Agreement and Plan of Merger
Exhibit
10.1
AGREEMENT AND PLAN OF MERGER (this
“Agreement”), dated as of July 28, 2011,
by and among CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/2,
LP, a Delaware limited partnership (“CCIP/2”),
AIMCO CCIP/2 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/2
(“ConCap”) and owner of the Series A
general partner interest (the “Series A GP
Interest”) of CCIP/2, has determined that the Merger
(as defined below) of the Aimco Subsidiary with and into CCIP/2,
with CCIP/2 as the surviving entity, is advisable, fair to and
in the best interests of CCIP/2 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/2, with CCIP/2 as the surviving entity, is advisable, fair
to 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/2, with CCIP/2 as the surviving entity, is advisable, fair
to 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/2, 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/2 (the “Merger”), and CCIP/2 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/2, CCIP/2 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/2 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/2.
(a) Limited Partners’ Interests.
(i) In connection with the Merger and in accordance with
the procedures set forth in Section 5(a)(iii) of this
Agreement, each Series A unit of limited partnership
interest of CCIP/2 (each a “Series A
Unit”) outstanding immediately prior to the Effective
Time and held by limited partners of CCIP/2, 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) $8.45 in cash (the “Cash
Consideration”) or (y) a number of partnership
common units of Aimco OP calculated by dividing $8.45 by the
average closing price of Apartment Investment and Management
Company common stock, as reported on the New York Stock
Exchange, 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) of this
Agreement, 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 other jurisdiction (or that the registration or
qualification in that state or 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/2 will have the
right to elect to receive either the Cash Consideration or the
OP Unit Consideration (subject to Section 5(a)(ii) of
this Agreement). 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., New York 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 or qualification
would be prohibitively costly) will be deemed to have elected
the Cash Consideration. CCIP/2, 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/2 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 all of the
Series A Units of the Surviving Entity.
Section 7. Appraisal
Rights. In connection with the Merger, the
holders of Series A Units 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/2 for, all expenses
incurred by CCIP/2 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 partnership interests of CCIP/2.
(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 accepts cash explicitly agrees and
consents to such treatment. Furthermore, the parties hereto
intend and agree that, for Federal income tax purposes,
(x) any holder of Series A Units receiving partnership
common units of Aimco OP under the terms of this Agreement shall
be treated as receiving the partnership common units of Aimco OP
pursuant to a distribution in complete liquidation of such
holder’s interest in CCIP/2, 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/2, 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/2 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 pursuant to Section 7 of
this Agreement.
IN WITNESS WHEREOF, CCIP/2, 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.
CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/2, LP
| By: | ConCap Equities, Inc., |
Its General Partner
| By: |
/s/ Xxxxx
X. Xxxxxxx
|
Name: Xxxxx X. Xxxxxxx
| Title: | Vice President and Assistant General Counsel |
AIMCO CCIP/2 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 |
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 |
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 July 28, 2011 (the “Merger
Agreement”), by and among Consolidated Capital
Institutional Properties/2, LP, a Delaware limited partnership
(“CCIP/2”), AIMCO CCIP/2 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/2 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 (“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 Series A Units held by Nonconsenting Limited Partners,
and shall include in such notice a copy of this
Exhibit A. 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 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 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
arbitrator 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 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.
(f) After determining the Nonconsenting Limited Partners
entitled to an appraisal, the arbitrator shall appraise the
Series A 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 Series A 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 Series A 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 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) 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 Series A 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 Series A 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 Series A Units whether under the Merger
Agreement or otherwise and whether against CCIP/2, ConCap,
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 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. 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.
