exv10w1








 




    Exhibit 10.1





 




    Agreement
    and Plan of Merger



 



    AGREEMENT AND PLAN OF MERGER (this
    “Agreement”), dated as of July 28, 2011,
    by and among Angeles Income Properties, Ltd. 6, a California
    limited partnership (“AIP”), AIMCO AIP 6 Merger
    Sub LLC, a Delaware limited liability company (the
    “Aimco Subsidiary”), Angeles Income Properties
    6, LP (“New AIP”), and Aimco Properties, L.P.,
    a Delaware limited partnership (“Aimco OP”).



 



    WHEREAS, Angeles Realty Corporation II, the managing general
    partner of AIP and New AIP (“ARC”), has
    determined that the merger of AIP into New AIP, a Delaware
    limited partnership, and the subsequent merger of the Aimco
    Subsidiary with and into New AIP, with New AIP as the surviving
    entity, in each case, on the terms set forth herein, are
    advisable, fair to and in the best interests of AIP and New AIP
    and their respective partners; and



 



    WHEREAS, Aimco OP is the sole member of the Aimco Subsidiary and
    the sole limited partner of New AIP; and



 



    WHEREAS, the Board of Directors of AIMCO-GP, Inc., the general
    partner of Aimco OP (“AIMCO-GP”), has
    determined that the merger of AIP into New AIP, and the
    subsequent merger of the Aimco Subsidiary with and into New AIP,
    with New AIP as the surviving entity, in each case, on the terms
    as set forth herein, are advisable, fair to and in the best
    interests of Aimco OP and its partners, and the Aimco
    Subsidiary; and



 



    WHEREAS, the parties desire to enter this Agreement to evidence
    the terms, provisions, representations, warranties, covenants
    and conditions upon which the Mergers (as defined below) will be
    consummated.



 



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



 



    Section 1.  The
    First Merger.  Subject to the terms and
    conditions set forth herein, AIP shall be merged with and into
    New AIP (the “First Merger”), with New AIP as
    the surviving entity (the “First Surviving
    Entity”). As soon as practicable after all of the
    conditions to the First Merger set forth herein have been
    satisfied, AIP and New AIP shall (i) execute a certificate
    of merger and cause such certificate to be filed with the
    Secretary of State of the State of California and
    (ii) execute a certificate of merger and cause such
    certificate to be filed with the Secretary of State of the State
    of Delaware. The First Merger shall become effective upon the
    filing of such certificates (the “First Effective
    Time”). At the First Effective Time, the First Merger
    shall have the effect provided by applicable law and this
    Agreement, including, but not limited to, the following
    consequences:



 



    (a) Certificate of Limited
    Partnership.  The certificate of limited
    partnership of New AIP in effect immediately prior to the First
    Effective Time shall be the certificate of limited partnership
    of the First Surviving Entity unless and until subsequently
    amended.



 



    (b) Partnership Agreement.  The
    limited partnership agreement of AIP in effect immediately prior
    to the First Effective Time, as amended as set forth on
    Exhibit A hereto, shall be the partnership agreement
    of the First Surviving Entity unless and until subsequently
    amended. The general partners and each limited partner of the
    First Surviving Entity shall have the rights under, be bound by
    and be subject to the terms and conditions of, such partnership
    agreement.



 



    (c) General Partner.  ARC shall be
    the managing general partner of the First Surviving Entity.



 



    (d) Conversion of Equity Interests.



 



    (i) Interests in AIP.  Each general
    partnership interest of AIP outstanding immediately prior to the
    First Effective Time and held by a general partner shall be
    converted into an equivalent general partnership interest in the
    First Surviving Entity (each new general partnership interest, a
    “New AIP GP Interest”). Each unit of limited
    partnership interest of AIP outstanding immediately prior to the
    First Effective Time shall be converted into an equivalent unit
    of limited partnership interest in the First Surviving Entity (a
    “New AIP Unit”).





    

    1








 







    (ii) Interests in New AIP.  The
    interest of each partner in New AIP immediately prior to the
    First Effective Time shall be cancelled.



 



    Section 2.  The
    Second Merger.  Subject to the terms and
    conditions set forth herein, immediately following the First
    Effective Time, the Aimco Subsidiary shall be merged with and
    into New AIP (the “Second Merger” and, together
    with the First Merger, the “Mergers”), with New
    AIP as the surviving entity (the “Second Surviving
    Entity”). As soon as practicable after all of the
    conditions to the Second Merger set forth herein have been
    satisfied, New AIP shall cause to be filed a certificate of
    merger with respect to the Second Merger with the Secretary of
    State of the State of Delaware. The Second Merger shall become
    effective upon the filing of such certificate (the
    “Second Effective Time”). At the Second
    Effective Time, the Second Merger shall have the effect provided
    by applicable law and this Agreement, including, but not limited
    to, the following consequences:



 



    (a) Certificate of Limited
    Partnership.  The certificate of limited
    partnership of New AIP in effect immediately prior to the Second
    Effective Time shall be the certificate of limited partnership
    of the Second Surviving Entity unless and until subsequently
    amended.



 



    (b) Partnership Agreement.  The
    limited partnership agreement of New AIP in effect immediately
    prior to the Second Effective Time shall be the partnership
    agreement of the Second Surviving Entity (the
    “Partnership Agreement”) unless and until
    subsequently amended. The general partners and each limited
    partner of the Second Surviving Entity shall have the rights
    under, be bound by and be subject to the terms and conditions
    of, the Partnership Agreement.



 



    (c) General Partners.  ARC shall be
    the managing general partner of the Second Surviving Entity.



 



    (d) Treatment of Limited Partners Interests in New
    AIP.



 



    (i) In connection with the Second Merger and in accordance
    with the procedures set forth in Section 2(d)(iii) hereto,
    each New AIP Unit outstanding immediately prior to the Second
    Effective Time, except New AIP Units held by limited partners
    who have perfected their appraisal rights pursuant to
    Exhibit B hereto, shall be converted into the right
    to receive, at the election of the holder thereof, either
    (x) $252.40 in cash (the “Cash
    Consideration”) or (y) a number of partnership
    common units (“OP Units”) of Aimco OP
    calculated by dividing $252.40 by the average closing price of
    Apartment Investment and Management Company common stock, as
    reported on the NYSE, over the ten consecutive trading days
    ending on the second trading day immediately prior to the date
    of the Second Effective Time (the “OP Unit
    Consideration,” and, together with the Cash
    Consideration, the “Merger Consideration”).



 



    (ii) Notwithstanding Section 2(d)(i), if Aimco OP
    determines that the law of the state or other jurisdiction in
    which a holder of New AIP Units resides would prohibit the
    issuance of OP Units in that state or jurisdiction, or that
    the registration or qualification in that state or other
    jurisdiction would be prohibitively costly (each such state or
    jurisdiction, a “Specified Jurisdiction”), then
    such holder will only be entitled to receive the Cash
    Consideration for each New AIP Unit.



 



    (iii) Aimco OP shall prepare a form of election (the
    “Election Form”) describing the Second Merger,
    pursuant to which each holder of New AIP Units will have the
    right to elect to receive either the Cash Consideration or the
    OP Unit Consideration (subject to Section 2(d)(ii)).
    Aimco OP shall mail or cause to be mailed an Election Form to
    each holder of New AIP Units, together with any other materials
    that Aimco OP determines to be necessary or prudent, no later
    than ten (10) days after the Second Effective Time. An
    election to receive the Cash Consideration or the OP Unit
    Consideration shall be effective only if a properly executed
    Election Form is received by Aimco OP or its designees prior to
    5:00 p.m., New York Time, on the day that is thirty
    (30) days after the mailing of such Election Form by Aimco
    OP. If a holder of New AIP Units fails to return a duly
    completed Election Form within the time period specified in the
    Election Form, such holder shall be deemed to have elected to
    receive the Cash Consideration. In addition, each holder of New
    AIP Units that resides in a Specified Jurisdiction will be
    deemed to have elected the Cash Consideration. AIP, New AIP, the
    Aimco Subsidiary and Aimco OP agree that holders of New AIP
    Units shall have the right to revoke any election made in
    connection with the Second Merger at any time prior to the
    expiration of the time period stated in the Election Form.






    

    2








 







    Aimco OP and ARC, by mutual agreement, shall have the right to
    make rules, not inconsistent with the terms of this Agreement,
    governing the validity of Election Forms and the issuance and
    delivery of the Merger Consideration, as applicable.



 



    (e) Treatment of General Partners’
    Interests.  Each New AIP GP Interest
    outstanding immediately prior to consummation of the Second
    Merger shall remain outstanding and unchanged, with all of the
    rights set forth in the Partnership Agreement.



 



    (f) Treatment of Interests in the Aimco
    Subsidiary.  The entire membership interest in
    the Aimco Subsidiary immediately prior to the Second Effective
    Time shall be converted into one hundred (100) New AIP
    Units of the Second Surviving Entity.



 



    Section 3.  Appraisal
    Rights.  In connection with the First Merger,
    none of the partners in AIP or New AIP will have any
    dissenters’ appraisal rights. In connection with the Second
    Merger, the holders of New AIP Units immediately prior to the
    Merger shall have the appraisal rights set forth in Exhibit
    B hereto.



 



    Section 4.  Covenants.  Aimco
    OP agrees to pay for, or reimburse AIP and New AIP for, all
    expenses incurred by AIP and New AIP in connection with the
    Mergers and the transactions contemplated hereby. Aimco OP
    agrees to pay cash or issue and deliver OP Units to the
    former holders of New AIP Units, in accordance with
    Section 2(d) of this Agreement.



 



    Section 5.  Conditions
    to the Mergers.



 



    (a) Neither the first merger or the second merger should
    occur unless and until such merger has been approved or
    consented to by a majority in interest of the limited
    partnership interests of AIP.



 



    (b) Notwithstanding any provisions of this Agreement to the
    contrary, none of the parties hereto shall be required to
    consummate the transactions contemplated hereby if any
    third-party consent, authorization or approval that any of the
    parties hereto deem necessary or desirable in connection with
    this Agreement, or the consummation of the transactions
    contemplated hereby, has not been obtained or received.



 



    Section 6.  Tax
    Treatment.



 



    (a) First Merger.  The parties
    hereto acknowledge and agree that for federal income tax
    purposes, the First Merger will be treated as follows:



 



    (i) The First Merger shall not be treated as a realization
    event, and in accordance therewith, the First Surviving Entity
    shall be treated as the continuation of AIP for federal income
    tax purposes; and



 



    (ii) In accordance with the foregoing, the tax bases of the
    general partners and limited partners of the First Surviving
    Entity in their First Surviving Entity interests and the
    respective initial capital account balances of the general
    partners and limited partners of the First Surviving Entity
    immediately following the First Effective Time shall be the same
    as those of the general partners and the limited partners of AIP
    immediately prior to the First Effective Time.



 



    (b) Second Merger.  The parties
    hereto intend and agree that, for Federal income tax purposes,
    (i) any payment of cash for New AIP Units shall be treated
    as a sale of such New AIP Units by such holder and a purchase of
    such New AIP Units by Aimco OP for the cash so paid under the
    terms of this Agreement, and (ii) each such holder of New
    AIP Units who accepts cash explicitly agrees and consents to
    such treatment. Furthermore, the parties hereto intend and agree
    that, for Federal income tax purposes, (x) any exchange of
    New AIP Units for OP Units under the terms of this
    Agreement shall be treated as the contribution of New AIP Units
    to Aimco OP in exchange for Aimco OP Units, in accordance
    with Section 721 of the Internal Revenue Code of 1986, as
    amended, and (y) each such holder of New AIP Units who
    accepts OP Units explicitly agrees and consents to such
    treatment. Any cash
    and/or
    OP Units to which a holder of New AIP Units is entitled
    pursuant to this Agreement shall be paid only after the receipt
    of a consent from such holder that, for Federal income tax
    purposes, the receipt of cash
    and/or
    OP Units shall be treated as described in this
    Section 6(b).





    

    3








 







    Section 7.  Further
    Assurances.



 



    (a) From time to time, as and when required by the First
    Surviving Entity or by its successors and assigns, there shall
    be executed and delivered on behalf of AIP such deeds and other
    instruments, and there shall be taken or caused to be taken by
    AIP all such further actions, as shall be appropriate or
    necessary in order to vest, perfect or confirm, of record or
    otherwise, in the First Surviving Entity the title to and
    possession of all property, interests, assets, rights,
    privileges, immunities, powers, franchises and authority of AIP,
    and otherwise to carry out the purposes of this Agreement, and
    the officers and directors of ARC are fully authorized in the
    name and on behalf AIP or otherwise to take any and all such
    action and to execute and deliver any and all such deeds and
    other instruments.



 



    (b) From time to time, as and when required by the Second
    Surviving Entity or by its successors and assigns, there shall
    be executed and delivered on behalf of the Aimco Subsidiary such
    deeds and other instruments, and there shall be taken or caused
    to be taken by the Aimco Subsidiary all such further actions, as
    shall be appropriate or necessary in order to vest, perfect or
    confirm, of record or otherwise, in the Second Surviving Entity
    title to and possession of all property, interests, assets,
    rights, privileges, immunities, powers, franchises and authority
    of the Aimco Subsidiary, and otherwise to carry out the purposes
    of this Agreement, and the officers and directors of ARC are
    fully authorized in the name and on behalf of Aimco Subsidiary
    or otherwise to take any and all such action and to execute and
    deliver any and all such deeds and other instruments.



 



    Section 8.  Amendment.  Subject
    to applicable law, this Agreement may be amended, modified or
    supplemented by written agreement of the parties hereto at any
    time prior to the consummation of the Mergers with respect to
    any of the terms contained herein.



 



    Section 9.  Abandonment.  At
    any time prior to consummation of the Mergers, this Agreement
    may be terminated and the Mergers may be abandoned without
    liability to any party hereto by any of the Aimco Subsidiary,
    Aimco OP, AIP or New AIP, in each case, acting in its sole
    discretion and for any reason or for no reason, notwithstanding
    approval of this Agreement by any of the members of the Aimco
    Subsidiary, the partners of AIP or the general partner of Aimco
    OP.



 



    Section 10.  Governing
    Law.  This Agreement shall be governed by and
    construed in accordance with the laws of the State of Delaware,
    without reference to the conflict of law provisions thereof.



 



    Section 11.  No
    Third-Party Beneficiaries.  No provision of
    this Agreement is intended to confer upon any person, entity, or
    organization other than the parties hereto any rights or
    remedies hereunder, other than the appraisal rights given to
    holders of New AIP Units pursuant to Section 3.





    

    4








 







    IN WITNESS WHEREOF, the parties hereto have caused this
    Agreement to be executed as of the date first above written.



 



    ANGELES INCOME PROPERTIES, LTD. 6

    



 


			
	 	    By: 
	
    Angeles Realty Corporation II,





    Its Managing General Partner



 


			
	 	    By: 
	
    /s/  Trent
    A. Johnson









    Name:     Trent A. Johnson



			
	 	    Title: 
	
    Vice President and Assistant General Counsel




 



    AIMCO AIP 6 MERGER SUB LLC



 


			
	 	    By: 
	
    Aimco Properties, L.P.,

    Its Sole Member





 


			
	 	    By: 
	
    AIMCO-GP, Inc.

    Its General Partner









 


			
	 	    By: 
	
    /s/  Trent
    A. Johnson









    Name:     Trent A. Johnson



			
	 	    Title: 
	
    Vice President and Assistant General Counsel




 



    ANGELES INCOME PROPERTIES 6, LP

    



 


			
	 	    By: 
	
    Angeles Realty Corporation II,





    Its Managing General Partner



 


			
	 	    By: 
	
    /s/  Trent
    A. Johnson









    Name:     Trent A. Johnson



			
	 	    Title: 
	
    Vice President and Assistant General Counsel




 



    AIMCO PROPERTIES, L.P.



 


			
	 	    By: 
	
    AIMCO-GP, Inc.,





    Its General Partner



 


			
	 	    By: 
	
    /s/  Trent
    A. Johnson









    Name:     Trent A. Johnson



			
	 	    Title: 
	
    Vice President and Assistant General Counsel




 



    [Signature Page — Merger Agreement]





    

    5








 






 




    EXHIBIT A



 




    FORM OF
    AMENDMENT

    TO

    AGREEMENT OF LIMITED PARTNERSHIP

    OF

    ANGELES INCOME PROPERTIES, LTD. 6



 



    This AMENDMENT TO THE AGREEMENT OF LIMITED PARTNERSHIP OF
    ANGELES INCOME PROPERTIES, LTD. 6 (this
    “Amendment”) is entered into as
    of          ,
    2011 by and among Angeles Realty Corporation II, a California
    corporation, in its capacity as managing general partner (the
    “Managing General Partner”), and each of the
    Limited Partners. All capitalized terms used in this Amendment
    but not otherwise defined herein shall have the respective
    meanings given to them in the Partnership Agreement (as defined
    below).



 




    Recitals



 



    WHEREAS, Angeles Income Properties, Ltd. 6, a California limited
    partnership (the “Partnership”), is governed
    pursuant to the terms of that certain Agreement of Limited
    Partnership, dated June 1, 1987, and as further amended to
    date (the “Partnership Agreement”);



 



    WHEREAS, the Partnership and Angeles Income Properties 6, LP, a
    Delaware limited partnership (the “Delaware
    Partnership”), are parties to an Agreement and Plan of
    Merger, dated as of July 28, 2011 (the “Merger
    Agreement”);



 



    WHEREAS, pursuant to the Merger Agreement, the Partnership will
    be merged with and into the Delaware Partnership, with the
    Delaware Partnership as the surviving entity;



 



    WHEREAS, pursuant to the Merger Agreement, at the effective time
    of the merger, the Partnership Agreement, as further amended by
    this Amendment, will become the partnership agreement of the
    Delaware Partnership; and



 



    WHEREAS, the merger will be effected upon the approval or
    consent of (i) the managing general partner of each of the
    Partnership and the Delaware Partnership, and (ii) a
    majority in interest of the limited partners of each of the
    Partnership and the Delaware Partnership.



 



    NOW, THEREFORE, in consideration of the premises, the agreement
    of the parties herein contained, and other good and valuable
    consideration, the receipt and sufficiency of which are hereby
    acknowledged and confessed, the parties hereby agree as follows:



 



    1. Amendments to the Partnership
    Agreement.  At the effective time of the
    merger, the Partnership Agreement shall be amended as follows:



 



    (a) All occurrences of the phrase “Angeles Income
    Properties, Ltd. 6” in the Partnership Agreement shall be
    replaced with the phrase “Angeles Income Properties 6,
    LP.”



 



    (b) All references in the Partnership Agreement to any law,
    statute or regulation of the state of California shall be deemed
    to refer to the corresponding laws, statutes and regulations of
    the state of Delaware.



 



    (c) All occurrences of the phrase “the State of
    California” in the Partnership Agreement shall be replaced
    with the phrase “the State of Delaware.”



 



    (d) Article 1 Section 1.4 of the Partnership
    Agreement is hereby amended and restated to read in its entirety
    as follows:



 



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



 



    (e) Article 2 Section 2.2 of the Partnership
    Agreement is hereby amended and restated to read in its entirety
    as follows:



 



    “2.2 Name.  The name of the
    Partnership shall continue to be Angeles Income Properties 6,
    LP, a Delaware Limited Partnership. The Partnership may use such
    name with or without the words “a






    

    6








 







    Delaware Limited Partnership,” as state law may require.
    The General Partner in its sole discretion may change the name
    of the Partnership at any time and from time to time.”



 



    (f) Article 4 of the Partnership Agreement is hereby
    amended and restated to read in its entirety as follows:



 




    “ARTICLE 4

    PRINCIPAL PLACE OF BUSINESS



 



    The Principal place of business of the Partnership shall be 55
    Beattie Place, P.O. Box 1089, Greenville, South
    Carolina 29602, or such other place or places as the General
    Partner may hereafter determine.”



 



    (g) Article 5 of the Partnership Agreement is hereby
    amended and restated to read in its entirety as follows:



 




    “ARTICLE 5

    TERM



 



    Angeles Income Properties, Ltd. 6 was originally formed as a
    limited partnership (the “California
    Partnership”) pursuant to the provisions of the
    California Uniform Limited Partnership Act, upon the terms and
    conditions set forth in an agreement made as of June 1,
    1987. Pursuant to an Agreement and Plan of Merger, dated
    July 28, 2011, by and between the California Partnership
    and Angeles Income Properties 6, LP, a Delaware limited
    partnership (the “Delaware Partnership”), the
    California Partnership was merged with and into the Delaware
    Partnership, with the Delaware Partnership as the surviving
    entity (the “Surviving Entity”) in the merger
    (the “Merger”). At the effective time of the
    Merger (the “Effective Time”), the Merger had
    the effect provided by applicable law, and the following
    consequences: (a) the certificate of limited partnership of
    the Delaware Partnership in effect immediately prior to the
    Effective Time became the certificate of limited partnership of
    the Surviving Entity; (b) the limited partnership agreement
    of the California Partnership in effect immediately prior to the
    Effective Time, as amended as set forth on Exhibit A
    to the Merger Agreement, became the partnership agreement of the
    Surviving Entity (as so amended, the “Partnership
    Agreement”); (c) Angeles Realty Corporation II, a
    California corporation, remained as sole Managing General
    Partner of the Surviving Entity, and its interest in the
    California Partnership immediately prior to the Effective Time
    was converted into an equivalent interest in the Surviving
    Entity; (d) each general partnership interest of the
    California Partnership immediately prior to the Effective Time
    was converted into an equivalent general partnership interest in
    the Surviving Entity; (e) each unit of limited partnership
    interest of the California Partnership immediately prior to the
    Effective Time was converted into an equivalent unit of limited
    partnership interest in the Surviving Entity; and (f) the
    interests of each partner of the Delaware Partnership
    immediately prior to the Effective Time was cancelled.
    References herein to the “Partnership” are to the
    California Partnership prior to the Merger and to the Delaware
    Partnership, as the Surviving Entity in the Merger, from and
    after the Effective Time. The Partnership shall continue in
    existence until the close of Partnership business on
    December 31, 2037, unless the Partnership has been sooner
    terminated as herein provided or as provided by law.”



 



    2. Miscellaneous.



 



    (a) Effect of Amendment.  In the
    event of any inconsistency between the terms of the Partnership
    Agreement and the terms of this Amendment, the terms of this
    Amendment shall prevail. In the event of any conflict of
    apparent conflict between any of the provisions of the
    Partnership Agreement as amended by this Amendment, such
    conflicting provisions shall be reconciled and construed to give
    effect to the terms and intent of this Amendment.



 



    (b) Ratification.  Except as
    otherwise expressly modified hereby, the Partnership Agreement
    shall remain in full force and effect, and all of the terms and
    provisions of the Partnership Agreement, as herein modified, are
    hereby ratified and reaffirmed.



 



    (c) Governing Law.  THIS AMENDMENT
    SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE
    WITH THE LAWS OF THE STATE OF DELAWARE.





    

    7








 








    EXHIBIT B

    

    





    Appraisal
    Rights of Limited Partners



 



    Capitalized terms used but not defined herein shall have the
    respective meanings ascribed thereto in the Agreement and Plan
    of Merger, dated as of July 28, 2011 (the “Merger
    Agreement”), by and among Angeles Income Properties,
    Ltd. 6, a California limited partnership, AIMCO AIP 6 Merger Sub
    LLC, a Delaware limited liability company, Angeles Income
    Properties 6, LP, and Aimco Properties, L.P., a Delaware limited
    partnership. In connection with the Merger, limited partners of
    New AIP shall have the following appraisal rights:



 



    (a) Any limited partner who holds New AIP Units on the
    effective date of the Merger who has not consented to the Merger
    (the “Nonconsenting Limited Partners”) and who
    has otherwise complied with paragraph (b) hereof shall be
    entitled to an appraisal by arbitration of the fair value of the
    Nonconsenting Limited Partner’s New AIP Units. This
    arbitration shall be conducted in Denver, Colorado, in
    accordance with the Commercial Arbitration Rules of the American
    Arbitration Association (“AAA”), excluding the
    Procedures for Large, Complex Commercial Disputes, by a single
    arbitrator selected by Aimco OP from a panel of AAA arbitrators
    who are qualified to value investment interests in commercial
    real estate. Any action for judicial review or enforcement of
    the arbitration award shall be brought in a court of competent
    jurisdiction located in Denver, Colorado.



 



    (b) Within 10 days after the effective date of the
    Merger, Aimco OP shall notify each of the Nonconsenting Limited
    Partners of the consummation of the Merger, the effective date
    of the Merger and that appraisal rights are available for any or
    all New AIP Units held by Nonconsenting Limited Partners, and
    shall include in such notice a copy of this Exhibit. Such notice
    shall include an Election Form pursuant to which Nonconsenting
    Limited Partners may elect an appraisal by arbitration of the
    fair value of their New AIP Units pursuant to paragraph
    (a) hereof. Any limited partner who holds New AIP Units on
    the effective date of the Merger and who has not consented to
    the Merger shall be entitled to receive such notice and may,
    within 30 days after the date of mailing of such notice
    (such 30th day being the “Election
    Deadline”), demand from Aimco OP the appraisal of his
    or her New AIP Units by making the appropriate election in the
    Election Form in accordance with the instructions thereto. Each
    completed Election Form must be delivered to the address, and
    within the time period, specified in the instructions to the
    Election Form. If a Nonconsenting Limited Partner fails to
    properly complete an Election Form or return it to the correct
    address within the specified time period, such Nonconsenting
    Limited Partner shall be deemed to have elected not to seek an
    appraisal of his or her New AIP Units, and will be deemed to
    have elected the Cash Consideration.



 



    (c) At any time prior to the Election Deadline, any
    Nonconsenting Limited Partner who has made a demand for
    appraisal of his or her New AIP Units shall have the right to
    withdraw his or her demand for appraisal and to accept the Cash
    Consideration payable pursuant to the Merger Agreement.
    Nonconsenting Limited Partners who wish to withdraw their
    demands must do so in writing delivered to Aimco Properties,
    L.P.,
    c/o Eagle
    Rock Proxy Advisors, LLC, by mail at 12 Commerce Drive,
    Cranford, New Jersey, 07016, or by fax at
    (908) 497-2349.
    At any time within 20 days after the Election Deadline, any
    Nonconsenting Limited Partner who has complied with the
    requirements of subsections (a) and (b) hereof, upon
    written request, shall be entitled to receive from Aimco OP a
    statement setting forth the aggregate number of New AIP Units
    with respect to which Nonconsenting Limited Partners have made
    demands for appraisal and the aggregate number of holders of
    such New AIP Units. Such written statement shall be mailed to
    the Nonconsenting Limited Partner within 10 days after such
    Nonconsenting Limited Partner’s written request for such a
    statement is received by Aimco OP or within 20 days after
    the Election Deadline, whichever is later.



 



    (d) Upon the submission of any such demand by a
    Nonconsenting Limited Partner, Aimco OP shall, within
    40 days after the Election Deadline, submit to the
    arbitrator a duly verified list containing the names and
    addresses of all Nonconsenting Limited Partners who have
    demanded payment for their New AIP Units and with whom
    agreements as to the value of their New AIP Units have not been
    reached with Aimco OP. The arbitrator shall give notice of the
    time and place fixed for the hearing of such demand by
    registered or certified mail to Aimco OP and to the
    Nonconsenting Limited Partners shown on the list at the
    addresses therein stated. The forms of the notices shall be
    approved by the arbitrator, and the costs of the preparation and
    mailing thereof shall be borne by Aimco OP.



 



    (e) At the hearing on such demand, the arbitrator shall
    determine as to each of the Nonconsenting Limited Partners
    whether the Nonconsenting Limited Partner is entitled to
    appraisal rights hereunder.





    

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    (f) After determining the Nonconsenting Limited Partners
    entitled to an appraisal, the arbitrator shall appraise the New
    AIP Units, determining their fair value, as of the date of the
    Merger, exclusive of any element of value arising from the
    accomplishment or expectation of the Merger, together with
    interest, if any, to be paid upon the amount determined to be
    the fair value. In determining such fair value, the arbitrator
    shall take into account all factors relevant to the issue of
    fair value of the New AIP Units, using the legal standard of
    fair value that would apply if the Nonconsenting Limited Partner
    were a stockholder in a corporation entitled to appraisal rights
    as a result of a corporate merger under the corporation laws of
    the state of Delaware. Unless the arbitrator in his or her
    discretion determines otherwise for good cause shown, interest
    from the effective date of the Merger through the date of
    payment of the judgment shall be compounded quarterly and shall
    accrue at 5% over the Federal Reserve discount rate (including
    any surcharge), as established from time to time during the
    period between the effective date of the Merger and the date of
    payment of the judgment. Upon application by Aimco OP or by any
    Nonconsenting Limited Partner entitled to participate in the
    appraisal proceeding, the arbitrator may, in his or her
    discretion, proceed with the appraisal prior to the final
    determination of the Nonconsenting Limited Partners’
    entitlement to appraisal rights hereunder. Any Nonconsenting
    Limited Partner whose name appears on the list submitted by
    Aimco OP pursuant to paragraph (d) hereof may participate
    fully in all proceedings until it is finally determined that
    such Nonconsenting Limited Partner is not entitled to appraisal
    rights hereunder.



 



    (g) The arbitrator shall direct the payment of the fair
    value of the New AIP Units (which will be paid only in cash),
    together with interest, if any, by Aimco OP to the Nonconsenting
    Limited Partners entitled thereto. Payment shall be so made to
    each such Nonconsenting Limited Partner upon the receipt by
    Aimco OP of the written consent from such Nonconsenting Limited
    Partner that, for federal income tax purposes, the issuance of
    cash for the New AIP Units shall be treated as a sale of the New
    AIP Units by the owner and a purchase of such New AIP Units by
    Aimco OP for the cash consideration so paid under the terms of
    the Merger Agreement in accordance with the guidelines set forth
    in Treas. Reg.
    Sections 1.708-1(c)(3)
    and 1.708-1(c)(4) and the release described in (i) hereof.



 



    (h) The costs of the proceeding may be determined by the
    arbitrator and taxed upon the parties as the arbitrator deems
    equitable in the circumstances. Upon application of a
    Nonconsenting Limited Partner, the arbitrator may order all or a
    portion of the expenses incurred by any Nonconsenting Limited
    Partner in connection with the appraisal proceeding, including,
    without limitation, reasonable attorney’s fees and the fees
    and expenses of experts, to be charged pro rata against the
    value of all the interests entitled to an appraisal.



 



    (i) Any Nonconsenting Limited Partner who has made a demand
    for appraisal of his or her New AIP Units and who has not
    withdrawn the demand before the Election Deadline shall be
    deemed to have entered into a binding contract with Aimco OP to
    accept the fair value awarded by the arbitrator in exchange for
    his or her New AIP Units, plus any interest as provided herein.
    The award of fair value, plus any interest, to the Nonconsenting
    Limited Partners shall be exclusive of and in lieu of any other
    right, claim or remedy under state or federal law that the
    Nonconsenting Limited Partner may have with respect to his or
    her New AIP Units whether under the Merger Agreement or
    otherwise and whether against AIP, New AIP, ARC, Aimco-GP,
    Apartment Investment and Management Company, Aimco OP, or any
    other person or entity, and the Nonconsenting Limited Partner
    shall execute and deliver a release of all other such rights,
    claims and remedies in exchange for payment of the award.



 



    (j) From and after the effective date of the Merger, no
    Nonconsenting Limited Partner who has demanded appraisal rights
    as provided in paragraph (b) hereof shall be entitled to
    vote such New AIP Units for any purpose or to receive payment of
    distributions on such interests (except distributions payable as
    of a record date prior to the effective date of the Merger);
    provided, however, that if such Nonconsenting
    Limited Partner shall deliver to Aimco Properties, L.P.,
    c/o Eagle
    Rock Proxy Advisors, LLC, by mail at 12 Commerce Drive,
    Cranford, New Jersey, 07016, or by fax at
    (908) 497-2349,
    a written withdrawal of such Nonconsenting Limited
    Partner’s demand for an appraisal and an acceptance of the
    Cash Consideration payable pursuant to the Merger Agreement,
    either as provided in paragraph (c) hereof or thereafter
    with the written approval of Aimco OP, then the right of such
    Nonconsenting Limited Partner to an appraisal shall cease. The
    appraisal proceeding may also be dismissed as to any
    Nonconsenting Limited Partner with the agreement or consent of
    Aimco OP upon such terms as the two parties may agree. Except as
    provided in the two foregoing sentences, no appraisal proceeding
    before the arbitrator shall be dismissed as to any Nonconsenting
    Limited Partner without the approval of the arbitrator, and such
    approval may be conditioned upon such terms as the arbitrator
    deems just.





    

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