10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2009

OR

o 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	84-1259577
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
4582 South Ulster Street Parkway, Suite 1100
Denver, Colorado	80237
(Address of principal executive offices)	(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 þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

The number of shares of Class A Common Stock outstanding as of April 29, 2009: 117,104,219

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

TABLE OF CONTENTS

FORM 10-Q

	Page
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Condensed Consolidated Balance Sheets as of March 31, 2009 and December 31, 2008 (Unaudited)		2
Condensed Consolidated Statements of Income for the Three Months Ended March 31, 2009 and 2008 (Unaudited)		3
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2009 and 2008 (Unaudited)		4
Notes to Condensed Consolidated Financial Statements (Unaudited)		5
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		18
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk		31
ITEM 4. Controls and Procedures		32
PART II. OTHER INFORMATION
ITEM 1A. Risk Factors		33
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds		33
ITEM 5. Other Information		33
ITEM 6. Exhibits		34
Signatures		35
Exhibit 3.2
Exhibit 10.1
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2
Exhibit 99.1

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)
(Unaudited)

	March 31,			December 31,
	2009			2008
ASSETS
Real estate:
Buildings and improvements	$	8,568,442		$	8,520,382
Land		2,337,853			2,326,671
Total real estate		10,906,295			10,847,053
Less accumulated depreciation		(2,883,910	)		(2,771,131	)
Net real estate		8,022,385			8,075,922
Cash and cash equivalents		93,233			299,676
Restricted cash		265,639			258,156
Accounts receivable, net		80,689			92,923
Accounts receivable from affiliates, net		32,833			36,372
Deferred financing costs, net		58,388			59,070
Notes receivable from unconsolidated real estate partnerships, net		24,267			22,567
Notes receivable from non-affiliates, net		139,949			139,897
Investment in unconsolidated real estate partnerships		121,322			119,036
Other assets		199,203			188,764
Deferred income tax assets, net		27,052			28,326
Assets held for sale		17,258			94,157
Total assets	$	9,082,218		$	9,414,866
LIABILITIES AND EQUITY
Property tax-exempt bond financing	$	720,722		$	721,971
Property loans payable		5,558,506			5,545,893
Term loans		350,000			400,000
Credit facility		15,000			—
Other borrowings		90,941			95,981
Total indebtedness		6,735,169			6,763,845
Accounts payable		32,902			64,241
Accrued liabilities and other		291,081			411,209
Deferred income		184,796			195,202
Security deposits		42,774			43,088
Liabilities related to assets held for sale		5,176			70,599
Total liabilities		7,291,898			7,548,184
Preferred noncontrolling interests in Aimco Operating Partnership		87,247			88,148
Commitments and contingencies (Note 5)
Equity:
Perpetual Preferred Stock		696,500			696,500
Class A Common Stock, $.01 par value, 426,157,736 shares authorized, 116,477,696 and 116,180,877 shares issued and outstanding, at March 31, 2009 and December 31, 2008, respectively		1,165			1,162
Additional paid-in capital		3,061,099			3,056,550
Notes due on common stock purchases		(2,148	)		(3,607	)
Distributions in excess of earnings		(2,372,038	)		(2,335,628	)
Total Aimco equity		1,384,578			1,414,977
Noncontrolling interests in consolidated real estate partnerships		323,414			363,557
Common noncontrolling interests in Aimco Operating Partnership		(4,919	)		—
Total equity		1,703,073			1,778,534
Total liabilities and equity	$	9,082,218		$	9,414,866

See notes to condensed consolidated financial statements.

2

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)
(Unaudited)

	Three Months Ended
	March 31,
	2009			2008
REVENUES:
Rental and other property revenues	$	338,093		$	332,892
Property management revenues, primarily from affiliates		1,644			2,104
Asset management and tax credit revenues		9,539			12,852
Total revenues		349,276			347,848
OPERATING EXPENSES:
Property operating expenses		156,489			161,764
Property management expenses		1,433			1,335
Investment management expenses		3,789			4,387
Depreciation and amortization		123,215			103,500
General and administrative expenses		20,072			21,366
Other expenses, net		2,292			5,751
Total operating expenses		307,290			298,103
Operating income		41,986			49,745
Interest income		3,340			8,115
Provision for losses on notes receivable, net		(150	)		(223	)
Interest expense		(91,511	)		(91,533	)
Equity losses of unconsolidated real estate partnerships		(2,040	)		(1,029	)
Provision for operating real estate impairment losses		(1,760	)		—
Gain (loss) on dispositions of unconsolidated real estate and other		10,862			(137	)
Loss before income taxes and discontinued operations		(39,273	)		(35,062	)
Income tax benefit		3,016			1,772
Loss from continuing operations		(36,257	)		(33,290	)
Income from discontinued operations, net		3,688			8,159
Net loss		(32,569	)		(25,131	)
Noncontrolling interests:
Net loss (income) attributable to noncontrolling interests in consolidated real estate partnerships		6,273			(1,843	)
Net income attributable to preferred noncontrolling interests in Aimco Operating Partnership		(1,069	)		(1,782	)
Net loss attributable to common noncontrolling interests in Aimco Operating Partnership		2,835			4,108
Total noncontrolling interests		8,039			483
Net loss attributable to Aimco		(24,530	)		(24,648	)
Net income attributable to Aimco preferred stockholders		13,166			14,208
Net loss attributable to Aimco common stockholders	$	(37,696	)	$	(38,856	)
Earnings (loss) attributable to Aimco per common share – basic and diluted (Note 6):
Loss from continuing operations attributable to Aimco (net of income attributable to preferred stockholders)	$	(0.33	)	$	(0.34	)
Income from discontinued operations attributable to Aimco		—			0.04
Net loss attributable to Aimco common stockholders	$	(0.33	)	$	(0.30	)
Weighted average common shares outstanding, basic and diluted		115,099			127,961
Dividends declared per common share	$	0.00		$	0.00

See notes to condensed consolidated financial statements.

3

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)
(Unaudited)

	Three Months Ended
	March 31,
	2009			2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(32,569	)	$	(25,131	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization		123,215			103,500
(Gain) loss on dispositions of unconsolidated real estate		(10,862	)		137
Discontinued operations		(8,153	)		20,458
Other adjustments		10,126			9,249
Net changes in operating assets and operating liabilities		(99,531	)		(49,726	)
Net cash (used in) provided by operating activities		(17,774	)		58,487
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		(68,370	)		(150,823	)
Proceeds from dispositions of real estate		53,630			33,351
Purchases of partnership interests and other assets		(1,350	)		(8,413	)
Originations of notes receivable from unconsolidated real estate partnerships		(3,146	)		(3,497	)
Proceeds from repayment of notes receivable		1,468			4,880
Other investing activities		8,869			10,968
Net cash used in investing activities		(8,899	)		(113,534	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from property loans		173,149			213,321
Principal repayments on property loans		(187,926	)		(136,197	)
Proceeds from tax-exempt bond financing		—			21,200
Principal repayments on tax-exempt bond financing		(4,319	)		(1,228	)
Payments on term loans		(50,000	)		—
Net borrowings on revolving credit facility		15,000			218,800
Repurchases of Class A Common Stock		—			(199,370	)
Payment of Class A Common Stock dividends		(60,383	)		(54,655	)
Payment of preferred stock dividends		(13,166	)		(14,208	)
Payment of distributions to noncontrolling interests		(58,151	)		(46,554	)
Other financing activities		6,026			6,560
Net cash (used in) provided by financing activities		(179,770	)		7,669
NET DECREASE IN CASH AND CASH EQUIVALENTS		(206,443	)		(47,378	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		299,676			210,461
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	93,233		$	163,083

See notes to condensed consolidated financial statements.

4

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2009
(Unaudited)

NOTE 1 — Organization

Apartment Investment and Management Company, or Aimco, is a Maryland corporation incorporated on January 10, 1994. We are a self-administered and self-managed real estate investment trust, or REIT, engaged in the acquisition, ownership, management and redevelopment of apartment properties. As of March 31, 2009, we owned or managed a real estate portfolio of 976 apartment properties containing 160,118 apartment units located in 44 states, the District of Columbia and Puerto Rico. We are one of the largest owners and operators of apartment properties in the United States.

As of March 31, 2009, we:

• owned an equity interest in and consolidated 115,723 units in 504 properties (which we refer to as “consolidated properties”), of which 113,102 units were also managed by us;

• owned an equity interest in and did not consolidate 9,431 units in 84 properties (which we refer to as “unconsolidated properties”), of which 4,364 units were also managed by us; and

• provided services for or managed 34,964 units in 388 properties, primarily pursuant to long-term agreements (including 32,501 units in 361 properties for which we provide asset management services only, and not also property management services). In certain cases, we may indirectly own generally less than one percent of the operations of such properties through a partnership syndication or other fund.

Through our wholly-owned subsidiaries, AIMCO-GP, Inc. and AIMCO-LP Trust, we own a majority of the ownership interests in AIMCO Properties, L.P., which we refer to as the Aimco Operating Partnership. As of March 31, 2009, we held an interest of approximately 93% in the common partnership units and equivalents of the Aimco Operating Partnership. We conduct substantially all of our business and own substantially all of our assets through the Aimco Operating Partnership. Interests in the Aimco Operating Partnership that are held by limited partners other than Aimco are referred to as “OP Units.” OP Units include common OP Units, partnership preferred units, or preferred OP Units, and high performance partnership units, or High Performance Units. The Aimco Operating Partnership’s income is allocated to holders of common OP Units based on the weighted average number of common OP Units and equivalents outstanding during the period. The holders of the common OP Units and Class I High Performance Units receive distributions, prorated from the date of issuance, in an amount equivalent to the dividends paid to holders of Aimco Class A Common Stock (which we refer to as Common Stock). Holders of common OP Units may redeem such units for cash or, at the Aimco Operating Partnership’s option, Common Stock. Preferred OP Units entitle the holders thereof to a preference with respect to distributions or upon liquidation. At March 31, 2009, 116,477,696 shares of our Common Stock were outstanding and the Aimco Operating Partnership had 9,342,791 common OP Units and equivalents outstanding for a combined total of 125,820,487 shares of Common Stock and OP Units outstanding (excluding preferred OP Units).

Except as the context otherwise requires, “we,” “our,” “us” and the “Company” refer to Aimco, the Aimco Operating Partnership and their consolidated entities, collectively.

NOTE 2 — Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America, or GAAP, have been condensed or omitted in accordance with such rules and regulations, although management believes the disclosures are adequate to prevent the information presented from being misleading. In the opinion of management, all adjustments (consisting of normal recurring items) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2009, are not necessarily indicative of the results that may be expected for the year ending December 31, 2009.

The balance sheet at December 31, 2008, has been derived from the audited financial statements at that date, but does not include all of the information and disclosures required by GAAP for complete financial statements. For further information, refer to the financial statements and notes thereto included in Aimco’s Annual Report on Form 10-K for the year ended December 31, 2008. Certain 2008 financial statement amounts have been reclassified to conform to the 2009 presentation.

5

Share and per share information for the periods presented has been retroactively adjusted for the effect of shares of Common Stock issued in connection with special dividends paid during 2008 and January 2009.

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of Aimco, the Aimco Operating Partnership, and their consolidated entities. We consolidate all variable interest entities for which we are the primary beneficiary. Generally, we consolidate real estate partnerships and other entities that are not variable interest entities when we own, directly or indirectly, a majority voting interest in the entity or are otherwise able to control the entity. All significant intercompany balances and transactions have been eliminated in consolidation.

Interests in the Aimco Operating Partnership that are held by limited partners other than Aimco are reflected in the accompanying balance sheets as noncontrolling interest in Aimco Operating Partnership. Interests in partnerships consolidated into the Aimco Operating Partnership that are held by third parties are reflected in the accompanying balance sheets as noncontrolling interest in consolidated real estate partnerships. The assets of consolidated real estate partnerships owned or controlled by us generally are not available to pay creditors of Aimco or the Aimco Operating Partnership.

As used herein, and except where the context otherwise requires, “partnership” refers to a limited partnership or a limited liability company and “partner” refers to a partner in a limited partnership or a member in a limited liability company.

Variable Interest Entities

Financial Accounting Standards Board, or FASB, Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities, or FIN 46, addresses the consolidation by business enterprises of variable interest entities. We consolidate all variable interest entities for which we are the primary beneficiary. Generally, a variable interest entity, or VIE, is an entity with one or more of the following characteristics: (a) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support; (b) as a group, the holders of the equity investment at risk lack (i) the ability to make decisions about an entity’s activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; or (c) the equity investors have voting rights that are not proportional to their economic interests and substantially all of the entity’s activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights. FIN 46 requires a VIE to be consolidated in the financial statements of the entity that is determined to be the primary beneficiary of the VIE. The primary beneficiary generally is the entity that will receive a majority of the VIE’s expected losses, receive a majority of the VIE’s expected residual returns, or both.

In determining whether we are the primary beneficiary of a VIE, we consider qualitative and quantitative factors, including, but not limited to: the amount and characteristics of our investment; the obligation or likelihood for us or other investors to provide financial support; our and the other investors’ ability to control or significantly influence key decisions for the VIE; and the similarity with and significance to the business activities of us and the other investors. Significant judgments related to these determinations include estimates about the current and future fair values and performance of real estate held by these VIEs and general market conditions.

As of March 31, 2009, we were the primary beneficiary of, and therefore consolidated, 92 VIEs, which owned 69 apartment properties with 9,941 units. Real estate with a carrying value of $783.2 million collateralized $473.0 million of debt of those VIEs. The creditors of the consolidated VIEs do not have recourse to our general credit. As of March 31, 2009, we also held variable interests in 129 VIEs for which we were not the primary beneficiary. Those VIEs consist primarily of partnerships that are engaged, directly or indirectly, in the ownership and management of 180 apartment properties with 11,049 units. We are involved with those VIEs as an equity holder, lender, management agent, or through other contractual relationships. At March 31, 2009, our maximum exposure to loss as a result of our involvement with unconsolidated VIEs is limited to our recorded investments in and receivables from those VIEs totaling $119.7 million and our contractual obligation to advance funds to certain VIEs totaling $5.4 million. We may be subject to additional losses to the extent of any financial support that we voluntarily provide in the future. Additionally, the provision of financial support in the future may require us to consolidate a VIE.

6

Adoption of SFAS 160

We adopted the provisions of FASB Statement of Financial Accounting Standards No. 160, Noncontrolling Interests in Consolidated Financial Statements — an amendment of ARB No. 51, or SFAS 160, effective January 1, 2009. SFAS 160 clarifies that a noncontrolling interest in a subsidiary is an ownership interest in a consolidated entity, which should be reported as equity in the parent’s consolidated financial statements. SFAS 160 requires disclosure, on the face of the consolidated income statements, of those amounts of consolidated net income and other comprehensive income attributable to controlling and noncontrolling interests, eliminating the past practice of reporting amounts of income attributable to noncontrolling interests as an adjustment in arriving at consolidated net income. SFAS 160 requires the parent to attribute to noncontrolling interests their share of losses even if such attribution results in a deficit noncontrolling interest balance within the parent’s equity accounts, and in some instances, requires a parent to recognize a gain or loss in net income when a subsidiary is deconsolidated.

In connection with our adoption of SFAS 160, we reclassified into our consolidated equity accounts the historical balances related to noncontrolling interests in consolidated real estate partnerships and the portion of noncontrolling interests in Aimco Operating Partnership related to the Aimco Operating Partnership’s common OP Units and High Performance Units. At December 31, 2008, the carrying amount of noncontrolling interests in consolidated real estate partnerships was $363.6 million and the carrying amount for noncontrolling interests in Aimco Operating Partnership attributable to common OP Units and High Performance Units was zero, due to cash distributions in excess of the positive balances related to those noncontrolling interests.

Under SFAS 160, we no longer record a charge related to cash distributions to noncontrolling interests in excess of the carrying amount of such noncontrolling interests, and we attribute losses to noncontrolling interests even if such attribution results in a deficit noncontrolling interest balance within our equity accounts. The following table illustrates the pro forma amounts of loss from continuing operations, discontinued operations and net income that would have been attributed to Aimco common stockholders for the three months ended March 31, 2009, had we applied the provisions of Accounting Research Bulletin No. 51, prior to their amendment by SFAS 160 (in thousands, except per share amounts):

Loss from continuing operations attributable to Aimco (net of income attributable to preferred stockholders)	$	(59,987	)
Loss from discontinued operations attributable to Aimco		(1,170	)
Net loss attributable to Aimco common stockholders	$	(61,157	)
Basic and diluted earnings (loss) per common share:
Loss from continuing operations attributable to Aimco (net of income attributable to preferred stockholders)	$	(0.52	)
Loss from discontinued operations attributable to Aimco		(0.01	)
Net loss attributable to Aimco common stockholders	$	(0.53	)

7

The following table presents a reconciliation of the December 31, 2008 and March 31, 2009, carrying amounts for preferred noncontrolling interests in the Aimco Operating Partnership, consolidated equity and the related amounts of equity attributable to Aimco and noncontrolling interests:

				Equity
										Common
	Preferred						Noncontrolling			noncontrolling
	noncontrolling						interests in			interests in
	interests in Aimco						consolidated			Aimco
	Operating			Equity attributable			real estate			Operating
	Partnership			to Aimco			partnerships			Partnership			Total equity
Balance, December 31, 2008	$	88,148		$	1,414,977		$	363,557		$	—		$	1,778,534
Contributions		—			—			3,035			—			3,035
Dividends/distributions		(955	)		(13,166	)		(36,564	)		—			(49,730	)
Conversions and repurchases of units and shares		(1,015	)		1,297			—			(1,333	)		(36	)
Amortization of stock based compensation cost		—			3,284			—			—			3,284
Other		—			2,034			—			(751	)		1,283
Effect of changes in ownership		—			470			(470	)		—			—
Change in other comprehensive income		—			212			129			—			341
Net income (loss)		1,069			(24,530	)		(6,273	)		(2,835	)		(33,638	)
Balance, March 31, 2009	$	87,247		$	1,384,578		$	323,414		$	(4,919	)	$	1,703,073

SFAS 160 does not amend the provisions of EITF Topic D-98, Classification and Measurement of Redeemable Securities, or EITF D-98, which addresses the classification and measurement of redeemable securities, including noncontrolling interests in a subsidiary; however, the FASB amended EITF D-98 in March 2008 to address the interaction of EITF D-98 with SFAS 160. Pursuant to EITF D-98, the Aimco Operating Partnership’s preferred OP Units, which are generally redeemable at the holders’ option and may be settled in cash or, at the Aimco Operating Partnership’s discretion, shares of Common Stock, will continue to be classified within temporary equity in our consolidated balance sheets.

Adoption of SFAS 141(R)

We adopted the provisions of FASB Statement of Financial Accounting Standards No. 141(R), Business Combinations — a replacement of FASB Statement No. 141, or SFAS 141(R), effective January 1, 2009. SFAS 141(R) applies to all transactions or events in which an entity obtains control of one or more businesses, including those effected without the transfer of consideration, for example by contract or through a lapse of minority veto rights. SFAS 141(R) requires the acquiring entity in a business combination to recognize the full fair value of assets acquired and liabilities assumed in the transaction (whether a full or partial acquisition); establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed; and requires expensing of most transaction and restructuring costs.

We believe most operating real estate assets meet the revised definition of a business under SFAS 141(R). Accordingly, beginning in 2009, we expense transaction costs associated with acquisitions of operating real estate or interests therein when we consolidate the asset. SFAS 141(R) does not provide implementation guidance regarding the treatment of acquisition costs incurred prior to December 31, 2008, for acquisitions that do not close until 2009 when SFAS 141(R) is effective. The SEC has indicated any of the following three transition methods are acceptable, provided that the method chosen is disclosed and applied consistently:

1)	expense acquisition costs in 2008 when it is probable that the acquisition will not close in 2008;
2)	expense acquisition costs January 1, 2009, upon adoption of SFAS 141(R); or
3)	give retroactive treatment to the acquisition costs January 1, 2009, upon adoption of SFAS 141(R), by retroactively adjusting prior periods to record acquisition costs in the prior periods in which they were incurred, in accordance with Statement of Financial Accounting Standards No. 154, Accounting Changes and Error Corrections.

We elected to apply the third method and accordingly have retroactively adjusted our 2008 results of operations and equity by $3.5 million, $0.1 million of which was incurred during the three months ended March 31, 2008, and is reflected in investment management expenses in our accompanying condensed consolidated statement of income. This retroactive adjustment had no net effect on earnings per share amounts for the three months ended March 31, 2008.

8

Adoption of FSP EITF 03-6-1

We adopted the provisions of FASB FSP EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions are Participating Securities, or the FSP, effective January 1, 2009. The FSP clarifies that unvested share-based payment awards that participate in dividends similar to shares of common stock or common partnership units should be treated as participating securities. The FSP affects the computation of basic and diluted earnings per share for unvested restricted stock awards and shares purchased pursuant to officer stock loans, which serve as collateral for such loans, both of which entitle the holders to dividends. The FSP did not affect earnings per share amounts for the three months ended March 31, 2009 and 2008, because we reported net losses in these periods and accordingly had no undistributed earnings. We do not expect the FSP to have a material effect on future earnings per share amounts.

Adoption of SFAS 161

We adopted the provisions of FASB Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities – an amendment of FASB Statement No. 133, or SFAS 161, effective January 1, 2009. SFAS 161 expands the disclosure requirements of Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities, or SFAS 133, to require qualitative disclosures about the objectives and strategies for using derivatives, quantitative disclosures about the fair value of gains and losses on derivative instruments and disclosures on credit-risk-related contingent features in derivative contracts.

Derivative Financial Instruments

We primarily use long-term, fixed-rate and self-amortizing non-recourse debt to avoid, among other things, risk related to fluctuating interest rates. For our variable rate debt, we are sometimes required by our lenders to limit our exposure to interest rate fluctuations by entering into interest rate swap or cap agreements. The interest rate swap agreements moderate our exposure to interest rate risk by effectively converting the interest on variable rate debt to a fixed rate over the term of the related debt. The interest rate cap agreements effectively limit our exposure to interest rate risk by providing a ceiling on the underlying variable interest rate.

At March 31, 2009 and December 31, 2008, we had interest rate swaps with an aggregate notional amount of $52.3 million, and recorded fair values of $2.7 million and $2.5 million, respectively, reflected in accrued liabilities and other in our condensed consolidated balance sheets. In accordance with FASB Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities, or SFAS 133, we have designated these interest rate swaps as cash flow hedges and recognize any changes in their fair value as an adjustment of accumulated other comprehensive income within equity to the extent of their effectiveness. During the three months ended March 31, 2009 and 2008, no significant ineffectiveness was recognized related to these swaps. If the forward rates at March 31, 2009 remain constant, we estimate that during the next twelve months, we would reclassify into earnings approximately $1.3 million of the unrealized losses in accumulated other comprehensive income.

From time to time, we enter into total rate of return swaps on various fixed rate secured tax-exempt bonds payable and fixed rate notes payable to convert these borrowings from a fixed rate to a variable rate and provide an efficient financing product to lower our cost of borrowing. In exchange for our receipt of a fixed rate generally equal to the underlying borrowing’s interest rate, the total rate of return swaps require that we pay a variable rate, equivalent to the Securities Industry and Financial Markets Association Municipal Swap Index, or SIFMA, rate for tax-exempt bonds payable and the 30-day LIBOR rate for notes payable, plus a risk spread. These swaps generally have a second or third lien on the property collateralized by the related borrowings and the obligations under certain of these swaps are cross-collateralized with certain of the other swaps with a particular counterparty. The underlying borrowings are generally callable at our option, with no prepayment penalty, with 30 days advance notice, and the swaps generally have a term of less than five years. The total rate of return swaps have a contractually defined termination value generally equal to the difference between the fair value and the counterparty’s purchased value of the underlying borrowings, which may require payment by us or to us for such difference. Accordingly, we believe fluctuations in the fair value of the borrowings from the inception of the hedging relationship generally will be offset by a corresponding fluctuation in the fair value of the total rate of return swaps.

In accordance with SFAS 133, we designate total rate of return swaps as hedges of the risk of overall changes in the fair value of the underlying borrowings. At each reporting period, we estimate the fair value of these borrowings and the total rate of return swaps and recognize any changes therein as an adjustment of interest expense. We evaluate the effectiveness of these fair value hedges at the end of each reporting period and recognize an adjustment of interest expense as a result of any ineffectiveness.

As of March 31, 2009 and December 31, 2008, we had borrowings payable subject to total rate of return swaps with aggregate outstanding principal balances of $419.7 million and $421.7 million, respectively. At March 31, 2009, the weighted average fixed receive rate under the total return swaps was 6.8% and the weighted average variable pay rate was 1.2%, based on the applicable SIFMA and 30-day LIBOR rates effective as of that date. Information related to the fair value of these instruments at March 31, 2009 and December 31, 2008, is discussed further below.

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Fair Value Measurements

We adopted the provisions of FASB Statement of Financial Accounting Standards No. 157, Fair Value Measurements, or SFAS 157, that apply both to recurring and nonrecurring fair value measurements of financial assets and liabilities effective January 1, 2008, and the provisions that apply to fair value measurements of non-financial assets and liabilities effective January 1, 2009, and at those times determined no transition adjustments were required.

The table below presents (in thousands) the amounts at December 31, 2008 and March 31, 2009 (and the changes in fair value between such dates) for significant items measured in our consolidated balance sheets at fair value, as defined in Statement of Financial Accounting Standards No. 157, Fair Value Measurements, or SFAS 157. All of the fair value measurements are based on significant unobservable inputs classified within Level 3 of the SFAS 157 valuation hierarchy. When a determination is made to classify a fair value measurement within Level 3 of the valuation hierarchy, the determination is based upon the significance of the unobservable factors to the overall fair value measurement. However, such fair value measurements typically include, in addition to the unobservable or Level 3 inputs, observable inputs that can be validated to observable external sources; accordingly, the changes in fair value in the table below are due in part to observable factors that are part of the valuation methodology.

				Unrealized			Realized gains
	Fair value at			gains (losses)			(losses)		Fair value at
	December 31,			included in			included in		March 31,
	2008			earnings (1)			earnings (2)		2009
Total rate of return swaps (3)	$	(29,495	)	$	783	(4)	$	––	$	(28,712	)
Changes in fair value of debt instruments subject to total rate of return swaps (5)		29,495			(783	)(4)		––		28,712
Total	$	—		$	—		$	—	$	—

(1)	Unrealized gains (losses) relate to periodic revaluations of fair value and have not resulted from the settlement of a swap position.
(2)	For total rate of return swaps, realized gains (losses) occur upon the settlement, resulting from the repayment of the underlying borrowings or the early termination of the swap, and include any net amounts paid or received upon such settlement.
(3)	Total rate of return swaps have contractually-defined termination values generally equal to the difference between the fair value and the counterparty’s purchased value of the underlying borrowings. We calculate the termination value, which we believe is representative of the fair value, of total rate of return swaps using a market approach by reference to estimates of the fair value of the underlying borrowings, which are discussed below, and an evaluation of potential changes in the credit quality of the counterparties to these arrangements.
(4)	Included in interest expense in the accompanying condensed consolidated statements of income.
(5)	We estimate the fair value of debt instruments using an income and market approach, including comparison of the contractual terms to observable and unobservable inputs such as market interest rate risk spreads, collateral quality and loan-to-value ratios on similarly encumbered assets within our portfolio. These borrowings are collateralized and non-recourse to us; therefore, we believe changes in our credit rating will not materially affect a market participant’s estimate of the borrowings’ fair value.

In addition to the amounts in the table above, during the three months ended March 31, 2009, we recognized $1.8 million of provisions for operating real estate impairment losses to reduce the carrying amounts of certain real estate properties to their estimated fair value. We estimate the fair value of real estate using income and market valuation techniques using information such as broker estimates, purchase prices for recent transactions on comparable assets and net operating income capitalization analyses using observable and unobservable inputs such as capitalization rates, asset quality grading, geographic location analysis, and local supply and demand observations.

Use of Estimates

The preparation of our condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts included in the financial statements and accompanying notes thereto. Actual results could differ from those estimates.

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Income Taxes

In March 2008, we were notified by the Internal Revenue Service that it intended to examine the 2006 Federal tax return for the Aimco Operating Partnership. During June 2008, the IRS issued AIMCO-GP, Inc., the general partner and tax matters partner of the Aimco Operating Partnership, a summary report including the government’s proposed adjustments to the Aimco Operating Partnership’s 2006 Federal tax return. We do not expect the proposed adjustments to have any material effect on our unrecognized tax benefits, financial condition or results of operations.

NOTE 3 — Real Estate Dispositions

Real Estate Dispositions (Discontinued Operations)

We are currently marketing for sale certain real estate properties that are inconsistent with our long-term investment strategy. At the end of each reporting period, we evaluate whether such properties meet the criteria to be classified as held for sale, including whether such properties are expected to be sold within 12 months. Additionally, certain properties that do not meet all of the criteria to be classified as held for sale at the balance sheet date may nevertheless be sold and included in discontinued operations in the subsequent 12 months; thus, the number of properties that may be sold during the subsequent 12 months could exceed the number classified as held for sale. At March 31, 2009 and December 31, 2008, we had two and 12 properties, with an aggregate of 340 and 2,332 units, respectively, classified as held for sale. Amounts classified as held for sale in the accompanying condensed consolidated balance sheets are as follows (in thousands):

	March 31,		December 31,
	2009		2008
Real estate, net	$	16,884	$	92,023
Other assets		374		2,134
Assets held for sale	$	17,258	$	94,157
Property debt	$	5,023	$	65,285
Other liabilities		153		5,314
Liabilities related to assets held for sale	$	5,176	$	70,599

During the three months ended March 31, 2009, we sold 10 properties with an aggregate of 1,992 units and during the year ended December 31, 2008, we sold 151 consolidated properties with an aggregate of 37,202 units. For the three months ended March 31, 2009 and 2008, discontinued operations includes the results of operations for the periods prior to the date of sale for all properties sold or classified as held for sale as of March 31, 2009.

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The following is a summary of the components of income from discontinued operations and the related amounts of income from discontinued operations attributable to Aimco and to noncontrolling interests for the three months ended March 31, 2009 and 2008 (in thousands):

	Three Months Ended
	March 31,
	2009			2008
Rental and other property revenues	$	1,840		$	91,724
Property operating expenses		(3,998	)		(46,126	)
Depreciation and amortization		(379	)		(24,930	)
Other expenses, net		(1,096	)		(644	)
Operating (loss) income		(3,633	)		20,024
Interest income		19			526
Interest expense		(1,230	)		(16,863	)
(Loss) income before gain on dispositions of real estate, impairment recoveries and income tax		(4,844	)		3,687
Gain on dispositions of real estate		4,550			4,239
Real estate impairment recoveries, net		4,613			—
Income tax (expense) benefit		(631	)		233
Income from discontinued operations	$	3,688		$	8,159
Income from discontinued operations attributable to:
Noncontrolling interests in consolidated real estate partnerships	$	(3,662	)	$	(3,635	)
Common noncontrolling interests in Aimco Operating Partnership		(278	)		(449	)
Total noncontrolling interests		(3,940	)		(4,084	)
Aimco	$	(252	)	$	4,075

Gain on dispositions of real estate is reported net of incremental direct costs incurred in connection with the transaction, including any prepayment penalties incurred upon repayment of mortgage loans collateralized by the property being sold. Such prepayment penalties totaled $0.1 million and $1.3 million for the three months ended March 31, 2009 and 2008, respectively. We classify interest expense related to property debt within discontinued operations when the related real estate asset is sold or classified as held for sale.

Gain (Loss) on Dispositions of Unconsolidated Real Estate and Other

During the three months ended March 31, 2009, we received additional proceeds related to our disposition during 2008 of an interest in an unconsolidated real estate partnership and recognized an additional gain on such disposition of $8.6 million during the three months ended March 31, 2009.

NOTE 4 — Other Significant Transactions

Restructuring Costs

In connection with 2008 property sales and an expected reduction in redevelopment and transactional activities, during the three months ended December 31, 2008, we initiated an organizational restructuring program that included reductions in workforce and related costs, reductions in leased corporate facilities and abandonment of certain redevelopment projects and business pursuits. This restructuring effort resulted in a restructuring charge of $22.8 million, which consisted primarily of: severance costs of $12.9 million; unrecoverable lease obligations of $6.4 million related to space that we will no longer use; and the write-off of deferred transaction costs totaling $3.5 million associated with certain acquisitions and redevelopment opportunities that we will no longer pursue. During the three months ended March 31, 2009, we completed the workforce reductions. In connection with the completion of the workforce reductions, we reversed approximately $1.7 million of accrued severance costs which were less than originally estimated. The only remaining obligation associated with the 2008 restructuring activity relates to a $5.8 million accrual related to unrecoverable lease obligations, which will be paid over the remaining lives of the affected leases.

During the three months ended March 31, 2009, we abandoned additional leased corporate facilities and redevelopment projects, which resulted in an additional restructuring charge of approximately $1.7 million. The net effect of the severance related reversal and the additional 2009 abandonments had an insignificant effect on earnings for the three months ended March 31, 2009, and is included in other expense, net in our consolidated statement of income. The amounts related to our restructuring charges have not been allocated to our reportable segments based on the methods used to evaluate segment performance.

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Common Stock Repurchases

Our Board of Directors has, from time to time, authorized us to repurchase shares of our outstanding capital stock. During the three months ended March 31, 2009, we did not repurchase any shares of Common Stock. During the three months ended March 31, 2008, we repurchased 7,127,641 shares of Common Stock for cash totaling $170.6 million. We also paid cash totaling $28.7 million in January 2008 to settle repurchases of Common Stock in December 2007. As of March 31, 2009, we were authorized to repurchase approximately 19.3 million additional shares.

NOTE 5 — Commitments and Contingencies

Commitments

In connection with our redevelopment and capital improvement activities, we have commitments of approximately $53.2 million related to construction projects, most of which we expect to incur during the remainder of 2009. Additionally, we enter into certain commitments for future purchases of goods and services in connection with the operations of our properties. Those commitments generally have terms of one year or less and reflect expenditure levels comparable to our historical expenditures.

We have committed to fund an additional $5.4 million in second mortgage loans on certain properties in West Harlem in New York City. In certain circumstances, we also could be required to acquire the properties for cash and/or assumption of first mortgage debt totaling approximately $149.0 million to $216.0 million, in addition to amounts funded and committed under the related loan agreement.

We have a $30.0 million obligation under a sale-leaseback arrangement which we account for as a financing in our consolidated balance sheets. Under the terms of the sale-leaseback arrangement, the other party to this arrangement has the right to require us to purchase its interests in the partnership that owns the properties under lease, thus effectively requiring us to repay the obligation. Such put option runs from November 2006 to December 3, 2011.

Tax Credit Arrangements

We are required to manage certain consolidated real estate partnerships in compliance with various laws, regulations and contractual provisions that apply to our historic and low-income housing tax credit syndication arrangements. In some instances, noncompliance with applicable requirements could result in projected tax benefits not being realized and require a refund or reduction of investor capital contributions, which are reported as deferred income in our consolidated balance sheet, until such time as our obligation to deliver tax benefits is relieved. The remaining compliance periods for our tax credit syndication arrangements range from less than one year to 15 years. We do not anticipate that any material refunds or reductions of investor capital contributions will be required in connection with these arrangements.

Legal Matters

In addition to the matters described below, we are a party to various legal actions and administrative proceedings arising in the ordinary course of business, some of which are covered by our general liability insurance program, and none of which we expect to have a material adverse effect on our consolidated financial condition, results of operations or cash flows.

Limited Partnerships

In connection with our acquisitions of interests in real estate partnerships, we are sometimes subject to legal actions, including allegations that such activities may involve breaches of fiduciary duties to the partners of such real estate partnerships or violations of the relevant partnership agreements. We may incur costs in connection with the defense or settlement of such litigation. We believe that we comply with our fiduciary obligations and relevant partnership agreements. Although the outcome of any litigation is uncertain, we do not expect any such legal actions to have a material adverse effect on our consolidated financial condition, results of operations or cash flows.

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Environmental

Various Federal, state and local laws subject property owners or operators to liability for management, and the costs of removal or remediation, of certain hazardous substances present on a property, including lead-based paint. Such laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release or presence of the hazardous substances. The presence of, or the failure to manage or remedy properly, hazardous substances may adversely affect occupancy at affected apartment communities and the ability to sell or finance affected properties. In addition to the costs associated with investigation and remediation actions brought by government agencies, and potential fines or penalties imposed by such agencies in connection therewith, the presence of hazardous substances on a property could result in claims by private plaintiffs for personal injury, disease, disability or other infirmities. Various laws also impose liability for the cost of removal, remediation or disposal of hazardous substances through a licensed disposal or treatment facility. Anyone who arranges for the disposal or treatment of hazardous 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 facility. In connection with the ownership, operation and management of properties, we could potentially be liable for environmental liabilities or costs associated with our properties or properties we acquire or manage in the future.

We have determined that our legal obligations to remove or remediate hazardous substances may be conditional asset retirement obligations, as defined in FASB Interpretation No. 47, Conditional Asset Retirement Obligations. Except in limited circumstances where the asset retirement activities are expected to be performed in connection with a planned construction project or property casualty, we believe that the fair value of our asset retirement obligations cannot be reasonably estimated due to significant uncertainties in the timing and manner of settlement of those obligations. Asset retirement obligations that are reasonably estimable as of March 31, 2009, are immaterial to our consolidated financial condition, results of operations and cash flows.

Mold

We have been named as a defendant in lawsuits that have alleged personal injury and property damage as a result of the presence of mold. In addition, we are aware of lawsuits against owners and managers of multifamily properties asserting claims of personal injury and property damage caused by the presence of mold, some of which have resulted in substantial monetary judgments or settlements. We have only limited insurance coverage for property damage loss claims arising from the presence of mold and for personal injury claims related to mold exposure. We have implemented policies, procedures, third-party audits and training, and include a detailed moisture intrusion and mold assessment during acquisition due diligence. We believe these measures will prevent or eliminate mold exposure from our properties and will minimize the effects that mold may have on our residents. To date, we have not incurred any material costs or liabilities relating to claims of mold exposure or to abate mold conditions. Because the law regarding mold is unsettled and subject to change, we can make no assurance that liabilities resulting from the presence of or exposure to mold will not have a material adverse effect on our consolidated financial condition, results of operations or cash flows.

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NOTE 6 — Earnings per Share

We calculate earnings per share based on the weighted average number of shares of Common Stock, common stock equivalents and dilutive convertible securities outstanding during the period. The following table illustrates the calculation of basic and diluted earnings per share for the three months ended March 31, 2009 and 2008 (in thousands, except per share data):

	Three Months Ended
	March 31,
	2009			2008
Numerator:
Loss from continuing operations	$	(36,257	)	$	(33,290	)
Add: loss from continuing operations attributable to noncontrolling interests		11,979			4,567
Less: net income attributable to preferred stockholders		(13,166	)		(14,208	)
Numerator for basic and diluted earnings per share:
Loss from continuing operations attributable to Aimco (net of income attributable to preferred stockholders)	$	(37,444	)	$	(42,931	)
Income from discontinued operations	$	3,688		$	8,159
Less: income from discontinued operations attributable to noncontrolling interests		(3,940	)		(4,084	)
(Loss) income from discontinued operations attributable to Aimco	$	(252	)	$	4,075
Net loss	$	(32,569	)	$	(25,131	)
Add: net loss attributable to noncontrolling interests		8,039			483
Less: net income attributable to preferred stockholders		(13,166	)		(14,208	)
Numerator for basic and diluted earnings per share:
Net loss attributable to Aimco common stockholders	$	(37,696	)	$	(38,856	)
Denominator:
Denominator for basic earnings per share — weighted average number of shares of Common Stock outstanding		115,099			127,961
Effect of dilutive securities:
Dilutive potential common shares		—			—
Denominator for diluted earnings per share		115,099			127,961
Earnings (loss) per common share:
Basic and diluted earnings (loss) per common share:
Loss from continuing operations attributable to Aimco (net of income attributable to preferred stockholders)	$	(0.33	)	$	(0.34	)
Income from discontinued operations attributable to Aimco		—			0.04
Net loss attributable to Aimco common stockholders	$	(0.33	)	$	(0.30	)

As of March 31, 2009 and 2008, the participating securities and common share equivalents that could potentially dilute basic earnings per share in future periods totaled 12.0 million and 12.4 million, respectively. These securities, including restricted stock awards, officer loan shares and stock options, have been excluded from the earnings per share computations for the three months ended March 31, 2009 and 2008, because their effect would have been anti-dilutive.

Various classes of preferred OP Units of the Aimco Operating Partnership are outstanding. Depending on the terms of each class, these preferred OP Units are convertible into common OP Units or redeemable for cash or, at our option, Common Stock, and are paid distributions varying from 5.9% to 9.6% per annum per unit, or equal to the dividends paid on Common Stock based on the conversion terms. As of March 31, 2009, a total of 3.2 million preferred OP Units were outstanding with redemption values of $86.4 million and were redeemable for approximately 15.8 million shares of Common Stock or cash at our option.

NOTE 7 — Recent Accounting Developments

In April 2009, the FASB issued FSP FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments, or the FSP. The FSP expands the fair value disclosure requirements of Financial Accounting Standards No. 107, Disclosures about Fair Value of Financial Instruments, to include interim periods, and amends APB Opinion No. 28, Interim Financial Reporting, to require these disclosures in summarized financial information in interim reporting periods. The FSP is effective for interim periods ending after June 15, 2009, with early adoption permitted under certain circumstances. We do not anticipate the FSP will have a material effect on our financial statements.

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 NOTE 8 — Business Segments

Statement of Financial Accounting Standards No. 131, Disclosures about Segments of an Enterprise and Related Information, or SFAS 131, requires that segment disclosures present the measure(s) used by the chief operating decision maker for purposes of assessing such segments’ performance. Several members of our executive management team comprise our chief operating decision maker, as defined by SFAS 131, and use various generally accepted industry financial measures to assess the performance of the business, including: Net Asset Value, or NAV, which is the estimated fair value of our assets, net of debt; Funds From Operations, or FFO; Adjusted Funds From Operations, or AFFO, which is FFO less spending for Capital Replacements; same store property operating results; net operating income; net operating income less spending for capital replacements, or Free Cash Flow; changes in NAV plus cash dividends, or Economic Income; financial coverage ratios; and leverage as shown on our balance sheet. The chief operating decision maker emphasizes net operating income as a key measurement of segment profit or loss. Segment net operating income is generally defined as segment revenues less direct segment operating expenses.

We have two reportable segments: real estate and investment management.

Real Estate Segment

Our real estate segment owns and operates properties that generate rental and other property-related income through the leasing of apartment units to a diverse base of residents. Our real estate segment’s net operating income also includes income from property management services performed for unconsolidated partnerships and unrelated parties.

Investment Management Segment

Our investment management segment includes portfolio strategy, capital allocation, joint ventures, tax credit syndication, acquisitions, dispositions and other transaction activities. Within our owned portfolio, we refer to these activities as “Portfolio Management,” and their benefit is seen in property operating results and in investment gains. For affiliated partnerships, we refer to these activities as “Asset Management,” for which we are separately compensated through fees paid by third party investors. The expenses of this segment consist primarily of the costs of departments that perform these activities. These activities are conducted in part by our taxable subsidiaries, and the related net operating income may be subject to income taxes. Our investment management segment’s operating results also include gains on dispositions of non-depreciable assets, accretion of loan discounts resulting from transactional activities and certain other income in arriving at income (loss) from continuing operations for the segment.

The following tables present the revenues, net operating income (loss) and income (loss) from continuing operations of our real estate and investment management segments for the three months ended March 31, 2009 and 2008 (in thousands):

					Corporate
					Not Allocated
			Investment		to Segments
	Real Estate		Management		and Certain
	Segment		Segment		Eliminations			Total
Three Months Ended March 31, 2009:
Rental and other property revenues	$	338,093	$	—	$	—		$	338,093
Property management revenues, primarily from affiliates		1,644		—		—			1,644
Asset management and tax credit revenues		—		9,938		(399	)		9,539
Total revenues		339,737		9,938		(399	)		349,276
Property operating expenses		156,489		—		—			156,489
Property management expenses		1,433		—		—			1,433
Investment management expenses		—		3,789		—			3,789
Depreciation and amortization (1)		—		—		123,215			123,215
General and administrative expenses		—		—		20,072			20,072
Other expenses, net		—		—		2,292			2,292
Total operating expenses		157,922		3,789		145,579			307,290
Net operating income (loss)		181,815		6,149		(145,978	)		41,986
Other items included in continuing operations (2)		—		796		(79,039	)		(78,243	)
Income (loss) from continuing operations	$	181,815	$	6,945	$	(225,017	)	$	(36,257	)

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					Corporate
					Not Allocated
			Investment		to Segments
	Real Estate		Management		and Certain
	Segment		Segment		Eliminations			Total
Three Months Ended March 31, 2008:
Rental and other property revenues	$	332,892	$	—	$	—		$	332,892
Property management revenues, primarily from affiliates		2,104		—		—			2,104
Asset management and tax credit revenues		—		12,852		—			12,852
Total revenues		334,996		12,852		—			347,848
Property operating expenses		161,764		—		—			161,764
Property management expenses		1,335		—		—			1,335
Investment management expenses		—		4,387		—			4,387
Depreciation and amortization (1)		—		—		103,500			103,500
General and administrative expenses		—		—		21,366			21,366
Other expenses, net		—		—		5,751			5,751
Total operating expenses		163,099		4,387		130,617			298,103
Net operating income (loss)		171,897		8,465		(130,617	)		49,745
Other items included in continuing operations (2)		—		522		(83,557	)		(83,035	)
Income (loss) from continuing operations	$	171,897	$	8,987	$	(214,174	)	$	(33,290	)

(1)

Our chief operating decision maker assesses the performance of real estate using, among other measures, net operating income, excluding depreciation and amortization. Accordingly, we do not allocate depreciation and amortization to the real estate segment.

(2)

Other items in continuing operations for the investment management segment include accretion income recognized on discounted notes receivable, other income items and income taxes associated with transactional activities. Other items in continuing operations not allocated to segments include: (i) interest income and expense; (ii) provision for losses on notes receivable and provision for operating real estate impairment losses; (iii) equity in losses of unconsolidated real estate partnerships; and (iv) gain (loss) on dispositions of unconsolidated real estate and other.

NOTE 9 — Subsequent Events

On May 1, 2009, we entered into a Sixth Amendment to our Amended and Restated Senior Secured Credit Agreement with a syndicate of financial institutions, which we refer to as the Credit Agreement. The Sixth Amendment provides for a reduction in the aggregate amount of commitments and loans under the Credit Agreement from $985.0 million, comprised of a $350.0 million term loan and $635.0 million of revolving loan commitments to $530.0 million, comprised of a $350.0 million term loan and $180.0 million of revolving loan commitments. Pursuant to the Sixth Amendment, our revolving credit facility matures May 1, 2011, and may be extended for an additional year, subject to certain conditions, including payment of a 45.0 basis point fee on the total revolving commitments and repayment of the entire $350.0 million term loan by February 1, 2011.

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

Forward Looking Statements

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 and redevelopments, our future financial performance, including our ability to maintain current or meet projected occupancy, rent levels and same store results, and the effect of government regulations. Actual results may differ materially from those described in these forward-looking statements and, in addition, will be affected by a variety of risks and factors, some of which are beyond our control, including, without limitation: financing risks, including the availability and cost of financing and the risk that our cash flows from operations may be insufficient to meet required payments of principal and interest; earnings may not be sufficient to maintain compliance with debt covenants; national and local economic conditions; energy costs; the terms of governmental regulations that affect us and interpretations of those regulations; the competitive environment in which we operate; real estate risks, including fluctuations in real estate values and the general economic climate in the markets in which we operate and competition for tenants in such markets; insurance risk; acquisition and development risks, including failure of such acquisitions to perform in accordance with projections; the timing of acquisitions and dispositions; natural disasters and severe weather such as hurricanes; litigation, including costs associated with prosecuting or defending claims and any adverse outcomes; and possible environmental liabilities, including costs, fines or penalties that may be incurred due to necessary remediation of contamination of properties presently owned or previously owned by us. In addition, our 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 our ability to meet the various requirements imposed by the Internal Revenue Code, through actual operating results, distribution levels and diversity of stock ownership. Readers should carefully review our financial statements and the notes thereto, as well as the section entitled “Risk Factors” described in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2008, and the other documents we file from time to time with the Securities and Exchange Commission. As used herein and except as the context otherwise requires, “we,” “our,” “us” and the “Company” refer to Apartment Investment and Management Company (which we refer to as Aimco), AIMCO Properties, L.P. (which we refer to as the Aimco Operating Partnership) and Aimco’s consolidated corporate subsidiaries and consolidated real estate partnerships, collectively.

Executive Overview

We are a self-administered and self-managed real estate investment trust, or REIT, engaged in the acquisition, ownership, management and redevelopment of apartment properties. Our property operations are characterized by diversification of product, location and price point. As of March 31, 2009, we owned or managed 976 apartment properties containing 160,118 units located in 44 states, the District of Columbia and Puerto Rico. Our primary sources of income and cash are rents associated with apartment leases.

The key financial indicators that we use in managing our business and in evaluating our financial condition and operating performance are: Net Asset Value, or NAV, which is the estimated fair value of our assets, net of debt; Funds From Operations, or FFO; Adjusted Funds From Operations, or AFFO, which is FFO less spending for Capital Replacements; same store property operating results; net operating income; net operating income less spending for Capital Replacements, or Free Cash Flow; changes in NAV plus cash dividends, or Economic Income; financial coverage ratios; and leverage as shown on our balance sheet. FFO and Capital Replacements are defined and further described in the sections captioned “Funds From Operations” and “Capital Expenditures” below. The key macro-economic factors and non-financial indicators that affect our financial condition and operating performance are: rates of job growth; single-family and multifamily housing starts; interest rates; and availability and cost of financing.

Because our operating results depend primarily on income from our properties, the supply and demand for apartments influences our operating results. Additionally, the level of expenses required to operate and maintain our properties, the pace and price at which we redevelop, acquire and dispose of our apartment properties, and the volume and timing of fee transactions affect our operating results. Our cost of capital is affected by the conditions in the capital and credit markets and the terms that we negotiate for our equity and debt financings.

For the remainder of 2009, we are focused on: property operations; upgrading the quality of our portfolio through portfolio management; and strengthening our balance sheet.

Given the challenging market conditions, we remain focused on retaining our existing residents and maintaining tight expense control.

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Our portfolio management strategy includes property dispositions and acquisitions aimed at concentrating our portfolio in our target markets, which are the largest 20 U.S. markets as measured by the total market value of institutional-grade apartment properties in a particular market (total market capitalization). We continue to increase our allocation of capital to well located properties within our target markets and are currently marketing for sale approximately $2.0 billion of conventional and affordable assets located primarily outside these target markets.

We also continue to focus on maintaining a sound balance sheet with balanced sources and uses of cash, ample liquidity and coverage ratios adequate to satisfy bank debt covenants. We are financed primarily with long-term, non-recourse property debt, which represented 84% of our leverage at March 31, 2009, with a weighted average maturity of 9.6 years. Approximately 11% of our leverage at March 31, 2009, is perpetual preferred equity. In order to limit refunding risk, during 2009 we intend to refinance 26 property loans totaling $434.2 million that mature during the balance of 2009 through 2011. The remaining balance of property debt maturities through 2011 totals $99.9 million and is related to four loans, all of which mature in 2011. In addition, net cash proceeds from asset sales are expected to be used first to reduce our $350.0 million bank term debt that matures in the first quarter 2011 and to increase cash reserves.

We expect the financial and economic conditions for the remainder of 2009 to continue to be very difficult and we will continue to evaluate our activities and organizational structure, and intend to adjust as necessary.

The following discussion and analysis of the results of our operations and financial condition should be read in conjunction with the accompanying condensed consolidated financial statements in Item 1.

Results of Operations

Overview

Three months ended March 31, 2009 compared to March 31, 2008

We reported net loss attributable to Aimco of $24.5 million and net loss attributable to Aimco common stockholders of $37.7 million for the three months ended March 31, 2009, compared to net loss attributable to Aimco of $24.6 million and net loss attributable to Aimco common stockholders of $38.9 million for the three months ended March 31, 2008, decreases of $0.1 million and $1.2 million, respectively. These decreases were principally due to the following items, all of which are discussed in further detail below:

• an increase in gain on dispositions of unconsolidated real estate and other, primarily related to additional proceeds received in 2009 related to our disposition during 2008 of an interest in an unconsolidated real estate partnership;

• a favorable change in the effect on our earnings of noncontrolling interests in consolidated real estate partnerships; and

• an increase in net operating income associated with property operations, primarily related to completed redevelopments and a decrease in casualty losses relative to 2008.

The effects of these items on our operating results were substantially offset by:

• a decrease in income from discontinued operations, primarily related to the volume of sales in 2008 and the related number of properties included in discontinued operations in 2008 relative to 2009;

• an increase in depreciation and amortization expense, primarily related to completed redevelopments and capital expenditures; and

• a decrease in interest income, primarily related to lower cash balances and interest rates.

The following paragraphs discuss these and other items affecting the results of our operations in more detail.

Business Segment Operating Results

We have two reportable segments: real estate (owning, operating and redeveloping apartments) and investment management (portfolio strategy, capital allocation, joint ventures, tax credit syndication, acquisitions, dispositions and other transaction activities). Several members of our executive management team comprise our chief operating decision maker, as defined in FASB Statement of Financial Accounting Standards No. 131, Disclosures About Segments of an Enterprise and Related Information, and use various generally accepted industry financial measures to assess the performance and financial condition of the business, including: NAV; FFO; AFFO; same store property operating results; net operating income; Free Cash Flow; Economic Income; financial coverage ratios; and leverage as shown on our balance sheet. Our chief operating decision maker emphasizes net operating income as a key measurement of segment profit or loss. Segment net operating income is generally defined as segment revenues less direct segment operating expenses.

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Real Estate Segment

Our real estate segment involves the ownership and operation of properties that generate rental and other property-related income through the leasing of apartment units. Our real estate segment’s net operating income also includes income from property management services performed for unconsolidated partnerships and unrelated parties.

The following table summarizes our real estate segment’s net operating income for the three months ended March 31, 2009 and 2008 (in thousands):

	Three Months Ended March 31,
	2009		2008
Real estate segment revenues:
Rental and other property revenues	$	338,093	$	332,892
Property management revenues, primarily from affiliates		1,644		2,104
		339,737		334,996
Real estate segment expenses:
Property operating expenses		156,489		161,764
Property management expenses		1,433		1,335
		157,922		163,099
Real estate segment net operating income	$	181,815	$	171,897

Consolidated Conventional Same Store Property Operating Results

Same store operating results is a key indicator we use to assess the performance of our property operations and to understand the period over period operations of a consistent portfolio of properties. We define “consolidated same store” properties as our conventional properties (i) that we manage, (ii) in which our ownership interest exceeds 10%, (iii) the operations of which have been stabilized, and (iv) that have not been sold or classified as held for sale, in each case, throughout all periods presented. The following tables summarize the operations of our consolidated conventional rental property operations:

	Three Months Ended March 31,
	2009			2008			Change
Consolidated same store revenues	$	212,093		$	213,761			-0.8	%
Consolidated same store expenses		83,890			85,556			-1.9	%
Same store net operating income		128,203			128,205			—
Reconciling items (1)		53,612			43,692			22.7	%
Real estate segment net operating income	$	181,815		$	171,897			5.8	%
Same store operating statistics:
Properties		225			225			—
Apartment units		71,198			71,198			—
Average physical occupancy		93.6	%		94.9	%		-1.4	%
Average rent/unit/month	$	968		$	967			0.1	%

(1) Reflects property revenues and property operating expenses related to consolidated properties other than same store properties (e.g., affordable, acquisition, redevelopment and newly consolidated properties) and casualty gains and losses.

For the three months ended March 31, 2009, compared to the three months ended March 31, 2008, consolidated same store net operating income was comparable. Revenues decreased $1.7 million, or 0.8%, primarily due to a decrease in average physical occupancy partially offset by higher utility billings. Expenses decreased by $1.7 million, or 1.9%, primarily due to decreases of $1.2 million in marketing expense, $0.6 million in employee compensation and related expenses and $0.5 million in contract services expense, partially offset by an increase of $0.8 million in property tax expense.

For the three months ended March 31, 2009, compared to the three months ended March 31, 2008, consolidated real estate segment net operating income related to consolidated properties other than same store properties increased by $9.9 million, or 22.7%. This increase was primarily attributable to higher net operating income of $3.5 million for redevelopment properties based on more units in service at these properties in 2009, and a $3.6 million decrease in casualty losses relative to 2008. The remainder of the increase in net operating income was attributed to properties acquired subsequent to March 31, 2008 and affordable properties.

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Investment Management Segment

Our investment management segment includes activities and services related to our owned portfolio of properties as well as services provided to affiliated partnerships. Activities and services that fall within investment management include portfolio strategy, capital allocation, joint ventures, tax credit syndication, acquisitions, dispositions and other transaction activities. Within our owned portfolio, we refer to these activities as “Portfolio Management,” and their benefit is seen in property operating results and in investment gains. For affiliated partnerships, we refer to these activities as “Asset Management,” for which we are separately compensated through fees paid by third party investors. The expenses of this segment consist primarily of the costs of departments that perform these activities. These activities are conducted in part by our taxable subsidiaries, and the related net operating income may be subject to income taxes.

Transactions occur on varying timetables; thus, the income varies from period to period. We have affiliated real estate partnerships for which we have identified a pipeline of transactional opportunities. As a result, we view asset management fees as a predictable part of our core business strategy. Asset management revenue includes certain fees that were earned in a prior period, but not recognized at that time because collectibility was not reasonably assured. Those fees may be recognized in a subsequent period upon occurrence of a transaction or a high level of the probability of occurrence of a transaction within twelve months, or improvement in operations that generates sufficient cash to pay the fees.

The following table summarizes the net operating income from our investment management segment for the three months ended March 31, 2009 and 2008 (in thousands):

	Three Months Ended March 31,
	2009		2008
Asset management and tax credit revenues	$	9,539	$	12,852
Investment management expenses		3,789		4,387
Investment segment net operating income (1)	$	5,750	$	8,465

(1) Excludes certain items of income and expense, which are included in our consolidated statements of income in: other expenses, net; interest expense; interest income; gain (loss) on dispositions of unconsolidated real estate and other; and noncontrolling interests in consolidated real estate partnerships.

For the three months ended March 31, 2009, compared to the three months ended March 31, 2008, net operating income from investment management decreased $2.7 million, or 32.1%. This decrease is primarily attributable to a $4.2 million decrease in promote income, which is income earned in connection with the disposition of properties owned by our consolidated joint ventures, partially offset by a $1.2 million increase in revenues associated with our affordable housing tax credit syndication business, including syndication fees and other revenue earned in connection with these arrangements, and a $0.6 million decrease in investment management expenses.

Other Operating Expenses (Income)

Depreciation and Amortization

For the three months ended March 31, 2009, compared to the three months ended March 31, 2008, depreciation and amortization increased $19.7 million, or 19.0%. This increase primarily relates to depreciation for properties acquired subsequent to March 31, 2008, completed redevelopments and other capital projects recently placed in service.

General and Administrative Expenses

For the three months ended March 31, 2009, compared to the three months ended March 31, 2008, general and administrative expenses decreased $1.3 million, or 6.1%. This decrease is primarily attributable to reductions of $0.9 million in personnel and related expenses, attributed partially to our organizational restructuring initiated during the fourth quarter 2008 (see Note 4 of the condensed consolidated financial statements in Item 1 for additional information).

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Other Expenses, Net

Other expenses, net includes franchise taxes, risk management activities, partnership administration expenses and certain non-recurring items.

For the three months ended March 31, 2009, compared to the three months ended March 31, 2008, other expenses, net decreased by $3.5 million. The net decrease is primarily attributed to a $4.5 million reduction in expenses of our self insurance activities, related to a decrease in casualty losses on less than wholly owned properties from 2008 to 2009.

Interest Income

Interest income consists primarily of interest on notes receivable from non-affiliates and unconsolidated real estate partnerships, interest on cash and restricted cash accounts, and accretion of discounts on certain notes receivable from unconsolidated real estate partnerships. Transactions that result in accretion occur infrequently and thus accretion income may vary from period to period.

For the three months ended March 31, 2009, compared to the three months ended March 31, 2008, interest income decreased $4.8 million, or 58.8%. The decrease is primarily attributable to a decrease of $3.2 million due to lower interest rates on notes receivable, cash and restricted cash balances and lower average balances, and a $1.5 million reduction in accretion income.

Interest Expense

Interest expense, which includes the amortization of deferred financing costs, was comparable for the three months ended March 31, 2009 and 2008. Interest expense increased by $0.4 million on property loans payable due to higher balances resulting primarily from refinancing activities, offset by lower average interest rates, and by $5.0 million due to decreases in capitalized interest related to redevelopment activities. These increases were substantially offset by a decrease of $5.4 million in corporate interest expense primarily due to lower average interest rates and balances.

Provision for Operating Real Estate Impairment Losses

Real estate and other long-lived assets to be held and used are stated at cost, less accumulated depreciation and amortization, unless the carrying amount of the asset is not recoverable. If events or circumstances indicate that the carrying amount of a property may not be recoverable, we make an assessment of its recoverability by comparing the carrying amount to our estimate of the undiscounted future cash flows, excluding interest charges, of the property. If the carrying amount exceeds the estimated aggregate undiscounted future cash flows, we recognize an impairment loss to the extent the carrying amount exceeds the estimated fair value of the property.

During the three months ended March 31, 2009, we recognized impairment losses of $1.8 million. We recognized no such impairment losses during the three months ended March 31, 2008.

Gain on Dispositions of Unconsolidated Real Estate and Other

Gain on dispositions of unconsolidated real estate and other includes our share of gains related to dispositions of real estate by unconsolidated real estate partnerships, gains on disposition of interests in unconsolidated real estate partnerships, gains on dispositions of land and other non-depreciable assets and costs related to asset disposal activities. Changes in the level of gains recognized from period to period reflect the changing level of disposition activity from period to period. Additionally, gains on properties sold are determined on an individual property basis or in the aggregate for a group of properties that are sold in a single transaction, and are not comparable period to period.

For the three months ended March 31, 2009, compared to the three months ended March 31, 2008, gain on dispositions of unconsolidated real estate and other increased $11.0 million. This increase is primarily attributable to an $8.6 million gain on the disposition of an interest in an unconsolidated real estate partnership. During the three months ended March 31, 2009, we received additional proceeds related to our disposition during 2008 of an interest in an unconsolidated real estate partnership and recognized an additional gain on such disposition during the three months ended March 31, 2009. The increase in gains during 2009 is also attributable to $1.6 million of gains on properties sold by unconsolidated real estate partnerships and a $0.7 million gain on the sale of an undeveloped land parcel during the three months ended March 31, 2009.

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Income Tax Benefit

Certain of our operations, such as property management, asset management and risk management, are conducted through, and certain of our properties are owned by, taxable REIT subsidiaries, each of which we refer to as a TRS. A TRS is a C-corporation that has not elected REIT status and, as such, is subject to United States Federal corporate income tax. We use TRS entities to facilitate our ability to offer certain services and activities to our residents and investment partners, as these services and activities generally cannot be offered directly by the REIT.  We also use TRS entities to hold investments in certain properties. Income taxes related to the results of continuing operations of our TRS entities are included in income tax benefit in our consolidated statements of income.  

For the three months ended March 31, 2009, compared to the three months ended March 31, 2008, income tax benefit increased by $1.2 million.  This increase was primarily attributed to an increase in losses of our TRS entities.  

Income from Discontinued Operations

The results of operations for properties sold during the period or designated as held for sale at the end of the period are generally required to be classified as discontinued operations for all periods presented. The components of net earnings that are classified as discontinued operations include all property-related revenues and operating expenses, depreciation expense recognized prior to the classification as held for sale and property-specific interest expense and debt extinguishment gains and losses to the extent there is secured debt on the property. In addition, any impairment losses on assets held for sale and the net gain or loss on the eventual disposal of properties held for sale are reported in discontinued operations.

For the three months ended March 31, 2009 and 2008, income from discontinued operations totaled $3.7 million and $8.2 million, respectively. The $4.5 million decrease in income from discontinued operations was principally due to a $23.7 million decrease in operating income, offset by a $15.6 million decrease in interest expense, both of which were attributable to fewer properties included in discontinued operations in 2009 relative to 2008. The decrease in discontinued operations is partially offset by $4.6 million of real estate impairment recoveries in 2009.

During the three months ended March 31, 2009, we sold 10 consolidated properties, resulting in a net gain on sale of approximately $4.3 million (which includes $0.2 million of related income taxes). During the three months ended March 31, 2008, we sold four consolidated properties, resulting in a gain on sale of approximately $4.3 million (which includes $0.1 million of related income tax benefit). For the three months ended March 31, 2009 and 2008, income from discontinued operations includes the operating results of the properties sold or classified as held for sale as of March 31, 2009.

Changes in the level of gains recognized from period to period reflect the changing level of our disposition activity from period to period. Additionally, gains on properties sold are determined on an individual property basis or in the aggregate for a group of properties that are sold in a single transaction, and are not comparable period to period (see Note 3 of the condensed consolidated financial statements in Item 1 for additional information on discontinued operations).

Noncontrolling Interests in Consolidated Real Estate Partnerships

Noncontrolling interests in consolidated real estate partnerships reflects noncontrolling partners’ share of operating results of consolidated real estate partnerships. This generally includes the noncontrolling partners’ share of property management fees, interest on notes and other amounts eliminated in consolidation that we charge to such partnerships. As discussed in Note 2 to the condensed consolidated financial statements in Item 1, we adopted SFAS 160 effective January 1, 2009. Prior to our adoption of SFAS 160, we generally did not recognize a benefit for the noncontrolling interest partners’ share of partnership losses for partnerships that have deficits in partners’ equity and we generally recognized a charge to our earnings for distributions paid to noncontrolling partners for partnerships that have deficits in partners’ equity. Under SFAS 160, we are required to attribute losses to noncontrolling interests even if such attribution would result in a deficit in partners’ equity and we are no longer required to recognize a charge to our earnings for distributions paid to noncontrolling partners for partnerships that have deficits in partners’ equity.

For the three months ended March 31, 2009, compared to the three months ended March 31, 2008, the effect on our earnings of income or loss attributable to noncontrolling interests in consolidated real estate partnerships changed favorably by $8.1 million. This favorable change is primarily attributable to $3.9 million of charges to our earnings recognized in 2008 for deficit distributions to noncontrolling interests and $10.2 million of losses attributed to noncontrolling interests in 2009 that we would not have attributed to the noncontrolling interest partners in 2008 because to do so would have resulted in deficits in their noncontrolling interest balances. These favorable changes were partially offset by increases in the noncontrolling interest partners’ share of income of other consolidated real estate partnerships.

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Noncontrolling Interests in Aimco Operating Partnership

Noncontrolling interests in Aimco Operating Partnership consist of common OP Units, High Performance Units and preferred OP Units. We allocate the Aimco Operating Partnership’s income or loss to the holders of common OP Units and High Performance Units based on the weighted average number of common OP Units and High Performance Units outstanding during the period. Holders of the preferred OP Units participate in the Aimco Operating Partnership’s income or loss only to the extent of their preferred distributions.

For the three months ended March 31, 2009, compared to the three months ended March 31, 2008, the effect on our earnings of income or loss attributable to noncontrolling interests in the Aimco Operating Partnership changed unfavorably by $0.6 million. This unfavorable change is primarily attributable to a larger allocation of losses to holders of common OP units and equivalents in 2008 due to a larger average ownership interest in 2008 relative to 2009. This unfavorable change was partially offset by a reduction in income attributable to holders of preferred OP Units in 2009 due to a decrease in preferred distributions.

Critical Accounting Policies and Estimates

We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, or GAAP, which requires us to make estimates and assumptions. We believe that the following critical accounting policies involve our more significant judgments and estimates used in the preparation of our consolidated financial statements.

Impairment of Long-Lived Assets

Real estate and other long-lived assets to be held and used are stated at cost, less accumulated depreciation and amortization, unless the carrying amount of the asset is not recoverable. If events or circumstances indicate that the carrying amount of a property may not be recoverable, we make an assessment of its recoverability by comparing the carrying amount to our estimate of the undiscounted future cash flows, excluding interest charges, of the property. If the carrying amount exceeds the estimated aggregate undiscounted future cash flows, we recognize an impairment loss to the extent the carrying amount exceeds the estimated fair value of the property.

From time to time, we have non-revenue producing properties that we hold for future redevelopment. We assess the recoverability of the carrying amount of these redevelopment properties by comparing our estimate of undiscounted future cash flows based on the expected service potential of the redevelopment property upon completion to the carrying amount. In certain instances, we use a probability-weighted approach to determine our estimate of undiscounted future cash flows when alternative courses of action are under consideration.

Real estate investments are subject to varying degrees of risk. Several factors may adversely affect the economic performance and value of our real estate investments. These factors include:

• the general economic climate;

• competition from other apartment communities and other housing options;

• local conditions, such as loss of jobs or an increase in the supply of apartments, that might adversely affect apartment occupancy or rental rates;

• changes in governmental regulations and the related cost of compliance;

• increases in operating costs (including real estate taxes) due to inflation and other factors, which may not be offset by increased rents;

• changes in tax laws and housing laws, including the enactment of rent control laws or other laws regulating multifamily housing;

• availability and cost of financing;

• changes in market capitalization rates; and

• the relative illiquidity of such investments.

Any adverse changes in these and other factors could cause an impairment of our long-lived assets, including real estate and investments in unconsolidated real estate partnerships. Based on periodic tests of recoverability of long-lived assets, for the three months ended March 31, 2009, we recorded net impairment losses of $1.8 million related to properties to be held and used. We recognized no such impairment losses during the three months ended March 31, 2008.

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Notes Receivable and Interest Income Recognition

Notes receivable from unconsolidated real estate partnerships consist primarily of notes receivable from partnerships in which we are the general partner. Notes receivable from non-affiliates consist of notes receivable from unrelated third parties. The ultimate repayment of these notes is subject to a number of variables, including the performance and value of the underlying real estate and the claims of unaffiliated mortgage lenders. Our notes receivable include loans extended by us that we carry at the face amount plus accrued interest, which we refer to as “par value notes,” and loans extended by predecessors, some of whose positions we generally acquired at a discount, which we refer to as “discounted notes.”

We record interest income on par value notes as earned in accordance with the terms of the related loan agreements. We discontinue the accrual of interest on such notes when the notes are impaired, as discussed below, or when there is otherwise significant uncertainty as to the collection of interest. We record income on such nonaccrual loans using the cost recovery method, under which we apply cash receipts first to the recorded amount of the loan; thereafter, any additional receipts are recognized as income.

We recognize interest income on discounted notes receivable based upon whether the amount and timing of collections are both probable and reasonably estimable. We consider collections to be probable and reasonably estimable when the borrower has closed transactions or has entered into certain pending transactions (which include real estate sales, refinancings, foreclosures and rights offerings) that provide a reliable source of repayment. In such instances, we recognize accretion income, on a prospective basis using the effective interest method over the estimated remaining term of the loans, equal to the difference between the carrying amount of the discounted notes and the estimated collectible value. We record income on all other discounted notes using the cost recovery method. Accretion income recognized in any given period is based on our ability to complete transactions to monetize the notes receivable and the difference between the carrying value and the estimated collectible amount of the notes; therefore, accretion income varies on a period by period basis and could be lower or higher than in prior periods.

Allowance for Losses on Notes Receivable

We assess the collectibility of notes receivable on a periodic basis, which assessment consists primarily of an evaluation of cash flow projections of the borrower to determine whether estimated cash flows are sufficient to repay principal and interest in accordance with the contractual terms of the note. We recognize impairments on notes receivable when it is probable that principal and interest will not be received in accordance with the contractual terms of the loan. The amount of the impairment to be recognized generally is based on the fair value of the partnership’s real estate that represents the primary source of loan repayment. In certain instances where other sources of cash flow are available to repay the loan, the impairment is measured by discounting the estimated cash flows at the loan’s original effective interest rate.

During the three months ended March 31, 2009 and 2008, we recorded provisions for losses on notes receivable of $0.2 million. We will continue to evaluate the collectibility of these notes, and we will adjust related allowances in the future due to changes in market conditions and other factors.

Capitalized Costs

We capitalize costs, including certain indirect costs, incurred in connection with our capital expenditure activities, including redevelopment and construction projects, other tangible property improvements and replacements of existing property components. Included in these capitalized costs are payroll costs associated with time spent by site employees in connection with the planning, execution and control of all capital expenditure activities at the property level. We characterize as “indirect costs” an allocation of certain department costs, including payroll, at the area operations and corporate levels that clearly relate to capital expenditure activities. We capitalize interest, property taxes and insurance during periods in which redevelopment and construction projects are in progress. We charge to expense as incurred costs that do not relate to capital expenditure activities, including ordinary repairs, maintenance, resident turnover costs and general and administrative expenses.

For the three months ended March 31, 2009 and 2008, for continuing and discontinued operations, we capitalized $2.4 million and $7.5 million of interest costs, respectively, and $13.8 million and $19.8 million of site payroll and indirect costs, respectively.

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Funds From Operations

FFO is a non-GAAP financial measure that we believe, when considered with the financial statements determined in accordance with GAAP, is helpful to investors in understanding our performance because it captures features particular to real estate performance by recognizing that real estate generally appreciates over time or maintains residual value to a much greater extent than do other depreciable assets such as machinery, computers or other personal property. The Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT, defines FFO as net income (loss), computed in accordance with GAAP, excluding gains from sales of depreciable property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO on the same basis. We compute FFO for all periods presented in accordance with the guidance set forth by NAREIT’s April 1, 2002, White Paper, which we refer to as the White Paper. We calculate FFO (diluted) by subtracting redemption or repurchase related preferred stock issuance costs and dividends on preferred stock and adding back dividends/distributions on dilutive preferred securities, discounts on preferred stock redemptions or repurchases and interest expense on dilutive mandatorily redeemable convertible preferred securities. FFO should not be considered an alternative to net income or net cash flows from operating activities, as determined in accordance with GAAP, as an indication of our performance or as a measure of liquidity. FFO is not necessarily indicative of cash available to fund future cash needs. In addition, although FFO is a measure used for comparability in assessing the performance of real estate investment trusts, there can be no assurance that our basis for computing FFO is comparable with that of other real estate investment trusts.

For the three months ended March 31, 2009 and 2008, our FFO is calculated as follows (in thousands):

	Three Months Ended
	March 31,
	2009			2008
Net loss attributable to Aimco common stockholders (1)	$	(37,696	)	$	(38,856	)
Adjustments:
Depreciation and amortization		123,215			103,500
Depreciation and amortization related to non-real estate assets		(4,393	)		(3,817	)
Depreciation of rental property related to noncontrolling partners and unconsolidated entities (2)		(12,280	)		(8,697	)
(Gain) loss on dispositions of unconsolidated real estate and other		(10,862	)		137
Loss (gain) on dispositions of non-depreciable assets and other		682			(16	)
Deficit distributions to noncontrolling partners (3)		—			3,931
Discontinued operations:
Loss (gain) on dispositions of real estate, net of noncontrolling partners’ interest (2)		76			(1,436	)
Depreciation of rental property, net of noncontrolling partners’ interest (2)		269			22,154
Recovery of deficit distributions to noncontrolling partners (3)		—			273
Income tax expense (benefit) arising from disposals		215			(86	)
Noncontrolling interests in Aimco Operating Partnership’s share of above adjustments		(7,317	)		(11,114	)
Preferred stock dividends		13,166			14,208
Funds From Operations	$	65,075		$	80,181
Preferred stock dividends		(13,166	)		(14,208	)
Dividends/distributions on dilutive preferred securities		—			1,333
Funds From Operations attributable to Aimco common stockholders – diluted	$	51,909		$	67,306
Weighted average number of common shares, participating securities, common share equivalents and dilutive preferred securities outstanding (4):
Common shares, participating securities and common share equivalents (5)		116,343			128,352
Dilutive preferred securities		—			2,674
Total		116,343			131,026

Notes:

(1)	Represents the numerator for earnings per common share, calculated in accordance with GAAP (see Note 6 to the condensed consolidated financial statements in Item 1).
(2)	“Noncontrolling partners,” means noncontrolling partners in our consolidated real estate partnerships.
(3)	Prior to the adoption of SFAS 160 (See Note 2 to the condensed consolidated financial statements in Item 1), we recognized deficit distributions to noncontrolling partners as charges in our income statement when cash was distributed to a noncontrolling partner in a consolidated partnership in excess of the positive balance in such partner’s capital account, which is classified as noncontrolling interests on our balance sheet. We recorded these charges for GAAP purposes even though there is no economic effect or cost. Deficit distributions to noncontrolling partners occur when the fair value of the underlying real estate exceeds its depreciated net book value because the underlying real estate has appreciated or maintained its value. As a result, the recognition of expense for deficit distributions to noncontrolling partners represented, in substance, either (a) our recognition of depreciation previously allocated to the noncontrolling partner or (b) a payment related to the noncontrolling partner’s share of real estate appreciation. Based on White Paper guidance that requires real estate depreciation and gains to be excluded from FFO, we added back deficit distributions and subtracted related recoveries in our reconciliation of net income to FFO. Subsequent to the adoption of SFAS 160, effective January 1, 2009, we may reduce the balance of noncontrolling partners’ capital accounts below zero in such situations and we are no longer required to recognize such charges in our income statement.
(4)	Weighted average common shares, common share equivalents and dilutive preferred securities amounts for the periods presented have been retroactively adjusted for the effect of shares of Common Stock issued in connection with the special dividends paid during 2008 and in January 2009.
(5)	Represents the denominator for earnings per common share – diluted, calculated in accordance with GAAP, plus additional participating securities and common share equivalents that are dilutive for FFO. In this FFO presentation, we have presented participating securities similar to outstanding shares, which has the same effect on per share amounts as allocating undistributed FFO amounts to the participating securities.

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Liquidity and Capital Resources

Liquidity is the ability to meet present and future financial obligations. Our primary source of liquidity is cash flow from our operations. Additional sources are proceeds from property sales and proceeds from refinancings of existing mortgage loans and borrowings under new mortgage loans.

Our principal uses for liquidity include normal operating activities, payments of principal and interest on outstanding debt, capital expenditures, dividends paid to stockholders, distributions paid to noncontrolling interest partners, repurchases of shares of our Common Stock, and acquisitions of, and investments in, properties. We use our cash and cash equivalents and our cash provided by operating activities to meet short-term liquidity needs. In the event that our cash and cash equivalents and cash provided by operating activities are not sufficient to cover our short-term liquidity demands, we have additional means, such as short-term borrowing availability and proceeds from property sales and refinancings, to help us meet our short-term liquidity demands. We may use our revolving credit facility for general corporate purposes and to fund investments on an interim basis. We expect to meet our long-term liquidity requirements, such as debt maturities and property acquisitions, through long-term borrowings, both secured and unsecured, the issuance of debt or equity securities (including OP Units), the sale of properties and cash generated from operations.

The current state of credit markets and related effect on the overall economy may have an adverse affect on our liquidity, both through increases in interest rates and credit risk spreads, and access to financing. As further discussed in Item 3, Quantitative and Qualitative Disclosures About Market Risk, we are subject to interest rate risk associated with certain variable rate liabilities, preferred stock and assets. Based on our net variable rate liabilities, preferred stock and assets outstanding at March 31, 2009, we estimate that a 1.0 % increase in 30-day LIBOR with constant credit risk spreads would reduce our income attributable to common stockholders by approximately $4.9 million on an annual basis. Although base interest rates have generally decreased relative to their levels prior to the disruptions in the financial markets, the tightening of credit markets has affected the credit risk spreads charged over base interest rates on, and the availability of, mortgage loan financing. For future refinancing activities, our liquidity and cost of funds may be affected by increases in base interest rates or higher credit risk spreads. If timely property financing options are not available for maturing debt, we may consider alternative sources of liquidity, such as reductions in certain capital spending or proceeds from asset dispositions.

From time to time, we enter into total rate of return swaps on various fixed rate secured tax-exempt bonds payable and fixed rate notes payable to convert these borrowings from a fixed rate to a variable rate and provide an efficient financing product to lower our cost of borrowing. In exchange for our receipt of a fixed rate generally equal to the underlying borrowing’s interest rate, the total rate of return swaps require that we pay a variable rate, equivalent to the SIFMA rate for tax-exempt bonds payable and the 30-day LIBOR rate for notes payable, plus a credit risk spread. These swaps generally have a second or third lien on the property collateralized by the related borrowings and the obligations under certain of these swaps are cross-collateralized with certain of the other swaps with a particular counterparty. The total rate of return swaps require specified loan-to-value ratios. In the event the values of the real estate properties serving as collateral under these agreements decline, we may be required to provide additional collateral pursuant to the swap agreements, which would adversely affect our cash flows. The underlying borrowings are generally callable at our option, with no prepayment penalty, with 30 days advance notice, and the swaps generally have a term of less than five years. At March 31, 2009, we had total rate of return swap positions with two financial institutions with notional amounts totaling $420.1 million and had provided $3.2 million in cash collateral pursuant to the swap agreements to satisfy the loan-to-value ratio requirements. On April 1, 2009, we provided an additional $5.8 million in cash collateral pursuant to the swap agreements to satisfy the loan-to-value ratio requirements.

The total rate of return swaps have a contractually defined termination value generally equal to the difference between the fair value and the counterparty’s purchased value of the underlying borrowings (which is typically par value or contract value), which may require payment by us if the fair value is less than the purchased value, or to us if the fair value exceeds the purchased value. In the event we are unable to extend the arrangements at their maturities, the counterparty, who is also the creditor on the related borrowings, may desire to sell the borrowings. If the counterparty’s purchased value of the underlying borrowings exceeds the fair value of the underlying borrowings at the date of the swap maturities, we may elect to purchase the borrowings at the counterparty’s purchased value to avoid incurring a termination payment under the swap arrangements. In such event, we would be required to refinance the borrowings or find other sources of liquidity to repay the borrowings.

27

We periodically evaluate counterparty credit risk associated with these arrangements. At the current time, we have concluded we do not have material exposure. In the event a counterparty were to default under these arrangements, loss of the net interest benefit we generally receive under these arrangements, which is equal to the difference between the fixed rate we receive and the variable rate we pay, may adversely affect our operating cash flows.

As of March 31, 2009, the amount available under our revolving credit facility was $577.0 million (after giving effect to outstanding borrowings of $15.0 million and $43.0 million outstanding for undrawn letters of credit issued under the revolving credit facility). Our total outstanding term loan of $350.0 million at March 31, 2009, matures in the first quarter 2011. Additionally, we have limited obligations to fund redevelopment commitments during the year ending December 31, 2009, and no development commitments.

At March 31, 2009, we had $93.2 million in cash and cash equivalents, a decrease of $206.4 million from December 31, 2008. At March 31, 2009, we had $265.6 million of restricted cash, primarily consisting of reserves and escrows held by lenders for bond sinking funds, capital expenditures, property taxes and insurance. In addition, cash, cash equivalents and restricted cash are held by partnerships that are not presented on a consolidated basis. The following discussion relates to changes in cash due to operating, investing and financing activities, which are presented in our condensed consolidated statements of cash flows in Item 1.

Operating Activities

For the three months ended March 31, 2009, our net cash used in operating activities of $17.8 million was primarily related to payments of operating accounts payable and accrued liabilities, including amounts related to our organizational restructuring (see Note 4 to the condensed consolidated financial statements in Item 1), in excess of the operating income from our consolidated properties, which is affected primarily by rental rates, occupancy levels and operating expenses related to our portfolio of properties. Cash provided by operating activities decreased $76.3 million compared with the three months ended March 31, 2008, driven primarily by a $37.3 million decrease in operating income of our consolidated properties, including those classified in discontinued operations, which was attributable to property sales in 2009 and 2008, and a $25.9 million increase in payments on operating accounts payable and accrued expenses, including payments related to our restructuring accrual (see Note 2 to the condensed consolidated financial statements in Item 1), in 2009 relative to 2008.

Investing Activities

For the three months ended March 31, 2009, our net cash used in investing activities of $8.9 million consisted primarily of capital expenditures, partially offset by proceeds from disposition of real estate.

Although we hold all of our properties for investment, we sell properties when they do not meet our investment criteria or are located in areas that we believe do not justify our continued investment when compared to alternative uses for our capital. During the three months ended March 31, 2009, we sold 10 consolidated properties. These properties were sold for an aggregate sales price of $84.0 million and generated proceeds totaling $82.3 million, after the payment of transaction costs and debt prepayment penalties. The $82.3 million in proceeds is inclusive of debt assumed by buyers which are excluded from proceeds from disposition of real estate in the consolidated statement of cash flows. Sales proceeds were used primarily to repay property debt and for other corporate purposes.

Our portfolio management strategy includes property acquisitions and dispositions to concentrate our portfolio in our target markets. We are currently marketing for sale certain properties that are inconsistent with this long-term investment strategy. Additionally, from time to time, we may market certain properties that are consistent with this strategy but offer attractive returns. We plan to use our share of the net proceeds from such dispositions to reduce debt, fund capital expenditures on existing assets, fund acquisitions, and for other operating needs and corporate purposes.

28

Capital Expenditures

We classify all capital spending as Capital Replacements (which we refer to as CR), Capital Improvements (which we refer to as CI), casualties or redevelopment. Expenditures other than casualty or redevelopment capital expenditures are apportioned between CR and CI based on the useful life of the capital item under consideration and the period we have owned the property.

CR represents the share of capital expenditures that are deemed to replace the portion of acquired capital assets that was consumed during the period we have owned the asset. CI represents the share of expenditures that are made to enhance the value, profitability or useful life of an asset as compared to its original purchase condition. CR and CI exclude capital expenditures for casualties and redevelopment. Casualty expenditures represent capitalized costs incurred in connection with casualty losses and are associated with the restoration of the asset. A portion of the restoration costs may be reimbursed by insurance carriers subject to deductibles associated with each loss. Redevelopment expenditures represent expenditures that substantially upgrade the property. For the three months ended March 31, 2009, we spent a total of $15.5 million, $10.9 million, $2.5 million and $35.5 million on CR, CI, casualties and redevelopment, respectively.

The table below details our share of actual spending, on both consolidated and unconsolidated real estate partnerships, for CR, CI, casualties and redevelopment for the three months ended March 31, 2009, on a per unit and total dollar basis. Per unit numbers for CR and CI are based on approximately 99,131 average units for the year, including 82,996 conventional units and 16,135 affordable units. Average units are weighted for the portion of the period that we owned an interest in the property, represent ownership-adjusted effective units, and exclude non-managed units. Total capital expenditures are reconciled to our condensed consolidated statement of cash flows for the same period (in thousands, except per unit amounts).

	Aimco’s			Per
	Share of			Effective
	Expenditures			Unit
Capital Replacements Detail:
Building and grounds	$	6,368		$	64
Turnover related		6,984			70
Capitalized site payroll and indirect costs		2,190			22
Our share of Capital Replacements	$	15,542		$	156
Capital Replacements:
Conventional	$	14,045		$	169
Affordable		1,497		$	93
Our share of Capital Replacements		15,542		$	156
Capital Improvements:
Conventional		9,995		$	120
Affordable		914		$	57
Our share of Capital Improvements		10,909		$	110
Casualties:
Conventional		2,537
Affordable		(87	)
Our share of casualties		2,450
Redevelopment:
Conventional projects		21,644
Tax credit projects		13,858
Our share of redevelopment		35,502
Our share of capital expenditures		64,403
Plus noncontrolling partners’ share of consolidated spending		4,254
Less our share of unconsolidated spending		(287	)
Total capital expenditures per condensed consolidated statement of cash flows	$	68,370

Included in the above spending for CI, casualties and redevelopment, was approximately $12.7 million of our share of capitalized site payroll and indirect costs related to these activities for the three months ended March 31, 2009.

29

Financing Activities

For the three months ended March 31, 2009, net cash used in financing activities of $179.8 million was primarily attributed to debt principal payments, dividends paid to common and preferred stockholders and distributions to noncontrolling interests. Proceeds from property loans partially offset the cash outflows.

Mortgage Debt

At March 31, 2009 and December 31, 2008, we had $6.3 billion in consolidated mortgage debt outstanding, which included $5.0 million and $65.3 million, respectively, of mortgage debt classified within liabilities related to assets held for sale. During the three months ended March 31, 2009, we refinanced or closed mortgage loans on 12 properties generating $172.9 million of proceeds from borrowings with a weighted average interest rate of 5.87%. Our share of the net proceeds after repayment of existing debt, payment of transaction costs and distributions to limited partners, was $55.6 million. We used these total net proceeds for capital expenditures and other corporate purposes. We intend to continue to refinance mortgage debt primarily as a means of extending current and near term maturities and to finance certain capital projects.

Fair Value Measurements

We enter into total rate of return swaps on various fixed rate secured tax-exempt bonds payable and fixed rate notes payable to convert these borrowings from a fixed rate to a variable rate and provide an efficient financing product to lower our cost of borrowing. In accordance with Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities, or SFAS 133, we designate total rate of return swaps as hedges of the risk of overall changes in the fair value of the underlying borrowings. At each reporting period, we estimate the fair value of these borrowings and the total rate of return swaps and recognize any changes therein as an adjustment of interest expense.

Our method used to calculate the fair value of the total rate of return swaps generally results in changes in fair value that are equal to the changes in fair value of the related borrowings, which is consistent with our hedging strategy. We believe that these financial instruments are highly effective in offsetting the changes in fair value of the related borrowings during the hedging period, and accordingly, changes in the fair value of these instruments have no material impact on our liquidity, results of operations or capital resources.

During the three months ended March 31, 2009, changes in the fair values of these financial instruments resulted in increases of $0.8 million in the carrying amount of the hedged borrowings and equal decreases in accrued liabilities and other for total rate of return swaps. At March 31, 2009, the cumulative recognized changes in the fair value of these financial instruments resulted in a $28.7 million reduction in the carrying amount of the hedged borrowings offset by an equal increase in accrued liabilities and other for total rate of return swaps. The cumulative decreases in the fair values of the hedged borrowings and related swaps reflect the recent uncertainty in the credit markets which has decreased demand and increased pricing for similar debt instruments.

During the three months ended March 31, 2009, we received net cash receipts of $2.7 million under the total return swaps, which positively impacted our liquidity. To the extent interest rates increase above the fixed rates on the underlying borrowings, our obligations under the total return swaps will negatively affect our liquidity. As of March 31, 2009, we had provided $3.2 million of cash collateral to satisfy certain loan-to-value requirements under the total rate of return swap agreements, which negatively affected our liquidity. Additionally, on April 1, 2009, we provided an additional $5.8 million of cash collateral under these agreements. In the event the values of the real estate properties serving as collateral under these agreements decline, we may be required to provide additional collateral pursuant to the swap agreements, which would adversely affect our liquidity.

See Note 2 of the condensed consolidated financial statements in Item 1 for additional information on our total rate of return swaps and related borrowings.

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Term Loans and Credit Facility

On May 1, 2009, we entered into a Sixth Amendment to our Amended and Restated Senior Secured Credit Agreement with a syndicate of financial institutions, which we refer to as the Credit Agreement. The Sixth Amendment provides for a reduction in the aggregate amount of commitments and loans under the Credit Agreement from $985.0 million, comprised of a $350.0 million term loan and $635.0 million of revolving loan commitments to $530.0 million, comprised of a $350.0 million term loan and $180.0 million of revolving loan commitments, which we anticipate may be increased to approximately $200.0 million in the near term. The $350.0 million term loan bears interest at LIBOR plus 1.5%, or at our option, a base rate equal to the prime rate, and matures March 2011. Pursuant to the Sixth Amendment, our revolving credit facility matures May 1, 2011, and may be extended for an additional year, subject to certain conditions, including payment of a 45.0 basis point fee on the total revolving commitments and repayment of the entire $350.0 million term loan by February 1, 2011. The Sixth Amendment also provides for an increase in the interest rate on borrowings under the revolving credit facility, which is based on a pricing grid determined by leverage (currently at LIBOR plus 4.25% with a LIBOR floor of 2.00%) and the modification of certain financial covenants and certain indebtedness and investment baskets. The Sixth Amendment also provides that while the term loan under the Credit Agreement is outstanding, repurchases of our Common Stock will be permitted with 50% of net asset sale proceeds if the other 50% of such net asset sale proceeds are applied to repay the term loan. The Sixth Amendment permits us to increase revolving committments by up to $320.0 million, subject to our obtaining such committments from eligible lenders.

At March 31, 2009, the term loan had an outstanding principal balance of $350.0 million loan (after a $50.0 million prepayment in January 2009) and a weighted average interest rate of 2.06%. The amount available under the revolving credit facility at March 31, 2009, was $577.0 million (after giving effect to outstanding borrowings of $15.0 million and $43.0 million outstanding for undrawn letters of credit issued under the revolving credit facility). The proceeds of revolving loans are generally permitted to be used to fund working capital and for other corporate purposes; provided that pursuant to the Sixth Amendment, revolving loans are generally not permitted to be used to fund repurchases of our Common Stock.

On May 1, 2009, we entered into a letter agreement with certain financial institutions that have revolving commitments under the Credit Agreement, which provides that, notwithstanding the terms of the Credit Agreement, until the revolving loan commitments are further syndicated, we will not (i) request an increase in the revolving loan commitments under the Credit Agreement which would result in the revolving loan commitments exceeding $200.0 million, (ii) incur recourse debt, subject to certain exceptions, or (iii) purchase or otherwise acquire shares of our Common Stock.

Equity Transactions

During the three months ended March 31, 2009, we paid cash dividends totaling $13.2 million and $60.4 million to preferred and common stockholders, respectively, and cash distributions totaling $58.2 million to noncontrolling interest partners. Additionally, during the three months ended March 31, 2009, we paid dividends totaling $149.0 million to common stockholders through the issuance of approximately 15.5 million shares.

Our Board of Directors has, from time to time, authorized us to repurchase shares of our outstanding capital stock. During the three months ended March 31, 2009, we did not repurchase any shares of Common Stock. As of March 31, 2009, we were authorized to repurchase approximately 19.3 million additional shares of our Common Stock under an authorization that has no expiration date. Future repurchases may be made from time to time in the open market or in privately negotiated transactions.

Future Capital Needs

We expect to fund any future acquisitions, redevelopment projects, capital improvements and capital replacement principally with proceeds from property sales (including tax-free exchange proceeds), short-term borrowings, debt and equity financing (including tax credit equity) and operating cash flows.

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

Our primary market risk exposure relates to changes in base interest rates, credit risk spreads and availability of credit. We are not subject to any other material market rate or price risks. We use predominantly long-term, fixed-rate non-recourse mortgage debt in order to avoid the refunding and repricing risks of short-term borrowings. We use short-term debt financing and working capital primarily to fund short-term uses and acquisitions and generally expect to refinance such borrowings with cash from operating activities, property sales proceeds, long-term debt or equity financings. We use total rate-of-return swaps to obtain the benefit of variable rates on certain of our fixed rate debt instruments. We make limited use of other derivative financial instruments and we do not use them for trading or other speculative purposes.

We had $1,268.2 million of floating rate debt and $73.0 million of floating rate preferred stock outstanding at March 31, 2009. Of the total floating rate debt, the major components were floating rate tax-exempt bond financing ($562.8 million), floating rate secured notes ($331.8 million), revolving loans ($15.0 million) and term loans ($350.0 million). At March 31, 2009, we had approximately $523.1 million in cash and cash equivalents, restricted cash and notes receivable, the majority of which bear interest. We also had approximately $114.4 million of variable rate debt associated with our redevelopment activities, for which we capitalize a portion of the interest expense. The effect of our interest bearing assets and of capitalizing interest on variable rate debt associated with our redevelopment activities would partially reduce the effect of an increase in variable interest rates. Historically, changes in tax-exempt floating interest rates have been at a ratio of less than 1:1 with changes in taxable floating interest rates. Floating rate tax-exempt bond financing is benchmarked against the SIFMA rate, which since 1989 has averaged 69% of the 30-day LIBOR rate. If the historical relationship continues, on an annual basis, an increase in 30-day LIBOR of 1.0% (0.69% in tax-exempt interest rates) with constant credit risk spreads would result in our net income and our net income attributable to Aimco common stockholders being reduced by $4.8 million and $4.9 million, respectively.

31

The estimated aggregate fair value of our consolidated debt (including amounts reported in liabilities related to assets held for sale) was approximately $6.7 billion at March 31, 2009. The combined carrying value of our consolidated debt (including amounts reported in liabilities related to assets held for sale) was approximately $6.7 billion at March 31, 2009. If market rates for our fixed-rate debt were higher by 1.0% with constant credit risk spreads, the estimated fair value of our debt discussed above would decrease from $6.7 billion to $6.4 billion. If market rates for our debt discussed above were lower by 1.0% with constant credit risk spreads, the estimated fair value of our fixed-rate debt would increase from $6.7 billion to $7.1 billion.

ITEM 4. Controls and Procedures

Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer and chief financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, our chief executive officer and chief financial officer have concluded that, as of the end of such period, our disclosure controls and procedures are effective.

Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the first quarter of 2009 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

32

PART II. OTHER INFORMATION

ITEM 1A. Risk Factors

As of the date of this report, there have been no material changes from the risk factors in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a) Unregistered Sales of Equity Securities. From time to time during the three months ended March 31, 2009, we 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. During the three months ended March 31, 2009, approximately 138,100 shares of Common Stock were issued in exchange for OP Units in these transactions. All of the foregoing issuances were made in private placement transactions exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, as amended.

(c) Repurchases of Equity Securities. There were no repurchases of our equity securities during the three months ended March 31, 2009. Our Board of Directors has, from time to time, authorized us to repurchase shares of our outstanding capital stock. As of March 31, 2009, we were authorized to repurchase approximately 19.3 million additional shares. This authorization has no expiration date. These repurchases may be made from time to time in the open market or in privately negotiated transactions.

Dividend Payments. Our Credit Agreement includes customary covenants, including a restriction on dividends and other restricted payments, but permits dividends during any 12-month period in an aggregate amount of up to 95% of our Funds From Operations, subject to certain non-cash adjustments, for such period or such amount as may be necessary to maintain our REIT status.

ITEM 5. Other Information

Amendments of Bylaws

On April 28, 2009, our Board of Directors adopted amended and restated Bylaws to be effective immediately. As amended, the bylaws require stockholders who intend to submit a director nomination or other business before an annual or special meeting of stockholders to provide to Aimco, in addition to other information, certain details about all ownership interests in Aimco by the stockholder and any beneficial owner on whose behalf the nomination or proposal is made, including any derivative or short positions, profit or other economic interests, options, hedging transactions, borrowed or loaned shares, or any rights to vote Aimco’s securities.

The foregoing description is qualified in its entirety by reference to Aimco’s Amended and Restated Bylaws, which are filed as Exhibit 3.2 to this Form 10-Q and are hereby incorporated by reference.

Amended Credit Agreement

On May 1, 2009, we entered into a Sixth Amendment to our Amended and Restated Senior Secured Credit Agreement with a syndicate of financial institutions, and a letter agreement with certain financial institutions that have revolving commitments under the credit agreement. The Sixth Amendment and the letter agreement are described under the heading “Term Loans and Credit Facility” in our “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Part I, Item 2 of this Form 10-Q and is hereby incorporated by reference.

33

ITEM 6. Exhibits

The following exhibits are filed with this report:

EXHIBIT NO.(1)
	3.1	Charter (Exhibit 3.1 to Aimco’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2006, is incorporated herein by reference)
	3.2	Amended and Restated Bylaws
	10.1	Sixth Amendment to Senior Secured Credit Agreement, dated as of May 1, 2009, by and among Apartment Investment and Management Company, AIMCO Properties, L.P., and AIMCO/Bethesda Holdings, Inc., as the Borrowers, the pledgors and guarantors named therein, Bank of America, N.A., as administrative agent and Bank of America, N.A., Keybank National Association and the other lenders listed therein
	31.1	Certification of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	31.2	Certification of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	32.1	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
	32.2	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
	99.1	Agreement Regarding 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.

34

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/ DAVID ROBERTSON
	David Robertson
	President, Chief Investment Officer and Chief Financial Officer (duly authorized officer and principal financial officer)
By:	/s/ PAUL BELDIN
	Paul Beldin
	Senior Vice President and Chief Accounting Officer

Date: May 1, 2009

35

Exhibit Index

EXHIBIT NO.(1)		EXHIBIT TITLE
	3.1	Charter (Exhibit 3.1 to Aimco’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2006, is incorporated herein by reference)
	3.2	Amended and Restated Bylaws
	10.1	Sixth Amendment to Senior Secured Credit Agreement, dated as of May 1, 2009, by and among Apartment Investment and Management Company, AIMCO Properties, L.P., and AIMCO/Bethesda Holdings, Inc., as the Borrowers, the pledgors and guarantors named therein, Bank of America, N.A., as administrative agent and Bank of America, N.A., Keybank National Association and the other lenders listed therein
	31.1	Certification of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	31.2	Certification of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	32.1	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
	32.2	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
	99.1	Agreement Regarding 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.

  EX-3.2 2 c84560exv3w2.htm EXHIBIT 3.2

Exhibit 3.2

As Adopted on April 28, 2009

AMENDED AND RESTATED BY-LAWS

OF

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

TABLE OF CONTENTS

	Page
ARTICLE I. STOCKHOLDERS		1
SECTION 1.01. Annual Meeting		1
SECTION 1.02. Special Meeting		1
SECTION 1.03. Place of Meetings		1
SECTION 1.04. Meetings by Remote Communication		1
SECTION 1.05. Notice of Meetings; Waiver of Notice		2
SECTION 1.06. Quorum; Voting		2
SECTION 1.07. Adjournments		3
SECTION 1.08. General Right to Vote; Proxies		3
SECTION 1.09. List of Stockholders		3
SECTION 1.10. Conduct of Voting		3
SECTION 1.11. Conduct of Business		4
SECTION 1.12. Advance Notice Provisions for Election of Directors		4
SECTION 1.13. Advance Notice Provisions for Business to be Transacted at Annual Meeting		6
ARTICLE II. BOARD OF DIRECTORS		7
SECTION 2.01. Function of Directors		7
SECTION 2.02. Qualification and Number of Directors		7
SECTION 2.03. Election and Tenure of Directors		7
SECTION 2.04. Removal of Director		8
SECTION 2.05. Vacancy on Board of Directors		8
SECTION 2.06. Regular Meetings		8
SECTION 2.07. Special Meetings		8
SECTION 2.08. Notice of Meeting		9
SECTION 2.09. Quorum; Action by Directors		9
SECTION 2.10. Meeting by Conference Telephone		9
SECTION 2.11. Compensation		9
SECTION 2.12. Resignation		9
SECTION 2.13. Presumption of Assent		10

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	Page
ARTICLE III. COMMITTEES		10
SECTION 3.01. Committees		10
SECTION 3.02. Committee Procedure		10
ARTICLE IV. OFFICERS		11
SECTION 4.01. Executive and Other Officers		11
SECTION 4.02. Chairman of the Board		11
SECTION 4.03. Vice Chairman of the Board		11
SECTION 4.04. President		11
SECTION 4.05. Vice-Presidents		11
SECTION 4.06. Secretary		12
SECTION 4.07. Treasurer		12
SECTION 4.08. Assistant and Subordinate Officers		12
SECTION 4.09. Election, Tenure and Removal of Officers		12
SECTION 4.10. Compensation		12
ARTICLE V. DIVISIONAL TITLES		13
SECTION 5.01. Conferring Divisional Titles		13
SECTION 5.02. Effect of Divisional Titles		13
ARTICLE VI. STOCK		13
SECTION 6.01. Certificates for Stock		13
SECTION 6.02. Transfers		14
SECTION 6.03. Record Dates or Closing of Transfer Books		14
SECTION 6.04. Stock Ledger		14
SECTION 6.05. Certification of Beneficial Owners		14
SECTION 6.06. Lost Stock Certificates		15
SECTION 6.07. Fractional Share Interests or Scrip		15
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		16
SECTION 7.05. Bonds		16

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	Page
ARTICLE VIII. INDEMNIFICATION		16
SECTION 8.01. Procedure		16
SECTION 8.02. Exclusivity, Etc		16
SECTION 8.03. Insurance		17
SECTION 8.04. Severability; Definitions		17
ARTICLE IX. SUNDRY PROVISIONS		17
SECTION 9.01. Books and Records		17
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		18
SECTION 9.06. Resident Agent; Principal Office		18
SECTION 9.07. Amendments		18
SECTION 9.08. Reliance		18

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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 last Monday of April each year if not a legal holiday, or at such other time on such other day falling within 15 days before or after such date as shall be set by the board of directors. Except as the Charter, these By-laws or statute 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.

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 or the Board of Directors may determine that the meeting not be held at any place but instead be held by means of remote communication. At the request of a stockholder, the Board of Directors shall provide a place for the meeting of the stockholders.

SECTION 1.04. Meetings by Remote Communication. At the discretion of the Board of Directors and subject to any guidelines and procedures that the Board of Directors may adopt from time to time, stockholders and proxy holders not physically present at a meeting of the stockholders, by means of remote communication may participate in the meeting of the stockholders and may be considered present in person and may vote at the meeting of the stockholders, whether the meeting is held at a designated place or solely by means of remote communication. The Corporation shall implement reasonable measures to verify that each person considered present and authorized to vote at the meeting by means of remote communication is a stockholder or proxy holder, the Corporation shall implement reasonable measures to provide the stockholders and proxy holders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the stockholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with the proceedings and in the event any stockholder or proxy holder votes or takes other action at the meeting by means of remote communication, a record of the vote or other action shall be maintained by the Corporation.

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SECTION 1.05. Notice of Meetings; Waiver of Notice. Not less than ten nor more than 90 days before each stockholders’ meeting, the Secretary shall give notice in writing or by electronic transmission of the meeting to each stockholder entitled to vote at the meeting and each other stockholder entitled to notice of the meeting. Any notice given by the Corporation to a stockholder is effective if given by a single notice, in writing or by electronic transmission, to all stockholders who share an address if the Corporation gives notice, in writing or by electronic transmission, to the stockholder of its intent to give a single notice and the stockholder consents to receiving a single notice or fails to object in writing within 60 days after the Corporation gives notice to the stockholder of its intent to give a single notice. A stockholder may revoke consent given, whether affirmative or implied, by written notice to the Corporation. The notice shall state the time of the meeting, the place of the meeting, if any, and the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and may vote at 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 the stockholder, left at the stockholder’s residence or usual place of business, mailed to the stockholder at the stockholder’s address as it appears on the records of the Corporation or transmitted to the stockholder by an electronic transmission to any address or number of the stockholder at which the stockholder receives electronic transmissions. If the Corporation has received a request from a stockholder that notice not be sent by electronic transmission, the Corporation may not provide notice to the stockholder by electronic transmission. Notice given by electronic transmission shall be considered ineffective if the Corporation is unable to deliver two consecutive notices and the inability to deliver the notices becomes known to the Secretary, an Assistant Secretary, the transfer agent or other person responsible for giving the notice. The inadvertent failure to deliver any notice by electronic transmission does not invalidate any meeting or other action. An affidavit of the Secretary, an Assistant Secretary, the transfer agent or other agent of the Corporation that notice has been given by a form of electronic transmission, in the absence of actual fraud, shall be prima facie evidence of the facts stated in the affidavit. Notwithstanding the foregoing provisions, each person who is entitled to notice waives notice if the person before or after the meeting delivers a written waiver or a waiver by electronic transmission which is filed with the records of stockholders’ meetings, or is present at the meeting in person or by proxy.

SECTION 1.06. 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.

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SECTION 1.07. 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 chairman of the meeting 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 1.08. 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 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 1.09. 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 1.10. 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, and on the request of stockholders, present in person or by proxy, entitled to cast 10% in number of votes entitled to be cast, shall, 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.

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SECTION 1.11. Conduct of Business. Nominations of persons for election to the Board of Directors and the proposal of business to be considered by the stockholders may be made at an annual meeting of stockholders (a) pursuant to the Corporation’s notice of meeting, (b) by or at the direction of the Board of Directors or (c) by any stockholder of the Corporation (i) who was a stockholder of record at the time of giving notice(s) provided for in Section 1.12 and Section 1.13, (ii) who is entitled to vote for the election of directors at the meeting and (iii) who complied with the notice(s) procedures set forth in Section 1.12 and Section 1.13. Nominations of persons for election to the Board of Directors and the proposal of business to be considered by the stockholders may be made at a special meeting of stockholders (a) only pursuant to the Corporation’s notice of meeting and (b), in the case of nominations of persons for election to the Board of Directors, (i) by or at the direction of the Board of Directors or (ii) by any stockholder of the Corporation (A) who was a stockholder of record at the time of giving notice provided for in Section 1.12, (B) who is entitled to vote for the election of directors at the meeting and (C) who complied with the notice procedures set forth in Section 1.12. The chairman of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made in accordance with the procedures set forth in Section 1.12, Section 1.13 and this Section and, if any proposed nomination or business is not in compliance with Section 1.12, Section 1.13 and this Section, to declare that such defective nomination or proposal be disregarded.

SECTION 1.12. Advance Notice Provisions for Election of Directors. Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the Corporation. Nominations of persons for election to the Board of Directors may be made at any annual meeting of stockholders, or at any special meeting of stockholders called for the purpose of electing directors, (a) by or at the direction of the Board of Directors (or any duly authorized committee thereof) or (b) by any stockholder of the Corporation (i) who is a stockholder of record on the date of the giving of the notice provided for in this Section and on the record date for the determination of stockholders entitled to vote at such meeting and (ii) who complies with the notice procedures set forth in this Section. A stockholder’s notice must be delivered to or mailed and received by the Secretary at the principal executive offices of the Corporation (a) in the case of an annual meeting, not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is advanced by more than 30 days or delayed by more than 60 days from the anniversary date of the preceding year’s annual meeting, notice by the stockholder must be so delivered not earlier than the 90^th day prior to such annual meeting and not later than the close of business on the later of the 60^th day prior to such annual meeting or the tenth day following the day on which public announcement of the date of such annual meeting is first made; and (b) in the case of a special meeting of stockholders called for the purpose of electing directors, not later than the close of business on the tenth day following the day on which notice of the date of the special meeting was mailed or public announcement of the date of the

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special meeting was made, whichever first occurs. A stockholder’s notice to the Secretary must be in writing and set forth (a) as to each person whom the stockholder proposes to nominate for election as a director, all information relating to such person that is required to be disclosed in connection with solicitations of proxies for election of directors pursuant to Regulation 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations promulgated thereunder; and (b) as to the stockholder giving the notice (i) the name and address of such stockholder as they appear on the Corporation’s books and of the beneficial owner, if any, on whose behalf the nomination is made, (ii) the following information regarding the ownership interests of the stockholder or such other beneficial owner, which shall be supplemented in writing by the stockholder not later than 10 days after the record date for the meeting to disclose such interests as of the record date: (A) the class or series and number of shares of capital stock of the Corporation which are owned beneficially or of record by such stockholder and such beneficial owner; (B) any option, warrant, convertible security, stock appreciation right, or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of shares of the Corporation or with a value derived in whole or in part from the value of any class or series of shares of the Corporation, whether or not such instrument or right shall be subject to settlement in the underlying class or series of capital stock of the Corporation or otherwise (a “Derivative Instrument”) directly or indirectly owned beneficially by such stockholder and any other direct or indirect opportunity to profit or share in any profit derived from any increase or decrease in the value of shares of the Corporation; (C) any proxy, contract, agreement, arrangement, understanding, or relationship pursuant to which such stockholder has a right to vote any shares of any security of the Corporation; (D) any “short interest” in any security of the Corporation (for purposes of this Section 1.12 and Section 1.13, a person shall be deemed to have a short interest in a security if such person directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has the opportunity to profit or share in any profit derived from any decrease in the value of the subject security); (E) any rights to dividends on the shares of the Corporation owned beneficially by such stockholder that are separated or separable from the underlying shares of the Corporation; (F) any proportionate interest in shares of the Corporation or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which such stockholder is a general partner or, directly or indirectly, beneficially owns an interest in a general partner; and (G) any performance-related fees (other than an asset-based fee) to which such stockholder is entitled based on any increase or decrease in the value of shares of the Corporation or Derivative Instruments, if any, as of the date of such notice, including, without limitation, any such interests held by members of such stockholder’s immediate family sharing the same household; (iii) a description of all arrangements or understandings between such stockholder and each proposed nominee and any other person or persons (including their names) pursuant to which the nomination(s) are to be made by such stockholder, (iv) a representation that such stockholder intends to appear in person or by proxy at the meeting to nominate the persons named in its notice and (v) any other information relating to such stockholder that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Regulation 14A of the Exchange Act and the rules and regulations promulgated thereunder. Such notice must be accompanied by a written consent of each proposed nominee to be named as a nominee and to serve as a director if elected. No person shall be eligible for election as a director of the Corporation unless nominated in accordance with the procedures set forth in this Section. If the chairman of the meeting determines that a nomination was not made in accordance with the foregoing procedures, the chairman of the meeting shall declare to the meeting that the nomination was defective and such defective nomination shall be disregarded. No adjournment or postponement of a meeting of stockholders shall commence a new period for the giving of notice of a stockholder proposal hereunder.

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SECTION 1.13. Advance Notice Provisions for Business to be Transacted at Annual Meeting. No business may be transacted at an annual meeting of stockholders, other than business that is either (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors (or any duly authorized committee thereof), (b) otherwise properly brought before the annual meeting by or at the direction of the Board of Directors (or any duly authorized committee thereof) or (c) otherwise properly brought before the annual meeting by any stockholder of the Corporation (i) who is stockholder of record on the date of the giving of the notice provided for in this Section and on the record date for the determination of stockholders entitled to vote at such annual meeting and (ii) who complies with the notice procedures set forth in this Section. A stockholder’s notice must be delivered to or mailed and received by the Secretary at the principal executive offices of the Corporation not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is advanced by more than 30 days or delayed by more than 60 days from the anniversary date of the preceding year’s annual meeting, notice by the stockholder must be so delivered not earlier than the 90^th day prior to such annual meeting and not later than the close of business on the later of the 60^th day prior to such annual meeting or the tenth day following the day on which public announcement of the date of such meeting is first made. A stockholder’s notice to the Secretary must in writing and set forth as to each matter such stockholder proposes to bring before the annual meeting: (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting; (ii) the name and address of such stockholder as they appear on the Corporation’s books and of the beneficial owner, if any, on whose behalf the proposal is made; (iii) the following information regarding the ownership interests of the stockholder or such other beneficial owner, which shall be supplemented in writing by the stockholder not later than 10 days after the record date for the meeting to disclose such interests as of the record date: (A) the class or series and number of shares of capital stock of the Corporation which are owned beneficially or of record by such stockholder and such beneficial owner; (B) any option, warrant, convertible security, stock appreciation right, or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of shares of the Corporation or with a value derived in whole or in part from the value of any Derivative Instrument directly or indirectly owned beneficially by such stockholder and any other direct or indirect opportunity to profit or share in any profit derived from any increase or decrease in the value of shares of the Corporation; (C) any proxy, contract, agreement, arrangement, understanding, or relationship pursuant to which such stockholder has a right to vote any shares of any security of the Corporation; (D) any short interest in any security of the Corporation; (E) any rights to dividends

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on the shares of the Corporation owned beneficially by such stockholder that are separated or separable from the underlying shares of the Corporation; (F) any proportionate interest in shares of the Corporation or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which such stockholder is a general partner or, directly or indirectly, beneficially owns an interest in a general partner; and (G) any performance-related fees (other than an asset-based fee) to which such stockholder is entitled based on any increase or decrease in the value of shares of the Corporation or Derivative Instruments, if any, as of the date of such notice, including, without limitation, any such interests held by members of such stockholder’s immediate family sharing the same household; (iv) a description of all arrangements or understandings between such stockholder and any other person or persons (including their names) in connection with the proposal of such business by such stockholder and any material interest of such stockholder in such business; and (v) a representation that such stockholder intends to appear in person or by proxy at the annual meeting to bring such business before the meeting. No business shall be conducted at the annual meeting of stockholders except business brought before the annual meeting in accordance with the procedures set forth in Section 1.12 or in this Section, provided, however, that once business has been properly brought before the annual meeting in accordance with such procedures, nothing in Section 1.12 nor in this Section shall be deemed to preclude discussion by any stockholder of any such business. If the chairman of an annual meeting determines that business was not properly brought before the annual meeting in accordance with the foregoing procedures, the chairman of the meeting shall declare to the meeting that the business was not properly brought before the meeting and such business shall not be transacted. No adjournment or postponement of a meeting of stockholders shall commence a new period for the giving of notice of a stockholder proposal hereunder.

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.

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.

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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 or by means of remote communication. Any other regular meeting of the Board of Directors shall be held on such date and time, and at such place or by means of remote communication, 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 or delivered by electronic transmission with or without a meeting. A special meeting of the Board of Directors shall be held on such date, at any place or by means of remote communication, 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 or means of remote communication as may be designated in the call.

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.

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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 of the meeting and place or that the meeting is being held by means of remote communication. 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 electronic transmission, 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 delivers a written waiver or a waiver by electronic transmission which is filed with the records of the meeting either before or after the holding thereof, waiving 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 consent which sets forth the action is given in writing or by electronic transmission by each member of the Board of Directors and filed in paper or electronic form 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 other 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.

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 notice of such resignation in writing or by electronic transmission 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. Such resignation may provide that it becomes effective on some future date, the occurrence of a certain future event or the acceptance of such resignation by the Board of Directors, the Chairman of the Board or other specified officer.

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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 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 a unanimous consent which sets forth the action is given in writing or by electronic transmission by each member of the committee and filed in paper or electronic form with the minutes of the committee. The members of a committee may conduct any meeting thereof by conference telephone or other means of communication in accordance with the provisions of Section 2.10.

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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. The Vice Chairman of the Board, if one be elected, 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, unless otherwise provided by resolution of the Board of Directors, 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 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.

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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.

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.

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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. The Board of Directors may determine to issue certificated or uncertificated shares of capital stock and other securities of the Corporation. For certificated 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 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.

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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.

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.

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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 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.

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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 costs and 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 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 (including attorney’s fees) incurred in connection with successfully establishing his or her right to indemnification, in whole or in part, in any such action shall also be paid or 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.

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SECTION 8.03. Insurance.  The Corporation may purchase and maintain insurance on behalf of any Indemnified Party against any liability asserted against and incurred by any Indemnified Party in any protected capacity or arising out of his or her position. The Corporation may purchase and maintain insurance on its behalf in respect of any liability it may incur to provide indemnification under the Charter, this By-Law, or law.

SECTION 8.04. 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 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.

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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 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.

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CERTIFICATE OF SECRETARY

I HEREBY CERTIFY that the foregoing is a full, true and correct copy of the Amended and Restated By-Laws of Apartment Investment and Management Company, a Maryland corporation, as in effect on the date hereof.

WITNESS my hand and seal of the Corporation.

Date: April 28, 2009	/s/ Lisa R. Cohn
	Lisa R. Cohn
	Executive Vice President, General Counsel and Secretary

(SEAL)

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EX-3.2

Exhibit 3.2

EX-10.1

Exhibit 10.1

SIXTH AMENDMENT TO
AMENDED AND RESTATED
SENIOR SECURED CREDIT AGREEMENT

among

Apartment Investment and Management Company,
AIMCO Properties, L.P., and
AIMCO/Bethesda Holdings, Inc.,

as the Borrowers,
the Guarantors and
Pledgors named herein,

Bank of America, N.A.,
as Administrative Agent, Swing Line Lender
and L/C Issuer

and

The Other Financial
Institutions Party Hereto

Dated as of May 1, 2009

BANC OF AMERICA SECURITIES LLC

and

KEYBANC CAPITAL MARKETS

as Joint-Lead Arrangers

and

Joint Book Managers and Bookrunners

SIXTH AMENDMENT TO
AMENDED AND RESTATED
SENIOR SECURED CREDIT AGREEMENT

This SIXTH AMENDMENT TO AMENDED AND RESTATED SENIOR SECURED CREDIT AGREEMENT (this “Amendment”) is dated as of May 1, 2009 and entered into by and among APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation (the “REIT”), AIMCO PROPERTIES, L.P., a Delaware limited partnership (“AIMCO”), and AIMCO/BETHESDA HOLDINGS, INC., a Delaware corporation (“AIMCO/Bethesda”) (the REIT, AIMCO and AIMCO/Bethesda collectively referred to herein as “Borrowers”), BANK OF AMERICA, N.A. (“Bank of America”), as Administrative Agent (in such capacity, “Administrative Agent”) and as Swing Line Lender and L/C Issuer, and the Lenders party hereto, and is made with reference to that certain Amended and Restated Senior Secured Credit Agreement, dated as of November 2, 2004, by and among Borrowers, each lender from time to time party thereto, BANK OF AMERICA, N.A., as Administrative Agent and as Swing Line Lender and L/C Issuer, and KeyBank National Association, as Syndication Agent (the “Credit Agreement”), as amended by that certain First Amendment to Amended and Restated Senior Secured Credit Agreement, dated June 16, 2005 (the “First Amendment”), as amended by that certain Second Amendment to Amended and Restated Senior Secured Credit Agreement, dated March 22, 2006 (the “Second Amendment”), as amended by that certain Third Amendment to Amended and Restated Senior Secured Credit Agreement, dated August 31, 2007 (“Third Amendment”), as amended by that certain Fourth Amendment to Amended and Restated Senior Secured Credit Agreement, dated September 14, 2007 (“Fourth Amendment”), and as amended by that certain Fifth Amendment to Amended and Restated Senior Secured Credit Agreement, dated September 9, 2008 (“Fifth Amendment”) (the Credit Agreement as amended by the First Amendment, Second Amendment, Third Amendment, Fourth Amendment, Fifth Amendment and this Amendment is referred to herein as the “Amended Agreement”). Capitalized terms used in this Amendment shall have the meanings set forth in the Amended Agreement unless otherwise defined herein.

RECITALS

WHEREAS, Borrowers desire to amend the Amended Agreement as more particularly set forth below;

WHEREAS, pursuant to the Amended Agreement, the amendments set forth herein require the consent of the Required Lenders, and the Required Lenders have consented hereto;

1

NOW, THEREFORE, in consideration of the agreements, provisions and covenants contained herein, the parties agree as follows:

Section 1. AMENDMENTS TO THE CREDIT AGREEMENT

A. The defined term “Applicable Revolving Rate” is deleted and replaced with:

““Applicable Revolving Rate” means the following percentages per annum, based upon the Leverage Ratio as set forth in the most recent Compliance Certificate received by Administrative Agent pursuant to Section 6.02(b):

Applicable Revolving Rate

				Applicable			Applicable
				Revolving			Revolving			Letters of
Pricing Level	Leverage Ratio			Eurodollar Rate +			Base Rate +			Credit
1		< 50	%		3.25	%		2.00	%		3.25	%
2	≥ 50% and < 60%				4.25	%		3.00	%		4.25	%
3		≥ 60	%		5.00	%		3.75	%		5.00	%

Any increase or decrease in the Applicable Revolving Rate resulting from a change in the Leverage Ratio shall become effective as of the first Business Day immediately following the date a Compliance Certificate is delivered pursuant to Section 6.02(b); provided, however, that if a Compliance Certificate is not delivered when due in accordance with such Section, then Pricing Level 3 shall apply as of the first Business Day after the date on which such Compliance Certificate was required to have been delivered until the date such Compliance Certificate is delivered. The Applicable Revolving Rate in effect from the Sixth Amendment Effective Date through the date of delivery of the Compliance Certificate for the quarter ended March 31, 2009 shall be determined based on Pricing Level 2.”

B. The defined term “Applicable Unused Fee” is deleted and replaced with:

““Applicable Unused Fee” means 0.45% per annum based upon the Usage (as such term is defined below) as of the date of determination. As used in this definition, the term “Usage” shall mean on each date of determination the percentage of usage of the Revolving Commitments obtained by subtracting the average daily Total Revolving Outstandings for the most recent fiscal quarter ending prior to the date of determination from the aggregate Revolving Commitments then in effect.”

C. The defined term “Audited Financial Statements” is deleted and replaced with:

““Audited Financial Statements” means the audited consolidated balance sheet of the REIT for the fiscal year ended December 31, 2008, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year of the REIT, including the notes thereto.”

D. The defined term “Base Rate Loan” is deleted and replaced with:

““Base Rate Loan” means a Committed Loan that bears interest based on the Base Rate or the Applicable Revolving Base Rate.”

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E. The defined term “Capital Expenditure Reserve” is deleted and replaced with:

““Capital Expenditure Reserve” means, as of any date of determination, the product of (a) an amount not less than $350.00 (which amount is subject to adjustment as provided below but shall never be less than $350), and (b) the Borrowing Group’s Share of apartment units owned as of such date of determination; provided, however, that an apartment unit shall be excluded from the foregoing calculation if, at the date of determination, a mortgage lender with respect to such apartment unit holds a funded reserve for future capital improvements for such apartment unit. Administrative Agent may review the Capital Expenditure Reserve on December 31, 2009 and as of the last day of each subsequent calendar year (a “Review Date”) and, upon written notice to the Borrowers provided within 30 days after delivery of the Compliance Certificate relating to such calendar year, increase the per unit dollar amount in clause (a) above by an amount not to exceed the lesser of (i) $24.50 per year per unit or (ii) the amount by which the actual amount of Capital Expenditures per unit for the apartment units (the “Actual CapEx Amount”) in clause (b) for the prior four calendar quarters exceeds $350 plus any prior annual increases; provided, however, that if the Actual CapEx Amount declines from one year to the next, then the per unit dollar amount in clause (a) above shall automatically decrease as of each Review Date to an amount equal to the greater of (x) $350 per unit and (y) the Actual CapEx Amount for the prior four calendar quarters.”

F. The defined term “Construction/Renovation” is deleted and replaced with:

““Construction/Renovation” means the Borrowing Group’s Share of any New Construction or any substantial rehabilitation, redevelopment, renovation and/or expansion of any multi-family property which, in the case of rehabilitation, redevelopment, renovation or expansion, involves the repositioning or upgrading of such multi-family property with respect to comparable multi-family properties located in the proximate geographic area, excluding any Moderate Redevelopment. The Borrowing Group’s Share of Properties under Construction/Renovation as of the Closing Date are listed on Schedule 1.01C attached hereto.”

G. The defined term “Default Rate” is deleted and replaced with:

““Default Rate” means (a) when used with respect to Obligations other than Letter of Credit Fees and Revolving Loans, an interest rate equal to (i) the Base Rate plus (ii) the Applicable Term Rate, if any, applicable to Base Rate Loans plus (iii) 3% per annum; provided, however, that with respect to a Eurodollar Rate Loan that is a Term B Loan, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Term Rate) otherwise applicable to such Loan plus 3% per annum, (b) when used with respect to Obligations other than Letter of Credit Fees and Term Loans, an interest rate equal to (i) the Applicable Revolving Base Rate plus (ii) the highest Applicable Revolving Rate (regardless of the then applicable Leverage Ratio), if any, applicable to Base Rate Loans that are Revolving Loans plus (iii) 3% per annum; provided, however, that with respect to a Eurodollar Rate Loan that is a Revolving Loan, the Default Rate shall be an interest rate equal to the highest Applicable Revolving Rate (regardless of the then applicable Leverage Ratio) plus 3% per annum and (c) when used with respect to Letter of Credit Fees, a rate equal to the Applicable Revolving Rate plus 3% per annum.”

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H. The defined term “EBITDA” is deleted and replaced with:

““EBITDA” means, for any period and for any Person, an amount equal to such Person’s Net Income for such period plus (a) the following, to the extent deducted in calculating such Net Income: (i) such Person’s Interest Expense plus other costs related to amortization of fees and expenses relating to the issuance of indebtedness for such period, (ii) the provision for Federal, state and local income taxes payable by such Person for such period, (iii) such Person’s depreciation and amortization expense for such period, (iv) other non-cash expenses of such Person reducing such Net Income for such period which do not represent a cash item in such period or any future period and (v) restructuring, severance, reserves or similar charges in an aggregate amount not to exceed $22,800,000 for any such period which includes the fiscal quarter commenced on October 1, 2008 and minus (b) the following to the extent included in calculating such Net Income: (i) Federal, state and local income tax credits of the Person for such period and (ii) all non-cash items increasing such Person’s Net Income for such period, excluding non-cash items for which cash was received in a prior period or will be received in a future period.”

I. The defined term “Eurodollar Rate Loan” is deleted and replaced with:

““Eurodollar Rate Loan” means a Committed Loan that bears interest at a rate based on the Eurodollar Rate or the Applicable Revolving Eurodollar Rate.”

J. The defined term “Fixed Charges” is deleted and replaced with:

““Fixed Charges” means, for any period, the sum of (i) Total Interest Expense for such period, plus (ii) Total Scheduled Amortization for such period (without double counting amounts funded with reserve accounts or sinking funds if already taken into account in determining Fixed Charges for such period or any prior period), plus (iii) dividends accrued (whether or not declared or payable) on any shares of preferred Stock and/or preferred Partnership Units of the Borrowers or any of their Subsidiaries outstanding during such period, which preferred securities are owned at any time during such period by Persons other than the Borrower and their Subsidiaries.”

K. The defined term “Funded Indebtedness” is deleted and replaced with:

““Funded Indebtedness” means, as of any date of determination, for any Person, the sum of (a) the outstanding principal amount of all obligations, whether current or long-term, for borrowed money (including Obligations hereunder) and all obligations evidenced by bonds, debentures, notes, loan agreements or other similar instruments (other than surety bonds and bonds supporting utility deposits or other comparable security deposits), (b) all purchase money Indebtedness, (c) all direct obligations arising under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, and similar instruments, (d) all obligations in respect of the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business), (e) Attributable Indebtedness in respect of capital lease obligations, (f) without duplication, all Guarantees with respect to outstanding Indebtedness of the types specified in clauses (a) through (e) above, and (g) all Indebtedness of the types referred to in clauses (a) through (f) above of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person or its Subsidiary is a general partner or joint venturer with liability for joint venture obligations, unless such Indebtedness is expressly made not Recourse to the Person or such Subsidiary; provided, however, that solely for purposes of Sections 7.03(g) and 7.11 and the definitions relating to calculations of financial covenants contained therein and for purposes of determining the Applicable Revolving Rate, “Funded Indebtedness” shall exclude Intra-Company Debt, deferred income taxes, security deposits, accounts payable and accrued liabilities and any prepaid rent (as such terms are defined under GAAP).”

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L. The defined term “Funds From Operations” is deleted and replaced with:

““Funds From Operations” means, with respect to Borrowers and their Subsidiaries on a consolidated basis, net income calculated in accordance with GAAP, excluding gains or losses from debt restructuring and sales of property, plus depreciation and amortization (excluding amortization of financing costs), and after adjustments for unconsolidated partnerships and joint ventures (with adjustments for unconsolidated partnerships and joint ventures calculated to reflect funds from operations on the same basis) and the payment of dividends on preferred Stock, as interpreted by the National Association of Real Estate Investment Trusts in its April 1, 2002, White Paper; provided, however, the following shall be excluded when calculating “Funds From Operations”: (i) non-cash adjustments for preferred Stock issuance costs, (ii) non-cash adjustments for loan amortization costs, and (iii) non-cash adjustments for impairment losses on real estate development assets, net of any tax benefit.”

M. The defined term “Gross Asset Value” is deleted and replaced with:

““Gross Asset Value” means, as of any date of determination and without double counting any item, the sum of the Borrowing Group’s Share of the following:

(i) Cash (including Restricted Cash but excluding any Cash held in funds for Capital Expenditures and actually deducted in the determination of Capital Expenditure Reserve as provided in the definition thereof), funds held in sinking funds or interest reserves and Cash held in escrow in connection with property exchanges under Section 1031 of the Code, and Cash Equivalents;

(ii) Notes Receivable valued at net realizable value as of such date of determination in accordance with GAAP;

(iii) with respect to all real estate assets wholly or partially owned by such Person(s) throughout the most recent four calendar quarters ending on or prior to such date of determination (other than Development Assets), the Adjusted Total NOI attributable to such real estate assets for such four quarter period divided by the Applicable Capitalization Rate;

(iv) with respect to all real estate assets wholly or partially owned on such date of determination, but acquired less than four calendar quarters but at least one calendar quarter preceding such date of determination (other than Development Assets), the Adjusted Total NOI attributable to such real estate assets for any period that such Person(s) owned such assets measured on an annualized basis and divided by the Applicable Capitalization Rate;

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(v) with respect to all real estate assets wholly or partially owned on such date of determination, but acquired less than one calendar quarter preceding such date of determination (other than Development Assets), 100% of the purchase price paid by such Person(s) for such assets;

(vi) 100% of the book value (determined in accordance with GAAP) of Development Assets and Unimproved Land owned as of such date of determination; and

(vii) an amount equal to 400% of the aggregate EBITDA attributable to, without duplication, property and asset management fees of the Borrowing Group for the four consecutive fiscal quarter period preceding such date of determination.”

N. The defined term “Indebtedness” is deleted and replaced with:

““Indebtedness” means, as to any Person, at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

(a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments (other than surety bonds and bonds supporting utility deposits or other comparable security deposits);

(b) all direct or contingent obligations of such Person arising under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties and similar instruments;

(c) net obligations of such Person under any Swap Contract;

(d) all obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business);

(e) indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;

(f) capital lease obligations of such Person;

(g) all obligations of such Person (other than Qualified Redemption Obligations) to purchase, redeem, retire, defease or otherwise make any payment in respect of any Equity Interest in such Person, valued, in the case of a redeemable preferred interest, at the liquidation preference plus accrued and unpaid dividends; and

(h) all Guarantees of such Person in respect of any of the foregoing.

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For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer with liability for joint venture obligations, unless such Indebtedness is expressly made non-recourse to such Person. The amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date. The amount of any capital lease as of any date shall be deemed to be the amount of Attributable Indebtedness in respect thereof as of such date. Solely for purposes of Sections 7.03(g) and 7.11 and the definitions relating to calculations of financial covenants contained therein and for purposes of determining the Applicable Revolving Rate, “Indebtedness” shall exclude Intra-Company Debt, deferred income taxes, security deposits, accounts payable and accrued liabilities and any prepaid rent (as such terms are defined under GAAP).”

O. The defined term “L/C Issuer” is deleted and replaced with:

““L/C Issuer” means (a) Bank of America, in its capacity as issuer of Letters of Credit issued by it hereunder, together with its successors in such capacity or (b) any other Lender or Lenders selected by the Borrowers and reasonably satisfactory to the Administrative Agent, in its capacity as issuer of Letters of Credit issued by such Lender hereunder, together with its successors in such capacity; provided that under no circumstances shall there be more than three L/C Issuers at any time.”

P. The defined term “Letter of Credit Sublimit” is deleted and replaced with:

““Letter of Credit Sublimit” means an amount equal to $100,000,000. The Letter of Credit Sublimit is part of, and not in addition to, the Aggregate Commitments.”

Q. The defined term “Qualified Redemption Obligations” is deleted and replaced with:

““Qualified Redemption Obligations” means, (i) in the case of AIMCO, the obligation of AIMCO to acquire or redeem issued Partnership Units which obligation AIMCO may elect to satisfy with shares of common Stock of the REIT and (ii) any obligation of a Person to redeem or repurchase an Equity Interest in such Person either (a) upon the happening of a change of control or other conditional event which is not reasonably likely to occur and which condition is set forth in the applicable securities and which event has in fact not occurred prior to the date of determination hereunder, or (b) at the holder’s option (except following or as a result of circumstances described in clause (a) above) only after the date which is one year after the Maturity Date or (c) at any time on or subsequent to the one year anniversary of the Maturity Date. In all events, “Qualified Redemption Obligations” include all preferred Equity Interests which are convertible only into common Stock of the REIT.”

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R. The defined term “Recourse” is deleted and replaced with:

““Recourse” means, with respect to any Indebtedness or Guarantee of any Person, that such Indebtedness or Guarantee is recourse to the general assets and/or properties of such Person (except as provided below); provided, however, that with respect to Indebtedness secured by real property which is characterized as “nonrecourse” or which is only Recourse to the real property of the Person except for limitations to the “nonrecourse” nature of the obligation or Indebtedness or Guarantees which are recourse to a Person or such Person’s assets and/or properties only upon the occurrence of certain events such as those set forth in (a) through (k) below, such Indebtedness or Guarantees shall only be deemed “Recourse” if and to the extent the nonrecourse exceptions (if any) are for the Person’s liability for the following under the applicable loan documentation and any of the events described in clauses (a) through (k) have occurred and the lender or holder of such Indebtedness or Guarantee has given written notice of the occurrence thereof: (a) fraud, waste, material misrepresentation, or willful misconduct; (b) indemnification with respect to environmental matters or failure to comply with Environmental Laws; (c) failure to maintain required insurance policies; (d) misapplication of insurance proceeds, condemnation awards and tenant security deposits; (e) breach of covenants relating to unpermitted transfers or encumbrances of real property or other collateral; (f) misappropriation or misapplication of property income; (g) breach of covenants relating to unpermitted transfers of interests in a Person; (h) failure to deliver books and records; (i) failure to pay transfer fees or charges; (j) bankruptcy filings or (k) other matters similar to those set forth in clauses (a) through (j) above or otherwise constituting customary exceptions for nonrecourse financings. An obligation of a Person that is not Recourse to the general assets and/or properties of such Person shall not be considered a “Recourse” obligation; an obligation of a Person that is contingent upon the occurrence of certain events shall not be considered a “Recourse” obligation unless any of the events or circumstances described in clauses (a) through (k) above have occurred and the lender or holder of such Indebtedness or Guarantee has given written notice of the occurrence of such events (in which case the amount of such obligation shall be limited to reasonably anticipated liability resulting from the occurrence of such events or circumstances). Indebtedness of a Single Purpose Entity secured by that Single Purpose Entity’s assets shall not be considered a “Recourse” obligation of such Single Purpose Entity.”

S. The defined term “Recourse Indebtedness” is deleted and replaced with:

““Recourse Indebtedness” means that portion of Total Funded Indebtedness in which the Recourse of the applicable lender or lenders to the obligor for non-payment is not limited to such lender’s Lien on an asset or assets, including any guarantee of payment by a member of the Borrowing Group to the extent such guarantee is Recourse to such Borrowing Group member but in any event excluding any Indebtedness or Guarantees which are not Recourse at the applicable date of determination. “Recourse Indebtedness” shall include any Indebtedness consisting of preferred Stock or preferred Partnership Units which are not Qualified Redemption Obligations but are otherwise mandatorily redeemable or redeemable at the option of the holder thereof. If a Person is a Single Purpose Entity which owns a real property asset and has Indebtedness which is not limited in recourse to that real property asset, such Indebtedness shall not be considered “Recourse Indebtedness”, provided no other member of the Borrowing Group has guaranteed such Indebtedness on a Recourse basis as of the applicable date of determination.”

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T. The defined term “Revolving Commitment” is deleted and replaced with:

““Revolving Commitment” means, as to each Revolving Lender, its obligation to (a) make Revolving Loans to the Borrowers pursuant to Section 2.01, (b) purchase participations in L/C Obligations, and (c) purchase participations in Swing Line Loans, in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Revolving Lender’s name on Schedule 2.15(d) or in the Assignment and Assumption pursuant to which such Revolving Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement. The aggregate Revolving Commitment shall not exceed $180,000,000, unless increased pursuant to Section 2.15.”

U. The defined term “Revolving Commitment Termination Date” is deleted and replaced with:

““Revolving Commitment Termination Date” means the later of (a) May 1, 2011 and (b) if the Existing Revolving Commitment Termination Date is extended pursuant to Section 2.14, such extended Existing Revolving Commitment Termination Date as determined pursuant to such Section 2.14.”

V. The defined term “Swingline Sublimit” is deleted and replaced with:

““Swing Line Sublimit” means an amount equal to $50,000,000. The Swing Line Sublimit is part of, and not in addition to, the Revolving Commitments.”

W. The defined term “Threshold Amount” is deleted and replaced with:

““Threshold Amount” means (a) with respect to Indebtedness that is not Recourse Indebtedness, $250,000,000 individually or in the aggregate, and (b) with respect to Indebtedness which is Recourse Indebtedness, $35,000,000 individually or in the aggregate; provided that solely for purposes of determining the Threshold Amount, Indebtedness relating to NAPICO assets shall be calculated as equal to Borrowing Group’s Share thereof to the extent that such share (x) is an administrative non-controlling interest, and (y) amounts to less than 5% of the interest in any such NAPICO asset.”

X. The defined term “Total Funded Indebtedness” is deleted and replaced with:

““Total Funded Indebtedness” means, for any period and without double counting, the sum of the Borrowing Group’s Share of (a) Funded Indebtedness, minus (b) its share of any debt service reserves or sinking funds with respect to such Funded Indebtedness.”

Y. The defined term “Total Secured Indebtedness” is deleted and replaced with:

““Total Secured Indebtedness” means, as of any date of determination and without double counting any item, the aggregate amount of Total Funded Indebtedness that is secured by a Lien (excluding Indebtedness secured solely by cash in debt service reserves or sinking funds), plus any Total Funded Indebtedness described in the last sentence of the definition of Recourse Indebtedness which is otherwise not secured by a Lien; provided, however, that the Obligations shall be excluded from the calculation of Total Secured Indebtedness.”

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Z. The defined term “Unfunded Pension Liability” is deleted and replaced with:

““Unfunded Pension Liability” means the excess of a Pension Plan’s benefit liabilities under Section 4001(a)(16) of ERISA, over the current value of that Pension Plan’s assets, determined in accordance with the assumptions used for funding the Pension Plan pursuant to Section 430 of the Code for the applicable plan year.”

AA. The following defined terms shall be deleted:

“Casden”

“Casden Acquisition”

“Contingent Acquisition Note”

“Investment Affiliate”

“Mirror Notes”

“Mirror Notes Stock”

“NAPICO Notes”

“Real Estate Company”

“REAL Litigation”

“REAL Litigation Settlement Agreement”

“REAL Litigation Guarantee”

BB. The following defined terms in Section 1.01 shall be inserted in the correct alphabetical location:

““Activation Notice” means a written notice delivered by the Borrowers to the Administrative Agent on or before May 1, 2009 stating that, pursuant to Section 2.15(d), the New Revolving Commitments (as defined in Section 2.15(d)) shall become effective.”

““Applicable Capitalization Rate” means 8.00%, subject to adjustment to an amount not to exceed 8.50% in accordance with Section 2.14(a).”

““Applicable Revolving Base Rate” means for any day a fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate plus 1/2 of 1%, (b) the Eurodollar Rate applicable for a one month Interest Period plus 1.25%, and (c) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate.” The “prime rate” is a rate set by Bank of America based upon various factors including Bank of America’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change.”

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““Applicable Revolving Eurodollar Rate” means, for any Interest Period with respect to a Eurodollar Rate Loan, the rate per annum equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as designated by the Administrative Agent from time to time) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, for Dollar deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period; provided, however, that the Applicable Revolving Eurodollar Rate shall never be less than the Eurodollar Rate Floor. If such rate is not available at such time for any reason, then the “Applicable Revolving Eurodollar Rate” for such Interest Period shall be the rate per annum determined by the Administrative Agent to be the rate at which deposits in Dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the Eurodollar Rate Loan being made, continued or converted by Bank of America (or such amount as determined by Administrative Agent) and with a term equivalent to such Interest Period would be offered by Bank of America’s London Branch to major banks in the London interbank eurodollar market at their request at approximately 4:00 p.m. (London time) two Business Days prior to the commencement of such Interest Period.”

““Eurodollar Rate Floor” means 2.00%.”

““Existing Revolving Commitment Termination” has the meaning specified in Section 2.15(d).”

““Fronting Fee” has the meaning specified in Section 2.03(j).”

““Impacted Lender” means a Revolving Lender (a) that is a Defaulting Lender, or (b) as to which (i) the L/C Issuer has a good faith belief that such Revolving Lender has defaulted in fulfilling its obligations under one or more other syndicated credit facilities (and in such other credit facilities such Revolving Lender has been treated as a defaulting or otherwise impacted lender), or (ii) an entity that Controls such Revolving Lender has been deemed insolvent or become subject to a bankruptcy or other similar proceeding. No Impacted Lender shall have any right to approve or disapprove any amendment, waiver or consent under this Agreement, except that the Commitment of such Impacted Lender may not be increased or extended without the consent of such Impacted Lender (subject to Section 2.14 and 2.15).”

““Non-Consenting Lender” means any Revolving Lender that does not provide consent in any circumstance where the consent of all Revolving Lenders is required, but only the consent of a majority of Revolving Lenders is obtained.”

"'Sixth Amendment’ means the Sixth Amendment to this Agreement, dated as of May 1, 2009, among the Borrowers, the LC Issuer, the Administrative Agent and the Lenders party thereto.”

"'Sixth Amendment Effective Date’ means the date all of the conditions to effectiveness set forth in Section 2 of the Sixth Amendment are satisfied.”

““Term B Loan Early Payment Date” means February 1, 2011.”

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CC. Section 2.02(d) is amended by adding the phrase “or the Applicable Revolving Base Rate” immediately after the reference to “Base Rate” set forth therein.

DD. Section 2.03(a)(ii)(B) is deleted and replaced with:

“(B) the expiry date of such requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless all Revolving Lenders and L/C Issuer have approved such expiry date; provided, however, that without such approval the expiry date of a Letter of Credit may be extended to up to 12 months after the Revolving Commitment Termination Date then in effect if (x) Borrowers have Cash Collateralized the then Outstanding Amount of the applicable L/C Obligations, or (y) subject to the approval of the L/C Issuer in its sole discretion, if the Revolving Commitments are replaced with a new revolving facility, “back to back” letters of credit with respect to such Letter of Credit have been issued. If the Revolving Commitment Termination Date then in effect is extended in accordance with this Agreement, any applicable Cash Collateral under clause (x) above would be released by the L/C Issuer with respect to any Letter of Credit with an expiry date prior to the Revolving Commitment Termination Date thereafter in effect.”

EE. Section 2.03(a)(iii)(E) is deleted and replaced with:

“(E) a default of any Revolving Lender’s obligations to fund under Section 2.03(c) exists or any Revolving Lender is at such time an Impacted Lender hereunder, unless the L/C Issuer has entered into arrangements mutually satisfactory to the L/C Issuer, Administrative Agent and Borrowers to eliminate the L/C Issuer’s risk with respect to such Revolving Lender (which arrangements may include the providing of cash collateral in relation to the Borrowers’ obligations to pay any Unreimbursed Amounts in respect of such defaulting Revolving Lender’s or Impacted Lender’s participation in such Letter of Credit).”

FF. Section 2.03(j) is deleted and replaced with:

“(j) Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer. The Borrowers shall pay directly to the L/C Issuer for its own account a fronting fee (the “Fronting Fee”) with respect to each standby Letter of Credit, in an amount equal to 0.125% per annum, computed on the daily amount available to be drawn under such Letter of Credit on a quarterly basis in arrears, and due and payable on the first Business Day after the end of each March, June, September and December, commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand. For purposes of computing the daily amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.06. In addition, the Borrowers shall pay directly to the L/C Issuer for its own account the customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of the L/C Issuer relating to letters of credit as from time to time in effect. Such Fronting Fee, customary fees and standard costs and charges are due and payable on demand and are nonrefundable.”

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GG. Section 2.06 is deleted and replaced with:

“Termination or Reduction of Revolving Commitments. The Borrowers may, upon notice to the Administrative Agent, terminate the Revolving Commitments, or from time to time permanently reduce the Revolving Commitments; provided that the Revolving Commitments may not be reduced below $100,000,000 (except in connection with a termination of the Revolving Commitments and payment in full of the Obligations thereunder) without the consent of the Administrative Agent and the Syndication Agent; and, provided further (i) any such notice shall be received by the Administrative Agent not later than 11:00 a.m. five Business Days prior to the date of termination or reduction, (ii) any such partial reduction shall be in an aggregate amount of $10,000,000 or any whole multiple of $1,000,000 in excess thereof, (iii) the Borrowers shall not terminate or reduce the Revolving Commitments if, after giving effect thereto and to any concurrent prepayments hereunder, the Total Revolving Outstandings would exceed the Revolving Commitments, and (iv) if, after giving effect to any reduction of the Revolving Commitments, the Letter of Credit Sublimit or the Swing Line Sublimit exceeds the amount of the Revolving Commitments, such Sublimit shall be automatically reduced by the amount of such excess. The Administrative Agent will promptly notify the Revolving Lenders of any such notice of termination or reduction of the Revolving Commitments. Any reduction of the Revolving Commitments shall be applied to the Revolving Commitment of each Revolving Lender according to its Applicable Percentage. All fees accrued pursuant to Section 2.09(a) until the effective date of any termination of the Revolving Commitments shall be paid on the effective date of such termination.”

HH. Section 2.07(b) is deleted and replaced with:

“(b) The Borrowers shall repay to the Swing Line Lender each Swing Line Loan on the earlier to occur of (i) the date five Business Days after such Swing Loan is made and (ii) the Revolving Commitment Termination Date.”

II. Section 2.08(a) is deleted and replaced with:

“(a) Subject to the provisions of subsection (b) below, (i) each Eurodollar Rate Loan that is a Revolving Loan shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the Applicable Revolving Eurodollar Rate for such Interest Period plus the Applicable Revolving Rate; (ii) each Eurodollar Rate Loan that is a portion of the Term B Loan shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the Eurodollar Rate for such Interest Period plus the Applicable Term Rate; (iii) each Base Rate Loan that is a Revolving Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Applicable Revolving Base Rate plus the Applicable Revolving Rate; (iv) each Base Rate Loan that is a portion of the Term B Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Term Rate; and (v) each Swing Line Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Applicable Revolving Base Rate plus the Applicable Revolving Rate.”

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JJ. Section 2.09(a) is deleted and replaced with:

“(a) Unused Fee. The Borrowers shall pay to the Administrative Agent for the account of each Revolving Lender (other than Impacted Lenders) ratably in proportion to their Revolving Commitment, an unused fee equal to the Applicable Unused Fee. The Applicable Unused Fee shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December, commencing with the first such date to occur after the Closing Date, and on the Revolving Commitment Termination Date, as may be extended pursuant to Section 2.14. The Applicable Unused Fee shall be calculated quarterly in arrears. The Applicable Unused Fee shall accrue at all times following the Closing Date while Revolving Commitments are in effect, including at any time during which one or more of the conditions in Section 4.02 is not met.”

KK. The first sentence of Section 2.10 is deleted and replaced with:

“All computations of interest for Base Rate Loans shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed.”

LL. A new sentence is added to the end of Section 2.14(a) as follows:

“Notwithstanding any other provision of this Agreement, if Borrower elects to extend the Revolving Commitments under this Section 2.14(a), then the Required Lenders may (but shall not be obligated to), on a one time basis, adjust the Applicable Capitalization Rate to a maximum of 8.50% by notice to Borrowers no later than thirty (30) calendar days following the Borrower’s delivery of the extension notice referred to above, such adjusted Applicable Capitalization Rate to be effective on and after the Existing Revolving Commitment Termination Date.”

MM. Section 2.14(b)(iii) is deleted and replaced with:

“(iii) the Borrowers pay the Revolving Lenders an extension fee on the Existing Revolving Commitment Termination Date in an amount equal to the product of (i) 0.45%, multiplied by (ii) the Revolving Commitments then in effect at the time of the extension; and”

NN. A new Section 2.14(b)(iv) is added as follows:

“(iv) The Term B Loan shall have been repaid in full on or before the Term B Loan Early Payment Date.”

OO. Sections 2.15(a)(i) and (ii) are deleted and replaced with:

“(a) Increase in Commitments.

(i) Request for Increase. Provided there exists no Default or Event of Default, upon notice to the Administrative Agent (which shall promptly notify the Lenders), the Borrowers may request an increase in Revolving Commitments of up to $320,000,000, which increase may be allocated (x) to the then existing Revolving Commitments, (y) as a new revolving tranche having the same terms (excluding pricing, commitment fee amounts, a later dated final maturity, other terms relating to the separate nature of such tranche and/or separate letter of credit or swingline subfacilities) then applicable to the Revolving Commitments then in effect, or (z) any combination thereof satisfactory to Administrative Agent and the Revolving Lenders and/or Eligible Assignees (as applicable) providing such increase; provided that, after giving effect to such

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increase, the Revolving Commitments (including any new revolving tranche) shall not exceed $500,000,000 in the aggregate, and that the Aggregate Commitments shall not exceed $850,000,000; provided further that any such request for an increase shall be in a minimum amount of $20,000,000. At the time of sending such notice, the Borrowers (in consultation with the Administrative Agent) shall specify the time period within which each Revolving Lender is requested to respond (which shall in no event be less than ten Business Days from the date of delivery of such notice to the Revolving Lenders unless Administrative Agent consents in writing to a shorter time period). Such notice shall indicate the proposed Applicable Revolving Rate (or other applicable interest rate margins) for such new Revolving Commitments or revolving tranche. In the event new Revolving Commitments are to be provided, no consent of any Lender shall be required in connection with the issuance of any such new Revolving Commitments, regardless of if the Applicable Revolving Rate (or other applicable interest rate margins) for such new Revolving Commitments or Revolving Loans is less than or greater than that for any other Revolving Commitments or Revolving Loans hereunder.

(ii) Revolving Lender Elections to Increase. Each Revolving Lender shall notify the Administrative Agent within such time period whether or not it agrees to increase its Commitment or to provide new Commitments and, if so, whether by an amount equal to, greater than, or less than its Applicable Percentage of such requested increase. Any Revolving Lender not responding within such time period shall be deemed to have declined to increase its Commitment or to provide new Commitments.”

PP. Section 2.15(a)(v) is amended by adding the following to the end of such section:

“The Administrative Agent and the Borrowers may, without the consent of any Lenders, effect such amendments to this Agreement and the other Loan Documents as may be necessary or appropriate, in the opinion of the Administrative Agent and the Borrowers, to effect the increase in Revolving Commitments pursuant to this Section 2.15(a), including, without limitation, establishing pricing, commitment fees and the maturity of any new revolving commitments, incorporation of a new revolving tranche and amendments in respect of borrowing and prepayment procedures for any new revolving tranche.”

QQ. A new Section 2.15(d) is added as follows:

“(d) New Revolving Commitments. Upon delivery of an Activation Notice to the Administrative Agent, on or after the Sixth Amendment Effective Date but on or before May 1, 2009 (such date, the “New Revolving Commitment Effective Date”), each of the Persons identified on Schedule 2.15(d) severally agrees to make Revolving Commitments in the amount set forth on Schedule 2.15(d) opposite such Person’s name in the column “New Revolving Commitments” (such Revolving Commitments, the “New Revolving Commitments”, which New Revolving Commitments shall be in replacement of all outstanding Revolving Commitments in effect immediately prior to the delivery of the Activation Notice; such outstanding Revolving Commitments are set forth on Schedule 2.15(d) in the column “Existing Revolving Commitments” (such Revolving Commitments, the “Existing Revolving Commitments”)). The Borrowers shall prepay any Revolving Loans outstanding under the Existing Revolving

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Commitments on the New Revolving Commitment Effective Date (and pay any additional amounts required pursuant to Section 3.05) and all Existing Revolving Commitments shall be terminated on the New Revolving Commitment Effective Date, concurrently with the effectiveness of the New Revolving Commitments. On or before the New Revolving Commitment Effective Date, Borrowers shall deliver to Administrative Agent a Revolving Note executed by the Borrowers in favor of each Revolving Lender with a New Revolving Commitment as set forth on Schedule 2.15(d) (to the extent requested by each such Revolving Lender). Notwithstanding any provisions of this Agreement to the contrary, the Borrowers may borrow from the Revolving Lenders providing such New Revolving Commitments in order to fund such prepayment and termination. All Revolving Loans made pursuant to this subsection shall be subject to the procedures set forth in Section 2.01, provided, however, that provisions under this Agreement relating to minimum borrowing amounts, minimum prepayment amounts, notice of borrowing and notice of prepayments or commitment terminations shall not be applicable in connection with the effectiveness of the New Revolving Commitments and such repayment and such termination of the Existing Revolving Commitments. All Swing Line Loans outstanding immediately prior to the delivery of the Activation Notice shall automatically become Swing Line Loans under the New Revolving Commitments and no prepayment of such outstanding Swing Line Loans shall be required on the New Revolving Commitment Effective Date. Upon delivery of the Activation Notice, the New Revolving Loan Commitments shall constitute Revolving Commitments under the Loan Documents. For avoidance of doubt, from and after the activation of the New Revolving Commitments, there shall be no borrowings under the Existing Revolving Commitments.”

RR. A new Section 2.15(e) is added as follows:

“(e) Effective on the New Revolving Commitment Effective Date, all Letters of Credit set forth on Schedule 2.15(e) shall be deemed to be newly issued Letters of Credit under the New Revolving Commitments.”

SS. Section 3.02 is amended by adding the phrase “or the Applicable Revolving Eurodollar Rate” immediately after the reference to “Eurodollar Rate” set forth therein.

TT. Section 3.03 is amended by adding the phrase “or the Applicable Revolving Eurodollar Rate” immediately after each reference to “Eurodollar Rate” set forth therein.

Section 3.05 is amended by adding the phrase “or the Applicable Revolving Eurodollar Rate” immediately after each reference to “Eurodollar Rate” set forth therein.

UU. Section 6.02(h) is deleted and replaced with:

“(h) concurrently with the delivery of the financial statements referred to in Sections 6.01(a) and (b), the REIT’s consolidated financial projections for the current and the succeeding three fiscal quarters, as prepared by the REIT’s Chief Financial Officer and in a format and with such detail as Administrative Agent may reasonably require.”

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VV. Section 7.01(p) is deleted and replaced with:

“(p) Intentionally Omitted;”

WW. Section 7.02(e) is deleted and replaced with:

“(e) Investments in Non-Core Assets, Development Assets and Non-Controlled Entities, provided that at all times (i) the aggregate book value of the Borrowing Group’s Share of Investments in Non-Core Assets, (ii) the aggregate book value of the Borrowing Group’s Share of Investments in Development Assets, and (iii) the aggregate net book value (valued at the Borrowing Group’s Share of the book value less depreciation and associated Indebtedness) of the Borrowing Group’s Share of Investments in Non-Controlled Entities, taken together, does not exceed 20% of the Gross Asset Value then in effect;”

XX. Sections 7.02(f) and 7.02(g) are deleted and replaced with:

“(f) Intentionally Omitted;

(g) Intentionally Omitted;”

YY. Section 7.02(m) is deleted and replaced with:

“(m) Investments in the ordinary course of the Borrowers and their Subsidiaries’ business not otherwise permitted under this Section 7.02, in an aggregate amount at any time outstanding not to exceed $10,000,000 (it being understood that Investments in real estate secured mortgages shall not be considered “in the ordinary course” of the Borrowers and their Subsidiaries’ business); and”

ZZ. Section 7.03(m) is deleted and replaced with:

“(m) Intentionally Omitted;”

AAA. Section 7.06(c) is deleted and replaced with:

“(c) the purchase, redemption or other acquisition of any Equity Interests of the Borrowers or any Subsidiary; provided, that, at the time or as a result thereof there shall exist no Default or Event of Default, and, provided further, that (x) for so long as the Term B Loan (or any portion thereof) is outstanding, Borrowers may apply an amount not to exceed 50% of Net Disposition Proceeds toward the purchase, redemption or other acquisition of REIT common stock if an equal amount is applied to repay the Term B Loan, and, (y) if the Term B Loan has been repaid in full, there shall be no restriction on the purchase, redemption or other acquisition of REIT common stock. Notwithstanding the foregoing, in no event may the Revolving Commitment be used to fund the purchase, redemption or other acquisition of REIT common stock, except to the limited extent that if Net Disposition Proceeds which otherwise would be permitted to be used to purchase, redeem or otherwise acquire such common stock and are designated to be so used but for an interim period are instead used to pay down the Revolving Loans, then an equal amount of the Revolving Commitment may be borrowed (in accordance with this Agreement) to purchase, redeem or otherwise acquire such common stock for a period ending 60 days after such repayment.”

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BBB. Section 7.08(g) is deleted and replaced with:

“(g) intentionally omitted.”

CCC. Section 7.11 is deleted and replaced with:

“7.11 Financial Covenants.

(a) Permit the Fixed Charge Coverage Ratio to be less than 1.30:1.00;

(b) Permit the Debt Service Coverage Ratio to be less than 1.50:1.00;

(c) Permit the Secured Indebtedness Ratio to exceed 0.60:1.00;

(d) Permit the Leverage Ratio to exceed 0.65:1.00;

(e) Permit Adjusted Tangible Net Worth to be less than the sum of (x) 85% of Adjusted Tangible Net Worth as of the Sixth Amendment Effective Date, plus (y) 85% of the net issuance proceeds of all issuances to Persons other than the Borrowers or Subsidiaries of Stock or Partnership Units from and after the Sixth Amendment Effective Date;

(f) Permit the aggregate principal amount of the Borrowing Group’s Share of all cross collateralized or cross-defaulted Indebtedness to exceed 15% of Total Funded Indebtedness;

(g) Permit the Variable Rate Debt Ratio to exceed 0.35:1.00;

(h) Permit the aggregate outstanding principal amount of the Borrowing Group’s Share of Aggregate Recourse Indebtedness, exclusive of the Term B Loan (but including any refinancing Indebtedness with respect to the Term B Loan) and the Revolving Commitments, to exceed $100,000,000; or

(i) Permit the aggregate outstanding principal amount (including paid-in-kind or other non current cash pay interest which is added to principal) of Mezzanine Indebtedness to exceed $20,000,000 at any time. The Mezzanine Indebtedness existing as of the Sixth Amendment Effective Date is set forth on Schedule 7.11(i) hereto.

The Financial Covenants set forth in this Section 7.11 shall be measured as of the last day of each fiscal quarter.”

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DDD. The introductory paragraph of Section 10.13 is deleted and replaced with:

“10.13 Replacement of Lenders. If any Lender requests compensation under Section 3.04, if the Borrowers are required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, if any Lender is a Defaulting Lender, if any Revolving Lender is an Impacted Lender or a Non-Consenting Lender (so long as no Default or Event of Default has occurred and is continuing), or if any other circumstance exists hereunder that gives the Borrowers the right to replace a Lender as a party hereto, then the Borrowers may, at their sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 10.06 except as provided in this Section 10.13), all of its interests, rights and obligations under this Agreement and the related Loan Documents (or all of its Revolving Loans and Revolving Commitments if so requested by the Borrower) to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that:”

EEE. A new paragraph is added at the end of Section 10.13 as follows:

“Without limiting the foregoing, Borrowers may, subject to the consent and approval of Administrative Agent in its sole discretion and notwithstanding anything to the contrary in Section 2.06, terminate the Revolving Commitment of any Defaulting Lender with no outstanding Revolving Loans, provided that if Administrative Agent grants such consent in its sole discretion, Borrowers shall Cash Collateralize such Defaulting Lender’s pro rata portion (if any) of the Outstanding Amount of any then applicable L/C Obligations in a manner satisfactory to L/C Issuer and Administrative Agent.”

FFF. A new Schedule 2.15(d) in the form attached hereto is added to the Agreement.

GGG. A new Schedule 2.15(e) in the form attached hereto is added to the Agreement.

HHH. Schedule 7.11(i) is deleted and replaced with the revised Schedule 7.11(i) in the form attached hereto.

Section 2. CONDITIONS TO EFFECTIVENESS

2.1 Subject to Sections 2.2 and 2.3 below, this Amendment shall become effective as of the Sixth Amendment Effective Date, at such time that all of the following conditions are satisfied:

A. The Administrative Agent shall have received counterparts of this Amendment, duly executed and delivered on behalf of each of (a) the Borrowers, (b) the Administrative Agent, (c) each Revolving Lender with a New Revolving Commitment and (d) the Required Lenders (or the Required Lenders shall have consented to the execution of the Amendment by providing their counterpart signatures hereto or their consent hereto to the Administrative Agent);

B. Guarantors and the Borrowers and Subsidiaries of the Borrowers party to the Pledge Agreements as “Pledgors” (the “Pledgors”) shall have executed this Amendment with respect to Section 5 and such other documents reasonably required by Administrative Agent;

C. Administrative Agent and its counsel shall have received executed resolutions from Borrowers authorizing the entry into and performance of this Amendment and the Amended Agreement as amended, all in form and substance satisfactory to Administrative Agent and its counsel;

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D. Administrative Agent shall have received favorable opinions of (i) Skadden, Arps, Slate, Meagher & Flom LLP, and (ii) DLA Piper LLP (US), in each case addressed to the Administrative Agent and each Lender, as to such matters concerning the Loan Parties and the Loan Documents as Administrative Agent may reasonably request;

E. Any fees required to be paid on or before the Sixth Amendment Effective Date shall have been paid; and

F. Borrowers and the Pledgors shall have delivered such other assurances, certificates, documents, consents or opinions as the Administrative Agent, the L/C Issuer, the Swing Line Lender or the Required Lenders reasonably may require.

2.2 Notwithstanding the foregoing, the amendments to the terms (i) “Applicable Revolving Base Rate”, (ii) “Applicable Revolving Eurodollar Rate”, (iii) “Applicable Revolving Rate”, (iv) “Applicable Unused Fee”, (v) “Default Rate”, (vi) “Revolving Commitment”, (vii) “Revolving Commitment Termination Date” and (viii) “Eurodollar Rate Floor” set forth in Section 1 of this Amendment shall not become effective until the Borrowers shall have delivered an Activation Notice to the Administrative Agent. Upon delivery of an Activation Notice to the Administrative Agent, on or after the Sixth Amendment Effective Date, the amendments set forth in the preceding sentence shall immediately become effective.

2.3 Notwithstanding any other provision of this Amendment or the Amended Agreement to the contrary, and without any further action by any party, if, on or before May 1, 2009, the Borrowers do not deliver an Activation Notice, terminate the Existing Revolving Commitments and replace the same with the New Revolving Commitments all in accordance with new Section 2.15(d) set forth in Section 1 hereof, then this Amendment shall immediately cease to be effective as if the same had never been made, and Borrowers agree to execute and deliver to Administrative Agent such assurances, certificates or other documents reasonably requested by Administrative Agent in connection with the foregoing. For the avoidance of doubt, and notwithstanding any other provision of this Amendment or the Amended Agreement to the contrary, Borrowers acknowledge and agree that the extension fee equal to the product of (i) .20% multiplied by (ii) the aggregate Revolving Commitments then in effect (as provided pursuant to Section 2.14(b)(iii) of the Amended Agreement prior to taking into account the amendments to such Section set forth in Section 1 of this Amendment) shall be due and payable on May 1, 2009 if the Activation Notice is not delivered on or before such date.

Section 3. BORROWERS’ REPRESENTATIONS AND WARRANTIES

In order to induce the Lenders to consent to this Amendment and to amend the Amended Agreement in the manner provided herein, Borrowers represent and warrant to Administrative Agent and to each Lender that the following statements are true, correct and complete:

3.1 Corporate Power and Authority. Borrowers have all requisite power and authority to enter into this Amendment and any other agreements, guaranties or other operative documents to be delivered pursuant to this Amendment, to carry out the transactions contemplated by, and perform their obligations under, the Amended Agreement. Each of the Borrowers, Pledgors and Guarantors is in good standing in the respective states of their organization on the Sixth Amendment Effective Date;

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3.2 Authorization of Agreements. The execution and delivery of this Amendment and the performance of the Amended Agreement have been duly authorized by all necessary action on the part of Borrowers and the other parties delivering any of such documents, as the case may be.

3.3 No Default. After giving effect to this Amendment, no Default or Event of Default exists under the Amended Agreement as of the Sixth Amendment Effective Date. Further, after giving effect to this Amendment, no Default or Event of Default would result under the Amended Agreement from the consummation of this Amendment;

3.4 No Conflict. The execution, delivery and performance by Borrowers, Pledgors and Guarantors of this Amendment and the performance of the Amended Agreement by Borrowers, does not and will not (i) violate any provision of any applicable material law or any governmental rule or regulation applicable to Borrowers, Pledgors, Guarantors or any of their Subsidiaries except as could not reasonably be expected to have a Material Adverse Effect, the Organization Documents of Borrowers, Pledgors, Guarantors or any of their Subsidiaries or any order, judgment or decree of any court or other Governmental Authority binding on Borrowers, Pledgors, Guarantors or any of their Subsidiaries except as could not reasonably be expected to have a Material Adverse Effect, (ii) conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any Contractual Obligation of Borrowers, Pledgors, Guarantors or any of their Subsidiaries except as could not reasonably be expected to have a Material Adverse Effect, (iii) result in or require the creation or imposition of any Lien upon any of the properties or assets of Borrowers, Pledgors, Guarantors or any of their Subsidiaries not otherwise permitted by the Amended Agreement except as could not reasonably be expected to have a Material Adverse Effect, or (iv) require any approval of members or stockholders or any approval or consent of any Person under any Contractual Obligation of Borrowers, Pledgors, Guarantors or any of their Subsidiaries, except for such approvals or consents which have been or will be obtained on or before the Sixth Amendment Effective Date or except for such approvals or consents which, if not obtained, are not reasonably expected to result in a Material Adverse Effect;

3.5 Governmental Consents. The execution and delivery by Borrowers, Guarantors and Pledgors of this Amendment and the performance by Borrowers, Guarantors and Pledgors under the Amended Agreement does not and will not require any registration with, consent or approval of, or notice to, or other action to, with or by, any federal, state or other governmental authority or regulatory body, except for filings or recordings in respect of the Liens created pursuant to the Loan Documents and except as may be required, in connection with the disposition of any Collateral, by laws generally affecting the offering and sale of securities;

3.6 Binding Obligation. The Amended Agreement, as amended by this Amendment, has been duly executed and delivered by Borrowers and is enforceable against Borrowers, in accordance with its respective terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability; and

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3.7 Incorporation of Representations and Warranties From Amended Agreement. After giving effect to this Amendment, the representations and warranties contained in Article V of the Amended Agreement are and will be true, correct and complete in all material respects on and as of the Sixth Amendment Effective Date to the same extent as though made on and as of such date, except representations and warranties solely to the extent such representations and warranties specifically relate to an earlier date, in which case they were true, correct and complete in all material respects on and as of such earlier date.

Section 4. MISCELLANEOUS

4.1 Reference to and Effect on the Amended Agreement and the Other Loan Documents.

A. On and after the Sixth Amendment Effective Date, each reference in the Amended Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or words of like import referring to the Amended Agreement, and each reference in the other Loan Documents to the “Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit Agreement shall mean and be a reference to the Amended Agreement, as amended by this Amendment.

B. Except as specifically amended by this Amendment, the Amended Agreement and the other Loan Documents shall remain in full force and effect and are hereby ratified and confirmed.

C. The execution, delivery and performance of this Amendment shall not, except as expressly provided herein, constitute a waiver of any provision of, or operate as a waiver of any right, power or remedy of Administrative Agent or any Lender under, the Amended Agreement or any of the other Loan Documents.

4.2 Fees and Expenses. Borrowers acknowledge that all reasonable costs, fees and expenses incurred by Administrative Agent and its counsel with respect to this Amendment and the documents and transactions contemplated hereby shall be for the account of Borrowers. The Borrowers hereby agree to pay the reasonable fees, cost and expenses of Administrative Agent’s counsel in connection with this Amendment concurrently with or promptly but in no event later than 30 days after submission of an invoice with respect to such reasonable fees, costs and expenses.

4.3 Headings. Section and subsection headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose or be given any substantive effect.

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4.4 Counterparts; Effectiveness. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document. This Amendment shall become effective upon the execution of a counterpart hereof by each Borrower and Administrative Agent, and receipt by Borrowers and Administrative Agent of written, facsimile or telephonic notification of such execution and authorization of delivery thereof.

4.5 Entire Agreement. This Amendment embodies the entire agreement and understanding among the parties with respect to this amendment to the Amended Agreement, and supersedes all prior agreements and understandings, oral or written, relating thereto.

4.6 Governing Law. This Amendment shall be governed by, and construed in accordance with, the law of the State of California.

Section 5. ACKNOWLEDGEMENT AND CONSENT

A. Guarantors are party to that certain Continuing Guaranty (as amended from time to time), dated as of November 2, 2004, pursuant to which Guarantors have guarantied the Obligations. Pledgors are party to that certain Security Agreement (Securities) made by Borrowers (as amended from time to time) and Security Agreement (Securities) made by certain other Pledgors (as amended from time to time), dated as of November 2, 2004, pursuant to which Pledgors have pledged the Collateral as security for the Indebtedness (as defined in the applicable Pledge Agreement).

B. Each Guarantor and each Pledgor hereby acknowledges that it has reviewed the terms and provisions of the Amended Agreement and this Amendment and consents to the amendment of the Amended Agreement effected pursuant to this Amendment. Each Guarantor hereby confirms that each Guaranty to which it is a party or otherwise bound, and each Pledgor hereby confirms that the Pledge Agreement to which it is a party or otherwise bound, will continue to guaranty or secure, as the case may be, to the fullest extent possible the payment and performance of all of the “Guaranteed Obligations” (as defined in the applicable Guaranty) or the “Indebtedness” (as defined in the applicable Pledge Agreement), as the case may be, including without limitation the payment and performance of all such “Guaranteed Obligations” or “Indebtedness”, as the case may be, with respect to the Obligations of Borrowers now or hereafter existing under or in respect of the Amended Agreement (as amended hereby) and the Notes defined therein.

C. Each Guarantor acknowledges and agrees that any Guaranty to which it is a party or otherwise bound, and each Pledgor acknowledges and agrees that the Pledge Agreement to which it is a party or otherwise bound, shall continue in full force and effect and that all of its obligations thereunder shall be valid and enforceable and shall not be impaired or limited by the execution or effectiveness of this Amendment. Each Guarantor and each Pledgor represents and warrants that all representations and warranties contained in the Guaranty and/or the Pledge Agreement, as the case may be, to which it is a party or otherwise bound are true, correct and complete in all material respects on and as of the Sixth Amendment Effective Date to the same extent as though made on and as of that date, except to the extent such representations and warranties specifically relate to an earlier date, in which case they were true, correct and complete in all material respects on and as of such earlier date.

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D. Each Guarantor and each Pledgor (other than the Borrowers) acknowledges and agrees that (i) notwithstanding the conditions to effectiveness set forth in this Amendment, such Guarantor or such Pledgor, as the case may be, is not required by the terms of the Amended Agreement or any other Loan Document to consent to the amendments to the Amended Agreement effected pursuant to this Amendment and (ii) nothing in the Amended Agreement, this Amendment or any other Loan Document shall be deemed to require the consent of such Guarantor or such Pledgor to any future amendments to the Amended Agreement.

[Signatures on Next Page]

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of the day and year first written above.

BORROWERS:	APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation
	By:	/s/ Patti K. Fielding
		Patti K. Fielding
		Executive Vice President and Treasurer
	AIMCO PROPERTIES, L.P., a Delaware limited partnership
	By:	AIMCO-GP, INC.,
		a Delaware corporation
	Its:	General Partner

By:	/s/ Patti K. Fielding
	Patti K. Fielding
	Executive Vice President and Treasurer

AIMCO/BETHESDA HOLDINGS, INC., a Delaware corporation
By:	/s/ Patti K. Fielding
	Patti K. Fielding
	Executive Vice President and Treasurer

(Sixth Amendment to Amended and Restated Senior Secured Credit Agreement)

PLEDGORS (for purposes of Section 5 only):

APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation, as Pledgor
By:	/s/ Patti K. Fielding
	Patti K. Fielding
	Executive Vice President and Treasurer
AIMCO PROPERTIES, L.P., a Delaware limited partnership, as Pledgor
By:	AIMCO-GP, INC.,
	a Delaware corporation
Its:	General Partner

By:	/s/ Patti K. Fielding
	Patti K. Fielding
	Executive Vice President and Treasurer

AIMCO/BETHESDA HOLDINGS, INC., a Delaware corporation, as Pledgor
By:	/s/ Patti K. Fielding
	Patti K. Fielding
	Executive Vice President and Treasurer

(Sixth Amendment to Amended and Restated Senior Secured Credit Agreement)

AIMCO/IPT, INC., a Delaware corporation, NHP A&R SERVICES, INC., a Virginia corporation NHP REAL ESTATE CORPORATION, a Delaware corporation AIMCO HOLDINGS QRS, INC., a Delaware corporation NHPMN-GP, INC., a Delaware corporation LAC PROPERTIES QRS II INC., a Delaware corporation
By:	/s/ Patti K. Fielding
	Patti K. Fielding
	Executive Vice President and Treasurer

(Sixth Amendment to Amended and Restated Senior Secured Credit Agreement)

AIMCO LP LA, LP,
a Delaware limited partnership

By:	AIMCO LA QRS, Inc.,
	a Delaware corporation
Its:	General Partner

By:	/s/ Patti K. Fielding
	Patti K. Fielding
	Executive Vice President and Treasurer

GP-OP PROPERTY MANAGEMENT, LLC, a Delaware limited liability company
By:	AIMCO Properties, L.P.,
	a Delaware limited partnership,
	Its: Member

By:	AIMCO-GP, Inc.,
	a Delaware corporation,
Its:	General Partner

By:	/s/ Patti K. Fielding
	Patti K. Fielding
	Executive Vice President and Treasurer

(Sixth Amendment to Amended and Restated Senior Secured Credit Agreement)

AIMCO GP LA, L.P., a Delaware limited partnership
By:	AIMCO-GP, INC.,
	a Delaware corporation,
Its:	General Partner

By:	/s/ Patti K. Fielding
	Patti K. Fielding
	Executive Vice President and Treasurer

LAC PROPERTIES OPERATING PARTNERSHIP, L.P., a Delaware limited partnership
By:	AIMCO GP LA, L.P.,
	a Delaware limited partnership,
Its:	General Partner

By:	AIMCO-GP, INC.,
	a Delaware corporation,
Its:	General Partner

By:	/s/ Patti K. Fielding
	Patti K. Fielding
	Executive Vice President and Treasurer

AIC REIT PROPERTIES LLC, a Delaware limited liability company
By:	AIMCO Properties, L.P.,
	a Delaware limited partnership,
Its:	Managing Member

By:	AIMCO-GP, INC.,
	a Delaware corporation,
Its:	General Partner

By:	/s/ Patti K. Fielding
	Patti K. Fielding
	Executive Vice President and Treasurer

(Sixth Amendment to Amended and Restated Senior Secured Credit Agreement)

AMBASSADOR APARTMENTS, L.P. a Delaware limited partnership
By:	AIMCO QRS GP, LLC, a Delaware limited liability company
Its:	General Partner
	By:	AIMCO Properties, L.P.,
	Its:	a Delaware limited partnership, Member
		By:	AIMCO-GP, Inc.,
		Its:	a Delaware corporation, General Partner
			By:	/s/ Patti K. Fielding Patti K. Fielding Executive Vice President and Treasurer

AIMCO HOLDINGS, L.P. a Delaware limited partnership
By:	AIMCO Holdings QRS, Inc., a Delaware corporation,
Its:	General Partner
	By:	/s/ Patti K. Fielding
		Patti K. Fielding Executive Vice President and Treasurer
AMBASSADOR FLORIDA PARTNERS LIMITED PARTNERSHIP, a Delaware limited partnership
By:	Ambassador Florida Partners, Inc., a Delaware corporation,
Its:	General Partner
	By:		/s/ Patti K. Fielding
			Patti K. Fielding Executive Vice President and Treasurer

(Sixth Amendment to Amended and Restated Senior Secured Credit Agreement)

LAC PROPERTIES SUB LLC, a Delaware limited liability company
By:	LAC Properties Operating Partnership, L.P., a Delaware limited partnership,
Its:	Managing Member
	By:	AIMCO GP LA, L.P., a Delaware limited partnership,
	Its:	General Partner
		By:	AIMCO-GP, Inc., a Delaware corporation,
		Its:	General Partner
			By:	/s/ Patti K. Fielding Patti K. Fielding
				Executive Vice President and Treasurer

LAC PROPERTIES GP I LLC a Delaware limited liability company
By:	LAC Properties Operating Partnership, L.P., a Delaware limited partnership,
Its:	Managing Member
	By:	AIMCO GP LA, L.P., a Delaware limited partnership,
	Its:	General Partner
		By:	AIMCO-GP, Inc., a Delaware corporation,
		Its:	General Partner
			By:	/s/ Patti K. Fielding Patti K. Fielding
				Executive Vice President and Treasurer

(Sixth Amendment to Amended and Restated Senior Secured Credit Agreement)

GUARANTORS (for purposes of Section 5 only):

AIMCO EQUITY SERVICES, INC., a Virginia corporation AIMCO HOLDINGS QRS, INC., a Delaware corporation AIMCO-LP TRUST a Delaware trust AIMCO PROPERTIES FINANCE CORP., a Delaware corporation AMBASSADOR I, INC., a Delaware corporation AMBASSADOR VIII, INC., a Delaware corporation ANGELES REALTY CORPORATION II, a California corporation CONCAP EQUITIES, INC., a Delaware corporation NHP A&R SERVICES, INC., a Virginia corporation NHPMN STATE MANAGEMENT, INC., a Delaware corporation NHP MULTI-FAMILY CAPITAL CORPORATION, a District of Columbia corporation AIMCO-GP, INC., a Delaware corporation NHPMN-GP, INC., a Delaware corporation
By:	/s/ Patti K. Fielding
	Patti K. Fielding
	Executive Vice President and Treasurer

(Sixth Amendment to Amended and Restated Senior Secured Credit Agreement)

AIMCO IPLP, L.P.,
a Delaware limited partnership
By:	AIMCO/IPT, Inc.,
	a Delaware corporation
Its:	General Partner
	By:	/s/ Patti K. Fielding
		Patti K. Fielding
		Executive Vice President and Treasurer
AIMCO HOLDINGS, L.P.,
a Delaware limited partnership
By:	AIMCO Holdings QRS, Inc.,
	a Delaware corporation,
Its:	General Partner
	By:	/s/ Patti K. Fielding
		Patti K. Fielding
		Executive Vice President and Treasurer
AMBASSADOR CRM FLORIDA PARTNERS LIMITED PARTNERSHIP,
a Delaware limited partnership
By:	Ambassador Florida Partners Limited Partnership, a Delaware limited partnership
Its:	General Partner
	By:	Ambassador Florida Partners, Inc.,
		a Delaware corporation
		Its:	General Partner
			By:	/s/ Patti K. Fielding
				Patti K. Fielding
				Executive Vice President and Treasurer

(Sixth Amendment to Amended and Restated Senior Secured Credit Agreement)

AMBASSADOR APARTMENTS, L.P.
a Delaware limited partnership
By:	AIMCO QRS GP, LLC,
	a Delaware limited liability company,
Its:	General Partner
	By:	AIMCO Properties, L.P.,
		a Delaware limited partnership,
	Its:	Member
		By:	AIMCO-GP, Inc.,
			a Delaware corporation,
		Its:	General Partner
		By:	/s/ Patti K. Fielding
			Patti K. Fielding
			Executive Vice President and Treasurer
LAC PROPERTIES OPERATING PARTNERSHIP, L.P.,
a Delaware limited partnership
By:	AIMCO GP LA, L.P.,
	a Delaware limited partnership
Its:	General Partner
	By:	AIMCO-GP, Inc.,
		a Delaware corporation
	Its:	General Partner
		By:	/s/ Patti K. Fielding
			Patti K. Fielding
			Executive Vice President and Treasurer

(Sixth Amendment to Amended and Restated Senior Secured Credit Agreement)

GP-OP PROPERTY MANAGEMENT, LLC a Delaware limited liability company
By:	AIMCO Properties, L.P., a Delaware limited partnership,
Its:	Member
	By:	AIMCO-GP, Inc., a Delaware corporation,
	Its:	General Partner
		By:	/s/ Patti K. Fielding Patti K. Fielding
			Executive Vice President and Treasurer

NHPMN MANAGEMENT, L.P., a Delaware limited partnership
By:	NHPMN-GP, Inc. a Delaware corporation,
Its:	General Partner
	By:	/s/ Patti K. Fielding Patti K. Fielding Executive Vice President and Treasurer

NHPMN MANAGEMENT, LLC, a Delaware limited liability company
By:	AIMCO/Bethesda Holdings, Inc., a Delaware corporation,
Its:	Member
	By:	/s/ Patti K. Fielding Patti K. Fielding Executive Vice President and Treasurer

(Sixth Amendment to Amended and Restated Senior Secured Credit Agreement)

OP PROPERTY MANAGEMENT, L.P., a Delaware limited partnership
By:	NHPMN-GP, Inc., a Delaware corporation
Its:	Managing General Partner
	By:	/s/ Patti K. Fielding  Patti K. Fielding
		Executive Vice President and Treasurer

OP PROPERTY MANAGEMENT, LLC, a Delaware limited liability company
By:	AIMCO Properties, L.P., a Delaware limited partnership
Its:	Member
	By:	AIMCO-GP, Inc., a Delaware corporation
	Its:	General Partner
		By:	/s/ Patti K. Fielding Patti K. Fielding Executive Vice President and Treasurer

(Sixth Amendment to Amended and Restated Senior Secured Credit Agreement)

LAC PROPERTIES GP I LIMITED PARTNERSHIP, a Delaware limited partnership
By:	LAC Properties GP I LLC, a Delaware limited liability company
Its:	General Partner
	By:	LAC Properties Operating Partnership, L.P., a Delaware limited partnership
	Its:	Managing Member
		By:	AIMCO GP LA, L.P., a Delaware limited partnership
		Its:	General Partner
			By:	AIMCO-GP, Inc., a Delaware corporation
			Its:	General Partner
				By:	/s/ Patti K. Fielding Patti K. Fielding
					Executive Vice President and Treasurer

LAC PROPERTIES GP II LIMITED PARTNERSHIP, a Delaware limited partnership
By:	LAC Properties QRS II Inc., a Delaware corporation,
Its:	General Partner
	By:	/s/ Patti K. Fielding Patti K. Fielding
		Executive Vice President and Treasurer

(Sixth Amendment to Amended and Restated Senior Secured Credit Agreement)

AIMCO SELECT PROPERTIES, L.P., a Delaware limited partnership
By:	AIMCO/Bethesda Holdings, Inc.,
	a Delaware corporation,
Its:	General Partner

By:	/s/ Patti K. Fielding
	Patti K. Fielding
	Executive Vice President and Treasurer

(Sixth Amendment to Amended and Restated Senior Secured Credit Agreement)

BANK OF AMERICA:	BANK OF AMERICA, N.A., as Administrative Agent
	By:	/s/ Kathleen M. Carry
		Kathleen M. Carry
		Vice President

(Sixth Amendment to Amended and Restated Senior Secured Credit Agreement)

L/C ISSUER:	BANK OF AMERICA, N.A., as L/C Issuer
	By:	/s/ James P. Johnson
		James P. Johnson
		Senior Vice President

(Sixth Amendment to Amended and Restated Senior Secured Credit Agreement)

BANK OF AMERICA, N.A., as Lender
By:	/s/ James P. Johnson
	James P. Johnson
	Senior Vice President

(Sixth Amendment to Amended and Restated Senior Secured Credit Agreement)

KEYBANK NATIONAL ASSOCIATION as a Lender
By:	/s/ Christopher T. Neil
	Christopher T. Neil
	Senior Relationship Manager

(Sixth Amendment to Amended and Restated Senior Secured Credit Agreement)

WACHOVIA BANK, NATIONAL ASSOCIATION, as a Lender
By:	/s/ Amit Khimji
	Amit Khimji
	Director

(Sixth Amendment to Amended and Restated Senior Secured Credit Agreement)

EX-31.1

Exhibit 31.1

CHIEF EXECUTIVE OFFICER CERTIFICATION

I, Terry Considine, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Apartment Investment and Management Company;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 1, 2009

/s/ Terry Considine  

Terry Considine  

Chairman and Chief Executive Officer 

EX-31.2

Exhibit 31.2

CHIEF FINANCIAL OFFICER CERTIFICATION

I, David Robertson, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Apartment Investment and Management Company;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 1, 2009

/s/ David Robertson  

David Robertson  

President, Chief Investment Officer and Chief Financial Officer 

EX-32.1

Exhibit 32.1

Certification of CEO Pursuant to
18 U.S.C. Section 1350,
As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Apartment Investment and Management Company (the “Company”) on Form 10-Q for the quarterly period ended March 31, 2009 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Terry Considine, as Chief Executive Officer of the Company hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that:

(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Terry Considine Terry Considine
Chairman and Chief Executive Officer
May 1, 2009

EX-32.2

Exhibit 32.2

Certification of CFO Pursuant to
18 U.S.C. Section 1350,
As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Apartment Investment and Management Company (the “Company”) on Form 10-Q for the quarterly period ended March 31, 2009 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David Robertson, as Chief Financial Officer of the Company hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that:

(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ David Robertson David Robertson
President, Chief Investment Officer and Chief Financial Officer
May 1, 2009

EX-99.1

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, 2009, any instrument with respect to long-term debt not being registered where the total amount of securities authorized thereunder does not exceed ten 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 and Exchange Commission upon request.

APARTMENT INVESTMENT AND MANAGEMENT COMPANY
By:	/s/ David Robertson
	David Robertson
	President, Chief Investment Officer and Chief Financial Officer