-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IoGe6mV3OOEu3sYc1/N7GKMfcUcU6vgZXU6Mkv6VtPzH8QX1dv0isJjB6HziByUe B22T5L/+V5b6h+g/Fu54hQ== 0000720460-97-000012.txt : 19970806 0000720460-97-000012.hdr.sgml : 19970806 ACCESSION NUMBER: 0000720460-97-000012 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970805 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ANGELES INCOME PROPERTIES LTD III CENTRAL INDEX KEY: 0000720460 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 953903984 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-13192 FILM NUMBER: 97651476 BUSINESS ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLZ STREET 2: PO BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 BUSINESS PHONE: 8032391000 MAIL ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLAZA STREET 2: P.O. BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 10QSB 1 FORM 10-QSB.--QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 U.S. Securities and Exchange Commission Washington, D.C. 20549 FORM 10-QSB [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1997 or [ ] TRANSITION REPORT PURSUANT TO 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT For the transition period.........to......... Commission file number 0-13192 ANGELES INCOME PROPERTIES LTD. III (Exact name of small business issuer as specified in its charter) California 95-3903984 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) One Insignia Financial Plaza Greenville, South Carolina 29602 (Address of principal executive offices) (Zip Code) (864) 239-1000 Issuer's telephone number Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS a) ANGELES INCOME PROPERTIES. LTD. III CONSOLIDATED BALANCE SHEET (Unaudited) (in thousands, except unit data) June 30, 1997
Assets Cash and cash equivalents: Unrestricted $ 1,356 Restricted--tenant security deposits 45 Investment in joint venture 1,059 Accounts receivable, less allowance for doubtful accounts of $17 29 Escrow for taxes 139 Other assets 260 Restricted escrows 219 Investment properties: Land Buildings and related personal property $ 1,527 12,844 14,371 Less accumulated depreciation (8,915) 5,456 $ 8,563 Liabilities and Partners' Capital Liabilities Accounts payable $ 68 Tenant security deposits 47 Accrued taxes 22 Other liabilities 55 Mortgage note payable 3,777 Partners' (Deficit) Capital General partners $ (330) Limited partners capital (86,778 units issued and outstanding) 4,924 4,594 $ 8,563 See Accompanying Notes to Consolidated Financial Statements
b) ANGELES INCOME PROPERTIES, LTD. III CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except unit data)
Three Months Ended Six Months Ended June 30, June 30, 1997 1996 1997 1996 Revenues: Rental income $ 386 $ 451 $ 895 $ 851 Other income 17 33 31 46 Total revenues 403 484 926 897 Expenses: Operating 103 103 207 213 General and administrative 30 67 91 123 Maintenance 127 43 159 80 Depreciation 168 162 331 323 Interest 91 109 182 215 Bad debt expense -- 12 -- 23 Property taxes 39 41 80 63 Total expenses 558 537 1,050 1,040 Loss before equity in income (loss) of joint venture (155) (53) (124) (143) Equity in income (loss) of joint venture (Note B) 7,203 (285) 6,968 (526) Net income (loss) $ 7,048 $ (338) $ 6,844 $ (669) Net income (loss) allocated to general partners (1%) $ 70 $ (3) $ 68 $ (7) Net income (loss) allocated to limited partners (99%) 6,978 (335) 6,776 (662) Net income (loss) $ 7,048 $ (338) $ 6,844 $ (669) Net income (loss) per limited partnership unit $ 80.41 $ (3.86) $ 78.08 $ (7.63) See Accompanying Notes to Consolidated Financial Statements
c) ANGELES INCOME PROPERTIES, LTD. III CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' (DEFICIT) CAPITAL (Unaudited) (in thousands, except unit data)
Limited Partnership General Limited Units Partners Partners Total Original capital contributions 86,920 $ 1 $ 43,460 $ 43,461 Partners' deficit at December 31, 1996 86,778 $ (398) $ (1,852) $ (2,250) Net income for the six months ended June 30, 1997 -- 68 6,776 6,844 Partners' (deficit) capital at June 30, 1997 86,778 $ (330) $ 4,924 $ 4,594 See Accompanying Notes to Consolidated Financial Statements
d) ANGELES INCOME PROPERTIES, LTD. III CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands) Six Months Ended June 30, 1997 1996 Cash flows from operating activities: Net income (loss) $ 6,844 $ (669) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Equity in (income) loss of joint venture (6,968) 526 Depreciation 331 323 Amortization of loan costs and leasing commissions 21 42 Bad debt expense -- 23 Change in accounts: Restricted cash 3 (1) Accounts receivable (18) (28) Escrows for taxes (25) (71) Other assets 22 4 Accounts payable 41 (1) Tenant security deposit liabilities (1) 1 Property taxes (19) (25) Other liabilities (5) (20) Net cash provided by operating activities 226 104 Cash flows from investing activities: Property improvements and replacements (209) (50) Advances to joint venture -- (612) Deposits to restricted escrows (12) -- Net cash used in investing activities (221) (662) Cash flows from financing activities: Payments on mortgage notes payable (20) (27) Loan costs paid -- (37) Net cash used in financing activities (20) (64) Net decrease in unrestricted cash and cash equivalents (15) (622) Unrestricted cash and cash equivalents at beginning of period 1,371 1,888 Unrestricted cash and cash equivalents at end of period $ 1,356 $ 1,266 Supplemental disclosure of cash flow information: Cash paid for interest $ 174 $ 189 See Accompanying Notes to Consolidated Financial Statements e) ANGELES INCOME PROPERTIES, LTD. III CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (Unaudited) NOTE A - BASIS OF PRESENTATION The accompanying unaudited financial statements of Angeles Income Properties, Ltd. III (the "Partnership" or "Registrant") have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of Angeles Realty Corporation II, (the "Managing General Partner"), all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six month periods ended June 30, 1997, are not necessarily indicative of the results that may be expected for the fiscal year ended December 31, 1997. For further information, refer to the financial statements and footnotes thereto included in the Partnership's annual report on Form 10-KSB for the fiscal year ended December 31, 1996. Certain reclassifications have been made to the 1996 information to conform to the 1997 presentation. NOTE B - INVESTMENT IN JOINT VENTURE The Partnership has a 33.3% investment in Northtown Mall Partners ("Northtown") which is shown as "Investment in joint venture" on the balance sheet. The investment property, Northtown Mall, was sold in May 1997, but effective April 1, 1997. The condensed balance sheet information as of June 30, 1997, for Northtown is as follows: Northtown (in thousands) Assets Cash $ 1,524 Total Assets $ 1,524 Liabilities Liabilities $ 1,524 Total Liabilities $ 1,524 The condensed profit and loss statements for the three and six months ended June 30, 1997 and 1996, for Northtown are as follows: (in thousands) Three Months Ended June 30, 1997 1996 Revenue $ 31 $ 2,417 Costs and expenses (122) (3,271) Gain on sale of investment property 23,632 -- Net income (loss) $ 23,541 $ (854) (in thousands) Six Months Ended June 30, 1997 1996 Revenue $ 2,727 $ 4,990 Costs and expenses (3,521) (6,564) Gain on sale of investment property 23,632 -- Net income (loss) $ 22,838 $ (1,574) The Partnership realized equity income from Northtown of $6,968,000 for the six months ended June 30, 1997 and realized equity loss of $526,000 for the six months ended June 30, 1996. The Partnership accounts for its 33.3% investment in Northtown using the equity method of accounting. Under the equity method, the Partnership records its equity interest in income and losses of the joint venture; however, the investment in the joint venture will be recorded at an amount less than zero (a liability) to the extent of the Partnership's share of net liabilities of the joint venture (See "Note D" for information regarding the sale of this investment property). NOTE C - TRANSACTIONS WITH AFFILIATED PARTIES The Partnership has no employees and is dependent on the Managing General Partner and its affiliates for the management and administration of all Partnership activities. The Partnership Agreement provides for payments to affiliates for services and as reimbursement of certain expenses incurred by affiliates on behalf of the Partnership. The following expenses owed to the Managing General Partner and affiliates during the six months ended June 30, 1997 and June 30, 1996, were paid or accrued: 1997 1996 (in thousands) Property management fees $35 $32 Reimbursement for services of affiliates 62 88 The Partnership insures its properties under a master policy through an agency and insurer unaffiliated with the Managing General Partner. An affiliate of the Managing General Partner acquired, in the acquisition of a business, certain financial obligations from an insurance agency which was later acquired by the agent who placed the current year's master policy. The current agent assumed the financial obligations to the affiliate of the Managing General Partner who receives payments on these obligations from the agent. The amount of the Partnership's insurance premiums accruing to the benefit of the affiliate of the Managing General Partner by virtue of the agent's obligations is not significant. NOTE D - SALE OF NORTHTOWN MALL On May 12, 1997, the Partnership sold Northtown Mall to an affiliate of the lender. The sale resulted in net proceeds of approximately $1,200,000 after payment of closing costs, and the gain on the sale amounted to approximately $23,632,000. The economic closing of the sale of Northtown Mall was as of April 1, 1997, at which time the Partnership was released from the mortgage note secured by this property in the amount of approximately $51,326,000. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS The Partnership's investment properties consist of one apartment complex and one commercial property. The following table sets forth the average occupancy of the properties for the six months ended June 30, 1997 and 1996: Average Occupancy 1997 1996 Lake Forest Apartments Brandon, Mississippi (1) 91% 89% Poplar Square Shopping Center Medford, Oregon 93% 94% (1) This property is competing against new complexes in the area and also has physical deficiencies that are being addressed. The Managing General Partner is optimistic that occupancy will increase. The Partnership realized net income of $7,048,000 and $6,844,000, respectively, for the three and six months ended June 30, 1997, as compared to net losses of $338,000 and $669,000, respectively, for the three and six months ended June 30, 1996. The net income for the three and six months ended June 30, 1997, is due to the equity in income of the joint venture, as a result of the gain realized on the sale of Northtown in the second quarter of 1997 (see "Note D"). For the six months ended June 30, 1997, versus 1996, loss before equity in income (loss) of the joint venture decreased due to an overall increase in total revenues, which was only partially offset by an increase in total expenses. Rental income increased during the six months ended June 30, 1997, as compared to the six months ended June 30, 1996, due to the increase in occupancy and average annual rental rates at Lake Forest Apartments. Although, for the three months ended June 30, 1997, versus the same period in 1996, there was a decrease in rental income due to a slight decrease in occupancy at Lake Forest Apartments during the second quarter of 1997. Other income decreased during the six months ended June 30, 1997, as compared to the six months ended June 30, 1996, due to a decrease in interest income as a result of a decrease in cash investments. The Partnership began the 1996 year with over $1,800,000 in cash and was able to invest a significant portion of this cash until it was advanced to Northtown (See discussion below). Partially offsetting the overall increase in income was an increase in property tax expense and an increase in maintenance expense. Property tax expense increased due to a refund in January 1996 for an overpayment of 1995 property taxes relating to Poplar Square Shopping Center. Maintenance expense increased at Lake Forest Apartments due to an exterior painting project and other various exterior building improvements undertaken in an effort to improve the appearance of the property. Partially offsetting this increase in overall expenses was a decrease in general and administrative expenses due to a decrease in professional services, combined with a decrease in reimbursements for services of affiliates. Also, interest expense decreased due to the refinancing of the mortgage debt secured by Poplar Square Shopping Center in November 1996. This debt was refinanced at a lower interest rate. Bad debt expense for the three and six months ended June 30, 1996, was a result of an increase in the reserve required based on a review of tenants' accounts at the Poplar Square Shopping Center. No such reserve was required during the six months ended June 30, 1997. On May 12, 1997, the Partnership sold Northtown Mall to an affiliate of the lender. The sale resulted in net proceeds of approximately $1,200,000 after payment of closing costs, and the gain on the sale amounted to approximately $23,632,000. The Partnership's pro-rata share of this gain is included in equity in income of the joint venture. The economic closing of the sale of Northtown Mall is as of April 1, 1997, at which time the Partnership was released from the mortgage note of approximately $51,326,000. Included in maintenance expense for the six months ended June 30, 1997, is $82,000 of major repairs and maintenance comprised of parking lot seal-coating and repairs, exterior building improvements, and exterior painting. For the six months ended June 30, 1996, $4,000 of major repairs and maintenance, comprised of exterior building improvements, is included in maintenance expense. As part of the ongoing business plan of the Partnership, the Managing General Partner monitors the rental market environment of each of its investment properties to assess the feasibility of increasing rents, maintaining or increasing occupancy levels and protecting the Partnership from increases in expenses. As part of this plan, the Managing General Partner attempts to protect the Partnership from the burden of inflation-related increases in expenses by increasing rents and maintaining a high overall occupancy level. However, due to changing market conditions, which can result in the use of rental concessions and rental reductions to offset softening market conditions, there is no guarantee that the Managing General Partner will be able to sustain such a plan. At June 30, 1997, the Partnership had unrestricted cash and cash equivalents of $1,356,000 compared to $1,266,000 at June 30, 1996. Net cash provided by operating activities increased primarily as a result of the timing of payment of operating expenses out of accounts payable and also due to a lesser increase in tax escrows. Net cash used in investing activities decreased due to the decrease in advances to joint venture. Prior to the sale of the property, the Northtown Mall property had continued to experience cash shortfalls and had been dependent upon the Partnership and Angeles Income Properties, Ltd. IV (the 66.7% owner of Northtown) to cover such shortfalls in order to meet operating and debt service requirements for this property (see discussion at "Note D" regarding this investment property). During the six months ended June 30, 1996, the Partnership advanced $612,000 to Northtown. There were no advances to Northtown during the six months ended June 30, 1997. Partially offsetting the decrease in advances to joint venture was an increase in cash used for property improvements and replacements at Lake Forest Apartments. Net cash used in financing activities decreased due to the loan costs incurred in 1996 in an effort to refinance the mortgage indebtedness secured by the Poplar Square Shopping Center. This mortgage indebtedness was refinanced in November 1996. As a result of the refinance, the monthly payments to service this debt decreased causing a decrease in payments on the mortgage note payable. The sufficiency of existing liquid assets to meet future liquidity and capital expenditure requirements is directly related to the level of capital expenditures required at the properties to adequately maintain the physical assets and other operating needs of the Partnership. Such assets are currently thought to be sufficient for any near-term needs of the Partnership. The mortgage indebtedness of $3,777,000, which is secured by the Poplar Square Shopping Center investment property, carries a stated interest rate of 9.2% and matures in November 2006. Future cash distributions will depend on the levels of net cash generated from operations, property sales and the availability of cash reserves. PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a) Exhibits: Exhibit 10.16 Sales Agreement among Northtown Mall Partners, a California general partnership, Northtown Associates, a Delaware general partnership, and State of Wisconsin Investment Board, an independent state agency, and Northtown LLP, a Minnesota limited liability partnership dated May 5, 1997. Exhibit 10.17 General Conveyance by Northtown Mall Partners, a California general partnership, dated May 5, 1997. Exhibit 10.18 Termination of Agreements and Assignment of Accounts between Northtown Mall Partners, a California general partnership and Northtown Associates, a Delaware general partnership and State of Wisconsin Investment Board, an independent state agency, made as of May 5, 1997. Exhibit 27, Financial Data Schedule, is filed as an exhibit to this report. b) Reports on Form 8-K: No reports on form 8-K were filed during the three months ended June 30, 1997. SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ANGELES INCOME PROPERTIES, LTD. III By: Angeles Realty Corporation II Managing General Partner By: /s/Carroll D. Vinson Carroll D. Vinson President By: /s/Robert D. Long Robert D. Long Vice President/CAO Date: August 5, 1997 EX-27 2
5 This schedule contains summary financial information extracted from Angeles Income Properties Ltd. III 1997 Second Quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB filing. 0000720460 ANGELES INCOME PROPERTIES LTD. III 1,000 6-MOS DEC-31-1997 JUN-30-1997 1,356 0 29 17 0 0 14,371 8,915 8,563 0 3,777 0 0 0 4,594 8,563 0 926 0 0 1,050 0 182 6,844 0 6,844 0 0 0 6,844 78.08 0 Registrant has an unclassified balance sheet. Multiplier is 1.
EX-10.16 3 AGREEMENT THIS AGREEMENT, made this 5th day of May, 1997, among Northtown Mall Partners, a California general partnership ("Seller"), Northtown Associates, a Delaware general partnership, and state of Wisconsin Investment Board, an independent state agency created pursuant to the laws of the state of Wisconsin (collectively, "Lender"), and Northtown LLP, a Minnesota limited liability partnership in which the sole partners are Lender ("Buyer"). RECITALS Seller owns the Northtown Mall Shopping Center in the City of Blaine, Anoka County, Minnesota (the "Shopping Center"). Lender and Seller are parties to (i) a Loan Agreement dated March 15, 1991, between Lender, as lender, and Seller, as borrower, providing for a loan (the "Loan") of up to $58,000,000 (the "Loan Agreement"); (ii) a $58,000,000 promissory note dated March 15, 1991, between Seller, as maker, and Lender, as payee (the "Note") which evidences the Loan; (iii) a Combination Mortgage, Security Agreement and Fixture Financing Statement dated March 15, 1991, between Seller, as mortgagor, and Lender, as mortgagee, mortgaging the Shopping Center as security for the Note (the "Mortgage"); (iv) a Collateral Assignment of Rents and Leases dated March 15, 1991, between Seller, as assignor, and Lender, as assignee, assigning leases and rents and other income from the Shopping Center as additional security for the Note (the "Assignment of Rents:); (v) a Collateral Assignment of Licenses and contracts dated march 15, 1991, between Seller, as assignor, and Lender, as assignee, assigning licenses, contracts and other items as additional security for the Note (the "Collateral Assignment"); (vi) a Tax and Insurance Premium Deposit Agreement dated March 15, 1991, among Seller, Lender and Norwest Bank Minnesota (the "Tax Deposit Agreement"), providing for the creation and funding of a tax and insurance escrow account which has been established and is being maintained as Norwest Bank account #12628300 (the "Tax Account"); (vii) a Reserve Account Deposit Agreement dated March 15, 1991, among Seller, Lender and Norwest Bank Minnesota (the "Improvement Deposit Agreement"), providing, among other things, for the creation, investment and distribution of a "5% Reserve Account" which has been established and is being maintained as Norwest Bank account #12628400 (the "Reserve Account"); (viii) an Option Agreement dated March 15, 1991, between Seller, as optionor, and Lender, as optionee, granting Lender an option to purchase the Shopping Center (the "Option Agreement"); (ix) a Grant of Right of First Refusal and Restriction on Transfer dated March 15, 1991, between Seller and Lender, granting Lender a right of first refusal to purchase the Shopping Center (the "First Refusal Agreement"); and (x) a Collateral Assignment of Real Estate Management Agreement dated March 15, 1991, between Seller and Lender, collaterally assigning to Lender seller's interest under the management agreement for the Shopping Center (the "Management Agreement Assignment"). The Note, Mortgage, Assignment of Rents, Collateral Assignment, Option Agreement, First Refusal Agreement and Management Agreement Assignment are called collectively the "Loan Documents". Because the contractor for the improvement of the HomePlace space in the Shopping Center has not been paid in full, the mechanics liens listed on Exhibit A hereto (the "Liens") have been filed against the Shopping Center by the contractor and some of its subcontractors. In addition, the leasing commission payable to Madison Marquette Realty Services and co-broker in the amount of $207,192.00 (the "HomePlace Commission") with respect to the HomePlace lease has not been paid. An action to foreclose the Liens captioned C.F. Haglin & Sons, Inc. vs. Northtown Mall Partners, et. al., Court File No. C1-97-898 (the "Action") has been commenced in the district court for the Tenth Judicial District of Minnesota. Lender has exercised its option to purchase the Shopping Center pursuant to the Option Agreement, with a May 12, 1997, closing date established by Lender's notice of exercise, and has assigned its purchase right to Buyer. The unpaid balance of the Note is about $51,500.000. The Purchase price for the Shopping Center as determined pursuant to the procedure established by the Option Agreement is $43,000,000. Since the principal balance of the Note exceeds the purchase price under the Option Agreement, no cash is payable to Seller under the Option Agreement. However, based upon negotiations prompted by Lender's desire to close its purchase of the Shopping Center before May 12 and by certain claims made by Seller for reimbursement of HomePlace costs, the parties have discussed a $1,200,000 payment to Seller at closing of the Shopping Center sale on the following terms: (i) the Shopping Center will be conveyed to Buyer concurrently with execution and delivery of this Agreement, with the conveyance on and subject to the terms of the Option Agreement except as modified or supplemented by this Agreement; (ii) Buyer will pay Seller $1,200,000 at closing in wired funds; (iii) Seller may retain the balance in First Bank, Account #0002 01 031 00, (the "Cash Account"), which represents cash on hand from Shopping Center operations. (iv) Buyer will pay the transfer tax, if any, payable with respect to the sale of the Shopping Center to Buyer; (v) Seller will not be required to pay or provide a credit for any real estate taxes or special assessments relating to the Shopping Center or any accrued and unpaid interest on the Note; (vi) the Tax Account, the Reserve Account, any real estate tax refunds less payments now or hereafter owing to Marvin F. Poer, Inc. and any insurance premium refunds to which seller may be or become entitled will be transferred to Buyer; (vii) Buyer will pay the Liens and the HomePlace Commission, and secure dismissal of the Action; (viii)Seller will pay all accounts payable relating to operation or maintenance of the Shopping Center other than (a) the Liens and the HomePlace Commission and (b) accounts payable relating to operation and maintenance of the Shopping Center after March 31, 1997; (ix) the economic closing of the sale of the Shopping Center to Buyer shall be as of April 1, 1997, i.e., the April Mortgage payment and all other April expenses would be paid from April rents, and any excess would go to Buyer; (x) all tenant payments received by Buyer and all tenant payments received by Seller after March 31, 1997 (collectively "Post- March Tenant Payments") shall be retained by Buyer or paid by Seller to Buyer, as the case may be, even if they represent rents or reimbursement payments attributable to the period before closing, and Seller shall at Buyer's option either dismiss or substitute Buyer as plaintiff in actions relating to the Premises or the leases; (xi) the Loan Agreement, Tax Deposit Agreement and Improvement Deposit Agreement will be terminated, but the Loan Documents will remain outstanding; (xii) Seller will be released by Lender and Buyer from all indebtedness, claims and liability under the Loan Agreement, Tax Deposit Agreement, Improvement Deposit Agreement and Loan Documents and all other claims and liability except for claims arising from third party claims and claims arising under this Agreement or instruments or agreements executed and delivered by Seller pursuant to this Agreement or the Option Agreement; and (xiii) Buyer and Lender will be released by seller from all claims and liability under the Loan Agreement, Tax Deposit Agreement, Improvement Deposit Agreement and Loan Documents and all other claims and liabilities except for claims arising from third party claims and claims arising under this Agreement or instruments or agreements executed and delivered pursuant to this Agreement or the Option Agreement. NOW THEREFORE, the parties hereto hereby agree as follows: 1. Closing of Sale. Concurrently with execution and delivery of this Agreement, Seller and Buyer are closing the sale of the Shopping Center to Buyer (the "Closing") in accordance with the terms of the Option Agreement except as it is modified or supplemented by this Agreement. The parties agree that the purchase price under the Option Agreement is $43,000,000. 2. Implementation of Additional Provisions. Concurrent with the Closing, (a) Buyer is paying Seller $1,200,000 in wired funds, (b) pursuant to instructions from Seller and Lender, Norwest Bank is transferring the Reserve Account to the title insurance company conducting the Closing, and the funds from that account are being used to pay the Liens and HomePlace Commission and to obtain a dismissal of the Action, with any excess paid to Buyer, (c) the Tax Reserve Account is being transferred to Buyer, with the proceeds thereof wired directly from Norwest Bank to Buyer, (d) Seller is transferring its rights to any real estate tax refunds and contests and insurance premium refunds to Buyer less any payments now or hereafter owing to Marvin F. Poer, Inc., (e) to the extent not already paid, Seller is paying the accounts payable for which it is responsible as set forth in the Recitals, (f) the Loan Agreement, Tax Deposit Agreement and Improvement Deposit Agreement are being terminated, (g) Seller is executing and delivering a release to Lender and buyer, and (h) Lender and Buyer are executing and delivering a release to Seller. 3. Closing Statement; Transfer Tax. The closing statement or statements delivered by the parties at the Closing reflect the provisions of this Agreement, including the Recitals. Buyer agrees to indemnify, defend and hold harmless Seller with respect to any transfer tax (plus any penalty and interest thereon) payable by reason of the transfer of the Shopping Center to Buyer. 4. Cash Account. Lender and Buyer hereby waive and release any and all claims to the Cash Account. 5. Post-March Tenant Payments. Seller hereby assigns to Buyer all of its right, title and interest in and to all Post-March Tenant Payments. 6. No Merger. The Loan Documents shall not merge in Buyer's title or be discharged, merged or released by any other matter or thing other than instruments of discharge duly signed by Lender. 7. Due Authorization, Etc. Lender and buyer, on the one hand, and Seller, on the other, each represents to the other that it has full power to execute, deliver and carry out the terms of the Option Agreement and this Agreement and has taken all steps necessary to authorize the execution, delivery and performance of this Agreement and the performance of the Option Agreement, and that the individual or individuals executing this Agreement and the agreements delivered pursuant hereto on behalf of Lender, Buyer or Seller, as the case may be, is duly authorized to do so. 8. Entire Agreement. This Agreement and the Agreements delivered pursuant hereto constitute the entire agreement of the parties dealing with the subject matter hereof. 9. Governing Law. This Agreement is governed by Minnesota law. 10. Attorney's Fees. In any action arising under or based upon this Agreement, the party which does not prevail in the action shall pay the attorney's fees and costs incurred by the prevailing party in the action. 11. Counterparts. This Agreement may be signed in separate counterparts which, taken together, constitute a single agreement. IN WITNESS WHEREOF, the parties hereto have caused these presents to be made as of the day and year first above stated. NORTHTOWN MALL PARTNERS By Angeles Income Properties, Ltd. III, a California limited partnership, its general partner By Angeles Realty Corporation II, its general partner By /s/ Robert D. Long, Jr. Its Vice President And Angeles Income Properties, Ltd. IV, a California limited partnership, its general partner By Angeles Realty Corporation II, its general partner By /s/ Robert D. Long, Jr. Its Vice President And Angeles Realty Corporation II, its general partner By /s/ Robert D. Long, Jr. Its Vice President NORTHTOWN ASSOCIATES, a Delaware general partnership By Northtown Mall I, B.V., its partner By US Alpha, Inc., its agent and attorney in fact By /s/ Raymond H. Bottorf Its President And Northtown Mall II, B.V., its partner By US Alpha, Inc., its agent and attorney in fact By /s/ Raymond H. Bottorf Its President STATE OF WISCONSIN INVESTMENT BOARD By /s/ Charles R. Carpenter Assistant Investment Director Real Estate & Mortgages NORTHTOWN LLP, a Minnesota limited liability partnership, By State of Wisconsin Investment Board, its partner By /s/ Charles R. Carpenter Assistant Investment Director Real Estate & Mortgages And Northtown Associates, its partner By Northtown Mall I, B.V., its partner By US Alpha, Inc., its agent and attorney in fact By /s/ Raymond H. Bottorf Its President And Northtown Mall II, B.V., its partner By US Alpha, Inc., its agent and attorney in fact By Raymond H. Bottorf Its President EX-10.17 4 GENERAL CONVEYANCE THIS GENERAL CONVEYANCE is made as of the 5th day of May, 1997 by Northtown Mall Partners, a California general partnership ("Assignor"). RECITALS Concurrently with the execution and delivery hereof, Assignor is conveying to Northtown LLP, a Minnesota limited liability partnership ("Assignee") the Northtown Mall Shopping Center in Blaine, Minnesota (the Property"). In connection with the conveyance of the Property, Assignor desires to assign to Assignee certain tangible and intangible personal property relating to the Property. NOW THEREFORE, Assignor agrees as follows: 1. Assignment. Assignor does hereby sell, assign, transfer, set-over and deliver unto Assignee, its successors and assigns, all of the following: a. all furniture, fixtures, equipment and other personal property owned by Assignor placed in, attached to or used in connection with or in the operation of the Property; b. Assignor's interest in all licenses, permits and authorizations, including, without limitation, sewer rights and permits, presently issued in connection with the operation of all or any part of the Property except those issued or given to tenants; c. all warranties, if any, issued to Assignor by any manufacturers or contractors in connection with the Property; d. all books and records relating to the Property or its maintenance or operation and all Documents, as defined in that certain Option Agreement relating to the property dated March 15, 1991, between Assignor and State of Wisconsin Investment Board and Northtown Associates, except for "Contracts", as therein defined; e. all trademarks, tradenames, assumed names, copyrights and the like relating to the Property or its operations, including without limitation the right to the name and designations "Northtown Mall" and "Northtown Mall Shopping Center"; f. the Real Estate Management Agreement dated March 1, 1991, between Assignor and Marquette Partners, Inc., providing for management of the Property and all service, equipment rental and other contracts relating to the Property listed on Exhibit A hereto (collectively, the "Contracts"); g. all leases of space in the Property ("Leases"); and h. all rent and other amounts paid by department store site owners, tenants or former tenants of the property after March 31, 1997, regardless of the period to which they relate, including without limitation the causes of action and bankruptcy claims listed on Exhibit B hereto. TO HAVE AND TO HOLD the items assigned hereby (collectively, the "Assigned Property") unto Assignee, its successors and assigns, forever. 2. Representation and Warranty. Assignor represents and warrants that it owns the Assigned Property free and clear of all liens, claims or encumbrances except for the exceptions listed in Assignor's deed of the Property to Assignee. Assignor further represents, covenants and warrants that Assignor has the full right, power and authority to execute this General Conveyance. 3. Assumption by Assignee. Assignee by acceptance of delivery of this Assignment hereby assumes all obligations of Assignor arising after the date hereof under (a) the Contracts, and (b) those Leases true, full and correct copies of which have been delivered to Assignee or its partners or L.J. Melody. Assignor shall remain liable for all liabilities and claims arising under the Contracts or the Leases prior to the date hereof. 4. Further Assurances. Assignor agrees that assignor will make, execute, acknowledge and deliver all and every such further acts, deeds, conveyances, assignments, notices of assignments, transfers and assurances as Assignor shall from time to time reasonably require, for the better assuring, conveying, assigning, transferring and confirming unto Assignee the Assigned property, and the rights hereby conveyed or assigned or intended now or hereafter to be conveyed or assigned to Assignee. IN WITNESS WHEREOF, Assignor has caused this General conveyance to be executed as of the date first written above. NORTHTOWN MALL PARTNERS By Angeles Income Properties, Ltd. III, a California limited partnership, its general partner By Angeles Realty Corporation II, its general partner By /s/ Robert D. Long, Jr. Its Vice President And Angeles Income Properties, Ltd. IV, a California limited partnership, its general partner By Angeles Realty Corporation II, its general partner By /s/ Robert D. Long, Jr. Its Vice President And Angeles Realty Corporation, II, its general partner By /s/ Robert D. Long, Jr. Its Vice President EX-10.18 5 TERMINATION OF AGREEMENTS AND ASSIGNMENT OF ACCOUNTS THIS TERMINATION OF AGREEMENTS, made as of the 5th day of May, 1997 between Northtown Mall Partners, a California general partnership ("Borrower") and Northtown Associates, a Delaware general partnership and State of Wisconsin Investment Board, an independent state agency created pursuant to the laws of Wisconsin (collectively, "Lender"). RECITALS Borrower and Lender are parties to (i) a Loan agreement dated March 15, 1991, between Borrower and Lender, providing for a loan of up to $58,000,000 to Borrower (the "Loan Agreement"), (ii) a Tax and Insurance Premium Deposit Agreement dated March 15, 1991, among Norwest Bank Minnesota ("Agent"), Lender and Borrower, providing for a tax and insurance escrow (the "tax Escrow Agreement"), and (iii) a Reserve Account Deposit Agreement dated March 15, 1991, among Agent, Lender and Borrower, providing for deposit with Agent of certain monies (the "Deposit Agreement"). The account created pursuant to the Tax Escrow Agreement is Norwest Bank account #12628300 (the "Tax Account"). The account created pursuant to the Deposit Agreement is Norwest Bank account #12628400 (the "Reserve Account"). The parties have agreed to terminate the Loan Agreement, Tax Escrow Agreement and Deposit Agreement. NOW, THEREFORE, the parties hereby agree as follows: 1. The Loan Agreement, Tax Escrow Agreement and Deposit Agreement are hereby terminated. The December 19, 1996, letter from William McCarthy on behalf of Borrower, instructing Agent not to make disbursements from the Reserve Account, is revoked. 2. All of Borrower's right, title and interest in the Tax Account and the Reserve Account are assigned to Lender. Agent is authorized and instructed to (i) wire all funds in the Reserve Account to the account designated on Exhibit A hereto, and (ii) wire all funds in the Tax Account to an account (the "New Tax Account") established for Lender or Northtown LLP, a Minnesota limited liability partnership in which the sole partners are Lender, with the New Tax Account to be identified to Agent by statement from Faegre & Benson. All interest earned on but not posted to the Tax Account or the Reserve Account when the aforesaid wirings are made shall be wired to the New Tax Account when it is posted by Agent. 3. Prior to the wiring referred to in the first sentence of Section 2 hereof, Agent may deduct from the Tax Account and the Reserve Account its final fees relating to those accounts. 4. This Agreement may be signed in separate counterparts which, taken together, constitute a single agreement. IN WITNESS WHEREOF, the parties hereto have caused these presents to be made as of the day and year first above stated. NORTHTOWN MALL PARTNERS By Angeles Income Properties, Ltd. III, a California limited partnership, its general partner By Angeles Realty Corporation II, its general partner By /s/ Robert D. Long, Jr. Its Vice President And Angeles Income Properties, Ltd. IV, a California limited partnership, its general partner By Angeles Realty Corporation II, its general partner By /s/ Robert D. Long, Jr. Its Vice President And Angeles Realty Corporation II, its general partner By /s/ Robert D. Long, Jr. Its Vice President NORTHTOWN ASSOCIATES, a Delaware general partnership By Northtown Mall I, B.V., its partner By US Alpha, Inc., its agent and attorney in fact By /s/ Raymond H. Bottorf Its President And Northtown Mall II, B.V., its partner By US Alpha, Inc., its agent and attorney in fact By Raymond H. Bottorf Its President STATE OF WISCONSIN INVESTMENT BOARD By /s/ Charles R. Carpenter Assistant Investment Director Real Estate & Mortgages -----END PRIVACY-ENHANCED MESSAGE-----