-----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, LZoCYmcGmW2SiNx8r8jXgj6mS/jNffucloNNV9RvkKimABuyoHH4Oa4fP344BeXk +CB1ZmMY/7bvl0mXYwlElg== 0000310303-98-000012.txt : 19980817 0000310303-98-000012.hdr.sgml : 19980817 ACCESSION NUMBER: 0000310303-98-000012 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980814 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ANGELES PARTNERS XV CENTRAL INDEX KEY: 0000788331 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 954046025 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-15546 FILM NUMBER: 98690945 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 OR TRANSITIONAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 QUARTERLY OR TRANSITIONAL REPORT 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, 1998 or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from.........to......... Commission file number 0-15546 ANGELES PARTNERS XV (Exact name of small business issuer as specified in its charter) California 95-4046025 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) One Insignia Financial Plaza, P.O. Box 1089 Greenville, South Carolina 29602 (Address of principal executive offices) (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 PARTNERS XV STATEMENT OF NET LIABILITIES IN LIQUIDATION (Unaudited) (in thousands) June 30, 1998 Assets Cash $ 361 Other assets 5 Investment properties 4,128 4,494 Liabilities Property taxes 93 Interest 3,254 Other liabilities 29 Notes payable, including $3,082 in default 6,967 Estimated costs during the period of liquidation 113 10,456 Net liabilities in liquidation $(5,962) See Accompanying Notes to Financial Statements b) ANGELES PARTNERS XV STATEMENT OF CHANGES IN NET LIABILITIES IN LIQUIDATION (Unaudited) (in thousands) Six Months Ended June 30, 1998 Net liabilities in liquidation at December 31, 1997 $ (6,273) Changes in net liabilities in liquidation attributed to: Increase in cash 6 Increase in other assets 1 Decrease in accrued taxes 18 Increase in accrued interest (388) Increase in other liabilities (29) Decrease in estimated costs during the period of liquidation 703 Net liabilities in liquidation at June 30, 1998 $ (5,962) See Accompanying Notes to Financial Statements b) ANGELES PARTNERS XV STATEMENT OF CHANGES IN NET LIABILITIES IN LIQUIDATION (Unaudited) (in thousands) Six Months Ended June 30, 1997 Net liabilities in liquidation at December 31, 1996 $ (4,025) Changes in net liabilities in liquidation attributed to: Increase in cash 55 Increase in other assets 3 Increase in accrued taxes (65) Increase in accrued interest (325) Decrease in estimated costs during the period of liquidation 212 Net liabilities in liquidation at June 30, 1997 $ (4,145) See Accompanying Notes to Financial Statements e) ANGELES PARTNERS XV NOTES TO FINANCIAL STATEMENTS NOTE A - BASIS OF PRESENTATION As of December 31, 1994, Angeles Partnership XV (the "Partnership") adopted the liquidation basis of accounting. The Partnership had experienced significant recurring operating losses. In March 1995, the lender on the non-recourse debt secured by the Marina Plaza notified the Partnership that this debt was in default and initiated foreclosure proceedings. Marina Plaza was placed in receivership in June 1995, and was foreclosed upon on August 1, 1995. In addition, the Partnership was in default on recourse indebtedness totaling $3,500,000 due to Angeles Mortgage Investment Trust ("AMIT"). Of this debt, $1,500,000 was secured by one of the remaining Cleveland Industrial Complex ("Cleveland") buildings and AMIT placed the property in receivership in January 1995, and foreclosed on the property on September 6, 1995. AMIT also foreclosed on another of the Cleveland buildings on August 23, 1995. The remaining $2,000,000 was recourse to the Partnership and AMIT received a default judgment against the Partnership on January 18, 1995. As a result of the foreclosure on the Cleveland building on August 23, 1995, this judgment was reduced by $500,000. In July of 1996, AMIT entered a complaint for foreclosure and other relief against the Partnership. On July 26, 1996, the remaining Cleveland Properties were placed in receivership. The receiver is authorized to collect the rents, profits and all income derived from the properties, to maintain the premises, and otherwise preserve, manage, maintain and protect such properties. On July 28, 1998, the Partnership executed an Agreement for Deed in Lieu of Foreclosure by and between the Partnership and AMIT, a California business trust. Pursuant thereto, the Partnership conveyed to AMIT in lieu of mortgage foreclosure. Angeles Realty Corporation II, the general partner, did not believe that it was in the Partnership's best interest to contest this foreclosure action because there is no equity in the property or Partnership. Furthermore, the Partnership does not have the funds with which to contest this action. Any remaining cash will be used to cover the costs of liquidating the Partnership. The Partnership does not intend nor does it have the ability to purchase any additional properties and the Managing General Partner has decided to liquidate the Partnership during the third or fourth quarter of 1998. Although the Partnership has $5,962,000 in net liabilities in liquidation at June 30, 1998, neither the general partners nor the limited partners will be required to contribute additional capital to cover this amount. As a result of the decision to liquidate the Partnership, the Partnership changed its basis of accounting for its financial statements at December 31, 1994, from the going concern basis of accounting to the liquidation basis of accounting. Consequently, assets have been valued at estimated net realizable value and liabilities are presented at their estimated settlement amounts, including estimated costs associated with carrying out the liquidation. The valuation of assets and liabilities necessarily requires many estimates and assumptions and there are substantial uncertainties in carrying out the liquidation. The actual realization of assets and settlement of liabilities could be higher or lower than amounts indicated and is based upon the Managing General Partner's estimates as of the date of the financial statements. The investment properties were adjusted to their estimated net realizable values. The net realizable values were based on independent appraisals as of December 31, 1997. The statement of net liabilities in liquidation as of June 30, 1998, includes approximately $113,000 of accrued costs, net of income, that the Managing General Partner estimates will be incurred during the period of liquidation, based on the assumption that the liquidation process will be completed during the third or fourth quarter of 1998. These costs include anticipated legal fees, administrative expenses, net of estimated income from property operations. Because the success in realization of assets and the settlement of liabilities is based on the Managing General Partner's best estimates, the liquidation period may be shorter than projected or it may be extended beyond the projected period. NOTE B - 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 Managing General Partner is wholly-owned by Insignia Properties Trust ("IPT"), an affiliate of Insignia Financial Group, Inc. ("Insignia"). 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 day to day management of the remaining investment properties are managed by a third party receiver, which was court appointed. The following amounts were paid or accrued to the Managing General Partner and affiliates during the six months ended June 30, 1998 and 1997: 1998 1997 (in thousands) Reimbursement for services of affiliates $ 20 $ 31 For the period of January 1, 1997 through August 31, 1997, the Partnership insured its properties under a master policy through an agency affiliated with the Managing General Partner with an 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 master policy. The current agent assumed the financial obligations to the affiliate of the Managing General Partner, which 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. In November 1992, Angeles Acceptance Pool ("AAP"), a Delaware limited partnership was organized to acquire and hold the obligations evidencing the working capital loan previously provided by Angeles Capital Investment, Inc. ("ACII"). Angeles Corporation ("Angeles") is the 99% limited partner of AAP and Angeles Acceptance Directives, Inc.("AAD"), an affiliate of the Managing General Partner, was, until April 14, 1995, the 1% General Partner of AAP. On April 14, 1995, as part of a settlement of claims between affiliates of the Managing General Partner and Angeles, AAD resigned as general partner of AAP and simultaneously received a 1/2% limited partner interest in AAP. An affiliate of Angeles now serves as the general partner of AAP. AAP's working capital loan funded the Partnership's operating deficits in prior years. Total indebtedness, which is included as a note payable, was approximately $1,582,000 and is in default at June 30, 1998. AMIT, a real estate investment trust, has provided secondary financing to the Partnership secured by the Partnership's investment properties known as Cleveland Industrial and Marina Plaza. One of the notes in the amount of $600,000 secured by one of the Cleveland Industrial buildings was assumed by the purchaser of the building during 1994. Total AMIT indebtedness at June 30, 1998, is $1,500,000, plus accrued interest of approximately $2,360,000. Total interest charges were approximately $297,000 and $249,000 for the six months ended June 30, 1998 and 1997, respectively. In November 1992, MAE GP acquired 1,675,113 Class B Common Shares of AMIT. The terms of the Class B Shares provide that they are convertible, in whole or in part, into Class A Common Shares on the basis of one Class A Share for every 49 Class B Shares (however, in connection with the settlement agreement described in the following paragraph, MAE GP agreed not to convert the Class B Shares so long as AMIT's option is outstanding). These Class B Shares entitle the holder to receive 1% of the distributions of net cash distributed by AMIT (however, in connection with the settlement agreement described in the following paragraph, MAE GP agreed to waive its right to receive dividends and distributions so long as AMIT's option is outstanding). The holder of the Class B Shares is also entitled to vote on the same basis as the holders of Class A Shares, providing the holder with approximately 39% of the total voting power of AMIT (unless and until converted to Class A Shares, in which case the percentage of the vote controlled represented by such Shares would approximate 1.3% of the total voting power of AMIT). As part of a settlement of certain disputes with AMIT, MAE GP granted to AMIT an option to acquire the Class B Shares owned by it. This option can be exercised at the end of 10 years or when all loans made by AMIT to partnerships which were affiliated with MAE GP as of November 9, 1994 (which is the date of execution of a definitive Settlement Agreement) have been paid in full. In connection with such settlement, AMIT delivered to MAE GP cash in the sum of $250,000 at closing (which occurred April 14, 1995) as payment for the option. If and when the option is exercised, AMIT will be required to remit to MAE GP an additional $94,000. Simultaneously with the execution of the option and as part of the settlement, MAE GP also executed an irrevocable proxy in favor of AMIT, which provides that the holder of the Class B Shares is permitted to vote those Shares on all matters except those involving transactions between AMIT and MAE GP affiliated borrowers or the election of any MAE GP affiliate as an officer or trustee of AMIT. With respect to such matters, the trustees of AMIT are required to vote (pursuant to the irrevocable proxy) the Class B Shares (as a single block) in the same manner as a majority of the Class A Shares are voted (to be determined without consideration of the votes of "Excess Class A Shares" (as defined in Section 6.13 of AMIT's Declaration of Trust)). Between its acquisition of the Class B Shares (in November 1992) and March 31, 1995, MAE GP declined to vote these Shares. Since that date, MAE GP voted its Shares at the 1995 and 1996 annual meetings in connection with the election of trustees and other matters. In February 1998, MAE GP was merged into IPT, and in connection with that merger, MAE GP dividended all of the Class B Shares to its sole stockholder, Metropolitan Asset Enhancement, L.P. ("MAE"). As a result, MAE, as the holder of the Class B Shares, is now subject to the terms of the settlement agreement, option and irrevocable proxy described in the two preceding paragraphs. Neither MAE GP nor MAE has exerted or has any current intention to exert any management control over or participate in the management of AMIT. However, subject to the terms of the proxy described below, MAE may choose to vote the Class B Shares or otherwise exercise its rights as a shareholder of AMIT as it deems appropriate in the future. Liquidity Assistance L.L.C., which is an affiliate of the General Partner, MAE and Insignia (which provides property management and partnership administration services to the Partnership), owned 96,800 Class A Shares of AMIT at June 30, 1998. These Class A Shares represent approximately 2.2% of the total voting power of AMIT. On April 3, 1997, Insignia and AMIT entered into a non-binding agreement in principle contemplating, among other things, a business combination of AMIT and IPT, which was then owned 98% by Insignia and its affiliates. On July 18, 1997, IPT, Insignia and MAE GP entered into a definitive merger agreement pursuant to which (subject to shareholder approval and certain other conditions, including the receipt by AMIT of a fairness opinion from its investment bankers) AMIT would be merged with and into IPT, with each Class A Share and Class B Share being converted into 1.625 and 0.0332 Common Shares of IPT, respectively. The foregoing exchange ratios are subject to adjustment to account for dividends paid by AMIT from January 1, 1997 and dividends paid by IPT from February 1, 1997. It is anticipated that Insignia and its affiliates (including MAE) would own approximately 57% of post-merger IPT if this transaction is consummated. On March 17, 1998, Insignia entered into an agreement to merge its national residential property management operations, and its controlling interest in IPT, with Apartment Investment and Management Company ("AIMCO"), a publicly traded real estate investment trust. The closing, which is anticipated to happen in September or October of 1998, is subject to customary conditions, including government approvals and the approval of Insignia's shareholders. If the closing occurs, AIMCO will then control the Managing General Partner of the Partnership. It is not anticipated that this transaction will have a material effect on the Partnership. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OR OPERATION Results of Operations, Liquidity and Capital Resources As of December 31, 1994, the Partnership adopted the liquidation basis of accounting. The Partnership had experienced significant recurring operating losses. In March 1995, the lender on the non-recourse debt secured by Marina Plaza notified the Partnership that this debt was in default and initiated foreclosure proceedings. Marina Plaza was placed in receivership in June 1995, and was foreclosed upon on August 1, 1995. The Partnership was in default on recourse indebtedness totaling $3,500,000 due to AMIT. Of this debt, $1,500,000 was secured by one of the remaining Cleveland buildings and AMIT placed the property in receivership in January 1995, and foreclosed on it September 6, 1995. AMIT also foreclosed on another of the Cleveland buildings on August 23, 1995. The remaining $2,000,000 was recourse to the Partnership and AMIT received a default judgment against the Partnership on January 18, 1995. As a result of the foreclosure on the Cleveland building on August 23, 1995, this judgment was reduced by $500,000. In July of 1996, AMIT entered a complaint for foreclosure and other relief against the Partnership. On July 26, 1996, the remaining Cleveland Properties were placed in receivership. The receiver is authorized to collect the rents, profits and all income derived from the properties, to maintain the premises, and otherwise preserve, manage, maintain and protect such properties. On July 28, 1998, the Partnership executed an Agreement for Deed in Lieu of Foreclosure by and between the Partnership and AMIT, a California business trust. Pursuant thereto, the Partnership conveyed to AMIT in lieu of mortgage foreclosure. Angeles Realty Corporation II, the general partner, did not believe that it was in the Partnership's best interest to contest this foreclosure action because there is no equity in the property or Partnership. Furthermore, the Partnership does not have the funds with which to contest this action. Any remaining cash will be used to cover the costs of liquidating the Partnership. The Managing General Partner intends to liquidate the Partnership during the third or fourth quarter of 1998. Although the Partnership has $5,962,000 in net liabilities in liquidation at June 30, 1998, neither the general partners nor the limited partners will be required to contribute additional capital to cover this amount. AAP's working capital loan funded the Partnership's operating deficits in prior years. Total indebtedness, which is included as a note payable, was approximately $1,582,000 and is in default at June 30, 1998. Total interest charges for this loan were approximately $83,000 for both the six month periods ended June 30, 1998 and 1997. As a result of the decision to liquidate the Partnership, the Partnership changed its basis of accounting for its financial statements at December 31, 1994, from the going concern basis of accounting to the liquidation basis of accounting. Consequently, assets have been valued at their estimated net realizable value and liabilities are presented at their estimated settlement amounts, including estimated costs associated with carrying out the liquidation. The valuation of assets and liabilities necessarily requires many estimates and assumptions and there are substantial uncertainties in carrying out the liquidation. The actual realization of assets and settlement of liabilities could be higher or lower than amounts indicated and is based upon the Managing General Partner's estimates as of the date of the financial statements. The investment properties were adjusted to their estimated net realizable value. The estimated net realizable value for the three Cleveland buildings remaining at June 30, 1998, was based on independent appraisals as of December 31, 1997. The statement of net liabilities in liquidation as of June 30, 1998, includes approximately $113,000 of accrued costs, net of income, that the Managing General Partner estimates will be incurred during the period of liquidation, based on the assumption that the liquidation process will be completed during the third or fourth quarter of 1998. These costs include anticipated legal fees and administrative expenses, less income from property operations. Because the success in realization of assets and the settlement of liabilities is based on the Managing General Partner's best estimates, the liquidation period may be shorter than projected or it may be extended beyond the projected period. For the six months ended June 30, 1998, the Partnership recorded a decrease in the estimated costs during the period of liquidation of approximately $703,000. This decrease is primarily due to the payment of liquidation charges and a decrease in the estimated costs to liquidate as a result of the deed in lieu of foreclosure which occurred on July 28, 1998. Year 2000 The Partnership is dependent upon the Managing General Partner and Insignia for management and administrative services. Insignia has completed an assessment and will have to modify or replace portions of its software so that its computer systems will function properly with respect to dates in the year 2000 and thereafter (the "Year 2000 Issue"). The project is estimated to be completed not later than December 31, 1998, which is prior to any anticipated impact on its operating systems. The Managing General Partner believes that with modifications to existing software and conversions to new software, the Year 2000 Issue will not pose significant operational problems for its computer systems. Other Certain items discussed in this quarterly report may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Reform Act") and as such may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Partnership to be materially different from any future results, performance or achievements expressed or implied by such forward- looking statements. Such forward-looking statements speak only as of the date of this quarterly report. The Partnership expressly disclaims any obligation or undertaking to release publicly any updates of revisions to any forward-looking statements contained herein to reflect any change in the Partnership's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS In March 1998, several putative unit holders of limited partnership units of the Partnership commenced an action entitled ROSALIE NUANES, ET AL. V. INSIGNIA FINANCIAL GROUP, INC., ET AL. in the Superior Court of the State of California for the County of San Mateo. The plaintiffs named as defendants, among others, the Partnership, the Managing General Partner and several of their affiliated partnerships and corporate entities. The complaint purports to assert claims on behalf of a class of limited partners and derivatively on behalf of a number of limited partnerships (including the Partnership) which are named as nominal defendants, challenging the acquisition by Insignia and its affiliates of interests in certain general partner entities, past tender offers by Insignia affiliates as well as a recently announced agreement between Insignia and AIMCO. The complaint seeks monetary damages and equitable relief, including judicial dissolution of the Partnership. On June 24, 1998, the Managing General Partner filed a motion seeking dismissal of the action. In lieu of responding to the motion, the plaintiffs have filed an amended complaint. The Managing General Partner believes the action to be without merit, and intends to vigorously defend it. The Partnership is unaware of any other pending or outstanding litigation that is not of a routine nature. The Managing General Partner of the Partnership believes that all such pending or outstanding litigation will be resolved without a material adverse effect upon the business, financial condition, or operations of the Partnership. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a) Exhibits: Exhibit 10.14, Agreement for Deed-in-Lieu-of-Foreclosure, by and between Angeles Partners XV and Angeles Mortgage Investment Trust ("AMIT"), dated July 28, 1998, conveying the Cleveland properties, two located in Strongeville, Ohio and one located in Solon, Ohio to AMIT. Exhibit 27, Financial Data Schedule, is filed as an exhibit to this report. b) Reports on Form 8-K filed during the quarter ended June 30, 1998: None. 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 PARTNERS XV By: Angeles Realty Corporation II Its Managing General Partner By: /s/ Carroll D. Vinson Carroll D. Vinson President and Director By: /s/ Robert D. Long, Jr. Robert D. Long, Jr. Vice President and Chief Accounting Officer Date: August 14, 1998 EX-27 2
5 This schedule contains summary financial information extracted from Angeles Partners XV 1998 Second Quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB filing. 0000788331 ANGELES PARTNERS XV 1,000 6-MOS DEC-31-1998 JUN-30-1998 361 0 0 0 0 0 4,128 0 4,494 0 6,967 0 0 0 (5,962) 4,494 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Registrant has an unclassified balance sheet. Multiplier is 1.
EX-10.14 3 AGREEMENT FOR DEED-IN-LIEU-OF-FORECLOSURE Parties: Angeles Partners XV, a California limited partnership ("Borrower"); and Angeles Mortgage Investment Trust, a California business trust ("Lender") Property: Property in Cuyahoga County, Ohio. The property is legally described in Schedule 1 attached hereto. Date: July 28, 1998 R E C I T A L S A. Borrower is the owner of fee simple title to the Property. Lender is the owner of a judgment lien in Cuyahoga County Common Pleas Court Case No. 278338 in the original amount of $2,724,991.06 with 12.5% interest from January 18, 1995 and costs in the amount of $25.00, filed January 18, 1995 at 4:29 p.m. as Cuyahoga County Common Pleas Judgment No. JL000738 (the "Judgment Lien"). B. As reflected in that certain Assignment of Mortgage dated as of March 31, 1998 recorded in Volume 98-03753, Page 21 of the Cuyahoga County Records, and that certain Assignment of Mortgage dated March 31, 1998 and recorded in Volume 98-03753, Page 24 of the Cuyahoga County Records, Lender is the holder of one first mortgage on the portion of the Property located in Strongsville, Ohio, namely that certain Mortgage and Security Agreement dated August 31, 1988 made by Angeles Partners XV, recorded in Volume 88-4558, Page 68 of the Cuyahoga County Records (the "Strongsville Mortgage"), and one first mortgage on the portion of the Property located in Solon, Ohio, namely that Mortgage and Security Agreement dated August 31, 1988 made by Angeles Partners XV, recorded in Volume 88-4558, Page 26 of the Cuyahoga County Records (the "Solon Mortgage," together with the Strongsville Mortgage, the "Mortgages"), as well as the notes secured thereby (collectively, the "Notes"). C. The Property presently is the subject of a foreclosure action styled Angeles Mortgage Investment Trust v. Angeles Partners XV, et al., No. 311749, pending in the Court of Common Pleas of Cuyahoga County, Ohio (the "Action"), in which Lender has sought to foreclose the Judgment Lien and the Mortgages. A receiver (the "Receiver") has been appointed in the Action to preserve and maintain the Property and to collect all rents and income (the "Income") from same. Final judgment has been entered in the Action, in the form of that certain Magistrate's Decision, filed as of December 31, 1997 and adopted by the Court as of January 23, 1998 (the "Magistrate's Decision"). D. As determined in the Magistrate's Decision, the amount owed by Borrower as of August 19, 1997 on the debt secured by the Judgment Lien is $2,224,991.06 plus interest. As of July 1, 1998, the amount owed with interest is $3,477,622.77. As further determined in the Magistrate's Decision, the amount owed by Borrower as of August 19, 1997 on the note secured by the Strongsville Mortgage is $2,090,000 plus interest. As further determined in the Magistrate's Decision, the amount owed by Borrower as of August 19, 1997 on the note secured by the Solon Mortgage is $1,775,000, plus interest. E. By side letter agreement (the "Letter Agreement") dated the date hereof, Lender, upon the terms stated in the Letter Agreement, has agreed to provide Borrower with a Credit (as that term is defined in the Letter Agreement) upon the consummation of this agreement by the filing of the deeds (as defined below) for record. F. Lender, in its sole discretion, may elect to assign some or all of its rights under this Agreement and/or direct that conveyance of the Property be made to a purchaser designated by Lender. NOW, THEREFORE, in consideration of the foregoing recitals and the mutual provisions and covenants made herein, and the receipt of other good and valuable consideration, the receipt and sufficiency whereof are hereby acknowledged, Borrower and Lender hereby agree that: AGREEMENTS 1. Consideration. The consideration for the conveyance of the Property to Lender by Borrower shall be the Credit. It is the intention of the parties hereto that the delivery of the Deeds (as defined below) and the Credit shall constitute a final and complete settlement of all obligations between them arising from, related to or connected with the Property. 2. Conveyance. The Property shall be conveyed by Borrower to Lender, or at Lender's option, to Lender's designee, in lieu of Lender foreclosing upon the Judgment Lien and the Mortgages by a good and sufficient limited warranty deed for each parcel of the Property (the "Deeds"), each warranting the Property to be free and clear of liens and encumbrances by, from, through, or under the Borrower except matters of record, including without limitation, (a) liens and encumbrances of record, (b) zoning ordinances, (c) easements and rights of way of record, (d) conditions, limitations, and restrictions of record, and (e) the Mortgages. 3. Title Exceptions. Borrower and Lender have been furnished with a Preliminary Judicial Report and a Final Judicial Report ("Judicial Reports") issued by the Stewart Title Guaranty Company, Order No. ST 18846, showing title to the Property to be subject to (a) taxes and assessments for the first half of 1998, (b) the Mortgages, (c) the Judgment Lien, (d) easement for sanitary sewer from National Engineering and Constructing Company to the City of Strongsville, dated August 4, 1964, filed for record September 8, 1964 and recorded in Volume 11186, Page 351 of Cuyahoga County Records, (e) easement for underground utilities from National Engineering and Contracting Company to The Cleveland Electric Illuminating Company and the Ohio Bell Telephone Company dated April 27, 1967, filed for record May 1, 1967 and recorded in Volume 12113, Page 753 of Cuyahoga County Records (f) appurtenant easement for gas storage and transmission system from Leonard P. Gilbert to Roger M. Haedinges, dated November 13, 1975, filed for record November 25, 1975, and recorded in Volume 13895, Page 105 of Cuyahoga County Records, (g) easement for underground utilities from Virginia Holding Corporation to the Cleveland Electric Illuminating Company and The Ohio Bell Telephone Company dated June 29, 1970, filed for record July 7, 1970 and recorded in Volume 12722, page 57 of Cuyahoga County Records, (h) memorandum of lease agreement by and between Angeles Partners XV and J. C. Penney Company, Inc., dated September 30, 1994 filed for record January 18, 1995 and recorded in Volume 95-00348, Page 2 of Cuyahoga County Records. 4. Representations and Warranties. Lender represents and warrants that it has the power and authority to perform this Agreement, and that the officer signing this Agreement on its behalf, is duly authorized. 5. Escrow. As promptly as possible, an in any event on or before July 31, 1998, Lender shall deposit in escrow with the Squire, Sanders & Dempsey L.L.P. the Letter Agreement reflecting the Credit. As promptly as possible, and in any event, on or before July 31, 1998, Borrower shall deposit in escrow with Squire, Sanders & Dempsey L.L.P., the Deeds. As promptly after the foregoing items are deposited in escrow as is possible, and in any event within three (3) business days after such items are deposited, Squire, Sanders & Dempsey L.L.P. shall consummate the transaction provided for herein by (a) filing the Deeds for record and (b) delivery of the Letter Agreement to Borrower. 6. Casualty and Condemnation. (a) In the case of damage or destruction to the property before the Deeds are filed for record, Lender may at its option terminate this agreement without further obligation under this Agreement, or if Lender shall elect not to terminate this Agreement, the parties to this Agreement shall close the transaction as contemplated in accordance with the terms of this Agreement and Borrower shall assign to Lender or Lender's designee all insurance proceeds, including rental loss insurance proceeds, if any, for the period from and after the Deeds are filed until Property is fully restored, for such damage or destruction. (b) If before the Deeds are filed, any action, suit, or proceeding to condemn or take all or any part of the Property under the powers of eminent domain, is commenced, Lender shall have the right to terminate its obligations under this Agreement by notice in writing to Borrower given before the Deeds are filed. If the Lender shall elect not to terminate its obligations under this Agreement, Lender shall receive an absolute assignment on the date the relevant Deed is filed of the entire proceeds of or right to the condemnation award. Borrower shall convey the Property less that part so taken or subject to the condemnation proceeding, as the case may be. 7. Prorations. Taxes and assessments, tenant rents and utility costs, shall not be prorated. 8. Expenses. Lender or Lender's designee shall pay the cost of filing the Deed for record, and the title examination charges and related costs of obtaining the Judicial Report. 9. Dismissal of Action. Upon execution of this Agreement and receipt by Squire, Sanders & Dempsey L.L.P. in escrow of the Deeds and Letter Agreement, Lender shall file a Motion to Dismiss with regard to the Action in the form attached hereto as Exhibit A. 10. Income Upon termination of the Receivership and discharge of the Receiver, Lender shall be entitled to receive any income from the Property in the possession of the Receiver following termination and approval of the Receiver's final report. To this effect, Borrower shall execute the Agreed Motion to Terminate Receivership attached hereto as Exhibit B. 11. Broker. Borrower represents that the Property is not listed for sale with a real estate broker or agent, and Borrower and Lender agree that upon the filing of the Deed for record, no commission or other payment shall be due or payable to any entity or person. 12. Failure of Title. If for any reason whatsoever, the status of the title changes between the date hereof and the date of closing, then at the option of the Lender, this Agreement shall terminate, and Borrower and Lender shall be released of all liabilities and obligations hereunder; provided, however, that (a) the Lender may waive any title exception or defect which is not among Title Exceptions, and (b) Borrower shall have thirty (30) days after the change of status of title in which to cure the same unless the change is acceptable to Lender. The parties acknowledge that the Property is subject to an unrecorded Agreement of Lease by and between Hayes Corp. (predecessor in interest to Borrower) and Westpark packaging, inc. ("Westpark"), dated March 29, 1983 as amended by Amendment of Lease Agreement dated August 24, 1984, First Addendum to Lease dated August 30, 1988, Second Addendum to Lease dated March 21, 1991, Third Amendment of Lease dated October 23, 1992, Fourth Amendment of Lease dated January 27, 1994 and Fifth Amendment to Lease Agreement dated January 30, 1997 (collectively, the "Lease"). Pursuant to the Lease, Westpark may have a right of first refusal with respect to some portion of the Property. 13. Restoration of Rights and Remedies. If for any reason whatsoever this Agreement shall terminate and not be consummated in accordance with its terms and conditions, the Lender shall be fully restored to all rights and remedies which it has at law or in equity or pursuant to the Judgment Lien or Mortgages, and Borrower shall not be entitled to, and shall not raise the existence or termination of this Agreement as a defense to any action which Lender may institute against Borrower pursuant to the Judgment Lien or Mortgages. 14. Notices. All notices, demands and requests given or required or desired to be given hereunder shall be in writing and shall be delivered in person or by overnight express delivery or by United States certified mail, return receipt requested, postage prepaid, as follows: To Borrower: Angeles Partners XV c/o Insignia Properties Trust One Insignia Financial Plaza Greenville, South Carolina 29602 Attention: John LeBeau To Lender Angeles Mortgage Investment Trust 340 N. Westlake Blvd., Suite 230 Westlake Village, CA 91362 Attention: Anna Merguerian with a copy to: Squire, Sanders & Dempsey 4900 Key Tower, 127 Public Square Cleveland, Ohio 44114 Attention: Dynda A. Thomas 15. Counterparts. This Agreement may be executed in several counterparts, each of which shall, for all purposes, be deemed an original. All of such counterparts, taken together, shall constitute one and the same agreement. 16. No Merger. It is the express intention of the Borrower and the Lender that the mortgage estate created by the Judgment Lien, the Mortgages, and fee ownership are not intended to merge as a result of the conveyances contemplated hereby, but shall remain separate. 17. Entire Agreement. This Agreement, the Deeds, the Letter Agreement and any other instrument delivered hereunder, constitutes the entire agreement of the parties hereto as to the subject matter hereof, and there are no agreements, representations, warranties or promises as to the subject matter hereof which are not set forth herein. 18. Successors and Assigns. This Agreement shall be binding on and inure to the benefit of Borrower and Lender, their respective successors, assigns, grantees, and legal representatives. Borrower and Lender have executed this Agreement by and through their respective duly authorized officers and partners as of the date set forth above. ANGELES PARTNERS XV, a California limited partnership By: Angeles Realty Corporation II a California Corporation Its General Partner By: /s/ Robert D. Long, Jr. Robert D. Long, Jr. Its Vice President ANGELES MORTGAGE INVESTMENT TRUST a California business trust By: /s/ Anna Merguerian Anna Merguerian Its Vice President -----END PRIVACY-ENHANCED MESSAGE-----