APARTMENT INVESTMENT & MANAGEMENT CO, 10-K, 1999-03-31

APARTMENT INVESTMENT & MANAGEMENT CO
10-K, 1999-03-31
REAL ESTATE INVESTMENT TRUSTS

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998
OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER 1-13232

APARTMENT INVESTMENT AND MANAGEMENT COMPANY
(Exact name of registrant as specified in its charter)

<TABLE>
<S> <C>
MARYLAND 84-1259577
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization) 80222-4348
1873 SOUTH BELLAIRE STREET, SUITE 1700, (Zip Code)
DENVER, CO
(Address of principal executive offices)
</TABLE>

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Registrant's telephone number, including area code: (303) 757-8101

Securities registered pursuant to Section 12(b) of the Act:

<TABLE>
<CAPTION>
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
------------------- ---------------------
<S> <C>
Class A Common Stock New York Stock Exchange
Class C Cumulative Preferred Stock New York Stock Exchange
Class D Cumulative Preferred Stock New York Stock Exchange
Class G Cumulative Preferred Stock New York Stock Exchange
Class H Cumulative Preferred Stock New York Stock Exchange
Class K Convertible Cumulative Preferred Stock New York Stock Exchange
</TABLE>

Securities registered pursuant to Section 12(g) of the Act: NONE

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

As of March 11, 1999, there were 61,656,837 shares of Class A Common Stock
and no shares of Class B Common Stock outstanding. The aggregate market value of
the voting and non-voting common stock held by non-affiliates of the registrant,
was approximately $2,289.0 million as of March 11, 1999.
---------------------

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the proxy statement for the registrant's 1999 annual meeting of
stockholders are incorporated by reference into Part III of this Annual Report.

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APARTMENT INVESTMENT AND MANAGEMENT COMPANY

TABLE OF CONTENTS

ANNUAL REPORT ON FORM 10-K
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998

<TABLE>
<CAPTION>
ITEM PAGE
- ---- ----
<S> <C> <C>
PART I
1. Business.................................................... 1
1998 Developments........................................... 2
Financial Information About Industry Segments............... 6
Operating and Financial Strategies.......................... 6
Growth Strategies........................................... 7
Property Management Strategies.............................. 8
Taxation of the Company..................................... 8
Competition................................................. 8
Regulation.................................................. 9
Insurance................................................... 10
Employees................................................... 10
2. Properties.................................................. 11
3. Legal Proceedings........................................... 12
4. Submission of Matters to a Vote of Security Holders......... 12

PART II

Market for the Registrant's Common Equity and Related
5. Stockholder Matters....................................... 13
6. Selected Financial Data..................................... 15
Management's Discussion and Analysis of Financial Condition
7. and Results of Operations................................. 16
Quantitative and Qualitative Disclosures About Market
7a. Risk...................................................... 27
8. Financial Statements and Supplementary Data................. 28
Changes in and Disagreements with Accountants on Accounting
9. and Financial Disclosure.................................. 28

PART III

10. Directors and Executive Officers of the Registrant.......... 28
11. Executive Compensation...................................... 31
Security Ownership of Certain Beneficial Owners and
12. Management................................................ 31
13. Certain Relationships and Related Transactions.............. 31

PART IV

Exhibits, Financial Statement Schedules and Reports on Form
14. 8-K....................................................... 32
</TABLE>
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PART I

INTRODUCTION

The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements in certain circumstances. Certain
information included in this Report, the company's Annual Report to Shareholders
and other filings (collectively "SEC Filings") under the Securities Act of 1933,
as amended, and the Securities Exchange Act of 1934, as amended (as well as
information communicated orally or in writing between the dates of such SEC
Filings) contains or may contain information that is forward looking, including,
without limitation, statements regarding the effect of acquisitions, the
Company's future financial performance and the effect of government regulations.
Actual results may differ materially from those described in the forward looking
statements and will be affected by a variety of risks and factors including,
without limitation, national and local economic conditions, the general level of
interest rates, terms of governmental regulations that affect the company and
interpretations of those regulations, the competitive environment in which the
company operates, financing risks, including the risk that the company's cash
flows from operations may be insufficient to meet required payments of principal
and interest, real estate risks, including variations of real estate values and
the general economic climate in local markets and competition for tenants in
such markets, acquisition and development risks, including failure of such
acquisitions to perform in accordance with projections, and possible
environmental liabilities, including costs which may be incurred due to
necessary remediation of contamination of properties presently owned or
previously owned by the company. In addition, the company's continued
qualification as a real estate investment trust involves the application of
highly technical and complex provisions of the Internal Revenue Code. Readers
should carefully review the company's financial statements and the notes
thereto, as well as the risk factors described in the SEC filings.

ITEM 1. BUSINESS.

Apartment Investment and Management Company ("AIMCO"), a Maryland
corporation formed on January 10, 1994, is a self-administered and self-managed
REIT engaged in the ownership, acquisition, development, expansion and
management of multi-family apartment properties. As of December 31, 1998, we
owned or managed 379,363 apartment units in 2,147 properties located in 49
states, the District of Columbia and Puerto Rico. On July 24, 1994, AIMCO
completed its initial public offering and engaged in a business combination and
consummated a series of related transactions which enabled it to continue and
expand the property management and related businesses of Property Asset
Management, L.L.C., Limited Liability Company, and its affiliated companies, and
PDI Realty Enterprises, Inc. (collectively, the "AIMCO Predecessors"). Based on
apartment unit data compiled by the National Multi Housing Council, we believe
that, as of December 31, 1998, we were the largest owner and manager of
multifamily apartment properties in the United States. As of December 31, 1998,
we:

- owned or controlled 63,086 units in 242 apartment properties;

- held an equity interest in 170,243 units in 902 apartment properties; and

- managed 146,034 units in 1,003 apartment properties for third party
owners and affiliates.

We conduct substantially all of our operations through our operating
partnership, AIMCO Properties, L.P. Through wholly owned subsidiaries, we act as
the sole general partner of the AIMCO operating partnership. As of December 31,
1998, we owned approximately an 83% interest in the AIMCO operating partnership.
We manage apartment properties for third parties and affiliates through
unconsolidated subsidiaries that we refer to as the "management companies."
Generally, when we refer to "we," "us" or the "Company" in this annual report on
Form 10-K, we are referring to AIMCO, the AIMCO operating partnership, the
management companies and their respective subsidiaries. We refer to interests in
the AIMCO operating partnership that are held by third parties as "OP Units."

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The Company's principal executive offices are located at 1873 South
Bellaire Street, Suite 1700, Denver, Colorado 80222-4348 and its telephone
number is (303) 757-8101.

1998 DEVELOPMENTS

Ambassador Acquisition

On May 8, 1998, Ambassador Apartments, Inc. ("Ambassador") was merged with
and into AIMCO, with AIMCO being the surviving corporation. The purchase price
of $713.6 million was comprised of $90.3 million in cash, $372.0 million of
assumed debt and up to approximately 6.6 million shares of Class A Common Stock
valued at $251.3 million. Pursuant to the Ambassador merger agreement, each
outstanding share of Ambassador common stock was converted into the right to
receive 0.553 shares of AIMCO Class A Common Stock. Concurrently, all
outstanding options to purchase Ambassador common stock were converted into cash
or options to purchase AIMCO Class A Common Stock, at the same conversion ratio.
Contemporaneously with the consummation of the Ambassador merger, a subsidiary
of the AIMCO operating partnership merged with Ambassador's operating
partnership and each outstanding unit of limited partnership interest in the
Ambassador operating partnership was converted into the right to receive 0.553
OP Units. Prior to the merger, Ambassador was a self-administered and
self-managed real estate investment trust engaged in the ownership and
management of garden-style apartment properties leased primarily to middle
income tenants. Ambassador owned 52 apartment communities with a total of 15,728
units located in Arizona, Colorado, Florida, Georgia, Illinois, Tennessee and
Texas, and managed one property containing 252 units for an unrelated third
party.

Insignia Acquisition

On October 1, 1998, Insignia Financial Group, Inc., a Delaware corporation,
was merged with and into AIMCO with AIMCO being the surviving corporation. The
purchase price of $1,125.7 million was comprised of the issuance of up to
approximately 8.9 million shares of Class E Cumulative Convertible Preferred
Stock (the "Class E Preferred Stock") valued at $301.2 million, $670.1 million
in assumed debt and liabilities (including the $50 million special dividend,
assumed liabilities of Insignia Properties Trust and transaction costs), $149.5
million in assumed mandatory redeemable convertible preferred securities, and
$4.9 million in cash. The merger was accounted for as a purchase. The Class E
Preferred Stock entitled the holders thereof to receive the same cash dividends
per share as holders of Class A Common Stock. In addition, on January 15, 1999,
holders of Class E Preferred Stock received a special dividend in an aggregate
amount of approximately $50 million, and all outstanding shares of Class E
Preferred Stock automatically converted into an equal number of shares of Class
A Common Stock.

As a result of the Insignia merger, AIMCO acquired; (i) Insignia's
interests in Insignia Properties Trust, a Maryland REIT ("IPT"), which was a
majority owned subsidiary of Insignia; (ii) Insignia's interest in Insignia
Properties, L.P., IPT's operating partnership ("IPLP"); (iii) 100% of the
ownership of the Insignia entities that provide multifamily property management
and partnership administrative services; (iv) Insignia's interest in multifamily
co-investments; (v) Insignia's ownership of subsidiaries that control
multifamily properties not included in IPT; (vi) Insignia's limited partner
interests in public and private syndicated real estate limited partnerships; and
(vii) assets incidental to the foregoing businesses (collectively, the "Insignia
Multifamily Business").

IPT Merger

As a result of the Insignia merger, AIMCO acquired approximately 51% of the
outstanding shares of beneficial interest of IPT. On February 26, 1999, IPT was
merged into AIMCO. Pursuant to the merger, each of the outstanding shares of IPT
that were not held by AIMCO were converted into the right to receive 0.3601
shares of AIMCO Class A Common Stock, resulting in the issuance of approximately
4.3 million shares of AIMCO Class A Common Stock (valued at approximately $158.8
million).

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Individual Property Acquisitions

During the year ended December 31, 1998, the Company purchased or acquired
control of 30 properties consisting of 6,707 apartment units for total
consideration of $316.5 million. The Company's purchase price consisted of
$172.3 million in assumed mortgage obligations, $96.0 million in cash, and $48.2
million of OP Units.

Tender Offers

During 1998, the Company made separate offers to the limited partners of
308 partnerships to acquire their limited partnerships interests. The Company
paid approximately $84.5 million in cash and OP Units to acquire limited
partnership interests pursuant to the offers.

Property Dispositions

In 1998, the Company sold eleven properties for an aggregate sales price of
$85.3 million. Cash proceeds to the Company from the sales were used to repay a
portion of the Company's outstanding short-term indebtedness. The results of
operations of six of these properties were accounted for by the Company under
the equity method. The Company recognized a gain of approximately $4.7 million
on the disposition of the five consolidated properties.

Debt Assumptions and Financings

During the year ended December 31, 1998, the Company assumed or incurred
new non-recourse indebtedness totalling $544.4 million in connection with the
acquisition of 82 apartment properties.

In January 1998, the Company entered into a new $50 million credit
agreement with Bank of America National Trust and Savings Association and Bank
Boston, N.A. The AIMCO operating partnership is the borrower under the credit
agreement, but all obligations thereunder are guaranteed by AIMCO and certain of
its subsidiaries. In October 1998, the Company amended and restated the credit
agreement. The agreement now provides for a revolving credit facility of up to
$100 million, including a swing line of up to $30 million. The credit facility
matures on September 30, 1999, unless extended, at the discretion of the
lenders. The credit agreement also provides for the conversion of the revolving
facility into a three-year term loan. Under the credit agreement, as amended in
January 1999, loans bear interest at LIBOR or Bank of America's reference rate,
at the election of the Company, plus an applicable margin. The margins range
from 2.25% to 2.75% for a LIBOR rate borrowing and 0.75% to 1.25% for a base
rate borrowing, both dependant upon the total balance outstanding relative to
the calculated borrowing base value. The balance outstanding under the credit
facility was $84.3 million as of December 31, 1998.

In February 1998, the AIMCO operating partnership, entered into a five year
$50 million secured credit facility agreement with Washington Mortgage Financial
Group, Ltd. AIMCO and certain subsidiaries guaranteed loans under the agreement
and the guarantees were secured by certain of their assets, including four
apartment properties and two mortgage notes. Under the agreement, advances to
the AIMCO operating partnership were funded with the proceeds from the sale to
investors of mortgage-backed securities issued by Fannie Mae and secured by the
advance and an interest in the collateral. The interest rate on each advance was
determined by investor bids for such mortgage-backed securities, plus a margin.
In February 1999, the Company terminated the credit facility and repaid all
outstanding borrowings with proceeds from new long-term, fully amortizing
indebtedness secured by certain properties that previously secured the credit
facility.

In October 1998, the AIMCO operating partnership and AIMCO entered into an
interim term loan agreement with Lehman Brothers Inc. and one of its affiliates,
and borrowed $300 million thereunder. The loan is unsecured and matures on
September 30, 1999. The proceeds were used to finance the Insignia merger and
related fees and expenses, to refinance existing indebtedness, and for general
working capital purposes. The loan bears interest at a base rate or the rate at
which eurodollar deposits for one month are offered in the interbank eurodollar
market, plus, in either case, a margin which averages 1.375% to 2.208% in the
case of base rate loans, and 2.375% to 3.208% in the case of eurodollar loans.
The base rate will be the higher of

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(i) the primary rate of Citibank, N.A., (ii) the secondary market rate for three
month certificates of deposit plus 1%, or (iii) the federal funds effective rate
plus 0.5%. In November 1998, the Company used proceeds of $100 million from the
sale of AIMCO's Class J Cumulative Preferred Stock to pay down the loan. As of
December 31, 1998, there was $196 million of indebtedness outstanding under the
loan agreement. In February 1999, net proceeds of $115.0 million from the sale
of 5,000,000 shares of AIMCO's Class K Convertible Cumulative Preferred Stock
were used to further pay down the loan.

In October 1998, as a result of the acquisition of Insignia, AIMCO,
directly or through its subsidiaries, became the owner of approximately 51% of
IPT. Prior to the acquisition, IPT's operating partnership had entered into a
$50 million revolving credit agreement with Lehman Commercial Paper, Inc., as
syndication agent, and First Union National Bank, as administrative agent.
Borrowings under the credit agreement may be used to finance certain permitted
investments and refinance certain other investments. The credit agreement
matures on December 30, 2000. The credit agreement provides for interest at an
annual rate equal to (i) 2.50% plus a rate based on LIBOR or (ii) 0.50% plus a
base rate that is the higher of the prime rate or the Federal Funds rate. As of
December 31, 1998, there was $30 million outstanding under the credit agreement.

In December 1998, the Company completed the refinancing of $222 million in
variable rate tax-exempt debt assumed in conjunction with the May 1998 merger
with Ambassador. The debt was secured by 27 properties located in Texas,
Arizona, Tennessee and Illinois. Through the refinancing, the Company converted
the previous tax-exempt debt to $204 million in fixed rate, fully amortizing
tax-exempt debt secured by 26 properties. The new debt has a weighted average
interest rate of 5.8% and matures in 23 years. The Company also incurred $7.1
million of taxable debt secured by three of the properties, repaid $11.4 million
of the previous tax-exempt debt, released $21.5 million in cash reserves and
impound accounts held by the prior mortgagors, and released two properties that
served as additional collateral for the previous debt.

In February and March 1999, the Company incurred in the aggregate $83.4
million of long-term, fixed rate, fully amortizing mortgage debt secured by 13
properties in separate loan transactions. The Company used the $81.5 million of
net proceeds from the financings to repay debt under the interim loan agreement
with Lehman Brothers Inc., to repay debt under its credit facility with Bank of
America National Trust and Savings Association and Bank, Boston, N.A. and to
provide working capital. As of March 11, 1999, the balance outstanding under the
interim loan agreement was $25 million, under the credit facility was $74.8
million, and under the IPT credit agreement was $45 million. The amount
available under the credit facility at March 11, 1999 was $24 million and under
the IPT credit agreement was $5 million.

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Equity Offerings

In 1998, the Company raised proceeds of over $391 million in three public
offerings and three private placements of equity securities. These transactions
are summarized below:

<TABLE>
<CAPTION>
NUMBER
OF TOTAL PROCEEDS DIVIDEND OR
SHARES IN DISTRIBUTION
TRANSACTION TYPE DATE OR UNITS MILLIONS RATE
- ----------- ------- --------- --------- -------------- -----------------
<S> <C> <C> <C> <C> <C>
Class D Cumulative Preferred
Stock of AIMCO................. Public Feb. 1998 4,200,000 $105.00 8.75%
Class G Cumulative Preferred
Stock of AIMCO................. Public Jul. 1998 4,050,000 $101.25 9.375%
Class H Cumulative Preferred
Stock of AIMCO................. Public Aug. 1998 2,000,000 $ 50.00 9.5%
Class J Cumulative Convertible
Preferred Stock of AIMCO....... Private Nov. 1998 1,250,000 $100.00 (1)
Preferred Partnership Units of
Ambassador Apartments, L.P..... Private Dec. 1998 1,400,000 $ 30.85 7.75%
Warrants to purchase AIMCO Class
A Common Stock................. Private Dec. 1998 875,000 $ 4.15 N/A
-------
TOTAL PROCEEDS 1998............................................... $391.25
Class K Convertible Cumulative
Preferred Stock of AIMCO....... Public Feb. 1999 5,000,000 $125.00 (2)
</TABLE>

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(1) Holders of Class J Preferred Stock are entitled to receive cash dividends at
the rate of 7% per annum of the $100 liquidation preference (equivalent to
$7 per annum per share) for the period from November 6, 1998 until November
15, 1998, 8% per annum of the $100 liquidation preference (equivalent to $8
per annum per share) for the period from November 15, 1998 until November
15, 1999, 9% per annum of the $100 liquidation preference (equivalent to $9
per annum per share) for the period from November 15, 1999 until November
15, 2000, and 9 1/2% per annum of the $100 liquidation preference
(equivalent to $9.50 per annum per share) thereafter.

(2) For three years from the date of original issuance, the Class K Preferred
Stock dividend will be in an amount per share equal to the greater of (i)
$2.00 per year (equivalent to 8% of the $25 liquidation preference), or (ii)
the cash dividends payable on the number of shares of Class A Common Stock
(or portion thereof) into which a share of Class K Preferred Stock is
convertible. Beginning with the third anniversary of the date of original
issuance, the Class K Preferred Stock dividend per share will be increased
to the greater of (i) $2.50 per year (equivalent to 10% of the $25
liquidation preference), or (ii) the cash dividends payable on the number of
shares of Class A Common Stock (or portion thereof) into which a share of
Class K Preferred Stock is convertible.

Pending acquisitions

In the ordinary course of business, the Company engages in discussions and
negotiations regarding the acquisition of apartment properties (including
interests in entities that own apartment properties). The Company frequently
enters into contracts and nonbinding letters of intent with respect to the
purchase of properties. These contracts are typically subject to certain
conditions and permit the Company to terminate the contract in its sole and
absolute discretion if it is not satisfied with the results of its due diligence
investigation of the properties. The Company believes that such contracts
essentially result in the creation of an option on the subject properties and
give the Company greater flexibility in seeking to acquire properties. As of
March 8, 1999, the Company had under contract or letter of intent an aggregate
of 32 multi-family apartment properties with a maximum aggregate purchase price
of $571.1 million, including estimated capital improvements, which, in some
cases, may be paid in the form of assumption of existing debt. All such
contracts are subject to termination by the Company as described above. No
assurance can be given that any

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of these possible acquisitions will be completed or, if completed, that they
will be accretive on a per share basis.

FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS

The Company operates in one industry segment, the ownership and management
of real estate properties. See the consolidated financial statements and notes
thereto included elsewhere in this Annual Report on Form 10-K for financial
information relating to the Company.

OPERATING AND FINANCIAL STRATEGIES

The Company's operating and financing strategies to attempt to meet its
objective of providing long-term, predictable funds from operations ("FFO") per
share of Class A Common Stock, less an allowance for Capital Replacements of
$300 per apartment unit, include the following:

- Acquisition of Properties at Less Than Replacement Cost. AIMCO attempts
to acquire properties at a significant discount to their replacement
cost.

- Geographic Diversification. AIMCO operates in 49 states, the District of
Columbia and Puerto Rico. This geographic diversification insulates the
Company, to some degree, from inevitable downturns in any one market.

- Market Growth. The Company seeks to operate in markets where population
and employment growth are expected to exceed the national average and
where it believes it can become a regionally significant owner or manager
of properties. For the period from 1996 through 1999, annual population
and employment growth rates in AIMCO's five largest regional markets are
forecasted to be 2.2% and 3.6%, respectively.

- Product Diversification. The Company's portfolio of apartment properties
spans a wide range of apartment community types, both within and among
markets.

- Capital Replacement. AIMCO believes that the physical condition and
amenities of its apartment communities are important factors in its
ability to maintain and increase rental rates. The Company allocates
approximately $300 annually per owned apartment unit for capital
replacements, and reserves unexpended amounts for future capital
replacements.

- Debt Financing. AIMCO's strategy is generally to incur debt to increase
its return on equity while maintaining acceptable interest coverage
ratios. AIMCO seeks to maintain a ratio of free cash flow to combined
interest expense and preferred stock dividends of between 2:1 and 3:1,
and a ratio of earnings before interest, income taxes, depreciation and
amortization (with certain adjustments and after a provision of
approximately $300 per owned apartment unit) to debt service of at least
2:1, and to match debt maturities to the character of the assets
financed. For the year ended December 31, 1998, the Company was within
these targets. The Company uses predominantly long-term, fixed-rate and
self-amortizing non-recourse debt in order to avoid the refunding or
repricing risks of short-term borrowings. The Company also uses
short-term debt financing to fund acquisitions and generally expects to
refinance such borrowings with proceeds from equity offerings or
long-term debt financings. As of December 31, 1998, approximately 25.2%
of AIMCO's outstanding debt was short-term debt and 74.8% was long-term
debt. As of March 11, 1999, approximately 9.5% of AIMCO's outstanding
debt was short-term debt and 90.5% was long-term debt.

- Dispositions. From time to time, the Company sells properties that do not
meet its return on investment criteria or that are located in areas where
AIMCO does not believe that the long-term neighborhood values justify the
continued investment in the properties.

- Dividend Policy. AIMCO pays dividends on its Class A Common Stock to
share its profitability with its stockholders. The Company distributed
65.8%, 66.5% and 72.3% of FFO to holders of Class A Common Stock for the
years ended December 31, 1998, 1997 and 1996, respectively. It is the
present policy of the Board of Directors to increase the dividend
annually in an amount equal to one-half of the
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projected increase in FFO, adjusted for capital replacements, subject to
minimum distribution requirements to maintain its REIT status.

GROWTH STRATEGIES

The Company seeks growth through two primary sources -- acquisitions and
internal expansion.

Acquisition Strategies.

The Company believes its acquisition strategies will increase profitability
and predictability of earnings by increasing its geographic diversification,
economies of scale and opportunities to provide ancillary services to tenants at
its properties. Since AIMCO's initial public offering in July 1994, the Company
has completed numerous acquisition transactions, expanding its portfolio of
owned or managed properties from 132 apartment properties with 29,343 units to
2,147 apartment properties with 379,363 units as of December 31, 1998. The
Company acquires additional properties primarily in three ways:

- Direct Acquisitions. AIMCO may directly, including through mergers and
other business combinations, acquire individual properties or portfolios
of properties and controlling interests in entities that own or control
such properties or portfolios. To date, a significant portion of AIMCO's
growth has resulted from the acquisition of other companies that owned or
controlled properties.

- Acquisition of Managed Properties. AIMCO believes that its property
management operations support its acquisition activities. Since AIMCO's
initial public offering, the Company has acquired from its managed
portfolio 15 properties comprising 4,432 units for total consideration of
$155.4 million.

- Increasing its Interest in Partnerships. For properties where AIMCO owns
a general partnership interest in the property-owning partnership, the
Company may seek to acquire, subject to its fiduciary duties, the
interests in the partnership held by third parties for cash or, in some
cases, in exchange for OP Units. AIMCO has completed tender offers with
respect to 308 partnerships and has purchased additional interests in
such partnerships for cash and for OP Units.

Internal Growth Strategies.

The Company pursues internal growth primarily through the following
strategies:

- Revenue Increases. The Company increases rents where feasible and seeks
to improve occupancy rates.

- Redevelopment of Properties. The Company believes redevelopment of
selected properties in superior locations provides advantages over
development of new properties. AIMCO believes that redevelopment
generally allows the Company to maintain rents comparable to new
properties and, compared to development of new properties, can be
accomplished with relatively lower financial risk, in less time and with
reduced delays due to governmental regulation.

- Expansion of Properties. The Company believes that expansion within or
adjacent to properties already owned or managed by the Company also
provides growth opportunities at lower risk than new development. Such
expansion can offer cost advantages to the extent common area amenities
and on-site management personnel can service the property expansions.

- Conversion of Affordable Properties; Improvement of Performance. The
Company believes that it may be able to significantly increase its return
from its portfolio of affordable properties by improving operations at
some of its properties or by converting some of these properties to
conventional properties.

- Ancillary Services. The Company's management believes that its ownership
and management of properties provides it with unique access to a customer
base for the sale of additional services which

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generate incremental revenues. The Company currently provides cable
television, telephone services, appliance rental, and carport, garage and
storage space rental at certain properties.

- Controlling Expenses. Cost reductions are accomplished by local focus on
the regional operating center level and by exploiting economies of scale.
As a result of the size of its portfolio and its creation of regional
concentrations of properties, the Company has the ability to leverage
fixed costs for general and administrative expenditures and certain
operating functions, such as insurance, information technology and
training, over a large property base.

PROPERTY MANAGEMENT STRATEGIES

AIMCO seeks to improve the operating results from its property management
business by, among other methods, combining centralized financial control and
uniform operating procedures with localized property management decision-making
and market knowledge. AIMCO's management operations are organized into 35
regional operating centers. Each of the regional operating centers is supervised
by a Regional Vice-President.

TAXATION OF THE COMPANY

The Company has elected to be taxed as a REIT under the Internal Revenue
Code of 1986, as amended, commencing with its taxable year ended December 31,
1994, and the Company intends to continue to operate in such a manner. The
Company's current and continuing qualification as a REIT depends on its ability
to meet the various requirements imposed by the Internal Revenue Code, through
actual operating results, distribution levels and diversity of stock ownership.

If the Company qualifies for taxation as a REIT, it will generally not be
subject to U.S. federal corporate income tax on its net income that is currently
distributed to stockholders. This treatment substantially eliminates the "double
taxation" (at the corporate and stockholder levels) that generally results from
investment in a corporation. If the Company fails to qualify as a REIT in any
taxable year, its taxable income will be subject to U.S. federal income tax at
regular corporate rates (including any applicable alternative minimum tax). Even
if the Company qualifies as a REIT, it may be subject to certain state and local
income taxes and to U.S. federal income and excise taxes on its undistributed
income.

If in any taxable year the Company fails to qualify as a REIT and incurs
additional tax liability, the Company may need to borrow funds or liquidate
certain investments in order to pay the applicable tax and the Company would not
be compelled to make distributions under the Code. Unless entitled to relief
under certain statutory provisions, the Company would also be disqualified from
treatment as a REIT for the four taxable years following the year during which
qualification is lost. Although the Company currently intends to operate in a
manner designed to qualify as a REIT, it is possible that future economic,
market, legal, tax or other considerations may cause the Company to fail to
qualify as a REIT or may cause the Board of Directors to revoke the REIT
election.

The Company and its stockholders may be subject to state or local taxation
in various state or local jurisdictions, including those in which it or they
transact business or reside. The state and local tax treatment of the Company
and its stockholders may not conform to the U.S. federal income tax treatment.

COMPETITION

There are numerous housing alternatives that compete with the Company's
properties in attracting residents. The Company's properties compete directly
with other multi-family rental apartments and single family homes that are
available for rent in the markets in which the Company's properties are located.
The Company's properties also compete for residents with new and existing homes
and condominiums. The number of competitive properties in a particular area
could have a material effect on the Company's ability to lease apartment units
at its properties and on the rents charged. The Company competes with numerous
real estate companies in acquiring, developing and managing multi-family
apartment properties and seeking tenants to occupy its properties. In addition,
the Company competes with numerous property management companies in the markets
where the properties managed by the Company are located.
8
<PAGE> 11

REGULATION

General

Multifamily apartment properties are subject to various laws, ordinances
and regulations, including regulations relating to recreational facilities such
as swimming pools, activity centers and other common areas. Changes in laws
increasing the potential liability for environmental conditions existing on
properties or increasing the restrictions on discharges or other conditions, as
well as changes in laws affecting development, construction and safety
requirements, may result in significant unanticipated expenditures, which would
adversely affect the Company's cash flows from operating activities. In
addition, future enactment of rent control or rent stabilization laws or other
laws regulating multi-family housing may reduce rental revenue or increase
operating costs in particular markets.

HUD Enforcement

A significant number of properties owned by the Company are subject to
regulation by HUD. Under its regulations, HUD reserves the right to approve the
owner and the manager of HUD-insured and HUD-assisted properties, as well as
their "principals" (e.g., general partners, stockholders with a 10% or greater
interest, officers and directors) in connection with the acquisition of a
property, participation in HUD programs or the award of a management contract.
This approval process is commonly referred to as "2530 Clearance." HUD monitors
the performance of properties with HUD-insured mortgage loans. HUD also monitors
compliance with applicable regulations, and takes performance and compliance
into account in approving the acquisition of management of HUD-assisted
properties. In the event of instances of unsatisfactory performance or
regulatory violations, the HUD office with jurisdiction over the applicable
property has the authority to enter a "flag" into the computerized 2530
Clearance system. If one or more flags have been entered, a decision whether to
grant 2530 Clearance is then subject to review by HUD's Multifamily
Participation Review Committee in Washington, D.C. (the "2530 Committee"). As a
result of certain mortgage defaults and unsatisfactory ratings received by NHP
Incorporated in years prior to its acquisition by AIMCO in December 1997, HUD
believes that the 2530 Committee must review any application for 2530 Clearance
filed by AIMCO. On December 18, 1998, AIMCO received approval of approximately
fifty 2530 applications and had no unresolved flags in the 2530 system as of
December 31, 1998.

AIMCO believes that the 2530 Committee will continue to apply the 2530
clearance process to large management portfolios such as AIMCO's with discretion
and flexibility. While there can be no assurance, AIMCO believes that the
unsatisfactory reviews and the mortgage defaults will not have a material impact
on its results of operations or financial condition. If HUD were to disapprove
AIMCO as property manager for one or more affordable properties, AIMCO's ability
to obtain property management revenues from new affordable properties would be
impaired.

Laws Benefitting Disabled Persons

Under the Americans with Disabilities Act of 1990, all places of public
accommodation are required to meet certain Federal requirements related to
access and use by disabled persons. These requirements became effective in 1992.
A number of additional Federal, state and local laws may also require
modifications to the Company's properties, or restrict certain further
renovations of the properties, with respect to access thereto by disabled
persons. For example, the Fair Housing Amendments Act of 1988 requires apartment
properties first occupied after March 13, 1990 to be accessible to the
handicapped. Noncompliance with these laws could result in the imposition of
fines or an award of damages to private litigants and also could result in an
order to correct any non-complying feature, which could result in substantial
capital expenditures. Although the Company believes that its properties are
substantially in compliance with present requirements, it may incur
unanticipated expenses to comply with these laws.

Regulation of Affordable Housing

As of December 31, 1998, the Company owned or controlled 12 properties,
held an equity interest in 462 properties and managed for third parties and
affiliates 578 properties that benefit from governmental

9
<PAGE> 12

programs intended to provide housing to people with low or moderate incomes.
These programs, which are usually administered by the United States Department
of Housing and Urban Development ("HUD") or state housing finance agencies,
typically provide mortgage insurance, favorable financing terms or rental
assistance payments to the property owners. As a condition to the receipt of
assistance under these programs, the properties must comply with various
requirements, which typically limit rents to pre-approved amounts. If permitted
rents on a property are insufficient to cover costs, a sale of the property may
become necessary, which could result in a loss of management fee revenue. The
Company must obtain the approval of HUD in order to manage, or acquire a
significant interest in, a HUD-assisted or HUD-insured property. The Company can
make no assurance that it will always receive such approval.

Environmental

Various Federal, state and local laws subject property owners or operators
to liability for the costs of removal or remediation of certain hazardous
substances present on a property. Such laws often impose liability without
regard to whether the owner or operator knew of, or was responsible for, the
release of the hazardous substances. The presence of, or the failure to properly
remediate, hazardous substances may adversely affect occupancy at contaminated
apartment communities and the Company's ability to sell or borrow against
contaminated properties. In addition to the costs associated with investigation
and remediation actions brought by governmental agencies, the presence of
hazardous wastes on a property could result in personal injury or similar claims
by private plaintiffs. Various laws also impose liability for the cost of
removal or remediation of hazardous substances at the disposal or treatment
facility. Anyone who arranges for the disposal or treatment of hazardous or
toxic substances is potentially liable under such laws. These laws often impose
liability whether or not the person arranging for the disposal ever owned or
operated the disposal facility. In connection with the ownership, operation and
management of properties, the Company could potentially be liable for
environmental liabilities or costs associated with its properties.

INSURANCE

Management believes that the Company's properties are covered by adequate
fire, flood and property insurance provided by reputable companies and with
commercially reasonable deductibles and limits.

EMPLOYEES

The Company has a staff of employees performing various acquisition,
redevelopment and management functions. The Company, through the AIMCO operating
partnership and the management companies, has approximately 13,000 employees,
most of whom are employed at the property level. None of the employees are
represented by a union, and the Company has never experienced a work stoppage.
The Company believes it maintains satisfactory relations with its employees.

10
<PAGE> 13

ITEM 2. PROPERTIES.

The Company's properties are located in 49 states, Puerto Rico and the
District of Columbia. The properties are managed by four Division
Vice-Presidents controlling 35 regional operating centers. The following table
sets forth information for the regional operating centers as of December 31,
1998:

<TABLE>
<CAPTION>
REGIONAL
OPERATING NUMBER OF NUMBER OF
CENTER DIVISION PROPERTIES UNITS
- --------- --------- ---------- ---------
<S> <C> <C> <C>
Chicago, IL................................................. Far West 60 11,744
Denver, CO.................................................. Far West 73 11,478
Kansas City, MO............................................. Far West 97 13,138
Los Angeles, CA............................................. Far West 69 10,239
Oakland, CA................................................. Far West 80 8,931
Phoenix, AZ................................................. Far West 51 13,138
San Diego, CA............................................... Far West 36 5,291
----- -------
466 73,959
Allentown, PA............................................... East 48 7,493
Columbia, SC................................................ East 57 10,011
Greenville, SC.............................................. East 70 8,650
Philadelphia, PA............................................ East 37 11,804
MLG Sub ROC 2............................................... East 27 8,061
Richmond, VA................................................ East 43 11,420
Rockville, MD............................................... East 84 13,053
Maine Sub ROC 1............................................. East 70 2,328
Tarrytown, NY............................................... East 67 9,582
----- -------
503 82,402
Atlanta, GA................................................. Southeast 63 11,896
Boca Raton, FL.............................................. Southeast 35 7,797
Miami, FL................................................... Southeast 49 10,454
Mobile, AL.................................................. Southeast 62 10,136
Nashville, TN............................................... Southeast 63 11,589
Orlando, FL................................................. Southeast 52 12,786
Tampa, FL................................................... Southeast 53 13,075
----- -------
377 77,733
Austin, TX.................................................. West 55 10,452
Columbus, OH................................................ West 57 8,774
Dallas I, TX................................................ West 65 12,773
Dallas II, TX............................................... West 68 13,153
Houston I, TX............................................... West 49 10,458
Houston II, TX.............................................. West 58 13,818
Indianapolis, IN............................................ West 43 9,675
----- -------
395 79,103
</TABLE>

11
<PAGE> 14

<TABLE>
<CAPTION>
REGIONAL
OPERATING NUMBER OF NUMBER OF
CENTER DIVISION PROPERTIES UNITS
- --------- --------- ---------- ---------
<S> <C> <C> <C>
Portfolio:
Senior Living Sub ROC 1..................................... Oxford 8 1,638
Affordable Midwest.......................................... Oxford 44 5,711
Conventional Mideast........................................ Oxford 23 6,342
Conventional Midwest........................................ Oxford 45 10,725
Conventional South.......................................... Oxford 41 10,210
----- -------
161 34,626
Other....................................................... 245 31,540
----- -------
2,147 379,363
===== =======
</TABLE>

At December 31, 1998, the Company owned or controlled 242 properties
containing 63,086 units. These properties contain, on average, 261 apartment
units, with the largest property containing 2,113 apartment units. These
properties offer residents a range of amenities, including swimming pools,
clubhouses, spas, fitness centers, tennis courts and saunas. Many of the
apartment units offer design and appliance features such as vaulted ceilings,
fireplaces, washer and dryer hook-ups, cable television, balconies and patios.
In addition, at December 31, 1998, the Company held an equity interest in 902
properties containing 170,243 units, and managed 1,003 other properties
containing 146,034 units. The Company's 2,147 properties contain, on average,
177 apartment units, with the largest property containing 2,899 apartment units.

Substantially all of the properties owned or controlled by the Company are
encumbered by mortgage indebtedness or serve as collateral for the Company's
indebtedness. At December 31, 1998, the Company had aggregate mortgage
indebtedness totaling $1,242.4 million, which was secured by 197 properties with
a combined net book value of $2,185.7 million, having an aggregate weighted
average interest rate of 7.1%. As of December 31, 1998, approximately 25.2% of
AIMCO's outstanding debt was short-term debt and 74.8% was long-term debt. As of
March 11, 1999, approximately 9.5% of AIMCO's outstanding debt was short-term
debt and 90.5% was long-term debt. See the financial statements included
elsewhere in this Annual Report on Form 10-K for additional information about
the Company's indebtedness.

ITEM 3. LEGAL PROCEEDINGS.

The Company is a party to various legal actions resulting from its
operating activities. These actions are routine litigation and administrative
proceedings arising in the ordinary course of business, some of which are
covered by liability issuance, and none of which are expected to have a material
adverse effect on the consolidated financial condition or results of operations
of the Company.

In connection with the Company's offers to purchase interests in limited
partnerships that own properties, the Company and its affiliates are sometimes
subject to legal actions, including allegations that such activities may involve
breaches of fiduciary duties to the limited partners of such partnerships or
violations of the relevant partnership agreements. The Company believes it
complies with its fiduciary obligations and relevant partnership agreements, and
does not expect such legal actions to have a material adverse effect on the
consolidated financial condition or results of operations of the Company and its
subsidiaries taken as a whole. The Company may incur costs in connection with
the defense or settlement of such litigation, which could adversely affect the
Company's desire or ability to complete certain transactions and thereby have a
material adverse effect on the Company and its subsidiaries.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

None.

12
<PAGE> 15

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.

AIMCO's Class A Common Stock has been listed and traded on the NYSE under
the symbol "AIV" since July 22, 1994. The following table sets forth the
quarterly high and low sales prices of the Class A Common Stock, as reported on
the NYSE, and the dividends paid by the Company for the periods indicated.

<TABLE>
<CAPTION>
DIVIDENDS
PAID
QUARTER ENDED HIGH LOW (PER SHARE)
------------- ---- --- -----------
<S> <C> <C> <C>
1996
March 31, 1996............................................ $21 1/8 $19 3/8 $ 0.425
June 30, 1996............................................. 21 18 3/8 0.425
September 30, 1996........................................ 22 18 3/8 0.425
December 31, 1996......................................... 28 3/8 21 1/8 0.425
1997
March 31, 1997............................................ 30 1/2 25 1/2 0.4625
June 30, 1997............................................. 29 3/4 26 0.4625
September 30, 1997........................................ 36 3/16 28 1/8 0.4625
December 31, 1997......................................... 38 32 0.4625
1998
March 31, 1998............................................ 38 9/16 34 1/4 0.5625
June 30, 1998............................................. 39 7/8 36 1/2 0.5625
September 30, 1998........................................ 41 31 0.5625
December 31, 1998......................................... 37 3/8 30 0.5625
1999
March 31, 1999 (thru March 11, 1999)...................... 41 5/8 35 3/4 0.625(1)
</TABLE>

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

(1) On January 20, 1999, the Company's Board of Directors declared a cash
dividend of $0.625 per share of Class A Common Stock, paid on February 12,
1999 to stockholders of record on February 6, 1998.

On March 11, 1999, there were 61,656,837 shares of Class A Common Stock
outstanding, held by 1,575 stockholders of record.

AIMCO, as a REIT, is required to distribute annually to holders of common
stock at least 95% of its "real estate investment trust taxable income," which,
as defined by the Internal Revenue Code and Treasury regulations, is generally
equivalent to net taxable ordinary income. AIMCO measures its economic
profitability and intends to pay regular dividends to its stockholders based on
FFO during the relevant period. However, the future payment of dividends by
AIMCO will be at the discretion of the Board of Directors and will depend on
numerous factors including AIMCO's financial condition, its capital
requirements, the annual distribution requirements under the provisions of the
Internal Revenue Code applicable to REITs and such other factors as the Board of
Directors deems relevant.

From time to time, AIMCO issues shares of Class A Common Stock in exchange
for OP Units tendered to the AIMCO operating partnership for redemption in
accordance with the terms and provisions of the agreement of limited partnership
of the AIMCO operating partnership. Such shares are issued based on an exchange
ratio of one share for each OP Unit. The shares are issued in exchange for OP
Units in private transactions exempt from registration under the Securities Act
of 1933, as amended (the "Securities Act"), pursuant to Section 4(2) thereof.
During 1998, a total of 275,405 shares of Class A Common Stock were issued in
exchange for OP Units.

On November 6, 1998, AIMCO sold 1,000,000 shares of its Class J Cumulative
Convertible Preferred Stock ("Class J Preferred Stock") in a private placement
for approximately $100.0 million, all of which was used to repay indebtedness
under its interim term loan agreement with Lehman Brothers, Inc. In addition, on

13
<PAGE> 16

the same date, AIMCO issued 250,000 shares of Class J Preferred Stock to the
AIMCO operating partnership in a private placement in exchange for 250,000 Class
J Partnership Preferred Units of the AIMCO operating partnership. The shares
were sold in a private transaction exempt from registration under the Securities
Act, pursuant to Section 4(2) thereof.

On December 14, 1998, the Company sold to AEW Targeted Securities Fund,
L.P. (i) 1,400,000 Class B partnership preferred units of a subsidiary of the
AIMCO operating partnership for $30.85 million, and (ii) a warrant to purchase
875,000 shares of Class A Common Stock for $4.15 million. The partnership units
may be redeemed at the option of the holders at any time, and at the option of
the Company under certain circumstances. Any redemption of the units may be
satisfied by delivery of cash, Class A Common Stock or OP Units. The warrant has
an exercise price of $40 per share. The warrant may be exercised at any time,
and expires upon a redemption of the Class B partnership preferred units. The
Company used all of the $35 million of proceeds from these transactions for
general corporate purposes. The partnership units and warrant were sold in
private transactions exempt from registration under the Securities Act, pursuant
to Section 4(2) thereof.

14
<PAGE> 17

ITEM 6. SELECTED FINANCIAL DATA

The historical selected financial data for AIMCO for the years ended
December 31, 1998, 1997 and 1996 is based on audited financial statements. This
information should be read in conjunction with such financial statements,
including the notes thereto, and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" included herein. The historical
selected financial data for AIMCO for the year ended December 31, 1995 and the
period from January 10, 1994 (the date of inception) through December 31, 1994
and for the AIMCO Predecessors for the period January 1, 1994 through July 28,
1994 is based on audited financial statements.

<TABLE>
<CAPTION>
AIMCO
THE COMPANY PREDECESSORS
-------------------------------------------------------------------------- --------------
FOR THE PERIOD FOR THE PERIOD
JANUARY 10, JANUARY 1,
1994 1994
FOR THE YEAR ENDED DECEMBER 31, THROUGH THROUGH
--------------------------------------------------------- DECEMBER 31, JULY 28,
1998 1997 1996 1995 1994 1994
------------ ------------ ------------ ------------ -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
OPERATING DATA:
RENTAL PROPERTY OPERATIONS:
Rental and other income......... $ 377,139 $ 193,006 $ 100,516 $ 74,947 $ 24,894 $ 5,805
Property operating expenses..... (147,541) (76,168) (38,400) (30,150) (10,330) (2,263)
Owned property management
expenses...................... (11,013) (6,620) (2,746) (2,276) (711) --
Depreciation.................... (84,635) (37,741) (19,556) (15,038) (4,727) (1,151)
---------- ---------- ---------- -------- -------- -------
133,950 72,477 39,814 27,483 9,126 2,391
---------- ---------- ---------- -------- -------- -------
SERVICE COMPANY BUSINESS:
Management fees and other
income........................ 24,103 13,937 8,367 8,132 3,217 6,533
Management and other expenses... (16,764) (10,373) (5,560) (5,150) (2,211) (6,173)
Corporate overhead allocation... (196) (588) (590) (581) -- --
---------- ---------- ---------- -------- -------- -------
7,143 2,976 2,217 2,401 1,006 360
---------- ---------- ---------- -------- -------- -------
General and administrative
expenses...................... (14,650) (5,396) (1,512) (1,804) (977) (36)
Interest expense................ (89,424) (51,385) (24,802) (13,322) (1,576) (4,214)
Interest income................. 30,450 8,676 523 658 123 --
Equity in losses of
unconsolidated partnerships... (4,854) (1,798) -- -- -- --
Equity in earnings of
unconsolidated subsidiaries... 11,570 4,636 -- -- -- --
Minority interest in other
entities...................... (468) 1,008 (111) -- -- --
Amortization of goodwill........ (8,735) (948) (500) (428) -- --
---------- ---------- ---------- -------- -------- -------
Income from operations.......... 64,982 30,246 15,629 14,988 7,702 (1,499)
Gain on disposition of
properties.................... 4,674 2,720 44 -- -- --
---------- ---------- ---------- -------- -------- -------
Income (loss) before
extraordinary item and
minority interest in operating
partnership................... 69,656 32,966 15,673 14,988 7,702 (1,499)
Extraordinary item -- early
extinguishment of debt........ -- (269) -- -- -- --
---------- ---------- ---------- -------- -------- -------
Income (loss) before minority
interest in operating
partnership................... 69,656 32,697 15,673 14,988 7,702 (1,499)
Minority interest in operating
partnership................... (5,182) (4,064) (2,689) (1,613) (559) --
---------- ---------- ---------- -------- -------- -------
Net income (loss)............... $ 64,474 $ 28,633 $ 12,984 $ 13,375 $ 7,143 $(1,499)
========== ========== ========== ======== ======== =======
</TABLE>

15
<PAGE> 18

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

OVERVIEW

The following discussion and analysis of the results of operations and
financial condition of the Company should be read in conjunction with the
financial statements incorporated by reference in Item 8 of this Annual Report
on Form 10-K.

RESULTS OF OPERATIONS

Comparison of the Year Ended December 31, 1998 to the Year Ended December 31,
1997

Net Income

The Company recognized net income of $64.5 million, and net income
attributable to common stockholders of $37.9 million, for the year ended
December 31, 1998, compared to net income and net income attributable to common
stockholders of $28.6 million and $26.3 million, respectively, for the year
ended December 31, 1997. Net income attributable to common stockholders
represents net income less dividends on preferred stock.

The increase in net income attributable to common stockholders of $11.6
million, or 44.1%, was primarily the result of the following:

- the increase in net "same store" property results;

- the acquisition of 11,706 units in 44 apartment communities during 1997;

16
<PAGE> 19

- the acquisition of 22,459 units in 82 apartment communities during 1998;

- the acquisition of NHP Incorporated ("NHP") in December 1997;

- the acquisition of Ambassador Apartments, Inc. in May 1998;

- the acquisition of the Insignia Multi-family Business in October 1998;
and

- receipt of interest income on general partner loans to unconsolidated
real estate partnerships and notes receivable.

The effect of the above on net income was partially offset by the sale of
five properties in 1998 and five properties in 1997. These factors are discussed
in more detail in the following paragraphs.

Rental Property Operations

Rental and other property revenues from the Company's owned or controlled
properties totaled $377.1 million for the year ended December 31, 1998, compared
to $193.0 million for the year ended December 31, 1997, an increase of $184.1
million, or 95.4%. Rental and other property revenues consisted of the following
(in thousands):

<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
1997 acquisitions........................................... $124,266 $ 36,871
1998 acquisitions........................................... 92,033 --
"Same store" properties..................................... 150,476 136,219
1997 dispositions........................................... -- 4,092
1998 dispositions........................................... 304 8,106
Properties in lease-up after the completion of an expansion
or renovation............................................. 10,060 7,718
-------- --------
Total............................................. $377,139 $193,006
======== ========
</TABLE>

Property operating expenses consist of on-site payroll costs, utilities
(net of reimbursements received from tenants), contract services, turnover
costs, repairs and maintenance, advertising and marketing, property taxes and
insurance. Property operating expenses totaled $147.5 million for the year ended
December 31, 1998, compared to $76.2 million for the year ended December 31,
1997, an increase of $71.3 million, or 93.6%. Property operating expenses
consisted of the following (in thousands):

<TABLE>
<CAPTION>
1998 1997
-------- -------
<S> <C> <C>
1997 acquisitions........................................... $ 48,570 $15,389
1998 acquisitions........................................... 35,386 --
"Same store" properties..................................... 59,993 52,870
1997 dispositions........................................... -- 1,972
1998 dispositions........................................... 348 3,592
Properties in lease-up after the completion of an expansion
or renovation............................................. 3,244 2,345
-------- -------
Total............................................. $147,541 $76,168
======== =======
</TABLE>

Owned property management expenses, representing the costs of managing the
Company's owned or controlled properties, totaled $11.0 million for the year
ended December 31, 1998, compared to $6.6 million for the year ended December
31, 1997, an increase of $4.4 million, or 66.7%. The increase resulted from
acquisitions of properties in 1997 and 1998 and acquisitions of controlling
interests in properties through the NHP, Ambassador and Insignia mergers.

17
<PAGE> 20

Service Company Business

Income from the service company business was $7.1 million for the year
ended December 31, 1998, compared to $3.0 million for the year ended December
31, 1997, an increase of $4.1 million or 136.7%. The increase was primarily due
to management contracts acquired in the Insignia merger that are held by the
Company, as well as the transfer of majority-owned management contracts from the
management companies to the AIMCO operating partnership. When the Company owns
at least a 40% interest in a real estate partnership, the management contract
with that real estate partnership is assigned to the AIMCO operating
partnership. In addition, the increase is partially due to additional
partnership and administrative fees resulting from the acquisition of
partnership interests during 1998. The commercial asset management and brokerage
businesses were reorganized as part of the management companies at the start of
1998. The insurance portion of operations and also property management services
were reorganized as part of the management companies, effective July 1, 1998.
The Company's share of income from service company businesses consisted of the
following (in thousands):

<TABLE>
<CAPTION>
1998 1997
-------- -------
(IN THOUSANDS)
<S> <C> <C>
Properties managed
Management fees and other income.......................... $ 18,718 $ 9,353
Management and other expenses............................. (13,472) (9,498)
-------- -------
5,246 (145)
-------- -------
Commercial asset management
Management and other income............................... -- 245
Management and other expenses............................. -- (275)
-------- -------
-- (30)
-------- -------
Reinsurance operations
Revenues.................................................. 993 4,228
Expenses.................................................. (255) (360)
-------- -------
738 3,868
-------- -------
Other
Revenues.................................................. 4,392 111
Expenses.................................................. (3,037) (240)
-------- -------
1,355 (129)
-------- -------
Corporate overhead allocation............................... (196) (588)
-------- -------
$ 7,143 $ 2,976
======== =======
</TABLE>

General and Administrative Expenses

General and administrative expenses totaled $14.7 million for the year
ended December 31, 1998, compared to $5.4 million for the year ended December
31, 1997, an increase of $9.3 million, or 172.2%. The increase in general and
administrative expenses is primarily due to additional corporate costs and
additional employee salaries associated with the purchase of NHP Real Estate
Companies in June 1997 and the mergers with NHP Incorporated in December 1997,
Ambassador Apartments, Inc. in May 1998 and Insignia Financial Group, Inc. in
October 1998. In addition, due to the growth of the Company, several new
departments have been added including legal, tax and Limited Partnership
administration, as well as increased levels of personnel in the accounting and
finance departments.

Interest Expense

Interest expense, which includes the amortization of deferred finance
costs, totaled $89.4 million for the year ended December 31, 1998, compared to
$51.4 million for the year ended December 31, 1997, an increase of $38.0 million
or 73.9%. The increase was primarily due to interest expense incurred in
connection with the

18
<PAGE> 21

acquisition of interests in Ambassador Apartments, Inc. and Insignia Financial
Group, Inc. and interest expense incurred in connection with 1998 and 1997
acquisitions.

Interest income

Interest income totaled $30.4 million for the year ended December 31, 1998,
compared to $8.7 million for the year ended December 31, 1997. The increase is
primarily due to interest earned on the increased average outstanding balances
of general partner loans and notes receivable.

COMPARISON OF THE YEAR ENDED DECEMBER 31, 1997 TO THE YEAR ENDED DECEMBER 31,
1996

The Company recognized net income of $28.6 million and net income
attributable to common stockholders of $26.3 million for the year ended December
31, 1997 compared to net income and net income attributable to common
stockholders of $13.0 million for the year ended December 31, 1996. Net income
attributable to common stockholders represents net income less dividends on
preferred stock. The increase in net income allocable to common stockholders of
$13.3 million, or 102.3%, was primarily the result of the following:

- the acquisition of 10,484 units in 42 apartment communities primarily
during November and December 1996;

- the acquisitions of 11,706 units in 44 apartment communities during 1997;

- the acquisition of interests in the NHP Partnerships including the period
June through December 1997;

- the acquisition of NHP Partnerships in December 1997;

- interest income on general partner loans to unconsolidated real estate
partnerships; and

- the increase in net "same store" property results.

The effect of the above on net income was partially offset by the sale of
four properties in August 1996 and five properties in October 1997. These
factors are discussed in more detail in the following paragraphs.

Rental Property Operations

Rental and other property revenues from the Company's owned or controlled
properties totaled $193.0 million for the year ended December 31, 1997, compared
to $100.5 million for the year ended December 31, 1996, an increase of $92.5
million, or 92.0%. Rental and other property revenues consisted of the following
(in thousands):

<TABLE>
<CAPTION>
1997 1996
-------- --------
<S> <C> <C>
1996 acquisitions........................................... $ 68,505 $ 14,970
1997 acquisitions........................................... 22,163 --
"Same store" properties..................................... 78,724 75,069
Acquisitions of interests in the NHP Partnerships........... 15,592 --
1996 dispositions........................................... -- 3,363
1997 dispositions........................................... 4,092 4,719
Properties in lease-up after the completion of an expansion
or renovation............................................. 3,930 2,395
-------- --------
Total............................................. $193,006 $100,516
======== ========
</TABLE>

Average monthly rent per occupied unit for the same store properties
increased to $571 at December 31, 1997 from $560 at December 31, 1996, an
increase of 2.0%. Weighted average physical occupancy for the properties
increased to 94.8% at December 31, 1997, from 94.5% at December 31, 1996, an
increase of 0.3%.

19
<PAGE> 22

Property operating expenses totaled $76.2 million for the year ended
December 31, 1997, compared to $38.4 million for the year ended December 31,
1996, an increase of $37.8 million, or 98.4%. Property operating expenses
consisted of the following (in thousands):

<TABLE>
<CAPTION>
1997 1996
------- -------
<S> <C> <C>
1996 acquisitions........................................... $28,911 $ 5,258
1997 acquisitions........................................... 8,402 --
"Same store" properties..................................... 28,009 28,234
Acquisition of interests in the NHP Partnerships............ 7,304 --
1996 dispositions........................................... -- 1,793
1997 dispositions........................................... 1,972 2,300
Properties in lease-up after the completion of an expansion
or renovation............................................. 1,570 815
------- -------
Total............................................. $76,168 $38,400
======= =======
</TABLE>

Owned property management expenses, representing the costs of managing the
Company's owned properties, totaled $6.6 million for the year ended December 31,
1997, compared to $2.7 million for the year ended December 31, 1996, an increase
of $3.9 million or 144.4%. The increase resulted from the acquisition of
properties in 1996 and 1997 and the acquisition of interests in the NHP
Partnerships.

Service Company Business

Income from the service company business was $3.0 million for the year
ended December 31, 1997 compared to $2.2 million for the year ended December 31,
1996, an increase of $0.8 million or 36.4%. The increase is due to the
acquisition by the Company of property management businesses in August and
November 1996, the acquisition of partnership interests which provide for
certain partnership and administrative fees, and a captive insurance subsidiary
acquired in connection with the acquisition of the NHP Real Estate Companies in
June 1997, which were offset by the expiration of the Company's commercial asset
management contracts on March 31, 1997. The Company's share of income from
service company businesses consisted of the following (in thousands):

<TABLE>
<CAPTION>
1997 1996
------- -------
<S> <C> <C>
Properties managed
Management fees and other income.......................... $ 9,353 $ 5,679
Management and other expenses............................. (9,498) (4,623)
------- -------
(145) 1,056
------- -------
Commercial asset management
Management and other income............................... 245 1,026
Management and other expenses............................. (275) (339)
------- -------
(30) 687
------- -------
Reinsurance operations
Revenues.................................................. 4,228 1,267
Expenses.................................................. (360) (282)
------- -------
3,868 985
------- -------
Brokerage and other
Revenues.................................................. 111 395
Expenses.................................................. (240) (316)
------- -------
(129) 79
------- -------
Corporate overhead allocation............................... (588) (590)
------- -------
$ 2,976 $ 2,217
======= =======
</TABLE>

20
<PAGE> 23

Income (loss) from the management of properties for third parties and
affiliates was $(0.1) million for the year ended December 31, 1997 compared to
$1.1 million for the year ended December 31, 1996, a decrease of $1.2 million,
or 109.1%.

Losses from commercial asset management were $30,000 for the year ended
December 31, 1997 compared to income of $0.7 million for the year ended December
31, 1996. The decrease is primarily due to the expiration of certain commercial
management contracts in March 1997.

Income from the reinsurance operations for the year ended December 31, 1997
increased by $2.9 million from the year ended December 31, 1996, due to
increased premiums collected from a larger work force, improved loss experience
and the closure of claims for less than the amounts previously reserved, as well
as the acquisition of the NHP Real Estate Companies, which included the
acquisition of a captive insurance company.

General and Administrative Expenses

General and administrative expenses totaled $5.4 million for the year ended
December 31, 1997 compared to $1.5 million for the year ended December 31, 1996,
an increase of $3.9 million, or 260.0%. The increase in general and
administrative expenses is primarily due to the purchase of the NHP Real Estate
Companies in June 1997 and the merger with NHP Incorporated in December 1997.

Interest Expense

Interest expense, which includes the amortization of deferred finance
costs, totaled $51.4 million for the year ended December 31, 1997, compared to
$24.8 million for the year ended December 31, 1996, an increase of $26.6 million
or 107.3%. The increase was primarily due to interest expense incurred in
connection with the acquisition of interests in the NHP Real Estate Companies
and NHP and interest expense incurred in connection with 1997 and 1996
acquisitions.

Interest Income

Interest income totaled $8.7 million for the year ended December 31, 1997,
compared to $0.5 million for the year ended December 31, 1996. The increase is
primarily due to interest earned on general partner loans to unconsolidated real
estate partnerships acquired in 1997.

LIQUIDITY AND CAPITAL RESOURCES

At December 31, 1998, the Company had $71.3 million in cash and cash
equivalents and $55.8 million of restricted cash, primarily consisting of
reserves and impounds held by lenders for capital expenditures, property taxes
and insurance. In addition, cash, cash equivalents and restricted cash is held
by partnerships and subsidiaries which are not presented on a consolidated
basis. The Company's principal demands for liquidity include normal operating
activities, payments of principal and interest on outstanding debt, capital
improvements, acquisitions of or investments in properties, dividends paid to
its stockholders and distributions paid to limited partners. The Company
considers its cash provided by operating activities to be adequate to meet
short-term liquidity demands.

As of December 31, 1998, 89% of the Company's owned or controlled
properties and 53% of its total assets were encumbered by debt. The Company had
total outstanding indebtedness of $1,660.7 million, of which $1,350.4 million
was secured by properties. The Company's indebtedness is comprised of $843.8
million of secured long-term financing, $398.6 million of secured tax-exempt
bonds and $418.3 in secured and unsecured short-term financing. As of December
31, 1998, approximately 27.8% of the Company's indebtedness bears interest at
variable rates. As of March 11, 1999, approximately 9.5% of the Company's
indebtedness bears interest at variable rates. General Motors Acceptance
Corporation had made 85 loans (the "GMAC Loans") to property owning partnerships
of the Company, each of which is secured by the property owned by such
partnership. The 85 GMAC Loans had an aggregate outstanding principal balance of
$175.2 million as of December 31, 1998. Certain GMAC Loans are
cross-collateralized with certain other GMAC Loans. Other

21
<PAGE> 24

than certain GMAC Loans, none of the Company's debt is subject to
cross-collateralization provisions. The weighted average interest rate on the
Company's long-term, secured, tax-exempt notes payable was 7.0% with a weighted
average maturity of 11.7 years as of December 31, 1998. The weighted average
interest rate on the Company's secured and unsecured short-term financing was
7.2% as of December 31, 1998.

In February 1999, the $50 million credit facility with Washington Mortgage
Financial Group, Ltd. was terminated and all outstanding indebtedness was repaid
with the proceeds from new, long-term, fully amortizing indebtedness secured by
properties that previously secured the credit facility.

In February and March 1999, the Company incurred in the aggregate $83.4
million of long-term, fixed rate, fully amortizing mortgage debt secured by 13
properties in separate loan transactions. The Company used the $81.5 million of
net proceeds from the financings to repay debt under the interim loan agreement
with Lehman Brothers Inc., to repay debt under its credit facility with Bank of
America National Trust and Savings Association and Bank Boston, N.A. and to
provide working capital. As of March 11, 1999, the balance outstanding under the
interim loan agreement was $25 million, under the credit facility was $74.8
million, and under the IPT credit agreement was $45 million. The amount
available under the credit facility at March 11, 1999 was $24 million.

The Company expects to meet its long-term liquidity requirements, such as
refinancing debt and property acquisitions, through long-term borrowings, both
secured and unsecured, the issuance of debt or equity securities (including OP
Units) and cash generated from operations. In August 1998, AIMCO and the AIMCO
operating partnership filed a shelf registration statement with the Securities
and Exchange Commission ("SEC") with respect to an aggregate of $1,268 million
of debt and equity securities of AIMCO (of which $268 million was carried
forward from AIMCO's 1997 shelf registration statement) and $500 million of debt
securities of the AIMCO operating partnership. The registration statement was
declared effective by the SEC on December 10, 1998. As of December 31, 1998, the
Company had $1,268 million available and the AIMCO operating partnership had
$500 million available from this registration statement. On February 18, 1999,
the Company raised net proceeds of $120.6 million in a public offering. The
offering reduced the amount remaining available to AIMCO under the shelf
registration statement to $1,143 million. All proceeds were used to further
reduce the balance outstanding under the Lehman interim loan. The Company
expects to finance pending acquisition of real estate interests with the
issuance of equity securities and debt.

CAPITAL EXPENDITURES

For the year ended December 31, 1998, the Company spent $29.0 million for
Capital Replacements (expenditures for routine maintenance of a property), $28.1
million for Initial Capital Expenditures ("ICE", expenditures at a property that
have been identified, at the time the property is acquired, as expenditures to
be incurred within one year of the acquisition), and $20.1 million for
construction and capital enhancements (amenities that add a material new feature
or revenue source at a property). These expenditures were funded by borrowings
under the Company's primary credit facility, working capital reserves and net
cash provided by operating activities. During 1999, the Company will provide an
allowance for capital replacements of $300 per apartment unit. ICE and capital
enhancements will primarily be funded by cash from operating activities and
borrowings under the Company's primary credit facility.

22
<PAGE> 25

The Company's accounting treatment of various capital and maintenance costs
is detailed in the following table:

<TABLE>
<CAPTION>
DEPRECIABLE LIFE
EXPENDITURE ACCOUNTING TREATMENT IN YEARS
- ----------- -------------------- ----------------
<S> <C> <C>
Initial capital expenditures........................ capitalize 5 to 30
Capital enhancements................................ capitalize 5 to 30
Capital replacements:
Carpet/vinyl replacement............................ capitalize 5
Carpet cleaning..................................... expense N/A
Major appliance replacement (refrigerators, stoves, capitalize 5
dishwashers, washers/dryers)......................
Cabinet replacement................................. capitalize 5
Major new landscaping............................... capitalize 5
Seasonal plantings and landscape replacements....... expense N/A
Roof replacements................................... capitalize 30
Roof repairs........................................ expense N/A
Model furniture..................................... capitalize 5
Office equipment.................................... capitalize 5
Exterior painting, significant...................... capitalize 5
Interior painting................................... expense N/A
Parking lot repairs................................. expense N/A
Parking lot repaving................................ capitalize 30
Equipment repairs................................... expense N/A
General policy for capitalization................... capitalize amounts various
in excess of $250
</TABLE>

FUNDS FROM OPERATIONS

The Company measures its economic profitability based on FFO, less a
reserve for Capital Replacements of $300 per apartment unit. The Company's
management believes that FFO, less such a reserve, provides investors with an
understanding of the Company's ability to incur and service debt and make
capital expenditures. The Board of Governors of the National Association of Real
Estate Investment Trusts ("NAREIT") defines FFO as net income (loss), computed
in accordance with generally accepted accounting principles ("GAAP"), excluding
gains and losses from debt restructuring and sales of property, plus real estate
related depreciation and amortization (excluding amortization of financing
costs), and after adjustments for unconsolidated partnerships and joint
ventures. The Company calculates FFO based on the NAREIT definition, as adjusted
for minority interest in the AIMCO operating partnership, amortization of
goodwill, the non-cash deferred portion of the income tax provision for
unconsolidated subsidiaries and less the payment of dividends on preferred
stock. FFO should not be considered an alternative to net income or net cash
flows from operating activities, as calculated in accordance with GAAP, as an
indication of the Company's performance or as a measure of liquidity. FFO is not
necessarily indicative of cash available to fund future cash needs. In addition,
there can be no assurance that the Company's basis for computing FFO is
comparable with that of other real estate investment trusts.

23
<PAGE> 26

For the years ended December 31, 1998, 1997 and 1996, the Company's FFO is
calculated as follows (amounts in thousands):

<TABLE>
<CAPTION>
1998 1997 1996
--------- --------- --------
<S> <C> <C> <C>
Income before minority interest in operating
partnership...................................... $ 69,656 $ 32,697 $ 15,673
Extraordinary item................................. -- 269 --
Gain on disposition of properties.................. (4,674) (2,720) (44)
Real estate depreciation, net of minority
interests........................................ 80,369 33,751 19,056
Real estate depreciation related to unconsolidated
entities......................................... 34,840 9,864 --
Amortization of goodwill........................... 11,401 948 500
Amortization of recoverable amount of management
contracts........................................ 14,776 1,587 --
Deferred taxes..................................... 9,215 4,894 --
Preferred stock dividends.......................... (20,701) (135) --
Preferred OP Unit distribution..................... (136) -- --
--------- --------- --------
Funds From Operations (FFO)........................ $ 194,746 $ 81,155 $ 35,185
========= ========= ========
Weighted average number of common shares, common
share equivalents and OP Units outstanding:
Common stock..................................... 45,187 24,055 12,411
Common stock equivalents......................... 2,437 381 16
Preferred stock convertible into common stock.... 2,463 1,006 --
OP Units......................................... 6,732 3,677 2,567
--------- --------- --------
56,819 29,119 14,994
========= ========= ========
CASH FLOW INFORMATION:
Cash flow provided by operating activities......... $ 148,414 $ 73,032 $ 38,806
Cash flow used in investing activities............. (328,321) (717,663) (88,144)
Cash flow provided by financing activities......... 214,124 668,549 60,129
</TABLE>

CONTINGENCIES

HUD Enforcement

In October 1997, NHP received a subpoena from the HUD Inspector General,
which requested documents relating to any arrangement whereby NHP or any of its
affiliates provides or has provided compensation to owners of HUD multi-family
projects in exchange for or in connection with property management of a HUD
project. AIMCO believes that other owners and managers of HUD projects have
received similar subpoenas. Documents provided by AIMCO to the HUD Inspector
General relating to certain of NHP acquisitions of property management rights
for HUD projects may be responsive to the subpoena. AIMCO believes that its
operations are in compliance, in all material respects, with all laws, rules and
regulations relating to HUD-assisted or HUD-insured properties. Effective
February 13, 1998, counsel for AIMCO and the U.S. Attorney for the Northern
District of California entered into a Tolling Agreement related to certain civil
claims the government may have against AIMCO. Although no action has been
initiated against AIMCO or, to AIMCO's knowledge, any owner of a HUD property
managed by AIMCO, if any such action is taken in the future, it could ultimately
affect existing arrangements with respect to HUD projects, affect AIMCO's
ability to receive 2530 Clearances or otherwise have a material adverse effect
on AIMCO's results of operations. HUD also has the authority to suspend or deny
property owners and managers from participation in HUD programs with respect to
additional assistance within a geographic region through imposition of a Limited
Denial of Participation by any HUD office or nationwide for violations of HUD
regulatory requirements.

24
<PAGE> 27

Year 2000 Compliance

GENERAL DESCRIPTION OF THE YEAR 2000 ISSUE AND THE NATURE AND EFFECTS OF
THE YEAR 2000 ON INFORMATION TECHNOLOGY (IT) AND NON-IT SYSTEMS

The Year 2000 issue is the result of computer programs being written using
two digits rather than four digits to define the applicable year. Any of the
Company's computer programs or hardware that have date-sensitive software or
embedded chips may recognize a date using "00" as the year 1900 rather than the
year 2000. This could result in a system failure or miscalculations causing
disruptions of operations, including, among other things, a temporary inability
to process transactions, send invoices, or engage in similar normal business
activities.

Over the past two years, the Company has determined that it will be
required to modify or replace significant portions of its software and certain
hardware so that those systems will properly utilize dates beyond December 31,
1999. The Company presently believes that with modifications or replacements of
existing software and certain hardware, the Year 2000 issue can be mitigated.
However, if such modifications and replacements are not made, or are not
completed in time, the Year 2000 issue could have a material impact on the
operations of the Company.

The Company's plan to resolve Year 2000 issues involves four phases:
assessment, remediation, testing, and implementation. To date, the Company has
fully completed its assessment of all information systems that could be
significantly affected by the Year 2000, and has begun the remediation, testing
and implementation phases on both hardware and software systems. Assessments are
continuing in regards to embedded systems. The status of each is detailed below.

STATUS OF PROGRESS IN BECOMING YEAR 2000 COMPLIANT, INCLUDING TIMETABLE FOR
COMPLETION OF EACH REMAINING PHASE

COMPUTER HARDWARE

During 1997 and 1998, AIMCO identified all of the computer systems at risk
and formulated a plan to repair or replace each of the affected systems. During
1997, when AIMCO merged with NHP, the mainframe system used by NHP was Year 2000
compliant. In August 1998, the Year-2000 compliant system became fully
functional for the entire Company.

In addition to the mainframe, PC-based network servers, routers and desktop
PCs were analyzed for compliance. AIMCO has begun to replace each of the
non-compliant network connections and desktop PCs and, as of December 31, 1998,
had completed approximately 75% of this effort.

The total cost to replace the PC-based network servers, routers and desktop
PCs is expected to be approximately $1.5 million, of which $1.3 million has been
incurred to date. The remaining network connections and desktop PCs are expected
to be upgraded to Year 2000 compliant systems by March 31, 1999.

COMPUTER SOFTWARE

AIMCO utilizes a combination of off-the-shelf, commercially available
software programs as well as custom-written programs that are designed to fit
specific needs. Both of these types of programs were studied, and implementation
plans written and executed with the intent of repairing or replacing any
non-compliant software programs.

In 1997, when AIMCO merged with NHP, the core financial system used by NHP
was Year 2000 compliant. During 1998, AIMCO integrated all of its core financial
systems to this compliant system for general ledger and financial reporting
purposes.

In 1997, AIMCO determined that the software used for property management
and rent collection was not Year 2000 compliant. During 1998, AIMCO implemented
a Year 2000 compliant system at each of its owned or managed properties, at a
cost of $1.4 million. During 1998, AIMCO acquired 82 properties and acquired the
Insignia multi-family business. Insignia owned or managed 1,100 properties. As
properties are
25
<PAGE> 28

acquired, AIMCO converts the existing property management and rent collection
systems to AIMCO's Year 2000 compliant systems. The estimated additional costs
to convert such systems at all recently acquired properties, including those
acquired from Insignia, is $200,000, and the implementation and testing process
is expected to be completed by March 31, 1999.

The final software area is the office software and server operating
systems. AIMCO has upgraded all non-compliant office software systems on each PC
and has upgraded 80% of the server operating systems. The remaining server
operating systems are planned to be upgraded to be Year 2000 compliant by March
31, 1999.

OPERATING EQUIPMENT

AIMCO has operating equipment, primarily at the property sites, which
needed to be evaluated for Year 2000 compliance. In September 1997, AIMCO began
taking a census and inventory of embedded systems (including those devices that
use time to control systems and machines at specific properties, for example,
elevators, heating, ventilating and air conditioning systems, security and alarm
systems, etc.)

The Company has chosen to focus its attention mainly upon security systems,
elevators, heating, ventilating and air conditioning systems, telephone systems
and switches, and sprinkler systems. While this area is the most difficult to
fully research adequately, management has not yet found any major non-
compliance issues that put AIMCO at risk financially or operationally. AIMCO
intends to have a third-party conduct an audit of these systems and report their
findings by March 31, 1999.

Any of the above operating equipment that has been found to be
non-compliant to date has been replaced or repaired. To date, these have
consisted only of security systems and phone systems. As of December 31, 1998,
AIMCO has evaluated approximately 86% of the operating equipment for Year 2000
compliance.

The total cost incurred as of December 31, 1998 to replace or repair the
operating equipment was approximately $70,000. AIMCO estimates the cost to
replace or repair any remaining operating equipment is approximately $325,000,
and AIMCO expects to be completed by April 30, 1999.

AIMCO continues to have "awareness campaigns" throughout the organization
designed to raise awareness and report any possible compliance issues regarding
operating equipment within the enterprise.

NATURE AND LEVEL OF IMPORTANCE OF THIRD PARTIES AND THEIR EXPOSURE TO THE
YEAR 2000

AIMCO continues to conduct surveys of its banking and other vendor
relationships to assess risks regarding their Year 2000 readiness. AIMCO has
banking relationships with three major financial institutions, all of which have
indicated their compliance efforts will be complete before May 1999. AIMCO has
updated data transmission standards with two of the three financial
institutions. AIMCO's contingency plan in this regard is to move accounts from
any institution that cannot be certified Year 2000 compliant by June 1, 1999.

The Company does not rely heavily on any single vendor for goods and
services, and does not have significant suppliers and subcontractors who share
information systems with the Company (external agents). To date, the Company is
not aware of any external agent with a Year 2000 compliance issue that would
materially impact the Company's results of operations, liquidity, or capital
resources. However, the Company has no means of ensuring that external agents
will be Year 2000 compliant.

Management does not believe that the inability of external agents to
complete their Year 2000 remediation process in a timely manner will have a
material impact on the financial position or results of operations of the
Company. However, the effect of non-compliance by external agents is not readily
determinable.

COSTS TO ADDRESS YEAR 2000

The total cost of the Year 2000 project is estimated at $3.5 million and is
being funded from operating cash flows. To date, the Company has incurred
approximately $2.8 million ($0.6 million expensed and $2.2 million capitalized
for new systems and equipment) related to all phases of the Year 2000 project.
Of the total remaining project costs, approximately $0.5 million is attributable
to the purchase of new software and
26
<PAGE> 29

operating equipment, which will be capitalized. The remaining $0.2 million
relates to repair of hardware and software and will be expensed as incurred.

RISKS ASSOCIATED WITH THE YEAR 2000

Management believes it has an effective program in place to resolve the
Year 2000 issue in a timely manner. As noted above, the Company has not yet
completed all necessary phases of the Year 2000 program. In the event that the
Company does not complete any additional phases, certain worst case scenarios
could occur. The worst case scenarios include elevators, security and heating,
ventilating and air conditioning systems that read incorrect dates and operate
with incorrect schedules (e.g., elevators will operate on Monday as if it were
Sunday). Although such a change would be annoying to residents, it is not
business critical.

In addition, disruptions in the economy generally resulting from Year 2000
issues could also adversely affect the Company. The Company could be subject to
litigation for, among other things, computer system failures, equipment
shutdowns or a failure to properly date business records. The amount of
potential liability and lost revenue cannot be reasonably estimated at this
time.

CONTINGENCY PLANS ASSOCIATED WITH THE YEAR 2000

The Company has contingency plans for certain critical applications and is
working on such plans for others. These contingency plans involve, among other
actions, manual workarounds and selecting new relationships for such activities
as banking relationships and elevator operating systems.

INFLATION

Substantially all of the leases at the Company's apartment properties are
for a period of six months or less, allowing, at the time of renewal, for
adjustments in the rental rate and the opportunity to re-lease the apartment
unit at the prevailing market rate. The short term nature of these leases
generally serves to minimize the risk to the Company of the adverse effect of
inflation and the Company does not believe that inflation has had a material
adverse impact on its revenues.

ITEM 7a. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's primary market risk exposure relates to changes in interest
rates. The Company is not subject to any foreign currency exchange rate risk or
commodity price risk, or any other material market rate or price risks. The
Company uses predominantly long-term, fixed-rate and self-amortizing
non-recourse debt in order to avoid the refunding or repricing risks of
short-term borrowings. The Company uses short-term debt financing and working
capital primarily to fund acquisitions and generally expects to refinance such
borrowings with proceeds from equity offerings or long term debt financings.

The Company had $462.0 million of variable rate debt outstanding at
December 31, 1998, which represents 27.8% of the Company's total outstanding
debt. Based on this level of debt, an increase in interest rates of 1% would
result in the Company's income and cash flows being reduced by $4.6 million on
an annual basis. As of March 11, 1999, approximately 9.5% of the Company's
indebtedness bears interest at variable rates. At December 31, 1998, the Company
had $1,198.7 million of fixed rate debt outstanding, of which debt in an
aggregate amount of $39.8 million, $46.4 million, $41.0 million, $107.0 million
and $54.9 million will mature in the years 1999, 2000, 2001, 2002 and 2003,
respectively.

From time to time, the Company enters into interest rate lock agreements to
obtain what the Company considers advantageous pricing for future anticipated
debt issuances.

The estimated aggregate fair value of the Company's cash and cash
equivalents, receivables, payables and short-term secured and unsecured debt as
of December 31, 1998 is assumed to approximate their carrying value due to their
relatively short terms. Management further believes that, after consideration of
interest rate agreements, the fair market value of the Company's secured
tax-exempt bond debt and secured long-term debt approximates their carrying
value, based on market comparisons to similar types of debt instruments having
similar maturities.
27
<PAGE> 30

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The independent auditor's reports, consolidated financial statements and
schedules listed in the accompanying index are filed as part of this report and
incorporated herein by this reference. See "Index to Financial Statements" on
page F-1.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information regarding the Company's Directors required by this item is
presented under the caption "Board of Directors and Officers" in AIMCO's proxy
statement for its 1999 annual meeting of stockholders and is incorporated herein
by reference.

The directors and executive officers of the Company as of March 11, 1999
are:

<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
- ---- --- -------------------------
<S> <C> <C>
Terry Considine................ 51 Chairman of the Board of Directors and Chief
Executive Officer
Peter K. Kompaniez............. 54 Vice Chairman, President and Director
Joel F. Bonder................. 50 Executive Vice President, General Counsel and
Secretary
Patrick J. Foye................ 42 Executive Vice President
Robert Ty Howard............... 41 Executive Vice President -- Ancillary Services
Steven D. Ira.................. 48 Executive Vice President and Co -- Founder
Paul J. McAuliffe.............. 42 Executive Vice President -- Capital Markets
Thomas W. Toomey............... 38 Executive Vice President -- Finance and
Administration
Harry G. Alcock................ 35 Senior Vice President -- Acquisitions
Troy D. Butts.................. 34 Senior Vice President and Chief Financial Officer
Richard S. Ellwood............. 67 Director, Chairman, Audit Committee
J. Landis Martin............... 53 Director, Chairman, Compensation Committee
Thomas L. Rhodes............... 59 Director
John D. Smith.................. 70 Director
</TABLE>

Terry Considine. Mr. Considine has been Chairman of the Board of Directors
and Chief Executive Officer of the Company since July 1994. He is the sole owner
of Considine Investment Co. and prior to July 1994 was owner of approximately
75% of Property Asset Management, L.L.C., Limited Liability Company, a Colorado
limited liability company, and its related entities (collectively, "PAM"), one
of the Company's predecessors. Mr. Considine serves as Chairman and director of
Asset Investors Corporation and Commercial Asset, Inc., two other public real
estate investment trusts. Mr. Considine has been and remains involved as a
principal in a variety of real estate activities, including the acquisition,
renovation, development and disposition of properties. Mr. Considine has also
controlled entities engaged in other businesses such as television broadcasting,
gasoline distribution and environmental laboratories. Mr. Considine received a
B.A. from Harvard College, a J.D. from Harvard Law School and was formerly
admitted as a member of the Massachusetts Bar (inactive).

Mr. Considine has had substantial multifamily real estate experience. From
1975 through July 1994, partnerships or other entities in which Mr. Considine
had controlling interests invested in approximately 35 multifamily apartment
properties and commercial real estate properties. Six of these real estate
assets (four of which were multifamily apartment properties and two of which
were office properties) did not generate sufficient cash flow to service their
related indebtedness and were foreclosed upon by their lenders, causing

28
<PAGE> 31

pre-tax losses of approximately $11.9 million to investors and losses of
approximately $2.7 million to Mr. Considine.

Peter K. Kompaniez. Mr. Kompaniez has been Vice Chairman and a director of
AIMCO since July 1994 and was appointed President in July 1997. Mr. Kompaniez
has also served as Chief Operating Officer of NHP and President of NHP Partners
since June 1997. Since September 1993, Mr. Kompaniez has owned 75% of PDI Realty
Enterprises, Inc., a Delaware corporation ("PDI"), one of AIMCO's predecessors,
and serves as its President and Chief Executive Officer. From 1986 to 1993, he
served as President and Chief Executive Officer of Heron Financial Corporation
("HFC"), a United States holding company for Heron International, N.V's real
estate and related assets. While at HFC, Mr. Kompaniez administered the
acquisition, development and disposition of approximately 8,150 apartment units
(including 6,217 units that have been acquired by AIMCO) and 3.1 million square
feet of commercial real estate. Prior to joining HFC, Mr. Kompaniez was a senior
partner with the law firm of Loeb and Loeb where he had extensive real estate
and REIT experience. Mr. Kompaniez received a B.A. from Yale College and a J.D.
from the University of California (Boalt Hall).

Joel F. Bonder. Mr. Bonder was appointed Executive Vice President General
Counsel and Secretary of AIMCO effective December 1997. Prior to joining AIMCO,
Mr. Bonder served as Senior Vice President and General Counsel of NHP from April
1994 until December 1997. Mr. Bonder served as Vice President and Deputy General
Counsel of NHP Incorporated from June 1991 to March 1994 and as Associate
General Counsel of NHP from 1986 to 1991. From 1983 to 1985, Mr. Bonder
practiced with the Washington, D.C. law firm of Lane & Edson, PC. From 1979 to
1983, Mr. Bonder practiced with the Chicago law firm of Ross and Hardies. Mr.
Bonder received a B.A. from the University of Rochester and a J.D. from
Washington University School of Law.

Patrick J. Foye. Mr. Foye was appointed Executive Vice President of AIMCO
in May 1998. He is responsible for acquisitions of partnership securities,
consolidation of minority interest, and corporate and other acquisitions. Prior
to joining AIMCO, Mr. Foye was a Mergers and Acquisitions Partner in the law
firm of Skadden, Arps, Slate, Meagher & Flom LLP from 1989 to 1998 and was
Managing Partner of the Firm's Brussels, Budapest and Moscow offices from 1992
through 1994. Mr. Foye received a B.A. from Fordham College, a J.D. from Fordham
Law School and was Associate Editor of the Fordham Law Review. Mr. Foye is also
Deputy Chairman of the Long Island Power Authority ("LIPA"). Mr. Foye is also a
member of the New York State Privatization Council.

Robert Ty Howard. Mr. Howard was appointed Executive Vice
President -- Ancillary Services in February 1998. Prior to joining AIMCO, Mr.
Howard served as an officer and/or director of four affiliated companies, Hecco
Ventures, Craig Corporation, Reading Company and Decurion Corporation. Prior to
joining AIMCO, Mr. Howard was responsible for venture investment, financing,
mergers and acquisitions activities and investments in commercial real estate,
both nationally and internationally. From 1983 to 1987, he was employed by
Spieker Properties. Mr. Howard received a B.A. from Amherst College, a J.D. from
Harvard Law School and an M.B.A. from Stanford University Graduate School of
Business.

Steven D. Ira. Mr. Ira is a Co-Founder of AIMCO and has served as Executive
Vice President since July 1994. From 1987 until July 1994, he served as
President of PAM. Prior to merging his firm with PAM in 1987, Mr. Ira acquired
extensive experience in property management. Between 1977 and 1981 he supervised
the property management of over 3,000 apartment and mobile home units in
Colorado, Michigan, Pennsylvania and Florida, and in 1981 he joined with others
to form the property management firm of McDermott, Stein and Ira. Mr. Ira served
for several years on the National Apartment Manager Accreditation Board and is a
former president of both the National Apartment Association and the Colorado
Apartment Association. Mr. Ira is the sixth individual elected to the Hall of
Fame of the National Apartment Association in its 54-year history. He holds a
Certified Apartment Property Supervisor (CAPS) and a Certified Apartment Manager
designation from the National Apartment Association, a Certified Property
Manager (CPM) designation from the National Institute of Real Estate Management
(IREM) and is a member of the Boards of Directors of the National Multi-Housing
Council, the National Apartment

29
<PAGE> 32

Association and the Apartment Association of Metro Denver. Mr. Ira received a
B.S. from Metropolitan State College in 1975.

Paul J. McAuliffe. Mr. McAuliffe was appointed Executive Vice
President -- Capital Markets in February 1999. Prior to joining AIMCO, Mr.
McAuliffe was Senior Managing Director of Secured Capital Corp and prior to that
time had been a Managing Director of Smith Barney, Inc. from 1993 to 1996, where
he was the senior member of the underwriting team that lead AIMCO's initial
public offering in 1994. Mr. McAuliffe was also a Managing Director and head of
the real estate group at CS First Boston from 1990 to 1993 and he was a
Principal in the real estate group at Morgan Stanley & Co. Inc. where he worked
from 1983 to 1990. Mr. McAuliffe received a B.A. from Columbia College and an
M.B.A. from University of Virginia, Darden School.

Thomas W. Toomey. Mr. Toomey has served as Senior Vice President -- Finance
and Administration of AIMCO since January 1996 and was promoted to Executive
Vice President -- Finance and Administration in March 1997. From 1990 until
1995, Mr. Toomey served in a similar capacity with Lincoln Property Company
("LPC") as Vice President/Senior Controller and Director of Administrative
Services of Lincoln Property Services where he was responsible for LPC's
computer systems, accounting, tax, treasury services and benefits
administration. From 1984 to 1990, he was an audit manager with Arthur Andersen
& Co. where he served real estate and banking clients. Mr. Toomey received a
B.S. in Business Administration/Finance from Oregon State University.

Harry G. Alcock. Mr. Alcock has served as a Vice President since July 1996,
and was promoted to Senior Vice President -- Acquisitions in October 1997, with
responsibility for acquisition and financing activities since July 1994. From
June 1992 until July 1994, Mr. Alcock served as Senior Financial Analyst for PDI
and HFC. From 1988 to 1992, Mr. Alcock worked for Larwin Development Corp., a
Los Angeles based real estate developer, with responsibility for raising debt
and joint venture equity to fund land acquisitions and development. From 1987 to
1988, Mr. Alcock worked for Ford Aerospace Corp. He received his B.S. from San
Jose State University.

Troy D. Butts. Mr. Butts has served as Senior Vice President and Chief
Financial Officer of AIMCO since November 1997. Prior to joining AIMCO, Mr.
Butts served as a Senior Manager in the audit practice of the Real Estate
Services Group for Arthur Andersen LLP in Dallas, Texas. Mr. Butts was employed
by Arthur Andersen LLP for ten years and his clients were primarily
publicly-held real estate companies, including office and multi-family real
estate investment trusts. Mr. Butts holds a Bachelor of Business Administration
degree in Accounting from Angelo State University and is a Certified Public
Accountant.

Richard S. Ellwood. Mr. Ellwood was appointed a director of AIMCO in July
1994. Mr. Ellwood is currently Chairman of the Audit Committee and a member of
the Compensation Committee. Mr. Ellwood is the founder and President of R.S.
Ellwood & Co., Incorporated, a real estate investment banking firm. Prior to
forming R.S. Ellwood & Co., Incorporated in 1987, Mr. Ellwood had 31 years
experience on Wall Street as an investment banker, serving as: Managing Director
and senior banker at Merrill Lynch Capital Markets from 1984 to 1987; Managing
Director at Warburg Paribas Becker from 1978 to 1984; general partner and then
Senior Vice President and a director at White, Weld & Co. from 1968 to 1978; and
in various capacities at J.P Morgan & Co. from 1955 to 1968. Mr. Ellwood
currently serves as a director of Felcor Lodging Trust, Incorporated and Florida
East Coast Industries, Inc.

J. Landis Martin. Mr. Martin was appointed a director of AIMCO in July 1994
and became Chairman of the Compensation Committee on March 19, 1998. Mr. Martin
is a member of the Audit Committee. Mr. Martin has served as President and Chief
Executive Officer and a director of NL Industries, Inc., a manufacturer of
titanium dioxide, since 1987. Mr. Martin has served as Chairman of Tremont
Corporation, a holding company operating through its affiliates Titanium Metals
Corporation and NL Industries, Inc., since August 1990 and as Chief Executive
Officer and a Director of Tremont since 1988. Mr. Martin has served as Chairman
of TIMET, an integrated producer of titanium since 1987 and Chief Executive
Officer since January 1995. From 1990 until its acquisition by a predecessor of
Haliburton Company ("Haliburton") in 1994, Mr. Martin served as Chairman of the
Board and Chief Executive Officer of Baroid Corporation, an

30
<PAGE> 33

oilfield service company. In addition to Tremont, NL and TIMET, Mr. Martin is a
director of Haliburton, which is engaged in the petroleum services, hydrocarbon
and engineering industries.

Thomas L. Rhodes. Mr. Rhodes was appointed a Director of AIMCO in July 1994
and is currently a Member of the Audit and Compensation Committees (and served
as Chairman of the Compensation Committee prior to March 19, 1998). Mr. Rhodes
has served as the President and Director of National Review magazine since
November 30, 1992, where he has also served as a Director since 1988. From 1976
to 1992, he held various positions at Goldman, Sachs & Co. and was elected a
General Partner in 1986 and served as a General Partner from 1987 until November
27, 1992. He is currently Vice Chairman of the Board, and a Director of Asset
Investors and Commercial Assets. He also serves as a Director of Delphi
Financial Group and its subsidiaries, Delphi International Ltd., Oracle
Reinsurance Company and The Lynde and Harry Bradley Foundation and is a Trustee
of the Heritage Foundation.

John D. Smith. Mr. Smith was appointed a director of AIMCO in November
1994. Mr. Smith is a member of the Compensation Committee and the Audit
Committee. Mr. Smith is Principal and President of John D. Smith Developments.
Mr. Smith has been a shopping center developer, owner and consultant for over
8.6 million square feet of shopping center projects including Lenox Square in
Atlanta, Georgia. Mr. Smith is a Trustee and former President of the
International Council of Shopping Centers and was selected to be a member of the
American Society of Real Estate Counselors. Mr. Smith served as a director for
Pan-American Properties, Inc. (National Coal Board of Great Britain) formerly
known as Continental Illinois Properties. He also serves as a director of
American Fidelity Assurance Companies and is retained as an advisor by Shop
System Study Society, Tokyo, Japan.

Information required by this item is presented under the caption "Other
Matters-Section 16(a) Compliance" in the Company's proxy statement for its 1999
annual meeting of stockholders and is incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this item is presented under the captions
"Summary Compensation Table," "Option/SAR Grants in Last Fiscal Year" and
"Aggregate Option/SAR Exercises in Last Fiscal Year and Fiscal Year-end
Options/SAR Values" in AIMCO's proxy statement for its 1999 annual meeting of
stockholders and is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information required by this item is presented under the caption
"Security Ownership of Certain Beneficial Owners and Management" in AIMCO's
proxy statement for its 1999 annual meeting of stockholders and is incorporated
herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this item is presented under the caption
"Certain Relationships and Transactions" in AIMCO's proxy statement for its 1999
annual meeting of stockholders and is incorporated herein by reference.

31
<PAGE> 34

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a) (1) The financial statements listed in the Index to Financial
Statements on Page F-1 of this report are filed as part of this report and
incorporated herein by reference.

(a) (2) The financial statement schedules listed in the Index to Financial
Statements on Page F-1 of this report are filed as part of this report and
incorporated herein by reference.

(a) (3) The Exhibit Index is included on page 33 of this report and
incorporated herein by reference.

(b) Reports on Form 8-K for the quarter ended December 31, 1998:

Current Report on Form 8-K, dated October 1, 1998, relating to the
completion of the merger of Insignia Financial Group, Inc. with and into
Apartment Investment and Management Company; the conversion of each share of
Class A Common Stock of Insignia Financial Group, Inc. into the right to receive
0.262 shares of Class E Cumulative Convertible Preferred Stock of Apartment
Investment and Management Company; Apartment Investment and Management Company
and AIMCO Properties, L.P.'s entering into an unsecured interim term loan
agreement with an affiliate of Lehman Brothers Inc.; and Apartment Investment
and Management Company's amendment and restatement of its revolving credit
facility with Bank of America National Trust and Savings Association and
BankBoston, N.A.

Current Report on Form 8-K, dated November 2, 1998 (and Amendment Nos. 1, 2
and 3 thereto, filed November 24, 1998, December 7, 1998 and December 14, 1998,
respectively), relating to the acquisition of five multifamily residential
properties from Cirque Property, L.C.; the acquisition of interests in nine
multifamily restricted properties from affiliates of Realty Investment Co.; and
the acquisition of the SunLake Apartments from a related party. The Report
includes the Combined Historical Summary of Gross Income and Direct Operating
Expenses of Cirque Apartment Communities for the year ended December 31, 1997
and the three months ended March 31, 1998 (unaudited), together with the Report
of Independent Auditors; the Combined Historical Summary of Gross Income and
Direct Operating Expenses of Realty Investment Apartment Communities I for the
year ended December 31, 1997 and the six months ended June 30, 1998 (unaudited),
together with the Independent Auditors' Report; the Combined Historical Summary
of Gross Income and Direct Operating Expenses of Realty Investment Apartment
Communities II for the year ended December 31, 1997 and the six months ended
June 30, 1998 (unaudited), together with the Independent Auditors' Report; the
Historical Summary of Gross Income and Direct Operating Expenses of Sun Lake
Apartments for the years ended December 31, 1997, 1996 and 1995 and the nine
months ended September 30, 1998 (unaudited), together with the Independent
Auditor's Report; and certain pro forma financial information.

Current Report on Form 8-K, dated December 21, 1998, relating to the
Company's entering into an Acquisition and Contribution Agreement and Joint
Escrow Instructions with Calhoun Beach Associates II Limited Partnership,
including the Historical Summary of Gross Income and Direct Operating Expenses
of Calhoun Beach Club Apartments for the year ended December 31, 1997 and the
nine months ended September 30, 1998 (unaudited), together with the Independent
Auditor's Report, and certain pro forma information.

32
<PAGE> 35

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
2.1 -- Second Amended and Restated Agreement and Plan of Merger,
dated as of January 22, 1999, by and between Apartment
Investment and Management Company and Insignia Properties
Trust (Exhibit 2.2 to the Current Report on Form 8-K of
Insignia Properties Trust, dated February 11, 1999, is
incorporated herein by this reference)
2.2 -- Agreement and Plan of Merger, dated as of December 23,
1997, by and between Apartment Investment and Management
Company and Ambassador Apartments, Inc. (Exhibit 2.1 to
AIMCO's Current Report on Form 8-K, dated December 23,
1997, is incorporated herein by this reference)
2.3 -- Amended and Restated Agreement and Plan of Merger, dated
as of May 26, 1998, by and among Apartment Investment and
Management Company, AIMCO Properties, L.P., Insignia
Financial Group, Inc., and Insignia/ESG Holdings, Inc.
(Exhibit 2.1 to AIMCO's Registration Statement on Form
S-4, filed August 5, 1998, is incorporated herein by this
reference)
3.1 -- Charter
3.2 -- Bylaws
4.1 -- Amended and Restated Declaration of Trust of IFT
Financing I (formerly Insignia Financing I), dated as of
November 1, 1996, among Insignia Financial Group, Inc.,
as Sponsor, First Union National Bank of South Carolina,
as Property Trustee, First Union Bank of Delaware, as
Delaware Trustee and Andrew I. Farkas, John K. Lines and
Ronald Uretta as Regular Trustees (Exhibit 4.2 to Form
S-3 of Insignia Financial Group, Inc. dated December 10,
1996, is incorporated herein by this reference)
4.2 -- Indenture for the 6.5% Convertible Subordinated
Debentures, dated as of November 1, 1996, between
Insignia Financial Group, Inc., as Issuer and First Union
National Bank of South Carolina, as Trustee (Exhibit 4.3
to Form S-3 of Insignia Financial Group, Inc., dated
December 10, 1996, is incorporated herein by this
reference)
4.3 -- First Supplemental Indenture, dated as of October 1,
1998, by and among Apartment Investment and Management
Company, Insignia Financial Group, Inc. and First Union
National Bank (formerly First Union National Bank of
South Carolina), as trustee.
10.1 -- Amended and Restated Credit Agreement (Unsecured
Revolver-to-Term Facility), dated as of October 1, 1998,
among AIMCO Properties, L.P., Bank of America National
Trust and Savings Association, and BankBoston, N.A.
(Exhibit 10.1 to AIMCO's Current Report on Form 8-K,
dated October 1, 1998, is incorporated herein by this
reference)
10.2 -- First Amendment to Credit Agreement, dated as of November
6, 1998, by and among AIMCO Properties, L.P., the
financial institutions listed on the signature pages
thereof and Bank of America National Trust and Savings
Association
10.3 -- Promissory Note, dated October 1, 1998, in the principal
amount of $65,000,000 issued by AIMCO Properties, L.P. to
Bank of America National Trust and Savings Association,
and BankBoston, N.A. (Exhibit 10.2 to AIMCO's Current
Report on Form 8-K, dated October 1, 1998, is
incorporated herein by this reference)
10.4 -- Promissory Note, dated October 1, 1998, in the principal
amount of $35,000,000 issued by AIMCO Properties, L.P. to
Bank of America National Trust and Savings Association,
and BankBoston, N.A. (Exhibit 10.3 to AIMCO's Current
Report on Form 8-K, dated October 1, 1998, is
incorporated herein by this reference)
10.5 -- Swing Line Promissory Note, dated October 1, 1998, in the
principal amount of $30,000,000, issued by AIMCO
Properties, L.P. to Bank of America National Trust and
Savings Association, and BankBoston, N.A. (Exhibit 10.4
to AIMCO's Current Report on Form 8-K, dated October 1,
1998, is incorporated herein by this reference)
</TABLE>

33
<PAGE> 36

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
10.6 -- Payment Guaranty of Non-Preferred Stock Subsidiaries,
dated as of October 1, 1998, by Apartment Investment and
Management Company, AIMCO Holdings QRS, Inc., AIMCO/OTC
QRS, Inc., AIMCO Holdings, L.P., AIMCO-GP, Inc.,
AIMCO-LP, Inc., AIMCO Properties Finance Corp., AIMCO
Somerset, Inc., Ambassador II, L.P., Ambassador X, L.P.,
Ambassador IV, Inc., Ambassador V, Inc., Ambassador
Florida Partners Inc. and A.J. Two, Inc. (Exhibit 10.5 to
AIMCO's Quarterly Report on Form 10-Q for the quarterly
period ending September 30, 1998, is incorporated herein
by this reference)
10.7 -- Payment Guaranty of Preferred Stock Subsidiaries, dated
as of October 1, 1998, by Property Asset Management
Services, Inc., Property Asset Management Services, L.P.,
NHP Management Company and Property Asset Management
Services-California, L.L.C. (Exhibit 10.6 to AIMCO's
Quarterly Report on Form 10-Q for the quarterly period
ending September 30, 1998, is incorporated herein by this
reference)
10.8 -- Payment Guaranty of Non-Preferred Stock Subsidiaries,
dated as of October 1, 1998, by CPF XIV/St. Charleston,
Inc., CPF XIV/Torrey Pines, Inc., CPF XIV/ Sun River,
Inc., CPF XIV/Lakeside Place, Inc., ConCap CCP/IV
Stratford Place Properties, Inc., ConCap CCP/IV River's
Edge Properties, Inc., PRA, Inc. and National Property
Investors, Inc. (Exhibit 10.7 to AIMCO's Quarterly Report
on Form 10-Q for the quarterly period ending September
30, 1998, is incorporated herein by this reference)
10.9 -- Third Amended and Restated Agreement of Limited
Partnership of AIMCO Properties, L.P., dated as of July
29, 1994 as amended and restated as of October 1, 1998
(Exhibit 10.8 to AIMCO's Quarterly Report on Form 10-Q
for the quarterly period ending September 30, 1998, is
incorporated herein by this reference)
10.10 -- First Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of November 6, 1998 (Exhibit 10.9 to
AIMCO's Quarterly Report on Form 10-Q for the quarterly
period ending September 30, 1998, is incorporated herein
by this reference)
10.11 -- Second Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of December 30, 1998 (Exhibit 10.1 to
Amendment No. 1 to AIMCO's Current Report on Form 8-K/A,
filed February 11, 1999, is incorporated herein by this
reference)
10.12 -- Third Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of February 18, 1999
10.13 -- Credit Agreement dated December 30, 1997, by and among
Insignia Properties, L.P., Lehman Commercial Paper Inc.,
as lending agent, First Union National Bank, as
administrative agent, and the lenders from time to party
thereto (Exhibit 10.8 to Form S-4 of Insignia Properties
Trust, filed May 28, 1998, is incorporated herein by this
reference)
10.14 -- Unconditional Guaranty, dated as of December 30, 1997,
made by Insignia Properties Trust in favor of First Union
National Bank (Exhibit 10.9 to Form S-4 of Insignia
Properties Trust, filed May 28, 1998, is incorporated
herein by this reference)
10.15 -- Shareholders Agreement, dated October 1, 1998, by and
among Apartment Investment and Management Company, Andrew
L. Farkas, James A. Aston and Frank M. Garrison (Exhibit
10.4 to AIMCO's Schedule 13D filed on October 15, 1998,
is incorporated herein by this reference)
10.16 -- $300,000,000 Interim Term Loan Agreement, dated as of
October 1, 1998, among Apartment Investment and
Management Company, AIMCO Properties, L.P., the several
lenders from time to time parties thereto, Lehman
Brothers, Inc., and Lehman Commercial Paper Inc.
10.17 -- Subsidiaries Guarantee, dated as October 1, 1998, made by
each of the entities that are signatories thereto in
favor of Lehman Commercial Paper Inc. as administrative
agent for the several banks and other financial
institutions or entities from time to time parties to the
Interim Term Loan Agreement
</TABLE>

34
<PAGE> 37

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
10.18 -- Preferred Stock Subsidiaries' Guarantee, dated as of
October 1, 1998, made by each of the entities that are
signatories thereto in favor of Lehman Commercial Paper
Inc., as administrative agent for the several banks and
other financial institutions or entities from time to
time parties to the Interim Loan Agreement
10.19 -- Common Stock Purchase Agreement made as of August 26,
1997, by and between Apartment Investment and Management
Company and ABKB/LaSalle Securities Limited Partnership
(Exhibit 99.1 to AIMCO's Current Report on Form 8-K,
dated August 26, 1997, is incorporated herein by this
reference)
10.20 -- Purchase and Sale Agreement and Joint Escrow
Instructions, made and entered into as of August 22,
1997, by and between AIMCO Properties, L.P. and each of
the parties identified on Exhibit "A" attached thereto
(collectively, the "Winthrop Sellers") (Exhibit 99.3 to
AIMCO's Current Report on Form 8-K, dated October 15,
1997, is incorporated herein by this reference)
10.21 -- Letter Agreement, dated October 15, 1997 by and between
AIMCO Properties, L.P. and the Winthrop Sellers (Exhibit
99.6 to AIMCO's Current Report on Form 8-K, dated October
15, 1997, is incorporated herein by this reference)
10.22 -- Summary of Arrangement for Sale of Stock to Executive
Officers (Exhibit 10.104 to AIMCO's Annual Report on Form
10-K for the fiscal year 1996, is incorporated herein by
this reference) *
10.23 -- Apartment Investment and Management Company 1997 Stock
Award and Incentive Plan (Annex A to AIMCO's Proxy
Statement for the Annual Meeting of Stockholders to be
held on April 24, 1997, is incorporated herein by this
reference) *
10.24 -- Amendment No. 1 to the Apartment Investment and
Management Company 1997 Stock Award and Incentive Plan
(Annex A to AIMCO's Proxy Statement for Annual Meeting of
Stockholders to be held on May 8, 1998, is incorporated
herein by this reference) *
10.25 -- Apartment Investment and Management Company 1998
Incentive Compensation Plan (Annex B to AIMCO's Proxy
Statement for Annual Meeting of Stockholders to be held
on May 8, 1998, is incorporated herein by this reference)
*
10.26 -- Employment Contract, executed on July 29, 1994, by and
between AIMCO Properties, L.P. and Peter Kompaniez
(Exhibit 10.44A to AIMCO's Annual Report on Form 10-K for
the fiscal year 1994, is incorporated herein by this
reference)*
10.27 -- Real Estate Acquisition Agreement, dated as of May 22,
1997, by and among Apartment Investment and Management
Company, AIMCO Properties, L.P., Demeter Holdings
Corporation, Phemus Corporation, Capricorn Investors,
L.P., J. Roderick Heller, III and NHP Partners LLC
(Exhibit 2.1 to AIMCO's Current Report on Form 8-K, dated
June 3, 1997, is incorporated herein by this reference)
10.28 -- Contribution Agreement, dated as of January 31, 1998, by
and between Apartment Investment and Management Company
and Terry Considine and Peter K. Kompaniez (Exhibit 2.1
to AIMCO's Current Report on Form 8-K, dated January 31,
1998, is incorporated herein by this reference)*
10.29 -- Amended and Restated Assignment and Assumption Agreement,
dated as of December 7, 1998, by and among Insignia
Properties, L.P. and AIMCO Properties, L.P. (Exhibit 10.1
to the Current Report on Form 8-K of Insignia Properties
Trust, dated February 11, 1999, is incorporated herein by
this reference)
</TABLE>

35
<PAGE> 38

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
10.30 -- Amended and Restated Indemnification Agreement, dated as
of May 26, 1998, by and between Apartment Investment and
Management Company and Insignia/ESG Holdings, Inc.
(Exhibit 2.2 to AIMCO's Registration Statement on Form
S-4, filed August 5, 1998, is incorporated herein by this
reference.)
10.31 -- Form of Restricted Stock Agreement (1997 Stock Award and
Incentive Plan) (Exhibit 10.11 to AIMCO's Quarterly
Report on Form 10-Q for the quarterly period ending
September 30, 1997, is incorporated herein by this
reference)*
10.32 -- Apartment Investment and Management Company Non-Qualified
Employee Stock Option Plan, adopted August 29, 1996
(Exhibit 10.8 to AIMCO's Quarterly Report on Form 10/Q-A
for the quarterly period ending September 30, 1996, is
incorporated herein by this reference)*
10.33 -- Amended and Restated Apartment Investment and Management
Company Non-Qualified Employee Stock Option Plan (Annex B
to AIMCO's Proxy Statement for the Annual Meeting of
Stockholders to be held on April 24, 1997, is
incorporated herein by this reference)*
10.34 -- Employment Contract executed on July 29, 1994 by and
between AIMCO Properties, LP and Terry Considine (Exhibit
10.44C to AIMCO's Annual Report on Form 10-K for the
fiscal year 1994, is incorporated herein by this
reference)*
10.35 -- Employment Contract executed on July 29, 1994 by and
between AIMCO Properties, LP and Steven D. Ira (Exhibit
10.44D to AIMCO's Annual Report on Form 10-K for the
fiscal year 1994, is incorporated herein by this
reference)*
10.36 -- The 1994 Stock Incentive Plan for Officers, Directors and
Key Employees of Ambassador Apartments, Inc., Ambassador
Apartments, L.P. and Subsidiaries (Exhibit 10.40 to
Ambassador Apartments, Inc. Annual Report on Form 10-K
for the fiscal year 1997, is incorporated herein by this
reference)*
10.37 -- Amendment to the 1994 Stock Incentive Plan for Officers,
Directors and Key Employees of Ambassador Apartments,
Inc., Ambassador Apartments, L.P. and Subsidiaries
(Exhibit 10.41 to Ambassador Apartments, Inc. Annual
Report on Form 10-K for the fiscal year 1997, is
incorporated herein by this reference)*
10.38 -- The 1996 Stock Incentive Plan for Officers, Directors and
Key Employees of Ambassador Apartments, Inc., Ambassador
Apartments, L.P. and Subsidiaries, as amended March 20,
1997 (Exhibit 10.42 to Ambassador Apartments, Inc. Annual
Report on Form 10-K for the fiscal year 1997, is
incorporated herein by this reference)*
10.39 -- Insignia 1992 Stock Incentive Plan, as amended through
March 28, 1994 and November 13, 1995 (Exhibit 10.1 to
Insignia Financial Group, Inc. Annual Report on Form 10-K
for the fiscal year 1997, is incorporated herein by this
reference)*
10.40 -- NHP Incorporated 1990 Stock Option Plan (Exhibit 10.9 to
NHP Incorporated Annual Report on Form 10-K for the
fiscal year 1995, is incorporated herein by this
reference)*
10.41 -- NHP Incorporated 1995 Incentive Stock Option Plan
(Exhibit 10.10 to NHP Incorporated Annual Report on Form
10-K for the fiscal year 1995, is incorporated herein by
this reference)*
10.42 -- Form of Incentive Stock Option Agreement (1997 Stock
Award and Incentive Plan)*
21.1 -- List of Subsidiaries
23.1 -- Consent of Ernst & Young LLP
27.1 -- Financial Data Schedule
99.1 -- Agreement re: disclosure of long-term debt instruments
</TABLE>

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

(1) Schedules and supplemental materials to the exhibits have been omitted but
will be provided to the Securities and Exchange Commission upon request.

* Management contract or compensatory plan or arrangement.

36
<PAGE> 39

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on the 11th day of
March, 1999.

APARTMENT INVESTMENT AND
MANAGEMENT COMPANY

/s/ TERRY CONSIDINE

------------------------------------
Terry Considine
Chairman of the Board
And Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>

/s/ TERRY CONSIDINE Chairman of the Board and Chief March 11, 1999
- ----------------------------------------------------- Executive Officer
Terry Considine

/s/ PETER K. KOMPANIEZ Vice Chairman, President and March 11, 1999
- ----------------------------------------------------- Director
Peter K. Kompaniez

/s/ THOMAS W. TOOMEY Executive Vice President of March 11, 1999
- ----------------------------------------------------- Finance and Administration
Thomas W. Toomey

/s/ PATRICK FOYE Executive Vice President March 11, 1999
- -----------------------------------------------------
Patrick Foye

/s/ TROY D. BUTTS Senior Vice President and Chief March 11, 1999
- ----------------------------------------------------- Financial Officer
Troy D. Butts

/s/ RICHARD S. ELLWOOD Director March 11, 1999
- -----------------------------------------------------
Richard S. Ellwood

/s/ J. LANDIS MARTIN Director March 11, 1999
- -----------------------------------------------------
J. Landis Martin

/s/ THOMAS L. RHODES Director March 11, 1999
- -----------------------------------------------------
Thomas L. Rhodes

/s/ JOHN D. SMITH Director March 11, 1999
- -----------------------------------------------------
John D. Smith
</TABLE>

37
<PAGE> 40

INDEX TO FINANCIAL STATEMENTS

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

FINANCIAL STATEMENTS:
Report of Independent Auditors............................ F-2
Consolidated Balance Sheets as of December 31, 1998 and
1997................................................... F-3
Consolidated Statements of Income for the Years Ended
December 31, 1998, 1997 and 1996....................... F-4
Consolidated Statements of Stockholders' Equity for the
Years Ended December 31, 1998, 1997 and 1996........... F-5
Consolidated Statements of Cash Flow for the Years Ended
December 31, 1998, 1997 and 1996....................... F-6
Notes to Consolidated Financial Statements................ F-10

FINANCIAL STATEMENT SCHEDULES:
Schedule III -- Real Estate and Accumulated
Depreciation........................................... F-34
Schedule IV -- Mortgage Loans on Real Estate.............. F-41
All other schedules are omitted because they are not
applicable or the required information is shown in the
financial statements or notes thereto.
</TABLE>

F-1
<PAGE> 41

REPORT OF INDEPENDENT AUDITORS

Stockholders and Board of Directors
Apartment Investment and Management Company

We have audited the accompanying consolidated balance sheets of Apartment
Investment and Management Company as of December 31, 1998 and 1997, and the
related consolidated statements of income, stockholders' equity and cash flows
for each of the three years in the period ended December 31, 1998. Our audits
also included the consolidated financial statement schedules listed in the Index
at Item 14(a)(2). These financial statements and schedules are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and schedules based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
Apartment Investment and Management Company at December 31, 1998 and 1997, and
the consolidated results of its operations and its cash flows for each of the
three years in the period ended December 31, 1998 in conformity with generally
accepted accounting principles. Also, in our opinion, the related consolidated
financial statement schedules when considered in relation to the basic financial
statements taken as a whole, present fairly, in all material respects the
information set forth therein.

/s/ ERNST & YOUNG LLP

Denver, Colorado
March 11, 1999

F-2
<PAGE> 42

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 1998 AND 1997
(IN THOUSANDS, EXCEPT SHARE DATA)

ASSETS

<TABLE>
<CAPTION>
1998 1997
---------- ----------
<S> <C> <C>
Real Estate, net of accumulated depreciation of $228,880 and
$153,285.................................................. $2,573,718 $1,503,922
Property held for sale...................................... 27,304 6,284
Investments in and notes receivable from unconsolidated
subsidiaries.............................................. 198,417 84,459
Investments in and notes receivable from unconsolidated real
estate partnerships....................................... 1,036,479 212,150
Cash and cash equivalents................................... 71,305 37,088
Restricted cash............................................. 55,826 24,229
Notes receivable............................................ 33,708 --
Goodwill.................................................... 128,658 125,239
Investments in securities................................... -- 22,144
Other assets................................................ 142,870 84,995
---------- ----------
$4,268,285 $2,100,510
========== ==========

LIABILITIES AND STOCKHOLDERS' EQUITY

Secured notes payable....................................... $ 843,791 $ 681,421
Secured tax-exempt bond financing........................... 398,602 74,010
Unsecured short-term financing.............................. 310,300 --
Secured short-term financing................................ 108,022 53,099
---------- ----------
Total indebtedness................................. 1,660,715 808,530
---------- ----------
Accounts payable, accrued and other liabilities............. 208,300 88,170
Resident security deposits and prepaid rents................ 12,654 10,213
---------- ----------
Total liabilities.................................. 1,881,669 906,913
---------- ----------
Commitments and contingencies............................... -- --
Company-obligated mandatory redeemable convertible preferred
securities of a subsidiary trust.......................... 149,500 --
Minority interest in other entities......................... 185,705 36,335
Minority interest in operating partnership.................. 148,847 111,962
Stockholders' equity
Preferred Stock........................................... 792,468 135,000
Class A Common Stock, $.01 par value, 484,027,500 shares
and 150,000,000 shares authorized, 48,451,388 and
40,439,218 shares issued and outstanding,
respectively............................................ 485 403
Class B Common Stock, $.01 par value, 100,000 and 262,500
shares authorized, none and 162,500 shares issued and
outstanding............................................. -- 2
Additional paid-in capital................................ 1,246,962 977,601
Notes receivable on common stock purchases................ (49,658) (35,095)
Distributions in excess of earnings....................... (87,693) (30,928)
Unrealized loss on investments............................ -- (1,683)
---------- ----------
Total stockholders' equity......................... 1,902,564 1,045,300
---------- ----------
$4,268,285 $2,100,510
========== ==========
</TABLE>

See accompanying notes to consolidated financial statements.

F-3
<PAGE> 43

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
1998 1997 1996
--------- -------- --------
<S> <C> <C> <C>
RENTAL PROPERTY OPERATIONS
Rental and other property revenues.......................... $ 377,139 $193,006 $100,516
Property operating expenses................................. (147,541) (76,168) (38,400)
Owned property management expense........................... (11,013) (6,620) (2,746)
Depreciation................................................ (84,635) (37,741) (19,556)
--------- -------- --------
Income from property operations............................. 133,950 72,477 39,814
--------- -------- --------
SERVICE COMPANY BUSINESS
Management fees and other income............................ 24,103 13,937 8,367
Management and other expenses............................... (16,764) (10,373) (5,560)
Corporate overhead allocation............................... (196) (588) (590)
--------- -------- --------
Income from service company business........................ 7,143 2,976 2,217
--------- -------- --------
General and administrative expenses......................... (14,650) (5,396) (1,512)
Interest expense............................................ (89,424) (51,385) (24,802)
Interest income............................................. 30,450 8,676 523
Equity in losses of unconsolidated real estate
partnerships.............................................. (4,854) (1,798) --
Equity in earnings of unconsolidated subsidiaries........... 11,570 4,636 --
Minority interest in other entities......................... (468) 1,008 (111)
Amortization of goodwill.................................... (8,735) (948) (500)
--------- -------- --------
Income from operations...................................... 64,982 30,246 15,629
Gain on disposition of properties........................... 4,674 2,720 44
--------- -------- --------
Income before extraordinary item and minority interest in
operating partnership..................................... 69,656 32,966 15,673
Extraordinary item -- early extinguishment of debt.......... -- (269) --
--------- -------- --------
Income before minority interest in operating partnership.... 69,656 32,697 15,673
Minority interest in operating partnership.................. (5,182) (4,064) (2,689)
--------- -------- --------
Net income.................................................. 64,474 28,633 12,984
Net income attributable to preferred stockholders........... 26,533 2,315 --
--------- -------- --------
Net income attributable to common stockholders.............. $ 37,941 $ 26,318 $ 12,984
========= ======== ========
Comprehensive Income
Net income.................................................. $ 64,474 $ 28,633 $ 12,984
Other comprehensive income:
Net unrealized gains on investment in securities.......... -- (1,683) --
--------- -------- --------
Comprehensive income........................................ $ 64,474 $ 26,950 $ 12,984
========= ======== ========
Basic earnings per common share............................. $ 0.84 $ 1.09 $ 1.05
========= ======== ========
Diluted earnings per common share........................... $ 0.80 $ 1.08 $ 1.04
========= ======== ========
Weighted average common shares outstanding.................. 45,187 24,055 12,411
========= ======== ========
Weighted average common shares and common share equivalents
outstanding............................................... 47,624 24,436 12,427
========= ======== ========
Dividends paid per common share............................. $ 2.25 $ 1.85 $ 1.70
========= ======== ========
</TABLE>

See accompanying notes to consolidated financial statements.

F-4
<PAGE> 44

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
CLASS A CLASS B
PREFERRED STOCK COMMON STOCK COMMON STOCK NOTES
----------------- --------------- --------------- ADDITIONAL RECEIVABLE
SHARES SHARES SHARES PAID-IN FROM
ISSUED AMOUNT ISSUED AMOUNT ISSUED AMOUNT CAPITAL OFFICERS
------ -------- ------ ------ ------ ------ ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE DECEMBER 31, 1995..................... -- $ -- 11,847 $118 585 $ 6 $ 175,211 $ --
Net proceeds from of Class A Common Stock..... -- -- 1,265 13 -- -- 28,123 --
Conversion of Class B Common Stock to Class A
Common Stock................................. -- -- 260 3 (260) (3) -- --
Conversion of Operating Partnership Units to
Class A Common Stock......................... -- -- 212 2 -- -- 3,797 --
Class A Common Stock issued as consideration
for real estate acquired..................... -- -- 704 7 -- -- 15,287 --
Purchase of stock by officers................. -- -- 895 9 -- -- 18,568 (7,140)
Repurchase of Class A Common Stock............ -- -- (206) (2) -- -- (4,253) --
Stock options exercised....................... -- -- 3 -- -- -- 58 --
Net Income.................................... -- -- -- -- -- -- -- --
Dividends paid -- Class A Common Stock........ -- -- -- -- -- -- -- --
------ -------- ------ ---- ---- --- ---------- --------
BALANCE DECEMBER 31, 1996..................... -- -- 14,980 150 325 3 236,791 (7,140)
Net proceeds from issuance of Class A Common
Stock........................................ -- -- 16,367 164 -- -- 509,950 --
Net proceeds from issuance of Preferred
Stock........................................ 750 75,000 -- -- -- -- -- --
Net proceeds from issuance of Class C
Preferred Stock.............................. 2,400 60,000 -- -- -- -- (1,890) --
Repurchase of Class A Common Stock from
officer...................................... -- -- -- -- -- -- (67) 67
Conversion of Class B Common Stock to Class A
Common Stock................................. -- -- 163 1 (163) (1) -- --
Conversion of operating partnership units to
Class A Common Stock......................... -- -- 562 6 -- -- 8,615 --
Purchase of stock by officers................. -- -- 1,149 11 -- -- 34,704 (33,517)
Repayment of notes receivable from officers... -- -- -- -- -- -- -- 14,540
Stock options exercised....................... -- -- 442 4 -- -- 8,411 (9,045)
Warrants exercised............................ -- -- 16 -- -- -- 303 --
Class A Common Stock issued as consideration
for NHP common stock......................... -- -- 6,760 67 -- -- 180,784 --
Net income.................................... -- -- -- -- -- -- -- --
Dividends paid -- Class A Common Stock........ -- -- -- -- -- -- -- --
Dividends paid -- Class B Preferred Stock..... -- -- -- -- -- -- -- --
Unrealized loss on investments................ -- -- -- -- -- -- -- --
------ -------- ------ ---- ---- --- ---------- --------
BALANCE DECEMBER 31, 1997..................... 3,150 135,000 40,439 403 162 2 977,601 (35,095)
Net proceeds from issuances of Preferred
Stock........................................ 11,250 356,250 -- -- -- -- (15,353) --
Repurchase of Class A Common Stock............ -- -- (303) (3) -- -- (11,064) --
Conversion of Class B Common Stock to Class A
Common Stock................................. -- -- 162 2 (162) (2) -- --
Conversion of operating partnership units to
Class A Common Stock......................... -- -- 275 3 -- -- 5,792 --
Purchase of stock by officers and awards of
restricted stock............................. -- -- 640 7 -- -- 23,619 (23,471)
Repayment of notes receivable from officers... -- -- -- -- -- -- -- 8,908
Stock options and warrants exercised.......... -- -- 658 7 -- -- 11,008 --
Class A Common Stock issued as consideration
for Ambassador common stock.................. -- -- 6,580 66 -- -- 251,209 --
Class E Preferred Stock issued as
consideration for Insignia common stock...... 8,424 301,218 -- -- -- -- -- --
Issuance of warrants to purchase Class A
Common Stock................................. -- -- -- -- -- -- 4,150 --
Net Income.................................... -- -- -- -- -- -- -- --
Dividends paid -- Class A Common Stock........ -- -- -- -- -- -- -- --
Dividends paid -- Preferred Stock............. -- -- -- -- -- -- -- --
Unrealized gain (loss) on investments......... -- -- -- -- -- -- -- --
------ -------- ------ ---- ---- --- ---------- --------
BALANCE DECEMBER 31, 1998..................... 22,824 $792,468 48,451 $485 -- $-- $1,246,962 $(49,658)
====== ======== ====== ==== ==== === ========== ========

UNREALIZED
DISTRIBUTIONS GAIN
IN EXCESS (LOSS) ON
OF EARNINGS INVESTMENTS TOTAL
------------- ----------- ----------
<S> <C> <C> <C>
BALANCE DECEMBER 31, 1995..................... $ (6,303) $ -- $ 169,032
Net proceeds from of Class A Common Stock..... -- -- 28,136
Conversion of Class B Common Stock to Class A
Common Stock................................. -- -- --
Conversion of Operating Partnership Units to
Class A Common Stock......................... -- -- 3,799
Class A Common Stock issued as consideration
for real estate acquired..................... -- -- 15,294
Purchase of stock by officers................. -- -- 11,437
Repurchase of Class A Common Stock............ -- -- (4,255)
Stock options exercised....................... -- -- 58
Net Income.................................... 12,984 -- 12,984
Dividends paid -- Class A Common Stock........ (20,736) -- (20,736)
-------- ------- ----------
BALANCE DECEMBER 31, 1996..................... (14,055) -- 215,749
Net proceeds from issuance of Class A Common
Stock........................................ -- -- 510,114
Net proceeds from issuance of Preferred
Stock........................................ -- -- 75,000
Net proceeds from issuance of Class C
Preferred Stock.............................. -- -- 58,110
Repurchase of Class A Common Stock from
officer...................................... -- -- --
Conversion of Class B Common Stock to Class A
Common Stock................................. -- -- --
Conversion of operating partnership units to
Class A Common Stock......................... -- -- 8,621
Purchase of stock by officers................. -- -- 1,198
Repayment of notes receivable from officers... -- -- 14,540
Stock options exercised....................... -- -- (630)
Warrants exercised............................ -- -- 303
Class A Common Stock issued as consideration
for NHP common stock......................... -- -- 180,851
Net income.................................... 28,633 -- 28,633
Dividends paid -- Class A Common Stock........ (44,660) -- (44,660)
Dividends paid -- Class B Preferred Stock..... (846) -- (846)
Unrealized loss on investments................ -- (1,683) (1,683)
-------- ------- ----------
BALANCE DECEMBER 31, 1997..................... (30,928) (1,683) 1,045,300
Net proceeds from issuances of Preferred
Stock........................................ -- -- 340,897
Repurchase of Class A Common Stock............ -- -- (11,067)
Conversion of Class B Common Stock to Class A
Common Stock................................. -- -- --
Conversion of operating partnership units to
Class A Common Stock......................... -- -- 5,795
Purchase of stock by officers and awards of
restricted stock............................. -- -- 155
Repayment of notes receivable from officers... -- -- 8,908
Stock options and warrants exercised.......... -- -- 11,015
Class A Common Stock issued as consideration
for Ambassador common stock.................. -- -- 251,275
Class E Preferred Stock issued as
consideration for Insignia common stock...... -- -- 301,218
Issuance of warrants to purchase Class A
Common Stock................................. -- -- 4,150
Net Income.................................... 64,474 -- 64,474
Dividends paid -- Class A Common Stock........ (94,835) -- (94,835)
Dividends paid -- Preferred Stock............. (26,404) -- (26,404)
Unrealized gain (loss) on investments......... -- 1,683 1,683
-------- ------- ----------
BALANCE DECEMBER 31, 1998..................... $(87,693) $ -- $1,902,564
======== ======= ==========
</TABLE>

See accompanying notes to consolidated financial statements.

F-5
<PAGE> 45

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
(IN THOUSANDS)

<TABLE>
<CAPTION>
1998 1997 1996
--------- --------- --------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income................................................ $ 64,474 $ 28,633 $ 12,984
--------- --------- --------
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization........................... 101,610 43,520 21,209
Gain on disposition of properties....................... (4,674) (2,720) (44)
Minority interest in operating partnership.............. 5,182 4,064 2,689
Minority interests in other entities.................... 468 (1,008) 111
Equity in losses of unconsolidated partnerships......... 4,854 1,798 --
Equity in earnings of unconsolidated subsidiaries....... (11,570) (4,636) --
Extraordinary loss on early extinguishment of debt...... -- 269 --
Changes in operating assets and operating liabilities... (11,930) 3,112 1,857
--------- --------- --------
Total adjustments................................... 83,940 44,399 25,822
--------- --------- --------
Net cash provided by operating activities........... 148,414 73,032 38,806
--------- --------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of real estate................................... (155,456) (376,315) (26,032)
Additions to real estate.................................. (77,336) (26,719) (19,663)
Proceeds from sale of property held for sale.............. 36,468 22,095 17,147
Additions to property held for sale....................... (2,339) (247) (5,718)
Purchase of NHP common stock, notes receivable, general
limited partnership interests and other assets.......... (56,760) (199,146) (53,878)
Contributions to unconsolidated subsidiaries.............. (13,032) (59,787) --
Advances to unconsolidated partnerships................... -- (42,879) --
Purchase of/additions to notes receivable................. (81,587) (60,575) --
Proceeds from repayments of notes receivable.............. 29,290 -- --
Cash received in connection with acquisitions............. 60,777 -- --
Cash paid for merger related costs........................ (78,568) -- --
Distributions from investments in real estate
partnerships............................................ 15,673 -- --
Purchase of investments held for sale..................... (4,935) (19,881) --
Redemptions of OP Units................................... (516) -- --
Dividends received from unconsolidated subsidiaries....... -- 45,791 --
--------- --------- --------
Net cash used in investing activities............... (328,321) (717,663) (88,144)
--------- --------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from secured notes payable borrowings............ 102,115 225,436 --
Principal repayments on secured notes payable............. (93,469) (12,512) (28,463)
Proceeds from secured tax-exempt bond financing........... 210,720 -- 58,010
Principal repayments on secured tax-exempt bond
financing............................................... (224,395) (1,487) (48,703)
Proceeds from (payoff of) unsecured short-term
financing............................................... -- (12,579) 12,500
Proceeds from secured short-term financing................ 57,140 19,050 30,119
Repayments on secured short-term financing................ (34,333) -- --
Net borrowings (paydowns) on the revolving credit
facilities.............................................. (46,262) (162,008) 40,800
Payment of loan costs, including proceeds and costs from
interest rate hedges.................................... (7,407) (6,387) (3,464)
Proceeds from issuance of Class A Common Stock............ -- 510,114 28,136
Proceeds from issuances of Preferred Stock................ 340,897 133,110 --
Proceeds from exercises of employee stock options and
warrants................................................ 11,015 871 --
Proceeds from partnership preferred units in a subsidiary
and warrants to purchase Class A Common Stock........... 35,000 -- --
Proceeds from issuance of high performance units.......... 1,988 -- --
Principal repayments received on notes due from officers
on Class A Common Stock purchases....................... 8,951 25,957 --
Repurchase of common stock................................ (11,066) (4,255)
Payment of common stock dividends......................... (94,835) (44,660) (20,736)
Payment of distributions to minority interest in operating
partnership............................................. (12,651) (5,510) (3,815)
Payment of distributions to minority interest in other
entities................................................ (2,880) -- --
Payment of preferred stock dividends...................... (26,404) (846) --
--------- --------- --------
Net cash provided by financing activities........... 214,124 668,549 60,129
--------- --------- --------
NET INCREASE IN CASH AND CASH EQUIVALENTS................... 34,217 23,918 10,791
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR.............. 37,088 13,170 2,379
--------- --------- --------
CASH AND CASH EQUIVALENTS AT END OF YEAR.................... $ 71,305 $ 37,088 $ 13,170
========= ========= ========
</TABLE>

See accompanying notes to consolidated financial statements.

F-6
<PAGE> 46

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
(IN THOUSANDS, EXCEPT SHARE AND PARTNERSHIP UNIT DATA)

<TABLE>
<CAPTION>
1998 1997 1996
------- ------- -------
<S> <C> <C> <C>
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid............................................. $91,795 $51,076 $22,869
</TABLE>

NON CASH INVESTING AND FINANCING ACTIVITIES

PURCHASE OF REAL ESTATE, CASH COLLATERAL AND PROPERTY MANAGEMENT BUSINESSES

<TABLE>
<CAPTION>
1998 1997 1996
-------- -------- -------
<S> <C> <C> <C>
Secured notes payable assumed in connection with purchase of
real estate............................................... $115,151 $140,451 $31,796
Secured short-term financing assumed in connection with
purchase of real estate................................... -- 9,600 5,072
Real estate, restricted cash, cash collateral and property
management businesses contributed in exchange for
interests in AIMCO Properties, L.P. ...................... 34,756 55,906 15,279
Real estate purchased in exchange for 90,000 partnership
preferred units of AIMCO Properties, L.P.................. 9,000 -- --
Assumption of operating liabilities......................... 857 -- --
Accrual of contingent consideration......................... 4,500 -- --
Common Stock issued in consideration for purchase of real
estate.................................................... -- -- 15,294
</TABLE>

PURCHASE OF INSIGNIA FINANCIAL GROUP, INC.

In October 1998, the company acquired all the common stock of Insignia
Financial Group, Inc. in exchange for up to approximately 8.9 million shares of
Class E Cumulative Convertible Preferred Stock with a recorded value of
approximately $301.2 million (see Note 4).

The aggregate purchase price consisted of the following:

<TABLE>
<S> <C>
Real estate................................................. $ 59,593
Investment in unconsolidated real estate partnerships....... 799,177
Investment in unconsolidated subsidiaries................... 68,168
Restricted cash............................................. 1,339
Notes receivable............................................ 30,257
Other assets................................................ 66,081
Secured notes payable....................................... 29,002
Secured short-term financing................................ 331,948
Account payable, accrued and other liabilities.............. 157,061
Mandatory redeemable convertible preferred securities of a
subsidiary trust.......................................... 149,500
Minority interest in other entities......................... 112,170
Stockholders' equity........................................ 301,218
</TABLE>

F-7
<PAGE> 47

PURCHASE OF AMBASSADOR APARTMENTS, INC.

In May 1998, the Company acquired all of the common stock of Ambassador
Apartments, Inc. in exchange for approximately 6.6 million shares of Class A
Common Stock with a recorded value of $251.3 million (see Note 4).

The aggregate purchase price consisted of the following:

<TABLE>
<S> <C>
Real estate................................................. $713,596
Investment in unconsolidated real estate partnerships....... 2,290
Restricted cash............................................. 35,523
Accounts receivable......................................... 7,953
Deferred financing costs.................................... 4,359
Other assets................................................ 2,319
Secured notes payable....................................... 37,162
Secured tax-exempt bond financing........................... 334,881
Secured short-term financing................................ 31,550
Unsecured short-term financing.............................. 2,513
Account payable, accrued and other liabilities.............. 15,199
Resident security deposits and prepaid rents................ 8,898
Minority interest in other partnerships..................... 5,752
Minority interest in AIMCO Properties, L.P.................. 147
Stockholders' equity........................................ 251,274
</TABLE>

PURCHASE OF NHP AND REAL ESTATE COMPANIES

In 1997, the company acquired NHP Partners, Inc., NHP Partners Two Limited
Partners and their subsidiaries (collectively, the "NHP Real Estate Companies")
and all of the common stock of NHP Incorporated ("NHP") in exchange for
approximately 6.8 million shares of Class A Common Stock with a recorded value
of $180.9 million, $141.3 million in cash and warrants to purchase 399,999
shares of Class A Common Stock in a series of related transactions (see Notes 5
and 6).

The aggregate purchase price consisted of the following:

<TABLE>
<S> <C>
Assets purchased............................................ $638,944
Liabilities assumed......................................... 312,555
Cash paid................................................... 141,328
Stock issued................................................ 180,851
Stock options issued........................................ 4,210
</TABLE>

REDEMPTION OF OPERATING PARTNERSHIP UNITS

In 1998, 275,405 operating partnership units with a recorded value of
$5,650 were redeemed in exchange for an equal number of shares of Class A Common
Stock.

In 1997, 565,101 operating partnership units with a recorded value of
$8,621 were redeemed in exchange for an equal number of shares of Class A Common
Stock.

In 1996, 211,392 operating partnership units with a recorded value of
$3,799 were redeemed in exchange for an equal number of shares of Class A Common
Stock.

RECEIPT OF NOTES PAYABLE FROM OFFICERS

In 1998, the company issued notes receivable from officers for a total of
$23.5 million in connection with their purchase of approximately 600,000 shares
of Class A Common Stock.

F-8
<PAGE> 48

In 1997, the company received promissory notes from officers for a total of
$42.6 million in connection with the sale of approximately 1.5 million shares of
Class A Common Stock.

CONVERSION OF CLASS B COMMON STOCK

In 1998, 162,500 shares of Class B Common Stock were converted to Class A
Common Stock upon achievement of the 1998 target results for a total recorded
value of $2. As a result, all previously issued and outstanding shares of Class
B Common Stock have now been converted to Class A Common Stock.

In 1997, 162,500 shares of Class B Common Stock were converted to Class A
Common Stock upon achievement of the 1997 target results for a total recorded
value of $2.

In 1996, 260,000 shares of Class B Common Stock were converted to Class A
Common Stock upon achievement of the 1995 and 1996 target results (130,000
shares respectively for each year) for a total recorded value of $3.

OTHER

In 1998, the company's operating partnership issued an additional 194,208
partnership units with a recorded value of $4,045 in connection with the
purchase of certain partnership interests.

In 1997, the company's operating partnership issued an additional 216,564
partnership units with a recorded value of $7,469 in connection with the
purchase of certain partnership interests.

In 1998, the company obtained control of real estate partnerships which
became consolidated. The non-cash effects are as follows:

<TABLE>
<S> <C>
Real estate................................................. $22,089
Investments in and notes receivable from unconsolidated real
estate partnerships....................................... 16,683
Secured notes payable....................................... 4,679
Accounts payable, accrued and other liabilities............. 727
</TABLE>

During the year ended December 31, 1998, the company contributed certain
assets and liabilities to unconsolidated subsidiaries and unconsolidated
partnerships as follows:

<TABLE>
<S> <C>
Investment in unconsolidated subsidiaries................... $38,579
Investment in unconsolidated partnerships................... 3,361
Restricted cash............................................. 552
Accounts receivable......................................... 13,972
Other assets................................................ 14,440
Accounts payable, accrued and other liabilities............. 62,011
</TABLE>

F-9
<PAGE> 49

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1998, 1997, AND 1996

NOTE 1 ORGANIZATION

Apartment Investment and Management Company ("AIMCO" or the "Company"), a
Maryland corporation formed on January 10, 1994, is a self-administered and
self-managed REIT engaged in the ownership, acquisition, development, expansion
and management of multi-family apartment properties. As of December 31, 1998,
the Company owned or managed 379,363 apartment units in 2,147 properties located
in 49 states, the District of Columbia and Puerto Rico. On July 24, 1994, AIMCO
completed its initial public offering and engaged in a business combination and
consummated a series of related transactions which enabled it to continue and
expand the property management and related businesses of Property Asset
Management, L.L.C., Limited Liability Company, and its affiliated companies, and
PDI Realty Enterprises, Inc. (collectively, the "AIMCO Predecessors"). Based on
apartment unit data compiled by the National Multi-Housing Council, we believe
that, as of December 31, 1998, AIMCO was the largest owner and manager of
multi-family apartment properties in the United States. As of December 31, 1998,
AIMCO:

- owned or controlled 63,086 units in 242 apartment properties;

- held an equity interest in 170,243 units in 902 apartment properties; and

- managed 146,034 units in 1,003 apartment properties for third party
owners and affiliates.

AIMCO conducts substantially all of its operations through its operating
partnership, AIMCO Properties, L.P. (the "AIMCO operating partnership"). Through
wholly owned subsidiaries, AIMCO acts as the sole general partner of the AIMCO
operating partnership. As of December 31, 1998, AIMCO owned approximately an 83%
interest in the AIMCO operating partnership. AIMCO manages apartment properties
for third parties and affiliates through unconsolidated subsidiaries referred to
as the "management companies".

At December 31, 1998, AIMCO had 48,451,388 shares of Class A Common Stock
outstanding and the AIMCO operating partnership had 9,763,488 common units
outstanding, for a combined total of 58,214,876 shares and units.

NOTE 2 BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of
AIMCO, the AIMCO operating partnership, majority owned subsidiaries and
controlled real estate limited partnerships. Interests held by limited partners
in real estate partnerships controlled by the Company and interests held by the
minority shareholders of Insignia Properties Trust are reflected as Minority
Interests in Other Entities. All significant intercompany balances and
transactions have been eliminated in consolidation.

Interests in the AIMCO operating partnership held by limited partners other
than AIMCO are referred to as "OP Units". The AIMCO operating partnership's
income is allocated to holders of OP Units based on the weighted average number
of OP Units outstanding during the period. The AIMCO operating partnership
records the issuance of OP Units and the assets acquired in purchase
transactions based on the market price of the Company's Class A Common Stock at
the date of execution of the purchase contract. The holders of the OP Units
receive distributions, prorated from the date of admittance, in an amount
equivalent to the dividends paid to holders of Class A Common Stock. During
1998, 1997 and 1996, the weighted average ownership interest in the AIMCO
operating partnership held by the OP Unit holders was 12.4%, 13.2% and 17.1%,
respectively.

F-10
<PAGE> 50
APARTMENT INVESTMENT AND MANAGEMENT COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

After holding the OP Units for one year, the limited partners generally
have the right to redeem their OP Units for cash. Notwithstanding that right,
the AIMCO operating partnership may elect to acquire some or all of the OP Units
tendered for redemption in exchange for shares of Class A Common Stock in lieu
of cash.

Investments in and Notes Receivable from Unconsolidated Subsidiaries

The Company has investments in numerous subsidiaries. Investments in
entities in which the Company does not have control are accounted for under the
equity method. Under the equity method, the Company's pro-rata share of the
earnings or losses of the entity for the periods being presented is included in
earnings (losses) from unconsolidated subsidiaries (see Note 5).

Investments in and Notes Receivable from Unconsolidated Real Estate
Partnerships

The Company owns general and limited partnership interests in numerous
partnerships that own multi-family apartment properties. Investments in real
estate partnerships in which the Company does not have control, are accounted
for under the equity method. Under the equity method, the Company's pro-rata
share of the earnings or losses of the entity for the periods being presented is
included in earnings (losses) from unconsolidated partnerships (see Note 6).

Real Estate and Depreciation

Real estate is recorded at cost, less accumulated depreciation, unless
considered impaired. If events or circumstances indicate that the carrying
amount of a property may be impaired, the Company will make an assessment of its
recoverability by estimating the future undiscounted cash flows, excluding
interest charges, of the property. If the carrying amount exceeds the aggregate
future cash flows, the Company would recognize an impairment loss to the extent
the carrying amount exceeds the fair value of the property. As of December 31,
1998, management believes that no impairments exist based on periodic reviews.
No impairment losses were recognized for the years ended December 31, 1998, 1997
and 1996.

Expenditures in excess of $250 that maintain an existing asset which has a
useful life of more than one year are capitalized as capital replacement
expenditures and depreciated over the estimated useful life of the asset.

Depreciation is calculated on the straight-line method based on a fifteen
to thirty year life for buildings and improvements and five years for furniture,
fixtures and equipment.

Initial Capital Expenditures ("ICE") are those costs considered necessary
by the Company in its investment decision to correct deferred maintenance or
improve a property. Capital enhancements are costs incurred that add a material
new feature or increase the revenue potential of a property. ICE and capital
enhancement costs are capitalized and depreciated over the estimated useful
lives of the related assets.

Direct costs associated with the acquisition of ownership or control of
properties are capitalized as a cost of the assets acquired, and are depreciated
over the estimated useful lives of the related assets. Expenditures for ordinary
repairs, maintenance and apartment turnover costs are expensed as incurred.

Redevelopment

The Company capitalizes direct and indirect costs (including interest,
taxes and other costs) in connection with the redevelopment of its owned or
controlled properties and land under development. Interest of $2.8 million, $1.3
million and $0.8 million was capitalized for the years ended December 31, 1998,
1997 and 1996, respectively.

F-11
<PAGE> 51
APARTMENT INVESTMENT AND MANAGEMENT COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Property Held For Sale

Property held for sale is recorded at the lower of carrying amount or fair
value less costs to sell. Upon management's determination that a property is to
be sold, the Company ceases depreciation of the property's assets.

Cash Equivalents

The Company considers highly liquid investments with an original maturity
of three months or less to be cash equivalents.

Restricted Cash

Restricted cash includes capital replacement reserves, completion repair
reserves, bond sinking fund amounts and tax and insurance impound accounts held
by lenders.

Goodwill

The Company records goodwill in connection with purchase business
combinations where the aggregate purchase price exceeds the fair value of the
assets acquired. Goodwill is amortized on a straight-line basis over a period of
20 years, which represents its estimated useful life. The carrying amount of
goodwill is reviewed if facts and circumstances suggest that it may be impaired.
Management believes that goodwill is not impaired at December 31, 1998.

Other Assets

Fees and costs incurred in obtaining financing are capitalized and are
included in other assets. Such costs are amortized over the terms of the related
loan agreements and are charged to interest expense.

Certain intangible assets are included in other assets and consist of costs
associated with the purchase of property management businesses, including
property management contracts, legal and other acquisition costs. These costs
are amortized on a straight-line basis over terms ranging from five to twenty
years.

Revenue Recognition

The Company's properties have operating leases with apartment residents
with terms generally of six months or less. Rental revenues and property
management and asset management fees are recognized when earned.

The Company recognizes interest income on notes receivable as earned, in
accordance with the terms of the notes. Interest income is not recorded on
individual notes receivable if management believes the interest is not
collectible.

Income Taxes

AIMCO has elected to be taxed as a real estate investment trust ("REIT") as
defined under the Internal Revenue Code of 1986, as amended. In order for AIMCO
to qualify as a REIT, at least 95% of AIMCO's gross income in any year must be
derived from qualifying sources. The activities of unconsolidated subsidiaries
engaged in the service company business are not qualifying sources.

As a REIT, AIMCO generally will not be subject to U.S. Federal income taxes
at the corporate level if it distributes at least 95% of its REIT taxable income
to its stockholders. REITs are also subject to a number of other organizational
and operational requirements. If AIMCO fails to qualify as a REIT in any taxable
year, its taxable income will be subject to U.S. Federal income tax at regular
corporate rates (including any

F-12
<PAGE> 52
APARTMENT INVESTMENT AND MANAGEMENT COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

applicable alternative minimum tax). Even if AIMCO qualifies as a REIT, it may
be subject to certain state and local income taxes and to U.S. Federal income
and excise taxes on its undistributed income.

For income tax purposes, distributions paid to stockholders consist of
ordinary income, capital gains, return of capital or a combination thereof.
Earnings and profits, which determine the taxability of dividends to
stockholders, differ from net income reported for financial reporting purposes
due to differences for U.S. Federal tax purposes in the estimated useful lives
used to compute depreciation and the carrying value (basis) of the investments
in properties.

For the years ended December 31, 1998, 1997 and 1996, distributions paid
per share were taxable as follows:

<TABLE>
<CAPTION>
1998 1997 1996
-------------------- -------------------- --------------------
AMOUNT PERCENTAGE AMOUNT PERCENTAGE AMOUNT PERCENTAGE
------ ---------- ------ ---------- ------ ----------
<S> <C> <C> <C> <C> <C> <C>
Ordinary income................ $0.90 40% $1.74 94% $1.45 85%
Return of capital.............. 1.33 59% -- -- 0.25 15%
Capital Gains.................. -- -- 0.04 2% -- --
Unrecaptured SEC.1250 Gain..... 0.02 1% 0.07 4% -- --
----- --- ----- --- ----- ---
$2.25 100% $1.85 100% $1.70 100%
===== === ===== === ===== ===
</TABLE>

Earnings Per Share

Earnings per share is calculated based on the weighted average number of
shares of common stock, common stock equivalents and dilutive convertible
securities outstanding during the period (see Note 17).

Fair Value of Financial Instruments

The estimated aggregate fair value of the Company's cash and cash
equivalents, receivables, payables and short-term secured and unsecured debt as
of December 31, 1998 is assumed to approximate their carrying value due to their
relatively short terms. Management further believes that, after consideration of
interest rate agreements, the fair market value of the Company's secured
tax-exempt bond debt and secured long-term debt approximate their carrying
value, based on market comparisons to similar types of debt instruments having
similar maturities.

In valuing its investments in securities at their quoted market price, the
Company has recognized unrealized losses on investments of $1.7 million as of
December 31, 1997, which are included as a component of stockholders' equity.
Due to a reorganization, Property Asset Management Services, Inc. ("PAMS,
Inc."), a subsidiary of the Company, is no longer consolidated. All unrealized
losses on investments in 1997 were related to PAMS, Inc. As PAMS, Inc. is not
consolidated at December 31, 1998, there are no unrealized losses on
investments.

Interest Rate Lock and Interest Rate Swap Agreements

Interest rate lock agreements related to planned refinancings of identified
variable rate indebtedness are accounted for as anticipatory hedges. Upon the
refinancing of such indebtedness, any gain or loss associated with the
termination of the interest rate lock agreement is deferred and recognized over
the life of the refinanced indebtedness.

Reclassifications

Certain items included in the 1997 and 1996 consolidated financial
statements have been reclassified to conform with the 1998 presentation.

F-13
<PAGE> 53
APARTMENT INVESTMENT AND MANAGEMENT COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Use of Estimates

The preparation of the Company's consolidated financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts included in the
financial statements and accompanying notes thereto. Actual results could differ
from those estimates.

NOTE 3 REAL ESTATE

Real estate at December 31, 1998 and 1997, is as follows (in thousands):

<TABLE>
<CAPTION>
1998 1997
---------- ----------
<S> <C> <C>
Land........................................................ $ 413,577 $ 265,570
Buildings and improvements.................................. 2,389,021 1,391,637
---------- ----------
2,802,598 1,657,207
Accumulated depreciation.................................... (228,880) (153,285)
---------- ----------
$2,573,718 $1,503,922
========== ==========
</TABLE>

During the years ended December 31, 1998 and 1997, the Company purchased or
acquired control of 82 properties (22,459 units) and 59 properties (17,191
units), respectively, and disposed of five properties (1,468 units) and five
properties (916 units), respectively, as described below.

The Company directly acquired 30 apartment communities in unrelated
transactions during 1998 (not including those acquired in connection with the
mergers with Ambassador Apartments, Inc. and Insignia Financial Group, Inc. (see
Note 4)). The aggregate consideration paid by the Company of $316.5 million
consisted of $96.0 million in cash, 1.2 million OP Units with a total recorded
value of $48.2 million, and the assumption of $172.3 million of secured
long-term indebtedness.

In 1997, as a result of the acquisition of the NHP Real Estate Companies
and related tender offers to limited partners, the Company acquired a
controlling interest in 15 partnerships, which own 5,285 units located in 15
apartment communities. The portion of the aggregate purchase price for the NHP
Real Estate Companies allocated to these 15 partnerships was approximately
$269.3 million, including the assumption of approximately $212.3 million of
mortgage indebtedness.

In October 1997, the Company acquired a portfolio of 35 residential
apartment properties. The aggregate purchase price of $263.0 million, including
transaction costs, was comprised of $115.6 million in cash, the assumption of
$8.3 million in mortgage indebtedness and the incurrence of $139.1 million of
new indebtedness secured by the properties. The Company has also budgeted an
additional $16.0 million in initial capital expenditures related to these
properties.

During 1998, the Company sold five apartment properties containing 1,468
units to unaffiliated third parties. Cash proceeds from the sales of
approximately $40.1 million were used to repay a portion of the Company's
outstanding indebtedness. The Company recognized a gain of approximately $4.7
million on the disposition of these five properties.

During 1997, the Company sold five apartment properties containing 916
units to unaffiliated third parties. Cash proceeds from the sales of
approximately $22.7 million were used to repay a portion of the Company's
outstanding indebtedness. The Company recognized a gain of approximately $2.8
million on the disposition of these five properties.

F-14
<PAGE> 54
APARTMENT INVESTMENT AND MANAGEMENT COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 4 MERGERS

Ambassador Merger

On May 8, 1998, Ambassador was merged with and into AIMCO, with AIMCO being
the surviving corporation. The merger was accounted for as a purchase. The
purchase price of $713.6 million was comprised of $90.3 million in cash, $372.0
million of assumed debt and approximately 6.6 million shares of Class A Common
Stock valued at $251.3 million. Pursuant to the Ambassador merger agreement,
each outstanding share of Ambassador common stock not owned by AIMCO was
converted into the right to receive 0.553 shares of Class A Common Stock.
Concurrently, all outstanding options to purchase Ambassador common stock were
converted into cash or options to purchase Class A Common Stock, at the same
conversion ratio. Contemporaneously with the consummation of the Ambassador
merger, a subsidiary of the AIMCO operating partnership merged with Ambassador's
operating partnership and each outstanding unit of limited partnership interest
in the Ambassador operating partnership was converted into the right to receive
0.553 OP Units. Prior to its acquisition by AIMCO, Ambassador was a
self-administered and self-managed real estate investment trust engaged in the
ownership and management of garden-style apartment properties leased primarily
to middle income tenants. Ambassador owned 52 apartment communities with a total
of 15,728 units located in Arizona, Colorado, Florida, Georgia, Illinois,
Tennessee and Texas, and managed one property containing 252 units for an
unrelated third party.

Insignia Merger

On October 1, 1998, Insignia Financial Group, Inc., a Delaware corporation,
was merged with and into AIMCO with AIMCO being the surviving corporation. The
merger was accounted for as a purchase. The purchase price of $1,125.7 million
was comprised of the issuance of up to approximately 8.9 million shares of Class
E Cumulative Convertible Preferred Stock (the "Class E Preferred Stock") valued
at $301.2 million, $670.1 million in assumed debt and liabilities (including the
$50 million special dividend, assumed liabilities of Insignia Properties Trust
and transaction costs), $149.5 million in assumed mandatory redeemable
convertible preferred securities, and $4.9 million in cash. The Class E
Preferred Stock entitled the holders thereof to receive the same cash dividends
per share as holders of Class A Common Stock. On January 15, 1999, holders of
Class E Preferred Stock received a special dividend in an aggregate amount of
approximately $50 million, and all outstanding shares of Class E Preferred Stock
automatically converted into an equal number of shares of Class A Common Stock.

As a result of the Insignia merger, AIMCO acquired: (i) Insignia's
interests in Insignia Properties Trust, ("IPT"), a Maryland REIT, which was a
majority owned subsidiary of Insignia; (ii) Insignia's interest in Insignia
Properties, L.P. ("IPLP"), IPT's operating partnership; (iii) 100% of the
ownership of the Insignia entities that provide multifamily property management
and partnership administrative services; (iv) Insignia's interest in
multi-family coinvestments; (v) Insignia's ownership of subsidiaries that
control multi-family properties not included in IPT; (vi) Insignia's limited
partner interests in public and private syndicated real estate limited
partnerships; and (vii) assets incidental to the foregoing businesses
(collectively, the "Insignia Multi-family Business"). Insignia owned or managed
in excess of 170,000 apartment units.

IPT Merger

As a result of the Insignia merger, AIMCO acquired approximately 51% of the
outstanding shares of beneficial interest of IPT. On February 26, 1999, IPT was
merged into AIMCO (see Note 24).

NOTE 5 INVESTMENTS IN AND NOTES RECEIVABLE FROM UNCONSOLIDATED SUBSIDIARIES

In order to satisfy certain requirements of the Internal Revenue Code
applicable to AIMCO's status as a REIT, certain assets of the Company are held
through corporations in which the AIMCO operating

F-15
<PAGE> 55
APARTMENT INVESTMENT AND MANAGEMENT COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

partnership holds non-voting preferred stock that represents a 95% economic
interest, and certain officers and/or directors of AIMCO hold, directly or
indirectly, all of the voting common stock, representing a 5% economic interest.
As a result of the controlling ownership interest in the unconsolidated
subsidiaries held by others, AIMCO accounts for its interest in the
unconsolidated subsidiaries using the equity method. As of December 31, 1998,
the unconsolidated subsidiaries included AIMCO/NHP Holdings, Inc. ("ANHI"),
AIMCO/NHP Properties, Inc. ("ANPI"), NHP Management Company ("NHPMC"), and NHP
A&R Services, Inc. ("NHPA&R").

In May and September of 1997, the Company acquired an aggregate of
approximately 6.9 million shares of common stock ("NHP Common Stock") of NHP. On
December 8, 1997, the Company acquired the remaining shares of NHP Common Stock
in a merger transaction accounted for as a purchase (the "NHP Merger"). Pursuant
to the NHP Merger, each outstanding share of NHP Common Stock was converted into
either (i) 0.74766 shares of Class A Common Stock or (ii) at the stockholder's
option, 0.37383 shares of Class A Common Stock and $10.00 in cash. As a result
of the NHP Merger, AIMCO issued approximately 6.8 million shares of Class A
Common Stock, valued at $180.8 million, and paid $86.5 million in cash. The
total cost of the purchase was $349.5 million.

In connection with the purchase of NHP and Insignia, the Company acquired
NHP's and Insignia's property management businesses, as well as several other
businesses, including a membership purchasing organization, home health care
services, and insurance services. Immediately following both the NHP merger and
the Insignia merger, AIMCO completed reorganizations which resulted in those
businesses being conducted by unconsolidated subsidiaries.

As of December 31, 1998 and 1997, AIMCO's investment in and notes
receivable from unconsolidated subsidiaries totaled $198.4 million and $84.5
million, respectively, which consisted of $114.0 million and $50.0 million,
respectively, in notes receivable, advances of $20.4 million in 1998, and $64.0
million and $34.5 million, respectively, in preferred stock of the
unconsolidated subsidiaries.

The following table provides selected combined financial information for
the Company's unconsolidated subsidiaries as of and for the years ended December
31, 1998 and 1997 (in thousands):

<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
Management contracts........................................ $122,291 $ 51,441
Goodwill.................................................... 42,889 45,494
Total assets................................................ 236,976 119,936
Total liabilities........................................... 169,560 83,663
Stockholders' equity........................................ 67,416 36,273
Total liabilities and stockholders' equity.................. 236,976 119,936
Service company revenues.................................... 99,845 23,776
Service company expenses.................................... (70,771) (11,733)
Interest expense............................................ (7,699) (2,902)
Net income before discontinued operations................... 12,177 3,430
Net income.................................................. 12,177 3,636
</TABLE>

NOTE 6 INVESTMENT IN AND NOTES RECEIVABLE FROM UNCONSOLIDATED REAL ESTATE
PARTNERSHIPS

In connection with the purchase of the NHP Real Estate Companies, the
Company acquired general and limited partnership interests in partnerships that
own in excess of 82,000 conventional and affordable apartment units in 519
apartment properties. The Company's ownership interests in these partnerships
ranges from 1% to 100%, and the provisions of the partnership agreements give
the Company varying degrees of control.

F-16
<PAGE> 56
APARTMENT INVESTMENT AND MANAGEMENT COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Subsequent to the acquisition of the NHP Real Estate Companies, AIMCO
contributed interests in certain of the limited partnerships which it controlled
to AIMCO/NHP Partners, L.P. ("ANPLP"), a partnership in which the Company owns a
99% limited partnership interest. A limited liability company owned by certain
officers of the Company is the 1% general partner of ANPLP. Based on the
provisions of the partnership agreement for ANPLP, the Company does not possess
control of the partnership.

In connection with the Insignia merger, and through IPT, Insignia's
controlled subsidiary, the Company acquired general and limited partnership
interests in partnerships that are unconsolidated (see Note 4). The Company's
ownership interests in these unconsolidated partnerships ranges from 1% to 47%.
Based on the provisions of the partnership agreements, the Company does not
possess control of these partnerships.

During 1998 and 1997, the Company has made separate offers to the limited
partners of approximately 300 partnerships to acquire their limited partnership
interests. The Company paid approximately $84.5 million and $59 million during
1998 and 1997, respectively, in connection with such tender offers.

At December 31, 1998 and 1997, AIMCO's investment in and notes receivable
from unconsolidated real estate partnerships totaled $1,036.5 million and $212.1
million, respectively.

The following table provides selected combined financial information for
the Company's unconsolidated partnerships as of and for the years ended December
31, 1998 and 1997 (in thousands):

<TABLE>
<CAPTION>
1998 1997
---------- ----------
<S> <C> <C>
Real estate, net of accumulated depreciation................ $3,705,342 $2,252,702
Total assets................................................ 4,221,817 2,707,328
Secured notes payable....................................... 3,234,310 2,951,989
Partners' capital (deficit)................................. 673,958 (805,776)
Total liabilities and partners' capital (deficit)........... 4,221,817 2,707,328
Rental and other property revenues.......................... 873,531 501,384
Property operating expenses................................. (524,010) (303,547)
Depreciation expense........................................ (151,569) (63,384)
Interest expense............................................ (220,134) (154,027)
Net loss before gain on disposition of properties........... (12,468) (11,019)
Net income (loss)........................................... (12,468) 7,900
</TABLE>

NOTE 7 SECURED NOTES PAYABLE

The following table summarizes the Company's secured notes payable at
December 31, 1998 and 1997, all of which are non-recourse to the Company (in
thousands):

<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
Fixed rate, ranging from 5.99% to 8.75%, fully-amortizing
notes maturing at various dates through 2032.............. $659,953 $561,056
Fixed rate, ranging from 6.96% to 10.63%, non-amortizing
notes maturing at various dates through 2027.............. 178,258 106,424
Floating rate, ranging from 5.0% to 7.1% at December 31,
1998, non-amortizing notes maturing at various dates
through 2025.............................................. 5,580 13,941
-------- --------
$843,791 $681,421
======== ========
</TABLE>

F-17
<PAGE> 57
APARTMENT INVESTMENT AND MANAGEMENT COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

As of December 31, 1998, the scheduled principal payments for the Company's
secured notes payable are as follows (in thousands):

<TABLE>
<S> <C>
1999........................................................ $ 27,020
2000........................................................ 40,702
2001........................................................ 34,939
2002........................................................ 100,435
2003........................................................ 47,851
Thereafter.................................................. 592,844
--------
$843,791
========
</TABLE>

NOTE 8 SECURED TAX-EXEMPT BOND FINANCING

In December 1998, the Company completed the refinancing of $222 million in
variable rate tax-exempt debt assumed in conjunction with the May 1998 merger
with Ambassador Apartments, Inc. The debt was secured by 27 properties located
in Texas, Arizona, Tennessee and Illinois. Through the refinancing, the Company
converted the previous tax-exempt debt to $204 million in fixed rate, fully
amortizing tax-exempt debt secured by 26 properties. The new debt has a weighted
average interest rate of 5.8% and matures in 23 years. The Company also incurred
$7.1 million of taxable debt secured by three of the properties, repaid $11.4
million of the previous tax-exempt debt, released $21.5 million in cash reserves
and impound accounts held by the prior mortgagors, and released two properties
that served as additional collateral for the previous debt.

The following table summarizes the Company's secured tax-exempt bond
financing at December 31, 1998 and 1997, all of which is non-recourse to the
Company (in thousands):

<TABLE>
<CAPTION>
1998 1997
-------- -------
<S> <C> <C>
7.0% fully-amortizing bonds, due July 2016.................. $ 45,237 $46,498
6.9% fully-amortizing bonds, due July 2016.................. 9,267 9,529
Fixed rate fully-amortizing bonds, ranging from 5.1% to
5.8%, due December 2021................................... 159,555 --
Fixed rate fully-amortizing bonds, ranging from 6.5% to
7.3%, due at various dates through 2028................... 78,926 --
Fixed rate non-amortizing bonds, ranging from 5.0% to 6.8%,
due at various dates through 2017......................... 55,747 --
4.2% interest-only bonds, due July 2016..................... -- 5,958
6.0% interest-only bonds, secured by a letter of credit in
the amount of $5,350, due September 1998.................. -- 5,325
5.4% interest-only bonds, due December 2002................. -- 6,700
4.0% interest-only bonds, due December 2020................. 4,525 --
Variable rate bonds, ranging from 4.9% to 5.3%, due December
2021...................................................... 45,345 --
-------- -------
Total............................................. $398,602 $74,010
======== =======
</TABLE>

F-18
<PAGE> 58
APARTMENT INVESTMENT AND MANAGEMENT COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

As of December 31, 1998, the scheduled principal payments for the Company's
secured tax-exempt bonds are as follows (in thousands):

<TABLE>
<S> <C>
1999........................................................ $ 14,408
2000........................................................ 11,978
2001........................................................ 7,702
2002........................................................ 8,132
2003........................................................ 8,610
Thereafter.................................................. 347,772
--------
$398,602
========
</TABLE>

NOTE 9 UNSECURED SHORT-TERM FINANCING

In January 1998, the Company entered into a new $50 million unsecured
credit agreement with Bank of America National Trust and Savings Association and
Bank Boston, N.A. The AIMCO operating partnership is the borrower under the
credit agreement, but all obligations thereunder are guaranteed by AIMCO and
certain of its subsidiaries. In October 1998, the Company amended and restated
the credit agreement. The agreement now provides for a revolving credit facility
of up to $100 million, including a swing line of up to $30 million. The credit
facility matures on September 30, 1999, unless extended, at the discretion of
the lenders. The credit agreement provides for the conversion of the revolving
facility into a three-year term loan. Under the credit agreement, as amended in
January 1999, loans bear interest at LIBOR or Bank of America's reference rate,
at the election of the Company, plus an applicable margin. The margins range
from 2.25% to 2.75% for a LIBOR rate borrowing and 0.75% to 1.25% for a base
rate borrowing, both dependant upon the total balance outstanding relative to
the calculated borrowing base value. The balance outstanding under the credit
facility was $84.3 million as of December 31, 1998.

F-19
<PAGE> 59
APARTMENT INVESTMENT AND MANAGEMENT COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following table summarizes the Company's unsecured short-term financing
at December 31, 1998 (in thousands):

<TABLE>
<CAPTION>
1998
--------
<S> <C>
Floating rate credit facility, interest at 7.30% at December
31, 1998, expiring September 1999......................... $ 84,300
Floating rate interim term loan, interest at 7.30% at
December 31, 1998, expiring September 1999................ 196,000
Floating rate credit facility, interest at 7.91% at December
31, 1998, expiring December 2000.......................... 30,000
--------
Total............................................. $310,300
========
</TABLE>

At December 31, 1998, the total unused commitments under the Company's
unsecured short-term financing arrangements were $35.7 million.

At March 11, 1999, $144.8 million remained outstanding on the Company's
unsecured short-term financing and unused commitments aggregated $29 million.

NOTE 10 SECURED SHORT-TERM FINANCING

The Company utilizes a variety of secured short-term financing instruments
to manage its working capital needs and to finance real estate investments. In
February 1998, the AIMCO operating partnership entered into a five year $50
million secured credit facility agreement with Washington Mortgage Financial
Group, Ltd. AIMCO and certain subsidiaries guaranteed loans under the agreement
and the guarantees were secured by assets including four apartment properties
and two mortgage notes. Under the agreement, advances to the AIMCO operating
partnership were funded with the proceeds from the sale to investors of
mortgage-backed securities issued by Fannie Mae and secured by the advance and
an interest in the collateral. The interest rate on each advance was determined
by investor bids for such mortgage-backed securities, plus a margin. In February
1999, the Company terminated the credit facility agreement (see Note 24).

In December 1998, the Company acquired Calhoun Beach Club Apartments for
$77.1 million, of which $53.5 million was financed with short-term indebtedness.
The debt incurred was in the form of a short-term bridge loan bearing interest
at 8.63% and maturing in April 1999. The Company intends to replace the short-
term debt with a fixed rate, fully amortizing note in 1999.

In January 1998, the Company replaced its secured credit facility with Bank
of America National Trust and Savings Association with a new unsecured revolving
credit facility (see Note 9).

F-20
<PAGE> 60
APARTMENT INVESTMENT AND MANAGEMENT COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following table summarizes the Company's secured short-term financing
at December 31, 1998 and 1997 (in thousands):

<TABLE>
<CAPTION>
1998 1997
-------- -------
<S> <C> <C>
Floating rate credit facility, interest at 5.70% at December
31, 1998, expiring February 2003.......................... $ 50,000 $ --
Floating rate interest-only notes, having a stated interest
rate of 8.63% at December 31, 1998, due April 1999........ 53,500 --
Floating rate interest-only notes, having a stated interest
rate of 7.62% at December 31, 1998, due March 1999........ 4,522 --
Floating rate credit facility, interest at 7.33% at December
31, 1997, replaced in January 1998........................ -- 33,500
Floating rate interest-only note, repaid February 1998...... -- 19,050
Other....................................................... -- 549
-------- -------
$108,022 $53,099
======== =======
</TABLE>

NOTE 11 COMMITMENTS AND CONTINGENCIES

Legal

The Company is a party to various legal actions resulting from its
operating activities. These actions are routine litigation and administrative
proceedings arising in the ordinary course of business, some of which are
covered by liability insurance, and none of which are expected to have a
material adverse effect on the consolidated financial condition or results of
operations of the Company.

HUD Approval and Enforcement

A significant number of affordable units included as assets of AIMCO
properties are subject to regulation by the U.S. Department of Housing and Urban
Development ("HUD"). Under its regulations, HUD reserves the right to approve
the owner and the manager of HUD-insured and HUD-assisted properties, as well as
their "principals" (e.g., general partners, stockholders with a 10% or greater
interest, officers and directors) in connection with the acquisition of a
property, participation in HUD programs or the award of a management contract.
This approval process is commonly referred to as "2530 Clearance." HUD monitors
the performance of properties with HUD-insured mortgage loans. HUD also monitors
compliance with applicable regulations, and takes performance and compliance
into account in approving the acquisition of management of HUD-assisted
properties. In the event of instances of unsatisfactory performance or
regulatory violations, the HUD office with jurisdiction over the applicable
property has the authority to enter a "flag" into the computerized 2530
Clearance system. If one or more flags have been entered, a decision whether to
grant 2530 Clearance is then subject to review by HUD's Multi-family
Participation Review Committee in Washington, D.C. (the "2530 Committee"). As a
result of certain mortgage defaults and unsatisfactory ratings received by NHP
in years prior to its acquisition in December 1997 by AIMCO, HUD believes that
the 2530 Committee must review any application for 2530 Clearance filed by
AIMCO. On December 18, 1998, AIMCO received

F-21
<PAGE> 61
APARTMENT INVESTMENT AND MANAGEMENT COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

approval of approximately fifty 2530 applications and had no unresolved flags in
the 2530 system as of December 31, 1998.

In October 1997, NHP received a subpoena from the HUD Inspector General,
which requested documents relating to any arrangement whereby NHP or any of its
affiliates provides or has provided compensation to owners of HUD multi-family
projects in exchange for or in connection with property management of a HUD
project. AIMCO believes that other owners and managers of HUD projects have
received similar subpoenas. Documents provided by AIMCO to the HUD Inspector
General relating to certain NHP acquisitions of property management rights for
HUD projects may be responsive to the subpoena. AIMCO believes that its
operations are in compliance, in all material respects, with all laws, rules and
regulations relating to HUD-assisted or HUD-insured properties. Effective
February 13, 1998, counsel for AIMCO and the U.S. Attorney for the Northern
District of California entered into a Tolling Agreement related to certain civil
claims the government may have against AIMCO. Although no action has been
initiated against AIMCO or, to AIMCO's knowledge, any owner of a HUD property
managed by AIMCO, if any such action is taken in the future, it could ultimately
affect existing arrangements with respect to HUD projects, affect AIMCO's
ability to receive 2530 Clearances or otherwise have a material adverse effect
on AIMCO's results of operations. HUD also has the authority to suspend or deny
property owners and managers from participation in HUD programs with respect to
additional assistance within a geographic region through imposition of a Limited
Denial of Participation by any HUD office or nationwide for violations of HUD
regulatory requirements.

AIMCO believes that the 2530 Committee will continue to apply the 2530
Clearance process to large management portfolios such as AIMCO's with discretion
and flexibility. While there can be no assurance, AIMCO believes that the
unsatisfactory reviews and the mortgage defaults will not have a material impact
on its results of operations or financial condition. If HUD were to disapprove
AIMCO as property manager for one or more affordable properties, AIMCO's ability
to obtain property management revenues from new affordable properties would be
impaired.

Environmental

Various Federal, state and local laws subject property owners or operators
to liability for the costs of removal or remediation of certain hazardous
substances present on a property. Such laws often impose liability without
regard to whether the owner or operator knew of, or was responsible for, the
release of the hazardous substances. The presence of, or the failure to properly
remediate, hazardous substances may adversely affect occupancy at contaminated
apartment communities and our ability to sell or borrow against contaminated
properties. In addition to the costs associated with investigation and
remediation actions brought by governmental agencies, the presence of hazardous
wastes on a property could result in personal injury or similar claims by
private plaintiffs. Various laws also impose liability for the cost of removal
or remediation of hazardous substances at the disposal or treatment facility.
Anyone who arranges for the disposal or treatment of hazardous or toxic
substances is potentially liable under such laws. These laws often impose
liability whether or not the person arranging for the disposal ever owned or
operated the disposal facility. In connection with the ownership, operation and
management of our properties, we could potentially be liable for environmental
liabilities or costs associated with our properties or properties we may acquire
or manage in the future.

Operating Leases

The Company is obligated under office space and equipment under
noncancelable operating leases. In addition, the Company subleases certain of
its office space to tenants under noncancelable subleases. Approximate minimum
annual rentals under operating leases and approximate minimum payments to be

F-22
<PAGE> 62
APARTMENT INVESTMENT AND MANAGEMENT COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

received under annual subleases for the five years ending after December 31,
1998 are as follows (in thousands):

<TABLE>
<CAPTION>
OPERATING LEASE SUBLEASE
PAYMENTS PAYMENTS
--------------- --------
<S> <C> <C>
1999........................................................ $10,600 $ 2,100
2000........................................................ 10,400 2,100
2001........................................................ 8,800 1,600
2002........................................................ 3,700 --
2003........................................................ 2,200 --
Thereafter.................................................. 3,000 --
------- -------
Total....................................................... $38,700 $ 5,800
======= =======
</TABLE>

Under the Company's current operating structure, substantially all of the
office space and equipment subject to the operating leases described above are
for the use of its regional operating centers, which are operated by certain of
the Company's unconsolidated subsidiaries (see Note 5). Rent expense recognized
by the unconsolidated subsidiaries totaled $6.2 million in 1998. Rent expense
recognized by the Company totaled $0.7 million and $0.6 million in 1997 and
1996, respectively. Sublease income for the unconsolidated subsidiaries for 1998
was approximately $2.7 million. There was no sublease income for 1997 and 1996.

NOTE 12 TRUST BASED CONVERTIBLE PREFERRED SECURITIES

In connection with the Insignia merger, the Company assumed the obligations
under the Trust Based Convertible Preferred Securities (the "Securities") with
an aggregate liquidation amount of $149.5 million. The Securities will mature on
September 30, 2016 and require distributions at the rate of 6.5% per annum, with
quarterly distributions payable in arrears. The Securities are convertible by
the holders at any time through September 30, 2016 and may be redeemed by the
Company on or after November 1, 1999. Each $50 of liquidation value of the
Securities can be converted into Class A Common Stock at a conversion price of
$49.61, which equates to 1.007 shares of Class A Common Stock.

NOTE 13 TRANSACTIONS INVOLVING MINORITY INTERESTS

On December 14, 1998, the Company sold, in a private placement, 1.4 million
Class B partnership preferred units of a subsidiary of the AIMCO operating
partnership for $30.85 million. The partnership units may be redeemed at the
option of the holders at any time, and at the option of the Company under
certain circumstances. Any redemption of the units may be satisfied by delivery
of cash, Class A Common Stock or OP Units.

On December 30, 1998, the Company acquired Calhoun Beach Club Apartments, a
351 unit, high-rise apartment community and 83,300 square feet of commercial
space for approximately $77.1 million. The Company paid cash of $6.0 million;
assumed $53.5 million in mortgage debt; issued 90,000 preferred operating
partnership units valued at $9.0 million; issued approximately 100,300 common
operating partnership units valued at $4.1 million; and withheld, as contingent
consideration, approximately 109,800 common operating partnership units valued
at approximately $4.5 million.

NOTE 14 REGISTRATION STATEMENTS

In April 1997, AIMCO filed a shelf registration statement with the
Securities and Exchange Commission which provides for the offering of, on a
delayed or continuous basis, debt securities, Class A Common Stock, preferred
stock and warrants with an aggregate value of up to $1.0 billion. The shelf
registration statement was declared effective in May 1997.

F-23
<PAGE> 63
APARTMENT INVESTMENT AND MANAGEMENT COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

In August 1998, AIMCO and the AIMCO operating partnership filed a shelf
registration statement with the Securities and Exchange Commission with respect
to an aggregate of $1,268 million of debt and equity securities of AIMCO (of
which $268 million was carried forward from AIMCO's 1997 shelf registration
statement) and $500 million of debt securities of the AIMCO operating
partnership. The registration statement was declared effective by the SEC on
December 10, 1998. As of December 31, 1998, the Company had $1,268 million
available and the AIMCO operating partnership had $500 million available from
this registration statement. The Company expects to finance pending acquisitions
of real estate interests with the issuance of equity and debt securities under
the shelf registration statement.

NOTE 15 STOCKHOLDERS' EQUITY

Preferred Stock

At December 31, 1998 and 1997, the Company had the following classes of
preferred stock outstanding:

<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
Class B Cumulative Convertible Preferred Stock, $.01 par
value, 750,000 shares authorized, 750,000 and 750,000
shares issued and outstanding............................. $ 75,000 $ 75,000
Class C Cumulative Preferred Stock, $.01 par value,
2,760,000 shares authorized, 2,400,000 and 2,400,000
shares issued and outstanding; dividends payable at 9.0%,
per annum................................................. 60,000 60,000
Class D Cumulative Preferred Stock, $.01 par value,
4,600,000 shares authorized, 4,200,000 and no shares
issued and outstanding; dividends payable at 8.75%, per
annum..................................................... 105,000 --
Class G Cumulative Preferred Stock, $.01 par value,
4,050,000 shares authorized, 4,050,000 and no shares
issued and outstanding; dividends payable at 9.375%, per
annum..................................................... 101,250 --
Class H Cumulative Preferred Stock, $.01 par value,
2,300,000 shares authorized, 2,000,000 and no shares
issued and outstanding; dividends payable at 9.5%, per
annum..................................................... 50,000 --
Class J Cumulative Convertible Preferred Stock, $.01 par
value, 2,000,000 shares authorized, 1,000,000 and no
shares issued and outstanding............................. 100,000 --
Class E Cumulative Convertible Preferred Stock, $.01 par
value, 10,000,000 shares authorized, 8,423,658 and no
shares issued and outstanding............................. 301,218 --
-------- --------
$792,468 $135,000
======== ========
</TABLE>

All classes of preferred stock, except the Class E Cumulative Convertible
Preferred Stock (the "Class E Preferred Stock"), are on equal parity and are
senior to the Class E Preferred Stock, the Class A Common Stock, and the Class B
Common Stock. The Class E Preferred Stock is senior to the Class A Common Stock
and the Class B Common Stock. All the classes of preferred stock have no voting
rights.

Holders of the Class B Cumulative Convertible Preferred Stock (the "Class B
Preferred Stock") are entitled to receive, when, as and if declared by the Board
of Directors, quarterly cash dividends per share equal to the greater of
$1.78125 or the cash dividends declared on the number of shares of Class A
Common Stock into which one share of Class B Preferred Stock is convertible.
Each share of Class B Preferred Stock is convertible at the option of the
holder, beginning August 1998, into 3.28407 shares of Class A Common Stock,
subject to certain anti-dilution adjustments.

Holders of Class J Cumulative Convertible Preferred Stock (the "Class J
Preferred Stock") are entitled to receive cash dividends at the rate of 7% per
annum of the $100 liquidation preference (equivalent to $7 per annum per share)
for the period beginning on November 6, 1998 and lasting until November 15,
1998, 8% per

F-24
<PAGE> 64
APARTMENT INVESTMENT AND MANAGEMENT COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

annum of the $100 liquidation preference(equivalent to $8 per annum per share)
for the period beginning on and including November 15, 1998 and lasting until
November 15, 1999, 9% per annum of the $100 liquidation preference (equivalent
to $9 per annum per share) for the period beginning on and including November
15, 1999 and lasting until November 15, 2000, and 9 1/2% per annum of the $100
liquidation preference (equivalent to $9.50 per annum per share) thereafter.

The Company may convert any or all of the Class J Preferred Stock into
Class A Common Stock at a conversion rate of 2.5 shares of Class A Common Stock
for each share of Class J Preferred Stock, plus unpaid dividends accrued on the
shares redeemed (a) on or after November 6, 2002, if the market price of the
Class A Common Stock in the five most recent trading days, as defined, is equal
to or greater than $40 or; (b) at any time on or prior to November 6, 2002, if
the internal rate of return, as defined, exceeds 12.5%.

The Class E Preferred Stock was issued in connection with the Insignia
merger. Holders of Class E Preferred Stock were entitled to receive the same
cash dividends per share as holders of Class A Common Stock. In addition, on
January 15, 1999, holders of Class E Preferred Stock received a special dividend
in an aggregate amount of approximately $50 million, and all outstanding shares
of Class E Preferred Stock automatically converted into an equal number of
shares of Class A Common Stock.

Common Stock

During 1998 and 1997, the Company issued approximately 600,000 and
1,149,900 shares, respectively, of Class A Common Stock to certain executive
officers (or entities controlled by them) at market prices. In exchange for the
shares purchased, the executive officers (or entities controlled by them)
executed notes payable totaling $23.5 million and $33.5 million, respectively.
Total payments on such notes from officers in 1998 and 1997 were $8.9 million
and $14.5 million, respectively. In addition, in 1998, the Company issued
approximately 40,000 restricted shares of Class A Common Stock to certain
executive officers.

Concurrent with AIMCO's initial public offering in July 1994, 650,000
shares of AIMCO common stock held by four of the Company's executive officers
were reclassified as AIMCO Class B Common Stock ("Class B Common Stock"). The
Class B Common Stock is convertible into Class A Common Stock, subject to
certain conditions. In 1998, 1997 and 1996, respectively, 162,500, 162,500, and
260,000 shares of Class B Common Stock were converted into Class A Common Stock
upon the satisfaction of the requisite financial conditions for 1994 through
1998. As of December 31, 1998, all previously issued and outstanding shares of
Class B Common Stock had been converted to Class A Common Stock.

NOTE 16 STOCK OPTION PLANS AND STOCK WARRANTS

The Company has elected to follow Accounting Principles Board Opinion No.
25, Accounting for Stock Issued to Employees ("APB 25") and related
interpretations in accounting for its employee stock options because, as
discussed below, the alternative fair value accounting provided for under
Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based
Compensation ("SFAS 123"), requires use of option valuation models that were not
developed for use in valuing employee stock options and warrants. Under APB 25,
because the exercise price of the Company's employee stock options and warrants
equals the market price of the underlying stock on the date of grant, no
compensation expense is recognized.

The Company has adopted the 1994 Stock Option Plan of Apartment Investment
and Management Company (the "1994 Plan"), the Apartment Investment and
Management Company 1996 Stock Award and Incentive Plan (the "1996 Plan"), the
Apartment Investment and Management Company 1997 Stock Award and Incentive Plan
(the "1997 Plan") and the Apartment Investment and Management Company Non-
Qualified Employee Stock Option Plan (the "Non-Qualified Plan") to attract and
retain officers, key employees and independent directors. The 1994 Plan provides
for the granting of a maximum of 150,000 options to purchase common shares. The
1996 Plan provides for the granting of a maximum of 500,000 options

F-25
<PAGE> 65
APARTMENT INVESTMENT AND MANAGEMENT COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

to purchase common shares. The 1997 Plan provides for the granting of a maximum
of 20,000,000 options to purchase common shares. The Non-Qualified Plan provides
for the granting of a maximum of 500,000 options to purchase common shares. The
1994 Plan, the 1996 Plan, the 1997 Plan and the Non-Qualified Plan allow for the
grant of incentive and non-qualified stock options, and are administered by the
Compensation Committee of the Board of Directors. The 1994 Plan also provides
for a formula grant of the non-qualified stock options to the independent
directors to be administered by the Board of Directors to the extent necessary.
The exercise price of the options granted may not be less than the fair market
value of the common stock at the date of grant. The term of the incentive and
non-qualified options is ten years from the date of grant. The options vest over
a one to five-year period from the date of grant. Terms may be modified at the
discretion of the Compensation Committee of the Board of Directors.

Pro forma information regarding net income and earnings per share is
required by SFAS 123, which also requires that the information be determined as
if the Company had accounted for its employee stock options and warrants granted
subsequent to December 31, 1994 under the fair value method. The fair value for
these options and warrants were estimated at the date of grant using a
Black-Scholes valuation model with the following weighted average assumptions:

<TABLE>
<CAPTION>
1998 1997 1996
------------ ------------ ------------
<S> <C> <C> <C>
Range of risk free interest rates.......... 5.2% to 7.5% 5.2% to 7.5% 5.2% to 7.5%
Expected dividend yield.................... 6.0% 6.0% 7.8%
Volatility factor of the expected market
price of the Company's common stock...... 0.183 0.175 0.194
Weighted average expected life of
options.................................. 4.5 years 4.5 years 4.5 years
</TABLE>

The Black-Scholes valuation model was developed for use in estimating the
fair value of traded options and warrants which have no vesting restrictions and
are fully transferable. In addition, the valuation model requires the input of
highly subjective assumptions including the expected stock price volatility.
Because the Company's stock options and warrants have characteristics
significantly different from those of traded options and warrants, and because
changes in the subjective input assumptions can materially affect the fair value
estimate, in management's opinion, the existing model does not necessarily
provide a reliable single measure of the fair value of its employee stock
options and warrants.

For purposes of pro forma disclosures, the estimated fair values of the
options are amortized over the options' vesting period. The Company's pro forma
information for the years ended December 31, 1998, 1997 and 1996 is as follows
(in thousands, except per share information):

<TABLE>
<CAPTION>
1998 1997 1996
------- ------- -------
<S> <C> <C> <C>
Pro forma income attributable to common stockholders.... $34,443 $26,096 $12,201
Pro forma basic earnings per common share............... $ 0.76 $ 1.00 $ 0.98
Pro forma diluted earnings per common share............. $ 0.75 $ 1.00 $ 0.98
</TABLE>

The effects of applying SFAS 123 in calculating pro forma income
attributable to common stockholders and pro forma basic earnings per share may
not necessarily be indicative of the effects of applying SFAS 123 to future
years' earnings.

F-26
<PAGE> 66
APARTMENT INVESTMENT AND MANAGEMENT COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following table summarizes the option and warrants activity for the
years ended December 31, 1998, 1997 and 1996:

<TABLE>
<CAPTION>
1998 1997 1996
-------------------- -------------------- -------------------
WEIGHTED WEIGHTED WEIGHTED
OPTIONS AVERAGE OPTIONS AVERAGE OPTIONS AVERAGE
AND EXERCISE AND EXERCISE AND EXERCISE
WARRANTS PRICE WARRANTS PRICE WARRANTS PRICE
--------- -------- --------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at beginning of year...................... 1,184,000 $30.01 505,000 $20.74 108,000 $18.00
Granted............................................... 5,578,000 38.91 127,000 30.88 422,600 20.75
Assumed in connection with acquisitions............... 671,000 25.99 995,000 26.75 -- --
Exercised............................................. (647,000) 19.88 (437,000) 18.11 (2,600) 18.50
Forfeited............................................. (50,000) 20.25 (6,000) 18.50 (23,000) 17.50
--------- ------ --------- ------ ------- ------
Outstanding at end of year............................ 6,736,000 $37.82 1,184,000 $30.01 505,000 $20.74
Exercisable at end of year............................ 1,293,000 $25.19 690,000 $19.95 425,000 $20.25
Weighted-average fair value of options and warrants
granted during the year............................. $ 3.71 $ 3.24 $ 1.01
</TABLE>

At December 31, 1998, exercise prices for outstanding and exercisable
options range from $12.36 to $43.85 and warrants range from $3.96 to $51.67, and
the remaining weighted-average contractual life of the options and warrants is
9.06 years.

On June 3, 1997, AIMCO issued warrants (the "NHP Warrants") exercisable to
purchase an aggregate of 399,999 shares of Class A Common Stock at $36 per share
at any time prior to June 3, 2002. The NHP Warrants were issued as part of the
consideration for the NHP Real Estate Companies.

On December 2, 1997, AIMCO issued warrants (the "Oxford Warrants")
exercisable to purchase up to an aggregate of 500,000 shares of Class A Common
Stock at $41 per share. The Oxford Warrants were issued to affiliates of Oxford
Realty Financial Group, Inc., a Maryland corporation ("Oxford"), in connection
with the amendment of certain agreements pursuant to which the Company manages
properties controlled by Oxford or its affiliates. The actual number of shares
of Class A Common Stock for which the Oxford Warrants will be exercisable is
based on certain performance criteria with respect to the Company's management
arrangements with Oxford for each of the five years ending December 31, 2001.
The Oxford Warrants are exercisable for six years after the determination of
such criteria for each of the five years.

In connection with the Insignia merger, the Company assumed warrants that
will allow the holders to purchase shares of Class A Common Stock at prices
ranging from approximately $4 to $52 per share at any time prior to September
30, 1999. At December 31, 1998, warrants representing approximately 359,000
shares were available for exercise.

On December 14, 1998, the Company sold, in a private placement, a warrant
to purchase 875,000 shares of Class A Common Stock for $4.15 million. The
warrant has an exercise price of $40 per share. The warrant may be exercised at
any time, and expires upon a redemption of the Class B partnership preferred
units (see Note 13).

NOTE 17 EARNINGS PER SHARE

In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, Earnings Per Share ("SFAS 128"),
which replaced Accounting Principles Board Opinion No. 15 ("APB 15"). As
required, the Company adopted SFAS 128 as of December 31, 1997 and restated
earnings per share information for prior interim and annual periods.

The Class B Common Stock is not included in the computation of earnings per
share until such time as all the conditions required for conversion into Class A
Common Stock have been met. The Class B Preferred Stock, Class E Preferred Stock
and the Class J Preferred Stock is convertible (see Note 15). The Class C

F-27
<PAGE> 67
APARTMENT INVESTMENT AND MANAGEMENT COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Preferred Stock, the Class D Preferred Stock, the Class G Preferred Stock, and
the Class H Preferred Stock are not convertible.

The following table illustrates the calculation of basic and diluted
earnings per share for the years ended December 31, 1998, 1997 and 1996 (in
thousands, except per share data):

<TABLE>
<CAPTION>
1998 1997 1996
-------- -------- --------
<S> <C> <C> <C>
Numerator:
Net income.................................................. $ 64,474 $ 28,633 $ 12,984
Preferred stock dividends................................... (26,533) (2,315) --
-------- -------- --------
Numerator for basic and diluted earnings per share -- income
attributable to common stockholders....................... $ 37,941 $ 26,318 $ 12,984
-------- -------- --------
Denominator:
Denominator for basic earnings per share -- weighted average
number of shares of common stock outstanding.............. 45,187 24,055 12,411
Effect of dilutive securities:
Class E Preferred Stock..................................... 2,119 -- --
Employee stock options...................................... 318 381 14
Warrants.................................................... -- -- 2
-------- -------- --------
Dilutive potential common shares............................ 2,437 381 16
-------- -------- --------
Denominator for diluted earnings per share.................. 47,624 24,436 12,427
-------- -------- --------
Basic earnings per common share:
Operations................................................ $ 0.74 $ 0.99 $ 1.05
Gain on disposition of properties......................... 0.10 0.11 --
Extraordinary item........................................ -- (0.01) --
-------- -------- --------
Total............................................. $ 0.84 $ 1.09 $ 1.05
-------- -------- --------
Diluted earnings per common share:
Operations................................................ $ 0.70 $ 0.98 $ 1.04
Gain on dispositions of properties........................ 0.10 0.11 --
Extraordinary item........................................ -- (0.01) --
-------- -------- --------
Total............................................. $ 0.80 $ 1.08 $ 1.04
-------- -------- --------
</TABLE>

NOTE 18 RECENT ACCOUNTING DEVELOPMENTS

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, Accounting for Derivative Instruments
and Hedging Activities ("Statement 133"). Statement 133 requires recording all
derivative instruments as assets or liabilities, measured at fair value.
Statement 133 is effective beginning after 1999. The Company has elected not to
early adopt the provisions of Statement 133 as of December 31, 1998 and when
Statement 133 is adopted, the Company does not expect the Statement to have a
significant impact on its financial position and results of operations.

NOTE 19 TRANSACTIONS WITH AFFILIATES

In January 1998, AIMCO's operating partnership sold an aggregate of 15,000
of its Class I High Performance Partnership Units ("the "High Performance
Units") to a joint venture formed by fourteen members of AIMCO's senior
management, and to three of its independent directors for $2.1 million in cash.
The High Performance Units have nominal value unless the Company's total return,
defined as dividend income plus share price appreciation, over the three year
period ending December 31, 2000, is at least 30% and

F-28
<PAGE> 68
APARTMENT INVESTMENT AND MANAGEMENT COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

exceeds the industry average, as determined by a peer group index, by at least
15% (the "Total Return"). At the conclusion of the three year period, if the
Company's Total Return satisfies these criteria, the holders of the High
Performance Units will receive distributions and allocations of income and loss
from the AIMCO operating partnership in the same amounts and at the same times
as would holders of a number of OP Units equal to the quotient obtained by
dividing the product of (i)(a) 15% of the amount by which the Company's
cumulative Total Return over the three year period exceeds the greater of 115%
of a peer group index or 30% (such excess being the "Excess Return"), multiplied
by (b) the weighted average market value of the Company's outstanding Class A
Common Stock and OP Units, by (ii) the market value of one share of Class A
Common Stock at the end of the three year period. The three year measurement
period will be shortened in the event of a change of control of the Company.
Unlike OP Units, the High Performance Units are not redeemable or convertible
into Class A Common Stock unless a change of control of the Company occurs.
Because there is substantial uncertainty that the High Performance Units will
have more than nominal value due to the required Total Return over the three
year term, the Company has not recorded any value to the High Performance Units.
If the measurement period had ended December 31, 1998, the Excess Return would
have been $0 and the value of the High Performance Units would have been $0, and
such High Performance Units would have had no dilutive effect on net income per
share.

Interest income earned on notes receivable from affiliates for the year
ended December 31, 1998 was $26.1 million. Fees earned based on services
provided by the Company, as general partner, to real estate partnerships for
customary services including refinancing, construction supervisory and
disposition fees for the year ended December 31, 1998 were $6.4 million.
Interest income on notes receivable from affiliates and fees earned by the
Company for the years ended December 31, 1997 and 1996 were not significant.

NOTE 20 EMPLOYEE BENEFIT PLANS

The Company offers medical, dental, life and long-term disability benefits
to employees of the Company through insurance coverage of Company-sponsored
plans. The medical and dental plans are self-funded and are administered by
independent third parties. In addition, the Company also participates in a
401(k) defined-contribution employee savings plan. Employees who have completed
six months of service are eligible to participate. The Company matches 50% of
the participant's contributions to the plan up to a maximum of 6% of the
participant's prior year compensation.

F-29
<PAGE> 69
APARTMENT INVESTMENT AND MANAGEMENT COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 21 UNAUDITED SUMMARIZED CONSOLIDATED QUARTERLY INFORMATION

Summarized unaudited consolidated quarterly information for 1998 and 1997
is provided below (amounts in thousands, except per share amounts).

<TABLE>
<CAPTION>
QUARTER
---------------------------------------
YEAR ENDED DECEMBER 31, 1998 FIRST SECOND THIRD FOURTH
- ---------------------------- ------- ------- -------- --------
<S> <C> <C> <C> <C>
Revenue from property operations..................... $71,336 $89,928 $104,436 $111,439
Income from property operations...................... 28,918 33,701 33,943 37,388
Revenue from service company business................ 4,821 4,741 4,406 10,135
Company's share of income from service company
business........................................... 992 1,183 1,775 1,475
Income before extraordinary item and minority
interest in operating partnership.................. 23,930 14,594 17,745 13,387
Net income........................................... 21,642 13,620 16,582 12,630
Basic earnings per common share...................... $ 0.44 $ 0.19 $ 0.19 $ 0.05
Diluted earnings per common share.................... $ 0.43 $ 0.19 $ 0.19 $ 0.05
Weighted average common shares outstanding........... 41,128 45,298 47,062 47,261
Weighted average common shares and common share
equivalents outstanding............................ 41,310 45,539 47,403 56,244
</TABLE>

<TABLE>
<CAPTION>
QUARTER
---------------------------------------
YEAR ENDED DECEMBER 31, 1997 FIRST SECOND THIRD FOURTH
- ---------------------------- ------- ------- -------- --------
<S> <C> <C> <C> <C>
Revenue from property operations..................... $38,040 $41,679 $ 47,364 $ 65,923
Income from property operations...................... 14,808 15,971 17,375 24,323
Revenue from service company business................ 2,444 3,161 3,568 4,764
Company's share of income from service company
business........................................... 551 1,480 773 (776)
Income before minority interest in operating
partnership........................................ 5,694 6,039 7,963 13,270
Net income........................................... 4,584 5,264 6,967 11,818
Basic earnings per share............................. $ 0.28 $ 0.26 $ 0.25 $ 0.30
Diluted earnings per share........................... $ 0.28 $ 0.26 $ 0.25 $ 0.29
Weighted average common shares outstanding........... 16,454 20,366 24,425 34,771
Weighted average common shares and common share
equivalents outstanding............................ 16,586 20,504 24,609 35,190
</TABLE>

NOTE 22 INDUSTRY SEGMENTS

The Company adopted Financial Accounting Standards Board ("FASB") Statement
No. 131, Disclosures about Segments of an Enterprise and Related Information
("Statement 131") in the fourth quarter of 1998. Statement No. 131 superseded
FASB Statement No. 14, Financial Reporting for Segments of a Business
Enterprise. Statement 131 establishes standards for the way public business
enterprises report information regarding reportable operating segments. The
adoption of Statement 131 did not affect the results of operations or financial
position of the Company.

The Company owns and operates multi-family apartment communities throughout
the United States and Puerto Rico which generated rental and other property
related income through the leasing of apartment units to a diverse base of
tenants. The Company separately evaluates the performance of each of its
apartment communities. However, because each of the apartment communities have
similar economic characteristics, facilities, services and tenants, the
apartment communities have been aggregated into a single apartment

F-30
<PAGE> 70
APARTMENT INVESTMENT AND MANAGEMENT COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

communities segment. All segment disclosures are included in or can be derived
from the Company's consolidated financial statements.

All revenues are from external customers and no revenues are generated from
transactions with other segments. There are no tenants which contributed 10% or
more of the Company's total revenues during 1998, 1997 or 1996.

NOTE 23 PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)

The unaudited pro forma condensed consolidated statements of operations for
the years ended December 31, 1998 and 1997 have been prepared as if each of the
following transactions had occurred on January 1, 1997: (i) the NHP stock
purchases and the NHP Merger (see Note 5); (ii) the acquisition of the NHP Real
Estate Companies (see Note 6); (iii) a reorganization of the interests held by
the NHP Real Estate Companies (see Note 5); (iv) the (a) 1997 property
acquisitions, (b) the acquisition of the Controlled NHP Partnerships and (c) the
acquisition of the Winthrop Portfolio, the related issuance of Class A Common
Stock and OP Units, the incurrence of indebtedness to finance such acquisitions,
and the refinancing of such indebtedness; (v) the 1998 property acquisitions;
(vi) the 1998 property dispositions; (vii) the sale of (a) 2,015,000 shares of
Class A Common Stock in February 1997, (b) 2,300,000 shares of Class A Common
Stock in May 1997, (c) 5,052,418 shares of Class A Common Stock in August and
September 1997, and (d) 7,000,000 shares of Class A Common Stock in October
1997, and the application of the aggregate net proceeds thereof to repay
indebtedness and fund the purchase of additional shares of NHP common stock;
(viii) the sale of 750,000 shares of Class B Preferred Stock in August 1997, and
the application of the net proceeds thereof to repay indebtedness; (ix) the sale
of 2,400,000 shares of Class C Preferred Stock in December 1997 and the
application of the net proceeds thereof to pay indebtedness; (x) the sale of
4,200,000 shares of Class D Cumulative Preferred Stock and the application of
the net proceeds thereof to pay indebtedness; (xi) the sale of 4,050,000 shares
of Class G Cumulative Preferred Stock and the application of the net proceeds
thereof to pay indebtedness; (xii) the sale of 2,000,000 shares of Class H
Cumulative Preferred Stock and the application of the net proceeds thereof to
pay indebtedness; (xiii) the sale of 1,000,000 shares of Class J Cumulative
Convertible Preferred Stock and the application of the net proceeds thereof to
repay indebtedness; (xiv) the Company's receipt of a dividend from ANHI from
proceeds ANHI received from ANHI stock transfers; (xv) the Ambassador Merger
(Note 4); (xvi) the purchase of third-party notes payable secured by four
properties in which the NHP Real Estate Companies own an interest, and the
conversion of such notes payable into loans from the general partner; (xvii) the
purchase of land leased by two partnerships in which the NHP Real Estate
Companies own an interest; and (xviii) the Insignia merger (Note 4).

The pro forma information is not necessarily indicative of what the
Company's results of operations would have been assuming the completion of the
described transactions at the beginning of the periods indicated, nor does it
purport to project the Company's results of operations for any future period.

F-31
<PAGE> 71
APARTMENT INVESTMENT AND MANAGEMENT COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)

<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
Income from property operations............................. $155,741 $140,744
-------- --------
Company's share of loss from service company business....... (1,162) (12,628)
-------- --------
Income (loss) before minority interest in operating
partnership............................................... 44,443 (2,946)
-------- --------
Net income.................................................. $ 43,669 $ 2,393
======== ========
Net income attributable to preferred stockholders........... $ 40,994 $ 41,174
======== ========
Net income (loss) attributable to common stockholders....... $ 2,675 $(38,781)
======== ========
Basic earnings (loss) per share............................. $ 0.05 $ (0.70)
Diluted earnings (loss) per share........................... $ 0.05 $ (0.70)
Weighted average number of common shares outstanding........ 56,735 55,109
Weighted average number of common shares and common share
equivalents outstanding................................... 57,400 55,953
</TABLE>

NOTE 24 SUBSEQUENT EVENTS

Dividend declared

AIMCO's Board of Directors declared a one-time special dividend of $5.582
per share of the Class E Preferred Stock, paid on January 15, 1999 to holders of
record on December 31, 1998. Upon payment of this special dividend totaling
approximately $50 million in the aggregate, each share of Class E Preferred
Stock was automatically converted into one share of Class A Common Stock.
Approximately 8.4 million shares of Class E Preferred stock were issued and
approximately 0.5 million shares were reserved for options and warrants in
October 1998 in connection with the Insignia merger.

On January 20, 1999, the Board of Directors declared a quarterly cash
dividend of $0.625 per common share for the quarter ended December 31, 1998,
paid on February 12, 1999, to stockholders of record on February 5, 1999. The
increased dividend is equivalent to an annualized dividend rate of $2.50 per
common share, an 11% increase from the previous annual dividend rate of $2.25.

Insignia Properties Trust

As a result of the Insignia merger, AIMCO acquired approximately 51% of the
outstanding shares of beneficial interest of IPT. On February 26, 1999, IPT was
merged into AIMCO. Pursuant to the merger, each of the outstanding shares of IPT
that were not held by AIMCO were converted into the right to receive 0.3601
shares of Class A Common Stock for each share of IPT common stock, resulting in
the issuance of approximately 4.3 million shares of Class A Common Stock (with a
recorded value of approximately $158.8 million).

Stock Offering

On February 18, 1999, AIMCO issued 5,000,000 shares of newly created Class
K Convertible Cumulative Preferred Stock, par value $.01 per share ("Class K
Preferred Stock") in a public offering. The net proceeds of $120.6 million were
used to repay certain indebtedness and for working capital. For three years,
holders of the Class K Preferred Stock are entitled to receive, when, as and if
declared by the Board of Directors, annual cash dividends in an amount per share
equal to the greater of (i) $2.00 per year (equivalent to 8% of the liquidation
preference), or (ii) the cash dividends payable on the number of shares of Class
A

F-32
<PAGE> 72
APARTMENT INVESTMENT AND MANAGEMENT COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Common Stock into which a share of Class K Preferred Stock is convertible.
Beginning with the third anniversary of the date of original issuance, holders
of Class K Preferred Stock will be entitled to receive an amount per share equal
to the greater of (i) $2.50 per year (equivalent to 10% of the liquidation
preference), or (ii) the cash dividends payable on the number of Class A Common
Stock into which a share of Class K Preferred is convertible. The Class K
Preferred Stock is senior to the Class A Common Stock as to dividends and
liquidation. Upon any liquidation, dissolution or winding up of AIMCO, before
payment or distributions by AIMCO shall be made to any holders of Class A Common
Stock, the holders of the Class K Preferred Stock shall be entitled to receive a
liquidation preference of $25 per share, plus accumulated, accrued and unpaid
dividends.

Debt Refinancing

In February 1999, the Company terminated its $50 million credit facility
with Washington Mortgage Financial Group, Ltd. and repaid all outstanding
borrowings with proceeds from new long-term, fully amortizing indebtedness
secured by certain properties that previously secured the credit facility.

In February and March 1999, the Company incurred in the aggregate $83.4
million of long-term, fixed rate, fully amortizing mortgage debt secured by 13
properties in separate loan transactions. The Company used the $81.5 million of
net proceeds from the financings to repay debt under the interim loan agreement
with Lehman Brothers Inc., to repay debt under its credit facility with Bank of
America National Trust and Savings Association and Bank Boston, N.A. and to
provide working capital. As of March 11, 1999, the balance outstanding under the
interim loan agreement was $25 million, under the credit facility was $74.8
million, and under the IPT credit agreement was $45 million. The amount
available under the credit facility at March 11, 1999 was $24 million.

F-33
<PAGE> 73

SCHEDULE III

APARTMENT INVESTMENT AND MANAGEMENT COMPANY
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1998
(IN THOUSANDS EXCEPT UNIT DATA)
<TABLE>
<CAPTION>

INITIAL COST COST
---------------------- CAPITALIZED
BUILDINGS SUBSEQUENT
DATE YEAR NUMBER AND TO
PROPERTY NAME ACQUIRED LOCATION BUILT OF UNITS LAND IMPROVEMENTS ACQUISITION
- ------------- -------- --------------------- --------- -------- ------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
100 Forest Place......... 10/97 OakPark, IL 1986 234 $ 3,463 $ 19,624 $ 528
40th North............... 7/94 Phoenix, AZ 1970 556 2,546 14,437 1,539
Anchorage................ 11/96 League City, TX 1985 264 523 9,097 403
Arbor Crossing........... 5/97 Lithonia, GA 1988 240 1,879 10,647 1,169
Arbor Station............ 4/98 Montgomery, AL 1987 264 1,627 9,218 577
Arbors................... 5/98 Deland, FL 1983 224 1,872 7,925 307
Arbors................... 10/97 Tempe, AZ 1971 200 1,092 6,189 310
Ashford Plantation....... 12/95 Atlanta, GA 1975 211 2,770 9,956 578
Aspen Hills.............. 5/98 Austin, TX 1986 344 3,281 13,917 590
Atriums of Plantation.... 8/98 Plantation, FL 1980 210 1,807 9,756 519
Bay Club................. 4/97 Aventura, FL 1990 702 10,530 60,830 1,719
Beacon Hill.............. 10/97 Chamblee, GA 1978 120 928 5,261 243
Bent Oaks................ 5/98 Austin, TX 1979 146 1,444 5,834 222
Blossomtree.............. 10/97 Scottsdale, AZ 1970 125 535 3,029 225
Bluffs................... 9/83 Boulder, CO 1971 232 696 7,779 909
Boardwalk................ 12/95 Tamarac, FL 1986 291 3,350 8,196 1,049
Brandywine............... 4/83 St. Petersburg, FL 1971 477 1,423 11,336 1,810
Brant Rock............... 10/97 Houston, TX 1984 84 337 1,908 128
Breasview................ 5/98 San Antonio, TX 1982 396 3,200 17,051 765
Brentwood................ 11/96 Lake Jackson, TX 1980 104 200 3,092 428
Bridgewater.............. 11/96 Tomball, TX 1978 206 333 4,033 551
Broadmoor Apartments..... 5/98 Austin, TX 1985 200 1,606 7,360 208
Brookdale Lakes.......... 5/98 Naperville, IL 1990 200 1,923 15,430 857
Brookside Village........ 4/96 Tustin, CA 1970 628 2,498 14,180 20,286
Calhoun Beach............ 12/98 Minneapolis, MN 1928/1998 351 11,567 65,546 2,633
Cambridge Heights........ 5/97 Natchez, MS 1979 94 249 1,413 74
Cape Cod................. 5/98 San Antonio, TX 1985 244 1,951 8,324 317
Captiva Club............. 12/96 Tampa, FL 1975 357 1,500 7,085 7,052
Casa Anita............... 3/98 Phoenix, AZ 1986 224 1,125 6,404 68
Cedar Creek.............. 5/98 San Antonio, TX 1979 392 1,630 10,051 328
Chesapeake............... 12/96 Houston, TX 1983 320 775 7,317 655
Citrus Grove............. 6/98 Redlands, CA 1985 198 1,118 6,333 107
Citrus Sunset............ 3/98 Vista, CA 1985 96 663 3,758 53
Cleveland Properties..... 10/98 Strongsville, OH 1975 0 646 3,652 91
Cobble Creek............. 3/98 Tucson, AZ 1980 301 1,299 7,395 269
Colonade
Gardens/Ferntree........ 10/97 Phoenix, AZ 1973 196 765 4,337 203
Colony................... 9/98 Bradenton, FL 1986 166 1,121 6,350 144
Copper Chase............. 12/96 Katy, TX 1982 316 1,484 11,530 478
Copperfield.............. 11/96 Houston, TX 1983 196 702 7,003 (574)
Coral Cove............... 5/98 Tampa, FL 1985 200 1,614 5,875 241
Coral Gardens............ 4/93 Las Vegas, NV 1983 670 3,190 12,745 2,047

<CAPTION>
DECEMBER 31, 1998
-----------------------------------------------------------------------------------
TOTAL COST
BUILDINGS NET OF
AND ACCUMULATED ACCUMULATED
PROPERTY NAME LAND IMPROVEMENTS TOTAL DEPRECIATION DEPRECIATION ENCUMBRANCES
- ------------- ----------- ------------ --------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
100 Forest Place......... $ 3,463 $ 20,152 $ 23,615 $ 1,186 $ 22,429 $ 15,281
40th North............... 2,546 15,976 18,522 2,998 15,524 10,521
Anchorage................ 523 9,500 10,023 3,290 6,733 4,821
Arbor Crossing........... 1,880 11,815 13,695 866 12,829 5,191
Arbor Station............ 1,627 9,795 11,422 176 11,246 --(2)
Arbors................... 1,872 8,232 10,104 221 9,883 3,816
Arbors................... 1,092 6,499 7,591 323 7,268 7,605
Ashford Plantation....... 2,770 10,534 13,304 1,449 11,855 7,289
Aspen Hills.............. 3,281 14,507 17,788 504 17,284 9,800
Atriums of Plantation.... 1,807 10,275 12,082 195 11,886 7,767
Bay Club................. 10,530 62,549 73,079 3,923 69,156 49,000
Beacon Hill.............. 928 5,504 6,432 236 6,196 3,590
Bent Oaks................ 1,444 6,056 7,500 181 7,319 4,400
Blossomtree.............. 535 3,254 3,789 158 3,631 2,092
Bluffs................... 696 8,688 9,384 5,396 3,988 4,522
Boardwalk................ 3,350 9,245 12,595 1,299 11,296 9,267(2)
Brandywine............... 1,423 13,146 14,569 5,217 9,352 6,407
Brant Rock............... 337 2,036 2,373 91 2,282 1,210
Breasview................ 3,200 17,816 21,016 523 20,493 14,025
Brentwood................ 200 3,520 3,720 242 3,478 1,779
Bridgewater.............. 333 4,584 4,917 1,190 3,727 4,150
Broadmoor Apartments..... 1,606 7,568 9,174 226 8,948 6,000
Brookdale Lakes.......... 1,923 16,287 18,210 482 17,728 13,600
Brookside Village........ 7,263 29,701 36,964 2,706 34,258 --(2)
Calhoun Beach............ 11,698 68,048 79,746 -- 79,746 53,500
Cambridge Heights........ 249 1,487 1,736 113 1,623 1,555
Cape Cod................. 1,951 8,641 10,592 273 10,319 6,800
Captiva Club............. 1,500 14,137 15,637 591 15,046 --(2)
Casa Anita............... 1,125 6,472 7,597 219 7,378 4,101
Cedar Creek.............. 1,630 10,379 12,009 262 11,747 --(2)
Chesapeake............... 775 7,972 8,747 692 8,055 --(2)
Citrus Grove............. 1,118 6,440 7,558 211 7,347 --(2)
Citrus Sunset............ 663 3,811 4,474 107 4,367 3,594
Cleveland Properties..... 646 3,743 4,389 55 4,334 --(4)
Cobble Creek............. 1,299 7,664 8,963 253 8,710 6,998
Colonade
Gardens/Ferntree........ 765 4,540 5,305 226 5,079 --
Colony................... 1,121 6,494 7,615 121 7,494 3,331
Copper Chase............. 1,484 12,008 13,492 3,736 9,756 5,525
Copperfield.............. 572 6,559 7,131 1,178 5,953 3,453
Coral Cove............... 1,614 6,116 7,730 182 7,548 3,965
Coral Gardens............ 3,190 14,792 17,982 3,766 14,216 10,996
</TABLE>

F-34
<PAGE> 74
<TABLE>
<CAPTION>

INITIAL COST COST
---------------------- CAPITALIZED
BUILDINGS SUBSEQUENT
DATE YEAR NUMBER AND TO
PROPERTY NAME ACQUIRED LOCATION BUILT OF UNITS LAND IMPROVEMENTS ACQUISITION
- ------------- -------- --------------------- --------- -------- ------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Country Club Villas...... 7/94 Amarillo, TX 1984 282 1,049 5,951 749
Country Club West........ 5/98 Greeley, CO 1986 288 1,646 17,029 637
Courtney Park............ 5/98 Fort Collins, CO 1986 248 2,570 15,336 505
Coventry Square.......... 11/96 Houston, TX 1983 270 975 6,355 684
Crossings at Bell........ 1/98 Amarillo, TX 1976 160 483 2,737 1,092
Crossings of Bellevue.... 5/98 Nashville, TN 1985 300 2,096 14,754 747
Crossroads............... 5/98 Phoenix, AZ 1982 316 1,447 12,788 456
Crows Nest............... 11/96 League City, TX 1984 176 795 5,400 247
Cypress Landing.......... 12/96 Savannah, GA 1984 200 386 7,911 983
Cypress Ridge............ 5/98 Houston, TX 1979 268 1,477 4,179 262
Dolphins Landing......... 12/96 Corpus Christi, TX 1980 218 1,740 5,589 662
Dunwoody Park............ 7/94 Dunwoody, GA 1980 318 1,838 10,538 966
Eagles Nest.............. 5/98 San Antonio, TX 1973 226 1,339 5,365 380
Eaglewood/Woods.......... 6/98 Memphis, TN 1983 584 750 16,544 (3,702)
Easton Village........... 11/96 Houston, TX 1983 146 440 6,584 284
Eden Crossing............ 11/94 Pensacola, FL 1985 200 1,111 6,332 653
Elm Creek................ 5/97 Elmhurst, IL 1986 372 5,339 30,253 6,939
Emerald Ridge............ 2/98 Tyler, TX 1984 484 1,469 8,324 469
Fairways................. 7/94 Chandler, AZ 1986 352 1,830 10,403 6,844
Ferntree................. 10/98 Phoenix, AZ 1970 219 1,243 7,046 10
Fieldcrest............... 10/98 Jacksonville, FL 1982 240 1,331 7,544 14
Fishermans Landing....... 9/98 Temple Terrace, FL 1986 256 1,643 9,311 153
Fisherman's Landing...... 12/97 Bradenton, FL 1984 200 1,275 7,225 571
Fishermans Wharf......... 11/96 Clute, TX 1981 360 830 9,969 407
Foothills................ 10/97 Tucson, AZ 1982 270 1,203 6,817 166
Foxbay................... 10/97 Tucson, AZ 1983 232 700 3,966 478
Foxchase................. 5/97 Alexandria, VA 1947 2,113 39,390 68,354 6,692
Foxtree.................. 10/97 Tempe, AZ 1976 487 2,505 14,194 687
Frankford Place.......... 7/94 Carrollton, TX 1982 274 1,125 6,382 854
Franklin Oaks............ 5/98 Franklin, TN 1987 468 3,467 22,753 1,369
Freedom Place Club....... 10/97 Jacksonville, FL 1988 352 2,289 12,970 388
Garden Terrace........... 7/94 Bowie, TX 1978 20 49 280 28
Greens of Naperville..... 5/97 Naperville, IL 1986 400 3,756 21,284 (227)
Greentree................ 12/96 Carrollton, TX 1983 365 1,909 14,842 1,442
Hampton Hill............. 11/96 Houston, TX 1984 332 1,574 8,408 1,218
Harbor Cove.............. 5/98 San Antonio, TX 1980 256 1,845 7,563 328
Hastings Place........... 11/96 Houston, TX 1984 176 734 3,382 307
Haverhill Commons........ 5/98 W. Palm Beach, FL 1986 222 2,389 8,372 443
Hazeltree................ 10/97 Phoenix, AZ 1970 310 997 5,650 689
Heather Ridge............ 5/98 Phoenix, AZ 1983 252 1,914 8,568 316
Heather Ridge............ 12/96 Arlington, TX 1983 180 655 5,455 (1,077)
Hidden Lake Apts......... 5/98 Tampa, FL 1983 267 1,613 7,241 357
Hiddentree............... 10/97 East Lansing, MI 1966 261 1,470 8,330 908
Highland Park............ 12/96 Fort Worth, TX 1985 500 3,234 19,536 (2,331)
Hillmeade................ 11/94 Nashville, TN 1985 288 2,872 16,066 1,449
Hunters Glen............. 4/98 Austell, GA 1983 72 301 1,704 69
Islandtree............... 10/97 Savannah, GA 1985 216 1,267 7,181 445
Jefferson Place.......... 11/94 Baton Rouge, LA 1985 234 2,696 15,115 1,397
La Jolla de San
Antonio................. 5/98 San Antonio, TX 1975 300 1,196 10,676 1,975
La Jolla de Tucson
Apts.................... 5/98 Tucson, AZ 1978 223 2,944 7,196 (431)
Lake Crossing............ 5/97 Austell, GA 1988 300 2,046 11,596 401

<CAPTION>
DECEMBER 31, 1998
-----------------------------------------------------------------------------------
TOTAL COST
BUILDINGS NET OF
AND ACCUMULATED ACCUMULATED
PROPERTY NAME LAND IMPROVEMENTS TOTAL DEPRECIATION DEPRECIATION ENCUMBRANCES
- ------------- ----------- ------------ --------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Country Club Villas...... 1,049 6,700 7,749 1,228 6,521 3,955
Country Club West........ 1,646 17,666 19,312 446 18,866 11,253
Courtney Park............ 2,570 15,841 18,411 401 18,010 9,979
Coventry Square.......... 975 7,039 8,014 2,679 5,335 3,005
Crossings at Bell........ 483 3,829 4,312 156 4,156 --(2)
Crossings of Bellevue.... 2,096 15,501 17,597 387 17,210 8,540
Crossroads............... 1,447 13,244 14,691 378 14,313 7,000
Crows Nest............... 795 5,647 6,442 1,708 4,734 2,856
Cypress Landing.......... 386 8,894 9,280 2,670 6,610 4,274
Cypress Ridge............ 1,477 4,441 5,918 177 5,741 4,250
Dolphins Landing......... 1,740 6,251 7,991 591 7,400 --(2)
Dunwoody Park............ 1,838 11,504 13,342 2,136 11,206 7,338
Eagles Nest.............. 1,339 5,745 7,084 260 6,824 4,805
Eaglewood/Woods.......... 750 12,842 13,592 1,325 12,267 --(2)
Easton Village........... 590 6,718 7,308 1,352 5,956 2,863
Eden Crossing............ 1,111 6,985 8,096 1,193 6,903 5,786
Elm Creek................ 5,339 37,192 42,531 2,388 40,143 --(2)
Emerald Ridge............ 1,469 8,793 10,262 435 9,827 6,176
Fairways................. 1,830 17,247 19,077 2,111 16,966 6,229
Ferntree................. 1,243 7,056 8,299 67 8,232 2,826
Fieldcrest............... 1,331 7,558 8,889 108 8,781 5,745
Fishermans Landing....... 1,643 9,464 11,107 177 10,930 5,688
Fisherman's Landing...... 1,275 7,796 9,071 298 8,773 --
Fishermans Wharf......... 830 10,376 11,206 4,230 6,976 3,498(2)
Foothills................ 1,203 6,983 8,186 354 7,832 3,835
Foxbay................... 700 4,444 5,144 208 4,936 3,176
Foxchase................. 16,175 98,261 114,436 5,955 108,481 65,879
Foxtree.................. 2,505 14,881 17,386 736 16,650 8,845
Frankford Place.......... 1,125 7,236 8,361 1,409 6,952 3,896
Franklin Oaks............ 3,467 24,122 27,589 668 26,921 17,700
Freedom Place Club....... 2,289 13,358 15,647 618 15,029 6,935
Garden Terrace........... 49 308 357 61 296 --
Greens of Naperville..... 3,756 21,057 24,813 1,308 23,505 12,724(2)
Greentree................ 1,909 16,284 18,193 4,697 13,496 7,358(2)
Hampton Hill............. 2,130 9,070 11,200 4,173 7,027 4,094
Harbor Cove.............. 1,845 7,891 9,736 250 9,486 5,900
Hastings Place........... 734 3,689 4,423 1,166 3,257 2,626
Haverhill Commons........ 2,389 8,815 11,204 241 10,963 9,100
Hazeltree................ 997 6,339 7,336 294 7,042 4,034
Heather Ridge............ 1,914 8,884 10,798 248 10,550 6,000
Heather Ridge............ 655 4,378 5,033 593 4,440 2,603
Hidden Lake Apts......... 1,613 7,598 9,211 219 8,992 --
Hiddentree............... 1,470 9,238 10,708 573 10,135 4,390
Highland Park............ 3,234 17,205 20,439 8,294 12,145 9,270
Hillmeade................ 2,872 17,515 20,387 2,930 17,457 10,788
Hunters Glen............. 301 1,773 2,074 65 2,009 1,111
Islandtree............... 1,267 7,626 8,893 322 8,571 4,191
Jefferson Place.......... 2,697 16,511 19,208 2,803 16,405 9,281
La Jolla de San
Antonio................. 2,670 11,177 13,847 337 13,510 8,855
La Jolla de Tucson
Apts.................... 1,470 8,239 9,709 869 8,840 5,820
Lake Crossing............ 2,047 11,996 14,043 947 13,096 9,765
</TABLE>

F-35
<PAGE> 75
<TABLE>
<CAPTION>

INITIAL COST COST
---------------------- CAPITALIZED
BUILDINGS SUBSEQUENT
DATE YEAR NUMBER AND TO
PROPERTY NAME ACQUIRED LOCATION BUILT OF UNITS LAND IMPROVEMENTS ACQUISITION
- ------------- -------- --------------------- --------- -------- ------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Lakehaven I.............. 5/97 Carol Stream, IL 1984 144 1,071 6,069 298
Lakehaven II............. 5/97 Carol Stream, IL 1985 348 2,680 15,189 604
Landmark................. 5/98 Albuquerque, NM 1965 101 780 4,455 224
Las Brisas............... 12/95 San Antonio, TX 1983 176 1,100 5,454 (2,476)
Las Brisas............... 7/94 Casa Grande, AZ 1985 132 573 3,260 3,127
Legend Oaks/The
Woodlands............... 5/98 Tampa, FL 1983 416 2,723 12,243 686
Lexington................ 7/94 San Antonio, TX 1981 72 311 1,764 125
Los Arboles.............. 9/97 Chandler, AZ 1985 232 1,662 9,418 449
Madera Point............. 5/98 Phoenix, AZ 1986 256 924 12,733 420
Meadow Creek............. 4/85 Boulder, CO 1972 332 1,387 10,027 919
Meadows.................. 12/96 Austin, TX 1983 100 417 4,563 673
Mesa Ridge............... 5/98 San Antonio, TX 1986 200 1,159 6,594 371
Mills.................... 5/98 Houston, TX 1979 708 7,075 18,750 774
Montecito................ 7/94 Austin, TX 1985 268 1,268 7,194 1,809
Morton Towers............ 9/97 Miami Beach, FL 1960 1,277 8,736 49,774 21,136
Mountainview............. 5/98 Colorado Springs, CO 1985 252 1,935 14,647 613
Newberry Park............ 5/97 Chicago, IL 1985 84 181 1,027 (3)
Newport.................. 7/94 Avondale, AZ 1986 204 800 4,554 508
Oak Falls................ 11/96 Spring, TX 1983 144 514 3,585 398
Ocean Oaks Apartments.... 5/98 Port Orange, FL 1988 296 2,694 11,157 443
Old Farm................. 12/98 Lexington, KY 1985 330 1,893 10,725 43
Olmos Club............... 10/97 San Antonio, TX 1983 134 322 1,825 120
Olympiad................. 11/94 Montgomery, AL 1986 176 1,046 5,958 558
Orchidtree............... 10/97 Scottsdale, AZ 1971 278 2,314 13,112 303
Palencia................. 5/98 Tampa, FL 1985 420 3,448 14,666 737
Paradise Palms........... 7/94 Phoenix, AZ 1970 130 647 3,684 469
Park @ Cedar Lawn........ 11/96 Galveston, TX 1985 192 769 5,073 358
Park Colony.............. 5/98 Norcross, GA 1984 352 3,335 17,990 491
Parliament Bend.......... 7/94 San Antonio, TX 1980 232 765 4,342 662
Peachtree Park........... 1/96 Atlanta, GA 1962/1995 295 4,681 12,957 1,898
Penn Square.............. 12/94 Albuquerque, NM 1982 210 1,128 6,478 592
Peppermill Place......... 11/96 Houston, TX 1983 224 406 3,957 441
Pine Creek............... 10/97 Clio, MI 1978 233 852 4,830 318
Pine Shadows............. 5/98 Phoenix, AZ 1983 272 2,490 11,143 402
Pinebrook................ 10/98 Jacksonville, FL 1974 208 856 4,854 6
Pleasant Ridge........... 11/94 Little Rock, AR 1982 200 1,660 9,464 811
Pleasant Valley Point.... 11/94 Little Rock, AR 1985 112 907 5,069 890
Point West............... 5/97 Lenexa, KS 1985 172 979 5,548 (16)
Polo Park................ 10/97 Midland, TX 1983 184 800 4,532 325
Prairie Hills............ 7/94 Albuquerque, NM 1985 360 1,680 9,633 589
Pride Gardens............ 5/97 Flora, MS 1975 76 265 1,502 169
Prime Crest.............. 5/98 Austin, TX 1973 148 1,160 3,508 209
Privado Park............. 5/98 Phoenix, AZ 1984 352 2,054 15,236 389
Quail Ridge.............. 5/98 Tucson, AZ 1974 253 2,015 8,559 400
Quailtree................ 10/97 Phoenix, AZ 1978 184 659 3,735 247
Raintree................. 10/98 Pensacola, FL 1971 168 417 2,359 91
Rancho Sunset............ 3/98 Escondido, CA 1985 344 3,103 16,755 933
Randol Crossing.......... 12/96 Fort Worth, TX 1984 160 782 5,742 670
Redhill Plaza............ 6/97 Tustin, CA 1971 392 1,515 3,735 2
Ridgecrest............... 12/96 Denton, TX 1983 152 612 5,642 (1,125)

<CAPTION>
DECEMBER 31, 1998
-----------------------------------------------------------------------------------
TOTAL COST
BUILDINGS NET OF
AND ACCUMULATED ACCUMULATED
PROPERTY NAME LAND IMPROVEMENTS TOTAL DEPRECIATION DEPRECIATION ENCUMBRANCES
- ------------- ----------- ------------ --------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Lakehaven I.............. 1,071 6,367 7,438 404 7,034 --(1)(2)
Lakehaven II............. 2,680 15,793 18,473 1,013 17,460 --(1)(2)
Landmark................. 780 4,679 5,459 148 5,311 --(2)
Las Brisas............... 573 3,505 4,078 657 3,421 --(3)
Las Brisas............... 1,100 5,860 6,960 797 6,163 3,302
Legend Oaks/The
Woodlands............... 2,723 12,929 15,652 383 15,269 --(2)
Lexington................ 311 1,889 2,200 362 1,838 1,038
Los Arboles.............. 1,662 9,867 11,529 491 11,038 --(3)
Madera Point............. 924 13,153 14,077 348 13,729 8,067
Meadow Creek............. 1,398 10,935 12,333 4,089 8,244 7,716
Meadows.................. 417 5,236 5,653 1,372 4,281 2,062
Mesa Ridge............... 1,159 6,965 8,124 241 7,883 5,100
Mills.................... 7,075 19,524 26,599 589 26,010 14,575
Montecito................ 1,268 9,003 10,271 1,542 8,729 4,895
Morton Towers............ 13,182 66,464 79,646 2,632 77,014 12,913
Mountainview............. 1,935 15,260 17,195 449 16,746 --(2)
Newberry Park............ 158 1,047 1,205 82 1,123 8,495
Newport.................. 800 5,062 5,862 1,002 4,860 2,531
Oak Falls................ 514 3,983 4,497 1,181 3,316 2,702
Ocean Oaks Apartments.... 2,694 11,600 14,294 317 13,977 10,295
Old Farm................. 1,893 10,768 12,661 47 12,614 9,919
Olmos Club............... 322 1,945 2,267 82 2,185 1,242
Olympiad................. 1,046 6,516 7,562 1,146 6,416 5,158
Orchidtree............... 2,314 13,415 15,729 677 15,052 7,227
Palencia................. 3,448 15,403 18,851 564 18,287 --(2)
Paradise Palms........... 647 4,153 4,800 782 4,018 2,273
Park @ Cedar Lawn........ 769 5,431 6,200 1,396 4,806 2,537
Park Colony.............. 3,335 18,481 21,816 446 21,370 --(2)
Parliament Bend.......... 765 5,004 5,769 963 4,807 --(3)
Peachtree Park........... 4,683 14,853 19,536 1,636 17,900 9,396
Penn Square.............. 1,128 7,070 8,198 1,240 6,958 4,189
Peppermill Place......... 406 4,398 4,804 1,196 3,608 3,541
Pine Creek............... 852 5,148 6,000 217 5,783 2,380
Pine Shadows............. 2,490 11,545 14,035 321 13,714 --(2)
Pinebrook................ 857 4,859 5,716 58 5,658 3,626
Pleasant Ridge........... 1,661 10,274 11,935 1,799 10,136 6,700
Pleasant Valley Point.... 907 5,959 6,866 1,030 5,836 3,370
Point West............... 979 5,532 6,511 367 6,144 5,580
Polo Park................ 800 4,857 5,657 226 5,431 2,268
Prairie Hills............ 1,680 10,222 11,902 1,938 9,964 7,134
Pride Gardens............ 265 1,671 1,936 121 1,815 890
Prime Crest.............. 1,160 3,717 4,877 134 4,743 2,400
Privado Park............. 2,054 15,625 17,679 438 17,241 9,200
Quail Ridge.............. 2,015 8,959 10,974 262 10,712 6,400
Quailtree................ 659 3,982 4,641 195 4,446 2,198
Raintree................. 417 2,450 2,867 36 2,831 2,640
Rancho Sunset............ 3,103 17,688 20,791 502 20,289 13,787
Randol Crossing.......... 782 6,412 7,194 1,988 5,206 2,427
Redhill Plaza............ 1,515 3,737 5,252 279 4,973 --
Ridgecrest............... 612 4,517 5,129 2,037 3,092 2,451
</TABLE>

F-36
<PAGE> 76
<TABLE>
<CAPTION>

INITIAL COST COST
---------------------- CAPITALIZED
BUILDINGS SUBSEQUENT
DATE YEAR NUMBER AND TO
PROPERTY NAME ACQUIRED LOCATION BUILT OF UNITS LAND IMPROVEMENTS ACQUISITION
- ------------- -------- --------------------- --------- -------- ------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Rio Cancion.............. 10/98 Tucson, AZ 1983 379 2,832 16,090 146
Rivercrest............... 10/97 Tucson, AZ 1984 310 751 4,253 139
Riverside................ 7/94 Littleton, CO 1987 248 1,553 8,829 938
Riverwalk................ 12/95 Little Rock, AR 1988 262 1,075 9,295 520
Royal Crest.............. 5/98 Austin, TX 1973 204 1,709 6,176 302
Royal Gardens............ 10/98 Hemet, CA 1987 137 521 2,817 141
Royal Palms.............. 7/94 Mesa, AZ 1985 152 832 4,731 244
San Marina............... 3/98 Phoenix, AZ 1986 399 1,926 10,954 267
Sand Castles............. 10/97 League City, TX 1987 136 978 5,541 267
Sand Pebble.............. 10/97 El Paso, TX 1983 208 861 4,879 309
Sandalwood............... 5/98 Houston, TX 1979 352 2,142 7,394 289
Sandpiper Cove........... 5/97 Boynton Beach, FL 1987 416 4,006 22,701 2,432
Sawgrass................. 7/97 Orlando, FL 1986 208 1,443 8,158 477
Seaside Point............ 11/96 Galveston, TX 1985 102 295 2,994 406
Seasons.................. 10/95 San Antonio, TX 1976 280 974 5,749 728
Shadetree................ 10/97 Tempe, AZ 1965 123 591 3,349 376
Shadow Creek
Apartments.............. 5/98 Phoenix, AZ 1984 266 2,599 11,085 314
Shadow Lake.............. 10/97 Greensboro, NC 1988 136 1,054 5,972 336
Shallow Creek............ 5/98 San Antonio, TX 1982 208 1,390 6,678 301
Signature Point.......... 11/96 League City, TX 1994 304 2,160 13,627 (431)
Silktree................. 10/97 Phoenix, AZ 1979 86 421 2,383 145
Silver Ridge............. 10/98 Maplewood, MN 1986 186 650 3,677 91
Snug Harbor.............. 12/95 Las Vegas, NV 1990 64 750 2,966 300
Somerset Village......... 5/96 West Valley City, UT 1985 486 4,375 17,600 1,035
South Willow............. 7/94 West Jordan, UT 1987 440 2,218 12,612 1,085
Southgate Village........ 10/98 Bedford Heights, OH 1987 152 384 2,169 91
Southridge............... 12/96 Greenville, TX 1984 160 565 5,787 700
Spectrum Pointe.......... 7/94 Marietta, GA 1984 196 1,029 5,903 578
Stirling Court........... 11/96 Houston, TX 1984 228 946 5,958 396
Stonebrook............... 6/97 Sanford, FL 1991 244 1,583 9,046 418
Stoney Brook............. 11/96 Houston, TX 1972 113 579 3,871 529
Stonybrook............... 5/98 Tucson, AZ 1983 411 2,503 11,565 554
Summerchase.............. 5/97 Van Buren, AR 1974 72 170 962 145
Summit Creek............. 5/98 Austin, TX 1985 164 1,331 5,007 236
Sun Grove................ 7/94 Peoria, AZ 1986 86 659 3,749 161
Sun Katcher.............. 12/95 Jacksonville, FL 1972 360 578 3,440 5,830
Sun Lake................. 5/98 Lake Mary, FL 1986 600 5,574 24,277 1,076
Sunbury Downs............ 11/96 Houston, TX 1982 240 565 4,380 297
Sunchase Clearwater...... 11/94 Clearwater, FL 1985 461 2,177 19,641 1,597
Sunchase East............ 11/94 Orlando, FL 1985 296 927 8,361 857
Sunchase North........... 11/94 Orlando, FL 1985 324 1,013 9,142 974
Sunchase Tampa........... 11/94 Tampa, FL 1985 216 757 6,831 782
Sundown Village.......... 3/98 Tucson, AZ 1984/1994 330 2,214 12,582 161
Sunlake.................. 9/98 Brandon, FL 1986 88 189 1,086 3,126
Sunset Village........... 3/98 Oceanside, CA 1987 114 1,128 6,392 44
Surrey Oaks.............. 10/97 Bedford, TX 1983 152 628 3,560 265
Swiss Village............ 11/96 Houston, TX 1972 360 1,011 11,310 (625)
Tall Timbers............. 10/97 Houston, TX 1982 256 1,238 7,016 349
Tara Bridge.............. 5/97 Jonesboro, GA 1988 220 1,610 9,124 335
Tatum Gardens............ 5/98 Phoenix, AZ 1985 128 1,229 5,326 282
The Bluffs............... 12/98 Laffayette, IN 1982 181 979 5,549 0

<CAPTION>
DECEMBER 31, 1998
-----------------------------------------------------------------------------------
TOTAL COST
BUILDINGS NET OF
AND ACCUMULATED ACCUMULATED
PROPERTY NAME LAND IMPROVEMENTS TOTAL DEPRECIATION DEPRECIATION ENCUMBRANCES
- ------------- ----------- ------------ --------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Rio Cancion.............. 2,832 16,236 19,068 551 18,517 12,990
Rivercrest............... 751 4,392 5,143 220 4,923 2,801
Riverside................ 1,554 9,766 11,320 1,850 9,470 5,884
Riverwalk................ 1,075 9,815 10,890 1,269 9,621 5,555
Royal Crest.............. 1,709 6,478 8,187 217 7,970 3,400
Royal Gardens............ 521 2,958 3,479 28 3,451 2,414
Royal Palms.............. 832 4,975 5,807 939 4,868 3,463
San Marina............... 1,926 11,221 13,147 375 12,772 7,912
Sand Castles............. 978 5,808 6,786 265 6,521 3,081
Sand Pebble.............. 861 5,188 6,049 243 5,806 2,690
Sandalwood............... 2,142 7,683 9,825 277 9,548 4,700
Sandpiper Cove........... 4,006 25,133 29,139 1,774 27,365 13,376
Sawgrass................. 1,443 8,635 10,078 504 9,574 4,778
Seaside Point............ 295 3,400 3,695 873 2,822 2,075
Seasons.................. 982 6,469 7,451 866 6,585 4,472
Shadetree................ 591 3,725 4,316 176 4,140 2,048
Shadow Creek
Apartments.............. 2,599 11,399 13,998 329 13,669 6,965
Shadow Lake.............. 1,054 6,308 7,362 268 7,094 3,216
Shallow Creek............ 1,390 6,979 8,369 204 8,165 4,600
Signature Point.......... 2,160 13,196 15,356 2,122 13,234 7,306
Silktree................. 421 2,528 2,949 125 2,824 1,547
Silver Ridge............. 650 3,768 4,418 55 4,363 4,525
Snug Harbor.............. 751 3,26 4,016 463 3,553 2,028
Somerset Village......... 4,375 18,635 23,010 1,866 21,144 8,311
South Willow............. 2,218 13,697 15,915 2,585 13,330 8,149
Southgate Village........ 384 2,260 2,644 33 2,611 2,520
Southridge............... 565 6,487 7,052 2,374 4,678 2,083
Spectrum Pointe.......... 1,029 6,481 7,510 1,145 6,365 4,238
Stirling Court........... 946 6,354 7,300 3,047 4,253 3,546
Stonebrook............... 1,583 9,465 11,048 632 10,416 5,395
Stoney Brook............. 679 4,300 4,979 960 4,019 --
Stonybrook............... 2,503 12,119 14,622 370 14,252 5,598(1)
Summerchase.............. 170 1,107 1,277 77 1,200 670
Summit Creek............. 1,331 5,243 6,574 181 6,393 3,524
Sun Grove................ 659 3,910 4,569 756 3,813 --(3)
Sun Katcher.............. 578 9,270 9,848 702 9,146 --(2)
Sun Lake................. 5,574 25,353 30,927 665 30,262 15,102(2)
Sunbury Downs............ 565 4,677 5,242 1,186 4,056 2,433
Sunchase Clearwater...... 2,177 21,238 23,415 2,781 20,634 17,074
Sunchase East............ 927 9,218 10,145 1,592 8,553 8,960
Sunchase North........... 1,013 10,116 11,129 1,715 9,414 12,019
Sunchase Tampa........... 757 7,613 8,370 1,319 7,051 7,184
Sundown Village.......... 2,214 12,743 14,957 431 14,526 8,464
Sunlake.................. 189 4,212 4,401 329 4,072 --
Sunset Village........... 1,128 6,436 7,564 182 7,382 5,549
Surrey Oaks.............. 628 3,825 4,453 177 4,276 2,290
Swiss Village............ 1,011 10,685 11,696 4,343 7,353 4,490
Tall Timbers............. 1,238 7,365 8,603 336 8,267 4,080
Tara Bridge.............. 1,610 9,459 11,069 747 10,322 6,800
Tatum Gardens............ 1,229 5,608 6,837 170 6,667 3,426
The Bluffs............... 979 5,549 6,528 -- 6,528 --
</TABLE>

F-37
<PAGE> 77
<TABLE>
<CAPTION>

INITIAL COST COST
---------------------- CAPITALIZED
BUILDINGS SUBSEQUENT
DATE YEAR NUMBER AND TO
PROPERTY NAME ACQUIRED LOCATION BUILT OF UNITS LAND IMPROVEMENTS ACQUISITION
- ------------- -------- --------------------- --------- -------- ------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
The Bradford............. 10/97 Midland, TX 1982 264 705 3,996 (789)
The Breakers............. 10/98 Daytona Beach, FL 1985 258 1,008 5,710 14
The Falls of Bells
Ferry................... 5/98 Marietta, GA 1987 720 8,270 34,528 1,125
The Hills................ 10/97 Austin, TX 1983 329 1,367 7,747 235
The Park................. 10/98 Melbourne, FL 1983 120 719 4,072 8
The Pines................ 10/97 Palm Bay, FL 1984 216 601 3,406 16
The Stratford............ 5/98 San Antonio, TX 1979 269 1,920 10,567 573
Tierra Bonita............ 5/98 Tucson, AZ 1986 410 2,081 9,489 747
Timbermill............... 10/95 San Antonio, TX 1982 296 778 4,674 667
Timbertree............... 10/97 Phoenix, AZ 1980 387 2,334 13,229 459
Township at Highlands.... 11/96 Littleton, CO 1986 119 1,058 11,166 2,910
Trails of Ashford........ 5/98 Houston, TX 1979 514 3,237 14,123 485
Twinbridge............... 10/97 Tucson, AZ 1982 104 310 1,757 76
University
Center -- Phase I....... 10/98 Friedly, MN 1987 -- 139 780 91
University
Center -- Phase IV...... 10/98 Friedly, MN 1987 -- 225 1,265 91
Victoria Station......... 6/98 Victoria, TX 1997 224 425 3946 1,330
Villa La Paz............. 6/98 Sun City, CA 1990 96 573 3,096 189
Villa Ladera............. 1/96 Albuquerque, NM 1985 280 1,765 10,013 975
Village Creek at
Brookhill............... 7/94 Westminster, CO 1987 324 2,446 13,901 959
Village Crossing......... 5/98 W. Palm Beach, FL 1986 289 2,259 8,251 436
Village of Pennbrook..... 10/98 Levitown, PA 1970 722 5,533 31,345 91
Vista Ventana
Apartments.............. 5/98 Phoenix, AZ 1982 275 2,196 10,327 417
Walnut Springs........... 12/96 San Antonio, TX 1983 224 851 8,076 448
Waterford................ 11/96 Houston, TX 1984 312 533 5,693 781
Waterways Village........ 6/97 Aventura, FL 1991 180 4,504 11,702 314
Weatherly................ 10/98 Stone Mountain, GA 1984 274 1,275 6,887 350
Weslayan I............... 10/96 Houston, TX 1983 25 130 376 (10)
West 135th Street........ 8/98 New York, NY 1979 242 258 9660 3,246
West Way Village......... 5/98 Houston, TX 1979 276 3,353 6,816 425
Whispering Pines......... 10/98 Madison, WI 1986 186 719 4,046 91
Wickertree............... 10/97 Phoenix, AZ 1983 226 1,225 6,944 189
Wildflower............... 10/97 Midland, TX 1982 264 705 3,996 635
Williams Cove............ 7/94 Irving, TX 1984 260 1,227 6,972 508
Williamsburg............. 5/98 Rolling Meadows, IL 1985 379 3,103 14,471 986
Windridge................ 5/98 San Antonio, TX 1983 286 1,374 8,228 340
Windsor Landing.......... 10/97 Morrow, GA 1991 200 1,641 9,298 158
Windward at the
Villages................ 10/97 W. Palm Beach, FL 1988 196 1,595 9,037 314
Woodhill Associates...... 12/96 Denton, TX 1985 352 1,578 13,199 1,191
Woodhollow............... 10/97 Austin, TX 1974 108 658 3,728 163
Woodland Ridge........... 12/96 Irving, TX 1984 130 1,021 4,507 459
Woodlands/Odessa......... 7/94 Odessa, TX 1982 240 676 3,835 677
Woodlands/Tyler.......... 7/94 Tyler, TX 1984 256 1,029 5,845 545
Yorktree................. 10/97 Carolstream, IL 1972 293 1,968 11,151 712
------ ------- --------- -------
63,086 423,098 2,188,020 186,481
------ ------- --------- -------
Other Land and Assets.... -- 3,860 1,139 --
------ ------- --------- -------
63,086 426,958 2,189,159 186,481
====== ======= ========= =======

<CAPTION>
DECEMBER 31, 1998
-----------------------------------------------------------------------------------
TOTAL COST
BUILDINGS NET OF
AND ACCUMULATED ACCUMULATED
PROPERTY NAME LAND IMPROVEMENTS TOTAL DEPRECIATION DEPRECIATION ENCUMBRANCES
- ------------- ----------- ------------ --------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
The Bradford............. 519 3,393 3,912 147 3,765 1,631
The Breakers............. 1,008 5,724 6,732 40 6,692 3,773
The Falls of Bells
Ferry................... 8,270 35,653 43,923 1,023 42,900 27,685
The Hills................ 1,367 7,982 9,349 348 9,001 8,144
The Park................. 719 4,080 4,799 58 4,741 2,728
The Pines................ 601 3,422 4,023 49 3,974 2,226
The Stratford............ 1,920 11,140 13,060 364 12,696 5,945
Tierra Bonita............ 2,081 10,236 12,317 325 11,992 6,000
Timbermill............... 778 5,341 6,119 767 5,352 --(2)
Timbertree............... 2,334 13,688 16,022 685 15,337 7,843
Township at Highlands.... 1,059 14,075 15,134 2,520 12,614 9,500
Trails of Ashford........ 3,237 14,608 17,845 463 17,382 9,050
Twinbridge............... 310 1,833 2,143 91 2,052 1,131
University
Center -- Phase I....... 139 871 1,010 13 997 --(4)
University
Center -- Phase IV...... 225 1,356 1,581 20 1,561 --(4)
Victoria Station......... 425 5,276 5,701 437 5,264 3,339
Villa La Paz............. 573 3,285 3,858 108 3,750 --(2)
Villa Ladera............. 1,765 10,988 12,753 1,368 11,385 5,502
Village Creek at
Brookhill............... 2,446 14,860 17,306 2,631 14,675 --(3)
Village Crossing......... 2,259 8,687 10,946 230 10,716 7,000
Village of Pennbrook..... 5,533 31,436 36,969 452 36,517 19,300
Vista Ventana
Apartments.............. 2,196 10,744 12,940 305 12,635 6,400
Walnut Springs........... 851 8,524 9,375 2,478 6,897 4,811
Waterford................ 533 6,474 7,007 1,759 5,248 3,973
Waterways Village........ 4,504 12,016 16,520 789 15,731 7,771
Weatherly................ 1,275 7,237 8,512 84 8,428 4,642
Weslayan I............... 130 366 496 184 312 --
West 135th Street........ 259 12,905 13,164 895 12,269 1,054
West Way Village......... 3,353 7,241 10,594 317 10,277 4,846
Whispering Pines......... 719 4,137 4,856 61 4,795 --
Wickertree............... 1,225 7,133 8,358 362 7,996 4,123
Wildflower............... 705 4,631 5,336 199 5,137 2,065
Williams Cove............ 1,227 7,480 8,707 1,459 7,248 3,822
Williamsburg............. 3,103 15,457 18,560 446 18,114 12,535
Windridge................ 1,374 8,568 9,942 293 9,649 6,270
Windsor Landing.......... 1,641 9,456 11,097 418 10,679 5,421
Windward at the
Villages................ 1,595 9,351 10,946 467 10,479 4,615
Woodhill Associates...... 1,578 14,390 15,968 4,679 11,289 5,770
Woodhollow............... 658 3,891 4,549 167 4,382 2,082
Woodland Ridge........... 1,021 4,966 5,987 1,628 4,359 2,060
Woodlands/Odessa......... 676 4,512 5,188 806 4,382 --(2)
Woodlands/Tyler.......... 1,029 6,390 7,419 1,224 6,195 4,156
Yorktree................. 1,968 11,863 13,831 501 13,330 6,604
----------- --------- --------- ------- --------- ---------
409,722 2,387,877 2,797,599 228,880 2,568,719 1,300,365
----------- --------- --------- ------- --------- ---------
Other Land and Assets.... 3,855 1,144 4,999 -- 4,999
----------- --------- --------- ------- --------- ---------
413,577 2,389,021 2,802,598 228,880 2,573,718 1,300,365
=========== ========= ========= ======= ========= =========
</TABLE>

F-38
<PAGE> 78

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

(1) Debt is owned by AIMCO and is therefore eliminated in consolidation.

(2) Pledged as security under one of the Company's credit facilities.

(3) Pledged as additional collateral for secured tax-exempt financing.

(4) Commercial Property.

F-39
<PAGE> 79

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

REAL ESTATE AND ACCUMULATED DEPRECIATION
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
(IN THOUSANDS)

<TABLE>
<CAPTION>
1998 1997 1996
---------- ---------- --------
<S> <C> <C> <C>
REAL ESTATE
Balance at beginning of year............................ $1,657,207 $ 865,222 $477,162
Additions during the year:
Real estate acquisitions............................. 1,116,643 786,571 388,574
Additions............................................ 80,368 26,808 17,993
Sales/transfers to held for sale..................... (51,620) (21,394) (18,507)
---------- ---------- --------
Balance at end of year.................................. $2,802,598 $1,657,207 $865,222
========== ========== ========
ACCUMULATED DEPRECIATION
Balance at beginning of year............................ $ 153,285 $ 120,077 $ 28,737
Additions during the year:
Depreciation......................................... 84,635 37,741 19,556
Additions............................................ -- -- 73,189
Sales/transfers to held for sale..................... (9,040) (4,533) (1,405)
---------- ---------- --------
Balance at end of year.................................. $ 228,880 $ 153,285 $120,077
========== ========== ========
</TABLE>

F-40
<PAGE> 80

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

SCHEDULE IV -- MORTGAGE LOANS ON REAL ESTATE
DECEMBER 31, 1998
(IN THOUSANDS)

<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
CARRYING OF LOANS SUBJECT
FACE AMOUNT OF TO OR DELINQUENT
INTEREST MATURITY PAYMENT PRIOR AMOUNT MORTGAGE PRINCIPAL OR
DESCRIPTION RATE DATE TERMS LIENS OF MORTGAGE (3)(4) INTEREST
- ----------- -------- -------- -------- -------- ----------- --------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
FIRST TRUST DEEDS
Golf Course
Princeton Meadows, New Jersey........... 12.50% Sep-01 (1) $ $ 1,567 $ 1,585(5) $ --
Hotels
Pensacola, Florida...................... 11.25% Nov-02 (8)(15) -- 1,652 1,655(5) --
Pensacola, Florida...................... 11.00% Nov-02 (9)(15) -- 1,297 1,287 --
Jacksonville, Florida................... 11.00% Nov-02 (10)(15) -- 2,274 2,278(5) --
Industrial
Aiken, South Carolina -- Warehouse...... 8.00% Dec-07 (20)(16) -- 531 215 --
Cleveland, Ohio -- Warehouse............ 6.25% Oct-08 (11)(16) -- 1,700 1,705(5) --
Houston, Texas -- Office/Warehouse...... 8.00% Dec-07 (1)(16) -- 1,301 1,145 --
Indianapolis,
Indiana -- Office/Showroom............ 7.30% Oct-08 (12)(16) -- 275 217 --
Indianapolis, Indiana -- Warehouse...... 7.71% Jun-08 (1)(16) -- 5,500 4,841 --
Jackson, Tennessee -- Warehouse......... 10.50% Dec-07 (1)(16) -- 2,185 1,781 --
Memphis, Tennessee -- Warehouse......... 8.00% Jan-08 (1)(16) -- 1,000 881 --
Manufactured Home Parks
Cheyenne, Wyoming....................... 9.07% Dec-03 (1)(17) -- 1,900 1,673 --
Denton and Tyler, Texas................. 8.90% Dec-03 (1)(17) -- 5,000 4,407 --
Retail Stores
Des Moines and Cedar Rapids, Iowa....... 9.00% Dec-03 (21) -- 3,500 3,491 --
-------- ------- ------- ------
TOTAL FIRST TRUST DEEDS........... $ -- $29,682 $27,161 $ --
======== ======= ======= ======
SECOND TRUST DEEDS
Apartments
South Bend, Indiana..................... 12.50% Jun-95 (2) $ 3,970 $ 1,350 $ 675 $ 675
Huntsville, Alabama..................... 12.50% Dec-00 (1) 9,401 1,570 1,908(5) --
Duplexes
Santa Monica and Pacific Palisades,
California............................ 12.00% Sep-98 (1) 1,800 455 383 383(6)
-------- ------- ------- ------
TOTAL SECOND TRUST DEEDS.......... $ 15,171 $ 3,375 $ 2,966 $1,058
======== ======= ======= ======
THIRD TRUST DEEDS
Apartment
Plainsboro, New Jersey.................. 11.25% Jan-02 (13) $ 30,399 $ 875 $ 875 --
-------- ------- ------- ------
TOTAL THIRD TRUST DEEDS........... $ 30,399 $ 875 $ 875 $ --
======== ======= ======= ======
PROMISSORY NOTES RECEIVABLE
J. Schultz, an Individual................ 8.00% May-00 (1) $ -- $ 75 $ 76(5) $ --
Angeles Partners XIV, California Limited
Partnership............................. 12.00% Mar-02 (18) -- 433 433 433
Fox Crest Apartments, Waukegan,
Illinois................................ 12.50% Mar-03 (18) 6,283 4,764 -- 4,764
Warner Center............................ 5.70% Jan-15 (19) 134,609 1,858 2,265(5) --
General Reserve.......................... -- (68) (68) --
-------- ------- ------- ------
TOTAL PROMISSORY NOTES
RECEIVABLE....................... $140,892 $ 7,062 $ 2,706 $5,197
======== ======= ======= ======
</TABLE>

<TABLE>
<CAPTION>
FACE
AMOUNT CARRYING PRINCIPAL AMOUNT OF LOANS
PRIOR OF AMOUNT OF SUBJECT TO OR DELINQUENT
DESCRIPTION LIENS MORTGAGE MORTGAGE(3)(4) PRINCIPAL OR INTEREST
- ----------- -------- -------- -------------- -------------------------
<S> <C> <C> <C> <C>
SUMMARY
TOTAL FIRST TRUST DEEDS.......................... $ -- $29,682 $27,161 $ --
TOTAL SECOND TRUST DEEDS......................... 15,171 3,375 2,966 1,058
TOTAL THIRD TRUST DEEDS.......................... 30,399 875 875 --
TOTAL PROMISSORY NOTES RECEIVABLE................ 140,892 7,062 2,706 5,197
-------- ------- ------- ------
TOTAL............................................ $186,462 $40,994 $33,708 $6,255
======== ======= ======= ======
</TABLE>

F-41
<PAGE> 81

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

(1) Note requires periodic interest only payments through maturity, when the
principal balance is payable in full.

(2) The note matured in June of 1995. The borrower is currently in default and
is not making the required interest only payments.

(3) Reconciliation of notes receivable:

<TABLE>
<S> <C>
Balance at October 1, 1998.................................. $29,405
Additions:
New Loans(7).............................................. 3,558
Accrued Interest.......................................... 964
Deductions:
Premium Amortization...................................... (25)
Principal Collections..................................... (194)
-------
Balance at December 31, 1998................................ $33,708
=======
</TABLE>

(4) The carrying amount for Federal income tax purposes is approximately
$39,216.

(5) The carrying amount of the mortgage is greater than the face amount due to
the inclusion of accrued interest.

(6) Nolana Apartments made interest only payments through December 31, 1998.

(7) Amount includes Cleveland, Ohio -- Warehouse for $1,700, and Warner Center
for $1,858.

(8) Monthly principal and interest payments of $16 are required through the
maturity date at which time the balance of $1,617 is payable in full.

(9) Monthly principal and interest payments of $12 are required through the
maturity date at which time the balance of $1,268 is payable in full.

(10) Monthly principal and interest payments of $22 are required through the
maturity date at which time the balance of $2,222 is payable in full.

(11) Monthly principal and interest payments of $12 are required through the
maturity date at which time the balance of $1,119 is payable in full.

(12) Monthly principal and interest payments of $2 are required through the
maturity date at which time the balance of $188 is payable in full.

(13) An initial interest payment of $3 is required. Thereafter, monthly
principal and interest payments of $8 are required through the maturity
date at which time the balance of $860 is payable in full.

(14) The first mortgage loans on these properties are not held by the Company.
Accordingly, the amounts of the prior liens at December 31, 1998 are
estimated.

(15) A prepayment penalty ranging from 1% to 3% of the outstanding principal
balance will be assessed if the loan is prepaid prior to the maturity date.

(16) A prepayment penalty ranging from 1% to 3% of the outstanding principal
balance will be assessed if the loan is prepaid four or more years prior to
the maturity date.

(17) A prepayment penalty ranging from 1% to 3% of the outstanding principal
balance will be assessed if the loan is prepaid prior to one year before
the maturity date.

(18) Annual principal and interest payments based upon available Net Cash Flow,
as defined, are required throughout the maturity date at which time all
remaining unpaid accrued interest and principal are payable in full.

(19) Semi-annual principal and interest payments based upon available Net Cash
Flow, as defined, are required throughout the maturity date at which time
all remaining unpaid accrued interest and principal are payable in full.

(20) Monthly principal and interest payments of $6 are required through the
maturity date.

(21) Monthly principal and interest payments of $72 are required through the
maturity date.

F-42
<PAGE> 82

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
10.6 -- Payment Guaranty of Non-Preferred Stock Subsidiaries,
dated as of October 1, 1998, by Apartment Investment and
Management Company, AIMCO Holdings QRS, Inc., AIMCO/OTC
QRS, Inc., AIMCO Holdings, L.P., AIMCO-GP, Inc.,
AIMCO-LP, Inc., AIMCO Properties Finance Corp., AIMCO
Somerset, Inc., Ambassador II, L.P., Ambassador X, L.P.,
Ambassador IV, Inc., Ambassador V, Inc., Ambassador
Florida Partners Inc. and A.J. Two, Inc. (Exhibit 10.5 to
AIMCO's Quarterly Report on Form 10-Q for the quarterly
period ending September 30, 1998, is incorporated herein
by this reference)
10.7 -- Payment Guaranty of Preferred Stock Subsidiaries, dated
as of October 1, 1998, by Property Asset Management
Services, Inc., Property Asset Management Services, L.P.,
NHP Management Company and Property Asset Management
Services-California, L.L.C. (Exhibit 10.6 to AIMCO's
Quarterly Report on Form 10-Q for the quarterly period
ending September 30, 1998, is incorporated herein by this
reference)
10.8 -- Payment Guaranty of Non-Preferred Stock Subsidiaries,
dated as of October 1, 1998, by CPF XIV/St. Charleston,
Inc., CPF XIV/Torrey Pines, Inc., CPF XIV/ Sun River,
Inc., CPF XIV/Lakeside Place, Inc., ConCap CCP/IV
Stratford Place Properties, Inc., ConCap CCP/IV River's
Edge Properties, Inc., PRA, Inc. and National Property
Investors, Inc. (Exhibit 10.7 to AIMCO's Quarterly Report
on Form 10-Q for the quarterly period ending September
30, 1998, is incorporated herein by this reference)
10.9 -- Third Amended and Restated Agreement of Limited
Partnership of AIMCO Properties, L.P., dated as of July
29, 1994 as amended and restated as of October 1, 1998
(Exhibit 10.8 to AIMCO's Quarterly Report on Form 10-Q
for the quarterly period ending September 30, 1998, is
incorporated herein by this reference)
10.10 -- First Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of November 6, 1998 (Exhibit 10.9 to
AIMCO's Quarterly Report on Form 10-Q for the quarterly
period ending September 30, 1998, is incorporated herein
by this reference)
10.11 -- Second Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of December 30, 1998 (Exhibit 10.1 to
Amendment No. 1 to AIMCO's Current Report on Form 8-K/A,
filed February 11, 1999, is incorporated herein by this
reference)
10.12 -- Third Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of February 18, 1999
10.13 -- Credit Agreement dated December 30, 1997, by and among
Insignia Properties, L.P., Lehman Commercial Paper Inc.,
as lending agent, First Union National Bank, as
administrative agent, and the lenders from time to party
thereto (Exhibit 10.8 to Form S-4 of Insignia Properties
Trust, filed May 28, 1998, is incorporated herein by this
reference)
10.14 -- Unconditional Guaranty, dated as of December 30, 1997,
made by Insignia Properties Trust in favor of First Union
National Bank (Exhibit 10.9 to Form S-4 of Insignia
Properties Trust, filed May 28, 1998, is incorporated
herein by this reference_)
10.15 -- Shareholders Agreement, dated October 1, 1998, by and
among Apartment Investment and Management Company, Andrew
L. Farkas, James A. Aston and Frank M. Garrison (Exhibit
10.4 to AIMCO's Schedule 13D filed on October 15, 1998,
is incorporated herein by this reference)
10.16 -- $300,000,000 Interim Term Loan Agreement, dated as of
October 1, 1998, among Apartment Investment and
Management Company, AIMCO Properties, L.P., the several
lenders from time to time parties thereto, Lehman
Brothers, Inc., and Lehman Commercial Paper Inc.
10.17 -- Subsidiaries Guarantee, dated as October 1, 1998, made by
each of the entities that are signatories thereto in
favor of Lehman Commercial Paper Inc. as administrative
agent for the several banks and other financial
institutions or entities from time to time parties to the
Interim Term Loan Agreement
</TABLE>
<PAGE> 84

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

(1) Schedules and supplemental materials to the exhibits have been omitted but
will be provided to the Securities and Exchange Commission upon request.

* Management contract or compensatory plan or arrangement.

<PAGE> 1
EXHIBIT 3.1

APARTMENT INVESTMENT AND MANAGEMENT COMPANY
ARTICLES OF RESTATEMENT

APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation, having
its principal office in Baltimore City, Maryland (hereinafter referred to as the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:

FIRST: The Corporation desires to and does hereby restate its Charter as
currently in effect. The Charter as currently in effect is found in Articles of
Amendment and Restatement dated July 13, 1994 and filed on July 15, 1994 (as
corrected by Certificate of Correction dated November 6, 1997 and filed on
November 6, 1997), Articles of Amendment dated July 27, 1994 and filed July 28,
1994 at 11:33 a.m. (as corrected by Certificate of Correction dated November 6,
1997 and filed on November 6, 1997), Articles of Amendment dated July 27, 1994
and filed July 28, 1994 at 11:35 a.m. (as corrected by Certificate of Correction
dated November 6, 1997 and filed on November 6, 1997), Articles Supplementary
dated May 20, 1997 and filed May 21, 1997, and Articles Supplementary dated
August 1, 1997 and filed August 4, 1997. The Charter of the Corporation is
hereby restated in its entirety as follows:

ARTICLE I
NAME

The name of the corporation (the "Corporation") is Apartment Investment and
Management Company.

ARTICLE II
PURPOSE

The purpose for which the Corporation is formed is to engage in any lawful
act or activity for which corporations may be organized under the general laws
of the State of Maryland authorizing the formation of corporations as now or
hereafter in force.

ARTICLE III
PRINCIPAL OFFICE IN STATE AND RESIDENT AGENT

The post office address of the principal office of the Corporation in the
State of Maryland is c/o The PrenticeHall Corporation System, Maryland, 11 East
Chase Street, Baltimore, Maryland 21202. The name and address of the resident
agent of the Corporation in the State of Maryland is The PrenticeHall
Corporation System, Maryland, 11 East Chase Street, Baltimore, Maryland 21202.
The resident agent is a Maryland corporation located in the State of Maryland.

<PAGE> 2

ARTICLE IV
STOCK

SECTION 1. AUTHORIZED SHARES

1.1 CLASS AND NUMBER OF SHARES. The total number of shares of stock that
the Corporation from time to time shall have authority to issue is 160,750,000
shares of capital stock having a par value of $.01 per share, amounting to an
aggregate par value of $1,607,500, consisting of 150,000,000 shares initially
classified as Class A Common Stock having a par value of $.01 per share ("Class
A Common Stock"), 750,000(1) shares initially classified as Class B Common Stock
having a par value of $.01 per share (the "Class B Common Stock") (the Class A
Common Stock and Class B Common Stock being referred to collectively herein as
the "Common Stock") and 10,000,000(2) shares initially classified as Preferred
Stock having a par value of $.01 per share ("Preferred Stock").

1.2 CHANGES IN CLASSIFICATION AND PREFERENCES. The Board of Directors by
resolution or resolutions from time to time may classify and reclassify any
unissued shares of capital stock by setting or changing in any one or more
respects the preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends, qualifications or terms or conditions
of redemption of such shares of capital stock, including, but not limited to,
ownership restrictions consistent with the Ownership Restrictions with respect
to each such class or subclass of capital stock, and the number of shares
constituting each such class or subclass, and to increase or decrease the number
of shares of any such class or subclass.

SECTION 2. NO PREEMPTIVE RIGHTS. No holder of shares of stock of the
Corporation shall, as such holder, have any preemptive right to purchase or
subscribe for any additional shares of the stock of the Corporation or any other
security of the Corporation that it may issue or sell.

SECTION 3. COMMON STOCK.

3.1 DIVIDEND RIGHTS. The holders of shares of Common Stock shall be entitled
to receive such dividends as may be declared by the Board of Directors of the
Corporation out of funds legally available therefor.

3.2 RIGHTS UPON LIQUIDATION. Subject to the preferential rights of Preferred
Stock, if any, as may be determined by the Board of Directors pursuant to
Section 1 of this Article IV, in the event of any voluntary or involuntary
liquidation, dissolution or winding up of, or any distribution of the assets of
the Corporation, each holder of shares of Common Stock shall be entitled to
receive, ratably with each other holder of Common Stock, that portion of the
assets of the Corporation available for distribution to its shareholders as the
number of shares of the Common Stock held by such holder bears to the total
number of shares of Common Stock then outstanding.

3.3 VOTING RIGHTS. The holders of shares of Common Stock shall be entitled
to vote on all matters (on which a holder of shares of Common Stock shall be
entitled to vote) at the meetings of the shareholders of the Corporation, and
shall be entitled to one vote for each share of Common Stock entitled to vote at
such meeting.

3.4 RESTRICTION ON OWNERSHIP AND TRANSFERS. The Beneficial Ownership and
Transfer of Common Stock shall be subject to the restrictions set forth in this
Section 3.4 of this Article IV.

3.4.1 RESTRICTIONS.

(A) LIMITATION ON BENEFICIAL OWNERSHIP. Except as provided in Section
3.4.8 of this Article IV, from and after the date of the Initial Public
Offering, no Person (other than the Initial Holder or a Look-Through Entity)
shall Beneficially Own shares of Common Stock in excess of the Ownership Limit,
the Initial Holder shall not Beneficially Own shares of Common Stock in excess
of the Initial Holder Limit and no Look-Through Entity shall Beneficially Own
shares of Common Stock in excess of the Look-Through Ownership Limit.

(1) See Article SIXTH.
(2) See Article SEVENTH.

<PAGE> 3

(B) TRANSFERS IN EXCESS OF OWNERSHIP LIMIT. Except as provided in
Section 3.4.8 of this Article IV, from and after the date of the Initial Public
Offering (and subject to Section 3.4.12 of this Article IV), any Transfer
(whether or not such Transfer is the result of transactions entered into through
the facilities of the NYSE or other securities exchange or an automated
interdealer quotation system) that, if effective, would result in any Person
(other than the Initial Holder or a Look-Through Entity) Beneficially Owning
shares of Common Stock in excess of the Ownership Limit shall be void AB INITIO
as to the Transfer of such shares of Common Stock that would be otherwise
Beneficially Owned by such Person in excess of the Ownership Limit, and the
intended transferee shall acquire no rights in such shares of Common Stock.

(C) TRANSFERS IN EXCESS OF INITIAL HOLDER LIMIT. Except as provided
in Section 3.4.8 of this Article IV, from and after the date of the Initial
Public Offering (and subject to Section 3.4.12 of this Article IV), any Transfer
(whether or not such Transfer is the result of transactions entered into through
the facilities of the NYSE or other securities exchange or an automated
interdealer quotation system) that, if effective, would result in the Initial
Holder Beneficially Owning shares of Common Stock in excess of the Initial
Holder Limit shall be void AB INITIO as to the Transfer of such shares of Common
Stock that would be otherwise Beneficially Owned by the Initial Holder in excess
of the Initial Holder limit, and the Initial Holder shall acquire no rights in
such shares of Common Stock.

(D) TRANSFERS IN EXCESS OF LOOK-THROUGH OWNERSHIP LIMIT. Except as
provided in Section 3.4.8 of this Article IV from and after the date of the
Initial Public Offering (and subject to Section 3.4.12 of this Article IV), any
Transfer (whether or not such Transfer is the result of transactions entered
into through the facilities of the NYSE or other securities exchange or an
automated interdealer quotation system) that, if effective, would result in any
Look-Through Entity Beneficially Owning shares of Common Stock in excess of the
Look-Through Ownership limit shall be void AB INITIO as to the Transfer of such
shares of Common Stock that would be otherwise Beneficially Owned by such
Look-Through Entity in excess of the Look-Through Ownership Limit and such
Look-Through Entity shall acquire no rights in such shares of Common Stock.

(E) TRANSFERS RESULTING IN OWNERSHIP BY FEWER THAN 100 PERSONS.
Except as provided in Section 3.4.8 of this Article IV, from and after the date
of the Initial Public Offering (and subject to Section 3.4.12 of this Article
IV), any Transfer (whether or not such Transfer is the result of transactions
entered into through the facilities of the NYSE or other securities exchange or
an automated interdealer quotation system) that, if effective, would result in
the Common Stock being Beneficially Owned by less than 100 Persons (determined
without reference to any rules of attribution) shall be void AB INITIO as to the
Transfer of such shares of Common Stock that would be otherwise Beneficially
Owned by the transferee and the intended transferee shall acquire no rights in
such shares of Common Stock.

(F) TRANSFERS RESULTING IN "CLOSELY HELD" STATUS. From and after the
date of the Initial Public Offering, any Transfer that, if effective would
result in the Corporation being "closely held" within the meaning of Section
856(h) of the Code, or would otherwise result in the Corporation failing to
qualify as a REIT (including, without limitation, a Transfer or other event that
would result in the Corporation owning (directly or constructively) an interest
in a tenant that is described in Section 856(d)(2)(B) of the Code if the income
derived by the Corporation from such tenant would cause the Corporation to fail
to satisfy any of the gross income requirements of Section 856(c) of the Code)
shall be void AB INITIO as to the Transfer of shares of Common Stock that would
cause the Corporation (i) to be "closely held" within the meaning of Section
856(h) of the Code or (ii) otherwise fail to qualify as a REIT, as the case may
be, and the intended transferee shall acquire no rights in such shares of Common
Stock.

(G) SEVERABILITY ON VOID TRANSACTIONS. A Transfer of a share of
Common Stock that is null and void under Sections 3.4.1(B), (C), (D), (E) or (F)
of this Article IV because it would, if effective, result in (i) the ownership
of Common Stock in excess of the Initial Holder Limit, the Ownership Limit, or
the Look-Through Ownership Limit, (ii) the Common Stock being Beneficially Owned
by less than 100 Persons (determined without reference to any rules of
attribution), (iii) the Corporation being "closely held" within the meaning of
Section 856(h) of the Code or (iv) the Corporation otherwise failing to qualify
as a REIT, shall not adversely affect the validity of the Transfer of any other
share of Common Stock in the same or any other related transaction.

3.4.2 REMEDIES FOR BREACH. If the Board of Directors or a committee
thereof shall at any time determine

<PAGE> 4

in good faith that a Transfer or other event has taken place in violation of
Section 3.4.1 of this Article IV or that a Person intends to acquire or has
attempted to acquire Beneficial Ownership of any shares of Common Stock in
violation of Section 3.4.1 of this Article IV (whether or not such violation is
intended), the Board of Directors or a committee thereof shall be empowered to
take any action as it deems advisable to refuse to give effect to or to prevent
such Transfer or other event, including, but not limited to, refusing to give
effect to such Transfer or other event on the books of the Corporation, causing
the Corporation to redeem such shares at the then current Market Price and upon
such terms and conditions as may be specified by the Board of Directors in its
sole discretion (including, but not limited to, by means of the issuance of
longterm indebtedness for the purpose of such redemption), demanding the
repayment of any distributions received in respect of shares of Common Stock
acquired in violation of Section 3.4.1 of this Article IV or instituting
proceedings to enjoin such Transfer or to rescind such Transfer or attempted
Transfer; PROVIDED, HOWEVER, that any Transfers or attempted Transfers (or in
the case of events other than a Transfer, Beneficial Ownership) in violation of
Section 3.4.1 of this Article IV, regardless of any action (or nonaction) by the
Board of Directors or such committee, (a) shall be void AB INITIO or (b) shall
automatically result in the transfer described in Section 3.4.3 of this Article
IV; PROVIDED, FURTHER, that the provisions of this Section 3.4.2 shall be
subject to the provisions of Section 3.4.12 of this Article IV; PROVIDED,
FURTHER, that neither the Board of Directors nor any committee thereof may
exercise such authority in a manner that interferes with any ownership or
transfer of Common Stock that is expressly authorized pursuant to Section
3.4.8(d) of this Article IV.

3.4.3. TRANSFER IN TRUST.

(A) ESTABLISHMENT OF TRUST. If, notwithstanding the other provisions
contained in this Article IV, at any time after the date of the Initial Public
Offering there is a purported Transfer (an "EXCESS TRANSFER") (whether or not
such Transfer is the result of transactions entered into through the facilities
of the NYSE or other securities exchange or an automated interdealer quotation
system) or other change in the capital structure of the Corporation (including,
but not limited to, any redemption of Preferred Stock) or other event such that
(a) any Person (other than the Initial Holder or a Look-Through Entity) would
Beneficially Own shares of Common Stock in excess of the Ownership Limit, or (b)
the Initial Holder would Beneficially Own shares of Common Stock in excess of
the Initial Holder Limit, or (c) any Person that is a Look-Through Entity would
Beneficially Own shares of Common Stock in excess of the Look-Through Ownership
Limit (in any such event, the Person, Initial Holder or Look-Through Entity that
would Beneficially Own shares of Common Stock in excess of the Ownership Limit,
the Initial Holder Limit or the Look-Through Entity Limit is referred to as a
"PROHIBITED TRANSFEREE"), then, except as otherwise provided in Section 3.4.8 of
this Article IV, such shares of Common Stock in excess of the Ownership Limit,
the Initial Holder Limit or the Look-Through Ownership Limit, as the case may
be, (rounded up to the nearest whole share) shall be automatically transferred
to a Trustee in his capacity as trustee of a Trust for the exclusive benefit of
one or more Charitable Beneficiaries. Such transfer to the Trustee shall be
deemed to be effective as of the close of business on the business day prior to
the date of the Excess Transfer, change in capital structure or another event
giving rise to a potential violation of the Ownership Limit, the Initial Holder
Limit or the Look-Through Entity Ownership Limit.

(B) APPOINTMENT OF TRUSTEE. The Trustee shall be appointed by the
Corporation and shall be a Person unaffiliated with either the Corporation or
any Prohibited Transferee. The Trustee may be an individual or a bank or trust
company duly licensed to conduct a trust business.

(C) STATUS OF SHARES HELD BY THE TRUSTEE. Shares of Common Stock held
by the Trustee shall be issued and outstanding shares of capital stock of the
Corporation. Except to the event provided in Section 3.4.3(E), the Prohibited
Transferee shall have no rights in the Common Stock held by the Trustee, and the
Prohibited Transferee shall not benefit economically from ownership of any
shares held in trust by the Trustee, shall have no rights to dividends and shall
not possess any rights to vote or other rights attributable to the shares held
in the Trust.

(D) DIVIDEND AND VOTING RIGHTS. The Trustee shall have all voting
rights and rights to dividends with respect to shares of Common Stock held in
the Trust, which rights shall be exercised for the benefit of the Charitable
Beneficiary. Any dividend or distribution paid prior to the discovery by the
Corporation that the shares of Common Stock have been transferred to the Trustee
shall be repaid to the Corporation upon demand, and any dividend or distribution
declared but unpaid shall be rescinded as void AB INITIO with respect to such
shares of Common Stock. Any dividends or distributions so disgorged or rescinded
shall be paid over to the Trustee and held

<PAGE> 5

in trust for the Charitable Beneficiary. Any vote cast by a Prohibited
Transferee prior to the discovery by the Corporation that the shares of Common
Stock have been transferred to the Trustee will be rescinded as AB INITIO and
shall be recast in accordance with the desires of the Trustee acting for the
benefit of the Charitable Beneficiary. The owner of the shares at the time of
the Excess Transfer, change in capital structure or other event giving rise to a
potential violation of the Ownership Limit, Initial Holder Limit or Look-Through
Entity Ownership Limit shall be deemed to have given an irrevocable proxy to the
Trustee to vote the shares of Common Stock for the benefit of the Charitable
Beneficiary.

(E) RESTRICTIONS ON TRANSFER. The Trustee of the Trust may transfer
the shares held in the Trust to a person, designated by the Trustee, whose
ownership of the shares will not violate the Ownership Restrictions. If such a
transfer is made, the interest of the Charitable Beneficiary shall terminate and
proceeds of the sale shall be payable to the Prohibited Transferee and to the
Charitable Beneficiary as provided in this Section 3.4.3(E). The Prohibited
Transferee shall receive the lesser of (1) the price paid by the Prohibited
Transferee for the shares or, if the Prohibited Transferee did not give value
for the shares (through a gift, devise or other transaction), the Market Price
of the shares on the day of the event causing the shares to be held in the Trust
and (2) the price per share received by the Trustee from the sale or other
disposition of the shares held in the Trust. Any proceeds in excess of the
amount payable to the Prohibited Transferee shall be payable to the Charitable
Beneficiary. If any of the transfer restrictions set forth in this Section
3.4.3(E) or any application thereof is determined in a final judgment to be
void, invalid or unenforceable by any court having jurisdiction over the issue,
the Prohibited Transferee may be deemed, at the option of the Corporation, to
have acted as the agent of the Corporation in acquiring the Common Stock as to
which such restrictions would, by their terms, apply, and to hold such Common
Stock on behalf of the Corporation.

(F) PURCHASE RIGHT IN STOCK TRANSFERRED TO THE TRUSTEE. Shares of
Common Stock transferred to the Trustee shall be deemed to have been offered for
sale to the Corporation, or its designee, at a price per share equal to the
lesser of (i) the price per share in the transaction that resulted in such
transfer to the Trust (or, in the case of a devise or gift, the Market Price at
the time of such devise or gift) and (ii) the Market Price on the date the
Corporation, or its designee, accepts such offer. The Corporation shall have the
right to accept such offer for a period of 90 days after the later of (i) the
date of the Excess Transfer or other event resulting in a transfer to the Trust
and (ii) the date that the Board of Directors determines in good faith that an
Excess Transfer or other event occurred.

(G) DESIGNATION OF CHARITABLE BENEFICIARIES. By written notice to the
Trustee, the Corporation shall designate one or more nonprofit organizations to
be the Charitable Beneficiary of the interest in the Trust relating to such
Prohibited Transferee if (i) the shares of Common Stock held in the Trust would
not violate the Ownership Restrictions in the hands of such Charitable
Beneficiary and (ii) each Charitable Beneficiary is an organization described in
Sections 170(b)(1)(A), 170(c)(2) and 501(c)(3) of the Code.

3.4.4 NOTICE OF RESTRICTED TRANSFER. Any Person that acquires or attempts to
acquire shares of Common Stock in violation of Section 3.4.1 of this Article IV,
or any Person that is a Prohibited Transferee such that stock is transferred to
the Trustee under Section 3.4.3 of this Article IV, shall immediately give
written notice to the Corporation of such event and shall provide to the
Corporation such other information as the Corporation may request in order to
determine the effect, if any, of such Transfer or attempted Transfer or other
event on the Corporation's status as a REIT. Failure to give such notice shall
not limit the rights and remedies of the Board of Directors provided herein in
any way.

3.4.5 OWNERS REQUIRED TO PROVIDE INFORMATION. From and after the date of the
Initial Public Offering certain record and Beneficial Owners and transferees of
shares of Common Stock will be required to provide certain information as set
out below.

<PAGE> 6

of Common Stock shall, upon demand by the Corporation, disclose to the
Corporation in writing such additional information with respect to the
Beneficial Ownership of the Common Stock as the Board of Directors, in its sole
discretion, deems appropriate or necessary to (i) comply with the provisions of
the Code regarding the qualification of the Corporation as a REIT under the Code
and (ii) ensure compliance with the Ownership Limit, the Initial Holder Limit or
the Look-Through Ownership Limit, as applicable. Each shareholder of record,
including without limitation any Person that holds shares of Common Stock on
behalf of a Beneficial Owner, shall take all reasonable steps to obtain the
written notice described in this Section 3.4.5 from the Beneficial Owner.

(B) DISCLOSURE AT THE REQUEST OF THE CORPORATION. Any Person that is
a Beneficial Owner of shares of Common Stock and any Person (including the
shareholder of record) that is holding shares of Common Stock for a Beneficial
Owner, and any proposed transferee of shares, shall provide such information as
the Corporation, in its sole discretion, may request in order to determine the
Corporation's status as a REIT, to comply with the requirements of any taxing
authority or other governmental agency, to determine any such compliance or to
ensure compliance with the Ownership Limit, the Initial Holder Limit and the
Look-Through Ownership Limit, and shall provide a statement or affidavit to the
Corporation setting forth the number of shares of Common Stock already
Beneficially Owned by such shareholder or proposed transferee and any related
persons specified, which statement or affidavit shall be in the form prescribed
by the Corporation for that purpose.

3.4.6 REMEDIES NOT LIMITED. Nothing contained in this Article IV shall limit
the authority of the Board of Directors to take such other action as it deems
necessary or advisable (subject to the provisions of Section 3.4.12 of this
Article IV) (i) to protect the Corporation and the interests of its shareholders
in the preservation of the Corporation's status as a REIT and (ii) to insure
compliance with the Ownership Limit, the Initial Holder Limit and the
Look-Through Ownership Limit.

3.4.7 AMBIGUITY. In the case of an ambiguity in the application of any of
the provisions of Section 3.4 of this Article IV, or in the case of an ambiguity
in any definition contained in Section 4 of this Article IV, the Board of
Directors shall have the power to determine the application of the provisions of
this Article IV with respect to any situation based on its reasonable belief,
understanding or knowledge of the circumstances.

3.4.8 EXCEPTIONS. The following exceptions shall apply or may be established
with respect to the limitations of Section 3.4.1 of this Article IV.

(A) WAIVER OF OWNERSHIP LIMIT. The Board of Directors, upon receipt
of a ruling from the Internal Revenue Service or an opinion of tax counsel or
other evidence or undertaking acceptable to it, may waive the application, in
whole or in part, of the Ownership Limit to a Person subject to the Ownership
Limit, if such person is not an individual for purpose of Section 542(a) of the
Code and is a corporation, partnership, estate or trust; PROVIDED, HOWEVER, that
in no event may any such exception cause such Person's ownership, direct or
indirect (without taking into account such Person's ownership of interests in
any partnership of which the Corporation is a partner), to exceed 9.8% of the
number of Outstanding shares of Common Stock. In connection with any such
exemption, the Board of Directors may require such representations and
undertakings from such Person and may impose such other conditions as the Board
deems necessary, in its sole discretion, to determine the effect, if any, of the
proposed Transfer on the Corporation's status as a REIT.

(B) PLEDGE BY INITIAL HOLDER. Notwithstanding any other provision of
this Article IV, the pledge by the Initial Holder of all or any portion of the
Common Stock directly owned at any time or from time to time shall not
constitute a violation of Section 3.4.1 of this Article IV and the pledgee shall
not be subject to the Ownership Limit with respect to the Common Stock so
pledged to it either as a result of the pledge or upon foreclosure.

(C) UNDERWRITERS. For a period of 270 days following the purchase of
Common Stock by an underwriter that (i) is a corporation or a partnership and
(ii) participates in an offering of the Common Stock, such underwriter shall not
be subject to the Ownership Limit with respect to the Common Stock purchased by
it as a part of or in connection with such offering and with respect to any
Common Stock purchased in connection with market making activities.

<PAGE> 7

(D) OWNERSHIP AND TRANSFERS BY THE CMO TRUSTEE. The Ownership Limit
shall not apply to the initial holding of Common Stock by the "CMO Trustee" (as
that term is defined in the "Glossary" to the Prospectus) for the benefit of "HF
Funding Trust" (as that term is defined in the "Glossary" to the Prospectus), to
any subsequent acquisition of Common Stock by the CMO Trustee in connection with
any conversion of Preferred Stock or to any transfer or assignment of all or any
part of the legal or beneficial interest in the Common Stock to the CMO Trustee,
"ESA" (as that term is defined in the "Glossary" to the Prospectus), any entity
controlled by ESA, or any direct or indirect creditor of HF Funding Trust
(including without limitation any reinsurer of any obligation of HF Funding
Trust) or any acquisition of Common Stock by any such person in connection with
any conversion of Preferred Stock.

3.4.9 LEGEND. Each certificate for Common Stock shall bear the following
legend: "The shares of Common Stock represented by this certificate are subject
to restrictions on transfer. No person may Beneficially Own shares of Common
Stock in excess of the Ownership Restrictions, as applicable, with certain
further restrictions and exceptions set forth in the Corporation's Amended and
Restated Certificate of Incorporation ("Certificate"). Any Person that attempts
to Beneficially Own shares of Common Stock in excess of the applicable
limitation must immediately notify the Corporation. All capitalized terms in
this legend have the meanings ascribed to such terms in the Corporation's
Certificate, as the same may be amended from time to time, a copy of which,
including the restrictions on transfer, will be sent without charge to each
shareholder that so requests. If the restrictions on transfer are violated, the
shares of Common Stock represented hereby will be either (i) void in accordance
with the Certificate or (ii) automatically transferred to a Trustee of a Trust
for the benefit of one or more Charitable Beneficiaries."

3.4.10 SEVERABILITY. If any provision of this Article IV or any application
of any such provision is determined in a final and unappealable judgment to be
void, invalid or unenforceable by any Federal or state court having jurisdiction
over the issues, the validity and enforceability of the remaining provisions
shall not be affected and other applications of such provision shall be affected
only to the extent necessary to comply with the determination of such court.

3.4.11 BOARD OF DIRECTORS DISCRETION. Anything in this Article IV to the
contrary notwithstanding, the Board of Directors shall be entitled to take or
omit to take such actions as it in its discretion shall determine to be
advisable in order that the Corporation maintain its status as and continue to
qualify as a REIT, including, but not limited to, reducing the Ownership Limit,
the Initial Holder Limit and the Look-Through Ownership Limit in the event of a
change in law.

3.4.12 SETTLEMENT. Nothing in this Section 3.4 of this Article IV shall be
interpreted to preclude the settlement of any transaction entered into through
the facilities of the NYSE or other securities exchange or an automated
interdealer quotation system.

SECTION 4. DEFINITIONS. The terms set forth below shall have the meanings
specified below when used in this Article IV or in Article V of these Articles
of Amendment and Restatement.(3)

4.1 BENEFICIAL OWNERSHIP. The term "BENEFICIAL OWNERSHIP" shall mean, with
respect to any Person, ownership of shares of Common Stock equal to the sum of
(i) the shares of Common Stock directly owned by such Person, (ii) the number of
shares of Common Stock indirectly owned by such Person (if such Person is an
"individual" as defined in Section 542(a)(2) of the Code) taking into account
the constructive ownership rules of Section 544 of the Code, as modified by
Section 856(h)(1)(B) of the Code, and (iii) the number of shares of Common Stock
that such Person is deemed to beneficially own pursuant to Rule 13d3 under the
Exchange Act or that is attributed to such Person pursuant to Section 318 of the
Code, as modified by Section 856(d)(5) of the Code, PROVIDED that when applying
this definition of Beneficial Ownership to the Initial Holder, clause (iii) of
this definition, and clause (b) of the definition of "Person" shall be
disregarded. The terms "BENEFICIAL OWNER,"

(3) See Article FOURTH

<PAGE> 8

"BENEFICIALLY OWNS" and "BENEFICIALLY OWNED" shall have the correlative
meanings.

4.2 CHARITABLE BENEFICIARY. The term "CHARITABLE BENEFICIARY" shall mean one
or more beneficiaries of the Trust as determined pursuant to Section 3.4.3 of
this Article IV, each of which shall be an organization described in Section
170(b)(1)(A), 170(c)(2) and 501(c)(3) of the Code.

4.3 CODE. The term "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.

4.4 COMMON STOCK. The term "COMMON STOCK" shall mean all shares now or
hereafter authorized of any class of Common Stock of the Corporation and any
other capital stock of the Corporation, however designated, authorized after the
Issue Date, that has the right (subject always to prior rights of any class of
Preferred Stock) to participate in the distribution of the assets and earnings
of the Corporation without limit as to per share amount.

4.5 EXCESS TRANSFER. The term "EXCESS TRANSFER" has the meaning set forth in
Section 3.4.3(A) of this Article IV.

4.6 EXCHANGE ACT. The term "EXCHANGE ACT" shall mean the Securities Exchange
Act of 1934, as amended.

4.7 INITIAL HOLDER. The term "INITIAL HOLDER" shall mean Terry Considine.

4.8 INITIAL HOLDER LIMIT. The term "INITIAL HOLDER LIMIT" shall mean 15% of
the number of Outstanding shares of Common Stock applied, in the aggregate, to
the Initial Holder. From the date of the Initial Public Offering, the secretary
of the Corporation, or such other person as shall be designated by the Board of
Directors, shall upon request make available to the representative(s) of the
Initial Holder and the Board of Directors, a schedule that sets forth the
thencurrent Initial Holder Limit applicable to the Initial Holder.

4.9 INITIAL PUBLIC OFFERING. The term "INITIAL PUBLIC OFFERING" shall mean
the first underwritten public offering of Class A Common Stock registered under
the Securities Act of 1933, as amended, on a registration statement on Form S11
filed with the Securities and Exchange Commission.

4.10 LOOK-THROUGH ENTITY. The term "LOOK-THROUGH ENTITY" shall mean a Person
that is either (i) described in Section 401(a) of the Code as provided under
Section 856(h)(3) of the Code or (ii) registered under the Investment Company
Act of 1940.

4.11 LOOK-THROUGH OWNERSHIP LIMIT. The term "LOOK-THROUGH OWNERSHIP LIMIT"
shall mean 15% of the number of Outstanding shares of Common Stock.

4.12 MARKET PRICE. The term "MARKET PRICE" on any date shall mean the
Closing Price on the Trading Day immediately preceding such date. The term
"CLOSING PRICE" on any date shall mean the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the NYSE or, if the Common Stock is not listed or
admitted to trading on the NYSE, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal
national securities exchange on which the Common Stock is listed or admitted to
trading or, if the Common Stock is not listed or admitted to trading on any
national securities exchange, the last quoted price, or if not so quoted, the
average of the high bid and low asked prices in the overthecounter market, as
reported by the National Association of Securities Dealers, Inc. Automated
Quotation System or, if such system is no longer in use, the principal other
automated quotations system that may then be in use or, if the Common Stock is
not quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the Common
Stock selected by the Board of Directors of the Company. The term "TRADING DAY"
shall mean a day on which the principal national securities exchange on which
the Common Stock is listed or admitted to trading is open for the transaction of
business or, if the Common Stock is not listed or admitted to trading on any
national securities

<PAGE> 9

exchange, shall mean any day other than a Saturday, a Sunday or a day on which
banking institutions in the State of New York are authorized or obligated by law
or executive order to close.

4.13 NYSE. The term "NYSE" shall mean the New York Stock Exchange, Inc.

4.14 OUTSTANDING. The term "OUTSTANDING" shall mean issued and outstanding
shares of Common Stock of the Corporation, PROVIDED that for purposes of the
application of the Ownership Limit, the Look-Through Ownership Limit or the
Initial Holder Limit to any Person, the term "OUTSTANDING" shall be deemed to
include the number of shares of Common Stock that such Person alone, at that
time, could acquire pursuant to any options or convertible securities.

4.15 OWNERSHIP LIMIT. The term "OWNERSHIP LIMIT" shall mean, for any Person
other than the Initial Holder or a Look-Through Entity, 8.7% of the number of
the Outstanding shares of Common Stock of the Corporation.

4.16 OWNERSHIP RESTRICTIONS. The term "OWNERSHIP RESTRICTIONS" shall mean
collectively the Ownership Limit as applied to Persons other than the Initial
Holder or Look-Through Entities, the Initial Holder Limit as applied to the
Initial Holder and the Look-Through Ownership Limit as applied to Look-Through
Entities.

4.17 PERSON. The term "PERSON" shall mean (A) an individual, corporation,
partnership, estate, trust (including a trust qualifying under Section 401(a) or
501(c) of the Code), association, private foundation within the meaning of
Section 509(a) of the Code, joint stock company or other entity, and (B) also
includes a group as that term is used for purposes of Section 13(d)(3) of the
Exchange Act.

4.18 PROHIBITED TRANSFEREE. The term "PROHIBITED TRANSFEREE" has the meaning
set forth in Section 3.4.3(A) of this Article IV.

4.19 REIT. The term "REIT" shall mean a "real estate investment trust" as
defined in Section 856 of the Code.

4.20 TRANSFER. The term "TRANSFER" shall mean any sale, transfer, gift,
assignment, devise or other disposition of a share of Common Stock (including
(i) the granting of an option or any series of such options or entering into any
agreement for the sale, transfer or other disposition of Common Stock or (ii)
the sale, transfer, assignment or other disposition of any securities or rights
convertible into or exchangeable for Common Stock), whether voluntary or
involuntary, whether of record or Beneficial Ownership, and whether by operation
of law or otherwise (including, but not limited to, any transfer of an interest
in other entities that results in a change in the Beneficial Ownership of shares
of Common Stock). The term "TRANSFERS" and "TRANSFERRED" shall have correlative
meanings.

4.21 TRUST. The term "TRUST" shall mean the trust created pursuant to
Section 3.4.3 of this Article IV.

4.22 TRUSTEE. The term "TRUSTEE" shall mean the Person unaffiliated with
either the Corporation or the Prohibited Transferee that is appointed by the
Corporation to serve as trustee of the Trust.

4.23 PROSPECTUS. The term "PROSPECTUS" shall mean the prospectus that forms
a part of the registration statement filed with the Securities and Exchange
Commission in connection with the Initial Public Offering, in the form included
in the registration statement at the time the registration statement becomes
effective; PROVIDED, HOWEVER, that, if such prospectus is subsequently
supplemented or amended for use in connection with the Initial Public Offering,
"PROSPECTUS" shall refer to such prospectus as so supplemented or amended.

<PAGE> 10

ARTICLE V

GENERAL REIT PROVISIONS

SECTION 1. TERMINATION OF REIT STATUS. The Board of Directors shall take no
action to terminate the Corporation's status as a REIT until such time as (i)
the Board of Directors adopts a resolution recommending that the Corporation
terminate its status as a REIT, (ii) the Board of Directors presents the
resolution at an annual or special meeting of the shareholders and (iii) such
resolution is approved by the vote of a majority of the shares entitled to be
cast on the resolution.

SECTION 2. EXCHANGE OR MARKET TRANSACTIONS. Nothing in Article IV or this
Article V shall preclude the settlement of any transaction entered into through
the facilities of the NYSE or other national securities exchange or an automated
interdealer quotation system. The fact that the settlement of any transaction is
permitted shall not negate the effect of any other provision of this Article V
or any provision of Article IV, and the transferee, including but not limited to
any Prohibited Transferee, in such a transaction shall remain subject to all the
provisions and limitations of Article IV and this Article V.

SECTION 3. SEVERABILITY. If any provision of Article IV or this Article V or
any application of any such provision is determined to be invalid by any federal
or state court having jurisdiction over the issues, the validity of the
remaining provisions shall not be affected and other applications of such
provision shall be affected only to the extent necessary to comply with the
determination of such court.

SECTION 4. WAIVER. The Corporation shall have authority at any time to waive
the requirement that the Corporation redeem shares of Preferred Stock if, in the
sole discretion of the Board of Directors, any such redemption would jeopardize
the status of the Corporation as a REIT for federal income tax purposes.

ARTICLE VI
BOARD OF DIRECTORS

SECTION 1. MANAGEMENT. The business and the affairs of the Corporation
shall managed under the direction of its Board of Directors.

SECTION 2. NUMBER. The number of directors that will constitute the
entire Board of Directors shall be fixed by, or in the manner provided in, the
Bylaws but shall in no event be less than three. Any increases or decreases in
the size of the board shall be apportioned equally among the classes of
directors to prevent stacking in any one class of directors. There are
currently six directors in office whose names are as follows: Terry Considine,
Peter K. Kompaniez, Richard S. Ellwood, J. Landis Martin, Thomas L. Rhodes and
John D. Smith.(4)

SECTION 3. INTENTIONALLY DELETED.

SECTION 4. VACANCIES. Except as otherwise provided in these Articles of
Amendment and Restatement(5), newly created directorships resulting from any
increase in the number of directors may be filled by the majority vote of the
Board of Directors, and any vacancies on the Board of Directors resulting from
death, resignation, removal or other cause shall be filled by the affirmative
vote of a majority of the remaining directors then in office, even if less than
a quorum of the Board of Directors, or, if applicable, by a sole remaining
director. Any director elected in accordance with the preceding sentence shall
hold office until the next annual meeting of the Corporation at which time a
successor shall be elected to fill the remaining term of the position filled by
such director.

SECTION 5. REMOVAL. Except as otherwise provided in these Articles of
Amendment and Restatement(6), any director may be removed from office only for
cause and only by the affirmative vote of two thirds of the aggregate number of
votes then entitled to be cast generally in the election of directors. For
purposes of this Section 5, "CAUSE"

(4) See Article THIRD.

(5) See Article FOURTH.

(6) See Article FOURTH.

<PAGE> 11

shall mean the willful and continuous failure of a director to substantially
perform the duties to the Corporation of such director (other than any such
failure resulting from temporary incapacity due to physical or mental illness)
or the willful engaging by a director in gross misconduct materially and
demonstrably injurious to the Corporation.

SECTION 6. BYLAWS. The Board of Directors shall have power to adopt, amend,
alter, change and repeal any Bylaws of the Corporation by vote of the majority
of the Board of Directors then in office. Any adoption, amendment, alteration,
change or repeal of any Bylaws by the shareholders of the Corporation shall
require the affirmative vote of a majority of the aggregate number of votes then
entitled to be cast generally in the election of directors. Notwithstanding
anything in this Section 6 to the contrary, no amendment, alteration, change or
repeal of any provision of the Bylaws relating to the removal of directors or
repeal of the Bylaws shall be effected without the vote of twothirds of the
aggregate number of votes entitled be cast generally in the election of
Directors.

SECTION 7. POWERS. The enumeration and definition of particular powers of
the Board of Directors included elsewhere in these Articles of Amendment and
Restatement(7) shall in no way be limited or restricted by reference to or
inference from the terms of any other clause of this or any other Article of
these Articles of Amendment and Restatement(8), or construed as excluding or
limiting, or deemed by inference or otherwise in any manner to exclude or limit,
the powers conferred upon the Board of Directors under the Maryland General
Corporation Law ("MGCL") as now or hereafter in force.

ARTICLE VII
LIMITATION OF LIABILITY

No director or officer of the Corporation shall be liable to the Corporation
or its shareholders for money damages to the maximum extent that Maryland law in
effect from time to time permits limitation of the liability of directors and
officers. Neither the amendment nor repeal of this Article VII, nor the adoption
or amendment or any other provision of the charter or Bylaws of the Corporation
inconsistent with this Article VII, shall apply to or affect in any respect the
applicability of the preceding sentence with respect to any act or failure to
act that occurred prior to such amendment, repeal or adoption.

(7) See Article FOURTH.
(8) See Article FOURTH.

<PAGE> 12

ARTICLE VIII
INDEMNIFICATION

The Corporation shall indemnify, to the fullest extent permitted by Maryland
law, as applicable from time to time, all persons who at any time were or are
directors or officers of the Corporation for any threatened, pending or
completed action, suit or proceeding (whether civil, criminal, administrative or
investigative) relating to any action alleged to have been taken or omitted in
such capacity as a director or an officer. The Corporation shall pay or
reimburse all reasonable expenses incurred by a present or former director or
officer of the Corporation in connection with any threatened, pending or
completed action, suit or proceeding (whether civil, criminal, administrative or
investigative) in which the present or former director or officer is a party, in
advance of the final disposition of the proceeding, to the fullest extent
permitted by, and in accordance with the applicable requirements of, Maryland
law, as applicable from time to time. The Corporation may indemnify any other
persons permitted but not required to be indemnified by Maryland law, as
applicable from time to time, if and to extent indemnification is authorized and
determined to be appropriate, in each case in accordance with applicable law, by
the Board of Directors, the majority of the shareholders of the Corporation
entitled to vote thereon or special legal counsel appointed by the Board of
Directors. No amendment of these Articles of Amendment and Restatement(9) of the
Corporation or repeal of any of its provisions shall limit or eliminate any of
the benefits provided to directors and officers under this Article VIII in
respect of any act or omission that occurred prior to such amendment or repeal.

ARTICLE IX
WRITTEN CONSENT OF SHAREHOLDERS

Any corporate action upon which a vote of shareholders is required or
permitted may be taken without a meeting or vote of shareholders with the
unanimous written consent of shareholders entitled to vote thereon.

ARTICLE X
AMENDMENT

The Corporation reserves the right to amend, alter or repeal any provision
contained in this charter upon (i) adoption by the Board of Directors of a
resolution recommending such amendment, alteration, or repeal, (ii) presentation
by the Board of Directors to the shareholders of a resolution at an annual or
special meeting of the shareholders and (iii) approval of such resolution by the
affirmative vote of the holders of a majority (or, as applicable, a twothirds
vote) of the aggregate number of votes entitled to be case generally in the
election of directors. All rights conferred upon shareholders herein are subject
to this reservation.

ARTICLE XI
EXISTENCE

The Corporation is to have a perpetual existence.

ARTICLE XII
CLASS B COMMON STOCK

GENERAL. The holders of the Class B Common Stock shall have the same rights
and privileges as, and shall be subject to the same restrictions and limitations
contained in the Charter as apply to, the holders of the Class A Common Stock,
except as set forth below.

SECTION 1. DEFINITIONS. Capitalized terms used in these Articles
Supplementary(10) shall have the meanings ascribed to them in the Charter or
elsewhere in these Articles Supplementary, except that the terms set forth below
shall have the meanings specified below when used in this Article.

(9) See Article FOURTH.

(10) See Article FOURTH.

<PAGE> 13

"ADJUSTED FUNDS FROM OPERATIONS" shall have the same meaning as the
term "Adjusted Funds from Operations" used in the Prospectus and shall be
calculated in the manner specified in the Prospectus and based on generally
accepted accounting principles. Adjusted Funds from Operations shall be
determined from the Corporation's financial statements audited and certified by
an independent public accountant.

"ADJUSTED FUNDS FROM OPERATIONS PER SHARE" when used with respect to
any period shall mean the Adjusted Funds from Operations for such period DIVIDED
by the sum of (a) the number of shares of the Class A Common Stock outstanding
on the last day of such period (excluding any shares of the Class A Common Stock
into which shares of the Class B Common Stock shall have been converted as a
result of the conversion of shares of the Class B Common Stock on the last day
of such period) and (b) the number of shares of the Class A Common Stock
issuable to acquire units of limited partnership that (i) may be tendered for
redemption in any limited partnership in which the Corporation serves as general
partner and (ii) are outstanding on the last day of such period.

"AVERAGE MARKET PRICE" for a period shall mean the average of the
Closing Prices for a share of the Class A Common Stock for the Trading Days in
such period.

"CAUSE" shall mean the termination of employment of an individual with
an Employer as a result of (a) the performance by such individual of any
activity involving fraud or dishonesty, (b) the conviction of the individual of
a felony or a crime involving moral turpitude, (c) the failure or refusal of
such individual to reasonably or satisfactorily perform any material duties or
responsibilities reasonably required of such individual by an Employer, (d) the
gross negligence or willful neglect or malfeasance by the individual in the
performance or nonperformance of such individual's duties or responsibilities to
the Employer, or (e) any unauthorized act or omission by such individual that is
injurious in any material respect to the financial condition or business
reputation of any Employer.

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

(a) An acquisition (other than directly from the Corporation) of any
voting securities of the Corporation (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 "1934 ACT")) immediately
after which such person has "beneficial ownership" (within the meaning of Rule
13d3 promulgated under the 1934 Act) ("BENEFICIAL OWNERSHIP") of 20% or more of
the combined voting power of the Corporation's then outstanding Voting
Securities; PROVIDED, HOWEVER, in determining whether a Change in Control has
occurred. Voting Securities that are acquired in a NonControl Acquisition (as
hereinafter defined) shall not constitute an acquisition that would cause a
Change in Control. "NONCONTROL ACQUISITION" shall mean an acquisition by (1) an
employee benefit plan (or a trust forming a part thereof) maintained by (a) the
Corporation or (b) any corporation, partnership or other Person of which a
majority of its voting power or its equity securities or equity interest is
owned directly or indirectly by the Corporation or in which the Corporation
serves as a general partner or manager (a "SUBSIDIARY"), (2) the Corporation or
any Subsidiary, or (3) any Person in connection with a NonControl Transaction
(as hereinafter defined);

(b) The individuals who are named in the Prospectus as constituting the
Board of Directors of the Corporation following the Initial Public Offering (the
"INCUMBENT BOARD") cease for any reason to constitute at least twothirds
(2/3rds) of the Board of Directors; PROVIDED, HOWEVER, that if the election, or
nomination for election by the Corporation's stockholders, of any new director
was approved by a vote of at least twothirds (2/3rds) 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 14a11
promulgated under the 1934 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

(1) A merger, consolidation, share exchange or reorganization
involving the Corporation, unless

<PAGE> 14

(A) the stockholders of the Corporation, 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 CORPORATION") in
substantiality the same proportion as their ownership of the Voting Securities
immediately before such merger, consolidation, share exchange or reorganization,

(B) 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 twothirds
(2/3rds) of the members of the board of directors of the Surviving Corporation,
and

(C) no Person (other than the corporation or any subsidiary, any
employee benefit plan (or any trust forming a part thereof) maintained by the
Corporation, the Surviving Corporation 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 Corporation's then outstanding voting securities
(a transaction described in clauses (i) through (iii) is referred to herein as a
"NONCONTROL TRANSACTION");

(2) A complete liquidation or dissolution of the Corporation,
or
(3) An agreement for the sale or other disposition of all or
substantially all of the assets of the Corporation to any Person (other than a
transfer to a Subsidiary).

Notwithstanding the foregoing, a Change in 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 Corporation 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 in
Control would occur (but for the operation of this sentence) as a result of the
acquisition of Voting Securities by the Corporation, and after such share
acquisition by the Corporation, 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 in Control shall occur.

"CLOSING PRICE" on any date shall mean the last sale price, regular
way, or, in case that no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the NYSE or, if shares of the Class A Common
Stock are not listed or admitted to trading on the NYSE, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which shares of the
Class A Common Stock are listed or admitted to trading or, if shares of the
Class A Common Stock are not listed or admitted to trading on any national
securities exchange, the last quoted price, or if not so quoted, the average of
the high bid and low asked prices in the overthecounter market, as reported by
the National Association of Securities Dealers, Inc. Automated Quotation System
or, if such system is no longer in use, the principal other automated quotations
system that may then be in use or, if shares of the Class A Common Stock are not
quoted by any such organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in shares of the
Class A Common Stock selected by the Board of Directors of the Corporation.

"CONVERTIBLE CLASS B SHARES" shall mean Eligible Class B Shares that
shall have become subject to automatic conversion into shares of the Class A
Common Stock, subject to Article IV, Section 3.4 of the Charter, pursuant to
Sections 3 and 4 of this Article.

"DISABILITY" shall mean the mental or physical illness or disability of
an individual that substantially impairs the ability of the individual to
perform substantially all of his duties as an employee of an Employer in a
satisfactory manner for a period in excess of ninety (90) days in any
consecutive 12month period.

"ELIGIBLE CLASS B SHARES" shall mean the following percentages
(subject to modification as provided

<PAGE> 15

in Section 3(c) of this Article) of the Outstanding Class B Shares as of the
Year-End Testing Dates indicated.

<TABLE>
<CAPTION>
PERCENTAGE OF OUTSTANDING
CLASS B SHARES
YEAR-END TESTING DATE
-----------------------------------------------------------
<S> <C>
December 31, 1994 10.0000%
December 31, 1995 22.2222%
December 31, 1996 28.5714%
December 31, 1997 50.0000%
December 31, 1998 100.0000%
</TABLE>

"EMPLOYER" shall mean (a) the Corporation, (b) any partnership in which
the Corporation serves as a general partner, (c) any corporation directly or
indirectly controlled by or under common control with the Corporation, (d) any
partnership or company in which any of the foregoing may own, directly or
indirectly, an equity interest or (e) any limited liability company in which any
of the foregoing may be a member.

"INITIAL HOLDER" shall refer to each person holding Outstanding Class B
Shares on the date of the closing of the Initial Public Offering, whether such
Outstanding Class B Shares result from designation of outstanding common stock
or from new issuance by the Corporation.

"OP UNITS" shall mean units of limited partnership interest in the
Operating Partnership.

"OPERATING PARTNERSHIP" shall mean AIMCO Properties, L.P., a Delaware
limited partnership in which the Corporation holds a general partnership
interest.

"OUTSTANDING CLASS B SHARES" shall mean issued and outstanding shares
of the Class B Common Stock of the Corporation, excluding any Convertible Class
B Shares that have been converted into shares of the Class A Common Stock.

"PROSPECTUS" shall mean the prospectus that forms a part of the
registration statement filed with the Securities and Exchange Commission in
connection with the Initial Public Offering, in the form included in the
registration statement at the time the registration statement becomes effective;
PROVIDED, HOWEVER, that, if such prospectus is subsequently supplemented or
amended for use in connection with the Initial Public Offering, "PROSPECTUS"
shall refer to such prospectus as so supplemented or amended.

"TRADING DAY" shall mean a day on which the principal national
securities exchange on which shares of the Class A Common Stock are listed or
admitted to trading is open for the transaction of business or, if shares of the
Class A Common Stock are not listed or admitted to trading on any national
securities exchange, "TRADING DAY" shall mean any day other than a Saturday, a
Sunday or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.

"YEAREND TESTING DATE" shall mean each of December 31, 1994, December
31, 1995, December 31, 1996, December 31, 1997 and December 31, 1998; PROVIDED,
HOWEVER, that December 31, 1999 shall be substituted in place of December 31,
1998 each place such earlier date appears in this Article if, as of December 31,
1998, either the Annual Growth Target requirement or the Compounded Cumulative
Growth Target requirement set forth in Section 3(a) of this Article in respect
of the YearEnd Testing Date of December 31, 1998 is not satisfied as of December
31, 1998.

SECTION 2. RESTRICTIONS ON DIVIDENDS AND VOTING RIGHTS.

(a) NO DIVIDENDS. No dividends shall accrue or be paid on any
shares of the Class B Common Stock.

(b) No Voting Rights; Exception for Convertible Class B Shares. Holders
of shares of the Class B Common Stock shall not have the right to vote on any
matter, including, but not limited to, the election of

<PAGE> 16

directors, the merger of the Corporation, the sale or other disposition of the
Corporation's assets, or the dissolution or liquidation of the Corporation;
PROVIDED, HOWEVER, that holders of Convertible Class B Shares shall have the
right to one (1) vote per share on all matters for which holders of shares of
the Class A Common Stock shall have the right to vote.

SECTION 3. CONVERTIBILITY OF OUTSTANDING CLASS B SHARES.

(a) IN GENERAL. The Eligible Class B Shares as of a Year-End Testing
Date shall automatically become Convertible Class B Shares according to the
Adjusted Funds from Operations Per Share and the Average Market Values of a
share of the Class A Common Stock for the periods indicated, provided that (i)
the "Annual Growth Target" requirement set forth below in this Section 3(a) is
satisfied, (ii) the "Compounded Cumulative Growth Target" requirement set forth
below in this Section 3(a) is satisfied AND (iii) the "MARKET VALUE" requirement
set forth in Section 3(b) of this Article is satisfied; PROVIDED, HOWEVER, that,
if in any calendar year an applicable Annual Growth Target requirement is not
satisfied, the Eligible Class B Shares becoming Convertible Class B Shares in
the following calendar year or years shall include, as a carryforward from year
to year, the Eligible Class B Shares otherwise applicable to the first year
provided that in the later year (which need not immediately follow the first
year) the Annual Growth Target requirement, the Cumulative Compounded Growth
Target requirement and the Market Value requirement for such later year are all
satisfied:

<TABLE>
<CAPTION>
YEAR-END TESTING COMPOUNDED CUMULATIVE
DATE. ANNUAL GROWTH TARGET GROWTH TARGET
- -------------------------------------------------------------------------------
<S> <C> <C>
December 31, 1994 Adjusted Funds from Adjusted Funds from
Operations Per Share for the Operations Per Share for
period beginning on the the period beginning on the
Initial Public Offering and Initial Public Offering and
ending on the YearEnd ending on the YearEnd
Testing Date is at least Testing Date is at least
$0.864 $0.864

December 31, 1995 ANNUALIZED Adjusted Funds ANNUALIZED Adjusted Funds
from Operations Per Share from Operations Per Share
for the period beginning on for the period beginning on
the Initial Public Offering the Initial Public Offering
and ending on the YearEnd and ending on the YearEnd
Testing Date is at least Testing Date is at least
$2.161 $2.161

December 31, 1996 Adjusted Funds from ANNUALIZED Adjusted Funds
Operations Per Share for the from Operations Per Share
calendar year ending on the for the period beginning on
YearEnd Testing Date is at the Initial Public Offering
least 108.5% of the Adjusted and ending on the YearEnd
Funds from Operations Per Testing Date is at least
Share for the calendar year $2.345
ending on the previous
YearEnd Testing Date

December 31, 1997 Adjusted Funds from ANNUALIZED Adjusted Funds
Operations Per Share for the from Operations Per Share
calendar year ending on the for the period beginning on
YearEnd Testing Date is at the Initial Public Offering
least 108.5% of the Adjusted and ending on the YearEnd
Funds from Operations Per Testing Date is at least
Share for the calendar year $2.544
ending on the previous
YearEnd Testing Date
</TABLE>

<PAGE> 17

<TABLE>
<S> <C> <C>
December 31, 1998 Adjusted Funds from ANNUALIZED Adjusted Funds
Operations Per Share for the from Operations Per Share
calendar year ending on the for the period beginning on
YearEnd Testing Date is at the Initial Public Offering
least 108.5% of the Adjusted and ending on the YearEnd
Funds from Operations Per Testing Date is at least
Share for the calendar year $2.760
ending on the previous
YearEnd Testing Date
</TABLE>

(b) MARKET VALUE REQUIREMENT. The Market Value requirement shall be
satisfied as to any Year-End Testing Date if the Average Market Value of a share
of the Class A Common Stock shall equal or exceed the amount set forth in the
following table for any 90 calendar day period (whether or not a calendar
quarter or an exact three month period) beginning on any day (whether or not a
Trading Day) on or after October 1 immediately preceding the applicable YearEnd
Testing Date:

<TABLE>
<CAPTION>
YEAR-END TESTING DATE AVERAGE MARKET PRICE
-----------------------------------------------
<S> <C> <C>
December 31, 1994 $19.030
December 31, 1995 $20.648
December 31, 1996 $22.403
December 31, 1997 $24.307
December 31, 1998 $26.373
</TABLE>

By way of illustration, the Market Value requirement for the Year-End Testing
Date of December 31, 1996 would be satisfied if the Average Market Value of a
share of the Class A Common Stock equaled or exceeded $22.403 for (i) the 90day
period beginning on October 1, 1986 and ending on December 30, 1996, (ii) the
90day period beginning on April 17, 1997 and ending on July 16, 1997 OR (iii)
the 90day period beginning on November 20, 1997 and ending on February 18, 1998.

(c) MODIFICATIONS TO ELIGIBILITY AND CONVERTIBILITY SCHEDULES.
Notwithstanding the provisions of Section 3(a) of this Article, in or as to any
calendar year the Corporation's Board of Directors shall have the authority,
upon consideration of factors and financial performance criteria that it shall
in its sole and absolute discretion consider relevant, to declare a greater or
lesser percentage of (i) Outstanding Class B Shares as of a YearEnd Testing Date
to be Eligible Class B Shares and (ii) Eligible Class B Shares to be Convertible
Class B Shares; PROVIDED, HOWEVER, that no such declaration shall decrease the
number of Eligible Class B Shares or Convertible Class B Shares held by any
person without such person's consent.

SECTION 4. CONDITIONAL CONVERSION OF CLASS B COMMON STOCK.

(a) CONVERSION OF CONVERTIBLE CLASS B SHARES. Subject to Section 4(c)
of this Article and to the limitations set forth in Article IV, Section 3.4 of
the Charter, upon becoming a Convertible Class B Share, each Convertible Class B
Share shall be converted automatically into the number of shares of the Class A
Common Stock that results from dividing $18.50 by the Conversion Price in effect
at the time of conversion (the "CONVERSION PRICE"). Subject to the limitations
set forth in Article IV, Section 3.4 of the Charter, such conversion shall occur
and be effective as of the applicable YearEnd Testing Date or, if later, the
satisfaction of the Market Price requirement set forth in Section 3(b) of this
Article. The initial Conversion Price shall be $18.50 per share and shall be
subject to adjustment as provided in Section 7 of this Article.

(b) CONVERSION UPON OCCURRENCE OF OTHER EVENTS. Notwithstanding the
foregoing provisions of this Section 4, but nevertheless subject to the
limitations set forth in Article IV, Section 3.4 of the Charter:

(1) all Outstanding Class B Shares (whether or not Eligible Class
B Shares) that have not previously converted into shares of the Class A Common
Stock shall convert automatically upon any Change in Control of the Corporation.

<PAGE> 18

(2) all Outstanding Class B Shares (whether or not Eligible Class
B Shares) held by an Initial Holder and any transferee of such Initial Holder
shall convert automatically into shares of the Class A Common Stock on the date
on which employment of such Initial Holder by an Employer is terminated by the
Employer (and not voluntarily by such Initial Holder) for any reason other than
Cause if following termination such Initial Holder is no longer employed as an
employee by any Employer, and

(3) the Board of Directors of the Corporation may, by resolution
duly adopted by the Board of Directors (and, if there shall be a duly
constituted compensation committee of the Board of Directors at the time, only
with the approval of the compensation committee), accelerate the conversion of
Outstanding Class B Shares (whether or not Eligible Class B Shares) into shares
of the Class A Common Stock at such time and in such amount as it may determine
to be appropriate from time to time.

The conversion of any Outstanding Class B Share pursuant to this Section 4(b)
shall be into the number of shares of the Class A Common Stock that results from
dividing $18.50 by the Conversion Price then in effect.

(c) IDENTIFICATION OF CLASS B COMMON STOCK CONVERTED. Whenever shares
of the Class B Common Stock are converted into shares of the Class A Common
Stock pursuant to Section 4(a), Section 4(b)(1) or Section 4(b)(3) of this
Article, the shares converted shall be allocated among all the record holders of
such shares of the Class B Common Stock in proportion to their record ownership.

(d) DELAYED CONVERSION. If the conversion of any shares of Class B
Common Stock into shares of the Class A Common Stock shall be limited or
restricted by reason of the provisions of Article IV, Section 3.4 of the
Charter, such shares shall automatically be so converted at such later time, if
any, and to such extent as such limitations and restrictions do not apply.

(e) NO FRACTIONAL SHARES. No fractional shares of the Class A Common
Stock shall be issued upon conversion of any shares of the Class B Common Stock.
Rather, the Corporation shall pay to the record holder cash for such fractional
shares at a rate equal to the Conversion Price per share.

SECTION 5. MANDATORY REPURCHASE OR STOCKHOLDER PURCHASE OF OUTSTANDING
CLASS B SHARES.

(a) REPURCHASE FOLLOWING THE FIFTH YEAREND TESTING DATE. Subject to the
limitations set forth in Article IV, Section 3.4 of the Charter, each
Outstanding Class B Share (whether or not an Eligible Class B Share) that has
not converted into shares of the Class A Common Stock in respect of the YearEnd
Testing Date of December 31, 1998 shall be subject to mandatory repurchase by
the Corporation at a price of $.10 per Outstanding Class B Share. Such mandatory
repurchase shall close upon the determination, no earlier than March 31, 2000,
that such Outstanding Class B Share is not convertible into shares of the Class
A Common Stock pursuant to Section 3 of this Article.

(b) INITIAL HOLDER PURCHASE UPON CERTAIN TERMINATIONS OF EMPLOYMENT.
Subject to the limitations set forth in Article IV, Section 3.4 of the Charter,
each Outstanding Class B Share (whether or not an Eligible Class B Share), other
than a Convertible Class B Share, held by the Initial Holder of such Outstanding
Class B Share, or by any holder who acquired such Outstanding Class B Share
directly or indirectly from such Initial Holder, that has neither converted nor
become convertible into shares of the Class A Common Stock or prior to either
(i) the date of termination of employment of such Initial Holder by an Employer
for Cause or (ii) the date of such Initial Holder's voluntary termination of
employment with an Employer shall be subject to mandatory purchase, at the time
of such termination of employment, by the other Initial Holders that are at that
time employed by an Employer. The purchase price shall be $.10 per Outstanding
Class B Share. The purchase of such Outstanding Class B Shares shall be made, by
the Initial Holders that are at that time employed by an Employer, proportionate
to the following percentages:

<TABLE>
<CAPTION>
INITIAL HOLDER PERCENTAGE
---------------------------------------
<S> <C> <C>
Terry Considine 68.33%
Peter K. Kompaniez 13.50%
Steven D. Ira 13.67%
Robert P. Lacy 4.50%
</TABLE>

<PAGE> 19

(c) REPURCHASE UPON CERTAIN TERMINATIONS OF EMPLOYMENT FOLLOWING
CONVERSION. Subject to the limitations set forth in Article IV, Section 3.4 of
the Charter, each share of the Class A Common Stock, whether held by an Initial
Holder of any other person who acquired such share of the Class A Common Stock
directly or indirectly from an Initial Holder, into which an Outstanding Class B
Share was originally converted pursuant to Section 4 of this Article shall be
subject to mandatory repurchase by the Corporation, at a price of $.10 per share
of the Class A Common Stock, upon such Initial Holder's termination of
employment with an Employer, other than (i) by reason of death, disability or a
Change in Control or (ii) the involuntary termination of employment of such
Initial Holder by an Employer without Cause, within 12 months following such
conversion of an Outstanding Class B Share into such share of the Class A Common
Stock; PROVIDED, HOWEVER, that nothing in this Section 5(c) shall be interpreted
or applied to preclude the settlement of any transaction entered into through
the facilities of the NYSE or other securities exchange or an automated
interdealer quotation system.

(d) DELAYED REPURCHASE OR PURCHASE. If either the limitations or
restrictions of Article IV, Section 3.4 of the Charter shall apply to (i) a
mandatory repurchase under Section 5(a) or Section 5(c) of this Article or (ii)
a mandatory purchase by the Initial Holders under Section 5(b) of this Article,
or if the Corporation cannot then lawfully effect a repurchase of its shares,
then the repurchase or purchase, as the case may be, shall be deferred until,
and then only to the extent that, such repurchase or purchase can be lawfully
effected within such limitations and restrictions.

(e) PROCEDURES UPON REPURCHASE OR PURCHASE. Any repurchase of
Outstanding Class B Shares as provided by Section 5(a) or Section 5(c) of this
Article shall be effected by delivery by the Corporation to the record holder of
such Outstanding Class B Shares of a certified or cashier's check in the amount
of the aggregate repurchase price. Upon such payment by the Corporation in
repurchase of Outstanding Class B Shares, the certificates evidencing such
repurchased Outstanding Class B Shares shall be canceled. Any purchase of
Outstanding Class B Shares as provided by Section 5(b) of this Article shall be
effected by delivery of the Initial Holders then employed by an Employer to the
record holder of such Outstanding Class B Shares of a certified or cashier's
check in the amount of the aggregate purchase price.

(f) CHANGE IN CONTROL. The provisions of Sections 5(a), 5(b) and 5(c)
of this Article shall not apply following any Change in Control.

SECTION 6. REDUCTION IN AUTHORIZED SHARES. The number of authorized shares
of the Class B Common Stock shall be reduced automatically by (a) the number of
shares of the Class B Common Stock converted into shares of the Class A Common
Stock pursuant to Section 4 of this Article and (b) the number of shares of the
Class B Common Stock repurchased by the Corporation pursuant to Section 5(a) or
Section 5(c) of this Article.

SECTION 7. ADJUSTMENTS. The Conversion Price and the number of shares of the
Class A Common Stock issuable upon the conversion of each share of the Class B
Common Stock shall be subject to adjustment from time to time as provided in
this Section 7.

(a) ADJUSTMENT UPON CERTAIN EVENTS. In case that the Corporation shall
at any time after the date of the Initial Public Offering (i) pay a dividend in
shares of the Class A Common Stock or make a distribution in shares of the Class
A Common Stock, (ii) subdivide the outstanding shares of the Class A Common
Stock, (iii) combine the outstanding Class A Common Stock into a smaller number
of shares of the Class A Common Stock, or (iv) issue any shares of its capital
stock or other securities by reclassification of the Class A Common Stock, the
Conversion Price in effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision, combination or
reclassification shall be proportionately adjusted so that each holder of shares
of the Class B Common Stock converted after such time shall be entitled to
receive the aggregate number and kind of the Class A Common Stock or other
securities of the Corporation that, if such shares of the Class B Common Stock
had been converted immediately prior to such time, he would have owned upon such
conversion and been entitled to receive by virtue of such dividend,
distribution, subdivision, combination or reclassification. Such adjustment
shall

<PAGE> 20

be made successively whenever any event listed above shall occur.

(b) ISSUANCE OF RIGHTS, OPTIONS OR WARRANTS. If after the Initial
Public Offering the Corporation issues any rights, options or warrants to all
holders of its Class A Common Stock entitling them for a period expiring within
60 days after the record date mentioned below to purchase shares of the Class A
Common Stock (or securities convertible into or exchangeable for shares of the
Class A Common Stock) at a price per share less than the current market price
per share on that record date, the Conversion Price shall be adjusted in
accordance with the formula:

A equals the adjusted Conversion Price.

C equals the then current Conversion Price.

O equals the number of shares of the Class A Common Stock outstanding
on the record date.

N equals the number of additional shares of the Class A Common Stock
offered or initially issuable upon conversion or exchange of the
convertible or exchangeable securities offered.

P equals the offering price or conversion price or exchange per share
of the additional shares.

M equals the current market price per share of the Class A Common
Stock on the record date.

The adjustment shall be made successively whenever any such rights, options or
warrants are issued and shall become effective immediately after the record date
for the determination of stockholders entitled to receive the rights, options or
warrants. If all of the shares of the Class A Common Stock or securities
convertible into or exchangeable for shares of the Class A Common Stock subject
to such rights, options or warrants have not been issued when such rights,
options or warrants expire, then the Conversion Price shall be immediately
readjusted to what it would have been if "N" in the above formula had been the
number of shares of the Class A Common Stock actually issued upon the exercise
of such rights, options or warrants or initially issuable based upon the number
of convertible securities or exchangeable securities actually issued upon the
exercise of such rights or warrants.

(c) DISTRIBUTION OF ASSETS AND DEBT SECURITIES. If after the Initial
Public Offering the Corporation distributes to all holders of its Class A Common
Stock any of its assets or debt securities or any rights or warrants to purchase
debt securities, assets or other securities of the Corporation (including shares
of the Class A Common Stock), the Conversion Price shall be adjusted in
accordance with the formula:

where

A equals the adjusted Conversion Price.

C equals the then current
Conversion Price.

M equals the current market price per share of the Class A Common
Stock on the record date mentioned below.

F equals the fair market value on the record date of the assets,
securities, rights or warrants applicable to one share of the Class
A Common Stock. The Board of Directors shall determine, in good
faith, such fair market value, which determination shall be
conclusive.

This Section 7(c) does not apply to any rights, options or warrants referred to
in Section 7(b) of this Article.

This Section 7(c) does not apply to cash dividends or cash distributions paid in
respect of the Class A Common Stock for any period if the cash dividends or cash
distributions paid in respect of the Class A Common Stock and OP Units for that
period, when added to the amount of all other cash dividends or cash
distributions paid in respect to the Class A Common Stock and OP Units for the
twelve (12) month period ending on the last day of such period, does not exceed
100% of Cash Available for Distribution for such twelve (12) month period. "CASH
AVAILABLE FOR DISTRIBUTION" shall mean "Funds from Operations" (as that term is
defined in the "Glossary" of the Prospectus but computed at the Operating
Partnership level) minus (i) the amount of any dividend on Preferred Stock
accrued during such twelve (12) month period, whether or not declared or paid,
and (ii) an annual reserve for capital replacements of $300 per apartment unit
for the weighted average number of apartment units owned by the Corporation
during such twelve (12) month period. By way of example, Cash Available for
Distribution for the twelve (12) month

<PAGE> 21

period ending June 15, 1995 as set forth in the Prospectus is projected on a PRO
FORMA basis to be $18,476,000.

(d) ISSUANCE OF DISCOUNTED SHARES. If after the Initial Public Offering
the Corporation issues shares of the Class A Common Stock for a consideration
per share less than the current market price per share, on the date that the
Corporation fixes the offering price of such additional shares, the Conversion
Price shall be adjusted in accordance with the formula:

where

A equals the adjusted Conversion Price.

C equals the then current Conversion Price.

O equals the number of shares of the Class A Common Stock outstanding
immediately prior to the issuance of such additional shares.

P equals the aggregate consideration received for the issuance of
such additional shares.

M equals the current market price per share of the Class A Common
Stock on the date of issuance of such additional shares.

S equals the number of shares outstanding immediately after the
issuance of such additional shares.

The adjustment shall be made successively whenever any such issuance is made,
and shall become effective immediately after such issuance.

This Section 7(d) does not apply to (i) any of the transactions described in
Section 7(b) or Section 7(c) of this Article, (ii) the conversion or exchange of
shares of the Class B Common Stock or other securities convertible into or
exchangeable for shares of the Class A Common Stock, (iii) shares of the Class A
Common Stock issued by the Corporation upon, and as consideration for, the
purchase of OP Units, (iv) shares of the Class A Common Stock issued to the
Corporation's employees (other than upon the exercise of options of the type
referred to in clause (v) below) under BONA FIDE employee benefit plans adopted
by the Board of Directors, if such Class A Common Stock would otherwise be
covered by this Section 7(d), (v) the Class A Common Stock issued upon the
exercise of options granted to employees at an exercise price equal to at least
85% of the fair market value of such Class A Common Stock at the time that such
options were granted, (vi) the Class A Common Stock issued to stockholders of
any person that merges into the Corporation, or with a subsidiary of the
Corporation, in proportion to their stock holdings in such Person immediately
prior to such merger, upon such merger, (vii) the Class A Common Stock issued in
a BONA FIDE public offering pursuant to a firm commitment or best efforts
underwriting, or (viii) the Class A Common Stock issued in a BONA FIDE private
placement through a placement agent that is a member firm of the National
Association of Securities Dealers, Inc. (except to the extent that any discount
from the current market price attributable to restrictions on transferability of
the Class A Common Stock, as determined in good faith by the Board of Directors,
shall exceed 10% of the then current market price).

(e) ISSUANCE OF CONVERTIBLE DISCOUNTED SECURITIES. If after the Initial
Public Offering the Corporation issues any securities convertible into or
exchangeable for shares of the Class A Common Stock (other than securities
issued in transactions described in Section 7(b) or Section 7(c)) of this
Article for a consideration per share of the Class A Common Stock initially
deliverable upon conversion or exchange of such securities less than the current
market price per share of the Class A Common Stock on the date of issuance of
such securities, the Conversion Price shall be adjusted in accordance with the
formula:

where

A equals the adjusted Conversion Price.

C equals the then current Conversion Price.

O equals the number of shares of the Class A Common Stock outstanding
immediately prior to the issuance of such securities.

P equals the aggregate consideration received for the issuance of
such securities.

M equals the current market price per share of the Class A Common
Stock on the date of issuance of such securities.

<PAGE> 22

D equals the maximum number of shares deliverable upon conversion or
in exchange for such securities at the initial conversion or
exchange rate.

The adjustment shall be made successively whenever any such issuance is made,
and shall become effective immediately after such issuance. If all of the Class
A Common Stock deliverable upon conversion or exchange of such securities have
not been issued when such securities are no longer outstanding, then the
Conversion Price shall promptly be readjusted to the conversion price that would
then be in effect had the adjustment upon the issuance of such securities been
made on the basis of the actual number of shares of the Class A Common Stock
issued upon conversion or exchange of such securities.

This Section 7(e) does not apply to (i) convertible securities issued to
stockholders of any Person that merges into the Corporation, or with a
subsidiary of the Corporation, in proportion to their stock holdings in such
Person immediately prior to such merger, upon such merger, (ii) convertible
securities issued in a BONA FIDE public offering pursuant to a firm commitment
or best efforts underwriting, or (iii) convertible securities issued in a BONA
FIDE private placement through a placement agent that is a member firm of the
National Association of Securities Dealers, Inc. (except to the extent that any
discount from the current market price attributable to restrictions on
transferability of the Class A Common Stock issuable upon conversion, as
determined in good faith by the Board of Directors and described in a Board
resolution, shall exceed 20% of the then current market price).

(f) REORGANIZATIONS, MERGERS, CONSOLIDATIONS OR SALES OF ASSETS. If at
any time or from time to time there is a capital reorganization of the
Corporation (other than a recapitalization, subdivision, combination,
reclassification or exchange of shares provided for elsewhere in this Section 7
or Section 4 of this Article) or a merger or consolidation of the Corporation
with or into another corporation, or the sale of all or substantially all of the
Corporation's properties and assets to any other person then, each share of the
Class B Common Stock then outstanding shall thereafter be convertible into, in
lieu of the Class A Common Stock issuable upon such conversion prior to
consummation of such reorganization, merger, consolidation or sale, the kind and
amount of shares of stock and other securities and property receivable
(including cash) upon the consummation of such reorganization, merger,
consolidation or sale by a holder of that number of shares of Class A Common
Stock into which one share of the Class B Common Stock was convertible
immediately prior to such reorganization, merger, consolidation or sale
(including, on a PRO RATA basis, the cash, securities or property received by
holders of Class A Common Stock in any tender or exchange offer that is a step
in such transaction). In any such case, appropriate adjustment shall be made in
the application of the provisions of this Section 7 and Section 4 of this
Article with respect to the rights of the holders of the shares of the Class B
Common Stock after the reorganization, merger, consolidation or sale to the end
that the provisions of this Section 7 (including adjustment of the Conversion
Price then in effect and the number of shares issuable upon conversion of the
shares of the Class B Common Stock) shall be applicable after that event and be
as nearly equivalent as may be practicable.

(g) COMPUTATION OF CONSIDERATION. For purposes of any computation
respecting consideration received pursuant to Sections 7(d) and 7(e) of this
Article, the following shall apply:

(1) In the case of the issuance of shares of the Class A Common
Stock for cash, the consideration shall be the amount of such cash, provided
that in no case shall any deduction be made for any commissions, discounts or
other expenses incurred by the Corporation for any underwriting of the issue or
otherwise in connection therewith;

(2) In the case of the issuance of shares of the Class A Common
Stock for a consideration in whole or in part other than cash, the consideration
other than cash shall be deemed to be the fair market value thereof as
determined in good faith by the Board of Directors (irrespective of the
accounting treatment thereof), whose determination shall be conclusive, and
described in a Board resolution; and

(3) In the case of the issuance of securities convertible into or
exchangeable for shares, the aggregate consideration received therefor shall be
deemed to be the consideration received by the Corporation for the issuance of
such securities plus the additional minimum consideration if any, to be received
by the Corporation upon the conversion of exchange thereof (the consideration in
each case to be determined in the same manner

<PAGE> 23

provided in Sections 7(g)(1) and 7(g)(2) of this Article.

(h) COMPUTATION OF CURRENT MARKET PRICE. For the purpose of any
computation pursuant to Sections 7(b), 7(c), 7(d) and 7(e) of this Article, the
current market price per share of the Class A Common Stock on any date shall be
deemed to be the average of the Closing Prices for 15 consecutive Trading Days
commencing 30 Trading Days before that date. However, if the Class A Common
Stock is not publicly listed or publicly traded, current market price shall mean
the fair market value per share of Class A Common Stock, as determined in good
faith by the Board of Directors, based on the opinion of an independent
investment banking firm.

(i) EXCEPTIONS. No adjustment in the Conversion Price need be made:

(1) unless the adjustment would require an increase or decrease of
at least 1% in the Conversion Price. Any adjustments that are not made shall be
carried forward and taken into account in any subsequent adjustment. All
calculations under this Section 7 shall be made to the nearest cent or to the
nearest one hundredth (1/100th) of a share, as the case may be. The Conversion
Price shall not be adjusted upward except in the event of a combination of the
outstanding shares of the Class A Common Stock into a smaller number of shares
of Common Stock or in the event of a readjustment of the Conversion Price
pursuant to Section 7(b) or Section 7(e) of this Article;

(2) for a transaction referred to in Section 7(a), Section 7(b),
Section 7(c), Section 7(d) or Section 7(e) of this Article if holders of the
Class B Common Stock are to participate in the transaction on a basis and with
notice that the Board of Directors determines to be fair and appropriate in
light of the basis and notice on which holders of the Class A Common Stock
participate in the transaction;

(3) for rights to purchase shares of the Class A Common Stock
pursuant to a plan for reinvestment of dividends or interest;

(4) for a change in the part value or no par value of the Class A
Common Stock; or

(5) to the extent that the Class B Common Stock becomes
convertible into cash, as to such cash. Interest will not accrue on any such
cash.

(j) NOTICE. Whenever the Conversion Price is adjusted or reduced, the
Corporation shall promptly mail, at least 12 days prior to the record date of
the distribution triggering the adjustment or reduction, to holders of the Class
B Common Stock and file with the transfer agent therefor a notice of the
adjustment or reduction and, in the case of an adjustment, file with the
transfer agent for the Class B Common Stock an officer's certificate briefly
stating the facts requiring the adjustment and the manner of computing it. The
certificate shall be conclusive evidence that the adjustment is correct.

(k) RESERVATION OF STOCK ISSUABLE UPON CONVERSION. The Corporation
shall at all times reserve and keep available out of its authorized but unissued
shares of the Class A Common Stock, solely for the purpose of effecting the
conversion of the shares of the Class B Common Stock, such number of its shares
of the Class A Common Stock as shall from time to time be sufficient to effect
the conversion of all outstanding shares of the Class B Common Stock; and if at
any time the number of authorized but unissued shares of the Class A Common
Stock shall not be sufficient to effect the conversion of all then outstanding
shares of the Class B Common Stock, the Corporation will take such corporate and
other action as may, in the opinion of its counsel, be necessary to increase its
authorized but unissued shares of the Class A Common Stock to such number of
shares as shall be sufficient for such purpose.

(l) DISCRETIONARY ADJUSTMENTS. The Board of Directors may (but shall
not be required to) make such adjustments in the Conversion Price, in addition
to those required by this Section 7, as shall be determined by the Board of
Directors, as evidenced by a Board resolution, to be advisable in order that any
event that would otherwise be treated for federal income tax purposes as a
dividend of stock or stock rights will, to the extent practicable, not be so
treated or not be taxable to all the recipients.

<PAGE> 24

(m) AMBIGUITY. The Board of Directors may interpret the provisions of
this Section 7 to resolve any inconsistency or ambiguity that may arise or be
revealed in connection with the adjustment procedures provided herein, and if
such inconsistency or ambiguity reflects an inaccurate provision hereof, the
Board of Directors may, in appropriate circumstances, authorize the filing of
additional articles supplementary or a certificate of designation.

SECTION 8. RESTRICTION ON ADDITIONAL ISSUANCES. Upon the filing of these
Articles of Amendment, there shall be authorized 750,000 shares and issued and
outstanding 650,000 shares of the Class B Common Stock.(11) No additional shares
of the Class B Common Stock shall be issued without the affirmative consent or
vote of a majority of the Corporation's Board of Directors other than employees
of an Employer.

ARTICLE XIII
CLASS B PREFERRED STOCK

The terms of the Class B Cumulative Convertible Preferred Stock (including
the preferences, conversions or other rights, voting powers, restrictions,
limitations as to dividends and other distributions, qualifications, or terms or
conditions of redemption) as set by the Board of Directors are as follows:

1. NUMBER OF SHARES AND DESIGNATION.

This class of Preferred Stock shall be designated as Class B Cumulative
Convertible Preferred Stock (the "Class B Preferred Stock") and Seven Hundred
Fifty Thousand (750,000) shall be the authorized number of shares of such
Class B Preferred Stock constituting such class.

2. DEFINITIONS.

For purposes of the Class B Preferred Stock, the following terms shall have
the meanings indicated:

"ACT" shall mean the Securities Act of 1933, as amended.

"affiliate" of a Person means a Person that directly, or indirectly through
one or more intermediaries, controls or is controlled by, or is under common
control with, the Person specified.

"AGGREGATE VALUE" shall mean, with respect to any block of Equity Stock, the
sum of the products of (i) the number of shares of each class of Equity
Stock within such block multiplied by (ii) the corresponding Market Price of
one share of Equity Stock of such class.

"BASE COMMON STOCK DIVIDEND" shall have the meaning set forth in paragraph
(a) of Section 9 of this Article.

"BENEFICIAL OWNERSHIP" shall mean, with respect to any Person, ownership of
shares of Equity Stock equal to the sum of (i) the number of shares of
Equity Stock directly owned by such Person, (ii) the number of shares of
Equity Stock indirectly owned by such Person (if such Person is an
"individual" as defined in Section 542(a)(2) of the Code) taking into
account the constructive ownership rules of Section 544 of the Code, as
modified by Section 856(h)(1)(B) of the Code, and (iii) the number of shares
of Equity Stock that such Person is deemed to beneficially own pursuant to
Rule 13d3 under the Exchange Act or that is attributed to such Person
pursuant to Section 318 of the Code, as modified by Section 856(d)(5) of the
Code, PROVIDED that when applying this definition of Beneficial Ownership to
the Initial Holder, clause (iii) of this definition, and clause (ii) of the
definition of "Person" shall be disregarded. The terms "BENEFICIAL OWNER,"
"BENEFICIALLY OWNS" and "BENEFICIALLY OWNED" shall have the correlative
meanings.

"BOARD OF DIRECTORS" shall mean the Board of Directors of the Corporation or
any committee authorized by such Board of Directors to perform any of its
responsibilities with respect to the Class B Preferred Stock.

(11) See Article FIFTH.

<PAGE> 25

"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or a day on
which state or federally chartered banking institutions in New York, New
York are not required to be open.

"CALL DATE" shall have the meaning set forth in paragraph (b) of Section 5
of this Article.

"CHARITABLE BENEFICIARY" shall mean one or more beneficiaries of the Trust
as determined pursuant to Section 11.3 of this Article, each of which shall
be an organization described in Section 170(b)(1)(A), 170(c)(2) and
501(c)(3) of the Code.

"CLASS B PREFERRED STOCK" shall have the meaning set forth in Section 1 of
this Article.

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

"COMMON STOCK" shall mean the Class A Common Stock, $.01 par value per
share, of the Corporation or such shares of the Corporation's capital stock
into which outstanding shares of Common Stock shall be reclassified.

"CONVERSION PRICE" shall mean the conversion price per share of Common Stock
for which each share of Class B Preferred Stock is convertible, as such
Conversion Price may be adjusted pursuant to paragraph (d) of Section 7 of
this Article. The initial Conversion Price shall be $30.45
(equivalent to an initial conversion rate of 3.28407 shares of Common Stock
for each share of Class B Preferred Stock).

"CURRENT MARKET PRICE" of publicly traded shares of Common Stock or any
other class or series of capital stock or other security of the Corporation
or of any similar security of any other issuer for any day shall mean the
closing price, regular way on such day, or, if no sale takes place on such
day, the average of the reported closing bid and asked prices regular way on
such day, in either case as reported on the principal national securities
exchange on which such securities are listed or admitted for trading, or, if
such security is not quoted on any national securities exchange, on the
National Market of the National Association of Securities Dealers, Inc.
Automated Quotations System ("NASDAQ") or, if such security is not quoted on
the NASDAQ National Market, the average of the closing bid and asked prices
on such day in the overthecounter market as reported by NASDAQ or, if bid
and asked prices for such security on such day shall not have been reported
through NASDAQ, the average of the bid and asked prices on such day as
furnished by any New York Stock Exchange or National Association of
Securities Dealers, Inc. member firm regularly making a market in such
security selected for such purpose by the Chief Executive Officer or the
Board of Directors or if any class or series of securities are not publicly
traded, the fair value of the shares of such class as determined reasonably
and in good faith by the Board of Directors of the Corporation.

"DISTRIBUTION" shall have the meaning set forth in paragraph (d)(iii) of
Section 7 of this Article.

"DIVIDEND PAYMENT DATE" shall mean, with respect to each Dividend Period,
(a) the date that cash dividends are paid on the Common Stock with respect
to such Dividend Period; or (b) if such dividends have not been paid on the
Common Stock by 9:00 a.m., New York City time, on the sixtieth day from and
including the last day of such Dividend Period, then on such day; provided,
further, that if any Dividend Payment Date falls on any day other than a
Business Day, the dividend payment payable on such Dividend Payment Date
shall be paid on the Business Day immediately following such Dividend
Payment Date.

"DIVIDEND PERIODS" shall mean the Initial Dividend Period and each
subsequent quarterly dividend period commencing on and including January 1,
April 1, July 1 and October 1 of each year and ending on and including the
day preceding the first day of the next succeeding Dividend Period, other
than the Dividend Period during which any Class B Preferred Stock shall be
redeemed pursuant to Section 5 hereof, which shall end on and include the
Call Date with respect to the Class B Preferred Stock being redeemed.

<PAGE> 26

"EQUITY STOCK" shall mean one or more shares of any class of capital stock
of the Corporation.

"EXCESS TRANSFER" has the meaning set forth in Section 11.3(A) of this
Article.

"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended.

"FAIR MARKET VALUE" shall mean the average of the daily Current Market
Prices of a share of Common Stock during five (5) consecutive Trading Days
selected by the Corporation commencing not more than twenty (20) Trading
Days before, and ending not later than, the earlier of the day in question
and the day before the "ex" date with respect to the issuance or
distribution requiring such computation. The term "'ex' date," when used
with respect to any issuance or distribution, means the first day on which
the share of Common Stock trades regular way, without the right to receive
such issuance or distribution, on the exchange or in the market, as the case
may be, used to determine that day's Current Market Price.

"ISSUE DATE" shall mean August 4, 1997.

"INITIAL DIVIDEND PERIOD" shall mean the period commencing on and including
the Issue Date and ending on and including September 30, 1997.

"INITIAL HOLDER" shall mean Terry Considine.

"INITIAL HOLDER LIMIT" shall mean a number of the Outstanding shares of
Class B Preferred Stock of the Corporation having an Aggregate Value not in
excess of the excess of (x) 15% of the Aggregate Value of all Outstanding
shares of Equity Stock over (y) the Aggregate Value of all shares of Equity
Stock other than Class B Preferred Stock that are Beneficially Owned by the
Initial Holder. From the Issue Date, the secretary of the Corporation, or
such other person as shall be designated by the Board of Directors, shall
upon request make available to the representative(s) of the Initial Holder
and the Board of Directors, a schedule that sets forth the thencurrent
Initial Holder Limit applicable to the Initial Holder.

"JUNIOR STOCK" shall have the meaning set forth in paragraph (c) of Section
8 of this Article.

"LOOK-THROUGH ENTITY" shall mean a Person that is either (i) described in
Section 401(a) of the Code as provided under Section 856(h)(3) of the
Code or (ii) registered under the Investment Company Act of 1940.

"LOOK-THROUGH OWNERSHIP LIMIT" shall mean, for any Look-Through Entity, a
number of the Outstanding shares of Class B Preferred Stock of the
Corporation having an Aggregate Value not in excess of the excess of (x) 15%
of the Aggregate Value of all Outstanding shares of Equity Stock over (y) by
the Aggregate Value of all shares of Equity Stock other than Class B
Preferred Stock that are Beneficially Owned by the Look-Through Entity.

"MARKET PRICE" on any date shall mean, with respect to any share of Equity
Stock, the Closing Price of a share of that class of Equity Stock on the
Trading Day immediately preceding such date. The term "CLOSING PRICE" on any
date shall mean the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted
to trading on the NYSE or, if the Equity Stock is not listed or admitted to
trading on the NYSE, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Equity Stock is listed or admitted to
trading or, if the Equity Stock is not listed or admitted to trading on any
national securities exchange, the last quoted price, or if not so quoted,
the average of the high bid and low asked prices in the overthecounter
market, as reported by the National Association of Securities Dealers, Inc.
Automated Quotation System or, if such system is no longer in use, the
principal other automated quotations system that may then be in use or, if
the Equity Stock is not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker
making a market in the Equity Stock selected by the Board of Directors of
the Company.

<PAGE> 27

"NYSE" shall mean the New York Stock Exchange, Inc.

"OUTSTANDING" shall mean issued and outstanding shares of Equity Stock of
the Corporation, PROVIDED that for purposes of the application of the
Ownership Limit, the Look-Through Ownership Limit or the Initial Holder
Limit to any Person, the term "OUTSTANDING" shall be deemed to include the
number of shares of Equity Stock that such Person alone, at that time, could
acquire pursuant to any options or convertible securities.

"OWNERSHIP LIMIT" shall mean, for any Person other than the Initial Holder
or a Look-Through Entity, a number of the Outstanding shares of Class B
Preferred Stock of the Corporation having an Aggregate Value not in excess
of the excess of (x) 8.7% of the Aggregate Value of all Outstanding shares
of Equity Stock over (y) the Aggregate Value of all shares of Equity Stock
other than Class B Preferred Stock that are Beneficially Owned by the
Person.

"OWNERSHIP RESTRICTIONS" shall mean collectively the Ownership Limit as
applied to Persons other than the Initial Holder or Look-Through Entities,
the Initial Holder Limit as applied to the Initial Holder and the
Look-Through Ownership Limit as applied to Look-Through Entities.

"PARITY STOCK" shall have the meaning set forth in paragraph (b) of Section
8 of this Article.

"PERSON" shall mean (a) for purposes of Section 11 of this Article, (i) an
individual, corporation, partnership, estate, trust (including a trust
qualifying under Section 401(a) or 501(c) of the Code), association, private
foundation within the meaning of Section 509(a) of the Code, joint stock
company or other entity, and (ii) also includes a group as that term is used
for purposes of Section 13(d)(3) of the Exchange Act and (b) for purposes of
the remaining Sections of this Article, any individual, firm, partnership,
corporation or other entity and shall include any successor (by merger or
otherwise) of such entity.

"PROHIBITED TRANSFEREE" has the meaning set forth in Section 11.3(A) of
this Article.

"REIT" shall mean a "real estate investment trust" as defined in Section 856
of the Code.

"SENIOR STOCK" shall have the meaning set forth in paragraph (a) of Section
8 of this Article.

"SET APART FOR PAYMENT" shall be deemed to include, without any action other
than the following, the recording by the Corporation in its accounting
ledgers of any accounting or bookkeeping entry which indicates, pursuant to
a declaration of dividends or other distribution by the Board of Directors,
the allocation of funds to be so paid on any series or class of capital
stock of the Corporation; provided, however, that if any funds for any class
or series of Junior Stock or any class or series of Parity Stock are placed
in a separate account of the Corporation or delivered to a disbursing,
paying or other similar agent, then "set apart for payment" with respect to
the Class B Preferred Stock shall mean placing such funds in a separate
account or delivering such funds to a disbursing, paying or other similar
agent.

"TRADING DAY", as to any securities, shall mean any day on which such
securities are traded on the principal national securities exchange on which
such securities are listed or admitted or, if such securities are not listed
or admitted for trading on any national securities exchange, the NASDAQ
National Market or, if such securities are not listed or admitted for
trading on the NASDAQ National Market, any day other than a Saturday, a
Sunday or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.

"TRANSACTION" shall have the meaning set forth in paragraph (e) of Section 7
of this Article.

"TRANSFER" shall mean any sale, transfer, gift, assignment, devise or other
disposition of a share of Class B Preferred Stock (including (i) the
granting of an option or any series of such options or entering into any
agreement for the sale, transfer or other disposition of Class B Preferred
Stock or (ii) the sale, transfer,

<PAGE> 28

assignment or other disposition of any securities or rights convertible into
or exchangeable for Class B Preferred Stock), whether voluntary or
involuntary, whether of record or Beneficial Ownership, and whether by
operation of law or otherwise (including, but not limited to, any transfer
of an interest in other entities that results in a change in the Beneficial
Ownership of shares of Class B Preferred Stock). The term "TRANSFERS" and
"TRANSFERRED" shall have correlative meanings.

"TRANSFER AGENT" means such transfer agent as may be designated by the Board
of Directors or their designee as the transfer agent for the Class B
Preferred Stock; provided, that if the Corporation has not designated a
transfer agent then the Corporation shall act as the transfer agent for the
Class B Preferred Stock.

"TRUST" shall mean the trust created pursuant to Section 11.3 of this
Article.

"TRUSTEE" shall mean the Person unaffiliated with either the Corporation or
the Prohibited Transferee that is appointed by the Corporation to serve as
trustee of the Trust.

"VOTING PREFERRED STOCK" shall have the meaning set forth in Section 9 of
this Article.

3. DIVIDENDS.

(a) The holders of Class B Preferred Stock shall be entitled to
receive, when and as declared by the Board of Directors out of funds legally
available for that purpose, cumulative dividends payable in cash in an amount
per share of Class B Preferred Stock equal to the greater of (i) the base
dividend of $1.78125 per quarter (the "Base Rate") or (ii) the cash dividends
declared on the number of shares of Common Stock, or portion thereof, into which
a share of Class B Preferred Stock is convertible. The dividends payable with
respect to the Initial Dividend Period shall be determined solely by reference
to the Base Rate. The amount referred to in clause (ii) of this paragraph (a)
with respect to each succeeding Dividend Period shall be determined as of the
applicable Dividend Payment Date by multiplying the number of shares of Common
Stock, or portion thereof calculated to the fourth decimal point, into which a
share of Class B Preferred Stock would be convertible at the opening of business
on such Dividend Payment Date (based on the Conversion Price then in effect) by
the aggregate cash dividends payable or paid for such Dividend Period in respect
of a share of Common Stock outstanding as of the record date for the payment of
dividends on the Common Stock with respect to such Dividend Period. If (A) the
Corporation pays a cash dividend on the Common Stock after the Dividend Payment
Date for the corresponding Dividend Period and (B) the dividend on the Class B
Preferred Stock for such Dividend Period calculated pursuant to clause (ii) of
this paragraph (a), taking into account the Common Stock dividend referenced in
clause (A), exceeds the dividend previously declared on the Class B Preferred
Stock for such Dividend Period, the Corporation shall pay an additional dividend
to the holders of the Class B Preferred Stock on the date that the Common Stock
dividend referenced in clause (A) is paid, in an amount equal to the difference
between the dividend calculated pursuant to clause (B) and the dividends
previously declared on the Class B Preferred Stock with respect to such Dividend
Period. Such dividends shall be cumulative from the Issue Date, whether or not
in any Dividend Period or Periods such dividends shall be declared or there
shall be funds of the Corporation legally available for the payment of such
dividends, and shall be payable quarterly in arrears on the Dividend Payment
Dates, commencing on the first Dividend Payment Date after the Issue Date. Each
such dividend shall be payable in arrears to the holders of record of the Class
B Preferred Stock, as they appear on the stock records of the Corporation at the
close of business on a record date fixed by the Board of Directors which shall
be not more than 60 days prior to the applicable Dividend Payment Date and,
within such 60 day period, shall be the same date as the record date for the
regular quarterly dividend payable with respect to the Common Stock for the
Dividend Period to which such Dividend Payment Date relates (or, if there is no
such record date for Common Stock, then such date as the Board of Directors may
fix). Accumulated, accrued and unpaid dividends for any past Dividend Periods
may be declared and paid at any time, without reference to any regular Dividend
Payment Date, to holders of record on such date, which date shall not precede by
more than 45 days the payment date thereof, as may be fixed by the Board of
Directors.

Upon a final administrative determination by the Internal Revenue
Service that the Corporation does not qualify as a real estate investment trust
in accordance with Section 856 of the Code, the Base Rate set forth in (a)(i)
will be increased to $3.03125 until such time as the Corporation regains its
status as a real estate investment

<PAGE> 29

trust; provided, however, that if the Corporation contests its loss of real
estate investment trust status in Federal Court, following its receipt of an
opinion of nationally recognized tax counsel to the effect that there is a
reasonable basis to contest such loss of status, the Base Rate shall not be
increased during the pendency of such judicial proceeding; provided further,
however, that upon a final judicial determination in Federal Tax Court, Federal
District Court or the Federal Claims Court that the Corporation does not qualify
as a real estate investment trust, the Base Rate will be increased as stated
above from the date of such judicial determination.

(b) The amount of dividends payable per share of Class B Preferred
Stock for the Initial Dividend Period, or any other period shorter than a full
Dividend Period, shall be computed ratably on the basis of twelve 30day months
and a 360day year. Holders of Class B Preferred Stock shall not be entitled to
any dividends, whether payable in cash, property or stock, in excess of
cumulative dividends, as herein provided, on the Class B Preferred Stock. No
interest, or sum of money in lieu of interest, shall be payable in respect of
any dividend payment or payments on the Class B Preferred Stock that may be in
arrears.

(c) So long as any of the shares of Class B Preferred Stock are
outstanding, except as described in the immediately following sentence, no
dividends shall be declared or paid or set apart for payment by the Corporation
and no other distribution of cash or other property shall be declared or made
directly or indirectly by the Corporation with respect to any class or series of
Parity Stock for any period unless dividends equal to the full amount of
accumulated, accrued and unpaid dividends have been or contemporaneously are
declared and paid or declared and a sum sufficient for the payment thereof has
been or contemporaneously is set apart for such payment on the Class B Preferred
Stock for all Dividend Periods terminating on or prior to the Dividend Payment
Date with respect to such class or series of Parity Stock. When dividends are
not paid in full or a sum sufficient for such payment is not set apart, as
aforesaid, all dividends declared upon the Class B Preferred Stock and all
dividends declared upon any other class or series of Parity Stock shall be
declared ratably in proportion to the respective amounts of dividends
accumulated, accrued and unpaid on the Class B Preferred Stock and accumulated,
accrued and unpaid on such Parity Stock.

(d) So long as any of the shares of Class B Preferred Stock are
outstanding, no dividends (other than dividends or distributions paid in shares
of or options, warrants or rights to subscribe for or purchase shares of Junior
Stock) shall be declared or paid or set apart for payment by the Corporation and
no other distribution of cash or other property shall be declared or made
directly or indirectly by the Corporation with respect to any shares of Junior
Stock, nor shall any shares of Junior Stock be redeemed, purchased or otherwise
acquired (other than a redemption, purchase or other acquisition of Common Stock
made for purposes of an employee incentive or benefit plan of the Corporation or
any subsidiary) for any consideration (or any moneys be paid to or made
available for a sinking fund for the redemption of any shares of any such stock)
directly or indirectly by the Corporation (except by conversion into or exchange
for Junior Stock), nor shall any other cash or other property otherwise be paid
or distributed to or for the benefit of any holder of shares of Junior Stock in
respect thereof, directly or indirectly, by the Corporation unless in each case
(i) the full cumulative dividends (including all accumulated, accrued and unpaid
dividends) on all outstanding shares of Class B Preferred Stock and any other
Parity Stock of the Corporation shall have been paid or such dividends have been
declared and set apart for payment for all past Dividend Periods with respect to
the Class B Preferred Stock and all past dividend periods with respect to such
Parity Stock and (ii) sufficient funds shall have been paid or set apart for the
payment of the full dividend for the current Dividend Period with respect to the
Class B Preferred Stock and the current dividend period with respect to such
Parity Stock.

<PAGE> 30

4. LIQUIDATION PREFERENCE.

(a) In the event of any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, before any payment or
distribution of the Corporation (whether capital or surplus) shall be made to or
set apart for the holders of Junior Stock, the holders of shares of Class B
Preferred Stock shall be entitled to receive One Hundred Dollars ($100) per
share of Class B Preferred Stock (the "Liquidation Preference"), plus an amount
equal to all dividends (whether or not earned or declared) accumulated, accrued
and unpaid thereon to the date of final distribution to such holders; but such
holders shall not be entitled to any further payment. Until the holders of the
Class B Preferred Stock have been paid the Liquidation Preference in full, plus
an amount equal to all dividends (whether or not earned or declared)
accumulated, accrued and unpaid thereon to the date of final distribution to
such holders, no payment will be made to any holder of Junior Stock upon the
liquidation, dissolution or winding up of the Corporation. If, upon any
liquidation, dissolution or winding up of the Corporation, the assets of the
Corporation, or proceeds thereof, distributable among the holders of Class B
Preferred Stock shall be insufficient to pay in full the preferential amount
aforesaid and liquidating payments on any other shares of any class or series of
Parity Stock, then such assets, or the proceeds thereof, shall be distributed
among the holders of Class B Preferred Stock and any such other Parity Stock
ratably in the same proportion as the respective amounts that would be payable
on such Class B Preferred Stock and any such other Parity Stock if all amounts
payable thereon were paid in full. For the purposes of this Section 4, (i) a
consolidation or merger of the Corporation with one or more corporations, (ii) a
sale or transfer of all or substantially all of the Corporation's assets, or
(iii) a statutory share exchange shall not be deemed to be a liquidation,
dissolution or winding up, voluntary or involuntary, of the Corporation.

(b) Upon any liquidation, dissolution or winding up of the Corporation,
after payment shall have been made in full to the holders of Class B Preferred
Stock and any Parity Stock, as provided in this Section 4, any other series or
class or classes of Junior Stock 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 B Preferred Stock and any Parity Stock shall not be
entitled to share therein.

5. REDEMPTION AT THE OPTION OF THE CORPORATION.

(a) Shares of Class B Preferred Stock shall not be redeemable by the
Corporation prior to August 4, 2002. On and after August 4, 2002, the
Corporation, at its option, may redeem shares of Class B Preferred Stock, in
whole or from time to time in part, at a redemption price payable in cash equal
to 100% of the Liquidation Preference thereof, plus all accrued and unpaid
dividends to the Call Date.

(b) Shares of Class B Preferred Stock shall be redeemed by the
Corporation on the date specified in the notice to holders required under
paragraph (d) of this Section 5 (the "Call Date"). The Call Date shall be
selected by the Corporation, shall be specified in the notice of redemption and
shall be not less than 30 days nor more than 60 days after the date notice of
redemption is sent by the Corporation.

(c) If full cumulative dividends on all outstanding shares of Class B
Preferred Stock and any other class or series of Parity Stock of the Corporation
have not been paid or declared and set apart for payment, no shares of Class B
Preferred Stock may be redeemed unless all outstanding shares of Class B
Preferred Stock are simultaneously redeemed and neither the Corporation nor any
affiliate of the Corporation may purchase or acquire shares of Class B Preferred
Stock, otherwise than pursuant to a purchase or exchange offer made on the same
terms to all holders of shares of Class B Preferred Stock.

(d) If the Corporation shall redeem shares of Class B Preferred Stock
pursuant to paragraph (a) of this Section 5, notice of such redemption shall be
given to each holder of record of the shares to be redeemed. Such notice shall
be provided by first class mail, postage prepaid, at such holder's address as
the same appears on the stock records of the Corporation.
Neither the failure to mail any notice required by this paragraph (d), nor any
defect therein or in the mailing thereof to any particular holder, shall affect
the sufficiency of the notice or the validity of the proceedings for redemption
with respect to the other holders. Any notice which was mailed in the manner
herein provided shall be conclusively presumed to have been duly given on the
date mailed whether or not the holder receives the notice. Each such notice
shall state, as appropriate: (1) the Call Date; (2) the number of

<PAGE> 31

shares of Class B Preferred Stock to be redeemed and, if fewer than all such
shares held by such holder are to be redeemed, the number of such shares to be
redeemed from such holder; (3) the place or places at which certificates for
such shares are to be surrendered for cash; and (4) the thencurrent Conversion
Price. Notice having been mailed as aforesaid, from and after the Call Date
(unless the Corporation shall fail to make available the amount of cash
necessary to effect such redemption), (i) except as otherwise provided herein,
dividends on the shares of Class B Preferred Stock so called for redemption
shall cease to accumulate or accrue on the shares of Class B Preferred Stock
called for redemption (except that, in the case of a Call Date after a dividend
record date and prior to the related Dividend Payment Date, holders of Class B
Preferred Stock on the dividend record date will be entitled on such Dividend
Payment Date to receive the dividend payable on such shares), (ii) said shares
shall no longer be deemed to be outstanding, and (iii) all rights of the holders
thereof as holders of Class B Preferred Stock of the Corporation shall cease
(except the rights to receive the cash payable upon such redemption, without
interest thereon, upon surrender and endorsement of their certificates if so
required and to receive any dividends payable thereon). The Corporation's
obligation to make available the redemption price in accordance with the
preceding sentence shall be deemed fulfilled if, on or before the Call Date, the
Corporation shall deposit with a bank or trust company (which may be an
affiliate of the Corporation) that has, or is an affiliate of a bank or trust
company that has, a capital and surplus of at least $50,000,000, such amount of
cash as is necessary for such redemption, in trust, with irrevocable
instructions that such cash be applied to the redemption of the shares of Class
B Preferred Stock so called for redemption. No interest shall accrue for the
benefit of the holders of shares of Class B Preferred Stock to be redeemed on
any cash so set aside by the Corporation. Subject to applicable escheat laws,
any such cash unclaimed at the end of two years from the Call Date shall revert
to the general funds of the Corporation, after which reversion the holders of
shares of Class B Preferred Stock so called for redemption shall look only to
the general funds of the Corporation for the payment of such cash.

As promptly as practicable after the surrender in accordance with such
notice of the certificates for any such shares of Class B Preferred Stock to be
so redeemed (properly endorsed or assigned for transfer, if the Corporation
shall so require and the notice shall so state), such certificates shall be
exchanged for cash (without interest thereon) for which such shares have been
redeemed in accordance with such notice. If fewer than all the outstanding
shares of Class B Preferred Stock are to be redeemed, shares to be redeemed
shall be selected by the Corporation from outstanding shares of Class B
Preferred Stock not previously called for redemption by lot or, with respect to
the number of shares of Class B Preferred Stock held of record by each holder of
such shares, pro rata (as nearly as may be) or by any other method as may be
determined by the Board of Directors in its discretion to be equitable. If fewer
than all the shares of Class B Preferred Stock represented by any certificate
are redeemed, then a new certificate representing the unredeemed shares shall be
issued without cost to the holders thereof.

6. STATUS OF REACQUIRED STOCK.

All shares of Class B Preferred Stock which shall have been issued and
reacquired in any manner by the Corporation (including shares of Class B
Preferred Stock which have been surrendered for conversion into Common Stock)
shall be returned to the status of authorized, but unissued shares of Class B
Preferred Stock.

7. CONVERSION.

At any time on or after August 4, 1998. Holders of shares of Class B
Preferred Stock shall have the right to convert all or a portion of such shares
into shares of Common Stock, as follows:

(a) Subject to and upon compliance with the provisions of this Section
7, a holder of shares of Class B Preferred Stock shall have the right, at such
holder's option, at any time on or after August 4, 1998 to convert such shares,
in whole or in part, into the number of fully paid and nonassessable shares of
authorized but previously unissued shares of Common Stock per each share of
Class B Preferred Stock obtained by dividing the Liquidation Preference
(excluding any accumulated, accrued and unpaid dividends) per share of Class B
Preferred Stock by the Conversion Price (as in effect at the time and on the
date provided for in the last subparagraph of paragraph (b) of this Section 7)
and by surrendering such shares to be converted, such surrender to be made in
the manner provided in paragraph (b) of this Section 7; provided, however, that
the right to convert shares of Class B Preferred Stock called for redemption
pursuant to Section 5 shall terminate at the close of business on the Call Date
fixed for such redemption, unless the Corporation shall default in making
payment of cash payable upon such redemption under Section 5 of this Article.

<PAGE> 32

(b) In order to exercise the conversion right, the holder of each share
of Class B Preferred Stock to be converted shall surrender the certificate
representing such share, duly endorsed or assigned to the Corporation or in
blank, at the office of the Transfer Agent, accompanied by written notice to the
Corporation that the holder thereof elects to convert such share of Class B
Preferred Stock. Unless the shares issuable on conversion are to be issued in
the same name as the name in which such share of Class B Preferred Stock is
registered, each share surrendered for conversion shall be accompanied by
instruments of transfer, in form satisfactory to the Corporation, duly executed
by the holder or such holder's duly authorized attorney and an amount sufficient
to pay any transfer or similar tax (or evidence reasonably satisfactory to the
Corporation demonstrating that such taxes have been paid).

Holders of shares of Class B Preferred Stock at the close of business on a
dividend payment record date shall be entitled to receive the dividend payable
on such shares on the corresponding Dividend Payment Date notwithstanding the
conversion thereof following such dividend payment record date and prior to such
Dividend Payment Date. Except as provided above, the Corporation shall make no
payment or allowance for unpaid dividends, whether or not in arrears, on
converted shares or for dividends on the shares of Common Stock issued upon such
conversion.

As promptly as practicable after the surrender of certificates for shares of
Class B Preferred Stock as aforesaid, the Corporation shall issue and shall
deliver at such office to such holder, or send on such holder's written order, a
certificate or certificates for the number of full shares of Common Stock
issuable upon the conversion of such shares of Class B Preferred Stock in
accordance with provisions of this Section 7, and any fractional interest in
respect of a share of Common Stock arising upon such conversion shall be settled
as provided in paragraph (c) of this Section 7.

Each conversion shall be deemed to have been effected immediately prior to
the close of business on the date on which the certificates for shares of Class
B Preferred Stock shall have been surrendered and such notice received by the
Corporation as aforesaid, and the Person or Persons in whose name or names any
certificate or certificates for shares of Common Stock shall be issuable upon
such conversion shall be deemed to have become the holder or holders of record
of the shares represented thereby at such time on such date and such conversion
shall be at the Conversion Price in effect at such time on such date unless the
stock transfer books of the Corporation shall be closed on that date, in which
event such Person or Persons shall be deemed to have become such holder or
holders of record at the close of business on the next succeeding day on which
such stock transfer books are open, but such conversion shall be at the
Conversion Price in effect on the date on which such shares shall have been
surrendered and such notice received by the Corporation. If the dividend payment
record date for the Class B Preferred Stock and Common Stock do not coincide,
and the preceding sentence does not operate to ensure that a holder of shares of
Class B Preferred Stock whose shares are converted into Common Stock does not
receive dividends on both the shares of Class B Preferred Stock and the Common
Stock into which such shares are converted for the same Dividend Period, then
notwithstanding anything herein to the contrary, it is the intent, and the
Transfer Agent is authorized to ensure that no conversion after the earlier of
such record dates will be accepted until after the latter of such record dates.

(c) No fractional share of Common Stock or scrip representing fractions
of a share of Common Stock shall be issued upon conversion of the shares of
Class B Preferred Stock. Instead of any fractional interest in a share of Common
Stock that would otherwise be deliverable upon the conversion of shares of Class
B Preferred Stock, the Corporation shall pay to the holder of such share an
amount in cash based upon the Current Market Price of the Common Stock on the
Trading Day immediately preceding the date of conversion.
If more than one share shall be surrendered for conversion at one time by the
same holder, the number of full shares of Common Stock issuable upon conversion
thereof shall be computed on the basis of the aggregate number of shares of
Class B Preferred Stock so surrendered.

(d) The Conversion Price shall be adjusted from time to time as
follows:

(i) If the Corporation shall after the Issue Date (A) pay a
dividend or make a distribution on its capital stock in shares of Common Stock,
(B) subdivide its outstanding Common Stock into a greater number

<PAGE> 33

of shares, (C) combine its outstanding Common Stock into a smaller number of
shares or (D) issue any shares of capital stock by reclassification of its
outstanding Common Stock, the Conversion Price in effect at the opening of
business on the day following the date fixed for the determination of
stockholders entitled to receive such dividend or distribution or at the opening
of business on the day following the day on which such subdivision, combination
or reclassification becomes effective, as the case may be, shall be adjusted so
that the holder of any share of Class B Preferred Stock thereafter surrendered
for conversion shall be entitled to receive the number of shares of Common Stock
(or fraction of a share of Common Stock) that such holder would have owned or
have been entitled to receive after the happening of any of the events described
above had such share of Class B Preferred Stock been converted immediately prior
to the record date in the case of a dividend or distribution or the effective
date in the case of a subdivision, combination or reclassification. An
adjustment made pursuant to this paragraph (d)(i) of this Section 7 shall become
effective immediately after the opening of business on the day next following
the record date (except as provided in paragraph (h) below) in the case of a
dividend or distribution and shall become effective immediately after the
opening of business on the day next following the effective date in the case of
a subdivision, combination or reclassification.

(ii) If the Corporation shall issue after the Issue Date rights,
options or warrants to all holders of Common Stock entitling them (for a period
expiring within 45 days after the record date described below in this paragraph
(d)(ii) of this Section 7) to subscribe for or purchase Common Stock at a price
per share less than the Fair Market Value per share of the Common Stock on the
record date for the determination of stockholders entitled to receive such
rights, options or warrants, then the Conversion Price in effect at the opening
of business on the day next following such record date shall be adjusted to
equal the price determined by multiplying (A) the Conversion Price in effect
immediately prior to the opening of business on the day following the date fixed
for such determination by (B) a fraction, the numerator of which shall be the
sum of (X) the number of shares of Common Stock outstanding on the close of
business on the date fixed for such determination and (Y) the number of shares
that could be purchased at such Fair Market Value from the aggregate proceeds to
the Corporation from the exercise of such rights, options or warrants for Common
Stock, and the denominator of which shall be the sum of (XX) the number of
shares of Common Stock outstanding on the close of business on the date fixed
for such determination and (YY) the number of additional shares of Common Stock
offered for subscription or purchase pursuant to such rights, options or
warrants. Such adjustment shall become effective immediately after the opening
of business on the day next following such record date (except as provided in
paragraph (h) below). In determining whether any rights, options or warrants
entitle the holders of Common Stock to subscribe for or purchase Common Stock at
less than such Fair Market Value, there shall be taken into account any
consideration received by the Corporation upon issuance and upon exercise of
such rights, options or warrants, the value of such consideration, if other than
cash, to be determined in good faith by the Board of Directors.

(iii) If the Corporation shall after the Issue Date make a
distribution on its Common Stock other than in cash or shares of Common Stock
(including any distribution in securities (other than rights, options or
warrants referred to in paragraph (d)(ii) of this Section 7)) (each of the
foregoing being referred to herein as a "distribution"), then the Conversion
Price in effect at the opening of business on the next day following the record
date for determination of stockholders entitled to receive such distribution
shall be adjusted to equal the price determined by multiplying (A) the
Conversion Price in effect immediately prior to the opening of business on the
day following the record date by (B) a fraction, the numerator of which shall be
the difference between (X) the number of shares of Common Stock outstanding on
the close of business on the record date and (Y) the number of shares determined
by dividing (aa) the aggregate value of the property being distributed by (bb)
the Fair Market Value per share of Common Stock on the record date, and the
denominator of which shall be the number of shares of Common Stock outstanding
on the close of business on the record date. Such adjustment shall become
effective immediately after the opening of business on the day next following
such record date (except as provided below). The value of the property being
distributed shall be as determined in good faith by the Board of Directors;
provided, however, if the property being distributed is a publicly traded
security, its value shall be calculated in accordance with the procedure for
calculating the Fair Market Value of a share of Common Stock (calculated for a
period of five consecutive Trading Days commencing on the twentieth Trading Day
after the distribution). Neither the issuance by the Corporation of rights,
options or warrants to subscribe for or purchase securities of the Corporation
nor the exercise thereof shall be deemed a distribution under this paragraph.

(iv) If after the Issue Date the Corporation shall acquire,
pursuant to an issuer or self tender

<PAGE> 34

offer, all or any portion of the outstanding Common Stock and such tender offer
involves the payment of consideration per share of Common Stock having a fair
market value (as determined in good faith by the Board of Directors), at the
last time (the "Expiration Time") tenders may be made pursuant to such offer,
that exceeds the Current Market Price per share of Common Stock on the Trading
Day next succeeding the Expiration Time, then the Conversion Price in effect on
the opening of business on the day next succeeding the Expiration Time shall be
adjusted to equal the price determined by multiplying (A) the Conversion Price
in effect immediately prior to the Expiration Time by (B) a fraction, the
numerator of which shall be (X) the number of shares of Common Stock outstanding
(including the shares acquired in the tender offer (the "Acquired Shares"))
immediately prior to the Expiration Time, multiplied by (Y) the Current Market
Price per share of Common Stock on the Trading Day next succeeding the
Expiration Time, and the denominator of which shall be the sum of (XX) the fair
market value (determined as aforesaid) of the aggregate consideration paid to
acquire the Acquired Shares and (YY) the product of (I) the number of shares of
Common Stock outstanding (less any Acquired Shares) at the Expiration Time,
multiplied by (II) the Current Market Price per share of Common Stock on the
Trading Day next succeeding the Expiration Time.

(v) No adjustment in the Conversion Price shall be required unless
such adjustment would require a cumulative increase or decrease of at least 1%
in such price; provided, however, that any adjustments that by reason of this
paragraph (d)(v) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment until made; and provided, further,
that any adjustment shall be required and made in accordance with the provisions
of this Section 7 (other than this paragraph (d)(v)) not later than such time as
may be required in order to preserve the taxfree nature of a distribution to the
holders of shares of Common Stock. Notwithstanding any other provisions of this
Section 7, the Corporation shall not be required to make any adjustment of the
Conversion Price for the issuance of (A) any shares of Common Stock pursuant to
any plan providing for the reinvestment of dividends or interest payable on
securities of the Corporation and the investment of optional amounts in shares
of Common Stock under such plan or (B) any options, rights or shares of Common
Stock pursuant to any stock option, stock purchase or other stockbased plan
maintained by the Corporation. All calculations under this Section 7 shall be
made to the nearest cent (with $.005 being rounded upward) or to the nearest
onetenth of a share (with .05 of a share being rounded upward), as the case may
be. Anything in this paragraph (d) of this Section 7 to the contrary
notwithstanding, the Corporation shall be entitled, to the extent permitted by
law, to make such reductions in the Conversion Price, in addition to those
required by this paragraph (d), as it in its discretion shall determine to be
advisable in order that any stock dividends, subdivision of shares,
reclassification or combination of shares, distribution of rights or warrants to
purchase stock or securities, or a distribution of other assets (other than cash
dividends) hereafter made by the Corporation to its stockholders shall not be
taxable, or if that is not possible, to diminish any income taxes that are
otherwise payable because of such event.

(e) If the Corporation shall be a party to any transaction (including
without limitation a merger, consolidation, statutory share exchange, issuer or
self tender offer for at least 30% of the shares of Common Stock outstanding,
sale of all or substantially all of the Corporation's assets or recapitalization
of the Common Stock, but excluding any transaction as to which paragraph (d)(i)
of this Section 7 applies) (each of the foregoing being referred to herein as a
"Transaction"), in each case as a result of which shares of Common Stock shall
be converted into the right to receive stock, securities or other property
(including cash or any combination thereof), each share of Class B Preferred
Stock which is not converted into the right to receive stock, securities or
other property in connection with such Transaction shall thereupon be
convertible into the kind and amount of shares of stock, securities and other
property (including cash or any combination thereof) receivable upon such
consummation by a holder of that number of shares of Common Stock into which one
share of Class B Preferred Stock was convertible immediately prior to such
Transaction (without giving effect to any Conversion Price adjustment pursuant
to Section 7(d)(iv) of this Article). The Corporation shall not be a party to
any Transaction unless the terms of such Transaction are consistent with the
provisions of this paragraph (e), and it shall not consent or agree to the
occurrence of any Transaction until the Corporation has entered into an
agreement with the successor or purchasing entity, as the case may be, for the
benefit of the holders of the Class B Preferred Stock that will contain
provisions enabling the holders of the Class B Preferred Stock that remain
outstanding after such Transaction to convert into the consideration received by
holders of Common Stock at the Conversion Price in effect immediately prior to
such Transaction. The provisions of this paragraph (e) shall similarly apply to
successive Transactions.

<PAGE> 35

(f) If:

(i) the Corporation shall declare a dividend (or any other
distribution) on the Common Stock (other than cash dividends and cash
distributions); or

(ii) the Corporation shall authorize the granting to all holders
of the Common Stock of rights or warrants to subscribe for or purchase any
shares of any class or series of capital stock or any other rights or warrants;
or

(iii) there shall be any reclassification of the outstanding
Common Stock or any consolidation or merger to which the Corporation is a party
and for which approval of any stockholders of the Corporation is required, or a
statutory share exchange, an issuer or self tender offer shall have been
commenced for at least 30% of the outstanding shares of Common Stock (or an
amendment thereto changing the maximum number of shares sought or the amount or
type of consideration being offered therefor shall have been adopted), or the
sale or transfer of all or substantially all of the assets of the Corporation as
an entirety; or

(iv) there shall occur the voluntary or involuntary liquidation,
dissolution or winding up of the Corporation,

then the Corporation shall cause to be filed with the Transfer Agent and shall
cause to be mailed to each holder of shares of Class B Preferred Stock at such
holder's address as shown on the stock records of the Corporation, as promptly
as possible, a notice stating (A) the record date for the payment of such
dividend, distribution or rights or warrants, or, if a record date is not
established, the date as of which the holders of Common Stock of record to be
entitled to such dividend, distribution or rights or warrants are to be
determined or (B) the date on which such reclassification, consolidation,
merger, statutory share exchange, sale, transfer, liquidation, dissolution or
winding up is expected to become effective, and the date as of which it is
expected that holders of Common Stock of record shall be entitled to exchange
their shares of Common Stock for securities or other property, if any,
deliverable upon such reclassification, consolidation, merger, statutory share
exchange, sale, transfer, liquidation, dissolution or winding up or (C) the date
on which such tender offer commenced, the date on which such tender offer is
scheduled to expire unless extended, the consideration offered and the other
material terms thereof (or the material terms of any amendment thereto). Failure
to give or receive such notice or any defect therein shall not affect the
legality or validity of the proceedings described in this Section 7.

(g) Whenever the Conversion Price is adjusted as herein provided, the
Corporation shall promptly file with the Transfer Agent an officer's certificate
setting forth the Conversion Price after such adjustment and setting forth a
brief statement of the facts requiring such adjustment which certificate shall
be conclusive evidence of the correctness of such adjustment absent manifest
error. Promptly after delivery of such certificate, the Corporation shall
prepare a notice of such adjustment of the Conversion Price setting forth the
adjusted Conversion Price and the effective date such adjustment becomes
effective and shall mail such notice of such adjustment of the Conversion Price
to each holder of shares of Class B Preferred Stock at such holder's last
address as shown on the stock records of the Corporation.

(h) In any case in which paragraph (d) of this Section 7 provides that
an adjustment shall become effective on the day next following the record date
for an event, the Corporation may defer until the occurrence of such event (A)
issuing to the holder of any share of Class B Preferred Stock converted after
such record date and before the occurrence of such event the additional Common
Stock issuable upon such conversion by reason of the adjustment required by such
event over and above the Common Stock issuable upon such conversion before
giving effect to such adjustment and (B) paying to such holder any amount of
cash in lieu of any fraction pursuant to paragraph (c) of this Section 7.

(i) There shall be no adjustment of the Conversion Price in case of the
issuance of any capital stock of the Corporation in a reorganization,
acquisition or other similar transaction except as specifically set forth in
this Section 7.

(j) If the Corporation shall take any action affecting the Common
Stock, other than action described in this Section 7, that in the opinion of the
Board of Directors would materially adversely affect the conversion rights of
the holders of Class B Preferred Stock, the Conversion Price for the Class B
Preferred Stock

<PAGE> 36

may be adjusted, to the extent permitted by law, in such manner, if any, and at
such time as the Board of Directors, in its sole discretion, may determine to be
equitable under the circumstances.

(k) The Corporation shall at all times reserve and keep available, free
from preemptive rights, out of the aggregate of its authorized but unissued
Common Stock solely for the purpose of effecting conversion of the Class B
Preferred Stock, the full number of shares of Common Stock deliverable upon the
conversion of all outstanding shares of Class B Preferred Stock not theretofore
converted into Common Stock. For purposes of this paragraph (k), the number of
shares of Common Stock that shall be deliverable upon the conversion of all
outstanding shares of Class B Preferred Stock shall be computed as if at the
time of computation all such outstanding shares were held by a single holder
(and without regard to the Ownership Limit set forth in the Charter of the
Corporation).

The Corporation covenants that any shares of Common Stock issued upon
conversion of the shares of Class B Preferred Stock shall be validly issued,
fully paid and nonassessable.

The Corporation shall use its best efforts to list the shares of Common
Stock required to be delivered upon conversion of the shares of Class B
Preferred Stock, prior to such delivery, upon each national securities exchange,
if any, upon which the outstanding shares of Common Stock are listed at the time
of such delivery.

(l) The Corporation will pay any and all documentary stamp or similar
issue or transfer taxes payable in respect of the issue or delivery of shares of
Common Stock or other securities or property on conversion or redemption of
shares of Class B Preferred Stock pursuant hereto; provided, however, that the
Corporation shall not be required to pay any tax that may be payable in respect
of any transfer involved in the issue or delivery of shares of Common Stock or
other securities or property in a name other than that of the holder of the
shares of Class B Preferred Stock to be converted or redeemed, and no such issue
or delivery shall be made unless and until the Person requesting such issue or
delivery has paid to the Corporation the amount of any such tax or established,
to the reasonable satisfaction of the Corporation, that such tax has been paid.

(m) In addition to any other adjustment required hereby, to the extent
permitted by law, the Corporation from time to time may decrease the Conversion
Price by any amount, permanently or for a period of at least twenty Business
Days, if the decrease is irrevocable during the period.

(n) Notwithstanding anything to the contrary contained in this Section
7, conversion of Class B Preferred Stock pursuant to this Section 7 shall be
permitted only to the extent that such conversion would not result in a
violation of the Ownership Restrictions (as defined in the Charter), after
taking into account any waiver of such limitation granted to any holder of the
shares of Class B Preferred Stock.

8. RANKING.

Any class or series of capital stock of the Corporation shall be deemed to
rank:

(a) prior or senior to the Class B Preferred Stock, as to the payment
of dividends and as to distribution of assets upon liquidation, dissolution or
winding up, if the holders of such class or series shall be entitled to the
receipt of dividends or of amounts distributable upon liquidation, dissolution
or winding up, as the case may be, in preference or priority to the holders of
Class B Preferred Stock ("Senior Stock");

(b) on a parity with the Class B Preferred Stock, as to the payment of
dividends and as to distribution of assets upon liquidation, dissolution or
winding up, whether or not the dividend rates, dividend payment dates or
redemption or liquidation prices per share thereof be different from those of
the Class B Preferred Stock, if the holders of such class of stock or series and
the Class B Preferred Stock shall be entitled to the receipt of dividends and of
amounts distributable upon liquidation, dissolution or winding up in proportion
to their respective amounts of accrued and unpaid dividends per share or
liquidation preferences, without preference or priority one over the other
("Parity Stock"); and

<PAGE> 37

of assets upon liquidation, dissolution or winding up, if such stock or series
shall be Common Stock or if the holders of Class B Preferred Stock shall be
entitled to receipt of dividends or of amounts distributable upon liquidation,
dissolution or winding up, as the case may be, in preference or priority to the
holders of shares of such class or series ("Junior Stock").

9. VOTING.

(a) If and whenever (i) six quarterly dividends (whether or not
consecutive) payable on the Class B Preferred Stock or any series or class of
Parity Stock shall be in arrears (which shall, with respect to any such
quarterly dividend, mean that any such dividend has not been paid in full),
whether or not earned or declared, or (ii) for two consecutive quarterly
dividend periods the Corporation fails to pay dividends on the Common Stock in
an amount per share at least equal to $0.4625 (subject to adjustment consistent
with any adjustment of the Conversion Price pursuant to Section 7(d) of this
Article) (the "Base Common Stock Dividend") the number of directors then
constituting the Board of Directors shall be increased by two (in the case of an
arrearage in dividends described in clause (i)) or one additional director (in
the case of an arrearage in dividends described in clause (ii)) (in each case if
not already increased by reason of similar types of provisions with respect to
Voting Preferred Stock (as defined below)) and the holders of shares of Class B
Preferred Stock, together with the holders of shares of every other series or
class of Parity Stock (any other such series, the "Voting Preferred Stock"),
voting as a single class regardless of series, shall be entitled to elect the
two additional directors (in the case of an arrearage in dividends described in
clause (i)) or one (in the case of an arrearage in dividends described in clause
(ii)) to serve on the Board of Directors at any annual meeting of stockholders
or special meeting held in place thereof, or at a special meeting of the holders
of the Class B Preferred Stock and the Voting Preferred Stock called as
hereinafter provided. Whenever (1) in the case of an arrearage in dividends
described in clause (i), all arrears in dividends on the Class B Preferred Stock
and the Voting Preferred Stock then outstanding shall have been paid and
dividends thereon for the current quarterly dividend period shall have been paid
or declared and set apart for payment, or 2) in the case of an arrearage in
dividends described in clause (ii), the Corporation makes a quarterly dividend
payment on the Common Stock in an amount per share equal to or exceeding the
Base Common Stock Dividend, then the right of the holders of the Class B
Preferred Stock and the Voting Preferred Stock to elect such additional two
directors (in the case of an arrearage in dividends described in clause (i)) or
one additional director (in the case of an arrearage in dividends described in
clause (ii)) shall cease (but subject always to the same provision for the
vesting of such voting rights in the case of any similar future arrearages), and
the terms of office of all Persons elected as directors by the holders of the
Class B Preferred Stock and the Voting Preferred Stock shall forthwith terminate
and the number of directors constituting the Board of Directors shall be reduced
accordingly. At any time after such voting power shall have been so vested in
the holders of Class B Preferred Stock and the Voting Preferred Stock, if
applicable, the Secretary of the Corporation may, and upon the written request
of any holder of Class B Preferred Stock (addressed to the Secretary at the
principal office of the Corporation) shall, call a special meeting of the
holders of the Class B Preferred Stock and of the Voting Preferred Stock for the
election of the two directors (in the case of an arrearage in dividends
described in clause (i)) or one director (in the case of an arrearage in
dividends described in clause (ii)) to be elected by them as herein provided,
such call to be made by notice similar to that provided in the Bylaws of the
Corporation for a special meeting of the stockholders or as required by law. If
any such special meeting required to be called as above provided shall not be
called by the Secretary within 20 days after receipt of any such request, then
any holder of Class B Preferred Stock may call such meeting, upon the notice
above provided, and for that purpose shall have access to the stock books of the
Corporation. The directors or director elected at any such special meeting shall
hold office until the next annual meeting of the stockholders or special meeting
held in lieu thereof if such office shall not have previously terminated as
above provided. If any vacancy shall occur among the directors elected by the
holders of the Class B Preferred Stock and the Voting Preferred Stock, a
successor shall be elected by the Board of Directors, upon the nomination of the
thenremaining director elected by the holders of the Class B Preferred Stock and
the Voting Preferred Stock or the successor of such remaining director, to serve
until the next annual meeting of the stockholders or special meeting held in
place thereof if such office shall not have previously terminated as provided
above.

(b) So long as any shares of Class B Preferred Stock are outstanding,
in addition to any other vote or consent of stockholders required by law or by
the Charter of the Corporation, the affirmative vote of at least 662/3% of the
votes entitled to be cast by the holders of the Class B Preferred Stock, given
in Person or by proxy, either in writing without a meeting or by vote at any
meeting called for the purpose, shall be necessary for effecting or validating:

<PAGE> 38

(i) Any amendment, alteration or repeal of any of the provisions
of these Articles Supplementary, the Charter or the ByLaws of the Corporation
that materially adversely affects the voting powers, rights or preferences of
the holders of the Class B Preferred Stock; provided, however, that the
amendment of the provisions of the Charter so as to authorize or create, or to
increase the authorized amount of, any Junior Stock or any shares of any class
of Parity Stock shall not be deemed to materially adversely affect the voting
powers, rights or preferences of the holders of Class B Preferred Stock; or

(ii) The authorization, creation of, the increase in the
authorized amount of, or issuance of , any shares of any class of Senior Stock
or any security convertible into shares of any class of Senior Stock (whether or
not such class of Senior Stock is currently authorized); provided, however, that
no such vote of the holders of Class B Preferred Stock shall be required if, at
or prior to the time when such amendment, alteration or repeal is to take
effect, or when the issuance of any such prior shares or convertible security is
to be made, as the case may be, provision is made for the redemption of all
shares of Class B Preferred Stock at the time outstanding to the extent such
redemption is authorized by Section 5 of this Article.

For purposes of the foregoing provisions and all other voting rights under
these Articles Supplementary, each share of Class B Preferred Stock shall have
one (1) vote per share, except that when any other class or series of preferred
stock shall have the right to vote with the Class B Preferred Stock as a single
class on any matter, then the Class B Preferred Stock and such other class or
series shall have with respect to such matters one (1) vote per $100 of stated
liquidation preference. Except as otherwise required by applicable law or as set
forth herein, the Class B Preferred Stock shall not have any relative,
participating, optional or other special voting rights and powers other than as
set forth herein, and the consent of the holders thereof shall not be required
for the taking of any corporate action.

10. RECORD HOLDERS.

The Corporation and the Transfer Agent may deem and treat the record holder
of any share of Class B Preferred Stock as the true and lawful owner thereof for
all purposes, and neither the Corporation nor the Transfer Agent shall be
affected by any notice to the contrary.

11.1 RESTRICTIONS ON OWNERSHIP AND TRANSFERS.

(A) LIMITATION ON BENEFICIAL OWNERSHIP. Except as provided in
Section 11.8, from and after the Issue Date, no Person (other than the Initial
Holder or a Look-Through Entity) shall Beneficially Own shares of Class B
Preferred Stock in excess of the Ownership Limit, the Initial Holder shall not
Beneficially Own shares of Class B Preferred Stock in excess of the Initial
Holder Limit and no Look-Through Entity shall Beneficially Own shares of Class B
Preferred Stock in excess of the Look-Through Ownership Limit.

(B) TRANSFERS IN EXCESS OF OWNERSHIP LIMIT. Except as provided in
Section 11.8, from and after the Issue Date (and subject to Section 11.12), any
Transfer (whether or not such Transfer is the result of transactions entered
into through the facilities of the NYSE or other securities exchange or an
automated interdealer quotation system) that, if effective, would result in any
Person (other than the Initial Holder or a Look-Through Entity) Beneficially
Owning shares of Class B Preferred Stock in excess of the Ownership Limit shall
be void AB INITIO as to the Transfer of such shares of Class B Preferred Stock
that would be otherwise Beneficially Owned by such Person in excess of the
Ownership Limit, and the intended transferee shall acquire no rights in such
shares of Class B Preferred Stock.

(C) TRANSFERS IN EXCESS OF INITIAL HOLDER LIMIT. Except as provided
in Section 11.8, from and after the Issue Date (and subject to Section 11.12),
any Transfer (whether or not such Transfer is the result of transactions entered
into through the facilities of the NYSE or other securities exchange or an
automated interdealer quotation system) that, if effective, would result in the
Initial Holder Beneficially Owning shares of Class B Preferred Stock in excess
of the Initial Holder Limit shall be void AB INITIO as to the Transfer of such
shares of Class B Preferred Stock that would be otherwise Beneficially Owned by
the Initial Holder in excess of the Initial Holder

<PAGE> 39

limit, and the Initial Holder shall acquire no rights in such shares of Class B
Preferred Stock.

(D) TRANSFERS IN EXCESS OF LOOK-THROUGH OWNERSHIP LIMIT. Except as
provided in Section 11.8 from and after the Issue Date (and subject to Section
11.12), any Transfer (whether or not such Transfer is the result of transactions
entered into through the facilities of the NYSE or other securities exchange or
an automated interdealer quotation system) that, if effective, would result in
any Look-Through Entity Beneficially Owning shares of Class B Preferred Stock in
excess of the Look-Through Ownership limit shall be void AB INITIO as to the
Transfer of such shares of Class B Preferred Stock that would be otherwise
Beneficially Owned by such Look-Through Entity in excess of the Look-Through
Ownership Limit and such Look-Through Entity shall acquire no rights in such
shares of Class B Preferred Stock.

(E) TRANSFERS RESULTING IN "CLOSELY HELD" STATUS. From and after the
Issue Date, any Transfer that, if effective would result in the Corporation
being "closely held" within the meaning of Section 856(h) of the Code, or would
otherwise result in the Corporation failing to qualify as a REIT (including,
without limitation, a Transfer or other event that would result in the
Corporation owning (directly or constructively) an interest in a tenant that is
described in Section 856(d)(2)(B) of the Code if the income derived by the
Corporation from such tenant would cause the Corporation to fail to satisfy any
of the gross income requirements of Section 856(c) of the Code) shall be void AB
INITIO as to the Transfer of shares of Class B Preferred Stock that would cause
the Corporation (i) to be "closely held" within the meaning of Section 856(h) of
the Code or (ii) otherwise fail to qualify as a REIT, as the case may be, and
the intended transferee shall acquire no rights in such shares of Class B
Preferred Stock.

(F) SEVERABILITY ON VOID TRANSACTIONS. A Transfer of a share of Class B
Preferred Stock that is null and void under Sections 11.1(B), (C), (D), or (E)
of this Article because it would, if effective, result in (i) the ownership of
Class B Preferred Stock in excess of the Initial Holder Limit, the Ownership
Limit, or the Look-Through Ownership Limit, (ii) the Corporation being "closely
held" within the meaning of Section 856(h) of the Code or (iii) the Corporation
otherwise failing to qualify as a REIT, shall not adversely affect the validity
of the Transfer of any other share of Class B Preferred Stock in the same or any
other related transaction.

11.2 REMEDIES FOR BREACH. If the Board of Directors or a committee thereof
shall at any time determine in good faith that a Transfer or other event has
taken place in violation of Section 11.1 of this Article or that a Person
intends to acquire or has attempted to acquire Beneficial Ownership of any
shares of Class B Preferred Stock in violation of Section 11.1 of this Article
(whether or not such violation is intended), the Board of Directors or a
committee thereof shall be empowered to take any action as it deems advisable to
refuse to give effect to or to prevent such Transfer or other event, including,
but not limited to, refusing to give effect to such Transfer or other event on
the books of the Corporation, causing the Corporation to redeem such shares at
the then current Market Price and upon such terms and conditions as may be
specified by the Board of Directors in its sole discretion (including, but not
limited to, by means of the issuance of longterm indebtedness for the purpose of
such redemption), demanding the repayment of any distributions received in
respect of shares of Class B Preferred Stock acquired in violation of Section
11.1 of this Article or instituting proceedings to enjoin such Transfer or to
rescind such Transfer or attempted Transfer; PROVIDED, HOWEVER, that any
Transfers or attempted Transfers (or in the case of events other than a
Transfer, Beneficial Ownership) in violation of Section 11.1 of this Article,
regardless of any action (or nonaction) by the Board of Directors or such
committee, (a) shall be void AB INITIO or (b) shall automatically result in the
transfer described in Section 11.3 of this Article; PROVIDED, FURTHER, that the
provisions of this Section 11.2 shall be subject to the provisions of Section
11.12 of this Article; PROVIDED, FURTHER, that neither the Board of Directors
nor any committee thereof may exercise such authority in a manner that
interferes with any ownership or transfer of Class B Preferred Stock that is
expressly authorized pursuant to Section 11.8(d) of this Article.

<PAGE> 40

11.3. TRANSFER IN TRUST.

(A) ESTABLISHMENT OF TRUST. If, notwithstanding the other provisions
contained in this Article, at any time after the Issue Date there is a purported
Transfer (an "EXCESS TRANSFER") (whether or not such Transfer is the result of
transactions entered into through the facilities of the NYSE or other securities
exchange or an automated interdealer quotation system) or other change in the
capital structure of the Corporation (including, but not limited to, any
redemption of Preferred Stock) or other event (including, but not limited to,
any acquisition of any share of Equity Stock) such that (a) any Person (other
than the Initial Holder or a Look-Through Entity) would Beneficially Own shares
of Class B Preferred Stock in excess of the Ownership Limit, or (b) the Initial
Holder would Beneficially Own shares of Class B Preferred Stock in excess of the
Initial Holder Limit, or (c) any Person that is a Look-Through Entity would
Beneficially Own shares of Class B Preferred Stock in excess of the Look-Through
Ownership Limit (in any such event, the Person, Initial Holder or Look-Through
Entity that would Beneficially Own shares of Class B Preferred Stock in excess
of the Ownership Limit, the Initial Holder Limit or the Look-Through Entity
Limit, respectively, is referred to as a "PROHIBITED TRANSFEREE"), then, except
as otherwise provided in Section 11.8 of this Article, such shares of Class B
Preferred Stock in excess of the Ownership Limit, the Initial Holder Limit or
the Look-Through Ownership Limit, as the case may be, (rounded up to the nearest
whole share) shall be automatically transferred to a Trustee in his capacity as
trustee of a Trust for the exclusive benefit of one or more Charitable
Beneficiaries. Such transfer to the Trustee shall be deemed to be effective as
of the close of business on the business day prior to the Excess Transfer,
change in capital structure or another event giving rise to a potential
violation of the Ownership Limit, the Initial Holder Limit or the Look-Through
Entity Ownership Limit.

(C) STATUS OF SHARES HELD BY THE TRUSTEE. Shares of Class B Preferred
Stock held by the Trustee shall be issued and outstanding shares of capital
stock of the Corporation. Except to the extent provided in Section 11.3(E), the
Prohibited Transferee shall have no rights in the Class B Preferred Stock held
by the Trustee, and the Prohibited Transferee shall not benefit economically
from ownership of any shares held in trust by the Trustee, shall have no rights
to dividends and shall not possess any rights to vote or other rights
attributable to the shares held in the Trust.

(D) DIVIDEND AND VOTING RIGHTS. The Trustee shall have all voting
rights and rights to dividends with respect to shares of Class B Preferred Stock
held in the Trust, which rights shall be exercised for the benefit of the
Charitable Beneficiary. Any dividend or distribution paid prior to the discovery
by the Corporation that the shares of Class B Preferred Stock have been
transferred to the Trustee shall be repaid to the Corporation upon demand, and
any dividend or distribution declared but unpaid shall be rescinded as void AB
INITIO with respect to such shares of Class B Preferred Stock. Any dividends or
distributions so disgorged or rescinded shall be paid over to the Trustee and
held in trust for the Charitable Beneficiary. Any vote cast by a Prohibited
Transferee prior to the discovery by the Corporation that the shares of Class B
Preferred Stock have been transferred to the Trustee will be rescinded as void
AB INITIO and shall be recast in accordance with the desires of the Trustee
acting for the benefit of the Charitable Beneficiary. The owner of the shares at
the time of the Excess Transfer, change in capital structure or other event
giving rise to a potential violation of the Ownership Limit, Initial Holder
Limit or Look-Through Entity Ownership Limit shall be deemed to have given an
irrevocable proxy to the Trustee to vote the shares of Class B Preferred Stock
for the benefit of the Charitable Beneficiary.

<PAGE> 41

restrictions set forth in this Section 11.3(E) or any application thereof is
determined in a final judgment to be void, invalid or unenforceable by any court
having jurisdiction over the issue, the Prohibited Transferee may be deemed, at
the option of the Corporation, to have acted as the agent of the Corporation in
acquiring the Class B Preferred Stock as to which such restrictions would, by
their terms, apply, and to hold such Class B Preferred Stock on behalf of the
Corporation.

(F) PURCHASE RIGHT IN STOCK TRANSFERRED TO THE TRUSTEE. Shares of Class
B Preferred Stock transferred to the Trustee shall be deemed to have been
offered for sale to the Corporation, or its designee, at a price per share equal
to the lesser of (i) the price per share in the transaction that resulted in
such transfer to the Trust (or, in the case of a devise or gift, the Market
Price at the time of such devise or gift) and (ii) the Market Price on the date
the Corporation, or its designee, accepts such offer. The Corporation shall have
the right to accept such offer for a period of 90 days after the later of (i)
the date of the Excess Transfer or other event resulting in a transfer to the
Trust and (ii) the date that the Board of Directors determines in good faith
that an Excess Transfer or other event occurred.

(G) DESIGNATION OF CHARITABLE BENEFICIARIES. By written notice to the
Trustee, the Corporation shall designate one or more nonprofit organizations to
be the Charitable Beneficiary of the interest in the Trust relating to such
Prohibited Transferee if (i) the shares of Class B Preferred Stock held in the
Trust would not violate the Ownership Restrictions in the hands of such
Charitable Beneficiary and (ii) each Charitable Beneficiary is an organization
described in Sections 170(b)(1)(A), 170(c)(2) and 501(c)(3) of the Code.

11.4 NOTICE OF RESTRICTED TRANSFER. Any Person that acquires or attempts to
acquire shares of Class B Preferred Stock in violation of Section 11.1 of this
Article, or any Person that is a Prohibited Transferee such that stock is
transferred to the Trustee under Section 11.3 of this Article, shall immediately
give written notice to the Corporation of such event and shall provide to the
Corporation such other information as the Corporation may request in order to
determine the effect, if any, of such Transfer or attempted Transfer or other
event on the Corporation's status as a REIT. Failure to give such notice shall
not limit the rights and remedies of the Board of Directors provided herein in
any way.

11.5 OWNERS REQUIRED TO PROVIDE INFORMATION. From and after the Issue Date
certain record and Beneficial Owners and transferees of shares of Class B
Preferred Stock will be required to provide certain information as set out
below.

(A) ANNUAL DISCLOSURE. Every record and Beneficial Owner of more than
5% (or such other percentage between 0.5% and 5%, as provided in the applicable
regulations adopted under the Code) of the number of Outstanding shares of Class
B Preferred Stock shall, within 30 days after January 1 of each year, give
written notice to the Corporation stating the name and address of such record or
Beneficial Owner, the number of shares of Class B Preferred Stock Beneficially
Owned, and a full description of how such shares are held. Each such record or
Beneficial Owner of Class B Preferred Stock shall, upon demand by the
Corporation, disclose to the Corporation in writing such additional information
with respect to the Beneficial Ownership of the Class B Preferred Stock as the
Board of Directors, in its sole discretion, deems appropriate or necessary to
(i) comply with the provisions of the Code regarding the qualification of the
Corporation as a REIT under the Code and (ii) ensure compliance with the
Ownership Limit, the Initial Holder Limit or the Look-Through Ownership Limit,
as applicable. Each stockholder of record, including without limitation any
Person that holds shares of Class B Preferred Stock on behalf of a Beneficial
Owner, shall take all reasonable steps to obtain the written notice described in
this Section 11.5 from the Beneficial Owner.

(B) DISCLOSURE AT THE REQUEST OF THE CORPORATION. Any Person that is a
Beneficial Owner of shares of Class B Preferred Stock and any Person (including
the stockholder of record) that is holding shares of Class B Preferred Stock for
a Beneficial Owner, and any proposed transferee of shares, shall provide such
information as the Corporation, in its sole discretion, may request in order to
determine the Corporation's status as a REIT, to comply with the requirements of
any taxing authority or other governmental agency, to determine any such
compliance or to ensure compliance with the Ownership Limit, the Initial Holder
Limit and the Look-Through Ownership Limit, and shall provide a statement or
affidavit to the Corporation setting forth the number of shares of Class B
Preferred Stock already Beneficially Owned by such stockholder or proposed
transferee and any related

<PAGE> 42

persons specified, which statement or affidavit shall be in the form prescribed
by the Corporation for that purpose.

11.6 REMEDIES NOT LIMITED. Nothing contained in this Article shall limit the
authority of the Board of Directors to take such other action as it deems
necessary or advisable (subject to the provisions of Section 11.12 of this
Article) (i) to protect the Corporation and the interests of its stockholders in
the preservation of the Corporation's status as a REIT and (ii) to insure
compliance with the Ownership Limit, the Initial Holder Limit and the
Look-Through Ownership Limit.

11.7 AMBIGUITY. In the case of an ambiguity in the application of any of the
provisions of Section 11 of this Article, or in the case of an ambiguity in any
definition contained in Section 11 of this Article, the Board of Directors shall
have the power to determine the application of the provisions of this Article
with respect to any situation based on its reasonable belief, understanding or
knowledge of the circumstances.

11.8 EXCEPTIONS. The following exceptions shall apply or may be established
with respect to the limitations of Section 11.1 of this Article.

(A) WAIVER OF OWNERSHIP LIMIT. The Board of Directors, upon receipt of
a ruling from the Internal Revenue Service or an opinion of tax counsel or other
evidence or undertaking acceptable to it, may waive the application, in whole or
in part, of the Ownership Limit to a Person subject to the Ownership Limit, if
such person is not an individual for purposes of Section 542(a) of the Code and
is a corporation, partnership, estate or trust. In connection with any such
exemption, the Board of Directors may require such representations and
undertakings from such Person and may impose such other conditions as the Board
deems necessary, in its sole discretion, to determine the effect, if any, of the
proposed Transfer on the Corporation's status as a REIT.

(B) PLEDGE BY INITIAL HOLDER. Notwithstanding any other provision of
this Article, the pledge by the Initial Holder of all or any portion of the
Class B Preferred Stock directly owned at any time or from time to time shall
not constitute a violation of Section 11.1 of this Article and the pledgee shall
not be subject to the Ownership Limit with respect to the Class B Preferred
Stock so pledged to it either as a result of the pledge or upon foreclosure.

(C) UNDERWRITERS. For a period of 270 days following the purchase of
Class B Preferred Stock by an underwriter that (i) is a corporation or a
partnership and (ii) participates in an offering of the Class B Preferred Stock,
such underwriter shall not be subject to the Ownership Limit with respect to the
Class B Preferred Stock purchased by it as a part of or in connection with such
offering and with respect to any Class B Preferred Stock purchased in connection
with market making activities.

11.9 LEGEND. Each certificate for Class B Preferred Stock shall bear the
following legend:

"The shares of Class B Preferred Stock represented by this certificate
are subject to restrictions on transfer. No person may Beneficially Own
shares of Class B Preferred Stock in excess of the Ownership Restrictions,
as applicable, with certain further restrictions and exceptions set forth in
the Corporation's Charter (including the Articles Supplementary setting
forth the terms of the Class B Preferred Stock). Any Person that attempts to
Beneficially Own shares of Class B Preferred Stock in excess of the
applicable limitation must immediately notify the Corporation. All
capitalized terms in this legend have the meanings ascribed to such terms in
the Corporation's Charter (including the Articles Supplementary setting
forth the terms of the Class B Preferred Stock), as the same may be amended
from time to time, a copy of which, including the restrictions on transfer,
will be sent without charge to each stockholder that so requests. If the
restrictions on transfer are violated, the shares of Class B Preferred Stock
represented hereby will be either (i) void in accordance with the
Certificate or (ii) automatically transferred to a Trustee of a Trust for
the benefit of one or more Charitable Beneficiaries."

11.10 SEVERABILITY. If any provision of this Article or any application of
any such provision is determined in a final and unappealable judgment to be
void, invalid or unenforceable by any Federal or state court having jurisdiction
over the issues, the validity and enforceability of the remaining provisions
shall not be affected and other

<PAGE> 43

applications of such provision shall be affected only to the extent necessary to
comply with the determination of such court.

11.11 BOARD OF DIRECTORS DISCRETION. Anything in this Article to the
contrary notwithstanding, the Board of Directors shall be entitled to take or
omit to take such actions as it in its discretion shall determine to be
advisable in order that the Corporation maintain its status as and continue to
qualify as a REIT, including, but not limited to, reducing the Ownership Limit,
the Initial Holder Limit and the Look-Through Ownership Limit in the event of a
change in law.

11.12 SETTLEMENT. Nothing in this Section 11 of this Article shall be
interpreted to preclude the settlement of any transaction entered into through
the facilities of the NYSE or other securities exchange or an automated
interdealer quotation system.

* * * * * *

SECOND: The Board of Directors of the Corporation at a meeting or by a
unanimous consent in writing in lieu of a meeting under Section 2408 of the
Maryland General Corporation Law, as of October 23, 1997, adopted a resolution
that set forth and approved the foregoing restatement of the Charter.

THIRD: The Charter of the Corporation is not amended by these Articles of
Restatement; PROVIDED, HOWEVER, consistent with Section 2608(b)(7) of the
Maryland General Corporation Law, the current number and names of directors are
provided in Section 2 of Article VI of the restated Charter of the Corporation.

FOURTH: References to "these Articles of Amendment and Restatement" have
been retained in Section 4 of Article IV, in Section 4, Section 5, and Section 7
of Article VI, and in Article VIII of the restated Charter and to "these
Articles Supplementary" have been retained in Section 1 of Article XII of the
restated Charter to conform to the original text of the provisions. In the
context of these Articles of Restatement the term "these Articles of Amendment
and Restatement" should be read as "the Charter" and the term "these Articles
Supplementary" should be read as "this Article".

FIFTH: The sentence "Upon the filing of these Articles of Amendment, there
shall be authorized 750,000 shares and issued and outstanding 650,000 shares of
the Class B Common Stock" has been retained in Section 8 of Article XII of the
restated Charter to conform to the original text of the provision.
In the context of these Articles of Restatement the sentence is not necessary.

SIXTH: The number of shares of Class B Common Stock shown as "750,000" has
been retained in Section 1.1 of Article IV of the restated Charter to conform to
the original text of the provision. As of August 11, 1997 a total of 325,000
shares of Class B Common Stock have been converted which causes the number of
authorized shares of Class B Common Stock to be reduced from 750,000 shares to
425,000 shares as provided in Sections 6(a) and 8 of Article XII of the restated
Charter.

SEVENTH: The number of shares of Preferred Stock shown as "10,000,000" has
been retained in Section 1.1 of Article IV of the restated Charter to conform to
the original text of the provision. As of August 4, 1997 a total of 750,000
shares of Preferred Stock were reclassified as Class B Cumulative Convertible
Preferred Stock, par value $.01 per share (the "Class B Preferred Stock"), which
causes the number of authorized shares of Preferred Stock to be reduced from
10,000,000 shares to 9,250,000 shares and the number of authorized shares of
Class B Preferred Stock to be increased from zero shares to 750,000 shares as
provided in Sections 1 Article XIII of the restated Charter.

<PAGE> 44

IN WITNESS WHEREOF, APARTMENT INVESTMENT AND MANAGEMENT COMPANY has caused
these presents to be signed in its name and on its behalf by its President and
witnessed by its Secretary on November 7, 1997.

WITNESS: APARTMENT INVESTMENT AND
MANAGEMENT COMPANY

/s/ LEEANN MOREIN By: /s/ PETER K. KOMPANIEZ
- ------------------------------- ----------------------------------
Leeann Morein, Secretary Peter K. Kompaniez, President

THE UNDERSIGNED, President of APARTMENT INVESTMENT AND MANAGEMENT COMPANY,
who executed on behalf of the Corporation the foregoing Articles of Restatement
of which this certificate is made a part, hereby acknowledges in the name and on
behalf of said Corporation the foregoing Articles of Restatement to be the
corporate act of said Corporation and hereby certifies that to the best of his
knowledge, information, and belief the matters and facts set forth therein with
respect to the authorization and approval thereof are true in all material
respects under the penalties of perjury.

/s/ PETER K. KOMPANIEZ
--------------------------------------
Peter K. Kompaniez, President

<PAGE> 45

ARTICLES SUPPLEMENTARY
APARTMENT INVESTMENT AND MANAGEMENT COMPANY

CLASS C CUMULATIVE PREFERRED STOCK
(PAR VALUE $.01 PER SHARE)

APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation
(hereinafter called the "Corporation"), having its principal office in Baltimore
City, Maryland, hereby certifies to the Department of Assessments and Taxation
of the State of Maryland that:

FIRST: Pursuant to authority expressly vested in the Board of Directors of
the Corporation by Section 1.2 of Article IV of the Charter of the Corporation,
the Board of Directors has duly divided and classified 2,760,000 authorized but
unissued shares of the capital stock of the Corporation into a class designated
as Class C Cumulative Preferred Stock and has provided for the issuance of such
class.

SECOND: The reclassification increases the number of shares classified as
Class C Cumulative Preferred Stock, par value $.01 per share, from no shares
immediately prior to the reclassification to 2,760,000 shares immediately after
the reclassification. The reclassification decreases the number of shares
classified as Preferred Stock, par value $.01 per share, from 9,250,000 shares
immediately prior to the reclassification to 6,490,000 shares immediately after
the reclassification. The number of shares classified as Class C Cumulative
Preferred Stock may be decreased pursuant to Section 6 of Article Third of these
Articles Supplementary upon reacquisition thereof in any manner, or by
retirement thereof, by the Corporation.

THIRD: The terms of the Class C Cumulative Preferred Stock (including the
preferences, conversions or other rights, voting powers, restrictions,
limitations as to dividends and other distributions, qualifications, or terms or
conditions of redemption) as set by the Board of Directors are as follows:

1. NUMBER OF SHARES AND DESIGNATION.

This class of Preferred Stock shall be designated as Class C Cumulative
Preferred Stock (the "Class C Preferred Stock") and Two Million Seven Hundred
Sixty Thousand (2,760,000) shall be the authorized number of shares of such
Class C Preferred Stock constituting such class.

<PAGE> 46

2. DEFINITIONS.

For purposes of the Class C Preferred Stock, the following terms shall have
the meanings indicated:

"ACT" shall mean the Securities Act of 1933, as amended.

"AFFILIATE" of a Person means a Person that directly, or indirectly through
one or more intermediaries, controls or is controlled by, or is under common
control with, the Person specified.

"AGGREGATE VALUE" shall mean, with respect to any block of Equity Stock, the
sum of the products of (i) the number of shares of each class of Equity Stock
within such block multiplied by (ii) the corresponding Market Price of one share
of Equity Stock of such class.

"BENEFICIAL OWNERSHIP" shall mean, with respect to any Person, ownership of
shares of Equity Stock equal to the sum of (i) the number of shares of Equity
Stock directly owned by such Person, (ii) the number of shares of Equity Stock
indirectly owned by such Person (if such Person is an "individual" as defined in
Section 542(a)(2) of the Code) taking into account the constructive ownership
rules of Section 544 of the Code, as modified by Section 856(h)(1)(B) of the
Code, and (iii) the number of shares of Equity Stock that such Person is deemed
to beneficially own pursuant to Rule 13d3 under the Exchange Act or that is
attributed to such Person pursuant to Section 318 of the Code, as modified by
Section 856(d)(5) of the Code, PROVIDED that when applying this definition of
Beneficial Ownership to the Initial Holder, clause (iii) of this definition, and
clause (ii) of the definition of "Person" shall be disregarded. The terms
"BENEFICIAL OWNER," "BENEFICIALLY OWNS" and "BENEFICIALLY OWNED" shall have the
correlative meanings.

"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or a day on
which state or federally chartered banking institutions in New York, New York
are not required to be open.

"CHARITABLE BENEFICIARY" shall mean one or more beneficiaries of the Trust
as determined pursuant to Section 10.3 of this Article, each of which shall be
an organization described in Section 170(b)(1)(A), 170(c)(2) and 501(c)(3) of
the Code.

"CLASS C PREFERRED STOCK" shall have the meaning set forth in Section 1 of
this Article.

"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

<PAGE> 47

regulations or other administrative pronouncements as in effect from time to
time.

"COMMON STOCK" shall mean the Class A Common Stock, $.01 par value per
share, of the Corporation or such shares of the Corporation's capital stock into
which outstanding shares of Common Stock shall be reclassified.

"DIVIDEND PAYMENT DATE" shall mean January 15, April 15, July 15 and October
15 of each year; provided, further, that if any Dividend Payment Date falls on
any day other than a Business Day, the dividend payment payable on such Dividend
Payment Date shall be paid on the Business Day immediately following such
Dividend Payment Date and no interest shall accrue on such dividend from such
date to such Dividend Payment Date.

"DIVIDEND PERIODS" shall mean the Initial Dividend Period and each
subsequent quarterly dividend period commencing on and including January 15,
April 15, July 15 and October 15 of each year and ending on and including the
day preceding the first day of the next succeeding Dividend Period, other than
the Dividend Period during which any Class B Preferred Stock shall be redeemed
pursuant to Section 5 hereof, which shall end on and include the Redemption Date
with respect to the Class C Preferred Stock being redeemed.

"EQUITY STOCK" shall mean one or more shares of any class of capital stock
of the Corporation.

"EXCESS TRANSFER" has the meaning set forth in Section 10.3(A) of this
Article.

"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended.

"ISSUE DATE" shall mean December 23, 1997(1).

"INITIAL DIVIDEND PERIOD" shall mean the period commencing on and including
the Issue Date and ending on and including April 14, 1998.

"INITIAL HOLDER" shall mean Terry Considine.

"INITIAL HOLDER LIMIT" shall mean a number of the Outstanding shares of
Class C Preferred Stock of the Corporation having an Aggregate Value not in
excess of the excess of (x) 15% of the Aggregate Value of all Outstanding shares
of Equity Stock over (y) the Aggregate Value of all shares of Equity Stock other
than Class B Preferred Stock that are Beneficially Owned by the Initial Holder.
From the Issue Date, the secretary of the Corporation, or such other person as
shall be designated by the Board of Directors, shall upon request make available
to the representative(s) of the Initial Holder and the Board of Directors, a
schedule that sets forth the thencurrent Initial Holder Limit applicable to the
Initial Holder.

<PAGE> 48

"JUNIOR STOCK" shall mean the Common Stock and any other class or series of
capital stock of the Corporation over which the shares of Class C Preferred
Stock have preference or priority in the payment of dividends or in the
distribution of assets on any liquidation, dissolution or winding up of the
Corporation.

"LOOK-THROUGH ENTITY" shall mean a Person that is either (i) described in
Section 401(a) of the Code as provided under Section 856(h)(3) of the Code or
(ii) registered under the Investment Company Act of 1940.

"LOOK-THROUGH OWNERSHIP LIMIT" shall mean, for any Look-Through Entity, a
number of the Outstanding shares of Class C Preferred Stock of the Corporation
having an Aggregate Value not in excess of the excess of (x) 15% of the
Aggregate Value of all Outstanding shares of Equity Stock over (y) by the
Aggregate Value of all shares of Equity Stock other than Class B Preferred Stock
that are Beneficially Owned by the Look-Through Entity.

"MARKET PRICE" on any date shall mean, with respect to any share of Equity
Stock, the Closing Price of share of that class of Equity Stock on the Trading
Day immediately preceding such date. The term "CLOSING PRICE" on any date shall
mean the last sale price, regular way, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the NYSE or,
if the Equity Stock is not listed or admitted to trading on the NYSE, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which the
Equity Stock is listed or admitted to trading or, if the Equity Stock is not
listed or admitted to trading on any national securities exchange, the last
quoted price, or if not so quoted, the average of the high bid and low asked
prices in the overthecounter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System or, if such system is no
longer in use, the principal other automated quotations system that may then be
in use or, if the Equity Stock is not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Equity Stock selected by the Board of
Directors of the Company. The term "TRADING DAY" shall mean a day on which the
principal national securities exchange on which the Equity Stock is listed or
admitted to trading is open for the transaction of business or, if the Equity
Stock is not listed or admitted to trading on any national securities exchange,
shall mean any day other than a Saturday, a Sunday or a day on which banking
institutions in the State of New York are authorized or obligated by law or
executive order to close.

"NYSE" shall mean the New York Stock Exchange, Inc.

"OUTSTANDING" shall mean issued and outstanding shares of Equity Stock of
the Corporation, PROVIDED that for purposes of the application of the Ownership
Limit, the Look-Through Ownership Limit or the Initial Holder Limit to any
Person, the term "OUTSTANDING" shall be deemed to include the number of shares
of Equity Stock that such Person alone, at that time, could acquire pursuant to
any options or convertible securities.

<PAGE> 49

"OWNERSHIP LIMIT" shall mean, for any Person other than the Initial Holder
or a Look-Through Entity, a number of the Outstanding shares of Class C
Preferred Stock of the Corporation having an Aggregate Value not in excess of
the excess of (x) 8.7% of the Aggregate Value of all Outstanding shares of
Equity Stock over (y) the Aggregate Value of all shares of Equity Stock other
than Class C Preferred Stock that are Beneficially Owned by the Person.

"OWNERSHIP RESTRICTIONS" shall mean collectively the Ownership Limit as
applied to Persons other than the Initial Holder or Look-Through Entities, the
Initial Holder Limit as applied to the Initial Holder and the Look-Through
Ownership Limit as applied to Look-Through Entities.

"PARITY STOCK" shall have the meaning set forth in paragraph (b) of Section
7 of this Article. The Class B Preferred Stock shall be a Parity Stock.

"PERSON" shall mean (a) for purposes of Section 10 of this Article, (i) an
individual, corporation, partnership, estate, trust (including a trust
qualifying under Section 401(a) or 501(c) of the Code), association, private
foundation within the meaning of Section 509(a) of the Code, joint stock company
or other entity, and (ii) also includes a group as that term is used for
purposes of Section 13(d)(3) of the Exchange Act and (b) for purposes of the
remaining Sections of this Article, any individual, firm, partnership,
corporation or other entity and shall include any successor (by merger or
otherwise) of such entity.

"PROHIBITED TRANSFEREE" has the meaning set forth in Section 10.3(A) of
this Article.

"REDEMPTION DATE" shall have the meaning set forth in paragraph (b) of
Section 5 of this Article.

"REIT" shall mean a "real estate investment trust" as defined in Section 856
of the Code.

"SENIOR STOCK" shall have the meaning set forth in paragraph (a) of Section
7 of this Article.

"SET APART FOR PAYMENT" shall be deemed to include, without any action other
than the following, the recording by the Corporation in its accounting ledgers
of any accounting or bookkeeping entry which indicates, pursuant to a
declaration of dividends or other distribution by the Board of Directors, the
allocation of funds to be so paid on any series or class of capital stock of the
Corporation; provided, however, that if any funds for any class or series of
Junior Stock or any class or series of Parity Stock are placed in a separate
account of the Corporation or delivered to a disbursing, paying or other similar
agent, then "set apart for payment" with respect to the Class C Preferred Stock
shall mean placing such funds in a separate account or delivering such funds to
a disbursing, paying or other similar agent.

<PAGE> 50

National Market or, if such securities are not listed or admitted for trading on
the NASDAQ National Market, in the securities market in which such securities
are traded.

"TRANSFER" shall mean any sale, transfer, gift, assignment, devise or other
disposition of a share of Class C Preferred Stock (including (i) the granting of
an option or any series of such options or entering into any agreement for the
sale, transfer or other disposition of Class C Preferred Stock or (ii) the sale,
transfer, assignment or other disposition of any securities or rights
convertible into or exchangeable for Class C Preferred Stock), whether voluntary
or involuntary, whether of record or Beneficial Ownership, and whether by
operation of law or otherwise (including, but not limited to, any transfer of an
interest in other entities that results in a change in the Beneficial Ownership
of shares of Class C Preferred Stock). The term "TRANSFERS" and "TRANSFERRED"
shall have correlative meanings.

"TRANSFER AGENT" means such transfer agent as may be designated by the Board
of Directors or their designee as the transfer agent for the Class C Preferred
Stock; provided, that if the Corporation has not designated a transfer agent
then the Corporation shall act as the transfer agent for the Class C Preferred
Stock.

"TRUST" shall mean the trust created pursuant to Section 10.3 of this
Article.

"TRUSTEE" shall mean the Person unaffiliated with either the Corporation or
the Prohibited Transferee that is appointed by the Corporation to serve as
trustee of the Trust.

"VOTING PREFERRED STOCK" shall have the meaning set forth in Section 8 of
this Article.

3. DIVIDENDS.

(a) The holders of Class C Preferred Stock shall be entitled to
receive, when and as declared by the Board of Directors out of funds legally
available for that purpose, cumulative dividends payable in cash in an amount
per share of Class C Preferred Stock equal to $2.25 per annum. Such dividends
shall be cumulative from the Issue Date, whether or not in any Dividend Period
or Periods such dividends shall be declared or there shall be funds of the
Corporation legally available for the payment of such dividends, and shall be
payable quarterly in arrears on each Dividend Payment Date, commencing on April
15, 1998. Each such dividend shall be payable in arrears to the holders of
record of the Class C Preferred Stock, as they appear on the stock records of
the Corporation at the close of business on the January 1, April 1, July 1 or
October 1, as the case may be, immediately preceding such Dividend Payment Date.
Accumulated, accrued and unpaid dividends for any past Dividend Periods may be
declared and paid at any time, without reference to any regular Dividend Payment
Date, to holders of record on such date, which date shall not precede by more
than 45 days the payment date thereof, as may be fixed by the Board of
Directors.

(b) The amount of dividends payable per share of Class C Preferred
Stock for the Initial Dividend Period, or any other period shorter than a full
Dividend Period, shall be computed ratably on the basis of twelve 30day months
and a 360day

<PAGE> 51

year. Holders of Class C Preferred Stock shall not be entitled to any dividends,
whether payable in cash, property or stock, in excess of cumulative dividends,
as herein provided, on the Class C Preferred Stock. No interest, or sum of money
in lieu of interest, shall be payable in respect of any dividend payment or
payments on the Class C Preferred Stock that may be in arrears.

(c) So long as any of the shares of Class C Preferred Stock are
outstanding, except as described in the immediately following sentence, no
dividends shall be declared or paid or set apart for payment by the Corporation
and no other distribution of cash or other property shall be declared or made
directly or indirectly by the Corporation with respect to any class or series of
Parity Stock for any period unless dividends equal to the full amount of
accumulated, accrued and unpaid dividends have been or contemporaneously are
declared and paid or declared and a sum sufficient for the payment thereof has
been or contemporaneously is set apart for such payment on the Class C Preferred
Stock for all Dividend Periods terminating on or prior to the Dividend Payment
Date with respect to such class or series of Parity Stock. When dividends are
not paid in full or a sum sufficient for such payment is not set apart, as
aforesaid, all dividends declared upon the Class C Preferred Stock and all
dividends declared upon any other class or series of Parity Stock shall be
declared ratably in proportion to the respective amounts of dividends
accumulated, accrued and unpaid on the Class C Preferred Stock and accumulated,
accrued and unpaid on such Parity Stock.

(d) So long as any of the shares of Class C Preferred Stock are
outstanding, no dividends (other than dividends or distributions paid in shares
of, or options, warrants or rights to subscribe for or purchase shares of,
Junior Stock) shall be declared or paid or set apart for payment by the
Corporation and no other distribution of cash or other property shall be
declared or made, directly or indirectly, by the Corporation with respect to any
shares of Junior Stock, nor shall any shares of Junior Stock be redeemed,
purchased or otherwise acquired (other than a redemption, purchase or other
acquisition of Common Stock made for purposes of an employee incentive or
benefit plan of the Corporation or any subsidiary) for any consideration (or any
moneys be paid to or made available for a sinking fund for the redemption of any
shares of any such stock), directly or indirectly, by the Corporation (except by
conversion into or exchange for shares of, or options, warrants or rights to
subscribe for or purchase shares of, Junior Stock), nor shall any other cash or
other property otherwise be paid or distributed to or for the benefit of any
holder of shares of Junior Stock in respect thereof, directly or indirectly, by
the Corporation unless in each case the full cumulative dividends (including all
accumulated, accrued and unpaid dividends) on all outstanding shares of Class C
Preferred Stock shall have been paid or such dividends have been declared and
set apart for payment for all past Dividend Periods with respect to the Class C
Preferred Stock.

Notwithstanding the provisions of this Section 3(d), the Corporation
shall not be prohibited from (i) declaring or paying or setting apart for
payment any dividend or distribution on any shares of Parity Stock or (ii) or
redeeming, purchasing or otherwise acquiring any Parity Stock, in each case, if
such declaration, payment, redemption, purchase or other acquisition is
necessary in order to maintain the continued qualification of the Corporation as
a REIT under Section 856 of the Code.

<PAGE> 52

4. LIQUIDATION PREFERENCE.

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

(b) Upon any liquidation, dissolution or winding up of the Corporation,
after payment shall have been made in full to the holders of Class C Preferred
Stock and any Parity Stock, as provided in this Section 4, any other series or
class or classes of Junior Stock 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 C Preferred Stock and any Parity Stock shall not be
entitled to share therein.

5. REDEMPTION AT THE OPTION OF THE CORPORATION.

(a) Shares of Class C Preferred Stock shall not be redeemable by the
Corporation prior to December 23, 2002(2) except as set forth in Section 10.2 of
this Article. On and after December 23, 2002(3), the Corporation, at its option,
may redeem shares of Class C Preferred Stock, in whole or from time to time in
part, at a redemption price payable in cash equal to 100% of the Liquidation
Preference thereof, plus all accrued and unpaid dividends to the date fixed for
redemption (the "Redemption Date"). In connection with any redemption pursuant
to this Section 5(a), the redemption price of the Class C Preferred Stock (other
than any portion thereof consisting of accrued and unpaid dividends) shall be
payable solely with the proceeds from the sale by the Corporation or AIMCO
Properties, L.P., a Delaware limited partnership (the "Operating Partnership")
of other capital shares of the Corporation or the Operating Partnership (whether
or not such sale occurs concurrently with such redemption). For purposes of the
preceding sentence, 'capital shares' means any common stock, preferred stock,
depositary shares, partnership or other interests, participations or other
ownership interests (however designated) and any rights (other than debt
securities convertible into or exchangeable at the option of the holder for
equity securities (unless and to the extent such debt securities are
subsequently converted into capital shares)) or options to purchase any of the
foregoing of or in the Corporation or the Operating Partnership.

<PAGE> 53

(b) The Redemption Date shall be selected by the Corporation, shall be
specified in the notice of redemption and shall be not less than 30 days nor
more than 60 days after the date notice of redemption is sent by the
Corporation.

(c) If full cumulative dividends on all outstanding shares of Class C
Preferred Stock have not been paid or declared and set apart for payment, no
shares of Class C Preferred Stock may be redeemed unless all outstanding shares
of Class C Preferred Stock are simultaneously redeemed and neither the
Corporation nor any affiliate of the Corporation may purchase or acquire shares
of Class C Preferred Stock, otherwise than pursuant to a purchase or exchange
offer made on the same terms to all holders of shares of Class C Preferred
Stock.

(d) If the Corporation shall redeem shares of Class C Preferred Stock
pursuant to paragraph (a) of this Section 5, notice of such redemption shall be
given to each holder of record of the shares to be redeemed. Such notice shall
be provided by first class mail, postage prepaid, at such holder's address as
the same appears on the stock records of the Corporation.
Neither the failure to mail any notice required by this paragraph (d), nor any
defect therein or in the mailing thereof to any particular holder, shall affect
the sufficiency of the notice or the validity of the proceedings for redemption
with respect to the other holders. Any notice which was mailed in the manner
herein provided shall be conclusively presumed to have been duly given on the
date mailed whether or not the holder receives the notice. Each such notice
shall state, as appropriate: (1) the Redemption Date; (2) the number of shares
of Class C Preferred Stock to be redeemed and, if fewer than all such shares
held by such holder are to be redeemed, the number of such shares to be redeemed
from such holder; and (3) the place or places at which certificates for such
shares are to be surrendered for cash. Notice having been mailed as aforesaid,
from and after the Redemption Date (unless the Corporation shall fail to make
available the amount of cash necessary to effect such redemption), (i) except as
otherwise provided herein, dividends on the shares of Class C Preferred Stock so
called for redemption shall cease to accumulate or accrue on the shares of Class
C Preferred Stock called for redemption (except that, in the case of a
Redemption Date after a dividend record date and prior to the related Dividend
Payment Date, holders of Class C Preferred Stock on the dividend record date
will be entitled on such Dividend Payment Date to receive the dividend payable
on such shares), (ii) said shares shall no longer be deemed to be outstanding,
and (iii) all rights of the holders thereof as holders of Class C Preferred
Stock of the Corporation shall cease (except the rights to receive the cash
payable upon such redemption, without interest thereon, upon surrender and
endorsement of their certificates if so required and to receive any dividends
payable thereon). The Corporation's obligation to make available the redemption
price in accordance with the preceding sentence shall be deemed fulfilled if, on
or before the Call Date, the Corporation shall deposit with a bank or trust
company (which may be an affiliate of the Corporation) that has, or is an
affiliate of a bank or trust company that has, a capital and surplus of at least
$50,000,000, such amount of cash as is necessary for such redemption, in trust,
with irrevocable instructions that such cash be applied to the redemption of the
shares of Class C Preferred Stock so called for redemption. No interest shall
accrue for the benefit of the holders of shares of Class C Preferred Stock to be
redeemed on any cash so set aside by the Corporation. Subject to applicable
escheat laws, any such cash unclaimed at the end of two years from the
Redemption Date shall revert to the general funds of the Corporation, after
which reversion the holders of shares of Class C Preferred Stock so called for
redemption shall look only to the general funds of the Corporation for the
payment of such cash.

<PAGE> 54

As promptly as practicable after the surrender in accordance with such
notice of the certificates for any such shares of Class C Preferred Stock to be
so redeemed (properly endorsed or assigned for transfer, if the Corporation
shall so require and the notice shall so state), such certificates shall be
exchanged for cash (without interest thereon) for which such shares have been
redeemed in accordance with such notice. If fewer than all the outstanding
shares of Class C Preferred Stock are to be redeemed, shares to be redeemed
shall be selected by the Corporation from outstanding shares of Class C
Preferred Stock not previously called for redemption by lot or, with respect to
the number of shares of Class C Preferred Stock held of record by each holder of
such shares, pro rata (as nearly as may be) or by any other method as may be
determined by the Board of Directors in its discretion to be equitable. If fewer
than all the shares of Class C Preferred Stock represented by any certificate
are redeemed, then a new certificate representing the unredeemed shares shall be
issued without cost to the holders thereof.

6. STATUS OF REACQUIRED STOCK.

All shares of Class C Preferred Stock which shall have been issued and
reacquired in any manner by the Corporation shall be returned to the status of
authorized, but unissued shares of Class C Preferred Stock.

7. RANKING.

Any class or series of capital stock of the Corporation shall be deemed to
rank:

(a) prior or senior to the Class C Preferred Stock, as to the payment
of dividends and as to distribution of assets upon liquidation, dissolution or
winding up, if the holders of such class or series shall be entitled to the
receipt of dividends or of amounts distributable upon liquidation, dissolution
or winding up, as the case may be, in preference or priority to the holders of
Class C Preferred Stock ("Senior Stock");

(b) on a parity with the Class C Preferred Stock, as to the payment of
dividends and as to distribution of assets upon liquidation, dissolution or
winding up, whether or not the dividend rates, dividend payment dates or
redemption or liquidation prices per share thereof be different from those of
the Class C Preferred Stock, if the holders of such class of stock or series and
the Class C Preferred Stock shall be entitled to the receipt of dividends and of
amounts distributable upon liquidation, dissolution or winding up in proportion
to their respective amounts of accrued and unpaid dividends per share or
liquidation preferences, without preference or priority one over the other
("Parity Stock"); and

(c) junior to the Class C Preferred Stock, as to the payment of
dividends or as to the distribution of assets upon liquidation, dissolution or
winding up, if such stock or series shall be Common Stock or if the holders of
Class C Preferred Stock shall be entitled to receipt of dividends or of amounts
distributable upon liquidation, dissolution or winding up, as the case may be,
in preference or priority to the holders of shares of such class or series
("Junior Stock").

<PAGE> 55

8. VOTING.

(a) If and whenever six quarterly dividends (whether or not
consecutive) payable on the Class C Preferred Stock or any series or class of
Parity Stock shall be in arrears (which shall, with respect to any such
quarterly dividend, mean that any such dividend has not been paid in full),
whether or not earned or declared, the number of directors then constituting the
Board of Directors shall be increased by two (if not already increased by reason
of similar types of provisions with respect to shares of Parity Stock of any
other class or series which is entitled to similar voting rights (the "Voting
Preferred Stock")) and the holders of shares of Class C Preferred Stock,
together with the holders of shares of all other Voting Preferred Stock then
entitled to exercise similar voting rights, voting as a single class regardless
of series, shall be entitled to elect the two additional directors to serve on
the Board of Directors at any annual meeting of stockholders or special meeting
held in place thereof, or at a special meeting of the holders of the Class C
Preferred Stock and the Voting Preferred Stock called as hereinafter provided.
Whenever all arrears in dividends on the Class C Preferred Stock and the Voting
Preferred Stock then outstanding shall have been paid and dividends thereon for
the current quarterly dividend period shall have been paid or declared and set
apart for payment, then the right of the holders of the Class C Preferred Stock
and the Voting Preferred Stock to elect such additional two directors shall
cease (but subject always to the same provision for the vesting of such voting
rights in the case of any similar future arrearages), and the terms of office of
all Persons elected as directors by the holders of the Class C Preferred Stock
and the Voting Preferred Stock shall forthwith terminate and the number of
directors constituting the Board of Directors shall be reduced accordingly. At
any time after such voting power shall have been so vested in the holders of
Class C Preferred Stock and the Voting Preferred Stock, if applicable, the
Secretary of the Corporation may, and upon the written request of any holder of
Class C Preferred Stock (addressed to the Secretary at the principal office of
the Corporation) shall, call a special meeting of the holders of the Class C
Preferred Stock and of the Voting Preferred Stock for the election of the two
directors to be elected by them as herein provided, such call to be made by
notice similar to that provided in the Bylaws of the Corporation for a special
meeting of the stockholders or as required by law. If any such special meeting
required to be called as above provided shall not be called by the Secretary
within 20 days after receipt of any such request, then any holder of Class C
Preferred Stock may call such meeting, upon the notice above provided, and for
that purpose shall have access to the stock books of the Corporation. The
directors elected at any such special meeting shall hold office until the next
annual meeting of the stockholders or special meeting held in lieu thereof if
such office shall not have previously terminated as above provided. If any
vacancy shall occur among the directors elected by the holders of the Class C
Preferred Stock and the Voting Preferred Stock, a successor shall be elected by
the Board of Directors, upon the nomination of the thenremaining director
elected by the holders of the Class C Preferred Stock and the Voting Preferred
Stock or the successor of such remaining director, to serve until the next
annual meeting of the stockholders or special meeting held in place thereof if
such office shall not have previously terminated as provided above.

(b) So long as any shares of Class C Preferred Stock are outstanding,
in addition to any other vote or consent of stockholders required by law or by
the Charter of the Corporation, the affirmative vote of at least 662/3% of the
votes entitled to be cast by the holders of the Class C Preferred Stock voting
as a single class

<PAGE> 56

with the holders of all other classes or series of Preferred Stock entitled to
vote on such matters, given in Person or by proxy, either in writing without a
meeting or by vote at any meeting called for the purpose, shall be necessary for
effecting or validating:

(i) Any amendment, alteration or repeal of any of the provisions
of these Articles Supplementary, the Charter or the ByLaws of the Corporation
that materially adversely affects the voting powers, rights or preferences of
the holders of the Class C Preferred Stock; provided, however, that the
amendment of the provisions of the Charter so as to authorize or create, or to
increase the authorized amount of, or issue any Junior Stock or any shares of
any class of Parity Stock shall not be deemed to materially adversely affect the
voting powers, rights or preferences of the holders of Class C Preferred Stock;
or

(ii) The authorization, creation of, the increase in the
authorized amount of, or issuance of any shares of any class of Senior Stock or
any security convertible into shares of any class of Senior Stock (whether or
not such class of Senior Stock is currently authorized); provided, however, that
no such vote of the holders of Class C Preferred Stock shall be required if, at
or prior to the time when such amendment, alteration or repeal is to take
effect, or when the issuance of any such prior shares or convertible security is
to be made, as the case may be, provision is made for the redemption of all
shares of Class C Preferred Stock at the time outstanding to the extent such
redemption is authorized by Section 5 of this Article.

For purposes of the foregoing provisions and all other voting rights under
these Articles Supplementary, each share of Class C Preferred Stock shall have
one (1) vote per share, except that when any other class or series of preferred
stock shall have the right to vote with the Class C Preferred Stock as a single
class on any matter, then the Class C Preferred Stock and such other class or
series shall have with respect to such matters one quarter of one (.25) vote per
$25 of stated liquidation preference. Except as otherwise required by applicable
law or as set forth herein, the Class C Preferred Stock shall not have any
relative, participating, optional or other special voting rights and powers
other than as set forth herein, and the consent of the holders thereof shall not
be required for the taking of any corporate action.

9. RECORD HOLDERS.

The Corporation and the Transfer Agent may deem and treat the record holder
of any share of Class C Preferred Stock as the true and lawful owner thereof for
all purposes, and neither the Corporation nor the Transfer Agent shall be
affected by any notice to the contrary.

<PAGE> 57

10.1 RESTRICTIONS ON OWNERSHIP AND TRANSFERS.

(A) LIMITATION ON BENEFICIAL OWNERSHIP. Except as provided in Section 10.8,
from and after the Issue Date, no Person (other than the Initial Holder or a
Look-Through Entity) shall Beneficially Own shares of Class C Preferred Stock in
excess of the Ownership Limit, the Initial Holder shall not Beneficially Own
shares of Class C Preferred Stock in excess of the Initial Holder Limit and no
Look-Through Entity shall Beneficially Own shares of Class C Preferred Stock in
excess of the Look-Through Ownership Limit.

<PAGE> 58

(B) TRANSFERS IN EXCESS OF OWNERSHIP LIMIT. Except as provided in
Section 10.8, from and after the Issue Date (and subject to Section 10.12), any
Transfer (whether or not such Transfer is the result of transactions entered
into through the facilities of the NYSE or other securities exchange or an
automated interdealer quotation system) that, if effective, would result in any
Person (other than the Initial Holder or a Look-Through Entity) Beneficially
Owning shares of Class C Preferred Stock in excess of the Ownership Limit shall
be void AB INITIO as to the Transfer of such shares of Class C Preferred Stock
that would be otherwise Beneficially Owned by such Person in excess of the
Ownership Limit, and the intended transferee shall acquire no rights in such
shares of Class C Preferred Stock.

(C) TRANSFERS IN EXCESS OF INITIAL HOLDER LIMIT. Except as provided in
Section 10.8, from and after the Issue Date (and subject to Section 10.12), any
Transfer (whether or not such Transfer is the result of transactions entered
into through the facilities of the NYSE or other securities exchange or an
automated interdealer quotation system) that, if effective, would result in the
Initial Holder Beneficially Owning shares of Class C Preferred Stock in excess
of the Initial Holder Limit shall be void AB INITIO as to the Transfer of such
shares of Class C Preferred Stock that would be otherwise Beneficially Owned by
the Initial Holder in excess of the Initial Holder limit, and the Initial Holder
shall acquire no rights in such shares of Class C Preferred Stock.

(D) TRANSFERS IN EXCESS OF LOOK-THROUGH OWNERSHIP LIMIT. Except as
provided in Section 10.8 from and after the Issue Date (and subject to Section
10.12), any Transfer (whether or not such Transfer is the result of transactions
entered into through the facilities of the NYSE or other securities exchange or
an automated interdealer quotation system) that, if effective, would result in
any Look-Through Entity Beneficially Owning shares of Class C Preferred Stock in
excess of the Look-Through Ownership limit shall be void AB INITIO as to the
Transfer of such shares of Class C Preferred Stock that would be otherwise
Beneficially Owned by such Look-Through Entity in excess of the Look-Through
Ownership Limit and such Look-Through Entity shall acquire no rights in such
shares of Class C Preferred Stock.

(E) TRANSFERS RESULTING IN "CLOSELY HELD" STATUS. From and after the
Issue Date, any Transfer that, if effective would result in the Corporation
being "closely held" within the meaning of Section 856(h) of the Code, or would
otherwise result in the Corporation failing to qualify as a REIT (including,
without limitation, a Transfer or other event that would result in the
Corporation owning (directly or constructively) an interest in a tenant that is
described in Section 856(d)(2)(B) of the Code if the income derived by the
Corporation from such tenant would cause the Corporation to fail to satisfy any
of the gross income requirements of Section 856(c) of the Code) shall be void AB
INITIO as to the Transfer of shares of Class C Preferred Stock that would cause
the Corporation (i) to be "closely held" within the meaning of Section 856(h) of
the Code or (ii) otherwise fail to qualify as a REIT, as the case may be, and
the intended transferee shall acquire no rights in such shares of Class C
Preferred Stock.

(F) SEVERABILITY ON VOID TRANSACTIONS. A Transfer of a share of Class
C Preferred Stock that is null and void under Sections 10.1(B), (C), (D), or (E)
of this Article because it would, if effective, result in (i) the ownership of
Class C Preferred Stock in excess of the Initial Holder Limit, the Ownership
Limit, or the Look-Through Ownership Limit, (ii) the Corporation being "closely
held" within the

<PAGE> 59

meaning of Section 856(h) of the Code or (iii) the Corporation otherwise failing
to qualify as a REIT, shall not adversely affect the validity of the Transfer of
any other share of Class C Preferred Stock in the same or any other related
transaction.

10.2 REMEDIES FOR BREACH. If the Board of Directors or a committee thereof
shall at any time determine in good faith that a Transfer or other event has
taken place in violation of Section 10.1 of this Article or that a Person
intends to acquire or has attempted to acquire Beneficial Ownership of any
shares of Class C Preferred Stock in violation of Section 10.1 of this Article
(whether or not such violation is intended), the Board of Directors or a
committee thereof shall be empowered to take any action as it deems advisable to
refuse to give effect to or to prevent such Transfer or other event, including,
but not limited to, refusing to give effect to such Transfer or other event on
the books of the Corporation, causing the Corporation to redeem such shares at
the then current Market Price and upon such terms and conditions as may be
specified by the Board of Directors in its sole discretion (including, but not
limited to, by means of the issuance of longterm indebtedness for the purpose of
such redemption), demanding the repayment of any distributions received in
respect of shares of Class C Preferred Stock acquired in violation of Section
10.1 of this Article or instituting proceedings to enjoin such Transfer or to
rescind such Transfer or attempted Transfer; PROVIDED, HOWEVER, that any
Transfers or attempted Transfers (or in the case of events other than a
Transfer, Beneficial Ownership) in violation of Section 10.1 of this Article,
regardless of any action (or nonaction) by the Board of Directors or such
committee, (a) shall be void AB INITIO or (b) shall automatically result in the
transfer described in Section 10.3 of this Article; PROVIDED, FURTHER, that the
provisions of this Section 10.2 shall be subject to the provisions of Section
10.12 of this Article; PROVIDED, FURTHER, that neither the Board of Directors
nor any committee thereof may exercise such authority in a manner that
interferes with any ownership or transfer of Class C Preferred Stock that is
expressly authorized pursuant to Section 10.8(d) of this Article.

10.3. TRANSFER IN TRUST.

(A) ESTABLISHMENT OF TRUST. If, notwithstanding the other provisions
contained in this Article, at any time after the Issue Date there is a purported
Transfer (an "EXCESS TRANSFER") (whether or not such Transfer is the result of
transactions entered into through the facilities of the NYSE or other securities
exchange or an automated interdealer quotation system) or other change in the
capital structure of the Corporation (including, but not limited to, any
redemption of Preferred Stock) or other event (including, but not limited to,
any acquisition of any share of Equity Stock) such that (a) any Person (other
than the Initial Holder or a Look-Through Entity) would Beneficially Own shares
of Class C Preferred Stock in excess of the Ownership Limit, or (b) the Initial
Holder would Beneficially Own shares of Class C Preferred Stock in excess of the
Initial Holder Limit, or (c) any Person that is a Look-Through Entity would
Beneficially Own shares of Class C Preferred Stock in excess of the Look-Through
Ownership Limit (in any such event, the Person, Initial Holder or Look-Through
Entity that would Beneficially Own shares of Class C Preferred Stock in excess
of the Ownership Limit, the Initial Holder Limit or the Look-Through Entity
Limit, respectively, is referred to as a "PROHIBITED TRANSFEREE"), then, except
as otherwise provided in Section 10.8 of this Article, such shares of Class C
Preferred Stock in excess of the Ownership Limit, the Initial Holder Limit or
the Look-Through Ownership Limit, as the case may be, (rounded up to the nearest
whole share) shall be automatically transferred to a Trustee in his capacity as
trustee of a Trust for the

<PAGE> 60

exclusive benefit of one or more Charitable Beneficiaries. Such transfer to the
Trustee shall be deemed to be effective as of the close of business on the
business day prior to the Excess Transfer, change in capital structure or
another event giving rise to a potential violation of the Ownership Limit, the
Initial Holder Limit or the Look-Through Entity Ownership Limit.

(C) STATUS OF SHARES HELD BY THE TRUSTEE. Shares of Class C Preferred
Stock held by the Trustee shall be issued and outstanding shares of capital
stock of the Corporation. Except to the extent provided in Section 10.3(E), the
Prohibited Transferee shall have no rights in the Class C Preferred Stock held
by the Trustee, and the Prohibited Transferee shall not benefit economically
from ownership of any shares held in trust by the Trustee, shall have no rights
to dividends and shall not possess any rights to vote or other rights
attributable to the shares held in the Trust.

(D) DIVIDEND AND VOTING RIGHTS. The Trustee shall have all voting
rights and rights to dividends with respect to shares of Class C Preferred Stock
held in the Trust, which rights shall be exercised for the benefit of the
Charitable Beneficiary. Any dividend or distribution paid prior to the discovery
by the Corporation that the shares of Class C Preferred Stock have been
transferred to the Trustee shall be repaid to the Corporation upon demand, and
any dividend or distribution declared but unpaid shall be rescinded as void AB
INITIO with respect to such shares of Class C Preferred Stock. Any dividends or
distributions so disgorged or rescinded shall be paid over to the Trustee and
held in trust for the Charitable Beneficiary. Any vote cast by a Prohibited
Transferee prior to the discovery by the Corporation that the shares of Class C
Preferred Stock have been transferred to the Trustee will be rescinded as void
AB INITIO and shall be recast in accordance with the desires of the Trustee
acting for the benefit of the Charitable Beneficiary. The owner of the shares at
the time of the Excess Transfer, change in capital structure or other event
giving rise to a potential violation of the Ownership Limit, Initial Holder
Limit or Look-Through Entity Ownership Limit shall be deemed to have given an
irrevocable proxy to the Trustee to vote the shares of Class C Preferred Stock
for the benefit of the Charitable Beneficiary.

(E) RESTRICTIONS ON TRANSFER. The Trustee of the Trust may sell the
shares held in the Trust to a person, designated by the Trustee, whose ownership
of the shares will not violate the Ownership Restrictions. If such a sale is
made, the interest of the Charitable Beneficiary shall terminate and proceeds of
the sale shall be payable to the Prohibited Transferee and to the Charitable
Beneficiary as provided in this Section 10.3(E). The Prohibited Transferee shall
receive the lesser of (1) the price paid by the Prohibited Transferee for the
shares or, if the Prohibited Transferee did not give value for the shares
(through a gift, devise or other transaction), the Market Price of the shares on
the day of the event causing the shares to be held in the Trust and (2) the
price per share received by the Trustee from the sale or other disposition of
the shares held in the Trust. Any proceeds in excess of the amount payable to
the Prohibited Transferee shall be payable to the Charitable Beneficiary. If any
of the transfer restrictions set forth in this Section 10.3(E) or any
application thereof is determined in a final judgment to be void, invalid or
unenforceable by any court

<PAGE> 61

having jurisdiction over the issue, the Prohibited Transferee may be deemed, at
the option of the Corporation, to have acted as the agent of the Corporation in
acquiring the Class C Preferred Stock as to which such restrictions would, by
their terms, apply, and to hold such Class C Preferred Stock on behalf of the
Corporation.

(F) PURCHASE RIGHT IN STOCK TRANSFERRED TO THE TRUSTEE. Shares of
Class C Preferred Stock transferred to the Trustee shall be deemed to have been
offered for sale to the Corporation, or its designee, at a price per share equal
to the lesser of (i) the price per share in the transaction that resulted in
such transfer to the Trust (or, in the case of a devise or gift, the Market
Price at the time of such devise or gift) and (ii) the Market Price on the date
the Corporation, or its designee, accepts such offer. The Corporation shall have
the right to accept such offer for a period of 90 days after the later of (i)
the date of the Excess Transfer or other event resulting in a transfer to the
Trust and (ii) the date that the Board of Directors determines in good faith
that an Excess Transfer or other event occurred.

(G) DESIGNATION OF CHARITABLE BENEFICIARIES. By written notice to the
Trustee, the Corporation shall designate one or more nonprofit organizations to
be the Charitable Beneficiary of the interest in the Trust relating to such
Prohibited Transferee if (i) the shares of Class C Preferred Stock held in the
Trust would not violate the Ownership Restrictions in the hands of such
Charitable Beneficiary and (ii) each Charitable Beneficiary is an organization
described in Sections 170(b)(1)(A), 170(c)(2) and 501(c)(3) of the Code.

10.4 NOTICE OF RESTRICTED TRANSFER. Any Person that acquires or attempts to
acquire shares of Class C Preferred Stock in violation of Section 10.1 of this
Article, or any Person that is a Prohibited Transferee such that stock is
transferred to the Trustee under Section 10.3 of this Article, shall immediately
give written notice to the Corporation of such event and shall provide to the
Corporation such other information as the Corporation may request in order to
determine the effect, if any, of such Transfer or attempted Transfer or other
event on the Corporation's status as a REIT. Failure to give such notice shall
not limit the rights and remedies of the Board of Directors provided herein in
any way.

10.5 OWNERS REQUIRED TO PROVIDE INFORMATION. From and after the Issue Date
certain record and Beneficial Owners and transferees of shares of Class C
Preferred Stock will be required to provide certain information as set out
below.

(A) ANNUAL DISCLOSURE. Every record and Beneficial Owner of more than
5% (or such other percentage between 0.5% and 5%, as provided in the applicable
regulations adopted under the Code) of the number of Outstanding shares of Class
C Preferred Stock shall, within 30 days after January 1 of each year, give
written notice to the Corporation stating the name and address of such record or
Beneficial Owner, the number of shares of Class C Preferred Stock Beneficially
Owned, and a full description of how such shares are held. Each such record or
Beneficial Owner of Class C Preferred Stock shall, upon demand by the
Corporation, disclose to the Corporation in writing such additional information
with respect to the Beneficial Ownership of the Class C Preferred Stock as the
Board of Directors, in its sole discretion, deems appropriate or necessary to
(i) comply with the provisions of the Code regarding the qualification of the
Corporation as a REIT under the Code and (ii) ensure compliance with the
Ownership Limit, the Initial Holder Limit or the Look-Through Ownership Limit,
as applicable. Each stockholder of record, including

<PAGE> 62

without limitation any Person that holds shares of Class C Preferred Stock on
behalf of a Beneficial Owner, shall take all reasonable steps to obtain the
written notice described in this Section 10.5 from the Beneficial Owner.

(B) DISCLOSURE AT THE REQUEST OF THE CORPORATION. Any Person that is a
Beneficial Owner of shares of Class C Preferred Stock and any Person (including
the stockholder of record) that is holding shares of Class C Preferred Stock for
a Beneficial Owner, and any proposed transferee of shares, shall provide such
information as the Corporation, in its sole discretion, may request in order to
determine the Corporation's status as a REIT, to comply with the requirements of
any taxing authority or other governmental agency, to determine any such
compliance or to ensure compliance with the Ownership Limit, the Initial Holder
Limit and the Look-Through Ownership Limit, and shall provide a statement or
affidavit to the Corporation setting forth the number of shares of Class C
Preferred Stock already Beneficially Owned by such stockholder or proposed
transferee and any related persons specified, which statement or affidavit shall
be in the form prescribed by the Corporation for that purpose.

10.6 REMEDIES NOT LIMITED. Nothing contained in this Article shall limit the
authority of the Board of Directors to take such other action as it deems
necessary or advisable (subject to the provisions of Section 10.12 of this
Article) (i) to protect the Corporation and the interests of its stockholders in
the preservation of the Corporation's status as a REIT and (ii) to insure
compliance with the Ownership Limit, the Initial Holder Limit and the
Look-Through Ownership Limit.

10.7 AMBIGUITY. In the case of an ambiguity in the application of any of the
provisions of Section 10 of this Article, or in the case of an ambiguity in any
definition contained in Section 10 of this Article, the Board of Directors shall
have the power to determine the application of the provisions of this Article
with respect to any situation based on its reasonable belief, understanding or
knowledge of the circumstances.

10.8 EXCEPTIONS. The following exceptions shall apply or may be established
with respect to the limitations of Section 10.1 of this Article.

(A) WAIVER OF OWNERSHIP LIMIT. The Board of Directors, upon receipt of a
ruling from the Internal Revenue Service or an opinion of tax counsel or other
evidence or undertaking acceptable to it, may waive the application, in whole or
in part, of the Ownership Limit to a Person subject to the Ownership Limit, if
such person is not an individual for purposes of Section 542(a) of the Code and
is a corporation, partnership, estate or trust. In connection with any such
exemption, the Board of Directors may require such representations and
undertakings from such Person and may impose such other conditions as the Board
deems necessary, in its sole discretion, to determine the effect, if any, of the
proposed Transfer on the Corporation's status as a REIT.

(B) PLEDGE BY INITIAL HOLDER. Notwithstanding any other provision of this
Article, the pledge by the Initial Holder of all or any portion of the Class C
Preferred Stock directly owned at any time or from time to time shall not
constitute a violation of Section 10.1 of this Article and the pledgee shall not
be subject to the Ownership Limit with respect to the Class C Preferred Stock so
pledged to it either as a result of the pledge or upon foreclosure.

<PAGE> 63

(C) UNDERWRITERS. For a period of 270 days following the purchase of
Class C Preferred Stock by an underwriter that (i) is a corporation or a
partnership and (ii) participates in an offering of the Class C Preferred Stock,
such underwriter shall not be subject to the Ownership Limit with respect to the
Class C Preferred Stock purchased by it as a part of or in connection with such
offering and with respect to any Class C Preferred Stock purchased in connection
with market making activities.

10.9 LEGEND. Each certificate for Class C Preferred Stock shall bear the
following legend:

"The shares of Class C Cumulative Preferred Stock represented by
this certificate are subject to restrictions on transfer. No person may
Beneficially Own shares of Class C Cumulative Preferred Stock in excess of
the Ownership Restrictions, as applicable, with certain further restrictions
and exceptions set forth in the Corporation's Charter (including the
Articles Supplementary setting forth the terms of the Class C Cumulative
Preferred Stock). Any Person that attempts to Beneficially Own shares of
Class C Cumulative Preferred Stock in excess of the applicable limitation
must immediately notify the Corporation. All capitalized terms in this
legend have the meanings ascribed to such terms in the Corporation's Charter
(including the Articles Supplementary setting forth the terms of the Class C
Cumulative Preferred Stock), as the same may be amended from time to time, a
copy of which, including the restrictions on transfer, will be sent without
charge to each stockholder that so requests. If the restrictions on transfer
are violated, the shares of Class C Cumulative Preferred Stock represented
hereby will be either (i) void in accordance with the Certificate or (ii)
automatically transferred to a Trustee of a Trust for the benefit of one or
more Charitable Beneficiaries."

10.10 SEVERABILITY. If any provision of this Article or any application of
any such provision is determined in a final and unappealable judgment to be
void, invalid or unenforceable by any Federal or state court having jurisdiction
over the issues, the validity and enforceability of the remaining provisions
shall not be affected and other applications of such provision shall be affected
only to the extent necessary to comply with the determination of such court.

10.11 BOARD OF DIRECTORS DISCRETION. Anything in this Article to the
contrary notwithstanding, the Board of Directors shall be entitled to take or
omit to take such actions as it in its discretion shall determine to be
advisable in order that the Corporation maintain its status as and continue to
qualify as a REIT, including, but not limited to, reducing the Ownership Limit,
the Initial Holder Limit and the Look-Through Ownership Limit in the event of a
change in law.

10.12 SETTLEMENT. Nothing in this Section 10 of this Article shall be
interpreted to preclude the settlement of any transaction entered into through
the facilities of the NYSE or other securities exchange or an automated
interdealer quotation system.

FOURTH: The terms of the Class C Cumulative Preferred Stock set forth in
Article Third hereof shall become Article XIV of the Charter.

<PAGE> 64

IN WITNESS WHEREOF, the Corporation has caused these presents to be signed
in its name and on its behalf by its Chairman and witnessed by its Secretary on
December 19, 1997.

WITNESS: APARTMENT INVESTMENT AND
MANAGEMENT COMPANY

/s/ Leeann Morein /s/ Terry Considine
- ----------------------- --------------------------
Leeann Morein, Terry Considine
Secretary Chairman

THE UNDERSIGNED, Chairman of APARTMENT INVESTMENT AND MANAGEMENT COMPANY,
who executed on behalf of the Corporation the Articles Supplementary of which
this Certificate is made a part, hereby acknowledges in the name and on behalf
of said Corporation the foregoing Articles Supplementary to be the corporate act
of said Corporation and hereby certifies that the matters and facts set forth
herein with respect to the authorization and approval thereof are true in all
material respects under the penalties of perjury.

/s/ Terry Considine

Terry Considine
-----------------------
Chairman

<PAGE> 65

CERTIFICATE OF CORRECTION
TO
ARTICLES SUPPLEMENTARY
CLASS C CUMULATIVE PREFERRED STOCK
(PAR VALUE $.01 PER SHARE)
OF
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
(A MARYLAND CORPORATION)

APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation (the
"Corporation"), having its principal office in Baltimore City, Maryland, hereby
certifies to the State Department of Assessments and Taxation of Maryland that:

FIRST: Articles Supplementary, dated December, 1997, of the Corporation
relating to its Class C Cumulative Preferred Stock (par value $.01 per share)
were filed with the State Department of Assessments and Taxation of Maryland on
December 22, 1997, and said Articles Supplementary require correction as
permitted by Section 1-207 of the Corporations and Associations Article of the
Annotated Code of Maryland.

SECOND: ARTICLE FIRST of the Articles Supplementary as previously filed
and to be corrected hereby read as follows:

FIRST: Pursuant to authority expressly vested in the Board of
Directors of the Corporation by Section 1.2 of Article IV of the Charter of
the Corporation, the Board of Directors has duly divided and classified
2,300,000 authorized but unissued shares of the capital stock of the
Corporation into a class designated as Class C Cumulative Preferred Stock
and has provided for the issuance of such class.

THIRD: ARTICLE FIRST of the Articles Supplementary as corrected hereby is
as follows:

FIRST: Pursuant to authority expressly vested in the Board of
Directors of the Corporation by Section 1.2 of Article IV of the Charter of
the Corporation, the Board of Directors has duly divided and classified
2,760,000 authorized but unissued shares of the capital stock of the
Corporation into a class designated as Class C Cumulative Preferred Stock
and has provided for the issuance of such class.

FOURTH: The inaccuracy or defect in ARTICLE FIRST of the Articles
Supplementary as previously filed is that ARTICLE FIRST contained the wrong
number of shares classified as Class C Cumulative Preferred Stock.

<PAGE> 66
FIFTH: ARTICLE SECOND of the Articles Supplementary as previously filed
and to be corrected hereby reads as follows:

SECOND: The reclassification increases the number of shares
classified as Class C Cumulative Preferred Stock, par value $.01 per share,
from no shares immediately prior to the reclassification to 2,300,000 shares
immediately after the reclassification. The reclassification decreases the
number of shares classified as Preferred Stock, par value $.01 per share, from
9,250,000 shares immediately prior to the reclassification to 6,950,000
shares immediately after the reclassification. The number of shares classified
as Class C Cumulative Preferred Stock may be decreased pursuant to Section 6 of
Article Third of these Articles Supplementary upon reacquisition thereof in any
manner, or by retirement thereof, by the Corporation.

SIXTH: ARTICLE SECOND of the Articles Supplementary as corrected
hereby is as follows:

SECOND: The reclassification increases the number of shares
classified as Class C Cumulative Preferred Stock, par value $.01 per share,
from no shares immediately prior to the reclassification to 2,760,00 shares
immediately after the reclassification. The reclassification decreases the
number of shares classified as Preferred Stock, par value $.01 per share, from
9,250,000 shares immediately prior to the reclassification to 6,490,000 shares
immediately after the reclassification. The number of shares classified as
Class C Cumulative Preferred Stock may be decreases pursuant to Section 6 of
Article Third of these Articles Supplementary upon reacquisition thereof in any
manner, or by retirement thereof, by the Corporation.

SEVENTH: The inaccuracies or defects in ARTICLE SECOND of the Articles
Supplementary as previously filed are that ARTICLE SECOND contained the wrong
number of shares classified as Class C Cumulative Preferred Stock immediately
after the reclassification and the wrong number of shares classified as
Preferred Stock, par value $.01 per share, immediately after the
reclassification.

EIGHTH: Section 1 of ARTICLE THIRD of the Articles Supplementary as
previously filed and to be corrected hereby reads as follows:

1. Number of Shares and Designation.

This class of Preferred Stock shall be designated as Class C
Cumulative Preferred Stock (the "Class C Preferred Stock") and Two Million
Three Hundred Thousand (2,300,000) shall be the authorized number of shares of
such Class C Preferred Stock constituting such class.

-2-
<PAGE> 67
NINTH: The first paragraph of Section 1 of ARTICLE THIRD of the Articles
Supplementary as corrected hereby is as follows:

1. Number of Shares and Designation.

This class of Preferred Stock shall be designated as Class C
Cumulative Preferred Stock (the "Class C Preferred Stock") and Two Million
Seven Hundred Sixty Thousand (2,760,000) shall be the authorized number of
shares of such Class C Preferred Stock constituting such class.

TENTH: The inaccuracy or defect in Section 1 of ARTICLE THIRD of the
Articles Supplementary as previously filed is that Section 1 of ARTICLE FIRST
contained the wrong number of shares classified as Class C Cumulative Preferred
Stock.

ELEVENTH: The definition of "Dividend Periods" contained in Section 2 of
ARTICLE THIRD of the Articles Supplementary as previously filed and to be
corrected hereby reads as follows:

"DIVIDEND PERIODS" shall mean the Initial Dividend Period and each
subsequent quarterly dividend period commencing on and including January
15, April 15, July 15 and October 15 of each year and ending on and
including the day preceding the first day of the next succeeding Dividend
Period, other than the Dividend Period during which any Class B Preferred
Stock shall be redeemed pursuant to Section 5 hereof, which shall end on
and include the Redemption Date with respect to the Class C Preferred Stock
being redeemed.

TWELFTH: The definition of "Dividend Periods" contained in Section 2 of
ARTICLE THIRD of the Articles Supplementary as corrected hereby is as follows:

"DIVIDEND PERIODS" shall mean the Initial Dividend Period and each
subsequent quarterly dividend period commencing on and including January
15, April 15, July 15 and October 15 of each year and ending on and
including the day preceding the first day of the next succeeding Dividend
Period, other than the Dividend Period during which any Class C Preferred
Stock shall be redeemed pursuant to Section 5 hereof, which shall end on
and include the Redemption Date with respect to the Class C Preferred Stock
being redeemed.

THIRTEENTH: The inaccuracy or defect in the definition of "Dividend
Periods" contained in Section 2 of ARTICLE THIRD of the Articles Supplementary
as previously filed is that the reference to "Class B Preferred Stock" in the
fifth line thereof should be to "Class C Preferred Stock."

FOURTEENTH: The definition of "Initial Holder Limit" contained in Section
2 of ARTICLE THIRD of the Articles Supplementary as previously filed and to be
corrected hereby reads as follows:

-3-
<PAGE> 68

"INITIAL HOLDER LIMIT" shall mean a number of the Outstanding shares of
Class C Preferred Stock of the Corporation having an Aggregate Value not in
excess of the excess of (x) 15% of the Aggregate Value of all Outstanding
shares of Equity Stock over (y) the Aggregate Value of all shares of Equity
Stock other than Class B Preferred Stock that are Beneficially Owned by the
Initial Holder. From the Issue Date, the secretary of the Corporation, or
such other person as shall be designated by the Board of Directors, shall
upon request make available to the representative(s) of the Initial Holder
and the Board of Directors' a schedule that sets forth the then-current
Initial Holder Limit applicable to the Initial Holder.

FIFTEENTH: The definition of "Initial Holder Limit" contained in Section 2
of ARTICLE THIRD of the Articles Supplementary as corrected hereby is as
follows:

"INITIAL HOLDER LIMIT" shall mean a number of the Outstanding shares of
Class C Preferred Stock of the Corporation having an Aggregate Value not in
excess of the excess of (x) 15% of the Aggregate Value of all Outstanding
shares of Equity Stock over (y) the Aggregate Value of all shares of Equity
Stock other than Class C Preferred Stock that are Beneficially Owned by the
Initial Holder. From the Issue Date, the secretary of the Corporation, or
such other person as shall be designated by the Board of Directors, shall
upon request make available to the representative(s) of the Initial Holder
and the Board of Directors, a schedule that sets forth the then-current
Initial Holder Limit applicable to the Initial Holder.

SIXTEENTH: The inaccuracy or defect in the definition of "Initial Holder
Limit" contained in Section 2 of ARTICLE THIRD of the Articles Supplementary as
previously filed is that the reference to "Class B Preferred Stock" in the
fourth and fifth lines thereof should be to "Class C Preferred Stock."

SEVENTEENTH: The definition of "Look-Through Ownership Limit" contained in
Section 2 of ARTICLE THIRD of the Articles Supplementary as previously filed
and to be corrected hereby reads as follows:

"LOOK-THROUGH OWNERSHIP LIMIT" shall mean, for any Look-Through Entity, a
number of the Outstanding shares of Class C Preferred Stock of the
Corporation having an Aggregate Value not in excess of the excess of (x)
15% of the Aggregate Value of all Outstanding shares of Equity Stock over
(y) by the Aggregate Value of all shares of Equity Stock other than Class B
Preferred Stock that are Beneficially Owned by the Look-Through Entity.

EIGHTEENTH: The definition of "Look-Through Ownership Limit" contained in
Section 2 of ARTICLE THIRD of the Articles Supplementary as corrected hereby is
as follows:

"LOOK-THROUGH OWNERSHIP LIMIT" shall mean, for any Look-Through Entity, a
number of the Outstanding shares of Class C Preferred Stock of the
Corporation

-4-

<PAGE> 69
having an Aggregate Value not in excess of the (x) 15% of the Aggregate
Value of all Outstanding shares of Equity Stock over (y) by the Aggregate
Value of all shares of Equity Stock other than Class C Preferred Stock that
are Beneficially Owned by the Look-Through Entity.

NINETEENTH: The inaccuracy or defect in the definition of "Look-Through
Ownership Limit" contained in Section 2 of ARTICLE THIRD of the Articles
Supplementary as previously filed is that the reference to "Class B Preferred
Stock" in the fifth line thereof should be to "Class C Preferred Stock."

TWENTIETH: The provision in the Articles Supplementary as previously filed
and to be corrected hereby reads as follows:

IN WITNESS WHEREOF, the Corporation has caused these presents to be
signed in its name and on its behalf by its Chairman and witnessed by its
Secretary on December ____, 1997.

TWENTY-FIRST: The provision in the Articles Supplementary as corrected
hereby is as follows:

IN WITNESS WHEREOF, the Corporation has caused these presents to be
signed in its name and on its behalf by its Chairman and witnessed by its
Secretary on December 22, 1997.

TWENTY-SECOND: The inaccuracy or defect in the provision of the Articles
Supplementary as previously filed is that such statement failed to state
correctly the date such Articles were signed.

-5-
<PAGE> 70
IN WITNESS WHEREOF, Apartment Investment and Management Company has caused
this Certificate of Correction to be signed in its name and on its behalf by its
Chairman and witnessed by its Secretary on February 17, 1998.

WITNESS: APARTMENT INVESTMENT AND
MANAGEMENT COMPANY

/s/ LEEANN MOREIN By: TERRY CONSIDINE
- ----------------------------- -----------------------------
Leeann Morein, Secretary Terry Considine, Chairman

The undersigned, Chairman of APARTMENT INVESTMENT AND MANAGEMENT COMPANY,
with respect to the foregoing Certificate of Correction of which this
certificate is made a part, hereby acknowledges, in the name and on behalf of
said Corporation, the foregoing Certificate of Correction to be the act of said
Corporation and further certifies that, to the best of his knowledge,
information and belief, the matters and facts set forth therein with respect to
the authorization and approval thereof are true in all material respects, under
the penalties of perjury.

/s/ TERRY CONSIDINE
-----------------------------
Terry Considine, Chairman

-6-
<PAGE> 71

ARTICLES SUPPLEMENTARY

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

CLASS D CUMULATIVE PREFERRED STOCK
(PAR VALUE $.01 PER SHARE)

FIRST: Pursuant to authority expressly vested in the Board of Directors of
the Corporation by Section 1.2 of Article IV of the Charter of the Corporation,
the Board of Directors has duly divided and classified 4,600,000 authorized but
unissued shares of the capital stock of the Corporation into a class designated
as Class D Cumulative Preferred Stock and has provided for the issuance of such
class.

SECOND: The reclassification increases the number of shares classified as
Class D Cumulative Preferred Stock, par value $.01 per share, from no shares
immediately prior to the reclassification to 4,600,000 shares immediately after
the reclassification. The reclassification decreases the number of shares
classified as Preferred Stock, par value $.01 per share, from 6,490,000 shares
immediately prior to the reclassification to 1,890,000 shares immediately after
the reclassification. The number of shares classified as Class D Cumulative
Preferred Stock may be decreased pursuant to Section 6 of Article Third of these
Articles Supplementary upon reacquisition thereof in any manner, or by
retirement thereof, by the Corporation.

THIRD: The terms of the Class D Cumulative Preferred Stock (including the
preferences, conversions or other rights, voting powers, restrictions,
limitations as to dividends and other distributions, qualifications, or terms or
conditions of redemption) as set by the Board of Directors are as follows:

1. NUMBER OF SHARES AND DESIGNATION.

This class of Preferred Stock shall be designated as Class D Cumulative
Preferred Stock (the "Class D Preferred Stock") and Four Million Six Hundred
Thousand (4,600,000) shall be the authorized number of shares of such Class D
Preferred Stock constituting such class.

<PAGE> 72

2. DEFINITIONS.

For purposes of the Class D Preferred Stock, the following terms shall have
the meanings indicated:

"ACT" shall mean the Securities Act of 1933, as amended.

"AFFILIATE" of a Person means a Person that directly, or indirectly through
one or more intermediaries, controls or is controlled by, or is under
common control with, the Person specified.

"AGGREGATE VALUE" shall mean, with respect to any block of Equity Stock,
the sum of the products of (i) the number of shares of each class of Equity
Stock within such block multiplied by (ii) the corresponding Market Price
of one share of Equity Stock of such class.

"BENEFICIAL OWNERSHIP" shall mean, with respect to any Person, ownership of
shares of Equity Stock equal to the sum of (i) the number of shares of
Equity Stock directly owned by such Person, (ii) the number of shares of
Equity Stock indirectly owned by such Person (if such Person is an
"individual" as defined in Section 542(a)(2) of the Code) taking into
account the constructive ownership rules of Section 544 of the Code, as
modified by Section 856(h)(1)(B) of the Code, and (iii) the number of
shares of Equity Stock that such Person is deemed to beneficially own
pursuant to Rule 13d3 under the Exchange Act or that is attributed to such
Person pursuant to Section 318 of the Code, as modified by Section
856(d)(5) of the Code, PROVIDED that when applying this definition of
Beneficial Ownership to the Initial Holder, clause (iii) of this
definition, and clause (ii) of the definition of "Person" shall be
disregarded. The terms "BENEFICIAL OWNER," "BENEFICIALLY OWNS" and
"BENEFICIALLY OWNED" shall have the correlative meanings.

"BOARD OF DIRECTORS" shall mean the Board of Directors of the Corporation
or any committee authorized by such Board of Directors to perform any of
its responsibilities with respect to the Class D Preferred Stock.

"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or a day on
which state or federally chartered banking institutions in New York, New
York are not required to be open.

"CHARITABLE BENEFICIARY" shall mean one or more beneficiaries of the Trust
as determined pursuant to Section 10.3 of this Article, each of which shall
be an organization described in Section 170(b)(1)(A), 170(c)(2) and
501(c)(3) of the Code.

<PAGE> 73

"CLASS D PREFERRED STOCK" shall have the meaning set forth in Section 1 of
this Article.

"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.

"DIVIDEND PAYMENT DATE" shall mean January 15, April 15, July 15 and
October 15 of each year; provided, further, that if any Dividend Payment
Date falls on any day other than a Business Day, the dividend payment
payable on such Dividend Payment Date shall be paid on the Business Day
immediately following such Dividend Payment Date and no interest shall
accrue on such dividend from such date to such Dividend Payment Date.

"DIVIDEND PERIODS" shall mean the Initial Dividend Period and each
subsequent quarterly dividend period commencing on and including January
15, April 15, July 15 and October 15 of each year and ending on and
including the day preceding the first day of the next succeeding Dividend
Period, other than the Dividend Period during which any Class D Preferred
Stock shall be redeemed pursuant to Section 5 hereof, which shall end on
and include the Redemption Date with respect to the Class D Preferred Stock
being redeemed.

"EQUITY STOCK" shall mean one or more shares of any class of capital stock
of the Corporation.

"EXCESS TRANSFER" has the meaning set forth in Section 10.3(A) of this
Article.

"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended.

"ISSUE DATE" shall mean February 19, 1998.

"INITIAL DIVIDEND PERIOD" shall mean the period commencing on and including
the Issue Date and ending on and including April 14, 1998.

"INITIAL HOLDER" shall mean Terry Considine.

"INITIAL HOLDER LIMIT" shall mean a number of the Outstanding shares of
Class D Preferred Stock of the Corporation having an Aggregate Value not in
excess

<PAGE> 74

of the excess of (x) 15% of the Aggregate Value of all Outstanding shares
of Equity Stock over (y) the Aggregate Value of all shares of Equity Stock
other than Class D Preferred Stock that are Beneficially Owned by the
Initial Holder. From the Issue Date, the secretary of the Corporation, or
such other person as shall be designated by the Board of Directors, shall
upon request make available to the representative(s) of the Initial Holder
and the Board of Directors, a schedule that sets forth the thencurrent
Initial Holder Limit applicable to the Initial Holder.

"JUNIOR STOCK" shall mean the Common Stock and any other class or series of
capital stock of the Corporation over which the shares of Class D Preferred
Stock have preference or priority in the payment of dividends or in the
distribution of assets on any liquidation, dissolution or winding up of the
Corporation.

"LOOK-THROUGH ENTITY" shall mean a Person that is either (i) described in
Section 401(a) of the Code as provided under Section 856(h)(3) of the Code
or (ii) registered under the Investment Company Act of 1940.

"LOOK-THROUGH OWNERSHIP LIMIT" shall mean, for any Look-Through Entity, a
number of the Outstanding shares of Class D Preferred Stock of the
Corporation having an Aggregate Value not in excess of the excess of (x)
15% of the Aggregate Value of all Outstanding shares of Equity Stock over
(y) by the Aggregate Value of all shares of Equity Stock other than Class D
Preferred Stock that are Beneficially Owned by the Look-Through Entity.

"MARKET PRICE" on any date shall mean, with respect to any share of Equity
Stock, the Closing Price of share of that class of Equity Stock on the
Trading Day immediately preceding such date. The term "CLOSING PRICE" on
any date shall mean the last sale price, regular way, or, in case no such
sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed
or admitted to trading on the NYSE or, if the Equity Stock is not listed or
admitted to trading on the NYSE, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the
principal national securities exchange on which the Equity Stock is listed
or admitted to trading or, if the Equity Stock is not listed or admitted to
trading on any national securities exchange, the last quoted price, or if
not so quoted, the average of the high bid and low asked prices in the
overthecounter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System or, if such system is
no longer in use, the principal other automated quotations system that may
then be in use or, if the Equity Stock is not quoted by any such
organization, the average of the closing bid and asked prices as furnished
by a professional market maker making a market in the Equity Stock selected
by the Board of

<PAGE> 75

Directors of the Company. The term "TRADING DAY" shall mean a day on which
the principal national securities exchange on which the Equity Stock is
listed or admitted to trading is open for the transaction of business or,
if the Equity Stock is not listed or admitted to trading on any national
securities exchange, shall mean any day other than a Saturday, a Sunday or
a day on which banking institutions in the State of New York are authorized
or obligated by law or executive order to close.

"NYSE" shall mean the New York Stock Exchange, Inc.

"OUTSTANDING" shall mean issued and outstanding shares of Equity Stock of
the Corporation, PROVIDED that for purposes of the application of the
Ownership Limit, the Look-Through Ownership Limit or the Initial Holder
Limit to any Person, the term "OUTSTANDING" shall be deemed to include the
number of shares of Equity Stock that such Person alone, at that time,
could acquire pursuant to any options or convertible securities.

"OWNERSHIP LIMIT" shall mean, for any Person other than the Initial Holder
or a Look-Through Entity, a number of the Outstanding shares of Class D
Preferred Stock of the Corporation having an Aggregate Value not in excess
of the excess of (x) 8.7% of the Aggregate Value of all Outstanding shares
of Equity Stock over (y) the Aggregate Value of all shares of Equity Stock
other than Class D Preferred Stock that are Beneficially Owned by the
Person.

"PARITY STOCK" shall have the meaning set forth in paragraph (b) of Section
7 of this Article. The Class B Preferred Stock and the Class C Preferred
Stock shall each be a Parity Stock.

"PERSON" shall mean (a) for purposes of Section 10 of this Article, (i) an
individual, corporation, partnership, estate, trust (including a trust
qualifying under Section 401(a) or 501(c) of the Code), association,
private foundation within the meaning of Section 509(a) of the Code, joint
stock company or other entity, and (ii) also includes a group as that term
is used for purposes of Section 13(d)(3) of the Exchange Act and (b) for
purposes of the remaining Sections of this Article, any individual, firm,
partnership, corporation or other entity and shall include any successor
(by merger or otherwise) of such entity.

"PROHIBITED TRANSFEREE" has the meaning set forth in Section 10.3(A) of
this Article.

<PAGE> 76

"REDEMPTION DATE" shall have the meaning set forth in paragraph (b) of
Section 5 of this Article.

"REIT" shall mean a "real estate investment trust" as defined in Section
856 of the Code.

"SENIOR STOCK" shall have the meaning set forth in paragraph (a) of Section
7 of this Article.

"SET APART FOR PAYMENT" shall be deemed to include, without any action
other than the following, the recording by the Corporation in its
accounting ledgers of any accounting or bookkeeping entry which indicates,
pursuant to a declaration of dividends or other distribution by the Board
of Directors, the allocation of funds to be so paid on any series or class
of capital stock of the Corporation; provided, however, that if any funds
for any class or series of Junior Stock or any class or series of Parity
Stock are placed in a separate account of the Corporation or delivered to a
disbursing, paying or other similar agent, then "set apart for payment"
with respect to the Class D Preferred Stock shall mean placing such funds
in a separate account or delivering such funds to a disbursing, paying or
other similar agent.

"TRADING DAY", as to any securities, shall mean any day on which such
securities are traded on the principal national securities exchange on
which such securities are listed or admitted or, if such securities are not
listed or admitted for trading on any national securities exchange, the
NASDAQ National Market or, if such securities are not listed or admitted
for trading on the NASDAQ National Market, in the securities market in
which such securities are traded.

"TRANSFER" shall mean any sale, transfer, gift, assignment, devise or other
disposition of a share of Class D Preferred Stock (including (i) the
granting of an option or any series of such options or entering into any
agreement for the sale, transfer or other disposition of Class D Preferred
Stock or (ii) the sale, transfer, assignment or other disposition of any
securities or rights convertible into or exchangeable for Class D Preferred
Stock), whether voluntary or involuntary, whether of record or Beneficial
Ownership, and whether by operation of law or otherwise (including, but not
limited to, any transfer of an interest in other entities that results in a
change in the Beneficial Ownership of shares of Class D Preferred Stock).
The term "TRANSFERS" and "TRANSFERRED" shall have correlative meanings.

"TRANSFER AGENT" means such transfer agent as may be designated by the
Board of Directors or their designee as the transfer agent for the Class D
Preferred Stock; provided, that if the Corporation has not designated a
transfer agent then the Corporation shall act as the transfer agent for the
Class D Preferred Stock.

<PAGE> 77

"TRUST" shall mean the trust created pursuant to Section 10.3 of this
Article.

"TRUSTEE" shall mean the Person unaffiliated with either the Corporation or
the Prohibited Transferee that is appointed by the Corporation to serve as
trustee of the Trust.

"VOTING PREFERRED STOCK" shall have the meaning set forth in Section 8 of
this Article.

3. DIVIDENDS.

(a) The holders of Class D Preferred Stock shall be entitled to
receive, when and as declared by the Board of Directors out of funds legally
available for that purpose, cumulative dividends payable in cash in an amount
per share of Class D Preferred Stock equal to $2.1875 per annum. Such dividends
shall be cumulative from the Issue Date, whether or not in any Dividend Period
or Periods such dividends shall be declared or there shall be funds of the
Corporation legally available for the payment of such dividends, and shall be
payable quarterly in arrears on each Dividend Payment Date, commencing on April
15, 1998. Each such dividend shall be payable in arrears to the holders of
record of the Class D Preferred Stock, as they appear on the stock records of
the Corporation at the close of business on the January 1, April 1, July 1 or
October 1, as the case may be, immediately preceding such Dividend Payment Date.
Accumulated, accrued and unpaid dividends for any past Dividend Periods may be
declared and paid at any time, without reference to any regular Dividend Payment
Date, to holders of record on such date, which date shall not precede by more
than 45 days the payment date thereof, as may be fixed by the Board of
Directors.

(b) The amount of dividends payable per share of Class D Preferred
Stock for the Initial Dividend Period, or any other period shorter than a full
Dividend Period, shall be computed ratably on the basis of twelve 30day months
and a 360day year. Holders of Class D Preferred Stock shall not be entitled to
any dividends, whether payable in cash, property or stock, in excess of
cumulative dividends, as herein provided, on the Class D Preferred Stock. No
interest, or sum of money in lieu of interest, shall be payable in respect of
any dividend payment or payments on the Class D Preferred Stock that may be in
arrears.

(c) So long as any of the shares of Class D Preferred Stock are
outstanding, except as described in the immediately following sentence, no
dividends shall be declared or paid or set apart for payment by the Corporation
and no other distribution of cash or other property shall be declared or made
directly or indirectly by the Corporation with respect to any class or series of
Parity Stock for any period unless dividends equal to the full amount of
accumulated, accrued and unpaid dividends have been or contemporaneously are
declared and paid or declared and a sum sufficient for the payment thereof has
been or contemporaneously is set apart for

<PAGE> 78

such payment on the Class D Preferred Stock for all Dividend Periods terminating
on or prior to the Dividend Payment Date with respect to such class or series of
Parity Stock. When dividends are not paid in full or a sum sufficient for such
payment is not set apart, as aforesaid, all dividends declared upon the Class D
Preferred Stock and all dividends declared upon any other class or series of
Parity Stock shall be declared ratably in proportion to the respective amounts
of dividends accumulated, accrued and unpaid on the Class D Preferred Stock and
accumulated, accrued and unpaid on such Parity Stock.

(d) So long as any of the shares of Class D Preferred Stock are
outstanding, no dividends (other than dividends or distributions paid in shares
of, or options, warrants or rights to subscribe for or purchase shares of,
Junior Stock) shall be declared or paid or set apart for payment by the
Corporation and no other distribution of cash or other property shall be
declared or made, directly or indirectly, by the Corporation with respect to any
shares of Junior Stock, nor shall any shares of Junior Stock be redeemed,
purchased or otherwise acquired (other than a redemption, purchase or other
acquisition of Common Stock made for purposes of an employee incentive or
benefit plan of the Corporation or any subsidiary) for any consideration (or any
moneys be paid to or made available for a sinking fund for the redemption of any
shares of any such stock), directly or indirectly, by the Corporation (except by
conversion into or exchange for shares of, or options, warrants or rights to
subscribe for or purchase shares of, Junior Stock), nor shall any other cash or
other property otherwise be paid or distributed to or for the benefit of any
holder of shares of Junior Stock in respect thereof, directly or indirectly, by
the Corporation unless in each case the full cumulative dividends (including all
accumulated, accrued and unpaid dividends) on all outstanding shares of Class D
Preferred Stock shall have been paid or such dividends have been declared and
set apart for payment for all past Dividend Periods with respect to the Class D
Preferred Stock.

4. LIQUIDATION PREFERENCE.

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distribution to such holders; but such holders shall not be entitled to any
further payment. Until the holders of the Class D Preferred Stock have been paid
the Liquidation Preference in full, plus an amount equal to all dividends
(whether or not earned or declared) accumulated, accrued and unpaid thereon to
the date of final distribution to such holders, no payment will be made to any
holder of Junior Stock upon the liquidation, dissolution or winding up of the
Corporation. If, upon any liquidation, dissolution or winding up of the
Corporation, the assets of the Corporation, or proceeds thereof, distributable
among the holders of Class D Preferred Stock shall be insufficient to pay in
full the preferential amount aforesaid and liquidating payments on any other
shares of any class or series of Parity Stock, then such assets, or the proceeds
thereof, shall be distributed among the holders of Class D Preferred Stock and
any such other Parity Stock ratably in the same proportion as the respective
amounts that would be payable on such Class D Preferred Stock and any such other
Parity Stock if all amounts payable thereon were paid in full. For the purposes
of this Section 4, (i) a consolidation or merger of the Corporation with one or
more corporations, (ii) a sale or transfer of all or substantially all of the
Corporation's assets, or (iii) a statutory share exchange shall not be deemed to
be a liquidation, dissolution or winding up, voluntary or involuntary, of the
Corporation.

(b) Upon any liquidation, dissolution or winding up of the
Corporation, after payment shall have been made in full to the holders of Class
D Preferred Stock and any Parity Stock, as provided in this Section 4, any other
series or class or classes of Junior Stock 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 D Preferred Stock and any Parity Stock
shall not be entitled to share therein.

5. REDEMPTION AT THE OPTION OF THE CORPORATION.

(a) Shares of Class D Preferred Stock shall not be redeemable by the
Corporation prior to February 19, 2003, except as set forth in Section 10.2 of
this Article. On and after February 19, 2003, the Corporation, at its option,
may redeem shares of Class D Preferred Stock, in whole or from time to time in
part, at a redemption price payable in cash equal to 100% of the Liquidation
Preference thereof, plus all accrued and unpaid dividends to the date fixed for
redemption (the "Redemption Date"). In connection with any redemption pursuant
to this Section 5(a), the redemption price of the Class D Preferred Stock (other
than any portion thereof consisting of accrued and unpaid dividends) shall be
payable solely with the proceeds from the sale by the Corporation or AIMCO
Properties, L.P., a Delaware limited Partnership (the "Operating Partnership"),
of other capital shares of the Corporation or the Operating Partnership (whether
or not such sale occurs concurrently with such redemption). For purposes of the
preceding sentence, 'capital shares' means any common stock, preferred stock,
depositary shares, partnership or other interests, participations or other
ownership interests (however designated) and any rights (other than debt
securities convertible into or exchangeable at the option of the holder for
equity securities (unless

<PAGE> 80

and to the extent such debt securities are subsequently converted into capital
shares)) or options to purchase any of the foregoing of or in the Corporation or
the Operating Partnership.

(c) If full cumulative dividends on all outstanding shares of Class D
Preferred Stock have not been paid or declared and set apart for payment, no
shares of Class D Preferred Stock may be redeemed unless all outstanding shares
of Class D Preferred Stock are simultaneously redeemed and neither the
Corporation nor any affiliate of the Corporation may purchase or acquire shares
of Class D Preferred Stock, otherwise than pursuant to a purchase or exchange
offer made on the same terms to all holders of shares of Class D Preferred
Stock.

(d) If the Corporation shall redeem shares of Class D Preferred Stock
pursuant to paragraph (a) of this Section 5, notice of such redemption shall be
given to each holder of record of the shares to be redeemed. Such notice shall
be provided by first class mail, postage prepaid, at such holder's address as
the same appears on the stock records of the Corporation. Neither the failure to
mail any notice required by this paragraph (d), nor any defect therein or in the
mailing thereof to any particular holder, shall affect the sufficiency of the
notice or the validity of the proceedings for redemption with respect to the
other holders. Any notice which was mailed in the manner herein provided shall
be conclusively presumed to have been duly given on the date mailed whether or
not the holder receives the notice. Each such notice shall state, as
appropriate: (1) the Redemption Date; (2) the number of shares of Class D
Preferred Stock to be redeemed and, if fewer than all such shares held by such
holder are to be redeemed, the number of such shares to be redeemed from such
holder; and (3) the place or places at which certificates for such shares are to
be surrendered for cash. Notice having been mailed as aforesaid, from and after
the Redemption Date (unless the Corporation shall fail to make available the
amount of cash necessary to effect such redemption), (i) except as otherwise
provided herein, dividends on the shares of Class D Preferred Stock so called
for redemption shall cease to accumulate or accrue on the shares of Class D
Preferred Stock called for redemption (except that, in the case of a Redemption
Date after a dividend record date and prior to the related Dividend Payment
Date, holders of Class D Preferred Stock on the dividend record date will be
entitled on such Dividend Payment Date to receive the dividend payable on such
shares), (ii) said shares shall no longer be deemed to be outstanding, and (iii)
all rights of the holders thereof as holders of Class D Preferred Stock of the
Corporation shall cease (except the rights to receive the cash payable upon such
redemption, without interest thereon, upon surrender and endorsement of their
certificates if so required and to receive any dividends payable thereon). The
Corporation's obligation to make available the redemption price in accordance
with the preceding sentence shall be deemed fulfilled if, on or before the Call
Date, the

<PAGE> 81

Corporation shall deposit with a bank or trust company (which may be an
affiliate of the Corporation) that has, or is an affiliate of a bank or trust
company that has, a capital and surplus of at least $50,000,000, such amount of
cash as is necessary for such redemption, in trust, with irrevocable
instructions that such cash be applied to the redemption of the shares of Class
D Preferred Stock so called for redemption. No interest shall accrue for the
benefit of the holders of shares of Class D Preferred Stock to be redeemed on
any cash so set aside by the Corporation. Subject to applicable escheat laws,
any such cash unclaimed at the end of two years from the Redemption Date shall
revert to the general funds of the Corporation, after which reversion the
holders of shares of Class D Preferred Stock so called for redemption shall look
only to the general funds of the Corporation for the payment of such cash.

As promptly as practicable after the surrender in accordance with such
notice of the certificates for any such shares of Class D Preferred Stock to be
so redeemed (properly endorsed or assigned for transfer, if the Corporation
shall so require and the notice shall so state), such certificates shall be
exchanged for cash (without interest thereon) for which such shares have been
redeemed in accordance with such notice. If fewer than all the outstanding
shares of Class D Preferred Stock are to be redeemed, shares to be redeemed
shall be selected by the Corporation from outstanding shares of Class D
Preferred Stock not previously called for redemption by lot or, with respect to
the number of shares of Class D Preferred Stock held of record by each holder of
such shares, pro rata (as nearly as may be) or by any other method as may be
determined by the Board of Directors in its discretion to be equitable. If fewer
than all the shares of Class D Preferred Stock represented by any certificate
are redeemed, then a new certificate representing the unredeemed shares shall be
issued without cost to the holders thereof.

6. STATUS OF REACQUIRED STOCK.

All shares of Class D Preferred Stock which shall have been issued and
reacquired in any manner by the Corporation shall be returned to the status of
authorized, but unissued shares of Class D Preferred Stock.

7. RANKING.

Any class or series of capital stock of the Corporation shall be deemed to
rank:

(a) prior or senior to the Class D Preferred Stock, as to the payment
of dividends and as to distribution of assets upon liquidation, dissolution or
winding up, if the holders of such class or series shall be entitled to the
receipt of dividends or of amounts distributable upon liquidation, dissolution
or winding up, as the case may be, in preference or priority to the holders of
Class D Preferred Stock ("Senior Stock");

<PAGE> 82

(b) on a parity with the Class D Preferred Stock, as to the payment of
dividends and as to distribution of assets upon liquidation, dissolution or
winding up, whether or not the dividend rates, dividend payment dates or
redemption or liquidation prices per share thereof be different from those of
the Class D Preferred Stock, if the holders of such class of stock or series and
the Class D Preferred Stock shall be entitled to the receipt of dividends and of
amounts distributable upon liquidation, dissolution or winding up in proportion
to their respective amounts of accrued and unpaid dividends per share or
liquidation preferences, without preference or priority one over the other
("Parity Stock"); and

(c) junior to the Class D Preferred Stock, as to the payment of
dividends or as to the distribution of assets upon liquidation, dissolution or
winding up, if such stock or series shall be Common Stock or if the holders of
Class D Preferred Stock shall be entitled to receipt of dividends or of amounts
distributable upon liquidation, dissolution or winding up, as the case may be,
in preference or priority to the holders of shares of such class or series
("Junior Stock").

8. VOTING.

(a) If and whenever six quarterly dividends (whether or not
consecutive) payable on the Class D Preferred Stock or any series or class of
Parity Stock shall be in arrears (which shall, with respect to any such
quarterly dividend, mean that any such dividend has not been paid in full),
whether or not earned or declared, the number of directors then constituting the
Board of Directors shall be increased by two (if not already increased by reason
of similar types of provisions with respect to shares of Parity Stock of any
other class or series which is entitled to similar voting rights (the "Voting
Preferred Stock")) and the holders of shares of Class D Preferred Stock,
together with the holders of shares of all other Voting Preferred Stock then
entitled to exercise similar voting rights, voting as a single class regardless
of series, shall be entitled to elect the two additional directors to serve on
the Board of Directors at any annual meeting of stockholders or special meeting
held in place thereof, or at a special meeting of the holders of the Class D
Preferred Stock and the Voting Preferred Stock called as hereinafter provided.
Whenever all arrears in dividends on the Class D Preferred Stock and the Voting
Preferred Stock then outstanding shall have been paid and dividends thereon for
the current quarterly dividend period shall have been paid or declared and set
apart for payment, then the right of the holders of the Class D Preferred Stock
and the Voting Preferred Stock to elect such additional two directors shall
cease (but subject always to the same provision for the vesting of such voting
rights in the case of any similar future arrearages), and the terms of office of
all Persons elected as directors by the holders of the Class D Preferred Stock
and the Voting Preferred Stock shall forthwith terminate and the number of
directors constituting the Board of Directors shall be reduced accordingly. At
any time after such voting power shall have been so vested in the holders of
Class D Preferred Stock and the Voting Preferred Stock, if applicable, the
Secretary of the Corporation may, and upon the written request of any holder of
Class D Preferred

<PAGE> 83

Stock (addressed to the Secretary at the principal office of the Corporation)
shall, call a special meeting of the holders of the Class D Preferred Stock and
of the Voting Preferred Stock for the election of the two directors to be
elected by them as herein provided, such call to be made by notice similar to
that provided in the Bylaws of the Corporation for a special meeting of the
stockholders or as required by law. If any such special meeting required to be
called as above provided shall not be called by the Secretary within 20 days
after receipt of any such request, then any holder of Class D Preferred Stock
may call such meeting, upon the notice above provided, and for that purpose
shall have access to the stock books of the Corporation. The directors elected
at any such special meeting shall hold office until the next annual meeting of
the stockholders or special meeting held in lieu thereof if such office shall
not have previously terminated as above provided. If any vacancy shall occur
among the directors elected by the holders of the Class D Preferred Stock and
the Voting Preferred Stock, a successor shall be elected by the Board of
Directors, upon the nomination of the then remaining director elected by the
holders of the Class D Preferred Stock and the Voting Preferred Stock or the
successor of such remaining director, to serve until the next annual meeting of
the stockholders or special meeting held in place thereof if such office shall
not have previously terminated as provided above.

(b) So long as any shares of Class D Preferred Stock are outstanding,
in addition to any other vote or consent of stockholders required by law or by
the Charter of the Corporation, the affirmative vote of at least 662/3% of the
votes entitled to be cast by the holders of the Class D Preferred Stock voting
as a single class with the holders of all other classes or series of Preferred
Stock entitled to vote on such matters, given in Person or by proxy, either in
writing without a meeting or by vote at any meeting called for the purpose,
shall be necessary for effecting or validating:

(i) Any amendment, alteration or repeal of any of the provisions
of these Articles Supplementary, the Charter or the ByLaws of the Corporation
that materially adversely affects the voting powers, rights or preferences of
the holders of the Class D Preferred Stock; provided, however, that the
amendment of the provisions of the Charter so as to authorize or create, or to
increase the authorized amount of, or issue any Junior Stock or any shares of
any class of Parity Stock shall not be deemed to materially adversely affect the
voting powers, rights or preferences of the holders of Class D Preferred Stock;
or

(ii) The authorization, creation of, the increase in the
authorized amount of, or issuance of any shares of any class of Senior Stock or
any security convertible into shares of any class of Senior Stock (whether or
not such class of Senior Stock is currently authorized); provided, however, that
no such vote of the holders of Class D Preferred Stock shall be required if, at
or prior to the time when such amendment, alteration or repeal is to take
effect, or when the issuance of any such prior shares or convertible security is
to be made, as the case may be, provision

<PAGE> 84

is made for the redemption of all shares of Class D Preferred Stock at the time
outstanding to the extent such redemption is authorized by Section 5 of this
Article.

For purposes of the foregoing provisions and all other voting rights under
these Articles Supplementary, each share of Class D Preferred Stock shall have
one (1) vote per share, except that when any other class or series of preferred
stock shall have the right to vote with the Class D Preferred Stock as a single
class on any matter, then the Class D Preferred Stock and such other class or
series shall have with respect to such matters one quarter of one (.25) vote per
$25 of stated liquidation preference. Except as otherwise required by applicable
law or as set forth herein, the Class D Preferred Stock shall not have any
relative, participating, optional or other special voting rights and powers
other than as set forth herein, and the consent of the holders thereof shall not
be required for the taking of any corporate action.

9. RECORD HOLDERS.

The Corporation and the Transfer Agent may deem and treat the record holder
of any share of Class D Preferred Stock as the true and lawful owner thereof for
all purposes, and neither the Corporation nor the Transfer Agent shall be
affected by any notice to the contrary.

10.1 RESTRICTIONS ON OWNERSHIP AND TRANSFERS.

(A) LIMITATION ON BENEFICIAL OWNERSHIP. Except as provided in Section
10.8, from and after the Issue Date, no Person (other than the Initial Holder or
a Look-Through Entity) shall Beneficially Own shares of Class D Preferred Stock
in excess of the Ownership Limit, the Initial Holder shall not Beneficially Own
shares of Class D Preferred Stock in excess of the Initial Holder Limit and no
Look-Through Entity shall Beneficially Own shares of Class D Preferred Stock in
excess of the Look-Through Ownership Limit.

(B) TRANSFERS IN EXCESS OF OWNERSHIP LIMIT. Except as provided in
Section 10.8, from and after the Issue Date (and subject to Section 10.12), any
Transfer (whether or not such Transfer is the result of transactions entered
into through the facilities of the NYSE or other securities exchange or an
automated interdealer quotation system) that, if effective, would result in any
Person (other than the Initial Holder or a Look-Through Entity) Beneficially
Owning shares of Class D Preferred Stock in excess of the Ownership Limit shall
be void AB INITIO as to the Transfer of such shares of Class D Preferred Stock
that would be otherwise Beneficially Owned by such Person in excess of the
Ownership Limit, and the intended transferee shall acquire no rights in such
shares of Class D Preferred Stock.

<PAGE> 85

through the facilities of the NYSE or other securities exchange or an automated
interdealer quotation system) that, if effective, would result in the Initial
Holder Beneficially Owning shares of Class D Preferred Stock in excess of the
Initial Holder Limit shall be void AB INITIO as to the Transfer of such shares
of Class D Preferred Stock that would be otherwise Beneficially Owned by the
Initial Holder in excess of the Initial Holder limit, and the Initial Holder
shall acquire no rights in such shares of Class D Preferred Stock.

(D) TRANSFERS IN EXCESS OF LOOK-THROUGH OWNERSHIP LIMIT. Except as
provided in Section 10.8 from and after the Issue Date (and subject to Section
10.12), any Transfer (whether or not such Transfer is the result of transactions
entered into through the facilities of the NYSE or other securities exchange or
an automated interdealer quotation system) that, if effective, would result in
any Look-Through Entity Beneficially Owning shares of Class D Preferred Stock in
excess of the Look-Through Ownership limit shall be void AB INITIO as to the
Transfer of such shares of Class D Preferred Stock that would be otherwise
Beneficially Owned by such Look-Through Entity in excess of the Look-Through
Ownership Limit and such Look-Through Entity shall acquire no rights in such
shares of Class D Preferred Stock.

(E) TRANSFERS RESULTING IN "CLOSELY HELD" STATUS. From and after the
Issue Date, any Transfer that, if effective would result in the Corporation
being "closely held" within the meaning of Section 856(h) of the Code, or would
otherwise result in the Corporation failing to qualify as a REIT (including,
without limitation, a Transfer or other event that would result in the
Corporation owning (directly or constructively) an interest in a tenant that is
described in Section 856(d)(2)(B) of the Code if the income derived by the
Corporation from such tenant would cause the Corporation to fail to satisfy any
of the gross income requirements of Section 856(c) of the Code) shall be void AB
INITIO as to the Transfer of shares of Class D Preferred Stock that would cause
the Corporation (i) to be "closely held" within the meaning of Section 856(h) of
the Code or (ii) otherwise fail to qualify as a REIT, as the case may be, and
the intended transferee shall acquire no rights in such shares of Class D
Preferred Stock.

(F) SEVERABILITY ON VOID TRANSACTIONS. A Transfer of a share of Class
D Preferred Stock that is null and void under Sections 10.1(B), (C), (D), or (E)
of this Article because it would, if effective, result in (i) the ownership of
Class D Preferred Stock in excess of the Initial Holder Limit, the Ownership
Limit, or the Look-Through Ownership Limit, (ii) the Corporation being "closely
held" within the meaning of Section 856(h) of the Code or (iii) the Corporation
otherwise failing to qualify as a REIT, shall not adversely affect the validity
of the Transfer of any other share of Class D Preferred Stock in the same or any
other related transaction.

<PAGE> 86

attempted to acquire Beneficial Ownership of any shares of Class D Preferred
Stock in violation of Section 10.1 of this Article (whether or not such
violation is intended), the Board of Directors or a committee thereof shall be
empowered to take any action as it deems advisable to refuse to give effect to
or to prevent such Transfer or other event, including, but not limited to,
refusing to give effect to such Transfer or other event on the books of the
Corporation, causing the Corporation to redeem such shares at the then current
Market Price and upon such terms and conditions as may be specified by the Board
of Directors in its sole discretion (including, but not limited to, by means of
the issuance of longterm indebtedness for the purpose of such redemption),
demanding the repayment of any distributions received in respect of shares of
Class D Preferred Stock acquired in violation of Section 10.1 of this Article or
instituting proceedings to enjoin such Transfer or to rescind such Transfer or
attempted Transfer; PROVIDED, HOWEVER, that any Transfers or attempted Transfers
(or in the case of events other than a Transfer, Beneficial Ownership) in
violation of Section 10.1 of this Article, regardless of any action (or
nonaction) by the Board of Directors or such committee, (a) shall be void AB
INITIO or (b) shall automatically result in the transfer described in Section
10.3 of this Article; PROVIDED, FURTHER, that the provisions of this Section
10.2 shall be subject to the provisions of Section 10.12 of this Article;
PROVIDED, FURTHER, that neither the Board of Directors nor any committee thereof
may exercise such authority in a manner that interferes with any ownership or
transfer of Class D Preferred Stock that is expressly authorized pursuant to
Section 10.8(d) of this Article.

10.3. TRANSFER IN TRUST.

(A) ESTABLISHMENT OF TRUST. If, notwithstanding the other provisions
contained in this Article, at any time after the Issue Date there is a purported
Transfer (an "EXCESS TRANSFER") (whether or not such Transfer is the result of
transactions entered into through the facilities of the NYSE or other securities
exchange or an automated interdealer quotation system) or other change in the
capital structure of the Corporation (including, but not limited to, any
redemption of Preferred Stock) or other event (including, but not limited to,
any acquisition of any share of Equity Stock) such that (a) any Person (other
than the Initial Holder or a Look-Through Entity) would Beneficially Own shares
of Class D Preferred Stock in excess of the Ownership Limit, or (b) the Initial
Holder would Beneficially Own shares of Class D Preferred Stock in excess of the
Initial Holder Limit, or (c) any Person that is a Look-Through Entity would
Beneficially Own shares of Class D Preferred Stock in excess of the Look-Through
Ownership Limit (in any such event, the Person, Initial Holder or Look-Through
Entity that would Beneficially Own shares of Class D Preferred Stock in excess
of the Ownership Limit, the Initial Holder Limit or the Look-Through Entity
Limit, respectively, is referred to as a "PROHIBITED TRANSFEREE"), then, except
as otherwise provided in Section 10.8 of this Article, such shares of Class D
Preferred Stock in excess of the Ownership Limit, the Initial Holder Limit or
the Look-Through Ownership Limit, as the case may be, (rounded up to the nearest
whole share) shall be automatically transferred to a Trustee in his capacity as
trustee of a Trust for the

<PAGE> 87

(C) STATUS OF SHARES HELD BY THE TRUSTEE. Shares of Class D
Preferred Stock held by the Trustee shall be issued and outstanding shares of
capital stock of the Corporation. Except to the extent provided in Section
10.3(E), the Prohibited Transferee shall have no rights in the Class D Preferred
Stock held by the Trustee, and the Prohibited Transferee shall not benefit
economically from ownership of any shares held in trust by the Trustee, shall
have no rights to dividends and shall not possess any rights to vote or other
rights attributable to the shares held in the Trust.

(D) DIVIDEND AND VOTING RIGHTS. The Trustee shall have all voting
rights and rights to dividends with respect to shares of Class D Preferred Stock
held in the Trust, which rights shall be exercised for the benefit of the
Charitable Beneficiary. Any dividend or distribution paid prior to the discovery
by the Corporation that the shares of Class D Preferred Stock have been
transferred to the Trustee shall be repaid to the Corporation upon demand, and
any dividend or distribution declared but unpaid shall be rescinded as void AB
INITIO with respect to such shares of Class D Preferred Stock. Any dividends or
distributions so disgorged or rescinded shall be paid over to the Trustee and
held in trust for the Charitable Beneficiary. Any vote cast by a Prohibited
Transferee prior to the discovery by the Corporation that the shares of Class D
Preferred Stock have been transferred to the Trustee will be rescinded as void
AB INITIO and shall be recast in accordance with the desires of the Trustee
acting for the benefit of the Charitable Beneficiary. The owner of the shares at
the time of the Excess Transfer, change in capital structure or other event
giving rise to a potential violation of the Ownership Limit, Initial Holder
Limit or Look-Through Entity Ownership Limit shall be deemed to have given an
irrevocable proxy to the Trustee to vote the shares of Class D Preferred Stock
for the benefit of the Charitable Beneficiary.

<PAGE> 88

paid by the Prohibited Transferee for the shares or, if the Prohibited
Transferee did not give value for the shares (through a gift, devise or other
transaction), the Market Price of the shares on the day of the event causing the
shares to be held in the Trust and (2) the price per share received by the
Trustee from the sale or other disposition of the shares held in the Trust. Any
proceeds in excess of the amount payable to the Prohibited Transferee shall be
payable to the Charitable Beneficiary. If any of the transfer restrictions set
forth in this Section 10.3(E) or any application thereof is determined in a
final judgment to be void, invalid or unenforceable by any court having
jurisdiction over the issue, the Prohibited Transferee may be deemed, at the
option of the Corporation, to have acted as the agent of the Corporation in
acquiring the Class D Preferred Stock as to which such restrictions would, by
their terms, apply, and to hold such Class D Preferred Stock on behalf of the
Corporation.

(F) PURCHASE RIGHT IN STOCK TRANSFERRED TO THE TRUSTEE. Shares of
Class D Preferred Stock transferred to the Trustee shall be deemed to have been
offered for sale to the Corporation, or its designee, at a price per share equal
to the lesser of (i) the price per share in the transaction that resulted in
such transfer to the Trust (or, in the case of a devise or gift, the Market
Price at the time of such devise or gift) and (ii) the Market Price on the date
the Corporation, or its designee, accepts such offer. The Corporation shall have
the right to accept such offer for a period of 90 days after the later of (i)
the date of the Excess Transfer or other event resulting in a transfer to the
Trust and (ii) the date that the Board of Directors determines in good faith
that an Excess Transfer or other event occurred.

(G) DESIGNATION OF CHARITABLE BENEFICIARIES. By written notice to
the Trustee, the Corporation shall designate one or more nonprofit organizations
to be the Charitable Beneficiary of the interest in the Trust relating to such
Prohibited Transferee if (i) the shares of Class D Preferred Stock held in the
Trust would not violate the Ownership Restrictions in the hands of such
Charitable Beneficiary and (ii) each Charitable Beneficiary is an organization
described in Sections 170(b)(1)(A), 170(c)(2) and 501(c)(3) of the Code.

10.4 NOTICE OF RESTRICTED TRANSFER. Any Person that acquires or attempts to
acquire shares of Class D Preferred Stock in violation of Section 10.1 of this
Article, or any Person that is a Prohibited Transferee such that stock is
transferred to the Trustee under Section 10.3 of this Article, shall immediately
give written notice to the Corporation of such event and shall provide to the
Corporation such other information as the Corporation may request in order to
determine the effect, if any, of such Transfer or attempted Transfer or other
event on the Corporation's status as a REIT. Failure to give such notice shall
not limit the rights and remedies of the Board of Directors provided herein in
any way.

10.5 OWNERS REQUIRED TO PROVIDE INFORMATION. From and after the Issue Date
certain record and Beneficial Owners and transferees of shares of Class D
Preferred Stock will be required to provide certain information as set out
below.

<PAGE> 89

(A) ANNUAL DISCLOSURE. Every record and Beneficial Owner of more
than 5% (or such other percentage between 0.5% and 5%, as provided in the
applicable regulations adopted under the Code) of the number of Outstanding
shares of Class D Preferred Stock shall, within 30 days after January 1 of each
year, give written notice to the Corporation stating the name and address of
such record or Beneficial Owner, the number of shares of Class D Preferred Stock
Beneficially Owned, and a full description of how such shares are held. Each
such record or Beneficial Owner of Class D Preferred Stock shall, upon demand by
the Corporation, disclose to the Corporation in writing such additional
information with respect to the Beneficial Ownership of the Class D Preferred
Stock as the Board of Directors, in its sole discretion, deems appropriate or
necessary to (i) comply with the provisions of the Code regarding the
qualification of the Corporation as a REIT under the Code and (ii) ensure
compliance with the Ownership Limit, the Initial Holder Limit or the
Look-Through Ownership Limit, as applicable. Each stockholder of record,
including without limitation any Person that holds shares of Class D Preferred
Stock on behalf of a Beneficial Owner, shall take all reasonable steps to obtain
the written notice described in this Section 10.5 from the Beneficial Owner.

(B) DISCLOSURE AT THE REQUEST OF THE CORPORATION. Any Person that is
a Beneficial Owner of shares of Class D Preferred Stock and any Person
(including the stockholder of record) that is holding shares of Class D
Preferred Stock for a Beneficial Owner, and any proposed transferee of shares,
shall provide such information as the Corporation, in its sole discretion, may
request in order to determine the Corporation's status as a REIT, to comply with
the requirements of any taxing authority or other governmental agency, to
determine any such compliance or to ensure compliance with the Ownership Limit,
the Initial Holder Limit and the Look-Through Ownership Limit, and shall provide
a statement or affidavit to the Corporation setting forth the number of shares
of Class D Preferred Stock already Beneficially Owned by such stockholder or
proposed transferee and any related persons specified, which statement or
affidavit shall be in the form prescribed by the Corporation for that purpose.

10.6 REMEDIES NOT LIMITED. Nothing contained in this Article shall limit
the authority of the Board of Directors to take such other action as it deems
necessary or advisable (subject to the provisions of Section 10.12 of this
Article) (i) to protect the Corporation and the interests of its stockholders in
the preservation of the Corporation's status as a REIT and (ii) to insure
compliance with the Ownership Limit, the Initial Holder Limit and the
Look-Through Ownership Limit.

10.7 AMBIGUITY. In the case of an ambiguity in the application of any of
the provisions of Section 10 of this Article, or in the case of an ambiguity in
any definition contained in Section 10 of this Article, the Board of Directors
shall have the power to determine the application of the provisions of this
Article with respect to any situation based on its reasonable belief,
understanding or knowledge of the circumstances.

<PAGE> 90

10.8 EXCEPTIONS. The following exceptions shall apply or may be established
with respect to the limitations of Section 10.1 of this Article.

(A) WAIVER OF OWNERSHIP LIMIT. The Board of Directors, upon receipt
of a ruling from the Internal Revenue Service or an opinion of tax counsel or
other evidence or undertaking acceptable to it, may waive the application, in
whole or in part, of the Ownership Limit to a Person subject to the Ownership
Limit, if such person is not an individual for purposes of Section 542(a) of the
Code and is a corporation, partnership, estate or trust. In connection with any
such exemption, the Board of Directors may require such representations and
undertakings from such Person and may impose such other conditions as the Board
deems necessary, in its sole discretion, to determine the effect, if any, of the
proposed Transfer on the Corporation's status as a REIT.

(B) PLEDGE BY INITIAL HOLDER. Notwithstanding any other provision of
this Article, the pledge by the Initial Holder of all or any portion of the
Class D Preferred Stock directly owned at any time or from time to time shall
not constitute a violation of Section 10.1 of this Article and the pledgee shall
not be subject to the Ownership Limit with respect to the Class D Preferred
Stock so pledged to it either as a result of the pledge or upon foreclosure.

(C) UNDERWRITERS. For a period of 270 days following the purchase of
Class D Preferred Stock by an underwriter that (i) is a corporation or a
partnership and (ii) participates in an offering of the Class D Preferred Stock,
such underwriter shall not be subject to the Ownership Limit with respect to the
Class D Preferred Stock purchased by it as a part of or in connection with such
offering and with respect to any Class D Preferred Stock purchased in connection
with market making activities.

10.9 LEGEND. Each certificate for Class D Preferred Stock shall bear the
following legend:

<PAGE> 91

without charge to each stockholder that so requests. If the restrictions on
transfer are violated, the shares of Class D Cumulative Preferred Stock
represented hereby will be either (i) void in accordance with the
Certificate or (ii) automatically transferred to a Trustee of a Trust for
the benefit of one or more Charitable Beneficiaries."

FOURTH: The terms of the Class D Cumulative Preferred Stock set forth
in Article Third hereof shall become Article XV of the Charter.

<PAGE> 92

IN WITNESS WHEREOF, the Corporation has caused these presents to be signed
in its name and on its behalf by its Senior Vice President and Chief Financial
Officer and witnessed by its Secretary on February 17, 1998.

WITNESS: APARTMENT INVESTMENT AND
MANAGEMENT COMPANY

/s/ Leeann Morein /s/ Troy D. Butts
- --------------------------- ------------------------------

Leeann Morein, Troy D. Butts
Secretary Senior Vice President and
Chief Financial Officer

THE UNDERSIGNED, Senior Vice President and Chief Financial Officer of
APARTMENT INVESTMENT AND MANAGEMENT COMPANY, who executed on behalf of the
Corporation the Articles Supplementary of which this Certificate is made a part,
hereby acknowledges in the name and on behalf of said Corporation the foregoing
Articles Supplementary to be the corporate act of said Corporation and hereby
certifies that the matters and facts set forth herein with respect to the
authorization and approval thereof are true in all material respects under the
penalties of perjury.

/s/ Troy D. Butts
-----------------------------------
Troy D. Butts
Senior Vice President and
Chief Financial Officer

<PAGE> 93
ARTICLES OF MERGER

BETWEEN

APARTMENT INVESTMENT AND MANAGEMENT COMPANY
(a Maryland corporation)

AND

AMBASSADOR APARTMENTS, INC.
(a Maryland corporation)

APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a corporation duly organized
and existing under the laws of the State of Maryland ("AIMCO"), and AMBASSADOR
APARTMENTS, INC., a corporation duly organized and existing under the laws of
the State of Maryland ("AAI"), do hereby certify that:

FIRST: AIMCO and AAI have agreed to merge.

SECOND: The name and place of incorporation of each party to these
Articles are APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland
corporation, and AMBASSADOR APARTMENTS, INC., a Maryland corporation. AIMCO
shall survive the merger and shall continue under the name "APARTMENT
INVESTMENT AND MANAGEMENT COMPANY" as a corporation of the State of Maryland.

THIRD: AIMCO has its principal office in Baltimore City, Maryland. AAI has
its principal office in Baltimore City, Maryland and does not own an interest
in land in the State of Maryland.

FOURTH: The terms and conditions of the transaction set forth in these
Articles were advised, authorized, and approved by each corporation party to
the Articles in the manner and by the vote required by its Charter and the laws
of the state of its incorporation. The manner of approval was as follows:

(a) The Board of Directors of AIMCO at meetings held on December 21,
1997 and May 7, 1998 adopted resolutions (by a vote of a majority of the entire
Board of Directors) which declared that the proposed merger was advisable on
substantially the terms and conditions set forth or referred to in the
resolutions and approved the proposed merger.

(b) The Board of Directors of AAI at meetings held on, or by
unanimous consents dated, December 23, 1997, March 9, 1998, and March 13, 1998
adopted resolutions (by a vote of a majority of the entire Board of Directors)
which declared that the proposed merger was advisable on substantially the
terms and conditions set forth or referred to in the resolutions and directed
that the proposed merger be submitted for consideration at a special meeting of
the stockholders of AAI.

-1-
<PAGE> 94
(c) Notice which stated that a purpose of the meeting was to act on
the proposed merger was given by AAI to AAI's stockholders of record as
required by law.

(d) The proposed merger was approved by the stockholders of AAI at a
special meeting of stockholders held May 8, 1998, by the affirmative vote of
two-thirds of all the votes entitled to be cast on the matter.

FIFTH: No amendment to the Charter of AIMCO is to be effected as a part of
the merger. The merger does not reclassify or change the outstanding capital
stock of AIMCO. The number of shares of Class A Common Stock, par value $.01
per share, of AIMCO to be issued or delivered in the proposed merger is not
more than 20 percent of the number of shares of Class A Common Stock, par value
$.01 per share, of AIMCO outstanding immediately before the proposed merger
becomes effective.

SIXTH: (a) The total number of shares of capital stock of all classes
which AIMCO has authority to issue is 160,262,500 shares, currently classified
as follows:

150,000,000 shares of Class A Common Stock, par value $.01 per share;

262,500 shares of Class B Common Stock, par value $.01 per share;

1,890,000 shares of Preferred Stock, par value $.01 per share;

750,000 shares of Class B Cumulative Convertible Preferred Stock, par
value $.01 per share;

2,760,000 shares of Class C Cumulative Preferred Stock, par value
$.01 per share; and

4,600,000 shares of Class D Cumulative Preferred Stock, par value
$.01 per share.

The aggregate par value of all the shares of stock of all classes of AIMCO is
$1,602,625.00.

(b) The total number of shares of capital stock of all classes which
AAI has authority to issue is 240,000,000 shares, currently classified as
follows:

100,000,000 shares of Common Stock, par value $.01 per share;

18,648,649 shares of Preferred Stock, par value $.01 per share;

1,351,351 shares of Class A Senior Cumulative Convertible Preferred
Stock, par value $.01 per share;

100,000,000 shares of Excess Common Stock, par value $.01 per share;

18,648,649 shares of Excess Preferred Stock, par value $.01 per
share; and

1,351,351 shares of Excess Class A Preferred Stock, par value $.01 per
share.

-2-
<PAGE> 95
The aggregate par value of all the shares of stock of all classes of AAI is
$2,400,000.00.

SEVENTH: The merger does not increase the authorized stock of AIMCO.

EIGHTH: The manner and basis of converting or exchanging issued stock of
the merging corporations into different stock of a corporation, for other
consideration and the treatment of any issued stock of the merging corporations
not to be converted or exchanged are as follows:

(a) Each issued and outstanding share of the capital stock of AIMCO
at the effective time of the merger shall continue, without change as to class,
series or otherwise, to be an issued and outstanding share of capital stock of
AIMCO.

(b) Each issued and outstanding share of Common Stock, par value $.01
per share, of AAI at the effective time of the merger, other than shares of
Common Stock, par value $.01 per share, of AAI held by AAI or AIMCO, shall upon
effectiveness and without further act be converted into and become 0.553 shares
of Class A Common Stock, par value $.01 per share, of AIMCO. In lieu of
issuance of fractional shares of Class A Common Stock, par value $.01 per
share, of AIMCO, cash will be paid at the rate of $38.00 per share. Each issued
and outstanding share of Common Stock, par value $.01 per share, of AAI at the
effective time of the merger held by AAI or AIMCO shall upon effectiveness and
without further act be canceled. There will be no issued and outstanding shares
of Preferred Stock, par value $.01 per share, Class A Senior Cumulative
Convertible Preferred Stock, par value $.01 per share, Excess Common Stock, par
value $.01 per share, Excess Preferred Stock, par value $.01 per share, or
Excess Class A Preferred Stock, par value $.01 per share, of AAI at the
effective time of the merger.

(c) As soon as practicable following the effective time of the
merger, each holder of issued and outstanding shares of Common Stock, par value
$.01 per share, of AAI shall be entitled to surrender to AIMCO the certificates
representing the shares of Common Stock, par value $.01 per share, of AAI held
by such holder immediately prior to the effective time of the merger, and, upon
such surrender, shall be entitled to receive in exchange therefor a certificate
or certificates representing the number of whole shares of Class A Common
Stock, par value $.01 per share, of AIMCO deliverable in respect thereof,
together with cash, without interest, in lieu of any fractional shares of Class
A Common Stock, par value $.01 per share, of AIMCO and in respect of any
dividends withheld on Class A Common Stock, par value $.01 per share, of AIMCO
with record and payment dates after the effective time.

NINTH: The merger shall become effective upon acceptance for record by the
Maryland State Department of Assessments and Taxation.

-3-
<PAGE> 96
IN WITNESS WHEREOF, APARTMENT INVESTMENT AND MANAGEMENT COMPANY and
AMBASSADOR APARTMENTS, INC. have caused these presents to be signed in their
respective names and on their respective behalves by their respective
presidents or chairmen and witnessed by their respective secretaries on May 8,
1998.

WITNESS: APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
(a Maryland corporation)

/s/ JOEL F. BONDER By: /s/ PETER K. KOMPANIEZ
- --------------------------------- -------------------------------
Joel F. Bonder, Secretary Peter K. Kompaniez, President

WITNESS: AMBASSADOR APARTMENTS, INC.
(a Maryland corporation)

/s/ THOMAS J. COORSH By: /s/ DAVID M. GLICKMAN
- --------------------------------- -------------------------------
Thomas J. Coorsh, Secretary David M. Glickman, Chairman of the Board

-4-
<PAGE> 97
THE UNDERSIGNED, the President of APARTMENT INVESTMENT AND MANAGEMENT
COMPANY, who executed on behalf of the Corporation the foregoing Articles of
Merger of which this certificate is made a part, hereby acknowledges in the name
and on behalf of said Corporation the foregoing Articles of Merger to be the
corporate act of said Corporation and hereby certifies that to the best of his
knowledge, information and belief the matters and facts set forth therein with
respect to the authorization and approval thereof are true in all material
respects under the penalties of perjury.

/s/ PETER K. KOMPANIEZ
----------------------------------------
Peter K. Kompaniez, President

THE UNDERSIGNED, the Chairman of the Board of AMBASSADOR APARTMENTS, INC.,
who executed on behalf of the Corporation the foregoing Articles of Merger of
which this certificate is made a part, hereby acknowledges in the name and on
behalf of said Corporation the foregoing Articles of Merger to be the corporate
act of said Corporation and hereby certifies that to the best of his knowledge,
information and belief the matters and facts set forth therein with respect to
the authorization and approval thereof are true in all material respects under
the penalties of perjury.

/s/ DAVID M. GLICKMAN
----------------------------------------
David M. Glickman, Chairman of the Board

-5-
<PAGE> 98
APARTMENT INVESTMENT AND MANAGEMENT COMPANY

ARTICLES OF AMENDMENT

APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation,
having its principal office in Baltimore City, Maryland (which is hereinafter
called the "Corporation"), hereby certifies to the State Department of
Assessments and Taxation of Maryland that:

FIRST: Article IV, Section 1.1 of the Charter of the Corporation is hereby
amended in its entirety to read as follows:

1.1 CLASS AND NUMBER OF SHARES. The total number of shares of stock
that the Corporation from time to time shall have authority to issue is
510,750,000 shares of capital stock having a par value of $.01 per share
amounting to an aggregate par value of $5,107,500, consisting of 502,377,500
shares currently classified as Class A Common Stock, par value $.01 per share
(the "Class A Common Stock"), 262,500 shares currently classified as Class B
Common Stock, par value $.01 per share (the "Class B Common Stock") (the Class A
Common Stock and Class B Common Stock being referred to collectively herein as
"Common Stock"), 750,000 shares currently classified as Class B Cumulative
Convertible Preferred Stock, par value $.01 per share (the "Class B Preferred
Stock"), 2,760,000 shares currently classified as Class C Cumulative Preferred
Stock, par value $.01 per share (the "Class C Preferred Stock"), and 4,600,000
shares currently classified as Class D Cumulative Preferred Stock, par value
$.01 per share (the "Class D Preferred Stock")(the Class B Preferred Stock, the
Class C Preferred Stock, the Class D Preferred Stock, and all other classes or
series of preferred stock hereafter classified being referred to collectively
herein as the "Preferred Stock").

SECOND: (a) As of immediately before the amendment the total number of
shares of stock of all classes which the Corporation has authority to issue is
160,262,500(1) shares of capital stock, which are currently classified as
follows:

150,000,000 shares of Class A Common Stock, par value $.01 per share;

262.500 shares of Class B Common Stock, par value $.01 per share;(2)

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

(1) The number of shares of authorized capital stock has been reduced since the
last amendment of the Charter of the Corporation from 160,750,000 shares to
160,262,500 shares through the cancellation of 487,500 shares of Class B
Common Stock, par value $.01 per share, that were converted into shares of
Class A Common Stock, par value $.01 per share.

-1-

<PAGE> 99
1,890,000 shares of Preferred Stock, par value $.01 per share;

750,000 shares of Class B Cumulative Convertible Preferred Stock, par value
$.01 per share;

2,760,000 shares of Class C Cumulative Preferred Stock, par value $.01 per
share; and

4,600,000 shares of Class D Cumulative Preferred Stock, par value $.01 per
share.

(b) As amended the total number of shares of stock of all classes which
the Corporation has authority to issue is 510,750,000 shares of capital stock,
which, as amended, are currently classified as follows:

502,377,500 shares of Class A Common Stock, par value $.01 per share;

262,500 shares of Class B Common Stock, par value $.01 per share;

750,000 shares of Class B Cumulative Convertible Preferred Stock, par
value $.01 per share;

2,760,000 shares of Class C Cumulative Preferred Stock, par value $.01 per
share; and

4,600,000 shares of Class D Cumulative Preferred Stock, par value $.01 per
share.

(c) The aggregate par value of all shares having a par value is
$1,602,625(3) before the amendment and $5,107,500 as amended.

(d) The shares of stock of the Corporation are divided into classes, but
the descriptions of each class of capital stock of the Corporation are not
changed by the amendment.

THIRD: The foregoing amendment to the Charter of the Corporation has been
advised by the Board of Directors and approved by the stockholders of the
Corporation.

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

(2) The number of shares of Class B Common Stock, par value $.01 per share, has
been reduced since the last amendment of the Charter of the Corporation from
750,000 shares to 262,500 shares through the cancellation of 487,500 shares of
Class B Common Stock, par value $.01 per share, that were converted into shares
of Class A Common Stock, par value $.01 per share.

(3) The aggregate par value of shares having a par value before the amendment
has been reduced since the last amendment of the Charter of the Corporation
from $1,607,500 to $1,602,625 through the cancellation of 487,500 shares of
Class B Common Stock, par value $.01 per share, that were converted into shares
of Class A Common Stock, par value $.01 per share.

-2-
<PAGE> 100
IN WITNESS WHEREOF, APARTMENT INVESTMENT AND MANAGEMENT COMPANY has caused
these presents to be signed in its name and on its behalf by its Chairman of
the Board and witnessed by its Secretary on June 16, 1998.

WITNESS: APARTMENT INVESTMENT AND
MANAGEMENT COMPANY

/s/ JOEL F. BONDER By:/s/ TERRY CONSIDINE
- ----------------------- ---------------------
Joel F. Bonder Terry Considine
Secretary Chairman of the Board

THE UNDERSIGNED, Chairman of the Board of APARTMENT INVESTMENT AND
MANAGEMENT COMPANY, who executed on behalf of the Corporation the foregoing
Articles of Amendment of which this certificate is made a part, hereby
acknowledges in the name and on behalf of said Corporation the foregoing
Articles of Amendment to be the corporate act of said Corporation and hereby
certifies that to the best of his knowledge, information, and belief the
matters and facts set forth therein with respect to the authorization and
approval thereof are true in all material respects under the penalties of
perjury.

/s/ TERRY CONSIDINE
---------------------
Terry Considine
Chairman of the Board

-3-
<PAGE> 101
ARTICLES SUPPLEMENTARY

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

CLASS G CUMULATIVE PREFERRED STOCK
(PAR VALUE $.01 PER SHARE)

APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation
(hereinafter called the "Corporation"), having its principal office in
Baltimore City, Maryland, hereby certifies to the Department of Assessments and
Taxation of the State of Maryland that:

FIRST: Pursuant to authority expressly vested in the Board of Directors
of the Corporation by Section 1.2 of Article IV of the Charter of the
Corporation, as amended to date (the "Charter"), the Board of Directors has
duly divided and classified 4,050,000 authorized but unissued shares of Class A
Common Stock of the Corporation, par value $.01 per share (the "Class A Common
Stock"), into a class designated as Class G Cumulative Preferred Stock, par
value $.01 per share, and has provided for the issuance of such class.

SECOND: The reclassification increases the number of shares classified as
Class G Cumulative Preferred Stock, par value $.01 per share, from no shares
immediately prior to the reclassification to 4,050,000 shares immediately after
the reclassification. The reclassification decreases the number of shares
classified as Class A Common Stock from 502,377,500 shares immediately prior to
the reclassification to 498,327,500 shares immediately after the
reclassification.

THIRD: The terms of the Class G Cumulative Preferred Stock (including the
preferences, conversions or other rights, voting powers, restrictions,
limitations as to dividends and other distributions, qualifications, or terms
or conditions of redemption) as set by the Board of Directors are as follows:

1. NUMBER OF SHARES AND DESIGNATION.

This class of Preferred Stock shall be designated as Class G Cumulative
Preferred Stock, par value $.01 per share (the "Class G Preferred Stock") and
Four Million Fifty Thousand (4,050,000) shall be the authorized number of
shares of such Class G Preferred Stock constituting such class.
<PAGE> 102
2. DEFINITIONS.

For purposes of the Class G Preferred Stock, the following terms shall
have the meanings indicated:

"Act" shall mean the Securities Act of 1933, as amended.

"affiliate" of a Person means a Person that directly, or indirectly through
one or more intermediaries, controls or is controlled by, or is under
common control with, the Person specified.

"Aggregate Value" shall mean, with respect to any block of Equity Stock,
the sum of the products of (i) the number of shares of each class of Equity
Stock within such block multiplied by (ii) the corresponding Market Price
of one share of Equity Stock of such class.

"Beneficial Ownership" shall mean, with respect to any Person, ownership of
shares of Equity Stock equal to the sum of (i) the number of shares of
Equity Stock directly owned by such Person, (ii) the number of shares of
Equity Stock indirectly owned by such Person (if such Person is an
"individual" as defined in Section 542(a)(2) of the Code) taking into
account the constructive ownership rules of Section 544 of the Code, as
modified by Section 856(h)(1)(B) of the Code, and (iii) the number of
shares of Equity Stock that such Person is deemed to beneficially own
pursuant to Rule 13d-3 under the Exchange Act or that is attributed to such
Person pursuant to Section 318 of the Code, as modified by Section
856(d)(5) of the Code, provided that when applying this definition of
Beneficial Ownership to the Initial Holder, clause (iii) of this
definition, and clause (ii) of the definition of "Person" shall be
disregarded. The terms "Beneficial Owner,""Beneficially Owns" and
"Beneficially Owned" shall have the correlative meanings.

"Business Day" shall mean any day other than a Saturday, Sunday or a day on
which state or federally chartered banking institutions in New York, New
York are not required to be open.

"Charitable Beneficiary" shall mean one or more beneficiaries of the Trust
as determined pursuant to Section 10.3 of this Article, each of which shall
be an organization described in Section 170(b)(1)(A), 170(c)(2) and
501(c)(3) of the Code.

2
<PAGE> 103
"Class G Preferred Stock" shall have the meaning set forth in Section 1 of this
Article.

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

"Common Stock" shall mean the Class A Common Stock, $.01 par value per share,
of the Corporation or such shares of the Corporation's capital stock into which
outstanding shares of Common Stock shall be reclassified.

"Dividend Payment Date" shall mean January 15, April 15, July 15 and October 15
of each year; provided, further, that if any Dividend Payment Date falls on any
day other than a Business Day, the dividend payment payable on such Dividend
Payment Date shall be paid on the Business Day immediately following such
Dividend Payment Date and no interest shall accrue on such dividend from such
date to such Dividend Payment Date.

"Dividend Periods" shall mean the Initial Dividend Period and each subsequent
quarterly dividend period commencing on and including January 15, April 15,
July 15 and October 15 of each year and ending on and including the day
preceding the first day of the next succeeding Dividend Period, other than the
Dividend Period during which any Class G Preferred Stock shall be redeemed
pursuant to Section 5 hereof, which shall end on and include the Redemption
Date with respect to the Class G Preferred Stock being redeemed.

"Equity Stock" shall mean one or more shares of any class of capital stock of
the Corporation.

"Excess Transfer" has the meaning set forth in Section 10.3(A) of this Article.

"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.

"Issue Date" shall mean July 15, 1998.

"Initial Dividend Period" shall mean the period commencing on and including the
Issue Date and ending on and including October 15, 1998.

"Initial Holder" shall mean Terry Considine.

"Initial Holder Limit" shall mean a number of the Outstanding shares of Class G
Preferred Stock of the Corporation having an Aggregate Value not in excess of
the excess of (x) 15% of the Aggregate Value of all Outstanding shares of

3
<PAGE> 104
Equity Stock over (y) the Aggregate Value of all shares of Equity Stock other
than Class G Preferred Stock that are Beneficially Owned by the Initial
Holder. From the Issue Date, the secretary of the Corporation, or such other
person as shall be designated by the Board of Directors, shall upon request
make available to the representative(s) of the Initial Holder and the Board of
Directors, a schedule that sets forth the then-current Initial Holder Limit
applicable to the Initial Holder.

"Junior Stock" shall mean the Common Stock and any other class or series of
capital stock of the Corporation over which the shares of Class G Preferred
Stock have preference or priority in the payment of dividends or in the
distribution of assets on any liquidation, dissolution or winding up of the
Corporation.

"Look-Through Entity" shall mean a Person that is either (i) described in
Section 401(a) of the Code as provided under Section 856(h)(3) of the Code or
(ii) registered under the Investment Company Act of 1940.

"Look-Through Ownership Limit" shall mean, for any Look-Through Entity, a
number of the Outstanding shares of Class G Preferred Stock of the Corporation
having an Aggregate Value not in excess of the excess of (x) 15% of the
Aggregate Value of all Outstanding shares of Equity Stock over (y) by the
Aggregate Value of all shares of Equity Stock other than Class G Preferred
Stock that are Beneficially Owned by the Look-Through Entity.

"Market Price" on any date shall mean, with respect to any share of Equity
Stock, the Closing Price of share of that class of Equity Stock on the Trading
Day immediately preceding such date. The term "Closing Price" on any date
shall mean that last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading on
the NYSE or, if the Equity Stock is not listed or admitted to trading on the
NYSE, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Equity Stock is listed or admitted to trading or, if the Equity
Stock is not listed or admitted to trading on any national securities exchange,
the last quoted price, or if not so quoted, the average of the high bid and
low asked prices in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotation System or, if such
system is no longer in use, the principal other automated quotations system
that may then be in use or, if the Equity Stock is not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Equity Stock selected by the
Board of Directors of the Company. The term "Trading Day" shall mean a day on
which the principal national securities exchange on which

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the Equity Stock is listed or admitted to trading is open for the
transaction of business or, if the Equity Stock is not listed or admitted to
trading on any national securities exchange, shall mean any day other than a
Saturday, a Sunday or a day on which banking institutions in the State of New
York are authorized or obligated by law or executive order to close.

"NYSE" shall mean the New York Stock Exchange, Inc.

"Outstanding" shall mean issued and outstanding shares of Equity Stock of the
Corporation, provided that for purposes of the application of the Ownership
Limit, the Look-Through Ownership Limit or the Initial Holder Limit to any
Person, the term "Outstanding" shall be deemed to include the number of shares
of Equity Stock that such Person alone, at that time, could acquire pursuant to
any options or convertible securities.

"Ownership Limit" shall mean, for any Person other than the Initial Holder or a
Look-Through Entity, a number of the Outstanding shares of Class G Preferred
Stock of the Corporation having an Aggregate Value not in excess of the excess
of (x) 8.7% of the Aggregate Value of all Outstanding shares of Equity Stock
over (y) the Aggregate Value of all shares of Equity Stock other than Class G
Preferred Stock that are Beneficially Owned by the Person.

"Ownership Restrictions" shall mean collectively the Ownership Limit as applied
to Persons other than the Initial Holder or Look-Through Entities, the Initial
Holder Limit as applied to the Initial Holder and the Look-Through Ownership
Limit as applied to Look-Through Entities.

"Parity Stock" shall have the meaning set forth in paragraph (b) of Section 7
of this Article. The Class B Preferred Stock, the Class C Preferred Stock and
the Class D Preferred Stock shall each be a Parity Stock.

"Person" shall mean (a) for purposes of Section 10 of this Article, (i) an
individual, corporation, partnership, estate, trust (including a trust
qualifying under Section 401(a) or 501(c) of the Code), association, private
foundation within the meaning of Section 509(a) of the Code, joint stock
company or other entity, and (ii) also includes a group as that term is used
for purposes of Section 13(d)(3) of the Exchange Act and (b) for purposes of the
remaining Sections of this Article, any individual, firm, partnership,
corporation or other entity and shall include any successor (by merger or
otherwise) of such entity.

"Prohibited Transferee" has the meaning set forth in Section 10.3(A) of this
Article.

"Redemption Date" shall have the meaning set forth in paragraph (b) of Section
5 of this Article.

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"REIT" shall mean a "real estate investment trust" as defined in Section 856 of
the Code.

"Senior Stock" shall have the meaning set forth in paragraph (a) of Section 7
of this Article.

"set apart for payment" shall be deemed to include, without any action other
than the following, the recording by the Corporation in its accounting ledgers
of any accounting or bookkeeping entry which indicates, pursuant to a
declaration of dividends or other distribution by the Board of Directors, the
allocation of funds to be so paid on any series or class of capital stock of
the Corporation; provided, however, that if any funds for any class or series
of Junior Stock or any class or series of Parity Stock are placed in a separate
account of the Corporation or delivered to a disbursing, paying or other
similar agent, then "set apart for payment" with respect to the Class G
Preferred Stock shall mean placing such funds in a separate account or
delivering such funds to a disbursing, paying or other similar agent.

"Trading Day", as to any securities, shall mean any day on which such
securities are traded on the principal national securities exchange on which
such securities are listed or admitted or, if such securities are not listed or
admitted for trading on any national securities exchange, the NASDAQ National
Market or, if such securities are not listed or admitted for trading on the
NASDAQ National Market, in the securities market in which such securities are
traded.

"Transfer" shall mean any sale, transfer, gift, assignment, devise or other
disposition of a share of Class G Preferred Stock (including (i) the granting of
an option or any series of such options or entering into any agreement for the
sale, transfer or other disposition of Class G Preferred Stock or (ii) the
sale, transfer, assignment or other disposition of any securities or rights
convertible into or exchangeable for Class G Preferred Stock), whether
voluntary or involuntary, whether of record or Beneficial Ownership, and
whether by operation of law or otherwise (including, but not limited to, any
transfer of an interest in other entities that results in a change in the
Beneficial Ownership of shares of Class G Preferred Stock). The term
"Transfers" and "Transferred" shall have correlative meanings.

"Transfer Agent" means such transfer agent as may be designated by the Board of
Directors or their designee as the transfer agent for the Class G Preferred
Stock; provided, that if the Corporation has not designated a transfer agent
then the Corporation shall act as the transfer agent for the Class G Preferred
Stock.

"Trust" shall mean the trust created pursuant to Section 10.3 of this Article.

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"Trustee" shall mean the Person unaffiliated with either the Corporation or
the Prohibited Transferee that is appointed by the Corporation to serve as
trustee of the Trust.

"Voting Preferred Stock" shall have the meaning set forth in Section 8 of
this Article.

3. DIVIDENDS.

(a) The holders of Class G Preferred Stock shall be entitled to
receive, when and as declared by the Board of Directors out of funds legally
available for that purpose, cumulative dividends payable in cash in an amount
per share of Class G Preferred Stock equal to $2.34375 per annum. Such
dividends shall be cumulative from the Issue Date, whether or not in any
Dividend Period or Periods such dividends shall be declared or there shall be
funds of the Corporation legally available for the payment of such dividends,
and shall be payable quarterly in arrears on each Dividend Payment Date,
commencing on October 15, 1998. Each such dividend shall be payable in arrears
to the holders of record of the Class G Preferred Stock, as they appear on the
stock records of the Corporation at the close of business on the January 1,
April 1, July 1 or October 1, as the case may be, immediately preceding such
Dividend Payment Date. Accumulated, accrued and unpaid dividends for any past
Dividend Periods may be declared and paid at any time, without reference to any
regular Dividend Payment Date, to holders of record on such date, which date
shall not precede by more than 45 days the payment date thereof, as may be fixed
by the Board of Directors.

(b) Any dividend payable on the Class G Preferred Stock for any
partial dividend period shall be computed ratably on the basis of twelve 30-day
months and a 360-day year. Holders of Class G Preferred Stock shall not be
entitled to any dividends, whether payable in cash, property or stock, in excess
of cumulative dividends, as herein provided, on the Class G Preferred Stock. No
interest, or sum of money in lieu of interest, shall be payable in respect of
any dividend payment or payments on the Class G Preferred Stock that may be in
arrears.

(c) So long as any of the shares of Class G Preferred Stock are
outstanding, except as described in the immediately following sentence, no
dividends shall be declared or paid or set apart for payment by the Corporation
and no other distribution of cash or other property shall be declared or made
directly or indirectly by the Corporation with respect to any class or series of
Parity Stock for any period unless dividends equal to the full amount of
accumulated, accrued and unpaid dividends have been or contemporaneously are
declared and paid or declared and a sum sufficient for the payment thereof has
been or contemporaneously is set apart for such payment on the Class G Preferred
Stock for all Dividend Periods terminating on or prior to the Dividend Payment
Date with respect to such class or series of Parity Stock. When dividends are
not paid in full or a sum sufficient for such payment is not set apart, as
aforesaid, all dividends declared upon the Class G Preferred Stock and all
dividends declared upon any

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other class or series of Parity Stock shall be declared ratably in proportion
to the respective amounts of dividends accumulated, accrued and unpaid on the
Class G Preferred Stock and accumulated, accrued and unpaid on such Parity
Stock.

(d) So long as any of the shares of Class G Preferred Stock are
outstanding, no dividends (other than dividends or distributions paid in shares
of, or options, warrants or rights to subscribe for or purchase shares of,
Junior Stock) shall be declared or paid or set apart for payment by the
Corporation and no other distribution of cash or other property shall be
declared or made, directly or indirectly, by the Corporation with respect to
any shares of Junior Stock, nor shall any shares of Junior Stock be redeemed,
purchased or otherwise acquired (other than a redemption, purchase or other
acquisition of Common Stock made for purposes of an employee incentive or
benefit plan of the Corporation or any subsidiary) for any consideration (or
any moneys be paid to or made available for a sinking fund for the redemption
of any shares of any such stock), directly or indirectly, by the Corporation
(except by conversion into or exchange for shares of, or options, warrants or
rights to subscribe for or purchase shares of, Junior Stock), nor shall any
other cash or other property otherwise be paid or distributed to or for the
benefit of any holder of shares of Junior Stock in respect thereof, directly or
indirectly, by the Corporation unless in each case the full cumulative
dividends (including all accumulated, accrued and unpaid dividends) on all
outstanding shares of Class G Preferred Stock shall have been paid or such
dividends have been declared and set apart for payment for all past Dividend
Periods with respect to the Class G Preferred Stock.

4. LIQUIDATION PREFERENCE.

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Corporation. If, upon any liquidation, dissolution or winding up of the
Corporation, the assets of the Corporation, or proceeds thereof, distributable
among the holders of Class G Preferred Stock shall be insufficient to pay in
full the preferential amount aforesaid and liquidating payments on any other
shares of any class or series of Parity Stock, then such assets, or the
proceeds thereof, shall be distributed among the holders of Class G Preferred
Stock and any such other Parity Stock ratably in the same proportion as the
respective amounts that would be payable on such Class G Preferred Stock and
any such other Parity Stock if all amounts payable thereon were paid in full.
For the purposes of this Section 4, (i) a consolidation or merger of the
Corporation with one or more corporations, (ii) a sale or transfer of all or
substantially all of the Corporation's assets, or (iii) a statutory share
exchange shall not be deemed to be a liquidation, dissolution or winding up,
voluntary or involuntary, of the Corporation.

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

5. REDEMPTION AT THE OPTION OF THE CORPORATION.

(a) Shares of Class G Preferred Stock shall not be redeemable by the
Corporation prior to July 15, 2008, except as set forth in Section 10.2 of this
Article. On and after July 15, 2008, the Corporation, at its option, may redeem
shares of Class G Preferred Stock, in whole or from time to time in part, at a
redemption price payable in cash equal to 100% of the Liquidation Preference
thereof, plus all accrued and unpaid dividends to the date fixed for redemption
(the "Redemption Date"). In connection with any redemption pursuant to this
Section 5(a), the redemption price of the Class G Preferred Stock (other than
any portion thereof consisting of accrued and unpaid dividends) shall be payable
solely with the proceeds from the sale by the Corporation or AIMCO Properties,
L.P., a Delaware limited Partnership (the "Operating Partnership"), of other
capital shares of the Corporation or the Operating Partnership (whether or not
such sale occurs concurrently with such redemption). For purposes of the
preceding sentence, "capital shares" means any common stock, preferred stock,
depositary shares, partnership or other interests, participations or other
ownership interests (however designated) and any rights (other than debt
securities convertible into or exchangeable at the option of the holder for
equity securities (unless and to the extent such debt securities are
subsequently converted into capital shares)) or options to purchase any of the
foregoing of or in the Corporation or the Operating Partnership.

(b) The Redemption Date shall be selected by the Corporation, shall
be specified in the notice of redemption and shall be not less than 30 days nor
more than 60 days after the date notice of redemption is sent by the
Corporation.

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(c) If full cumulative dividends on all outstanding shares of Class G
Preferred Stock have not been paid or declared and set apart for payment, no
shares of Class G Preferred Stock may be redeemed unless all outstanding shares
of Class G Preferred Stock are simultaneously redeemed and neither the
Corporation nor any affiliate of the Corporation may purchase or acquire shares
of Class G Preferred Stock, otherwise than pursuant to a purchase or exchange
offer made on the same terms to all holders of shares of Class G Preferred
Stock.

(d) If the Corporation shall redeem shares of Class G Preferred Stock
pursuant to paragraph (a) of this Section 5, notice of such redemption shall be
given to each holder of record of the shares to be redeemed. Such notice shall
be provided by first class mail, postage prepaid, at such holder's address as
the same appears on the stock records of the Corporation. Neither the failure
to mail any notice required by this paragraph (d), nor any defect therein or in
the mailing thereof to any particular holder, shall affect the sufficiency of
the notice of the validity of the proceedings for redemption with respect to
the other holders. Any notice which was mailed in the manner herein provided
shall be conclusively presumed to have been duly given on the date mailed
whether or not the holder receives the notice. Each such notice shall state,
as appropriate: (1) the Redemption Date; (2) the number of shares of Class G
Preferred Stock to be redeemed and, if fewer than all such shares held by such
holder are to be redeemed, the number of such shares to be redeemed from such
holder; and (3) the place or places at which certificates for such shares are
to be surrendered for cash. Notice having been mailed as aforesaid, from and
after the Redemption Date (unless the Corporation shall fail to make available
the amount of cash necessary to effect such redemption), (i) except as
otherwise provided herein, dividends on the shares of Class G Preferred Stock
so called for redemption shall cease to accumulate or accrue on the shares of
Class G Preferred Stock called for redemption(except that, in the case of a
Redemption Date after a dividend record date and prior to the related Dividend
Payment Date, holders of Class G Preferred Stock on the dividend record date
will be entitled to such Dividend Payment Date to receive the dividend payable
on such shares), (ii) said shares shall no longer be deemed to be outstanding,
and (iii) all rights of the holders thereof as holders of Class G Preferred
Stock of the Corporation shall cease (except the rights to receive the cash
payable upon such redemption, without interest thereon, upon surrender and
endorsement of their certificates if so required and to receive any dividends
payable thereon). The Corporation's obligation to make available the redemption
price in accordance with the preceding sentence shall be deemed fulfilled if, on
or before the Call Date, the Corporation shall deposit with a bank or trust
company (which may be an affiliate of the Corporation) that has, or is an
affiliate of a bank or trust company that has, a capital and surplus of at least
$50,000,000, such amount of cash as is necessary for such redemption, in trust,
with irrevocable instructions that such cash be applied to the redemption of the
shares of Class G Preferred Stock so called for redemption. No interest shall
accrue for the benefit of the holders of shares of Class G Preferred Stock to
be redeemed on any cash so set aside by the Corporation. Subject to applicable
escheat laws, any such cash unclaimed at the end of two years from the
Redemption Date shall revert to the general funds of the Corporation, after
which reversion the holders of shares of Class G Preferred

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<PAGE> 111
Stock so called for redemption shall look only to the general funds of the
Corporation for the payment of such cash.

As promptly as practicable after the surrender in accordance with such
notice of the certificates for any such shares of Class G Preferred Stock to be
so redeemed (properly endorsed or assigned for transfer, if the Corporation
shall so require and the notice shall so state), such certificates shall be
exchanged for cash (without interest thereon) for which such shares have been
redeemed in accordance with such notice. If fewer than all the outstanding
shares of Class G Preferred Stock are to be redeemed, shares to be redeemed
shall be selected by the Corporation from outstanding shares of Class G
Preferred Stock not previously called for redemption by lot or, with respect to
the number of shares of Class G Preferred Stock held of record by each holder of
such shares, pro rata (as nearly as may be) or by any other method as may be
determined by the Board of Directors in its discretion to be equitable. If
fewer than all the shares of Class G Preferred Stock represented by any
certificate are redeemed, then a new certificate representing the unredeemed
shares shall be issued without cost to the holders thereof.

6. Status of Reacquired Stock.

All shares of Class G Preferred Stock which shall have been issued and
reacquired in any manner by the Corporation shall be returned to the status of
authorized, but unissued shares of Class G Preferred Stock.

7. Ranking.

Any class or series of capital stock of the Corporation shall be deemed to
rank:

(a) prior or senior to the Class G Preferred Stock, as to the payment
of dividends and as to distribution of assets upon liquidation, dissolution or
winding up, if the holders of such class or series shall be entitled to the
receipt of dividends or of amounts distributable upon liquidation, dissolution
or winding up, as the case may be, in preference or priority to the holders of
Class G Preferred Stock ("Senior Stock");

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

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(c) junior to the Class G Preferred Stock, as to the payment of
dividends or as to the distribution of assets upon liquidation, dissolution or
winding up, if such stock or series shall be Common Stock or if the holders of
Class G Preferred Stock shall be entitled to receipt of dividends or of amounts
distributable upon liquidation, dissolution or winding up, as the case may be,
in preference or priority to the holders of shares of such class or series
("Junior Stock").

8. VOTING.

(a) If and whenever six quarterly dividends (whether or not
consecutive) payable on the Class G Preferred Stock or any series or class of
Parity Stock shall be in arrears (which shall, with respect to any such
quarterly dividend, mean that any such dividend has not been paid in full),
whether or not earned or declared, the number of directors then constituting the
Board of Directors shall be increased by two (if not already increased by reason
of similar types of provisions with respect to shares of Parity Stock of any
other class or series which is entitled to similar voting rights (the "Voting
Preferred Stock")) and the holders of shares of Class G Preferred Stock,
together with the holders of shares of all other Voting Preferred Stock then
entitled to exercise similar voting rights, voting as a single class regardless
of series, shall be entitled to elect the two additional directors to serve on
the Board of Directors at any annual meeting of stockholders or special meeting
held in place thereof, or at a special meeting of the holders of the Class G
Preferred Stock and the Voting Preferred Stock called as hereinafter
provided. Whenever all arrears in dividends on the Class G Preferred Stock and
the Voting Preferred Stock then outstanding shall have been paid and dividends
thereon for the current quarterly dividend period shall have been paid or
declared and set apart for payment, then the right of the holders of the Class G
Preferred Stock and the Voting Preferred Stock to elect such additional two
directors shall cease (but subject always to the same provision for the vesting
of such voting rights in the case of any similar future arrearages), and the
terms of office of all Persons elected as directors by the holders of the Class
G Preferred Stock and the Voting Preferred Stock shall forthwith terminate and
the number of directors constituting the Board of Directors shall be reduced
accordingly. At any time after such voting power shall have been so vested in
the holders of Class G Preferred Stock and the Voting Preferred Stock, if
applicable, the Secretary of the Corporation may, and upon the written request
of any holder of Class G Preferred Stock (addressed to the Secretary at the
principal office of the Corporation) shall, call a special meeting of the
holders of the Class G Preferred Stock and of the Voting Preferred Stock for the
election of the two directors to be elected by them as herein provided, such
call to be made by notice similar to that provided in the Bylaws of the
Corporation for a special meeting of the stockholders or as required by law. If
any such special meeting required to be called as above provided shall not be
called by the Secretary within 20 days after receipt of any such request, then
any holder of Class G Preferred Stock may call such meeting, upon the notice
above provided, and for that purpose shall have access to the stock books of the
Corporation. The directors elected at any such special meeting shall hold
office until the next annual meeting of the stockholders or special meeting held
in lieu thereof if such office shall not have

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previously terminated as above provided. If any vacancy shall occur among the
directors elected by the holders of the Class G Preferred Stock and the Voting
Preferred Stock, a successor shall be elected by the Board of Directors, upon
the nomination of the then-remaining director elected by the holders of the
Class G Preferred Stock and the Voting Preferred Stock or the successor of such
remaining director, to serve until the next annual meeting of the stockholders
or special meeting held in place thereof if such office shall not have
previously terminated as provided above.

(b) So long as any shares of Class G Preferred Stock are
outstanding, in addition to any other vote or consent of stockholders required
by law or by the Charter of the Corporation, the affirmative vote of at least
66-2/3% of the votes entitled to be cast by the holders of the Class G
Preferred Stock voting as a single class with the holders of all other classes
or series of Preferred Stock entitled to vote on such matters, given in Person
or by proxy, either in writing without a meeting or by vote at any meeting
called for the purpose, shall be necessary for effecting or validating:

(i) Any amendment, alteration or repeal of any of the
provisions of these Articles Supplementary, the Charter or the By-Laws of the
Corporation that materially adversely affects the voting powers, rights or
preferences of the holders of the Class G Preferred Stock; provided, however,
that the amendment of the provisions of the Charter so as to authorize or
create, or to increase the authorized amount of, or issue any Junior Stock or
any shares of any class of Parity Stock shall not be deemed to materially
adversely affect the voting powers, rights or preferences of the holders of
Class G Preferred Stock; or

(ii) The authorization, creation of, the increase in the
authorized amount of, or issuance of any shares of any class of Senior Stock or
any security convertible into shares of any class of Senior Stock (whether or
not such class of Senior Stock is currently authorized); provided, however, that
no such vote of the holders of Class G Preferred Stock shall be required if, at
or prior to the time when such amendment, alteration or repeal is to take
effect, or when the issuance of any such prior shares or convertible security
is to be made, as the case may be, provision is made for the redemption of all
shares of Class G Preferred Stock at the time outstanding to the extent such
redemption is authorized by Section 5 of this Article.

For purposes of the foregoing provisions and all other voting rights under
these Articles Supplementary, each share of Class G Preferred Stock shall have
one (1) vote per share, except that when any other class or series of preferred
stock shall have the right to vote with the Class G Preferred Stock as a single
class on any matter, then the Class G Preferred Stock and such other class or
series shall have with respect to such matters one quarter of one(.25) vote per
$25 of stated liquidation preference. Except as otherwise required by
applicable law or as set forth herein, the Class G Preferred Stock shall not
have any relative, participating, optional or other special voting rights and
powers other than as set forth herein, and the consent of the holders thereof
shall not be required for the taking of any corporate action.

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9. RECORD HOLDERS.

The Corporation and the Transfer Agent may deem and treat the record holder
of any share of Class G Preferred Stock as the true and lawful owner thereof for
all purposes, and neither the Corporation nor the Transfer Agent shall be
affected by any notice to the contrary.

10.1 RESTRICTIONS ON OWNERSHIP AND TRANSFERS.

(A) LIMITATION ON BENEFICIAL OWNERSHIP. Except as provided in
Section 10.8, from and after the Issue Date, no Person (other than the Initial
Holder or a Look-Through Entity) shall Beneficially Own shares of Class G
Preferred Stock in excess of the Ownership Limit, the Initial Holder shall not
Beneficially Own shares of Class G Preferred Stock in excess of the Initial
Holder Limit and no Look-Through Entity shall Beneficially Own shares of Class G
Preferred Stock in excess of the Look-Through Ownership Limit.

(B) TRANSFERS IN EXCESS OF OWNERSHIP LIMIT. Except as provided in
Section 10.8, from and after the Issue Date (and subject to Section 10.12), any
Transfer (whether or not such Transfer is the result of transactions entered
into through the facilities of the NYSE or other securities exchange or
automated inter-dealer quotation system) that, if effective, would result in
any Person (other than the Initial Holder or a Look-Through Entity) Beneficially
Owning shares of Class G Preferred Stock in excess of the Ownership Limit shall
be void ab initio as to the Transfer of such shares of Class G Preferred Stock
that would be otherwise Beneficially Owned by such Person in excess of the
Ownership Limit, and the intended transferee shall acquire no rights in such
shares of Class G Preferred Stock.

(C) TRANSFERS IN EXCESS OF INITIAL HOLDER LIMIT. Except as provided
in Section 10.8, from and after the Issue Date (and subject to Section 10.12),
any Transfer (whether or not such Transfer is the result of transactions entered
into through the facilities of the NYSE or other securities exchange or an
automated inter-dealer quotation system) that, if effective, would result in the
Initial Holder Beneficially Owning shares of Class G Preferred Stock in excess
of the Initial Holder Limit shall be void ab initio as to the Transfer of such
shares of Class G Preferred Stock that would be otherwise Beneficially Owned by
the Initial Holder in excess of the Initial Holder limit, and the Initial Holder
shall acquire no rights in such shares of Class G Preferred Stock.

(D) TRANSFERS IN EXCESS OF LOOK-THROUGH OWNERSHIP LIMIT. Except as
provided in Section 10.8 from and after the Issue Date (and subject to Section
10.12), any Transfer (whether or not such Transfer is the result of transactions
entered into through facilities of the NYSE or other securities exchange or an
automated inter-dealer quotation system) that, if effective, would result in any
Look-Through Entity Beneficially Owning shares of Class G Preferred Stock in
excess of the Look-Through Ownership limit shall be void ab initio as to the
Transfer of such shares of Class G

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Preferred Stock that would be otherwise Beneficially Owned by such Look-Through
Entity in excess of the Look-Through Ownership Limit and such Look-Through
Entity shall acquire no rights in such shares of Class G Preferred Stock.

(E) TRANSFERS RESULTING IN "CLOSELY HELD" STATUS. From and after the Issue
Date any Transfer that, if effective would result in the Corporation being
"closely held" within the meaning of Section 856(h) of the Code, or would
otherwise result in the Corporation failing to qualify as a REIT (including
without limitation, a Transfer or other event that would result in the
Corporation owning (directly or constructively) an interest in a tenant that is
described in Section 856(d)(2)(B) of the Code if the income derived by the
Corporation from such tenant would cause the Corporation to fail to satisfy any
of the gross income requirements of Section 856(c) of the Code) shall be void ab
initio as to the Transfer of shares of Class G Preferred Stock that would cause
the Corporation (i) to be "closely held" within the meaning of Section 856(h) of
the Code or (ii) otherwise fail to qualify as a REIT, as the case may be, and
the intended transferee shall acquire no rights in such shares of Class G
Preferred Stock.

(F) SEVERABILITY ON VOID TRANSACTIONS. A Transfer of a share of Class G
Preferred Stock that is null and void under Sections 10.1(B), (C), (D), or (E)
of this Article because it would, if effective, result in (i) the ownership of
Class G Preferred Stock in excess of the Initial Holder Limit, the Ownership
Limit, or the Look-Through Ownership Limit, (ii) the Corporation being "closely
held" within the meaning of Section 856(h) of the Code or (iii) the Corporation
otherwise failing to qualify as a REIT, shall not adversely affect the validity
of the Transfer of any other share of Class G Preferred Stock in the same or
any other related transaction.

10.2 REMEDIES FOR BREACH. If the Board of Directors or a committee thereof
shall at any time determine in good faith that a Transfer or other event has
taken place in violation of Section 10.1 of this Article or that a Person
intends to acquire or has attempted to acquire Beneficial Ownership of any
shares of Class G Preferred Stock in violation of Section 10.1 of this Article
(whether or not such violation is intended), the Board of Directors or a
committee thereof shall be empowered to take any action as it deems advisable
to refuse to give effect to or to prevent such Transfer or other event,
including, but not limited to, refusing to give effect to such Transfer or
other event on the books of the Corporation, causing the Corporation to redeem
such shares at the then current Market Price and upon such terms and conditions
as may be specified by the Board of Directors in its sole discretion
(including, but not limited to, by means of the issuance of long-term
indebtedness for the purpose of such redemption), demanding the repayment of
any distributions received in respect of shares of Class G Preferred Stock
acquired in violation of Section 10.1 of this Article or instituting
proceedings to enjoin such Transfer or to rescind such Transfer or attempted
Transfer; provided, however, that any Transfers or attempted Transfers (or in
the case of events other than a Transfer, Beneficial Ownership) in violation of
Section 10.1 of this Article, regardless of any action (or non-action) by the
Board of Directors or such committee, (a) shall be void ab initio or (b) shall
automatically result in the transfer described in Section 10.3 of this

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Article; provided, further, that the provisions of this Section 10.2 shall be
subject to the provisions of Section 10.12 of this Article; provided, further,
that neither the Board of Directors nor any committee thereof may exercise such
authority in a manner that interferes with any ownership or transfer of Class G
Preferred Stock that is expressly authorized pursuant to Section 10.8(d) of
this Article.

10.3. TRANSFER IN TRUST.

(A) ESTABLISHMENT OF TRUST. If, notwithstanding the other provisions
contained in this Article, at any time after the Issue Date there is a purported
Transfer (an "Excess Transfer") (whether or not such Transfer is the result of
transactions entered into through the facilities of the NYSE or other securities
exchange or an automated interdealer quotation system) or other change in the
capital structure of the Corporation (including, but not limited to, any
redemption of Preferred Stock) or other event (including, but not limited to,
any acquisition of any share of Equity Stock) such that (a) any Person (other
than the Initial Holder or a Look-Through Entity) would Beneficially Own shares
of Class G Preferred Stock in excess of the Ownership Limit, or (b) the Initial
Holder would Beneficially Own shares of Class G Preferred Stock in excess of the
Initial Holder Limit, or (c) any Person that is a Look-Through Entity would
Beneficially Own shares of Class G Preferred Stock in excess of the Look-Through
Ownership Limit (in any such event, the Person, Initial Holder or Look-Through
Entity that would Beneficially Own shares of Class G Preferred Stock in excess
of the Ownership Limit, the Initial Holder Limit or the Look-Through Entity
Limit, respectively, is referred to as a "Prohibited Transferee"), then, except
as otherwise provided in Section 10.8 of this Article, such shares of Class G
Preferred Stock in excess of the Ownership Limit, the Initial Holder Limit or
the Look-Through Ownership Limit, as the case may be, (rounded up to the nearest
whole share) shall be automatically transferred to a Trustee in his capacity as
trustee of a Trust for the exclusive benefit of one or more Charitable
Beneficiaries. Such transfer to the Trustee shall be deemed to be effective as
of the close of business on the business day prior to the Excess Transfer,
change in capital structure or another event giving rise to a potential
violation of the Ownership Limit, the Initial Holder Limit or the Look-Through
Entity Ownership Limit.

(C) STATUS OF SHARES HELD BY THE TRUSTEE. Shares of Class G
Preferred Stock held by the Trustee shall be issued and outstanding shares of
capital stock of the Corporation. Except to the extent provided in Section
10.3(E), the Prohibited Transferee shall have no rights in the Class G
Preferred Stock held by the Trustee, and the Prohibited Transferee shall not
benefit economically from ownership of any shares held in trust by the Trustee,
shall have no rights to dividends and shall not possess any rights to vote or
other rights attributable to the shares held in the Trust.

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(D) DIVIDEND AND VOTING RIGHTS. The Trustee shall have all voting rights
and rights to dividends with respect to shares of Class G Preferred Stock held
in the Trust, which rights shall be exercised for the benefit of the Charitable
Beneficiary. Any dividend or distribution paid prior to the discovery by the
Corporation that the shares of Class G Preferred Stock have been transferred to
the Trustee shall be repaid to the Corporation upon demand, and any dividend or
distribution declared but unpaid shall be rescinded as void ab initio with
respect to such shares of Class G Preferred Stock. Any dividends or
distributions so disgorged or rescinded shall be paid over to the Trustee and
held in trust for the Charitable Beneficiary. Any vote cast by a Prohibited
Transferee prior to the discovery by the Corporation that the shares of Class G
Preferred Stock have been transferred to the Trustee will be rescinded as void
ab initio and shall be recast in accordance with the desires of the Trustee
acting for the benefit of the Charitable Beneficiary. The owner of the shares at
the time of the Excess Transfer, change in capital structure or other event
giving rise to a potential violation of the Ownership Limit, Initial Holder
Limit or Look-Through Entity Ownership Limit shall be deemed to have given an
irrevocable proxy to the Trustee to vote the shares of Class G Preferred Stock
for the benefit of the Charitable Beneficiary.

(E) RESTRICTIONS ON TRANSFER. The Trustee of the Trust may sell the
shares held in the Trust to a person, designated by the Trustee, whose
ownership of the shares will not violate the Ownership Restrictions. If such a
sale is made, the interest of the Charitable Beneficiary shall terminate and
proceeds of the sale shall be payable to the Prohibited Transferee and to the
Charitable Beneficiary as provided in this Section 10.3(E). The Prohibited
Transferee shall receive the lesser of (1) the price paid by the Prohibited
Transferee for the shares or, if the Prohibited Transferee did not give value
for the shares (through a gift, devise or other transaction), the Market Price
of the shares on the day of the event causing the shares to be held in the
Trust and (2) the price per share received by the Trustee from the sale or
other disposition of the shares held in the Trust. Any proceeds in excess of
the amount payable to the Prohibited Transferee shall be payable to the
Charitable Beneficiary. If any of the transfer restrictions set forth in this
Section 10.3(E) or any application thereof is determined in a final judgement
to be void, invalid or unenforceable by any court having jurisdiction over the
issue, the Prohibited Transferee may be deemed, at the option of the
Corporation, to have acted as the agent of the Corporation in acquiring the
Class G Preferred Stock as to which such restrictions would, by their terms,
apply, and to hold such Class G Preferred Stock on behalf of the Corporation.

(F) PURCHASE RIGHT IN STOCK TRANSFERRED TO THE TRUSTEE. Shares of
Class G Preferred Stock transferred to the Trustee shall be deemed to have been
offered for sale to the Corporation, or its designee, at a price per share
equal to the lesser of (i) the price per share in the transaction that resulted
in such transfer to the Trust (or, in the case of a devise or gift, the Market
Price at the time of such devise or gift) and (ii) the Market Price on the date
the Corporation, or its designee, accepts such offer. The Corporation shall
have the right to accept such offer for a period of 90 days after the later of
(i) the date of the Excess Transfer or other event resulting in a transfer to
the Trust and

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(ii) the date that the Board of Directors determines in good faith that an
Excess Transfer or other event occurred.

(G) DESIGNATION OF CHARITABLE BENEFICIARIES. By written notice
to the Trustee, the Corporation shall designate one or more nonprofit
organizations to be the Charitable Beneficiary of the interest in the Trust
relating to such Prohibited Transferee if (i) the shares of Class G Preferred
Stock held in the Trust would not violate the Ownership Restrictions in the
hands of such Charitable Beneficiary and (ii) each Charitable Beneficiary is an
organization described in Sections 170(b)(1)(A), 170(c)(2) and 501(c)(3) of the
Code.

10.4 NOTICE OF RESTRICTED TRANSFER. Any Person that acquires or
attempts to acquire shares of Class G Preferred Stock in violation of Section
10.1 of this Article, or any Person that is a Prohibited Transferee such that
stock is transferred to the Trustee under Section 10.3 of this Article, shall
immediately give written notice to the Corporation of such event and shall
provide to the Corporation such other information as the Corporation may
request in order to determine the effect, if any, of such Transfer or attempted
Transfer or other event on the Corporations's status as a REIT. Failure to
give such notice shall not limit the rights and remedies of the Board of
Directors provided herein in any way.

10.5 OWNERS REQUIRED TO PROVIDE INFORMATION. From and after the Issue
Date certain record and Beneficial Owners and transferees of shares of Class G
Preferred Stock will be required to provide certain information as set out
below.

(A) ANNUAL DISCLOSURE. Every record and Beneficial Owner of
more than 5% (or such other percentage between 0.5% and 5%, as provided in the
applicable regulations adopted under the Code) of the number of Outstanding
shares of Class G Preferred Stock shall, within 30 days after January 1 of each
year, give written notice to the Corporation stating the name and address of
such record or Beneficial Owner, the number of shares of Class G Preferred
Stock Beneficially Owned, and a full description of how such shared are held.
Each such record or Beneficial Owner of Class G Preferred Stock shall, upon
demand by the Corporation, disclose to the Corporation in writing such
additional information with respect to the Beneficial Ownership of the Class G
Preferred Stock as the Board of Directors, in its sole discretion, deems
appropriate or necessary to (i) comply with the provisions of the Code
regarding the qualification of the Corporation as a REIT under the Code and
(ii) ensure compliance with the Ownership Limit, the Initial Holder Limit or
the Look-Through Ownership Limit, as applicable. Each stockholder of record,
including without limitation any Person that holds shares of Class G Preferred
Stock on behalf of a Beneficial Owner, shall take all reasonable steps to
obtain the written notice described in this Section 10.5 from the Beneficial
Owner.

(B) DISCLOSURE AT THE REQUEST OF THE CORPORATION. Any Person
that is a Beneficial Owner of shares of Class G Preferred Stock and any Person
(including the stockholder of record) that is holding shares of Class G
Preferred Stock for a Beneficial

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Owner, and any proposed transferee of shares, shall provide such information as
the Corporation, in its sole discretion, may request in order to determine the
Corporation's status as a REIT, to comply with the requirements of any taxing
authority or other governmental agency, to determine any such compliance or to
ensure compliance with the Ownership Limit, the Initial Holder Limit and the
Look-Through Ownership Limit, and shall provide a statement or affidavit to the
Corporation setting forth the number of shares of Class G Preferred Stock
already Beneficially Owned by such stockholder or proposed transferee and any
related persons specified, which statement or affidavit shall be in the form
prescribed by the Corporation for that purpose.

10.6 REMEDIES NOT LIMITED. Nothing contained in this Article shall
limit the authority of the Board of Directors to take such other action as it
deems necessary or advisable (subject to the provisions of Section 10.12 of
this Article) (i) to protect the Corporation and the interests of its
stockholders in the preservation of the Corporation's status as a REIT and (ii)
to insure compliance with the Ownership Limit, the Initial Holder Limit and the
Look-Through Ownership Limit.

10.7 AMBIGUITY. In the case of an ambiguity in the application of any
of the provisions of Section 10 of this Article, or in the case of an ambiguity
in any definition contained in Section 10 of this Article, the Board of
Directors shall have the power to determine the application of the provisions
of this Article with respect to any situation based on its reasonable belief,
understanding or knowledge of the circumstances.

10.8 EXPECTATIONS. The following exceptions shall apply or may be
established with respect to the limitations of Section 10.1 of this Article.

(A) WAIVER OF OWNERSHIP LIMIT. The Board of Directors, upon
receipt of a ruling from the Internal Revenue Service or an opinion of tax
counsel or other evidence or undertaking acceptable to it, may waive the
application, in whole or in part, of the Ownership Limit to a Person subject to
the Ownership Limit, if such person is not an individual for purposes of
Section 542(a) of the Code and is a corporation, partnership, estate or trust.
In connection with any such exemption, the Board of Directors may require such
representations and undertakings from such Person and may impose such other
conditions as the Board of Directors deems necessary, in its sole discretion,
to determine the effect, if any, of the proposed Transfer on the Corporation's
status as a REIT.

(B) PLEDGE BY INITIAL HOLDER. Notwithstanding any other
provision of this Article, the pledge by the Initial Holder of all or any
portion of the Class G Preferred Stock directly owned at any time or from time
to time shall not constitute a violation of Section 10.1 of this Article and the
pledgee shall not be subject to the Ownership Limit with respect to the Class G
Preferred Stock so pledged to it either as a result of the pledge or upon
foreclosure.

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(C) UNDERWRITERS. For a period of 270 days following the purchase
of Class G Preferred Stock by an underwriter that (i) is a corporation or a
partnership and (ii) participates in an offering of the Class G Preferred
Stock, such underwriter shall not be subject to the Ownership Limit with
respect to the Class G Preferred Stock purchased by it as a part of or in
connection with such offering and with respect to any Class G Preferred Stock
purchased in connection with market making activities.

10.9 LEGEND. Each certificate for Class G Preferred Stock shall bear the
following legend:

"The shares of Class G Cumulative Preferred Stock
represented by this certificate are subject to restrictions on transfer.
No person may Beneficially Own shares of Class G Cumulative Preferred
Stock in excess of the Ownership Restrictions, as applicable, with certain
further restrictions and exceptions set forth in the Charter (including
the Articles Supplementary setting forth the terms of the Class G
Cumulative Preferred Stock). Any Person that attempts to Beneficially
Own shares of Class G Cumulative Preferred Stock in excess of the
applicable limitation must immediately notify the Corporation. All
capitalized terms in this legend have the meanings ascribed to such terms
in the Charter (including the Articles Supplementary setting forth the
terms of the Class G Cumulative Preferred Stock), as the same may be
amended from time to time, a copy of which, including the restrictions on
transfer, will be sent without charge to each stockholder that so requests.
If the restrictions on transfer are violated (i) the transfer of the
shares of Class G Cumulative Preferred Stock represented hereby will be
void in accordance with the Charter (including the Articles Supplementary
setting forth the terms of the Class G Cumulative Preferred Stock) or (ii)
the shares of Class G Cumulative Preferred Stock represented hereby will
automatically be transferred to a Trustee of a Trust for the benefit of one
or more Charitable Beneficiaries."

10.10 SEVERABILITY. If any provision of this Article or any
application of any such provision is determined in a final and unappealable
judgment to be void, invalid or unenforceable by any Federal or state court
having jurisdiction over the issues, the validity and enforceability of the
remaining provisions shall not be affected and other applications of such
provision shall be affected only to the extent necessary to comply with the
determination of such court.

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10.12 SETTLEMENT. Nothing in this Section 10 of this Article shall
be interpreted to preclude the settlement of any transaction entered into
through the facilities of the NYSE or other securities exchange or an automated
inter-dealer quotation system.

FOURTH: The terms of the Class G Cumulative Preferred Stock set forth in
Article Third hereof shall become Article XVI of the Charter.

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IN WITNESS WHEREOF, the Corporation has caused these presents to be signed
in its name and on its behalf by its Senior Vice President and Chief Financial
Officer and witnessed by its Secretary on July 13, 1998.

WITNESS: APARTMENT INVESTMENT AND
MANAGEMENT COMPANY

/s/ JOEL BONDER /s/ TROY D. BUTTS
- ------------------------------ -----------------------------
Joel Bonder Troy D. Butts
Secretary Senior Vice President and
Chief Financial Officer

THE UNDERSIGNED, Senior Vice President and Chief Financial Officer of
APARTMENT INVESTMENT AND MANAGEMENT COMPANY, who executed on behalf of the
Corporation the Articles Supplementary of which this Certificate is made a
part, hereby acknowledges in the name and on behalf of said Corporation the
foregoing Articles Supplementary to be the corporate act of said Corporation
and hereby certifies that the matters and facts set forth herein with respect
to the authorization and approval thereof are true in all material respects
under the penalties of perjury.

/s/ TROY D. BUTTS
-----------------------------
Troy D. Butts
Senior Vice President and
Chief Financial Officer

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ARTICLES SUPPLEMENTARY

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

CLASS H CUMULATIVE PREFERRED STOCK
(PAR VALUE $.01 PER SHARE)

APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation
(hereinafter called the "Corporation"), having its principal office in
Baltimore City, Maryland, hereby certifies to the Department of Assessments and
Taxation of the State of Maryland that:

FIRST: Pursuant to authority expressly vested in the Board of
Directors of the Corporation by Section 1.2 of Article IV of the Charter of the
Corporation, as amended to date (the "Charter"), the Board of Directors has
duly divided and classified 2,300,000 authorized but unissued shares of Class A
Common Stock of the Corporation, par value $.01 per share (the "Class A Common
Stock"), into a class designated as Class H Cumulative Preferred Stock, par
value $.01 per share, and has provided for the issuance of such class.

SECOND: The reclassification increases the number of shares classified
as Class H Cumulative Preferred Stock, par value $.01 per share, from no shares
immediately prior to the reclassification to 2,300,000 shares immediately after
the reclassification. The reclassification decreases the number of shares
classified as Class A Common Stock from 498,327,500 shares immediately prior to
the reclassification to 496,027,500 shares immediately after the
reclassification.

THIRD: The terms of the Class H Cumulative Preferred Stock (including
the preferences, conversions or other rights, voting powers, restrictions,
limitations as to dividends and other distributions, qualifications, or terms
or conditions of redemption) as set by the Board of Directors are as follows:

1. NUMBER OF SHARES AND DESIGNATION.

This class of Preferred Stock shall be designated as Class H Cumulative
Preferred Stock, par value $.01 per share (the "Class H Preferred Stock") and
Two Million Three Hundred Thousand (2,300,000) shall be the authorized number
of shares of such Class H Preferred Stock constituting such class.

2. DEFINITIONS.

For purposes of the Class H Preferred Stock, the following terms shall
have the meanings indicated:
<PAGE> 124
"Act" shall mean the Securities Act of 1933, as amended.

"affiliate" of a Person means a Person that directly, or indirectly
through one or more intermediaries, controls or is controlled by, or
is under common control with, the Person specified.

"Aggregate Value" shall mean, with respect to any block of Equity
Stock, the sum of the products of (i) the number of shares of each
class of Equity Stock within such block multiplied by (ii) the
corresponding Market Price of one share of Equity Stock of such class.

"Beneficial Ownership" shall mean, with respect to any Person,
ownership of shares of Equity Stock equal to the sum of (i) the number
of shares of Equity Stock directly owned by such Person, (ii) the
number of shares of Equity Stock indirectly owned by such Person (if
such Person is an "individual" as defined in Section 542(a)(2) of the
Code) taking into account the constructive ownership rules of Section
544 of the Code, as modified by Section 856(h)(1)(B) of the Code, and
(iii) the number of shares of Equity Stock that such Person is deemed
to beneficially own pursuant to Rule 13d-3 under the Exchange Act or
that is attributed to such Person pursuant to Section 318 of the Code,
as modified by Section 856(d)(5) of the Code, provided that when
applying this definition of Beneficial Ownership to the Initial
Holder, clause (iii) of this definition, and clause (a) (ii) of the
definition of "Person" shall be disregarded. The terms "Beneficial
Owner," "Beneficially Owns" and "Beneficially Owned" shall have the
correlative meanings.

"Board of Directors" shall mean the Board of Directors of the
Corporation or any committee authorized by such Board of Directors to
perform any of its responsibilities with respect to the Class H
Preferred Stock; provided that, for purposes of paragraph (a) of
Section 8 of this Article, the term "Board of Directors" shall not
include any such committee.

"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which state or federally chartered banking institutions in New
York, New York are not required to be open.

"Charitable Beneficiary" shall mean one or more beneficiaries of the
Trust as determined pursuant to Section 10.3 of this Article, each of
which shall be an organization described in Section 170(b)(1)(A),
170(c)(2) and 501(c)(3) of the Code.

"Class H Preferred Stock" shall have the meaning set forth in Section
1 of this Article.

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<PAGE> 125
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, or any successor statute thereto. Reference to any
provision of the Code shall mean such provision as in effect from time
to time, as the same may be amended, and any successor thereto, as
interpreted by any applicable regulations or other administrative
pronouncements as in effect from time to time.

"Common Stock" shall mean the Class A Common Stock, $.01 par value per
share, of the Corporation, and the Class B Common Stock, $.01 par
value per share, of the Corporation and such other shares of the
Corporation's capital stock into which outstanding shares of such
Class A Common Stock or Class B Common Stock shall be reclassified.

"Dividend Payment Date" shall mean January 15, April 15, July 15 and
October 15 of each year; provided, that if any Dividend Payment Date
falls on any day other than a Business Day, the dividend payment
payable on such Dividend Payment Date shall be paid on the Business
Day immediately following such Dividend Payment Date and no interest
shall accrue on such dividend from such date to such Dividend Payment
Date.

"Dividend Periods" shall mean the Initial Dividend Period and each
subsequent quarterly dividend period commencing on and including
January 15, April 15, July 15 and October 15 of each year and ending
on and including the day preceding the first day of the next
succeeding Dividend Period, other than the Dividend Period during
which any Class H Preferred Stock shall be redeemed pursuant to
Section 5 hereof, which shall end on and include the Redemption Date
with respect to the Class H Preferred Stock being redeemed.

"Equity Stock" shall mean one or more shares of any class of capital
stock of the Corporation.

"Excess Transfer" has the meaning set forth in Section 10.3(A) of this
Article.

"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

"Issue Date" shall mean August 14, 1998.

"Initial Dividend Period" shall mean the period commencing on and
including the Issue Date and ending on and including October 14, 1998.

"Initial Holder" shall mean Terry Considine.

"Initial Holder Limit" shall mean a number of the Outstanding shares
of Class H Preferred Stock of the Corporation having an Aggregate
Value not in excess of the excess of (x) 15% of the Aggregate Value of
all Outstanding shares of

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<PAGE> 126
Equity Stock over (y) the Aggregate Value of all shares of Equity
Stock other than Class H Preferred Stock that are Beneficially Owned
by the Initial Holder. From the Issue Date, the secretary of the
Corporation, or such other person as shall be designated by the Board
of Directors, shall upon request make available to the
representative(s) of the Initial Holder and the Board of Directors, a
schedule that sets forth the then-current Initial Holder Limit
applicable to the Initial Holder.

"Junior Stock" shall have the meaning set forth in paragraph (c) of
Section 7 of this Article.

"Look-Through Entity" shall mean a Person that is either (i) described
in Section 401(a) of the Code as provided under Section 856(h)(3) of
the Code or (ii) registered under the Investment Company Act of 1940.

"Look-Through Ownership Limit" shall mean, for any Look-Through
Entity, a number of the Outstanding shares of Class H Preferred Stock
of the Corporation having an Aggregate Value not in excess of the
excess of (x) 15% of the Aggregate Value of all Outstanding shares of
Equity Stock over (y) the Aggregate Value of all shares of Equity
Stock other than Class H Preferred Stock that are Beneficially Owned
by the Look-Through Entity.

"Market Price" on any date shall mean, with respect to any share of
Equity Stock, the Closing Price of a share of that class of Equity
Stock on the Trading Day immediately preceding such date. The term
"Closing Price," when used with respect to a share of any Equity Stock
and for any date, shall mean the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing
bid and asked prices, regular way, in either case, as reported in the
principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the NYSE or, if the Equity
Stock is not listed or admitted to trading on the NYSE, as reported in
the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on
which the Equity Stock is listed or admitted to trading or, if the
Equity Stock is not listed or admitted to trading on any national
securities exchange, the last quoted price, or if not so quoted, the
average of the high bid and low asked prices in the over-the-counter
market, as reported by the National Association of Securities Dealers,
Inc. Automated Quotation System or, if such system is no longer in
use, the principal other automated quotations system that may then be
in use or, if the Equity Stock is not quoted by any such organization,
the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Equity Stock selected
by the Board of Directors of the Corporation. The term "Trading Day,"
when used with respect to the Closing Price of a share of any Equity
Stock, shall mean (i) if the Equity Stock is listed or admitted to
trading on the NYSE, a day on which the NYSE is open for the

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<PAGE> 127
transaction of business, (ii) if the Equity Stock is not listed or
admitted to trading on the NYSE but is listed or admitted to trading
on another national securities exchange or automated quotation system,
a day on which the principal national securities exchange or automated
quotation system, as the case may be, on which the Equity Stock is
listed or admitted to trading is open for the transaction of business,
or (iii) if the Equity Stock is not listed or admitted to trading on
any national securities exchange or automated quotation system, any
day other than a Saturday, a Sunday or a day on which banking
institutions in the State of New York are authorized or obligated by
law or executive order to close.

"NYSE" shall mean the New York Stock Exchange, Inc.

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

"Outstanding" shall mean issued and outstanding shares of Equity Stock
of the Corporation, provided that for purposes of the application of
the Ownership Limit, the Look-Through Ownership Limit or the Initial
Holder Limit to any Person, the term "Outstanding" shall be deemed to
include the number of shares of Equity Stock that such Person alone,
at that time, could acquire pursuant to any options or convertible
securities.

"Ownership Limit" shall mean, for any Person other than the Initial
Holder or a Look-Through Entity, a number of the Outstanding shares of
Class H Preferred Stock of the Corporation having an Aggregate Value
not in excess of the excess of (x) 8.7% of the Aggregate Value of all
Outstanding shares of Equity Stock over (y) the Aggregate Value of all
shares of Equity Stock other than Class H Preferred Stock that are
Beneficially Owned by the Person.

"Ownership Restrictions" shall mean collectively the Ownership Limit
as applied to Persons other than the Initial Holder or Look-Through
Entities, the Initial Holder Limit as applied to the Initial Holder
and the Look-Through Ownership Limit as applied to Look-Through
Entities.

"Parity Stock" shall have the meaning set forth in paragraph (b) of
Section 7 of this Article.

"Person" shall mean (a) for purposes of Section 10 of this Article,
(i) an individual, corporation, partnership, estate, trust (including
a trust qualifying under Section 401(a) or 501(c) of the Code),
association, private foundation within the meaning of Section 509(a)
of the Code, joint stock company or other entity, and (ii) also
includes a group as that term is used for purposes of Section 13(d)(3)
of the Exchange Act and (b) for purposes of the remaining

5
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Sections of this Article, any individual, firm, partnership,
corporation or other entity and shall include any successor (by merger
or otherwise) of such entity.

"Prohibited Transferee" has the meaning set forth in Section 10.3(A)
of this Article.

"Redemption Date" shall have the meaning set forth in paragraph (a) of
Section 5 of this Article.

"REIT" shall mean a "real estate investment trust" as defined in
Section 856 of the Code.

"Senior Stock" shall have the meaning set forth in paragraph (a) of
Section 7 of this Article.

"set apart for payment" shall be deemed to include, without any action
other than the following, the recording by the Corporation in its
accounting ledgers of any accounting or bookkeeping entry which
indicates, pursuant to a declaration of dividends or other
distribution by the Board of Directors, the allocation of funds to be
so paid on any series or class of capital stock of the Corporation;
provided, however, that if any funds for any class or series of Junior
Stock or any class or series of Parity Stock are placed in a separate
account of the Corporation or delivered to a disbursing, paying or
other similar agent, then "set apart for payment" with respect to the
Class H Preferred Stock shall mean placing such funds in a separate
account or delivering such funds to a disbursing, paying or other
similar agent.

"Transfer" shall mean any sale, transfer, gift, assignment, devise or
other disposition of a share of Class H Preferred Stock (including (i)
the granting of an option or any series of such options or entering
into any agreement for the sale, transfer or other disposition of
Class H Preferred Stock or (ii) the sale, transfer, assignment or
other disposition of any securities or rights convertible into or
exchangeable for Class H Preferred Stock), whether voluntary or
involuntary, whether of record or Beneficial Ownership, and whether by
operation of law or otherwise (including, but not limited to, any
transfer of an interest in other entities that results in a change in
the Beneficial Ownership of shares of Class H Preferred Stock). The
term "Transfers" and "Transferred" shall have correlative meanings.

"Transfer Agent" means such transfer agent as may be designated by the
Board of Directors or their designee as the transfer agent for the
Class H Preferred Stock; provided, that if the Corporation has not
designated a transfer agent then the Corporation shall act as the
transfer agent for the Class H Preferred Stock.

"Trust" shall mean the trust created pursuant to Section 10.3 of this
Article.

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"Trustee" shall mean the Person unaffiliated with either the
Corporation or the Prohibited Transferee that is appointed by the
Corporation to serve as trustee of the Trust.

"Voting Preferred Stock" shall have the meaning set forth in Section 8
of this Article.

3. DIVIDENDS.

(a) The holders of Class H Preferred Stock shall be
entitled to receive, when and as declared by the Board of Directors out of
funds legally available for that purpose, cumulative dividends payable in cash
in an amount per share of Class H Preferred Stock equal to $2.375 per annum
(equivalent to 9 1/2% per annum of the per share Liquidation Preference (as
hereinafter defined)). Such dividends shall be cumulative from the Issue Date,
whether or not in any Dividend Period or Periods such dividends shall be
declared or there shall be funds of the Corporation legally available for the
payment of such dividends, and shall be payable quarterly in arrears on each
Dividend Payment Date, commencing on October 15, 1998. Each such dividend
shall be payable in arrears to the holders of record of the Class H Preferred
Stock, as they appear on the stock records of the Corporation at the close of
business on the January 1, April 1, July 1 or October 1, as the case may be,
immediately preceding such Dividend Payment Date. Accumulated, accrued and
unpaid dividends for any past Dividend Periods may be declared and paid at any
time, without reference to any regular Dividend Payment Date, to holders of
record on such date, which date shall not precede by more than 45 days the
payment date thereof, as may be fixed by the Board of Directors.

(b) Any dividend payable on the Class H Preferred Stock
for any partial dividend period shall be computed ratably on the basis of
twelve 30-day months and a 360-day year. Holders of Class H Preferred Stock
shall not be entitled to any dividends, whether payable in cash, property or
stock, in excess of full cumulative dividends, as herein provided, on the Class
H Preferred Stock. No interest, or sum of money in lieu of interest, shall be
payable in respect of any dividend payment or payments on the Class H Preferred
Stock that may be in arrears.

(c) So long as any of the shares of Class H Preferred
Stock are outstanding, except as described in the immediately following
sentence, no dividends shall be declared or paid or set apart for payment by
the Corporation and no other distribution of cash or other property shall be
declared or made, directly or indirectly, by the Corporation with respect to
any shares of Parity Stock unless, in each case, dividends equal to the full
amount of accumulated, accrued and unpaid dividends on all outstanding shares
of Class H Preferred Stock have been or contemporaneously are declared and paid
or declared and a sum sufficient for the payment thereof has been or
contemporaneously is set apart for payment of such dividends on the Class H
Preferred Stock for all Dividend Periods ending on or prior to the date such
dividend

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or distribution is declared, paid, set apart for payment or made, as the case
may be, with respect to such shares of Parity Stock. When dividends are not
paid in full or a sum sufficient for such payment is not set apart, as
aforesaid, all dividends declared upon the Class H Preferred Stock and all
dividends declared upon any shares of Parity Stock shall be declared ratably in
proportion to the respective amounts of dividends accumulated, accrued and
unpaid on the Class H Preferred Stock and accumulated, accrued and unpaid on
such Parity Stock.

(d) So long as any of the shares of Class H Preferred
Stock are outstanding, no dividends (other than dividends or distributions paid
in shares of, or options, warrants or rights to subscribe for or purchase
shares of, Junior Stock) shall be declared or paid or set apart for payment by
the Corporation and no other distribution of cash or other property shall be
declared or made, directly or indirectly, by the Corporation with respect to
any shares of Junior Stock, nor shall any shares of Junior Stock be redeemed,
purchased or otherwise acquired (other than a redemption, purchase or other
acquisition of Common Stock made for purposes of an employee incentive or
benefit plan of the Corporation or any subsidiary) for any consideration (or
any moneys be paid to or made available for a sinking fund for the redemption
of any shares of any such stock), directly or indirectly, by the Corporation
(except by conversion into or exchange for shares of, or options, warrants or
rights to subscribe for or purchase shares of, Junior Stock), nor shall any
other cash or other property otherwise be paid or distributed to or for the
benefit of any holder of shares of Junior Stock in respect thereof, directly or
indirectly, by the Corporation unless, in each case, dividends equal to the
full amount of all accumulated, accrued and unpaid dividends on all outstanding
shares of Class H Preferred Stock have been declared and paid, or such
dividends have been declared and a sum sufficient for the payment thereof has
been set apart for such payment, on all outstanding shares of Class H Preferred
Stock for all Dividend Periods ending on or prior to the date such dividend or
distribution is declared, paid, set apart for payment or made with respect to
such shares of Junior Stock, or the date such shares of Junior Stock are
redeemed, purchased or otherwise acquired or monies paid to or made available
for any sinking fund for such redemption, or the date any such cash or other
property is paid or distributed to or for the benefit of any holders of Junior
Stock in respect thereof, as the case may be.

Notwithstanding the provisions of this Section 3, the
Corporation shall not be prohibited from (i) declaring or paying or setting
apart for payment any dividend or distribution on any shares of Parity Stock or
(ii) or redeeming, purchasing or otherwise acquiring any Parity Stock, in each
case, if such declaration, payment, redemption, purchase or other acquisition
is necessary in order to maintain the continued qualification of the
Corporation as a REIT under Section 856 of the Code.

4. LIQUIDATION PREFERENCE.

(a) In the event of any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, before any
payment or distribution by

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

(b) Upon any liquidation, dissolution or winding up of
the Corporation, after payment shall have been made in full to the holders of
Class H Preferred Stock and any Parity Stock, as provided in this Section 4,
any other series or class or classes of Junior Stock 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 H Preferred Stock and
any Parity Stock shall not be entitled to share therein.

5. REDEMPTION AT THE OPTION OF THE CORPORATION.

(a) Shares of Class H Preferred Stock shall not be
redeemable by the Corporation prior to August 14, 2003, except as set forth in
Section 10.2 of this Article. On and after August 14, 2003, the Corporation,
at its option, may redeem shares of Class H Preferred Stock, in whole or from
time to time in part, at a redemption price payable in cash equal to 100% of
the Liquidation Preference thereof, plus all accumulated, accrued and unpaid
dividends to the date fixed for redemption (the "Redemption Date"); provided,
however, that in the event of a redemption of shares of Class H Preferred
Stock, if the Redemption Date occurs after a dividend record date and on or
prior to the related Dividend Payment Date, the dividend payable on such
Dividend Payment Date in respect of such shares called for redemption shall be
payable on such Dividend Payment Date to the holders of record at the close of

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business on such dividend record date, and shall not be payable as part of the
redemption price for such shares. In connection with any redemption pursuant
to this Section 5(a), the redemption price of the Class H Preferred Stock
(other than any portion thereof consisting of accumulated, accrued and unpaid
dividends) shall be payable solely with the proceeds from the sale by the
Corporation or the Operating Partnership, of other capital shares of the
Corporation or the Operating Partnership (whether or not such sale occurs
concurrently with such redemption). For purposes of the preceding sentence,
"capital shares" means any common stock, preferred stock, depositary shares,
partnership or other interests, participations or other ownership interests
(however designated) and any rights (other than debt securities convertible
into or exchangeable at the option of the holder for equity securities (unless
and to the extent such debt securities are subsequently converted into capital
shares)) or options to purchase any of the foregoing of or in the Corporation
or the Operating Partnership.

(b) The Redemption Date shall be selected by the
Corporation, shall be specified in the notice of redemption and shall be not
less than 30 days nor more than 60 days after the date notice of redemption is
sent by the Corporation.

(c) If full cumulative dividends on all outstanding shares
of Class H Preferred Stock have not been declared and paid, or declared and set
apart for payment, no shares of Class H Preferred Stock may be redeemed unless
all outstanding shares of Class H Preferred Stock are simultaneously redeemed
and neither the Corporation nor any affiliate of the Corporation may purchase
or acquire shares of Class H Preferred Stock, otherwise than pursuant to a
purchase or exchange offer made on the same terms to all holders of shares of
Class H Preferred Stock.

(d) If the Corporation shall redeem shares of Class H
Preferred Stock pursuant to paragraph (a) of this Section 5, notice of such
redemption shall be given to each holder of record of the shares to be
redeemed. Such notice shall be provided by first class mail, postage prepaid,
at such holder's address as the same appears on the stock records of the
Corporation. Neither the failure to mail any notice required by this paragraph
(d), nor any defect therein or in the mailing thereof to any particular holder,
shall affect the sufficiency of the notice or the validity of the proceedings
for redemption with respect to the other holders. Any notice which was mailed
in the manner herein provided shall be conclusively presumed to have been duly
given on the date mailed whether or not the holder receives the notice. Each
such notice shall state, as appropriate: (1) the Redemption Date; (2) the
number of shares of Class H Preferred Stock to be redeemed and, if fewer than
all such shares held by such holder are to be redeemed, the number of such
shares to be redeemed from such holder; (3) the place or places at which
certificates for such shares are to be surrendered for cash; and (4) the
redemption price payable on such Redemption Date, including, without
limitation, a statement as to whether or not accumulated, accrued and unpaid
dividends will be (x) payable as part of the redemption price, or (y) payable
on the next Dividend Payment Date to the record holder at the close of business
on the relevant record date as described in the next succeeding sentence.

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Notice having been mailed as aforesaid, from and after the Redemption Date
(unless the Corporation shall fail to make available the amount of cash
necessary to effect such redemption), (i) dividends on the shares of Class H
Preferred Stock so called for redemption shall cease to accumulate or accrue on
the shares of Class H Preferred Stock called for redemption, (ii) said shares
shall no longer be deemed to be outstanding, and (iii) all rights of the
holders thereof as holders of Class H Preferred Stock of the Corporation shall
cease except the rights to receive the cash payable upon such redemption,
without interest thereon, upon surrender and endorsement of their certificates
if so required; provided, however, that if the Redemption Date for any shares
of Class H Preferred Stock occurs after any dividend record date and on or
prior to the related Dividend Payment Date, the full dividend payable on such
Dividend Payment Date in respect of such shares of Class H Preferred Stock
called for redemption shall be payable on such Dividend Payment Date to the
holders of record of such shares at the close of business on the corresponding
dividend record date notwithstanding the prior redemption of such shares. The
Corporation's obligation to make available the redemption price in accordance
with the preceding sentence shall be deemed fulfilled if, on or before the
applicable Redemption Date, the Corporation shall irrevocably deposit in trust
with a bank or trust company (which may not be an affiliate of the Corporation)
that has, or is an affiliate of a bank or trust company that has, a capital and
surplus of at least $50,000,000, such amount of cash as is necessary for such
redemption plus, if such Redemption Date occurs after any dividend record date
and on or prior to the related Dividend Payment Date, such amount of cash as is
necessary to pay the dividend payable on such Dividend Payment Date in respect
of such shares of Class H Preferred Stock called for redemption, with
irrevocable instructions that such cash be applied to the redemption of the
shares of Class H Preferred Stock so called for redemption and, if applicable,
the payment of such dividend. No interest shall accrue for the benefit of the
holders of shares of Class H Preferred Stock to be redeemed on any cash so set
aside by the Corporation. Subject to applicable escheat laws, any such cash
unclaimed at the end of two years from the Redemption Date shall revert to the
general funds of the Corporation, after which reversion the holders of shares
of Class H Preferred Stock so called for redemption shall look only to the
general funds of the Corporation for the payment of such cash.

As promptly as practicable after the surrender in accordance with such
notice of the certificates for any such shares of Class H Preferred Stock to be
so redeemed (properly endorsed or assigned for transfer, if the Corporation
shall so require and the notice shall so state), such certificates shall be
exchanged for cash (without interest thereon) for which such shares have been
redeemed in accordance with such notice. If fewer than all the outstanding
shares of Class H Preferred Stock are to be redeemed, shares to be redeemed
shall be selected by the Corporation from outstanding shares of Class H
Preferred Stock not previously called for redemption by lot or, with respect to
the number of shares of Class H Preferred Stock held of record by each holder
of such shares, pro rata (as nearly as may be) or by any other method as may be
determined by the Board of Directors in its discretion to be equitable. If
fewer than all the shares of Class H Preferred Stock represented by any
certificate are redeemed,

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then a new certificate representing the unredeemed shares shall be issued
without cost to the holders thereof.

6. STATUS OF REACQUIRED STOCK.

All shares of Class H Preferred Stock which shall have been issued and
reacquired in any manner by the Corporation shall be returned to the status of
authorized, but unissued shares of Class H Preferred Stock.

7. RANKING.

Any class or series of capital stock of the Corporation shall be deemed
to rank:

(a) prior or senior to the Class H Preferred Stock, as to
the payment of dividends and as to distribution of assets upon liquidation,
dissolution or winding up, if the holders of such class or series shall be
entitled to the receipt of dividends and of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in preference or
priority to the holders of Class H Preferred Stock ("Senior Stock");

(b) on a parity with the Class H Preferred Stock, as to
the payment of dividends and as to distribution of assets upon liquidation,
dissolution or winding up, whether or not the dividend rates, dividend payment
dates or redemption or liquidation prices per share thereof be different from
those of the Class H Preferred Stock, if (i) such capital stock is Class B
Cumulative Convertible Preferred Stock, Class C Cumulative Preferred Stock,
Class D Cumulative Preferred Stock, or Class G Cumulative Preferred Stock of
the Corporation, or (ii) the holders of such class of stock or series and the
Class H Preferred Stock shall be entitled to the receipt of dividends and of
amounts distributable upon liquidation, dissolution or winding up in proportion
to their respective amounts of accrued and unpaid dividends per share or
liquidation preferences, without preference or priority of one over the other
(the capital stock referred to in clauses (i) and (ii) of this paragraph being
hereinafter referred to, collectively, as "Parity Stock"); and

(c) junior to the Class H Preferred Stock, as to the
payment of dividends and as to the distribution of assets upon liquidation,
dissolution or winding up, if (i) such capital stock or series shall be Common
Stock or (ii) the holders of Class H Preferred Stock shall be entitled to
receipt of dividends or of amounts distributable upon liquidation, dissolution
or winding up, as the case may be, in preference or priority to the holders of
shares of such class or series (the capital stock referred to in clauses (i)
and (ii) of this paragraph being hereinafter referred to, collectively, as
"Junior Stock").

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8. VOTING.

(a) If and whenever six quarterly dividends (whether or
not consecutive) payable on the Class H Preferred Stock or any series or class
of Parity Stock shall be in arrears (which shall, with respect to any such
quarterly dividend, mean that any such dividend has not been paid in full),
whether or not earned or declared, the number of directors then constituting
the Board of Directors shall be increased by two (if not already increased by
reason of similar types of provisions with respect to shares of Parity Stock of
any other class or series which is entitled to similar voting rights (the
"Voting Preferred Stock")) and the holders of shares of Class H Preferred
Stock, together with the holders of shares of all other Voting Preferred Stock
then entitled to exercise similar voting rights, voting as a single class
regardless of series, shall be entitled to elect the two additional directors
to serve on the Board of Directors at any annual meeting of stockholders or
special meeting held in place thereof, or at a special meeting of the holders
of the Class H Preferred Stock and the Voting Preferred Stock called as
hereinafter provided. Whenever all arrears in dividends on the Class H
Preferred Stock and the Voting Preferred Stock then outstanding shall have been
paid and dividends thereon for the current quarterly dividend period shall have
been declared and paid, or declared and set apart for payment, then the right
of the holders of the Class H Preferred Stock and the Voting Preferred Stock to
elect such additional two directors shall cease (but subject always to the same
provision for the vesting of such voting rights in the case of any similar
future arrearages), and the terms of office of all persons elected as directors
by the holders of the Class H Preferred Stock and the Voting Preferred Stock
shall forthwith terminate and the number of directors constituting the Board of
Directors shall be reduced accordingly. At any time after such voting power
shall have been so vested in the holders of Class H Preferred Stock and the
Voting Preferred Stock, if applicable, the Secretary of the Corporation may,
and upon the written request of any holder of Class H Preferred Stock
(addressed to the Secretary at the principal office of the Corporation) shall,
call a special meeting of the holders of the Class H Preferred Stock and of the
Voting Preferred Stock for the election of the two directors to be elected by
them as herein provided, such call to be made by notice similar to that
provided in the Bylaws of the Corporation for a special meeting of the
stockholders or as required by law. If any such special meeting required to be
called as above provided shall not be called by the Secretary within 20 days
after receipt of any such request, then any holder of Class H Preferred Stock
may call such meeting, upon the notice above provided, and for that purpose
shall have access to the stock books of the Corporation. The directors elected
at any such special meeting shall hold office until the next annual meeting of
the stockholders or special meeting held in lieu thereof if such office shall
not have previously terminated as above provided. If any vacancy shall occur
among the directors elected by the holders of the Class H Preferred Stock and
the Voting Preferred Stock, a successor shall be elected by the Board of
Directors, upon the nomination of the then-remaining director elected by the
holders of the Class H Preferred Stock and the Voting Preferred Stock or the
successor of such remaining director, to serve until the next annual meeting of
the stockholders or special meeting held in place thereof if such office shall
not have previously terminated as provided above.

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(b) So long as any shares of Class H Preferred Stock are
outstanding, in addition to any other vote or consent of stockholders required
by law or by the Charter of the Corporation, the affirmative vote of at least
66- 2/3% of the votes entitled to be cast by the holders of the Class H
Preferred Stock voting as a single class with the holders of all other classes
or series of Parity Stock entitled to vote on such matters, given in person or
by proxy, either in writing without a meeting or by vote at any meeting called
for the purpose, shall be necessary for effecting or validating:

(i) Any amendment, alteration or repeal of any of
the provisions of, or the addition of any provision to, these Articles
Supplementary, the Charter or the By-Laws of the Corporation that materially
adversely affects the voting powers, rights or preferences of the holders of
the Class H Preferred Stock; provided, however, that the amendment of the
provisions of the Charter so as to authorize or create, or to increase the
authorized amount of, or issue any Junior Stock or any shares of any class of
Parity Stock shall not be deemed to materially adversely affect the voting
powers, rights or preferences of the holders of Class H Preferred Stock; or

provided, however, that no such vote of the holders of Class H Preferred Stock
shall be required if, at or prior to the time when such amendment, alteration
or repeal is to take effect, or when the issuance of any such Senior Stock or
convertible or exchangeable security is to be made, as the case may be,
provision is made for the redemption of all shares of Class H Preferred Stock
at the time outstanding to the extent such redemption is authorized by Section
5 of this Article.

For purposes of the foregoing provisions and all other voting rights
under these Articles Supplementary, each share of Class H Preferred Stock shall
have one (1) vote per share, except that when any other class or series of
preferred stock of the Corporation shall have the right to vote with the Class
H Preferred Stock as a single class on any matter, then the Class H Preferred
Stock and such other class or series shall have with respect to such matters
one quarter of one (.25) vote per $25 of stated liquidation preference. Except
as otherwise required by applicable law or as set forth herein or in the
Charter, the Class H Preferred Stock shall not have any relative,
participating, optional or other special voting rights and powers other than as
set forth herein, and the consent of the holders thereof shall not be required
for the taking of any corporate action.

9. RECORD HOLDERS.

The Corporation and the Transfer Agent may deem and treat the record
holder of any share of Class H Preferred Stock as the true and lawful owner
thereof for all

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purposes, and neither the Corporation nor the Transfer Agent shall be affected
by any notice to the contrary.

10.1 RESTRICTIONS ON OWNERSHIP AND TRANSFERS.

(A) LIMITATION ON BENEFICIAL OWNERSHIP. Except as provided
in Section 10.8, from and after the Issue Date, no Person (other than the
Initial Holder or a Look-Through Entity) shall Beneficially Own shares of Class
H Preferred Stock in excess of the Ownership Limit, the Initial Holder shall
not Beneficially Own shares of Class H Preferred Stock in excess of the Initial
Holder Limit and no Look-Through Entity shall Beneficially Own shares of Class
H Preferred Stock in excess of the Look-Through Ownership Limit.

(B) TRANSFERS IN EXCESS OF OWNERSHIP LIMIT. Except as
provided in Section 10.8, from and after the Issue Date (and subject to Section
10.12), any Transfer (whether or not such Transfer is the result of
transactions entered into through the facilities of the NYSE or other
securities exchange or an automated inter-dealer quotation system) that, if
effective, would result in any Person (other than the Initial Holder or a
Look-Through Entity) Beneficially Owning shares of Class H Preferred Stock in
excess of the Ownership Limit shall be void ab initio as to the Transfer of
such shares of Class H Preferred Stock that would be otherwise Beneficially
Owned by such Person in excess of the Ownership Limit, and the intended
transferee shall acquire no rights in such shares of Class H Preferred Stock.

(C) TRANSFERS IN EXCESS OF INITIAL HOLDER LIMIT. Except as
provided in Section 10.8, from and after the Issue Date (and subject to Section
10.12), any Transfer (whether or not such Transfer is the result of
transactions entered into through the facilities of the NYSE or other
securities exchange or an automated inter-dealer quotation system) that, if
effective, would result in the Initial Holder Beneficially Owning shares of
Class H Preferred Stock in excess of the Initial Holder Limit shall be void ab
initio as to the Transfer of such shares of Class H Preferred Stock that would
be otherwise Beneficially Owned by the Initial Holder in excess of the Initial
Holder limit, and the Initial Holder shall acquire no rights in such shares of
Class H Preferred Stock.

(D) TRANSFERS IN EXCESS OF LOOK-THROUGH OWNERSHIP LIMIT.
Except as provided in Section 10.8 from and after the Issue Date (and subject
to Section 10.12), any Transfer (whether or not such Transfer is the result of
transactions entered into through the facilities of the NYSE or other
securities exchange or an automated inter-dealer quotation system) that, if
effective, would result in any Look-Through Entity Beneficially Owning shares
of Class H Preferred Stock in excess of the Look-Through Ownership limit shall
be void ab initio as to the Transfer of such shares of Class H Preferred Stock
that would be otherwise Beneficially Owned by such Look-Through Entity in
excess of the Look- Through Ownership Limit and such Look-Through Entity shall
acquire no rights in such shares of Class H Preferred Stock.

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(E) TRANSFERS RESULTING IN "CLOSELY HELD" STATUS. From and
after the Issue Date, any Transfer that, if effective would result in the
Corporation being "closely held" within the meaning of Section 856(h) of the
Code, or would otherwise result in the Corporation failing to qualify as a REIT
(including, without limitation, a Transfer or other event that would result in
the Corporation owning (directly or constructively) an interest in a tenant
that is described in Section 856(d)(2)(B) of the Code if the income derived by
the Corporation from such tenant would cause the Corporation to fail to satisfy
any of the gross income requirements of Section 856(c) of the Code) shall be
void ab initio as to the Transfer of shares of Class H Preferred Stock that
would cause the Corporation (i) to be "closely held" within the meaning of
Section 856(h) of the Code or (ii) otherwise fail to qualify as a REIT, as the
case may be, and the intended transferee shall acquire no rights in such shares
of Class H Preferred Stock.

(F) SEVERABILITY ON VOID TRANSACTIONS. A Transfer of a share
of Class H Preferred Stock that is null and void under Sections 10.1(B), (C),
(D), or (E) of this Article because it would, if effective, result in (i) the
ownership of Class H Preferred Stock in excess of the Initial Holder Limit, the
Ownership Limit, or the Look-Through Ownership Limit, (ii) the Corporation
being "closely held" within the meaning of Section 856(h) of the Code or (iii)
the Corporation otherwise failing to qualify as a REIT, shall not adversely
affect the validity of the Transfer of any other share of Class H Preferred
Stock in the same or any other related transaction.

10.2 REMEDIES FOR BREACH. If the Board of Directors or a committee
thereof shall at any time determine in good faith that a Transfer or other
event has taken place in violation of Section 10.1 of this Article or that a
Person intends to acquire or has attempted to acquire Beneficial Ownership of
any shares of Class H Preferred Stock in violation of Section 10.1 of this
Article (whether or not such violation is intended), the Board of Directors or
a committee thereof shall be empowered to take any action as it deems advisable
to refuse to give effect to or to prevent such Transfer or other event,
including, but not limited to, refusing to give effect to such Transfer or
other event on the books of the Corporation, causing the Corporation to redeem
such shares at the then current Market Price and upon such terms and conditions
as may be specified by the Board of Directors in its sole discretion
(including, but not limited to, by means of the issuance of long-term
indebtedness for the purpose of such redemption), demanding the repayment of
any distributions received in respect of shares of Class H Preferred Stock
acquired in violation of Section 10.1 of this Article or instituting
proceedings to enjoin such Transfer or to rescind such Transfer or attempted
Transfer; provided, however, that any Transfers or attempted Transfers (or, in
the case of events other than a Transfer, Beneficial Ownership) in violation of
Section 10.1 of this Article, regardless of any action (or non-action) by the
Board of Directors or such committee, (a) shall be void ab initio or (b) shall
automatically result in the transfer described in Section 10.3 of this Article;
provided, further, that the provisions of this Section 10.2 shall be subject to
the provisions of Section 10.12 of this Article; provided, further, that
neither the Board of Directors nor any committee thereof may

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exercise such authority in a manner that interferes with any ownership or
transfer of Class H Preferred Stock that is expressly authorized pursuant to
Section 10.8(C) of this Article.

10.3. TRANSFER IN TRUST.

(A) ESTABLISHMENT OF TRUST. If, notwithstanding the other
provisions contained in this Article, at any time after the Issue Date there is
a purported Transfer (an "Excess Transfer") (whether or not such Transfer is
the result of transactions entered into through the facilities of the NYSE or
other securities exchange or an automated inter-dealer quotation system) or
other change in the capital structure of the Corporation (including, but not
limited to, any redemption of Equity Stock) or other event (including, but not
limited to, any acquisition of any share of Equity Stock) such that (a) any
Person (other than the Initial Holder or a Look-Through Entity) would
Beneficially Own shares of Class H Preferred Stock in excess of the Ownership
Limit, or (b) the Initial Holder would Beneficially Own shares of Class H
Preferred Stock in excess of the Initial Holder Limit, or (c) any Person that
is a Look-Through Entity would Beneficially Own shares of Class H Preferred
Stock in excess of the Look-Through Ownership Limit (in any such event, the
Person, Initial Holder or Look-Through Entity that would Beneficially Own
shares of Class H Preferred Stock in excess of the Ownership Limit, the Initial
Holder Limit or the Look-Through Entity Limit, respectively, is referred to as
a "Prohibited Transferee"), then, except as otherwise provided in Section 10.8
of this Article, such shares of Class H Preferred Stock in excess of the
Ownership Limit, the Initial Holder Limit or the Look-Through Ownership Limit,
as the case may be, (rounded up to the nearest whole share) shall be
automatically transferred to a Trustee in his capacity as trustee of a Trust
for the exclusive benefit of one or more Charitable Beneficiaries. Such
transfer to the Trustee shall be deemed to be effective as of the close of
business on the Business Day prior to the Excess Transfer, change in capital
structure or another event giving rise to a potential violation of the
Ownership Limit, the Initial Holder Limit or the Look-Through Entity Ownership
Limit.

(B) APPOINTMENT OF TRUSTEE. The Trustee shall be appointed
by the Corporation and shall be a Person unaffiliated with either the
Corporation or any Prohibited Transferee. The Trustee may be an individual or
a bank or trust company duly licensed to conduct a trust business.

(C) STATUS OF SHARES HELD BY THE TRUSTEE. Shares of Class H
Preferred Stock held by the Trustee shall be issued and outstanding shares of
capital stock of the Corporation. Except to the extent provided in Section
10.3(E), the Prohibited Transferee shall have no rights in the Class H
Preferred Stock held by the Trustee, and the Prohibited Transferee shall not
benefit economically from ownership of any shares held in trust by the Trustee,
shall have no rights to dividends and shall not possess any rights to vote or
other rights attributable to the shares held in the Trust.

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<PAGE> 140
(D) DIVIDEND AND VOTING RIGHTS. The Trustee shall have all
voting rights and rights to dividends with respect to shares of Class H
Preferred Stock held in the Trust, which rights shall be exercised for the
benefit of the Charitable Beneficiary. Any dividend or distribution paid prior
to the discovery by the Corporation that the shares of Class H Preferred Stock
have been transferred to the Trustee shall be repaid to the Corporation upon
demand, and any dividend or distribution declared but unpaid shall be rescinded
as void ab initio with respect to such shares of Class H Preferred Stock. Any
dividends or distributions so disgorged or rescinded shall be paid over to the
Trustee and held in trust for the Charitable Beneficiary. Any vote cast by a
Prohibited Transferee prior to the discovery by the Corporation that the shares
of Class H Preferred Stock have been transferred to the Trustee will be
rescinded as void ab initio and shall be recast in accordance with the desires
of the Trustee acting for the benefit of the Charitable Beneficiary. The owner
of the shares at the time of the Excess Transfer, change in capital structure
or other event giving rise to a potential violation of the Ownership Limit,
Initial Holder Limit or Look-Through Entity Ownership Limit shall be deemed to
have given an irrevocable proxy to the Trustee to vote the shares of Class H
Preferred Stock for the benefit of the Charitable Beneficiary.

(E) RESTRICTIONS ON TRANSFER. The Trustee of the Trust may
sell the shares held in the Trust to a Person, designated by the Trustee, whose
ownership of the shares will not violate the Ownership Restrictions. If such a
sale is made, the interest of the Charitable Beneficiary shall terminate and
proceeds of the sale shall be payable to the Prohibited Transferee and to the
Charitable Beneficiary as provided in this Section 10.3(E). The Prohibited
Transferee shall receive the lesser of (1) the price paid by the Prohibited
Transferee for the shares or, if the Prohibited Transferee did not give value
for the shares (through a gift, devise or other transaction), the Market Price
of the shares on the day of the event causing the shares to be held in the
Trust and (2) the price per share received by the Trustee from the sale or
other disposition of the shares held in the Trust. Any proceeds in excess of
the amount payable to the Prohibited Transferee shall be payable to the
Charitable Beneficiary. If any of the transfer restrictions set forth in this
Section 10.3(E) or any application thereof is determined in a final judgment to
be void, invalid or unenforceable by any court having jurisdiction over the
issue, the Prohibited Transferee may be deemed, at the option of the
Corporation, to have acted as the agent of the Corporation in acquiring the
Class H Preferred Stock as to which such restrictions would, by their terms,
apply, and to hold such Class H Preferred Stock on behalf of the Corporation.

(F) PURCHASE RIGHT IN STOCK TRANSFERRED TO THE TRUSTEE.
Shares of Class H Preferred Stock transferred to the Trustee shall be deemed to
have been offered for sale to the Corporation, or its designee, at a price per
share equal to the lesser of (i) the price per share in the transaction that
resulted in such transfer to the Trust (or, in the case of a devise or gift,
the Market Price at the time of such devise or gift) and (ii) the Market Price
on the date the Corporation, or its designee, accepts such offer. The
Corporation shall have the right to accept such offer for a period of

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90 days after the later of (i) the date of the Excess Transfer or other event
resulting in a transfer to the Trust and (ii) the date that the Board of
Directors determines in good faith that an Excess Transfer or other event
occurred.

(G) DESIGNATION OF CHARITABLE BENEFICIARIES. By written
notice to the Trustee, the Corporation shall designate one or more nonprofit
organizations to be the Charitable Beneficiary of the interest in the Trust
relating to such Prohibited Transferee if (i) the shares of Class H Preferred
Stock held in the Trust would not violate the Ownership Restrictions in the
hands of such Charitable Beneficiary and (ii) each Charitable Beneficiary is an
organization described in Sections 170(b)(1)(A), 170(c)(2) and 501(c)(3) of the
Code.

10.4 NOTICE OF RESTRICTED TRANSFER. Any Person that acquires or
attempts to acquire shares of Class H Preferred Stock in violation of Section
10.1 of this Article, or any Person that is a Prohibited Transferee such that
stock is transferred to the Trustee under Section 10.3 of this Article, shall
immediately give written notice to the Corporation of such event and shall
provide to the Corporation such other information as the Corporation may
request in order to determine the effect, if any, of such Transfer or attempted
Transfer or other event on the Corporation's status as a REIT. Failure to give
such notice shall not limit the rights and remedies of the Board of Directors
provided herein in any way.

10.5 OWNERS REQUIRED TO PROVIDE INFORMATION. From and after the
Issue Date certain record and Beneficial Owners and transferees of shares of
Class H Preferred Stock will be required to provide certain information as set
out below.

(A) ANNUAL DISCLOSURE. Every record and Beneficial Owner of
more than 5% (or such other percentage between 0.5% and 5%, as provided in the
applicable regulations adopted under the Code) of the number of Outstanding
shares of Class H Preferred Stock shall, within 30 days after January 1 of each
year, give written notice to the Corporation stating the name and address of
such record or Beneficial Owner, the number of shares of Class H Preferred
Stock Beneficially Owned, and a full description of how such shares are held.
Each such record or Beneficial Owner of Class H Preferred Stock shall, upon
demand by the Corporation, disclose to the Corporation in writing such
additional information with respect to the Beneficial Ownership of the Class H
Preferred Stock as the Board of Directors, in its sole discretion, deems
appropriate or necessary to (i) comply with the provisions of the Code
regarding the qualification of the Corporation as a REIT under the Code and
(ii) ensure compliance with the Ownership Limit, the Initial Holder Limit or
the Look-Through Ownership Limit, as applicable. Each stockholder of record,
including without limitation any Person that holds shares of Class H Preferred
Stock on behalf of a Beneficial Owner, shall take all reasonable steps to
obtain the written notice described in this Section 10.5 from the Beneficial
Owner.

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<PAGE> 142
(B) DISCLOSURE AT THE REQUEST OF THE CORPORATION. Any Person
that is a Beneficial Owner of shares of Class H Preferred Stock and any Person
(including the stockholder of record) that is holding shares of Class H
Preferred Stock for a Beneficial Owner, and any proposed transferee of shares,
shall provide such information as the Corporation, in its sole discretion, may
request in order to determine the Corporation's status as a REIT, to comply
with the requirements of any taxing authority or other governmental agency, to
determine any such compliance or to ensure compliance with the Ownership Limit,
the Initial Holder Limit and the Look-Through Ownership Limit, and shall
provide a statement or affidavit to the Corporation setting forth the number of
shares of Class H Preferred Stock already Beneficially Owned by such
stockholder or proposed transferee and any related persons specified, which
statement or affidavit shall be in the form prescribed by the Corporation for
that purpose.

10.6 REMEDIES NOT LIMITED. Nothing contained in this Article shall
limit the authority of the Board of Directors to take such other action as it
deems necessary or advisable (subject to the provisions of Section 10.12 of
this Article) (i) to protect the Corporation and the interests of its
stockholders in the preservation of the Corporation's status as a REIT and (ii)
to insure compliance with the Ownership Limit, the Initial Holder Limit and the
Look-Through Ownership Limit.

10.7 AMBIGUITY. In the case of an ambiguity in the application of
any of the provisions of Section 10 of this Article, or in the case of an
ambiguity in any definition contained in Section 10 of this Article, the Board
of Directors shall have the power to determine the application of the
provisions of this Article with respect to any situation based on its
reasonable belief, understanding or knowledge of the circumstances.

10.8 EXCEPTIONS. The following exceptions shall apply or may be
established with respect to the limitations of Section 10.1 of this Article.

(A) WAIVER OF OWNERSHIP LIMIT. The Board of Directors, upon
receipt of a ruling from the Internal Revenue Service or an opinion of tax
counsel or other evidence or undertaking acceptable to it, may waive the
application, in whole or in part, of the Ownership Limit to a Person subject to
the Ownership Limit, if such person is not an individual for purposes of
Section 542(a) of the Code and is a corporation, partnership, estate or trust.
In connection with any such exemption, the Board of Directors may require such
representations and undertakings from such Person and may impose such other
conditions as the Board of Directors deems necessary, in its sole discretion,
to determine the effect, if any, of the proposed Transfer on the Corporation's
status as a REIT.

(B) PLEDGE BY INITIAL HOLDER. Notwithstanding any other
provision of this Article, the pledge by the Initial Holder of all or any
portion of the Class H Preferred Stock directly owned at any time or from time
to time shall not constitute a violation of Section 10.1 of this Article and
the pledgee shall not be subject to the

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<PAGE> 143
Ownership Limit with respect to the Class H Preferred Stock so pledged to it
either as a result of the pledge or upon foreclosure.

(C) UNDERWRITERS. For a period of 270 days (or such longer
period of time as any underwriter described below shall hold an unsold
allotment of Class H Preferred Stock) following the purchase of Class H
Preferred Stock by an underwriter that (i) is a corporation, partnership or
other legal entity and (ii) participates in an offering of the Class H
Preferred Stock, such underwriter shall not be subject to the Ownership Limit
with respect to the Class H Preferred Stock purchased by it as a part of or in
connection with such offering and with respect to any Class H Preferred Stock
purchased in connection with market making activities.

10.9 LEGEND. Each certificate for Class H Preferred Stock shall
bear substantially the following legend:

"The shares of Class H Cumulative Preferred Stock
represented by this certificate are subject to restrictions on
transfer. No person may Beneficially Own shares of Class H Cumulative
Preferred Stock in excess of the Ownership Restrictions, as
applicable, with certain further restrictions and exceptions set forth
in the Charter (including the Articles Supplementary setting forth the
terms of the Class H Cumulative Preferred Stock). Any Person that
attempts to Beneficially Own shares of Class H Cumulative Preferred
Stock in excess of the applicable limitation must immediately notify
the Corporation. All capitalized terms in this legend have the
meanings ascribed to such terms in the Charter (including the Articles
Supplementary setting forth the terms of the Class H Cumulative
Preferred Stock), as the same may be amended from time to time, a copy
of which, including the restrictions on transfer, will be sent without
charge to each stockholder that so requests. If the restrictions on
transfer are violated (i) the transfer of the shares of Class H
Cumulative Preferred Stock represented hereby will be void in
accordance with the Charter (including the Articles Supplementary
setting forth the terms of the Class H Cumulative Preferred Stock) or
(ii) the shares of Class H Cumulative Preferred Stock represented
hereby will automatically be transferred to a Trustee of a Trust for
the benefit of one or more Charitable Beneficiaries."

10.10 SEVERABILITY. If any provision of this Article or any
application of any such provision is determined in a final and unappealable
judgment to be void, invalid or unenforceable by any Federal or state court
having jurisdiction over the issues, the validity and enforceability of the
remaining provisions shall not be affected and other applications of such
provision shall be affected only to the extent necessary to comply with the
determination of such court.

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10.11 BOARD OF DIRECTORS DISCRETION. Anything in this Article to the
contrary notwithstanding, the Board of Directors shall be entitled to take or
omit to take such actions as it in its discretion shall determine to be
advisable in order that the Corporation maintain its status as and continue to
qualify as a REIT, including, but not limited to, reducing the Ownership Limit,
the Initial Holder Limit and the Look-Through Ownership Limit in the event of a
change in law.

10.12 SETTLEMENT. Nothing in this Section 10 of this Article shall
be interpreted to preclude the settlement of any transaction entered into
through the facilities of the NYSE or other securities exchange or an automated
inter- dealer quotation system.

FOURTH: The terms of the Class H Cumulative Preferred Stock set forth
in Article Third hereof shall become Article XVII of the Charter.

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<PAGE> 145
IN WITNESS WHEREOF, the Corporation has caused these presents to be
signed in its name and on its behalf by its Senior Vice President and Chief
Financial Officer and witnessed by its Assistant Secretary on August 12,
1998.

WITNESS: APARTMENT INVESTMENT AND
MANAGEMENT COMPANY

/s/ KATHLEEN HARVEY /s/ TROY D. BUTTS
- ---------------------------------- -------------------------------------
Kathleen Harvey Troy D. Butts
Assistant Secretary Senior Vice President and
Chief Financial Officer

THE UNDERSIGNED, Senior Vice President and Chief Financial Officer of
APARTMENT INVESTMENT AND MANAGEMENT COMPANY, who executed on behalf of the
Corporation the Articles Supplementary of which this Certificate is made a
part, hereby acknowledges in the name and on behalf of said Corporation the
foregoing Articles Supplementary to be the corporate act of said Corporation
and hereby certifies that the matters and facts set forth herein with respect
to the authorization and approval thereof are true in all material respects
under the penalties of perjury.

/s/ TROY D. BUTTS
-------------------------------------
Troy D. Butts
Senior Vice President and
Chief Financial Officer
<PAGE> 146
ARTICLES OF MERGER

MERGING

INSIGNIA FINANCIAL GROUP, INC.
(A CORPORATION OF THE STATE OF DELAWARE)

WITH AND INTO

APARTMENT INVESTMENT AND MANAGEMENT COMPANY
(A CORPORATION OF THE STATE OF MARYLAND)

APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a corporation organized and
existing under the laws of the State of Maryland ("AIMCO"), and INSIGNIA
FINANCIAL GROUP, INC., a corporation organized and existing under the laws of
the State of Delaware ("IFG"), do hereby certify to the State Department of
Assessments and Taxation of Maryland (the "Department") as follows:

FIRST: AIMCO and IFG agree that IFG shall be merged with and into AIMCO and
AIMCO shall be the surviving corporation (the "Merger"). The terms and
conditions of the Merger and the mode of carrying the same into effect are as
hereinafter set forth.

SECOND: IFG was incorporated under the Delaware General Corporation Law
("DGCL") on July 20, 1990. IFG qualified to do business in the State of Maryland
on May 11, 1998.

THIRD: The principal office of each of AIMCO and IFG in the State of
Maryland is, and the principal office of AIMCO immediately following the
effective time of the Merger will be, located in the City of Baltimore.

FOURTH: IFG owns no interest in land located in the State of Maryland.

FIFTH: The charter of AIMCO (the "Charter") will be amended as a result of
the Merger as set forth in Article NINTH below, and the Charter, as amended,
shall continue in full force and effect until duly amended in accordance with
its terms and applicable law.

SIXTH: These Articles of Merger, which may be executed in counterparts,
shall become effective immediately upon the acceptance thereof for record by the
Department (the "Effective Time").

SEVENTH: The total number of shares of all classes of stock which each
corporation party to these Articles of Merger has the authority to issue, and
the number of shares of each class, are as follows:

(a) IFG
<PAGE> 147

The total number of shares of all classes of stock which IFG has authority
to issue is One Hundred Three Million (103,000,000) shares (the "IFG Stock"),
consisting of 100,000,000 shares of Class A Common Stock, par value $.01 per
share (the "IFG Common Stock"); 2,000,000 shares of Class B Common Stock, par
value $.01 per share; and 1,000,000 shares of preferred stock, par value $.01
per share, of which 15,000 shares have been designated as 7.5% Step- Up Rate
Convertible Preferred Stock. The aggregate par value of all classes of stock of
IFG having par value is One Million Thirty Thousand Dollars ($1,030,000).

(b) AIMCO

The total number of shares of all classes of stock which AIMCO has
authority to issue is Five Hundred Ten Million Seven Hundred Fifty Thousand
(510,750,000) shares, consisting of 486,027,500 shares of Class A Common Stock,
par value $.01 per share (the "AIMCO Common Stock"); 262,500 shares of Class B
Common Stock, par value $.01 per share; and 24,460,000 shares of Preferred
Stock, par value $.01 per share, of which 750,000 shares have been designated as
Class B Cumulative Convertible Preferred Stock, par value $.01 per share;
2,760,000 shares have been designated as Class C Cumulative Preferred Stock, par
value $.01 per share; 4,600,000 shares have been designated as Class D
Cumulative Preferred Stock, par value $.01 per share; 10,000,000 shares have
been designated as Class E Cumulative Convertible Preferred Stock, par value
$.01 per share (the "Class E Stock"); 4,050,000 shares have been designated as
Class G Cumulative Preferred Stock, par value $.01 per share; and 2,300,000
shares have been designated as Class H Cumulative Preferred Stock, par value
$.01 per share. The aggregate par value of all classes of stock of AIMCO having
par value is Five Million One Hundred Seven Thousand Five Hundred Dollars
($5,107,500).

EIGHTH: At the Effective Time, IFG shall be merged with and into AIMCO, and
thereupon, AIMCO shall possess any and all purposes and powers of IFG, and all
leases, licenses, property, rights, privileges and powers and assets of whatever
nature or description of IFG shall be transferred to, vest in and devolve on
AIMCO, without further act or deed, subject to all of the debts and obligations
of IFG.

NINTH: At the Effective Time, the Charter shall be amended by inserting the
following Article after Article XIX in the Charter:

ARTICLE XIX

In accordance with Section 15.4 of the Indenture, dated as of November 1,
1996, by and between Insignia Financial Group, Inc. ("Insignia"), a Delaware
corporation (as Issuer) and First Union National Bank of South Carolina (as
Trustee) (the "Indenture"), upon effectiveness of the Merger (as defined in the
Amended and Restated Agreement and Plan of Merger, dated as May 26, 1998, by and
among the Corporation, Insignia, Insignia/ESG Holdings, Inc., a Delaware
corporation, and AIMCO Properties, L.P., a Delaware limited partnership (the
"Merger Agreement")), the 6 1/2 % Convertible Subordinated Debentures due 2016
issued by Insignia (the "Convertible Debentures") will become convertible into
the same consideration received by holders of Class A Common Stock, par value
$.01 per share, of Insignia, pursuant to the Merger (i.e., shares of Class E
Cumulative Preferred Stock, par value $.01 per share, of AIMCO (the "AIMCO Class
E Preferred Stock"), (or shares of Class A Common Stock, par value $.01 per
share, of the Corporation

<PAGE> 148

(the "AIMCO Common Stock"), if such Convertible Debentures are converted after
the AIMCO Class E Preferred Stock has been converted into AIMCO Common Stock),
the Cash Amount (as defined in the Merger Agreement), if any, and cash in lieu
of fractional shares). Furthermore, the consideration to be received by holders
of Convertible Debentures who convert such Convertible Debentures subsequent to
the effectiveness of the Merger shall be adjusted as required by Article XV of
the Indenture.

TENTH: The issued and outstanding securities of IFG upon the Effective
Time shall be converted as follows:

(a) Subject to the provisions of Paragraph (f) below, at the Effective
Time each share of IFG Common Stock issued and outstanding immediately prior to
the Effective Time, other than shares of IFG Common Stock beneficially owned by
IFG, AIMCO or any wholly owned subsidiary of AIMCO or IFG, and shares of IFG
Common Stock owned by stockholders who have properly demanded appraisal rights
under Section 262 of the Delaware General Corporation Law ("Section 262") shall
be converted into and become the right to receive .262 shares of Class E Stock
(the "Stock Consideration"), and no ($0) Dollars (the "Cash Amount") (together,
the "Merger Consideration"), all as further described in that certain Amended
and Restated Agreement and Plan of Merger dated as of May 26, 1998, by and among
AIMCO, IFG, Insignia/ESG Holdings, Inc., a Delaware corporation, and AIMCO
Properties, L.P., a Delaware Limited Partnership (the "Merger Agreement").

(b) At the Effective Time, each 6 1/2 % Convertible Subordinated
Debenture (the "Convertible Debentures") issued by IFG pursuant to that certain
Indenture dated November 1, 1996 (the "Indenture"), by and between IFG (as
Issuer) and First Union National Bank of South Carolina (as Trustee) convertible
into shares of IFG Common Stock will become convertible, with such adjustments
as required by Article XV of the Indenture, into the Merger Consideration as
provided for and calculated pursuant to Paragraph (a) of this Article TENTH, as
further set forth in the Merger Agreement.

(c) At the Effective Time, each outstanding security issued by IFG or
any subsidiary thereof (excluding stock options issued under the Insignia 1992
Stock Incentive Plan, as amended, or the Insignia 1995 Non-Employee Director
Stock Option Plan (collectively, the "IFG Stock Plan") and the 6 1/2 % Trust
Convertible Preferred Securities issued by Insignia Financing I as described in
its prospectus dated January 22, 1997 (the "TOPRs")) which is exercisable,
convertible or exchangeable for or into a share or shares of IFG Common Stock
(the "IFG Convertible Securities"), shall be assumed by AIMCO and exercisable,
convertible or exchangeable, with such adjustments as provided by the terms of
each such security, into the Merger Consideration as provided for and calculated
pursuant to Paragraph (a) of this Article TENTH, as further set forth in the
Merger Agreement.

(d) At the Effective Time, each then outstanding, unexercised option
to purchase a share of IFG Common Stock, whether vested or unvested, granted
under the IFG Stock Plan shall be assumed by AIMCO and shall be converted into
an option to purchase .262 shares of AIMCO Common Stock, as further set forth
in the Merger Agreement.

<PAGE> 149

(e) At the Effective Time, each unvested restricted share of IFG
Common Stock awarded under the IFG Stock Plan shall entitle the holder thereof
to receive the Cash Amount and shall be assumed by AIMCO and shall be converted
into .262 restricted shares of AIMCO Common Stock, as further set forth in the
Merger Agreement.

(f) At the Effective Time, each outstanding certificate or
certificates which prior thereto represented shares of IFG Common Stock (other
than a certificate or certificates representing (i) shares of IFG Common Stock
owned by IFG or AIMCO directly or through wholly-owned subsidiaries and (ii)
shares of IFG Common Stock owned by stockholders who have properly demanded
appraisal rights under Section 262 (an "IFG Certificate") shall represent the
right to receive in exchange therefor, upon surrender of the same, certificates
representing that number of shares of Stock Consideration, and the Cash Amount,
if any, as provided for in and calculated pursuant to this Article TENTH,
together with the cash payable in respect of fractional shares or fractional
interests of the Stock Consideration as provided for and calculated pursuant to
Paragraph (g) of this Article TENTH. Until so surrendered, each IFG Certificate
outstanding prior to the Effective Time shall represent the ownership of the
Merger Consideration, which the holder of the shares of IFG Common Stock
represented by such IFG Certificates is entitled to receive in connection with
the Merger, except that, anything herein to the contrary notwithstanding, no
dividends or other distributions on the Merger Consideration shall be paid with
respect to any shares of IFG Common Stock represented by a IFG Certificate until
such IFG Certificate is surrendered for exchange as provided herein. Following
surrender of any such IFG Certificate, there shall be paid to the holder of the
certificates representing whole shares of Stock Consideration issued in
consideration therefor, without interest, (i) at the time of such surrender, the
amount of dividends or other distributions with a record date after the
Effective Time theretofore payable with respect to such whole shares of Stock
Consideration, less the amount of any withholding taxes which may be required
thereon, and (ii) at the appropriate payment date, the amount of dividends or
other distributions with a record date after the Effective Time but prior to
surrender and a payment date subsequent to surrender payable with respect to
such whole shares of the Stock Consideration, less the amount of any withholding
taxes which may be required thereon.

(g) Notwithstanding any other provision hereof, no fractional shares
of Stock Consideration shall be issued in connection with the Merger. Instead,
each holder of an outstanding security of IFG giving rise to a fractional
interest in shares of Stock Consideration, upon the conversion or exchange of
such shares in connection with the Merger shall, at the time of surrender of its
IFG Certificate(s) in respect of such shares, be paid an amount in cash (without
interest) equal to the aggregate of the daily average (computed based on the sum
of the high and low sales prices of AIMCO Common Stock (as reported on the NYSE
Composite Transactions reporting System) as published in the Wall Street Journal
or, if not published therein, in another authoritative source, divided by two)
on each of the twenty consecutive NYSE trading days ending on the fifth NYSE
trading day immediately preceding the Effective Time, divided by twenty,
multiplied by the fraction of such share to which such holder would otherwise be
entitled. No such holder shall be entitled to dividends or other distributions,
voting rights or any other shareholder rights in respect of any fractional share
or interest.

(h) As of the Effective Time, all shares of capital stock of IFG shall
be canceled and retired and shall cease to exist and no Merger Consideration or
other consideration shall be issued or delivered in exchange therefor except as
set forth in this Article TENTH.

<PAGE> 150

ELEVENTH: IFG Certificates shall be exchanged for certificates representing
the Merger Consideration, and cash in lieu of fractional interests in shares of
Stock Consideration, as follows:

(a) As of the Effective Time, AIMCO shall deposit or shall cause to be
deposited with Bank Boston, N.A. (the "Exchange Agent"), for the benefit of the
holders of shares of IFG Common Stock for exchange in accordance with these
Articles of Merger, certificates representing the Stock Consideration, the Cash
Amount, if any, and cash in lieu of fractional interests in shares of Stock
Consideration, to be issued or delivered in connection with the Merger and in
exchange for outstanding shares of IFG Common Stock.

(b) Promptly after the Effective Time, AIMCO shall cause the Exchange
Agent to mail to each holder of record of IFG Certificate(s) (i) a letter of
transmittal which shall specify that delivery shall be effected, and risk of
loss and title to the IFG Certificate(s) shall pass, only upon delivery of the
IFG Certificate(s) to the Exchange Agent and (ii) instructions for use in
effecting the surrender of the IFG Certificate(s) in exchange for Merger
Consideration, and cash in lieu of fractional interests in shares of Stock
Consideration. Upon surrender of a IFG Certificate for cancellation to the
Exchange Agent, together with such letter of transmittal, duly executed and
completed in accordance with the instructions thereto, the holder of such
certificate shall be entitled to receive in exchange therefor, and AIMCO will
cause the Exchange Agent to deliver to such holder, certificates representing
the number of whole shares of Stock Consideration into which the IFG Common
Stock is convertible in the Merger and a check representing the Cash Amount, if
any, and the amount of cash in lieu of fractional interests in shares of Stock
Consideration, if any, and unpaid dividends and distributions, if any, which
such holder has the right to receive in respect of the IFG Certificate(s)
surrendered, after giving effect to any required withholding tax, and the IFG
Certificate(s) so surrendered shall forthwith be canceled. No interest will be
paid or accrued on the Cash Amount, cash in lieu of fractional shares of Merger
Consideration, or unpaid dividends and distributions, if any, payable to the
holders of the IFG Certificate(s). In the event of a transfer of ownership of
IFG Common Stock which is not registered in the transfer records of IFG,
certificates representing the proper number of shares of Stock Consideration,
together with a check for the Cash Amount, and cash to be paid in lieu of
fractional interests in shares of Stock Consideration, may be issued to such
transferee if the IFG Certificate is presented to the Exchange Agent,
accompanied by all documents required to evidence and effect such transfer
together with evidence that any applicable stock transfer taxes have been paid.

(c) At and after the Effective Time, there shall be no transfers on
the stock transfer books of IFG of IFG Common Stock which was outstanding
immediately prior to the Effective Time. If, after the Effective Time, IFG
Certificate(s) are presented to AIMCO, they shall be canceled and exchanged for
certificates for whole shares of Stock Consideration, the Cash Amount and cash
in lieu of fractional interests in shares of Stock Consideration, if any, and
unpaid dividends and distributions deliverable in respect thereof, if any, in
accordance with the procedures set forth in the Agreement of Merger and these
Articles of Merger.

(d) Any portion of the Merger Consideration held by the Exchange Agent
(together with any Cash Amount or cash in lieu of fractional interests in shares
of Stock Consideration and the proceeds of any investments thereof) that remains
unclaimed by the former holders of securities of IFG one year after the
Effective Time shall be delivered to AIMCO. Any

<PAGE> 151

former holders of securities of IFG who have not theretofore complied with the
provisions hereof and Article 2 of the Merger Agreement shall thereafter look to
AIMCO for payment of their shares or receipts constituting the Merger
Consideration, cash in lieu of fractional interests in shares of Stock
Consideration and unpaid dividends and distributions on the Merger Consideration
deliverable in respect of each share of IFG Common Stock which such stockholder
holds, as determined pursuant to Article 2 of the Merger Agreement and these
Articles of Merger, in each case, without any interest thereon.

(e) None of AIMCO, IFG, the Exchange Agent or any other person shall
be liable to any former holder of securities of IFG for any amount properly
delivered to a public official pursuant to applicable abandoned property,
escheat or similar laws.

(f) In the event any IFG Certificate shall have been lost, stolen, or
destroyed, upon the making of an affidavit of that fact by the person claiming
such to be lost, stolen or destroyed, and if required by AIMCO, the posting by
such person of a bond in such reasonable amount as AIMCO may direct as indemnity
against any claim that may be made against it with respect to such IFG
Certificate, the Exchange Agent or AIMCO will deliver in exchange for such lost,
stolen or destroyed certificate, the Merger Consideration and cash in lieu of
fractional interests in shares of Stock Consideration, and unpaid dividends and
distributions on shares of the Merger Consideration as provided in the Agreement
of Merger and these Articles of Merger, deliverable in respect thereof pursuant
hereto.

TWELFTH: The terms and conditions of the transaction described in these
Articles of Merger were duly advised, authorized and approved by IFG in the
manner and by the vote required by the laws of the State of Delaware and the
charter and bylaws of IFG, as follows:

(a) The Board of Directors of IFG, by vote of the members of the Board
of Directors thereof, at a meeting duly called and held, adopted a resolution
declaring that the terms and conditions of the Merger described herein were
advisable and directing that the proposed transaction be submitted for
consideration by the stockholders of IFG.

(b) The stockholders of IFG entitled to vote on the proposed Merger,
at a meeting duly called and held, adopted a resolution approving the Merger, in
all respects by the vote required by and in the manner prescribed under the DGCL
and the charter and bylaws of IFG.

The terms and conditions of the Merger were duly authorized and approved by
AIMCO in the manner and by the vote required by the laws of the State of
Maryland and the Charter and bylaws of AIMCO, as follows:

(a) The Board of Directors of AIMCO, by vote of the members of the
Board of Directors thereof, at a meeting duly called and held, adopted a
resolution declaring that the terms and

<PAGE> 152

conditions of the Merger described herein were advisable and directing that the
proposed Merger be submitted for consideration by the stockholders of AIMCO.

(b) The stockholders of AIMCO entitled to vote on the proposed Merger,
at a meeting duly called and held, adopted a resolution approving the Merger, in
all respects by the vote required by and in the manner prescribed under the MGCL
and the Charter and bylaws of AIMCO.

THIRTEENTH: Each undersigned President and Chairman of the Board
acknowledges these Articles of Merger to be the corporate act of the respective
corporate party on whose behalf he has signed, and further, as to all matters
and facts required to be verified under oath, each President and Chairman of the
Board acknowledges that to the best of his knowledge, information and belief,
these matters and facts relating to the corporation on whose behalf he has
signed are true in all material respects and that this statement is made under
the penalties for perjury.

IN WITNESS WHEREOF, these Articles of Merger have been duly executed on
behalf of Apartment Investment and Management Company by Peter Kompaniez, its
President, and acknowledged by Joel F. Bonder, its Secretary and these Articles
of Merger have been duly executed on behalf of Insignia Financial Group, Inc.,
by Andrew L. Farkas, its Chairman of the Board and acknowledged by Adam B.
Gilbert, its Secretary as of this 1st day of October, 1998.

ATTEST: APARTMENT INVESTMENT AND
MANAGEMENT COMPANY

/s/ JOEL F. BONDER By: /s/ PETER KOMPANIEZ
- ----------------------- ---------------------------
Joel F. Bonder Name: Peter Kompaniez
Secretary Title: President

ATTEST: INSIGNIA FINANCIAL GROUP, INC.

/s/ ADAM B. GILBERT By: /s/ ANDREW L. FARKAS
- ------------------------ ---------------------------
Adam B. Gilbert Name: Andrew L. Farkas
Secretary Title: Chairman of the Board

<PAGE> 153

ARTICLES SUPPLEMENTARY

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

CLASS E CUMULATIVE CONVERTIBLE PREFERRED STOCK
(PAR VALUE $.01 PER SHARE)

APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation
(hereinafter called the "Corporation"), having its principal office in
Baltimore City, Maryland, hereby certifies to the Department of Assessments and
Taxation of the State of Maryland that:

FIRST: Pursuant to authority expressly vested in the Board of
Directors of the Corporation by Section 1.2 of Article IV of the Charter of the
Corporation (the "Charter"), the Board of Directors has duly divided and
classified 10,000,000 authorized but unissued shares of Common Stock into a
class designated as Class E Cumulative Convertible Preferred Stock, par value
$.01 per share, and has provided for the issuance of such class.

SECOND: The reclassification increases the number of shares classified
as Class E Cumulative Convertible Preferred Stock, par value $.01 per share,
from no shares immediately prior to the reclassification to 10,000,000 shares
immediately after the reclassification. The reclassification decreases the
number of shares classified as Common Stock from 496,027,500 shares immediately
prior to the reclassification to 486,027,500 shares immediately after the
reclassification. The number of shares classified as Class E Cumulative
Convertible Preferred Stock will be decreased pursuant to Section 7 of Article
Third of these Articles Supplementary upon reacquisition thereof in any manner,
or by retirement thereof, by the Corporation.

THIRD: The terms of the Class E Cumulative Convertible Preferred Stock
(including the preferences, conversions or other rights, voting powers,
restrictions, limitations as to dividends and other distributions,
qualifications, or terms or conditions of redemption) as set by the Board of
Directors are as follows:

1. NUMBER OF SHARES AND DESIGNATION.

This class of Preferred Stock shall be designated as Class E
Cumulative Convertible Preferred Stock (the "Class E Preferred Stock") and ten
million (10,000,000) shall be the authorized number of shares of such Class E
Preferred Stock constituting such class.

2. DEFINITIONS.

For purposes of the Class E Preferred Stock, the following terms shall
have the meanings indicated:

<PAGE> 154

"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which state or federally chartered banking institutions in New
York, New York are not required to be open.

"Class E Preferred Stock" shall have the meaning set forth in Section
1 of this Article.

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

"Common Stock" shall mean the Class A Common Stock, $.01 par value per
share, of the Corporation or such shares of the Corporation's capital
stock into which outstanding shares of Common Stock shall be
reclassified.

"Conversion Date" shall mean the date on which the Series E Preferred
Stock is converted into issued and outstanding Common Stock.

"Current Market Price" per share of Common Stock on any date shall
mean the average of the daily market prices of a share of Common Stock
for the five consecutive trading days preceding such date. The market
price for each such day shall mean the last sale price, regular way,
or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported
in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the NYSE or, if
the Common Stock is not listed or admitted to trading on the NYSE, as
reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities
exchange on which the Common Stock is listed or admitted to trading
or, if the Common Stock is not listed or admitted to trading on any
national securities exchange, the last quoted price, or if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System or, if such system
is no longer in use, the principal other automated quotations system
that may then be in use or, if the Common Stock is not quoted by any
such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Common
Stock selected by the Board of Directors of the Corporation.

"Dividend Payment Date" shall mean, with respect to each Dividend
Period, (a) the date on which cash dividends are paid on the Common
Stock with respect to such Dividend Period, but excluding any such
dates after the Conversion Date; or (b) if such dividends have not

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been paid on the Common Stock by 9:00 a.m, New York City time, on the
sixtieth day from and including the last day of such Dividend Period,
then on such day; provided, further, that if any Dividend Payment Date
falls on any day other than a Business Day, the dividend payment
payable on such Dividend Payment Date shall be paid on the Business
Day immediately following such Dividend Payment Date.

"Dividend Periods" shall mean the Initial Dividend Period and each
subsequent quarterly dividend period commencing on and including
January 1, April 1, July 1, and October 1 of each year and ending on
and including the day immediately preceding the last day of the
succeeding Dividend Period, other than the Dividend Period during
which any Class E Preferred Stock shall be redeemed pursuant to
Section 6 hereof, which shall end on and include the Call Date with
respect to the Class E Stock being redeemed.

"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

"Issue Date" shall mean the Effective Time under the Merger Agreement.

"Initial Dividend" shall mean the first dividend paid to holders of
the Common Stock after the Issue Date.

"Initial Dividend Period" shall mean the period commencing on and
including the Issue Date and ending on and including the record date
for the Initial Dividend.

"Junior Stock" shall have the meaning set forth in paragraph (c) of
Section 8 of this Article. The Common Stock issued by the Corporation
shall be Junior Stock.

"Merger Agreement" shall mean the Amended and Restated Agreement and
Plan of Merger, dated as of May 26, 1998, by and among the
Corporation, Insignia Financial Group, Inc., a Delaware corporation,
Insignia/ESG Holdings, Inc., a Delaware corporation, and AIMCO
Properties, L.P., a Delaware limited partnership.

"NYSE" shall mean the New York Stock Exchange, Inc.

"Parity Stock" shall have the meaning set forth in paragraph (b) of
Section 8 of this Article.

"Prohibited Transferee" has the meaning set forth in Section 11.3(A)
of this Article.

"Senior Stock" shall have the meaning set forth in paragraph (a) of
Section 8 of this Article. The Class B Cumulative Convertible
Preferred Stock, Class C 9% Cumulative Preferred Stock, Class D 8.75%
Cumulative Preferred Stock, Class G 9.375% Cumulative Preferred Stock
and Class H 9.50% Cumulative Preferred Stock previously issued by the
Corporation shall each be a Senior Stock.

"set apart for payment" shall be deemed to include, without any action
other than the following, the recording by the Corporation in its
accounting ledgers of any accounting or

3
<PAGE> 156

bookkeeping entry which indicates, pursuant to a declaration of
dividends or other distribution by the Board of Directors, the
allocation of funds to be so paid on any series or class of capital
stock of the Corporation; provided, however, that if any funds for any
class or series of Parity Stock are placed in a separate account of
the Corporation or delivered to a disbursing, paying or other similar
agent, then "set apart for payment" with respect to the Class E
Preferred Stock shall mean placing such funds in a separate account or
delivering such funds to a disbursing, paying or other similar agent.

"Special Dividend" shall mean, if and when declared by the Board of
Directors, in its sole discretion, the distribution, whether in one or
more disbursements, of an amount per share of Class E Preferred Stock
equal to the Special Dividend Amount divided by the Series E
Conversion Ratio (each as defined in the Merger Agreement) (subject to
proportional adjustment upon the occurrence of any of the events
described in Section 5(b) hereof), to the holders of Class E Preferred
Stock.

"Special Dividend Date" shall mean any date on which the Special
Dividend, or any portion thereof, is paid to the holders of the Class
E Preferred Stock.

"Transfer Agent" means such transfer agent as may be designated by the
Board of Directors or their designee as the transfer agent for the
Class E Preferred Stock; provided, that if the Corporation has not
designated a transfer agent then the Corporation shall act as the
transfer agent for the Class E Preferred Stock.

3. DIVIDENDS AND THE SPECIAL DIVIDEND DISTRIBUTION.

(a) On every Dividend Payment Date, the holders of Class E
Preferred Stock shall be entitled to receive cumulative dividends payable in
cash in an amount per share of Class E Preferred Stock equal to the per share
dividend payable on Common Stock on such Dividend Payment Date. Such dividends
shall be cumulative from the Issue Date, whether or not in any Dividend Period
or Periods such dividends shall be declared or there shall be funds of the
Corporation legally available for the payment of such dividends, and shall be
payable quarterly in arrears on the Dividend Payment Dates, commencing on the
first Dividend Payment Date after the Issue Date. Each such dividend shall be
payable in arrears to the holders of record of the Class E Preferred Stock as
they appear on the records of the Corporation at the close of business on the
record date fixed by the Board of Directors with respect to such Dividend
Payment Date which shall be not more than 60 days prior to the applicable
Dividend Payment Date and, within such 60 day period, shall be the same date as
the record date for the regular quarterly dividend payable with respect to the
Common Stock for the Dividend Period to which such Dividend Payment Date
relates (or, if there is no such record date for Common Stock, then such date
as the Board of Directors may fix). Accumulated, accrued and unpaid dividends
for any past Dividend Periods may be declared and paid at any time, without
reference to any regular Dividend Payment Date, to holders of record on such
date, which date shall not precede by more than 45 days the payment date
thereof, as may be fixed by the Board of Directors.

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(b) The amount of dividends payable per share of Class E
Preferred Stock for the Initial Dividend Period, or any other period shorter
than a full Dividend Period, shall be computed ratably on the basis of twelve
30-day months and a 360-day year. No interest, or sum of money in lieu of
interest, shall be payable in respect of any dividend payment or payments on
the Class E Preferred Stock that may be in arrears.

(c) On any Special Dividend Date, the holders of Class E
Preferred Stock shall be entitled to receive the Special Dividend, or any
portion thereof, as determined by the Board of Directors, with respect to each
share of Class E Preferred Stock. The Special Dividend payment shall be payable
to the holders of record of the Class E Preferred Stock as they appear on the
records of the Corporation at the close of business on the record date fixed by
the Board of Directors with respect to such Special Dividend Date.

(d) After January 15, 1999, if any portion of the Special
Dividend or any other dividend payable pursuant to section 3(a) hereof has yet
to be declared and paid to the holders of Class E Preferred Stock, no dividends
shall be declared or paid or set apart for payment by the Corporation and no
other distribution of cash or other property shall be declared or made,
directly or indirectly, by the Corporation with respect to any shares of Common
Stock, nor shall any shares of Common Stock be redeemed, purchased or otherwise
acquired (other than a redemption, purchase or other acquisition of Common
Stock made for purposes of an employee incentive or benefit plan of the
Corporation or any subsidiary) for any consideration (or any moneys be paid to
or made available for a sinking fund for the redemption of any shares of any
such stock), directly or indirectly, by the Corporation (except by conversion
into or exchange for shares of, or options, warrants or rights to subscribe for
or purchase shares of, Common Stock), nor shall any other cash or other
property otherwise be paid or distributed to or for the benefit of any holder
of shares of Common Stock in respect thereof, directly or indirectly, by the
Corporation.

4. LIQUIDATION.

In the event of any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, before any payment or
distribution of the Corporation (whether capital or surplus) shall be made to
or set apart for the holders of Common Stock, the holders of shares of Class E
Preferred Stock shall be entitled to receive $1.00 per share of Class E
Preferred Stock plus the Special Dividend if such dividend is unpaid on the
date of final distribution to such holders, thereafter each share of Class E
Preferred Stock shall have the same rights with respect to assets of the
Corporation as one share of Common Stock.

5. CONVERSION.

(a) On the close of business on the day on which the Special
Dividend, or any remaining unpaid portion thereof, is paid to the holders of
the Class E Preferred Stock, each share of Class E Preferred Stock shall be
automatically converted into one share of Common Stock without any action on
the part of the Corporation or the holder of such share of Class E Preferred
Stock.

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(b) If the Corporation shall after the Issue Date (i) pay a
dividend or make a distribution on its Common Stock in shares of Common Stock,
(ii) subdivide its outstanding Common Stock into a greater number of shares,
(iii) combine its outstanding Common Stock into a smaller number of shares,
(iv) issue any shares of capital stock by reclassification of its outstanding
Common Stock, (v) issue rights, options or warrants to all holders of Common
Stock entitling them to subscribe for or purchase Common Stock or (vi) make a
distribution on its Common Stock other than in cash or shares of Common Stock
(including any distribution in securities (other than rights, options or
warrants described in clause (v) of this sentence)) then the Corporation shall
contemporaneously do the same with respect to the Class E Preferred Stock.

(c) The Corporation shall at all times reserve and keep
available, free from preemptive rights, out of the aggregate of its authorized
but unissued Common Stock, solely for the purpose of effecting the conversion
of the Class E Preferred Stock, the full number of shares of Common Stock
deliverable upon the conversion of all outstanding shares of Class E Preferred
Stock.

The Corporation covenants that any shares of Common Stock issued upon
conversion of the shares of Class E Preferred Stock shall be validly issued,
fully paid and nonassessable.

The Corporation shall list the shares of Common Stock required to be
delivered upon conversion of the shares of Class E Preferred Stock, prior to
such delivery, upon the NYSE and each other national securities exchange, if
any, upon which the outstanding shares of Common Stock are listed at the time
of such delivery.

(d) The Corporation will pay any and all documentary stamp or
similar issue or transfer taxes payable in respect of the issue or delivery of
shares of Common Stock upon conversion of shares of Class E Preferred Stock
pursuant hereto; provided, however, that the Corporation shall not be required
to pay any tax that may be payable in respect of any transfer involved in the
issue or delivery of shares of Common Stock in a name other than that of the
holder of the shares of Class E Preferred Stock to be converted, and no such
issue or delivery shall be made unless and until the Person requesting such
issue or delivery has paid to the Corporation the amount of any such tax or
established, to the reasonable satisfaction of the Corporation, that such tax
has been paid.

6. REDEMPTION AT THE OPTION OF THE CORPORATION.

(a) Shares of Class E Preferred Stock shall not be redeemable
by the Corporation prior to October 1, 2018. On or after October 1, 2018, the
Corporation, at its option, may redeem shares of Class E Preferred Stock, in
whole or from time to time in part, at a redemption price per share payable in
cash equal to the sum of (i) the greater of (A) the Current Market Price of the
Common Stock on the Call Date or (B) the AIMCO Index Price (as defined in the
Merger Agreement, but determined without giving effect to the proviso to the
definition thereof for this purpose), plus (ii) all accrued and unpaid
dividends to the Call Date.

(b) Shares of Class E Preferred Stock shall be redeemed by
the Corporation on the date specified in the notice to holders required under
paragraph (d) of this Section 6 (the "Call Date"). The Call Date shall be
selected by the Corporation, shall be specified in the notice of

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redemption and shall be not less than 30 days nor more than 60 days after the
date notice of redemption is sent by the Corporation.

(c) If full cumulative dividends on all outstanding shares of
Class E Preferred Stock and any other class or series of Parity Stock of the
Corporation have not been paid or declared and set apart for payment, no shares
of Class E Preferred Stock may be redeemed unless all outstanding shares of
Class E Preferred Stock are simultaneously redeemed and neither the Corporation
nor any affiliate of the Corporation may purchase or acquire shares of Class E
Preferred Stock, otherwise than pursuant to a purchase or exchange offer made
on the same terms to all holders of shares of Class E Preferred Stock.

(d) If the Corporation shall redeem shares of Class E
Preferred Stock pursuant to paragraph (a) of this Section 6, notice of such
redemption shall be given to each holder of record of the shares to be
redeemed. Such notice shall be provided by first class mail, postage prepaid,
at such holder's address as the same appears on the stock records of the
Corporation. Neither the failure to mail any notice required by this paragraph
(d), nor any defect therein or in the mailing thereof to any particular holder,
shall affect the sufficiency of the notice or the validity of the proceedings
for redemption with respect to the other holders. Any notice which was mailed
in the manner herein provided shall be conclusively presumed to have been duly
given on the date mailed whether or not the holder receives the notice. Each
such notice shall state, as appropriate: (1) the Call Date, (2) the number of
shares of Class E Preferred Stock to be redeemed and, if fewer than all such
shares held by such holder are to be redeemed, the number of such shares to be
redeemed from such holder and (3) the place or places at which certificates for
such shares are to be surrendered for cash. Notice having been mailed as
aforesaid, from and after the Call Date (unless the Corporation shall fail to
make available the amount of cash necessary to effect such redemption), (i)
except as otherwise provided herein, dividends on the shares of Class E
Preferred Stock so called for redemption shall cease to accumulate or accrue on
the shares of Class E Preferred Stock called for redemption (except that, in
the case of a Call Date after a dividend record date and prior to the related
Dividend Payment Date, holders of Class E Preferred Stock on the dividend
record date will be entitled on such Dividend Payment Date to receive the
dividend payable on such shares), (ii) said shares shall no longer be deemed to
be outstanding, and (iii) all rights of the holders thereof as holders of Class
E Preferred Stock of the Corporation shall cease (except the rights to receive
the cash payable upon such redemption, without interest thereon, upon surrender
and endorsement of their certificates if so required and to receive any
dividends payable thereon). The Corporation's obligation to make available the
redemption price in accordance with the preceding sentence shall be deemed
fulfilled if, on or before the Call Date, the Corporation shall deposit with a
bank or trust company (which may be an affiliate of the Corporation) that has,
or is an affiliate of a bank or trust company that has, a capital and surplus
of at least $50,000,000, such amount of cash as is necessary for such
redemption, in trust, with irrevocable instructions that such cash be applied
to the redemption of the shares of Class E Preferred Stock so called for
redemption. No interest shall accrue for the benefit of the holders of shares
of Class E Preferred Stock to be redeemed on any cash so set aside by the
Corporation. Subject to applicable escheat laws, any such cash unclaimed at the
end of two years from the Call Date shall revert to the general funds of the
Corporation, after which reversion the holders of shares of Class E Preferred
Stock so called for redemption shall look only to the general funds of the
Corporation for the payment of such cash.

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As promptly as practicable after the surrender in accordance with such
notice of the certificates for any such shares of Class E Preferred Stock to be
so redeemed (properly endorsed or assigned for transfer, if the Corporation
shall so require and the notice shall so state), such certificates shall be
exchanged for cash (without interest thereon) for which such shares have been
redeemed in accordance with such notice. If fewer than all the outstanding
shares of Class E Preferred Stock are to be redeemed, shares to be redeemed
shall be selected by the Corporation from outstanding shares of Class E
Preferred Stock not previously called for redemption by lot or, with respect to
the number of shares of Class E Preferred Stock held of record by each holder
of such shares, pro rata (as nearly as may be) or by any other method as may be
determined by the Board of Directors in its discretion to be equitable. If
fewer than all the shares of Class E Preferred Stock represented by any
certificate are redeemed, than a new certificate representing the unredeemed
shares shall be issued without cost to the holders thereof.

7. STATUS OF REACQUIRED STOCK.

All shares of Class E Preferred Stock which shall have been issued and
reacquired in any manner by the Corporation shall be retired and cannot be
reissued.

8. RANKING.

Any class or series of capital stock of the Corporation shall be
deemed to rank:

(a) prior or senior to the Class E Preferred Stock, as to the
payment of dividends and as to distribution of assets upon liquidation,
dissolution or winding up, if (i) such class or series shall be Class B
Cumulative Convertible Preferred Stock, Class C Cumulative Preferred Stock,
Class D Cumulative Preferred Stock, Class G Cumulative Preferred Stock or Class
H Cumulative Preferred Stock, or (ii) the holders of such class or series of
capital stock shall be entitled to the receipt of dividends or of amounts
distributable upon liquidation, dissolution or winding up, as the case may be,
in preference or priority to the holders of Class E Preferred Stock ("Senior
Stock");

(b) on a parity with the Class E Preferred Stock, as to the
payment of dividends and as to distribution of assets upon liquidation,
dissolution or winding up, whether or not the dividend rates, dividend payment
dates or redemption or liquidation prices per share thereof shall be different
from those of the Class E Preferred Stock, if the holders of such class or
series of capital stock and the Class E Preferred Stock shall be entitled to
the receipt of dividends and of amounts distributable upon liquidation,
dissolution or winding up in proportion to their respective amounts of accrued
and unpaid dividends per share or liquidation preferences, without preference
or priority one over the other ("Parity Stock"); and

(c) junior to the Class E Preferred Stock, as to the payment
of dividends and as to distribution of assets upon liquidation, dissolution or
winding up, if the holders of such class or series of capital stock shall be
entitled to the receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in preference or
priority to the holders of Class E Preferred Stock ("Junior Stock").

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9. VOTING.

(a) Each share of Class E Preferred Stock shall entitle its
holder to one-half (1/2) of one vote with respect to all matters in which
holders of Common Stock shall be entitled to vote thereon.

(b) The holders of the Class E Preferred Stock and the
holders of Common Stock shall vote together as a single class with respect to
all matters, except for any matter relating to the liquidation, dissolution or
winding up of the Corporation or amendment of these Articles Supplementary, in
which case the holders of the Class E Preferred Stock shall vote as a single
class. Approval of two-thirds of the outstanding shares of Class E Preferred
Stock shall be required with respect to any proposed amendment which would
materially affect the existing terms of the Class E Preferred Stock.

(c) If any portion of the Special Dividend has yet to be
declared and paid to the holders of Class E Preferred Stock on January 15,
1999, or if the equivalent of six quarterly dividends payable on the Class E
Preferred Stock or any other class or series of preferred stock are in default,
the number of directors of the Company will be increased by two (without
duplication of any increase made pursuant to the terms of any other series of
preferred stock of the Company), and the holders of the Class E Preferred
Stock, voting as a single class with the holders of shares of any other class
of the Company's preferred stock ranking on a parity with the Class E Preferred
Stock either as to dividends or distribution of assets and upon which like
voting rights have been conferred and are exercisable, will be entitled to
elect such two directors to fill such newly-created directorships. Such right
shall continue until full cumulative dividends for all past dividend periods on
all preferred shares of the Company, including any shares of Class E Preferred
Stock, have been paid or declared and set apart for payment. Any such elected
directors shall serve until the Company's next annual meeting of stockholders
(notwithstanding that prior to the end of such term the dividend default shall
cease to exist) or until their respective successors shall be elected and
qualify.

10. RECORD HOLDERS.

The Corporation and the Transfer Agent may deem and treat the record
holder of any share of Class E Preferred Stock as the true and lawful owner
thereof for all purposes, and neither the Corporation nor the Transfer Agent
shall be affected by any notice to the contrary.

11. ADDITIONAL ISSUANCES.

The shares of Series E Preferred Stock designated by these Articles
Supplementary may not be issued other than pursuant to the terms of the Merger
Agreement.

FOURTH: The terms of the Class E Preferred Stock set forth in Article
Third hereof shall become Article XVIII of the Charter.

[REMAINDER OF PAGE INTENTIONALLY BLANK]

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IN WITNESS WHEREOF, the Corporation has caused these presents to be
signed in its name and on its behalf by its President and Vice Chairman of the
Board and witnessed by its Secretary on October 1, 1998.

WITNESS: APARTMENT INVESTMENT AND
MANAGEMENT COMPANY

/s/ JOEL BONDER /s/ PETER KOMPANIEZ
- --------------------------- ---------------------------------------------
Joel Bonder, Peter Kompaniez
Secretary President and Vice Chairman of the
Board

THE UNDERSIGNED, President of APARTMENT INVESTMENT AND MANAGEMENT
COMPANY, who executed on behalf of the Corporation the Articles Supplementary
of which this Certificate is made a part, hereby acknowledges in the name and
on behalf of said Corporation the foregoing Articles Supplementary to be the
corporate act of said Corporation and hereby certifies that the matters and
facts set forth herein with respect to the authorization and approval thereof
are true in all material respects under the penalties of perjury.

/s/ PETER KOMPANIEZ
---------------------------------------------
Peter Kompaniez
President and Vice Chairman of the
Board

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ARTICLES SUPPLEMENTARY

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

CLASS J CUMULATIVE CONVERTIBLE PREFERRED STOCK
(PAR VALUE $.01 PER SHARE)

APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation
(hereinafter called the "Corporation"), having its principal office in
Baltimore City, Maryland, hereby certifies to the Department of Assessments and
Taxation of the State of Maryland that:

FIRST: Pursuant to authority expressly vested in the Board of
Directors of the Corporation by Section 1.2 of Article IV of the Charter of the
Corporation, as amended to date (the "Charter"), the Board of Directors has
duly divided and classified 2,000,000 authorized but unissued shares of Class A
Common Stock of the Corporation, par value $.01 per share (the "Class A Common
Stock"), into a class designated as Class J Cumulative Convertible Preferred
Stock, par value $.01 per share, and has provided for the issuance of such
class.

SECOND: The reclassification increases the number of shares classified
as Class J Cumulative Convertible Preferred Stock, par value $.01 per share,
from no shares immediately prior to the reclassification to 2,000,000 shares
immediately after the reclassification. The reclassification decreases the
number of shares classified as Class A Common Stock from 486,027,500 shares
immediately prior to the reclassification to 484,027,500 shares immediately
after the reclassification.

THIRD: The terms of the Class J Cumulative Convertible Preferred Stock
(including the preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends and other distributions and
qualifications) as set by the Board of Directors are as follows:

1. NUMBER OF SHARES AND DESIGNATION.

This class of Preferred Stock shall be designated as Class J
Cumulative Convertible Preferred Stock, par value $.01 per share (the "Class J
Preferred Stock") and Two Million (2,000,000) shall be the authorized number of
shares of such Class J Preferred Stock constituting such class.

<PAGE> 164

2. DEFINITIONS.

For purposes of the Class J Preferred Stock, the following terms shall
have the meanings indicated:

"ABP Subscription Agreement" shall mean the Subscription Agreement
dated as of November 6, 1998 between the Corporation and Stichting
Pensioenfonds ABP.

"Act" shall mean the Securities Act of 1933, as amended.

"affiliate" of a Person means a Person that directly, or indirectly
through one or more intermediaries, controls or is controlled by, or
is under common control with, the Person specified.

"Aggregate Value" shall mean, with respect to any block of Equity
Stock, the sum of the products of (i) the number of shares of each
class of Equity Stock within such block multiplied by (ii) the
corresponding Market Price of one share of Equity Stock of such class.

"Beneficial Ownership" shall mean, with respect to any Person,
ownership of shares of Equity Stock equal to the sum of (i) the number
of shares of Equity Stock directly owned by such Person, (ii) the
number of shares of Equity Stock indirectly owned by such Person (if
such Person is an "individual" as defined in Section 542(a)(2) of the
Code) taking into account the constructive ownership rules of Section
544 of the Code, as modified by Section 856(h)(1)(B) of the Code, and
(iii) the number of shares of Equity Stock that such Person is deemed
to beneficially own pursuant to Rule 13d-3 under the Exchange Act or
that is attributed to such Person pursuant to Section 318 of the Code,
as modified by Section 856(d)(5) of the Code, provided that when
applying this definition of Beneficial Ownership to the Initial
Holder, clause (iii) of this definition, and clause (a) (ii) of the
definition of "Person" shall be disregarded. The terms "Beneficial
Owner," "Beneficially Owns" and "Beneficially Owned" shall have the
correlative meanings.

"Board of Directors" shall mean the Board of Directors of the
Corporation or any committee authorized by such Board of Directors to
perform any of its responsibilities with respect to the Class J
Preferred Stock; provided that, for purposes of paragraph (a) of
Section 8 of this Article, the term "Board of Directors" shall not
include any such committee.

"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which state or federally chartered banking institutions in New
York, New York are not required to be open.

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<PAGE> 165

"Charitable Beneficiary" shall mean one or more beneficiaries of the
Trust as determined pursuant to Section 11.3 of this Article, each of
which shall be an organization described in Section 170(b)(1)(A),
170(c)(2) and 501(c)(3) of the Code.

"Class E Articles Supplementary" shall have the meaning set forth in
Section 7.3 of this Article.

"Class J Preferred Stock" shall have the meaning set forth in Section
1 of this Article.

"Closing Price" shall mean, when used with respect to a share of any
Equity Stock and for any date, the last sale price, regular way, or,
in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case, as reported
in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the NYSE or, if
the Equity Stock is not listed or admitted to trading on the NYSE, as
reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities
exchange on which the Equity Stock is listed or admitted to trading
or, if the Equity Stock is not listed or admitted to trading on any
national securities exchange, the last quoted price, or if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or, if
such system is no longer in use, the principal other automated
quotations system that may then be in use or, if the Equity Stock is
not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker making a
market in the Equity Stock selected by the Board of Directors of the
Corporation.

"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.

"Conversion Price" shall mean the conversion price per share of Class
A Common Stock for which each share of Class J Preferred Stock is
convertible,

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<PAGE> 166

as such Conversion Price may be adjusted pursuant to Section 7 of this
Article. The initial Conversion Price shall be $40 (equivalent to a
conversion rate of 2.50 shares of Class A Common Stock for each share
of Class J Preferred Stock).

"Current Market Price" of a share of any Equity Stock shall mean the
closing price, regular way on such day, or, if no sale takes place on
such day, the average of the reported closing bid and asked prices,
regular way, on such day, in either case as reported on the principal
national securities exchange on which such securities are listed or
admitted for trading, or, if such security is not quoted on any
national securities exchange, on the NASDAQ National Market or if such
security is not quoted on the NASDAQ National Market, the average of
the closing bid and asked prices on such day in the over-the-counter
market as reported by NASDAQ or, if bid and asked prices for each
security on such day shall not have been reported through NASDAQ, the
average of the bid and asked prices on such day as furnished by any
New York Stock Exchange or National Association of Securities Dealers,
Inc. member firm regularly making a market in such security selected
for such purpose by the Chief Executive Officer of the Corporation or
the Board of Directors of the Corporation or if any class or series of
securities are not publicly traded, the fair value of the shares of
such class as determined reasonably and in good faith by the Board of
Directors of the Corporation.

"distribution" shall have the meaning set forth in paragraph (a)(iii)
of Section 7.3 of this Article.

"Dividend Payment Date" shall mean, with respect to each Dividend
Period, (a) the date that cash dividends are paid on the Class A
Common Stock with respect to such Dividend Period; or (b) if such
dividends have not been paid on the Class A Common Stock by 9:00 a.m.,
New York City time, on the sixtieth day from and including the last
day of such Dividend Period, then on such day; provided, that if any
Dividend Payment Date falls on any day other than a Business Day, the
dividend payment payable on such Dividend Payment Date shall be paid
on the Business Day immediately following such Dividend Payment Date
and no interest shall accrue on such dividend from such date to such
Dividend Payment Date.

"Dividend Periods" shall mean the Initial Dividend Period and each
subsequent quarterly dividend period commencing on and including
February 15, May 15, August 15 and November 15 of each year and ending
on and including the day preceding the first day of the next
succeeding Dividend Period.

"Equity Stock" shall mean one or more shares of any class of capital
stock of the Corporation.

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<PAGE> 167

"Excess Transfer" has the meaning set forth in Section 11.3(a) of this
Article.

"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

"Fair Market Value" shall mean the average of the daily Current Market
Prices of a share of Class A Common Stock during five (5) consecutive
Trading Days selected by the Corporation commencing not more than
twenty (20) Trading Days before, and ending not later than, the
earlier of the day in question and the day before the "ex" date, if
any, with respect to any issuance or distribution requiring such
computation. The term "'ex' date," when used with respect to any
issuance or distribution, means the first day on which the share of
Class A Common Stock trades regular way, without the right to receive
such issuance or distribution, on the exchange or in the market, as
the case may be, used to determine that day's Current Market Price.

"Issue Date" shall mean the date on which shares of Class J Preferred
Stock are issued pursuant to the ABP Subscription Agreement and the OP
Subscription Agreement.

"Initial Dividend Period" shall mean the period commencing on and
including the Issue Date and ending on and including November 14,
1998.

"Initial Holder" shall mean Terry Considine.

"Initial Holder Limit" shall mean a number of the Outstanding shares
of Class J Preferred Stock of the Corporation having an Aggregate
Value not in excess of the excess of (x) 15% of the Aggregate Value of
all Outstanding shares of Equity Stock over (y) the Aggregate Value of
all shares of Equity Stock other than Class J Preferred Stock that are
Beneficially Owned by the Initial Holder. From the Issue Date, the
secretary of the Corporation, or such other person as shall be
designated by the Board of Directors, shall upon request make
available to the representative(s) of the Initial Holder and the Board
of Directors, a schedule that sets forth the then-current Initial
Holder Limit applicable to the Initial Holder.

"Internal Rate of Return" shall mean, as of any determination date,
the effective discount rate under which the present value of the
Inflows associated with an outstanding share of Class J Preferred
Stock equals the Outflow on the Issue Date associated with such share.
For purposes of calculation of Internal Rate of Return:

(i) "Inflows" shall mean (a) all dividends (whether paid in
cash, property or stock) that have been received on such share, (b)
any other distributions that have been received on such share, and (c)
as of the determination date, the average of the daily Current Market
Prices of a share

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<PAGE> 168

of the Corporation's Class A Common Stock during the five most recent
Trading Days, such average multiplied by the Liquidation Preference
(excluding any accumulated, accrued and unpaid dividends) per share of
Class J Preferred Stock, and such product divided by the Conversion
Price. For purposes of calculating the amounts of any Inflows, all
dividends or distributions received in property or stock shall be
deemed to have a value equal to the fair market value of such
dividends or distributions as of the date such dividend or
distribution is received, as determined in good faith by the Board of
Directors. All Inflows shall be deemed to have taken place on the date
on which payment was actually received by the holder.

(ii) "Outflow" shall mean $100 plus an amount equal to one
one-millionth of any and all out-of-pocket costs of Stichting
Pensioenfonds ABP relating to the acquisition of 1,000,000 shares of
the Corporation's Class J Preferred Stock on the Issue Date. Outflow
shall be deemed to have taken place on the Closing Date of the ABP
Subscription Agreement and the OP Subscription Agreement, and

(iii) Neither the fact of any transfer of Class J Preferred
Stock nor the amount of any consideration received by the holder
thereof or paid by any successor holder in connection with any
transfer shall affect the calculation of Internal Rate of Return.

Schedule A attached hereto shows the calculation of Internal Rate of
Return at certain hypothetical dates of determination and given a
certain hypothetical aggregate purchase price, certain hypothetical
Inflows and certain hypothetical levels of the Current Market Price of
the Corporation's Class A Common Stock.

"Junior Stock" shall have the meaning set forth in paragraph (c) of
Section 8 of this Article.

"Liquidation Preference" shall have the meaning set forth in paragraph
(a) of Section 4 of this Article.

"Market Price" on any date shall mean, with respect to any share of
Equity Stock, the Closing Price of a share of that class of Equity
Stock on the Trading Day immediately preceding such date.

"NYSE" shall mean the New York Stock Exchange, Inc.

"OP Subscription Agreement" shall mean the Stock Purchase Agreement
dated as of November 6, 1998 between the Corporation and AIMCO
Properties, L.P.

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<PAGE> 169

"Outstanding" shall mean issued and outstanding shares of Equity Stock
of the Corporation, provided that for purposes of the application of
the Ownership Limit or the Initial Holder Limit to any Person, the
term "Outstanding" shall be deemed to include the number of shares of
Equity Stock that such Person alone, at that time, could acquire
pursuant to any options or convertible securities.

"Ownership Limit" shall mean, for any Person other than the Initial
Holder, a number of the Outstanding shares of Class J Preferred Stock
of the Corporation having an Aggregate Value not in excess of the
excess of (x) 8.7% of the Aggregate Value of all Outstanding shares of
Equity Stock over (y) the Aggregate Value of all shares of Equity
Stock other than Class J Preferred Stock that are Beneficially Owned
by the Person.

"Ownership Restrictions" shall mean, collectively, the Ownership Limit
as applied to Persons other than the Initial Holder and the Initial
Holder Limit as applied to the Initial Holder.

"Parity Stock" shall have the meaning set forth in paragraph (b) of
Section 8 of this Article.

"Person" shall mean (a) for purposes of Section 11 of this Article,
(i) an individual, corporation, partnership, estate, trust (including
a trust qualifying under Section 401(a) or 501(c) of the Code),
association, private foundation within the meaning of Section 509(a)
of the Code, joint stock company or other entity, and (ii) also
includes a group as that term is used for purposes of Section 13(d)(3)
of the Exchange Act and (b) for purposes of the remaining Sections of
this Article, any individual, firm, partnership, corporation or other
entity and shall include any successor (by merger or otherwise) of
such entity.

"Prohibited Transferee" has the meaning set forth in Section 11.3(a)
of this Article.

"REIT" shall mean a "real estate investment trust" as defined in
Section 856 of the Code.

"Senior Stock" shall have the meaning set forth in paragraph (a) of
Section 8 of this Article.

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Junior Stock or any class or series of Parity Stock are placed in a
separate account of the Corporation or delivered to a disbursing,
paying or other similar agent, then "set apart for payment" with
respect to the Class J Preferred Stock shall mean placing such funds
in a separate account or delivering such funds to a disbursing, paying
or other similar agent.

"Trading Day" shall mean, when used with respect to the Closing Price
of a share of any Equity Stock, (i) if the Equity Stock is listed or
admitted to trading on the NYSE, a day on which the NYSE is open for
the transaction of business, (ii) if the Equity Stock is not listed or
admitted to trading on the NYSE but is listed or admitted to trading
on another national securities exchange or automated quotation system,
a day on which the principal national securities exchange or automated
quotation system, as the case may be, on which the Equity Stock is
listed or admitted to trading is open for the transaction of business,
or (iii) if the Equity Stock is not listed or admitted to trading on
any national securities exchange or automated quotation system, any
day other than a Saturday, a Sunday or a day on which banking
institutions in the State of New York are authorized or obligated by
law or executive order to close.

"Transaction" shall have the meaning set forth in Section 7.3 of this
Article.

"Transfer" shall mean any sale, transfer, gift, assignment, devise or
other disposition of a share of Class J Preferred Stock (including (i)
the granting of an option or any series of such options or entering
into any agreement for the sale, transfer or other disposition of
Class J Preferred Stock or (ii) the sale, transfer, assignment or
other disposition of any securities or rights convertible into or
exchangeable for Class J Preferred Stock), whether voluntary or
involuntary, whether of record or Beneficial Ownership, and whether by
operation of law or otherwise (including, but not limited to, any
transfer of an interest in other entities that results in a change in
the Beneficial Ownership of shares of Class J Preferred Stock). The
term "Transfers" and "Transferred" shall have correlative meanings.

"Transfer Agent" means such transfer agent as may be designated by the
Board of Directors or their designee as the transfer agent for the
Class J Preferred Stock; provided, that if the Corporation has not
designated a transfer agent then the Corporation shall act as the
transfer agent for the Class J Preferred Stock.

"Trust" shall mean the trust created pursuant to Section 11.3 of this
Article.

"Trustee" shall mean the Person unaffiliated with either the
Corporation or the Prohibited Transferee that is appointed by the
Corporation to serve as trustee of the Trust.

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<PAGE> 171

"Voting Preferred Stock" shall have the meaning set forth in Section 9
of this Article.

3. DIVIDENDS.

(a) The holders of Class J Preferred Stock shall be entitled
to receive, when and as declared by the Board of Directors out of funds legally
available for that purpose, cumulative dividends payable in cash in an amount
per share of Class J Preferred Stock equal to (i) 7% per annum of the per share
Liquidation Preference (as hereinafter defined) for the period beginning on and
including the Issue Date and lasting until November 15, 1998; (ii) 8% per annum
of the per share Liquidation Preference for the period beginning on and
including November 15, 1998 and lasting until November 15, 1999; (iii) 9% per
annum of the per share Liquidation Preference for the period beginning on and
including November 15, 1999 and lasting until November 15, 2000; and (iv) 9.5%
per annum of the per share Liquidation Preference thereafter. Such dividends
shall be cumulative from the Issue Date, whether or not in any Dividend Period
or Periods such dividends shall be declared or there shall be funds of the
Corporation legally available for the payment of such dividends, and shall be
payable quarterly in arrears on each Dividend Payment Date, commencing on
November 15, 1998. Each such dividend shall be payable in arrears to the
holders of record of the Class J Preferred Stock, as they appear on the stock
records of the Corporation at the close of business on a record date fixed by
the Board of Directors which shall not be more than 60 days prior to the
applicable Dividend Payment Date and, within such 60 day period, shall be the
same date as the record date for the regular quarterly dividend payable with
respect to the Class A Common Stock for the Dividend Period to which such
Dividend Payment Date relates (or if there is no such record date for Class A
Common Stock, then such date as the Board of Directors may fix). Accumulated,
accrued and unpaid dividends for any past Dividend Periods may be declared and
paid at any time, without reference to any regular Dividend Payment Date, to
holders of record on such date, which date shall not precede by more than 45
days the payment date thereof, as may be fixed by the Board of Directors.

(b) Any dividend payable on the Class J Preferred Stock for
any partial dividend period shall be computed ratably on the basis of twelve
30-day months and a 360-day year. Holders of Class J Preferred Stock shall not
be entitled to any dividends, whether payable in cash, property or stock, in
excess of full cumulative dividends, as herein provided, on the Class J
Preferred Stock. No interest, or sum of money in lieu of interest, shall be
payable in respect of any dividend payment or payments on the Class J Preferred
Stock that may be in arrears.

(c) So long as any of the shares of Class J Preferred Stock
are outstanding, except as described in the immediately following sentence, no
dividends shall be declared or paid or set apart for payment by the Corporation
and no other

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distribution of cash or other property shall be declared or made, directly or
indirectly, by the Corporation with respect to any shares of Parity Stock
unless, in each case, dividends equal to the full amount of accumulated,
accrued and unpaid dividends on all outstanding shares of Class J Preferred
Stock have been or contemporaneously are declared and paid or declared and a
sum sufficient for the payment thereof has been or contemporaneously is set
apart for payment of such dividends on the Class J Preferred Stock for all
Dividend Periods ending on or prior to the date such dividend or distribution
is declared, paid, set apart for payment or made, as the case may be, with
respect to such shares of Parity Stock. When dividends are not paid in full or
a sum sufficient for such payment is not set apart, as aforesaid, all dividends
declared upon the Class J Preferred Stock and all dividends declared upon any
shares of Parity Stock shall be declared ratably in proportion to the
respective amounts of dividends accumulated, accrued and unpaid on the Class J
Preferred Stock and accumulated, accrued and unpaid on such Parity Stock.

(d) So long as any of the shares of Class J Preferred Stock
are outstanding, no dividends (other than dividends or distributions paid in
shares of, or options, warrants or rights to subscribe for or purchase shares
of, Junior Stock) shall be declared or paid or set apart for payment by the
Corporation and no other distribution of cash or other property shall be
declared or made, directly or indirectly, by the Corporation with respect to
any shares of Junior Stock, nor shall any shares of Junior Stock be redeemed,
purchased or otherwise acquired (other than a redemption, purchase or other
acquisition of Common Stock made for purposes of an employee incentive or
benefit plan of the Corporation or any subsidiary) for any consideration (or
any moneys be paid to or made available for a sinking fund for the redemption
of any shares of any such stock), directly or indirectly, by the Corporation
(except by conversion into or exchange for shares of, or options, warrants or
rights to subscribe for or purchase shares of, Junior Stock), nor shall any
other cash or other property otherwise be paid or distributed to or for the
benefit of any holder of shares of Junior Stock in respect thereof, directly or
indirectly, by the Corporation unless, in each case, dividends equal to the
full amount of all accumulated, accrued and unpaid dividends on all outstanding
shares of Class J Preferred Stock have been declared and paid, or such
dividends have been declared and a sum sufficient for the payment thereof has
been set apart for such payment, on all outstanding shares of Class J Preferred
Stock for all Dividend Periods ending on or prior to the date such dividend or
distribution is declared, paid, set apart for payment or made with respect to
such shares of Junior Stock, or the date such shares of Junior Stock are
redeemed, purchased or otherwise acquired or monies paid to or made available
for any sinking fund for such redemption, or the date any such cash or other
property is paid or distributed to or for the benefit of any holders of Junior
Stock in respect thereof, as the case may be.

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or otherwise acquiring any Parity Stock, in each case, if such declaration,
payment, setting apart for payment, redemption, purchase or other acquisition
is necessary in order to maintain the continued qualification of the
Corporation as a REIT under Section 856 of the Code.

4. LIQUIDATION PREFERENCE.

(a) In the event of any liquidation, dissolution or winding
up of the Corporation, whether voluntary or involuntary, before any payment or
distribution by the Corporation (whether of capital, surplus or otherwise)
shall be made to or set apart for the holders of Junior Stock, the holders of
shares of Class J Preferred Stock shall be entitled to receive One Hundred
Dollars ($100) per share of Class J Preferred Stock (the "Liquidation
Preference"), plus an amount equal to all dividends (whether or not earned or
declared) accumulated, accrued and unpaid thereon to the date of final
distribution to such holders; but such holders shall not be entitled to any
further payment. Until the holders of the Class J Preferred Stock have been
paid the Liquidation Preference in full, plus an amount equal to all dividends
(whether or not earned or declared) accumulated, accrued and unpaid thereon to
the date of final distribution to such holders, no payment will be made to any
holder of Junior Stock upon the liquidation, dissolution or winding up of the
Corporation. If, upon any liquidation, dissolution or winding up of the
Corporation, the assets of the Corporation, or proceeds thereof, distributable
among the holders of Class J Preferred Stock shall be insufficient to pay in
full the preferential amount aforesaid and liquidating payments on any other
shares of any class or series of Parity Stock, then such assets, or the
proceeds thereof, shall be distributed among the holders of Class J Preferred
Stock and any such other Parity Stock ratably in the same proportion as the
respective amounts that would be payable on such Class J Preferred Stock and
any such other Parity Stock if all amounts payable thereon were paid in full.
For the purposes of this Section 4, (i) a consolidation or merger of the
Corporation with one or more corporations, (ii) a sale or transfer of all or
substantially all of the Corporation's assets, or (iii) a statutory share
exchange shall not be deemed to be a liquidation, dissolution or winding up,
voluntary or involuntary, of the Corporation.

(b) Upon any liquidation, dissolution or winding up of the
Corporation, after payment shall have been made in full to the holders of Class
J Preferred Stock and any Parity Stock, as provided in this Section 4, any
other series or class or classes of Junior Stock 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 J Preferred Stock and
any Parity Stock shall not be entitled to share therein.

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5. REDEMPTION.

The Class J Preferred Stock is not redeemable, other than as
specified in Section 11.2 hereof.

6. STATUS OF REACQUIRED STOCK.

All shares of Class J Preferred Stock which shall have been issued and
reacquired in any manner by the Corporation (including without limitation
shares of Class J Preferred Stock which have been surrendered for conversion
into Class A Common Stock) shall be returned to the status of authorized, but
unissued shares of Class J Preferred Stock.

7. CONVERSION.

7.1 CONVERSION AT HOLDERS' OPTION.

At any time on or after the Issue Date, holders of shares of
Class J Preferred Stock shall have the right to convert all or a portion of
such shares into shares of Class A Common Stock, as follows:

(a) Subject to and upon compliance with the provisions of
this Section 7, a holder of shares of Class J Preferred Stock shall have the
right, at such holder's option, at any time on or after the Issue Date to
convert such shares, in whole or in part, into the number of fully paid and
non-assessable shares of authorized but previously unissued shares of Class A
Common Stock per each share of Class J Preferred Stock obtained by dividing the
Liquidation Preference (excluding any accumulated accrued and unpaid dividends)
per share of Class J Preferred Stock by the Conversion Price (as in effect at
the time and on the date provided for in subparagraph (b)(iv) of this Section
7.1) and by surrendering such shares to be converted, such surrender to be made
in the manner provided in paragraph (b) of this Section 7.1.

(b) (i) In order to exercise the conversion right, the holder
of each share of Class J Preferred Stock to be converted shall surrender the
certificate representing such share, duly endorsed or assigned to the
Corporation or in blank, at the office of the Transfer Agent, accompanied by
written notice to the Corporation that the holder thereof elects to convert
such share of Class J Preferred Stock. Unless the shares issuable on conversion
are to be issued in the same name as the name in which such share of Class J
Preferred Stock is registered, each share surrendered for conversion shall be
accompanied by instruments of transfer, in form satisfactory to the
Corporation, duly executed by the holder or such holder's duly authorized
attorney and an amount sufficient to pay any transfer or similar tax (or

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<PAGE> 175

evidence reasonably satisfactory to the Corporation demonstrating that such
taxes have been paid).

(ii) A holder of shares of Class J Preferred Stock shall,
as of the date of the conversion of such shares to shares of Class A Common
Stock, be entitled to receive cash payment in respect of any dividends (whether
or not earned or declared) that are accumulated, accrued and unpaid thereon as
of the time of such conversion, provided, however, that payment in respect of
any dividend on such shares that has been declared but for which the Dividend
Payment Date has not yet been reached shall be payable as of such Dividend
Payment Date. Except as provided above, the Corporation shall make no payment
or allowance for unpaid dividends, whether or not in arrears, on converted
shares.

(iii) As promptly as practicable after the surrender of
certificates for shares of Class J Preferred Stock as aforesaid, the
Corporation shall issue and shall deliver at such office to such holder, or
send on such holder's written order, a certificate or certificates for the
number of full shares of Class A Common Stock issuable upon the conversion of
such shares of Class J Preferred Stock in accordance with provisions of this
Section 7, and any fractional interest in respect of a share of Class A Common
Stock arising upon such conversion shall be settled as provided in paragraph
(c) of this Section 7.1.

(iv) Each conversion shall be deemed to have been
effected immediately prior to the close of business on the date on which the
certificates for shares of Class J Preferred Stock shall have been surrendered
and such notice received by the Corporation as aforesaid, and the Person or
Persons in whose name or names any certificate or certificates for shares of
Class A Common Stock shall be issuable upon such conversion shall be deemed to
have become the holder or holders of record of the shares represented thereby
at such time on such date and such conversion shall be at the Conversion Price
in effect at such time on such date unless the stock transfer books of the
Corporation shall be closed on that date, in which event such Person or Persons
shall be deemed to have become such holder or holders of record at the close of
business on the next succeeding day on which such stock transfer books are
open, but such conversion shall be at the Conversion Price in effect on the
date on which such shares shall have been surrendered and such notice received
by the Corporation. If the dividend payment record date for the Class J
Preferred Stock and Class A Common Stock do not coincide, and the preceding
sentence does not operate to ensure that a holder of shares of Class J
Preferred Stock whose shares are converted into Class A Common Stock does not
receive dividends on both the shares of Class J Preferred Stock and the Class A
Common Stock into which such shares are converted for the same Dividend Period,
then notwithstanding anything herein to the contrary, it is the intent, and the
Transfer Agent is authorized to ensure, that no conversion after the earlier of
such record dates will be accepted until after the latter of such record dates.

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<PAGE> 176

(c) No fractional share of Class A Common Stock or scrip
representing fractions of a share of Class A Common Stock shall be issued upon
conversion of the shares of Class J Preferred Stock. Instead of any fractional
interest in a share of Class A Common Stock that would otherwise be deliverable
upon the conversion of shares of Class J Preferred Stock, the Corporation shall
pay to the holder of such share an amount in cash based upon the Current Market
Price of the Class A Common Stock on the Trading Day immediately preceding the
date of conversion. If more than one share shall be surrendered for conversion
at one time by the same holder, the number of full shares of Class A Common
Stock issuable upon conversion thereof shall be computed on the basis of the
aggregate number of shares of Class J Preferred Stock so surrendered.

7.2 MANDATORY CONVERSION.

(a) The Corporation shall have the right to require that all
or part of the issued and outstanding shares of Class J Preferred Stock be
converted into shares of Class A Common Stock under the following
circumstances:

(i) At any time on or prior to the fourth anniversary of
the Issue Date, in the event that the Internal Rate of Return exceeds 12.5%,
the Corporation shall have the right to require the issued and outstanding
shares of Class J Preferred Stock to be converted, in whole or in part, into
shares of Class A Common Stock as set forth in this Section 7.2.

(ii) At any time after the fourth anniversary of the
Issue Date, so long as the average of the daily Current Market Prices of the
issued and outstanding shares of Class A Common Stock during the five most
recent Trading Days is equal to or greater than $40, the Corporation shall have
the right to require the issued and outstanding shares of Class J Preferred
Stock to be converted, in whole or in part, into shares of Class A Common Stock
as set forth in this Section 7.2.

(b) Subject to and upon compliance with the provisions of
this Section 7, the Corporation shall have the right, under the circumstances
set forth in (a) (i) or (ii) above, to convert such shares, in whole or in
part, into the number of fully paid and non-assessable shares of authorized but
previously unissued shares of Class A Common Stock per each share of Class J
Preferred Stock obtained by dividing the Liquidation Preference (excluding any
accumulated accrued and unpaid dividends) per share of Class J Preferred Stock
by the Conversion Price (as in effect at the time and on the date provided for
in subparagraph (c)(v) of this Section 7.2).

(c) (i) In order to exercise the conversion right, the
Corporation shall, promptly upon the occurrence of an event described in (a)(i)
or (ii) above, and in no event later than the close of business on the next
succeeding business day, give notice of such conversion to each holder of
record of the shares to be converted. Such

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<PAGE> 177

notice shall be provided by facsimile or, if facsimile is not available, then
by first class mail, postage prepaid, at such holder's address as the same
appears on the stock records of the Corporation. Any notice which was
transmitted or mailed in the manner herein provided shall be conclusively
presumed to have been duly given on the date received by the holder. Each such
notice shall state, as appropriate: (1) the date of conversion, which date may
be any date within one business day following the date on which the notice is
transmitted or mailed; (2) the number of shares of Class J Preferred Stock to
be converted and, if fewer than all such shares held by such holder are to be
converted, the number of such shares to be converted; (3) the event which gave
rise to the conversion right; and (4) the then current Conversion Price.

(ii) Upon receiving such notice of conversion, each such
holder shall promptly surrender the certificates representing such shares of
Class J Preferred Stock as are being converted on the conversion date, duly
endorsed or assigned to the Corporation or in blank, at the office of the
Transfer Agent; provided, however, that the failure to so surrender any such
certificates shall not in any way affect the validity of the conversion of the
underlying shares of Class J Preferred Stock into shares of Class A Common
Stock. Unless the shares issuable on conversion are to be issued in the same
name as the name in which such shares of Class J Preferred Stock are
registered, each such share surrendered following conversion shall be
accompanied by instruments of transfer, in form satisfactory to the
Corporation, duly executed by the holder or such holder's duly authorized
attorney and an amount sufficient to pay any transfer or similar tax (or
evidence reasonably satisfactory to the Corporation demonstrating that such
taxes have been paid).

(iii) A holder of shares of Class J Preferred Stock
shall, as of the date of the conversion of such shares to shares of Class A
Common Stock, be entitled to receive cash payment in respect of any dividends
(whether or not earned or declared) that are accumulated, accrued and unpaid
thereon as of the time of such conversion, provided, however, that payment in
respect of any dividend on such shares that has been declared but for which the
Dividend Payment Date has not yet been reached shall be payable as of such
Dividend Payment Date. Except as provided above, the Corporation shall make no
payment or allowance for unpaid dividends, whether or not in arrears, on
converted shares.

(iv) As promptly as practicable after the surrender of
certificates for shares of Class J Preferred Stock as aforesaid, and in any
event no later than three business days after the date of such surrender, the
Corporation shall issue and shall deliver at such office to such holder, or
send on such holder's written order, a certificate or certificates for the
number of full shares of Class A Common Stock issuable upon the conversion of
such shares of Class J Preferred Stock in accordance with the provisions of
this Section 7.2, and any fractional interest in respect of a share of Class A
Common Stock arising upon such conversion shall be settled as provided in
paragraph (d) of this Section 7.2.

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(v) Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date identified as the
conversion date in the notice of conversion sent by the Corporation as
aforesaid, and the Person or Persons in whose name or names any certificate or
certificates for shares of Class A Common Stock shall be issuable upon such
conversion shall be deemed to have become the holder or holders of record of
the shares represented thereby at such time on such date and such conversion
shall be at the Conversion Price in effect at such time on such date unless the
stock transfer books of the Corporation shall be closed on that date, in which
event such Person or Persons shall be deemed to have become such holder or
holders of record at the close of business on the next succeeding day on which
such stock transfer books are open, but such conversion shall be at the
Conversion Price in effect on the date identified as the conversion date in the
notice of conversion sent by the Corporation as aforesaid. If the dividend
payment record dates for the Class J Preferred Stock and Class A Common Stock
do not coincide, and the preceding sentence does not operate to ensure that a
holder of shares of Class J Preferred Stock whose shares are converted into
Class A Common Stock does not receive dividends on both the shares of Class J
Preferred Stock and the Class A Common Stock into which such shares are
converted for the same Dividend Period, then notwithstanding anything herein to
the contrary, it is the intent, and the Transfer Agent is authorized to ensure,
that no conversion after the earlier of such record dates will be accepted
until after the latter of such record dates.

(d) No fractional share of Class A Common Stock or scrip
representing fractions of a share of Class A Common Stock shall be issued upon
conversion of the shares of Class J Preferred Stock. Instead of any fractional
interest in a share of Class A Common Stock that would otherwise be deliverable
upon the conversion of shares of Class J Preferred Stock, the Corporation shall
pay to the holder of such share an amount of cash based upon the Current Market
Price of the Class A Common Stock on the Trading Day immediately preceding the
date of conversion. If more than one of any holder's shares shall be converted
at one time, the number of full shares of Class A Common Stock issuable upon
conversion thereof shall be computed on the basis of the aggregate number of
shares of Class J Preferred Stock so surrendered.

7.3 ADJUSTMENTS TO CONVERSION PRICE

(a) The Conversion Price shall be adjusted from time to time
as follows:

(i) If the Corporation shall after the Issue Date (A) pay
a dividend or make a distribution on its capital stock in shares of Class A
Common Stock, (B) subdivide its outstanding Class A Common Stock into a greater
number of shares, (C) combine its outstanding Class A Common Stock into a
smaller number of shares or (D) issue any shares of capital stock by
reclassification of its outstanding Class A Common Stock, the Conversion Price
in effect at the opening of business on

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<PAGE> 179

the day following the date fixed for the determination of stockholders entitled
to receive such dividend or distribution or at the opening of business on the
day following the day on which such subdivision, combination or
reclassification becomes effective, as the case may be, shall be adjusted so
that the holder of any share of Class J Preferred Stock thereafter converted
shall be entitled to receive the number of shares of Class A Common Stock (or
fraction of a share of Class A Common Stock) that such holder would have owned
or have been entitled to receive after the happening of any of the events
described above had such share of Class J Preferred Stock been converted
immediately prior to the record date in the case of a dividend or distribution
or the effective date in the case of a subdivision, combination or
reclassification. An adjustment made pursuant to this paragraph (a)(i) of this
Section 7.3 shall become effective immediately after the opening of business on
the day next following the record date (except as provided in paragraph (e)
below) in the case of a dividend or distribution and shall become effective
immediately after the opening of business on the day next following the
effective date in the case of a subdivision, combination or reclassification.

(ii) If the Corporation shall, after the Issue Date,
issue rights, options or warrants to all holders of Class A Common Stock
entitling them (for a period expiring within 45 days after the record date
described below in this paragraph (a)(ii) of this Section 7.3) to subscribe for
or purchase Class A Common Stock at a price per share less than the Fair Market
Value per share of the Class A Common Stock on the record date for the
determination of stockholders entitled to receive such rights, options or
warrants, then the Conversion Price in effect at the opening of business on the
day next following such record date shall be adjusted to equal the price
determined by multiplying (A) the Conversion Price in effect immediately prior
to the opening of business on the day following the date fixed for such
determination by (B) a fraction, the numerator of which shall be the sum of (X)
the number of shares of Class A Common Stock outstanding on the close of
business on the date fixed for such determination and (Y) the number of shares
that could be purchased at such Fair Market Value from the aggregate proceeds
to the Corporation from the exercise of such rights, options or warrants for
Class A Common Stock, and the denominator of which shall be the sum of (XX) the
number of shares of Class A Common Stock outstanding on the close of business
on the date fixed for such determination and (YY) the number of additional
shares of Class A Common Stock offered for subscription or purchase pursuant to
such rights, options or warrants. Such adjustment shall become effective
immediately after the opening of business on the day next following such record
date (except as provided in paragraph (e) below). In determining whether any
rights, options or warrants entitle the holders of Class A Common Stock to
subscribe for or purchase Class A Common Stock at less than such Fair Market
Value, there shall be taken into account any consideration received by the
Corporation upon issuance and upon exercise of such rights, options or
warrants, the value of such consideration, if other than cash, to be determined
in good faith by the Board of Directors.

<PAGE> 180

(iii) If the Corporation shall after the Issue Date make
a distribution on its Class A Common Stock other than in cash or shares of
Class A Common Stock (including any distribution in securities (other than
rights, options or warrants referred to in paragraph (a)(ii) of this Section
7.3)) (each of the foregoing being referred to herein as a "distribution"),
then the Conversion Price in effect at the opening of business on the next day
following the record date for determination of stockholders entitled to receive
such distribution shall be adjusted to equal the price determined by
multiplying (A) the Conversion Price in effect immediately prior to the opening
of business on the day following the record date by (B) a fraction, the
numerator of which shall be the difference between (X) the number of shares of
Class A Common Stock outstanding on the close of business on the record date
and (Y) the number of shares determined by dividing (aa) the aggregate value of
the property being distributed by (bb) the Fair Market Value per share of Class
A Common Stock on the record date, and the denominator of which shall be the
number of shares of Class A Common Stock outstanding on the close of business
on the record date. Such adjustment shall become effective immediately after
the opening of business on the day next following such record date (except as
provided below). The value of the property being distributed shall be as
determined in good faith by the Board of Directors; provided, however, if the
property being distributed is a publicly traded security, its value shall be
calculated in accordance with the procedure for calculating the Fair Market
Value of a share of Class A Common Stock (calculated for a period of five
consecutive Trading Days commencing on the twentieth Trading Day after the
distribution). Neither the issuance by the Corporation of rights, options or
warrants to subscribe for or purchase securities of the Corporation nor the
exercise thereof shall be deemed a distribution under this paragraph.

(iv) No adjustment in the Conversion Price shall be
required unless such adjustment would require a cumulative increase or decrease
of at least 1% in such price: provided, however, that any adjustments that by
reason of this paragraph (a)(iv) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment until made; and
provided, further, that any adjustment shall be required and made in accordance
with the provisions of this Section 7.3 (other than this paragraph (a)(iv)) not
later than such time as may be required in order to preserve the tax-free
nature of a distribution to the holders of shares of Class A Common Stock.
Notwithstanding any other provisions of this Section 7, the Corporation shall
not be required to make any adjustment of the Conversion Price for the issuance
of (A) any shares of Class A Common Stock pursuant to any plan providing for
the reinvestment of dividends or interest payable on securities of the
Corporation and the investment of optional amounts in shares of Class A Common
Stock under such plan or (B) any options, rights or shares of Class A Common
Stock pursuant to any stock option, stock purchases or other stock-based plan
maintained by the Corporation. All calculations under this Section 7 shall be
made to the nearest cent ($.005 being rounded upward) or to the nearest
one-tenth of a share (with .05 of a share being rounded upward), as the case
may be. Anything in this paragraph (a) of this Section 7 to the contrary
notwithstanding, the Corporation

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shall be entitled, to the extent permitted by law, to make such reductions in
the Conversion Price, in addition to those required by this paragraph (a), as
it in its discretion shall determine to be advisable in order that any stock
dividends, subdivision of shares, reclassification or combination of shares,
distribution of rights or warrants to purchase stock or securities, or a
distribution of other assets (other than cash dividends) hereafter made by the
Corporation to its stockholders shall not be taxable, or if that is not
possible, to diminish any income taxes that are otherwise payable because of
such event.

(b) If the Corporation shall be a party to any transaction
(including with limitation a merger, consolidation, statutory share exchange,
sale of all or substantially all of the Corporation's assets or
recapitalization of the Class A Common Stock, but excluding any transaction as
to which paragraph (a)(i) of this Section 7.3 applies) (each of the foregoing
being referred to herein as a "Transaction"), in each case as a result of which
shares of Class A Common Stock shall be converted into the right to receive
stock, securities or other property (including cash or any combination
thereof), each share of Class J Preferred Stock which is not converted into the
right to receive stock, securities or other property in connection with such
Transaction shall thereupon be convertible into the kind and amount of shares
of stock, securities and other property (including cash or any combination
thereof) receivable upon such consummation by a holder of that number of shares
of Class A Common Stock into which one share of Class J Preferred Stock was
convertible immediately prior to such Transaction. The Corporation shall not be
a party to any Transaction unless the terms of such Transaction are consistent
with the provisions of this paragraph (b), and it shall not consent or agree to
the occurrence of any Transaction until the Corporation has entered into an
agreement with the successor or purchasing entity, as the case may be, for the
benefit of the holders of the Class J Preferred Stock that will contain
provisions enabling the holders of the Class J Preferred Stock that remain
outstanding after such Transaction to convert into the consideration received
by holders of Class A Common Stock at the Conversion Price in effect
immediately apply to successive Transactions:

(i) the Corporation shall declare a dividend (or any
other distribution) on the Class A Common Stock (other than cash dividends and
cash distributions); or

(ii) the Corporation shall authorize the granting to all
holders of the Class A Common Stock of rights or warrants to subscribe for or
purchase any shares of any class or series of capital stock or any other rights
or warrants; or

(iii) there shall be any reclassification of the
outstanding Class A Common Stock or any consolidation or merger to which the
Corporation is a party and for which approval of any stockholders of the
Corporation is required, or a statutory share exchange, or the sale or transfer
of all or substantially all of the assets of the Corporation as an entirety; or

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<PAGE> 182

(iv) there shall occur the voluntary or involuntary
liquidation, dissolution or winding up of the Corporation,

then the Corporation shall cause to be filed with the Transfer Agent and shall
cause to be mailed to each holder of shares of Class J Preferred Stock at such
holder's address as shown on the stock records of the Corporation, as promptly
as possible, a notice stating (A) the record date for the payment of such
dividend, distribution or rights or warrants, or, if a record date is not
established, the date as of which the holders of Class A Common Stock of record
to be entitled to such dividend, distribution or rights or warrants are to be
determined or (B) the date on which such reclassification, consolidation,
merger, statutory share exchange, sale, transfer, liquidation, dissolution or
winding up is expected to become effective, and the date as of which it is
expected that holders of Class A Common Stock of record shall be entitled to
exchange their shares of Class A Common Stock for securities or other property,
if any, deliverable upon such reclassification, consolidation, merger, statutory
share exchange, sale, transfer, liquidation, dissolution or winding up. Failure
to give or receive such notice or any defect therein shall not affect the
legality or validity of the proceedings described in this Section 7.

(d) Whenever the Conversion Price is adjusted as herein
provided, the Corporation shall promptly file with the Transfer Agent an
officer's certificate setting forth the Conversion Price after such adjustment
and setting forth a brief statement of the facts requiring such adjustment
which certificate shall be conclusive evidence of the correctness of such
adjustment absent manifest error. Promptly after delivery of such certificate,
the Corporation shall prepare a notice of such adjustment of the Conversion
Price setting forth the adjusted Conversion Price and the effective date such
adjustment becomes effective and shall mail such notice of such adjustment of
the Conversion Price to each holder of shares of Class J Preferred Stock at
such holder's address as shown on the stock record of the Corporation.

(e) In any case in which paragraph (a) of this Section 7.3
provides that an adjustment shall become effective on the day next following
the record date for an event, the Corporation may defer until the occurrence of
such event (A) issuing to the holder of any share of Class J Preferred Stock
converted after such record date and before the occurrence of such event the
additional Class A Common Stock issuable upon such conversion by reason of the
adjustment required by such event over and above the Class A Common Stock
issuable upon such conversion before giving effect to such adjustment and (B)
paying to such holder any amount of cash in lieu of any fraction pursuant to
Section 7.2(d) or Section 7.1(c).

(f) There shall be no adjustment of the Conversion Price in
case of the issuance of any capital stock of the Corporation except as
specifically set forth in

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<PAGE> 183

this Section 7. In addition, notwithstanding any other provision contained
in this Section 7, there shall be no adjustment of the Conversion Price upon
the payment of any cash dividends or distributions on any capital stock of the
Corporation, including, without limitation, the Special Dividend (as such term
is defined in the Class E Articles Supplementary) on the Corporation's Class E
Preferred Stock or upon the automatic conversion of the shares of such
Preferred Stock into shares of Class A Common Stock, as provided in the Class E
Articles Supplementary.

(g) If the Corporation shall take any action affecting the
Class A Common Stock, other than action described in this Section 7, that in
the opinion of the Board of Directors would materially adversely affect the
conversion rights of the holders of Class J Preferred Stock, the Conversion
Price for the Class J Preferred Stock may be adjusted, to the extent permitted
by law in such manner, if any, and at such time as the Board of Directors, in
its sole discretion, may determine to be equitable under the circumstances.

(h) The Corporation shall at all times reserve and keep
available, free from preemptive rights, out of the aggregate of its authorized
but unissued Class A Common Stock solely for the purpose of effecting
conversion of the Class J Preferred Stock, the full number of shares of Class A
Common Stock deliverable upon the conversion of all outstanding shares of Class
J Preferred Stock not theretofore converted into Class A Common Stock. For
purposes of this paragraph (h), the number of shares of Class A Common Stock
that shall be deliverable upon the conversion of all outstanding shares of
Class J Preferred Stock shall be computed as if at the time of computation all
such outstanding shares were held by a single holder (and without regard to the
Ownership Limit).

The Corporation covenants that any shares of Class A Common Stock
issued upon conversion of the shares of Class J Preferred Stock shall be
validly issued, fully paid and nonassessable.

The Corporation shall use its best efforts to list the shares of Class
A Common Stock required to be delivered upon conversion of the shares of Class
J Preferred Stock, prior to such delivery, upon each national securities
exchange, if any, upon which the outstanding shares of Class A Common Stock are
listed at the time of such delivery.

(i) The Corporation will pay any and all documentary stamp or
similar issue or transfer taxes payable in respect of the issue or delivery of
shares of Class A Common Stock or other securities or property on conversion of
shares of Class J Preferred Stock pursuant hereto; provided, however, that the
Corporation shall not be required to pay any tax that may be payable in respect
of any transfer involved in the issue or delivery of shares of Class A Common
Stock or other securities or property in a name other than that of the holder
of the shares of Class J Preferred Stock to be converted, and no such issue or
delivery shall be made unless

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<PAGE> 184

and until the Person requesting such issue or delivery has paid to the
Corporation the amount of any such tax or established, to the reasonable
satisfaction of the Corporation, that such tax has been paid.

(j) In addition to any other adjustment required hereby, to
the extent permitted by law, the Corporation from time to time may decrease the
Conversion Price by any amount, permanently or for a period of at least twenty
Business Days, if the decrease is irrevocable during the period.

(k) Notwithstanding anything to the contrary contained in
this Section 7, conversion of Class J Preferred Stock pursuant to this Section
7 shall be permitted only to the extent that such conversion would not result
in a violation of the Ownership Restrictions (as defined in the Charter), after
taking into account any waiver of such limitation granted to any holder of the
shares of Class J Preferred Stock.

8. RANKING.

Any class or series of capital stock of the Corporation shall be
deemed to rank:

(a) prior or senior to the Class J Preferred Stock, as to the
payment of dividends and as to distribution of assets upon liquidation,
dissolution or winding up, if the holders of such class or series shall be
entitled to the receipt of dividends and of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in preference or
priority to the holders of Class J Preferred Stock ("Senior Stock");

(b) on a parity with the Class J Preferred Stock, as to the
payment of dividends and as to distribution of assets upon liquidation,
dissolution or winding up, whether or not the dividend rates, dividend payment
dates or liquidation prices per share thereof be different from those of the
Class J Preferred Stock, if (i) such capital stock is Class B Cumulative
Convertible Preferred Stock, Class C Cumulative Preferred Stock, Class D
Cumulative Preferred Stock, Class G Cumulative Preferred Stock, or Class H
Cumulative Preferred Stock of the Corporation, or (ii) the holders of such
class of stock or series and the Class J Preferred Stock shall be entitled to
the receipt of dividends and of amounts distributable upon liquidation,
dissolution or winding up in proportion to their respective amounts of accrued
and unpaid dividends per share or liquidation preferences, without preference
or priority of one over the other (the capital stock referred to in clauses (i)
and (ii) of this paragraph being hereinafter referred to, collectively, as
"Parity Stock"); and

(c) junior to the Class J Preferred Stock, as to the payment
of dividends and as to the distribution of assets upon liquidation, dissolution
or winding up, if (i) such capital stock or series shall be Common Stock, (ii)
such capital stock is Class E Cumulative Convertible Preferred Stock or (iii)
the holders of Class J

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<PAGE> 185

Preferred Stock shall be entitled to receipt of dividends or of amounts
distributable upon liquidation, dissolution or winding up, as the case may be,
in preference or priority to the holders of shares of such class or series (the
capital stock referred to in clauses (i), (ii) and (iii) of this paragraph
being hereinafter referred to, collectively, as "Junior Stock").

9. VOTING.

(a) If and whenever six quarterly dividends (whether or not
consecutive) payable on the Class J Preferred Stock or any series or class of
Parity Stock shall be in arrears (which shall, with respect to any such
quarterly dividend, mean that any such dividend has not been paid in full),
whether or not earned or declared, the number of directors then constituting
the Board of Directors shall be increased by two (if not already increased by
reason of similar types of provisions with respect to shares of Parity Stock of
any other class or series which is entitled to similar voting rights (the
"Voting Preferred Stock")) and the holders of shares of Class J Preferred
Stock, together with the holders of shares of all other Voting Preferred Stock
then entitled to exercise similar voting rights, voting as a single class
regardless of series, shall be entitled to elect the two additional directors
to serve on the Board of Directors at any annual meeting of stockholders or
special meeting held in place thereof, or at a special meeting of the holders
of the Class J Preferred Stock and the Voting Preferred Stock called as
hereinafter provided. Whenever all arrears in dividends on the Class J
Preferred Stock and the Voting Preferred Stock then outstanding shall have been
paid and dividends thereon for the current quarterly dividend period shall have
been declared and paid, or declared and set apart for payment, then the right
of the holders of the Class J Preferred Stock and the Voting Preferred Stock to
elect such additional two directors shall cease (but subject always to the same
provision for the vesting of such voting rights in the case of any similar
future arrearages), and the terms of office of all persons elected as directors
by the holders of the Class J Preferred Stock and the Voting Preferred Stock
shall forthwith terminate and the number of directors constituting the Board of
Directors shall be reduced accordingly. At any time after such voting power
shall have been so vested in the holders of Class J Preferred Stock and the
Voting Preferred Stock, if applicable, the Secretary of the Corporation may,
and upon the written request of any holder of Class J Preferred Stock
(addressed to the Secretary at the principal office of the Corporation) shall,
call a special meeting of the holders of the Class J Preferred Stock and of the
Voting Preferred Stock for the election of the two directors to be elected by
them as herein provided, such call to be made by notice similar to that
provided in the Bylaws of the Corporation for a special meeting of the
stockholders or as required by law. If any such special meeting required to be
called as above provided shall not be called by the Secretary within 20 days
after receipt of any such request, then any holder of Class J Preferred Stock
may call such meeting, upon the notice above provided, and for that purpose
shall have access to the stock books of the Corporation. The directors elected
at any such special meeting shall hold office until the next annual meeting of
the stockholders or special meeting held in lieu

23
<PAGE> 186

thereof if such office shall not have previously terminated as above provided.
If any vacancy shall occur among the directors elected by the holders of the
Class J Preferred Stock and the Voting Preferred Stock, a successor shall be
elected by the Board of Directors, upon the nomination of the then-remaining
director elected by the holders of the Class J Preferred Stock and the Voting
Preferred Stock or the successor of such remaining director, to serve until the
next annual meeting of the stockholders or special meeting held in place
thereof if such office shall not have previously terminated as provided above.

(b) So long as any shares of Class J Preferred Stock are
outstand ing, in addition to any other vote or consent of stockholders required
by law or by the Charter of the Corporation, the affirmative vote of at least
66-2/3% of the votes entitled to be cast by the holders of the Class J
Preferred Stock voting as a single class with the holders of all other classes
or series of Parity Stock entitled to vote on such matters, given in person or
by proxy, either in writing without a meeting or by vote at any meeting called
for the purpose, shall be necessary for effecting or validating:

(i) Any amendment, alteration or repeal of any of the
provisions of, or the addition of any provision to, these Articles
Supplementary, the Charter or the By-Laws of the Corporation that materially
adversely affects the voting powers, rights or preferences of the holders of
the Class J Preferred Stock; provided, however, that the amendment of or
supplement to the provisions of the Charter so as to authorize or create, or to
increase or decrease the authorized amount of, or to issue any Junior Stock,
Class J Preferred Stock or any shares of any class of Parity Stock shall not be
deemed to materially adversely affect the voting powers, rights or preferences
of the holders of Class J Preferred Stock; or

For purposes of the foregoing provisions and all other voting rights
under these Articles Supplementary, each share of Class J Preferred Stock shall
have one (1) vote per share, except that when any other class or series of
preferred stock of the Corporation shall have the right to vote with the Class
J Preferred Stock as a single class on any matter, then the Class J Preferred
Stock and such other class or series shall have with respect to such matters
one quarter of one (.25) vote per $25 of stated liquidation preference. Except
as otherwise required by applicable law or as set forth herein or in the
Charter, the Class J Preferred Stock shall not have any relative,
participating, optional or other special voting rights and powers other than as
set forth herein, and the consent of the holders thereof shall not be required
for the taking of any corporate action.

24
<PAGE> 187

10. RECORD HOLDERS.

The Corporation and the Transfer Agent may deem and treat the record
holder of any share of Class J Preferred Stock as the true and lawful owner
thereof for all purposes, and neither the Corporation nor the Transfer Agent
shall be affected by any notice to the contrary.

11. OWNERSHIP AND TRANSFERS.

11.1 RESTRICTIONS ON OWNERSHIP AND TRANSFERS.

(a) Limitation on Beneficial Ownership. Except as
provided in Section 11.8, from and after the Issue Date, no Person (other than
the Initial Holder) shall Beneficially Own shares of Class J Preferred Stock in
excess of the Ownership Limit and the Initial Holder shall not Beneficially Own
shares of Class J Preferred Stock in excess of the Initial Holder Limit.

(b) Transfers in Excess of Ownership Limit. Except as
provided in Section 11.8, from and after the Issue Date (and subject to Section
11.12), any Transfer (whether or not such Transfer is the result of
transactions entered into through the facilities of the NYSE or other
securities exchange or an automated inter-dealer quotation system) that, if
effective, would result in any Person (other than the Initial Holder)
Beneficially Owning shares of Class J Preferred Stock in excess of the
Ownership Limit shall be void ab initio as to the Transfer of such shares of
Class J Preferred Stock that would be otherwise Beneficially Owned by such
Person in excess of the Ownership Limit, and the intended transferee shall
acquire no rights in such shares of Class J Preferred Stock.

(c) Transfers in Excess of Initial Holder Limit. Except
as provided in Section 11.8, from and after the Issue Date (and subject to
Section 11.12), any Transfer (whether or not such Transfer is the result of
transactions entered into through the facilities of the NYSE or other
securities exchange or an automated inter-dealer quotation system) that, if
effective, would result in the Initial Holder Beneficially Owning shares of
Class J Preferred Stock in excess of the Initial Holder Limit shall be void ab
initio as to the Transfer of such shares of Class J Preferred Stock that would
be otherwise Beneficially Owned by the Initial Holder in excess of the Initial
Holder limit, and the Initial Holder shall acquire no rights in such shares of
Class J Preferred Stock.

(d) Transfers Resulting in "Closely Held" Status. From
and after the Issue Date, any Transfer that, if effective would result in the
Corporation being "closely held" within the meaning of Section 856(h) of the
Code, or would otherwise result in the Corporation failing to qualify as a REIT
(including, without limitation, a Transfer or other event that would result in
the Corporation owning (directly or constructively) an interest in a tenant
that is described in Section

25
<PAGE> 188

856(d)(2)(B) of the Code if the income derived by the Corporation from such
tenant would cause the Corporation to fail to satisfy any of the gross income
requirements of Section 856(c) of the Code) shall be void ab initio as to the
Transfer of shares of Class J Preferred Stock that would cause the Corporation
(i) to be "closely held" within the meaning of Section 856(h) of the Code or
(ii) otherwise fail to qualify as a REIT, as the case may be, and the intended
transferee shall acquire no rights in such shares of Class J Preferred Stock.

(e) Severability on Void Transactions. A Transfer of a
share of Class J Preferred Stock that is null and void under Sections 11.1(b),
(c) or (d) of this Article because it would, if effective, result in (i) the
ownership of Class J Preferred Stock in excess of the Initial Holder Limit or
the Ownership Limit, (ii) the Corporation being "closely held" within the
meaning of Section 856(h) of the Code or (iii) the Corporation otherwise
failing to qualify as a REIT, shall not adversely affect the validity of the
Transfer of any other share of Class J Preferred Stock in the same or any other
related transaction.

11.2 REMEDIES FOR BREACH. If the Board of Directors or a
committee thereof shall at any time determine in good faith that a Transfer or
other event has taken place in violation of Section 11.1 of this Article or
that a Person intends to acquire or has attempted to acquire Beneficial
Ownership of any shares of Class J Preferred Stock in violation of Section 11.1
of this Article (whether or not such violation is intended), the Board of
Directors or a committee thereof shall be empowered to take any action as it
deems advisable to refuse to give effect to or to prevent such Transfer or
other event, including, but not limited to, refusing to give effect to such
Transfer or other event on the books of the Corporation, causing the
Corporation to redeem such shares at the then Current Market Price and upon
such terms and conditions as may be specified by the Board of Directors in its
sole discretion (including, but not limited to, by means of the issuance of
long-term indebtedness for the purpose of such redemption), demanding the
repayment of any distributions received in respect of shares of Class J
Preferred Stock acquired in violation of Section 11.1 of this Article or
instituting proceedings to enjoin such Transfer or to rescind such Transfer or
attempted Transfer; provided, however, that any Transfers or attempted
Transfers (or, in the case of events other than a Transfer, Beneficial
Ownership) in violation of Section 11.1 of this Article, regardless of any
action (or non-action) by the Board of Directors or such committee, (a) shall
be void ab initio or (b) shall automatically result in the transfer described
in Section 11.3 of this Article; provided, further, that the provisions of this
Section 11.2 shall be subject to the provisions of Section 11.12 of this
Article; provided, further, that neither the Board of Directors nor any
committee thereof may exercise such authority in a manner that interferes with
any ownership or transfer of Class J Preferred Stock that is expressly
authorized pursuant to Section 11.8(c) of this Article.

26
<PAGE> 189

11.3 TRANSFER IN TRUST.

(a) Establishment of Trust. If, notwithstanding the
other provisions contained in this Article, at any time after the Issue Date
there is a purported Transfer (an "Excess Transfer") (whether or not such
Transfer is the result of transactions entered into through the facilities of
the NYSE or other securities exchange or an automated inter-dealer quotation
system) or other change in the capital structure of the Corporation (including,
but not limited to, any redemption of Equity Stock) or other event (including,
but not limited to, any acquisition of any share of Equity Stock) such that (a)
any Person (other than the Initial Holder) would Beneficially Own shares of
Class J Preferred Stock in excess of the Ownership Limit, or (b) the Initial
Holder would Beneficially Own shares of Class J Preferred Stock in excess of
the Initial Holder Limit (in either such event, the Person or Initial Holder
that would Beneficially Own shares of Class J Preferred Stock in excess of the
Ownership Limit or the Initial Holder Limit, respectively, is referred to as a
"Prohibited Transferee"), then, except as otherwise provided in Section 11.8 of
this Article, such shares of Class J Preferred Stock in excess of the Ownership
Limit or the Initial Holder Limit, as the case may be, (rounded up to the
nearest whole share) shall be automatically transferred to a Trustee in his
capacity as trustee of a Trust for the exclusive benefit of one or more
Charitable Beneficiaries. Such transfer to the Trustee shall be deemed to be
effective as of the close of business on the Business Day prior to the Excess
Transfer, change in capital structure or another event giving rise to a
potential violation of the Ownership Limit or the Initial Holder Limit.

(b) Appointment of Trustee. The Trustee shall be
appointed by the Corporation and shall be a Person unaffiliated with either the
Corporation or any Prohibited Transferee. The Trustee may be an individual or a
bank or trust company duly licensed to conduct a trust business.

(c) Status of Shares Held by the Trustee. Shares of
Class J Preferred Stock held by the Trustee shall be issued and outstanding
shares of capital stock of the Corporation. Except to the extent provided in
Section 11.3(e), the Prohibited Transferee shall have no rights in the Class J
Preferred Stock held by the Trustee, and the Prohibited Transferee shall not
benefit economically from ownership of any shares held in trust by the Trustee,
shall have no rights to dividends and shall not possess any rights to vote or
other rights attributable to the shares held in the Trust.

(d) Dividend and Voting Rights. The Trustee shall have
all voting rights and rights to dividends with respect to shares of Class J
Preferred Stock held in the Trust, which rights shall be exercised for the
benefit of the Charitable Beneficiary. Any dividend or distribution paid prior
to the discovery by the Corporation that the shares of Class J Preferred Stock
have been transferred to the Trustee shall be repaid to the Corporation upon
demand, and any dividend or distribution declared but unpaid shall be rescinded
as void ab initio with respect to such shares of Class J Preferred Stock. Any
dividends or distributions so disgorged or rescinded shall be paid over to the
Trustee and held in trust for the Charitable

27
<PAGE> 190

Beneficiary. Any vote cast by a Prohibited Transferee prior to the discovery by
the Corporation that the shares of Class J Preferred Stock have been
transferred to the Trustee will be rescinded as void ab initio and shall be
recast in accordance with the desires of the Trustee acting for the benefit of
the Charitable Beneficiary. The owner of the shares at the time of the Excess
Transfer, change in capital structure or other event giving rise to a potential
violation of the Ownership Limit or the Initial Holder Limit shall be deemed to
have given an irrevocable proxy to the Trustee to vote the shares of Class J
Preferred Stock for the benefit of the Charitable Beneficiary.

(e) Restrictions on Transfer. The Trustee of the Trust
may sell the shares held in the Trust to a Person, designated by the Trustee,
whose ownership of the shares will not violate the Ownership Restrictions. If
such a sale is made, the interest of the Charitable Beneficiary shall terminate
and proceeds of the sale shall be payable to the Prohibited Transferee and to
the Charitable Beneficiary as provided in this Section 11.3(e). The Prohibited
Transferee shall receive the lesser of (1) the price paid by the Prohibited
Transferee for the shares or, if the Prohibited Transferee did not give value
for the shares (through a gift, devise or other transaction), the Market Price
of the shares on the day of the event causing the shares to be held in the
Trust and (2) the price per share received by the Trustee from the sale or
other disposition of the shares held in the Trust. Any proceeds in excess of
the amount payable to the Prohibited Transferee shall be payable to the
Charitable Beneficiary. If any of the transfer restrictions set forth in this
Section 11.3(e) or any application thereof is determined in a final judgment to
be void, invalid or unenforceable by any court having jurisdiction over the
issue, the Prohibited Transferee may be deemed, at the option of the
Corporation, to have acted as the agent of the Corporation in acquiring the
Class J Preferred Stock as to which such restrictions would, by their terms,
apply, and to hold such Class J Preferred Stock on behalf of the Corporation.

(f) Purchase Right in Stock Transferred to the Trustee.
Shares of Class J Preferred Stock transferred to the Trustee shall be deemed to
have been offered for sale to the Corporation, or its designee, at a price per
share equal to the lesser of (i) the price per share in the transaction that
resulted in such transfer to the Trust (or, in the case of a devise or gift,
the Market Price at the time of such devise or gift) and (ii) the Market Price
on the date the Corporation, or its designee, accepts such offer. The
Corporation shall have the right to accept such offer for a period of 90 days
after the later of (i) the date of the Excess Transfer or other event resulting
in a transfer to the Trust and (ii) the date that the Board of Directors
determines in good faith that an Excess Transfer or other event occurred.

(g) Designation of Charitable Beneficiaries. By written
notice to the Trustee, the Corporation shall designate one or more nonprofit
organizations to be the Charitable Beneficiary of the interest in the Trust
relating to such Prohibited Transferee if (i) the shares of Class J Preferred
Stock held in the Trust would not violate the Ownership Restrictions in the
hands of such Charitable Beneficiary and (ii)

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<PAGE> 191

each Charitable Beneficiary is an organization described in Sections
170(b)(1)(A), 170(c)(2) and 501(c)(3) of the Code.

11.4 NOTICE OF RESTRICTED TRANSFER. Any Person that acquires
or attempts to acquire shares of Class J Preferred Stock in violation of
Section 11.1 of this Article, or any Person that is a Prohibited Transferee
such that stock is transferred to the Trustee under Section 11.3 of this
Article, shall immediately give written notice to the Corporation of such event
and shall provide to the Corporation such other information as the Corporation
may request in order to determine the effect, if any, of such Transfer or
attempted Transfer or other event on the Corporation's status as a REIT.
Failure to give such notice shall not limit the rights and remedies of the
Board of Directors provided herein in any way.

11.5 OWNERS REQUIRED TO PROVIDE INFORMATION. From and after
the Issue Date certain record and Beneficial Owners and transferees of shares
of Class J Preferred Stock will be required to provide certain information as
set out below.

(a) Annual Disclosure. Every record and Beneficial Owner
of more than 5% (or such other percentage between 0.5% and 5%, as provided in
the applicable regulations adopted under the Code) of the number of Outstanding
shares of Class J Preferred Stock shall, within 30 days after January 1 of each
year, give written notice to the Corporation stating the name and address of
such record or Beneficial Owner, the number of shares of Class J Preferred
Stock Beneficially Owned, and a full description of how such shares are held.
Each such record or Beneficial Owner of Class J Preferred Stock shall, upon
demand by the Corporation, disclose to the Corporation in writing such
additional information with respect to the Beneficial Ownership of the Class J
Preferred Stock as the Board of Directors, in its sole discretion, deems
appropriate or necessary to (i) comply with the provisions of the Code
regarding the qualification of the Corporation as a REIT under the Code and
(ii) ensure compliance with the Ownership Limit or the Initial Holder Limit, as
applicable. Each stockholder of record, including without limitation any Person
that holds shares of Class J Preferred Stock on behalf of a Beneficial Owner,
shall take all reasonable steps to obtain the written notice described in this
Section 11.5 from the Beneficial Owner.

(b) Disclosure at the Request of the Corporation. Any
Person that is a Beneficial Owner of shares of Class J Preferred Stock and any
Person (including the stockholder of record) that is holding shares of Class J
Preferred Stock for a Beneficial Owner, and any proposed transferee of shares,
shall provide such information as the Corporation, in its sole discretion, may
request in order to determine the Corporation's status as a REIT, to comply
with the requirements of any taxing authority or other governmental agency, to
determine any such compliance or to ensure compliance with the Ownership Limit
and the Initial Holder Limit, and shall provide a statement or affidavit to the
Corporation setting forth the number of shares of Class J Preferred Stock
already Beneficially Owned by such stockholder or

29
<PAGE> 192

proposed transferee and any related persons specified, which statement or
affidavit shall be in the form prescribed by the Corporation for that purpose.

11.6 REMEDIES NOT LIMITED. Nothing contained in this Article
shall limit the authority of the Board of Directors to take such other action
as it deems necessary or advisable (subject to the provisions of Section 11.12
of this Article) (i) to protect the Corporation and the interests of its
stockholders in the preservation of the Corporation's status as a REIT and (ii)
to insure compliance with the Ownership Limit and the Initial Holder Limit.

11.7 AMBIGUITY. In the case of an ambiguity in the
application of any of the provisions of Section 11 of this Article, or in the
case of an ambiguity in any definition contained in Section 11 of this Article,
the Board of Directors shall have the power to determine the application of the
provisions of this Article with respect to any situation based on its
reasonable belief, understanding or knowledge of the circumstances.

11.8 EXCEPTIONS. The following exceptions shall apply or may
be established with respect to the limitations of Section 11.1 of this Article.

(a) Waiver of Ownership Limit. The Board of Directors,
upon receipt of a ruling from the Internal Revenue Service or an opinion of tax
counsel or other evidence or undertaking acceptable to it, may, but shall not
be required to, waive the application, in whole or in part, of the Ownership
Limit to a Person subject to the Ownership Limit, if such person is not an
individual for purposes of Section 542(a) of the Code and is a corporation,
partnership, estate or trust. In connection with any such exemption, the Board
of Directors may require such representations and undertakings from such Person
and may impose such other conditions as the Board of Directors deems necessary,
in its sole discretion.

(b) Pledge by Initial Holder. Notwithstanding any other
provision of this Article, the pledge by the Initial Holder of all or any
portion of the Class J Preferred Stock directly owned at any time or from time
to time shall not constitute a violation of Section 11.1 of this Article and
the pledgee shall not be subject to the Ownership Limit with respect to the
Class J Preferred Stock so pledged to it either as a result of the pledge or
upon foreclosure.

(c) Underwriters. For a period of 270 days (or such
longer period of time as any underwriter described below shall hold an unsold
allotment of Class J Preferred Stock) following the purchase of Class J
Preferred Stock by an underwriter that (i) is a corporation, partnership or
other legal entity and (ii) participates in an offering of the Class J
Preferred Stock, such underwriter shall not be subject to the Ownership Limit
with respect to the Class J Preferred Stock purchased by it as a part of or in
connection with such offering and with respect to any Class J Preferred Stock
purchased in connection with market making activities.

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<PAGE> 193

11.9 LEGEND. Each certificate for Class J Preferred Stock
shall bear substantially the following legend:

"The shares of Class J Cumulative Convertible Preferred
Stock represented by this certificate are subject to restrictions on
transfer. No person may Beneficially Own shares of Class J Cumulative
Convertible Preferred Stock in excess of the Ownership Restrictions,
as applicable, with certain further restrictions and exceptions set
forth in the Charter (including the Articles Supplementary setting
forth the terms of the Class J Cumulative Convertible Preferred
Stock). Any Person that attempts to Beneficially Own shares of Class J
Cumulative Convertible Preferred Stock in excess of the applicable
limitation must immediately notify the Corporation. All capitalized
terms in this legend have the meanings ascribed to such terms in the
Charter (including the Articles Supplementary setting forth the terms
of the Class J Cumulative Convertible Preferred Stock), as the same
may be amended from time to time, a copy of which, including the
restrictions on transfer, will be sent without charge to each
stockholder that so requests. If the restrictions on transfer are
violated (i) the transfer of the shares of Class J Cumulative
Convertible Preferred Stock represented hereby will be void in
accordance with the Charter (including the Articles Supplementary
setting forth the terms of the Class J Cumulative Convertible
Preferred Stock) or (ii) the shares of Class J Cumulative Convertible
Preferred Stock represented hereby will automatically be transferred
to a Trustee of a Trust for the benefit of one or more Charitable
Beneficiaries."

11.10 SEVERABILITY. If any provision of this Article or any
application of any such provision is determined in a final and unappealable
judgment to be void, invalid or unenforceable by any Federal or state court
having jurisdiction over the issues, the validity and enforceability of the
remaining provisions shall not be affected and other applications of such
provision shall be affected only to the extent necessary to comply with the
determination of such court.

11.11 BOARD OF DIRECTORS DISCRETION. Anything in this Article
to the contrary notwithstanding, the Board of Directors shall be entitled to
take or omit to take such actions as it in its discretion shall determine to be
advisable in order that the Corporation maintain its status as and continue to
qualify as a REIT, including, but not limited to, reducing the Ownership Limit
and the Initial Holder Limit in the event of a change in law.

11.12 SETTLEMENT. Nothing in this Section 11 of this Article
shall be interpreted to preclude the settlement of any transaction entered into
through the facilities of the NYSE or other securities exchange or an automated
inter-dealer quotation system.

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<PAGE> 194

FOURTH: The terms of the Class J Cumulative Convertible Preferred
Stock set forth in Article Third hereof shall become Article XX of the Charter.

32
<PAGE> 195

IN WITNESS WHEREOF, the Corporation has caused these presents to be
signed in its name and on its behalf by its Senior Vice President and Chief
Financial Officer and witnessed by its Assistant Secretary on November 6, 1998.

WITNESS: APARTMENT INVESTMENT AND
MANAGEMENT COMPANY

/s/ LUCY CORDOVA /s/ TROY D. BUTTS
- ------------------------- ---------------------------------------------

Lucy Cordova Troy D. Butts
Assistant Secretary Senior Vice President and
Chief Financial Officer

THE UNDERSIGNED, Senior Vice President and Chief Financial Officer of
APARTMENT INVESTMENT AND MANAGEMENT COMPANY, who executed on behalf of the
Corporation the Articles Supplementary of which this Certificate is made a
part, hereby acknowledges in the name and on behalf of said Corporation the
foregoing Articles Supplementary to be the corporate act of said Corporation
and hereby certifies that the matters and facts set forth herein with respect
to the authorization and approval thereof are true in all material respects
under the penalties of perjury.

/s/ TROY D. BUTTS
---------------------------------------------
Troy D. Butts
Senior Vice President and
Chief Financial Officer

<PAGE> 196

CERTIFICATE OF CORRECTION
to
ARTICLES OF AMENDMENT AND RESTATEMENT
of
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
(a Maryland corporation)

APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation
(the "Corporation"), having its principal office in Baltimore City, Maryland,
hereby certifies to the State Department of Assessments and Taxation of
Maryland that:

FIRST: Articles of Amendment and Restatement, dated July 13, 1994, of
the Corporation were filed with the State Department of Assessments and
Taxation of Maryland on July 15, 1994, at 3:03 p.m. (as corrected by the
Certificate of Correction to Articles of Amendment and Restatement of the
Corporation, dated November 6, 1997 and filed with the State Department of
Assessment and Taxation of Maryland on November 6, 1997) and said Articles of
Amendment and Restatement require correction as permitted by Section 1-207 of
the Corporations and Associations Article of the Annotated Code of Maryland.

SECOND: Section 3.4.9 of ARTICLE IV of the Articles of Amendment and
Restatement as previously filed and to be corrected hereby reads as follows:

3.4.9 Legend. Each certificate for Class A Common Stock shall
bear the following legend:

"The shares of Class A Common Stock represented by this
certificate are subject to restrictions on transfer. No person may Beneficially
Own shares of Class A Common Stock in excess of the Ownership Restrictions, as
applicable, with certain further restrictions and exceptions set forth in the
Corporation's Amended and Restated Certificate of Incorporation
("Certificate"). Any Person that attempts to Beneficially Own shares of Class A
Common Stock in excess of the applicable limitation must immediately notify the
Corporation. All capitalized terms in this legend have the meanings ascribed to
such terms in the Corporation's Certificate, as the same may be amended from
time to time, a copy of which, including the restrictions on transfer, will be
sent without charge to each shareholder that so requests. If the restrictions
on transfer are violated, the shares of Class A Common Stock represented hereby
will be either (i) void in accordance with the Certificate or (ii)
automatically transferred to a Trustee of a Trust for the benefit of one or
more Charitable Beneficiaries."

<PAGE> 197

THIRD: Section 3.4.9 of ARTICLE IV of the Articles of Amendment and
Restatement as corrected hereby is as follows:

3.4.9 Legend. Each certificate for Class A Common Stock shall
bear the following legend:

"The shares of Class A Common Stock represented by this
certificate are subject to restrictions on transfer. No person may Beneficially
Own shares of Class A Common Stock in excess of the Ownership Restrictions, as
applicable, with certain further restrictions and exceptions set forth in the
Charter. Any Person that attempts to Beneficially Own shares of Class A Common
Stock in excess of the applicable limitation must immediately notify the
Corporation. All capitalized terms in this legend have the meanings ascribed to
such terms in the Charter, as the same may be amended from time to time, a copy
of which, including the restrictions on transfer, will be sent without charge
to each stockholder that so requests. If the restrictions on transfer are
violated, (i) the transfer of the shares of Class A Common Stock represented
hereby will be void in accordance with the Charter or (ii) the shares of Class
A Common Stock represented hereby will automatically be transferred to a
Trustee of a Trust for the benefit of one or more Charitable Beneficiaries."

FOURTH: The inaccuracy or defect in the legend contained in Section
3.4.9 of ARTICLE IV of the Articles of Amendment and Restatement as previously
filed is that the legend contains an inaccurate description of the effects of
an improper transfer as set forth elsewhere in the Charter.

<PAGE> 198

IN WITNESS WHEREOF, Apartment Investment and Management Company has
caused this Certificate of Correction to be signed in its name and on its
behalf by its Vice Chairman and President and witnessed by its Secretary on
October 21, 1998.

WITNESS: APARTMENT INVESTMENT AND
MANAGEMENT COMPANY

/s/ JOEL F. BONDER By: /s/ PETER K. KOMPANIEZ
- ------------------------------- -----------------------------
Joel F. Bonder, Peter K. Kompaniez,
Secretary Vice Chairman and President

THE UNDERSIGNED, Vice Chairman and President of APARTMENT INVESTMENT
AND MANAGEMENT COMPANY, with respect to the foregoing Certificate of Correction
of which this certificate is made a part, hereby acknowledges, in the name and
on behalf of said Corporation, the foregoing Certificate of Correction to be
the act of said Corporation and further certifies that, to the best of his
knowledge, information and belief, the matters and facts set forth therein with
respect to the authorization and approval thereof are true in all material
respects, under the penalties of perjury.

By: /s/ PETER K. KOMPANIEZ
-------------------------------
Peter K. Kompaniez,
Vice Chairman and President

<PAGE> 199
CERTIFICATE OF CORRECTION
to
ARTICLES SUPPLEMENTARY
Class C Cumulative Preferred Stock
(Par Value $.01 Per Share)
of
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
(a Maryland corporation)

APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation
(the "Corporation"), having its principal office in Baltimore City, Maryland,
hereby certifies to the State Department of Assessments and Taxation of
Maryland that:

FIRST: Articles Supplementary, dated December 22, 1997, of the
Corporation were filed with the State Department of Assessments and Taxation of
Maryland on December 22, 1997, at 1:38 p.m. (as corrected by the Certificate of
Correction to Articles Supplementary of the Corporation, dated February 17,
1998 and filed with the State Department of Assessments and Taxation of
Maryland on February 18, 1998) and said Articles Supplementary require
correction as permitted by Section 1-207 of the Corporations and Associations
Article of the Annotated Code of Maryland.

SECOND: Section 10.9 of ARTICLE THIRD of the Articles Supplementary as
previously filed and to be corrected hereby reads as follows:

10.9 Legend. Each certificate for Class C Preferred Stock
shall bear the following legend:

"The shares of Class C Cumulative Preferred Stock
represented by this certificate are subject to restrictions
on transfer. No person may Beneficially Own shares of Class C
Cumulative Preferred Stock in excess of the Ownership
Restrictions, as applicable, with certain further
restrictions and exceptions set forth in the Corporation's
Charter (including the Articles Supplementary setting forth
the terms of the Class C Cumulative Preferred Stock). Any
Person that attempts to Beneficially Own shares of Class C
Cumulative Preferred Stock in excess of the applicable
limitation must immediately notify the Corporation. All
capitalized terms in this legend have the meanings ascribed
to such terms in the Corporation's Charter (including the
Articles Supplementary setting forth the terms of the Class C
Cumulative Preferred Stock), as the same may be amended from
time to time, a copy of which, including the restrictions on
transfer, will be sent without charge to each stockholder
that so requests. If the restrictions on transfer are
violated, the shares of Class C Cumulative Preferred Stock
represented hereby will be either (i)

<PAGE> 200

void in accordance with the Certificate or (ii) automatically
transferred to a Trustee of a Trust for the benefit of one or
more Charitable Beneficiaries."

THIRD: Section 10.9 of ARTICLE THIRD of the Articles Supplementary as
corrected hereby is as follows:

10.9 Legend. Each certificate for Class C Preferred Stock
shall bear the following legend:

"The shares of Class C Cumulative Preferred Stock
represented by this certificate are subject to restrictions
on transfer. No person may Beneficially Own shares of Class C
Cumulative Preferred Stock in excess of the Ownership
Restrictions, as applicable, with certain further
restrictions and exceptions set forth in the Charter
(including the Articles Supplementary setting forth the terms
of the Class C Cumulative Preferred Stock). Any Person that
attempts to Beneficially Own shares of Class C Cumulative
Preferred Stock in excess of the applicable limitation must
immediately notify the Corporation. All capitalized terms in
this legend have the meanings ascribed to such terms in the
Charter (including the Articles Supplementary setting forth
the terms of the Class C Cumulative Preferred Stock), as the
same may be amended from time to time, a copy of which,
including the restrictions on transfer, will be sent without
charge to each stockholder that so requests. If the
restrictions on transfer are violated (i) the transfer of the
shares of Class C Cumulative Preferred Stock represented
hereby will be void in accordance with the Charter (including
the Articles Supplementary setting forth the terms of the
Class C Cumulative Preferred Stock) or (ii) the shares of
Class C Cumulative Preferred Stock represented hereby will
automatically be transferred to a Trustee of a Trust for the
benefit of one or more Charitable Beneficiaries."

FOURTH: The inaccuracy or defect in the legend contained in Section
10.9 of ARTICLE THIRD of the Articles Supplementary as previously filed is
that the legend contains an inaccurate description of the effects of an
improper transfer as set forth elsewhere in the Charter.

<PAGE> 201

WITNESS: APARTMENT INVESTMENT AND
MANAGEMENT COMPANY

/s/ JOEL F. BONDER By: /s/ PETER K. KOMPANIEZ
- ------------------------------- -----------------------------
Joel F. Bonder, Peter K. Kompaniez,
Secretary Vice Chairman and President

By: /s/ PETER K. KOMPANIEZ
--------------------------------
Peter K. Kompaniez,
Vice Chairman and President

<PAGE> 202

CERTIFICATE OF CORRECTION
to
ARTICLES SUPPLEMENTARY
Class D Cumulative Preferred Stock
(Par Value $.01 Per Share)
of
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
(a Maryland corporation)

APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation
(the "Corporation"), having its principal office in Baltimore City, Maryland,
hereby certifies to the State Department of Assessments and Taxation of
Maryland that:

FIRST: Articles Supplementary, dated February 17, 1998, of the
Corporation were filed with the State Department of Assessments and Taxation of
Maryland on February 18, 1998, at 1:40 p.m. and said Articles Supplementary
require correction as permitted by Section 1-207 of the Corporations and
Associations Article of the Annotated Code of Maryland.

SECOND: Section 10.9 of ARTICLE THIRD of the Articles Supplementary as
previously filed and to be corrected hereby reads as follows:

10.9 Legend. Each certificate for Class D Preferred Stock
shall bear the following legend:

"The shares of Class D Cumulative Preferred Stock
represented by this certificate are subject to restrictions
on transfer. No person may Beneficially Own shares of Class D
Cumulative Preferred Stock in excess of the Ownership
Restrictions, as applicable, with certain further
restrictions and exceptions set forth in the Corporation's
Charter (including the Articles Supplementary setting forth
the terms of the Class D Cumulative Preferred Stock). Any
Person that attempts to Beneficially Own shares of Class D
Cumulative Preferred Stock in excess of the applicable
limitation must immediately notify the Corporation. All
capitalized terms in this legend have the meanings ascribed
to such terms in the Corporation's Charter (including the
Articles Supplementary setting forth the terms of the Class D
Cumulative Preferred Stock), as the same may be amended from
time to time, a copy of which, including the restrictions on
transfer, will be sent without charge to each stockholder
that so requests. If the restrictions on transfer are
violated, the shares of Class D Cumulative Preferred Stock
represented hereby will be either (i) void in accordance with
the Certificate or (ii) automatically transferred to a
Trustee of a Trust for the benefit of one or more Charitable
Beneficiaries."

<PAGE> 203

THIRD: Section 10.9 of ARTICLE THIRD of the Articles Supplementary as
corrected hereby is as follows:

10.9 Legend. Each certificate for Class D Preferred Stock
shall bear the following legend:

"The shares of Class D Cumulative Preferred Stock
represented by this certificate are subject to restrictions
on transfer. No person may Beneficially Own shares of Class D
Cumulative Preferred Stock in excess of the Ownership
Restrictions, as applicable, with certain further
restrictions and exceptions set forth in the Charter
(including the Articles Supplementary setting forth the terms
of the Class D Cumulative Preferred Stock). Any Person that
attempts to Beneficially Own shares of Class D Cumulative
Preferred Stock in excess of the applicable limitation must
immediately notify the Corporation. All capitalized terms in
this legend have the meanings ascribed to such terms in the
Charter (including the Articles Supplementary setting forth
the terms of the Class D Cumulative Preferred Stock), as the
same may be amended from time to time, a copy of which,
including the restrictions on transfer, will be sent without
charge to each stockholder that so requests. If the
restrictions on transfer are violated (i) the transfer of
shares of Class D Cumulative Preferred Stock represented
hereby will be void in accordance with the Charter (including
the Articles Supplementary setting forth the terms of the
Class D Cumulative Preferred Stock) or (ii) the shares of
Class D Cumulative Preferred Stock represented hereby will
automatically be transferred to a Trustee of a Trust for the
benefit of one or more Charitable Beneficiaries.

FOURTH: The inaccuracy or defect in the legend contained in Section
10.9 of ARTICLE THIRD of the Articles Supplementary as previously filed is that
the legend contains an inaccurate description of the effects of an improper
transfer as set forth elsewhere in the Charter.

<PAGE> 204

WITNESS: APARTMENT INVESTMENT AND
MANAGEMENT COMPANY

/s/ JOEL F. BONDER By: /s/ PETER K. KOMPANIEZ
- ------------------------------- -----------------------------
Joel F. Bonder, Peter K. Kompaniez,
Secretary Vice Chairman and President

By: /s/ PETER K. KOMPANIEZ
--------------------------------
Peter K. Kompaniez,
Vice Chairman and President

<PAGE> 205

ARTICLES SUPPLEMENTARY

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

CLASS K CONVERTIBLE CUMULATIVE PREFERRED STOCK
(PAR VALUE $.01 PER SHARE)

APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation
(hereinafter called the "Corporation"), having its principal office in
Baltimore City, Maryland, hereby certifies to the Department of Assessments and
Taxation of the State of Maryland that:

FIRST: Pursuant to authority expressly vested in the Board of
Directors of the Corporation by Section 1.2 of Article IV of the Charter of the
Corporation, as amended to date (the "Charter"), the Board of Directors has
duly divided and classified 5,750,000 authorized but unissued shares of Class A
Common Stock of the Corporation, par value $.01 per share (the "Class A Common
Stock"), into a class designated as Class K Convertible Cumulative Preferred
Stock, par value $.01 per share, and has provided for the issuance of such
class.

SECOND: The reclassification increases the number of shares classified
as Class K Convertible Cumulative Preferred Stock, par value $.01 per share,
from no shares immediately prior to the reclassification to 5,750,000 shares
immediately after the reclassification. The reclassification decreases the
number of shares classified as Class A Common Stock from 484,027,500 shares
immediately prior to the reclassification to 478,277,500 shares immediately
after the reclassification.

THIRD: The terms of the Class K Convertible Cumulative Preferred Stock
(including the preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends and other distributions,
qualifications, or terms or conditions of redemption) as set by the Board of
Directors are as follows:

1. NUMBER OF SHARES AND DESIGNATION.

This class of Preferred Stock shall be designated as Class K
Convertible Cumulative Preferred Stock, par value $.01 per share (the "Class K
Preferred Stock"), and Five Million Seven Hundred Fifty Thousand (5,750,000)
shall be the authorized number of shares of such Class K Preferred Stock
constituting such class.

2. DEFINITIONS.

For purposes of the Class K Preferred Stock, the following terms shall
have the meanings indicated:

<PAGE> 206

"Act" shall mean the Securities Act of 1933, as amended.

"affiliate" of a Person means a Person that directly, or indirectly
through one or more intermediaries, controls or is controlled by, or
is under common control with, the Person specified.

"Aggregate Value" shall mean, with respect to any block of Equity
Stock, the sum of the products of (i) the number of shares of each
class of Equity Stock within such block multiplied by (ii) the
corresponding Market Price of one share of Equity Stock of such class.

"Beneficial Ownership" shall mean, with respect to any Person,
ownership of shares of Equity Stock equal to the sum of (i) the number
of shares of Equity Stock directly owned by such Person, (ii) the
number of shares of Equity Stock indirectly owned by such Person (if
such Person is an "individual" as defined in Section 542(a)(2) of the
Code) taking into account the constructive ownership rules of Section
544 of the Code, as modified by Section 856(h)(1)(B) of the Code, and
(iii) the number of shares of Equity Stock that such Person is deemed
to beneficially own pursuant to Rule 13d-3 under the Exchange Act or
that is attributed to such Person pursuant to Section 318 of the Code,
as modified by Section 856(d)(5) of the Code, provided that when
applying this definition of Beneficial Ownership to the Initial
Holder, clause (iii) of this definition, and clause (a) (ii) of the
definition of "Person" shall be disregarded. The terms "Beneficial
Owner," "Beneficially Owns" and "Beneficially Owned" shall have the
correlative meanings.

"Board of Directors" shall mean the Board of Directors of the
Corporation or any committee authorized by such Board of Directors to
perform any of its responsibilities with respect to the Class K
Preferred Stock; provided that, for purposes of paragraph (a) of
Section 9 of this Article, the term "Board of Directors" shall not
include any such committee.

"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which state or federally chartered banking institutions in New
York, New York are not required to be open.

"Cash Redemption Price" shall mean, with respect to any shares of
Class K Preferred Stock to be redeemed, (i) if the Redemption Date
occurs during the period from and including February 20, 2002, to but
excluding February 18, 2003, 102% of the Liquidation Preference
thereof, and (ii) if the Redemption Date occurs on or after February
18, 2003, 100% of the Liquidation Preference thereof, plus, in the
case of clause (i) or (ii), all accumulated, accrued and unpaid
dividends (whether or not earned or declared), if any, to the
Redemption Date.

<PAGE> 207

"Class K Preferred Stock" shall have the meaning set forth in Section
1 of this Article.

"Closing Price" shall mean, when used with respect to a share of any
Equity Stock and for any date, the last sale price, regular way, or,
in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case, as reported
in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the NYSE or, if
the Equity Stock is not listed or admitted to trading on the NYSE, as
reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities
exchange on which the Equity Stock is listed or admitted to trading
or, if the Equity Stock is not listed or admitted to trading on any
national securities exchange, the last quoted price, or if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System or, if such system
is no longer in use, the principal other automated quotation system
that may then be in use or, if the Equity Stock is not quoted by any
such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Equity
Stock selected by the Board of Directors of the Corporation.

"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.

"Conversion Price" shall mean the conversion price per share of Class
A Common Stock for which each share of Class K Preferred Stock is
convertible, as such Conversion Price may be adjusted pursuant to
Section 7 of this Article. The initial Conversion Price shall be
$42.00 (equivalent to a

<PAGE> 208

conversion rate of 0.59524 shares of Class A Common Stock for each
share of Class K Preferred Stock).

"Dividend Periods" shall mean the Initial Dividend Period and each
subsequent quarterly dividend period commencing on and including
February 18, May 18, August 18 and November 18 of each year and ending
on and including the day preceding the first day of the next
succeeding Dividend Period, other than the Dividend Period during
which any Class K Preferred Stock shall be redeemed pursuant to
Section 5 hereof, which shall end on and include the Redemption Date
with respect to the Class K Preferred Stock being redeemed.

"Equity Stock" shall mean one or more shares of any class of capital
stock of the Corporation.

"Excess Transfer" has the meaning set forth in Section 11.3(A) of this
Article.

"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

"Issue Date" shall mean February 18, 1999.

"Initial Dividend Period" shall mean the period commencing on and
including the Issue Date and ending on and including May 17, 1999.

"Initial Holder" shall mean Terry Considine.

"Initial Holder Limit" shall mean a number of the Outstanding shares
of Class K Preferred Stock of the Corporation having an Aggregate
Value not in excess of the excess of (x) 15% of the Aggregate Value of
all Outstanding shares of Equity Stock over (y) the Aggregate Value of
all shares of Equity Stock other than Class K Preferred Stock that are
Beneficially Owned by the Initial Holder. From the Issue Date, the
secretary of the Corporation, or such other person as shall be
designated by the Board of Directors, shall upon request make
available to the representative(s) of the Initial Holder and the Board
of Directors, a schedule that sets forth the then-current Initial
Holder Limit applicable to the Initial Holder.

"Junior Stock" shall have the meaning set forth in paragraph (c) of
Section 8 of this Article.

<PAGE> 209

"Liquidation Preference" shall have the meaning set forth in paragraph
(a) of Section 4 of this Article.

"Look-Through Entity" shall mean a Person that is either (i) described
in Section 401(a) of the Code as provided under Section 856(h)(3) of
the Code or (ii) registered under the Investment Company Act of 1940.

"Look-Through Ownership Limit" shall mean, for any Look-Through
Entity, a number of the Outstanding shares of Class K Preferred Stock
of the Corporation having an Aggregate Value not in excess of the
excess of (x) 15% of the Aggregate Value of all Outstanding shares of
Equity Stock over (y) the Aggregate Value of all shares of Equity
Stock other than Class K Preferred Stock that are Beneficially Owned
by the Look-Through Entity.

"Market Price" on any date shall mean, with respect to any share of
Equity Stock, the Closing Price of a share of that class of Equity
Stock on the Trading Day immediately preceding such date.

"NYSE" shall mean the New York Stock Exchange, Inc.

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

"Outstanding" shall mean issued and outstanding shares of Equity Stock
of the Corporation, provided that for purposes of the application of
the Ownership Limit, the Look-Through Ownership Limit or the Initial
Holder Limit to any Person, the term "Outstanding" shall be deemed to
include the number of shares of Equity Stock that such Person alone,
at that time, could acquire pursuant to any options or convertible
securities.

"Ownership Limit" shall mean, for any Person other than the Initial
Holder or a Look-Through Entity, a number of the Outstanding shares of
Class K Preferred Stock of the Corporation having an Aggregate Value
not in excess of the excess of (x) 8.7% of the Aggregate Value of all
Outstanding shares of Equity Stock over (y) the Aggregate Value of all
shares of Equity Stock other than Class K Preferred Stock that are
Beneficially Owned by the Person.

"Ownership Restrictions" shall mean collectively the Ownership Limit,
as applied to Persons other than the Initial Holder or Look-Through
Entities, the Initial Holder Limit, as applied to the Initial Holder,
and the Look-Through Ownership Limit, as applied to Look-Through
Entities.

"Parity Stock" shall have the meaning set forth in paragraph (b) of
Section 8 of this Article.

<PAGE> 210

"Person" shall mean (a) for purposes of Section 11 of this Article,
(i) an individual, corporation, partnership, estate, trust (including
a trust qualifying under Section 401(a) or 501(c) of the Code),
association, "private foundation," within the meaning of Section
509(a) of the Code, joint stock company or other entity, and (ii) a
"group," as that term is used for purposes of Section 13(d)(3) of the
Exchange Act, and (b) for purposes of the remaining Sections of this
Article, any individual, firm, partnership, corporation or other
entity, including any successor (by merger or otherwise) of such
entity.

"Prohibited Transferee" has the meaning set forth in Section 11.3(A)
of this Article.

"Record Date" shall have the meaning set forth in paragraph (a) of
Section 3 of this Article.

"Redemption Market Price" shall mean, with respect to any redemption
of shares of Class K Preferred Stock, the lesser of (i) the average of
the daily Closing Prices of the Class A Common Stock for the 20
consecutive Trading Days immediately preceding the first Business Day
immediately preceding the date of the applicable redemption notice and
(ii) the Closing Price of the Class A Common Stock on the Trading Day
immediately preceding the first Business Day immediately preceding the
date of the applicable redemption notice.

"Redemption Date" shall mean, in the case of any redemption of any
shares of Class K Preferred Stock, the date fixed for redemption of
such shares.

"REIT" shall mean a "real estate investment trust," as defined in
Section 856 of the Code.

"Senior Stock" shall have the meaning set forth in paragraph (a) of
Section 8 of this Article.

"set apart for payment" shall be deemed to include, without any action
other than the following, the recording by the Corporation in its
accounting ledgers of any accounting or bookkeeping entry which
indicates, pursuant to a declaration of dividends or other
distribution by the Board of Directors, the allocation of funds to be
so paid on any series or class of capital stock of the Corporation;
provided, however, that if any funds for any class or series of Junior
Stock or any class or series of Parity Stock are placed in a separate
account of the Corporation or delivered to a disbursing, paying or
other similar agent, then "set apart for payment" with respect to the
Class K Preferred Stock shall mean placing such funds in a separate
account or delivering such funds to a disbursing, paying or other
similar agent.

<PAGE> 211

"Trading Day" shall mean, when used with respect to any Equity Stock,
(i) if the Equity Stock is listed or admitted to trading on the NYSE,
a day on which the NYSE is open for the transaction of business, (ii)
if the Equity Stock is not listed or admitted to trading on the NYSE
but is listed or admitted to trading on another national securities
exchange or automated quotation system, a day on which the principal
national securities exchange or automated quotation system, as the
case may be, on which the Equity Stock is listed or admitted to
trading is open for the transaction of business, or (iii) if the
Equity Stock is not listed or admitted to trading on any national
securities exchange or automated quotation system, any day other than
a Saturday, a Sunday or a day on which banking institutions in the
State of New York are authorized or obligated by law or executive
order to close.

"Transfer" shall mean any sale, transfer, gift, assignment, devise or
other disposition of a share of Class K Preferred Stock (including (i)
the granting of an option or any series of such options or entering
into any agreement for the sale, transfer or other disposition of
Class K Preferred Stock or (ii) the sale, transfer, assignment or
other disposition of any securities or rights convertible into or
exchangeable for Class K Preferred Stock), whether voluntary or
involuntary, whether of record or Beneficial Ownership, and whether by
operation of law or otherwise (including, but not limited to, any
transfer of an interest in other entities that results in a change in
the Beneficial Ownership of shares of Class K Preferred Stock). The
term "Transfers" and "Transferred" shall have correlative meanings.

"Transfer Agent" means such transfer agent as may be designated by the
Board of Directors or their designee as the transfer agent for the
Class K Preferred Stock; provided, that if the Corporation has not
designated a transfer agent then the Corporation shall act as the
transfer agent for the Class K Preferred Stock.

"Trust" shall mean the trust created pursuant to Section 11.3 of this
Article.

"Trustee" shall mean the Person unaffiliated with either the
Corporation or the Prohibited Transferee that is appointed by the
Corporation to serve as trustee of the Trust.

"Voting Preferred Stock" shall have the meaning set forth in Section 9
of this Article.

3. DIVIDENDS.

(a) The holders of Class K Preferred Stock shall be entitled
to receive, when and as declared by the Board of Directors, out of funds
legally available for that purpose, quarterly cash dividends on the Class K
Preferred Stock in an amount per share equal to (i) during the period from the
Issue Date through and including

<PAGE> 212

February 17, 2002, the greater of $0.50 or the quarterly cash dividend paid or
payable (determined on each Dividend Payment Date) on the number of shares of
Class A Common Stock (or portion thereof) into which a share of Class K
Preferred Stock is convertible, and (ii) during the period from and after
February 18, 2002, the greater of $0.625 or the quarterly cash dividend paid or
payable (determined on each Dividend Payment Date) on the number of shares of
Class A Common Stock (or portion thereof) into which a share of Class K
Preferred Stock is convertible. Such dividends shall be cumulative from the
Issue Date, whether or not in any Dividend Period or Periods such dividends
shall be declared or there shall be funds of the Corporation legally available
for the payment of such dividends, and shall be payable quarterly in arrears on
each Dividend Payment Date, commencing on May 18, 1999. Each such dividend
shall be payable in arrears to the holders of record of the Class K Preferred
Stock, as they appear on the stock records of the Corporation at the close of
business on the February 1, May 1, August 1 or November 1 (each a "Record
Date"), as the case may be, immediately preceding such Dividend Payment Date.
Accumulated, accrued and unpaid dividends for any past Dividend Periods may be
declared and paid at any time, without reference to any regular Dividend
Payment Date, to holders of record on such date, which date shall not precede
by more than 45 days the payment date thereof, as may be fixed by the Board of
Directors.

(b) Any dividend payable on the Class K Preferred Stock for
any partial dividend period shall be computed ratably on the basis of twelve
30-day months and a 360-day year. Holders of Class K Preferred Stock shall not
be entitled to any dividends, whether payable in cash, property or stock, in
excess of full cumulative dividends, as herein provided, on the Class K
Preferred Stock. No interest, or sum of money in lieu of interest, shall be
payable in respect of any dividend payment or payments on the Class K Preferred
Stock that may be in arrears.

(c) So long as any of the shares of Class K Preferred Stock
are outstanding, except as described in the immediately following sentence, no
dividends shall be declared or paid or set apart for payment by the Corporation
and no other distribution of cash or other property shall be declared or made,
directly or indirectly, by the Corporation with respect to any shares of Parity
Stock unless, in each case, dividends equal to the full amount of accumulated,
accrued and unpaid dividends on all outstanding shares of Class K Preferred
Stock have been or contemporaneously are declared and paid or declared and a
sum sufficient for the payment thereof has been or contemporaneously is set
apart for payment of such dividends on the Class K Preferred Stock for all
Dividend Periods ending on or prior to the date such dividend or distribution
is declared, paid, set apart for payment or made, as the case may be, with
respect to such shares of Parity Stock. When dividends are not paid in full or
a sum sufficient for such payment is not set apart, as aforesaid, all dividends
declared upon the Class K Preferred Stock and all dividends declared upon any
shares of Parity Stock shall be declared ratably in proportion to the
respective amounts of dividends accumulated, accrued and unpaid on the Class K
Preferred Stock and accumulated, accrued and unpaid on such Parity Stock.

<PAGE> 213

(d) So long as any of the shares of Class K Preferred Stock
are outstanding, no dividends (other than dividends or distributions paid in
shares of, or options, warrants or rights to subscribe for or purchase shares
of, Junior Stock) shall be declared or paid or set apart for payment by the
Corporation and no other distribution of cash or other property shall be
declared or made, directly or indirectly, by the Corporation with respect to
any shares of Junior Stock, nor shall any shares of Junior Stock be redeemed,
purchased or otherwise acquired (other than a redemption, purchase or other
acquisition of Common Stock made for purposes of an employee incentive or
benefit plan of the Corporation or any subsidiary) for any consideration (or
any moneys be paid to or made available for a sinking fund for the redemption
of any shares of any such stock), directly or indirectly, by the Corporation
(except by conversion into or exchange for shares of, or options, warrants or
rights to subscribe for or purchase shares of, Junior Stock), nor shall any
other cash or other property otherwise be paid or distributed to or for the
benefit of any holder of shares of Junior Stock in respect thereof, directly or
indirectly, by the Corporation unless, in each case, dividends equal to the
full amount of all accumulated, accrued and unpaid dividends on all outstanding
shares of Class K Preferred Stock have been declared and paid, or such
dividends have been declared and a sum sufficient for the payment thereof has
been set apart for such payment, on all outstanding shares of Class K Preferred
Stock for all Dividend Periods ending on or prior to the date such dividend or
distribution is declared, paid, set apart for payment or made with respect to
such shares of Junior Stock, or the date such shares of Junior Stock are
redeemed, purchased or otherwise acquired or monies paid to or made available
for any sinking fund for such redemption, or the date any such cash or other
property is paid or distributed to or for the benefit of any holders of Junior
Stock in respect thereof, as the case may be.

Notwithstanding the provisions of this Section 3, the
Corporation shall not be prohibited from (i) declaring or paying or setting
apart for payment any dividend or distribution on any shares of Parity Stock or
(ii) redeeming, purchasing or otherwise acquiring any Parity Stock, in each
case, if such declaration, payment, redemption, purchase or other acquisition
is necessary in order to maintain the continued qualification of the
Corporation as a REIT under Section 856 of the Code.

4. LIQUIDATION PREFERENCE.

<PAGE> 214

earned or declared) accumulated, accrued and unpaid thereon to the date of
final distribution to such holders, no payment will be made to any holder of
Junior Stock upon the liquidation, dissolution or winding up of the
Corporation. If, upon any liquidation, dissolution or winding up of the
Corporation, the assets of the Corporation, or proceeds thereof, distributable
among the holders of Class K Preferred Stock shall be insufficient to pay in
full the preferential amount aforesaid and liquidating payments on any other
shares of any class or series of Parity Stock, then such assets, or the
proceeds thereof, shall be distributed among the holders of Class K Preferred
Stock and any such other Parity Stock ratably in the same proportion as the
respective amounts that would be payable on such Class K Preferred Stock and
any such other Parity Stock if all amounts payable thereon were paid in full.
For the purposes of this Section 4, (i) a consolidation or merger of the
Corporation with one or more corporations, (ii) a sale or transfer of all or
substantially all of the Corporation's assets, or (iii) a statutory share
exchange shall not be deemed to be a liquidation, dissolution or winding up,
voluntary or involuntary, of the Corporation.

(b) Upon any liquidation, dissolution or winding up of the
Corporation, after payment shall have been made in full to the holders of Class
K Preferred Stock and any Parity Stock, as provided in Section 4(a), any other
series or class or classes of Junior Stock 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 K Preferred Stock and any Parity
Stock shall not be entitled to share therein.

5. REDEMPTION AT THE OPTION OF THE CORPORATION.

(a) Shares of Class K Preferred Stock shall not be redeemable
by the Corporation prior to February 20, 2002, except as set forth in Section
11.2 of this Article. During the period beginning on February 20, 2002, the
Corporation, at its option, may redeem shares of Class K Preferred Stock, in
whole or from time to time in part, at a redemption price payable in cash equal
to the Cash Redemption Price applicable thereto. On and after February 20,
2002, the Corporation, at its option, may redeem shares of Class K Preferred
Stock, in whole or from time to time in part, in exchange for a number of
shares of Class A Common Stock equal to (i) 105% of the applicable Cash
Redemption Price, divided by (ii) the Redemption Market Price applicable to
such redemption. In lieu of any fractional shares of Class A Common Stock which
would otherwise be issuable upon any redemption of Class K Preferred Stock, the
Corporation shall pay a cash adjustment in respect of such fractional interest
in an amount in cash (computed to the nearest cent) equal to the applicable
Redemption Market Price multiplied by the fractional interest (computed to the
nearest 1/100th of a percent) that otherwise would have been deliverable upon
such redemption of Class K Preferred Stock. In the event of a redemption of
shares of Class K Preferred Stock, if the Redemption Date occurs after a
dividend record date and on or prior to the related Dividend Payment Date, the
dividend payable on such Dividend Payment Date in respect of such shares called
for redemption shall be payable on such Dividend Payment Date to the holders of
record at the close of business on such dividend record

<PAGE> 215

date notwithstanding the redemption of such shares, and shall not be payable as
part of the redemption price for such shares. In connection with any redemption
for cash pursuant to this Section 5(a), the redemption price of the Class K
Preferred Stock (other than any portion thereof consisting of accumulated,
accrued and unpaid dividends) shall be payable solely with the proceeds from
the sale by the Corporation or the Operating Partnership of other capital
shares of the Corporation or the Operating Partnership (whether or not such
sale occurs concurrently with such redemption). For purposes of the preceding
sentence, "capital shares" means any common stock, preferred stock, depositary
shares, partnership or other interests, participations or other ownership
interests (however designated) and any rights (other than debt securities
convertible into or exchangeable at the option of the holder for equity
securities (unless and to the extent such debt securities are subsequently
converted into capital shares)) or options to purchase any of the foregoing of
or in the Corporation or the Operating Partnership.

(b) The Redemption Date shall be selected by the Corporation,
shall be specified in the notice of redemption and shall be not less than 30
days nor more than 60 days after the date notice of redemption is sent by the
Corporation.

(c) If full cumulative dividends on all outstanding shares of
Class K Preferred Stock have not been declared and paid, or declared and set
apart for payment, no shares of Class K Preferred Stock may be redeemed unless
all outstanding shares of Class K Preferred Stock are simultaneously redeemed,
and neither the Corporation nor any affiliate of the Corporation may purchase
or acquire shares of Class K Preferred Stock, otherwise than pursuant to a
purchase or exchange offer made on the same terms to all holders of shares of
Class K Preferred Stock.

(d) If the Corporation shall redeem shares of Class K
Preferred Stock pursuant to paragraph (a) of this Section 5, notice of such
redemption shall be given to each holder of record of the shares to be
redeemed. Such notice shall be provided by first class mail, postage prepaid,
at such holder's address as the same appears on the stock records of the
Corporation. Neither the failure to mail any notice required by this paragraph
(d), nor any defect therein or in the mailing thereof to any particular holder,
shall affect the sufficiency of the notice or the validity of the proceedings
for redemption with respect to the other holders. Any notice which has been
mailed in the manner herein provided shall be conclusively presumed to have
been duly given on the date mailed whether or not the holder receives the
notice. Each such notice shall state, as appropriate: (i) the Redemption Date;
(ii) the number of shares of Class K Preferred Stock to be redeemed and, if
fewer than all such shares held by such holder are to be redeemed, the number
of such shares to be redeemed from such holder; (iii) the place or places at
which certificates for such shares are to be surrendered for cash or shares of
Class A Common Stock; and (iv) the redemption price payable on such Redemption
Date (whether in cash or shares of Class A Common Stock), including, without
limitation, a statement as to whether or not accumulated, accrued and unpaid
dividends will be payable as part of the redemption price, or payable on the
next Dividend

<PAGE> 216

Payment Date to the record holder at the close of business on the relevant
record date as described in the next succeeding sentence. Notice having been
mailed as aforesaid, from and after the Redemption Date (unless the Corporation
shall fail to make available the amount of cash necessary to effect such
redemption), (i) dividends on the shares of Class K Preferred Stock so called
for redemption shall cease to accumulate or accrue on the shares of Class K
Preferred Stock called for redemption, (ii) said shares shall no longer be
deemed to be outstanding, and (iii) all rights of the holders thereof as
holders of Class K Preferred Stock of the Corporation shall cease except the
right to receive the cash payable, or shares of Class A Common Stock issuable,
upon such redemption, without interest thereon, upon surrender of their
certificates if so required; provided, however, that if the Redemption Date for
any shares of Class K Preferred Stock occurs after any dividend record date and
on or prior to the related Dividend Payment Date, the full dividend payable on
such Dividend Payment Date in respect of such shares of Class K Preferred Stock
called for redemption shall be payable on such Dividend Payment Date to the
holders of record of such shares at the close of business on the corresponding
dividend record date notwithstanding the prior redemption of such shares. At
the close of business on the Redemption Date, without any further action, each
holder of shares of Class K Preferred Stock redeemed for shares of Class A
Common Stock shall be deemed a holder of the number of shares of Class A Common
Stock for which such Class K Convertible Preferred Stock has been redeemed
(unless the Corporation defaults on its obligation to deliver shares of Class A
Common Stock or cash). The Corporation's obligation to make available the cash
necessary to effect such redemption in accordance with the preceding sentence
shall be deemed fulfilled if, on or before the applicable Redemption Date, the
Corporation shall irrevocably deposit in trust with a bank or trust company
(which may not be an affiliate of the Corporation) that has, or is an
affiliate of a bank or trust company that has, a capital and surplus of at
least $50,000,000, such amount of cash as is necessary for such redemption
plus, if such Redemption Date occurs after any dividend record date and on or
prior to the related Dividend Payment Date, such amount of cash as is necessary
to pay the dividend payable on such Dividend Payment Date in respect of such
shares of Class K Preferred Stock called for redemption, with irrevocable
instructions that such cash be applied to the redemption of the shares of Class
K Preferred Stock so called for redemption and, if applicable, the payment of
such dividend. No interest shall accrue for the benefit of the holders of
shares of Class K Preferred Stock to be redeemed on any cash so set aside by
the Corporation. Subject to applicable escheat laws, any such cash unclaimed at
the end of two years from the Redemption Date shall revert to the general funds
of the Corporation, after which reversion the holders of shares of Class K
Preferred Stock so called for redemption shall look only to the general funds
of the Corporation for the payment of such cash.

As promptly as practicable after the surrender in accordance with such
notice of the certificates for any such shares of Class K Preferred Stock to be
so redeemed (properly endorsed or assigned for transfer, if the Corporation
shall so require and the notice shall so state), such certificates shall be
exchanged for cash (without interest thereon) or shares of Class A Common Stock
for which such shares have been

<PAGE> 217

redeemed in accordance with such notice. If fewer than all the outstanding
shares of Class K Preferred Stock are to be redeemed, shares to be redeemed
shall be selected by the Corporation from outstanding shares of Class K
Preferred Stock not previously called for redemption by lot or, with respect to
the number of shares of Class K Preferred Stock held of record by each holder
of such shares, pro rata (as nearly as may be) or by any other method as may be
determined by the Board of Directors in its discretion to be equitable. If
fewer than all the shares of Class K Preferred Stock represented by any
certificate are redeemed, then a new certificate representing the unredeemed
shares shall be issued without cost to the holders thereof.

(e) All shares of Class A Common Stock that may be issued
upon redemption of shares of Class K Preferred Stock shall be duly and validly
issued and fully paid and non-assessable, and prior to giving any notice of
redemption the Corporation shall take any corporate action necessary therefor.

6. STATUS OF REACQUIRED STOCK.

All shares of Class K Preferred Stock that have been issued and
reacquired in any manner by the Corporation (including, without limitation,
shares of Class K Preferred Stock which have been surrendered for conversion)
shall be returned to the status of authorized but unissued shares of Class K
Preferred Stock.

7. CONVERSION.

7.1 CONVERSION AT HOLDERS' OPTION.

At any time on or after the Issue Date, holders of shares of Class K
Preferred Stock shall have the right to convert all or a portion of such shares
into shares of Class A Common Stock, as follows:

(a) Subject to and upon compliance with the provisions of
this Section 7, each share of Class K Preferred Stock shall, at the option of
the holder thereof, be convertible at any time (unless such share is called for
redemption, then to and including but not after the close of business on the
date immediately prior to the Redemption Date, unless the Corporation shall
default in payment due upon redemption thereof), into that number of fully paid
and non-assessable shares of Class A Common Stock (calculated as to each
conversion to the nearest 1/100th of a share) obtained by dividing $25 by the
Conversion Price in effect at such time and by surrender of the certificate
representing such shares to be converted in the manner provided in subsection
(b) of this Section 7.1.

(b) In order to convert shares of Class K Preferred Stock,
the holder of the shares to be converted shall surrender the certificate
representing such shares at any office or agency maintained by the Corporation
for such purpose, accompanied by

<PAGE> 218

the funds, if any, required by the last paragraph of this subsection (b), and
shall give written notice of conversion in the form provided on such
certificate representing shares of Class K Preferred Stock (or such other
notice as is acceptable to the Corporation) to the Corporation at such office
or agency that the holder elects to convert the shares of Class K Preferred
Stock specified in such notice. Such notice shall also state the name or names,
together with address or addresses, in which the certificate or certificates
for shares of Class A Common Stock which shall be issuable in such conversion
shall be issued. Unless the shares issuable on conversion are to be issued in
the same name as the name in which such share of Class K Preferred Stock is
registered, each certificate representing a share of Class K Preferred Stock
surrendered for conversion shall be accompanied by instruments of transfer, in
form satisfactory to the Corporation, duly executed by the holder or such
holder's duly authorized attorney and an amount sufficient to pay any transfer
or similar tax.

As promptly as practicable after the surrender of
certificates representing such shares of Class K Preferred Stock and the
receipt of such notice, instruments of transfer and funds, if any, as
aforesaid, the Corporation shall issue and shall deliver at such office or
agency to such holder, or as designated in such holder's written instructions,
a certificate or certificates for the number of full shares of Class A Common
Stock issuable upon the conversion of such share or shares of Class K Preferred
Stock in accordance with provisions of this Section 7, and a check or cash in
respect of any fractional interest in a share of Class A Common Stock arising
upon such conversion, as provided in paragraph (c) of this Section 7.1.

Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which certificates
representing such shares of Class K Preferred Stock shall have been surrendered
and such notice (and any applicable instruments of transfer and any required
taxes) received by the Corporation as aforesaid, and the Person or Persons in
whose name or names any certificate or certificates for shares of Class A
Common Stock shall be issuable upon such conversion shall be deemed to have
become the holder or holders of record of the shares represented thereby at
such time on such date, and such conversion shall be at the Conversion Price in
effect at such time on such date, unless the stock transfer books of the
Corporation shall be closed on that date, in which event such Person or Persons
shall be deemed to have become such holder or holders of record at the close of
business on the next succeeding day on which such stock transfer books are
open, but such conversion shall be at the Conversion Price in effect on the
date on which such shares shall have been surrendered and such notice received
by the Corporation.

Holders of Class K Preferred Stock at the close of business
on a Record Date will be entitled to receive an amount equal to the dividend
payable on such shares on the corresponding Dividend Payment Date
notwithstanding the conversion of such shares following such Record Date and
prior to such Dividend Payment Date; provided, however, that Class K Preferred
Stock surrendered for conversion during the period between the close of
business on any Record Date and the opening of business

<PAGE> 219

on the corresponding Dividend Payment Date (except shares converted after the
issuance of a notice of redemption with respect to a Redemption Date during
such period or coinciding with such Dividend Payment Date, which will be
entitled to such dividend) must be accompanied by payment of an amount equal to
the dividend payable on such shares on such Dividend Payment Date. A holder of
Class K Preferred Stock on a Record Date who (or whose transferee) tenders any
such shares for conversion into shares of Class A Common Stock on such Dividend
Payment Date will receive the dividend payable by the Corporation on such
shares of Class K Preferred Stock on such date, and the converting holder need
not include payment of the amount of such dividend upon surrender of Class K
Preferred Stock for conversion. Except as provided herein, the Corporation will
make no payment or allowance for unpaid dividends, whether or not in arrears,
on converted shares or for dividends on the Class A Common Stock issued upon
such conversion.

(c) No fractional shares of Class A Common Stock or scrip
representing fractions of a share of Class A Common Stock shall be issued upon
conversion of shares of Class K Preferred Stock. If more than one share of
Class K Preferred Stock shall be surrendered for conversion at one time by the
same holder, the number of full shares of Class A Common Stock issuable upon
conversion thereof shall be computed on the basis of the aggregate number of
shares of Class K Preferred Stock so surrendered. In lieu of any fractional
interest in a share of Class A Common Stock that would otherwise be deliverable
upon the conversion of any share of Class K Preferred Stock, the Corporation
shall pay to the holder of such shares an amount in cash (computed to the
nearest cent) equal to the Closing Price of the Class A Common Stock on the
Trading Day immediately preceding the date of conversion, multiplied by the
fractional interest that otherwise would have been deliverable upon conversion
of such share.

7.2 ADJUSTMENTS TO CONVERSION PRICE

(a) The Conversion Price shall be adjusted from time to
time as follows:

(i) If the Corporation shall after the Issue Date
(A) pay a dividend or make a distribution on its Class A Common Stock in shares
of Class A Common Stock, (B) subdivide its outstanding shares of Class A Common
Stock into a greater number of shares, (C) combine its outstanding shares of
Class A Common Stock into a smaller number of shares or (D) issue any shares of
capital stock by reclassification of its outstanding Class A Common Stock,
then, in each such case, the Conversion Price in effect immediately prior to
such action shall be adjusted so that the holder of any share of Class K
Preferred Stock thereafter surrendered for conversion shall be entitled to
receive the number of shares of Class A Common Stock or other capital stock of
the Corporation which such holder would have owned or been entitled to receive
immediately following such action had such share been converted immediately
prior to the occurrence of such event. An adjustment made pursuant to

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this subsection (i) of this Section 7.2(a) shall become effective immediately
after the record date, in the case of a dividend or distribution, or
immediately after the effective date, in the case of a subdivision, combination
or reclassification. If, as a result of an adjustment made pursuant to this
subsection (i), the holder of any share of Class K Preferred Stock thereafter
surrendered for conversion shall become entitled to receive shares of two or
more classes of capital stock or shares of Class A Common Stock and other
capital stock of the Corporation, the Board of Directors (whose determination
shall be conclusive and shall be described in a statement filed by the
Corporation with the Transfer Agent) shall determine the allocation of the
adjusted Conversion Price between or among shares of such classes of capital
stock or shares of Class A Common Stock and other capital stock.

(ii) If the Corporation shall, after the Issue Date,
issue rights, options or warrants to all holders of its outstanding shares of
Class A Common Stock entitling them (for a period expiring within 45 days after
the record date described below) to subscribe for or purchase shares of Class A
Common Stock at a price per share less than the current market price per share
(determined pursuant to subsection (iv) of this Section 7.2(a)) of the Class A
Common Stock (other than pursuant to any stock option, restricted stock or
other incentive or benefit plan or stock ownership or purchase plan for the
benefit of employees, directors or officers or any dividend reinvestment plan
of the Corporation in effect at the time hereof or any other similar plan
adopted or implemented hereafter), then the Conversion Price in effect
immediately prior thereto shall be adjusted so that it shall equal the price
determined by multiplying the Conversion Price in effect immediately prior to
the record date by a fraction, the numerator of which shall be the sum of (A)
the number of shares of Class A Common Stock outstanding on the record date and
(B) the number of shares which the aggregate proceeds to the Corporation from
the exercise of such rights, options or warrants for Class A Common Stock would
purchase at such current market price, and the denominator of which shall be
the sum of (A) the number of shares of Class A Common Stock outstanding on the
record date and (B) the number of additional shares of Class A Common Stock
offered for subscription or purchase pursuant to such rights, options or
warrants. Such adjustment shall be made successively whenever any rights,
options or warrants are issued, and shall become effective immediately after
the record date for the determination of stockholders entitled to receive such
rights, options or warrants; provided, however, that if all of the shares of
Class A Common Stock offered for subscription or purchase are not delivered
upon the exercise of such rights, options or warrants, upon the expiration of
such rights, options or warrants, the Conversion Price shall be readjusted to
the Conversion Price which would have been in effect had the numerator and the
denominator of the foregoing fraction and the resulting adjustment been made
based upon the number of shares of Class A Common Stock actually delivered upon
the exercise of such rights, options or warrants rather than upon the number of
shares of Class A Common Stock offered for subscription or purchase. In
determining whether any rights, options or warrants entitle the holders to
subscribe for or purchase shares of Class A Common Stock at less than such
current market price, and in determining

<PAGE> 221

the aggregate offering price of such shares of Class A Common Stock, there
shall be taken into account any consideration received by the Corporation for
such rights, options or warrants, with the value of such consideration, if
other than cash, determined by the Board of Directors (whose determination
shall be conclusive and shall be described in a statement filed by the
Corporation with the Transfer Agent).

(iii) In case the Corporation shall, by dividend or
otherwise, distribute to all holders of its outstanding Class A Common Stock
any capital stock (other than Class A Common Stock), evidences of its
indebtedness or assets or rights or warrants to subscribe for or purchase
securities of the Corporation (excluding (A) those referred to in subsections
(i) and (ii) of this Section 7.2(a), (B) dividends and distributions paid in
cash out of the retained earnings of the Corporation, and (C) distributions
upon mergers or consolidations to which subsection (b) of this Section 7.2
applies), then, in each such case, the Conversion Price shall be adjusted to
equal the price determined by multiplying the Conversion Price in effect
immediately prior to the record date of such distribution by a fraction, the
numerator of which shall be the current market price per share (determined
pursuant to subsection (iv) of this Section 7.2(a)) of the Class A Common
Stock, less the fair market value on such record date (determined by the Board
or Directors, whose determination shall be conclusive and shall be described in
a statement filed by the Corporation with the Transfer Agent) of the portion of
the capital stock or assets or the evidences of indebtedness or assets so
distributed to the holder of one share of Class A Common Stock or of such
subscription rights or warrants applicable to one share of Class A Common
Stock, and the denominator of which shall be such current market price per
share of Class A Common Stock. Such adjustment shall become effective
immediately after the record date for the determination of stockholders
entitled to receive such distribution.

(iv) For the purpose of any computation under
subsections (ii) and (iii) of this Section 7.2(a), the current market price per
share of Class A Common Stock on any date shall be the average of the Closing
Price of the Class A Common Stock for the shorter of (A) 20 consecutive Trading
Days ending on the last full Trading Day prior to the Time of Determination or
(B) the period commencing on the date next succeeding the first public
announcement of the issuance of such rights or warrants or such distribution
through such last full Trading Day prior to the Time of Determination. For
purposes of the foregoing, the term "Time of Determination" shall mean the time
and date of the earlier of (A) the record date for determining stockholders
entitled to receive the rights, warrants or distribution referred to in
subsections (ii) and (iii) of this Section 7.2, or (B) the commencement of
"ex-dividend" trading on the exchange or market referred to in the definition
of "Closing Price."

(v) No adjustment in the Conversion Price shall
be required to be made unless such adjustment would require an increase or
decrease of at least one percent of such price; provided, however, that any
adjustment which by reason of this subsection (v) is not required to be made
shall be carried forward and taken into

<PAGE> 222

account in any subsequent adjustment. All calculations under this Section 7.2
shall be made to the nearest cent or to the nearest 1/100th of a share, as the
case may be. Anything in this Section 7.2 to the contrary notwithstanding, the
Corporation shall be entitled to make such reduction in the Conversion Price,
in addition to those required by this Section 7.2, as it shall determine in its
discretion to be advisable in order that any stock dividend, subdivision of
shares, distribution of rights to purchase stock or securities, or distribution
of securities convertible into or exchangeable for stock hereafter made by the
Corporation to its stockholders shall not be taxable to the recipients. Except
as set forth in subsections (i), (ii) and (iii) above, the Conversion Price
shall not be adjusted for the issuance of Class A Common Stock, or any
securities convertible into or exchangeable for Class A Common Stock or
carrying the right to purchase any of the foregoing, in exchange for cash,
property or services.

(vi) The Corporation from time to time may decrease the
Conversion Price by any amount for any period of time if the period is at least
20 days and if the decrease is irrevocable during the period. Whenever the
Conversion Price is so decreased, the Corporation shall mail to holders of
record of shares of Class K Preferred Stock a notice of the decrease at least
15 days before the date the decreased Conversion Price takes effect, and such
notice shall state the decreased Conversion Price and the period it will be in
effect.

(b) Notwithstanding any other provision herein to the
contrary, in case of any merger or consolidation to which the Corporation is a
party (other than a merger or consolidation in which the Corporation is the
continuing entity and in which the Class A Common Stock outstanding immediately
prior to the merger or consolidation is not exchanged for cash, or the
securities or other property of another entity), or in the case of any sale or
transfer of all or substantially all of the Corporation's property and assets
to another entity, there will be no adjustment of the Conversion Price, and
lawful provision shall be made by the entity formed by such consolidation or
the entity whose securities, cash or other property will immediately after the
merger or consolidation be owned, by virtue of the merger or consolidation, by
the holders of Class A Common Stock immediately prior to the merger or
consolidation, or the entity which shall have acquired such assets of the
Corporation, such that each share of Class K Preferred Stock then outstanding
will, without the consent of the holder thereof, become convertible into the
kind and amount of securities, cash or other property receivable upon such
merger, consolidation, sale or transfer by a holder of the number of shares of
Class A Common Stock into which such share of Class K Preferred Stock was
convertible immediately prior to such merger, consolidation, sale or transfer
assuming such holder of Class A Common Stock did not exercise his rights of
election, if any, as to the kind or amount of securities, cash or other
property receivable upon such merger, consolidation, sale or transfer. In the
case of a cash merger of the Corporation into another entity or any other cash
transaction of the type mentioned in this Section 7.2(b), each share of Class K
Preferred Stock will thereafter be convertible at the Conversion Price in
effect at such time into the same amount of cash per share into which each
share of Class K Preferred Stock would have been convertible had

<PAGE> 223

such share been converted into Class A Common Stock immediately prior to the
effective date of such cash merger or other transaction. The foregoing
provisions of this Section 7.2(b) shall similarly apply to successive mergers,
consolidations, sales or transfers.

(c) If (i) the Corporation shall take any action that would
require an adjustment in the Conversion Price pursuant to Section 7.2; (ii) the
Corporation shall authorize the granting to the holders of the Class A Common
Stock generally of rights or warrants to subscribe for or purchase any shares
of stock of any class or series or of any other rights or warrants; (iii) there
shall be any reorganization or reclassification of the Class A Common Stock
(other than an event to which subsection (i) of Section 7.2(a) applies) or any
consolidation or merger to which the Corporation is a party or any sale or
transfer of all or substantially all of the assets of the Corporation, in each
case, for which approval of any stockholders of the Corporation is required; or
(iv) there shall be a voluntary or involuntary liquidation, dissolution or
winding up of the Corporation; then, in each such case, the Corporation shall
cause to be given to the holders of shares of Class K Preferred Stock and the
Transfer Agent as promptly as possible, but in any event at least 15 days prior
to the applicable date hereinafter specified, a notice stating (i) the date on
which a record is to be taken for the purpose of such action or granting of
rights or warrants, or, if a record is not to be taken, the date as of which
the holders of Class A Common Stock of record to be entitled to such dividend,
distribution, rights or warrants are to be determined, or (ii) the date on
which such reorganization, reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution or winding up is expected to become
effective or occur, and the date as of which it is expected that holders of
Class A Common Stock of record shall be entitled to exchange their shares of
Class A Common Stock for securities, cash or other property deliverable upon
such reorganization, reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution or winding up. Failure to give such notice or any
defect therein shall not affect the legality or validity of the proceedings
described in this Section 7.2(c).

(d) Whenever the Conversion Price is adjusted as herein
provided, (i) the Corporation shall promptly file with the Transfer Agent a
certificate setting forth the Conversion Price after such adjustment and a
brief statement of the facts requiring such adjustment and the manner of
computing the same, which certificate shall be conclusive evidence of the
correctness of such adjustment, and (ii) the Corporation shall mail or cause to
be mailed by first class mail, postage prepaid, as soon as practicable to each
holder of record of shares of Class K Preferred Stock a notice stating that the
Conversion Price has been adjusted and setting forth the adjusted Conversion
Price.

(e) In any case in which paragraph (a) of this Section 7.2
shall require that an adjustment be made immediately following a record date or
an effective date, the Corporation may elect to defer (but only until the
filing by the Corporation with the Transfer Agent of the certificate required
by subsection 7.2(d)) (i) issuing to

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the holder of any share of Class K Preferred Stock converted after such record
date or effective date the shares of Class A Common Stock issuable upon such
conversion in excess of the shares of Class A Common Stock issuable upon such
conversion on the basis of the Conversion Price prior to adjustment, and (ii)
paying to such holder any amount of cash in lieu of a fractional share.

(f) In the event that at any time, as a result of an
adjustment made pursuant to subsection (i) of Section 7.2(a), the holder of any
share of Class K Preferred Stock thereafter surrendered for conversion shall
become entitled to receive any shares of the Corporation other than shares of
Class A Common Stock, thereafter the Conversion Price of such other shares so
receivable upon conversion of any share of Class K Preferred Stock shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to Class A Common
Stock contained in this Section 7.2.

(g) The Corporation shall at all times reserve and keep
available, free from preemptive rights, out of the aggregate of its authorized
but unissued shares of Class A Common Stock, for the purpose of effecting
conversion of shares of Class K Preferred Stock, the full number of shares of
Class A Common Stock deliverable upon the conversion of all outstanding shares
of Class K Preferred Stock not theretofore converted and on or before (and as a
condition of) taking any action that would cause an adjustment of the
Conversion Price resulting in an increase in the number of shares of Class A
Common Stock deliverable upon conversion in excess of the number thereof
previously reserved and available therefor, the Corporation shall take all such
action so required. For purposes of this paragraph (g), the number of shares of
Class A Common Stock which shall be deliverable upon the conversion of all
outstanding shares of Class K Preferred Stock shall be computed as if at the
time of computation all such outstanding shares of Class K Preferred Stock were
held by a single holder (and without regard to the Ownership Limit).

Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value (if any) of the shares of Class A
Common Stock deliverable upon conversion of the shares of Class K Preferred
Stock, the Corporation shall take any corporate action which may, in the
opinion of its counsel, be necessary in order that the Corporation may validly
and legally issue fully paid and non-assessable shares of Class A Common Stock
at such adjusted Conversion Price.

(h) The Corporation will pay any and all documentary stamp,
issue or transfer taxes, and any other similar taxes, payable in respect of the
issue or delivery of shares of Class A Common Stock upon conversion of shares
of Class K Preferred Stock pursuant hereto; provided, however, that the
Corporation shall not be required to pay any tax that may be payable in respect
of any transfer involved in the issue or delivery of shares of Class A Common
Stock in a name other than that of the holder of the shares of Class K
Preferred Stock to be converted, and no such issue or delivery shall be made
unless and until the Person requesting such issue or delivery has paid to the
Corporation the amount of any such tax or established, to the reasonable
satisfaction of the Corporation, that such tax has been paid.

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(i) Notwithstanding anything to the contrary contained in
this Section 7, conversion of Class K Preferred Stock pursuant to this Section
7 shall be permitted only to the extent that such conversion would not result
in a violation of the Ownership Restrictions (as defined in the Charter).

8. RANKING.

Any class or series of capital stock of the Corporation shall be
deemed to rank:

(a) prior or senior to the Class K Preferred Stock, as to the
payment of dividends and as to distribution of assets upon liquidation,
dissolution or winding up, if the holders of such class or series shall be
entitled to the receipt of dividends and of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in preference or
priority to the holders of Class K Preferred Stock ("Senior Stock");

(b) on a parity with the Class K Preferred Stock, as to the
payment of dividends and as to distribution of assets upon liquidation,
dissolution or winding up, whether or not the dividend rates, dividend payment
dates or redemption or liquidation prices per share thereof be different from
those of the Class K Preferred Stock, if (i) such capital stock is Class B
Cumulative Convertible Preferred Stock, Class C Cumulative Preferred Stock,
Class D Cumulative Preferred Stock, Class G Cumulative Preferred Stock, Class H
Cumulative Preferred Stock or Class J Cumulative Convertible Preferred Stock of
the Corporation, or (ii) the holders of such class of stock or series and the
Class K Preferred Stock shall be entitled to the receipt of dividends and of
amounts distributable upon liquidation, dissolution or winding up in proportion
to their respective amounts of accrued and unpaid dividends per share or
liquidation preferences, without preference or priority of one over the other
(the capital stock referred to in clauses (i) and (ii) of this paragraph being
hereinafter referred to, collectively, as "Parity Stock"); and

(c) junior to the Class K Preferred Stock, as to the payment
of dividends and as to the distribution of assets upon liquidation, dissolution
or winding up, if (i) such capital stock or series shall be Common Stock or
(ii) the holders of Class K Preferred Stock shall be entitled to receipt of
dividends or of amounts distributable upon liquidation, dissolution or winding
up, as the case may be, in preference or priority to the holders of shares of
such class or series (the capital stock referred to in clauses (i) and (ii) of
this paragraph being hereinafter referred to, collectively, as "Junior Stock").

<PAGE> 226

9. VOTING.

(a) If and whenever six quarterly dividends (whether or not
consecutive) payable on the Class K Preferred Stock or any series or class of
Parity Stock shall be in arrears (which shall, with respect to any such
quarterly dividend, mean that any such dividend has not been paid in full),
whether or not earned or declared, the number of directors then constituting
the Board of Directors shall be increased by two (if not already increased by
reason of similar types of provisions with respect to shares of Parity Stock of
any other class or series which is entitled to similar voting rights (the
"Voting Preferred Stock")) and the holders of shares of Class K Preferred
Stock, together with the holders of shares of all other Voting Preferred Stock
then entitled to exercise similar voting rights, voting as a single class
regardless of series, shall be entitled to elect the two additional directors
to serve on the Board of Directors at any annual meeting of stockholders or
special meeting held in place thereof, or at a special meeting of the holders
of the Class K Preferred Stock and the Voting Preferred Stock called as
hereinafter provided. Whenever all arrears in dividends on the Class K
Preferred Stock and the Voting Preferred Stock then outstanding shall have been
paid and dividends thereon for the current quarterly dividend period shall have
been declared and paid, or declared and set apart for payment, then the right
of the holders of the Class K Preferred Stock and the Voting Preferred Stock to
elect such additional two directors shall cease (but subject always to the same
provision for the vesting of such voting rights in the case of any similar
future arrearages), and the terms of office of all persons elected as directors
by the holders of the Class K Preferred Stock and the Voting Preferred Stock
shall forthwith terminate and the number of directors constituting the Board of
Directors shall be reduced accordingly. At any time after such voting power
shall have been so vested in the holders of Class K Preferred Stock and the
Voting Preferred Stock, if applicable, the Secretary of the Corporation may,
and upon the written request of any holder of Class K Preferred Stock
(addressed to the Secretary at the principal office of the Corporation) shall,
call a special meeting of the holders of the Class K Preferred Stock and of the
Voting Preferred Stock for the election of the two directors to be elected by
them as herein provided, such call to be made by notice similar to that
provided in the Bylaws of the Corporation for a special meeting of the
stockholders or as required by law. If any such special meeting required to be
called as above provided shall not be called by the Secretary within 20 days
after receipt of any such request, then any holder of Class K Preferred Stock
may call such meeting, upon the notice above provided, and for that purpose
shall have access to the stock books of the Corporation. The directors elected
at any such special meeting shall hold office until the next annual meeting of
the stockholders or special meeting held in lieu thereof if such office shall
not have previously terminated as above provided. If any vacancy shall occur
among the directors elected by the holders of the Class K Preferred Stock and
the Voting Preferred Stock, a successor shall be elected by the Board of
Directors, upon the nomination of the then-remaining director elected by the
holders of the Class K Preferred Stock and the Voting Preferred Stock or the
successor of such remaining director, to serve until the next annual meeting of
the stockholders or special meeting held in place thereof if such office shall
not have previously terminated as provided above.

<PAGE> 227

(b) So long as any shares of Class K Preferred Stock are
outstanding, in addition to any other vote or consent of stockholders required
by law or by the Charter of the Corporation, the affirmative vote of at least
66-2/3% of the votes entitled to be cast by the holders of the Class K
Preferred Stock voting as a single class with the holders of all other classes
or series of Parity Stock entitled to vote on such matters, given in person or
by proxy, either in writing without a meeting or by vote at any meeting called
for the purpose, shall be necessary for effecting or validating:

(i) Any amendment, alteration or repeal of any
of the provisions of, or the addition of any provision to, these Articles
Supplementary, the Charter or the By-Laws of the Corporation that materially
adversely affects the voting powers, rights or preferences of the holders of
the Class K Preferred Stock; provided, however, that the amendment of the
provisions of the Charter so as to authorize or create, or to increase the
authorized amount of, or issue any Junior Stock or any shares of any class of
Parity Stock shall not be deemed to materially adversely affect the voting
powers, rights or preferences of the holders of Class K Preferred Stock; or

(ii) The authorization, creation of, increase in the
authorized amount of, or issuance of any shares of any class or series of
Senior Stock or any security convertible into shares of any class or series of
Senior Stock (whether or not such class or series of Senior Stock is currently
authorized); provided, however, that no such vote of the holders of Class K
Preferred Stock shall be required if, at or prior to the time when such
amendment, alteration or repeal is to take effect, or when the issuance of any
such Senior Stock or convertible or exchangeable security is to be made, as the
case may be, provision is made for the redemption of all shares of Class K
Preferred Stock at the time outstanding to the extent such redemption is
authorized by Section 5 of this Article.

For purposes of the foregoing provisions and all other voting rights
under these Articles Supplementary, each share of Class K Preferred Stock shall
have one (1) vote per share, except that when any other class or series of
preferred stock of the Corporation shall have the right to vote with the Class
K Preferred Stock as a single class on any matter, then the Class K Preferred
Stock and such other class or series shall have with respect to such matters
one quarter of one vote per $25 of stated liquidation preference. Except as
otherwise required by applicable law or as set forth herein or in the Charter,
the Class K Preferred Stock shall not have any relative, participating,
optional or other special voting rights and powers other than as set forth
herein, and the consent of the holders thereof shall not be required for the
taking of any corporate action.

10. RECORD HOLDERS.

The Corporation and the Transfer Agent may deem and treat the record
holder of any share of Class K Preferred Stock as the true and lawful owner
thereof for all purposes, and neither the Corporation nor the Transfer Agent
shall be affected by any notice to the contrary.

<PAGE> 228

11.1 RESTRICTIONS ON OWNERSHIP AND TRANSFERS.

(A) LIMITATION ON BENEFICIAL OWNERSHIP. Except as provided in
Section 11.8, from and after the Issue Date, no Person (other than the Initial
Holder or a Look-Through Entity) shall Beneficially Own shares of Class K
Preferred Stock in excess of the Ownership Limit, the Initial Holder shall not
Beneficially Own shares of Class K Preferred Stock in excess of the Initial
Holder Limit and no Look-Through Entity shall Beneficially Own shares of Class
K Preferred Stock in excess of the Look- Through Ownership Limit.

(B) TRANSFERS IN EXCESS OF OWNERSHIP LIMIT. Except as
provided in Section 11.8, from and after the Issue Date (and subject to Section
11.12), any Transfer (whether or not such Transfer is the result of
transactions entered into through the facilities of the NYSE or other
securities exchange or an automated inter-dealer quotation system) that, if
effective, would result in any Person (other than the Initial Holder or a
Look-Through Entity) Beneficially Owning shares of Class K Preferred Stock in
excess of the Ownership Limit shall be void ab initio as to the Transfer of
such shares of Class K Preferred Stock that would be otherwise Beneficially
Owned by such Person in excess of the Ownership Limit, and the intended
transferee shall acquire no rights in such shares of Class K Preferred Stock.

(C) TRANSFERS IN EXCESS OF INITIAL HOLDER LIMIT. Except as
provided in Section 11.8, from and after the Issue Date (and subject to Section
11.12), any Transfer (whether or not such Transfer is the result of
transactions entered into through the facilities of the NYSE or other
securities exchange or an automated inter-dealer quotation system) that, if
effective, would result in the Initial Holder Beneficially Owning shares of
Class K Preferred Stock in excess of the Initial Holder Limit shall be void ab
initio as to the Transfer of such shares of Class K Preferred Stock that would
be otherwise Beneficially Owned by the Initial Holder in excess of the Initial
Holder limit, and the Initial Holder shall acquire no rights in such shares of
Class K Preferred Stock.

(D) TRANSFERS IN EXCESS OF LOOK-THROUGH OWNERSHIP LIMIT.
Except as provided in Section 11.8 from and after the Issue Date (and subject
to Section 11.12), any Transfer (whether or not such Transfer is the result of
transactions entered into through the facilities of the NYSE or other
securities exchange or an automated inter-dealer quotation system) that, if
effective, would result in any Look-Through Entity Beneficially Owning shares
of Class K Preferred Stock in excess of the Look- Through Ownership limit shall
be void ab initio as to the Transfer of such shares of Class K Preferred Stock
that would be otherwise Beneficially Owned by such Look- Through Entity in
excess of the Look-Through Ownership Limit and such Look- Through Entity shall
acquire no rights in such shares of Class K Preferred Stock.

<PAGE> 229

(E) TRANSFERS RESULTING IN "CLOSELY HELD" STATUS. From and
after the Issue Date, any Transfer that, if effective would result in the
Corporation being "closely held" within the meaning of Section 856(h) of the
Code, or would otherwise result in the Corporation failing to qualify as a REIT
(including, without limitation, a Transfer or other event that would result in
the Corporation owning (directly or constructively) an interest in a tenant
that is described in Section 856(d)(2)(B) of the Code if the income derived by
the Corporation from such tenant would cause the Corporation to fail to satisfy
any of the gross income requirements of Section 856(c) of the Code) shall be
void ab initio as to the Transfer of shares of Class K Preferred Stock that
would cause the Corporation (i) to be "closely held" within the meaning of
Section 856(h) of the Code or (ii) otherwise fail to qualify as a REIT, as the
case may be, and the intended transferee shall acquire no rights in such shares
of Class K Preferred Stock.

(F) SEVERABILITY ON VOID TRANSACTIONS. A Transfer of a share
of Class K Preferred Stock that is null and void under Sections 11.1(B), (C),
(D), or (E) of this Article because it would, if effective, result in (i) the
ownership of Class K Preferred Stock in excess of the Initial Holder Limit, the
Ownership Limit, or the Look-Through Ownership Limit, (ii) the Corporation
being "closely held" within the meaning of Section 856(h) of the Code or (iii)
the Corporation otherwise failing to qualify as a REIT, shall not adversely
affect the validity of the Transfer of any other share of Class K Preferred
Stock in the same or any other related transaction.

11.2 REMEDIES FOR BREACH. If the Board of Directors or a committee
thereof shall at any time determine in good faith that a Transfer or other
event has taken place in violation of Section 11.1 of this Article or that a
Person intends to acquire or has attempted to acquire Beneficial Ownership of
any shares of Class K Preferred Stock in violation of Section 11.1 of this
Article (whether or not such violation is intended), the Board of Directors or
a committee thereof shall be empowered to take any action as it deems advisable
to refuse to give effect to or to prevent such Transfer or other event,
including, but not limited to, refusing to give effect to such Transfer or
other event on the books of the Corporation, causing the Corporation to redeem
such shares at the then current Market Price and upon such terms and conditions
as may be specified by the Board of Directors in its sole discretion
(including, but not limited to, by means of the issuance of long-term
indebtedness for the purpose of such redemption), demanding the repayment of
any distributions received in respect of shares of Class K Preferred Stock
acquired in violation of Section 11.1 of this Article or instituting
proceedings to enjoin such Transfer or to rescind such Transfer or attempted
Transfer; provided, however, that any Transfers or attempted Transfers (or, in
the case of events other than a Transfer, Beneficial Ownership) in violation of
Section 11.1 of this Article, regardless of any action (or non-action) by the
Board of Directors or such committee, (a) shall be void ab initio or (b) shall
automatically result in the transfer described in Section 11.3 of this Article;
provided, further, that the provisions of this Section 11.2 shall be subject to
the provisions of Section 11.12 of this Article; provided, further, that
neither the Board of Directors nor any committee thereof may exercise such
authority in a manner that interferes with any ownership or transfer of Class K
Preferred Stock that is expressly authorized pursuant to Section 11.8(C) of
this Article.

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<PAGE> 230

11.3. TRANSFER IN TRUST.

(A) ESTABLISHMENT OF TRUST. If, notwithstanding the other
provisions contained in this Article, at any time after the Issue Date there is
a purported Transfer (an "Excess Transfer") (whether or not such Transfer is
the result of transactions entered into through the facilities of the NYSE or
other securities exchange or an automated inter-dealer quotation system) or
other change in the capital structure of the Corporation (including, but not
limited to, any redemption of Equity Stock) or other event (including, but not
limited to, any acquisition of any share of Equity Stock) such that (a) any
Person (other than the Initial Holder or a Look-Through Entity) would
Beneficially Own shares of Class K Preferred Stock in excess of the Ownership
Limit, or (b) the Initial Holder would Beneficially Own shares of Class K
Preferred Stock in excess of the Initial Holder Limit, or (c) any Person that
is a Look-Through Entity would Beneficially Own shares of Class K Preferred
Stock in excess of the Look- Through Ownership Limit (in any such event, the
Person, Initial Holder or Look- Through Entity that would Beneficially Own
shares of Class K Preferred Stock in excess of the Ownership Limit, the Initial
Holder Limit or the Look-Through Entity Limit, respectively, is referred to as
a "Prohibited Transferee"), then, except as otherwise provided in Section 11.8
of this Article, such shares of Class K Preferred Stock in excess of the
Ownership Limit, the Initial Holder Limit or the Look-Through Ownership Limit,
as the case may be, (rounded up to the nearest whole share) shall be
automatically transferred to a Trustee in his capacity as trustee of a Trust
for the exclusive benefit of one or more Charitable Beneficiaries. Such
transfer to the Trustee shall be deemed to be effective as of the close of
business on the Business Day prior to the Excess Transfer, change in capital
structure or another event giving rise to a potential violation of the
Ownership Limit, the Initial Holder Limit or the Look- Through Entity Ownership
Limit.

(B) APPOINTMENT OF TRUSTEE. The Trustee shall be appointed by
the Corporation and shall be a Person unaffiliated with either the Corporation
or any Prohibited Transferee. The Trustee may be an individual or a bank or
trust company duly licensed to conduct a trust business.

(C) STATUS OF SHARES HELD BY THE TRUSTEE. Shares of Class K
Preferred Stock held by the Trustee shall be issued and outstanding shares of
capital stock of the Corporation. Except to the extent provided in Section
11.3(E), the Prohibited Transferee shall have no rights in the Class K
Preferred Stock held by the Trustee, and the Prohibited Transferee shall not
benefit economically from ownership of any shares held in trust by the Trustee,
shall have no rights to dividends and shall not possess any rights to vote or
other rights attributable to the shares held in the Trust.

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<PAGE> 231

(D) DIVIDEND AND VOTING RIGHTS. The Trustee shall have all
voting rights and rights to dividends with respect to shares of Class K
Preferred Stock held in the Trust, which rights shall be exercised for the
benefit of the Charitable Beneficiary. Any dividend or distribution paid prior
to the discovery by the Corporation that the shares of Class K Preferred Stock
have been transferred to the Trustee shall be repaid to the Corporation upon
demand, and any dividend or distribution declared but unpaid shall be rescinded
as void ab initio with respect to such shares of Class K Preferred Stock. Any
dividends or distributions so disgorged or rescinded shall be paid over to the
Trustee and held in trust for the Charitable Beneficiary. Any vote cast by a
Prohibited Transferee prior to the discovery by the Corporation that the shares
of Class K Preferred Stock have been transferred to the Trustee will be
rescinded as void ab initio and shall be recast in accordance with the desires
of the Trustee acting for the benefit of the Charitable Beneficiary. The owner
of the shares at the time of the Excess Transfer, change in capital structure
or other event giving rise to a potential violation of the Ownership Limit,
Initial Holder Limit or Look-Through Entity Ownership Limit shall be deemed to
have given an irrevocable proxy to the Trustee to vote the shares of Class K
Preferred Stock for the benefit of the Charitable Beneficiary.

(E) RESTRICTIONS ON TRANSFER. The Trustee of the Trust may
sell the shares held in the Trust to a Person, designated by the Trustee, whose
ownership of the shares will not violate the Ownership Restrictions. If such a
sale is made, the interest of the Charitable Beneficiary shall terminate and
proceeds of the sale shall be payable to the Prohibited Transferee and to the
Charitable Beneficiary as provided in this Section 11.3(E). The Prohibited
Transferee shall receive the lesser of (1) the price paid by the Prohibited
Transferee for the shares or, if the Prohibited Transferee did not give value
for the shares (through a gift, devise or other transaction), the Market Price
of the shares on the day of the event causing the shares to be held in the
Trust and (2) the price per share received by the Trustee from the sale or
other disposition of the shares held in the Trust. Any proceeds in excess of
the amount payable to the Prohibited Transferee shall be payable to the
Charitable Beneficiary. If any of the transfer restrictions set forth in this
Section 11.3(E) or any application thereof is determined in a final judgment to
be void, invalid or unenforceable by any court having jurisdiction over the
issue, the Prohibited Transferee may be deemed, at the option of the
Corporation, to have acted as the agent of the Corporation in acquiring the
Class K Preferred Stock as to which such restrictions would, by their terms,
apply, and to hold such Class K Preferred Stock on behalf of the Corporation.

(F) PURCHASE RIGHT IN STOCK TRANSFERRED TO THE TRUSTEE.
Shares of Class K Preferred Stock transferred to the Trustee shall be deemed to
have been offered for sale to the Corporation, or its designee, at a price per
share equal to the lesser of (i) the price per share in the transaction that
resulted in such transfer to the Trust (or, in the case of a devise or gift,
the Market Price at the time of such devise or gift) and (ii) the Market Price
on the date the Corporation, or its designee, accepts such offer. The
Corporation shall have the right to accept such offer for a period of

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<PAGE> 232

90 days after the later of (i) the date of the Excess Transfer or other event
resulting in a transfer to the Trust and (ii) the date that the Board of
Directors determines in good faith that an Excess Transfer or other event
occurred.

(G) DESIGNATION OF CHARITABLE BENEFICIARIES. By written
notice to the Trustee, the Corporation shall designate one or more nonprofit
organizations to be the Charitable Beneficiary of the interest in the Trust
relating to such Prohibited Transferee if (i) the shares of Class K Preferred
Stock held in the Trust would not violate the Ownership Restrictions in the
hands of such Charitable Beneficiary and (ii) each Charitable Beneficiary is an
organization described in Sections 170(b)(1)(A), 170(c)(2) and 501(c)(3) of the
Code.

11.4 NOTICE OF RESTRICTED TRANSFER. Any Person that acquires or
attempts to acquire shares of Class K Preferred Stock in violation of Section
11.1 of this Article, or any Person that is a Prohibited Transferee such that
stock is transferred to the Trustee under Section 11.3 of this Article, shall
immediately give written notice to the Corporation of such event and shall
provide to the Corporation such other information as the Corporation may
request in order to determine the effect, if any, of such Transfer or attempted
Transfer or other event on the Corporation's status as a REIT. Failure to give
such notice shall not limit the rights and remedies of the Board of Directors
provided herein in any way.

11.5 OWNERS REQUIRED TO PROVIDE INFORMATION. From and after the Issue
Date certain record and Beneficial Owners and transferees of shares of Class K
Preferred Stock will be required to provide certain information as set out
below.

(A) ANNUAL DISCLOSURE. Every record and Beneficial Owner of
more than 5% (or such other percentage between 0.5% and 5%, as provided in the
applicable regulations adopted under the Code) of the number of Outstanding
shares of Class K Preferred Stock shall, within 30 days after January 1 of each
year, give written notice to the Corporation stating the name and address of
such record or Beneficial Owner, the number of shares of Class K Preferred
Stock Beneficially Owned, and a full description of how such shares are held.
Each such record or Beneficial Owner of Class K Preferred Stock shall, upon
demand by the Corporation, disclose to the Corporation in writing such
additional information with respect to the Beneficial Ownership of the Class K
Preferred Stock as the Board of Directors, in its sole discretion, deems
appropriate or necessary to (i) comply with the provisions of the Code
regarding the qualification of the Corporation as a REIT under the Code and
(ii) ensure compliance with the Ownership Limit, the Initial Holder Limit or
the Look- Through Ownership Limit, as applicable. Each stockholder of record,
including without limitation any Person that holds shares of Class K Preferred
Stock on behalf of a Beneficial Owner, shall take all reasonable steps to
obtain the written notice described in this Section 11.5 from the Beneficial
Owner.

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(B) DISCLOSURE AT THE REQUEST OF THE CORPORATION. Any Person
that is a Beneficial Owner of shares of Class K Preferred Stock and any Person
(including the stockholder of record) that is holding shares of Class K
Preferred Stock for a Beneficial Owner, and any proposed transferee of shares,
shall provide such information as the Corporation, in its sole discretion, may
request in order to determine the Corporation's status as a REIT, to comply
with the requirements of any taxing authority or other governmental agency, to
determine any such compliance or to ensure compliance with the Ownership Limit,
the Initial Holder Limit and the Look- Through Ownership Limit, and shall
provide a statement or affidavit to the Corporation setting forth the number
of shares of Class K Preferred Stock already Beneficially Owned by such
stockholder or proposed transferee and any related persons specified, which
statement or affidavit shall be in the form prescribed by the Corporation for
that purpose.

11.6 REMEDIES NOT LIMITED. Nothing contained in this Article shall
limit the authority of the Board of Directors to take such other action as it
deems necessary or advisable (subject to the provisions of Section 11.12 of
this Article) (i) to protect the Corporation and the interests of its
stockholders in the preservation of the Corporation's status as a REIT and
(ii) to insure compliance with the Ownership Limit, the Initial Holder Limit
and the Look-Through Ownership Limit.

11.7 AMBIGUITY. In the case of an ambiguity in the application of any
of the provisions of Section 11 of this Article, or in the case of an ambiguity
in any definition contained in Section 11 of this Article, the Board of
Directors shall have the power to determine the application of the provisions
of this Article with respect to any situation based on its reasonable belief,
understanding or knowledge of the circumstances.

11.8 EXCEPTIONS. The following exceptions shall apply or may be
established with respect to the limitations of Section 11.1 of this Article.

(A) WAIVER OF OWNERSHIP LIMIT. The Board of Directors, upon
receipt of a ruling from the Internal Revenue Service or an opinion of tax
counsel or other evidence or undertaking acceptable to it, may waive the
application, in whole or in part, of the Ownership Limit to a Person subject to
the Ownership Limit, if such person is not an individual for purposes of
Section 542(a) of the Code and is a corporation, partnership, estate or trust.
In connection with any such exemption, the Board of Directors may require such
representations and undertakings from such Person and may impose such other
conditions as the Board of Directors deems necessary, in its sole discretion,
to determine the effect, if any, of the proposed Transfer on the Corporation's
status as a REIT.

(B) PLEDGE BY INITIAL HOLDER. Notwithstanding any other
provision of this Article, the pledge by the Initial Holder of all or any
portion of the Class K Preferred Stock directly owned at any time or from time
to time shall not constitute a violation of Section 11.1 of this Article and
the pledgee shall not be subject to the Ownership Limit with respect to the
Class K Preferred Stock so pledged to it either as a result of the pledge or
upon foreclosure.

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(C) UNDERWRITERS. For a period of 270 days (or such longer
period of time as any underwriter described below shall hold an unsold
allotment of Class K Preferred Stock) following the purchase of Class K
Preferred Stock by an underwriter that (i) is a corporation, partnership or
other legal entity and (ii) participates in an offering of the Class K
Preferred Stock, such underwriter shall not be subject to the Ownership Limit
with respect to the Class K Preferred Stock purchased by it as a part of or in
connection with such offering and with respect to any Class K Preferred Stock
purchased in connection with market making activities.

11.9 LEGEND. Each certificate for Class K Preferred Stock shall bear
substantially the following legend:

"The shares of Class K Convertible Cumulative Preferred Stock
represented by this certificate are subject to restrictions on
transfer. No person may Beneficially Own shares of Class K Convertible
Cumulative Preferred Stock in excess of the Ownership Restrictions, as
applicable, with certain further restrictions and exceptions set forth
in the Charter (including the Articles Supplementary setting forth the
terms of the Class K Convertible Cumulative Preferred Stock). Any
Person that attempts to Beneficially Own shares of Class K Convertible
Cumulative Preferred Stock in excess of the applicable limitation must
immediately notify the Corporation. All capitalized terms in this
legend have the meanings ascribed to such terms in the Charter
(including the Articles Supplementary setting forth the terms of the
Class K Convertible Cumulative Preferred Stock), as the same may be
amended from time to time, a copy of which, including the restrictions
on transfer, will be sent without charge to each stockholder that so
requests. If the restrictions on transfer are violated (i) the
transfer of the shares of Class K Convertible Cumulative Preferred
Stock represented hereby will be void in accordance with the Charter
(including the Articles Supplementary setting forth the terms of the
Class K Convertible Cumulative Preferred Stock) or (ii) the shares of
Class K Convertible Cumulative Preferred Stock represented hereby will
automatically be transferred to a Trustee of a Trust for the benefit
of one or more Charitable Beneficiaries."

11.10 SEVERABILITY. If any provision of this Article or any
application of any such provision is determined in a final and unappealable
judgment to be void, invalid or unenforceable by any Federal or state court
having jurisdiction over the issues, the validity and enforceability of the
remaining provisions shall not be affected and other applications of such
provision shall be affected only to the extent necessary to comply with the
determination of such court.

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FOURTH: The terms of the Class K Cumulative Preferred Stock set forth
in Article Third hereof shall become Article XXI of the Charter.

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IN WITNESS WHEREOF, the Corporation has caused these presents to be
signed in its name and on its behalf by its Senior Vice President and Chief
Financial Officer and witnessed by its Assistant Secretary on February 17,
1999.

WITNESS: APARTMENT INVESTMENT AND
MANAGEMENT COMPANY

/s/ LUCY CORDOVA /s/ TROY D. BUTTS
- ----------------------------- --------------------------------
Lucy Cordova Troy D. Butts
Assistant Secretary Senior Vice President and
Chief Financial Officer

THE UNDERSIGNED, Senior Vice President and Chief Financial Officer of
APARTMENT INVESTMENT AND MANAGEMENT COMPANY, who executed on behalf of the
Corporation the Articles Supplementary of which this Certificate is made a
part, hereby acknowledges in the name and on behalf of said Corporation the
foregoing Articles Supplementary to be the corporate act of said Corporation
and hereby certifies that the matters and facts set forth herein with respect
to the authorization and approval thereof are true in all material respects
under the penalties of perjury.

/s/ TROY D. BUTTS
--------------------------------
Troy D. Butts
Senior Vice President and
Chief Financial Officer

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ARTICLES OF MERGER

BETWEEN

INSIGNIA PROPERTIES TRUST

AND

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

Apartment Investment and Management Company, a corporation organized
and existing under the laws of the State of Maryland ("AIMCO"), and Insignia
Properties Trust, a real estate investment trust organized and existing under
the laws of the State of Maryland ("IPT"), do hereby certify to the State
Department of Assessments and Taxation of Maryland (the "SDAT") as follows:

FIRST: AIMCO and IPT agree that IPT shall be merged with and into AIMCO
(the "Merger").

SECOND: AIMCO shall be the surviving entity of the Merger (the
"Surviving Entity").

THIRD: These Articles of Merger, which may be executed in counter
parts, shall become effective at 5:00 p.m. EST on the date these Articles of
Merger are accepted for record by the SDAT (the "Effective Time").

FOURTH: Both AIMCO and IPT were organized and exist under the laws of
the State of Maryland.

FIFTH: The principal office of each of AIMCO and IPT in the State of
Maryland is, and the principal office of the Surviving Entity immediately
following the Effective Time will be, located in the City of Baltimore.

SIXTH: IPT owns no interest in land located in the State of Maryland.

SEVENTH: The charter of AIMCO will not be amended as a result of the
Merger.

<PAGE> 238

EIGHTH: The total number of shares of all classes of stock which each
entity party to these Articles of Merger has the authority to issue and the
number of shares of each class are as follows:

a. AIMCO

The total number of shares of all classes of stock which AIMCO
has authority to issue is 510,587,500 shares, consisting of 478,277,500 shares
of Class A Common Stock, par value $.01 per share (the "AIMCO Common Stock");
100,000 shares of Class B Common Stock, par value $.01 per share; and 32,210,000
shares of Preferred Stock, par value $.01 per share, of which 750,000 shares
have been designated as Class B Cumulative Convertible Preferred Stock, par
value $.01 per share; 2,760,000 shares have been designated as Class C
Cumulative Preferred Stock, par value $.01 per share; 4,600,000 shares have been
designated as Class D Cumulative Preferred Stock, par value $.01 per share;
10,000,000 shares have been designated as Class E Cumulative Convertible
Preferred Stock, par value $.01 per share; 4,050,000 shares have been designated
as Class G Cumulative Preferred Stock, par value $.01 per share; 2,300,000
shares have been designated as Class H Cumulative Preferred Stock, par value
$.01 per share; 2,000,000 shares have been designated as Class J Cumulative
Convertible Preferred Stock, par value $.01 per share; and 5,750,000 shares have
been designated as Class K Cumulative Convertible Preferred Stock, par value
$.01 per share. The aggregate par value of all classes of stock of AIMCO having
par value is $5,105,875.

b. IPT

The total number of shares of beneficial interest (the "IPT
Shares") which IPT has authority to issue is 500,000,000 shares, consisting of
400,000,000 common shares of beneficial interest, par value $.01 per share (the
"IPT Common Shares"); and 100,000,000 preferred shares of beneficial interest,
par value $.01 per share. The aggregate par value of the IPT Shares is
$5,000,000.

NINTH: At the Effective Time, IPT shall be merged with and into AIMCO;
and thereupon, the Surviving Entity shall possess any and all purposes and
powers of IPT; and all leases, licenses, property, rights, privileges and powers
of whatever nature and description of IPT shall be transferred to, vested in and
devolved upon the Surviving Entity, without further act or deed, subject to all
of the debts and obligations of IPT.

<PAGE> 239

TENTH: The issued and outstanding securities of IPT shall be converted
at the Effective Time as follows:

a. Subject to Article TENTH paragraph (c), each IPT Common Share issued
and outstanding immediately prior to the Effective Time, other than IPT Common
Shares cancelled according to Article TENTH paragraph (b) (the "Out standing IPT
Common Shares"), shall be converted into and become the right to receive 0.3601
shares of AIMCO Common Stock (together with cash in lieu of fractional interests
pursuant to paragraph (e) of Article TENTH, the "Merger Consideration"), all as
further described in that certain Second Amended and Restated Agreement and Plan
of Merger, dated as of January 22, 1999 (the "Merger Agreement"), by and
between AIMCO and IPT.

b. Each IPT Common Share owned, directly or indirectly, by AIMCO, IPT,
or any of their respective subsidiaries immediately prior to the Effective Time
shall, at the Effective Time, automatically be cancelled and retired and shall
cease to exist, and no Merger Consideration or other consideration shall be
issued or delivered in exchange therefor.

c. Each restricted IPT Common Share awarded under the Insignia
Properties Trust 1997 Share Incentive Plan (the "IPT Share Plan") which is
outstanding and unvested at the Effective Time (each a "Restricted Share") shall
be converted, at the Effective Time, into 0.3601 restricted shares of AIMCO
Common Stock ("AIMCO Restricted Shares"). Each such AIMCO Restricted Share shall
have, and be subject to, the same terms and conditions (including rights to
Dividend Equivalents (as defined in the IPT Share Plan)) set forth in the IPT
Share Plan and the applicable restricted share agreement, each as in effect
immediately prior to the Effective Time.

d. All of the Outstanding IPT Common Shares, when so converted in
accordance with this Article TENTH and the Merger Agreement, shall no longer be
outstanding and shall automatically be cancelled and retired and shall cease to
exist, and each holder of a certificate (an "IPT Certificate") which,
immediately prior to the Effective Time, evidenced Outstanding IPT Common Shares
shall cease to have any rights with respect thereto, except (i) the right to
receive any dividend or other distribution on IPT Common Shares with a record
date prior to the Effective Time and (ii) upon surrender of such IPT
Certificate, (x) the right to receive the Merger Consideration and (y) any
dividend or other distribution on the AIMCO Common

3
<PAGE> 240
Stock with a record date on or after the date on which the Effective Time
occurs and paid prior to the time such IPT Certificate is surrendered.

e. (i) No scrip or fractional share certificate for AIMCO Common
Stock will be issued upon the surrender for exchange of IPT Certificates, and an
outstanding fractional share interest will not entitle the owner thereof to
vote, to receive dividends or to any rights of a stockholder of AIMCO or of the
Surviving Entity with respect to such fractional share interest.

(ii) In lieu of any fractional shares of AIMCO Common Stock,
each holder of an IPT Common Share that otherwise would be entitled to a
fractional share of AIMCO Common Stock shall receive a cash payment in lieu of
such fractional share of AIMCO Common Stock equal to such shareholder's
proportionate interest in a share of AIMCO Common Stock multiplied by $38.0656.

f. As of the Effective Time, all other shares of beneficial interest of
IPT shall be cancelled and retired and shall cease to exist, and no Merger
Consideration or other consideration shall be issued or delivered in exchange
therefor.

ELEVENTH: The terms and conditions of the transaction described in
these Articles of Merger were duly authorized and approved by IPT in the manner
and by the vote required by the laws of the State of Maryland and the
declaration of trust of IPT and the bylaws of IPT, as follows:

a. The Board of Trustees of IPT, at a meeting of the IPT Board of
Trustees duly called and held, adopted a resolution deeming the Merger advisable
and in the best interest of IPT and directing that the Merger, the Merger
Agreement and the transactions contemplated by the Merger Agreement be submitted
for consideration by the shareholders of IPT.

b. The shareholders of IPT entitled to vote on the Merger, Merger
Agreement and the transactions contemplated by the Merger Agreement, at a
meeting duly called and held, adopted a resolution approving the Merger, the
Merger Agreement and the transactions contemplated by the Merger Agreement, and
such resolution was filed with the records of meetings of the shareholders of
IPT.

4
<PAGE> 241

TWELFTH: The terms and conditions of the Merger were duly authorized
and approved by AIMCO in the manner and by the vote required by the laws of the
State of Maryland and the charter and bylaws of AIMCO, as follows:

a. The Board of Directors of AIMCO adopted a resolution deeming the
Merger advisable and in the best interest of AIMCO.

b. Pursuant to Section 3-105(a)(5)(i) of the Maryland General
Corporation Law, no vote of the stockholders of AIMCO was required or obtained
to approve the Merger.

THIRTEENTH: Each undersigned President acknowledges these Articles of
Merger to be the act of the respective party on whose behalf he has signed, and
further, as to all matters and facts required to be verified under oath, each
undersigned President acknowledges, that to the best of his knowledge,
information and belief, the matters and facts relating to the entity on whose
behalf he has signed are true in all material respects and that this statement
is made under the penalties for perjury.

5
<PAGE> 242

IN WITNESS WHEREOF, these Articles of Merger have been duly executed on behalf
of the parties hereto this 26th day of February, 1999.

<TABLE>
<S> <C>
ATTEST: INSIGNIA PROPERTIES TRUST

/s/ JEFFREY P. COHEN By: /s/ PETER K. KOMPANIEZ
- ------------------------------------ ------------------------------------
Jeffrey P. Cohen Name: Peter K. Kompaniez
Secretary Title: President

ATTEST: APARTMENT INVESTMENT AND
MANAGEMENT COMPANY

/s/ JOEL F. BONDER By: /s/ PETER K. KOMPANIEZ
- ------------------------------------ ------------------------------------
Joel F. Bonder Name: Peter K. Kompaniez
Secretary Title: President

</TABLE>

<PAGE> 1
EXHIBIT 3.2

AMENDED AND RESTATED BYLAWS

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

<PAGE> 2

TABLE OF CONTENTS

PAGE
----
<S> <C> <C>
ARTICLE I OFFICES............................................................ 1

Section 1. Registered Office.................................................. 1
Section 2. Other Offices...................................................... 1

ARTICLE II STOCK.............................................................. 1

Section 1. Certificates Representing Stock.................................... 1
Section 2. Fractional Share Interests or Scrip................................ 2
Section 3. Share Transfers.................................................... 2
Section 4. Record Date for Stockholders....................................... 3
Section 5. Meaning of Certain Terms........................................... 3

ARTICLE III STOCKHOLDERS....................................................... 4

Section 1. Stockholder Meetings............................................... 4
Section 2. Informal Action.................................................... 7

ARTICLE IV BOARD OF DIRECTORS................................................. 7

Section 1. Functions and Definition........................................... 7
Section 2. Qualifications and Number.......................................... 8
Section 3. Election and Term.................................................. 8
Section 4. Meetings............................................................ 8
Section 5. Removal of Directors................................................ 9
Section 6. Committees......................................................... 10
Section 7. Informal Action.................................................... 10

ARTICLE V OFFICERS........................................................... 10

Section 1. Officers........................................................... 10
Section 2. Election of Officers............................................... 10
Section 3. Subordinate Officers............................................... 11
Section 4. Compensation of Officers........................................... 11
Section 5. Term of Office; Removal and Vacancies.............................. 11
Section 6. Chairman of the Board.............................................. 11
</TABLE>

<PAGE> 3

<TABLE>

<S> <C> <C>
Section 7. Vice Chairman of the Board......................................... 11
Section 8. President.......................................................... 11
Section 9. Vice President..................................................... 12
Section 10. Secretary.......................................................... 12
Section 11. Assistant Secretaries.............................................. 12
Section 12. Treasurer.......................................................... 12
Section 13. Assistant Treasurer................................................ 13

ARTICLE VI INDEMNIFICATION OF DIRECTORS, OFFICERS,
EMPLOYEES AND OTHER AGENTS......................................... 13

ARTICLE VII STOCK LEDGER....................................................... 14

ARTICLE VIII GENERAL PROVISIONS................................................. 14

Section 1. Dividends.......................................................... 14
Section 2. Payment of Dividends............................................... 14
Section 3. Checks............................................................. 14
Section 4. Fiscal Year........................................................ 14
Section 5. Corporate Seal..................................................... 14
Section 6. Manner of Giving Notice........................................... 15
Section 7. Waiver of Notice................................................... 15
Section 8. Annual Statement................................................... 15
Section 9. Record Keeping..................................................... 15

ARTICLE IX AMENDMENTS......................................................... 15
</TABLE>

<PAGE> 4

AMENDED AND RESTATED BYLAWS

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

ARTICLE I
OFFICES

Section 1. Registered Office. The address of the initial principal
office of the corporation in the State of Maryland and the name and the address
of the initial resident agent of the corporation in the State of Maryland are
set forth in the Articles of Incorporation.

Section 2. Other Offices. The corporation may also have offices at
such other places both within and without the State of Maryland as the Board of
Directors may from time to time determine or the business of the corporation may
require.

ARTICLE II
STOCK

Section 1. Certificates Representing Stock. Certificates
representing shares of stock shall set forth thereon the statements prescribed
by Section 2-211 of the Maryland General Corporation Law and by any other
applicable provision of law and shall be signed by the President or the Chairman
of the Board, if any, or a Vice-President and countersigned by the Secretary or
an Assistant Secretary or the Treasurer or an Assistant Treasurer and may be
sealed with the corporate seal or a facsimile of it or in any other form. The
signatures of any such officers may be either manual or facsimile signatures. In
case any such officer who has signed manually or by facsimile any such
certificate ceases to be such officer before the certificate is issued, it may
nevertheless be issued by the corporation with the same effect as if the officer
had not ceased to be such officer as of the date of its issue.

No certificate representing shares of stock shall be issued for any
share of stock until such share is fully paid, except as otherwise authorized by
the provisions of Section 2-210 of the Maryland General Corporation Law.

<PAGE> 5

The corporation may issue a new certificate of stock in place of any
certificate theretofore issued by it, alleged to have been lost, stolen, or
destroyed, and the Board of Directors may, in its discretion, require the owner
of any such certificate to give bond, with sufficient surety, to the corporation
to indemnify it against any loss or claim that may arise by reason of the
issuance of a new certificate.

Upon compliance with the provisions of Section 2-514 of the Maryland
General Corporation Law, the Board of Directors of the corporation may adopt by
resolution a procedure by which a stockholder of the corporation may certify in
writing to the corporation that any shares registered in the name of the
stockholder are held for the account of a specified person other than the
stockholder.

Section 2. Fractional Share Interests or Scrip. The corporation
may, but shall not be obliged to, issue fractional shares of stock, eliminate a
fractional interest by rounding off to a full share of stock, arrange for the
disposition of a fractional interest by the person entitled to it, pay cash for
the fair value of a fractional share of stock determined as of the time when the
person entitled to receive it is determined, or issue scrip or other evidence of
ownership which shall entitle its holder to exchange such scrip or other
evidence of ownership aggregating a full share for a certificate which
represents the share; but such scrip or other evidence of ownership shall not,
unless otherwise provided, entitle the holder to exercise any voting right, or
to receive dividends thereon or to participate in any of the assets of the
corporation in the event of liquidation. The Board of Directors may impose any
reasonable condition on the issuance of scrip or other evidence of ownership,
and may cause such scrip or evidence of ownership to be issued subject to the
condition that it shall become void if not exchanged for a certificate
representing a full share of stock before a specified date or subject to the
condition that the shares for which such scrip or evidence of ownership is
exchangeable may be sold by the corporation and the proceeds thereof distributed
to the holders of such scrip or evidence of ownership, or subject to a provision
for forfeiture of such proceeds to the corporation if not claimed within a
period of not less than three years from the date the scrip or other evidence of
ownership was originally issued.

Section 3. Share Transfers. Upon compliance with provisions
restricting the transferability of shares of stock, if any, transfers of shares
of stock of the corporation shall be made only on the stock transfer books of
the corporation by the record holder thereof, or by his attorney thereunto
authorized by power of attorney duly executed and filed with the Secretary of
the corporation or with a transfer agent or a registrar, if any, and on
surrender of the certificate or certificates for such shares of stock properly
endorsed and the payment of all taxes due thereon, if any.

<PAGE> 6

Section 4. Record Date for Stockholders. The Board of Directors
may set a record date or direct that the stock transfer books be closed for a
stated period for the purpose of making any proper determination with respect to
stockholders, including which stockholders are entitled to notice of a meeting,
to vote at a meeting, to receive a dividend, or to be allotted other rights;
provided, that, except as may be otherwise provided herein, any such record date
may not be prior to the close of business on the day the record date is fixed,
shall be not more than ninety days before the date on which the action requiring
the determination will be taken, that any such closing of the transfer books may
not be for a period longer than twenty days, and that, in the case of a meeting
of stockholders, any such record date or any such closing of the transfer books
shall be at least ten days before the date of the meeting. If a record date is
not set, and, if the stock transfer books are not closed, the record date for
determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be the later of either the close of business on the day on
which notice of the meeting is mailed or the thirtieth day before the meeting,
and the record date for determining stockholders entitled to receive payment or
a dividend or an allotment of any rights shall be the close of business on the
date on which the resolution of the Board of Directors declaring the dividend or
allotment of rights is adopted, by any such payment of a dividend or allotment
of rights shall not be made more than sixty days after the date on which the
resolution is adopted; and a meeting of stockholders convened on the date for
which it was called may be adjourned from time to time without further notice to
a date not more than one hundred and twenty days after the original record date.

Section 5. Meaning of Certain Terms. As used herein in respect of
the right to notice of a meeting of stockholders or a waiver thereof or to
participate or vote thereat or to consent or dissent in writing in lieu of a
meeting, as the case may be, the term "share of stock" or "shares of stock" or
"stockholder" or "stockholders" refers to an outstanding share or shares of
stock and to a holder or holders of record of outstanding shares of stock when
the corporation is authorized to issue only one class of shares of stock. Said
reference is also intended to include any outstanding share or shares of stock
and any holder or holders of record of outstanding shares of stock of any class
or series upon which or upon whom the Articles of Incorporation confer such
rights where there are two or more classes or series of shares or upon which or
upon whom the provisions of the Maryland General Corporation Law may confer such
rights or the right of dissent notwithstanding that the Articles of
Incorporation may provide for more than one class or series of shares of stock,
one or more of which are limited or denied such rights thereunder.

<PAGE> 7

ARTICLE III
STOCKHOLDERS

Section 1. Stockholder Meetings.

(a) TIME.

(i) Annual Meetings. The corporation shall hold an
annual meeting of its stockholders to elect directors and transact any other
business within its powers, either at 9:00 a.m. on the second Tuesday of May in
each year if not a legal holiday, or at such other time or such other day
falling on or before the 30th day thereafter as shall be set by the Board of
Directors.

(ii) Special Meetings. At any time in the interval
between annual meetings, a special meeting of the stockholders may be called by
the Chairman of the Board or the Vice-Chairman of the Board or the President or
by a majority of the Board of Directors by vote at a meeting or in writing
(addressed to the Secretary of the corporation) with or without a meeting.
Special meetings of the stockholders shall be called as may be required by law.

(b) PLACE. Annual meetings and special meetings shall be
held at such place, either within the State of Maryland or at such other place
within the United States, as the directors may, from time to time, set. Whenever
the directors shall fail to set such place, or, whenever stockholders entitled
to call a special meeting shall call the same, and a place of meeting is not
set, the meeting shall be held at the principal office of the corporation in the
State of Maryland.

(c) CALL. Annual meetings may be called by the directors or
the President or by any officer instructed by the directors or the President to
call the meeting. Except as may be otherwise provided by the provisions of the
Maryland General Corporation Law, special meetings may be called in like manner.
Special meetings shall also be called by the Secretary whenever the holders of
shares entitled to at least twenty-five percent of all the votes entitled to be
cast at such meeting shall make a written request that such meeting be called.

<PAGE> 8

(d) NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER OF NOTICE.
Written notice of all meetings shall be given by the Secretary and shall state
the time and place of the meeting. The notice of an annual meeting shall state
that the meeting is called for the election of directors and for the transaction
of other business which may properly come before the meeting, and shall (if any
other action which could be taken at a special meeting is to be taken at such
annual meeting) contain any additional statements required in a notice of a
special meeting, and shall include a copy of any requisite statements or
provisions prescribed by the provisions of the Maryland General Corporation Law;
provided, however, that any business of the corporation may be transacted at any
annual meeting without being specially noticed unless the provisions of the
Maryland General Corporation Law provide otherwise. The notice of a special
meeting shall in all instances state the purpose or purposes for which the
meeting is called and shall include a copy of any requisite statements or
provisions prescribed by the provisions of the Maryland General Corporation Law.
Written notice of any meeting shall be given to each stockholder either by mail
at the address as it appears on the records of the corporation or by personal
delivery to such stockholder or by leaving such notice at his residence or usual
place of business not less than ten days and not more than ninety days before
the date of the meeting, unless any provision of the Maryland General
Corporation Law shall prescribe a different period of time. If mailed, notice
shall be deemed to be given when deposited in the United States mail addressed
to the stockholder at his address as it appears on the records of the
corporation with postage thereon prepaid. Whenever any notice of the time, place
or purpose of any meeting of stockholders is required to be given under the
provisions of the Articles of Incorporation, these Bylaws or of the provisions
of the Maryland General Corporation Law, such notice may be waived by a writing
signed by the stockholder and filed with records of the meeting, whether before
or after the holding thereof, or by his presence in person or by proxy at the
meeting. The foregoing requirements of notice shall also apply, whenever the
corporation shall have any class of stock which is not entitled to vote, to
holders of stock who are not entitled to vote at the meeting, but who are
entitled to notice thereof and to dissent from any action taken thereat.

(e) STATEMENT OF AFFAIRS. The President of the corporation,
or, if the Board of Directors shall determine otherwise, some other executive
officer thereof, shall prepare or cause to be prepared annually a full and
correct statement of the affairs of the corporation, including a balance sheet
and a financial statement of operations for the preceding fiscal year, which
shall be submitted at the Annual Meeting and placed on file within twenty days
thereafter at the principal office of the corporation in the State of Maryland.

<PAGE> 9

(f) CONDUCT OF MEETINGS. Meetings of the stockholders shall
be presided over by one of the following officers in the order of seniority and
if present and acting: the Chairman of the Board, if any, the Vice-Chairman of
the Board, if any, the President, a Vice-President, or, if none of the foregoing
is in office and present and acting, by a chairman to be chosen by the
stockholders. The Secretary of the corporation, or in his absence, an Assistant
Secretary, shall act as secretary of every meeting, but if neither the Secretary
nor an Assistant Secretary is present the Chairman of the meeting shall appoint
a secretary of the meeting.

(g) ADJOURNMENT. Whether or not a quorum is present, a
meeting of stockholders convened on the date for which it was called may be
adjourned from time to time without further notice by the Chairman of the
meeting, or by a majority vote of the stockholders present in person or by
proxy, to a date not more than 120 days after the original record date. Any
business which might have been transacted at the meeting as originally notified
may be deferred and transacted at any such adjourned meeting at which a quorum
shall be present.

(h) PROXY REPRESENTATION. Every stockholder may authorize
another person or persons to act for him by proxy in all matters in which a
stockholder is entitled to participate, whether for the purposes of determining
his presence at a meeting, or whether by waiving notice of any meeting, voting
or participating at a meeting, or expressing consent or dissent without a
meeting, or otherwise. Every proxy shall be executed in writing by the
stockholder or by his duly authorized attorney in fact, and filed with the
Secretary of the corporation. No proxy shall be valid more than eleven months
from the date of its execution, unless the proxy provides otherwise.

(i) INSPECTORS OF ELECTION. The directors, in advance of any
meeting, may, but need not, appoint one or more inspectors to act at the meeting
or any adjournment thereof. If an inspector or inspectors are not appointed, the
person presiding at the meeting may, but need not, appoint one or more
inspectors. In case any person who may be appointed as an inspector fails to
appear or act, the vacancy may be filled by appointment made by the directors in
advance of the meeting or at the meeting, by the person presiding thereat. Each
inspector, if any, before entering upon the discharge of his duties, shall take
and sign an oath faithfully to execute the duties of inspector at such meeting
with strict impartiality and according to the best of his ability. The
inspectors, if any, shall determine the number of shares outstanding and the
voting power of each, the shares presented at the meeting, the existing of a
quorum, the validity and effect of proxies,

<PAGE> 10

and shall receive votes, ballots or consents, hear and determine all challenges
and questions arising in connection with the right to vote, count and tabulate
all votes, ballots or consents, determine the result, and do such acts as are
proper to conduct the election or vote with fairness to all stockholders. On
request of the person presiding at the meeting or any stockholder, the inspector
or inspectors, if any, shall make a report in writing of any challenge, question
or matter determined by him or them and execute a certificate of any fact found
by him or them.

(j) QUORUM. Except as may otherwise be required by the
provisions of the Maryland General Corporation Law, the Articles of
Incorporation, or these Bylaws, the presence in person or by proxy at a meeting
of the stockholders entitled to cast at least a majority of the votes entitled
to be cast at the meeting shall constitute a quorum.

(k) VOTING. Each share of stock shall entitle the holder
thereof to one vote on each matter submitted to a vote at a meeting of
stockholders except in the election of directors, at which each share of stock
may be voted for as many individuals as there are directors to be elected and
for whose election the share is entitled to be voted may be cast for as many
persons as there are directors to be elected. Except as may otherwise be
provided in the provisions of the Maryland General Corporation Law, the Articles
of Incorporation or these Bylaws, a majority of all the votes cast at a meeting
of stockholders at which a quorum is present shall be sufficient to approve any
matter which may properly come before the meeting. A plurality of all the votes
cast at a meeting of stockholders at which a quorum is present is sufficient to
elect a director.

Section 2. Informal Action. Any action required or permitted to be
taken at any meeting of stockholders may be taken without a meeting if the
following are filed with the records of the meeting: an unanimous written
consent which sets forth the action and is signed by each stockholder entitled
to vote on the matter, and, as applicable, a written waiver of any right to
dissent signed by each stockholder entitled to notice of the meeting but not
entitled to vote at it.

ARTICLE IV
BOARD OF DIRECTORS

Section 1. Functions and Definition. The business and affairs of
the corporation shall be managed by or under the direction of its Board of
Directors. All powers of the corporation may be exercised by or under authority
of said Board

<PAGE> 11

of Directors. The use of the phrase "entire board" herein refers to the total
number of directors which the corporation would have if there were no vacancies.

Section 2. Qualifications and Number. Each director shall be a
natural person at least 18 years of age. A director need not be a stockholder, a
citizen of the United States, or a resident of the State of Maryland. The
initial Board of Directors shall consist of the persons set forth in the
Articles of Incorporation. Thereafter the number of directors constituting the
entire board shall consist of not less than three (3) nor more than nine (9)
persons who shall be chosen by the stockholders. Each member of the Board of
Directors shall serve for a period of one (1) year.

Section 3. Election and Term. The first Board of Directors shall
consist of the directors named in the Articles of Incorporation and shall hold
office until the first annual meeting of stockholders or until their successors
have been elected and qualified. Thereafter, directors who are elected at an
annual meeting of stockholders, and directors who are elected in the interim to
fill vacancies and newly created directorships, shall hold office until the next
annual meeting of stockholders and until their successors have been elected and
qualified. In the interim between annual meetings of stockholders or of special
meetings of stockholders called for the election of directors, newly created
directorships and any vacancies in the Board of Directors, including vacancies
resulting from the removal of directors by the stockholders which have not been
filled by said stockholders, may be filled by the Board of Directors. Newly
created directorships shall be filled by action of a majority of the entire
Board of Directors. All other vacancies to be filled by the Board of Directors
may be filled by a majority of the remaining members of the Board of Directors,
whether or not sufficient to constitute a quorum. A director elected by the
Board of Directors to fill a vacancy serves until the next annual meeting of
stockholders and until his successor is elected and qualified.

Section 4. Meetings.

(a) TIME. Meetings shall be held at such time as the Board
shall set, except that the first meeting of a newly elected Board shall be held
as soon after its election as the directors may conveniently assemble.

(b) PLACE. Meetings shall be held at such place within or
without the State of Maryland as shall be set by the Board.

<PAGE> 12

(c) CALL. No call shall be required for regular meetings for
which the time and place have been fixed. Special meetings may be called by or
at the direction of the Chairman of the Board, if any, of the President, or of a
majority of the directors in office.

(d) NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER. No notice shall
be required for regular meetings for which the time and place have been fixed.
Written, oral or any other mode of notice of the time and place shall be given
for special meetings in sufficient time for the convenient assembly of the
directors thereat. The notice of any meeting need not specify the business to be
transacted or the purpose of the meeting. Whenever any notice of the time,
place, or purpose of any meeting of directors or any committee thereof is
required to be given under the provisions of the Maryland General Corporation
Law or of these Bylaws, such notice may be waived by a writing signed by the
director or committee member entitled to such notice and filed with the records
of the meeting, whether before or after the meeting, or by presence at the
meeting.

(e) QUORUM AND ACTION. A majority of the entire Board of
Directors shall constitute a quorum except when a vacancy or vacancies prevents
such majority, whereupon a majority of the directors in office shall constitute
a quorum, provided such majority shall constitute at least one-third of the
entire Board and, in no event, less than two directors (provided, that whenever
the entire Board of Directors consists of one director, that one director shall
constitute a quorum). Except as in the Articles of Incorporation and herein
otherwise provided and, except as in provisions of the Maryland General
Corporation Law otherwise provided, the action of a majority of the directors
present at a meeting at which a quorum is present shall be the action of the
Board of Directors. Members of the Board of Directors or of a committee thereof
may participate in a meeting by means of a conference telephone or similar
communications equipment if all persons participating in the meeting can hear
each other at the same time; and participation by such means shall constitute
presence in person at a meeting.

(f) CHAIRMAN OF THE MEETING. The Chairman of the Board, if
any and if present and acting, shall preside at all meetings. Otherwise, the
President, if present and acting, or any other director chosen by the Board,
shall preside.

Section 5. Removal of Directors. Any or all of the directors may be
removed, with or without cause by the affirmative vote of a majority of all the
votes entitled to be cast for the election of directors.

<PAGE> 13

Section 6. Committees. The Board of Directors may appoint from
among its members an Executive Committee and other committees composed of two or
more directors, and may delegate to such committee or committees any of the
powers of the Board of Directors except such powers as may not be delegated
under the provisions of the Maryland General Corporation Law. In the absence of
any member of any such committee, the members thereof present at any meeting,
whether or not they constitute a quorum, may appoint a member of the Board of
Directors to act in the place of such absent member.

Section 7. Informal Action. Any action required or permitted to be
taken at any meeting of the Board of Directors or of any committee thereof may
be taken without a meeting, if a written consent to such action is signed by all
members of the Board of Directors or any such committee, as the case may be, and
such written consent is filed with the minutes of proceedings of the Board or
any such committee.

ARTICLE V
OFFICERS

Section 1. Officers. The corporation shall have a President, a
Secretary, and a Treasurer, and may have a Chairman of the Board, a
Vice-Chairman of the Board and one or more Vice-Presidents, who shall be elected
by the Board of Directors, and may also have any such other officers, assistant
officers, and agents as the Board of Directors shall authorize from time to
time, each of whom shall be elected or appointed in the manner prescribed by the
Board of Directors. Any two or more offices, except those of President,
Vice-Chairman and Vice-President, may be held by the same person, but no person
shall execute, acknowledge or verify any instrument in more than one capacity,
if such instrument is required by law to be executed, acknowledged or verified
by more than one officer. Unless otherwise provided in the resolution of
election or appointment, each officer shall hold office until the meeting of the
Board of Directors following the next annual meeting of stockholders and until
his successor has been elected or appointed or qualified. The officers and
agents of the corporation shall have the authority and perform the duties in the
management of the corporation as determined by the resolution electing or
appointing them.

Section 2. Election of Officers. The Board of Directors, at its
first meeting after each annual meeting of stockholders, shall choose the
officers of the corporation.

<PAGE> 14

Section 3. Subordinate Officers. The Board of Directors may appoint
such other officers and agents as it shall deem necessary who shall hold their
offices for such terms and shall exercise such powers and perform such duties as
shall be determined from time to time by the Board.

Section 4. Compensation of Officers. The salaries of all officers
and agents of the corporation shall be fixed by the Board of Directors.

Section 5. Term of Office; Removal and Vacancies. The officers of
the corporation shall hold office until their successors are chosen and qualify
in their stead. Any officer elected or appointed by the Board of Directors may
be removed at any time by the affirmative vote of a majority of the Board of
Directors whenever, in its judgment, the best interests of the corporation will
be served thereby. If the office of any officer or officers becomes vacant for
any reason, the vacancy shall be filled by the Board of Directors.

Section 6. Chairman of the Board. The Chairman of the Board shall
be the Chief Executive Officer of the corporation and shall, subject to the
control of the Board of Directors, have general supervision, direction and
control of the business and affairs of the corporation. If present, he shall
preside at all meetings of the stockholders and at all meetings of the Board of
Directors. He shall be an ex-officio member of all committees and shall have the
general powers and duties of management usually vested in the office of
President and Chief Executive Officer of the corporation, and shall have such
other powers and duties as may be prescribed by the Board of Directors or these
Bylaws.

Section 7. Vice Chairman of the Board. The Vice Chairman of the
Board, if such an officer be elected, shall preside in the absence or disability
of the Chairman of the Board at all meetings of the stockholders and at all
meetings of the Board of Directors, and shall exercise and perform such other
powers and duties as may be from time to time assigned to him by the Board of
Directors or prescribed by these Bylaws.

Section 8. President. In the absence or disability of the Chairman
of the Board, the President shall perform all of the duties of the Chief
Executive Officer of the corporation, and when so acting shall have all the
powers of and be subject to all the restrictions upon the Chief Executive
Officer. The President shall have such other duties as from time to time may be
prescribed for him by the Board of Directors.

<PAGE> 15

Section 9. Vice President. In the absence or disability of the
President, the Vice Presidents in order of their rank as fixed by the Board of
Directors, or if not ranked, the Vice President designated by the Board of
Directors, shall perform all the duties of the President, and when so acting
shall have all the powers of and be subject to all the restrictions upon the
President. The Vice President shall have such other duties as from time to time
may be prescribed for them, respectively, by the Board of Directors.

Section 10. Secretary. The Secretary shall attend all sessions of
the Board of Directors and all meetings of the stockholders and record all votes
and the minutes of all proceedings in a book to be kept for that purpose; and
shall perform like duties for the standing committees when required by the Board
of Directors. He shall give, or cause to be given, notice of all meetings of the
stockholders and of the Board of Directors, and shall perform such other duties
as may be prescribed by the Board of Directors or these Bylaws. He shall keep in
safe custody the seal of the corporation, and when authorized by the Board,
affix the same to any instrument requiring it, and when so affixed it shall be
attested by his signature or by the signature of an Assistant Secretary. The
Board of Directors may give general authority to any other officer to affix the
seal of the corporation and to attest to the seal by his signature.

Section 11. Assistant Secretaries. The Assistant Secretary, or if
there be more than one, the Assistant Secretaries in the order determined by the
Board of Directors, or if there be no such determination, the Assistant
Secretary designated by the Board of Directors, shall, in the absence or
disability of the Secretary, perform the duties and exercise the powers of the
Secretary and shall perform such other duties and have such other powers as the
Board of Directors may from time to time prescribe.

Section 12. Treasurer. The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the corporation and shall
deposit all moneys, and other valuable effects in the name and to the credit of
the corporation, in such depositories as may be designated by the Board of
Directors. He shall disburse the funds of the corporation as may be ordered by
the Board of Directors, taking proper vouchers for such disbursements, and shall
render to the Board of Directors, at its regular meetings, or when the Board of
Directors so requires, an account of all his transactions as Treasurer and of
the financial condition of the corporation. If required by the Board of
Directors, he shall give the corporation a bond, in such sum and with such
surety or sureties as shall be satisfactory to the

<PAGE> 16

Board of Directors, for the faithful performance of the duties of his office and
for the restoration of the corporation, in case of his death, resignation,
retirement or removal from office, of all books, papers, vouchers, money and
other property of whatever kind in his possession or under his control belonging
to the corporation.

Section 13. Assistant Treasurer. The Assistant Treasurer, of if
there shall be more than one, the Assistant Treasurers in the order determined
by the Board of Directors, or if there be no such determination, the Assistant
Treasurer designated by the Board of Directors, shall, in the absence or
disability of the Treasurer, perform the duties and exercise the powers of the
Treasurer and shall perform such other duties and have such other powers as the
Board of Directors may from time to time prescribe.

ARTICLE VI
INDEMNIFICATION OF
DIRECTORS, OFFICERS, EMPLOYEES AND OTHER AGENTS

The corporation shall, to the maximum extent permitted by the Maryland
General Corporation Law indemnify each of its directors and officers against
expenses, judgments, fines, settlements and other amounts actually and
reasonably incurred in connection with any proceeding arising by reason of the
fact any such person is or was a director or officer of the corporation and
shall advance to such director or officer expenses incurred in defending any
such proceeding to the maximum extent permitted by such law. For purposes of
this Article VI, a "director" or "officer" of the corporation includes any
person who is or was a director or officer of the corporation, or is or was
serving at the request of the corporation as a director or officer of another
corporation, or other enterprise, or was a director or officer of a corporation
which was a predecessor corporation of the corporation or of another enterprise
at the request of such predecessor corporation. The Board of Directors may in
its discretion provide by resolution for such indemnification of, or advance of
expenses to, other agents of the corporation, and likewise may refuse to provide
for such indemnification or advance of expenses except to the extent such
indemnification is mandatory under the Maryland General Corporation Law.

<PAGE> 17

ARTICLE VII
STOCK LEDGER

The corporation shall maintain, at its principal office in the State of
Maryland or at a business office or an agency of the corporation an original or
duplicate stock ledger containing the name and address of each stockholder and
the number of shares of each class held by each stockholder. Such stock ledger
may be in written form or any other form capable of being converted into written
form within a reasonable time for visual inspection.

ARTICLE VIII
GENERAL PROVISIONS

Section 1. Dividends. Dividends upon the capital stock of the
corporation, subject to the provisions of the Certificate of Incorporation, if
any, may be declared by the Board of Directors at any regular or special
meeting, pursuant to law. Dividends may be paid in cash, in property, or in
shares of the capital stock, subject to the provisions of the Certificate of
Incorporation.

Section 2. Payment of Dividends. Before payment of any dividend
there may be set aside out of any funds of the corporation available for
dividends such sum or sums as the directors from time to time, in their absolute
discretion, think proper as a reserve fund to meet contingencies, or for
equalizing dividends, or for repairing or maintaining any property of the
corporation, or for such other purpose as the directors shall think conducive to
the interests of the corporation, and the directors may abolish any such
reserve.

Section 3. Checks. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers as the Board of
Directors may from time to time designate.

Section 4. Fiscal Year. The fiscal year of the corporation shall be
fixed by resolution of the Board of Directors.

Section 5. Corporate Seal. The corporate seal shall have inscribed
thereon the name of the corporation and shall be in such form and contain such
other words and/or figures as the Board of Directors shall determine or the law
require.

<PAGE> 18

Section 6. Manner of Giving Notice. Whenever, under the provisions
of the statutes or of the Certificate of Incorporation or of these Bylaws,
notice is required to be given to any director or stockholder, it shall not be
construed to mean personal notice, but such notice may be given in writing, by
mail, addressed to such director or stockholder, at his address as it appears on
the records of the corporation, with postage thereon prepaid, and such notice
shall be deemed to be given at the time when the same shall be deposited in the
United States mail. Notice to directors may also be given by telegram.

Section 7. Waiver of Notice. Whenever any notice is required to be
given under the provisions of the statutes or of the Certificate of
Incorporation or of these Bylaws, a waiver thereof in writing, signed by the
person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed to be equivalent.

Section 8. Annual Statement. The Board of Directors shall present
at each annual meeting, and at any special meeting of the stockholders when
called for by vote of the stockholders, a full and clear statement of the
business and condition of the corporation.

Section 9. Record Keeping. The corporation shall keep at its
principal office in the State of Maryland the original or a certified copy of
the Bylaws, including all amendments thereto, and shall duly file thereat the
annual statements of affairs of the corporation.

ARTICLE IX
AMENDMENTS

These Bylaws may be altered, amended or repealed or new Bylaws may be
adopted by the stockholders or by the Board of Directors, when such power is
conferred upon the Board of Directors by the Articles of Incorporation, at any
regular meeting of the stockholders or of the Board of Directors or at any
special meeting of the stockholders or of the Board of Directors if notice of
such alteration, amendment, repeal or adoption of new Bylaws be contained in the
notice of such special meeting. If the power to adopt, amend or repeal Bylaws is
conferred upon the Board of Directors by the Articles of Incorporation it shall
not divest or limit the power of the stockholders to adopt, amend or repeal
Bylaws.

<PAGE> 19
APARTMENT INVESTMENT AND MANAGEMENT COMPANY

Amendment to Article IV, Section 6 of the Bylaws

Adopted October 21, 1998

Existing Article IV, Section 6:

Proposed Article IV, Section 6:

Section 6. Committees. The Board of Directors may appoint from
among its members an Executive Committee and other committees composed of one or
more directors and delegate to these committees any of the powers of the Board
of Directors, except the power to authorize dividends on stock, elect directors,
issue stock other than as provided in the next sentence, recommend to the
stockholders any action which requires stockholder approval, amend these
By-Laws, or approve any merger or share exchange which does not require
stockholder approval. If the Board of Directors has given general authorization
for the issuance of stock providing for or establishing a method or procedure
for determining the maximum number of shares to be issued, a committee of the
Board, in accordance with that general authorization or any stock option or
other plan or program adopted by the Board of Directors, may authorize or fix
the terms of stock subject to classification or reclassification and the terms
on which any stock may be issued, including all terms and conditions required or
permitted to be established or authorized by the Board of Directors. Each
committee may fix rules of procedure for its business. A majority of the members
of a committee shall constitute a quorum for the transaction of business and the
act of a majority of those present at a meeting at which a quorum is present
shall be the act of the committee. The members of a committee present at any
meeting, whether or not they constitute a quorum, may appoint a director to act
in the place of an absent member.

<PAGE> 1
EXHIBIT 4.3

FIRST SUPPLEMENTAL INDENTURE, dated as of October 1, 1998 (the
"First Supplemental Indenture"), by and among Apartment Investment and
Management Company, a Maryland corporation (the "Company"), Insignia Financial
Group, Inc., a Delaware corporation (the "Issuer"), and First Union National
Bank (formerly First Union National Bank of South Carolina), a national banking
association, as Trustee (the "Trustee") under the Indenture, dated as of
November 1, 1996, by and between the Issuer and the Trustee (the "Indenture").
Capitalized terms used herein and not defined herein shall have the meanings
given such terms in the Indenture.

WHEREAS, the Company, the Issuer, Insignia/ESG Holdings, Inc.,
a Delaware corporation, and AIMCO Properties, L.P., a Delaware limited
partnership, entered into an Amended and Restated Agreement and Plan of Merger,
dated as of May 26, 1998 (the "Merger Agreement"), whereby the Issuer will be
merged with and into the Company, with the Company being the surviving
corporation (the "Merger"); and

WHEREAS, Section 12.1 of the Indenture prohibits the Issuer
from merging with any other corporation where such other corporation is the
continuing corporation, unless, among other things, such continuing corporation
expressly assumes the due and punctual payment of the Issuer's 6 1/2%
Convertible Subordinated Debentures Due 2016 (the "Debentures"), according to
their tenor, and the due and punctual performance and observance of all of the
covenants and conditions of the Indenture to be performed or observed by the
Issuer, by supplemental indenture satisfactory to the Trustee.

NOW, THEREFORE, inconsideration of the foregoing, the parties
hereto agree as follows:

1. The Company hereby expressly and unconditionally assumes
the due and punctual payment of the principal of, premium, if any, and interest
on all the Debentures issued pursuant to the Indenture according to their tenor
and the Company hereby expressly and unconditionally assumes the performance or
observance of all of the covenants and conditions of the Debentures and the
Indenture to be performed or observed by the Issuer as if the Company had been
originally named in the Indenture as the "Company" (as such term is defined
therein).

<PAGE> 2

2. The Company hereby represents and warrants that, assuming
that the Issuer is not in default in the performance of any of the covenants or
conditions to be performed or observed by the Issuer under the Indenture
immediately prior to the consummation of the Merger, the Company will not be in
default in the performance or observance of any such covenants or conditions
immediately after the consummation of the Merger.

3. Except as provided herein, all of the terms and conditions
of the Indenture shall remain in full force and effect. This First Supplemental
Indenture is an indenture supplemental to and in implementation of the
Indenture, and the Indenture and this First Supplemental Indenture shall
henceforth be read and construed together.

4. The Trustee accepts the succession of the Company as issuer
under the Indenture as evidenced by this First Supplemental Indenture. Without
limiting the generality of the foregoing, the Trustee assumes no responsibility
for the correctness of the recitals herein contained, which shall be taken as
the statements of the Company. The Trustee makes no representation and shall
have no responsibility as to the validity of this First Supplemental Indenture.

5. Notwithstanding any provision contained herein or in the
Indenture, it is hereby acknowledged that the Company will (i) consummate the
Merger, (ii) consummate the transfer of substantially all the assets of the
Issuer (including the Common Securities of the Insignia Trust) to certain
subsidiaries of the Company and partially-owned subsidiary partnerships of the
Company in exchange for fair value and (iii) perform all other necessary or
desirable actions in connection with the Merger and the post-Merger
restructuring of the assets obtained from the Issuer in the Merger.

6. In case any provision in this First Supplemental Indenture
shall be invalid, illegal or unenforceable, the validity, legality or
enforceability of the remaining provisions of this First Supplemental Indenture
or of the Indenture shall not in any way be affected or impaired thereby.

7. THIS FIRST SUPPLEMENTAL INDENTURE SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND FOR ALL PURPOSES SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.

<PAGE> 3

8. This First Supplemental Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.

* * * * *

<PAGE> 4

IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed on the date first above written.

APARTMENT INVESTMENT AND MAN
AGEMENT COMPANY

By: /s/ PETER KOMPANIEZ
---------------------------------
Name: Peter Kompaniez
Title: President

FIRST UNION NATIONAL BANK

By: /s/ R. DOUGLAS MILNER
---------------------------------
Name: R. Douglas Milner
Title: Vice President

<PAGE> 1

EXHIBIT 10.2

AIMCO PROPERTIES, L.P.

FIRST AMENDMENT
TO AMENDED AND RESTATED CREDIT AGREEMENT

This FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
(this "Amendment") is dated as of November 6, 1998 (the "Amendment Effective
Date") and entered into by and among AIMCO PROPERTIES, L.P., a Delaware limited
partnership ("Borrower"), the financial institutions listed on the signature
pages hereof ("Lenders") and BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as agent for Lenders ("Agent"), and BANKBOSTON, N.A. as one of the
Lenders and the Documentation Agent and is made with reference to that certain
Amended and Restated Credit Agreement dated as of October 1, 1998, (as amended
by this Amendment, the "Credit Agreement"), by and among Borrower, Lenders and
Agent. Capitalized terms used in this Amendment without definition are used as
defined in the Credit Agreement. The Guarantor Subsidiaries set forth on pages
S-5 through S-20 are only a party to this Amendment for the purposes of Section
4 and are not a party to the Credit Agreement.

RECITAL

WHEREAS, Borrower and Lenders desire to amend the Credit
Agreement to (a) provide for an increase in the borrowing availability
attributable to the Palencia Bond and (b) to conform the Revolver Maturity Date
to the maturity date in the Lehman Unsecured Facility Documents, all as more
particularly set forth below;

NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties hereto agree
as follows:

Section 1. AMENDMENTS TO THE CREDIT AGREEMENT

1.1 AMENDMENTS TO SECTION 1: PROVISIONS RELATING TO
DEFINED TERMS

A. Subsection 1.1 of the Credit Agreement is hereby
amended by deleting the definitions "Borrowing Ratio" and "Revolver Maturity
Date" and substituting them with the following definitions into subsection 1.1
in the proper alphabetical order:

"Borrowing Ratio" means the quotient of 1 divided by 1.30,
multiplied by 100 and expressed as a percentage.

"Revolver Maturity Date" means the maturity date of the
Revolver, which shall be September 30, 1999, subject, however, to earlier
acceleration pursuant to the provisions of the Loan Documents.

<PAGE> 2

Section 2. CONDITIONS TO EFFECTIVENESS

This Amendment shall become effective on the Amendment
Effective Date, if each of the following conditions are satisfied:

A. Borrower has delivered to Lenders (or to Agent for Lenders
with sufficient originally executed copies, where appropriate, for
each Lender and its counsel) executed copies of this Amendment and any
required guaranties from the additional Guarantor Subsidiaries, each,
unless otherwise noted, dated as of the Amendment Effective Date:

B. If required by Agent, Lenders and their respective counsel
shall have received originally executed copies of one or more
favorable written opinions of counsel for Borrower and the Guarantor
Subsidiaries in form and substance satisfactory to Agent and its
counsel, dated as of the Amendment Effective Date with respect to the
validity, binding effect and enforceability of the Credit Agreement
and due authorization, execution and delivery thereof, and as to such
other matters as Agent acting on behalf of Lenders may reasonably
request.

Section 3. BORROWER'S REPRESENTATIONS AND WARRANTIES

In order to induce Lenders to enter into this Amendment and
to amend the Credit Agreement in the manner provided herein, Borrower
represents and warrants to each Lender that the following statements are true,
correct and complete:

A. CORPORATE POWER AND AUTHORITY. Borrower has all requisite
corporate power and authority to enter into this Amendment and any
other agreements, guaranties or other operative documents to be
delivered by Borrower pursuant to the Amendment, to carry out the
transactions contemplated by, and perform its obligations under, the
Credit Agreement. Each of the Borrower, the REIT and the Guarantor
Subsidiaries are in good standing in the respective states of their
organization on the Amendment Effective Date.

B. AUTHORIZATION OF AGREEMENTS. The execution and delivery of
this Amendment and the performance of the Credit Agreement have been
duly authorized by all necessary corporate action on the part of
Borrower and the other parties delivering any of such documents, as
the case may be. The organizational documents of the Borrower, the
REIT and the Guarantor Subsidiaries have not been modified in any
material respect since October 1, 1998.

C. NO CONFLICT. The execution and delivery by Borrower and
the Guarantor Subsidiaries of this Amendment and the performance by
Borrower of the Credit Agreement by Borrower do not and will not (i)
violate any provision of any law or any governmental rule or
regulation applicable to Borrower or any of its Subsidiaries, their
respective Organizational Documents or any order, judgment or decree
of any court or other agency of government binding on Borrower, the
REIT or any of their Subsidiaries, (ii) conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a
default under any Contractual Obligation of Borrower, the REIT or any
of their Subsidiaries, (iii) result in or require the creation or
imposition of any Lien upon any of the properties or assets of
Borrower, the REIT or any of their Subsidiaries, or (iv) require any

2
<PAGE> 3

approval of stockholders or any approval or consent of any Person
under any Contractual Obligation of Borrower, the REIT or any of their
Subsidiaries.

D. GOVERNMENTAL CONSENTS. The execution and delivery by
Borrower and the Guarantor Subsidiaries of this Amendment and the
performance by Borrower and the Guarantor Subsidiaries of the Credit
by Borrower do not and will not require any registration with, consent
or approval of, or notice to, or other action to, with or by, any
federal, state or other governmental authority or regulatory body.

E. BINDING OBLIGATION. This Amendment and the Credit
Agreement have been duly executed and delivered by Borrower and the
Guarantor Subsidiaries, as applicable, and are, and the Guarantor
Subsidiaries, as applicable, enforceable against Borrower and/or the
Guarantor Subsidiaries, as applicable, in accordance with their
respective terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting
creditors' rights generally or by equitable principles relating to
enforceability.

F. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM
CREDIT AGREEMENT. The representations and warranties contained in
Section 5 of the Credit Agreement are and will be true, correct and
complete in all material respects on and as of the date hereof to the
same extent as though made on and as of that date, except Section 5.5
and other representations and warranties solely to the extent such
representations and warranties specifically relate to an earlier date,
in which case they were true, correct and complete in all material
respects on and as of such earlier date.

G. ABSENCE OF DEFAULT. No event has occurred and is
continuing or will result from the consummation of the transactions
contemplated by this Amendment that would constitute an Event of
Default or a Default.

Section 4. ACKNOWLEDGEMENT AND CONSENT

Guarantor Subsidiaries are party to the Guaranties, in each
case as amended through the date hereof, pursuant to which Guarantor
Subsidiaries have guarantied the Obligations. Nothing in this Section 4 shall
be construed to make the Guarantor Subsidiaries a party to the Credit Agreement
or to create any obligation in respect thereof except pursuant to each
Guaranty.

Each Guarantor Subsidiary hereby acknowledges that it has
reviewed the terms and provisions of the Credit Agreement and this Amendment
and consents to the amendment of the Credit Agreement effected pursuant to this
Amendment. Each Guarantor Subsidiary hereby confirms that each Guaranty to
which it is a party or otherwise bound will continue to guaranty or secure, as
the case may be, to the fullest extent possible the payment and performance of
all of the "Indebtedness" (as defined in the applicable Guaranty), including
without limitation the payment and performance of all such "Indebtedness," as
the case may be, in respect of the Obligations of Borrower now or hereafter
existing under or in respect of the Credit Agreement and the Notes defined
therein.

3
<PAGE> 4

Each Guarantor Subsidiary acknowledges and agrees that any
Guaranty to which it is a party or otherwise bound shall continue in full force
and effect and that all of its obligations thereunder shall be valid and
enforceable and shall not be impaired or limited by the execution or
effectiveness of this Amendment. Each Guarantor Subsidiary represents and
warrants that all representations and warranties contained in the Credit
Agreement and the Guaranty to which it is a party or otherwise bound are true,
correct and complete in all material respects on and as of the Amendment
Effective Date to the same extent as though made on and as of that date, except
to the extent such representations and warranties specifically relate to an
earlier date, in which case they were true, correct and complete in all
material respects on and as of such earlier date.

Each Guarantor Subsidiary acknowledges and agrees that (i)
notwithstanding the conditions to effectiveness set forth in this Amendment,
such Guarantor Subsidiary is not required by the terms of the Credit Agreement
or any other Loan Document to consent to the amendments to the Credit Agreement
effected pursuant to this Amendment and (ii) nothing in the Credit Agreement,
this Amendment or any other Loan Document shall be deemed to require the
consent of such Guarantor Subsidiary to any future amendments to the Credit
Agreement.

Section 5. MISCELLANEOUS

A. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE
OTHER LOAN DOCUMENTS.

(i) On and after the Amendment Effective Date, each reference
in the Credit Agreement to "this Agreement", "hereunder",
"hereof", "herein" or words of like import referring to the
Credit Agreement, and each reference in the other Loan
Documents to the "Credit Agreement", "thereunder", "thereof"
or words of like import referring to the Credit Agreement
shall mean and be a reference to the Credit Agreement, as
amended by this Amendment.

(ii) Except as specifically amended by this Amendment, the
Credit Agreement and the other Loan Documents shall remain in
full force and effect and are hereby ratified and confirmed.

(iii) The execution, delivery and performance of this
Amendment shall not, except as expressly provided herein,
constitute a waiver of any provision of, or operate as a
waiver of any right, power or remedy of Agent or any Lender
under, the Credit Agreement or any of the other Loan
Documents.

B. FEES AND EXPENSES. Borrower acknowledges that all costs,
fees and expenses incurred by Agent and its counsel with respect to
this Amendment and the documents and transactions contemplated hereby
shall be for the account of Borrower.

C. HEADINGS. Section and subsection headings in this
Amendment are included herein for convenience of reference only and
shall not constitute a part of this Amendment for any other purpose or
be given any substantive effect.

<PAGE> 5

D. COUNTERPARTS; EFFECTIVENESS. This Amendment may be
executed in any number of counterparts and by different parties hereto
in separate counterparts, each of which when so executed and delivered
shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument; signature pages may be
detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the
same document. This Amendment shall become effective upon (i) the
receipt by Agent of written or facsimile consent from Lehman
Commercial Paper Inc. ("LCI"), in its capacity as administrative agent
under the Lehman Unsecured Facility Documents, pursuant to Section
2(a) of that certain Intercreditor Agreement dated October 1, 1998
among Agent, LCI and Lehman Brothers, Inc., and (ii) the execution of
a counterpart hereof by Borrower and the Requisite Lenders, and
receipt by Borrower and Agent of written, facsimile or telephonic
notification of such execution and authorization of delivery thereof.

[Signatures on Attached Pages S-1 through S-20]

5
<PAGE> 6

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

BORROWER

AIMCO PROPERTIES, L.P.,
a Delaware limited partnership

By: AIMCO-GP, INC.,
a Delaware corporation, its general partner

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

Notices to be sent to:

1873 South Bellaire Street
17th Floor
Denver, Colorado 80222
Attention: Peter K. Kompaniez,
President
Facsimile: (303) 757-8735

S-6
<PAGE> 7

B OF A

BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as a Lender and as the Issuing Lender

By: /s/ ROBERT N. ALLEN
Name: Robert N. Allen
Title: Vice President

Notices to be sent to:

Bank of America National Trust
and Savings Association
CRES #1313
555 South Flower Street, 6th Floor
Los Angeles, CA 90071
Attention: M. Harvey
Telephone: 213/228-4013
Facsimile: 213/228-5389

Payments to be made to:

BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
333 S. Beaudry Ave.
Loan Accounting Dept #1503
Los Angeles, CA 90017
ABA #: 121 000 358
Credit Account #: 15033-00401
Attention: Unit Representative
Ref: AIMCO Unsecured Revolver

S-7
<PAGE> 8

AGENT

BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent

By: /s/ ROBERT N. ALLEN
Name: Robert N. Allen
Title: Vice President

Notices to be sent to:

Bank of America National Trust and Savings
Association
CRES #1313
555 South Flower Street, 6th Floor
Los Angeles, CA 90071
Attention: M. Harvey
Telephone: 213/228-4013
Facsimile: 213/228-5389

Payments to be made to:

BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
ABA #: 121 000 358
Credit Account #: 15033-00401
Attention: Unit Representative
Ref: AIMCO Unsecured Revolver

S-8

<PAGE> 9

BANKBOSTON, N.A., LENDER AND
DOCUMENTATION AGENT

BANKBOSTON, N.A.

By: /s/ KATHLEEN M. AHERN
Name: Kathleen M. Ahern
Title: Vice President

Notices to be sent to:

BankBoston, N.A.
100 Federal Street
Mail Stop 01-32-04
Boston, MA 02110
Attention: Andrea Martingnetti
Telephone: (617) 434-2835
Facsimile: (617) 434-0645

Payments to be made to:

BANKBOSTON, N.A.
ABA #: 011-000-390
Credit Loan #: 1102655
Attention: Linda Wheeler/CLS
Ref: AIMCO Unsecured Revolver

S-9

<PAGE> 10

GUARANTOR SUBSIDIARIES

Address Where Notices to Guarantors are to be
Sent: 1873 South Bellaire Street
17th Floor
Denver, Colorado 90071

APARTMENT INVESTMENT AND
MANAGEMENT COMPANY,
a Maryland corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

AIMCO-GP, INC.,
a Delaware corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

AIMCO-LP, INC.,
a Delaware corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

AIMCO HOLDINGS, LP,
a Delaware limited partnership

By: AIMCO HOLDINGS QRS, INC.,
a Delaware corporation,
General Partner

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

S-10
<PAGE> 11

AIMCO HOLDINGS QRS, INC.,
a Delaware corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

AIMCO SOMERSET, INC.,
a Delaware corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

AIMCO PROPERTIES FINANCE CORP.,
a Delaware corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

AIMCO PROPERTIES
FINANCE PARTNERSHIP, L.P.,
a Delaware limited partnership

By:
AIMCO Properties Finance Corp.
a Delaware corporation
General Partner

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

AIMCO/OTC QRS, INC.,
a Delaware corporation

S-11
<PAGE> 12

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

PROPERTY ASSET MANAGEMENT
SERVICES, INC.,
a Delaware corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

PROPERTY ASSET MANAGEMENT
SERVICES, L.P.
a Delaware limited partnership

By: AIMCO PROPERTIES, L.P.,
General Partner

By: AIMCO-GP, INC.
a Delaware corporation
General Partner

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

NHP MANAGEMENT COMPANY,
a District of Columbia corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

S-12

<PAGE> 13

PROPERTY MANAGEMENT SERVICES-CALIFORNIA, LLC,
a California limited liability company

PROPERTY ASSET MANAGEMENT
SERVICES, L.P.
a Delaware limited partnership
Member

By: AIMCO PROPERTIES, L.P.,
General Partner

By: AIMCO-GP, INC.
a Delaware corporation
General Partner

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

AMBASSADOR II, L.P.,
a Delaware limited partnership

By: AMBASSADOR II, INC.,
a Delaware corporation
General Partner

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

AMBASSADOR X, L.P.,
a Delaware limited partnership

By: AMBASSADOR X, INC.,
a Delaware corporation
General Partner

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

S-13
<PAGE> 14

AMBASSADOR IV, INC.,
a Delaware corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

AMBASSADOR V, INC.,
a Delaware corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

AMBASSADOR FLORIDA PARTNERS, INC.,
a Delaware corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

A.J. TWO, INC.,
a Delaware corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

AIMCO/NHP HOLDINGS, INC.,
a Delaware corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

S-14
<PAGE> 15

AIMCO/NHP PROPERTIES, INC.,
a Delaware corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

NHP TEXAS MANAGEMENT COMPANY
a Texas corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

NHP PUERTO RICO MANAGEMENT COMPANY
a Delaware corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

RESCORP REALTY, INC.,
an Illinois corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

NHP CONGRESS MANAGEMENT LP
a Virginia limited partnership

By: NHP-HG SIX, INC.
General Partner

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

S-15

<PAGE> 16

NHP FLORIDA MANAGEMENT COMPANY
a Florida corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

NHP/PRC MANAGEMENT COMPANY LLC,
a Delaware limited liability company

By: NHP Management Company
a District of Columbia
corporation Member

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

BROADSTREET MANAGEMENT, INC.
an Ohio corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

NHP-HG 15, INC.,
a Virginia corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

NHP-HG 17, INC.,
a Virginia corporation

S-16

<PAGE> 17

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

NHP HDV THREE, INC.
a Delaware corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

NHP A&R SERVICES, INC.
a Delaware corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

NHP CASH MANAGEMENT SERVICES, INC.,
a Virginia corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

PROPERTY SERVICES GROUP, INC.,
a District of Columbia corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

THE RISK SPECIALIST GROUP, INC.,
a District of Columbia corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

S-17

<PAGE> 18

NHP MAINTENANCE SERVICES
COMPANY
a Virginia corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

NHP EQUITY SERVICES, INC.,
a Virginia corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

NHP ASSET MANAGEMENT SERVICES, INC.,
a Virginia corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

HP-HDV 20, INC.,
a Virginia corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

PREFERRED HOME HEALTH, INC.,
a Florida corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

S-18
<PAGE> 19

NHP-HDV TEN, INC.,
a Delaware corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

NHP-HDV SIXTEEN, INC.,
a Delaware corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

AG PROPERTIES, LLC,
a Delaware limited liability company

By: Apartment Investment and Management
Company,
a Maryland corporation Member

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

SECURITY MANAGEMENT, INC.,
a Washington corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

INSIGNIA RESIDENTIAL MANAGEMENT, INC.,
a Delaware corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

S-19
<PAGE> 20

INSIGNIA RESIDENTIAL GROUP, L.P.,
a Delaware limited partnership

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

By: Insignia Residential Corporation
General Partner

By: Insignia
Residential Corporation
General Partner

By /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

INSIGNIA RESIDENTIAL GROUP OF
ALABAMA, INC.,
a Delaware corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

INSIGNIA RESIDENTIAL GROUP OF
CALIFORNIA, INC.,
a Delaware corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

INSIGNIA RESIDENTIAL GROUP OF
COLORADO, INC.,
a Colorado corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

S-20

<PAGE> 21

INSIGNIA RESIDENTIAL GROUP OF
TEXAS, INC.,
a Delaware corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

AG MANAGEMENT, LLC,
a Delaware limited liability company

By: Apartment Investment and Management Company,
a Maryland corporation
Member

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

AG A&R SERVICES, LLC,
a Delaware limited liability company

By: Apartment Investment and Management
Company,
a Maryland corporation Member

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

S-21
<PAGE> 22

NPI-AP MANAGEMENT, L.P.,
a Delaware limited partnership

By: /s/ PETER K. KOMPANIEZ

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

APTEK MANAGEMENT COMPANY, LLC,
a Delaware limited liability company

By: NHP Management Company
a District of Columbia corporation
Member

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

APTEK MAINTENANCE SERVICES, LLC,
a Delaware limited liability company

By: NHP Maintenance Services Company
a Virginia corporation Member

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

CPF XIV/ST. CHARLESTON, INC.,
a Nevada corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

S-22

<PAGE> 23

CPF XIV/TORREY PINES, INC.,
a Nevada corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

CPF XIV/SUN RIVER, INC.,
an Arizona corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

CPF XIV/LAKESIDE PLACE, INC.,
a Texas corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

CONCAP CCP/IV STRATFORD PLACE
PROPERTIES, INC.,
a Texas corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

CONCAP CCP/IV RIVER'S EDGE
PROPERTIES, INC.,
a Texas corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

S-23

<PAGE> 24

PRA, INC.,
a Georgia corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

NATIONAL PROPERTY INVESTORS, INC.,
a Delaware corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

AMREAL CORPORATION
a South Carolina corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

DBL PROPERTIES CORPORATION
a New York corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

COLONY OF SPRINGDALE PROPERTIES, INC.,
a Texas corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

S-24

<PAGE> 25

SF GENERAL, INC.,
a Delaware corporation

By: /s/ PETER K. KOMPANIEZ
Peter K. Kompaniez
President

S-25

<PAGE> 1
EXHIBIT 10.12

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

This THIRD AMENDMENT TO THE THIRD AMENDED AND RESTATED AGREEMENT OF
LIMITED PARTNERSHIP OF AIMCO PROPERTIES, L.P., dated as of February 18, 1999
(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, on February 18, 1999, the Previous General Partner filed
Articles Supplementary amending its Charter to reclassify 5,750,000 shares of
authorized but unissued shares of its Class A Common Stock, par value $.01 per
share, as shares of its Class K Convertible Cumulative Preferred Stock, par
value $.01 per share (the "Class K Preferred Stock");

WHEREAS, in accordance with Section 4.3.E of the Agreement, upon the
issuance of any such shares of Class K Preferred Stock, the Previous General
Partner will contribute the net cash proceeds from such issuance to the Special
Limited Partner, which will contribute such net cash proceeds to the Partnership
in exchange for a number of Partnership Preferred Units equal to the number of
shares of Class K Preferred Stock so issued, which Partnership Preferred Units
shall have designations, preferences and other rights, terms and provisions that
are substantially the same as the designations, preferences and other rights,
terms and provisions of the Class K Preferred Stock; 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 such
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 P," in the form attached hereto, which shall be attached to
and made a part of the Agreement.

<PAGE> 2

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.

2
<PAGE> 3

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

GENERAL PARTNER:

AIMCO-GP, INC.

By: /s/ PETER KOMPANIEZ
----------------------------------
Name: Peter Kompaniez
Title: President and Vice Chairman

<PAGE> 4

EXHIBIT P

PARTNERSHIP UNIT DESIGNATION OF THE
CLASS K 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 K
Partnership Preferred Units," and the number of Partnership Preferred Units
constituting such class shall be 5,750,000.

2. DEFINITIONS.

For purposes of the Class K 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.

"Class K 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 P. It is the intention of the General Partner that each
Class K Partnership Preferred Unit shall be substantially the economic
equivalent of one share of Class K Preferred Stock.

"Class K Preferred Stock" means the Class K Convertible Cumulative
Preferred Stock, par value $0.01 per share, of the Previous General
Partner.

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

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

1
<PAGE> 5

"Distribution Payment Date" shall mean any date on which cash dividends
are paid on the Class K Preferred Stock.

"Junior Partnership Units" shall have the meaning set forth in
paragraph (c) of Section 8 of this Exhibit P.

"Parity Partnership Units" shall have the meaning set forth in
paragraph (b) of Section 8 of this Exhibit P.

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

"Senior Partnership Units" shall have the meaning set forth in
paragraph (a) of Section 8 of this Exhibit P.

3. DISTRIBUTIONS.

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

4. LIQUIDATION PREFERENCE.

(a) In the event of any liquidation, dissolution or winding up
of the Partnership, whether voluntary or involuntary, before any payment or
distribution of the Partnership (whether capital, surplus or otherwise) shall be
made to or set apart for the holders of Junior Partnership Units, the holders of
Class K Partnership Preferred Units shall be entitled to receive Twenty-Five
Dollars ($25) per Class K Partnership Preferred Unit (the "Liquidation
Preference"), plus an amount per Class K Partnership Preferred Unit equal to all
dividends (whether or not declared or earned) accumulated, accrued and unpaid on
one share of Class K Preferred Stock to the date of final distribution to such
holders; but such holders shall not be entitled to any further payment. Until
the holders of the Class K Partnership Preferred Units have been paid the
Liquidation Preference in full, plus an amount equal to all dividends (whether
or not declared or earned) accumulated, accrued and unpaid on the Class K
Preferred Stock to the date of final

2
<PAGE> 6

distribution to such holders, no payment shall be made to any holder of Junior
Partnership Units upon the liquidation, dissolution or winding up of the
Partnership. If, upon any liquidation, dissolution or winding up of the
Partnership, the assets of the Partnership, or proceeds thereof, distributable
among the holders of Class K 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 K 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 K Partnership Preferred Units and
any such other Parity Partnership Units if all amounts payable thereon were paid
in full. For the purposes of this Section 4, (i) a consolidation or merger of
the Partnership with one or more partnerships, (ii) a sale or transfer of all or
substantially all of the Partnership's assets or (iii) a statutory share
exchange 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
K 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 K
Partnership Preferred Units and any Parity Partnership Units shall not be
entitled to share therein.

5. REDEMPTION.

(a) At any time that the Previous General Partner redeems any
shares of Class K Preferred Stock for cash, the General Partner shall
concurrently cause the Partnership to redeem an equal number of Class K
Partnership Preferred Units, at a redemption price per Class K Partnership
Preferred Unit payable in cash and equal to the redemption price paid by the
Previous General Partner for such Class K Preferred Stock. At any time that the
Previous General Partner redeems any shares of Class K Preferred Stock in
exchange for a number of shares of Class A Common Stock issued by the Previous
General Partner, the General Partner shall concurrently cause the Partnership to
redeem an equal number of Class K Partnership Preferred Units in exchange for a
number of Partnership Common Units equal to the number of such shares of Class A
Common Stock, and a cash amount equal to any cash amounts paid by the Previous
General Partner in lieu of fractional shares. In the event of a redemption of
Class K Partnership Preferred Units, if the redemption date occurs after a
Record Date and on or prior to the related Distribution Payment Date, the
distribution payable on such Distribution Payment Date in respect of such Class
K Partnership Preferred Units called for redemption shall be payable on such
Distribution Payment Date to the holders of record of such Class K Partnership
Preferred Units at the close of business on such

3
<PAGE> 7

Record Date notwithstanding the redemption of such Class K Partnership Preferred
Units, and shall not be payable as part of the redemption price for such Class K
Partnership Preferred Units.

(b) If the Partnership shall redeem Class K Partnership
Preferred Units pursuant to paragraph (a) of this Section 5, from and after the
redemption date (unless the Partnership shall fail to make available the amount
of cash necessary to effect such redemption), (i) except for payment of the
redemption price, the Partnership shall not make any further distributions on
the Class K Partnership Preferred Units so called for redemption, (ii) said
units shall no longer be deemed to be outstanding, and (iii) all rights of the
holders thereof as holders of Class K Partnership Preferred Units of the
Partnership shall cease except the rights to receive the cash payable, or
Partnership Common Units issuable, upon such redemption, without interest
thereon; provided, however, that if the redemption date occurs after a Record
Date and on or prior to the related Distribution Payment Date, the full
distribution payable on such Distribution Payment Date in respect of such Class
K Partnership Preferred Units called for redemption shall be payable on such
Distribution Payment Date to the holders of record of such Class K Partnership
Preferred Units at the close of business on such Record Date notwithstanding the
prior redemption of such Class K Partnership Preferred Units.

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

6. STATUS OF REACQUIRED UNITS.

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

7. CONVERSION.

Class K Partnership Preferred Units shall be convertible by the holders
thereof as follows:

(a) Upon conversion of any number of shares of Class K
Preferred Stock into shares of Common Stock, an equal number of Class K
Partnership Preferred Units shall automatically be converted into Partnership
Common Units. If Class K Partnership Preferred Units are held by more than one
holder, the units to be converted shall be selected by the General Partner in
its discretion. The conversion ratio in effect

4
<PAGE> 8

from time to time for the conversion of Class K Partnership Preferred Units into
Partnership Common Units pursuant to this Section 7 shall at all times be equal
to, and shall be automatically adjusted as necessary to reflect, the conversion
ratio in effect from time to time for the conversion of Class K Preferred Stock
into Common Stock.

(b) Holders of Class K Partnership Preferred Units at the
close of business on a Record Date shall be entitled to receive the distribution
payable on such units on the corresponding Distribution Payment Date
notwithstanding the conversion thereof following such Record Date and prior to
such Distribution Payment Date; provided, however, that if Class K Partnership
Preferred Units are converted during the period between the close of business on
any Record Date and the opening of business on the corresponding Distribution
Payment Date (except shares converted after the issuance of a notice of
redemption with respect to a redemption date during such period or coinciding
with such Distribution Payment Date, which will be entitled to such
distribution) the holder must pay the Partnership an amount equal to the
distribution payable on such units on such Distribution Payment Date. If any
Class K Partnership Preferred Units are converted on a Distribution Payment
Date, the holder thereof will receive the distribution payable by the
Partnership on such Class K Partnership Preferred Units on such date, and the
holder need not pay the amount of such distribution upon conversion of Class K
Partnership Preferred Units. Except as provided above, the Partnership shall
make no payment or allowance for unpaid distributions on converted Class K
Partnership Preferred Units or for distributions on the Partnership Common Units
issued upon such conversion. Each conversion of Class K Partnership Preferred
Units into Partnership Common Units shall be deemed to have been effected at the
same time and date that the corresponding conversion of Class K Preferred Stock
into Common Stock is deemed to have been effected.

(c) No fractional Partnership Common Units shall be issued
upon conversion of Class K Partnership Preferred Units. Instead of any
fractional Partnership Common Units that would otherwise be deliverable upon the
conversion of Class K Partnership Preferred Units, the Partnership shall pay to
the holder of such converted units an amount in cash equal to the cash payable
to a holder of an equivalent number of converted shares of Class K Preferred
Stock in lieu of fractional shares of Common Stock.

(d) The Partnership will pay any and all documentary stamp,
issue or transfer taxes, and any other similar taxes, payable in respect of (i)
the issue or delivery of Partnership Common Units or other securities or
property on conversion or redemption of Class K Partnership Preferred Units
pursuant hereto, and (ii) the issue or delivery of Common Stock or other
securities or property on conversion or redemption of Class K Preferred Stock
pursuant to the terms hereof.

<PAGE> 9

8. RANKING.

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

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

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

9. SPECIAL ALLOCATIONS.

(a) Gross income and, if necessary, gain shall be allocated to
the holders of Class K Partnership Preferred Units for any Fiscal Year (and, if
necessary,

6
<PAGE> 10

subsequent Fiscal Years) to the extent that the holders of Class K Partnership
Preferred Units receive a distribution on any Class K Partnership Preferred
Units (other than an amount included in any redemption pursuant to Section 5
hereof) with respect to such Fiscal Year.

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

10. RESTRICTIONS ON OWNERSHIP.

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

11. GENERAL.

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

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

<PAGE> 1
EXHIBIT 10.16

================================================================================

$300,000,000

INTERIM TERM LOAN AGREEMENT

AMONG

APARTMENT INVESTMENT AND MANAGEMENT COMPANY,

AIMCO PROPERTIES, L.P.,
AS BORROWER,

THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO,

LEHMAN BROTHERS INC.,
AS ARRANGER

LEHMAN COMMERCIAL PAPER INC.,
AS SYNDICATION AGENT

AND

LEHMAN COMMERCIAL PAPER INC.,
AS ADMINISTRATIVE AGENT

DATED AS OF OCTOBER 1, 1998

================================================================================

<PAGE> 2

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----

<S> <C>
SECTION 1. DEFINITIONS................................................................... 2
1.1 Defined Terms................................................................... 2
1.2 Other Definitional Provisions................................................... 26

SECTION 2. AMOUNT AND TERMS OF COMMITMENTS............................................... 26
2.1 Commitments..................................................................... 26
2.2 Procedure for Borrowing......................................................... 26
2.3 Maturity Date................................................................... 27
2.4 Repayment of Loans; Evidence of Debt............................................ 27
2.5 Fees, etc. ..................................................................... 27
2.6 Optional Prepayments............................................................ 28
2.7 Mandatory Prepayments .......................................................... 28
2.8 Conversion and Continuation Options............................................. 28
2.9 [Intentionally Omitted]......................................................... 29
2.10 Interest Rates and Payment Dates............................................... 29
2.11 Computation of Interest........................................................ 29
2.12 Inability to Determine Interest Rate........................................... 30
2.13 Pro Rata Treatment and Payments................................................ 30
2.14 Requirements of Law............................................................ 31
2.15 Taxes.......................................................................... 32
2.16 Indemnity...................................................................... 34
2.17 Illegality..................................................................... 35
2.18 Change of Lending Office....................................................... 35
2.19 Replacement of Lender.......................................................... 35

SECTION 3. REPRESENTATIONS AND WARRANTIES................................................ 36
3.1 Financial Condition............................................................. 36
3.2 No Change....................................................................... 37
3.3 Corporate Existence; Compliance with Law........................................ 37
3.4 Corporate Power; Authorization; Enforceable Obligations......................... 37
3.5 No Legal Bar.................................................................... 37
3.6 No Material Litigation.......................................................... 38
3.7 No Default...................................................................... 38
3.8 Ownership of Property; Liens.................................................... 38
3.9 Intellectual Property........................................................... 38
3.10 Taxes.......................................................................... 38
3.11 Federal Regulations............................................................ 38
3.12 Labor Matters.................................................................. 38
3.13 ERISA.......................................................................... 39
</TABLE>

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<PAGE> 3

<TABLE>
<CAPTION>
Page
----
<S> <C>
3.14 Investment Company Act; Other Regulations..................................... 39
3.15 Subsidiaries.................................................................. 39
3.16 Use of Proceeds............................................................... 40
3.17 Environmental Matters......................................................... 40
3.18 Accuracy of Information, etc.................................................. 41
3.19 Solvency...................................................................... 41
3.20 Year 2000 Matters............................................................. 41
3.21 Not Foreign Persons........................................................... 42
3.22 Defects....................................................................... 42
3.23 Utilities..................................................................... 42
3.24 Subsidiary Guarantors......................................................... 42
3.25 Leases........................................................................ 42
3.26 Management Contracts.......................................................... 42
3.27 Eligible Note Receivables..................................................... 42
3.28 Non-Guarantor Subsidiaries.................................................... 43
3.29 FNMA Guaranty................................................................. 43

SECTION 4. CONDITIONS PRECEDENT......................................................... 43
4.1 Conditions Precedent to the Loans.............................................. 43

SECTION 5. AFFIRMATIVE COVENANTS......................................................... 46
5.1 Financial Statements............................................................ 46
5.2 Certificates; Other Information................................................. 47
5.3 Payment of Obligations.......................................................... 48
5.4 Conduct of Business and Maintenance of Existence, etc. ......................... 48
5.5 Maintenance of Property; Insurance.............................................. 48
5.6 Inspection of Property; Books and Records; Discussions.......................... 49
5.7 Notices......................................................................... 49
5.8 Environmental Laws.............................................................. 50
5.9 Ownership of the Borrower....................................................... 50
5.10 Solvency....................................................................... 50
5.11 Additional Guarantor Subsidiaries.............................................. 50
5.12 Covenants Relating to Unencumbered Real Estate Assets.......................... 50
5.13 Liens on Unencumbered Real Estate Assets....................................... 51
5.14 Payment of Taxes............................................................... 51
5.15 Year 2000 Matters.............................................................. 51
5.16 Management Contracts........................................................... 51
5.17 Eligible Notes Receivable. ................................................... 51
5.18 Post-Closing Requirements...................................................... 52

SECTION 6. NEGATIVE COVENANTS............................................................ 52
6.1 Financial Condition Covenants................................................... 53
</TABLE>

-ii-

<PAGE> 4

6.2 Additional Recourse Indebtedness................................................ 53
6.3 Limitation on Liens............................................................. 54
6.4 Limitation on Fundamental Changes............................................... 55
6.5 Limitation on Disposition of Property........................................... 55
6.6 Limitation on Restricted Payments............................................... 56
6.7 Limitation on Capital Expenditures.............................................. 56
6.8 Limitation on Investments....................................................... 57
6.9 Limitation on Optional Payments and Modifications of Debt Instruments, etc. .... 57
6.10 Limitation on Transactions with Affiliates..................................... 58
6.11 Limitation on Sales and Leasebacks............................................. 58
6.12 Limitation on Negative Pledge Clauses.......................................... 58
6.13 Limitation on Restrictions on Subsidiary Distributions......................... 58
6.14 Limitation on Lines of Business................................................ 58
6.15 Limitation on Amendments to Merger Documentation............................... 59
6.16 Limitation on New Construction................................................. 59
6.17 Limitation on Contingent Obligations........................................... 59
6.18 Limitation on Lease Obligations................................................ 59
6.19 Special Covenants Relating to the REIT......................................... 60
6.20 Taxation of the Borrower....................................................... 60
6.21 Changes to BofA Facility Documents............................................. 60
6.22 Non-Guarantor Subsidiaries..................................................... 60
6.23 FNMA Guaranty.................................................................. 61

SECTION 7. EVENTS OF DEFAULT............................................................. 61

SECTION 8. GUARANTEE..................................................................... 64
8.1 Guarantee....................................................................... 64
8.2 No Subrogation.................................................................. 65
8.3 Amendments, etc. with respect to the Obligations; Waiver of Rights.............. 65
8.4 Guarantee Absolute and Unconditional............................................ 66
8.5 Reinstatement................................................................... 67
8.6 Payments........................................................................ 67

SECTION 9. THE AGENTS.................................................................... 67
9.1 Appointment..................................................................... 67
9.2 Delegation of Duties............................................................ 67
9.3 Exculpatory Provisions.......................................................... 67
9.4 Reliance by Agents.............................................................. 68
9.5 Notice of Default............................................................... 68
9.6 Non-Reliance on Agents and Other Lenders........................................ 68
9.7 Indemnification................................................................. 69
9.8 Agent in Its Individual Capacity................................................ 69
</TABLE>

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<PAGE> 5

9.9 Successor Agents................................................................ 70
9.10 The Arranger................................................................... 70

SECTION 10. MISCELLANEOUS................................................................ 70
10.1 Amendments and Waivers......................................................... 70
10.2 Notices........................................................................ 71
10.3 No Waiver; Cumulative Remedies................................................. 72
10.4 Survival of Representations and Warranties..................................... 73
10.5 Payment of Expenses............................................................ 73
10.6 Successors and Assigns; Participations and Assignments......................... 74
10.7 Adjustments; Set-off........................................................... 76
10.8 Counterparts................................................................... 77
10.9 Severability................................................................... 77
10.10 Integration................................................................... 77
10.11 GOVERNING LAW................................................................. 77
10.12 Submission To Jurisdiction; Waivers........................................... 77
10.13 Acknowledgements.............................................................. 78
10.14 Confidentiality............................................................... 78
10.15 Accounting Changes............................................................ 78
10.16 WAIVERS OF JURY TRIAL......................................................... 79
</TABLE>

-iv-

<PAGE> 6

ANNEXES:

A Pricing Grid

SCHEDULES:

1.1 Lenders; Commitments
1.1(a) Additions and Exclusions of Properties as Unencumbered Real Estate
Assets
2.7(a) Permitted Indebtedness
3.4 Consents, Authorizations, Filings and Notices
3.15(a) Subsidiaries
3.15(b) Outstanding Warrants
3.24 Subsidiary Guarantors
6.3(f) Existing Liens
6.5 Permitted Asset Sales
6.7 Estimated Remediation and Rehabilitation Costs
6.16 New Construction
6.17 Existing Contingent Obligations

EXHIBITS:

A Form of Subsidiary Guarantee
B Form of Compliance Certificate
C Form of Closing Certificate
D Form of Assignment and Acceptance
E-1 Form of Legal Opinion of Skadden, Arps, Slate, Meagher & Flom
E-2 Form of Legal Opinion of General Counsel
F Form of Note
G Form of Exemption Certificate
H Form of Unencumbered Real Estate Asset Certificate

-V-
<PAGE> 7

INTERIM TERM LOAN AGREEMENT, dated as of October 1, 1998, among
APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation (the
"REIT"), AIMCO PROPERTIES, L.P., a Delaware limited partnership (the
"Borrower"), the several banks and other financial institutions or entities from
time to time parties to this Agreement (the "Lenders"), LEHMAN BROTHERS INC., as
advisor and arranger (in such capacity, the "Arranger"), LEHMAN COMMERCIAL PAPER
INC., as syndication agent (in such capacity, the "Syndication Agent"), and
LEHMAN COMMERCIAL PAPER INC., as administrative agent (in such capacity, the
"Administrative Agent").

W I T N E S S E T H:

WHEREAS, the REIT owns, directly or indirectly, approximately 89.5% of
the equity interests in the Borrower, and a Wholly Owned Subsidiary of the REIT
is the sole general partner of the Borrower;

WHEREAS, the REIT has elected to be taxed for Federal income tax
purposes as a real estate investment trust;

WHEREAS, the REIT and the Borrower have entered into the Amended and
Restated Agreement and Plan of Merger, dated as of May 26, 1998 (the "Merger
Agreement"), with Insignia Financial Group, Inc. ("Insignia") and Insignia/ESG
Holdings, Inc. ("Insignia Holdings"), pursuant to which Insignia will be merged
(the "Merger") with and into the REIT, with the REIT being the surviving
corporation of the Merger;

WHEREAS, prior to the Merger, certain of Insignia's businesses will be
contributed to Insignia Holdings, and all of the capital stock of Insignia
Holdings will then be distributed to shareholders of Insignia, all as described
in the Merger Agreement;

WHEREAS the REIT and the Borrower have requested the Lenders to
provide the credit facility described below (i) to finance the cash
consideration to be paid by the Borrower and the REIT in connection with the
Merger and fees and expenses related thereto, (ii) to refinance certain existing
Indebtedness of the REIT, the Borrower and/or Insignia and (iii) for general
working capital purposes of the Borrower and its Subsidiaries; and

1
<PAGE> 8

WHEREAS, the Lenders are willing to provide such credit facility upon
and subject to the terms and conditions hereinafter set forth;

NOW, THEREFORE, in consideration of the premises and the agreements
hereinafter set forth, the parties hereto hereby agree as follows:

<PAGE> 9

SECTION 1. DEFINITIONS

1.1 Defined Terms. As used in this Agreement, the terms listed in this
Section 1.1 shall have the respective meanings set forth in this Section 1.1.

"Adjusted EBITDA": of any Person for any period, the EBITDA of such
Person for such period (or, as applicable, such Person's Pro Rata Share of
EBITDA of another Person), less reserves for repairs and replacements on
real estate assets of such Person calculated at the per annum rate of $300
per Class A Property unit and Class B Property unit, and $400 per Class C
Property unit.

"Adjusted Net Operating Income Value": an amount equal to the sum of
(i) with respect to any Class A Property, Class B Property or Class C
Property on any date, an amount equal to four times the Borrower's Pro Rata
Share of the Net Operating Income generated by such real estate asset for
the three consecutive calendar months most recently ended prior to such
date; provided, that in determining such Net Operating Income pursuant to
clause (i), reserves for repairs and replacements shall be deducted at the
per annum rate of $300 per Class A Property unit and Class B Property unit,
and $400 per Class C Property unit and (ii) with respect to (a) the LaJolla
Del Tuscon Apartments (Property ID# 1125), (b) the Pine Shadows Apartments
(Property ID# 1133), (c) the Hidden Lake Apartments (Property ID# 1123),
(d) the Legend Oaks/Woodlands Apartments (Property ID# 1126) and (e) the
Palencia Apartments (Property ID# 1131), an amount equal to (x) the
Borrower's Pro Rata Share of the Net Operating Income generated by such
Properties for the twelve consecutive calendar months most recently ended
prior to such date or, (y) if any of the Properties in the foregoing
clauses (a) through (e) was acquired less than twelve months before such
determination, the annualized Net Operating Income for such Property based
on the consecutive monthly period from the acquisition date of such
property until such date of determination; provided, that in determining
such Net Operating Income pursuant to clause (ii), reserves for repairs and
replacements shall be deducted at the per annum rate of $400 per Property
unit.

"Administrative Agent": as defined in the preamble hereto.

3
<PAGE> 10

"Affiliate": as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" of a Person
means the power, directly or indirectly, either to (a) vote 10% or more of
the securities having ordinary voting power for the election of directors
(or persons performing similar functions) of such Person or (b) direct or
cause the direction of the management and policies of such Person, whether
by contract or otherwise.

"Agents": the collective reference to the Syndication Agent and the
Administrative Agent.

"Aggregate Exposure": with respect to any Lender at any time, an
amount equal to (a) until the Closing Date, the amount of such Lender's
Commitment at such time and (b) thereafter, the aggregate then unpaid
principal amount of such Lender's Loans.

"Aggregate Exposure Percentage": with respect to any Lender at any
time, the ratio (expressed as a percentage) of such Lender's Aggregate
Exposure at such time to the Aggregate Exposure of all Lenders at such
time.

"Agreement": this Interim Term Loan Agreement, as amended,
supplemented or otherwise modified from time to time.

"Applicable Margin": for each Type of Loan, the rate per annum
determined pursuant to the Pricing Grid.

"Arranger": as defined in the preamble hereto.

"Asset Sale": any Disposition of Property or series of related
Dispositions of Property (excluding any such Disposition permitted by
clause (a), (b), (c) or (d) of Section 6.5) which yields gross proceeds to
the REIT, the Borrower or any of their respective Subsidiaries (valued at
the initial principal amount thereof in the case of non-cash proceeds
consisting of notes or other debt securities and valued at fair market
value in the case of other non-cash proceeds) in excess of $1,000,000.

4
<PAGE> 11

"Assignee": as defined in Section 10.6(c).

"Assignor": as defined in Section 10.6(c).

"Base Rate": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greatest of (a) the Prime
Rate in effect on such day, (b) the Base CD Rate in effect on such day plus
1% and (c) the Federal Funds Effective Rate in effect on such day plus 1/2
of 1%. For purposes hereof: "Prime Rate" shall mean the rate of interest
per annum publicly announced from time to time by the Reference Lender as
its prime or base rate in effect at its principal office in New York City
(the Prime Rate not being intended to be the lowest rate of interest
charged by the Reference Lender in connection with extensions of credit to
debtors); "Base CD Rate" shall mean the sum of (a) the product of (i) the
Three-Month Secondary CD Rate and (ii) a fraction, the numerator of which
is one and the denominator of which is one minus the C/D Reserve Percentage
and (b) the C/D Assessment Rate; and "Three-Month Secondary CD Rate" shall
mean, for any day, the secondary market rate for three-month certificates
of deposit reported as being in effect on such day (or, if such day shall
not be a Business Day, the next preceding Business Day) by the Board
through the public information telephone line of the Federal Reserve Bank
of New York (which rate will, under the current practices of the Board, be
published in Federal Reserve Statistical Release H.15(519) during the week
following such day), or, if such rate shall not be so reported on such day
or such next preceding Business Day, the average of the secondary market
quotations for three-month certificates of deposit of major money center
banks in New York City received at approximately 10:00 A.M., New York City
time, on such day (or, if such day shall not be a Business Day, on the next
preceding Business Day) by the Reference Lender from three New York City
negotiable certificate of deposit dealers of recognized standing selected
by it. Any change in the Base Rate due to a change in the Prime Rate, the
Three-Month Secondary CD Rate or the Federal Funds Effective Rate shall be
effective as of the opening of business on the effective day of such change
in the Prime Rate, the Three-Month Secondary CD Rate or the Federal Funds
Effective Rate, respectively.

5
<PAGE> 12

"Base Rate Loans": Loans the rate of interest applicable to which is
based upon the Base Rate.

"Benefitted Lender": as defined in Section 10.7.

"Board": the Board of Governors of the Federal Reserve System of the
United States (or any successor).

"BofA Facility": the Amended and Restated Credit Agreement, dated as
of September 30, 1998 (as amended, supplemented or otherwise modified from
time to time), among the Borrower, Bank of America National Trust and
Savings Association, as agent, and BankBoston, N.A., as documentation
agent.

"BofA Facility Documents": all documents relating to, or executed in
connection with, the BofA Facility.

"Borrower": as defined in the preamble hereto.

"Business Day": (i) for all purposes other than as covered by clause
(ii) below, a day other than a Saturday, Sunday or other day on which the
Administrative Agent or commercial banks in New York City are authorized or
required by law to close and (ii) with respect to all notices and
determinations in connection with, and payments of principal and interest
on, Eurodollar Loans, any day which is a Business Day described in clause
(i) and which is also a day for trading by and between banks in Dollar
deposits in the interbank eurodollar market.

"Capital Expenditures": for any period, with respect to any Person,
the aggregate of all expenditures by such Person and its Subsidiaries for
the acquisition or leasing (pursuant to a capital lease) of fixed or
capital assets or additions to equipment (including replacements,
capitalized repairs and improvements during such period) which should be
capitalized under GAAP on a consolidated balance sheet of such Person and
its Subsidiaries.

"Capital Lease Obligations": as to any Person, the obligations of such
Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a

6
<PAGE> 13

combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under
GAAP, and, for the purposes of this Agreement, the amount of such
obligations at any time shall be the capitalized amount thereof at such
time determined in accordance with GAAP.

"Capital Stock": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a
corporation) and any and all warrants, rights or options to purchase any of
the foregoing.

"Carrying Value": with respect to any asset or liability of any
Person, the amount at which such asset or liability has been recorded or,
in accordance with GAAP, should have been recorded, in the books of account
of such Person, as reduced by any reserves or write-downs which have been
announced, set aside or taken or, in accordance with GAAP, should have
been set aside or taken, with respect thereto; provided, that if more than
one method of recording the amount of any asset or liability, or the
setting aside or taking of any reserves or write-downs with respect
thereto, is permitted under GAAP, the permitted method actually used shall
be controlling for purposes of determining Carrying Value, provided that
such method is used in a manner consistent with prior periods.

"Cash and Cash Equivalent Amount": on any date, an amount equal to the
Borrower's Pro Rata Share of all cash and Cash Equivalents held on such
date, determined in accordance with GAAP.

"Cash Equivalents": (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by
any agency thereof and backed by the full faith and credit of the United
States, in each case maturing within one year from the date of acquisition;
(b) certificates of deposit, time deposits, eurodollar time deposits or
overnight bank deposits having maturities of six months or less from the
date of acquisition issued by any Lender or by any commercial bank
organized under the laws of the United States of America or any state
thereof having combined capital and surplus of not less than $500,000,000;
(c) commercial paper of an issuer rated at least A-1 by Standard & Poor's
Ratings Services

7
<PAGE> 14

("S&P") or P-1 by Moody's Investors Service, Inc. ("Moody's"), or carrying
an equivalent rating by a nationally recognized rating agency, if both of
the two named rating agencies cease publishing ratings of commercial paper
issuers generally, and maturing within six months from the date of
acquisition; (d) repurchase obligations of any Lender or of any commercial
bank satisfying the requirements of clause (b) of this definition, having a
term of not more than 30 days with respect to securities issued or fully
guaranteed or insured by the United States government; (e) securities with
maturities of one year or less from the date of acquisition issued or fully
guaranteed by any state, commonwealth or territory of the United States, by
any political subdivision or taxing authority of any such state,
commonwealth or territory or by any foreign government, the securities of
which state, commonwealth, territory, political subdivision, taxing
authority or foreign government (as the case may be) having the highest
rating by S&P or Moody's; (f) securities with maturities of six months or
less from the date of acquisition backed by standby letters of credit
issued by any Lender or any commercial bank satisfying the requirements of
clause (b) of this definition; or (g) shares of money market mutual or
similar funds which invest exclusively in assets satisfying the
requirements of clauses (a) through (f) of this definition.

"Category I Contract": any Management Contract (a) under which the
entity providing the management services is a Qualified Management Entity
(when the term "Category I Contract" is used in calculating Long Term
Management Contract Value) or a Management Entity (when the term "Category
I Contract" is used in calculating Gross Asset Value) and (b) which meets
either of the following criteria: (i) the Borrower or the REIT, directly or
through a Wholly Owned Subsidiary, is the sole general partner, with at
least a 51% equity interest, in the entity which owns the property that is
the subject of such Management Contract and the Borrower or the REIT has
complete and sole discretion of the selection of the property manager for
such property or (ii) such Management Contract is not cancelable by the
property owner without cause and has at least 10 years remaining term as of
the date of the determination thereof.

"Category II Contract": any Management Contract (a) under which the
entity providing the management services is a Qualified Management Entity
(when the term "Category II Contract" is used in calculating Long

8
<PAGE> 15

Term Management Contract Value) or a Management Entity (when the term
"Category II Contract" is used in calculating Gross Asset Value) and (b) in
respect of which the Borrower or the REIT, directly or through Wholly Owned
Subsidiaries, is the sole general partner, with less than a 51% equity
interest, in the entity which owns the property that is the subject of such
Management Contract (and, as general partner, has complete and sole
discretion with respect to the selection of the property manager for such
entity).

"C/D Assessment Rate": for any day as applied to any Base Rate Loan,
the annual assessment rate in effect on such day which is payable by a
member of the Bank Insurance Fund maintained by the Federal Deposit
Insurance Corporation (the "FDIC") classified as well-capitalized and
within supervisory subgroup "B" (or a comparable successor assessment risk
classification) within the meaning of 12 C.F.R. Section 327.4 (or any
successor provision) to the FDIC (or any successor) for the FDIC's (or such
successor's) insuring time deposits at offices of such institution in the
United States.

"C/D Reserve Percentage": for any day as applied to any Base Rate
Loan, that percentage (expressed as a decimal) which is in effect on such
day, as prescribed by the Board, for determining the maximum reserve
requirement for a Depositary Institution (as defined in Regulation D of the
Board as in effect from time to time) in respect of new non-personal time
deposits in Dollars having a maturity of 30 days or more.

"Class A Property": any rental apartment property which is generally
recognized as a Class A property in accordance with prevailing national
real estate industry standards, pursuant to prevailing appraisal methods
and procedures.

"Class B Property": any rental apartment property which is generally
recognized as a Class B property in accordance with prevailing national
real estate industry standards, pursuant to prevailing appraisal methods
and procedures.

"Class C Property": any rental apartment property which is generally
recognized as other than a Class A Property or a Class B Property in

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<PAGE> 16

accordance with prevailing national real estate industry standards,
pursuant to prevailing appraisal methods and procedures.

"Closing Date": the date on which the conditions precedent set forth
in Section 4.1 shall have been satisfied, which date shall be not later
than October 1, 1998.

"Code": the Internal Revenue Code of 1986, as amended from time to
time.

"Commonly Controlled Entity": an entity, whether or not incorporated,
which is under common control with the Borrower within the meaning of
Section 4001 of ERISA or is part of a group which includes the Borrower and
which is treated as a single employer under Section 414 of the Code.

"Commitment": as to any Lender, the obligation of such Lender to make
a Loan to the Borrower on the Closing Date in an amount not exceeding the
amount set forth with such Lender's name on Schedule 1.1.

"Commitment Percentage": as to any Lender, the percentage which such
Lender's Commitment constitutes of the aggregate commitments of all
Lenders.

"Compliance Certificate": a certificate duly executed by a Responsible
Officer substantially in the form of Exhibit B.

"Consolidated Adjusted EBITDA": for any period, Adjusted EBITDA of the
REIT, the Borrower and their respective Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP for such period,
plus the Borrower's Pro Rata Share of aggregate Net Management Fee Income
for each of the Management Entities and plus, with respect to any period
commencing less than four months after the Closing Date, any amounts for
accounting, reporting and ancillary fees (and similar items as determined
reasonably by the Administrative Agent) earned by the REIT, the Borrower
and their Subsidiaries. For avoidance of doubt, accounting, reporting and
ancillary fees shall not be included in Consolidated Adjusted EBITDA for
any period commencing four months or more after the Closing Date.

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<PAGE> 17

"Consolidated Intangibles": at any date, all amounts which would, in
conformity with GAAP, be classified as intangible assets on a consolidated
balance sheet of the REIT and its Subsidiaries, including, without
limitation, (a) goodwill, including any amounts (however designated on the
balance sheet) representing the cost of acquisitions in excess of
underlying net tangible assets, and (b) patents, trademarks, copyrights and
other intangibles.

"Consolidated Tangible Net Worth": at any date, all amounts which
would, in conformity with GAAP, be included on a consolidated balance sheet
of the REIT and its Subsidiaries under stockholders' equity at such date,
minus Consolidated Intangibles on such date, plus the minority interests in
the equity of the Borrower held by Persons other than the REIT and its
Wholly Owned Subsidiaries.

"Contingent Obligation": as to any Person, (a) any Guarantee
Obligation of that Person, and (b) any direct or indirect obligation or
liability, contingent or otherwise, of that Person, (i) in respect of any
letter of credit or similar instrument issued for the account of that
Person or as to which that Person is otherwise liable for reimbursement of
drawings, (ii) as a partner or joint venturer in any partnership or joint
venture, (iii) to purchase any materials, supplies or other Property from,
or to obtain the services of, another Person if the relevant contract or
other related document or obligation requires that payment for such
materials, supplies or other Property, or for such services, shall be made
regardless of whether delivery of such materials, supplies or other
Property is ever made or tendered, or such services are ever performed or
tendered, or (iv) incurred pursuant to any Hedge Agreement. Except as
provided in the definition of "Total Indebtedness" below, the amount of any
Contingent Obligation shall (subject, in the case of Guarantee Obligations,
to the last sentence of the definition of "Guarantee Obligation") be deemed
equal to the maximum reasonably anticipated liability in respect thereof.

"Continuing Directors": the directors of the REIT on the Closing Date,
after giving effect to the Merger and the other transactions contemplated

11
<PAGE> 18

hereby, and each other director, if, in each case, such other director's
nomination for election to the board of directors of the REIT is
recommended by at least 66-2/3% of the then Continuing Directors.

"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement (including any
Management Contract or note receivable), instrument or other undertaking to
which such Person is a party or by which it or any of its Property is
bound.

"Credit Rating": with respect to any Person, the lowest rating
assigned by a Rating Agency to such Person's senior unsubordinated,
unsecured and non-credit enhanced long term indebtedness; provided,
however, that in all events, if a Person's senior unsubordinated long term
indebtedness is rated by only one Rating Agency, then it shall be deemed to
have a Credit Rating below Investment Grade.

"D&P": Duff & Phelps Rating Co.

"Debt Service Coverage Ratio": as of the last day of any month, the
ratio of (a) the sum of (i) the aggregate Adjusted Net Operating Income
Value as of such date, in respect of all Unencumbered Real Estate Assets,
plus (ii) the Borrower's Pro Rata Share of aggregate Net Management Fee
Income for such period in respect of all performing and unencumbered
Management Contracts plus (iii) the aggregate net income received by the
Borrower during such period in respect of performing and unencumbered notes
receivable, to (b) the greater of (i) the actual amount of principal,
interest, fees and other amounts scheduled to be payable by the Borrower,
the REIT and their respective Subsidiaries (without duplication) in respect
of unsecured Indebtedness during the first twelve consecutive calendar
months immediately following such date and (ii) an assumed debt service
amount for such unsecured Indebtedness for the first twelve consecutive
calendar months immediately following such date, calculated on the basis of
a 25 year amortization schedule with equal monthly installments of
principal and interest and an assumed interest rate equal to 2.00% above
the annual interest rate in effect on the date of calculation on U.S.
Treasury obligations having a maturity of seven years from the date of such
calculation (as determined by the Administrative Agent from such sources as
it selects in its sole discretion).

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<PAGE> 19

"Default": any of the events specified in Section 7, whether or not
any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.

"Disposition": with respect to any Property, any sale, lease, sale and
leaseback, assignment, conveyance, transfer or other disposition thereof;
the terms "Dispose" and "Disposed of" shall have correlative meanings.

"Dollars" and "$": dollars in lawful currency of the United States of
America.

"Due Diligence Package": with respect to any Property proposed to be
added as an additional Unencumbered Real Estate Asset after the Closing
Date, the due diligence and underwriting materials customarily prepared by
or for the Borrower (or its Subsidiaries) in connection with the
acquisition of Property.

"EBITDA": for any period and for any Person (in the case of the REIT,
before deducting for the minority interest in the Borrower held by Persons
other than the REIT and its Wholly Owned Subsidiaries) the sum of the
following (references to line items to be taken from the financial
statements prepared in accordance with GAAP): (a) the net income (or net
loss) of such Person during such period plus (b) amounts treated as
depreciation, interest expense and the amortization of intangibles of any
kind to the extent included in the determination of such net income (or
loss), plus (c) all accrued taxes on income to the extent included in the
determination of such net income (or loss); provided, that net income (or
loss) shall be computed for those purposes without giving effect to (i)
extraordinary gains or losses (including gains or losses from the sale of
properties or assets) and (ii) any amortization of capitalized financing
expenses or charges related to restructuring of Indebtedness; and provided,
further that EBITDA of any Person shall exclude amounts related to equity
or interests in earnings (or losses) of unconsolidated Subsidiaries,
including without limitation, Management Entities.

"Eligible Note Receivable": any note receivable which is not subject
to a Lien and (a) which is wholly owned by the Borrower or a

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<PAGE> 20

Wholly Owned Subsidiary, (b) in respect of which the obligor (i) is an
entity controlled by the Borrower, the REIT or any of their respective
Wholly Owned Subsidiaries and (ii) is an entity of which the sole general
partner is the Borrower, the REIT or any of their respective Wholly Owned
Subsidiaries, (c) which is in a face amount less any discount allocated to
such note by the Borrower or its Wholly Owned Subsidiary at the time such
note is acquired which, when added to all other Indebtedness secured by the
asset securing such note receivable, would not exceed (i) 85% of the Real
Estate Value (without adjustment for the Borrower's Pro Rata Share) of such
asset, in the case of any calculation of Note Receivable Value prior to the
date which is four months after the Closing Date, or (ii) 80% of such Real
Estate Value (without adjustment for the Borrower's Pro Rata Share), in the
case of any such determination thereafter, provided that this clause (c)
shall also include the note receivable with respect to the Eaglewood
Apartments (Property ID# 775), so long as such note receivable is the sole
Indebtedness with respect to such Property, (d) is a performing note
receivable in respect of which there is no overdue payment of principal or
interest, (e) in respect of which the related asset is at least a Class B
Property and (f) in respect of which the related asset is free of any
material structural, title or other similar defect and is in compliance
with Environmental Law.

"Environmental Claims": all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law or for release or
injury to the environment or threat to public health, personal injury
(including sickness, disease or death), property damage, natural resources
damage, or otherwise alleging liability or responsibility for damages
(punitive or otherwise), cleanup, removal, remedial or response costs,
restitution, civil or criminal penalties, injunctive relief, or other type
of relief, resulting from or based upon (a) the presence, placement,
discharge, emission or release (including intentional and unintentional,
negligent and non-negligent, sudden or non-sudden, accidental or
non-accidental placement, spills, leaks, discharges, emissions or release)
of any Hazardous Material at, in, or from Property, whether or not owned by
the Borrower, or (b) any other circumstances forming the basis of any
violation, or alleged violation, of any Environmental Law.

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<PAGE> 21

"Environmental Laws": any and all laws, rules, orders, regulations,
statutes, ordinances, guidelines, codes, decrees, or other legally
enforceable requirements (including, without limitation, common law) of any
international authority, foreign government, the United States, or any
state, local, municipal or other governmental authority, regulating,
relating to or imposing liability or standards of conduct concerning
protection of the environment or of human health, or employee health and
safety, as has been, is now, or may at any time hereafter be, in effect.

"Environmental Permits": any and all permits, licenses, approvals,
registrations, notifications, exemptions and any other authorization
required under any Environmental Law.

"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.

"Estimated Remediation and Rehabilitation Cost": all costs associated
with performing work to address deferred maintenance and immediate capital
repairs and replacements and to remediate contamination of real property or
groundwater in accordance with Environmental Law and as recommended by an
environmental consultant reasonably satisfactory to the Administrative
Agent, including in all cases engineering and other professional fees and
expenses, costs to remove, transport and dispose of contaminated soil,
costs to "cap" or otherwise contain contaminated soil, and costs to pump
and treat water and monitor water quality, as estimated by the Borrower in
good faith, subject to the reasonable approval of the Administrative Agent.

"Eurocurrency Reserve Requirements": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal fraction) of reserve requirements in effect on such
day (including, without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board or other Governmental
Authority having jurisdiction with respect thereto) dealing with reserve
requirements prescribed for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of the Board) maintained by a
member bank of the Federal Reserve System.

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<PAGE> 22

"Eurodollar Base Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum determined on
the basis of the rate for deposits in Dollars for a period equal to such
Interest Period commencing on the first day of such Interest Period
appearing on Page 3750 of the Telerate screen as of 11:00 A.M., London
time, two Business Days prior to the beginning of such Interest Period. In
the event that such rate does not appear on Page 3750 of the Telerate
screen (or otherwise on such screen), the "Eurodollar Base Rate" for
purposes of this definition shall be determined by reference to such other
comparable publicly available service for displaying eurodollar rates as
may be selected by the Administrative Agent or, in the absence of such
availability, by reference to the rate at which the Administrative Agent is
offered Dollar deposits at or about 11:00 A.M., New York City time, two
Business Days prior to the beginning of such Interest Period in the
interbank eurodollar market where its eurodollar and foreign currency and
exchange operations are then being conducted for delivery on the first day
of such Interest Period for the number of days comprised therein.

"Eurodollar Loans": Loans the rate of interest applicable to which is
based upon the Eurodollar Rate.

"Eurodollar Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to the
nearest 1/100th of 1%):

Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements

"Eurodollar Tranche": the collective reference to Eurodollar Loans the
then current Interest Periods with respect to all of which begin on the
same date and end on the same later date.

"Event of Default": any of the events specified in Section 7, provided
that any requirement for the giving of notice, the lapse of time, or both,
has been satisfied.

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<PAGE> 23

"Federal Funds Effective Rate": for any day, the weighted average of
the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published on
the next succeeding Business Day by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day which is a Business Day,
the average of the quotations for the day of such transactions received by
the Reference Lender from three federal funds brokers of recognized
standing selected by it.

"FNMA Guaranty": a collective reference to (i) the FNMA Payment
Guaranty and (ii) the related FNMA Master Cash Management Agreement.

"FNMA Master Cash Management Agreement": the Master Cash Management
Security, Pledge and Assignment Agreement, dated as of August 27, 1998,
made by the Borrower in favor of the Federal National Mortgage Association.

"FNMA Payment Guaranty": the Payment Guaranty,, dated as of May 8,
1998, made by the Borrower in favor of the Federal National Mortgage
Association.

"Funding Office": the office specified from time to time by the
Administrative Agent as its funding office by notice to the Borrower and
the Lenders.

"Funds From Operations": with respect to the Borrower, the REIT, and
their Subsidiaries on a consolidated basis, net income calculated in
accordance with GAAP, excluding gains or losses from debt restructuring and
sales of property, plus real estate depreciation and amortization
(excluding amortization of financing costs), plus amortization associated
with the purchase of property management companies, and after adjustments
for unconsolidated partnerships and joint ventures (with adjustments for
unconsolidated partnerships and joint ventures calculated to reflect funds
from operations on the same basis), plus non-cash deferred portion of the
income tax provision for unconsolidated Subsidiaries.

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<PAGE> 24

"GAAP": generally accepted accounting principles in the United States
of America as in effect from time to time, except that for purposes of
Section 6.1, GAAP shall be determined on the basis of such principles in
effect on the date hereof and consistent with those used in the preparation
of the most recent audited financial statements delivered pursuant to
Section 3.1(b) and the pro forma balance sheet delivered pursuant to
Section 3.1(a).

"Governmental Authority": any nation or government, any state or other
political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.

"Gross Asset Value": at any date, the sum of (a) the Real Estate
Value, including Unencumbered Real Estate Assets, (b) the Borrower's Pro
Rata Share of an amount equal to the sum of (i) five times the Net
Management Fee Income in respect of Category I Contracts, (ii) an amount
equal to four times the Net Management Fee Income in respect of Category II
Contracts and (iii) an amount equal to three times the Net Management Fee
Income in respect of Short Term Management Contracts (provided, that the
amount described in this clause (b) shall in no event constitute more than
15% of Gross Asset Value, and no value shall be attributed in this clause
(b) to Management Contracts in respect of assets that are wholly owned,
directly or indirectly, by the Borrower or the REIT), (c) the Borrower's
Pro Rata Share of the Carrying Value of all currently performing notes
receivable held by the Borrower and its Subsidiaries and (d) the Cash and
Cash Equivalent Amount (including Restricted Cash) on such date, less
Estimated Remediation and Rehabilitation Costs on Property owned by the
REIT, the Borrower and their respective consolidated Subsidiaries.

"Guarantee": as defined in Section 8.1(b).

"Guarantee Obligation": as to any Person (the "guaranteeing person"),
any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit) to
induce the creation of which the guaranteeing person has issued a
reimbursement, counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends
or other obligations (the "primary obligations") of any other third Person
(the

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<PAGE> 25

"primary obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or
any Property constituting direct or indirect security therefor, (ii) to
advance or supply funds (1) for the purchase or payment of any such primary
obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase Property, securities or services
primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation or (iv) otherwise to assure or hold harmless the owner
of any such primary obligation against loss in respect thereof; provided,
however, that the term Guarantee Obligation shall not include endorsements
of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Guarantee Obligation is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the instrument
embodying such Guarantee Obligation, unless such primary obligation and the
maximum amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee
Obligation shall be such guaranteeing person's maximum reasonably
anticipated liability in respect thereof as determined by the Borrower in
good faith.

"Hazardous Materials": (i) all those substances which are regulated
by, or which may form the basis of liability under, any Environmental Law,
including all substances identified under any Environmental Law as a
pollutant, contaminant, hazardous waste, hazardous constituent, special
waste, hazardous substance, hazardous material, or toxic substance, or
petroleum or petroleum-derived substance or waste, (ii) any other materials
or pollutants that (a) pose a hazard to any Property of the Borrower or to
Persons on or about such Property or (b) cause such Property to be in
violation of any Environmental Laws, (iii) asbestos in any form which is or
could become friable, urea formaldehyde foam insulation, electrical
equipment which contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of fifty parts per million, and (iv)
any other chemical, material, substance, or waste, exposure to which is
prohibited,

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<PAGE> 26

limited, or regulated by any Governmental Authority or may or could pose a
hazard to the health and safety of the owners, occupants, or any Persons
surrounding the relevant Property.

"Hedge Agreements": all interest rate swaps, caps or collar agreements
or similar arrangements entered into by the Borrower, the REIT or any of
their respective Subsidiaries providing for protection against fluctuations
in interest rates or currency exchange rates or the exchange of nominal
interest obligations, either generally or under specific contingencies.

"Indebtedness": of any Person at any date, without duplication, (a)
all indebtedness of such Person for borrowed money, (b) all obligations of
such Person for the deferred purchase price of Property or services (other
than trade payables incurred in the ordinary course of such Person's
business which are less than 60 days past due), (c) all obligations of such
Person evidenced by notes, bonds, debentures or other similar instruments,
(d) all indebtedness created or arising under any conditional sale or other
title retention agreement with respect to Property acquired by such Person
(even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of
such Property), (e) all Capital Lease Obligations of such Person, (f) all
obligations of such Person, contingent or otherwise, as an account party
under acceptance, letter of credit or similar facilities, (g) all
obligations of such Person, contingent or otherwise, to purchase, redeem,
retire or otherwise acquire for value any Capital Stock of such Person, (h)
all Guarantee Obligations of such Person in respect of obligations of the
kind referred to in clauses (a) through (g) above; (i) all obligations of
the kind referred to in clauses (a) through (h) above secured by (or for
which the holder of such obligation has an existing right, contingent or
otherwise, to be secured by) any Lien on Property (including, without
limitation, accounts and contract rights) owned by such Person, whether or
not such Person has assumed or become liable for the payment of such
obligation and (j) for the purposes of Section 7(e) only, all obligations
of such Person in respect of Hedge Agreements. Indebtedness shall not
include (i) that certain bond titled "State of Florida Housing Finance
Agency Multifamily Housing Revenue Bond 1994 Series A (Palencia Apartments
Project)" dated March 31, 1994 (the "Bond") so long as the Bond is solely
owned by the Borrower or any of

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<PAGE> 27

its Wholly Owned Subsidiaries and (ii) any partnership units issued by the
Borrower.

"Indemnified Liabilities": as defined in Section 10.5.

"Indemnitee": as defined in Section 10.5.

"Insolvency": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.

"Insolvent": pertaining to a condition of Insolvency.

"Intellectual Property": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether
arising under United States, multinational or foreign laws or otherwise,
including, without limitation, copyrights, copyright licenses, patents,
patent licenses, trademarks, trademark licenses, technology, know-how and
processes, and all rights to sue at law or in equity for any infringement
or other impairment thereof, including the right to receive all proceeds
and damages therefrom.

"Interest Expense": for any period, gross interest expense incurred
for the period (including all commissions, discounts, fees and other
charges in connection with standby letters of credit and similar
instruments), including any amounts as capitalized interest, for the
Borrower, the REIT and their respective Subsidiaries, and the portion of
the upfront costs and expenses for Hedge Agreements entered into by the
Borrower, the REIT and their respective Subsidiaries (to the extent not
included in gross interest expense) fairly allocated to such Hedge
Agreements as expenses for such period, as determined in accordance with
GAAP; provided, that, all interest expense accrued by the Borrower, the
REIT and their respective Subsidiaries during such period, even if not
payable on or before the Maturity Date, shall be included within "Interest
Expense." Notwithstanding the foregoing, interest accrued under any
Intra-Company Debt shall not be included within "Interest Expense" for any
purposes hereof.

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<PAGE> 28

"Interest Payment Date": (a) as to any Base Rate Loan, the last day of
each calendar month to occur while such Loan is outstanding, (b) as to any
Eurodollar Loan, the last day of each Interest Period with respect thereto
and (c) as to any Loan, the date of any repayment or prepayment made in
respect thereof.

"Interest Period": as to any Eurodollar Loan, (a) initially, the
period commencing on the borrowing or conversion date, as the case may be,
with respect to such Eurodollar Loan and ending one month thereafter; and
(b) thereafter, each period commencing on the day after the last day of the
next preceding Interest Period applicable to such Eurodollar Loan and
ending one month thereafter; provided, that all of the foregoing provisions
relating to Interest Periods are subject to the following:

(iii) if any Interest Period would otherwise end on a day that is
not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would be
to carry such Interest Period into another calendar month in which
event such Interest Period shall end on the immediately preceding
Business Day;

(iv) any Interest Period that would otherwise extend beyond the
Maturity Date shall end on the Maturity Date;

(v) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the next calendar month;
and

(vi) the Borrower shall select Interest Periods so as not to
require a payment or prepayment of any Eurodollar Loan during an
Interest Period for such Loan.

"Intra-Company Debt": Indebtedness (whether book-entry or evidenced by
a term, demand or other note or other instrument) owed by the Borrower, the
REIT or any of their respective Subsidiaries to the Borrower, the REIT or
any of their respective Subsidiaries.

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<PAGE> 29
"Investment Grade": with respect to any Person, a Credit Rating from
at least two Rating Agencies which is at least BBB- (or its equivalent) or
better.

"Investments": as defined in Section 6.8.

"Lenders": as defined in the preamble hereto.

"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention agreement
and any capital lease having substantially the same economic effect as any
of the foregoing).

"Loan": as defined in Section 2.1.

"Loan Documents": this Agreement, the Subsidiaries' Guarantee and the
Notes.

"Loan Parties": the REIT, the Borrower and each Subsidiary Guarantor.

"Long Term Management Contract Value": on any date, an amount equal to
the sum of (a) five times the Borrower's Pro Rata Share of the Net
Management Fee Income from Category I Contracts plus (b) four times the
Borrower's Pro Rata Share of Net Management Fee Income from Category II
Contracts; provided, that no value shall be attributed to Management
Contracts in respect of assets that are wholly owned, directly or
indirectly, by the Borrower or the REIT, and no value shall be attributed
to (i) any Management Contract that is subject to any Lien other than Liens
permitted under Sections 6.3(a)-(e), (ii) a Management Contract with a
Management Entity party thereto, if such Management Entity has incurred any
Indebtedness or (iii) any Management Contract which is held by a
Non-Subsidiary Guarantor. Net Management Fee Income earned pursuant to
management agreements (x) which are cancelled or transferred to a Person
which is not a Qualified Management Entity or (y) for which the Borrower
has received

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<PAGE> 30
notice that any such agreement is to be terminated within 12 months shall
be excluded from the calculation of Long Term Management Contract Value in
the quarter in which such cancellation, transfer or notice occurs and
thereafter.

"Management Contract": any contract pursuant to which the Borrower or
any Management Entity agrees to perform management services in respect of
real estate assets.

"Management Entity": any entity of which the Borrower or the REIT owns
a majority of the Capital Stock and which is primarily engaged in the
business of managing multifamily apartment projects or other real estate
projects or providing ancillary or related services, including, without
limitations, the following: NHP Management Company, a District of Columbia
corporation, Property Asset Management Services, L.P., a Delaware limited
partnership, Property Asset Management Services, Inc., a Delaware
corporation, and Property Asset Management Services-CA, LLC, a California
limited liability company.

"Material Adverse Effect": a material adverse effect on (a) the
Merger, (b) the business, assets, property, condition (financial or
otherwise) of the REIT, the Borrower and their respective Subsidiaries
taken as a whole or (c) the validity or enforceability of this Agreement or
any of the other Loan Documents or the rights or remedies of the Agents or
the Lenders hereunder or thereunder.

"Material Environmental Amount": an amount or amounts payable by the
REIT, the Borrower and/or any of their Subsidiaries, in the aggregate in
excess of $500,000, for: costs to comply with any Environmental Law; costs
of any investigation, and any remediation, of any Hazardous Material; and
compensatory damages (including, without limitation damages to natural
resources), punitive damages, fines, and penalties pursuant to any
Environmental Law.

"Material Subsidiary": as defined in Section 7(f).

"Maturity Date": September 30, 1999.

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<PAGE> 31
"Merger": as defined in the recitals to this Agreement.

"Merger Agreement": as defined in the recitals to this Agreement.

"Merger Documentation": collectively, the Merger Agreement and all
schedules, exhibits, annexes and amendments thereto and all side letters
and agreements affecting the terms thereof or entered into in connection
therewith, in each case, as amended, supplemented or otherwise modified
from time to time.

"Multiemployer Plan": a Plan which is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.

"Net Cash Proceeds": (a) in connection with any Asset Sale or any
Recovery Event, the proceeds thereof in the form of Cash and Cash
Equivalents (including any such proceeds received by way of deferred
payment of principal pursuant to a note or installment receivable or
purchase price adjustment receivable or otherwise, but only as and when
received) of such Asset Sale or Recovery Event, net of attorneys' fees,
accountants' fees, investment banking, broker's or finder's fees, amounts
required to be applied to the repayment of Indebtedness secured by a Lien
expressly permitted hereunder on any Property which is the subject of such
Asset Sale or Recovery Event (other than any Lien pursuant to a Security
Document) and other customary fees and expenses actually incurred in
connection therewith and net of taxes paid or reasonably estimated to be
payable as a result thereof (after taking into account any available tax
credits or deductions and any tax sharing arrangements) and (b) in
connection with any issuance or sale of equity securities or debt
securities or instruments or the incurrence of loans, the cash proceeds
received from such issuance or incurrence, net of attorneys' fees,
investment banking fees, accountants' fees, underwriting discounts and
commissions and other customary fees and expenses actually incurred in
connection therewith.

"Net Management Fee Income": as of any date and with respect to any
Management Contract, the net income, determined in accordance with GAAP,
derived by the Borrower and the Management Entities from such Management
Contract for the period of twelve consecutive calendar months most recently
ended prior to such date; provided, that in any event such net

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<PAGE> 32
income shall be net of any costs or expenses incurred by the Borrower and
the Management Entities during such period in performing services required
under such Management Contract.

"Net Operating Income": for any period, as to any real estate asset
(a) all gross revenues received from the operation of such real estate
asset during such period including, without limitation, payments received
on account of business or rental interruption insurance and condemnation
proceeds from any temporary use or occupancy, in each case to the extent
attributable to the period for which such Net Operating Income is being
determined, but excluding any proceeds from the sale or other disposition
of any part of all of such real estate asset; or from any financing or
refinancing of such real estate asset; or from any condemnation of any part
or all of such real estate asset (except for temporary use or occupancy);
or on account of a casualty to the property (other than payments on account
of business or rental interruption insurance); or any security deposits
paid under leases of all or part of such real estate asset, unless
forfeited by tenants; and similar items or transactions the proceeds of
which under GAAP are deemed attributable to capital), minus (b) all
reasonable and customary property maintenance and repair costs, leasing and
administrative costs, management fees equal to the greater of the actual
amount of management fees paid and the management fee calculated at the
rate of 4% of gross receipts from all real estate assets for such period
(whether or not actually paid pursuant to separate management contract or
otherwise), and real estate taxes and insurance premiums actually payable
by the Borrower during such period with respect to such real estate asset
(exclusive of Capital Expenditures). There shall be no deduction for any
expense not involving or requiring a cash expenditure, such as
depreciation. Net Operating Income shall be determined in accordance with
GAAP.

"Non-Excluded Taxes": as defined in Section 2.15(a).

"Non-Guarantor Subsidiaries": any Subsidiary of the REIT or the
Borrower other than those listed on Schedule 3.24.

"Non-Recourse Indebtedness": any Indebtedness of the Borrower, the
REIT or any of their respective Subsidiaries; provided, that (i) the
holders of such Indebtedness shall have no recourse to the REIT, the

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<PAGE> 33

Borrower or any of their respective Subsidiaries in respect of such
Indebtedness and (ii) such Indebtedness shall not be, directly or
indirectly, guaranteed by, or secured by any Property of, the REIT, the
Borrower or any of their respective Subsidiaries (other than the Property
acquired or financed with the proceeds of such Indebtedness), provided,
however, that with respect to Indebtedness secured by such acquired or
financed Property pursuant to clause (ii) which contains limitations as to
the nonrecourse nature of the obligation, such limited nonrecourse
obligations shall not be deemed Recourse Indebtedness if and to the extent
the nonrecourse exceptions are for liability of such Person for any of the
following under the applicable loan documentation and solely to the extent
the following exceptions relate to the Property acquired or financed by
such Indebtedness: (a) fraud, waste, material misrepresentation, or willful
misconduct; (b) indemnification with respect to environmental matters or
failure to comply with Environmental Laws; (c) failure to maintain required
insurance policies; (d) misapplication of insurance proceeds, condemnation
awards and tenant security deposits; (e) breach of covenants relating to
unpermitted transfers or encumbrances of real property or other collateral;
(f) misappropriation or misapplication of property income; (g) breach of
covenants relating to unpermitted transfers of interests in a Person; (h)
failure to deliver books and records; or (i) failure to pay transfer fees
or charges. An obligation of a Person that is Non-Recourse Indebtedness but
becomes Recourse Indebtedness upon the occurrence of the events or
circumstances described in clauses (a) through (i) above shall not be
considered Recourse Indebtedness unless such events or circumstances have
occurred.

"Non-U.S. Lender": as defined in Section 2.15(d).

"Note": as defined in Section 2.4(e).

"Note Receivable Value": on any date, with respect to any Eligible
Note Receivable held by the Borrower or a Wholly Owned Subsidiary, an
amount equal to the lesser of (a) the Carrying Value of such Eligible Note
Receivable and (b) an amount which, when added to all other Indebtedness
secured by the asset related to such Eligible Note Receivable, would equal
75% of the Real Estate Value of such asset (without adjustment for the
Borrower's Pro Rata Share), provided, that no value shall be attributed to
(i) any Eligible Note Receivable that is subject to any Lien other than
Liens

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<PAGE> 34

permitted under Sections 6.3(a)-(e) or (ii) an Eligible Note Receivable
held by any of the Borrower's Wholly Owned Subsidiaries, if (x) such Wholly
Owned Subsidiary has incurred any Indebtedness or (y) such Eligible Note
Receivable is held by a Non-Guarantor Subsidiary.

"Obligations": the unpaid principal of and interest on (including,
without limitation, interest accruing after the maturity of the Loans and
interest accruing after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating
to the Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) the Loans and all other obligations
and liabilities of the Borrower to the Administrative Agent or to any
Lender (or, in the case of Hedge Agreements, any affiliate of any Lender),
whether direct or indirect, absolute or contingent, due or to become due,
or now existing or hereafter incurred, which may arise under, out of, or in
connection with, this Agreement, any other Loan Document, any Hedge
Agreement entered into with any Lender or any affiliate of any Lender or
any other document made, delivered or given in connection herewith or
therewith, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses (including, without
limitation, all fees, charges and disbursements of counsel to the
Administrative Agent or to any Lender that are required to be paid by the
Borrower pursuant hereto) or otherwise.

"Other Taxes": any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies
arising from any payment made hereunder or from the execution, delivery or
enforcement of, or otherwise with respect to, this Agreement or any other
Loan Document.

"Participant": as defined in Section 10.6(b).

"Payment Office": the office specified from time to time by the
Administrative Agent as its payment office by notice to the Borrower and
the Lenders.

"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA (or any successor).

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<PAGE> 35

"Person": an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of
whatever nature.

"Plan": at a particular time, any employee benefit plan which is
covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.

"Preferred Stock Subsidiary": any entity in which a Person (i) owns
95% of the non-voting preferred stock and (ii) over which such person does
not exercise control.

"Pricing Grid": the pricing grid attached hereto as Annex A.

"Pro Forma Balance Sheet": as defined in Section 3.1(a).

"Projections": as defined in Section 5.2(c).

"Property": any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or
intangible, including, without limitation, Capital Stock.

"Property Liability": with respect to any Unencumbered Real Estate
Asset, the aggregate amount of the loss, damage or other liability or
reduction in value associated with such Property as a result of any
Environmental Claims or other adverse defect, condition, hazard,
condemnation, violation or other circumstance with respect to such Property
which shall be disclosed in each Compliance Certificate required to be
delivered by the Borrower under this Agreement.

"Pro Rata Share": with respect to the REIT or the Borrower, as the
case may be, and with respect to any asset value, any income generated by
any asset or any Indebtedness of any entity in which the REIT or the
Borrower, as the case may be, has an ownership interest, a portion of such
value, income

29
<PAGE> 36

or Indebtedness equal to the product of such value, income or Indebtedness
and the percentage ownership held by the REIT or the Borrower, directly or
indirectly, in the entity that owns such asset, generates such income or
that is the obligor on such Indebtedness, as the case may be.

"Qualified Management Entity": on any date of determination, a
Management Entity (a) in which the Borrower or its Wholly Owned
Subsidiaries owns at least a 95% of the Capital Stock thereof, (b) which is
a Subsidiary Guarantor, and (c) which is controlled, directly or
indirectly, by (i) Peter K. Kompaniez, (ii) Terry S. Considine, (iii) any
Person controlled by Peter K. Kompaniez and Terry S. Considine, (iv) any
other Person reasonably satisfactory to the Required Lenders, or (v) any
combination of the foregoing clauses (i)-(iv).

"Qualified Property": a Property, which is (a) Class B or a Class A
Property, (b) a multifamily apartment project which is 100% owned in fee
simple title, directly or indirectly, by the Borrower or any of its Wholly
Owned Subsidiaries, (c) not subject to any Lien other than Liens permitted
under Sections 6.3(a)-(e), and (d) with respect to Property owned by a
Wholly Owned Subsidiary of the Borrower, such Person owning such Property
(i) has not incurred any Indebtedness and (ii) is a Subsidiary Guarantor.

"Qualified Wholly Owned Subsidiary": any Wholly Owned Subsidiary
which, immediately prior to the transfer of Property thereto pursuant to
Schedule 1.1(a), has no assets and no liabilities, and is, or will become,
a Subsidiary Guarantor.

"Rating Agency": any of, S&P, Moody's or D&P.

"Real Estate Value": on any date, the Borrower's Pro Rata Share of (a)
with respect to any real estate asset acquired by the Borrower or any of
its Subsidiaries on any date which is less than three consecutive full
calendar months prior to such date of calculation, an amount equal to 95%
of the purchase price paid for such real estate asset, (b) with respect to
any other real estate asset owned by the Borrower or any of its
Subsidiaries, the quotient of (i) the Adjusted Net Operating Income Value
with respect to such real estate asset, divided by (ii) .096 and (c) with
respect to the Bay

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<PAGE> 37

West/Captiva Club Apartments (Property ID# 8575), until the earlier of (x)
April 1, 1999 or (y) the date the Property becomes Stabilized, an amount
equal to 95% of the Borrower's or its Wholly Owned Subsidiary's cash
investment in such Property.

"Recourse Indebtedness": all Indebtedness other than Non-Recourse
Indebtedness.

"Recovery Event": any settlement of or payment in respect of any
property or casualty insurance claim or any condemnation proceeding
relating to any Property of the REIT, the Borrower or any of its
Subsidiaries.

"Reference Lender": Bankers Trust Company.

"Refinancing Indebtedness": means Indebtedness that is incurred to
refund, refinance, replace, renew, repay or extend (including pursuant to
any defeasance or discharge mechanism) (collectively, "refinances", and
"refinanced" shall have a correlative meaning) any Indebtedness listed on
Schedule 2.7(a); provided, however, that (i) no guarantee, security or
collateral shall be issued by the REIT, the Borrower or any of their
Subsidiaries in excess of, or in addition to, any guarantee, security or
collateral originally issued with respect to such Indebtedness and (ii) any
amount of such Refinancing Indebtedness incurred in excess of an aggregate
principal amount (or if issued with original issue discount, an aggregate
issue price) then outstanding of the Indebtedness being refinanced, plus
fees, underwriting discounts, premiums, unpaid accrued interest and other
costs and expenses incurred in connection with such Refinancing
Indebtedness shall be deemed to be Net Cash Proceeds and applied to prepay
the Loans in accordance with the provisions of Section 2.7.

"Register": as defined in Section 10.6(d).

"Regulation U": Regulation U of the Board as in effect from time to
time.

"REIT Status": with respect to any Person, (a) the qualification of
such Person as a real estate investment trust under Section 856 through 860

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<PAGE> 38

of the Code, and (b) the applicability to such Person and its shareholders
of the method of taxation provided for in Sections 857 et seq. of the Code.

"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section
4241 of ERISA.

"Reportable Event": any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the thirty day notice period is
waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC
Reg. Section 4043.

"Required Lenders": at any time, the holders of more than 50% of (a)
until the Closing Date, the Commitments and (b) thereafter, the aggregate
unpaid principal amount of the Loans then outstanding.

"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its Property or to
which such Person or any of its Property is subject.

"Responsible Officer": the chief executive officer, president or chief
financial officer of the Borrower, but in any event, with respect to
financial matters, the chief financial officer of the Borrower.

"Restricted Cash": any cash pledged by the Borrower, the REIT or any
of their respective Subsidiaries to other Persons or is subject to a Lien,
including any compensatory balance, sinking fund, escrow item, required
reserve item or similar items.

"Restricted Payments": as defined in Section 6.6.

"SEC": the Securities and Exchange Commission (or successors thereto
or an analogous U.S. Governmental Authority).

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"Short Term Management Contract": any Management Contract which is not
a Category I Contract or a Category II Contract.

"Single Employer Plan": any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.

"Solvent": when used with respect to any Person, means that, as of any
date of determination, (a) the amount of the "present fair saleable value"
of the assets of such Person will, as of such date, exceed the amount of
all "liabilities of such Person, contingent or otherwise", as of such date,
as such quoted terms are determined in accordance with applicable federal
and state laws governing determinations of the insolvency of debtors, (b)
the present fair saleable value of the assets of such Person will, as of
such date, be greater than the amount that will be required to pay the
liability of such Person on its debts as such debts become absolute and
matured, (c) such Person does not have, as of such date, an unreasonably
small amount of capital with which to conduct its business, and (d) such
Person is able to pay its debts as they mature. For purposes of this
definition, (i) "debt" means liability on a "claim", and (ii) "claim" means
any (x) right to payment, whether or not such a right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured or (y) right
to an equitable remedy for breach of performance if such breach gives rise
to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured or unmatured, disputed,
undisputed, secured or unsecured.

"Stabilized": with respect to any Qualified Property and as of any
date of determination, the date on which the occupancy level of such
Qualified Property is at least 90% on average for the three consecutive
calendar months most recently ended on or prior to such date.

"Subsidiary": as to any Person, a corporation, partnership, limited
liability company or other entity which is controlled, directly or
indirectly through one or more intermediaries, or both, by such Person,
including without limitation, entities for which such Person acts as a
general partner and any Preferred Stock Subsidiary. Unless otherwise
qualified, all references

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<PAGE> 40

to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a
Subsidiary or Subsidiaries of the Borrower.

"Subsidiaries' Guarantee": the Subsidiaries' Guarantee to be executed
and delivered by each Subsidiary Guarantor, substantially in the form of
Exhibit A, as the same may be amended, supplemented or otherwise modified
from time to time.

"Subsidiary Guarantor": each Subsidiary of the Borrower other than
Non-Guarantor Subsidiaries.

"Total Indebtedness": on any date, all Indebtedness of the REIT, the
Borrower and their respective Subsidiaries, determined on a consolidated
basis, without duplication.

"Transferee": as defined in Section 10.14.

"Type": as to any Loan, its nature as a Base Rate Loan or a Eurodollar
Loan.

"Unencumbered Assets Leverage": the leverage ratio described in
Section 6.1(a).

"Unencumbered Asset Value": on any date, the sum of (a) the aggregate
of the Unencumbered Real Estate Value of all Unencumbered Real Estate
Assets owned by the Borrower or any of its Wholly Owned Subsidiaries as of
such date, (b) the Long Term Management Contract Value (provided, that the
amount of Long Term Management Contract Value included in Unencumbered
Asset Value on any date may not exceed 30% of Unencumbered Asset Value on
such date) as of such date, (c) the aggregate of the Note Receivable Value
on such date of all Eligible Note Receivables held by the Borrower on such
date (provided, that the amount of Note Receivable Value included in
Unencumbered Asset Value on any date on or after the date which is five
months after the Closing Date may not exceed $150,000,000), (d) the Cash
and Cash Equivalent Amount (excluding Restricted Cash) and (e) with respect
to the Bay West/Captiva Club Apartments (Property ID# 8575), until the
earlier of (x) April 1, 1999 or (y) the date the Property becomes
Stabilized, an amount equal to 95% of

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<PAGE> 41

the Borrower's or its Wholly Owned Subsidiary's cash investment in such
Property.

"Unencumbered Real Estate Asset": any Qualified Property (i) on the
Closing Date (a) which is Stabilized and (b) which is free of any material
structural, title or other similar defect and is in compliance with
Environmental Law and (ii) after the Closing Date, which complies with
clauses (i)(a) and (i)(b) above and with the provisions of paragraph (a) of
Schedule 1.1(a).

"Unencumbered Real Estate Value": on any date, (a) with respect to any
Unencumbered Real Estate Asset acquired by the Borrower or any of its
Wholly Owned Subsidiaries on any date which is less than three consecutive
full calendar months prior to such date, an amount equal to 95% of the
purchase price paid for such Unencumbered Real Estate Asset and (b) with
respect to any other Unencumbered Real Estate Asset, the quotient of (i)
the Adjusted Net Operating Income Value with respect to such Unencumbered
Real Estate Asset, divided by (ii) .096; and in the case of clause (a) or
(b) above, net of Estimated Remediation and Rehabilitation Costs related to
such Unencumbered Real Estate Asset.

"Unfunded Pension Liabilities": the excess of a Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of
that Plan's assets, determined in accordance with the assumptions used by
the Plan's actuaries for funding the Plan pursuant to Section 412 for the
applicable plan year.

"Wholly Owned Subsidiary": as to any Person, any other Person all of
the Capital Stock of which (other than directors' qualifying shares
required by law) is owned, directly or indirectly, by such Person or, in
the case of the Borrower and the REIT, any Person all of the Capital Stock
of which is owned, directly or indirectly, by the Borrower and the REIT.

1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the other Loan Documents or any certificate or other document made
or delivered pursuant hereto or thereto.

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<PAGE> 42
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to Holdings, the Borrower and its Subsidiaries not
defined in Section 1.1 and accounting terms partly defined in Section 1.1, to
the extent not defined, shall have the respective meanings given to them under
GAAP.

(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, Schedule and
Exhibit references are to this Agreement unless otherwise specified.

(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.

SECTION 2. AMOUNT AND TERMS OF COMMITMENTS

2.1 Commitments. Subject to the terms and conditions hereof, each
Lender severally agrees to make a term loan (a "Loan") to the Borrower on the
Closing Date in an amount not to exceed the amount of the Commitment of such
Lender. The Loans may from time to time be Eurodollar Loans or Base Rate Loans,
as determined by the Borrower and notified to the Administrative Agent in
accordance with Sections 2.2 and 2.8.

2.2 Procedure for Borrowing. The Borrower shall give the
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent prior to 10:00 A.M., New York City time, three Business
Days prior to the anticipated Closing Date) requesting that the Lenders make the
Loans on the Closing Date and specifying the amount to be borrowed. Upon receipt
of such notice the Administrative Agent shall promptly notify each Lender
thereof. Not later than 12:00 Noon, New York City time, on the Closing Date each
Lender shall make available to the Administrative Agent at the Funding Office an
amount in immediately available funds equal to the Loan or Loans to be made by
such Lender. The Administrative Agent shall make available to the Borrower the
aggregate of the amounts made available to the Administrative Agent by the
Lenders in immediately available funds.

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<PAGE> 43

2.3 Maturity Date. The Loans shall mature and be payable in full on
the Maturity Date.

2.4 Repayment of Loans; Evidence of Debt. (a) The Borrower hereby
unconditionally promises to pay to the Administrative Agent, for the account of
the appropriate Lender, the principal amount of the Loan of such Lender on the
Maturity Date (or on such earlier date on which the Loans become due and payable
pursuant to Section 7). The Borrower hereby further agrees to pay interest on
the unpaid principal amount of the Loans from time to time outstanding from the
date hereof until payment in full thereof at the rates per annum, and on the
dates, set forth in Section 2.10.

(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing indebtedness of the Borrower to such Lender
resulting from each Loan of such Lender from time to time, including the amounts
of principal and interest payable and paid to such Lender from time to time
under this Agreement.

(c) The Administrative Agent, on behalf of the Borrower, shall
maintain the Register pursuant to Section 10.6(e), and a subaccount therein for
each Lender, in which shall be recorded (i) the amount of each Loan made
hereunder and any Note evidencing such Loan, the Type thereof and each Interest
Period applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder
and (iii) both the amount of any sum received by the Administrative Agent
hereunder from the Borrower and each Lender's share thereof.

(d) The entries made in the Register and the accounts of each Lender
maintained pursuant to Section 2.4(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loans made to
the Borrower by such Lender in accordance with the terms of this Agreement.

(e) The Borrower agrees that, upon the request to the Administrative
Agent by any Lender, the Borrower will execute and deliver to such Lender a

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promissory note of the Borrower evidencing any Loan of such Lender,
substantially in the form of Exhibit F, with appropriate insertions as to date
and principal amount (each, a "Note").

2.5 Fees, etc. (a) The Borrower agrees to pay to the Syndication Agent
the fees in the amounts and on the dates previously agreed to in writing by the
Borrower and the Syndication Agent.

(b) The Borrower agrees to pay to the Administrative Agent the fees in
the amounts and on the dates from time to time agreed to in writing by the
Borrower and the Administrative Agent.

2.6 Optional Prepayments. The Borrower may at any time and from time
to time prepay the Loans, in whole or in part, without premium or penalty, upon
irrevocable notice delivered to the Administrative Agent at least three Business
Days prior thereto in the case of Eurodollar Loans and at least one Business Day
prior thereto in the case of Base Rate Loans, which notice shall specify the
date and amount of prepayment and whether the prepayment is of Eurodollar Loans
or Base Rate Loans; provided, that if a Eurodollar Loan is prepaid on any day
other than the last day of the Interest Period applicable thereto, the Borrower
shall also pay any amounts owing pursuant to Section 2.16. Upon receipt of any
such notice the Administrative Agent shall promptly notify each relevant Lender
thereof. If any such notice is given, the amount specified in such notice shall
be due and payable on the date specified therein, together with accrued interest
to such date on the amount prepaid. Partial prepayments of Loans shall be in an
aggregate principal amount of $1,000,000 or a whole multiple thereof. Amounts
prepaid may not be reborrowed.

2.7 Mandatory Prepayments . (a) If any Capital Stock shall be issued,
or Indebtedness incurred, by the REIT, the Borrower or any of their respective
Subsidiaries (excluding any Indebtedness constituting a Refinancing
Indebtedness, but in any event, including the proceeds of a proposed offering of
senior unsecured notes by the REIT and/or the Borrower), an amount equal to 100%
of the Net Cash Proceeds thereof shall be applied on the date of such issuance
or incurrence toward the prepayment of the Loans.

(b) If on any date the REIT, the Borrower or any of their respective
Subsidiaries shall receive Net Cash Proceeds from any Asset Sale or Recovery

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Event then such Net Cash Proceeds shall be applied on such date toward the
prepayment of the Loans.

(c) The application of any prepayment pursuant to this Section shall
be made, first, to Base Rate Loans and, second, to Eurodollar Loans. Each
prepayment of the Loans under this Section shall be accompanied by accrued
interest to the date of such prepayment on the amount prepaid. Amounts prepaid
may not be reborrowed.

2.8 Conversion and Continuation Options. (a) The Borrower may elect
from time to time to convert Eurodollar Loans to Base Rate Loans by giving the
Administrative Agent at least two Business Days' prior irrevocable notice of
such election, provided that any such conversion of Eurodollar Loans may only be
made on the last day of an Interest Period with respect thereto. The Borrower
may elect from time to time to convert Base Rate Loans to Eurodollar Loans by
giving the Administrative Agent at least three Business Days' prior irrevocable
notice of such election, provided that no Base Rate Loan may be converted into a
Eurodollar Loan (i) when any Event of Default has occurred and is continuing and
the Administrative Agent or the Required Lenders have determined in its or their
sole discretion not to permit such conversions or (ii) after the date that is
one month prior to the Maturity Date. Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof.

(b) Any Eurodollar Loan may be continued as such upon the expiration
of the then current Interest Period with respect thereto by the Borrower giving
irrevocable notice to the Administrative Agent not less than three Business Days
prior to the expiration of such then current Interest Period, provided that no
Eurodollar Loan may be continued as such (i) when any Event of Default has
occurred and is continuing and the Administrative Agent has or the Required
Lenders have determined in its or their sole discretion not to permit such
continuations or (ii) after the date that is one month prior to the Maturity
Date, and provided, further, that if the Borrower shall fail to give any
required notice as described above in this paragraph or if such continuation is
not permitted pursuant to the preceding proviso such Loans shall be
automatically converted to Base Rate Loans on the last day of such then expiring
Interest Period. Upon receipt of any such notice the Administrative Agent shall
promptly notify each relevant Lender thereof.

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2.9 [Intentionally Omitted].

2.10 Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall
bear interest for each day during each Interest Period with respect thereto at a
rate per annum equal to the Eurodollar Rate determined for such day plus the
Applicable Margin.

(b) Each Base Rate Loan shall bear interest at a rate per annum equal
to the Base Rate plus the Applicable Margin.

(c) (i) If all or a portion of the principal amount of any Loan shall
not be paid when due (whether at the stated maturity, by acceleration or
otherwise), all outstanding Loans (whether or not overdue) shall bear interest
at a rate per annum which is equal to the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions of this Section plus 3%
and (ii) if all or a portion of any interest payable on any Loan or any other
amount payable hereunder shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), such overdue amount shall bear interest
at a rate per annum equal to the rate then applicable to Base Rate Loans plus
3%, in each case, with respect to clauses (i) and (ii) above, from the date of
such non-payment until such amount is paid in full (as well after as before
judgment).

(d) Interest shall be payable in arrears on each Interest Payment
Date, provided that interest accruing pursuant to paragraph (c) of this Section
shall be payable from time to time on demand.

2.11 Computation of Interest. (a) Interest payable pursuant hereto
shall be calculated on the basis of a 360-day year for the actual days elapsed,
except that, with respect to Base Rate Loans the rate of interest on which is
calculated on the basis of the Prime Rate, the interest thereon shall be
calculated on the basis of a 365- (or 366-, as the case may be) day year for the
actual days elapsed. The Administrative Agent shall as soon as practicable
notify the Borrower and the relevant Lenders of each determination of a
Eurodollar Rate. Any change in the interest rate on a Loan resulting from a
change in the Base Rate or the Eurocurrency Reserve Requirements shall become
effective as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall as soon as practicable notify the
Borrower and the relevant Lenders of the effective date and the amount of each
such change in interest rate.

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(b) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing any quotations used by the Administrative Agent in
determining any interest rate pursuant to Section 2.10(a).

2.12 Inability to Determine Interest Rate. If prior to the first day
of any Interest Period:

(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that, by
reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for such
Interest Period, or

(b) the Administrative Agent shall have received notice from the
Required Lenders that the Eurodollar Rate determined or to be determined
for such Interest Period will not adequately and fairly reflect the cost to
such Lenders (as conclusively certified by such Lenders) of making or
maintaining their affected Loans during such Interest Period,

the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar Loans requested to be made on the first day
of such Interest Period shall be made as Base Rate Loans, (y) any Loans that
were to have been converted on the first day of such Interest Period to
Eurodollar Loans shall be continued as Base Rate Loans and (z) any outstanding
Eurodollar Loans shall be converted, on the last day of the then current
Interest Period with respect thereto, to Base Rate Loans. Until such notice has
been withdrawn by the Administrative Agent, no further Eurodollar Loans shall be
made or continued as such, nor shall the Borrower have the right to convert
Loans to Eurodollar Loans.

2.13 Pro Rata Treatment and Payments. (a) Each borrowing by the
Borrower from the Lenders hereunder, each payment by the Borrower on account of
any commitment fee and any reduction of the Commitments of the Lenders shall be
made pro rata according to the respective Commitment Percentages of the Lenders.
Each payment (including prepayments) in respect of principal

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or interest in the Loans shall be applied to the amounts of such obligations
owing to the Lenders pro rata according to the respective amounts then due and
owing to the Lenders.

(b) All payments (including prepayments) to be made by the Borrower
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made without setoff or counterclaim and shall be made prior to 12:00 Noon,
New York City time, on the due date thereof to the Administrative Agent, for the
account of the Lenders, at the Payment Office, in Dollars and in immediately
available funds. The Administrative Agent shall distribute such payments to the
Lenders promptly upon receipt in like funds as received. If any payment
hereunder (other than payments on the Eurodollar Loans) becomes due and payable
on a day other than a Business Day, such payment shall be extended to the next
succeeding Business Day. If any payment on a Eurodollar Loan becomes due and
payable on a day other than a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day unless the result of such extension
would be to extend such payment into another calendar month, in which event such
payment shall be made on the immediately preceding Business Day. In the case of
any extension of any payment of principal pursuant to the preceding two
sentences, interest thereon shall be payable at the then applicable rate during
such extension.

(c) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to the Administrative
Agent by the required time on the Borrowing Date therefor, such Lender shall pay
to the Administrative Agent, on demand, such amount with interest thereon at a
rate equal to the daily average Federal Funds Effective Rate for the period
until such Lender makes such amount immediately available to the Administrative
Agent. A certificate of the Administrative Agent submitted to any Lender with
respect to any amounts owing under this paragraph shall be conclusive in the
absence of manifest error. If such Lender's share of such borrowing is not made
available to the Administrative Agent by such Lender within three Business Days
of such Borrowing Date, the Administrative Agent shall also be entitled to
recover

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such amount with interest thereon at the rate per annum applicable to
Base Rate Loans under the relevant Facility, on demand, from the Borrower.

(d) Unless the Administrative Agent shall have been notified in
writing by the Borrower prior to the date of any payment being made hereunder
that the Borrower will not make such payment to the Administrative Agent, the
Administrative Agent may assume that the Borrower is making such payment, and
the Administrative Agent may, but shall not be required to, in reliance upon
such assumption, make available to the Lenders their respective pro rata shares
of a corresponding amount. If such payment is not made to the Administrative
Agent by the Borrower within three Business Days of such required date, the
Administrative Agent shall be entitled to recover, on demand, from each Lender
to which any amount which was made available pursuant to the preceding sentence,
such amount with interest thereon at the rate per annum equal to the daily
average Federal Funds Effective Rate. Nothing herein shall be deemed to limit
the rights of the Administrative Agent or any Lender against the Borrower.

2.14 Requirements of Law. (a) If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof or compliance
by any Lender with any request or directive (whether or not having the force of
law) from any Governmental Authority made subsequent to the date hereof:

(i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement or any Eurodollar Loan made by it, or
change the basis of taxation of payments to such Lender in respect thereof
(except for Non-Excluded Taxes covered by Section 2.15 and changes in the
rate of tax on the overall net income of such Lender);

(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Lender which is not otherwise included in the determination
of the Eurodollar Rate hereunder; or

(iii) shall impose on such Lender any other condition;

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and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans, or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, the Borrower shall
promptly pay such Lender, upon its demand, any additional amounts necessary to
compensate such Lender for such increased cost or reduced amount receivable. If
any Lender becomes entitled to claim any additional amounts pursuant to this
Section, it shall promptly notify the Borrower (with a copy to the
Administrative Agent) of the event by reason of which it has become so entitled.

(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder to a level below that which such Lender
or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy) by an amount deemed by such Lender to
be material, then from time to time, after submission by such Lender to the
Borrower (with a copy to the Administrative Agent) of a written request
therefor, the Borrower shall pay to such Lender such additional amount or
amounts as will compensate such Lender for such reduction.

(c) A certificate as to any additional amounts payable pursuant to
this Section submitted by any Lender to the Borrower (with a copy to the
Administrative Agent) shall be conclusive in the absence of manifest error. The
obligations of the Borrower pursuant to this Section shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.

2.15 Taxes. (a) All payments made by the Borrower or the REIT under
this Agreement shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding net income taxes and franchise taxes imposed
on any Agent or any Lender as a result of a present or former connection between
such Agent or

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such Lender and the jurisdiction of the Governmental Authority imposing such tax
or any political subdivision or taxing authority thereof or therein (other than
any such connection arising solely from such Agent or such Lender having
executed, delivered or performed its obligations or received a payment under, or
enforced, this Agreement or any other Loan Document). If any such non-excluded
taxes, levies, imposts, duties, charges, fees, deductions or withholdings
("Non-Excluded Taxes") or Other Taxes are required to be withheld from any
amounts payable to any Agent or any Lender hereunder, the amounts so payable to
such Agent or such Lender shall be increased to the extent necessary to yield to
such Agent or such Lender (after payment of all Non-Excluded Taxes and Other
Taxes) interest or any such other amounts payable hereunder at the rates or in
the amounts specified in this Agreement, provided, however, that the Borrower or
the REIT, as the case may be, shall not be required to increase any such amounts
payable to any Lender with respect to any Non-Excluded Taxes (i) that are
attributable to such Lender's failure to comply with the requirements of
paragraph (d) or (e) of this Section or (ii) that are United States withholding
taxes imposed on amounts payable to such Lender at the time the Lender becomes a
party to this Agreement, except to the extent that such Lender's assignor (if
any) was entitled, at the time of assignment, to receive additional amounts from
the Borrower or the REIT, as the case may be, with respect to such Non-Excluded
Taxes pursuant to Section 2.15(a).

(b) The Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.

(c) Whenever any Non-Excluded Taxes or Other Taxes are payable by the
Borrower or the REIT, as the case may be, as promptly as possible thereafter the
Borrower shall send to the Administrative Agent for the account of the relevant
Agent or Lender, as the case may be, a certified copy of an original official
receipt received by the Borrower or the REIT, as the case may be showing payment
thereof to the extent available. If the Borrower fails to pay any Non-Excluded
Taxes or Other Taxes when due to the appropriate taxing authority or fails to
remit to the Agents the required receipts or other required documentary
evidence, the Borrower or the REIT, as the case may be, shall indemnify the
Administrative Agent and the Lenders for any incremental taxes, interest or
penalties that may become payable by any Agent or any Lender as a result of any
such failure. The agreements in this Section 2.15 shall survive the termination
of this Agreement and the payment of the Loans and all other amounts payable
hereunder.

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(d) Each Lender (or Transferee) that is not a citizen or resident of
the United States of America, a corporation, partnership or other entity created
or organized in or under the laws of the United States of America (or any
jurisdiction thereof), or any estate or trust that is subject to federal income
taxation regardless of the source of its income (a "Non-U.S. Lender") shall
deliver to the Borrower and the Administrative Agent (or, in the case of a
Participant, to the Lender from which the related participation shall have been
purchased) two copies of either U.S. Internal Revenue Service Form 1001 or Form
4224, or, in the case of a Non-U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of "portfolio interest" a statement substantially in the form of
Exhibit G and a Form W-8, or any subsequent versions thereof or successors
thereto properly completed and duly executed by such Non-U.S. Lender claiming
complete exemption from, or a reduced rate of, U.S. federal withholding tax on
all payments by the Borrower under this Agreement and the other Loan Documents.
Such forms shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement (or, in the case of any Participant, on or
before the date such Participant purchases the related participation). In
addition, each Non-U.S. Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Non-U.S.
Lender. Each Non-U.S. Lender shall promptly notify the Borrower at any time it
determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower (or any other form of certification
adopted by the U.S. taxing authorities for such purpose). Notwithstanding any
other provision of this paragraph, a Non-U.S. Lender shall not be required to
deliver any form pursuant to this paragraph that such Non-U.S. Lender is not
legally able to deliver.

(e) A Lender that is entitled to an exemption from or reduction of
non-U.S. withholding tax under the law of the jurisdiction in which the Borrower
is located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate, provided that such Lender is
legally entitled to complete, execute and deliver such documentation and in such
Lender's reasonable judgment such completion, execution or submission would not
materially prejudice the legal position of such Lender.

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2.16 Indemnity. The Borrower agrees to indemnify each Lender and to
hold each Lender harmless from any loss or expense which such Lender may sustain
or incur as a consequence of (a) default by the Borrower in making a borrowing
of, conversion into or continuation of Eurodollar Loans after the Borrower has
given a notice requesting the same in accordance with the provisions of this
Agreement, (b) default by the Borrower in making any prepayment after the
Borrower has given a notice thereof in accordance with the provisions of this
Agreement or (c) the making of a prepayment or conversion of Eurodollar Loans on
a day which is not the last day of an Interest Period with respect thereto. Such
indemnification may include an amount equal to the excess, if any, of (i) the
amount of interest which would have accrued on the amount so prepaid, or not so
borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
such Interest Period (or, in the case of a failure to borrow, convert or
continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Loans provided
for herein (excluding, however, the Applicable Margin included therein, if any)
over (ii) the amount of interest (as reasonably determined by such Lender) which
would have accrued to such Lender on such amount by placing such amount on
deposit for a comparable period with leading banks in the interbank eurodollar
market. A certificate as to any amounts payable pursuant to this Section
submitted to the Borrower by any Lender shall be conclusive in the absence of
manifest error. This covenant shall survive the termination of this Agreement
and the payment of the Loans and all other amounts payable hereunder.

2.17 Illegality. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such
Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert Base Rate Loans to Eurodollar Loans shall forthwith be cancelled and (b)
such Lender's Loans then outstanding as Eurodollar Loans, if any, shall be
converted automatically to Base Rate Loans on the respective last days of the
then current Interest Periods with respect to such Loans or within such earlier
period as required by law. If any such conversion of a Eurodollar Loan occurs on
a day which is not the last day of the then current Interest Period with respect
thereto, the Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to Section 2.16.

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2.18 Change of Lending Office. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 2.14, 2.15(a) or
2.17 with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Loans affected by such event with the
object of avoiding the consequences of such event; provided, that such
designation is made on terms that, in the sole judgment of such Lender, cause
such Lender and its lending office(s) to suffer no economic, legal or regulatory
disadvantage, and provided, further, that nothing in this Section shall affect
or postpone any of the obligations of the Borrower or the rights of any Lender
pursuant to Section 2.14, 2.15(a) or 2.17.

2.19 Replacement of Lender. The Borrower shall be permitted to replace
(with one or more replacement Lenders) any Lender which (i) requests
reimbursement for amounts owing pursuant to Section 2.14 or 2.15, (ii) has
received a written notice from the Borrower of an impending change in law that
would entitle such Lender to payment of additional amounts under Section 2.14 or
2.15, unless such Lender designates a different lending office before such
change in law becomes effective and such alternate lending office obviates the
need for the Borrower to make payments of additional amounts under Section 2.14
or 2.15, (iii) is affected in the manner described in Section 2.12 or 2.17 and
as a result thereof any of the actions described in Section 2.12 or 2.17, as the
case may be, are required to be taken, (iv) does not consent to any proposed
amendment, supplement, modification, consent or waiver of any provisions of this
Agreement or any other Loan Document as contemplated by Section 10.1, or (v)
defaults in its obligation to make Loans; provided that (A) such replacement
does not conflict with any Requirement of Law, (B) no Event of Default shall
have occurred and be continuing at the time of such replacement, (C) the
Borrower shall repay (or the replacement bank or institution shall purchase, at
par) all Loans and other amounts owing to such replaced Lender prior to the date
of replacement, (D) the Borrower shall be liable to such replaced Lender under
Section 2.16 if any Eurodollar Loan owing to such replaced Lender shall be
prepaid (or purchased) other than on the last day of the Interest Period
relating thereto, (E) the replacement bank or institution, if not already a
Lender, shall be reasonably satisfactory to the Administrative Agent, (F) the
replaced Lender shall be obligated to make such replacement in accordance with
the provisions of this Section 2.19 (provided that the Borrower or replacement
Lender shall be obligated to pay the registration and processing fee), (G) until
such time as such replacement shall be consummated, the Borrower

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shall pay all additional amounts (if any) required pursuant to Section 2.14 or
2.15, as the case may be, (H) any such replacement shall not be deemed to be a
waiver of any rights which the Borrower, the Administrative Agent or any other
Lender shall have against the replaced Lender, and (I) any replacement
contemplated by clause (iv) above shall be permitted only if the consent of
Lenders holding at least 90% of the aggregate unpaid principal amount of the
Loans then outstanding plus the aggregate amount of undrawn Commitments then in
effect is obtained, but the consent of one or more of the other Lenders is not
obtained (other than the withholding of any required consent pursuant to clauses
(i) or (ii) of the first proviso of Section 10.1), and each replacement Lender
consents to the proposed amendment, supplement, modification, consent or waiver.

SECTION 3. REPRESENTATIONS AND WARRANTIES

To induce the Agents and the Lenders to enter into this Agreement and
to make the Loans, the REIT and the Borrower hereby jointly and severally
represent and warrant to each Agent and each Lender that:

3.1 Financial Condition. (a) The unaudited pro forma consolidated
balance sheet of the REIT and its consolidated Subsidiaries as at June 30, 1998
(including the notes thereto) (the "Pro Forma Balance Sheet"), copies of which
have heretofore been furnished to each Lender, has been prepared giving effect
(as if such events had occurred on such date) to (i) the consummation of the
Merger, (ii) the Loans to be made on the Closing Date and the use of proceeds
thereof and (iii) the payment of fees and expenses in connection with the
foregoing. The Pro Forma Balance Sheet has been prepared based on the best
information available to the REIT as of the date of delivery thereof, and
presents fairly on a pro forma basis the estimated financial position of REIT
and its consolidated Subsidiaries as at June 30, 1998, assuming that the events
specified in the preceding sentence had actually occurred at such date.

(b) The audited consolidated balance sheets of the REIT as at December
31, 1996 and December 31, 1997, and the related consolidated statements of
income, stockholders' equity and cash flows for the fiscal years ended on such
dates, reported on by and accompanied by an unqualified report from Ernst &
Young, LLP, present fairly the consolidated financial condition of the REIT as
at such date, and the consolidated results of its operations and its
consolidated cash

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flows for the respective fiscal years then ended. The unaudited consolidated
balance sheet of the REIT as at June 30, 1998, and the related unaudited
consolidated statements of income, stockholders' equity and cash flows for the
six-month period ended on such date, present fairly the consolidated financial
condition of the REIT as at such date, and the consolidated results of its
operations and its consolidated cash flows for the six-month period then ended
(subject to normal year-end audit adjustments). All such financial statements,
including the related schedules and notes thereto, have been prepared in
accordance with GAAP applied consistently throughout the periods involved
(except as approved by the aforementioned firm of accountants and disclosed
therein). The REIT, the Borrower and their respective Subsidiaries do not have
any material Guarantee Obligations, contingent liabilities and liabilities for
taxes, or any long-term leases or unusual forward or long-term commitments,
including, without limitation, any interest rate or foreign currency swap or
exchange transaction or other obligation in respect of derivatives, which are
not reflected in the most recent financial statements referred to in this
paragraph. During the period from December 31, 1997 to and including the date
hereof there has been no Disposition by the REIT of any material part of its
business or Property.

3.2 No Change. Since December 31, 1997 there has been no development
or event which has had or could reasonably be expected to have a Material
Adverse Effect.

3.3 Corporate Existence; Compliance with Law. Each of the REIT, the
Borrower and their respective Subsidiaries (a) is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, (b) has the corporate (or partnership, as the case may be) power
and authority, and the legal right, to own and operate its Property, to lease
the Property it operates as lessee and to conduct the business in which it is
currently engaged, (c) is duly qualified as a foreign entity and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of Property or the conduct of its business requires such qualification
and (d) is in compliance with all Requirements of Law except to the extent that
the failure to comply therewith could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.

3.4 Corporate Power; Authorization; Enforceable Obligations. Each Loan
Party has the corporate (or partnership, as the case may be) power and
authority, and the legal right, to make, deliver and perform the Loan Documents
to

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which it is a party and, in the case of the Borrower, to borrow hereunder. Each
Loan Party has taken all necessary corporate action to authorize the execution,
delivery and performance of the Loan Documents to which it is a party and, in
the case of the Borrower, to authorize the borrowings on the terms and
conditions of this Agreement. No consent or authorization of, filing with,
notice to or other act by or in respect of, any Governmental Authority or any
other Person is required in connection with the Merger and the borrowings
hereunder or with the execution, delivery, performance, validity or
enforceability of this Agreement or any of the Loan Documents, except consents,
authorizations, filings and notices described in Schedule 3.4, which consents,
authorizations, filings and notices have been obtained or made and are in full
force and effect. Each Loan Document has been duly executed and delivered on
behalf of each Loan Party which is a party thereto. This Agreement constitutes,
and each other Loan Document upon execution will constitute, a legal, valid and
binding obligation of each Loan Party which is a party thereto, enforceable
against each such Loan Party in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).

3.5 No Legal Bar. The execution, delivery and performance of this
Agreement and the other Loan Documents, the borrowings hereunder and the use of
the proceeds thereof will not violate any Requirement of Law or any Contractual
Obligation of the REIT, the Borrower or any of its Subsidiaries and will not
result in, or require, the creation or imposition of any Lien on any of their
respective properties or revenues pursuant to any Requirement of Law or any such
Contractual Obligation.

3.6 No Material Litigation. No litigation, investigation or proceeding
of or before any arbitrator or Governmental Authority is pending or, to the best
knowledge of the REIT or the Borrower, threatened by or against the REIT, the
Borrower or any of its Subsidiaries or against any of their respective
properties or revenues (a) with respect to any of the Loan Documents or any of
the transactions contemplated hereby or thereby, or (b) which could reasonably
be expected to have a Material Adverse Effect.

3.7 No Default. Neither the REIT, the Borrower nor any of their
respective Subsidiaries is in default under or with respect to any of its
Contractual

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Obligations in any respect which could reasonably be expected to have a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.

3.8 Ownership of Property; Liens. Each of the REIT, the Borrower and
their respective Subsidiaries has title in fee simple to, or a valid leasehold
interest in, all its real property, and good title to, or a valid leasehold
interest in, all its other Property, and none of such Property is subject to any
Lien except as permitted by Section 6.3.

3.9 Intellectual Property. The ownership or license to use
Intellectual Property is not necessary for the conduct of business as currently
conducted of the REIT, the Borrower and their respective Subsidiaries.

3.10 Taxes. Each of the REIT, the Borrower and each of their
respective Subsidiaries has filed or caused to be filed all Federal, state and
other material tax returns which are required to be filed and has paid all taxes
shown to be due and payable on said returns or on any assessments made against
it or any of its Property and all other taxes, fees or other charges imposed on
it or any of its Property by any Governmental Authority (other than any the
amount or validity of which are currently being contested in good faith by
appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided on the books of the REIT, the Borrower or their
respective Subsidiaries, as the case may be); no tax Lien has been filed (except
for Liens for taxes not yet due and payable permitted under Section 6.3(a)),
and, to the knowledge of the REIT and the Borrower, no claim is being asserted,
with respect to any such tax, fee or other charge.

3.11 Federal Regulations. No part of the proceeds of any Loans will be
used for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation U as now and from time to
time hereafter in effect or for any purpose which violates the provisions of the
Regulations of the Board. If requested by any Lender or the Administrative
Agent, the Borrower will furnish to the Administrative Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of FR Form
G-3 or FR Form U-1 referred to in Regulation U, as the case may be.

3.12 Labor Matters. There are no strikes or other labor disputes
against the REIT, the Borrower or any of their Subsidiaries pending or, to the

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knowledge of the REIT or the Borrower, threatened that (individually or in the
aggregate) could reasonably be expected to have a Material Adverse Effect. Hours
worked by and payment made to employees of the REIT, the Borrower and their
respective Subsidiaries have not been in violation of the Fair Labor Standards
Act or any other applicable Requirement of Law dealing with such matters that
(individually or in the aggregate) could reasonably be expected to have a
Material Adverse Effect. All payments due from the REIT, the Borrower or any of
its Subsidiaries on account of employee health and welfare insurance that
(individually or in the aggregate) could reasonably be expected to have a
Material Adverse Effect if not paid have been paid or accrued as a liability on
the books of the REIT, the Borrower or the relevant Subsidiary.

3.13 ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan and no facts or
circumstances exist which could reasonably be expected to result in any such
Reportable Event or accumulated funding deficiency, and each Plan has complied
in all material respects with its terms and the applicable provisions of ERISA
and the Code. No notice of intent to terminate has been filed, trustee has been
appointed, termination proceedings have been instituted or termination has
occurred with respect to any Single Employer Plan or Multiemployer Plan, and no
Lien in favor of the PBGC or a Plan has arisen, during such five-year period and
no facts or circumstances exist which could reasonably be expected to result in
any such filing, appointments, termination or institution. The present value of
all accrued benefits under each Single Employer Plan (based on those assumptions
used to fund such Plans) did not, as of the last annual valuation date prior to
the date on which this representation is made or deemed made, exceed the value
of the assets of such Plan allocable to such accrued benefits by a material
amount. Neither the Borrower nor any Commonly Controlled Entity has had a
complete or partial withdrawal from any Multiemployer Plan which has resulted or
could reasonably be expected to result in a material liability under ERISA, and
neither the Borrower nor any Commonly Controlled Entity would become subject to
any material liability under ERISA if the Borrower or any such Commonly
Controlled Entity were to withdraw completely from all Multiemployer Plans as of
the valuation date most closely preceding the date on which this representation
is made or deemed made. No such Multiemployer Plan is in Reorganization or
Insolvent, and no facts

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or circumstances exist, to the knowledge of the Borrower, that could reasonably
be expected to result in such Reorganization or Insolvency.

3.14 Investment Company Act; Other Regulations. No Loan Party is an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. No Loan
Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) which limits its ability to incur Indebtedness.

3.15 Subsidiaries. (a) The Subsidiaries listed on Schedule 3.15(a)
includes all the Subsidiaries of the REIT and the Borrower at the date hereof.

(b) There are no outstanding subscriptions, options, warrants, calls,
rights or other agreements or commitments (other than stock options granted to
employees or directors and directors' qualifying shares) of any nature relating
to any Capital Stock of the REIT, the Borrower or any Subsidiary, except as
disclosed on Schedule 3.15(b).

3.16 Use of Proceeds. The proceeds of the Loans shall be used (i) to
finance the Merger and to pay related fees and expenses, (ii) to refinance
existing Indebtedness of the REIT, the Borrower and/or Insignia and (iii) for
general working capital purposes of the Borrower and its Subsidiaries.

3.17 Environmental Matters. Other than exceptions to any of the
following that could not, individually or in the aggregate, reasonably be
expected to result in the payment of a Material Environmental Amount or have a
Material Adverse Effect:

(a) The REIT, the Borrower and their respective Subsidiaries: (i) are,
and within the period of all applicable statutes of limitation have been,
in compliance with all applicable Environmental Laws; (ii) hold all
Environmental Permits (each of which is in full force and effect) required
for any of their current or intended operations or for any property owned,
leased, or otherwise operated by any of them; (iii) are, and within the
period of all applicable statutes of limitation have been, in compliance
with all of their Environmental Permits; and (iv) reasonably believe that:
each of their Environmental Permits will be timely renewed and complied

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with, without material expense; any additional Environmental Permits that
may be required of any of them will be timely obtained and complied with,
without material expense; and compliance with any Environmental Law that is
or is expected to become applicable to any of them will be timely attained
and maintained, without material expense.

(b) Hazardous Materials are not present at, on, under, in, or about
any real property now or formerly owned, leased or operated by the Borrower
or any of its Subsidiaries, or at any other location (including, without
limitation, any location to which Hazardous Materials have been sent for
re-use or recycling or for treatment, storage, or disposal) which could
reasonably be expected to (i) give rise to liability of the REIT, the
Borrower or any of their respective Subsidiaries under any applicable
Environmental Law or otherwise result in costs to the REIT, the Borrower or
any of their respective Subsidiaries, or (ii) interfere with the Borrower's
or any of their respective Subsidiaries' continued operations, or (iii)
impair the fair saleable value of any real property owned or leased by the
REIT, the Borrower or any of their respective Subsidiaries.

(c) There is no judicial, administrative, or arbitral proceeding
(including any notice of violation or alleged violation) under or relating
to any Environmental Law to which the REIT, the Borrower or any of their
respective Subsidiaries is, or to the knowledge of the Borrower will be,
named as a party that is pending or, to the knowledge of the Borrower
threatened.

(d) Neither the REIT, the Borrower nor any of their respective
Subsidiaries has received any written request for information, or been
notified that it is a potentially responsible party under or relating to
the federal Comprehensive Environmental Response, Compensation, and
Liability Act or any similar Environmental Law, or with respect to any
Hazardous Materials.

(e) Neither the REIT, the Borrower nor any of their Subsidiaries has
entered into or agreed to any consent decree, order, or settlement or other
agreement, or is subject to any judgment, decree, or order or other
agreement, in any judicial, administrative, arbitral, or other forum for

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dispute resolution, relating to compliance with or liability under any
Environmental Law.

(f) Neither the REIT, the Borrower nor any of their respective
Subsidiaries has assumed or retained, by contract or operation of law, any
liabilities of any kind, fixed or contingent, known or unknown, under any
Environmental Law or with respect to any Hazardous Material.

3.18 Accuracy of Information, etc. No statement or information, taken
as a whole, contained in the Merger Agreement, this Agreement, any other Loan
Document or any other document, certificate or statement furnished to the
Administrative Agent or the Lenders or any of them, by or on behalf of any Loan
Party for use in connection with the transactions contemplated by this Agreement
or the other Loan Documents, contained as of the date such statement,
information, document or certificate was so furnished, any untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements contained herein or therein, light of the circumstances under which
they were made, not misleading. The projections and pro forma financial
information contained in the materials referenced above are based upon good
faith estimates and assumptions believed by management of the Borrower to be
reasonable at the time made, it being recognized by the Lenders that such
financial information as it relates to future events is not to be viewed as fact
and that actual results during the period or periods covered by such financial
information may differ from the projected results set forth therein by a
material amount. The Borrower has delivered to the Agents a true and complete
copy of the Merger Agreement (including all schedules and exhibits thereto). As
of the date hereof, the representations and warranties contained in the Merger
Agreement are true and correct in all material respects. There is no fact known
to any Loan Party that could reasonably be expected to have a Material Adverse
Effect that has not been expressly disclosed herein, in the other Loan Documents
or in any other documents, certificates and statements furnished to the
Administrative Agent and the Lenders for use in connection with the transactions
contemplated hereby and by the other Loan Documents.

3.19 Solvency. Each Loan Party is, and after giving effect to the
Merger and the incurrence of all Indebtedness and obligations being incurred in
connection herewith and therewith will be and will continue to be, Solvent.

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3.20 Year 2000 Matters. Any reprogramming required to permit the
proper functioning, in and following the year 2000, of (i) the REIT's, the
Borrower's and their Subsidiaries' computer systems and (ii) equipment
containing embedded microchips (including systems and equipment supplied by
others or with which the REIT's, the Borrower's or their respective
Subsidiaries' systems interface) and the testing of all such systems and
equipment, as so reprogrammed, will be completed by January 1, 1999. The cost to
the REIT, the Borrower and their respective Subsidiaries of such reprogramming
and testing and of the reasonably foreseeable consequences of year 2000 to the
REIT, the Borrower and their respective Subsidiaries (including, without
limitation, reprogramming errors and the failure of others' systems or
equipment) will not result in a Default or a Material Adverse Effect.

3.21 Not Foreign Persons. Neither the Borrower nor any Wholly Owned
Subsidiary which owns an Unencumbered Real Estate Asset is a "foreign person"
within the meaning of Section 1445(f)(3) of the Code.

3.22 Defects. Except as disclosed to and approved in writing by the
Required Lenders, to the knowledge of the Borrower, there exist no material
defects that would make any Unencumbered Real Asset unsuitable for the present
or contemplated use thereof. Except as disclosed to and approved in writing by
the Required Lenders, to the knowledge of the Borrower, there are no abnormal
hazards, including but not limited to earth movement or slippage, affecting any
Unencumbered Real Estate Asset.

3.23 Utilities. Each Unencumbered Real Estate Asset has adequate
water, gas, telephone, electrical supply, storm and sanitary sewerage facilities
and means of access to and from public streets or highways.

3.24 Subsidiary Guarantors. All of the Subsidiaries of the REIT and
the Borrower, noted on Schedule 3.24 are Subsidiary Guarantors.

3.25 Leases. Except for apartment leases and as otherwise permitted
under Section 6.18, there are no leases affecting any Property which is an
Unencumbered Real Estate Asset. No rent has been collected more than one month
in advance under any such apartment lease for a Property which is an
Unencumbered Real Estate Asset other than in the ordinary course of business. No
such lease or any interest therein is subject to any present assignment or
pledge.

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All rent due to date under each such lease has been collected in the ordinary
course of business and no concession has been granted to any lessee in the form
of a waiver, release, reduction, discount or other alteration of rent due or to
become due, other than in the ordinary course of business. The interest of the
lessee under each such lease is as lessee only, with no options to purchase or
rights of first refusal.

3.26 Management Contracts. All fees payable to the Borrower or any
Management Entity under the Management Contracts are payable directly to the
person party thereto and the portion of the fees to which the Borrower or such
Management Entity are entitled will not be subject to any pass-through
arrangement, fee-splitting arrangement or any other arrangement with any third
party which would require such Person to remit any portion of such fees to a
third party under any circumstances. The Borrower and its Management Entities
have delivered to the Agent a true and complete copy of each Management Contract
with respect to which a copy has been requested by such Agent.

3.27 Eligible Note Receivables. All amounts payable to the Borrower or
any of its Wholly Owned Subsidiaries under the Eligible Note Receivables are
payable directly to the person party thereto and the portion of the amounts to
which the Borrower or such Wholly Owned Subsidiary are entitled will not be
subject to any pass-through arrangement, fee-splitting arrangement or any other
arrangement with any third party which would require such Person to remit any
portion of such fees to a third party under any circumstances. The Borrower and
its Wholly Owned Subsidiaries have delivered to the Agent a true and complete
copy of each Eligible Note Receivable with respect to which a copy has been
requested by such Agent.

3.28 Non-Guarantor Subsidiaries. (a) Each Non-Guarantor Subsidiary is
Wholly Owned, directly or indirectly, by the REIT, the Borrower or a Subsidiary
Guarantor, except to the extent any interest in such Non-Guarantor Subsidiary is
held by a third-party investor.

(b) None of the Non-Guarantor Subsidiaries owns an Unencumbered Real
Estate Asset or other Property included in the calculation of Unencumbered Real
Estate Value.

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3.29 FNMA Guaranty. (a) The aggregate amount available to be drawn
under the Letter of Credit (as defined in the FNMA Payment Guaranty) is
$7,500,000.

(b) None of the events listed in Section 2.2(b) of the FNMA Payment
Guaranty have occurred.

(c) The Pledgee under the FNMA Master Cash Management Agreement has
not exercised its right to lock the Master Lockbox pursuant to Section 13 of the
FNMA Master Cash Management Agreement.

(d) The Borrower has notified the beneficiary of the FNMA Guaranty of
the transactions contemplated by this Agreement, and such beneficiary has agreed
to execute promptly a waiver of any default or event of default arising out of,
or in connection with, this Agreement.

SECTION 4. CONDITIONS PRECEDENT

4.1 Conditions Precedent to the Loans. The agreement of each Lender to
make the Loan requested to be made by it is subject to the satisfaction, prior
to or concurrently with the making of such Loan on the Closing Date, of the
following conditions precedent:

(a) Loan Documents. The Administrative Agent shall have received (i)
this Agreement, executed and delivered by a duly authorized officer of the
REIT and the Borrower, (ii) the Subsidiaries Guarantee executed and
delivered by a duly authorized officer of each Subsidiary Guarantor, and
(iii) for the account of each relevant Lender, a Note conforming to the
requirements hereof and executed and delivered by a duly authorized officer
of the Borrower.

(b) Merger. The Merger shall have been consummated in accordance with
the Merger Agreement concurrently with the making of the Loans hereunder.

(c) Pro Forma Balance Sheet; Financial Statements. The Lenders shall
have received (i) the Pro Forma Balance Sheet, (ii) audited consolidated
financial statements of the REIT for the 1996 and 1997 fiscal years

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and (iii) unaudited interim consolidated financial statements of the REIT
for each fiscal month and quarterly period ended subsequent to the date of
the latest applicable financial statements delivered pursuant to clause
(ii) of this paragraph as to which such financial statements are available,
and such financial statements shall not, in the reasonable judgment of the
Lenders, reflect any material adverse change in the consolidated financial
condition of the REIT.

(d) Approvals. All governmental and third party approvals necessary in
connection with the Merger, the continuing operations of the REIT, the
Borrower and their respective Subsidiaries and the transactions
contemplated hereby shall have been obtained and be in full force and
effect, except where the failure to obtain such approvals will not have a
Material Adverse Effect, and all applicable waiting periods shall have
expired without any action being taken or threatened by any competent
authority which would restrain, prevent or otherwise impose adverse
conditions on the Merger or the financing contemplated hereby.

(e) Related Agreements. The Administrative Agent shall have received
(in a form reasonably satisfactory to the Syndication Agent), with a copy
for each Lender, true and correct copies, certified as to authenticity by
the Borrower, of each debt instrument (other than Non-Recourse
Indebtedness, unless otherwise reasonably requested by the Administrative
Agent) of the Borrower or the REIT or their respective Subsidiaries to be
in effect after the Merger and such other documents or instruments as may
be reasonably requested by the Syndication Agent.

(f) Waivers under Existing Credit Facilities. The Administrative Agent
shall have received copies of all waivers and consents under existing
Indebtedness of the REIT, the Borrower or any of their respective
Subsidiaries required to permit the Merger, the Loans and the other
transactions contemplated hereby, except to the extent such waivers and
consents with respect to any Non-Recourse Indebtedness are not material,
unless reasonably requested by the Administrative Agent.

(g) Repayment of Existing Indebtedness. The Administrative Agent shall
have received evidence satisfactory to it that, prior to or concurrently
with the making of the Loans, the credit facility evidenced by the Amended

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and Restated Credit Agreement, dated as of March 19, 1997, among First
Union National Bank of South Carolina, the lenders thereto, Insignia
Financial Group Inc. and Lehman Commercial Paper Inc. is being repaid in
full and all commitments to extend further credit thereunder have been
terminated.

(h) Fees. The Lenders, Syndication Agent and the Administrative Agent
shall have received all fees required to be paid, and all expenses for
which invoices have been presented (including reasonable fees,
disbursements and other charges of counsel to the Agents), on or before the
Closing Date. All such amounts will be paid with proceeds of Loans made on
the Closing Date and will be reflected in the funding instructions given by
the Borrower to the Administrative Agent on or before the Closing Date.

(i) Closing Certificate. The Administrative Agent shall have received
(i) a certificate of the REIT and the Borrower dated the Closing Date,
substantially in the form of Exhibit C, with appropriate insertions and
attachments and (ii) a Compliance Certificate of the Borrower and the REIT,
substantially in the form of Exhibit B.

(j) Legal Opinions. The Administrative Agent shall have received the
following executed legal opinions:

(i) the legal opinion of Skadden, Arps, Slate, Meagher & Flom LLP,
counsel to the REIT, the Borrower and their respective Subsidiaries,
substantially in the form of Exhibit E-1;

(ii) the legal opinion of Joel Bonder, general counsel of the
REIT, the Borrower and their respective Subsidiaries, substantially in
the form of Exhibit E-2;

(iii) to the extent consented to by the relevant counsel, each
legal opinion, if any, delivered in connection with the Merger
Agreement, accompanied by a reliance letter in favor of the Lenders.

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Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative
Agent may reasonably require.

(k) Intercreditor Agreement. The Administrative Agent shall have
received a fully executed copy of the Intercreditor Agreement relating
to the BofA Facility, in form and substance satisfactory to the
Administrative Agent.

(l) BofA Facility. The Administrative Agent shall have received
fully executed copies of the BofA Facility Documents.

(m) Representations and Warranties. Each of the representations
and warranties made by any Loan Party in or pursuant to the Loan
Documents shall be true and correct in all material respects on and as
of the Closing Date, as if made on and as of such date.

(n) No Default. No Default or Event of Default shall have
occurred and be continuing on the Closing Date, before and after
giving effect to the Loans.

SECTION 5. AFFIRMATIVE COVENANTS

The REIT and the Borrower hereby jointly and severally agree that, so
long as the Commitments remain in effect or any Loan or other amount is owing to
any Lender or any Agent hereunder, each of the REIT and the Borrower shall, and
shall cause each of its Subsidiaries to:

5.1 Financial Statements. Furnish to each Agent and each Lender:

(a) as soon as available, but in any event within 90 days after the
end of each fiscal year of the REIT, a copy of the audited consolidated
balance sheet of the REIT and its consolidated Subsidiaries as at the end
of such year and the related audited consolidated statements of income,
stockholders' equity and cash flows for such year, setting forth in each
case in comparative form the figures for the previous year, reported on
without a "going concern" or like qualification or exception, or
qualification arising

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out of the scope of the audit, by Ernst & Young LLP or other independent
certified public accountants of nationally recognized standing;

(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal
year of the REIT, the unaudited consolidated balance sheet of the REIT and
its consolidated Subsidiaries as at the end of such quarter and the related
unaudited consolidated statements of income, stockholders' equity and cash
flows for such quarter and the portion of the fiscal year through the end
of such quarter, setting forth in each case in comparative form the figures
for the previous year, certified by a Responsible Officer as being fairly
stated in all material respects (subject to normal year-end audit
adjustments);

(c) if requested by the Administrative Agent, as soon as available,
but in any event not later than 45 days after the end of each month
occurring during each fiscal year of the REIT (other than the third, sixth,
ninth and twelfth such month), the unaudited consolidated balance sheets of
the REIT and its Subsidiaries as at the end of such month and the related
unaudited consolidated statements of income, stockholders' equity and cash
flows for such month and the portion of the fiscal year through the end of
such month, setting forth in each case in comparative form the figures for
the previous year, certified by a Responsible Officer as being fairly
stated in all material respects (subject to normal year-end audit
adjustments); and

(d) as soon as available, but not later than 45 days after the end of
each calendar quarter, a quarterly operating statement for each Property
which is an Unencumbered Real Estate Asset and for each Management Entity
(in a format and with such detail as the Administrative Agent may
reasonably request).

all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).

5.2 Certificates; Other Information. Furnish to each Agent and each
Lender, or, in the case of clause (i), to the relevant Lender:

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(a) concurrently with the delivery of the financial statements
referred to in Section 5.1(a), a certificate of the independent certified
public accountants reporting on such financial statements stating that in
making the examination necessary therefor no knowledge was obtained of any
Default or Event of Default, except as specified in such certificate,
including a review of the Compliance Certificates delivered in connection
with the quarter and year ended December 31, 1998;

(b) concurrently with the delivery of any financial statements
pursuant to Section 5.1, (i) a certificate of a Responsible Officer stating
that, to the best of each such Responsible Officer's knowledge, each Loan
Party during such period has observed or performed all of its covenants and
other agreements, and satisfied every condition, contained in this
Agreement and the other Loan Documents to which it is a party to be
observed, performed or satisfied by it, and that such Responsible Officer
has obtained no knowledge of any Default or Event of Default except as
specified in such certificate and (ii) in the case of quarterly or annual
financial statements (and, upon the request of the Administrative Agent, in
the case of monthly financial statements), a Compliance Certificate
containing all information and calculations necessary for determining
compliance by the REIT, the Borrower and their respective Subsidiaries with
the provisions of this Agreement referred to therein as of the last day of
the fiscal quarter or fiscal year of the REIT, as the case may be.

(c) as soon as available, and in any event no later than 45 days after
the end of each fiscal year of the REIT, a detailed consolidated budget for
the current and next succeeding two fiscal years (including a projected
consolidated balance sheet of the REIT and its Subsidiaries as of the end
of the following fiscal year, and the related consolidated statements of
projected cash flow, projected changes in financial position and projected
income), and, as soon as available, significant revisions, if any, of such
budget and projections with respect to such fiscal year (collectively, the
"Projections"), which Projections shall in each case be accompanied by a
certificate of a Responsible Officer stating that such Projections are
based on reasonable estimates, information and assumptions and that such
Responsible Officer has no reason to believe that such Projections are
incorrect or misleading in any material respect;

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(d) within 45 days after the end of each fiscal quarter of the REIT, a
narrative discussion and analysis of the financial condition and results of
operations of the REIT and its Subsidiaries for such fiscal quarter and for
the period from the beginning of the then current fiscal year to the end of
such fiscal quarter, as compared to the comparable periods of the previous
year;

(e) within five days after the same are sent, copies of all financial
statements and reports which the REIT sends to the holders of any class of
its debt securities or public equity securities and, within five days after
the same are filed, copies of all financial statements and reports which
the REIT may make to, or file with, the SEC;

(f) as soon as possible and in any event within five Business Days of
obtaining knowledge thereof: (i) any development, event, or condition that,
individually or in the aggregate with other developments, events or
conditions, could reasonably be expected to result in the payment by the
REIT, the Borrower and their Subsidiaries, in the aggregate, of a Material
Environmental Amount; and (ii) any notice that any governmental authority
may deny any application for an Environmental Permit sought by, or revoke
or refuse to renew any Environmental Permit held by, the REIT, the Borrower
or any of their respective Subsidiaries;

(g) upon the request of the Administrative Agent, an updated Schedule
3.14 showing the REIT, the Borrower, all of their respective Subsidiaries
and their respective interests in the Subsidiaries;

(h) (i) any and all material enforcement, cleanup, removal or other
governmental or regulatory actions instituted, completed or threatened
against the Borrower, the REIT or any of their Subsidiaries or any of their
Properties pursuant to any Environmental Laws, (ii) all other material
Environmental Claims, and (iii) any environmental or similar condition on
any real property adjoining or in the vicinity of the Properties of the
Borrower, the REIT or any of their Subsidiaries that could reasonably be
anticipated to cause such Properties (or any portion thereof) to be subject
to any material restrictions on ownership, occupancy, transferability or
use under any Environmental Laws; provided, however, that with respect to
any Property, only to the extent any of the foregoing could reasonably be

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expected to result in the payment of a Material Environmental Amount or
have a Material Adverse Effect; and

(i) promptly, such additional financial and other information as any
Lender may from time to time reasonably request.

5.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
material obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of the REIT, the Borrower or their respective Subsidiaries, as the
case may be.

5.4 Conduct of Business and Maintenance of Existence, etc. (a) (i)
Preserve, renew and keep in full force and effect its corporate existence and
(ii) take all reasonable action to maintain all rights, privileges and
franchises necessary or desirable in the normal conduct of its business, except,
in each case, as otherwise permitted by Section 6.4 and except, in the case of
clause (ii) above, to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect; and (b) comply with all Contractual
Obligations and Requirements of Law except to the extent that failure to comply
therewith could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.

5.5 Maintenance of Property; Insurance. (a) Keep all Property and
systems useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted and (b) (i) maintain with financially
sound and reputable insurance companies insurance on all its Property in at
least such amounts and against at least such risks (but including in any event
casualty insurance for the full replacement cost, public liability and one-year
business interruption) as are usually insured against in the same general area
by companies engaged in the same or a similar business and (ii) upon the request
of the Administrative Agent, will furnish to the Administrative Agent evidence
of such insurance.

5.6 Inspection of Property; Books and Records; Discussions. (a) Keep
proper books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities and (b) permit
representatives

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of the Administrative Agent or any Lender to visit and inspect any of its
properties and examine and make abstracts from any of its books and records at
reasonable times during normal business hours and as often as may reasonably be
desired and to discuss the business, operations, properties and financial and
other condition of the REIT, the Borrower and their respective Subsidiaries with
officers and employees of the REIT, the Borrower and its Subsidiaries and with
their respective independent certified public accountants.

5.7 Notices. Promptly give notice to the Administrative Agent and each
Lender of:

(a) the occurrence of any Default or Event of Default;

(b) any (i) default or event of default under any Contractual
Obligation of the REIT, the Borrower or any of their Subsidiaries or (ii)
litigation, investigation or proceeding which may exist at any time between
the REIT, the Borrower or any of their Subsidiaries and any Governmental
Authority, which in either case, if not cured or if adversely determined,
as the case may be, could reasonably be expected to have a Material Adverse
Effect;

(c) any litigation or proceeding affecting the REIT, the Borrower or
any of their respective Subsidiaries in which the amount involved is
$1,000,000 or more and not covered by insurance or in which injunctive or
similar relief is sought;

(d) the following events, as soon as possible and in any event within
30 days after the Borrower or the REIT knows or has reason to know thereof:
(i) the occurrence of any Reportable Event with respect to any Plan, a
failure to make any required contribution to a Plan, the creation of any
Lien in favor of the PBGC or a Plan or any withdrawal from, or the
termination, Reorganization or Insolvency of, any Multiemployer Plan or
(ii) the institution of proceedings or the taking of any other action by
the PBGC or the Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the termination,
Reorganization or Insolvency of, any Plan; and

(e) any development or event which has had or could reasonably be
expected to have a Material Adverse Effect.

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Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the REIT, the Borrower or the relevant Subsidiary
proposes to take with respect thereto.

5.8 Environmental Laws. (a) Comply in all material respects with, and
ensure compliance in all material respects by all tenants and subtenants, if
any, with, all applicable Environmental Laws, and obtain and comply in all
material respects with and maintain, and ensure that all tenants and subtenants
obtain and comply in all material respects with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws.

(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws.

5.9 Ownership of the Borrower. In the case of the REIT, continue to
own, directly or indirectly, at least 75% of the equity interests in the
Borrower, and continue to cause one of the REIT's Wholly Owned Subsidiaries to
be sole general partner of the Borrower.

5.10 Solvency. The Borrower shall at all times be, and shall cause the
REIT and each of their respective Subsidiaries to be, Solvent.

5.11 Additional Guarantor Subsidiaries. Any Subsidiaries which (i)
owns Unencumbered Real Estate Assets or other assets included in the
determination of Unencumbered Real Estate Value, (ii) is a Management Entity or
(iii) owns an Eligible Note Receivable, shall at all times be a Subsidiary
Guarantor.

5.12 Covenants Relating to Unencumbered Real Estate Assets.

(a) Maintenance. The Borrower shall maintain each Unencumbered Real
Estate Asset in good order and condition in accordance with the Borrower's past
practices.

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(b) Material Agreements. The Borrower shall obtain the prior written
approval of the Administrative Agent and the Required Lenders prior to entering
into any reciprocal easement or similar agreement, ground lease or any other
material agreement affecting any Unencumbered Real Estate Asset.

(c) Management Contracts. The Borrower shall obtain, and shall cause
its Affiliates to obtain, the prior written approval of the Administrative Agent
and the Required Lenders prior to entering into any property management
agreement with a Person other than the Borrower or one of the Qualified
Management Entities, or replacing the property manager for any Unencumbered Real
Estate Asset with a Person other than the Borrower or one of the Qualified
Management Entities. The Borrower shall cause all property management contracts
affecting any Unencumbered Real Estate Asset to permit termination of the
manager (whether such manager is one of the Management Entities or otherwise) by
the owner within thirty days' written notice, without penalty, and the Borrower
shall not permit the management fee payable under any such property management
agreement to exceed 4% of gross receipts from such property per fiscal year.

(d) Construction. The Borrower shall obtain the prior written approval
of the Administrative Agent and the Required Lenders prior to entering into any
major construction or renovation affecting an Unencumbered Real Estate Asset and
shall discharge all mechanic's liens resulting from any such construction or
renovation.

5.13 Liens on Unencumbered Real Estate Assets. The Borrower shall keep
each Unencumbered Real Estate Asset at all times free and clear of all Liens
(unless such Liens are bonded and thereby released of record in a manner
satisfactory to the Administrative Agent), except for Liens expressly permitted
by Sections 6.3(a) - (e) or other matters approved by the Administrative Agent
and the Required Lenders.

5.14 Payment of Taxes. Each of the REIT, the Borrower and their
respective Subsidiaries will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, all material taxes, assessments and
governmental charges levied or imposed upon the REIT, the Borrower or any
Subsidiary or upon the income, profits or property of the REIT, the Borrower or
any Subsidiary; provided, however, that the REIT, the Borrower or any
Subsidiary, as the case may be, shall not be required to pay or discharge or
cause to be

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paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings and for which appropriate reserves, if necessary (in the good faith
judgment of management of such Person) are being maintained in accordance with
GAAP.

5.15 Year 2000 Matters. Cause any reprogramming required to permit the
proper functioning, in and following the year 2000, of (i) the REIT's, the
Borrower's and their Subsidiaries' computer systems and (ii) equipment
containing embedded microchips (including systems and equipment supplied by
others or with which the REIT's, the Borrower's or their respective
Subsidiaries' systems interface) and the testing of all such systems and
equipment, as so reprogrammed, to be completed by January 1, 1999.

5.16 Management Contracts. Cause all fees payable to the Borrower or
any Management Entity under the Management Contracts to be payable directly to
the person party thereto and the portion of the fees to which the Borrower or
such Management Entity are entitled will not be subject to any pass-through
arrangement, fee-splitting arrangement or any other arrangement with any third
party which would require such Person to remit any portion of such fees to a
third party under any circumstances. The Borrower and any Management Entity will
deliver to the Agent a true and complete copy of each Management Contract with
respect to which a copy has been requested by such Agent.

5.17 Eligible Notes Receivable. Cause all amounts payable to the
Borrower or any of its Wholly Owned Subsidiaries under the Eligible Note
Receivables to be payable directly to the person party thereto and the portion
of the amounts to which the Borrower or such Wholly Owned Subsidiary are
entitled will not be subject to any pass-through arrangement, fee-splitting
arrangement or any other arrangement with any third party which would require
such Person to remit any portion of such fees to a third party under any
circumstances. The Borrower and its Wholly Owned Subsidiaries will deliver to
the Agent a true and complete copy of each Eligible Note Receivable with respect
to which a copy has been requested by such Agent.

5.18 Post-Closing Requirements. (a) Within 30 days of the Closing
Date, provide to the Administrative Agent, on behalf of the Lenders, with:

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(i) a revised Schedule 2.7(a) listing Indebtedness of the REIT, the
Borrower and the Subsidiaries outstanding on the Closing Date, listing with
respect to each item of Indebtedness, to the reasonable satisfaction of the
Administrative Agent: (A) the borrower, (B) the outstanding principal
amount, (C) the maturity date, (D) the interest rate, (E) the location or
name of collateral, if any, (F) the scheduled amortization and (G) whether
such Indebtedness is Recourse or Non-Recourse;

(ii) a revised Schedule 3.15(a) setting forth as of the Closing Date,
to the reasonable satisfaction of the Administrative Agent, (i) the name
and jurisdiction of incorporation of each Subsidiary and, (ii) as to each
such Subsidiary, (A) the percentage of each class of Capital Stock thereof
owned by any Loan Party and (B) any real property assets, Management
Contracts and notes receivable owned by such Subsidiary; and

(iii) supporting schedules to the Compliance Certificates of the REIT
and the Borrower, demonstrating compliance as of the Closing Date, to the
reasonable satisfaction of the Administrative Agent, with the covenants set
forth in Sections 6.1 and 6.2, after giving effect to the Merger, the Loans
and the transactions contemplated hereby.

(b) Within 60 days of the Closing Date, (i) either (x) provide the
Administrative Agent, on behalf of the Lenders, with the Subsidiaries Guarantee
executed by each Wholly Owned Subsidiary of the REIT and the Borrower or (y)
demonstrate to the reasonable satisfaction of the Administrative Agent the legal
or contractual reasons any Wholly Owned Subsidiary of the REIT or the Borrower
which did not execute the Subsidiaries Guarantee was unable to do so; and

(ii) a revised Schedule 3.24 setting forth each Subsidiary Guarantor.

SECTION 6. NEGATIVE COVENANTS

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6.1 Financial Condition Covenants.

(a) Unencumbered Asset Leverage. Permit the aggregate amount (without
duplication) of unsecured Indebtedness of the Borrower and its Subsidiaries and
the REIT and its Subsidiaries, determined on a consolidated basis, to exceed on
any date an amount equal to 62.5% of the Unencumbered Asset Value on such date.

(b) Debt Service Coverage Ratio. Permit the Debt Service Coverage
Ratio to exceed 2.00 at the end of any calendar month.

(c) Total Senior Leverage. Permit the ratio of (a) the REIT's and the
Borrower's Pro Rata Share (without duplication) of Indebtedness of the REIT, the
Borrower and their respective Subsidiaries to (b) Gross Asset Value, to exceed
.55 to 1.0 at any time.

(d) Total Consolidated Leverage. Permit the ratio of (a) the REIT's
and the Borrower's Pro Rata Share of Indebtedness of the REIT, the Borrower and
their respective Subsidiaries plus the aggregate liquidation preference of all
outstanding preferred stock issued by the Borrower or the REIT to (b) Gross
Asset Value, to exceed .65 to 1.0 at any time.

(e) Interest Coverage Ratio. Permit the ratio of (a) Consolidated
Adjusted EBITDA for any period of twelve consecutive calendar months to (b) the
sum of Interest Expense on Total Indebtedness for such period plus the amount of
preferred stock dividends payable by the Borrower and the REIT for such period,
to be less than 2.0 to 1.0.

(f) Fixed Charge Coverage Ratio Permit the ratio of (a) Consolidated
Adjusted EBITDA for any period of twelve consecutive calendar months to (b) the
sum (without duplication) of consolidated Interest Expense and scheduled
principal amortization (including, without limitation, sinking fund payments) on
Total Indebtedness for such period plus the amount of dividends accrued (whether
or not declared or payable) on the REIT's or the Borrower's preferred stock for
such period and any cumulative unpaid dividends on such preferred stock for such
period (but excluding preferred stock dividends payable to Management Entities),
to be less than 1.75 to 1.0.

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(g) Consolidated Tangible Net Worth. Permit Consolidated Tangible Net
Worth to be at any time less than the sum of (i) $1,750,000,000 plus (ii) 75% of
the amount of net equity proceeds received by the Borrower and the REIT (without
duplication) after the Closing Date.

6.2 Additional Recourse Indebtedness. Create, incur, assume or suffer
to exist any Recourse Indebtedness of the Borrower, the REIT or any of their
respective Subsidiaries provided, that (a) from the Closing Date to January 31,
1999, up to $241,400,000 of Recourse Indebtedness other than the Loans shall be
permitted to be outstanding and (b) from and after January 31, 1999, up to
$191,400,000 of Recourse Indebtedness other than the Loans shall be permitted to
be outstanding and provided, further, that the amounts referred to in clauses
(a) and (b) above shall be permanently reduced by the amount of any repayments
or reductions of Recourse Indebtedness included therein.

6.3 Limitation on Liens. Create, incur, assume or suffer to exist any
Lien upon any of its Property, whether now owned or hereafter acquired, except
for:

(a) Liens for taxes not yet due or which are being contested in good
faith by appropriate proceedings, provided that adequate reserves with
respect thereto are maintained on the books of the Borrower or its
Subsidiaries, as the case may be, in conformity with GAAP;

(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business which are
not overdue for a period of more than 30 days or which are being contested
in good faith by appropriate proceedings;

(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;

(d) deposits to secure the performance of bids, trade contracts (other
than for borrowed money), leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred in
the ordinary course of business;

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(e) subject to Section 6.16, easements, rights-of-way, restrictions
and other similar encumbrances incurred in the ordinary course of business
which, in the aggregate, are not substantial in amount and which do not in
any case materially detract from the value of the Property subject thereto
or materially interfere with the ordinary conduct of the business of the
Borrower or any of its Subsidiaries;

(f) Liens in existence on the date hereof listed on Schedule 6.3(f),
securing Indebtedness outstanding on the date hereof, provided that no such
Lien is spread to cover any additional Property after the Closing Date and
that the amount of Indebtedness secured thereby is not increased and
extensions, renewals and replacements thereof that do not increase the
outstanding principal amount thereof; and

(g) Liens securing Indebtedness of the REIT, the Borrower or any other
Subsidiary to finance the acquisition of Property, provided that (i) such
Liens shall be created substantially simultaneously with the acquisition of
such Property, (ii) such Liens do not at any time encumber any Property
other than the Property financed by such Indebtedness; and (iii) the amount
of Indebtedness secured thereby is not increased;

(h) Any Lien existing on any Person that becomes a Subsidiary, or
existing on any property or asset of such Person, after the date hereof
prior to the time such Person becomes a Subsidiary; provided that (i) such
Lien is not created in contemplation of or in connection with such Person
becoming a Subsidiary, (ii) such Lien shall not apply to any other property
or assets of the REIT, the Borrower or any Subsidiary and (iii) such Lien
shall secure only those obligations which it secures on the date such
Person becomes a Subsidiary, and refinancings, renewals and replacements
thereof; and

(i) Liens securing new Indebtedness on unencumbered Real Estate
Assets; provided that the proceeds of such Indebtedness are applied to
prepay the Loans in accordance with Section 2.7; and provided, further,
that after the incurrence of such Liens, the Property subject to such Liens
will not be an Unencumbered Real Estate Asset.

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6.4 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or Dispose of all or substantially all
of its Property or business, except that:

(a) the Merger may be consummated;

(b) any Subsidiary of the Borrower may be merged or consolidated with
or into the Borrower (provided that the Borrower shall be the continuing or
surviving corporation) or with or into any Subsidiary Guarantor (provided
that the Subsidiary Guarantor shall be the continuing or surviving
corporation);

(c) any Subsidiary of the Borrower may Dispose of any or all of its
assets (upon voluntary liquidation or otherwise) to the Borrower or any
Subsidiary Guarantor; and

(d) the REIT or the Borrower may merge or consolidate with another
person provided that no Default or Event of Default has occurred and is
continuing and that each of the following conditions are satisfied;

(i) the REIT or the Borrower will be the surviving Person (the
"Surviving Entity") after the consummation of the contemplated
transaction;

(ii) the Surviving Entity will have the same or greater net worth
than the net worth of the REIT or the Borrower, as the case may be,
immediately prior to such merger or consolidation;

(iii) the Surviving Entity assumes or affirms in writing the
obligations of the REIT or the Borrower, as the case may be, under
this Agreement; and

(iv) the contemplated transaction will not have a Material
Adverse Effect.

6.5 Limitation on Disposition of Property. Dispose of any of its
Property (including, without limitation, receivables and leasehold interests),

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whether now owned or hereafter acquired, or, in the case of any Subsidiary,
issue or sell any shares of such Subsidiary's Capital Stock to any Person,
except:

(a) the Disposition of obsolete or worn out property in the ordinary
course of business;

(b) the sale of inventory in the ordinary course of business;

(d) the sale or issuance of any Subsidiary's Capital Stock to the
REIT, the Borrower or any Subsidiary;

(e) Asset Sales listed on Schedule 6.5; and

(f) any Asset Sale or Recovery Event, provided, that the requirements
of Section 2.7(b) are complied with in connection therewith.

6.6 Limitation on Restricted Payments. Declare or pay any dividend
(other than dividends payable solely in common stock of the Person making such
dividend) on, or make any payment on account of, or set apart assets for a
sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any Capital Stock of the REIT, the Borrower
or any of their respective Subsidiary, whether now or hereafter outstanding, or
make any other distribution in respect thereof, either directly or indirectly,
whether in cash or property or in obligations of the REIT, the Borrower or any
of their respective Subsidiary (collectively, "Restricted Payments"), except
that:

(a) any Subsidiary of the Borrower or the REIT may make Restricted
Payments to (i) the Borrower or the REIT or any Subsidiary Guarantor and
(ii) any third-party investor holding an interest in such Subsidiary, in
the ordinary course of business pursuant to the related partnership
agreement;

(b) so long as no Default or Event of Default shall have occurred and
be continuing, the REIT may make (i) Restricted Payments in any fiscal year
in an aggregate amount not exceeding 80% of Funds From Operations for such
fiscal year or such amounts as may be necessary to

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maintain REIT Status and (ii) the $50,000,000 special dividend amount to be
paid pursuant to terms of Exhibit 6E of the Merger Agreement; and

(c) so long as no Default or Event of Default shall have occurred and
be continuing, the Borrower may pay distributions to holders of its Capital
Stock in any fiscal year in an aggregate amount not exceeding 80% of Funds
From Operations for such fiscal year or such amounts as may be necessary to
maintain REIT Status.

6.7 Limitation on Capital Expenditures. Make or commit to make any
Capital Expenditure, except Capital Expenditures of the Borrower and its
Subsidiaries in the ordinary course of business not exceeding $300 per Class A
Property or Class B Property apartment unit and $400 per Class C Property
apartment unit per annum plus the unspent amount of Estimated Remediation and
Rehabilitation Costs listed on Schedule 6.7.

6.8 Limitation on Investments. Make any advance, loan, extension of
credit (by way of guarantee or otherwise) or capital contribution to, or
purchase any Capital Stock, bonds, notes, debentures or other debt securities
of, or any assets constituting an ongoing business from, or make any other
investment in, any other Person (all of the foregoing, "Investments"), except:

(a) extensions of trade credit in the ordinary course of business;

(b) investments in Cash Equivalents;

(c) loans and advances to employees of the REIT, the Borrower or any
of their respective Subsidiaries in the ordinary course of business
(including, without limitation, for travel, entertainment and relocation
expenses) in an aggregate amount for the REIT, the Borrower and their
respective Subsidiaries not to exceed $5,000,000 after the Closing Date at
any one time outstanding. For avoidance of doubt, any such loans or
advances outstanding on the Closing Date shall not be included in the
preceding sentence and to the extent such outstanding loans or advances are
repaid, any re-advances of such loans or advances shall be included in the
preceding sentence;

(d) the Merger;

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(e) Investments in Capital Expenditures permitted in Section 6.7;

(f) Investments by the REIT, the Borrower or any of its Subsidiaries
in the Borrower or any Person that, prior to such investment, is a
Subsidiary Guarantor;

(g) Investments in multi-family apartment projects in fee simple or
leasehold interests therein or partnership, joint venture interests,
partnership tenders, or other Investments (including capital contributions
or partner loans) in Subsidiaries that own, directly or indirectly,
multi-family apartment projects;

(h) ownership interest in Management Entities, provided in each case
the same are engaged in managing multi-family apartment projects; and

(i) in addition to Investments otherwise expressly permitted by this
Section, Investments by the Borrower or any of its Subsidiaries with an
aggregate Carrying Value not to exceed 5% of the Gross Asset Value during
the term of this Agreement.

6.9 Limitation on Optional Payments and Modifications of Debt
Instruments, etc. (a) Make or offer to make any optional or voluntary payment,
prepayment, repurchase or redemption of, or otherwise voluntarily or optionally
defease, any Indebtedness (other than the Loans), preferred stock or segregate
funds for any such payment, prepayment, repurchase, redemption or defeasance or,
(b) amend, modify or otherwise change, or consent or agree to any amendment,
modification, waiver or other change to, any of the terms of any Indebtedness
(other than the Loans) or preferred stock (other than any such amendment,
modification, waiver or other change which (i) would extend the maturity or
reduce the amount of any payment of principal thereof, reduce the rate or extend
the date for payment of interest thereon or relax any covenant or other
restriction applicable to the REIT, the Borrower or any of its Subsidiaries and
(ii) does not involve the payment of a consent fee).

6.10 Limitation on Transactions with Affiliates. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of Property, the rendering of any service or the payment of any
management,

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advisory or similar fees, with any Affiliate (other than the REIT, the Borrower
or any Subsidiary Guarantor) unless such transaction is (a) otherwise permitted
under this Agreement or (b) in the ordinary course of business of the REIT, the
Borrower or such Subsidiary, as the case may be, upon fair and reasonable terms
no less favorable to the REIT, the Borrower or such Subsidiary, as the case may
be, than it would obtain in a comparable arm's length transaction with a Person
which is not an Affiliate.

6.11 Limitation on Sales and Leasebacks. Enter into any arrangement
with any Person providing for the leasing by the REIT, the Borrower or any
Subsidiary of Property which has been or is to be sold or transferred by the
REIT, the Borrower or such Subsidiary to such Person or to any other Person to
whom funds have been or are to be advanced by such Person on the security of
such Property or rental obligations of the REIT, the Borrower or such
Subsidiary.

6.12 Limitation on Negative Pledge Clauses. Enter into or suffer to
exist or become effective any agreement which prohibits or limits the ability of
the REIT, the Borrower or any of its Subsidiaries to create, incur, assume or
suffer to exist any Lien upon any of its Property or revenues, whether now owned
or hereafter acquired, to secure the Obligations or, in the case of any
guarantor, its obligations under the Subsidiary Guarantee, other than (a) this
Agreement and the other Loan Documents, (b) any agreements governing any
purchase money Liens or Capital Lease Obligations otherwise permitted hereby (in
which case, any prohibition or limitation shall only be effective against the
assets financed thereby), (c) the BofA Facility and (d) the proposed offering of
senior unsecured notes by the REIT and/or the Borrower.

6.13 Limitation on Restrictions on Subsidiary Distributions. Enter
into or suffer to exist or become effective any consensual encumbrance or
restriction on the ability of any Subsidiary to (a) make Restricted Payments in
respect of any Capital Stock of such Subsidiary held by, or pay any Indebtedness
owed to, the REIT, the Borrower or any other Subsidiary, (b) make Investments in
the Borrower or any other Subsidiary or (c) transfer any of its assets to the
Borrower or any other Subsidiary, except for such encumbrances or restrictions
existing under or by reason of (i) any restrictions existing under the Loan
Documents and (ii) any restrictions with respect to a Subsidiary imposed
pursuant to an agreement which has been entered into in connection with the
Disposition of all or substantially

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all of the Capital Stock or assets of such Subsidiary, except, until January 31,
1999, the FNMA Guaranty.

6.14 Limitation on Lines of Business. Enter into any business, either
directly or through any Subsidiary, except for those businesses in which the
Borrower and its Subsidiaries are engaged on the date of this Agreement (after
giving effect to the Merger) or which are reasonably related thereto.

6.15 Limitation on Amendments to Merger Documentation. (a) Amend,
supplement or otherwise modify (pursuant to a waiver or otherwise) the terms and
conditions of the indemnities furnished to the REIT, the Borrower or any of
their respective Subsidiaries pursuant to the Merger Documentation such that
after giving effect thereto such indemnities or licenses shall be materially
less favorable to the interests of the Loan Parties or the Lenders with respect
thereto or (b) otherwise amend, supplement or otherwise modify the terms and
conditions of the Merger Documentation except to the extent that any such
amendment, supplement or modification could not reasonably be expected to have a
Material Adverse Effect.

6.16 Limitation on New Construction. Make any expenditure to construct
any new Property, except for any construction planned or contemplated as of the
Closing Date and listed on Schedule 6.16

6.17 Limitation on Contingent Obligations. Create, incur, assume or
suffer to exist any Contingent Obligations except:

(a) endorsements for collection or deposit in the ordinary course of
business;

(b) unsecured Hedge Agreements entered into by the Borrower with
respect to variable rate Indebtedness permitted hereunder;

(c) reimbursement obligations of the Borrower or of Subsidiaries that
do not own Unencumbered Real Estate Assets under letters of credit provided
that such obligations are on such terms and in such amounts that, upon
incurring such obligations and assuming that all conditions for drawing on
such letters of credit have been complied with, the Borrower will be in
compliance with the terms of Section 6.1;

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(d) Contingent Obligations of the REIT, the Borrower and their
Subsidiaries consisting of standard "exceptions to nonrecourse" guarantees
of Non-Recourse Indebtedness or of other Indebtedness permitted under
Section 6.2; and

(e) Contingent Obligations outstanding on the date hereof and listed
on Schedule 6.17.

6.18 Limitation on Lease Obligations. (a) Create or suffer to exist
any obligations for the payment of rent for any property under a lease or
agreement to lease that is not a Capital Lease Obligation, except for:

(i) leases in existence on the Closing Date (and any renewal,
extension or refinancing thereof); or

(ii) leases entered into after the Closing Date in the ordinary course
of business and at reasonable and customary market rates and terms.

(b) Collect any rent more than one month in advance under any such
apartment lease for a Property which is an Unencumbered Real Estate Asset other
than in the ordinary course of business.

(d) Collect any rent under any lease permitted under this Section 6.18
other than in the ordinary course of business and grant any concessions to any
lessee in the form of a waiver, release, reduction, discount or other alteration
of rent due or to become due, other than in the ordinary course of business.

(e) Fail to cause the interest of the lessee under any lease permitted
under this Section 6.18 to be as lessee only, with no options to purchase or
rights of first refusal.

6.19 Special Covenants Relating to the REIT.

(a) Make any disposition of or encumber, pledge or hypothecate,
whether directly or indirectly, all or any portion of the REIT's interest in the

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Borrower or any Subsidiary which owns an Unencumbered Real Estate Asset at any
time or any rights to distributions or dividends therefrom other than to the
Borrower or a Wholly Owned Subsidiary of the REIT or the Borrower.

(b) Cease to have the common stock of the REIT listed on the NYSE
(unless it is then listed on the American Stock Exchange or the Nasdaq Stock
Exchange).

(c) Permit the REIT to fail to have REIT Status or to fail to comply
with the requirements of the Code relating to qualified REIT subsidiaries.

6.20 Taxation of the Borrower. Permit the Borrower to cease at any
time to be taxed as a partnership under the Code and not as an association
taxable as a corporation.

6.21 Changes to BofA Facility Documents. The Borrower shall not permit
any modifications, amendments or alterations to any of the BofA Facility
Documents without the prior consent of the Required Lenders.

6.22 Non-Guarantor Subsidiaries. Permit any Non-Guarantor Subsidiary
to:

(a) incur any additional Indebtedness or Contingent Obligations, other
than any Indebtedness or Contingent Obligation outstanding on the Closing
Date and refinancings, renewals and replacements thereof;

(b) enter into any line of business other than the business currently
conducted by such Non-Guarantor Subsidiary on the Closing Date; or

(c) fail to be Wholly Owned, directly or indirectly, by a Subsidiary
Guarantor, except to the extent and interest in such Non-Guarantor
Subsidiary is held by third-party investors.

6.23 FNMA Guaranty. The Borrower shall fail to be released from its
obligations under the FNMA Guaranty prior to January 31, 1999.

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SECTION 7. EVENTS OF DEFAULT

If any of the following events shall occur and be continuing:

(a) The Borrower shall fail to pay any principal of any Loan when due
in accordance with the terms hereof; or the Borrower shall fail to pay any
interest on any Loan, or any other amount payable hereunder or under any
other Loan Document, within five days after any such interest or other
amount becomes due in accordance with the terms hereof; or

(b) Any representation or warranty made or deemed made by any Loan
Party herein or in any other Loan Document or which is contained in any
certificate, document or financial or other statement furnished by it at
any time under or in connection with this Agreement or any such other Loan
Document shall prove to have been inaccurate in any material respect on or
as of the date made or deemed made; or

(c) Any Loan Party shall default in the observance or performance of
any agreement contained in Section 5.1, 5.2, 5.5(b), 5.7(a), 5.9, 5.18 or
Section 6; or

(d) Any Loan Party shall default in the observance or performance of
any other agreement contained in this Agreement or any other Loan Document
(other than as provided in paragraphs (a) through (c) of this Section), and
such default shall continue unremedied for a period of 20 days after the
earlier of (i) the date upon which a Responsible Officer had actual
knowledge thereof or received written notice of such failure or (ii) the
date upon which written notice thereof is given to the Borrower by the
Administrative Agent or any Lender; or

(e) The REIT, the Borrower or any of their respective Subsidiaries
shall (i) default in making any payment of any principal of any
Indebtedness (including, without limitation, any Guarantee Obligation, but
excluding the Loans) on the scheduled or original due date with respect
thereto; or (ii) default in making any payment of any interest on any such
Indebtedness beyond the period of grace, if any, provided in the instrument
or agreement under which such Indebtedness was created; or (iii) default in
the observance or performance of any other agreement or condition relating
to any

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such Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition
exist, the effect of which default or other event or condition is to cause,
or to permit the holder or beneficiary of such Indebtedness (or a trustee
or agent on behalf of such holder or beneficiary) to cause, with the giving
of notice if required, such Indebtedness to become due prior to its stated
maturity or (in the case of any such Indebtedness constituting a Guarantee
Obligation) to become payable; provided, that a default, event or condition
described in clause (i), (ii) or (iii) of this paragraph (e) in respect of
Non-Recourse Debt shall not at any time constitute an Event of Default
unless, at such time, one or more defaults, events or conditions of the
type described in clauses (i), (ii) and (iii) of this paragraph (e) in
respect of Non-Recourse Debt shall have occurred and be continuing with
respect to Indebtedness the outstanding principal amount of which exceeds
in the aggregate $20,000,000; or

(f) (i) The REIT, the Borrower or any of their respective Subsidiaries
with an individual or aggregate net worth (determined in accordance with
GAAP) of $10,000,000 or more (each, a "Material Subsidiary") shall commence
any case, proceeding or other action (A) under any existing or future law
of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order
for relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with
respect to it or its debts, or (B) seeking appointment of a receiver,
trustee, custodian, conservator or other similar official for it or for all
or any substantial part of its assets, or the REIT, the Borrower or any
Material Subsidiary shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against the REIT, the Borrower
or any Material Subsidiary any case, proceeding or other action of a nature
referred to in clause (i) above which (A) results in the entry of an order
for relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of 60 days; or (iii)
there shall be commenced against the REIT, the Borrower or any Material
Subsidiary any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process against all
or any substantial part of its assets which results in the entry of an
order for any such relief which shall not have been vacated,

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discharged, or stayed or bonded pending appeal within 60 days from the
entry thereof; or (iv) the REIT, the Borrower or any Material Subsidiary
shall take any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in clause (i),
(ii), or (iii) above; or (v) the REIT, the Borrower or any Material
Subsidiary shall generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they become due; or

(g) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan or
any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to terminate,
any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of
the Required Lenders, likely to result in the termination of such Plan for
purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) the Borrower or any
Commonly Controlled Entity shall, or in the reasonable opinion of the
Required Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer
Plan, (vi) the Borrower or any Commonly Controlled Entity, any of which is
a "substantial employer" (as defined in Section 4001(a)(2) or Section
4062(e) of ERISA) withdraws from a Single Employer Plan or (vii) any other
event or condition shall occur or exist with respect to a Plan; and in each
case in clauses (i) through (vii) above, such event or condition, together
with all other such events or conditions, if any, that, in the sole
judgment of the Required Lenders, could result in a potential liability,
net increase in aggregate Unfunded Pension Liabilities, or any combination
thereof, in excess of $5,000,000; or

(h) One or more judgments or decrees shall be entered against the
REIT, the Borrower or any of their respective Subsidiaries involving for
the REIT, the Borrower and their respective Subsidiaries taken as a whole a
liability (not paid or fully covered by insurance as to which the relevant

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insurance company has acknowledged coverage) of $10,000,000 or more, and
all such judgments or decrees shall not have been vacated, discharged,
stayed or bonded pending appeal within 30 days from the entry thereof; or

(i) Any non-monetary judgment, order or decree shall be rendered
against the Borrower, the REIT or any of their Subsidiaries that has or
would reasonably be expected to have a Material Adverse Effect, and there
shall be any period of 10 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or

(j) The Subsidiary Guarantee or the Guarantee contained in Section 8
shall cease, for any reason, to be in full force and effect or any Loan
Party or any Affiliate of any Loan Party shall so assert; or

(k) (i) Any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")), shall become, or obtain rights (whether by means or
warrants, options or otherwise) to become, the "beneficial owner" (as
defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or
indirectly, of more than 20% of the outstanding common stock of the REIT;
(ii) the board of directors of the REIT shall cease to consist of a
majority of Continuing Directors; or (iii) the REIT shall cease to own and
control, of record and beneficially, directly or indirectly, 75% or more of
each class of outstanding Capital Stock of the Borrower free and clear of
all Liens; or

(l) The Borrower, the REIT, or any of their Subsidiaries or any of
their respective properties shall become subject to one or more Liens for
costs or damages in excess of (i) with respect to any Property which is an
Unencumbered Real Estate Asset, $1,000,000 individually or in the aggregate
or (ii) with respect to any other Property, $5,000,000, individually or in
the aggregate, and in each case under any Environmental Law and such Liens
shall remain in place for 30 days after the creation thereof; or

(m) At any time after the incurrence of any Intra-Company Debt, the
Borrower, the REIT, or any Subsidiary Guarantor is not the holder of such
Intra-Company Debt; or if any modification or amendment with

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respect to the payment terms of any Intra-Company Debt is entered into
without the prior written consent of the Required Lenders; or

(n) At any time there shall occur any event which would permit the
holders of any class of preferred stock of the REIT to elect more than one
director to the Board of Directors of the REIT.

then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents shall immediately become due and payable,
and (B) if such event is any other Event of Default, either or both of the
following actions may be taken: (i) with the consent of the Required Lenders,
the Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Borrower declare the Commitments to
be terminated forthwith, whereupon the Commitments shall immediately terminate;
and (ii) with the consent of the Required Lenders, the Administrative Agent may,
or upon the request of the Required Lenders, the Administrative Agent shall, by
notice to the Borrower, declare the Loans hereunder (with accrued interest
thereon) and all other amounts owing under this Agreement and the other Loan
Documents to be immediately due and payable, whereupon the same shall be
immediately due and payable.

SECTION 8. GUARANTEE

8.1 Guarantee. (a) The REIT hereby unconditionally and irrevocably
guarantees to the Administrative Agent, for the ratable benefit of the Lenders
and their respective successors, indorsees, transferees and assigns, the prompt
and complete payment and performance by the Borrower when due (whether at the
stated maturity, by acceleration or otherwise) of the Obligations.

(b) The REIT further agrees to pay any and all expenses (including,
without limitation, all fees and disbursements of counsel) which may be paid or
incurred by the Administrative Agent or any Lender in enforcing, or obtaining
advice of counsel in respect of, any rights with respect to, or collecting, any
or all of the Obligations and/or enforcing any rights with respect to, or
collecting

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against, the REIT under the guarantee contained in this Section 8 (the
"Guarantee").

(c) No payment or payments made by the Borrower or any other Person or
received or collected by the Administrative Agent or any Lender from the
Borrower or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application, at any time or from time to time, in
reduction of or in payment of the Obligations shall be deemed to modify, reduce,
release or otherwise affect the liability of the REIT hereunder which shall,
notwithstanding any such payment or payments (other than payments made by the
REIT in respect of the Obligations or payments received or collected from the
REIT in respect of the Obligations), remain liable for the Obligations until the
Obligations are paid in full.

(d) The REIT agrees that whenever, at any time, or from time to time,
it shall make any payment to the Administrative Agent or any Lender on account
of its liability hereunder, it will notify the Administrative Agent and such
Lender in writing that such payment is made under this Guarantee for such
purpose.

8.2 No Subrogation. Notwithstanding any payment or payments made by
the REIT hereunder, or any set-off or application of funds of the REIT by the
Administrative Agent or any Lender, the REIT shall not be entitled to be
subrogated to any of the rights of the Administrative Agent or any Lender
against the Borrower or against any collateral security or guarantee or right of
offset held by the Administrative Agent or any Lender for the payment of the
Obligations, nor shall the REIT seek or be entitled to seek any contribution or
reimbursement from the Borrower in respect of payments made by the REIT
hereunder, until all amounts owing to the Administrative Agent and the Lenders
by the Borrower on account of the Obligations are paid in full. If any amount
shall be paid to the REIT on account of such subrogation rights at any time when
all of the Obligations shall not have been paid in full, such amount shall be
held by the REIT in trust for the Administrative Agent and the Lenders,
segregated from other funds of the REIT, and shall, forthwith upon receipt by
the REIT, be turned over to the Administrative Agent in the exact form received
by the REIT (duly indorsed by the REIT to the Administrative Agent, if
required), to be applied against the Obligations, whether matured or unmatured,
in such order as the Administrative Agent may determine.

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8.3 Amendments, etc. with respect to the Obligations; Waiver of
Rights. The REIT shall remain obligated hereunder notwithstanding that, without
any reservation of rights against the REIT, and without notice to or further
assent by the REIT, any demand for payment of any of the Obligations made by the
Administrative Agent or any Lender may be rescinded by the Administrative Agent
or such Lender, and any of the Obligations continued, and the Obligations, or
the liability of any other party upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by the Administrative
Agent or any Lender, and any Loan Document and any other documents executed and
delivered in connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Administrative Agent (or the Required
Lenders, as the case may be) may deem advisable from time to time, and any
collateral security, guarantee or right of offset at any time held by the
Administrative Agent or any Lender for the payment of the Obligations may be
sold, exchanged, waived, surrendered or released. Neither the Administrative
Agent nor any Lender shall have any obligation to protect, secure, perfect or
insure any Lien at any time held by it as security for the Obligations or for
this Guarantee or any property subject thereto. When making any demand hereunder
against the REIT, the Administrative Agent or any Lender may, but shall be under
no obligation to, make a similar demand on the Borrower or any other guarantor,
and any failure by the Administrative Agent or any Lender to make any such
demand or to collect any payments from the Borrower or any such other guarantor
or any release of the Borrower or such other guarantor shall not relieve the
REIT of its obligations or liabilities hereunder, and shall not impair or affect
the rights and remedies, express or implied, or as a matter of law, of the
Administrative Agent or any Lender against the REIT. For the purposes hereof
"demand" shall include the commencement and continuance of any legal
proceedings.

8.4 Guarantee Absolute and Unconditional. The REIT waives any and all
notice of the creation, renewal, extension or accrual of any of the Obligations
and notice of or proof of reliance by the Administrative Agent or any Lender
upon this Guarantee or acceptance of this Guarantee; the Obligations, and any of
them, shall conclusively be deemed to have been created, contracted or incurred,
or renewed, extended, amended or waived, in reliance upon this Guarantee; and
all dealings between the Borrower or the REIT, on the one hand, and the
Administrative Agent and the Lenders, on the other, shall likewise be
conclusively presumed

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to have been had or consummated in reliance upon this Guarantee. The REIT waives
diligence, presentment, protest, demand for payment and notice of default or
nonpayment to or upon the Borrower or the REIT with respect to the Obligations.
This Guarantee shall be construed as a continuing, absolute and unconditional
guarantee of payment without regard to (a) the validity, regularity or
enforceability of this Agreement, any Note, or any other Loan Document, any of
the Obligations or any other collateral security therefor or guarantee or right
of offset with respect thereto at any time or from time to time held by the
Administrative Agent or any Lender, (b) any defense, set-off or counterclaim
(other than a defense of payment or performance) which may at any time be
available to or be asserted by the Borrower against the Administrative Agent or
any Lender, or (c) any other circumstance whatsoever (with or without notice to
or knowledge of the Borrower or the REIT) which constitutes, or might be
construed to constitute, an equitable or legal discharge of the Borrower for the
Obligations, or of the REIT under this Guarantee, in bankruptcy or in any other
instance. When pursuing its rights and remedies hereunder against the REIT, the
Administrative Agent and any Lender may, but shall be under no obligation to,
pursue such rights and remedies as it may have against the Borrower or any other
Person or against any collateral security or guarantee for the Obligations or
any right of offset with respect thereto, and any failure by the Administrative
Agent or any Lender to pursue such other rights or remedies or to collect any
payments from the Borrower or any such other Person or to realize upon any such
collateral security or guarantee or to exercise any such right of offset, or any
release of the Borrower or any such other Person or of any such collateral
security, guarantee or right of offset, shall not relieve the REIT of any
liability hereunder, and shall not impair or affect the rights and remedies,
whether express, implied or available as a matter of law, of the Administrative
Agent or any Lender against the REIT. This Guarantee shall remain in full force
and effect and be binding in accordance with and to the extent of its terms upon
the REIT and its successors and assigns thereof, and shall inure to the benefit
of the Administrative Agent and the Lenders, and their respective successors,
indorsees, transferees and assigns, until all the Obligations and the
obligations of the REIT under this Guarantee shall have been satisfied by
payment in full and the Commitments shall be terminated.

8.5 Reinstatement. This Guarantee shall continue to be effective, or
be reinstated, as the case may be, if at any time payment, or any part thereof,
of any of the Obligations is rescinded or must otherwise be restored or returned
by the Administrative Agent or any Lender upon the insolvency, bankruptcy,
dissolution,

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liquidation or reorganization of the Borrower or upon or as a
result of the appointment of a receiver, intervenor or conservator of, or
trustee or similar officer for, the Borrower or any substantial part of its
property, or otherwise, all as though such payments had not been made.

8.6 Payments. The REIT hereby agrees that the Obligations will be paid
to the Administrative Agent without set-off or counterclaim in U.S. Dollars at
the Payment Office.

SECTION 9. THE AGENTS

9.1 Appointment. Each Lender hereby irrevocably designates and
appoints the Agents as the agents of such Lender under this Agreement and the
other Loan Documents, and each such Lender irrevocably authorizes each Agent, in
such capacity, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to the such Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, no Agent shall have any duties or responsibilities,
except those expressly set forth herein, or any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against any Agent.

9.2 Delegation of Duties. Each Agent may execute any of its duties
under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. No Agent shall be responsible for the
negligence or misconduct of any agents or attorneys in-fact selected by it with
reasonable care.

9.3 Exculpatory Provisions. Neither any Agent nor any of their
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing are found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted from

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its or such Person's own gross negligence or willful misconduct) or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by any Loan Party or any officer thereof
contained in this Agreement or any other Loan Document or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Agents under or in connection with, this Agreement or any other Loan
Document or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document or for any failure
of any Loan Party a party thereto to perform its obligations hereunder or
thereunder. The Agents shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Loan Party.

9.4 Reliance by Agents. Each Agent shall be entitled to rely, and
shall be fully protected in relying, upon any instrument, writing, resolution,
notice, consent, certificate, affidavit, letter, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Loan Parties), independent accountants and other
experts selected by the Administrative Agent. The Agents may deem and treat the
payee of any Note as the owner thereof for all purposes unless a written notice
of assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent. Each Agent shall be fully justified in failing or refusing
to take any action under this Agreement or any other Loan Document unless it
shall first receive such advice or concurrence of the Required Lenders (or, if
so specified by this Agreement, all Lenders) as it deems appropriate or it shall
first be indemnified to its satisfaction by the Lenders against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. Each Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
other Loan Documents in accordance with a request of the Required Lenders (or,
if so specified by this Agreement, all Lenders), and such request and any action
taken or failure to act pursuant thereto shall be binding upon all the Lenders
and all future holders of the Loans.

9.5 Notice of Default. No Agent shall be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder

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unless such Agent has received notice from a Lender, the REIT or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall give
notice thereof to the Lenders. The Administrative Agent shall take such action
with respect to such Default or Event of Default as shall be reasonably directed
by the Required Lenders (or, if so specified by this Agreement, all Lenders);
provided that unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests of the
Lenders.

9.6 Non-Reliance on Agents and Other Lenders. Each Lender expressly
acknowledges that neither the Agents nor any of their respective officers,
directors, employees, agents, attorneys-in-fact or affiliates have made any
representations or warranties to it and that no act by any Agent hereinafter
taken, including any review of the affairs of a Loan Party or any affiliate of a
Loan Party, shall be deemed to constitute any representation or warranty by any
Agent to any Lender. Each Lender represents to the Agents that it has,
independently and without reliance upon any Agent or any other Lender, and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and their
affiliates and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Lender also represents that it will, independently and
without reliance upon any Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Loan Parties and their affiliates. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, no Agent shall have any duty or responsibility
to provide any Lender with any credit or other information concerning the
business, operations, property, condition (financial or otherwise), prospects or
creditworthiness of any Loan Party or any affiliate of a Loan Party which may
come into the possession of such Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates.

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9.7 Indemnification. The Lenders agree to indemnify each Agent in its
capacity as such (to the extent not reimbursed by the REIT or the Borrower and
without limiting the obligation of the REIT or the Borrower to do so), ratably
according to their respective Aggregate Exposure Percentages in effect on the
date on which indemnification is sought under this Section (or, if
indemnification is sought after the date upon which the Commitments shall have
terminated and the Loans shall have been paid in full, ratably in accordance
with such Aggregate Exposure Percentages immediately prior to such date), from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time (including, without limitation, at any time
following the payment of the Loans) be imposed on, incurred by or asserted
against such Agent in any way relating to or arising out of, the Commitments,
this Agreement, any of the other Loan Documents or any documents contemplated by
or referred to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by such Agent under or in connection with
any of the foregoing; provided that no Lender shall be liable for the payment of
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements which are found by a
final and nonappealable decision of a court of competent jurisdiction to have
resulted from such Agent's gross negligence or willful misconduct. The
agreements in this Section 9.7 shall survive the payment of the Loans and all
other amounts payable hereunder.

9.8 Agent in Its Individual Capacity. Each Agent and its affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with any Loan Party as though such Agent was not an Agent. With respect
to its Loans made or renewed by it, each Agent shall have the same rights and
powers under this Agreement and the other Loan Documents as any Lender and may
exercise the same as though it were not an Agent, and the terms "Lender" and
"Lenders" shall include each Agent in its individual capacity.

9.9 Successor Agents. The Administrative Agent may resign as
Administrative Agent upon 10 days' notice to the Lenders and the Borrower. If
the Administrative Agent shall resign as Administrative Agent under this
Agreement and the other Loan Documents, then the Required Lenders shall appoint
from among the Lenders a successor agent for the Lenders, whereupon such
successor agent shall succeed to the rights, powers and duties of the
Administrative Agent, and the term "Administrative Agent" shall mean such
successor agent effective

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upon such appointment and approval, and the former Administrative Agent's
rights, powers and duties as Administrative Agent shall be terminated, without
any other or further act or deed on the part of such former Administrative Agent
or any of the parties to this Agreement or any holders of the Loans. If no
successor agent has accepted appointment as Administrative Agent by the date
that is 10 days following a retiring Administrative Agent's notice of
resignation, the retiring Administrative Agent's resignation shall nevertheless
thereupon become effective, and the Lenders shall assume and perform all of the
duties of the Administrative Agent hereunder until such time, if any, as the
Required Lenders appoint a successor agent as provided for above. The
Syndication Agent may, at any time, by notice to the Lenders and the
Administrative Agent, resign as Syndication Agent hereunder, whereupon the
duties, rights, obligations and responsibilities hereunder shall automatically
be assumed by, and inure to the benefit of, the Administrative Agent, without
any further act by the Syndication Agent, the Administrative Agent or any
Lender. After any retiring Agent's resignation as Agent, the provisions of this
Section 9 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement and the other Loan
Documents.

9.10 The Arranger. The Arranger, in its capacity as such, shall have
no duties or responsibilities, and shall incur no liability, under this
Agreement and the other Loan Documents.

SECTION 10. MISCELLANEOUS

10.1 Amendments and Waivers. Neither this Agreement or any other Loan
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 10.1. The
Required Lenders and each Loan Party which is a party to the relevant Loan
Document may, or (with the written consent of the Required Lenders) the Agents
and each Loan Party which is a party to the relevant Loan Document may, from
time to time, (a) enter into written amendments, supplements or modifications
hereto and to the other Loan Documents (including amendments and restatements
hereof or thereof) for the purpose of adding any provisions to this Agreement or
the other Loan Documents or changing in any manner the rights of the Lenders or
of the Loan Parties hereunder or thereunder or (b) waive, on such terms and
conditions as may be specified in the instrument of waiver, any of the
requirements

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of this Agreement or the other Loan Documents or any Default or Event of Default
and its consequences; provided, however, that no such waiver and no such
amendment, supplement or modification shall (i) forgive the principal amount or
extend the final scheduled date of maturity of any Loan, extend the scheduled
date of any amortization payment in respect of any Loan, reduce the stated rate
of any interest or fee payable hereunder or extend the scheduled date of any
payment thereof, or increase the amount or extend the expiration date of any
Commitment of any Lender, in each case without the consent of each Lender
directly affected thereby; (ii) amend, modify or waive any provision of this
Section or reduce any percentage specified in the definition of Required
Lenders, consent to the assignment or transfer by the Borrower of any of its
rights and obligations under this Agreement and the other Loan Documents,
release all or substantially all of the Subsidiary Guarantors from their
guarantee obligations under the Subsidiary Guarantee, in each case without the
consent of all Lenders; (iii) amend, modify or waive any provision of Section 9
without the consent of any Agent directly affected thereby; or (iv) amend,
modify or waive any provision of Section 2.15 without the consent of each Lender
directly affected thereby. Any such waiver and any such amendment, supplement or
modification shall apply equally to each of the Lenders and shall be binding
upon the Loan Parties, the Lenders, the Administrative Agent and all future
holders of the Loans. In the case of any waiver, the Loan Parties, the Lenders
and the Administrative Agent shall be restored to their former position and
rights hereunder and under the other Loan Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon. Any such waiver, amendment, supplement or
modification shall be effected by a written instrument signed by the parties
required to sign pursuant to the foregoing provisions of this Section; provided,
that delivery of an executed signature page of any such instrument by facsimile
transmission shall be effective as delivery of a manually executed counterpart
thereof. For the avoidance of doubt, this Agreement may be amended (or amended
and restated) with the written consent of the Required Lenders, the
Administrative Agent and each Loan Party to each relevant Loan Document (x) to
add one or more additional credit facilities to this Agreement and to permit the
extensions of credit from time to time outstanding thereunder and the accrued
interest and fees in respect thereof (collectively, the "Additional Extensions
of Credit") to share ratably in the benefits of this Agreement and the other
Loan Documents with the Loans and the accrued interest and fees in respect
thereof and (y) to include appropriately the Lenders holding such credit
facilities in any determination of the Required Lenders.

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10.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed (a) in the case of the REIT, the Borrower and the Agents, as
follows and (b) in the case of the Lenders, as set forth on Schedule I or, in
the case of a Lender which becomes a party to this Agreement pursuant to an
Assignment and Acceptance, in such Assignment and Acceptance or (c) in the case
of any party, to such other address as such party may hereafter notify to the
other parties hereto:

The REIT: Apartment Investment and Management Company
1873 South Bellaire St.
17th Floor
Denver, CO 80222
Attn: Patricia Heath
Telecopy: (303) 961-4317
Telephone: (303) 691-4343

The Borrower: AIMCO Properties
c/o Apartment Investment and Management Company
1873 South Bellaire St.
17th Floor
Denver, CO 80222
Attn: Patricia Heath
Telecopy: (303) 961-4317
Telephone: (303) 691-4343

The Syndication Agent: Lehman Commercial Paper Inc.
3 World Financial Center, 8th Floor
New York, New York 10285
Attention: Allyson Bailey
Telecopy: (212) 528-7423
Telephone: (212) 526-5849

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The Administrative Agent: Lehman Commercial Paper Inc.
3 World Financial Center, 8th Floor
New York, New York 10285
Attention: Allyson Bailey
Telecopy: (212) 528-7423
Telephone: (212) 526-5849

provided that any notice, request or demand to or upon the either Agent or any
Lender shall not be effective until received.

10.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the either Agent or any Lender, any right,
remedy, power or privilege hereunder or under the other Loan Documents shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.

10.4 Survival of Representations and Warranties. All representations
and warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans and other extensions of credit hereunder.

10.5 Payment of Expenses. The Borrower agrees (a) to pay or reimburse
the Agents for all their reasonable out-of-pocket costs and expenses incurred in
connection with the syndication of the Loans and the Commitments (other than
fees payable to syndicate members) and the development, preparation and
execution of, and any amendment, supplement or modification to, this Agreement
and the other Loan Documents and any other documents prepared in connection
herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including, without limitation, the
reasonable fees and disbursements and other charges of counsel to the
Administrative Agent, (b) to pay or reimburse each Lender and the Agents for all
its costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the other Loan Documents and
any such other documents, including, without limitation, the fees and
disbursements of counsel (including the allocated fees

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and disbursements and other charges of in-house counsel) to each Lender and of
counsel to the Agents, (c) to pay, indemnify, and hold each Lender and the
Agents harmless from, any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other taxes, if any, which may be payable or determined to be payable
in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the other Loan Documents and any such other documents, and (d)
to pay, indemnify, and hold each Lender and the Agents and their respective
officers, directors, trustees, employees, affiliates, agents and controlling
persons (each, an "Indemnitee") harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of this
Agreement, the other Loan Documents and any such other documents, including,
without limitation, any of the foregoing relating to the use of proceeds of the
Loans or the violation of, noncompliance with or liability under, any
Environmental Law applicable to the operations of the REIT, the Borrower any of
their respective Subsidiaries or any Property owned or occupied by any of them
and the fees and disbursements and other charges of legal counsel in connection
with claims, actions or proceedings by any Indemnitee against the Borrower or
the REIT hereunder (all the foregoing in this clause (d), collectively, the
"Indemnified Liabilities"), provided, that the Borrower and the REIT shall have
no obligation hereunder to any Indemnitee with respect to Indemnified
Liabilities to the extent such Indemnified Liabilities are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of such Indemnitee. Without
limiting the foregoing, and to the extent permitted by applicable law, each of
the REIT and the Borrower agrees not to assert and to cause its Subsidiaries not
to assert, and hereby waives and agrees to cause its Subsidiaries so to waive,
all rights for contribution or any other rights of recovery with respect to all
claims, demands, penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature, under or related to Environmental Laws,
that any of them might have by statute or otherwise against any indemnitee. The
agreements in this Section shall survive repayment of the Loans and all other
amounts payable hereunder.

10.6 Successors and Assigns; Participations and Assignments. (a) This
Agreement shall be binding upon and inure to the benefit of the REIT, the
Borrower, the Lenders, the Agents, all future holders of the Loans and their
respective successors and assigns, except that neither the REIT nor the Borrower
may assign or transfer any of its

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rights or obligations under this Agreement without the prior written consent of
the Agents and each Lender.

(b) Any Lender may, without the consent of the Borrower, in accordance
with applicable law, at any time sell to one or more banks, financial
institutions or other entities (each, a "Participant") participating interests
in any Loan owing to such Lender, any Commitment of such Lender or any other
interest of such Lender hereunder and under the other Loan Documents. In the
event of any such sale by a Lender of a participating interest to a Participant,
such Lender's obligations under this Agreement to the other parties to this
Agreement shall remain unchanged, such Lender shall remain solely responsible
for the performance thereof, such Lender shall remain the holder of any such
Loan for all purposes under this Agreement and the other Loan Documents, and the
Borrower and the Agents shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement and the other Loan Documents. In no event shall any Participant under
any such participation have any right to approve any amendment or waiver of any
provision of any Loan Document, or any consent to any departure by any Loan
Party therefrom, except to the extent that such amendment, waiver or consent
would reduce the principal of, or interest on, the Loans or any fees payable
hereunder, or postpone the date of the final maturity of the Loans, in each case
to the extent subject to such participation. Each of the REIT and the Borrower
agrees that if amounts outstanding under this Agreement and the Loans are due or
unpaid, or shall have been declared or shall have become due and payable upon
the occurrence of an Event of Default, each Participant shall, to the maximum
extent permitted by applicable law, be deemed to have the right of setoff in
respect of its participating interest in amounts owing under this Agreement to
the same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement, provided that, in purchasing
such participating interest, such Participant shall be deemed to have agreed to
share with the Lenders the proceeds thereof as provided in Section 10.7(a) as
fully as if it were a Lender hereunder. The Borrower also agrees that each
Participant shall be entitled to the benefits of Sections 2.14, 2.15 and 2.16
with respect to its participation in the Commitments and the Loans outstanding
from time to time as if it was a Lender; provided that, in the case of Section
2.15, such Participant shall have complied with the requirements of said Section
and provided, further, that no Participant shall be entitled to receive any
greater amount pursuant to any such Section than the transferor Lender would
have been entitled to receive in respect of the amount of the participation
transferred by such transferor Lender to such Participant had no such transfer
occurred.

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(c) Any Lender (an "Assignor") may, in accordance with applicable law
and upon written notice to the Syndication Agent, at any time and from time to
time assign to any Lender or any affiliate thereof or, with the consent of the
Agents (which, in each case, shall not be unreasonably withheld or delayed)
(provided that no such consent need be obtained by Lehman Commercial Paper Inc.
for a period of 180 days following the Closing Date), to an additional bank,
financial institution or other entity (an "Assignee") all or any part of its
rights and obligations under this Agreement pursuant to an Assignment and
Acceptance, substantially in the form of Exhibit D, executed by such Assignee
and such Assignor (and, where the consent of the Agents is required pursuant to
the foregoing provisions, by the Agents) and delivered to the Administrative
Agent for its acceptance and recording in the Register; provided that no such
assignment to an Assignee (other than any Lender or any affiliate thereof) shall
be in an aggregate principal amount of less than $10,000,000 (other than in the
case of an assignment of all of a Lender's interests under this Agreement),
unless otherwise agreed by the Syndication Agent and the Administrative Agent.
Upon such execution, delivery, acceptance and recording, from and after the
effective date determined pursuant to such Assignment and Acceptance, (x) the
Assignee thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereunder
with a Commitment and/or Loans as set forth therein, and (y) the Assignor
thereunder shall, to the extent provided in such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all of an Assignor's rights and obligations
under this Agreement, such Assignor shall cease to be a party hereto).

(d) The Administrative Agent shall, on behalf of the Borrower,
maintain at its address referred to in Section 10.2 a copy of each Assignment
and Acceptance delivered to it and a register (the "Register") for the
recordation of the names and addresses of the Lenders and the Commitment of, and
principal amount of the Loans owing to, each Lender from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, the Administrative Agent and the Lenders shall treat each
Person whose name is recorded in the Register as the owner of the Loans and any
Notes evidencing such Loans recorded therein for all purposes of this Agreement.
Any assignment of any Loan, whether or not evidenced by a Note, shall be
effective only upon appropriate entries with respect thereto being made in the
Register (and each Note shall expressly so provide). Any assignment or transfer
of all or part of a Loan evidenced by a Note shall be registered on the Register
only upon surrender for registration of assignment or transfer of the Note
evidencing such Loan, accompanied by a duly executed Assignment and Acceptance;
thereupon one or more new Notes in the same

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aggregate principal amount shall be issued to the designated Assignee, and the
old Notes shall be returned by the Administrative Agent to the Borrower marked
"cancelled". The Register shall be available for inspection by the Borrower or
any Lender at any reasonable time and from time to time upon reasonable prior
notice.

(e) Upon its receipt of an Assignment and Acceptance executed by an
Assignor and an Assignee (and, in any case where the consent of any other Person
is required by Section 10.6(c), by each such other Person) together with payment
to the Administrative Agent of a registration and processing fee of $3,500
(except that no such registration and processing fee shall be payable (y) in
connection with an assignment by or to Lehman Commercial Paper Inc. or (z) in
the case of an Assignee which is already a Lender or is an affiliate of a Lender
or a Person under common management with a Lender), the Administrative Agent
shall (i) promptly accept such Assignment and Acceptance and (ii) on the
effective date determined pursuant thereto record the information contained
therein in the Register and give notice of such acceptance and recordation to
the Lenders and the Borrower. On or prior to such effective date, the Borrower,
at its own expense, upon request, shall execute and deliver to the
Administrative Agent (in exchange for the Note of the assigning Lender) a new
Note to the order of such Assignee in an amount equal to the applicable Loans
acquired by it pursuant to such Assignment and Acceptance and, if the Assignor
has retained Loans upon request, a new Note to the order of the Assignor in an
amount equal to the Loans retained by it hereunder. Such new Note shall be dated
the Closing Date and shall otherwise be in the form of the Note or Notes
replaced thereby.

(f) For avoidance of doubt, the parties to this Agreement acknowledge
that the provisions of this Section concerning assignments of Loans and Notes
relate only to absolute assignments and that such provisions do not prohibit
assignments creating security interests, including, without limitation, any
pledge or assignment by a Lender of any Loan or Note to any Federal Reserve Bank
in accordance with applicable law.

10.7 Adjustments; Set-off. (a) If any Lender (a "Benefitted Lender")
shall at any time receive any payment of all or part of the Obligations owing to
it, or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 7(f), or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of such other Lender's Obligations, such Benefitted Lender shall purchase for
cash from the other Lenders a participating interest in such portion of each
such other Lender's Obligations, or shall provide such other Lenders with the
benefits of

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any such collateral, as shall be necessary to cause such Benefitted Lender to
share the excess payment or benefits of such collateral ratably with each of the
Lenders; provided, however, that if all or any portion of such excess payment or
benefits is thereafter recovered from such Benefitted Lender, such purchase
shall be rescinded, and the purchase price and benefits returned, to the extent
of such recovery, but without interest.

(b) In addition to any rights and remedies of the Lenders provided by
law, each Lender shall have the right, without prior notice to the REIT or the
Borrower, any such notice being expressly waived by the REIT and the Borrower to
the extent permitted by applicable law, upon any amount becoming due and payable
by the REIT or the Borrower hereunder (whether at the stated maturity, by
acceleration or otherwise), to set off and appropriate and apply against such
amount any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by such Lender or any branch or
agency thereof to or for the credit or the account of the REIT or the Borrower,
as the case may be. Each Lender agrees promptly to notify the Borrower and the
Administrative Agent after any such setoff and application made by such Lender,
provided that the failure to give such notice shall not affect the validity of
such setoff and application.

10.8 Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed signature page of this Agreement by
facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Borrower and the Administrative Agent.

10.9 Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

10.10 Integration. This Agreement and the other Loan Documents
represent the agreement of the REIT, the Borrower, the Administrative Agent and
the Lenders with respect to the subject matter hereof, and there are no
promises, undertakings, representations or warranties by the Administrative
Agent or any Lender relative to

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subject matter hereof not expressly set forth or referred to herein or in the
other Loan Documents.

10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

10.12 Submission To Jurisdiction; Waivers. Each of the REIT and the
Borrower hereby irrevocably and unconditionally:

(a) submits for itself and its Property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the courts of
the State of New York, the courts of the United States of America for the
Southern District of New York, and appellate courts from any thereof;

(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;

(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to the REIT
or the Borrower, as the case may be at its address set forth in Section
10.2 or at such other address of which the Administrative Agent shall have
been notified pursuant thereto;

(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to sue in any other jurisdiction; and

(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to
in this Section any special, exemplary, punitive or consequential damages.

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10.13 Acknowledgements. Each of the REIT and the Borrower hereby
acknowledges that:

(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;

(b) neither the Administrative Agent nor any Lender has any fiduciary
relationship with or duty to the REIT or the Borrower arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between Administrative Agent and Lenders, on one hand, and the
REIT and the Borrower, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and

(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among
the Lenders or among the REIT, the Borrower and the Lenders.

10.14 Confidentiality. Each of the Agents and the Lenders agrees to
keep confidential all non-public information provided to it by any Loan Party
pursuant to this Agreement that constitutes projections or is designated by such
Loan Party as confidential; provided that nothing herein shall prevent any Agent
or any Lender from disclosing any such information (a) to the Administrative
Agent, any other Lender or any affiliate of any Lender, (b) to any Participant
or Assignee (each, a "Transferee") or prospective Transferee which agrees to
comply with the provisions of this Section, (c) any of its employees, directors,
agents, attorneys, accountants and other professional advisors, (d) upon the
request or demand of any Governmental Authority having jurisdiction over it, (e)
in response to any order of any court or other Governmental Authority or as may
otherwise be required pursuant to any Requirement of Law, (f) if requested or
required to do so in connection with any litigation or similar proceeding, (g)
which has been publicly disclosed other than in breach of this Section 10.14,
(h) to the National Association of Insurance Commissioners or any similar
organization or any nationally recognized rating agency that requires access to
information about a Lender's investment portfolio in connection with ratings
issued with respect to such Lender or (i) in connection with the exercise of any
remedy hereunder or under any other Loan Document.

10.15 Accounting Changes. In the event that any "Accounting Change"
(as defined below) shall occur and such change results in a change in the method
of calculation of financial covenants, standards or terms in this Agreement,
then the REIT,

105
<PAGE> 112

the Borrower and the Administrative Agent agree to enter into negotiations in
order to amend such provisions of this Agreement so as to equitably reflect such
Accounting Changes with the desired result that the criteria for evaluating
financial condition of the REIT and the Borrower shall be the same after such
Accounting Changes as if such Accounting Changes had not been made. Until such
time as such an amendment shall have been executed and delivered by the
Borrower, the Administrative Agent and the Required Lenders, all financial
covenants, standards and terms in this Agreement shall continue to be calculated
or construed as if such Accounting Changes had not occurred. "Accounting
Changes" refers to changes in accounting principles required by the promulgation
of any rule, regulation, pronouncement or opinion by the Financial Accounting
Standards Board of the American Institute of Certified Public Accountants or, if
applicable, the SEC.

10.16 WAIVERS OF JURY TRIAL. THE REIT, THE BORROWER, THE AGENTS AND
THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
AND FOR ANY COUNTERCLAIM THEREIN.

106
<PAGE> 113

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.

APARTMENT INVESTMENT AND
MANAGEMENT COMPANY

By: /s/ Peter K. Kompaniez
----------------------------------
Name:
Title: President

AIMCO PROPERTIES, L.P., as Borrower
By: AIMCO-GP, INC., general partner

By: /s/ Peter K. Kompaniez
----------------------------------
Name:
Title: President

LEHMAN BROTHERS INC., as Arranger

By: /s/ Francis X. Gilhool
----------------------------------
Name:
Title: Authorized Signatory

LEHMAN COMMERCIAL PAPER INC., as
Syndication Agent, Administrative Agent
and as a Lender

By: /s/ Francis X. Gilhool
----------------------------------
Name:
Title: Authorized Signatory

107

<PAGE> 1

EXHIBIT 10.17

SUBSIDIARIES' GUARANTEE

SUBSIDIARIES' GUARANTEE, dated as of October 1, 1998, made by each of
the entities that are signatories hereto (the "Guarantors"), in favor of LEHMAN
COMMERCIAL PAPER INC., as administrative agent (in such capacity, the
"Administrative Agent") for the several banks and other financial institutions
or entities (the "Lenders") from time to time parties to the Interim Term Loan
Agreement, dated as of October 1, 1998 (as amended, supplemented or otherwise
modified from time to time, the "Interim Term Loan Agreement"), among APARTMENT
INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation (the "REIT"), AIMCO
PROPERTIES, L.P., a Delaware limited partnership (the "Borrower"), the Lenders,
LEHMAN BROTHERS INC., as advisor and arranger (in such capacity, the
"Arranger"), LEHMAN COMMERCIAL PAPER INC., as syndication agent (in such
capacity, the "Syndication Agent"), and the Administrative Agent.

W I T N E S S E T H:

WHEREAS, pursuant to the Interim Term Loan Agreement, the Lenders have
severally agreed to make Loans to the Borrower upon the terms and subject to the
conditions set forth therein, to be evidenced by the Notes issued by the
Borrower under the Interim Term Loan Agreement;

WHEREAS, the Borrower owns directly or indirectly all or a portion of
the issued and outstanding Capital Stock of each Guarantor;

WHEREAS, the Borrower and the Guarantors are engaged in related
businesses, and each Guarantor will derive substantial direct and indirect
benefits from the making of the Loans; and

WHEREAS, it is a condition precedent to the obligation of the Lenders
to make their respective Loans to the Borrower under the Interim Term Loan
Agreement that the Guarantors shall have executed and delivered this Guarantee
to the Administrative Agent for the ratable benefit of the Lenders.

NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Interim Term

<PAGE> 2

Loan Agreement and to induce the Lenders to make their respective loans to the
Borrower under the Interim Term Loan Agreement, the Guarantors hereby agree with
the Administrative Agent, for the ratable benefit of the Lenders, as follows:

1. Defined Terms. (a) Unless otherwise defined herein, terms defined in
the Interim Term Loan Agreement and used herein shall have the meanings given to
them in the Interim Term Loan Agreement.

(b) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Guarantee shall refer to this Guarantee as a whole and
not to any particular provision of this Guarantee, and section and paragraph
references are to this Guarantee unless otherwise specified.

(c) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.

2. Guarantee (a) Subject to the provisions of paragraph 2.(b), each of
the Guarantors hereby, jointly and severally, unconditionally and irrevocably,
guarantees to the Administrative Agent, for the ratable benefit of the Lenders
and their respective successors, indorsees, transferees and assigns, the prompt
and complete payment and performance by the Borrower when due (whether at the
stated maturity, by acceleration or otherwise) of the Obligations.

(b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under
the other Loan Documents shall in no event exceed the amount which can be
guaranteed by such Guarantor under applicable federal and state laws relating to
the insolvency of debtors.

(c) Each Guarantor further agrees to pay any and all expenses
(including, without limitation, all fees and disbursements of counsel) which may
be paid or incurred by the Administrative Agent or any Lender in enforcing, or
obtaining advice of counsel in respect of, any rights with respect to, or
collecting, any or all of the Obligations and/or enforcing any rights with
respect to, or collecting against, such Guarantor under this Guarantee.

(d) Each Guarantor agrees that the Obligations may at any time and from
time to time exceed the amount of the liability of such Guarantor hereunder
without impairing this Guarantee or affecting the rights and remedies of the
Administrative Agent or any Lender hereunder.

<PAGE> 3

(e) No payment or payments made by the Borrower, any of the Guarantors,
any other guarantor or any other Person or received or collected by the
Administrative Agent or any Lender from the Borrower, any of the Guarantors, any
other guarantor or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Obligations shall be deemed to modify,
reduce, release or otherwise affect the liability of any Guarantor hereunder
which shall, notwithstanding any such payment or payments (other than payments
made by such Guarantor in respect of the Obligations or payments received or
collected from such Guarantor in respect of the Obligations), remain liable for
the Obligations up to the maximum liability of such Guarantor hereunder until
the Obligations are paid in full.

(f) Each Guarantor agrees that whenever, at any time, or from time to
time, it shall make any payment to the Administrative Agent or any Lender on
account of its liability hereunder, it will notify the Administrative Agent in
writing that such payment is made under this Guarantee for such purpose.

3. Right of Contribution. Each Guarantor hereby agrees that to the
extent that a Guarantor shall have paid more than its proportionate share of any
payment made hereunder, such Guarantor shall be entitled to seek and receive
contribution from and against any other Guarantor hereunder who has not paid its
proportionate share of such payment. Each Guarantor's right of contribution
shall be subject to the terms and conditions of Section 5 hereof. The provisions
of this Section shall in no respect limit the obligations and liabilities of any
Guarantor to the Administrative Agent and the Lenders, and each Guarantor shall
remain liable to the Administrative Agent and the Lenders for the full amount
guaranteed by such Guarantor hereunder.

<PAGE> 4

Documents or otherwise, as such Lender may elect, whether or not the
Administrative Agent or any Lender has made any demand for payment and although
such obligations, liabilities and claims may be contingent or unmatured. The
Administrative Agent and each Lender shall notify such Guarantor promptly of any
such set-off and the application made by the Administrative Agent or such
Lender, provided that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of the Administrative Agent
and each Lender under this Section are in addition to other rights and remedies
(including, without limitation, other rights of set-off) which the
Administrative Agent or such Lender may have.

5. No Subrogation. Notwithstanding any payment or payments made by any
of the Guarantors hereunder, or any set-off or application of funds of any of
the Guarantors by the Administrative Agent or any Lender, no Guarantor shall be
entitled to be subrogated to any of the rights of the Administrative Agent or
any Lender against the Borrower or any other Guarantor or any collateral
security or guarantee or right of offset held by any Lender for the payment of
the Obligations, nor shall any Guarantor seek or be entitled to seek any
contribution or reimbursement from the Borrower or any other Guarantor in
respect of payments made by such Guarantor hereunder, until all amounts owing to
the Administrative Agent and the Lenders by the Borrower on account of the
Obligations are paid in full. If any amount shall be paid to any Guarantor on
account of such subrogation rights at any time when all of the Obligations shall
not have been paid in full, such amount shall be held by such Guarantor in trust
for the Administrative Agent and the Lenders, segregated from other funds of
such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned
over to the Administrative Agent in the exact form received by such Guarantor
(duly indorsed by such Guarantor to the Administrative Agent, if required), to
be applied against the Obligations, whether matured or unmatured, in such order
as the Administrative Agent may determine.

<PAGE> 5

therewith may be amended, modified, supplemented or terminated, in whole or in
part, as the Administrative Agent (or the Required Lenders, as the case may be)
may deem advisable from time to time, and any collateral security, guarantee or
right of offset at any time held by the Administrative Agent or any Lender for
the payment of the Obligations may be sold, exchanged, waived, surrendered or
released. Neither the Administrative Agent nor any Lender shall have any
obligation to protect, secure, perfect or insure any Lien at any time held by it
as security for the Obligations or for this Guarantee or any property subject
thereto. When making any demand hereunder against any of the Guarantors, the
Administrative Agent or any Lender may, but shall be under no obligation to,
make a similar demand on the Borrower or any other Guarantor or guarantor, and
any failure by the Administrative Agent or any Lender to make any such demand or
to collect any payments from the Borrower or any such other Guarantor or
guarantor or any release of the Borrower or such other Guarantor or guarantor
shall not relieve any of the Guarantors of their several obligations or
liabilities hereunder, and shall not impair or affect the rights and remedies,
express or implied, or as a matter of law, of the Administrative Agent or any
Lender against any of the Guarantors. For the purposes hereof "demand" shall
include the commencement and continuance of any legal proceedings.

<PAGE> 6

notice to or knowledge of the Borrower or such Guarantor) which constitutes, or
might be construed to constitute, an equitable or legal discharge of the
Borrower for the Obligations, or of such Guarantor under this Guarantee, in
bankruptcy or in any other instance. When pursuing its rights and remedies
hereunder against any Guarantor, the Administrative Agent and any Lender may,
but shall be under no obligation to, pursue such rights and remedies as it may
have against the Borrower or any other Person or against any collateral security
or guarantee for the Obligations or any right of offset with respect thereto,
and any failure by the Administrative Agent or any Lender to pursue such other
rights or remedies or to collect any payments from the Borrower or any such
other Person or to realize upon any such collateral security or guarantee or to
exercise any such right of offset, or any release of the Borrower or any such
other Person or any such collateral security, guarantee or right of offset,
shall not relieve such Guarantor of any liability hereunder, and shall not
impair or affect the rights and remedies, whether express, implied or available
as a matter of law, of the Administrative Agent and the Lenders against such
Guarantor. This Guarantee shall remain in full force and effect and be binding
in accordance with and to the extent of its terms upon each Guarantor and the
successors and assigns thereof, and shall inure to the benefit of the
Administrative Agent and the Lenders, and their respective successors,
indorsees, transferees and assigns, until all the Obligations and the
obligations of each Guarantor under this Guarantee shall have been satisfied by
payment in full and the Commitments shall be terminated.

8. Reinstatement. This Guarantee shall continue to be effective, or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
any of the Obligations is rescinded or must otherwise be restored or returned by
the Administrative Agent or any Lender upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of the Borrower or any Guarantor, or
upon or as a result of the appointment of a receiver, intervenor or conservator
of, or trustee or similar officer for, the Borrower or any Guarantor or any
substantial part of its property, or otherwise, all as though such payments had
not been made.

9. Payments. Each Guarantor hereby guarantees that payments hereunder
will be paid to the Administrative Agent without set-off or counterclaim in U.S.
Dollars at the office of the Administrative Agent located at the Payment Office.

10. Representations and Warranties. Each Guarantor hereby represents
and warrants that:

<PAGE> 7

(a) it (i) is a corporation, partnership or limited liability company,
as the case may be, duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation, (ii) has the corporate or
partnership, as the case may be, power and authority and the legal right to own
and operate its property, to lease the property it operates as lessee, (iii) to
conduct the business in which it is currently engaged and (iv) is in compliance
with all Requirements of Law except to the extent that the failure to comply
therewith could not, in the aggregate, reasonably be expected to have a material
adverse effect on the business, assets, property, condition (financial or
otherwise) or prospects of such Guarantor (a "Material Adverse Effect");

(b) it has the corporate or partnership, as the case may be, power and
authority, and the legal right, to make and deliver, and perform its obligations
under this Guarantee, and has taken all necessary corporate action to authorize
its execution, delivery and performance of this Guarantee;

(c) this Guarantee constitutes a legal, valid and binding obligation of
such Guarantor enforceable in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and general equitable principles (whether
enforcement is sought by proceedings in equity or at law);

(d) the execution, delivery and performance of this Guarantee will not
violate any provision of any Requirement of Law or Contractual Obligation of
such Guarantor and will not result in, or require, the creation or imposition of
any Lien on any of the properties or revenues of such Guarantor pursuant to any
Requirement of Law or Contractual Obligation of the Guarantor; no Requirement of
Law or Contractual Obligation applicable to such Guarantor could reasonably be
expected to have a Material Adverse Effect;

(e) no consent or authorization of, filing with, notice to or other act
by or in respect of, any Governmental Authority or any other Person is required
in connection with the execution, delivery, performance, validity or
enforceability of this Guarantee; and

(f) no litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the knowledge of such
Guarantor, threatened by or against such Guarantor or against any of its
properties or revenues with respect to this Guarantee.

<PAGE> 8

Each Guarantor agrees that the foregoing representations and warranties
shall be deemed to have been made by such Guarantor on the date of each
borrowing by the Borrower under the Interim Term Loan Agreement on and as of
such date of borrowing as though made hereunder on and as of such date.

11. Authority of Administrative Agent. Each Guarantor acknowledges
that the rights and responsibilities of the Administrative Agent under this
Guarantee with respect to any action taken by the Administrative Agent or the
exercise or non-exercise by the Administrative Agent of any option, right,
request, judgment or other right or remedy provided for herein or resulting or
arising out of this Guarantee shall, as between the Administrative Agent and the
Lenders, be governed by the Interim Term Loan Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Administrative Agent and such Guarantor, the Administrative Agent
shall be conclusively presumed to be acting as agent for the Lenders with full
and valid authority so to act or refrain from acting, and no Guarantor shall be
under any obligation, or entitlement, to make any inquiry respecting such
authority.

12. Notices. All notices, requests and demands to or upon the
Administrative Agent, any Lender or any Guarantor to be effective shall be in
writing (including by telecopy) and shall be deemed to have been duly given or
made postage prepaid when delivered or three Business Days after being deposited
in the mail, or, in the case of telecopy notice, when received, addressed as
follows:

(a) if to the Administrative Agent or any Lender, at its address or
transmission number for notices provided in subsection 10.2 of the Interim Term
Loan Agreement; and

(b) if to any Guarantor, at its address or transmission number for
notices set forth under its signature below.

The Administrative Agent, each Lender and each Guarantor may change its
address and transmission numbers for notices by notice in the manner provided in
this Section.

13. Counterparts. This Guarantee may be executed by one or more of the
Guarantors on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. A set
of copies of this Guarantee signed by all the Guarantors shall be lodged with
the Administrative Agent.

<PAGE> 9

14. Severability. Any provision of this Guarantee which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

15. Integration. This Guarantee represents the agreement of each
Guarantor with respect to the subject matter hereof and there are no promises or
representations by the Administrative Agent or any Lender relative to the
subject matter hereof not reflected herein.

16. Amendments in Writing; No Waiver; Cumulative Remedies. (a) None of
the terms or provisions of this Guarantee may be waived, amended, supplemented
or otherwise modified except by a written instrument executed by each Guarantor
and the Administrative Agent, provided that any provision of this Guarantee may
be waived by the Administrative Agent and the Lenders in a letter or agreement
executed by the Administrative Agent or by telecopy from the Administrative
Agent.

(b) No failure to exercise and no delay in exercising, on the part of
either Agent or any Lender, any right, remedy, power or privilege under this
Guarantee shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege.

(c) The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any other rights, remedies, powers and
privileges provided by law.

17. Section Headings. The section headings used in this Guarantee are
for convenience of reference only and are not to affect the construction hereof
or be taken into consideration in the interpretation hereof.

18. Successors and Assigns. This Guarantee shall be binding upon the
successors and assigns of each Guarantor and shall inure to the benefit of the
Administrative Agent and the Lenders and their successors and assigns.

19. Governing Law. This Guarantee shall be governed by, and construed
and interpreted in accordance with, the law of the State of New York.

<PAGE> 10

IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee
to be duly executed and delivered by its duly authorized officer as of the day
and year first above written.

AIMCO HOLDINGS QRS, INC.
AIMCO-GP, INC.
AIMCO-LP, INC.
AIMCO/OTC QRS, INC.
AIMCO PROPERTIES FINANCE CORP.
AIMCO SOMERSET, INC.
A.J. TWO, INC.
AMBASSADOR IV, INC.
AMBASSADOR V, INC.
AMBASSADOR FLORIDA PARTNERS,
INC.

By: /s/ PETER KOMPANIEZ
-----------------------------------
Name: Peter Kompaniez
Title: President

AIMCO ARBOR STATION, L.P.
AIMCO CITRUS GROVE, L.P.
AIMCO FISHERMAN'S LANDING, L.P.
AIMCO LANDMARK, L.P.
AIMCO/TEAL POINTE, L.P.
AIMCO VILLA LA PAZ, L.P.
By: AIMCO HOLDINGS, L.P., as their
general partner
By: AIMCO HOLDINGS QRS, INC., as
its general partner

By: /s/ PETER KOMPANIEZ
-----------------------------------
Name: Peter Kompaniez
Title: President

<PAGE> 11

AIMCO HOLDINGS, L.P.
By: AIMCO HOLDINGS QRS, INC., as
its general partner

By: /s/ PETER KOMPANIEZ
-----------------------------------
Name: Peter Kompaniez
Title: President

AIMCO PROPERTIES FINANCE
PARTNERSHIP, L.P.
By: AIMCO PROPERTIES FINANCE
CORP., as its general partner

By: /s/ PETER KOMPANIEZ
-----------------------------------
Name: Peter Kompaniez
Title: President

AMBASSADOR II, L.P.
By: AMBASSADOR II, INC., as its general
partner

By: /s/ PETER KOMPANIEZ
-----------------------------------
Name: Peter Kompaniez
Title: President

AMBASSADOR X, L.P.
By: AMBASSADOR X, INC., as its general
partner

By: /s/ PETER KOMPANIEZ
-----------------------------------
Name: Peter Kompaniez
Title: President

S.A. APARTMENTS, LTD.
By: AIMCO HOLDINGS, L.P., as its general
partner

By: AIMCO HOLDINGS QRS, INC., as
its general partner

By: /s/ PETER KOMPANIEZ
-----------------------------------
Name: Peter Kompaniez
Title: President

<PAGE> 1

EXHIBIT 10.18

PREFERRED STOCK SUBSIDIARIES' GUARANTEE

PREFERRED STOCK SUBSIDIARIES' GUARANTEE, dated as of October 1, 1998,
made by each of the entities that are signatories hereto (the "Guarantors"), in
favor of LEHMAN COMMERCIAL PAPER INC., as administrative agent (in such
capacity, the "Administrative Agent") for the several banks and other financial
institutions or entities (the "Lenders") from time to time parties to the
Interim Term Loan Agreement, dated as of October 1, 1998 (as amended,
supplemented or otherwise modified from time to time, the "Interim Term Loan
Agreement"), among APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland
corporation (the "REIT"), AIMCO PROPERTIES, L.P., a Delaware limited partnership
(the "Borrower"), the Lenders, LEHMAN BROTHERS INC., as advisor and arranger (in
such capacity, the "Arranger"), LEHMAN COMMERCIAL PAPER INC., as syndication
agent (in such capacity, the "Syndication Agent"), and the Administrative Agent.

W I T N E S S E T H:

WHEREAS, the Borrower and the Guarantors are engaged in related
businesses;

WHEREAS, the Borrower has obtained this Guarantee from the Guarantors,
and the Guarantors have provided this Guarantee in return for Borrower's payment
of a Guarantee fee; and

NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Interim Term Loan
Agreement and to induce the Lenders to make their respective loans to the
Borrower under the Interim

<PAGE> 2

Term Loan Agreement, the Guarantors hereby agree with the Administrative Agent,
for the ratable benefit of the Lenders, as follows:

1. Defined Terms. (a) Unless otherwise defined herein, terms defined in
the Interim Term Loan Agreement and used herein shall have the meanings given to
them in the Interim Term Loan Agreement.

(c) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.

(b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Loan Documents shall in no event exceed the amount which can be guaranteed
by such Guarantor under applicable federal and state laws relating to the
insolvency of debtors.

(e) No payment or payments made by the Borrower, any of the
Guarantors, any other guarantor or any other Person or received or collected by
the Administrative

<PAGE> 3

Agent or any Lender from the Borrower, any of the Guarantors, any other
guarantor or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Obligations shall be deemed to modify, reduce,
release or otherwise affect the liability of any Guarantor hereunder which
shall, notwithstanding any such payment or payments (other than payments made by
such Guarantor in respect of the Obligations or payments received or collected
from such Guarantor in respect of the Obligations), remain liable for the
Obligations up to the maximum liability of such Guarantor hereunder until the
Obligations are paid in full.

4. Right of Set-off. Each Guarantor hereby irrevocably authorizes each
Lender at any time and from time to time without notice to such Guarantor or any
other Guarantor, any such notice being expressly waived by each Guarantor, to
set-off and appropriate and apply any and all deposits (general or special, time
or demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Lender to or for the credit or the account of such Guarantor, or
any part thereof in such amounts as such Lender may elect, against and on
account of the obligations and liabilities of such Guarantor to such Lender
hereunder and claims of every nature and description of such Lender against such
Guarantor, in any currency, whether arising hereunder, under the Interim Term
Loan Agreement, any Note, any Loan Documents or otherwise, as such Lender may
elect, whether or not the Administrative Agent or any Lender has made any
demand for payment and although such obligations, liabilities and claims may be
contingent or unmatured. The Administrative Agent and each Lender shall notify
such Guarantor promptly of any such set-off and the application made by the
Administrative Agent or such Lender, provided that the failure to

3
<PAGE> 4

give such notice shall not affect the validity of such set-off and application.
The rights of the Administrative Agent and each Lender under this Section are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) which the Administrative Agent or such Lender may have.

6. Amendments, etc. with respect to the Obligations; Waiver of Rights.
Each Guarantor shall remain obligated hereunder notwithstanding that, without
any reservation of rights against any Guarantor, and without notice to or
further assent by any Guarantor, any demand for payment of any of the
Obligations made by the Administrative Agent or any Lender may be rescinded by
such party and any of the Obligations continued, and the Obligations, or the
liability of any other party upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by the Administrative
Agent or any Lender, and any Loan Document and any other documents executed and
delivered in connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Administrative Agent (or the Required
Lenders, as the case may be) may deem advisable from time to time, and any
collateral security, guarantee or right of offset at any time held by the
Administrative Agent or any Lender for the payment of the Obligations may be
sold, exchanged, waived, surrendered or released. Neither the Administrative
Agent nor any Lender shall have any obligation to protect, secure, perfect or
insure any Lien at any time held by it as security for the Obligations or for
this Guarantee or any property subject thereto. When making any demand hereunder
against

<PAGE> 5

any of the Guarantors, the Administrative Agent or any Lender may, but shall be
under no obligation to, make a similar demand on the Borrower or any other
Guarantor or guarantor, and any failure by the Administrative Agent or any
Lender to make any such demand or to collect any payments from the Borrower or
any such other Guarantor or guarantor or any release of the Borrower or such
other Guarantor or guarantor shall not relieve any of the Guarantors of their
several obligations or liabilities hereunder, and shall not impair or affect the
rights and remedies, express or implied, or as a matter of law, of the
Administrative Agent or any Lender against any of the Guarantors. For the
purposes hereof "demand" shall include the commencement and continuance of any
legal proceedings.

7. Guarantee Absolute and Unconditional. Each Guarantor waives any and
all notice of the creation, renewal, extension or accrual of any of the
Obligations and notice of or proof of reliance by the Administrative Agent or
any Lender upon this Guarantee or acceptance of this Guarantee; the Obligations,
and any of them, shall conclusively be deemed to have been created, contracted
or incurred, or renewed, extended, amended or waived, in reliance upon this
Guarantee; and all dealings between the Borrower and any of the Guarantors, on
the one hand, and the Administrative Agent and the Lenders, on the other hand,
likewise shall be conclusively presumed to have been had or consummated in
reliance upon this Guarantee. Each Guarantor waives diligence, presentment,
protest, demand for payment and notice of default or nonpayment to or upon the
Borrower or any of the Guarantors with respect to the Obligations. Each
Guarantor understands and agrees that this Guarantee shall be construed as a
continuing, absolute and unconditional guarantee of payment without regard to
(a) the validity, regularity or enforceability of the Interim Term Loan
Agreement, any Note or any other Loan Document, any of the Obligations or any
other collateral security therefor or guarantee or right of offset with respect
thereto at any time or from time to time held by the Administrative Agent or any
Lender, (b) any defense, set-off or counterclaim (other than a defense of
payment or performance) which may at any time be available to or be asserted by
the Borrower against the Administrative Agent or any Lender, or (c) any other
circumstance whatsoever (with or without notice to or knowledge of the Borrower
or such Guarantor) which constitutes, or might be construed to constitute, an
equitable or legal discharge of the Borrower for the Obligations, or of such
Guarantor under this Guarantee, in bankruptcy or in any other instance. When
pursuing its rights and remedies hereunder against any Guarantor, the
Administrative Agent and any Lender may, but shall be under no obligation to,
pursue such rights and remedies as it may have against the Borrower or any other
Person or against any collateral security or guarantee for the Obligations or
any right of offset with respect thereto, and any failure by the Administrative
Agent or any Lender to pursue such other rights or remedies or to collect any
payments from the Borrower or any such other Person or to realize upon any such
collateral security or guarantee or to exercise any such right of offset, or any
release of the Borrower or any such other Person or any such collateral
security, guarantee or right of offset, shall not relieve such Guarantor

5
<PAGE> 6

of any liability hereunder, and shall not impair or affect the rights and
remedies, whether express, implied or available as a matter of law, of the
Administrative Agent and the Lenders against such Guarantor. This Guarantee
shall remain in full force and effect and be binding in accordance with and to
the extent of its terms upon each Guarantor and the successors and assigns
thereof, and shall inure to the benefit of the Administrative Agent and the
Lenders, and their respective successors, indorsees, transferees and assigns,
until all the Obligations and the obligations of each Guarantor under this
Guarantee shall have been satisfied by payment in full and the Commitments shall
be terminated.

10. Representations and Warranties. Each Guarantor hereby represents
and warrants that:

<PAGE> 7

11. Authority of Administrative Agent. Each Guarantor acknowledges that
the rights and responsibilities of the Administrative Agent under this Guarantee
with respect to any action taken by the Administrative Agent or the exercise or
non-exercise by the Administrative Agent of any option, right, request, judgment
or other right or remedy provided for herein or resulting or arising out of this
Guarantee shall, as between the Administrative Agent and the Lenders, be
governed by the Interim Term Loan Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Administrative Agent and such Guarantor, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Lenders with full and valid
authority so to act or refrain from acting, and no Guarantor shall be under any
obligation, or entitlement, to make any inquiry respecting such authority.

<PAGE> 8

(a) if to the Administrative Agent or any Lender, at its address or
transmission number for notices provided in subsection 10.2 of the Interim Term
Loan Agreement; and

(b) if to any Guarantor, at its address or transmission number for
notices set forth under its signature below.

The Administrative Agent, each Lender and each Guarantor may change its
address and transmission numbers for notices by notice in the manner provided in
this Section.

<PAGE> 9

(c) The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any other rights, remedies, powers and
privileges provided by law.

19. Governing Law. This Guarantee shall be governed by, and construed
and interpreted in accordance with, the law of the State of New York.

<PAGE> 10

IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee
to be duly executed and delivered by its duly authorized officer as of the day
and year first above written.

AIMCO/NHP HOLDINGS, INC.
AIMCO/NHP PROPERTIES, INC.
APTEK MAINTENANCE SERVICES
COMPANY LLC
APTEK MANAGEMENT COMPANY LLC
BROADSTREET MANAGEMENT, INC.
NHP A&R SERVICES, INC.
NHP ASSET MANAGEMENT SERVICES,
INC.
NHP CASH MANAGEMENT SERVICES,
INC.
NHP EQUITY SERVICES, INC.
NHP FLORIDA MANAGEMENT
COMPANY
NHP-HDV SIXTEEN, INC.
NHP-HDV TEN, INC.
NHP-HDV THREE, INC.
NHP-HDV 20, INC.
NHP-HG 15, INC.
NHP-HG 17, INC.
NHP MANAGEMENT COMPANY
NHP MAINTENANCE SERVICES
COMPANY
NHP/PRC MANAGEMENT COMPANY
LLC
NHP PUERTO RICO MANAGEMENT
COMPANY
NHP TEXAS MANAGEMENT COMPANY
PREFERRED HOME HEALTH, INC.
PROPERTY ASSET MANAGEMENT
SERVICES-CALIFORNIA, L.L.C.
PROPERTY ASSET MANAGEMENT
SERVICES, INC.
PROPERTY SERVICES GROUP, INC.
RESCORP REALTY, INC.
THE RISK SPECIALIST GROUP, INC.

<PAGE> 11

By: /s/ PETER KOMPANIEZ
----------------------------------
Name: Peter Kompaniez
Title: President

NHP/CONGRESS MANAGEMENT LIMITED
PARTNERSHIP
By: NHP-HG SIX, INC., as its general
partner

By: /s/ PETER KOMPANIEZ
----------------------------------
Name: Peter Kompaniez
Title: President

PROPERTY ASSET MANAGEMENT
SERVICES, L.P.
By: AIMCO PROPERTIES, L.P., as its
general partner
By: AIMCO-GP, INC., as its general
partner

By: /s/ PETER KOMPANIEZ
----------------------------------
Name: Peter Kompaniez
Title: President

<PAGE> 1
EXHIBIT 10.42

INCENTIVE STOCK OPTION AGREEMENT
(1997 Stock Award and Incentive Plan)

INCENTIVE STOCK OPTION AGREEMENT, dated as of ________________
(the "Agreement"), by and between Apartment Investment and Management Company, a
Maryland corporation (the "Company"), and _______________ (the "Optionee").
Capitalized terms used but not otherwise defined in this Agreement shall have
the respective meanings set forth in the Apartment Investment and Management
Company 1997 Stock Award and Incentive Plan, as amended (the "Plan").

WHEREAS, on _____________ (the "Grant Date") the Compensation
Committee (the "Committee") of the Board of Directors (the "Board") of the
Company awarded the Optionee an incentive stock option, exercisable to purchase
shares of the Company's Class A Common Stock, par value $.01 per share ("Common
Stock"), pursuant to, and subject to the terms and provisions of, the Plan.

NOW, THEREFORE, in consideration of the Optionee's services
to the Company and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

1. Number of Shares and Purchase Price. The Company hereby
grants the Optionee an Incentive Stock Option (the "Option") to purchase
________________, shares of Common Stock (the "Option Shares") at a purchase
price per share equal to $ ___________ (the "Exercise Price"), pursuant to the
terms of this Agreement and the provisions of the Plan.

2. Period of Option and Conditions of Exercise.

(a) Unless the Option is previously terminated pursuant to
this Agreement or the Plan, the Option shall terminate on the tenth anniversary
of the Date of Grant (the "Expiration Date"). Upon the termination of the
Option, all rights of the Optionee hereunder shall cease.

(b) In the event that the January 21, 1998 amendment to the
Plan is not approved by the stockholders of the Company at the Company's 1998
Annual Meeting of Stockholders, this Option shall terminate and all rights of
the Optionee hereunder shall cease.

(c) Subject to the provisions of the Plan and this Agreement,
the Option shall be exercisable as follows: (i) ____% of the Option Shares on
the second anniversary of the Date of Grant, (ii) ____% of the Option Shares on
the third anniversary of the Date of Grant, (iii) ____% of the Option Shares on
the fourth anniversary of the Date of Grant, and (iv) ____% of the Option Shares
on the fifth anniversary of the Date of Grant, provided, however, that the
Option shall be immediately exercisable as to ____% of the Option Shares
following the occurrence of a Change of Control (as defined below).

<PAGE> 2
3. Termination of Employment.

(a) Except as provided in this Section 3, the Option may not
be exercised after the Optionee has ceased to be employed by the Company or one
of its affiliates. In the event that the Optionee ceases to be employed by the
Company or one of its affiliates, the Option may be exercised following such
termination, as follows:

(i) if the Optionee's termination of employment is
due to his or her death or Disability (as defined below), the Option
shall remain exercisable until the Expiration Date for all Option
Shares for which the Option was otherwise exercisable;

(ii) if the Optionee ceases to be employed by the
Company or an affiliate other than due to death, Disability or
termination for Cause, the Option shall remain exercisable for a
period of ninety (90) days following such termination (but in no event
later than the Expiration Date) with respect to all Option Shares for
which the Option was otherwise exercisable as of the date of such
termination, and shall thereafter terminate; and

(iii) if the Optionee's termination is by the
Company or one of its affiliates for Cause (as defined below), the
Option shall terminate immediately on the date of the such
termination.

4. Exercise of Option.

(a) The Option may be exercised only by the Optionee or, in
the event of the death or incapacity of the Optionee, the Optionee's successor,
heir or legal representative. The Option shall be exercised by delivery to the
Company of (i) a written notice, substantially in the form attached hereto as
Exhibit A, specify the number of Option Shares for which the Option is being
exercised to purchase, and (ii) full payment of the Exercise Price for such
number of Option Shares being purchased (in respect of such Option Shares, the
"Total Exercise Price"), in the manner provided below, and any transfer or
withholding taxes applicable thereto.

(b) Payment of the Exercise Price for any Option Shares being
purchased shall be made as follows:

(i) The Optionee may satisfy all or any portion of
the Total Exercise Price by delivery to the Company of cash, by
certified or cashier's check, or

(ii) The Optionee may satisfy the remaining portion
of the Total Exercise Price by (A) assignment, transfer and delivery
to the Company, free of any liens, claims or encumbrances, of shares
of Common Stock that the Optionee owns, or (B) assignment and transfer
to the Company, free of any liens, claims or encumbrances, of OP Units
that the Optionee owns. If the Optionee pays by assignment, transfer
and delivery of shares

2
<PAGE> 3
of Common Stock, the Optionee must include with the notice of exercise
the certificates for such shares of Common Stock, either duly endorsed
for transfer or accompanied by an appropriately executed stock power
in favor of the Company. If the Optionee pays by assignment and
transfer of OP Units, the Optionee must include with the notice of
exercise a duly executed assignment of all of the Optionee's interest
in such OP Units. For purposes of this Agreement, the value of all
such shares of Common Stock delivered by the Optionee will be their
Fair Market Value, and the value of all OP Units assigned by the
Optionee will be the Fair Market Value of the number of shares of
Common Stock for which such OP Units are then subject to exchange upon
a redemption of such OP Units. If the value of the shares of Common
Stock delivered, or OP Units assigned, by the Optionee exceeds the
amount required to be paid pursuant to this Section 4, the Company
will provide to the Optionee, as soon as practicable, cash or a check
in an amount equal to the value of any fractional portion of a share
of Common Stock or OP Unit, and will issue a certificate to the
Optionee for any whole share(s) of Common Stock or OP Units exceeding
the number of shares of Common Stock or OP Units required to pay the
Exercise Price for all Option Shares being purchased.

(c) Not less than 100 shares of Common Stock may be purchased
at any time upon the exercise of the Option, unless the number of shares of
Common Stock so purchased constitutes the total number of Option Shares for
which the Option is then exercisable. The Option may be exercised only to
purchase whole shares of Common Stock, and in no case may a fractional share of
Common Stock be purchased. The right of the Optionee to purchase Option Shares
for which the Option is then exercisable may be exercised, in whole or in part,
at any time or from time to time, prior to the Expiration Date.

(d) The Company may require the Optionee to pay, prior to the
delivery of any Option Shares to which the Optionee shall be entitled upon
exercise of the Option, an amount equal to the Federal, state and local income
taxes and other amounts required by law to be withheld by the Company with
respect thereto. Alternatively, the Optionee may authorize the Company to
withhold from the number of Option Shares he or she would otherwise receive
upon exercise of the Option, that number of Option Shares having a Fair Market
Value equal to the amount of such required tax.

(e) Any Option that is exercised in a manner that prevents
its qualification as an Incentive Stock Option shall be treated for all
purposes as a Non-qualified Stock Option.

5. Definitions. For purposes of this Agreement:

(a) "Cause" shall mean the termination of employment of an
individual with the Company as a result of (i) the performance by such
individual of any activity involving fraud or dishonesty, (ii) the conviction
of the individual of a felony or crime involving moral turpitude, (iii) the
failure or refusal of such individual to reasonably or satisfactorily perform
any material duties or responsibilities reasonably required of such individual
by the Company, (iv) the gross

3
<PAGE> 4
negligence or willful neglect or malfeasance by the individual in the
performance or non-performance of such individual's duties or responsibilities
to the Company, or (v) any unauthorized act or omission by such individual that
is injurious in any material respect to the financial condition or business
reputation of the Company.

(b) "Change in Control" shall mean the occurrence of any of
the following events:

(i) an acquisition (other than directly from the
Company) of any voting securities of the Company (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 Company'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 Company or (2) any corporation, partnership
or other person of which a majority of its voting power or its equity
securities or equity interest is owned directly or indirectly by the Company or
in which the Company serves as a general partner or manager (a "Subsidiary"),
(B) the Company 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 Company as of the date hereof (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 Company'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 Company of:
(A) a merger, consolidation, share exchange or reorganization involving the
Company, unless (1) the stockholders of the Company, 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

4
<PAGE> 5
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
Company or any Subsidiary, any employee benefit plan (or any trust forming a
part thereof) maintained by the Company, 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 "Non-Control Transaction"); (B) a complete liquidation or
dissolution of the Company; or (C) an agreement for the sale or other
disposition of all or substantially all of the assets of the Company to any
person (other than a transfer to a Subsidiary).

Notwithstanding the foregoing, a Change in 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 Company
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 in Control would occur (but for the operation of this
sentence) as a result of the acquisition of Voting Securities by the Company,
and after such share acquisition by the Company, 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 in Control shall occur.

(c) The Optionee's employment will have terminated by reason
of "Disability" if, as a result of the Optionee's incapacity due to physical or
mental illness, the Optionee shall have been absent from his or her duties on a
full-time basis for the entire period of six (6) consecutive months, and within
thirty (30) days after written notice is given by the Company to the Optionee
(which may occur before or after the end of such six-month period), the
Optionee shall not have returned to the performance of his or her duties on a
full-time basis.

6. Tax Treatment; Tax Withholding.

(a) If the Optionee fails to comply with the requirements of
Section 422(a) of the Code (as from time to time redesignated or amended),
subsection (a)(1) of which currently re quires that any Shares acquired upon
exercise of the Option not be disposed of within two (2) years of the Date of
Grant or one (1) year from the date on which such Shares are acquired, Optionee
understands that the tax treatment otherwise applicable to the Option shall not
be available.

<PAGE> 6
(b) The Optionee understands that, to the extent that the
aggregate Fair Market Value of Option Shares (as of the Date of Grant) with
respect to which the Option is exercisable for the first time by the Optionee
during any calendar year under the Plan shall exceed $100,000, the Option shall
be treated as a Non-Qualified Stock Option.

(c) The Company shall have the power and the right to deduct
or withhold, or require a Optionee to remit to the Company, an amount
sufficient to satisfy any Federal, state, and local taxes (including the
Optionee's FICA obligation) required by law to be withheld as a result of any
taxable event arising in connection with the Option, in accordance with the
terms of the Plan.

(d) The Option shall be construed insofar as is practicable
to permit its continued qualification as an Incentive Stock Option; if,
however, the Option no longer so qualifies, it shall be treated for all
purposes as a Non-qualified Stock Option.

7. Miscellaneous.

(a) Entire Agreement. This Agreement and the Plan contain the
entire understanding and agreement of the Company and the Optionee concerning
the subject matter hereof, and supersede all earlier negotiations and
understandings, written or oral, between the parties with respect thereto.

(b) Captions. The captions and section numbers appearing in
this Agreement are inserted only as a matter of convenience. They do not
define, limit, construe or describe the scope or intent of the provisions of
this Agreement.

(c) Counterparts. This Agreement may be executed in
counterparts, each of which when signed by the Company or the Optionee will be
deemed an original and all of which together will be deemed the same agreement.

(d) Notices. Any notice or communication having to do with
this Agreement must be given by personal delivery or by certified mail, return
receipt requested, addressed, if to the Company or the Committee, to the
attention of the Chief Financial Officer of the Company at the principal office
of the Company and, if to the Optionee, to the Optionee's last known address
contained in the personnel records of the Company.

(e) Succession and Transfer. Each and all of the provisions
of this Agreement are binding upon and inure to the benefit of the Company and
the Optionee and their successors, assigns and legal representatives; provided,
however, that the Option granted hereunder shall not be transferable by the
Optionee (or the Optionee's successor or legal representative) other than by
will or by the laws of descent and distribution and may be exercised during the
lifetime of the Optionee, only by the Optionee or by his or her guardian or
legal representative.

<PAGE> 7
(f) Amendments. Subject to the provisions of the Plan, this
Agreement may be amended or modified at any time by an instrument in writing
signed by the parties hereto.

(g) Governing Law. This Agreement and the rights of all
persons claiming hereunder will be construed and determined in accordance with
the laws of the State of Colorado without giving effect to the choice of law
principles thereof.

(h) Plan Controls. This Agreement is made under and subject
to the provisions of the Plan, and all of the provisions of the Plan are hereby
incorporated by reference into this Agreement. In the event of any conflict
between the provisions of this Agreement and the provisions of the Plan, the
provisions of the Plan shall govern. By signing this Agreement, the Optionee
confirms that he or she has received a copy of the Plan and has had an
opportunity to review the contents thereof.

<PAGE> 8
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.

APARTMENT INVESTMENT AND
MANAGEMENT COMPANY

By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------

OPTIONEE:

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

<PAGE> 1
EXHIBIT 21.1

APARTMENT INVESTMENT AND MANAGEMENT COMPANY
SUBSIDIARIES

1. 7400 Roosevelt Corp. (Massachusetts)
2. AG A&R Services, Inc. (Delaware)
3. AG Management Company (Delaware)
4. AG Properties, Inc. (Delaware)
5. AIMCO/Beacon Hill, Inc. (Delaware)
6. AIMCO/Blossomtree, Inc. (Delaware)
7. AIMCO/Brant Rock, Inc. (Delaware)
8. AIMCO Calhoun, Inc. (Delaware)
9. AIMCO/Colonnade, Inc. (Delaware)
10. AIMCO/Foothills, Inc. (Delaware)
11. AIMCO/Fox Bay, Inc. (Delaware)
12. AIMCO/Foxtree, Inc. (Delaware)
13. AIMCO/Freedom Place, Inc. (Delaware)
14. AIMCO/Grovetree, Inc. (Delaware)
15. AIMCO/Hazeltree, Inc. (Delaware)
16. AIMCO/Hiddentree, Inc. (Delaware)
17. AIMCO Holdings QRS, Inc. (Delaware)
18. AIMCO/IPT, Inc. (Delaware)
19. AIMCO/Islandtree, Inc. (Delaware)
20. AIMCO LJ Tucson, Inc. (Delaware)
21. AIMCO/Olmos, Inc. (Delaware)
22. AIMCO/Orchidtree, Inc. (Delaware)
23. AIMCO/OTC QRS, Inc. (Delaware)
24. AIMCO/Pine Creek, Inc. (Delaware)
25. AIMCO/Polo Park, Inc. (Delaware)
26. AIMCO Properties Finance Corp. (Delaware)
27. AIMCO/Quailtree, Inc. (Delaware)
28. AIMCO/Rivercrest, Inc. (Delaware)
29. AIMCO/Sand Castles, Inc. (Delaware)
30. AIMCO/Sand Pebble, Inc. (Delaware)
31. AIMCO/Shadetree, Inc. (Delaware)
32. AIMCO/Shadow Lake, Inc. (Delaware)
33. AIMCO/Silktree, Inc. (Delaware)
34. AIMCO Somerset Inc. (Delaware)
35. AIMCO/Surrey Oaks, Inc. (Delaware)
36. AIMCO/Tall Timbers, Inc. (Delaware)
37. AIMCO/The Hills, Inc. (Delaware)
38. AIMCO/Timbertree, Inc. (Delaware)
39. AIMCO/Twinbridge, Inc. (Delaware)
40. AIMCO/Wickertree, Inc. (Delaware)
41. AIMCO/Wildflower, Inc. (Delaware)
42. AIMCO/Windsor Landing, Inc. (Delaware)

<PAGE> 2

43. AIMCO/Woodhollow, Inc. (Delaware)
44. AIMCO/Wydewood, Inc. (Delaware)
45. AIMCO/Yorktree, Inc. (Delaware)
46. AIMCO-GP, Inc. (Delaware)
47. AIMCO-LP, Inc. (Delaware)
48. A.J. One, Inc. (Delaware)
49. A.J. Two, Inc. (Delaware)
50. Ambassador I, Inc. (Delaware)
51. Ambassador II, Inc. (Delaware)
52. Ambassador IV, Inc. (Delaware)
53. Ambassador V, Inc. (Delaware)
54. Ambassador VI, Inc. (Delaware)
55. Ambassador VII, Inc. (Delaware)
56. Ambassador VIII, Inc. (Delaware)
57. Ambassador IX, Inc. (Delaware)
58. Ambassador X, Inc. (Delaware)
59. Ambassador XI, Inc. (Delaware)
60. Ambassador Florida Partners, Inc. (Delaware)
61. AmReal Corporation (South Carolina)
62. AmReal Realty, Inc. (South Carolina)
63. Angeles Acceptance Directives, Inc. (California)
64. Angeles Acceptance Pool, L.P. (California)
65. Angeles Investment Properties, Inc. (California)
66. Angeles Properties, Inc. (California)
67. Angeles Realty Corporation (California)
68. Angeles Realty Corporation II (California)
69. Angeles Securitization Corporation (California)
70. API/AREC Partners, Ltd. (California)
71. Brampton Corp. (Connecticut)
72. Calmark/Fort Collins, Inc. (California)
73. Capital Commercial, Inc. (Maryland)
74. Casa del Mar, Inc. (Florida)
75. CCP/III Village Greens GP, Inc. (South Carolina)
76. CCP/IV Briar Bay GP, Inc. (South Carolina)
77. Century Stoney Greens, Inc. (California)
78. Colony of Springdale Properties, Inc. (Texas)
79. ConCap CCP/IV River's Edge Properties, Inc. (Texas)
80. ConCap CCP/IV Stratford Place Properties, Inc. (Texas)
81. ConCap Equities, Inc. (Delaware)
82. ConCap Holdings, Inc. (Texas)
83. Congress Realty Corp. (Massachusetts)
84. CPF 16 Landings GP, Inc. (South Carolina)
85. CPF XIV/St. Charleston, Inc. (Nevada)
86. CPF XIV/Sun River, Inc. (Arizona)
87. CPF XIV/Torrey Pines, Inc. (Nevada)
88. CPF XV/Lakeside Place, Inc. (Texas)
89. Cragin Service Corporation (Illinois)

<PAGE> 3

90. CRC Congress Realty Corp. (Massachusetts)
91. CRC Scotch Lane Corp. (Massachusetts)
92. CRPTEX, Inc. (Texas)
93. Davidson Diversified Properties, Inc. (Tennessee)
94. Davidson Growth Plus GP Corporation (Delaware)
95. Davidson Properties, Inc. (Tennessee)
96. East Windsor 255, Inc. (Delaware)
97. Fox Capital Management Corporation (California)
98. Fox Strategic Housing Income Partners, Inc. (California)
99. GP Services III, Inc. (Delaware)
100. GP Services IV, Inc. (South Carolina)
101. GP Services IX, Inc. (South Carolina)
102. GP Services V, Inc. (South Carolina)
103. GP Services VI, Inc. (South Carolina)
104. GP Services VII, Inc. (South Carolina)
105. GP Services VIII, Inc. (South Carolina)
106. GP Services XI, Inc. (South Carolina)
107. GP Services XIII, Inc. (South Carolina)
108. GP Services XIV, Inc. (South Carolina)
109. GP Services XV, Inc. (South Carolina)
110. GP Services XVI, Inc. (South Carolina)
111. GP Services XVIII, Inc. (South Carolina)
112. Hamilton House, Inc. (Florida)
113. Heritage Park Investors, Inc. (California)
114. Heritage Park/MRA, Inc. (California)
115. Holbrook Enterprises, Inc. (Illinois)
116. HPI, Ltd. (Bermuda)
117. Hunters Run Properties Corporation (Georgia)
118. IAP GP Corporation (Delaware)
119. IH Inc. (Delaware)
120. InCap Management, Inc. (Texas)
121. Insignia Capital Corporation (Delaware)
122. Insignia Financing I (Delaware)
123. IPGP, Inc. (Delaware)
124. Lucerne Florida Development Corporation (Florida)
125. MAE California, Inc. (California)
126. MAE Delta, Inc. (Delaware)
127. MAE Investments, Inc. (Delaware)
128. MAE Ventures, Inc. (Delaware)
129. MAE-JMA, Inc. (Delaware)
130. MAERIL, Inc. (Delaware)
131. National Corporation for Housing Partnerships (Washington, D.C.)
132. National Corporation for Housing Partnerships/Development Corporation
(Washington, D.C.)
133. National Property Investors, Inc. (Delaware)
134. Neighborhood Reinvestment Resources Corporation (Illinois)
135. NHP Acquisition Corporation (Delaware)

<PAGE> 4

136. NHP Capital Corporation (Virginia)
137. NHP-HDV, Inc. (Delaware)
138. NHP-HDV Two, Inc. (Delaware)
139. NHP-HDV Four, Inc. (Delaware)
140. NHP-HDV Five, Inc. (Delaware)
141. NHP-HDV Six, Inc. (Delaware)
142. NHP-HDV Seven, Inc. (Delaware)
143. NHP-HDV Eight, Inc. (Delaware)
144. NHP-HDV Nine, Inc. (Delaware)
145. NHP-HDV 21, Inc. (Virginia)
146. NHP-HG, Inc. (Virginia)
147. NHP-HG III, Inc. (Virginia)
148. NHP-HG Four, Inc. (Virginia)
149. NHP-HG Five, Inc. (Virginia)
150. NHP-HG Ten, Inc. (Delaware)
151. NHP-HG Eleven, Inc. (Delaware)
152. NHP-HG Twelve, Inc. (Delaware)
153. NHP-HG Fourteen, Inc. (Delaware)
154. NHP-HS, Inc. (Delaware)
155. NHP-HS Two, Inc. (Delaware)
156. NHP-HS Five, Inc. (Delaware)
157. NHP-HS Six, Inc. (Delaware)
158. NHP Joint Ventures, Inc. (Delaware)
159. NHP Multi-Family Capital Corporation (Washington, D.C.)
160. NHP Real Estate Corporation (Delaware)
161. NHP Real Estate Securities, Inc. (Washington, D.C.)
162. NHP Ridgewood, Inc. (Delaware)
163. NHP Servicing, Inc. (Virginia)
164. NPI Equity Investments II, Inc. (Florida)
165. NPI Equity Investments, Inc. (Florida)
166. NPI III Pinetree, Inc. (North Carolina)
167. Pebblepoint 55, Inc. (Delaware)
168. Plainview GP, Inc. (Delaware)
169. Pleasant Hill 287, Inc. (Delaware)
170. PRA, Inc. (Georgia)
171. Rescorp Development, Inc. (Illinois)
172. Ridge Carlton Corp. (Massachusetts)
173. SAHF Funding Corp. (Delaware)
174. Scotch Lane Corp. (Massachusetts)
175. SF General, Inc. (Delaware)
176. Shelter Realty Corporation (South Carolina)
177. Shelter Realty II Corporation (South Carolina)
178. Shelter Realty III Corporation (South Carolina)
179. Shelter Realty IV Corporation (South Carolina)
180. Shelter Realty V Corporation (South Carolina)
181. Shelter Realty VI Corporation (South Carolina)
182. Shelter Realty VII Corporation (South Carolina)

<PAGE> 5

183. Sturbrook Investors, Inc. (California)
184. Summerwalk GP, Inc. (South Carolina)
185. Top of the World 735, Inc. (Delaware)
186. U.S. Realty I Corporation (South Carolina)
187. United Investors Real Estate, Inc. (Delaware)
188. Wilbur and Company, Inc. (Delaware)
189. AIMCO/NHP Holdings, Inc. (Delaware)
190. AIMCO/NHP Properties, Inc. (Delaware)
191. NHP A&R Services, Inc. (Virginia)
192. NHP Management Company (Washington, D.C.)
193. Property Asset Management Services, Inc. (Delaware)
194. AG A&R Services, L.L.C. (Delaware)
195. AG Management, L.L.C. (Delaware)
196. AG Properties, L.L.C. (Delaware)
197. AIMCO of Florida, Inc. (Florida)
198. Apartment CCG 17, L.P. (California)
199. Apartment CCG 17, L.L.C. (South Carolina)
200. Apartment CCG 17, Inc. (California)
201. Apartment CRK 17, L.P. (California)
202. Apartment LDG 17, Inc. (California)
203. Apartment Lodge 17, L.L.C. (South Carolina)
204. Apartment Lodge 17, L.P. (California)
205. Aptek Maintenance Services Company LLC (Delaware)
206. Aptek Management Company LLC (Delaware)
207. Argus Land Company, Inc. (Alabama)
208. Arizona Development Partners (Massachusetts)
209. Aspen Ridge Properties, Inc. (Texas)
210. Brighton Meadows Associates (Indiana)
211. Broad Street Management, Inc. (Ohio)
212. Calmark Heritage Park, L.P. (California)
213. Calmark Heritage Park III, L.P. (California)
214. Canyon Terrace Inc. (Delaware)
215. Carriage House Apartments Limited Partnership (Virginia)
216. CCP/III Mountain Plaza Properties, Inc. (Texas)
217. Century 23 Sunnymead, Inc. (California)
218. Century HillCreste Apartment Investors, L.P. (California)
219. Century Summerhill, Inc. (California)
220. Century Sunrunner 19, Inc. (California)
221. CHA Properties, Inc. (Delaware)
222. Coastal Commons Limited Partnership (South Carolina)
223. Compleat Resource Group, Inc. (Delaware)
224. ConCap CCP/III Properties, Inc. (Texas)
225. ConCap CCP/IV Apartment Properties, Inc. (Texas)
226. ConCap CCP/IV Citadel Properties, Inc. (Texas)
227. ConCap CCP/IV Properties, Inc. (Texas)
228. ConCap CCP/IV Residential, Inc. (Texas)
229. ConCap CCP/V Properties, Inc. (Texas)

<PAGE> 6

230. ConCap MBRF Properties, Inc. (Texas)
231. Conifer Medford (Puerto Rico)
232. Continental Plaza Limited Partnership (Illinois)
233. Continental Plaza Associates Limited Partnership (Illinois)
234. Coventry Properties, Inc. (Texas)
235. Creekside Inc. (Delaware)
236. DalCap Management, Inc. (Texas)
237. DBL Properties Corporation (New York)
238. Direct Access Association, Inc. (Tennessee)
239. Drexel Burnham Lambert Real Estate Associates (New York)
240. Dunlop Tobacco Associates Limited Partnership (Maryland)
241. Evergreen Club Corporation (Massachusetts)
242. First Atlantic Management Corporation (Delaware)
243. First Piedmont Mortgage, Inc. (South Carolina)
244. First Winthrop Corporation (Delaware)
245. Fox Assignor, Inc. (California)
246. Franklin Mountain Run Associates Liquidating Trust (Pennsylvania)
247. Franklin Partnership Liquidating Trust (Pennsylvania)
248. Galleria Park Associates Limited Partnership (Massachusetts)
249. Glenbrook Corporation (Massachusetts)
250. GP Real Estate Services II Inc. (Delaware)
251. GP Services II, Inc. (South Carolina)
252. GP Real Estate Services II Inc. (Delaware)
253. GP Services II-B, Inc. (Delaware)
254. Greenfair-DCW Ltd (California)
255. Guilford Company, Inc. (Alabama)
256. Heritage Park Inc. (Delaware)
257. Heritage Park II Inc. (Delaware)
258. HHP, L.P. (Delaware)
259. HillCreste Properties Inc. (Delaware)
260. Historic Properties, Inc. (Delaware)
261. Holliday Associates Limited Partnership (Washington, D.C.)
262. Hollidaysburg Limited Partnership (Pennsylvania)
263. Housing Programs Corp. II (Delaware)
264. Housing Programs Ltd. (California)
265. IFG-SCN Corporation (Delaware)
266. IHMG of Alabama, Inc. (Alabama)
267. IMH, Inc. (Delaware)
268. Insignia Allegiance Management, Inc. (Delaware)
269. Insignia CCP III Acquisition, LLC (Delaware)
270. Insignia Hospitality Management Group, Inc. (Delaware)
271. Insignia Related, Inc. (Delaware)
272. Insignia Related, L.P. (Delaware)
273. Insignia Residential Group, L.P. (Delaware)
274. Insignia Residential Group of Alabama, Inc. (Delaware)
275. Insignia Residential Group of California, Inc. (Delaware)
276. Insignia Residential Group of Colorado, Inc. (Colorado)

<PAGE> 7

277. Insignia Residential Group of Texas, Inc. (Delaware)
278. Insignia Residential Management, Inc. (Delaware)
279. IPT I LLC (Delaware)
280. ISPMC, Inc. (Delaware)
281. ISTC Corporation (Delaware)
282. Ivanhoe Corporation (Massachusetts)
283. Kennedy Boulevard I, Inc. (Pennsylvania)
284. Kennedy Boulevard II, Inc. (Pennsylvania)
285. Kennedy Boulevard III, Inc. (Pennsylvania)
286. Lifton/MAQ S.E. Investments II, Inc. (Georgia)
287. Louisville Apartment Limited Partnership (Texas)
288. Lytle Place Community Urban Redevelopment Corp. (Ohio)
289. MAE-SPI, L.P. (Delaware)
290. Maine Maintenance Corporation (Delaware)
291. MAQ/Lifton Acquisition Corp. (Florida)
292. Market Ventures, L.L.C. (Delaware)
293. Mayer Canyon Terrace (California)
294. Mayer Creekside (California)
295. Mayer Warner Center Ltd. (California)
296. Minneapolis Associates II Limited Partnership (Massachusetts)
297. NHP Asset Management Services, Inc. (Virginia)
298. NHP Cash Management Services, Inc. (Virginia)
299. NHP/Congress Management Limited Partnership (Virginia)
300. NHP Equity Services, Inc. (Virginia)
301. NHP Financial Services, Ltd. (Delaware)
302. NHP Florida Management Company (Florida)
303. NHP Maintenance Services Company (Delaware)
304. NHP/PRC Management Company LLC (Delaware)
305. NHP Puerto Rico Management Company (Delaware)
306. NHP Southeast Partners, L.P. (Delaware)
307. NHP Southwark HA, Inc. (Virginia)
308. NHP Texas Management Company (Texas)
309. NHP-HDV 20, Inc. (Virginia)
310. NHP-HDV Eighteen, Inc. (Delaware)
311. NHP-HDV Eleven, Inc. (Delaware)
312. NHP-HDV Fifteen, Inc. (Virginia)
313. NHP-HDV Fourteen, Inc. (Delaware)
314. NHP-HDV Nineteen, Inc. (Delaware)
315. NHP-HDV Seventeen, Inc. (Delaware)
316. NHP-HDV Sixteen, Inc. (Delaware)
317. NHP-HDV Ten, Inc. (Delaware)
318. NHP-HDV Three, Inc. (Delaware)
319. NHP-HDV Twelve, Inc. (Delaware)
320. NHP-HG 15, Inc. (Virginia)
321. NHP-HG 16, Inc. (Virginia)
322. NHP-HG 17, Inc. (Virginia)
323. NHP-HG Six, Inc. (Virginia)

<PAGE> 8

324. NHP-HS Four, Inc. (Delaware)
325. NHP-HS Three, Inc. (Delaware)
326. NPI Property Management Corporation (Florida)
327. NPI Realty Advisors, Inc. (Florida)
328. NPI Realty Management Corp. (Florida)
329. Orchard Park Apartments, L.P. (South Carolina)
330. PAM Consolidated Assurance Company, Ltd. (Bermuda)
331. Park Towne Place Associates Limited Partnership (Delaware)
332. Playa Blanca Inc. (Delaware)
333. Playa Blanca, Inc. (California)
334. Preferred Home Health, Inc. (Florida)
335. Preferred Home Health Limited Partnership (Florida)
336. Property Asset Brokerage of Florida (Florida)
337. Property Services Group, Inc. (Washington, D.C.)
338. PTP Properties, Inc. (Delaware)
339. Raintree GP Inc. (Delaware)
340. Raintree Meadows (California)
341. Real Estate Equity Partners, Inc. (Delaware)
342. RealMark, Inc. (South Carolina)
343. Rescorp Realty, Inc. (Illinois)
344. Residents Direct Access Association, Inc. (Missouri)
345. Rivercrest Apartments, L.P. (South Carolina)
346. The Risk Specialist Group, Inc. (Washington, D.C.)
347. Secured Income, L.P. (Delaware)
348. Security Management Inc. (Washington)
349. Security Properties (Washington)
350. Security Properties 73 (Washington)
351. Security Properties 74 (Washington )
352. Security Properties 74 II (Washington)
353. Security Properties 74 III (Washington )
354. Security Properties 74A (Washington)
355. Security Properties 75 (Washington )
356. Security Properties 76 (Washington)
357. Security Properties 77 (Washington )
358. Security Properties 77A (Washington )
359. Security Properties 78 (Washington)
360. Security Properties 78A (Washington)
361. Security Properties 79 (Washington )
362. Security Properties 79 II (Washington )
363. Security Properties 80 (Washington)
364. Security Properties 81 (Washington)
365. Security Properties 81A (Washington)
366. Six Winthrop Properties, Inc. (Delaware)
367. Southwest Parkway, Ltd. (Texas)
368. SP Properties 1982 (Washington)
369. SP Properties 1983 (Washington)
370. SP Properties 1983 Two (Washington)

<PAGE> 9

371. SP Properties 1984 (Washington)
372. St. Joseph Limited Partnership (Maryland)
373. Standpoint Vista Limited Partnership (Maryland)
374. TAHF Funding Corp. (Delaware)
375. TEB Municipal Trust II (Delaware)
376. Ten Winthrop Properties, Inc. (Maryland)
377. The Villas, A Limited Partnership (Texas)
378. USS Depositary, Inc. (South Carolina)
379. Vincennes Associates (Illinois)
380. WAI Associates Limited Partnership (Texas)
381. WAI Properties, Inc. (Texas)
382. Warner Center Inc. (Delaware)
383. Warner Center/MGP Inc. (Delaware)
384. WFC Realty Co., Inc. (Massachusetts)
385. WFC Realty Saugus, Inc. (Massachusetts)
386. Wilder Richman Historic Properties II, L.P. (Delaware)
387. Wilder Richman Historic Properties, L.P. (Delaware)
388. Winthrop Apartment Investors 2 Limited Partnership (Maryland)
389. Winthrop Financial Associates (Maryland)
390. Winthrop Financial Co., Inc. (Massachusetts)
391. Winthrop Metro Equities Corporation (Delaware)
392. Winthrop Northeast Properties, Inc. (Massachusetts)
393. Winthrop Petersburg Co., Inc. (Maryland)
394. Creekside Industrial Associates, Inc. (New York)
395. Monroeville Development Corporation (Massachusetts)
396. ISLP Limited Partnership (Delaware)
397. Partners Liquidating Trust (Delaware)
398. Stratford Village Realty Trust (Massachusetts)
399. 1133 Fifteenth Street Fourth Associates (Maryland)
400. 1133 Fifteenth Street Associates (Washington, D.C.)
401. 2900 Van Ness Associates (Washington, D.C.)
402. 7400 Roosevelt Investors (Pennsylvania)
403. Advanced Affordable Mill, Ltd. (Florida)
404. AG Services, L.P. (Delaware)
405. AIMCO Anchorage, L.P. (Delaware)
406. AIMCO Arbor Station, L.P. (Delaware)
407. AIMCO Arbor Station Two, L.P. (Delaware)
408. AIMCO Atriums of Plantation L.P. (Delaware)
409. AIMCO Bay Club II, L.P. (Delaware)
410. AIMCO Bay Club, L.P. (Delaware)
411. AIMCO/Beacon Hill, L.L.C. (Delaware)
412. AIMCO/Beacon Hill, L.P. (Delaware)
413. AIMCO/Blossomtree L.L.C. (Delaware)
414. AIMCO/Blossomtree L.P. (Delaware)
415. AIMCO/Bluffs, L.L.C. (Delaware)
416. AIMCO/Boardwalk, L.P. (Delaware)
417. AIMCO/Boardwalk Finance, L.P. (Delaware)

<PAGE> 10

418. AIMCO/Brandywine, L.P. (Delaware)
419. AIMCO/Brant Rock, L.L.C. (Delaware)
420. AIMCO/Brant Rock, L.P. (Delaware)
421. AIMCO Breakers, L.P. (Delaware)
422. AIMCO Bridgewater, L.P. (Delaware)
423. AIMCO Brookside, L.L.C. (Delaware)
424. AIMCO Brookside/Tustin, L.L.C. (Delaware)
425. AIMCO Calhoun, L.L.C. (Delaware)
426. AIMCO Casa Anita, L.P. (Delaware)
427. AIMCO Cedar Creek, L.P. (Delaware)
428. AIMCO Chesapeake, L.P. (Delaware)
429. AIMCO Citrus Grove, L.P. (Delaware)
430. AIMCO Citrus Sunset, L.L.C. (Delaware)
431. AIMCO Cobble Creek, L.P. (Delaware)
432. AIMCO/Colonnade, L.L.C. (Delaware)
433. AIMCO/Colonnade, L.P. (Delaware)
434. AIMCO Colony, L.P. (Delaware)
435. AIMCO Copperfield, L.P. (Delaware)
436. AIMCO Crossings at Belle, L.P. (Delaware)
437. AIMCO Crows Nest, L.P. (Delaware)
438. AIMCO Dolphin's Landing, L.P. (Delaware)
439. AIMCO/Easton Falls, L.P. (Delaware)
440. AIMCO Elm Creek, L.P. (Delaware)
441. AIMCO Fieldcrest, L.P. (Delaware)
442. AIMCO Fisherman's Landing, L.P. (Delaware)
443. AIMCO Fondren Court, L.P. (Delaware)
444. AIMCO/Foothills, L.P. (Delaware)
445. AIMCO/Foothills, L.L.C. (Delaware)
446. AIMCO/Fox Bay, L.P. (Delaware)
447. AIMCO/Fox Bay, L.L.C. (Delaware)
448. AIMCO Foxchase, L.P. (Delaware)
449. AIMCO/Foxtree, L.L.C. (Delaware)
450. AIMCO/Foxtree, L.P. (Delaware)
451. AIMCO/Freedom Place, L.L.C. (Delaware)
452. AIMCO/Freedom Place, L.P. (Delaware)
453. AIMCO Galleria Office, L.P. (Delaware)
454. AIMCO Group, L.P. (Delaware)
455. AIMCO/Grovetree, L.L.C. (Delaware)
456. AIMCO/Grovetree, L.P. (Delaware)
457. AIMCO Hampton Hill, L.P. (Delaware)
458. AIMCO Hanover Square/DIP, L.L.C. (Delaware)
459. AIMCO Hastings Green, L.P. (Delaware)
460. AIMCO Hastings Place, L.P. (Delaware)
461. AIMCO/Hazeltree, L.P. (Delaware)
462. AIMCO/Hazeltree, L.L.C. (Delaware)
463. AIMCO/Hiddentree, L.L.C. (Delaware)
464. AIMCO/Hiddentree, L.P. (Delaware)

<PAGE> 11

465. AIMCO/HIL, L.L.C. (Delaware)
466. AIMCO Holdings, L.P. (Delaware)
467. AIMCO Hunters Glen, L.P. (Delaware)
468. AIMCO/Islandtree, L.P. (Delaware)
469. AIMCO/Islandtree, L.L.C. (Delaware)
470. AIMCO Lake Castleton Arms, L.L.C. (Delaware)
471. AIMCO Lakehaven, L.P. (Delaware)
472. AIMCO Lakehaven Two, L.P. (Delaware)
473. AIMCO Landmark, L.P. (Delaware)
474. AIMCO LaValle, L.L.C. (Delaware)
475. AIMCO LJ Tucson, L.P. (Delaware)
476. AIMCO Los Arboles, L.P. (Delaware)
477. AIMCO LT, L.P. (Delaware)
478. AIMCO/Montecito, L.P. (Delaware)
479. AIMCO Mountain View, L.L.C. (Delaware)
480. AIMCO/NHP Partners, L.P. (Delaware)
481. AIMCO Oak Falls, L.P. (Delaware)
482. AIMCO Old Farm, L.L.C. (Delaware)
483. AIMCO/Olmos, L.L.C. (Delaware)
484. AIMCO/Olmos, L.P. (Delaware)
485. AIMCO/Orchidtree, L.L.C. (Delaware)
486. AIMCO/Orchidtree, L.P. (Delaware)
487. AIMCO/OTC, L.L.C. (Delaware)
488. AIMCO/OTC, L.P. (Delaware)
489. AIMCO/PAM Properties, L.P. (Delaware)
490. AIMCO Park at Cedar Lawn, L.P. (Delaware)
491. AIMCO Park Townhomes, L.P. (Delaware)
492. AIMCO Park Colony, L.L.C. (Delaware)
493. AIMCO/Penn Square, L.L.C. (Delaware)
494. AIMCO Peppermill Place, L.P. (Delaware)
495. AIMCO/Pine Creek, L.P. (Delaware)
496. AIMCO/Pine Creek, L.L.C. (Delaware)
497. AIMCO Pine Shadows, L.L.C. (Delaware)
498. AIMCO Pinebrook, L.P. (Delaware)
499. AIMCO Pines, L.P. (Delaware)
500. AIMCO Placid Lake, L.P. (Delaware)
501. AIMCO/Polo Park, L.L.C. (Delaware)
502. AIMCO/Polo Park, L.P. (Delaware)
503. AIMCO Properties, L.P. (Delaware)
504. AIMCO Properties Finance Partnership, L.P. (Delaware)
505. AIMCO Properties Holdings, L.L.C. (Delaware)
506. AIMCO/Quailtree, L.L.C. (Delaware)
507. AIMCO/Quailtree, L.P. (Delaware)
508. AIMCO/RALS, L.P. (Delaware)
509. AIMCO Recovery Fund, L.P. (Delaware)
510. AIMCO Rio Cancion, L.P. (Delaware)
511. AIMCO/Rivercrest, L.P. (Delaware)

<PAGE> 12

512. AIMCO/Rivercrest, L.L.C. (Delaware)
513. AIMCO Royal Gardens, L.L.C. (Delaware)
514. AIMCO/SA, L.L.C. (Delaware)
515. AIMCO San Marina, L.P. (Delaware)
516. AIMCO/Sand Castles, L.P. (Delaware)
517. AIMCO/Sand Pebble, L.L.C. (Delaware)
518. AIMCO/Sand Pebble, L.P. (Delaware)
519. AIMCO/Sand Castles, L.L.C. (Delaware)
520. AIMCO Sandalwood, L.P. (Delaware)
521. AIMCO Sandpiper, L.P. (Delaware)
522. AIMCO Seaside Point, L.P. (Delaware)
523. AIMCO/Shadetree, L.P. (Delaware)
524. AIMCO/Shadetree, L.L.C. (Delaware)
525. AIMCO/Shadow Lake, L.P. (Delaware)
526. AIMCO/Shadow Lake, L.L.C. (Delaware)
527. AIMCO Signature Point, L.P. (Delaware)
528. AIMCO/Silktree, L.P. (Delaware)
529. AIMCO/Silktree, L.L.C. (Delaware)
530. AIMCO Steeplechase, L.P. (Delaware)
531. AIMCO/Stonegate, L.P. (Delaware)
532. AIMCO Sunbury, L.P. (Delaware)
533. AIMCO Sundown, L.P. (Delaware)
534. AIMCO Sunset Village, L.L.C. (Delaware)
535. AIMCO Sunset Escondido, L.L.C. (Delaware)
536. AIMCO/Surrey Oaks, L.L.C. (Delaware)
537. AIMCO/Surrey Oaks, L.P. (Delaware)
538. AIMCO/Tall Timbers, L.P. (Delaware)
539. AIMCO/Tall Timbers, L.L.C. (Delaware)
540. AIMCO/Teal Pointe, L.P. (Delaware)
541. AIMCO Terrace Royale, L.L.C. (Delaware)
542. AIMCO/The Hills, L.P. (Delaware)
543. AIMCO/The Hills, L.L.C. (Delaware)
544. AIMCO Timbermill, L.P. (Delaware)
545. AIMCO/Timbertree, L.P. (Delaware)
546. AIMCO/Timbertree, L.L.C. (Delaware)
547. AIMCO Township at Highlands, L.P. (Delaware)
548. AIMCO Tustin, L.P. (Delaware)
549. AIMCO/Twinbridge, L.P. (Delaware)
550. AIMCO/Twinbridge, L.L.C. (Delaware)
551. AIMCO UT, L.P. (Delaware)
552. AIMCO Villa Del Sol, L.L.C. (Delaware)
553. AIMCO/Villa Ladera, L.P. (Delaware)
554. AIMCO Villa La Paz, L.P. (Delaware)
555. AIMCO Walnut Springs, L.P. (Delaware)
556. AIMCO Weatherly, L.P. (Delaware)
557. AIMCO West Trails, L.P. (Delaware)
558. AIMCO Westchase Midrise, L.P. (Delaware)

<PAGE> 13

559. AIMCO Whispering Pines, L.L.C. (Delaware)
560. AIMCO/Wickertree, L.P. (Delaware)
561. AIMCO/Wickertree, L.L.C. (Delaware)
562. AIMCO/Wildflower, L.P. (Delaware)
563. AIMCO/Wildflower, L.L.C. (Delaware)
564. AIMCO/Williams Cove, L.P. (Delaware)
565. AIMCO Wimbledon Square, L.L.C. (Delaware)
566. AIMCO/Windsor Landing, L.L.C. (Delaware)
567. AIMCO/Windsor Landing, L.P. (Delaware)
568. AIMCO/Woodhollow, L.P. (Delaware)
569. AIMCO/Woodhollow, L.L.C. (Delaware)
570. AIMCO/Woodlands-Tyler, L.P. (Delaware)
571. AIMCO Woodway Offices, L.P. (Delaware)
572. AIMCO/Wydewood, L.P. (Delaware)
573. AIMCO/Wydewood, L.L.C. (Delaware)
574. AIMCO/Yorktree, L.L.C. (Delaware)
575. AIMCO/Yorktree, L.P. (Delaware)
576. AIP II Georgetown GP, L.L.C. (South Carolina)
577. AIP II Georgetown, L.L.C. (Massachusetts)
578. AIP IV GP Limited Partnership (South Carolina)
579. AIP IV GP Limited Partnership (South Carolina)
580. AIV Properties, L.P. (Delaware)
581. AJ One, L.P. (Delaware)
582. AJ Two, L.P. (Delaware)
583. Ambassador Apartments, L.P. (Delaware)
584. Ambassador CRM Florida Partners Limited Partnership (Delaware)
585. Ambassador Florida Partners Limited Partnership (Delaware)
586. Ambassador I, L.P. (Illinois)
587. Ambassador II, L.P. (Delaware)
588. Ambassador III, L.P. (Delaware)
589. Ambassador IV, L.P. (Delaware)
590. Ambassador IX, L.P. (Delaware)
591. Ambassador Texas Partners, L.P. (Delaware)
592. Ambassador V, L.P. (Delaware)
593. Ambassador VI, L.P. (Delaware)
594. Ambassador VII, L.P. (Delaware)
595. Ambassador VIII, L.P. (Delaware)
596. Ambassador X, L.P. (Delaware)
597. Ambassador XI, L.P. (Delaware)
598. Anchorage Partners (Texas)
599. Anderson Mill Associates (Illinois)
600. Angeles Income Properties, Ltd. II (California)
601. Angeles Income Properties, Ltd. III (California)
602. Angeles Income Properties Ltd. IV (California)
603. Angeles Income Properties Ltd. V (California)
604. Angeles Income Properties, Ltd. 6 (California)
605. Angeles Opportunity Properties, Ltd. (California)

<PAGE> 14

606. Angeles Park Communities, Ltd. (California)
607. Angeles Partners VII (California)
608. Angeles Partners VIII (California)
609. Angeles Partners IX (California)
610. Angeles Partners X (California)
611. Angeles Partners XI (California)
612. Angeles Partners XII (California)
613. Angeles Partners XIV (California)
614. Angeles Partners XV (California)
615. Angeles Partners 16 (California)
616. AP XII Associates GP, L.L.C. (South Carolina)
617. Ashland Town Square-REO, L.P. (Texas)
618. Autumn Chase-REO, L.P. (Texas)
619. Balcor/Sportvest-II (Illinois)
620. Barrington Park-REO, L.P. (Texas)
621. Boca West Shopping Center Associates, Ltd. (Florida)
622. Boynton Sandpiper Limited Partnership (Florida)
623. Braesview Partnership (Texas)
624. Brampton Associates Limited Partnership (Connecticut)
625. Brandemere-REO Assoc., L.P. (Texas)
626. Brandon Lake, Ltd. (Florida)
627. Bridgewater Partners, Ltd. (Texas)
628. Broad River Properties, L.L.C. (Delaware)
629. Brook Run Associates, L. P. (Illinois)
630. Brookdale Lakes Partnership (Illinois)
631. Buccaneer Trace, Limited Partnership (South Carolina)
632. Burgundy Court Associates, L.P. (Delaware)
633. Cabell Associates of Lakeview (Virginia)
634. Calmark Investors (California)
635. Calverton Construction Co. Limited Partnership (Maryland)
636. Cape Cod Partnership (Texas)
637. Casa del Mar Associates Limited Partnership (Florida)
638. Castle Rock Joint Venture (Texas)
639. Catawba Club Associates, L.P. (Delaware)
640. CB L-2 B Associates (Florida)
641. CB Associates (Florida)
642. CB L-2 C Associates (Florida)
643. CCP VI Springdale GP, LLC (South Carolina)
644. CCP V GP Limited Partnership (South Carolina)
645. CCP V Fifty-One GP LLC (South Carolina)
646. CCP V Sutton Place GP LLC (South Carolina)
647. Cedar Creek Partners, Ltd. (Alabama)
648. Century St. Charleston, L.P. (Nevada)
649. Century Stoney Greens, L.P. (California)
650. Century Sun River, L.P. (Arizona)
651. Century Properties Fund XI (California)
652. Century Properties Growth Fund XXII (California)

<PAGE> 15

653. Century Torrey Pines, L.P. (Nevada)
654. Century Pension Income Fund XXIII (California)
655. Century Pension Income Fund XXIV (California)
656. Century Properties Fund XX (California)
657. Century Properties Fund XIX (California)
658. Century 23 Sunnymead, L.P. (California)
659. Century Properties Fund XVI (California)
660. Century Properties Fund XIV (California)
661. Century Properties Fund XVII (California)
662. Century Properties Fund XVIII (California)
663. Century Properties Fund XV (California)
664. Chapel Hill, Limited (Delaware)
665. Chateau Gardens L.P. (California)
666. Chelsea Place, Limited (Tennessee)
667. Chestnut Hill Associates Limited Partnership (Delaware)
668. Church Street Associates (Illinois)
669. Clear Lake Land Partners, Ltd. (Texas)
670. Cloverleaf Farms Limited Partnership (South Carolina)
671. Colony-REO, L.P. (Texas)
672. Columbus Associates, Ltd. (Tennessee)
673. Congress Realty Companies Limited Partnership (Massachusetts)
674. Congress Management Company Limited Partnership (Massachusetts)
675. Connecticut Colony Associates (Georgia)
676. Consolidated Capital Institutional Properties/3 (California)
677. Consolidated Capital Equity Partners / Two, L.P. (California)
678. Consolidated Capital Properties III (California)
679. Consolidated Capital Equity Partners, L.P. (California)
680. Consolidated Capital Properties IV (California)
681. Consolidated Capital Properties V (California)
682. Consolidated Capital Growth Fund (California)
683. Consolidated Capital Institutional Properties (California)
684. Consolidated Capital Institutional Properties/2 (California)
685. Consolidated Capital Properties VI (California)
686. Cooper River Properties, L.L.C. (California)
687. Copper Chase Partners (Illinois)
688. Copper Chase Associates (Illinois)
689. Copperfield Partners, Ltd. (Texas)
690. Country Lake Associates Two Limited Partnership (Illinois)
691. Coventry Square Partners (Texas)
692. CPF 16 Woods of Inverness GP, L.L.C. (South Carolina)
693. CRA Investors, Ltd. (Texas)
694. Creekside Industrial Associates (California)
695. Creekside Partners (New York)
696. Cross Creek Limited Partnership (Georgia)
697. Crows Nest Partners, Ltd. (Texas)
698. Cypress Landing Associates (Illinois)
699. Cypress Landing Limited Partnership (Illinois)

<PAGE> 16

700. Davidson Income GP Limited Partnership (Delaware)
701. Davidson GP, L.L.C. (South Carolina)
702. Davidson Diversified Real Estate I, L.P. (Delaware)
703. Davidson Diversified Real Estate II, L.P. (Delaware)
704. Davidson Diversified Real Estate Investors III GP, L.P. (Delaware)
705. Davidson Diversified Real Estate Investors III, L.P. (Delaware)
706. Davidson Growth Plus, L.P. (Delaware)
707. Davidson Income Real Estate, L.P. (Delaware)
708. DFW Apartment Investors Limited Partnership (Delaware)
709. DFW Residential Investors Limited Partnership (Delaware)
710. Discovery Limited Partnership (Massachusetts)
711. Drexel Burnham Lambert Real Estate Associates II (New York)
712. Drexel Burnham Lambert Real Estate Associates III (New York)
713. Eagle's Nest Partnership (Texas)
714. East Windsor 255 Limited Partnership (Delaware)
715. Eastgreen, Ltd. (Tennessee)
716. Easton Terrace II Associates Ltd Partnership (Delaware)
717. Elm Creek Limited Partnership (Illinois)
718. English Manor Joint Venture (Texas)
719. English Manor Partners (Texas)
720. Everest Investors 5, L.L.C. (California)
721. Evergreen Club Limited Partnership (Massachusetts)
722. Fairfax Associates (Virginia)
723. First Alexandria Associates (Virginia)
724. Fisherman's Wharf Partners (Texas)
725. Fisherman's Landing Apartments Limited Partnership (Florida)
726. FMI Limited Partnership (Pennsylvania)
727. Fondren Court Partners, Ltd. (Texas)
728. Fox Growth Partners (California)
729. Fox Partners IX (California )
730. Fox Partners V (California)
731. Fox Partners VI (California)
732. Fox Realty Partners '77, Ltd. (California)
733. Fox Partners VII (California)
734. Fox Partners IX (California)
735. Fox Partners IV (California)
736. Fox Partners III (California)
737. Fox Partners II (California)
738. Fox Partners (California)
739. Fox Realty Investors (California)
740. Fox Strategic Housing Income Partners (California)
741. Foxfire Associates, a South Carolina Limited Partnership (South
Carolina)
742. Franklin Park Ltd Partnership (Pennsylvania)
743. Franklin Chandler Associates (Pennsylvania)
744. Franklin Chapel Hill Associates (Pennsylvania)
745. Franklin Eagle Rock Associates (Pennsylvania)
746. Franklin Housing Associates (Pennsylvania)

<PAGE> 17

747. Franklin Huntsville Associates (Pennsylvania)
748. Franklin New York Avenue Associates (Pennsylvania)
749. Franklin Woods Associates (Pennsylvania)
750. Franklin Pheasant Ridge Associates (Pennsylvania)
751. Franklin Pine Ridge Associates (Pennsylvania)
752. Franklin Ridgewood Associates (Pennsylvania)
753. Franklin Victoria Associates I (Texas)
754. FRP Limited Partnership (Pennsylvania)
755. G.P. Municipal Holdings, LLC (Delaware)
756. Galleria Office Partners, Ltd. (Texas)
757. Georgetown of Columbus Associates, L.P. (Delaware)
758. Georgetown AIP II, Ltd. (Massachusetts)
759. Glenbrook Limited Partnership (Massachusetts)
760. GP Services XIX, Inc. (South Carolina)
761. GP Services XVII, Inc. (South Carolina)
762. Grandland Realty Associates (Georgia)
763. Greater Hartford Associates (Connecticut)
764. Greentree Associates (Illinois)
765. Grosvenor House Associates Limited Partnership (Massachusetts)
766. Growth Hotel Investors II (California)
767. Growth Hotel Investors (California)
768. GSSW-REO Confederate Ridge, L.P. (Mississippi)
769. GSSW-REO Providence Place, L.P. (Texas)
770. GSSW-REO Pebblecreek, L.P. (Texas)
771. GSSW-REO Dallas, L.P. (Texas)
772. GSSW-REO Limited Partnership II (South Carolina)
773. GSSW-REO Timberline, L.P. (Texas)
774. GSSW-Woods on the Fairway, L.P. (Texas)
775. Gulf Coast Partners, Ltd. (Alabama)
776. Gulfgate Partners, Ltd. (Texas)
777. Hamilton House Associates (Florida)
778. Hampton Hill Partners (Texas)
779. Harbor Landing AP XI, LP (South Carolina)
780. Hastings Green Partners, Ltd. (Texas)
781. Hastings Place Partners (Texas)
782. HCW General Partners, Ltd. (Texas)
783. HCW Pension Real Estate Fund Limited Partnership (Massachusetts)
784. Heather Associates (Illinois)
785. Heatherwood-REO, L.P. (Texas)
786. Heritage Village Limited Partnership (Connecticut)
787. Highland Park Partners (Illinois)
788. Highridge Associates, L.P. (Delaware)
789. Hollywood Gardens (Washington D.C.)
790. HomeCorp Investments, Ltd. (Alabama)
791. Hospitality Pensacola Partners, Ltd. (California)
792. Hospitality Partners II (California)
793. Hunter's Glen Phase I GP, LLC (South Carolina)

<PAGE> 18

794. Hunter's Glen Phase V GP, LLC (South Carolina)
795. Hunters Run Partners Ltd. (Georgia)
796. Insignia Properties, L.P. (Delaware)
797. Investors First-Staged Equity, L.P. (Delaware)
798. Investors First-Staged Equity, L.P. II (Delaware)
799. IPLP Midrise, L.L.C. (Delaware)
800. IPLP Acquisition I, L.L.C. (Delaware)
801. Ivanhoe Associates Limited Partnership (Pennsylvania)
802. J.W. English, Fondren Court Partners (Texas)
803. J.W. English, Camelot Apartments (Texas)
804. J.W. English Swiss Village Partners, Ltd. (Texas)
805. Jacques-Miller Associates (Tennessee)
806. JMA Equities, L.P. (Delaware)
807. Johnstown/Consolidated Income Partners / 2 (California)
808. Johnstown/Consolidated Income Partners (California)
809. Jupiter - I, L.P. (Delaware)
810. Jupiter - II, L.P. (Delaware)
811. Kendall Townhome Investors, Ltd. (Florida)
812. Kennedy Boulevard Associates I, L.P. (Pennsylvania)
813. Kennedy Boulevard Associates II, L.P. (Pennsylvania)
814. Kennedy Boulevard Associates III, L.P. (Pennsylvania)
815. Kennedy Boulevard Associates IV, L.P. (Pennsylvania)
816. Key Parkway West Associates (Massachusetts)
817. La Colina Partners, Ltd. (California)
818. Lafayette Square, Ltd. (Tennessee)
819. LaJolla Partnership (Texas)
820. Lake Crossing (Georgia)
821. Lake Eden Associates, L.P. (Delaware)
822. Lake Avenue Partners, Ltd. (California)
823. Lakehaven Associates One (Illinois)
824. Lakehaven Associates Two (Illinois)
825. Lakeland East Limited Partnership (Connecticut)
826. Lakeside Village, Limited Partnership (Tennessee)
827. Lakewood Associates, L.P. (Delaware)
828. Landmark Associates, Ltd. (Tennessee)
829. Lassen Associates (Washington, D.C.)
830. Lauderdale Towers-REO, L.P. (Texas)
831. Lawndale Square-REO, L.P. (Texas)
832. Lincmar Associates (California)
833. Lyncstar Integrated Communications LLC (Colorado)
834. Madison River Properties, L.L.C. (Delaware)
835. Magnolia State Partners, Ltd. (Mississippi)
836. Marten Manor Realty Associates (Indiana)
837. McCombs Pension Investment Fund, Ltd. (California)
838. McCombs Realty Partners, L.P. (California)
839. Meadowbrook Drive Limited Partnership (Illinois)
840. Meadows Partners IV, Ltd. (Mississippi)

<PAGE> 19

841. Meadows Partners, Ltd. (Mississippi)
842. Meadows Limited Partnership (Illinois)
843. Merced Commons (Washington, D.C.)
844. Merced Commons II (Washington, D.C.)
845. Meridian-REO, L.P. (Texas)
846. Mesa Ridge Partnership (Texas)
847. Mesa Dunes GP, LLC (South Carolina)
848. Mid-States Partners, Ltd. (California)
849. Montgomery Realty Company - 84 (California)
850. Montgomery Realty Company - 85 (California)
851. Montgomery Realty Company - 80 (California)
852. Montgomery Realty Company - 83 (California)
853. Morton Towers Apartments, L.P. (Delaware)
854. MRI Business Properties Fund, Ltd. (California)
855. Multi-Benefit Realty Funds 87-1(A) (California)
856. Multi-Benefit Realty Funds 87-1(B) (California)
857. National Housing Partnership Realty Fund IV (Maryland)
858. National Property Investors 8 (California)
859. National Pinetree Limited Partnership (North Carolina)
860. National Property Investors 3 (California)
861. National Property Investors 4 (California)
862. National Property Investors 5 (California)
863. National Property Investors 6 (California)
864. National Property Investors 7 (California)
865. NHP Employee Limited Partnership (Washington, D.C.)
866. NHP/HG Ten, L.P. (Delaware)
867. NHP Mid-Atlantic Partners One Limited Partnership (Delaware)
868. NHP Mid-Atlantic Partners Three Limited Partnership (Delaware)
869. NHP Mid-Atlantic Partners Two Limited Partnership (Delaware)
870. NHP Partners Two Limited Partnership (Delaware)
871. NHP Ridgewood Partners, L.P. (Delaware)
872. NHP Southwest Partners, L.P. (Delaware)
873. Norco Associates (Pennsylvania)
874. Northgate Limited, L.P. (Delaware)
875. NPI-AP Management, L.P. (Delaware)
876. NPI-CL Management, L.P. (Delaware)
877. Oak Park Partnership (Illinois)
878. Oak Falls Partners (Texas)
879. Oak Park Partnership (Illinois)
880. OFA Partners (Pennsylvania)
881. Old Farm Associates (Pennsylvania)
882. Olde Rivertown Venture (Indiana)
883. Olde Mill Investors Limited Partnership (Delaware)
884. One Lytle Place (Ohio)
885. Orlando-Lake Conway Limited Partnership (Connecticut)
886. OTC Apartments Limited Partnership (Florida)
887. Outlets Mall GP Limited Partnership (Delaware)

<PAGE> 20

888. P.A.C. Land II Limited Partnership (Ohio)
889. Peppermill Place Partners (Texas)
890. Placid Lake Associates, Ltd. (Florida)
891. Plantation Partners Ltd. (Florida)
892. Point West Limited Partnership (Kansas)
893. Porterwood-REO, L.P. (Texas)
894. Portfolio Properties Eight Associates (Washington, D.C.)
895. Preferred Properties Fund 82 (California)
896. Preferred Properties Fund 80 (California)
897. Prime H.C. Limited Partnership (Texas)
898. Prime Crest, L.P. (Texas)
899. Prime Aspen Limited Partnership (Texas)
900. Property Asset Management Services, L.P. (Delaware)
901. Property Asset Management Services-California, L.L.C. (California)
902. Quail Run Associates, L.P. (Delaware)
903. Queen's Court Joint Venture (Tennessee)
904. Raintree Pensacola, L.P. (South Carolina)
905. Raintree GP, L.L.C. (South Carolina)
906. Rancho Townhouse Associates (Washington, D.C.)
907. Randol Crossing Investors (Illinois)
908. Randol Crossing Partners (Illinois)
909. RC Associates (Illinois)
910. Reedy River, L.L.C. (Delaware)
911. Related/Advance Capital, Ltd. (Florida)
912. Related/GMN Biscayne, Ltd. (Florida)
913. Related/GMN Teal, Ltd. (Florida)
914. Related Management Company of Florida (Florida)
915. Related/Winchester, Ltd. (Florida)
916. Residual Equities, L.P. (Delaware)
917. Restaurant Properties 1978, Ltd. (Tennessee)
918. Retirement Manor Associates (California)
919. RI-15 Limited Partnership (Washington, D.C.)
920. Ridge Carlton Associates (Massachusetts)
921. Ridgecrest Associates (Illinois)
922. Riding Club, Ltd. (Delaware)
923. River Loft Associates (Massachusetts)
924. River Hill, Limited (Tennessee)
925. River Loft Apartments Limited Partnership (Pennsylvania)
926. Riverside Park Associates Limited Partnership (Delaware)
927. Rodeo Drive Limited Partnership (California)
928. RT Homestead Assoc., Ltd. (Florida)
929. RT Walden Associates, Ltd. (Florida)
930. S.A. Apartments, Ltd. (Alabama)
931. SAHF I Limited Partnership (Delaware)
932. SAHF II Limited Partnership (Delaware)
933. San Souci-REO, L.P. (Texas)
934. Scotch Associates Limited Partnership (Pennsylvania)

<PAGE> 21

935. Scotch Lane Associates (Pennsylvania)
936. Seaside Point Partners, Ltd. (Texas)
937. Seasons Apartments, L.L.C. (Texas)
938. Seasons Apartments, L.P. (Texas)
939. Sencit F/G Metropolitan Associates (New Jersey)
940. Serramonte Plaza (California)
941. Shaker Square, L.P. (Delaware)
942. Serramonte Plaza (California)
943. Sharon Woods, Limited (Tennessee)
944. Shearson/Calmark Heritage Park, Ltd. (California)
945. Shearson/Calmark Heritage Park II, Ltd. (California)
946. Shelter Properties V (South Carolina)
947. Shelter Properties I (South Carolina)
948. Shelter Properties III (South Carolina)
949. Shelter Properties VII (South Carolina)
950. Shelter Properties VI (South Carolina)
951. Shelter Properties IV (South Carolina)
952. Shelter Properties II (South Carolina)
953. Signature Point Partners, Ltd. (Texas)
954. Signature Point Joint Venture (Texas)
955. Snowden Village Associates, L.P. (Delaware)
956. Snowden Village GP Limited Partnership (Delaware)
957. Somerset Utah, L.P. (Colorado)
958. South Brittany Oaks, L.P. (Delaware)
959. South Windrush Properties, L.P. (Texas)
960. South Port Apartments (California)
961. South La Mancha, L.P. (Delaware)
962. South Landmark Properties, L.P. (Texas)
963. Southridge Investors (Illinois)
964. Southridge Associates (Illinois)
965. Southwest Associates, L.P. (Delaware)
966. Springfield Facilities, LLC (Maryland)
967. Springhill Commercial Limited Partnership (Maryland)
968. Springhill Lake Investors Limited Partnership (Maryland)
969. Standart Woods Associates Limited Partnership (Delaware)
970. Stirling Court Partners (Texas)
971. Stone Hollow-REO, L.P. (Texas)
972. Stonecreek, Limited (Tennessee)
973. Stratford Place Investors Limited Partnership (Delaware)
974. Sunbury Partners, Ltd. (Texas)
975. Sycamore Creek Associates, L.P. (Delaware)
976. TAHF II Limited Partnership (Delaware)
977. Tara Bridge Limited Partnership (Georgia)
978. Texas Apartment Investors General Partnership (Delaware)
979. Texas Affordable Housing Investment Fund I Limited Partnership (North
Carolina)
980. Texas Residential Investors Limited Partnership (Delaware)
981. The Corners Apartments IV Limited Partnership (South Carolina)

<PAGE> 22

982. The Crossings II Limited Partnership (Georgia)
983. The Fondren Court Joint Venture (Texas)
984. The Houston Recovery Fund (Texas)
985. The National Housing Partnership (Washington, D.C.)
986. The Park at Cedar Lawn, Ltd. (Texas)
987. Thrippence Associates, Ltd. (Georgia)
988. Thurber Manor Associates, L.P. (Delaware)
989. Towne Parc-REO, L.P. (Texas)
990. Township at Highlands Partners, Ltd. (Texas)
991. Treeslope Apartments Limited Partnership (South Carolina)
992. Turnberry-REO, L.P. (Texas)
993. U.S. Realty Partners, Limited Partnership (South Carolina)
994. United Investors Income Properties (Missouri)
995. United Investors Growth Properties II (Missouri)
996. United Investors Growth Properties (Missouri)
997. United Investors Income Properties II (Missouri)
998. Villa De Guadalupe Associates (Washington, D.C.)
999. Villa Nova, Ltd. (Tennessee)
1000. VMS Apartment Portfolio Associates III (California)
1001. VMS National Residential Properties Joint Venture (Illinois)
1002. VMS Apartment Portfolio Associates II (California)
1003. Walker Springs, Limited (Tennessee)
1004. Walnut Springs Associates (Illinois)
1005. Walnut Springs Limited Partnership (Illinois)
1006. Walters/Property Asset Management Services, L.P. (Delaware)
1007. West Trails Partners, Ltd. (Texas)
1008. West Lake Arms Limited Partnership (Delaware)
1009. Westbury Investors Limited Partnership (Delaware)
1010. Westbury Limited Partnership (Maryland)
1011. Westchase Midrise Office Partners, Ltd. (Texas)
1012. Williamsburg East-REO, L.P. (Texas)
1013. Williamsburg Limited Partnership (Illinois)
1014. Wingfield Club Investors, Limited Partnership (Kansas)
1015. Winrock Houston Limited Partnership (Delaware)
1016. Winthrop Houston Associates Limited Partnership (Delaware)
1017. Winthrop Apartment Investors Limited Partnership (Maryland)
1018. Winthrop Growth Investors I Limited Partnership (Massachusetts)
1019. Winthrop Texas Investors Limited Partnership (Maryland)
1020. Woodberry Forest-REO, L.P. (Texas)
1021. Woodhaven Associates (Virginia)
1022. Woodhill Associates (Illinois)
1023. Woodland Ridge Associates (Illinois)
1024. Woodland Ridge II Partners (Illinois)
1025. Woodlawn Village Associates, L.P. (Delaware)
1026. Woodmere Associates, L.P. (Delaware)
1027. Woods Mortgage Associates (Pennsylvania)
1028. Woodway Office Partners, Ltd. (Texas)

<PAGE> 23

1029. Wyckford Commons, L.P. (Delaware)
1030. Wyntre Brook Associates (Pennsylvania)
1031. Yorktown Towers Associates (Illinois)
1032. AIMCO Stirling Court, L.P. (Delaware)
1033. Granada AIPL 6, Inc.
1034. Lakewood AOPL, Inc.
1035. Tennessee Trust Company
1036. Tenntruco, Inc.
1037. Vista APX, Inc.
1038. 1212 South Michigan
1039. 5 Mile Limited Partnership
1040. 711 West Casino Associates
1041. 735 Willoughby Avenue Company
1042. Alaska House Associates
1043. Allegheny Associates
1044. Allison Village Associates
1045. Alms Hill II Limited
1046. Alpine Company Ltd.
1047. Alpine II Company Ltd.
1048. Anderson Oaks Limited
1049. Apartment LDG 17, L.P.
1050. Arch-Way Ltd
1051. Athens Gardens Ltd
1052. Athens Station, Ltd
1053. Atlanta Shallowford Associates, LP
1054. Atrium Village Associates
1055. Avon Development Company
1056. Banning Villa
1057. Bannock Arms Apartments
1058. Barnett Plaza Ltd
1059. Bellerive Associates Limited
1060. Bethlehem Development Company
1061. Birchfield Associates
1062. Blackhawk Hills Associates
1063. Blanchard Apts
1064. Bluefield Associates
1065. Bluff Estate II
1066. Bluff Estates Limited
1067. Brentwood Manor, Ltd.
1068. Broadleaf Manor Associates
1069. Broadway Associates
1070. Broadway Glenn Associates
1071. Broadway Plaza Associates
1072. Buckannon Manor Associates
1073. Bulldogger Housing Associates,
1074. Burnsville Apartments Limited Partnership

<PAGE> 24

1075. Capital Heights Associates
1076. Carolina Associates Limited
1077. Cascade Associates, Ltd
1078. Cascadian Apartments
1079. Catwil Liquidating Trust
1080. Cayuga Village Associates
1081. Central Park Towers
1082. Central Park Towers II
1083. Charney Associates Ltd Partnership
1084. Childress Manor Associates
1085. Cider Mills Associates
1086. Clayton Associates Limited
1087. Colchester Stage II Company
1088. Cold Harbor Limited Partnership
1089. College Trace Apartments Ltd
1090. Colony House Apartments Ltd
1091. Combined Properties Ltd
1092. Commencement Terrace Associates
1093. Conifer Bedford 116, A Limited Partnership
1094. Conifer Wenatchee Apartments
1095. Continental Apartments
1096. Creekside Investment Company
1097. Crestview Apartments Company
1098. Cumberland Apartments
1099. Cypress Housing Associates Ltd
1100. Damen Court Associates
1101. Daytona Village, Ltd
1102. DBL Airport Valley, L.P.
1103. Decatur Arms, Limited Partnership
1104. Deer Grove Associates
1105. DEK Associates
1106. Delta Associates, Ltd
1107. Delta Park Investment Company
1108. Deshler Apartment Associates
1109. Dewitt Clinton Associates
1110. Dorchester Place Apartments
1111. Drexel Chandler Land Limited Partnership
1112. Drexel Orlando Land Limited Partnership
1113. Eastgate Apartments
1114. Eco Village, Ltd
1115. Edgewood Apartments Associates
1116. Edgewood Associates
1117. Edgewood Housing Associates
1118. Edgewood, Ltd.
1119. Eighth Springhill Lake Limited Partnership
1120. El Cazador Ltd.

<PAGE> 25

1121. El Coronado Apts, Ltd
1122. Elkhart Town & Country Apartments Limited Partnership
1123. Elms Common Associates
1124. Everett Square Plaza
1125. Evergreen Property Ltd
1126. Fairwind Associates, Ltd
1127. Fernwood Ltd.
1128. Fish Creek Plaza, Ltd
1129. Five (5) Mile Ltd
1130. Fleetwood Village Apartments
1131. Forest Park South Ltd
1132. Fort Vancouver Terrace
1133. Fox Run Associates Limited
1134. Franklin Woods Ltd
1135. Fremont Investment Company
1136. G.V. II Limited Partnership
1137. Garden Court Associates
1138. Glenn Acres Associates
1139. Goler Metropolitan Apartments
1140. Goose Hollow Village Limited
1141. Gotham Apartments, Ltd.
1142. Grand Glaize Associates
1143. Granite Properties Limited Partnership
1144. Green Acres Apartments Limited
1145. Green Village Associates
1146. Greenbriar Manor, Ltd.
1147. Greene Valley Associates
1148. Greenfair Tower II
1149. Greenfair-ABC California Corporation
1150. Greenfair-Tower II Cal Ltd
1151. Greensburg Associates, Ltd
1152. Greenwood Acres
1153. Greenwood Villa Apts Ltd
1154. Hamlet Manor Limited Partnership
1155. Hamlet Manor, Ltd.
1156. Hampton Hills Associates
1157. Harlan Associates Limited
1158. Harold Apartment (Aprs) Associates
1159. Hawthorne Plaza Associates
1160. Haynes House Associates
1161. Hi View Gardens Development Company
1162. Hibben Ferry Recreation Inc.
1163. Hilltop Apartments Phase I
1164. Hilltop Apartments Phase II
1165. Hinton House Associates
1166. Holiday Acres Apts

<PAGE> 26

1167. Holiday Acres Associates
1168. Holly Point Associates
1169. Hugo Plaza Apartments Ltd.
1170. Hyde Park Apts. (Apartments Limited)
1171. Indian River Associates
1172. International House Ltd
1173. Ironman Housing Association
1174. Jardines De Mayaguez Associates
1175. Jenny Lind Hall
1176. Kenosha Gardens Associates
1177. Kenton Development Company
1178. Kenton Village Associates
1179. Kenton Village Ltd
1180. Kenyon House Co
1181. Kings Row Associates
1182. Kingston Greene Associates Ltd
1183. Kohler Gardens Apartments
1184. Kona Plus Associates (Limited)
1185. L.M. Associates
1186. Lafayette Terrace Associates
1187. Lake June Village II Ltd
1188. Lake June Village Ltd
1189. Lake Towers Associates
1190. Lakehurst Apts I
1191. Lakehurst II Ltd.
1192. Landmark Apts (Apartment) Associates
1193. Leeco Co
1194. Lemay Village Ltd
1195. Lincoln Village Oregon, Ltd
1196. Linnaeus Hawthorne Associates1
1197. Linnaeus Lexington Associates1
1198. Lone Star Properties Limited
1199. Long Beach/Wilmington Associates
1200. Madison Park III Associates
1201. Madison Park Properties Ltd
1202. Madison Terrace Associates
1203. Mallards of Wedgewood Limited
1204. Mandarin Trace Apts Ltd
1205. Manor Green Ltd
1206. Marcella Manor Associates
1207. Marinette Woods (Apartment) Apt Associates
1208. Meadow Lane LP
1209. MHO Partners Ltd
1210. Midpark Development Company
1211. Midtown Plaza Associates
1212. Minneapolis Associates Limited Partnership
1213. Morningside Housing Phase B

<PAGE> 27

1214. Mount Pleasant Associates Limited Partnership
1215. New Wesley Highland Towers
1216. Newark Ohio Townehouses Ltd
1217. Nichols Townehomes Ltd
1218. Normandy Group, Ltd.
1219. North Omaha Homes
1220. North Park Associates
1221. North Washington Park Estates
1222. Northern States Properties Ltd
1223. Northwest Village Ltd.
1224. Northwind Forest Ltd
1225. Nova Associates Limited
1226. O'Dea Investment Company
1227. Oak Knoll (Apartments) Apts Ltd
1228. Oak Woods Associates
1229. One Linwood Associates Ltd.
1230. Oxford Holding Corporation
1231. P&R Investment Services
1232. Pacific Coast Plaza
1233. Palace Apartments
1234. Palisades Apartments LTD
1235. Park Manor, Oregon, Ltd.
1236. Parkview Associates
1237. Parkview Development Co.
1238. Penview Associates
1239. Phillips Village Associates
1240. Pine Haven Apartments, Ltd
1241. Pine Tree Apartments, Ltd.
1242. Pinetree Associates
1243. Pinewood Ltd.
1244. Piney Branch Associates
1245. Plains Village Ltd.
1246. Pleasanton Greens Investment Co.
1247. Plumly Townhomes Ltd
1248. Point Village Associates
1249. Portage Associates Limited Partnership
1250. Prairie Village Associates
1251. Preston Drive Ltd Partnership
1252. Pullman Wheelworks Assoc I
1253. Queensgate II Associates
1254. Quincy Manor Associates
1255. Ravensworth Associates
1256. RH Associates
1257. Richton Park Investment
1258. Richton Square Elderly, Ltd.
1259. Richton Square, Phase IV, Ltd.
1260. River Crossing Apartments, Ltd.

<PAGE> 28

1261. River Oaks Associates
1262. Riverfront Associates Ltd
1263. Rochester Avenue Associates
1264. Rockledge Associates
1265. Rockville Associates, Ltd.
1266. Rowland Heights Apartments
1267. Rowland Heights II Ltd
1268. Rowland Heights Liquidating Trust
1269. Royal De Leon Apartments, Ltd.
1270. Royal Shore Associates
1271. Running Brooke II Associates
1272. Sagewood Manor Associates1
1273. Saginaw Village Oregon, Ltd.
1274. Salem Manor Oregon Ltd
1275. Scott Manor Apartments
1276. Seattle Rochester Avenue Associates
1277. Second Springhill Lake Limited Partnership
1278. Security House, Ltd.
1279. Security Properties FHA
1280. Shadowood Apartments
1281. Silverwood Village Apartments
1282. Smith House Associates
1283. South Arsenal Neighborhood Associates
1284. South Shore Village Leased
1285. Southside Village Apts. Liquidating Trust
1286. Southwest Parkway Holdings, Inc.
1287. SP Bolingbrook Associates
1288. SP Buckeye Properties
1289. SP Columbia Limited
1290. SP Diversified 1980
1291. SP Diversified Properties -I
1292. SP/Hotel Associates, Ltd.
1293. SP Illinois Partnership Ltd.
1294. SP Jayhawk Properties
1295. SP Mid Term Income Fund, Ltd.
1296. SP Pine Hills Properties
1297. SP Properties I
1298. SPI Hartford Associates
1299. SPI Willoughby Avenue
1300. Springdale West
1301. Springdale West II California Ltd
1302. Spruce Hill Apartments, Ltd.
1303. Steeplechase (Ailken) Ltd.
1304. Stewartown Associates Ltd.
1305. Stonegate Park Apartments, Ltd
1306. Stuyvesant Limited Dividend

<PAGE> 29

1307. Summit Square Associates
1308. Sun Terrace Associates
1309. Suncrest Village
1310. Sunrise Gardens
1311. Sunset Capital Apartments Liquidating Trust
1312. Sunset Silver Bow Apts
1313. Sunset Village Apartments Ltd
1314. Swan Creek Associates Liquidating Trust
1315. Table Mesa Joint Venture
1316. Tanara Villa Associates I Liquidating Trust
1317. Tandem Properties
1318. TERRA II Ltd.
1319. Terrace Investors Ltd.
1320. The Advance Fund, Ltd.
1321. The New Fairways, L.P.
1322. The Tinley Company
1323. The Villa Limited Partnership
1324. The Woods Associates
1325. Three Fountains Limited
1326. Three Winthrop Properties, L.P.
1327. Tower of David
1328. Town & Country Club Apartments LP
1329. Town One, Phase I
1330. Town One, Phase II
1331. Trail Ridge Apartments, Ltd.
1332. Treeline Associates
1333. Tri-State Ltd
1334. Uptown Village Ltd
1335. Urbana Village
1336. Valley Associates
1337. Victoria Arms Apts
1338. Victorian Associates Limited
1339. Villa Del Norte Associates
1340. Villa Del Norte II Associates
1341. Village East Towers Limited
1342. Village South Associates
1343. Virginia Apartments Limited
1344. Vivendas Associates
1345. W.T. Limited Partnership
1346. Walnut Towers Development Liquidating Trust
1347. Walton-Perry Ltd.
1348. Warden Associates, A Limited Partnership
1349. Warwick Terrace Company Liquidating Trust
1350. Washington Plaza, Oreg., Ltd.
1351. Watergate II Apartments Ltd.
1352. Watergate II Associates
1353. Waterman Crossing Associates, L.P.

<PAGE> 30

1354. Wedgewood Club Estates Limited
1355. Wedgewood Golf Associates
1356. Wesley Madison Towers Ltd.
1357. West Alameda Apartments
1358. West Virginian Manor Associates
1359. Western Hills, Assoc. LLC
1360. Westgate (Spartanburg) Ltd
1361. Westgate Apartments
1362. Westlake Terrace Associates
1363. Westminster Commons Associates
1364. Westminster Properties Ltd.
1365. Westview-Youngstown Ltd
1366. Westwick Apartments, Ltd.
1367. Westwick II Ltd
1368. Westwood Terrace Associates
1369. Willow Park Associates, L.P.
1370. Willows Associates Limited
1371. Win-Wood Village, Ltd.
1372. Winding Brook Associates
1373. Winhaven Associates
1374. Winslowe Apts Ltd
1375. Winthrop Properties, L.P.
1376. WoodCrest Apartments, Ltd.
1377. Woodlake Associates, a Limited Partnership
1378. Woodsong I
1379. Woodsong II
1380. Woodsong Limited Partnership
1381. Woodsvilla Associates
1382. WRC -87A Corp.
1383. 51 North High Street L.P.
1384. 62nd Street Ltd Partnership
1385. 107-145 West 135th Street Associates Ltd Partnership
1386. 630 East Lincoln Avenue Associates Ltd Partnership
1387. Abbott Associates Ltd Partnership
1388. Academy Gardens Associates LP
1389. Adirondack Apartments Saranac Associates LP
1390. AIMCO Casa Anita, L.P.
1391. AIMCO Cedar Creek, L.P.
1392. AIMCO Cobble Creek, L.P.
1393. AIMCO Rio Cancion, L.P.
1394. AIMCO San Marina, L.P.
1395. AIMCO Sundown, L.P.
1396. AIMCO Terrace Royale, L.L.C.
1397. AIMCO Tustin, L.P.
1398. AIP 6 GP, L.P.

<PAGE> 31

1399. AIP III GP Limited Partnership
1400. AIP IV Factory GP, LLC
1401. Algonquin Tower Ltd Partnership
1402. All Hallows Associates
1403. Allentown Towne House Ltd Partnership
1404. Anglers Manor Associates LP
1405. Angeles Eastgate Joint Venture
1406. Angeles Income Properties II GP LP
1407. Angeles Income Properties IV GP LP
1408. Angeles Income Properties Ltd 6 GP LP
1409. Angeles Opportunity Properties Ltd GP LP
1410. Angeles Park Communities GP LP
1411. Angeles Partners X GP Limited Partnership
1412. Angeles Partners XII GP LP
1413. Anton Square Ltd
1414. ARC II/AREMCO Partners
1415. Antioch Apartments Ltd
1416. AP XI Fox Run GP, LLC
1417. AP XII Associates Limited Partnership
1418. AP XII GP, LP
1419. Apartment Associates, Ltd.
1420. Apartment LDG 17, LLC
1421. Arvada House Ltd Partnership
1422. Ashley Woods LLC
1423. Aspen Ridge Associates, Ltd.
1424. Aspen Stratford Apartments Company B
1425. Aspen Stratford Apartments Company C
1426. Athens Arms Associates
1427. Audobon Park Associates
1428. Aurora/GHI Associates
1429. Baisley Park Associates LP
1430. Baldwin Towers Associates
1431. Baldwin Oaks Elderly Ltd
1432. Basswood Manor Ltd Partnership
1433. Bayview Hunters Point Apartments
1434. Baywood Partners. Ltd
1435. Baywood Apts. Ltd
1436. Beautiful Village Associates LP Redevelopment Company
1437. Beaux Gardens Associates, LTD.
1438. Bellmire LP
1439. Benjamin Banneker Plaza Associates
1440. Bennington Square Associates, L.P.
1441. Bensalem Gardens Associates Ltd
1442. Bensalem Gardens Associates Ltd Partnership
1443. Benton Square Partnership
1444. Berkley Ltd Partnership
1445. Beverly Apartments Assoc., LP

<PAGE> 32

1446. Bexley House GP, L.L.C.
1447. Bexley House, LP
1448. Big Walnut, L.P.
1449. Biscayne Apartments Associates, Ltd.
1450. Blakewood Properties Assoc.
1451. Blakewood Apartments Associates
1452. Bloomsburg Elderly Associates
1453. Branchwood Towers Ltd Partnership
1454. Briar Bay Apartments Associates, Ltd.
1455. Briarwood Apartments
1456. Brighton Crest LP
1457. Brighton GP, L.L.C.
1458. Brightwood Ltd Partnership
1459. Brightwood Manor Associates
1460. Brinton Towers Associates
1461. Brinton Manor No. 1 Associates
1462. Brittany Point AP VIII LP
1463. Brittany Point GP LP
1464. Broadmoor Apt. Assoc.
1465. Brookside Apartments Associates
1466. Brookview Apartments Co Ltd
1467. Brunswick Village Limited Partnership
1468. Buckingham Hall Associates Ltd Partnership
1469. Buena Vista Apartments Ltd
1470. Buena Vista Rehabilitation Associates, LTD.
1471. Buffalo Village Associates
1472. Burnt Oaks Ltd
1473. California Square Ltd Partnership
1474. California Square II Ltd Partnership
1475. Calmark/Fort Collins, Ltd.
1476. Calmark Investors, a California Limited Partnership
1477. Calmark MRA Limited Partnership
1478. Calmark Heritage Park II, Limited Partnership
1479. Calvert City LP
1480. Calverton Associates Limited Partnership
1481. Cambridge Heights Apartments Ltd
1482. Campbell Heights Associates Ltd Partnership
1483. Canterbury Gardens Associates Ltd Partnership
1484. Capital Park Limited Partnership
1485. Cardinal Woods Apts. Ltd
1486. Caroline Associates I Ltd Partnership
1487. Caroline Arms Limited Partnership
1488. Carriage AP X Ltd
1489. Carter Associates Ltd Partnership
1490. CC Office Associates
1491. CCP V/Aspen Ridge GP, LLC
1492. CCP/IV Nob Hill GP, LLC

<PAGE> 33

1493. CCP/IV Residential GP, LLC
1494. CCP/IV Apartments GP, LLC
1495. CCP/IV Citadel GP, LLC
1496. CCP/IV Associates Ltd.
1497. Cedar Creek Partners, Ltd.
1498. Cedar Tree, L.L.C.
1499. Center Square Associates
1500. Centinella GP LP
1501. Central Woodlawn LP
1502. Central Village Associates Ltd Partnership
1503. Central Court LP
1504. Century Lakeside Place, L.P.
1505. Chapel Housing Ltd Partnership
1506. Cheek Road Ltd Partnership
1507. Chesterfield Housing Associates
1508. Cheyenne Woods LLC
1509. Cheyenne Woods United Investors LP
1510. Cheyenne Woods GP LP
1511. Cheyenne Village Apartments Ltd Partnership
1512. Chimney Ridge, LP
1513. Christopher Court Housing Company Ltd Partnership
1514. Churchview Gardens Ltd Partnership
1515. Citrus Park Associates Ltd
1516. Civic Tower Associates, LTD.
1517. Clay Courts Associates Ltd Partnership
1518. Clinton Manor, L.P.
1519. Clover Ridge East Ltd Partnership
1520. Club Apartments Associates
1521. Cobble Creek, LLC
1522. College Park Associates
1523. College Heights Ltd Partnership
1524. College Park Associates Ltd Partnership
1525. Colonial Terrace I Associates
1526. Colonial Terrace II Associates
1527. Colony of Springdale Associates, Ltd.
1528. Colony Apartments Company Ltd
1529. Columbus Court LP
1530. Columbus Square Associates I Ltd Partnership
1531. Columbus Square Associates II Ltd Partnership
1532. Community Developers Of High Point Ltd Partnership
1533. Community Circle II Ltd
1534. Community Developers Of Princeville Ltd Partnership
1535. ConCap Metro Centre Associates, Ltd.
1536. ConCap Village Green Associates, Ltd.
1537. ConCap River's Edge Associates, Ltd.
1538. ConCap Citadel Associates, Ltd.
1539. ConCap Stratford Place Associates, Ltd.

<PAGE> 34

1540. Concord Houses Associates
1541. Congress Park Associates Ltd Partnership
1542. Congress Park Associates II Ltd Partnership
1543. Cooper's Pointe CPGF 22, LP
1544. Copper Mill CPGF 22, LP
1545. Copperwood II Ltd Partnership
1546. Copperwood Ltd Partnership
1547. Coral Palm Plaza Joint Venture
1548. Corinth Square Assocs.
1549. Cottonwood Apartments
1550. Country Villa Associates
1551. Countrybrook Associates
1552. Court Street Plaza Ltd
1553. Covington Pike Associates
1554. CPF Misty Woods GP, L.L.C.
1555. CPF 16 Woods of Inverness, LLC
1556. CPGF 22 Hampton Greens, L.L.C.
1557. CPGF 22 Hampton Greens GP, L.L.C.
1558. CPGF 22 Cooper's Pointe GP, L.L.C.
1559. CPGF 22 Copper Mill GP, L.L.C.
1560. CPGF 22 Four Winds GP, L.L.C.
1561. CPGF 22 Wood Creek GP, L.L.C.
1562. CPGF 22 Plantation Creek GP, L.L.C.
1563. CPGF 22 Stoney Creek GP, L.L.C.
1564. Crosland Housing Associates
1565. Cumberland Court Associates
1566. Cutler Canal Associates, Ltd.
1567. Cutler Canal II Associates, Ltd.
1568. Cutler Canal III Associates, Ltd.
1569. Daniel Lake Apts. Ltd
1570. Darby Townhouses Associates
1571. Darbytown Development Associates LP
1572. Davidson IRE Assocs. LP
1573. Davidson IRE GP LP
1574. Dawson Springs Ltd.
1575. Decatur Meadows Housing Partners Ltd
1576. Deerfield Apartments, L.L.C.
1577. Deerfield Beach Associates, LTD.
1578. Delcar-S Ltd
1579. Delcar T Ltd Partnership
1580. Desoto Estates, LP
1581. DGP, GP, L.P.
1582. Diakonia Associates
1583. Dip Limited Partnership
1584. Dip Limited Partnership II
1585. Dip Limited Partnership III
1586. Diversified Equities, L.P.

<PAGE> 35

1587. Dixie Apartments Associates, LTD.
1588. Downing Apartments
1589. Druid Hills Apartments, LP
1590. Duke Manor Associates
1591. Duquesne Associates No.
1592. East Hampton Ltd Partnership
1593. Eastcourt Village Partners
1594. Easton Terrace II Associates Ltd Partnership
1595. Easton Terrace I Associates Ltd Partnership
1596. Eastridge Apartments
1597. Edgewood II Associates
1598. Edmond Estates Limited Partnership
1599. Elden Limited Partnership
1600. Elderly Housing Associates Ltd Partnership
1601. Emory Grove Limited Partnership.
1602. Esbro Limited Partnership
1603. Eustis Apartments Ltd
1604. Factory Merchants AIP IV LP
1605. Fairburn & Gordon Associates Phase II
1606. Fairburn & Gordon Associates Phase I
1607. Fairmeadows Limited Partnership
1608. Fairmont #2 Ltd Partnership
1609. Fairmont #1 Ltd Partnership
1610. Fairview Homes Associates
1611. Fairview Gardens LP
1612. Fairwood Associates
1613. Federal Square Village Ltd Partnership
1614. Fernando Associates, LTD.
1615. Ferncliff Limited Partnership
1616. Field Associates
1617. Fifth Springhill Lake Limited Partnership
1618. Fifty-One North High Street LP
1619. First Springhill Lake Limited Partnership
1620. Flatbush Nsa Associates Ltd Partnership
1621. Foothill Chimney Assocs. LP
1622. Forest Apartments Associates
1623. Forest Green Limited Partnership
1624. Forrester Gardens Ltd
1625. Forst Park Elderly Associates Ltd Partnership
1626. Fort Collins Co. Ltd
1627. Fort Carson Associates Ltd Partnership
1628. Four Winds CPGF 22, LP
1629. Four Quarters Habitat Apts. Assocs.
1630. Fourth Springhill Lake Limited Partnership
1631. Fox Run AP XI LP
1632. Fox Run AP XI GP, LP
1633. Foxfire Apts. V LP

<PAGE> 36

1634. Foxwood II-REO, L.P.
1635. Franklin Park Ltd Partnership
1636. Franklin Chandler Associates
1637. Franklin Square School Associates Ltd Partnership
1638. Freeman Equities, L.P.
1639. Friendset Housing Co Ltd Partnership
1640. Friendship Court, LP
1641. Frio Housing Ltd Partnership
1642. Galion Limited Partnership
1643. Garfield Hill Associates Ltd Partnership
1644. Gate Manor Apartments Ltd
1645. Gates Mills I Limited Partnership
1646. Gateway Village Associates
1647. Genesee Gardens Associates Ltd Partnership
1648. GHI II Big River Associates
1649. GHI Associates
1650. Gladys Hampton Homes Associates Ltd Partnership
1651. Glendale Terrace LP
1652. Golden II
1653. Golden Apartments I
1654. Governor's Park Apt. VII LP
1655. Governors Associates, L.P.
1656. Granada AIP 6 Ltd
1657. Grandview Apartments
1658. Great Southwest GP, L.L.C.
1659. Great Southwest Industrial, L.P.
1660. Greater Richmond Community Development Corp. #2 & Associates
1661. Greater Mt. Calvary Terrace Ltd
1662. Greater Richmond Community Development Corp. #1 & Associates
1663. Green Mountain Manor Ltd Partnership
1664. Greenfield Apartments Ltd Partnership
1665. Greenfield North Apartments Ltd Partnership
1666. Greenville Arms, LP
1667. Griffith Limited Partnership
1668. Grove Park Villas, Ltd
1669. Growth Hotel Investors Combined Fund #12
1670. Gulf Coast Holdings Ltd
1671. Gulfport Apts. Ltd.
1672. Gulfway Limited Partnership
1673. GW Carver Ltd
1674. Haili Associates
1675. Haines Associates Ltd Partnership
1676. Hainlin Mills Apt. Assoc., Ltd.
1677. Halls Mill Ltd.
1678. Hampton Greens CPGF 22, LP
1679. Hampton/GHI Associates No. 12
1680. Hampton/GHI Associates No. 22

<PAGE> 37

1681. Harbor Court Associates, LTD.
1682. Harold House Limited Partnership
1683. Harris Park Ltd Partnership
1684. Hatillo Housing Associates
1685. Hattiesburg Ltd.
1686. Heights Associates Ltd Partnership
1687. Hemingway Housing Associates Ltd Partnership
1688. Hickory Ridge Associates Ltd
1689. Hickory Heights Apartments, LP
1690. Highlands Village II Ltd
1691. Hillcrest Green Apartments Ltd
1692. Hillside Village Associates
1693. Hilltop Apartments Associates
1694. Hilltop Limited Partnership
1695. Hollows Associates Ltd Partnership
1696. Holly Court, LP
1697. Hollywood Gardens
1698. Homestead Apartments Associates, Ltd.
1699. Homestead Apartments Associates II, Ltd.
1700. Homestead III Associates, Ltd.
1701. Hospitality Inns Pensacola, Ltd. II
1702. Hospitality Inns Jacksonville Ltd II
1703. Hospitality Inns Pensacola, Ltd.
1704. Housing Assistance Of Mt. Dora Ltd
1705. Housing Assistance Sebring Ltd
1706. Housing Assistance Of Vero Beach Ltd
1707. Housing Assistance Of Orange City Ltd
1708. Houston Pines Ltd
1709. Houston Aristocrat Apartments Ltd Partnership
1710. HRH Properties, Ltd.
1711. Hudson Terrace Associates Ltd Partnership
1712. Hunt Club Associates, L. P.
1713. Hunter's Glen (Phase I) AP XII LP
1714. Hunter's Glen AP XII LP
1715. Hurbell II Limited Partnership
1716. Hurbell III Ltd Partnership
1717. Hurbell IV Limited Partnership
1718. Hurbell I Limited Partnership
1719. IDA Tower
1720. Indian Valley III Limited Partnership
1721. Indian Valley I Limited Partnership
1722. Indian Valley II Limited Partnership
1723. Ingram Square Apartments Ltd
1724. Insignia Jacques Miller, L.P.
1725. International Plaza Associates, LTD
1726. Intown West Associates Ltd Partnership
1727. Jamestown Village Associates

<PAGE> 38

1728. Jersey Park Associates Ltd Partnership
1729. JFK Associates
1730. Johnson Court LP
1731. Johnston Square Associates Ltd Partnership
1732. JVL 19 Associates Ltd Partnership Verified
1733. JVL Limited Partnership
1734. JVL Sixteen Limited Partnership
1735. JVL 18 Associates Ltd Partnership Verified
1736. Kalmia Apts. LP
1737. Kapuna Associates
1738. Kemar Townhouses Associates
1739. Kendall Court Associates, Ltd.
1740. Kennedy Boulevard II GP, LLC
1741. Kennedy Boulevard III GP, LLC
1742. Kennedy Boulevard Associates
1743. Kennedy Boulevard I GP, LLC
1744. Kennedy Homes Limited Partnership
1745. Kenneth Court LP
1746. Kenneth Arms
1747. Kimberly Associates Limited Partnership
1748. Kimberton Apartments Associates Limited Partnership
1749. Kinard LP
1750. King Bell Associates
1751. Knollcrest Apartments Ltd Partnership
1752. Koolau Housing Associates
1753. La Colina Partners, Ltd.
1754. La Colina Ranch Apartments Ltd.
1755. La Salle Apartments
1756. La Vista Associates
1757. La Fontenay LP
1758. Lafayette Manor Associates Ltd Partnership
1759. Lafayette Towne Family Ltd Partnership
1760. Lafayette Square Associates
1761. Lafayette Towne Elderly Ltd Partnership
1762. Laing Village Ltd Partnership
1763. Lake Avenue Associates
1764. Lake Avenue Offices Ltd
1765. Lake Forest Apartments
1766. Lake Wales Villas Ltd
1767. Lake Meadows GP, LLC
1768. Lakeshore LP
1769. Lakeside Villa Associates, Ltd.
1770. Lakeview Arms Associates Lts Partnership
1771. Lakeview Villas Ltd
1772. Lakewood AOPL LP
1773. Landau Apartments Company, LP
1774. Landings CPF 16, L.P.

<PAGE> 39

1775. La Fontenay LLC
1776. Las Americas Housing Associates
1777. Lassen Associates
1778. Lauderdale Lakes Associates, Ltd.
1779. Laurel Gardens, a Partnership In Commendam
1780. Laurens Villas, LP
1781. Lazy Hollow Partners (a general partnership)
1782. Le Mans Apartments LP
1783. Lee Hy Manor Associates Ltd Partnership
1784. Lewisburg Associates
1785. Lincmar Associates
1786. Lincoln Park Associates
1787. Linden Court Associates Ltd Partnership
1788. Lock Haven Gardens Associates
1789. Lock Haven Elderly Associates
1790. Long Meadow Apartments, LP
1791. Loring Towers Associates
1792. Loring Towers Apartments Limited Partnership
1793. Loudoun House Ltd Partnership
1794. Louisbourg Elderly Associates
1795. Ludlam Gardens Apartments, LTD.
1796. M&P Development Co.
1797. Madison Apts. Assocs.
1798. Madisonville, Ltd.
1799. Manzanita Arms
1800. Maple Park West Ltd Partnership
1801. Maple Hill Associates
1802. Mayfair Manor Limited Partnership
1803. MBRF Hunt Club GP, LLC
1804. McColl Housing Associates
1805. Meadow Wood Associates General Partnership
1806. Meadowgreen Associates, LTD
1807. Meadowood Townhouses III Limited Partnership
1808. Meadowood Townhouses I Limited Partnership
1809. Meadows IV Ltd.
1810. Meadows II Ltd
1811. Meadows Apartments Limited Partnership
1812. Meadows East Apartments Limited Partnership
1813. Menlo Limited Partnership
1814. Merced Commons
1815. Merced Commons II
1816. Merrifields Associates
1817. Mesa Dunes MHP LP
1818. Miami Elderly Associates Ltd Partnership
1819. Miami Court Associates, LTD
1820. Mid States Industrial Complex Ltd
1821. Midtown Plaza Associates, Ltd.

<PAGE> 40

1822. Mill Street Associates Ltd Partnership
1823. Miller Village (Eastline Associates)
1824. Milliken Apartments Company
1825. Minneapolis Business Park JV
1826. Miramar Housing Associates Ltd Partnership
1827. Misty Woods CPF 19, LP
1828. Monaco Arms Associates II Ltd
1829. Monaco Arms Associates I
1830. Monmouth Associates Ltd Partnership
1831. Montblanc Gardens Apartments Associates
1832. Montblanc Housing Associates
1833. Montgomery Partners, Ltd.
1834. Monument Street Ltd Partnership
1835. Moral Gardens Associates
1836. Morrisania Towers Housing Company Ltd Partnership
1837. Moss Gardens Ltd, a Partnership in Commendam
1838. MRR Ltd Partnership
1839. Murphy Blair Associates III Associates Ltd Partnership
1840. Muske Ltd Partnership
1841. Natchez Ltd
1842. Natick Associates
1843. National Housing Partnership Realty Fund I
1844. National Housing Partnership Realty Fund III
1845. National Housing Partnership Realty Fund IV
1846. National Housing Partnership Realty Fund Two
1847. Neighborhoods of The Universities Lock Street Apartments Company
1848. New Vistas Apartments Associates Phase II
1849. New Fairways LP
1850. New Hidden Acres, LP
1851. New Horizons Associates, LTD.
1852. New Lake Meadows LP
1853. New Shelter V LP
1854. New Timber Ridge GP, L.P.
1855. New Timber Ridge, L.P.
1856. New Snowden Village I LP
1857. New Vistas Apartments Ltd Partnership
1858. New West 111th Street Housing Company Ltd Partnership
1859. New West 111th Street Two Associates Ltd Partnership
1860. Newberry Arms, LP
1861. Newton Hill Limited Partnership
1862. NHP Carriage Associates LP
1863. NHP Bayberry Associates LP
1864. NHP Center Associates LP
1865. NHP Chapparal Associates LP
1866. NHP Coach Associates LP
1867. NHP Cornerstone Associates, LP
1868. NHP Country Club Woods Associates LP

40
<PAGE> 41

1869. NHP Dove Associates, LP
1870. NHP Elk Associates, LP
1871. NHP Forest II Associates, LP
1872. NHP Forest IV Associates, LP
1873. NHP Gates of Arlington Associates LP
1874. NHP Green Associates LP
1875. NHP Greenbriar Associates LP
1876. NHP Heather I Associates LP
1877. NHP Heather II Associates, LP
1878. NHP Hessian Hills Associates LP
1879. NHP High River Associates LP
1880. NHP Joint Ventures, Inc.
1881. NHP Lane Associates LP
1882. NHP Laurel III LP
1883. NHP Longfellow Associates, LP
1884. NHP Mattapony, LP
1885. NHP Midland Associates LP
1886. NHP Mill Creek Associates LP
1887. NHP Oak Associates LP
1888. NHP Paradise Bay Associates, LP
1889. NHP Park Associates LP
1890. NHP Parkview Associates LP
1891. NHP Pembroke Associates LP
1892. NHP Pine Creek Manor Associates, LP
1893. NHP Port Richey Associates LP
1894. NHP Regal Associates LP
1895. NHP Spring Lake Manor Associates LP
1896. NHP Summer Associates LP
1897. NHP Summit Associates LP
1898. NHP Sunridge Associates LP
1899. NHP Three Chopt West Associates LP
1900. NHP Timberview Associates LP
1901. NHP Town & Country/Country Place, LP
1902. NHP Townhouse Associates LP
1903. NHP Twin Associates LP
1904. NHP Twin Gates East Associates LP
1905. NHP Villa Associates LP
1906. NHP Will-O-Wisp Arms Associates LP
1907. NHP Woodcreek Associates LP
1908. Ninth Springhill Lake Limited Partnership
1909. Nob Hill Villa Apts. Assocs. LP
1910. North River Village III
1911. North Lake Terrace Associates Ltd Partnership
1912. North Washington Park Partnership
1913. North River Village III GP LP
1914. North Coast/Syracuse LP
1915. Northbrook Partners, Ltd.

<PAGE> 42

1916. Northbrook Apts. Ltd
1917. Northgate Village Limited Partnership
1918. Northwest Terrace Associates Ltd Partnership
1919. Oak West Ltd Partnership
1920. Oak Run LLC
1921. Oak Hill Apartment Associates
1922. Oak Hollow South Associates
1923. Oakland City West End Associates Ltd
1924. Oakland Village Townhouse Associates Ltd Partnership
1925. Oakland Company, LP
1926. Oakwood Limited Partnership
1927. Ocala Place Ltd
1928. One West Conway Associates Ltd Partnership
1929. Opa Locka Associates, LTD.
1930. Orange Village Associates
1931. Orange City Villas II Ltd
1932. Orangeburg Manor
1933. Orchard Park Joint Venture
1934. Orchard Mews Associates Ltd Partnership
1935. Orchard Park Apartments, L.P.
1936. Outlets GP, L.L.C.
1937. Outlets Mall LP
1938. Overbrook Park Ltd
1939. Overlook Apartments Associates Ltd
1940. Oxford Apartments Ltd
1941. Oxford Place Associates
1942. Oxford Oaks Investors Ltd Partnership
1943. P W VI Associates Ltd Partnership
1944. P W III Associates Ltd Partnership
1945. P W IV Associates Ltd Partnership
1946. P W V Associates Ltd Partnership
1947. Palm Lake Associates, LTD.
1948. Palm Beach Apartments, L.P.
1949. Palm House Ltd Partnership
1950. Palmer Square Apartments Associates
1951. Park Avenue West I Limited Partnership
1952. Park Avenue West II Limited Partnership
1953. Park Creek Ltd Partnership
1954. Parkview Arms Associates I Ltd Partnership
1955. Parkview Arms Associates II Ltd Partnership
1956. Parkview Apartments Ltd Partnership
1957. Parkview Associates Ltd Partnership Verified
1958. Parkways Associates Ltd Partnership
1959. Patman Switch Associates
1960. Pavilion Associates
1961. Pelham Place GP Limited Partnership
1962. Pelham Place L.P.

<PAGE> 43

1963. Pendleton Riverside Apartments Oregon Ltd
1964. Penn Hall Associates Ltd Partnership
1965. Peppertree Village Of Avon Park Ltd
1966. Pershing Waterman Phase I Ltd Partnership
1967. Pickwick Place AP XII, LP
1968. PineHaven Villas Apartments LP
1969. Pinehurst, Ltd.
1970. Pittsfield Neighborhood Associates
1971. Place One Ltd Partnership
1972. Plainview Apartments, LP
1973. Plantation Creek CPGF 22, LP
1974. Pleasant Valley Apartments Ltd Partnership
1975. Point West Associates Limited Partnership
1976. Point James Apts., LP
1977. Polynesian Apartments Associates, LTD.
1978. Poplar Square GP LP
1979. Poplar Square AIP III LP
1980. Portland Plaza Ltd Partnership
1981. Portner Place Associates Ltd Partnership
1982. Post Ridge Associates, Ltd.
1983. Post Street Associates Ltd Partnership
1984. Pride Gardens
1985. Prince Street Towers Ltd Partnership
1986. Pueblo Ltd Partnership
1987. Quail Run IV GP LP
1988. Quail Woods Developers
1989. Quail Run IV LP
1990. Queenstown Apartments Ltd Partnership
1991. Quint Properties
1992. Ramblewood LP
1993. Rancho Townhouse Associates
1994. Rancho Arms
1995. Raymonia Apts. LP
1996. Real Estate Venture Fund III Limited Partnership
1997. Red River Estates, LP
1998. Registry Square Ltd Partnership
1999. Richlieu Associates
2000. River Woods Associates Ltd Partnership
2001. Rivercreek Apartments Limited Partnership
2002. Rivercrest Apartments LP
2003. Riverfront Apartments Ltd Partnership
2004. Riverview II Associates Ltd Partnership
2005. Riverwalk Associates LP
2006. Rockwell Limited Partnership
2007. Rodeo Drive Limited Partnership
2008. Rolling Meadows Of Ada Ltd
2009. Roosevelt Gardens II

<PAGE> 44

2010. Roosevelt Gardens LP
2011. Royal Coast Apt. Assoc., Ltd.
2012. Royal Towers Limited Partnership
2013. Ruffin Road Associates Ltd Partnership
2014. Ruscombe Gardens Ltd Partnership
2015. Russ Allen Plaza Associates, LTD
2016. Rutherford Park Townhouses Associates
2017. Sabal Palm Associates, Ltd.
2018. Saint George Villas Ltd Partnership
2019. Salem GP, L.L.C.
2020. Salem Court House LP
2021. Salem Arms of Augusta LP
2022. San Juan Apartments
2023. San Juan del Centro Limited Partnership
2024. San Jose Limited Partnership
2025. Sandy Springs Associates Ltd
2026. Seagrape Village Associates, LTD.
2027. Sencit Selinsgrove Associates
2028. Sencit Towne House LP
2029. Sencit New York Avenue Associates
2030. Sencit Kelly Township Associates
2031. Sencit Lebanon Company
2032. Sencit Jacksonville Company, Ltd
2033. Serramonte Plaza, a California Limited Partnership
2034. Serramonte Plaza, a California Limited Partnership
2035. Seventh Springhill Lake Limited Partnership
2036. Shannon Manor
2037. Shelter V GP SC LP
2038. Shelter IV GP LP
2039. Shelter I GP LP
2040. Shelter III GP LP
2041. Shelter V GP LP
2042. Shelter VII GP LP
2043. Sherman Terrace Associates
2044. Shoreview Apartments
2045. Silver Blue Lake Apartments, LTD.
2046. Site 10 Community Alliance Associates Ltd Partnership
2047. Sixth Springhill Lake Limited Partnership
2048. Sleepy Hollow Apartments Ltd Partnership
2049. Snap IV Ltd Partnership
2050. SNI Development Company Ltd Partnership
2051. Snowden GP, L.L.C.
2052. South Port CCP/IV, L.L.C.
2053. South Port Apartments, A California Limited Partnership
2054. South Mountain Terrace Ltd

<PAGE> 45

2055. South Dade Apartments, LTD.
2056. South Hiawassee Village Ltd
2057. Southmont Apartments
2058. Southridge Apartments Limited Partnership
2059. Southward Limited Partnership
2060. Spring Meadow Limited Partnership
2061. Spruce Ltd Partnership
2062. St. Nicholas Associates Ltd Partnership
2063. Stafford Apartments Ltd Partnership
2064. Stanbridge LP (Lakeshore I)
2065. Star Creek Assoc., Ltd.
2066. Star Creek II Assoc., Ltd.
2067. Staunton Heights LP (Lakeshore III)
2068. Sterling Crest Joint Venture
2069. Stock Island Ltd Partnership
2070. Stone Ridge LLC
2071. Stoney Creek CPGF 22, LP
2072. Stoney Greens, LLC
2073. Stoneybrook Apartments Associates
2074. Storey Manor Associates Ltd Partnership
2075. Strawbridge Square Associates Ltd Partnership
2076. Sturbrook Investors, Ltd.
2077. Summersong Townhouse Ltd Partnership
2078. Summerwalk NPI III, L.P.
2079. Sunrise Associates Ltd Partnership
2080. Sunset Plaza Apartments
2081. Susquehanna View LP
2082. Sutton Place CCP V, LP
2083. Swift Creek Apts. of Hartsville, LP
2084. T.M. Alexander Associates, LTD.
2085. Tamarac Pines II Ltd Partnership
2086. Tamarac Pines Ltd Partnership
2087. Taunton II Associates
2088. Taunton Green Associates
2089. Teal Pointe Assoc., Ltd.
2090. The Glens LP
2091. The Meadows Apartments
2092. The Rogers Park Partnership
2093. The Trails GP Limited Partnership
2094. The Trails, LP
2095. Third Springhill Lake Limited Partnership
2096. Tiffany Rehab Associates Ltd Partnership
2097. Timberhill Associates LP
2098. Timberlake Apartments Ltd Partnership
2099. Timberwoods Associates, LP
2100. Timuquana Park Associates
2101. Tinker Creek Limited Partnership

<PAGE> 46

2102. Tompkins Terrace Associates
2103. Town North, a Limited Partnership
2104. Townview Towers I Partnership, Ltd.
2105. Tri-Properties Associates, LP
2106. Trianon Ltd. A LP
2107. Trinity Hills Village Apartments Ltd Partnership
2108. Trinity Towers 14th Street Associates Ltd Partnership
2109. Tumast Associates
2110. Twin Gables Associates Ltd Partnership
2111. Twin Towers Associates
2112. Two Bridges Associates Ltd Partnership
2113. Tyee Associates
2114. U.S. Shelter, LP
2115. United Front Homes
2116. United Handicap Federation Apartments Associates
2117. United House Associates
2118. United Housing Partners-Cuthbert Ltd
2119. United Housing Partners Elmwood Ltd
2120. United Housing Partners Morristown Ltd Partnership
2121. United Housing Partners Welch Ltd
2122. United Housing Partnership Carbondale Ltd
2123. United Redevelopment Associates Ltd Partnership
2124. University Plaza Associates
2125. Urbanizacion Maria Lopez Housing Company Ltd Partnership
2126. US Realty I Limited Partnership
2127. Vantage '78 Ltd Partnership
2128. Verdes Del Oriente
2129. Villa De Guadalupe Associates
2130. Village Apts.
2131. Village Circle Apartments Ltd Partnership
2132. Village Green Limited Partnership
2133. Village Green Apartments Company Ltd
2134. Vineville Towers Associates Ltd
2135. Vista APX, Ltd.
2136. Vistas De San Juan Associates Ltd Partnership
2137. Vistula Heritage Village
2138. VMS 1985-253 Ltd
2139. VMS 1985-254 Ltd
2140. VMS National Residential Portfolio II
2141. VMS National Residential Portfolio I
2142. Voltaire Assocs.
2143. Waico Phase II Associates Ltd Partnership
2144. Waico Apartments Associates Ltd Partnership
2145. Waipahu Associates
2146. Walden Oaks Associates Ltd Partnership
2147. Walden Pond Assoc., Ltd.
2148. Walden Joint Venture Limited Partnership

<PAGE> 47

2149. Walhalla Gardens LP
2150. Walmsley Terrace Associates Ltd Partnership
2151. Walnut Hills Associates Ltd
2152. Wash-West Properties
2153. Washington Manor Ltd Partnership
2154. Washington Chinatown Associates Ltd Partnership
2155. Waterford Square Apartments, Ltd.
2156. Waterman Ltd Partnership
2157. Waters Towers Associates Ltd Partnership
2158. Waynesboro Ltd.
2159. West Oak Village Limited Partnership
2160. Western Can Ltd
2161. Westgate Apartments
2162. Westlake Apts. Assocs.
2163. Westlake East Associates, L.P.
2164. Westminster Ltd Partnership
2165. Whispering Pines AIP 6 LP
2166. Whitefield Place Ltd Partnership
2167. Wigar Ltd Partnership
2168. Williamsburg South Apartments LP
2169. Winchester Gardens, Ltd.
2170. Windsor Apartments Associates Limited Partnership
2171. Windsor Crossings Limited Partnership
2172. Windsor Hills I LP
2173. Wingfield Investors LP
2174. Winnsboro Arms LP
2175. Winter Park Associates LP
2176. Wolf Ridge Apartments, Ltd.
2177. Wollaston Manor Associates
2178. Wood Creek CPGF 22, LP
2179. Woodcrest Apartments Ltd Partnership
2180. Woodhaven Associates, a Virginia Limited Partnership
2181. Woodland Apartments L.P.
2182. Woodmark Limited Partnership
2183. Woods of Inverness CPF 16, L.P.
2184. Woodside Village
2185. Woodside Villas of Arcadia Ltd
2186. Worcester Episcopal Housing Company
2187. Yadkin Associates Ltd Partnership
2188. AIMCO/NHP Acquisition Corp.
2189. Central Woodlawn Rehabilitation Joint Venture
2190. 62nd Street Joint Venture
2191. NHP Bayshore, L.P.
2192. NHP Hollymead, L.P.
2193. NHP Kingston L.P.
2194. NHP Pembroke Courts L.P.
2195. NHP Parkway L.P.

<PAGE> 48

2196. NHP Ramblewood L.P.
2197. NHP Villas L.P.
2198. NHP Cranbrook Club Limited Partnership
2199. NHP Park Village Limited Partnership
2200. NHP Tropical Gardens Limited Partnership
2201. NHP Woodshire, L.P.
2202. NHP Bayberry, L.P.
2203. NHP Carriage, L.P.
2204. NHP Center, L.P.
2205. NHP Cornerstone, LP
2206. NHP Dove, LP
2207. NHP Forest II, LP
2208. NHP Gates of Arlington, LP
2209. NHP Elk, LP
2210. NHP Green, LP
2211. NHP Heather I, LP
2212. NHP Heather II, LP
2213. NHP Lane, LP
2214. NHP Laurel III, LP
2215. NHP Twin, LP
2216. NHP Mill Creek, LP
2217. NHP Forest IV, LP
2218. NHP Oak, LP
2219. NHP Paradise Bay, LP
2220. NHP Park, LP
2221. NHP Parkview, LP
2222. NHP Pine Creek Manor, LP
2223. NHP Summer, LP
2224. NHP Summit, LP
2225. NHP Sunridge, LP
2226. NHP Regal, LP
2227. NHP Coach, LP
2228. NHP Villa, LP
2229. NHP Timberview, LP
2230. NHP Longfellow, LP
2231. NHP Port Richey, LP
2232. NHP Midland, LP
2233. NHP Woodcreek, LP

<PAGE> 1
Exhibit 23.1

CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in the Registration Statements
listed below of Apartment Investment and Management Company of our report dated
March 11, 1999, with respect to the consolidated financial statements and
schedules of Apartment Investment and Management Company included in its Annual
Report on Form 10-K for the year ended December 31, 1998.

Form S-3 (No. 333-828)
Form S-3 (No. 333-8997)
Form S-3 (No. 333-17431)
Form S-3 (No. 333-20755)
Form S-3 (No. 333-4546)
Form S-3 (No. 333-36531)
Form S-3 (No. 333-36537)
Form S-3 (No. 333-4542)
Form S-8 (No. 333-4550)
Form S-8 (No. 333-4548)
Form S-8 (No. 333-14481)
Form S-8 (No. 333-36803)
Form S-4 (No. 333-39357)
Form S-8 (No. 333-41719)
Form S-4 (No. 333-49075)
Form S-3 (No. 333-47201)
Form S-8 (No. 333-57617)
Form S-4 (No. 333-60663)
Form S-8 (No. 333-70409)
Form S-3 (No. 333-61409)
Form S-4 (No. 333-66207)
Form S-3 (No. 333-69121)
Form S-3 (No. 333-75109)
Form S-4 (No. 333-60355)

/s/ ERNST & YOUNG LLP

Denver, Colorado
March 29, 1999

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM 10-K AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-K.
</LEGEND>

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 127,131
<SECURITIES> 0
<RECEIVABLES> 33,708
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 2,802,598
<DEPRECIATION> (228,880)
<TOTAL-ASSETS> 4,268,285
<CURRENT-LIABILITIES> 0
<BONDS> 1,660,715
149,500
792,468
<COMMON> 485
<OTHER-SE> 1,109,611
<TOTAL-LIABILITY-AND-EQUITY> 4,268,285
<SALES> 401,242
<TOTAL-REVENUES> 431,692
<CGS> 260,149
<TOTAL-COSTS> 283,534
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 89,424
<INCOME-PRETAX> 64,474
<INCOME-TAX> 0
<INCOME-CONTINUING> 64,474
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 64,474
<EPS-PRIMARY> 0.84
<EPS-DILUTED> 0.80

</TABLE>

<PAGE> 1
EXHIBIT 99.1

Agreement Regarding Disclosure of Long-Term Debt Instruments

In reliance upon Item 601(b)(4)(iii)(A), of Regulation S-K,
Apartment Investment and Management Company, a Maryland corporation (the
"Company") has not filed as an exhibit to its Annual Report on Form 10-K for the
fiscal year ended December 31, 1998, any instrument with respect to long-term
debt not being registered where the total amount of securities authorized
thereunder does not exceed 10 percent of the total assets of the Company and its
subsidiaries on a consolidated basis. Pursuant to Item 601(b)(4)(iii)(A), of
Regulation S-K, the Company hereby agrees to furnish a copy of any such
agreement to the Securities Exchange Commission upon request.

APARTMENT INVESTMENT AND
MANAGEMENT COMPANY

By: /s/ PETER KOMPANIEZ
--------------------------
Peter Kompaniez
President