanding shares of NHP on the
same terms agreed to by Harvard and Capricorn. It is not yet known whether any
shares received would be tax-free to NHP's shareholders. Closing of AIMCO's
purchase of the Demeter and Capricorn shares is not conditioned on the
acceptance by NHP of AIMCO's merger proposal.
AIMCO also has agreed to acquire certain multifamily real estate interests of
NHP Partners, Inc. (NHP Partners), an entity also controlled by Demeter and
Capricorn. Closing of this proposed acquisition may be subject to NHP's right
of first refusal pursuant to intercompany agreements between NHP and NHP
Partners, but is independent of AIMCO's purchase of the Demeter and Capricorn
shares and the success of AIMCO's merger proposal.
The NHP Board of Directors has formed a special committee of three independent
directors to consider the anticipated AIMCO proposal and plans to engage an
investment banking firm to assist in evaluating the merger proposal. The
members of the committee are Richard S. Bodman, Chairman of AT&T Ventures, John
W. Creighton, Jr., Chief Executive Officer of The Weyerhaeuser Company, and
Lloyd N. Cutler, Senior Counsel of the law firm of Wilmer, Cutler & Pickering.
The Company's response to the AIMCO proposal is not expected for several weeks.
NHP provides a broad array of real estate services including property management
of over 133,000 apartments nationwide, asset management, equity investments,
mortgage financing and servicing through Washington Mortgage Financial Group, as
well as a growing group of related services including purchasing, risk
management and home health care. NHP, which has approximately 13,000,000 fully
diluted shares outstanding, went public in August, 1995 at $13.00 per share.
RELEASE 97-5
<PAGE> 1
EXHIBIT 99.4
NHP RECEIVES EXPRESSION OF INTEREST
FROM INSIGNIA FINANCIAL
<TABLE>
<S> <C>
Contact: Ann Torre Grant
EVP and CFO
(703) 394-2420
[email protected]
</TABLE>
VIENNA, VA, FEBRUARY 21, 1997/PRNewswire/--NHP Incorporated ("NHP") announced
this afternoon that it has received a letter from Insignia Financial Group, Inc.
("Insignia"), stating that Insignia wishes to make an offer to purchase 100% of
the stock of NHP in a tax-free transaction at a price higher than the offer,
announced yesterday, from Apartment Investment and Management Company ("AIMCO").
Insignia's letter does not constitute an offer and does not state a price or
specify other terms and conditions. If Insignia does make an offer, NHP will
evaluate its terms, feasibility, and likelihood of closing, in light of the best
interests of NHP's stockholders.
As announced yesterday, AIMCO has entered into a letter agreement to
acquire all of the shares of NHP common stock owned by Demeter Holdings
Corporation ("Demeter"), an affiliate of Harvard Private Capital Group, Inc.,
and Capricorn Investors, L.P. ("Capricorn"). Demeter and Capricorn own in the
aggregate approximately 54.9% of NHP's outstanding shares.
RELEASE 97-6
<PAGE> 1
EXHIBIT 99.5
NHP INCORPORATED RECEIVES
SECOND LETTER FROM INSIGNIA
<TABLE>
<S> <C>
Contact: Ann Torre Grant
EVP and CFO
(703) 394-2420
[email protected]
</TABLE>
VIENNA, VA, FEBRUARY 27, 1997/PRNewswire/--NHP Incorporated (NHP) of Vienna, VA
announced today that Insignia Financial Group, Inc. has sent NHP a letter
stating that it is prepared to offer $24 per share -- 50% cash and 50% in
Insignia Class A Common Stock -- for all outstanding stock in NHP, including the
stock held by Demeter Holdings Corporation and Capricorn Investors, L.P.
Insignia stated its expectation that the stock portion of a transaction would be
tax-free to NHP shareholders. The offer that Insignia stated it wishes to make
does not contemplate a spin-off of NHP's Washington Mortgage Financial Group
subsidiary.
NHP is prepared to evaluate the terms, feasibility and likelihood of
closing of any offers received, in light of the best interests of stockholders.
RELEASE 97-7
