10-Q

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q

(Mark One)
[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2001
	OR
[  ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) 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)

Maryland (State or other jurisdiction of Incorporation or organization)	84-1259577 (I.R.S. Employer Identification No.)
2000 South Colorado Boulevard, Tower 2, Suite 2-1000 Denver, Colorado (Address of principal executive offices)	80222 (Zip Code)

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

Not Applicable
(Former name, former address, and former fiscal year,
if changed since last report)

      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 [   ]

The number of shares of Class A Common Stock outstanding as of April 30, 2001: 73,365,985

TABLE OF CONTENTS

EX-3.2 Amended/Restated Bylaws

EX-99.1 Agmt. Re: Disclosure of Long-Term Debt

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

FORM 10-Q

INDEX

			Page
	PART I.	FINANCIAL INFORMATION
ITEM 1.		Financial Statements
		Consolidated Balance Sheets as of March 31, 2001 (unaudited) and December 31, 2000		3
		Consolidated Statements of Income for the Three Months Ended March 31, 2001 and 2000		4
		(unaudited)
		Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2001 and		5
		2000 (unaudited)
		Notes to Consolidated Financial Statements (unaudited)		6
ITEM 2.		Management's Discussion and Analysis of Financial Condition and Results of Operations		17
ITEM 3.		Quantitative and Qualitative Disclosures about Market Risk		24
	PART II.	OTHER INFORMATION
ITEM 1.		Legal Proceedings		25
ITEM 2.		Changes in Securities and Use of Proceeds		25
ITEM 3.		Defaults Upon Senior Securities		25
ITEM 4.		Submission of Matters to a Vote of Security Holders		25
ITEM 5.		Other Information		25
ITEM 6.		Exhibits and Reports on Form 8-K		26
Signatures				28

2

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Data)

March 31, 2001							December 31, 2000
				(Unaudited)
			ASSETS
Real estate:
	Improved land			$	1,023,785		$	976,421
	Buildings and improvements				6,658,285			6,036,031
Total real estate					7,682,070			7,012,452
	Less accumulated depreciation				(1,196,092	)		(913,263	)
		Net real estate			6,485,978			6,099,189
Investments in unconsolidated real estate partnerships					615,987			676,188
Investments in unconsolidated subsidiaries					—			107,781
Investments in debt securities					110,576			—
Notes receivable from unconsolidated real estate partnerships					214,082			140,860
Notes receivable from and advances to unconsolidated subsidiaries, net					—			190,453
Cash and cash equivalents					113,739			157,115
Restricted cash					155,275			126,914
Accounts receivable					78,412			2,873
Deferred financing costs, net					50,316			44,403
Goodwill, net					111,539			100,532
Other assets					201,723			53,566
			Total assets	$	8,137,627		$	7,699,874
			LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Secured notes payable				$	3,553,309		$	3,258,342
Secured tax-exempt bond financing					773,035			773,033
Term loan					—			74,040
Credit facility					275,603			254,700
			Total indebtedness		4,601,947			4,360,115
Accounts payable					67,291			88,818
Accrued and other liabilities					210,752			211,324
Deferred rental income					11,267			5,611
Deferred taxes liability, net					34,167			—
Security deposits					31,714			28,332
			Total liabilities		4,957,138			4,694,200
Mandatorily redeemable convertible preferred securities					32,270			32,330
Minority interest in other entities					113,924			139,731
Minority interest in Operating Partnership					320,038			331,956
Stockholders’ equity:
	Preferred Stock, perpetual				379,020			315,770
	Preferred Stock, convertible				621,947			521,947
	Class A Common Stock, $.01 par value, 461,902,738 shares and 468,432,738   shares authorized, 73,523,297 and 71,337,217 shares issued and outstanding,   at March 31, 2001 and December 31, 2000, respectively				735			713
	Additional paid-in capital				2,175,904			2,072,208
	Accumulated other comprehensive income				3,550			—
	Notes receivable on common stock purchases				(41,971	)		(44,302	)
	Distributions in excess of earnings				(424,928	)		(364,679	)
			Total stockholders’ equity		2,714,257			2,501,657
			Total liabilities and stockholders’ equity	$	8,137,627		$	7,699,874

See notes to consolidated financial statements.

3

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

CONSOLIDATED STATEMENTS OF INCOME

(In Thousands, Except Per Share Data)
(Unaudited)

		Three Months Ended
		March 31,
		2001			2000
RENTAL PROPERTY OPERATIONS:
Rental and other property revenues		$	322,234		$	224,320
Property operating expense			(125,686	)		(90,751	)
Owned property management expense			(3,210	)		(2,104	)
Income from property operations			193,338			131,465
SERVICE COMPANY BUSINESS:
Management fees and other income from affiliates			51,020			10,025
Management and other expenses			(32,049	)		(3,904	)
General and administrative expenses allocation			(1,281	)		(1,053	)
Amortization of intangibles			(4,901	)		(1,575	)
Income from service company business			12,789			3,493
General and administrative expenses:
	Before allocation		(4,092	)		(4,264	)
	Allocation to consolidated service company business		1,281			1,053
General and administrative expenses, net			(2,811	)		(3,211	)
Depreciation on rental property			(105,391	)		(61,291	)
Interest expense			(87,216	)		(58,207	)
Interest and other income			14,663			13,004
Equity in earnings (losses) of unconsolidated real estate partnerships			(4,476	)		2,445
Equity in earnings of unconsolidated subsidiaries			—			2,771
Minority interest in other entities			(5,625	)		(7,120	)
Income before gain on disposition of properties and minority interest in Operating Partnership			15,271			23,349
Gain on disposition of properties, net			66			5,105
Income before minority interest in Operating Partnership			15,337			28,454
Minority interest in Operating Partnership, common			782			(989	)
Minority interest in Operating Partnership, preferred			(2,101	)		(1,583	)
Net income			14,018			25,882
Net income attributable to preferred stockholders			18,695			14,515
Net income (loss) attributable to common stockholders		$	(4,677	)	$	11,367
Basic earnings (loss) per common share		$	(0.07	)	$	0.17
Diluted earnings (loss) per common share		$	(0.07	)	$	0.17
Dividends declared per common share		$	0.78		$	0.70

See notes to consolidated financial statements.

4

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)

				Three Months Ended
				March 31,
				2001			2000
CASH FLOWS FROM OPERATING ACTIVITIES:
	Net income			$	14,018		$	25,882
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation and amortization			110,292			62,866
		Gain on disposition of properties			(66	)		(5,105	)
		Gain on sale of investments			(7,148	)		—
		Minority interest in Operating Partnership			1,319			2,572
		Minority interest in other entities			5,625			7,120
		Equity in (earnings) losses of unconsolidated real estate partnerships			4,476			(2,445	)
		Equity in earnings of unconsolidated subsidiaries			—			(2,771	)
		Changes in operating assets and operating liabilities			(43,363	)		(18,562	)
			Total adjustments		71,135			43,675
			Net cash provided by operating activities		85,153			69,557
CASH FLOWS FROM INVESTING ACTIVITIES:
	Purchase of and additions to real estate				(65,099	)		(39,389	)
	Proceeds from sales of property				30,147			16,953
	Proceeds from sales of investments				137,899			—
	Cash from newly consolidated properties				22,486			14,179
	Purchase of notes receivable, general and limited partnership interests and other assets				(36,801	)		(102,814	)
	Purchase of/additions to notes receivable				(27,083	)		(21,114	)
	Proceeds from repayment of notes receivable				3,584			8,684
	Cash paid in connection with mergers/acquisitions				(16,777	)		—
	Cash paid for merger/acquisition related costs				(10,144	)		(4,679	)
	Distributions received from investments in unconsolidated real estate partnerships				18,743			18,976
			Net cash provided by (used in) investing activities		56,955			(109,204	)
CASH FLOWS FROM FINANCING ACTIVITIES:
	Proceeds from secured notes payable borrowings				75,849			82,762
	Principal repayments on secured notes payable				(69,635	)		(38,082	)
	Principal repayments on secured tax-exempt bond financing				(3,254	)		(1,572	)
	Principal repayments on secured short-term financing				(25,105	)		—
	Net borrowings (paydowns) on term loan and revolving credit facilities				(120,170	)		68,000
	Payment of loan costs				(417	)		(3,603	)
	Proceeds from issuance of common and preferred stock, exercise of options/warrants				62,970			35,720
	Repurchase of Class A Common Stock and Operating Partnership Units				(8,922	)		(2,515	)
	Principal repayments received on notes due from officers on Class A Common Stock purchases				4,521			3,526
	Payment of common stock dividends				(55,138	)		(45,642	)
	Payment of distributions to minority interest				(27,054	)		(12,198	)
	Payment of preferred stock dividends				(19,129	)		(11,463	)
			Net cash provided by (used in) financing activities		(185,484	)		74,933
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS					(43,376	)		35,286
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD					157,115			101,604
CASH AND CASH EQUIVALENTS AT END OF PERIOD				$	113,739		$	136,890

See notes to consolidated financial statements.

5

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2001
(Unaudited)

NOTE 1 — Organization

      Apartment Investment and Management Company, a Maryland corporation incorporated on January 10, 1994 (“AIMCO” and, together with its consolidated subsidiaries and other controlled entities, the “Company”), owns a majority of the ownership interests in AIMCO Properties, L.P., (the “AIMCO Operating Partnership”) through its wholly owned subsidiaries, AIMCO-GP, Inc. and AIMCO-LP, Inc. The Company held an approximate 86% interest in the AIMCO Operating Partnership as of March 31, 2001. AIMCO-GP, Inc. is the sole general partner of the AIMCO Operating Partnership.

      As of March 31, 2001, AIMCO:

• owned or controlled (consolidated) and managed 157,368 units in 580 apartment properties;

• held an equity interest in (unconsolidated) and managed 99,374 units in 612 apartment properties; and

• managed 56,634 units in 451 apartment properties for third party owners.

      At March 31, 2001, AIMCO had 73,523,297 shares of Class A Common Stock (the “Common Stock”) outstanding and the AIMCO Operating Partnership had 8,745,129 Partnership Common Units (“Common OP Units”) outstanding and 2,379,084 special units (excluding units held by the Company), for a combined total of 84,647,510 shares of Common Stock, Common OP Units, and special units outstanding.

NOTE 2 — Basis of Presentation

      The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2001 are not necessarily indicative of the results that may be expected for the year ending December 31, 2001.

      The balance sheet at December 31, 2000 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

      For further information, refer to the statements and notes thereto included in the AIMCO annual report on Form 10-K for the year ended December 31, 2000. Certain 2000 financial statement amounts have been reclassified to conform to the 2001 presentation.

      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 are reflected as minority interest in other entities. All significant intercompany balances and transactions have been eliminated in consolidation. Minority interest in limited partnerships represents the non-controlling partners’ share of the underlying net assets of the Company’s controlled limited partnerships. With regard to such partnerships, losses in excess of the minority partners' basis of $10.9 million for the three months ended March 31, 2001 have been charged to operations. The assets of property owning limited partnerships and limited liability companies owned or controlled by AIMCO or the AIMCO Operating Partnership generally are not available to pay creditors of AIMCO or the AIMCO Operating Partnership.

6

NOTE 3 — Acquisitions

      During the three months ended March 31, 2001 the Company purchased:

• for $47 million, limited partnership interests in 145 partnerships (which own 292 properties) where AIMCO serves as general partner;

• one apartment community with details below:

Date Acquired	Location	Number of Units	Purchase Price
March 2001	Naperville, IL	240	$19 million

      On March 26, 2001, the Company completed a merger pursuant to an agreement entered into on November 29, 2000 between AIMCO and Oxford Tax Exempt Fund II Limited Partnership (“OTEF”), for a total purchase price of $270 million, comprised of $100 million in Class P Convertible Cumulative Preferred Stock (the “Class P Preferred Stock”), $106 million in Common Stock issued at $48.46 per share, $17 million in cash, and $47 million in assumed liabilities. OTEF merged with a subsidiary of the AIMCO Operating Partnership. In connection with the Company’s acquisition of interests in properties (the “Oxford properties”) from affiliates of Oxford Realty Financial Group, Inc., on September 20, 2000, the Company had acquired interests in OTEF’s managing general partner and OTEF’s associate general partner. After the merger, the Company’s interests in OTEF include a 1% general partner interest held by OTEF’s managing general partner and a 99% limited partner interest held by the AIMCO Operating Partnership. OTEF was a publicly traded master limited partnership that invested primarily in tax-exempt bonds issued to finance high quality apartment and senior living/health care communities, the majority of which were owned by affiliates of OTEF, including Oxford entities. In the merger, each BAC was converted into the right to receive 0.299 shares of Common Stock and 0.547 shares of AIMCO’s Class P Preferred Stock. In addition, the BAC holders received a special distribution of $50 million, or $6.21 per BAC.

NOTE 4 — Notes Receivable

      The following table summarizes the Company’s notes receivable from unconsolidated real estate partnerships and subsidiaries at March 31, 2001 and 2000 (in thousands):

	Notes Receivable from				Notes Receivable from
	Unconsolidated Real Estate				Unconsolidated
	Partnerships						Subsidiaries
	2001		2000			2001			2000
Par value notes	$	53,473	$	52,425		$		—	$	89,633
Discounted notes		160,609		67,273			—			—
Total	$	214,082	$	119,698		$		—	$	89,633

      The Company recognizes interest income earned from its investments in notes receivable based upon whether the collectibility of such amounts is both probable and estimable. The notes receivable were either extended by the Company and are carried at the face amount plus accrued interest (“par value notes”) or were made by predecessors whose positions have been acquired by the Company at a discount and are carried at the acquisition amount using the cost recovery method (“discounted notes”).

      As of March 31, 2001 and March 31, 2000, the Company held $53.5 million and $52.4 million, respectively, of par value notes receivable from unconsolidated real estate partnerships, including accrued interest, for which management believes the collectibility of such amounts is both probable and estimable. As such, interest income from the par value notes is generally recognized as it is earned. Interest income from the par value

7

notes for the three months ended March 31, 2001 and 2000, totaled $6.3 million and $3.8 million, respectively.

      As of March 31, 2001 and 2000, the Company held discounted notes, including accrued interest, with a carrying value of $160.6 million and $67.3 million, respectively. The total face value plus accrued interest of these notes were $237.7 million and $141.4 million in 2001 and 2000, respectively. Effective January 1, 2001, the Company now consolidates its previously unconsolidated subsidiaries (see Note 10). As a result, the notes receivable from unconsolidated subsidiaries have been eliminated and notes receivable from unconsolidated real estate partnerships have increased, and includes discounted notes which were held at the previously unconsolidated subsidiaries. In general, interest income from the discounted notes is not recognized as it is earned until such time as the timing and amounts of cash flows are probable and estimable.

      Under the cost recovery method, the discounted notes are carried at the acquisition amount, less subsequent cash collections, until such time as collectibility is probable and the timing and amounts are estimable. Based upon closed or pending transactions (including sales activity), market conditions, and improved operations of the obligor, among other things, certain notes and the related discounts have been determined to be collectible. Accordingly, interest income that had previously been deferred and portions of the related discounts were recognized as interest income during the period. For the three months ended March 31, 2001 and 2000, the Company recognized deferred interest income and discounts of approximately $1.4 million ($0.02 per basic and diluted share) and $6.2 million ($0.08 per basic and diluted share). Approximately 90% of the recognized interest income is collected in cash or recapitalized within 12 months from the date that such amounts were determined to be collectible, and the remainder is collected in the following six months.

NOTE 5 — 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 and its subsidiaries taken as a whole.

   Limited Partnerships

      In connection with the Company’s acquisitions of 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 any 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.

   Pending Investigations of HUD Management Arrangements

      In July 1999, the National Housing Partnership (“NHP”) received a grand jury subpoena requesting documents relating to NHP’s management of HUD-assisted or HUD-insured multi-family projects and NHP’s operation of a group purchasing program created by NHP, known as Buyers Access. The subpoena relates to the same subject matter as subpoenas NHP received in October and December of 1997 from the HUD Inspector General. To date, neither the HUD Inspector General nor the grand jury has initiated any action against NHP or AIMCO or, to NHP’s or AIMCO’s knowledge, any owner of HUD property managed by NHP. AIMCO believes that NHP’s operations and programs are in compliance, in all material respects, with all laws, rules and regulations relating to HUD-assisted or HUD-insured properties. AIMCO is cooperating with the investigation and does not believe that the investigation will result in a material adverse effect on the financial condition of the Company. However, as with any similar investigation, there can be no assurance that these will not result in material fines, penalties or other costs that may impact the Company’s future results of operations or cash flows.

   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

8

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, the Company could potentially be liable for environmental liabilities or costs associated with properties or properties it acquires or manages in the future.

NOTE 6 — Stockholders’ Equity

					Class A
	Preferred Stock				Common Stock									Notes						Accumulated
											Additional			Receivable			Distributions			other
	Shares				Shares						Paid-in			from			in Excess			Comprehensive
(In Thousands)	Issued		Amount		Issued			Amount			Capital			Officers			of Earnings			Income		Total
BALANCE DECEMBER 31, 2000		30,174	$	837,717		71,337		$	713		$	2,072,208		$	(44,302	)	$	(364,679	)	$	—	$	2,501,657
Net proceeds from issuances of   Preferred Stock		2,530		63,250		—			—			(2,226	)		—			—			—		61,024
Repurchase of Class A Common   Stock		—		—		(185	)		(2	)		(7,650	)		—			—			—		(7,652	)
Conversion of mandatorily redeemable   convertible preferred securities to Class   A Common Stock		—		—		1			—			60			—			—			—		60
Conversion of AIMCO Operating   Partnership units to Class A Common   Stock		—		—		68			1			3,096			—			—			—		3,097
Purchase of stock by officers and   awards of restricted stock		—		—		52			1			2,077			(2,190	)		—			—		(112	)
Repayment of notes receivable from   officers		—		—		—			—			—			4,521			—			—		4,521
Class P Preferred Stock issued as   consideration for the OTEF merger		4,000		100,000		—			—			—			—			—			—		100,000
Stock options and warrants exercised		—		—		65			—			2,056			—			—			—		2,056
Class A Common Stock issued as   consideration for the OTEF merger		—		—		2,185			22			106,283			—			—			—		106,305
Net income		—		—		—			—			—			—			14,018			—		14,018
Dividends paid — Class A Common   Stock		—		—		—			—			—			—			(55,138	)		—		(55,138	)
Dividends paid — Preferred Stock		—		—		—			—			—			—			(19,129	)		—		(19,129	)
Unrealized gain on investments		—		—		—			—			—			—			—			3,550		3,550
BALANCE MARCH 31, 2001		36,704	$	1,000,967		73,523		$	735		$	2,175,904		$	(41,971	)	$	(424,928	)	$	3,550	$	2,714,257

   Preferred Stock

      On March 26, 2001, AIMCO issued 4,000,000 shares of newly created Class P Preferred Stock, par value $.01 per share, in connection with the OTEF merger. The Class P Preferred Stock is valued at $100 million based on a $25 per share liquidation preference. Holders of Class P Preferred Stock are entitled to receive, when and as declared by the AIMCO board of directors, cash dividends in an amount per share equal to the greater of (i) $2.25 per year (equivalent to 9% of the liquidation preference) or (ii) the cash dividends payable on the number of shares of Common Stock into which a share of Class P Preferred Stock is convertible. Each share of Class P Preferred Stock is convertible at the option of the holder into 0.4464 shares of Common Stock, subject to certain anti-dilutive adjustments. The initial conversion ratio was in excess of the fair market value of the Common Stock on the commitment date. The Class P Preferred Stock is senior to Common Stock as to dividends and liquidation. Upon any liquidation, dissolution or winding up of the Company, before payments or distributions by the Company are made to any holders of Common Stock, the holders of the Class P Preferred Stock are entitled to receive a liquidation preference of $25 per share, plus accumulated, accrued and unpaid dividends.

      On March 19, 2001, AIMCO completed the sale of 2,200,000 shares of its Class Q Cumulative Preferred Stock, $.01 par value per share (the “Class Q Preferred Stock”), in an underwritten public offering. AIMCO also gave the

9

underwriters an option to purchase up to 330,000 additional shares of the Class Q Preferred Stock to cover over-allotments, which was exercised on March 29, 2001. The net proceeds of approximately $61 million were used to repay short-term indebtedness. Holders of Class Q Preferred Stock are entitled to receive, when and as declared by the AIMCO board of directors cash dividends in an amount per share equal to $2.525 per year (equivalent to 10.10% of the liquidation preference). On and after March 19, 2006, the Company may redeem the Class Q Preferred Stock for cash at a price per share equal to the $25 liquidation preference plus accumulated, accrued and unpaid dividends, if any, to the redemption date. The Class Q Preferred Stock is senior to Common Stock as to dividends and liquidation. Upon any liquidation, dissolution or winding up of AIMCO, before payments or distributions by AIMCO are made to any holders of Common Stock, the holders of the Class Q Preferred Stock are entitled to receive a liquidation preference of $25 per share, plus accumulated, accrued and unpaid dividends.

   Common Stock

      On March 26, 2001, AIMCO issued approximately 2.2 million shares of Class A Common Stock in connection with the OTEF merger. Pursuant to the agreement of merger, each OTEF BAC was converted into the right to receive 0.299 shares of Common Stock.

      During the three months ended March 31, 2001, the Company repurchased and retired approximately 185,000 shares of Class A Common Stock at an average price of $41.36 per share.

      During the three months ended March 31, 2001, 68,191 shares of Class A Common Stock were issued in exchange for Common OP Units.

NOTE 7 — 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. The following tables illustrate the calculation of basic and diluted earnings per share for the three months ended March 31, 2001 and 2000 (in thousands, except per share data):

			Three Months Ended
			March 31,
			2001			2000
NUMERATOR:
Net income			$	14,018		$	25,882
Preferred stock dividends				(18,695	)		(14,515	)
Numerator for basic and diluted earnings per share — income (loss) attributable to common stockholders			$	(4,677	)	$	11,367
DENOMINATOR:
Denominator for basic earnings per share — weighted average number of shares of common stock outstanding				70,619			65,947
Effect of dilutive securities:
Dilutive potential common shares, options and warrants				—			368
Denominator for dilutive earnings per share				70,619			66,315
Basic earnings (loss) per common share:
	Operations		$	(0.07	)	$	0.09
	Gain on disposition of properties			—			0.08
		Total	$	(0.07	)	$	0.17
Diluted earnings (loss) per common share:
	Operations		$	(0.07	)	$	0.09
	Gain on disposition of properties			—			0.08
		Total	$	(0.07	)	$	0.17

10

NOTE 8 — Industry Segments

      AIMCO has two reportable segments: real estate and service business. The Company owns and operates multi-family apartment communities throughout the United States and Puerto Rico which generate rental and other property related income through the leasing of apartment units to a diverse base of residents. The Company separately evaluates the performance of each of its apartment communities. However, because each of the apartment communities has similar economic characteristics, facilities, services and residents, the apartment communities have been aggregated into a single apartment communities segment, or real estate segment. There are different components of the multi-family business for which management considers disclosure to be useful. All real estate revenues are from external customers and no revenues are generated from transactions with other segments. There were no residents that contributed 10% or more of the Company’s total revenues during the three months ended March 31, 2001 and 2000. The Company also manages apartment properties for third parties and affiliates through its service company business segment. As disclosed, a significant portion of the revenues of the service business are from affiliates of the Company.

      The performance measure used by management of the Company for each segment is its contribution to free cash flow (“Free Cash Flow” (“FCF”)). Free Cash Flow is defined by the Company as net operating income minus the capital spending required to maintain the related assets. Free Cash Flow measures profitability prior to the cost of capital. Other performance measures also used by management of the Company include Funds From Operations (“FFO”), Adjusted Funds From Operations (“AFFO”) and Earnings Before Structural Depreciation (“EBSD”).

      The following tables present the contribution (separated between consolidated and unconsolidated activity) to the Company’s Free Cash Flow for the three months ended March 31, 2001 and 2000 from these segments, and a reconciliation of Free Cash Flow to Funds From Operations, Adjusted Funds From Operations, and net income (in thousands, except equivalent units (ownership effected and period weighted) and monthly rents):

11

FREE CASH FLOW FROM BUSINESS COMPONENTS
For the Three Months Ended March 31, 2001 and 2000
(in thousands)

								2001											2000
					Consolidated			Unconsolidated		Total			%			Consolidated			Unconsolidated		Total			%
Real Estate
Conventional
	Average monthly rent greater than $900 per unit (equivalent units of 15,785 and 7,417 for 2001 and 2000)				$	37,585		$	2,498	$	40,083			19.2	%	$	13,674		$	2,012	$	15,686			10.2	%
	Average monthly rent $800 to $900 per unit (equivalent units of 12,183 and 7,952 for 2001 and 2000)					23,201			1,261		24,462			11.7	%		12,986			1,848		14,834			9.7	%
	Average monthly rent $700 to $800 per unit (equivalent units of 15,759 and 10,617 for 2001 and 2000)					23,947			2,057		26,004			12.4	%		11,432			2,705		14,137			9.2	%
	Average monthly rent $600 to $700 per unit (equivalent units of 38,355 and 32,658 for 2001 and 2000)					46,033			4,361		50,394			24.1	%		27,916			5,025		32,941			21.5	%
	Average monthly rent $500 to $600 per unit (equivalent units of 36,019 and 46,053 for 2001 and 2000)					32,663			3,783		36,446			17.4	%		35,006			4,982		39,988			26.0	%
	Average monthly rent less than $500 per unit (equivalent units of 16,292 and 26,549 for 2001 and 2000)					10,473			373		10,846			5.2	%		14,818			1,999		16,817			11.0	%
				Subtotal conventional real estate contribution to Free Cash Flow		173,902			14,333		188,235			89.9	%		115,832			18,571		134,403			87.5	%
Affordable (equivalent units of 14,692 and 13,521 for 2001 and 2000)						5,533			6,496		12,029			5.7	%		2,809			8,449		11,258			7.3	%
College housing (average rent of $630 and $663 per month for 2001 and 2000) (equivalent units of 3,365 and 3,962 for 2001 and 2000)						2,950			173		3,123			1.5	%		3,256			340		3,596			2.3	%
Other real estate						1,615			17		1,632			0.8	%		440			665		1,105			0.7	%
Resident services						(130	)		77		(53	)		0.0	%		1,407			159		1,566			1.0	%
Minority interest						(25,204	)		—		(25,204	)		(12.0	%)		(18,696	)		—		(18,696	)		(12.2	%)
		Total real estate contribution to Free Cash Flow				158,666	(1)		21,096		179,762			85.9	%		105,048	(1)		28,184		133,232			86.8	%
Service Business
	Management contracts (property and asset management)
			Controlled properties			7,185			—		7,185			3.4	%		3,417			1,862		5,279			3.4	%
			Third party with terms in excess of one year			196			—		196			0.1	%		—			2,185		2,185			1.4	%
			Third party cancelable in 30 days			325			—		325			0.2	%		—			257		257			0.2	%
			Other service income			2,514			—		2,514			1.2	%		532			1,142		1,674			1.1	%
				Service business contribution to Free Cash Flow before fees		10,220			—		10,220			4.9	%		3,949			5,446		9,395			6.1	%
Activity based fees						7,470			—		7,470			3.6	%		1,119			—		1,119			0.7	%
			Total service business contribution to Free Cash Flow			17,690	(2)		—		17,690			8.5	%		5,068	(2)		5,446		10,514			6.8	%
Interest income
	General partner loan interest					6,334			—		6,334			3.0	%		3,815			—		3,815			2.5	%
	Transactional income					4,735			—		4,735			2.3	%		6,191			—		6,191			4.0	%
	Money market and interest bearing accounts					3,127			—		3,127			1.5	%		2,532			—		2,532			1.6	%
	Other notes receivable					467			—		467			0.2	%		466			—		466			0.3	%
			Total interest income contribution to Free Cash Flow			14,663			—		14,663			7.0	%		13,004			—		13,004			8.5	%
General and Administrative Expense						(2,811	)		—		(2,811	)		(1.3	%)		(3,211	)		—		(3,211	)		(2.1	%)
Free Cash Flow (FCF) (4)						188,208			21,096		209,304			100	%		119,909			33,630		153,539			100	%

12

FREE CASH FLOW FROM BUSINESS COMPONENTS
For the Three Months Ended March 31, 2001 and 2000
(in thousands)

								2001										2000
					Consolidated				Unconsolidated			Total			Consolidated				Unconsolidated			Total
Free Cash Flow (FCF)(4)						188,208				21,096			209,304			119,909				33,630			153,539
Interest expense:
	Secured debt
			Long-term, fixed rate			(75,675	)			(9,870	)		(85,545	)		(40,968	)			(9,945	)		(50,913	)
			Long-term, variable rate			(722	)			(2,524	)		(3,246	)		(176	)			(431	)		(607	)
			Short-term			(2,188	)			(106	)		(2,294	)		(10,850	)			(811	)		(11,661	)
	Lines of credit and other unsecured debt					(9,738	)			(1	)		(9,739	)		(5,778	)			(248	)		(6,026	)
	Interest expense on convertible preferred securities					(525	)			—			(525	)		(2,429	)			—			(2,429	)
	Interest capitalized					1,632				—			1,632			1,994				1,165			3,159
				Total interest expense before minority interest		(87,216	)			(12,501	)		(99,717	)		(58,207	)			(10,270	)		(68,477	)
	Minority interest share of interest expense					12,678				—			12,678			7,940				—			7,940
				Total interest expense after minority interest		(74,538	)			(12,501	)		(87,039	)		(50,267	)			(10,270	)		(60,537	)
Distributions on preferred OP units						(2,101	)			—			(2,101	)		(1,583	)			—			(1,583	)
Dividends on preferred securities owned by minority interest						(678	)			—			(678	)		(678	)			—			(678	)
Dividends on preferred stock						(18,695	)			—			(18,695	)		(14,515	)			—			(14,515	)
		Total dividends / distributions on preferred securities				(21,474	)			—			(21,474	)		(16,776	)			—			(16,776	)
Non-structural depreciation, net of capital replacements						(3,836	)			(289	)		(4,125	)		(851	)			(950	)		(1,801	)
Amortization of intangibles						(4,901	)			—			(4,901	)		(1,575	)			(508	)		(2,083	)
Gain on disposition of properties						66				—			66			5,105				—			5,105
Deferred tax provision						—				—			—			—				(852	)		(852	)
	Earnings Before Structural Depreciation (EBSD)(4)					83,525				8,306			91,831			55,545				21,050			76,595
Structural depreciation, net of minority interest in other entities						(84,508	)			(12,782	)		(97,290	)		(48,405	)			(15,834	)		(64,239	)
	Net income (loss) attributable to common OP Unitholders and stockholders					(983	)			(4,476	)(3)		(5,459	)		7,140				5,216	(3)		12,356
Gain on disposition of properties						(66	)			—			(66	)		(5,105	)			—			(5,105	)
Structural depreciation, net of minority interest in other entities						84,508				12,782			97,290			48,405				15,834			64,239
Non-structural depreciation, net of minority interest in other entities						13,304				2,224			15,528			8,572				3,128			11,700
Amortization of intangibles						4,901				—			4,901			1,575				508			2,083
Deferred tax provision						—				—			—			—				852			852
	Funds from Operations (FFO) (4)					101,664				10,530			112,194			60,587				25,538			86,125
Capital replacement reserve						(9,468	)			(1,935	)		(11,403	)		(7,721	)			(2,178	)		(9,899	)
	Adjusted Funds From Operations (AFFO) (4)				$	92,196			$	8,595		$	100,791		$	52,866			$	23,360		$	76,226

							Earnings (Loss)							Earnings
		Earnings (Loss)			Shares		Per Share			Earnings		Shares		Per Share
EBSD
	Basic	$	91,831			81,750				$	76,595		72,307
	Diluted		106,416			98,575					88,592		87,150
Net Income (Loss)
	Basic		(5,459	)		81,750	$	(0.07	)		12,356		72,307	$	0.17
	Diluted		(5,459	)		81,750	$	(0.07	)		12,356		72,675	$	0.17
FFO
	Basic		112,194			81,750					86,125		72,307
	Diluted		126,779			98,575					98,122		87,150
AFFO
	Basic		100,791			81,750					76,226		72,307
	Diluted		115,376			98,575					88,223		87,150

13

(1) Reconciliation of total consolidated real estate contribution to Free Cash Flow to consolidated rental and other property revenues:

		2001		2000
Consolidated real estate contribution to Free Cash Flow		$	158,666	$	105,048
Plus: minority interest			25,204		18,696
Plus: capital replacement reserves			9,468		7,721
Plus: property operating expenses			125,686		90,751
Plus: owned property management expenses			3,210		2,104
	Rental and other property revenues	$	322,234	$	224,320

(2) Reconciliation of total service business contribution to Free Cash Flow to consolidated management fees and other income from affiliates:

		2001		2000
Consolidated service business contribution to Free Cash Flow		$	17,690	$	5,068
Plus: management and other expenses			32,049		3,904
Plus: general and administrative expenses allocation			1,281		1,053
	Management fees and other income from affiliates	$	51,020	$	10,025

(3) Reconciliation of unconsolidated net income attributable to common OP unitholders and stockholders to equity in earnings (losses) of unconsolidated real estate partnerships and equity in earnings (losses) of unconsolidated subsidiaries:

			2001			2000
Equity in earnings of unconsolidated subsidiaries			$	—		$	2,771
Equity in earnings (losses) of unconsolidated real estate
	partnerships			(4,476	)		2,445
		Unconsolidated net income (loss) attributable to common OP unitholders and stockholders	$	(4,476	)	$	5,216

(4) Free Cash Flow, Earnings Before Structural Depreciation, Funds From Operations, and Adjusted Funds From Operations are measurement standards used by the Company’s management. These should not be considered alternatives to net income or net cash flow from operating activities, as determined in accordance with GAAP, as an indication of the Company’s performance or as a measure of liquidity.

    • “Free Cash Flow” is defined by the Company as net operating income minus the capital spending required to maintain the related assets. It measures profitability prior to the cost of capital.

    • “Earnings Before Structural Depreciation” is defined by the Company as Net Income, determined in accordance with GAAP, plus “structural depreciation”, i.e., depreciation of buildings and land improvements whose useful lives exceed 20 years.

    • “Funds From Operations” is defined by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”) 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 (diluted) based on the NAREIT definition, as further adjusted for minority interest in the AIMCO Operating Partnership, amortization of intangibles for which no economic loss is anticipated or occurring, interest expense on mandatorily convertible preferred securities, the non-cash deferred portion of the income tax provision and less the payment of dividends on perpetual and non-dilutive convertible preferred stock. There can be no assurance that the Company’s basis for computing FFO is comparable with that of other real estate investment trusts.

    • “Adjusted Funds From Operations” (“AFFO”) is defined by the Company as FFO less a charge for capital

14

replacements equal to at least $300 per apartment unit.

Reconciliation of FCF, EBSD, FFO and AFFO to Net Income:

	For the Three Months Ended March 31, 2001												For the Three Months Ended March 31, 2000
	FCF			EBSD			FFO			AFFO			FCF			EBSD			FFO			AFFO
Amount per Free Cash Flow schedule above	$	209,304		$	91,831		$	112,194		$	100,791		$	153,539		$	76,595		$	86,125		$	76,226
Total interest expense after minority interest		(87,039	)		—			—			—			(60,537	)		—			—			—
Dividends on preferred securities owned by minority interest		(678	)		—			—			—			(678	)		—			—			—
Distributions on preferred OP units		—			2,101			2,101			2,101			—			1,583			1,583			1,583
Dividends on preferred stock		—			18,695			18,695			18,695			—			14,515			14,515			14,515
Structural depreciation, net of minority interest		(97,290	)		(97,290	)		(97,290	)		(97,290	)		(64,239	)		(64,239	)		(64,239	)		(64,239	)
Non-structural depreciation, net of minority interest		(15,528	)		—			(15,528	)		(15,528	)		(11,700	)		—			(11,700	)		(11,700	)
Capital replacements reserve		11,403			—			—			11,403			9,899			—			—			9,899
Amortization of intangibles		(4,901	)		—			(4,901	)		(4,901	)		(2,083	)		—			(2,083	)		(2,083	)
Gain on sale		66			—			66			66			5,105			—			5,105			5,105
Deferred income tax provision		—			—			—			—			(852	)		—			(852	)		(852	)
Minority interest in Operating Partnership		(1,319	)		(1,319	)		(1,319	)		(1,319	)		(2,572	)		(2,572	)		(2,572	)		(2,572	)
Net Income	$	14,018		$	14,018		$	14,018		$	14,018		$	25,882		$	25,882		$	25,882		$	25,882

ASSETS:
		March 31, 2001		December 31, 2000
Total assets for reportable segments (1)		$	7,094,761	$	6,522,114
Corporate and other assets			1,042,866		1,177,760
	Total consolidated assets	$	8,137,627	$	7,699,874

(1) Assets associated with the service business are immaterial, and therefore included in total assets for reportable segments, and not separately disclosed.

NOTE 9 — Derivative Financial Instruments

      In June 1998, Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities (“Statement 133”) was issued. In June 2000, Statement of Financial Accounting Standards No. 138, Accounting for Certain Derivative Instruments and Hedging Activities (“Statement 138”), an amendment of Statement 133 was issued. Statements 133 and 138 require that all derivative instruments be recorded on the balance sheet at their fair value. Changes in the fair value of derivatives are recorded each period in current earnings or other comprehensive income, depending on whether a derivative is designated as part of a hedge transaction and, if it is, the type of hedge transaction.

      The Company predominately uses long-term, fixed-rate and self-amortizing non-recourse debt in order to avoid, among other things, risk related to fluctuating interest rates. Where the Company does use variable-rate debt, occasionally the Company enters into short-term economic hedges, such as interest rate swap agreements and interest rate cap agreements, to reduce its exposure to interest rate fluctuations. The interest rate swap agreements are generally utilized by the Company to modify the Company’s exposure to interest rate risk by converting the variable-rate debt to a fixed rate. The interest rate cap agreements utilized by the Company effectively limit the Company’s exposure to interest rate risk by providing a ceiling on the underlying variable rate debt. Normally, the interest rate caps are embedded within the original debt contract and considered clearly and closely related to the debt contract and, therefore are not measured as separate derivative instruments. The Company adopted Statements

15

133 and 138 on January 1, 2001. Due to the Company’s limited use of derivative instruments, the adoption of Statements 133 and 138 did not have a material effect on the Company’s financial statements.

NOTE 10 — Consolidation of Subsidiaries

      In prior years, in order to satisfy certain requirements of the Internal Revenue Code applicable to the Company’s status as a REIT, certain assets of the Company were held through unconsolidated subsidiaries in which the AIMCO Operating Partnership held non-voting preferred stock representing a 99% economic interest and certain officers and directors of the Company held all of the voting common stock, representing a 1% economic interest. As a result of the controlling ownership interest in the unconsolidated subsidiaries being held by others, the Company accounted for its interest in the unconsolidated subsidiaries using the equity method.

      The REIT Modernization Act, which became effective January 1, 2001, among other things, permits REITS to own taxable REIT subsidiaries. Therefore, effective January 1, 2001, the Company acquired the 1% controlling ownership interest in the unconsolidated subsidiaries. As a result, the Company now consolidates these subsidiaries. The following table provides selected financial information assuming these subsidiaries were consolidated in the prior year (in thousands):

	For the Three Months Ended
Operating Data:	March 31, 2000
Income from rental property operations		$	131,465
Income from service company business			9,115
Interest and other income			14,316
Interest expense			(59,241	)
Net income			25,882

Balance Sheet Data:	As of December 31, 2000
Real estate	$	6,370,288
Total assets		8,043,846
Total indebtedness		4,625,314
Total liabilities		5,015,416
Stockholders’ equity		2,501,657

NOTE 11 — Transactional Income

      For the three months ended March 31, 2001, the Company's interest and other income included transactional income (gains on sale of bonds or accretion of discounted notes) of $4.7 million, net of allocated expenses of $3.8 million.

      The Company received proceeds of approximately $138 million from the sale of certain of the tax-exempt mortgage bonds. Certain remaining tax-exempt mortgage bonds have been classified as available for sale and carried at estimated fair value of approximately $111 million. Unrealized gains and losses are recorded in other comprehensive income. Realized gains and losses are determined on the specific identification method and are reflected in net income.

16

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

      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 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; the 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 residents 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 current and continuing qualification as a real estate investment trust involves the application of highly technical and complex provisions of the Internal Revenue Code and depends on its ability to meet the various requirements imposed by the Internal Revenue Code, through actual operating results, distributions levels and diversity of stock ownership. Readers should carefully review the Company’s financial statements and the notes thereto, as well as the risk factors described in documents the Company files from time to time with the Securities and Exchange Commission.

      AIMCO is a real estate investment trust with headquarters in Denver, Colorado and 25 regional operating centers, which holds a geographically diversified portfolio of apartment communities. As of March 31, 2001, the Company owned or managed 313,376 apartment units, comprised of 157,368 units in 580 apartment properties owned or controlled by the Company (the “Owned Properties”), 99,374 units in 612 apartment properties in which the Company has an equity interest (the “Equity Properties”) and 56,634 units in 451 apartment properties which the Company manages for third parties (the “Managed Properties” and together with the Owned Properties and the Equity Properties, the “AIMCO Properties”). The apartment communities are located in 47 states, the District of Columbia and Puerto Rico.

      In the three months ended March 31, 2001, the Company completed $378 million in acquisitions, dispositions, and mortgage financing transactions. The Company acquired one property for $19 million and purchased $47 million of limited partnership interests. The Company sold 22 apartment communities for a total of $84 million of which the Company’s share was $32 million. First quarter refinancing activity included the closing of $228 million of new mortgages at a weighted average interest rate of 5.63%.

17

Results of Operations

       Comparison of the Three Months Ended March 31, 2001 to the Three Months Ended March 31, 2000

      In order for a meaningful analysis of the financial statements to be made, the revenues and expenses for the unconsolidated subsidiaries for the three months ended March 31, 2000, have been included as though they had been consolidated in the following analysis. All significant intercompany revenues and expenses have been eliminated.

			Three Months Ended
			March 31,
			2001			2000
RENTAL PROPERTY OPERATIONS:
Rental and other property revenues			$	322,234		$	224,320
Property operating expense				(125,686	)		(90,751	)
Owned property management expense				(3,210	)		(2,104	)
Income from property operations				193,338			131,465
SERVICE COMPANY BUSINESS:
Management fees and other income from affiliates				51,020			37,936
Management and other expenses				(32,049	)		(25,685	)
General and administrative expenses allocation				(1,281	)		(1,053	)
Amortization of intangibles				(4,901	)		(2,083	)
Income from service company business				12,789			9,115
General and administrative expenses:
	Before allocation			(4,092	)		(4,264	)
		Allocation to consolidated service company business		1,281			1,053
General and administrative expenses, net				(2,811	)		(3,211	)
Depreciation on rental property				(105,391	)		(61,291	)
Interest expense				(87,216	)		(59,241	)
Interest and other income				14,663			14,316
Equity in earnings (losses) of unconsolidated real estate partnerships				(4,476	)		168
Provision for income taxes				—			(852	)
Minority interest in other entities				(5,625	)		(7,120	)
Income before gain on disposition of properties and minority interest in AIMCO Operating Partnership				15,271			23,349
Net gain on disposition of properties				66			5,105
Income before minority interest in AIMCO Operating Partnership				15,337			28,454
Minority interest in AIMCO Operating Partnership, common				782			(989	)
Minority interest in AIMCO Operating Partnership, preferred				(2,101	)		(1,583	)
Net income			$	14,018		$	25,882

Net Income

      The Company recognized net income of $14.0 million for the three months ended March 31, 2001, compared with $25.9 million for the three months ended March 31, 2000. The following paragraphs discuss the results of operations in detail.

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Consolidated Rental Property Operations

      Consolidated rental and other property revenues from the consolidated Owned Properties totaled $322.2 million for the three months ended March 31, 2001, compared with $224.3 million for the three months ended March 31, 2000, an increase of $97.9 million, or 43.6%. This increase in consolidated rental and other property revenues is a result of the purchase of controlling interests and the subsequent consolidation of partnerships owning 91 properties in 2000 and 8 properties in 2001 contributing 60.4% of the increase, the purchase of interests in the Oxford properties and 12 other properties in 2000, which contributed 35.5% of the increase, and a 5.6% increase in “same store” sales revenues, which contributed 14.2% of the total increase. The effect of the foregoing was offset by the sale of 23 apartment properties in 2000 and 3 apartment properties in 2001.

      Consolidated property operating expenses for the consolidated Owned Properties, consisting of on-site payroll costs, utilities (net of reimbursements received from residents), contract services, turnover costs, repairs and maintenance, advertising and marketing, property taxes and insurance, totaled $125.7 million for the three months ended March 31, 2001, compared with $90.8 million for the three months ended March 31, 2000, an increase of $34.9 million or 38.4%. The increase in property operating expenses was due to the purchase of controlling interests and the subsequent consolidation of partnerships owning 91 properties in 2000 and 8 properties in 2001, resulting in 64.5%, the purchase of interests in the Oxford properties and 12 other properties in 2000, contributing 38.4%, and an increase in “same store” expenses of 5.5%, contributing 14.4% of the total increase, offset by the sale of 23 apartment properties in 2000 and 3 apartment properties in 2001.

      Depreciation expense increased $44.1 million to $105.4 million for the three months ended March 31, 2001, compared to $61.3 million for the three months ended March 31, 2000 as a result of the purchase of controlling interests and the subsequent consolidation of partnerships owning 91 properties in 2000 and 8 properties in 2001, and the acquisition of the Oxford properties and 12 other properties in 2000.

Consolidated Service Company Business

      The Company’s share of income from the consolidated service company business totaled $12.8 million for the three months ended March 31, 2001, compared with income of $9.1 million for the three months ended March 31, 2000, an increase of $3.7 million or 40.7%. The increase resulted from an increase in activity-based fees, offset by higher corporate general and administrative expenses of $6.6 million, primarily for compensation and other allocated expenses, and additional property and asset management contract intangible amortization of $2.8 million as a result of the acquisition of interests in the Oxford properties.

Consolidated General and Administrative Expenses

      Consolidated general and administrative expenses, before allocation to the service company, remained consistent, with $4.1 million for the three months ended March 31, 2001 compared to $4.3 million for the three months ended March 31, 2000.

Consolidated Interest Expense

      Consolidated interest expense, which includes the amortization of deferred financing costs, totaled $87.2 million for the three months ended March 31, 2001, compared with $59.2 million for the three months ended March 31, 2000, an increase of $28.0 million, or 47.3%. The increase was due to the purchase of controlling interests and the subsequent consolidation of partnerships owning 91 properties in 2000 and 8 properties in 2001 resulting in 49.3% of the increase, the acquisition of interests in the Oxford properties and 12 other properties in 2000, contributing 47.9% of the increase, and increased usage of the credit facility and the term loan associated with the acquisition of interests in the Oxford properties contributed 10.2%. These increases were offset by the sale of 23 apartment properties in 2000 and 3 apartment properties in 2001. The Company had $276 million outstanding on its credit facility as of March 31, 2001, compared with $277 million at March 31, 2000. The cost of such borrowing was at a weighted average interest rate of 7.70% and 8.55% at March 31, 2001 and March 31, 2000, respectively.

19

Consolidated Interest and Other Income

      Consolidated interest and other income remained relatively unchanged, with $14.7 million for the three months ended March 31, 2001, compared with $14.3 million for the three months ended March 31, 2000, while transactional income, which was comprised of gains on sale of bonds or accretion of discounted notes, net of allocated expenses, decreased from $6.2 million for the three months ended March 31, 2000 to $4.7 million for the three months ended March 31, 2001.

Equity in Earnings (Losses) of Unconsolidated Real Estate Partnerships

      Equity in earnings (losses) of unconsolidated real estate partnerships totaled $(4.5) million for the three months ended March 31, 2001, compared with $0.2 million for the three months ended March 31, 2000, a decrease of $4.7 million. The acquisition of interests in the Oxford properties in 2000 contributed approximately $3.1 million to the earnings of unconsolidated real estate partnerships. However, this was offset by the purchase of equity interests in better performing apartment properties which resulted in these properties being consolidated and contributing to consolidated rental revenues and expenses (91 properties in 2000 and 8 properties in 2001).

Minority Interest in Other Entities

      Minority interest in other entities totaled $5.6 million for the three months ended March 31, 2001, compared to $7.1 million for the three months ended March 31, 2000, a decrease of $1.5 million. This decrease is a result of the Company’s purchase of additional interests in consolidated properties, thereby reducing the minority interest allocation.

Gain on Disposition of Properties

      Gain on disposition of properties totaled $0.1 million for the three months ended March 31, 2001, compared to $5.1 million for the three months ended March 31, 2000, a decrease of $5.0 million. In both periods the properties sold were considered by management to be inconsistent with the Company’s long-term investment strategy.

Same Store Property Operating Results

      The Company defines “same store” properties as conventional apartment communities in which AIMCO’s ownership interest exceeded 10% in the comparable periods of 2001 and 2000. Total portfolio includes same store properties plus acquisition and redevelopment properties. The following table summarizes the unaudited conventional rental property operations on a “same store” and a total portfolio basis (dollars in thousands):

	Same Store						Total Portfolio
	Three Months Ended March 31,						Three Months Ended March 31,
	2001			2000			2001			2000
Properties		670			670			698			688
Apartment units		181,902			181,902			192,195			189,269
Average physical occupancy		93.6	%		93.8	%		92.8	%		92.0	%
Average rent collected/unit/month	$	679		$	651		$	681		$	651
Revenues	$	261,254		$	247,656		$	280,655		$	260,151
Expenses		95,805			90,790			104,884			96,802
Net operating income	$	165,719		$	156,866		$	175,771		$	163,349

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     Funds From Operations

      For the three months ended March 31, 2001 and 2000, the Company’s Funds From Operations (“FFO”) on a fully diluted basis were as follows (dollars in thousands):

			Three Months Ended March 31,
			2001			2000
Net Income			$	14,018		$	25,882
	Adjustments:
	Real estate depreciation, net of minority interest			97,811			56,977
	Real estate depreciation related to unconsolidated entities			15,006			18,962
	Amortization of intangibles			4,901			2,083
	Gain on disposition of properties			(66	)		(5,105	)
	Other items:
	Deferred income tax provision			—			852
	Preferred stock dividends and distributions			(6,735	)		(6,530	)
	Interest expense on mandatorily redeemable convertible preferred securities			525			2,429
	Minority interest in AIMCO Operating Partnership			1,319			2,572
Diluted Funds From Operations (FFO) available to common    shares and OP Units			$	126,779		$	98,122
Weighted average number of common shares, common share    equivalents and Common OP Units outstanding:
	Common share and common share equivalents			89,824			80,790
	Common OP Units			8,751			6,360
		Total		98,575			87,150

      Liquidity and Capital Resources

For the three months ended March 31, 2001 and 2000, net cash flows were as follows (dollars in thousands):

	2001			2000
Cash flow provided by operating activities	$	85,153		$	69,557
Cash flow provided by (used in) investing activities		56,955			(109,204	)
Cash flow provided by (used in) financing activities		(185,484	)		74,933

      During the three months ended March 31, 2001, the Company closed $228 million of long-term, fixed-rate, fully amortizing notes payable with a weighted average interest rate of 5.63%. Each of the notes is individually secured by one of 22 properties with no cross-collateralization. The Company used the net proceeds totaling $125 million after transaction costs to repay existing debt and for working capital.

      In April 2001, the Company’s credit facility was expanded to the full commitment of $400 million, adding an additional two lenders to the participating bank group. The obligations under the credit facility are secured by a first priority pledge of certain non-real estate assets of the Company and a second priority pledge of the stock of certain subsidiaries of the Company owned by the AIMCO Operating Partnership, NHP Management Company, AIMCO/Bethesda Holdings, Inc., AIMCO Holdings, L.P, and certain options to purchase BACs in OTEF. Borrowings under the credit facility are available for general corporate purposes. The credit facility matures in July 2002 and can be extended twice at AIMCO’s option, for a term of one year. The annual interest rate under the credit facility is based either on LIBOR or a base rate which is the higher of Bank of America's reference rate or 0.50% over the federal funds rate, plus, in either case, an applicable margin. The margin ranges between 2.05% and 2.55%, in the case of LIBOR-based loans, and between 0.55% and 1.05%, in the case of base rate loans, based upon a fixed charge coverage ratio. The weighted average interest rate at March 31, 2001 was 7.70%. The amount

21

available under the credit facility at March 31, 2001 was $74 million. At April 25, 2001, $182 million was outstanding on the line, providing availability of $218 million.

      On September 20, 2000, AIMCO completed the acquisition of interests in the Oxford properties. In order to pay the cash portion of the purchase price and transactions costs, the Company borrowed $302 million from Bank of America, N.A., Lehman Commercial Paper Inc. and several other lenders, pursuant to a term loan. In March 2001, the Company paid off the remaining balance of the term loan and charged to operations approximately $2.2 million for the complete amortization of deferred financing and loan origination costs principally related to the term loan.

      At March 31, 2001, the Company had $113.7 million in cash and cash equivalents. In addition, the Company had $155.3 million of restricted cash, primarily consisting of reserves and impounds held by lenders for capital replacements, property taxes and insurance. The Company’s principal liquidity requirements include normal operating expenses, 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, and funds available under its credit facilities, to be adequate to meet short-term liquidity demands. The Company utilizes its revolving credit facility for general corporate purposes and to fund investments on an interim basis.

      The Company expects to fund its requirements for property acquisitions, tender offers and refinancing of short-term debt with: cash generated from operations; long-term, fixed rate, fully amortizing non-recourse property debt; secured or unsecured short-term debt; and the issuance of debt or equity securities in public offerings or private placements.

      From time to time, the Company has offered to acquire and, in the future, may offer to acquire the interests held by third party investors in certain limited partnerships for which the Company acts as general partner. Any such acquisitions will require funds to pay the cash purchase price for such interests. During the three months ended March 31, 2001, the Company made separate offers to the limited partners of 145 partnerships to acquire their limited partnership interests, and purchased approximately $47 million (including transaction costs) of limited partnership interests.

Return on Assets and Return on Equity

      The Company’s Return On Assets and Return On Equity for the three months ended March 31, 2001 and 2000 are as follows:

		Based on AFFO						Based on FFO
		Three Months Ended						Three Months Ended
		March 31,						March 31,
		2001			2000			2001			2000
Return on Assets (a)			9.7	%		10.2	%		10.1	%		10.7	%
Return on Equity
	Basic (b)		14.3	%		14.4	%		15.3	%		15.8	%
	Diluted (c)		12.9	%		13.0	%		13.8	%		14.1	%

(a)

The Company defines Return on Assets (AFFO) as (i) annualized Free Cash Flow, divided by (ii) Average Assets. Average Assets are computed by averaging the sum of Assets, as defined below, at the beginning and the end of the period. Assets are total assets, plus accumulated depreciation, less accumulated Capital Replacements of $115,009 and $73,138 for the three months ended March 31, 2001 and 2000, respectively, and less all non-indebtedness liabilities. The Company defines Return on Assets (FFO) as (i) annualized Free Cash Flow plus Capital Replacements, divided by (ii) Average Assets plus accumulated Capital Replacements.

(b)

The Company defines Return on Equity-Basic (AFFO) as (i) annualized AFFO-Basic, divided by (ii) Average Equity. Average Equity is computed by averaging the sum of Equity, as defined below, at the beginning and the end of the period. Equity is total stockholders’ equity, plus accumulated depreciation, less accumulated

22

Capital Replacements of $115,009 and $73,138 for the three months ended March 31, 2001 and 2000, respectively, less preferred stock, plus minority interest in the AIMCO Operating Partnership, net of preferred OP unit interests $130,785 and $106,401 for the three months ended March 31, 2001 and 2000, respectively. The Company defines Return on Equity-Basic (FFO) as (i) annualized AFFO-Basic plus Capital Replacements; divided by (ii) Average Equity plus accumulated Capital Replacements.

(c)

The Company defines Return on Equity-Diluted (AFFO) and Return on Equity-Diluted (FFO) assuming conversion of debt and preferred securities whose conversion is dilutive.

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ITEM 3. 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 believes that an increase in energy costs will not have a material adverse effect on its results of operations. 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 $420.7 million of variable rate debt outstanding at March 31, 2001, which represented 9.1% 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 $4.2 million on an annual basis.

      The estimated aggregate fair value of the Company’s cash and cash equivalents, receivables, payables and short-term secured and unsecured debt as of March 31, 2001 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.

24

PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings

      None.

ITEM 2. Changes in Securities and Use of Proceeds

      From time to time during the quarter, AIMCO issued shares of Common Stock in exchange for Common 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 Common OP Unit. The shares are issued in exchange for Common 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 the three months ended March 31, 2001, 68,191 shares of Common Stock were issued in exchange for Common OP Units in these transactions.

       In January 2001, the holders of trust convertible preferred securities ("TOPRS") converted a total of $60,000 of TOPRS into 1,209 shares of Common Stock. The convertible preferred securities were assumed by AIMCO in October 1998 in connection with its merger with Insignia Financial Group, Inc. The preferred securities have a conversion price of $49.61 per share which, based on a liquidation amount of $50 per security, results in the issuance of 1.0079 shares of Common Stock for each preferred security converted.

      All of the foregoing issuances were made in private placement transactions exempt from registration under the Securities Act pursuant to Section 4(2) thereof.

ITEM 3. Defaults Upon Senior Securities

      None.

ITEM 4. Submission of Matters to a Vote of Security Holders

      None.

ITEM 5. Other Information

      None.

25

ITEM 6.  Exhibits and Reports on Form 8-K

      (a) Exhibits. The following exhibits are filed with this report (1):

EXHIBIT
NO.	DESCRIPTION
3.1	Charter (Exhibit 3.1 to AIMCO's Annual Report on Form 10-K/A for the year ended December 31, 2000, is incorporated herein by this reference)
3.2	Bylaws
10.1	Nineteenth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of February 28, 2001 (Exhibit 10.20 to AIMCO’s Annual Report on Form 10-K/A for the year ended December 31, 2000, is incorporated herein by this reference)
10.2	Twentieth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of March 19, 2001 (Exhibit 10.21 to AIMCO’s Annual Report on Form 10-K/A for the year ended December 31, 2000, is incorporated herein by this reference)
99.1	Agreement re: disclosure of long-term debt instruments

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

      (b) Reports on Form 8-K for the quarter ended March 31, 2001:

      During the quarter for which this report is filed, Apartment Investment and Management Company filed its

      • Amendment No. 2, on January 18, 2001, to its Current Report on Form 8-K, dated September 20, 2000, relating to the acquisition of all of the stock and other interests held by officers and directors in the entities that controlled properties owned by affiliates of Oxford Realty Financial Group, Inc., and the acquisition of the entity which owned the managing general partner of Oxford Tax Exempt Fund II Limited Partnership, including certain pro forma financial information;

      • Current Report on Form 8-K dated January 31, 2001 (and Amendment No. 1 thereto filed on March 12, 2001), relating to an increase in Apartment Investment and Management Company’s measure of economic profitability for the fourth quarter of 2000, compared to the quarter ended December 31, 1999;

      • Amendment No. 3, on February 28, 2001, to its Current Report on Form 8-K, dated September 20, 2000, relating to the acquisition of all of the stock and other interests held by officers and directors in the entities that controlled properties owned by affiliates of Oxford Realty Financial Group, Inc., and the acquisition of the entity which owned the managing general partner of Oxford Tax Exempt Fund II Limited Partnership, including certain pro forma financial information;

      • Current Report on Form 8-K, dated March 19, 2001, relating to Regulation FD disclosure of materials to be presented at an address by AIMCO’s President to a group of analysts and investors to discuss the Company’s results of operations and financial performance for fiscal year 2000;

26

      • Current Report on Form 8-K, dated as of March 21, 2001, relating to the sale of shares of Class Q Cumulative Preferred Stock in an underwritten public offering; and

      • Current Report on Form 8-K, dated March 26, 2001, relating to the acquisition of Oxford Tax Exempt Fund II Limited Partnership, including Financial Statements of Oxford Tax Exempt Fund II Limited Partnership for the year ended December 31, 1999, together with the Report of Independent Auditors, Financial Statements of Oxford Tax Exempt Fund II Limited Partnership for the nine months ended September 30, 2000 (unaudited), and certain pro forma financial information.

27

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

SIGNATURES

      Pursuant to the requirements 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.

APARTMENT INVESTMENT AND MANAGEMENT COMPANY
By:	/s/  PAUL J. McAULIFFE
	Paul J. McAuliffe
	Executive Vice President, Chief Financial Officer (duly authorized officer and principal financial officer)
By:	/s/  THOMAS C. NOVOSEL
	Thomas C. Novosel
	Senior Vice President, Chief Accounting Officer

Date: May 14, 2001

28

EXHIBIT INDEX(1)

Exhibit
Number	Description
3.1	Charter
3.2	Bylaws
10.1	Nineteenth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of February 28, 2001 (Exhibit 10.20 to AIMCO’s Annual Report on Form 10-K/A for the year ended December 31, 2000, is incorporated herein by this reference)
10.2	Twentieth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of March 19, 2001 (Exhibit 10.21 to AIMCO’s Annual Report on Form 10-K/A for the year ended December 31, 2000, is incorporated herein by this reference)
99.1	Agreement re: disclosure of long-term debt instruments

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

  EX-3.2 2 d87044ex3-2.txt EX-3.2 AMENDED/RESTATED BYLAWS 1 EXHIBIT 3.2 {AS ADOPTED ON JANUARY 19, 2000} {AMENDED APRIL 18, 2001} ================================================================================ AMENDED AND RESTATED BY-LAWS OF APARTMENT INVESTMENT AND MANAGEMENT COMPANY ================================================================================ -1- 2 TABLE OF CONTENTS

Page ---- ARTICLE I. STOCKHOLDERS................................................................................4 SECTION 1.01. ANNUAL MEETING........................................................................4 SECTION 1.02. SPECIAL MEETING.......................................................................4 SECTION 1.03. PLACE OF MEETINGS.....................................................................4 SECTION 1.04. NOTICE OF MEETINGS; WAIVER OF NOTICE..................................................4 SECTION 1.05. QUORUM; VOTING........................................................................5 SECTION 1.06. ADJOURNMENTS..........................................................................5 SECTION 1.07. GENERAL RIGHT TO VOTE; PROXIES........................................................5 SECTION 1.08. LIST OF STOCKHOLDERS..................................................................6 SECTION 1.09. CONDUCT OF VOTING.....................................................................6 SECTION 1.10. MEETING BY CONFERENCE TELEPHONE.......................................................6 ARTICLE II. BOARD OF DIRECTORS..........................................................................6 SECTION 2.01. FUNCTION OF DIRECTORS.................................................................6 SECTION 2.02. QUALIFICATION AND NUMBER OF DIRECTORS.................................................7 SECTION 2.03. ELECTION AND TENURE OF DIRECTORS......................................................7 SECTION 2.04. REMOVAL OF DIRECTOR...................................................................7 SECTION 2.05. VACANCY ON BOARD OF DIRECTORS.........................................................7 SECTION 2.06. REGULAR MEETINGS......................................................................7 SECTION 2.07. SPECIAL MEETINGS......................................................................8 SECTION 2.08. NOTICE OF MEETING.....................................................................8 SECTION 2.09. QUORUM; ACTION BY DIRECTORS...........................................................8 SECTION 2.10. MEETING BY CONFERENCE TELEPHONE.......................................................8 SECTION 2.11. COMPENSATION..........................................................................9 SECTION 2.12. RESIGNATION...........................................................................9 SECTION 2.13. PRESUMPTION OF ASSENT.................................................................9 ARTICLE III. COMMITTEES..................................................................................9 SECTION 3.01. COMMITTEES............................................................................9 SECTION 3.02. COMMITTEE PROCEDURE...................................................................9 ARTICLE IV. OFFICERS...................................................................................10 SECTION 4.01. EXECUTIVE AND OTHER OFFICERS.........................................................10 SECTION 4.02. CHAIRMAN OF THE BOARD................................................................10 SECTION 4.03. VICE CHAIRMAN OF THE BOARD...........................................................10

-2- 3 SECTION 4.04. PRESIDENT............................................................................10 SECTION 4.05. VICE-PRESIDENTS......................................................................11 SECTION 4.06. SECRETARY............................................................................11 SECTION 4.07. TREASURER............................................................................11 SECTION 4.08. ASSISTANT AND SUBORDINATE OFFICERS...................................................11 SECTION 4.09. ELECTION, TENURE AND REMOVAL OF OFFICERS.............................................12 SECTION 4.10. COMPENSATION.........................................................................12 ARTICLE V. DIVISIONAL TITLES..........................................................................12 SECTION 5.01. CONFERRING DIVISIONAL TITLES.........................................................12 SECTION 5.02. EFFECT OF DIVISIONAL TITLES..........................................................12 ARTICLE VI. STOCK......................................................................................12 SECTION 6.01. CERTIFICATES FOR STOCK...............................................................12 SECTION 6.02. TRANSFERS............................................................................13 SECTION 6.03. RECORD DATES OR CLOSING OF TRANSFER BOOKS............................................13 SECTION 6.04. STOCK LEDGER.........................................................................14 SECTION 6.05. CERTIFICATION OF BENEFICIAL OWNERS...................................................14 SECTION 6.06. LOST STOCK CERTIFICATES..............................................................14 SECTION 6.07. FRACTIONAL SHARE INTERESTS OR SCRIP..................................................14 ARTICLE VII. FINANCE....................................................................................15 SECTION 7.01. CHECKS, DRAFTS, ETC. ................................................................15 SECTION 7.02. ANNUAL STATEMENT OF AFFAIRS..........................................................15 SECTION 7.03. FISCAL YEAR..........................................................................15 SECTION 7.04. DIVIDENDS............................................................................15 SECTION 7.05. BONDS................................................................................15 ARTICLE VIII. INDEMNIFICATION............................................................................15 SECTION 8.01. PROCEDURE............................................................................15 SECTION 8.02. EXCLUSIVITY, ETC. ...................................................................16 SECTION 8.03. SEVERABILITY; DEFINITIONS............................................................16 ARTICLE IX. SUNDRY PROVISIONS..........................................................................16 SECTION 9.01. BOOKS AND RECORDS....................................................................16 SECTION 9.02. CORPORATE SEAL.......................................................................17 SECTION 9.03. VOTING STOCK IN OTHER CORPORATIONS...................................................17 SECTION 9.04. MAIL.................................................................................17 SECTION 9.05. CONTRACTS AND AGREEMENTS.............................................................17 SECTION 9.06. RESIDENT AGENT; PRINCIPAL OFFICE.....................................................17 SECTION 9.07. AMENDMENTS...........................................................................17 SECTION 9.08. RELIANCE.............................................................................18 -3- 4 AMENDED AND RESTATED BY-LAWS OF APARTMENT INVESTMENT AND MANAGEMENT COMPANY ARTICLE I. STOCKHOLDERS SECTION 1.01. ANNUAL MEETING. 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 third Wednesday of April each year (provided that for the year 2001 such date shall be the third Tuesday of June) if not a legal holiday, or at such other time on such other day falling on or before the 30th day thereafter as shall be set by the Board of Directors. Except as the Charter or statue provides otherwise, any business may be considered at an annual meeting without the purpose of the meeting having been specified in the notice. Failure to hold an annual meeting does not invalidate the Corporation's existence or affect any otherwise valid corporate acts. {Amended April 18, 2001} SECTION 1.02. SPECIAL MEETING. At any time in the interval between annual meetings, a special meeting of the stockholders may be called by the Chairman of the Board, 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 by the Secretary at the request of stockholders only on the written request of stockholders entitled to cast at least 25% of all the votes entitled to be cast at the meeting. A request for a special meeting shall state the purpose of the meeting and the matters proposed to be acted on at it. The Secretary shall inform the stockholders who make the request of the reasonably estimated costs of preparing and mailing a notice of the meeting and, on payment of these costs to the Corporation, notify each stockholder entitled to notice of the meeting. The Board of Directors shall have sole power to fix the date and time of the special meeting. Unless requested by stockholders entitled to cast a majority of all the votes entitled to be cast at the meeting, a special meeting need not be called to consider any matter which is substantially the same as a matter voted on at any special meeting of stockholders held in the preceding 12 months. SECTION 1.03. PLACE OF MEETINGS. Unless the Charter provides otherwise, meetings of stockholders shall be held at such place as is set from time to time by the Board of Directors. SECTION 1.04. NOTICE OF MEETINGS; WAIVER OF NOTICE. Not less than ten nor more -4- 5 than 90 days before each stockholders' meeting, the Secretary shall give written notice of the meeting to each stockholder entitled to vote at the meeting and each other stockholder entitled to notice of the meeting. The notice shall state the time and place of the meeting and, if the meeting is a special meeting or notice of the purpose is required by statute, the purpose of the meeting. Notice is given to a stockholder when it is personally delivered to him or her, left at his or her residence or usual place of business, or mailed to him or her at his or her address as it appears on the records of the Corporation or transmitted to the stockholder by electronic mail to any electronic mail address of the stockholder or by any other electronic means. Notwithstanding the foregoing provisions, each person who is entitled to notice waives notice if he or she before or after the meeting signs a waiver of the notice which is filed with the records of stockholders' meetings, or is present at the meeting in person or by proxy. SECTION 1.05. QUORUM; VOTING. Unless any statute or the Charter provides otherwise, at a meeting of stockholders the presence in person or by proxy of stockholders entitled to cast a majority of all the votes entitled to be cast at the meeting constitutes a quorum, and a majority of all the votes cast at a meeting at which a quorum is present is sufficient to approve any matter which properly comes before the meeting, except that a plurality of all the votes cast at a meeting at which a quorum is present is sufficient to elect a director. SECTION 1.06. ADJOURNMENTS. 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 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. SECTION 1.07. GENERAL RIGHT TO VOTE; PROXIES. Unless the Charter provides for a greater or lesser number of votes per share or limits or denies voting rights, each outstanding share of stock, regardless of class, is entitled to one vote on each matter submitted to a vote at a meeting of stockholders; however, a share is not entitled to be voted if any installment payable on it is overdue and unpaid. In all elections for directors, 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. A stockholder may vote the stock the stockholder owns of record either in person or by proxy. A stockholder may sign a writing authorizing another person to act as proxy. Signing may be accomplished by the stockholder or the stockholder's authorized agent signing the writing or causing the stockholder's signature to be affixed to the writing by any reasonable means, including facsimile signature. A stockholder may authorize another person to act as proxy by transmitting, or authorizing the transmission of, an authorization by a telegram, cablegram, datagram, electronic mail or any other electronic or telephonic means to the person authorized to act as proxy or to any other person authorized to receive the proxy authorization on behalf of the person authorized to act as the proxy, including a proxy solicitation firm or proxy support service organization. Unless a proxy provides otherwise, it is not valid more than 11 months after its date. A proxy is revocable by a stockholder at any time without condition or qualification unless the proxy states that it is irrevocable and the proxy is coupled with an -5- 6 interest. A proxy may be made irrevocable for so long as it is coupled with an interest. The interest with which a proxy may be coupled includes an interest in the stock to be voted under the proxy or another general interest in the Corporation or its assets or liabilities. SECTION 1.08. LIST OF STOCKHOLDERS. At each meeting of stockholders, a full, true and complete list of all stockholders entitled to vote at such meeting, showing the number and class of shares held by each and certified by the transfer agent for such class or by the Secretary, shall be furnished by the Secretary. SECTION 1.09. CONDUCT OF VOTING. At all meetings of stockholders, unless the voting is conducted by inspectors, the proxies and ballots shall be received, and all questions touching the qualification of voters and the validity of proxies, the acceptance or rejection of votes and procedures for the conduct of business not otherwise specified by these By-Laws, the Charter or law, shall be decided or determined by the chairman of the meeting. If demanded by stockholders, present in person or by proxy, entitled to cast 10% in number of votes entitled to be cast, or if ordered by the chairman of the meeting, the vote upon any election or question shall be taken by ballot. Before any meeting of the stockholders, the Board of Directors may appoint persons to act as inspectors of election at the meeting and any adjournment thereof. If no inspectors of election are so appointed, the chairman of the meeting may appoint inspectors of election at the meeting. The number of inspectors shall be either one or three. If inspectors are appointed at a meeting on the request of stockholders, the holders of a majority of shares present in person or by proxy shall determine whether one or three inspectors are to be appointed. No candidate for election as a director at a meeting shall serve as an inspector thereat. If any person appointed as inspector fails to appear or fails or refuses to act, the chairman of the meeting may, and upon the request of any stockholder shall, appoint a person to fill that vacancy. The inspectors shall determine the number of shares outstanding and the voting power of each, the shares represented at the meeting, the existence of a quorum, and the authenticity, validity and effect of proxies; receive votes, ballots or consents; hear and determine all challenges and questions in any way arising in connection with the right to vote; count and tabulate all votes or consents; determine when polls shall close; determine the result; and do any other acts that may be proper to conduct the election or vote with fairness to all stockholders. Unless so demanded or ordered, no vote need be by ballot and voting need not be conducted by inspectors. SECTION 1.10. MEETING BY CONFERENCE TELEPHONE. Stockholders 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. Participation in a meeting by these means constitutes presence in person at a meeting. ARTICLE II. BOARD OF DIRECTORS SECTION 2.01. FUNCTION OF DIRECTORS. The business and affairs of the Corporation shall be managed under the direction of its Board of Directors. All powers of the Corporation may be exercised by or under authority of the Board of Directors, except as conferred on or reserved to the stockholders by statute or by the Charter or By-Laws. -6- 7 SECTION 2.02. QUALIFICATION AND NUMBER OF DIRECTORS. Each director shall be a natural person at least 18 years of age. The Corporation shall have at least three directors. The Corporation shall have the number of directors provided in the Charter until changed as herein provided. A majority of the entire Board of Directors may alter the number of directors set by the Charter to not exceeding 9 (plus such additional number as may needed to satisfy the right of the holders of any class of stock of the Corporation to demand nomination of a director) nor less than the minimum number then permitted herein, but the action may not affect the tenure of office of any director. SECTION 2.03. ELECTION AND TENURE OF DIRECTORS. Subject to the rights of the holders of any class of stock separately entitled to elect one or more directors, at each annual meeting, the stockholders shall elect directors to hold office until the next annual meeting and until their successors are elected and qualify. SECTION 2.04. REMOVAL OF DIRECTOR. 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.(1) SECTION 2.05. VACANCY ON BOARD OF DIRECTORS. Subject to the rights of the holders of any class of stock separately entitled to elect one or more directors, the stockholders may elect a successor to fill a vacancy on the Board of Directors which results from the removal of a director. A director elected by the stockholders to fill a vacancy which results from the removal of a director serves for the balance of the term of the removed director. Subject to the rights of the holders of any class of stock separately entitled to elect one or more directors, a majority of the remaining directors, whether or not sufficient to constitute a quorum, may fill a vacancy on the Board of Directors which results from any cause except an increase in the number of directors, and a majority of the entire Board of Directors may fill a vacancy which results from an increase in the number of directors. A director elected by the Board of Directors to fill a vacancy serves until the next annual meeting of stockholders and until his or her successor is elected and qualifies. SECTION 2.06. REGULAR MEETINGS. After each meeting of stockholders at which directors shall have been elected, the Board of Directors shall meet as soon thereafter as practicable for the purpose of organization and the transaction of other business. In the event that no other time and place are specified by resolution of the Board of Directors or announced by the President or the Chairman of the Board at such stockholders meeting, the Board of Directors shall meet immediately following the close of, and at the place of, such stockholders meeting. Any other regular meeting of the Board of Directors shall be held on such date and time and at - ---------- (1) Under Article VI, Section 6 of the Charter, this section of the By-Laws may not be amended without the approval of 2/3 of the stockholders. -7- 8 such place as may be designated from time to time by the Board of Directors. No notice of such meeting following a stockholders meeting or any other regular meeting shall be necessary if held as hereinabove provided. SECTION 2.07. SPECIAL MEETINGS. Special meetings of the Board of Directors may be called at any time by the Chairman of the Board or the President or by a majority of the Board of Directors by vote at a meeting, or in writing with or without a meeting. A special meeting of the Board of Directors shall be held on such date and at any place as may be designated from time to time by the Board of Directors. In the absence of designation such meeting shall be held at such place as may be designated in the call. SECTION 2.08. NOTICE OF MEETING. Except as provided in Section 2.06, the Secretary shall give notice to each director of each regular and special meeting of the Board of Directors. The notice shall state the time and place of the meeting. Notice is given to a director when it is delivered personally to him or her, left at his or her residence or usual place of business, or sent by telegraph, facsimile transmission or telephone, at least 24 hours before the time of the meeting or, in the alternative by mail to his or her address as it shall appear on the records of the Corporation, at least 72 hours before the time of the meeting. Unless these By-Laws or a resolution of the Board of Directors provides otherwise, the notice need not state the business to be transacted at or the purposes of any regular or special meeting of the Board of Directors. No notice of any meeting of the Board of Directors need be given to any director who attends except where a director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened, or to any director who, in writing executed and filed with the records of the meeting either before or after the holding thereof, waives such notice. Any meeting of the Board of Directors, regular or special, may adjourn from time to time to reconvene at the same or some other place, and no notice need be given of any such adjourned meeting other than by announcement. SECTION 2.09. QUORUM; ACTION BY DIRECTORS. A majority of the entire Board of Directors shall constitute a quorum for the transaction of business. In the absence of a quorum, the directors present by majority vote and without notice other than by announcement may adjourn the meeting from time to time until a quorum shall attend. At any such adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the meeting as originally notified. Unless statute or the Charter or By-Laws requires a greater proportion, the action of a majority of the directors present at a meeting at which a quorum is present is action of the Board of Directors. Any action required or permitted to be taken at a meeting of the Board of Directors may be taken without a meeting, if a unanimous written consent which sets forth the action is signed by each member of the Board of Directors and filed with the minutes of proceedings of the Board of Directors. SECTION 2.10. MEETING BY CONFERENCE TELEPHONE. Members of the Board of Directors 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. Participation in a meeting by these means constitutes presence in person at a meeting. -8- 9 SECTION 2.11. COMPENSATION. By resolution of the Board of Directors a fixed sum and expenses, if any, for attendance at each regular or special meeting of the Board of Directors or of committees thereof, and other compensation for their services as such or on committees of the Board of Directors, may be paid to directors. Directors who are full-time employees of the Corporation need not be paid for attendance at meetings of the Board of Directors or committees thereof for which fees are paid to other directors. A director who serves the Corporation in any other capacity also may receive compensation for such other services, pursuant to a resolution of the directors. SECTION 2.12. RESIGNATION. Any director may resign at any time by sending a written notice of such resignation to the home office of the Corporation addressed to the Chairman of the Board or the President. Unless otherwise specified therein such resignation shall take effect upon receipt thereof by the Chairman of the Board or the President. SECTION 2.13. PRESUMPTION OF ASSENT. A director of the Corporation who is present at a meeting of the Board of Directors at which action on any corporate matter is taken shall be presumed to have assented to the action taken unless his or her dissent or abstention shall be entered in the minutes of the meeting or unless he or she shall file his or her written dissent to such action with the person acting as the secretary of the meeting before the adjournment thereof or shall forward such dissent by registered mail to the Secretary of the Corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to a director who votes in favor of such action or fails to make his dissent known at the meeting. ARTICLE III. COMMITTEES SECTION 3.01. 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 of Directors, 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. SECTION 3.02. COMMITTEE PROCEDURE. Each committee may fix rules of procedure for its business. A majority of the members of a committee shall constitute a quorum for the -9- 10 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. Any action required or permitted to be taken at a meeting of a committee may be taken without a meeting, if an unanimous written consent which sets forth the action is signed by each member of the committee and filed with the minutes of the committee. The members of a committee may conduct any meeting thereof by conference telephone in accordance with the provisions of Section 2.10. ARTICLE IV. OFFICERS SECTION 4.01. EXECUTIVE AND OTHER OFFICERS. The Corporation shall have a President, a Secretary, and a Treasurer. It may also have a Chairman of the Board and a Vice Chairman of the Board. The Board of Directors shall designate who shall serve as chief executive officer, who shall have general supervision of the business and affairs of the Corporation, and may designate a chief operating officer, who shall have supervision of the operations of the Corporation. In the absence of any designation the Chairman of the Board, if there be one, shall serve as chief executive officer, and the President shall serve as chief operating officer. In the absence of the Chairman of the Board, or if there be none, the President shall be the chief executive officer. The same person may hold both offices. The Corporation may also have one or more Vice-Presidents, assistant officers, and subordinate officers as may be established by the Board of Directors. A person may hold more than one office in the Corporation except that no person may serve concurrently as both President and Vice-President of the Corporation. The Chairman of the Board and the Vice Chairman of the Board shall be directors, and the other officers may be directors. SECTION 4.02. CHAIRMAN OF THE BOARD. The Chairman of the Board, if one be elected, shall preside at all meetings of the Board of Directors and of the stockholders at which he or she shall be present. Unless otherwise specified by the Board of Directors, he or she shall be the chief executive officer of the Corporation. In general, he or she shall perform such duties as are customarily performed by the chief executive officer of a corporation, may perform any duties of the President and shall perform such other duties and have such other powers as are from time to time assigned to him or her by the Board of Directors. SECTION 4.03. VICE CHAIRMAN OF THE BOARD. Unless otherwise provided by resolution of the Board of Directors, the Vice Chairman of the Board, in the absence of the Chairman of the Board, shall preside at all meetings of the Board of Directors and of the stockholders at which he or she shall be present, and shall perform such other duties and have such other powers as are from time to time assigned to him or her by the Board of Directors. SECTION 4.04. PRESIDENT. Unless otherwise specified by the Board of Directors, the President shall be the chief operating officer of the Corporation and perform the duties customarily performed by chief operating officers. He or she may execute, in the name of the -10- 11 Corporation, all authorized deeds, mortgages, bonds, contracts or other instruments, except in cases in which the signing and execution thereof shall have been expressly delegated to some other officer or agent of the Corporation. In general, he or she shall perform such other duties customarily performed by a president of a corporation and shall perform such other duties and have such other powers as are from time to time assigned to him or her by the Board of Directors or the chief executive officer of the Corporation. SECTION 4.05. VICE-PRESIDENTS. The Vice-President or Vice-Presidents, at the request of the chief executive officer or the President, or in the President's absence or during his or her inability to act, shall perform the duties and exercise the functions of the President, and when so acting shall have the powers of the President. If there be more than one Vice-President, the Board of Directors may determine which one or more of the Vice-Presidents shall perform any of such duties or exercise any of such functions, or if such determination is not made by the Board of Directors, the chief executive officer, or the President may make such determination; otherwise any of the Vice-Presidents may perform any of such duties or exercise any of such functions. Each Vice-President shall perform such other duties and have such other powers, and have such additional descriptive designations in their titles (if any), as are from time to time assigned to them by the Board of Directors, the chief executive officer, or the President. SECTION 4.06. SECRETARY. The Secretary shall keep the minutes of the meetings of the stockholders, of the Board of Directors and of any committees, in books provided for the purpose; he or she shall see that all notices are duly given in accordance with the provisions of these By-Laws or as required by law; he or she shall be custodian of the records of the Corporation; he or she may witness any document on behalf of the Corporation, the execution of which is duly authorized, see that the corporate seal is affixed where such document is required or desired to be under its seal, and, when so affixed, may attest the same. In general, he or she shall perform such other duties customarily performed by a secretary of a corporation, and shall perform such other duties and have such other powers as are from time to time assigned to him or her by the Board of Directors, the chief executive officer, or the President. SECTION 4.07. TREASURER. The Treasurer shall have charge of and be responsible for all funds, securities, receipts and disbursements of the Corporation, and shall deposit, or cause to be deposited, in the name of the Corporation, all moneys or other valuable effects in such banks, trust companies or other depositories as shall, from time to time, be selected by the Board of Directors; he or she shall render to the President and to the Board of Directors, whenever requested, an account of the financial condition of the Corporation. In general, he or she shall perform such other duties customarily performed by a treasurer of a corporation, and shall perform such other duties and have such other powers as are from time to time assigned to him or her by the Board of Directors, the chief executive officer, or the President. SECTION 4.08. ASSISTANT AND SUBORDINATE OFFICERS. The assistant and subordinate officers of the Corporation are all officers below the office of Vice-President, Secretary, or Treasurer. The assistant or subordinate officers shall have such duties as are from time to time assigned to them by the Board of Directors, the chief executive officer, or the President. -11- 12 SECTION 4.09. ELECTION, TENURE AND REMOVAL OF OFFICERS. The Board of Directors shall elect the officers of the Corporation. The Board of Directors may from time to time authorize any committee or officer to appoint assistant and subordinate officers. Election or appointment of an officer, employee or agent shall not of itself create contract rights. All officers shall be appointed to hold their offices, respectively, during the pleasure of the Board of Directors. The Board of Directors (or, as to any assistant or subordinate officer, any committee or officer authorized by the Board of Directors) may remove an officer at any time. The removal of an officer does not prejudice any of his or her contract rights. The Board of Directors (or, as to any assistant or subordinate officer, any committee or officer authorized by the Board of Directors) may fill a vacancy which occurs in any office for the unexpired portion of the term. SECTION 4.10. COMPENSATION. The Board of Directors shall have power to fix the salaries and other compensation and remuneration, of whatever kind, of all officers of the Corporation. No officer shall be prevented from receiving such salary by reason of the fact that he or she is also a director of the Corporation. The Board of Directors may authorize any committee or officer, upon whom the power of appointing assistant and subordinate officers may have been conferred, to fix the salaries, compensation and remuneration of such assistant and subordinate officers. ARTICLE V. DIVISIONAL TITLES SECTION 5.01. CONFERRING DIVISIONAL TITLES. The Board of Directors may from time to time confer upon any employee of a division of the Corporation the title of President, Vice President, Treasurer or Controller of such division or any other title or titles deemed appropriate, or may authorize the Chairman of the Board or the President to do so. Any such titles so conferred may be discontinued and withdrawn at any time by the Board of Directors, or by the Chairman of the Board or the President if so authorized by the Board of Directors. Any employee of a division designated by such a divisional title shall have the powers and duties with respect to such division as shall be prescribed by the Board of Directors, the Chairman of the Board or the President. SECTION 5.02. EFFECT OF DIVISIONAL TITLES. The conferring of divisional titles shall not create an office of the Corporation under Article IV unless specifically designated as such by the Board of Directors; but any person who is an officer of the Corporation may also have a divisional title. ARTICLE VI. STOCK SECTION 6.01. CERTIFICATES FOR STOCK. Each stockholder is entitled to certificates which represent and certify the shares of stock he or she holds in the Corporation. Each stock certificate shall include on its face the name of the Corporation, the name of the stockholder or -12- 13 other person to whom it is issued, and the class of stock and number of shares it represents. It shall also include on its face or back (a) a statement of any restrictions on transferability and a statement of the designations and any preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption of the stock of each class which the Corporation is authorized to issue, of the differences in the relative rights and preferences between the shares of each series of a preferred or special class in series which the Corporation is authorized to issue, to the extent they have been set, and of the authority of the Board of Directors to set the relative rights and preferences of subsequent series of a preferred or special class of stock or (b) a statement which provides in substance that the Corporation will furnish a full statement of such information to any stockholder on request and without charge. Such request may be made to the Secretary or to its transfer agent. Except as provided in the Maryland Uniform Commercial Code - Investment Securities, the fact that a stock certificate does not contain or refer to a restriction on transferability that is adopted after the date of issuance does not mean that the restriction is invalid or unenforceable. It shall be in such form, not inconsistent with law or with the Charter, as shall be approved by the Board of Directors or any officer or officers designated for such purpose by resolution of the Board of Directors. Each stock certificate shall be signed by the Chairman of the Board, the President, or a Vice-President, and countersigned by the Secretary, an Assistant Secretary, the Treasurer, or an Assistant Treasurer. Each certificate may be sealed with the actual corporate seal or a facsimile of it or in any other form and the signatures may be either manual or facsimile signatures. A certificate is valid and may be issued whether or not an officer who signed it is still an officer when it is issued. A certificate may not be issued until the stock represented by it is fully paid. SECTION 6.02. TRANSFERS. The Board of Directors shall have power and authority to make such rules and regulations as it may deem expedient concerning the issue, transfer and registration of certificates of stock; and may appoint transfer agents and registrars thereof. The duties of transfer agent and registrar may be combined. SECTION 6.03. RECORD DATES OR CLOSING OF TRANSFER BOOKS. The Board of Directors may, and shall have the sole power to, 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 request a special meeting of stockholders, notice of a meeting of stockholders, vote at a meeting of stockholders, receive a dividend, or be allotted other rights. The record date may not be prior to the close of business on the day the record date is fixed nor, subject to Section 1.06, more than 90 days before the date on which the action requiring the determination will be taken; the transfer books may not be closed for a period longer than 20 days; and, in the case of a meeting of stockholders, the record date or the closing of the transfer books shall be at least ten days before the date of the meeting. Any shares of the Corporation's own stock acquired by the Corporation between the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders and the time of the meeting may be voted at the meeting by the holder of record as of the record date and shall be counted in determining the total number of outstanding shares entitled to be voted at the meeting. -13- 14 SECTION 6.04. STOCK LEDGER. The Corporation shall maintain a stock ledger which contains the name and address of each stockholder and the number of shares of stock of each class which the stockholder holds. The stock ledger may be in written form or in any other form which can be converted within a reasonable time into written form for visual inspection. The original or a duplicate of the stock ledger shall be kept at the offices of a transfer agent for the particular class of stock, or, if none, at the principal office in the State of Maryland or the principal executive offices of the Corporation. SECTION 6.05. CERTIFICATION OF BENEFICIAL OWNERS. The Board of Directors may adopt by resolution a procedure by which a stockholder of the Corporation may certify in writing to the Corporation that any shares of stock registered in the name of the stockholder are held for the account of a specified person other than the stockholder. The resolution shall set forth the class of stockholders who may certify; the purpose for which the certification may be made; the form of certification and the information to be contained in it; if the certification is with respect to a record date or closing of the stock transfer books, the time after the record date or closing of the stock transfer books within which the certification must be received by the Corporation; and any other provisions with respect to the procedure which the Board of Directors considers necessary or desirable. On receipt of a certification which complies with the procedure adopted by the Board of Directors in accordance with this Section, the person specified in the certification is, for the purpose set forth in the certification, the holder of record of the specified stock in place of the stockholder who makes the certification. SECTION 6.06. LOST STOCK CERTIFICATES. The Board of Directors may determine the conditions for issuing a new stock certificate in place of one which is alleged to have been lost, stolen, or destroyed, or the Board of Directors may delegate such power to any officer or officers of the Corporation. In their discretion, the Board of Directors or such officer or officers may require the owner of the certificate to give bond, with sufficient surety, to indemnify the Corporation against any loss or claim arising as a result of the issuance of a new certificate. In their discretion, the Board of Directors or such officer or officers may refuse to issue such new certificate save upon the order of some court having jurisdiction in the premises. SECTION 6.07. 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 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 rights, 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 other 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 -14- 15 the shares for which such scrip or other evidence of indebtedness is exchangeable may be sold by the Corporation and the proceeds thereof distributed to the holders of such scrip or other evidence of indebtedness, or subject to a provision of 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. ARTICLE VII. FINANCE SECTION 7.01. CHECKS, DRAFTS, ETC. All checks, drafts and orders for the payment of money, notes and other evidences of indebtedness, issued in the name of the Corporation, shall, unless otherwise provided by resolution of the Board of Directors, be signed by the Chairman of the Board, the President, a Vice-President, an Assistant Vice-President, the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary. SECTION 7.02. ANNUAL STATEMENT OF AFFAIRS. The President, chief accounting officer or such other executive officer designated by the Board of Directors by resolution shall prepare annually a full and correct statement of the affairs of the Corporation, to include a balance sheet and a financial statement of operations for the preceding fiscal year. The statement of affairs shall be submitted at the annual meeting of the stockholders and, within 20 days after the meeting, placed on file at the Corporation's principal office. SECTION 7.03. FISCAL YEAR. The fiscal year of the Corporation shall be the 12 calendar months period ending December 31 in each year, unless otherwise provided by the Board of Directors. SECTION 7.04. DIVIDENDS. If declared by the Board of Directors at any meeting thereof, the Corporation may pay dividends on its shares in cash, property, or in shares of the capital stock of the Corporation, unless such dividend is contrary to law or to a restriction contained in the Charter. SECTION 7.05. BONDS. The Board of Directors may require any officer, agent or employee of the Corporation to give a bond to the Corporation, conditioned upon the faithful discharge of his or her duties, with one or more sureties and in such amount as may be satisfactory to the Board of Directors. ARTICLE VIII. INDEMNIFICATION SECTION 8.01. PROCEDURE. Any indemnification, or payment of expenses in advance of the final disposition of any proceeding, shall be made promptly, and in any event within 60 days, upon the written request of the director or officer entitled to seek indemnification (the "Indemnified Party"). The right to indemnification and advances hereunder shall be enforceable by the Indemnified Party in any court of competent jurisdiction, if (i) the -15- 16 Corporation denies such request, in whole or in part, or (ii) no disposition thereof is made within 60 days. The Indemnified Party's costs and expenses incurred in connection with successfully establishing his or her right to indemnification, in whole or in part, in any such action shall also be reimbursed by the Corporation. It shall be a defense to any action for advance for expenses that (a) a determination has been made that the facts then known to those making the determination would preclude indemnification or (b) the Corporation has not received both (i) an undertaking as required by law to repay such advances in the event it shall ultimately be determined that the standard of conduct has not been met and (ii) a written affirmation by the Indemnified Party of such Indemnified Party's good faith belief that the standard of conduct necessary for indemnification by the Corporation has been met. SECTION 8.02. EXCLUSIVITY, ETC. The indemnification and advance of expenses provided by the Charter and these By-Laws shall not be deemed exclusive of any other rights to which a person seeking indemnification or advance of expenses may be entitled under any law (common or statutory), or any agreement, vote of stockholders or disinterested directors or other provision that is consistent with law, both as to action in his or her official capacity and as to action in another capacity while holding office or while employed by or acting as agent for the Corporation, shall continue in respect of all events occurring while a person was a director or officer after such person has ceased to be a director or officer, and shall inure to the benefit of the estate, heirs, executors and administrators of such person. The Corporation shall not be liable for any payment under this By-Law in connection with a claim made by a director or officer to the extent such director or officer has otherwise actually received payment under insurance policy, agreement, vote or otherwise, of the amounts otherwise indemnifiable hereunder. All rights to indemnification and advance of expenses under the Charter of the Corporation and hereunder shall be deemed to be a contract between the Corporation and each director or officer of the Corporation who serves or served in such capacity at any time while this By-Law is in effect. Nothing herein shall prevent the amendment of this By-Law, provided that no such amendment shall diminish the rights of any person hereunder with respect to events occurring or claims made before its adoption or as to claims made after its adoption in respect of events occurring before its adoption. Any repeal or modification of this By-Law shall not in any way diminish any rights to indemnification or advance of expenses of such director or officer or the obligations of the Corporation arising hereunder with respect to events occurring, or claims made, while this By-Law or any provision hereof is in force. SECTION 8.03. SEVERABILITY; DEFINITIONS. The invalidity or unenforceability of any provision of this Article VIII shall not affect the validity or enforceability of any other provision hereof. The phrase "this By-Law" in this Article VIII means this Article VIII in its entirety. ARTICLE IX. SUNDRY PROVISIONS SECTION 9.01. BOOKS AND RECORDS. The Corporation shall keep correct and complete books and records of its accounts and transactions and minutes of the proceedings of its stockholders and Board of Directors and of any executive or other committee when exercising -16- 17 any of the powers of the Board of Directors. The books and records of the Corporation may be in written form or in any other form which can be converted within a reasonable time into written form for visual inspection. Minutes shall be recorded in written form but may be maintained in the form of a reproduction. The original or a certified copy of these By-Laws shall be kept at the principal office of the Corporation. SECTION 9.02. CORPORATE SEAL. The Board of Directors shall provide a suitable seal, bearing the name of the Corporation, which shall be in the charge of the Secretary. The Board of Directors may authorize one or more duplicate seals and provide for the custody thereof. If the Corporation is required to place its corporate seal to a document, it is sufficient to meet the requirement of any law, rule, or regulation relating to a corporate seal to place the word "(seal)" adjacent to the signature of the person authorized to sign the document on behalf of the Corporation. SECTION 9.03. VOTING STOCK IN OTHER CORPORATIONS. Stock of other corporations or associations, registered in the name of the Corporation, may be voted by the Chairman of the Board, the President, a Vice-President, or a proxy appointed by either of them. The Board of Directors, however, may by resolution appoint some other person to vote such shares, in which case such person shall be entitled to vote such shares upon the production of a certified copy of such resolution. SECTION 9.04. MAIL. Any notice or other document which is required by these By-Laws to be mailed shall be deposited in the United States mails, postage prepaid. SECTION 9.05. CONTRACTS AND AGREEMENTS. To the extent permitted by applicable law, and except as otherwise prescribed by the Charter or these By-Laws, the Board of Directors may authorize any officer, employee or agent of the Corporation to enter into any contract or execute and deliver any instrument in the name of and on behalf of the Corporation. Such authority may be general or confined to specific instances. A person who holds more than one office in the Corporation may not act in more than one capacity to execute, acknowledge, or verify an instrument required by law to be executed, acknowledged, or verified by more than one officer. SECTION 9.06. RESIDENT AGENT; PRINCIPAL OFFICE. The initial name and address of the resident agent of the Corporation and the initial address of the principal office of the Corporation in the State of Maryland shall be as set forth in the Charter. The Corporation may change its resident agent or principal office from time to time by filing with the Maryland State Department of Assessments and Taxation (the "Department") a resolution of the Board of Directors authorizing the change, and the Corporation may change from time to time the address of its resident agent by filing with the Department a statement of the change executed by the President or any Vice-President. SECTION 9.07. AMENDMENTS. These By-Laws may be altered, amended or repealed or new By-Laws may be adopted by the stockholders or by the Board of Directors, when such -17- 18 power is conferred upon the Board of Directors by the Charter, 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 By-Laws be contained in the notice of such special meeting. If the power to adopt, amend or repeal By-Laws is conferred upon the Board of Directors by the Charter it shall not divest or limit the power of the stockholders to adopt, amend or repeal By-Laws.(2) SECTION 9.08. RELIANCE. Each director of the Corporation shall, in the performance of his or her duties with respect to the Corporation, be entitled to rely on any information, opinion report or statement, including financial statement or other financial data, prepared or presented by an officer or employee of the Corporation whom the director reasonably believes to be reliable and competent in the matters presented, by a lawyer, certified public accountant or other person as to a matter which the director reasonably believes to be within the person's professional or expert competence or by a committee of the Board of Directors on which the director does not serve, as to a matter within its designated authority, if the director believes the committee to merit confidence. - ---------- (2) Under Article VI, Section 6 of the Charter, this section of the By-Laws may not be amended without the approval of 2/3 of the stockholders. -18- EX-99.1 3 d87044ex99-1.txt EX-99.1 AGMT. RE: DISCLOSURE OF LONG-TERM DEBT 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 Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2001, 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 -----END PRIVACY-ENHANCED MESSAGE-----

EX-3.2

   1
                                                                     EXHIBIT 3.2

{AS ADOPTED ON JANUARY 19, 2000}
{AMENDED APRIL 18, 2001}
================================================================================





                          AMENDED AND RESTATED BY-LAWS


                                       OF


                   APARTMENT INVESTMENT AND MANAGEMENT COMPANY





================================================================================


                                      -1-
   2

                                TABLE OF CONTENTS



                                                                                                        Page
                                                                                                        ----
                                                                                                     
ARTICLE I.    STOCKHOLDERS................................................................................4
     SECTION 1.01.  ANNUAL MEETING........................................................................4
     SECTION 1.02.  SPECIAL MEETING.......................................................................4
     SECTION 1.03.  PLACE OF MEETINGS.....................................................................4
     SECTION 1.04.  NOTICE OF MEETINGS; WAIVER OF NOTICE..................................................4
     SECTION 1.05.  QUORUM; VOTING........................................................................5
     SECTION 1.06.  ADJOURNMENTS..........................................................................5
     SECTION 1.07.  GENERAL RIGHT TO VOTE; PROXIES........................................................5
     SECTION 1.08.  LIST OF STOCKHOLDERS..................................................................6
     SECTION 1.09.  CONDUCT OF VOTING.....................................................................6
     SECTION 1.10.  MEETING BY CONFERENCE TELEPHONE.......................................................6

ARTICLE II.   BOARD OF DIRECTORS..........................................................................6
     SECTION 2.01.  FUNCTION OF DIRECTORS.................................................................6
     SECTION 2.02.  QUALIFICATION AND NUMBER OF DIRECTORS.................................................7
     SECTION 2.03.  ELECTION AND TENURE OF DIRECTORS......................................................7
     SECTION 2.04.  REMOVAL OF DIRECTOR...................................................................7
     SECTION 2.05.  VACANCY ON BOARD OF DIRECTORS.........................................................7
     SECTION 2.06.  REGULAR MEETINGS......................................................................7
     SECTION 2.07.  SPECIAL MEETINGS......................................................................8
     SECTION 2.08.  NOTICE OF MEETING.....................................................................8
     SECTION 2.09.  QUORUM; ACTION BY DIRECTORS...........................................................8
     SECTION 2.10.  MEETING BY CONFERENCE TELEPHONE.......................................................8
     SECTION 2.11.  COMPENSATION..........................................................................9
     SECTION 2.12.  RESIGNATION...........................................................................9
     SECTION 2.13.  PRESUMPTION OF ASSENT.................................................................9

ARTICLE III.  COMMITTEES..................................................................................9
     SECTION 3.01.  COMMITTEES............................................................................9
     SECTION 3.02.  COMMITTEE PROCEDURE...................................................................9

ARTICLE IV.   OFFICERS...................................................................................10
     SECTION 4.01.  EXECUTIVE AND OTHER OFFICERS.........................................................10
     SECTION 4.02.  CHAIRMAN OF THE BOARD................................................................10
     SECTION 4.03.  VICE CHAIRMAN OF THE BOARD...........................................................10




                                      -2-
   3

                                                                                                     
     SECTION 4.04.  PRESIDENT............................................................................10
     SECTION 4.05.  VICE-PRESIDENTS......................................................................11
     SECTION 4.06.  SECRETARY............................................................................11
     SECTION 4.07.  TREASURER............................................................................11
     SECTION 4.08.  ASSISTANT AND SUBORDINATE OFFICERS...................................................11
     SECTION 4.09.  ELECTION, TENURE AND REMOVAL OF OFFICERS.............................................12
     SECTION 4.10.  COMPENSATION.........................................................................12

ARTICLE V.    DIVISIONAL TITLES..........................................................................12
     SECTION 5.01.  CONFERRING DIVISIONAL TITLES.........................................................12
     SECTION 5.02.  EFFECT OF DIVISIONAL TITLES..........................................................12

ARTICLE VI.   STOCK......................................................................................12
     SECTION 6.01.  CERTIFICATES FOR STOCK...............................................................12
     SECTION 6.02.  TRANSFERS............................................................................13
     SECTION 6.03.  RECORD DATES OR CLOSING OF TRANSFER BOOKS............................................13
     SECTION 6.04.  STOCK LEDGER.........................................................................14
     SECTION 6.05.  CERTIFICATION OF BENEFICIAL OWNERS...................................................14
     SECTION 6.06.  LOST STOCK CERTIFICATES..............................................................14
     SECTION 6.07.  FRACTIONAL SHARE INTERESTS OR SCRIP..................................................14

ARTICLE VII.  FINANCE....................................................................................15
     SECTION 7.01.  CHECKS, DRAFTS, ETC. ................................................................15
     SECTION 7.02.  ANNUAL STATEMENT OF AFFAIRS..........................................................15
     SECTION 7.03.  FISCAL YEAR..........................................................................15
     SECTION 7.04.  DIVIDENDS............................................................................15
     SECTION 7.05.  BONDS................................................................................15

ARTICLE VIII. INDEMNIFICATION............................................................................15
     SECTION 8.01.  PROCEDURE............................................................................15
     SECTION 8.02.  EXCLUSIVITY, ETC. ...................................................................16
     SECTION 8.03.  SEVERABILITY; DEFINITIONS............................................................16

ARTICLE IX.   SUNDRY PROVISIONS..........................................................................16
     SECTION 9.01.  BOOKS AND RECORDS....................................................................16
     SECTION 9.02.  CORPORATE SEAL.......................................................................17
     SECTION 9.03.  VOTING STOCK IN OTHER CORPORATIONS...................................................17
     SECTION 9.04.  MAIL.................................................................................17
     SECTION 9.05.  CONTRACTS AND AGREEMENTS.............................................................17
     SECTION 9.06.  RESIDENT AGENT; PRINCIPAL OFFICE.....................................................17
     SECTION 9.07.  AMENDMENTS...........................................................................17
     SECTION 9.08.  RELIANCE.............................................................................18




                                      -3-
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                          AMENDED AND RESTATED BY-LAWS

                                       OF

                   APARTMENT INVESTMENT AND MANAGEMENT COMPANY

                                   ARTICLE I.
                                  STOCKHOLDERS


         SECTION 1.01. ANNUAL MEETING. 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 third Wednesday of April each year
(provided that for the year 2001 such date shall be the third Tuesday of June)
if not a legal holiday, or at such other time on such other day falling on or
before the 30th day thereafter as shall be set by the Board of Directors. Except
as the Charter or statue provides otherwise, any business may be considered at
an annual meeting without the purpose of the meeting having been specified in
the notice. Failure to hold an annual meeting does not invalidate the
Corporation's existence or affect any otherwise valid corporate acts. {Amended
April 18, 2001}

         SECTION 1.02. SPECIAL MEETING. At any time in the interval between
annual meetings, a special meeting of the stockholders may be called by the
Chairman of the Board, 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 by the Secretary at the request of
stockholders only on the written request of stockholders entitled to cast at
least 25% of all the votes entitled to be cast at the meeting. A request for a
special meeting shall state the purpose of the meeting and the matters proposed
to be acted on at it. The Secretary shall inform the stockholders who make the
request of the reasonably estimated costs of preparing and mailing a notice of
the meeting and, on payment of these costs to the Corporation, notify each
stockholder entitled to notice of the meeting. The Board of Directors shall have
sole power to fix the date and time of the special meeting. Unless requested by
stockholders entitled to cast a majority of all the votes entitled to be cast at
the meeting, a special meeting need not be called to consider any matter which
is substantially the same as a matter voted on at any special meeting of
stockholders held in the preceding 12 months.

         SECTION 1.03. PLACE OF MEETINGS. Unless the Charter provides otherwise,
meetings of stockholders shall be held at such place as is set from time to time
by the Board of Directors.

         SECTION 1.04. NOTICE OF MEETINGS; WAIVER OF NOTICE. Not less than ten
nor more


                                      -4-
   5

than 90 days before each stockholders' meeting, the Secretary shall give written
notice of the meeting to each stockholder entitled to vote at the meeting and
each other stockholder entitled to notice of the meeting. The notice shall state
the time and place of the meeting and, if the meeting is a special meeting or
notice of the purpose is required by statute, the purpose of the meeting. Notice
is given to a stockholder when it is personally delivered to him or her, left at
his or her residence or usual place of business, or mailed to him or her at his
or her address as it appears on the records of the Corporation or transmitted to
the stockholder by electronic mail to any electronic mail address of the
stockholder or by any other electronic means. Notwithstanding the foregoing
provisions, each person who is entitled to notice waives notice if he or she
before or after the meeting signs a waiver of the notice which is filed with the
records of stockholders' meetings, or is present at the meeting in person or by
proxy.

         SECTION 1.05. QUORUM; VOTING. Unless any statute or the Charter
provides otherwise, at a meeting of stockholders the presence in person or by
proxy of stockholders entitled to cast a majority of all the votes entitled to
be cast at the meeting constitutes a quorum, and a majority of all the votes
cast at a meeting at which a quorum is present is sufficient to approve any
matter which properly comes before the meeting, except that a plurality of all
the votes cast at a meeting at which a quorum is present is sufficient to elect
a director.

         SECTION 1.06. ADJOURNMENTS. 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 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.

         SECTION 1.07. GENERAL RIGHT TO VOTE; PROXIES. Unless the Charter
provides for a greater or lesser number of votes per share or limits or denies
voting rights, each outstanding share of stock, regardless of class, is entitled
to one vote on each matter submitted to a vote at a meeting of stockholders;
however, a share is not entitled to be voted if any installment payable on it is
overdue and unpaid. In all elections for directors, 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. A stockholder may vote the stock the
stockholder owns of record either in person or by proxy. A stockholder may sign
a writing authorizing another person to act as proxy. Signing may be
accomplished by the stockholder or the stockholder's authorized agent signing
the writing or causing the stockholder's signature to be affixed to the writing
by any reasonable means, including facsimile signature. A stockholder may
authorize another person to act as proxy by transmitting, or authorizing the
transmission of, an authorization by a telegram, cablegram, datagram, electronic
mail or any other electronic or telephonic means to the person authorized to act
as proxy or to any other person authorized to receive the proxy authorization on
behalf of the person authorized to act as the proxy, including a proxy
solicitation firm or proxy support service organization. Unless a proxy provides
otherwise, it is not valid more than 11 months after its date. A proxy is
revocable by a stockholder at any time without condition or qualification unless
the proxy states that it is irrevocable and the proxy is coupled with an


                                      -5-
   6

interest. A proxy may be made irrevocable for so long as it is coupled with an
interest. The interest with which a proxy may be coupled includes an interest in
the stock to be voted under the proxy or another general interest in the
Corporation or its assets or liabilities.

         SECTION 1.08. LIST OF STOCKHOLDERS. At each meeting of stockholders, a
full, true and complete list of all stockholders entitled to vote at such
meeting, showing the number and class of shares held by each and certified by
the transfer agent for such class or by the Secretary, shall be furnished by the
Secretary.

         SECTION 1.09. CONDUCT OF VOTING. At all meetings of stockholders,
unless the voting is conducted by inspectors, the proxies and ballots shall be
received, and all questions touching the qualification of voters and the
validity of proxies, the acceptance or rejection of votes and procedures for the
conduct of business not otherwise specified by these By-Laws, the Charter or
law, shall be decided or determined by the chairman of the meeting. If demanded
by stockholders, present in person or by proxy, entitled to cast 10% in number
of votes entitled to be cast, or if ordered by the chairman of the meeting, the
vote upon any election or question shall be taken by ballot. Before any meeting
of the stockholders, the Board of Directors may appoint persons to act as
inspectors of election at the meeting and any adjournment thereof. If no
inspectors of election are so appointed, the chairman of the meeting may appoint
inspectors of election at the meeting. The number of inspectors shall be either
one or three. If inspectors are appointed at a meeting on the request of
stockholders, the holders of a majority of shares present in person or by proxy
shall determine whether one or three inspectors are to be appointed. No
candidate for election as a director at a meeting shall serve as an inspector
thereat. If any person appointed as inspector fails to appear or fails or
refuses to act, the chairman of the meeting may, and upon the request of any
stockholder shall, appoint a person to fill that vacancy. The inspectors shall
determine the number of shares outstanding and the voting power of each, the
shares represented at the meeting, the existence of a quorum, and the
authenticity, validity and effect of proxies; receive votes, ballots or
consents; hear and determine all challenges and questions in any way arising in
connection with the right to vote; count and tabulate all votes or consents;
determine when polls shall close; determine the result; and do any other acts
that may be proper to conduct the election or vote with fairness to all
stockholders. Unless so demanded or ordered, no vote need be by ballot and
voting need not be conducted by inspectors.

         SECTION 1.10. MEETING BY CONFERENCE TELEPHONE. Stockholders 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. Participation in a meeting by these means
constitutes presence in person at a meeting.

                                   ARTICLE II.
                               BOARD OF DIRECTORS

         SECTION 2.01. FUNCTION OF DIRECTORS. The business and affairs of the
Corporation shall be managed under the direction of its Board of Directors. All
powers of the Corporation may be exercised by or under authority of the Board of
Directors, except as conferred on or reserved to the stockholders by statute or
by the Charter or By-Laws.


                                      -6-
   7

         SECTION 2.02. QUALIFICATION AND NUMBER OF DIRECTORS. Each director
shall be a natural person at least 18 years of age. The Corporation shall have
at least three directors. The Corporation shall have the number of directors
provided in the Charter until changed as herein provided. A majority of the
entire Board of Directors may alter the number of directors set by the Charter
to not exceeding 9 (plus such additional number as may needed to satisfy the
right of the holders of any class of stock of the Corporation to demand
nomination of a director) nor less than the minimum number then permitted
herein, but the action may not affect the tenure of office of any director.

         SECTION 2.03. ELECTION AND TENURE OF DIRECTORS. Subject to the rights
of the holders of any class of stock separately entitled to elect one or more
directors, at each annual meeting, the stockholders shall elect directors to
hold office until the next annual meeting and until their successors are elected
and qualify.

         SECTION 2.04. REMOVAL OF DIRECTOR. 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.(1)

         SECTION 2.05. VACANCY ON BOARD OF DIRECTORS. Subject to the rights of
the holders of any class of stock separately entitled to elect one or more
directors, the stockholders may elect a successor to fill a vacancy on the Board
of Directors which results from the removal of a director. A director elected by
the stockholders to fill a vacancy which results from the removal of a director
serves for the balance of the term of the removed director. Subject to the
rights of the holders of any class of stock separately entitled to elect one or
more directors, a majority of the remaining directors, whether or not sufficient
to constitute a quorum, may fill a vacancy on the Board of Directors which
results from any cause except an increase in the number of directors, and a
majority of the entire Board of Directors may fill a vacancy which results from
an increase in the number of directors. A director elected by the Board of
Directors to fill a vacancy serves until the next annual meeting of stockholders
and until his or her successor is elected and qualifies.

         SECTION 2.06. REGULAR MEETINGS. After each meeting of stockholders at
which directors shall have been elected, the Board of Directors shall meet as
soon thereafter as practicable for the purpose of organization and the
transaction of other business. In the event that no other time and place are
specified by resolution of the Board of Directors or announced by the President
or the Chairman of the Board at such stockholders meeting, the Board of
Directors shall meet immediately following the close of, and at the place of,
such stockholders meeting. Any other regular meeting of the Board of Directors
shall be held on such date and time and at


- ----------

(1)  Under Article VI, Section 6 of the Charter, this section of the By-Laws may
     not be amended without the approval of 2/3 of the stockholders.

                                      -7-
   8

such place as may be designated from time to time by the Board of Directors. No
notice of such meeting following a stockholders meeting or any other regular
meeting shall be necessary if held as hereinabove provided.

         SECTION 2.07. SPECIAL MEETINGS. Special meetings of the Board of
Directors may be called at any time by the Chairman of the Board or the
President or by a majority of the Board of Directors by vote at a meeting, or in
writing with or without a meeting. A special meeting of the Board of Directors
shall be held on such date and at any place as may be designated from time to
time by the Board of Directors. In the absence of designation such meeting shall
be held at such place as may be designated in the call.

         SECTION 2.08. NOTICE OF MEETING. Except as provided in Section 2.06,
the Secretary shall give notice to each director of each regular and special
meeting of the Board of Directors. The notice shall state the time and place of
the meeting. Notice is given to a director when it is delivered personally to
him or her, left at his or her residence or usual place of business, or sent by
telegraph, facsimile transmission or telephone, at least 24 hours before the
time of the meeting or, in the alternative by mail to his or her address as it
shall appear on the records of the Corporation, at least 72 hours before the
time of the meeting. Unless these By-Laws or a resolution of the Board of
Directors provides otherwise, the notice need not state the business to be
transacted at or the purposes of any regular or special meeting of the Board of
Directors. No notice of any meeting of the Board of Directors need be given to
any director who attends except where a director attends a meeting for the
express purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened, or to any director who, in writing
executed and filed with the records of the meeting either before or after the
holding thereof, waives such notice. Any meeting of the Board of Directors,
regular or special, may adjourn from time to time to reconvene at the same or
some other place, and no notice need be given of any such adjourned meeting
other than by announcement.

         SECTION 2.09. QUORUM; ACTION BY DIRECTORS. A majority of the entire
Board of Directors shall constitute a quorum for the transaction of business. In
the absence of a quorum, the directors present by majority vote and without
notice other than by announcement may adjourn the meeting from time to time
until a quorum shall attend. At any such adjourned meeting at which a quorum
shall be present, any business may be transacted which might have been
transacted at the meeting as originally notified. Unless statute or the Charter
or By-Laws requires a greater proportion, the action of a majority of the
directors present at a meeting at which a quorum is present is action of the
Board of Directors. Any action required or permitted to be taken at a meeting of
the Board of Directors may be taken without a meeting, if a unanimous written
consent which sets forth the action is signed by each member of the Board of
Directors and filed with the minutes of proceedings of the Board of Directors.

         SECTION 2.10. MEETING BY CONFERENCE TELEPHONE. Members of the Board of
Directors 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. Participation in a meeting by these means
constitutes presence in person at a meeting.


                                      -8-
   9

         SECTION 2.11. COMPENSATION. By resolution of the Board of Directors a
fixed sum and expenses, if any, for attendance at each regular or special
meeting of the Board of Directors or of committees thereof, and other
compensation for their services as such or on committees of the Board of
Directors, may be paid to directors. Directors who are full-time employees of
the Corporation need not be paid for attendance at meetings of the Board of
Directors or committees thereof for which fees are paid to other directors. A
director who serves the Corporation in any other capacity also may receive
compensation for such other services, pursuant to a resolution of the directors.

         SECTION 2.12. RESIGNATION. Any director may resign at any time by
sending a written notice of such resignation to the home office of the
Corporation addressed to the Chairman of the Board or the President. Unless
otherwise specified therein such resignation shall take effect upon receipt
thereof by the Chairman of the Board or the President.

         SECTION 2.13. PRESUMPTION OF ASSENT. A director of the Corporation who
is present at a meeting of the Board of Directors at which action on any
corporate matter is taken shall be presumed to have assented to the action taken
unless his or her dissent or abstention shall be entered in the minutes of the
meeting or unless he or she shall file his or her written dissent to such action
with the person acting as the secretary of the meeting before the adjournment
thereof or shall forward such dissent by registered mail to the Secretary of the
Corporation immediately after the adjournment of the meeting. Such right to
dissent shall not apply to a director who votes in favor of such action or fails
to make his dissent known at the meeting.

                                  ARTICLE III.
                                   COMMITTEES

         SECTION 3.01. 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 of Directors, 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.

         SECTION 3.02. COMMITTEE PROCEDURE. Each committee may fix rules of
procedure for its business. A majority of the members of a committee shall
constitute a quorum for the


                                      -9-
   10

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. Any action required
or permitted to be taken at a meeting of a committee may be taken without a
meeting, if an unanimous written consent which sets forth the action is signed
by each member of the committee and filed with the minutes of the committee. The
members of a committee may conduct any meeting thereof by conference telephone
in accordance with the provisions of Section 2.10.

                                   ARTICLE IV.
                                    OFFICERS

         SECTION 4.01. EXECUTIVE AND OTHER OFFICERS. The Corporation shall have
a President, a Secretary, and a Treasurer. It may also have a Chairman of the
Board and a Vice Chairman of the Board. The Board of Directors shall designate
who shall serve as chief executive officer, who shall have general supervision
of the business and affairs of the Corporation, and may designate a chief
operating officer, who shall have supervision of the operations of the
Corporation. In the absence of any designation the Chairman of the Board, if
there be one, shall serve as chief executive officer, and the President shall
serve as chief operating officer. In the absence of the Chairman of the Board,
or if there be none, the President shall be the chief executive officer. The
same person may hold both offices. The Corporation may also have one or more
Vice-Presidents, assistant officers, and subordinate officers as may be
established by the Board of Directors. A person may hold more than one office in
the Corporation except that no person may serve concurrently as both President
and Vice-President of the Corporation. The Chairman of the Board and the Vice
Chairman of the Board shall be directors, and the other officers may be
directors.

         SECTION 4.02. CHAIRMAN OF THE BOARD. The Chairman of the Board, if one
be elected, shall preside at all meetings of the Board of Directors and of the
stockholders at which he or she shall be present. Unless otherwise specified by
the Board of Directors, he or she shall be the chief executive officer of the
Corporation. In general, he or she shall perform such duties as are customarily
performed by the chief executive officer of a corporation, may perform any
duties of the President and shall perform such other duties and have such other
powers as are from time to time assigned to him or her by the Board of
Directors.

         SECTION 4.03. VICE CHAIRMAN OF THE BOARD. Unless otherwise provided by
resolution of the Board of Directors, the Vice Chairman of the Board, in the
absence of the Chairman of the Board, shall preside at all meetings of the Board
of Directors and of the stockholders at which he or she shall be present, and
shall perform such other duties and have such other powers as are from time to
time assigned to him or her by the Board of Directors.

         SECTION 4.04. PRESIDENT. Unless otherwise specified by the Board of
Directors, the President shall be the chief operating officer of the Corporation
and perform the duties customarily performed by chief operating officers. He or
she may execute, in the name of the


                                      -10-
   11

Corporation, all authorized deeds, mortgages, bonds, contracts or other
instruments, except in cases in which the signing and execution thereof shall
have been expressly delegated to some other officer or agent of the Corporation.
In general, he or she shall perform such other duties customarily performed by a
president of a corporation and shall perform such other duties and have such
other powers as are from time to time assigned to him or her by the Board of
Directors or the chief executive officer of the Corporation.

         SECTION 4.05. VICE-PRESIDENTS. The Vice-President or Vice-Presidents,
at the request of the chief executive officer or the President, or in the
President's absence or during his or her inability to act, shall perform the
duties and exercise the functions of the President, and when so acting shall
have the powers of the President. If there be more than one Vice-President, the
Board of Directors may determine which one or more of the Vice-Presidents shall
perform any of such duties or exercise any of such functions, or if such
determination is not made by the Board of Directors, the chief executive
officer, or the President may make such determination; otherwise any of the
Vice-Presidents may perform any of such duties or exercise any of such
functions. Each Vice-President shall perform such other duties and have such
other powers, and have such additional descriptive designations in their titles
(if any), as are from time to time assigned to them by the Board of Directors,
the chief executive officer, or the President.

         SECTION 4.06. SECRETARY. The Secretary shall keep the minutes of the
meetings of the stockholders, of the Board of Directors and of any committees,
in books provided for the purpose; he or she shall see that all notices are duly
given in accordance with the provisions of these By-Laws or as required by law;
he or she shall be custodian of the records of the Corporation; he or she may
witness any document on behalf of the Corporation, the execution of which is
duly authorized, see that the corporate seal is affixed where such document is
required or desired to be under its seal, and, when so affixed, may attest the
same. In general, he or she shall perform such other duties customarily
performed by a secretary of a corporation, and shall perform such other duties
and have such other powers as are from time to time assigned to him or her by
the Board of Directors, the chief executive officer, or the President.

         SECTION 4.07. TREASURER. The Treasurer shall have charge of and be
responsible for all funds, securities, receipts and disbursements of the
Corporation, and shall deposit, or cause to be deposited, in the name of the
Corporation, all moneys or other valuable effects in such banks, trust companies
or other depositories as shall, from time to time, be selected by the Board of
Directors; he or she shall render to the President and to the Board of
Directors, whenever requested, an account of the financial condition of the
Corporation. In general, he or she shall perform such other duties customarily
performed by a treasurer of a corporation, and shall perform such other duties
and have such other powers as are from time to time assigned to him or her by
the Board of Directors, the chief executive officer, or the President.

         SECTION 4.08. ASSISTANT AND SUBORDINATE OFFICERS. The assistant and
subordinate officers of the Corporation are all officers below the office of
Vice-President, Secretary, or Treasurer. The assistant or subordinate officers
shall have such duties as are from time to time assigned to them by the Board of
Directors, the chief executive officer, or the President.


                                      -11-
   12

         SECTION 4.09. ELECTION, TENURE AND REMOVAL OF OFFICERS. The Board of
Directors shall elect the officers of the Corporation. The Board of Directors
may from time to time authorize any committee or officer to appoint assistant
and subordinate officers. Election or appointment of an officer, employee or
agent shall not of itself create contract rights. All officers shall be
appointed to hold their offices, respectively, during the pleasure of the Board
of Directors. The Board of Directors (or, as to any assistant or subordinate
officer, any committee or officer authorized by the Board of Directors) may
remove an officer at any time. The removal of an officer does not prejudice any
of his or her contract rights. The Board of Directors (or, as to any assistant
or subordinate officer, any committee or officer authorized by the Board of
Directors) may fill a vacancy which occurs in any office for the unexpired
portion of the term.

         SECTION 4.10. COMPENSATION. The Board of Directors shall have power to
fix the salaries and other compensation and remuneration, of whatever kind, of
all officers of the Corporation. No officer shall be prevented from receiving
such salary by reason of the fact that he or she is also a director of the
Corporation. The Board of Directors may authorize any committee or officer, upon
whom the power of appointing assistant and subordinate officers may have been
conferred, to fix the salaries, compensation and remuneration of such assistant
and subordinate officers.

                                   ARTICLE V.
                                DIVISIONAL TITLES

         SECTION 5.01. CONFERRING DIVISIONAL TITLES. The Board of Directors may
from time to time confer upon any employee of a division of the Corporation the
title of President, Vice President, Treasurer or Controller of such division or
any other title or titles deemed appropriate, or may authorize the Chairman of
the Board or the President to do so. Any such titles so conferred may be
discontinued and withdrawn at any time by the Board of Directors, or by the
Chairman of the Board or the President if so authorized by the Board of
Directors. Any employee of a division designated by such a divisional title
shall have the powers and duties with respect to such division as shall be
prescribed by the Board of Directors, the Chairman of the Board or the
President.

         SECTION 5.02. EFFECT OF DIVISIONAL TITLES. The conferring of divisional
titles shall not create an office of the Corporation under Article IV unless
specifically designated as such by the Board of Directors; but any person who is
an officer of the Corporation may also have a divisional title.

                                   ARTICLE VI.
                                      STOCK

         SECTION 6.01. CERTIFICATES FOR STOCK. Each stockholder is entitled to
certificates which represent and certify the shares of stock he or she holds in
the Corporation. Each stock certificate shall include on its face the name of
the Corporation, the name of the stockholder or


                                      -12-
   13

other person to whom it is issued, and the class of stock and number of shares
it represents. It shall also include on its face or back (a) a statement of any
restrictions on transferability and a statement of the designations and any
preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and conditions of
redemption of the stock of each class which the Corporation is authorized to
issue, of the differences in the relative rights and preferences between the
shares of each series of a preferred or special class in series which the
Corporation is authorized to issue, to the extent they have been set, and of the
authority of the Board of Directors to set the relative rights and preferences
of subsequent series of a preferred or special class of stock or (b) a statement
which provides in substance that the Corporation will furnish a full statement
of such information to any stockholder on request and without charge. Such
request may be made to the Secretary or to its transfer agent. Except as
provided in the Maryland Uniform Commercial Code - Investment Securities, the
fact that a stock certificate does not contain or refer to a restriction on
transferability that is adopted after the date of issuance does not mean that
the restriction is invalid or unenforceable. It shall be in such form, not
inconsistent with law or with the Charter, as shall be approved by the Board of
Directors or any officer or officers designated for such purpose by resolution
of the Board of Directors. Each stock certificate shall be signed by the
Chairman of the Board, the President, or a Vice-President, and countersigned by
the Secretary, an Assistant Secretary, the Treasurer, or an Assistant Treasurer.
Each certificate may be sealed with the actual corporate seal or a facsimile of
it or in any other form and the signatures may be either manual or facsimile
signatures. A certificate is valid and may be issued whether or not an officer
who signed it is still an officer when it is issued. A certificate may not be
issued until the stock represented by it is fully paid.

         SECTION 6.02. TRANSFERS. The Board of Directors shall have power and
authority to make such rules and regulations as it may deem expedient concerning
the issue, transfer and registration of certificates of stock; and may appoint
transfer agents and registrars thereof. The duties of transfer agent and
registrar may be combined.

         SECTION 6.03. RECORD DATES OR CLOSING OF TRANSFER BOOKS. The Board of
Directors may, and shall have the sole power to, 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 request a special meeting of stockholders, notice
of a meeting of stockholders, vote at a meeting of stockholders, receive a
dividend, or be allotted other rights. The record date may not be prior to the
close of business on the day the record date is fixed nor, subject to Section
1.06, more than 90 days before the date on which the action requiring the
determination will be taken; the transfer books may not be closed for a period
longer than 20 days; and, in the case of a meeting of stockholders, the record
date or the closing of the transfer books shall be at least ten days before the
date of the meeting. Any shares of the Corporation's own stock acquired by the
Corporation between the record date for determining stockholders entitled to
notice of or to vote at a meeting of stockholders and the time of the meeting
may be voted at the meeting by the holder of record as of the record date and
shall be counted in determining the total number of outstanding shares entitled
to be voted at the meeting.


                                      -13-
   14

         SECTION 6.04. STOCK LEDGER. The Corporation shall maintain a stock
ledger which contains the name and address of each stockholder and the number of
shares of stock of each class which the stockholder holds. The stock ledger may
be in written form or in any other form which can be converted within a
reasonable time into written form for visual inspection. The original or a
duplicate of the stock ledger shall be kept at the offices of a transfer agent
for the particular class of stock, or, if none, at the principal office in the
State of Maryland or the principal executive offices of the Corporation.

         SECTION 6.05. CERTIFICATION OF BENEFICIAL OWNERS. The Board of
Directors may adopt by resolution a procedure by which a stockholder of the
Corporation may certify in writing to the Corporation that any shares of stock
registered in the name of the stockholder are held for the account of a
specified person other than the stockholder. The resolution shall set forth the
class of stockholders who may certify; the purpose for which the certification
may be made; the form of certification and the information to be contained in
it; if the certification is with respect to a record date or closing of the
stock transfer books, the time after the record date or closing of the stock
transfer books within which the certification must be received by the
Corporation; and any other provisions with respect to the procedure which the
Board of Directors considers necessary or desirable. On receipt of a
certification which complies with the procedure adopted by the Board of
Directors in accordance with this Section, the person specified in the
certification is, for the purpose set forth in the certification, the holder of
record of the specified stock in place of the stockholder who makes the
certification.

         SECTION 6.06. LOST STOCK CERTIFICATES. The Board of Directors may
determine the conditions for issuing a new stock certificate in place of one
which is alleged to have been lost, stolen, or destroyed, or the Board of
Directors may delegate such power to any officer or officers of the Corporation.
In their discretion, the Board of Directors or such officer or officers may
require the owner of the certificate to give bond, with sufficient surety, to
indemnify the Corporation against any loss or claim arising as a result of the
issuance of a new certificate. In their discretion, the Board of Directors or
such officer or officers may refuse to issue such new certificate save upon the
order of some court having jurisdiction in the premises.

         SECTION 6.07. 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 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 rights, 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 other 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


                                      -14-
   15

the shares for which such scrip or other evidence of indebtedness is
exchangeable may be sold by the Corporation and the proceeds thereof distributed
to the holders of such scrip or other evidence of indebtedness, or subject to a
provision of 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.

                                  ARTICLE VII.
                                     FINANCE

         SECTION 7.01. CHECKS, DRAFTS, ETC. All checks, drafts and orders for
the payment of money, notes and other evidences of indebtedness, issued in the
name of the Corporation, shall, unless otherwise provided by resolution of the
Board of Directors, be signed by the Chairman of the Board, the President, a
Vice-President, an Assistant Vice-President, the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary.

         SECTION 7.02. ANNUAL STATEMENT OF AFFAIRS. The President, chief
accounting officer or such other executive officer designated by the Board of
Directors by resolution shall prepare annually a full and correct statement of
the affairs of the Corporation, to include a balance sheet and a financial
statement of operations for the preceding fiscal year. The statement of affairs
shall be submitted at the annual meeting of the stockholders and, within 20 days
after the meeting, placed on file at the Corporation's principal office.

         SECTION 7.03. FISCAL YEAR. The fiscal year of the Corporation shall be
the 12 calendar months period ending December 31 in each year, unless otherwise
provided by the Board of Directors.

         SECTION 7.04. DIVIDENDS. If declared by the Board of Directors at any
meeting thereof, the Corporation may pay dividends on its shares in cash,
property, or in shares of the capital stock of the Corporation, unless such
dividend is contrary to law or to a restriction contained in the Charter.

         SECTION 7.05. BONDS. The Board of Directors may require any officer,
agent or employee of the Corporation to give a bond to the Corporation,
conditioned upon the faithful discharge of his or her duties, with one or more
sureties and in such amount as may be satisfactory to the Board of Directors.

                                  ARTICLE VIII.
                                 INDEMNIFICATION

         SECTION 8.01. PROCEDURE. Any indemnification, or payment of expenses in
advance of the final disposition of any proceeding, shall be made promptly, and
in any event within 60 days, upon the written request of the director or officer
entitled to seek indemnification (the "Indemnified Party"). The right to
indemnification and advances hereunder shall be enforceable by the Indemnified
Party in any court of competent jurisdiction, if (i) the


                                      -15-
   16

Corporation denies such request, in whole or in part, or (ii) no disposition
thereof is made within 60 days. The Indemnified Party's costs and expenses
incurred in connection with successfully establishing his or her right to
indemnification, in whole or in part, in any such action shall also be
reimbursed by the Corporation. It shall be a defense to any action for advance
for expenses that (a) a determination has been made that the facts then known to
those making the determination would preclude indemnification or (b) the
Corporation has not received both (i) an undertaking as required by law to repay
such advances in the event it shall ultimately be determined that the standard
of conduct has not been met and (ii) a written affirmation by the Indemnified
Party of such Indemnified Party's good faith belief that the standard of conduct
necessary for indemnification by the Corporation has been met.

         SECTION 8.02. EXCLUSIVITY, ETC. The indemnification and advance of
expenses provided by the Charter and these By-Laws shall not be deemed exclusive
of any other rights to which a person seeking indemnification or advance of
expenses may be entitled under any law (common or statutory), or any agreement,
vote of stockholders or disinterested directors or other provision that is
consistent with law, both as to action in his or her official capacity and as to
action in another capacity while holding office or while employed by or acting
as agent for the Corporation, shall continue in respect of all events occurring
while a person was a director or officer after such person has ceased to be a
director or officer, and shall inure to the benefit of the estate, heirs,
executors and administrators of such person. The Corporation shall not be liable
for any payment under this By-Law in connection with a claim made by a director
or officer to the extent such director or officer has otherwise actually
received payment under insurance policy, agreement, vote or otherwise, of the
amounts otherwise indemnifiable hereunder. All rights to indemnification and
advance of expenses under the Charter of the Corporation and hereunder shall be
deemed to be a contract between the Corporation and each director or officer of
the Corporation who serves or served in such capacity at any time while this
By-Law is in effect. Nothing herein shall prevent the amendment of this By-Law,
provided that no such amendment shall diminish the rights of any person
hereunder with respect to events occurring or claims made before its adoption or
as to claims made after its adoption in respect of events occurring before its
adoption. Any repeal or modification of this By-Law shall not in any way
diminish any rights to indemnification or advance of expenses of such director
or officer or the obligations of the Corporation arising hereunder with respect
to events occurring, or claims made, while this By-Law or any provision hereof
is in force.

         SECTION 8.03. SEVERABILITY; DEFINITIONS. The invalidity or
unenforceability of any provision of this Article VIII shall not affect the
validity or enforceability of any other provision hereof. The phrase "this
By-Law" in this Article VIII means this Article VIII in its entirety.

                                   ARTICLE IX.
                                SUNDRY PROVISIONS

         SECTION 9.01. BOOKS AND RECORDS. The Corporation shall keep correct and
complete books and records of its accounts and transactions and minutes of the
proceedings of its stockholders and Board of Directors and of any executive or
other committee when exercising


                                      -16-
   17

any of the powers of the Board of Directors. The books and records of the
Corporation may be in written form or in any other form which can be converted
within a reasonable time into written form for visual inspection. Minutes shall
be recorded in written form but may be maintained in the form of a reproduction.
The original or a certified copy of these By-Laws shall be kept at the principal
office of the Corporation.

         SECTION 9.02. CORPORATE SEAL. The Board of Directors shall provide a
suitable seal, bearing the name of the Corporation, which shall be in the charge
of the Secretary. The Board of Directors may authorize one or more duplicate
seals and provide for the custody thereof. If the Corporation is required to
place its corporate seal to a document, it is sufficient to meet the requirement
of any law, rule, or regulation relating to a corporate seal to place the word
"(seal)" adjacent to the signature of the person authorized to sign the document
on behalf of the Corporation.

         SECTION 9.03. VOTING STOCK IN OTHER CORPORATIONS. Stock of other
corporations or associations, registered in the name of the Corporation, may be
voted by the Chairman of the Board, the President, a Vice-President, or a proxy
appointed by either of them. The Board of Directors, however, may by resolution
appoint some other person to vote such shares, in which case such person shall
be entitled to vote such shares upon the production of a certified copy of such
resolution.

         SECTION 9.04. MAIL. Any notice or other document which is required by
these By-Laws to be mailed shall be deposited in the United States mails,
postage prepaid.

         SECTION 9.05. CONTRACTS AND AGREEMENTS. To the extent permitted by
applicable law, and except as otherwise prescribed by the Charter or these
By-Laws, the Board of Directors may authorize any officer, employee or agent of
the Corporation to enter into any contract or execute and deliver any instrument
in the name of and on behalf of the Corporation. Such authority may be general
or confined to specific instances. A person who holds more than one office in
the Corporation may not act in more than one capacity to execute, acknowledge,
or verify an instrument required by law to be executed, acknowledged, or
verified by more than one officer.

         SECTION 9.06. RESIDENT AGENT; PRINCIPAL OFFICE. The initial name and
address of the resident agent of the Corporation and the initial address of the
principal office of the Corporation in the State of Maryland shall be as set
forth in the Charter. The Corporation may change its resident agent or principal
office from time to time by filing with the Maryland State Department of
Assessments and Taxation (the "Department") a resolution of the Board of
Directors authorizing the change, and the Corporation may change from time to
time the address of its resident agent by filing with the Department a statement
of the change executed by the President or any Vice-President.

         SECTION 9.07. AMENDMENTS. These By-Laws may be altered, amended or
repealed or new By-Laws may be adopted by the stockholders or by the Board of
Directors, when such


                                      -17-
   18

power is conferred upon the Board of Directors by the Charter, 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 By-Laws be contained in the
notice of such special meeting. If the power to adopt, amend or repeal By-Laws
is conferred upon the Board of Directors by the Charter it shall not divest or
limit the power of the stockholders to adopt, amend or repeal By-Laws.(2)

         SECTION 9.08. RELIANCE. Each director of the Corporation shall, in the
performance of his or her duties with respect to the Corporation, be entitled to
rely on any information, opinion report or statement, including financial
statement or other financial data, prepared or presented by an officer or
employee of the Corporation whom the director reasonably believes to be reliable
and competent in the matters presented, by a lawyer, certified public accountant
or other person as to a matter which the director reasonably believes to be
within the person's professional or expert competence or by a committee of the
Board of Directors on which the director does not serve, as to a matter within
its designated authority, if the director believes the committee to merit
confidence.

- ----------

(2)  Under Article VI, Section 6 of the Charter, this section of the By-Laws may
     not be amended without the approval of 2/3 of the stockholders.

                                      -18-

EX-99.1

   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 Quarterly Report on Form 10-Q for
the quarterly period ended March 31, 2001, 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