Agreement and Plan of Merger
Exhibit 10.1
AGREEMENT AND PLAN OF MERGER (this
“Agreement”), dated as of July 28, 2011,
by and among Angeles Income Properties, Ltd. 6, a California
limited partnership (“AIP”), AIMCO AIP 6 Merger
Sub LLC, a Delaware limited liability company (the
“Aimco Subsidiary”), Angeles Income Properties
6, LP (“New AIP”), and Aimco Properties, L.P.,
a Delaware limited partnership (“Aimco OP”).
WHEREAS, Angeles Realty Corporation II, the managing general
partner of AIP and New AIP (“ARC”), has
determined that the merger of AIP into New AIP, a Delaware
limited partnership, and the subsequent merger of the Aimco
Subsidiary with and into New AIP, with New AIP as the surviving
entity, in each case, on the terms set forth herein, are
advisable, fair to and in the best interests of AIP and New AIP
and their respective partners; and
WHEREAS, Aimco OP is the sole member of the Aimco Subsidiary and
the sole limited partner of New AIP; and
WHEREAS, the Board of Directors of AIMCO-GP, Inc., the general
partner of Aimco OP (“AIMCO-GP”), has
determined that the merger of AIP into New AIP, and the
subsequent merger of the Aimco Subsidiary with and into New AIP,
with New AIP as the surviving entity, in each case, on the terms
as set forth herein, are advisable, fair to and in the best
interests of Aimco OP and its partners, and the Aimco
Subsidiary; and
WHEREAS, the parties desire to enter this Agreement to evidence
the terms, provisions, representations, warranties, covenants
and conditions upon which the Mergers (as defined below) 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, the parties hereby agree as follows:
Section 1. The
First Merger. Subject to the terms and
conditions set forth herein, AIP shall be merged with and into
New AIP (the “First Merger”), with New AIP as
the surviving entity (the “First Surviving
Entity”). As soon as practicable after all of the
conditions to the First Merger set forth herein have been
satisfied, AIP and New AIP shall (i) execute a certificate
of merger and cause such certificate to be filed with the
Secretary of State of the State of California and
(ii) execute a certificate of merger and cause such
certificate to be filed with the Secretary of State of the State
of Delaware. The First Merger shall become effective upon the
filing of such certificates (the “First Effective
Time”). At the First Effective Time, the First Merger
shall have the effect provided by applicable law and this
Agreement, including, but not limited to, the following
consequences:
(a) Certificate of Limited
Partnership. The certificate of limited
partnership of New AIP in effect immediately prior to the First
Effective Time shall be the certificate of limited partnership
of the First Surviving Entity unless and until subsequently
amended.
(b) Partnership Agreement. The
limited partnership agreement of AIP in effect immediately prior
to the First Effective Time, as amended as set forth on
Exhibit A hereto, shall be the partnership agreement
of the First Surviving Entity unless and until subsequently
amended. The general partners and each limited partner of the
First Surviving Entity shall have the rights under, be bound by
and be subject to the terms and conditions of, such partnership
agreement.
(c) General Partner. ARC shall be
the managing general partner of the First Surviving Entity.
(d) Conversion of Equity Interests.
(i) Interests in AIP. Each general
partnership interest of AIP outstanding immediately prior to the
First Effective Time and held by a general partner shall be
converted into an equivalent general partnership interest in the
First Surviving Entity (each new general partnership interest, a
“New AIP GP Interest”). Each unit of limited
partnership interest of AIP outstanding immediately prior to the
First Effective Time shall be converted into an equivalent unit
of limited partnership interest in the First Surviving Entity (a
“New AIP Unit”).
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(ii) Interests in New AIP. The
interest of each partner in New AIP immediately prior to the
First Effective Time shall be cancelled.
Section 2. The
Second Merger. Subject to the terms and
conditions set forth herein, immediately following the First
Effective Time, the Aimco Subsidiary shall be merged with and
into New AIP (the “Second Merger” and, together
with the First Merger, the “Mergers”), with New
AIP as the surviving entity (the “Second Surviving
Entity”). As soon as practicable after all of the
conditions to the Second Merger set forth herein have been
satisfied, New AIP shall cause to be filed a certificate of
merger with respect to the Second Merger with the Secretary of
State of the State of Delaware. The Second Merger shall become
effective upon the filing of such certificate (the
“Second Effective Time”). At the Second
Effective Time, the Second Merger shall have the effect provided
by applicable law and this Agreement, including, but not limited
to, the following consequences:
(a) Certificate of Limited
Partnership. The certificate of limited
partnership of New AIP in effect immediately prior to the Second
Effective Time shall be the certificate of limited partnership
of the Second Surviving Entity unless and until subsequently
amended.
(b) Partnership Agreement. The
limited partnership agreement of New AIP in effect immediately
prior to the Second Effective Time shall be the partnership
agreement of the Second Surviving Entity (the
“Partnership Agreement”) unless and until
subsequently amended. The general partners and each limited
partner of the Second Surviving Entity shall have the rights
under, be bound by and be subject to the terms and conditions
of, the Partnership Agreement.
(c) General Partners. ARC shall be
the managing general partner of the Second Surviving Entity.
(d) Treatment of Limited Partners Interests in New
AIP.
(i) In connection with the Second Merger and in accordance
with the procedures set forth in Section 2(d)(iii) hereto,
each New AIP Unit outstanding immediately prior to the Second
Effective Time, except New AIP Units held by limited partners
who have perfected their appraisal rights pursuant to
Exhibit B hereto, shall be converted into the right
to receive, at the election of the holder thereof, either
(x) $252.40 in cash (the “Cash
Consideration”) or (y) a number of partnership
common units (“OP Units”) of Aimco OP
calculated by dividing $252.40 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 date
of the Second Effective Time (the “OP Unit
Consideration,” and, together with the Cash
Consideration, the “Merger Consideration”).
(ii) Notwithstanding Section 2(d)(i), if Aimco OP
determines that the law of the state or other jurisdiction in
which a holder of New AIP Units resides would prohibit the
issuance of OP Units in that state or jurisdiction, or that
the registration or qualification in that state or other
jurisdiction would be prohibitively costly (each such state or
jurisdiction, a “Specified Jurisdiction”), then
such holder will only be entitled to receive the Cash
Consideration for each New AIP Unit.
(iii) Aimco OP shall prepare a form of election (the
“Election Form”) describing the Second Merger,
pursuant to which each holder of New AIP Units will have the
right to elect to receive either the Cash Consideration or the
OP Unit Consideration (subject to Section 2(d)(ii)).
Aimco OP shall mail or cause to be mailed an Election Form to
each holder of New AIP Units, together with any other materials
that Aimco OP determines to be necessary or prudent, no later
than ten (10) days after the Second 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., New York Time, on the day that is thirty
(30) days after the mailing of such Election Form by Aimco
OP. If a holder of New AIP Units 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 holder of New
AIP Units that resides in a Specified Jurisdiction will be
deemed to have elected the Cash Consideration. AIP, New AIP, the
Aimco Subsidiary and Aimco OP agree that holders of New AIP
Units shall have the right to revoke any election made in
connection with the Second Merger at any time prior to the
expiration of the time period stated in the Election Form.
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Aimco OP and ARC, 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.
(e) Treatment of General Partners’
Interests. Each New AIP GP Interest
outstanding immediately prior to consummation of the Second
Merger shall remain outstanding and unchanged, with all of the
rights set forth in the Partnership Agreement.
(f) Treatment of Interests in the Aimco
Subsidiary. The entire membership interest in
the Aimco Subsidiary immediately prior to the Second Effective
Time shall be converted into one hundred (100) New AIP
Units of the Second Surviving Entity.
Section 3. Appraisal
Rights. In connection with the First Merger,
none of the partners in AIP or New AIP will have any
dissenters’ appraisal rights. In connection with the Second
Merger, the holders of New AIP Units immediately prior to the
Merger shall have the appraisal rights set forth in Exhibit
B hereto.
Section 4. Covenants. Aimco
OP agrees to pay for, or reimburse AIP and New AIP for, all
expenses incurred by AIP and New AIP in connection with the
Mergers and the transactions contemplated hereby. Aimco OP
agrees to pay cash or issue and deliver OP Units to the
former holders of New AIP Units, in accordance with
Section 2(d) of this Agreement.
Section 5. Conditions
to the Mergers.
(a) Neither the first merger or the second merger should
occur unless and until such merger has been approved or
consented to by a majority in interest of the limited
partnership interests of AIP.
(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 6. Tax
Treatment.
(a) First Merger. The parties
hereto acknowledge and agree that for federal income tax
purposes, the First Merger will be treated as follows:
(i) The First Merger shall not be treated as a realization
event, and in accordance therewith, the First Surviving Entity
shall be treated as the continuation of AIP for federal income
tax purposes; and
(ii) In accordance with the foregoing, the tax bases of the
general partners and limited partners of the First Surviving
Entity in their First Surviving Entity interests and the
respective initial capital account balances of the general
partners and limited partners of the First Surviving Entity
immediately following the First Effective Time shall be the same
as those of the general partners and the limited partners of AIP
immediately prior to the First Effective Time.
(b) Second Merger. The parties
hereto intend and agree that, for Federal income tax purposes,
(i) any payment of cash for New AIP Units shall be treated
as a sale of such New AIP Units by such holder and a purchase of
such New AIP Units by Aimco OP for the cash so paid under the
terms of this Agreement, and (ii) each such holder of New
AIP Units who accepts 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
New AIP Units for OP Units under the terms of this
Agreement shall be treated as the contribution of New AIP Units
to Aimco OP in exchange for Aimco OP Units, in accordance
with Section 721 of the Internal Revenue Code of 1986, as
amended, and (y) each such holder of New AIP Units who
accepts OP Units explicitly agrees and consents to such
treatment. Any cash
and/or
OP Units to which a holder of New AIP 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
OP Units shall be treated as described in this
Section 6(b).
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Section 7. Further
Assurances.
(a) From time to time, as and when required by the First
Surviving Entity or by its successors and assigns, there shall
be executed and delivered on behalf of AIP such deeds and other
instruments, and there shall be taken or caused to be taken by
AIP all such further actions, as shall be appropriate or
necessary in order to vest, perfect or confirm, of record or
otherwise, in the First Surviving Entity the title to and
possession of all property, interests, assets, rights,
privileges, immunities, powers, franchises and authority of AIP,
and otherwise to carry out the purposes of this Agreement, and
the officers and directors of ARC are fully authorized in the
name and on behalf AIP or otherwise to take any and all such
action and to execute and deliver any and all such deeds and
other instruments.
(b) From time to time, as and when required by the Second
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 Second Surviving Entity
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 ARC 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 8. 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 Mergers with respect to
any of the terms contained herein.
Section 9. Abandonment. At
any time prior to consummation of the Mergers, this Agreement
may be terminated and the Mergers may be abandoned without
liability to any party hereto by any of the Aimco Subsidiary,
Aimco OP, AIP or New AIP, 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 AIP or the general partner of Aimco
OP.
Section 10. 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 11. 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 New AIP Units pursuant to Section 3.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first above written.
ANGELES INCOME PROPERTIES, LTD. 6
By: | Angeles Realty Corporation II, |
Its Managing General Partner
By: |
/s/ Xxxxx
X. Xxxxxxx
|
Name: Xxxxx X. Xxxxxxx
Title: | Vice President and Assistant General Counsel |
AIMCO AIP 6 MERGER SUB LLC
By: |
Aimco Properties, L.P., Its Sole Member |
By: |
AIMCO-GP, Inc. Its General Partner |
By: |
/s/ Xxxxx
X. Xxxxxxx
|
Name: Xxxxx X. Xxxxxxx
Title: | Vice President and Assistant General Counsel |
ANGELES INCOME PROPERTIES 6, LP
By: | Angeles Realty Corporation II, |
Its Managing General Partner
By: |
/s/ Xxxxx
X. Xxxxxxx
|
Name: Xxxxx X. Xxxxxxx
Title: | Vice President and Assistant General Counsel |
AIMCO PROPERTIES, L.P.
By: | AIMCO-GP, Inc., |
Its General Partner
By: |
/s/ Xxxxx
X. Xxxxxxx
|
Name: Xxxxx X. Xxxxxxx
Title: | Vice President and Assistant General Counsel |
[Signature Page — Merger Agreement]
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EXHIBIT A
FORM OF
AMENDMENT
TO
AGREEMENT OF LIMITED PARTNERSHIP
OF
ANGELES INCOME PROPERTIES, LTD. 6
TO
AGREEMENT OF LIMITED PARTNERSHIP
OF
ANGELES INCOME PROPERTIES, LTD. 6
This AMENDMENT TO THE AGREEMENT OF LIMITED PARTNERSHIP OF
ANGELES INCOME PROPERTIES, LTD. 6 (this
“Amendment”) is entered into as
of ,
2011 by and among Angeles Realty Corporation II, a California
corporation, in its capacity as managing general partner (the
“Managing General Partner”), and each of the
Limited Partners. All capitalized terms used in this Amendment
but not otherwise defined herein shall have the respective
meanings given to them in the Partnership Agreement (as defined
below).
Recitals
WHEREAS, Angeles Income Properties, Ltd. 6, a California limited
partnership (the “Partnership”), is governed
pursuant to the terms of that certain Agreement of Limited
Partnership, dated June 1, 1987, and as further amended to
date (the “Partnership Agreement”);
WHEREAS, the Partnership and Angeles Income Properties 6, LP, a
Delaware limited partnership (the “Delaware
Partnership”), are parties to an Agreement and Plan of
Merger, dated as of July 28, 2011 (the “Merger
Agreement”);
WHEREAS, pursuant to the Merger Agreement, the Partnership will
be merged with and into the Delaware Partnership, with the
Delaware Partnership as the surviving entity;
WHEREAS, pursuant to the Merger Agreement, at the effective time
of the merger, the Partnership Agreement, as further amended by
this Amendment, will become the partnership agreement of the
Delaware Partnership; and
WHEREAS, the merger will be effected upon the approval or
consent of (i) the managing general partner of each of the
Partnership and the Delaware Partnership, and (ii) a
majority in interest of the limited partners of each of the
Partnership and the Delaware Partnership.
NOW, THEREFORE, in consideration of the premises, the agreement
of the parties herein contained, and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged and confessed, the parties hereby agree as follows:
1. Amendments to the Partnership
Agreement. At the effective time of the
merger, the Partnership Agreement shall be amended as follows:
(a) All occurrences of the phrase “Angeles Income
Properties, Ltd. 6” in the Partnership Agreement shall be
replaced with the phrase “Angeles Income Properties 6,
LP.”
(b) All references in the Partnership Agreement to any law,
statute or regulation of the state of California shall be deemed
to refer to the corresponding laws, statutes and regulations of
the state of Delaware.
(c) All occurrences of the phrase “the State of
California” in the Partnership Agreement shall be replaced
with the phrase “the State of Delaware.”
(d) Article 1 Section 1.4 of the Partnership
Agreement is hereby amended and restated to read in its entirety
as follows:
“1.4 “Act” means the Delaware Revised
Uniform Limited Partnership Act, as it may be amended from time
to time, and any successor to such Act.”
(e) Article 2 Section 2.2 of the Partnership
Agreement is hereby amended and restated to read in its entirety
as follows:
“2.2 Name. The name of the
Partnership shall continue to be Angeles Income Properties 6,
LP, a Delaware Limited Partnership. The Partnership may use such
name with or without the words “a
6
Delaware Limited Partnership,” as state law may require.
The General Partner in its sole discretion may change the name
of the Partnership at any time and from time to time.”
(f) Article 4 of the Partnership Agreement is hereby
amended and restated to read in its entirety as follows:
“ARTICLE 0
XXXXXXXXX XXXXX XX XXXXXXXX
XXXXXXXXX XXXXX XX XXXXXXXX
The Principal place of business of the Partnership shall be 00
Xxxxxxx Xxxxx, X.X. Xxx 0000, Xxxxxxxxxx, Xxxxx
Xxxxxxxx 00000, or such other place or places as the General
Partner may hereafter determine.”
(g) Article 5 of the Partnership Agreement is hereby
amended and restated to read in its entirety as follows:
“ARTICLE 5
TERM
TERM
Angeles Income Properties, Ltd. 6 was originally formed as a
limited partnership (the “California
Partnership”) pursuant to the provisions of the
California Uniform Limited Partnership Act, upon the terms and
conditions set forth in an agreement made as of June 1,
1987. Pursuant to an Agreement and Plan of Merger, dated
July 28, 2011, by and between the California Partnership
and Angeles Income Properties 6, LP, a Delaware limited
partnership (the “Delaware Partnership”), the
California Partnership was merged with and into the Delaware
Partnership, with the Delaware Partnership as the surviving
entity (the “Surviving Entity”) in the merger
(the “Merger”). At the effective time of the
Merger (the “Effective Time”), the Merger had
the effect provided by applicable law, and the following
consequences: (a) the certificate of limited partnership of
the Delaware Partnership in effect immediately prior to the
Effective Time became the certificate of limited partnership of
the Surviving Entity; (b) the limited partnership agreement
of the California Partnership in effect immediately prior to the
Effective Time, as amended as set forth on Exhibit A
to the Merger Agreement, became the partnership agreement of the
Surviving Entity (as so amended, the “Partnership
Agreement”); (c) Angeles Realty Corporation II, a
California corporation, remained as sole Managing General
Partner of the Surviving Entity, and its interest in the
California Partnership immediately prior to the Effective Time
was converted into an equivalent interest in the Surviving
Entity; (d) each general partnership interest of the
California Partnership immediately prior to the Effective Time
was converted into an equivalent general partnership interest in
the Surviving Entity; (e) each unit of limited partnership
interest of the California Partnership immediately prior to the
Effective Time was converted into an equivalent unit of limited
partnership interest in the Surviving Entity; and (f) the
interests of each partner of the Delaware Partnership
immediately prior to the Effective Time was cancelled.
References herein to the “Partnership” are to the
California Partnership prior to the Merger and to the Delaware
Partnership, as the Surviving Entity in the Merger, from and
after the Effective Time. The Partnership shall continue in
existence until the close of Partnership business on
December 31, 2037, unless the Partnership has been sooner
terminated as herein provided or as provided by law.”
2. Miscellaneous.
(a) Effect of Amendment. In the
event of any inconsistency between the terms of the Partnership
Agreement and the terms of this Amendment, the terms of this
Amendment shall prevail. In the event of any conflict of
apparent conflict between any of the provisions of the
Partnership Agreement as amended by this Amendment, such
conflicting provisions shall be reconciled and construed to give
effect to the terms and intent of this Amendment.
(b) Ratification. Except as
otherwise expressly modified hereby, the Partnership Agreement
shall remain in full force and effect, and all of the terms and
provisions of the Partnership Agreement, as herein modified, are
hereby ratified and reaffirmed.
(c) Governing Law. THIS AMENDMENT
SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF DELAWARE.
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EXHIBIT B
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 July 28, 2011 (the “Merger
Agreement”), by and among Angeles Income Properties,
Ltd. 6, a California limited partnership, AIMCO AIP 6 Merger Sub
LLC, a Delaware limited liability company, Angeles Income
Properties 6, LP, and Aimco Properties, L.P., a Delaware limited
partnership. In connection with the Merger, limited partners of
New AIP shall have the following appraisal rights:
(a) Any limited partner who holds New AIP 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 New AIP Units. This
arbitration shall be conducted in Denver, Colorado, in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association (“AAA”), excluding the
Procedures for Large, Complex Commercial Disputes, by a single
arbitrator selected by Aimco OP from a panel of AAA arbitrators
who are qualified to value investment interests in commercial
real estate. Any action for judicial review or enforcement of
the arbitration award shall be brought in a court of competent
jurisdiction 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 New AIP Units held by Nonconsenting Limited Partners, and
shall include in such notice a copy of this Exhibit. 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 New AIP Units pursuant to paragraph
(a) hereof. Any limited partner who holds New AIP 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 New AIP 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 New AIP 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 New AIP 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 within 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 New AIP Units
with respect to which Nonconsenting Limited Partners have made
demands for appraisal and the aggregate number of holders of
such New AIP 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
arbitrator a duly verified list containing the names and
addresses of all Nonconsenting Limited Partners who have
demanded payment for their New AIP Units and with whom
agreements as to the value of their New AIP Units have not been
reached with Aimco OP. The arbitrator 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 arbitrator, and the costs of the preparation and
mailing thereof shall be borne by Aimco OP.
(e) At the hearing on such demand, the arbitrator shall
determine as to each of the Nonconsenting Limited Partners
whether the Nonconsenting Limited Partner is entitled to
appraisal rights hereunder.
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(f) After determining the Nonconsenting Limited Partners
entitled to an appraisal, the arbitrator shall appraise the New
AIP Units, determining their fair value, as of the date of the
Merger, 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 arbitrator
shall take into account all factors relevant to the issue of
fair value of the New AIP Units, using the legal standard of
fair value that would apply if the Nonconsenting Limited Partner
were a stockholder in a corporation entitled to appraisal rights
as a result of a corporate merger under the corporation laws of
the state of Delaware. Unless the arbitrator in his or her
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 arbitrator may, in his or her
discretion, proceed with the appraisal prior to the final
determination of the Nonconsenting Limited Partners’
entitlement to appraisal rights hereunder. 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 arbitrator shall direct the payment of the fair
value of the New AIP Units (which will be paid only in cash),
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 New AIP Units shall be treated as a sale of the New
AIP Units by the owner and a purchase of such New AIP 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) and the release described in (i) hereof.
(h) The costs of the proceeding may be determined by the
arbitrator and taxed upon the parties as the arbitrator deems
equitable in the circumstances. Upon application of a
Nonconsenting Limited Partner, the arbitrator 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) Any Nonconsenting Limited Partner who has made a demand
for appraisal of his or her New AIP Units and who has not
withdrawn the demand before the Election Deadline shall be
deemed to have entered into a binding contract with Aimco OP to
accept the fair value awarded by the arbitrator in exchange for
his or her New AIP Units, plus any interest as provided herein.
The award of fair value, plus any interest, to the Nonconsenting
Limited Partners shall be exclusive of and in lieu of any other
right, claim or remedy under state or federal law that the
Nonconsenting Limited Partner may have with respect to his or
her New AIP Units whether under the Merger Agreement or
otherwise and whether against AIP, New AIP, ARC, Aimco-GP,
Apartment Investment and Management Company, Aimco OP, or any
other person or entity, and the Nonconsenting Limited Partner
shall execute and deliver a release of all other such rights,
claims and remedies in exchange for payment of the award.
(j) 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 New AIP 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. The
appraisal proceeding may also be dismissed as to any
Nonconsenting Limited Partner with the agreement or consent of
Aimco OP upon such terms as the two parties may agree. Except as
provided in the two foregoing sentences, no appraisal proceeding
before the arbitrator shall be dismissed as to any Nonconsenting
Limited Partner without the approval of the arbitrator, and such
approval may be conditioned upon such terms as the arbitrator
deems just.
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