LITIGATION SETTLEMENT OFFER

                                  (AIMCO LOGO)

                             AIMCO PROPERTIES, L.P.
        is offering to purchase any and all limited partnership units in

                              ANGELES PARTNERS XII
                          FOR $806.31 PER UNIT IN CASH

    This Litigation Settlement Offer is our second offer being made as part of a
COURT APPROVED SETTLEMENT of class and derivative litigation brought on behalf
of limited partners in your partnership and others. FINAL COURT APPROVAL OF THE
SETTLEMENT HAS BEEN OBTAINED. On August 12, 2003, an objector filed an appeal of
the court's order approving the settlement and is seeking to reverse or vacate
the Court's order and the judgment entered thereto. Although we reserve our
right to terminate or amend our offer if final court approval of the settlement
is reversed or vacated, we have nevertheless elected to proceed with this offer
under the terms of the settlement. Under the terms of the settlement, the Court
appointed American Appraisal Associates, Inc., as an independent appraiser, to
appraise your partnership's properties and we agreed to provide an executive
summary of the appraiser's report for each property owned by your partnership,
attached as Annex II. A complete copy of the appraiser's report will be provided
to you free of charge upon request. THE SETTLEMENT ALSO INCLUDES THE CREATION OF
A $9.9 MILLION SETTLEMENT FUND FOR MEMBERS OF THE SETTLEMENT CLASS. AFTER
DEDUCTING ATTORNEYS' FEES AND OTHER SETTLEMENT COSTS (INCLUDING A PORTION OF THE
COSTS OF THE APPRAISALS AND CERTAIN COSTS OF ADMINISTRATION OF THE SETTLEMENT
FUND), WE ALLOCATED THE REMAINING AMOUNT IN THE SETTLEMENT FUND AMONG THE 44
REMAINING PARTNERSHIPS INVOLVED IN THE SETTLEMENT, AS PROVIDED FOR UNDER THE
TERMS OF THE SETTLEMENT, PRO RATA BASED ON PARTNERSHIP REVENUE FOR THE YEAR
ENDED DECEMBER 31, 2002 ALLOCABLE TO UNITS HELD BY THE MEMBERS OF THE SETTLEMENT
CLASS. YOUR PRO RATA SHARE OF THE SETTLEMENT FUND IS $23.83 PER UNIT, WHICH IS
INCLUDED IN OUR OFFER PRICE ABOVE FOR THOSE WHO TENDER.

    Upon the terms and subject to the conditions set forth herein, we will
accept any and all units validly tendered in response to our offer.

    You will not pay any partnership transfer fees if you tender your units
pursuant to this offer. You will pay any other fees or costs, including any
transfer taxes.

    Our offer price will be reduced for any distributions subsequently made or
declared by your partnership prior to the expiration of our offer.

    Our offer and your withdrawal rights will expire at midnight, New York City
time, on December 6, 2004, unless we extend the deadline.

    Neither the court nor counsel for the parties in the class and derivative
litigation make any recommendation regarding whether you should accept this
Litigation Settlement Offer. You are encouraged to carefully review this
Litigation Settlement Offer, the executive summary of the independent
appraiser's report (attached as Annex II) and any other information available to
you and to seek advice from your independent lawyer, tax advisor and/or
financial advisor with respect to your particular circumstances before deciding
whether or not to accept this Litigation Settlement Offer.

     SEE "RISK FACTORS" BEGINNING ON PAGE 5 OF THIS LITIGATION SETTLEMENT OFFER
FOR A DESCRIPTION OF RISK FACTORS THAT YOU SHOULD CONSIDER IN CONNECTION WITH
OUR OFFER, INCLUDING THE FOLLOWING:

    - If you want to tender your units in the offer, you must sign a letter of
      transmittal in which you release us from all liability with respect to
      claims that were brought or that could have been brought in the class and
      derivative litigation, and assign to us your rights in any future claims.
      If you requested exclusion from the settlement but tender your units, by
      signing the letter of transmittal, you will release us from any claims
      that you would otherwise have preserved by requesting exclusion from the
      settlement class. If you did not request exclusion, you will release any
      known or unknown claims arising out of the class and derivative litigation
      if the judgment approving the settlement is affirmed on appeal. By
      executing the enclosed letter of transmittal, moreover, you will release
      those claims even if the judgment is reversed or otherwise vacated on
      appeal.

(Continued on next page)

    If you decide to accept our offer, you must complete and sign the enclosed
letter of transmittal in accordance with the instructions thereto and mail or
deliver the signed letter of transmittal and any other required documents to The
Altman Group, Inc., which is acting as Information Agent in connection with our
offer, at one of its addresses set forth on the back cover of this Litigation
Settlement Offer. QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES
OF THIS LITIGATION SETTLEMENT OFFER, THE LETTER OF TRANSMITTAL OR FOR A COMPLETE
COPY OF AN APPRAISAL OF ANY OF YOUR PARTNERSHIP'S PROPERTIES MAY ALSO BE
DIRECTED TO THE INFORMATION AGENT AT (800) 467-0821.

                                November 4, 2004


(Continued from prior page)

    - We determined our offer price without any arms-length negotiations. Our
      offer price has not been approved by the court or counsel for the parties
      in the class and derivative litigation.

    - Our offer price may not reflect the fair market value of your units. We
      determined our offer price by estimating a net equity value for your
      partnership units based on an aggregate gross property value equal to
      89.9% of the aggregate value determined by the independent appraisal in
      2003, then reduced by any prepayment penalties. As a result, our offer
      price is less than our estimate of the liquidation proceeds that would be
      payable to you if your partnership's properties were sold at prices equal
      to their appraised values in 2003, which we estimate to be $1,067.22 per
      unit. Our offer price does not take into account any increase in value
      since the 2003 appraisal was completed, and does not take into account any
      increases in property income that may result in the near future.

    - Your general partner and the property manager are affiliates of ours and,
      therefore, your general partner has substantial conflicts of interest with
      respect to our offer.

    - We are making this offer with a view to making a profit and, therefore,
      there is a conflict between our desire to purchase your units at a low
      price and your desire to sell your units at a high price.

    - Continuation of your partnership will result in our affiliates continuing
      to receive management fees from your partnership. Such fees would not be
      payable if your partnership were liquidated.

    - If we do not acquire all of the outstanding units in your partnership, it
      is possible that we may conduct a future offer at a higher price, although
      we have no obligation or current intention to do so.

    - For any units that we acquire from you, you will not receive any future
      distributions from operating cash flow of your partnership or upon a sale
      or refinancing of property owned by your partnership.

    - The general partner makes no recommendation as to whether you should
      tender your units.

    NEITHER THE COURT NOR COUNSEL FOR THE PARTIES IN THE CLASS AND DERIVATIVE
LITIGATION MAKE ANY RECOMMENDATION REGARDING WHETHER YOU SHOULD ACCEPT THIS
LITIGATION SETTLEMENT OFFER. YOU ARE ENCOURAGED TO CAREFULLY REVIEW THIS
LITIGATION SETTLEMENT OFFER, THE EXECUTIVE SUMMARY OF THE INDEPENDENT
APPRAISER'S REPORT AND ANY OTHER INFORMATION AVAILABLE TO YOU AND TO SEEK THE
ADVICE OF YOUR INDEPENDENT LAWYER, TAX ADVISOR AND/OR FINANCIAL ADVISOR WITH
RESPECT TO YOUR PARTICULAR CIRCUMSTANCES BEFORE DECIDING WHETHER OR NOT TO
ACCEPT THIS LITIGATION SETTLEMENT OFFER.

    THIS LITIGATION SETTLEMENT OFFER IS BEING OFFERED TO ALL CURRENT UNITHOLDERS
WHETHER OR NOT THEY HAVE REQUESTED EXCLUSION FROM THE SETTLEMENT CLASS. IF YOU
REQUESTED EXCLUSION FROM THE SETTLEMENT CLASS BUT TENDER YOUR UNITS, BY SIGNING
THE LETTER OF TRANSMITTAL, YOU WILL RELEASE US FROM CLAIMS THAT YOU WOULD
OTHERWISE HAVE PRESERVED BY REQUESTING EXCLUSION. IF YOU DID NOT REQUEST
EXCLUSION, YOU WILL RELEASE ANY KNOWN OR UNKNOWN CLAIMS ARISING OUT OF THE CLASS
AND DERIVATIVE LITIGATION IF THE JUDGMENT APPROVING THE SETTLEMENT IS AFFIRMED
ON APPEAL. BY EXECUTING THE ENCLOSED LETTER OF TRANSMITTAL, MOREOVER, YOU WILL
RELEASE THOSE CLAIMS EVEN IF THE JUDGMENT IS REVERSED OR OTHERWISE VACATED ON
APPEAL.

                    THE INFORMATION AGENT FOR THE OFFER IS:

                             THE ALTMAN GROUP, INC.

<Table>
                                                          
           By Mail:                  By Overnight Courier:                 By Hand:
         P.O. Box 238              1275 Valley Brook Avenue        1275 Valley Brook Avenue
      Lyndhurst, NJ 07071             Lyndhurst, NJ 07071             Lyndhurst, NJ 07071
</Table>

                         For information, please call:

                           TOLL FREE: (800) 467-0821


                               TABLE OF CONTENTS

<Table>
<Caption>
                                                              PAGE
                                                              ----
                                                           
SUMMARY TERM SHEET..........................................     1
RISK FACTORS................................................     5
  If you tender your units in this offer, you will release
     us from all liability and assign to us your rights in
     any future claims, whether or not you requested
     exclusion from the settlement or the judgment is
     reversed on appeal.....................................     5
  We determined our offer price without any arms-length
     negotiations...........................................     5
  Our offer price may not represent fair market value for
     your units.............................................     5
  Our offer price may not reflect the fair value of your
     partnership's properties...............................     5
  Continuation of the partnership; no time frame regarding
     sale of property.......................................     5
  Holding your units may result in greater future value.....     6
  The general partner faces conflicts of interest with
     respect to this offer..................................     6
  Your general partner is not making a recommendation
     regarding this offer...................................     6
  Your general partner faces conflicts of interest relating
     to management fees.....................................     6
  If we do not acquire all of the outstanding units in this
     offer, we may make a future offer at a higher price....     6
  Your tax liability resulting from a sale of your units
     could exceed our offer price...........................     6
  You may recognize taxable gain on the amount paid from the
     settlement fund if you did not request exclusion from
     the settlement or for release and assignment of claims
     if you requested exclusion from the settlement.........     7
  If you tender your units in this offer, you will no longer
     be entitled to distributions from your partnership.....     7
  You could recognize gain in the event of a future
     reduction in your partnership's liabilities............     7
  You could be precluded from transferring your units for a
     12-month period........................................     8
  We could delay acceptance of, and payment for, your
     units..................................................     8
  There may be a possible reduction of available information
     about your partnership as a result of this offer.......     8
  Your partnership has balloon payments on its mortgage
     debt...................................................     8
THE LITIGATION SETTLEMENT OFFER.............................     9
   1. Terms of the Offer; Expiration Date...................     9
   2. Acceptance for Payment and Payment for Units..........     9
   3. Procedure for Tendering Units.........................    10
   4. Withdrawal Rights.....................................    13
   5. Extension of Tender Period; Termination; Amendment; No
     Subsequent Offering Period.............................    14
   6. Material Federal Income Tax Matters...................    15
   7. Effects of the Offer..................................    18
   8. Valuation of Units....................................    19
   9. The Lawsuit and the Settlement........................    39
  10. Information Concerning Us and Certain of Our
     Affiliates.............................................    45
  11. Background and Reasons for the Offer..................    49
  12. Position of the General Partner of Your Partnership
     With Respect to the Offer..............................    50
  13. Conflicts of Interest and Transactions with
     Affiliates.............................................    53
  14. Future Plans of the Purchaser.........................    55
  15. Certain Information Concerning Your Partnership.......    56
  16. Voting Power..........................................    62
</Table>


<Table>
<Caption>
                                                              PAGE
                                                              ----
                                                           
  17. Source of Funds.......................................    62
  18. Dissenters' Rights....................................    63
  19. Conditions to the Offer...............................    63
  20. Certain Legal Matters.................................    65
  21. Fees and Expenses.....................................    65
ANNEX I -- OFFICERS AND DIRECTORS...........................   I-1
ANNEX II -- EXECUTIVE SUMMARY OF INDEPENDENT APPRAISER'S
  REPORT....................................................  II-1
</Table>

                                        ii


                               SUMMARY TERM SHEET

     This summary term sheet highlights the material information regarding our
offer, but it does not describe all of the details thereof. We urge you to read
this entire Litigation Settlement Offer, which contains the full details of our
offer. We have also included in the summary term sheet references to the
sections of this Litigation Settlement Offer where a more complete discussion
may be found. Unless otherwise indicated, references in this Litigation
Settlement Offer to "we," "our," "us" or "AIMCO Properties" refer to AIMCO
Properties, L.P.

     - The Litigation Settlement Offer.  As part of the settlement of a class
       and derivative litigation entitled Nuanes et al. v. Insignia Financial
       Group, Inc. et al. and Heller v. Insignia Financial Group, Inc., et al.
       on behalf of your partnership and limited partners in your partnership
       and others, we are offering to acquire any and all of the limited
       partnership units of your partnership for $806.31 per unit in cash. Under
       the terms of the settlement, neither we nor our affiliates admit to any
       wrongdoing, and we deny liability under all claims brought in this
       litigation. FINAL COURT APPROVAL OF THE SETTLEMENT HAS BEEN OBTAINED.  On
       August 12, 2003, an objector filed an appeal of the court's order
       approving the settlement and is seeking to reverse or vacate the Court's
       order and the judgment entered thereto. Although we reserve our right to
       terminate or amend our offer if final court approval of the settlement is
       reversed or vacated, we have nevertheless elected to proceed with this
       offer under the terms of the settlement. See "The Litigation Settlement
       Offer -- Section 1. Terms of the Offer; Expiration Date," "-- Section 7.
       Effects of the Offer," "-- Section 8. Valuation of Units" and "-- Section
       9. The Lawsuit and the Settlement."

     - The Settlement Fund.  The settlement also includes the creation of a $9.9
       million settlement fund for members of the settlement class. After
       deducting attorneys' fees and other settlement costs (including a portion
       of the costs of the appraisals and certain costs of administration of the
       settlement fund), we have allocated the remaining amount in the
       settlement fund among the 44 remaining partnerships involved in the
       settlement, as provided for under the terms of the settlement, pro rata
       based on partnership revenue for the year ended December 31, 2002
       allocable to units held by the members of the settlement class. Your
       partnership's allocated share of the settlement fund is divided by the
       total number of units owned by members of the settlement class, and the
       resulting amount is included in our offer price above. Your pro rata
       share of the settlement fund is $23.83 per unit. If you request exclusion
       from the settlement, you may tender any units in this offer and you will
       be entitled to receive the same price per unit as those unitholders who
       have not opted out of the settlement class. However, no portion of the
       price paid to you will come from the settlement fund.

       If you do not request exclusion from the settlement and do not tender any
       units in this offer, you will be entitled to receive your pro rata share
       of the settlement fund (subject to adjustment) no later than June 2005
       provided that the Court's order approving the settlement and entering
       judgment thereto is affirmed on appeal and is final. If the Court's order
       is reversed or vacated by virtue of the appeal, however, you will not be
       entitled to receive a pro rata share of the settlement fund unless you
       tender your units in this offer.

       Under the terms of the settlement, we will pay the costs of printing and
       mailing this Litigation Settlement Offer to limited partners of your
       partnership, as well as other costs of notice. In addition, we paid 50%
       of the costs of the appraisals, with the other 50% paid from the
       settlement fund.

     - Factors in Determining the Offer Price.  In determining the offer price
       per unit we principally considered:

       - the 2003 appraisal of your partnership's properties;

       - the location, condition and debt structure of your partnership's
         properties, including the prepayment penalty associated with the
         mortgages for these properties;

                                        1


       - the gross potential revenues of your partnership's properties;

       - the current economics of the properties' physical markets; and

      - your partnership's other assets and liabilities.

     - Price May Not Reflect Fair Market Value.  In deciding whether or not to
       accept our offer, you should consider the fact that, based on the
       valuation in 2003 of your partnership's property by American Appraisal
       Associates, Inc., we estimate that the net liquidation proceeds per unit
       would be approximately $1,067.22, which is higher than our offer price of
       $806.31. Our offer price does not take into account any increase in value
       since the 2003 appraisal was completed, and does not take into account
       any increases in property income that may result in the near future. In
       addition, in a prior tender offer in 2000, we offered $804.00 per unit
       for units in your limited partnership. See "The Litigation Settlement
       Offer -- Section 8. Valuation of Units -- Prior Tender Offers" and
       "-- Prices on Secondary Market."

     - Expiration Date.  Our offer expires on December 6, 2004, unless extended,
       and you can tender your units until our offer expires. See "The
       Litigation Settlement Offer -- Section 1. Terms of the Offer; Expiration
       Date."

     - Right to Extend the Expiration Date.  Under the settlement, we can extend
       the expiration date of the offer in our sole discretion up to 120
       business days from the date of commencement. We reserve the right to
       extend the offer subject to customary conditions. In the event we extend
       the offer, we will issue a press release or other public announcement no
       later than 9:00 a.m., New York City time, on the next business day after
       the scheduled expiration date of the offer, in accordance with Rule
       14e-1(d) of the Securities Exchange Act of 1934. See "The Litigation
       Settlement Offer -- Section 5. Extension of Tender Period; Termination;
       Amendment; No Subsequent Offering Period."

     - How to Tender.  To tender your units, complete the accompanying letter of
       transmittal and send it, along with any other documents required by the
       letter of transmittal, to the Information Agent, The Altman Group, Inc.,
       at one of the addresses set forth on the back of this Litigation
       Settlement Offer. See "The Litigation Settlement Offer -- Section 3.
       Procedure for Tendering Units."

     - Release and Assignment of Future Claims.  If you want to tender your
       units in the offer, you must sign a letter of transmittal in which you
       release us from all liability with respect to claims that were brought or
       that could have been brought in the class and derivative litigation, and
       assign to us your rights in any future claims. If you requested exclusion
       from the settlement but tender your units, by signing the letter of
       transmittal, you will release us from claims that you would otherwise
       have preserved by requesting exclusion from the settlement class. If you
       did not request exclusion, you will release any known or unknown claims
       arising out of the class and derivative litigation if the judgment
       approving the settlement is affirmed on appeal. By executing the enclosed
       letter of transmittal, moreover, you will release those claims even if
       the judgment is reversed or otherwise vacated on appeal.

     - Covenant Not to Sue.  If you requested exclusion from the settlement but
       tender your units in this offer, by signing the letter of transmittal,
       you agree not to bring any action, claim, suit or proceeding against us
       and those affiliates who were defendants in the class and derivative
       litigation concerning any of the matters that are the subject of the
       Stipulation of Settlement approved by the Court in connection with the
       settlement of such class and derivative litigation, including this
       Litigation Settlement Offer, other than for violations of federal or
       state securities laws. If you do not request exclusion from the
       settlement class, you will already have agreed not to bring any such
       action, claim, suit or proceeding once the settlement is final.

     - Withdrawal Rights.  You can withdraw your units at any time prior to the
       expiration of the offer, including any extensions. In addition, you can
       withdraw your units at any time on or after January 3, 2005 if we have
       not already accepted units for purchase and payment. If you properly

                                        2


       withdraw all of the units you previously tendered in the offer, the
       corresponding letter of transmittal, including your release and
       assignment of future claims contained therein, will be deemed revoked and
       of no force or effect. See "The Litigation Settlement Offer -- Section 4.
       Withdrawal Rights."

     - How to Withdraw.  To withdraw your units, you need to send a notice of
       withdrawal to the Information Agent, identifying yourself and the units
       to be withdrawn. See "The Litigation Settlement Offer -- Section 4.
       Withdrawal Rights."

     - Tax Consequences.  Your sale of units in this offer will be a taxable
       transaction for federal income tax purposes. The consequences to each
       limited partner may vary and you should consult your tax advisor on the
       precise tax consequences to you. See "The Litigation Settlement
       Offer -- Section 6. Material Federal Income Tax Matters."

     - Availability of Funds.  We intend to pay the purchase price for any units
       tendered from our existing cash balances or borrowings under our line of
       credit. See "The Litigation Settlement Offer -- Section 17. Source of
       Funds."

     - Conditions to the Offer.  There are a number of conditions to our offer,
       including the absence of competing tender offers, that there be no
       material change with respect to our financial condition, and the absence
       of certain changes in the financial markets. If we are unable to accept
       the units tendered in this Litigation Settlement Offer due to a failure
       of any or all of the conditions of our offer to be satisfied, we will
       conduct another offer in accordance with the terms of the settlement
       (which will occur no later than six months after the date of the
       commencement of this offer). We will continue this process until we have
       accepted for payment all units properly tendered in an offer conducted in
       accordance with the terms of the settlement. See "The Litigation
       Settlement Offer -- Section 19. Conditions to the Offer."

     - Remaining as a Limited Partner.  If you do not tender your units, you
       will remain a limited partner in your partnership. We have no plans to
       alter the operations, business or financial position of your partnership.
       However, if there are fewer than 300 unitholders in your partnership as a
       result of the offer, your partnership will no longer be required to file
       periodic reports with the SEC, such as annual reports on Form 10-KSB
       containing annual audited financial statements, and quarterly reports on
       Form 10-QSB containing unaudited financial statements. See "The
       Litigation Settlement Offer -- Section 7. Effects of the Offer."

     - Who We Are.  We are AIMCO Properties, L.P., the operating partnership of
       Apartment Investment and Management Company, a New York Stock
       Exchange-listed company. See "The Litigation Settlement Offer -- Section
       10. Information Concerning Us and Certain of Our Affiliates."

     - Conflicts of Interest.  NHP Management Company (which is our affiliate)
       receives fees for managing your partnership's property and the general
       partner of your partnership (which is our affiliate) is entitled to
       receive asset management fees and reimbursement of certain expenses
       involving your partnership and its property. As a result, a conflict of
       interest exists between continuing the partnership and receiving these
       fees, and the liquidation of the partnership and the termination of these
       fees. See "The Litigation Settlement Offer -- Section 13. Conflicts of
       Interest and Transactions with Affiliates" and "-- Section 15. Certain
       Information Concerning Your Partnership."

     - No General Partner Recommendation.  The general partner of your
       partnership makes no recommendation as to whether you should tender or
       refrain from tendering your units. Each limited partner should make his
       or her own decision whether or not to tender. YOU ARE ENCOURAGED TO
       CAREFULLY REVIEW THIS LITIGATION SETTLEMENT OFFER, THE EXECUTIVE SUMMARY
       OF THE INDEPENDENT APPRAISER'S REPORT (ATTACHED AS ANNEX II) AND ANY
       OTHER INFORMATION AVAILABLE TO YOU AND TO SEEK ADVICE FROM YOUR
       INDEPENDENT LAWYER, TAX ADVISOR AND/OR FINANCIAL ADVISOR WITH RESPECT TO
       YOUR PARTICULAR CIRCUMSTANCES BEFORE DECIDING WHETHER OR NOT TO ACCEPT
       THIS LITIGATION SETTLEMENT OFFER.

                                        3


       See "The Litigation Settlement Offer -- Section 12. Position of the
       General Partner of Your Partnership With Respect to the Offer."

     - Fairness of the Offer.  Although we, Apartment Investment and Management
       Company ("AIMCO") and AIMCO-GP, Inc. (collectively, the "AIMCO Entities")
       and your general partner have interests that may conflict with those the
       partnership's unaffiliated limited partners, each of the AIMCO Entities
       believes that the offer price and the offer are fair to the unaffiliated
       limited partners of your partnership. This determination is based on the
       information and the factors set forth under "The Litigation Settlement
       Offer -- Section 12. Position of Your General Partner of Your Partnership
       With Respect to the Offer."

     - No Subsequent Offering Period.  We do not currently intend to have a
       subsequent offering period after the expiration date of the initial
       offering period (including any extensions). See "The Litigation
       Settlement Offer -- Section 5. Extension of Tender Offer Period;
       Termination; Amendment; No Subsequent Offering Period."

     - Additional Information.  For assistance in tendering your units, please
       contact our Information Agent at one of the addresses or the telephone
       number set forth on the back cover page of this Litigation Settlement
       Offer.

     - No Recommendation by Court or Counsel for the Parties.  Neither the court
       nor counsel for the parties in the class and derivative litigation make
       any recommendation regarding whether you should accept this Litigation
       Settlement Offer. You are encouraged to carefully review this Litigation
       Settlement Offer, the executive summary of the independent appraiser's
       report and any other information available to you and to seek the advice
       of your independent lawyer, tax advisor and/or financial advisor with
       respect to your particular circumstances before deciding whether or not
       to accept this Litigation Settlement Offer.

                                        4


                                  RISK FACTORS

     Before deciding whether or not to tender any of your units, you should
consider carefully the following risks and disadvantages of the offer:

IF YOU TENDER YOUR UNITS IN THIS OFFER, YOU WILL RELEASE US FROM ALL LIABILITY
AND ASSIGN TO US YOUR RIGHTS IN ANY FUTURE CLAIMS, WHETHER OR NOT YOU REQUESTED
EXCLUSION FROM THE SETTLEMENT OR THE JUDGMENT IS REVERSED ON APPEAL.

     If you want to tender your units in response to our offer, you must sign a
letter of transmittal, in which you release us and our affiliates from all
liability with respect to claims that were brought or that could have been
brought in the class and derivative litigation, and assign to us your rights in
any future claims. If you requested exclusion from the settlement but tender
your units, by signing the letter of transmittal, you will release us from
claims that you would otherwise have preserved by requesting exclusion from the
settlement class. If you did not request exclusion, you will release any known
or unknown claims arising out of the class and derivative litigation if the
judgment approving the settlement is affirmed on appeal. By executing the
enclosed letter of transmittal, moreover, you will release those claims even if
the judgment is reversed or otherwise vacated on appeal.

WE DETERMINED OUR OFFER PRICE WITHOUT ANY ARMS-LENGTH NEGOTIATIONS.

     Our offer price has not been approved by the court or counsel for the
parties in the class and derivative litigation. Our offer price might be higher
if it were subject to independent third party negotiations.

OUR OFFER PRICE MAY NOT REPRESENT FAIR MARKET VALUE FOR YOUR UNITS.

     There is no established or regular trading market for your units, nor is
there another reliable standard for determining the fair market value of the
units. Our offer price does not necessarily reflect the price that you would
receive in an open market for your units. Such prices could be higher than our
offer price.

OUR OFFER PRICE MAY NOT REFLECT THE FAIR VALUE OF YOUR PARTNERSHIP'S PROPERTIES.

     We determined our offer price by estimating a net equity value for your
partnership units based on an aggregate gross property value equal to 89.9% of
the aggregate value determined by the independent appraisal in 2003, then
reduced by any prepayment penalties. As a result, our offer price is less than
our estimate of the liquidation proceeds that would be payable to you if your
partnership's properties were sold at prices equal to their 2003 appraised
values, which we estimate to be $1,067.22 per unit. Our offer price does not
take into account any increase in value since the 2003 appraisal was completed,
and does not take into account any increases in property income that may result
in the near future.

CONTINUATION OF THE PARTNERSHIP; NO TIME FRAME REGARDING SALE OF PROPERTY.

     Your general partner, which is our affiliate, is proposing to continue to
operate your partnership and not to attempt to liquidate it at the present time.
It is not known when the properties owned by your partnership may be sold. The
market for units in the partnership is illiquid, and it may be difficult to sell
your investment in the partnership in the future. The general partner of your
partnership continually considers whether a property should be sold or otherwise
disposed of after consideration of relevant factors, including prevailing
economic conditions, availability of favorable financing and tax considerations,
with a view to achieving maximum capital appreciation for your partnership. At
the current time, the general partner of your partnership believes that a sale
of the properties would not be advantageous given market conditions, the
condition of the properties and tax considerations. In particular, the general
partner considered the changes in the local rental markets, the potential for
appreciation in the value of a property and the tax consequences to you on a
sale of property. We cannot predict when your partnership's properties will be
sold or otherwise disposed of.

                                        5


HOLDING YOUR UNITS MAY RESULT IN GREATER FUTURE VALUE.

     Although a liquidation of your partnership is not currently contemplated in
the near future, you might receive more value if you retain your units until
your partnership is liquidated. In addition, at the current time, the general
partner of your partnership believes that selling the properties would not be
advantageous given market conditions, the condition of the properties and tax
considerations. If your partnership's properties were sold in the future and the
net proceeds realized therefrom were distributed to the limited partners of your
partnership, the amount of such distributions might exceed our current offer
price.

THE GENERAL PARTNER FACES CONFLICTS OF INTEREST WITH RESPECT TO THIS OFFER.

     The general partner of your partnership is our affiliate and, therefore,
has substantial conflicts of interest with respect to our offer. We are making
this offer with a view to making a profit. There is a conflict between our
desire to purchase your units at a low price and your desire to sell your units
at a high price. We determined our offer price without negotiation with any
other party, including any general or limited partner.

YOUR GENERAL PARTNER IS NOT MAKING A RECOMMENDATION REGARDING THIS OFFER.

     Your general partner of your partnership (which is our affiliate) makes no
recommendation as to whether or not you should tender or refrain from tendering
your units. Although the general partner believes the offer is fair, you must
make your own decision whether or not to participate in the offer based upon a
number of factors, including several factors that may be personal to you, such
as your financial position, your need or desire for liquidity, your preferences
regarding the timing of when you might wish to sell your units, other financial
opportunities available to you, and your tax position and the tax consequences
to you of selling your units. You are encouraged to carefully review this
Litigation Settlement Offer, the executive summary of the independent
appraiser's report (attached as Annex II) and any other information available to
you and to seek advice from your independent lawyer, tax advisor and/or
financial advisor with respect to your particular circumstances before deciding
whether or not to accept this Litigation Settlement Offer.

YOUR GENERAL PARTNER FACES CONFLICTS OF INTEREST RELATING TO MANAGEMENT FEES.

     Because we or our subsidiaries receive fees for managing your partnership
and its property, a conflict of interest exists between continuing the
partnership and receiving such fees, and the liquidation of the partnership and
the termination of such fees.

IF WE DO NOT ACQUIRE ALL OF THE OUTSTANDING UNITS IN THIS OFFER, WE MAY MAKE A
FUTURE OFFER AT A HIGHER PRICE.

     It is possible that we may conduct a future offer at a higher price,
although we have no obligation or current intention to do so. Our decision to
conduct a future offer will depend on, among other things, the performance of
the partnership, prevailing economic conditions, and our interest in acquiring
additional units.

YOUR TAX LIABILITY RESULTING FROM A SALE OF YOUR UNITS COULD EXCEED OUR OFFER
PRICE.

     Your sale of units for cash will be a taxable sale, with the result that
you will recognize taxable gain or loss measured by the difference between the
amount realized on the sale and your adjusted tax basis in the units of limited
partnership interest of your partnership you transfer to us. The "amount
realized" with respect to a unit of limited partnership interest you transfer to
us will be equal to the sum of the amount of cash received by you for the unit
sold pursuant to the offer plus the amount of partnership liabilities allocable
to your unit. Depending on your basis in the units and your tax position, your
tax liability resulting from a sale of units to us pursuant to the offer could
exceed our offer price. The particular tax consequences for you of our offer
will depend upon a number of factors related to your tax situation, including
your tax basis in the units you transfer to us, whether you dispose of all of
your units, and

                                        6


whether you have available suspended passive losses, credits or other tax items
to offset any gain recognized as a result of your sale of your units. We may
also be required by state or local tax laws to withhold a portion of our offer
price. Because the income tax consequences of tendering units will not be the
same for everyone, you should consult your tax advisor to determine the tax
consequences of the offer to you.

YOU MAY RECOGNIZE TAXABLE GAIN ON THE AMOUNT PAID FROM THE SETTLEMENT FUND IF
YOU DID NOT REQUEST EXCLUSION FROM THE SETTLEMENT OR FOR RELEASE AND ASSIGNMENT
OF CLAIMS IF YOU REQUESTED EXCLUSION FROM THE SETTLEMENT.

     Our offer price includes your pro rata share of the settlement fund ($23.83
per unit), unless you request exclusion from the settlement or the Court's order
approving the settlement is reversed or vacated by virtue of the appeal. If you
request exclusion from the settlement or the Court's order approving the
settlement is reversed or vacated by virtue of the appeal, an equivalent portion
of the price paid to you may nevertheless be deemed a payment for your release
and assignment of claims. We intend to treat the entire offer price as
consideration paid to you for your units, regardless of whether you requested
exclusion from the settlement. The proper treatment for federal income tax
purposes of your receipt of amounts from the settlement fund or as a deemed
payment for your release and assignment of claims is uncertain under current
law. No opinion or assurance can be given that the Internal Revenue Service (the
"IRS") will not challenge the treatment of the $23.83 portion of the offer price
as a separate payment from the settlement fund or deemed payments for your
release and assignment of claims and not as additional consideration for the
units, and assert that, in either case, the $23.83 portion should be treated as
an ordinary income payment in exchange for your release and/or assignment of
current and future claims. Moreover, while the IRS has stated that it generally
will not treat attorneys' fees and costs that are paid directly to class counsel
from a settlement fund as constituting income, profit, or gain of a member of
the class (so long as the class is an opt-out class and the class member does
not have a separate contingency fee arrangement with the class counsel), any
special awards paid to claimants who actively aid in the prosecution of a class
action or who devote substantial time or expense on behalf of a settlement class
will be treated as payments for services rendered and will be includable in that
member's gross income. You should consult your tax advisor regarding the tax
consequences to you with respect to your right to, and your receipt of, amounts
from the settlement fund or deemed payments for your release and assignment of
claims, and the treatment of special awards, attorneys fees and costs.

IF YOU TENDER YOUR UNITS IN THIS OFFER, YOU WILL NO LONGER BE ENTITLED TO
DISTRIBUTIONS FROM YOUR PARTNERSHIP.

     If you tender your units in response to our offer, you will transfer to us
all right, title and interest in and to all of the units we accept, and the
right to receive all distributions in respect of such units on and after the
date on which we accept such units for purchase. Accordingly, for any units that
we acquire from you, you will not receive any future distributions from
operating cash flow of your partnership or upon a sale or refinancing of the
property owned by your partnership.

YOU COULD RECOGNIZE GAIN IN THE EVENT OF A FUTURE REDUCTION IN YOUR
PARTNERSHIP'S LIABILITIES.

     Generally, a decrease in your share of partnership liabilities is treated,
for federal income tax purposes, as a deemed cash distribution. Although the
general partner of your partnership does not have any current plan or intention
to reduce the liabilities of your partnership, it is possible that future
economic, market, legal, tax or other considerations may cause the general
partner to reduce your share of the partnership liabilities. If you retain all
or a portion of your units and your share of the partnership liabilities were to
be reduced, you would be treated as receiving a hypothetical distribution of
cash resulting from a decrease in your share of the liabilities of the
partnership. Any such hypothetical distribution of cash would be treated as a
nontaxable return of capital to the extent of your adjusted tax basis in your
units and thereafter as gain. Gain recognized by you on the disposition of
retained units with

                                        7


a holding period of 12 months or less may be classified as short-term capital
gain and subject to taxation at ordinary income tax rates.

YOU COULD BE PRECLUDED FROM TRANSFERRING YOUR UNITS FOR A 12-MONTH PERIOD.

     Your partnership's agreement of limited partnership prohibits any transfer
of an interest if such transfer, together with all other transfers during the
preceding 12 months, would cause 50% or more of the total interest in capital
and profits of your partnership to be transferred within such 12-month period.
Approximately 1.35% of the units in your partnership were transferred during the
previous 12 months. If we acquire a significant percentage of the interest in
your partnership, you may not be able to transfer your units for a 12-month
period following our offer.

WE COULD DELAY ACCEPTANCE OF, AND PAYMENT FOR, YOUR UNITS.

     We reserve the right to extend the period of time during which our offer is
open and thereby delay acceptance for payment of any tendered units. The offer
may be extended up to 120 business days from the date of commencement of the
offer, and no payment will be made in respect of tendered units until the
expiration of the offer and acceptance of units for payment.

THERE MAY BE A POSSIBLE REDUCTION OF AVAILABLE INFORMATION ABOUT YOUR
PARTNERSHIP AS A RESULT OF THIS OFFER.

     If there are less than 300 unitholders in your partnership upon
consummation of the offer, your partnership would no longer be required to file
periodic reports with the SEC, such as annual reports on Form 10-KSB containing
annual audited financial statements, and quarterly reports on Form 10-QSB
containing unaudited quarterly financial statements. Such reports are publicly
available and can be obtained on the SEC's web site. The lack of such filings
could adversely affect the already limited secondary market which currently
exists for units in your partnership and may discourage offers to purchase your
units. In such a case, you would regularly have access only to the information
your partnership's agreement of limited partnership requires your general
partner (which is our affiliate) to provide each year, which consists primarily
of tax information. See "The Litigation Settlement Offer -- Section 7. Effects
of the Offer -- Effect on Trading Market; Registration Under Section 12(g) of
the Exchange Act."

YOUR PARTNERSHIP HAS BALLOON PAYMENTS ON ITS MORTGAGE DEBT.

     Your partnership has a balloon payment of $5,775,000 due on its mortgage
debt in March 2005, a balloon payment of $7,488,000 due on its mortgage debt in
September 2007 and a balloon payment of $7,385,000 due on its mortgage debt in
July 2013. Your partnership may have to refinance such debt, sell assets or
otherwise obtain additional funds prior to the balloon payment due dates, or it
will be in a default and could lose the properties to foreclosure. See "The
Litigation Settlement Offer -- Section 15. Certain Information Concerning Your
Partnership" for more information regarding the mortgage debt of your
partnership.

                                        8


                        THE LITIGATION SETTLEMENT OFFER

1.  TERMS OF THE OFFER; EXPIRATION DATE

     Upon the terms and subject to the conditions of the offer, we will accept
(and thereby purchase) any and all units that are validly tendered on or prior
to the expiration date and not withdrawn in accordance with the procedures set
forth in "The Litigation Settlement Offer -- Section 4. Withdrawal Rights." For
purposes of the offer, the term "expiration date" shall mean midnight, New York
City time, on December 6, 2004, unless we in our sole discretion shall have
extended the period of time for which the offer is open (which may not exceed 90
business days from the date of commencement, as provided in the settlement). See
"The Litigation Settlement Offer -- Section 5. Extension of Tender Period;
Termination; Amendment; No Subsequent Offering Period," for a description of our
right to extend the period of time during which the offer is open and to amend
or terminate the offer.

     The purchase price per unit will automatically be reduced by the aggregate
amount of distributions per unit, if any, made or declared by your partnership
on or after the commencement of our offer and prior to the date on which we
acquire your units pursuant to our offer. If the offer price is reduced in this
manner, we will notify you and, if necessary, we will extend the offer period so
that you will have at least ten business days from the date of our notice to
withdraw your units.

     If, prior to the expiration date, we increase the consideration offered
pursuant to the offer, the increased consideration will be paid for all units
accepted for payment pursuant to the offer, whether or not the units were
tendered prior to the increase in consideration.

     The offer is conditioned on satisfaction of certain conditions. THE OFFER
IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF UNITS BEING TENDERED. See "The
Litigation Settlement Offer -- Section 19. Conditions to the Offer," which sets
forth in full the conditions to the offer. We reserve the right (but in no event
shall we be obligated), in our reasonable discretion, to waive any or all of
those conditions. If, on or prior to the expiration date, any or all of the
conditions have not been satisfied or waived, we reserve the right to (i)
decline to purchase any of the units tendered, terminate the offer and return
all tendered units to tendering limited partners, (ii) waive all the unsatisfied
conditions and purchase, subject to the terms of the offer, any and all units
validly tendered, (iii) extend the offer and, subject to your withdrawal rights,
retain the units that have been tendered during the period or periods for which
the offer is extended, or (iv) amend the offer. By executing the letter of
transmittal, you will agree that the transfer of units will be deemed to take
effect as of the first day of the calendar quarter in which the offer expires.
Upon expiration of the offer, the books and records of the partnership will
reflect the change in ownership as having occurred as of this date. For tax,
accounting and financial reporting purposes, the transfer of tendered units will
be deemed to take effect on the first day of the calendar quarter. Accordingly,
all profits and losses relating to any tendered units will be allocated to us
from and after this date. If we waive any material conditions to our offer, we
will notify you and, if necessary, we will extend the offer period so that you
will have at least five business days from the date of our notice to withdraw
your units.

     This offer is being mailed on or about November 4, 2004 to the persons
shown by your partnership's records to be limited partners or, in the case of
units owned of record by Individual Retirement Accounts and qualified plans,
beneficial owners of units.

2.  ACCEPTANCE FOR PAYMENT AND PAYMENT FOR UNITS

     Upon the terms and subject to the conditions of the offer, we will
purchase, by accepting for payment, and will pay for, any and all units validly
tendered promptly following the expiration date. A tendering beneficial owner of
units whose units are owned of record by an Individual Retirement Account or
other qualified plan will not receive direct payment of the offer price; rather,
payment will be made to the custodian of such account or plan. In all cases,
payment for units purchased pursuant to the offer will be made only after timely
receipt by the Information Agent of a properly completed and duly executed
letter of transmittal and other documents required by the letter of transmittal.
See "The Litigation Settlement Offer -- Section 3. Procedure for Tendering
Units." UNDER NO CIRCUMSTANCES WILL

                                        9


INTEREST BE PAID ON THE OFFER PRICE BY REASON OF ANY DELAY IN MAKING SUCH
PAYMENT.

     For purposes of the offer, we will be deemed to have accepted for payment
pursuant to the offer, and thereby purchased, validly tendered units, if, as and
when we give verbal or written notice to the Information Agent of our acceptance
of those units for payment pursuant to the offer. Payment for units accepted for
payment pursuant to the offer will be made through the Information Agent, which
will act as agent for tendering limited partners for the purpose of receiving
cash payments from us and transmitting cash payments to tendering limited
partners.

     If any tendered units are not accepted for payment by us for any reason,
the letter of transmittal with respect to such units not purchased may be
destroyed by the Information Agent or us or returned to you. You may withdraw
tendered units until the expiration date (including any extensions). In
addition, if we have not accepted units for payment by January 3, 2005 you may
then withdraw any tendered units. After the expiration date, the Information
Agent may, on our behalf, retain tendered units, and those units may not be
otherwise withdrawn, if, for any reason, acceptance for payment of, or payment
for, any units tendered pursuant to the offer is delayed or we are unable to
accept for payment, purchase or pay for units tendered pursuant to the offer.
Any such action is subject, however, to our obligation under Rule 14e-1(c) under
the Exchange Act, to pay you the offer price in respect of units tendered or
return those units promptly after termination or withdrawal of the offer.

     We reserve the right to transfer or assign, in whole or in part, to one or
more of our affiliates, the right to purchase units tendered pursuant to the
offer, but no such transfer or assignment will relieve us of our obligations
under the offer or prejudice your rights to receive payment for units validly
tendered and accepted for payment pursuant to the offer.

3.  PROCEDURE FOR TENDERING UNITS

     Valid Tender.  To validly tender units pursuant to the offer, a properly
completed and duly executed letter of transmittal, and any other required
documents must be received by the Information Agent, at one of its addresses set
forth on the back cover of this Litigation Settlement Offer, on or prior to the
expiration date. You may tender all or any portion of your units. No
alternative, conditional or contingent tenders will be accepted.

     Signature Requirements.  If the letter of transmittal is signed by the
registered holder of a unit and payment is to be made directly to that holder,
then no signature guarantee is required on the letter of transmittal. Similarly,
if a unit is tendered for the account of a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc. or a commercial bank, savings bank, credit union, savings and loan
association or trust company having an office, branch or agency in the United
States (each an "Eligible Institution"), no signature guarantee is required on
the letter of transmittal. However, in all other cases, all signatures on the
letter of transmittal must be guaranteed by an Eligible Institution.

     In order for you to tender in the offer, your units must be validly
tendered and not withdrawn on or prior to the expiration date.

     THE METHOD OF DELIVERY OF THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED
DOCUMENTS IS AT YOUR OPTION AND RISK AND DELIVERY WILL BE DEEMED MADE ONLY WHEN
ACTUALLY RECEIVED BY THE INFORMATION AGENT. IF DELIVERY IS BY MAIL, REGISTERED
MAIL WITH RETURN RECEIPT REQUESTED IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY.

     Appointment as Proxy; Power of Attorney.  By executing the letter of
transmittal, you are irrevocably appointing us and our designees as your proxy,
in the manner set forth in the letter of transmittal and each with full power of
substitution, to the fullest extent of your rights with respect to the units
tendered by you and accepted for payment by us. Each such proxy shall be
considered coupled with an interest in the tendered units. Such appointment will
be effective when, and only to the extent that, we accept the tendered units for
payment. Upon such acceptance for payment, all prior proxies given by you with
respect
                                        10


to the units will, without further action, be revoked, and no subsequent proxies
may be given (and if given will not be effective). We and our designees will, as
to those units, be empowered to exercise all voting and other rights as a
limited partner as we, in our sole discretion, may deem proper at any meeting of
limited partners, by written consent or otherwise. By executing the letter of
transmittal, you agree to execute all such documents and take such other actions
as shall be reasonably required to enable the units tendered to be voted in
accordance with our directions. The proxy granted by you to us will remain
effective and be irrevocable for a period of ten years following the termination
of our offer.

     By executing the letter of transmittal, you also irrevocably constitute and
appoint us and our designees as your attorneys-in-fact, each with full power of
substitution, to the full extent of your rights with respect to the units
tendered by you and accepted for payment by us. Such appointment will be
effective when, and only to the extent that, we pay for your units and will
remain effective and be irrevocable for a period of ten years following the
termination of our offer. You will agree not to exercise any rights pertaining
to the tendered units without our prior consent. Upon such payment, all prior
powers of attorney granted by you with respect to such units will, without
further action, be revoked, and no subsequent powers of attorney may be granted
(and if granted will not be effective). Pursuant to such appointment as
attorneys-in-fact, we and our designees each will have the power, among other
things, (i) to transfer ownership of such units on the partnership books
maintained by your general partner (and execute and deliver any accompanying
evidences of transfer and authenticity it may deem necessary or appropriate in
connection therewith), (ii) upon receipt by the Information Agent of the offer
consideration, to become a substituted limited partner, to receive any and all
distributions made by your partnership on or after the date on which we acquire
such units, and to receive all benefits and otherwise exercise all rights of
beneficial ownership of such units in accordance with the terms of our offer,
(iii) to execute and deliver to the general partner of your partnership a change
of address form instructing the general partner to send any and all future
distributions to which we are entitled pursuant to the terms of the offer in
respect of tendered units to the address specified in such form, and (iv) to
endorse any check payable to you or upon your order representing a distribution
to which we are entitled pursuant to the terms of our offer, in each case, in
your name and on your behalf.

     Assignment of Interest in Future Distributions.  By executing the letter of
transmittal, you will irrevocably assign to us and our assigns all of your
right, title and interest in and to any and all distributions made by your
partnership from any source and of any nature, including, without limitation,
distributions in the ordinary course, distributions from sales of assets,
distributions upon liquidation, winding-up, or dissolution, payments in
settlement of existing or future litigation, and all other distributions and
payments from and after the expiration date of our offer, in respect of the
units tendered by you and accepted for payment and thereby purchased by us. If,
after the unit is accepted for payment and purchased by us, you receive any
distribution from any source and of any nature, including, without limitation,
distributions in the ordinary course, distributions from sales of assets,
distributions upon liquidation, winding-up or dissolution, payments in
settlement of existing or future litigation and all other distributions and
payments, from your partnership in respect of such unit, you will agree to
forward promptly such distribution to us.

     Release of Claims.  By executing the letter of transmittal, effective upon
acceptance for payment of the units tendered by you, you will, on behalf of
yourself, your heirs, estate, executor, administrator, successors and assigns,
and your partnership, fully, finally and forever release, relinquish and
discharge us and our predecessors, successors and assigns and our present and
former parents, subsidiaries, affiliates, investors, insurers, reinsurers,
officers, directors, employees, agents, administrators, auditors, attorneys,
accountants, information and solicitation agents, investment bankers, and other
representatives, including but not limited to AIMCO Properties, L.P.
(collectively, the "Releasees"), from any and all claims and causes of action,
whether brought individually, on behalf of a class, or derivatively, demands,
rights, or liabilities, including, but not limited to, claims for negligence,
gross negligence, professional negligence, breach of duty of care or loyalty, or
breach of duty of candor, fraud, breach of fiduciary duty, mismanagement,
corporate waste, malpractice, misrepresentation, whether intentional or
negligent, misstatements and omissions to disclose, breach of contract,
violations of any state or federal statutes, rules

                                        11


or regulations, whether known claims or unknown claims that have been asserted
or that could have been asserted against the Releasees, that arise out of or
relate to (a) those matters and claims set forth in the class and derivative
litigation described in this Litigation Settlement Offer, (b) the ownership of
one or more units in your partnership, including but not limited to, any and all
claims related to the management of your partnership or the properties owned by
your partnership (whether currently or previously), the payment of management
fees or other monies to the general partner of your partnership and its
affiliates, prior acquisitions or tender offers and the prior settlement, (c)
the purchase, acquisition, holding, sale, tender or voting of one or more units
in your partnership, or (d) any of the facts, circumstances, allegations,
claims, causes of action, representations, statements, reports, disclosures,
transactions, events, occurrences, acts, omissions or failures to act, of
whatever kind or character whatsoever, irrespective of the state of mind of the
actor performing or omitting to perform the same, that have been or could have
been alleged in any pleadings, amended pleading, argument, complaint, amended
complaint, brief, motion, report or filing in the class and derivative
litigation described in this Litigation Settlement Offer (collectively, the
"Released Claims"); provided, however, that the Released Claims are not intended
to include (i) any unrelated claims that are unique to a limited partner or
settlement class member (e.g., a settlement class member slips and falls on
property owned by one of the defendants in the class and derivative litigation,
loses or did not receive a distribution check distributed to other limited
partners in such partnership, or is an employee of one of the defendants and has
an employee related claim) or (ii) any claim based upon violations of federal or
state securities laws in connection with this offer.

     In addition, you will expressly waive and relinquish, to the fullest extent
permitted by law and consistent with the releases described herein, the
provisions, rights and benefits of Section 1542 of the Civil Code of California
("Section 1542"), which provides:

     A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
     KNOW OR SUSPECT TO EXIST IN ITS FAVOR AT THE TIME OF EXECUTING THE RELEASE,
     WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
     DEBTOR.

     You will have also waived any and all provisions, rights and benefits
conferred by any law of any state or territory of the United States, or
principle of common law, that is similar, comparable or equivalent to Section
1542. You may hereafter discover facts in addition to or different from those
which you now know or believe to be true with respect to the subject matter of
the Released Claims, but you will be deemed to have fully, finally and forever
settled and released any and all Released Claims, known or unknown, suspected or
unsuspected, contingent or non-contingent, that now exist or heretofore have
existed upon any theory of law or equity now existing, including, but not
limited to, conduct that is negligent, intentional, with or without malice, or a
breach of any duty, law or rule, without regard to the subsequent discovery of
the existence of such different or additional facts.

     You will acknowledge and agree that the releases contained in the letter of
transmittal is intended to include the Released Claims, which you may have and
which you do not know or suspect to exist in your favor against the Releasees
and that the releases contained in the letter of transmittal extinguishes those
claims. You will represent and warrant to the Releasees that you have been
advised by your attorney of the effect and import of the provisions of Section
1542, and that you have not assigned or otherwise transferred or subrogated any
interest in the Released Claims.

     Covenant Not to Sue.  By executing the letter of transmittal, you agree not
to bring any action, claim, suit or proceeding against us and those affiliates
who were defendants in the class and derivative litigation concerning any of the
matters that are the subject of the Stipulation of Settlement approved by the
Court in connection with the settlement of such class and derivative litigation,
including this Litigation Settlement Offer, other than for violations of federal
or state securities laws.

     Determination of Validity; Rejection of Units; Waiver of Defects; No
Obligation to Give Notice of Defects.  All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of units pursuant to our offer will be determined by us, in our reasonable
discretion, which determination shall be final and binding on all parties. We
reserve the absolute right to reject any or

                                        12


all tenders of any particular unit determined by us not to be in proper form or
if the acceptance of or payment for that unit may, in the opinion of our
counsel, be unlawful. We also reserve the absolute right to waive or amend any
of the conditions to the offer that we are legally permitted to waive as to the
tender of any particular unit and to waive any defect or irregularity in any
tender with respect to any particular unit of any particular limited partner. If
we waive any of the conditions to the offer with respect to the tender of a
particular unit or with respect to a particular limited partner, we will waive
such condition with respect to all other tenders of units or all other limited
partners in this offer as well. Our interpretation of the terms and conditions
to the offer (including the letter of transmittal) will be final and binding on
all parties. No tender of units will be deemed to have been validly made unless
and until all defects and irregularities have been cured or waived. Neither we,
the Information Agent, nor any other person will be under any duty to give
notification of any defects or irregularities in the tender of any unit or will
incur any liability for failure to give any such notification.

     Backup Federal Income Tax Withholding.  To prevent the possible application
of back-up federal income tax withholding with respect to payment of the offer
price, you must provide us with your correct taxpayer identification number. See
the instructions to the letter of transmittal and "The Litigation Settlement
Offer -- Section 6. Material Federal Income Tax Matters."

     State and Local Withholding.  If you tender any units pursuant to this
Litigation Settlement Offer, we may be required under state or local tax laws to
deduct and withhold a portion of our offer price. You should consult your tax
advisor concerning whether any state or local withholding would be required on a
disposition of your units and whether such amounts may be available to you as a
credit on your state or local tax returns.

     FIRPTA Withholding.  To prevent the withholding of federal income tax in an
amount equal to 10% of the amount realized on the disposition (the amount
realized is generally the offer price plus the partnership liabilities allocable
to each unit purchased), you must certify that you are not a foreign person if
you tender units. See the instructions to the letter of transmittal and "The
Litigation Settlement Offer -- Section 6. Material Federal Income Tax Matters."

     Transfer Taxes.  The amount of any transfer taxes (whether imposed on the
registered holder of units or any person) payable on account of the transfer of
units will be deducted from the purchase price unless satisfactory evidence of
the payment of such taxes or exemption therefrom is submitted.

     Binding Agreement.  A tender of a unit pursuant to any of the procedures
described above and the acceptance for payment of such unit will constitute a
binding agreement between the tendering limited partner and us on the terms set
forth in this Litigation Settlement Offer and the letter of transmittal.

4.  WITHDRAWAL RIGHTS

     You may withdraw your tendered units at any time prior to the expiration
date, including any extensions thereof, or on or after January 3, 2005 if the
units have not been previously accepted for payment. If you properly withdraw
all of the units you previously tendered in the offer, the corresponding letter
of transmittal, including your release and assignment of future claims contained
therein, will be deemed revoked and of no force or effect.

     For a withdrawal to be effective, a written notice of withdrawal must be
timely received by the Information Agent at one of its addresses set forth on
the back cover of this Litigation Settlement Offer. Any such notice of
withdrawal must specify the name of the person who tendered, the number of units
to be withdrawn and the name of the registered holder of such units, if
different from the person who tendered. In addition, the notice of withdrawal
must be signed by the person who signed the letter of transmittal in the same
manner as the letter of transmittal was signed.

     If purchase of, or payment for, a unit is delayed for any reason, or if we
are unable to purchase or pay for a unit for any reason, then, without prejudice
to our rights under the offer, tendered units may be retained by the Information
Agent; subject, however, to our obligation, pursuant to Rule 14e-1(c) under

                                        13


the Exchange Act, to pay the offer price in respect of units tendered or return
those units promptly after termination or withdrawal of our offer.

     Any units properly withdrawn will thereafter be deemed not to have been
validly tendered for purposes of our offer. However, withdrawn units may be
re-tendered at any time prior to the expiration date by following the procedures
described in "The Litigation Settlement Offer -- Section 3. Procedure for
Tendering Units."

     All questions as to the validity and form (including time of receipt) of
notices of withdrawal will be determined by us in our reasonable discretion,
which determination will be final and binding on all parties. Neither the
Information Agent, any other person, nor we will be under any duty to give
notification of any defects or irregularities in any notice of withdrawal or
incur any liability for failure to give any such notification.

5.  EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENT; NO SUBSEQUENT OFFERING
    PERIOD

     We expressly reserve the right, in our reasonable discretion, at any time
and from time to time, (i) to extend the period of time during which our offer
is open (but not beyond 90 business days from the date of commencement of the
offer) and thereby delay acceptance for payment of, and the payment for, any
unit, (ii) to terminate the offer and not accept any units not theretofore
accepted for payment or paid for if any of the conditions to the offer are not
satisfied (iii) upon the occurrence of any of the conditions specified in "The
Litigation Settlement Offer -- Section 19. Conditions to the Offer" relating to
necessary governmental approvals, to delay the acceptance for payment of, or
payment for, any units not already accepted for payment or paid for, and (iv) to
amend our offer in any respect (including, without limitation, by increasing or
decreasing the consideration offered, increasing or decreasing the units being
sought, or both). We will not assert any of the conditions to the offer (other
than those relating to necessary governmental approvals) subsequent to the
expiration of the offer. Notice of any such extension, termination or amendment
will promptly be disseminated to you in a manner reasonably designed to inform
you of such change. In the case of an extension of the offer, the extension may
be followed by a press release or other public announcement which will be issued
no later than 9:00 a.m., New York City time, on the next business day after the
scheduled expiration date of our offer, in accordance with Rule 14e-1(d) under
the Exchange Act.

     If we extend the offer, or if we delay payment for a unit (whether before
or after its acceptance for payment) or are unable to pay for a unit pursuant to
our offer for any reason, then, without prejudice to our rights under the offer,
the Information Agent may retain tendered units and those units may not be
withdrawn except to the extent tendering limited partners are entitled to
withdrawal rights as described in "The Litigation Settlement Offer -- Section 4.
Withdrawal Rights;" subject, however, to our obligation, pursuant to Rule
14e-1(c) under the Exchange Act, to pay the offer price in respect of units
tendered or return those units promptly after termination or withdrawal of the
offer.

     If we make a material change in the terms of our offer, or if we waive a
material condition to our offer, we will extend the offer and disseminate
additional tender offer materials to the extent required by Rules 14d-4 and
14e-1 under the Exchange Act. The minimum period during which the offer must
remain open following any material change in the terms of the offer, other than
a change in price or a change in percentage of securities sought or a change in
any dealer's soliciting fee, if any, will depend upon the facts and
circumstances, including the materiality of the change, but generally will be
five business days. With respect to a change in price or, subject to certain
limitations, a change in the percentage of securities sought or a change in any
dealer's soliciting fee, if any, a minimum of ten business days from the date of
such change is generally required to allow for adequate dissemination to limited
partners. Accordingly, if, prior to the expiration date, we increase (other than
increases of not more than two percent of the outstanding units) or decrease the
number of units being sought, or increase or decrease the offer price, and if
the offer is scheduled to expire at any time earlier than the tenth business day
after the date that notice of such increase or decrease is first published, sent
or given to limited partners, the offer will be extended at least until the
expiration of such ten business days. As used in this Litigation Settlement

                                        14


Offer, "business day" means any day other than a Saturday, Sunday or a Federal
holiday, and consists of the time period from 12:01 a.m. through 12:00 midnight,
New York City time.

     Pursuant to Rule 14d-11 under the Exchange Act, subsequent offering periods
may be provided in tender offers for "any and all" outstanding units of a
partnership. A subsequent offering period is an additional period of from three
to twenty business days following the expiration date of the offer, including
any extensions, in which limited partners may continue to tender units not
tendered in the offer for the offer price. We do not currently intend to offer a
subsequent offering period.

6.  MATERIAL FEDERAL INCOME TAX MATTERS

     The following summary is a discussion of the material United States federal
income tax consequences of the offer that may be relevant to (i) limited
partners who tender some or all of their units for cash pursuant to our offer,
and (ii) limited partners who do not tender any of their units pursuant to our
offer. This discussion is based on the Internal Revenue Code of 1986, as amended
(the "Code"), Treasury Regulations, rulings issued by the IRS, and judicial
decisions, all as of the date of this Litigation Settlement Offer. All of the
foregoing is subject to change or alternative construction, possibly with
retroactive effect, and any such change or alternative construction could affect
the continuing accuracy of this summary. This summary is based on the assumption
that your partnership is operated in accordance with its organizational
documents including its certificate of limited partnership and agreement of
limited partnership. This summary does not purport to discuss all aspects of
federal income taxation which may be important to a particular person in light
of its investment or tax circumstances, or to certain types of investors subject
to special tax rules (including financial institutions, broker-dealers,
insurance companies, and, except to the extent discussed below, tax-exempt
organizations and foreign investors, as determined for United States federal
income tax purposes), nor (except as otherwise expressly indicated) does it
describe any aspect of state, local, foreign or other tax laws. This summary
assumes that the units are held by the limited partners for investment purposes
(commonly referred to as "capital assets"), and are not held by partners for
sale to customers as dealer property under the Code. No advance ruling has been
or will be sought from the IRS regarding any matter discussed in this Litigation
Settlement Offer. Further, no opinion of counsel has been obtained with regard
to the offer.

     THE UNITED STATES FEDERAL INCOME TAX TREATMENT OF A LIMITED PARTNER
PARTICIPATING IN THE OFFER DEPENDS IN SOME INSTANCES ON DETERMINATIONS OF FACT
AND INTERPRETATIONS OF COMPLEX PROVISIONS OF UNITED STATES FEDERAL INCOME TAX
LAW FOR WHICH NO CLEAR PRECEDENT OR AUTHORITY MAY BE AVAILABLE. ACCORDINGLY, YOU
SHOULD CONSULT YOUR TAX ADVISOR REGARDING THE UNITED STATES FEDERAL, STATE,
LOCAL AND FOREIGN TAX CONSEQUENCES OF SELLING THE INTERESTS IN YOUR PARTNERSHIP
REPRESENTED BY YOUR UNITS PURSUANT TO OUR OFFER OR OF A DECISION NOT TO SELL IN
LIGHT OF YOUR SPECIFIC TAX SITUATION.

     Tax Consequences to Limited Partners Tendering Units for Cash.  The sale of
a unit of limited partnership interest pursuant to this offer will be a taxable
transaction for United States federal income tax purposes. You will recognize
gain or loss on a sale of a unit of limited partnership interest of your
partnership equal to the difference, if any, between (i) your "amount realized"
on the sale and (ii) your adjusted tax basis in the unit sold. The "amount
realized" with respect to a unit will be equal to the sum of the amount of cash
received by you for the unit sold pursuant to the offer plus the amount of
partnership liabilities allocable to your unit (as determined under Section 752
of the Code). Thus, your tax liability resulting from a sale of a unit could
exceed the cash received upon such sale.

     Adjusted Tax Basis.  If you acquired your units for cash, your initial tax
basis in such units was generally equal to your cash investment in your
partnership increased by your share of partnership liabilities at the time you
acquired such units. Your initial tax basis generally has been increased by (i)
your share of partnership income and gains, and (ii) any increases in your share
of partnership liabilities, and has been decreased (but not below zero) by (i)
your share of partnership cash distributions, (ii) any decreases in your share
of partnership liabilities, (iii) your share of partnership losses, and (iv)
your share of nondeductible partnership expenditures that are not chargeable to
capital. For purposes of determining your adjusted tax basis in your units
immediately prior to a disposition of your units, your

                                        15


adjusted tax basis in your units will include your allocable share of
partnership income, gain or loss for the taxable year of disposition. If your
adjusted tax basis is less than your share of partnership liabilities (e.g., as
a result of the effect of net loss allocations and/or distributions exceeding
the cost of your unit), your gain recognized with respect to a unit pursuant to
the offer will exceed the cash proceeds realized upon the sale of such unit, and
may result in a tax liability to you that exceeds the cash received upon such
sale.

     Character of Gain or Loss Recognized Pursuant to the Offer.  Except as
described below, the gain or loss recognized by you on a sale of a unit pursuant
to the offer generally will be treated as a long-term capital gain or loss if
you held the unit for more than one year. Long-term capital gains recognized by
individuals and certain other noncorporate taxpayers generally will be subject
to a maximum United States federal income tax rate of 15%. If the amount
realized with respect to a unit of limited partnership interest of your
partnership that is attributable to your share of "unrealized receivables" of
your partnership exceeds the tax basis attributable to those assets, such excess
will be treated as ordinary income. Among other things, "unrealized receivables"
include depreciation recapture for certain types of property. In addition, the
maximum United States federal income tax rate applicable to persons who are
noncorporate taxpayers for net capital gains attributable to the sale of
depreciable real property (which may be determined to include an interest in a
partnership such as your units) held for more than one year is currently 25%
(rather than 15%) with respect to that portion of the gain attributable to
depreciation deductions previously taken on the property. Certain limitations
apply to the use of capital losses.

     If you tender a unit of limited partnership interest of your partnership in
the offer, you will be allocated a share of partnership taxable income or loss
for the year of tender with respect to any units sold. You will not receive any
future distributions on units tendered on or after the date on which such units
are accepted for purchase and, accordingly, you may not receive any
distributions with respect to such accreted income. Such allocation and any
partnership cash distributions to you for that year will affect your adjusted
tax basis in your unit and, therefore, the amount of your taxable gain or loss
upon a sale of a unit pursuant to the offer.

     Passive Activity Losses.  The passive activity loss rules of the Code limit
the use of losses derived from passive activities, which generally include
investments in limited partnership interests such as your units. An individual,
as well as certain other types of investors, generally cannot use losses from
passive activities to offset nonpassive activity income received during the
taxable year. Passive losses that are disallowed for a particular tax year are
"suspended" and may be carried forward to offset passive activity income earned
by the investor in future taxable years. In addition, such suspended losses may
be claimed as a deduction, subject to other applicable limitations, upon a
taxable disposition of the investor's interest in such activity.

     Accordingly, if your investment in your units is treated as a passive
activity, you may be able to reduce gain from the sale of your units pursuant to
the offer with passive losses in the manner described below. If you sell all or
a portion of your units pursuant to the offer and recognize a gain on your sale,
you will generally be entitled to use your current and "suspended" passive
activity losses (if any) from your partnership and other passive sources to
offset that gain. In general, if you sell all or a portion of your units
pursuant to the offer and recognize a loss on such sale, you will be entitled to
deduct that loss currently (subject to other applicable limitations) against the
sum of your passive activity income from your partnership for that year (if any)
plus any passive activity income from other sources for that year. If you sell
all of your units pursuant to the offer, the balance of any "suspended" losses
from your partnership that were not otherwise utilized against passive activity
income as described in the two preceding sentences will generally no longer be
suspended and will generally therefore be deductible (subject to any other
applicable limitations) by you against any other income for that year,
regardless of the character of that income. You are urged to consult your tax
advisor concerning whether, and the extent to which, you have available
"suspended" passive activity losses from your partnership or other investments
that may be used to reduce gain from the sale of units pursuant to the offer.

     Release and Assignment of Claims.  Our offer price includes $23.83, your
pro rata share of the settlement fund, unless you request exclusion from the
settlement or the Court's order approving the

                                        16


settlement is reversed or vacated by virtue of the appeal. If you request
exclusion from the settlement or the Court's order approving the settlement is
reversed or vacated by virtue of the appeal, an equivalent portion of the price
paid to you may nevertheless be deemed a payment for your release and assignment
of claims. We intend to treat the entire offer price as consideration paid to
you for your units, regardless of whether you requested exclusion from the
settlement. The proper treatment for federal income tax purposes of your receipt
of amounts from the settlement fund or deemed payment for your release and
assignment of claims is uncertain under current law. No opinion or assurance can
be given that the IRS will not challenge the treatment of the $23.83 portion of
the offer price as a separate payment from the settlement fund or as a deemed
payments for your release and assignment of claims and not as additional
consideration for the units, and assert that, in either case, the $23.83 portion
should be treated as an ordinary income payment in exchange for your release
and/or assignment of current and future claims. Moreover, while the IRS has
stated that it generally will not treat attorneys' fees and costs that are paid
directly to class counsel from a settlement fund as constituting income, profit,
or gain of a member of the class (so long as the class is an opt-out class and
the class member does not have a separate contingency fee arrangement with the
class counsel), any special awards paid to claimants who actively aid in the
prosecution of a class action or who devote substantial time or expense on
behalf of a settlement class will be treated as payments for services rendered
and will be includable in that member's gross income. You should consult your
tax advisor regarding the tax consequences to you with respect to your right to,
and your receipt of, amounts from the settlement fund or deemed payments for
your release and assignment of claims, and the treatment of special awards,
attorneys fees and costs.

     Information Reporting, Backup Withholding and FIRPTA.  If you tender any
units, you must report the transaction by filing a statement with your United
States federal income tax return for the year of the tender which provides
certain required information to the IRS. To prevent the possible application of
back-up United States federal income tax withholding with respect to the payment
of the offer consideration, you are generally required to provide us with your
correct taxpayer identification number. Back-up withholding is not an additional
tax. Any amounts withheld under the back-up withholding rules may be refunded or
credited against your United States federal income tax liability, if any,
provided that the required information is furnished to the Internal Revenue
Service. See the instructions to the letter of transmittal.

     Gain realized by a foreign person on the sale of a unit pursuant to the
offer will be subject to federal income tax under the Foreign Investment in Real
Property Tax Act of 1980. Under these provisions of the Code, if we acquire an
interest held by a foreign person, we will be required to deduct and withhold
10% of the amount realized by such foreign person on the disposition. Amounts
withheld would be creditable against a foreign person's United States federal
income tax liability and, if in excess thereof, a refund could be claimed from
the Internal Revenue Service by filing a United States income tax return. See
the instructions to the letter of transmittal.

     State and Local Withholding.  If you tender any units pursuant to this
Litigation Settlement Offer, we may be required under state or local tax laws to
deduct and withhold a portion of our offer price. You should consult your tax
advisor concerning whether any state or local withholding would be required on a
disposition of your units and whether such amounts may be available to you as a
credit on your state or local tax returns.

     Tax Consequences to Your Partnership of Our Offer.  Section 708 of the Code
provides that if there is a sale or exchange of 50% or more of the total
interest in capital and profits of a partnership within any 12-month period,
such partnership terminates for United States federal income tax purposes.
Approximately 1.35% of the units in your partnership were transferred during the
previous 12 months. It is possible that our acquisition of units pursuant to the
offer alone or in combination with other transfers of interests in your
partnership could result in such a termination of your partnership. If your
partnership is not deemed to terminate for tax purposes, there will be no tax
effect to your partnership. If your partnership is deemed to terminate for tax
purposes, however, the following federal income tax events will be deemed to
occur: the terminated partnership will be deemed to have contributed all of its
assets (subject to its liabilities) to a new partnership in exchange for an
interest in the new partnership and,

                                        17


immediately thereafter, the old partnership will be deemed to have distributed
interests in the new partnership to the remaining limited partners in proportion
to their respective interests in the old partnership in liquidation of the old
partnership.

     A termination of your partnership for federal income tax purposes may also
subject the assets of your partnership to longer depreciable lives than those
currently applicable to the assets of your partnership. This would generally
decrease the annual average depreciation deductions following our offer, but
would have no effect on the total depreciation deductions available over the
useful lives of the assets of your partnership. Additionally, upon a termination
of your partnership, the taxable year of your partnership will close for federal
income tax purposes. Elections as to tax matters previously made by the old
partnership will not be applicable to the new partnership unless the new
partnership chooses to make the same elections.

     Tax Consequences to Non-Tendering and Partially-Tendering Limited
Partners.  As described above, if 50% or more of such interests are sold or
exchanged within a 12 month period, including as a result of our acquisition of
units, a deemed tax termination of your partnership will occur for tax purposes.
If less than 50% of the total interest in capital and profits of your
partnership are sold or exchanged within any 12 month period, there will be no
tax effect to you from the offer.

     You will not recognize any gain or loss upon a deemed tax termination of
your partnership, and your capital account in your partnership will carry over
to the new partnership. A termination of your partnership for federal income tax
purposes may change (and possibly shorten) your holding period with respect to
interests in your partnership that you choose to retain. Gain recognized by you
on the disposition of retained units with a holding period of 12 months or less
may be classified as short-term capital gain and subject to taxation at ordinary
income tax rates.

     A deemed tax termination will also decrease the annual depreciation
deductions (as a result of the longer partnership depreciation lives described
above) allocable to you (thereby possibly increasing the taxable income
allocable to your interests in the partnership each year).

7.  EFFECTS OF THE OFFER

     Because the general partner of your partnership is our affiliate, we have
control over the management of your partnership. In addition, we, together with
Cooper River Properties, L.L.C., Broad River Properties, L.L.C. and AIMCO IPLP,
L.P. (which are our affiliates), own 31,223 units, or 69.82%, of the outstanding
units of your partnership. Because we and our affiliates own a majority of the
outstanding units and control your partnership's general partner, we control the
outcome of most voting decisions with respect to your partnership. In general,
we will vote the units owned by us in whatever manner we deem to be in our best
interests, which may not be in the interest of other limited partners. This
could (1) prevent non-tendering limited partners from taking action that they
desire but that we oppose and (2) enable us to take action desired by us but
opposed by non-tendering limited partners. We are also affiliated with the
company that currently manages, and has managed for some time, the property
owned by your partnership. In the event that we acquire a substantial number of
units pursuant to this offer, removal of the property manager may become more
difficult or impossible.

     If we acquire all of the units that we are seeking in the offer, our
interest in your partnership's net earnings ($238,000 for the six months ended
June 30, 2004) and net book value ($(42,371,000) as of June 30, 2004) will
increase to 100%. AIMCO-GP owns a 1% interest in AIMCO Properties, L.P. and
AIMCO, through its subsidiaries, owns an 89% interest in AIMCO Properties.

     Distributions to Us.  If we acquire units in the offer, we will participate
in any subsequent distributions to limited partners to the extent of the units
purchased.

     Partnership Status.  The rules regarding whether a partnership is treated
as a "publicly traded partnership" taxable as a corporation are not certain. We
believe that our purchase of units in accordance with the terms of our offer
should not adversely affect the issue of whether your partnership is classified
as a partnership for federal income tax purposes, because, taking into account
all of the facts and

                                        18


circumstances, the general partner of your partnership believes that the
partnership interests in your partnership should not be treated as readily
tradable on a secondary market or the substantial equivalent thereof.

     Business.  Our offer will not affect the operation of the property owned by
your partnership. We will continue to control the general partner of your
partnership and the property manager, both of which will remain the same.
Consummation of the offer will not affect your agreement of limited partnership,
the operations of your partnership, the business and properties owned by your
partnership or any other matter relating to your partnership, except it would
result in us increasing our ownership of units. We have no current intention of
changing the fee structure for your general partner or the manager of your
partnership's property.

     Effect on Trading Market; Registration Under Section 12(g) of the Exchange
Act.  If a substantial number of units are purchased pursuant to the offer, the
result will be a reduction in the number of limited partners in your
partnership. In the case of certain kinds of equity securities, a reduction in
the number of securityholders might be expected to result in a reduction in the
liquidity and volume of activity in the trading market for the security. In the
case of your partnership, however, there is no established public trading market
for the units and, therefore, we do not believe a reduction in the number of
limited partners will materially further restrict your ability to find
purchasers for your units through secondary market transactions.

     The units are registered under Section 12(g) of the Exchange Act, which
means, among other things, that your partnership is required to file periodic
reports with the SEC and to comply with the SEC's proxy rules. We do not expect
or intend that consummation of the offer will cause the units to cease to be
registered under Section 12(g) of the Exchange Act. If the units were to be held
by fewer than 300 persons, your partnership could apply to de-register the units
under the Exchange Act. Your partnership currently has 1,334 unitholders. The
lack of filing periodic reports could affect the already limited secondary
market which currently exists for units in your partnership and may result in
others not tendering for such units. In such a case, you would regularly have
access only to the limited information your partnership's agreement of limited
partnership requires your general partner (which is our affiliate) to provide
each year, which information consists primarily of tax information. In
particular, you will continue to receive a Schedule K-1 each year as well as
audited financial statements with respect to your partnership. A Schedule K-1 is
an information statement that contains tax information for the fiscal year of
your partnership, such as your allocation of income, deductions, credits, gains
and losses of your partnership for federal income tax purposes. In comparison,
the periodic reports filed by your partnership under the Exchange Act contain
your partnership's annual and quarterly financial statements prepared in
accordance with generally accepted accounting principles. These periodic reports
filed under the Exchange Act also include information regarding your
partnership's business and property and a discussion regarding your
partnership's financial condition and results of operations. Additionally, your
partnership will not be required to provide current reports on Form 8-K,
describing certain material events. See "The Litigation Settlement
Offer -- Section 1. Terms of the Offer; Expiration Date."

     Accounting Treatment.  Upon consummation of the offer, we will account for
our investment in any acquired units under the purchase method of accounting.
There will be no effect on the accounting treatment of your partnership as a
result of the offer.

8.  VALUATION OF UNITS

     Determination of Offer Price.  We determined our offer price by estimating
the liquidation proceeds that would be payable to limited partners if
calculating a net equity value of units of limited partnership interest based on
a valuation of your partnership's properties. Our starting point in this process
was the value of each of your partnership's properties as determined by the
court-appointed, independent appraiser in 2003. For a more a detailed
description of the independent appraisals of your partnership's properties, see
"The Litigation Settlement Offer -- Section 8. Valuation of Units; Estimated
Liquidation Proceeds Based on Independent Appraisal."

                                        19


     For Chambers Ridge Apartments, we assigned it a gross property value of
$12,060,000, which is equal to 77.8% of its appraised value. We made this
determination based on the following factors:

     - this property is currently being marketed for sale. Based on current
       conditions in the real estate and capital markets, we anticipate
       achieving an ultimate sale price of approximately $13.4 million. However,
       due to the uncertainty of achieving that sale price, we are offering you
       90%;

     - the property's vacancy rate for the month ended July, 2004 was 11%, and
       its loss rate was 16%, as compared to a vacancy and loss rate of 9%
       projected by the appraiser;

     - our assessment of recent housing trends in the local market in which the
       property is located; and

     - our assessment of the general economic outlook for the area in which the
       property is located.

     For Hunters Glen Apartments IV, we assigned it a gross property value of
$19,506,372, which is equal to 95% of its appraised value less the prepayment
penalty on its outstanding mortgage indebtedness ($443,628). We made this
determination based on the following factors:

     - the property's vacancy rate for the month ended July, 2004 was 2%, and
       its loss rate was 12%, as compared to a vacancy and loss rate of 5%
       projected by the appraiser; and

     - our assessment of the general economic outlook for the area in which the
       property is located.

     For Hunters Glen Apartments V, we assigned it a gross property value of
$20,912,630, which is equal to 95% of its appraised value less the prepayment
penalty on its outstanding mortgage indebtedness ($2,837,370). We made this
determination based on the following factors:

     - the property's vacancy rate for the month ended July, 2004 was 3%, and
       its loss rate was 11%, as compared to a vacancy and loss rate of 6%
       projected by the appraiser;

     - our assessment of recent housing trends in the local market in which the
       property is located; and

     - our assessment of the general economic outlook for the area in which the
       property is located.

     For Hunters Glen Apartments VI, we assigned it a gross property value of
$22,696,819, which is equal to 95% of its appraised value less the prepayment
penalty on its outstanding mortgage indebtedness ($2,953,181). We made this
determination based on the following factors:

     - the property's vacancy rate for the month ended July, 2004 was 7%, and
       its loss rate was 11%, as compared to a vacancy and loss rate of 5%
       projected by the appraiser;

     - our assessment of recent housing trends in the local market in which the
       property is located; and

     - our assessment of the general economic outlook for the area in which the
       property is located.

     For Pickwick Place Apartments, we assigned it a gross property value of
$11,322,598, which is equal to 77.5% of its appraised value less the prepayment
penalty on its outstanding mortgage indebtedness ($141,067). We made this
determination based on the following factors:

     - the property's vacancy rate for the month ended July, 2004 was 2%, and
       its loss rate was 17%, as compared to a vacancy and loss rate of 9%
       projected by the appraiser;

     - our assessment of recent housing trends in the local market in which the
       property is located; and

     - our assessment of the general economic outlook for the area in which the
       property is located.

     For Twin Lake Towers Apartments, we assigned it a gross property value of
$22,059,656, which is equal to 90% of its appraised value less the prepayment
penalty on its outstanding mortgage indebtedness ($1,070,344). We made this
determination based on the following factors:

     - the property's vacancy rate for the month ended July, 2004 was 3%, and
       its loss rate was 16%, as compared to a vacancy and loss rate of 7%
       projected by the appraiser;

                                        20


     - our assessment of recent housing trends in the local market in which the
       property is located; and

     - our assessment of the general economic outlook for the area in which the
       property is located.

     The following table compares the appraised values of your partnership's
properties to the gross property values that we used to determine our offer
price:

<Table>
<Caption>
                                                                            PREPAYMENT     NET GROSS
PROPERTY                                   APPRAISED VALUE   GROSS VALUE     PENALTY     PROPERTY VALUE
- --------                                   ---------------   ------------   ----------   --------------
                                                                             
Chambers Ridge Apartments................   $ 15,500,000     $ 12,060,000   $       --    $ 12,060,000
Hunters Glen Apartments - IV.............     21,000,000       19,950,000      443,628      19,506,372
Hunters Glen Apartments - V..............     25,000,000       23,750,000    2,837,370      20,912,630
Hunters Glen Apartments - VI.............     27,000,000       25,650,000    2,953,181      22,696,819
Pickwick Place Apartments................     14,800,000     $ 11,463,655      141,067      11,322,598
Twin Lake Towers Apartments..............     25,700,000       23,130,000    1,070,344      22,059,656
                                            ------------     ------------   ----------    ------------
Total....................................   $129,000,000     $116,003,665   $7,445,590    $108,558,075
                                            ============     ============   ==========    ============
</Table>

     After determining the aggregate gross property value, we then calculated an
equity value for your partnership based on such gross property value by adding
the value of the non-real estate assets of your partnership and deducting its
liabilities, including mortgage debt and debt owed by your partnership to the
general partner or its affiliates.

     Finally, we allocated 99% of this net equity value to limited partners,
which is the percentage of net proceeds that would be paid to limited partners
in the event of a liquidation of your partnership. Our offer price represents
the net equity value per unit determined in this manner, plus a pro rata portion
of the settlement fund, as indicated below.

<Table>
                                                           
Aggregate gross property value of partnership properties....  $108,558,075
Plus: Cash and cash equivalents.............................     1,080,606
Plus: Other partnership assets, net of security deposits....     1,344,494
Less: Mortgage debt, including accrued interest.............   (72,660,359)
Less: Accounts payable and accrued expenses.................      (259,741)
Less: Other liabilities.....................................    (1,666,072)
                                                              ------------
Partnership valuation before taxes and certain costs........  $ 36,397,003
Less: Estimated state entity taxes & state nonresident
  withholding...............................................    (1,051,956)
                                                              ------------
Net equity value of your partnership........................  $ 35,345,047
Percentage of net equity value allocated to holders of
  units.....................................................        99.00%
                                                              ------------
Net equity value of units...................................  $ 34,991,066
  Total number of units.....................................        44,718
                                                              ------------
Net equity value per unit...................................  $     782.48
                                                              ============
Plus: Payment from the settlement fund......................         23.83
                                                              ------------
Cash consideration per unit.................................  $     806.31
                                                              ============
</Table>

     Comparison of Offer Price to Alternative Consideration.  To assist holders
of units in evaluating the offer, your general partner, which is our affiliate,
has attempted to compare the offer price against: (a) prices at which the units
have sold on the secondary market and (b) the estimated liquidation proceeds
payable per unit, assuming a sale of properties at prices equal to appraised
values determined by the independent appraiser. The general partner of your
partnership believes that analyzing the alternatives in terms of estimated
value, based upon currently available data and, where appropriate, reasonable
assumptions made in good faith, establishes a reasonable framework for comparing
alternatives. Since the value of the consideration for alternatives to the offer
is dependent upon varying market conditions, no

                                        21


assurance can be given that the estimated values reflect the actual range of
possible values. The results of these comparative analyses are summarized in the
chart below.

<Table>
<Caption>
COMPARISON TABLE                                               PER UNIT
- ----------------                                               ---------
                                                            
Cash offer price............................................   $  806.31
Alternatives
  Highest prior cash tender offer price.....................   $  804.00(1)
  Highest price on secondary market.........................   $  749.20
  Estimated liquidation proceeds (based on appraised
     value).................................................   $1,067.22
</Table>

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

(1) Highest price offered in our 2000-2003 tender offers to date.

PRIOR TENDER OFFERS

     2003.  On December 31, 2003, we completed a tender offer commenced on
November 14, 2003. We acquired 302 units in that tender offer at a price of
$364.17 per unit.

     2002.  On June 25, 2002, we completed a tender offer commenced on May 7,
2002. We acquired 511 units in that offer at a price of $471.00 per unit.

     2000.  On September 28, 2000, we completed a tender offer commenced on July
24, 2000. We acquired 2,193 units in that offer at a price of $804.00 per unit.

     Prices on Secondary Market.  Secondary market sales information is not a
reliable measure of value because of the limited amount of any known trades.
Except for offers made by us and unaffiliated third parties, privately
negotiated sales and sales through intermediaries are the only means which may
be available to a limited partner to liquidate an investment in units (other
than our offer) because the units are not listed or traded on any exchange or
quoted on Nasdaq, on the Electronic Bulletin Board, or in "pink sheets."
Secondary sales activity for the units, including privately negotiated sales,
has been limited and sporadic.

     Set forth below are the high and low sale prices of units during the year
ending December 31, 2004 (through August 31) and the year ended December 31,
2003 as reported by Direct Investments Spectrum (formerly known as The
Partnership Spectrum), which is an independent, third-party source. The gross
sales prices reported by Direct Investments Spectrum do not necessarily reflect
the net sales proceeds received by sellers of units, which typically are reduced
by commissions and other secondary market transaction costs to amounts less than
the reported price. Direct Investments Spectrum represents only one source of
secondary sales information, and other services may contain prices for the units
that equal or exceed the sales prices reported in Direct Investments Spectrum.
We do not know whether the information compiled by Direct Investments Spectrum
is accurate or complete.

 SALES PRICES OF PARTNERSHIP UNITS, AS REPORTED BY DIRECT INVESTMENTS SPECTRUM

<Table>
<Caption>
                                                               HIGH       LOW
                                                              -------   -------
                                                                  
Year Ending December 31, 2004 (through August 31):            $420.00   $420.00
Year Ended December 31, 2003:                                     N/A       N/A
</Table>

     Set forth in the table below are the high and low sales prices of units
during the year ending December 31, 2004 (through September 30) and the year
ended December 31, 2003, as reported by the American Partnership Board, which is
an independent, third-party source. The gross sales prices reported by American
Partnership Board do not necessarily reflect the net sales proceeds received by
sellers of units, which typically are reduced by commissions and other secondary
market transaction costs to amounts less than the reported prices. The American
Partnership Board represents one source of secondary sales information, and
other services may contain prices for units that equal or exceed the sales
prices

                                        22


reported by the American Partnership Board. We do not know whether the
information compiled by the American Partnership Board is accurate or complete.

SALES PRICES OF PARTNERSHIP UNITS, AS REPORTED BY THE AMERICAN PARTNERSHIP BOARD

<Table>
<Caption>
                                                              HIGH   LOW
                                                              ----   ---
                                                               
Year Ending December 31, 2004 (through September 30):         N/A    N/A
Year Ended December 31, 2003:                                 N/A    N/A
</Table>

                                        23


ESTIMATED LIQUIDATION PROCEEDS BASED ON INDEPENDENT APPRAISAL

     Selection and Qualifications of Independent Appraiser.  Under the terms of
the settlement, your partnership's property was appraised by American Appraisal
Associates, Inc. ("AAA"), an independent appraiser appointed by the court. The
information set forth below was provided to us by AAA with respect to its
appraisals.

     AAA is an experienced independent valuation consulting firm with more than
50 offices on four continents. AAA provides valuation and consulting services
for the real estate industry through its specialized industry focus and operates
through a team of professionals with different economical, financial,
statistical, legal, architectural, urban and engineering knowledge and
expertise.

     Factors Considered.  AAA performed complete appraisals of all of your
partnership's properties. AAA has represented that its report was prepared in
conformity with the Uniform Standards of Professional Appraisal Practice and the
Code of Professional Ethics and Standards of Professional Practice of the
Appraisal Institute. We furnished the appraiser with all of the necessary
information requested by AAA in connection with the appraisal. The information
furnished to the appraiser was true, correct and complete in all material
respects. No limitations were imposed on AAA by us or any of our affiliates. In
preparing its valuation of your partnership property, AAA:

     - inspected and analyzed the exterior of all buildings and site
       improvements and a representative sample of units;

     - conducted neighborhood and area research, including major employers,
       demographics (population trends, number of households, and income
       trends), housing trends, surrounding uses, and general economic outlook
       of the area;

     - conducted market research of rental inventory, historical vacancy rates,
       historical average rental rates, occupancy trends, concessions, and
       marketing strategies in the submarket, and occupancy rates at competing
       properties;

     - reviewed leasing policy, concessions and history of recent occupancy;

     - reviewed the historical operating statements for your partnership's
       property and an operating budget forecast for 2003;

     - prepared an estimate of stabilized income and expense (for capitalization
       purposes);

     - conducted market inquiries into recent sales of similar properties to
       ascertain sales price per unit, effective gross income multipliers and
       capitalization rates; and

     - prepared sales comparison and income capitalization approaches to value.

     AAA was provided by us with the following management budgets for your
partnership's property:

<Table>
<Caption>
                                  CHAMBERS RIDGE          HUNTERS GLEN IV         HUNTERS GLEN V
                                 FISCAL YEAR 2003        FISCAL YEAR 2003        FISCAL YEAR 2003
                                 MANAGEMENT BUDGET       MANAGEMENT BUDGET       MANAGEMENT BUDGET
                               ---------------------   ---------------------   ---------------------
DESCRIPTION                      TOTAL      PER UNIT     TOTAL      PER UNIT     TOTAL      PER UNIT
- -----------                    ----------   --------   ----------   --------   ----------   --------
                                                                          
Revenues
  Rental Income..............  $2,548,446    $7,866    $2,934,404   $11,115    $3,409,373   $11,215
  Vacancy....................     140,000       432       154,050       584       170,537       561
  Credit Loss/Concessions....      63,888       197             0         0        22,344        74
     Subtotal................  $  203,888    $  629    $  154,050   $   584    $  192,881   $   634
  Laundry Income.............  $        0    $    0    $   51,852   $   196    $   53,491   $   176
  Garage Revenue.............           0         0             0         0             0         0
  Other Misc. Revenue........     177,725       549       174,208       660       299,456       985
     Subtotal Other Income...  $  177,725    $  549    $  226,060   $   856    $  352,947   $ 1,161
</Table>

                                        24


<Table>
<Caption>
                                  CHAMBERS RIDGE          HUNTERS GLEN IV         HUNTERS GLEN V
                                 FISCAL YEAR 2003        FISCAL YEAR 2003        FISCAL YEAR 2003
                                 MANAGEMENT BUDGET       MANAGEMENT BUDGET       MANAGEMENT BUDGET
                               ---------------------   ---------------------   ---------------------
DESCRIPTION                      TOTAL      PER UNIT     TOTAL      PER UNIT     TOTAL      PER UNIT
- -----------                    ----------   --------   ----------   --------   ----------   --------
                                                                          
Effective Gross Income.......  $2,522,283    $7,785    $3,006,414   $11,388    $3,569,439   $11,742
Operating Expenses
  Taxes......................  $  191,940    $  592    $  394,944   $ 1,496    $  454,788   $ 1,496
  Insurance..................      55,815       172        82,586       313       105,021       345
  Utilities..................     288,010       889       172,701       654       152,451       501
  Repair & Maintenance.......      50,425       156        52,623       199        72,388       238
  Cleaning...................     211,880       654        52,431       199        58,080       191
  Landscaping................           0         0        61,476       233        73,722       243
  Security...................           0         0             0         0             0         0
  Marketing & Leasing........      37,640       116        16,584        63        18,163        60
  General Administrative.....     263,122       812       172,457       653       184,569       607
  Management.................     126,549       391       150,321       569       179,880       592
  Miscellaneous..............       1,732         5         7,253        27         8,268        27
Total Operating Expenses.....  $1,227,113    $3,787    $1,163,376   $ 4,407    $1,307,330   $ 4,300
  Reserves...................           0         0             0         0             0         0
Net Income...................  $1,295,170    $3,997    $1,843,038   $ 6,981    $2,262,109   $ 7,441
</Table>

<Table>
<Caption>
                                  HUNTERS GLEN VI           PICKWICK PLACE          TWIN LAKE TOWERS
                                  FISCAL YEAR 2003         FISCAL YEAR 2003         FISCAL YEAR 2003
                                 MANAGEMENT BUDGET        MANAGEMENT BUDGET        MANAGEMENT BUDGET
                               ----------------------   ----------------------   ----------------------
DESCRIPTION                       TOTAL      PER UNIT      TOTAL      PER UNIT      TOTAL      PER UNIT
- -----------                    -----------   --------   -----------   --------   -----------   --------
                                                                             
Revenues
  Rental Income..............  $3,643,450    $11,108    $2,667,765     $7,940    $3,956,217     $9,915
  Vacancy....................     174,000        530       312,298        929       319,958        802
  Credit Loss/Concessions....      32,063         98        83,702        249       105,808        265
     Subtotal................  $  206,063    $   628    $  396,000     $1,179    $  425,766     $1,067
  Laundry Income.............  $   58,278    $   178    $        0     $    0    $        0     $    0
  Garage Revenue.............           0          0             0          0             0          0
  Other Misc. Revenue........     285,786        871       124,807        371       313,122        785
     Subtotal Other Income...  $  344,064    $ 1,049    $  124,807     $  371    $  313,122     $  785
Effective Gross Income.......  $3,781,451    $11,529    $2,396,572     $7,133    $3,843,573     $9,633
</Table>

                                        25


<Table>
<Caption>
                                  HUNTERS GLEN VI           PICKWICK PLACE          TWIN LAKE TOWERS
                                  FISCAL YEAR 2003         FISCAL YEAR 2003         FISCAL YEAR 2003
                                 MANAGEMENT BUDGET        MANAGEMENT BUDGET        MANAGEMENT BUDGET
                               ----------------------   ----------------------   ----------------------
DESCRIPTION                       TOTAL      PER UNIT      TOTAL      PER UNIT      TOTAL      PER UNIT
- -----------                    -----------   --------   -----------   --------   -----------   --------
                                                                             
Operating Expenses
  Taxes......................  $  490,692    $ 1,496    $  277,727     $  827    $  321,166     $  805
  Insurance..................     101,548        310        61,568        183        78,588        197
  Utilities..................     166,159        507       174,895        521       406,257      1,018
  Repair & Maintenance.......      56,686        173       109,190        325        56,949        143
  Cleaning...................      62,580        191       145,546        433             0          0
  Landscaping................      76,023        232        37,485        112       111,145        279
  Security...................           0          0        12,046         36             0          0
  Marketing & Leasing........      20,858         64        51,167        152        59,726        150
  General Administrative.....     197,711        603       257,729        767       324,768        814
  Management.................     189,073        576       118,953        354       159,201        399
  Miscellaneous..............       8,816         27             0          0        77,131        193
Total Operating Expenses.....  $1,370,146    $ 4,177    $1,246,306     $3,709    $1,594,931     $3,997
  Reserves...................           0          0             0          0             0          0
Net Income...................  $2,411,305    $ 7,352    $1,150,266     $3,423    $2,248,642     $5,636
</Table>

     THE ABOVE MANAGEMENT BUDGETS ARE INTERNALLY PREPARED OPERATING PROJECTIONS
FOR THE PARTNERSHIP'S PROPERTIES. A MANAGEMENT BUDGET DOES NOT REFLECT A
PROPERTY'S ACTUAL PERFORMANCE, OR CHANGES IN THE CONDITION OF A PROPERTY, IN THE
LOCAL AREA SURROUNDING A PROPERTY OR IN THE ECONOMY IN GENERAL.

     Summary of Approaches and Methodologies Employed.  The following summary
describes the material approaches and analyses employed by AAA in preparing the
appraisals. The partnership imposed no conditions or limitations on the scope of
AAA's investigation or the methods and procedures to be followed in preparing
the appraisal. AAA principally relied on two approaches to valuation: (1) the
sales comparison approach and (2) the income capitalization approach.

     The sales comparison approach uses analysis techniques and sales of
comparable improved properties in surrounding or competing areas to derive units
of comparison that are then used to indicate a value for the subject property.
Under this approach, the primary methods of analysis used by the appraiser were:
(1) sales price per unit analysis; (2) net operating income analysis; and (3)
effective gross income analysis.

     The purpose of the income capitalization approach is to value an
income-producing property by analyzing likely future income and expenses of the
property over a reasonable holding period. Under the income capitalization
approach, AAA performed: (1) a direct capitalization analysis and (2) a
discounted cash flow analysis to derive property value. The direct
capitalization analysis determines the value of a property by applying a
capitalization rate that takes into account all of the factors influencing the
value of such property to the net operating income of such property for a single
year. The direct capitalization method is normally more appropriate for
properties with relatively stable operating histories and expectations. The
discounted cash flow analysis determines the value of a property by discounting
to present value the estimated operating cash flow of such property and the
estimated proceeds of a hypothetical sale of such property at the end of an
assumed holding period. The discounted cash flow method is more appropriate for
the analysis of investment properties with multiple or long-term leases,
particularly leases with cancellation clauses or renewal options. It is
especially useful for multi-tenant properties in volatile markets.

     AAA relied principally on the income capitalization approach to valuation
and secondarily on the sales comparison approach. Although the sales comparison
approach is considered a reliable method for valuing property, the income
capitalization approach is the primary approach used for valuing income
producing property, such as your partnership's property.

                                        26


     Summary of Independent Appraisals of Your Partnership's Property.  AAA
performed complete appraisals of all of your partnership's properties. The
summary set forth below describes the material conclusions reached by AAA based
on the values determined under the valuation approaches and subject to the
assumptions and limitations described below. The estimated total "as is" market
value of the fee simple estate of your partnership's property is $129,000,000,
which was determined by adding the estimated values determined by AAA for each
of your partnership's properties and which is higher than our estimated total
gross valuation of $108,558,075.

  CHAMBERS RIDGE

     Valuation Under Sales Comparison Approach.  AAA compared four apartment
complexes with Chambers Ridge that were sold between October 1999 and June 2000
and located in the property's real estate market area. Based on its qualitative
analysis, AAA rated the locations of one comparable property as superior and
three comparable properties as inferior to the location of Chambers Ridge. AAA
rated the quality/appeal of three comparable properties as comparable and one
comparable property as inferior to the quality/appeal of Chambers Ridge. AAA
rated the amenities of three comparable properties as comparable and one
comparable property as inferior to the amenities of Chambers Ridge.

     AAA made adjustments to the sales price per unit of each comparable
property to reflect differences from Chambers Ridge in location, number of
units, quality/appeal, age/condition, occupancy at sale, amenities and average
unit size. Based on the available data, AAA concluded a value range of $48,833
to $63,135 per unit with a mean or average adjusted price of $53,993 per unit
and a median adjusted price of $52,001 per unit. Thus, the estimated value based
on a $52,000 sales price per unit for the 324 units was approximately
$16,800,000.

     As part of the sales comparison approach, AAA also conducted a net
operating income ("NOI") analysis. NOI effectively takes into account the
various physical, location and operating aspects of the sale. AAA compared
Chambers Ridge's NOI to the NOI of the four comparable properties and arrived at
a percentage adjustment. After applying the percentage adjustment to the sales
price per unit of each comparable property, the range of value was between
$37,864 and $50,122 per unit, with an average of $44,575 per unit. The appraiser
concluded a value of $48,000 per unit for the 324 units of the property,
resulting in an estimated "as is" market value of $15,600,000 using the NOI
analysis.

     AAA also performed an effective gross income multiplier ("EGIM") analysis.
The EGIM measures the relationship between the sales price of a property and its
effective gross income, which is the total annual income that a property would
produce after an allowance for vacancy and credit loss. AAA estimated the
operating expense ratio ("OER") of Chambers Ridge to be 44.39% before reserves,
with the expense ratios of the four comparable properties ranging from 46.39% to
53.82%, resulting in EGIMs ranging from 4.76 to 5.25. Thus, AAA concluded an
EGIM of 6.00 for Chambers Ridge, and applied the EGIM to the stabilized
effective gross income for the property (see Income Approach section below),
resulting in a value conclusion of approximately $15,800,000.

     AAA estimated the value using the price per unit analysis at $16,800,000,
the value using the NOI analysis at $15,600,000 and the value using the EGIM
analysis at $15,800,000. Based on these three valuation methods, AAA concluded
that the reconciled value for Chambers Ridge under the sales comparison approach
was $16,000,000. AAA assumed a marketing and exposure period of 6 to 12 months.

     Valuation Under Income Capitalization Approach.  Under the income
capitalization approach, AAA performed: (1) a direct capitalization analysis and
(2) a discounted cash flow analysis to derive a value for Chambers Ridge.

     AAA first utilized a discounted cash flow method to analyze the value of
the property. Under this method, anticipated future cash flow and a reversionary
value are discounted at an appropriate rate of return to arrive at an estimate
of present value. AAA also employed a direct capitalization analysis on the
property by dividing a forecast of net operating income ("NOI") by an
appropriate capitalization rate. AAA performed a market rent analysis for the
property to derive a projected rental income. The analysis

                                        27


included both a review of the subject's current asking and actual rent rates as
well as a comparison with comparable apartment properties. AAA calculated
Chambers Ridge's effective gross income ("EGI") by adding apartment rental
collections to other income and then making an adjustment for vacancy and
collection loss. Under this analysis, AAA arrived at an EGI of $2,627.774. Once
the EGI was established, operating expenses were deducted from the EGI in order
to arrive at an NOI for Chambers Ridge of approximately $1,380,368. AAA
performed a pro forma analysis of revenue and expenses for the property to
derive the subject's stabilized NOI. AAA relied on the subject's historical and
budgeted income and expenses for this estimate. AAA derived appropriate
investment criteria, including an overall capitalization rate, terminal
capitalization rate and a discount rate based upon analysis of comparable sales
and a survey of real estate investors.

     The assumptions employed by AAA to determine the value of Chambers Ridge
under the income approach included:

          (1) stabilized vacancy and collection loss rate of 9%;

          (2) replacement reserve of $250 per unit;

          (3) overall capitalization rate of 9.00%;

          (4) terminal capitalization rate of 10.00%;

          (5) discount rate of 11.50%;

          (6) 2.00% cost of sale at reversion; and

          (7) holding period of 10 years.

No adjustment was made for lease-up costs because the property was near or at a
stabilized condition. No adjustment was made for concessions. Based on these
assumptions, AAA's estimate of cash flows for a 10-year period resulted in an
indicated value of $15,600,000 through the discounted cash flow method. The
reversion value contributed approximately 39% of the value.

     Under the direct capitalization method, utilizing a capitalization rate of
9.00%, the projected NOI resulted in a value (after rounding) of $15,300,000.

     Using the income capitalization approach, AAA determined on an as-is basis
that the direct capitalization method and the discounted cash flow method
indicated the value for Chambers Ridge was $15,500,000.

     Reconciliation of Values and Conclusions of Appraisal.  The final step in
the appraisal process was to reconcile the sales comparison approach and the
income capitalization approach values to arrive at a final value conclusion. The
reconciliation of the two approaches involved weighing the valuation techniques
in relation to their substantiation by market and other sources of data, the
relativity and applicability of the approaches to the property type, and the
purpose of the valuation. AAA concluded that the estimated market value under
the sales comparison approach was $16,000,000 and the estimated market value
under the income capitalization approach was $15,500,000. After reconciling the
various factors, AAA determined a final "as is" market value for Chambers Ridge
of $15,500,000 as of June 1, 2003.

  HUNTERS GLEN APARTMENTS IV

     Valuation Under Sales Comparison Approach.  AAA compared four apartment
complexes with Hunters Glen Apartments IV that were sold between January 2001
and June 2002 and located in the property's real estate market area. Based on
its qualitative analysis, AAA rated the locations of one comparable property as
comparable and three comparable properties as inferior to the location of
Hunters Glen Apartments IV. AAA rated the quality/appeal of one comparable
property as superior, one comparable property as comparable and two comparable
properties as inferior to the quality/appeal of Hunters Glen Apartments IV. AAA
rated the amenities of one comparable property as comparable and three
comparable properties as inferior to the amenities of Hunters Glen Apartments
IV.

                                        28


     AAA made adjustments to the sales price per unit of each comparable
property to reflect differences from Hunters Glen Apartments IV in location,
number of units, quality/appeal, age/condition, occupancy at sale, amenities and
average unit size. Based on the available data, AAA concluded a value range of
$73,853 to $93,500 per unit with a mean or average adjusted price of $83,699 per
unit and a median adjusted price of $83,721 per unit. Thus, the estimated value
based on a $80,000 sales price per unit for the 264 units was approximately
$21,100,000 after adjustment for present value of concessions.

     As part of the sales comparison approach, AAA also conducted a net
operating income ("NOI") analysis. NOI effectively takes into account the
various physical, location and operating aspects of the sale. AAA compared
Hunters Glen Apartments IV's NOI to the NOI of the four comparable properties
and arrived at a percentage adjustment. After applying the percentage adjustment
to the sales price per unit of each comparable property, the range of value was
between $56,493 and $100,266 per unit, with an average of $84,133 per unit. The
appraiser concluded a value of $80,000 per unit for the 264 units of the
property, resulting in an estimated "as is" market value of $21,100,00 using the
NOI analysis after adjustment for present value of concessions.

     AAA also performed an effective gross income multiplier ("EGIM") analysis.
The EGIM measures the relationship between the sales price of a property and its
effective gross income, which is the total annual income that a property would
produce after an allowance for vacancy and credit loss. AAA estimated the
operating expense ratio ("OER") of Hunters Glen Apartments IV to be 39.40%
before reserves, with the expense ratios of the four comparable properties
ranging from 29.17% to 51.21%, resulting in EGIMs ranging from 5.96 to 8.13.
Thus, AAA concluded an EGIM of 7.00 for Hunters Glen Apartments IV, and applied
the EGIM to the stabilized effective gross income for the property (see Income
Approach section below), resulting in a value conclusion of approximately
$21,200,000 after adjustment for present value of concessions.

     AAA estimated the value using the price per unit analysis at $21,100,000,
the value using the NOI analysis at $21,100,000 and the value using the EGIM
analysis at $21,200,000. Based on these three valuation methods, AAA concluded
that the reconciled value for Hunters Glen Apartments IV under the sales
comparison approach was $21,100,000. AAA assumed a marketing and exposure period
of 6 to 12 months.

     Valuation Under Income Capitalization Approach.  Under the income
capitalization approach, AAA performed: (1) a direct capitalization analysis and
(2) a discounted cash flow analysis to derive a value for Hunters Glen
Apartments IV.

     AAA first utilized a discounted cash flow method to analyze the value of
the property. Under this method, anticipated future cash flow and a reversionary
value are discounted at an appropriate rate of return to arrive at an estimate
of present value. AAA also employed a direct capitalization analysis on the
property by dividing a forecast of net operating income ("NOI") by an
appropriate capitalization rate. AAA performed a market rent analysis for the
property to derive a projected rental income. The analysis included both a
review of the subject's current asking and actual rent rates as well as a
comparison with comparable apartment properties. AAA calculated Hunters Glen
Apartments IV's effective gross income ("EGI") by adding apartment rental
collections to other income and then making an adjustment for vacancy and
collection loss. Under this analysis, AAA arrived at an EGI of $3,032,543. Once
the EGI was established, operating expenses were deducted from the EGI in order
to arrive at an NOI for Hunters Glen Apartments IV of approximately $1,771,852.
AAA performed a pro forma analysis of revenue and expenses for the property to
derive the subject's stabilized NOI. AAA relied on the subject's historical and
budgeted income and expenses for this estimate. AAA derived appropriate
investment criteria, including an overall capitalization rate, terminal
capitalization rate and a discount rate based upon analysis of comparable sales
and a survey of real estate investors.

                                        29


     The assumptions employed by AAA to determine the value of Hunters Glen
Apartments IV under the income approach included:

          (1) stabilized vacancy and collection loss rate of 6%;

          (2) replacement reserve of $250 per unit;

          (3) overall capitalization rate of 8.50%;

          (4) terminal capitalization rate of 9.50%;

          (5) discount rate of 11.00%;

          (6) 2.00% cost of sale at reversion; and

          (7) holding period of 10 years.

No adjustment was made for lease-up costs because the property was near or at a
stabilized condition. An adjustment was made for concessions due to soft market
conditions, and AAA estimated the present value of concessions to be $55,000.
Based on these assumptions, AAA's estimate of cash flows for a 10-year period
resulted in an indicated value of $21,000,000 through the discounted cash flow
method. The reversion value contributed approximately 41% of the value.

     Under the direct capitalization method, utilizing a capitalization rate of
8.50%, the projected NOI resulted in a value (after rounding) of $20,800,000
after adjustments for present value of concessions, if any.

     Using the income capitalization approach, AAA determined on an as-is basis
that the direct capitalization method and the discounted cash flow method
indicated the value for Hunters Glen Apartments IV was $21,000,000.

     Reconciliation of Values and Conclusions of Appraisal.  The final step in
the appraisal process was to reconcile the sales comparison approach and the
income capitalization approach values to arrive at a final value conclusion. The
reconciliation of the two approaches involved weighing the valuation techniques
in relation to their substantiation by market and other sources of data, the
relativity and applicability of the approaches to the property type, and the
purpose of the valuation. AAA concluded that the estimated market value under
the sales comparison approach was $21,100,000 and the estimated market value
under the income capitalization approach was $21,000,000. After reconciling the
various factors, AAA determined a final "as is" market value for Hunters Glen
Apartments IV of $21,000,000 as of June 3, 2003.

  HUNTERS GLEN APARTMENTS V

     Valuation Under Sales Comparison Approach.  AAA compared four apartment
complexes with Hunters Glen Apartments V that were sold between January 2001 and
June 2002 and located in the property's real estate market area. Based on its
qualitative analysis, AAA rated the locations of one comparable property as
comparable and three comparable properties as inferior to the location of
Hunters Glen Apartments V. AAA rated the quality/appeal of one comparable
property as superior, one comparable property as comparable and two comparable
properties as inferior to the quality/appeal of Hunters Glen Apartments V. AAA
rated the amenities of one comparable property as comparable and three
comparable properties as inferior to the amenities of Hunters Glen Apartments V.

     AAA made adjustments to the sales price per unit of each comparable
property to reflect differences from Hunters Glen Apartments V in location,
number of units, quality/appeal, age/condition, occupancy at sale, amenities and
average unit size. Based on the available data, AAA concluded a value range of
$73,853 to $94,587 per unit with a mean or average adjusted price of $84,608 per
unit and a median adjusted price of $84,996 per unit. Thus, the estimated value
based on a $84,000 sales price per unit for the 304 units was approximately
$25,500,000 after adjustment for present value of concessions.

                                        30


     As part of the sales comparison approach, AAA also conducted a net
operating income ("NOI") analysis. NOI effectively takes into account the
various physical, location and operating aspects of the sale. AAA compared
Hunters Glen Apartments V's NOI to the NOI of the four comparable properties and
arrived at a percentage adjustment. After applying the percentage adjustment to
the sales price per unit of each comparable property, the range of value was
between $56,008 and $99,405 per unit, with an average of $83,411 per unit. The
appraiser concluded a value of $83,000 per unit for the 304 units of the
property, resulting in an estimated "as is" market value of $25,200,000 using
the NOI analysis after adjustment for present value of concessions.

     AAA also performed an effective gross income multiplier ("EGIM") analysis.
The EGIM measures the relationship between the sales price of a property and its
effective gross income, which is the total annual income that a property would
produce after an allowance for vacancy and credit loss. AAA estimated the
operating expense ratio ("OER") of Hunters Glen Apartments V to be 39.58% before
reserves, with the expense ratios of the four comparable properties ranging from
29.17% to 51.21%, resulting in EGIMs ranging from 5.96 to 8.13. Thus, AAA
concluded an EGIM of 7.5 for Hunters Glen Apartments V, and applied the EGIM to
the stabilized effective gross income for the property (see Income Approach
section below), resulting in a value conclusion of approximately $26,000,000
after adjustment for present value of concessions.

     AAA estimated the value using the price per unit analysis at $25,500,000,
the value using the NOI analysis at $25,200,000 and the value using the EGIM
analysis at $26,000,000. Based on these three valuation methods, AAA concluded
that the reconciled value for Hunters Glen Apartments V under the sales
comparison approach was $25,500,000. AAA assumed a marketing and exposure period
of 6 to 12 months.

     Valuation Under Income Capitalization Approach.  Under the income
capitalization approach, AAA performed: (1) a direct capitalization analysis and
(2) a discounted cash flow analysis to derive a value for Hunters Glen
Apartments V.

     AAA first utilized a discounted cash flow method to analyze the value of
the property. Under this method, anticipated future cash flow and a reversionary
value are discounted at an appropriate rate of return to arrive at an estimate
of present value. AAA also employed a direct capitalization analysis on the
property by dividing a forecast of net operating income ("NOI") by an
appropriate capitalization rate. AAA performed a market rent analysis for the
property to derive a projected rental income. The analysis included both a
review of the subject's current asking and actual rent rates as well as a
comparison with comparable apartment properties. AAA calculated Hunters Glen
Apartments V's effective gross income ("EGI") by adding apartment rental
collections to other income and then making an adjustment for vacancy and
collection loss. Under this analysis, AAA arrived at an EGI of $3,473,583. Once
the EGI was established, operating expenses were deducted from the EGI in order
to arrive at an NOI for Hunters Glen Apartments V of approximately $2,022,800.
AAA performed a pro forma analysis of revenue and expenses for the property to
derive the subject's stabilized NOI. AAA relied on the subject's historical and
budgeted income and expenses for this estimate. AAA derived appropriate
investment criteria, including an overall capitalization rate, terminal
capitalization rate and a discount rate based upon analysis of comparable sales
and a survey of real estate investors.

     The assumptions employed by AAA to determine the value of Hunters Glen
Apartments V under the income approach included:

          (1) stabilized vacancy and collection loss rate of 6%;

          (2) replacement reserve of $250 per unit;

          (3) overall capitalization rate of 8.00%;

          (4) terminal capitalization rate of 9.00%;

          (5) discount rate of 11.00%;

                                        31


          (6) 2.00% cost of sale at reversion; and

          (7) holding period of 10 years.

No adjustment was made for lease-up costs because the property was near or at a
stabilized condition. An adjustment was made for concessions due to soft market
conditions, and AAA estimated the present value of concessions to be $63,000.
Based on these assumptions, AAA's estimate of cash flows for a 10-year period
resulted in an indicated value of $24,500,000 through the discounted cash flow
method. The reversion value contributed approximately 43% of the value.

     Under the direct capitalization method, utilizing a capitalization rate of
8.00%, the projected NOI resulted in a value (after rounding) of $25,200,000
after adjustments for present value of concessions, if any.

     Using the income capitalization approach, AAA determined on an as-is basis
that the direct capitalization method and the discounted cash flow method
indicated the value for Hunters Glen Apartments V was $25,000,000.

     Reconciliation of Values and Conclusions of Appraisal.  The final step in
the appraisal process was to reconcile the sales comparison approach and the
income capitalization approach values to arrive at a final value conclusion. The
reconciliation of the two approaches involved weighing the valuation techniques
in relation to their substantiation by market and other sources of data, the
relativity and applicability of the approaches to the property type, and the
purpose of the valuation. AAA concluded that the estimated market value under
the sales comparison approach was $25,500,000 and the estimated market value
under the income capitalization approach was $25,000,000. After reconciling the
various factors, AAA determined a final "as is" market value for Hunters Glen
Apartments V of $25,000,000 as of June 3, 2003.

  HUNTERS GLEN APARTMENTS VI

     Valuation Under Sales Comparison Approach.  AAA compared four apartment
complexes with Hunters Glen Apartments VI that were sold between January 2001
and June 2002 and located in the property's real estate market area. Based on
its qualitative analysis, AAA rated the locations of one comparable property as
comparable and three comparable properties as inferior to the location of
Hunters Glen Apartments VI. AAA rated the quality/appeal of one comparable
property as superior, one comparable property as comparable and one comparable
property as inferior to the quality/appeal of Hunters Glen Apartments VI. AAA
rated the amenities of one comparable property as comparable and three
comparable properties as inferior to the amenities of Hunters Glen Apartments
VI.

     AAA made adjustments to the sales price per unit of each comparable
property to reflect differences from Hunters Glen Apartments VI in location,
number of units, quality/appeal, age/condition, occupancy at sale, amenities and
average unit size. Based on the available data, AAA concluded a value range of
$73,853 to $93,500 per unit with a mean or average adjusted price of $82,789 per
unit and a median adjusted price of $81,902 per unit. Thus, the estimated value
based on a $83,000 sales price per unit for the 328 units was approximately
$27,200,000 after adjustment for present value of concessions.

     As part of the sales comparison approach, AAA also conducted a net
operating income ("NOI") analysis. NOI effectively takes into account the
various physical, location and operating aspects of the sale. AAA compared
Hunters Glen Apartments VI's NOI to the NOI of the four comparable properties
and arrived at a percentage adjustment. After applying the percentage adjustment
to the sales price per unit of each comparable property, the range of value was
between $54,984 and $97,589 per unit, with an average of $81,887 per unit. The
appraiser concluded a value of $83,000 per unit for the 328 units of the
property, resulting in an estimated "as is" market value of $27,200,000 using
the NOI analysis after adjustment for present value of concessions.

     AAA also performed an effective gross income multiplier ("EGIM") analysis.
The EGIM measures the relationship between the sales price of a property and its
effective gross income, which is the total annual income that a property would
produce after an allowance for vacancy and credit loss. AAA

                                        32


estimated the operating expense ratio ("OER") of Hunters Glen Apartments VI to
be 39.97% before reserves, with the expense ratios of the five comparable
properties ranging from 29.17% to 51.21%, resulting in EGIMs ranging from 5.96
to 8.13. Thus, AAA concluded an EGIM of 7.50 for Hunters Glen Apartments VI, and
applied the EGIM to the stabilized effective gross income for the property (see
Income Approach section below), resulting in a value conclusion of approximately
$27,700,000 after adjustment for present value of concessions.

     AAA estimated the value using the price per unit analysis at $27,200,000,
the value using the NOI analysis at $27,200,000 and the value using the EGIM
analysis at $27,700,000. Based on these three valuation methods, AAA concluded
that the reconciled value for Hunters Glen Apartments VI under the sales
comparison approach was $27,500,000. AAA assumed a marketing and exposure period
of 6 to 12 months.

     Valuation Under Income Capitalization Approach.  Under the income
capitalization approach, AAA performed: (1) a direct capitalization analysis and
(2) a discounted cash flow analysis to derive a value for Hunters Glen
Apartments VI.

     AAA first utilized a discounted cash flow method to analyze the value of
the property. Under this method, anticipated future cash flow and a reversionary
value are discounted at an appropriate rate of return to arrive at an estimate
of present value. AAA also employed a direct capitalization analysis on the
property by dividing a forecast of net operating income ("NOI") by an
appropriate capitalization rate. AAA performed a market rent analysis for the
property to derive a projected rental income. The analysis included both a
review of the subject's current asking and actual rent rates as well as a
comparison with comparable apartment properties. AAA calculated Hunters Glen
Apartments VI's effective gross income ("EGI") by adding apartment rental
collections to other income and then making an adjustment for vacancy and
collection loss. Under this analysis, AAA arrived at an EGI of $3,705,835. Once
the EGI was established, operating expenses were deducted from the EGI in order
to arrive at an NOI for Hunters Glen Apartments VI of approximately $2,142,615.
AAA performed a pro forma analysis of revenue and expenses for the property to
derive the subject's stabilized NOI. AAA relied on the subject's historical and
budgeted income and expenses for this estimate. AAA derived appropriate
investment criteria, including an overall capitalization rate, terminal
capitalization rate and a discount rate based upon analysis of comparable sales
and a survey of real estate investors.

     The assumptions employed by AAA to determine the value of Hunters Glen
Apartments VI under the income approach included:

          (1) stabilized vacancy and collection loss rate of 5%;

          (2) replacement reserve of $250 per unit;

          (3) overall capitalization rate of 8.00%;

          (4) terminal capitalization rate of 9.00%;

          (5) discount rate of 11.00%;

          (6) 2.00% cost of sale at reversion; and

          (7) holding period of 10 years.

No adjustment was made for lease-up costs because the property was near or at a
stabilized condition. An adjustment was made for concessions due to soft market
conditions, and AAA estimated the present value of concessions to be $68,000.
Based on these assumptions, AAA's estimate of cash flows for a 10-year period
resulted in an indicated value of $26,000,000 through the discounted cash flow
method. The reversion value contributed approximately 42% of the value.

     Under the direct capitalization method, utilizing a capitalization rate of
8.00%, the projected NOI resulted in a value (after rounding) of $26,700,000
after adjustments for present value of concessions, if any.

                                        33


     Using the income capitalization approach, AAA determined on an as-is basis
that the direct capitalization method and the discounted cash flow method
indicated the value for Hunters Glen Apartments VI was $26,500,000.

     Reconciliation of Values and Conclusions of Appraisal.  The final step in
the appraisal process was to reconcile the sales comparison approach and the
income capitalization approach values to arrive at a final value conclusion. The
reconciliation of the two approaches involved weighing the valuation techniques
in relation to their substantiation by market and other sources of data, the
relativity and applicability of the approaches to the property type, and the
purpose of the valuation. AAA concluded that the estimated market value under
the sales comparison approach was $27,500,000 and the estimated market value
under the income capitalization approach was $26,500,000. After reconciling the
various factors, AAA determined a final "as is" market value for Hunters Glen
Apartments VI of $27,000,000 as of June 3, 2003.

  PICKWICK PLACE

     Valuation Under Sales Comparison Approach.  AAA compared five apartment
complexes with Pickwick Place that were sold between December 2000 and September
2002 and located in the property's real estate market area. Based on its
qualitative analysis, AAA rated the locations of one comparable property as
superior and four comparable properties as comparable to the location of
Pickwick Place. AAA rated the quality/appeal of all five comparable properties
as superior to the quality/appeal of Pickwick Place. AAA rated the amenities of
all five comparable properties as inferior to the amenities of Pickwick Place.

     AAA made adjustments to the sales price per unit of each comparable
property to reflect differences from Pickwick Place in location, number of
units, quality/appeal, age/condition, occupancy at sale, amenities and average
unit size. Based on the available data, AAA concluded a value range of $34,268
to $51,574 per unit with a mean or average adjusted price of $43,228 per unit
and a median adjusted price of $43,991 per unit. Thus, the estimated value based
on a $44,000 sales price per unit for the 336 units was approximately
$14,700,000 after adjustment for deferred maintenance and present value of
concessions.

     As part of the sales comparison approach, AAA also conducted a net
operating income ("NOI") analysis. NOI effectively takes into account the
various physical, location and operating aspects of the sale. AAA compared
Pickwick Place's NOI to the NOI of the five comparable properties and arrived at
a percentage adjustment. After applying the percentage adjustment to the sales
price per unit of each comparable property, the range of value was between
$36,930 and $48,935 per unit, with an average of $42,563 per unit. The appraiser
concluded a value of $43,000 per unit for the 336 units of the property,
resulting in an estimated "as is" market value of $14,300,000 using the NOI
analysis after adjustment for deferred maintenance and present value of
concessions.

     AAA also performed an effective gross income multiplier ("EGIM") analysis.
The EGIM measures the relationship between the sales price of a property and its
effective gross income, which is the total annual income that a property would
produce after an allowance for vacancy and credit loss. AAA estimated the
operating expense ratio ("OER") of Pickwick Place to be 50.48% before reserves,
with the expense ratios of the five comparable properties ranging from 50.00% to
50.00%, resulting in EGIMs ranging from 5.43 to 7.19. Thus, AAA concluded an
EGIM of Pickwick Place for 6.25, and applied the EGIM to the stabilized
effective gross income for the property (see Income Approach section below),
resulting in a value conclusion of approximately $15,400,000 after adjustment
for deferred maintenance and present value of concessions.

     AAA estimated the value using the price per unit analysis at $14,700,000,
the value using the NOI analysis at $14,300,000 and the value using the EGIM
analysis at $15,400,000. Based on these three valuation methods, AAA concluded
that the reconciled value for Pickwick Place under the sales comparison approach
was $14,800,000. AAA assumed a marketing and exposure period of 6 to 12 months.

                                        34


     Valuation Under Income Capitalization Approach.  Under the income
capitalization approach, AAA performed: (1) a direct capitalization analysis and
(2) a discounted cash flow analysis to derive a value for Pickwick Place.

     AAA first utilized a discounted cash flow method to analyze the value of
the property. Under this method, anticipated future cash flow and a reversionary
value are discounted at an appropriate rate of return to arrive at an estimate
of present value. AAA also employed a direct capitalization analysis on the
property by dividing a forecast of net operating income ("NOI") by an
appropriate capitalization rate. AAA performed a market rent analysis for the
property to derive a projected rental income. The analysis included both a
review of the subject's current asking and actual rent rates as well as a
comparison with comparable apartment properties. AAA calculated Pickwick Place's
effective gross income ("EGI") by adding apartment rental collections to other
income and then making an adjustment for vacancy and collection loss. Under this
analysis, AAA arrived at an EGI of $2,478,571. Once the EGI was established,
operating expenses were deducted from the EGI in order to arrive at an NOI for
Pickwick Place of approximately $1,143,289. AAA performed a pro forma analysis
of revenue and expenses for the property to derive the subject's stabilized NOI.
AAA relied on the subject's historical and budgeted income and expenses for this
estimate. AAA derived appropriate investment criteria, including an overall
capitalization rate, terminal capitalization rate and a discount rate based upon
analysis of comparable sales and a survey of real estate investors.

     The assumptions employed by AAA to determine the value of Pickwick Place
under the income approach included:

          (1) stabilized vacancy and collection loss rate of 9%;

          (2) replacement reserve of $250 per unit;

          (3) overall capitalization rate of 7.75%;

          (4) terminal capitalization rate of 8.25%;

          (5) discount rate of 10.50%;

          (6) 2.00% cost of sale at reversion; and

          (7) holding period of 10 years.

No adjustment was made for lease-up costs because the property was near or at a
stabilized condition. An adjustment was made for concessions due to soft market
conditions, and AAA estimated the present value of concessions to be $36,000. An
adjustment of $86,000 was made for deferred maintenance. Based on these
assumptions, AAA's estimate of cash flows for a 10-year period resulted in an
indicated value of $14,800,000 through the discounted cash flow method. The
reversion value contributed approximately 45% of the value.

     Under the direct capitalization method, utilizing a capitalization rate of
7.75%, the projected NOI resulted in a value (after rounding) of $14,600,000
after adjustments for deferred maintenance and present value of concessions, if
any.

     Using the income capitalization approach, AAA determined on an as-is basis
that the direct capitalization method and the discounted cash flow method
indicated the value for Pickwick Place was $14,700,000.

     Reconciliation of Values and Conclusions of Appraisal.  The final step in
the appraisal process was to reconcile the sales comparison approach and the
income capitalization approach values to arrive at a final value conclusion. The
reconciliation of the two approaches involved weighing the valuation techniques
in relation to their substantiation by market and other sources of data, the
relativity and applicability of the approaches to the property type, and the
purpose of the valuation. AAA concluded that the estimated market value under
the sales comparison approach was $14,800,000 and the estimated market value
under

                                        35


the income capitalization approach was $14,700,000. After reconciling the
various factors, AAA determined a final "as is" market value for Pickwick Place
of $14,800,000 as of May 7, 2003.

  TWIN LAKE TOWERS APARTMENTS

     Valuation Under Sales Comparison Approach.  AAA compared four apartment
complexes with Twin Lake Towers Apartments that were sold between May 2001 and
January 2003 and located in the property's real estate market area. Based on its
qualitative analysis, AAA rated the locations of all four comparable properties
as comparable to the location of Twin Lake Towers Apartments. AAA rated the
quality/appeal of one comparable property as superior, one comparable property
as comparable and two comparable properties as inferior to the quality/appeal of
Twin Lake Towers Apartments. AAA rated the amenities of all four comparable
properties as superior to the amenities of Twin Lake Towers Apartments.

     AAA made adjustments to the sales price per unit of each comparable
property to reflect differences from Twin Lake Towers Apartments in location,
number of units, quality/appeal, age/condition, occupancy at sale, amenities and
average unit size. Based on the available data, AAA concluded a value range of
$58,154 to $68,143 per unit with a mean or average adjusted price of $62,774 per
unit and a median adjusted price of $62,399 per unit. Thus, the estimated value
based on a $63,000 sales price per unit for the 399 units was approximately
$24,900,000 after adjustment for lease-up costs and present value of
concessions.

     As part of the sales comparison approach, AAA also conducted a net
operating income ("NOI") analysis. NOI effectively takes into account the
various physical, location and operating aspects of the sale. AAA compared Twin
Lake Towers Apartment's NOI to the NOI of the four comparable properties and
arrived at a percentage adjustment. After applying the percentage adjustment to
the sales price per unit of each comparable property, the range of value was
between $57,053 and $67,954 per unit, with an average of $62,893 per unit. The
appraiser concluded a value of $65,000 per unit for the 399 units of the
property, resulting in an estimated "as is" market value of $25,700,000 using
the NOI analysis after adjustment for lease-up costs and present value of
concessions.

     AAA also performed an effective gross income multiplier ("EGIM") analysis.
The EGIM measures the relationship between the sales price of a property and its
effective gross income, which is the total annual income that a property would
produce after an allowance for vacancy and credit loss. AAA estimated the
operating expense ratio ("OER") of Twin Lake Towers Apartments to be 40.70%
before reserves, with the expense ratios of the four comparable properties
ranging from 33.90% to 45.00%, resulting in EGIMs ranging from 6.76 to 7.61.
Thus, AAA concluded an EGIM of 6.75 for Twin Lake Towers Apartments, and applied
the EGIM to the stabilized effective gross income for the property (see Income
Approach section below), resulting in a value conclusion of approximately
$25,500,000 after adjustment for lease-up costs and present value of
concessions.

     AAA estimated the value using the price per unit analysis at $24,900,0000,
the value using the NOI analysis at $25,700,000 and the value using the EGIM
analysis at $25,500,000. Based on these three valuation methods, AAA concluded
that the reconciled value for Twin Lake Towers Apartments under the sales
comparison approach was $25,400,000. AAA assumed a marketing and exposure period
of 6 to 12 months.

     Valuation Under Income Capitalization Approach.  Under the income
capitalization approach, AAA performed: (1) a direct capitalization analysis and
(2) a discounted cash flow analysis to derive a value for Twin Lake Towers
Apartments.

     AAA first utilized a discounted cash flow method to analyze the value of
the property. Under this method, anticipated future cash flow and a reversionary
value are discounted at an appropriate rate of return to arrive at an estimate
of present value. AAA also employed a direct capitalization analysis on the
property by dividing a forecast of net operating income ("NOI") by an
appropriate capitalization rate. AAA performed a market rent analysis for the
property to derive a projected rental income. The analysis included both a
review of the subject's current asking and actual rent rates as well as a
comparison with

                                        36


comparable apartment properties. AAA calculated Twin Lake Towers Apartment's
effective gross income ("EGI") by adding apartment rental collections to other
income and then making an adjustment for vacancy and collection loss. Under this
analysis, AAA arrived at an EGI of $3,808,527. Once the EGI was established,
operating expenses were deducted from the EGI in order to arrive at an NOI for
Twin Lake Towers Apartments of approximately $2,138,570. AAA performed a pro
forma analysis of revenue and expenses for the property to derive the subject's
stabilized NOI. AAA relied on the subject's historical and budgeted income and
expenses for this estimate. AAA derived appropriate investment criteria,
including an overall capitalization rate, terminal capitalization rate and a
discount rate based upon analysis of comparable sales and a survey of real
estate investors.

     The assumptions employed by AAA to determine the value of Twin Lake Towers
Apartments under the income approach included:

          (1) stabilized vacancy and collection loss rate of 7%;

          (2) replacement reserve of $300 per unit;

          (3) overall capitalization rate of 8.25%;

          (4) terminal capitalization rate of 8.75%;

          (5) discount rate of 11.00%;

          (6) 2.00% cost of sale at reversion; and

          (7) holding period of 10 years.

An adjustment was made for lease-up costs because Twin Lake Towers Apartments'
occupancy level was below a stabilized occupancy projection Thus, AAA assumed a
12-month lease up period. An adjustment was made for concessions due to soft
market conditions, and AAA estimated the present value of concessions to be
$86,000. Based on these assumptions, AAA's estimate of cash flows for a 10-year
period resulted in an indicated value of $26,100,000 through the discounted cash
flow method. The reversion value contributed approximately 43% of the value.

     Under the direct capitalization method, utilizing a capitalization rate of
8.25%, the projected NOI resulted in a value (after rounding) of $25,700,000
after adjustments for lease-up costs and present value of concessions, if any.

     Using the income capitalization approach, AAA determined on an as-is basis
that the direct capitalization method and the discounted cash flow method
indicated the value for Twin Lake Towers Apartments was $25,900,000.

     Reconciliation of Values and Conclusions of Appraisal.  The final step in
the appraisal process was to reconcile the sales comparison approach and the
income capitalization approach values to arrive at a final value conclusion. The
reconciliation of the two approaches involved weighing the valuation techniques
in relation to their substantiation by market and other sources of data, the
relativity and applicability of the approaches to the property type, and the
purpose of the valuation. AAA concluded that the estimated market value under
the sales comparison approach was $25,400,000 and the estimated market value
under the income capitalization approach was $25,900,000. After reconciling the
various factors, AAA determined a final "as is" market value for Twin Lake
Towers Apartments of $25,700,000 as of May 28, 2003.

     Assumptions, Limitations and Qualifications of AAA's Valuation.  In
preparing the appraisal, AAA relied, without independent verification, on the
accuracy and completeness of all information supplied or otherwise made
available to it by or on behalf of the partnership. In arriving at the
appraisal, AAA assumed:

     - good and marketable title to the property;

     - validity of owner's claim to the property;

                                        37


     - no encumbrances which could not be cleared through normal processes,
       unless otherwise stated;

     - accuracy of land areas and descriptions obtained from public records;

     - no subsurface mineral and use rights or conditions;

     - no substances such as asbestos, urea-formaldehyde foam insulation, other
       chemicals, toxic wastes, or other potentially hazardous materials in
       existence or present on or in the property;

     - full compliance with applicable federal, state and local environmental
       regulations and laws, unless otherwise stated, defined and considered;

     - possession of all required licenses, consents, or other legislative or
       administrative authority from any local, state, or national government or
       private entity organization and that the renewal of these items is
       possible;

     - compliance with all applicable zoning and use regulations and
       restrictions, unless a nonconformity has been stated, defined, and
       considered;

     - utilization of the land and improvements within property boundaries and
       no encroachment or trespass of the improvements, unless otherwise stated;

     - the structural integrity of the property including its conformity to
       specific governmental code requirements, such as fire, building and
       safety, earthquake, and occupancy, or any physical defects not readily
       apparent during inspection; and

     - compliance with the Americans with Disabilities Act of 1992.

     Compensation of Appraiser.  AAA was appointed by the court to perform all
the real estate appraisals in connection with the settlement and this Litigation
Settlement Offer. AAA was paid a fee of $619,100 for the appraisals. We have
paid 50% of the costs of the appraisals, with the other 50% paid from the
settlement fund. AAA has conducted other appraisals of property in connection
with the other offers being made pursuant to the settlement agreement. Other
than the appraisals performed in connection with the settlement agreement,
during the prior two years, no material relationship has existed between AAA and
your partnership or any of its affiliates, including the AIMCO Entities.

     Availability of Appraisal Reports.  You may obtain a full copy of AAA's
appraisals upon request, without charge, by contacting the Information Agent at
one of the addresses or the telephone number on the back cover of this
Litigation Settlement Offer. Copies of the appraisal for the property are also
available for inspection and copying at the principal executive offices of the
partnership during regular business hours by any interested unitholder or his or
her designated representative at his or her cost. In addition, a copy of the
appraisals has been filed with the SEC as an exhibit to the Tender Offer
Statement and Rule 13e-3 Transaction Statement on Schedule TO.

                                        38


     In estimating the net liquidation proceeds that would be payable per unit
based on the total appraised value of your partnership's properties, we applied
the same basic methodology as described under "Valuation of Units", except that
we did not deduct any amounts that were reflected in the total appraised value
nor did we include any payment from the settlement fund. As indicated below,
based on the total appraised value of the partnership properties, the estimated
net liquidation proceeds per unit is $1,067.22, which is higher than our offer
price of $806.31.

<Table>
                                                           
Gross valuation of partnership properties...................  $ 129,000,000
Plus: Cash and cash equivalents.............................      1,080,606
Plus: Other partnership assets, net of security deposits....      1,344,494
Less: Mortgage debt, including accrued interest and
  prepayment penalty........................................    (80,105,949)
Less: Accounts payable and accrued expenses.................       (259,741)
Less: Other liabilities.....................................     (1,666,072)
                                                              -------------
Partnership valuation before taxes and certain costs........  $  49,393,338
Less: Estimated state entity taxes & state nonresident
  withholding...............................................     (1,186,328)
                                                              -------------
Estimated net valuation of your partnership.................  $  48,207,010
Percentage of estimated net valuation allocated to holders
  of units..................................................          99.00%
                                                              -------------
Estimated net valuation of units............................  $  47,724,080
  Total number of units.....................................         44,718
                                                              -------------
Estimated net liquidation proceeds per unit.................  $    1,067.22
                                                              =============
</Table>

9.  THE LAWSUIT AND THE SETTLEMENT

  BACKGROUND

     In March 1998, holders of limited partnership units in the partnerships
managed by affiliates of Insignia Financial Group (collectively, "Insignia")
commenced an action entitled Rosalie Nuanes, et al. v. Insignia Financial Group,
Inc., et al. (the "Nuanes action") in the Superior Court of the State of
California for the County of San Mateo (the "Court"). The plaintiffs named as
defendants, among others, your partnership, its general partner and several of
their affiliated partnerships and corporate entities, as well as AIMCO, who had
announced a merger with Insignia. The action originally asserted claims on
behalf of a putative class of limited partners in over 50 limited partnerships,
including your partnership (collectively, the "Partnerships") and derivatively
on behalf of those same Partnerships (which are named as nominal defendants)
challenging, among other things, the acquisition of interests in certain general
partner entities by Insignia; past tender offers by Insignia to acquire limited
partnership units; Insignia's management of the Partnerships; and the series of
transactions which closed on October 1, 1998 and February 26, 1999 whereby
Insignia and Insignia Properties Trust, respectively, were merged into AIMCO
(hereinafter, the "Insignia Merger").

  PROCEDURAL HISTORY

     On June 25, 1998, your general partner filed a motion seeking dismissal of
the action. In lieu of responding to the motion, the plaintiffs filed an amended
complaint. The general partner filed demurrers to the amended complaint which
were heard in February 1999. Pending the ruling on such demurrers, settlement
negotiations commenced. On November 2, 1999, the parties executed and filed a
Stipulation of Settlement, settling claims, subject to court approval, on behalf
of your partnership and all limited partners who owned units as of November 3,
1999. Preliminary approval of the settlement was obtained on November 3, 1999
from the Court, at which time the Court set a final approval hearing for
December 10, 1999. Prior to the December 10, 1999 hearing, the Court received
various objections to the settlement, including a challenge to the Court's
preliminary approval based upon the alleged lack of authority of prior lead
counsel to enter the settlement.

                                        39


     On December 14, 1999, the general partner and its affiliates terminated the
proposed settlement. In February 2000, counsel for some of the named plaintiffs
filed a motion to disqualify plaintiffs' lead and liaison counsel who negotiated
the proposed settlement on behalf of plaintiffs. On June 27, 2000, the Court
entered an order disqualifying them from the case. An appeal was taken from part
of the June 27, 2000 order on October 5, 2000. Subsequently, certain plaintiffs,
specifically, BEJ Equity Partners and J-B Investment Partners, withdrew as
plaintiffs.

     On December 4, 2000, the Court appointed the law firm of Lieff Cabraser
Heimann & Bernstein LLP as new lead counsel for plaintiffs and the putative
class. Plaintiffs filed a third amended complaint on January 19, 2001 and the
general partner and its affiliates filed a demurrer to the third amended
complaint. On July 10, 2001, the Court issued an order granting in part and
denying in part defendants' demurrer. Among other things, the Court sustained
defendants' demurrer without leave to amend as to those derivative claims
involving partnerships in which the named plaintiffs did not own an interest.
The Court subsequently denied plaintiffs' motion for reconsideration.

     The fourth amended complaint was filed on September 7, 2001. It was brought
by plaintiffs who owned interests in four of the Partnerships. Plaintiffs
Jeffrey Homburger, Sean O'Reilly and Norman and Doris Rosenberg formally
withdrew from the case on August 20, 2001. The general partner and affiliated
defendants filed a demurrer to the fourth amended complaint, which the Court
granted in part on January 28, 2002. The Court dismissed without leave to amend
plaintiffs' state securities fraud claim under California's Corporate Code
Section 25400(b), plaintiffs' contract claim arising out of the partnership
agreements, plaintiffs' derivative claim for statutory unfair competition as to
those partnerships in which plaintiffs lack representation, plaintiffs'
conversion claim and plaintiffs' claim under California's Corporation Code
Section 15636.

     Only some of the remaining claims in the fourth amended complaint relate to
the partnership. Plaintiffs alleged that affiliates of the general partner have
issued false and misleading tender offers beginning in 1998 and continuing
through to the present for units in the partnership. Plaintiffs allege
violations of state securities fraud statutes and common law fraud against both
AIMCO and Insignia. Specifically, plaintiffs allege that the tender offers have
been misleading because they failed to disclose:

     - that third parties would not use a property's historical income, but
       would instead use a property's projected income, in calculating a
       property's value based on the capitalization method.

     - that the property income figures used in the capitalization method were
       artificially lower because AIMCO charges management fees allegedly in
       excess of the market.

     - that AIMCO allegedly deducted all capital expenditures from property
       income despite an alleged AIMCO policy of deducting only $250 to $300 per
       apartment unit.

     - the rating for the condition of each property, any adjustment made to the
       capitalization rate as a result, the interest rate on mortgage debt for
       each property and any corresponding adjustments in the capitalization
       rates.

     - that AIMCO allegedly negotiated lower capitalization rates for valuing
       properties it owns in connection with a revolving credit facility.

     - that AIMCO failed to disclose that the valuation methods and/or policies
       it used for its own business purposes allegedly differ from those used in
       the tender offers.

     - internal valuations of the properties it used in connection with the
       Insignia merger or the capitalization rates used in connection with those
       valuations.

Plaintiffs alleged that the general partner breached its fiduciary duty by
assisting Insignia and AIMCO in making the tender offers by providing financial
information, failing to correct supposedly misleading information given to
unitholders, recommending that the prices offered were fair and preventing third
parties from making tender offers. Plaintiffs have also included a statutory
unfair competition claim against

                                        40


all the defendants, a claim for tortious interference with contract, unjust
enrichment and judicial dissolution.

  THE HELLER COMPLAINT

     During the third quarter of 2001, a complaint was filed against the same
defendants that are named in the Nuanes action, captioned Heller v. Insignia
Financial Group, Inc., et al. (the "Heller action"). The Heller complaint was
filed in order to preserve derivative claims that were dismissed without leave
to amend in the Nuanes action by the Court's July 10, 2001 order. The first
amended complaint in the Heller action was brought as a purported derivative
action, and asserted claims for, among other things, breach of fiduciary duty;
unfair competition; conversion, unjust enrichment; and judicial dissolution. On
January 28, 2002, however, the Court, on motion by the general partner and its
affiliates, struck the Heller complaint as a violation of its July 10, 2001
order in the Nuanes action. On March 27, 2002, plaintiffs in the Heller action
filed a notice of appeal of the Court's January 28, 2002 order striking the
complaint.

  THE SETTLEMENT OF THE NUANES AND HELLER COMPLAINTS

     On December 20, 2002, the parties to the above-entitled litigation executed
a Stipulation of Settlement of the two actions. That settlement was the result
of over one year of negotiations and the involvement of two separate settlement
judges. Class counsel and defendants' counsel first met with the Honorable
William J. Cahill, Retired California Superior Court Judge, on two separate
occasions. Counsel also met on four separate occasions with the Honorable
Margaret J. Kemp, California Superior Court Judge, before reaching a settlement
in principle. The parties initially met with Judge Cahill on two occasions in
the fall of 2000, but were ultimately unsuccessful in reaching a definitive
settlement agreement. At the Court's direction, they renewed formal settlement
discussions before Judge Kemp. The parties first attended a settlement
conference before Judge Kemp in September or October 2002 and then subsequently
met with her on October 28, 2002, November 26, 2002 and December 2, 2002. The
parties reached final agreement on the material terms of the settlement at the
last settlement conference with Judge Kemp on December 2, 2002 and put the terms
of that agreement on the record in open court.

     In each of the conferences described above, counsel from Lieff Cabraser
Heimann & Bernstein LLP, Farella Braun & Martel LLP & Berman Devalerio Pease &
Tobacco attended on behalf of the named plaintiffs and the putative settlement
class; counsel from Skadden Arps Slate Meagher & Flom LLP attended on behalf of
AIMCO and its affiliated entities, including your general partner, and Orrick
Herrington & Sutcliffe attended on behalf of the remaining defendants. Former
AIMCO Executive Vice President Patrick Foye also attended each of these
meetings. Mr. Vincent Gresham of the Law Offices of Vincent Gresham also
participated on behalf of plaintiffs and the putative settlement class in those
settlement discussions before the Hon. Cahill, Retired. At these meetings,
discussions included possible transactions that could provide liquidity to
investors and form the basis of a settlement, the use of a settlement fund and
the amount of such fund, the timing and distribution of any settlement fund,
selection and use of an appraiser and disclosures that would accompany any
contemplated transaction(s). The participants considered but ultimately rejected
a merger or roll-up of the various partnerships as possible alternatives to cash
tender offers. The parties ultimately concluded, however, that a merger or
roll-up could be potentially complicated and time consuming and that a cash
tender offer would be a less coercive form of providing liquidity to those
investors who desired it.

     The Settlement Agreement requires each tender offer to attach executive
summaries of partnership property appraisals commissioned specifically for the
settlement tender offers and to provide an explanation of how the appraised
values of the properties compare to the per Unit price(s) being offered. It also
requires the payment of an allocable portion of the settlement fund for each
unit tendered pursuant to the settlement fund, details the scope of the release
and covenants not to sue which will bind class members, requires that tender
offers be made no more than one year after final approval of the settlement and
imposes certain restrictions on the length of time in which the tender offers
can remain open, as well as with regard to other disclosures made therein. On
April 4, 2003, the Court preliminarily approved the

                                        41


settlement and, on June 13, 2003, entered an order finally approving the
settlement and dismissing both the Heller and Nuanes litigation with prejudice.

     On August 12, 2003, an objector filed an appeal of the court's order
approving the settlement and is seeking to reverse or vacate the Court's order
and the judgment entered thereto. That appeal has been fully briefed and the
parties are awaiting a date for oral argument. Although we reserve our right to
terminate or amend our offer if final court approval of the settlement is
reversed or vacated, we have nevertheless elected to proceed with this offer
under the terms of the settlement. On November 24, 2003, the objector appealing
the settlement and judgment entered thereto also filed an application requesting
the Court order AIMCO to withdraw the settlement tender offers, refrain from
making further offers pending the appeal and auction any units tendered to third
parties. The objector contended that our prior offer did not conform with the
terms of the Settlement. Alternatively, counsel for the objector requested the
Court on behalf of a settlement class member to order AIMCO to pay all
non-tendering settlement class members their pro rata share of the Settlement
Fund whether or not the settlement and judgment entered thereto is vacated on
appeal and to notify settlement class members that the releases and covenant not
to sue are not binding unless the settlement and judgment entered thereto is
affirmed on appeal. On December 18, 2003, the Court heard oral argument on the
applications brought on behalf of the objector and denied them in their
entirety. On February 23, 2004, an appeal was also taken from certain portions
of the Court's December 2003 orders denying injunctive relief in connection with
the settlement offers and assessing fees against objector's counsel for the
Court's use of a referee. Both appeals have been fully briefed and argued, and
the parties are waiting for a decision from the Court of Appeals.

     Under the terms of the settlement, we made cash tender offers for all
outstanding limited partnership interests in your partnership and 40 other
partnerships (the "Tender Offer Partnerships") and accompanied each of those
offers with executive summaries of appraisals of partnership properties prepared
by an independent appraiser appointed by the Court. Our affiliate paid 50% of
the costs of the appraisals, with the other 50% paid from the settlement fund.
The appraiser was paid $619,100 for the appraisals. Under the settlement, we
have the option of making a second round of tender offers (in our sole and
absolute discretion) to purchase all remaining outstanding limited partnership
interests, at the same price, or at a higher or lower price, within 18 months of
the order finally approving the settlement. This offer constitutes one of the
second round of tender offers.

     In addition, as part of the settlement, we agreed to create a settlement
fund for the benefit of settlement class members in the principal amount of $9.9
million. The settlement class members consists of all limited partners in the
Tender Offer Partnerships, including your partnership, who owned units as of
December 20, 2002, and who did not validly request exclusion from the
settlement. After deducting attorneys' fees and other settlement costs,
including a portion of the costs of appraisal and certain costs of
administration of the settlement fund, we allocated the remaining amount in the
settlement fund among the Tender Offer Partnerships, pursuant to the terms of
the settlement offer, pro rata based on partnership revenue for the year ended
December 31, 2002 allocable to units held by members of the settlement class, as
set forth below:

<Table>
<Caption>
                                                               (C)
                                                            OWNERSHIP                      ALLOCATED
                                                           PERCENTAGE          (D)        PORTION OF
(A)                                            (B)        OF SETTLEMENT     ADJUSTED      SETTLEMENT
PARTNERSHIP                                 REVENUE(1)      CLASS(2)       REVENUE(3)       FUND(4)
- -----------                                ------------   -------------   -------------   -----------
                                                                              
Angeles Income Properties, Ltd. II.......  $  6,721,398       38.11%      $2,561,680.99       2.12%
Angeles Income Properties, Ltd. III......       757,234       47.99%         363,400.46       0.30%
Angeles Income Properties, Ltd. 6........     3,314,969       57.18%       1,895,539.00       1.57%
Angeles Opportunity Properties, Ltd......     2,487,492       50.42%       1,254,256.40       1.04%
Angeles Partners VII.....................     1,382,326       32.28%         446,158.51       0.37%
Angeles Partners IX......................     3,053,411       32.79%       1,001,090.64       0.83%
Angeles Partners X.......................     2,363,419       40.94%         967,701.17       0.80%
Angeles Partners XI......................     8,102,088       37.05%       3,002,068.40       2.49%
</Table>

                                        42


<Table>
<Caption>
                                                               (C)
                                                            OWNERSHIP                      ALLOCATED
                                                           PERCENTAGE          (D)        PORTION OF
(A)                                            (B)        OF SETTLEMENT     ADJUSTED      SETTLEMENT
PARTNERSHIP                                 REVENUE(1)      CLASS(2)       REVENUE(3)       FUND(4)
- -----------                                ------------   -------------   -------------   -----------
                                                                              
Angeles Partners XII.....................    17,579,608       30.85%       5,423,897.42       4.50%
Century Properties Fund XIV..............     5,754,231       33.27%       1,914,451.55       1.59%
Century Properties Fund XV...............     7,891,876       35.11%       2,770,502.79       2.30%
Century Properties Fund XVI..............     3,129,310       38.59%       1,207,704.29       1.00%
Century Properties Fund XVII.............    13,989,178       39.81%       5,568,998.68       4.62%
Century Properties Fund XVIII............     4,652,589       44.57%       2,073,721.09       1.72%
Century Properties Fund XIX..............    15,838,890       41.77%       6,615,207.49       5.48%
Century Properties Growth Fund XXII......    18,750,167       44.10%       8,268,717.87       6.86%
Consolidated Capital Growth Fund.........    11,095,122       35.45%       3,933,281.02       3.26%
Consolidated Capital Institutional
  Properties.............................    17,492,318       34.85%       6,095,971.72       5.05%
Consolidated Capital Institutional
  Properties/2...........................     4,531,076       50.40%       2,283,507.96       1.89%
Consolidated Capital Institutional
  Properties/3...........................    11,898,507       46.92%       5,583,341.99       4.63%
Consolidated Capital Properties III......     3,319,845       48.56%       1,612,222.94       1.34%
Consolidated Capital Properties IV.......    26,375,116       43.55%      11,486,890.81       9.52%
Consolidated Capital Properties VI.......     1,790,898       49.39%         884,610.64       0.73%
Davidson Diversified Real Estate I,
  L.P....................................       926,289       57.35%         531,230.56       0.44%
Davidson Diversified Real Estate II,
  L.P....................................     6,679,248       50.21%       3,353,945.59       2.78%
Davidson Diversified Real Estate III,
  L.P....................................     4,914,862       59.79%       2,938,470.22       2.44%
Davidson Growth Plus, L.P................     5,497,496       42.55%       2,339,052.86       1.94%
Davidson Income Real Estate, L.P.........     4,824,647       55.50%       2,677,466.62       2.22%
Fox Strategic Housing Income Partners....     2,905,478       59.32%       1,723,635.91       1.43%
Johnstown/Consolidated Income Partners...     1,109,711       45.50%         504,939.49       0.42%
Multi-Benefit Realty Fund 87-1...........     3,584,756
  Class A Investors......................     1,993,125       35.01%         697,750.93       0.58%
  Class B Investors......................     1,591,632       47.59%         757,524.59       0.63%
National Property Investors III..........     8,886,583       25.79%       2,291,879.79       1.90%
National Property Investors 4............     7,248,900       24.52%       1,777,282.20       1.47%
National Property Investors 5............     4,610,576       36.17%       1,667,480.41       1.38%
National Property Investors 6............    10,168,298       34.73%       3,531,813.61       2.93%
National Property Investors 7............     7,235,037       31.17%       2,255,187.60       1.87%
National Property Investors 8............     4,334,235       38.98%       1,689,580.96       1.40%
Shelter Properties I Limited
  Partnership............................     4,908,445       20.51%       1,006,722.11       0.83%
Shelter Properties II Limited
  Partnership............................     5,148,389       29.25%       1,505,669.73       1.25%
Shelter Properties III Limited
  Partnership............................     5,155,756       35.20%       1,814,826.22       1.50%
Shelter Properties IV Limited
  Partnership............................     9,682,744       31.49%       3,048,820.05       2.53%
Shelter Properties V Limited
  Partnership............................    13,237,273       28.68%       3,796,475.63       3.15%
Shelter Properties VI Limited
  Partnership............................     8,475,852       34.45%       2,920,007.57       2.42%
Shelter Properties VII Limited
  Partnership............................     1,497,429       37.87%         567,007.84       0.47%
                                           ------------                   -------------     ------
  Total..................................  $313,303,073                   $ 120,611,694     100.00%
                                           ============                   =============     ======
</Table>

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

(1) For the year ended December 31, 2002.

(2) Excludes units owned by AIMCO and its affiliates and other limited partners
    who have requested exclusion from the settlement class.

(3) Determined, for each partnership, by multiplying the amount of revenue
    (column (B)) by the percentage of outstanding units held by members of the
    settlement class (column (C)).

                                        43


(4) Determined, for each partnership, by dividing the amount of adjusted revenue
    (column (D)) by the total amount of adjusted revenue for all partnerships.

     The amount allocated to a Tender Offer Partnership is then divided by the
total number of outstanding units owned by settlement class members in such
Tender Offer Partnership (excluding units held by us and our affiliates), and
the resulting amount is included in the offer price for units in that Tender
Offer Partnership. For each unit validly tendered in the offers and accepted by
us, an amount equal to the portion of the settlement fund included in the per
unit offer price will be deducted from the settlement fund and paid to us (other
than units tendered by limited partners who have requested exclusion from the
settlement class). All limited partners who tender their units in response to
the offers will receive the same price per unit, including those persons who may
have requested exclusion from the settlement class.

     Any balance remaining after completion of the second round of litigation
settlement offers will be paid to settlement class members who have retained any
units based on the allocation method used in the litigation settlement offers no
later than June 2005 provided that the Court's order approving the settlement
and entering judgment thereto is affirmed on appeal and is final. If the Court's
order is reversed or vacated by virtue of the appeal, however, you will not be
entitled to receive a pro rata share of the settlement fund unless you tender
your units in this offer.

     The general partners of the Tender Offer Partnerships have also agreed, as
part of the settlement, to waive our right to seek reimbursement and/or
indemnification for the full amount of fees and costs incurred in the defense of
the class and derivative litigation; provided, however, that they may charge
fees and costs to your partnership and the other partnerships involved in the
litigation in an amount not to exceed $1,500,000 (which is approximately 50% of
the outstanding fees and costs).

     In consideration for the terms described above, plaintiffs and settlement
class members agreed, among other things, to dismiss the Nuanes action and the
Heller action with prejudice, release the defendants from all liability with
respect to all claims and causes of action, whether brought individually, on
behalf of a class, or derivatively, whether known or unknown, that have been
asserted or that could have been asserted that arise out of or relate to (i)
those matters and claims set forth in the complaints in the Heller and Nuanes
actions, (ii) ownership of one or more units in any of the Tender Offer
Partnerships, (iii) the purchase, acquisition, holding, sale, tender or voting
of one or more units in any of the Tender Offer Partnerships, and (iv) any of
the facts, circumstances, allegations, claims, causes of action,
representations, statements, reports, disclosures, transactions, events,
occurrences, acts, omissions or failures to act, of whatever kind or character
whatsoever, irrespective of the state of mind of the actor performing or
omitting to perform the same, that have been or could have been alleged in any
pleadings, amended pleading, argument, complaint, amended complaint, brief,
motion, report or filing in either the Nuanes action or the Heller action,
provided, however, that the released claims are not intended to include any
unrelated claims that are unique to a particular settlement class member (e.g.,
a settlement class member slips and falls on property owned by one of our
affiliates, loses or did not receive a distribution check distributed to other
limited partners in your partnership, or is an employee and has an employee
related claim). Settlement class members also covenanted and agreed not to bring
any action, claim, suit, or proceeding against any of the defendants in the
class and derivative litigation that concerns any of the matters which are the
subject of the settlement and that the stipulation of settlement will act as a
bar to any such claim, action, suit or proceeding. The plaintiffs and settlement
class members also agreed that they would not oppose a request that the Court
withdraw the finding regarding Robert A. Stanger & Co. made in the June 27, 2000
order disqualifying lead and liaison counsel.

     Under the terms of the settlement, neither we nor our affiliates admit to
any wrongdoing, and we deny liability under all claims brought in the
litigation. The final settlement of the lawsuit is the product of good faith,
arm's length negotiations between settlement class counsel and counsel for the
defendants. These negotiations resulted in the settlement set forth in the
Stipulation.

                                        44


10.  INFORMATION CONCERNING US AND CERTAIN OF OUR AFFILIATES

     General.  We are AIMCO Properties, L.P., a Delaware limited partnership.
Together with our subsidiaries, we conduct substantially all of the operations
of Apartment Investment and Management Company, a Maryland corporation
("AIMCO"). AIMCO is a real estate investment trust that owns and manages
multifamily apartment properties throughout the United States. AIMCO's Class A
Common Stock is listed and traded on the New York Stock Exchange under the
symbol "AIV." As of June 30, 2004, we owned or managed 278,011 apartment units
in 1,578 properties located in 47 states, the District of Columbia and Puerto
Rico. Based on apartment unit data compiled by the National Multi Housing
Council, we believe that we are one of the largest owners and managers of
multi-family apartment properties in the United States. As of June 30, 2004, we:

     - owned or controlled (consolidated) 174,760 units in 698 apartment
       properties;

     - held an equity interest in (unconsolidated) 54,245 units in 382 apartment
       properties; and

     - provided services or managed, for third party owner, 49,006 units in 498
       apartment properties, primarily pursuant to long term, non-cancelable
       agreements (including 39,472 units in 416 properties that are asset
       managed only, and not property managed).

     Our general partner is AIMCO-GP, Inc., a Delaware corporation, which is a
wholly owned subsidiary of AIMCO. Our principal executive offices is located at
4582 South Ulster Street Parkway, Suite 1100, Denver, Colorado 80237, and our
telephone number is (303) 757-8101.

     The names, positions and business addresses of the directors and executive
officers of AIMCO and your general partner (which is our affiliate), as well as
a biographical summary of the experience of such persons for the past five years
or more, are set forth on Annex I attached hereto and are incorporated herein by
reference.

     We and AIMCO are both subject to the information and reporting requirements
of the Exchange Act and, in accordance therewith, file reports and other
information with the Securities and Exchange Commission relating to our
business, financial condition and other matters, including the complete
financial statements summarized below. Such reports and other information may be
inspected at the public reference facilities maintained by the SEC at Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of such material
can also be obtained from the Public Reference Room of the SEC in Washington,
D.C. at prescribed rates. The SEC also maintains a site on the World Wide Web at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the SEC.
In addition, information filed by AIMCO with the New York Stock Exchange may be
inspected at the offices of the New York Stock Exchange at 20 Broad Street, New
York, New York 10005.

     For more information regarding AIMCO and AIMCO Properties, L.P., please
refer to our respective Annual Reports on Form 10-K for the year ended December
31, 2003 and our respective Quarterly Reports on Form 10-Q for the quarterly
periods ended March 31, 2004 and June 30, 2004 (particularly the management's
discussion and analysis of financial condition and results of operations) and
other reports and documents we have filed with the SEC.

     Except as described in "The Litigation Settlement Offer -- Section 11.
Background and Reasons for the Offer", "-- Section 13. Conflicts of Interest and
Transactions with Affiliates" and "-- Section 15. Certain Information Concerning
Your Partnership -- Ownership and Voting," neither we nor, to the best of our
knowledge, any of the persons listed on Annex I attached hereto, (i)
beneficially own or have a right to acquire any units, (ii) has effected any
transaction in the units in the past 60 days, or (iii) have any contract,
arrangement, understanding or relationship with any other person with respect to
any securities of your partnership, including, but not limited to, contracts,
arrangements, understandings or relationships concerning transfer or voting
thereof, joint ventures, loan or option arrangements, puts or calls, guarantees
of loans, guarantees against loss or the giving or withholding of proxies.
Neither we nor our affiliates intend to tender any units beneficially owned in
this offer.

                                        45


     Summary Selected Financial Information for AIMCO Properties, L.P.  The
historical financial data set forth below for AIMCO Properties, L.P. for the six
months ended June 30, 2004 and 2003 is based on unaudited financial statements.
The historical financial data set forth below for AIMCO Properties, L.P. for the
years ended December 31, 2003, 2002 and 2001 is based on audited financial
statements. This information should be read in conjunction with such financial
statements, including the notes thereto, and "Management's Discussion and
Analysis of Financial Condition and Results of Operations of the AIMCO Operating
Partnership" included in AIMCO Properties, L.P.'s Annual Report on Form 10-K for
the year ended December 31, 2003 and its Quarterly Report on Form 10-Q for the
quarter ended June 30, 2004.

<Table>
<Caption>
                                           FOR THE SIX MONTHS ENDED              FOR THE YEAR ENDED
                                                   JUNE 30,                         DECEMBER 31,
                                           -------------------------   --------------------------------------
                                              2004         2003(1)       2003(2)       2002(3)      2001(3)
                                           -----------   -----------   -----------   -----------   ----------
                                                      (DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
                                                  (UNAUDITED)
                                                                                    
OPERATING DATA:
Total revenues...........................  $   750,781   $   727,386   $ 1,516,283   $ 1,387,831   $1,273,037
Total expenses...........................      560,195       489,946     1,059,350       889,372      878,734
Income before minority interest,
  discontinued operations and cumulative
  effect of change in accounting
  principle..............................        6,441        56,979        80,551       201,479      143,953
Income from continuing operations........       11,102        54,307        78,490       186,924      107,117
Income from discontinued operations......       23,724        37,559        99,378        19,278       13,947
Cumulative effect of change in accounting
  principle..............................       (3,957)           --            --            --           --
Net income...............................       30,869        91,866       177,868       206,202      121,064
PER SHARE DATA:
Earnings (loss) per common unit -- basic:
  (Loss) income from continuing
    operations (net of preferred
    distributions:)......................  $     (0.33)  $      0.01   $     (0.24)  $      0.81   $     0.08
  Net (loss) income attributable to
    common unitholders...................        (0.14)         0.37          0.71          1.00         0.25
(Loss) earnings per common
  unit -- diluted:
  (Loss) income from continuing
    operations (net of preferred
    distributions:)......................        (0.33)         0.01         (0.24)         0.80         0.08
  Net (loss) income attributable to
    common unitholders...................        (0.14)         0.37          0.71          0.99         0.25
Dividends declared per common unit.......         1.20          1.64          2.84          3.28         3.16
BALANCE SHEET INFORMATION:
Real estate, net of accumulated
  depreciation...........................    8,948,049     8,841,155     8,606,281     8,615,287    6,330,521
Total assets.............................   10,370,760    10,245,724    10,124,617    10,355,329    8,200,526
Total indebtedness.......................    6,414,088     6,070,104     6,079,470     6,021,990    4,420,399
Partners' capital........................    3,123,070     3,359,381     3,174,815     3,576,083    3,080,071
CASH FLOW DATA:
Cash provided by operating activities....      165,984       287,915       430,258       496,670      491,846
Cash (used in) provided by investing
  activities.............................     (107,855)      113,948       313,164      (873,832)    (140,638)
Cash (used in) provided by financing
  activities.............................      (79,108)     (395,501)     (728,543)      398,637     (430,245)
OTHER DATA:
Funds from operations available to common
  unitholders -- diluted(4)..............      137,458       186,978       349,108       498,589      528,655
Weighted average number of common units,
  common units equivalents and dilutive
  preferred securities outstanding.......      106,065       109,467       108,151       109,538      102,147
</Table>

                                        46


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

(1) Beginning with the first quarter of 2004, AIMCO Properties modified the
    presentation of its consolidated statements of income. The presentation of
    the income statements for the six months ended June 30, 2003 has also been
    modified to conform with this new format. These presentation changes do not
    affect the accounting treatment of amounts reported, only their
    classification within the income statement.

(2) Certain reclassifications have been made to real estate, net of accumulated
    depreciation and total indebtedness in the 2003 balance sheet to conform to
    presentation changes made in our Form 10-Q for the quarter ended June 30,
    2004. These reclassifications primarily represent presentation changes
    related to certain intercompany eliminations and the treatment of
    discontinued operations.

(3) Certain reclassifications have been made to the 2002 and 2001 amounts to
    conform to the 2003 presentation. These reclassifications primarily
    represent presentation changes related to discontinued operations resulting
    from the 2002 adoption of Statement of Financial Accounting Standard No.
    144.

(4) Funds From Operations, or FFO, is a financial measure not calculated in
    accordance with generally accepted accounting principles, or GAAP, that we
    believe, when considered with the financial data 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 and losses
    from extraordinary items, cumulative effect of change in accounting
    principle, gains on dispositions of depreciable real estate related to
    unconsolidated entities and other, gains on dispositions of real estate from
    discontinued operations, net of related income taxes, plus real estate
    related depreciation and amortization (excluding amortization of financing
    costs), including depreciation for unconsolidated real estate partnerships,
    joint ventures and discontinued operations. We calculate FFO based on the
    NAREIT definition, as further adjusted for amortization of management
    contracts and deficit distributions to minority partners. We calculate FFO
    (diluted) by subtracting redemption related preferred OP Unit issuance costs
    and distributions on preferred OP Units, adding back distributions on
    dilutive preferred securities and adding back the 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 calculated 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.

                                        47


     The following is a reconciliation of net income to Funds From Operations:

<Table>
<Caption>
                                            FOR THE SIX MONTHS
                                              ENDED JUNE 30,         FOR THE YEAR ENDED DECEMBER 31,
                                            -------------------   -------------------------------------
                                              2004       2003       2003          2002          2001
                                            --------   --------   ---------     ---------     ---------
                                                              (AMOUNTS IN THOUSANDS)
                                                (UNAUDITED)
                                                                               
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON
  UNITHOLDERS(A)..........................  $(14,971)  $ 38,790   $  74,242     $  98,556     $  20,930
Adjustments:
  Depreciation and amortization (net of
     minority partners' interest for years
     ended December 31, 2003, 2002 and
     2001)................................   182,900    171,878     304,957       245,351       313,842
  Depreciation and amortization related to
     non-real estate assets...............    (9,207)   (10,757)         (D)           (D)           (D)
  Depreciation of rental property related
     to minority partners' interest(B)....   (22,963)   (15,243)         (D)           (D)           (D)
  Depreciation of rental property related
     to unconsolidated properties.........    11,644     13,042      25,817        33,549        57,506
  (Gain) Loss on dispositions of real
     estate related to unconsolidated
     entities and land....................    (1,205)      (756)     (3,178)       22,362       (15,005)
  Deficit distributions to minority
     partners.............................     7,088      9,101      22,672        26,979        46,359
  Income tax arising from disposals.......        --         --          --            --         3,202
  Cumulative effect of change in
     accounting principle.................     3,957         --          --            --            --
  Discontinued operations:
     Depreciation of rental property, net
       of minority partners'
       interest(B)........................     2,380     14,506      14,906        29,192        34,522
     Gain on dispositions of real estate,
       net of minority partners'
       interest(B)........................   (21,585)   (44,542)   (101,849)       (4,374)           --
     Recovery of deficit distributions to
       minority partners..................    (3,318)      (500)    (10,718)        1,401         1,342
     Income tax arising from disposals....       789      4,306      12,134         2,507            --
  Preferred OP Unit distributions.........    45,752     50,921      95,981       107,646       100,134
  Redemption related preferred OP Unit
     issuance costs.......................        88      2,155       7,645            --            --
                                            --------   --------   ---------     ---------     ---------
FUNDS FROM OPERATIONS.....................  $181,349   $232,901   $ 442,609     $ 563,169     $ 562,832
Preferred OP Unit distributions...........   (45,752)   (50,921)    (95,981)     (107,646)     (100,134)
Redemption related preferred OP Unit
  issuance costs..........................       (88)    (2,155)     (7,645)           --            --
Distributions on dilutive preferred
  securities..............................     1,949      6,659       9,138        41,905        64,389
Interest expense on mandatorily redeemable
  convertible preferred securities........        --        494         987         1,161         1,568
                                            --------   --------   ---------     ---------     ---------
Funds from Operations attributable to
  common unitholders -- diluted...........  $137,458   $186,978   $ 349,108     $ 498,589     $ 528,655
                                            ========   ========   =========     =========     =========
WEIGHTED AVERAGE NUMBER OF COMMON UNITS,
  COMMON UNIT EQUIVALENTS AND DILUTIVE
  PREFERRED SECURITIES OUTSTANDING:
  Common unit and equivalents(C)..........   104,281    104,819     104,861        99,168        84,960
  Dilutive preferred securities...........     1,784      4,648       3,290        10,370        17,187
                                            --------   --------   ---------     ---------     ---------
     Total................................   106,065    109,467     108,151       109,538       102,147
                                            ========   ========   =========     =========     =========
</Table>

                                        48


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

(A)  Represents our numerator for earnings per common share calculated in
     accordance with GAAP.

(B)  "Minority partners' interest," as referenced in this line item and others
     in this presentation means minority interest in AIMCO's consolidated real
     estate partnerships.

(C)  Represents our denominator for earnings per common unit -- diluted,
     calculated in accordance with GAAP.

(D)  Not shown as separate amounts in presentation included in the December 31,
     2003 Form 10-K.

11.  BACKGROUND AND REASONS FOR THE OFFER

     Settlement of Class Action.  We are making this offer pursuant to the terms
of the settlement agreement described in "The Litigation Settlement
Offer -- Section 9. The Lawsuit and the Settlement." Our offer provides us with
an opportunity to increase our ownership interest in your partnership's property
while providing you and other investors with an opportunity to liquidate your
current investment. The settlement agreement also provides for the creation of a
$9.9 million fund for members of the settlement class, a portion of which will
be paid to those who accept this offer and which is included in our offer price.
If you requested exclusion from the settlement, you may tender any units in this
offer and you will be entitled to receive the same price per unit as those
unitholders who have not opted out of the settlement class. However, no portion
of the price paid to you will come from the settlement fund. If you did not
request exclusion from the settlement and do not tender any units in this offer,
you will be entitled to receive your pro rata share of the settlement fund
(subject to adjustment) no later than June 2005 provided that the Court's order
approving the settlement and entering judgment thereto is affirmed on appeal and
is final. If the Court's order is reversed or vacated by virtue of the appeal,
however, you will not be entitled to receive a pro rata share of the settlement
fund unless you tender your units in this offer.

     Neither the Court nor counsel for the parties in the class and derivative
litigation make any recommendation regarding whether you should accept our
offer. You are encouraged to carefully review this Litigation Settlement Offer,
the executive summary of the independent appraiser's report (attached as Annex
II) and any other information available to you and to seek advice from your
independent lawyer, tax advisor with respect to your particular circumstances
and/or financial advisor before deciding whether or not to accept our offer.

     Alternatives Considered by Your General Partner.  From time to time in the
past, we have made offers to acquire units of limited partnership interest in
your partnership. Before making this offer and the previous offers, your general
partner (which is our affiliate) considered a number of alternative
transactions. The following is a brief discussion of the advantages and
disadvantages of the alternatives considered by your general partner.

  LIQUIDATION

     One alternative would be for the partnership to sell its assets, distribute
the net liquidation proceeds to its partners in accordance with the agreement of
limited partnership, and thereafter dissolve. Partners would be at liberty to
use the net liquidation proceeds after taxes for investment, business, personal
or other purposes, at their option. If your partnership were to sell its assets
and liquidate, you would not need to rely upon capitalization of income or other
valuation methods to estimate the fair market value of partnership assets.
Instead, such assets would be valued through negotiations with prospective
purchasers (in many cases unrelated third parties).

     If your partnership was liquidated, and the properties sold at prices equal
to the values determined by the independent appraiser (see Annex II), we
estimate that your net liquidation proceeds would be $1,067.22 per unit. See
"The Litigation Settlement Offer -- Section 8. Valuation of Units." However, a
liquidating sale of all of your partnership's properties would be a taxable
event for all partners, including your general partner. Furthermore, all
partners, including those who wish to retain their units, and your general
partner would be forced to participate in the liquidation. Lastly, although the
future operating results of your partnership and future sales prices of the
properties owned by your partnership are

                                        49


uncertain, the operating performance of your partnership's properties may
improve in the future, which, in turn, may result in higher property values,
making a sale of your partnership's properties a more attractive option in the
future. Such values are also a function of capitalization rates in the market
and the interest rate environment at the time. However, because your general
partner and property manager (which are our affiliates) receive fees for
managing your partnership and its property, a conflict of interest exists
between continuing the partnership and receiving such fees, on the one hand, and
the liquidation of the partnership and the termination of such fees, on the
other. See "The Litigation Settlement Offer -- Section 15. Certain Information
Concerning Your Partnership -- Investment Objectives and Policies; Sale or
Financing of Investments" and "-- Section 13. Conflicts of Interest and
Transactions with Affiliates." The term of the partnership will continue until
December 31, 2035, unless the partnership is terminated sooner under the
provisions of the partnership agreement.

  CONTINUATION OF THE PARTNERSHIP WITHOUT THE OFFER

     A second alternative would be for your partnership to continue as a
separate legal entity with its own assets and liabilities and continue to be
governed by its existing agreement of limited partnership, without our offer. A
number of advantages could result from the continued operation of your
partnership. Given improving rental market conditions or improved operating
performance, the level of distributions might increase over time. It is possible
that the private resale market for properties could improve over time, making a
sale of the partnership's properties at some point in the future a more
attractive option than it is currently. The continuation of your partnership
will allow you to continue to participate in the net income and any increases in
revenue of your partnership and any net proceeds from the sale of the properties
owned by your partnership. However, no assurance can be given as to future
operating results or as to the results of any future attempts to sell the
properties owned by your partnership.

     The primary disadvantage of continuing the operations of your partnership
without our offer is that you would be limited in your ability to sell your
units. Although you could sell your units to a third party, any such sale might
be at a price less than our offer price.

     Alternative Transactions Considered by Us.  At the present time, we have
decided to proceed with this offer pursuant to the court approved settlement.
From time to time in the past, we have considered proposing a number of
alternative transactions, including the purchase of your partnership's
properties or a merger of your partnership in which you would receive cash in
exchange for your units. We decided not to pursue these alternative transactions
because, in each case, we determined that a tender offer would be a less
expensive means of acquiring additional interests in your partnership, and would
not require the consent or approval of any limited partners (other than those
who elect to tender their units). In the future, however, we may consider
purchasing your partnership's properties or effecting such a merger. See "The
Litigation Settlement Offer -- Section 14. Future Plans of the Purchaser." We
also considered an offer to exchange units in your partnership for limited
partnership interests in AIMCO Properties, L.P. However, because of the expense
and delay associated with making such an exchange offer, we decided to make an
offer for cash only. In addition, our historical experience has been that when
we have offered limited partners an opportunity to receive cash or limited
partnership interests in AIMCO Properties, L.P., the limited partners who tender
usually prefer the cash option.

12.  POSITION OF THE GENERAL PARTNER OF YOUR PARTNERSHIP WITH RESPECT TO THE
     OFFER

     The partnership and the general partner of your partnership (which is our
affiliate) have provided the following information for inclusion in this
Litigation Settlement Offer:

     Factors in Favor of Fairness Determination.  The general partner of your
partnership believes the offer price and the structure of the transaction are
fair to the unaffiliated limited partners, whether or not they tender units in
the offer. In support of such determination, the general partner considered the
factors

                                        50


and information set forth below, but did not quantify or otherwise attach
particular weight to any such factors or information:

     The general partner considered the following factors in support of the
fairness of the offer to unaffiliated limited partners who do not tender units
in the offer:

     - the Court's approval of the settlement pursuant to which the offer is
       being made;

     - the fact that the interests of the unaffiliated limited partners were
       represented by counsel in the negotiation of the settlement agreement;

     - the fact that the offer does not require the approval of a majority of
       unaffiliated limited partners and, as a result, each limited partner has
       an opportunity to make an individual decision on whether to tender his or
       her units (and how many to tender) or to continue to hold them; and

     - the fact that no unaffiliated limited partners would be able to
       participate in the future performance of the partnership or its
       properties following an alternative transaction such as a property sale
       or a liquidation of the partnership.

     The general partner considered the following factors in support of the
fairness of the offer to unaffiliated limited partners who tender units in the
offer:

     - the Court's approval of the settlement pursuant to which the offer is
       being made;

     - the fact that the interests of the unaffiliated limited partners were
       represented by counsel in the negotiation of the settlement agreement;

     - the fact that the offer does not require the approval of a majority of
       unaffiliated limited partners and, as a result, each limited partner has
       an opportunity to make an individual decision on whether to tender his or
       her units (and how many to tender) or to continue to hold them;

     - there is no established trading market for the limited partnership units,
       and the offer would provide immediate liquidity for tendering limited
       partners;

     - the uncertainty of the resulting proceeds from the possible alternative
       transactions, particularly a property sale or a liquidation of the
       partnership;

     - the offer price exceeds the book value per unit of $(944.27) at June 30,
       2004;

     - the fact that our offer price does not reflect any discount for minority
       interests; and

     - the absence of any other firm offers by third parties for all or
       substantially all of the partnership's assets, a merger or other
       extraordinary transaction during the past two years with which to compare
       the Litigation Settlement Offer.

     Factors Not in Favor of Fairness Determination.  In addition to the
foregoing factors, the general partner considered the following countervailing
factors:

     - we determined our offer price by estimating a net equity value for your
       partnership units based on an aggregate gross property value equal to
       89.9% of the 2003 aggregate value determined by American Appraisal
       Associates, Inc., an independent appraiser appointed by the Court, then
       reduced by any prepayment penalties. As a result, our offer price is less
       than our estimate of the liquidation proceeds that would be payable to
       you if your partnership's properties were sold at prices equal to their
       2003 appraised values, which we estimate to be $1,067.22 per unit;

     - our offer price does not take into account any increase in value since
       the 2003 appraisal was completed, and does not take into account any
       increases in property income that may result in the near future;

     - the fact that an unaffiliated representative was not retained to act
       solely on behalf of unaffiliated limited partners for purposes of
       negotiating the terms of the offer;

                                        51


     - the fact that the general partner's board of directors is comprised
       solely of an employee of AIMCO Properties, L.P., and, as a result, the
       terms of the offer were not approved by a majority of independent
       directors;

     - the fact that offer prices in our prior tender offers were higher than
       our current offer price; and

     - prices at which the units have recently sold were higher than our current
       offer price.

     The general partner does not believe that going concern value of your
partnership is relevant to the fairness of the offer because the partnership is
not an operating business in the typical sense. Its only assets are its
properties; the partnership has no other operations. Going concern value
typically reflects independent value for the goodwill of a business as a going
concern, over and above its asset value, however, those facts are not present
here. Accordingly, the general partner did not consider a separate going concern
value of the partnership in determining the fairness of the offer. In this case,
the liquidation value was determined based on appraised values of the
partnership's properties. These appraised values reflect the value of the
properties as a going concern.

     The general partner believes that consideration of the offer was
procedurally fair because, among other things, (1) the Court approved the
settlement agreement pursuant to which the offer is being made, (2) each limited
partner has an opportunity to make an individual decision on whether to tender
his or her units (and how many to tender) or to continue to hold them, (3) the
unaffiliated limited partners were represented by counsel in the negotiation of
the settlement agreement, and (4) limited partners can evaluate our offer price
by comparing it to the net liquidation proceeds per unit derived from the
independent appraiser's property valuation. In making this determination, the
general partner took into account the absence of the following procedural
safeguards: (1) the requirement of approval of the offer by a majority of the
unaffiliated limited partners, (2) an unaffiliated representative to act solely
on behalf of unaffiliated limited partners for purposes of negotiating the terms
of the offer, and (3) the approval of the offer by a majority of non-employee
directors of your general partner's board of directors.

     The sale of your units pursuant to this offer will not be a taxable
transaction for the general partner of your partnership or its affiliates.
Consequently, the general partner of your partnership and its affiliates will
not recognize gain or loss in connection with this offer. We intend to treat the
entire offer price as consideration paid to you for your units, regardless of
whether you requested exclusion from the settlement. The general partner makes
no recommendation as to whether or not you should tender or refrain from
tendering your units in this offer. While the general partner believes that the
terms of our offer are fair, the general partner also believes that you must
make your own decision whether or not to participate in any offer. The general
partner is unable to make a recommendation because each limited partner's
circumstances may differ from those of other limited partners. These
circumstances, which would impact the desirability of tendering units in the
offer, include a limited partner's financial position, his need or desire for
liquidity, other financial opportunities available to him, and his tax position
and the tax consequences to him of selling his units. YOU ARE ENCOURAGED TO
CAREFULLY REVIEW THIS LITIGATION SETTLEMENT OFFER, THE EXECUTIVE SUMMARY OF THE
INDEPENDENT APPRAISER'S REPORT (ATTACHED AS ANNEX II) AND ANY OTHER INFORMATION
AVAILABLE TO YOU AND TO SEEK ADVICE FROM YOUR INDEPENDENT LAWYER, TAX ADVISOR
AND/OR FINANCIAL ADVISOR WITH RESPECT TO YOUR PARTICULAR CIRCUMSTANCES BEFORE
DECIDING WHETHER OR NOT TO ACCEPT THIS LITIGATION SETTLEMENT OFFER.

     Neither the general partner of your partnership or its affiliates have any
plans or arrangements to tender any units. Except as otherwise provided in "The
Litigation Settlement Offer -- Section 14. Future Plans of the Purchaser," the
general partner does not have any present plans or proposals which relate to or
would result in an extraordinary transaction, such as a merger, reorganization
or liquidation, involving your partnership; a purchase or sale or transfer of a
material amount of your partnership's assets; or any changes in your
partnership's present capitalization, indebtedness or distribution policies. For
information relating to certain relationships between your partnership and its
general partner, on one hand, and AIMCO and its affiliates, on the other, and
conflicts of interests with respect to the tender offer, see "The Litigation
Settlement Offer -- Section 11. Background and Reasons for the Offer" and
"-- Section 13. Conflicts of Interest and Transactions with Affiliates." See
also "The Litigation Settlement Offer --

                                        52


Section 8. Valuation of Units -- Comparison to Alternative Consideration" for
certain information regarding transactions with respect to units of your
partnership.

     Your partnership did not receive any report, opinion or appraisal with
respect to the fairness of this Litigation Settlement Offer or the offer price
being offered to limited partners. However, the partnership did receive the
appraisals prepared by AAA, as described above.

     Although the AIMCO Entities have interests that may be in conflict with
those of the partnership's unaffiliated limited partners, each of the AIMCO
Entities believes that the offer price and the structure of the transaction are
fair to the unaffiliated limited partners based on the information and factors
considered by the general partner of your partnership. Each of AIMCO Entities
expressly adopts the analysis, and the factors underlying such analysis, of the
general partner of your partnership.

13.  CONFLICTS OF INTEREST AND TRANSACTIONS WITH AFFILIATES

     Conflicts of Interest with Respect to the Offer.  The general partner of
your partnership is an affiliate of AIMCO. As a result, the general partner has
substantial conflicts of interest with respect to the offer. We desire to
purchase units at a low price and you desire to sell units at a high price. Such
conflicts of interest in connection with the offer differ from those conflicts
of interest that exist in connection with the general partner's management of
your partnership. Your general partner has filed a Solicitation/ Recommendation
Statement on Schedule 14d-9 with the SEC, which indicates that it is remaining
neutral and making no recommendation as to whether limited partners should
tender their units in the offer. YOU ARE URGED TO READ THIS LITIGATION
SETTLEMENT OFFER AND THE SCHEDULE 14D-9 AND THE RELATED MATERIALS CAREFULLY AND
IN THEIR ENTIRETY BEFORE DECIDING WHETHER TO TENDER YOUR UNITS.

     Conflicts of Interest That Currently Exist for Your Partnership.  We own
the general partner of your partnership and are affiliated with the property
manager of your partnership's property. We and the general partner of your
partnership received total fees and reimbursements (excluding property
management fees) of approximately $2,225,000 in 2001, $994,000 in 2002 and
$1,188,000 in 2003. Total fees and reimbursements (excluding property management
fees) for the six months ended June 30, 2004 were approximately $391,000. The
property manager is entitled to receive five percent of gross receipts from the
partnership's property for providing property management services. It received
management fees of approximately $1,063,000 in 2001, $930,000 in 2002 and
$903,000 in 2003. Management fees for the six months ended June 30, 2004 were
approximately $439,000. We have no current intention of changing the fee
structure for your general partner or the manager of your partnership's
property.

     Competition Among Properties.  Because AIMCO and your partnership both
invest in apartment properties, these properties may compete with one another
for tenants. Furthermore, you should bear in mind that AIMCO may acquire
properties in general market areas where your partnership's properties are
located. We believe that this concentration of properties in a general market
area will facilitate overall operations through collective advertising efforts
and other operational efficiencies. In managing AIMCO's properties, we will
attempt to reduce conflicts between competing properties by referring
prospective customers to the property considered to be most conveniently located
for the customer's needs.

     Future Offers.  Under the terms of the settlement, we are not obligated to
make another tender offer for units in your partnership. We have no current
plans to conduct future tender offers for the units in your partnership, but our
plans may change based on future circumstances, including tender offers made by
third parties. Any such future offers that we make could be at prices that are
more or less than the current offer price.

     Transactions with Affiliates.  Your partnership has no employees and is
dependent on the general partner and its affiliates for the management and
administration of all partnership activities. The partnership agreement provides
for (i) certain payments to affiliates for services and (ii) reimbursement of
certain expenses incurred by affiliates on behalf of the partnership.

                                        53


     We and the general partner of your partnership are entitled to receive 5%
of gross receipts from all of the partnership's properties as compensation for
providing property management services, and received management fees of
approximately $903,000, $930,000 and $1,063,000 for the years ended December 31,
2003, 2002 and 2001, respectively, and $439,000 for the six months ended June
30, 2004.

     We received reimbursement of accountable administrative expenses amounting
to approximately $436,000, $394,000 and $1,331,000 for the years ended December
31, 2003, 2002 and 2001, respectively, and $194,000 for the six months ended
June 30, 2004. Included in these amounts are fees related to construction
management services provided by NHP Management Company (which is our affiliate)
of approximately $68,000, $86,000 and $769,000 for the years ended December 31,
2003, 2002 and 2001, respectively, and $21,000 for the six months ended June 30,
2004. The construction management service fees are calculated based on a
percentage of current additions to investment properties.

     The partnership agreement provides for a fee equal to 7.5% of "net cash
flow from operations," as defined in the partnership agreement to be paid, to
the general partner for executive and administrative management services. One
half of this fee is to be accrued and not paid unless the limited partners have
received distributions equal to a 5% cumulative annual return on their adjusted
capital investment as defined in the partnership agreement. This return criteria
has not been met. The general partner earned approximately $198,000 and $325,000
for the years ended December 31, 2003 and 2002, respectively. During the six
months ended June 30, 2004, fees of $48,000 were earned. The balance payable to
the general partner at June 30, 2004 is approximately $409,000. Of this amount,
approximately $285,000 will remain accrued until the criteria for payment have
been met.

     During the year ended December 31, 2003, the general partner advanced the
partnership approximately $240,000 to cover costs related to the refinancing of
the Twin Lake Towers mortgage. Interest was charged on this advance at prime
plus 1% and was approximately $1,000 for the year ended December 31, 2003. This
advance and the interest incurred were repaid during the year ended December 31,
2003 with the proceeds from the refinancing of Twin Lake Towers. There were no
similar advances from the general partner during the year ended December 31,
2002 or the six months ended June 30, 2004.

     Pursuant to the partnership agreement, the general partner is entitled to
receive a distribution equal to 3% of the aggregate disposition price of sold
properties. The partnership paid a distribution of $186,000 to the general
partner related to the sale of Cooper Point Plaza in 1999. During 2001, the
partnership paid distributions of approximately $85,000 and $375,000 related to
the sales of Briarwood and Gateway Gardens Apartments, respectively. These
distributions are subordinate to the limited partners receiving their original
capital contributions plus a cumulative preferred return of 6% per annum of
their adjusted capital investment, as defined in the partnership agreement. If
the limited partners have not received these returns when the partnership
terminates, the general partner will return these amounts to the partnership.

     Pursuant to the partnership agreement, the general partner is entitled to
receive a distribution equal to 1% of the gross proceeds of a refinancing of an
investment property. During the year ended December 31, 2003, the partnership
paid approximately $326,000 in such fees related to the refinancings of Hunters
Glen IV, Twin Lake Towers and Chambers Ridge Apartments. During the year ended
December 31, 2001, the partnership paid approximately $293,000 in such fees
related to the refinancings of Hunters Glen V and VI Apartments. Such fees are
capitalized as loan costs and are being amortized over the life of the related
loans.

     The partnership insures its properties up to certain limits through
coverage provided by AIMCO, which is generally self-insured for a portion of
losses and liabilities related to workers compensation, property casualty and
vehicle liability. The partnership insures its properties above the AIMCO limits
through insurance policies obtained by AIMCO from insurers unaffiliated with the
general partner. During the years ended December 31, 2003, 2002 and 2001, and
the six months ended June 30, 2004, the partnership was charged by AIMCO and its
affiliates approximately $228,000, $275,000, $141,000 and $149,000,
respectively, for insurance coverage and fees associated with policy claims
administration.

                                        54


14.  FUTURE PLANS OF THE PURCHASER

     As described above under "The Litigation Settlement Offer -- Section 11.
Background and Reasons for the Offer," your general partner is our affiliate
and, therefore, we have the ability to control the management of your
partnership. In addition, we own the manager of your partnership's property. We
currently intend that, upon consummation of the offer, we will hold the units
acquired and your partnership will continue its business and operations
substantially as they are currently being conducted. The offer is not expected
to have any effect on partnership operations.

     Under the terms of the settlement, we are not obligated to make another
litigation settlement offer. Although we may make future tender offers, we have
no current plans to conduct future tender offers for units in your partnership.
We may acquire additional units or sell units after completion or termination of
the offer. Any acquisition may be made through private purchases, through one or
more future tender or exchange offers, by merger, consolidation or by any other
means deemed advisable. Any acquisition may be at a price higher or lower than
the price to be paid for the units purchased pursuant to this offer, and may be
for cash, limited partnership interests in AIMCO Properties, L.P. or other
consideration. We may consider selling some or all of the units we acquire
pursuant to this offer to persons not yet determined, which may include our
affiliates. We may also buy your partnership's properties, although we have no
present intention to do so. There can be no assurance, however, that we will
initiate or complete, or will cause your partnership to initiate or complete,
any subsequent transaction during any specific time period following the
expiration of the offer or at all.

     Except as set forth herein, we do not have any present plans or proposals
which relate to or would result in an extraordinary transaction, such as a
merger, reorganization or liquidation, involving your partnership; a purchase or
sale or transfer of a material amount of your partnership's assets; any changes
in composition of your partnership's senior management or personnel or their
compensation; any changes in your partnership's present capitalization,
indebtedness or distribution policy; or any other material changes in your
partnership's structure or business. We or our affiliates may loan funds to your
partnership which may be secured by your partnership's properties. If any such
loans are made, upon default of such loans, we or our affiliates could seek to
foreclose on the loan and related mortgage or security interest. However, we
expect that, consistent with your general partner's fiduciary obligations, the
general partner will seek and review opportunities, including opportunities
identified by us, to engage in transactions which could benefit your
partnership, such as sales or refinancings of assets or a combination of the
partnership with one or more other entities, with the objective of seeking to
maximize returns to limited partners.

     We have been advised that the general partner does not currently expect to
consider, on behalf of your partnership any of the following transactions: (i)
payment of extraordinary distributions; (ii) refinancing, reducing or increasing
existing indebtedness of the partnership; (iii) sales of assets, individually or
as part of a complete liquidation; and (iv) mergers or other consolidation
transactions involving the partnership. Any such merger or consolidation
transaction could involve other limited partnerships in which your general
partner or its affiliates serve as general partners, or a combination of the
partnership with one or more existing, publicly traded entities (including,
possibly, affiliates of AIMCO), in any of which limited partners might receive
cash, common stock or other securities or consideration. As discussed under "The
Litigation Settlement Offer -- Section 15. Certain Information Concerning Your
Partnership -- Investment Objectives and Policies; Sale or Financing of
Investments," the general partner regularly evaluates the real estate and
capital markets. The general partner may consider refinancing the partnership's
existing indebtedness to the extent that the general partner is able to obtain a
lower interest rate or if such indebtedness is approaching maturity.
Furthermore, in the event that the general partner receives an attractive offer
for any of your partnership's properties, the general partner would give due
consideration to such an offer.

     If any of the transactions referred to above occur, and financial benefits
accrue to the limited partners, we will participate in those benefits to the
extent of our ownership of units. The agreement of limited partnership prohibits
limited partners from voting on actions taken by the partnership, unless
otherwise specifically permitted therein. Limited partners may vote on a
liquidation, and we will be able to

                                        55


significantly influence or control the outcome of any such vote. Our primary
objective in seeking to acquire the units pursuant to the offer is not, however,
to influence the vote on any particular transaction, but rather to generate a
profit on the investment represented by those units.

15.  CERTAIN INFORMATION CONCERNING YOUR PARTNERSHIP

     General.  Your partnership was organized on May 26, 1983 under the laws of
the State of California. Its primary business is real estate ownership and
related operations. Your partnership was formed for the purpose of making
investments in income-producing commercial and residential real estate. Your
partnership's investment portfolio currently consists of six residential
apartment complexes. Your partnership had approximately 1,334 limited partners
as of September 30, 2004.

     General Partner.  The general partner of your partnership is Angeles Realty
Corporation II, which is an affiliate of AIMCO. Our affiliate serves as manager
of the property owned by your partnership. We and the general partner of your
partnership received total fees and reimbursements (excluding property
management fees) of approximately $2,225,000 in 2001, $994,000 in 2002, and
$1,188,000 in 2003. Total fees and reimbursements (excluding property management
fees) for the six months ended June 30, 2004 were approximately $391,000. The
property manager is entitled to receive five percent of gross receipts from the
partnership's property for providing property management services. It received
management fees of approximately $1,063,000 in 2001, $930,000 in 2002, and
$903,000 in 2003. Management fees for the six months ended June 30, 2004 were
approximately $439,000.

     Ownership and Voting.  We, together with Cooper River Properties, L.L.C.,
Broad River Properties, L.L.C. and AIMCO IPLP, L.P. (which are our affiliates),
own 31,223 units, or 69.82%, of the outstanding units of your partnership.
Because we and our affiliates own a majority of the outstanding units, we have
the ability to control most votes of the limited partners. See "The Litigation
Settlement Offer -- Section 7. Effects of the Offer" and "-- Section 16. Voting
Power."

     Investment Objectives and Policies; Sale or Financing of Investments.  In
general, your general partner (which is our affiliate) regularly evaluates the
partnership's properties by considering various factors, such as the
partnership's financial position and real estate and capital markets conditions.
The general partner monitors a property's specific locale and sub-market
conditions (including stability of the surrounding neighborhood), evaluating
current trends, competition, new construction and economic changes. It oversees
the operating performance of the properties and continuously evaluates the
physical improvement requirements. In addition, the financing structure for the
properties (including any prepayment penalties), tax implications, availability
of attractive mortgage financing to a purchaser, and the investment climate are
all considered. Any of these factors, and possibly others, could potentially
contribute to any decision by the general partner to sell, refinance, upgrade
with capital improvements or hold the partnership properties. If rental market
conditions improve, the level of distributions might increase over time. It is
possible that the private resale market for properties could improve over time,
making a sale of the partnership's properties in a private transaction at some
point in the future a more viable option than it is currently. After taking into
account the foregoing considerations, your general partner is not currently
seeking a sale of your partnership's properties. Although the future operating
results of your partnership and future sales prices of the properties owned by
your partnership are uncertain, the operating performance of your partnership's
properties may improve in the future, which, in turn, may result in higher
property values, making a sale of your partnership's properties a more
attractive option in the future. Such values, however, are also a function of
capitalization rates in the market and the interest rate environment at the
time. Furthermore, the general partner expects to spend approximately $411,000
for capital improvements for the remainder of 2004 to repair and update the
properties. Although there can be no assurance as to effect of these
expenditures on the future performance of your partnership's properties, these
expenditures are expected to improve the desirability of the properties to
tenants. Another significant factor considered by your general partner is the
likely tax consequences of a sale of the properties for cash. Such a transaction
would likely result in tax liabilities for many limited partners.

                                        56


     Term of Your Partnership.  Under your partnership's agreement of limited
partnership, the term of the partnership will continue until December 31, 2035
unless sooner terminated as provided in the agreement or by law.

     Capital Replacements.  Your partnership has an ongoing program of capital
improvements, replacements and renovations, including interior and exterior
building improvements, cabinet, floor covering and appliance replacements and
other replacements and renovations in the ordinary course of business. All
capital improvements and renovation costs, which are budgeted at $1,074,000 for
2004, are expected to be paid from operating cash flows or cash reserves, or
from short-term or long-term borrowings.

     Competition.  There are other residential properties within the market area
of each of your partnership's properties. The number and quality of competitive
properties in such an area could have a material effect on the rental market for
the apartments at your partnership's properties and the rents that may be
charged for such apartments. While AIMCO is a significant factor in the United
States in the apartment industry, competition for apartments is local. According
to data published by the National Multi-Housing Council, we believe AIMCO is the
largest owner and manager of multifamily apartment properties in the United
States.

                                        57


     Financial Data.  The selected financial information of your partnership set
forth below for the years ended December 31, 2003, 2002 and 2001 is based on
audited financial statements. The selected financial information set forth below
for the six months ended June 30, 2004 and 2003 is based on unaudited financial
statements. This information should be read in conjunction with such financial
statements, including the notes thereto, and "Management's Discussion and
Analysis of Financial Condition and Results of Operations of Your Partnership"
in the Annual Report on Form 10-KSB of your partnership for the year ended
December 31, 2003, and the Quarterly Report on Form 10-QSB for the quarter ended
June 30, 2004. This report and other information may be inspected at the public
reference facilities maintained by the SEC at Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549. Copies of such material can also be obtained from
the Public Reference Room of the SEC in Washington, D.C. at prescribed rates.
The SEC also maintains a site on the World Wide Web at http://www.sec.gov that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the SEC.

<Table>
<Caption>
                                          FOR THE SIX MONTHS
                                            ENDED JUNE 30,      FOR THE YEAR ENDED DECEMBER 31,
                                          -------------------   --------------------------------
                                            2004       2003       2003       2002        2001
                                          --------   --------   --------   --------   ----------
                                                                                      (RESTATED)
                                               (DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
                                              (UNAUDITED)
                                                                       
OPERATING DATA:
  Total revenues........................  $  8,870   $  8,909   $ 18,187   $ 18,792    $ 18,904
  (Loss) from continuing operations.....        --         --         --         --        (364)
  Gain from sale of discontinued
     operations.........................        --         --         --         --      13,118
  Net income (loss).....................       238       (504)      (528)        68      11,932
  (Loss) from continuing operations per
     limited partnership unit...........        --         --         --         --       (8.05)
  Gain from sale of discontinued
     operations per limited partnership
     unit...............................        --         --         --         --      280.22
  Net income (loss) per limited
     partnership unit...................      5.28     (11.16)    (11.70)      1.50      253.97
  Distributions per limited partnership
     unit...............................     34.68      90.64     253.70      81.67      410.06
  Ratio of earnings to fixed charges
     (deficit)..........................    111.86%     78.43%     87.53%    101.45%      91.85%
BALANCE SHEET DATA:
  Cash and cash equivalents.............     1,080      7,153      1,975      2,040       1,399
  Real Estate, Net of Accumulated
     Depreciation.......................    20,519     24,350     22,376     26,349      30,267
  Total assets..........................    24,992     35,859     27,648     31,650      35,619
  Notes payable.........................    65,003     66,812     65,932     57,817      58,957
  General partners' (deficit) capital...      (145)       (57)      (131)       (11)         25
  Limited partners' deficit.............   (42,226)   (33,595)   (40,911)   (29,043)    (25,458)
  Partners' deficit.....................   (42,371)   (33,652)   (41,042)   (29,054)    (25,433)
  Total distributions...................    (1,567)    (4,094)   (11,460)    (3,689)    (18,982)
  Book value per limited partnership
     unit...............................   (944.27)   (751.26)   (914.87)   (649.47)    (569.30)
CASH FLOWS:
  Net (decrease) increase in cash and
     cash equivalents...................      (895)     5,113        (65)       641      (2,473)
  Net cash provided by operating
     activities.........................     2,194      1,896      5,148      6,913       4,202
</Table>

                                        58


     Description of Property.  The following shows the location, the date of
purchase, the nature of your partnership's ownership interest in and the use of
your partnership's properties.

<Table>
<Caption>
                                        DATE OF
PROPERTY                                PURCHASE      TYPE OF OWNERSHIP          USE
- --------                                --------      -----------------          ---
                                                                     
Chamber Ridge Apartments..............   7/26/84   Fee ownership subject to   Apartment
  Harrisburg, Pennsylvania                         first mortgage(1)          324 units
Hunters Glen Apts -- IV...............  01/31/85   Fee ownership subject to   Apartment
  Plainsboro New Jersey                            a first mortgage(1)        264 units
Hunters Glen Apts -- V................  01/31/85   Fee ownership subject to   Apartment
  Plainsboro, New Jersey                           a first mortgage(1)        304 units
Hunters Glen Apts -- VI...............  01/31/85   Fee ownership subject to   Apartment
  Plainsboro, New Jersey                           a first mortgage(1)        328 units
Pickwick Place Apartments.............  05/11/84   Fee ownership subject to   Apartment
  Indianapolis, Indiana                            a first mortgage(2)        336 units
Twin Lake Towers Apartments...........  03/30/84   Fee ownership subject to   Apartment
  Westmont, Illinois                               a first mortgage(1)        399 units
</Table>

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

(1) Property is held by a limited partnership in which the partnership
    ultimately owns a 100% interest.

(2) Property is held by a limited partnership in which the partnership owns a
    99.99% interest.

     Accumulated Depreciation Schedule.  The following shows the gross carrying
value and accumulated depreciation of your partnership's properties as of
December 31, 2003.

<Table>
<Caption>
                                           GROSS
                                          CARRYING   ACCUMULATED                         FEDERAL TAX
PROPERTY                                   VALUE     DEPRECIATION     RATE     METHOD       BASIS
- --------                                  --------   ------------   --------   ------   --------------
                                              (IN THOUSANDS)                            (IN THOUSANDS)
                                                                         
Chambers Ridge Apts.....................  $14,034      $10,783      5-40 yrs     (1)       $ 3,878
Hunter Glen Apts -- IV..................  $13,384      $ 9,954      5-40 yrs     (1)       $ 3,709
Hunter Glen Apts -- V...................  $15,608      $11,552      5-40 yrs     (1)       $ 4,249
Hunter Glen Apts -- VI..................  $16,776      $12,487      5-40 yrs     (1)       $ 4,000
Pickwick Place Apts.....................  $12,295      $ 8,869      5-40 yrs     (1)       $ 3,335
Twin Lake Towers Apts...................  $20,662      $16,738      5-40 yrs     (1)       $ 4,481
                                          -------      -------                             -------
  Total.................................  $92,759      $70,383                             $23,652
                                          =======      =======                             =======
</Table>

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

(1) Straight line and accelerated.

                                        59


     Schedule of Mortgages.  The following shows certain information regarding
the outstanding first mortgage encumbering your partnership's properties as of
December 31, 2003.

<Table>
<Caption>
                           PRINCIPAL BALANCE    STATED
                            AT DECEMBER 31,    INTEREST                                      PRINCIPAL BALANCE
PROPERTY                         2003            RATE     PERIOD AMORTIZED   MATURITY DATE   DUE AT MATURITY(1)
- --------                   -----------------   --------   ----------------   -------------   ------------------
                            (IN THOUSANDS)                                                     (IN THOUSANDS)
                                                                              
Chambers Ridge Apts
  1st mortgage...........       $ 8,266         (2)               30 yrs        09/2007           $ 7,488
Hunters Glen Apts IV
  1st mortgage...........       $12,003          5.26%          18.5 yrs        01/2022                --
Hunters Glen Apts V
  1st mortgage...........       $13,668          7.14%            20 yrs        01/2022                --
Hunters Glen Apts VI
  1st mortgage...........       $14,226          7.14%            20 yrs        01/2022                --
Pickwick Place Apts 1st
  mortgage...............       $ 5,924          9.10%            28 yrs        03/2005             5,775
Twin Lake Towers Apts
  1st mortgage...........       $11,845          4.54%            10 yrs        07/2013             7,385
                                -------                                                           -------
  Total..................       $65,932                                                           $20,648
                                =======                                                           =======
</Table>

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

(1) See notes to financial statements in the partnership's Annual Report on Form
    10-KSB for the year ended December 31, 2003 for information with respect to
    the partnership's ability to prepay these loans and more specific details as
    to the terms of the loans.

(2) Adjustable rate based on the Fannie Mae discounted mortgage-backed security
    index plus 85 basis points (1.90% per annum at December 31, 2003).

     On May 16, 2003, the partnership refinanced the mortgages encumbering
Chambers Ridge Apartments. The refinancing replaced the existing mortgages of
approximately $5,060,000 with a new mortgage in the amount of $8,385,000. Total
capitalized loan costs were approximately $234,000 during the year ended
December 31, 2003. The partnership recognized a loss on the early extinguishment
of debt of approximately $42,000 during the year ended December 31, 2003, due to
the write-off of unamortized loan costs, debt discounts and prepayment penalties
paid.

     Initially, the May 16, 2003 refinancing of Chambers Ridge Apartments was
under an interim credit facility which also provided for the refinancing of
several other properties. The interim credit facility created separate loans for
each property refinanced thereunder, which loans were not cross-collateralized
or cross-defaulted with each other. During the term of the interim credit
facility, Chambers Ridge Apartments was required to make interest-only payments.
The first month's interest rate for Chambers Ridge Apartments was 2.78%.

     As of June 1, 2003 the loan on Chambers Ridge Apartments was transferred to
a different lender. The credit facility with the new lender has a maturity date
of September 2007, at which time a balloon payment of approximately $7,488,000
is due, with an option for the partnership to elect one five-year extension.
This credit facility also created separate loans for each property refinanced
thereunder, which loans are not cross-collateralized or cross-defaulted with
each other. Each note under this credit facility is initially a variable rate
loan, and after three years the partnership has the option of converting the
note to a fixed rate loan. The interest rate on the variable rate loans is 85
basis points over the Fannie Mae discounted mortgage-backed security index
(1.88% per annum at June 1, 2004), and the rate resets monthly. Each loan
automatically renews at the end of each month. In addition, monthly principal
payments are required based on a 30-year amortization schedule, using the
interest rate in effect during the first month that the property is financed by
the credit facility. The loans may be prepaid without penalty.

                                        60


     On June 27, 2003, the partnership refinanced the mortgages encumbering Twin
Lake Tower Apartments. The refinancing replaced the existing mortgages of
approximately $10,192,000 with a new mortgage in the amount of $12,000,000. The
new mortgage carries a stated interest rate of 4.54% per annum compared to the
stated interest rate of 7.83% per annum on the prior mortgages. Payments on the
mortgage loan are due monthly until July 1, 2013, at which time a balloon
payment of approximately $7,385,000 is due. Total capitalized loan costs were
approximately $305,000 during the year ended December 31, 2003. The partnership
recognized a loss on the early extinguishment of debt of approximately $124,000
during the year ended December 31, 2003, due to the write-off of unamortized
loan costs, debt discounts and prepayment penalties paid.

     On June 30, 2003, the partnership refinanced the mortgage encumbering
Hunters Glen IV Apartments. The refinancing replaced the existing mortgages of
approximately $7,818,000 with a new mortgage in the amount of $12,200,000. The
new mortgage carries a stated interest rate of 5.26% per annum compared to the
stated interest rate of 8.43% per annum on the prior mortgage. Payments on the
mortgage loan are due monthly until January 1, 2022, at which time the loan is
scheduled to be fully amortized. Total capitalized loan costs were approximately
$251,000 during the year ended December 31, 2003. The partnership recognized a
loss on the early extinguishment of debt of approximately $3,000 during the year
ended December 31, 2003, due to the write-off of unamortized loan costs.

     Average Rental Rates and Occupancy.  The following shows the average rental
rates and occupancy percentages for your partnership's properties during the
periods indicated.

<Table>
<Caption>
                                                                                 AVERAGE
                                                       AVERAGE ANNUAL RENTAL     ANNUAL
                                                          RATE (PER UNIT)       OCCUPANCY
                                                       ---------------------   -----------
PROPERTY                                                 2003        2002      2003   2002
- --------                                               ---------   ---------   ----   ----
                                                                          
Chambers Ridge Apartments............................   $ 7,851     $ 7,507     92%    93%
Hunters Glen Apartments -- IV........................   $11,128     $10,965     94%    94%
Hunters Glen Apartments -- V.........................   $11,176     $10,981     94%    94%
Hunters Glen Apartments -- VI........................   $10,801     $10,803     94%    95%
Pickwick Place Apartments(1).........................   $ 7,444     $ 7,686     93%    89%
Twin Lake Towers Apartments..........................   $ 9,299     $10,013     92%    91%
</Table>

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

(1) The general partner attributes the increase in occupancy at Pickwick Place
    Apartments to increased marketing efforts.

     Property Management.  Your partnership's properties are managed by one of
our affiliates. Pursuant to the management agreement between the property
manager and your partnership, the property manager operates your partnership's
properties, establishes rental policies and rates and directs marketing
activities. The property manager also is responsible for maintenance, the
purchase of equipment and supplies, and the selection and engagement of all
vendors, suppliers and independent contractors.

     Distributions.  The following table shows, for each of the years indicated,
the distributions paid per unit for such years.

<Table>
<Caption>
YEAR ENDED DECEMBER 31                                         AMOUNT
- ----------------------                                         -------
                                                            
2001........................................................   $410.06
2002........................................................   $ 81.67
2003........................................................   $253.70
2004 (through June 30, 2004)................................   $ 34.68
</Table>

                                        61


     Compensation Paid to the General Partner and its Affiliates.  The following
table shows, for each of the periods indicated, approximate amounts paid to your
general partner and its affiliates on a historical basis. The general partner is
reimbursed for actual direct costs and expenses incurred in connection with the
operation of the partnership. The property manager is entitled to receive fees
for transactions involving your partnership and its properties and is entitled
to receive five percent of the gross receipts from the partnership's properties
for providing property management services. See "The Litigation Settlement
Offer -- Section 13. Conflicts of Interest and Transactions with Affiliates."

<Table>
<Caption>
                                                       PARTNERSHIP FEES       PROPERTY
YEAR                                                     AND EXPENSES      MANAGEMENT FEES
- ----                                                   -----------------   ---------------
                                                                     
2001................................................      $2,225,000         $1,063,000
2002................................................      $  994,000(1)      $  930,000
2003................................................      $1,188,000         $  903,000
2004 (through June 30, 2004)........................      $  391,000         $  439,000
</Table>

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

(1) $285,000 of which remains accrued. See "The Litigation Settlement
    Offer -- Section 13. Conflicts of Interest and Transactions with
    Affiliates -- Transactions with Affiliates."

     Legal Proceedings.  From time to time, your partnership may be a party to a
variety of legal proceedings related to its ownership of properties which arise
in the ordinary course of business. See "The Litigation Settlement
Offer -- Section 9. The Lawsuit and the Settlement."

16.  VOTING POWER

     Decisions with respect to the day-to-day management of your partnership are
the responsibility of the general partner. Because the general partner of your
partnership is our affiliate, we control the management of your partnership.
Under your partnership's agreement of limited partnership, limited partners
holding a majority of the outstanding units must approve certain extraordinary
transactions, including the removal of the general partner, most amendments to
the partnership agreement and the sale of all or substantially all of your
partnership's assets. We, together with Cooper River Properties, L.L.C., Broad
River Properties, L.L.C. and AIMCO IPLP, L.P. (which are our affiliates), own
31,223 units, or 69.82%, of the outstanding units of your partnership. Because
we and our affiliates own a majority of the outstanding units, we control most
voting decisions made by limited partners. See "The Litigation Settlement
Offer -- Section 7. Effects of the Offer."

17.  SOURCE OF FUNDS

     We expect that approximately $10,881,200 will be required to purchase all
of the limited partnership units that we are seeking in this offer exclusive of
fees and expenses. For more information regarding fees and expenses, see "The
Litigation Settlement Offer -- Section 21. Fees and Expenses."

     In addition to this offer, we intend on making a second round of offers to
acquire interests in approximately 12 other limited partnerships pursuant to the
terms of the settlement. If all such offers were fully subscribed for cash, we
would be required to pay approximately $85.7 million for all such units. If for
some reason we did not have such funds available we might extend these offers
for a period of time sufficient for us to obtain additional funds, or we could
terminate the offers. However, we do not expect all such offers to be fully
subscribed. Additionally, we believe that we will have sufficient cash on hand
and available sources of financing to acquire all units tendered pursuant to
such offers. As of June 30, 2004 we had approximately $90.6 million of cash on
hand and $136.7 million available for borrowing under existing lines of credit.
We intend to repay any amounts borrowed to finance the offer out of future
working capital.

     We have a $445 million revolving credit facility with Bank of America,
Fleet National Bank and First Union National Bank with a syndicate comprised of
a total of ten lender participants. We are the borrower and all obligations
thereunder are guaranteed by certain of AIMCO's subsidiaries. The obligations
under

                                        62


the credit facility are secured, among other things, by our pledge of our stock
ownership in certain subsidiaries of AIMCO, and a first priority pledge of
certain of our non-real estate assets. The annual interest rate under the credit
facility is based on either LIBOR or a base rate which is the higher of Bank of
America's reference rate or 0.5% over the federal funds rate, plus, in either
case, an applicable margin. The margin ranges between 2.15% and 2.85% in the
case of LIBOR-based loans and between 0.65% and 1.35% in the case of base rate
loans, based upon a fixed charge coverage ratio. The credit facility expires on
July 31, 2005 and can be extended at AIMCO's option for a one-year term on a
one-time basis.

18.  DISSENTERS' RIGHTS

     Neither the agreement of limited partnership of your partnership nor
applicable law provides any right for you to have your units appraised or
redeemed in connection with, or as a result of, our offer. You have the
opportunity to make an individual decision on whether or not to tender your
units in the offer.

     No provisions have been made with regard to the offer to allow you or other
limited partners to inspect the books and records of the partnership or to
obtain counsel or, other than as required by the settlement, appraisal services
at our expense or at the expense of your partnership. However, you have the
right under your partnership's agreement of limited partnership to obtain a list
of the limited partners in your partnership.

19.  CONDITIONS TO THE OFFER

     We will not be required to accept for payment and pay for any units
tendered pursuant to our offer, may postpone the purchase of, and payment for,
units tendered, and may terminate or amend our offer if at any time on or after
the date of this Litigation Settlement Offer and at or before the expiration of
our offer (including any extension thereof), any of the following shall occur:

     - any change shall have occurred or been threatened in the business,
       properties, assets, liabilities, indebtedness, capitalization, condition
       (financial or otherwise), operations, licenses or franchises, management
       contract, or results of operations or prospects of your partnership or
       local markets in which your partnership owns or operates its property,
       including any fire, flood, natural disaster, casualty loss, or act of God
       that is adverse to your partnership or the value of your units to us,
       which change would, individually or in the aggregate, result in an
       adverse effect on net operating income of your partnership of more than
       $10,000 per year, or a decrease in value of an asset of your partnership,
       or the incurrence of a liability with respect to your partnership, in an
       amount in excess of $100,000 (a "Material Adverse Effect"); or

     - there shall have occurred (i) any general suspension of trading in, or
       limitation on prices for, securities on any national securities exchange
       or the over-the-counter market in the United States, (ii) a decline in
       the closing share price of AIMCO's Class A Common Stock of more than
       5.0%, measured from the close of business on the last trading day
       preceding the date of this offer and the close of business on the last
       trading day preceding the expiration of this offer, (iii) any
       extraordinary or material adverse change in the financial, real estate or
       money markets or major equity security indices in the United States such
       that there shall have occurred at least a 25 basis point increase in
       LIBOR, or at least a 5.0% decrease in the S&P 500 Index, the Morgan
       Stanley REIT Index, or the price of the 10-year Treasury Bond or the
       price of the 30-year Treasury Bond, in each case, measured from the close
       of business on the last trading day preceding the date of this offer and
       the close of business on the last trading day preceding the expiration of
       this offer, (iv) a declaration of a banking moratorium or any suspension
       of payments in respect of banks in the United States, (v) acts of
       terrorism or a commencement of a war, armed hostilities or other national
       or international calamity directly or indirectly involving the United
       States, (vi) any limitation (whether or not mandatory) by any
       governmental authority on, or any other material event which, in either
       case, could reasonably be expected to affect the extension of credit by
       banks or other lending institutions, or (vii) in the case of any of the
       foregoing existing at the time of the commencement of the offer, a
       material acceleration or worsening thereof; or

                                        63


     - there shall have been threatened in writing, instituted or pending any
       action, proceeding, application or counterclaim by any Federal, state,
       local or foreign government, governmental authority or governmental
       agency, or by any other person, before any governmental authority, court
       or regulatory or administrative agency, authority or tribunal, which (i)
       challenges or seeks to challenge the acquisition by us of the units,
       restrains, prohibits or delays the making or consummation of the offer,
       prohibits the performance of any of the contracts or other arrangements
       entered into by us (or any of our affiliates) seeks to obtain any
       material amount of damages as a result of the transactions contemplated
       by the offer, (ii) seeks to make the purchase of, or payment for, some or
       all of the units pursuant to the offer illegal or results in a delay in
       our ability to accept for payment or pay for some or all of the units,
       (iii) seeks to prohibit or limit the ownership or operation by us or any
       of our affiliates of the entity serving as your general partner (which is
       our affiliate) or to remove such entity as the general partner of your
       partnership, or seeks to impose any material limitation on our ability or
       any of our affiliates to conduct your partnership's business or own such
       assets, (iv) seeks to impose material limitations on our ability or any
       of our affiliates to acquire or hold or to exercise full rights of
       ownership of the units including, but not limited to, the right to vote
       the units purchased by us on all matters properly presented to
       unitholders or (v) in the case of any of the foregoing relating to the
       litigation settlement offer and existing at the time of the commencement
       of the offer, a material worsening thereof; or

     - there shall be any action taken, or any statute, rule, regulation, order
       or injunction shall be sought, proposed, enacted, promulgated, entered,
       enforced or deemed applicable to the offer, your partnership, any general
       partner of your partnership, us or any affiliate of our or your
       partnership, or any other action shall have been taken, proposed or
       threatened, by any government, governmental authority or court, that,
       directly or indirectly, results in any of the consequences referred to in
       clauses (i) through (v) of the immediately preceding paragraph; or

     - a tender or exchange offer for any units shall have been commenced or
       publicly proposed to be made by another person or "group" (as defined in
       Section 13(d)(3) of the Securities Exchange Act of 1934), or it shall
       have been publicly disclosed or we shall have otherwise learned that (i)
       any person or group shall have acquired or proposed or be attempting to
       acquire beneficial ownership of more than four percent of the units, or
       shall have been granted any option, warrant or right, conditional or
       otherwise, to acquire beneficial ownership of more than four percent of
       the units, or (ii) any person or group shall have entered into a
       definitive agreement or an agreement in principle or made a proposal with
       respect to a merger, consolidation, purchase or lease of assets, debt
       refinancing or other business combination with or involving your
       partnership;

     - there shall have occurred any event, circumstance, change, effect or
       development that, individually or in the aggregate with any other events,
       circumstances, changes, effects or developments, has had an adverse
       effect on our financial condition in an amount in excess of $10,000,000,
       which does not result from actions or inactions by us or our affiliates;
       or

     - the final court approval of the settlement shall have been reversed or
       vacated, the parties terminate the settlement or the settlement shall
       otherwise terminate by its terms.

     The foregoing conditions are for our sole benefit and may be asserted by us
regardless of the circumstances giving rise to such conditions or may be waived
by us at any time in our reasonable discretion prior to the expiration of this
offer. The failure by us at any time to exercise any of the foregoing rights
shall not be deemed a waiver of any such right, and the waiver of any such right
with respect to any particular facts or circumstances shall not be deemed a
waiver with respect to any other facts or circumstances. If we waive any of the
conditions to the offer with respect to the tender of a particular unit, we will
waive such condition with respect to all other tenders of units in this offer as
well. All conditions to our offer will be satisfied or waived on or before the
expiration of our offer. We will not waive a material condition to the offer on
the expiration date. If we waive any material conditions to our offer, we will
notify you and, if necessary, we will extend the offer period so that you will
have at least five business days from the date of our notice to withdraw your
units.

                                        64


20.  CERTAIN LEGAL MATTERS

     General.  Except as set forth in this Section 20, we are not aware of any
licenses or regulatory permits that would be material to the business of your
partnership, taken as a whole, and that might be adversely affected by our
acquisition of units as contemplated herein, or any filings, approvals or other
actions by or with any domestic or foreign governmental authority or
administrative or regulatory agency that would be required prior to the
acquisition of units by us pursuant to the offer, other than the filing of a
Tender Offer Statement and Rule 13e-3 Transaction Statement on Schedule TO with
the SEC (which has already been filed) and any required amendments thereto.
While there is no present intent to delay the purchase of units tendered
pursuant to the offer pending receipt of any such additional approval or the
taking of any such action, there can be no assurance that any such additional
approval or action, if needed, would be obtained without substantial conditions
or that adverse consequences might not result to your partnership or its
business, or that certain parts of its business might not have to be disposed of
or other substantial conditions complied with in order to obtain such approval
or action, any of which could cause us to elect to terminate the offer without
purchasing units thereunder. Our obligation to purchase and pay for units is
subject to certain conditions, including conditions related to the legal matters
discussed in this Section 20.

     Antitrust.  We do not believe that the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, is applicable to the acquisition of units
contemplated by our offer.

     Margin Requirements.  The units are not "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System and,
accordingly, those regulations generally are not applicable to our offer.

     State Laws.  We are not aware of any jurisdiction in which the making of
our offer is not in compliance with applicable law. If we become aware of any
jurisdiction in which the making of the offer would not be in compliance with
applicable law, we will make a good faith effort to comply with any such law.
If, after such good faith effort, we cannot comply with any such law, the offer
will not be made to (nor will tenders be accepted from or on behalf of) limited
partners residing in such jurisdiction. In those jurisdictions with securities
or blue sky laws that require the offer to be made by a licensed broker or
dealer, the offer shall be made on behalf of us, if at all, only by one or more
registered brokers or dealers licensed under the laws of that jurisdiction.

21.  FEES AND EXPENSES

     You will not pay any partnership transfer fees if you tender your units.
Except as set forth herein, we will not pay any fees or commissions to any
broker, dealer or other person for soliciting tenders of units pursuant to the
offer. We have retained The Altman Group, Inc. to act as Information Agent in
connection with our offer. The Information Agent may contact holders of units by
mail, telephone, telex, telegraph and personal interview and may request
brokers, dealers and other nominee limited partners to forward materials
relating to the offer to beneficial owners of the units. We will pay the
Information Agent reasonable and customary compensation for its services in
connection with the offer, plus reimbursement for out-of-pocket expenses, and
will indemnify it against certain liabilities and expenses in connection
therewith, including liabilities under the Federal securities laws. We will also
pay all costs and expenses of printing and mailing the offer and any related
legal fees and expenses. However, under the terms of the settlement, the offer
price has been reduced by the costs and expenses related to making this offer.

                                        65


     The following is an itemized statement of the aggregate estimated expenses
incurred and to be incurred in this offer by us:

<Table>
                                                            
Information Agent Fees......................................   $ 7,500
Legal Fees..................................................    20,000
Printing Fees...............................................     6,000
Tax and Accounting Fees.....................................     1,500
Postage.....................................................     7,700
Depositary..................................................       500
                                                               -------
     Total..................................................   $43,200
                                                               =======
</Table>

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

     NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF US NOT CONTAINED HEREIN, OR IN THE LETTER OF
TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED.

     NEITHER THE COURT NOR COUNSEL FOR THE PARTIES IN THE CLASS AND DERIVATIVE
LITIGATION MAKE ANY RECOMMENDATION REGARDING WHETHER YOU SHOULD ACCEPT THIS
LITIGATION SETTLEMENT OFFER. YOU ARE INSTEAD ENCOURAGED TO CAREFULLY REVIEW THIS
LITIGATION SETTLEMENT OFFER, THE EXECUTIVE SUMMARY OF THE INDEPENDENT
APPRAISER'S REPORT (ATTACHED AS ANNEX II) AND ANY OTHER INFORMATION AVAILABLE TO
YOU AND TO SEEK ADVICE FROM YOUR INDEPENDENT LAWYER, TAX ADVISOR AND/OR
FINANCIAL ADVISOR WITH RESPECT TO YOUR PARTICULAR CIRCUMSTANCES BEFORE DECIDING
WHETHER OR NOT TO ACCEPT THIS LITIGATION SETTLEMENT OFFER.

     We have filed with the SEC a Tender Offer Statement and Rule 13e-3
Transaction Statement on Schedule TO, pursuant to Sections 13(e)(4), 14(d)(1)
and Rule 14d-3 under the Exchange Act, furnishing certain additional information
with respect to our offer, and may file amendments thereto. Your partnership has
filed with the SEC a Solicitation/Recommendation Statement on Schedule 14D-9
pursuant to Section 14(d)(4) and Rule 14d-9 under the Exchange Act, furnishing
certain additional information about your partnership's and the general
partner's position concerning our offer, and your partnership may file
amendments thereto. The Schedules TO and 14D-9 and any amendments to either
Schedule, including exhibits, may be inspected and copies may be obtained at the
same place and in the same manner as described in "The Litigation Settlement
Offer -- Section 15. Certain Information Concerning Your Partnership."

     The letter of transmittal and any other required documents should be sent
or delivered by each limited partner or such limited partner's broker, dealer,
bank, trust company or other nominee to the Information Agent at one of its
addresses set forth below.

                    THE INFORMATION AGENT FOR THE OFFER IS:

                             THE ALTMAN GROUP, INC.

<Table>
                                                          
           By Mail:                  By Overnight Courier:                 By Hand:
         P.O. Box 238              1275 Valley Brook Avenue        1275 Valley Brook Avenue
      Lyndhurst, NJ 07071             Lyndhurst, NJ 07071             Lyndhurst, NJ 07071
</Table>

                         For information, please call:

                           TOLL FREE: (800) 467-0821

                                        66


                                    ANNEX I

                             OFFICERS AND DIRECTORS

     The names and positions of the executive officers of Apartment Investment
and Management Company ("AIMCO"); AIMCO-GP, Inc. ("AIMCO-GP") and Angeles Realty
Corporation II, Inc., the managing general partner of your partnership (the
"Managing General Partner") are set forth below. All of the executive officers
of AIMCO also serve as executive officers of AIMCO-GP. The directors of AIMCO
are also set forth below. The two directors of AIMCO-GP are Terry Considine and
Paul J. McAuliffe. The directors of the Managing General Partner of your
partnership are Terry Considine and Harry G. Alcock. Unless otherwise indicated,
the business address of each executive officer and director is 4582 South Ulster
Parkway, Suite 1100, Denver, Colorado 80237. Each executive officer and director
is a citizen of the United States of America.

<Table>
<Caption>
NAME                                                            POSITION
- ----                                                            --------
                                         
Terry Considine...........................  Chairman of the Board, Chief Executive Officer
                                            and President of AIMCO and the Managing General
                                            Partner
Jeffrey W. Adler..........................  Executive Vice President -- Conventional
                                            Property Operations of AIMCO and Executive Vice
                                            President of the Managing General Partner
Harry G. Alcock...........................  Executive Vice President and Chief Investment
                                            Officer of AIMCO and Executive Vice President
                                            and Director of the Managing General Partner
Miles Cortez..............................  Executive Vice President, General Counsel and
                                            Secretary of AIMCO and the Managing General
                                            Partner
Joseph DeTuno.............................  Executive Vice President -- Redevelopment of
                                            AIMCO and Executive Vice President of the
                                            Managing General Partner
Randall J. Fein...........................  Executive Vice President -- University Housing
                                            of AIMCO and Executive Vice President of the
                                            Managing General Partner
Patti K. Fielding.........................  Executive Vice President -- Securities and Debt
                                            of AIMCO and Executive Vice President of the
                                            Managing General Partner
Lance J. Graber...........................  Executive Vice President -- AIMCO Capital and
                                            Executive Vice President of the Managing General
                                            Partner
Paul J. McAuliffe.........................  Executive Vice President and Chief Financial
                                            Officer of AIMCO and the Managing General
                                            Partner
Ronald D. Monson..........................  Executive Vice President of AIMCO and the
                                            Managing General Partner
James G. Purvis...........................  Executive Vice President -- Human Resources of
                                            AIMCO and Executive Vice President of the
                                            Managing General Partner
David Robertson...........................  Executive Vice President of AIMCO and the
                                            Managing General Partner; President and Chief
                                            Executive Officer of AIMCO Capital
Thomas M. Herzog..........................  Senior Vice President and Chief Accounting
                                            Officer of AIMCO and the Managing General
                                            Partner
Martha L. Long............................  Senior Vice President of the General Partner
James N. Bailey...........................  Director of AIMCO
Richard S. Ellwood........................  Director of AIMCO
J. Landis Martin..........................  Director of AIMCO
Thomas L. Rhodes..........................  Director of AIMCO
Michael A. Stein..........................  Director of AIMCO
</Table>

                                       I-1


<Table>
<Caption>
NAME                                         PRINCIPAL OCCUPATIONS FOR THE LAST FIVE YEARS
- ----                                         ---------------------------------------------
                                         
Terry Considine...........................  Mr. Considine has been Chairman of the Board and
                                            Chief Executive Officer of AIMCO since July
                                            1994. Upon the effectiveness of Mr. Kompaniez's
                                            resignation as President and pending the
                                            appointment of a chief operating officer, Mr.
                                            Considine will serve as President. Mr. Considine
                                            serves as Chairman of the Board of Directors of
                                            American Land Lease, Inc. (formerly Asset
                                            Investors Corporation and Commercial Asset
                                            Investors, Inc.), another public real estate
                                            investment trust. Mr. Considine devotes his time
                                            to his responsibilities at AIMCO and AIMCO-GP on
                                            a full-time basis, and the balance to American
                                            Land Lease, Inc.
Jeffrey W. Adler..........................  Mr. Adler was appointed Executive Vice
                                            President, Conventional Property Operations in
                                            February 2004. Previously he served as Senior
                                            Vice President of Risk Management of AIMCO from
                                            January 2002 until November 2002, when he added
                                            the responsibility of Senior Vice President,
                                            Marketing. Prior to joining AIMCO, from 2000 to
                                            2002, Mr. Adler was Vice President,
                                            Property/Casualty for Channelpoint, a software
                                            company. From 1990 to 2000 Mr. Adler held
                                            several positions at Progressive Insurance
                                            including Colorado General Manager from 1996 to
                                            2000, Product Manager for Progressive Insurance
                                            Mountain Division from 1992 to 1996, and
                                            Director of Corporate Marketing from 1990 to
                                            1992.
Harry G. Alcock...........................  Mr. Alcock served as a Vice President of AIMCO
                                            from July 1996 to October 1997, when he was
                                            promoted to Senior Vice
                                            President -- Acquisitions. Mr. Alcock served as
                                            Senior Vice President -- Acquisitions until
                                            October 1999, when he was promoted to Executive
                                            Vice President and Chief Investment Officer. Mr.
                                            Alcock has held responsibility for AIMCO's
                                            acquisition and financing activities since July
                                            1994. From June 1992 until July 1994, Mr. Alcock
                                            served as Senior Financial Analyst for PDI and
                                            HFC. From 1988 to 1992, Mr. Alcock worked for
                                            Larwin Development Corp., a Los Angeles-based
                                            real estate developer, with responsibility for
                                            raising debt and joint venture equity to fund
                                            land acquisition and development. From 1987 to
                                            1988, Mr. Alcock worked for Ford Aerospace Corp.
                                            He received his B.S. from San Jose State
                                            University.
Miles Cortez..............................  Mr. Cortez was appointed Executive Vice
                                            President, General Counsel and Secretary of
                                            AIMCO in August 2001. Prior to joining AIMCO,
                                            Mr. Cortez was the senior partner of Cortez
                                            Macaulay Bernhardt & Schuetze LLC, a Denver Law
                                            firm, from December 1997 through September 2001.
                                            From August 1993 through November 1997, Mr.
                                            Cortez was a partner in the law firm of McKenna
                                            & Cuneo, LLP in Denver. Mr. Cortez was the
                                            President of the Colorado Bar Association from
                                            1996 to 1997 and President of the Denver Bar
                                            Association from 1982 to 1983.
</Table>

                                       I-2


<Table>
<Caption>
NAME                                         PRINCIPAL OCCUPATIONS FOR THE LAST FIVE YEARS
- ----                                         ---------------------------------------------
                                         
Joseph DeTuno.............................  Mr. DeTuno was appointed Executive Vice
                                            President -- Redevelopment of AIMCO in February
                                            2001 and previously served as Senior Vice
                                            President -- Property Redevelopment of AIMCO
                                            from August 1997 to February 2001. Prior to
                                            joining AIMCO, Mr. DeTuno was President and
                                            founder of JD Associates, his own full service
                                            real estate consulting, advisory and project
                                            management company that he founded in 1990.
Randall J. Fein...........................  Mr. Fein was appointed Executive Vice
                                            President -- University Housing of AIMCO in
                                            October 2003. He is responsible For the
                                            operation of AIMCO's student housing related
                                            Portfolio, including its joint venture
                                            activities. From 1989 through 2003, Mr. Fein
                                            served as general partner of Income Apartment
                                            Investors L.P., and Texas First Properties L.P.,
                                            which operated student and non-student housing.
                                            Prior to entering the apartment industry, Mr.
                                            Fein was engaged in the securities industry as a
                                            Director of Jefferies and as a Vice President of
                                            Salomon Brothers Inc. Mr. Fein is a member of
                                            the State Bar of Texas.
Patti K. Fielding.........................  Ms. Fielding was appointed Executive Vice
                                            President -- Securities and Debt of the Managing
                                            General Partner in February 2004 and of AIMCO in
                                            February 2003. She is responsible for securities
                                            and debt financing and the treasury department.
                                            From January 2000 to February 2003, Ms. Fielding
                                            served as Senior Vice President -- Securities
                                            and Debt. Ms. Fielding joined AIMCO in February
                                            1997 and served as Vice President -- Tenders,
                                            Securities and Debt until January 2002. Prior to
                                            joining AIMCO, Ms. Fielding was a Vice President
                                            with Hanover Capital Partners from 1996 to 1997,
                                            Vice Chairman, Senior Vice President and
                                            Principal of CapSource Funding Corp from 1993 to
                                            1995, and Group Vice President with Duff &
                                            Phelps Rating Co. from 1987 to 1993.
Lance J. Graber...........................  Mr. Graber was appointed Executive Vice
                                            President -- Acquisitions in October 1999. His
                                            principal business function is overseeing
                                            dispositions, refinancings, redevelopments and
                                            other transactions within AIMCO Capital's
                                            portfolio of affordable properties. Prior to
                                            joining AIMCO, Mr. Graber was an Associate from
                                            1991 through 1992 and then a Vice President from
                                            1992 through 1994 at Credit Suisse First Boston
                                            engaged in real estate financial advisory
                                            services and principal investing. He was a
                                            Director there from 1994 to May 1999, during
                                            which time he supervised a staff of seven in the
                                            making of principal investments in hotel,
                                            multi-family and assisted living properties. Mr.
                                            Graber received a B.S. and an M.B.A. from the
                                            Wharton School of the University of
                                            Pennsylvania.
</Table>

                                       I-3


<Table>
<Caption>
NAME                                         PRINCIPAL OCCUPATIONS FOR THE LAST FIVE YEARS
- ----                                         ---------------------------------------------
                                         
Paul J. McAuliffe.........................  Mr. McAuliffe has been Executive Vice President
                                            and Chief Financial Officer of the Managing
                                            General Partner since April 2002. Mr. McAuliffe
                                            has been Executive Vice President of AIMCO since
                                            February 1999 and was appointed Chief Financial
                                            Officer in October 1999. Prior to joining AIMCO,
                                            Mr. McAuliffe was Senior Managing Director of
                                            Secured Capital Corporation and prior to that
                                            time had been a Managing Director of Smith
                                            Barney, Inc. from 1993 to 1996, where he was a
                                            key member of the underwriting team that led
                                            AIMCO's initial public offering in 1994. Mr.
                                            McAuliffe was also a Managing Director and head
                                            of the real estate group at CS First Boston from
                                            1990 to 1993 and he was a Principal in the real
                                            estate group at Morgan Stanley & Co., Inc. from
                                            1983 to 1990. Mr. McAuliffe received a B.A. from
                                            Columbia College and an MBA from University of
                                            Virginia, Darden School.
Ronald D. Monson..........................  Mr. Monson was appointed Executive Vice
                                            President of AIMCO in February 2001. Beginning
                                            February 2004, Mr. Monson assumed oversight of
                                            four of AIMCO's regional operating centers. From
                                            February 2001 to February 2004, Mr. Monson
                                            served as the head of AIMCO's conventional
                                            property operations. Mr. Monson has been with
                                            AIMCO since 1997 and was promoted to Divisional
                                            Vice President in 1998. Prior to joining AIMCO,
                                            Mr. Monson worked for 13 years in operations
                                            management positions in the lawn care and
                                            landscaping industries, principally with True
                                            Green/Chemlawn. Mr. Monson received a Bachelor
                                            of Science from the University of Minnesota and
                                            a Masters in Business Administration from
                                            Georgia State University.
</Table>

<Table>
                                         
James G. Purvis...........................  Mr. Purvis was appointed Executive Vice
                                            President in February 2003. He is responsible
                                            for AIMCO's Human Resources and People
                                            Initiatives. Mr. Purvis has over 20 years of
                                            executive strategic human resources experience.
                                            Prior to joining AIMCO he was Vice President, HR
                                            at SomaLogic, a privately funded biotechnology
                                            company. He was a principal in O(3)C Global
                                            Organization Solutions, and has held executive
                                            human resources and operations management
                                            positions in ALCOA (Aluminum Company of
                                            America), Texas Air/Eastern Airlines,
                                            Starwood/WestinHotels and Resorts, and
                                            Tele-Communications (TCI) Technology, Inc. Mr.
                                            Purvis holds a BA in communications and modern
                                            languages from the University of Notre Dame.
</Table>

                                       I-4

<Table>
                                         
David Robertson...........................  Mr. Robertson was appointed Executive Vice
                                            President -- Affordable Properties in February
                                            2002. He is responsible for affordable property
                                            operations, refinancing and other value creation
                                            within AIMCO's affordable portfolio. Prior to
                                            joining AIMCO, Mr. Robertson was a member of the
                                            investment-banking group at Smith Barney from
                                            1991 to 1996, where he was responsible for real
                                            estate investment banking transactions in the
                                            western United States, and was part of the Smith
                                            Barney team that managed AIMCO's initial public
                                            offering in 1994. Since February 1996, Mr.
                                            Robertson has been Chairman and Chief Executive
                                            Officer of Robeks Corporation, a privately held
                                            chain of specialty food stores.
Thomas M. Herzog..........................  Mr. Herzog was appointed Senior Vice President
                                            and Chief Accounting Officer of the Managing
                                            General Partner in February 2004 and of AIMCO in
                                            January 2004. Prior to joining AIMCO, Mr. Herzog
                                            was at GE Real Estate, serving as Chief
                                            Accounting Officer & Global Controller from
                                            April 2002 to January 2004 and as Chief
                                            Technical Advisor from March 2000 to April 2002.
                                            Prior to joining GE Real Estate, Mr. Herzog was
                                            at Deloitte & Touche LLP from 1990 until 2000,
                                            including a two-year assignment in the real
                                            estate national office.
Martha L. Long............................  Martha L. Long has been with AIMCO since October
                                            1998 and served in various capacities. From 1998
                                            to 2001, she served as Senior Vice President and
                                            Controller. During 2002 and 2003, she served as
                                            Senior Vice President of Continuous Improvement.
                                            Most recently, she has been named Chief
                                            Executive Officer and Managing General Partner
                                            of AIMCO's affiliated partnerships.
James N. Bailey...........................  Mr. Bailey was appointed a Director of AIMCO in
Cambridge Associates, Inc.                  June 2000. In 1973, Mr. Bailey co-founded
1 Winthrop Square,                          Cambridge Associates, Inc., which is an
Suite 500                                   investment consulting firm for non-profit
Boston, MA 02110                            institutions and wealthy family groups. He is
                                            also Co-Founder, Treasurer and Director of The
                                            Plymouth Rock Company, Direct Response
                                            Corporation and Homeowners' Direct Corporation,
                                            each of which is a United States personal lines
                                            insurance company. He received his M.B.A. and
                                            J.D. degrees in 1973 from Harvard Business
                                            School and Harvard Law School.
</Table>

                                       I-5

<Table>
                                         
Richard S. Ellwood........................  Mr. Ellwood was appointed a Director of AIMCO in
12 Auldwood Lane                            July 1994 and is currently Chairman of the Audit
Rumson, NJ 07660                            Committee and a member of the Compensation
                                            Committee. Mr. Ellwood is the founder and
                                            President of R.S. Ellwood & Co., Incorporated, a
                                            real estate investment banking firm. Prior to
                                            forming R.S. Ellwood & Co., Incorporated in
                                            1987, Mr. Ellwood had 31 years experience on
                                            Wall Street as an investment banker, serving as:
                                            Managing Director and senior banker at Merrill
                                            Lynch Capital Markets from 1984 to 1987;
                                            Managing Director at Warburg Paribas Becker from
                                            1978 to 1984; general partner and then Senior
                                            Vice President and a director at White, Weld &
                                            Co. from 1968 to 1978; and in various capacities
                                            at J.P. Morgan & Co. from 1955 to 1968. Mr.
                                            Ellwood currently serves as a director of FelCor
                                            Lodging Trust, Incorporated and Florida East
                                            Coast Industries, Inc.
J. Landis Martin..........................  Mr. Martin was appointed a director of AIMCO in
199 Broadway                                July 1994 and became Chairman of the
Suite 4300                                  Compensation Committee on March 19, 1998. Mr.
Denver, CO 80202                            Martin is a member of the Audit Committee. Mr.
                                            Martin has served as President and Chief
                                            Executive Officer of NL Industries, Inc., a
                                            manufacturer of titanium dioxide, since 1987.
                                            Mr. Martin has served as Chairman of Tremont
                                            Corporation ("Tremont"), a holding company
                                            operating though its affiliates Titanium Metals
                                            Corporation ("TIMET") and NL Industries, Inc.
                                            ("NL"), since 1990 and as Chief Executive
                                            Officer and a director of Tremont since 1988.
                                            Mr. Martin has served as Chairman of TIMET, an
                                            integrated producer of titanium, since 1987 and
                                            Chief Executive Officer since January 1995. From
                                            1990 until its acquisition by a predecessor of
                                            Halliburton Company ("Halliburton") in 1994, Mr.
                                            Martin served as Chairman of the Board and Chief
                                            Executive Officer of Baroid Corporation, an
                                            oilfield services company. In addition to
                                            Tremont, NL and TIMET, Mr. Martin is a director
                                            of Halliburton, which is engaged in the
                                            petroleum services, hydrocarbon and engineering
                                            industries, and Crown Castle International
                                            Corporation, a communications company.
Thomas L. Rhodes..........................  Mr. Rhodes was appointed a Director of AIMCO in
215 Lexington Avenue                        July 1994 and is a member of the Audit and
4th Floor                                   Compensation Committees. Mr. Rhodes has served
New York, NY 10016                          as the President and a Director of National
                                            Review magazine since November 1992, where he
                                            has also served as a Director since 1998. From
                                            1976 to 1992, he held various positions at
                                            Goldman, Sachs & Co. and was elected a General
                                            Partner in 1986 and served as a General Partner
                                            from 1987 until November 1992. He is currently
                                            Co-Chairman of the Board, Co-Chief Executive
                                            Officer and a Director of American Land Lease,
                                            Inc. He also serves as a Director of Delphi
                                            Financial Group and its subsidiaries, Delphi
                                            International Ltd., Oracle Reinsurance Company
                                            and the Lynde and Harry Bradley Foundation.
</Table>

                                       I-6

<Table>
                                         
Michael A. Stein..........................  Mr. Stein was elected a Director of AIMCO
22021 20th Avenue SE                        effective October 15, 2004 and is a member of
Bothell, WA 98021                           the Audit, Compensation and Human Resources, and
                                            Nominating and Corporate Governance Committees.
                                            Mr. Stein is currently the Vice President and
                                            Chief Financial Officer of ICOS Corporation. Mr.
                                            Stein was previously Executive Vice President
                                            and Chief Financial Officer of Nordstrom Inc.,
                                            and held a similar position at Marriott
                                            International Inc. Prior to joining Marriott in
                                            1989, he spent 18 years at Arthur Andersen LLP,
                                            where he was a partner and served as head of the
                                            Commercial Group within the Washington, D.C.
                                            Financial Consulting and Audit Division. Mr.
                                            Stein is a certified public accountant.
</Table>

                                       I-7


                                    ANNEX II

              EXECUTIVE SUMMARY OF INDEPENDENT APPRAISER'S REPORT

THE ATTACHED EXECUTIVE SUMMARY WAS PREPARED SOLELY BY THE INDEPENDENT APPRAISER,
AND NEITHER THE COURT, THE PARTIES IN THE CLASS AND DERIVATIVE LITIGATION NOR
COUNSEL FOR SUCH PARTIES PARTICIPATED IN THE PREPARATION OF THE EXECUTIVE
SUMMARY.

                                       II-1


AMERICAN APPRAISAL ASSOCIATES, INC.                     EXECUTIVE SUMMARY PAGE 4
CHAMBERS RIDGE, HARRISBURG, PENNSYLVANIA

                               EXECUTIVE SUMMARY

PART ONE - PROPERTY DESCRIPTION

PROPERTY NAME:                     Chambers Ridge
LOCATION:                          5069 Stacey Drive
                                   Harrisburg, Pennsylvania

INTENDED USE OF ASSIGNMENT:        Court Settlement
PURPOSE OF APPRAISAL:              "As Is" Market Value of the Fee Simple Estate
INTEREST APPRAISED:                Fee simple estate

DATE OF VALUE:                     June 1, 2003
DATE OF REPORT:                    July 16, 2003

PHYSICAL DESCRIPTION - SITE & IMPROVEMENTS:
SITE:
  Size:                            25.34 acres, or 1,103,810 square feet
  Assessor Parcel No.:             63072051
  Floodplain:                      Community Panel No. 420398 0010B (February 3,
                                   1982)
                                   Flood Zone C, an area outside the floodplain.
  Zoning:                          R-S (Residential- Single Family)

BUILDING:
  No. of Units:                    324 Units
  Total NRA:                       314,024 Square Feet
  Average Unit Size:               969 Square Feet
  Apartment Density:               12.8 units per acre
  Year Built:                      1974

UNIT MIX AND MARKET RENT:



                                       GROSS RENTAL INCOME PROJECTION
- --------------------------------------------------------------------------------------
                                           Market Rent
                            Square     -------------------     Monthly        Annual
      Unit Type              Feet      Per Unit     Per SF      Income        Income
      ---------              ----      --------     ------      ------        ------
                                                             
1Br/1Ba - (1A10)               650       $ 580      $ 0.89     $ 30,160     $  361,920
1Br/1Ba - (1B10)               768       $ 640      $ 0.83     $ 38,400     $  460,800
2Br/1.5Ba - (2A15)           1,023       $ 675      $ 0.66     $ 62,100     $  745,200
2Br/2Ba - (2A20)             1,008       $ 700      $ 0.69     $ 25,200     $  302,400
2Br/2Ba - (2B20)             1,235       $ 790      $ 0.64     $ 18,960     $  227,520
3Br/2Ba - (2C20aka3C20)      1,235       $ 825      $ 0.67     $ 49,500     $  594,000
                                                               -----------------------
                                                     Total     $224,320     $2,691,840
                                                               =======================


OCCUPANCY:             89%
ECONOMIC LIFE:         45 Years



AMERICAN APPRAISAL ASSOCIATES, INC.                     EXECUTIVE SUMMARY PAGE 5
CHAMBERS RIDGE, HARRISBURG, PENNSYLVANIA

EFFECTIVE AGE:              13 Years
REMAINING ECONOMIC LIFE:    32 Years
SUBJECT PHOTOGRAPHS AND LOCATION MAP:

                               SUBJECT PHOTOGRAPHS

                [PICTURE]                                 [PICTURE]
     ENTRANCE VIEW OF SUBJECT PROPERTY                  EXTERIOR VIEW

                                    AREA MAP

                                   [AREA MAP]



AMERICAN APPRAISAL ASSOCIATES, INC.                     EXECUTIVE SUMMARY PAGE 6
CHAMBERS RIDGE, HARRISBURG, PENNSYLVANIA

                                NEIGHBORHOOD MAP

                               [NEIGHBORHOOD MAP]

HIGHEST AND BEST USE:
      As Vacant:              Hold for future multi-family development
      As Improved:            Continuation as its current use

METHOD OF VALUATION:          In this instance, the Sales Comparison and Income
                              Approaches to value were utilized.



AMERICAN APPRAISAL ASSOCIATES, INC.                     EXECUTIVE SUMMARY PAGE 7
CHAMBERS RIDGE, HARRISBURG, PENNSYLVANIA

PART TWO - ECONOMIC INDICATORS

INCOME CAPITALIZATION APPROACH



                                                  Amount               $/Unit
                                                  ------               ------
                                                                                
DIRECT CAPITALIZATION
Potential Rental Income                     $        2,691,840        $ 8,308
Effective Gross Income                      $        2,627,774        $ 8,110
Operating Expenses                          $        1,166,407        $ 3,600            44.4% of EGI
Net Operating Income:                       $        1,380,368        $ 4,260

Capitalization Rate                                       9.00%
DIRECT CAPITALIZATION VALUE                 $       15,300,000 *      $47,222 / UNIT

DISCOUNTED CASH FLOW ANALYSIS:
Holding Period                                        10 years
2002 Economic Vacancy                                        9%
Stabilized Vacancy & Collection Loss:                        9%
Lease-up / Stabilization Period                            N/A
Terminal Capitalization Rate                             10.00%
Discount Rate                                            11.50%
Selling Costs                                             2.00%
Growth Rates:
  Income                                                  3.00%
  Expenses:                                               3.00%
DISCOUNTED CASH FLOW VALUE                         $15,600,000 *      $48,148 / UNIT

RECONCILED INCOME CAPITALIZATION VALUE      $       15,500,000        $47,840 / UNIT

SALES COMPARISON APPROACH

PRICE PER UNIT:
  Range of Sales $/Unit (Unadjusted)        $31,303 to $61,000
  Range of Sales $/Unit (Adjusted)          $48,833 to $63,135
VALUE INDICATION - PRICE PER UNIT           $       16,800,000 *      $51,852 / UNIT

EGIM ANALYSIS
  Range of EGIMs from Improved Sales              4.76 to 5.25
  Selected EGIM for Subject                               6.00
  Subject's Projected EGI                   $        2,627,774
EGIM ANALYSIS CONCLUSION                    $       15,800,000 *      $48,765 / UNIT

NOI PER UNIT ANALYSIS CONCLUSION            $       15,600,000 *      $48,148 / UNIT

RECONCILED SALES COMPARISON VALUE           $       16,000,000        $49,383 / UNIT


_______________________

* Value indications are after adjustments for concessions, deferred maintenance,
excess land and lease-up costs, if any.



AMERICAN APPRAISAL ASSOCIATES, INC.                     EXECUTIVE SUMMARY PAGE 8
CHAMBERS RIDGE, HARRISBURG, PENNSYLVANIA

PART THREE - SUMMARY OF VALUE CONCLUSIONS


                                                        
SALES COMPARISON APPROACH:
  Price Per Unit                            $ 16,800,000
  NOI Per Unit                              $ 15,600,000
  EGIM Multiplier                           $ 15,800,000
INDICATED VALUE BY SALES COMPARISON         $ 16,000,000      $49,383 / UNIT

INCOME APPROACH:
  Direct Capitalization Method:             $ 15,300,000
  Discounted Cash Flow Method:              $ 15,600,000
INDICATED VALUE BY THE INCOME APPROACH      $ 15,500,000      $47,840 / UNIT

RECONCILED OVERALL VALUE CONCLUSION:        $ 15,500,000      $47,840 / UNIT




AMERICAN APPRAISAL ASSOCIATES, INC.                     EXECUTIVE SUMMARY PAGE 4
HUNTERS GLEN APARTMENTS IV, PLAINSBORO, NEW JERSEY

                               EXECUTIVE SUMMARY

PART ONE - PROPERTY DESCRIPTION

PROPERTY NAME:                 Hunters Glen Apartments IV
LOCATION:                      1109 Hunter Glen Drive
                               Plainsboro, New Jersey

INTENDED USE OF ASSIGNMENT:    Court Settlement

PURPOSE OF APPRAISAL:          "As Is" Market Value of the Fee Simple Estate

INTEREST APPRAISED:            Fee Simple

DATE OF VALUE:                 June 3, 2003
DATE OF REPORT:                July 16, 2003

PHYSICAL DESCRIPTION - SITE & IMPROVEMENTS:
SITE:
  Size:                        15.25 acres, or 664,290 square feet
  Assessor Parcel No.:         Block 10, Lot 42.01
  Floodplain:                  Community Panel No. 340275-0004B (June 19, 1985)
                               Flood Zone C, an area outside the floodplain.

  Zoning:                      PCD (Planned Unit Development)

BUILDING:
  No. of Units:                264 Units
  Total NRA:                   193,900 Square Feet
  Average Unit Size:           734 Square Feet
  Apartment Density:           17.3 units per acre
  Year Built:                  1976

UNIT MIX AND MARKET RENT:

                         GROSS RENTAL INCOME PROJECTION



                                    Market Rent
                       Square   -------------------     Monthly      Annual
Unit Type               Feet    Per Unit     Per SF     Income       Income
- -----------------------------------------------------------------------------
                                                    
1 Bedroom, 1 Bath       675      $  853      $1.26     $162,923    $1,955,076
2 Bedroom, 1 Bath       855      $1,154      $1.35     $ 47,314    $  567,768
2 Bedroom, 1.5 Bath     935      $1,239      $1.33     $ 39,648    $  475,776
                                             Total     $249,885    $2,998,620



                                       
OCCUPANCY:                                92%
ECONOMIC LIFE:                            45 Years
EFFECTIVE AGE:                            24 Years
REMAINING ECONOMIC LIFE:                  21 Years
SUBJECT PHOTOGRAPHS AND LOCATION MAP:




AMERICAN APPRAISAL ASSOCIATES, INC.                     EXECUTIVE SUMMARY PAGE 5
HUNTERS GLEN APARTMENTS IV, PLAINSBORO, NEW JERSEY

                               SUBJECT PHOTOGRAPHS

                 [PICTURE]                            [PICTURE]

               EXTERIOR VIEW                      EXTERIOR POOL SIDE

                                    AREA MAP

                                     [MAP]



AMERICAN APPRAISAL ASSOCIATES, INC.                     EXECUTIVE SUMMARY PAGE 6
HUNTERS GLEN APARTMENTS IV, PLAINSBORO, NEW JERSEY

                                NEIGHBORHOOD MAP

                                     [MAP]

HIGHEST AND BEST USE:
  As Vacant:                   Hold for future multi-family development
  As Improved:                 Continuation as its current use

METHOD OF VALUATION:           In this instance, the Sales Comparison and Income
                               Approaches to value were utilized.



AMERICAN APPRAISAL ASSOCIATES, INC.                     EXECUTIVE SUMMARY PAGE 7
HUNTERS GLEN APARTMENTS IV, PLAINSBORO, NEW JERSEY

PART TWO - ECONOMIC INDICATORS

INCOME CAPITALIZATION APPROACH



                                             Amount                   $/Unit
                                             ------                   ------
                                                                           
DIRECT CAPITALIZATION
Potential Rental Income                    $2,998,620             $11,358
Effective Gross Income                     $3,032,543             $11,487
Operating Expenses                         $1,194,691             $ 4,525           39.4% of EGI
Net Operating Income:                      $1,771,852             $ 6,712

Capitalization Rate                        8.50%
DIRECT CAPITALIZATION VALUE                $20,800,000 *          $78,788 / UNIT

DISCOUNTED CASH FLOW ANALYSIS:
Holding Period                             10 years
2002 Economic Vacancy                      7%
Stabilized Vacancy & Collection Loss:      6%
Lease-up / Stabilization Period            N/A
Terminal Capitalization Rate               9.50%
Discount Rate                              11.00%
Selling Costs                              2.00%
Growth Rates:
   Income                                  3.00%
   Expenses:                               3.00%
DISCOUNTED CASH FLOW VALUE                 $21,000,000 *          $79,545 / UNIT

RECONCILED INCOME CAPITALIZATION VALUE     $21,000,000            $79,545 / UNIT

SALES COMPARISON APPROACH

PRICE PER UNIT:
   Range of Sales $/Unit (Unadjusted)      $47,000 to $100,000
   Range of Sales $/Unit (Adjusted)        $73,853 to $93,500
VALUE INDICATION - PRICE PER UNIT          $21,100,000 *          $79,924 / UNIT

EGIM ANALYSIS
   Range of EGIMs from Improved Sales      5.96 to 8.13
   Selected EGIM for Subject               7.00
   Subject's Projected EGI                 $3,032,543
EGIM ANALYSIS CONCLUSION                   $21,200,000 *          $80,303 / UNIT

NOI PER UNIT ANALYSIS CONCLUSION           $21,100,000 *          $79,924 / UNIT

RECONCILED SALES COMPARISON VALUE          $21,100,000            $79,924 / UNIT


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

* Value indications are after adjustments for concessions, deferred maintenance,
excess land and lease-up costs, if any.



AMERICAN APPRAISAL ASSOCIATES, INC.                     EXECUTIVE SUMMARY PAGE 8
HUNTERS GLEN APARTMENTS IV, PLAINSBORO, NEW JERSEY

PART THREE - SUMMARY OF VALUE CONCLUSIONS


                                                            
SALES COMPARISON APPROACH:
   Price Per Unit                          $21,100,000
   NOI Per Unit                            $21,100,000
   EGIM Multiplier                         $21,200,000
INDICATED VALUE BY SALES COMPARISON        $21,100,000            $79,924 / UNIT

INCOME APPROACH:
   Direct Capitalization Method:           $20,800,000
   Discounted Cash Flow Method:            $21,000,000
INDICATED VALUE BY THE INCOME APPROACH     $21,000,000            $79,545 / UNIT

RECONCILED OVERALL VALUE CONCLUSION:       $21,000,000            $79,545 / UNIT




AMERICAN APPRAISAL ASSOCIATES, INC.                     EXECUTIVE SUMMARY PAGE 4
HUNTERS GLEN APARTMENTS V, PLAINSBORO, NEW JERSEY

                                EXECUTIVE SUMMARY

PART ONE - PROPERTY DESCRIPTION

PROPERTY NAME:                                    Hunters Glen Apartments V
LOCATION:                                         1109 Hunter Glen Drive
                                                  Plainsboro, New Jersey

INTENDED USE OF ASSIGNMENT:                       Court Settlement
PURPOSE OF APPRAISAL:                             "As Is" Market Value of the
                                                  Fee Simple Estate
INTEREST APPRAISED:                               Fee Simple

DATE OF VALUE:                                    June 3, 2003
DATE OF REPORT:                                   July 16, 2003

PHYSICAL DESCRIPTION - SITE & IMPROVEMENTS:
SITE:
      Size:                                       17.438 acres, or 759,599
                                                  square feet
      Assessor Parcel No.:                        Block 10, Lot 44
      Floodplain:                                 Community Panel No.
                                                  340275-0004B (June 19, 1985)
                                                  Flood Zone C, an area outside
                                                  the floodplain.
     Zoning:                                      PCD (Planned Unit Development)

BUILDING:
      No. of Units:                               304 Units
      Total NRA:                                  222,160 Square Feet
      Average Unit Size:                          731 Square Feet
      Apartment Density:                          17.4 units per acre
      Year Built:                                 1976

UNIT MIX AND MARKET RENT:

                         GROSS RENTAL INCOME PROJECTION



                                            Market Rent
                         Square             -----------            Monthly         Annual
     Unit Type            Feet        Per Unit        Per SF       Income          Income
     ---------            ----        --------        ------       ------          ------
                                                                  
1 Bedroom, 1 Bath         675          $  853         $ 1.26      $191,072       $2,292,864
2 Bedroom, 1 Bath         855          $1,154         $ 1.35      $ 55,392       $  664,704
2 Bedroom, 1.5 Bath       935          $1,239         $ 1.33      $ 39,648       $  475,776
                                                                  -------------------------
                                                      Total       $286,112       $3,433,344
                                                                  =========================


OCCUPANCY:                    90%
ECONOMIC LIFE:                45 Years
EFFECTIVE AGE:                24 Years
REMAINING ECONOMIC LIFE:      21 Years
SUBJECT PHOTOGRAPHS AND LOCATION MAP:



AMERICAN APPRAISAL ASSOCIATES, INC.                     EXECUTIVE SUMMARY PAGE 5
HUNTERS GLEN APARTMENTS V, PLAINSBORO, NEW JERSEY

                               SUBJECT PHOTOGRAPHS

[EXTERIOR BUILDING PICTURE]                           [PARKING LOT VIEW PICTURE]

                                    AREA MAP

                                      [MAP]



AMERICAN APPRAISAL ASSOCIATES, INC.                     EXECUTIVE SUMMARY PAGE 6
HUNTERS GLEN APARTMENTS V, PLAINSBORO, NEW JERSEY

                                NEIGHBORHOOD MAP

                                      [MAP]
HIGHEST AND BEST USE:
   As Vacant:                      Hold for future multi-family development
   As Improved:                    Continuation as its current use

METHOD OF VALUATION:               In this instance, the Sales Comparison and
                                   Income Approaches to value were utilized.



AMERICAN APPRAISAL ASSOCIATES, INC.                     EXECUTIVE SUMMARY PAGE 7
HUNTERS GLEN APARTMENTS V, PLAINSBORO, NEW JERSEY

PART TWO - ECONOMIC INDICATORS

INCOME CAPITALIZATION APPROACH



DIRECT CAPITALIZATION                              Amount                     $/Unit
- ---------------------                              ------                     ------
                                                                                      
Potential Rental Income                         $3,433,344                $11,294
Effective Gross Income                          $3,473,583                $11,426
Operating Expenses                              $1,374,783                $4,522               39.6% of EGI
Net Operating Income:                           $2,022,800                $6,654

Capitalization Rate                             8.00%
DIRECT CAPITALIZATION VALUE                     $25,200,000 *             $82,895 / UNIT

DISCOUNTED CASH FLOW ANALYSIS:
Holding Period                                  10 years
2002 Economic Vacancy                           6%
Stabilized Vacancy & Collection Loss:           6%
Lease-up / Stabilization Period                 N/A
Terminal Capitalization Rate                    9.00%
Discount Rate                                   11.00%
Selling Costs                                   2.00%
Growth Rates:
   Income                                       3.00%
   Expenses:                                    3.00%
DISCOUNTED CASH FLOW VALUE                      $24,500,000 *             $80,592 / UNIT

RECONCILED INCOME CAPITALIZATION VALUE          $25,000,000               $82,237 / UNIT


SALES COMPARISON APPROACH


                                                                    
PRICE PER UNIT:
   Range of Sales $/Unit (Unadjusted)           $47,000 to $100,000
   Range of Sales $/Unit (Adjusted)             $73,853 to $94,587
VALUE INDICATION - PRICE PER UNIT               $25,500,000 *             $83,882 / UNIT

EGIM ANALYSIS
   Range of EGIMs from Improved Sales           5.96 to 8.13
   Selected EGIM for Subject                    7.50
   Subject's Projected EGI                      $3,473,583
EGIM ANALYSIS CONCLUSION                        $26,000,000 *             $85,526 / UNIT

NOI PER UNIT ANALYSIS CONCLUSION                $25,200,000 *             $82,895 / UNIT

RECONCILED SALES COMPARISON VALUE               $25,500,000               $83,882 / UNIT


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

* Value indications are after adjustments for concessions, deferred maintenance,
excess land and lease-up costs, if any.



AMERICAN APPRAISAL ASSOCIATES, INC.                     EXECUTIVE SUMMARY PAGE 8
HUNTERS GLEN APARTMENTS V, PLAINSBORO, NEW JERSEY

PART THREE - SUMMARY OF VALUE CONCLUSIONS


                                                             
SALES COMPARISON APPROACH:
   Price Per Unit                               $25,500,000
   NOI Per Unit                                 $25,200,000
   EGIM Multiplier                              $26,000,000
INDICATED VALUE BY SALES COMPARISON             $25,500,000        $83,882 / UNIT

INCOME APPROACH:
   Direct Capitalization Method:                $25,200,000
   Discounted Cash Flow Method:                 $24,500,000
INDICATED VALUE BY THE INCOME APPROACH          $25,000,000        $82,237 / UNIT

RECONCILED OVERALL VALUE CONCLUSION:            $25,000,000        $82,237 / UNIT




AMERICAN APPRAISAL ASSOCIATES, INC.                     EXECUTIVE SUMMARY PAGE 4
HUNTERS GLEN APARTMENTS VI, PLAINSBORO, NEW JERSEY

                                EXECUTIVE SUMMARY

PART ONE - PROPERTY DESCRIPTION

PROPERTY NAME:                  Hunters Glen Apartments VI
LOCATION:                       1109 Hunter Glen Drive
                                Plainsboro, New Jersey

INTENDED USE OF ASSIGNMENT:     Court Settlement
PURPOSE OF APPRAISAL:           "As Is" Market Value of the Fee Simple Estate
INTEREST APPRAISED:             Fee Simple

DATE OF VALUE:                  June 3, 2003
DATE OF REPORT:                 July 16, 2003

PHYSICAL DESCRIPTION - SITE & IMPROVEMENTS:
SITE:

  Size:                         20.056 acres, or 873,639 square feet
  Assessor Parcel No.:          Block 10, Lot 45
  Floodplain:                   Community Panel No. 340275-0004B (June 19, 1985)
                                Flood Zone C, an area outside the floodplain.
  Zoning:                       PCD (Planned Unit Development)

BUILDING:
      No. of Units:             328 Units
      Total NRA:                235,480 Square Feet
      Average Unit Size:        718 Square Feet
      Apartment Density:        16.4 units per acre
      Year Built:               1977

UNIT MIX AND MARKET RENT:

                         GROSS RENTAL INCOME PROJECTION



                                          Market Rent
                          Square    --------------------     Monthly      Annual
   Unit Type               Feet     Per Unit      Per SF     Income       Income
   ---------              ------    --------      ------    ---------   ----------
                                                         
1 Bedroom, 1 Bath          675      $    853      $1.26     $ 225,192   $2,702,304
2 Bedroom, 1 Bath          855      $  1,154      $1.35     $  36,928   $  443,136
2 Bedroom, 1.5 Bath        935      $  1,239      $1.33     $  39,648   $  475,776
                                                  -----     ---------   ----------
                                                  Total     $ 301,768   $3,621,216
                                                  =====     =========   ==========


OCCUPANCY:                                     90%
ECONOMIC LIFE:                                 45 Years
EFFECTIVE AGE:                                 24 Years
REMAINING ECONOMIC LIFE:                       21 Years
SUBJECT PHOTOGRAPHS AND LOCATION MAP:



AMERICAN APPRAISAL ASSOCIATES, INC.                     EXECUTIVE SUMMARY PAGE 5
HUNTERS GLEN APARTMENTS VI, PLAINSBORO, NEW JERSEY

                              SUBJECT PHOTOGRAPHS

             [PICTURE]                                    [PICTURE]

             EXTERIOR                                     POOL AREA

                                    AREA MAP

                                     [MAP]



AMERICAN APPRAISAL ASSOCIATES, INC.                     EXECUTIVE SUMMARY PAGE 6
HUNTERS GLEN APARTMENTS VI, PLAINSBORO, NEW JERSEY

                               NEIGHBORHOOD MAP

                                     [MAP]

HIGHEST AND BEST USE:
  As Vacant:                       Hold for future multi-family development
  As Improved:                     Continuation as its current use

METHOD OF VALUATION:               In this instance, the Sales Comparison
                                   and Income Approaches to value were utilized.



AMERICAN APPRAISAL ASSOCIATES, INC.                     EXECUTIVE SUMMARY PAGE 7
HUNTERS GLEN APARTMENTS VI, PLAINSBORO, NEW JERSEY

PART TWO - ECONOMIC INDICATORS

INCOME CAPITALIZATION APPROACH



        DIRECT CAPITALIZATION                                    Amount              $/Unit
        ---------------------                                    ------              ------
                                                                                           
Potential Rental Income                                    $3,621,216             $11,040
Effective Gross Income                                     $3,705,835             $11,298
Operating Expenses                                         $1,481,220             $4,516            40.0% of EGI
Net Operating Income:                                      $2,142,615             $6,532

Capitalization Rate                                        8.00%
DIRECT CAPITALIZATION VALUE                                $26,700,000 *          $81,402 / UNIT

DISCOUNTED CASH FLOW ANALYSIS:
Holding Period                                             10 years
2002 Economic Vacancy                                      7%
Stabilized Vacancy & Collection Loss:                      5%
Lease-up / Stabilization Period                            N/A
Terminal Capitalization Rate                              9.00%
Discount Rate                                              11.00%
Selling Costs                                              2.00%
Growth Rates:
        Income                                             3.00%
        Expenses:                                          3.00%
DISCOUNTED CASH FLOW VALUE                                 $26,000,000 *          $79,268 / UNIT

RECONCILED INCOME CAPITALIZATION VALUE                     $26,500,000            $80,793 / UNIT

SALES COMPARISON APPROACH

PRICE PER UNIT:
        Range of Sales $/Unit (Unadjusted)                 $47,000 to $100,000
        Range of Sales $/Unit (Adjusted)                   $73,853 to $93,500
VALUE INDICATION - PRICE PER UNIT                          $27,200,000 *          $82,927 / UNIT

EGIM ANALYSIS
        Range of EGIMs from Improved Sales                 5.96 to 8.13
        Selected EGIM for Subject                          7.50
        Subject's Projected EGI                            $3,705,835
EGIM ANALYSIS CONCLUSION                                   $27,700,000 *          $84,451 / UNIT

NOI PER UNIT ANALYSIS CONCLUSION                           $27,200,000 *          $82,927 / UNIT

RECONCILED SALES COMPARISON VALUE                          $27,500,000            $83,841 / UNIT


- -------------------
* Value indications are after adjustments for concessions, deferred maintenance,
excess land and lease-up costs, if any.



AMERICAN APPRAISAL ASSOCIATES, INC.                     EXECUTIVE SUMMARY PAGE 8
HUNTERS GLEN APARTMENTS VI, PLAINSBORO, NEW JERSEY

PART THREE - SUMMARY OF VALUE CONCLUSIONS


                                                                            
SALES COMPARISON APPROACH:
   Price Per Unit                                          $27,200,000
   NOI Per Unit                                            $27,200,000
   EGIM Multiplier                                         $27,700,000
INDICATED VALUE BY SALES COMPARISON                        $27,500,000            $83,841 / UNIT

INCOME APPROACH:
   Direct Capitalization Method:                           $26,700,000
   Discounted Cash Flow Method:                            $26,000,000
INDICATED VALUE BY THE INCOME APPROACH                     $26,500,000            $80,793 / UNIT

RECONCILED OVERALL VALUE CONCLUSION:                       $27,000,000            $82,317 / UNIT




AMERICAN APPRAISAL ASSOCIATES, INC.                     EXECUTIVE SUMMARY PAGE 4
PICKWICK PLACE, INDIANAPOLIS, INDIANA

                                EXECUTIVE SUMMARY

PART ONE - PROPERTY DESCRIPTION

PROPERTY NAME:                 Pickwick Place
LOCATION:                      1130 Racquet Club North
                               Indianapolis, Indiana

INTENDED USE OF ASSIGNMENT:    Court Settlement
PURPOSE OF APPRAISAL:          "As Is" Market Value of the Fee Simple Estate
INTEREST APPRAISED:            Fee simple estate

DATE OF VALUE:                 May 7, 2003
DATE OF REPORT:                June 27, 2003

PHYSICAL DESCRIPTION - SITE & IMPROVEMENTS:
SITE:
      Size:                    45.362 acres, or 1,975,969 square feet
      Assessor Parcel No.:     006523
      Floodplain:              Community Panel No. 18097C0041 (January 5, 2001)
                               Flood Zone X, an area outside the floodplain.
      Zoning:                  D-6 (Medium Density Multifamily District)

BUILDING:
      No. of Units:            336 Units
      Total NRA:               347,620 Square Feet
      Average Unit Size:       1,035 Square Feet
      Apartment Density:       7.4 units per acre
      Year Built:              1975

UNIT MIX AND MARKET RENT:

                         GROSS RENTAL INCOME PROJECTION



                                             Market Rent
                          Square         --------------------      Monthly          Annual
   Unit Type               Feet          Per Unit      Per SF      Income           Income
- --------------------------------------------------------------------------------------------
                                                                   
1Br/1Ba - 1A10              753            $530        $0.70      $ 19,080        $  228,960
1Br/1Ba - 1A15              942            $600        $0.64      $ 21,600        $  259,200
2Br/2Ba - 2A20              905            $600        $0.66      $ 64,800        $  777,600
2Br/2Ba - 2A15            1,137            $690        $0.61      $ 22,080        $  264,960
2Br/2Ba - 2A25            1,215            $700        $0.58      $ 75,600        $  907,200
3Br/2Ba - 3A20            1,157            $710        $0.61      $  5,680        $   68,160
3Br/2Ba - 2A25            1,500            $840        $0.56      $  6,720        $   80,640
                                                       -------------------------------------
                                                       Total      $215,560        $2,586,720


OCCUPANCY:                     93%
ECONOMIC LIFE:                 45 Years



AMERICAN APPRAISAL ASSOCIATES, INC.                     EXECUTIVE SUMMARY PAGE 5
PICKWICK PLACE, INDIANAPOLIS, INDIANA

EFFECTIVE AGE:                25 Years
REMAINING ECONOMIC LIFE:      20 Years

SUBJECT PHOTOGRAPHS AND LOCATION MAP:

                               SUBJECT PHOTOGRAPHS

            [PICTURE]                                      [PICTURE]

  EXTERIOR - APARTMENT BUILDING                    EXTERIOR - APARTMENT UNIT

                                    AREA MAP

                                      [MAP]



AMERICAN APPRAISAL ASSOCIATES, INC.                     EXECUTIVE SUMMARY PAGE 6
PICKWICK PLACE, INDIANAPOLIS, INDIANA

                                NEIGHBORHOOD MAP

                                     [MAP]

HIGHEST AND BEST USE:

      As Vacant:               Hold for future multi-family development
      As Improved:             Continuation as its current use

METHOD OF VALUATION:           In this instance, the Sales Comparison and Income
                               Approaches to value were utilized.



AMERICAN APPRAISAL ASSOCIATES, INC.                     EXECUTIVE SUMMARY PAGE 7
PICKWICK PLACE, INDIANAPOLIS, INDIANA

PART TWO - ECONOMIC INDICATORS

INCOME CAPITALIZATION APPROACH



                                                     Amount                 $/Unit
                                                     ------                 ------
                                                                                     
DIRECT CAPITALIZATION
Potential Rental Income                              $2,586,720             $ 7,699
Effective Gross Income                               $2,478,571             $ 7,377
Operating Expenses                                   $1,251,282             $ 3,724           50.5% of EGI
Net Operating Income:                                $1,143,289             $ 3,403

Capitalization Rate                                  7.75%
DIRECT CAPITALIZATION VALUE                          $14,600,000  *         $43,452 / UNIT

DISCOUNTED CASH FLOW ANALYSIS:

Holding Period                                       10 years
2002 Economic Vacancy                                15%
Stabilized Vacancy & Collection Loss:                9%
Lease-up / Stabilization Period                      N/A
Terminal Capitalization Rate                         8.25%
Discount Rate                                        10.50%
Selling Costs                                        2.00%
Growth Rates:
       Income                                        3.00%
       Expenses:                                     3.00%
DISCOUNTED CASH FLOW VALUE                           $14,800,000  *         $44,048 / UNIT

RECONCILED INCOME CAPITALIZATION VALUE               $14,700,000            $43,750 / UNIT

SALES COMPARISON APPROACH

PRICE PER UNIT:
       Range of Sales $/Unit (Unadjusted)            $34,268 to $61,397
       Range of Sales $/Unit (Adjusted)              $34,268 to $51,574
VALUE INDICATION - PRICE PER UNIT                    $14,700,000  *         $43,750 / UNIT

EGIM ANALYSIS
       Range of EGIMs from Improved Sales            5.43 to 7.19
       Selected EGIM for Subject                     6.25
       Subject's Projected EGI                       $2,478,571
EGIM ANALYSIS CONCLUSION                             $15,400,000  *         $45,833 / UNIT

NOI PER UNIT ANALYSIS CONCLUSION                     $14,300,000  *         $42,560 / UNIT

RECONCILED SALES COMPARISON VALUE                    $14,800,000            $44,048 / UNIT


- ------------------------
* Value indications are after adjustments for concessions, deferred maintenance,
excess land and lease-up costs, if any.



AMERICAN APPRAISAL ASSOCIATES, INC.                     EXECUTIVE SUMMARY PAGE 8
PICKWICK PLACE, INDIANAPOLIS, INDIANA

PART THREE - SUMMARY OF VALUE CONCLUSIONS


                                                                   
SALES COMPARISON APPROACH:
      Price Per Unit                                 $14,700,000
      NOI Per Unit                                   $14,300,000
      EGIM Multiplier                                $15,400,000
INDICATED VALUE BY SALES COMPARISON                  $14,800,000         $44,048 / UNIT

INCOME APPROACH:
      Direct Capitalization Method:                  $14,600,000
      Discounted Cash Flow Method:                   $14,800,000
INDICATED VALUE BY THE INCOME APPROACH               $14,700,000         $43,750 / UNIT

RECONCILED OVERALL VALUE CONCLUSION:                 $14,800,000         $44,048 / UNIT




AMERICAN APPRAISAL ASSOCIATES, INC.                     EXECUTIVE SUMMARY PAGE 4
TWIN LAKE TOWERS APARTMENTS, WESTMONT, ILLINOIS

                                EXECUTIVE SUMMARY

PART ONE - PROPERTY DESCRIPTION

PROPERTY NAME:                     Twin Lake Towers Apartments
LOCATION:                          816 South Adams Street
                                   Westmont, Illinois

INTENDED USE OF ASSIGNMENT:        Court Settlement
PURPOSE OF APPRAISAL:              "As Is" Market Value of the Fee Simple Estate

INTEREST APPRAISED:                Fee simple estate

DATE OF VALUE:                     May 28, 2003
DATE OF REPORT:                    June 28, 2003

PHYSICAL DESCRIPTION - SITE & IMPROVEMENTS:
SITE:
     Size:                         16.6721 acres, or 726,237 square feet
     Assessor Parcel No.:          09-16-400-003
     Floodplain:                   Community Panel No. 1702200001B (January 16,
                                   1981)
                                   Flood Zone C and A1, an area inside the
                                   floodplain.
     Zoning:                       R-5 (General Residence single family,
                                   two-family, multi-family)

BUILDING:
     No. of Units:                 399 Units
     Total NRA:                    345,600 Square Feet
     Average Unit Size:            866 Square Feet
     Apartment Density:            23.9 units per acre
     Year Built:                   1969

UNIT MIX AND MARKET RENT:

                         GROSS RENTAL INCOME PROJECTION



                              Market Rent
                  Square   -----------------   Monthly     Annual
   Unit Type       Feet    Per Unit   Per SF   Income      Income
   ---------       ----    --------   ------   ------      ------
                                          
1Br/1Ba - 1A10       800   $    700   $ 0.88  $ 201,600  $ 2,419,200
2Br/1.5Ba - 2A15   1,025   $  1,000   $ 0.98  $ 108,000  $ 1,296,000
3Br/2Ba - 3A20     1,500   $  1,200   $ 0.80  $   3,600  $    43,200
                                      Total   $ 313,200  $ 3,758,400


OCCUPANCY:                          86%
ECONOMIC LIFE:                      45 Years
EFFECTIVE AGE:                      25 Years
REMAINING ECONOMIC LIFE:            20 Years



AMERICAN APPRAISAL ASSOCIATES, INC.                     EXECUTIVE SUMMARY PAGE 5
TWIN LAKE TOWERS APARTMENTS, WESTMONT, ILLINOIS

SUBJECT PHOTOGRAPHS AND LOCATION MAP:

                               SUBJECT PHOTOGRAPHS

             [PICTURE]                                    [PICTURE]

    SUBJECT PROPERTY BUILDING 1                  SUBJECT PROPERTY BUILDING 2

                                    AREA MAP

                                      [MAP]



AMERICAN APPRAISAL ASSOCIATES, INC.                     EXECUTIVE SUMMARY PAGE 6
TWIN LAKE TOWERS APARTMENTS, WESTMONT, ILLINOIS

                                NEIGHBORHOOD MAP

                                      [MAP]

HIGHEST AND BEST USE:
     As Vacant:                     Hold for future multi-family development
     As Improved:                   Continuation as its current use

METHOD OF VALUATION:                In this instance, the Sales Comparison and
                                    Income Approaches to value were utilized.



AMERICAN APPRAISAL ASSOCIATES, INC.                     EXECUTIVE SUMMARY PAGE 7
TWIN LAKE TOWERS APARTMENTS, WESTMONT, ILLINOIS

PART TWO - ECONOMIC INDICATORS

INCOME CAPITALIZATION APPROACH



DIRECT CAPITALIZATION                      Amount              $/Unit
- ---------------------                      ------              ------
                                                                     
Potential Rental Income                 $3,758,400          $9,420
Effective Gross Income                  $3,808,527          $9,545
Operating Expenses                      $1,550,257          $3,885            40.7% of EGI
Net Operating Income:                   $2,138,570          $5,360

Capitalization Rate                     8.25%
DIRECT CAPITALIZATION VALUE             $25,700,000 *       $64,411 / UNIT

DISCOUNTED CASH FLOW ANALYSIS:
Holding Period                          10 years
2002 Economic Vacancy                   12%
Stabilized Vacancy & Collection Loss:   7%
Lease-up / Stabilization Period         12 months
Terminal Capitalization Rate            8.75%
Discount Rate                           11.00%
Selling Costs                           2.00%
Growth Rates:
  Income                                3.00%
  Expenses:                             3.00%
DISCOUNTED CASH FLOW VALUE              $26,100,000 *       $65,414 / UNIT

RECONCILED INCOME CAPITALIZATION VALUE  $25,900,000         $64,912 / UNIT


SALES COMPARISON APPROACH


                                                      
PRICE PER UNIT:
  Range of Sales $/Unit (Unadjusted)    $64,615 to $90,857
  Range of Sales $/Unit (Adjusted)      $58,154 to $68,143
VALUE INDICATION - PRICE PER UNIT       $24,900,000 *       $62,406 / UNIT

EGIM ANALYSIS
  Range of EGIMs from Improved Sales    6.76 to 7.61
  Selected EGIM for Subject             6.75
  Subject's Projected EGI               $3,808,527
EGIM ANALYSIS CONCLUSION                $25,500,000 *       $63,910 / UNIT

NOI PER UNIT ANALYSIS CONCLUSION        $25,700,000 *       $64,411 / UNIT

RECONCILED SALES COMPARISON VALUE       $25,400,000         $63,659 / UNIT


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

* Value indications are after adjustments for concessions, deferred maintenance,
excess land and lease-up costs, if any.



AMERICAN APPRAISAL ASSOCIATES, INC.                     EXECUTIVE SUMMARY PAGE 8
TWIN LAKE TOWERS APARTMENTS, WESTMONT, ILLINOIS

PART THREE - SUMMARY OF VALUE CONCLUSIONS


                                                      
SALES COMPARISON APPROACH:
  Price Per Unit                        $24,900,000
  NOI Per Unit                          $25,700,000
  EGIM Multiplier                       $25,500,000
INDICATED VALUE BY SALES COMPARISON     $25,400,000         $63,659 / UNIT

INCOME APPROACH:
  Direct Capitalization Method:         $25,700,000
  Discounted Cash Flow Method:          $26,100,000
INDICATED VALUE BY THE INCOME APPROACH  $25,900,000         $64,912 / UNIT

RECONCILED OVERALL VALUE CONCLUSION:    $25,700,000         $64,411 / UNIT




     Questions and requests for assistance or for additional copies of this
Litigation Settlement Offer and the letter of transmittal may be directed to the
Information Agent at its telephone number and address listed below. You may also
contact your broker, dealer, bank, trust company or other nominee for assistance
concerning the offer.

                      The Information Agent for offer is:

                             THE ALTMAN GROUP, INC.

                                    By Mail:

                                  P.O. Box 238
                              Lyndhurst, NJ 07071

                             By Overnight Courier:

                            1275 Valley Brook Avenue
                              Lyndhurst, NJ 07071

                                    By Hand:

                            1275 Valley Brook Avenue
                              Lyndhurst, NJ 07071

                         For information, please call:

                                 By Telephone:

                           TOLL FREE: (800) 467-0821

                                    By Fax:

                                 (201) 460-0050