Document:

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                                                                    EXHIBIT 10.6
                       TWENTY-SIXTH AMENDMENT TO THE THIRD
AMENDED AND RESTATED AGREEMENT OF
LIMITED PARTNERSHIP OF AIMCO PROPERTIES, L.P.

         This TWENTY-SIXTH AMENDMENT TO THE THIRD AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP OF AIMCO PROPERTIES, L.P., dated as of July 2, 2001 (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 (the "Agreement"). Capitalized terms used, but not otherwise defined
herein, shall have the respective meanings ascribed thereto in the Agreement.

         WHEREAS, pursuant to Section 4.2.A of the Agreement, the General
Partner is authorized to cause the Partnership to issue Partnership Units with
such designations, preferences and relative, participating, optional or other
special rights, powers and duties as the General Partner shall determine and as
shall be set forth in a written document attached to and made an exhibit to the
Agreement; and

         WHEREAS, the General Partner has determined that it is in the best
interests of the Partnership to issue 5,000 units of a new class of Partnership
Units in consideration of capital contributions to the Partnership in the
aggregate amount of $1,792,764.

         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 HH," in the form attached hereto, which shall be attached to and made a
part of the Agreement.

         Each Person to whom the General Partner shall initially cause the
Partnership to issue any of the Partnership Units described on Exhibit HH shall
be admitted to the Partnership as a Limited Partner with the rights of holders
of the Partnership Units set forth on Exhibit HH. The General Partner shall
amend Exhibit A to the Agreement to reflect the admittance of each such Person
as a Limited Partner and the issuance of such Partnership Units to each such
Person.

2. Except as specifically amended hereby, the terms, covenants, provisions and
conditions of the Agreement shall remain unmodified and continue in full force

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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
                                     -------------------------------------------
                                       Name: Paul McAuliffe
                                       Title:  Vice President

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                                   EXHIBIT HH

                          PARTNERSHIP UNIT DESIGNATION
                                     OF THE
                  CLASS III HIGH PERFORMANCE PARTNERSHIP UNITS
                            OF AIMCO PROPERTIES, L.P.

                  NUMBER OF UNITS AND DESIGNATION.

                  A class of Partnership Units is hereby designated as "Class
III High Performance Partnership Units," and the number of Partnership Units
initially constituting such class shall be five thousand (5,000), subject to
adjustment at the Class III High Performance Valuation Date, as provided in
Section 3 hereof.

                  DEFINITIONS.

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

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

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

         "AIMCO TOTAL RETURN" shall mean the Total Return of the REIT Shares for
the Measurement Period; provided, however, that, for purposes of calculating the
security price of the REIT Shares (i) at the beginning of the Measurement
Period, such price shall be $48.36, and (ii) at the end of the Measurement
Period, such price shall be the average of the daily market prices for twenty
(20) consecutive trading days ending immediately prior to the Class III High
Performance Valuation Date. The market price for any such trading day shall be:

        (a) if the REIT Shares are listed or admitted to trading on any
        securities exchange or The Nasdaq Stock Market's National Market System,
        the volume-weighted average of trading prices on such day, as reported
        by Bloomberg Financial Markets (or another reliable source selected by
        the General Partner), or if no trade takes place on such day, the
        average of the

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        closing bid and asked prices on such day, as reported in the principal
        consolidated transaction reporting system;

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

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

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

         "AGREEMENT" shall mean the Third Amended and Restated Agreement of
Limited Partnership of the Partnership, as amended from time to time.

         "CHANGE OF CONTROL" shall mean the occurrence of any of the following
events:

                  (i) an acquisition (other than directly from the Previous
General Partner) of any voting securities of the Previous General Partner (the
"VOTING SECURITIES") by any "person" (as the term "person" is used for purposes
of Section 13(d) or Section 14(d) of the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT")) immediately after which such person has
"beneficial ownership" (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) ("BENEFICIAL OWNERSHIP") of 20% or more of the combined voting
power of the Previous General Partner's then outstanding Voting Securities;
provided, however, in determining whether a Change in Control has occurred,
Voting Securities that are acquired in a Non-Control Acquisition (as hereinafter
defined) shall not constitute an acquisition that would cause a Change in
Control. "NON-CONTROL ACQUISITION" shall mean an acquisition by (A) an employee
benefit plan (or a trust forming a part thereof) maintained by (1) the Previous
General Partner or (2) any corporation, partnership or other person of which a
majority of its voting power or its equity

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securities or equity interest is owned directly or indirectly by the Previous
General Partner or in which the Previous General Partner serves as a general
partner or manager (a "SUBSIDIARY"), (B) the Previous General Partner or any
Subsidiary, or (C) any person in connection with a Non-Control Transaction (as
hereinafter defined);

                  (ii) the individuals who constitute the Board of Directors of
the Previous General Partner as of January 1, 2001 (the "INCUMBENT BOARD") cease
for any reason to constitute at least two-thirds (2/3) of the Board of
Directors; provided, however, that if the election, or nomination for election
by the Previous General Partner's stockholders, of any new director was approved
by a vote of at least two-thirds (2/3) of the Incumbent Board, such new director
shall be considered as a member of the Incumbent Board; provided, further, that
no individual shall be considered a member of the Incumbent Board if such
individual initially assumed office as a result of either an actual or
threatened "election contest" (as described in Rule 14a-11 promulgated under the
Exchange Act) (an "ELECTION CONTEST") or other actual or threatened solicitation
of proxies or consents by or on behalf of a person other than the Board of
Directors (a "PROXY CONTEST") including by reason of any agreement intended to
avoid or settle any Election Contest or Proxy Contest; or

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

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or substantially all of the assets of the Previous General Partner to any person
(other than a transfer to a Subsidiary).

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

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

         "CLASS III HIGH PERFORMANCE PARTNERSHIP UNIT" shall mean a Partnership
Unit with the designations, preferences and relative, participating, optional or
other special rights, powers and duties as are set forth in this Exhibit HH.

         "CLASS III HIGH PERFORMANCE VALUATION DATE" shall mean the earlier to
occur of (i) January 1, 2003, or (ii) the date on which a Change of Control
occurs.

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

         "DILUTION LIMIT" shall mean an amount equal to 1.0% of the total number
of REIT Shares and Partnership Common Units outstanding on the Class III High

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Performance Valuation Date, on a fully diluted basis (excluding any Partnership
Common Units held by the Previous General Partner or any of its wholly owned
subsidiaries).

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

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

         "HURDLE RATE OF RETURN" shall mean the greater of (i) 23.2% (or if the
Measurement Period is less than two years, a percentage equal to the return over
the Measurement Period that would result in a cumulative return of 23.2% over a
two year period with annual compounding) or (ii) 115% of the Industry Total
Return.

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

         "INDUSTRY PEER GROUP INDEX" shall mean the Morgan Stanley Dean Witter
REIT Index or any other similar industry index approved by the Board of
Directors of the Previous General Partner.

         "MEASUREMENT PERIOD" shall mean the period from and including January
1, 2001 to but excluding the Class III High Performance Valuation Date.

         "OUTPERFORMANCE RETURN" shall mean the amount (measured as a
percentage), if any, by which the AIMCO Total Return exceeds the Hurdle Rate of
Return. If the AIMCO Total Return does not exceed the Hurdle Rate of Return,
"Outperformance Return" shall be 0%.

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

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

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

         ADJUSTMENT OF UNITS AT CLASS III HIGH PERFORMANCE VALUATION DATE.

         On the Class III High Performance Valuation Date, without any action on
the part of the Partnership, the General Partner or the Holder of any Class III
High Performance Unit, each Class III High Performance Partnership Unit shall
automatically be adjusted to equal (a) if the Outperformance Return is 0%, 1/100
of a Class III High Performance Partnership Unit, or (b) if the Outperformance
Return is greater than 0%, the lesser of (i) the Dilution Limit divided by
5,000, or (ii) the quotient obtained by dividing (x) the product of (A) 5% of
the Outperformance Return, multiplied by (B) the AIMCO Equity Capitalization, by
(y) the product of (A) 5,000 and (B) the Value of a REIT Share on the Class III
High Performance Valuation Date. For illustrative purposes, examples of the
calculation of adjustments to the number Class III High Performance Units are
set forth in Annex I hereto.

3. DISTRIBUTIONS.

               Prior to the Class III High Performance Valuation Date, Holders
of Class III High Performance Units shall be entitled to receive distributions
(other than distributions upon liquidation) if, as, when and in the same amounts
and of the same type as may be paid to Holders of Partnership Common Units as if
each Holder of Class III High Performance Partnership Units held 1/100 of a
Partnership Common Unit.

               On and after the Class III High Performance Valuation Date, the
Holders of Class III High Performance Partnership Units shall be entitled to
receive distributions (other than distributions upon liquidation) if, as, when
and in the same amounts and of the same type as may be paid to Holders of
Partnership Common

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Units as if each Holder of Class III High Performance Partnership Units held an
equal number of Partnership Common Units originally issued on the Class III High
Performance Valuation Date.

4. ALLOCATIONS.

               Prior to the Class III High Performance Valuation Date, Net
Income and Net Loss shall be allocated to the Holders of Class III High
Performance Partnership Units as if each such Holder was the Holder of 1/100 of
a Partnership Common Unit.

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

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

          REDEMPTION.

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

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               STATUS OF REACQUIRED UNITS.

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

               RESTRICTIONS ON OWNERSHIP AND TRANSFER.

               The restrictions on Transfer set forth in Sections 11.1.B and
11.3.A of the Agreement shall not apply to Transfers of Class III High
Performance Partnership Units. Prior to the Class III High Performance Valuation
Date, the Class III High Performance Partnership Units shall be owned and held
solely by SMP 2003, L.L.C., a Delaware limited liability company (the "SMP"). On
or after the Class III High Performance Valuation Date, the Class III High
Performance Partnership Units may be Transferred (i) by the SMP to (a) any
Person who is a member (a "MEMBER") of the SMP immediately prior to such
transfer, (b) a Family Member of a Member, (c) a Controlled Entity of a Member,
(c) any Person with respect to whom the Member constitutes a Controlled Entity,
(d) upon the death of a Member, by will or by the laws of descent and
distribution to any Qualified Transferee, and (ii) by any other Person to (a) a
Family Member of a such Person, (b) a Controlled Entity of such Person, (c) any
other Person with respect to whom such Person constitutes a Controlled Entity,
(d) upon the death of such Person, by will or by the laws of descent and
distribution to any Qualified Transferee,

               VOTING RIGHTS.

               Each Holder of Class III High Performance Partnership Units shall
have the same voting and approval rights as a Holder of an equal number of
Partnership Common Units.

           5. ADJUSTMENTS.

               In the event of any Extraordinary Distribution occurring on or
after January 1, 2001, for purposes of determining the Value of a REIT Share or
the AIMCO Total Return, each price of a REIT Share determined as of a date on or
after the Ex-Date for such Extraordinary Distribution shall be adjusted by
multiplying such price by a fraction (i) the numerator of which shall be the
price of a REIT Share on the date immediately prior to such Ex-Date, and (ii)
the denominator of which shall be (A) the price of a REIT Share on the date
immediately prior to such Ex-Date, minus (B) the fair market value on the date
fixed for such determination of the portion of the evidences of indebtedness or
assets so distributed applicable to one REIT Share (as determined by the General
Partner, whose determination shall be

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conclusive); provided further, that such amount shall be so adjusted for each
such Extraordinary Distribution occurring on or after January 1, 2001.
               In the event that, on or after January 1, 2001, the Previous
General Partner (i) declares or pays a dividend on its outstanding REIT Shares
in REIT Shares or makes a distribution to all holders of its outstanding REIT
Shares in REIT Shares, (ii) splits or subdivides its outstanding REIT Shares,
(iii) effects a reverse stock split or otherwise combines its outstanding REIT
Shares into a smaller number of REIT Shares, or (iv) otherwise reclassifies its
outstanding REIT Shares, then, for purposes of determining the Value of a REIT
Share or the AIMCO Total Return, each price of a REIT Share determined as of a
date on or after the Ex-Date for such transaction shall be adjusted by
multiplying such price by a fraction (x) the numerator of which shall be the
number of REIT Shares issued and outstanding on the Determination Date for such
dividend, distribution, split, subdivision, reverse stock split, combination or
reclassification (assuming for such purposes that such dividend, distribution,
split, subdivision, reverse split or combination has occurred as of such time)
and (y) the denominator of which shall be the actual number of REIT Shares
(determined without the above assumption) issued and outstanding on the
Determination Date for such dividend, distribution, split, subdivision, reverse
stock split, combination or reclassification.

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

     6. GENERAL.

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

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                                                                    EXHIBIT 10.7

                      TWENTY-SEVENTH AMENDMENT TO THE THIRD
                        AMENDED AND RESTATED AGREEMENT OF
                  LIMITED PARTNERSHIP OF AIMCO PROPERTIES, L.P.

         This TWENTY-SEVENTH AMENDMENT TO THE THIRD AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF AIMCO PROPERTIES, L.P., dated as of July 2,
2001 (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 (the "Agreement"). Capitalized terms used, but not
otherwise defined herein, shall have the respective meanings ascribed thereto in
the Agreement.

         WHEREAS, pursuant to Section 4.2.A of the Agreement, the General
Partner is authorized to cause the Partnership to issue Partnership Units with
such designations, preferences and relative, participating, optional or other
special rights, powers and duties as the General Partner shall determine and as
shall be set forth in a written document attached to and made an exhibit to the
Agreement; and

         WHEREAS, the General Partner has determined that it is in the best
interests of the Partnership to issue 5,000 units of a new class of Partnership
Units in consideration of capital contributions to the Partnership in the
aggregate amount of $1,792,764.

         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 II," in the form attached hereto, which shall be attached to and made a
part of the Agreement.

2. Each Person to whom the General Partner shall initially cause the Partnership
to issue any of the Partnership Units described on Exhibit II shall be admitted
to the Partnership as a Limited Partner with the rights of holders of the
Partnership Units set forth on Exhibit II. The General Partner shall amend
Exhibit A to the Agreement to reflect the admittance of each such Person as a
Limited Partner and the issuance of such Partnership Units to each such Person.

3. Except as specifically amended hereby, the terms, covenants, provisions and
conditions of the Agreement shall remain unmodified and continue in full force

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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
                                                 ------------------------------
                                                 Name: Paul McAuliffe
                                                 Title:  Vice President

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                                   EXHIBIT II

                          PARTNERSHIP UNIT DESIGNATION
                                     OF THE
                   CLASS IV HIGH PERFORMANCE PARTNERSHIP UNITS
                            OF AIMCO PROPERTIES, L.P.

         1.       NUMBER OF UNITS AND DESIGNATION.

         A class of Partnership Units is hereby designated as "Class IV High
Performance Partnership Units," and the number of Partnership Units initially
constituting such class shall be five thousand (5,000), subject to adjustment at
the Class IV High Performance Valuation Date, as provided in Section 3 hereof.

         2.       DEFINITIONS.

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

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

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

         "AIMCO TOTAL RETURN" shall mean the Total Return of the REIT Shares for
the Measurement Period; provided, however, that, for purposes of calculating the
security price of the REIT Shares (i) at the beginning of the Measurement
Period, such price shall be $48.36, and (ii) at the end of the Measurement
Period, such price shall be the average of the daily market prices for twenty
(20) consecutive trading days ending immediately prior to the Class IV High
Performance Valuation Date. The market price for any such trading day shall be:

          (a) if the REIT Shares are listed or admitted to trading on any
          securities exchange or The Nasdaq Stock Market's National Market
          System, the volume-weighted average of trading prices on such day, as
          reported by Bloomberg Financial Markets (or another reliable source
          selected by the General Partner), or if no trade takes place on such
          day, the average of the

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          closing bid and asked prices on such day, as reported in the principal
          consolidated transaction reporting system;

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

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

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

         "AGREEMENT" shall mean the Third Amended and Restated Agreement of
Limited Partnership of the Partnership, as amended from time to time.

         "CHANGE OF CONTROL" shall mean the occurrence of any of the following
events:

                  (i) an acquisition (other than directly from the Previous
General Partner) of any voting securities of the Previous General Partner (the
"VOTING SECURITIES") by any "person" (as the term "person" is used for purposes
of Section 13(d) or Section 14(d) of the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT")) immediately after which such person has
"beneficial ownership" (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) ("BENEFICIAL OWNERSHIP") of 20% or more of the combined voting
power of the Previous General Partner's then outstanding Voting Securities;
provided, however, in determining whether a Change in Control has occurred,
Voting Securities that are acquired in a Non-Control Acquisition (as hereinafter
defined) shall not constitute an acquisition that would cause a Change in
Control. "NON-CONTROL ACQUISITION" shall mean an acquisition by (A) an employee
benefit plan (or a trust forming a part thereof) maintained by (1) the Previous
General Partner or (2) any corporation, partnership or other person of which a
majority of its voting power or its equity

                                      II-2

<PAGE>   5

securities or equity interest is owned directly or indirectly by the Previous
General Partner or in which the Previous General Partner serves as a general
partner or manager (a "SUBSIDIARY"), (B) the Previous General Partner or any
Subsidiary, or (C) any person in connection with a Non-Control Transaction (as
hereinafter defined);

                  (ii) the individuals who constitute the Board of Directors of
the Previous General Partner as of January 1, 2001 (the "INCUMBENT BOARD") cease
for any reason to constitute at least two-thirds (2/3) of the Board of
Directors; provided, however, that if the election, or nomination for election
by the Previous General Partner's stockholders, of any new director was approved
by a vote of at least two-thirds (2/3) of the Incumbent Board, such new director
shall be considered as a member of the Incumbent Board; provided, further, that
no individual shall be considered a member of the Incumbent Board if such
individual initially assumed office as a result of either an actual or
threatened "election contest" (as described in Rule 14a-11 promulgated under the
Exchange Act) (an "ELECTION CONTEST") or other actual or threatened solicitation
of proxies or consents by or on behalf of a person other than the Board of
Directors (a "PROXY CONTEST") including by reason of any agreement intended to
avoid or settle any Election Contest or Proxy Contest; or

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

                                      II-3

<PAGE>   6

or substantially all of the assets of the Previous General Partner to any person
(other than a transfer to a Subsidiary).

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

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

         "CLASS IV HIGH PERFORMANCE PARTNERSHIP UNIT" shall mean a Partnership
Unit with the designations, preferences and relative, participating, optional or
other special rights, powers and duties as are set forth in this Exhibit II.

         "CLASS IV HIGH PERFORMANCE VALUATION DATE" shall mean the earlier to
occur of (i) January 1, 2004, or (ii) the date on which a Change of Control
occurs.

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

         "DILUTION LIMIT" shall mean an amount equal to 1.5% of the total number
of REIT Shares and Partnership Common Units outstanding on the Class IV High

                                      II-4

<PAGE>   7

Performance Valuation Date, on a fully diluted basis (excluding any Partnership
Common Units held by the Previous General Partner or any of its wholly owned
subsidiaries).

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

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

         "HURDLE RATE OF RETURN" shall mean the greater of (i) 36.8% (or if the
Measurement Period is less than three years, a percentage equal to the return
over the Measurement Period that would result in a cumulative return of 36.8%
over a three year period with annual compounding) or (ii) 115% of the Industry
Total Return.

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

         "INDUSTRY PEER GROUP INDEX" shall mean the Morgan Stanley Dean Witter
REIT Index or any other similar industry index approved by the Board of
Directors of the Previous General Partner.

         "MEASUREMENT PERIOD" shall mean the period from and including January
1, 2001 to but excluding the Class IV High Performance Valuation Date.

         "OUTPERFORMANCE RETURN" shall mean the amount (measured as a
percentage), if any, by which the AIMCO Total Return exceeds the Hurdle Rate of
Return. If the AIMCO Total Return does not exceed the Hurdle Rate of Return,
"Outperformance Return" shall be 0%.

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

                                      II-5

<PAGE>   8

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

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

         3.       ADJUSTMENT OF UNITS AT CLASS IV HIGH PERFORMANCE VALUATION
                  DATE.

                  On the Class IV High Performance Valuation Date, without any
action on the part of the Partnership, the General Partner or the Holder of any
Class IV High Performance Unit, each Class IV High Performance Partnership Unit
shall automatically be adjusted to equal (a) if the Outperformance Return is 0%,
1/100 of a Class IV High Performance Partnership Unit, or (b) if the
Outperformance Return is greater than 0%, the lesser of (i) the Dilution Limit
divided by 5,000, or (ii) the quotient obtained by dividing (x) the product of
(A) 5% of the Outperformance Return, multiplied by (B) the AIMCO Equity
Capitalization, by (y) the product of (A) 5,000 and (B) the Value of a REIT
Share on the Class IV High Performance Valuation Date. For illustrative
purposes, examples of the calculation of adjustments to the number Class IV High
Performance Units are set forth in Annex I hereto.

         4.       DISTRIBUTIONS.

                  (a) Prior to the Class IV High Performance Valuation Date,
Holders of Class IV High Performance Units shall be entitled to receive
distributions (other than distributions upon liquidation) if, as, when and in
the same amounts and of the same type as may be paid to Holders of Partnership
Common Units as if each Holder of Class IV High Performance Partnership Units
held 1/100 of a Partnership Common Unit.

                  (b) On and after the Class IV High Performance Valuation Date,
the Holders of Class IV High Performance Partnership Units shall be entitled to
receive distributions (other than distributions upon liquidation) if, as, when
and in the same amounts and of the same type as may be paid to Holders of
Partnership Common

                                      II-6

<PAGE>   9

Units as if each Holder of Class IV High Performance Partnership Units held an
equal number of Partnership Common Units originally issued on the Class IV High
Performance Valuation Date.

         5.       ALLOCATIONS.

                  (a) Prior to the Class IV High Performance Valuation Date, Net
Income and Net Loss shall be allocated to the Holders of Class IV High
Performance Partnership Units as if each such Holder was the Holder of 1/100 of
a Partnership Common Unit.

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

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

         6.      REDEMPTION.

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

                                      II-7

<PAGE>   10

         7.      STATUS OF REACQUIRED UNITS.

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

         8.      RESTRICTIONS ON OWNERSHIP AND TRANSFER.

         The restrictions on Transfer set forth in Sections 11.1.B and 11.3.A of
the Agreement shall not apply to Transfers of Class IV High Performance
Partnership Units. Prior to the Class IV High Performance Valuation Date, the
Class IV High Performance Partnership Units shall be owned and held solely by
SMP 2004, L.L.C., a Delaware limited liability company (the "SMP"). On or after
the Class IV High Performance Valuation Date, the Class IV High Performance
Partnership Units may be Transferred (i) by the SMP to (a) any Person who is a
member (a "MEMBER") of the SMP immediately prior to such transfer, (b) a Family
Member of a Member, (c) a Controlled Entity of a Member, (c) any Person with
respect to whom the Member constitutes a Controlled Entity, (d) upon the death
of a Member, by will or by the laws of descent and distribution to any Qualified
Transferee, and (ii) by any other Person to (a) a Family Member of a such
Person, (b) a Controlled Entity of such Person, (c) any other Person with
respect to whom such Person constitutes a Controlled Entity, (d) upon the death
of such Person, by will or by the laws of descent and distribution to any
Qualified Transferee,

         9.      VOTING RIGHTS.

         Each Holder of Class IV High Performance Partnership Units shall have
the same voting and approval rights as a Holder of an equal number of
Partnership Common Units.

         10.      ADJUSTMENTS.

                  (a) In the event of any Extraordinary Distribution occurring
on or after January 1, 2001, for purposes of determining the Value of a REIT
Share or the AIMCO Total Return, each price of a REIT Share determined as of a
date on or after the Ex-Date for such Extraordinary Distribution shall be
adjusted by multiplying such price by a fraction (i) the numerator of which
shall be the price of a REIT Share on the date immediately prior to such
Ex-Date, and (ii) the denominator of which shall be (A) the price of a REIT
Share on the date immediately prior to such Ex-Date, minus (B) the fair market
value on the date fixed for such determination of the portion of the evidences
of indebtedness or assets so distributed applicable to one REIT Share (as
determined by the General Partner, whose determination shall be

                                      II-8

<PAGE>   11

conclusive); provided further, that such amount shall be so adjusted for each
such Extraordinary Distribution occurring on or after January 1, 2001.

                  (b) In the event that, on or after January 1, 2001, the
Previous General Partner (i) declares or pays a dividend on its outstanding REIT
Shares in REIT Shares or makes a distribution to all holders of its outstanding
REIT Shares in REIT Shares, (ii) splits or subdivides its outstanding REIT
Shares, (iii) effects a reverse stock split or otherwise combines its
outstanding REIT Shares into a smaller number of REIT Shares, or (iv) otherwise
reclassifies its outstanding REIT Shares, then, for purposes of determining the
Value of a REIT Share or the AIMCO Total Return, each price of a REIT Share
determined as of a date on or after the Ex-Date for such transaction shall be
adjusted by multiplying such price by a fraction (x) the numerator of which
shall be the number of REIT Shares issued and outstanding on the Determination
Date for such dividend, distribution, split, subdivision, reverse stock split,
combination or reclassification (assuming for such purposes that such dividend,
distribution, split, subdivision, reverse split or combination has occurred as
of such time) and (y) the denominator of which shall be the actual number of
REIT Shares (determined without the above assumption) issued and outstanding on
the Determination Date for such dividend, distribution, split, subdivision,
reverse stock split, combination or reclassification.

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

         11.      GENERAL.

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

                                      II-9

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