Agreement and Plan of Merger
Exhibit
10.1
Agreement
and Plan of Merger
AGREEMENT AND PLAN OF MERGER (this
“Agreement”), dated as of
September 13, 2010, by and among CONSOLIDATED
CAPITAL INSTITUTIONAL PROPERTIES, LP, a Delaware limited
partnership (“CCIP”), AIMCO CCIP MERGER SUB
LLC, a Delaware limited liability company (the “Aimco
Subsidiary”), and AIMCO PROPERTIES, L.P., a Delaware
limited partnership (“Aimco OP”).
WHEREAS, ConCap Equities, Inc., the general partner of CCIP
(“ConCap”) and owner of the Series A GP
Interest of CCIP, has determined that the Merger (as defined
below) of the Aimco Subsidiary with and into CCIP, with CCIP as
the surviving entity, is advisable and in the best interests of
CCIP and its partners; and
WHEREAS, Aimco OP, the sole member of the Aimco Subsidiary, has
determined that the Merger of the Aimco Subsidiary with and into
CCIP, with CCIP as the surviving entity, is advisable and in the
best interests of the Aimco Subsidiary and its member; and
WHEREAS the Board of Directors of AIMCO-GP, Inc., the general
partner of Aimco OP (“AIMCO-GP”), has
determined that the Merger of the Aimco Subsidiary with and into
CCIP, with CCIP as the surviving entity, is advisable and in the
best interests of Aimco OP and its partners; and
WHEREAS, the parties desire to enter this Agreement to evidence
the terms, provisions, representations, warranties, covenants
and conditions upon which the Merger will be consummated.
NOW, THEREFORE, in consideration of the mutual agreements and
covenants set forth herein, and for other good and valuable
consideration, the adequacy, sufficiency, and receipt of which
are hereby acknowledged, CCIP, the Aimco Subsidiary and Aimco OP
hereby agree as follows:
Section 1. The
Merger. Subject to the terms and conditions set
forth herein, the Aimco Subsidiary shall be merged with and into
CCIP (the “Merger”), and CCIP shall be the
surviving entity of the Merger (the “Surviving
Entity”). The Merger will have the effects specified in
this Agreement,
section 17-211
of the Delaware Revised Uniform Limited Partnership Act, as
amended (the “DRULPA”), and
section 18-209
of the Delaware Limited Liability Company Act, as amended (the
“DLLCA”).
Section 2. General
Partner. ConCap will be the sole general partner
of the Surviving Entity.
Section 3. Certificate. As
soon as practicable after the approval of this Agreement by a
majority in interest of each class or series of limited
partnership interests of CCIP, CCIP shall cause to be filed a
certificate of merger with respect to the Merger (the
“Certificate of Merger”) with the Office of the
Secretary of State of the State of Delaware pursuant to
section 17-211
of the DRULPA and
section 18-209
of the DLLCA. The Merger shall become effective at such time as
the Certificate of Merger has been accepted for record by the
Secretary of State of the State of Delaware (the
“Effective Time”).
Section 4. Limited
Partnership Agreement. The agreement of limited
partnership of CCIP as in effect immediately prior to the
consummation of the Merger (the “Partnership
Agreement”), shall be the agreement of limited
partnership of the Surviving Entity until thereafter amended in
accordance with the provisions thereof and applicable law. The
general partner and each limited partner of the Surviving Entity
shall have the rights under, be bound by and be subject to the
terms and conditions of, the Partnership Agreement, as a general
partner or limited partner, as applicable.
Section 5. Treatment
of Interests in CCIP.
(a) Limited Partners’ Interests.
(i) In connection with the Merger and in accordance with
the procedures set forth in Section 5(a)(iii) hereto, each
Series A Unit of CCIP outstanding immediately prior to the
Effective Time and held by limited partners of CCIP, except
Series A Units held by limited partners who have perfected
their appraisal rights pursuant to Exhibit A hereto,
shall be converted into the right to receive, at the election of
the limited partner, either (x) $4.31 in cash (the
“Cash Consideration”) or (y) a number of
partnership common units of Aimco OP calculated by dividing
$4.31 by
the average closing price of Apartment Investment and Management
Company common stock, as reported on the NYSE, over the ten
consecutive trading days ending on the second trading day
immediately prior to the Effective Time (the
“OP Unit Consideration”, and, together
with the Cash Consideration, the “Merger
Consideration”).
(ii) Notwithstanding Section 5(a)(i), if Aimco OP
determines that the law of the state or other jurisdiction in
which a limited partner resides would prohibit the issuance of
partnership common units of Aimco OP in that state or
jurisdiction (or that the registration in that state or other
jurisdiction would be prohibitively costly), then such limited
partner will only be entitled to receive the Cash Consideration
for each Series A Unit.
(iii) Aimco OP shall prepare a form of election (the
“Election Form”) describing the Merger and
pursuant to which each limited partner of CCIP will have the
right to elect to receive either the Cash Consideration or the
OP Unit Consideration (subject to Section 5(a)(ii)).
Aimco OP shall mail or cause to be mailed an Election Form to
each limited partner, together with any other materials that
Aimco OP determines to be necessary or prudent, no later than
ten (10) days after the Effective Time. An election to
receive the Cash Consideration or the OP Unit Consideration
shall be effective only if a properly executed Election Form is
received by Aimco OP or its designees prior to 5:00 p.m.,
Eastern Time on the day that is thirty (30) days after the
mailing of such Election Form by Aimco OP. If a limited partner
fails to return a duly completed Election Form within the time
period specified in the Election Form, such holder shall be
deemed to have elected to receive the Cash Consideration. In
addition, each limited partner that resides in a state or other
jurisdiction that Aimco OP determines would prohibit the
issuance of partnership common units of Aimco OP (or in which
registration of in would be prohibitively costly) will be deemed
to have elected the Cash Consideration. CCIP, the Aimco
Subsidiary and Aimco OP agree that limited partners shall have
the right to revoke any election made in connection with the
Merger at any time prior to the expiration of the time period
stated in the Election Form. Aimco OP and ConCap, by mutual
agreement, shall have the right to make rules, not inconsistent
with the terms of this Agreement, governing the validity of
Election Forms and the issuance and delivery of the Merger
Consideration, as applicable.
(b) General Partner’s
Interests. Each Series A GP Interest of
CCIP outstanding immediately prior to consummation of the Merger
shall remain outstanding and unchanged, with all of the rights
set forth in the Partnership Agreement.
Section 6. Treatment
of Interests in Aimco Subsidiary. The entire
membership interest in the Aimco Subsidiary immediately prior to
the Effective Time shall be converted into 1,000 Series A
Units of the Surviving Entity.
Section 7. Appraisal
Rights. In connection with the Merger, the
holders of Series A Units of CCIP immediately prior to the
Merger shall have the appraisal rights set forth in
Exhibit A hereto.
Section 8. Covenants. Aimco
OP agrees to pay for, or reimburse CCIP for, all expenses
incurred by CCIP in connection with the Merger. Aimco OP agrees
to pay cash or issue and deliver common units of Aimco OP to the
former holders of Series A Units, in accordance with
section 5(a) of this Agreement.
Section 9. Conditions
to the Merger.
(a) The Merger shall not occur unless and until the Merger
has been approved or consented to by a majority in interest of
each class or series of limited partners of CCIP.
(b) Notwithstanding any provisions of this Agreement to the
contrary, none of the parties hereto shall be required to
consummate the transactions contemplated hereby if any
third-party consent, authorization or approval that any of the
parties hereto deem necessary or desirable in connection with
this Agreement, or the consummation of the transactions
contemplated hereby, has not been obtained or received.
Section 10. Tax
Treatment. The parties hereto intend and agree
that, for Federal income tax purposes, (i) any payment of
cash for Series A Units shall be treated as a sale of such
Series A Units by such holder and a purchase of such
Series A Units by Aimco OP for the cash so paid under the
terms of this Agreement in accordance with the guidelines set
forth in Treas. Reg.
Sections 1.708-1(c)(3)
and 1.708-1(c)(4), and (ii) each such holder of
Series A Units who receives cash explicitly agrees and
consents to such treatment. Furthermore, the parties hereto
intend and agree that, for Federal income tax purposes,
(x) any exchange of Series A Units for partnership
common units of Aimco OP under the terms of this Agreement shall
be treated in accordance with Sections 721 and 731 of the
2
Internal Revenue Code of 1986, as amended, and (y) each
such holder of Series A Units who accepts partnership
common units of Aimco OP explicitly agrees and consents to such
treatment. Any cash
and/or
partnership common units of Aimco OP to which a holder of
Series A Units is entitled pursuant to this Agreement shall
be paid only after the receipt of a consent from such holder
that, for Federal income tax purposes, the receipt of cash
and/or
partnership common units of Aimco OP shall be treated as
described in this Section 10.
Section 11. Further
Assurances. From time to time, as and when
required by the Surviving Entity or by its successors and
assigns, there shall be executed and delivered on behalf of the
Aimco Subsidiary such deeds and other instruments, and there
shall be taken or caused to be taken by the Aimco Subsidiary all
such further actions, as shall be appropriate or necessary in
order to vest, perfect or confirm, of record or otherwise, in
the Surviving Entity the title to and possession of all
property, interests, assets, rights, privileges, immunities,
powers, franchises and authority of the Aimco Subsidiary, and
otherwise to carry out the purposes of this Agreement, and the
officers and directors of ConCap are fully authorized in the
name and on behalf of Aimco Subsidiary or otherwise to take any
and all such action and to execute and deliver any and all such
deeds and other instruments.
Section 12. Amendment. Subject
to applicable law, this Agreement may be amended, modified or
supplemented by written agreement of the parties hereto at any
time prior to the consummation of the Merger with respect to any
of the terms contained herein.
Section 13. Abandonment. At
any time prior to consummation of the Merger, this Agreement may
be terminated and the Merger may be abandoned without liability
to any party hereto by any of the Aimco Subsidiary, Aimco OP or
CCIP, in each case, acting in its sole discretion and for any
reason or for no reason, notwithstanding approval of this
Agreement by any of the members of the Aimco Subsidiary, the
partners of CCIP or the general partner of Aimco OP.
Section 14. Governing
Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware,
without reference to the conflict of law provisions thereof.
Section 15. No
Third-Party Beneficiaries. No provision of this
Agreement is intended to confer upon any person, entity, or
organization other than the parties hereto any rights or
remedies hereunder, other than the appraisal rights given to
holders of Series A Units of CCIP pursuant to
Section 7.
3
IN WITNESS WHEREOF, CCIP, the Aimco Subsidiary and Aimco
OP have caused this Agreement to be signed by their respective
duly authorized officers as of the date first above written.
| By: |
ConCap Equities, Inc., its General Partner |
|
| By: |
/s/ Xxxx Xxxxxxx
|
Name: Xxxx Xxxxxxx
Title: Senior Vice President and Director
AIMCO CCIP MERGER SUB LLC
| By: |
Aimco Properties, L.P., its sole Member |
| By: |
AIMCO-GP, Inc. its General Partner |
|
| By: |
/s/ Xxxxx X. XxXxxxxxxx
|
Name: Xxxxx X. XxXxxxxxxx
Title: Senior Vice President
AIMCO PROPERTIES, L.P.
| By: |
AIMCO-GP, Inc., its General Partner |
|
| By: |
/s/ Xxxxx X. XxXxxxxxxx
|
Name: Xxxxx X. XxXxxxxxxx
Title: Senior Vice President
[Signature Page — Merger Agreement]
4
EXHIBIT A
Appraisal
Rights of Limited Partners
Capitalized terms used but not defined herein shall have the
respective meanings ascribed thereto in the Agreement and Plan
of Merger, dated as of September 13, 2010 (the
“Merger Agreement”), by and among Consolidated Capital
Institutional Properties, LP, a Delaware limited partnership
(“CCIP”), AIMCO CCIP Merger Sub LLC, a Delaware
limited liability company (the “Aimco Subsidiary”),
and AIMCO Properties, L.P., a Delaware limited partnership
(“Aimco OP”). In connection with the Merger, limited
partners of CCIP shall have the following appraisal rights:
(a) Any limited partner who holds Series A Units on
the effective date of the Merger who has not consented to the
merger (the “Nonconsenting Limited Partners”) and who
has otherwise complied with paragraph (b) hereof shall be
entitled to an appraisal by arbitration of the fair value of the
Nonconsenting Limited Partner’s Series A Units. This
arbitration shall be conducted in Denver, Colorado, in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association by a panel of three arbitrators selected
by Aimco OP. Any arbitration award shall be appealable in the
Federal District Court located in Denver, Colorado.
(b) Within 10 days after the effective date of the
Merger, Aimco OP shall notify each of the Nonconsenting Limited
Partners of the consummation of the Merger, the effective date
of the Merger and that appraisal rights are available for any or
all Series A Units held by Nonconsenting Limited Partners,
and shall include in such notice a copy of this Annex. Such
notice shall include an Election Form pursuant to which
Nonconsenting Limited Partners may elect an appraisal by
arbitration of the fair value of their Series A Units
pursuant to paragraph (a) hereof. Any limited partner who
holds Series A Units on the effective date of the Merger
and who has not consented to the Merger shall be entitled to
receive such notice and may, within 30 days after the date
of mailing of such notice (such 30th day being the
“Election Deadline”), demand from Aimco OP the
appraisal of his or her Series A Units by making the
appropriate election in the Election Form in accordance with the
instructions thereto. Each completed Election Form must be
delivered to the address, and within the time period, specified
in the instructions to the Election Form. If a Nonconsenting
Limited Partner fails to properly complete an Election Form or
return it to the correct address within the specified time
period, such Nonconsenting Limited Partner shall be deemed to
have elected not to seek an appraisal of his or her
Series A Units, and will be deemed to have elected the Cash
Consideration.
(c) At any time prior to the Election Deadline, any
Nonconsenting Limited Partner who has made a demand for
appraisal of his or her Series A Units shall have the right
to withdraw his or her demand for appraisal and to accept the
Cash Consideration payable pursuant to the Merger Agreement.
Nonconsenting Limited Partners who wish to withdraw their
demands must do so in writing delivered to Aimco Properties,
L.P.,
c/o Eagle
Rock Proxy Advisors, LLC, by mail at 00 Xxxxxxxx Xxxxx,
Xxxxxxxx, Xxx Xxxxxx, 00000, or by fax at
(000) 000-0000.
At any time prior to 20 days after the Election Deadline,
any Nonconsenting Limited Partner who has complied with the
requirements of subsections (a) and (b) hereof, upon
written request, shall be entitled to receive from Aimco OP a
statement setting forth the aggregate number of Series A
Units with respect to which Nonconsenting Limited Partners have
made demands for appraisal and the aggregate number of holders
of such Series A Units. Such written statement shall be
mailed to the Nonconsenting Limited Partner within 10 days
after such Nonconsenting Limited Partner’s written request
for such a statement is received by Aimco OP or within
20 days after the Election Deadline, whichever is later.
(d) Upon the submission of any such demand by a
Nonconsenting Limited Partner, Aimco OP shall, within
40 days after the Election Deadline, submit to the
arbitration panel a duly verified list containing the names and
addresses of all Nonconsenting Limited Partners who have
demanded payment for their Series A Units and with whom
agreements as to the value of their Series A Units have not
been reached with Aimco OP. The arbitration panel shall give
notice of the time and place fixed for the hearing of such
demand by registered or certified mail to Aimco OP and to the
Nonconsenting Limited Partners shown on the list at the
addresses therein stated. The forms of the notices shall be
approved by the panel, and the costs thereof shall be borne by
Aimco OP.
(e) At the hearing on such demand, the panel shall
determine the Nonconsenting Limited Partners who have become
entitled to appraisal rights hereunder.
(f) After determining the Nonconsenting Limited Partners
entitled to an appraisal, the panel shall appraise the
Series A Units, determining their fair value exclusive of
any element of value arising from the accomplishment or
expectation of the Merger, together with interest, if any, to be
paid upon the amount determined to be the fair value. In
determining such fair value, the panel shall take into account
all relevant factors. Unless the panel in its discretion
determines otherwise for good cause shown, interest from the
effective date of the Merger through the date of payment of the
judgment shall be compounded quarterly and shall accrue at 5%
over the Federal Reserve discount rate (including any
surcharge), as established from time to time during the period
between the effective date of the Merger and the date of payment
of the judgment. Upon application by Aimco OP or by any
Nonconsenting Limited Partner entitled to participate in the
appraisal proceeding, the panel may, in its discretion, proceed
with the appraisal prior to the final determination of the
Nonconsenting Limited Partners entitled to an appraisal. Any
Nonconsenting Limited Partner whose name appears on the list
submitted by Aimco OP pursuant to paragraph (d) hereof may
participate fully in all proceedings until it is finally
determined that such Nonconsenting Limited Partner is not
entitled to appraisal rights hereunder.
(g) The panel shall direct the payment of the fair value of
the Series A Units, together with interest, if any, by
Aimco OP to the Nonconsenting Limited Partners entitled thereto.
Payment shall be so made to each such Nonconsenting Limited
Partner upon the receipt by Aimco OP of the written consent from
such Nonconsenting Limited Partner that, for federal income tax
purposes, the issuance of cash for the Series A Units shall
be treated as a sale of the Series A Units by the owner and
a purchase of such Series A Units by Aimco OP for the cash
consideration so paid under the terms of the Merger Agreement in
accordance with the guidelines set forth in Treas. Reg.
Sections 1.708-1(c)(3)
and 1.708-1(c)(4).
(h) The costs of the proceeding may be determined by the
panel and taxed upon the parties as the panel deems equitable in
the circumstances. Upon application of a Nonconsenting Limited
Partner, the panel may order all or a portion of the expenses
incurred by any Nonconsenting Limited Partner in connection with
the appraisal proceeding, including, without limitation,
reasonable attorney’s fees and the fees and expenses of
experts, to be charged pro rata against the value of all the
interests entitled to an appraisal.
(i) From and after the effective date of the Merger, no
Nonconsenting Limited Partner who has demanded appraisal rights
as provided in paragraph (b) hereof shall be entitled to
vote such Series A Units for any purpose or to receive
payment of distributions on such interests (except distributions
payable as of a record date prior to the effective date of the
Merger); provided, however, that if such Nonconsenting Limited
Partner shall deliver to Aimco Properties, L.P.,
c/o Eagle
Rock Proxy Advisors, LLC, by mail at 00 Xxxxxxxx Xxxxx,
Xxxxxxxx, Xxx Xxxxxx, 00000, or by fax at
(000) 000-0000,
a written withdrawal of such Nonconsenting Limited
Partner’s demand for an appraisal and an acceptance of the
Cash Consideration payable pursuant to the Merger Agreement,
either as provided in paragraph (c) hereof or thereafter
with the written approval of Aimco OP, then the right of such
Nonconsenting Limited Partner to an appraisal shall cease.
Notwithstanding the foregoing, no appraisal proceeding before
the panel shall be dismissed as to any Nonconsenting Limited
Partner without the approval of the panel, and such approval may
be conditioned upon such terms as the panel deems just.
2
