exv10w1



 





 





FOURTH AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP




OF




AIMCO PROPERTIES, L.P.




a Delaware limited partnership




 






THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED

UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”),

OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD,

TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH

REGISTRATION, UNLESS THE TRANSFEROR DELIVERS TO THE PARTNERSHIP

AN OPINION OF COUNSEL SATISFACTORY TO THE PARTNERSHIP, IN FORM

AND SUBSTANCE SATISFACTORY TO THE PARTNERSHIP, TO THE EFFECT

THAT THE PROPOSED SALE, TRANSFER OR OTHER DISPOSITION MAY BE

EFFECTED WITHOUT REGISTRATION UNDER THE ACT AND UNDER

APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS.




 





 









 









TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page
	ARTICLE 1 DEFINED TERMS	 	 	1	 
	 	 	 
	 	 	 	 
	ARTICLE 2 ORGANIZATIONAL MATTERS	 	 	16	 
	 	 	 
	 	 	 	 
	     Section 2.1	 	Organization
	 	 	16	 
	     Section 2.2	 	Name
	 	 	16	 
	     Section 2.3	 	Registered Office and Agent; Principal Office
	 	 	16	 
	     Section 2.4	 	Power of Attorney
	 	 	16	 
	     Section 2.5	 	Term
	 	 	17	 
	 	 	 
	 	 	 	 
	ARTICLE 3 PURPOSE	 	 	18	 
	 	 	 
	 	 	 	 
	     Section 3.1	 	Purpose and Business
	 	 	18	 
	     Section 3.2	 	Powers
	 	 	18	 
	     Section 3.3	 	Partnership Only for Purposes Specified
	 	 	18	 
	     Section 3.4	 	Representations and Warranties by the Parties
	 	 	18	 
	 	 	 
	 	 	 	 
	ARTICLE 4 CAPITAL CONTRIBUTIONS	 	 	20	 
	 	 	 
	 	 	 	 
	     Section 4.1	 	Capital Contributions of the Partners
	 	 	20	 
	     Section 4.2	 	Issuances of Additional Partnership Interests
	 	 	20	 
	     Section 4.3	 	Additional Funds
	 	 	21	 
	     Section 4.4	 	Stock Option Plans
	 	 	22	 
	     Section 4.5	 	No Interest; No Return
	 	 	23	 
	     Section 4.6	 	Conversion of Junior Shares
	 	 	23	 
	 	 	 
	 	 	 	 
	ARTICLE 5 DISTRIBUTIONS	 	 	24	 
	 	 	 
	 	 	 	 
	     Section 5.1	 	Requirement and Characterization of Distributions
	 	 	24	 
	     Section 5.2	 	Distributions in Kind
	 	 	24	 
	     Section 5.3	 	Amounts Withheld
	 	 	24	 
	     Section 5.4	 	Distributions Upon Liquidation
	 	 	24	 
	     Section 5.5	 	Restricted Distributions
	 	 	24	 
	 	 	 
	 	 	 	 
	ARTICLE 6 ALLOCATIONS	 	 	24	 
	 	 	 
	 	 	 	 
	     Section 6.1	 	Timing and Amount of Allocations of Net Income and Net Loss
	 	 	24	 
	     Section 6.2	 	General Allocations
	 	 	25	 
	     Section 6.3	 	Additional Allocation Provisions
	 	 	25	 
	     Section 6.4	 	Tax Allocations
	 	 	27	 
	 	 	 
	 	 	 	 
	ARTICLE 7 MANAGEMENT AND OPERATIONS OF BUSINESS	 	 	27	 
	 	 	 
	 	 	 	 
	     Section 7.1	 	Management
	 	 	27	 
	     Section 7.2	 	Certificate of Limited Partnership
	 	 	30	 
	     Section 7.3	 	Restrictions on General Partner’s Authority
	 	 	30	 






i









 






	 	 	 	 	 	 	 
	 	 	 	 	Page
	     Section 7.4	 	Reimbursement of the General Partner
	 	 	32	 
	     Section 7.5	 	Outside Activities of the Previous General Partner and the General Partner
	 	 	32	 
	     Section 7.6	 	Contracts with Affiliates
	 	 	33	 
	     Section 7.7	 	Indemnification
	 	 	34	 
	     Section 7.8	 	Liability of the General Partner
	 	 	35	 
	     Section 7.9	 	Other Matters Concerning the General Partner
	 	 	36	 
	     Section 7.10	 	Title to Partnership Assets
	 	 	37	 
	     Section 7.11	 	Reliance by Third Parties
	 	 	37	 
	 	 	 
	 	 	 	 
	ARTICLE 8 RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS	 	 	37	 
	 	 	 
	 	 	 	 
	     Section 8.1	 	Limitation of Liability
	 	 	37	 
	     Section 8.2	 	Management of Business
	 	 	37	 
	     Section 8.3	 	Outside Activities of Limited Partners
	 	 	37	 
	     Section 8.4	 	Return of Capital
	 	 	38	 
	     Section 8.5	 	Rights of Limited Partners Relating to the Partnership
	 	 	38	 
	     Section 8.6	 	Redemption Rights of Qualifying Parties
	 	 	39	 
	     Section 8.7	 	Partnership Right to Call Limited Partner Interests
	 	 	42	 
	 	 	 
	 	 	 	 
	ARTICLE 9 BOOKS, RECORDS, ACCOUNTING AND REPORTS	 	 	42	 
	 	 	 
	 	 	 	 
	     Section 9.1	 	Records and Accounting
	 	 	42	 
	     Section 9.2	 	Fiscal Year
	 	 	43	 
	     Section 9.3	 	Reports
	 	 	43	 
	 	 	 
	 	 	 	 
	ARTICLE 10 TAX MATTERS	 	 	43	 
	 	 	 
	 	 	 	 
	     Section 10.1	 	Preparation of Tax Returns
	 	 	43	 
	     Section 10.2	 	Tax Elections
	 	 	43	 
	     Section 10.3	 	Tax Matters Partner
	 	 	44	 
	     Section 10.4	 	Withholding
	 	 	45	 
	 	 	 
	 	 	 	 
	ARTICLE 11 TRANSFERS AND WITHDRAWALS	 	 	46	 
	 	 	 
	 	 	 	 
	     Section 11.1	 	Transfer
	 	 	46	 
	     Section 11.2	 	Transfer of General Partner’s Partnership Interest
	 	 	46	 
	     Section 11.3	 	Limited Partners’ Rights to Transfer
	 	 	47	 
	     Section 11.4	 	Substituted Limited Partners
	 	 	49	 
	     Section 11.5	 	Assignees
	 	 	49	 
	     Section 11.6	 	General Provisions
	 	 	49	 
	 	 	 
	 	 	 	 
	ARTICLE 12 ADMISSION OF PARTNERS	 	 	51	 
	 	 	 
	 	 	 	 
	     Section 12.1	 	Admission of Successor General Partner
	 	 	51	 
	     Section 12.2	 	Admission of Additional Limited Partners
	 	 	51	 
	     Section 12.3	 	Amendment of Agreement and Certificate of Limited Partnership
	 	 	51	 
	     Section 12.4	 	Admission of Initial Limited Partners
	 	 	51	 
	 	 	 
	 	 	 	 
	ARTICLE 13 DISSOLUTION, LIQUIDATION AND TERMINATION	 	 	52	 
	 	 	 
	 	 	 	 
	     Section 13.1	 	Dissolution
	 	 	52	 






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	 	 	 	 	Page
	     Section 13.2	 	Winding Up
	 	 	52	 
	     Section 13.3	 	Deemed Distribution and Recontribution
	 	 	53	 
	     Section 13.4	 	Rights of Limited Partners
	 	 	54	 
	     Section 13.5	 	Notice of Dissolution
	 	 	54	 
	     Section 13.6	 	Cancellation of Certificate of Limited Partnership
	 	 	54	 
	     Section 13.7	 	Reasonable Time for Winding-Up
	 	 	54	 
	 	 	 
	 	 	 	 
	ARTICLE 14 PROCEDURES FOR ACTIONS AND CONSENTS OF PARTNERS; AMENDMENTS; MEETINGS	 	 	54	 
	 	 	 
	 	 	 	 
	     Section 14.1	 	Procedures for Actions and Consents of Partners
	 	 	54	 
	     Section 14.2	 	Amendments
	 	 	54	 
	     Section 14.3	 	Meetings of the Partners
	 	 	55	 
	 	 	 
	 	 	 	 
	ARTICLE 15 GENERAL PROVISIONS	 	 	55	 
	 	 	 
	 	 	 	 
	     Section 15.1	 	Addresses and Notice
	 	 	55	 
	     Section 15.2	 	Titles and Captions
	 	 	55	 
	     Section 15.3	 	Pronouns and Plurals
	 	 	55	 
	     Section 15.4	 	Further Action
	 	 	56	 
	     Section 15.5	 	Binding Effect
	 	 	56	 
	     Section 15.6	 	Waiver
	 	 	56	 
	     Section 15.7	 	Counterparts
	 	 	56	 
	     Section 15.8	 	Applicable Law
	 	 	56	 
	     Section 15.9	 	Entire Agreement
	 	 	56	 
	     Section 15.10	 	Invalidity of Provisions
	 	 	56	 
	     Section 15.11	 	Limitation to Preserve REIT Status
	 	 	56	 
	     Section 15.12	 	No Partition
	 	 	57	 
	     Section 15.13	 	No Third-Party Rights Created Hereby
	 	 	57	 
	 	 	 
	 	 	 	 
	EXHIBIT A	 	PARTNERS AND PARTNERSHIP UNITS
	 	 	A-1	 
	 	 	 
	 	 	 	 
	EXHIBIT B	 	EXAMPLES REGARDING ADJUSTMENT FACTOR
	 	 	B-1	 
	 	 	 
	 	 	 	 
	EXHIBIT C	 	LIST OF DESIGNATED PARTIES
	 	 	C-1	 
	 	 	 
	 	 	 	 
	EXHIBIT D	 	NOTICE OF REDEMPTION
	 	 	D-1	 
	 	 	 
	 	 	 	 
	 	 	 
	 	 	 	 
	EXHIBIT E	 	FORM OF UNIT CERTIFICATE
	 	 	E-1	 
	 	 	 
	 	 	 	 
	EXHIBIT F	 	PARTNERSHIP UNIT DESIGNATION OF THE CLASS I HIGH PERFORMANCE PARTNERSHIP UNITS
	 	 	F-1	 
	 	 	 
	 	 	 	 
	EXHIBIT G	 	PARTNERSHIP UNIT DESIGNATION OF THE CLASS G PARTNERSHIP PREFERRED UNITS
	 	 	G-1	 
	 	 	 
	 	 	 	 
	EXHIBIT H	 	PARTNERSHIP UNIT DESIGNATION OF THE CLASS ONE PARTNERSHIP PREFERRED UNITS
	 	 	H-1	 
	 	 	 
	 	 	 	 
	EXHIBIT I	 	PARTNERSHIP UNIT DESIGNATION OF THE CLASS TWO PARTNERSHIP PREFERRED UNITS
	 	 	I-1	 






iii









 






	 	 	 	 	 	 	 
	 	 	 	 	Page
	EXHIBIT J	 	PARTNERSHIP UNIT DESIGNATION OF THE CLASS THREE PARTNERSHIP PREFERRED UNITS
	 	 	J-1	 
	 	 	 
	 	 	 	 
	EXHIBIT K	 	PARTNERSHIP UNIT DESIGNATION OF THE CLASS FOUR PARTNERSHIP PREFERRED UNITS
	 	 	K-1	 
	 	 	 
	 	 	 	 
	EXHIBIT L	 	PARTNERSHIP UNIT DESIGNATION OF THE CLASS FIVE PARTNERSHIP PREFERRED UNITS
	 	 	L-1	 
	 	 	 
	 	 	 	 
	EXHIBIT M	 	PARTNERSHIP UNIT DESIGNATION OF THE CLASS SIX PARTNERSHIP PREFERRED UNITS
	 	 	M-1	 
	 	 	 
	 	 	 	 
	EXHIBIT N	 	PARTNERSHIP UNIT DESIGNATION OF THE CLASS SEVEN PARTNERSHIP UNITS
	 	 	N-1	 
	 	 	 
	 	 	 	 
	EXHIBIT O	 	PARTNERSHIP UNIT DESIGNATION OF THE CLASS EIGHT PARTNERSHIP PREFERRED UNITS
	 	 	O-1	 
	 	 	 
	 	 	 	 
	EXHIBIT P	 	PARTNERSHIP UNIT DESIGNATION OF THE CLASS T PARTNERSHIP PREFERRED UNITS
	 	 	P-1	 
	 	 	 
	 	 	 	 
	EXHIBIT Q	 	PARTNERSHIP UNIT DESIGNATION OF THE CLASS U PARTNERSHIP PREFERRED UNITS
	 	 	Q-1	 
	 	 	 
	 	 	 	 
	EXHIBIT R	 	PARTNERSHIP UNIT DESIGNATION OF THE CLASS V PARTNERSHIP PREFERRED UNITS
	 	 	R-1	 
	 	 	 
	 	 	 	 
	EXHIBIT S	 	PARTNERSHIP UNIT DESIGNATION OF THE CLASS W PARTNERSHIP PREFERRED UNITS
	 	 	S-1	 
	 	 	 
	 	 	 	 
	EXHIBIT T	 	PARTNERSHIP UNIT DESIGNATION OF THE CLASS Y PARTNERSHIP PREFERRED UNITS
	 	 	T-1	 
	 	 	 
	 	 	 	 
	EXHIBIT U	 	PARTNERSHIP UNIT DESIGNATION OF THE CLASS VIII HIGH PERFORMANCE PARTNERSHIP UNITS
	 	 	U-1	 
	 	 	 
	 	 	 	 
	EXHIBIT V	 	PARTNERSHIP UNIT DESIGNATION OF THE CLASS IX HIGH PERFORMANCE PARTNERSHIP UNITS
	 	 	V-1	 
	 	 	 
	 	 	 	 
	EXHIBIT W	 	PARTNERSHIP UNIT DESIGNATION OF THE SERIES A COMMUNITY REINVESTMENT ACT PERPETUAL PARTNERSHIP PREFERRED UNITS
	 	 	W-1	 







iv









 








FOURTH AMENDED AND RESTATED AGREEMENT OF

LIMITED PARTNERSHIP OF AIMCO PROPERTIES, L.P.




          THIS FOURTH AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF AIMCO PROPERTIES, L.P.,
dated as of July 29, 1994, and restated as of February 28, 2007, is entered into by and among
Apartment Investment and Management Company, a Maryland corporation (the “Previous General
Partner”), AIMCO-GP, Inc., a Delaware corporation (the “General Partner”), AIMCO-LP, Inc., a
Delaware corporation (the “Special Limited Partner”), and the other Limited Partners (as defined
below).




          WHEREAS, the General Partner has approved an amendment and restatement of the Agreement of
Limited Partnership of AIMCO Properties, L.P. on the terms set forth herein.




          NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:




ARTICLE 1

DEFINED TERMS




          The following definitions shall be for all purposes, unless otherwise clearly indicated to the
contrary, applied to the terms used in this Agreement.




          “Act” means the Delaware Revised Uniform Limited Partnership Act, as it may be amended
from time to time, and any successor to such statute.




          “Actions” has the meaning set forth in Section 7.7 hereof.




          “Additional Funds” has the meaning set forth in Section 4.3.A hereof.




          “Additional Limited Partner” means a Person who is admitted to the Partnership as a
Limited Partner pursuant to Section 4.2 and Section 12.2 hereof and who is shown as such on the
books and records of the Partnership.




          “Adjusted Capital Account Deficit” means, with respect to any Partner, the deficit
balance, if any, in such Partner’s Capital Account as of the end of the relevant Fiscal Year, after
giving effect to the following adjustments:





          (i) decrease such deficit by any amounts that such Partner is obligated to
restore pursuant to this Agreement or by operation of law upon liquidation of such
Partner’s Partnership Interest or is deemed to be obligated to restore pursuant to
the penultimate sentence of each of Regulations Sections 1.704-2(g)(1) and
1.704-2(i)(5); and




          (ii) increase such deficit by the items described in Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) and (6).


The foregoing definition of “Adjusted Capital Account Deficit” is intended to comply with the
provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently
therewith.




 









 








          “Adjustment Factor” means 1.0; provided, however, that in the event
that:





          (i) the Previous General Partner (a) declares or pays a dividend on its
outstanding REIT Shares in REIT Shares or makes a distribution to all holders of its
outstanding REIT Shares in REIT Shares, (b) splits or subdivides its outstanding
REIT Shares or (c) effects a reverse stock split or otherwise combines its
outstanding REIT Shares into a smaller number of REIT Shares, the Adjustment Factor
shall be adjusted by multiplying the Adjustment Factor previously in effect by a
fraction, (i) the numerator of which shall be the number of REIT Shares issued and
outstanding on the record date for such dividend, distribution, split, subdivision,
reverse split or combination (assuming for such purposes that such dividend,
distribution, split, subdivision, reverse split or combination has occurred as of
such time) and (ii) the denominator of which shall be the actual number of REIT
Shares (determined without the above assumption) issued and outstanding on the
record date for such dividend, distribution, split, subdivision, reverse split or
combination;




          (iii) the Previous General Partner distributes any rights, options or warrants
to all holders of its REIT Shares to subscribe for or to purchase or to otherwise
acquire REIT Shares (or other securities or rights convertible into, exchangeable
for or exercisable for REIT Shares) at a price per share less than the Value of a
REIT Share on the record date for such distribution (each a “Distributed
Right”), then the Adjustment Factor shall be adjusted by multiplying the
Adjustment Factor previously in effect by a fraction (a) the numerator of which
shall be the number of REIT Shares issued and outstanding on the record date plus
the maximum number of REIT Shares purchasable under such Distributed Rights and (b)
the denominator of which shall be the number of REIT Shares issued and outstanding
on the record date plus a fraction (1) the numerator of which is the maximum number
of REIT Shares purchasable under such Distributed Rights times the minimum purchase
price per REIT Share under such Distributed Rights and (2) the denominator of which
is the Value of a REIT Share as of the record date; provided,
however, that, if any such Distributed Rights expire or become no longer
exercisable, then the Adjustment Factor shall be adjusted, effective retroactive to
the date of distribution of the Distributed Rights, to reflect a reduced maximum
number of REIT Shares or any change in the minimum purchase price for the purposes
of the above fraction; and




          (iv) the Previous General Partner shall, by dividend or otherwise, distribute
to all holders of its REIT Shares evidences of its indebtedness or assets (including
securities, but excluding any dividend or distribution referred to in subsection (i)
above), which evidences of indebtedness or assets relate to assets not received by
the Previous General Partner, the General Partner and/or the Special Limited Partner
pursuant to a pro rata distribution by the Partnership, then the Adjustment Factor
shall be adjusted to equal the amount determined by multiplying the Adjustment
Factor in effect immediately prior to the close of business on the date fixed for
determination of shareholders entitled to receive such distribution by a fraction
(i) the numerator shall be such Value of a REIT Share on the date fixed for such
determination and (ii) the denominator shall be the Value of a REIT Share on the
dates fixed for such determination less the then fair market value (as determined by
the General Partner, whose determination shall be conclusive) of the portion of the
evidences of indebtedness or assets so distributed applicable to one REIT Share.


Any adjustments to the Adjustment Factor shall become effective immediately after the effective
date of such event, retroactive to the record date, if any, for such event, provided,
however, that any Limited Partner may waive, by written notice to the General Partner, the
effect of any adjustment to the Adjustment Factor applicable to the Partnership Common Units held
by such Limited Partner, and, thereafter, such adjustment will not be effective as to


2









 






such Partnership Common Units. For illustrative purposes, examples of adjustments to the
Adjustment Factor are set forth on Exhibit B attached hereto.




          “Affiliate” means, with respect to any Person, any Person directly or indirectly
controlling or controlled by or under common control with such Person. For the purposes of this
definition, “control” when used with respect to any Person means the possession, directly
or indirectly, of the power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities, by contract or otherwise, and the terms
“controlling” and “controlled” have meanings correlative to the foregoing.




          “Agreement” means this Fourth Amended and Restated Agreement of Limited Partnership of
AIMCO Properties, L.P., as it may be amended, supplemented or restated from time to time.




          “Applicable Percentage” has the meaning set forth in Section 8.6.B hereof.




          “Appraisal” means, with respect to any assets, the written opinion of an independent
third party experienced in the valuation of similar assets, selected by the General Partner in good
faith. Such opinion may be in the form of an opinion by such independent third party that the
value for such property or asset as set by the General Partner is fair, from a financial point of
view, to the Partnership.




          “Assignee” means a Person to whom one or more Partnership Common Units have been
Transferred in a manner permitted under this Agreement, but who has not become a Substituted
Limited Partner, and who has the rights set forth in Section 11.5 hereof.




          “Available Cash” means, with respect to any period for which such calculation is being
made,





          (i) the sum, without duplication, of:




          (1) the Partnership’s Net Income or Net Loss (as the case may
be) for such period,




          (2) Depreciation and all other noncash charges to the extent
deducted in determining Net Income or Net Loss for such period,




          (3) the amount of any reduction in reserves of the Partnership
referred to in clause (ii)(6) below (including, without limitation,
reductions resulting because the General Partner determines such
amounts are no longer necessary),




          (4) the excess, if any, of the net cash proceeds from the sale,
exchange, disposition, financing or refinancing of Partnership
property for such period over the gain (or loss, as the case may be)
recognized from such sale, exchange, disposition, financing or
refinancing during such period (excluding Terminating Capital
Transactions), and




          (5) all other cash received (including amounts previously
accrued as Net Income and amounts of deferred income) or any net
amounts borrowed by the Partnership for such period that was not
included in determining Net Income or Net Loss for such period;



3









 






          (ii) less the sum, without duplication, of:




          (1) all principal debt payments made during such period by the
Partnership,




          (2) capital expenditures made by the Partnership during such
period,




          (3) investments in any entity (including loans made thereto) to
the extent that such investments are not otherwise described in
clause (ii)(1) or clause (ii)(2) above,




          (4) all other expenditures and payments not deducted in
determining Net Income or Net Loss for such period (including
amounts paid in respect of expenses previously accrued),




          (5) any amount included in determining Net Income or Net Loss
for such period that was not received by the Partnership during such
period,




          (6) the amount of any increase in reserves (including, without
limitation, working capital reserves) established during such period
that the General Partner determines are necessary or appropriate in
its sole and absolute discretion, and




          (7) any amount distributed or paid in redemption of any Limited
Partner Interest or Partnership Units including, without limitation,
any Cash Amount paid.


Notwithstanding the foregoing, Available Cash shall not include (a) any cash received or reductions
in reserves, or take into account any disbursements made, or reserves established, after
dissolution and the commencement of the liquidation and winding up of the Partnership or (b) any
Capital Contributions, whenever received.




          “Business Day” means any day except a Saturday, Sunday or other day on which
commercial banks in Denver, Colorado, Los Angeles, California or New York, New York are authorized
or required by law to close.




          “Capital Account” means, with respect to any Partner, the Capital Account maintained
by the General Partner for such Partner on the Partnership’s books and records in accordance with
the following provisions:




               (a) To each Partner’s Capital Account, there shall be added such Partner’s Capital
Contributions, such Partner’s distributive share of Net Income and any items in the nature of
income or gain that are specially allocated pursuant to Section 6.3 hereof, and the principal
amount of any Partnership liabilities assumed by such Partner or that are secured by any property
distributed to such Partner.



               (b) From each Partner’s Capital Account, there shall be subtracted the amount of cash and the
Gross Asset Value of any property distributed to such Partner pursuant to any provision of this
Agreement, such Partner’s distributive share of Net Losses and any items in the nature of expenses
or losses that are specially allocated pursuant to Section 6.3 hereof, and the principal amount of
any liabilities of such Partner assumed by the Partnership or that are secured by any property
contributed by such Partner to the Partnership.



4









 





               (c) In the event any interest in the Partnership is Transferred in accordance with the terms
of this Agreement, the transferee shall succeed to the Capital Account of the transferor to the
extent that it relates to the Transferred interest.



               (d) In determining the principal amount of any liability for purposes of subsections (a) and
(b) hereof, there shall be taken into account Code Section 752(c) and any other applicable
provisions of the Code and Regulations.



               (e) The provisions of this Agreement relating to the maintenance of Capital Accounts are
intended to comply with Regulations Sections 1.704-1(b) and 1.704-2, and shall be interpreted and
applied in a manner consistent with such Regulations. If the General Partner shall determine that
it is prudent to modify the manner in which the Capital Accounts are maintained in order to comply
with such Regulations, the General Partner may make such modification provided that such
modification will not have a material effect on the amounts distributable to any Partner without
such Partner’s Consent. The General Partner also shall (i) make any adjustments that are necessary
or appropriate to maintain equality between the Capital Accounts of the Partners and the amount of
Partnership capital reflected on the Partnership’s balance sheet, as computed for book purposes, in
accordance with Regulations Section 1.704-1(b)(2)(iv)(q) and (ii) make any appropriate
modifications in the event that unanticipated events might otherwise cause this Agreement not to
comply with Regulations Section 1.704-1(b) or Section 1.704-2.



          “Capital Contribution” means, with respect to any Partner, the amount of money and the
initial Gross Asset Value of any Contributed Property that such Partner contributes to the
Partnership pursuant to Section 4.1, 4.2 or 4.3 hereof or is deemed to contribute pursuant to
Section 4.4 hereof.




          “Cash Amount” means the lesser of (a) an amount of cash equal to the product of (i)
the Value of a REIT Share and (ii) the REIT Shares Amount determined as of the applicable Valuation
Date or (b) in the case of a Declination followed by a Public Offering Funding, the Public Offering
Funding Amount.




          “Certificate” means the Certificate of Limited Partnership of the Partnership filed in
the office of the Secretary of State of the State of Delaware, as amended from time to time in
accordance with the terms hereof and the Act.




          “Charter” means the Articles of Amendment and Restatement of the Previous General
Partner filed with the Maryland State Department of Assessments and Taxation on July 19, 1994, as
amended, supplemented or restated from time to time.




          “Code” means the Internal Revenue Code of 1986, as amended and in effect from time to
time or any successor statute thereto, as interpreted by the applicable Regulations thereunder.
Any reference herein to a specific section or sections of the Code shall be deemed to include a
reference to any corresponding provision of future law.




          “Company Employee” means any officer or other employee (as defined in accordance with
Section 3401(c) of the Code) of the Previous General Partner or any corporation that is then a
Subsidiary of the Previous General Partner.




          “Consent” means the consent to, approval of, or vote in favor of a proposed action by
a Partner given in accordance with Article 14 hereof.




          “Consent of the Limited Partners” means the Consent of a Majority in Interest of the
Limited Partners, which Consent shall be obtained prior to the taking of any action for which it is
required by this Agreement




5









 







and, except as otherwise provided in this Agreement, may be given or withheld by a Majority in
Interest of the Limited Partners, in their reasonable discretion.




          “Contributed Property” means each Property or other asset, in such form as may be
permitted by the Act, but excluding cash, contributed or deemed contributed to the Partnership (or
deemed contributed to the Partnership on termination and reconstitution thereof pursuant to Code
Section 708).




          “Controlled Entity” means, as to any Limited Partner, (a) any corporation more than
fifty percent (50%) of the outstanding voting stock of which is owned by such Limited Partner or
such Limited Partner’s Family Members, (b) any trust, whether or not revocable, of which such
Limited Partner or such Limited Partner’s Family Members are the sole beneficiaries, (c) any
partnership of which such Limited Partner is the managing partner and in which such Limited Partner
or such Limited Partner’s Family Members hold partnership interests representing at least
twenty-five percent (25%) of such partnership’s capital and profits and (d) any limited liability
company of which such Limited Partner is the manager and in which such Limited Partner or such
Limited Partner’s Family Members hold membership interests representing at least twenty-five
percent (25%) of such limited liability company’s capital and profits.




          “Controlling Person” means any Person, whatever his or her title, who performs
executive or senior management functions for the General Partner or its Affiliates similar to those
of directors, executive management and senior management, or any Person who either holds a two
percent (2%) or more equity interest in the General Partner or its Affiliates, or has the power to
direct or cause the direction of the General Partner or its Affiliates, whether through the
ownership of voting securities, by contract or otherwise, or, in the absence of a specific role or
title, any Person having the power to direct or cause the direction of the management-level
employees and policies of the General Partner or its Affiliates. It is not intended that every
Person who carries a title such as vice president, senior vice president, secretary or treasurer be
included in the definition of “Controlling Person.”




          “Cut-Off Date” means the fifth (5th) Business Day after the General Partner’s receipt
of a Notice of Redemption.




          “Debt” means, as to any Person, as of any date of determination, (i) all indebtedness
of such Person for borrowed money or for the deferred purchase price of property or services; (ii)
all amounts owed by such Person to banks or other Persons in respect of reimbursement obligations
under letters of credit, surety bonds and other similar instruments guaranteeing payment or other
performance of obligations by such Person; (iii) all indebtedness for borrowed money or for the
deferred purchase price of property or services secured by any lien on any property owned by such
Person, to the extent attributable to such Person’s interest in such property, even though such
Person has not assumed or become liable for the payment thereof; and (iv) lease obligations of such
Person that, in accordance with generally accepted accounting principles, should be capitalized.




          “Declination” has the meaning set forth in Section 8.6.D hereof.




          “Depreciation” means, for each Fiscal Year or other applicable period, an amount equal
to the federal income tax depreciation, amortization or other cost recovery deduction allowable
with respect to an asset for such year or other period, except that if the Gross Asset Value of an
asset differs from its adjusted basis for federal income tax purposes at the beginning of such year
or period, Depreciation shall be in an amount that bears the same ratio to such beginning Gross
Asset Value as the federal income tax depreciation, amortization or other cost recovery deduction
for such year or other period bears to such beginning adjusted tax basis; provided,
however, that if the federal income tax depreciation, amortization or other cost recovery
deduction for such year or period is zero, Depreciation shall be determined with reference to such
beginning Gross Asset Value using any reasonable method selected by the General Partner.




6









 








          “Designated Parties” means the Persons designated on Exhibit C attached
hereto. The General Partner may, in its sole and absolute discretion, amend Exhibit C to
add Persons to be designated as Designated Parties.




          “Distributed Right” has the meaning set forth in the definition of “Adjustment
Factor.”




          “Effective Date” means July 29, 1994.




          “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.




          “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules
and regulations of the SEC promulgated thereunder.




          “Family Members” means, as to a Person that is an individual, such Person’s spouse,
ancestors, descendants (whether by blood or by adoption), brothers, sisters and inter vivos or
testamentary trusts of which only such Person and his spouse, ancestors, descendants (whether by
blood or by adoption), brothers and sisters are beneficiaries.




          “Fiscal Year” means the fiscal year of the Partnership, which shall be the calendar
year.




          “Funding Debt” means any Debt incurred by or on behalf of the Previous General
Partner, the General Partner or the Special Limited Partner for the purpose of providing funds to
the Partnership.




          “General Partner” means AIMCO-GP, Inc., a Delaware corporation, and its successors and
assigns, as the general partner of the Partnership in their capacities as general partner of the
Partnership.




          “General Partner Interest” means the Partnership Interest held by the General Partner,
which Partnership Interest is an interest as a general partner under the Act. A General Partner
Interest may be expressed as a number of Partnership Common Units, Partnership Preferred Units or
any other Partnership Units.




          “General Partner Loan” has the meaning set forth in Section 4.3.D hereof.




          “Gross Asset Value” means, with respect to any asset, the asset’s adjusted basis for
federal income tax purposes, except as follows:




               (a) The initial Gross Asset Value of any asset contributed by a Partner to the Partnership
shall be the gross fair market values of such assets as determined by the General Partner and
agreed to by the contributing Partner. In any case in which the General Partner and the
contributing Partner are unable to agree as to the gross fair market value of any contributed asset
or assets, such gross fair market value shall be determined by Appraisal.



               (b) The Gross Asset Values of all Partnership assets immediately prior to the occurrence of
any event described in clause (i), clause (ii), clause (iii), clause (iv) or clause (v) hereof
shall be adjusted to equal their respective gross fair market values, as determined by the General
Partner using such reasonable method of valuation as it may adopt, as of the following times:




               (i) the acquisition of an additional interest in the Partnership (other than in
connection with the execution of this Agreement but including, without limitation,
acquisitions pursuant to Section 4.2 hereof or contributions or deemed contributions
by the General Partner pursuant to Section 4.2 hereof) by a new or existing Partner
in exchange for more than a de minimis Capital Contribution, if the General Partner
reasonably determines that such



7









 







adjustment is necessary or appropriate to reflect the relative economic
interests of the Partners in the Partnership;




               (ii) the distribution by the Partnership to a Partner of more than a de minimis
amount of Partnership property as consideration for an interest in the Partnership,
if the General Partner reasonably determines that such adjustment is necessary or
appropriate to reflect the relative economic interests of the Partners in the
Partnership;




               (iii) the liquidation of the Partnership within the meaning of Regulations
Section 1.704-1(b)(2)(ii)(g);




               (iv) upon the admission of a successor General Partner pursuant to Section 12.1
hereof; and




               (v) at such other times as the General Partner shall reasonably determine
necessary or advisable in order to comply with Regulations Sections 1.704-1(b) and
1.704-2.



               (c) The Gross Asset Value of any Partnership asset distributed to a Partner shall be the gross
fair market value of such asset on the date of distribution as determined by the distributee and
the General Partner provided that, if the distributee is the General Partner or if the distributee
and the General Partner cannot agree on such a determination, such gross fair market value shall be
determined by Appraisal.



               (d) The Gross Asset Values of Partnership assets shall be increased (or decreased) to reflect
any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or Code
Section 743(b), but only to the extent that such adjustments are taken into account in determining
Capital Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m); provided,
however, that Gross Asset Values shall not be adjusted pursuant to this subsection (d) to
the extent that the General Partner reasonably determines that an adjustment pursuant to subsection
(b) above is necessary or appropriate in connection with a transaction that would otherwise result
in an adjustment pursuant to this subsection (d).



               (e) If the Gross Asset Value of a Partnership asset has been determined or adjusted pursuant
to subsection (a), subsection (b) or subsection (d) above, such Gross Asset Value shall thereafter
be adjusted by the Depreciation taken into account with respect to such asset for purposes of
computing Net Income and Net Losses.



          “Holder” means either (a) a Partner or (b) an Assignee, owning a Partnership Unit,
that is treated as a member of the Partnership for federal income tax purposes.




          “Incapacity” or “Incapacitated” means, (i) as to any Partner who is an
individual, death, total physical disability or entry by a court of competent jurisdiction
adjudicating such Partner incompetent to manage his or her person or his or her estate; (ii) as to
any Partner that is a corporation or limited liability company, the filing of a certificate of
dissolution, or its equivalent, for the corporation or the revocation of its charter; (iii) as to
any Partner that is a partnership, the dissolution and commencement of winding up of the
partnership; (iv) as to any Partner that is an estate, the distribution by the fiduciary of the
estate’s entire interest in the Partnership; (v) as to any trustee of a trust that is a Partner,
the termination of the trust (but not the substitution of a new trustee); or (vi) as to any
Partner, the bankruptcy of such Partner. For purposes of this definition, bankruptcy of a Partner
shall be deemed to have occurred when (a) the Partner commences a voluntary proceeding seeking
liquidation, reorganization or other relief of or against such Partner under any bankruptcy,
insolvency or other similar law now or hereafter in effect, (b) the Partner is adjudged as bankrupt
or insolvent, or a final and nonappealable order for relief under any bankruptcy, insolvency or
similar law now or hereafter in effect has been entered against the Partner, (c) the Partner
executes and




8









 







delivers a general assignment for the benefit of the Partner’s creditors, (d) the Partner
files an answer or other pleading admitting or failing to contest the material allegations of a
petition filed against the Partner in any proceeding of the nature described in clause (b) above,
(e) the Partner seeks, consents to or acquiesces in the appointment of a trustee, receiver or
liquidator for the Partner or for all or any substantial part of the Partner’s properties, (f) any
proceeding seeking liquidation, reorganization or other relief under any bankruptcy, insolvency or
other similar law now or hereafter in effect has not been dismissed within one hundred twenty (120)
days after the commencement thereof, (g) the appointment without the Partner’s consent or
acquiescence of a trustee, receiver or liquidator has not been vacated or stayed within ninety (90)
days of such appointment, or (h) an appointment referred to in clause (g) above is not vacated
within ninety (90) days after the expiration of any such stay.




          “Indemnitee” means (i) any Person made a party to a proceeding by reason of its status
as (A) the Previous General Partner or the General Partner or (B) a director of the Previous
General Partner or the General Partner or an officer or employee of the Partnership or the Previous
General Partner or the General Partner and (ii) such other Persons (including Affiliates of the
General Partner or the Partnership) as the General Partner may designate from time to time (whether
before or after the event giving rise to potential liability), in its sole and absolute discretion.




          “Independent Director” means a member of the Board of Directors of the Previous
General Partner who is not a Company Employee or a Partnership Employee.




          “Interest” means interest, original issue discount and other similar payments or
amounts paid by the Partnership for the use or forbearance of money.




          “IRS” means the Internal Revenue Service, which administers the internal revenue laws
of the United States.




          “Junior Share” means a share of the Previous General Partner’s Class B Common Stock,
par value $.01 per share.




          “Limited Partner” means the Special Limited Partner and any Person named as a Limited
Partner in Exhibit A attached hereto, as such Exhibit A may be amended from time to
time, or any Substituted Limited Partner or Additional Limited Partner, in such Person’s capacity
as a Limited Partner in the Partnership.




          “Limited Partner Interest” means a Partnership Interest of a Limited Partner in the
Partnership representing a fractional part of the Partnership Interests of all Limited Partners and
includes any and all benefits to which the holder of such a Partnership Interest may be entitled as
provided in this Agreement, together with all obligations of such Person to comply with the terms
and provisions of this Agreement. A Limited Partner Interest may be expressed as a number of
Partnership Common Units, Partnership Preferred Units or other Partnership Units.




          “Liquidating Event” has the meaning set forth in Section 13.1 hereof.




          “Liquidator” has the meaning set forth in Section 13.2.A hereof.




          “Majority in Interest of the Limited Partners” means Limited Partners (other than (i)
the Special Limited Partner and (ii) any Limited Partner fifty percent (50%) or more of whose
equity is owned, directly or indirectly, by the (a) General Partner or (b) any REIT as to which the
General Partner is a “qualified REIT subsidiary” (within the meaning of Code Section 856(i)(2)))
holding more than fifty percent (50%) of the outstanding Voting Units held by all Limited Partners
(other than (i) the Special Limited Partner and (ii) any Limited Partner fifty percent (50%) or
more of whose equity is owned, directly or indirectly, by (a) the General Partner or (b) any REIT
as to which the General Partner is a “qualified REIT subsidiary” (within the meaning of Code
Section 856(i)(2))).




9









 








          “Net Income” or “Net Loss” means, for each Fiscal Year of the Partnership, an
amount equal to the Partnership’s taxable income or loss for such year, determined in accordance
with Code Section 703(a) (for this purpose, all items of income, gain, loss or deduction required
to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or
loss), with the following adjustments:




               (f) Any income of the Partnership that is exempt from federal income tax and not otherwise
taken into account in computing Net Income (or Net Loss) pursuant to this definition of “Net
Income” or “Net Loss” shall be added to (or subtracted from, as the case may be) such taxable
income (or loss);



               (g) Any expenditure of the Partnership described in Code Section 705(a)(2)(B) or treated as a
Code Section 705(a)(2)(B) expenditure pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and not
otherwise taken into account in computing Net Income (or Net Loss) pursuant to this definition of
“Net Income” or “Net Loss,” shall be subtracted from (or added to, as the case may be) such taxable
income (or loss);



               (h) In the event the Gross Asset Value of any Partnership asset is adjusted pursuant to
subsection (b) or subsection (c) of the definition of “Gross Asset Value,” the amount of such
adjustment shall be taken into account as gain or loss from the disposition of such asset for
purposes of computing Net Income or Net Loss;



               (i) Gain or loss resulting from any disposition of property with respect to which gain or loss
is recognized for federal income tax purposes shall be computed by reference to the Gross Asset
Value of the property disposed of, notwithstanding that the adjusted tax basis of such property
differs from its Gross Asset Value;



               (j) In lieu of the depreciation, amortization and other cost recovery deductions that would
otherwise be taken into account in computing such taxable income or loss, there shall be taken into
account Depreciation for such Fiscal Year;



               (k) To the extent that an adjustment to the adjusted tax basis of any Partnership asset
pursuant to Code Section 734(b) or Code Section 743(b) is required pursuant to Regulations Section
1.704-1(b)(2)(iv)(m)(4) to be taken into account in determining Capital Accounts as a result of a
distribution other than in liquidation of a Partner’s interest in the Partnership, the amount of
such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the
asset) or loss (if the adjustment decreases the basis of the asset) from the disposition of the
asset and shall be taken into account for purposes of computing Net Income or Net Loss; and



               (l) Notwithstanding any other provision of this definition of “Net Income” or “Net Loss,” any
item that is specially allocated pursuant to Section 6.3 hereof shall not be taken into account in
computing Net Income or Net Loss. The amounts of the items of Partnership income, gain, loss or
deduction available to be specially allocated pursuant to Section 6.3 hereof shall be determined by
applying rules analogous to those set forth in this definition of “Net Income” or “Net Loss.”



          “New Securities” means (i) any rights, options, warrants or convertible or
exchangeable securities having the right to subscribe for or purchase REIT Shares or Preferred
Shares, excluding Junior Shares, Preferred Shares and grants under the Previous General Partner’s
Stock Option Plans, or (ii) any Debt issued by the Previous General Partner that provides any of
the rights described in clause (i).




          “Nonrecourse Deductions” has the meaning set forth in Regulations Section
1.704-2(b)(1), and the amount of Nonrecourse Deductions for a Fiscal Year shall be determined in
accordance with the rules of Regulations Section 1.704-2(c).




          “Nonrecourse Liability” has the meaning set forth in Regulations Section
1.752-1(a)(2).




10









 








          “Notice of Redemption” means the Notice of Redemption substantially in the form of
Exhibit D attached to this Agreement.




          “Optionee” means a Company Employee, Partnership Employee or Independent Director to
whom a stock option is granted under the Previous General Partner’s Stock Option Plans.




          “Original Limited Partners” means the Persons listed as the Limited Partners on
Exhibit A originally attached to this Agreement, without regard to any amendment thereto,
and does not include any Assignee or other transferee, including, without limitation, any
Substituted Limited Partner succeeding to all or any part of the Partnership Interest of any such
Person.




          “Ownership Limit” means the applicable restriction on ownership of shares of the
Previous General Partner imposed under the Charter.




          “Partner” means the General Partner or a Limited Partner, and “Partners” means the
General Partner and the Limited Partners.




          “Partner Minimum Gain” means an amount, with respect to each Partner Nonrecourse Debt,
equal to the Partnership Minimum Gain that would result if such Partner Nonrecourse Debt were
treated as a Nonrecourse Liability, determined in accordance with Regulations Section
1.704-2(i)(3).




          “Partner Nonrecourse Debt” has the meaning set forth in Regulations Section
1.704-2(b)(4).




          “Partner Nonrecourse Deductions” has the meaning set forth in Regulations Section
1.704-2(i)(2), and the amount of Partner Nonrecourse Deductions with respect to a Partner
Nonrecourse Debt for a Fiscal Year shall be determined in accordance with the rules of Regulations
Section 1.704-2(i)(2).




          “Partnership” means the limited partnership formed under the Act and pursuant to this
Agreement, and any successor thereto.




          “Partnership Common Unit” means a fractional share of the Partnership Interests of all
Partners issued pursuant to Sections 4.1 and 4.2 hereof, but does not include any Partnership
Preferred Unit or any other Partnership Unit specified in a Partnership Unit Designation as being
other than a Partnership Common Unit; provided, however, that the General Partner
Interest and the Limited Partner Interests shall have the differences in rights and privileges as
specified in this Agreement. The ownership of Partnership Common Units may (but need not, in the
sole and absolute discretion of the General Partner) be evidenced by the form of certificate for
Partnership Common Units attached hereto as Exhibit E.




          “Partnership Employee” means any officer or other employee (as defined in accordance
with Section 3401(c) of the Code) of the Partnership, or any entity that is then a Subsidiary of
the Partnership.




          “Partnership Interest” means an ownership interest in the Partnership held by either a
Limited Partner or the General Partner and includes any and all benefits to which the holder of
such a Partnership Interest may be entitled as provided in this Agreement, together with all
obligations of such Person to comply with the terms and provisions of this Agreement. A
Partnership Interest may be expressed as a number of Partnership Common Units, Partnership
Preferred Units or other Partnership Units.




          “Partnership Minimum Gain” has the meaning set forth in Regulations Section
1.704-2(b)(2), and the amount of Partnership Minimum Gain, as well as any net increase or decrease
in Partnership Minimum Gain, for a Fiscal Year shall be determined in accordance with the rules of
Regulations Section 1.704-2(d).




11









 








          “Partnership Preferred Unit” means a fractional share of the Partnership Interests
that the General Partner has authorized pursuant to Section 4.2 hereof that has distribution
rights, or rights upon liquidation, winding up and dissolution, that are superior or prior to the
Partnership Common Units.




          “Partnership Record Date” means the record date established by the General Partner for
the distribution of Available Cash pursuant to Section 5.1 hereof, which record date shall
generally be the same as the record date established by the Previous General Partner for a
distribution to its shareholders of some or all of its portion of such distribution.




          “Partnership Subsidiary” means any partnership or limited liability company in any
unbroken chain of partnerships or limited liability companies beginning with the Partnership if
each of the partnerships or limited liability companies beginning with the Partnership if each of
the partnerships or limited liability companies other than the last partnership or limited
liability company in the unbroken chain then owns more than fifty percent (50%) of the capital or
profits interests in one of the other partnerships or limited liability companies.
“Partnership Subsidiary” shall also mean any corporation in which the Partnership and/or
any Partnership Subsidiary owns stock possessing fifty percent (50%) or more of the total combined
voting power of all classes of stock.




          “Partnership Unit” shall mean a Partnership Common Unit, a Partnership Preferred Unit
or any other fractional share of the Partnership Interests that the General Partner has authorized
pursuant to Section 4.2 hereof.




          “Partnership Unit Designation” shall have the meaning set forth in Section 4.2 hereof.




          “Percentage Interest” means, as to each Partner, its interest in the Partnership Units
as determined by dividing the Partnership Units owned by such Partner by the total number of
Partnership Units then outstanding.




          “Permitted Transfer” has the meaning set forth in Section 11.3.A hereof.




          “Person” means an individual or a corporation, partnership, trust, unincorporated
organization, association, limited liability company or other entity.




          “Pledge” has the meaning set forth in Section 11.3.A hereof.




          “Preferred Share” means a share of capital stock of the Previous General Partner now
or hereafter authorized or reclassified that has dividend rights, or rights upon liquidation,
winding up and dissolution, that are superior or prior to the REIT Shares.




          “Previous General Partner” means Apartment Investment and Management Company, a
Maryland corporation.




          “Previous General Partner’s Stock Option Plans” means any stock option or equity
incentive or award plan adopted by the Previous General Partner.




          “Primary Offering Notice” has the meaning set forth in Section 8.6.F(4) hereof.




          “Properties” means any assets and property of the Partnership such as, but not limited
to, interests in real property and personal property, including, without limitation, fee interests,
interests in ground leases, interests in limited liability companies, joint ventures or
partnerships, interests in mortgages, and Debt instruments as the Partnership may hold from time to
time.




          “Public Offering Funding” has the meaning set forth in Section 8.6.D(2) hereof.




12









 








          “Public Offering Funding Amount” means the dollar amount equal to (i) the product of
(x) the number of Registrable Shares sold in a Public Offering Funding and (y) the public offering
price per share of such Registrable Shares in such Public Offering Funding, less (ii) the aggregate
underwriting discounts and commissions in such Public Offering Funding.




          “Qualified Transferee” means an “accredited investor” as defined in Rule 501
promulgated under the Securities Act.




          “Qualifying Party” means (a) an Original Limited Partner, (b) an Additional Limited
Partner, (c) a Designated Party that is either a Substituted Limited Partner or an Assignee, (d) a
Family Member, or a lending institution as the pledgee of a Pledge, who is the transferee in a
Permitted Transfer or (e) with respect to any Notice of Redemption delivered to the General Partner
within the time period set forth in Section 11.3.A(4) hereof, a Substituted Limited Partner
succeeding to all or part of the Limited Partner Interest of (i) an Original Limited Partner, (ii)
an Additional Limited Partner, (iii) a Designated Party that is either a Substituted Limited
Partner or an Assignee or (iv) a Family Member, or a lending institution who is the pledgee of a
Pledge, who is the transferee in a Permitted Transfer.




          “Redeemable Units” means those Partnership Common Units issued to the Original Limited
Partners as of the Effective Date together with such additional Partnership Common Units that,
after the Effective Date, may be issued to Additional Limited Partners pursuant to Section 4.2
hereof.




          “Redemption” has the meaning set forth in Section 8.6.A hereof.




          “Registrable Shares” has the meaning set forth in Section 8.6.D(2) hereof.




          “Regulations” means the applicable income tax regulations under the Code, whether such
regulations are in proposed, temporary or final form, as such regulations may be amended from time
to time (including corresponding provisions of succeeding regulations).




          “Regulatory Allocations” has the meaning set forth in Section 6.3.B(viii) hereof.




          “REIT” means a real estate investment trust qualifying under Code Section 856.




          “REIT Partner” means (a) a Partner that is, or has made an election to qualify as, a
REIT, (b) any “qualified REIT subsidiary” (within the meaning of Code Section 856(i)(2)) of any
Partner that is, or has made an election to qualify as, a REIT and (c) any Partner, including,
without limitation, the General Partner and the Special Limited Partner, that is a “qualified REIT
subsidiary” (within the meaning of Code Section 856(i)(2)) of a REIT.




          “REIT Payment” has the meaning set forth in Section 15.11 hereof.




          “REIT Requirements” has the meaning set forth in Section 5.1.A hereof.




          “REIT Share” means a share of the Previous General Partner’s Class A Common Stock, par
value $.01 per share. Where relevant in this Agreement, “REIT Shares” includes shares of
the Previous General Partner’s Class A Common Stock, par value $.01 per share, issued upon
conversion of Preferred Shares or Junior Shares.




          “REIT Shares Amount” means a number of REIT Shares equal to the product of (a) the
number of Tendered Units and (b) the Adjustment Factor; provided, however, that, in
the event that the Previous General Partner issues to all holders of REIT Shares as of a certain
record date rights, options, warrants or convertible or exchangeable securities entitling the
Previous General Partner’s shareholders to subscribe for or purchase REIT Shares, or any other
securities or property (collectively, the “Rights”), with the record date for such Rights
issuance




13









 







falling within the period starting on the date of the Notice of Redemption and ending on the
day immediately preceding the Specified Redemption Date, which Rights will not be distributed
before the relevant Specified Redemption Date, then the REIT Shares Amount shall also include such
Rights that a holder of that number of REIT Shares would be entitled to receive, expressed, where
relevant hereunder, in a number of REIT Shares determined by the Previous General Partner in good
faith.




          “Related Party” means, with respect to any Person, any other Person whose ownership of
shares of the Previous General Partner’s capital stock would be attributed to the first such Person
under Code Section 544 (as modified by Code Section 856(h)(1)(B)).




          “Rights” has the meaning set forth in the definition of “REIT Shares Amount.”




          “SEC” means the Securities and Exchange Commission.




          “Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations of the SEC promulgated thereunder.




          “Single Funding Notice” has the meaning set forth in Section 8.6.D(3) hereof.




          “Special Limited Partner” means AIMCO-LP, Inc., a Delaware corporation.




          “Specified Redemption Date” means the later of (a) the tenth (10th) Business Day after
the receipt by the General Partner of a Notice of Redemption or (b) in the case of a Declination
followed by a Public Offering Funding, the Business Day next following the date of the closing of
the Public Offering Funding; provided, however, that no Specified Redemption Date
shall occur during the first Twelve-Month Period; provided, further, that the
Specified Redemption Date, as well as the closing of a Redemption, or an acquisition of Tendered
Units by the Previous General Partner pursuant to Section 8.6.B hereof, on any Specified Redemption
Date, may be deferred, in the General Partner’s sole and absolute discretion, for such time (but in
any event not more than one hundred fifty (150) days in the aggregate) as may reasonably be
required to effect, as applicable, (i) a Public Offering Funding or other necessary funding
arrangements, (ii) compliance with the Securities Act or other law (including, but not limited to,
(a) state “blue sky” or other securities laws and (b) the expiration or termination of the
applicable waiting period, if any, under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended) and (iii) satisfaction or waiver of other commercially reasonable and customary closing
conditions and requirements for a transaction of such nature.




          “Subsidiary” means, with respect to any Person, any corporation or other entity of
which a majority of (i) the voting power of the voting equity securities or (ii) the outstanding
equity interests is owned, directly or indirectly, by such Person; provided,
however, that, with respect to the Partnership, “Subsidiary” means solely a
partnership or limited liability company (taxed, for federal income tax purposes, as a partnership
and not as an association or publicly traded partnership taxable as a corporation) of which the
Partnership is a member unless the General Partner has received an unqualified opinion from
independent counsel of recognized standing, or a ruling from the IRS, that the ownership of shares
of stock of a corporation or other entity will not jeopardize the Previous General Partner’s status
as a REIT or the General Partner’s or the Special Limited Partner’s status as a “qualified REIT
subsidiary” (within the meaning of Code Section 856(i)(2)), in which event the term
“Subsidiary” shall include the corporation or other entity which is the subject of such
opinion or ruling.




          “Substituted Limited Partner” means a Person who is admitted as a Limited Partner to
the Partnership pursuant to Section 11.4 hereof.




          “Tax Items” has the meaning set forth in Section 6.4.A hereof.




14









 








          “Tendered Units” has the meaning set forth in Section 8.6.A hereof.




          “Tendering Party” has the meaning set forth in Section 8.6.A hereof.




          “Terminating Capital Transaction” means any sale or other disposition of all or
substantially all of the assets of the Partnership or a related series of transactions that, taken
together, result in the sale or other disposition of all or substantially all of the assets of the
Partnership.




          “Transfer,” when used with respect to a Partnership Unit, or all or any portion of a
Partnership Interest, means any sale, assignment, bequest, conveyance, devise, gift (outright or in
trust), Pledge, encumbrance, hypothecation, mortgage, exchange, transfer or other disposition or
act of alienation, whether voluntary or involuntary or by operation of law; provided,
however, that when the term is used in Article 11 hereof, “Transfer” does not
include (a) any Redemption of Partnership Common Units by the Partnership, or acquisition of
Tendered Units by the Previous General Partner, pursuant to Section 8.6 hereof or (b) any
redemption of Partnership Units pursuant to any Partnership Unit Designation. The terms
“Transferred” and “Transferring” have correlative meanings.




          “Twelve-Month Period” means (a) as to an Original Limited Partner or any
successor-in-interest that is a Qualifying Party, a twelve-month period ending on the day before
the first (1st) anniversary of the Effective Date or on the day before a subsequent anniversary
thereof and (b) as to any other Qualifying Party, a twelve-month period ending on the day before
the first (1st) anniversary of such Qualifying Party’s becoming a Holder of Partnership Common
Units or on the day before a subsequent anniversary thereof; provided, however,
that the General Partner may, in its sole and absolute discretion, by written agreement with a
Qualifying Party, shorten the first Twelve-Month Period to a period of less than twelve (12) months
with respect to a Qualifying Party other than an Original Limited Partner or successor-in-interest.




          “Unitholder” means the General Partner or any Holder of Partnership Units.




          “Valuation Date” means the date of receipt by the General Partner of a Notice of
Redemption or, if such date is not a Business Day, the immediately preceding Business Day.




          “Value” means, on any Valuation Date with respect to a REIT Share, the average of the
daily market prices for ten (10) consecutive trading days immediately preceding the Valuation Date
(except that, as provided in Section 4.4.C. hereof, the market price for the trading day
immediately preceding the date of exercise of a stock option under the Previous General Partner’s
Stock Option Plans shall be substituted for such average of daily market prices for purposes of
Section 4.4 hereof). The market price for any such trading day shall be:





               (i) if the REIT Shares are listed or admitted to trading on any securities
exchange or The Nasdaq Stock Market’s National Market System, the closing price,
regular way, on such day, or if no such sale takes place on such day, the average of
the closing bid and asked prices on such day, in either case as reported in the
principal consolidated transaction reporting system,




               (ii) if the REIT Shares are not listed or admitted to trading on any securities
exchange or The Nasdaq Stock Market’s National Market System, the last reported sale
price on such day or, if no sale takes place on such day, the average of the closing
bid and asked prices on such day, as reported by a reliable quotation source
designated by the General Partner, or




               (iii) if the REIT Shares are not listed or admitted to trading on any
securities exchange or The Nasdaq Stock Market’s National Market System and no such
last reported sale price or closing bid and asked prices are available, the average
of the reported high



15









 







bid and low asked prices on such day, as reported by a reliable quotation
source designated by the General Partner, or if there shall be no bid and asked
prices on such day, the average of the high bid and low asked prices, as so
reported, on the most recent day (not more than ten (10) days prior to the date in
question) for which prices have been so reported;


provided, however, that, if there are no bid and asked prices reported during the
ten (10) days prior to the date in question, the Value of the REIT Shares shall be determined by
the General Partner acting in good faith on the basis of such quotations and other information as
it considers, in its reasonable judgment, appropriate. In the event that the REIT Shares Amount
includes Rights (as defined in the definition of “REIT Shares Amount”) that a holder of REIT Shares
would be entitled to receive, then the Value of such Rights shall be determined by the General
Partner acting in good faith on the basis of such quotations and other information as it considers,
in its reasonable judgment, appropriate.




          “Voting Units” means Partnership Common Units, Class I High Performance Partnership
Units and any other class of Partnership Units having the same voting or approval rights as
Partnership Common Units.




ARTICLE 2

ORGANIZATIONAL MATTERS




          Section 2.1 Organization. The Partnership is a limited partnership organized pursuant to
the provisions of the Act and upon the terms and subject to the conditions set forth in this
Agreement. Except as expressly provided herein to the contrary, the rights and obligations of the
Partners and the administration and termination of the Partnership shall be governed by the Act.
The Partnership Interest of each Partner shall be personal property for all purposes.




          Section 2.2 Name. The name of the Partnership is “AIMCO Properties, L.P.” The
Partnership’s business may be conducted under any other name or names deemed advisable by the
General Partner, including the name of the General Partner or any Affiliate thereof. The words
“Limited Partnership,” “L.P.,” “Ltd.” or similar words or letters shall be included in the
Partnership’s name where necessary for the purposes of complying with the laws of any jurisdiction
that so requires. The General Partner in its sole and absolute discretion may change the name of
the Partnership at any time and from time to time and shall notify the Partners of such change in
the next regular communication to the Partners.




          Section 2.3 Registered Office and Agent; Principal Office. The address of the registered
office of the Partnership in the State of Delaware is located at 2711 Centerville Road, Suite 400,
Wilmington, Delaware 19808, and the registered agent for service of process on the Partnership in
the State of Delaware at such registered office is Corporation Service Company. The principal
office of the Partnership is located at 4582 South Ulster Street Parkway, Suite 1100, Denver, CO
80237, or such other place as the General Partner may from time to time designate by notice to the
Limited Partners. The Partnership may maintain offices at such other place or places within or
outside the State of Delaware as the General Partner deems advisable.




          Section 2.4 Power of Attorney.




          A. Each Limited Partner and each Assignee hereby irrevocably constitutes and appoints the
General Partner, any Liquidator, and authorized officers and attorneys-in-fact of each, and each of
those acting
singly, in each case with full power of substitution, as its true and lawful agent and
attorney-in-fact, with full power and authority in its name, place and stead to:





     (1) execute, swear to, seal, acknowledge, deliver, file and record in the appropriate
public offices (a) all certificates, documents and other instruments (including, without
limitation, this Agreement



16









 







and the Certificate and all amendments, supplements or
restatements thereof) that the General Partner or the Liquidator deems appropriate or
necessary to form, qualify or continue the existence or qualification of the Partnership as
a limited partnership (or a partnership in which the limited partners have limited liability
to the extent provided by applicable law) in the State of Delaware and in all other
jurisdictions in which the Partnership may conduct business or own property; (b) all
instruments that the General Partner deems appropriate or necessary to reflect any
amendment, change, modification or restatement of this Agreement in accordance with its
terms; (c) all conveyances and other instruments or documents that the General Partner or
the Liquidator deems appropriate or necessary to reflect the dissolution and liquidation of
the Partnership pursuant to the terms of this Agreement, including, without limitation, a
certificate of cancellation; (d) all conveyances and other instruments or documents that the
General Partner or the Liquidator deems appropriate or necessary to reflect the distribution
or exchange of assets of the Partnership pursuant to the terms of this Agreement; (e) all
instruments relating to the admission, withdrawal, removal or substitution of any Partner
pursuant to, or other events described in, Article 11, Article 12 or Article 13 hereof or
the Capital Contribution of any Partner; and (f) all certificates, documents and other
instruments relating to the determination of the rights, preferences and privileges relating
to Partnership Interests; and




     (2) execute, swear to, acknowledge and file all ballots, consents, approvals, waivers,
certificates and other instruments appropriate or necessary, in the sole and absolute
discretion of the General Partner, to make, evidence, give, confirm or ratify any vote,
consent, approval, agreement or other action that is made or given by the Partners hereunder
or is consistent with the terms of this Agreement or appropriate or necessary, in the sole
and absolute discretion of the General Partner, to effectuate the terms or intent of this
Agreement.


Nothing contained herein shall be construed as authorizing the General Partner to amend this
Agreement except in accordance with Article 14 hereof or as may be otherwise expressly provided for
in this Agreement.




          B. The foregoing power of attorney is hereby declared to be irrevocable and a special power
coupled with an interest, in recognition of the fact that each of the Limited Partners and
Assignees will be relying upon the power of the General Partner or the Liquidator to act as
contemplated by this Agreement in any filing or other action by it on behalf of the Partnership,
and it shall survive and not be affected by the subsequent Incapacity of any Limited Partner or
Assignee and the Transfer of all or any portion of such Limited Partner’s or Assignee’s Partnership
Units or Partnership Interest and shall extend to such Limited Partner’s or Assignee’s heirs,
successors, assigns and personal representatives. Each such Limited Partner or Assignee hereby
agrees to be bound by any representation made by the General Partner or the Liquidator, acting in
good faith pursuant to such power of attorney; and each such Limited Partner or Assignee hereby
waives any and all defenses that may be available to contest, negate or disaffirm the action of the
General Partner or the Liquidator, taken in good faith under such power of attorney. Each Limited
Partner or Assignee shall execute and deliver to the General Partner or the Liquidator, within
fifteen (15) days after receipt of the General Partner’s or the Liquidator’s request therefor, such
further designation, powers of attorney and other instruments as the General Partner or the
Liquidator, as the case may be, deems necessary to effectuate this Agreement and the purposes of
the Partnership.




          Section 2.5 Term. The term of the Partnership commenced on May 16, 1994, the date that the original Certificate
was filed in the office of the Secretary of State of Delaware in accordance with the Act, and shall
continue until the Partnership is dissolved pursuant to the provisions of Article 13 hereof or as
otherwise provided by law.




17









 








ARTICLE 3

PURPOSE




          Section 3.1 Purpose and Business. The purpose and nature of the Partnership is to conduct
any business, enterprise or activity permitted by or under the Act, including, but not limited to,
(i) to conduct the business of ownership, construction, development and operation of multifamily
rental apartment communities, (ii) to enter into any partnership, joint venture, business trust
arrangement, limited liability company or other similar arrangement to engage in any business
permitted by or under the Act, or to own interests in any entity engaged in any business permitted
by or under the Act, (iii) to conduct the business of providing property and asset management and
brokerage services, whether directly or through one or more partnerships, joint ventures,
subsidiaries, business trusts, limited liability companies or other similar arrangements, and (iv)
to do anything necessary or incidental to the foregoing; provided, however, such
business and arrangements and interests may be limited to and conducted in such a manner as to
permit the Previous General Partner, in the sole and absolute discretion of the General Partner, at
all times to be classified as a REIT.




          Section 3.2 Powers.




          A. The Partnership shall be empowered to do any and all acts and things necessary,
appropriate, proper, advisable, incidental to or convenient for the furtherance and accomplishment
of the purposes and business described herein and for the protection and benefit of the
Partnership.




          B. Notwithstanding any other provision in this Agreement, the General Partner may cause the
Partnership not to take, or to refrain from taking, any action that, in the judgment of the General
Partner, in its sole and absolute discretion, (i) could adversely affect the ability of the
Previous General Partner to continue to qualify as a REIT, (ii) could subject the Previous General
Partner to any additional taxes under Code Section 857 or Code Section 4981 or (iii) could violate
any law or regulation of any governmental body or agency having jurisdiction over the Previous
General Partner, the General Partner, their securities or the Partnership, unless such action (or
inaction) under clause (i), clause (ii) or clause (iii) above shall have been specifically
consented to by the Previous General Partner and the General Partner in writing.




          Section 3.3 Partnership Only for Purposes Specified. The Partnership shall be a limited
partnership only for the purposes specified in Section 3.1 hereof, and this Agreement shall not be
deemed to create a company, venture or partnership between or among the Partners with respect to
any activities whatsoever other than the activities within the purposes of the Partnership as
specified in Section 3.1 hereof. Except as otherwise provided in this Agreement, no Partner shall
have any authority to act for, bind, commit or assume any obligation or responsibility on behalf of
the Partnership, its properties or any other Partner. No Partner, in its capacity as a Partner
under this Agreement, shall be responsible or liable for any indebtedness or obligation of another
Partner, nor shall the Partnership be responsible or liable for any indebtedness or obligation of
any Partner, incurred either before or after the execution and delivery of this Agreement by such
Partner, except as to those responsibilities, liabilities, indebtedness or obligations incurred
pursuant to and as limited by the terms of this Agreement and the Act.




          Section 3.4 Representations and Warranties by the Parties.




          A. Each Partner that is an individual (including, without limitation, each Additional Limited
Partner or Substituted Limited Partner as a condition to becoming an Additional Limited Partner or
a Substituted Limited Partner) represents and warrants to each other Partner(s) that (i) the
consummation of the transactions contemplated by this Agreement to be performed by such Partner
will not result in a breach or violation of, or a default under, any material agreement by which
such Partner or any of such Partner’s property is bound, or any statute, regulation, order or other
law to which such Partner is subject, (ii) such Partner is neither a “foreign person” within the
meaning of Code Section 1445(f) nor a “foreign partner” within the meaning of Code Section 1446(e),
(iii) such Partner does not own, directly or indirectly, (a) five percent (5%) or more of the total
combined voting




18









 







power of all classes of stock entitled to vote, or five percent (5%) or more of the
total number of shares of all classes of stock, of any corporation that is a tenant of either (I)
the Previous General Partner, the General Partner, the Special Limited Partner or any “qualified
REIT subsidiary” (within the meaning of Code Section 856(i)(2)) with respect to the Previous
General Partner, (II) the Partnership or (III) any partnership, venture or limited liability
company of which the Previous General Partner, the General Partner, the Special Limited Partner,
any “qualified REIT subsidiary” (within the meaning of Code Section 856(i)(2)) with respect to the
Previous General Partner or the Partnership is a member or (b) an interest of five percent (5%) or
more in the assets or net profits of any tenant of either (I) the Previous General Partner, the
General Partner, the Special Limited Partner or any “qualified REIT subsidiary” (within the meaning
of Code Section 856(i)(2)) with respect to the Previous General Partner, (II) the Partnership or
(III) any partnership, venture, or limited liability company of which the Previous General Partner,
the General Partner, the Special Limited Partner, any “qualified REIT subsidiary” (within the
meaning of Code Section 856(i)(2)) with respect to the Previous General Partner or the Partnership
is a member and (iv) this Agreement is binding upon, and enforceable against, such Partner in
accordance with its terms.




          B. Each Partner that is not an individual (including, without limitation, each Additional
Limited Partner or Substituted Limited Partner as a condition to becoming an Additional Limited
Partner or a Substituted Limited Partner) represents and warrants to each other Partner(s) that (i)
all transactions contemplated by this Agreement to be performed by it have been duly authorized by
all necessary action, including, without limitation, that of its general partner(s), committee(s),
trustee(s), beneficiaries, directors and/or shareholder(s), as the case may be, as required, (ii)
the consummation of such transactions shall not result in a breach or violation of, or a default
under, its partnership or operating agreement, trust agreement, charter or bylaws, as the case may
be, any material agreement by which such Partner or any of such Partner’s properties or any of its
partners, members, beneficiaries, trustees or shareholders, as the case may be, is or are bound, or
any statute, regulation, order or other law to which such Partner or any of its partners, members,
trustees, beneficiaries or shareholders, as the case may be, is or are subject, (iii) such Partner
is neither a “foreign person” within the meaning of Code Section 1445(f) nor a “foreign partner”
within the meaning of Code Section 1446(e), (iv) such Partner does not own, directly or indirectly,
(a) five percent (5%) or more of the total combined voting power of all classes of stock entitled
to vote, or five percent (5%) or more of the total number of shares of all classes of stock, of any
corporation that is a tenant of either (I) the Previous General Partner, the General Partner, the
Special Limited Partner or any “qualified REIT subsidiary” (within the meaning of Code Section
856(i)(2)) with respect to the Previous General Partner, (II) the Partnership or (III) any
partnership, venture or limited liability company of which the Previous General Partner, the
General Partner, the Special Limited Partner, any “qualified REIT subsidiary” (within the meaning
of Code Section 856(i)(2)) with respect to the Previous General Partner or the Partnership is a
member or (b) an interest of five percent (5%) or more in the assets or net profits of any tenant
of either (I) the Previous General Partner, the General Partner the Special Limited Partner or any
“qualified REIT subsidiary” (within the meaning of Code Section 856(i)(2)) with respect to the
Previous General Partner, (II) the Partnership or (III) any partnership, venture or limited
liability company for which the Previous General Partner, the General Partner, the Special Limited
Partner, any “qualified REIT subsidiary” (within the meaning of Code Section 856(i)(2)) with
respect to the Previous General Partner or the
Partnership is a member and (v) this Agreement is binding upon, and enforceable against, such
Partner in accordance with its terms.




          C. Each Partner (including, without limitation, each Substituted Limited Partner as a
condition to becoming a Substituted Limited Partner) represents, warrants and agrees that it has
acquired and continues to hold its interest in the Partnership for its own account for investment
only and not for the purpose of, or with a view toward, the resale or distribution of all or any
part thereof, nor with a view toward selling or otherwise distributing such interest or any part
thereof at any particular time or under any predetermined circumstances. Each Partner further
represents and warrants that it is a sophisticated investor, able and accustomed to handling
sophisticated financial matters for itself, particularly real estate investments, and that it has a
sufficiently high net worth that it does not anticipate a need for the funds that it has invested
in the Partnership in what it understands to be a highly speculative and illiquid investment.




19









 








          D. The representations and warranties contained in Sections 3.4.A, 3.4.B and 3.4.C hereof
shall survive the execution and delivery of this Agreement by each Partner (and, in the case of an
Additional Limited Partner or a Substituted Limited Partner, the admission of such Additional
Limited Partner or Substituted Limited Partner as a Limited Partner in the Partnership) and the
dissolution, liquidation and termination of the Partnership.




          E. Each Partner (including, without limitation, each Substituted Limited Partner as a
condition to becoming a Substituted Limited Partner) hereby acknowledges that no representations as
to potential profit, cash flows, funds from operations or yield, if any, in respect of the
Partnership or the General Partner have been made by any Partner or any employee or representative
or Affiliate of any Partner, and that projections and any other information, including, without
limitation, financial and descriptive information and documentation, that may have been in any
manner submitted to such Partner shall not constitute any representation or warranty of any kind or
nature, express or implied.




ARTICLE 4

CAPITAL CONTRIBUTIONS




          Section 4.1 Capital Contributions of the Partners. The Partners have heretofore made
Capital Contributions to the Partnership. Each Partner owns Partnership Units in the amount set
forth for such Partner on Exhibit A, as the same may be amended from time to time by the
General Partner to the extent necessary to reflect accurately sales, exchanges or other Transfers,
redemptions, Capital Contributions, the issuance of additional Partnership Units, or similar events
having an effect on a Partner’s ownership of Partnership Units. Except as provided by law or in
Section 4.2, 4.3 or 10.4 hereof, the Partners shall have no obligation or right to make any
additional Capital Contributions or loans to the Partnership.




          Section 4.2 Issuances of Additional Partnership Interests.




          A. General. The General Partner is hereby authorized to cause the Partnership to
issue additional Partnership Interests, in the form of Partnership Units, for any Partnership
purpose, at any time or from time to time, to the Partners (including the General Partner and the
Special Limited Partner) or to other Persons, and to admit such Persons as Additional Limited
Partners, for such consideration and on such terms and conditions as shall be established by the
General Partner in its sole and absolute discretion, all without the approval of any Limited
Partners. Without limiting the foregoing, the General Partner is expressly authorized to cause the
Partnership to issue Partnership Units (i) upon the conversion, redemption or exchange of any Debt,
Partnership
Units or other securities issued by the Partnership, (ii) for less than fair market value, so
long as the General Partner concludes in good faith that such issuance is in the best interests of
the General Partner and the Partnership, and (iii) in connection with any merger of any other
Person into the Partnership if the applicable merger agreement provides that Persons are to receive
Partnership Units in exchange for their interests in the Person merging into the Partnership.
Subject to Delaware law, any additional Partnership Interests may be issued in one or more classes,
or one or more series of any of such classes, with such designations, preferences and relative,
participating, optional or other special rights, powers and duties as shall be determined by the
General Partner, in its sole and absolute discretion without the approval of any Limited Partner,
and set forth in a written document thereafter attached to and made an exhibit to this Agreement
(each, a “Partnership Unit Designation”). Without limiting the generality of the
foregoing, the General Partner shall have authority to specify (a) the allocations of items of
Partnership income, gain, loss, deduction and credit to each such class or series of Partnership
Interests; (b) the right of each such class or series of Partnership Interests to share in
Partnership distributions; (c) the rights of each such class or series of Partnership Interests
upon dissolution and liquidation of the Partnership; (d) the voting rights, if any, of each such
class or series of Partnership Interests; and (e) the conversion, redemption or exchange rights
applicable to each such class or series of Partnership Interests. Upon the issuance of any
additional Partnership Interest, the General Partner shall amend Exhibit A as appropriate
to reflect such issuance.




20









 








          B. Issuances to the General Partner or Special Limited Partner. No additional Partnership
Units shall be issued to the General Partner or the Special Limited Partner unless (i) the
additional Partnership Units are issued to all Partners in proportion to their respective
Percentage Interests, (ii) (a) the additional Partnership Units are (x) Partnership Common Units
issued in connection with an issuance of REIT Shares, or (y) Partnership Units (other than
Partnership Common Units) issued in connection with an issuance of Preferred Shares, New Securities
or other interests in the Previous General Partner (other than REIT Shares), which Preferred
Shares, New Securities or other interests have designations, preferences and other rights, terms
and provisions that are substantially the same as the designations, preferences and other rights,
terms and provisions of the additional Partnership Units issued to the General Partner or the
Special Limited Partner, and (b) the General Partner or the Special Limited Partner, as the case
may be, contributes to the Partnership the cash proceeds or other consideration received in
connection with the issuance of such REIT Shares, Preferred Shares, New Securities or other
interests in the Previous General Partner, (iii) the additional Partnership Units are issued upon
the conversion, redemption or exchange of Debt, Partnership Units or other securities issued by the
Partnership, or (iv) the additional Partnership Units are issued pursuant to Section 4.6.




          C. No Preemptive Rights. No Person, including, without limitation, any Partner or
Assignee, shall have any preemptive, preferential, participation or similar right or rights to
subscribe for or acquire any Partnership Interest.




          Section 4.3 Additional Funds.




          A. General. The General Partner may, at any time and from time to time, determine
that the Partnership requires additional funds (“Additional Funds”) for the acquisition or
development of additional Properties, for the redemption of Partnership Units or for such other
purposes as the General Partner may determine. Additional Funds may be obtained by the
Partnership, at the election of the General Partner, in any manner provided in, and in accordance
with, the terms of this Section 4.3 without the approval of any Limited Partners.




          B. Additional Capital Contributions. The General Partner, on behalf of the
Partnership, may obtain any Additional Funds by accepting Capital Contributions from any Partners
or other Persons and issuing additional Partnership Units in consideration therefor.




          C. Loans by Third Parties. The General Partner, on behalf of the Partnership, may
obtain any Additional Funds by causing the Partnership to incur Debt to any Person (other than the
Previous General Partner, the General Partner or the Special Limited Partner) upon such terms as
the General Partner determines appropriate, including making such Debt convertible, redeemable or
exchangeable for Partnership Units; provided, however, that the Partnership shall
not incur any such Debt if (i) a breach, violation or default of such Debt would be deemed to occur
by virtue of the Transfer of any Partnership Interest, or (ii) such Debt is recourse to any Partner
(unless the Partner otherwise agrees).




          D. General Partner Loans. The General Partner, on behalf of the Partnership, may
obtain any Additional Funds by causing the Partnership to incur Debt with the Previous General
Partner, the General Partner or the Special Limited Partner (each, a “General Partner
Loan”) if (i) such Debt is, to the extent permitted by law, on substantially the same terms and
conditions (including interest rate, repayment schedule, and conversion, redemption, repurchase and
exchange rights) as Funding Debt incurred by the Previous General Partner, the General Partner or
the Special Limited Partner, the net proceeds of which are loaned to the Partnership to provide
such Additional Funds, or (ii) such Debt is on terms and conditions no less favorable to the
Partnership than would be available to the Partnership from any third party; provided,
however, that the Partnership shall not incur any such Debt if (a) a breach, violation or
default of such Debt would be deemed to occur by virtue of the Transfer of any Partnership
Interest, or (b) such Debt is recourse to any Partner (unless the Partner otherwise agrees).




21









 








          E. Issuance of Securities by the Previous General Partner. The Previous General
Partner shall not issue any additional REIT Shares, Preferred Shares, Junior Shares or New
Securities unless (i) the Previous General Partner contributes the cash proceeds or other
consideration received from the issuance of such additional REIT Shares, Preferred Shares, Junior
Shares or New Securities, as the case may be, and from the exercise of the rights contained in any
such additional New Securities, to either or both of the General Partner and the Special Limited
Partner, and (ii) it or they, as the case may be, contribute such cash proceeds or other
consideration to the Partnership in exchange for (x) in the case of an issuance of REIT Shares,
Partnership Common Units, or (y) in the case of an issuance of Preferred Shares, Junior Shares or
New Securities, Partnership Units with designations, preferences and other rights, terms and
provisions that are substantially the same as the designations, preferences and other rights, terms
and provisions of such Preferred Shares, Junior Shares or New Securities; provided,
however, that notwithstanding the foregoing, the Previous General Partner may issue REIT
Shares, Preferred Shares, Junior Shares or New Securities (a) pursuant to Section 4.4 or Section
8.6.B hereof, (b) pursuant to a dividend or distribution (including any stock split) of REIT
Shares, Preferred Shares, Junior Shares or New Securities to all of the holders of REIT Shares,
Preferred Shares, Junior Shares or New Securities, as the case may be, (c) upon a conversion,
redemption or exchange of Preferred Shares, (d) upon a conversion of Junior Shares into REIT
Shares, (e) upon a conversion, redemption, exchange or exercise of New Securities, or (f) in
connection with an acquisition of a property or other asset to be owned, directly or indirectly, by
the Previous General Partner if the General Partner determines that such acquisition is in the best
interests of the Partnership. In the event of any issuance of additional REIT Shares, Preferred
Shares, Junior Shares or New Securities by the Previous General Partner, and the contribution to
the Partnership, by the General Partner or the Special Limited Partner, of the cash proceeds or
other consideration received from such issuance, the Partnership shall pay the Previous General
Partner’s expenses associated with such issuance, including any underwriting discounts or
commissions.




          Section 4.4 Stock Option Plans.




          A. Options Granted to Company Employees and Independent Directors. If at any time or
from time to time, in connection with the Previous General Partner’s Stock Option Plans, a stock
option granted to a Company Employee or Independent Director is duly exercised:





     (1) The Special Limited Partner shall, as soon as practicable after such exercise, make
a Capital Contribution to the Partnership in an amount equal to the exercise price paid to
the Previous General Partner by such exercising party in connection with the exercise of
such stock option.




     (2) Notwithstanding the amount of the Capital Contribution actually made pursuant to
Section 4.4.A(1) hereof, the Special Limited Partner shall be deemed to have contributed to
the Partnership as a Capital Contribution, in consideration of an additional Limited Partner
Interest (expressed in and as additional Partnership Common Units), an amount equal to the
Value of a REIT Share as of the date of exercise multiplied by the number of REIT Shares
then being issued in connection with the exercise of such stock option.




     (3) An equitable Percentage Interest adjustment shall be made in which the Special
Limited Partner shall be treated as having made a cash contribution equal to the amount
described in Section 4.4.A(2) hereof.



          B. Options Granted to Partnership Employees. If at any time or from time to time, in
connection with the Previous General Partner’s Stock Option Plans, a stock option granted to a
Partnership Employee is duly exercised:





     (1) The General Partner shall cause the Previous General Partner to sell to the
Partnership, and the Partnership shall purchase from the Previous General Partner, the
number of REIT Shares as to



22









 







which such stock option is being exercised. The purchase price
per REIT Share for such sale of REIT Shares to the Partnership shall be the Value of a REIT
Share as of the date of exercise of such stock option.




     (2) The Partnership shall sell to the Optionee (or if the Optionee is an employee of a
Partnership Subsidiary, the Partnership shall sell to such Partnership Subsidiary, which in
turn shall sell to the Optionee), for a cash price per share equal to the Value of a REIT
Share at the time of the exercise, the number of REIT Shares equal to (a) the exercise price
paid to the Previous General Partner by the exercising party in connection with the exercise
of such stock option divided by (b) the Value of a REIT Share at the time of such exercise.




     (3) The Partnership shall transfer to the Optionee (or if the Optionee is an employee
of a Partnership Subsidiary, the Partnership shall transfer to such Partnership Subsidiary,
which in turn shall transfer to the Optionee) at no additional cost, as additional
compensation, the number of REIT Shares equal to the number of REIT Shares described in
Section 4.4.B(1) hereof less the number of REIT Shares described in Section 4.4.B(2)
hereof.




     (4) The Special Limited Partner shall, as soon as practicable after such exercise, make
a Capital Contribution to the Partnership of an amount equal to all proceeds received (from
whatever source, but excluding any payment in respect of payroll taxes or other
withholdings) by the Previous General Partner, the General Partner or the Special Limited
Partner in connection with the exercise of such stock option. An equitable Percentage
Interest adjustment shall be made in which the Special Limited Partner shall be treated as
having made a cash contribution equal to the amount described in Section 4.4.B(1) hereof.



          C. Special Valuation Rule. For purposes of this Section 4.4, in determining the Value of a
REIT Share, only the trading date immediately preceding the exercise of the relevant stock option
under the Previous General Partner’s Stock Option Plans shall be considered.




          D. Future Stock Incentive Plans. Nothing in this Agreement shall be construed or applied
to preclude or restrain the Previous General Partner, the General Partner or the Special Limited
Partner from adopting, modifying or terminating stock incentive plans, in addition to the Previous
General Partner’s Stock Option Plans, for the benefit of employees, directors or other business
associates of the Previous General Partner, the General Partner, the Special Limited Partner, the
Partnership or any of their Affiliates. The Limited Partners acknowledge and agree that, in the
event that any such plan is adopted, modified or terminated by the Previous General Partner, the
General Partner or the Special Limited Partner amendments to this Section 4.4 may become necessary
or advisable and that any approval or consent to any such amendments requested by the Previous
General Partner, the General Partner or the Special Limited Partner shall not be unreasonably
withheld or delayed.




          Section 4.5 No Interest; No Return. No Partner shall be entitled to interest on its
Capital Contribution or on such Partner’s Capital Account. Except as provided herein or by law, no
Partner shall have any right to demand or receive the return of its Capital Contribution from the
Partnership.




          Section 4.6 Conversion of Junior Shares. If, at any time, any of the Junior Shares are
converted into REIT Shares, in whole or in part, then a number of Partnership Common Units equal to
(i) the number of REIT Shares issued upon such conversion
divided by (ii) the Adjustment Factor
then in effect shall be issued to the General Partner and the Special Limited Partner (and between
the General Partner and the Special Limited Partner in proportion to their ownership of Partnership
Common Units immediately preceding such conversion), and the Percentage Interests of the General
Partner and the Limited Partners (including the Special Limited Partner) shall be adjusted to
reflect such conversion.




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ARTICLE 5

DISTRIBUTIONS




          Section 5.1 Requirement and Characterization of Distributions. Subject to the terms of any
Partnership Unit Designation, the General Partner shall cause the Partnership to distribute
quarterly all, or such portion as the General Partner may in its sole and absolute discretion
determine, of Available Cash generated by the Partnership during such quarter to the Holders of
Partnership Common Units in accordance with their respective Partnership Common Units held on such
Partnership Record Date. Except as otherwise provided in the terms of any Partnership Unit
Designation, distributions payable with respect to any Partnership Units (other than Partnership
Units held by the General Partner or the Special Limited Partner) that were not outstanding during
the entire quarterly period in respect of which any distribution is made shall be prorated based on
the portion of the period that such units were outstanding. The General Partner in its sole and
absolute discretion may distribute to the Unitholders Available Cash on a more frequent basis and
provide for an appropriate record date. The General Partner shall take such reasonable efforts, as
determined by it in its sole and absolute discretion and consistent with the Previous General
Partner’s qualification as a REIT, to cause the Partnership to distribute sufficient amounts to
enable (i) the General Partner and the Special Limited Partner to transfer funds to the Previous
General Partner and (ii) the Previous General Partner to pay shareholder dividends that will (a)
satisfy the requirements for qualifying as a REIT under the Code and Regulations (the “REIT
Requirements”) and (b) avoid any federal income or excise tax liability of the Previous General
Partner.




          Section 5.2 Distributions in Kind No right is given to any Unitholder to demand and receive property other than cash as provided
in this Agreement. The General Partner may determine, in its sole and absolute discretion, to make
a distribution in kind of Partnership assets to the Unitholders, and such assets shall be
distributed in such a fashion as to ensure that the fair market value is distributed and allocated
in accordance with Articles 5, 6 and 10 hereof.




          Section 5.3 Amounts Withheld. All amounts withheld pursuant to the Code or any provisions
of any state or local tax law and Section 10.4 hereof with respect to any allocation, payment or
distribution to any Unitholder shall be treated as amounts paid or distributed to such Unitholder
pursuant to Section 5.1 hereof for all purposes under this Agreement.




          Section 5.4 Distributions Upon Liquidation. Notwithstanding the other provisions of this
Article 5, net proceeds from a Terminating Capital Transaction, and any other cash received or
reductions in reserves made after commencement of the liquidation of the Partnership, shall be
distributed to the Unitholders in accordance with Section 13.2 hereof.




          Section 5.5 Restricted Distributions. Notwithstanding any provision to the contrary
contained in this Agreement, neither the Partnership nor the General Partner, on behalf of the
Partnership, shall make a distribution to any Unitholder on account of its Partnership Interest or
interest in Partnership Units if such distribution would violate Section 17-607 of the Act or other
applicable law.




ARTICLE 6

ALLOCATIONS




          Section 6.1 Timing and Amount of Allocations of Net Income and Net Loss. Net Income and
Net Loss of the Partnership shall be determined and allocated with respect to each Fiscal Year of
the Partnership as of the end of each such year. Except as otherwise provided in this Article 6,
and subject to Section 11.6.C hereof, an allocation to a Unitholder of a share of Net Income or Net
Loss shall be treated as an allocation of the same share of each item of income, gain, loss or
deduction that is taken into account in computing Net Income or Net Loss.




24









 








          Section 6.2 General Allocations. Subject to the terms of any Partnership Unit Designation,
except as otherwise provided in this Article 6 and subject to Section 11.6.C hereof, Net Income and
Net Loss shall be allocated to each of the Holders of Partnership Common Units in accordance with
their respective Partnership Common Units at the end of each Fiscal Year.




          Section 6.3 Additional Allocation Provisions. Notwithstanding the foregoing provisions of
this Article 6:




          A. Intentionally Omitted.




          B. Regulatory Allocations.





     (1) Minimum Gain Chargeback. Except as otherwise provided in Regulations
Section 1.704-2(f), notwithstanding the provisions of Section 6.2 hereof, or any other
provision of this Article 6, if there is a net decrease in Partnership Minimum Gain during
any Fiscal Year, each Holder of Partnership Common Units shall be specially allocated items
of Partnership income and gain for such year (and, if necessary, subsequent years) in an
amount equal to such Holder’s share of the net decrease in Partnership Minimum Gain, as
determined under Regulations Section 1.704-2(g). Allocations pursuant to the previous
sentence shall be made in proportion to the respective amounts required to be allocated to
each Holder pursuant thereto. The items to be allocated shall be determined in accordance
with Regulations Sections 1.704-2(f)(6) and 1.704-2(j)(2). This Section 6.3.B(i) is
intended to qualify as a “minimum gain chargeback” within the meaning of Regulations Section
1.704-2(f) and shall be interpreted consistently therewith.




     (2) Partner Minimum Gain Chargeback. Except as otherwise provided in
Regulations Section 1.704-2(i)(4) or in Section 6.3.B(i) hereof, if there is a net decrease
in Partner Minimum Gain attributable to a Partner Nonrecourse Debt during any Fiscal Year,
each Holder of Partnership Common Units who has a share of the Partner Minimum Gain
attributable to such Partner Nonrecourse Debt, determined in accordance with Regulations
Section 1.704-2(i)(5), shall be specially allocated items of Partnership income and gain for
such year (and, if necessary, subsequent years) in an amount equal to such Holder’s share of
the net decrease in Partner Minimum Gain attributable to such Partner Nonrecourse Debt,
determined in accordance with Regulations Section 1.7042(i)(4). Allocations pursuant to the
previous sentence shall be made in proportion to the respective amounts required to be
allocated to each General Partner, Limited Partner and other Holder pursuant thereto. The
items to be so allocated shall be determined in accordance with Regulations Sections
1.704-2(i)(4) and 1.704-2(j)(2). This Section 6.3.B(ii) is intended to qualify as a
“chargeback of partner nonrecourse debt minimum gain” within the meaning of Regulations
Section 1.704-2(i) and shall be interpreted consistently therewith.




     (3) Nonrecourse Deductions and Partner Nonrecourse Deductions. Any Nonrecourse
Deductions for any Fiscal Year shall be specially allocated to the Holders of Partnership
Common Units in accordance with their Partnership Common Units. Any Partner Nonrecourse
Deductions for any Fiscal Year shall be specially allocated to the Holder(s) who bears the
economic risk of loss with respect to the Partner Nonrecourse Debt to which such Partner
Nonrecourse Deductions are attributable, in accordance with Regulations Section 1.704-2(i).




     (4) Qualified Income Offset. If any Holder of Partnership Common Units
unexpectedly receives an adjustment, allocation or distribution described in Regulations
Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Partnership income and gain shall be
allocated, in accordance with Regulations Section 1.704-1(b)(2)(ii)(d), to such Holder in an
amount and manner sufficient to eliminate, to the extent required by such Regulations, the
Adjusted Capital Account Deficit of such Holder as quickly as possible, provided that an
allocation pursuant to this Section 6.3.B(iv) shall be made if and only to the extent that
such Holder would have an Adjusted Capital Account Deficit after all other allocations
provided in this



25









 







Article 6 have been tentatively made as if this Section 6.3.B(iv) were not
in the Agreement. It is intended that this Section 6.3.B(iv) qualify and be construed as a
“qualified income offset” within the meaning of Regulations Section 1.704-1(b)(2)(ii)(d) and
shall be interpreted consistently therewith.




     (5) Gross Income Allocation. In the event that any Holder of Partnership
Common Units has a deficit Capital Account at the end of any Fiscal Year that is in excess
of the sum of (1) the amount (if any) that such Holder is obligated to restore to the
Partnership upon complete liquidation of such Holder’s Partnership Interest (including, the
Holder’s interest in outstanding Partnership Preferred Units and other Partnership Units)
and (2) the amount that such Holder is deemed to be obligated to restore pursuant to the
penultimate sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such
Holder shall be
specially allocated items of Partnership income and gain in the amount of such excess
to eliminate such deficit as quickly as possible, provided that an allocation pursuant to
this Section 6.3.B(v) shall be made if and only to the extent that such Holder would have a
deficit Capital Account in excess of such sum after all other allocations provided in this
Article 6 have been tentatively made as if this Section 6.3.B(v) and Section 6.3.B(iv)
hereof were not in the Agreement.




     (6) Limitation on Allocation of Net Loss. To the extent that any allocation of
Net Loss would cause or increase an Adjusted Capital Account Deficit as to any Holder of
Partnership Common Units, such allocation of Net Loss shall be reallocated among the other
Holders of Partnership Common Units in accordance with their respective Partnership Common
Units, subject to the limitations of this Section 6.3.B(vi).




     (7) Section 754 Adjustment. To the extent that an adjustment to the adjusted
tax basis of any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is
required, pursuant to Regulations Section 1.704-1(b)(2) (iv)(m)(2) or Regulations Section
1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts as the
result of a distribution to a Holder of Partnership Common Units in complete liquidation of
its interest in the Partnership, the amount of such adjustment to the Capital Accounts shall
be treated as an item of gain (if the adjustment increases the basis of the asset) or loss
(if the adjustment decreases such basis), and such gain or loss shall be specially allocated
to the Holders in accordance with their Partnership Common Units in the event that
Regulations Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Holders to whom such
distribution was made in the event that Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.




     (8) Curative Allocations. The allocations set forth in Sections 6.3.B(i),
(ii), (iii), (iv), (v), (vi) and (vii) hereof (the “Regulatory Allocations”) are
intended to comply with certain regulatory requirements, including the requirements of
Regulations Sections 1.704-1(b) and 1.704-2. Notwithstanding the provisions of Section 6.1
hereof, the Regulatory Allocations shall be taken into account in allocating other items of
income, gain, loss and deduction among the Holders of Partnership Common Units so that to
the extent possible without violating the requirements giving rise to the Regulatory
Allocations, the net amount of such allocations of other items and the Regulatory
Allocations to each Holder of a Partnership Common Unit shall be equal to the net amount
that would have been allocated to each such Holder if the Regulatory Allocations had not
occurred.



          C. Special Allocations Upon Liquidation. Notwithstanding any provision in this
Article VI to the contrary, in the event that the Partnership disposes of all or substantially all
of its assets in a transaction that will lead to a liquidation of the Partnership pursuant to
Article XIII hereof, then any Net Income or Net Loss realized in connection with such transaction
and thereafter (and, if necessary, constituent items of income, gain, loss and deduction) shall be
specially allocated among the Partners as required so as to cause liquidating distributions
pursuant to Section 13.2.A(4) hereof to be made in the same amounts and proportions as would have
resulted had such distributions instead been made pursuant to Section 5.1 hereof.




26









 








          D. Allocation of Excess Nonrecourse Liabilities. For purposes of determining a
Holder’s proportional share of the “excess nonrecourse liabilities” of the Partnership within the
meaning of Regulations Section 1.752-3(a)(3), each Holder’s interest in Partnership profits shall
be such Holder’s share of Partnership Common Units.




          Section 6.4 Tax Allocations.




          A. In General. Except as otherwise provided in this Section 6.4, for income tax
purposes under the Code and the Regulations each Partnership item of income, gain, loss and
deduction (collectively, “Tax Items”) shall be allocated among the Holders of Partnership Common
Units in the same manner as its correlative item of “book” income, gain, loss or deduction is
allocated pursuant to Sections 6.2 and 6.3 hereof.




          B. Allocations Respecting Section 704(c) Revaluations. Notwithstanding Section 6.4.A
hereof, Tax Items with respect to Property that is contributed to the Partnership with a Gross
Asset Value that varies from its basis in the hands of the contributing Partner immediately
preceding the date of contribution shall be allocated among the Holders of Partnership Common Units
for income tax purposes pursuant to Regulations promulgated under Code Section 704(c) so as to take
into account such variation. The Partnership shall account for such variation under any method
approved under Code Section 704(c) and the applicable Regulations as chosen by the General Partner,
including, without limitation, the “traditional method” as described in Regulations Section
1.704-3(b). In the event that the Gross Asset Value of any partnership asset is adjusted pursuant
to subsection (b) of the definition of “Gross Asset Value” (provided in Article 1 hereof),
subsequent allocations of Tax Items with respect to such asset shall take account of the variation,
if any, between the adjusted basis of such asset and its Gross Asset Value in the same manner as
under Code Section 704(c) and the applicable Regulations.




ARTICLE 7

MANAGEMENT AND OPERATIONS OF BUSINESS




          Section 7.1 Management.




          A. Except as otherwise expressly provided in this Agreement, all management powers over the
business and affairs of the Partnership are and shall be exclusively vested in the General Partner,
and no Limited Partner shall have any right to participate in or exercise control or management
power over the business and affairs of the Partnership. The General Partner may not be removed by
the Partners with or without cause, except with the Consent of the General Partner. In addition to
the powers now or hereafter granted a general partner of a limited partnership under applicable law
or that are granted to the General Partner under any other provision of this Agreement, the General
Partner, subject to the other provisions hereof including Section 7.3, shall have full power and
authority to do all things deemed necessary or desirable by it to conduct the business of the
Partnership, to exercise all powers set forth in Section 3.2 hereof and to effectuate the purposes
set forth in Section 3.1 hereof, including, without limitation:





     (1) the making of any expenditures, the lending or borrowing of money (including,
without limitation, making prepayments on loans and borrowing money to permit the
Partnership to make distributions to its Partners in such amounts as will permit the
Previous General Partner (so long as the Previous General Partner qualifies as a REIT) to
avoid the payment of any federal income tax (including, for this purpose, any excise tax
pursuant to Code Section 4981) and to make distributions to its shareholders sufficient to
permit the Previous General Partner to maintain REIT status or otherwise to satisfy the REIT
Requirements), the assumption or guarantee of, or other contracting for, indebtedness and
other liabilities, the issuance of evidences of indebtedness (including the securing of same
by deed to secure debt, mortgage, deed of trust or other lien or encumbrance on the
Partnership’s assets) and the incurring of any obligations that it deems necessary for the
conduct of the activities of the Partnership;



27









 






     (2) the making of tax, regulatory and other filings, or rendering of periodic or other
reports to governmental or other agencies having jurisdiction over the business or assets of
the Partnership;




     (3) the acquisition, sale, transfer, exchange or other disposition of any assets of the
Partnership (including, but not limited to, the exercise or grant of any conversion, option,
privilege or subscription right or any other right available in connection with any assets
at any time held by the Partnership) or the merger, consolidation, reorganization or other
combination of the Partnership with or into another entity;




     (4) the mortgage, pledge, encumbrance or hypothecation of any assets of the
Partnership, the use of the assets of the Partnership (including, without limitation, cash
on hand) for any purpose consistent with the terms of this Agreement and on any terms that
it sees fit, including, without limitation, the financing of the operations and activities
of the General Partner, the Partnership or any of the Partnership’s Subsidiaries, the
lending of funds to other Persons (including, without limitation, the Partnership’s
Subsidiaries) and the repayment of obligations of the Partnership, its Subsidiaries and any
other Person in which it has an equity investment, and the making of capital contributions
to and equity investments in the Partnership’s Subsidiaries;




     (5) the management, operation, leasing, landscaping, repair, alteration, demolition,
replacement or improvement of any Property, including, without limitation, any Contributed
Property, or other asset of the Partnership or any Subsidiary;




     (6) the negotiation, execution and performance of any contracts, leases, conveyances or
other instruments that the General Partner considers useful or necessary to the conduct of
the Partnership’s operations or the implementation of the General Partner’s powers under
this Agreement, including contracting with contractors, developers, consultants,
accountants, legal counsel, other professional advisors and other agents and the payment of
their expenses and compensation out of the Partnership’s assets;




     (7) the distribution of Partnership cash or other Partnership assets in accordance with
this Agreement, the holding, management, investment and reinvestment of cash and other
assets of the Partnership, and the collection and receipt of revenues, rents and income of
the Partnership;




     (8) the selection and dismissal of employees of the Partnership or the General Partner
(including, without limitation, employees having titles or offices such as “president,”
“vice president,” “secretary” and “treasurer”), and agents, outside attorneys, accountants,
consultants and contractors of the Partnership or the General Partner and the determination
of their compensation and other terms of employment or hiring;




     (9) the maintenance of such insurance for the benefit of the Partnership and the
Partners as it deems necessary or appropriate;




     (10) the formation of, or acquisition of an interest in, and the contribution of
property to, any further limited or general partnerships, limited liability companies, joint
ventures or other relationships that it deems desirable (including, without limitation, the
acquisition of interests in, and the contributions of property to, any Subsidiary and any
other Person in which it has an equity investment from time to time); provided,
however, that, as long as the Previous General Partner has determined to continue to
qualify as a REIT, the General Partner may not engage in any such formation, acquisition or
contribution that would cause the Previous General Partner to fail to qualify as a REIT or
the General Partner to fail to qualify as a “qualified REIT subsidiary” within the meaning
of Code Section 856(i)(2);



28









 






     (11) the control of any matters affecting the rights and obligations of the
Partnership, including the settlement, compromise, submission to arbitration or any other
form of dispute resolution, or abandonment, of any claim, cause of action, liability, debt
or damages, due or owing to or from the
Partnership, the commencement or defense of suits, legal proceedings, administrative
proceedings, arbitrations or other forms of dispute resolution, and the representation of
the Partnership in all suits or legal proceedings, administrative proceedings, arbitrations
or other forms of dispute resolution, the incurring of legal expense, and the
indemnification of any Person against liabilities and contingencies to the extent permitted
by law;




     (12) the undertaking of any action in connection with the Partnership’s direct or
indirect investment in any Subsidiary or any other Person (including, without limitation,
the contribution or loan of funds by the Partnership to such Persons);




     (13) the determination of the fair market value of any Partnership property distributed
in kind using such reasonable method of valuation as it may adopt; provided that
such methods are otherwise consistent with the requirements of this Agreement;




     (14) the enforcement of any rights against any Partner pursuant to representations,
warranties, covenants and indemnities relating to such Partner’s contribution of property or
assets to the Partnership;




     (15) the exercise, directly or indirectly, through any attorney- in-fact acting under a
general or limited power of attorney, of any right, including the right to vote, appurtenant
to any asset or investment held by the Partnership;




     (16) the exercise of any of the powers of the General Partner enumerated in this
Agreement on behalf of or in connection with any Subsidiary of the Partnership or any other
Person in which the Partnership has a direct or indirect interest, or jointly with any such
Subsidiary or other Person;




     (17) the exercise of any of the powers of the General Partner enumerated in this
Agreement on behalf of any Person in which the Partnership does not have an interest,
pursuant to contractual or other arrangements with such Person;




     (18) the making, execution and delivery of any and all deeds, leases, notes, deeds to
secure debt, mortgages, deeds of trust, security agreements, conveyances, contracts,
guarantees, warranties, indemnities, waivers, releases or legal instruments or agreements in
writing necessary or appropriate in the judgment of the General Partner for the
accomplishment of any of the powers of the General Partner enumerated in this Agreement;




     (19) the issuance of additional Partnership Units, as appropriate and in the General
Partner’s sole and absolute discretion, in connection with Capital Contributions by
Additional Limited Partners and additional Capital Contributions by Partners pursuant to
Article 4 hereof; and




     (20) an election to dissolve the Partnership pursuant to Section 13.1.C hereof.



          B. Each of the Limited Partners agrees that, except as provided in Section 7.3 hereof, the
General Partner is authorized to execute, deliver and perform the above-mentioned agreements and
transactions on behalf of the Partnership without any further act, approval or vote of the
Partners, notwithstanding any other provision of this Agreement (except as provided in Section 7.3
hereof), the Act or any applicable law, rule or regulation. The execution, delivery or performance
by the General Partner or the Partnership of any agreement authorized or permitted under this
Agreement shall not constitute a breach by the General Partner of any duty that




29









 







The General Partner
may owe the Partnership or the Limited Partners or any other Persons under this Agreement or of any
duty stated or implied by law or equity.




          C. At all times from and after the date hereof, the General Partner may cause the Partnership
to obtain and maintain (i) casualty, liability and other insurance on the Properties of the
Partnership and (ii) liability insurance for the Indemnitees hereunder.




          D. At all times from and after the date hereof, the General Partner may cause the Partnership
to establish and maintain working capital and other reserves in such amounts as the General
Partner, in its sole and absolute discretion, deems appropriate and reasonable from time to time.




          E. In exercising its authority under this Agreement, the General Partner may, but shall be
under no obligation to, take into account the tax consequences to any Partner (including the
General Partner) of any action taken by it. The General Partner and the Partnership shall not have
liability to a Limited Partner under any circumstances as a result of an income tax liability
incurred by such Limited Partner as a result of an action (or inaction) by the General Partner
pursuant to its authority under this Agreement so long as the action or inaction is taken in good
faith.




          Section 7.2 Certificate of Limited Partnership. To the extent that such action is
determined by the General Partner to be reasonable and necessary or appropriate, the General
Partner shall file amendments to and restatements of the Certificate and do all the things to
maintain the Partnership as a limited partnership (or a partnership in which the limited partners
have limited liability) under the laws of the State of Delaware and each other state, the District
of Columbia or any other jurisdiction, in which the Partnership may elect to do business or own
property. Subject to the terms of Section 8.5.A(4) hereof, the General Partner shall not be
required, before or after filing, to deliver or mail a copy of the Certificate or any amendment
thereto to any Limited Partner. The General Partner shall use all reasonable efforts to cause to
be filed such other certificates or documents as may be reasonable and necessary or appropriate for
the formation, continuation, qualification and operation of a limited partnership (or a partnership
in which the limited partners have limited liability to the extent provided by applicable law) in
the State of Delaware and any other state, or the District of Columbia or other jurisdiction, in
which the Partnership may elect to do business or own property.




          Section 7.3 Restrictions on General Partner’s Authority.




          A. The General Partner may not take any action in contravention of this Agreement, including,
without limitation:





     (1) take any action that would make it impossible to carry on the ordinary business of
the Partnership, except as otherwise provided in this Agreement;




     (2) possess Partnership property, or assign any rights in specific Partnership
property, for other than a Partnership purpose except as otherwise provided in this
Agreement;




     (3) admit a Person as a Partner, except as otherwise provided in this Agreement;




     (4) perform any act that would subject a Limited Partner to liability as a general
partner in any jurisdiction or any other liability except as provided herein or under the
Act; or




     (5) enter into any contract, mortgage, loan or other agreement that prohibits or
restricts, or has the effect of prohibiting or restricting, the ability of (a) the General
Partner, the Previous General Partner or the Partnership from satisfying its obligations
under Section 8.6 hereof in full or (b) a Limited



30









 







Partner from exercising its rights under Section 8.6 hereof to effect a Redemption in
full, except, in either case, with the written consent of such Limited Partner affected by
the prohibition or restriction.



          B. The General Partner shall not, without the prior Consent of the Limited Partners,
undertake, on behalf of the Partnership, any of the following actions or enter into any transaction
that would have the effect of such transactions:





     (1) except as provided in Section 7.3.C hereof, amend, modify or terminate this
Agreement other than to reflect the admission, substitution, termination or withdrawal of
Partners pursuant to Article 11 or Article 12 hereof;




     (2) make a general assignment for the benefit of creditors or appoint or acquiesce in
the appointment of a custodian, receiver or trustee for all or any part of the assets of the
Partnership;




     (3) institute any proceeding for bankruptcy on behalf of the Partnership; or




     (4) subject to the rights of Transfer provided in Sections 11.1.C and 11.2 hereof,
approve or acquiesce to the Transfer of the Partnership Interest of the General Partner, or
admit into the Partnership any additional or successor General Partners.



          C. Notwithstanding Section 7.3.B hereof, the General Partner shall have the power, without the
Consent of the Limited Partners, to amend this Agreement as may be required to facilitate or
implement any of the following purposes:





     (1) to add to the obligations of the General Partner or surrender any right or power
granted to the General Partner or any Affiliate of the General Partner for the benefit of
the Limited Partners;




     (2) to reflect the admission, substitution or withdrawal of Partners or the termination
of the Partnership in accordance with this Agreement, and to amend Exhibits A and
C in connection with such admission, substitution or withdrawal;




     (3) to reflect a change that is of an inconsequential nature and does not adversely
affect the Limited Partners in any material respect, or to cure any ambiguity, correct or
supplement any provision in this Agreement not inconsistent with law or with other
provisions, or make other changes with respect to matters arising under this Agreement that
will not be inconsistent with law or with the provisions of this Agreement;




     (4) to satisfy any requirements, conditions or guidelines contained in any order,
directive, opinion, ruling or regulation of a federal or state agency or contained in
federal or state law;




     (5) (a) to reflect such changes as are reasonably necessary (i) for either the General
Partner or the Special Limited Partner, as the case may be, to maintain its status as a
“qualified REIT subsidiary” within the meaning of Code Section 856(i)(2) or (ii) for the
Previous General Partner to maintain its status as a REIT or to satisfy the REIT
Requirement; (b) to reflect the Transfer of all or any part of a Partnership Interest among
the Previous General Partner, the General Partner, the Special Limited Partner or any other
“qualified REIT subsidiary” (within the meaning of Code Section 856(i)(2)) with respect to
the Previous General Partner;




     (6) to modify the manner in which Capital Accounts are computed (but only to the extent
set forth in the definition of “Capital Account” or contemplated by the Code or the
Regulations); and



31









 






     (7) the issuance of additional Partnership Interests in accordance with Section 4.2.


The General Partner will provide notice to the Limited Partners when any action under this Section
7.3.C is taken.




          D. Notwithstanding Sections 7.3.B and 7.3.C hereof, this Agreement shall not be amended, and
no action may be taken by the General Partner, without the Consent of each Partner adversely
affected, if such amendment or action would (i) convert a Limited Partner Interest in the
Partnership into a General Partner Interest (except as a result of the General Partner acquiring
such Partnership Interest), (ii) modify the limited liability of a Limited Partner, (iii) alter the
rights of any Partner to receive the distributions to which such Partner is entitled, pursuant to
Article 5 or Section 13.2.A(4) hereof, or alter the allocations specified in Article 6 hereof
(except, in any case, as permitted pursuant to Sections 4.2 and 7.3.C hereof), (iv) alter or modify
the Redemption rights, Cash Amount or REIT Shares Amount as set forth in Sections 8.6 and 11.2
hereof, or amend or modify any related definitions, or (v) amend this Section 7.3.D;
provided, however, that the Consent of each Partner adversely affected shall not be
required for any amendment or action that affects all Partners holding the same class or series of
Partnership Units on a uniform or pro rata basis. Further, no amendment may alter the restrictions
on the General Partner’s authority set forth elsewhere in this Section 7.3 without the Consent
specified therein. Any such amendment or action consented to by any Partner shall be effective as
to that Partner, notwithstanding the absence of such consent by any other Partner.




          Section 7.4 Reimbursement of the General Partner.




          A. The General Partner shall not be compensated for its services as general partner of the
Partnership except as provided in elsewhere in this Agreement (including the provisions of Articles
5 and 6 hereof regarding distributions, payments and allocations to which it may be entitled in its
capacity as the General Partner).




          B. Subject to Sections 7.4.C and 15.11 hereof, the Partnership shall be liable for, and shall
reimburse the General Partner on a monthly basis, or such other basis as the General Partner may
determine in its sole and absolute discretion, for all sums expended in connection with the
Partnership’s business, including, without limitation, (i) expenses relating to the ownership of
interests in and management and operation of, or for the benefit of, the Partnership, (ii)
compensation of officers and employees, including, without limitation, payments under future
compensation plans of the General Partner that may provide for stock units, or other phantom stock,
pursuant to which employees of the General Partner will receive payments based upon dividends on or
the value of REIT Shares, (iii) director fees and expenses; (iv) all costs and expenses of the
General Partner being a public company, including costs of filings with the SEC, reports and other
distributions to its shareholders and (v) income taxes or other similar types of costs, including
but not limited to franchise taxes or related fees (in lieu of reimbursement, the Partnership may
instead (in whole or in part) specially allocate income as necessary to reimburse the General
Partner in full); provided, however, that the amount of any reimbursement shall be
reduced by any interest earned by the General Partner with respect to bank accounts or other
instruments or accounts held by it on behalf of the Partnership as permitted pursuant to Section
7.5 hereof. Such reimbursements shall be in addition to any reimbursement of the General Partner
as a result of indemnification pursuant to Section 7.7 hereof.




          C. To the extent practicable, Partnership expenses shall be billed directly to and paid by the
Partnership and, subject to Section 15.11 hereof, reimbursements to the General Partner or any of
its Affiliates by the Partnership pursuant to this Section 7.4 shall be treated as “guaranteed
payments” within the meaning of Code Section 707(c).




          Section 7.5 Outside Activities of the Previous General Partner and the General Partner. Neither the General Partner nor the Previous General Partner shall directly or indirectly enter
into or conduct any business, other than in connection with (a) the ownership, acquisition and
disposition of Partnership Interests as General Partner, (b) the management of the business of the
Partnership, (c) the operation of the Previous General Partner as a reporting company with a class
(or classes) of securities registered under the Exchange Act, (d) the




32









 







Previous General Partner’s
operations as a REIT, (e) the offering, sale, syndication, private placement or public offering of
stock, bonds, securities or other interests, (f) financing or refinancing of any type related to
the Partnership or its assets or activities, (g) the General Partner’s qualification as a
“qualified REIT subsidiary” (within the meaning of Code Section 856(i)(2)) and (h) such activities
as are incidental thereto. Nothing contained herein shall be deemed to prohibit the General
Partner or the Previous General Partner from executing guarantees of Partnership debt for which it
would otherwise be liable in its capacity as General Partner. Subject to Section 7.3.B hereof, the
General Partner, the Previous General Partner, the Special Limited Partner and all “qualified REIT
subsidiaries” (within the meaning of Code Section 856(i)(2)), taken as a group, shall not own any
assets or take title to assets (other than temporarily in connection with an acquisition prior to
contributing such assets to the Partnership) other than Partnership Interests as the General
Partner or Special Limited Partner and other than such cash and cash equivalents, bank accounts or
similar instruments or accounts as such group deems reasonably necessary, taking into account
Section 7.1.D hereof and the requirements necessary for the Previous General Partner to qualify as
a REIT and for the Previous General Partner, the General Partner and the Special Limited Partner to
carry out their respective responsibilities contemplated under this Agreement and the Charter.
Notwithstanding the foregoing, if the Previous General Partner or the General Partner acquires
assets in its own name and owns Property other than through the Partnership, the Partners agree to
negotiate in good faith to amend this Agreement, including, without limitation, the definition of
“Adjustment Factor,” to reflect such activities and the direct ownership of assets by the Previous
General Partner or the General Partner. The General Partner and any Affiliates of the General
Partner may acquire Limited Partner Interests and shall be entitled to exercise all rights of a
Limited Partner relating to such Limited Partner Interests.




          Section 7.6 Contracts with Affiliates.




          A. The Partnership may lend or contribute funds or other assets to its Subsidiaries or other
Persons in which it has an equity investment, and such Persons may borrow funds from the
Partnership, on terms and conditions established in the sole and absolute discretion of the General
Partner. The foregoing authority shall not create any right or benefit in favor of any Subsidiary
or any other Person.




          B. Except as provided in Section 7.5 hereof and subject to Section 3.1 hereof, the Partnership
may transfer assets to joint ventures, limited liability companies, partnerships, corporations,
business trusts or other business entities in which it is or thereby becomes a participant upon
such terms and subject to such conditions consistent with this Agreement and applicable law as the
General Partner, in its sole and absolute discretion, believes to be advisable.




          C. Except as expressly permitted by this Agreement, neither the General Partner nor any of its
Affiliates shall sell, transfer or convey any property to the Partnership, directly or indirectly,
except pursuant to transactions that are determined by the General Partner in good faith to be fair
and reasonable.




          D. The General Partner, in its sole and absolute discretion and without the approval of the
Limited Partners, may propose and adopt on behalf of the Partnership employee benefit plans funded
by the Partnership for the benefit of employees of the General Partner, the Partnership,
Subsidiaries of the Partnership or any Affiliate of any of them in respect of services performed,
directly or indirectly, for the benefit of the Partnership or any of the Partnership’s
Subsidiaries.




          E. The General Partner is expressly authorized to enter into, in the name and on behalf of the
Partnership, a right of first opportunity arrangement and other conflict avoidance agreements with
various Affiliates of the Partnership and the General Partner, on such terms as the General
Partner, in its sole and absolute discretion, believes are advisable.




33









 








          Section 7.7 Indemnification.




          A. To the fullest extent permitted by applicable law, the Partnership shall indemnify each
Indemnitee from and against any and all losses, claims, damages, liabilities, joint or several,
expenses (including, without limitation, attorney’s fees and other legal fees and expenses),
judgments, fines, settlements and other amounts arising from any and all claims, demands, actions,
suits or proceedings, civil, criminal, administrative or investigative, that relate to the
operations of the Partnership (“Actions”) as set forth in this Agreement in which such
Indemnitee may be involved, or is threatened to be involved, as a party or otherwise;
provided, however, that the Partnership shall not indemnify an Indemnitee (i) for
willful misconduct or a knowing violation of the law or (ii) for any transaction for which such
Indemnitee received an improper personal benefit in violation or breach of any provision of this
Agreement. Without limitation, the foregoing indemnity shall extend to any liability of any
Indemnitee, pursuant to a loan guaranty or otherwise, for any indebtedness of the Partnership or
any Subsidiary of the Partnership (including, without limitation, any indebtedness which the
Partnership or any Subsidiary of the Partnership has assumed or taken subject to), and the General
Partner is hereby authorized and empowered, on behalf of the Partnership, to enter into one or more
indemnity agreements consistent with the provisions of this Section 7.7 in favor of any Indemnitee
having or potentially having liability for any such indebtedness. It is the intention of this
Section 7.7.A that the Partnership indemnify each Indemnitee to the fullest extent permitted by
law. The termination of any proceeding by judgment, order or settlement does not create a
presumption that the Indemnitee did not meet the requisite standard of conduct set forth in this
Section 7.7.A. The termination of any proceeding by conviction of an Indemnitee or upon a plea of
nolo contendere or its equivalent by an Indemnitee, or an entry of an order of probation against an
Indemnitee prior to judgment, does not create a presumption that such Indemnitee acted in a manner
contrary to that specified in this Section 7.7.A with respect to the subject matter of such
proceeding. Any indemnification pursuant to this Section 7.7 shall be made only out of the assets
of the Partnership, and neither the General Partner nor any Limited Partner shall have any
obligation to contribute to the capital of the Partnership or otherwise provide funds to enable the
Partnership to fund its obligations under this Section 7.7.




          B. To the fullest extent permitted by law, expenses incurred by an Indemnitee who is a party
to a proceeding or otherwise subject to or the focus of or is involved in any Action shall be paid
or reimbursed by the Partnership as incurred by the Indemnitee in advance of the final disposition
of the Action upon receipt by the Partnership of (i) a written affirmation by the Indemnitee of the
Indemnitee’s good faith belief that the standard of conduct necessary for indemnification by the
Partnership as authorized in this Section 7.7.A has been met, and (ii) a written undertaking by or
on behalf of the Indemnitee to repay the amount if it shall ultimately be determined that the
standard of conduct has not been met.




          C. The indemnification provided by this Section 7.7 shall be in addition to any other rights
to which an Indemnitee or any other Person may be entitled under any agreement, pursuant to any
vote of the Partners, as a matter of law or otherwise, and shall continue as to an Indemnitee who
has ceased to serve in such capacity and shall inure to the benefit of the heirs, successors,
assigns and administrators of the Indemnitee unless otherwise provided in a written agreement with
such Indemnitee or in the writing pursuant to which such Indemnitee is indemnified.




          D. The Partnership may, but shall not be obligated to, purchase and maintain insurance, on
behalf of any of the Indemnitees and such other Persons as the General Partner shall determine,
against any liability
that may be asserted against or expenses that may be incurred by such Person in connection
with the Partnership’s activities, regardless of whether the Partnership would have the power to
indemnify such Person against such liability under the provisions of this Agreement.




          E. Any liabilities which an Indemnitee incurs as a result of acting on behalf of the
Partnership or the General Partner (whether as a fiduciary or otherwise) in connection with the
operation, administration or maintenance of an employee benefit plan or any related trust or
funding mechanism (whether such




34









 







liabilities are in the form of excise taxes assessed by the IRS,
penalties assessed by the Department of Labor, restitutions to such a plan or trust or other
funding mechanism or to a participant or beneficiary of such plan, trust or other funding
mechanism, or otherwise) shall be treated as liabilities or judgments or fines under this Section
7.7, unless such liabilities arise as a result of (i) such Indemnitee’s intentional misconduct or
knowing violation of the law, or (ii) any transaction in which such Indemnitee received a personal
benefit in violation or breach of any provision of this Agreement or applicable law.




          F. In no event may an Indemnitee subject any of the Partners to personal liability by reason
of the indemnification provisions set forth in this Agreement.




          G. An Indemnitee shall not be denied indemnification in whole or in part under this Section
7.7 because the Indemnitee had an interest in the transaction with respect to which the
indemnification applies if the transaction was otherwise permitted by the terms of this Agreement.




          H. The provisions of this Section 7.7 are for the benefit of the Indemnitees, their heirs,
successors, assigns and administrators and shall not be deemed to create any rights for the benefit
of any other Persons. Any amendment, modification or repeal of this Section 7.7 or any provision
hereof shall be prospective only and shall not in any way affect the limitations on the
Partnership’s liability to any Indemnitee under this Section 7.7 as in effect immediately prior to
such amendment, modification or repeal with respect to claims arising from or relating to matters
occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when
such claims may arise or be asserted.




          I. It is the intent of the Partners that any amounts paid by the Partnership to the General
Partner pursuant to this Section 7.7 shall be treated as “guaranteed payments” within the meaning
of Code Section 707(c).




          Section 7.8 Liability of the General Partner.




          A. Notwithstanding anything to the contrary set forth in this Agreement, neither the General
Partner nor any of its directors or officers shall be liable or accountable in damages or otherwise
to the Partnership, any Partners or any Assignees for losses sustained, liabilities incurred or
benefits not derived as a result of errors in judgment or mistakes of fact or law or of any act or
omission if the General Partner or such director or officer acted in good faith.




          B. The Limited Partners expressly acknowledge that the General Partner is acting for the
benefit of the Partnership, the Limited Partners and the General Partner’s shareholders
collectively and that the General Partner is under no obligation to give priority to the separate
interests of the Limited Partners or the General Partner’s shareholders (including, without
limitation, the tax consequences to Limited Partners, Assignees or the General Partner’s
shareholders) in deciding whether to cause the Partnership to take (or decline to take) any
actions.




          C. Subject to its obligations and duties as General Partner set forth in Section 7.1.A hereof,
the General Partner may exercise any of the powers granted to it by this Agreement and perform any
of the duties
imposed upon it hereunder either directly or by or through its employees or agents (subject to
the supervision and control of the General Partner). The General Partner shall not be responsible
for any misconduct or negligence on the part of any such agent appointed by it in good faith.




          D. Any amendment, modification or repeal of this Section 7.8 or any provision hereof shall be
prospective only and shall not in any way affect the limitations on the General Partner’s, and its
officers’ and directors’, liability to the Partnership and the Limited Partners under this Section
7.8 as in effect immediately prior to such amendment, modification or repeal with respect to claims
arising from or relating to matters occurring, in




35









 







whole or in part, prior to such amendment,
modification or repeal, regardless of when such claims may arise or be asserted.




          E. Notwithstanding anything herein to the contrary, except for fraud, willful misconduct or
gross negligence, or pursuant to any express indemnities given to the Partnership by any Partner
pursuant to any other written instrument, no Partner shall have any personal liability whatsoever,
to the Partnership or to the other Partner(s), for the debts or liabilities of the Partnership or
the Partnership’s obligations hereunder, and the full recourse of the other Partner(s) shall be
limited to the interest of that Partner in the Partnership. To the fullest extent permitted by
law, no officer, director or shareholder of the General Partner shall be liable to the Partnership
for money damages except for (i) active and deliberate dishonesty established by a non-appealable
final judgment or (ii) actual receipt of an improper benefit or profit in money, property or
services. Without limitation of the foregoing, and except for fraud, willful misconduct or gross
negligence, or pursuant to any such express indemnity, no property or assets of any Partner, other
than its interest in the Partnership, shall be subject to levy, execution or other enforcement
procedures for the satisfaction of any judgment (or other judicial process) in favor of any other
Partner(s) and arising out of, or in connection with, this Agreement. This Agreement is executed
by the officers of the General Partner solely as officers of the same and not in their own
individual capacities.




          F. To the extent that, at law or in equity, the General Partner has duties (including
fiduciary duties) and liabilities relating thereto to the Partnership or the Limited Partners, the
General Partner shall not be liable to the Partnership or to any other Partner for its good faith
reliance on the provisions of this Agreement. The provisions of this Agreement, to the extent that
they restrict the duties and liabilities of the General Partner otherwise existing at law or in
equity, are agreed by the Partners to replace such other duties and liabilities of such General
Partner.




          Section 7.9 Other Matters Concerning the General Partner.




          A. The General Partner may rely and shall be protected in acting or refraining from acting
upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent,
order, bond, debenture or other paper or document believed by it in good faith to be genuine and to
have been signed or presented by the proper party or parties.




          B. The General Partner may consult with legal counsel, accountants, appraisers, management
consultants, investment bankers, architects, engineers, environmental consultants and other
consultants and advisers selected by it, and any act taken or omitted to be taken in reliance upon
the opinion of such Persons as to matters that the General Partner reasonably believes to be within
such Person’s professional or expert competence shall be conclusively presumed to have been done or
omitted in good faith and in accordance with such opinion.




          C. The General Partner shall have the right, in respect of any of its powers or obligations
hereunder, to act through any of its duly authorized officers and a duly appointed attorney or
attorneys-in-fact. Each such attorney shall, to the extent provided by the General Partner in the
power of attorney, have full power and
authority to do and perform all and every act and duty that is permitted or required to be
done by the General Partner hereunder.




          D. Notwithstanding any other provision of this Agreement or the Act, any action of the General
Partner on behalf of the Partnership or any decision of the General Partner to refrain from acting
on behalf of the Partnership, undertaken in the good faith belief that such action or omission is
necessary or advisable in order (i) to protect the ability of the Previous General Partner to
continue to qualify as a REIT, (ii) for the Previous General Partner otherwise to satisfy the REIT
Requirements, (iii) to avoid the Previous General Partner incurring any taxes under Code Section
857 or Code Section 4981 or (iv) for the General Partner or the Special Limited Partner to continue
to qualify as a “qualified REIT subsidiary” (within the meaning of Code Section 856(i)(2)), is
expressly authorized under this Agreement and is deemed approved by all of the Limited Partners.




36









 








          Section 7.10 Title to Partnership Assets. Title to Partnership assets, whether real,
personal or mixed and whether tangible or intangible, shall be deemed to be owned by the
Partnership as an entity, and no Partner, individually or collectively with other Partners or
Persons, shall have any ownership interest in such Partnership assets or any portion thereof.
Title to any or all of the Partnership assets may be held in the name of the Partnership, the
General Partner or one or more nominees, as the General Partner may determine, including Affiliates
of the General Partner. The General Partner hereby declares and warrants that any Partnership
assets for which legal title is held in the name of the General Partner or any nominee or Affiliate
of the General Partner shall be held by the General Partner for the use and benefit of the
Partnership in accordance with the provisions of this Agreement; provided, however,
that the General Partner shall use its best efforts to cause beneficial and record title to such
assets to be vested in the Partnership as soon as reasonably practicable. All Partnership assets
shall be recorded as the property of the Partnership in its books and records, irrespective of the
name in which legal title to such Partnership assets is held.




          Section 7.11 Reliance by Third Parties. Notwithstanding anything to the contrary in this
Agreement, any Person dealing with the Partnership shall be entitled to assume that the General
Partner has full power and authority, without the consent or approval of any other Partner or
Person, to encumber, sell or otherwise use in any manner any and all assets of the Partnership and
to enter into any contracts on behalf of the Partnership, and take any and all actions on behalf of
the Partnership, and such Person shall be entitled to deal with the General Partner as if it were
the Partnership’s sole party in interest, both legally and beneficially. Each Limited Partner
hereby waives any and all defenses or other remedies that may be available against such Person to
contest, negate or disaffirm any action of the General Partner in connection with any such dealing.
In no event shall any Person dealing with the General Partner or its representatives be obligated
to ascertain that the terms of this Agreement have been complied with or to inquire into the
necessity or expediency of any act or action of the General Partner or its representatives. Each
and every certificate, document or other instrument executed on behalf of the Partnership by the
General Partner or its representatives shall be conclusive evidence in favor of any and every
Person relying thereon or claiming thereunder that (i) at the time of the execution and delivery of
such certificate, document or instrument, this Agreement was in full force and effect, (ii) the
Person executing and delivering such certificate, document or instrument was duly authorized and
empowered to do so for and on behalf of the Partnership and (iii) such certificate, document or
instrument was duly executed and delivered in accordance with the terms and provisions of this
Agreement and is binding upon the Partnership.




ARTICLE 8

RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS




          Section 8.1 Limitation of Liability. The Limited Partners shall have no liability under this Agreement except as expressly provided
in this Agreement (including, without limitation, Section 10.4 hereof) or under the Act.




          Section 8.2 Management of Business. No Limited Partner or Assignee (other than the General
Partner, any of its Affiliates or any officer, director, member, employee, partner, agent or
trustee of the General Partner, the Partnership or any of their Affiliates, in their capacity as
such) shall take part in the operations, management or control (within the meaning of the Act) of
the Partnership’s business, transact any business in the Partnership’s name or have the power to
sign documents for or otherwise bind the Partnership. The transaction of any such business by the
General Partner, any of its Affiliates or any officer, director, member, employee, partner, agent,
representative, or trustee of the General Partner, the Partnership or any of their Affiliates, in
their capacity as such, shall not affect, impair or eliminate the limitations on the liability of
the Limited Partners or Assignees under this Agreement.




          Section 8.3 Outside Activities of Limited Partners. Subject to any agreements entered into
pursuant to Section 7.6.D hereof and any other agreements entered into by a Limited Partner or its
Affiliates with the




37









 







General Partner, the Partnership or a Subsidiary (including, without
limitation, any employment agreement), any Limited Partner and any Assignee, officer, director,
employee, agent, trustee, Affiliate or shareholder of any Limited Partner shall be entitled to and
may have business interests and engage in business activities in addition to those relating to the
Partnership, including business interests and activities that are in direct or indirect competition
with the Partnership or that are enhanced by the activities of the Partnership. Neither the
Partnership nor any Partners shall have any rights by virtue of this Agreement in any business
ventures of any Limited Partner or Assignee. Subject to such agreements, none of the Limited
Partners nor any other Person shall have any rights by virtue of this Agreement or the partnership
relationship established hereby in any business ventures of any other Person (other than the
General Partner, to the extent expressly provided herein), and such Person shall have no obligation
pursuant to this Agreement, subject to Section 7.6.D hereof and any other agreements entered into
by a Limited Partner or its Affiliates with the General Partner, the Partnership or a Subsidiary,
to offer any interest in any such business ventures to the Partnership, any Limited Partner or any
such other Person, even if such opportunity is of a character that, if presented to the
Partnership, any Limited Partner or such other Person, could be taken by such Person.




          Section 8.4 Return of Capital. Except pursuant to the rights of Redemption set forth in
Section 8.6 hereof, no Limited Partner shall be entitled to the withdrawal or return of its Capital
Contribution, except to the extent of distributions made pursuant to this Agreement or upon
termination of the Partnership as provided herein. Except to the extent provided in Article 6
hereof or otherwise expressly provided in this Agreement, no Limited Partner or Assignee shall have
priority over any other Limited Partner or Assignee either as to the return of Capital
Contributions or as to profits, losses or distributions.




          Section 8.5 Rights of Limited Partners Relating to the Partnership.




          A. In addition to other rights provided by this Agreement or by the Act, and except as limited
by Section 8.5.C hereof, each Limited Partner shall have the right, for a purpose reasonably
related to such Limited Partner’s interest as a limited partner in the Partnership, upon written
demand with a statement of the purpose of such demand and at such Limited Partner’s own expense:





     (1) to obtain a copy of (i) the most recent annual and quarterly reports filed with the
SEC by the Previous General Partner or the General Partner pursuant to the Exchange Act and
(ii) each report or other written communication sent to the shareholders of the Previous
General Partner;




     (2) to obtain a copy of the Partnership’s federal, state and local income tax returns
for each Fiscal Year;




     (3) to obtain a current list of the name and last known business, residence or mailing
address of each Partner;




     (4) to obtain a copy of this Agreement and the Certificate and all amendments thereto,
together with executed copies of all powers of attorney pursuant to which this Agreement,
the Certificate and all amendments thereto have been executed; and




     (5) to obtain true and full information regarding the amount of cash and a description
and statement of any other property or services contributed by each Partner and that each
Partner has agreed to contribute in the future, and the date on which each became a Partner.



          B. The Partnership shall notify any Limited Partner that is a Qualifying Party, on request, of
the then current Adjustment Factor or any change made to the Adjustment Factor.




          C. Notwithstanding any other provision of this Section 8.5, the General Partner may keep
confidential from the Limited Partners, for such period of time as the General Partner determines
in its sole and




38









 







absolute discretion to be reasonable, any information that (i) the General Partner
believes to be in the nature of trade secrets or other information the disclosure of which the
General Partner in good faith believes is not in the best interests of the Partnership or the
General Partner or (ii) the Partnership or the General Partner is required by law or by agreements
with unaffiliated third parties to keep confidential.




          Section 8.6 Redemption Rights of Qualifying Parties.




          A. After the first Twelve-Month Period, a Qualifying Party, but no other Limited Partner or
Assignee, shall have the right (subject to the terms and conditions set forth herein) to require
the Partnership to redeem all or a portion of the Redeemable Units held by such Tendering Party
(such Redeemable Units being hereafter “Tendered Units”) in exchange (a
“Redemption”) for REIT shares issuable on, or the Cash Amount payable on, the Specified
Redemption Date, as determined by the Partnership in its sole discretion. Any Redemption shall be
exercised pursuant to a Notice of Redemption delivered to the General Partner by the Qualifying
Party when exercising the Redemption right (the “Tendering Party”). A Tendering Party
shall have no right to receive distributions with respect to any Tendered Units (other than the
Cash Amount) paid after delivery of the Notice of Redemption, whether or not the Partnership Record
Date for such distribution precedes or coincides with such delivery of the Notice of Redemption.
If the Partnership elects to redeem Tendered Units for cash, the Cash Amount shall be delivered as
a certified check payable to the Tendering Party or, in the General Partner’s sole and absolute
discretion, in immediately available funds.




          B. If the Partnership elects to redeem Tendered Units for REIT Shares rather than cash, then
the Partnership shall direct the Previous General Partner to issue and deliver such REIT Shares to
the Tendering Party pursuant to the terms set forth in this Section 8.6.B, in which case, (i) the
Previous General Partner, acting as a distinct legal entity, shall assume directly the obligation
with respect thereto and shall satisfy the Tendering Party’s exercise of its Redemption right, and
(ii) such transaction shall be treated, for federal income tax purposes, as a transfer by the
Tendering Party of such Tendered Units to the Previous General Partner in exchange for REIT shares.
The percentage of the Tendered Units tendered for Redemption by the Tendering Party for which
the Partnership elects to cause the Previous General Partner to issue REIT Shares (rather than
cash) is referred to as the “Applicable Percentage.” In making such election to cause the
Previous General Partner to acquire Tendered Units, the Partnership shall act in a fair, equitable
and reasonable manner that neither prefers one group or class of Qualifying Parties over another
nor discriminates against a group or class of Qualifying Parties. If the Partnership elects to
redeem any number of Tendered Units for REIT Shares, rather than cash, on the Specified Redemption
Date, the Tendering Party shall sell such number of the Tendered Units to the Previous General
Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares Amount and
the Applicable Percentage. The Tendering Party shall submit (i) such information, certification or
affidavit as the Previous General Partner may reasonably require in connection with the application
of the Ownership Limit and other restrictions and limitations of the Charter to any such
acquisition and (ii) such written representations, investment letters, legal opinions or other
instruments necessary, in the Previous General Partner’s view, to effect compliance with the
Securities Act. The product of the Applicable Percentage and the REIT Shares Amount, if
applicable, shall be delivered by the Previous General Partner as duly authorized, validly issued,
fully paid and accessible REIT Shares and, if applicable, Rights, free of any pledge, lien,
encumbrance or restriction, other than the Ownership Limit and other restrictions provided in the
Charter, the Bylaws of the Previous General Partner, the Securities Act and relevant state
securities or “blue sky” laws. Neither any Tendering Party whose Tendered Units are acquired by
the Previous General Partner pursuant to this Section 8.6.B, any Partner, any Assignee nor any
other interested Person shall have any right to require or cause the Previous General Partner or
the General Partner to register, qualify or list any REIT Shares owned or held by such Person,
whether or not such REIT Shares are issued pursuant to this Section 8.6.B, with the SEC, with any
state securities commissioner, department or agency, under the Securities Act or the Exchange Act
or with any stock exchange; provided, however, that this limitation shall not be in
derogation of any registration or similar rights granted pursuant to any other written agreement
between the Previous General Partner and any such Person. Notwithstanding any delay in such
delivery, the Tendering Party shall be deemed the owner of such REIT Shares and Rights for all
purposes, including, without limitation, rights to vote or consent, receive dividends, and




39









 







exercise
rights, as of the Specified Redemption Date. REIT Shares issued upon an acquisition of the
Tendered Units by the Previous General Partner pursuant to this Section 8.6.B may contain such
legends regarding restrictions under the Securities Act and applicable state securities laws as the
Previous General Partner in good faith determines to be necessary or advisable in order to ensure
compliance with such laws.




          C. Notwithstanding the provisions of Section 8.6.A and 8.6.B hereof, the Tendering Parties (i)
where the Redemption would consist of less than all the Partnership Common Units held by Partners
other than the General Partner and the Special Limited Partner, shall not be entitled to elect or
effect a Redemption to the extent that the aggregate Percentage Interests of the Limited Partners
(other than the Special Limited Partner) would be reduced, as a result of the Redemption, to less
than one percent (1%) and (ii) shall have no rights under this Agreement that would otherwise be
prohibited under the Charter. To the extent that any attempted Redemption would be in violation of
this Section 8.6.C, it shall be null and void ab initio, and the Tendering Party shall not acquire
any rights or economic interests in REIT Shares otherwise issuable by the Previous General Partner
under Section 8.6.B hereof.




          D. In the event that the Partnership declines to cause the Previous General Partner to acquire
all of the Tendered Units from the Tendering Party in exchange for REIT Shares pursuant to Section
8.6.B hereof following receipt of a Notice of Redemption (a “Declination”):





     (1) The Previous General Partner or the General Partner shall give notice of such
Declination to the Tendering Party on or before the close of business on the Cut-Off Date.




     (2) The Partnership may elect to raise funds for the payment of the Cash Amount either
(a) by requiring that the General Partner contribute such funds from the proceeds of a
registered public offering (a “Public Offering Funding”) by the Previous General
Partner of a number of REIT Shares (“Registrable Shares”) equal to the REIT Shares
Amount with respect to the Tendered Units or (b) from
any other sources (including, but not limited to, the sale of any Property and the
incurrence of additional Debt) available to the Partnership.




     (3) Promptly upon the General Partner’s receipt of the Notice of Redemption and the
Previous General Partner or the General Partner giving notice of the Partnership’s
Declination, the General Partner shall give notice (a “Single Funding Notice”) to
all Qualifying Parties then holding a Partnership Interest (or an interest therein) and
having Redemption rights pursuant to this Section 8.6 and require that all such Qualifying
Parties elect whether or not to effect a Redemption of their Partnership Common Units to be
funded through such Public Offering Funding. In the event that any such Qualifying Party
elects to effect such a Redemption, it shall give notice thereof and of the number of
Partnership Common Units to be made subject thereon in writing to the General Partner within
ten (10) Business Days after receipt of the Single Funding Notice, and such Qualifying Party
shall be treated as a Tendering Party for all purposes of this Section 8.6. In the event
that a Qualifying Party does not so elect, it shall be deemed to have waived its right to
effect a Redemption for the current Twelve-Month Period; provided, however,
that the Previous General Partner shall not be required to acquire Partnership Common Units
pursuant to this Section 8.6.D more than twice within a Twelve-Month Period.


Any proceeds from a Public Offering Funding that are in excess of the Cash Amount shall be for the
sole benefit of the Previous General Partner and/or the General Partner. The General Partner
and/or the Special Limited Partner shall make a Capital Contribution of such amounts to the
Partnership for an additional General Partner Interest and/or Limited Partner Interest. Any such
contribution shall entitle the General Partner and the Special Limited Partner, as the case may be,
to an equitable Percentage Interest adjustment.




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          E. Notwithstanding the provisions of Section 8.6.B hereof, the Previous General Partner shall
not, under any circumstances, elect to acquire Tendered Units in exchange for the REIT Shares
Amount if such exchange would be prohibited under the Charter.




          F. Notwithstanding anything herein to the contrary (but subject to Section 8.6.C hereof), with
respect to any Redemption pursuant to this Section 8.6:





     (1) All Partnership Common Units acquired by the Previous General Partner pursuant to
Section 8.6.B hereof shall be contributed by the Previous General Partner to either or both
of the General Partner and the Special Limited Partner in such proportions as the Previous
General Partner, the General Partner and the Special Limited Partner shall determine. Any
Partnership Common Units so contributed to the General Partner shall automatically, and
without further action required, be converted into and deemed to be a General Partner
Interest comprised of the same number of Partnership Common Units. Any Partnership Common
Units so contributed to the Special Limited Partner shall remain outstanding.




     (2) Subject to the Ownership Limit, no Tendering Party may effect a Redemption for less
than five hundred (500) Redeemable Units or, if such Tendering Party holds (as a Limited
Partner or, economically, as an Assignee) less than five hundred (500) Redeemable Units, all
of the Redeemable Units held by such Tendering Party.




     (3) Each Tendering Party (a) may effect a Redemption only once in each fiscal quarter
of a Twelve-Month Period and (b) may not effect a Redemption during the period after the
Partnership Record Date with respect to a distribution and before the record date
established by the Previous General Partner for a distribution to its shareholders of some
or all of its portion of such Partnership distribution.




     (4) Notwithstanding anything herein to the contrary, with respect to any Redemption or
acquisition of Tendered Units by the Previous General Partner pursuant to Section 8.6.B
hereof, in the event that the Previous General Partner or the General Partner gives notice
to all Limited Partners (but
excluding any Assignees) then owning Partnership Interests (a “Primary Offering
Notice”) that the Previous General Partner desires to effect a primary offering of its
equity securities then, unless the Previous General Partner and the General Partner
otherwise consent, commencement of the actions denoted in Section 8.6.E hereof as to a
Public Offering Funding with respect to any Notice of Redemption thereafter received,
whether or not the Tendering Party is a Limited Partner, may be delayed until the earlier of
(a) the completion of the primary offering or (b) ninety (90) days following the giving of
the Primary Offering Notice.




     (5) Without the Consent of the Previous General Partner, no Tendering Party may effect
a Redemption within ninety (90) days following the closing of any prior Public Offering
Funding.




     (6) The consummation of such Redemption shall be subject to the expiration or
termination of the applicable waiting period, if any, under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.




     (7) The Tendering Party shall continue to own (subject, in the case of an Assignee, to
the provision of Section 11.5 hereof) all Redeemable Units subject to any Redemption, and be
treated as a Limited Partner or an Assignee, as applicable, with respect to such Redeemable
Units for all purposes of this Agreement, until such Redeemable Units are either paid for by
the Partnership pursuant to Section 8.6.A hereof or transferred to the Previous General
Partner (or directly to the General Partner or Special Limited Partner) and paid for, by the
issuance of the REIT Shares, pursuant to Section 8.6.B hereof on the Specified Redemption
Date. Until a Specified Redemption Date and an acquisition of the Tendered Units by the
Previous General Partner pursuant to Section 8.6.B hereof, the Tendering Party shall have no



41









 







rights as a shareholder of the Previous General Partner with respect to the REIT Shares
issuable in connection with such acquisition.


For purposes of determining compliance with the restrictions set forth in this Section 8.6.F, all
Partnership Common Units beneficially owned by a Related Party of a Tendering Party shall be
considered to be owned or held by such Tendering Party.




          G. In connection with an exercise of Redemption rights pursuant to this Section 8.6, the
Tendering Party shall submit the following to the General Partner, in addition to the Notice of
Redemption:





     (1) A written affidavit, dated the same date as the Notice of Redemption, (a)
disclosing the actual and constructive ownership, as determined for purposes of Code
Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any
Related Party and (b) representing that, after giving effect to the Redemption, neither the
Tendering Party nor any Related Party will own REIT Shares in excess of the Ownership Limit;




     (2) A written representation that neither the Tendering Party nor any Related Party has
any intention to acquire any additional REIT Shares prior to the closing of the Redemption
on the Specified Redemption Date; and




     (3) An undertaking to certify, at and as a condition to the closing of the Redemption
on the Specified Redemption Date, that either (a) the actual and constructive ownership of
REIT Shares by the Tendering Party and any Related Party remain unchanged from that
disclosed in the affidavit required by Section 8.6.G(1) or (b) after giving effect to the
Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares in
violation of the Ownership Limit.



          Section 8.7 Partnership Right to Call Limited Partner Interests. Notwithstanding any other provision of this Agreement, on and after the date on which the
aggregate Percentage Interests of the Limited Partners (other than the Special Limited Partner) are
less than one percent (1%), the Partnership shall have the right, but not the obligation, from time
to time and at any time to redeem any and all outstanding Limited Partner Interests (other than the
Special Limited Partner’s Limited Partner Interest) by treating any Limited Partner as a Tendering
Party who has delivered a Notice of Redemption pursuant to Section 8.6 hereof for the amount of
Partnership Common Units to be specified by the General Partner, in its sole and absolute
discretion, by notice to such Limited Partner that the Partnership has elected to exercise its
rights under this Section 8.7. Such notice given by the General Partner to a Limited Partner
pursuant to this Section 8.7 shall be treated as if it were a Notice of Redemption delivered to the
General Partner by such Limited Partner. For purposes of this Section 8.7, (a) any Limited Partner
(whether or not otherwise a Qualifying Party) may, in the General Partner’s sole and absolute
discretion, be treated as a Qualifying Party that is a Tendering Party and (b) the provisions of
Sections 8.6.C(1), 8.6.F(2), 8.6.F(3) and 8.6.F(5) hereof shall not apply, but the remainder of
Section 8.6 hereof shall apply, mutatis mutandis.




ARTICLE 9

BOOKS, RECORDS, ACCOUNTING AND REPORTS




          Section 9.1 Records and Accounting.




          A. The General Partner shall keep or cause to be kept at the principal office of the
Partnership those records and documents required to be maintained by the Act and other books and
records deemed by the General Partner to be appropriate with respect to the Partnership’s business,
including, without limitation, all books and records necessary to provide to the Limited Partners
any information, lists and copies of documents




42









 







required to be provided pursuant to Section 8.5.A or
Section 9.3 hereof. Any records maintained by or on behalf of the Partnership in the regular
course of its business may be kept on, or be in the form for, punch cards, magnetic tape,
photographs, micrographics or any other information storage device, provided that the records so
maintained are convertible into clearly legible written form within a reasonable period of time.




          B. The books of the Partnership shall be maintained, for financial and tax reporting purposes,
on an accrual basis in accordance with generally accepted accounting principles, or on such other
basis as the General Partner determines to be necessary or appropriate. To the extent permitted by
sound accounting practices and principles, the Partnership, the General Partner and the Previous
General Partner may operate with integrated or consolidated accounting records, operations and
principles.




          Section 9.2 Fiscal Year. The Fiscal Year of the Partnership shall be the calendar year.




          Section 9.3 Reports.




          A. As soon as practicable, but in no event later than one hundred five (105) days after the
close of each Fiscal Year, the General Partner shall cause to be made available to each Limited
Partner, of record as of the close of the Fiscal Year, an annual report containing financial
statements of the Partnership, or of the Previous General Partner if such statements are prepared
solely on a consolidated basis with the Previous General Partner, for such Fiscal Year, presented
in accordance with generally accepted accounting principles, such statements to be
audited by a nationally recognized firm of independent public accountants selected by the
General Partner. Such report shall be deemed to be made available to all Limited Partners if it
has been filed with the SEC.




          B. As soon as practicable, but in no event later than one hundred five (105) days after the
close of each calendar quarter (except the last calendar quarter of each year), the General Partner
shall cause to be made available to each Limited Partner, of record as of the last day of the
calendar quarter, a report containing unaudited financial statements of the Partnership, or of the
Previous General Partner if such statements are prepared solely on a consolidated basis with the
Previous General Partner, and such other information as may be required by applicable law or
regulation or as the General Partner determines to be appropriate. At the request of any Limited
Partner, the General Partner shall provide access to the books, records and workpapers upon which
the reports required by this Section 9.3 are based, to the extent required by the Act. Such report
shall be deemed to be made available to all Limited Partners if it has been filed with the SEC.




ARTICLE 10

TAX MATTERS




          Section 10.1 Preparation of Tax Returns. The General Partner shall arrange for the
preparation and timely filing of all returns with respect to Partnership income, gains, deductions,
losses and other items required of the Partnership for federal and state income tax purposes and
shall use all reasonable effort to furnish, within ninety (90) days of the close of each taxable
year, the tax information reasonably required by Limited Partners for federal and state income tax
reporting purposes. The Limited Partners shall promptly provide the General Partner with such
information relating to the Contributed Properties, including tax basis and other relevant
information, as may be reasonably requested by the General Partner from time to time.




          Section 10.2 Tax Elections.




          A. Except as otherwise provided herein, the General Partner shall, in its sole and absolute
discretion, determine whether to make any available election pursuant to the Code, including, but
not limited to, the election under Code Section 754 and the election to use the “recurring item”
method of accounting provided under Code Section 461(h) with respect to property taxes imposed on
the Partnership’s Properties; provided, however, that,




43









 







if the “recurring item”
method of accounting is elected with respect to such property taxes, the Partnership shall pay the
applicable property taxes prior to the date provided in Code Section 461(h) for purposes of
determining economic performance. The General Partner shall have the right to seek to revoke any
such election (including, without limitation, any election under Code Sections 461(h) and 754) upon
the General Partner’s determination in its sole and absolute discretion that such revocation is in
the best interests of the Partners.




          B. The General Partner is expressly authorized to make any elections, including applicable
safe harbor elections, in connection with the issuance of Partnership Interests for services that
it deems to be in the best interest of the Partnership. Furthermore, the General Partner is
authorized to amend this Agreement as it deems necessary to provide that (1) the Partnership is
authorized and directed to elect applicable safe harbor elections, and (2) the Partnership and each
of its Partners (including any person to whom a Partnership Interest is transferred in connection
with the performance of services) agrees to comply with all requirements of the safe harbor with
respect to all Partnership Interests transferred in connection with the performance of services
while the election remains effective. Finally, the amendments relating to the safe harbor
elections in connection with the issuance of Partnership Interests for services are legally binding
on all Partners of the Partnership, and to the extent that it is determined that such amendments
are not legally binding on all Partners, then each Partner in the Partnership that
transfers a Partnership Interest in connection with the performance of services agrees to
execute a document containing provisions that are legally binding on that Partner stating that (X)
the Partnership is authorized and directed to elect the safe harbor, and (Y) the Partner agrees to
comply with all requirements of the safe harbor with respect to all Partnership Interests
transferred in connection with the performance of services while the election remains effective.




          Section 10.3 Tax Matters Partner.




          A. The General Partner shall be the “tax matters partner” of the Partnership for federal
income tax purposes. The tax matters partner shall receive no compensation for its services. All
third-party costs and expenses incurred by the tax matters partner in performing its duties as such
(including legal and accounting fees and expenses) shall be borne by the Partnership in addition to
any reimbursement pursuant to Section 7.4 hereof. Nothing herein shall be construed to restrict
the Partnership from engaging an accounting firm to assist the tax matters partner in discharging
its duties hereunder, so long as the compensation paid by the Partnership for such services is
reasonable. At the request of any Limited Partner, the General Partner agrees to consult with such
Limited Partner with respect to the preparation and filing of any returns and with respect to any
subsequent audit or litigation relating to such returns; provided, however, that
the filing of such returns shall be in the sole and absolute discretion of the General Partner.




          B. The tax matters partner is authorized, but not required:





     (1) to enter into any settlement with the IRS with respect to any administrative or
judicial proceedings for the adjustment of Partnership items required to be taken into
account by a Partner for income tax purposes (such administrative proceedings being referred
to as a “tax audit” and such judicial proceedings being referred to as “judicial
review”), and in the settlement agreement the tax matters partner may expressly state
that such agreement shall bind all Partners, except that such settlement agreement shall not
bind any Partner (i) who (within the time prescribed pursuant to the Code and Regulations)
files a statement with the IRS providing that the tax matters partner shall not have the
authority to enter into a settlement agreement on behalf of such Partner or (ii) who is a
“notice partner” (as defined in Code Section 6231) or a member of a “notice group” (as
defined in Code Section 6223(b)(2));




     (2) in the event that a notice of a final administrative adjustment at the Partnership
level of any item required to be taken into account by a Partner for tax purposes (a
“final adjustment”) is mailed to the tax matters partner, to seek judicial review of
such final adjustment, including the filing of a petition for readjustment with the United
States Tax Court or the United States Claims Court, or the filing of a



44









 







complaint for refund
with the District Court of the United States for the district in which the Partnership’s
principal place of business is located;




     (3) to intervene in any action brought by any other Partner for judicial review of a
final adjustment;




     (4) to file a request for an administrative adjustment with the IRS at any time and, if
any part of such request is not allowed by the IRS, to file an appropriate pleading
(petition or complaint) for judicial review with respect to such request;




     (5) to enter into an agreement with the IRS to extend the period for assessing any tax
that is attributable to any item required to be taken into account by a Partner for tax
purposes, or an item affected by such item; and




     (6) to take any other action on behalf of the Partners in connection with any tax audit
or judicial review proceeding to the extent permitted by applicable law or regulations.


The taking of any action and the incurring of any expense by the tax matters partner in connection
with any such proceeding, except to the extent required by law, is a matter in the sole and
absolute discretion of the tax matters partner and the provisions relating to indemnification of
the General Partner set forth in Section 7.7 hereof shall be fully applicable to the tax matters
partner in its capacity as such.




          Section 10.4 Withholding. Each Limited Partner hereby authorizes the Partnership to
withhold from or pay on behalf of or with respect to such Limited Partner any amount of federal,
state, local or foreign taxes that the General Partner determines that the Partnership is required
to withhold or pay with respect to any amount distributable or allocable to such Limited Partner
pursuant to this Agreement, including, without limitation, any taxes required to be withheld or
paid by the Partnership pursuant to Code Section 1441, Code Section 1442, Code Section 1445 or Code
Section 1446. Any amount paid on behalf of or with respect to a Limited Partner shall constitute a
loan by the Partnership to such Limited Partner, which loan shall be repaid by such Limited Partner
within fifteen (15) days after notice from the General Partner that such payment must be made
unless (i) the Partnership withholds such payment from a distribution that would otherwise be made
to the Limited Partner or (ii) the General Partner determines, in its sole and absolute discretion,
that such payment may be satisfied out of the Available Funds of the Partnership that would, but
for such payment, be distributed to the Limited Partner. Each Limited Partner hereby
unconditionally and irrevocably grants to the Partnership a security interest in such Limited
Partner’s Partnership Interest to secure such Limited Partner’s obligation to pay to the
Partnership any amounts required to be paid pursuant to this Section 10.4. In the event that a
Limited Partner fails to pay any amounts owed to the Partnership pursuant to this Section 10.4 when
due, the General Partner may, in its sole and absolute discretion, elect to make the payment to the
Partnership on behalf of such defaulting Limited Partner, and in such event shall be deemed to have
loaned such amount to such defaulting Limited Partner and shall succeed to all rights and remedies
of the Partnership as against such defaulting Limited Partner (including, without limitation, the
right to receive distributions). Any amounts payable by a Limited Partner hereunder shall bear
interest at the base rate on corporate loans at large United States money center commercial banks,
as published from time to time in the Wall Street Journal, plus four (4) percentage points
(but not higher than the maximum lawful rate) from the date such amount is due (i.e.,
fifteen (15) days after demand) until such amount is paid in full. Each Limited Partner shall take
such actions as the Partnership or the General Partner shall request in order to perfect or enforce
the security interest created hereunder.




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ARTICLE 11

TRANSFERS AND WITHDRAWALS




          Section 11.1 Transfer.




          A. No part of the interest of a Partner shall be subject to the claims of any creditor, to any
spouse for alimony or support, or to legal process, and may not be voluntarily or involuntarily
alienated or encumbered except as may be specifically provided for in this Agreement.




          B. No Partnership Interest shall be Transferred, in whole or in part, except in accordance
with the terms and conditions set forth in this Article 11. Any Transfer or purported Transfer of
a Partnership Interest not made in accordance with this Article 11 shall be null and void ab
initio.




          C. Notwithstanding the other provisions of this Article 11 (other than Section 11.6.D hereof),
the Partnership Interests of the General Partner and the Special Limited Partner may be
Transferred, in whole or in part, at any time or from time to time, to or among the Previous
General Partner, the General Partner, the Special Limited Partner, and any other Person that is, at
the time of such Transfer, a “qualified REIT subsidiary” (within the meaning of Code
Section 856(i)(2)) with respect to the Previous General Partner. Any transferee of the entire
General Partner Interest pursuant to this Section 11.1.C shall automatically become, without
further action or Consent of any Limited Partners, the sole general partner of the Partnership,
subject to all the rights, privileges, duties and obligations under this Agreement and the Act
relating to a general partner. Any transferee of a Limited Partner Interest pursuant to this
Section 11.1.C shall automatically become, without further action or Consent of any Limited
Partners, a Substituted Limited Partner. Upon any Transfer permitted by this Section 11.1.C, the
transferor Partner shall be relieved of all its obligations under this Agreement. The provisions
of Section 11.2.B (other than the last sentence thereof), 11.3, 11.4.A and 11.5 hereof shall not
apply to any Transfer permitted by this Section 11.1.C.




          Section 11.2 Transfer of General Partner’s Partnership Interest.




          A. The General Partner may not Transfer any of its General Partner Interest or withdraw from
the Partnership except as provided in Sections 11.2.B and 11.2.C hereof.




          B. The General Partner shall not withdraw from the Partnership and shall not Transfer all or
any portion of its interest in the Partnership (whether by sale, disposition, statutory merger or
consolidation, liquidation or otherwise) without the Consent of the Limited Partners, which Consent
may be given or withheld in the sole and absolute discretion of the Limited Partners. Upon any
Transfer of such a Partnership Interest pursuant to the Consent of the Limited Partners and
otherwise in accordance with the provisions of this Section 11.2.B, the transferee shall become a
successor General Partner for all purposes herein, and shall be vested with the powers and rights
of the transferor General Partner, and shall be liable for all obligations and responsible for all
duties of the General Partner, once such transferee has executed such instruments as may be
necessary to effectuate such admission and to confirm the agreement of such transferee to be bound
by all the terms and provisions of this Agreement with respect to the Partnership Interest so
acquired. It is a condition to any Transfer otherwise permitted hereunder that the transferee
assumes, by operation of law or express agreement, all of the obligations of the transferor General
Partner under this Agreement with respect to such Transferred Partnership Interest, and such
Transfer shall relieve the transferor General Partner of its obligations under this Agreement
without the Consent of the Limited Partners. In the event that the General Partner withdraws from
the Partnership, in violation of this Agreement or otherwise, or otherwise dissolves or terminates,
or upon the bankruptcy of the General Partner, a Majority in Interest of the Limited Partners may
elect to continue the Partnership business by selecting a successor General Partner in accordance
with the Act.





46









 





          C. The General Partner may merge with another entity if immediately after such merger
substantially all of the assets of the surviving entity, other than the General Partner Interest
held by the General Partner, are contributed to the Partnership as a Capital Contribution in
exchange for Partnership Units.




          Section 11.3 Limited Partners’ Rights to Transfer.




          A. General. Prior to the end of the first Twelve-Month Period, no Limited Partner
shall Transfer all or any portion of its Partnership Interest to any transferee without the Consent
of the General Partner, which Consent may be withheld in its sole and absolute discretion;
provided, however, that any Limited Partner may, at any time, without the consent
of the General Partner, (i) Transfer all or part of its Partnership Interest to any
Designated Party, any Family Member, any Controlled Entity or any Affiliate, provided that the
transferee is, in any such case, a Qualified Transferee, or (ii) pledge (a “Pledge”) all or
any portion of its Partnership Interest to a lending institution, that is not an Affiliate of such
Limited Partner, as collateral or security for a bona fide loan or other extension of credit, and
Transfer such pledged Partnership Interest to such lending institution in connection with the
exercise of remedies under such loan or extension or credit (any Transfer or Pledge permitted by
this proviso is hereinafter referred to as a “Permitted Transfer”). After such first
Twelve-Month Period, each Limited Partner, and each transferee of Partnership Units or Assignee
pursuant to a Permitted Transfer, shall have the right to Transfer all or any portion of its
Partnership Interest to any Person, subject to the provisions of Section 11.6 hereof and to
satisfaction of each of the following conditions:





     (1) General Partner Right of First Refusal. The transferring Partner shall
give written notice of the proposed Transfer to the General Partner, which notice shall
state (i) the identity of the proposed transferee and (ii) the amount and type of
consideration proposed to be received for the Transferred Partnership Units. The General
Partner shall have ten (10) Business Days upon which to give the Transferring Partner notice
of its election to acquire the Partnership Units on the proposed terms. If it so elects, it
shall purchase the Partnership Units on such terms within ten (10) Business Days after
giving notice of such election; provided, however, that in the event that
the proposed terms involve a purchase for cash, the General Partner may at its election
deliver in lieu of all or any portion of such cash a note payable to the Transferring
Partner at a date as soon as reasonably practicable, but in no event later than one hundred
eighty (180) days after such purchase, and bearing interest at an annual rate equal to the
total dividends declared with respect to one (1) REIT Share for the four (4) preceding
fiscal quarters of the General Partner, divided by the Value as of the closing of such
purchase; provided, further, that such closing may be deferred to the extent
necessary to effect compliance with the Hart-Scott-Rodino Antitrust Improvements Act of
1976, if applicable, and any other applicable requirements of law. If it does not so elect,
the Transferring Partner may Transfer such Partnership Units to a third party, on terms no
more favorable to the transferee than the proposed terms, subject to the other conditions of
this Section 11.3.




     (2) Qualified Transferee. Any Transfer of a Partnership Interest shall be made
only to a single Qualified Transferee; provided, however, that, for such
purposes, all Qualified Transferees that are Affiliates, or that comprise investment
accounts or funds managed by a single Qualified Transferee and its Affiliates, shall be
considered together to be a single Qualified Transferee; provided, further,
that each Transfer meeting the minimum Transfer restriction of Section 11.3.A(3) hereof may
be to a separate Qualified Transferee.




     (3) Minimum Transfer Restriction. Any Transferring Partner must Transfer not
less than the lesser of (i) the greater of five hundred (500) Partnership Units or one-third
(1/3) of the number of Partnership Units owned by such Partner as of the Effective Date or
(ii) all of the remaining Partnership Units owned by such Transferring Partner;
provided, however, that, for purposes of determining compliance with the
foregoing restriction, all Partnership Units owned by Affiliates of a Limited Partner shall
be considered to be owned by such Limited Partner.



47









 






     (4) Transferee Agreement to Effect a Redemption. Any proposed transferee shall
deliver to the General Partner a written agreement reasonably satisfactory to the General
Partner to the effect that the transferee will, within six (6) months after consummation of
a Partnership Common Units Transfer, tender its Partnership Common Units for Redemption in
accordance with the terms of the Redemption rights provided in Section 8.6 hereof.




     (5) No Further Transfers. The transferee (other than a Designated Party) shall
not be permitted to effect any further Transfer of the Partnership Units, other than to the
General Partner.




     (6) Exception for Permitted Transfers. The conditions of Sections 11.3.A(1)
through 11.3.A(5) hereof shall not apply in the case of a Permitted Transfer.


It is a condition to any Transfer otherwise permitted hereunder (whether or not such Transfer is
effected during or after the first Twelve-Month Period) that the transferee assumes by operation of
law or express agreement all of the obligations of the transferor Limited Partner under this
Agreement with respect to such Transferred Partnership Interest, and no such Transfer (other than
pursuant to a statutory merger or consolidation wherein all obligations and liabilities of the
transferor Partner are assumed by a successor corporation by operation of law) shall relieve the
transferor Partner of its obligations under this Agreement without the approval of the General
Partner, in its sole and absolute discretion. Notwithstanding the foregoing, any transferee of any
Transferred Partnership Interest shall be subject to any and all ownership limitations (including,
without limitation, the Ownership Limit) contained in the Charter that may limit or restrict such
transferee’s ability to exercise its Redemption rights, including, without limitation, the
Ownership Limit. Any transferee, whether or not admitted as a Substituted Limited Partner, shall
take subject to the obligations of the transferor hereunder. Unless admitted as a Substituted
Limited Partner, no transferee, whether by a voluntary Transfer, by operation of law or otherwise,
shall have any rights hereunder, other than the rights of an Assignee as provided in Section 11.5
hereof.




          B. Incapacity. If a Limited Partner is subject to Incapacity, the executor,
administrator, trustee, committee, guardian, conservator or receiver of such Limited Partner’s
estate shall have all the rights of a Limited Partner, but not more rights than those enjoyed by
other Limited Partners, for the purpose of settling or managing the estate, and such power as the
Incapacitated Limited Partner possessed to Transfer all or any part of its interest in the
Partnership. The Incapacity of a Limited Partner, in and of itself, shall not dissolve or
terminate the Partnership.




          C. Opinion of Counsel. In connection with any Transfer of a Limited Partner Interest,
the General Partner shall have the right to receive an opinion of counsel reasonably satisfactory
to it to the effect that the proposed Transfer may be effected without registration under the
Securities Act and will not otherwise violate any federal or state securities laws or regulations
applicable to the Partnership or the Partnership Interests Transferred. If, in the opinion of such
counsel, such Transfer would require the filing of a registration statement under the Securities
Act or would otherwise violate any federal or state securities laws or regulations applicable to
the Partnership or the Partnership Units, the General Partner may prohibit any Transfer otherwise
permitted under this Section 11.3 by a Limited Partner of Partnership Interests.




          D. Adverse Tax Consequences. No Transfer by a Limited Partner of its Partnership
Interests (including any Redemption, any other acquisition of Partnership Units by the General
Partner or any acquisition of Partnership Units by the Partnership) may be made to any person if
(i) in the opinion of legal counsel for the Partnership, it would result in the Partnership being
treated as an association taxable as a corporation, or (ii) such Transfer is effectuated through an
“established securities market” or a “secondary market (or the substantial equivalent thereof)”
within the meaning of Code Section 7704.





48









 








          Section 11.4 Substituted Limited Partners.




          A. No Limited Partner shall have the right to substitute a transferee (including any
Designated Party or other transferees pursuant to Transfers permitted by Section 11.3 hereof) as a
Limited Partner in its place. A transferee (including, but not limited to, any Designated Party)
of the interest of a Limited Partner may be admitted as a Substituted Limited Partner only with the
Consent of the General Partner, which Consent may be given or withheld by the General Partner in
its sole and absolute discretion. The failure or refusal by the General Partner to permit a
transferee of any such interests to become a Substituted Limited Partner shall not give rise to any
cause of action against the Partnership or the General Partner. Subject to the foregoing, an
Assignee shall not be
admitted as a Substituted Limited Partner until and unless it furnishes to the General Partner
(i) evidence of acceptance, in form and substance satisfactory to the General Partner, of all the
terms, conditions and applicable obligations of this Agreement, (ii) a counterpart signature page
to this Agreement executed by such Assignee and (iii) such other documents and instruments as may
be required or advisable, in the sole and absolute discretion of the General Partner, to effect
such Assignee’s admission as a Substituted Limited Partner.




          B. A transferee who has been admitted as a Substituted Limited Partner in accordance with this
Article 11 shall have all the rights and powers and be subject to all the restrictions and
liabilities of a Limited Partner under this Agreement.




          C. Upon the admission of a Substituted Limited Partner, the General Partner shall amend
Exhibit A to reflect the name, address and number of Partnership Units of such Substituted
Limited Partner and to eliminate or adjust, if necessary, the name, address and number of
Partnership Units of the predecessor of such Substituted Limited Partner.




          Section 11.5 Assignees. If the General Partner, in its sole and absolute discretion, does
not consent to the admission of any permitted transferee under Section 11.3 hereof as a Substituted
Limited Partner, as described in Section 11.4 hereof, such transferee shall be considered an
Assignee for purposes of this Agreement. An Assignee shall be entitled to all the rights of an
assignee of a limited partnership interest under the Act, including the right to receive
distributions from the Partnership and the share of Net Income, Net Losses and other items of
income, gain, loss, deduction and credit of the Partnership attributable to the Partnership Units
assigned to such transferee and the rights to Transfer the Partnership Units provided in this
Article 11, but shall not be deemed to be a holder of Partnership Units for any other purpose under
this Agreement (other than as expressly provided in Section 8.6 hereof with respect to a Qualifying
Party that becomes a Tendering Party), and shall not be entitled to effect a Consent or vote with
respect to such Partnership Units on any matter presented to the Limited Partners for approval
(such right to Consent or vote, to the extent provided in this Agreement or under the Act, fully
remaining with the transferor Limited Partner). In the event that any such transferee desires to
make a further assignment of any such Partnership Units, such transferee shall be subject to all
the provisions of this Article 11 to the same extent and in the same manner as any Limited Partner
desiring to make an assignment of Partnership Units.




          Section 11.6 General Provisions.




          A. No Limited Partner may withdraw from the Partnership other than as a result of a permitted
Transfer of all of such Limited Partner’s Partnership Units in accordance with this Article 11,
with respect to which the transferee becomes a Substituted Limited Partner, or pursuant to a
redemption (or acquisition by the Previous General Partner) of all of its Partnership Units
pursuant to a Redemption under Section 8.6 hereof and/or pursuant to any Partnership Unit
Designation.




          B. Any Limited Partner who shall Transfer all of its Partnership Units in a Transfer (i)
permitted pursuant to this Article 11 where such transferee was admitted as a Substituted Limited
Partner, (ii) pursuant to the exercise of its rights to effect a redemption of all of its
Partnership Units pursuant to a Redemption under Section 8.6 hereof and/or pursuant to any
Partnership Unit Designation or (iii) to the Previous





49









 







General Partner or the General Partner,
whether or not pursuant to Section 8.6.B hereof, shall cease to be a Limited Partner.




          C. If any Partnership Unit is Transferred in compliance with the provisions of this Article
11, or is redeemed by the Partnership, or acquired by the Previous General Partner pursuant to
Section 8.6 hereof, on any day other than the first day of a Fiscal Year, then Net Income, Net
Losses, each item thereof and all other items
of income, gain, loss, deduction and credit attributable to such Partnership Unit for such
Fiscal Year shall be allocated to the transferor Partner or the Tendering Party, as the case may
be, and, in the case of a Transfer or assignment other than a Redemption, to the transferee Partner
(including, without limitation, the General Partner and the Special Limited Partner as transferees
of the Previous General Partner in the case of an acquisition of Partnership Common Units pursuant
to Section 8.6 hereof), by taking into account their varying interests during the Fiscal Year in
accordance with Code Section 706(d), using the “interim closing of the books” method or another
permissible method selected by the General Partner. Solely for purposes of making such
allocations, each of such items for the calendar month in which a Transfer occurs shall be
allocated to the transferee Partner and none of such items for the calendar month in which a
Transfer or a Redemption occurs shall be allocated to the transferor Partner or the Tendering
Party, as the case may be, if such Transfer occurs on or before the fifteenth (15th) day of the
month, otherwise such items shall be allocated to the transferor. All distributions of Available
Cash attributable to such Partnership Unit with respect to which the Partnership Record Date is
before the date of such Transfer, assignment or Redemption shall be made to the transferor Partner
or the Tendering Party, as the case may be, and, in the case of a Transfer other than a Redemption,
all distributions of Available Cash thereafter attributable to such Partnership Unit shall be made
to the transferee Partner.




          D. In addition to any other restrictions on Transfer herein contained, in no event may any
Transfer or assignment of a Partnership Interest by any Partner (including any Redemption, any
acquisition of Partnership Units by the Previous General Partner or any other acquisition of
Partnership Units by the Partnership) be made (i) to any person or entity who lacks the legal
right, power or capacity to own a Partnership Interest; (ii) in violation of applicable law; (iii)
of any component portion of a Partnership Interest, such as the Capital Account, or rights to
distributions, separate and apart from all other components of a Partnership Interest; (iv) in the
event that such Transfer would cause either (a) the Previous General Partner to cease to comply
with the REIT Requirements or (b) the General Partner or the Special Limited Partner to cease to
qualify as a “qualified REIT subsidiary” (within the meaning of Code Section 856(i)(2); (v) if such
Transfer would, in the opinion of counsel to the Partnership or the General Partner, cause a
termination of the Partnership for federal or state income tax purposes (except as a result of the
Redemption (or acquisition by the Previous General Partner) of all Partnership Common Units held by
all Limited Partners other than the Special Limited Partner); (vi) if such Transfer would, in the
opinion of legal counsel to the Partnership, cause the Partnership to cease to be classified as a
partnership for federal income tax purposes (except as a result of the Redemption (or acquisition
by the Previous General Partner) of all Partnership Common Units held by all Limited Partners other
than the Special Limited Partner); (vii) if such Transfer would cause the Partnership to become,
with respect to any employee benefit plan subject to Title I of ERISA, a “party-in-interest” (as
defined in ERISA Section 3(14)) or a “disqualified person” (as defined in Code Section 4975(c));
(viii) if such Transfer would, in the opinion of legal counsel to the Partnership, cause any
portion of the assets of the Partnership to constitute assets of any employee benefit plan pursuant
to Department of Labor Regulations Section 2510.2-101; (ix) if such Transfer requires the
registration of such Partnership Interest pursuant to any applicable federal or state securities
laws; (x) if such Transfer causes the Partnership to become a “publicly traded partnership,” as
such term is defined in Code Section 469(k)(2) or Code 7704(b); or (xi) if such Transfer subjects
the Partnership to regulation under the Investment Company Act of 1940, the Investment Advisors Act
of 1940 or ERISA, each as amended.





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ARTICLE 12

ADMISSION OF PARTNERS




          Section 12.1 Admission of Successor General Partner. A successor to all of the General
Partner’s General Partner Interest pursuant to Section 11.2 hereof who is proposed to be admitted
as a successor General Partner shall be admitted to the Partnership as the General Partner,
effective immediately prior to such Transfer. Any such successor shall carry on the business of
the Partnership without dissolution. In each case, the admission shall be subject to the successor
eneral Partner executing and
delivering to the Partnership an acceptance of all of the terms and conditions of this Agreement
and such other documents or instruments as may be required to effect the admission.




          Section 12.2 Admission of Additional Limited Partners.




          A. After the admission to the Partnership of an Original Limited Partner on the date hereof, a
Person (other than an existing Partner) who makes a Capital Contribution to the Partnership in
accordance with this Agreement shall be admitted to the Partnership as an Additional Limited
Partner only upon furnishing to the General Partner (i) evidence of acceptance, in form and
substance satisfactory to the General Partner, of all of the terms and conditions of this
Agreement, including, without limitation, the power of attorney granted in Section 2.4 hereof, (ii)
a counterpart signature page to this Agreement executed by such Person and (iii) such other
documents or instruments as may be required in the sole and absolute discretion of the General
Partner in order to effect such Person’s admission as an Additional Limited Partner.




          B. Notwithstanding anything to the contrary in this Section 12.2, no Person shall be admitted
as an Additional Limited Partner without the consent of the General Partner, which consent may be
given or withheld in the General Partner’s sole and absolute discretion. The admission of any
Person as an Additional Limited Partner shall become effective on the date upon which the name of
such Person is recorded on the books and records of the Partnership, following the consent of the
General Partner to such admission.




          C. If any Additional Limited Partner is admitted to the Partnership on any day other than the
first day of a Fiscal Year, then Net Income, Net Losses, each item thereof and all other items of
income, gain, loss, deduction and credit allocable among Partners and Assignees for such Fiscal
Year shall be allocated among such Additional Limited Partner and all other Partners and Assignees
by taking into account their varying interests during the Fiscal Year in accordance with Code
Section 706(d), using the “interim closing of the books” method or another permissible method
selected by the General Partner. Solely for purposes of making such allocations, each of such
items for the calendar month in which an admission of any Additional Limited Partner occurs shall
be allocated among all the Partners and Assignees including such Additional Limited Partner, in
accordance with the principles described in Section 11.6.C hereof. All distributions of Available
Cash with respect to which the Partnership Record Date is before the date of such admission shall
be made solely to Partners and Assignees other than the Additional Limited Partner, and all
distributions of Available Cash thereafter shall be made to all the Partners and Assignees
including such Additional Limited Partner.




          Section 12.3 Amendment of Agreement and Certificate of Limited Partnership. For the
admission to the Partnership of any Partner, the General Partner shall take all steps necessary and
appropriate under the Act to amend the records of the Partnership and, if necessary, to prepare as
soon as practical an amendment of this Agreement (including an amendment of Exhibit A) and, if
required by law, shall prepare and file an amendment to the Certificate and may for this purpose
exercise the power of attorney granted pursuant to Section 2.4 hereof.




          Section 12.4 Admission of Initial Limited Partners. The Persons listed on Exhibit
A as limited partners of the Partnership shall be admitted to the Partnership as Limited
Partners upon their execution and delivery of this Agreement.




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ARTICLE 13

DISSOLUTION, LIQUIDATION AND TERMINATION




          Section 13.1 Dissolution. The Partnership shall not be dissolved by the admission of
Substituted Limited Partners or Additional Limited Partners or by the admission of a successor
General Partner in accordance with the terms of this Agreement. Upon the withdrawal of the General
Partner, any successor General Partner shall continue the business of the Partnership without
dissolution. However, the Partnership shall dissolve, and its affairs shall be wound up, upon the
first to occur of any of the following (each a “Liquidating Event”):




          A. the expiration of its term as provided in Section 2.5 hereof;




          B. an event of withdrawal, as defined in the Act (including, without limitation, bankruptcy),
of the sole General Partner unless, within ninety (90) days after the withdrawal, a “majority in
interest” (as such phrase is used in Section 17-801(3) of the Act) of the remaining Partners agree
in writing, in their sole and absolute discretion, to continue the business of the Partnership and
to the appointment, effective as of the date of withdrawal, of a successor General Partner:




          C. an election to dissolve the Partnership made by the General Partner in its sole and
absolute discretion, with or without the Consent of the Limited Partners;




          D. entry of a decree of judicial dissolution of the Partnership pursuant to the provisions of
the Act;




          E. the occurrence of a Terminating Capital Transaction;




          F. the Redemption (or acquisition by the Previous General Partner, the General Partner and/or
the Special Limited Partner) of all Partnership Common Units other than Partnership Common Units
held by the General Partner or the Special Limited Partner; or




          G. the Redemption (or acquisition by the General Partner) of all Partnership Common Units
other than Partnership Common Units held by the General Partner.




          Section 13.2 Winding Up.




          A. Upon the occurrence of a Liquidating Event, the Partnership shall continue solely for the
purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the
claims of its creditors and Partners. After the occurrence of a Liquidating Event, no Partner
shall take any action that is inconsistent with, or not necessary to or appropriate for, the
winding up of the Partnership’s business and affairs. The General Partner (or, in the event that
there is no remaining General Partner or the General Partner has dissolved, become bankrupt within
the meaning of the Act or ceased to operate, any Person elected by a Majority in Interest of the
Limited Partners (the General Partner or such other Person being
referred to herein as the “Liquidator”)) shall be responsible for overseeing the winding up and dissolution of the
Partnership and shall take full account of the Partnership’s liabilities and property, and the
Partnership property shall be liquidated as promptly as is consistent with obtaining the fair value
thereof, and the proceeds therefrom (which may, to the extent determined by the General Partner,
include shares of stock in the Previous General Partner) shall be applied and distributed in the
following order:





     (1) First, to the satisfaction of all of the Partnership’s debts and liabilities to
creditors other than the Partners and their Assignees (whether by payment or the making of
reasonable provision for payment thereof);



52









 






     (2) Second, to the satisfaction of all of the Partnership’s debts and liabilities to
the General Partner (whether by payment or the making of reasonable provision for payment
thereof), including, but not limited to, amounts due as reimbursements under Section 7.4
hereof;




     (3) Third, to the satisfaction of all of the Partnership’s debts and liabilities to the
other Partners and any Assignees (whether by payment or the making of reasonable provision
for payment thereof); and




     (4) Subject to the terms of any Partnership Unit Designation, the balance, if any, to
the General Partner, the Limited Partners and any Assignees in accordance with and in
proportion to their positive Capital Account balances, after giving effect to all
contributions, distributions and allocations for all periods.


The General Partner shall not receive any additional compensation for any services performed
pursuant to this Article 13.




          B. Notwithstanding the provisions of Section 13.2.A hereof that require liquidation of the
assets of the Partnership, but subject to the order of priorities set forth therein, if prior to or
upon dissolution of the Partnership the Liquidator determines that an immediate sale of part or all
of the Partnership’s assets would be impractical or would cause undue loss to the Partners, the
Liquidator may, in its sole and absolute discretion, defer for a reasonable time the liquidation of
any assets except those necessary to satisfy liabilities of the Partnership (including to those
Partners as creditors) and/or distribute to the Partners, in lieu of cash, as tenants in common and
in accordance with the provisions of Section 13.2.A hereof, undivided interests in such Partnership
assets as the Liquidator deems not suitable for liquidation. Any such distributions in kind shall
be made only if, in the good faith judgment of the Liquidator, such distributions in kind are in
the best interest of the Partners, and shall be subject to such conditions relating to the
disposition and management of such properties as the Liquidator deems reasonable and equitable and
to any agreements governing the operation of such properties at such time. The Liquidator shall
determine the fair market value of any property distributed in kind using such reasonable method of
valuation as it may adopt.




          C. In the event that the Partnership is “liquidated” within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g), distributions shall be made pursuant to this Article 13 to the Partners and
Assignees that have positive Capital Accounts in compliance with Regulations Section
1.704-1(b)(2)(ii)(b)(2) to the extent of, and in proportion to, positive Capital Account balances.
If any Partner has a deficit balance in its Capital Account (after giving effect to all
contributions, distributions and allocations for all taxable years, including the year during which
such liquidation occurs), such Partner shall have no obligation to make any contribution to the
capital of the Partnership with respect to such deficit, and such deficit shall not be considered a
debt owed to the Partnership or to any other Person for any purpose whatsoever. In the sole and
absolute discretion of the General Partner or the Liquidator, a pro rata portion of the
distributions that would otherwise be made to the Partners pursuant to this Article 13 may be
withheld or escrowed to provide a reasonable reserve for Partnership liabilities (contingent or
otherwise) and to reflect the unrealized portion of any installment obligations owed to the
Partnership, provided that such withheld or escrowed amounts shall be distributed to the General
Partner and Limited Partners in the manner and order of priority set forth in Section 13.2.A hereof
as soon as practicable.




          Section 13.3 Deemed Distribution and Recontribution. Notwithstanding any other provision of this Article 13, in the event that the Partnership is
liquidated within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g), but no Liquidating Event
has occurred, the Partnership’s Property shall not be liquidated, the Partnership’s liabilities
shall not be paid or discharged and the Partnership’s affairs shall not be wound up. Instead, for
federal income tax purposes the Partnership shall be deemed to have distributed the Property in
kind to the Partners and the Assignees, who shall be deemed to have assumed and taken such Property
subject to all Partnership liabilities, all in accordance with their respective Capital Accounts.
Immediately thereafter, the Partners and the






53









 







Assignees shall be deemed to have recontributed the
Partnership Property in kind to the Partnership, which shall be deemed to have assumed and taken
such Property subject to all such liabilities; provided, however, that nothing in
this Section 13.3 shall be deemed to have constituted any Assignee as a Substituted Limited Partner
without compliance with the provisions of Section 11.4 hereof.




          Section 13.4 Rights of Limited Partners. Except as otherwise provided in this Agreement,
(a) each Limited Partner shall look solely to the assets of the Partnership for the return of its
Capital Contribution, (b) no Limited Partner shall have the right or power to demand or receive
property other than cash from the Partnership and (c) no Limited Partner shall have priority over
any other Limited Partner as to the return of its Capital Contributions, distributions or
allocations.




          Section 13.5 Notice of Dissolution. In the event that a Liquidating Event occurs or an
event occurs that would, but for an election or objection by one or more Partners pursuant to
Section 13.1 hereof, result in a dissolution of the Partnership, the General Partner shall, within
thirty (30) days thereafter, provide written notice thereof to each of the Partners and, in the
General Partner’s sole and absolute discretion or as required by the Act, to all other parties with
whom the Partnership regularly conducts business (as determined in the sole and absolute discretion
of the General Partner), and the General Partner may, or, if required by the Act, shall, publish
notice thereof in a newspaper of general circulation in each place in which the Partnership
regularly conducts business (as determined in the sole and absolute discretion of the General
Partner).




          Section 13.6 Cancellation of Certificate of Limited Partnership. Upon the completion of
the liquidation of the Partnership cash and property as provided in Section 13.2 hereof, the
Partnership shall be terminated, a certificate of cancellation shall be filed with the State of
Delaware, all qualifications of the Partnership as a foreign limited partnership or association in
jurisdictions other than the State of Delaware shall be cancelled, and such other actions as may be
necessary to terminate the Partnership shall be taken.




          Section 13.7 Reasonable Time for Winding-Up. A reasonable time shall be allowed for the
orderly winding-up of the business and affairs of the Partnership and the liquidation of its assets
pursuant to Section 13.2 hereof, in order to minimize any losses otherwise attendant upon such
winding-up, and the provisions of this Agreement shall remain in effect between the Partners during
the period of liquidation.




ARTICLE 14

PROCEDURES FOR ACTIONS AND CONSENTS

OF PARTNERS; AMENDMENTS; MEETINGS




          Section 14.1 Procedures for Actions and Consents of Partners. The actions requiring consent or approval of Limited Partners pursuant to this Agreement,
including Section 7.3 hereof, or otherwise pursuant to applicable law, are subject to the
procedures set forth in this Article 14.




          Section 14.2 Amendments. Amendments to this Agreement may be proposed by the General
Partner or by a Majority in Interest of the Limited Partners. Following such proposal, the General
Partner shall submit any proposed amendment to the Limited Partners. The General Partner shall
seek the written consent of the Limited Partners on the proposed amendment or shall call a meeting
to vote thereon and to transact any other business that the General Partner may deem appropriate.
For purposes of obtaining a written consent, the General Partner may require a response within a
reasonable specified time, but not less than fifteen (15) days, and failure to respond in such time
period shall constitute a consent that is consistent with the General Partner’s recommendation with
respect to the proposal; provided, however, that an action shall become effective
at such time as requisite consents are received even if prior to such specified time.





54









 








          Section 14.3 Meetings of the Partners.




          A. Meetings of the Partners may be called by the General Partner and shall be called upon the
receipt by the General Partner of a written request by a Majority in Interest of the Limited
Partners. The call shall state the nature of the business to be transacted. Notice of any such
meeting shall be given to all Partners not less than seven (7) days nor more than thirty (30) days
prior to the date of such meeting. Partners may vote in person or by proxy at such meeting.
Whenever the vote or Consent of Partners is permitted or required under this Agreement, such vote
or Consent may be given at a meeting of Partners or may be given in accordance with the procedure
prescribed in Section 14.3.B hereof.




          B. Any action required or permitted to be taken at a meeting of the Partners may be taken
without a meeting if a written consent setting forth the action so taken is signed by a majority of
the Percentage Interests of the Partners (or such other percentage as is expressly required by this
Agreement for the action in question). Such consent may be in one instrument or in several
instruments, and shall have the same force and effect as a vote of a majority of the Percentage
Interests of the Partners (or such other percentage as is expressly required by this Agreement).
Such consent shall be filed with the General Partner. An action so taken shall be deemed to have
been taken at a meeting held on the effective date so certified.




          C. Each Limited Partner may authorize any Person or Persons to act for it by proxy on all
matters in which a Limited Partner is entitled to participate, including waiving notice of any
meeting, or voting or participating at a meeting. Every proxy must be signed by the Limited
Partner or its attorney-in-fact. No proxy shall be valid after the expiration of eleven (11)
months from the date thereof unless otherwise provided in the proxy (or there is receipt of a proxy
authorizing a later date). Every proxy shall be revocable at the pleasure of the Limited Partner
executing it, such revocation to be effective upon the Partnership’s receipt of written notice of
such revocation from the Limited Partner executing such proxy.




          D. Each meeting of Partners shall be conducted by the General Partner or such other Person as
the General Partner may appoint pursuant to such rules for the conduct of the meeting as the
General Partner or such other Person deems appropriate in its sole and absolute discretion.
Without limitation, meetings of Partners may be conducted in the same manner as meetings of the
General Partner’s shareholders and may be held at the same time as, and as part of, the meetings of
the General Partner’s shareholders.




ARTICLE 15

GENERAL PROVISIONS




          Section 15.1 Addresses and Notice. Any notice, demand, request or report required or
permitted to be given or made to a Partner or Assignee under this Agreement shall be in writing and
shall be deemed given or made when delivered in person or when sent by first class United States
mail or by other means of written communication (including by telecopy, facsimile, or commercial
courier service) to the Partner or Assignee at the address set forth in Exhibit A or such
other address of which the Partner shall notify the General Partner in writing.




          Section 15.2 Titles and Captions. All article or section titles or captions in this
Agreement are for convenience only. They shall not be deemed part of this Agreement and in no way
define, limit, extend or describe the scope or intent of any provisions hereof. Except as
specifically provided otherwise, references to “Articles” or “Sections” are to Articles and
Sections of this Agreement.




          Section 15.3 Pronouns and Plurals. Whenever the context may require, any pronouns used in
this Agreement shall include the corresponding masculine, feminine or neuter forms, and the
singular form of nouns, pronouns and verbs shall include the plural and vice versa.







55









 








          Section 15.4 Further Action. The parties shall execute and deliver all documents, provide
all information and take or refrain from taking action as may be necessary or appropriate to
achieve the purposes of this Agreement.




          Section 15.5 Binding Effect. This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their heirs, executors, administrators, successors, legal representatives
and permitted assigns.




          Section 15.6 Waiver.




          A. No failure by any party to insist upon the strict performance of any covenant, duty,
agreement or condition of this Agreement or to exercise any right or remedy consequent upon a
breach thereof shall constitute waiver of any such breach or any other covenant, duty, agreement or
condition.




          B. The restrictions, conditions and other limitations on the rights and benefits of the
Limited Partners contained in this Agreement, and the duties, covenants and other requirements of
performance or notice by the Limited Partners, are for the benefit of the Partnership and, except
for an obligation to pay money to the Partnership, may be waived or relinquished by the General
Partner, in its sole and absolute discretion, on behalf of the Partnership in one or more instances
from time to time and at any time; provided, however, that any such waiver or
relinquishment may not be made if it would have the effect of (i) creating liability for any other
Limited Partner, (ii) causing the Partnership to cease to qualify as a limited partnership, (iii)
reducing the amount of cash otherwise distributable to the Limited Partners, (iv) resulting in the
classification of the Partnership as an association or publicly traded partnership taxable as a
corporation or (v) violating the Securities Act, the Exchange Act or any state
“blue sky” or other securities laws; provided, further, that any waiver
relating to compliance with the Ownership Limit or other restrictions in the Charter shall be made
and shall be effective only as provided in the Charter.




          Section 15.7 Counterparts. This Agreement may be executed in counterparts, all of which
together shall constitute one agreement binding on all the parties hereto, notwithstanding that all
such parties are not signatories to the original or the same counterpart. Each party shall become
bound by this Agreement immediately upon affixing its signature hereto.




          Section 15.8 Applicable Law. This Agreement shall be construed and enforced in accordance
with and governed by the laws of the State of Delaware, without regard to the principles of
conflicts of law. In the event of a conflict between any provision of this Agreement and any
non-mandatory provision of the Act, the provisions of this Agreement shall control and take
precedence.




          Section 15.9 Entire Agreement. This Agreement contains all of the understandings and
agreements between and among the Partners with respect to the subject matter of this Agreement and
the rights, interests and obligations of the Partners with respect to the Partnership.




          Section 15.10 Invalidity of Provisions. If any provision of this Agreement is or becomes
invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not be affected thereby.




          Section 15.11 Limitation to Preserve REIT Status. Notwithstanding anything else in this
Agreement, to the extent that the amount paid, credited, distributed or reimbursed by the
Partnership to any REIT Partner or its officers, directors, employees or agents, whether as a
reimbursement, fee, expense or indemnity (a “REIT Payment”), would constitute gross income
to the REIT Partner for purposes of Code Section 856(c)(2) or Code Section 856(c)(3), then,
notwithstanding any other provision of this Agreement, the amount of such REIT Payments, as
selected by the General Partner in its discretion from among items of potential distribution,







56









 







reimbursement, fees, expenses and indemnities, shall be reduced for any Fiscal Year so that the
REIT Payments, as so reduced, for or with respect to such REIT Partner shall not exceed the lesser
of:





     (1) an amount equal to the excess, if any, of (a) four and
nine-tenths percent (4.9%) of the REIT Partner’s total gross income
(but excluding the amount of any REIT Payments) for the Fiscal Year
that is described in subsections (A) through (H) of Code Section
856(c)(2) over (b) the amount of gross income (within the meaning of
Code Section 856(c)(2)) derived by the REIT Partner from sources
other than those described in subsections (A) through (H) of Code
Section 856(c)(2) (but not including the amount of any REIT
Payments); or




     (2) an amount equal to the excess, if any, of (a) twenty-four
percent (24%) of the REIT Partner’s total gross income (but
excluding the amount of any REIT Payments) for the Fiscal Year that
is described in subsections (A) through (I) of Code Section
856(c)(3) over (b) the amount of gross income (within the meaning of
Code Section 856(c)(3)) derived by the
REIT Partner from sources other than those described in
subsections (A) through (I) of Code Section 856(c)(3) (but not
including the amount of any REIT Payments);


provided, however, that REIT Payments in excess of the amounts set forth in clauses
(i) and (ii) above may be made if the General Partner, as a condition precedent, obtains an opinion
of tax counsel that the receipt of such excess amounts shall not adversely affect the REIT
Partner’s ability to qualify as a REIT. To the extent that REIT Payments may not be made in a
Fiscal Year as a consequence of the limitations set forth in this Section 15.11, such REIT Payments
shall carry over and shall be treated as arising in the following Fiscal Year. The purpose of the
limitations contained in this Section 15.11 is to prevent any REIT Partner from failing to qualify
as a REIT under the Code by reason of such REIT Partner’s share of items, including distributions,
reimbursements, fees, expenses or indemnities, receivable directly or indirectly from the
Partnership, and this Section 15.11 shall be interpreted and applied to effectuate such purpose.




          Section 15.12 No Partition. No Partner nor any successor-in-interest to a Partner shall
have the right while this Agreement remains in effect to have any property of the Partnership
partitioned, or to file a complaint or institute any proceeding at law or in equity to have such
property of the Partnership partitioned, and each Partner, on behalf of itself and its successors
and assigns hereby waives any such right. It is the intention of the Partners that the rights of
the parties hereto and their successors-in-interest to Partnership property, as among themselves,
shall be governed by the terms of this Agreement, and that the rights of the Partners and their
successors-in-interest shall be subject to the limitations and restrictions as set forth in this
Agreement.




          Section 15.13 No Third-Party Rights Created Hereby. The provisions of this Agreement are
solely for the purpose of defining the interests of the Partners, inter se; and no other person,
firm or entity (i.e., a party who is not a signatory hereto or a permitted successor to such
signatory hereto) shall have any right, power, title or interest by way of subrogation or
otherwise, in and to the rights, powers, title and provisions of this Agreement. No creditor or
other third party having dealings with the Partnership shall have the right to enforce the right or
obligation of any Partner to make Capital Contributions or loans to the Partnership or to pursue
any other right or remedy hereunder or at law or in equity. None of the rights or obligations of
the Partners herein set forth to make Capital Contributions or loans to the Partnership shall be
deemed an asset of the Partnership for any purpose by any creditor or other third party, nor may
any such rights or obligations be sold, transferred or assigned by the Partnership or pledged or
encumbered by the Partnership to secure any debt or other obligation of the Partnership or any of
the Partners.




57









 








[the next page is the signature page]




58









 








          IN WITNESS WHEREOF, this Agreement has been executed as of the date first written above.




	 	 	 	 	 	 	 
	 	 	PREVIOUS GENERAL PARTNER:	 	 
	 
	 	 	 	 	 	 
	 	 	APARTMENT INVESTMENT AND MANAGEMENT COMPANY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Terry Considine	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Terry Considine	 	 
	 	 	Title: Chief Executive Officer and President	 	 
	 
	 	 	 	 	 	 
	 	 	GENERAL PARTNER:	 	 
	 
	 	 	 	 	 	 
	 	 	AIMCO-GP, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Terry Considine	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Terry Considine	 	 
	 	 	Title: Chief Executive Officer and President	 	 
	 
	 	 	 	 	 	 
	 	 	SPECIAL LIMITED PARTNER:	 	 
	 
	 	 	AIMCO-LP, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Terry Considine	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Terry Considine	 	 
	 	 	Title: Chief Executive Officer and President	 	 
	 
	 	 	 	 	 	 
	 	 	LIMITED PARTNERS:	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	AIMCO-GP, INC.,	 	 
	 	 	as attorney-in-fact	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Terry Considine	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Terry Considine	 	 
	 	 	Title: Chief Executive Officer and President	 	 






59









 






EXHIBIT A

PARTNERS AND PARTNERSHIP UNITS




          Exhibit A, the list of Partners and Partnership Units, is maintained by the General Partner
and omitted from this copy of the Agreement.





A-1









 








EXHIBIT B

EXAMPLES REGARDING ADJUSTMENT FACTOR




          For purposes of the following examples, it is assumed that (a) the Adjustment Factor in effect
on June 30, 1995 is 1.0 and (b) on July 1, 1995 (the
“Partnership Record Date” for purposes
of these examples), prior to the events described in the examples, there are 100 REIT Shares issued
and outstanding.




          Example 1




          On the Partnership Record Date, the Previous General Partner declares a dividend on its
outstanding REIT Shares in REIT Shares. The amount of the dividend is one REIT Share paid in
respect of each REIT Share owned. Pursuant to Paragraph (i) of the definition of “Adjustment
Factor,” the Adjustment Factor shall be adjusted on the Partnership Record Date, effective
immediately after the stock dividend is declared, as follows:




1.0 * 200 OVER 100 = 2.0




          Accordingly, the Adjustment Factor after the stock dividend is declared is 2.0.




          Example 2




          On the Partnership Record Date, the Previous General Partner distributes options to purchase
REIT Shares to all holders of its REIT Shares. The amount of the distribution is one option to
acquire one REIT Share in respect of each REIT Share owned. The strike price is $4.00 a share.
The Value of a REIT Share on the Partnership Record Date is $5.00 per share. Pursuant to Paragraph
(ii) of the definition of “Adjustment Factor,” the Adjustment Factor shall be adjusted on the
Partnership Record Date, effective immediately after the options are distributed, as follows:




1.0 * {(100 + 100)} OVER {(100 + {100 * $4.00} OVER {$5.00})} = 1.1111




          Accordingly, the Adjustment Factor after the options are distributed is 1.1111. If the
options expire or become no longer exercisable, then the retroactive adjustment specified in
Paragraph (ii) of the definition of “Adjustment Factor” shall apply.




          Example 3




          On the Partnership Record Date, the Previous General Partner distributes assets to all holders
of its REIT Shares. The amount of the distribution is one asset with a fair market value (as
determined by the General Partner) of $1.00 in respect of each REIT Share owned. It is also
assumed that the assets do not relate to assets received by the Previous General Partner or the
General Partner pursuant to a pro rata distribution by the Partnership. The Value of a REIT Share
on the Partnership Record Date is $5.00 a share. Pursuant to Paragraph (iii) of the definition of
“Adjustment Factor,” the Adjustment Factor shall be adjusted on the Partnership Record Date,
effective immediately after the assets are distributed, as follows:




1.0 * {$5.00} OVER {$5.00 — $1.00} = 1.25




          Accordingly, the Adjustment Factor after the assets are distributed is 1.25.




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EXHIBIT C

LIST OF DESIGNATED PARTIES




Terry Considine

Peter K. Kompaniez

Robert P. Lacy

Michael & Verona Sollinger

Patrick Stucker

Stonegate Funding Company

Steven F. Goldstone

Donaldson C. Pillsbury

Christopher Crowley

Richard D. Spizzini

Henry L. King

Alfonso G. Canales

Thomas J. Flynn

Carl E. Yasharian

Margot A. Mathoni

David B. Pall

Thomas E. Woodruff

Glen H. & Joyce E. Rosmann

Warren H. Leland

Amerett L. Donahoe

Daniel E. Landon

Conrad F. Fingerson

Dwight E. Lowell, II

Alfred V. & Lois E. Gangnes

Edward S. Stone

Sycamore Realty Trust, V

E. Oran Brigham

Donald Ravitch

Brian Conboy

Alan B. Grebene

Charles A. Cahill, III

Harold F. & Lucille J. Goodman

Timothy J. Tucker




C-1









 








EXHIBIT D

NOTICE OF REDEMPTION




	 	 	 
	To:

	 	AIMCO-GP, Inc.
	 

	 	c/o Apartment Investment and
	 

	 	Management Company
	 

	 	4582 South Ulster Street Parkway
	 

	 	Suite 1100
	 

	 	Denver, Colorado 80237






          The undersigned Limited Partner or Assignee hereby tenders for Redemption ___Partnership
Common Units in AIMCO Properties, L.P. in accordance with the terms of the Agreement of Limited
Partnership of AIMCO Properties, L.P., dated as of July 29, 1994, as amended (the “Agreement”), and
the Redemption rights referred to therein. All capitalized terms used herein and not otherwise
defined shall have the same meaning ascribed to them respectively in the Agreement. The
undersigned Limited Partner or Assignee:





     (a) if the Partnership elects to redeem such Partnership Common Units for REIT Shares
rather than cash, hereby irrevocably transfers, assigns, contributes and sets over to the
Previous General Partner all of the undersigned Limited Partner’s or Assignee’s right, title
and interest in and to such Partnership Common Units;




     (b) undertakes (i) to surrender such Partnership Common Units and any certificate
therefor at the closing of the Redemption and (ii) to furnish to the Previous General
Partner, prior to the Specified Redemption Date, the documentation, instruments and
information required under Section 8.6.G of the Agreement;




     (c) directs that the certificate representing the REIT Shares, or the certified check
representing the Cash Amount, in either case, deliverable upon the closing of such
Redemption be delivered to the address specified below;




     (d) represents, warrants, certifies and agrees that:




     (i) the undersigned Limited Partner or Assignee is a Qualifying
Party;




     (ii) the undersigned Limited Partner or Assignee has, and at
the closing of the Redemption will have, good, marketable and
unencumbered title to such Partnership Common Units, free and clear
of the rights or interests of any other person or entity;




     (iii) the undersigned Limited Partner or Assignee has, and at
the closing of the Redemption will have, the full right, power and
authority to tender and surrender such Partnership Common Units as
provided herein; and




     (iv) the undersigned Limited Partner or Assignee has obtained
the consent or approval of all persons and entities, if any, having
the right to consent to or approve such tender and surrender; and




     (e) acknowledges that he will continue to own such Partnership Common Units until and
unless such Redemption transaction closes.



D-1









 





Dated:                                         




	 	 	 	 	 
	 

	 	Name of Limited Partner or Assignee:
	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	(Signature of Limited Partner or Assignee)	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	(Street Address)	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	(City)           (State)           (Zip Code)	 	 
	 
	 	 	 	 
	 

	 	Signature Guaranteed by:	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Issue Check Payable to:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Please insert social security 

or identifying number:
	 	 	 	 
	 

	 	 	 	 





D-2









 






EXHIBIT E

FORM OF UNIT CERTIFICATE



THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION, UNLESS THE TRANSFEROR DELIVERS TO THE PARTNERSHIP
AN OPINION OF COUNSEL SATISFACTORY TO THE PARTNERSHIP, IN FORM AND SUBSTANCE SATISFACTORY TO THE
PARTNERSHIP, TO THE EFFECT THAT THE PROPOSED SALE, TRANSFER OR OTHER DISPOSITION MAY BE EFFECTED
WITHOUT REGISTRATION UNDER THE ACT AND UNDER APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS. IN
ADDITION, THE LIMITED PARTNERSHIP INTEREST EVIDENCED BY THIS CERTIFICATE MAY BE SOLD OR OTHERWISE
TRANSFERRED ONLY IN COMPLIANCE WITH THE RESTRICTIONS ON TRANSFER SET FORTH IN THE AGREEMENT OF
LIMITED PARTNERSHIP OF AIMCO PROPERTIES, L.P., DATED AS OF JULY 29, 1994, A COPY OF WHICH MAY BE
OBTAINED FROM AIMCO-GP, INC., THE GENERAL PARTNER, AT ITS PRINCIPAL EXECUTIVE OFFICE.




Certificate Number ________




AIMCO PROPERTIES, L.P.




FORMED UNDER THE LAWS OF THE STATE OF DELAWARE




This certifies that _______________________________________________________________________




is the owner of _________________________________________________________________________




FULLY PAID PARTNERSHIP COMMON UNITS

OF

AIMCO PROPERTIES, L.P.,



transferable on the books of the Partnership in person or by duly authorized attorney on the
surrender of this Certificate properly endorsed. This Certificate and the Partnership Common Units
represented hereby are issued and shall be held subject to all of the provisions of the Agreement
of Limited Partnership, as the same may be amended and/or supplemented from time to time.




     IN WITNESS WHEREOF, the undersigned has signed this Certificate.



     Dated:



By________________________________




E-1









 








          For Value Received,                                          hereby sells, assigns and transfers unto
                                                            

                                                            Partnership Common Unit(s) represented by the within Certificate, and does hereby irrevocably
constitute and appoint the General Partner of AIMCO Properties, L.P. as its Attorney to transfer
said Partnership Common Unit(s) on the books of AIMCO Properties, L.P. with full power of
substitution in the premises.




Dated: ____________________




	 	 	 	 	 	 	 
	 

	 	By:
	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 






E-2









 






EXHIBIT F




PARTNERSHIP UNIT DESIGNATION OF

THE CLASS I HIGH PERFORMANCE PARTNERSHIP UNITS OF

AIMCO PROPERTIES, L.P.




     1. Number of Units and Designation.



          A class of Partnership Units is hereby designated as “Class I High Performance Partnership
Units,” and the number of Partnership Units initially constituting such class shall be fifteen
thousand (15,000), subject to adjustment at the Class I High Performance Valuation Date, as
provided in Section 3 hereof.




     2. Definitions.



          For purposes of this Partnership Unit Designation, the following terms shall have the meanings
indicated in this Section 2. Capitalized terms used and not otherwise defined herein shall have
the meanings assigned thereto in the Agreement.




          “AIMCO Equity Capitalization” shall mean the quotient obtained by dividing (i) the sum of the
AIMCO Market Values for each trading day included in the Measurement Period, by (ii) the number of
trading days included in the Measurement Period.




          “AIMCO Market Value” shall mean, for any date, the product of (i) the number of REIT Shares
and Partnership Units (other than Partnership Preferred Units) outstanding as of the close of
business on such date, multiplied by (ii) the Value of a REIT Share on such date.




          “AIMCO Total Return” shall mean the Total Return of the REIT Shares for the Measurement
Period; provided, however, that, for purposes of calculating the security price of the REIT Shares
at the end of the Measurement Period, such price shall be the average of the daily market prices
for twenty (20) consecutive trading days ending immediately prior to the Class I High Performance
Valuation Date. The market price for any such trading day shall be:




          (i) if the REIT Shares are listed or admitted to trading on any securities exchange or The
Nasdaq Stock Market’s National Market System, the volume-weighted average of trading prices on such
day, as reported by Bloomberg Financial Markets (or another reliable source selected by the General
Partner), or if no trade takes place on such day, the average of the closing bid and asked prices
on such day, as reported in the principal consolidated transaction reporting system;




          (ii) if the REIT Shares are not listed or admitted to trading on any securities exchange or
The Nasdaq Stock Market’s National Market System, the last reported sale price on such day or, if
no sale takes place on such day, the average of the closing bid and asked prices on such day, as
reported by a reliable quotation source designated by the General Partner; or




          (iii) if the REIT Shares are not listed or admitted to trading on any securities exchange or
The Nasdaq Stock Market’s National Market System and no such last reported sale price or closing
bid and asked prices are available, the average of the reported high bid and low asked prices on
such day, as reported by a reliable quotation source designated by the General Partner, or if there
shall be no bid and asked prices on such day, the average of the high bid and low asked prices, as
so reported, on the most recent day (not more than ten (10) days prior to the date in question) for
which prices have been so reported;




F-1









 







provided, however, that, if there are no bid and asked prices reported during the ten (10) days
prior to the date in question, the market price of the REIT Shares shall be determined by the
General Partner acting in good faith on the basis of such quotations and other information as it
considers, in its reasonable judgment, appropriate.




          “Agreement” shall mean the Agreement of Limited Partnership of the Partnership, as amended,
supplemented or restated from time to time.




          “Change of Control” shall mean the occurrence of any of the following events:




          (i) an acquisition (other than directly from the Previous General Partner) of any voting
securities of the Previous General Partner (the “Voting Securities) by any “person” (as the term
“person” is used for purposes of Section 13(d) or Section 14(d) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”)) immediately after which such person has “beneficial
ownership” (within the meaning of Rule 13d-3 promulgated under the Exchange Act) (“Beneficial
Ownership”) of 20% or more of the combined voting power of the Previous General Partner’s then
outstanding Voting Securities; provided, however, in determining whether a Change in Control has
occurred, Voting Securities that are acquired in a Non-Control Acquisition (as hereinafter defined)
shall not constitute an acquisition that would cause a Change in Control. “Non-Control
Acquisition” shall mean an acquisition by (A) an employee benefit plan (or a trust forming a part
thereof) maintained by (1) the Previous General Partner or (2) any corporation, partnership or
other person of which a majority of its voting power or its equity securities or equity interest is
owned directly or indirectly by the Previous General Partner or in which the Previous General
Partner serves as a general partner or manager (a “Subsidiary”), (B) the Previous General Partner
or any Subsidiary, or (C) any person in connection with a Non-Control Transaction (as hereinafter
defined);




          (ii) the individuals who constitute the Board of Directors of the Previous General Partner as
of January 1, 1998 (the “Incumbent Board”) cease for any reason to constitute at least two-thirds
(2/3) of the Board of Directors; provided, however, that if the election, or nomination for
election by the Previous General Partner’s stockholders, of any new director was approved by a vote
of at least two-thirds (2/3) of the Incumbent Board, such new director shall be considered as a
member of the Incumbent Board; provided, further, that no individual shall be considered a member
of the Incumbent Board if such individual initially assumed office as a result of either an actual
or threatened “election contest” (as described in Rule 14a-11 promulgated under the Exchange Act)
(an “Election Contest”) or other actual or threatened solicitation of proxies or consents by or on
behalf of a person other than the Board of Directors (a “Proxy Contest”) including by reason of any
agreement intended to avoid or settle any Election Contest or Proxy Contest; or




          (iii) approval by stockholders of the Previous General Partner of: (A) a merger,
consolidation, share exchange or reorganization involving the Previous General Partner, unless (1)
the stockholders of the Previous General Partner, immediately before such merger, consolidation,
share exchange or reorganization, own, directly or indirectly immediately following such merger,
consolidation, share exchange or reorganization, at least 80% of the combined voting power of the
outstanding voting securities of the corporation that is the successor in such merger,
consolidation, share exchange or reorganization (the “Surviving Company”) in substantially the same
proportion as their ownership of the Voting Securities immediately before such merger,
consolidation, share exchange or reorganization, (2) the individuals who were members of the
Incumbent Board immediately prior to the execution of the agreement providing for such merger,
consolidation, share exchange or reorganization constitute at least two-thirds (2/3) of the
members of the board of directors of the Surviving Company, and (3) no persons (other than the
Previous General Partner or any Subsidiary, any employee benefit plan (or any trust forming a part
thereof) maintained by the Previous General Partner, the Surviving Company or any Subsidiary, or
any person who, immediately prior to such merger, consolidation, share exchange or reorganization
had Beneficial Ownership of 15% or more of the then outstanding Voting Securities has Beneficial
Ownership of 15% or more of the combined voting power of the Surviving Company’s then outstanding
voting securities (a transaction described in clauses (1) through (3) is referred to herein as a
“Non-Control Transaction”); (B) a complete liquidation or dissolution of the




F-2









 







Previous General Partner; or (C) an agreement for the sale or other disposition of all or
substantially all of the assets of the Previous General Partner to any person (other than a
transfer to a Subsidiary).




          Notwithstanding the foregoing, a Change of Control shall not be deemed to occur solely because
any person (a “Subject Person”) acquired Beneficial Ownership of more than the permitted amount of
the outstanding Voting Securities as a result of the acquisition of Voting Securities by the
Previous General Partner that, by reducing the number of Voting Securities outstanding, increases
the proportional number of shares Beneficially Owned by such Subject Person, provided that if a
Change of Control would occur (but for the operation of this sentence) as a result of the
acquisition of Voting Securities by the Previous General Partner, and after such share acquisition
by the Previous General Partner, such Subject Person becomes the Beneficial Owner of any additional
Voting Securities that increases the percentage of the then outstanding Voting Securities
Beneficially Owned by such Subject Person, then a Change of Control shall occur.




          “Class I High Performance Cash Amount” shall mean, as of any date, the lesser of (i) an amount
of cash equal to the product of the amount that a Holder would receive in respect of each Class I
High Performance Partnership Unit if the Partnership sold all of its properties at their fair
market value (which may be determined by reference to the Value of a REIT Share), paid all of its
debts and distributed the remaining proceeds to the Partners as provided in Section 13.2 of the
Agreement, determined as of the applicable Valuation Date, or (ii) in the case of a Declination
followed by a Public Offering Funding, the Public Offering Funding Amount.




          “Class I High Performance Partnership Unit” shall mean a Partnership Unit with the
designations, preferences and relative, participating, optional or other special rights, powers and
duties as are set forth in this Exhibit.




          “Class I High Performance Valuation Date” shall mean the earlier to occur of (i) January 1,
2001, or (ii) the date on which a Change of Control occurs.




          “Determination Date” shall mean (i) when used with respect to any dividend or other
distribution, the date fixed for the determination of the holders of the securities entitled to
receive such dividend or distribution, or, if a dividend or distribution is paid or made without
fixing such a date, the date of such dividend or distribution, and (ii) when used with respect to
any split, subdivision, reverse stock split, combination or reclassification of securities, the
date upon which such split, subdivision, reverse stock split, combination or reclassification
becomes effective.




          “Excess Return” shall mean the amount (measured as a percentage), if any, by which (i) the
AIMCO Total Return exceeds (ii) the Hurdle Rate of Return.




          “Ex-Date” shall mean (i) when used with respect to any dividend or distribution, the first
date on which the securities on which the dividend or distribution is payable trade regular way on
the relevant exchange or in the relevant market without the right to receive such dividend or
distribution, and (ii) when used with respect to any split, subdivision, reverse stock split,
combination or reclassification of securities, the first date on which the securities trade regular
way on such exchange or in such market to reflect such split, subdivision, reverse stock split,
combination or reclassification becoming effective.




          “Extraordinary Distribution” shall mean the distribution by the Previous General Partner, by
dividend or otherwise, to all holders of its REIT Shares of evidences of its indebtedness or
assets (including securities) other than cash.




          “Hurdle Rate of Return” shall mean the greater of (x) 115% of the Industry Total Return, or
(y) 30% (or, if the Class I High Performance Valuation Date is not January 1, 2001, a percentage
equal to the return




F-3









 







over the Measurement Period that, if compounded annually over three years, would result in a
cumulative return of 30%).




          “Industry Total Return” shall mean the Total Return of the securities included in the Industry
Peer Group Index for the Measurement Period, with such average determined in a manner consistent
with the manner in which such index is calculated; provided, however, that if such Total Return
would be less than zero without giving effect to the reinvestment of dividends, then the “Industry
Total Return” shall be equal to zero.




          “Industry Peer Group Index” shall mean the Morgan Stanley REIT Index or any other similar
industry index approved by the Board of Directors of the Previous General Partner.




          “Measurement Period” shall mean the period from and including January 1, 1998 to but excluding
the Class I High Performance Valuation Date.




          “Partnership” shall mean AIMCO Properties, L.P., a Delaware limited partnership.




          “Total Return” shall mean, for any security and for any period, the cumulative total return
for such security over such period, as measured by (i) the sum of (A) the cumulative amount of
dividends paid in respect of such security for such period (assuming that all dividends other than
Extraordinary Distributions are reinvested in such security as of the payment date for such
dividend based on the security price on the dividend payment date), and (B) an amount equal to (1)
the security price at the end of such period, minus (2) the security price at the beginning of such
period, divided by (ii) the security price at the beginning of the measurement period; provided,
however, that if the foregoing calculation results in a negative number, the “Total Return” shall
be equal to zero.




          “Value” shall have the meaning set forth in the Agreement, except that Value shall be
determined by reference to the average of the daily market prices for twenty (20) consecutive
trading days rather than ten (10) consecutive trading days.




     3. Adjustment of Units at Class I High Performance Valuation Date.



          (a) If, on the Class I High Performance Valuation Date there is any Excess Return, then, from
and after such date, each Class I High Performance Partnership Unit shall, without any action on
the part of the Partnership, the General Partner or the Holder thereof, be automatically adjusted
to equal a number of Class I High Performance Partnership Units equal to the quotient obtained by
dividing (x) the product of (A) 15% of the Excess Return, multiplied by (B) the AIMCO Equity
Capitalization, by (y) the product of (A) 15,000 and (B) the Value of a REIT Share on the Class I
High Performance Valuation Date. For illustrative purposes, examples of the calculation of such
adjustment are set forth in Annex I hereto.




          (b) If, on the Class I High Performance Valuation Date there is no Excess Return, then, from
and after such date, each Class I High Performance Partnership Units shall, without any action on
the part of the Partnership, the General Partner or the Holder thereof, be automatically adjusted
to equal 1/100 of a Class I High Performance Partnership Unit.




     4. Distributions.



          On and after the Class I High Performance Valuation Date, the Holders of Class I High
Performance Partnership Units shall be entitled to receive distributions (other than distributions
upon liquidation) if, as, when and in the same amounts and of the same type as may be paid to
Holders of Partnership Common Units as if each Holder of Class I High Performance Partnership Units
held an equal number of Partnership Common Units originally issued on the Class I High Performance
Valuation Date.




F-4









 








     5. Allocations.



          (a) From and after the Class I High Performance Valuation Date, Net Income and Net Loss shall
be allocated to each of the Holders of Class I High Performance Partnership Units as if each such
Holder was the Holder of an equal number of Partnership Common Units originally issued on the Class
I High Performance Valuation Date.




          (b) In the event that the Partnership disposes of all or substantially all of its assets in a
transaction that will lead to a liquidation of the Partnership pursuant to Article XIII of the
Agreement, then, notwithstanding Section 6.3.C of the Agreement, each Holder of Class I High
Performance Partnership Units shall be specifically allocated items of Partnership income and gain
in an amount sufficient to cause the Capital Account of such Holder to be equal to that of a Holder
of an equal number of Partnership Common Units.




     6. Redemption.



          Upon the occurrence of a Change of Control, and subject to the applicable requirements of
Federal securities laws and any securities exchange or quotation system rules or regulations, each
Holder of Class I High Performance Partnership Units shall have the redemption rights of Qualifying
Parties set forth in Section 8.6 of the Agreement, except that (i) all references therein to
“Redeemable Units” or “Partnership Common Units” shall be deemed to be references to Class I High
Performance Partnership Units, (ii) the first Twelve-Month Period applicable to all Class I High
Performance Partnership Units shall be deemed to have passed, (iii) all references therein to “Cash
Amount” shall be deemed to be references to the Class I High Performance Cash Amount, and (iv) in
the event that the Previous General Partner elects to acquire Class I High Performance Partnership
Units that have been tendered for Redemption, the Previous General Partner shall acquire each such
Class I High Performance Partnership Unit in exchange for a number of REIT Shares equal to the
quotient obtained by dividing the Class I High Performance Cash Amount by the Value of a REIT
Share, determined as of the applicable Valuation Date.




     7. Status of Reacquired Units.



          All Class I High Performance Partnership Units which shall have been issued and reacquired in
any manner by the Partnership shall be deemed cancelled and no longer outstanding.




     8. Restrictions on Ownership and Transfer.



          The restrictions on Transfer set forth in Sections 11.1.B and 11.3.A of the Agreement shall
not apply to Transfers of Class I High Performance Partnership Units. Prior to the Class I High
Performance Valuation Date, the Class I High Performance Partnership Units shall be owned and held
solely by SMP I, L.L.C., a Delaware limited liability company (“SMP”), Richard S. Ellwood, J.
Landis Martin, Thomas L. Rhodes and John D. Smith. On or after the Class I High Performance
Valuation Date, the Class I High Performance Partnership Units may be Transferred (i) by SMP to (a)
any Person who is a member (a “Member”) of SMP immediately prior to such transfer, (b) a Family
Member of a Member, (c) a Controlled Entity of a Member, (c) any Person with respect to whom the
Member constitutes a Controlled Entity, (d) upon the death of a Member, by will or by the laws of
descent and distribution to any Qualified Transferee, and (ii) by any other Person to (a) a Family
Member of a such Person, (b) a Controlled Entity of such Person, (c) any other Person with respect
to whom such Person constitutes a Controlled Entity, (d) upon the death of such Person, by will or
by the laws of descent and distribution to any Qualified Transferee,




     9. Adjustments.



          (a) In the event of any Extraordinary Distribution occurring on or after January 1, 1998, for
purposes of determining the Value of a REIT Share or the AIMCO Total Return, each price of a REIT
Share




F-5









 







determined as of a date on or after the Ex-Date for such Extraordinary Distribution shall be
adjusted by multiplying such price by a fraction (i) the numerator of which shall be the price of a
REIT Share on the date immediately prior to such Ex-Date, and (ii) the denominator of which shall
be (A) the price of a REIT Share on the date immediately prior to such Ex-Date, minus (B) the fair
market value on the date fixed for such determination of the portion of the evidences of
indebtedness or assets so distributed applicable to one REIT Share (as determined by the General
Partner, whose determination shall be conclusive); provided further, that such amount shall be so
adjusted for each such Extraordinary Distribution occurring on or after January 1, 1998.




          (b) In the event that, on or after January 1, 1998, the Previous General Partner (i) declares
or pays a dividend on its outstanding REIT Shares in REIT Shares or makes a distribution to all
holders of its outstanding REIT Shares in REIT Shares, (ii) splits or subdivides its outstanding
REIT Shares, (iii) effects a reverse stock split or otherwise combines its outstanding REIT Shares
into a smaller number of REIT Shares, or (iv) otherwise reclassifies its outstanding REIT Shares,
then, for purposes of determining the Value of a REIT Share or the AIMCO Total Return, each price
of a REIT Share determined as of a date on or after the Ex-Date for such transaction shall be
adjusted by multiplying such price by a fraction (x) the numerator of which shall be the number of
REIT Shares issued and outstanding on the Determination Date for such dividend, distribution,
split, subdivision, reverse stock split, combination or reclassification (assuming for such
purposes that such dividend, distribution, split, subdivision, reverse split or combination has
occurred as of such time) and (y) the denominator of which shall be the actual number of REIT
Shares (determined without the above assumption) issued and outstanding on the Determination Date
for such dividend, distribution, split, subdivision, reverse stock split, combination or
reclassification.




          (c) The General Partner shall have authority to appropriately adjust the AIMCO Market Value,
the AIMCO Total Return or the Value of a REIT Share if any other transaction or circumstance occurs
or arises that would have an inequitable result.




     10. General.



          The ownership of Class I High Performance Partnership Units may (but need not, in the sole and
absolute discretion of the General Partner) be evidenced by one or more certificates. The General
Partner shall amend Exhibit A to the Agreement from time to time to the extent necessary to
reflect accurately the issuance of, and subsequent conversion, redemption, or any other event
having an effect on the ownership of, Class I High Performance Partnership Units.




F-6









 








ANNEX I TO

EXHIBIT F



Numerical Examples of the Calculation of the Adjustment to the Number of Class I High Performance
Partnership Units on the Class I High Performance Valuation Date




          The following table illustrates the adjustment that would be made on the Class I High
Performance Valuation Date to the number of Class I High Performance Units under different
circumstances. Except as otherwise indicated, it is assumed, for purposes of the illustration,
that: (i) the Class I High Performance Valuation Date is January 1, 2001; (ii) the AIMCO Total
Return is 14% per year; (iii) the Industry Total Return is 10% per year; and (iv) the weighted
average market value of outstanding equity (Common Stock and Partnership Units, other than
Partnership Preferred Units) during the Measurement Period is $3,000,000,000 (assumptions (i) -
(iv) are referred to as the “Base Case”).




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	(1)	 	(2)	 	(3)	 	(4)	 	(5)	 	(6)
	Cumulative Total Return Over Three Years:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Company Common Stock
	 	 	48.2	%	 	 	119.7	%	 	 	48.2	%	 	 	48.2	%	 	 	119.7	%	 	 	26.0	%
	Peer Group Index
	 	 	32.4	%	 	 	32.4	%	 	 	71.2	%	 	 	0	%	 	 	32.4	%	 	 	3.0	%
	115% of Peer Group Index
	 	 	38.1	%	 	 	38.1	%	 	 	83.7	%	 	 	0	%	 	 	38.1	%	 	 	3.5	%
	Minimum Return
	 	 	30	%	 	 	30	%	 	 	30	%	 	 	30	%	 	 	30	%	 	 	30	%
	Excess Return
	 	 	10.1	%	 	 	81.6	%	 	 	0	%	 	 	18.2	%	 	 	81.6	%	 	 	0	%
	Weighted Average Market Value of
Outstanding Equity (millions)
	 	$	3,000	 	 	$	4,000	 	 	$	3,000	 	 	$	3,000	 	 	$	10,000	 	 	$	4,000	 
	Excess Shareholder Return (millions)
	 	$	303	 	 	$	3,264	 	 	$	0	 	 	$	546	 	 	$	8,160	 	 	$	0	 
	Value of High Performance Units (millions)
	 	$	45.4	 	 	$	489.6	 	 	$	0	 	 	$	81.9	 	 	$	1,224.0	 	 	$	0	 
	Value of a REIT Share
	 	$	50	 	 	$	70	 	 	$	50	 	 	$	50	 	 	$	70	 	 	$	40	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Adjusted Number of Class I High Performance Units:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total
	 	 	908,000	 	 	 	6,994,286	 	 	 	0	 	 	 	1,638,000	 	 	 	17,485,714	 	 	 	0	 
	Per Unit Adjustment
	 	 	60.5	 	 	 	466.3	 	 	 	0	 	 	 	109.2	 	 	 	1,165.7	 	 	 	0	 








 




			
	(1)	 	Base Case.
	 
	(2)	 	Base Case, except that the Company Common Stock has a 30% annual Total Return and the
weighted average market value of outstanding equity is $4 billion.
	 
	(3)	 	Base Case, except that the Peer Group Index has a 20% annual Total Return.
(4) Base Case, except that the Peer Group Index has a negative annual Total Return of 10%.
	 
	(5)	 	Base Case, except that the Company Common Stock has a 30% annual Total Return and the
weighted average market value of outstanding equity is $10 billion.
	 
	(6)	 	Base Case, except that the Company Common Stock has an 8% annual Total Return, the Peer Group
Index has a 1% annual Total Return and the weighted average market value of outstanding equity
is $4 billion.




F-7









 










EXHIBIT G




PARTNERSHIP UNIT DESIGNATION OF

THE CLASS G PARTNERSHIP PREFERRED UNITS OF

AIMCO PROPERTIES, L.P.




     1. Number of Units and Designation.



          A class of Partnership Preferred Units is hereby designated as “Class G Partnership Preferred
Units,” and the number of Partnership Preferred Units constituting such class shall be Four Million
Fifty Thousand (4,050,000).




     2. Definitions.



          For purposes of the Class G Partnership Preferred Units, the following terms shall have the
meanings indicated in this Section 2. Capitalized terms used and not otherwise defined herein
shall have the meanings assigned thereto in the Agreement.




          “Agreement” shall mean the Agreement of Limited Partnership of the Partnership, as amended,
supplemented or restated from time to time.




          “Call Date” shall have the meaning set forth in paragraph (a) of Section 5 of this Exhibit.




          “Class G Partnership Preferred Unit” means a Partnership Preferred Unit with the designations,
preferences and relative, participating, optional or other special rights, powers and duties as are
set forth in this Exhibit. It is the intention of the General Partner that each Class G
Partnership Preferred Unit shall be substantially the economic equivalent of one share of Class G
Preferred Stock.




          “Class G Preferred Stock” means the Class G Cumulative Preferred Stock, par value $0.01 per
share, of the Previous General Partner.




          “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, or any
successor statute thereto. Reference to any provision of the Code shall mean such provision as in
effect from time to time, as the same may be amended, and any successor thereto, as interpreted by
any applicable regulations or other administrative pronouncements as in effect from time to time.




          “Common Stock” shall mean the Class A Common Stock, $.01 par value per share, of the Previous
General Partner or such shares of the Previous General Partner’s capital stock into which
outstanding shares of Common Stock shall be reclassified.




          “Distribution Payment Date” shall mean any date on which cash dividends are paid on the Class
G Preferred Stock.




          “Junior Partnership Units” shall have the meaning set forth in paragraph (c) of Section 7 of
this Exhibit.




          “Parity Partnership Units” shall have the meaning set forth in paragraph (b) of Section 7 of
this Exhibit.




G-1









 








          “Partnership” shall mean AIMCO Properties, L.P., a Delaware limited partnership.




          “Senior Partnership Units” shall have the meaning set forth in paragraph (a) of Section 7 of
this Exhibit.




     3. Distributions.



          On every Distribution Payment Date, the holders of Class G Partnership Preferred Units shall
be entitled to receive distributions payable in cash in an amount per Class G Partnership Preferred
Unit equal to the per share dividend payable on the Class G Preferred Stock on such Distribution
Payment Date. Each such distribution shall be payable to the holders of record of the Class G
Partnership Preferred Units, as they appear on the records of the Partnership at the close of
business on the record date for the dividend payable with respect to the Class G Preferred Stock on
such Distribution Payment Date. Holders of Class G Partnership Preferred Units shall not be
entitled to any distributions on the Class G Partnership Preferred Units, whether payable in cash,
property or stock, except as provided herein.




     4. Liquidation Preference.



          (1) In the event of any liquidation, dissolution or winding up of the Partnership, whether
voluntary or involuntary, before any payment or distribution of the Partnership (whether capital or
surplus) shall be made to or set apart for the holders of Junior Partnership Units, the holders of
Class G Partnership Preferred Units shall be entitled to receive Twenty Five Dollars ($25) per
Class G Partnership Preferred Unit (the “Liquidation Preference”), plus an amount equal to all
dividends (whether or not earned) accumulated, accrued and unpaid on each share of Class G
Preferred Stock to the date of final distribution to such holders; but such holders shall not be
entitled to any further payment. Until the holders of the Class G Partnership Preferred Units have
been paid the Liquidation Preference in full, plus an amount equal to all dividends (whether or not
earned) accumulated, accrued and unpaid on the Class G Preferred Stock to the date of final
distribution to such holders, no payment will be made to any holder of Junior Partnership Units
upon the liquidation, dissolution or winding up of the Partnership. If, upon any liquidation,
dissolution or winding up of the Partnership, the assets of the Partnership, or proceeds thereof,
distributable among the holders of Class G Partnership Preferred Units shall be insufficient to pay
in full the preferential amount aforesaid and liquidating payments on any Parity Partnership Units,
then such assets, or the proceeds thereof, shall be distributed among the holders of Class G
Partnership Preferred Units and any such Parity Partnership Units ratably in the same proportion as
the respective amounts that would be payable on such Class G Partnership Preferred Units and any
such other Parity Partnership Units if all amounts payable thereon were paid in full. For the
purposes of this Section 4, (i) a consolidation or merger of the Partnership with one or more
partnerships, or (ii) a sale or transfer of all or substantially all of the Partnership’s assets
shall not be deemed to be a liquidation, dissolution or winding up, voluntary or involuntary, of
the Partnership.




          (2) Upon any liquidation, dissolution or winding up of the Partnership, after payment shall
have been made in full to the holders of Class G Partnership Preferred Units and any Parity
Partnership Units, as provided in this Section 4, any other series or class or classes of Junior
Partnership Units shall, subject to the respective terms thereof, be entitled to receive any and
all assets remaining to be paid or distributed, and the holders of the Class G Partnership
Preferred Units and any Parity Partnership Units shall not be entitled to share therein.




     5. Redemption.



          Class G Partnership Preferred Units shall be redeemable by the Partnership as follows:




     (1) At any time that the Previous General Partner exercises its right to redeem all or any of
the shares of Class G Preferred Stock, the General Partner may cause the Partnership to redeem an
equal number of Class G Partnership Preferred Units, at a redemption price payable in cash equal to
100% of the Liquidation



G-2









 




Preference thereof, plus an amount equal to all accrued and unpaid dividends on each share of
Class G Preferred Stock to the date fixed for redemption (the “Call Date”), in the manner set forth
herein.




          (2) If the Partnership shall redeem Class G Partnership Preferred Units pursuant to paragraph
(a) of this Section 5, from and after the Call Date (unless the Partnership shall fail to make
available the amount of cash necessary to effect such redemption), (i) except for payment of the
redemption price, the Partnership shall not make any further distributions on the Class G
Partnership Preferred Units so called for redemption (except that, in the case of a Call Date after
a distribution record date and prior to the related Distribution Payment Date, holders of Class G
Partnership Preferred Units on the distribution record date will be entitled on such Distribution
Payment Date to receive the distribution payable thereon), (ii) said units shall no longer be
deemed to be outstanding, and (iii) all rights of the holders thereof as holders of Class G
Partnership Preferred Units of the Partnership shall cease (except the rights to receive the cash
payable upon such redemption, without interest thereon, and to receive any distributions payable
thereon). No interest shall accrue for the benefit of the holders of Class G Partnership Preferred
Units to be redeemed on any cash set aside by the Partnership.




          If fewer than all the outstanding Class G Partnership Preferred Units are to be redeemed,
units to be redeemed shall be selected by the Partnership from outstanding Class G Partnership
Preferred Units not previously called for redemption by any method determined by the General
Partner in its discretion. Upon any such redemption, the General Partner shall amend Exhibit
A to the Agreement as appropriate to reflect such redemption.




     6. Status of Reacquired Units.



          All Class G Partnership Preferred Units which shall have been issued and reacquired in any
manner by the Partnership shall be deemed cancelled.




     7. Ranking.



          Any class or series of Partnership Units of the Partnership shall be deemed to rank:




          (1) prior or senior to the Class G Partnership Preferred Units, as to the payment of
distributions and as to distributions of assets upon liquidation, dissolution or winding up, if the
holders of such class or series shall be entitled to the receipt of distributions or of amounts
distributable upon liquidation, dissolution or winding up, as the case may be, in preference or
priority to the holders of Class G Partnership Preferred Units (“Senior Partnership Units”);




          (2) on a parity with the Class G Partnership Preferred Units, as to the payment of
distributions and as to distribution of assets upon liquidation, dissolution or winding up, whether
or not the distribution rates, distribution payment dates or redemption or liquidation prices per
unit or other denomination thereof be different from those of the Class G Partnership Preferred
Units if the holders of such class or series of Partnership Units and the Class G Partnership
Preferred Units shall be entitled to the receipt of distributions and of amounts distributable upon
liquidation, dissolution or winding up in proportion to their respective amounts of accrued and
unpaid distributions per unit or other denomination or liquidation preferences, without preference
or priority one over the other (“Parity Partnership Units”); and




          (3) junior to the Class G Partnership Preferred Units, as to the payment of distributions or
as to the distribution of assets upon liquidation, dissolution or winding up, if such class or
series of Partnership Units shall be Partnership Common Units or if the holders of Class G
Preferred Partnership Units shall be entitled to receipt of distributions or of amounts
distributable upon liquidation, dissolution or winding up, as the case may be, in preference or
priority to the holders of such class or series of Partnership Units (“Junior Partnership Units”).




G-3









 








     8. Special Allocations.



          (1) Gross income and, if necessary, gain shall be allocated to the holders of Class G
Partnership Preferred Units for any Fiscal Year (and, if necessary, subsequent Fiscal Years) to the
extent that the holders of Class G Partnership Preferred Units receive a distribution on any Class
G Partnership Preferred Units (other than an amount included in any redemption pursuant to Section
5 hereof) with respect to such Fiscal Year.




          (2) If any Class G Partnership Preferred Units are redeemed pursuant to Section 5 hereof, for
the Fiscal Year that includes such redemption (and, if necessary, for subsequent Fiscal Years) (a)
gross income and gain (in such relative proportions as the General Partner in its discretion shall
determine) shall be allocated to the holders of Class G Partnership Preferred Units to the extent
that the redemption amounts paid or payable with respect to the Class G Partnership Preferred Units
so redeemed exceeds the aggregate Capital Contributions (net of liabilities assumed or taken
subject to by the Partnership) per Class G Partnership Preferred Unit allocable to the Class G
Partnership Preferred Units so redeemed and (b) deductions and losses (in such relative proportions
as the General Partner in its discretion shall determine) shall be allocated to the holders of
Class G Partnership Preferred Units to the extent that the aggregate Capital Contributions (net of
liabilities assumed or taken subject to by the Partnership) per Class G Partnership Preferred Unit
allocable to the Class G Partnership Preferred Units so redeemed exceeds the redemption amount paid
or payable with respect to the Class G Partnership Preferred Units so redeemed.




     9. Restrictions on Ownership.



          The Class G Partnership Preferred Units shall be owned and held solely by the General Partner
or the Special Limited Partner.




     10. General.



          (1) The ownership of Class G Partnership Preferred Units may (but need not, in the sole and
absolute discretion of the General Partner) be evidenced by one or more certificates. The General
Partner shall amend Exhibit A to the Agreement from time to time to the extent necessary to
reflect accurately the issuance of, and subsequent conversion, redemption, or any other event
having an effect on the ownership of, Class G Partnership Preferred Units.




          (2) The rights of the General Partner and the Special Limited Partner, in their capacity as
holders of the Class G Partnership Preferred Units, are in addition to and not in limitation of any
other rights or authority of the General Partner or the Special Limited Partner, respectively, in
any other capacity under the Agreement or applicable law. In addition, nothing contained herein
shall be deemed to limit or otherwise restrict the authority of the General Partner or the Special
Limited Partner under the Agreement, other than in their capacity as holders of the Class G
Partnership Preferred Units.




G-4









 








EXHIBIT H




PARTNERSHIP UNIT DESIGNATION OF

THE CLASS ONE PARTNERSHIP PREFERRED UNITS OF

AIMCO PROPERTIES, L.P.




     1. Number of Units and Designation.



          A class of Partnership Preferred Units is hereby designated as “Class One Partnership
Preferred Units,” and the number of Partnership Preferred Units constituting such class shall be
Ninety Thousand (90,000).




     2. Definitions.



          Capitalized terms used and not otherwise defined herein shall have the meanings assigned
thereto in the Agreement, as modified by this Partnership Unit Designation and the defined terms
used herein. For purposes of this Partnership Unit Designation, the following terms shall have the
respective meanings ascribed below:




          “Agreement” shall mean the Agreement of Limited Partnership of the Partnership, as amended,
supplemented or restated from time to time.




          “Assignee” shall mean a Person to whom one or more Preferred Units have been Transferred in a
manner permitted under the Agreement, but who has not become a Substituted Limited Partner, and who
has the rights set forth in Section 11.5 of the Agreement.




          “Cash Amount” shall mean, with respect to any Tendered Units, cash in an amount equal to the
product of the number of Tendered Units, multiplied by 91.93 (which is the quotient obtained by
dividing $8 by 8.75%).




          “Class One Partnership Preferred Unit” or “Preferred Unit” shall mean a Partnership Preferred
Unit with the designations, preferences and relative, participating, optional or other special
rights, powers and duties as are set forth in this Partnership Unit Designation.




          “Cut-Off Date” shall mean the fifth (5th) Business Day after the General Partner’s receipt of
a Notice of Redemption.




          “Declination” shall have the meaning set forth in Section 6(f) of this Partnership Unit
Designation.




          “Distribution Payment Date” shall have the meaning set forth of Section 3(a) of this
Partnership Unit Designation.




          “Junior Partnership Units” shall have the meaning set forth in Section 3(c) of this
Partnership Unit Designation.




          “Liquidation Preference” shall have the meaning set forth in Section 5(a) of this Partnership
Unit Designation.




          “Market Value” shall mean, as of any calculation date and with respect to any share of stock,
the average of the daily market prices for ten (10) consecutive trading days immediately preceding
the calculation date. The market price for any such trading day shall be:





     (i) if the shares are listed or admitted to trading on any securities exchange or The
Nasdaq Stock Market’s National Market System, the closing price, regular way, on such day,
or if no such sale takes place on such day, the average of the closing bid and asked prices
on such day, in either case as reported in the principal consolidated transaction reporting
system,



H-1









 






     (ii) if the shares are not listed or admitted to trading on any securities exchange or
The Nasdaq Stock Market’s National Market System, the last reported sale price on such day
or, if no sale takes place on such day, the average of the closing bid and asked prices on
such day, as reported by a reliable quotation source designated by the General Partner, or




     (iii) if the shares are not listed or admitted to trading on any securities exchange
or The Nasdaq Stock Market’s National Market System and no such last reported sale price or
closing bid and asked prices are available, the average of the reported high bid and low
asked prices on such day, as reported by a reliable quotation source designated by the
General Partner, or if there shall be no bid and asked prices on such day, the average of
the high bid and low asked prices, as so reported, on the most recent day (not more than ten
(10) days prior to the date in question) for which prices have been so reported;


provided, however, that, if there are no bid and asked prices reported during the ten (10) days
prior to the date in question, the Market Value of the shares shall be determined by the General
Partner acting in good faith on the basis of such quotations and other information as it considers,
in its reasonable judgment, appropriate; provided, further, that the General Partner is authorized
to adjust the market price for any trading day as may be necessary, in its judgment, to reflect an
event that occurs at any time after the commencement of such ten day period that would unfairly
distort the Market Value, including, without limitation, a stock dividend, split, subdivision,
reverse stock split, or share combination.




          “Notice of Redemption” shall mean a Notice of Redemption in the form of Annex I to this
Partnership Unit Designation.




          “Parity Partnership Units” shall have the meaning set forth in Section 3(b) of this
Partnership Unit Designation.




          “Partnership” shall mean AIMCO Properties, L.P., a Delaware limited partnership.




          “Primary Offering Notice” shall have the meaning set forth in Section 6(h)(3) of this
Partnership Unit Designation.




          “Public Offering Funding” shall have the meaning set forth in Section 6(f)(2) of this
Partnership Unit Designation.




          “Redemption” shall have the meaning set forth in Section 6(b) of this Partnership Unit
Designation.




     “Registrable Shares” shall have the meaning set forth in Section 6(f)(2) of this Partnership
Unit Designation.



     “REIT Shares Amount” shall mean, with respect to any Tendered Units, a number of REIT Shares
equal to the quotient obtained by dividing (i) the Cash Amount for such Tendered Units, by (ii) the
Market Value of a REIT Share as of the fifth (5th) Business Day prior to the date of receipt by the
General Partner of a Notice of Redemption for such Tendered Units.



     “Senior Partnership Units” shall have the meaning set forth in Section 3(a) of this
Partnership Unit Designation.



     “Single Funding Notice” shall have the meaning set forth in Section 6(f)(3) of this
Partnership Unit Designation.



     “Specified Redemption Date” shall mean, with respect to any Redemption, the later of (a) the
tenth (10th) Business Day after the receipt by the General Partner of a Notice of Redemption or (b)
in the case of a Declination followed by a Public Offering Funding, the Business Day next following
the date of the closing of the Public Offering Funding; provided, however, that the Specified
Redemption Date, as well as the closing of a Redemption, or an acquisition of Tendered Units by the
Previous General Partner pursuant to Section 6 hereof, on



H-2









 




any Specified Redemption Date, may be deferred, in the General Partner’s sole and absolute
discretion, for such time (but in any event not more than one hundred fifty (150) days in the
aggregate) as may reasonably be required to effect, as applicable, (i) a Public Offering Funding or
other necessary funding arrangements, (ii) compliance with the Securities Act or other law
(including, but not limited to, (a) state “blue sky” or other securities laws and (b) the
expiration or termination of the applicable waiting period, if any, under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended) and (iii) satisfaction or waiver of other
commercially reasonable and customary closing conditions and requirements for a transaction of such
nature.




          “Tendering Party” shall have the meaning set forth in Section 6(b) of this Partnership Unit
Designation.




          “Tendered Units” shall have the meaning set forth in Section 6(b) of this Partnership Unit
Designation.




     3. Ranking.



          Any class or series of Partnership Units of the Partnership shall be deemed to rank:




          (a) prior or senior to the Class One Partnership Preferred Units, as to the payment of
distributions and as to distributions of assets upon liquidation, dissolution or winding up, if the
holders of such class or series shall be entitled to the receipt of distributions and of amounts
distributable upon liquidation, dissolution or winding up, as the case may be, in preference or
priority to the holders of Class One Partnership Preferred Units (the Partnership Units referred to
in this paragraph being hereinafter referred to, collectively, as “Senior Partnership Units”);




          (b) on a parity with the Class One Partnership Preferred Units, as to the payment of
distributions and as to distribution of assets upon liquidation, dissolution or winding up, whether
or not the distribution rates, distribution payment dates or redemption or liquidation prices per
unit or other denomination thereof be different from those of the Class One Partnership Preferred
Units if (i) such class or series of Partnership Units shall be Class G Partnership Preferred Units
or (ii) the holders of such class or series of Partnership Units and the Class One Partnership
Preferred Units shall be entitled to the receipt of distributions and of amounts distributable upon
liquidation, dissolution or winding up in proportion to their respective amounts of accrued and
unpaid distributions per unit or other denomination or liquidation preferences, without preference
or priority one over the other (the Partnership Units referred to in clauses (i) and (ii) of this
paragraph being hereinafter referred to, collectively, as “Parity Partnership Units”); and




          (c) junior to the Class One Partnership Preferred Units, as to the payment of distributions
and as to the distribution of assets upon liquidation, dissolution or winding up, if (i) such class
or series of Partnership Units shall be Partnership Common Units or Class I High Performance
Partnership Units or (ii) the holders of Class One Partnership Preferred Units shall be entitled to
receipt of distributions or of amounts distributable upon liquidation, dissolution or winding up,
as the case may be, in preference or priority to the holders of such class or series of Partnership
Units (the Partnership Units referred to in clauses (i) and (ii) of this paragraph being
hereinafter referred to, collectively, as “Junior Partnership Units”).




     4. Quarterly Cash Distributions.



          (a) Holders of Preferred Units will be entitled to receive, when and as declared by the
General Partner, quarterly cash distributions at the rate of $2.00 per Preferred Unit. Any such
distributions will be cumulative from the date of original issue, whether or not in any
distribution period or periods such distributions have been declared, and shall be payable
quarterly on February 15, May 15, August 15 and November 15 of each year (or, if not a Business
Day, the next succeeding Business Day) (each a “Distribution Payment Date”), commencing on the
first such date occurring after the date of original issue. If the Preferred Units are issued on
any day other than a Distribution Payment Date, the first distribution payable on such Preferred
Units will be prorated for the portion of the quarterly period that such Preferred Units are
outstanding on the basis of twelve 30-day months and a 360-day year. Distributions will be payable
in arrears to holders of record as they appear on the records of the




H-3









 







Partnership at the close of business on the February 1, May 1, August 1 or November 1, as the
case may be, immediately preceding each Distribution Payment Date. Holders of Preferred Units will
not be entitled to receive any distributions in excess of cumulative distributions on the Preferred
Units. No interest, or sum of money in lieu of interest, shall be payable in respect of any
distribution payment or payments on the Preferred Units that may be in arrears. Holders of any
Preferred Units that are issued after the date of original issuance will be entitled to receive the
same distributions as holders of any Preferred Units issued on the date of original issuance.




          (b) When distributions are not paid in full upon the Preferred Units or any Parity Partnership
Units, or a sum sufficient for such payment is not set apart, all distributions declared upon the
Preferred Units and any Parity Partnership Units shall be declared ratably in proportion to the
respective amounts of distributions accumulated and unpaid on the Preferred Units and accumulated
and unpaid on such Parity Partnership Units. Except as set forth in the preceding sentence, unless
distributions on the Preferred Units equal to the full amount of accumulated and unpaid
distributions have been or contemporaneously are declared and paid, or declared and a sum
sufficient for the payment thereof has been or contemporaneously is set apart for such payment, for
all past distribution periods, no distributions shall be declared or paid or set apart for payment
by the Partnership with respect to any Parity Partnership Units.




          (c) Unless full cumulative distributions (including all accumulated, accrued and unpaid
distributions) on the Preferred Units have been declared and paid, or declared and set apart for
payment, for all past distribution periods, no distributions (other than distributions paid in
Junior Partnership Units or options, warrants or rights to subscribe for or purchase Junior
Partnership Units) may be declared or paid or set apart for payment by the Partnership and no other
distribution of cash or other property may be declared or made, directly or indirectly, by the
Partnership with respect to any Junior Partnership Units, nor shall any Junior Partnership Units be
redeemed, purchased or otherwise acquired (except for a redemption, purchase or other acquisition
of Partnership Common Units made for purposes of an employee incentive or benefit plan of the
Partnership or any affiliate thereof, including, without limitation, Previous General Partner and
its affiliates) for any consideration (or any monies be paid to or made available for a sinking
fund for the redemption of any such Junior Partnership Units), directly or indirectly, by the
Partnership (except by conversion into or exchange for Junior Partnership Units, or options,
warrants or rights to subscribe for or purchase Junior Partnership Units), nor shall any other cash
or other property be paid or distributed to or for the benefit of holders of Junior Partnership
Units.




          (d) Notwithstanding the foregoing provisions of this Section 4, the Partnership shall not be
prohibited from (i) declaring or paying or setting apart for payment any distribution on any Parity
Partnership Units or (ii) redeeming, purchasing or otherwise acquiring any Parity Partnership
Units, in each case, if such declaration, payment, redemption, purchase or other acquisition is
necessary to maintain the Previous General Partner’s qualification as a REIT.




     5. Liquidation Preference.



          (a) Upon any voluntary or involuntary liquidation, dissolution or winding up of the
Partnership, before any allocation of income or gain by the Partnership shall be made to or set
apart for the holders of any Junior Partnership Units, to the extent possible, the holders of
Preferred Units shall be entitled to be allocated income and gain to effectively enable them to
receive a liquidation preference (the “Liquidation Preference”) per Preferred Unit equal to the sum
of (i) 91.93 (which is the quotient obtained by dividing $8 by 8.75%), plus (ii) any accumulated,
accrued and unpaid distributions (whether or not earned or declared) to the date of final
distribution to such holders; but such holders will not be entitled to any further payment or
allocation. Until all holders of the Preferred Units have been paid the Liquidation Preference in
full, no allocation of income or gain will be made to any holder of Junior Partnership Units upon
the liquidation, dissolution or winding up of the Partnership.




          (b) If, upon any liquidation, dissolution or winding up of the Partnership, the assets of the
Partnership, or proceeds thereof, distributable among the holders of Preferred Units shall be
insufficient to pay in full the Liquidation Preference and liquidating payments on any Parity
Partnership Units, then following certain allocations made by the Partnership, such assets, or the
proceeds thereof, shall be distributed among the holders of Preferred Units and any such Parity
Partnership Units ratably in the same proportion as the respective amounts that would be payable on
such Preferred Units and any such Parity Partnership Units if all amounts payable thereon were paid
in full.




H-4









 








          (c) A voluntary or involuntary liquidation, dissolution or winding up of the Partnership will
not include a consolidation or merger of the Partnership with one or more partnerships,
corporations or other entities, or a sale or transfer of all or substantially all of the
Partnership’s assets.




          (d) Upon any liquidation, dissolution or winding up of the Partnership, after all allocations
shall have been made in full to the holders of Preferred Units and any Parity Partnership Units to
enable them to receive their respective liquidation preferences, any Junior Partnership Units shall
be entitled to receive any and all assets remaining to be paid or distributed, and the holders of
the Preferred Units and any Parity Partnership Units shall not be entitled to share therein.




     6. Redemption.



          (a) Except as set forth in Section 6(l) hereof, the Preferred Units may not be redeemed at the
option of the Partnership, and will not be required to be redeemed or repurchased by the
Partnership or the Previous General Partner except if a holder of a Preferred Unit effects a
Redemption, as provided for in Section 6(b) hereof. The Partnership or the Previous General
Partner may purchase Preferred Units from time to time in the open market, by tender or exchange
offer, in privately negotiated purchases or otherwise.




          (b) On or after the first (1st) anniversary of becoming a holder of Preferred Units, a
Qualifying Party shall have the right (subject to the terms and conditions set forth herein) to
require the Partnership to redeem all or a portion of the Preferred Units held by such Qualifying
Party (such Preferred Units being hereafter “Tendered Units”) in exchange (a “Redemption”) for REIT
Shares issuable on, or the Cash Amount payable on, the Specified Redemption Date, as determined by
the Partnership in its sole discretion. Any Redemption shall be exercised pursuant to a Notice of
Redemption delivered to the General Partner by the Qualifying Party when exercising the Redemption
right (the “Tendering Party”).




          (c) If the Partnership elects to redeem Tendered Units for REIT Shares rather than cash, then
the Partnership shall direct the Previous General Partner to issue and deliver such REIT Shares to
the Tendering Party pursuant to the terms set forth in this Section 6, in which case, (i) the
Previous General Partner, acting as a distinct legal entity, shall assume directly the obligation
with respect thereto and shall satisfy the Tendering Party’s exercise of its Redemption right, and
(ii) such transaction shall be treated, for federal income tax purposes, as a transfer by the
Tendering Party of such Tendered Units to the Previous General Partner in exchange for REIT Shares.
In making such election to cause the Previous General Partner to acquire Tendered Units, the
Partnership shall act in a fair, equitable and reasonable manner that neither prefers one group or
class of Tendering Parties over another nor discriminates against a group or class of Tendering
Parties. If the Partnership elects to redeem any number of Tendered Units for REIT Shares, rather
than cash, on the Specified Redemption Date, the Tendering Party shall sell such number of the
Tendered Units to the Previous General Partner in exchange for a number of REIT Shares equal to the
REIT Shares Amount for such number of the Tendered Units. The Tendering Party shall submit (i)
such information, certification or affidavit as the Previous General Partner may reasonably require
in connection with the application of the Ownership Limit and other restrictions and limitations of
the Charter to any such acquisition and (ii) such written representations, investment letters,
legal opinions or other instruments necessary, in the Previous General Partner’s view, to effect
compliance with the Securities Act. The REIT Shares shall be delivered by the Previous General
Partner as duly authorized, validly issued, fully paid and accessible REIT Shares, free of any
pledge, lien, encumbrance or restriction, other than the Ownership Limit and other restrictions
provided in the Charter, the Bylaws of the Previous General Partner, the Securities Act and
relevant state securities or “blue sky” laws. Neither any Tendering Party whose Tendered Units are
acquired by the Previous General Partner pursuant to this Section 6, any Partner, any Assignee nor
any other interested Person shall have any right to require or cause the Previous General Partner
or the General Partner to register, qualify or list any REIT Shares owned or held by such Person,
whether or not such REIT Shares are issued pursuant to this Section 6, with the SEC, with any state
securities commissioner, department or agency, under the Securities Act or the Exchange Act or with
any stock exchange; provided, however, that this limitation shall not be in derogation of any
registration or similar rights granted pursuant to any other written agreement between the Previous
General Partner and any such Person. Notwithstanding any delay in such delivery, the Tendering
Party shall be deemed the owner of such REIT Shares for all purposes, including, without
limitation, rights to vote or consent, receive dividends, and exercise rights, as of the Specified
Redemption Date. REIT Shares issued upon an acquisition of the Tendered Units by the Previous
General Partner pursuant to this Section 6 may contain such legends regarding restrictions under
the Securities Act and




H-5









 







applicable state securities laws as the Previous General Partner in good faith determines to
be necessary or advisable in order to ensure compliance with such laws.




          (d) The Partnership shall have no obligation to effect any redemption unless and until a
Tendering Party has given the Partnership a Notice of Redemption. Each Notice of Redemption shall
be sent by hand delivery or by first class mail, postage prepaid, to AIMCO Properties, L.P., c/o
AIMCO-GP, Inc., 4582 South Ulster Street Parkway, Suite 1100, Denver, Colorado 80237, Attention:
Investor Relations, or to such other address as the Partnership shall specify in writing by
delivery to the holders of the Preferred Units in the same manner as that set forth above for
delivery of the Notice of Redemption. At any time prior to the Specified Redemption Date for any
Redemption, any holder may revoke its Notice of Redemption.




          (e) A Tendering Party shall have no right to receive distributions with respect to any
Tendered Units (other than the Cash Amount) paid after delivery of the Notice of Redemption,
whether or not the record date for such distribution precedes or coincides with such delivery of
the Notice of Redemption. If the Partnership elects to redeem any number of Tendered Units for
cash, the Cash Amount for such number of Tendered Units shall be delivered as a certified check
payable to the Tendering Party or, in the General Partner’s sole and absolute discretion, in
immediately available funds.




          (f) In the event that the Partnership declines to cause the Previous General Partner to
acquire all of the Tendered Units from the Tendering Party in exchange for REIT Shares pursuant to
this Section 6 following receipt of a Notice of Redemption (a “Declination”):





     (1) The Previous General Partner or the General Partner shall give notice of such
Declination to the Tendering Party on or before the close of business on the Cut-Off Date.




     (2) The Partnership may elect to raise funds for the payment of the Cash Amount either
(a) by requiring that the Previous General Partner contribute such funds from the proceeds
of a registered public offering (a “Public Offering Funding”) by the Previous General
Partner of a number of REIT Shares (“Registrable Shares”) equal to the REIT Shares Amount
with respect to the Tendered Units or (b) from any other sources (including, but not limited
to, the sale of any Property and the incurrence of additional Debt) available to the
Partnership.




     (3) Promptly upon the General Partner’s receipt of the Notice of Redemption and the
Previous General Partner or the General Partner giving notice of the Partnership’s
Declination, the General Partner shall give notice (a “Single Funding Notice”) to all
Qualifying Parties then holding Preferred Units and having Redemption rights pursuant to
this Section 6 and require that all such Qualifying Parties elect whether or not to effect a
Redemption of their Preferred Units to be funded through such Public Offering Funding. In
the event that any such Qualifying Party elects to effect such a Redemption, it shall give
notice thereof and of the number of Preferred Units to be made subject thereon in writing to
the General Partner within ten (10) Business Days after receipt of the Single Funding
Notice, and such Qualifying Party shall be treated as a Tendering Party for all purposes of
this Section 6. In the event that a Qualifying Party does not so elect, it shall be deemed
to have waived its right to effect a Redemption for the next twelve months; provided,
however, that the Previous General Partner shall not be required to acquire Preferred Units
pursuant to this Section 6(f) more than twice within any twelve-month period.


Any proceeds from a Public Offering Funding that are in excess of the Cash Amount shall be for the
sole benefit of the Previous General Partner and/or the General Partner. The General Partner
and/or the Special Limited Partner shall make a Capital Contribution of such amounts to the
Partnership for an additional General Partner Interest and/or Limited Partner Interest. Any such
contribution shall entitle the General Partner and the Special Limited Partner, as the case may be,
to an equitable Percentage Interest adjustment.




          (g) Notwithstanding the provisions of this Section 6, the Previous General Partner shall not,
under any circumstances, elect to acquire Tendered Units in exchange for the REIT Shares if such
exchange would be prohibited under the Charter.




H-6









 








          (h) Notwithstanding anything herein to the contrary, with respect to any Redemption pursuant
to this Section 6:





     (1) All Preferred Units acquired by the Previous General Partner pursuant to this
Section 6 hereof shall be contributed by the Previous General Partner to either or both of
the General Partner and the Special Limited Partner in such proportions as the Previous
General Partner, the General Partner and the Special Limited Partner shall determine. Any
Preferred Units so contributed to the General Partner shall automatically, and without
further action required, be converted into and deemed to be a General Partner Interest
comprised of an equal number of Partnership Common Units. Any Preferred Units so
contributed to the Special Limited Partner shall be converted into Partnership Common Units.




     (2) Subject to the Ownership Limit, no Tendering Party may effect a Redemption for less
than five hundred (500) Preferred Units or, if such Tendering Party holds (as a Limited
Partner or, economically, as an Assignee) less than five hundred (500) Preferred Units, all
of the Preferred Units held by such Tendering Party.




     (3) Notwithstanding anything herein to the contrary, with respect to any Redemption or
acquisition of Tendered Units by the Previous General Partner pursuant to this Section 6, in
the event that the Previous General Partner or the General Partner gives notice to all
Limited Partners (but excluding any Assignees) then owning Partnership Interests (a “Primary
Offering Notice”) that the Previous General Partner desires to effect a primary offering of
its equity securities then, unless the Previous General Partner and the General Partner
otherwise consent, commencement of the actions denoted in Section 6(f) hereof as to a Public
Offering Funding with respect to any Notice of Redemption thereafter received, whether or
not the Tendering Party is a Limited Partner, may be delayed until the earlier of (a) the
completion of the primary offering or (b) ninety (90) days following the giving of the
Primary Offering Notice.




     (4) Without the Consent of the Previous General Partner, no Tendering Party may effect
a Redemption within ninety (90) days following the closing of any prior Public Offering
Funding.




     (5) The consummation of such Redemption shall be subject to the expiration or
termination of the applicable waiting period, if any, under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.




     (6) The Tendering Party shall continue to own (subject, in the case of an Assignee, to
the provision of Section 11.5 of the Agreement) all Preferred Units subject to any
Redemption, and be treated as a Limited Partner or an Assignee, as applicable, with respect
to such Preferred Units for all purposes of the Agreement, until such Preferred Units are
either paid for by the Partnership pursuant to this Section 6 or transferred to the Previous
General Partner (or directly to the General Partner or Special Limited Partner) and paid
for, by the issuance of the REIT Shares, pursuant to this Section 6 on the Specified
Redemption Date. Until a Specified Redemption Date and an acquisition of the Tendered Units
by the Previous General Partner pursuant to this Section 6, the Tendering Party shall have
no rights as a shareholder of the Previous General Partner with respect to the REIT Shares
issuable in connection with such acquisition.


For purposes of determining compliance with the restrictions set forth in this Section 6(h), all
Partnership Common Units and Partnership Preferred Units, including Preferred Units, beneficially
owned by a Related Party of a Tendering Party shall be considered to be owned or held by such
Tendering Party.




          (i) In connection with an exercise of Redemption rights pursuant to this Section 6, the
Tendering Party shall submit the following to the General Partner, in addition to the Notice of
Redemption:





     (1) A written affidavit, dated the same date as the Notice of Redemption, (a)
disclosing the actual and constructive ownership, as determined for purposes of Code
Sections 856(a)(6) and 856(h), of REIT Shares and any other classes or shares of the
Previous General Partner by (i) such



H-7









 






Tendering Party and (ii) any Related Party and (b) representing that, after giving
effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT
Shares in excess of the Ownership Limit;




     (2) A written representation that neither the Tendering Party nor any Related Party has
any intention to acquire any additional REIT Shares or any other class of shares of the
Previous General Partner prior to the closing of the Redemption on the Specified Redemption
Date; and




     (3) An undertaking to certify, at and as a condition to the closing of the Redemption
on the Specified Redemption Date, that either (a) the actual and constructive ownership of
REIT Shares or any other class of shares of the Previous General Partner by the Tendering
Party and any Related Party remain unchanged from that disclosed in the affidavit required
by Section 6(i)(a) or (b)) after giving effect to the Redemption, neither the Tendering
Party nor any Related Party shall own REIT Shares or other shares of the Previous General
Partner in violation of the Ownership Limit.



          (j) On or after the Specific Redemption Date, each holder of Preferred Units shall surrender
to the Partnership the certificate evidencing such holder’s Preferred Units, at the address to
which a Notice of Redemption is required to be sent. Upon such surrender of a certificate, the
Partnership shall thereupon pay the former holder thereof the applicable Cash Amount and/or deliver
REIT Shares for the Preferred Units evidenced thereby. From and after the Specific Redemption Date
(i) distributions with respect to the Preferred Units shall cease to accumulate, (ii) the Preferred
Units shall no longer be deemed outstanding, (iii) the holders thereof shall cease to be Partners
to the extent of their interest in such Preferred Units, and (iv) all rights whatsoever with
respect to the Preferred Units shall terminate, except the right of the holders of the Preferred
Units to receive Cash Amount and/or REIT Shares therefor, without interest or any sum of money in
lieu of interest thereon, upon surrender of their certificates therefor.




          (k) Notwithstanding the provisions of this Section 6, the Tendering Parties (i) shall not be
entitled to elect or effect a Redemption where the Redemption would consist of less than all the
Preferred Units held by Partners and, to the extent that the aggregate Percentage Interests of the
Limited Partners would be reduced, as a result of the Redemption, to less than one percent (1%) and
(ii) shall have no rights under the Agreement that would otherwise be prohibited under the Charter.
To the extent that any attempted Redemption would be in violation of this Section 6(k), it shall
be null and void ab initio, and the Tendering Party shall not acquire any rights or economic
interests in REIT Shares otherwise issuable by the Previous General Partner hereunder.




          (l) Notwithstanding any other provision of the Agreement, on and after the date on which the
aggregate Percentage Interests of the Limited Partners (other than the Special Limited Partner) are
less than one percent (1%), the Partnership shall have the right, but not the obligation, from time
to time and at any time to redeem any and all outstanding Limited Partner Interests (other than the
Special Limited Partner’s Limited Partner Interest) by treating any Limited Partner as a Tendering
Party who has delivered a Notice of Redemption pursuant to this Section 6 for the amount of
Preferred Units to be specified by the General Partner, in its sole and absolute discretion, by
notice to such Limited Partner that the Partnership has elected to exercise its rights under this
Section 6(l). Such notice given by the General Partner to a Limited Partner pursuant to this
Section 6(l) shall be treated as if it were a Notice of Redemption delivered to the General Partner
by such Limited Partner. For purposes of this Section 6(l), (a) any Limited Partner (whether or
not eligible to be a Tendering Party) may, in the General Partner’s sole and absolute discretion,
be treated as a Tendering Party and (b) the provisions of Sections 6(f)(1), 6(h)(2), 6(h)(3) and
6(h)(5) hereof shall not apply, but the remainder of this Section shall apply, mutatis mutandis.




     7. Status of Reacquired Units.



          All Preferred Units which shall have been issued and reacquired in any manner by the
Partnership shall be deemed cancelled and no longer outstanding.




     8. General.



          The ownership of the Preferred Units shall be evidenced by one or more certificates in the
form of Annex II hereto. The General Partner shall amend Exhibit A to the Agreement from time to
time to the extent




H-8









 







necessary to reflect accurately the issuance of, and subsequent redemption, or any other event
having an effect on the ownership of, the Class One Partnership Preferred Units.




     9. Allocations of Income and Loss.



          For each taxable year, (i) each holder of Preferred Units will be allocated net income of the
Partnership in an amount equal to the distributions made on such holder’s Preferred Units during
such taxable year, and (ii) each holder of Preferred Units will be allocated its pro rata share,
based on the portion of outstanding Preferred Units held by it, of any net loss of the Partnership
that is not allocated to holders of Partnership Common Units or other interests in the Partnership.
Upon liquidation, dissolution or winding up of the Partnership, the holders of Preferred Units
will be allocated income and gain sufficient to enable them to realize the Liquidation Preference
in full.




     10. Voting Rights.



          Except as otherwise required by applicable law or in the Agreement, the holders of the
Preferred Units will have the same voting rights as holders of the Partnership Common Units. So
long as any Preferred Units are outstanding, in addition to any other vote or consent of partners
required by law or by the Agreement, the affirmative vote or consent of holders of at least 50% of
the outstanding Preferred Units will be necessary for effecting any amendment of any of the
provisions of the Partnership Unit Designation of the Preferred Units that materially and adversely
affects the rights or preferences of the holders of the Preferred Units. The creation or issuance
of any class or series of Partnership units, including, without limitation, any Partnership units
that may have rights junior to, on a parity with, or senior or superior to the Preferred Units will
not be deemed to have a material adverse effect on the rights or preferences of the holders of
Preferred Units. The Partnership shall give the holders of the Preferred Units at least twenty-one
(21) days’ advance notice of the proposed issuance of any Senior Partnership Units. With respect
to the exercise of the above described voting rights, each Preferred Unit will have one (1) vote
per Preferred Unit.




     11. Restrictions on Transfer.



          Preferred Units are subject to the same restrictions on transfer applicable to Common Units,
as set forth in the Agreement.




H-9









 








ANNEX I

TO EXHIBIT H




NOTICE OF REDEMPTION




	 	 	 
	To:

	 	AIMCO Properties, L.P.
	 

	 	c/o AIMCO-GP, Inc.
	 

	 	4582 South Ulster Street Parkway
	 

	 	Suite 1100
	 

	 	Denver, Colorado 80237
	 

	 	Attention: Investor Relations






          The undersigned Limited Partner or Assignee hereby tenders for redemption Class One
Partnership Preferred Units in AIMCO Properties, L.P. in accordance with the terms of the Agreement
of Limited Partnership of AIMCO Properties, L.P., dated as of July 29, 1994, as it may be amended
and supplemented from time to time (the “Agreement”). All capitalized terms used herein and not
otherwise defined shall have the respective meanings ascribed thereto in the Partnership Unit
Designation of the Class One Partnership Preferred Units. The undersigned Limited Partner or
Assignee:





     (a) if the Partnership elects to redeem such Class One Partnership Preferred Units for
REIT Shares rather than cash, hereby irrevocably transfers, assigns, contributes and sets
over to the Previous General Partner all of the undersigned Limited Partner’s or Assignee’s
right, title and interest in and to such Class One Partnership Preferred Units;




     (b) undertakes (i) to surrender such Class One Partnership Preferred Units and any
certificate therefor at the closing of the Redemption contemplated hereby and (ii) to
furnish to the Previous General Partner, prior to the Specified Redemption Date:




     (1) A written affidavit, dated the same date as this Notice of Redemption, (a)
disclosing the actual and constructive ownership, as determined for purposes of Code
Sections 856(a)(6) and 856(h), of REIT Shares by (i) the undersigned Limited Partner
or Assignee and (ii) any Related Party and (b) representing that, after giving
effect to the Redemption, neither the undersigned Limited Partner or Assignee nor
any Related Party will own REIT Shares in excess of the Ownership Limit;




     (2) A written representation that neither the undersigned Limited Partner or
Assignee nor any Related Party has any intention to acquire any additional REIT
Shares prior to the closing of the Redemption contemplated hereby on the Specified
Redemption Date; and




     (3) An undertaking to certify, at and as a condition to the closing of the
Redemption contemplated hereby on the Specified Redemption Date, that either (a) the
actual and constructive ownership of REIT Shares by the undersigned Limited Partner
or Assignee and any Related Party remain unchanged from that disclosed in the
affidavit required by paragraph (1) above, or (b) after giving effect to the
Redemption contemplated hereby, neither the undersigned Limited Partner or Assignee
nor any Related Party shall own REIT Shares in violation of the Ownership Limit.




     (c) directs that the certificate representing the REIT Shares, or the certified check
representing the Cash Amount, in either case, deliverable upon the closing of the Redemption
contemplated hereby be delivered to the address specified below;




     (d) represents, warrants, certifies and agrees that:



H-I-1









 






     (i) the undersigned Limited Partner or Assignee has, and at the closing of the
Redemption will have, good, marketable and unencumbered title to such Preferred
Units, free and clear of the rights or interests of any other person or entity;




     (ii) the undersigned Limited Partner or Assignee has, and at the closing of the
Redemption will have, the full right, power and authority to tender and surrender
such Preferred Units as provided herein; and




     (iii) the undersigned Limited Partner or Assignee has obtained the consent or
approval of all persons and entities, if any, having the right to consent to or
approve such tender and surrender.



Dated: ______________________




	 	 	 	 	 
	 

	 	Name of Limited Partner or Assignee:
	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	(Signature of Limited Partner or Assignee)	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	(Street Address)	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	(City)           (State)           (Zip Code)	 	 






H-I-2









 






Issue check payable to
or Certificates in the
name of:______________________________________________




Please insert social security
or identifying number:______________________________________________




	 	 	 	 	 
	 

	 	Signature Guaranteed by:
	 	 
	 
	 	 	 	 
	 

	 	 	 	 




NOTICE: THE SIGNATURE OF THIS NOTICE OF REDEMPTION MUST CORRESPOND WITH THE NAME(S) AS WRITTEN
UPON THE FACE OF THE CERTIFICATE FOR THE CLASS ONE PREFERRED UNITS WHICH ARE BEING REDEEMED IN
EVERY PARTICULAR WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.



THE SIGNATURE SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION, (Banks, Stockbrokers,
Savings and Loan Associations and Credit Unions), WITH MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM PURSUANT TO SEC RULE 17Ad-15.




H-I-3









 








ANNEX II

TO EXHIBIT H




FORM OF UNIT CERTIFICATE

OF

CLASS ONE PARTNERSHIP PREFERRED UNITS



THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION, UNLESS THE TRANSFEROR DELIVERS TO THE PARTNERSHIP
AN OPINION OF COUNSEL SATISFACTORY TO THE PARTNERSHIP, IN FORM AND SUBSTANCE SATISFACTORY TO THE
PARTNERSHIP, TO THE EFFECT THAT THE PROPOSED SALE, TRANSFER OR OTHER DISPOSITION MAY BE EFFECTED
WITHOUT REGISTRATION UNDER THE ACT AND UNDER APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS. IN
ADDITION, THE LIMITED PARTNERSHIP INTEREST EVIDENCED BY THIS CERTIFICATE MAY BE SOLD OR OTHERWISE
TRANSFERRED ONLY IN COMPLIANCE WITH THE RESTRICTIONS ON TRANSFER SET FORTH IN THE AGREEMENT OF
LIMITED PARTNERSHIP OF AIMCO PROPERTIES, L.P., DATED AS OF JULY 29, 1994, AS IT MAY BE AMENDED
AND/OR SUPPLEMENTED FROM TIME TO TIME, A COPY OF WHICH MAY BE OBTAINED FROM AIMCO-GP, INC, THE
GENERAL PARTNER, AT ITS PRINCIPAL EXECUTIVE OFFICE.




Certificate Number ________




AIMCO PROPERTIES, L.P.

FORMED UNDER THE LAWS OF THE STATE OF DELAWARE




This certifies that ______________________________________________________________




is the owner of ________________________________________________________________




CLASS ONE PARTNERSHIP PREFERRED UNITS

OF

AIMCO PROPERTIES, L.P.,




     transferable on the books of the Partnership in person or by duly authorized attorney on the
surrender of this Certificate properly endorsed. This Certificate and the Class One Partnership
Preferred Units represented hereby are issued and shall be held subject to all of the provisions of
the Agreement of Limited Partnership of AIMCO Properties, L.P., as the same may be amended and/or
supplemented from time to time.



     IN WITNESS WHEREOF, the undersigned has signed this Certificate.



Dated:




By                                        




H-II-1









 








ASSIGNMENT




          For Value Received,                                          hereby sells, assigns and transfers unto
                                                                                 Cla
ss One Partnership Preferred Unit(s) represented by the within
Certificate, and does hereby irrevocably constitute and appoint the General Partner of AIMCO
Properties, L.P. as its Attorney to transfer said Class One Partnership Preferred Unit(s) on the
books of AIMCO Properties, L.P. with full power of substitution in the premises.




Dated: ________________




	 	 	 	 	 	 	 
	 

	 	By:
	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 
	 	 	 	 	 	 
	 	 	Signature Guaranteed by:	 	 
	 	 	 	 	 




NOTICE: THE SIGNATURE OF THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S) AS WRITTEN UPON THE FACE
OF THE CERTIFICATE IN EVERY PARTICULAR WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.



THE SIGNATURE SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION, (Banks, Stockbrokers,
Savings and Loan Associations and Credit Unions), WITH MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM PURSUANT TO SEC RULE 17Ad-15.




H-II-2









 








EXHIBIT I




PARTNERSHIP UNIT DESIGNATION OF

THE CLASS TWO PARTNERSHIP PREFERRED UNITS OF

AIMCO PROPERTIES, L.P.




     1. Number of Units and Designation.



          A class of Partnership Preferred Units is hereby designated as “Class Two Partnership
Preferred Units,” and the number of Partnership Preferred Units constituting such class shall be
Ten Million (10,000,000).




     2. Definitions.



          Capitalized terms used and not otherwise defined herein shall have the meanings assigned
thereto in the Agreement, as modified by this Partnership Unit Designation and the defined terms
used herein. For purposes of this Partnership Unit Designation, the following terms shall have the
respective meanings ascribed below:




          “Agreement” shall mean the Agreement of Limited Partnership of the Partnership, as amended,
supplemented or restated from time to time.




          “Assignee” shall mean a Person to whom one or more Preferred Units have been Transferred in a
manner permitted under the Agreement, but who has not become a Substituted Limited Partner, and who
has the rights set forth in Section 11.5 of the Agreement.




          “Cash Amount” shall mean, with respect to any Tendered Units, cash in an amount equal to the
product of (i) the number of Tendered Units, multiplied by (ii) the Liquidation Preference for a
Preferred Unit.




          “Class Two Partnership Preferred Unit” or “Preferred Unit” shall mean a Partnership Preferred
Unit with the designations, preferences and relative, participating, optional or other special
rights, powers and duties as are set forth in this Partnership Unit Designation.




          “Common Shares” shall mean the shares of Class A Common Stock of the Previous General Partner.




          “Common Shares Amount” shall mean, with respect to any Tendered Units, a number of Common
Shares equal to the quotient obtained by dividing (i) the Cash Amount for such Tendered Units, by
(ii) the Market Value of a Common Share calculated as of the date of receipt by the General Partner
of a Notice of Redemption for such Tendered Units.




          “Cut-Off Date” shall mean the fifth (5th) Business Day after the General Partner’s receipt of
a Notice of Redemption.




          “Declination” shall have the meaning set forth in Section 6(f) of this Partnership Unit
Designation.




          “Distribution Payment Date” shall have the meaning set forth in Section 4(a) of this
Partnership Unit Designation.




          “Junior Partnership Units” shall have the meaning set forth in Section 3(c) of this
Partnership Unit Designation.




          “Liquidation Preference” shall have the meaning set forth in Section 5(a) of this Partnership
Unit Designation.




I-1









 








          “Market Value” shall mean, as of any calculation date and with respect to any share of stock,
the average of the daily market prices for ten (10) consecutive trading days immediately preceding
the calculation date. The market price for any such trading day shall be:





     (i) if the shares are listed or admitted to trading on any securities exchange or The
Nasdaq Stock Market’s National Market System, the closing price, regular way, on such day,
or if no such sale takes place on such day, the average of the closing bid and asked prices
on such day, in either case as reported in the principal consolidated transaction reporting
system,




     (ii) if the shares are not listed or admitted to trading on any securities exchange or
The Nasdaq Stock Market’s National Market System, the last reported sale price on such day
or, if no sale takes place on such day, the average of the closing bid and asked prices on
such day, as reported by a reliable quotation source designated by the General Partner, or




     (iii) if the shares are not listed or admitted to trading on any securities exchange
or The Nasdaq Stock Market’s National Market System and no such last reported sale price or
closing bid and asked prices are available, the average of the reported high bid and low
asked prices on such day, as reported by a reliable quotation source designated by the
General Partner, or if there shall be no bid and asked prices on such day, the average of
the high bid and low asked prices, as so reported, on the most recent day (not more than ten
(10) days prior to the date in question) for which prices have been so reported;


provided, however, that, if there are no bid and asked prices reported during the ten (10) days
prior to the date in question, the Market Value of the shares shall be determined by the General
Partner acting in good faith on the basis of such quotations and other information as it considers,
in its reasonable judgment, appropriate; provided, further, that the General Partner is authorized
to adjust the market price for any trading day as may be necessary, in its judgment, to reflect an
event that occurs at any time after the commencement of such ten day period that would unfairly
distort the Market Value, including, without limitation, a stock dividend, split, subdivision,
reverse stock split, or share combination.




          “Notice of Redemption” shall mean a Notice of Redemption in the form of Annex I to this
Partnership Unit Designation.




          “Parity Partnership Units” shall have the meaning set forth in Section 3(b) of this
Partnership Unit Designation.




          “Partnership” shall mean AIMCO Properties, L.P., a Delaware limited partnership.




          “Preferred Shares” shall mean shares of the Class I Cumulative Preferred Stock of the Previous
General Partner.




          “Primary Offering Notice” shall have the meaning set forth in Section 6(h)(4) of this
Partnership Unit Designation.




          “Public Offering Funding” shall have the meaning set forth in Section 6(f)(2) of this
Partnership Unit Designation.




          “Redemption” shall have the meaning set forth in Section 6(b) of this Partnership Unit
Designation.




          “Registrable Shares” shall have the meaning set forth in Section 6(f)(2) of this Partnership
Unit Designation.




          “Senior Partnership Units” shall have the meaning set forth in Section 3(a) of this
Partnership Unit Designation.




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          “Single Funding Notice” shall have the meaning set forth in Section 6(f)(3) of this
Partnership Unit Designation.




          “Specified Redemption Date” shall mean, with respect to any Redemption, the later of (a) the
tenth (10th) Business Day after the receipt by the General Partner of a Notice of Redemption or (b)
in the case of a Declination followed by a Public Offering Funding, the Business Day next following
the date of the closing of the Public Offering Funding; provided, however, that the Specified
Redemption Date, as well as the closing of a Redemption, or an acquisition of Tendered Units by the
Previous General Partner pursuant to Section 5 hereof, on any Specified Redemption Date, may be
deferred, in the General Partner’s sole and absolute discretion, for such time (but in any event
not more than one hundred fifty (150) days in the aggregate) as may reasonably be required to
effect, as applicable, (i) a Public Offering Funding or other necessary funding arrangements, (ii)
compliance with the Securities Act or other law (including, but not limited to, (a) state “blue
sky” or other securities laws and (b) the expiration or termination of the applicable waiting
period, if any, under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended) and
(iii) satisfaction or waiver of other commercially reasonable and customary closing conditions and
requirements for a transaction of such nature.




          “Tendering Party” shall have the meaning set forth in Section 6(b) hereof.




          “Tendered Units” shall have the meaning set forth in Section 6(b) hereof.




     3. Ranking.



          Any class or series of Partnership Units of the Partnership shall be deemed to rank:




          (a) prior or senior to the Class Two Partnership Preferred Units, as to the payment of
distributions and as to the distribution of assets upon liquidation, dissolution or winding up, if
the holders of such class or series shall be entitled to the receipt of distributions and of
amounts distributable upon liquidation, dissolution or winding up, as the case may be, in
preference or priority to the holders of Class Two Partnership Preferred Units (the Partnership
Units referred to in this paragraph being hereinafter referred to, collectively, as “Senior
Partnership Units”);




          (b) on a parity with the Class Two Partnership Preferred Units, as to the payment of
distributions and as to distribution of assets upon liquidation, dissolution or winding up, whether
or not the distribution rates, distribution payment dates or redemption or liquidation prices per
unit or other denomination thereof be different from those of the Class Two Partnership Preferred
Units if (i) such class or series of Partnership Units shall be Class G Partnership Preferred Units
or Class One Partnership Preferred Units or (ii) the holders of such class or series of Partnership
Units and the Class Two Partnership Preferred Units shall be entitled to the receipt of
distributions and of amounts distributable upon liquidation, dissolution or winding up in
proportion to their respective amounts of accrued and unpaid distributions per unit or other
denomination or liquidation preferences, without preference or priority one over the other (the
Partnership Units referred to in clauses (i) and (ii) of this paragraph being hereinafter referred
to, collectively, as “Parity Partnership Units”); and




     (c) junior to the Class Two Partnership Preferred Units, as to the payment of distributions
and as to the distribution of assets upon liquidation, dissolution or winding up, if (i) such class
or series of Partnership Units shall be Partnership Common Units or Class I High Performance
Partnership Units or (ii) t
he holders of Class Two Partnership Preferred Units shall be entitled to
receipt of distributions or of amounts distributable upon liquidation, dissolution or winding up,
as the case may be, in preference or priority to the holders of such class or series of Partnership
Units (the Partnership Units referred to in clauses (i) and (ii) of this paragraph being
hereinafter referred to, collectively, as “Junior Partnership Units”).



     4. Quarterly Cash Distributions.



          (a) Holders of Preferred Units will be entitled to receive, when and as declared by the
General Partner, quarterly cash distributions at the rate of $0.50 per Preferred Unit; provided,
however, that at any time and from time to time on or after March 1, 2005, the Partnership may
adjust the quarterly cash distribution rate




I-3









 







on the Preferred Units to equal 25% of the lower of (i) two percent (2%) plus the annual
interest rate then applicable to U.S. Treasury notes with a maturity of five years and (ii) the
annual dividend rate on the class or series of preferred stock most recently issued by the Previous
General Partner that (x) is not convertible into another security of the Previous General Partner
at the option of the holder and (y) ranks on a parity with its Class H Cumulative Preferred Stock.
Such adjustment shall become effective upon the date the Partnership issues a notice to such effect
to the holders of the Preferred Units. Any such distributions will be cumulative from the date of
original issue, whether or not in any distribution period or periods such distributions have been
declared, and shall be payable quarterly on February 15, May 15, August 15 and November 15 of each
year (or, if not a Business Day, the next succeeding Business Day) (each a “Distribution Payment
Date”), commencing on the first such date occurring after the date of original issue. If the
Preferred Units are issued on any day other than a Distribution Payment Date, the first
distribution payable on such Preferred Units will be prorated for the portion of the quarterly
period that such Preferred Units are outstanding on the basis of twelve 30-day months and a 360-day
year. Distributions will be payable in arrears to holders of record as they appear on the records
of the Partnership at the close of business on the February 1, May 1, August 1 or November 1, as
the case may be, immediately preceding each Distribution Payment Date. Holders of Preferred Units
will not be entitled to receive any distributions in excess of cumulative distributions on the
Preferred Units. No interest, or sum of money in lieu of interest, shall be payable in respect of
any distribution payment or payments on the Preferred Units that may be in arrears. Holders of any
Preferred Units that are issued after the date of original issuance will be entitled to receive the
same distributions as holders of any Preferred Units issued on the date of original issuance.




          (b) When distributions are not paid in full upon the Preferred Units or any Parity Partnership
Units, or a sum sufficient for such payment is not set apart, all distributions declared upon the
Preferred Units and any Parity Partnership Units shall be declared ratably in proportion to the
respective amounts of distributions accumulated and unpaid on the Preferred Units and accumulated
and unpaid on such Parity Partnership Units. Except as set forth in the preceding sentence, unless
distributions on the Preferred Units equal to the full amount of accumulated and unpaid
distributions have been or contemporaneously are declared and paid, or declared and a sum
sufficient for the payment thereof has been or contemporaneously is set apart for such payment, for
all past distribution periods, no distributions shall be declared or paid or set apart for payment
by the Partnership with respect to any Parity Partnership Units.




          (c) Unless full cumulative distributions (including all accumulated, accrued and unpaid
distributions) on the Preferred Units have been declared and paid, or declared and set apart for
payment, for all past distribution periods, no distributions (other than distributions paid in
Junior Partnership Units or options, warrants or rights to subscribe for or purchase Junior
Partnership Units) may be declared or paid or set apart for payment by the Partnership and no other
distribution of cash or other property may be declared or made, directly or indirectly, by the
Partnership with respect to any Junior Partnership Units, nor shall any Junior Partnership Units be
redeemed, purchased or otherwise acquired (except for a redemption, purchase or other acquisition
of Partnership Common Units made for purposes of an employee incentive or benefit plan of the
Partnership or any affiliate thereof, including, without limitation, the Previous General Partner
and its affiliates) for any consideration (or any monies be paid to or made available for a sinking
fund for the redemption of any such Junior Partnership Units), directly or indirectly, by the
Partnership (except by conversion into or exchange for Junior Partnership Units, or options,
warrants or rights to subscribe for or purchase Junior Partnership Units), nor shall any other cash
or other property be paid or distributed to or for the benefit of holders of Junior Partnership
Units.




          (d) Notwithstanding the foregoing provisions of this Section 4, the Partnership shall not be
prohibited from (i) declaring or paying or setting apart for payment any distribution on any Parity
Partnership Units or (ii) redeeming, purchasing or otherwise acquiring any Parity Partnership
Units, in each case, if such declaration, payment, redemption, purchase or other acquisition is
necessary to maintain the Previous General Partner’s qualification as a REIT.




     5. Liquidation Preference.



          (a) Upon any voluntary or involuntary liquidation, dissolution or winding up of the
Partnership, before any allocation of income or gain by the Partnership shall be made to or set
apart for the holders of any Junior Partnership Units, to the extent possible, the holders of
Preferred Units shall be entitled to be allocated income and gain to effectively enable them to
receive a liquidation preference (the “Liquidation Preference”) of (i)




I-4









 







$25 per Preferred Unit, plus (ii) accumulated, accrued and unpaid distributions (whether or
not earned or declared) to the date of final distribution to such holders; but such holders shall
not be entitled to any further payment or allocation. Until all holders of the Preferred Units
have been paid the Liquidation Preference in full, no allocation of income or gain will be made to
any holder of Junior Units upon the liquidation, dissolution or winding up of the Partnership.




          (b) If, upon any liquidation, dissolution or winding up of the Partnership, the assets of the
Partnership, or proceeds thereof, distributable among the holders of Preferred Partnership Units
shall be insufficient to pay in full the Liquidation Preference and liquidating payments on any
Parity Partnership Units, then following certain allocations made by the Partnership, such assets,
or the proceeds thereof, shall be distributed among the holders of Preferred Units and any such
Parity Partnership Units ratably in the same proportion as the respective amounts that would be
payable on such Preferred Units and any such Parity Partnership Units if all amounts payable
thereon were paid in full.




          (c) A voluntary or involuntary liquidation, dissolution or winding up of the Partnership will
not include a consolidation or merger of the Partnership with one or more partnerships,
corporations or other entities, or a sale or transfer of all or substantially all of the
Partnership’s assets.




          (d) Upon any liquidation, dissolution or winding up of the Partnership, after all allocations
shall have been made in full to the holders of Preferred Units and any Parity Partnership Units to
enable them to receive their respective liquidation preferences, any Junior Partnership Units shall
be entitled to receive any and all assets remaining to be paid or distributed, and the holders of
the Preferred Units and any Parity Partnership Units shall not be entitled to share therein.




     6. Redemption.



          (a) Except as set forth in Section 6(l) hereof, the Preferred Units may not be redeemed at the
option of the Partnership, and will not be required to be redeemed or repurchased by the
Partnership or the Previous General Partner except if a holder of a Preferred Unit effects a
Redemption, as provided for in Section 6(b) hereof. The Partnership or the Previous General
Partner may purchase Preferred Units from time to time in the open market, by tender or exchange
offer, in privately negotiated purchases or otherwise.




          (b) On or after the first (1st) anniversary of becoming a holder of Preferred Units, a
Qualifying Party shall have the right (subject to the terms and conditions set forth herein) to
require the Partnership to redeem all or a portion of the Preferred Units held by such Qualifying
Party (any Preferred Units tendered for Redemption being hereafter “Tendered Units”) in exchange (a
“Redemption”) for Common Shares or Preferred Shares issuable on, or the Cash Amount payable on, the
Specified Redemption Date, as determined by the Partnership in its sole discretion. Any Redemption
shall be exercised pursuant to a Notice of Redemption delivered to the General Partner by the
Qualifying Party when exercising the Redemption right (the “Tendering Party”).




          (c) If the Partnership elects to redeem Tendered Units for Common Shares or Preferred Shares rather
than cash, then the Partnership shall direct the Previous General Partner to issue and deliver such
Common Shares or Preferred Shares to the Tendering Party pursuant to the terms set forth in this
Section 6, in which case, (i) the Previous General Partner, acting as a distinct legal entity,
shall assume directly the obligation with respect thereto and shall satisfy the Tendering Party’s
exercise of its Redemption right, and (ii) such transaction shall be treated, for federal income
tax purposes, as a transfer by the Tendering Party of such Tendered Units to the Previous General
Partner in exchange for Common Shares or Preferred Shares. In making such election to cause the
Previous General Partner to acquire Tendered Units, the Partnership shall act in a fair, equitable
and reasonable manner that neither prefers one group or class of Tendering Parties over another nor
discriminates against a group or class of Tendering Parties. If the Partnership elects to redeem
any number of Tendered Units for Common Shares or Preferred Shares, rather than cash, on the
Specified Redemption Date, the Tendering Party shall sell such number of the Tendered Units to the
Previous General Partner in exchange for (i) a number of Common Shares equal to the Common Shares
Amount for such number of Tendered Units, (ii) if (x) the Notice of Redemption for such Tendered
Units is received by the General Partner after the second (2nd) anniversary of the Tendering Party
becoming a holder of such Preferred Units and (y) the Preferred Shares are then listed on the New
York Stock Exchange or another national securities exchange, a number of Preferred Shares equal to
such number of Tendered Units, or (iii)





I-5










 




any combination of (i) and (ii). The Tendering Party shall submit (i) such information,
certification or affidavit as the Previous General Partner may reasonably require in connection
with the application of the Ownership Limit and other restrictions and limitations of the Charter
to any such acquisition and (ii) such written representations, investment letters, legal opinions
or other instruments necessary, in the Previous General Partner’s view, to effect compliance with
the Securities Act. The Common Shares or Preferred Shares shall be delivered by the Previous
General Partner as duly authorized, validly issued, fully paid and non-assessable shares, free of
any pledge, lien, encumbrance or restriction other than the Ownership Limit and other restrictions
provided in the Charter, the Bylaws of the Previous General Partner, the Securities Act and
relevant state securities or “blue sky” laws. Neither any Tendering Party whose Tendered Units are
acquired by the Previous General Partner pursuant to this Section 6, any Partner, any Assignee nor
any other interested Person shall have any right to require or cause the Previous General Partner
or the General Partner to register, qualify or list any REIT Shares owned or held by such Person,
whether or not such Common Shares or Preferred Shares are issued pursuant to this Section 6, with
the SEC, with any state securities commissioner, department or agency, under the Securities Act or
the Exchange Act or with any stock exchange; provided, however, that this limitation shall not be
in derogation of any registration or similar rights granted pursuant to any other written agreement
between the Previous General Partner and any such Person. Notwithstanding any delay in such
delivery, the Tendering Party shall be deemed the owner of such Common Shares or Preferred Shares
for all purposes, including, without limitation, rights to vote or consent, receive dividends, and
exercise rights, as of the Specified Redemption Date. Common Shares or Preferred Shares issued
upon an acquisition of the Tendered Units by the Previous General Partner pursuant to this Section
6 may contain such legends regarding restrictions under the Securities Act and applicable state
securities laws as the Previous General Partner in good faith determines to be necessary or
advisable in order to ensure compliance with such laws.




          (d) The Partnership shall have no obligation to effect any redemption unless and until a
Tendering Party has given the Partnership a Notice of Redemption. Each Notice of Redemption shall
be sent by hand delivery or by first class mail, postage prepaid, to AIMCO Properties, L.P., c/o
AIMCO-GP, Inc., 4582 South Ulster Street Parkway, Suite 1100, Denver, Colorado 80237, Attention:
Investor Relations, or to such other address as the Partnership shall specify in writing by
delivery to the holders of the Preferred Units in the same manner as that set forth above for
delivery of the Notice of Redemption. At any time prior to the Specified Redemption Date for any
Redemption, any holder may revoke its Notice of Redemption.




          (e) A Tendering Party shall have no right to receive distributions with respect to any
Tendered Units (other than the Cash Amount) paid after delivery of the Notice of Redemption,
whether or not the record date for such distribution precedes or coincides with such delivery of
the Notice of Redemption. If the Partnership elects to redeem any number of Tendered Units for
cash, the Cash Amount for such number of Tendered Units shall be delivered as a certified check
payable to the Tendering Party or, in the General Partner’s sole and absolute discretion, in
immediately available funds.




          (f) In the event that the Partnership declines to cause the Previous General Partner to
acquire all of the Tendered Units from the Tendering Party in exchange for Common Shares or
Preferred Shares pursuant to this Section 6 following receipt of a Notice of Redemption (a
“Declination”):





          (1) The Previous General Partner or the General Partner shall give notice of such
Declination to the Tendering Party on or before the close of business on the Cut-Off Date.




          (2) The Partnership may elect to raise funds for the payment of the Cash Amount either
(a) by requiring that the Previous General Partner contribute such funds from the proceeds
of a registered public offering (a “Public Offering Funding”) by the Previous General
Partner of a number of Common Shares or Preferred Shares (“Registrable Shares”) equal to the
Common Shares or Preferred Shares Amount with respect to the Tendered Units or (b) from any
other sources (including, but not limited to, the sale of any Property and the incurrence of
additional Debt) available to the Partnership.




          (3) Promptly upon the General Partner’s receipt of the Notice of Redemption and the
Previous General Partner or the General Partner giving notice of the Partnership’s
Declination, the General Partner shall give notice (a “Single Funding Notice”) to all
Qualifying Parties then holding Preferred Units and having Redemption rights pursuant to
this Section 6 and require that all such Qualifying Parties elect
whether or not to effect a Redemption of their Preferred Units to be funded through
such Public Offering



I-6









 






Funding. In the event that any such Qualifying Party elects to effect
such a Redemption, it shall give notice thereof and of the number of Preferred Units to be
made subject thereon in writing to the General Partner within ten (10) Business Days after
receipt of the Single Funding Notice, and such Qualifying Party shall be treated as a
Tendering Party for all purposes of this Section 6. In the event that a Qualifying Party
does not so elect, it shall be deemed to have waived its right to effect a Redemption for
the next twelve months; provided, however, that the Previous General Partner shall not be
required to acquire Preferred Units pursuant to this Section 6(f) more than twice within any
twelve-month period.


Any proceeds from a Public Offering Funding that are in excess of the Cash Amount shall be for the
sole benefit of the Previous General Partner and/or the General Partner. The General Partner
and/or the Special Limited Partner shall make a Capital Contribution of such amounts to the
Partnership for an additional General Partner Interest and/or Limited Partner Interest. Any such
contribution shall entitle the General Partner and the Special Limited Partner, as the case may be,
to an equitable Percentage Interest adjustment.




          (g) Notwithstanding the provisions of this Section 6, the Previous General Partner shall not,
under any circumstances, elect to acquire Tendered Units in exchange for the Common Shares or
Preferred Shares if such exchange would be prohibited under the Charter.




          (h) Notwithstanding anything herein to the contrary, with respect to any Redemption pursuant
to this Section 6:





          (1) All Preferred Units acquired by the Previous General Partner pursuant to this
Section 6 hereof shall be contributed by the Previous General Partner to either or both of
the General Partner and the Special Limited Partner in such proportions as the Previous
General Partner, the General Partner and the Special Limited Partner shall determine.




          (2) Subject to the Ownership Limit, no Tendering Party may effect a Redemption for less
than five hundred (500) Preferred Units or, if such Tendering Party holds (as a Limited
Partner or, economically, as an Assignee) less than five hundred (500) Preferred Units, all
of the Preferred Units held by such Tendering Party.




          (3) Each Tendering Party (a) may effect a Redemption only once in each fiscal quarter
of a Twelve-Month Period and (b) may not effect a Redemption during the period after the
Partnership Record Date with respect to a distribution and before the record date
established by the Previous General Partner for a distribution to its shareholders of some
or all of its portion of such Partnership distribution.




          (4) Notwithstanding anything herein to the contrary, with respect to any Redemption
or acquisition of Tendered Units by the Previous General Partner pursuant to this Section 6,
in the event that the Previous General Partner or the General Partner gives notice to all
Limited Partners (but excluding any Assignees) then owning Partnership Interests (a
“Primary Offering Notice”) that the Previous General Partner desires to effect a primary
offering of its equity securities then, unless the Previous General Partner and the General
Partner otherwise consent, commencement of the actions denoted in Section 6(f) hereof as to
a Public Offering Funding with respect to any Notice of Redemption thereafter received,
whether or not the Tendering Party is a Limited Partner, may be delayed until the earlier of
(a) the completion of the primary offering or (b) ninety (90) days following the giving of
the Primary Offering Notice.




          (5) Without the Consent of the Previous General Partner, no Tendering Party may effect
a Redemption within ninety (90) days following the closing of any prior Public Offering
Funding.




          (6) The consummation of such Redemption shall be subject to the expiration or
termination of the applicable waiting period, if any, under the Hart- Scott-Rodino Antitrust
Improvements Act of 1976, as amended.



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          (7) The Tendering Party shall continue to own (subject, in the case of an Assignee, to
the provision of Section 11.5 of the Agreement) all Preferred Units subject to any
Redemption, and be treated as a Limited Partner or an Assignee, as applicable, with respect
to such Preferred Units for all purposes of the Agreement, until such Preferred Units are
either paid for by the Partnership pursuant to this Section 6 or transferred to the Previous
General Partner (or directly to the General Partner or Special Limited Partner) and paid
for, by the issuance of the REIT Shares, pursuant to this Section 6 on the Specified
Redemption Date. Until a Specified Redemption Date and an acquisition of the Tendered Units
by the Previous General Partner pursuant to this Section 6, the Tendering Party shall have
no rights as a shareholder of the Previous General Partner with respect to the REIT Shares
issuable in connection with such acquisition.


For purposes of determining compliance with the restrictions set forth in this Section 6(h), all
Partnership Common Units and Partnership Preferred Units, including Preferred Units, beneficially
owned by a Related Party of a Tendering Party shall be considered to be owned or held by such
Tendering Party.




          (i) In connection with an exercise of Redemption rights pursuant to this Section 6, the
Tendering Party shall submit the following to the General Partner, in addition to the Notice of
Redemption:





          (1) A written affidavit, dated the same date as the Notice of Redemption, (a)
disclosing the actual and constructive ownership, as determined for purposes of Code
Sections 856(a)(6) and 856(h), of Common Shares or Preferred Shares and any other classes or
            shares of the Previous General Partner by (i) such Tendering Party and (ii) any Related
Party and (b) representing that, after giving effect to the Redemption, neither the
Tendering Party nor any Related Party will own Common Shares or Preferred Shares in excess
of the Ownership Limit;




          (2) A written representation that neither the Tendering Party nor any Related Party has
any intention to acquire any additional Common Shares, Preferred Shares or any other class
of shares of the Previous General Partner prior to the closing of the Redemption on the
Specified Redemption Date; and




          (3) An undertaking to certify, at and as a condition to the closing of the Redemption
on the Specified Redemption Date, that either (a) the actual and constructive ownership of
Common Shares or Preferred Shares or any other class of shares of the Previous General
Partner by the Tendering Party and any Related Party remain unchanged from that disclosed in
the affidavit required by Section 6(i)(a) or (b)) after giving effect to the Redemption,
neither the Tendering Party nor any Related Party shall own Common Shares or Preferred
Shares or other shares of the Previous General Partner in violation of the Ownership Limit.



          (j) On or after the Specific Redemption Date, each holder of Preferred Units shall surrender
to the Partnership the certificate evidencing such holder’s Preferred Units, at the address to
which a Notice of Redemption is required to be sent. Upon such surrender of a certificate, the
Partnership shall thereupon pay the former holder thereof the applicable Cash Amount and/or deliver
Common Shares or Preferred Shares for the Preferred Units evidenced thereby. From and after the
Specific Redemption Date (i) distributions with respect to the Preferred Units shall cease to
accumulate, (ii) the Preferred Units shall no longer be deemed outstanding, (iii) the holders
thereof shall cease to be Partners to the extent of their interest in such Preferred Units, and
(iv) all rights whatsoever with respect to the Preferred Units shall terminate, except the right of
the holders of the Preferred Units to receive Cash Amount and/or Common Shares or Preferred Shares
therefor, without interest or any sum of money in lieu of interest thereon, upon surrender of their
certificates therefor.




          (k) Notwithstanding the provisions of this Section 6, the Tendering Parties (i) shall not be
entitled to elect or effect a Redemption where the Redemption would consist of less than all the
Preferred Units held by Partners and, to the extent that the aggregate Percentage Interests of the
Limited Partners would be reduced, as a result of the Redemption, to less than one percent (1%) and
(ii) shall have no rights under the Agreement that would otherwise be prohibited under the Charter.
To the extent that any attempted Redemption would be in violation of this Section 6(k), it shall
be null and void ab initio, and the Tendering Party shall not acquire any rights or economic
interests in Common Shares or Preferred Shares otherwise issuable by the Previous General Partner
hereunder.




I-8









 








          (l) Notwithstanding any other provision of the Agreement, on and after the date on which the
aggregate Percentage Interests of the Limited Partners (other than the Special Limited Partner) are
less than one percent (1%), the Partnership shall have the right, but not the obligation, from time
to time and at any time to redeem any and all outstanding Limited Partner Interests (other than the
Special Limited Partner’s Limited Partner Interest) by treating any Limited Partner as a Tendering
Party who has delivered a Notice of Redemption pursuant to this Section 6 for the amount of
Preferred Units to be specified by the General Partner, in its sole and absolute discretion, by
notice to such Limited Partner that the Partnership has elected to exercise its rights under this
Section 6(l). Such notice given by the General Partner to a Limited Partner pursuant to this
Section 6(l) shall be treated as if it were a Notice of Redemption delivered to the General Partner
by such Limited Partner. For purposes of this Section 6(l), (a) any Limited Partner (whether or
not eligible to be a Tendering Party) may, in the General Partner’s sole and absolute discretion,
be treated as a Tendering Party and (b) the provisions of Sections 6(f)(1), 6(h)(2), 6(h)(3) and
6(h)(5) hereof shall not apply, but the remainder of this Section shall apply, mutatis mutandis.




     7. Status of Reacquired Units.



          All Preferred Units which shall have been issued and reacquired in any manner by the
Partnership shall be deemed cancelled and no longer outstanding.




     8. General.



          The ownership of the Preferred Units shall be evidenced by one or more certificates in the
form of Annex II hereto. The General Partner shall amend Exhibit A to the Agreement from time to
time to the extent necessary to reflect accurately the issuance of, and subsequent redemption, or
any other event having an effect on the ownership of, the Preferred Units.




     9. Allocations of Income and Loss.



          For each taxable year, (i) each holder of Preferred Units will be allocated net income of the
Partnership in an amount equal to the distributions made on such holder’s Preferred Units during
such taxable year, and (ii) each holder of Preferred Units will be allocated its pro rata share,
based on the portion of outstanding Preferred Units held by it, of any net loss of the Partnership
that is not allocated to holders of Partnership Common Units or other interests in the Partnership.
Upon liquidation, dissolution or winding up of the Partnership, the holders of Preferred Units
will be allocated income and gain sufficient to enable them to realize the Liquidation Preference
in full.




     10. Voting Rights.



          Except as otherwise required by applicable law or in the Agreement, the holders of the
Preferred Units will have the same voting rights as holders of the Partnership Common Units. As
long as any Preferred Units are outstanding, in addition to any other vote or consent of partners
required by law or by the Agreement, the affirmative vote or consent of holders of at least 50% of
the outstanding Preferred Units will be necessary for effecting any amendment of any of the
provisions of the Partnership Unit Designation of the Preferred Units that materially and adversely
affects the rights or preferences of the holders of the Preferred Units. The creation or issuance
of any class or series of Partnership Units, including, without limitation, any Partnership Units
that may have rights junior to, on a parity with, or senior or superior to the Preferred Units,
will not be deemed to have a material adverse effect on the rights or preferences of the holders of
Preferred Units. With respect to the exercise of the above-described voting rights, each Preferred
Unit will have one (1) vote per Preferred Unit.




     11. Restrictions on Transfer.



          Preferred Units are subject to the same restrictions on transfer applicable to Common Units,
as set forth in the Agreement.





I-9









 








ANNEX I

TO EXHIBIT I




NOTICE OF REDEMPTION




	 	 	 
	To:

	 	AIMCO Properties, L.P.
	 

	 	c/o AIMCO-GP, Inc.
	 

	 	4582 South Ulster Street Parkway
	 

	 	Suite 1100
	 

	 	Denver, Colorado 80237
	 

	 	Attention: Investor Relations






          The undersigned Limited Partner or Assignee hereby tenders for redemption Class Two
Partnership Preferred Units in AIMCO Properties, L.P. in accordance with the terms of the Agreement
of Limited Partnership of AIMCO Properties, L.P., dated as of July 29, 1994, as it may be amended
and supplemented from time to time (the “Agreement”). All capitalized terms used herein
and not otherwise defined shall have the respective meanings ascribed thereto in the Partnership
Unit Designation of the Class Two Partnership Preferred Units. The undersigned Limited Partner or
Assignee:




          (a) if the Partnership elects to redeem such Class Two Partnership Preferred Units for Common
Shares or Preferred Shares rather than cash, hereby irrevocably transfers, assigns, contributes and
sets over to the Previous General Partner all of the undersigned Limited Partner’s or Assignee’s
right, title and interest in and to such Class Two Partnership Preferred Units;




          (b) undertakes (i) to surrender such Class Two Partnership Preferred Units and any
certificate therefor at the closing of the Redemption contemplated hereby and (ii) to furnish to
the Previous General Partner, prior to the Specified Redemption Date:





          (1) A written affidavit, dated the same date as this Notice of Redemption, (a)
disclosing the actual and constructive ownership, as determined for purposes of Code
Sections 856(a)(6) and 856(h), of Common Shares or Preferred Shares by (i) the undersigned
Limited Partner or Assignee and (ii) any Related Party and (b) representing that, after
giving effect to the Redemption, neither the undersigned Limited Partner or Assignee nor any
Related Party will own Common Shares or Preferred Shares in excess of the Ownership Limit;




          (2) A written representation that neither the undersigned Limited Partner or Assignee
nor any Related Party has any intention to acquire any additional Common Shares or Preferred
Shares prior to the closing of the Redemption contemplated hereby on the Specified
Redemption Date; and




          (3) An undertaking to certify, at and as a condition to the closing of the Redemption
contemplated hereby on the Specified Redemption Date, that either (a) the actual and
constructive ownership of Common Shares or Preferred Shares by the undersigned Limited
Partner or Assignee and any Related Party remain unchanged from that disclosed in the
affidavit required by paragraph (1) above, or (b) after giving effect to the Redemption
contemplated hereby, neither the undersigned Limited Partner or Assignee nor any Related
Party shall own Common Shares or Preferred Shares in violation of the Ownership Limit.



          (c) directs that the certificate representing the Common Shares or Preferred Shares, or the
certified check representing the Cash Amount, in either case, deliverable upon the closing of the
Redemption contemplated hereby be delivered to the address specified below;




          (d) represents, warrants, certifies and agrees that:





          (i) the undersigned Limited Partner or Assignee has, and at the closing of the
Redemption will have, good, marketable and unencumbered title to such Preferred Units, free
and clear of the rights or interests of any other person or entity;



I-I-1









 






          (ii) the undersigned Limited Partner or Assignee has, and at the closing of the
Redemption will have, the full right, power and authority to tender and surrender such
Preferred Units as provided herein; and




          (iii) the undersigned Limited Partner or Assignee has obtained the consent or approval
of all persons and entities, if any, having the right to consent to or approve such tender
and surrender.



Dated:                                         




	 	 	 
	 

	 	Name of Limited Partner or Assignee:
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 

	 	(Signature of Limited Partner or Assignee)
	 
	 	 
	 

	 	 
	 

	 	(Street Address)
	 
	 	 
	 

	 	 
	 

	 	(City)      (State)      (Zip Code)
	 
	 	 
	 

	 	Signature Guaranteed by:
	 
	 	 
	 

	 	 




(continued on next page)




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Issue check payable to
or Certificates in the
name of:                                        



Please insert social security
or identifying number:                                                            



NOTICE: THE SIGNATURE OF THIS NOTICE OF REDEMPTION MUST CORRESPOND WITH THE NAME(S) AS WRITTEN
UPON THE FACE OF THE CERTIFICATE FOR THE CLASS TWO PREFERRED UNITS WHICH ARE BEING REDEEMED IN
EVERY PARTICULAR WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.



THE SIGNATURE SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION, (Banks, Stockbrokers,
Savings and Loan Associations and Credit Unions), WITH MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM PURSUANT TO SEC RULE 17Ad-15.





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ANNEX II

TO EXHIBIT I




FORM OF UNIT CERTIFICATE

OF

CLASS TWO PARTNERSHIP PREFERRED UNITS



[THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION, UNLESS THE TRANSFEROR DELIVERS TO THE PARTNERSHIP
AN OPINION OF COUNSEL SATISFACTORY TO THE PARTNERSHIP, IN FORM AND SUBSTANCE SATISFACTORY TO THE
PARTNERSHIP, TO THE EFFECT THAT THE PROPOSED SALE, TRANSFER OR OTHER DISPOSITION MAY BE EFFECTED
WITHOUT REGISTRATION UNDER THE ACT AND UNDER APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS. IN
ADDITION,]1 THE LIMITED PARTNERSHIP INTEREST EVIDENCED BY THIS CERTIFICATE MAY BE SOLD
OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE RESTRICTIONS ON TRANSFER SET FORTH IN THE
AGREEMENT OF LIMITED PARTNERSHIP OF AIMCO PROPERTIES, L.P., DATED AS OF JULY 29, 1994, AS IT MAY BE
AMENDED AND/OR SUPPLEMENTED FROM TIME TO TIME, A COPY OF WHICH MAY BE OBTAINED FROM AIMCO- GP,
INC, THE GENERAL PARTNER, AT ITS PRINCIPAL EXECUTIVE OFFICE.




Certificate Number                     




AIMCO PROPERTIES, L.P.

FORMED UNDER THE LAWS OF THE STATE OF DELAWARE




	 	 	 	 	 
	This certifies that

	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	is the owner of

	 	 	 	 
	 

	 	 	 	 





CLASS TWO PARTNERSHIP PREFERRED UNITS

OF

AIMCO PROPERTIES, L.P.,



transferable on the books of the Partnership in person or by duly authorized attorney on the
surrender of this Certificate properly endorsed. This Certificate and the Class Two Partnership
Preferred Units represented hereby are issued and shall be held subject to all of the provisions of
the Agreement of Limited Partnership of AIMCO Properties, L.P., as the same may be amended and/or
supplemented from time to time.



IN WITNESS WHEREOF, the undersigned has signed this Certificate.



Dated:




	 	 	 	 	 
	 

	 	By	 	 
	 

	 	 	 	 







 




			
	1	 	Not required if Units are issued pursuant to
a current and effective registration statement under the Act.




I-II-1









 










ASSIGNMENT




     For Value Received,                                                             hereby sells, assigns
and transfers
unto                                                                                
                                        
Class Two Partnership Preferred Unit(s) represented by the within
Certificate, and does hereby irrevocably constitute and appoint the General Partner of AIMCO
Properties, L.P. as its Attorney to transfer said Class Two Partnership Preferred Unit(s) on the
books of AIMCO Properties, L.P. with full power of substitution in the premises.



Dated:                                         




	 	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	Name:
	 
	 	 	 	 
	 	 	Signature Guaranteed by:
	 
	 	 	 	 
	 	 	 




NOTICE: THE SIGNATURE OF THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S) AS WRITTEN UPON THE FACE
OF THE CERTIFICATE IN EVERY PARTICULAR WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.

THE SIGNATURE SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION, (Banks, Stockbrokers,
Savings and Loan Associations and Credit Unions), WITH MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM PURSUANT TO SEC RULE 17Ad-15.



THE SIGNATURE SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION, (Banks, Stockbrokers, Savings and Loan Associations and Credit Unions), WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM PURSUANT TO SEC RULE 17Ad-15.




I-II-2









 








EXHIBIT J




PARTNERSHIP UNIT DESIGNATION OF

THE CLASS THREE PARTNERSHIP PREFERRED UNITS OF

AIMCO PROPERTIES, L.P.




     1. Number of Units and Designation.



          A class of Partnership Preferred Units is hereby designated as “Class Three Partnership
Preferred Units,” and the number of Partnership Preferred Units constituting such class shall be
three million (3,000,000).




     2. Definitions.



          Capitalized terms used and not otherwise defined herein shall have the meanings assigned
thereto in the Agreement, as modified by this Partnership Unit Designation and the defined terms
used herein. For purposes of this Partnership Unit Designation, the following terms shall have the
respective meanings ascribed below:




          “Agreement” shall mean the Agreement of Limited Partnership of the Partnership, as amended,
supplemented or restated from time to time.




          “Assignee” shall mean a Person to whom one or more Preferred Units have been Transferred in a
manner permitted under the Agreement, but who has not become a Substituted Limited Partner, and who
has the rights set forth in Section 11.5 of the Agreement.




          “Cash Amount” shall mean, with respect to any Tendered Unit, cash in an amount equal to the
Liquidation Preference of such Tendered Unit.




          “Class Three Partnership Preferred Unit” or “Preferred Unit” shall mean a Partnership
Preferred Unit with the designations, preferences and relative, participating, optional or other
special rights, powers and duties as are set forth in this Partnership Unit Designation.




          “Cut-Off Date” shall mean the fifth (5th) Business Day after the General Partner’s receipt of
a Notice of Redemption.




          “Declination” shall have the meaning set forth in Section 6(f) of this Partnership Unit
Designation.




          “Distribution Payment Date” shall have the meaning set forth of Section 4(b) of this
Partnership Unit Designation.




          “Distribution Rate” shall mean 9.5%, subject to adjustment as provided in Section 4(a) of this
Partnership Unit Designation.




          “Dividend Yield” shall mean, as of any calculation date and with respect to any class or
series of capital stock, the quotient obtained by dividing (i) the aggregate dollar amount of
dividends payable on one share of such class or series of capital stock, in accordance with its
terms, for the 12 month period ending on the dividend payment date immediately preceding such
calculation date, by (ii) the Market Value of one share of such stock as of such calculation date.




          “Junior Partnership Units” shall have the meaning set forth in Section 3(c) of this
Partnership Unit Designation.




          “Liquidation Preference” shall have the meaning set forth in Section 5(a) of this Partnership
Unit Designation.




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          “Market Value” shall mean, as of any calculation date and with respect to any share of stock,
the average of the daily market prices for ten (10) consecutive trading days immediately preceding
the calculation date. The market price for any such trading day shall be:





          (i) if the shares are listed or admitted to trading on any securities exchange or The
Nasdaq Stock Market’s National Market System, the closing price, regular way, on such day,
or if no such sale takes place on such day, the average of the closing bid and asked prices
on such day, in either case as reported in the principal consolidated transaction reporting
system,




          (ii) if the shares are not listed or admitted to trading on any securities exchange or
The Nasdaq Stock Market’s National Market System, the last reported sale price on such day
or, if no sale takes place on such day, the average of the closing bid and asked prices on
such day, as reported by a reliable quotation source designated by the General Partner, or




          (iii) if the shares are not listed or admitted to trading on any securities exchange
or The Nasdaq Stock Market’s National Market System and no such last reported sale price or
closing bid and asked prices are available, the average of the reported high bid and low
asked prices on such day, as reported by a reliable quotation source designated by the
General Partner, or if there shall be no bid and asked prices on such day, the average of
the high bid and low asked prices, as so reported, on the most recent day (not more than ten
(10) days prior to the date in question) for which prices have been so reported;


provided, however, that, if there are no bid and asked prices reported during the ten (10) days
prior to the date in question, the Market Value of the shares shall be determined by the General
Partner acting in good faith on the basis of such quotations and other information as it considers,
in its reasonable judgment, appropriate; provided, further, that the General Partner is authorized
to adjust the market price for any trading day as may be necessary, in its judgment, to reflect an
event that occurs at any time after the commencement of such ten day period that would unfairly
distort the Market Value, including, without limitation, a stock dividend, split, subdivision,
reverse stock split, or share combination.




          “Notice of Redemption” shall mean a Notice of Redemption in the form of Annex I to this
Partnership Unit Designation.




          “Parity Partnership Units” shall have the meaning set forth in Section 3(b) of this
Partnership Unit Designation.




          “Partnership” shall mean AIMCO Properties, L.P., a Delaware limited partnership.




          “Previous General Partner” shall mean Apartment Investment and Management Company, a Maryland
corporation.




          “Primary Offering Notice” shall have the meaning set forth in Section 6(h)(4) of this
Partnership Unit Designation.




          “Public Offering Funding” shall have the meaning set forth in Section 6(f)(2) of this
Partnership Unit Designation.




          “Qualifying Preferred Stock” shall mean any class or series of non-convertible perpetual
preferred stock that (i) has been issued by a corporation that has elected to be taxed as a REIT,
(ii) has a fixed rate of distributions or dividends, (iii) has a fixed liquidation preference (and
which entitles the holder thereof to no payments other than the payment of distributions at a fixed
rate and the payment of a fixed liquidation preference), (iv) is listed on the New York Stock
Exchange, (v) cannot be redeemed at the option of the issuer for the first five years after
issuance of such class or series of preferred stock and that, at the Reset Date (or, if applicable,
as of the date the calculation of the Weighted Average of Preferred Stock Dividend Yields is being
made for purposes hereof in respect of such Reset Date) cannot be so redeemed and (vi) is issued by
an issuer the unsecured debt of which has an average rating from Moody’s Investors Services, Inc.,
Standard & Poors Rating Services or Duff & Phelps Credit




J-2









 







Rating Co. in a category that is one rating category below the average rating, as of such
date, of the Previous General Partner’s unsecured debt.




          “Redemption” shall have the meaning set forth in Section 6(b)(i) of this Partnership Unit
Designation.




          “Registrable Shares” shall have the meaning set forth in Section 6(f)(2) of this Partnership
Unit Designation.




          “REIT Shares Amount” shall mean, with respect to any Tendered Units, a number of REIT Shares
equal to the quotient obtained by dividing (i) the Cash Amount for such Tendered Units, by (ii) the
Market Value of a REIT Share as of the fifth (5th) Business Day prior to the date of receipt by the
General Partner of a Notice of Redemption for such Tendered Units.




          “Reset Date” shall mean December 21, 2004 and every fifth anniversary of such date that occurs
thereafter.




          “Senior Partnership Units” shall have the meaning set forth in Section 3(a) of this
Partnership Unit Designation.




          “Single Funding Notice” shall have the meaning set forth in Section 6(f)(3) of this
Partnership Unit Designation.




          “Specified Redemption Date” shall mean, with respect to any Redemption, the later of (a) the
tenth (10th) Business Day after the receipt by the General Partner of a Notice of Redemption or (b)
in the case of a Declination followed by a Public Offering Funding, the Business Day next following
the date of the closing of the Public Offering Funding; provided, however, that the Specified
Redemption Date, as well as the closing of a Redemption, or an acquisition of Tendered Units by the
Previous General Partner pursuant to Section 6 hereof, on any Specified Redemption Date, may be
deferred, in the General Partner’s sole and absolute discretion, for such time (but in any event
not more than one hundred fifty (150) days in the aggregate) as may reasonably be required to
effect, as applicable, (i) a Public Offering Funding or other necessary funding arrangements, (ii)
compliance with the Securities Act or other law (including, but not limited to, (a) state “blue
sky” or other securities laws and (b) the expiration or termination of the applicable waiting
period, if any, under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended) and
(iii) satisfaction or waiver of other commercially reasonable and customary closing conditions and
requirements for a transaction of such nature.




          “Tendering Party” shall have the meaning set forth in Section 6(b) of this Partnership Unit
Designation.




          “Tendered Units” shall have the meaning set forth in Section 6(b) of this Partnership Unit
Designation.




          “Weighted Average of Preferred Stock Dividend Yields” shall mean, as of any date of
calculation, the average of the Dividend Yields, as of such date, of each Qualifying Preferred
Stock (other than a Qualifying Preferred Stock issued by the Previous General Partner) that has
been outstanding during the entire year immediately preceding the date of calculation. Each such
class of Qualifying Preferred Stock (except Qualifying Preferred Stock of the Previous General
Partner) shall be weighted for its total market value.




     3. Ranking.



          Any class or series of Partnership Units of the Partnership shall be deemed to rank:




          (a) prior or senior to the Class Three Partnership Preferred Units, as to the payment of
distributions and as to the distribution of assets upon liquidation, dissolution or winding up, if
the holders of such class or series shall be entitled to the receipt of distributions and of
amounts distributable upon liquidation,




J-3









 







dissolution or winding up, as the case may be, in preference or priority to the holders of
Class Three Partnership Preferred Units (the Partnership Units referred to in this paragraph being
hereinafter referred to, collectively, as “Senior Partnership Units”);




          (b) on a parity with the Class Three Partnership Preferred Units, as to the payment of
distributions and as to the distribution of assets upon liquidation, dissolution or winding up,
whether or not the distribution rates, distribution payment dates or redemption or liquidation
prices per unit or other denomination thereof be different from those of the Class Three
Partnership Preferred Units if (i) such class or series of Partnership Units shall be Class G
Partnership Preferred Units, Class One Partnership Preferred Units or Class Two Partnership
Preferred Units or (ii) the holders of such class or series of Partnership Units and the Class
Three Partnership Preferred Units shall be entitled to the receipt of distributions and of amounts
distributable upon liquidation, dissolution or winding up in proportion to their respective amounts
of accrued and unpaid distributions per unit or other denomination or liquidation preferences,
without preference or priority one over the other (the Partnership Units referred to in clauses (i)
and (ii) of this paragraph being hereinafter referred to, collectively, as “Parity Partnership
Units”); and




          (c) junior to the Class Three Partnership Preferred Units, as to the payment of distributions
and as to the distribution of assets upon liquidation, dissolution or winding up, if (i) such class
or series of Partnership Units shall be Partnership Common Units or Class I High Performance
Partnership Units or (ii) the holders of Class Three Partnership Preferred Units shall be entitled
to receipt of distributions or of amounts distributable upon liquidation, dissolution or winding
up, as the case may be, in preference or priority to the holders of such class or series of
Partnership Units (the Partnership Units referred to in clauses (i) and (ii) of this paragraph
being hereinafter referred to, collectively, as “Junior Partnership Units”).




     4. Quarterly Cash Distributions.



          (a) The “Quarterly Distribution Amount,” as of any date, shall be equal to (i) the
Distribution Rate then in effect, multiplied by (ii) $25, and divided by (iii) four. Holders of
Preferred Units will be entitled to receive, when and as declared by the General Partner, quarterly
cash distributions in an amount per Preferred Unit equal to the Quarterly Distribution Amount in
effect as of the date such distribution is declared by the General Partner, and no more. On each
Reset Date, the Distribution Rate thereafter in effect shall be adjusted by the General Partner to
equal the lesser of (i) the Distribution Rate in effect immediately prior to such Reset Date or
(ii) the Dividend Yield of the class of Qualifying Preferred Stock most recently issued by the
Previous General Partner or, if there is no class of Qualifying Preferred Stock of the Previous
General Partner outstanding as of any Reset Date, the Weighted Average of Preferred Stock Dividend
Yields, calculated as of the end of the calendar quarter immediately preceding such Reset Date;
provided, further, that if for any reason there are no classes of Qualifying Preferred Stock of the
type described in the definition of “Weighted Average of Preferred Stock Dividend Yields”
outstanding on any Reset Date and the reference to the Weighted Average of Preferred Stock Dividend
Yields would otherwise be determinative of the calculation of the adjusted Distribution Rate on
such Reset Date, the adjusted Distribution Rate for the succeeding five (5) year period shall be
the Distribution Rate in effect immediately prior to such Reset Date. Upon any such adjustment of
the Distribution Rate, the General Partner shall send a notice describing such adjustment to the
holders of the Preferred Units at their respective addresses, as set forth on Exhibit A to the
Agreement.




          (b) Any such distributions will be cumulative from the date of original issue, whether or not
in any distribution period or periods such distributions have been declared, and shall be payable
quarterly on February 15, May 15, August 15 and November 15 of each year (or, if not a Business
Day, the next succeeding Business Day) (each a “Distribution Payment Date”), commencing on the
first such date occurring after the date of original issue. If the Preferred Units are issued on
any day other than a Distribution Payment Date, the first distribution payable on such Preferred
Units will be prorated for the portion of the quarterly period that such Preferred Units are
outstanding on the basis of twelve 30-day months and a 360-day year. Distributions will be payable
in arrears to holders of record as they appear on the records of the Partnership at the close of
business on the February 1, May 1, August 1 or November 1, as the case may be, immediately
preceding each Distribution Payment Date. If the Preferred Units are issued other than on a record
date for the payment of distributions to the holders of Preferred Units, the Quarterly Distribution
Amount shall, for any quarter in which the Distribution Rate changes on any Reset Date, be
appropriately prorated based on the portions of such quarter during which the different




J-4









 







Distribution Rates were in effect, on the basis of twelve 30-day months and a 360-day year.
Holders of Preferred Units will not be entitled to receive any distributions in excess of
cumulative distributions on the Preferred Units. No interest, or sum of money in lieu of interest,
shall be payable in respect of any distribution payment or payments on the Preferred Units that may
be in arrears. Holders of any Preferred Units that are issued after the date of original issuance
will be entitled to receive the same distributions as holders of any Preferred Units issued on the
date of original issuance.




          (c) When distributions are not paid in full upon the Preferred Units or any Parity Partnership
Units, or a sum sufficient for such payment is not set apart, all distributions declared upon the
Preferred Units and any Parity Partnership Units shall be declared ratably in proportion to the
respective amounts of distributions accumulated and unpaid on the Preferred Units and accumulated
and unpaid on such Parity Partnership Units. Except as set forth in the preceding sentence, unless
distributions on the Preferred Units equal to the full amount of accumulated and unpaid
distributions have been or contemporaneously are declared and paid, or declared and a sum
sufficient for the payment thereof has been or contemporaneously is set apart for such payment, for
all past distribution periods, no distributions shall be declared or paid or set apart for payment
by the Partnership with respect to any Parity Partnership Units.




          (d) Unless full cumulative distributions (including all accumulated, accrued and unpaid
distributions) on the Preferred Units have been declared and paid, or declared and set apart for
payment, for all past distribution periods, no distributions (other than distributions paid in
Junior Partnership Units or options, warrants or rights to subscribe for or purchase Junior
Partnership Units) may be declared or paid or set apart for payment by the Partnership and no other
distribution of cash or other property may be declared or made, directly or indirectly, by the
Partnership with respect to any Junior Partnership Units, nor shall any Junior Partnership Units be
redeemed, purchased or otherwise acquired (except for a redemption, purchase or other acquisition
of Partnership Common Units made for purposes of an employee incentive or benefit plan of the
Partnership or any affiliate thereof, including, without limitation, Previous General Partner and
its affiliates) for any consideration (or any monies be paid to or made available for a sinking
fund for the redemption of any such Junior Partnership Units), directly or indirectly, by the
Partnership (except by conversion into or exchange for Junior Partnership Units, or options,
warrants or rights to subscribe for or purchase Junior Partnership Units), nor shall any other cash
or other property be paid or distributed to or for the benefit of holders of Junior Partnership
Units.




          (e) Notwithstanding the foregoing provisions of this Section 4, the Partnership shall not be
prohibited from (i) declaring or paying or setting apart for payment any distribution on any Parity
Partnership Units or (ii) redeeming, purchasing or otherwise acquiring any Parity Partnership
Units, in each case, if such declaration, payment, redemption, purchase or other acquisition is
necessary to maintain the Previous General Partner’s qualification as a REIT.




     5. Liquidation Preference.



          (a) Upon any voluntary or involuntary liquidation, dissolution or winding up of the
Partnership, before any allocation of income or gain by the Partnership shall be made to or set
apart for the holders of any Junior Partnership Units, to the extent possible, the holders of
Preferred Units shall be entitled to be allocated income and gain to the extent necessary to enable
them to receive a liquidation preference (the “Liquidation Preference”) per Preferred Unit equal to
the sum of (i) $25 plus (ii) any accumulated, accrued and unpaid distributions (whether or not
earned or declared) to the date of final distribution to such holders; but such holders will not be
entitled to any further payment or allocation. Until all holders of the Preferred Units have been
paid the Liquidation Preference in full, no allocation of income or gain will be made to any holder
of Junior Partnership Units upon the liquidation, dissolution or winding up of the Partnership.




          (b) If, upon any voluntary or involuntary liquidation, dissolution or winding up of the
Partnership, the assets of the Partnership, or proceeds thereof, distributable among the holders of
Preferred Units shall be insufficient to pay in full the Liquidation Preference and liquidating
payments on any Parity Partnership Units, then following appropriate allocations of Partnership
income, gain, deduction and loss, such assets, or the proceeds thereof, shall be distributed among
the holders of Preferred Units and any such Parity Partnership Units ratably in the same proportion
as the respective amounts that would be payable on such Preferred Units and any such Parity
Partnership Units if all amounts payable thereon were paid in full.




J-5









 








          (c) A voluntary or involuntary liquidation, dissolution or winding up of the Partnership will
not include a consolidation or merger of the Partnership with one or more partnerships,
corporations or other entities, or a sale or transfer of all or substantially all of the
Partnership’s assets.




          (d) Upon any voluntary or involuntary liquidation, dissolution or winding up of the
Partnership, after all allocations shall have been made in full to the holders of Preferred Units
and any Parity Partnership Units to the extent necessary to enable them to receive their respective
liquidation preferences, any Junior Partnership Units shall be entitled to receive any and all
assets remaining to be paid or distributed, and the holders of the Preferred Units and any Parity
Partnership Units shall not be entitled to share therein.




     6. Redemption.



          (a) Except as set forth in Section 6(l) hereof, the Preferred Units may not be redeemed at the
option of the Partnership, and will not be required to be redeemed or repurchased by the
Partnership or the Previous General Partner except if a holder of a Preferred Unit effects a
Redemption, as provided for in Section 6(b) hereof. The Partnership or the Previous General Partner
may purchase Preferred Units from time to time in the open market, by tender or exchange offer, in
privately negotiated purchases or otherwise.




          (b) On or after the first (1st) anniversary of becoming a holder of Preferred Units, a
Qualifying Party shall have the right (subject to the terms and conditions set forth herein) to
require the Partnership to redeem all or a portion of the Preferred Units held by such Qualifying
Party (such Preferred Units being hereafter “Tendered Units”) in exchange (a “Redemption”) for REIT
Shares issuable on, or the Cash Amount payable on, the Specified Redemption Date, as determined by
the Partnership in its sole discretion. Any Redemption shall be exercised pursuant to a Notice of
Redemption delivered to the General Partner by the Qualifying Party when exercising the Redemption
right (the “Tendering Party”).




          (c) If the Partnership elects to redeem Tendered Units for REIT Shares rather than cash, then
the Partnership shall direct the Previous General Partner to issue and deliver such REIT Shares to
the Tendering Party pursuant to the terms set forth in this Section 6, in which case, (i) the
Previous General Partner, acting as a distinct legal entity, shall assume directly the obligation
with respect thereto and shall satisfy the Tendering Party’s exercise of its Redemption right, and
(ii) such transaction shall be treated, for Federal income tax purposes, as a transfer by the
Tendering Party of such Tendered Units to the Previous General Partner in exchange for REIT Shares.
In making such election to cause the Previous General Partner to acquire Tendered Units, the
Partnership shall act in a fair, equitable and reasonable manner that neither prefers one group or
class of Tendering Parties over another nor discriminates against a group or class of Tendering
Parties. If the Partnership elects to redeem any number of Tendered Units for REIT Shares, rather
than cash, on the Specified Redemption Date, the Tendering Party shall sell such number of the
Tendered Units to the Previous General Partner in exchange for a number of REIT Shares equal to the
REIT Shares Amount for such number of the Tendered Units. The Tendering Party shall submit (i)
such information, certification or affidavit as the Previous General Partner may reasonably require
in connection with the application of the Ownership Limit and other restrictions and limitations of
the Charter to any such acquisition and (ii) such written representations, investment letters,
legal opinions or other instruments necessary, in the Previous General Partner’s view, to effect
compliance with the Securities Act. The REIT Shares shall be delivered by the Previous General
Partner as duly authorized, validly issued, fully paid and accessible REIT Shares, free of any
pledge, lien, encumbrance or restriction, other than the Ownership Limit and other restrictions
provided in the Charter, the Bylaws of the Previous General Partner, the Securities Act and
relevant state securities or “blue sky” laws. Neither any Tendering Party whose Tendered Units are
acquired by the Previous General Partner pursuant to this Section 6, any Partner, any Assignee nor
any other interested Person shall have any right to require or cause the Previous General Partner
or the General Partner to register, qualify or list any REIT Shares owned or held by such Person,
whether or not such REIT Shares are issued pursuant to this Section 6, with the SEC, with any state
securities commissioner, department or agency, under the Securities Act or the Exchange Act or with
any stock exchange; provided, however, that this limitation shall not be in derogation of any
registration or similar rights granted pursuant to any other written agreement between the Previous
General Partner and any such Person. Notwithstanding any delay in such delivery, the Tendering
Party shall be deemed the owner of such REIT Shares for all purposes, including, without
limitation, rights to vote or consent, receive dividends, and exercise rights, as of the Specified
Redemption Date. REIT Shares issued upon an acquisition of the Tendered Units by the Previous
General Partner pursuant to this Section 6 may contain such legends regarding restrictions under
the Securities Act and




J-6









 







applicable state securities laws as the Previous General Partner in good faith determines to
be necessary or advisable in order to ensure compliance with such laws.




          (d) The Partnership shall have no obligation to effect any redemption unless and until a
Tendering Party has given the Partnership a Notice of Redemption. Each Notice of Redemption shall
be sent by hand delivery or by first class mail, postage prepaid, to AIMCO Properties, L.P., c/o
AIMCO-GP, Inc., 4582 South Ulster Street Parkway, Suite 1100, Denver, Colorado 80237, Attention:
Investor Relations, or to such other address as the Partnership shall specify in writing by
delivery to the holders of the Preferred Units in the same manner as that set forth above for
delivery of the Notice of Redemption. At any time prior to the Specified Redemption Date for any
Redemption, any holder may revoke its Notice of Redemption.




          (e) A Tendering Party shall have no right to receive distributions with respect to any
Tendered Units (other than the Cash Amount) paid after delivery of the Notice of Redemption,
whether or not the record date for such distribution precedes or coincides with such delivery of
the Notice of Redemption. If the Partnership elects to redeem any number of Tendered Units for
cash, the Cash Amount for such number of Tendered Units shall be delivered as a certified check
payable to the Tendering Party or, in the General Partner’s sole and absolute discretion, in
immediately available funds.




          (f) In the event that the Partnership declines to cause the Previous General Partner to
acquire all of the Tendered Units from the Tendering Party in exchange for REIT Shares pursuant to
this Section 6 following receipt of a Notice of Redemption (a “Declination”):





          (1) The Previous General Partner or the General Partner shall give notice of such
Declination to the Tendering Party on or before the close of business on the Cut-Off Date.




          (2) The Partnership may elect to raise funds for the payment of the Cash Amount either
(a) by requiring that the Previous General Partner contribute such funds from the proceeds
of a registered public offering (a “Public Offering Funding”) by the Previous General
Partner of a number of REIT Shares (“Registrable Shares”) equal to the REIT Shares Amount
with respect to the Tendered Units or (b) from any other sources (including, but not limited
to, the sale of any Property and the incurrence of additional Debt) available to the
Partnership.




          (3) Promptly upon the General Partner’s receipt of the Notice of Redemption and the
Previous General Partner or the General Partner giving notice of the Partnership’s
Declination, the General Partner shall give notice (a “Single Funding Notice”) to all
Qualifying Parties then holding Preferred Units and having Redemption rights pursuant to
this Section 6 and require that all such Qualifying Parties elect whether or not to effect a
Redemption of their Preferred Units to be funded through such Public Offering Funding. In
the event that any such Qualifying Party elects to effect such a Redemption, it shall give
notice thereof and of the number of Preferred Units to be made subject thereon in writing to
the General Partner within ten (10) Business Days after receipt of the Single Funding
Notice, and such Qualifying Party shall be treated as a Tendering Party for all purposes of
this Section 6. In the event that a Qualifying Party does not so elect, it shall be deemed
to have waived its right to effect a Redemption for the next twelve months; provided,
however, that the Previous General Partner shall not be required to acquire Preferred Units
pursuant to this Section 6(f) more than twice within any twelve-month period.


Any proceeds from a Public Offering Funding that are in excess of the Cash Amount shall be for the
sole benefit of the Previous General Partner and/or the General Partner. The General Partner
and/or the Special Limited Partner shall make a Capital Contribution of such amounts to the
Partnership for an additional General Partner Interest and/or Limited Partner Interest. Any such
contribution shall entitle the General Partner and the Special Limited Partner, as the case may be,
to an equitable Percentage Interest adjustment.




          (g) Notwithstanding the provisions of this Section 6, the Previous General Partner shall not,
under any circumstances, elect to acquire Tendered Units in exchange for REIT Shares if such
exchange would be prohibited under the Charter.




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          (h) Notwithstanding anything herein to the contrary, with respect to any Redemption pursuant
to this Section 6:





          (1) All Preferred Units acquired by the Previous General Partner pursuant to this
Section 6 hereof shall be contributed by the Previous General Partner to either or both of
the General Partner and the Special Limited Partner in such proportions as the Previous
General Partner, the General Partner and the Special Limited Partner shall determine. Any
Preferred Units so contributed to the General Partner shall automatically, and without
further action required, be converted into and deemed to be a General Partner Interest
comprised of an equal number of Partnership Common Units. Any Preferred Units so
contributed to the Special Limited Partner shall be converted into Partnership Common Units.




          (2) Subject to the Ownership Limit, no Tendering Party may effect a Redemption for less
than five hundred (500) Preferred Units or, if such Tendering Party holds (as a Limited
Partner or, economically, as an Assignee) less than five hundred (500) Preferred Units, all
of the Preferred Units held by such Tendering Party.




          (3) No Tendering Party may (a) effect a Redemption more than once in any fiscal quarter
of a Twelve-Month Period or (b) effect a Redemption during the period after the Partnership
Record Date with respect to a distribution and before the record date established by the
Previous General Partner for a distribution to its shareholders of some or all of its
portion of such Partnership distribution.




          (4) Notwithstanding anything herein to the contrary, with respect to any Redemption or
acquisition of Tendered Units by the Previous General Partner pursuant to this Section 6, in
the event that the Previous General Partner or the General Partner gives notice to all
Limited Partners (but excluding any Assignees) then owning Partnership Interests (a “Primary
Offering Notice”) that the Previous General Partner desires to effect a primary offering of
its equity securities then, unless the Previous General Partner and the General Partner
otherwise consent, commencement of the actions denoted in Section 6(f) hereof as to a Public
Offering Funding with respect to any Notice of Redemption thereafter received, whether or
not the Tendering Party is a Limited Partner, may be delayed until the earlier of (a) the
completion of the primary offering or (b) ninety (90) days following the giving of the
Primary Offering Notice.




          (5) Without the Consent of the Previous General Partner, no Tendering Party may effect
a Redemption within ninety (90) days following the closing of any prior Public Offering
Funding.




          (6) The consummation of such Redemption shall be subject to the expiration or
termination of the applicable waiting period, if any, under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.




          (7) The Tendering Party shall continue to own (subject, in the case of an Assignee, to
the provision of Section 11.5 of the Agreement) all Preferred Units subject to any
Redemption, and be treated as a Limited Partner or an Assignee, as applicable, with respect
to such Preferred Units for all purposes of the Agreement, until such Preferred Units are
either paid for by the Partnership pursuant to this Section 6 or transferred to the Previous
General Partner (or directly to the General Partner or Special Limited Partner) and paid
for, by the issuance of the REIT Shares, pursuant to this Section 6 on the Specified
Redemption Date. Until a Specified Redemption Date and an acquisition of the Tendered Units
by the Previous General Partner pursuant to this Section 6, the Tendering Party shall have
no rights as a shareholder of the Previous General Partner with respect to the REIT Shares
issuable in connection with such acquisition.


For purposes of determining compliance with the restrictions set forth in this Section 6(h), all
Partnership Common Units and Partnership Preferred Units, including Preferred Units, beneficially
owned by a Related Party of a Tendering Party shall be considered to be owned or held by such
Tendering Party.




J-8









 








          (i) In connection with an exercise of Redemption rights pursuant to this Section 6, the
Tendering Party shall submit the following to the General Partner, in addition to the Notice of
Redemption:





          (1) A written affidavit, dated the same date as the Notice of Redemption, (a)
disclosing the actual and constructive ownership, as determined for purposes of Code
Sections 856(a)(6) and 856(h), of REIT Shares and any other classes or shares of the
Previous General Partner by (i) such Tendering Party and (ii) any Related Party and (b)
representing that, after giving effect to the Redemption, neither the Tendering Party nor
any Related Party will own REIT Shares in excess of the Ownership Limit;




          (2) A written representation that neither the Tendering Party nor any Related Party has
any intention to acquire any additional REIT Shares or any other class of shares of the
Previous General Partner prior to the closing of the Redemption on the Specified Redemption
Date; and




          (3) An undertaking to certify, at and as a condition to the closing of the Redemption
on the Specified Redemption Date, that either (a) the actual and constructive ownership of
REIT Shares or any other class of shares of the Previous General Partner by the Tendering
Party and any Related Party remain unchanged from that disclosed in the affidavit required
by Section 6(i)(a) or (b)) after giving effect to the Redemption, neither the Tendering
Party nor any Related Party shall own REIT Shares or other shares of the Previous General
Partner in violation of the Ownership Limit.



          (j) On or after the Specific Redemption Date, each holder of Preferred Units shall surrender
to the Partnership the certificate evidencing such holder’s Preferred Units, at the address to
which a Notice of Redemption is required to be sent. Upon such surrender of a certificate, the
Partnership shall thereupon pay the former holder thereof the applicable Cash Amount and/or deliver
REIT Shares for the Preferred Units evidenced thereby. From and after the Specific Redemption Date
(i) distributions with respect to the Preferred Units shall cease to accumulate, (ii) the Preferred
Units shall no longer be deemed outstanding, (iii) the holders thereof shall cease to be Partners
to the extent of their interest in such Preferred Units, and (iv) all rights whatsoever with
respect to the Preferred Units shall terminate, except the right of the holders of the Preferred
Units to receive Cash Amount and/or REIT Shares therefor, without interest or any sum of money in
lieu of interest thereon, upon surrender of their certificates therefor.




          (k) Notwithstanding the provisions of this Section 6, the Tendering Parties (i) shall not be
entitled to elect or effect a Redemption where the Redemption would consist of less than all the
Preferred Units held by Partners and, to the extent that the aggregate Percentage Interests of the
Limited Partners would be reduced, as a result of the Redemption, to less than one percent (1%) and
(ii) shall have no rights under the Agreement that would otherwise be prohibited under the Charter.
To the extent that any attempted Redemption would be in violation of this Section 6(k), it shall
be null and void ab initio, and the Tendering Party shall not acquire any rights or economic
interests in REIT Shares otherwise issuable by the Previous General Partner hereunder.




          (l) Notwithstanding any other provision of the Agreement, on and after the date on which the
aggregate Percentage Interests of the Limited Partners (other than the Special Limited Partner) are
less than one percent (1%), the Partnership shall have the right, but not the obligation, from time
to time and at any time to redeem any and all outstanding Limited Partner Interests (other than the
Special Limited Partner’s Limited Partner Interest) by treating any Limited Partner as a Tendering
Party who has delivered a Notice of Redemption pursuant to this Section 6 for the amount of
Preferred Units to be specified by the General Partner, in its sole and absolute discretion, by
notice to such Limited Partner that the Partnership has elected to exercise its rights under this
Section 6(l). Such notice given by the General Partner to a Limited Partner pursuant to this
Section 6(l) shall be treated as if it were a Notice of Redemption delivered to the General Partner
by such Limited Partner. For purposes of this Section 6(l), (a) any Limited Partner (whether or
not eligible to be a Tendering Party) may, in the General Partner’s sole and absolute discretion,
be treated as a Tendering Party and (b) the provisions of Sections 6(f)(1), 6(h)(2), 6(h)(3) and
6(h)(5) hereof shall not apply, but the remainder of this Section shall apply, mutatis mutandis.




     7. Status of Reacquired Units.



          All Preferred Units which shall have been issued and reacquired in any manner by the
Partnership shall be deemed cancelled and no longer outstanding.




J-9









 








     8. General.



          The ownership of the Preferred Units shall be evidenced by one or more certificates in the
form of Annex II hereto. The General Partner shall amend Exhibit A to the Agreement from time to
time to the extent necessary to reflect accurately the issuance of, and subsequent redemption, or
any other event having an effect on the ownership of, the Class Three Partnership Preferred Units.




     9. Allocations of Income and Loss.



          Subject to the terms of Section 5 hereof, for each taxable year, (i) each holder of Preferred
Units will be allocated, to the extent possible, net income of the Partnership in an amount equal
to the distributions made on such holder’s Preferred Units during such taxable year, and (ii) each
holder of Preferred Units will be allocated its pro rata share, based on the portion of outstanding
Preferred Units held by it, of any net loss of the Partnership that is not allocated to holders of
Partnership Common Units or other interests in the Partnership.




     10. Voting Rights.



          Except as otherwise required by applicable law or in the Agreement, the holders of the
Preferred Units will have the same voting rights as holders of the Partnership Common Units. As
long as my Preferred Units are outstanding, in addition to any other vote or consent of partners
required by law or by the Agreement, the affirmative vote or consent of holders of at least 50% of
the outstanding Preferred Units will be necessary for effecting any amendment of any of the
provisions of the Partnership Unit Designation of the Preferred Units that materially and adversely
affects the rights or preferences of the holders of the Preferred Units. The creation or issuance
of any class or series of Partnership units, including, without limitation, any Partnership units
that may have rights junior to, on a parity with, or senior or superior to the Preferred Units,
will not be deemed to have a material adverse effect on the rights or preferences of the holders of
Preferred Units. With respect to the exercise of the above described voting rights, each
Preferred Unit will have one (1) vote per Preferred Unit.




     11. Restrictions on Transfer.



          Preferred Units are subject to the same restrictions on transfer as are, and the holders of
Preferred Units shall be entitled to the same rights of transfer as are, applicable to Common Units
as set forth in the Agreement.





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ANNEX I

TO EXHIBIT J




NOTICE OF REDEMPTION




	 	 	 
	To:

	 	AIMCO Properties, L.P.
	 

	 	c/o AIMCO-GP, Inc.
	 

	 	4582 South Ulster Street Parkway
	 

	 	Suite 1100
	 

	 	Denver, Colorado 80237
	 

	 	Attention: Investor Relations






          The undersigned Limited Partner or Assignee hereby tenders for redemption Class Three
Partnership Preferred Units in AIMCO Properties, L.P. in accordance with the terms of the Agreement
of Limited Partnership of AIMCO Properties, L.P., dated as of July 29, 1994, as it may be amended
and supplemented from time to time (the “Agreement”). All capitalized terms used herein and not
otherwise defined shall have the respective meanings ascribed thereto in the Partnership Unit
Designation of the Class Three Partnership Preferred Units. The undersigned Limited Partner or
Assignee:





          (a) if the Partnership elects to redeem such Class Three Partnership Preferred Units
for REIT Shares rather than cash, hereby irrevocably transfers, assigns, contributes and
sets over to Previous General Partner all of the undersigned Limited Partner’s or Assignee’s
right, title and interest in and to such Class Three Partnership Preferred Units;




          (b) undertakes (i) to surrender such Class Three Partnership Preferred Units and any
certificate therefor at the closing of the Redemption contemplated hereby and (ii) to
furnish to Previous General Partner, prior to the Specified Redemption Date:




          (1) A written affidavit, dated the same date as this Notice of Redemption, (a)
disclosing the actual and constructive ownership, as determined for purposes of Code
Sections 856(a)(6) and 856(h), of REIT Shares by (i) the undersigned Limited Partner
or Assignee and (ii) any Related Party and (b) representing that, after giving
effect to the Redemption, neither the undersigned Limited Partner or Assignee nor
any Related Party will own REIT Shares in excess of the Ownership Limit;




          (2) A written representation that neither the undersigned Limited Partner or
Assignee nor any Related Party has any intention to acquire any additional REIT
Shares prior to the closing of the Redemption contemplated hereby on the Specified
Redemption Date; and




          (3) An undertaking to certify, at and as a condition to the closing of the
Redemption contemplated hereby on the Specified Redemption Date, that either (a) the
actual and constructive ownership of REIT Shares by the undersigned Limited Partner
or Assignee and any Related Party remain unchanged from that disclosed in the
affidavit required by paragraph (1) above, or (b) after giving effect to the
Redemption contemplated hereby, neither the undersigned Limited Partner or Assignee
nor any Related Party shall own REIT Shares in violation of the Ownership Limit.




          (c) directs that the certificate representing the REIT Shares, or the certified check
representing the Cash Amount, in either case, deliverable upon the closing of the Redemption
contemplated hereby be delivered to the address specified below;




          (d) represents, warrants, certifies and agrees that:



J-I-1









 






          (i) the undersigned Limited Partner or Assignee has, and at the closing of the
Redemption will have, good, marketable and unencumbered title to such Preferred Units, free
and clear of the rights or interests of any other person or entity;




          (ii) the undersigned Limited Partner or Assignee has, and at the closing of the
Redemption will have, the full right, power and authority to tender and surrender such
Preferred Units as provided herein; and




          (iii) the undersigned Limited Partner or Assignee has obtained the consent or approval
of all persons and entities, if any, having the right to consent to or approve such tender
and surrender.



Dated:                                         




	 	 	 
	 

	 	Name of Limited Partner or Assignee:
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 

	 	(Signature of Limited Partner or Assignee)
	 
	 	 
	 

	 	 
	 

	 	(Street Address)
	 
	 	 
	 

	 	 
	 

	 	(City)      (State)     (Zip Code)






     (continued on the next page)



J-I-2









 





Issue check payable to or Certificates in the name of:                                                            



Please insert social security or identifying number:                                                            




Signature Guaranteed by:




                                                                       
         



NOTICE: THE SIGNATURE OF THIS NOTICE OF REDEMPTION MUST CORRESPOND WITH THE NAME(S) AS WRITTEN
UPON THE FACE OF THE CERTIFICATE FOR THE CLASS THREE PREFERRED UNITS WHICH ARE BEING REDEEMED IN
EVERY PARTICULAR WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.



THE SIGNATURE SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION, (Banks, Stockbrokers,
Savings and Loan Associations and Credit Unions), WITH MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM PURSUANT TO SEC RULE 17Ad-15.





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ANNEX II

TO EXHIBIT J




FORM OF UNIT CERTIFICATE

OF

CLASS THREE PARTNERSHIP PREFERRED UNITS



THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION, UNLESS THE TRANSFEROR DELIVERS TO THE PARTNERSHIP
AN OPINION OF COUNSEL SATISFACTORY TO THE PARTNERSHIP, IN FORM AND SUBSTANCE SATISFACTORY TO THE
PARTNERSHIP, TO THE EFFECT THAT THE PROPOSED SALE, TRANSFER OR OTHER DISPOSITION MAY BE EFFECTED
WITHOUT REGISTRATION UNDER THE ACT AND UNDER APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS. IN
ADDITION, THE LIMITED PARTNERSHIP INTEREST EVIDENCED BY THIS CERTIFICATE MAY BE SOLD OR OTHERWISE
TRANSFERRED ONLY IN COMPLIANCE WITH THE RESTRICTIONS ON TRANSFER SET FORTH IN THE AGREEMENT OF
LIMITED PARTNERSHIP OF AIMCO PROPERTIES, L.P., DATED AS OF JULY 29, 1994, AS IT MAY BE AMENDED
AND/OR SUPPLEMENTED FROM TIME TO TIME, A COPY OF WHICH MAY BE OBTAINED FROM AIMCO- GP, INC, THE
GENERAL PARTNER, AT ITS PRINCIPAL EXECUTIVE OFFICE.




Certificate Number                     




AIMCO PROPERTIES, L.P.

FORMED UNDER THE LAWS OF THE STATE OF DELAWARE



This certifies that                                                             



is the owner of                                                             




CLASS THREE PARTNERSHIP PREFERRED UNITS

OF

AIMCO PROPERTIES, L.P.,



transferable on the books of the Partnership in person or by duly authorized attorney on the
surrender of this Certificate properly endorsed. This Certificate and the Class Three Partnership
Preferred Units represented hereby are issued and shall be held subject to all of the provisions of
the Agreement of Limited Partnership of AIMCO Properties, L.P., as the same may be amended and/or
supplemented from time to time.



IN WITNESS WHEREOF, the undersigned has signed this Certificate.




	 	 	 	 	 
	Dated:

	 	By	 	 
	 

	 	 	 	 





J-II-1









 






ASSIGNMENT




     For Value Received,                                                             hereby sells, assigns
and transfers unto
                                                             Class Three Partnership Preferred
Unit(s) represented by the within Certificate, and does hereby irrevocably constitute and appoint
the General Partner of AIMCO Properties, L.P. as its Attorney to transfer said Class Three
Partnership Preferred Unit(s) on the books of AIMCO Properties, L.P. with full power of
substitution in the premises.



Dated:                                         




	 	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 
	 	 	 	 
	 	 	Signature Guaranteed by:
	 
	 	 	 	 
	 	 	 




NOTICE: THE SIGNATURE OF THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S) AS WRITTEN UPON THE FACE
OF THE CERTIFICATE IN EVERY PARTICULAR WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.



THE SIGNATURE SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION, (Banks, Stockbrokers,
Savings and Loan Associations and Credit Unions), WITH MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM PURSUANT TO SEC RULE 17Ad-15.





J-II-2









 








EXHIBIT K




PARTNERSHIP UNIT DESIGNATION OF

THE CLASS FOUR PARTNERSHIP PREFERRED UNITS OF

AIMCO PROPERTIES, L.P.




     1. Number of Units and Designation.



          A class of Partnership Preferred Units is hereby designated as “Class Four Partnership
Preferred Units,” and the number of Partnership Preferred Units constituting such class shall be
5,100,000.




     2. Definitions.



          Capitalized terms used and not otherwise defined herein shall have the meanings assigned
thereto in the Agreement, as modified by this Partnership Unit Designation and the defined terms
used herein. For purposes of this Partnership Unit Designation, the following terms shall have the
respective meanings ascribed below:




          “Adjustment Factor” means 1.0; provided, however, that in the event that:




          (i) the Previous General Partner (a) declares or pays a dividend on its outstanding REIT
Shares in REIT Shares or makes a distribution to all holders of its outstanding REIT Shares in REIT
Shares, (b) splits or subdivides its outstanding REIT Shares or (c) effects a reverse stock split
or otherwise combines its outstanding REIT Shares into a smaller number of REIT Shares, the
Adjustment Factor shall be adjusted by multiplying the Adjustment Factor previously in effect by a
fraction, (i) the numerator of which shall be the number of REIT Shares issued and outstanding on
the record date for such dividend, distribution, split, subdivision, reverse split or combination
(assuming for such purposes that such dividend, distribution, split, subdivision, reverse split or
combination has occurred as of such time) and (ii) the denominator of which shall be the actual
number of REIT Shares (determined without the above assumption) issued and outstanding on the
record date for such dividend, distribution, split, subdivision, reverse split or combination;




          (ii) the Previous General Partner distributes any rights, options or warrants to all holders
of its REIT Shares to subscribe for or to purchase or to otherwise acquire REIT Shares (or other
securities or rights convertible into, exchangeable for or exercisable for REIT Shares) at a price
per share less than the Value of a REIT Share on the record date for such distribution (each a
“Distributed Right”), then the Adjustment Factor shall be adjusted by multiplying the Adjustment
Factor previously in effect by a fraction (a) the numerator of which shall be the number of REIT
Shares issued and outstanding on the record date plus the maximum number of REIT Shares purchasable
under such Distributed Rights and (b) the denominator of which shall be the number of REIT Shares
issued and outstanding on the record date plus a fraction (1) the numerator of which is the maximum
number of REIT Shares purchasable under such Distributed Rights times the minimum purchase price
per REIT Share under such Distributed Rights and (2) the denominator of which is the Value of a
REIT Share as of the record date; provided, however, that, if any such Distributed Rights expire or
become no longer exercisable, then the Adjustment Factor shall be adjusted, effective retroactive
to the date of distribution of the Distributed Rights, to reflect a reduced maximum number of REIT
Shares or any change in the minimum purchase price for the purposes of the above fraction; and




          (iii) the Previous General Partner shall, by dividend or otherwise, distribute to all holders
of its REIT Shares evidences of its indebtedness or assets (including securities, but excluding any
dividend or distribution referred to in subsection (i) above), which evidences of indebtedness or
assets relate to assets not received by the Previous General Partner, the General Partner and/or
the Special Limited Partner pursuant to a pro rata distribution by the Partnership, then the
Adjustment Factor shall be adjusted to equal the amount determined by multiplying the Adjustment
Factor in effect immediately prior to the close of business on the date fixed for determination of
shareholders entitled to receive such distribution by a fraction (i) the numerator shall be such
Value of a REIT Share on the date fixed for such determination and (ii) the denominator shall be
the Value of a REIT Share on the dates fixed for such determination less the then fair market value
(as determined by the General Partner, whose determination shall be conclusive) of the portion of
the evidences of indebtedness or assets so distributed applicable to one REIT Share.




K-1









 





          Any adjustments to the Adjustment Factor shall become effective immediately after the
effective date of such event, retroactive to the record date, if any, for such event.




          “Agreement” shall mean the Agreement of Limited Partnership of the Partnership, as amended,
supplemented or restated from time to time.




          “Assignee” shall mean a Person to whom one or more Preferred Units have been Transferred in a
manner permitted under the Agreement, but who has not become a Substituted Limited Partner, and who
has the rights set forth in Section 11.5 of the Agreement.




          “Cash Amount” shall mean, with respect to any Tendered Units, cash in an amount equal to the
sum of (x) the product of (i) the number of Tendered Units, multiplied by (ii) the Liquidation
Preference for a Preferred Unit, plus, (y) if positive, the product of (i) the number of Tendered
Units, multiplied by (ii) the Liquidation Preference for a Preferred Unit (excluding any
accumulated, accrued or unpaid distributions), multiplied by (iii) the quotient obtained by
dividing (a) the amount by which the Market Value of a Common Share, calculated as of the date of
receipt by the General Partner of a Notice of Redemption for such Tendered Units, exceeds $45, by
(b) $45.




          “Class Four Partnership Preferred Unit” or “Preferred Unit” shall mean a Partnership Preferred
Unit with the designations, preferences and relative, participating, optional or other special
rights, powers and duties as are set forth in this Partnership Unit Designation.




          “Common Shares” shall mean the shares of Class A Common Stock of the Previous General Partner.




          “Common Shares Amount” shall mean, with respect to any Tendered Units, a number of Common
Shares equal to the quotient obtained by dividing (i) the Cash Amount for such Tendered Units, by
(ii) the Market Value of a Common Share calculated as of the date of receipt by the General Partner
of a Notice of Redemption for such Tendered Units.




          “Conversion Price” shall mean, as of any date, the quotient obtained by dividing $45 by the
Adjustment Factor in effect as of such date.




          “Current Market Price” of a share of any Equity Stock shall mean the closing price, regular
way on such day, or, if no sale takes place on such day, the average of the reported closing bid
and asked prices, regular way, on such day, in either case as reported on the principal national
securities exchange on which such securities are listed or admitted for trading, or, if such
security is not quoted on any national securities exchange, on the NASDAQ National Market or if
such security is not quoted on the NASDAQ National Market, the average of the closing bid and asked
prices on such day in the over-the-counter market as reported by NASDAQ or, if bid and asked prices
for each security on such day shall not have been reported through NASDAQ, the average of the bid
and asked prices on such day as furnished by any New York Stock Exchange or National Association of
Securities Dealers, Inc. member firm regularly making a market in such security selected for such
purpose by the Chief Executive Officer of the General Partner or the Board of Directors of the
General Partner or if any class or series of securities are not publicly traded, the fair value of
the shares of such class as determined reasonably and in good faith by the Board of Directors of
the General Partner.




          “Cut-Off Date” shall mean the fifth (5th) Business Day after the General Partner’s receipt of
a Notice of Redemption.




          “Declination” shall have the meaning set forth in Section 6(f) of this Partnership Unit
Designation.




          “Distribution Payment Date” shall have the meaning set forth in Section 4(a) of this
Partnership Unit Designation.




K-2









 





          “Equity Stock” shall mean one or more shares of any class of capital stock of the Previous
General Partner.




          “Internal Rate of Return” shall mean, as of any determination date, the effective discount
rate under which the present value of the Inflows associated with an outstanding Class Four
Partnership Preferred Unit equals $25. For purposes of calculation of Internal Rate of Return,
“Inflows” shall mean (a) all distributions (whether paid in cash or property) that have been
received in respect of such unit, (b) the cash payment in respect of distributions payable on such
unit pursuant to Section 7(b)(iii) hereof if such unit were converted to Partnership Common Units
on the determination date, and (c) the amount by which the Market Value of a REIT Share, as of the
determination date, exceeds the Conversion Price then in effect. For purposes of calculating the
amounts of any Inflows, all distributions received in property shall be deemed to have a value
equal to the Market Value of such distributions as of the date such distribution is received.
Neither the fact of any transfer of any units of the Class Four Partnership Preferred Units nor the
amount of any consideration received by the holder thereof or paid by any successor holder in
connection with any transfer shall affect the calculation of Internal Rate of Return.




          “Junior Partnership Units” shall have the meaning set forth in Section 3(c) of this
Partnership Unit Designation.




          “Liquidation Preference” shall have the meaning set forth in Section 5(a) of this Partnership
Unit Designation.




          “Market Value” shall mean, as of any calculation date and with respect to any share of stock,
the average of the daily market prices for ten (10) consecutive trading days (or twenty (20)
consecutive Trading Days for purposes of calculating “Internal Rate of Return”) immediately
preceding the calculation date. The market price for any such trading day shall be:





          (i) if the shares are listed or admitted to trading on any securities exchange or The
Nasdaq Stock Market’s National Market System, the closing price, regular way, on such day,
or if no such sale takes place on such day, the average of the closing bid and asked prices
on such day, in either case as reported in the principal consolidated transaction reporting
system,




          (ii) if the shares are not listed or admitted to trading on any securities exchange or
The Nasdaq Stock Market’s National Market System, the last reported sale price on such day
or, if no sale takes place on such day, the average of the closing bid and asked prices on
such day, as reported by a reliable quotation source designated by the General Partner, or




          (iii) if the shares are not listed or admitted to trading on any securities exchange
or The Nasdaq Stock Market’s National Market System and no such last reported sale price or
closing bid and asked prices are available, the average of the reported high bid and low
asked prices on such day, as reported by a reliable quotation source designated by the
General Partner, or if there shall be no bid and asked prices on such day, the average of
the high bid and low asked prices, as so reported, on the most recent day (not more than ten
(10) days prior to the date in question) for which prices have been so reported;


provided, however, that, if there are no bid and asked prices reported during the ten (10) days
prior to the date in question, the Market Value of the shares shall be determined by the General
Partner acting in good faith on the basis of such quotations and other information as it considers,
in its reasonable judgment, appropriate; provided, further, that the General Partner is authorized
to adjust the market price for any trading day as may be necessary, in its judgment, to reflect an
event that occurs at any time after the commencement of such ten day period that would unfairly
distort the Market Value, including, without limitation, a stock dividend, split, subdivision,
reverse stock split, or share combination.




          “Notice of Redemption” shall mean a Notice of Redemption in the form of Annex I to this
Partnership Unit Designation.




K-3









 








          “Parity Partnership Units” shall have the meaning set forth in Section 3(b) of this
Partnership Unit Designation.




          “Partnership” shall mean AIMCO Properties, L.P., a Delaware limited partnership.




          “Primary Offering Notice” shall have the meaning set forth in Section 6(h)(4) of this
Partnership Unit Designation.




          “Public Offering Funding” shall have the meaning set forth in Section 6(f)(2) of this
Partnership Unit Designation.




          “Redemption” shall have the meaning set forth in Section 6(b) of this Partnership Unit
Designation.




          “Registrable Shares” shall have the meaning set forth in Section 6(f)(2) of this Partnership
Unit Designation.




          “Senior Partnership Units” shall have the meaning set forth in Section 3(a) of this
Partnership Unit Designation.




          “Single Funding Notice” shall have the meaning set forth in Section 6(f)(3) of this
Partnership Unit Designation.




          “Specified Redemption Date” shall mean, with respect to any Redemption, the later of (a) the
tenth (10th) Business Day after the receipt by the General Partner of a Notice of Redemption or (b)
in the case of a Declination followed by a Public Offering Funding, the Business Day next following
the date of the closing of the Public Offering Funding; provided, however, that the Specified
Redemption Date, as well as the closing of a Redemption, or an acquisition of Tendered Units by the
Previous General Partner pursuant to Section 5 hereof, on any Specified Redemption Date, may be
deferred, in the General Partner’s sole and absolute discretion, for such time (but in any event
not more than one hundred fifty (150) days in the aggregate) as may reasonably be required to
effect, as applicable, (i) a Public Offering Funding or other necessary funding arrangements, (ii)
compliance with the Securities Act or other law (including, but not limited to, (a) state “blue
sky” or other securities laws and (b) the expiration or termination of the applicable waiting
period, if any, under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended) and
(iii) satisfaction or waiver of other commercially reasonable and customary closing conditions and
requirements for a transaction of such nature.




          “Tendering Party” shall have the meaning set forth in Section 6(b) hereof.




          “Tendered Units” shall have the meaning set forth in Section 6(b) hereof.




          “Trading Day” shall mean, when used with respect to the Closing Price of a share of any Equity
Stock, (i) if the Equity Stock is listed or admitted to trading on the NYSE, a day on which the
NYSE is open for the transaction of business, (ii) if the Equity Stock is not listed or admitted to
trading on the NYSE but is listed or admitted to trading on another national securities exchange or
automated quotation system, a day on which the principal national securities exchange or automated
quotation system, as the case may be, on which the Equity Stock is listed or admitted to trading is
open for the transaction of business, or (iii) if the Equity Stock is not listed or admitted to
trading on any national securities exchange or automated quotation system, any day other than a
Saturday, a Sunday or a day on which banking institutions in the State of New York are authorized
or obligated by law or executive order to close.




          “Transfer Agent” shall mean such transfer agent as may be designated by the Partnership or its
designee as the transfer agent for the Class Four Partnership Preferred Units; provided, that if
the Partnership has not designated a transfer agent then the Partnership shall act as the transfer
agent for the Class Four Partnership Preferred Units.




K-4









 





     3. Ranking.



          Any class or series of Partnership Units of the Partnership shall be deemed to rank:




          (a) prior or senior to the Class Four Partnership Preferred Units, as to the payment of
distributions and as to the distribution of assets upon liquidation, dissolution or winding up, if
the holders of such class or series shall be entitled to the receipt of distributions and of
amounts distributable upon liquidation, dissolution or winding up, as the case may be, in
preference or priority to the holders of Class Four Partnership Preferred Units (the Partnership
Units referred to in this paragraph being hereinafter referred to, collectively, as “Senior
Partnership Units”);




          (b) on a parity with the Class Four Partnership Preferred Units, as to the payment of
distributions and as to the distribution of assets upon liquidation, dissolution or winding up,
whether or not the distribution rates, distribution payment dates or redemption or liquidation
prices per unit or other denomination thereof be different from those of the Class Four Partnership
Preferred Units if (i) such class or series of Partnership Units shall be Class G Partnership
Preferred Units, Class One Partnership Preferred Units, Class Two Partnership Preferred Units or
Class Three Partnership Preferred Units, or (ii) the holders of such class or series of Partnership
Units and the Class Four Partnership Preferred Units shall be entitled to the receipt of
distributions and of amounts distributable upon liquidation, dissolution or winding up in
proportion to their respective amounts of accrued and unpaid distributions per unit or other
denomination or liquidation preferences, without preference or priority one over the other (the
Partnership Units referred to in clauses (i) and (ii) of this paragraph being hereinafter referred
to, collectively, as “Parity Partnership Units”); and




          (c) junior to the Class Four Partnership Preferred Units, as to the payment of distributions
and as to the distribution of assets upon liquidation, dissolution or winding up, if (i) such class
or series of Partnership Units shall be Partnership Common Units or Class I High Performance
Partnership Units or (ii) the holders of Class Four Partnership Preferred Units shall be entitled
to receipt of distributions or of amounts distributable upon liquidation, dissolution or winding
up, as the case may be, in preference or priority to the holders of such class or series of
Partnership Units (the Partnership Units referred to in clauses (i) and (ii) of this paragraph
being hereinafter referred to, collectively, as “Junior Partnership Units”).




     4. Quarterly Cash Distributions.



          (a) Holders of Preferred Units will be entitled to receive, when and as declared by the
General Partner, quarterly cash distributions at the rate of $0.50 per Preferred Unit. Any such
distributions will be cumulative from the date of original issue, whether or not in any
distribution period or periods such distributions have been declared, and shall be payable
quarterly on February 15, May 15, August 15 and November 15 of each year (or, if not a Business
Day, the next succeeding Business Day) (each a “Distribution Payment Date”), commencing on the
first such date occurring after the date of original issue. If the Preferred Units are issued on
any day other than a Distribution Payment Date, the first distribution payable on such Preferred
Units will be prorated for the portion of the quarterly period that such Preferred Units are
outstanding on the basis of twelve 30-day months and a 360-day year. Distributions will be payable
in arrears to holders of record as they appear on the records of the Partnership at the close of
business on February 1, May 1, August 1 or November 1, as the case may be, immediately preceding
each Distribution Payment Date. Holders of Preferred Units will not be entitled to receive any
distributions in excess of cumulative distributions on the Preferred Units. No interest, or sum of
money in lieu of interest, shall be payable in respect of any distribution payment or payments on
the Preferred Units that may be in arrears. Holders of any Preferred Units that are issued after
the date of original issuance will be entitled to receive the same distributions as holders of any
Preferred Units issued on the date of original issuance.




          (b) When distributions are not paid in full upon the Preferred Units or any Parity Partnership
Units, or a sum sufficient for such payment is not set apart, all distributions declared upon the
Preferred Units and any Parity Partnership Units shall be declared ratably in proportion to the
respective amounts of distributions accumulated and unpaid on the Preferred Units and accumulated
and unpaid on such Parity Partnership Units. Except as set forth in the preceding sentence, unless
distributions on the Preferred Units equal to the full amount of accumulated and unpaid
distributions have been or contemporaneously are declared and paid, or declared and a sum
sufficient for the payment thereof has been or contemporaneously is set apart for such payment, for
all past




K-5









 







distribution periods, no distributions shall be declared or paid or set apart for payment by
the Partnership with respect to any Parity Partnership Units.




          (c) Unless full cumulative distributions (including all accumulated, accrued and unpaid
distributions) on the Preferred Units have been declared and paid, or declared and set apart for
payment, for all past distribution periods, no distributions (other than distributions paid in
Junior Partnership Units or options, warrants or rights to subscribe for or purchase Junior
Partnership Units) may be declared or paid or set apart for payment by the Partnership and no other
distribution of cash or other property may be declared or made, directly or indirectly, by the
Partnership with respect to any Junior Partnership Units, nor shall any Junior Partnership Units be
redeemed, purchased or otherwise acquired (except for a redemption, purchase or other acquisition
of Partnership Common Units made for purposes of an employee incentive or benefit plan of the
Partnership or any affiliate thereof, including, without limitation, the Previous General Partner
and its affiliates) for any consideration (or any monies be paid to or made available for a sinking
fund for the redemption of any such Junior Partnership Units), directly or indirectly, by the
Partnership (except by conversion into or exchange for Junior Partnership Units, or options,
warrants or rights to subscribe for or purchase Junior Partnership Units), nor shall any other cash
or other property be paid or distributed to or for the benefit of holders of Junior Partnership
Units.




          (d) Notwithstanding the foregoing provisions of this Section 4, the Partnership shall not be
prohibited from (i) declaring or paying or setting apart for payment any distribution on any Parity
Partnership Units or (ii) redeeming, purchasing or otherwise acquiring any Parity Partnership
Units, in each case, if such declaration, payment, redemption, purchase or other acquisition is
necessary to maintain the Previous General Partner’s qualification as a REIT.




     5. Liquidation Preference.



          (a) Upon any voluntary or involuntary liquidation, dissolution or winding up of the
Partnership, before any allocation of income or gain by the Partnership shall be made to or set
apart for the holders of any Junior Partnership Units, to the extent possible, the holders of
Preferred Units shall be entitled to be allocated income and gain to effectively enable them to
receive a liquidation preference (the “Liquidation Preference”) of (i) $25 per Preferred Unit, plus
(ii) accumulated, accrued and unpaid distributions (whether or not earned or declared) to the date
of final distribution to such holders; but such holders shall not be entitled to any further
allocation of income or gain. Until all holders of the Preferred Units have been paid the
Liquidation Preference in full, no allocation of income or gain will be made to any holder of
Junior Units upon the liquidation, dissolution or winding up of the Partnership.




          (b) If, upon any liquidation, dissolution or winding up of the Partnership, the assets of the
Partnership, or proceeds thereof, distributable among the holders of Preferred Partnership Units
shall be insufficient to pay in full the Liquidation Preference and liquidating payments on any
Parity Partnership Units, then following certain allocations made by the Partnership, such assets,
or the proceeds thereof, shall be distributed among the holders of Preferred Units and any such
Parity Partnership Units ratably in the same proportion as the respective amounts that would be
payable on such Preferred Units and any such Parity Partnership Units if all amounts payable
thereon were paid in full.




          (c) A voluntary or involuntary liquidation, dissolution or winding up of the Partnership will
not include a consolidation or merger of the Partnership with one or more partnerships,
corporations or other entities, or a sale or transfer of all or substantially all of the
Partnership’s assets.




          (d) Upon any liquidation, dissolution or winding up of the Partnership, after all allocations
shall have been made in full to the holders of Preferred Units and any Parity Partnership Units to
enable them to receive their respective liquidation preferences, any Junior Partnership Units shall
be entitled to receive any and all assets remaining to be paid or distributed, and the holders of
the Preferred Units and any Parity Partnership Units shall not be entitled to share therein.




K-6









 





     6. Redemption.



          (a) Except as set forth in Section 6(l) hereof, the Preferred Units may not be redeemed at the
option of the Partnership, and will not be required to be redeemed or repurchased by the
Partnership or the Previous General Partner except if a holder of a Preferred Unit effects a
Redemption, as provided for in Section 6(b) hereof. The Partnership or the Previous General
Partner may purchase Preferred Units from time to time in the open market, by tender or exchange
offer, in privately negotiated purchases or otherwise.




          (b) On or after the first (1st) anniversary of becoming a holder of Preferred Units, a
Qualifying Party shall have the right (subject to the terms and conditions set forth herein) to
require the Partnership to redeem all or a portion of the Preferred Units held by such Qualifying
Party (any Preferred Units tendered for Redemption being hereafter “Tendered Units”) in exchange (a
“Redemption”) for Common Shares issuable on, or the Cash Amount payable on, the Specified
Redemption Date, as determined by the Partnership in its sole discretion. Any Redemption shall be
exercised pursuant to a Notice of Redemption delivered to the General Partner by the Qualifying
Party when exercising the Redemption right (the “Tendering Party”).




          (c) If the Partnership elects to redeem Tendered Units for Common Shares rather than cash,
then the Partnership shall direct the Previous General Partner to issue and deliver such Common
Shares to the Tendering Party pursuant to the terms set forth in this Section 6, in which case, (i)
the Previous General Partner, acting as a distinct legal entity, shall assume directly the
obligation with respect thereto and shall satisfy the Tendering Party’s exercise of its Redemption
right, and (ii) such transaction shall be treated, for federal income tax purposes, as a transfer
by the Tendering Party of such Tendered Units to the Previous General Partner in exchange for
Common Shares. In making such election to cause the Previous General Partner to acquire Tendered
Units, the Partnership shall act in a fair, equitable and reasonable manner that neither prefers
one group or class of Tendering Parties over another nor discriminates against a group or class of
Tendering Parties. If the Partnership elects to redeem any number of Tendered Units for Common
Shares, rather than cash, on the Specified Redemption Date, the Tendering Party shall sell such
number of the Tendered Units to the Previous General Partner in exchange for a number of Common
Shares equal to the Common Shares Amount for such number of Tendered Units. The Tendering Party
shall submit (i) such information, certification or affidavit as the Previous General Partner may
reasonably require in connection with the application of the Ownership Limit and other restrictions
and limitations of the Charter to any such acquisition and (ii) such written representations,
investment letters, legal opinions or other instruments necessary, in the Previous General
Partner’s view, to effect compliance with the Securities Act. The Common Shares shall be delivered
by the Previous General Partner as duly authorized, validly issued, fully paid and non-assessable
shares, free of any pledge, lien, encumbrance or restriction other than the Ownership Limit and
other restrictions provided in the Charter, the Bylaws of the Previous General Partner, the
Securities Act and relevant state securities or “blue sky” laws. Neither any Tendering Party whose
Tendered Units are acquired by the Previous General Partner pursuant to this Section 6, any
Partner, any Assignee nor any other interested Person shall have any right to require or cause the
Previous General Partner or the General Partner to register, qualify or list any REIT Shares owned
or held by such Person, whether or not such Common Shares are issued pursuant to this Section 6,
with the SEC, with any state securities commissioner, department or agency, under the Securities
Act or the Exchange Act or with any stock exchange; provided, however, that this limitation shall
not be in derogation of any registration or similar rights granted pursuant to any other written
agreement between the Previous General Partner and any such Person. Notwithstanding any delay in
such delivery, the Tendering Party shall be deemed the owner of such Common Shares for all
purposes, including, without limitation, rights to vote or consent, receive dividends, and exercise
rights, as of the Specified Redemption Date. Common Shares issued upon an acquisition of the
Tendered Units by the Previous General Partner pursuant to this Section 6 may contain such legends
regarding restrictions under the Securities Act and applicable state securities laws as the
Previous General Partner in good faith determines to be necessary or advisable in order to ensure
compliance with such laws.




          (d) The Partnership shall have no obligation to effect any redemption unless and until a
Tendering Party has given the Partnership a Notice of Redemption. Each Notice of Redemption shall
be sent by hand delivery or by first class mail, postage prepaid, to AIMCO Properties, L.P., c/o
AIMCO-GP, Inc., 4582 South Ulster Street Parkway, Suite 1100, Denver, Colorado 80237, Attention:
Investor Relations, or to such other address as the Partnership shall specify in writing by
delivery to the holders of the Preferred Units in the same manner as that set forth above for
delivery of the Notice of Redemption. At any time prior to the Specified Redemption Date for any
Redemption, any holder may revoke its Notice of Redemption.




K-7









 








          (e) A Tendering Party shall have no right to receive distributions with respect to any
Tendered Units (other than the Cash Amount) paid after delivery of the Notice of Redemption,
whether or not the record date for such distribution precedes or coincides with such delivery of
the Notice of Redemption. If the Partnership elects to redeem any number of Tendered Units for
cash, the Cash Amount for such number of Tendered Units shall be delivered as a certified check
payable to the Tendering Party or, in the General Partner’s sole and absolute discretion, in
immediately available funds.




          (f) In the event that the Partnership declines to cause the Previous General Partner to
acquire all of the Tendered Units from the Tendering Party in exchange for Common Shares pursuant
to this Section 6 following receipt of a Notice of Redemption (a “Declination”):





          (1) The Previous General Partner or the General Partner shall give notice of such
Declination to the Tendering Party on or before the close of business on the Cut-Off Date.




          (2) The Partnership may elect to raise funds for the payment of the Cash Amount either
(a) by requiring that the Previous General Partner contribute such funds from the proceeds
of a registered public offering (a “Public Offering Funding”) by the Previous General
Partner of a number of Common Shares (“Registrable Shares”) equal to the Common Shares
Amount with respect to the Tendered Units or (b) from any other sources (including, but not
limited to, the sale of any Property and the incurrence of additional Debt) available to the
Partnership.




          (3) Promptly upon the General Partner’s receipt of the Notice of Redemption and the
Previous General Partner or the General Partner giving notice of the Partnership’s
Declination, the General Partner shall give notice (a “Single Funding Notice”) to all
Qualifying Parties then holding Preferred Units and having Redemption rights pursuant to
this Section 6 and require that all such Qualifying Parties elect whether or not to effect a
Redemption of their Preferred Units to be funded through such Public Offering Funding. In
the event that any such Qualifying Party elects to effect such a Redemption, it shall give
notice thereof and of the number of Preferred Units to be made subject thereon in writing to
the General Partner within ten (10) Business Days after receipt of the Single Funding
Notice, and such Qualifying Party shall be treated as a Tendering Party for all purposes of
this Section 6. In the event that a Qualifying Party does not so elect, it shall be deemed
to have waived its right to effect a Redemption for the next twelve months; provided,
however, that the Previous General Partner shall not be required to acquire Preferred Units
pursuant to this Section 6(f) more than twice within any twelve-month period.


Any proceeds from a Public Offering Funding that are in excess of the Cash Amount shall be for the
sole benefit of the Previous General Partner and/or the General Partner. The General Partner
and/or the Special Limited Partner shall make a Capital Contribution of such amounts to the
Partnership for an additional General Partner Interest and/or Limited Partner Interest. Any such
contribution shall entitle the General Partner and the Special Limited Partner, as the case may be,
to an equitable Percentage Interest adjustment.




          (g) Notwithstanding the provisions of this Section 6, the Previous General Partner shall not,
under any circumstances, elect to acquire Tendered Units in exchange for the Common Shares if such
exchange would be prohibited under the Charter.




          (h) Notwithstanding anything herein to the contrary, with respect to any Redemption pursuant
to this Section 6:





          (1) All Preferred Units acquired by the Previous General Partner pursuant to this
Section 6 hereof shall be contributed by the Previous General Partner to either or both of
the General Partner and the Special Limited Partner in such proportions as the Previous
General Partner, the General Partner and the Special Limited Partner shall determine.




          (2) Subject to the Ownership Limit, no Tendering Party may effect a Redemption for less
than five hundred (500) Preferred Units or, if such Tendering Party holds (as a Limited
Partner or,



K-8









 




economically, as an Assignee) less than five hundred (500) Preferred Units, all of the
Preferred Units held by such Tendering Party.





          (3) Each Tendering Party (a) may effect a Redemption only once in each fiscal quarter
of a Twelve-Month Period and (b) may not effect a Redemption during the period after the
Partnership Record Date with respect to a distribution and before the record date
established by the Previous General Partner for a distribution to its shareholders of some
or all of its portion of such Partnership distribution.




          (4) Notwithstanding anything herein to the contrary, with respect to any Redemption
or acquisition of Tendered Units by the Previous General Partner pursuant to this Section 6,
in the event that the Previous General Partner or the General Partner gives notice to all
Limited Partners (but excluding any Assignees) then owning Partnership Interests (a
“Primary Offering Notice”) that the Previous General Partner desires to effect a primary
offering of its equity securities then, unless the Previous General Partner and the General
Partner otherwise consent, commencement of the actions denoted in Section 6(f) hereof as to
a Public Offering Funding with respect to any Notice of Redemption thereafter received,
whether or not the Tendering Party is a Limited Partner, may be delayed until the earlier of
(a) the completion of the primary offering or (b) ninety (90) days following the giving of
the Primary Offering Notice.




          (5) Without the Consent of the Previous General Partner, no Tendering Party may effect
a Redemption within ninety (90) days following the closing of any prior Public Offering
Funding.




          (6) The consummation of such Redemption shall be subject to the expiration or
termination of the applicable waiting period, if any, under the Hart- Scott-Rodino Antitrust
Improvements Act of 1976, as amended.




          (7) The Tendering Party shall continue to own (subject, in the case of an Assignee, to
the provision of Section 11.5 of the Agreement) all Preferred Units subject to any
Redemption, and be treated as a Limited Partner or an Assignee, as applicable, with respect
to such Preferred Units for all purposes of the Agreement, until such Preferred Units are
either paid for by the Partnership pursuant to this Section 6 or transferred to the Previous
General Partner (or directly to the General Partner or Special Limited Partner) and paid
for, by the issuance of the REIT Shares, pursuant to this Section 6 on the Specified
Redemption Date. Until a Specified Redemption Date and an acquisition of the Tendered Units
by the Previous General Partner pursuant to this Section 6, the Tendering Party shall have
no rights as a shareholder of the Previous General Partner with respect to the REIT Shares
issuable in connection with such acquisition.


For purposes of determining compliance with the restrictions set forth in this Section 6(h), all
Partnership Common Units and Partnership Preferred Units, including Preferred Units, beneficially
owned by a Related Party of a Tendering Party shall be considered to be owned or held by such
Tendering Party.




          (i) In connection with an exercise of Redemption rights pursuant to this Section 6, the
Tendering Party shall submit the following to the General Partner, in addition to the Notice of
Redemption:





          (1) A written affidavit, dated the same date as the Notice of Redemption, (a)
disclosing the actual and constructive ownership, as determined for purposes of Code
Sections 856(a)(6) and 856(h), of Common Shares and any other classes or shares of the
Previous General Partner by (i) such Tendering Party and (ii) any Related Party and (b)
representing that, after giving effect to the Redemption, neither the Tendering Party nor
any Related Party will own Common Shares in excess of the Ownership Limit;




          (2) A written representation that neither the Tendering Party nor any Related Party has
any intention to acquire any additional Common Shares or any other class of shares of the
Previous General Partner prior to the closing of the Redemption on the Specified Redemption
Date; and



K-9









 






          (3) An undertaking to certify, at and as a condition to the closing of the Redemption
on the Specified Redemption Date, that either (a) the actual and constructive ownership of
Common Shares or any other class of shares of the Previous General Partner by the Tendering
Party and any Related Party remain unchanged from that disclosed in the affidavit required
by Section 6(i)(a) or (b)) after giving effect to the Redemption, neither the Tendering
Party nor any Related Party shall own Common Shares or other shares of the Previous General
Partner in violation of the Ownership Limit.



          (j) On or after the Specific Redemption Date, each holder of Preferred Units shall surrender
to the Partnership the certificate evidencing such holder’s Preferred Units, at the address to
which a Notice of Redemption is required to be sent. Upon such surrender of a certificate, the
Partnership shall thereupon pay the former holder thereof the applicable Cash Amount and/or deliver
Common Shares for the Preferred Units evidenced thereby. From and after the Specific Redemption
Date (i) distributions with respect to the Preferred Units shall cease to accumulate, (ii) the
Preferred Units shall no longer be deemed outstanding, (iii) the holders thereof shall cease to be
Partners to the extent of their interest in such Preferred Units, and (iv) all rights whatsoever
with respect to the Preferred Units shall terminate, except the right of the holders of the
Preferred Units to receive Cash Amount and/or Common Shares therefor, without interest or any sum
of money in lieu of interest thereon, upon surrender of their certificates therefor.




          (k) Notwithstanding the provisions of this Section 6, the Tendering Parties (i) shall not be
entitled to elect or effect a Redemption where the Redemption would consist of less than all the
Preferred Units held by Partners and, to the extent that the aggregate Percentage Interests of the
Limited Partners would be reduced, as a result of the Redemption, to less than one percent (1%) and
(ii) shall have no rights under the Agreement that would otherwise be prohibited under the Charter.
To the extent that any attempted Redemption would be in violation of this Section 6(k), it shall
be null and void ab initio, and the Tendering Party shall not acquire any rights or economic
interests in Common Shares otherwise issuable by the Previous General Partner hereunder.




          (l) Notwithstanding any other provision of the Agreement, on and after the date on which the
aggregate Percentage Interests of the Limited Partners (other than the Special Limited Partner) are
less than one percent (1%), the Partnership shall have the right, but not the obligation, from time
to time and at any time to redeem any and all outstanding Limited Partner Interests (other than the
Special Limited Partner’s Limited Partner Interest) by treating any Limited Partner as a Tendering
Party who has delivered a Notice of Redemption pursuant to this Section 6 for the amount of
Preferred Units to be specified by the General Partner, in its sole and absolute discretion, by
notice to such Limited Partner that the Partnership has elected to exercise its rights under this
Section 6(l). Such notice given by the General Partner to a Limited Partner pursuant to this
Section 6(l) shall be treated as if it were a Notice of Redemption delivered to the General Partner
by such Limited Partner. For purposes of this Section 6(l), (a) any Limited Partner (whether or
not eligible to be a Tendering Party) may, in the General Partner’s sole and absolute discretion,
be treated as a Tendering Party and (b) the provisions of Sections 6(f)(1), 6(h)(2), 6(h)(3) and
6(h)(5) hereof shall not apply, but the remainder of this Section shall apply, mutatis mutandis.




     7. Conversion.



          (a) (i) Subject to and upon compliance with the provisions of this Section 7, a holder of
Class Four Partnership Preferred Units shall have the right, at such holder’s option, to convert
such units, in whole or in part, into the number of Partnership Common Units per Class Four
Partnership Preferred Unit obtained by dividing the Liquidation Preference (excluding any
accumulated, accrued and unpaid distributions) per Class Four Partnership Preferred Unit by the
Conversion Price in effect at the time and on the date provided for in subparagraph (b)(iv) of this
Section 7. In order to exercise the conversion right, the holder of each Class Four Partnership
Preferred Unit to be converted shall surrender the certificate representing such unit, duly
endorsed or assigned to the Partnership or in blank, at the office of the Transfer Agent,
accompanied by written notice to the Partnership that the holder thereof elects to convert such
Class Four Partnership Preferred Unit.




          (ii) With respect to any Class Four Partnership Preferred Units that have been issued and
outstanding for at least two (2) years, if, as of any date, the Internal Rate of Return exceeds
12.5%, then the Partnership shall have the right, but not the obligation, to cause such Class Four
Partnership Preferred Units to be converted, in whole or in part, into the number of Partnership
Common Units per Class Four Partnership Preferred Unit obtained by dividing the Liquidation
Preference (excluding any accumulated, accrued and unpaid distributions)




K-10









 







per Class Four Partnership Preferred Unit by the Conversion Price in effect at the time and on
the date provided for in subparagraph (b)(iv) of this Section 7. In order to exercise the
conversion right, the Partnership shall send notice of such conversion to each holder of record of
Class Four Partnership Preferred Units no later than five Business Days after a date on which the
Internal Rate of Return exceeds 12.5%. Such notice shall be provided by facsimile or, if facsimile
is not available, then by first class mail, postage prepaid, at such holders’ address as the same
appears on the records of the Partnership. Any notice which was transmitted or mailed in the
manner herein provided shall be conclusively presumed to have been duly given on the date received
by the holder. Each such notice shall state, as appropriate: (1) the date of conversion, which
date may be any date within one business day following the date on which the notice is transmitted
or mailed; (2) the number of units of Class Four Partnership Preferred Units to be converted and,
if fewer than all such units held by such holder are to be converted, the number of such units to
be converted; and (3) the then current Conversion Price. Upon receiving such notice of conversion,
each such holder shall promptly surrender the certificates representing such Class Four Partnership
Preferred Units as are being converted on the conversion date, duly endorsed or assigned to the
Partnership or in blank, at the office of the Transfer Agent; provided, however, that the failure
to so surrender any such certificates shall not in any way affect the validity of the conversion of
the underlying Class Four Partnership Preferred Units into Partnership Common Units.



          (b) (i) Unless the Partnership Common Units issuable on conversion are to be issued in the
same name as the name in which such Class Four Partnership Preferred Units are registered, each
such unit surrendered following conversion shall be accompanied by instruments of transfer, in form
satisfactory to the Partnership, duly executed by the holder or such holder’s duly authorized
representative, and an amount sufficient to pay any transfer or similar tax (or evidence reasonably
satisfactory to the Partnership demonstrating that such taxes have been paid).





          (ii) A holder of Class Four Partnership Preferred Units shall, as of the date of the
conversion of such units to Partnership Common Units, be entitled to receive a cash payment
in respect of any distributions (whether or not earned or declared) that are accumulated,
accrued and unpaid thereon as of the time of such conversion, provided, however, that
payment in respect of any distributions on such units that has been declared but for which
the Distribution Payment Date has not yet been reached shall be payable as of such
Distribution Payment Date. Except as provided above, the Partnership shall make no payment
or allowance for unpaid distributions, whether or nor in arrears, on converted units.




          (iii) As promptly as practicable after the surrender of certificates for Class Four
Partnership Preferred Units as aforesaid, and in any event no later than three business
days after the date of such surrender, the Partnership shall issue and deliver at such
office to such holder, or send on such holders’ written order, a certificate or certificates
for the number of full Partnership Common Units issuable upon the conversion of such Class
Four Partnership Preferred Units in accordance with the provisions of this Section 7, and
any fractional interest in respect of a Partnership Common Unit arising upon such
conversion shall be settled as provided in paragraph (c) of this Section 7.




          (iv) Each conversion shall be deemed to have been effected (x) in the case of a
conversion pursuant to subparagraph (a)(i) of this Section 7 immediately prior to the close
of business on the date on which the certificates for Class Four Partnership Preferred Units
shall have been surrendered and such notice received by the Partnership as provided in
subparagraph (a)(i) of this Section 7, and (y) in the case of a conversion pursuant to
subparagraph (a)(ii) of this Section 7, immediately prior to the close of business on the
date identified as the conversion date in the notice of conversion sent by the Partnership
pursuant to subparagraph (a)(ii) of this Section 7; and, in the case of (x) or (y), the
person or persons in whose name or names any certificate or certificates for Partnership
Common Units shall be issuable upon such conversion shall be deemed to have become the
holder or holders of record of the units represented thereby at such time on such date, and
such conversion shall be at the Conversion Price in effect at such time on such date, unless
the transfer books of the Partnership shall be closed on that date, in which event such
person or persons shall be deemed to become such holder or holders of record at the close of
business on the next succeeding day on which such transfer books are open, but such
conversion shall be at the Conversion Price in effect on the date in the notice of
conversion sent by the Partnership as aforesaid.



K-11









 





          (c) No fractional Partnership Common Units or scrip representing fractions of a Partnership
Common Unit shall be issued upon conversion of the Class Four Partnership Preferred Units. Instead
of any fractional interest in a Partnership Common Unit that would otherwise be deliverable upon
the conversion of Class Four Partnership Preferred Units, the Partnership shall pay to the holder
of such units an amount of cash equal to the product of (i) such fraction and (ii) the value of a
REIT Share as of the date of conversion. If more than one of any holder’s units shall be converted
at one time, the number of full Partnership Common Units issuable upon conversion thereof shall be
computed on the basis of the aggregate number of Class Four Partnership Preferred Units so
converted.




          (d) If the Partnership shall be a party to any transaction (including with limitation a
merger, consolidation, statutory exchange, sale of all or substantially all of the Partnership’s
assets or recapitalization of the Partnership Common Units, but excluding any transaction as to
which a charge in the Adjustment Factor would be effected) (each of the foregoing being referred to
herein as a “Transaction”), in each case, as a result of which Partnership Common Units shall be
converted into the right to receive securities or other property (including cash or any combination
thereof), each Class Four Partnership Preferred Unit which is not converted into the right to
receive securities or other property in connection with such Transaction shall thereupon be
convertible into the kind and amount of securities and other property (including cash or any
combination thereof) receivable upon such consummation by a holder of that number of Partnership
Common Units into which Class Four Partnership Preferred Units were convertible immediately prior
to such Transaction. The Partnership shall not be a party to any transaction unless the terms of
such Transaction are consistent with the provisions of this paragraph (d), and it shall not consent
or agree to the occurrence of any Transaction until the Partnership has entered into an agreement
with the successor or purchasing entity, as the case may be, for the benefit of the holders of the
Class Four Partnership Preferred Units that will contain provisions enabling the holders of the
Class Four Partnership Preferred Units that remain outstanding after such Transaction to convert
into the consideration received by holders of Partnership Common Units at the Conversion Price in
effect immediately prior to such Transaction. The provisions of this Paragraph (d) shall apply to
successive Transactions.




          (e) Whenever the Conversion Price is adjusted as herein provided (whether pursuant to
paragraph (d) of this Section 7 or as a result of a change in the Adjustment Factor), the General
Partner shall promptly file with the Transfer Agent an officer’s certificate setting forth the
Conversion Price after such adjustment and setting forth a brief statement of the facts requiring
such adjustment which certificate shall be conclusive evidence of the correctness of such
adjustment absent manifest error. Promptly after delivery of such certificate, the General Partner
shall prepare a notice of such adjustment of the Conversion Price setting forth the adjusted
Conversion Price and the effective date such adjustment becomes effective and shall mail such
notice of such adjustment of the Conversion Price to each holder of Class Four Partnership
Preferred Units at such holder’s address as shown on the records of the Partnership.




          (f) In any case in which an adjustment to the Adjustment Factor shall become effective
immediately after the effective date of an event, retroactive to the record date, if any, for such
event, the Partnership may defer until the occurrence of such event (A) issuing to the holder of
any Class Four Partnership Preferred Units converted after such record date and before the
occurrence of such event the additional Partnership Common Units issuable upon such conversion by
reason of the adjustment required by such event over and above the Partnership Common Units
issuable upon such conversion before giving effect to such adjustment and (B) paying to such holder
any amount of cash in lieu of any fraction pursuant to Section 7(c).




          (g) There shall be no adjustment of the Conversion Price in case of the issuance of any unit
of the Partnership except as specifically set forth in the definition of “Adjustment Factor” or in
this Section 7. In addition, notwithstanding any other provision contained in the definition of
“Adjustment Factor” or in this Section 7, there shall be no adjustment of the Conversion Price upon
the payment of any cash distributions on any units of the Partnership.




          (h) If the Partnership shall take any action affecting the Partnership Common Units, other
than action described in the definition of “Adjustment Factor” or in this Section 7 that, in the
opinion of the General Partner would materially adversely affect the conversion rights of the
holders of Class Four Partnership Preferred Units, the Conversion Price for the Class Four
Partnership Preferred Units may be adjusted, to the extent permitted




K-12









 







by law in such manner, if any, and at such time as the General Partner, in its sole
discretion, may determine to be equitable under the circumstances.




          (i) The Partnership will pay any and all documentary stamp or similar issue or transfer taxes
payable in respect of the issue or delivery of Partnership Common Units or other securities or
property on conversion of Class Four Partnership Preferred Units pursuant hereto; provided,
however, that the Partnership shall not be required to pay any tax that may be payable in respect
of any transfer involved in the issue or delivery of Partnership Common Units or other securities
or property in a name other than that of the holder of the Class Four Partnership Preferred Units
to be converted, and no such issue or delivery shall be made unless and until the person requesting
such issue or delivery has paid to the Partnership the amount of any such tax or established, to
the reasonable satisfaction of the Partnership, that such tax has been paid.




          (j) In addition to any other adjustment required hereby, to the extent permitted by law, the
Partnership from time to time may decrease the Conversion Price by any amount, permanently or for a
period of at least twenty Business Days, if the decrease is irrevocable during the period.




          (k) For purposes of the definition of “Twelve-Month Period” in the Agreement, any holder of
Class Four Partnership Preferred Units that have been converted to Partnership Common Units shall
be deemed to have acquired such Partnership Common Units when such Class Four Partnership Units
were acquired.




     8. Status of Reacquired Units.



          All Preferred Units which shall have been issued and reacquired in any manner by the
Partnership shall be deemed cancelled and no longer outstanding.




     9. General.



          The ownership of the Preferred Units shall be evidenced by one or more certificates in the
form of Annex II hereto. The General Partner shall amend Exhibit A to the Agreement from time to
time to the extent necessary to reflect accurately the issuance of, and subsequent redemption, or
any other event having an effect on the ownership of, the Preferred Units.




     10. Allocations of Income and Loss.



          For each taxable year, each holder of Preferred Units will be allocated a portion of the Net
Income and Net Loss of the Partnership equal to the portion of the Net Income and Net Loss of the
Partnership that would be allocated to such holder pursuant to Article 6 of the Agreement if such
holder held a number of Partnership Common Units equal to (i) the number of Preferred Units held by
such holder, multiplied by (ii) 0.625. Upon liquidation, dissolution or winding up of the
Partnership, the Partnership shall endeavor to allocate income and gain to the holders of the
Preferred Units such that the Capital Accounts related to the Preferred Units are equal to their
Liquidation Preference.




     11. Voting Rights.



          Except as otherwise required by applicable law or in the Agreement, the holders of the
Preferred Units will have the same voting rights as holders of the Partnership Common Units. As
long as any Preferred Units are outstanding, in addition to any other vote or consent of partners
required by law or by the Agreement, the affirmative vote or consent of holders of at least 50% of
the outstanding Preferred Units will be necessary for effecting any amendment of any of the
provisions of the Partnership Unit Designation of the Preferred Units that materially and adversely
affects the rights or preferences of the holders of the Preferred Units. The creation or issuance
of any class or series of Partnership Units, including, without limitation, any Partnership Units
that may have rights junior to, on a parity with, or senior or superior to the Preferred Units,
will not be deemed to materially and adversely affect the rights or preferences of the holders of
Preferred Units. With respect to the exercise of the above-described voting rights, each Preferred
Unit will have one (1) vote per Preferred Unit.




K-13









 








     12. Restrictions on Transfer.



          Preferred Units are subject to the same restrictions on transfer applicable to Common Units,
as set forth in the Agreement.





K-14









 








ANNEX I

TO EXHIBIT K




NOTICE OF REDEMPTION




	 	 	 
	To:

	 	AIMCO Properties, L.P.
	 

	 	c/o AIMCO-GP, Inc.
	 

	 	4582 South Ulster Street Parkway, Suite 1100
	 

	 	Denver, Colorado 80237
	 

	 	Attention: Investor Relations






     The undersigned Limited Partner or Assignee hereby tenders for redemption Class Four
Partnership Preferred Units in AIMCO Properties, L.P. in accordance with the terms of the Agreement
of Limited Partnership of AIMCO Properties, L.P., dated as of July 29, 1994, as it may be amended
and supplemented from time to time (the “Agreement”). All capitalized terms used herein and not
otherwise defined shall have the respective meanings ascribed thereto in the Partnership Unit
Designation of the Class Four Partnership Preferred Units. The undersigned Limited Partner or
Assignee:




          (a) if the Partnership elects to redeem such Class Four Partnership Preferred Units
for Common Shares rather than cash, hereby irrevocably transfers, assigns, contributes and
sets over to the Previous General Partner all of the undersigned Limited Partner’s or
Assignee’s right, title and interest in and to such Class Four Partnership Preferred Units;




          (b) undertakes (i) to surrender such Class Four Partnership Preferred Units and any
certificate therefor at the closing of the Redemption contemplated hereby and (ii) to
furnish to the Previous General Partner, prior to the Specified Redemption Date:




               (1) A written affidavit, dated the same date as this Notice of Redemption, (a)
disclosing the actual and constructive ownership, as determined for purposes of Code
Sections 856(a)(6) and 856(h), of Common Shares by (i) the undersigned Limited
Partner or Assignee and (ii) any Related Party and (b) representing that, after
giving effect to the Redemption, neither the undersigned Limited Partner or Assignee
nor any Related Party will own Common Shares in excess of the Ownership Limit;




               (2) A written representation that neither the undersigned Limited Partner or
Assignee nor any Related Party has any intention to acquire any additional Common
Shares prior to the closing of the Redemption contemplated hereby on the Specified
Redemption Date; and




               (3) An undertaking to certify, at and as a condition to the closing of the
Redemption contemplated hereby on the Specified Redemption Date, that either (a) the
actual and constructive ownership of Common Shares by the undersigned Limited
Partner or Assignee and any Related Party remain unchanged from that disclosed in
the affidavit required by paragraph (1) above, or (b) after giving effect to the
Redemption contemplated hereby, neither the undersigned Limited Partner or Assignee
nor any Related Party shall own Common Shares in violation of the Ownership Limit.




          (c) directs that the certificate representing the Common Shares, or the certified
check representing the Cash Amount, in either case, deliverable upon the closing of the
Redemption contemplated hereby be delivered to the address specified below;




          (d) represents, warrants, certifies and agrees that:




               (i) the undersigned Limited Partner or Assignee has, and at the closing of the
Redemption will have, good, marketable and unencumbered title to such Preferred
Units, free and clear of the rights or interests of any other person or entity;



K-I-1









 






               (ii) the undersigned Limited Partner or Assignee has, and at the closing of the
Redemption will have, the full right, power and authority to tender and surrender
such Preferred Units as provided herein; and




               (iii) the undersigned Limited Partner or Assignee has obtained the consent or
approval of all persons and entities, if any, having the right to consent to or
approve such tender and surrender.



Dated:                                         




	 	 	 	 	 
	 

	 	Name of Limited Partner or Assignee:
	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	(Signature of Limited Partner or Assignee)	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	(Street Address)	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	(City)      (State)      (Zip Code)	 	 
	 
	 	 	 	 
	 

	 	Signature Guaranteed by	 	 
	 
	 	 	 	 
	 

	 	 	 	 




(continued on next page)




K-I-2









 







Issue check payable to or Certificates in the name of:                                                             



Please insert social security or identifying number:                                                            



NOTICE: THE SIGNATURE OF THIS NOTICE OF REDEMPTION MUST CORRESPOND WITH THE NAME(S) AS WRITTEN
UPON THE FACE OF THE CERTIFICATE FOR THE CLASS FOUR PREFERRED UNITS WHICH ARE BEING REDEEMED IN
EVERY PARTICULAR WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.



THE SIGNATURE SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION, (Banks, Stockbrokers,
Savings and Loan Associations and Credit Unions), WITH MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM PURSUANT TO SEC RULE 17Ad-15.





K-I-3









 








ANNEX II

TO EXHIBIT K




FORM OF UNIT CERTIFICATE

OF

CLASS FOUR PARTNERSHIP PREFERRED UNITS



[THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION, UNLESS THE TRANSFEROR DELIVERS TO THE PARTNERSHIP
AN OPINION OF COUNSEL SATISFACTORY TO THE PARTNERSHIP, IN FORM AND SUBSTANCE SATISFACTORY TO THE
PARTNERSHIP, TO THE EFFECT THAT THE PROPOSED SALE, TRANSFER OR OTHER DISPOSITION MAY BE EFFECTED
WITHOUT REGISTRATION UNDER THE ACT AND UNDER APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS. IN
ADDITION,]  THE LIMITED PARTNERSHIP INTEREST EVIDENCED BY THIS CERTIFICATE MAY BE SOLD
OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE RESTRICTIONS ON TRANSFER SET FORTH IN THE
AGREEMENT OF LIMITED PARTNERSHIP OF AIMCO PROPERTIES, L.P., DATED AS OF JULY 29, 1994, AS IT MAY BE
AMENDED AND/OR SUPPLEMENTED FROM TIME TO TIME, A COPY OF WHICH MAY BE OBTAINED FROM AIMCO-GP, INC,
THE GENERAL PARTNER, AT ITS PRINCIPAL EXECUTIVE OFFICE.




Certificate Number                     




AIMCO PROPERTIES, L.P.

FORMED UNDER THE LAWS OF THE STATE OF DELAWARE




	 	 	 
	This certifies that
	 	 
	 

	 	 
	 
	 	 
	is the owner of
	 	 
	 

	 	 





CLASS FOUR PARTNERSHIP PREFERRED UNITS

OF

AIMCO PROPERTIES, L.P.,



transferable on the books of the Partnership in person or by duly authorized attorney on the
surrender of this Certificate properly endorsed. This Certificate and the Class Four Partnership
Preferred Units represented hereby are issued and shall be held subject to all of the provisions of
the Agreement of Limited Partnership of AIMCO Properties, L.P., as the same may be amended and/or
supplemented from time to time.



IN WITNESS WHEREOF, the undersigned has signed this Certificate.




	 	 	 	 	 
	Dated:

	 	By	 	 
	 

	 	 	 	 





K-II-1









 






ASSIGNMENT




     For Value Received,                                         hereby sells, assigns and transfers unto
                                                            
                                                             Class Four Partnership Preferred Unit(s) represented by the within Certificate, and does
hereby irrevocably constitute and appoint the General Partner of AIMCO Properties, L.P. as its
Attorney to transfer said Class Four Partnership Preferred Unit(s) on the books of AIMCO
Properties, L.P. with full power of substitution in the premises.



Dated:                                         




	 	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 
	 	 	 	 
	 	 	Signature Guaranteed by:
	 
	 	 	 	 
	 	 	 




NOTICE: THE SIGNATURE OF THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S) AS WRITTEN UPON THE FACE
OF THE CERTIFICATE IN EVERY PARTICULAR WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.



THE SIGNATURE SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION, (Banks, Stockbrokers,
Savings and Loan Associations and Credit Unions), WITH MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM PURSUANT TO SEC RULE 17Ad-15.





K-II-2









 








EXHIBIT
L

PARTNERSHIP UNIT DESIGNATION OF

THE CLASS FIVE PARTNERSHIP PREFERRED UNITS OF

AIMCO PROPERTIES, L.P.




     1. Number of Units and Designation.



          A class of Partnership Preferred Units is hereby designated as “Class Five Partnership
Preferred Units,” and the number of Partnership Preferred Units constituting such class shall be
150,000.




     2. Definitions.



          Capitalized terms used and not otherwise defined herein shall have the meanings assigned
thereto in the Agreement, as modified by this Partnership Unit Designation and the defined terms
used herein. For purposes of this Partnership Unit Designation, the following terms shall have the
respective meanings ascribed below:




          “Agreement” shall mean the Agreement of Limited Partnership of the Partnership, as amended,
supplemented or restated from time to time.




          “Assignee” shall mean a Person to whom one or more Class Five Partnership Preferred Units have
been Transferred in a manner permitted under the Agreement, but who has not become a Substituted
Limited Partner, and who has the rights set forth in Section 11.5 of the Agreement.




          “Class Five Partnership Preferred Unit” shall mean a Partnership Preferred Unit with the
designations, preferences and relative, participating, optional or other special rights, powers and
duties as are set forth in this Partnership Unit Designation.




          “Fair Market Value” shall mean, at any time and with respect to any Class Five Partnership
Preferred Units, the greater of (i) that portion of the capital account balance of the holder of
such Class Five Partnership Preferred Units at that time attributable solely to such Class Five
Partnership Preferred Units, or (ii) zero.




          “Notice of Redemption” shall mean a Notice of Redemption in the form of Annex I to this
Partnership Unit Designation.




          “Partnership” shall mean AIMCO Properties, L.P., a Delaware limited partnership.




          “Transfer Agent” shall mean such transfer agent as may be designated by the Partnership or its
designee as the transfer agent for the Class Five Partnership Preferred Units; provided, that if
the Partnership has not designated a transfer agent, then the Partnership shall act as the Transfer
Agent for the Class Five Partnership Preferred Units.




     3. Cash Distributions.



          At any time that the Partnership pays cash distributions to holders of Partnership Common
Units, the Partnership shall pay cash distributions to holders of the Class Five Partnership
Preferred Units in an amount per Class Five Partnership Preferred Unit equal to the per unit
distribution on the Partnership Common Units; provided, that distributions upon liquidation of the
Partnership shall be made in accordance with Section 13.2 of the Agreement. Holders of Class Five
Partnership Preferred Units will not be entitled to receive any other distributions. If a record
date is established by the General Partner for the payment of distributions in respect of
Partnership Common Units, the same date shall be the record date for payment of distributions in
respect of the Class Five Partnership Preferred Units. With respect to the first distribution paid
to holders of Class Five Partnership Preferred Units after the initial issuance thereof, such
distribution shall be pro rated based on the portion of the period in respect of which such
distribution is paid that such that such Class Five Partnership Preferred Units were outstanding.




L-1









 








     4. Redemption.



          (a) The Class Five Partnership Preferred Units may be redeemed at the option of the
Partnership at any time at a redemption price payable in cash equal to the Fair Market Value of
such Class Five Partnership Preferred Units.




          (b) The redemption date shall be selected by the Partnership, shall be specified in a notice
of redemption, and shall be not less than 5 days nor more than 60 days after the date notice of
redemption is sent by the Partnership.




          (c) If the Partnership shall redeem Class Five Partnership Preferred Units, notice of such
redemption shall be given to each holder of record of the Class Five Partnership Preferred Units to
be redeemed. Such notice shall be provided by first class mail, postage prepaid, at such holder’s
address as the same appears on the records of the Partnership. Neither the failure to mail any
notice required by this paragraph (c), nor any defect therein or in the mailing thereof to any
particular holder, shall affect the sufficiency of the notice or the validity of the proceedings
for redemption with respect to the other holders. Any notice which has been mailed in the manner
herein provided shall be conclusively presumed to have been duly given on the date mailed whether
or not the holder receives the notice. Each such notice shall state, as appropriate: (i) the
redemption date; (ii) the place or places at which certificates for such shares are to be
surrendered for cash; and (iii) the redemption price payable on such redemption date. Notice
having been mailed as aforesaid, from and after the redemption date (unless the Partnership shall
fail to make available the amount of cash necessary to effect such redemption), (i) such Class Five
Partnership Preferred Units shall no longer be deemed to be outstanding, and (ii) all rights of the
holders thereof as holders of Class Five Partnership Preferred Units shall cease except the right
to receive the cash payable upon such redemption, without interest thereon, upon surrender of their
certificates if so required. As promptly as practicable after the surrender in accordance with
such notice of the certificates for any such Class Five Partnership Preferred Units to be so
redeemed (properly endorsed or assigned for transfer, if the Partnership shall so require and the
notice shall so state), such certificates shall be exchanged for cash (without interest thereon)
for which such shares have been redeemed in accordance with such notice.




     5. Conversion.



          (a) Subject to and upon compliance with the provisions of this Section 5, on or after December
21, 2000, a holder of Class Five Partnership Preferred Units shall have the right, at such
holder’s option, to convert such units, in whole or in part, into the number of Partnership Common
Units obtained by dividing (i) the Fair Market Value of the Class Five Partnership Preferred Units
converted, by (ii) the value of a REIT Share (assuming, for such purpose, that the Valuation Date
is the date of conversion of such units). In order to exercise the conversion right, the holder of
each Class Five Partnership Preferred Unit to be converted shall surrender the certificate
representing such unit, duly endorsed or assigned to the Partnership or in blank at the office of
the Transfer Agent, accompanied by written notice to the Partnership that the holder thereof elects
to covert such Class Five Partnership Preferred Unit.




          (b) (i) Unless the Partnership Common Units issuable on conversion are to be issued in the
same name as the name in which such Class Five Partnership Preferred Units are registered, each
such unit surrendered following conversion shall be accompanied by instruments of transfer, in form
satisfactory to the Partnership, duly executed by the holder or such holder’s duly authorized
representative, and an amount sufficient to pay any transfer or similar tax (or evidence reasonably
satisfactory to the Partnership demonstrating that such taxes have been paid).




               (ii) As promptly as practicable after the surrender of certificates for Class Five
Partnership Preferred Units as aforesaid, and in any event no later than three business days after
the date of such surrender, the Partnership shall issue and deliver at such office to such holder,
or send on such holders’ written order, a certificate or certificates for the number of full
Partnership Common Units issuable upon the conversion of such Class Five Partnership Preferred
Units in accordance with the provisions of this Section 5, and any fractional interest in respect
of a Partnership Common Unit arising upon such conversion shall be settled as provided in paragraph
(c) of this Section 5.



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               (iii) Each conversion shall be deemed to have been effected immediately prior to the close of
business on the date on which the certificates for Class Five Partnership Preferred Units shall
have been surrendered to the Partnership for conversion as provided in paragraph (a) of this
Section 5; and the person or persons in whose name or names any certificate or certificates for
Partnership Common Units shall be issuable upon such conversion shall be deemed to have become the
holder or holders of record of the units represented thereby at such time on such date unless the
transfer books of the Partnership shall be closed on that date, in which event such person or
persons shall be deemed to become such holder or holders of record at the close of business on the
next succeeding day on which such transfer books are open.



          (c) No fractional Partnership Common Units or scrip representing fractions of a Partnership
Common Unit shall be issued upon conversion of the Class Five Partnership Preferred Units.
Instead of any fractional interest in a Partnership Common Unit that would otherwise be deliverable
upon the conversion of Class Five Partnership Preferred Units, the Partnership shall pay to the
holder of such units an amount of cash equal to the Fair Market Value of such fractional interest
as of the date of conversion. If more than one of any holder’s units shall be converted at one
time, the number of full Partnership Common Units issuable upon conversion thereof shall be
computed on the basis of the aggregate number of Class Five Partnership Preferred Units so
converted.




          (d) If the Partnership shall be a party to any transaction (including with limitation a
merger, consolidation, statutory exchange, sale of all or substantially all of the Partnership’s
assets or recapitalization of the Partnership Common Units, but excluding any transaction as to
which a change in the Adjustment Factor would be effected) (each of the foregoing being referred to
herein as a “Transaction”), in each case, as a result of which Partnership Common Units shall be
converted into the right to receive securities or other property (including cash or any combination
thereof), each Class Five Partnership Preferred Unit which is not converted into the right to
receive securities or other property in connection with such Transaction shall thereupon be
convertible into the kind and amount of securities and other property (including cash or any
combination thereof) receivable upon such consummation by a holder of that number of Partnership
Common Units into which a Class Five Partnership Preferred Unit was convertible immediately prior
to such Transaction. The Partnership shall not be a party to any Transaction unless the terms of
such Transaction are consistent with the provisions of this paragraph (d), and it shall not consent
or agree to the occurrence of any Transaction until the Partnership has entered into an agreement
with the successor or purchasing entity, as the case may be, for the benefit of the holders of the
Class Five Partnership Preferred Units that will contain provisions enabling the holders of Class
Five Partnership Preferred Units that remain outstanding after such Transaction to convert into the
consideration received by holders of Partnership Common Units at the conversion price in effect
immediately prior to such Transaction. The provisions of this paragraph (d) shall apply to
successive Transactions.




          (e) The Partnership will pay any and all documentary stamp or similar issue or transfer taxes
payable in respect of the issue or delivery of Partnership Common Units or other securities or
property on conversion of Class Five Partnership Preferred Units pursuant hereto; provided,
however, that the Partnership shall not be required to pay any tax that may be payable in respect
of any transfer involved in the issue or delivery of Partnership Common Units or other securities
or property in a name other than that of the holder of the Class Five Partnership Preferred Units
to be converted, and no such issue or delivery shall be made unless and until the person requesting
such issue or delivery has paid to the Partnership the amount of any such tax or established, to
the reasonable satisfaction of the Partnership, that such tax has been paid.




     6. Status of Reacquired Units.



          All Class Five Partnership Preferred Units which shall have been issued and reacquired in any
manner by the Partnership shall be deemed cancelled and no longer outstanding.




     7. General.



          The ownership of the Class Five Partnership Preferred Units shall be evidenced by one or more
certificates in the form of Annex II hereto. The General Partner shall amend Exhibit A to the
Agreement from time to time to the extent necessary to reflect accurately the issuance of, and
subsequent redemption, or any other event having an effect on the ownership of, the Class Five
Partnership Preferred Units.




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     8. Allocations of Income and Loss; Capital Accounts.



          Upon initial issuance, the capital account balance attributable to the Class Five Partnership
Preferred Units shall be zero. Thereafter, for each Fiscal Year, the Class Five Partnership
Preferred Units shall be allocated a portion of the Net Income and Net Loss of the Partnership
equal to the portion of the Net Income and Net Loss of the Partnership that would be allocated to
such Class Five Partnership Preferred Units pursuant to Article 6 of the Agreement if the Class
Five Partnership Preferred Units were Partnership Common Units. In addition, (i) not more than 60
days prior to a redemption of Class Five Partnership Preferred Units pursuant to Section 4 hereof
and (ii) at any time after December 21, 2001, upon (x) a sale of substantially all of the assets of
the Partnership or a liquidation, dissolution, or winding up of the Partnership or (y) in the event
the Gross Asset Value of any Partnership Asset is adjusted pursuant to subsection (b) or (c) of the
definition of “Gross Asset Value” in the Agreement, to the extent possible, the Partnership shall
first allocate Partnership gain (and, to the extent necessary, gross income) among the Class Five
Partnership Preferred Units (the “Special Allocation”) in an amount equal to that necessary to
permit each Class Five Partnership Preferred Unit to receive, upon a liquidation, dissolution, or
winding up of the Partnership pursuant to Section 13.2 of the Agreement, an amount of assets of the
Partnership equal to the amount of assets that would be receivable with respect to a Partnership
Common Unit, as determined on a per unit basis. Notwithstanding the foregoing, the Class Five
Partnership Preferred Units shall not be entitled to receive, and shall not receive, the Special
Allocation unless and until the Class I High Performance Partnership Units have been allocated the
full amount of Partnership income and gain required under Section 5 of the Partnership Unit
Designation for the Class I High Performance Partnership Units.




     9. Voting Rights.



          Except as otherwise required by applicable law or in the Agreement, the holders of the Class
Five Partnership Preferred Units will have the same voting rights as holders of the Partnership
Common Units. As long as any Class Five Partnership Preferred Units are outstanding, in addition to
any other vote or consent of partners required by law or by the Agreement, the affirmative vote or
consent of holders of at least 50% of the outstanding Class Five Partnership Preferred Units will
be necessary for effecting any amendment of any of the provisions of the Partnership Unit
Designation of the Class Five Partnership Preferred Units that materially and adversely affects the
rights or preferences of the holders of the Class Five Partnership Preferred Units. The creation
or issuance of any class or series of Partnership Units, including, without limitation, any
Partnership Units that may have rights junior to, on a parity with, or senior or superior to the
Class Five Partnership Preferred Units, will not be deemed to materially and adversely affect the
rights or preferences of the holders of the Class Five Partnership Preferred Units. With respect
to the exercise of the above-described voting rights, each Class Five Partnership Preferred Unit
will have one (1) vote per Class Five Partnership Preferred Unit.




     10. Restrictions on Transfer.



          Class Five Partnership Preferred Units are subject to the same restrictions on transfer
applicable to Partnership Common Units, as set forth in the Agreement.




     11. Ranking.



          Any class or series of Partnership Units of the Partnership shall be deemed to rank:




          (a) prior or senior to the Class Five Partnership Preferred Units, as to the payment of
distributions and as to the distribution of assets upon liquidation, dissolution or winding up, if
(i) the holders of such class or series shall be entitled to the receipt of distributions and of
amounts distributable upon liquidation, dissolution or winding up, as the case may be, in
preference or priority to the holders of Class Five Partnership Preferred Units or (ii) such class
or series of Partnership Units shall be Class G Partnership Preferred Units, Class One Partnership
Preferred Units, Class Two Partnership Preferred Units, Class Three Partnership Preferred Units or
Class Four Partnership Preferred Units or (the Partnership Units referred to in clauses (i) and
(ii) of this paragraph being hereinafter referred to, collectively, as “Senior Partnership Units”);




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          (b) on a parity with the Class Five Partnership Preferred Units, as to the payment of
distributions and as to the distribution of assets upon liquidation, dissolution or winding up,
whether or not the distribution rates, distribution payment dates or redemption or liquidation
prices per unit or other denomination thereof be different from those of the Class Five Partnership
Preferred Units if (i) such class or series of Partnership Units shall be Partnership Common Units
or Class I High Performance Partnership Units or (ii) the holders of such class or series of
Partnership Units and the Class Five Partnership Preferred Units shall be entitled to the receipt
of distributions and of amounts distributable upon liquidation, dissolution or winding up in
proportion to their respective amounts of accrued and unpaid distributions per unit or other
denomination or liquidation preferences, without preference or priority one over the other (the
Partnership Units referred to in clauses (i) and (ii) of this paragraph being hereinafter referred
to, collectively, as “Parity Partnership Units”); and




          (c) junior to the Class Five Partnership Preferred Units, as to the payment of distributions
and as to the distribution of assets upon liquidation, dissolution or winding up, if the holders of
Class Five Partnership Preferred Units shall be entitled to receipt of distributions or of amounts
distributable upon liquidation, dissolution or winding up, as the case may be, in preference or
priority to the holders of such class or series of Partnership Units (the Partnership Units
referred to in this paragraph being hereinafter referred to, collectively, as “Junior Partnership
Units”).





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ANNEX I

TO EXHIBIT L




FORM OF UNIT CERTIFICATE

OF

CLASS FIVE PARTNERSHIP PREFERRED UNITS



THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION, UNLESS THE TRANSFEROR DELIVERS TO THE PARTNERSHIP
AN OPINION OF COUNSEL SATISFACTORY TO THE PARTNERSHIP, IN FORM AND SUBSTANCE SATISFACTORY TO THE
PARTNERSHIP, TO THE EFFECT THAT THE PROPOSED SALE, TRANSFER OR OTHER DISPOSITION MAY BE EFFECTED
WITHOUT REGISTRATION UNDER THE ACT AND UNDER APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS. IN
ADDITION, THE LIMITED PARTNERSHIP INTEREST EVIDENCED BY THIS CERTIFICATE MAY BE SOLD OR OTHERWISE
TRANSFERRED ONLY IN COMPLIANCE WITH THE RESTRICTIONS ON TRANSFER SET FORTH IN THE AGREEMENT OF
LIMITED PARTNERSHIP OF AIMCO PROPERTIES, L.P., DATED AS OF JULY 29, 1994, AS IT MAY BE AMENDED
AND/OR SUPPLEMENTED FROM TIME TO TIME, A COPY OF WHICH MAY BE OBTAINED FROM AIMCO-GP, INC, THE
GENERAL PARTNER, AT ITS PRINCIPAL EXECUTIVE OFFICE.

Certificate Number




AIMCO PROPERTIES, L.P.

FORMED UNDER THE LAWS OF THE STATE OF DELAWARE




	 	 	 	 	 
	This certifies that

	 	 	 	 
	 

	 	 	 	 
	is the owner of
	 	 	 	 
	 

	 	 	 	 





CLASS FIVE PARTNERSHIP PREFERRED UNITS

OF

AIMCO PROPERTIES, L.P.,




          transferable on the books of the Partnership in person or by duly authorized attorney on the
surrender of this Certificate properly endorsed. This Certificate and the Class Five Partnership
Preferred Units represented hereby are issued and shall be held subject to all of the provisions of
the Agreement of Limited Partnership of AIMCO Properties, L.P., as the same may be amended and/or
supplemented from time to time.



IN WITNESS WHEREOF, the undersigned has signed this Certificate.




	 	 	 	 	 	 	 
	Dated:

	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 
	 

	 	 	 	 	 	Name:
	 

	 	 	 	 	 	Title:






L-I-1









 






ASSIGNMENT




     For Value Received,                                                             hereby sells, assigns
and transfers unto
                                                             Class Five Partnership Preferred
Unit(s) represented by the within Certificate, and does hereby irrevocably constitute and appoint
the General Partner of AIMCO Properties, L.P. as its Attorney to transfer said Class Five
Partnership Preferred Unit(s) on the books of AIMCO Properties, L.P. with full power of
substitution in the premises.



Dated: ____________________




	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 
	 	 	 	 	 	 
	 	 	Signature Guaranteed by:	 	 
	 

	 	 	 	 	 	 





     NOTICE: THE SIGNATURE OF THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S) AS WRITTEN UPON THE FACE
OF THE CERTIFICATE IN EVERY PARTICULAR WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.



     THE SIGNATURE SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION, (Banks, Stockbrokers,
Savings and Loan Associations and Credit Unions), WITH MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM PURSUANT TO SEC RULE 17Ad-15.




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EXHIBIT M




PARTNERSHIP UNIT DESIGNATION OF

THE CLASS SIX PARTNERSHIP PREFERRED UNITS OF

AIMCO PROPERTIES, L.P.




     1. Number of Units and Designation.



          A class of Partnership Preferred Units is hereby designated as “Class Six Partnership
Preferred Units,” and the number of Partnership Preferred Units constituting such class shall be
900,000.




     2. Definitions.



          Capitalized terms used and not otherwise defined herein shall have the meanings assigned
thereto in the Agreement, as modified by this Partnership Unit Designation and the defined terms
used herein. For purposes of this Partnership Unit Designation, the following terms shall have the
respective meanings ascribed below:




          “Adjustment Factor” means 1.0; provided, however, that in the event that:




          (i) the Previous General Partner (a) declares or pays a dividend on its outstanding REIT
Shares in REIT Shares or makes a distribution to all holders of its outstanding REIT Shares in REIT
Shares, (b) splits or subdivides its outstanding REIT Shares or (c) effects a reverse stock split
or otherwise combines its outstanding REIT Shares into a smaller number of REIT Shares, the
Adjustment Factor shall be adjusted by multiplying the Adjustment Factor previously in effect by a
fraction, (i) the numerator of which shall be the number of REIT Shares issued and outstanding on
the record date for such dividend, distribution, split, subdivision, reverse split or combination
(assuming for such purposes that such dividend, distribution, split, subdivision, reverse split or
combination has occurred as of such time) and (ii) the denominator of which shall be the actual
number of REIT Shares (determined without the above assumption) issued and outstanding on the
record date for such dividend, distribution, split, subdivision, reverse split or combination;




          (ii) the Previous General Partner distributes any rights, options or warrants to all holders
of its REIT Shares to subscribe for or to purchase or to otherwise acquire REIT Shares (or other
securities or rights convertible into, exchangeable for or exercisable for REIT Shares) at a price
per share less than the Value of a REIT Share on the record date for such distribution (each a
“Distributed Right”), then the Adjustment Factor shall be adjusted by multiplying the
Adjustment Factor previously in effect by a fraction (a) the numerator of which shall be the number
of REIT Shares issued and outstanding on the record date plus the maximum number of REIT Shares
purchasable under such Distributed Rights and (b) the denominator of which shall be the number of
REIT Shares issued and outstanding on the record date plus a fraction (1) the numerator of which is
the maximum number of REIT Shares purchasable under such Distributed Rights times the minimum
purchase price per REIT Share under such Distributed Rights and (2) the denominator of which is the
Value of a REIT Share as of the record date; provided, however, that, if any such
Distributed Rights expire or become no longer exercisable, then the Adjustment Factor shall be
adjusted, effective retroactive to the date of distribution of the Distributed Rights, to reflect a
reduced maximum number of REIT Shares or any change in the minimum purchase price for the purposes
of the above fraction; and




          (iii) the Previous General Partner shall, by dividend or otherwise, distribute to all holders
of its REIT Shares evidences of its indebtedness or assets (including securities, but excluding any
dividend or distribution referred to in subsection (i) above), which evidences of indebtedness or
assets relate to assets not received by the Previous General Partner, the General Partner and/or
the Special Limited Partner pursuant to a pro rata distribution by the Partnership, then the
Adjustment Factor shall be adjusted to equal the amount determined by multiplying the Adjustment
Factor in effect immediately prior to the close of business on the date fixed for determination of
shareholders entitled to receive such distribution by a fraction (i) the numerator shall be such
Value of a REIT Share on the date fixed for such determination and (ii) the denominator shall be
the Value of a REIT Share on the dates fixed for such determination less the then fair market value
(as determined by the General Partner, whose




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determination shall be conclusive) of the portion of the evidences of indebtedness or assets
so distributed applicable to one REIT Share.




          Any adjustments to the Adjustment Factor shall become effective immediately after the
effective date of such event, retroactive to the record date, if any, for such event.




          “Agreement” shall mean the Agreement of Limited Partnership of the Partnership, as amended,
supplemented or restated from time to time.




          “Assignee” shall mean a Person to whom one or more Preferred Units have been Transferred in a
manner permitted under the Agreement, but who has not become a Substituted Limited Partner, and who
has the rights set forth in Section 11.5 of the Agreement.




          “Cash Amount” shall mean, with respect to any Tendered Units, cash in an amount equal to the
sum of (x) the product of (i) the number of Tendered Units, multiplied by (ii) the Liquidation
Preference for a Preferred Unit, plus, (y) if positive, the product of (i) the number of Tendered
Units, multiplied by (ii) the Liquidation Preference for a Preferred Unit (excluding any
accumulated, accrued or unpaid distributions), multiplied by (iii) the quotient obtained by
dividing (a) the amount by which the Market Value of a Common Share, calculated as of the date of
receipt by the General Partner of a Notice of Redemption for such Tendered Units, exceeds $50, by
(b) $50.




          “Class Six Partnership Preferred Unit” or “Preferred Unit” shall mean a Partnership Preferred
Unit with the designations, preferences and relative, participating, optional or other special
rights, powers and duties as are set forth in this Partnership Unit Designation.




          “Common Shares” shall mean the shares of Class A Common Stock of the Previous General Partner.




          “Common Shares Amount” shall mean, with respect to any Tendered Units, a number of Common
Shares equal to the quotient obtained by dividing (i) the Cash Amount for such Tendered Units, by
(ii) the Market Value of a Common Share calculated as of the date of receipt by the General Partner
of a Notice of Redemption for such Tendered Units.




          “Conversion Price” shall mean, as of any date, the quotient obtained by dividing $50 by the
Adjustment Factor in effect as of such date.




          “Current Market Price” of a share of any Equity Stock shall mean the closing price, regular
way on such day, or, if no sale takes place on such day, the average of the reported closing bid
and asked prices, regular way, on such day, in either case as reported on the principal national
securities exchange on which such securities are listed or admitted for trading, or, if such
security is not quoted on any national securities exchange, on the NASDAQ National Market or if
such security is not quoted on the NASDAQ National Market, the average of the closing bid and asked
prices on such day in the over-the-counter market as reported by NASDAQ or, if bid and asked prices
for each security on such day shall not have been reported through NASDAQ, the average of the bid
and asked prices on such day as furnished by any New York Stock Exchange or National Association of
Securities Dealers, Inc. member firm regularly making a market in such security selected for such
purpose by the Chief Executive Officer of the General Partner or the Board of Directors of the
General Partner or if any class or series of securities are not publicly traded, the fair value of
the shares of such class as determined reasonably and in good faith by the Board of Directors of
the General Partner.




          “Cut-Off Date” shall mean the fifth (5th) Business Day after the General Partner’s receipt of
a Notice of Redemption.




          “Declination” shall have the meaning set forth in Section 6(f) of this Partnership Unit
Designation.




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          “Distribution Payment Date” shall have the meaning set forth in Section 4(a) of this
Partnership Unit Designation.




          “Equity Stock” shall mean one or more shares of any class of capital stock of the Previous
General Partner.




          “Internal Rate of Return” shall mean, as of any determination date, the effective discount
rate under which the present value of the Inflows associated with an outstanding Class Six
Partnership Preferred Unit equals $25. For purposes of calculation of Internal Rate of Return,
“Inflows” shall mean (a) all distributions (whether paid in cash or property) that have been
received in respect of such unit, (b) the cash payment in respect of distributions payable on such
unit pursuant to Section 7(b)(iii) hereof if such unit were converted to Partnership Common Units
on the determination date, and (c) the amount by which the Market Value of a REIT Share, as of the
determination date, exceeds the Conversion Price then in effect. For purposes of calculating the
amounts of any Inflows, all distributions received in property shall be deemed to have a value
equal to the Market Value of such distributions as of the date such distribution is received.
Neither the fact of any transfer of any units of the Class Six Partnership Preferred Units nor the
amount of any consideration received by the holder thereof or paid by any successor holder in
connection with any transfer shall affect the calculation of Internal Rate of Return.




          “Junior Partnership Units” shall have the meaning set forth in Section 3(c) of this
Partnership Unit Designation.




          “Liquidation Preference” shall have the meaning set forth in Section 5(a) of this Partnership
Unit Designation.




          “Market Value” shall mean, as of any calculation date and with respect to any share of stock,
the average of the daily market prices for ten (10) consecutive trading days (or twenty (20)
consecutive Trading Days for purposes of calculating “Internal Rate of Return”) immediately
preceding the calculation date. The market price for any such trading day shall be:





          (i) if the shares are listed or admitted to trading on any securities exchange or The
Nasdaq Stock Market’s National Market System, the closing price, regular way, on such day,
or if no such sale takes place on such day, the average of the closing bid and asked prices
on such day, in either case as reported in the principal consolidated transaction reporting
system,




          (ii) if the shares are not listed or admitted to trading on any securities exchange or
The Nasdaq Stock Market’s National Market System, the last reported sale price on such day
or, if no sale takes place on such day, the average of the closing bid and asked prices on
such day, as reported by a reliable quotation source designated by the General Partner, or




          (iii) if the shares are not listed or admitted to trading on any securities exchange
or The Nasdaq Stock Market’s National Market System and no such last reported sale price or
closing bid and asked prices are available, the average of the reported high bid and low
asked prices on such day, as reported by a reliable quotation source designated by the
General Partner, or if there shall be no bid and asked prices on such day, the average of
the high bid and low asked prices, as so reported, on the most recent day (not more than ten
(10) days prior to the date in question) for which prices have been so reported;


provided, however, that, if there are no bid and asked prices reported during the ten (10) days
prior to the date in question, the Market Value of the shares shall be determined by the General
Partner acting in good faith on the basis of such quotations and other information as it considers,
in its reasonable judgment, appropriate; provided, further, that the General Partner is authorized
to adjust the market price for any trading day as may be necessary, in its judgment, to reflect an
event that occurs at any time after the commencement of such ten day period that would unfairly
distort the Market Value, including, without limitation, a stock dividend, split, subdivision,
reverse stock split, or share combination.




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          “Notice of Redemption” shall mean a Notice of Redemption in the form of Annex I to this
Partnership Unit Designation.




          “Parity Partnership Units” shall have the meaning set forth in Section 3(b) of this
Partnership Unit Designation.




          “Partnership” shall mean AIMCO Properties, L.P., a Delaware limited partnership.




          “Primary Offering Notice” shall have the meaning set forth in Section 6(h)(4) of this
Partnership Unit Designation.




          “Public Offering Funding” shall have the meaning set forth in Section 6(f)(2) of this
Partnership Unit Designation.




          “Redemption” shall have the meaning set forth in Section 6(b) of this Partnership Unit
Designation.




          “Registrable Shares” shall have the meaning set forth in Section 6(f)(2) of this Partnership
Unit Designation.




          “Senior Partnership Units” shall have the meaning set forth in Section 3(a) of this
Partnership Unit Designation.




          “Single Funding Notice” shall have the meaning set forth in Section 6(f)(3) of this
Partnership Unit Designation.




          “Specified Redemption Date” shall mean, with respect to any Redemption, the later of (a) the
tenth (10th) Business Day after the receipt by the General Partner of a Notice of Redemption or (b)
in the case of a Declination followed by a Public Offering Funding, the Business Day next following
the date of the closing of the Public Offering Funding; provided, however, that the Specified
Redemption Date, as well as the closing of a Redemption, or an acquisition of Tendered Units by the
Previous General Partner pursuant to Section 5 hereof, on any Specified Redemption Date, may be
deferred, in the General Partner’s sole and absolute discretion, for such time (but in any event
not more than one hundred fifty (150) days in the aggregate) as may reasonably be required to
effect, as applicable, (i) a Public Offering Funding or other necessary funding arrangements, (ii)
compliance with the Securities Act or other law (including, but not limited to, (a) state “blue
sky” or other securities laws and (b) the expiration or termination of the applicable waiting
period, if any, under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended) and
(iii) satisfaction or waiver of other commercially reasonable and customary closing conditions and
requirements for a transaction of such nature.




          “Tendering Party” shall have the meaning set forth in Section 6(b) hereof.




          “Tendered Units” shall have the meaning set forth in Section 6(b) hereof.




          “Trading Day” shall mean, when used with respect to the Closing Price of a share of any Equity
Stock, (i) if the Equity Stock is listed or admitted to trading on the NYSE, a day on which the
NYSE is open for the transaction of business, (ii) if the Equity Stock is not listed or admitted to
trading on the NYSE but is listed or admitted to trading on another national securities exchange or
automated quotation system, a day on which the principal national securities exchange or automated
quotation system, as the case may be, on which the Equity Stock is listed or admitted to trading is
open for the transaction of business, or (iii) if the Equity Stock is not listed or admitted to
trading on any national securities exchange or automated quotation system, any day other than a
Saturday, a Sunday or a day on which banking institutions in the State of New York are authorized
or obligated by law or executive order to close.




          “Transfer Agent” shall mean such transfer agent as may be designated by the Partnership or its
designee as the transfer agent for the Class Six Partnership Preferred Units; provided, that if the
Partnership has not




M-4









 







designated a transfer agent then the Partnership shall act as the transfer agent for the Class
Six Partnership Preferred Units.




     3. Ranking.



          Any class or series of Partnership Units of the Partnership shall be deemed to rank:




          (a) prior or senior to the Class Six Partnership Preferred Units, as to the payment of
distributions and as to the distribution of assets upon liquidation, dissolution or winding up, if
the holders of such class or series shall be entitled to the receipt of distributions and of
amounts distributable upon liquidation, dissolution or winding up, as the case may be, in
preference or priority to the holders of Class Six Partnership Preferred Units (the Partnership
Units referred to in this paragraph being hereinafter referred to, collectively, as “Senior
Partnership Units”);




          (b) on a parity with the Class Six Partnership Preferred Units, as to the payment of
distributions and as to the distribution of assets upon liquidation, dissolution or winding up,
whether or not the distribution rates, distribution payment dates or redemption or liquidation
prices per unit or other denomination thereof be different from those of the Class Six Partnership
Preferred Units if (i) such class or series of Partnership Units shall be Class G Partnership
Preferred Units, Class One Partnership Preferred Units, Class Two Partnership Preferred Units,
Class Three Partnership Preferred Units or Class Four Partnership Preferred Units or (ii) the
holders of such class or series of Partnership Units and the Class Six Partnership Preferred Units
shall be entitled to the receipt of distributions and of amounts distributable upon liquidation,
dissolution or winding up in proportion to their respective amounts of accrued and unpaid
distributions per unit or other denomination or liquidation preferences, without preference or
priority one over the other (the Partnership Units referred to in clauses (i) and (ii) of this
paragraph being hereinafter referred to, collectively, as “Parity Partnership Units”); and




          (c) junior to the Class Six Partnership Preferred Units, as to the payment of distributions
and as to the distribution of assets upon liquidation, dissolution or winding up, if (i) such class
or series of Partnership Units shall be Partnership Common Units, Class I High Performance
Partnership Units or Class Five Partnership Preferred Units or (ii) the holders of Class Six
Partnership Preferred Units shall be entitled to receipt of distributions or of amounts
distributable upon liquidation, dissolution or winding up, as the case may be, in preference or
priority to the holders of such class or series of Partnership Units (the Partnership Units
referred to in clauses (i) and (ii) of this paragraph being hereinafter referred to, collectively,
as “Junior Partnership Units”).




     4. Quarterly Cash Distributions.



          (a) Holders of Preferred Units will be entitled to receive, when and as declared by the
General Partner, quarterly cash distributions at the rate of $0.53125 per Preferred Unit. Any such
distributions will be cumulative from the date of original issue, whether or not in any
distribution period or periods such distributions have been declared, and shall be payable
quarterly on February 15, May 15, August 15 and November 15 of each year (or, if not a Business
Day, the next succeeding Business Day) (each a “Distribution Payment Date”), commencing on the
first such date occurring after the date of original issue. If the Preferred Units are issued on
any day other than a Distribution Payment Date, the first distribution payable on such Preferred
Units will be prorated for the portion of the quarterly period that such Preferred Units are
outstanding on the basis of twelve 30-day months and a 360-day year. Distributions will be payable
in arrears to holders of record as they appear on the records of the Partnership at the close of
business on February 1, May 1, August 1 or November 1, as the case may be, immediately preceding
each Distribution Payment Date. Holders of Preferred Units will not be entitled to receive any
distributions in excess of cumulative distributions on the Preferred Units. No interest, or sum of
money in lieu of interest, shall be payable in respect of any distribution payment or payments on
the Preferred Units that may be in arrears. Holders of any Preferred Units that are issued after
the date of original issuance will be entitled to receive the same distributions as holders of any
Preferred Units issued on the date of original issuance.




          (b) When distributions are not paid in full upon the Preferred Units or any Parity Partnership
Units, or a sum sufficient for such payment is not set apart, all distributions declared upon the
Preferred Units and any Parity Partnership Units shall be declared ratably in proportion to the
respective amounts of distributions accumulated and unpaid on the Preferred Units and accumulated
and unpaid on such Parity Partnership Units.




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Except as set forth in the preceding sentence, unless distributions on the Preferred Units
equal to the full amount of accumulated and unpaid distributions have been or contemporaneously are
declared and paid, or declared and a sum sufficient for the payment thereof has been or
contemporaneously is set apart for such payment, for all past distribution periods, no
distributions shall be declared or paid or set apart for payment by the Partnership with respect to
any Parity Partnership Units.




          (c) Unless full cumulative distributions (including all accumulated, accrued and unpaid
distributions) on the Preferred Units have been declared and paid, or declared and set apart for
payment, for all past distribution periods, no distributions (other than distributions paid in
Junior Partnership Units or options, warrants or rights to subscribe for or purchase Junior
Partnership Units) may be declared or paid or set apart for payment by the Partnership and no other
distribution of cash or other property may be declared or made, directly or indirectly, by the
Partnership with respect to any Junior Partnership Units, nor shall any Junior Partnership Units be
redeemed, purchased or otherwise acquired (except for a redemption, purchase or other acquisition
of Partnership Common Units made for purposes of an employee incentive or benefit plan of the
Partnership or any affiliate thereof, including, without limitation, the Previous General Partner
and its affiliates) for any consideration (or any monies be paid to or made available for a sinking
fund for the redemption of any such Junior Partnership Units), directly or indirectly, by the
Partnership (except by conversion into or exchange for Junior Partnership Units, or options,
warrants or rights to subscribe for or purchase Junior Partnership Units), nor shall any other cash
or other property be paid or distributed to or for the benefit of holders of Junior Partnership
Units.




          (d) Notwithstanding the foregoing provisions of this Section 4, the Partnership shall not be
prohibited from (i) declaring or paying or setting apart for payment any distribution on any Parity
Partnership Units or (ii) redeeming, purchasing or otherwise acquiring any Parity Partnership
Units, in each case, if such declaration, payment, redemption, purchase or other acquisition is
necessary to maintain the Previous General Partner’s qualification as a REIT.




     5. Liquidation Preference.



          (a) Upon any voluntary or involuntary liquidation, dissolution or winding up of the
Partnership, before any allocation of income or gain by the Partnership shall be made to or set
apart for the holders of any Junior Partnership Units, to the extent possible, the holders of
Preferred Units shall be entitled to be allocated income and gain to effectively enable them to
receive a liquidation preference (the “Liquidation Preference”) of (i) $25 per Preferred Unit, plus
(ii) accumulated, accrued and unpaid distributions (whether or not earned or declared) to the date
of final distribution to such holders; but such holders shall not be entitled to any further
allocation of income or gain. Until all holders of the Preferred Units have been paid the
Liquidation Preference in full, no allocation of income or gain will be made to any holder of
Junior Units upon the liquidation, dissolution or winding up of the Partnership.




          (b) If, upon any liquidation, dissolution or winding up of the Partnership, the assets of the
Partnership, or proceeds thereof, distributable among the holders of Preferred Partnership Units
shall be insufficient to pay in full the Liquidation Preference and liquidating payments on any
Parity Partnership Units, then following certain allocations made by the Partnership, such assets,
or the proceeds thereof, shall be distributed among the holders of Preferred Units and any such
Parity Partnership Units ratably in the same proportion as the respective amounts that would be
payable on such Preferred Units and any such Parity Partnership Units if all amounts payable
thereon were paid in full.




          (c) A voluntary or involuntary liquidation, dissolution or winding up of the Partnership will
not include a consolidation or merger of the Partnership with one or more partnerships,
corporations or other entities, or a sale or transfer of all or substantially all of the
Partnership’s assets.




          (d) Upon any liquidation, dissolution or winding up of the Partnership, after all allocations
shall have been made in full to the holders of Preferred Units and any Parity Partnership Units to
enable them to receive their respective liquidation preferences, any Junior Partnership Units shall
be entitled to receive any and all assets remaining to be paid or distributed, and the holders of
the Preferred Units and any Parity Partnership Units shall not be entitled to share therein.




M-6









 








     6. Redemption.



          (a) Except as set forth in Section 6(l) hereof, the Preferred Units may not be redeemed at the
option of the Partnership, and will not be required to be redeemed or repurchased by the
Partnership or the Previous General Partner except if a holder of a Preferred Unit effects a
Redemption, as provided for in Section 6(b) hereof. The Partnership or the Previous General
Partner may purchase Preferred Units from time to time in the open market, by tender or exchange
offer, in privately negotiated purchases or otherwise.




          (b) On or after the first (1st) anniversary of becoming a holder of Preferred Units, a
Qualifying Party shall have the right (subject to the terms and conditions set forth herein) to
require the Partnership to redeem all or a portion of the Preferred Units held by such Qualifying
Party (any Preferred Units tendered for Redemption being hereafter “Tendered Units”) in exchange (a
“Redemption”) for Common Shares issuable on, or the Cash Amount payable on, the Specified
Redemption Date, as determined by the Partnership in its sole discretion. Any Redemption shall be
exercised pursuant to a Notice of Redemption delivered to the General Partner by the Qualifying
Party when exercising the Redemption right (the “Tendering Party”).




          (c) If the Partnership elects to redeem Tendered Units for Common Shares rather than cash,
then the Partnership shall direct the Previous General Partner to issue and deliver such Common
Shares to the Tendering Party pursuant to the terms set forth in this Section 6, in which case, (i)
the Previous General Partner, acting as a distinct legal entity, shall assume directly the
obligation with respect thereto and shall satisfy the Tendering Party’s exercise of its Redemption
right, and (ii) such transaction shall be treated, for federal income tax purposes, as a transfer
by the Tendering Party of such Tendered Units to the Previous General Partner in exchange for
Common Shares. In making such election to cause the Previous General Partner to acquire Tendered
Units, the Partnership shall act in a fair, equitable and reasonable manner that neither prefers
one group or class of Tendering Parties over another nor discriminates against a group or class of
Tendering Parties. If the Partnership elects to redeem any number of Tendered Units for Common
Shares, rather than cash, on the Specified Redemption Date, the Tendering Party shall sell such
number of the Tendered Units to the Previous General Partner in exchange for a number of Common
Shares equal to the Common Shares Amount for such number of Tendered Units. The Tendering Party
shall submit (i) such information, certification or affidavit as the Previous General Partner may
reasonably require in connection with the application of the Ownership Limit and other restrictions
and limitations of the Charter to any such acquisition and (ii) such written representations,
investment letters, legal opinions or other instruments necessary, in the Previous General
Partner’s view, to effect compliance with the Securities Act. The Common Shares shall be delivered
by the Previous General Partner as duly authorized, validly issued, fully paid and non-assessable
shares, free of any pledge, lien, encumbrance or restriction other than the Ownership Limit and
other restrictions provided in the Charter, the Bylaws of the Previous General Partner, the
Securities Act and relevant state securities or “blue sky” laws. Neither any Tendering Party whose
Tendered Units are acquired by the Previous General Partner pursuant to this Section 6, any
Partner, any Assignee nor any other interested Person shall have any right to require or cause the
Previous General Partner or the General Partner to register, qualify or list any REIT Shares owned
or held by such Person, whether or not such Common Shares are issued pursuant to this Section 6,
with the SEC, with any state securities commissioner, department or agency, under the Securities
Act or the Exchange Act or with any stock exchange; provided, however, that this limitation shall
not be in derogation of any registration or similar rights granted pursuant to any other written
agreement between the Previous General Partner and any such Person. Notwithstanding any delay in
such delivery, the Tendering Party shall be deemed the owner of such Common Shares for all
purposes, including, without limitation, rights to vote or consent, receive dividends, and exercise
rights, as of the Specified Redemption Date. Common Shares issued upon an acquisition of the
Tendered Units by the Previous General Partner pursuant to this Section 6 may contain such legends
regarding restrictions under the Securities Act and applicable state securities laws as the
Previous General Partner in good faith determines to be necessary or advisable in order to ensure
compliance with such laws.




          (d) The Partnership shall have no obligation to effect any redemption unless and until a
Tendering Party has given the Partnership a Notice of Redemption. Each Notice of Redemption shall
be sent by hand delivery or by first class mail, postage prepaid, to AIMCO Properties, L.P., c/o
AIMCO-GP, Inc., 4582 South Ulster Street Parkway, Suite 1100, Denver, Colorado 80237, Attention:
Investor Relations, or to such other address as the Partnership shall specify in writing by
delivery to the holders of the Preferred Units in the same manner as that set forth above for
delivery of the Notice of Redemption. At any time prior to the Specified Redemption Date for any
Redemption, any holder may revoke its Notice of Redemption.




M-7









 





          (e) A Tendering Party shall have no right to receive distributions with respect to any
Tendered Units (other than the Cash Amount) paid after delivery of the Notice of Redemption,
whether or not the record date for such distribution precedes or coincides with such delivery of
the Notice of Redemption. If the Partnership elects to redeem any number of Tendered Units for
cash, the Cash Amount for such number of Tendered Units shall be delivered as a certified check
payable to the Tendering Party or, in the General Partner’s sole and absolute discretion, in
immediately available funds.




          (f) In the event that the Partnership declines to cause the Previous General Partner to
acquire all of the Tendered Units from the Tendering Party in exchange for Common Shares pursuant
to this Section 6 following receipt of a Notice of Redemption (a “Declination”):





          (1) The Previous General Partner or the General Partner shall give notice of
such Declination to the Tendering Party on or before the close of business on the
Cut-Off Date.




          (2) The Partnership may elect to raise funds for the payment of the Cash Amount
either (a) by requiring that the Previous General Partner contribute such funds from
the proceeds of a registered public offering (a “Public Offering Funding”) by the
Previous General Partner of a number of Common Shares (“Registrable Shares”) equal
to the Common Shares Amount with respect to the Tendered Units or (b) from any other
sources (including, but not limited to, the sale of any Property and the incurrence
of additional Debt) available to the Partnership.




          (3) Promptly upon the General Partner’s receipt of the Notice of Redemption and
the Previous General Partner or the General Partner giving notice of the
Partnership’s Declination, the General Partner shall give notice (a “Single Funding
Notice”) to all Qualifying Parties then holding Preferred Units and having
Redemption rights pursuant to this Section 6 and require that all such Qualifying
Parties elect whether or not to effect a Redemption of their Preferred Units to be
funded through such Public Offering Funding. In the event that any such Qualifying
Party elects to effect such a Redemption, it shall give notice thereof and of the
number of Preferred Units to be made subject thereon in writing to the General
Partner within ten (10) Business Days after receipt of the Single Funding Notice,
and such Qualifying Party shall be treated as a Tendering Party for all purposes of
this Section 6. In the event that a Qualifying Party does not so elect, it shall be
deemed to have waived its right to effect a Redemption for the next twelve months;
provided, however, that the Previous General Partner shall not be required to
acquire Preferred Units pursuant to this Section 6(f) more than twice within any
twelve-month period.


Any proceeds from a Public Offering Funding that are in excess of the Cash Amount shall be for the
sole benefit of the Previous General Partner and/or the General Partner. The General Partner
and/or the Special Limited Partner shall make a Capital Contribution of such amounts to the
Partnership for an additional General Partner Interest and/or Limited Partner Interest. Any such
contribution shall entitle the General Partner and the Special Limited Partner, as the case may be,
to an equitable Percentage Interest adjustment.




          (g) Notwithstanding the provisions of this Section 6, the Previous General Partner shall not,
under any circumstances, elect to acquire Tendered Units in exchange for the Common Shares if such
exchange would be prohibited under the Charter.




          (h) Notwithstanding anything herein to the contrary, with respect to any Redemption pursuant
to this Section 6:





          (1) All Preferred Units acquired by the Previous General Partner pursuant to
this Section 6 hereof shall be contributed by the Previous General Partner to either
or both of the General Partner and the Special Limited Partner in such proportions
as the Previous General Partner, the General Partner and the Special Limited Partner
shall determine.



M-8









 






          (2) Subject to the Ownership Limit, no Tendering Party may effect a Redemption
for less than five hundred (500) Preferred Units or, if such Tendering Party holds
(as a Limited Partner or, economically, as an Assignee) less than five hundred (500)
Preferred Units, all of the Preferred Units held by such Tendering Party.




          (3) Each Tendering Party (a) may effect a Redemption only once in each fiscal
quarter of a Twelve-Month Period and (b) may not effect a Redemption during the
period after the Partnership Record Date with respect to a distribution and before
the record date established by the Previous General Partner for a distribution to
its shareholders of some or all of its portion of such Partnership distribution.




          (4) Notwithstanding anything herein to the contrary, with respect to any
Redemption or acquisition of Tendered Units by the Previous General Partner pursuant
to this Section 6, in the event that the Previous General Partner or the General
Partner gives notice to all Limited Partners (but excluding any Assignees) then
owning Partnership Interests (a “Primary Offering Notice”) that the Previous
General Partner desires to effect a primary offering of its equity securities then,
unless the Previous General Partner and the General Partner otherwise consent,
commencement of the actions denoted in Section 6(f) hereof as to a Public Offering
Funding with respect to any Notice of Redemption thereafter received, whether or not
the Tendering Party is a Limited Partner, may be delayed until the earlier of (a)
the completion of the primary offering or (b) ninety (90) days following the giving
of the Primary Offering Notice.




          (5) Without the Consent of the Previous General Partner, no Tendering Party may
effect a Redemption within ninety (90) days following the closing of any prior
Public Offering Funding.




          (6) The consummation of such Redemption shall be subject to the expiration or
termination of the applicable waiting period, if any, under the Hart- Scott-Rodino
Antitrust Improvements Act of 1976, as amended.




          (7) The Tendering Party shall continue to own (subject, in the case of an
Assignee, to the provision of Section 11.5 of the Agreement) all Preferred Units
subject to any Redemption, and be treated as a Limited Partner or an Assignee, as
applicable, with respect to such Preferred Units for all purposes of the Agreement,
until such Preferred Units are either paid for by the Partnership pursuant to this
Section 6 or transferred to the Previous General Partner (or directly to the General
Partner or Special Limited Partner) and paid for, by the issuance of the REIT
Shares, pursuant to this Section 6 on the Specified Redemption Date. Until a
Specified Redemption Date and an acquisition of the Tendered Units by the Previous
General Partner pursuant to this Section 6, the Tendering Party shall have no rights
as a shareholder of the Previous General Partner with respect to the REIT Shares
issuable in connection with such acquisition.


For purposes of determining compliance with the restrictions set forth in this Section 6(h), all
Partnership Common Units and Partnership Preferred Units, including Preferred Units, beneficially
owned by a Related Party of a Tendering Party shall be considered to be owned or held by such
Tendering Party.




          (i) In connection with an exercise of Redemption rights pursuant to this Section 6, the
Tendering Party shall submit the following to the General Partner, in addition to the Notice of
Redemption:





          (1) A written affidavit, dated the same date as the Notice of Redemption, (a)
disclosing the actual and constructive ownership, as determined for purposes of Code
Sections 856(a)(6) and 856(h), of Common Shares and any other classes or shares of
the Previous General Partner by (i) such Tendering Party and (ii) any Related Party
and (b) representing that, after giving effect to the Redemption, neither the
Tendering Party nor any Related Party will own Common Shares in excess of the
Ownership Limit;



M-9









 






          (2) A written representation that neither the Tendering Party nor any Related
Party has any intention to acquire any additional Common Shares or any other class
of shares of the Previous General Partner prior to the closing of the Redemption on
the Specified Redemption Date; and




          (3) An undertaking to certify, at and as a condition to the closing of the
Redemption on the Specified Redemption Date, that either (a) the actual and
constructive ownership of Common Shares or any other class of shares of the Previous
General Partner by the Tendering Party and any Related Party remain unchanged from
that disclosed in the affidavit required by Section 6(i)(a) or (b)) after giving
effect to the Redemption, neither the Tendering Party nor any Related Party shall
own Common Shares or other shares of the Previous General Partner in violation of
the Ownership Limit.



          (j) On or after the Specific Redemption Date, each holder of Preferred Units shall surrender
to the Partnership the certificate evidencing such holder’s Preferred Units, at the address to
which a Notice of Redemption is required to be sent. Upon such surrender of a certificate, the
Partnership shall thereupon pay the former holder thereof the applicable Cash Amount and/or deliver
Common Shares for the Preferred Units evidenced thereby. From and after the Specific Redemption
Date (i) distributions with respect to the Preferred Units shall cease to accumulate, (ii) the
Preferred Units shall no longer be deemed outstanding, (iii) the holders thereof shall cease to be
Partners to the extent of their interest in such Preferred Units, and (iv) all rights whatsoever
with respect to the Preferred Units shall terminate, except the right of the holders of the
Preferred Units to receive Cash Amount and/or Common Shares therefor, without interest or any sum
of money in lieu of interest thereon, upon surrender of their certificates therefor.




          (k) Notwithstanding the provisions of this Section 6, the Tendering Parties (i) shall not be
entitled to elect or effect a Redemption where the Redemption would consist of less than all the
Preferred Units held by Partners and, to the extent that the aggregate Percentage Interests of the
Limited Partners would be reduced, as a result of the Redemption, to less than one percent (1%) and
(ii) shall have no rights under the Agreement that would otherwise be prohibited under the Charter.
To the extent that any attempted Redemption would be in violation of this Section 6(k), it shall
be null and void ab initio, and the Tendering Party shall not acquire any rights or economic
interests in Common Shares otherwise issuable by the Previous General Partner hereunder.




          (l) Notwithstanding any other provision of the Agreement, on and after the date on which the
aggregate Percentage Interests of the Limited Partners (other than the Special Limited Partner) are
less than one percent (1%), the Partnership shall have the right, but not the obligation, from time
to time and at any time to redeem any and all outstanding Limited Partner Interests (other than the
Special Limited Partner’s Limited Partner Interest) by treating any Limited Partner as a Tendering
Party who has delivered a Notice of Redemption pursuant to this Section 6 for the amount of
Preferred Units to be specified by the General Partner, in its sole and absolute discretion, by
notice to such Limited Partner that the Partnership has elected to exercise its rights under this
Section 6(l). Such notice given by the General Partner to a Limited Partner pursuant to this
Section 6(l) shall be treated as if it were a Notice of Redemption delivered to the General Partner
by such Limited Partner. For purposes of this Section 6(l), (a) any Limited Partner (whether or
not eligible to be a Tendering Party) may, in the General Partner’s sole and absolute discretion,
be treated as a Tendering Party and (b) the provisions of Sections 6(f)(1), 6(h)(2), 6(h)(3) and
6(h)(5) hereof shall not apply, but the remainder of this Section shall apply, mutatis
mutandis.




     7. Conversion.



          (a) (i) Subject to and upon compliance with the provisions of this Section 7, a holder of
Class Six Partnership Preferred Units shall have the right, at such holder’s option, to convert
such units, in whole or in part, into the number of Partnership Common Units per Class Six
Partnership Preferred Unit obtained by dividing the Liquidation Preference (excluding any
accumulated, accrued and unpaid distributions) per Class Six Partnership Preferred Unit by the
Conversion Price in effect at the time and on the date provided for in subparagraph (b)(iv) of this
Section 7. In order to exercise the conversion right, the holder of each Class Six Partnership
Preferred Unit to be converted shall surrender the certificate representing such unit, duly
endorsed or assigned to the Partnership or in blank, at the office of the Transfer Agent,
accompanied by written notice to the Partnership that the holder thereof elects to convert such
Class Six Partnership Preferred Unit.




M-10









 








               (ii) With respect to any Class Six Partnership Preferred Units that have been issued and
outstanding for at least three (3) years, if, as of any date, the Internal Rate of Return exceeds
12.5%, then the Partnership shall have the right, but not the obligation, to cause such Class Six
Partnership Preferred Units to be converted, in whole or in part, into the number of Partnership
Common Units per Class Six Partnership Preferred Unit obtained by dividing the Liquidation
Preference (excluding any accumulated, accrued and unpaid distributions) per Class Six Partnership
Preferred Unit by the Conversion Price in effect at the time and on the date provided for in
subparagraph (b)(iv) of this Section 7. In order to exercise the conversion right, the Partnership
shall send notice of such conversion to each holder of record of Class Six Partnership Preferred
Units no later than five Business Days after a date on which the Internal Rate of Return exceeds
12.5%. Such notice shall be provided by facsimile or, if facsimile is not available, then by first
class mail, postage prepaid, at such holders’ address as the same appears on the records of the
Partnership. Any notice which was transmitted or mailed in the manner herein provided shall be
conclusively presumed to have been duly given on the date received by the holder. Each such notice
shall state, as appropriate: (1) the date of conversion, which date may be any date within one
business day following the date on which the notice is transmitted or mailed; (2) the number of
units of Class Six Partnership Preferred Units to be converted and, if fewer than all such units
held by such holder are to be converted, the number of such units to be converted; and (3) the then
current Conversion Price. Upon receiving such notice of conversion, each such holder shall
promptly surrender the certificates representing such Class Six Partnership Preferred Units as are
being converted on the conversion date, duly endorsed or assigned to the Partnership or in blank,
at the office of the Transfer Agent; provided, however, that the failure to so surrender any such
certificates shall not in any way affect the validity of the conversion of the underlying Class Six
Partnership Preferred Units into Partnership Common Units.



          (b) (i) Unless the Partnership Common Units issuable on conversion are to be issued in the
same name as the name in which such Class Six Partnership Preferred Units are registered, each such
unit surrendered following conversion shall be accompanied by instruments of transfer, in form
satisfactory to the Partnership, duly executed by the holder or such holder’s duly authorized
representative, and an amount sufficient to pay any transfer or similar tax (or evidence reasonably
satisfactory to the Partnership demonstrating that such taxes have been paid).




               (ii) A holder of Class Six Partnership Preferred Units shall, as of the date of the
conversion of such units to Partnership Common Units, be entitled to receive a cash payment in
respect of any distributions (whether or not earned or declared) that are accumulated, accrued and
unpaid thereon as of the time of such conversion, provided, however, that payment
in respect of any distributions on such units that has been declared but for which the Distribution
Payment Date has not yet been reached shall be payable as of such Distribution Payment Date.
Except as provided above, the Partnership shall make no payment or allowance for unpaid
distributions, whether or nor in arrears, on converted units.



               (iii) As promptly as practicable after the surrender of certificates for Class Six
Partnership Preferred Units as aforesaid, and in any event no later than three business days after
the date of such surrender, the Partnership shall issue and deliver at such office to such holder,
or send on such holders’ written order, a certificate or certificates for the number of full
Partnership Common Units issuable upon the conversion of such Class Six Partnership Preferred Units
in accordance with the provisions of this Section 7, and any fractional interest in respect of a
Partnership Common Unit arising upon such conversion shall be settled as provided in paragraph (c)
of this Section 7.



               (iv) Each conversion shall be deemed to have been effected (x) in the case of a conversion
pursuant to subparagraph (a)(i) of this Section 7 immediately prior to the close of business on the
date on which the certificates for Class Six Partnership Preferred Units shall have been
surrendered and such notice received by the Partnership as provided in subparagraph (a)(i) of this
Section 7, and (y) in the case of a conversion pursuant to subparagraph (a)(ii) of this Section 7,
immediately prior to the close of business on the date identified as the conversion date in the
notice of conversion sent by the Partnership pursuant to subparagraph (a)(ii) of this Section 7;
and, in the case of (x) or (y), the person or persons in whose name or names any certificate or
certificates for Partnership Common Units shall be issuable upon such conversion shall be deemed to
have become the holder or holders of record of the units represented thereby at such time on such
date, and such conversion shall be at the Conversion Price in effect at such time on such date,
unless the transfer books of the Partnership shall be closed on that date, in which event such
person or persons shall be deemed to become such holder or holders of record at the



M-11









 




close of business on the next succeeding day on which such transfer books are open, but such
conversion shall be at the Conversion Price in effect on the date in the notice of conversion sent
by the Partnership as aforesaid.




          (c) No fractional Partnership Common Units or scrip representing fractions of a Partnership
Common Unit shall be issued upon conversion of the Class Six Partnership Preferred Units. Instead
of any fractional interest in a Partnership Common Unit that would otherwise be deliverable upon
the conversion of Class Six Partnership Preferred Units, the Partnership shall pay to the holder of
such units an amount of cash equal to the product of (i) such fraction and (ii) the value of a REIT
Share as of the date of conversion. If more than one of any holder’s units shall be converted at
one time, the number of full Partnership Common Units issuable upon conversion thereof shall be
computed on the basis of the aggregate number of Class Six Partnership Preferred Units so
converted.




          (d) If the Partnership shall be a party to any transaction (including with limitation a
merger, consolidation, statutory exchange, sale of all or substantially all of the Partnership’s
assets or recapitalization of the Partnership Common Units, but excluding any transaction as to
which a charge in the Adjustment Factor would be effected) (each of the foregoing being referred to
herein as a “Transaction”), in each case, as a result of which Partnership Common Units shall be
converted into the right to receive securities or other property (including cash or any combination
thereof), each Class Six Partnership Preferred Unit which is not converted into the right to
receive securities or other property in connection with such Transaction shall thereupon be
convertible into the kind and amount of securities and other property (including cash or any
combination thereof) receivable upon such consummation by a holder of that number of Partnership
Common Units into which Class Six Partnership Preferred Units were convertible immediately prior to
such Transaction. The Partnership shall not be a party to any transaction unless the terms of such
Transaction are consistent with the provisions of this paragraph (d), and it shall not consent or
agree to the occurrence of any Transaction until the Partnership has entered into an agreement with
the successor or purchasing entity, as the case may be, for the benefit of the holders of the Class
Six Partnership Preferred Units that will contain provisions enabling the holders of the Class Six
Partnership Preferred Units that remain outstanding after such Transaction to convert into the
consideration received by holders of Partnership Common Units at the Conversion Price in effect
immediately prior to such Transaction. The provisions of this Paragraph (d) shall apply to
successive Transactions.




          (e) Whenever the Conversion Price is adjusted as herein provided (whether pursuant to
paragraph (d) of this Section 7 or as a result of a change in the Adjustment Factor), the General
Partner shall promptly file with the Transfer Agent an officer’s certificate setting forth the
Conversion Price after such adjustment and setting forth a brief statement of the facts requiring
such adjustment which certificate shall be conclusive evidence of the correctness of such
adjustment absent manifest error. Promptly after delivery of such certificate, the General Partner
shall prepare a notice of such adjustment of the Conversion Price setting forth the adjusted
Conversion Price and the effective date such adjustment becomes effective and shall mail such
notice of such adjustment of the Conversion Price to each holder of Class Six Partnership Preferred
Units at such holder’s address as shown on the records of the Partnership.




          (f) In any case in which an adjustment to the Adjustment Factor shall become effective
immediately after the effective date of an event, retroactive to the record date, if any, for such
event, the Partnership may defer until the occurrence of such event (A) issuing to the holder of
any Class Six Partnership Preferred Units converted after such record date and before the
occurrence of such event the additional Partnership Common Units issuable upon such conversion by
reason of the adjustment required by such event over and above the Partnership Common Units
issuable upon such conversion before giving effect to such adjustment and (B) paying to such holder
any amount of cash in lieu of any fraction pursuant to Section 7(c).




          (g) There shall be no adjustment of the Conversion Price in case of the issuance of any unit
of the Partnership except as specifically set forth in the definition of “Adjustment Factor” or in
this Section 7. In addition, notwithstanding any other provision contained in the definition of
“Adjustment Factor” or in this Section 7, there shall be no adjustment of the Conversion Price upon
the payment of any cash distributions on any units of the Partnership.




          (h) If the Partnership shall take any action affecting the Partnership Common Units, other
than action described in the definition of “Adjustment Factor” or in this Section 7 that, in the
opinion of the General





M-12









 







Partner would materially adversely affect the conversion rights of the holders of Class Six
Partnership Preferred Units, the Conversion Price for the Class Six Partnership Preferred Units may
be adjusted, to the extent permitted by law in such manner, if any, and at such time as the General
Partner, in its sole discretion, may determine to be equitable under the circumstances.




          (i) The Partnership will pay any and all documentary stamp or similar issue or transfer taxes
payable in respect of the issue or delivery of Partnership Common Units or other securities or
property on conversion of Class Six Partnership Preferred Units pursuant hereto; provided, however,
that the Partnership shall not be required to pay any tax that may be payable in respect of any
transfer involved in the issue or delivery of Partnership Common Units or other securities or
property in a name other than that of the holder of the Class Six Partnership Preferred Units to be
converted, and no such issue or delivery shall be made unless and until the person requesting such
issue or delivery has paid to the Partnership the amount of any such tax or established, to the
reasonable satisfaction of the Partnership, that such tax has been paid.




          (j) In addition to any other adjustment required hereby, to the extent permitted by law, the
Partnership from time to time may decrease the Conversion Price by any amount, permanently or for a
period of at least twenty Business Days, if the decrease is irrevocable during the period.




          (k) For purposes of the definition of “Twelve-Month Period” in the Agreement, any holder of
Class Six Partnership Preferred Units that have been converted to Partnership Common Units shall be
deemed to have acquired such Partnership Common Units when such Class Six Partnership Units were
acquired.




     8. Status of Reacquired Units.



          All Preferred Units which shall have been issued and reacquired in any manner by the
Partnership shall be deemed cancelled and no longer outstanding.




     9. General.



          The ownership of the Preferred Units shall be evidenced by one or more certificates in the
form of Annex II hereto. The General Partner shall amend Exhibit A to the Agreement from time to
time to the extent necessary to reflect accurately the issuance of, and subsequent redemption, or
any other event having an effect on the ownership of, the Preferred Units.




     10. Allocations of Income and Loss.



          For each taxable year, each holder of Preferred Units will be allocated a portion of the Net
Income and Net Loss of the Partnership equal to the portion of the Net Income and Net Loss of the
Partnership that would be allocated to such holder pursuant to Article 6 of the Agreement if such
holder held a number of Partnership Common Units equal to (i) the number of Preferred Units held by
such holder, multiplied by (ii) 0.5. Upon liquidation, dissolution or winding up of the
Partnership, the Partnership shall endeavor to allocate income and gain to the holders of the
Preferred Units such that the Capital Accounts related to the Preferred Units are equal to their
Liquidation Preference.




     11. Voting Rights.



          Except as otherwise required by applicable law or in the Agreement, the holders of the
Preferred Units will have the same voting rights as holders of the Partnership Common Units. As
long as any Preferred Units are outstanding, in addition to any other vote or consent of partners
required by law or by the Agreement, the affirmative vote or consent of holders of at least 50% of
the outstanding Preferred Units will be necessary for effecting any amendment of any of the
provisions of the Partnership Unit Designation of the Preferred Units that materially and adversely
affects the rights or preferences of the holders of the Preferred Units. The creation or issuance
of any class or series of Partnership Units, including, without limitation, any Partnership Units
that may have rights junior to, on a parity with, or senior or superior to the Preferred Units,
will not be deemed to materially




M-13









 







and adversely affect the rights or preferences of the holders of Preferred Units. With
respect to the exercise of the above-described voting rights, each Preferred Unit will have one (1)
vote per Preferred Unit.




     12. Restrictions on Transfer.



          Preferred Units are subject to the same restrictions on transfer applicable to Common Units, as set
forth in the Agreement.




M-14









 








ANNEX I

TO EXHIBIT M




NOTICE OF REDEMPTION




	 	 	 
	To:

	 	AIMCO Properties, L.P.
	 

	 	c/o AIMCO-GP, Inc.
	 

	 	4582 South Ulster Street Parkway
	 

	 	Suite 1100
	 

	 	Denver, Colorado 80237
	 

	 	Attention: Investor Relations






          The undersigned Limited Partner or Assignee hereby tenders for redemption Class Six
Partnership Preferred Units in AIMCO Properties, L.P. in accordance with the terms of the Agreement
of Limited Partnership of AIMCO Properties, L.P., dated as of July 29, 1994, as it may be amended
and supplemented from time to time (the “Agreement”). All capitalized terms used herein and not
otherwise defined shall have the respective meanings ascribed thereto in the Partnership Unit
Designation of the Class Six Partnership Preferred Units. The undersigned Limited Partner or
Assignee:




          (a) if the Partnership elects to redeem such Class Six Partnership Preferred Units for Common
Shares rather than cash, hereby irrevocably transfers, assigns, contributes and sets over to the
Previous General Partner all of the undersigned Limited Partner’s or Assignee’s right, title and
interest in and to such Class Six Partnership Preferred Units;




          (b) undertakes (i) to surrender such Class Six Partnership Preferred Units and any
certificate therefor at the closing of the Redemption contemplated hereby and (ii) to furnish to
the Previous General Partner, prior to the Specified Redemption Date:





          (1) A written affidavit, dated the same date as this Notice of Redemption, (a)
disclosing the actual and constructive ownership, as determined for purposes of Code
Sections 856(a)(6) and 856(h), of Common Shares by (i) the undersigned Limited Partner or
Assignee and (ii) any Related Party and (b) representing that, after giving effect to the
Redemption, neither the undersigned Limited Partner or Assignee nor any Related Party will
own Common Shares in excess of the Ownership Limit;




          (2) A written representation that neither the undersigned Limited Partner or Assignee
nor any Related Party has any intention to acquire any additional Common Shares prior to the
closing of the Redemption contemplated hereby on the Specified Redemption Date; and




          (3) An undertaking to certify, at and as a condition to the closing of the Redemption
contemplated hereby on the Specified Redemption Date, that either (a) the actual and
constructive ownership of Common Shares by the undersigned Limited Partner or Assignee and
any Related Party remain unchanged from that disclosed in the affidavit required by
paragraph (1) above, or (b) after giving effect to the Redemption contemplated hereby,
neither the undersigned Limited Partner or Assignee nor any Related Party shall own Common
Shares in violation of the Ownership Limit.



          (c) directs that the certificate representing the Common Shares, or the certified check
representing the Cash Amount, in either case, deliverable upon the closing of the Redemption
contemplated hereby be delivered to the address specified below;




          (d) represents, warrants, certifies and agrees that:





          (i) the undersigned Limited Partner or Assignee has, and at the closing of the
Redemption will have, good, marketable and unencumbered title to such Preferred
Units, free and clear of the rights or interests of any other person or entity;



M-I-1 









 






          (ii) the undersigned Limited Partner or Assignee has, and at the closing of the
Redemption will have, the full right, power and authority to tender and surrender
such Preferred Units as provided herein; and




          (iii) the undersigned Limited Partner or Assignee has obtained the consent or
approval of all persons and entities, if any, having the right to consent to or
approve such tender and surrender.



Dated:                                         




	 	 	 	 	 
	 

	 	Name of Limited Partner or Assignee:	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 

	 	 

(Signature of Limited Partner or Assignee)
	 	 
	 
	 	 	 	 
	 

	 	 

(Street Address)
	 	 
	 
	 	 	 	 
	 

	 	 

(City) (State) (Zip Code)
	 	 
	 
	 	 	 	 
	 

	 	Signature Guaranteed by:	 	 
	 
	 	 	 	 
	 

	 	 

	 	 






(continued on next page)




M-I-2 









 





Issue check payable to

or Certificates in the

name of:                                                            




Please insert social security

or identifying number:                                                            



NOTICE: THE SIGNATURE OF THIS NOTICE OF REDEMPTION MUST CORRESPOND WITH THE NAME(S) AS WRITTEN
UPON THE FACE OF THE CERTIFICATE FOR THE CLASS SIX PREFERRED UNITS WHICH ARE BEING REDEEMED IN
EVERY PARTICULAR WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.



THE SIGNATURE SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION, (Banks, Stockbrokers,
Savings and Loan Associations and Credit Unions), WITH MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM PURSUANT TO SEC RULE 17Ad-15.




M-I-3 









 





ANNEX II

TO EXHIBIT M




FORM OF UNIT CERTIFICATE

OF

CLASS SIX PARTNERSHIP PREFERRED UNITS



[THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION, UNLESS THE TRANSFEROR DELIVERS TO THE PARTNERSHIP
AN OPINION OF COUNSEL SATISFACTORY TO THE PARTNERSHIP, IN FORM AND SUBSTANCE SATISFACTORY TO THE
PARTNERSHIP, TO THE EFFECT THAT THE PROPOSED SALE, TRANSFER OR OTHER DISPOSITION MAY BE EFFECTED
WITHOUT REGISTRATION UNDER THE ACT AND UNDER APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS. IN
ADDITION,]1 THE LIMITED PARTNERSHIP INTEREST EVIDENCED BY THIS CERTIFICATE MAY BE SOLD
OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE RESTRICTIONS ON TRANSFER SET FORTH IN THE
AGREEMENT OF LIMITED PARTNERSHIP OF AIMCO PROPERTIES, L.P., DATED AS OF JULY 29, 1994, AS IT MAY BE
AMENDED AND/OR SUPPLEMENTED FROM TIME TO TIME, A COPY OF WHICH MAY BE OBTAINED FROM AIMCO-GP, INC,
THE GENERAL PARTNER, AT ITS PRINCIPAL EXECUTIVE OFFICE.
Certificate Number                    




AIMCO PROPERTIES, L.P.

FORMED UNDER THE LAWS OF THE STATE OF DELAWARE




This certifies that




 






is the owner of




 






CLASS SIX PARTNERSHIP PREFERRED UNITS

OF

AIMCO PROPERTIES, L.P.,



transferable on the books of the Partnership in person or by duly authorized attorney on the
surrender of this Certificate properly endorsed. This Certificate and the Class Six Partnership
Preferred Units represented hereby are issued and shall be held subject to all of the provisions of
the Agreement of Limited Partnership of AIMCO Properties, L.P., as the same may be amended and/or
supplemented from time to time.



IN WITNESS WHEREOF, the undersigned has signed this Certificate.




	 	 	 	 	 	 	 
	Dated:

	 	By
	 	 
 

	 	 








 




			
	2	 	Not required if Units are issued pursuant to a current and effective registration statement under Act.




M-II-1 









 










ASSIGNMENT




          For Value Received,                                          hereby sells, assigns and transfers unto
                                                                                 Class Six Partnership Preferred Unit(s)
represented by the within Certificate, and does hereby irrevocably constitute and appoint the
General Partner of AIMCO Properties, L.P. as its Attorney to transfer said Class Six Partnership
Preferred Unit(s) on the books of AIMCO Properties, L.P. with full power of substitution in the
premises.




Dated:                                        




By:                                        

Name:




Signature Guaranteed by:




                                                            



NOTICE: THE SIGNATURE OF THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S) AS WRITTEN UPON THE FACE
OF THE CERTIFICATE IN EVERY PARTICULAR WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.



THE SIGNATURE SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION, (Banks, Stockbrokers,
Savings and Loan Associations and Credit Unions), WITH MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM PURSUANT TO SEC RULE 17Ad-15.




M-II-2 









 





EXHIBIT N




PARTNERSHIP UNIT DESIGNATION OF

THE CLASS SEVEN PARTNERSHIP PREFERRED UNITS OF

AIMCO PROPERTIES, L.P.




     1. Number of Units and Designation.



          A class of Partnership Preferred Units is hereby designated as “Class Seven Partnership
Preferred Units,” and the number of Partnership Preferred Units constituting such class shall be
three million (3,000,000).




     2. Definitions.



          Capitalized terms used and not otherwise defined herein shall have the meanings assigned
thereto in the Agreement, as modified by this Partnership Unit Designation and the defined terms
used herein. For purposes of this Partnership Unit Designation, the following terms shall have the
respective meanings ascribed below:




          “Agreement” shall mean the Agreement of Limited Partnership of the Partnership, as amended,
supplemented or restated from time to time.




          “Assignee” shall mean a Person to whom one or more Preferred Units have been Transferred in a
manner permitted under the Agreement, but who has not become a Substituted Limited Partner, and who
has the rights set forth in Section 11.5 of the Agreement.




          “Cash Amount” shall mean, with respect to any Tendered Unit, cash in an amount equal to the
Liquidation Preference of such Tendered Unit.




          “Class Seven Partnership Preferred Unit” or “Preferred Unit” shall mean a Partnership
Preferred Unit with the designations, preferences and relative, participating, optional or other
special rights, powers and duties as are set forth in this Partnership Unit Designation.




          “Cut-Off Date” shall mean the fifth (5th) Business Day after the General Partner’s receipt of
a Notice of Redemption.




          “Declination” shall have the meaning set forth in Section 6(f) of this Partnership Unit
Designation.




          “Distribution Payment Date” shall have the meaning set forth of Section 4(b) of this
Partnership Unit Designation.




          “Distribution Rate” shall mean 9.5%, subject to adjustment as provided in Section 4(a) of this
Partnership Unit Designation.




          “Dividend Yield” shall mean, as of any calculation date and with respect to any class or
series of capital stock, the quotient obtained by dividing (i) the aggregate dollar amount of
dividends payable on one share of such class or series of capital stock, in accordance with its
terms, for the 12 month period ending on the dividend payment date immediately preceding such
calculation date, by (ii) the Market Value of one share of such stock as of such calculation date.




          “Junior Partnership Units” shall have the meaning set forth in Section 3(c) of this
Partnership Unit Designation.




          “Liquidation Preference” shall have the meaning set forth in Section 5(a) of this Partnership
Unit Designation.





N-1 









 





     “Market Value” shall mean, as of any calculation date and with respect to any share of stock,
the average of the daily market prices for ten (10) consecutive trading days immediately preceding
the calculation date. The market price for any such trading day shall be:




     (i) if the shares are listed or admitted to trading on any securities exchange or The
Nasdaq Stock Market’s National Market System, the closing price, regular way, on such day,
or if no such sale takes place on such day, the average of the closing bid and asked prices
on such day, in either case as reported in the principal consolidated transaction reporting
system,




     (ii) if the shares are not listed or admitted to trading on any securities exchange or
The Nasdaq Stock Market’s National Market System, the last reported sale price on such day
or, if no sale takes place on such day, the average of the closing bid and asked prices on
such day, as reported by a reliable quotation source designated by the General Partner, or




     (iii) if the shares are not listed or admitted to trading on any securities exchange
or The Nasdaq Stock Market’s National Market System and no such last reported sale price or
closing bid and asked prices are available, the average of the reported high bid and low
asked prices on such day, as reported by a reliable quotation source designated by the
General Partner, or if there shall be no bid and asked prices on such day, the average of
the high bid and low asked prices, as so reported, on the most recent day (not more than ten
(10) days prior to the date in question) for which prices have been so reported;


provided, however, that, if there are no bid and asked prices reported during the ten (10) days
prior to the date in question, the Market Value of the shares shall be determined by the General
Partner acting in good faith on the basis of such quotations and other information as it considers,
in its reasonable judgment, appropriate; provided, further, that the General Partner is authorized
to adjust the market price for any trading day as may be necessary, in its judgment, to reflect an
event that occurs at any time after the commencement of such ten day period that would unfairly
distort the Market Value, including, without limitation, a stock dividend, split, subdivision,
reverse stock split, or share combination.




     “Notice of Redemption” shall mean a Notice of Redemption in the form of Annex I to this
Partnership Unit Designation.



     “Parity Partnership Units” shall have the meaning set forth in Section 3(b) of this
Partnership Unit Designation.



     “Partnership” shall mean AIMCO Properties, L.P., a Delaware limited partnership.



     “Previous General Partner” shall mean Apartment Investment and Management Company, a Maryland
corporation.



     “Primary Offering Notice” shall have the meaning set forth in Section 6(h)(4) of this
Partnership Unit Designation.



     “Public Offering Funding” shall have the meaning set forth in Section 6(f)(2) of this
Partnership Unit Designation.



     “Qualifying Preferred Stock” shall mean any class or series of non-convertible perpetual
preferred stock that (i) has been issued by a corporation that has elected to be taxed as a REIT,
(ii) has a fixed rate of distributions or dividends, (iii) has a fixed liquidation preference (and
which entitles the holder thereof to no payments other than the payment of distributions at a fixed
rate and the payment of a fixed liquidation preference), (iv) is listed on the New York Stock
Exchange, (v) cannot be redeemed at the option of the issuer for the first five years after
issuance of such class or series of preferred stock and that, at the Reset Date (or, if applicable,
as of the date the calculation of the Weighted Average of Preferred Stock Dividend Yields is being
made for purposes hereof in respect of such Reset Date) cannot be so redeemed and (vi) is issued by
an issuer the unsecured debt of which has an average rating from Moody’s Investors Services, Inc.,
Standard & Poors Rating Services or Duff & Phelps Credit



N-2




 









 




Rating Co. in a category that is one rating category below the average rating, as of such
date, of the Previous General Partner’s unsecured debt.




     “Redemption” shall have the meaning set forth in Section 6(b) of this Partnership Unit
Designation.



     “Registrable Shares” shall have the meaning set forth in Section 6(f)(2) of this Partnership
Unit Designation.



     “REIT Shares Amount” shall mean, with respect to any Tendered Units, a number of REIT Shares
equal to the quotient obtained by dividing (i) the Cash Amount for such Tendered Units, by (ii) the
Market Value of a REIT Share as of the fifth (5th) Business Day prior to the date of receipt by the
General Partner of a Notice of Redemption for such Tendered Units.



     “Reset Date” shall mean November 9, 2005 and every fifth anniversary of such date that occurs
thereafter.



     “Senior Partnership Units” shall have the meaning set forth in Section 3(a) of this
Partnership Unit Designation.



     “Single Funding Notice” shall have the meaning set forth in Section 6(f)(3) of this
Partnership Unit Designation.



     “Specified Redemption Date” shall mean, with respect to any Redemption, the later of (a) the
tenth (10th) Business Day after the receipt by the General Partner of a Notice of Redemption or (b)
in the case of a Declination followed by a Public Offering Funding, the Business Day next following
the date of the closing of the Public Offering Funding; provided, however, that the Specified
Redemption Date, as well as the closing of a Redemption, or an acquisition of Tendered Units by the
Previous General Partner pursuant to Section 6 hereof, on any Specified Redemption Date, may be
deferred, in the General Partner’s sole and absolute discretion, for such time (but in any event
not more than one hundred fifty (150) days in the aggregate) as may reasonably be required to
effect, as applicable, (i) a Public Offering Funding or other necessary funding arrangements, (ii)
compliance with the Securities Act or other law (including, but not limited to, (a) state “blue
sky” or other securities laws and (b) the expiration or termination of the applicable waiting
period, if any, under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended) and
(iii) satisfaction or waiver of other commercially reasonable and customary closing conditions and
requirements for a transaction of such nature.



     “Tendering Party” shall have the meaning set forth in Section 6(b) of this Partnership Unit
Designation.



     “Tendered Units” shall have the meaning set forth in Section 6(b) of this Partnership Unit
Designation.



     “Weighted Average of Preferred Stock Dividend Yields” shall mean, as of any date of
calculation, the average of the Dividend Yields, as of such date, of each Qualifying Preferred
Stock (other than a Qualifying Preferred Stock issued by the Previous General Partner) that has
been outstanding during the entire year immediately preceding the date of calculation. Each such
class of Qualifying Preferred Stock (except Qualifying Preferred Stock of the Previous General
Partner) shall be weighted for its total market value.



     3. Ranking.



     Any class or series of Partnership Units of the Partnership shall be deemed to rank:



     (a) prior or senior to the Class Seven Partnership Preferred Units, as to the payment of
distributions and as to the distribution of assets upon liquidation, dissolution or winding up, if
the holders of such class or series shall be entitled to the receipt of distributions and of
amounts distributable upon liquidation,



N-3




 









 




dissolution or winding up, as the case may be, in preference or priority to the holders of
Class Seven Partnership Preferred Units (the partnership units being hereinafter referred to,
collectively, as “Senior Partnership Units”);




     (b) on a parity with the Class Seven Partnership Preferred Units, as to the payment of
distributions and as to the distribution of assets upon liquidation, dissolution or winding up,
whether or not the distribution rates, distribution payment dates or redemption or liquidation
prices per unit or other denomination thereof be different from those of the Class Seven
Partnership Preferred Units (i) if such class or series of partnership units shall be Class G
Partnership Preferred Units, Class One Partnership Preferred Units, Class Two Partnership Preferred
Units, Class Three Partnership Preferred Units, Class Four Partnership Preferred Units or Class Six
Partnership Preferred Units or (ii) if the holders of such class or series of partnership units and
the Class Seven Partnership Preferred Units shall be entitled to the receipt of distributions and
of amounts distributable upon liquidation, dissolution or winding up in proportion to their
respective amounts of accrued and unpaid distributions per unit or other denomination or
liquidation preferences, without preference or priority one over the other (the partnership units
referred to in clauses (i) and (ii) of this paragraph being hereinafter referred to, collectively,
as “Parity Partnership Units”); and



     (c) junior to the Class Seven Partnership Preferred Units, as to the payment of distributions
and as to the distribution of assets upon liquidation, dissolution or winding up, (i) if such
class or series of partnership units shall be Partnership Common Units, Class I High Performance
Partnership Units or Class Five Partnership Preferred Units or (ii) if the holders of Class Seven
Partnership Preferred Units shall be entitled to receipt of distributions or of amounts
distributable upon liquidation, dissolution or winding up, as the case may be, in preference or
priority to the holders of such class or series of Partnership Units (the partnership units
referred to in clauses (i) and (ii) of this paragraph being hereinafter referred to, collectively,
as “Junior Partnership Units”).



     4. Quarterly Cash Distributions.



     (a) The “Quarterly Distribution Amount,” as of any date, shall be equal to (i) the
Distribution Rate then in effect, multiplied by (ii) $25, and divided by (iii) four. Holders of
Preferred Units will be entitled to receive, when and as declared by the General Partner, quarterly
cash distributions in an amount per Preferred Unit equal to the Quarterly Distribution Amount in
effect as of the date such distribution is declared by the General Partner, and no more. On each
Reset Date, the Distribution Rate thereafter in effect shall be adjusted by the General Partner to
equal the lesser of (i) the Distribution Rate in effect immediately prior to such Reset Date or
(ii) the Dividend Yield of the class of Qualifying Preferred Stock most recently issued by the
Previous General Partner or, if there is no class of Qualifying Preferred Stock of the Previous
General Partner outstanding as of any Reset Date, the Weighted Average of Preferred Stock Dividend
Yields, calculated as of the end of the calendar quarter immediately preceding such Reset Date;
provided, further, that if for any reason there are no classes of Qualifying Preferred Stock of the
type described in the definition of “Weighted Average of Preferred Stock Dividend Yields”
outstanding on any Reset Date and the reference to the Weighted Average of Preferred Stock Dividend
Yields would otherwise be determinative of the calculation of the adjusted Distribution Rate on
such Reset Date, the adjusted Distribution Rate for the succeeding five (5) year period shall be
the Distribution Rate in effect immediately prior to such Reset Date. Upon any such adjustment of
the Distribution Rate, the General Partner shall send a notice describing such adjustment to the
holders of the Preferred Units at their respective addresses, as set forth on Exhibit A to
the Agreement.



     (b) Any such distributions will be cumulative from the date of original issue, whether or not
in any distribution period or periods such distributions have been declared, and shall be payable
quarterly on February 15, May 15, August 15 and November 15 of each year (or, if not a Business
Day, the next succeeding Business Day) (each a “Distribution Payment Date”), commencing on the
first such date occurring after the date of original issue. If the Preferred Units are issued on
any day other than a Distribution Payment Date, the first distribution payable on such Preferred
Units will be prorated for the portion of the quarterly period that such Preferred Units are
outstanding on the basis of twelve 30-day months and a 360-day year. Distributions will be payable
in arrears to holders of record as they appear on the records of the Partnership at the close of
business on the February 1, May 1, August 1 or November 1, as the case may be, immediately
preceding each Distribution Payment Date. If the Preferred Units are issued other than on a record
date for the payment of distributions to the holders of Preferred Units, the Quarterly Distribution
Amount shall, for any quarter in which the Distribution Rate changes on any Reset Date, be
appropriately prorated based on the portions of such quarter during which the different



N-4









 




Distribution Rates were in effect, on the basis of twelve 30-day months and a 360-day year.
Holders of Preferred Units will not be entitled to receive any distributions in excess of
cumulative distributions on the Preferred Units. No interest, or sum of money in lieu of interest,
shall be payable in respect of any distribution payment or payments on the Preferred Units that may
be in arrears. Holders of any Preferred Units that are issued after the date of original issuance
will be entitled to receive the same distributions as holders of any Preferred Units issued on the
date of original issuance.




     (c) When distributions are not paid in full upon the Preferred Units or any Parity Partnership
Units, or a sum sufficient for such payment is not set apart, all distributions declared upon the
Preferred Units and any Parity Partnership Units shall be declared ratably in proportion to the
respective amounts of distributions accumulated and unpaid on the Preferred Units and accumulated
and unpaid on such Parity Partnership Units. Except as set forth in the preceding sentence, unless
distributions on the Preferred Units equal to the full amount of accumulated and unpaid
distributions have been or contemporaneously are declared and paid, or declared and a sum
sufficient for the payment thereof has been or contemporaneously is set apart for such payment, for
all past distribution periods, no distributions shall be declared or paid or set apart for payment
by the Partnership with respect to any Parity Partnership Units.



     (d) Unless full cumulative distributions (including all accumulated, accrued and unpaid
distributions) on the Preferred Units have been declared and paid, or declared and set apart for
payment, for all past distribution periods, no distributions (other than distributions paid in
Junior Partnership Units or options, warrants or rights to subscribe for or purchase Junior
Partnership Units) may be declared or paid or set apart for payment by the Partnership and no other
distribution of cash or other property may be declared or made, directly or indirectly, by the
Partnership with respect to any Junior Partnership Units, nor shall any Junior Partnership Units be
redeemed, purchased or otherwise acquired (except for a redemption, purchase or other acquisition
of Partnership Common Units made for purposes of an employee incentive or benefit plan of the
Partnership or any affiliate thereof, including, without limitation, Previous General Partner and
its affiliates) for any consideration (or any monies be paid to or made available for a sinking
fund for the redemption of any such Junior Partnership Units), directly or indirectly, by the
Partnership (except by conversion into or exchange for Junior Partnership Units, or options,
warrants or rights to subscribe for or purchase Junior Partnership Units), nor shall any other cash
or other property be paid or distributed to or for the benefit of holders of Junior Partnership
Units.



     (e) Notwithstanding the foregoing provisions of this Section 4, the Partnership shall not be
prohibited from (i) declaring or paying or setting apart for payment any distribution on any Parity
Partnership Units or (ii) redeeming, purchasing or otherwise acquiring any Parity Partnership
Units, in each case, if such declaration, payment, redemption, purchase or other acquisition is
necessary to maintain the Previous General Partner’s qualification as a REIT.



     5. Liquidation Preference.



     (a) Upon any voluntary or involuntary liquidation, dissolution or winding up of the
Partnership, before any allocation of income or gain by the Partnership shall be made to or set
apart for the holders of any Junior Partnership Units, to the extent possible, the holders of
Preferred Units shall be entitled to be allocated income and gain to the extent necessary to enable
them to receive a liquidation preference (the “Liquidation Preference”) per Preferred Unit equal to
the sum of (i) $25 plus (ii) any accumulated, accrued and unpaid distributions (whether or not
earned or declared) to the date of final distribution to such holders; but such holders will not be
entitled to any further payment or allocation. Until all holders of the Preferred Units have been
paid the Liquidation Preference in full, no allocation of income or gain will be made to any holder
of Junior Partnership Units upon the liquidation, dissolution or winding up of the Partnership.



     (b) If, upon any voluntary or involuntary liquidation, dissolution or winding up of the
Partnership, the assets of the Partnership, or proceeds thereof, distributable among the holders of
Preferred Units shall be insufficient to pay in full the Liquidation Preference and liquidating
payments on any Parity Partnership Units, then following appropriate allocations of Partnership
income, gain, deduction and loss, such assets, or the proceeds thereof, shall be distributed among
the holders of Preferred Units and any such Parity Partnership Units ratably in the same proportion
as the respective amounts that would be payable on such Preferred Units and any such Parity
Partnership Units if all amounts payable thereon were paid in full.



N-5




 









 





     (c) A voluntary or involuntary liquidation, dissolution or winding up of the Partnership will
not include a consolidation or merger of the Partnership with one or more partnerships,
corporations or other entities, or a sale or transfer of all or substantially all of the
Partnership’s assets.



     (d) Upon any voluntary or involuntary liquidation, dissolution or winding up of the
Partnership, after all allocations shall have been made in full to the holders of Preferred Units
and any Parity Partnership Units to the extent necessary to enable them to receive their respective
liquidation preferences, any Junior Partnership Units shall be entitled to receive any and all
assets remaining to be paid or distributed, and the holders of the Preferred Units and any Parity
Partnership Units shall not be entitled to share therein.



     6. Redemption.



     (a) Except as set forth in Section 6(l) hereof, the Preferred Units may not be redeemed at the
option of the Partnership, and will not be required to be redeemed or repurchased by the
Partnership or the Previous General Partner except if a holder of a Preferred Unit effects a
Redemption, as provided for in Section 6(b) hereof. The Partnership or the Previous General Partner
may purchase Preferred Units from time to time in the open market, by tender or exchange offer, in
privately negotiated purchases or otherwise.



     (b) On or after the first (1st) anniversary of becoming a holder of Preferred Units, a
Qualifying Party shall have the right (subject to the terms and conditions set forth herein) to
require the Partnership to redeem all or a portion of the Preferred Units held by such Qualifying
Party (such Preferred Units being hereafter “Tendered Units”) in exchange (a “Redemption”) for REIT
Shares issuable on, or the Cash Amount payable on, the Specified Redemption Date, as determined by
the Partnership in its sole discretion. Any Redemption shall be exercised pursuant to a Notice of
Redemption delivered to the General Partner by the Qualifying Party when exercising the Redemption
right (the “Tendering Party”).



     (c) If the Partnership elects to redeem Tendered Units for REIT Shares rather than cash, then
the Partnership shall direct the Previous General Partner to issue and deliver such REIT Shares to
the Tendering Party pursuant to the terms set forth in this Section 6, in which case, (i) the
Previous General Partner, acting as a distinct legal entity, shall assume directly the obligation
with respect thereto and shall satisfy the Tendering Party’s exercise of its Redemption right, and
(ii) such transaction shall be treated, for Federal income tax purposes, as a transfer by the
Tendering Party of such Tendered Units to the Previous General Partner in exchange for REIT Shares.
In making such election to cause the Previous General Partner to acquire Tendered Units, the
Partnership shall act in a fair, equitable and reasonable manner that neither prefers one group or
class of Tendering Parties over another nor discriminates against a group or class of Tendering
Parties. If the Partnership elects to redeem any number of Tendered Units for REIT Shares, rather
than cash, on the Specified Redemption Date, the Tendering Party shall sell such number of the
Tendered Units to the Previous General Partner in exchange for a number of REIT Shares equal to the
REIT Shares Amount for such number of the Tendered Units. The Tendering Party shall submit (i)
such information, certification or affidavit as the Previous General Partner may reasonably require
in connection with the application of the Ownership Limit and other restrictions and limitations of
the Charter to any such acquisition and (ii) such written representations, investment letters,
legal opinions or other instruments necessary, in the Previous General Partner’s view, to effect
compliance with the Securities Act. The REIT Shares shall be delivered by the Previous General
Partner as duly authorized, validly issued, fully paid and accessible REIT Shares, free of any
pledge, lien, encumbrance or restriction, other than the Ownership Limit and other restrictions
provided in the Charter, the Bylaws of the Previous General Partner, the Securities Act and
relevant state securities or “blue sky” laws. Neither any Tendering Party whose Tendered Units are
acquired by the Previous General Partner pursuant to this Section 6, any Partner, any Assignee nor
any other interested Person shall have any right to require or cause the Previous General Partner
or the General Partner to register, qualify or list any REIT Shares owned or held by such Person,
whether or not such REIT Shares are issued pursuant to this Section 6, with the SEC, with any state
securities commissioner, department or agency, under the Securities Act or the Exchange Act or with
any stock exchange; provided, however, that this limitation shall not be in derogation of any
registration or similar rights granted pursuant to any other written agreement between the Previous
General Partner and any such Person. Notwithstanding any delay in such delivery, the Tendering
Party shall be deemed the owner of such REIT Shares for all purposes, including, without
limitation, rights to vote or consent, receive dividends, and exercise rights, as of the Specified
Redemption Date. REIT Shares issued upon an acquisition of the Tendered Units by the Previous
General Partner pursuant to this Section 6 may contain such legends regarding restrictions under
the Securities Act and



N-6




 









 




applicable state securities laws as the Previous General Partner in good faith determines to
be necessary or advisable in order to ensure compliance with such laws.




     (d) The Partnership shall have no obligation to effect any redemption unless and until a
Tendering Party has given the Partnership a Notice of Redemption. Each Notice of Redemption shall
be sent by hand delivery or by first class mail, postage prepaid, to AIMCO Properties, L.P., c/o
AIMCO-GP, Inc., 4582 South Ulster Street Parkway, Suites 1100, Denver, Colorado 80237, Attention:
Investor Relations, or to such other address as the Partnership shall specify in writing by
delivery to the holders of the Preferred Units in the same manner as that set forth above for
delivery of the Notice of Redemption. At any time prior to the Specified Redemption Date for any
Redemption, any holder may revoke its Notice of Redemption.



     (e) A Tendering Party shall have no right to receive distributions with respect to any
Tendered Units (other than the Cash Amount) paid after delivery of the Notice of Redemption,
whether or not the record date for such distribution precedes or coincides with such delivery of
the Notice of Redemption. If the Partnership elects to redeem any number of Tendered Units for
cash, the Cash Amount for such number of Tendered Units shall be delivered as a certified check
payable to the Tendering Party or, in the General Partner’s sole and absolute discretion, in
immediately available funds.



     (f) In the event that the Partnership declines to cause the Previous General Partner to
acquire all of the Tendered Units from the Tendering Party in exchange for REIT Shares pursuant to
this Section 6 following receipt of a Notice of Redemption (a “Declination”):



     (1) The Previous General Partner or the General Partner shall give notice of such Declination
to the Tendering Party on or before the close of business on the Cut-Off Date.



     (2) The Partnership may elect to raise funds for the payment of the Cash Amount either (a) by
requiring that the Previous General Partner contribute such funds from the proceeds of a registered
public offering (a “Public Offering Funding”) by the Previous General Partner of a number of REIT
Shares (“Registrable Shares”) equal to the REIT Shares Amount with respect to the Tendered Units or
(b) from any other sources (including, but not limited to, the sale of any Property and the
incurrence of additional Debt) available to the Partnership.



     (3) Promptly upon the General Partner’s receipt of the Notice of Redemption and the Previous
General Partner or the General Partner giving notice of the Partnership’s Declination, the General
Partner shall give notice (a “Single Funding Notice”) to all Qualifying Parties then holding
Preferred Units and having Redemption rights pursuant to this Section 6 and require that all such
Qualifying Parties elect whether or not to effect a Redemption of their Preferred Units to be
funded through such Public Offering Funding. In the event that any such Qualifying Party elects to
effect such a Redemption, it shall give notice thereof and of the number of Preferred Units to be
made subject thereon in writing to the General Partner within ten (10) Business Days after receipt
of the Single Funding Notice, and such Qualifying Party shall be treated as a Tendering Party for
all purposes of this Section 6. In the event that a Qualifying Party does not so elect, it shall
be deemed to have waived its right to effect a Redemption for the next twelve months; provided,
however, that the Previous General Partner shall not be required to acquire Preferred Units
pursuant to this Section 6(f) more than twice within any twelve-month period.


Any proceeds from a Public Offering Funding that are in excess of the Cash Amount shall be for the
sole benefit of the Previous General Partner and/or the General Partner. The General Partner
and/or the Special Limited Partner shall make a Capital Contribution of such amounts to the
Partnership for an additional General Partner Interest and/or Limited Partner Interest. Any such
contribution shall entitle the General Partner and the Special Limited Partner, as the case may be,
to an equitable Percentage Interest adjustment.




     (g) Notwithstanding the provisions of this Section 6, the Previous General Partner shall not,
under any circumstances, elect to acquire Tendered Units in exchange for REIT Shares if such
exchange would be prohibited under the Charter.



N-7




 









 





     (h) Notwithstanding anything herein to the contrary, with respect to any Redemption pursuant
to this Section 6:



          (1) All Preferred Units acquired by the Previous General Partner pursuant to this Section 6
hereof shall be contributed by the Previous General Partner to either or both of the General
Partner and the Special Limited Partner in such proportions as the Previous General Partner, the
General Partner and the Special Limited Partner shall determine. Any Preferred Units so
contributed to the General Partner shall automatically, and without further action required, be
converted into and deemed to be a General Partner Interest comprised of an equal number of
Partnership Common Units. Any Preferred Units so contributed to the Special Limited Partner shall
be converted into Partnership Common Units.



          (2) Subject to the Ownership Limit, no Tendering Party may effect a Redemption for less than
five hundred (500) Preferred Units or, if such Tendering Party holds (as a Limited Partner or,
economically, as an Assignee) less than five hundred (500) Preferred Units, all of the Preferred
Units held by such Tendering Party.



          (3) No Tendering Party may (a) effect a Redemption more than once in any fiscal quarter of a
Twelve-Month Period or (b) effect a Redemption during the period after the Partnership Record Date
with respect to a distribution and before the record date established by the Previous General
Partner for a distribution to its shareholders of some or all of its portion of such Partnership
distribution.



          (4) Notwithstanding anything herein to the contrary, with respect to any Redemption or
acquisition of Tendered Units by the Previous General Partner pursuant to this Section 6, in the
event that the Previous General Partner or the General Partner gives notice to all Limited Partners
(but excluding any Assignees) then owning Partnership Interests (a “Primary Offering Notice”) that
the Previous General Partner desires to effect a primary offering of its equity securities then,
unless the Previous General Partner and the General Partner otherwise consent, commencement of the
actions denoted in Section 6(f) hereof as to a Public Offering Funding with respect to any Notice
of Redemption thereafter received, whether or not the Tendering Party is a Limited Partner, may be
delayed until the earlier of (a) the completion of the primary offering or (b) ninety (90) days
following the giving of the Primary Offering Notice.



          (5) Without the Consent of the Previous General Partner, no Tendering Party may effect a
Redemption within ninety (90) days following the closing of any prior Public Offering Funding.



          (6) The consummation of such Redemption shall be subject to the expiration or termination of
the applicable waiting period, if any, under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.



          (7) The Tendering Party shall continue to own (subject, in the case of an Assignee, to the
provision of Section 11.5 of the Agreement) all Preferred Units subject to any Redemption, and be
treated as a Limited Partner or an Assignee, as applicable, with respect to such Preferred Units
for all purposes of the Agreement, until such Preferred Units are either paid for by the
Partnership pursuant to this Section 6 or transferred to the Previous General Partner (or directly
to the General Partner or Special Limited Partner) and paid for, by the issuance of the REIT
Shares, pursuant to this Section 6 on the Specified Redemption Date. Until a Specified Redemption
Date and an acquisition of the Tendered Units by the Previous General Partner pursuant to this
Section 6, the Tendering Party shall have no rights as a shareholder of the Previous General
Partner with respect to the REIT Shares issuable in connection with such acquisition.



     For purposes of determining compliance with the restrictions set forth in this Section 6(h), all
Partnership Common Units and Partnership Preferred Units, including Preferred Units, beneficially
owned by a Related Party of a Tendering Party shall be considered to be owned or held by such
Tendering Party.



     (i) In connection with an exercise of Redemption rights pursuant to this Section 6, the
Tendering Party shall submit the following to the General Partner, in addition to the Notice of
Redemption:



N-8




 









 





          (1) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the
actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and
856(h), of REIT Shares and any other classes or shares of the Previous General Partner by (i) such
Tendering Party and (ii) any Related Party and (b) representing that, after giving effect to the
Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the
Ownership Limit;



          (2) A written representation that neither the Tendering Party nor any Related Party has any
intention to acquire any additional REIT Shares or any other class of shares of the Previous
General Partner prior to the closing of the Redemption on the Specified Redemption Date; and



          (3) An undertaking to certify, at and as a condition to the closing of the Redemption on the
Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares or
any other class of shares of the Previous General Partner by the Tendering Party and any Related
Party remain unchanged from that disclosed in the affidavit required by Section 6(i)(1) or (b)
after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own
REIT Shares or other shares of the Previous General Partner in violation of the Ownership Limit.



          (j) On or after the Specific Redemption Date, each holder of Preferred Units shall surrender
to the Partnership the certificate evidencing such holder’s Preferred Units, at the address to
which a Notice of Redemption is required to be sent. Upon such surrender of a certificate, the
Partnership shall thereupon pay the former holder thereof the applicable Cash Amount and/or deliver
REIT Shares for the Preferred Units evidenced thereby. From and after the Specific Redemption Date
(i) distributions with respect to the Preferred Units shall cease to accumulate, (ii) the Preferred
Units shall no longer be deemed outstanding, (iii) the holders thereof shall cease to be Partners
to the extent of their interest in such Preferred Units, and (iv) all rights whatsoever with
respect to the Preferred Units shall terminate, except the right of the holders of the Preferred
Units to receive Cash Amount and/or REIT Shares therefor, without interest or any sum of money in
lieu of interest thereon, upon surrender of their certificates therefor.



          (k) Notwithstanding the provisions of this Section 6, the Tendering Parties (i) shall not be
entitled to elect or effect a Redemption where the Redemption would consist of less than all the
Preferred Units held by Partners and, to the extent that the aggregate Percentage Interests of the
Limited Partners would be reduced, as a result of the Redemption, to less than one percent (1%) and
(ii) shall have no rights under the Agreement that would otherwise be prohibited under the Charter.
To the extent that any attempted Redemption would be in violation of this Section 6(k), it shall
be null and void ab initio, and the Tendering Party shall not acquire any rights or economic
interests in REIT Shares otherwise issuable by the Previous General Partner hereunder.



          (l) Notwithstanding any other provision of the Agreement, on and after the date on which the
aggregate Percentage Interests of the Limited Partners (other than the Special Limited Partner) are
less than one percent (1%), the Partnership shall have the right, but not the obligation, from time
to time and at any time to redeem any and all outstanding Limited Partner Interests (other than the
Special Limited Partner’s Limited Partner Interest) by treating any Limited Partner as a Tendering
Party who has delivered a Notice of Redemption pursuant to this Section 6 for the amount of
Preferred Units to be specified by the General Partner, in its sole and absolute discretion, by
notice to such Limited Partner that the Partnership has elected to exercise its rights under this
Section 6(l). Such notice given by the General Partner to a Limited Partner pursuant to this
Section 6(l) shall be treated as if it were a Notice of Redemption delivered to the General Partner
by such Limited Partner. For purposes of this Section 6(l), (a) any Limited Partner (whether or
not eligible to be a Tendering Party) may, in the General Partner’s sole and absolute discretion,
be treated as a Tendering Party and (b) the provisions of Sections 6(f)(1), 6(h)(2), 6(h)(3) and
6(h)(5) hereof shall not apply, but the remainder of this Section shall apply, mutatis mutandis.



     7. Status of Reacquired Units.



     All Preferred Units which shall have been issued and reacquired in any manner by the
Partnership shall be deemed cancelled and no longer outstanding.



N-9




 









 





     8. General.



     The ownership of the Preferred Units shall be evidenced by one or more certificates in the
form of Annex II hereto. The General Partner shall amend Exhibit A to the Agreement from time to
time to the extent necessary to reflect accurately the issuance of, and subsequent redemption, or
any other event having an effect on the ownership of, the Class Seven Partnership Preferred Units.



     9. Allocations of Income and Loss.



     Subject to the terms of Section 5 hereof, for each taxable year, (i) each holder of Preferred
Units will be allocated, to the extent possible, net income of the Partnership in an amount equal
to the distributions made on such holder’s Preferred Units during such taxable year, and (ii) each
holder of Preferred Units will be allocated its pro rata share, based on the portion of outstanding
Preferred Units held by it, of any net loss of the Partnership that is not allocated to holders of
Partnership Common Units or other interests in the Partnership.



     10. Voting Rights.



     Except as otherwise required by applicable law or in the Agreement, the holders of the
Preferred Units will have the same voting rights as holders of the Partnership Common Units. As
long as any Preferred Units are outstanding, in addition to any other vote or consent of partners
required by law or by the Agreement, the affirmative vote or consent of holders of at least 50% of
the outstanding Preferred Units will be necessary for effecting any amendment of any of the
provisions of the Partnership Unit Designation of the Preferred Units that materially and adversely
affects the rights or preferences of the holders of the Preferred Units. The creation or issuance
of any class or series of Partnership units, including, without limitation, any Partnership units
that may have rights junior to, on a parity with, or senior or superior to the Preferred Units,
will not be deemed to have a material adverse effect on the rights or preferences of the holders of
Preferred Units. With respect to the exercise of the above described voting rights, each
Preferred Unit will have one (1) vote per Preferred Unit.



     11. Restrictions on Transfer.



     Preferred Units are subject to the same restrictions on transfer as are, and the holders of
Preferred Units shall be entitled to the same rights of transfer as are, applicable to Common Units
as set forth in the Agreement.



N-10




 









 





ANNEX I

TO EXHIBIT N




NOTICE OF REDEMPTION




	 	 	 
	To:

	 	AIMCO Properties, L.P.
	 

	 	c/o AIMCO-GP, Inc.
	 

	 	4582 South Ulster Street Parkway
	 

	 	Suite 1100
	 

	 	Denver, Colorado 80237
	 

	 	Attention: Investor Relations






     The undersigned Limited Partner or Assignee hereby tenders for redemption Class Seven
Partnership Preferred Units in AIMCO Properties, L.P. in accordance with the terms of the Agreement
of Limited Partnership of AIMCO Properties, L.P., dated as of July 29, 1994, as it may be amended
and supplemented from time to time (the “Agreement”). All capitalized terms used herein and not
otherwise defined shall have the respective meanings ascribed thereto in the Partnership Unit
Designation of the Class Seven Partnership Preferred Units. The undersigned Limited Partner or
Assignee:



     (a) if the Partnership elects to redeem such Class Seven Partnership Preferred Units for REIT
Shares rather than cash, hereby irrevocably transfers, assigns, contributes and sets over to
Previous General Partner all of the undersigned Limited Partner’s or Assignee’s right, title and
interest in and to such Class Seven Partnership Preferred Units;



     (b) undertakes (i) to surrender such Class Seven Partnership Preferred Units and any
certificate therefor at the closing of the Redemption contemplated hereby and (ii) to furnish to
Previous General Partner, prior to the Specified Redemption Date:




     (1) A written affidavit, dated the same date as this Notice of Redemption, (a)
disclosing the actual and constructive ownership, as determined for purposes of Code
Sections 856(a)(6) and 856(h), of REIT Shares by (i) the undersigned Limited Partner or
Assignee and (ii) any Related Party and (b) representing that, after giving effect to the
Redemption, neither the undersigned Limited Partner or Assignee nor any Related Party will
own REIT Shares in excess of the Ownership Limit;




     (2) A written representation that neither the undersigned Limited Partner or Assignee
nor any Related Party has any intention to acquire any additional REIT Shares prior to the
closing of the Redemption contemplated hereby on the Specified Redemption Date; and




     (3) An undertaking to certify, at and as a condition to the closing of the Redemption
contemplated hereby on the Specified Redemption Date, that either (a) the actual and
constructive ownership of REIT Shares by the undersigned Limited Partner or Assignee and any
Related Party remain unchanged from that disclosed in the affidavit required by paragraph
(1) above, or (b) after giving effect to the Redemption contemplated hereby, neither the
undersigned Limited Partner or Assignee nor any Related Party shall own REIT Shares in
violation of the Ownership Limit.



     (c) directs that the certificate representing the REIT Shares, or the certified check
representing the Cash Amount, in either case, deliverable upon the closing of the Redemption
contemplated hereby be delivered to the address specified below;



     (d) represents, warrants, certifies and agrees that:




     (i) the undersigned Limited Partner or Assignee has, and at the closing of the
Redemption will have, good, marketable and unencumbered title to such Preferred
Units, free and clear of the rights or interests of any other person or entity;



N-I-1




 









 






     (ii) the undersigned Limited Partner or Assignee has, and at the closing of the
Redemption will have, the full right, power and authority to tender and surrender
such Preferred Units as provided herein; and




     (iii) the undersigned Limited Partner or Assignee has obtained the consent or
approval of all persons and entities, if any, having the right to consent to or
approve such tender and surrender.



     Dated: _______________



	 	 	 	 	 
	 

	 	Name of Limited Partner or Assignee:	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 

	 	Signature of Limited Partner or
Assignee)	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 

	 	(Street Address)	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	(continued on the next page)

	 	(City)     (State)     (Zip Code)	 	 






N-I-2




 









 





	 	 	 	 	 
	Issue check payable to
or Certificates in the
name of:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Please insert social security 

or identifying number:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	          Signature Guaranteed by:	 	 
	 
	 	 	 	 
	 

	 	 
	 	 





NOTICE: THE SIGNATURE OF THIS NOTICE OF REDEMPTION MUST CORRESPOND WITH THE NAME(S) AS WRITTEN
UPON THE FACE OF THE CERTIFICATE FOR THE CLASS SEVEN PREFERRED UNITS WHICH ARE BEING REDEEMED IN
EVERY PARTICULAR WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.



THE SIGNATURE SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION, (Banks, Stockbrokers,
Savings and Loan Associations and Credit Unions), WITH MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM PURSUANT TO SEC RULE 17Ad-15.




N-I-3





 









 








ANNEX II

TO EXHIBIT N




FORM OF UNIT CERTIFICATE

OF

CLASS SEVEN PARTNERSHIP PREFERRED UNITS



THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION, UNLESS THE TRANSFEROR DELIVERS TO THE PARTNERSHIP
AN OPINION OF COUNSEL SATISFACTORY TO THE PARTNERSHIP, IN FORM AND SUBSTANCE SATISFACTORY TO THE
PARTNERSHIP, TO THE EFFECT THAT THE PROPOSED SALE, TRANSFER OR OTHER DISPOSITION MAY BE EFFECTED
WITHOUT REGISTRATION UNDER THE ACT AND UNDER APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS. IN
ADDITION, THE LIMITED PARTNERSHIP INTEREST EVIDENCED BY THIS CERTIFICATE MAY BE SOLD OR OTHERWISE
TRANSFERRED ONLY IN COMPLIANCE WITH THE RESTRICTIONS ON TRANSFER SET FORTH IN THE AGREEMENT OF
LIMITED PARTNERSHIP OF AIMCO PROPERTIES, L.P., DATED AS OF JULY 29, 1994, AS IT MAY BE AMENDED
AND/OR SUPPLEMENTED FROM TIME TO TIME, A COPY OF WHICH MAY BE OBTAINED FROM AIMCO- GP, INC, THE
GENERAL PARTNER, AT ITS PRINCIPAL EXECUTIVE OFFICE.




Certificate Number ________




AIMCO PROPERTIES, L.P.

FORMED UNDER THE LAWS OF THE STATE OF DELAWARE




This certifies that ________________________________________________




is the owner of __________________________________________________




CLASS SEVEN PARTNERSHIP PREFERRED UNITS

OF

AIMCO PROPERTIES, L.P.,



transferable on the books of the Partnership in person or by duly authorized attorney on the
surrender of this Certificate properly endorsed. This Certificate and the Class Seven Partnership
Preferred Units represented hereby are issued and shall be held subject to all of the provisions of
the Agreement of Limited Partnership of AIMCO Properties, L.P., as the same may be amended and/or
supplemented from time to time.




IN WITNESS WHEREOF, the undersigned has signed this Certificate.




	 	 	 	 	 
	Dated: 	By 


 	 
	 	 	 
	 	 	 
	 	 	 
	 



N-II-1





 









 





ASSIGNMENT




     For Value Received,                                                             hereby sells, assigns
and transfers unto                                       
Class Seven Partnership Preferred Unit(s) represented by the within
Certificate, and does hereby irrevocably constitute and appoint the General Partner of AIMCO
Properties, L.P. as its Attorney to transfer said Class Seven Partnership Preferred Unit(s) on the
books of AIMCO Properties, L.P. with full power of substitution in the premises.



Dated: ____________________




	 	 	 
	 

	 	By:                                                            
	 

	 	Name:
	 

	 	Signature Guaranteed by:
	 
	 	 
	 

	 	 







NOTICE: THE SIGNATURE OF THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S) AS WRITTEN UPON THE FACE
OF THE CERTIFICATE IN EVERY PARTICULAR WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.



THE SIGNATURE SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION, (Banks, Stockbrokers,
Savings and Loan Associations and Credit Unions), WITH MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM PURSUANT TO SEC RULE 17Ad-15.



N-II-2




 









 





EXHIBIT O




PARTNERSHIP UNIT DESIGNATION OF

THE CLASS EIGHT PARTNERSHIP PREFERRED UNITS OF

AIMCO PROPERTIES, L.P.




     1. Number of Units and Designation.



     A class of Partnership Preferred Units is hereby designated as “Class Eight Partnership
Preferred Units,” and the number of Partnership Preferred Units constituting such class shall be
150,000.



     2. Definitions.



     Capitalized terms used and not otherwise defined herein shall have the meanings assigned
thereto in the Agreement, as modified by this Partnership Unit Designation and the defined terms
used herein. For purposes of this Partnership Unit Designation, the following terms shall have the
respective meanings ascribed below:



     “Agreement” shall mean the Agreement of Limited Partnership of the Partnership, as amended,
supplemented or restated from time to time.



     “Assignee” shall mean a Person to whom one or more Class Eight Partnership Preferred Units
have been Transferred in a manner permitted under the Agreement, but who has not become a
Substituted Limited Partner, and who has the rights set forth in Section 11.5 of the Agreement.



     “Class Eight Partnership Preferred Unit” shall mean a Partnership Preferred Unit with the
designations, preferences and relative, participating, optional or other special rights, powers and
duties as are set forth in this Partnership Unit Designation.



     “Fair Market Value” shall mean, at any time and with respect to any Class Eight Partnership
Preferred Units, an amount equal to the amount of assets that would be receivable by the holder of
such Class Eight Partnership Preferred Units at that time if all of the assets of the Partnership
were sold and the proceeds therefrom were distributed in accordance with the Agreement.



     “Junior Partnership Units” shall have the meaning set forth in Section 11(c) of this
Partnership Unit Designation.



     “Partnership” shall mean AIMCO Properties, L.P., a Delaware limited partnership.



     “Senior Partnership Units” shall have the meaning set forth in Section 11(a) of this
Partnership Unit Designation.



     “Transfer Agent” shall mean such transfer agent as may be designated by the Partnership or its
designee as the transfer agent for the Class Eight Partnership Preferred Units; provided, that if
the Partnership has not designated a transfer agent, then the Partnership shall act as the Transfer
Agent for the Class Eight Partnership Preferred Units.



3. Cash Distributions.




     At any time that the Partnership pays cash distributions to holders of Partnership Common
Units, the Partnership shall pay cash distributions to holders of the Class Eight Partnership
Preferred Units in an amount per Class Eight Partnership Preferred Unit equal to the per unit
distribution on the Partnership Common Units; provided, that distributions upon liquidation of the
Partnership shall be made in accordance with Section 13.2 of the Agreement. Holders of Class Eight
Partnership Preferred Units will not be entitled to receive any other distributions. If a record
date is established by the General Partner for the payment of distributions in respect of
Partnership Common Units, the same date shall be the record date for payment of distributions in
respect of the Class Eight



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Partnership Preferred Units. With respect to the first distribution paid to holders of Class
Eight Partnership Preferred Units after the initial issuance thereof, such distribution shall be
pro rated based on the portion of the period in respect of which such distribution is paid that
such Class Eight Partnership Preferred Units were outstanding.




     4. Redemption.



     (a) The Class Eight Partnership Preferred Units may be redeemed at the option of the
Partnership at any time at a redemption price payable in cash equal to the Fair Market Value of
such Class Eight Partnership Preferred Units.



     (b) The redemption date shall be selected by the Partnership, shall be specified in a notice
of redemption, and shall be not less than 5 days nor more than 60 days after the date notice of
redemption is sent by the Partnership.



     (c) If the Partnership shall redeem Class Eight Partnership Preferred Units, notice of such
redemption shall be given to each holder of record of the Class Eight Partnership Preferred Units
to be redeemed. Such notice shall be provided by first class mail, postage prepaid, at such
holder’s address as the same appears on the records of the Partnership. Neither the failure to
mail any notice required by this paragraph (c), nor any defect therein or in the mailing thereof to
any particular holder, shall affect the sufficiency of the notice or the validity of the
proceedings for redemption with respect to the other holders. Any notice which has been mailed in
the manner herein provided shall be conclusively presumed to have been duly given on the date
mailed whether or not the holder receives the notice. Each such notice shall state, as
appropriate: (i) the redemption date; (ii) the place or places at which certificates for such
shares are to be surrendered for cash; and (iii) the redemption price payable on such redemption
date. Notice having been mailed as aforesaid, from and after the redemption date (unless the
Partnership shall fail to make available the amount of cash necessary to effect such redemption),
(i) such Class Eight Partnership Preferred Units shall no longer be deemed to be outstanding, and
(ii) all rights of the holders thereof as holders of Class Eight Partnership Preferred Units shall
cease except the right to receive the cash payable upon such redemption, without interest thereon,
upon surrender of their certificates if so required. As promptly as practicable after the
surrender in accordance with such notice of the certificates for any such Class Eight Partnership
Preferred Units to be so redeemed (properly endorsed or assigned for transfer, if the Partnership
shall so require and the notice shall so state), such certificates shall be exchanged for cash
(without interest thereon) for which such shares have been redeemed in accordance with such notice.



     5. Conversion.



     (a) Subject to and upon compliance with the provisions of this Section 5, on or after November
16, 2001, a holder of Class Eight Partnership Preferred Units shall have the right, at such
holder’s option, to convert such units, in whole or in part, into the number of Partnership Common
Units obtained by dividing (i) the Fair Market Value of the Class Eight Partnership Preferred Units
converted, by (ii) the value of a REIT Share (assuming, for such purpose, that the Valuation Date
is the date of conversion of such units). In order to exercise the conversion right, the holder of
each Class Eight Partnership Preferred Unit to be converted shall surrender the certificate
representing such unit, duly endorsed or assigned to the Partnership or in blank at the office of
the Transfer Agent, accompanied by written notice to the Partnership that the holder thereof elects
to convert such Class Eight Partnership Preferred Unit.



     (b)
i) Unless the Partnership Common Units issuable on conversion are to be issued in the
same name as the name in which such Class Eight Partnership Preferred Units are registered, each
such unit surrendered following conversion shall be accompanied by instruments of transfer, in form
satisfactory to the Partnership, duly executed by the holder or such holder’s duly authorized
representative, and an amount sufficient to pay any transfer or similar tax (or evidence reasonably
satisfactory to the Partnership demonstrating that such taxes have been paid).



                (ii) As promptly as practicable after the surrender of certificates for Class Eight
Partnership Preferred Units as aforesaid, and in any event no later than three business days after
the date of such surrender, the Partnership shall issue and deliver at such office to such holder,
or send on such holders’ written order,



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a certificate or certificates for the number of full Partnership Common Units issuable upon
the conversion of such Class Eight Partnership Preferred Units in accordance with the provisions of
this Section 5, and any fractional interest in respect of a Partnership Common Unit arising upon
such conversion shall be settled as provided in paragraph (c) of this Section 5.




               (iii) Each conversion shall be deemed to have been effected immediately prior to the close of
business on the date on which the certificates for Class Eight Partnership Preferred Units shall
have been surrendered to the Partnership for conversion as provided in paragraph (a) of this
Section 5; and the person or persons in whose name or names any certificate or certificates for
Partnership Common Units shall be issuable upon such conversion shall be deemed to have become the
holder or holders of record of the units represented thereby at such time on such date unless the
transfer books of the Partnership shall be closed on that date, in which event such person or
persons shall be deemed to become such holder or holders of record at the close of business on the
next succeeding day on which such transfer books are open.



     (c) No fractional Partnership Common Units or scrip representing fractions of a Partnership
Common Unit shall be issued upon conversion of the Class Eight Partnership Preferred Units.
Instead of any fractional interest in a Partnership Common Unit that would otherwise be deliverable
upon the conversion of Class Eight Partnership Preferred Units, the Partnership shall pay to the
holder of such units an amount of cash equal to the Fair Market Value of such fractional interest
as of the date of conversion. If more than one of any holder’s units shall be converted at one
time, the number of full Partnership Common Units issuable upon conversion thereof shall be
computed on the basis of the aggregate number of Class Eight Partnership Preferred Units so
converted.



     (d) If the Partnership shall be a party to any transaction (including with limitation a
merger, consolidation, statutory exchange, sale of all or substantially all of the Partnership’s
assets or recapitalization of the Partnership Common Units, but excluding any transaction as to
which a change in the Adjustment Factor would be effected) (each of the foregoing being referred to
herein as a “Transaction”), in each case, as a result of which Partnership Common Units shall be
converted into the right to receive securities or other property (including cash or any combination
thereof), each Class Eight Partnership Preferred Unit which is not converted into the right to
receive securities or other property in connection with such Transaction shall thereupon be
convertible into the kind and amount of securities and other property (including cash or any
combination thereof) receivable upon such consummation by a holder of that number of Partnership
Common Units into which a Class Eight Partnership Preferred Unit was convertible immediately prior
to such Transaction. The Partnership shall not be a party to any Transaction unless the terms of
such Transaction are consistent with the provisions of this paragraph (d), and it shall not consent
or agree to the occurrence of any Transaction until the Partnership has entered into an agreement
with the successor or purchasing entity, as the case may be, for the benefit of the holders of the
Class Eight Partnership Preferred Units that will contain provisions enabling the holders of Class
Eight Partnership Preferred Units that remain outstanding after such Transaction to convert into
the consideration received by holders of Partnership Common Units at the conversion price in effect
immediately prior to such Transaction. The provisions of this paragraph (d) shall apply to
successive Transactions.



     (e) The Partnership will pay any and all documentary stamp or similar issue or transfer taxes
payable in respect of the issue or delivery of Partnership Common Units or other securities or
property on conversion of Class Eight Partnership Preferred Units pursuant hereto; provided,
however, that the Partnership shall not be required to pay any tax that may be payable in respect
of any transfer involved in the issue or delivery of Partnership Common Units or other securities
or property in a name other than that of the holder of the Class Eight Partnership Preferred Units
to be converted, and no such issue or delivery shall be made unless and until the person requesting
such issue or delivery has paid to the Partnership the amount of any such tax or established, to
the reasonable satisfaction of the Partnership, that such tax has been paid.



     6. Status of Reacquired Units.



     All Class Eight Partnership Preferred Units which shall have been issued and reacquired in any
manner by the Partnership shall be deemed cancelled and no longer outstanding.



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     7. General.



     The ownership of the Class Eight Partnership Preferred Units shall be evidenced by one or more
certificates in the form of Annex I hereto. The General Partner shall amend Exhibit A to the
Agreement from time to time to the extent necessary to reflect accurately the issuance of, and
subsequent redemption, or any other event having an effect on the ownership of, the Class Eight
Partnership Preferred Units.



     8. Allocations of Income and Loss; Capital Accounts.



     Upon initial issuance, the capital account balance attributable to the Class Eight Partnership
Preferred Units shall be zero. Thereafter, for each Fiscal Year, the Class Eight Partnership
Preferred Units shall be allocated a portion of the Net Income and Net Loss of the Partnership
equal to the portion of the Net Income and Net Loss of the Partnership that would be allocated to
such Class Eight Partnership Preferred Units pursuant to Article 6 of the Agreement if the Class
Eight Partnership Preferred Units were Partnership Common Units. In addition, (i) not more than 60
days prior to a redemption of Class Eight Partnership Preferred Units pursuant to Section 4 hereof
and (ii) at any time after January 1, 2000, upon (x) a sale of substantially all of the assets of
the Partnership or a liquidation, dissolution, or winding up of the Partnership or (y) in the event
the Gross Asset Value of any Partnership Asset is adjusted pursuant to subsection (b) or (c) of the
definition of “Gross Asset Value” in the Agreement, to the extent possible, the Partnership shall
first allocate Partnership gain (and, to the extent necessary, gross income) among the Class Eight
Partnership Preferred Units (the “Special Allocation”) in an amount equal to that necessary to
permit each Class Eight Partnership Preferred Unit to receive, upon a liquidation, dissolution, or
winding up of the Partnership pursuant to Section 13.2 of the Agreement, an amount of assets of the
Partnership equal to the amount of assets that would be receivable with respect to a Partnership
Common Unit, as determined on a per unit basis. Notwithstanding the foregoing, the Class Eight
Partnership Preferred Units shall not be entitled to receive, and shall not receive, the Special
Allocation unless and until the Class I High Performance Partnership Units have been allocated the
full amount of Partnership income and gain required under Section 5 of the Partnership Unit
Designation for the Class I High Performance Partnership Units.



     9. Voting Rights



     Except as otherwise required by applicable law or in the Agreement, the holders of the Class
Eight Partnership Preferred Units will have the same voting rights as holders of the Partnership
Common Units. As long as any Class Eight Partnership Preferred Units are outstanding, in addition
to any other vote or consent of partners required by law or by the Agreement, the affirmative vote
or consent of holders of at least 50% of the outstanding Class Eight Partnership Preferred Units
will be necessary for effecting any amendment of any of the provisions of the Partnership Unit
Designation of the Class Eight Partnership Preferred Units that materially and adversely affects
the rights or preferences of the holders of the Class Eight Partnership Preferred Units. The
creation or issuance of any class or series of Partnership Units, including, without limitation,
any Partnership Units that may have rights junior to, on a parity with, or senior or superior to
the Class Eight Partnership Preferred Units, will not be deemed to materially and adversely affect
the rights or preferences of the holders of the Class Eight Partnership Preferred Units. With
respect to the exercise of the above-described voting rights, each Class Eight Partnership
Preferred Unit will have one (1) vote per Class Eight Partnership Preferred Unit.



     11. Restrictions on Transfer.



     Class Eight Partnership Preferred Units are subject to the same restrictions on transfer
applicable to Partnership Common Units, as set forth in the Agreement.



     11. Ranking.



     Any class or series of Partnership Units of the Partnership shall be deemed to rank:



     (a) prior or senior to the Class Eight Partnership Preferred Units, as to the payment of
distributions and as to the distribution of assets upon liquidation, dissolution or winding up, if
(i) the holders of such class or series shall be entitled to the receipt of distributions and of
amounts distributable upon liquidation,



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dissolution or winding up, as the case may be, in preference or priority to the holders of
Class Eight Partnership Preferred Units or (ii) such class or series of Partnership Units shall be
Class G Partnership Preferred Units, Class One Partnership Preferred Units, Class Two Partnership
Preferred Units, Class Three Partnership Preferred Units, Class Four Partnership Preferred Units,
Class Six Partnership Preferred Units or Class Seven Partnership Preferred Units (the Partnership
Units referred to in clauses (i) and (ii) of this paragraph being hereinafter referred to,
collectively, as “Senior Partnership Units”);




     (b) on a parity with the Class Eight Partnership Preferred Units, as to the payment of
distributions and as to the distribution of assets upon liquidation, dissolution or winding up,
whether or not the distribution rates, distribution payment dates or redemption or liquidation
prices per unit or other denomination thereof be different from those of the Class Eight
Partnership Preferred Units if (i) such class or series of Partnership Units shall be Partnership
Common Units, Class I High Performance Partnership Units or Class Five Partnership Units or (ii)
the holders of such class or series of Partnership Units and the Class Eight Partnership Preferred
Units shall be entitled to the receipt of distributions and of amounts distributable upon
liquidation, dissolution or winding up in proportion to their respective amounts of accrued and
unpaid distributions per unit or other denomination or liquidation preferences, without preference
or priority one over the other (the Partnership Units referred to in clauses (i) and (ii) of this
paragraph being hereinafter referred to, collectively, as “Parity Partnership Units”); and



     (c) junior to the Class Eight Partnership Preferred Units, as to the payment of distributions
and as to the distribution of assets upon liquidation, dissolution or winding up, if the holders of
Class Eight Partnership Preferred Units shall be entitled to receipt of distributions or of amounts
distributable upon liquidation, dissolution or winding up, as the case may be, in preference or
priority to the holders of such class or series of Partnership Units (the Partnership Units
referred to in this paragraph being hereinafter referred to, collectively, as “Junior Partnership
Units”).



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ANNEX I




FORM OF UNIT CERTIFICATE

OF

CLASS EIGHT PARTNERSHIP PREFERRED UNITS



THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION, UNLESS THE TRANSFEROR DELIVERS TO THE PARTNERSHIP
AN OPINION OF COUNSEL SATISFACTORY TO THE PARTNERSHIP, IN FORM AND SUBSTANCE SATISFACTORY TO THE
PARTNERSHIP, TO THE EFFECT THAT THE PROPOSED SALE, TRANSFER OR OTHER DISPOSITION MAY BE EFFECTED
WITHOUT REGISTRATION UNDER THE ACT AND UNDER APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS. IN
ADDITION, THE LIMITED PARTNERSHIP INTEREST EVIDENCED BY THIS CERTIFICATE MAY BE SOLD OR OTHERWISE
TRANSFERRED ONLY IN COMPLIANCE WITH THE RESTRICTIONS ON TRANSFER SET FORTH IN THE AGREEMENT OF
LIMITED PARTNERSHIP OF AIMCO PROPERTIES, L.P., DATED AS OF JULY 29, 1994, AS IT MAY BE AMENDED
AND/OR SUPPLEMENTED FROM TIME TO TIME, A COPY OF WHICH MAY BE OBTAINED FROM AIMCO-GP, INC, THE
GENERAL PARTNER, AT ITS PRINCIPAL EXECUTIVE OFFICE.




Certificate Number                     




AIMCO PROPERTIES, L.P.

FORMED UNDER THE LAWS OF THE STATE OF DELAWARE




	 	 	 	 	 
	This certifies that
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	is the owner of
	 	 	 	 
	 

	 	 	 	 





CLASS EIGHT PARTNERSHIP PREFERRED UNITS

OF

AIMCO PROPERTIES, L.P.,



transferable on the books of the Partnership in person or by duly authorized attorney on the
surrender of this Certificate properly endorsed. This Certificate and the Class Eight Partnership
Preferred Units represented hereby are issued and shall be held subject to all of the provisions of
the Agreement of Limited Partnership of AIMCO Properties, L.P., as the same may be amended and/or
supplemented from time to time.



IN WITNESS WHEREOF, the undersigned has signed this Certificate.




	 	 	 	 	 	 	 
	Dated:                                        

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 






O-I-1









 






ASSIGNMENT




          For Value Received,                                         , an individual hereby sells, assigns and transfers unto
                                                                                Clas
s Eight Partnership
Preferred Unit(s) represented by the within Certificate, and does hereby irrevocably constitute
and appoint the General Partner of AIMCO Properties, L.P. as its Attorney to transfer said Class
Eight Partnership Preferred Unit(s) on the books of AIMCO Properties, L.P. with full power of
substitution in the premises.




Dated:                                         




	 	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Signature Guaranteed by: 	 	 	 	 
	 

	 	 	 	 	 	 	 	 




NOTICE: THE SIGNATURE OF THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S) AS WRITTEN UPON THE FACE
OF THE CERTIFICATE IN EVERY PARTICULAR WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.



THE SIGNATURE SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION, (Banks, Stockbrokers,
Savings and Loan Associations and Credit Unions), WITH MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM PURSUANT TO SEC RULE 17Ad-15.




O-I-2









 








EXHIBIT P




PARTNERSHIP UNIT DESIGNATION OF

THE CLASS T PARTNERSHIP PREFERRED UNITS OF

AIMCO PROPERTIES, L.P.




     1. Number of Units and Designation.



          A class of Partnership Preferred Units is hereby designated as “Class T Partnership Preferred
Units,” and the number of Partnership Preferred Units constituting such class shall be 6,000,000.




     2. Definitions.



          For purposes of the Class T Partnership Preferred Units, the following terms shall have the
meanings indicated in this Section 2, and capitalized terms used and not otherwise defined herein
shall have the meanings assigned thereto in the Agreement:




          “Agreement” shall mean the Agreement of Limited Partnership of the Partnership, as amended,
supplemented or restated from time to time.




          “Class T Partnership Preferred Unit” means a Partnership Preferred Unit with the designations,
preferences and relative, participating, optional or other special rights, powers and duties as are
set forth in this Exhibit. It is the intention of the General Partner that each Class T
Partnership Preferred Unit shall be substantially the economic equivalent of one share of Class T
Preferred Stock.




          “Class T Preferred Stock” means the Class T Cumulative Preferred Stock, par value $0.01 per
share, of the Previous General Partner.




          “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, or any
successor statute thereto. Reference to any provision of the Code shall mean such provision as in
effect from time to time, as the same may be amended, and any successor thereto, as interpreted by
any applicable regulations or other administrative pronouncements as in effect from time to time.




          “Distribution Payment Date” shall mean any date on which cash dividends are paid on all
outstanding shares of the Class T Preferred Stock.




          “Junior Partnership Units” shall have the meaning set forth in paragraph (c) of Section 7 of
this Exhibit.




          “Parity Partnership Units” shall have the meaning set forth in paragraph (b) of Section 7 of
this Exhibit.




          “Partnership” shall mean AIMCO Properties, L.P., a Delaware limited partnership.




          “Senior Partnership Units” shall have the meaning set forth in paragraph (a) of Section 7 of
this Exhibit.




     3. Distributions.



          On every Distribution Payment Date, the holders of Class T Partnership Preferred Units shall
be entitled to receive distributions payable in cash in an amount per Class T Partnership Preferred
Unit equal to the per share dividend payable on the Class T Preferred Stock on such Distribution
Payment Date. Each such distribution shall be payable to the holders of record of the Class T
Partnership Preferred Units, as they appear on the records of the Partnership at the close of
business on the record date for the dividend payable with respect to the Class T Preferred Stock
on such Distribution Payment Date. Holders of Class T Partnership Preferred Units shall not be





P-1









 







entitled to any distributions on the Class T Partnership Preferred Units, whether payable in
cash, property or stock, except as provided herein.




     4. Liquidation Preference.



          (a) In the event of any liquidation, dissolution or winding up of the Partnership, whether
voluntary or involuntary, before any payment or distribution of the Partnership (whether capital,
surplus or otherwise) shall be made to or set apart for the holders of Junior Partnership Units,
the holders of Class T Partnership Preferred Units shall be entitled to receive Twenty-Five Dollars
($25.00) per Class T Partnership Preferred Unit (the “Liquidation Preference”), plus an amount per
Class T Partnership Preferred Unit equal to all dividends (whether or not declared or earned)
accumulated, accrued and unpaid on one share of Class T Preferred Stock to the date of final
distribution to such holders; but such holders shall not be entitled to any further payment. Until
the holders of the Class T Partnership Preferred Units have been paid the Liquidation Preference in
full, plus an amount equal to all dividends (whether or not declared or earned) accumulated,
accrued and unpaid on the Class T Preferred Stock to the date of final distribution to such
holders, no payment shall be made to any holder of Junior Partnership Units upon the liquidation,
dissolution or winding up of the Partnership. If, upon any liquidation, dissolution or winding up
of the Partnership, the assets of the Partnership, or proceeds thereof, distributable among the
holders of Class T Partnership Preferred Units shall be insufficient to pay in full the
preferential amount aforesaid and liquidating payments on any Parity Partnership Units, then such
assets, or the proceeds thereof, shall be distributed among the holders of Class T Partnership
Preferred Units and any such Parity Partnership Units ratably in the same proportion as the
respective amounts that would be payable on such Class T Partnership Preferred Units and any such
other Parity Partnership Units if all amounts payable thereon were paid in full. For the purposes
of this Section 4, (i) a consolidation or merger of the Partnership with one or more partnerships,
or (ii) a sale or transfer of all or substantially all of the Partnership’s assets shall not be
deemed to be a liquidation, dissolution or winding up, voluntary or involuntary, of the
Partnership.




          (b) Upon any liquidation, dissolution or winding up of the Partnership, after payment shall
have been made in full to the holders of Class T Partnership Preferred Units and any Parity
Partnership Units, as provided in this Section 4, any other series or class or classes of Junior
Partnership Units shall, subject to the respective terms thereof, be entitled to receive any and
all assets remaining to be paid or distributed, and the holders of the Class T Partnership
Preferred Units and any Parity Partnership Units shall not be entitled to share therein.




     5. Redemption.



          Class T Partnership Preferred Units shall be redeemable by the Partnership as follows:




          (a) At any time that the Previous General Partner exercises its right to redeem all or any of
the shares of Class T Preferred Stock, the General Partner shall cause the Partnership to redeem an
equal number of Class T Partnership Preferred Units, at a redemption price per Class T Partnership
Preferred Unit payable in cash and equal to the same price per share paid by the Previous General
Partner to redeem the Class T Preferred Stock. In the event of a redemption of Class T Partnership
Preferred Units, if the redemption date occurs after a dividend record date for the Class T
Preferred Stock and on or prior to the related Distribution Payment Date, the distribution payable
on such Distribution Payment Date in respect of such Class T Partnership Preferred Units called for
redemption shall be payable on such Distribution Payment Date to the holders of record of such
Class T Partnership Preferred Units on the applicable dividend record date, and shall not be
payable as part of the redemption price for such Class T Partnership Preferred Units.




          (b) If the Partnership shall redeem Class T Partnership Preferred Units pursuant to paragraph
(a) of this Section 5, from and after the redemption date (unless the Partnership shall fail to
make available the amount of cash necessary to effect such redemption), (i) except for payment of
the redemption price, the Partnership shall not make any further distributions on the Class T
Partnership Preferred Units so called for redemption, (ii) said units shall no longer be deemed to
be outstanding, and (iii) all rights of the holders thereof as holders of Class T Partnership
Preferred Units of the Partnership shall cease except the rights to receive the cash payable upon
such redemption, without interest thereon; provided, however, that if the redemption date occurs
after dividend record date for the Class T Preferred Stock and on or prior to the related
Distribution Payment Date, the full distribution payable on such Distribution Payment Date in
respect of such Class T Partnership Preferred Units




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called for redemption shall be payable on such Distribution Payment Date to the holders of
record of such Class T Partnership Preferred Units on the applicable dividend record date
notwithstanding the prior redemption of such Class T Partnership Preferred Units. No interest
shall accrue for the benefit of the holders of the Class T Partnership Preferred Units to be
redeemed on any cash set aside by the Partnership.




          (c) If fewer than all the outstanding Class T Partnership Preferred Units are to be redeemed,
units to be redeemed shall be selected by the Partnership from outstanding Class T Partnership
Preferred Units not previously called for redemption by any method determined by the General
Partner in its discretion. Upon any such redemption, the General Partner shall amend Exhibit A to
the Agreement as appropriate to reflect such redemption.




     6. Status of Reacquired Units.



          All Class T Partnership Preferred Units which shall have been issued and reacquired in any
manner by the Partnership shall be deemed cancelled.




     7. Ranking.



          Any class or series of Partnership Units of the Partnership shall be deemed to rank:




          (a) prior or senior to the Class T Partnership Preferred Units, as to the payment of
distributions and as to distributions of assets upon liquidation, dissolution or winding up, if the
holders of such class or series shall be entitled to the receipt of distributions and of amounts
distributable upon liquidation, dissolution or winding up, as the case may be, in preference or
priority to the holders of Class T Partnership Preferred Units (“Senior Partnership Units”);




          (b) on a parity with the Class T Partnership Preferred Units, as to the payment of
distributions and as to distribution of assets upon liquidation, dissolution or winding up, whether
or not the distribution rates, distribution payment dates or redemption or liquidation prices per
unit or other denomination thereof be different from those of the Class T Partnership Preferred
Units if (i) such class or series of Partnership Units shall be Class G Partnership Preferred
Units, Class One Partnership Preferred Units, Class Two Partnership Preferred Units, Class Three
Partnership Preferred Units, Class Four Partnership Preferred Units, Class Six Partnership
Preferred Units or Class Seven Partnership Preferred Units or (ii) the holders of such class or
series of Partnership Units and the Class T Partnership Preferred Units shall be entitled to the
receipt of distributions and of amounts distributable upon liquidation, dissolution or winding up
in proportion to their respective amounts of accrued and unpaid distributions per unit or other
denomination or liquidation preferences, without preference or priority one over the other (the
Partnership Units referred to in clauses (i) and (ii) of this paragraph being hereinafter referred
to, collectively, as “Parity Partnership Units”); and




          (c) junior to the Class T Partnership Preferred Units, as to the payment of distributions and
as to the distribution of assets upon liquidation, dissolution or winding up, if (i) such class or
series of Partnership Units shall be Partnership Common Units, Class I High Performance Partnership
Units, Class Five Partnership Preferred Units or Class Eight Partnership Preferred Units, or (ii)
the holders of Class T Partnership Preferred Units shall be entitled to receipt of distributions or
of amounts distributable upon liquidation, dissolution or winding up, as the case may be, in
preference or priority to the holders of such class or series of Partnership Units (the Partnership
Units referred to in clauses (i) and (ii) of this paragraph being hereinafter referred to,
collectively, as “Junior Partnership Units”).




     8. Special Allocations.



          (a) Gross income and, if necessary, gain shall be allocated to the holders of Class T
Partnership Preferred Units for any Fiscal Year (and, if necessary, subsequent Fiscal Years) to the
extent that the holders of Class T Partnership Preferred Units receive a distribution on any Class
T Partnership Preferred Units (other than an amount included in any redemption pursuant to Section
5 hereof) with respect to such Fiscal Year.




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          (b) If any Class T Partnership Preferred Units are redeemed pursuant to Section 5 hereof, for
the Fiscal Year that includes such redemption (and, if necessary, for subsequent Fiscal Years) (a)
gross income and gain (in such relative proportions as the General Partner in its discretion shall
determine) shall be allocated to the holders of Class T Partnership Preferred Units to the extent
that the redemption amounts paid or payable with respect to the Class T Partnership Preferred Units
so redeemed exceeds the aggregate Capital Contributions (net of liabilities assumed or taken
subject to by the Partnership) per Class T Partnership Preferred Unit allocable to the Class T
Partnership Preferred Units so redeemed and (b) deductions and losses (in such relative proportions
as the General Partner in its discretion shall determine) shall be allocated to the holders of
Class T Partnership Preferred Units to the extent that the aggregate Capital Contributions (net of
liabilities assumed or taken subject to by the Partnership) per Class T Partnership Preferred Unit
allocable to the Class T Partnership Preferred Units so redeemed exceeds the redemption amount paid
or payable with respect to the Class T Partnership Preferred Units so redeemed.




     9. Restrictions on Ownership.



          The Class T Partnership Preferred Units shall be owned and held solely by the General Partner
or the Special Limited Partner.




     10. General.



          (a) The ownership of Class T Partnership Preferred Units may (but need not, in the sole and
absolute discretion of the General Partner) be evidenced by one or more certificates. The General
Partner shall amend Exhibit A to the Agreement from time to time to the extent necessary to reflect
accurately the issuance of, and subsequent conversion, redemption, or any other event having an
effect on the ownership of, Class T Partnership Preferred Units.




          (b) The rights of the General Partner and the Special Limited Partner, in their capacity as
holders of the Class T Partnership Preferred Units, are in addition to and not in limitation of any
other rights or authority of the General Partner or the Special Limited Partner, respectively, in
any other capacity under the Agreement or applicable law. In addition, nothing contained herein
shall be deemed to limit or otherwise restrict the authority of the General Partner or the Special
Limited Partner under the Agreement, other than in their capacity as holders of the Class T
Partnership Preferred Units.




P-4









 








EXHIBIT Q




PARTNERSHIP UNIT DESIGNATION OF

THE CLASS U PARTNERSHIP PREFERRED UNITS OF

AIMCO PROPERTIES, L.P.




     1. Number of Units and Designation.



          A class of Partnership Preferred Units is hereby designated as “Class U Partnership Preferred
Units,” and the number of Partnership Preferred Units constituting such class shall be 8,000,000.




     2. Definitions.



          For purposes of the Class U Partnership Preferred Units, the following terms shall have the
meanings indicated in this Section 2, and capitalized terms used and not otherwise defined herein
shall have the meanings assigned thereto in the Agreement:




          “Agreement” shall mean the Agreement of Limited Partnership of the Partnership, as amended,
supplemented or restated from time to time.




          “Class U Partnership Preferred Unit” means a Partnership Preferred Unit with the designations,
preferences and relative, participating, optional or other special rights, powers and duties as are
set forth in this Exhibit. It is the intention of the General Partner that each Class U
Partnership Preferred Unit shall be substantially the economic equivalent of one share of Class U
Preferred Stock.




          “Class U Preferred Stock” means the Class U Cumulative Preferred Stock, par value $0.01 per
share, of the Previous General Partner.




          “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, or any
successor statute thereto. Reference to any provision of the Code shall mean such provision as in
effect from time to time, as the same may be amended, and any successor thereto, as interpreted by
any applicable regulations or other administrative pronouncements as in effect from time to time.




          “Distribution Payment Date” shall mean any date on which cash dividends are paid on all
outstanding shares of the Class U Preferred Stock.




          “Junior Partnership Units” shall have the meaning set forth in paragraph (c) of Section 7 of
this Exhibit.




          “Parity Partnership Units” shall have the meaning set forth in paragraph (b) of Section 7 of
this Exhibit.




          “Partnership” shall mean AIMCO Properties, L.P., a Delaware limited partnership.




          “Senior Partnership Units” shall have the meaning set forth in paragraph (a) of Section 7 of
this Exhibit.




     3. Distributions.



          On every Distribution Payment Date, the holders of Class U Partnership Preferred Units shall
be entitled to receive distributions payable in cash in an amount per Class U Partnership Preferred
Unit equal to the per share dividend payable on the Class U Preferred Stock on such Distribution
Payment Date. Each such distribution shall be payable to the holders of record of the Class U
Partnership Preferred Units, as they appear on the records of the Partnership at the close of
business on the record date for the dividend payable with respect to the Class U Preferred Stock
on such Distribution Payment Date. Holders of Class U Partnership Preferred Units shall not be




Q-1









 







entitled to any distributions on the Class U Partnership Preferred Units, whether payable in
cash, property or stock, except as provided herein.




     4. Liquidation Preference.



          (a) In the event of any liquidation, dissolution or winding up of the Partnership, whether
voluntary or involuntary, before any payment or distribution of the Partnership (whether capital,
surplus or otherwise) shall be made to or set apart for the holders of Junior Partnership Units,
the holders of Class U Partnership Preferred Units shall be entitled to receive Twenty-Five Dollars
($25.00) per Class U Partnership Preferred Unit (the “Liquidation Preference”), plus an amount per
Class U Partnership Preferred Unit equal to all dividends (whether or not declared or earned)
accumulated, accrued and unpaid on one share of Class U Preferred Stock to the date of final
distribution to such holders; but such holders shall not be entitled to any further payment. Until
the holders of the Class U Partnership Preferred Units have been paid the Liquidation Preference in
full, plus an amount equal to all dividends (whether or not declared or earned) accumulated,
accrued and unpaid on the Class U Preferred Stock to the date of final distribution to such
holders, no payment shall be made to any holder of Junior Partnership Units upon the liquidation,
dissolution or winding up of the Partnership. If, upon any liquidation, dissolution or winding up
of the Partnership, the assets of the Partnership, or proceeds thereof, distributable among the
holders of Class U Partnership Preferred Units shall be insufficient to pay in full the
preferential amount aforesaid and liquidating payments on any Parity Partnership Units, then such
assets, or the proceeds thereof, shall be distributed among the holders of Class U Partnership
Preferred Units and any such Parity Partnership Units ratably in the same proportion as the
respective amounts that would be payable on such Class U Partnership Preferred Units and any such
other Parity Partnership Units if all amounts payable thereon were paid in full. For the purposes
of this Section 4, (i) a consolidation or merger of the Partnership with one or more partnerships,
or (ii) a sale or transfer of all or substantially all of the Partnership’s assets shall not be
deemed to be a liquidation, dissolution or winding up, voluntary or involuntary, of the
Partnership.




          (b) Upon any liquidation, dissolution or winding up of the Partnership, after payment shall
have been made in full to the holders of Class U Partnership Preferred Units and any Parity
Partnership Units, as provided in this Section 4, any other series or class or classes of Junior
Partnership Units shall, subject to the respective terms thereof, be entitled to receive any and
all assets remaining to be paid or distributed, and the holders of the Class U Partnership
Preferred Units and any Parity Partnership Units shall not be entitled to share therein.




     5. Redemption.



          Class U Partnership Preferred Units shall be redeemable by the Partnership as follows:




          (a) At any time that the Previous General Partner exercises its right to redeem all or any of
the shares of Class U Preferred Stock, the General Partner shall cause the Partnership to redeem an
equal number of Class U Partnership Preferred Units, at a redemption price per Class U Partnership
Preferred Unit payable in cash and equal to the same price per share paid by the Previous General
Partner to redeem the Class U Preferred Stock. In the event of a redemption of Class U Partnership
Preferred Units, if the redemption date occurs after a dividend record date for the Class U
Preferred Stock and on or prior to the related Distribution Payment Date, the distribution payable
on such Distribution Payment Date in respect of such Class U Partnership Preferred Units called for
redemption shall be payable on such Distribution Payment Date to the holders of record of such
Class U Partnership Preferred Units on the applicable dividend record date, and shall not be
payable as part of the redemption price for such Class U Partnership Preferred Units.




          (b) If the Partnership shall redeem Class U Partnership Preferred Units pursuant to paragraph
(a) of this Section 5, from and after the redemption date (unless the Partnership shall fail to
make available the amount of cash necessary to effect such redemption), (i) except for payment of
the redemption price, the Partnership shall not make any further distributions on the Class U
Partnership Preferred Units so called for redemption, (ii) said units shall no longer be deemed to
be outstanding, and (iii) all rights of the holders thereof as holders of Class U Partnership
Preferred Units of the Partnership shall cease except the rights to receive the cash payable upon
such redemption, without interest thereon; provided, however, that if the redemption date occurs
after dividend record date for the Class U Preferred Stock and on or prior to the related
Distribution Payment Date, the full distribution payable on such Distribution Payment Date in
respect of such Class U Partnership Preferred Units




Q-2









 







called for redemption shall be payable on such Distribution Payment Date to the holders of
record of such Class U Partnership Preferred Units on the applicable dividend record date
notwithstanding the prior redemption of such Class U Partnership Preferred Units. No interest
shall accrue for the benefit of the holders of the Class U Partnership Preferred Units to be
redeemed on any cash set aside by the Partnership.




          (c) If fewer than all the outstanding Class U Partnership Preferred Units are to be redeemed,
units to be redeemed shall be selected by the Partnership from outstanding Class U Partnership
Preferred Units not previously called for redemption by any method determined by the General
Partner in its discretion. Upon any such redemption, the General Partner shall amend Exhibit A to
the Agreement as appropriate to reflect such redemption.




     6. Status of Reacquired Units.



          All Class U Partnership Preferred Units which shall have been issued and reacquired in any
manner by the Partnership shall be deemed cancelled.




     7. Ranking.



          Any class or series of Partnership Units of the Partnership shall be deemed to rank:




          (a) prior or senior to the Class U Partnership Preferred Units, as to the payment of
distributions and as to distributions of assets upon liquidation, dissolution or winding up, if the
holders of such class or series shall be entitled to the receipt of distributions and of amounts
distributable upon liquidation, dissolution or winding up, as the case may be, in preference or
priority to the holders of Class U Partnership Preferred Units (“Senior Partnership Units”);




          (b) on a parity with the Class U Partnership Preferred Units, as to the payment of
distributions and as to distribution of assets upon liquidation, dissolution or winding up, whether
or not the distribution rates, distribution payment dates or redemption or liquidation prices per
unit or other denomination thereof be different from those of the Class U Partnership Preferred
Units if (i) such class or series of Partnership Units shall be Class G Partnership Preferred
Units, Class T Partnership Preferred Units, Class One Partnership Preferred Units, Class Two
Partnership Preferred Units, Class Three Partnership Preferred Units, Class Four Partnership
Preferred Units, Class Six Partnership Preferred Units or Class Seven Partnership Preferred Units,
or (ii) the holders of such class or series of Partnership Units and the Class U Partnership
Preferred Units shall be entitled to the receipt of distributions and of amounts distributable upon
liquidation, dissolution or winding up in proportion to their respective amounts of accrued and
unpaid distributions per unit or other denomination or liquidation preferences, without preference
or priority one over the other (the Partnership Units referred to in clauses (i) and (ii) of this
paragraph being hereinafter referred to, collectively, as “Parity Partnership Units”); and




          (c) junior to the Class U Partnership Preferred Units, as to the payment of distributions and
as to the distribution of assets upon liquidation, dissolution or winding up, if (i) such class or
series of Partnership Units shall be Partnership Common Units, Class I High Performance Partnership
Units, Class Five Partnership Preferred Units or Class Eight Partnership Preferred Units, or (ii)
the holders of Class U Partnership Preferred Units shall be entitled to receipt of distributions or
of amounts distributable upon liquidation, dissolution or winding up, as the case may be, in
preference or priority to the holders of such class or series of Partnership Units (the Partnership
Units referred to in clauses (i) and (ii) of this paragraph being hereinafter referred to,
collectively, as “Junior Partnership Units”).




     8. Special Allocations.



          (a) Gross income and, if necessary, gain shall be allocated to the holders of Class U
Partnership Preferred Units for any Fiscal Year (and, if necessary, subsequent Fiscal Years) to the
extent that the holders of Class U Partnership Preferred Units receive a distribution on any Class
U Partnership Preferred Units (other than an amount included in any redemption pursuant to Section
5 hereof) with respect to such Fiscal Year.




Q-3









 








          (b) If any Class U Partnership Preferred Units are redeemed pursuant to Section 5 hereof, for
the Fiscal Year that includes such redemption (and, if necessary, for subsequent Fiscal Years) (a)
gross income and gain (in such relative proportions as the General Partner in its discretion shall
determine) shall be allocated to the holders of Class U Partnership Preferred Units to the extent
that the redemption amounts paid or payable with respect to the Class U Partnership Preferred Units
so redeemed exceeds the aggregate Capital Contributions (net of liabilities assumed or taken
subject to by the Partnership) per Class U Partnership Preferred Unit allocable to the Class U
Partnership Preferred Units so redeemed and (b) deductions and losses (in such relative proportions
as the General Partner in its discretion shall determine) shall be allocated to the holders of
Class U Partnership Preferred Units to the extent that the aggregate Capital Contributions (net of
liabilities assumed or taken subject to by the Partnership) per Class U Partnership Preferred Unit
allocable to the Class U Partnership Preferred Units so redeemed exceeds the redemption amount paid
or payable with respect to the Class U Partnership Preferred Units so redeemed.




     9. Restrictions on Ownership.



          The Class U Partnership Preferred Units shall be owned and held solely by the General Partner
or the Special Limited Partner.




     10. General.



          (a) The ownership of Class U Partnership Preferred Units may (but need not, in the sole and
absolute discretion of the General Partner) be evidenced by one or more certificates. The General
Partner shall amend Exhibit A to the Agreement from time to time to the extent necessary to reflect
accurately the issuance of, and subsequent conversion, redemption, or any other event having an
effect on the ownership of, Class U Partnership Preferred Units.




          (b) The rights of the General Partner and the Special Limited Partner, in their capacity as
holders of the Class U Partnership Preferred Units, are in addition to and not in limitation of any
other rights or authority of the General Partner or the Special Limited Partner, respectively, in
any other capacity under the Agreement or applicable law. In addition, nothing contained herein
shall be deemed to limit or otherwise restrict the authority of the General Partner or the Special
Limited Partner under the Agreement, other than in their capacity as holders of the Class U
Partnership Preferred Units.




Q-4









 








EXHIBIT R




PARTNERSHIP UNIT DESIGNATION OF

THE CLASS V PARTNERSHIP PREFERRED UNITS OF

AIMCO PROPERTIES, L.P.




     1. Number of Units and Designation.



          A class of Partnership Preferred Units is hereby designated as “Class V Partnership Preferred
Units,” and the number of Partnership Preferred Units constituting such class shall be 3,450,000.




     2. Definitions.



          For purposes of the Class V Partnership Preferred Units, the following terms shall have the
meanings indicated in this Section 2, and capitalized terms used and not otherwise defined herein
shall have the meanings assigned thereto in the Agreement:




          “Agreement” shall mean the Agreement of Limited Partnership of the Partnership, as amended,
supplemented or restated from time to time.




          “Class V Partnership Preferred Unit” means a Partnership Preferred Unit with the designations,
preferences and relative, participating, optional or other special rights, powers and duties as are
set forth in this Exhibit. It is the intention of the General Partner that each Class V
Partnership Preferred Unit shall be substantially the economic equivalent of one share of Class V
Preferred Stock.




          “Class V Preferred Stock” means the Class V Cumulative Preferred Stock, par value $0.01 per
share, of the Previous General Partner.




          “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, or any
successor statute thereto. Reference to any provision of the Code shall mean such provision as in
effect from time to time, as the same may be amended, and any successor thereto, as interpreted by
any applicable regulations or other administrative pronouncements as in effect from time to time.




          “Distribution Payment Date” shall mean any date on which cash dividends are paid on all
outstanding shares of the Class V Preferred Stock.




          “Junior Partnership Units” shall have the meaning set forth in paragraph (c) of Section 7 of
this Exhibit.




          “Parity Partnership Units” shall have the meaning set forth in paragraph (b) of Section 7 of
this Exhibit.




          “Partnership” shall mean AIMCO Properties, L.P., a Delaware limited partnership.




          “Senior Partnership Units” shall have the meaning set forth in paragraph (a) of Section 7 of
this Exhibit.




     3. Distributions.



          On every Distribution Payment Date, the holders of Class V Partnership Preferred Units shall
be entitled to receive distributions payable in cash in an amount per Class V Partnership Preferred
Unit equal to the per share dividend payable on the Class V Preferred Stock on such Distribution
Payment Date. Each such distribution shall be payable to the holders of record of the Class V
Partnership Preferred Units, as they appear on the records of the Partnership at the close of
business on the record date for the dividend payable with respect to the Class V Preferred Stock
on such Distribution Payment Date. Holders of Class V Partnership Preferred Units shall not be




R-1









 







entitled to any distributions on the Class V Partnership Preferred Units, whether payable in
cash, property or stock, except as provided herein.




     4. Liquidation Preference.



          (a) In the event of any liquidation, dissolution or winding up of the Partnership, whether
voluntary or involuntary, before any payment or distribution of the Partnership (whether capital,
surplus or otherwise) shall be made to or set apart for the holders of Junior Partnership Units,
the holders of Class V Partnership Preferred Units shall be entitled to receive Twenty-Five Dollars
($25.00) per Class V Partnership Preferred Unit (the “Liquidation Preference”), plus an amount per
Class V Partnership Preferred Unit equal to all dividends (whether or not declared or earned)
accumulated, accrued and unpaid on one share of Class V Preferred Stock to the date of final
distribution to such holders; but such holders shall not be entitled to any further payment. Until
the holders of the Class V Partnership Preferred Units have been paid the Liquidation Preference in
full, plus an amount equal to all dividends (whether or not declared or earned) accumulated,
accrued and unpaid on the Class V Preferred Stock to the date of final distribution to such
holders, no payment shall be made to any holder of Junior Partnership Units upon the liquidation,
dissolution or winding up of the Partnership. If, upon any liquidation, dissolution or winding up
of the Partnership, the assets of the Partnership, or proceeds thereof, distributable among the
holders of Class V Partnership Preferred Units shall be insufficient to pay in full the
preferential amount aforesaid and liquidating payments on any Parity Partnership Units, then such
assets, or the proceeds thereof, shall be distributed among the holders of Class V Partnership
Preferred Units and any such Parity Partnership Units ratably in the same proportion as the
respective amounts that would be payable on such Class V Partnership Preferred Units and any such
other Parity Partnership Units if all amounts payable thereon were paid in full. For the purposes
of this Section 4, (i) a consolidation or merger of the Partnership with one or more partnerships,
or (ii) a sale or transfer of all or substantially all of the Partnership’s assets shall not be
deemed to be a liquidation, dissolution or winding up, voluntary or involuntary, of the
Partnership.




          (b) Upon any liquidation, dissolution or winding up of the Partnership, after payment shall
have been made in full to the holders of Class V Partnership Preferred Units and any Parity
Partnership Units, as provided in this Section 4, any other series or class or classes of Junior
Partnership Units shall, subject to the respective terms thereof, be entitled to receive any and
all assets remaining to be paid or distributed, and the holders of the Class V Partnership
Preferred Units and any Parity Partnership Units shall not be entitled to share therein.




     5. Redemption.



          Class V Partnership Preferred Units shall be redeemable by the Partnership as follows:




          (a) At any time that the Previous General Partner exercises its right to redeem all or any of
the shares of Class V Preferred Stock, the General Partner shall cause the Partnership to redeem an
equal number of Class V Partnership Preferred Units, at a redemption price per Class V Partnership
Preferred Unit payable in cash and equal to the same price per share paid by the Previous General
Partner to redeem the Class V Preferred Stock. In the event of a redemption of Class V Partnership
Preferred Units, if the redemption date occurs after a dividend record date for the Class V
Preferred Stock and on or prior to the related Distribution Payment Date, the distribution payable
on such Distribution Payment Date in respect of such Class V Partnership Preferred Units called for
redemption shall be payable on such Distribution Payment Date to the holders of record of such
Class V Partnership Preferred Units on the applicable dividend record date, and shall not be
payable as part of the redemption price for such Class V Partnership Preferred Units.




          (b) If the Partnership shall redeem Class V Partnership Preferred Units pursuant to paragraph
(a) of this Section 5, from and after the redemption date (unless the Partnership shall fail to
make available the amount of cash necessary to effect such redemption), (i) except for payment of
the redemption price, the Partnership shall not make any further distributions on the Class V
Partnership Preferred Units so called for redemption, (ii) said units shall no longer be deemed to
be outstanding, and (iii) all rights of the holders thereof as holders of Class V Partnership
Preferred Units of the Partnership shall cease except the rights to receive the cash payable upon
such redemption, without interest thereon; provided, however, that if the redemption date occurs
after dividend record date for the Class V Preferred Stock and on or prior to the related
Distribution Payment Date, the full distribution payable on such Distribution Payment Date in
respect of such Class V Partnership Preferred Units





R-2









 







called for redemption shall be payable on such Distribution Payment Date to the holders of
record of such Class V Partnership Preferred Units on the applicable dividend record date
notwithstanding the prior redemption of such Class V Partnership Preferred Units. No interest
shall accrue for the benefit of the holders of the Class V Partnership Preferred Units to be
redeemed on any cash set aside by the Partnership.




          (c) If fewer than all the outstanding Class V Partnership Preferred Units are to be redeemed,
units to be redeemed shall be selected by the Partnership from outstanding Class V Partnership
Preferred Units not previously called for redemption by any method determined by the General
Partner in its discretion. Upon any such redemption, the General Partner shall amend Exhibit A to
the Agreement as appropriate to reflect such redemption.




     6. Status of Reacquired Units.



          All Class V Partnership Preferred Units which shall have been issued and reacquired in any
manner by the Partnership shall be deemed cancelled.




     7. Ranking.



          Any class or series of Partnership Units of the Partnership shall be deemed to rank:




          (a) prior or senior to the Class V Partnership Preferred Units, as to the payment of
distributions and as to distributions of assets upon liquidation, dissolution or winding up, if the
holders of such class or series shall be entitled to the receipt of distributions and of amounts
distributable upon liquidation, dissolution or winding up, as the case may be, in preference or
priority to the holders of Class V Partnership Preferred Units (“Senior Partnership Units”);




          (b) on a parity with the Class V Partnership Preferred Units, as to the payment of
distributions and as to distribution of assets upon liquidation, dissolution or winding up, whether
or not the distribution rates, distribution payment dates or redemption or liquidation prices per
unit or other denomination thereof be different from those of the Class V Partnership Preferred
Units if (i) such class or series of Partnership Units shall be Class G Partnership Preferred
Units, Class T Partnership Preferred Units, Class U Partnership Preferred Units, Class One
Partnership Preferred Units, Class Two Partnership Preferred Units, Class Three Partnership
Preferred Units, Class Four Partnership Preferred Units, Class Six Partnership Preferred Units or
Class Seven Partnership Preferred Units, or (ii) the holders of such class or series of Partnership
Units and the Class V Partnership Preferred Units shall be entitled to the receipt of distributions
and of amounts distributable upon liquidation, dissolution or winding up in proportion to their
respective amounts of accrued and unpaid distributions per unit or other denomination or
liquidation preferences, without preference or priority one over the other (the Partnership Units
referred to in clauses (i) and (ii) of this paragraph being hereinafter referred to, collectively,
as “Parity Partnership Units”); and




          (c) junior to the Class V Partnership Preferred Units, as to the payment of distributions and
as to the distribution of assets upon liquidation, dissolution or winding up, if (i) such class or
series of Partnership Units shall be Partnership Common Units, Class I High Performance Partnership
Units, Class VII High Performance Partnership Units, Class Five Partnership Preferred Units or
Class Eight Partnership Preferred Units, or (ii) the holders of Class V Partnership Preferred Units
shall be entitled to receipt of distributions or of amounts distributable upon liquidation,
dissolution or winding up, as the case may be, in preference or priority to the holders of such
class or series of Partnership Units (the Partnership Units referred to in clauses (i) and (ii) of
this paragraph being hereinafter referred to, collectively, as “Junior Partnership Units”).




     8. Special Allocations.



          (a) Gross income and, if necessary, gain shall be allocated to the holders of Class V
Partnership Preferred Units for any Fiscal Year (and, if necessary, subsequent Fiscal Years) to the
extent that the holders of Class V Partnership Preferred Units receive a distribution on any Class
V Partnership Preferred Units (other than an amount included in any redemption pursuant to Section
5 hereof) with respect to such Fiscal Year.




R-3









 








          (b) If any Class V Partnership Preferred Units are redeemed pursuant to Section 5 hereof, for
the Fiscal Year that includes such redemption (and, if necessary, for subsequent Fiscal Years) (a)
gross income and gain (in such relative proportions as the General Partner in its discretion shall
determine) shall be allocated to the holders of Class V Partnership Preferred Units to the extent
that the redemption amounts paid or payable with respect to the Class V Partnership Preferred Units
so redeemed exceeds the aggregate Capital Contributions (net of liabilities assumed or taken
subject to by the Partnership) per Class V Partnership Preferred Unit allocable to the Class V
Partnership Preferred Units so redeemed and (b) deductions and losses (in such relative proportions
as the General Partner in its discretion shall determine) shall be allocated to the holders of
Class V Partnership Preferred Units to the extent that the aggregate Capital Contributions (net of
liabilities assumed or taken subject to by the Partnership) per Class V Partnership Preferred Unit
allocable to the Class V Partnership Preferred Units so redeemed exceeds the redemption amount paid
or payable with respect to the Class V Partnership Preferred Units so redeemed.




     9. Restrictions on Ownership.



          The Class V Partnership Preferred Units shall be owned and held solely by the General Partner
or the Special Limited Partner.




     10. General.



          (a) The ownership of Class V Partnership Preferred Units may (but need not, in the sole and
absolute discretion of the General Partner) be evidenced by one or more certificates. The General
Partner shall amend Exhibit A to the Agreement from time to time to the extent necessary to reflect
accurately the issuance of, and subsequent conversion, redemption, or any other event having an
effect on the ownership of, Class V Partnership Preferred Units.




          (b) The rights of the General Partner and the Special Limited Partner, in their capacity as
holders of the Class V Partnership Preferred Units, are in addition to and not in limitation of any
other rights or authority of the General Partner or the Special Limited Partner, respectively, in
any other capacity under the Agreement or applicable law. In addition, nothing contained herein
shall be deemed to limit or otherwise restrict the authority of the General Partner or the Special
Limited Partner under the Agreement, other than in their capacity as holders of the Class V
Partnership Preferred Units.




R-4









 





EXHIBIT S




PARTNERSHIP UNIT DESIGNATION OF

THE CLASS W PARTNERSHIP PREFERRED UNITS OF

AIMCO PROPERTIES, L.P.




     1. Number of Units and Designation.



          A class of Partnership Preferred Units is hereby designated as “Class W Partnership Preferred
Units,” and the number of Partnership Preferred Units constituting such class shall be 1,904,762.




     2. Definitions.



          For purposes of the Class W Partnership Preferred Units, the following terms shall have the
meanings indicated in this Section 2, and capitalized terms used and not otherwise defined herein
shall have the meanings assigned thereto in the Agreement:




          “Agreement” shall mean the Agreement of Limited Partnership of the Partnership, as amended,
supplemented or restated from time to time.




          “Class W Partnership Preferred Unit” means a Partnership Preferred Unit with the designations,
preferences and relative, participating, optional or other special rights, powers and duties as are
set forth in this Exhibit. It is the intention of the General Partner that each Class W
Partnership Preferred Unit shall be substantially the economic equivalent of one share of Class W
Preferred Stock.




          “Class W Preferred Stock” means the Class W Cumulative Preferred Stock, par value $0.01 per
share, of the Previous General Partner.




          “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, or any
successor statute thereto. Reference to any provision of the Code shall mean such provision as in
effect from time to time, as the same may be amended, and any successor thereto, as interpreted by
any applicable regulations or other administrative pronouncements as in effect from time to time.




          “Distribution Payment Date” shall mean any date on which cash dividends are paid on all
outstanding shares of the Class W Preferred Stock.




          “Junior Partnership Units” shall have the meaning set forth in paragraph (c) of Section 7 of
this Exhibit.




          “Parity Partnership Units” shall have the meaning set forth in paragraph (b) of Section 7 of
this Exhibit.




          “Partnership” shall mean AIMCO Properties, L.P., a Delaware limited partnership.




          “Senior Partnership Units” shall have the meaning set forth in paragraph (a) of Section 7 of
this Exhibit.




     3. Distributions.



          On every Distribution Payment Date, the holders of Class W Partnership Preferred Units shall
be entitled to receive distributions payable in cash in an amount per Class W Partnership Preferred
Unit equal to the per share dividend payable on the Class W Preferred Stock on such Distribution
Payment Date. Each such distribution shall be payable to the holders of record of the Class W
Partnership Preferred Units, as they appear on the records of the Partnership at the close of
business on the record date for the dividend payable with respect to the Class W Preferred Stock
on such Distribution Payment Date. Holders of Class W Partnership Preferred Units shall not be





S-1









 







entitled to any distributions on the Class W Partnership Preferred Units, whether payable in
cash, property or stock, except as provided herein.




     4. Liquidation Preference.



          (a) In the event of any liquidation, dissolution or winding up of the Partnership, whether
voluntary or involuntary, before any payment or distribution of the Partnership (whether capital,
surplus or otherwise) shall be made to or set apart for the holders of Junior Partnership Units,
the holders of Class W Partnership Preferred Units shall be entitled to receive Fifty-Two Dollars
and Fifty Cents ($52.50) per Class W Partnership Preferred Unit (the “Liquidation Preference”),
plus an amount per Class W Partnership Preferred Unit equal to all dividends (whether or not
declared or earned) accumulated, accrued and unpaid on one share of Class W Preferred Stock to the
date of final distribution to such holders; but such holders shall not be entitled to any further
payment. Until the holders of the Class W Partnership Preferred Units have been paid the
Liquidation Preference in full, plus an amount equal to all dividends (whether or not declared or
earned) accumulated, accrued and unpaid on the Class W Preferred Stock to the date of final
distribution to such holders, no payment shall be made to any holder of Junior Partnership Units
upon the liquidation, dissolution or winding up of the Partnership. If, upon any liquidation,
dissolution or winding up of the Partnership, the assets of the Partnership, or proceeds thereof,
distributable among the holders of Class W Partnership Preferred Units shall be insufficient to pay
in full the preferential amount aforesaid and liquidating payments on any Parity Partnership Units,
then such assets, or the proceeds thereof, shall be distributed among the holders of Class W
Partnership Preferred Units and any such Parity Partnership Units ratably in the same proportion as
the respective amounts that would be payable on such Class W Partnership Preferred Units and any
such other Parity Partnership Units if all amounts payable thereon were paid in full. For the
purposes of this Section 4, (i) a consolidation or merger of the Partnership with one or more
partnerships, or (ii) a sale or transfer of all or substantially all of the Partnership’s assets
shall not be deemed to be a liquidation, dissolution or winding up, voluntary or involuntary, of
the Partnership.




          (b) Upon any liquidation, dissolution or winding up of the Partnership, after payment shall
have been made in full to the holders of Class W Partnership Preferred Units and any Parity
Partnership Units, as provided in this Section 4, any other series or class or classes of Junior
Partnership Units shall, subject to the respective terms thereof, be entitled to receive any and
all assets remaining to be paid or distributed, and the holders of the Class W Partnership
Preferred Units and any Parity Partnership Units shall not be entitled to share therein.




     5. Redemption.



          Class W Partnership Preferred Units shall be redeemable by the Partnership as follows:




          (a) At any time that the Previous General Partner exercises its right to redeem all or any of
the shares of Class W Preferred Stock, the General Partner shall cause the Partnership to redeem an
equal number of Class W Partnership Preferred Units, at a redemption price per Class W Partnership
Preferred Unit payable in cash and equal to the same price per share paid by the Previous General
Partner to redeem the Class W Preferred Stock. In the event of a redemption of Class W Partnership
Preferred Units, if the redemption date occurs after a dividend record date for the Class W
Preferred Stock and on or prior to the related Distribution Payment Date, the distribution payable
on such Distribution Payment Date in respect of such Class W Partnership Preferred Units called for
redemption shall be payable on such Distribution Payment Date to the holders of record of such
Class W Partnership Preferred Units on the applicable dividend record date, and shall not be
payable as part of the redemption price for such Class W Partnership Preferred Units.




          (b) If the Partnership shall redeem Class W Partnership Preferred Units pursuant to paragraph
(a) of this Section 5, from and after the redemption date (unless the Partnership shall fail to
make available the amount of cash necessary to effect such redemption), (i) except for payment of
the redemption price, the Partnership shall not make any further distributions on the Class W
Partnership Preferred Units so called for redemption, (ii) said units shall no longer be deemed to
be outstanding, and (iii) all rights of the holders thereof as holders of Class W Partnership
Preferred Units of the Partnership shall cease except the rights to receive the cash payable upon
such redemption, without interest thereon; provided, however, that if the redemption date occurs
after dividend record date for the Class W Preferred Stock and on or prior to the related
Distribution Payment Date, the full distribution payable on such Distribution Payment Date in
respect of such Class W Partnership Preferred Units





S-2









 







called for redemption shall be payable on such Distribution Payment Date to the holders of
record of such Class W Partnership Preferred Units on the applicable dividend record date
notwithstanding the prior redemption of such Class W Partnership Preferred Units. No interest
shall accrue for the benefit of the holders of the Class W Partnership Preferred Units to be
redeemed on any cash set aside by the Partnership.




          (c) If fewer than all the outstanding Class W Partnership Preferred Units are to be redeemed,
units to be redeemed shall be selected by the Partnership from outstanding Class W Partnership
Preferred Units not previously called for redemption by any method determined by the General
Partner in its discretion. Upon any such redemption, the General Partner shall amend Exhibit A to
the Agreement as appropriate to reflect such redemption.




     6. Status of Reacquired Units.



          All Class W Partnership Preferred Units which shall have been issued and reacquired in any
manner by the Partnership shall be deemed cancelled.




     7. Conversion.



          Class W Partnership Preferred Units shall be convertible as follows:




          (a) Upon any conversion of shares of Class W Preferred Stock into shares of Common Stock, the
General Partner shall cause a number of Class W Partnership Preferred Units equal to the number of
such converted shares of Class W Preferred Stock to be converted by the holders thereof into
Partnership Common Units. The conversion ratio in effect from time to time for the conversion of
Class W Partnership Preferred Units into Partnership Common Units pursuant to this Section 7 shall
at all times be equal to, and shall be automatically adjusted as necessary to reflect, the
conversion ratio in effect from time to time for the conversion of Class W Preferred Stock into
Common Stock.




          (b) In the event of a conversion of any Class W Partnership Preferred Units, the Partnership
shall make a cash payment to the holder thereof equal to the cash payment required to be made by
the Previous General Partner to the holder of the shares of Class W Preferred Stock the conversion
of which required the conversion of such Class W Partnership Preferred Units. Holders of Class W
Partnership Preferred Units at the close of business on a distribution payment record date shall be
entitled to receive the distribution payable on such units on the corresponding Distribution
Payment Date notwithstanding the conversion thereof following such distribution payment record date
and prior to such Distribution Payment Date. Except as provided above, the Partnership shall make
no payment or allowance for unpaid distributions on converted units or for distributions on the
Partnership Common Units issued upon such conversion. Each conversion of Class W Partnership
Preferred Units into Partnership Common Units shall be deemed to have been effected at the same
time and date that the corresponding conversion of Class W Preferred Stock into Common Stock is
deemed to have been effected.




          (c) No fractional Partnership Common Units shall be issued upon conversion of Class W
Partnership Preferred Units. Instead of any fractional Partnership Common Units that would
otherwise be deliverable upon the conversion of Class W Partnership Preferred Units, the
Partnership shall pay to the holder of such converted units an amount in cash equal to the cash
payable to a holder of an equivalent number of converted shares of Class W Preferred Stock in lieu
of fractional shares of Common Stock.




          (d) The Partnership will pay any and all documentary stamp or similar issue or transfer taxes
payable in respect of (i) the issue or delivery of Partnership Common Units or other securities or
property on conversion or redemption of Class W Partnership Preferred Units pursuant hereto, and
(ii) the issue or delivery of Common Stock or other securities or property on conversion or
redemption of Class W Preferred Stock pursuant to the terms hereof.




     8. Ranking.



          Any class or series of Partnership Units of the Partnership shall be deemed to rank:




S-3









 








          (a) prior or senior to the Class W Partnership Preferred Units, as to the payment of
distributions and as to distributions of assets upon liquidation, dissolution or winding up, if the
holders of such class or series shall be entitled to the receipt of distributions and of amounts
distributable upon liquidation, dissolution or winding up, as the case may be, in preference or
priority to the holders of Class W Partnership Preferred Units (“Senior Partnership Units”);




          (b) on a parity with the Class W Partnership Preferred Units, as to the payment of
distributions and as to distribution of assets upon liquidation, dissolution or winding up, whether
or not the distribution rates, distribution payment dates or redemption or liquidation prices per
unit or other denomination thereof be different from those of the Class W Partnership Preferred
Units if (i) such class or series of Partnership Units shall be Class G Partnership Preferred
Units, Class T Partnership Preferred Units, Class U Partnership Preferred Units, Class V
Partnership Preferred Units, Class One Partnership Preferred Units, Class Two Partnership Preferred
Units, Class Three Partnership Preferred Units, Class Four Partnership Preferred Units, Class Six
Partnership Preferred Units or Class Seven Partnership Preferred Units, or (ii) the holders of such
class or series of Partnership Units and the Class W Partnership Preferred Units shall be entitled
to the receipt of distributions and of amounts distributable upon liquidation, dissolution or
winding up in proportion to their respective amounts of accrued and unpaid distributions per unit
or other denomination or liquidation preferences, without preference or priority one over the other
(the Partnership Units referred to in clauses (i) and (ii) of this paragraph being hereinafter
referred to, collectively, as “Parity Partnership Units”); and




          (c) junior to the Class W Partnership Preferred Units, as to the payment of distributions and
as to the distribution of assets upon liquidation, dissolution or winding up, if (i) such class or
series of Partnership Units shall be Partnership Common Units, Class I High Performance Partnership
Units, Class VII High Performance Partnership Units, Class Five Partnership Preferred Units or
Class Eight Partnership Preferred Units, or (ii) the holders of Class W Partnership Preferred Units
shall be entitled to receipt of distributions or of amounts distributable upon liquidation,
dissolution or winding up, as the case may be, in preference or priority to the holders of such
class or series of Partnership Units (the Partnership Units referred to in clauses (i) and (ii) of
this paragraph being hereinafter referred to, collectively, as “Junior Partnership Units”).




     9. Special Allocations.



          (a) Gross income and, if necessary, gain shall be allocated to the holders of Class W
Partnership Preferred Units for any Fiscal Year (and, if necessary, subsequent Fiscal Years) to the
extent that the holders of Class W Partnership Preferred Units receive a distribution on any Class
W Partnership Preferred Units (other than an amount included in any redemption pursuant to Section
5 hereof) with respect to such Fiscal Year.




          (b) If any Class W Partnership Preferred Units are redeemed pursuant to Section 5 hereof, for
the Fiscal Year that includes such redemption (and, if necessary, for subsequent Fiscal Years) (a)
gross income and gain (in such relative proportions as the General Partner in its discretion shall
determine) shall be allocated to the holders of Class W Partnership Preferred Units to the extent
that the redemption amounts paid or payable with respect to the Class W Partnership Preferred Units
so redeemed exceeds the aggregate Capital Contributions (net of liabilities assumed or taken
subject to by the Partnership) per Class W Partnership Preferred Unit allocable to the Class W
Partnership Preferred Units so redeemed and (b) deductions and losses (in such relative proportions
as the General Partner in its discretion shall determine) shall be allocated to the holders of
Class W Partnership Preferred Units to the extent that the aggregate Capital Contributions (net of
liabilities assumed or taken subject to by the Partnership) per Class W Partnership Preferred Unit
allocable to the Class W Partnership Preferred Units so redeemed exceeds the redemption amount paid
or payable with respect to the Class W Partnership Preferred Units so redeemed.




     10. Restrictions on Ownership.



          The Class W Partnership Preferred Units shall be owned and held solely by the General Partner
or the Special Limited Partner.




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     11. General.



          (a) The ownership of Class W Partnership Preferred Units may (but need not, in the sole and
absolute discretion of the General Partner) be evidenced by one or more certificates. The General
Partner shall amend Exhibit A to the Agreement from time to time to the extent necessary to reflect
accurately the issuance of, and subsequent conversion, redemption, or any other event having an
effect on the ownership of, Class W Partnership Preferred Units.




          (b) The rights of the General Partner and the Special Limited Partner, in their capacity as
holders of the Class W Partnership Preferred Units, are in addition to and not in limitation of any
other rights or authority of the General Partner or the Special Limited Partner, respectively, in
any other capacity under the Agreement or applicable law. In addition, nothing contained herein
shall be deemed to limit or otherwise restrict the authority of the General Partner or the Special
Limited Partner under the Agreement, other than in their capacity as holders of the Class W
Partnership Preferred Units.




S-5









 





EXHIBIT T




PARTNERSHIP UNIT DESIGNATION OF

THE CLASS Y PARTNERSHIP PREFERRED UNITS OF

AIMCO PROPERTIES, L.P.




     1. Number of Units and Designation.



          A class of Partnership Preferred Units is hereby designated as “Class Y Partnership Preferred
Units,” and the number of Partnership Preferred Units constituting such class shall be 3,450,000.




     2. Definitions.



          For purposes of the Class Y Partnership Preferred Units, the following terms shall have the
meanings indicated in this Section 2, and capitalized terms used and not otherwise defined herein
shall have the meanings assigned thereto in the Agreement:




          “Agreement” shall mean the Agreement of Limited Partnership of the Partnership, as amended,
supplemented or restated from time to time.




          “Class Y Partnership Preferred Unit” means a Partnership Preferred Unit with the designations,
preferences and relative, participating, optional or other special rights, powers and duties as are
set forth in this Exhibit. It is the intention of the General Partner that each Class Y
Partnership Preferred Unit shall be substantially the economic equivalent of one share of Class Y
Preferred Stock.




          “Class Y Preferred Stock” means the Class Y Cumulative Preferred Stock, par value $0.01 per
share, of the Previous General Partner.




          “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, or any
successor statute thereto. Reference to any provision of the Code shall mean such provision as in
effect from time to time, as the same may be amended, and any successor thereto, as interpreted by
any applicable regulations or other administrative pronouncements as in effect from time to time.




          “Distribution Payment Date” shall mean any date on which cash dividends are paid on all
outstanding shares of the Class Y Preferred Stock.




          “Junior Partnership Units” shall have the meaning set forth in paragraph (c) of Section 7 of
this Exhibit.




          “Parity Partnership Units” shall have the meaning set forth in paragraph (b) of Section 7 of
this Exhibit.




          “Partnership” shall mean AIMCO Properties, L.P., a Delaware limited partnership.




          “Senior Partnership Units” shall have the meaning set forth in paragraph (a) of Section 7 of
this Exhibit.




     3. Distributions.



          On every Distribution Payment Date, the holders of Class Y Partnership Preferred Units shall
be entitled to receive distributions payable in cash in an amount per Class Y Partnership Preferred
Unit equal to the per share dividend payable on the Class Y Preferred Stock on such Distribution
Payment Date. Each such distribution shall be payable to the holders of record of the Class Y
Partnership Preferred Units, as they appear on the records of the Partnership at the close of
business on the record date for the dividend payable with respect to the Class Y Preferred Stock
on such Distribution Payment Date. Holders of Class Y Partnership Preferred Units shall not be





T-1









 







entitled to any distributions on the Class Y Partnership Preferred Units, whether payable in
cash, property or stock, except as provided herein.




     4. Liquidation Preference.



          (a) In the event of any liquidation, dissolution or winding up of the Partnership, whether
voluntary or involuntary, before any payment or distribution of the Partnership (whether capital,
surplus or otherwise) shall be made to or set apart for the holders of Junior Partnership Units,
the holders of Class Y Partnership Preferred Units shall be entitled to receive Twenty-Five Dollars
($25.00) per Class Y Partnership Preferred Unit (the “Liquidation Preference”), plus an amount per
Class Y Partnership Preferred Unit equal to all dividends (whether or not declared or earned)
accumulated, accrued and unpaid on one share of Class Y Preferred Stock to the date of final
distribution to such holders; but such holders shall not be entitled to any further payment. Until
the holders of the Class Y Partnership Preferred Units have been paid the Liquidation Preference in
full, plus an amount equal to all dividends (whether or not declared or earned) accumulated,
accrued and unpaid on the Class Y Preferred Stock to the date of final distribution to such
holders, no payment shall be made to any holder of Junior Partnership Units upon the liquidation,
dissolution or winding up of the Partnership. If, upon any liquidation, dissolution or winding up
of the Partnership, the assets of the Partnership, or proceeds thereof, distributable among the
holders of Class Y Partnership Preferred Units shall be insufficient to pay in full the
preferential amount aforesaid and liquidating payments on any Parity Partnership Units, then such
assets, or the proceeds thereof, shall be distributed among the holders of Class Y Partnership
Preferred Units and any such Parity Partnership Units ratably in the same proportion as the
respective amounts that would be payable on such Class Y Partnership Preferred Units and any such
other Parity Partnership Units if all amounts payable thereon were paid in full. For the purposes
of this Section 4, (i) a consolidation or merger of the Partnership with one or more partnerships,
or (ii) a sale or transfer of all or substantially all of the Partnership’s assets shall not be
deemed to be a liquidation, dissolution or winding up, voluntary or involuntary, of the
Partnership.




          (b) Upon any liquidation, dissolution or winding up of the Partnership, after payment shall
have been made in full to the holders of Class Y Partnership Preferred Units and any Parity
Partnership Units, as provided in this Section 4, any other series or class or classes of Junior
Partnership Units shall, subject to the respective terms thereof, be entitled to receive any and
all assets remaining to be paid or distributed, and the holders of the Class Y Partnership
Preferred Units and any Parity Partnership Units shall not be entitled to share therein.




     5. Redemption.



          Class Y Partnership Preferred Units shall be redeemable by the Partnership as follows:




          (a) At any time that the Previous General Partner exercises its right to redeem all or any of
the shares of Class Y Preferred Stock, the General Partner shall cause the Partnership to redeem an
equal number of Class Y Partnership Preferred Units, at a redemption price per Class Y Partnership
Preferred Unit payable in cash and equal to the same price per share paid by the Previous General
Partner to redeem the Class Y Preferred Stock. In the event of a redemption of Class Y Partnership
Preferred Units, if the redemption date occurs after a dividend record date for the Class Y
Preferred Stock and on or prior to the related Distribution Payment Date, the distribution payable
on such Distribution Payment Date in respect of such Class Y Partnership Preferred Units called for
redemption shall be payable on such Distribution Payment Date to the holders of record of such
Class Y Partnership Preferred Units on the applicable dividend record date, and shall not be
payable as part of the redemption price for such Class Y Partnership Preferred Units.




          (b) If the Partnership shall redeem Class Y Partnership Preferred Units pursuant to paragraph
(a) of this Section 5, from and after the redemption date (unless the Partnership shall fail to
make available the amount of cash necessary to effect such redemption), (i) except for payment of
the redemption price, the Partnership shall not make any further distributions on the Class Y
Partnership Preferred Units so called for redemption, (ii) said units shall no longer be deemed to
be outstanding, and (iii) all rights of the holders thereof as holders of Class Y Partnership
Preferred Units of the Partnership shall cease except the rights to receive the cash payable upon
such redemption, without interest thereon; provided, however, that if the redemption date occurs
after dividend record date for the Class Y Preferred Stock and on or prior to the related
Distribution Payment Date, the full distribution payable on such Distribution Payment Date in
respect of such Class Y Partnership Preferred Units





T-2









 







called for redemption shall be payable on such Distribution Payment Date to the holders of
record of such Class Y Partnership Preferred Units on the applicable dividend record date
notwithstanding the prior redemption of such Class Y Partnership Preferred Units. No interest
shall accrue for the benefit of the holders of the Class Y Partnership Preferred Units to be
redeemed on any cash set aside by the Partnership.




          (c) If fewer than all the outstanding Class Y Partnership Preferred Units are to be redeemed,
units to be redeemed shall be selected by the Partnership from outstanding Class Y Partnership
Preferred Units not previously called for redemption by any method determined by the General
Partner in its discretion. Upon any such redemption, the General Partner shall amend Exhibit A to
the Agreement as appropriate to reflect such redemption.




     6. Status of Reacquired Units.



          All Class Y Partnership Preferred Units which shall have been issued and reacquired in any
manner by the Partnership shall be deemed cancelled.




     7. Ranking.



          Any class or series of Partnership Units of the Partnership shall be deemed to rank:




          (a) prior or senior to the Class Y Partnership Preferred Units, as to the payment of
distributions and as to distributions of assets upon liquidation, dissolution or winding up, if the
holders of such class or series shall be entitled to the receipt of distributions and of amounts
distributable upon liquidation, dissolution or winding up, as the case may be, in preference or
priority to the holders of Class Y Partnership Preferred Units (“Senior Partnership Units”);




          (b) on a parity with the Class Y Partnership Preferred Units, as to the payment of
distributions and as to distribution of assets upon liquidation, dissolution or winding up, whether
or not the distribution rates, distribution payment dates or redemption or liquidation prices per
unit or other denomination thereof be different from those of the Class Y Partnership Preferred
Units if (i) such class or series of Partnership Units shall be Class G Partnership Preferred
Units, Class T Partnership Preferred Units, Class U Partnership Preferred Units, Class V
Partnership Preferred Units, Class W Partnership Preferred Units, Class One Partnership Preferred
Units, Class Two Partnership Preferred Units, Class Three Partnership Preferred Units, Class Four
Partnership Preferred Units, Class Six Partnership Preferred Units or Class Seven Partnership
Preferred Units, or (ii) the holders of such class or series of Partnership Units and the Class Y
Partnership Preferred Units shall be entitled to the receipt of distributions and of amounts
distributable upon liquidation, dissolution or winding up in proportion to their respective amounts
of accrued and unpaid distributions per unit or other denomination or liquidation preferences,
without preference or priority one over the other (the Partnership Units referred to in clauses (i)
and (ii) of this paragraph being hereinafter referred to, collectively, as “Parity Partnership
Units”); and




          (c) junior to the Class Y Partnership Preferred Units, as to the payment of distributions and
as to the distribution of assets upon liquidation, dissolution or winding up, if (i) such class or
series of Partnership Units shall be Partnership Common Units, Class I High Performance Partnership
Units, Class VII High Performance Partnership Units, Class Five Partnership Preferred Units or
Class Eight Partnership Preferred Units, or (ii) the holders of Class Y Partnership Preferred Units
shall be entitled to receipt of distributions or of amounts distributable upon liquidation,
dissolution or winding up, as the case may be, in preference or priority to the holders of such
class or series of Partnership Units (the Partnership Units referred to in clauses (i) and (ii) of
this paragraph being hereinafter referred to, collectively, as “Junior Partnership Units”).




     8. Special Allocations.



          (a) Gross income and, if necessary, gain shall be allocated to the holders of Class Y
Partnership Preferred Units for any Fiscal Year (and, if necessary, subsequent Fiscal Years) to the
extent that the holders of Class Y Partnership Preferred Units receive a distribution on any Class
Y Partnership Preferred Units (other than an amount included in any redemption pursuant to Section
5 hereof) with respect to such Fiscal Year.




T-3









 








          (b) If any Class Y Partnership Preferred Units are redeemed pursuant to Section 5 hereof, for
the Fiscal Year that includes such redemption (and, if necessary, for subsequent Fiscal Years) (a)
gross income and gain (in such relative proportions as the General Partner in its discretion shall
determine) shall be allocated to the holders of Class Y Partnership Preferred Units to the extent
that the redemption amounts paid or payable with respect to the Class Y Partnership Preferred Units
so redeemed exceeds the aggregate Capital Contributions (net of liabilities assumed or taken
subject to by the Partnership) per Class Y Partnership Preferred Unit allocable to the Class Y
Partnership Preferred Units so redeemed and (b) deductions and losses (in such relative proportions
as the General Partner in its discretion shall determine) shall be allocated to the holders of
Class Y Partnership Preferred Units to the extent that the aggregate Capital Contributions (net of
liabilities assumed or taken subject to by the Partnership) per Class Y Partnership Preferred Unit
allocable to the Class Y Partnership Preferred Units so redeemed exceeds the redemption amount paid
or payable with respect to the Class Y Partnership Preferred Units so redeemed.




     9. Restrictions on Ownership.



          The Class Y Partnership Preferred Units shall be owned and held solely by the General Partner
or the Special Limited Partner.




     10. General.



          (a) The ownership of Class Y Partnership Preferred Units may (but need not, in the sole and
absolute discretion of the General Partner) be evidenced by one or more certificates. The General
Partner shall amend Exhibit A to the Agreement from time to time to the extent necessary to reflect
accurately the issuance of, and subsequent conversion, redemption, or any other event having an
effect on the ownership of, Class Y Partnership Preferred Units.




          (b) The rights of the General Partner and the Special Limited Partner, in their capacity as
holders of the Class Y Partnership Preferred Units, are in addition to and not in limitation of any
other rights or authority of the General Partner or the Special Limited Partner, respectively, in
any other capacity under the Agreement or applicable law. In addition, nothing contained herein
shall be deemed to limit or otherwise restrict the authority of the General Partner or the Special
Limited Partner under the Agreement, other than in their capacity as holders of the Class Y
Partnership Preferred Units.




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EXHIBIT U




PARTNERSHIP UNIT DESIGNATION OF

THE CLASS VIII HIGH PERFORMANCE PARTNERSHIP UNITS OF

AIMCO PROPERTIES, L.P.




     1. Number of Units and Designation.



          A class of Partnership Units is hereby designated as “Class VIII High Performance Partnership
Units,” and the number of Partnership Units initially constituting such class shall be five
thousand (5,000), subject to adjustment at the Class VIII High Performance Valuation Date, as
provided in Section 3 hereof.




     2. Definitions.



          For purposes of this Partnership Unit Designation, the following terms shall have the meanings
indicated in this Section 2. Capitalized terms used and not otherwise defined herein shall have
the meanings assigned thereto in the Agreement.




          “AIMCO Equity Capitalization” shall mean the quotient obtained by dividing (i) the sum of the
AIMCO Market Values for each trading day included in the Measurement Period, by (ii) the number of
trading days included in the Measurement Period.




          “AIMCO Market Value” shall mean, for any date, the product of (i) the number of REIT Shares
and Partnership Units (other than Partnership Preferred Units) outstanding as of the close of
business on such date, multiplied by (ii) the Value of a REIT Share on such date.




          “AIMCO Total Return” shall mean the Total Return of the REIT Shares for the Measurement
Period; provided, however, that, for purposes of calculating the security price of
the REIT Shares (i) at the beginning of the Measurement Period, such price shall be $37.49 and (ii)
at the end of the Measurement Period, such price shall be the average of the daily market prices
for twenty (20) consecutive trading days ending immediately prior to the Class VIII High
Performance Valuation Date. The market price for any such trading day shall be:





     (a) if the REIT Shares are listed or admitted to trading on any securities exchange or
The Nasdaq Stock Market’s National Market System, the volume-weighted average of trading
prices on such day, as reported by Bloomberg Financial Markets (or another reliable source
selected by the General Partner), or if no trade takes place on such day, the average of
the closing bid and asked prices on such day, as reported in the principal consolidated
transaction reporting system;




     (b) if the REIT Shares are not listed or admitted to trading on any securities
exchange or The Nasdaq Stock Market’s National Market System, the last reported sale price
on such day or, if no sale takes place on such day, the average of the closing bid and
asked prices on such day, as reported by a reliable quotation source designated by the
General Partner; or




     (c) if the REIT Shares are not listed or admitted to trading on any securities
exchange or The Nasdaq Stock Market’s National Market System and no such last reported sale
price or closing bid and asked prices are available, the average of the reported high bid
and low asked prices on such day, as reported by a reliable quotation source designated by
the General Partner, or if there shall be no bid and asked prices on such day, the average
of the high bid and low asked prices, as so reported, on the most recent day (not more than
ten (10) days prior to the date in question) for which prices have been so reported;



U-1









 




provided, however, that, if there are no bid and asked prices reported during the
ten (10) days prior to the date in question, the market price of the REIT Shares shall be
determined by the General Partner acting in good faith on the basis of such quotations and other
information as it considers, in its reasonable judgment, appropriate.




          “Agreement” shall mean the Agreement of Limited Partnership of the Partnership, as amended,
supplemented or restated from time to time.




          “Change of Control” shall mean the occurrence of any of the following events:




          an acquisition (other than directly from the Previous General Partner) of any voting
securities of the Previous General Partner (the “Voting Securities”) by any “person” (as the term
“person” is used for purposes of Section 13(d) or Section 14(d) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”)) immediately after which such person has “beneficial
ownership” (within the meaning of Rule 13d-3 promulgated under the Exchange Act) (“Beneficial
Ownership”) of 20% or more of the combined voting power of the Previous General Partner’s then
outstanding Voting Securities; provided, however, in determining whether a Change of Control has
occurred, Voting Securities that are acquired in a Non-Control Acquisition (as hereinafter defined)
shall not constitute an acquisition that would cause a Change of Control. “Non-Control
Acquisition” shall mean an acquisition by (A) an employee benefit plan (or a trust forming a part
thereof) maintained by (1) the Previous General Partner or (2) any corporation, partnership or
other person of which a majority of its voting power or its equity securities or equity interest is
owned directly or indirectly by the Previous General Partner or in which the Previous General
Partner serves as a general partner or manager (a “Subsidiary”), (B) the Previous General Partner
or any Subsidiary, or (C) any person in connection with a Non-Control Transaction (as hereinafter
defined);




          the individuals who constitute the Board of Directors of the Previous General Partner as of
January 1, 2005 (the “Incumbent Board”) cease for any reason to constitute at least two-thirds (?)
of the Board of Directors; provided, however, that if the election, or nomination for election by
the Previous General Partner’s stockholders, of any new director was approved by a vote of at least
two-thirds (?) of the Incumbent Board, such new director shall be considered as a member of the
Incumbent Board; provided, further, that no individual shall be considered a member of the
Incumbent Board if such individual initially assumed office as a result of either an actual or
threatened “election contest” (as described in Rule 14a-11 promulgated under the Exchange Act) (an
“Election Contest”) or other actual or threatened solicitation of proxies or consents by or on
behalf of a person other than the Board of Directors (a “Proxy Contest”) including by reason of any
agreement intended to avoid or settle any Election Contest or Proxy Contest; or approval by
stockholders of the Previous General Partner of: (A) a merger, consolidation, share exchange or
reorganization involving the Previous General Partner, unless (1) the stockholders of the Previous
General Partner, immediately before such merger, consolidation, share exchange or reorganization,
own, directly or indirectly immediately following such merger, consolidation, share exchange or
reorganization, at least 80% of the combined voting power of the outstanding voting securities of
the corporation that is the successor in such merger, consolidation, share exchange or
reorganization (the “Surviving Company”) in substantially the same proportion as their ownership of
the Voting Securities immediately before such merger, consolidation, share exchange or
reorganization, (2) the individuals who were members of the Incumbent Board immediately prior to
the execution of the agreement providing for such merger, consolidation, share exchange or
reorganization constitute at least two-thirds (?) of the members of the board of directors of the
Surviving Company, and (3) no persons (other than the Previous General Partner or any Subsidiary,
any employee benefit plan (or any trust forming a part thereof) maintained by the Previous General
Partner, the Surviving Company or any Subsidiary, or any person who, immediately prior to such
merger, consolidation, share exchange or reorganization had Beneficial Ownership of 15% or more of
the then outstanding Voting Securities has Beneficial Ownership of 15% or more of the combined
voting power of the Surviving Company’s then outstanding voting securities (a transaction described
in clauses (1) through (3) is referred to herein as a “Non-Control Transaction”); (B) a complete
liquidation or dissolution of the Previous General Partner; or (C) an agreement for the sale or
other disposition of all or substantially all of the assets of the Previous General Partner to any
person (other than a transfer to a Subsidiary).




U-2









 








          Notwithstanding the foregoing, a Change of Control shall not be deemed to occur solely because
any person (a “Subject Person”) acquired Beneficial Ownership of more than the permitted amount of
the outstanding Voting Securities as a result of the acquisition of Voting Securities by the
Previous General Partner that, by reducing the number of Voting Securities outstanding, increases
the proportional number of shares Beneficially Owned by such Subject Person, provided that if a
Change of Control would occur (but for the operation of this sentence) as a result of the
acquisition of Voting Securities by the Previous General Partner, and after such share acquisition
by the Previous General Partner, such Subject Person becomes the Beneficial Owner of any additional
Voting Securities that increases the percentage of the then outstanding Voting Securities
Beneficially Owned by such Subject Person, then a Change of Control shall occur.




          “Class VIII High Performance Cash Amount” shall mean, as of any date, the lesser of (i) an
amount of cash equal to the amount that a Holder would receive in respect of each Class VIII High
Performance Partnership Unit if the Partnership sold all of its properties at their fair market
value (which may be determined by reference to the Value of a REIT Share), paid all of its debts
and distributed the remaining proceeds to the Partners as provided in Section 13.2 of the
Agreement, determined as of the applicable Valuation Date, or (ii) in the case of a Declination
followed by a Public Offering Funding, the Public Offering Funding Amount.




          “Class VIII High Performance Partnership Unit” shall mean a Partnership Unit with the
designations, preferences and relative, participating, optional or other special rights, powers and
duties as are set forth in this Exhibit.




          “Class VIII High Performance Valuation Date” shall mean the earlier to occur of (i) January 1,
2008, or (ii) the date on which a Change of Control occurs.




          “Determination Date” shall mean (i) when used with respect to any dividend or other
distribution, the date fixed for the determination of the holders of the securities entitled to
receive such dividend or distribution, or, if a dividend or distribution is paid or made without
fixing such a date, the date of such dividend or distribution, and (ii) when used with respect to
any split, subdivision, reverse stock split, combination or reclassification of securities, the
date upon which such split, subdivision, reverse stock split, combination or reclassification
becomes effective.




          “Dilution Limit” shall mean an amount equal to the product of (i) 1.0% of the total number of
REIT Shares and Partnership Common Units outstanding on the Class VIII High Performance Valuation
Date, on a fully diluted basis (excluding any Partnership Common Units held by the Previous General
Partner or any of its wholly owned subsidiaries), and (ii) a fraction, the numerator of which is
the number of Pre-Adjustment Units, and the denominator of which is 5,000.




          “Ex-Date” shall mean (i) when used with respect to any dividend or distribution, the first
date on which the securities in respect of which the dividend or distribution is payable trade
regular way on the relevant exchange or in the relevant market without the right to receive such
dividend or distribution, and (ii) when used with respect to any split, subdivision, reverse stock
split, combination or reclassification of securities, the first date on which the securities trade
regular way on such exchange or in such market to reflect such split, subdivision, reverse stock
split, combination or reclassification becoming effective.




          “Extraordinary Distribution” shall mean the distribution by the Previous General Partner, by
dividend or otherwise, to all holders of its REIT Shares of evidences of its indebtedness or
assets (including securities) other than cash.




          “Hurdle Rate of Return” shall mean the greater of (i) 36.8% (or if the Measurement Period is
less than three years, a percentage equal to the return over the Measurement Period that would
result in a cumulative return of 36.8% over a three year period with annual compounding) or (ii)
115% of the Industry Total Return.




U-3









 








          “Industry Total Return” shall mean the Total Return of the securities included in the Industry
Peer Group Index for the Measurement Period, with such average determined in a manner consistent
with the manner in which such index is calculated; provided, however, that if such
Total Return would be less than zero without giving effect to the reinvestment of dividends, then
the “Industry Total Return” shall be equal to zero.




          “Industry Peer Group Index” shall mean the Morgan Stanley Dean Witter REIT Index or any other
similar industry index approved by the Board of Directors of the Previous General Partner.




          “Measurement Period” shall mean the period from and including January 1, 2005 to but excluding
the Class VIII High Performance Valuation Date.




          “Outperformance Return” shall mean the amount (measured as a percentage), if any, by which the
AIMCO Total Return exceeds the Hurdle Rate of Return. If the AIMCO Total Return does not exceed
the Hurdle Rate of Return, “Outperformance Return” shall be 0%.




          “Partnership” shall mean AIMCO Properties, L.P., a Delaware limited partnership.




          “Pre-Adjustment Units” shall mean the Class VIII High Performance Partnership Units issued and
outstanding immediately prior to the Class VIII High Performance Valuation Date.




          “Total Return” shall mean, for any security and for any period, the cumulative total return
for such security over such period, as measured by (i) the sum of (A) the cumulative amount of
dividends paid in respect of such security for such period (assuming that all dividends other than
Extraordinary Distributions are reinvested in such security as of the payment date for such
dividend based on the security price on the dividend payment date), and (B) an amount equal to (1)
the security price at the end of such period, minus (2) the security price at the beginning of such
period, divided by (ii) the security price at the beginning of the measurement period;
provided, however, that if the foregoing calculation results in a negative number,
the “Total Return” shall be equal to zero.




          “Value” shall have the meaning set forth in the Agreement, except that Value shall be
determined by reference to the average of the daily market prices for twenty (20) consecutive
trading days rather than ten (10) consecutive trading days.




     3. Adjustment of Units at Class VIII High Performance Valuation Date.



          On the Class VIII High Performance Valuation Date, without any action on the part of the
Partnership, the General Partner or the Holder of any Class VIII High Performance Partnership Unit,
each Class VIII High Performance Partnership Unit shall automatically be adjusted to equal (a) if
the Outperformance Return is 0%, 1/100 of a Class VIII High Performance Partnership Unit, or (b) if
the Outperformance Return is greater than 0%, the lesser of (i) the Dilution Limit divided by the
number of Pre-Adjustment Units, or (ii) the quotient obtained by dividing (x) the product of (A) 5%
of the Outperformance Return, multiplied by (B) a fraction, the numerator of which is the number of
Pre-Adjustment Units, and the denominator of which is 5,000, multiplied by (C) the AIMCO Equity
Capitalization, by (y) the product of (A) the number of Pre-Adjustment Units and (B) the Value of a
REIT Share on the Class VIII High Performance Valuation Date. For illustrative purposes, examples
of the calculation of adjustments to the number Class VIII High Performance Partnership Units are
set forth in Annex I hereto.




     4. Distributions.



          (i) Prior to the Class VIII High Performance Valuation Date, Holders of Class VIII High
Performance Partnership Units shall be entitled to receive distributions (other than distributions
upon liquidation) if, as, when and in the same amounts and of the same type as may be paid to
Holders of




U-4









 







Partnership Common Units as if each Class VIII High Performance Partnership Unit was 1/100 of
a Partnership Common Unit.




          (ii) On and after the Class VIII High Performance Valuation Date, the Holders of Class VIII
High Performance Partnership Units shall be entitled to receive distributions (other than
distributions upon liquidation) if, as, when and in the same amounts and of the same type as may be
paid to Holders of Partnership Common Units as if each Class VIII High Performance Partnership Unit
was a Partnership Common Unit originally issued on the Class VIII High Performance Valuation Date.




     5. Allocations.



          (i) Prior to the Class VIII High Performance Valuation Date, Net Income and Net Loss shall be
allocated to the Holders of Class VIII High Performance Partnership Units as if each Class VIII
High Performance Partnership Unit was 1/100 of a Partnership Common Unit.




          (ii) On and after the Class VIII High Performance Valuation Date, Net Income and Net Loss
shall be allocated to the Holders of Class VIII High Performance Partnership Units as if each Class
VIII High Performance Partnership Unit was a Partnership Common Unit originally issued on the Class
VIII High Performance Valuation Date; provided, however, that if the Outperformance
Return is 0% on the Class VIII High Performance Valuation Date, then as of the last day of the
Measurement Period, each of the Holders of Class VIII High Performance Partnership Units shall be
specially allocated Net Loss or deduction in an amount equal to (i) the excess of (x) the aggregate
Class VIII High Performance Partnership Unit capital contributions over (y) the fair market value
of the Class VIII High Performance Partnership Units as of such date, after applying the
adjustments required by Section 3 of this Partnership Unit Designation, divided by (ii) the number
of Class VIII High Performance Partnership Units held by such Holder.




          (iii) In the event that the Partnership disposes of all or substantially all of its assets in
a transaction that will lead to a liquidation of the Partnership pursuant to Article XIII of the
Agreement, then, notwithstanding Section 6.3.C of the Agreement, each Holder of Class VIII High
Performance Partnership Units shall be specifically allocated items of Partnership income and gain
in an amount sufficient to cause the Capital Account of such Holder to be equal to that of a Holder
of an equal number of Partnership Common Units.




     6. Redemption.



          Upon the occurrence of a Change of Control, and subject to the applicable requirements of
Federal securities laws and any securities exchange or quotation system rules or regulations, each
Holder of Class VIII High Performance Partnership Units shall have the redemption rights of
Qualifying Parties set forth in Section 8.6 of the Agreement, except that (i) all references
therein to “Redeemable Units” or “Partnership Common Units” shall be deemed to be references to
Class VIII High Performance Partnership Units, (ii) the first Twelve-Month Period applicable to all
Class VIII High Performance Partnership Units shall be deemed to have passed, (iii) all references
therein to “Cash Amount” shall be deemed to be references to the Class VIII High Performance Cash
Amount, and (iv) in the event that the Previous General Partner elects to acquire Class VIII High
Performance Partnership Units that have been tendered for Redemption, the Previous General Partner
shall acquire each such Class VIII High Performance Partnership Unit in exchange for a number of
REIT Shares equal to the quotient obtained by dividing the Class VIII High Performance Cash Amount
by the Value of a REIT Share, determined as of the applicable Valuation Date.




     7. Status of Reacquired Units.



          All Class VIII High Performance Partnership Units which shall have been issued and reacquired
in any manner by the Partnership shall be deemed cancelled and no longer outstanding.




U-5









 








     8. Restrictions on Ownership and Transfer.



          The restrictions on Transfer set forth in Sections 11.1.B and 11.3.A of the Agreement shall
not apply to Transfers of Class VIII High Performance Partnership Units. Prior to the Class VIII
High Performance Valuation Date, the Class VIII High Performance Partnership Units shall be owned
and held solely by SMP 2008, L.L.C., a Delaware limited liability company (the “SMP”). On or after
the Class VIII High Performance Valuation Date, the Class VIII High Performance Partnership Units
may be Transferred (i) by the SMP to (a) any Person who is a member (a “Member”) of the SMP
immediately prior to such transfer, (b) a Family Member of a Member, (c) a Controlled Entity of a
Member, (c) any Person with respect to whom the Member constitutes a Controlled Entity, (d) upon
the death of a Member, by will or by the laws of descent and distribution to any Qualified
Transferee, and (ii) by any other Person to (a) a Family Member of a such Person, (b) a Controlled
Entity of such Person, (c) any other Person with respect to whom such Person constitutes a
Controlled Entity, (d) upon the death of such Person, by will or by the laws of descent and
distribution to any Qualified Transferee.




     9. Voting Rights.



          Each Holder of Class VIII High Performance Partnership Units shall have the same voting and
approval rights as a Holder of an equal number of Partnership Common Units.




     10. Adjustments.



          (i) In the event of any Extraordinary Distribution occurring on or after January 1, 2005, for
purposes of determining the Value of a REIT Share or the AIMCO Total Return, each price of a REIT
Share determined as of a date on or after the Ex-Date for such Extraordinary Distribution shall be
adjusted by multiplying such price by a fraction (i) the numerator of which shall be the price of a
REIT Share on the date immediately prior to such Ex-Date, and (ii) the denominator of which shall
be (A) the price of a REIT Share on the date immediately prior to such Ex-Date, minus (B) the fair
market value on the date fixed for such determination of the portion of the evidences of
indebtedness or assets so distributed applicable to one REIT Share (as determined by the General
Partner, whose determination shall be conclusive); provided further, that such amount shall be so
adjusted for each such Extraordinary Distribution occurring on or after January 1, 2005.




          (ii) In the event that, on or after January 1, 2004, the Previous General Partner (i) declares
or pays a dividend on its outstanding REIT Shares in REIT Shares or makes a distribution to all
holders of its outstanding REIT Shares in REIT Shares, (ii) splits or subdivides its outstanding
REIT Shares, (iii) effects a reverse stock split or otherwise combines its outstanding REIT Shares
into a smaller number of REIT Shares, or (iv) otherwise reclassifies its outstanding REIT Shares,
then, for purposes of determining the Value of a REIT Share or the AIMCO Total Return, each price
of a REIT Share determined as of a date on or after the Ex-Date for such transaction shall be
adjusted by multiplying such price by a fraction (x) the numerator of which shall be the number of
REIT Shares issued and outstanding on the Determination Date for such dividend, distribution,
split, subdivision, reverse stock split, combination or reclassification (assuming for such
purposes that such dividend, distribution, split, subdivision, reverse split or combination has
occurred as of such time) and (y) the denominator of which shall be the actual number of REIT
Shares (determined without the above assumption) issued and outstanding on the Determination Date
for such dividend, distribution, split, subdivision, reverse stock split, combination or
reclassification.




          (iii) The General Partner shall have authority to appropriately adjust the AIMCO Market Value,
the AIMCO Total Return or the Value of a REIT Share if any other transaction or circumstance occurs
or arises that would have an inequitable result.




U-6









 








     11. General.



          Class VIII High Performance Partnership Units shall be evidenced by certificates in the form
of Annex II hereto, or in such other form as the General Partner shall specify from time to
time. The Class VIII High Performance Partnership Units shall be securities governed by Article 8
of the Uniform Commercial Code. Each certificate evidencing a Class VIII High Performance
Partnership Unit shall bear the following legend: “This certificate evidences an interest in AIMCO
Properties, L.P. and shall be a security for purposes of the Uniform Commercial Code.” This
provision shall not be amended, and any purported amendment to this provision shall not take effect
until all outstanding certificates have been surrendered for cancellation. The General Partner
shall amend Exhibit A to the Agreement from time to time to the extent necessary to reflect
accurately the issuance of, and subsequent conversion, redemption, or any other event having an
effect on the ownership of, Class VIII High Performance Partnership Units.




U-7









 





ANNEX I TO

EXHIBIT U




Numerical Examples of the Calculation of the Adjustment to the Number of Class VIII High Performance

Partnership Units on the Class VIII High Performance

Valuation Date




          The following table illustrates the adjustment that would be made to 5,000 Class VIII High
Performance Partnership Units (“HPUs”) on the Class VIII High Performance Valuation Date under
different circumstances. Except as otherwise indicated, it is assumed, for purposes of the
illustration, that: (i) the Class VIII High Performance Valuation Date is January 1, 2008; (ii)
the Industry Total Return is less than 32.0%, resulting in a Hurdle Rate of Return of 36.8%; and
(iii) the AIMCO Equity Capitalization is $3,962,506,000.




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	AIMCO	 	 	 	 
	 	 	AIMCO	 	 	 	 	 	 	Equity	 	 	 	 
	Stock	 	Total	 	 	Outperformance	 	 	Capitalization	 	 	Number of	 
	Price	 	Return	 	 	Return	 	 	(Thousands)	 	 	HPUs	 
	$38.00
	 	 	36.57	%	 	 	0	%	 	$	3,962,506	 	 	 	50	 
	40.00
	 	 	41.90	%	 	 	5.10	%	 	$	3,962,506	 	 	 	219,855	 
	42.00
	 	 	47.24	%	 	 	10.44	%	 	$	3,962,506	 	 	 	430,892	 
	44.00
	 	 	52.57	%	 	 	15.77	%	 	$	3,962,506	 	 	 	625,046	 
	46.00
	 	 	57.91	%	 	 	21.11	%	 	$	3,962,506	 	 	 	804,266	 
	48.00
	 	 	63.24	%	 	 	26.44	%	 	$	3,962,506	 	 	 	970,210	 
	50.00
	 	 	68.58	%	 	 	31.78	%	 	$	3,962,506	 	 	 	1,060,990	*
	52.00
	 	 	73.91	%	 	 	37.11	%	 	$	3,962,506	 	 	 	1,060,990	*








 




			
	*	 	The number of HPUs has been restricted based on the Dilution Limit.





U-8









 





ANNEX II TO

EXHIBIT U



THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION, UNLESS THE TRANSFEROR DELIVERS TO AIMCO
PROPERTIES, L.P. AN OPINION OF COUNSEL, IN FORM AND SUBSTANCE SATISFACTORY TO THE PARTNERSHIP, TO
THE EFFECT THAT THE PROPOSED SALE, TRANSFER OR OTHER DISPOSITION MAY BE EFFECTED WITHOUT
REGISTRATION UNDER THE ACT AND UNDER APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS. IN ADDITION,
THE LIMITED PARTNERSHIP INTEREST EVIDENCED BY THIS CERTIFICATE MAY BE SOLD OR OTHERWISE TRANSFERRED
ONLY IN COMPLIANCE WITH THE RESTRICTIONS ON TRANSFER SET FORTH IN THE AGREEMENT OF LIMITED
PARTNERSHIP OF AIMCO PROPERTIES, L.P., DATED AS OF JULY 29, 1994, AS AMENDED, A COPY OF WHICH MAY
BE OBTAINED FROM AIMCO-GP, INC., THE GENERAL PARTNER, AT ITS PRINCIPAL EXECUTIVE OFFICE.



THIS CERTIFICATE EVIDENCES AN INTEREST IN AIMCO PROPERTIES, L.P. AND SHALL BE A SECURITY FOR
PURPOSES OF ARTICLE 8 OF THE UNIFORM COMMERCIAL CODE.




			
	 	 	 
	                     Units
	 	Certificate Number                     






AIMCO PROPERTIES, L.P.

FORMED UNDER THE LAWS OF THE STATE OF DELAWARE

CLASS VIII HIGH PERFORMANCE PARTNERSHIP UNITS




          This certifies that                                          is the owner of                      Class VIII High Performance
Partnership Units of AIMCO Properties, L.P., a Delaware limited partnership. This Certificate and
the Class VIII High Performance Partnership Units represented hereby are issued and shall be held
subject to all of the provisions of the Agreement of Limited Partnership of AIMCO Properties, L.P.,
as amended and/or supplemented from time to time.




          IN WITNESS WHEREOF, the General Partner of AIMCO Properties, L.P. has caused this Certificate
to be signed by an authorized person on this ___day of                     , ___




	 	 	 	 	 	 	 
	 	 	By: AIMCO-GP, Inc.,	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 






U-9









 






[REVERSE OF CERTIFICATE]




          For Value Received,                                          hereby sells, assigns and transfers unto                                        



 



 




          Class VIII High Performance Partnership Units represented by the within Certificate, and does
hereby irrevocably constitute and appoint the General Partner of AIMCO Properties, L.P. as its
Attorney to transfer said Class VIII High Performance Partnership Units on the books of AIMCO
Properties, L.P. with full power of substitution in the premises.




Dated:                                         




	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 






U-10









 






EXHIBIT V




PARTNERSHIP UNIT DESIGNATION OF

THE CLASS IX HIGH PERFORMANCE PARTNERSHIP UNITS OF

AIMCO PROPERTIES, L.P.




     1. Number of Units and Designation.



          A class of Partnership Units is hereby designated as “Class IX High Performance Partnership
Units,” and the number of Partnership Units initially constituting such class shall be five
thousand (5,000), subject to adjustment at the Class IX High Performance Valuation Date, as
provided in Section 3 hereof.




     2. Definitions.



          For purposes of this Partnership Unit Designation, the following terms shall have the meanings
indicated in this Section 2. Capitalized terms used and not otherwise defined herein shall have
the meanings assigned thereto in the Agreement.




          “AIMCO Equity Capitalization” shall mean the quotient obtained by dividing (i) the sum of the
AIMCO Market Values for each trading day included in the Measurement Period, by (ii) the number of
trading days included in the Measurement Period.




          “AIMCO Market Value” shall mean, for any date, the product of (i) the number of REIT Shares
and Partnership Units (other than Partnership Preferred Units) outstanding as of the close of
business on such date, multiplied by (ii) the Value of a REIT Share on such date.




          “AIMCO Total Return” shall mean the Total Return of the REIT Shares for the Measurement
Period; provided, however, that, for purposes of calculating the security price of the REIT Shares
(i) at the beginning of the Measurement Period, such price shall be $38.54 and (ii) at the end of
the Measurement Period, such price shall be the average of the daily market prices for twenty (20)
consecutive trading days ending immediately prior to the Class IX High Performance Valuation Date.
The market price for any such trading day shall be:




          (a) if the REIT Shares are listed or admitted to trading on any securities exchange or The
Nasdaq Stock Market’s National Market System, the volume-weighted average of trading prices on such
day, as reported by Bloomberg Financial Markets (or another reliable source selected by the General
Partner), or if no trade takes place on such day, the average of the closing bid and asked prices
on such day, as reported in the principal consolidated transaction reporting system;




          (b) if the REIT Shares are not listed or admitted to trading on any securities exchange or The
Nasdaq Stock Market’s National Market System, the last reported sale price on such day or, if no
sale takes place on such day, the average of the closing bid and asked prices on such day, as
reported by a reliable quotation source designated by the General Partner; or




          (c) if the REIT Shares are not listed or admitted to trading on any securities exchange or The
Nasdaq Stock Market’s National Market System and no such last reported sale price or closing bid
and asked prices are available, the average of the reported high bid and low asked prices on such
day, as reported by a reliable quotation source designated by the General Partner, or if there
shall be no bid and asked prices on such day, the average of the high bid and low asked prices, as
so reported, on the most recent day (not more than ten (10) days prior to the date in question) for
which prices have been so reported;



provided, however, that, if there are no bid and asked prices reported during the ten (10) days
prior to the date in question, the market price of the REIT Shares shall be determined by the
General Partner acting in good faith on the basis of such quotations and other information as it
considers, in its reasonable judgment, appropriate.




V-1









 








          “Agreement” shall mean the Agreement of Limited Partnership of the Partnership, as amended,
supplemented or restated from time to time.




          “Change of Control” shall mean the occurrence of any of the following events:




          (i) an acquisition (other than directly from the Previous General Partner) of any voting
securities of the Previous General Partner (the “Voting Securities”) by any “person” (as the term
“person” is used for purposes of Section 13(d) or Section 14(d) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”)) immediately after which such person has “beneficial
ownership” (within the meaning of Rule 13d-3 promulgated under the Exchange Act) (“Beneficial
Ownership”) of 20% or more of the combined voting power of the Previous General Partner’s then
outstanding Voting Securities; provided, however, in determining whether a Change of Control has
occurred, Voting Securities that are acquired in a Non-Control Acquisition (as hereinafter defined)
shall not constitute an acquisition that would cause a Change of Control. “Non-Control
Acquisition” shall mean an acquisition by (A) an employee benefit plan (or a trust forming a part
thereof) maintained by (1) the Previous General Partner or (2) any corporation, partnership or
other person of which a majority of its voting power or its equity securities or equity interest is
owned directly or indirectly by the Previous General Partner or in which the Previous General
Partner serves as a general partner or manager (a “Subsidiary”), (B) the Previous General Partner
or any Subsidiary, or (C) any person in connection with a Non-Control Transaction (as hereinafter
defined);




          (ii) the individuals who constitute the Board of Directors of the Previous General Partner as
of January 1, 2006 (the “Incumbent Board”) cease for any reason to constitute at least two-thirds
(2/3) of the Board of Directors; provided, however, that if the election, or nomination for election
by the Previous General Partner’s stockholders, of any new director was approved by a vote of at
least two-thirds (2/3) of the Incumbent Board, such new director shall be considered as a member of
the Incumbent Board; provided, further, that no individual shall be considered a member of the
Incumbent Board if such individual initially assumed office as a result of either an actual or
threatened “election contest” (as described in Rule 14a-11 promulgated under the Exchange Act) (an
“Election Contest”) or other actual or threatened solicitation of proxies or consents by or on
behalf of a person other than the Board of Directors (a “Proxy Contest”) including by reason of any
agreement intended to avoid or settle any Election Contest or Proxy Contest; or




          (iii) approval by stockholders of the Previous General Partner of: (A) a merger,
consolidation, share exchange or reorganization involving the Previous General Partner, unless (1)
the stockholders of the Previous General Partner, immediately before such merger, consolidation,
share exchange or reorganization, own, directly or indirectly immediately following such merger,
consolidation, share exchange or reorganization, at least 80% of the combined voting power of the
outstanding voting securities of the corporation that is the successor in such merger,
consolidation, share exchange or reorganization (the “Surviving Company”) in substantially the same
proportion as their ownership of the Voting Securities immediately before such merger,
consolidation, share exchange or reorganization, (2) the individuals who were members of the
Incumbent Board immediately prior to the execution of the agreement providing for such merger,
consolidation, share exchange or reorganization constitute at least two-thirds (2/3) of the members
of the board of directors of the Surviving Company, and (3) no persons (other than the Previous
General Partner or any Subsidiary, any employee benefit plan (or any trust forming a part thereof)
maintained by the Previous General Partner, the Surviving Company or any Subsidiary, or any person
who, immediately prior to such merger, consolidation, share exchange or reorganization had
Beneficial Ownership of 15% or more of the then outstanding Voting Securities has Beneficial
Ownership of 15% or more of the combined voting power of the Surviving Company’s then outstanding
voting securities (a transaction described in clauses (1) through (3) is referred to herein as a
“Non-Control Transaction”); (B) a complete liquidation or dissolution of the Previous General
Partner; or (C) an agreement for the sale or other disposition of all or substantially all of the
assets of the Previous General Partner to any person (other than a transfer to a Subsidiary).




          Notwithstanding the foregoing, a Change of Control shall not be deemed to occur solely because
any person (a “Subject Person”) acquired Beneficial Ownership of more than the permitted amount of
the outstanding Voting Securities as a result of the acquisition of Voting Securities by the
Previous General Partner that, by reducing the number of Voting Securities outstanding, increases
the proportional number of shares Beneficially Owned by such Subject Person, provided that if a
Change of Control would occur (but for the operation of this sentence) as a result of the
acquisition of Voting Securities by the Previous General Partner, and after such share acquisition
by the Previous General Partner, such Subject Person becomes the Beneficial Owner of any additional





V-2









 







Voting Securities that increases the percentage of the then outstanding Voting Securities
Beneficially Owned by such Subject Person, then a Change of Control shall occur.




          “Class IX High Performance Cash Amount” shall mean, as of any date, the lesser of (i) an
amount of cash equal to the amount that a Holder would receive in respect of each Class IX High
Performance Partnership Unit if the Partnership sold all of its properties at their fair market
value (which may be determined by reference to the Value of a REIT Share), paid all of its debts
and distributed the remaining proceeds to the Partners as provided in Section 13.2 of the
Agreement, determined as of the applicable Valuation Date, or (ii) in the case of a Declination
followed by a Public Offering Funding, the Public Offering Funding Amount.




          “Class IX High Performance Partnership Unit” shall mean a Partnership Unit with the
designations, preferences and relative, participating, optional or other special rights, powers and
duties as are set forth in this Exhibit.




          “Class IX High Performance Valuation Date” shall mean the earlier to occur of (i) January 1,
2009, or (ii) the date on which a Change of Control occurs.




          “Determination Date” shall mean (i) when used with respect to any dividend or other
distribution, the date fixed for the determination of the holders of the securities entitled to
receive such dividend or distribution, or, if a dividend or distribution is paid or made without
fixing such a date, the date of such dividend or distribution, and (ii) when used with respect to
any split, subdivision, reverse stock split, combination or reclassification of securities, the
date upon which such split, subdivision, reverse stock split, combination or reclassification
becomes effective.




          “Dilution Limit” shall mean an amount equal to the product of (i) 1.0% of the total number of
REIT Shares and Partnership Common Units outstanding on the Class IX High Performance Valuation
Date, on a fully diluted basis (excluding any Partnership Common Units held by the Previous General
Partner or any of its wholly owned subsidiaries), and (ii) a fraction, the numerator of which is
the number of Pre-Adjustment Units, and the denominator of which is 5,000.




          “Ex-Date” shall mean (i) when used with respect to any dividend or distribution, the first
date on which the securities in respect of which the dividend or distribution is payable trade
regular way on the relevant exchange or in the relevant market without the right to receive such
dividend or distribution, and (ii) when used with respect to any split, subdivision, reverse stock
split, combination or reclassification of securities, the first date on which the securities trade
regular way on such exchange or in such market to reflect such split, subdivision, reverse stock
split, combination or reclassification becoming effective.




          “Extraordinary Distribution” shall mean the distribution by the Previous General Partner, by
dividend or otherwise, to all holders of its REIT Shares of evidences of its indebtedness or
assets (including securities) other than cash.




          “Hurdle Rate of Return” shall mean the greater of (i) 36.8% (or if the Measurement Period is
less than three years, a percentage equal to the return over the Measurement Period that would
result in a cumulative return of 36.8% over a three year period with annual compounding) or (ii)
115% of the Industry Total Return.




          “Industry Total Return” shall mean the Total Return of the securities included in the Industry
Peer Group Index for the Measurement Period, with such average determined in a manner consistent
with the manner in which such index is calculated; provided, however, that if such Total Return
would be less than zero without giving effect to the reinvestment of dividends, then the “Industry
Total Return” shall be equal to zero.




          “Industry Peer Group Index” shall mean the MSCI US REIT Index, or any other similar industry
index approved by the Board of Directors of the Previous General Partner.




          “Measurement Period” shall mean the period from and including January 1, 2006 to but excluding
the Class IX High Performance Valuation Date.




V-3









 








          “Outperformance Return” shall mean the amount (measured as a percentage), if any, by which the
AIMCO Total Return exceeds the Hurdle Rate of Return. If the AIMCO Total Return does not exceed
the Hurdle Rate of Return, “Outperformance Return” shall be 0%.




          “Partnership” shall mean AIMCO Properties, L.P., a Delaware limited partnership.




          “Pre-Adjustment Units” shall mean the Class IX High Performance Partnership Units issued and
outstanding immediately prior to the Class IX High Performance Valuation Date.




          “Total Return” shall mean, for any security and for any period, the cumulative total return
for such security over such period, as measured by (i) the sum of (A) the cumulative amount of
dividends paid in respect of such security for such period (assuming that all dividends other than
Extraordinary Distributions are reinvested in such security as of the payment date for such
dividend based on the security price on the dividend payment date), and (B) an amount equal to (1)
the security price at the end of such period, minus (2) the security price at the beginning of such
period, divided by (ii) the security price at the beginning of the measurement period; provided,
however, that if the foregoing calculation results in a negative number, the “Total Return” shall
be equal to zero.




          “Value” shall have the meaning set forth in the Agreement, except that Value shall be
determined by reference to the average of the daily market prices for twenty (20) consecutive
trading days rather than ten (10) consecutive trading days.




     3. Adjustment of Units at Class IX High Performance Valuation Date.



          On the Class IX High Performance Valuation Date, without any action on the part of the
Partnership, the General Partner or the Holder of any Class IX High Performance Partnership Unit,
each Class IX High Performance Partnership Unit shall automatically be adjusted to equal (a) if the
Outperformance Return is 0%, 1/100 of a Class IX High Performance Partnership Unit, or (b) if the
Outperformance Return is greater than 0%, the lesser of (i) the Dilution Limit divided by the
number of Pre-Adjustment Units, or (ii) the quotient obtained by dividing (x) the product of (A) 5%
of the Outperformance Return, multiplied by (B) a fraction, the numerator of which is the number of
Pre-Adjustment Units, and the denominator of which is 5,000, multiplied by (C) the AIMCO Equity
Capitalization, by (y) the product of (A) the number of Pre-Adjustment Units and (B) the Value of a
REIT Share on the Class IX High Performance Valuation Date. For illustrative purposes, examples of
the calculation of adjustments to the number Class IX High Performance Partnership Units are set
forth in Annex I hereto.




     4. Distributions.



          (a) Prior to the Class IX High Performance Valuation Date, Holders of Class IX High
Performance Partnership Units shall be entitled to receive distributions (other than distributions
upon liquidation) if, as, when and in the same amounts and of the same type as may be paid to
Holders of Partnership Common Units as if each Class IX High Performance Partnership Unit was 1/100
of a Partnership Common Unit.




          (b) On and after the Class IX High Performance Valuation Date, the Holders of Class IX High
Performance Partnership Units shall be entitled to receive distributions (other than distributions
upon liquidation) if, as, when and in the same amounts and of the same type as may be paid to
Holders of Partnership Common Units as if each Class IX High Performance Partnership Unit was a
Partnership Common Unit originally issued on the Class IX High Performance Valuation Date.




     5. Allocations.



          (a) Prior to the Class IX High Performance Valuation Date, Net Income and Net Loss shall be
allocated to the Holders of Class IX High Performance Partnership Units as if each Class IX High
Performance Partnership Unit was 1/100 of a Partnership Common Unit.




          (b) On and after the Class IX High Performance Valuation Date, Net Income and Net Loss shall
be allocated to the Holders of Class IX High Performance Partnership Units as if each Class IX High




V-4









 







Performance Partnership Unit was a Partnership Common Unit originally issued on the Class IX
High Performance Valuation Date; provided, however, that if the Outperformance Return is 0% on the
Class IX High Performance Valuation Date, then as of the last day of the Measurement Period, each
of the Holders of Class IX High Performance Partnership Units shall be specially allocated Net Loss
or deduction in an amount equal to (i) the excess of (x) the aggregate Class IX High Performance
Partnership Unit capital contributions over (y) the fair market value of the Class IX High
Performance Partnership Units as of such date, after applying the adjustments required by Section 3
of this Partnership Unit Designation, divided by (ii) the number of Class IX High Performance
Partnership Units held by such Holder.




          (c) In the event that the Partnership disposes of all or substantially all of its assets in a
transaction that will lead to a liquidation of the Partnership pursuant to Article XIII of the
Agreement, then, notwithstanding Section 6.3.C of the Agreement, each Holder of Class IX High
Performance Partnership Units shall be specifically allocated items of Partnership income and gain
in an amount sufficient to cause the Capital Account of such Holder to be equal to that of a Holder
of an equal number of Partnership Common Units.




     6. Redemption.



          Upon the occurrence of a Change of Control, and subject to the applicable requirements of
Federal securities laws and any securities exchange or quotation system rules or regulations, each
Holder of Class IX High Performance Partnership Units shall have the redemption rights of
Qualifying Parties set forth in Section 8.6 of the Agreement, except that (i) all references
therein to “Redeemable Units” or “Partnership Common Units” shall be deemed to be references to
Class IX High Performance Partnership Units, (ii) the first Twelve-Month Period applicable to all
Class IX High Performance Partnership Units shall be deemed to have passed, (iii) all references
therein to “Cash Amount” shall be deemed to be references to the Class IX High Performance Cash
Amount, and (iv) in the event that the Previous General Partner elects to acquire Class IX High
Performance Partnership Units that have been tendered for Redemption, the Previous General Partner
shall acquire each such Class IX High Performance Partnership Unit in exchange for a number of REIT
Shares equal to the quotient obtained by dividing the Class IX High Performance Cash Amount by the
Value of a REIT Share, determined as of the applicable Valuation Date.




     7. Status of Reacquired Units.



          All Class IX High Performance Partnership Units which shall have been issued and reacquired in
any manner by the Partnership shall be deemed cancelled and no longer outstanding.




     8. Restrictions on Ownership and Transfer.



          The restrictions on Transfer set forth in Sections 11.1.B and 11.3.A of the Agreement shall
not apply to Transfers of Class IX High Performance Partnership Units. Prior to the Class IX High
Performance Valuation Date, the Class IX High Performance Partnership Units shall be owned and held
solely by SMP 2009, L.L.C., a Delaware limited liability company (the “SMP”). On or after the
Class IX High Performance Valuation Date, the Class IX High Performance Partnership Units may be
Transferred (i) by the SMP to (a) any Person who is a member (a “Member”) of the SMP immediately
prior to such transfer, (b) a Family Member of a Member, (c) a Controlled Entity of a Member, (c)
any Person with respect to whom the Member constitutes a Controlled Entity, (d) upon the death of a
Member, by will or by the laws of descent and distribution to any Qualified Transferee, and (ii) by
any other Person to (a) a Family Member of a such Person, (b) a Controlled Entity of such Person,
(c) any other Person with respect to whom such Person constitutes a Controlled Entity, (d) upon the
death of such Person, by will or by the laws of descent and distribution to any Qualified
Transferee.




     9. Voting Rights.



          Each Holder of Class IX High Performance Partnership Units shall have the same voting and
approval rights as a Holder of an equal number of Partnership Common Units.




V-5









 








     10. Adjustments.



          (a) In the event of any Extraordinary Distribution occurring on or after January 1, 2006, for
purposes of determining the Value of a REIT Share or the AIMCO Total Return, each price of a REIT
Share determined as of a date on or after the Ex-Date for such Extraordinary Distribution shall be
adjusted by multiplying such price by a fraction (i) the numerator of which shall be the price of a
REIT Share on the date immediately prior to such Ex-Date, and (ii) the denominator of which shall
be (A) the price of a REIT Share on the date immediately prior to such Ex-Date, minus (B) the fair
market value on the date fixed for such determination of the portion of the evidences of
indebtedness or assets so distributed applicable to one REIT Share (as determined by the General
Partner, whose determination shall be conclusive); provided further, that such amount shall be so
adjusted for each such Extraordinary Distribution occurring on or after January 1, 2006.




          (b) In the event that, on or after January 1, 2006, the Previous General Partner (i) declares
or pays a dividend on its outstanding REIT Shares in REIT Shares or makes a distribution to all
holders of its outstanding REIT Shares in REIT Shares, (ii) splits or subdivides its outstanding
REIT Shares, (iii) effects a reverse stock split or otherwise combines its outstanding REIT Shares
into a smaller number of REIT Shares, or (iv) otherwise reclassifies its outstanding REIT Shares,
then, for purposes of determining the Value of a REIT Share or the AIMCO Total Return, each price
of a REIT Share determined as of a date on or after the Ex-Date for such transaction shall be
adjusted by multiplying such price by a fraction (x) the numerator of which shall be the number of
REIT Shares issued and outstanding on the Determination Date for such dividend, distribution,
split, subdivision, reverse stock split, combination or reclassification (assuming for such
purposes that such dividend, distribution, split, subdivision, reverse split or combination has
occurred as of such time) and (y) the denominator of which shall be the actual number of REIT
Shares (determined without the above assumption) issued and outstanding on the Determination Date
for such dividend, distribution, split, subdivision, reverse stock split, combination or
reclassification.




          (c) The General Partner shall have authority to appropriately adjust the AIMCO Market Value,
the AIMCO Total Return or the Value of a REIT Share if any other transaction or circumstance occurs
or arises that would have an inequitable result.




     11. General.



          Class IX High Performance Partnership Units shall be evidenced by certificates in the form of
Annex II hereto, or in such other form as the General Partner shall specify from time to time. The
Class IX High Performance Partnership Units shall be securities governed by Article 8 of the
Uniform Commercial Code. Each certificate evidencing a Class IX High Performance Partnership Unit
shall bear the following legend: “This certificate evidences an interest in AIMCO Properties, L.P.
and shall be a security for purposes of the Uniform Commercial Code.” This provision shall not be
amended, and any purported amendment to this provision shall not take effect until all outstanding
certificates have been surrendered for cancellation. The General Partner shall amend Exhibit A to
the Agreement from time to time to the extent necessary to reflect accurately the issuance of, and
subsequent conversion, redemption, or any other event having an effect on the ownership of, Class
IX High Performance Partnership Units.




V-6









 





ANNEX I TO

EXHIBIT V




Numerical Examples of the Calculation of the Adjustment to the Number of Class IX High Performance Partnership

Units on the Class IX High Performance Valuation Date




          The following table illustrates the adjustment that would be made to 5,000 Class IX High
Performance Partnership Units (“HPUs”) on the Class IX High Performance Valuation Date under
different circumstances. Except as otherwise indicated, it is assumed, for purposes of the
illustration, that: (i) the Class IX High Performance Valuation Date is January 1, 2009; (ii) the
Industry Total Return is less than 32.0%, resulting in a Hurdle Rate of Return of 36.8%; and (iii)
the AIMCO Equity Capitalization is $4,087,976,000.




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	AIMCO	 	 
	 	 	AIMCO	 	Out-	 	Equity	 	 
	Stock	 	Total	 	performance	 	Capitalization	 	Total Number of
	Price	 	Return	 	Return	 	(thousands)	 	HPUs
	$44
	 	 	32.85	%	 	 	0.00	%	 	$	4,087,976	 	 	 	50	 
	$46
	 	 	38.04	%	 	 	1.24	%	 	$	4,087,976	 	 	 	55,028	 
	$48
	 	 	43.23	%	 	 	6.43	%	 	$	4,087,976	 	 	 	273,716	 
	$50
	 	 	48.42	%	 	 	11.62	%	 	$	4,087,976	 	 	 	474,910	 
	$52
	 	 	53.61	%	 	 	16.81	%	 	$	4,087,976	 	 	 	660,627	 
	$54
	 	 	58.80	%	 	 	22.00	%	 	$	4,087,976	 	 	 	832,587	 
	$56
	 	 	63.99	%	 	 	27.19	%	 	$	4,087,976	 	 	 	992,264	 
	$58
	 	 	69.17	%	 	 	32.37	%	 	$	4,087,976	 	 	 	1,065,180	 






V-I-1









 





ANNEX II TO

EXHIBIT V



THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION, UNLESS THE TRANSFEROR DELIVERS TO AIMCO
PROPERTIES, L.P. AN OPINION OF COUNSEL, IN FORM AND SUBSTANCE SATISFACTORY TO THE PARTNERSHIP, TO
THE EFFECT THAT THE PROPOSED SALE, TRANSFER OR OTHER DISPOSITION MAY BE EFFECTED WITHOUT
REGISTRATION UNDER THE ACT AND UNDER APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS. IN ADDITION,
THE LIMITED PARTNERSHIP INTEREST EVIDENCED BY THIS CERTIFICATE MAY BE SOLD OR OTHERWISE TRANSFERRED
ONLY IN COMPLIANCE WITH THE RESTRICTIONS ON TRANSFER SET FORTH IN THE AGREEMENT OF LIMITED
PARTNERSHIP OF AIMCO PROPERTIES, L.P., DATED AS OF JULY 29, 1994, AS AMENDED, A COPY OF WHICH MAY
BE OBTAINED FROM AIMCO-GP, INC., THE GENERAL PARTNER, AT ITS PRINCIPAL EXECUTIVE OFFICE.



THIS CERTIFICATE EVIDENCES AN INTEREST IN AIMCO PROPERTIES, L.P. AND SHALL BE A SECURITY FOR
PURPOSES OF ARTICLE 8 OF THE UNIFORM COMMERCIAL CODE.




			
	 	 	 
	                     Units
	 	Certificate Number                     






AIMCO PROPERTIES, L.P.

FORMED UNDER THE LAWS OF THE STATE OF DELAWARE

CLASS IX HIGH PERFORMANCE PARTNERSHIP UNITS




          This certifies that                      is the owner of ___Class IX High Performance
Partnership Units of AIMCO Properties, L.P., a Delaware limited partnership. This Certificate and
the Class IX High Performance Partnership Units represented hereby are issued and shall be held
subject to all of the provisions of the Agreement of Limited Partnership of AIMCO Properties, L.P.,
as amended and/or supplemented from time to time.




          IN WITNESS WHEREOF, the General Partner of AIMCO Properties, L.P. has caused this Certificate
to be signed by an authorized person on this ___day of ___, ___.




	 	 	 	 	 	 	 
	 

	 	By: AIMCO
	 	-GP, Inc.,	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 






V-II-1









 






[REVERSE OF CERTIFICATE]




     For Value Received,                                          hereby sells, assigns and transfers unto                                         


 



 




          Class IX High Performance Partnership Units represented by the Certificate, and does hereby
irrevocably constitute and appoint the General Partner of AIMCO Properties, L.P. as its Attorney to
transfer said Class IX High Performance Partnership Units on the books of AIMCO Properties, L.P.
with full power of substitution in the premises.




	 	 	 	 	 	 	 
	Dated:                                         

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 






V-II-2









 





EXHIBIT W




PARTNERSHIP UNIT DESIGNATION OF THE

SERIES A COMMUNITY REINVESTMENT ACT PERPETUAL

PARTNERSHIP PREFERRED UNITS

OF AIMCO PROPERTIES, L.P.




     1. Number of Units and Designation.



          A class of Partnership Preferred Units is hereby designated as “Series A Community
Reinvestment Act Perpetual Partnership Preferred Units” (the “Series A CRA Partnership Preferred
Units”), and the number of Partnership Preferred Units constituting such class shall be 240.




     2. Definitions.



          For purposes of the Series A CRA Partnership Preferred Units, the following terms shall have
the meanings indicated in this Section 2, and capitalized terms used and not otherwise defined
herein shall have the meanings assigned thereto in the Agreement:




          “Agreement” shall mean the Agreement of Limited Partnership of the Partnership, as amended,
supplemented or restated from time to time.




          “Series A CRA Partnership Preferred Unit” means a Partnership Preferred Unit with the
designations, preferences and relative, participating, optional or other special rights, powers and
duties as are set forth in this Exhibit. It is the intention of the General Partner that each
Series A CRA Partnership Preferred Unit shall be substantially the economic equivalent of one share
of Series A CRA Preferred Stock.




          “Series A CRA Preferred Stock” means the Series A Community Reinvestment Act Perpetual
Preferred Stock, par value $0.01 per share, of the Previous General Partner.




          “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, or any
successor statute thereto. Reference to any provision of the Code shall mean such provision as in
effect from time to time, as the same may be amended, and any successor thereto, as interpreted by
any applicable regulations or other administrative pronouncements as in effect from time to time.




          “CRA” shall mean the Community Reinvestment Act of 1977, as amended from time to time.




          “Distribution Payment Date” shall mean any date on which cash dividends are paid on all
outstanding shares of the Series A CRA Preferred Stock.




          “Junior Partnership Units” shall have the meaning set forth in paragraph (c) of Section 7 of
this Exhibit.




          “Parity Partnership Units” shall have the meaning set forth in paragraph (b) of Section 7 of
this Exhibit.




          “Partnership” shall mean AIMCO Properties, L.P., a Delaware limited partnership.




          “Remarketing Date” shall mean any date on which a remarketing of the Series A CRA Preferred
Stock is completed.




          “Senior Partnership Units” shall have the meaning set forth in paragraph (a) of Section 7 of
this Exhibit.




W-1









 








     3. Distributions.



          On every Distribution Payment Date, the holders of Series A CRA Partnership Preferred Units
shall be entitled to receive distributions payable in cash in an amount per Series A CRA
Partnership Preferred Unit equal to the per share dividend payable on the Series A CRA Preferred
Stock on such Distribution Payment Date. Each such distribution shall be payable to the holders of
record of the Series A CRA Partnership Preferred Units, as they appear on the records of the
Partnership at the close of business on the record date for the dividend payable with respect to
the Series A CRA Preferred Stock on such Distribution Payment Date. Holders of Series A CRA
Partnership Preferred Units shall not be entitled to any distributions on the Series A CRA
Partnership Preferred Units, whether payable in cash, property or stock, except as provided herein.




     4. Liquidation Preference.



          (a) In the event of any liquidation, dissolution or winding up of the Partnership, whether
voluntary or involuntary, before any payment or distribution of the Partnership (whether capital,
surplus or otherwise) shall be made to or set apart for the holders of Junior Partnership Units,
the holders of Series A CRA Partnership Preferred Units shall be entitled to receive Five Hundred
Thousand Dollars ($500,000.00) per Series A CRA Partnership Preferred Unit (the “Liquidation
Preference”), plus an amount per Series A CRA Partnership Preferred Unit equal to all dividends
(whether or not declared or earned) accumulated, accrued and unpaid on one share of Series A CRA
Preferred Stock to the date of final distribution to such holders; but such holders shall not be
entitled to any further payment. Until the holders of the Series A CRA Partnership Preferred Units
have been paid the Liquidation Preference in full, plus an amount equal to all dividends (whether
or not declared or earned) accumulated, accrued and unpaid on the Series A CRA Preferred Stock to
the date of final distribution to such holders, no payment shall be made to any holder of Junior
Partnership Units upon the liquidation, dissolution or winding up of the Partnership. If, upon any
liquidation, dissolution or winding up of the Partnership, the assets of the Partnership, or
proceeds thereof, distributable among the holders of Series A CRA Partnership Preferred Units shall
be insufficient to pay in full the preferential amount aforesaid and liquidating payments on any
Parity Partnership Units, then such assets, or the proceeds thereof, shall be distributed among the
holders of Series A CRA Partnership Preferred Units and any such Parity Partnership Units ratably
in the same proportion as the respective amounts that would be payable on such Series A CRA
Partnership Preferred Units and any such other Parity Partnership Units if all amounts payable
thereon were paid in full. For the purposes of this Section 4, (i) a consolidation or merger of
the Partnership with one or more partnerships, or (ii) a sale or transfer of all or substantially
all of the Partnership’s assets shall not be deemed to be a liquidation, dissolution or winding up,
voluntary or involuntary, of the Partnership.




          (b) Upon any liquidation, dissolution or winding up of the Partnership, after payment shall
have been made in full to the holders of Series A CRA Partnership Preferred Units and any Parity
Partnership Units, as provided in this Section 4, any other series or class or classes of Junior
Partnership Units shall, subject to the respective terms thereof, be entitled to receive any and
all assets remaining to be paid or distributed, and the holders of the Series A CRA Partnership
Preferred Units and any Parity Partnership Units shall not be entitled to share therein.




     5. Redemption.



          Series A CRA Partnership Preferred Units shall be redeemable by the Partnership as follows:




          (a) At any time that the Previous General Partner exercises its right to redeem all or any of
the shares of Series A CRA Preferred Stock, the General Partner shall cause the Partnership to
redeem an equal number of Series A CRA Partnership Preferred Units, at a redemption price per
Series A CRA Partnership Preferred Unit payable in cash and equal to the same price per share paid
by the Previous General Partner to redeem the Series A CRA Preferred Stock. In the event of a
redemption of Series A CRA Partnership Preferred Units, if the redemption date occurs after a
dividend record date for the Series A CRA Preferred Stock and on or prior to the related
Distribution Payment Date, the distribution payable on such Distribution Payment Date in respect of
such Series A CRA Partnership Preferred Units called for redemption shall be payable on such
Distribution Payment Date to the holders of record of such Series A CRA Partnership Preferred Units
on the applicable dividend record date, and shall not be payable as part of the redemption price
for such Series A CRA Partnership Preferred Units.




W-2









 








          (b) If the Partnership shall redeem Series A CRA Partnership Preferred Units pursuant to
paragraph (a) of this Section 5, from and after the redemption date (unless the Partnership shall
fail to make available the amount of cash necessary to effect such redemption), (i) except for
payment of the redemption price, the Partnership shall not make any further distributions on the
Series A CRA Partnership Preferred Units so called for redemption, (ii) said units shall no longer
be deemed to be outstanding, and (iii) all rights of the holders thereof as holders of Series A CRA
Partnership Preferred Units of the Partnership shall cease except the rights to receive the cash
payable upon such redemption, without interest thereon; provided, however, that if the redemption
date occurs after the dividend record date for the Series A CRA Preferred Stock and on or prior to
the related Distribution Payment Date, the full distribution payable on such Distribution Payment
Date in respect of such Series A CRA Partnership Preferred Units called for redemption shall be
payable on such Distribution Payment Date to the holders of record of such Series A CRA Partnership
Preferred Units on the applicable dividend record date notwithstanding the prior redemption of such
Series A CRA Partnership Preferred Units. No interest shall accrue for the benefit of the holders
of the Series A CRA Partnership Preferred Units to be redeemed on any cash set aside by the
Partnership.




          (c) If fewer than all the outstanding Series A CRA Partnership Preferred Units are to be
redeemed, units to be redeemed shall be selected by the Partnership from outstanding Series A CRA
Partnership Preferred Units not previously called for redemption by any method determined by the
General Partner in its discretion. Upon any such redemption, the General Partner shall amend
Exhibit A to the Agreement as appropriate to reflect such redemption.




     6. Status of Reacquired Units.



          All Series A CRA Partnership Preferred Units which shall have been issued and reacquired in
any manner by the Partnership shall be deemed cancelled.




     7. Ranking.



          Any class or series of Partnership Units of the Partnership shall be deemed to rank:




          (a) prior or senior to the Series A CRA Partnership Preferred Units, as to the payment of
distributions and as to distributions of assets upon liquidation, dissolution or winding up, if the
holders of such class or series shall be entitled to the receipt of distributions and of amounts
distributable upon liquidation, dissolution or winding up, as the case may be, in preference or
priority to the holders of Series A CRA Partnership Preferred Units (“Senior Partnership Units”);




          (b) on a parity with the Series A CRA Partnership Preferred Units, as to the payment of
distributions and as to distribution of assets upon liquidation, dissolution or winding up, whether
or not the distribution rates, distribution payment dates or redemption or liquidation prices per
unit or other denomination thereof be different from those of the Series A CRA Partnership
Preferred Units if (i) such class or series of Partnership Units shall be Class G Partnership
Preferred Units, Class T Partnership Preferred Units, Class U Partnership Preferred Units, Class V
Partnership Preferred Units, Class W Partnership Preferred Units, Class Y Partnership Preferred
Units, Class One Partnership Preferred Units, Class Two Partnership Preferred Units, Class Three
Partnership Preferred Units, Class Four Partnership Preferred Units, Class Six Partnership
Preferred Units or Class Seven Partnership Preferred Units, or (ii) the holders of such class or
series of Partnership Units and the Series A CRA Partnership Preferred Units shall be entitled to
the receipt of distributions and of amounts distributable upon liquidation, dissolution or winding
up in proportion to their respective amounts of accrued and unpaid distributions per unit or other
denomination or liquidation preferences, without preference or priority one over the other (the
Partnership Units referred to in clauses (i) and (ii) of this paragraph being hereinafter referred
to, collectively, as “Parity Partnership Units”); and




          (c) junior to the Series A CRA Partnership Preferred Units, as to the payment of distributions
and as to the distribution of assets upon liquidation, dissolution or winding up, if (i) such class
or series of Partnership Units shall be Partnership Common Units, Class I High Performance
Partnership Units, Class VII High Performance Partnership Units, Class VIII High Performance
Partnership Units, Class IX High Performance Partnership Units, Class Five Partnership Preferred
Units or Class Eight Partnership Preferred Units, or (ii) the holders of Series A CRA Partnership
Preferred Units shall be entitled to receipt of distributions or of amounts





W-3









 







distributable upon liquidation, dissolution or winding up, as the case may be, in preference
or priority to the holders of such class or series of Partnership Units (the Partnership Units
referred to in clauses (i) and (ii) of this paragraph being hereinafter referred to, collectively,
as “Junior Partnership Units”).




     8. Special Allocations.



          (a) Gross income and, if necessary, gain shall be allocated to the holders of Series A CRA
Partnership Preferred Units for any Fiscal Year (and, if necessary, subsequent Fiscal Years) to the
extent that the holders of Series A CRA Partnership Preferred Units receive a distribution on any
Series A CRA Partnership Preferred Units (other than an amount included in any redemption pursuant
to Section 5 hereof) with respect to such Fiscal Year.




          (b) If any Series A CRA Partnership Preferred Units are redeemed pursuant to Section 5 hereof,
for the Fiscal Year that includes such redemption (and, if necessary, for subsequent Fiscal Years)
(a) gross income and gain (in such relative proportions as the General Partner in its discretion
shall determine) shall be allocated to the holders of Series A CRA Partnership Preferred Units to
the extent that the redemption amounts paid or payable with respect to the Series A CRA Partnership
Preferred Units so redeemed exceeds the aggregate Capital Contributions (net of liabilities assumed
or taken subject to by the Partnership) per Series A CRA Partnership Preferred Unit allocable to
the Series A CRA Partnership Preferred Units so redeemed and (b) deductions and losses (in such
relative proportions as the General Partner in its discretion shall determine) shall be allocated
to the holders of Series A CRA Partnership Preferred Units to the extent that the aggregate Capital
Contributions (net of liabilities assumed or taken subject to by the Partnership) per Series A CRA
Partnership Preferred Unit allocable to the Series A CRA Partnership Preferred Units so redeemed
exceeds the redemption amount paid or payable with respect to the Series A CRA Partnership
Preferred Units so redeemed.




     9. Allocation of CRA Credits.



          Solely for CRA reporting purposes, the Partnership shall allocate to the holders of the Series
A CRA Partnership Preferred Units 100% of the value of assets owned directly or indirectly by the
Partnership which may be considered a “qualified investment” under the Community Reinvestment Act
of 1977, as amended from time to time.




     10. Restrictions on Ownership.



          The Series A CRA Partnership Preferred Units shall be owned and held solely by the General
Partner or the Special Limited Partner.




     11. General.



          (a) The ownership of Series A CRA Partnership Preferred Units may (but need not, in the sole
and absolute discretion of the General Partner) be evidenced by one or more certificates. The
General Partner shall amend Exhibit A to the Agreement from time to time to the extent necessary to
reflect accurately the issuance of, and subsequent conversion, redemption, or any other event
having an effect on the ownership of, Series A CRA Partnership Preferred Units.




          (b) The rights of the General Partner and the Special Limited Partner, in their capacity as
holders of the Series A CRA Partnership Preferred Units, are in addition to and not in limitation
of any other rights or authority of the General Partner or the Special Limited Partner,
respectively, in any other capacity under the Agreement or applicable law. In addition, nothing
contained herein shall be deemed to limit or otherwise restrict the authority of the General
Partner or the Special Limited Partner under the Agreement, other than in their capacity as holders
of the Series A CRA Partnership Preferred Units.





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