APARTMENT INVESTMENT & MANAGEMENT CO
EX-10.5
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<DESCRIPTION>EX-10.5
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<P ALIGN="RIGHT"><FONT SIZE=2><A
NAME="sa2744_exhibit_10.5"> </A>
<A NAME="toc_sa2744_1"> </A>
<BR></FONT><FONT SIZE=2><B>Exhibit 10.5    <BR>    </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>FIRST AMENDMENT TO<BR>
TERM LOAN CREDIT AGREEMENT  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>among </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>Apartment Investment and Management Company,<BR>
AIMCO Properties, L.P.,<BR>
AIMCO/Bethesda Holdings,&nbsp;Inc., and<BR>
NHP Management Company,</B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>as
Borrowers, </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>Bank of America, N.A.,</B></FONT><FONT SIZE=2><BR>
as Administrative Agent </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>and
</FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>The Other Financial<BR>
Institutions Party Hereto  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>Dated as of September&nbsp;30, 2003 </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>Banc of America Securities LLC<BR>  </B></FONT><FONT SIZE=2>as Sole-Lead Arranger </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>and </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>Sole
Bookrunner </FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="page_sc2744_1_2"> </A> </FONT> <FONT SIZE=2><B>FIRST AMENDMENT TO<BR>
TERM LOAN CREDIT AGREEMENT  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This FIRST AMENDMENT TO TERM LOAN CREDIT AGREEMENT (this "</FONT><FONT SIZE=2><I>Amendment</I></FONT><FONT SIZE=2>") is dated as of September&nbsp;30, 2003
(the "</FONT><FONT SIZE=2><I>Amendment Effective Date</I></FONT><FONT SIZE=2>") and entered into by and among APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation (the
"</FONT><FONT SIZE=2><I>REIT</I></FONT><FONT SIZE=2>"), AIMCO PROPERTIES, L.P., a Delaware limited partnership ("</FONT><FONT SIZE=2><I>AIMCO</I></FONT><FONT SIZE=2>"), AIMCO/BETHESDA
HOLDINGS,&nbsp;INC., a Delaware corporation ("</FONT><FONT SIZE=2><I>AIMCO/Bethesda</I></FONT><FONT SIZE=2>") and NHP MANAGEMENT COMPANY, a District of Columbia corporation
("</FONT><FONT SIZE=2><I>NHP Management</I></FONT><FONT SIZE=2>") (the REIT, AIMCO, AIMCO/Bethesda and NHP Management collectively referred to herein as
"</FONT><FONT SIZE=2><I>Borrowers</I></FONT><FONT SIZE=2>"), BANK OF AMERICA, N.A. ("</FONT><FONT SIZE=2><I>Bank of America</I></FONT><FONT SIZE=2>"), as Administrative Agent (in such capacity,
"</FONT><FONT SIZE=2><I>Administrative Agent</I></FONT><FONT SIZE=2>"), and the Lenders party hereto, and is made with reference to that certain Term Loan Credit Agreement, dated as of May&nbsp;30,
2003, by and among Borrowers, each lender from time to time party thereto, and BANK OF AMERICA, N.A., as Administrative Agent (the "</FONT><FONT SIZE=2><I>Credit Agreement</I></FONT><FONT SIZE=2>")
(the Credit Agreement as amended by this Amendment, the "</FONT><FONT SIZE=2><I>Amended Agreement</I></FONT><FONT SIZE=2>"). Capitalized terms used in this Amendment shall have the meanings set forth
in the Credit Agreement unless otherwise defined herein. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>RECITALS  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><B>WHEREAS</B></FONT><FONT SIZE=2>, Borrowers desire to amend the Credit Agreement as more particularly set forth below; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>WHEREAS</B></FONT><FONT SIZE=2>, pursuant to the Credit Agreement, certain of the amendments set forth herein require the consent of the Supermajority Lenders,
and the Supermajority Lenders hereby consent thereto; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>NOW, THEREFORE</B></FONT><FONT SIZE=2>, in consideration of the agreements, provisions and covenants contained herein, the parties agree as follows: </FONT></P>


<P><FONT SIZE=2><B>Section&nbsp;1. AMENDMENTS TO THE CREDIT AGREEMENT  </B></FONT></P>

<P><FONT SIZE=2><B>1.1&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Amendment to Subsection&nbsp;1.01 Defined Terms.  </I></B></FONT></P>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The defined terms "</FONT><FONT SIZE=2><I>Adjusted Fixed Charges</I></FONT><FONT SIZE=2>" and
"</FONT><FONT SIZE=2><I>Adjusted Fixed Charges Coverage Ratio</I></FONT><FONT SIZE=2>" are deleted in their entirety. </FONT></P>


<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The defined term "</FONT><FONT SIZE=2><I>Funds From Operations</I></FONT><FONT SIZE=2>" is deleted in its entirety and
replaced with the following: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Funds From Operations</I></FONT><FONT SIZE=2>" 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 real estate depreciation and amortization (excluding amortization of financing costs), plus
amortization associated with the purchase of property management companies, and after adjustments for unconsolidated partnerships and joint ventures (with adjustments for unconsolidated partnerships
and joint </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>2</FONT></P>

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<P><FONT SIZE=2>ventures
calculated to reflect funds from operations on the same basis) together with adjustments for the non-cash deferred portion of any income tax provision for unconsolidated
subsidiaries and the payment of dividends on preferred Stock, as interpreted by the National Association of Real Estate Investment Trusts in its March, 1995, White Paper on Funds From Operations; </FONT> <FONT SIZE=2><I>provided</I></FONT><FONT
SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, the following shall be excluded when calculating "</FONT><FONT SIZE=2><I>Funds From
Operations</I></FONT><FONT SIZE=2>": (i)&nbsp;non-cash adjustments for preferred Stock issuance costs, (ii)&nbsp;non-cash adjustments for loan amortization costs, and
(iii)&nbsp;interest expense charges (or benefits) for minority interest marked-to-market adjustments arising under Statement of Financial Accounting Standards No.&nbsp;150
of the Financial Accounting Standards Board ("</FONT><FONT SIZE=2><I>FAS&nbsp;150</I></FONT><FONT SIZE=2>") as interpreted under GAAP. </FONT></P>

</UL>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The defined term "</FONT><FONT SIZE=2><I>Gross Asset Value</I></FONT><FONT SIZE=2>" is deleted in its entirety and
replaced with the following: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Gross Asset Value</I></FONT><FONT SIZE=2>" means as of any date of determination, the sum of the following, determined for Borrowers, the Guarantors and their
respective Subsidiaries: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;Cash
(including Restricted Cash) and Cash Equivalents of both consolidated and unconsolidated Persons, which Cash and Cash Equivalents are owned, directly or indirectly,
by Borrowers, the Guarantors or their respective Subsidiaries as of such date of determination; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;GP
Loans valued at net realizable value as of such date of determination determined in accordance with GAAP; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;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 Real Property Assets Under Development), the Adjusted Total NOI attributable to such real estate assets for such four quarter period </FONT><FONT SIZE=2><I>divided
by</I></FONT><FONT SIZE=2> 8.75%; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;with
respect to all real estate assets wholly or partially owned by such Person(s) 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 Real Property Assets Under Development), the Adjusted Total NOI attributable to such real estate assets for the number of
full calendar quarters that such Person(s) owned such assets measured on an annualized basis and </FONT><FONT SIZE=2><I>divided by</I></FONT><FONT SIZE=2> 8.75%; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;with
respect to all real estate assets owned by such Person(s) on such date of determination, but acquired less than one calendar quarter preceding such date of
determination (other than Real Property Assets Under Development), 95% of the purchase price paid by such Person(s) for such assets; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)&nbsp;&nbsp;the
gross book value of Real Property Assets Under Development as of such date of determination; and </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)&nbsp;an
amount equal to 400% of Management EBITDA for the four consecutive fiscal quarter period preceding such date of determination. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>3</FONT></P>

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<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The defined term "</FONT><FONT SIZE=2><I>Indebtedness</I></FONT><FONT SIZE=2>" is deleted in its entirety and replaced
with the following: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Indebtedness</I></FONT><FONT SIZE=2>" of any Person means without duplication, (a)&nbsp;all indebtedness for borrowed money, (b)&nbsp;all obligations issued,
undertaken or assumed as the deferred purchase price of Property or services, (c)&nbsp;all direct or contingent obligations with respect to surety bonds, letters of credit, bankers' acceptances and
similar instruments (in each case, to the extent material or noncontingent), (d)&nbsp;all obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced
incurred in connection with the acquisition of Properties, (e)&nbsp;all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as financing, in
either case with respect to Properties acquired by the Person (even though the rights and remedies of the seller or bank under such agreement in the event of default are limited to repossession or
sale of such properties), (f)&nbsp;all Capital Lease Obligations, (g)&nbsp;all net obligations with respect to Swap Agreements, (h)&nbsp;all obligations (other than, in the case of the REIT, the
obligation to acquire Partnership Units in exchange for shares of common Stock of the REIT) to purchase, redeem, or acquire any Stock of such Person or its Affiliates that, by its terms or by the
terms of any security into which it is convertible or exchangeable, (x)&nbsp;is, or upon the happening of any event (other than a change of control event as may be set forth in certain securities of
the REIT and/or AIMCO which has not occurred prior to the date of determination hereunder) or the passage of time would be, required to be redeemed or repurchased by such Person or its Affiliates,
including at the option of the holder, in whole or in part, or (y)&nbsp;has, or upon the happening of an event (other than the above change of control event as may be set forth in certain securities
of the REIT and/or AIMCO which has not occurred prior to the date of determination hereunder) or passage of time would have, a redemption or similar payment due, in each case of clauses (x)&nbsp;and
(y)&nbsp;before the date which is the one (1)&nbsp;year anniversary of the then effective Maturity Date (excluding, however, any such preferred Stock which is convertible only into common Stock of
the REIT), (i)&nbsp;any direct or contingent obligations or liabilities under any equity forward agreements or transactions or under any similar arrangements or transactions, (j)&nbsp;all
indebtedness referred to in clauses (a)&nbsp;through (i)&nbsp;above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any
Lien upon or in Properties (including accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness, and
(k)&nbsp;all Guaranty Obligations in respect of indebtedness or obligations of others of the kinds referred to in clauses (a)&nbsp;through (i)&nbsp;above.
"</FONT><FONT SIZE=2><I>Indebtedness</I></FONT><FONT SIZE=2>" shall also include such Person's share of the Indebtedness of any partnership or joint venture in which such Person, directly or
indirectly, holds any interest, and any direct or indirect Recourse or contingent obligations of such Person with respect to Indebtedness of such partnership or joint venture in excess of its
proportionate share. Solely for purposes of </FONT><FONT SIZE=2><I>Section&nbsp;7.14</I></FONT><FONT SIZE=2> only, "</FONT><FONT SIZE=2><I>Indebtedness</I></FONT><FONT SIZE=2>" shall exclude
Intra-Company Debt, security deposits, accounts payable and accrued liabilities, any prepaid rent (as such terms are defined under GAAP) and that portion of the Contingent Acquisition Note, if any,
which is not required under GAAP to be shown as indebtedness of any Borrower or any of their Subsidiaries at any time (including in the event of any acceleration thereof). Notwithstanding the
foregoing, "</FONT><FONT SIZE=2><I>Indebtedness</I></FONT><FONT SIZE=2>" shall only include the net obligations of the REIT, AIMCO and NAPICO under the REAL Litigation Settlement Agreement, which
shall be calculated quarterly </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>4</FONT></P>

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<P><FONT SIZE=2>based
on the sum of (x)&nbsp;the difference of (A)&nbsp;$25,000,000 </FONT><FONT SIZE=2><I>less</I></FONT><FONT SIZE=2> (B)&nbsp;an amount equal to the product of (1)&nbsp;the then remaining
number of shares of Cash Deposit Stock held by the REIT or an Affiliate of the REIT in escrow </FONT><FONT SIZE=2><I>times</I></FONT><FONT SIZE=2> (2)&nbsp;the average closing share price of such
Cash Deposit Stock on the NYSE over the 21 trading day period immediately prior to each quarter-end and (y)&nbsp;the difference of (A)&nbsp;(without duplication) the outstanding NAPICO
Notes and the REAL Litigation Guaranty </FONT><FONT SIZE=2><I>less</I></FONT><FONT SIZE=2> (B)&nbsp;an
amount equal to the product of (1)&nbsp;the then remaining number of shares of Mirror Notes Stock held by NAPICO or an Affiliate of NAPICO as pledgee </FONT> <FONT SIZE=2><I>times</I></FONT><FONT SIZE=2> (2)&nbsp;the average closing share price of
such Mirror Notes Stock on the NYSE over the 21 trading day period immediately prior to each
quarter-end. In all events, the net obligations of the REIT, AIMCO and NAPICO under the REAL Litigation Settlement Agreement shall not be less than zero. </FONT></P>

</UL>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The defined term "</FONT><FONT SIZE=2><I>Interest Expense</I></FONT><FONT SIZE=2>" is deleted in its entirety and
replaced with the following: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Interest Expense</I></FONT><FONT SIZE=2>" means, for any Person and for any period, without double counting any item, the sum of (x)&nbsp;gross interest
expense paid in, incurred or accrued during such period by such Person (including all commissions, discounts, fees and other charges in connection with standby letters of credit and similar
instruments), including any amounts as capitalized interest, plus (y)&nbsp;dividends paid in, incurred or accrued during such period by such Person with respect to Trust Based Convertible Preferred
Securities, </FONT><FONT SIZE=2><I>plus</I></FONT><FONT SIZE=2> (z)&nbsp;the portion of the upfront costs and expenses for Swap Agreements entered into by such Person (to the extent not included in
gross interest expense) fairly allocated to such Swap Agreements as expenses for such period, as determined for such Person in accordance with GAAP; </FONT> <FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2> that all interest expense accrued by
Borrowers and their respective Subsidiaries during such period, even if not payable on or before the
Maturity Date, shall be included with "</FONT><FONT SIZE=2><I>Interest Expense</I></FONT><FONT SIZE=2>". Notwithstanding the foregoing, "</FONT><FONT SIZE=2><I>Interest
Expense</I></FONT><FONT SIZE=2>" shall not include (i)&nbsp;amortization of loan costs and interest accrued under any Intra-Company Debt or (ii)&nbsp;interest expense charges (or benefits) from
minority interest marked-to-market adjustments arising under FAS&nbsp;150 as interpreted under GAAP. </FONT></P>

</UL>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The following defined terms shall be inserted in the correct alphabetical location as follows: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Leverage Premium</I></FONT><FONT SIZE=2>" means, upon the Borrowers' election of a Temporary Leverage Increase for more than two consecutive quarters, an
additional 25 basis points per annum increase in the Applicable Margin. The Leverage Premium shall be in effect from the date the Compliance Certificate in which the Borrowers have elected a Temporary
Leverage Increase for more than two consecutive quarters is received by Administrative Agent to but excluding the date the next Compliance Certificate in which the Borrowers do not elect a Temporary
Leverage Increase is received by Administrative Agent. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Mirror Notes</I></FONT><FONT SIZE=2>" means the indemnity obligations of The Casden Company, a California corporation ("</FONT><FONT SIZE=2><I>The Casden
Company</I></FONT><FONT SIZE=2>"), to NAPICO, which may be evidenced by certain non-recourse promissory notes issued by The Casden Company or one of its Affiliates to </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>5</FONT></P>

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<P><FONT SIZE=2>NAPICO
or one of its Affiliates, which will have the same interest rate and maturity schedule as the NAPICO Notes. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>REAL Litigation Settlement Agreement</I></FONT><FONT SIZE=2>" means that certain Settlement Agreement, dated as of August&nbsp;12, 2003, by and among the REIT,
AIMCO, National Partnership Investment Corp., a California corporation ("</FONT><FONT SIZE=2><I>NAPICO</I></FONT><FONT SIZE=2>"), Cerberus Partners, L.P., a Delaware limited partnership, XYZ
Holdings, LLC, a Delaware limited liability company, Alan I. Casden, an individual, The Casden Company, a California corporation and Casden Investment Corp., a California corporation with respect to
the settlement of </FONT><FONT SIZE=2><I>In re Real Estate Associates Limited Partnership Litigation</I></FONT><FONT SIZE=2>, CV 98-7035 DDP, United States District Court, Central
District of California (the "</FONT><FONT SIZE=2><I>REAL Litigation</I></FONT><FONT SIZE=2>"). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>REAL Litigation Settlement Obligations</I></FONT><FONT SIZE=2>" means, collectively, (i)&nbsp;Loans in the aggregate principal amount of $25,000,000 which were
used by the REIT or one of its Affiliates to make a cash deposit in escrow for the benefit of the plaintiffs of the REAL Litigation (the "</FONT><FONT SIZE=2><I>Cash
Deposit</I></FONT><FONT SIZE=2>"), and (ii)&nbsp;certain promissory notes made by NAPICO in the aggregate amount of $35,000,000 in favor of the plaintiffs of the REAL Litigation (the
"</FONT><FONT SIZE=2><I>NAPICO Notes</I></FONT><FONT SIZE=2>") and that certain Guaranty made by AIMCO in favor of the plaintiffs of the REAL Litigation with respect to the payment and performance of
the NAPICO Notes (the "</FONT><FONT SIZE=2><I>REAL Litigation Guaranty</I></FONT><FONT SIZE=2>"). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>REAL Litigation Settlement Pledged Stock</I></FONT><FONT SIZE=2>" means, collectively, (i)&nbsp;531,915 shares of common Stock of the REIT placed in escrow by
The Casden Company for release to the REIT in connection with the Cash Deposit (the "</FONT><FONT SIZE=2><I>Cash Deposit Stock</I></FONT><FONT SIZE=2>"), as such number of shares may be reduced from
time to time pursuant to the REAL Litigation Settlement Agreement, and (ii)&nbsp;744,681 shares of common Stock of the REIT (plus up to 60,000 additional shares for accrued interest) pledged by The
Casden Company or one of its Affiliates to NAPICO to secure the payment of the Mirror Notes (the "</FONT><FONT SIZE=2><I>Mirror Notes Stock</I></FONT><FONT SIZE=2>"), as such number of shares may be
reduced from time to time pursuant to the REAL Litigation Settlement Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Temporary Leverage Increase</I></FONT><FONT SIZE=2>" means, upon the Borrowers' election by indicating their election in writing on the quarterly Compliance
Certificate delivered to Administrative Agent pursuant to </FONT><FONT SIZE=2><I>Section&nbsp;6.02(b)</I></FONT><FONT SIZE=2>, an increase in the ratios set forth in either </FONT> <FONT SIZE=2><I>Section&nbsp;7.14(e)</I></FONT><FONT SIZE=2> or
</FONT><FONT SIZE=2><I>(f)</I></FONT><FONT SIZE=2>. A Temporary Leverage Increase shall be in effect for the fiscal quarter
elected by the Borrowers on the Compliance Certificate. </FONT></P>

</UL>

<P><FONT SIZE=2><B>1.2&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Amendment to Section&nbsp;1.03 Accounting Terms.  </I></B></FONT></P>


<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Subsection&nbsp;1.03 shall be deleted in its entirety and replaced with the following: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;All
accounting terms not specifically or completely defined in this Agreement shall be construed in conformity with, and all financial data (including financial ratios
and other financial calculations but excluding financial statements) required to be submitted by this Agreement shall be prepared in conformity with, GAAP as in effect on September&nbsp;30, 2003, </FONT> <FONT SIZE=2><I>except</I></FONT><FONT SIZE=2>
as otherwise specifically prescribed herein. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>6</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;If
at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in this Agreement, and either Borrowers, Administrative
Agent or Requisite Lenders shall so request, Administrative Agent, Lenders and Borrowers shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in
light of such change in GAAP (subject to the approval of Requisite Lenders, Administrative Agent and Borrowers); </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT> <FONT SIZE=2><I>that</I></FONT><FONT SIZE=2>, until so amended, such
ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein.
 </FONT></P>

</UL>

<P><FONT SIZE=2><B>1.3&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Amendment to Section&nbsp;2.05 Principal and Interest; Default Rate</I></B></FONT><FONT SIZE=2><B>.  </B></FONT></P>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Subsection&nbsp;2.05(c)&nbsp;shall be deleted in its entirety and replaced with the following: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;Each
Offshore Rate Loan shall bear interest for each day during the Interest Period with respect thereto at a rate per annum equal to the Offshore Rate determined for
such day plus 285 basis points per annum. </FONT></P>

</UL>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Subsection&nbsp;2.05(d)&nbsp;shall be deleted in its entirety and replaced with the following: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;Each
Base Rate Loan shall bear interest at a rate per annum equal to the Base Rate plus 115 basis points per annum. </FONT></P>

</UL>

<P><FONT SIZE=2><B>1.4&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Amendment to Section&nbsp;6.02 Certificates, Notices and Other Information</I></B></FONT><FONT SIZE=2><B>.  </B></FONT></P>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Subsection&nbsp;6.02(b)&nbsp;shall be amended by deleting clause&nbsp;(1)&nbsp;thereof in its entirety and
replacing it with the following: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;a
duly completed Compliance Certificate signed by a Responsible Officer of Borrowers, with such supporting information as may be requested by Administrative Agent,
including a statement as to whether any change in GAAP or in the application thereof has occurred since September&nbsp;30, 2003, and, if any change has occurred, specifying the effect of such change
on the financial statements accompanying such Compliance Certificate and setting forth a certified reconciliation between calculations of the financial ratios or requirements made before and after
giving effect to such change in GAAP. </FONT></P>

<P><FONT SIZE=2><B>1.5&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Amendment to Section&nbsp;7.05 Investments.  </I></B></FONT></P>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Subsection&nbsp;7.05 shall be amended by deleting the word "and" at the end of clause&nbsp;(m) thereof, deleting the
period from the end of clause&nbsp;(n) thereof and replacing it with "; and" and adding a new clause&nbsp;(o) which will read as follows: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o)&nbsp;&nbsp;&nbsp;Investments
in the Mirror Notes and the REAL Litigation Settlement Pledged Stock securing the Mirror Notes required pursuant to the REAL Litigation Settlement Agreement. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>7</FONT></P>

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<P><FONT SIZE=2><B>1.6&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Amendment to Section&nbsp;7.07 Restricted Payments.  </I></B></FONT></P>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Subsection&nbsp;7.07 shall be deleted in its entirety and replaced with the following: </FONT></P>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.07</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><B>Restricted Payments.</B></FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;(i)&nbsp;Declare
or make any Restricted Payment or any distribution of any Properties (including cash, rights, obligations, partnership interests or Partnership Units,
on account of any partnership interests, Partnership Units or Stock) to any Person (other than Borrowers or a Wholly-Owned Subsidiary), or (ii)&nbsp;purchase, redeem or otherwise acquire for value
any of its partnership interests, Partnership Units or Stock, now or hereafter outstanding, from any Person (other than Borrowers or a Wholly-Owned Subsidiary) (all of the foregoing set forth in
clauses (i)&nbsp;and (ii), collectively, being "distributions"), </FONT><FONT SIZE=2><I>except</I></FONT><FONT SIZE=2> for the following: (A)&nbsp;the exchange of common Stock of the REIT for
Partnership Units; (B)&nbsp;if no Default or Event of Default exists under </FONT><FONT SIZE=2><I>Section&nbsp;8.01(a)</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>(b)</I></FONT><FONT SIZE=2>
or </FONT><FONT SIZE=2><I>(c)</I></FONT><FONT SIZE=2> as a result of a breach of Section&nbsp;7.14, then the Borrowers and all such Subsidiaries may make "distributions" during any four consecutive
fiscal quarter period in an amount in the aggregate which does not exceed the greater of (1)&nbsp;90% of Funds From Operations for each four consecutive fiscal quarter period ending on the last day
of each fiscal quarter, or (2)&nbsp;such amount as may be necessary to maintain REIT Status ("distributions" under this clause&nbsp;(B)&nbsp;shall not include any "distributions" under clauses
(A)&nbsp;or (C)); (C)&nbsp;that if no Default or Event of Default exists, the Borrowers and all such Subsidiaries may undertake Permitted Preferred Stock Redemptions; </FONT> <FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT
SIZE=2><I>that</I></FONT><FONT SIZE=2>, prior to making any Permitted Preferred Stock Redemptions, Borrowers shall first certify
in writing to Administrative Agent (i)&nbsp;that the Net Issuance Proceeds or Net Disposition Proceeds referred to in the definition of "Permitted Preferred Stock Redemptions" have been, or will be,
applied as and to the extent required under Section&nbsp;2.06 of the Revolver Credit Agreement, and (ii)&nbsp;that the use of funds to make such Permitted Preferred Stock Redemptions shall not
cause a Default or an Event of Default under this Agreement; and (D)&nbsp;(1)&nbsp;the exercise by the Borrowers of their right as a secured party to take possession of the Mirror
Note&nbsp;Stock after a default under the Mirror Note&nbsp;Stock pledge agreement and in accordance with the REAL Litigation Settlement Agreement, and (2)&nbsp;the release to the Borrowers of
the Cash Deposit Stock currently held in escrow for the benefit of the Borrowers in accordance with the REAL Litigation Settlement Agreement; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT> <FONT SIZE=2><I>however</I></FONT><FONT
SIZE=2>, that nothing in this </FONT><FONT SIZE=2><I>Section&nbsp;7.07</I></FONT><FONT SIZE=2> shall prohibit (A)&nbsp;any Borrower or any
Subsidiary of Borrower from making tenders for or otherwise acquiring for value any partnership interest, Partnership Units or Stock, now or hereafter outstanding, of any Borrower or any Subsidiary of
any Borrower which were not issued by such acquiring Borrower or Subsidiary or (B)&nbsp;any distribution of Property by any Borrower Party, or any Affiliate thereof, in the Ordinary Course of
Business and pursuant to such Borrower Party's or Affiliate's Organization Documents, including (x)&nbsp;any distribution of proceeds from Dispositions permitted under </FONT> <FONT SIZE=2><I>Section&nbsp;7.04</I></FONT><FONT SIZE=2>, (y)&nbsp;any
distribution of proceeds from Dispositions in the Ordinary Course of Business and (z)&nbsp;any distribution by a
non-Wholly-Owned Subsidiary to any Borrower, any of Borrowers' Subsidiaries or to any other Person holding an equity interest in such non-Wholly-Owned Subsidiary. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>8</FONT></P>

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<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;(i)&nbsp;Permit
any Subsidiary to make a demand under any Intra-Company Debt which is payable upon demand at any time after the Revolving Commitment Termination Date,
or (ii)&nbsp;permit any payment with respect to Intra-Company Debt while any Event of Default is continuing. </FONT></P>

</UL>

<P><FONT SIZE=2><B>1.7&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Amendment to Section&nbsp;7.14 Financial Covenants  </I></B></FONT></P>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Subsection&nbsp;7.14 shall be deleted in its entirety and replaced with the following: </FONT></P>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.14</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><B>Financial Covenants.</B></FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;Permit
the Fixed Charge Coverage Ratio as of the end of any fiscal quarter to be less than 1.40:1.00. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;Intentionally
Omitted. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;Permit
the Interest Coverage Ratio as of the end of any fiscal quarter to be less than 2.00:1.00. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;Permit
the Unsecured Debt Service Coverage Ratio as of the end of any fiscal quarter to be less than 3.00:1.00. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;Permit
the ratio of Total Combined Debt to Gross Asset Value to exceed 0.55:1.00 at any time; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT> <FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, at any time during a Temporary Leverage Increase,
the ratio shall not exceed 0.575:1.00; and </FONT> <FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>further</I></FONT><FONT SIZE=2>, that for purposes of this </FONT> <FONT SIZE=2><I>Section&nbsp;7.14(e)</I></FONT><FONT
SIZE=2>, Gross Asset Value shall be reduced by an amount equal to the excess, if any, of (x)&nbsp;the sum of the amounts, as on the
date of determination, from clauses (ii), (vi)&nbsp;and (vii)&nbsp;set forth in the definition of "</FONT><FONT SIZE=2><I>Gross Asset Value</I></FONT><FONT SIZE=2>" </FONT> <FONT SIZE=2><I>over</I></FONT><FONT SIZE=2> (y)&nbsp;15% of the sum of the
amounts, as on such date of determination, from clauses (i), (iii), (iv)&nbsp;and (v)&nbsp;set forth in the
definition of "</FONT><FONT SIZE=2><I>Gross Asset Value</I></FONT><FONT SIZE=2>". </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;Permit
the ratio of Total Obligations to Gross Asset Value to exceed 0.65:1.00 at any time; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT> <FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, at any time during a Temporary Leverage Increase,
the ratio shall not exceed 0.675:1.00; and </FONT> <FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>further</I></FONT><FONT SIZE=2>, that for purposes of this </FONT> <FONT SIZE=2><I>Section&nbsp;7.14(f)</I></FONT><FONT
SIZE=2>, Gross Asset Value shall be reduced by an amount equal to the excess, if any, of (x)&nbsp;the sum of the amounts, as on the
date of determination, from clauses (ii), (vi)&nbsp;and (vii)&nbsp;set forth in the definition of "</FONT><FONT SIZE=2><I>Gross Asset Value</I></FONT><FONT SIZE=2>" </FONT> <FONT SIZE=2><I>over</I></FONT><FONT SIZE=2> (y)&nbsp;15% of the sum of the
amounts, as on such date of determination, from clauses (i), (iii), (iv)&nbsp;and (v)&nbsp;set forth in the
definition of "</FONT><FONT SIZE=2><I>Gross Asset Value</I></FONT><FONT SIZE=2>". </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;Permit
the Encumbered Property Debt Coverage Ratio as of the end of any fiscal quarter to be less than 1.50:1.00. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;Permit
the Consolidated Net Worth of the REIT and its Subsidiaries on a consolidated basis to be less at any time than the sum of (x)&nbsp;$3,230,456,000 </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>9</FONT></P>

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<UL>

<P><FONT SIZE=2><I>plus</I></FONT><FONT SIZE=2> (y)&nbsp;85% of the Net Issuance Proceeds of all issuances of Stock or Partnership Units from and after September&nbsp;30, 2002. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding
anything to the contrary contained herein, the Borrowers acknowledge and agree that in determining EBITDA and Net Operating Income for the Borrowers and their
Subsidiaries, any items of net income (or net loss) on account of the operations of an Institutional Joint Venture shall not be included in the determination of EBITDA and/or Net Operating Income
unless the Cash or Cash Equivalents related thereto have been distributed to Borrowers or their Wholly-Owned Subsidiaries which are Guarantors or are otherwise available to be so distributed without
restriction, excluding ordinary course restrictions which limit distributions to a quarterly or more frequent basis. </FONT></P>

</UL>

<P><FONT SIZE=2><B>1.8&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Amendment to Exhibit&nbsp;B&#151;Form&nbsp;of Compliance Certificate.  </I></B></FONT></P>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Exhibit&nbsp;B&#151;Form&nbsp;of Compliance Certificate shall be deleted in its entirety and replaced with
Exhibit&nbsp;B&#151;Form&nbsp;of Compliance Certificate attached hereto as </FONT><FONT SIZE=2><I>Annex I</I></FONT><FONT SIZE=2>. </FONT></P>

<P><FONT SIZE=2><B>Section&nbsp;2. CONDITIONS TO EFFECTIVENESS  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Amendment shall become effective as of the Amendment Effective Date, at such time that all of the following conditions are satisfied: </FONT></P>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Supermajority Lenders shall have executed this Amendment; </FONT></P>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Guarantors and Pledgors shall have executed this Amendment with respect to Section&nbsp;5; </FONT></P>


<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;On or before the Amendment Effective Date, Borrowers shall have paid to Administrative Agent an amendment fee in an
aggregate amount equal to the sum of 20 basis points times the Pro Rata Shares of Combined Commitments of each Lender who is party to this Amendment. The amendment fee will be distributed to each
Lender who is a party to this Amendment in accordance with the foregoing; </FONT></P>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;If required by Administrative Agent, Lenders and their respective counsel shall have received originally executed copies
of one or more favorable written opinions of counsel for Borrowers, Guarantors and Pledgors in form and substance satisfactory to Administrative Agent and its counsel, dated as of the Amendment
Effective Date, with respect to the validity, binding effect and enforceability of this Amendment, and due authorization, execution and delivery thereof, and as to such other matters as Administrative
Agent acting on behalf of Lenders may request; </FONT></P>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Administrative Agent and its counsel shall have received executed resolutions from Borrowers, Guarantors and Pledgors
authorizing the entry into and performance of this Amendment and the Credit Agreement as amended, all in form and substance satisfactory to Administrative Agent and its counsel; </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>10</FONT></P>

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<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Borrowers shall have paid the fees, costs and expenses of Administrative Agent's counsel in connection with this
Amendment; </FONT></P>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;G.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Administrative Agent shall have received evidence satisfactory to it and its counsel that the Casden Agent and the Casden
Lenders (i)&nbsp;have modified, or concurrently with the Amendment Effective Date will modify, the Casden Loan and the Casden Credit Agreement in a manner satisfactory to Administrative Agent and
the Lenders and Administrative Agent shall have been provided with true, correct and complete copies of the documents effecting such modifications to the Casden Loan and Casden Credit Agreement and
(ii)&nbsp;have consented to or waived their right to consent to the Borrowers', Guarantors' and Pledgors' execution and delivery of this Amendment; and </FONT></P>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;H.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Administrative Agent shall have received evidence satisfactory to it and its counsel that the Revolver Agent (as defined
herein) and the Revolver Lenders (i)&nbsp;have modified, or concurrently with the Amendment Effective Date will modify, the Revolver Credit Agreement in a manner satisfactory to Administrative Agent
and the Lenders and Administrative Agent shall have been provided with true, correct and complete copies of the documents effecting such modifications to the Revolver Credit Agreement and
(ii)&nbsp;have consented to or waived their right to consent to the Borrowers', Guarantors' and Pledgors' execution and delivery of this Amendment. </FONT></P>

<P><FONT SIZE=2><B>Section&nbsp;3. BORROWERS' REPRESENTATIONS AND WARRANTIES  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In order to induce the Supermajority Lenders to enter into this Amendment and to amend the Credit Agreement in the manner provided herein, Borrowers represent and
warrant to each Lender that the following statements are true, correct and complete: </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>3.1&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Corporate Power and Authority</I></B></FONT><FONT SIZE=2><B>.</B></FONT><FONT SIZE=2> 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 Amendment Effective
Date; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>3.2&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Authorization of Agreements</I></B></FONT><FONT SIZE=2><B>.</B></FONT><FONT SIZE=2> 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.
Except as disclosed on Schedule&nbsp;3.2, the organizational documents of the Borrowers, Pledgors and Guarantors have not been modified in any material respect since May&nbsp;30, 2003; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>3.3&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>No Default</I></B></FONT><FONT SIZE=2><B>.</B></FONT><FONT SIZE=2> After giving effect to this Amendment, no Default or Event of
Default exists under the Credit Agreement as of the 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; </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>11</FONT></P>

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<P><FONT SIZE=2><A
NAME="page_se2744_1_12"> </A> </FONT> <FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><B>3.4&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>No Conflict</I></B></FONT><FONT SIZE=2><B>.</B></FONT><FONT SIZE=2> The execution, delivery and performance by Borrowers,
Pledgors and Guarantors of this Amendment and the performance of the Amended Agreement by Borrowers, Pledgors and Guarantors does not and will not (i)&nbsp;violate any provision of any applicable
material law or any governmental rule or regulation applicable to Borrowers, Pledgors, Guarantors or any of their Subsidiaries, 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, (ii)&nbsp;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,
(iii)&nbsp;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, or (iv)&nbsp;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 Amendment Effective Date and such approvals or consents disclosed in writing to
Lenders in accordance with Section&nbsp;5.03 of the Credit Agreement; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>3.5&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Governmental Consents</I></B></FONT><FONT SIZE=2><B>.</B></FONT><FONT SIZE=2> 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; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>3.6&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Binding Obligation</I></B></FONT><FONT SIZE=2><B>.</B></FONT><FONT SIZE=2> The Credit Agreement, as amended by this Amendment,
has been duly executed and delivered by Borrowers, Pledgors and Guarantors and is enforceable against Borrowers, Pledgors and Guarantors 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 </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>3.7&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Incorporation of Representations and Warranties From Credit Agreement</I></B></FONT><FONT SIZE=2><B>.</B></FONT><FONT SIZE=2>
After giving effect to this Amendment, the representations and warranties contained in Section&nbsp;5 of the Credit Agreement are and will be true, correct and complete in all material respects on
and as of the Amendment Effective Date to the same extent as though made on and as of 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. </FONT></P>


<P><FONT SIZE=2><B>Section&nbsp;4. MISCELLANEOUS  </B></FONT></P>

<P><FONT SIZE=2><B>4.1&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Reference to and Effect on the Credit Agreement and the Other Loan Documents.  </I></B></FONT></P>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;On and after the Amendment Effective Date, each reference in the Credit Agreement to "this Agreement", "hereunder",
"hereof", "herein" or words of like import </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>12</FONT></P>

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<A NAME="page_se2744_1_13"> </A>

<P><FONT SIZE=2>referring
to the Credit Agreement, and each reference in the other Loan Documents to the "Credit Agreement", "thereunder", "thereof" or words of like import referring to the Credit Agreement shall
mean and be a reference to the Credit Agreement, as amended by this Amendment. </FONT></P>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Except as specifically amended by this Amendment, the Credit Agreement and the other Loan Documents shall remain in full
force and effect and are hereby ratified and confirmed. </FONT></P>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;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 Credit Agreement or any of the other Loan Documents. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>4.2&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Fees and Expenses.</I></B></FONT><FONT SIZE=2> 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. On or before October&nbsp;&nbsp;&nbsp;&nbsp;,
2003, the Borrowers hereby agree to pay the reasonable fees, cost and expenses of Administrative Agent's counsel in connection with this Amendment. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>4.3&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Headings</I></B></FONT><FONT SIZE=2><B>.</B></FONT><FONT SIZE=2> Section&nbsp;and subsection&nbsp;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. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>4.4&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Counterparts; Effectiveness</I></B></FONT><FONT SIZE=2><B>.</B></FONT><FONT SIZE=2> 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&nbsp;may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages&nbsp;are physically
attached to the same document. This Amendment shall become effective upon the execution of a counterpart hereof by each Borrower and each Lender, and receipt by Borrowers and Administrative Agent of
written, facsimile or telephonic notification of such execution and authorization of delivery thereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>4.5&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Entire Agreement</I></B></FONT><FONT SIZE=2>. This Amendment embodies the entire agreement and understanding among the
parties with respect to the amendment to the Credit Agreement, and supersedes all prior agreements and understandings, oral or written, relating thereto. </FONT></P>

<P><FONT SIZE=2><B>Section&nbsp;5. ACKNOWLEDGEMENT AND CONSENT  </B></FONT></P>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Guarantors are party to that certain Amended and Restated Payment Guaranty, dated as of May&nbsp;30, 2003, to the extent
amended hereby, pursuant to which Guarantors have guarantied the Obligations. Pledgors are party to that certain Borrowers Pledge Agreement, dated as of May&nbsp;30, 2003, to the extent amended
hereby, pursuant to which Pledgors have pledged the Pledged Collateral as security for the Secured Obligations (as defined in the Borrowers Pledge Agreement). </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>13</FONT></P>

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<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each Guarantor and each Pledgor hereby acknowledges that it has reviewed the terms and provisions of the Credit Agreement
and this Amendment and consents to the amendment of the Credit Agreement effected pursuant to this Amendment. Each Guarantor 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 "Indebtedness" (as defined in the applicable Guaranty) or the "Secured Obligations" (as defined in the Borrowers Pledge Agreement), as the case may be, including
without limitation the payment and performance of all such "Indebtedness" or "Secured Obligations", as the case may be, with respect to the Obligations of Borrowers now or
hereafter existing under or in respect of the Credit Agreement (as amended hereby) and the Notes defined therein. </FONT></P>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;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 Credit Agreement and 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 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. </FONT></P>


<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each Guarantor and each Pledgor acknowledges and agrees that (i)&nbsp;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 Credit Agreement or any other Loan Document to consent to the amendments to the
Credit Agreement effected pursuant to this Amendment and (ii)&nbsp;nothing in the Credit 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 Credit Agreement. </FONT></P>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each Lender hereby (i)&nbsp;acknowledges that it has received and reviewed the terms and provisions of that certain
Sixth Amendment to Interim Credit Agreement, dated as of September&nbsp;30, 2003 (the "</FONT><FONT SIZE=2><I>Casden Amendment</I></FONT><FONT SIZE=2>") among the REIT, AIMCO, NHP Management
(collectively, the "</FONT><FONT SIZE=2><I>Casden Borrowers</I></FONT><FONT SIZE=2>"), Lehman Commercial Paper&nbsp;Inc., as administrative agent, syndication agent and a lender
("</FONT><FONT SIZE=2><I>Lehman</I></FONT><FONT SIZE=2>"), each lender from time to time party thereto, and Lehman Brothers&nbsp;Inc., as sole lead arranger, and (ii)&nbsp;consents to the
modifications and amendments as set forth in the Casden Amendment to the Casden Credit Agreement and the Casden Loan Documents. </FONT></P>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each Lender hereby (i)&nbsp;acknowledges that it has received and reviewed the terms and provisions of that certain
Third Amendment to Fifth Amended and Restated Credit Agreement, dated as of September&nbsp;30, 2003 (the "</FONT><FONT SIZE=2><I>Revolver Amendment</I></FONT><FONT SIZE=2>") among the REIT, </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>14</FONT></P>

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<P><FONT SIZE=2>AIMCO,
NHP Management and AIMCO/Bethesda (collectively, the "</FONT><FONT SIZE=2><I>Revolver Borrowers</I></FONT><FONT SIZE=2>"), Bank of America, N.A., as administrative agent and letter of credit
issuing lender (in such capacity, the "</FONT><FONT SIZE=2><I>Revolver Agent</I></FONT><FONT SIZE=2>"), and each lender from time to time party thereto, and (ii)&nbsp;consents to the
modifications and amendments as set forth in the Revolver Amendment to the Revolver Credit Agreement and the Revolver Loan Documents. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>[Signatures
on Next Page] </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>15</FONT></P>

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