Exhibit 10.1
AGREEMENT AND PLAN OF MERGER
     AGREEMENT AND PLAN OF MERGER (this “Agreement”), dated as of October 8,
2010, by and among FOX STRATEGIC HOUSING INCOME PARTNERS, a California limited
partnership (“Fox”), AIMCO FOX MERGER SUB LLC, a California limited liability
company (the “Aimco Subsidiary”), and AIMCO PROPERTIES, L.P., a Delaware limited
partnership (“Aimco OP”).
     WHEREAS, Fox Partners VIII, the general partner of Fox (“Fox GP”), has
determined that the Merger (as defined below) of the Aimco Subsidiary with and
into Fox, with Fox as the surviving entity, is advisable and in the best
interests of Fox 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 Fox, with Fox 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 Fox, with Fox 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, Fox, 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 Fox (the “Merger”),
and Fox shall be the surviving entity of the Merger (the “Surviving Entity”).
The Merger will have the effects specified in this Agreement, section 15911.11
of the California Uniform Limited Partnership Act of 2008 (the "CULPA”), and
section 17550 of the Beverly-Killea Limited Liability Company Act, as amended
(the "BKLLCA”).
          SECTION 2. General Partner. Fox GP 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 limited partnership interests of
Fox, Fox 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 California pursuant to section 15911.14 of the CULPA and section
17552 of the BKLLCA. 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 California (the “Effective Time”).
          SECTION 4. Limited Partnership Agreement. The agreement of limited
partnership of Fox 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 Fox.
          (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 Fox outstanding immediately prior to

 

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the Effective Time and held by limited partners of Fox, 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) $4.84 in cash (the
“Cash Consideration”) or (y) a number of partnership common units of Aimco OP
calculated by dividing $4.84 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 Fox
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. Fox, 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 Fox 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 Fox
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 Fox 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 Fox
for, all expenses incurred by Fox 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 Fox 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 Fox.

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     (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 limited partnership
units of Fox 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 Fox 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 Fox 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 Fox
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 Fox 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 Fox,
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 Fox 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 California, 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 Fox pursuant
to Section 7.

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     IN WITNESS WHEREOF, Fox, 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.

                  FOX STRATEGIC HOUSING INCOME PARTNERS
 
                By:   Fox Partners VIII,         its General Partner
 
           
 
                By:   /s/ Derek McCandless          
 
      Name:   Derek McCandless
 
      Title:   Senior Vice President
 
           
 
           
 
                AIMCO FOX MERGER SUB LLC
 
                By:   Aimco Properties, L.P.,         its sole Member
 
           
 
                By:   AIMCO-GP, Inc.         its General Partner
 
           
 
                By:   /s/ Derek McCandless          
 
      Name:   Derek McCandless
 
      Title:   Senior Vice President
 
           
 
           
 
                AIMCO PROPERTIES, L.P.
 
                By:   AIMCO-GP, Inc.,         its General Partner
 
           
 
                By:   /s/ Derek McCandless          
 
      Name:   Derek McCandless
 
      Title:   Senior Vice President

[Signature Page — Merger Agreement]

 

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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
October 8, 2010 (the “Merger Agreement”), by and among Fox Strategic Housing
Income Partners, a California limited partnership (“Fox”), AIMCO Fox Merger Sub
LLC, a California 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 Fox shall have the following appraisal
rights:
     (a) Any limited partner who holds limited partnership 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 limited partnership 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 limited partnership 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 limited partnership units
pursuant to paragraph (a) hereof. Any limited partner who holds limited
partnership 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 limited partnership
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 limited partnership 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 limited partnership
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 10 Commerce Drive, Cranford, New Jersey, 07016, or by fax at
(908) 497-2314. 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 limited
partnership units with respect to which Nonconsenting Limited Partners have made
demands for appraisal and the aggregate number of holders of such limited
partnership 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 limited
partnership units and with whom agreements as to the value of their limited
partnership 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

 

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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 limited partnership 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 limited
partnership 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 limited partnership units shall be
treated as a sale of the limited partnership units by the owner and a purchase
of such limited partnership 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 limited partnership 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 10 Commerce Drive, Cranford, New Jersey, 07016, or by fax at (908) 497-2314,
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.