0000950168-95-000711.txt : 19950821 0000950168-95-000711.hdr.sgml : 19950821 ACCESSION NUMBER: 0000950168-95-000711 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 10 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950814 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ANGELES PARTNERS 16 CENTRAL INDEX KEY: 0000812187 STANDARD INDUSTRIAL CLASSIFICATION: 6500 IRS NUMBER: 954106417 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-16209 FILM NUMBER: 95563669 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 INSIGNIA AP16 82126 10-Q FORM 10-QSB.--QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Quarterly or Transitional Report (As last amended by 34-32231, eff. 6/3/93.) 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, 1995 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT For the transition period.........to......... Commission file number 0-16209 ANGELES PARTNERS 16 (Exact name of small business issuer as specified in its charter) California 95-4106417 (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) (Zip Code) Issuer's telephone number (803) 239-1000 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 16 BALANCE SHEET (Unaudited) June 30, 1995
Assets Cash: Unrestricted $ 814,695 Restricted--tenant security deposits 61,750 Accounts receivable 8,842 Escrow for taxes 239,953 Restricted escrows 1,439,055 Other assets 228,923 Investment properties: Land $ 1,075,589 Buildings and related personal property 10,566,293 11,641,882 Less accumulated depreciation (2,861,661) 8,780,221 $11,573,439 Liabilities and Partners' (Deficit) Liabilities Accounts payable $ 29,248 Tenant security deposits 64,877 Accrued taxes 321,994 Other liabilities 2,651,644 Notes payable, including $2,446,947 in default 13,680,446 Partners' Deficit General partner $ (169,549) Limited partners' capital (14,033 units issued and outstanding) (5,005,221) (5,174,770) $11,573,439
See Accompanying Notes to Financial Statements 1 b) ANGELES PARTNERS 16 STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended Six Months Ended June 30, June 30, 1995 1994 1995 1994 Revenues: Rental income $ 687,162 $ 813,919 $1,546,174 $ 1,739,346 Other income 47,228 32,686 93,714 88,553 Total revenues 734,390 846,605 1,639,888 1,827,899 Expenses: Operating 979,773 225,222 1,234,258 519,015 General and administrative 49,856 72,163 94,074 138,572 Property management fees 40,059 42,952 77,465 92,758 Maintenance 85,285 64,944 150,094 151,654 Depreciation 167,156 165,329 328,092 330,081 Amortization 6,331 1,717 11,833 3,433 Interest 447,478 473,728 919,764 934,938 Property taxes 255,521 332,125 531,935 581,621 Bad debt expense (recovery) -- 57,157 (4,226) 25,110 Tenant reimbursements (234,606) (363,442) (298,142) (826,805) Total expenses 1,796,853 1,071,895 3,045,147 1,950,377 Loss before gain on sale of investment property and extraordinary item (1,062,463) (225,290) (1,405,259) (122,478) Gain on sale of investment property 610,767 -- 610,767 -- Loss before extraordinary item (451,696) -- (794,492) -- Extraordinary item - gain on early extinguishment of debt 56,203 -- 56,203 -- Net loss $ (395,493) $ (225,290) $ (738,289) $ (122,478) Net loss allocated to general partner (1%) $ (3,955) $ (2,253) $ (7,383) $ (1,225) Net loss allocated to limited partners (99%) (391,538) (223,037) (730,906) (121,253) $ (395,493) $ (225,290) $ (738,289) $ (122,478)
See Accompanying Notes to Financial Statements 2 b) ANGELES PARTNERS 16 STATEMENTS OF OPERATIONS - (Continued) (Unaudited)
Three Months Ended Six Months Ended June 30, June 30, 1995 1994 1995 1994 Per limited partnership unit: Loss before extraordinary item $ (31.87) $ (15.88) $ (56.05) $ (8.63) Extraordinary item 3.97 -- 3.97 -- Net loss $ (27.90) $ (15.88) $ (52.08) $ (8.63)
See Accompanying Notes to Financial Statements 3 c) ANGELES PARTNERS 16 STATEMENT OF CHANGES IN PARTNERS' (DEFICIT) (Unaudited)
Limited Partnership General Limited Units Partners Partners Total Original capital contributions 14,050 $ 1,000 $14,050,000 $14,051,000 Partners' deficit at December 31, 1994 14,033 $(162,166) $(4,274,315) $(4,436,481) Net loss for the six months ended June 30, 1995 -- (7,383) (730,906) (738,289) Partners' deficit at June 30, 1995 14,033 $(169,549) $(5,005,221) $(5,174,770)
See Accompanying Notes to Financial Statements 4 d) ANGELES PARTNERS 16 STATEMENTS OF CASH FLOWS (Unaudited)
Six Months Ended June 30, 1995 1994 Cash flows from operating activities: Net loss $ (738,289) $ (122,478) Adjustments to reconcile net loss to net cash (used in) provided by operating activities: Depreciation 328,092 330,081 Amortization of loan costs and leasing commissions 25,179 17,776 Gain on sale of investment property (610,767) -- Bad debt (recovery) expense (4,226) 25,110 Extraordinary item - gain on early extinguishment of debt (56,203) -- Change in accounts: Restricted cash 7,986 (8,811) Accounts receivable 43,898 (215,101) Escrows for taxes 68,253 61,193 Other assets (40,874) -- Accounts payable 1,767 (74,163) Tenant security deposit liabilities 6,891 1,673 Accrued taxes (21,505) (523,883) Other liabilities (246,977) 703,907 Net cash (used in) provided by operating activities (1,236,775) 195,304 Cash flows from investing activities: Property improvements and replacements (269,206) (19,987) Proceeds from sale of investment property 9,862,641 -- Deposits to restricted escrows (1,345,580) (43,725) Withdrawals from restricted escrows 83,546 -- Net cash provided by (used in) investing activities 8,331,401 (63,712)
See Accompanying Notes to Financial Statements 5 d) ANGELES PARTNERS 16 STATEMENTS OF CASH FLOWS (Continued) (Unaudited)
Six Months Ended June 30, 1995 1994 Cash flows from financing activities: Repayment of notes payable $(8,035,528) $ -- Payments on notes payable (17,659) (39,837) Net cash used in financing activities (8,053,187) (39,837) Net (decrease) increase in cash (958,561) 91,755 Cash at beginning of period 1,773,256 983,119 Cash at end of period $ 814,695 $1,074,874 Supplemental disclosure of cash flow flow information: Cash paid for interest $ 1,889,668 $ 236,598
See Accompanying Notes to Financial Statements 6 e) ANGELES PARTNERS 16 NOTES TO FINANCIAL STATEMENTS (Unaudited) Note A - Going Concern The financial statements have been prepared assuming the Partnership will continue as a going concern. The Partnership has incurred recurring operating losses and continues to suffer from inadequate liquidity. In addition, there are limited identified capital resources available to the Partnership. As a result, the Partnership has not had cash available to perform the substantial rehabilitation necessary at each of the investment properties. The Partnership is in default on $2,446,947 of its indebtedness due to its inability to make interest and principal payments when due. The debt is unsecured debt of the Partnership payable to Angeles Mortgage Investment Trust ("AMIT"). On June 12, 1995, the Partnership sold the investment property, North Prior Industrial Park, for $10,450,000 to an unrelated third party. The net proceeds were used to pay the first mortgage and related accrued interest. Accrued interest of $56,203 related to the first mortgage was forgiven, and a total gain of $610,767 was realized on the sale. A principal payment of $117,384 was made on the AMIT debt, which will now become unsecured debt of the Partnership. (See Note D for further details). Prior to the sale, this property had been in receivership. The Partnership is presently paying non-debt related expenses of the properties, is current on its mortgages on its other two investment properties and is negotiating forbearance agreements with AMIT on the debt in default. As a result of the above conditions, there is substantial doubt about the Partnership's ability to continue as a going concern. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability or classification of assets or amounts or classification of liabilities that may result from these uncertainties. Note B - Basis of Presentation The accompanying unaudited financial statements 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 the General Partner, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six month period 7 B - Basis of Presentation (continued) ended June 30, 1995, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 1995. 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, 1994. Certain reclassifications have been made to the June 30, 1994, information to conform to the June 30, 1995, presentation. Note C - Transactions with Affiliated Parties The 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 payments to affiliates for services and as reimbursement of certain expenses incurred by affiliates on behalf of the Partnership. The following payments were made to the General Partner and affiliates during the six months ended June 30, 1995 and 1994:
1995 1994 Property management fees $77,465 $92,758 Reimbursement for services of affiliates 46,681 80,964 Marketing services 112 595
The Partnership insures its properties under a master policy through an agency and insurer unaffiliated with the General Partner. An affiliate of the 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 General Partner, who receives payment on these obligations from the agent. The amount of the Partnership's insurance premiums accruing to the benefit of the affiliate of the General Partner by virtue of the agent's obligations is not significant. 8 Note C - Transactions with Affiliated Parties (continued) In November 1992, Angeles Acceptance Pool, L.P. ("AAP"), a Delaware limited partnership was organized to acquire and hold the obligations evidencing the working capital loan previously provided to the Partnership by Angeles Capital Investments, Inc. ("ACII"). Angeles Corporation ("Angeles") is the 99% limited partner of AAP and Angeles Acceptance Directives, Inc. ("AAD"), an affiliate of the 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 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. This working capital loan funded the Partnership's operating deficits in prior years. Total indebtedness, which is included as a note payable, was $1,516,789 at June 30, 1995, and June 30, 1994, with monthly interest only payments at prime plus 2%. Principal is to be paid the earlier of i) the availability of funds, ii) the sale of one or more properties owned by the Partnership, or iii) November 25, 1997. Total interest expense for this loan was $82,791 and $54,984 for the six months ended June 30, 1995 and 1994, respectively. AMIT currently holds two unsecured note receivables from the Partnership. Total indebtedness of $2,446,947 and $2,564,331 was in default at June 30, 1995, and June 30, 1994, respectively. A principal payment of $117,384 was made as a result of the sale of North Prior on June 12, 1995. Total interest expense on this financing was $220,622 and $193,415 for the six months ended June 30, 1995 and 1994, respectively. Accrued interest was $939,560 at June 30, 1995. MAE GP Corporation ("MAE GP"), an affiliate of the General Partner, owns 1,675,113 Class B Shares of AMIT. MAE GP has the option to convert these Class B Shares, in whole or in part, into Class A Shares on the basis of 1 Class A Share for every 49 Class B Shares. These Class B Shares entitle MAE GP to receive 1% of the distributions of net cash distributed by AMIT. These Class B Shares also entitle MAE GP to vote on the same basis as Class A Shares which allows MAE GP to vote approximately 33% of the total shares (unless and until converted to Class A Shares at which time the percentage of the vote controlled represented by the shares held by MAE GP would approximate 1% of the vote). Between the date of acquisition of these shares (November 24, 1992) and March 31, 1995, MAE GP has declined to vote these shares. Since that date, MAE GP voted its shares at the 1995 annual meeting in connection with the election of trustees and other matters. MAE GP has not exerted and continues to decline to exert any management control over or participate in the management of AMIT. However, MAE GP may choose to vote these shares as it deems appropriate in the future. 9 Note C - Transactions with Affiliated Parties (continued) 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 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, but in no event prior to November 9, 1997. AMIT delivered to MAE GP cash in the sum of $250,000 at closing, which occurred April 14, 1995, as payment for the option. Upon exercise of the option, AMIT would remit to MAE GP an additional $94,000. Simultaneously with the execution of the option, MAE GP executed an irrevocable proxy in favor of AMIT the result of which is MAE GP will be able to vote the Class B 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. On those matters, MAE GP granted to the AMIT trustees, in their capacity as trustees of AMIT, proxies with regard to the Class B Shares instructing such trustees to vote said Class B Shares in accordance with the vote of the majority of the Class A Shares voting to be determined without consideration of the votes of "Excess Class A Shares" as defined in Section 6.13 of the Declaration of Trust of AMIT. Note D - Contingencies On June 12, 1995, North Prior Industrial Park was sold for $10,450,000 to an unrelated party. The net proceeds were used to pay off the first mortgage and related accrued interest. Accrued interest of $56,203 related to the first mortgage was forgiven. Proceeds were also used to pay down the AMIT debt in the amount of $117,384. A gain was recognized on the sale of $610,767. The AMIT debt that had been the second mortgage of the property became unsecured debt of the Partnership, the principal balance of which is $1,587,420, which is currently in default. As required by the sales agreement the Partnership has set up three escrows as described below: Tenant Improvements Escrow - This $200,000 escrow is being held pending completion of tenant improvements that were begun by the receiver prior to the sale. As the improvement projects are completed the funds will be disbursed. The projects are expected to be completed prior to December 31, 1995. All funds are expected to be used in the improvement projects; however, any remaining funds will be used to reduce the AMIT debt discussed above. Environmental Escrow - This $900,000 escrow was established for costs associated with fuel oil contamination at the property. In January 1993, a local fuel oil distributor pumped fuel oil into a testing well instead of into the storage tank at North Prior Industrial Park. The Partnership notified the necessary authorities and engaged an environmental engineering firm to develop a plan of action to clean up the site. The 10 NOTE D - Contingencies (continued) cost of the clean up, which is not covered by insurance, is estimated to be approximately $900,000 over a five year period. A liability was recorded for $200,000 in 1993, an additional liability was recorded during the three month period ended June 30, 1995, for the amount of $746,488. During 1994, the Partnership paid $46,488 relating to the remediation; a balance of $900,000 is included in "Other liabilities" at June 30, 1995. The Partnership entered into an Environmental Undertaking and Indemnity Agreement with the buyer of the property limiting the Partnership's liability with regard to the clean up of this site to the balance of the escrow account. This agreement will terminate when the Partnership receives a "Site Closure Letter" from the Minnesota Pollution and Control Agency. Upon receipt of this letter, any remaining funds in the escrow account will be used to pay down the AMIT debt discussed above. In January 1995, the holder of the first mortgage, along with the receiver, initiated two separate lawsuits against the Partnership, among others, for damages sustained as a result of the above. The General Partner believes that the former holder of the first mortgage will not pursue their lawsuit. The General Partner also believes that prior to December 31, 1995, the Partnership will be substituted in as the Plaintiff in the lawsuit initiated by the former receiver in a suit filed against the fuel distributor, among others. However, the outcome of these claims is uncertain and their effect on the Partnership cannot presently be determined. North Prior Industrial Park also had ground water contamination that originated off site. In 1994 the Minnesota Pollution and Control Agency issued a "No Further Action" letter to the party responsible for causing the problem. There have been no claims against the Partnership for this matter. 11 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS The Partnership's investment properties consist of two apartment complexes. The following table sets forth the average occupancy of the properties for the six months ended June 30, 1995 and 1994:
Average Occupancy Property 1995 1994 Whispering Pines Apartments Fitchburg, Wisconsin 94% 99% Silver Ridge Apartments Maplewood, Minnesota 92% 89%
The Partnership realized a net loss for the three and six months ended June 30, 1995, of $395,493 and $738,289, respectively as compared to a net loss for the three and six months ended June 30, 1994, of $225,290 and $122,478 respectively. The increase in the net loss in 1995 as compared to 1994 is due to the accrual of $746,488 in the second quarter of 1995 for the estimated costs associated with the environmental clean up of North Prior Industrial Park (See Note D for additional information). Partially offsetting this expense is the gain recognized on the sale of North Prior Industrial Park on June 12, 1995 (See discussion below). Rental income decreased for the three and six months ended June 30, 1995, as compared to the three and six months ended June 30, 1994, due to the sale of North Prior on June 12, 1995, resulting in the loss of rental revenue at this property for the remainder of the month of June. Also contributing to the decrease in rental income was the decrease in occupancy at Whispering Pines Apartments, partially offset by the increase in occupancy at Silver Ridge Apartments. Operating expenses increased due to the estimated clean up costs at North Prior, as discussed above, which was partially offset by decreases in gas bills, administrative costs, and liability insurance at North Prior Industrial Park for the three and six months ended June 30, 1995, versus the three and six months ended June 30, 1994. General and administrative expenses decreased primarily due to decreased cost reimbursements for partnership accounting, asset management and investor services. The decrease in property management fees is attributable to the decrease in rental income, as such fees are based on revenue. Amortization expense increased for the three and six months ended June 30, 1995, as compared to the three and six months ended June 30, 1994, due to the addition of lease commissions at North Prior Industrial Park during the first six months of 1995. Property tax expense decreased due to lower tax bills at North Prior Industrial Park. The bad debt recovery for the six months ended June 30, 1995, relates to past due amounts received by North Prior Industrial Park that had been previously reserved. The bad debt expense for the three and six months ended June 30, 1994, can be attributed to the reserving of accounts receivable at North Prior Industrial Park that were considered uncollectible. Finally, more than offsetting the above decreases in expense was the decrease in tenant reimbursements for the three and six months ended June 30, 1995, as compared to the three and six months ended June 30, 12 1994. The decreases in operating and tax expenses contributed to the decrease in tenant reimbursements. Furthermore, due to changes in management companies of North Prior Industrial Park, the detailed data needed to accurately estimate the receivable was not available and, therefore, tenant reimbursements were underestimated in 1993 resulting in a large amount of recoveries in the first six months of 1994. As part of the ongoing business plan of the Partnership, the 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 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 General Partner will be able to sustain such a plan. At June 30, 1995, the Partnership had unrestricted cash of $814,695 versus $1,074,874 at June 30, 1994. Net cash used in operating activities increased for the six months ended June 30, 1995, due to the increase in other liabilities. Net cash provided by investing activities increased due to the proceeds from the sale of North Prior Industrial Park. Net cash used in financing activities increased due to payments made on mortgage principal balances from the proceeds of the sale of North Prior Industrial Park. 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 various properties to adequately maintain the physical assets. Such assets are currently thought to be sufficient for any near-term needs of the Partnership. The financial statements have been prepared assuming the Partnership will continue as a going concern. The Partnership has incurred recurring operating losses and continues to suffer from inadequate liquidity. In addition, there are limited identified capital resources available to the Partnership. As a result, the Partnership has not had cash available to perform the substantial rehabilitation necessary at each of the investment properties. The Partnership is in default on $2,446,947 of its indebtedness due to its inability to make interest and principal payments when due. The debt is unsecured debt of the Partnership payable to Angeles Mortgage Investment Trust ("AMIT"). On June 12, 1995, the Partnership sold the investment property, North Prior Industrial Park, for $10,450,000 to an unrelated third party. The net proceeds were used to pay the first mortgage and related accrued interest. Accrued interest of $56,203 related to the first mortgage was forgiven, and a total gain of $610,767 was realized on the sale. A principal payment of $117,384 was made on the AMIT debt, which will now become unsecured debt of the Partnership. (See Note D for further details). 13 The Partnership is presently paying non-debt related expenses of the properties, is current on its mortgages on its other two investment properties and is negotiating forbearance agreements with AMIT on the debt in default. As a result of the above conditions, there is substantial doubt about the Partnership's ability to continue as a going concern. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability or classification of assets or amounts or classification of liabilities that may result from these uncertainties. The second mortgage secured by the Silver Ridge Apartments property in the amount of $775,000 matures in December 1995. The General Partner intends to refinance this indebtedness. 14 PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS In January 1993, a local fuel oil distributor pumped fuel oil into a testing well instead of into the storage tank at North Prior Industrial Park. The Partnership notified the necessary authorities and engaged an environmental engineering firm to develop a plan of action to clean up the site. The cost of the clean up, which is not covered by insurance, is estimated to be approximately $900,000 over a five year period. A liability was recorded for $200,000 in 1993, an additional liability was recorded during the three month period ended June 30, 1995, for the amount of $746,488. During 1994, the Partnership paid $46,488 relating to the remediation; a balance of $900,000 is included in "Other liabilities" at June 30, 1995. The Partnership entered into an Environmental Undertaking and Indemnity Agreement with the buyer of the property limiting the Partnership's liability with regard to the clean up of this site to the balance of the escrow account. This agreement will terminate when the Partnership receives a "Site Closure Letter" from the Minnesota Pollution and Control Agency. Upon receipt of this letter, any remaining funds in the escrow account will be used to pay down the AMIT debt discussed above. In January 1995, the holder of the first mortgage, along with the receiver, initiated two separate lawsuits against the Partnership, among others, for damages sustained as a result of the above. The General Partner believes that the former holder of the first mortgage will not pursue their lawsuit. The General Partner also believes that prior to December 31, 1995, the Partnership will be substituted in as the Plaintiff in the lawsuit initiated by the former receiver in a suit filed against the fuel distributor, among others. However, the outcome of these claims is uncertain and their effect on the Partnership cannot presently be determined. AMIT, a real estate investment trust, made a loan to the Partnership in October 1992 in the amount of $1,879,804, secured by the Partnership's real property known as North Prior Industrial Park, on a non-recourse basis. In January 1993, the Partnership repaid $175,000 in principal on this loan. As mentioned previously, the Partnership paid $117,384 in principal on this loan from the sales proceeds of this property. The Partnership believed that the loan was a non-recourse obligation. AMIT has asserted that the loan is recourse by virtue of a certain amendment purportedly entered into as of November 1, 1992, but which the Partnership has been informed and believes was actually executed in December 1992. The Partnership has been further informed and believes that the amendment may have been executed at the direction of Angeles by an individual in his purported capacity as an officer of the General Partner of the Partnership at a time when such person was not in fact an officer of such entity. Accordingly, the Partnership has filed a Proof of Claim in the Angeles bankruptcy proceeding with respect to such purported amendment. Additionally, the Partnership filed a Proof of Claim in the Angeles Funding Corporation and Angeles Real Estate Corporation bankruptcy proceedings on similar grounds. Both Angeles Funding Corporation and Angeles Real Estate Corporation are affiliates of Angeles. Subsequently, the Partnership has determined that the original note agreement was in fact recourse and therefore, the Partnership's Proofs of Claim will be withdrawn. 15 MAE GP Corporation ("MAE GP"), an affiliate of the General Partner, owns 1,675,113 Class B Shares of AMIT. MAE GP has the option to convert these Class B Shares, in whole or in part, into Class A Shares on the basis of 1 Class A Share for every 49 Class B Shares. These Class B Shares entitle MAE GP to receive 1% of the distributions of net cash distributed by AMIT. These Class B Shares also entitle MAE GP to vote on the same basis as Class A Shares which allows MAE GP to vote approximately 33% of the total shares (unless and until converted to Class A Shares at which time the percentage of the vote controlled represented by the shares held by MAE GP would approximate 1% of the vote). Between the date of acquisition of these shares (November 24, 1992) and March 31, 1995, MAE GP has declined to vote these shares. Since that date, MAE GP voted its shares at the 1995 annual meeting in connection with the election of trustees and other matters. MAE GP has not exerted, and continues to decline to exert, any management control over or participate in the management of AMIT. However, MAE GP may choose to vote these shares as it deems appropriate in the future. 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 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, but in no event prior to November 9, 1997. AMIT delivered to MAE GP cash in the sum of $250,000 at closing, which occurred April 14, 1995, as payment for the option. Upon exercise of the option, AMIT would remit to MAE GP an additional $94,000. Simultaneously with the execution of the option, MAE GP executed an irrevocable proxy in favor of AMIT the result of which is MAE GP will be able to vote the Class B 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. On those matters, MAE GP granted to the AMIT trustees, in their capacity as trustees of AMIT, proxies with regard to the Class B Shares instructing such trustees to vote said Class B Shares in accordance with the vote of the majority of the Class A Shares voting to be determined without consideration of the votes of "Excess Class A Shares" as defined in Section 6.13 of the Declaration of Trust of AMIT. The Registrant is unaware of any other pending or outstanding litigation that is not of a routine nature. The General Partner of the Registrant 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: 10.11 Purchase Agreement with Exhibits between Angeles Partners 16 and North Prior, L.L.C. dated March 3, 1993, documenting the sale of North Prior Industrial Park. 10.12 First Amendment to Purchase Agreement with Exhibits between Angeles Partners 16 and North Prior, L.L.C. dated June 12, 1995, documenting the sale of North Prior Industrial Park. 16 10.13 Assignment and Assumption of Leases with Exhibits between Angeles Partners 16 and North Prior, L.L.C. dated June 12, 1995. 10.14 Assignment and Assumption of Service Contracts with Exhibits between Angeles Partners 16 and North Prior Industrial, L.L.C. dated June 12, 1995. 10.15 Assignment of Permits and Warranties with Exhibits between Angeles Partners 16 and North Prior, L.L.C. dated June 12, 1995. 10.16 Assignment of Rents and Leases with Exhibits between Angeles Partners 16 and Towle Real Estate Company dated June 12, 1995. 10.17 Assignment of Service Contracts with Exhibits between Angeles Partners 16 and Towle Real Estate Company dated June 12, 1995. 10.18 Assignment of Permits and Warranties with Exhibits between Angeles Partners 16 and Towle Real Estate Company dated June 12, 1995. Exhibit 27, Financial Data Schedule, is filed as an exhibit to this report. b) Reports on Form 8-K: A Form 8-K dated June 12, 1995, was filed reporting the sale of North Prior Industrial Park, located at 429 North Prior Avenue, 475 North Prior Avenue, and 545 North Prior Avenue in St. Paul, Minnesota. 17 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 16 By: Angeles Realty Corporation II General Partner By: Carroll D. Vinson President By: Robert D. Long, Jr. Controller and Principal Accounting Officer Date: August 14, 1995 18 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 16 By: Angeles Realty Corporation II General Partner By: /s/Carroll D. Vinson Carroll D. Vinson President By: /s/Robert D. Long Robert D. Long Controller and Principal Accounting Officer Date: August 11, 1995 18 EX-10 2 EXHIBIT 10.11 PURCHASE AGREEMENT THIS AGREEMENT, Made as of this 3rd day of March, 1993 by and between Angeles Partners XVI ("Seller"), and North Prior Partnership, or assigns, ("Buyer"), WITNESS: WHEREAS, Seller is the owner of The North Prior Industrial Park (429,475,545 North Prior Avenue), situated in the City of St. Paul, county of Ramsey, State of Minnesota, legal to conform the address. Approximately 613,592 square foot warehouse and office. Legal description to be approved by Seller. WHEREAS, Seller desires to sell the Property, and Buyer desires to purchase the Property upon the terms and conditions herein set forth: 1. PURCHASE PRICE AND PAYMENT: The Purchase Price is $10,650,000 and is payable as follows: a. $150,000 earnest money paid upon acceptance of this agreement. The earnest money shall be deposited in an interest bearing account to the Credit of Buyer; and b. $10,500,000 cash on May 31, 1993 the Date of Closing. 2. TITLE MATTERS: a. Subject to performance by the Buyer, the Seller agrees to execute and deliver a Warranty Deed conveying marketable title to said Property subject only to the following exceptions: 1. Building and Zoning Laws. 2. Reservation of any minerals or mineral rights to the State of Minnesota. 3. Utility and drainage easements disclosed to Buyer which do not interfere with present improvements. 4. Rights of tenants as follows: None unless disclosed in Section 3 hereof. 5. Restriction disclosed to Buyer relating to use or improvement of the property without effective forfeiture provision. b. The Seller further agrees to deliver possession not later than closing provided that all conditions of this agreement have been complied with. c. The Seller shall, within 10 days of acceptance of this agreement, furnish an abstract of title, or a commitment for a title policy, or a Registered Property Abstract certified to date to include proper searches covering bankruptcies, and State and Federal judgments and liens, and levied and pending special assessments. The Seller shall be allowed 35 days to make such title marketable. Pending correction of title the payments hereunder required shall be postponed, but upon correction of title and within 10 days after written notice to the buyer, the parties shall perform this agreement according to its terms. If said title is not marketable and is not made so within 35 days from the date of written objections as above provided, this agreement shall be null and void, at option of the Buyer, and neither principal shall be liable for damages hereunder to the other principal. All money and interest earned paid by the Buyer shall be refunded. If the title to said property is found marketable or is so made within said time, and if the Buyer shall default in any of the agreements and continue in default for a period of 10 days, then the Seller may terminate this contract and on such terminating all the payments made upon this contract shall be retained by said Seller and said agent, as their respective interests may appear, as liquidated damages, time being of essence, hereof. This provision shall not deprive either party of the right of enforcing the specific performance of this contract provided such contract shall not be terminated as aforesaid, and provided action to enforce such specific performance shall be commenced within six months after such right of action shall arise. 3. DOCUMENT INSPECTION Within ten (10) days of acceptance of this Agreement, Seller shall provide Buyer with the following information and statements which Seller certifies as true and correct in all material respects. A. Copies of such surveys and building plans of the Property as Seller may have. B. Copies of all lease agreements, easements, restrictions, and other encumbrances or servitudes benefitting or burdening the subject property. C. Real Estate Tax Statements for 1989-1992 payable. D. A copy of any and all soil tests affecting the Property, as Seller may have. E. Any title opinions, title insurance policies, or other documents evidencing the status of title to the Property. F. A copy of utility bills from 1989-1992, as Seller may have. G. A list of any repairs or improvements made to Property in excess of $3,000 during 1988-1992, as Seller may have. Buyer shall have until April 19, 1993 in order to examine the same and perform any testing or inspections which the Buyer deems necessary. In the event that Buyer in its sole discretion is not satisfied with such inspections, testing, or examination of documents, Buyer may cancel this Agreement and in such event it shall be null and void. 4. REAL ESTATE TAXES, SPECIAL ASSESSMENTS, AND PRORATIONS Seller represents that all real estate taxes and installments of special assessments due and payable in the year prior to closing have been paid in full. Real estate taxes due and payable in the year of closing shall be pro-rated to the date of closing. Levied and pending special assessments as of closing shall be prorated to the date of closing. 5. REPRESENTATIONS AND WARRANTIES OF SELLER Seller represents, warrants and agrees now and as of the date of closing as follows: A. That Seller has received no notice or complaint from any governmental authority or insurance underwriter relating to the condition of or operations upon the property with the exception of that noted in paragraph 5H. B. That until the Closing Date, the Property will be maintained in the same or better condition as it is on the date of signing this Purchase Agreement. C. That the Seller has all rights, title and interest including easements, if any, necessary to operate the Property as presently operated by Seller and Seller agrees to convey to Buyer, together with the above-described property all of such rights, title and interest, of Seller in the Property, including without limitation, all of Seller's right, title and interest in any streets or easements adjacent thereto which may be vacated, abandoned or released in the future. D. That there are no existing proceedings nor, to the best of Seller's knowledge, any threatened proceedings against the Property or owners thereof, either administrative or judicial on account of any alleged violation of any laws, any rules, regulations or order, and that there is no litigation or condemnation pending, not to the best of Sellers' knowledge, threatened, which would affect the property or the use thereof by Buyer. Seller knows of no present proceeding which could cause additional special assessments against the Property. E. That no other person has any right to purchase all or any portion of the Property and Seller has or will have as of the date of closing, good and marketable title to the Property, free and clear of all liens, mortgages, charges and encumbrances except as expressly permitted hereunder. F. That there are no contracts, agreements or obligations relating to the Property which will extend beyond the Date of Closing, except those previously disclosed to Buyer in writing. G. That the property neither contains, releases or threatens to release any toxic materials, hazardous wastes or substances, or pollutants or contaminants within the meaning of any State or Federal superfund law, or environmental law, rule or order, except as noted in Paragraph H. H. Purchaser is aware of an existing monitoring well on the property and of the current on-going clean-up of an approximate 1,500 gallon fuel oil spill into said monitoring well. Seller shall release all documents relating to said well including any P.C. A. files. Seller agrees to perform any necessary clean-up of said well and agrees to escrow $100,000 until acceptable releases are given from the P.C.A. at which time all escrows and interest will be returned to Seller. 6. CONDEMNATION: The risk of loss from condemnation or threat thereof shall remain on Seller until closing. If prior to closing any of the Property is condemned under the power of eminent domain, is the subject of a threatened condemnation, or is conveyed to a condemning authority in lieu of condemnation, Seller shall notify Buyer in writing of the threat, condemnation or conveyance within three (3) days of its occurrence. Buyer shall within ten (10) days of the notice have the option of (a) proceeding with the closing, and receiving the award or condemnation payment (or an assignment thereof, if the same is not received by closing), or (b) cancelling this Purchase Agreement and receiving back the earnest money deposited. 7. Brokers: Owner hereby agrees to pay the brokerage commission due to Griffin Real Estate Company at closing, according to that separate commission between owner and Griffin ("Agent"). Owner and purchaser mutually agree that no other broker is involved in this transaction. SELLER: Angeles Partners XVI BUYER: North Prior Partnership By: Angeles Realty Corporation II, General Partner By: Jeffrey Goldberg By: Gerald L. Trooien ITS: Vice President ITS: Partner EX-10 3 EXHIBIT 10.12 DRAFT 6/8/95 FIRST AMENDMENT TO PURCHASE AGREEMENT THIS FIRST AMENDMENT TO PURCHASE AGREEMENT ("Amendment") is made as of June 12, 1995, between ANGELES PARTNERSHIP 16, a California limited partnership ("Seller") and NORTH PRIOR, L.L.C., a Delaware limited liability company ("Buyer"). BACKGROUND: A. Seller and North Prior Partnership ("NPP") entered into a Purchase Agreement dated as of March 3, 1993, regarding the sale and purchase of certain property known as The North Prior Industrial Park, which is legally described on attached Exhibit A (collectively, the "Property"). NPP has assigned its interest in the Purchase Agreement to Buyer. B. The Property has been contaminated by a petroleum spill ("Spill"). C. Seller and Buyer have agreed to amend the Purchase Agreement as set forth below. AGREEMENT: For valuable consideration, Seller and Buyer agree to amend the Purchase Agreement as follows: 1. Purchase Price Reduction. The purchase price for the Property is reduced from $10,650,000 to $10,450,000. 2. Closing Date; Extension. The closing date ("Closing Date") for the closing ("Closing") will be June 12, 1995; provided, however, that either party may extend the Closing Date to June 13, 1995 by giving written notice of such extension to the other party not later than June 12, 1995. 3. Title. Buyer has obtained a title insurance commitment (No. R-OR907111C) ("Commitment") from Old Republic National Title Insurance Company ("Title") and shall obtain a survey for the Property in the form required by Buyer's lender as soon as reasonably possible. Buyer's obligation to close the purchase of the Property shall be contingent upon resolution by Seller of any title objections raised by Buyer or Buyer's lender on or before the Closing Date and delivery by Title to Buyer and Buyer's lender of marked-up owners and lenders title insurance commitments at the Closing reflecting the title required by Buyer and its lender. Buyer agrees that Buyer will not object to any of the encumbrances listed as items 3 through 11 on Schedule B, Section 2 of the Commitment ("Permitted Encumbrances"). 4. Seller's Closing Documents. On the Closing Date, Seller shall execute and/or deliver to Buyer the following, all in form and content reasonably satisfactory to Buyer: 4.1.1 Deed. A limited warranty deed, conveying the Property to Buyer, free and clear of all encumbrances, except the Permitted Encumbrances and any other encumbrances that are acceptable to Buyer and its lender. 4.1.2 Assignment of Leases. An assignment and assumption of leases, conveying all leases of the Property ("Leases") and any security deposits, prepaid rents or collections and guarantees regarding the Leases to Buyer, free and clear of all encumbrances. 4.1.3 Assignment of Contracts. An assignment and assumption of contracts, conveying the contracts for the Property to Buyer, free and clear of all encumbrances, together with the consent of all parties having a right to consent to such assignment. 4.1.4 Assignment of Permits and Warranties. An assignment of permits and warranties, conveying all permits and warranties regarding the Property to Buyer, free and clear of all encumbrances, together with the consent of all parties, if any, having a right to consent to such assignment. 4.1.5 Certified Rent Roll. A rent roll, certified to by the receiver for the Property ("Receiver") and accurate as of the Closing Date. 4.1.6 Termination of Receivership. A termination, evidenced by documentation reasonably satisfactory to Buyer, Buyer's lender and Title, of the Receiver's receivership as to possession and control of the Property, effective on or before the Closing Date. 4.1.7 Notices to Tenants. Notices to the tenants under the Leases, signed by the Receiver, advising such tenants of the sale of the Property and directing them to make future lease payments to Buyer at the place designated by Buyer and confirming the transfer of security deposits and interest thereon. 4.1.8 Seller's Affidavit; Mechanics Lien Escrow. An Affidavit of Title by Seller indicating that on the Closing Date there are no outstanding, unsatisfied judgments, tax liens or bankruptcies against or involving Seller or the Property; that there has been no skill, labor or material furnished to the Real Property for which payment has not been made or for which mechanics' liens could be filed, except as has been escrowed for by Seller with Title; and that there are no other unrecorded interests in the Real Property, together with whatever standard owner's affidavit and/or indemnity (and/or escrow agreement as may be required by Title to issue owners and lenders title insurance policies with the standard exceptions waived. 4.9 Security Deposits and Prepaid Rents. All security deposits and prepaid rents under the Leases, including valid transfers of any noncash securities or documents held for such purposes. 4.10 FIRPTA Affidavit. A non-foreign affidavit, properly executed, containing such information as is required by Internal Revenue Code Section 1445(b)(2) and its regulations. 4.11 IRS Form. If required by Title, a Designation Agreement designating the "reporting person" for purposes of completing Internal Revenue Form 1099 and, if applicable, Internal Revenue Form 8594. 4.12 Well Certificate. A Certificate signed by Seller warranting that there are no "Wells" on the Property within the meaning of Minn. Stat. (Section Mark) 103I, or if there are "Wells", a Well Certificate in the form required by law. 4.13 Storage Tanks. If the Property contains or contained a storage tank, an affidavit with respect thereto, as required by Minn. Stat. (Section Mark) 116.48. 4.14 Environmental Undertaking and Indemnity Agreement. The Environmental Undertaking and Indemnity Agreement attached to this Amendment as Exhibit B. 4.15 Escrow Agreement. The Escrow Agreement attached to this Amendment as Exhibit C. 4.16 Other Documents. All other documents reasonably determined by Buyer to be necessary to transfer the Property to Buyer free and clear of all encumbrances. 5. Buyer's Closing Documents. On the Closing Date, Buyer will execute and/or deliver to Seller the following (collectively, "Buyer's Closing Documents"): 5.1 Assumption Agreements. The assignment and assumption agreements regarding the Leases and the Contracts referred to in Sections 4.2.and 4.3 above. 5.2 Title Documents. Such affidavits, Certificates of Real Estate Value or other documents as may be reasonably required by the Title in order to record the Seller's Closing Documents and issue the title insurance policies required by this Agreement. 5.3 IRS Form. If required by Title, a Designation Agreement designating the "reporting person" for purposes of completing Internal Revenue Form 1099 and, if applicable, Internal Revenue Form 8594. 6. Additional Prorations. Seller and Buyer agree to the following additional prorations and allocations of costs regarding the Purchase Agreement: 6.1 Title Insurance and Closing Fee. Buyer will pay all title insurance costs. Seller and Buyer will each pay one-half of any reasonable and customary closing fee or charge imposed by Title. 6.2 Deed Tax. Seller shall pay all state deed tax regarding the warranty deed to be delivered by Seller under the Purchase Agreement. Buyer shall pay all mortgage registry tax regarding any mortgage given by Buyer. 6.3 Basic Rents. All basic rent and other charges under the Leases will be prorated as of the Closing Date. If at the Closing Date a tenant under any of the Leases is delinquent in any payments required of it, then to the extent Buyer receives from such tenant amounts in excess of the payments due Buyer pursuant to this Agreement, Buyer will remit such amounts to Seller. However, Buyer will have no obligation to seek or collect any such payments and will only be obligated to make such payment to Seller after Buyer is fully paid for all amounts due it. 6.4 Additional Tenant Amounts. To the extent operating expenses, including real estate taxes and special assessments are chargeable to tenants under the Leases, Buyer shall pay to Seller on the Closing Date the amount of all such operating expenses prepaid by Seller and which are reimbursable but not yet billed to tenants and Buyer shall thereafter collect and retain all tenant reimbursements. Seller shall transfer to Buyer at the Closing Date and without additional charge all security deposits and interest thereon, prepaid rents and all deposits or payments by tenants with respect to operating expenses. 6.5 Recording Costs. Seller will pay the cost of recording all documents necessary to place record title in the condition required by the Purchase Agreement. Buyer will pay the cost of recording all other documents. 6.6 Other Costs. All other operating costs of the Property, will be allocated between Seller and Buyer as of the Closing Date, so that Seller pays that part of such other operating costs payable before the Closing Date, and Buyer pays that part of such operating costs payable from and after the Closing Date. 6.7 Attorney's Fees. Each of the parties will pay its own attorneys fees. 7. Broker's Commission. If the Closing occurs, Seller will pay a brokerage commission to Griffin Companies as the sole real estate brokerage commission regarding this transaction. Seller and Buyer represent and warrant to each other that they have dealt with no other brokers, finders or the like in connection with this transaction, and agree to indemnify each other and to hold each other harmless against all claims, damages, costs or expenses of or for any other such fees or commissions resulting from their actions or agreements regarding the execution or performance of the Purchase Agreement, and will pay all costs of defending any action or lawsuit brought to recover any such fees or commissions incurred by the other party, including reasonable attorney's fees. 8. Counterparts; Facsimiled Signatures. This Agreement may be executed in counterparts and/or by facsimiled signatures. Except as above amended, the Purchase Agreement remains in full force and effect. EXECUTION: Seller and Buyer have executed this Amendment as of the date first stated above. ANGELES PARTNERS 16, a California limited partnership By: Angeles Realty Corporation II, a California corporation, General Partner By /s/Robert D. Long Jr. ItsCAO/Controller NORTH PRIOR, L.L.C., a Delaware limited liability company By North Prior Corporation, a Minnesota corporation, Its Chief Manager By /s/Gerald L. Trooien, President Gerald L. Trooien, President EXHIBIT A Tract One: Lot 1, Block 1, KOSY'S CORNERS, according to the recorded plat thereof. Tract Two: Easement contained in access and mutual driveway easement agreement filed January 17, 1986, as Document No. 2297822 in the office of the County Recorder, in and for Ramsey County, Minnesota. EXHIBIT B ENVIRONMENTAL UNDERTAKING AND INDEMNITY AGREEMENT THIS ENVIRONMENTAL UNDERTAKING AND INDEMNITY AGREEMENT (this "Agreement") is made as of June , 1995, by ANGELES PARTNERS 16, a California limited partnership ("Seller"), in favor of NORTH PRIOR, L.L.C., a Delaware limited liability company (the "Buyer"), together with its successors, assigns (including, without limitation, Buyer's lender, AMRESCO Capital Corporation, its successors and assigns), transferees, affiliates, shareholders, directors, officers, agents and employees (collectively, the "Indemnified Parties"). Reference is made to the following facts: A. Buyer has agreed to purchase the North Prior Industrial Park (the "Property"), and Seller has agreed to sell the Property, which is more particularly described in Exhibit 1 attached to this Agreement, on the terms and conditions contained in that certain Purchase Agreement between Seller and Buyer dated March 3, 1993, as heretofore amended (the "Purchase Agreement"); B. The Property has been contaminated by a petroleum spill ("Spill"); and C. As a condition to Buyer's purchasing the Property, Buyer requires, and the Seller agrees, in accordance with the terms of this Agreement, to complete or cause to be completed by others the investigation and remediation of the Property and to indemnify and hold harmless Buyer from any claims, liabilities or costs associated with the Spill and addressed under this Agreement, subject, however, to Section 15 of this Agreement. NOW, THEREFORE, in consideration of the Buyer's agreement to purchase the Property and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Seller agrees as follows: 1. Definitions. As used in this Agreement, the following terms have the following meanings: (a) "Environmental Laws" shall mean all federal, state, and local environmental, health and safety laws, regulations, ordinances, rules, orders, judicial determinations or rules of equity or common law pertaining to the Spill. (b) "Person" shall mean an individual, partnership, corporation, business trust, joint stock company, trust, unincorporated association, joint venture, governmental, authority or other entity of whatever nature. 2. Environmental Undertaking. Seller, from and after the date hereof, expressly and irrevocably covenants and commits, for the benefit of all Indemnified Parties, at its sole cost and expense, to clean up the Spill in accordance with all requirements of the Minnesota Pollution Control Agency ("MPCA") and to the reasonable satisfaction of Buyer and its first mortgagee, AMRESCO Capital Corporation ("Mortgagee"), including but not limited to (i) obtaining or causing to be obtained all necessary permits, licenses or certificates required in connection with the performance of any obligations hereunder; (ii) repairing any damage to the Property caused by Seller (or Seller's agents and representatives) occasioned by the performance of any of its obligation hereunder; (iii) maintaining reasonable insurance policies (with Buyer named as an additional insured) with respect to the activities of Seller (or Seller's agents and representatives) at any time on the Property (Seller shall provide Buyer with copies of the insurance certificates evidencing said coverage); (iv) taking all necessary and appropriate precautions for the safety of the Indemnified Parties in, on or about the Property (and their employees, guests, and invitees) together with all persons furnishing services or materials in connection with the performance of any obligations hereunder; (v) submitting timely reports to Buyer, including all materials submitted to the MPCA, regarding the progress and performance of any obligations hereunder; and (vi) permitting no mechanics', materialmen's, laborer's or other lien to be made or imposed against the Property as a result of the performance by Seller (or Seller's agents and representatives) of any if its obligations hereunder. Seller and Buyer shall provide to the other timely copies of all notices that may be received from any regulatory agency involved in the regulation or control of the Spill and any responses to such notices by either party to such regulatory agencies. Without limiting this Section 2, Seller hereby expressly covenants, for the benefit of all Indemnified Parties, as follows: (a) Seller shall implement soil and/or groundwater cleanup as and when required by the MPCA, consistent with applicable Environmental Laws, and as is contained in the remedial action plan as approved by the MPCA, which plan shall be reasonably acceptable to Buyer. (b) Seller's investigations and remediation at the Property shall be accomplished in a good and workmanlike manner as expeditiously as is consistent with professional skill, care, health, and safety. (c) In connection with the performance by Seller of its obligations hereunder, Buyer shall provide Seller with reasonable access to the Property, to the extent necessary, upon at least 24 hours prior written notice (or such shorter period as is necessary in an emergency), to perform the obligations of Seller hereunder, provided, however, that Seller and Seller's agents shall meet the requirements as set forth in this Section 2. The Seller's written notice shall state the purpose of the intended entry onto the Property and whether any drilling, boring or other similar activity is intended to be conducted, and whether any equipment is intended to be brought upon the Property. Seller shall conduct no borings or drilling operations or otherwise disturb the Property in any manner without (i) first submitting to Buyer written specifications and drawings, and (ii) receiving express written approval for said specifications and drawings from Buyer or Buyer's agent, which approval shall not be unreasonably withheld, conditioned or delayed. (d) Seller shall make all reasonable efforts to avoid any interruption and minimize any disturbance or disruption in the use of the Property by Buyer, or any tenants, occupants or patrons, or to parking areas or traffic patterns in and around the Property, including but not limited to, the scheduling of work at reasonable times and the placement of any monitoring wells or other sampling points at grade, all as reasonably requested by Buyer. Seller shall maintain all of its work areas on the Property in a clean and orderly condition and shall restore the Property to substantially the same condition as existed immediately prior to the performance of any work by Seller or Seller's agents. Seller shall properly remove all monitoring wells upon completion of its obligations under this Agreement. (e) Seller shall provide Buyer and Mortgagee with copies of all correspondence received from the MPCA, including any closure letter or certification by the MPCA. 3. Indemnification. (a) The Seller hereby agrees to protect, defend (with counsel reasonably acceptable to the Indemnified Parties), indemnify, and hold harmless the Indemnified Parties from and against, and shall reimburse the Indemnified Parties for, any and all losses, claims, liabilities, damages, injunctive relief, injuries to persons, property or natural resources, fines, penalties, costs, expenses (including, without limitation, attorneys' fees, consultants' fees, expenditures, expenses and court costs incurred in connection with actions, administrative investigations and/or proceedings), and sums paid in settlement of litigation arising directly or indirectly, in whole or in part, out of the Spill (collectively, "Costs and Liabilities"). Without limiting the foregoing, Costs and Liabilities shall include (i) all costs of remediation, testing, monitoring and restoration of any kind (including, if Seller is in default under this Agreement, work performed by consultants and contractors other than Seller's consultants and contractors, whether in substitution for, or in addition to, work performed by Seller's consultants and contractors), and any disposal, (ii) all costs and liabilities associated with claims for, damages to, and remedial action related to the Spill with respect to, persons, property, or natural resources wherever located, (iii) all fines and other penalties associated with claims of noncompliance with any Environmental Laws which are related to the Spill, and (iv) all consultants' and attorneys' fees and costs. The foregoing indemnity shall survive delivery of any deed from Seller to Buyer and any assignment or other transfer by any or all of the Indemnified Parties of their respective interests in the Property. It is understood that so long as Seller is defending the Indemnified Parties and is not in default of its obligations under this Agreement, no litigation for which indemnification is sought (other than relating to governmental fines and penalties or criminal actions) shall be settled without the consent of the Seller. Before expending any funds or settling any claims for which it expects to recover under this Agreement, Buyer shall so notify the Seller in writing. Buyer shall promptly transmit to the Seller copies of all claims or reports in Buyer's possession relating to the Spill so as to provide the Seller opportunity to perform appropriate remediation in a timely manner. (b) In no event shall any provision of this Agreement be deemed to be a waiver of or to be in lieu of any right or claim (including without limitation any right of indemnification, contribution, or other right of recovery) that any Indemnified Party might otherwise have against the Seller under any Environmental Laws or any other laws, rules or regulations, other than with respect to the Spill. (c) Any sums payable under this Agreement shall be based upon Seller's obligations under Section 3 and shall not be deemed to be based upon any diminution in or other impairment of the value of the Property. (d) In the event of any inconsistencies or conflicts between the terms of this Agreement and the terms of the Purchase Agreement (including any exculpatory language contained in the Purchase Agreement), the terms of this Agreement shall control. (e) The Seller's obligations under this Agreement shall in no way be impaired, reduced or released by reason of: (i) an Indemnified Party's omission or delay in exercising any right described herein; or (ii) any act or omission of any Indemnified Party in connection with any notice, demand, warning or claim regarding violations or codes, laws or ordinances governing the Property (provided, however, that this subsection (ii) shall not apply to the extent that the Indemnified Party has failed to timely provide a copy of such notice, demand, warning or claim to Seller). 4. Interest on Unpaid Amounts. Any Costs and Liabilities claimed under this Agreement by an Indemnified Party which are not paid by Seller within forty-five (45) days after written demand made by such Indemnified Party shall bear interest at the per annum rate equal to the lesser of: (a) the Prime Rate (as published by the "Wall Street Journal" from time to time as the "Prime Rate") plus two percent (2%); or (b) the maximum rate permitted by law. In the event the Prime Rate is no longer published or announced or becomes unascertainable for any reason, Buyer shall designate a comparable reference rate which shall be deemed the Prime Rate under this Agreement. 5. Waiver. The Seller expressly waives and relinquishes the following rights and remedies: (a) All statutes of limitations as a defense to any action or proceeding brought against the Seller by any Indemnified Party with respect to this Agreement, to the fullest extent permitted by law; (b) Any right it may have to require any Indemnified Party to (i) proceed against the Seller, (ii) proceed against or exhaust any security held from Seller, (iii) proceed against any other Person whatsoever, or (iv) pursue any other right or remedy in such Indemnified Party's power to pursue pursuant to contract, applicable law or otherwise; (c) Any defense based on any legal disability of Seller, any discharge or limitation of the liability of Seller to Buyer, whether consensual or arising by operation of law or any bankruptcy, reorganization, receivership, insolvency, or debtor-relief proceeding, or from any other cause, or any claim that Seller's obligations exceed or are more burdensome than those of Indemnified Parties; and (d) All presentments, demands for performance, notices of nonperformance, protests, notices of protest, notices of dishonor, notices of acceptance of this Agreement and demands and notices of every kind except for any demand or notice by any Indemnified Party to Seller expressly provided for in this Agreement. 6. Effect of Buyer's Forbearance. Buyer may, at any time and from time to time without the consent of, or notice to, the Seller, and without impairing or releasing any of the obligations of Seller hereunder, upon or without any terms or conditions and in whole or in part, consent to, or waive any breach of, or any act, omission or default under this Agreement or the Purchase Agreement. 7. Binding Effect of Liability. This Agreement shall be absolute, unconditional, continuing, irrevocable and binding upon the Seller and its successors and assigns (whether by merger, consolidation or otherwise). This Agreement shall survive the execution, delivery and recordation of a deed to the Property, and the satisfaction of all obligations under the Purchase Agreement. 8. Successive Actions. A separate right of action shall arise under this Agreement each time an Indemnified Party acquires knowledge of any matter described herein. Separate and successive actions may be brought to enforce any of the provisions of this Agreement at any time and from time to time. No action hereunder shall preclude any subsequent action, and the Seller hereby waives and covenants not to assert any defense in the nature of splitting of causes of action or merger of judgments. 9. Partial Invalidity. If any provision of this Agreement shall be determined to be unenforceable in any circumstances by a court of competent jurisdiction, then the balance of this Agreement nevertheless shall be enforceable, and the subject provision shall be enforceable in all other circumstances. 10. Attorneys' Fees. In any action or other proceeding brought by any party to enforce any of its rights under this Agreement or to interpret this Agreement, the prevailing party shall be entitled to all reasonable attorneys' fees and all costs, expenses and disbursements in connection with such action. 11. Notices. Any notice required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been properly given if hand delivered (effective upon delivery) or if mailed by United States registered or certified mail, postage prepaid, return receipt requested (effective three business days after mailing), or if sent by Federal Express or other reliable overnight courier (effective one business day after sending), addressed as follows: Seller: Angeles Partners 16 One Insignia Plaza P.O. Box 1089 Greenville, South Carolina 29602 Attention: John LeBeau With a copy to: Angeles Mortgage Investment Trust c/o Briggs & Morgan (Attention: David G.Greening) 2200 First National Bank Building St. Paul, Minnesota 55101 Buyer: North Prior, L.L.C. c/o Gerald L. Trooien 739 Vandalia Avenue St. Paul, Minnesota 55114 With a copy to: AMRESCO Capital Corporation 1845 Woodall Rodgers Freeway Suite 1700 Dallas, TX 75201 Attn: Loan Servicing 12. Governing Law. This Agreement shall be governed by and construed and interpreted in accordance with the internal laws of the State of Minnesota (without regard to principles of conflicts of law) and any applicable laws of the United States of America. 13. Multiple Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. 14. Authority. Each individual signing this Agreement on behalf of a party warrants and represents that such individual is authorized to do so on behalf of such party. 15. Limitation of Liability. The obligations of Seller under this Agreement are not personal and the Buyer's recourse under this Agreement shall be limited to the amounts held in the Escrow Account under that certain Escrow Agreement of even date herewith between Buyer, Seller and First Trust National Association, which Escrow Account secures the obligations of Seller under this Agreement. Under no circumstances shall any of the Indemnified Parties seek or be entitled to recover any amounts from Seller pursuant to this Agreement apart from the amounts in the Escrow Account. 16. Cure Rights. Buyer shall provide written notice to Seller of any claimed defaults under this Agreement and Seller shall cure such defaults within thirty days; provided that, if the default cannot reasonably be cured within thirty days, the Seller shall have reasonable time to cure such defaults, if and so long as the Seller is diligently attempting to cure any default. 17. Termination. This Agreement shall terminate when the MPCA, or its successor, has issued a "Site Closure Letter" and such Site Closure Letter has been received and accepted by Buyer and Mortgagee (which acceptance shall not be unreasonably withheld or delayed); provided, however, that, if at the time of such issuance and acceptance Buyer or Mortgagee has been notified of a claim by any party against the Property, Buyer or Mortgagee with regard to the Spill, this Agreement shall remain in place until such time as such claim has been fully waived (in a document reasonably satisfactory to Buyer and Mortgagee) or has been finally dismissed (without a right of appeal) in the applicable jurisdiction(s). For purposes of this Agreement, the term "Site Closure Letter" shall mean any letter or agreement from the MPCA, or its successor, stating that all required remedial investigation, corrective action, monitoring and/or clean-up regarding the Spill has been completed, subject to the MPCA's uniformly applied reservations language. 18. Assignment of Claims. To the extent necessary for Seller to pursue its claims against third parties (including, without limitation, Yocum Oil Company) regarding the Spill, Buyer assigns to Seller Buyer's interests, if any, in such claims (whether or not such claims run with the land under applicable law), but only for so long as Seller shall not be in default under this Agreement and the Escrow Agreement securing this Agreement beyond the applicable grace periods. Buyer shall promptly enter into such assignment documents as Seller shall from time to time reasonably require in order to evidence such assignment. Buyer agrees that, if it is appropriate, Seller may bring any such claim in the name of Buyer; provided, however, that in such event the Seller's agreement to indemnify Buyer and hold Buyer harmless under Section 3 of this Agreement shall extend to all costs and expenses incurred by Buyer (including the costs of separate counsel and consultants if they must be engaged by Buyer as a result of applicable laws or codes of professional conduct) and all claims (including counterclaims) made against Buyer in connection with the claim so made by Seller in Buyer's name. IN WITNESS WHEREOF, this Agreement is executed as of the day and year first above written. SELLER: ANGELES PARTNERS 16, a California limited partnership By: Angeles Realty Corporation II, a California corporation, General Partner By /s/ Robert D. Long, Jr. Its CAO/Controller BUYER: NORTH PRIOR, L.L.C., a Delaware limited liability company By North Prior Corporation, a Minnesota corporation, Its Chief Manager By /s/ Gerald L. Trooien Gerald L. Trooien, President Exhibit 1 Tract One: Lot 1, Block 1, KOSY'S CORNERS, according to the recorded plat thereof. Tract Two: Easement contained in access and mutual driveway easement agreement filed January 17, 1986, as Document No. 2297822 in the office of the County Recorder, in and for Ramsey County, Minnesota. EXHIBIT C ESCROW AGREEMENT This Escrow Agreement is made as of June , 1995, by and between NORTH PRIOR, L.L.C., a Delaware limited liability company ("Buyer"), ANGELES PARTNERS 16, a California limited partnership ("Seller") and FIRST TRUST NATIONAL ASSOCIATION, as Escrow Agent ("Escrow Agent"). W I T N E S S E T H Whereas, the Buyer and Seller have entered into a Purchase Agreement dated March 3, 1993, as heretofore amended, which is incorporated herein by reference (the "Agreement"), which provides this Escrow Agreement shall be entered into. Unless otherwise indicated, capitalized terms used herein shall have the same meaning as in the Agreement. Accordingly, the parties agree as follows: 1. Deposit. There shall be deducted from the Purchase Price and deposited with the Escrow Agent, by wire transfer or other acceptable deposit, the escrowed amount of $900,000. The Escrow Agent hereby agrees to accept the escrowed funds and, subject to Paragraph 6 hereof, agrees to establish and maintain a single separate account therefor (the "Escrow Account"). 2. Escrow Account. The Escrow Account shall be held by the Escrow Agent for the purpose of securing Seller's obligations under the Environmental Undertaking and Indemnity Agreement of even date herewith (the "Undertaking Agreement") between Seller and Buyer. All amounts required to fund such Seller's obligations, including consultants' and attorneys' fees reasonably incurred by Seller in connection with such Seller's obligations, shall be hereinafter collectively referred to as "Cleanup Costs." 3. Charges Against Escrow Account. Seller shall be entitled to use funds deposited in the Escrow Account to pay Cleanup Costs in accordance with this Paragraph 3. In the event that, and from time to time as Seller in good faith determines (but not more often than once per month), expenses have been incurred by Seller for Cleanup Costs that are chargeable against the Escrow Account (hereinafter a "Claim"), Seller shall notify in writing the Escrow Agent and the Buyer of each such Claim (identifying such Claim with reasonable specificity) against the Escrow Account, and stating the amount thereof. Such notice shall be accompanied by a current sworn cost statement executed by Seller (and, if the sworn cost statement relates to work or materials performed or supplied by a contractor, supplier or consultant having lien rights, then also executed by such contractor, supplier or consultant), together with copies of the billing statement(s) received by Seller from the applicable contractor, supplier, attorney or consultant. Upon receiving a copy of such notice, the Buyer shall raise any objections within twenty (20) business days by written notification to Seller and the Escrow Agent. If Buyer does not object, the Escrow Agent shall issue a disbursement check on the Claim jointly to Seller and the applicable contractor, supplier, consultant or attorney from the Escrow Account as soon as practicable and, promptly after receipt of such check, Seller shall supply Buyer with an unconditional lien waiver executed by the contractor, supplier or consultant being paid from the disbursement (if such contractor, supplier or consultant has lien rights) in the amount of the disbursement. If a notice of objection shall be timely received from Buyer, the parties will negotiate diligently and in good faith to settle any dispute, consistent with the terms the Undertaking Agreement. The Escrow Agent shall prepare and furnish to Buyer and Seller a report on the disbursements and balance of the Escrow Fund and interest thereto at least once each calendar quarter. 4. Buyer's Rights. Buyer shall have superior and non contingent rights (as to Seller and/or Seller's creditors) to the Escrow Account to effect completion or payment of all of Seller's obligations under the Undertaking Agreement, with any remaining funds thereafter disbursed to Seller. Buyer's rights under this Paragraph 4 may be exercised upon an event of default by Seller under the terms of the Undertaking Agreement, but only after Seller's receipt from Buyer of written notice of default and Seller's failure to cure such default within the time limits set forth in Paragraph 16 of the Undertaking Agreement. Buyer shall provide written notice to Seller and the Escrow Agent as to any demands by Buyer on the Escrow Account. Upon receiving a copy of such demand, the Seller and/or Angeles Mortgage Investment Trust ("AMIT") shall raise any objections within twenty (20) business days by written notification to Buyer and the Escrow Agent. If Seller and AMIT do not timely object, the Escrow Agent shall issue a disbursement to the Buyer from the Escrow Account. Any such disbursement shall be made as soon as practicable. If a notice of objection shall be timely received, the parties will negotiate diligently and in good faith to settle any dispute, consistent with the terms of the Undertaking Agreement. 5. Termination. The Escrow Account shall remain in existence until the Undertaking Agreement has terminated. The parties will negotiate diligently and in good faith to settle any dispute regarding final termination of the Escrow Account. Upon final termination, the Escrow Agent shall promptly remit all amounts remaining in the Escrow Account to the Seller. 6. Investment of Funds. The Escrow Agent agrees to invest and reinvest the funds in the Escrow Account in one or more of the following investments from time to time (the "Investments") as directed in writing by Seller and approved in writing by Buyer (which approval shall not be unreasonably withheld or delayed, it being understood that, in granting or withholding such approval, Buyer may take into account the maturity dates of the Investments as they relate to the timing of the anticipated Cleanup Costs): (1) direct obligations of, or obligations the timely payment of which is guaranteed by, the United States of America; (2) direct obligations of, or obligations the timely payment of which is guaranteed by, any agency or corporation which is or may hereafter be created by or pursuant to an act of the Congress of the United States as an agency or instrumentality thereof; (3) public housing bonds, temporary notes, or preliminary loan notes, fully secured by contracts with the United States of America; (4) time deposits at, money market accounts of, or certificates of deposit issued by, any bank or trust company including, but not limited to,the Escrow Agent, which has, at the time of the acquisition by the Escrow Agent of such investments, a capital stock and surplus aggregating at least $50,000,000; (5) prime commercial paper; or (6) such other investment vehicle as the Buyer and Seller may agree upon from time to time; Buyer shall not unreasonably withhold or delay its consent to an investment proposal of Seller. Interest earned on any such investments shall continue to be held under this Escrow Agreement and become part of the Escrow Account until its termination, except as long as Seller is not in default under the Undertaking Agreement, earned interest shall be disbursed quarterly to Seller. Whenever necessary to make a disbursement hereunder, the Escrow Agent shall, in its discretion, liquidate such Investments as are required to satisfy claims made hereunder. If the Escrow Agent does not receive timely written instruction as contemplated above, the Escrow Account shall be invested in short term investment cash vehicles as indicated by Seller on the attached Schedule. 7. The Escrow Agent. In consideration of the acceptance by the Escrow Agent of its duties hereunder, it is agreed by all parties hereto that: 7.1 The Escrow Agent's duties and responsibilities shall be limited to those expressly set forth herein, provided, however, that any amendment or modification which is agreed to by the Buyer and the Seller in writing shall be binding upon the Escrow Agent unless such amendment or modification affects the duties and/or obligations of the Escrow Agent hereunder, in which event the Escrow Agent's consent shall be required. 7.2 The Escrow Agent is authorized, in its sole discretion, to disregard any and all notices or instructions given by any of the parties hereto or by any other person, firm or corporation, except only (a) such notices or instructions as are herein specifically provided for, and (b) orders or process of any court entered or issued with jurisdiction. If the Escrow Account subject hereto is at any time attached, garnished or levied upon, or a court orders the payment, assignment, transfer or conveyance of the Escrow Account, or delivery of the Escrow Account shall be stayed or enjoined by any court order, or in case any order, judgment or decree shall be made or entered by any court affecting the Escrow Account or any part thereof, then, and in any of such events, the Escrow Agent is authorized, in its sole discretion, to rely upon and comply with any such order, writ, judgment or decree which it is advised by legal counsel of its own choosing is binding upon it. 7.3 Unless otherwise specifically provided herein, the Escrow Agent shall proceed as soon as practicable to collect any checks, notes or other collection items at any time deposited hereunder. All such collections shall be subject to the normal collection agreement in banking institutions for deposit or collection. The Escrow Agent shall not be required or have a duty to notify anyone of any payment or maturity under the terms of any instrument deposited hereunder, nor to take any legal action to enforce payment of any check, note or security deposited hereunder. The Escrow Agent must provide in writing to the parties at least once each calendar quarter a statement of all deposits, disbursements and interest earned with regard to the Escrow Account. 7.4 The Escrow Agent shall not be held liable for any action taken or omitted hereunder if taken or omitted by it in good faith and without negligence and in the exercise of its own best judgment. It shall also be fully protected in relying upon any written notice, demand, certificate or document which it in good faith believes to be genuine and consistent with this Escrow Agreement. 7.5 The Escrow Agent shall not be responsible for the sufficiency or accuracy of the form, execution, validity or genuineness of documents or securities now or hereafter deposited hereunder, or of any endorsement thereon, or for any lack of endorsement thereof, or for any description therein, nor shall it be responsible or liable in any respect on account of the identity, authority or rights of the persons executing and delivering or purporting to execute or deliver any such document, security or endorsement. The Escrow Agent shall not be liable for any depreciation or change in the value of such documents or securities or any property evidenced thereby. 7.6 Unless otherwise herein expressly provided, the Escrow Agent shall: (a) have no responsibility or liability for any diminution which may result from any investments or reinvestments made in accordance with any provision which may be contained herein; (b) be entitled to compensation for its services hereunder in such amounts as set forth in the attached Fee Schedule, as may be amended by the Escrow Agent from time to time, and reimbursement of its normal out of pocket expenses including, but not by way of limitation, the reasonable fees and costs of attorneys or agents which it may find necessary to engage in performance of its duties hereunder, all to be paid by Seller from funds in the Escrow Account; (c) be, and hereby is, jointly and severally indemnified and saved harmless, by Seller, from all losses, costs, expenses which may be incurred by it as a result of its involvement in any litigation arising from performance of its duties hereunder, provided that such litigation shall not result from any action taken or omitted by the Escrow Agent and for which it shall have been adjudged negligent; and, such indemnification shall survive termination of this Agreement until extinguished by any applicable statute of limitations, provided however, in the event there is litigation between Seller and Buyer in which the Escrow Agent is made a party, the non-prevailing party shall pay the reasonable attorneys fees and expenses of the Escrow Agent arising from the litigation. 8. Resignation or Removal of Escrow Agent. The Escrow Agent may resign following the giving of thirty (30) days prior written notice to the parties hereto. Similarly, the Escrow Agent may be removed and replaced following the giving of thirty (30) days prior written notice to the Escrow Agent by Seller and Buyer. In either event, the duties of the Escrow Agent shall terminate thirty (30) days after the date of such notice (or as of such earlier date as may be mutually agreeable) and the Escrow Agent shall then deliver the balance of the Escrow Account then in its possession to a successor Escrow Agent as shall be appointed by the Seller and Buyer hereto as evidenced by a written notice presented by the parties to the Escrow Agent. If the Seller and Buyer shall have failed to appoint a successor prior to the expiration of thirty (30) days following the date of the notice of resignation or removal, the then acting Escrow Agent may petition any court of competent jurisdiction for the appointment of a successor Escrow Agent or other appropriate relief; and any such resulting appointment shall be binding. Upon acknowledgment by any successor Escrow Agent of the receipt of the then remaining balance of the Escrow Account, the then acting Escrow Agent shall be fully released and relieved of all duties, responsibilities and obligations under this Agreement. 9. Notices. Any request, direction, notice or other service required or permitted to be made or given by a party hereto shall be in writing and shall be deemed sufficiently given or served for all purposes if given by a recognized overnight delivery service with proof of service and delivery (in which case such notice shall be effective on the next business day) or by mailing the same to the address indicated below (or to such other address as party may substitute by written notification to the other party), by certified mail, return receipt requested, postage prepaid (in which case such notice shall be effective the third business day after mailing): If to Seller: Angeles Partners 16 One Insignia Plaza P.O. Box 1089 Greenville, South Carolina 29602 Attention: John LeBeau With a copy to: Angeles Mortgage Investment Trust c/o Briggs & Morgan (Attention: David G. Greening) 2200 First National Bank Building St. Paul, Minnesota 55101 If to Buyer: North Prior, L.L.C. c/o Gerald L. Trooien 739 Vandalia Avenue St. Paul, Minnesota 55114 With a copy to: AMRESCO Capital Corporation 1845 Woodall Rodgers Freeway Suite 1700 Dallas, TX 75201 Attn: Loan Servicing If to Escrow Agent: First Trust National Association First Trust Center 2nd Floor 180 East 5th Street St. Paul, Minnesota 55101 Attn: Mr. Thomas Gronlund 10. Governing Law. The provisions herein shall be construed, enforced and administered in accordance with the laws of the State of Minnesota and shall be binding upon and inure to the benefit of the respective successors and assigns of the parties hereto. 11. Successors and Assigns. This Escrow Agreement shall be binding upon and inure to the benefit of the parties, their successors and assigns (including, without limitation, Buyer's lender, AMRESCO Capital Corporation, its successors and assigns). The parties acknowledge that AMIT has received from Seller an assignment of all of Seller's rights to receive payments under this Agreement, including, without limitation, the quarterly earned interest payments under Section 6 of this Escrow Agreement and the remaining balance of the Escrow Account upon termination of this Agreement (but AMIT has received no assignment of other rights of Seller under this Agreement and has assumed no obligations of Seller under this Agreement). Buyer and Escrow Agent shall assume that such assignment of payments remains in effect until they are otherwise notified in writing by AMIT. 12. Counterparts; Facsimiled Signatures. This Escrow Agreement may be executed in counterparts and/or by facsimiled signatures. IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement as of the day and year first above written. SELLER: ANGELES PARTNERS 16, a California limited partnership By: Angeles Realty Corporation II, a California corporation, General Partner By /s/ Robert D. Long, Jr. Its CAO/Controller BUYER: NORTH PRIOR, L.L.C., a Delaware limited liability company By North Prior Corporation, a Minnesota corporation, Its Chief Manager By /s/ Gerald L. Trooien Gerald L. Trooien, President ESCROW AGENT: FIRST TRUST NATIONAL ASSOCIATION By Its [ATTACH INVESTMENT ELECTION SCHEDULE-SEE LAST SENTENCE OF SECTION 6] [ATTACH ESCROW AGENT'S FEE SCHEDULE-SEE SECTION 7.6(b)] EX-10 4 EXHIBIT 10.13 ASSIGNMENT AND ASSUMPTION OF LEASES Angeles Partners 16, a California limited partnership, with an address of One Insignia Plaza, P.O. Box 1089, Greenville, S.C. 29602 ("Assignor"), in consideration of Ten Dollars ($10.00) and other good and valuable consideration in hand paid, receipt whereof is hereby acknowledged, by North Prior, L.L.C., a Delaware limited liability company ("Assignee"), hereby assigns to Assignee, its successors and assigns: All of those certain "Leases," as hereinafter defined, set forth in Exhibit A hereto attached, which Leases demise portions of the building used for industrial/warehouse/distribution purposes located on the parcel of land, situate, lying and being in the City of St. Paul, and legally described on Exhibit B attached hereto and made a part hereof (collectively, the "Premises"). The term "Leases" as used herein shall mean and include those leases described on Exhibit A attached hereto and all right, title and interest in and to all security deposits, prepaid rents, collections and guarantees paid in connection with the Leases. Assignee hereby assumes the performance of all of the terms, covenants and conditions of the Leases herein assigned by Assignor to be performed on and after the date hereof and will well and truly perform all the terms, covenants and conditions of the said Leases herein assigned to be performed on and after the date hereof, all with full force and effect as if Assignee had signed the Leases originally as landlord named therein with respect to such period. IN WITNESS WHEREOF, this Assignment and Assumption of Leases has been duly signed and sealed by the parties hereto as of the 12th day of June, 1995. ASSIGNOR: ANGELES PARTNERS 16 a California limited partnership By: Angeles Realty Corporation II, a California corporation, General Partner By: /s/ Robert D. Long, Jr. Its: CAO/Controller ASSIGNEE: NORTH PRIOR L.L.C., a Delaware limited liability company By: NORTH PRIOR CORPORATION, a Minnesota corporation, Chief Manager By: /S/ Gerald L. Trooien Gerald L. Trooien, President -2- EXHIBIT A (Rent Roll) -3- EXHIBIT B Legal Description -4- EX-10 5 EXHIBIT 10.14 ASSIGNMENT AND ASSUMPTION OF SERVICE CONTRACTS Angeles Partners 16, a California limited partnership, in consideration of Ten Dollars ($10.00) and other good and valuable consideration in hand paid, receipt whereof is hereby acknowledged, by North Prior, L.L.C., a Delaware limited liability company with an address of 739 Vandalia, St. Paul, MN 55114 ("Assignee") hereby assigns unto Assignee its successors and assigns: All of Assignor's right, title and interest in and to all those certain service contracts and all renewals, modifications and amendments thereof, more particularly described as set forth in Exhibit B hereto annexed (collectively, the "Service Contracts"), which Service Contracts concern the maintenance and/or operation of the parcel of land, together with the buildings and improvements erected thereon, situate, lying and being in the City of St. Paul, Ramsey County, Minnesota, commonly known as bounded and described as more particularly set forth in Exhibit A annexed hereto and made a part hereof (collectively, the "Premises"), subject to the covenants, conditions and provisions also mentioned in each of the said Service Contracts. Assignee hereby assumes the performance of all of the terms, covenants and conditions of the Service Contracts herein assigned by Assignor to be performed on and after the date hereof and will well and truly perform all the terms, covenants and conditions of the Service Contracts herein assigned to be performed on and after the date hereof, all with full force and effect as if Assignee had signed the Service Contracts originally as the owner or managing agent of the Premises named therein with respect to such period. IN WITNESS WHEREOF, this Assignment and Assumption of Service Contracts has been duly signed and sealed by the parties hereto as of the 12th day of June, 1995. ASSIGNOR: ANGELES PARTNERS 16, a California limited partnership By: Angeles Realty Corporation II, a California corporation, General Partner By: /s/ Robert D. Long, Jr. Its: CAO/Controller ASSIGNEE: NORTH PRIOR, L.L.C. a Delaware limited liability company By: NORTH PRIOR CORPORATION, a Minnesota corporation, Chief Manager By: /s/ Gerald L. Trooien Gerald L. Trooien, President -2- EXHIBIT A Property Description -3- EXHIBIT B -4- EX-10 6 EXHIBIT 10.15 ASSIGNMENT OF PERMITS AND WARRANTIES Angeles Partners 16, a California limited partnership, in consideration of Ten Dollars ($10.00) and other good and valuable consideration in hand paid, receipt whereof is hereby acknowledged, by North Prior, L.L.C., a Delaware limited liability company with an address of 739 Vandalia, St. Paul, MN 55114 ("Assignee") hereby assigns unto Assignee its successors and assigns: All of Assignor's right, title and interest in and to all those permits and warranties and all renewals, modifications and amendments thereof which concern the maintenance and/or operation of the parcel of land, together with the buildings and improvements erected thereon, situate, lying and being in the City of St. Paul, Ramsey County, Minnesota, commonly known as bounded and described as more particularly set forth in Exhibit A annexed hereto and made a part hereof (collectively, the "Premises"), subject to the covenants, conditions and provisions also mentioned in each of the said permits and Warranties. IN WITNESS WHEREOF, this Assignment of Permits and Warranties has been duly signed and sealed by the parties hereto as of the 12th day of June, 1995. ASSIGNOR: ANGELES PARTNERS 16, a California limited partnership By: Angeles Realty Corporation II, a California corporation, General Partner By: /s/ Robert D. Long, Jr. Its: CAO/Controller ASSIGNEE: NORTH PRIOR, L.L.C. a Delaware limited liability company By: NORTH PRIOR CORPORATION, a Minnesota corporation, Chief Manager By: /s/ Gerald L. Trooien Gerald L. Trooien, President 2 EXHIBIT A Property Description 3 EXHIBIT B 4 EX-10 7 EXHIBIT 10.16 ASSIGNMENT OF RENTS AND LEASES KNOW ALL PERSONS BY THESE PRESENTS, that Towle Real Estate Company, the court-appointed receiver ("Assignor") of certain real property in the City of St. Paul, County of Ramsey, State of Minnesota, legally described on the attached Exhibit A (the "Property") pursuant to the court's order dated June 9, 1995 and attached hereto as Exhibit B, hereby assigns, transfers, sets over and delivers to Angeles Partners 16, a California Limited Partnership ("Assignee") all of Assignor's right, title and interest in, to and under (i) those certain leases, including any and all extensions, modifications and renewals thereof (collectively, the "Leases") described on attached Exhibit C which cover or affect the Property, and (ii) all rents, security deposits, profits and other income or payments of any kind due and payable or to become due or payable to the Assignor in connection with the Leases. Assignee hereby assumes and agrees to make all payments and to perform and keep all promises, covenants and conditions and agreements of Assignor under the Leases, and releases Assignor from any and all liability on the Leases which accrues after the date hereof. IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment of Rents and Leases as of this 12th day of June, 1995. ASSIGNOR: TOWLE REAL ESTATE COMPANY, AS RECEIVER. By /s/ Pat Skinner Its Property Manager ASSIGNEE: ANGELES PARTNERS 16 By__________________________________ Its_________________________________ EX-10 8 EXHIBIT 10.17 ASSIGNMENT OF SERVICE CONTRACTS Towle Real Estate, as Receiver ("Assignor"), in consideration of Ten Dollars ($10.00) and other good and valuable consideration in hand paid, receipt whereof is hereby acknowledged, by Angeles Partners 16, a California limited partnership, with an address of One Insignia Financial Plaza, P.O. Box 1089, Greenville, South Carolina 29602 ("Assignee") hereby assigns unto Assignee its successors and assigns: All of Assignor's right, title and interest in and to all those certain service contracts and all renewals, modifications and amendments thereof, more particularly described as set forth in Exhibit B hereto annexed (collectively, the "Service Contracts"), which Service Contracts concern the maintenance and/or operation of the parcel of land, together with the buildings and improvements erected thereon, situate, lying and being in the City of St. Paul, Ramsey County, Minnesota, commonly known as bounded and described as more particularly set forth in Exhibit A annexed hereto and made a part hereof (collectively, the "Premises"), subject to the covenants, conditions and provisions also mentioned in each of the said Service Contracts. IN WITNESS WHEREOF, this Assignment Service Contracts has been duly signed and sealed by the parties hereto as of the 12th day of June, 1995. ASSIGNOR: TOWLE REAL ESTATE, as Receiver By: /s/ Pat Skinner____________ Its: Property Manager______ ASSIGNEE: ANGELES PARTNERS 16, a California limited partnership By: Angeles Realty Corporation II, a California corporation, General Partner By: /s/ Pat Skinner Its: Property Manager 2 EXHIBIT A Property Description Lot 1, Block 1, KOSY'S CORNERS, according to the recorded plat thereof, subject to and together with easement contained in access and mutual driveway easement agreement filed January 17, 1986, as Document No. 2297822 in the office of the County Recorder, in and for Ramsey County, Minnesota. 3 EXHIBIT B 4 EX-10 9 EXHIBIT 10.18 ASSIGNMENT OF PERMITS AND WARRANTIES Towle Real Estate Company, as Receiver, with an address of 5001 West 80th Street, Suite 580, Bloomington, Minnesota 55437 ("Assignor") in consideration of Ten Dollars ($10.00) and other good and valuable consideration, receipt whereof is hereby acknowledged, in hand paid by Angeles Partners 16, a California limited partnership, with an address of One Insignia Financial Plaza, P.O. Box 1089, Greenville, S.C. 29602 ("Assignee") hereby assigns unto Assignee its successors and assigns: All of Assignor's right, title and interest in and to all assignable permits and warranties and all renewals, modifications and amendments thereof which concern the maintenance and/or operation of the parcel of land, together with the buildings and improvements erected thereon, situate, lying and being in the City of St. Paul, Ramsey County, Minnesota, commonly known as bounded and described as more particularly set forth in Exhibit A annexed hereto and made a part hereof (collectively, the "Premises"), subject to the covenants, conditions and provisions also mentioned in each of the said permits and Warranties. IN WITNESS WHEREOF, this Assignment of Permits and Warranties has been duly signed and sealed by the parties hereto as of the 12th day of June, 1995. TOWLE REAL ESTATE COMPANY, as Receiver By: /s/ Pat Skinner Its: Property Manager EXHIBIT A Property Description Tract One: Lot 1, Block 1, KOSY'S CORNERS, according to the recorded plat thereof. Tract Two: Easement contained in access and mutual driveway easement agreement filed January 17, 1986, as Document No. 2297822 in the office of the County Recorder, in and for Ramsey County, Minnesota. 2 EXHIBIT B 3 EX-27 10 EXHIBIT 27
5 This schedule contains summary financial information extracted from Angeles Partners 16's 1995 second quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB filing. 1 6-MOS DEC-31-1995 JUN-30-1995 814,695 0 8,842 0 0 1,125,240 11,641,882 (2,861,661) 11,573,439 416,119 13,680,446 0 0 0 (5,174,770) 11,573,439 0 1,639,888 0 0 3,045,147 0 919,764 (738,289) 0 (738,289) 0 56,203 0 (738,289) (52.08) 0