ITEM 1.01. Entry into a Material Definitive Agreement.
Termination of Agreement with respect to the Master Leases
On June 17, 2022, Aimco OP L.P. (“Aimco OP”), AIR OP, certain subsidiaries of Aimco OP, and certain subsidiaries of AIR OP entered into a termination agreement (the “Termination Agreement”) with respect to each Master Lease Agreement entered into on December 15, 2020, by certain subsidiaries of Aimco OP and certain subsidiaries of AIR OP (as the same may have been amended, modified or supplemented from time to time, collectively, the “Master Leases”). Pursuant to the terms of the Termination Agreement, each Master Lease shall terminate as of September 1, 2022. In connection with such termination, AIR OP shall pay (or shall cause to be paid) to Aimco OP and/or its applicable subsidiaries a termination fee equal to $200,000,000.00. Upon such termination, each party shall be released of any and all liabilities and obligations under each respective Master Lease other than those liabilities and obligations, if any, that expressly survive termination.
Amendment to the Mezzanine Note Agreement and Notes
On June 17, 2022, Aimco JO Intermediate Holdings, LLC (the “Issuer”), AIR OP, and AIR/Bethesda Holdings, Inc. entered into an Amendment to the Mezzanine Note Agreement and Notes in order to, among other things, amend the Issuer’s 5.2% Secured Mezzanine Notes due January 31, 2024 (the “Mezzanine Notes”) to (i) make the maturity date August 1, 2022, (ii) permit prepayments, and (iii) modify the definition of the “Make-Whole Amount.”
Amendment to the Master Leasing Agreement
On June 14, 2022, Aimco Development Company, LLC (“Aimco”), a subsidiary of Apartment Investment and Management Company, entered into an amendment (the “Amendment”) to the Master Leasing Agreement, dated as of December 15, 2020 (as the same may have been amended, modified or supplemented from time to time, the “Master Leasing Agreement”), to amend certain terms of the Master Leasing Agreement, including the following: (i) to eliminate the purchase option previously granted to Apartment Income REIT, L.P. (formerly known as AIMCO Properties, L.P.) (“AIR OP”) under the Master Leasing Agreement with respect to certain real property that has achieved stabilization after the date that Aimco or its applicable subsidiary acquired such property; (ii) to exclude from the existing right of first offer in favor of AIR OP under the Master Leasing Agreement properties designated by Aimco to be used in a like-kind exchange in accordance with Section 1031 of the Internal Revenue Code of 1986 and other exchange transactions; and (iii) to grant a new right of first offer, subject to certain exceptions and conditions as set forth in the Amendment, in favor of AIR OP with respect to certain real property owned by Aimco or its subsidiaries (a) that has achieved stabilization after the date that Aimco or its applicable subsidiary acquired such property and (b) that Aimco or its applicable subsidiary, in its sole discretion, desires to sell within 12 months after the date on which stabilization has been achieved.
The foregoing descriptions of the (i) Termination Agreement, (ii) Amendment to the Mezzanine Note Agreement and Notes, and (iii) Amendment to the Master Leasing Agreement do not purport to be complete and are qualified in their entirety by the full text of the (i) Termination Agreement, (ii) Amendment to the Mezzanine Note Agreement and Notes, and (iii) Amendment to the Master Leasing Agreement, which are being filed as Exhibit 1.1, 1.2, and 1.3, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.