Document:

Exhibit No. 10.2   Agreement for Non-Competition and Earn-Out Compensation
                   dated February 24, 2005

         AGREEMENT FOR NON-COMPETE AND EARN OUT SCHEDULE

This Agreement for Non-Competition and Earn-Out Compensation ("Agreement") is
made February 24, 2005, by and among the following parties: DataLogic
International, Inc., a Delaware corporation ("Parent"), and DataLogic New
Mexico, Inc., a Delaware corporation("Purchaser") and I.S. Solutions LLC, a
New Mexico limited liability company ("Seller") and Tony Grundler ("Managing
Member"), David J. Heil ("Member") and Eric M. Siegel ("Member").

WHEREAS, Purchaser and Seller are parties to an Asset Purchase Agreement
executed contemporaneously with this Agreement;

WHEREAS, the execution of this Agreement is a condition precedent to closing
under the Asset Purchase Agreement between Purchaser and Seller; and

WHEREAS, Parent, Purchaser, Seller, Managing Member and Members desire to
enter this Agreement, subject to the terms and conditions set forth below.

NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is acknowledged, Parent, Purchaser, Seller, Managing
Member and Members agree as follows.

1.      Parent and Purchaser agree to the terms of this Agreement, subject to
closing under the Asset Purchase Agreement described in the recitals.

2.      Seller, Managing Member and Members agree to the terms of this
Agreement, subject to closing under the Asset Purchase Agreement described in
the recitals.

3.      Parent, Purchaser, Seller, and Managing Member or Member, as the case
may be, shall each execute the Non-Competition Agreements attached hereto as
Exhibit 1 [Tony Grundler]; Exhibit 2 [Eric M. Siegel] and Exhibit 3 [David J.
Heil].

4.      Subject to closing under the Asset Purchase Agreement described in the
recitals, Parent and Purchaser agree that the persons named below shall
participate in the Earn Out Plan during the two years following the closing of
the Asset Purchase Agreement.  Moreover, each persons, participation
percentage is set forth opposite their name below.

Tony Grundler (70%)
David J. Heil (22%)
Eric M. Siegel (8%)

5.      Under the Earn Out Plan, the participants, as a group, may earn up to
$400,000.00, payable in shares of restricted common stock of the Parent (the
"Earn Out Payment").  The Earn Out Payment shall be made, if at all, within
two years of the closing Asset Purchase Agreement and upon the achievement of
certain post-closing revenue and net income before tax milestones.  All
parties understand and agree that both revenue and net income before tax
targets must be met to earn any portion of the Earn Out Payment.

6.      If the Purchaser reports revenue greater than $3,000,000 and net
income before taxes greater than $100,000 at any point during any consecutive
12 months following the Closing, but still within 2 years of Closing, then 25%
of the Earn Out Payment shall be earned and delivered to the persons in the
proportions stated.

      If the Purchaser reports revenue greater than $3,500,000 and net income
before taxes greater than $175,000 at any point during any consecutive 12
months following the Closing, but still within 2 years of Closing, then 50% of
the Earn Out Payment shall be earned and delivered to the persons in the
proportions stated.

      If the Purchaser reports revenue greater than $4,000,000 and net income
before taxes greater than $250,000 at any point during any consecutive 12
months following the Closing, but still within 2 years of Closing, then 75% of
the Earn Out Payment shall be earned and delivered to the persons in the
proportions stated.

      If the Purchaser reports revenue greater than $5,000,000 and net income
before taxes greater than $350,000 at any point during any consecutive 12
months following the Closing, but still within 2 years of Closing, then 100%
of the Earn Out Payment shall be earned and delivered to the persons in the
proportions stated.

      There shall be no obligation for the Earn Out Payment unless and until
Purchaser meets the revenue and net income before taxes targets set forth
above during the two years following the Closing.

8.      Revenue and net income before taxes shall be calculated in accordance
with generally accepted accounting principles applied upon a consistent basis
and the final accounting information relied upon in preparing the audited
financial statements of Parent and Purchaser shall be determinative for the
purposes of this Agreement.  In the event, Purchaser expands the marketing
plan or budget for Purchaser during the term of this Agreement, then Tony
Grundler and Parent will mutually agree on the revised operating budget for
Purchaser.  If a decision is made to front end load marketing expenses, these
expenses will be allocated over a 2 to 4 year period depending upon the load
amount, rather than expensed in a single accounting period.  The purpose of
the preceding sentence being to equitably adjust, to the extent possible, the
targets for revenue and net income before taxes caused by a change in the
marketing budget.

9.      The table set forth below summarizes agreement and understanding by
and among Parent, Purchaser, Seller, Managing Member and Members concerning
the revenue and net income before tax required during the two years following
closing.

<TABLE>
<CAPTION>

                                                Net Income    Earn Out      % Profit
                                Revenue         Before Tax    Payment
-----------------------------------------------------------------------------------
                             <c>             <c>           <c>           <c>
Phase 1
-------

If the sales are equal to or
greater than $3 Mil and the net
income before tax is equal to
or greater than $100,000 then
the transfer of Parent Stock
will be made                    $ 3,000,000.00  $ 100,000.00  $ 100,000.00    3.33%

Phase 2
-------
If the sales are equal to or
greater than $3.5 Mil and the
net income before tax is equal
to or greater than $175 K then
the transfer of Parent Stock
will be made                    $ 3,500,000.00  $ 175,000.00  $ 100,000.00    5.00%

Phase 3
-------
If the sales are equal to or
greater than $4 Mil and the
net income before tax is equal
to or greater than $250 K then
the transfer of Parent Stock
will be made                    $ 4,000,000.00  $ 250,000.00  $ 100,000.00    6.25%

Phase 4
-------
If the sales are equal to or
greater than $5 Mil and the
net income before tax is equal
to or greater than $350 K then
the transfer of Parent Stock
will be made                    $ 5,000,000.00  $ 350,000.00  $ 100,000.00   7.00%

</TABLE>

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.

PARENT:
DATALOGIC INTERNATIONAL, INC., a Delaware corporation

      /s/ Keith C. Moore
By: _______________________
Name: Keith C. Moore
Title: Chief Executive Officer

PURCHASER:
DATALOGIC NEW MEXICO, INC., a Delaware corporation

     /s/ Keith C. Moore
By: _______________________
Name: Keith C. Moore
Title: President

SELLER:
I.S. SOLUTIONS, LLC, a New Mexico limited liability company

     /s/ Tony Grundler
By: _______________________
Name: Tony Grundler
Title: Managing Member

MANAGING MEMBER

      /s/ Tony Grundler
By: _______________________
Name: Tony Grundler

MEMBER

      /s/ Eric M. Siegal
By: _______________________
Name: Eric M. Siegel

MEMBER

      /s/ David J. Heil
By: _______________________
Name: David J. Heil

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                            Exhibit 1
                    NON-COMPETITION AGREEMENT
                         [Tony Grundler]

THIS NON-COMPETITION AGREEMENT is made and entered into this 24th day of
February, 2005 (this "Agreement"), between and among DataLogic International
Inc., a Delaware corporation (the "Parent"), its wholly owned subsidiary,
DataLogic New Mexico, Inc., a Delaware corporation (the "Purchaser"), I.S.
Solutions LLC, a New Mexico limited liability company (the Seller) and Tony
Grundler an individual residing in Albuquerque, New Mexico (the "Managing
Member").

RECITALS:

A.      Simultaneously with the execution of this Agreement, the Purchaser,
the Seller, and the Managing Member have consummated the transactions
contemplated by that certain Asset Purchase Agreement, dated February 24,
2005, (the "Asset Purchase Agreement"), among the Parent, the Purchaser, the
Seller, and the Managing Member, providing for, among other things, the
purchase by the Purchaser, and the sale by the Seller, of Seller's Business
Agreements and Seller's Equipment, as defined in the Asset Purchase Agreement.

B.      The Managing Member is the primary officer and director, and the
majority member, of the Seller.

C.      The execution and delivery of this Agreement is a condition to the
consummation of the asset purchase contemplated by the Asset Purchase
Agreement, and the parties are entering into this Agreement in order to
fulfill such condition.

NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and
agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties,
intending to be legally bound, hereby agree as follows:

1.      Period of Agreement.

The period of this Agreement shall commence on the date hereof and remain in
effect through February 24, 2009 (the "Non-Compete Period").

2.      Compensation.

Simultaneously with the execution of this Agreement, the Purchaser has paid or
become obligated to pay the amounts stated in the Asset Purchase Agreement.

The parties acknowledge and agree that the foregoing compensation paid or to
be paid to the Managing Member is independent of the damages that the
Purchaser may suffer in the event of any breach of this Agreement by the
Managing Member and is not intended (and shall not be deemed or construed) to
limit the amount of damages the Purchaser shall suffer or be entitled to
recover in the event of any such breach.

3.     Covenant Not to Compete.

The Managing Member covenants and agrees that during the Non-Compete Period,
the Managing Member shall not , without the prior written consent of the
Purchaser, directly or indirectly, and whether as a principal or as an agent,
officer, director, employee, consultant, or otherwise, alone or in association
with any other person, carry on, be engaged, concerned, or take part in,
render services to, otherwise assist in any manner (with or without any form
of compensation), or own, share in the earnings of, or invest in the stock,
bonds, or other securities of, any person which is engaged in a business
competitive with the business conducted under the Seller's Business Agreements
(the "Business") or a similar business of the Purchaser involving the business
of information systems business providing services to Public Safety and
Homeland Security organizations , within the State of New Mexico (the
"Competitive Business"); provided, however, that the Managing Member may
invest in stock, bonds, or other securities of any Competitive Business (but
without otherwise participating in the Competitive Business) if:  (A) such
stock, bonds, or other securities are listed on any national securities
exchange or are registered under Section 12(g) of the Securities Exchange Act
of 1934, as amended; (B) the investment does not exceed, in the case of any
class of capital stock of any one issuer, two percent (2%) of the issued and
outstanding shares, or, in the case of bonds or other securities of any one
issuer, two percent (2%) of the aggregate principal amount thereof issued and
outstanding; and  ) such investment would not prevent, directly or indirectly,
the transaction of business by the Purchaser or any affiliate of the Purchaser
with any state, district, territory, or possession of the United States or any
governmental subdivision, agency, or instrumentality thereof by virtue of any
statute, law, regulation or administrative practice.  The period of time
during which the Managing Member is prohibited from engaging in certain
activities by this Section shall be extended by the length of time during
which the Managing Member is in breach of the terms of this section.

It is understood by and between the parties hereto that the foregoing covenant
by the Managing Member not to enter into competition with the Business or a
similar business of the Purchaser is an essential element of this Agreement
and the Asset Purchase Agreement and that, but for the agreement of the
Managing Member to comply with such covenant, the Purchaser would not have
agreed to enter into this Agreement or the Asset Purchase Agreement.  The
Managing Member has independently consulted with the Managing Member's counsel
and has been advised in all respects concerning the reasonableness and
propriety of such covenant, with specific regard to the Business and the
nature of the business conducted by the Purchaser and its affiliates.  The
Managing Member agrees that such covenant is reasonable in scope, geographic
area, and duration, and that compliance with such covenant would not impose
economic or professional hardship on the Managing Member.

4.      Restrictions on Soliciting Business of the Purchaser.

Each of the Seller and the Managing Member further covenants and agrees that,
during the Non-Compete Period, neither the Seller nor the Managing Member
will, either for itself or himself or herself or for any other person or
entity, directly or indirectly, engage in any of the following activities
without the express prior written consent of the Purchaser:

(a)     Solicit or hire any of the employees of the Purchaser or solicit or
take away any of the Purchaser's customers, lessors, or suppliers or attempt
any of the foregoing;

(b)     Acquire or attempt to acquire rights providing any product or service
in a Competitive Business within the territory described in Section 3 hereof;
or

(c)     Solicit or accept orders for services competitive to those previously
provided or sold by the Seller in the Business from any then or previous
customer of the Seller or the Business or otherwise induce or attempt to
induce any such customer to reduce such customer's patronage of the business
with the Purchaser or otherwise engage in any act which would interfere with
or harm any business relationship the Purchaser has with any customer, lessor,
employee, principal, or supplier.

5.     Specific Performance.

Without intending to limit the remedies available to the Purchaser, each of
the Seller and the Managing Member acknowledges that the Purchaser will have
no adequate remedies at law if the Seller or any Member violates the terms of
Section 3 or 4, hereof.  In such event, each of the Seller and the Managing
Member agrees that the Purchaser shall have the right, in addition to any
other rights it may have (including, without limitation,) to obtain in any
court of competent jurisdiction specific performance of such Sections of this
Agreement or injunctive relief to restrain any breach or threatened breach
thereof.  Nothing herein shall be construed as prohibiting the Purchaser from
pursuing any other remedies available to the Purchaser (whether at law or in
equity) for such breach or threatened breach, including, without limitation,
the recovery of monetary damages from the Seller and the Managing Member and
the right of recoupment set forth in the Asset Purchase Agreement.  The
provisions of this Section 5 shall survive the expiration, termination or
cancellation of this Agreement.

6.     Attorneys Fees and Costs.

If an action at law or in equity is necessary to enforce or interpret the
terms of this Agreement, the prevailing party shall be entitled to reasonable
attorneys fees, costs, and necessary expenses in addition to any other relief
to which that party may be entitled.  This provision is applicable to this
entire Agreement.

7.      Representations and Warranties of the Purchaser, the Seller, and the
Managing Member.

(a)     Representations and Warranties of the Purchaser.  The Purchaser hereby
represents and warrants to the Seller and the Managing Member that: (I) the
Purchaser has all requisite power to enter into and perform the Purchaser's
obligations under this Agreement; (ii) this Agreement has been duly and
validly authorized by all necessary corporate action on the part of the
Purchaser; (iii) the execution of this Agreement by the Purchaser and
performance of the Purchaser's obligations hereunder do not require the
consent or approval of any other party; and (iv) this Agreement is a valid and
binding obligation of the Purchaser.

(b)     Representations and Warranties of the Seller and the Managing Member.
The Seller and the Managing Member hereby jointly and severally represent and
warrant to the Purchaser that: (I) the Seller and the Managing Member have the
capacity and power to enter into and perform their obligations under this
Agreement; (ii) the Seller and the Managing Member have duly and validly
executed this Agreement; (iii) the execution of this Agreement and performance
of obligations of the Seller and the Managing Member hereunder do not require
the consent or approval of any other party; and (iv) this Agreement
constitutes a valid and binding obligation of the Seller and the Managing
Member.

8.      General Provisions.

(a)     Compliance with Laws.  The parties agree that they will comply with
all applicable laws and regulations of government bodies or agencies in their
respective performance of their obligations under this Agreement.

(b)     Governing Law and Construction.  This Agreement will be governed by
and construed in accordance with the laws of the State of New Mexico without
reference to its conflict-of-laws principles.  This Agreement's final form
resulted from review and negotiations among the parties and their attorneys,
and no part of this Agreement should be construed against any party on the
basis of authorship.

(c)     Forum for Dispute Resolution.  If any dispute arises among the parties
concerning the interpretation or performance of any portion of this Agreement
which the parties are unable to resolve themselves, and any party brings an
action against any other party seeking a declaratory order, specific
performance, damages, or any other legal or equitable relief based on this
Agreement, the parties agree that the forum for any such action shall be an
appropriate federal or state court in New Mexico having jurisdiction, agree
that venue will be proper in such courts, and waive any objections based on
inconvenience of the forum, and further agree that the prevailing party in any
such action, as determined by the court, shall be awarded its reasonable
attorneys' fees and costs in addition to any relief or judgment the court
awards.

(d)     Entire Agreement; Amendment.  This Agreement constitutes the entire
agreement between the parties with respect to the subject matter contained
herein and supersedes any previous oral or written communications,
representations, understandings or agreements with respect thereto.  The terms
of this Agreement may be modified only in writing, signed by authorized
representatives of both parties.

(e)      Assignability.  This Agreement will be binding upon the parties'
respective successors and permitted assigns.  No party may assign this
Agreement and/or any of its rights and/or obligations hereunder without the
prior written consent of the other party or parties, and any such attempted
assignment will be void; provided, however, that the Purchaser may assign this
Agreement without the prior written consent of the Seller or the Managing
Member.

(f)      Waiver.  A waiver of a breach or default under this Agreement will
not constitute a waiver of any other breach or default.  Failure or delay by
either party to enforce compliance with any term or condition of this
Agreement will not constitute a waiver of such term or condition.

(g)      Severability.  If any provision of this Agreement is declared to be
invalid, the parties agree that such invalidity will not affect the validity
of the remaining provisions of this Agreement, and further agree, to the
extent possible, to substitute for the invalid provision a valid provision
that approximates the intent and economic effect of the invalid provision as
closely as possible.

(h)      Headings.  The titles of the Sections and subsections of this
Agreement are for convenience of reference only and are not to be considered
in construing this Agreement.

(i)      Notice.  Any notice, request, consent, demand or other communication
required to be given under this Agreement will be in writing and will be given
personally, by facsimile or by mailing the same, first-class, postage prepaid
to the appropriate address and facsimile number set forth below or to such
other person or at such other address as may hereafter be designated by like
notice.  Notices by mail will be considered delivered and become effective
three days after the mailing thereof.  All notices by facsimile will be
considered delivered and become effective immediately upon the confirmed (by
answer back or other tangible printed verification or successful receipt)
sending thereof.

To the Parent or Purchaser:

DataLogic International Inc.
18301 Von Karman, Suite 250
Irvine, CA 92612
Irvine, California
Keith Moore, CEO

To the Seller or the Member:

I.S. Solutions, LLC
2410 San Mateo Place, NE
Albuquerque, NM 87110
Attn: Tony Grundler

(j)      Counterparts.  This Agreement may be executed in counterparts and by
the parties hereto in separate counterparts, each of which will be deemed an
original, but all of which together will constitute one and the same
instrument.

IN WITNESS WHEREOF, the undersigned have caused this Non-Competition Agreement
to be executed by their respective representatives as of the day and year
first above written.

"PARENT"
DataLogic International Inc.
A Delaware corporation

By:    /s/ Keith C. Moore
Name:  Keith C Moore
Title: CEO

"PURCHASER"
DataLogic New Mexico Inc.
A Delaware corporation

By:   /s/ Keith C Moore
Name: Keith C Moore
Title: CEO

"SELLER"
I.S. Solutions LLC
A New Mexico limited liability corporation

By:   /s/ Tony Grundler
Name: Tony Grundler
Title: Managing Member

"MANAGING MEMBER"

By:   /s/ Tony Grundler
Name: Tony Grundler

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                            Exhibit 2

                LIMITED NON-COMPETITION AGREEMENT
                         [Eric M. Siegel]

THIS LIMITED NON-COMPETITION AGREEMENT is made and entered into this 24th day
of February, 2005 (this "Agreement"), between and among DataLogic
International Inc., a Delaware corporation (the "Parent"), its wholly owned
subsidiary, DataLogic New Mexico, Inc., a Delaware corporation (the
"Purchaser"), I.S. Solutions LLC, a New Mexico limited liability company (the
Seller) and Eric M. Siegel an individual residing in Albuquerque, New Mexico
(the "Member").

RECITALS:

A.      Simultaneously with the execution of this Agreement, the Purchaser,
the Seller, and the Member have consummated the transactions contemplated by
that certain Asset Purchase Agreement, dated February 24, 2005, (the "Asset
Purchase Agreement"), among the Parent, the Purchaser, the Seller, and the
Member, providing for, among other things, the purchase by the Purchaser, and
the sale by the Seller, of Seller's Business Agreements and Seller's
Equipment, as defined in the Asset Purchase Agreement.

B.      The Member is a minority owner of a limited liability company
membership interest in the Seller.

C.      The execution and delivery of this Agreement is a condition to the
consummation of the asset purchase contemplated by the Asset Purchase
Agreement, and the parties are entering into this Agreement in order to
fulfill such condition.

NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and
agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties,
intending to be legally bound, hereby agree as follows:

1.      Period of Agreement.

The period of this Agreement shall commence on the date hereof and remain in
effect through February 24, 2007 (the "Non-Compete Period").

2.      Compensation.

Simultaneously with the execution of this Agreement, the Purchaser has paid or
become obligated to pay the amounts stated in the Asset Purchase Agreement.

The parties acknowledge that any breach of this Agreement by the Member may
cause damage to Purchaser, which entitles it to seek judicial relief and that
the amount of damages may be difficult to ascertain.  The parties therefore
agree that liquidated damages may be payable, at the election of the
Purchaser, in addition to the equitable relief described in paragraph 5.
However, the parties agree that the amount of liquidated damages cannot exceed
the amount paid to the Member under the Asset Purchase Agreement, upon a
determination in an Arbitration Proceeding that the Member breached this
Agreement.

3.      Limited Covenant Not to Compete.

It is understood that Member is a minority Member of Seller and that Member
owns and operates Advanced Presentation Systems ("APS") which is engaged in
the audio visual industry, which includes the designs, sales, services,
installation and control of all audio and visual equipment, including
conference room design, video teleconferencing, audio teleconferencing,
control systems, display products, video, plasma and other projection
monitors, audio and video switching equipment, complete system integration
with and without existing hardware and integrating IT based products to the
audiovisual installation, and other state of the art technological innovations
related to visual or audio presentations for commercial, individual,
governmental, and educational  customers.  APS's current services include the
ancillary use of information systems and web based control to the extent
necessary to implement a complete audiovisual installation. (these services
and goods are collectively defined as "Video Systems").    APS is a
sub-contractor of Seller and APS and Purchaser will continue the relationship
on similar terms as with Seller as follows:  APS will provide Video Systems
under Purchaser's contracts (including, Seller's Business Agreements) with the
State of New Mexico and in exchange Purchaser shall charge APS a fee equal to
five percent (5%) of Video Systems sales made under the contracts with the
State of New Mexico.

The Member covenants and agrees that during the Non-Compete Period, the Member
will continue to provide Video Systems that he has delivered in the past, as
reflected by paid invoices issued by APS.  Member shall not, without the prior
written consent of the Purchaser, directly or indirectly, and whether as a
principal or as an agent, officer, director, employee, alone or in association
with any other person, carry on, be engaged, concerned, or take part in, own,
share in the earnings of, or invest in the stock, bonds, or other securities
of, any person who is engaged in business other than Video Systems competitive
with the business conducted by either (1) the Seller immediately prior to the
Asset Purchase Agreement or (2) Purchaser, including that portion of the
business involving information systems providing services to Public Safety and
Homeland Security organizations, within the State of New Mexico (the
"Competitive Business").  The Member may invest in stock, bonds, or other
securities of any Competitive Business (but without otherwise participating in
the Competitive Business) if:  (A) such stock, bonds, or other securities are
listed on any national securities exchange or are registered under Section
12(g) of the Securities Exchange Act of 1934, as amended; (B) the investment
does not exceed, in the case of any class of capital stock of any one issuer,
two percent (2%) of the issued and outstanding shares, or, in the case of
bonds or other securities of any one issuer, two percent (2%) of the aggregate
principal amount thereof issued and outstanding; and  ) such investment would
not prevent, directly or indirectly, the transaction of business by the
Purchaser or any affiliate of the Purchaser with any state, district,
territory, or possession of the United States or any governmental subdivision,
agency, or instrumentality thereof by virtue of any statute, law, regulation
or administrative practice.

It is understood by and between the parties hereto that the foregoing covenant
by the Member not to enter into competition with the Competitive Business of
the Purchaser is an essential element of this Agreement and the Asset Purchase
Agreement and that, but for the agreement of the Member to comply with such
covenant, the Purchaser would not have agreed to enter into this Agreement or
the Asset Purchase Agreement. The Purchaser agrees the Member may continue in
the business of Video Systems.  The Member has independently consulted with
the Member's counsel and has been advised in all respects concerning the
reasonableness and propriety of such covenant, with specific regard to the
Competitive Business.  The Member agrees that such covenant is reasonable in
scope (the Competitive Business, excepting Video Systems), geographic area
(New Mexico), and duration (two years), and that compliance with such covenant
would not impose an undue economic or professional hardship on the Member.

4.      Restrictions on Soliciting Business of the Purchaser.

Each of the Seller and the Member further covenants and agrees that, during
the Non-Compete Period, neither the Seller nor the Member will, either for
itself or himself or for any other person or entity, directly or indirectly,
engage in any of the following activities without the express prior written
consent of the Purchaser:

(a)      Solicit or hire any of the employees of the Purchaser or solicit or
take away any of the Purchaser's customers, lessors, or suppliers or attempt
any of the foregoing;

(b)      Acquire or attempt to acquire rights providing any product or service
in the  Competitive Business within New Mexico other than Video Systems; or

(c)      Solicit or accept orders for services competitive to those previously
provided or sold by the Seller in the Competitive Business other than Video
Systems from any customer of the Purchaser or Seller or otherwise induce or
attempt to induce any such customer to reduce such customer's patronage of the
Competitive Business  with the Purchaser or otherwise engage in any act which
would interfere with or harm any business relationship the Purchaser has with
any customer, lessor, employee, principal, or supplier.

5.      Specific Performance.

Without intending to limit the remedies available to the Purchaser, the Seller
and the Member acknowledge that the Purchaser will have no adequate remedies
at law if the Seller or the Member violates the terms of Section 3 or 4,
hereof.  In such event, each of the Seller and the Member agrees that the
Purchaser shall have the right, in addition to any other rights it may have
(including, without limitation,) to obtain in any court of competent
jurisdiction specific performance of such Sections of this Agreement or
injunctive relief to restrain any breach or threatened breach thereof.
Nothing herein shall be construed as prohibiting the Purchaser from pursuing
any other remedies available to the Purchaser (whether at law or in equity)
for such breach or threatened breach, including, without limitation, the
recovery of monetary damages from the Seller and the Member and the right of
recoupment set forth in the Asset Purchase Agreement.  The provisions of this
Section 5 shall survive the expiration, termination or cancellation of this
Agreement.

6.      Arbitration.

Any and all disagreements, disputes or claims listed below will be resolved
exclusively by arbitration in Albuquerque,  New Mexico.  Arbitration will be
conducted under the Employment Dispute Resolution Rules of the American
Arbitration Association.  A legal judgment based upon the Arbitrator's award
may be entered in any court having jurisdiction over the matter.  The parties
agree to arbitrate anything:

a.      related in any way to the validity of this Agreement or how it is
interpreted or implemented; and

b.      that involves any dispute arising under local, state or federal
statutory or common law regarding the breach of this Agreement by either
party.

7.      Representations and Warranties of the Purchaser, the Seller, and the
Member.

(a)      Representations and Warranties of the Purchaser.  The Purchaser
hereby represents and warrants to the Seller and the Member that: (I) the
Purchaser has all requisite power to enter into and perform the Purchaser's
obligations under this Agreement; (ii) this Agreement has been duly and
validly authorized by all necessary corporate action on the part of the
Purchaser; (iii) the execution of this Agreement by the Purchaser and
performance of the Purchaser's obligations hereunder do not require the
consent or approval of any other party; and (iv) this Agreement is a valid and
binding obligation of the Purchaser.

(b)      Representations and Warranties of the Seller and the Member.  The
Seller and the Member hereby jointly and severally represent and warrant to
the Purchaser that: (I) the Seller and the Member have the capacity and power
to enter into and perform their obligations under this Agreement; (ii) the
Seller and the Member have duly and validly executed this Agreement; (iii) the
execution of this Agreement and performance of obligations of the Seller and
the Member hereunder do not require the consent or approval of any other
party; and (iv) this Agreement constitutes a valid and binding obligation of
the Seller and the Member.

8.      General Provisions.

(a)      Compliance with Laws.  The parties agree that they will comply with
all applicable laws and regulations of government bodies or agencies in their
respective performance of their obligations under this Agreement.

(b)      Governing Law and Construction.  This Agreement will be governed by
and construed in accordance with the laws of the State of New Mexico without
reference to its conflict-of-laws principles.  This Agreement's final form
resulted from review and negotiations among the parties and their attorneys,
and no part of this Agreement should be construed against any party on the
basis of authorship.

(c)      Entire Agreement; Amendment.  This Agreement constitutes the entire
agreement between the parties with respect to the subject matter contained
herein and supersedes any previous oral or written communications,
representations, understandings or agreements with respect thereto.  The terms
of this Agreement may be modified only in writing, signed by authorized
representatives of both parties.

(d)      Assignability.  This Agreement will be binding upon the parties'
respective successors and permitted assigns.  No party may assign this
Agreement and/or any of its rights and/or obligations hereunder without the
prior written consent of the other parties, which consent cannot be
unreasonably withheld. Any attempted assignment done without consent will be
voidable. The Member specifically agrees to the assignment of this Agreement
to a New Mexico corporation, DataLogic New Mexico, Inc. or other similar name,
formed to cause Purchaser to have its corporate domicile in the State of New
Mexico.

(e)      Waiver.  A waiver of a breach or default under this Agreement will
not constitute a waiver of any other breach or default.  Failure or delay by
either party to enforce compliance with any term or condition of this
Agreement will not constitute a waiver of such term or condition.

(f)      Severability.  If any provision of this Agreement is declared to be
invalid, the parties agree that such invalidity will not affect the validity
of the remaining provisions of this Agreement, and further agree, to the
extent possible, to substitute for the invalid provision a valid provision
that approximates the intent and economic effect of the invalid provision as
closely as possible. The Purchaser may waive any provision of this Agreement
upon the prior written approval of its CEO.

(g)      Headings.  The titles of the Sections and subsections of this
Agreement are for convenience of reference only and are not to be considered
in construing this Agreement.

(h)      Notice.  Any notice, request, consent, demand or other communication
required to be given under this Agreement will be in writing and will be given
personally, by facsimile or by mailing the same, first-class, postage prepaid
to the appropriate address and facsimile number set forth below or to such
other person or at such other address as may hereafter be designated by like
notice.  Notices by mail will be considered delivered and become effective
three days after the mailing thereof.  All notices by facsimile will be
considered delivered and become effective immediately upon the confirmed (by
answer back or other tangible printed verification or successful receipt)
sending thereof.

To the Parent or Purchaser:
DataLogic International Inc.
18301 Von Karman, Suite 250
Irvine, CA 92612
Irvine, California
Keith C. Moore, CEO
Telephone: (949) 260-0120
Facsimile: (800) 549-3067

To the Seller or the Member:
I.S. Solutions, LLC
2410 San Mateo Place, NE
Albuquerque, NM 87110
Attn: Eric M. Siegel
505-821-5525 fax

(j)      Counterparts.  This Agreement may be executed in counterparts and by
the parties hereto in separate counterparts, each of which will be deemed an
original, but all of which together will constitute one and the same
instrument.

IN WITNESS WHEREOF, the undersigned have caused this Non-Competition Agreement
to be executed by their respective representatives as of the day and year
first above written.

"PARENT"
DataLogic International Inc.
A Delaware corporation

By:   /s/ Keith C Moore
Name: Keith C. Moore
Title: CEO

"PURCHASER"
DataLogic New Mexico Inc.
A Delaware corporation

By:   /s/ Keith C. Moore
Name: Keith C. Moore
Title: CEO

"SELLER"
I.S. Solutions LLC
A New Mexico limited liability corporation

By:   /s/ Tony Grundler
Name: Tony Grundler
Title: Managing Member

"MEMBER"

By:   /s/ Eric Siegal
Name: Eric M. Siegel

-----------------------------------------------------------------------------

                            Exhibit 3
                    NON-COMPETITION AGREEMENT
                         [David J. Heil]

THIS NON-COMPETITION AGREEMENT is made and entered into this 24th day of
February, 2005 (this "Agreement"), between and among DataLogic International
Inc., a Delaware corporation (the "Parent"), its wholly owned subsidiary,
DataLogic New Mexico, Inc., a Delaware corporation (the "Purchaser"), I.S.
Solutions LLC, a New Mexico limited liability company (the Seller) and David
J. Heil, an individual residing in Albuquerque, New Mexico (the "Member").

RECITALS:

A.      Simultaneously with the execution of this Agreement, the Purchaser,
the Seller, and the Member have consummated the transactions contemplated by
that certain Asset Purchase Agreement, dated February 24, 2005, (the "Asset
Purchase Agreement"), among the Parent, the Purchaser, the Seller, and the
Member, providing for, among other things, the purchase by the Purchaser, and
the sale by the Seller, of Seller's Business Agreements and Seller's
Equipment, as defined in the Asset Purchase Agreement.

B.      The Member is the primary officer and director, and the majority
member, of the Seller.

C.      The execution and delivery of this Agreement is a condition to the
consummation of the asset purchase contemplated by the Asset Purchase
Agreement, and the parties are entering into this Agreement in order to
fulfill such condition.

NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and
agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties,
intending to be legally bound, hereby agree as follows:

1.      Period of Agreement.

The period of this Agreement shall commence on the date hereof and remain in
effect through February 24, 2009 (the "Non-Compete Period"), or may be
extended if Member is employed by or contracted by Parent or Purchaser.

2.      Compensation.

Simultaneously with the execution of this Agreement, the Purchaser has paid or
become obligated to pay the amounts stated in the Asset Purchase Agreement.

The parties acknowledge and agree that the foregoing compensation paid or to
be paid to the Member is independent of the damages that the Purchaser may
suffer in the event of any breach of this Agreement by the Member and is not
intended (and shall not be deemed or construed) to limit the amount of damages
the Purchaser shall suffer or be entitled to recover in the event of any such
breach.

3.      Covenant Not to Compete.

The Member covenants and agrees that during the Non-Compete Period, the Member
shall not , without the prior written consent of the Purchaser, directly or
indirectly, and whether as a principal or as an agent, officer, director,
employee, consultant, or otherwise, alone or in association with any other
person, carry on, be engaged, concerned, or take part in, render services to,
otherwise assist in any manner (with or without any form of compensation), or
own, share in the earnings of, or invest in the stock, bonds, or other
securities of, any person which is engaged in a business competitive with the
business conducted under the Seller's Business Agreements (the "Business") or
a similar business of the Purchaser involving the business of information
systems business providing services to Public Safety and Homeland Security
organizations , within the State of New Mexico (the "Competitive Business");
provided, however, that the Member may invest in stock, bonds, or other
securities of any Competitive Business (but without otherwise participating in
the Competitive Business) if:  (A) such stock, bonds, or other securities are
listed on any national securities exchange or are registered under Section
12(g) of the Securities Exchange Act of 1934, as amended; (B) the investment
does not exceed, in the case of any class of capital stock of any one issuer,
two percent (2%) of the issued and outstanding shares, or, in the case of
bonds or other securities of any one issuer, two percent (2%) of the aggregate
principal amount thereof issued and outstanding; and  ) such investment would
not prevent, directly or indirectly, the transaction of business by the
Purchaser or any affiliate of the Purchaser with any state, district,
territory, or possession of the United States or any governmental subdivision,
agency, or instrumentality thereof by virtue of any statute, law, regulation
or administrative practice.  The period of time during which the Member is
prohibited from engaging in certain activities by this Section shall be
extended by the length of time during which the Member is in breach of the
terms of this section.

It is understood by and between the parties hereto that the foregoing covenant
by the Member not to enter into competition with the Business or a similar
business of the Purchaser is an essential element of this Agreement and the
Asset Purchase Agreement and that, but for the agreement of the Member to
comply with such covenant, the Purchaser would not have agreed to enter into
this Agreement or the Asset Purchase Agreement.  The Member has independently
consulted with the Member's counsel and has been advised in all respects
concerning the reasonableness and propriety of such covenant, with specific
regard to the Business and the nature of the business conducted by the
Purchaser and its affiliates.  The Member agrees that such covenant is
reasonable in scope, geographic area, and duration, and that compliance with
such covenant would not impose economic or professional hardship on the
Member.

4.      Restrictions on Soliciting Business of the Purchaser.

Each of the Seller and the Member further covenants and agrees that, during
the Non-Compete Period, neither the Seller nor the Member will, either for
itself or himself or herself or for any other person or entity, directly or
indirectly, engage in any of the following activities without the express
prior written consent of the Purchaser:

(a)      Solicit or hire any of the employees of the Purchaser or solicit or
take away any of the Purchaser's customers, lessors, or suppliers or attempt
any of the foregoing;

(b)      Acquire or attempt to acquire rights providing any product or service
in a Competitive Business within the territory described in Section 3 hereof;
or

(c)      Solicit or accept orders for services competitive to those previously
provided or sold by the Seller in the Business from any then or previous
customer of the Seller or the Business or otherwise induce or attempt to
induce any such customer to reduce such customer's patronage of the business
with the Purchaser or otherwise engage in any act which would interfere with
or harm any business relationship the Purchaser has with any customer, lessor,
employee, principal, or supplier.

5.      Specific Performance.

Without intending to limit the remedies available to the Purchaser, each of
the Seller and the Member acknowledges that the Purchaser will have no
adequate remedies at law if the Seller or the Member violates the terms of
Section 3 or 4, hereof.  In such event, each of the Seller and the Member
agrees that the Purchaser shall have the right, in addition to any other
rights it may have (including, without limitation,) to obtain in any court of
competent jurisdiction specific performance of such Sections of this Agreement
or injunctive relief to restrain any breach or threatened breach thereof.
Nothing herein shall be construed as prohibiting the Purchaser from pursuing
any other remedies available to the Purchaser (whether at law or in equity)
for such breach or threatened breach, including, without limitation, the
recovery of monetary damages from the Seller and the Member and the right of
recoupment set forth in the Asset Purchase Agreement.  The provisions of this
Section 5 shall survive the expiration, termination or cancellation of this
Agreement.

6.      Attorneys Fees and Costs.

If an action at law or in equity is necessary to enforce or interpret the
terms of this Agreement, the prevailing party shall be entitled to reasonable
attorneys fees, costs, and necessary expenses in addition to any other relief
to which that party may be entitled.  This provision is applicable to this
entire Agreement.

7.      Representations and Warranties of the Purchaser, the Seller, and the
Member.

(a)      Representations and Warranties of the Purchaser.  The Purchaser
hereby represents and warrants to the Seller and the Member that: (I) the
Purchaser has all requisite power to enter into and perform the Purchaser's
obligations under this Agreement; (ii) this Agreement has been duly and
validly authorized by all necessary corporate action on the part of the
Purchaser; (iii) the execution of this Agreement by the Purchaser and
performance of the Purchaser's obligations hereunder do not require the
consent or approval of any other party; and (iv) this Agreement is a valid and
binding obligation of the Purchaser.

(b)      Representations and Warranties of the Seller and the Member.  The
Seller and the Member hereby jointly and severally represent and warrant to
the Purchaser that: (i) the Seller and the Member have the capacity and power
to enter into and perform their obligations under this Agreement; (ii) the
Seller and the Member have duly and validly executed this Agreement; (iii) the
execution of this Agreement and performance of obligations of the Seller and
the Member hereunder do not require the consent or approval of any other
party; and (iv) this Agreement constitutes a valid and binding obligation of
the Seller and the Member.

8.      General Provisions.

(a)      Compliance with Laws.  The parties agree that they will comply with
all applicable laws and regulations of government bodies or agencies in their
respective performance of their obligations under this Agreement.

(b)      Governing Law and Construction.  This Agreement will be governed by
and construed in accordance with the laws of the State of New Mexico without
reference to its conflict-of-laws principles.  This Agreement's final form
resulted from review and negotiations among the parties and their attorneys,
and no part of this Agreement should be construed against any party on the
basis of authorship.

(c)      Forum for Dispute Resolution.  If any dispute arises among the
parties concerning the interpretation or performance of any portion of this
Agreement which the parties are unable to resolve themselves, and any party
brings an action against any other party seeking a declaratory order, specific
performance, damages, or any other legal or equitable relief based on this
Agreement, the parties agree that the forum for any such action shall be an
appropriate federal or state court in New Mexico having jurisdiction, agree
that venue will be proper in such courts, and waive any objections based on
inconvenience of the forum, and further agree that the prevailing party in any
such action, as determined by the court, shall be awarded its reasonable
attorneys' fees and costs in addition to any relief or judgment the court
awards.

(d)      Entire Agreement; Amendment.  This Agreement constitutes the entire
agreement between the parties with respect to the subject matter contained
herein and supersedes any previous oral or written communications,
representations, understandings or agreements with respect thereto.  The terms
of this Agreement may be modified only in writing, signed by authorized
representatives of both parties.

(e)      Assignability.  This Agreement will be binding upon the parties'
respective successors and permitted assigns.  No party may assign this
Agreement and/or any of its rights and/or obligations hereunder without the
prior written consent of the other party or parties, and any such attempted
assignment will be void; provided, however, that the Purchaser may assign this
Agreement without the prior written consent of the Seller or the Member.

(f)      Waiver.  A waiver of a breach or default under this Agreement will
not constitute a waiver of any other breach or default.  Failure or delay by
either party to enforce compliance with any term or condition of this
Agreement will not constitute a waiver of such term or condition.

(g)      Severability.  If any provision of this Agreement is declared to be
invalid, the parties agree that such invalidity will not affect the validity
of the remaining provisions of this Agreement, and further agree, to the
extent possible, to substitute for the invalid provision a valid provision
that approximates the intent and economic effect of the invalid provision as
closely as possible.

(h)      Headings.  The titles of the Sections and subsections of this
Agreement are for convenience of reference only and are not to be considered
in construing this Agreement.

(i)      Notice.  Any notice, request, consent, demand or other communication
required to be given under this Agreement will be in writing and will be given
personally, by facsimile or by mailing the same, first-class, postage prepaid
to the appropriate address and facsimile number set forth below or to such
other person or at such other address as may hereafter be designated by like
notice.  Notices by mail will be considered delivered and become effective
three days after the mailing thereof.  All notices by facsimile will be
considered delivered and become effective immediately upon the confirmed (by
answer back or other tangible printed verification or successful receipt)
sending thereof.

To the Parent or Purchaser:
DataLogic International Inc.
18301 Von Karman, Suite 250
Irvine, CA 92612
Irvine, California
Keith Moore, CEO

To the Seller or the Member:
I.S. Solutions, LLC
2410 San Mateo Place, NE
Albuquerque, NM 87110
Attn: David J. Heil

(j)      Counterparts.  This Agreement may be executed in counterparts and by
the parties hereto in separate counterparts, each of which will be deemed an
original, but all of which together will constitute one and the same
instrument.

IN WITNESS WHEREOF, the undersigned have caused this Non-Competition Agreement
to be executed by their respective representatives as of the day and year
first above written.

"PARENT"
DataLogic International Inc.
A Delaware corporation

By:   /s/ Keith C. Moore
Name: Keith C Moore
Title: CEO

"PURCHASER"
DataLogic New Mexico Inc.
A Delaware corporation

By:   /s/ Keith C. Moore
Name: Keith C Moore
Title: CEO

"SELLER"
I.S. Solutions LLC
A New Mexico limited liability corporation

By:    /s/ Tony Grundler
Name:  Tony Grundler
Title: Managing Member

"MEMBER"

By:   /s/ David J. Heil
Name: David J. Heilexv4w1

 

EXHIBIT 4.1

FORTY-SIXTH AMENDMENT TO THE

THIRD AMENDED AND RESTATED AGREEMENT OF

LIMITED PARTNERSHIP OF AIMCO PROPERTIES, L.P.

     This FORTY-SIXTH AMENDMENT TO THE THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF AIMCO PROPERTIES, L.P., dated as of February 28, 2005 (this “Amendment”), is being executed by
AIMCO-GP, Inc., a Delaware corporation (the “General Partner”), as the general partner of AIMCO
Properties, L.P., a Delaware limited partnership (the “Partnership”), pursuant to the authority
conferred on the General Partner by Section 7.3.C(7) of the Third Amended and Restated Agreement of
Limited Partnership of AIMCO Properties, L.P., dated as of July 29, 1994, as amended and/or
supplemented from time to time (the “Agreement”). Capitalized terms used, but not otherwise
defined herein, shall have the respective meanings ascribed thereto in the Agreement.

     WHEREAS, on March 11, 2002, Casden Properties, Inc. merged with and into the Previous General
Partner (the “Casden Merger”);

     WHEREAS, pursuant to the Casden Merger agreement and related documents, upon completion of
each of certain properties and the satisfaction of other conditions, the Previous General Partner
has agreed to pay additional, deferred consideration in respect of the Casden Merger, and to
purchase the general partner interest in the entities that own each such property;

     WHEREAS, in order to fund such payments with respect to the particular property commonly known
as Park La Brea B (a.k.a. The Palazzo East at Park La Brea), the Partnership has loaned
$85,411,947.12 to the Previous General Partner, which loan is evidenced by a promissory note, dated
February 28, 2005, in the original principal amount of $85,411,947.12;

     WHEREAS, the Previous General Partner has contributed to the Partnership the assets acquired
in connection with the Casden Merger, including the general partner interest described above and,
in connection with such contribution, the Partnership proposes to issue to the Special Limited
Partner 3,416,478 Class Thirteen Partnership Preferred Units; and

     WHEREAS, pursuant to Section 4.2.A of the Agreement, the General Partner is authorized to
determine the designations, preferences and relative, participating, optional or other special
rights, powers and duties of Partnership Preferred Units.

 

 

     NOW, THEREFORE, in consideration of the foregoing, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

	 	1.  	The Agreement is hereby amended by the addition of a new exhibit, entitled
“Exhibit XX,” in the form attached hereto, which shall be attached to and made a part
of the Agreement.

	 	2.  	Except as specifically amended hereby, the terms, covenants, provisions and
conditions of the Agreement shall remain unmodified and continue in full force and
effect and, except as amended hereby, all of the terms, covenants, provisions and
conditions of the Agreement are hereby ratified and confirmed in all respects.

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

	 	 	 	 	 
	 	GENERAL PARTNER:

AIMCO-GP, INC.

 	 
	 	By:  	/s/ Paul McAuliffe
 	 
	 	 	Paul McAuliffe
Chief Financial Officer and Executive Vice President 	 
	 	 	 	 
	 

 

 

EXHIBIT XX

PARTNERSHIP UNIT DESIGNATION OF THE

CLASS THIRTEEN 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 Thirteen Partnership
Preferred Units,” and the number of Partnership Preferred Units constituting such class shall be
3,416,478.

     2. Definitions.

     For purposes of the Class Thirteen 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 Third Amended and Restated Agreement of Limited Partnership of
the Partnership, dated as of July 29, 1994, as amended.

“AIMCO” shall mean Apartment Investment and Management Company, a Maryland corporation.

"Class Thirteen 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 XX.

“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 December 31 of any year beginning with December 31,
2005, and continuing until no Class Thirteen Partnership Preferred Units remain
outstanding.

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

XX-1

 

"Liquidation Preference” shall mean, with respect to each Class Thirteen Partnership
Preferred Unit, as of any date, Twenty-Five Dollars ($25.00), plus an amount equal to all
distributions (whether or not declared or earned) accumulated, accrued and unpaid on such
Class Thirteen Partnership Preferred Unit as of such date.

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

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

"Promissory Note” shall mean the Promissory Note, dated February 28, 2005, in the original
principal amount of $85,411,947.12, made by AIMCO in favor of the Partnership (bearing
simple interest at 5.25%, payable on December 31 of each year).

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

     3. Distributions.

     On every Distribution Payment Date, the holders of Class Thirteen Partnership Preferred Units
shall be entitled to receive distributions payable in cash in an amount equal to $1.3125 per Class
Thirteen Partnership Preferred Unit. Each such distribution shall be payable to the holders of
record of the Class Thirteen Partnership Preferred Units, as they appear on the records of the
Partnership at the close of business on the Distribution Payment Date. Distributions shall
accumulate from the date of original issuance of the Class Thirteen Partnership Preferred Units.

     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 Thirteen Partnership Preferred Units shall be entitled to receive the
Liquidation Preference for each Class Thirteen Partnership Preferred Unit as of 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 Thirteen Partnership Preferred Units have been paid their aggregate
Liquidation Preference in full, no payment shall be made to any holder of Junior Partnership Units

XX-2

 

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 Thirteen 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
Thirteen 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 Thirteen 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, a consolidation or merger of the Partnership
with one or more partnerships, or 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 Thirteen 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 Thirteen Partnership
Preferred Units and any Parity Partnership Units shall not be entitled to share therein.

     5. Conversion.

        (a) If AIMCO uses all or any portion of the net proceeds from any sale of its equity
securities to pay or prepay all or any portion of the outstanding balance of the Promissory Note, a
number of Class Thirteen Partnership Preferred Units equal to the amount of such net proceeds used
to pay or prepay the outstanding balance of the Promissory Note, divided by the Liquidation
Preference, shall be automatically converted into (i) if such equity securities are shares of
AIMCO’s Class A Common Stock, a number of Partnership Common Units equal to the number of shares
sold by AIMCO, and (ii) in the case of any other equity securities, an equal number of equity
securities of the Partnership of a class or type that are substantially the economic equivalent of
the equity securities sold by AIMCO.

        (b) If AIMCO uses a portion of the net proceeds from a sale of its equity securities to pay or
prepay a portion of the Promissory Note, and contributes the remaining portion of such net proceeds
to the Partnership, the Partnership Units which are issued in exchange for such contribution
pursuant to Section 4.3(E) of the Agreement shall be of the same class or type as those issued
pursuant to Section 5(a)(ii) hereof.

XX-3

 

        (c) The General Partner shall take all actions necessary to effect the creation and issuance
of any equity securities of the Partnership necessary to give effect to Sections 5(a) and 5(b).

        (d) 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 equity securities
on conversion of Class Thirteen Partnership Preferred Units pursuant hereto.

     6. Status of Reacquired Units.

     All Class Thirteen 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 Thirteen Partnership Preferred Units, as to the payment of
distributions and as to distributions of assets upon liquidation, dissolution or winding up, if (i)
such class or series of Partnership Units shall be Class B Partnership Preferred Units, Class C
Partnership Preferred Units, Class D Partnership Preferred Units, Class G Partnership Preferred
Units, Class H Partnership Preferred Units, Class I Partnership Preferred Units, Class J
Partnership Preferred Units, Class K Partnership Preferred Units, Class L Partnership Preferred
Units, Class M Partnership Preferred Units, Class N Partnership Preferred Units, Class O
Partnership Preferred Units, Class P Partnership Preferred Units, Class Q Partnership Preferred
Units, Class R Partnership Preferred Units, Class S Partnership Preferred Units, Class T
Partnership Preferred Units, Class U Partnership Preferred Units, Class V Partnership Preferred
Units, Class W Partnership Preferred Units, Class X 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, Class Seven Partnership Preferred Units, or Class Nine Partnership Preferred Units, or (ii) 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 Thirteen 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”);

XX-4

 

        (b) on a parity with the Class Thirteen 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 Thirteen Partnership
Preferred Units if (i) such class or series of Partnership Units shall be Partnership Common Units,
Class I High Performance Partnership Units, Class II High Performance Partnership Units, Class III
High Performance Partnership Units, Class IV High Performance Partnership Units, Class V High
Performance Partnership Units, Class VI High Performance Partnership Units, Class VII High
Performance Partnership Units, Class Five Partnership Preferred Units, Class Eight Partnership
Preferred Units, Class Ten Partnership Preferred Units, Class Eleven Partnership Preferred Units or
Class Twelve Partnership Preferred Units, or (ii) the holders of such class or series of
Partnership Units and the Class Thirteen 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 Thirteen 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 Thirteen 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”).

     8. Special Allocations.

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

     9. Restrictions on Ownership.

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

XX-5

 

     10. General.

        (a) The ownership of Class Thirteen 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 or any other event
having an effect on the ownership of, Class Thirteen Partnership Preferred Units.

        (b) The rights of the General Partner and the Special Limited Partner, in their capacity as
holders of the Class Thirteen 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 Thirteen Partnership Preferred Units.

XX-6

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