AGREEMENT AND PLAN OF MERGER
Exhibit 10.1
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this “Agreement”), dated as of February 11, 2011, by and among
SHELTER PROPERTIES IV LIMITED PARTNERSHIP, a South Carolina limited partnership (“Shelter”), AIMCO
SHELTER MERGER SUB LLC, a South Carolina limited liability company (the “Aimco Subsidiary”), and
AIMCO PROPERTIES, L.P., a Delaware limited partnership (“Aimco OP”).
WHEREAS, Shelter Realty IV Corporation, the corporate general partner of Shelter (“Shelter
GP”), has determined that the Merger (as defined below) of the Aimco Subsidiary with and into
Shelter, with Shelter as the surviving entity, is advisable and in the best interests of Shelter
and its partners;
WHEREAS, Aimco OP, the sole member of the Aimco Subsidiary, has determined that the Merger of
the Aimco Subsidiary with and into Shelter, with Shelter as the surviving entity, is advisable and
in the best interests of the Aimco Subsidiary and its member;
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 Shelter, with
Shelter 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, Shelter, 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 Shelter (the “Merger”), and Shelter shall be the surviving
entity of the Merger (the “Surviving Entity”). The Merger will have the effects specified in this
Agreement, Article 12 of the South Carolina Uniform Limited Partnership Act, as amended (the
“SCULPA”), and sections 00-00-000 through 906 of the Uniform Limited Liability Company Act of 1996,
as amended (the “LLCA”).
SECTION 2 General Partner. Shelter GP and the individual general partner of Shelter will be
the sole general partners of the Surviving Entity.
SECTION 3 Certificate. As soon as practicable after the approval of this Agreement by a
majority in interest of limited partnership interests of Shelter, Shelter 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 South Carolina pursuant to section 33-42-2120 of the SCULPA
and section 00-00-000 of the LLCA. 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 South
Carolina (the “Effective Time”).
SECTION 4 Limited Partnership Agreement. The agreement of limited partnership of Shelter 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 Shelter.
(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 limited partnership unit of Shelter outstanding immediately prior to the
Effective Time and held by limited partners of Shelter, except limited partnership 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) $4.50 in
cash (the “Cash Consideration”) or (y) a number of partnership common units of Aimco OP calculated
by dividing $4.50 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 limited partnership unit.
(iii) Aimco OP shall prepare a form of election (the “Election Form”) describing the Merger
and pursuant to which each limited partner of Shelter 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. Shelter, 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 Shelter GP, 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 general partnership unit of Shelter
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 limited
partnership units of the Surviving Entity.
SECTION 7 Appraisal Rights. In connection with the Merger, the holders of limited partnership
units of Shelter 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 Shelter for, all expenses
incurred by Shelter 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 Shelter limited partnership 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 limited partners of Shelter.
(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,
2
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 limited partnership units of Shelter shall be treated as a
sale of such limited partnership units by such holder and a purchase of such limited partnership
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 limited partnership units who accepts cash explicitly agrees and consents to such
treatment. Furthermore, the parties hereto intend and agree that, for Federal income tax purposes,
(i) any exchange of limited partnership units of Shelter 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
Internal Revenue Code of 1986, as amended, and (ii) each such holder of limited partnership units
of Shelter 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 limited
partnership units of Shelter 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 Shelter GP 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 Shelter, 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 Shelter 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 South Carolina, 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 limited partnership units of Shelter
pursuant to Section 7.
3
IN WITNESS WHEREOF, Shelter, 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.
| SHELTER PROPERTIES IV LIMITED PARTNERSHIP |
||||
| By: | Shelter Realty IV Corporation, | |||
| its Corporate General Partner | ||||
| By: | /s/ Xxxxx X. XxXxxxxxxx | |||
| Name: | Xxxxx XxXxxxxxxx | |||
| Title: | Senior Vice President and Assistant General Counsel |
|||
| AIMCO SHELTER 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 XxXxxxxxxx | |||
| Title: | Senior Vice President and Assistant General Counsel |
|||
| AIMCO PROPERTIES, L.P. |
||||
| By: | AIMCO-GP, Inc., | |||
| its General Partner | ||||
| By: | /s/ Xxxxx X. XxXxxxxxxx | |||
| Name: | Xxxxx XxXxxxxxxx | |||
| Title: | Senior Vice President and Assistant General Counsel |
|||
[Signature Page to Agreement and Plan of Merger of Shelter Properties IV Limited Partnership]
