SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the fiscal year
ended December 31, 1996 Commission file no. 0-9726
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(Exact name of registrant as specified in its charter)
Illinois 36-3057941
(State of organization) (I.R.S. Employer Identification No.)
900 N. Michigan Ave., Chicago, Illinois 60611
(Address of principal executive office)(Zip Code)
Registrant's telephone number, including area code 312-915-1987
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
- ------------------- ------------------------
None None
Securities registered pursuant to Section 12(g) of the Act:
LIMITED PARTNERSHIP INTERESTS
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 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
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K X
State the aggregate market value of the voting stock held by non-affiliates
of the registrant. Not applicable.
Documents incorporated by reference: None
TABLE OF CONTENTS
Page
----
PART I
Item 1. Business . . . . . . . . . . . . . . . . . . 2
Item 2. Properties . . . . . . . . . . . . . . . . . 6
Item 3. Legal Proceedings. . . . . . . . . . . . . . 8
Item 4. Submission of Matters to a Vote of
Security Holders . . . . . . . . . . . . . . 8
PART II
Item 5. Market for the Partnership's Limited
Partnership Interests and
Related Security Holder Matters. . . . . . . 8
Item 6. Selected Financial Data. . . . . . . . . . . 9
Item 7. Management's Discussion and
Analysis of Financial Condition and
Results of Operations. . . . . . . . . . . . 11
Item 8. Financial Statements and Supplementary Data. 13
Item 9. Changes in and Disagreements with
Accountants on Accounting and
Financial Disclosure . . . . . . . . . . . . 35
PART III
Item 10. Directors and Executive Officers of the
Partnership. . . . . . . . . . . . . . . . . 35
Item 11. Executive Compensation . . . . . . . . . . . 38
Item 12. Security Ownership of Certain Beneficial
Owners and Management. . . . . . . . . . . . 39
Item 13. Certain Relationships and
Related Transactions . . . . . . . . . . . . 40
PART IV
Item 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K. . . . . . . . . . . 40
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . 42
i
PART I
ITEM 1. BUSINESS
Unless otherwise indicated, all references to "Notes" are to Notes to
Consolidated Financial Statements contained in this report. Capitalized
terms used herein, but not defined, have the same meanings as used in the
Notes.
The registrant, Carlyle Real Estate Limited Partnership - X (the
"Partnership"), was a limited partnership formed in 1979 and governed by
the Revised Uniform Limited Partnership Act of the State of Illinois to
invest primarily in improved income-producing commercial and residential
real property. A total of 100,000 Limited Partnership Interests (the
"Interests") were sold to the public at $1,000 per Interest pursuant to a
public offering. The offering closed in February 1981. No Limited Partner
made any additional capital contribution after such date. The Limited
Partners of the Partnership shared in their portion of the benefits of
ownership of the Partnership's real property investments according to the
number of Interests held.
The Partnership was engaged solely in the business of the acquisition,
operation and sale and disposition of equity real estate investments. Such
equity investments were held by fee title, leasehold estates and/or through
joint venture partnership interests. The Partnership's real property
investments were located throughout the nation and it had no real estate
investments located outside of the United States. A presentation of
information about industry segments, geographic regions, raw materials or
seasonality was not applicable and would not have been material to an
understanding of the Partnership's business taken as a whole. The
Partnership made a liquidating distribution of $5,296,735 to its Limited
Partners on December 31, 1996, and terminated its operations and dissolved
the Partnership effective December 31, 1996. At sale of a particular
property, the net proceeds, if any, were generally distributed or
reinvested in existing properties rather than invested in acquiring
additional properties.
The Partnership made the real property investments set forth in the
following table:
<TABLE>
<CAPTION>
Name, Type of Property Date of Sale or
and Location Size Purchase Disposal Date Type of Ownership
- ---------------------- ---- -------- -------------- ----------------------
<S> <C> <C> <C> <C>
1. Lone Pine/Bloomfield
Office Center
Bloomfield Hills,
Michigan. . . . . 75,300 8-13-80 6-30-86 fee ownership of land and
sq.ft. improvements (through joint
n.r.a. venture partnership)
2. Graystone Office/
Warehouse
Dallas, Texas . . 97,000 8-13-80 7-4-89 fee ownership of land and
sq.ft. improvements (through joint
n.r.a. venture partnership)
3. Windmill Park
Apartments
Midland, Texas. . 228 units 6-12-80 9-23-92 fee ownership of land and
improvements (through joint
venture partnership)
4. Park Place Towers
Office Center
Birmingham,
Alabama . . . . . 305,900 7-14-80 6-13-91 fee ownership of land and
sq.ft. improvements (through joint
n.r.a. venture partnership)
5. Centroplex Office
Building
White Plains,
New York. . . . . 412,000 8-1-80 7-10-91 fee ownership of land and
sq.ft. improvements (through joint
n.r.a. venture partnership)
6. Sunrise Mall
Brownsville,
Texas . . . . . . 311,000 9-1-80 10-23-96 fee ownership of land and
sq.ft. improvements (through joint
g.l.a. venture partnership) (a)
7. Summit North
Apartments
Atlanta,
Georgia . . . . . 250 units 9-17-80 6-16-83 fee ownership of land and
improvements (through joint
venture partnership)
Name, Type of Property Date of Sale or
and Location Size Purchase Disposal Date Type of Ownership
- ---------------------- ---- -------- ------------- ----------------------
8. Holly Pond
Office Center
Stamford,
Connecticut . . . 64,000 12-17-80 1-19-96 fee ownership of land and
sq.ft. improvements (through joint
n.r.a. venture partnership)
(b)(d)
9. Main Place
Apartments
Mesa, Arizona . . 336 units 11-27-80 6-27-90 fee ownership of land and
improvements (through joint
venture partnership)
10. Garret Mountain
Office Center
West Paterson,
New Jersey. . . . 122,400 10-29-80 1-25-95 fee ownership of land and
sq.ft. improvements (through joint
n.r.a. venture partnership)(b)(c)
11. Washington Office
Building
Washington, DC. . 260,000 12-18-80 9-30-88 fee ownership of land and
sq.ft. improvements (through joint
n.r.a. venture partnership)
12. Double Tree Apartments
El Paso, Texas. . 284 units 12-17-80 3-18-93 fee ownership of land and
improvements
13. Frontier Mall
Cheyenne,
Wyoming . . . . . 232,000 12-16-80 10-31-93 fee ownership of land and
sq.ft. improvements (through joint
g.l.a. venture partnership)
14. Union Plaza
Office Building
Oklahoma City,
Oklahoma. . . . . 250,000 12-31-80 8-31-93 fee ownership of land and
sq.ft. improvements (through joint
n.r.a. venture partnership)
15. Seattle Arcade
Office Building
Seattle,
Washington. . . . 90,000 12-30-80 8-8-83 fee ownership of land and
sq.ft. improvements
n.r.a.
Name, Type of Property Date of Sale or
and Location Size Purchase Disposal Date Type of Ownership
- ---------------------- ---- -------- ------------- ---------------------
16. Westwood Plaza
Shopping Center
Westwood,
New Jersey. . . . 174,000 12-17-80 8-22-88 fee ownership of land and
sq.ft. improvements and ground
g.l.a. leasehold interest in land
(through joint venture
partnership)
17. Silvermine
Apartments
Victoria,
Texas . . . . . . 216 units 12-19-80 11-29-94 fee ownership of land and
improvements (through joint
venture partnership)
(a)(b)
18. Sunset Limited
Apartments
Harris County,
Texas . . . . . . 288 units 2-6-81 6-5-90 fee ownership of land and
improvements
19. Highpoint Shopping
Center
Harris County,
Texas . . . . . . 21,000 2-6-81 2-5-91 fee ownership of land and
sq.ft. improvements
g.l.a.
20. Greenway Towers
Office Building
Dallas, Texas . . 185,700 6-30-81 12-26-96 fee ownership of land and
sq.ft. improvements (through joint
n.r.a. venture partnership) (b)(c)
21. First Interstate
Center
Seattle,
Washington. . . . 893,000 12-29-82 12-15-95 fee ownership of improve-
sq.ft. ments and ground leasehold
n.r.a. interest in land (through
joint venture partner-
ship) (b)(c)
<FN>
- ---------------
(a) This property has been sold. Reference is made to the Notes for a
description of the sale of such real property investment.
(b) Reference is made to the Notes for a general description of the
joint venture partnership through which the Partnership made this real
property investment.
(c) The Partnership sold its interest in this property. Reference is
made to the Notes for a description of the sale of such Partnership
interest.
(d) During January 1996, the lender realized upon its security and took
title to this property. Reference is made to the Notes for a description
of such disposition by the Partnership.
</TABLE>
The Partnership's real property investments were subject to competi-
tion from similar types of properties (including in certain areas
properties owned by affiliates of the General Partner) in the respective
vicinities in which they were located. Such competition was generally for
the retention of existing tenants. Additionally, the Partnership was in
competition for new tenants in markets where significant vacancies were
present. Approximate occupancy levels for the properties are set forth in
the table in Item 2 below to which reference is made. The Partnership
maintained the suitability and competitiveness of its properties in their
markets primarily on the basis of effective rents, tenant allowances and
service provided to tenants.
On January 19, 1996, the Lender concluded its proceedings to realize
upon its security and took title to the Holly Pond Office Center.
Reference is made to the Notes for a description of such transaction.
On October 23, 1996, the Partnership sold the Sunrise Mall property.
Reference is made to the Notes for a further description of such
transaction.
On December 26, 1996, the Partnership sold its interest in the
Greenway Tower venture to its venture partner. Reference is made to the
Notes for a further description of such transaction.
The terms of transactions between the Partnership, the General
Partners and their affiliates are set forth in Item 11 below to which
reference is made for a description of such terms and transactions.
ITEM 2. PROPERTIES
The Partnership owned directly or through joint venture partnerships
the properties or interests in the properties referred to under Item 1
above to which reference is made for a description of said properties.
The following is a listing of principal businesses or occupations
carried on in and approximate occupancy levels by quarter during fiscal
years 1996 and 1995 for the Partnership's investment properties owned
during 1996:
<TABLE>
<CAPTION>
1995 1996
------------------------- -------------------------
At At At At At At At At
Principal Business 3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
------------------ ---- ---- ---- ----- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Holly Pond
Office Center
Stamford, Connecticut . . Financial Ser-
vices/Attorneys 93% 90% 90% 90% N/A N/A N/A N/A
2. Sunrise Mall
Brownsville, Texas. . . . Retail 89% 89% 88% 87% 83% 84% 84% N/A
3. Greenway Towers
Office Building
Dallas, Texas . . . . . . Insurance 92% 86% 92% 91% 91% 97% 95% N/A
<FN>
- --------------------
An "N/A" indicates that the property was sold or was not owned by the Partnership at the end of the period.
</TABLE>
ITEM 3. LEGAL PROCEEDINGS
At the time of liquidation the Partnership was not subject to any
pending material legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during
fiscal years 1996 and 1995.
PART II
ITEM 5. MARKET FOR THE PARTNERSHIP'S LIMITED PARTNERSHIP INTERESTS
AND RELATED SECURITY HOLDER MATTERS
Immediately prior to the dissolution of the Partnership, there were
10,322 record holders of the 99,995 Interests outstanding in the
Partnership. On December 31, 1996, the Partnership made a liquidating
distribution and terminated its operations and dissolved the Partnership.
There had been no public market for Interests and it had not been
anticipated that a public market for Interests would develop. Upon
request, the Corporate General Partner provided information relating to a
prospective transfer of Interests to an investor desiring to transfer his
Interests. The price to be paid for the Interests, as well as any other
economic aspects of the transaction, was subject to negotiation by the
investor.
Reference is made to Item 6 below for a discussion of cash distribu-
tions made to the Limited Partners.
<TABLE>
ITEM 6. SELECTED FINANCIAL DATA
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
DECEMBER 31, 1996 (IMMEDIATELY PRIOR TO FINAL LIQUIDATING DISTRIBUTION),
AND YEARS ENDED DECEMBER 31, 1995, 1994, 1993 AND 1992
(NOT COVERED BY INDEPENDENT AUDITORS' REPORT)
<CAPTION>
1996 1995 1994 1993 1992
------------- ------------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Total income. . . . . . . $ 3,158,154 5,734,107 8,998,039 9,668,173 12,851,389
============ =========== =========== =========== ============
Operating earnings
(loss) . . . . . . . . . $ (593,042) (197,836) (96,843) (3,800,303) (3,056,251)
Partnership's share
of operations of
unconsolidated
ventures . . . . . . . . 1,971 (1,875,002) (563,775) (429,451) 3,012,015
Venture partners'
share of ventures'
operations . . . . . . . 71 635 10,250 522,333 (2,633,434)
------------- ------------ ----------- ------------- -----------
Net operating
earnings (loss). . . . . (591,000) (2,072,203) (650,368) (3,707,421) (2,677,670)
Gain (loss) on sale
or disposition of
investment proper-
ties or interest in
investment properties,
net. . . . . . . . . . . 9,103,674 7,065,757 11,122,225 10,367,072 (763,877)
------------- ------------ ----------- ------------- -----------
Net earnings (loss)
before extraordinary
items and cumulative
effect of an account-
ing change . . . . . . . 8,512,674 4,993,554 10,471,857 6,659,651 (3,441,547)
Extraordinary items,
net. . . . . . . . . . . 7,960,843 -- (146,856) -- 2,411,425
Cumulative effect of
an accounting change,
net. . . . . . . . . . . (3,248,506) -- -- -- --
------------- ------------ ----------- ------------- -----------
Net earnings
(loss). . . . . . $ 13,225,011 4,993,554 10,325,001 6,659,651 (1,030,122)
============= ============ =========== ============= ===========
1996 1995 1994 1993 1992
------------- ------------ ----------- ------------- -----------
Net earnings (loss)
per Interest (b):
Net operating
earnings (loss). . . . $ (5.67) (19.89) (6.24) (35.59) (25.70)
Gain (loss) on
sale or disposi-
tion of investment
properties, net. . . . 36.32 69.95 110.11 102.63 (7.56)
Extraordinary
items, net . . . . . . 78.86 -- (1.41) -- 23.87
Cumulative effect
of an accounting
change . . . . . . . . (31.19) -- -- -- --
------------ ----------- ----------- ------------- -----------
$ 78.32 50.06 102.46 67.04 (9.39)
============ =========== =========== ============= ===========
Total assets. . . . . . . $ 5,296,735 28,126,513 49,762,290 45,329,353 66,343,472
Long-term debt. . . . . . $ -- 11,510,916 12,391,857 16,530,351 23,234,806
Cash distributions
per Interest (c)(d). . . $ 100.00 127.50 39.00 15.00 6.00
============ =========== =========== ============= ===========
<FN>
- -------------
(a) The above selected financial data should be read in conjunction with the consolidated financial
statements and the related notes appearing elsewhere in this annual report.
(b) The net earnings (loss) per Interest is based upon the Interests outstanding at the end of the period.
(c) Cash distributions from the Partnership were generally not equal to Partnership income (loss) for
financial reporting or Federal income tax purposes. Each Partner's taxable income (or loss) from the Partnership
in each year was equal to his allocable share of the taxable income (loss) of the Partnership, without regard to
the cash generated or distributed by the Partnership. Accordingly, cash distributions to the Limited Partners
since the inception of the Partnership have not resulted in taxable income to such Limited Partners and have
therefore represented a return of capital.
(d) This amount does not include the final liquidating cash distribution of $5,296,735 ($52.97 per Interest)
to the Limited Partners paid by the Partnership on December 31, 1996.
</TABLE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
As a result of the public offering of Interests as described in Item
1, the Partnership had approximately $90,000,000 (after deducting selling
expenses and other offering costs) with which to make investments in
income-producing commercial and residential real property, to pay legal
fees and other costs (including acquisition fees) related to such
investments and for working capital reserves. A portion of such proceeds
was utilized to acquire the properties described in Item 1 above.
During 1996 some of the Limited Partners in the Partnership received
from unaffiliated third parties unsolicited tender offers to purchase up to
4.9% Interests in the Partnership at amounts ranging from $30 to $55 per
Interest. The Partnership recommended against acceptance of these offers
on the basis that, among other things, the offer prices were inadequate.
As of the date of this report, the Partnership is aware that 407.25
Interests have been purchased by such unaffiliated third parties either
pursuant to such tender offers or through negotiated purchases. In
addition, the Partnership had, from time to time, received inquires from
other third parties that may have considered making offers for Interests,
including requests for the list of Limited Partners in the Partnership.
These inquiries were generally preliminary in nature. The board of
directors of JMB Realty Corporation ("JMB") the Corporate General Partner
of the Partnership, had established a special committee (the "Special
Committee") consisting of certain directors of JMB to deal with all matters
relating to tender offers for Interests in the Partnership, including any
and all responses to such tender offers. The Special Committee had
retained independent counsel to advise it in connection with any potential
tender offers for Interests and had retained Lehman Brothers Inc. as
financial advisor to assist the Special Committee in evaluating and
responding to potential tender offers for Interests.
In October 1996, the Partnership sold the Sunrise Mall. Reference is
made to the Notes for a further description of such sale.
In December 1996, the Partnership sold its interest in the Greenway
Tower Joint Venture to its venture partner. Reference is made to the Notes
for a further description of such sale.
On December 31, 1996, the Partnership made a final liquidating
distribution of $5,296,735 ($52.97 per Interest) to the Limited Partners.
RESULTS OF OPERATIONS
Significant variances between periods reflected in the accompanying
consolidated financial statements are the result of the sale of the
Partnership's interest in the Greenway Tower Joint Venture in December
1996, the sale of the Sunrise Mall in October 1996, the lender realizing
upon its security in the Holly Pond Office Center in January 1996, the sale
of the Partnership's interest in the Garret Mountain Venture in January
1995 and the sale of the Silvermine Apartments in November 1994.
The decrease in cash and cash equivalents at December 31, 1996 as
compared to December 31, 1995 is primarily due to the distribution of
$9,999,500 ($100 per Interest) made to the Limited Partners in May 1996.
This is partially offset by proceeds received totalling approximately
$1,266,000 from the sale of the Sunrise Mall in October 1996 and the sale
of the Partnership's interest in the Greenway Tower Joint Venture in
December 1996.
The decrease in interest income for 1996 as compared to 1995 is
primarily due to the distribution of $9,999,500 in May 1996 reducing the
average balance of interest earning investments for 1996. The increase in
interest income in 1995 as compared to 1994 is primarily the result of an
increase in the average balance of investments in U.S. Government
obligations in 1995. This increase is also due to an increase in the
average rate of interest earned on investments in U.S. Government
obligations in 1995.
The decrease in depreciation for 1996 as compared to 1995 is primarily
due to the classification of the Sunrise Mall as an asset held for sale or
disposition on July 1, 1996, and therefore not subject to continued
depreciation.
The increase in general and administrative expenses for 1996 as
compared to 1995 and 1994 is primarily due to an increase in certain costs
due to the winding up of the Partnership.
The increase in Partnership's share of operations of unconsolidated
venture for 1996 as compared to 1995 and decrease in 1995 as compared to
1994 is primarily due to Greenway Towers $1,300,000 provision for value
impairment made as of September 30, 1995 (all of which was allocated to the
Partnership) to reduce the net carrying value of the Greenway Towers Office
Building. Additionally, the increase in 1996 as compared to 1995 is due to
the sale of the Partnership's remaining interest in Carlyle Seattle in
December 1995.
INFLATION
Due to the decrease in the level of inflation in recent years,
inflation generally has not had a material effect on rental income or
property operating expenses.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
INDEX
Independent Auditors' Report
Consolidated Balance Sheets, December 31, 1996 (Immediately prior to
final liquidating distribution) and December 31, 1995
Consolidated Statements of Operations, years ended December 31,
1996 (Immediately prior to final liquidating distribution),
1995 and 1994
Consolidated Statements of Partners' Capital Accounts (Deficits),
years ended December 31, 1996 (Immediately prior to final liquidating
distribution), 1995 and 1994
Consolidated Statements of Cash Flows, years ended December 31,
1996 (Immediately prior to final liquidating distribution),
1995 and 1994
Notes to Consolidated Financial Statements
SCHEDULES NOT FILED:
All schedules have been omitted as the required information is
inapplicable or the information is presented in the financial statements or
related notes.
INDEPENDENT AUDITORS' REPORT
The Partners
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X:
We have audited the consolidated financial statements of Carlyle Real
Estate Limited Partnership - X (a limited partnership) and consolidated
ventures as listed in the accompanying index. These consolidated financial
statements are the responsibility of the General Partners of the
Partnership. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by the General Partners of the
Partnership, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position of
Carlyle Real Estate Limited Partnership - X and consolidated ventures at
December 31, 1996 (immediately prior to final liquidating distribution) and
1995, and the results of their operations and their cash flows for each of
the years in the three-year period ended December 31, 1996 (immediately
prior to final liquidating distribution), in conformity with generally
accepted accounting principles.
As discussed in the Notes to the consolidated financial statements, in
1996, the Partnership and its consolidated ventures changed their method of
accounting for long-lived assets and long-lived assets to be disposed of to
conform with Statement of Financial Accounting Standards No. 121.
KPMG PEAT MARWICK LLP
Chicago, Illinois
March 14, 1997
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1996 (IMMEDIATELY PRIOR TO FINAL LIQUIDATING DISTRIBUTION) AND DECEMBER 31, 1995
ASSETS
------
<CAPTION>
1996 1995
------------ -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . $ 5,296,735 14,795,994
Rents and other receivables . . . . . . . . . . . . . . . . . . . . -- 257,286
Escrow deposits . . . . . . . . . . . . . . . . . . . . . . . . . . -- 89,230
----------- -----------
Total current assets. . . . . . . . . . . . . . . . . . . . 5,296,735 15,142,510
----------- -----------
Investment properties, at cost:
Land. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 3,035,308
Buildings and improvements. . . . . . . . . . . . . . . . . . . . . -- 23,778,556
----------- -----------
-- 26,813,864
Less accumulated depreciation . . . . . . . . . . . . . . . . . . . -- 15,499,705
----------- -----------
Total investment properties,
net of accumulated depreciation . . . . . . . . . . . . . -- 11,314,159
----------- -----------
Investment in unconsolidated ventures, at equity. . . . . . . . . . . -- 1,217,075
Deferred expenses . . . . . . . . . . . . . . . . . . . . . . . . . . -- 81,272
Accrued rents receivable. . . . . . . . . . . . . . . . . . . . . . . -- 371,497
----------- -----------
$ 5,296,735 28,126,513
=========== ===========
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED BALANCE SHEETS - CONTINUED
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
-----------------------------------------------------
1996 1995
----------- -----------
Current liabilities:
Current portion of long-term debt . . . . . . . . . . . . . . . . . $ -- 5,464,428
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . -- 323,991
Accrued interest. . . . . . . . . . . . . . . . . . . . . . . . . . -- 3,519,734
Accrued real estate taxes . . . . . . . . . . . . . . . . . . . . . -- 358,207
----------- -----------
Total current liabilities . . . . . . . . . . . . . . . . . -- 9,666,360
Tenant security deposits. . . . . . . . . . . . . . . . . . . . . . . -- 77,818
Long-term debt, less current portion. . . . . . . . . . . . . . . . . -- 11,510,916
----------- -----------
Commitments and contingencies
Total liabilities . . . . . . . . . . . . . . . . . . . . . -- 21,255,094
Venture partners' subordinated equity in ventures . . . . . . . . . . -- 4,849,130
Partners' capital accounts (deficits):
General partners:
Capital contributions. . . . . . . . . . . . . . . . . . . . . . 49,935 1,000
Cumulative net earnings (loss) . . . . . . . . . . . . . . . . . 910,007 (4,483,318)
Cumulative cash distributions. . . . . . . . . . . . . . . . . . (959,942) (959,942)
----------- -----------
-- (5,442,260)
----------- -----------
Limited partners:
Capital contributions, net of offering costs . . . . . . . . . . 90,049,709 90,049,709
Cumulative net earnings (loss) . . . . . . . . . . . . . . . . . (5,769,775) (13,601,461)
Cumulative cash distributions. . . . . . . . . . . . . . . . . . (78,983,199) (68,983,699)
----------- -----------
5,296,735 7,464,549
----------- -----------
Total partners' capital accounts. . . . . . . . . . . . . . 5,296,735 2,022,289
----------- -----------
$ 5,296,735 28,126,513
=========== ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1996 (IMMEDIATELY PRIOR TO FINAL LIQUIDATING DISTRIBUTION),
1995 AND 1994
<CAPTION>
1996 1995 1994
------------ ------------ ------------
<S> <C> <C> <C>
Income:
Rental income . . . . . . . . . . . . . . . . . . $ 2,771,229 4,778,321 8,284,677
Interest income . . . . . . . . . . . . . . . . . 386,925 955,786 713,362
------------ ------------ ------------
3,158,154 5,734,107 8,998,039
------------ ------------ ------------
Expenses:
Mortgage and other interest . . . . . . . . . . . 922,028 1,806,279 3,108,450
Depreciation. . . . . . . . . . . . . . . . . . . 172,820 621,708 1,173,001
Property operating expenses . . . . . . . . . . . 1,915,455 2,832,486 4,018,407
Professional services . . . . . . . . . . . . . . 289,873 300,423 294,686
Amortization of deferred expenses . . . . . . . . -- 9,171 207,632
Management fees to corporate general
partner . . . . . . . . . . . . . . . . . . . . -- 52,081 41,669
General and administrative. . . . . . . . . . . . 451,020 309,795 251,037
------------ ------------ ------------
3,751,196 5,931,943 9,094,882
------------ ------------ ------------
Operating earnings (loss). . . . . . . . . . . (593,042) (197,836) (96,843)
Partnership's share of operations of
unconsolidated ventures . . . . . . . . . . . . . 1,971 (1,875,002) (563,775)
Venture partners' share of ventures'
operations. . . . . . . . . . . . . . . . . . . . 71 635 10,250
------------ ------------ ------------
Net operating earnings (loss). . . . . . . . . (591,000) (2,072,203) (650,368)
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF OPERATIONS - CONTINUED
1996 1995 1994
------------ ------------ ------------
Gain on sale or disposition of
investment properties or interest in
investment property, net of venture
partner's gain (loss) of ($4,105,680) in 1996
and $1,297,406 in 1994. . . . . . . . . . . . . . 9,103,674 7,065,757 11,122,225
------------ ------------ ------------
Net earnings (loss) before
extraordinary items and
cumulative effect of an
accounting change . . . . . . . . . . . . . 8,512,674 4,993,554 10,471,857
Extraordinary item - prepayment penalties,
net of venture partners' share of $146,856
in 1994 . . . . . . . . . . . . . . . . . . . . . (146,982) -- (146,856)
Extraordinary item - gain on forgiveness
of indebtedness, net of venture partner's
gain of $8,116 in 1996. . . . . . . . . . . . . . 8,107,825 -- --
Cumulative effect of an accounting change,
net of venture partner's share of $751,494
in 1996 . . . . . . . . . . . . . . . . . . . . . (3,248,506) -- --
------------ ------------ ------------
Net earnings (loss). . . . . . . . . . . . . . $ 13,225,011 4,993,554 10,325,001
============ ============ ============
Net earnings (loss) per limited
partnership interest:
Net operating earnings (loss). . . . . . . $ (5.67) (19.89) (6.24)
Gain on sale or disposi-
tion of investment
properties, net. . . . . . . . . . . . . 36.32 69.95 110.11
Extraordinary items, net . . . . . . . . . 78.86 -- (1.41)
Cumulative effect of an
accounting change. . . . . . . . . . . . (31.19) -- --
------------ ------------ ------------
$ 78.32 50.06 102.46
============ ============ ============
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
YEARS ENDED DECEMBER 31, 1996 (IMMEDIATELY PRIOR TO FINAL LIQUIDATING DISTRIBUTION), 1995 AND 1994
<CAPTION>
GENERAL PARTNERS LIMITED PARTNERS
------------------------------------------------ ---------------------------------------------------
CONTRI-
BUTIONS
NET NET OF NET
CONTRI- EARNINGS CASH OFFERING EARNINGS CASH
BUTIONS (LOSS) DISTRIBUTIONS TOTAL COSTS (LOSS) DISTRIBUTIONS TOTAL
------- ---------- ------------- ----------- ----------- ---------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance
(deficit)
December 31,
1993 . . . . $1,000 (4,550,420) (903,693) (5,453,113) 90,049,709 (28,852,914) (52,334,185) 8,862,610
Net earnings
(loss) . . . -- 79,333 -- 79,333 -- 10,245,668 -- 10,245,668
Cash distribu-
tions ($39.00
per limited
partnership
interest). . -- -- (25,001) (25,001) -- -- (3,900,151) (3,900,151)
------ ----------- -------- ---------- ---------- ----------- ----------- -----------
Balance
(deficit)
December 31,
1994 . . . . 1,000 (4,471,087) (928,694) (5,398,781) 90,049,709 (18,607,246) (56,234,336) 15,208,127
Net earnings
(loss) . . . -- (12,231) -- (12,231) -- 5,005,785 -- 5,005,785
Cash distribu-
tions ($127.50
per limited
partnership
interest). . -- -- (31,248) (31,248) -- -- (12,749,363)(12,749,363)
------ ----------- -------- ---------- ---------- ----------- ----------- -----------
Balance
(deficit)
December 31,
1995 . . . . 1,000 (4,483,318) (959,942) (5,442,260) 90,049,709 (13,601,461) (68,983,699) 7,464,549
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS (DEFICITS) - CONTINUED
GENERAL PARTNERS LIMITED PARTNERS
------------------------------------------------ ---------------------------------------------------
CONTRI-
BUTIONS
NET NET OF NET
CONTRI- EARNINGS CASH OFFERING EARNINGS CASH
BUTIONS (LOSS) DISTRIBUTIONS TOTAL COSTS (LOSS) DISTRIBUTIONS TOTAL
------- ---------- ------------- ----------- ----------- ---------- ------------- -----------
Net earnings
(loss) . . . -- 5,393,325 -- 5,393,325 -- 7,831,686 -- 7,831,686
Capital con-
tributions . 48,935 -- -- 48,935
Cash distribu-
tions ($100
per limited
partnership
interest)
(1). . . . . -- -- -- -- -- -- (9,999,500) (9,999,500)
------ ----------- -------- ---------- ---------- ----------- ----------- ----------
Balance
(deficit)
December 31,
1996 (1) . . $49,935 910,007 (959,942) -- 90,049,709 (5,769,775) (78,983,199) 5,296,735
====== =========== ======== ========== ========== =========== =========== ==========
<FN>
(1) Immediately prior to final distribution.
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1996 (IMMEDIATELY PRIOR TO FINAL LIQUIDATING DISTRIBUTION), 1995 AND 1994
<CAPTION>
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings (loss) . . . . . . . . . . . . . . . $13,225,011 4,993,554 10,325,001
Items not requiring (providing) cash
or cash equivalents:
Depreciation. . . . . . . . . . . . . . . . . . 172,820 621,708 1,173,001
Amortization of deferred expenses . . . . . . . -- 9,171 207,632
Partnership's share of operations of
unconsolidated ventures . . . . . . . . . . . (1,971) 1,875,002 563,775
Venture partners' share of ventures'
operations, extraordinary item and
cumulative effect of an accounting
change. . . . . . . . . . . . . . . . . . . . (4,849,130) (635) 1,140,300
Total gain on sale of investment properties
or interest in investment property. . . . . . (4,997,993) (7,065,757) (12,419,631)
Total extraordinary items . . . . . . . . . . . (7,968,959) -- 293,712
Cumulative effect of an accounting
change. . . . . . . . . . . . . . . . . . . . 4,000,000 -- --
Changes in:
Rents and other receivables . . . . . . . . . . 112,275 (27,887) (113,103)
Escrow deposits . . . . . . . . . . . . . . . . 89,230 (54,716) 149,379
Accrued rents receivable. . . . . . . . . . . . (34,743) (15,558) (91,667)
Accounts payable. . . . . . . . . . . . . . . . (140,039) (27,667) (143,608)
Accrued interest. . . . . . . . . . . . . . . . (59,746) 633,023 810,180
Accrued real estate taxes . . . . . . . . . . . (81,084) (83,489) (417,870)
Tenant security deposits. . . . . . . . . . . . (11,122) 59,018 (38,559)
----------- ----------- -----------
Net cash provided by (used in)
operating activities. . . . . . . . . . (545,451) 915,767 1,438,542
----------- ----------- -----------
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
1996 1995 1994
----------- ----------- -----------
Cash flows from investing activities:
Net sales and maturities (purchases) of
short-term investments. . . . . . . . . . . . . -- 3,120,977 14,483,890
Additions to investment properties. . . . . . . . (33,075) (237,719) (546,394)
Cash proceeds from sale of investment
properties, net of selling expenses . . . . . . 1,266,160 50,000 1,631,512
Cash proceeds from prepayment of note
receivable. . . . . . . . . . . . . . . . . . . -- 225,000 --
Partnership's distributions from
unconsolidated ventures . . . . . . . . . . . . -- 22,500 11,058,159
Writeoff of deferred expenses . . . . . . . . . . -- 85,835 --
Payment of deferred expenses. . . . . . . . . . . (14,728) (81,272) (187,521)
----------- ----------- -----------
Net cash provided by (used in)
investing activities. . . . . . . . . . 1,218,357 3,185,321 26,439,646
----------- ----------- -----------
Cash flows from financing activities:
Principal payments on long-term debt. . . . . . . (221,600) (244,130) (343,606)
Venture partner's contributions to venture. . . . -- -- 31,302
Distributions to venture partners . . . . . . . . -- -- (578,460)
Distributions to limited partners . . . . . . . . (9,999,500) (12,749,363) (3,900,151)
Contributions from general partners . . . . . . . 48,935 (31,248) (25,001)
----------- ----------- -----------
Net cash provided by (used in)
financing activities. . . . . . . . . . (10,172,165) (13,024,741) (4,815,916)
----------- ----------- -----------
Net increase (decrease) in cash
and cash equivalents. . . . . . . . . . (9,499,259) (8,923,653) 23,062,272
Cash and cash equivalents,
beginning of year . . . . . . . . . . . 14,795,994 23,719,647 657,375
----------- ----------- -----------
Cash and cash equivalents,
end of year . . . . . . . . . . . . . . $ 5,296,735 14,795,994 23,719,647
=========== =========== ===========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest . . . . $ 981,774 1,173,256 2,298,270
=========== =========== ===========
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
1996 1995 1994
----------- ----------- -----------
Non-cash investing and financing activities:
Disposition of investment properties:
Balance due on long-term debt canceled. . . . $ 5,196,401 -- --
Accrued interest expense on accelerated
long-term debt. . . . . . . . . . . . . . . 3,459,988 -- --
Reduction of investment properties. . . . . . (802,857) -- --
Reduction of current assets and
liabilities . . . . . . . . . . . . . . . . 262,409 -- --
----------- ----------- -----------
Non-cash gain recognized due to
lender realizing upon security. . . . $ 8,115,941 -- --
=========== =========== ===========
Sale of investment properties:
Total sales proceeds, net of
selling expenses. . . . . . . . . . . . . . $12,120,485 -- 5,610,644
Prepayment penalty. . . . . . . . . . . . . . (146,982) -- (153,865)
Principal balance due on mortgage payable . . (11,557,343) -- (3,825,267)
----------- ----------- -----------
Cash proceeds from sale of investment
properties, net of selling expenses . . $ 416,160 -- 1,631,512
=========== =========== ===========
Sale of interest in investment property:
Gain (loss) on sale of interest in
investment property . . . . . . . . . . . . $ (366,084) 1,350,289 --
Basis of interest in investment property. . . 1,216,084 (1,075,289) --
Note receivable . . . . . . . . . . . . . . . -- (225,000) --
----------- ----------- -----------
Cash proceeds from sale of interest
in investment property. . . . . . . . . $ 850,000 50,000 --
=========== =========== ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996 (IMMEDIATELY PRIOR TO
FINAL LIQUIDATING DISTRIBUTION), 1995 AND 1994
OPERATIONS AND BASIS OF ACCOUNTING
GENERAL
The Partnership held (either directly or through joint ventures) an
equity investment portfolio of United States real estate. Business
activities consisted of rentals to a wide variety of commercial and retail
companies, and the ultimate sale or disposition of such real estate.
The accompanying consolidated financial statements include the
accounts of the Partnership and its majority-owned consolidated ventures,
Holly Pond Associates ("Holly Pond"), Garret Mountain Office Center
Associates I ("Garret Mountain"), Victoria Apartments Partnership
("Victoria"), and Greenway Associates ("Greenway"). The effect of all
transactions between the Partnership and the consolidated ventures has been
eliminated. The equity method of accounting has been applied in the
accompanying consolidated financial statements with respect to the
Partnership's interests in Carlyle Seattle Associates ("Carlyle Seattle"),
and Greenway Tower Joint Venture ("Greenway Tower"). Accordingly, the
accompanying consolidated financial statements do not include the accounts
of Carlyle Seattle and Carlyle Seattle's venture, Wright-Carlyle Seattle
("First Interstate") or Greenway's venture, Greenway Tower.
The Partnership records were maintained on the accrual basis of
accounting as adjusted for Federal income tax reporting purposes. The
accompanying consolidated financial statements have been prepared from such
records after making appropriate adjustments to present the Partnership's
accounts in accordance with generally accepted accounting principles
("GAAP") and to consolidate the accounts of the consolidated ventures as
described above. Such GAAP and consolidation adjustments were not recorded
on the records of the Partnership. The net effect of these items for the
years ended December 31, 1996 (immediately prior to final liquidating
distribution) and December 31, 1995 is summarized as follows:
<TABLE>
<CAPTION>
1996 1995
-------------------------------- ------------------------------
TAX BASIS TAX BASIS
GAAP BASIS (UNAUDITED) GAAP BASIS (UNAUDITED)
------------ ----------- ------------ ----------
<S> <C> <C> <C> <C>
Total assets. . . . . . . . . . . . $ 5,296,735 5,296,735 28,126,513 21,192,781
Partners' capital accounts
(deficit):
General partners. . . . . . . . -- -- (5,442,260) (979,448)
Limited partners. . . . . . . . 5,296,735 5,296,735 7,464,549 17,667,759
Net earnings (loss):
General partners. . . . . . . . 5,393,325 930,513 (12,231) 1,087,042
Limited partners. . . . . . . . 7,831,686 (2,371,524) 5,005,785 769,592
Net earnings (loss) per
limited partnership
interest. . . . . . . . . . . . . 78.32 (23.72) 50.06 7.70
============ ========== ========== ============
</TABLE>
The net earnings (loss) per limited partnership interest is based upon
the Interests outstanding at the end of each period. Also, because net
earnings are computed immediately prior to dissolution, Holders of
interests may have on dissolution, an additional capital gain or loss
depending on the Holders basis for Federal income tax purposes.
The preparation of financial statements in accordance with GAAP
required the Partnership to make estimates and assumptions that affected
the reported or disclosed amount of assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results may have differed from those
estimates.
Statement of Financial Accounting Standards No. 95 required the
Partnership to present a statement which classifies receipts and payments
according to whether they stemmed from operating, investing or financing
activities. The required information has been segregated and accumulated
according to the classification specified in the pronouncement. Partner-
ship distributions from unconsolidated ventures were considered cash flow
from operating activities only to the extent of the Partnership's
cumulative share of net earnings. In addition, the Partnership recorded
amounts held in U.S. Government obligations at cost which approximated
market. For the purposes of these financial statements, the Partnership's
policy was to consider all such amounts held with original maturities of
three months or less (none and $13,503,187 at December 31, 1996 and 1995,
respectively) as cash equivalents, which included investments in an
institutional mutual fund which holds United States Government obligations,
with any remaining amounts (generally with original maturities of one year
or less) reflected as short-term investments being held to maturity.
Deferred expenses consisted primarily of leasing fees incurred in
connection with procuring tenants and loan fees incurred in connection with
the acquisition of the properties. Deferred leasing fees were amortized
using the straight-line method over the terms stipulated in the related
agreements. Deferred loan fees were amortized over the related loan
periods.
Although certain leases of the Partnership provided for tenant
occupancy during periods for which no rent was due and/or increases in
minimum lease payments over the term of the lease, rental income was
accrued for the full period of occupancy on a straight-line basis.
No provision for state or Federal income taxes had been made as the
liability for such taxes is that of the Partners rather than the
Partnership. However, in certain instances, the Partnership had been
required under applicable law to remit directly to the taxing authorities
amounts representing withholding from distributions paid to Partners.
Depreciation on the operating properties had been provided over the
estimated useful lives of 5 to 30 years using the straight-line method.
Maintenance and repair expenses were charged to operations as
incurred. Significant betterments and improvements were capitalized and
depreciated over their estimated useful lives.
Statement of Financial Accounting Standards No. 121 ("SFAS 121")
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of" was issued in March 1995. The Partnership
adopted SFAS 121 as required in the first quarter of 1996. SFAS 121
required that the Partnership record an impairment loss on its properties
to be held for investment whenever their carrying value cannot be fully
recovered through estimated undiscounted future cash flows from their
operations and sale. The amount of the impairment loss to be recognized
would be the difference between the property's carrying value and the
property's estimated fair value. In addition, the $4,000,000 impairment
loss on the Holly Pond Office Center investment property, which was
categorized as held for sale or disposition at January 1, 1996 upon
adoption of SFAS 121, has been reflected in the accompanying consolidated
financial statements as the cumulative effect of an accounting change as
provided by SFAS 121. In accordance with SFAS 121, any properties
identified as "held for sale or disposition" were no longer depreciated.
Adjustments for impairment loss for such properties (subsequent to the date
of adoption of SFAS 121) were made in each period as necessary to report
these properties at the lower of carrying value or fair value less costs to
sell. In certain situations, such estimated fair value could be less than
the existing non-recourse debt which was secured by the property. There
was no assurance that any estimated fair value of these properties would
ultimately be obtained by the Partnership in any future sale or disposition
transaction.
Under the prior accounting policy, provisions for value impairment
were recorded with respect to investment properties whenever the estimated
future cash flows from a property's operations and projected sale were less
than the property's carrying value. The amount of any such impairment loss
recognized by the Partnership was limited to the excess, if any, of the
property's carrying value over the outstanding balance of the property's
non-recourse indebtedness. An impairment loss under SFAS 121 was
determined without regard to the nature or the balance of such non-recourse
indebtedness. Upon the disposition of a property with the related
extinguishment of the long-term debt for which an impairment loss has been
recognized under SFAS 121, the Partnership recognized, at a minimum, a net
gain for financial reporting purposes (comprised of gain on extinguishment
of debt and gain or loss on the sale or disposition of property) for
financial reporting purposes to the extent of any excess of the then
outstanding balance of the property's non-recourse indebtedness over the
then carrying value of the property, including the effect of any reduction
for impairment loss under SFAS 121.
In addition, upon the disposition of any impaired property, the
Partnership generally recognized more net gain for financial reporting
purposes under SFAS 121 than it would have under the Partnership's prior
impairment policy, without regard to the amount, if any, of cash proceeds
received by the Partnership in connection with the disposition. Although
implementation of this accounting statement impacted the Partnership's
reported earnings, there was no impact on cash flows. Further, any such
impairment loss was not recognized for Federal income tax purposes.
The results of operations for consolidated properties sold or disposed
of during the past three years were ($250,615), ($2,063,365) and
($529,100), respectively, for the years ended December 31, 1996, 1995 and
1994.
In addition, the accompanying consolidated financial statements
include $0, ($345,431), ($411,465), respectively, of the Partnership's
share of total property operations of $0, ($1,293,750) and ($1,618,070) of
the unconsolidated property sold or disposed of in the past three years.
INVESTMENT PROPERTIES
CARLYLE SEATTLE
During 1982, the Partnership acquired, through a joint venture ("First
Interstate") between Carlyle Seattle and the developer, an office building
in Seattle, Washington. Carlyle Seattle was a joint venture between the
Partnership and Carlyle Real Estate Limited Partnership-XII ("C-XII"), an
affiliated partnership sponsored by the Corporate General Partner of the
Partnership. Under the terms of the First Interstate venture agreement,
Carlyle Seattle made initial cash contributions aggregating $30,000,000
($8,000,000 by the Partnership).
The terms of the Carlyle Seattle venture agreement provided that all
the capital contributions were to be made in the proportion of 26.7% by the
Partnership and 73.3% by C-XII. The Carlyle Seattle venture agreement
further provides that all of the venture's share of First Interstate's
annual cash flow, sale or refinancing proceeds, operating profits and
losses, and tax items will be allocated 26.7% to the Partnership and 73.3%
to C-XII.
Prior to the sale transaction described below, Carlyle Seattle was
generally entitled to receive a cumulative $2,400,000 per annum preferred
distribution of cash flow. Any excess cash flow was first distributable to
the First Interstate joint venture partner up to the next $500,000 then 50%
to Carlyle Seattle and 50% to the First Interstate joint venture partner.
Operating profits or losses of the First Interstate joint venture generally
were allocated in the same ratio as the allocation of annual cash flow,
however, the joint venture partner was to be allocated not less than 25% of
such profits and losses.
In May 1994, Carlyle Seattle executed an agreement which granted an
option to sell its interest in First Interstate to the unaffiliated venture
partner. The agreement provided for the purchase of 49.95% of Carlyle
Seattle's interest by October 17, 1994 (for which Carlyle Seattle received
a non-refundable deposit of $500,000 on June 30, 1994 and which was
subsequently extended until December 22, 1994 with the receipt of an
additional $500,000 on September 22, 1994) with an option for the
unaffiliated venture partner to purchase the remaining 50.05% of Carlyle
Seattle's interest between one year and two years after the sale closing
date. On December 1, 1994 (initial sale transaction closing), Carlyle
Seattle received (from the unaffiliated joint venture partner) $20,276,000
in cash (less non-refundable deposits as described above) for 49.95% of its
interest. The unaffiliated venture partner paid $5,000,000 cash for the
option of the unaffiliated venture partner to purchase the remaining 50.05%
of Carlyle Seattle's interest in First Interstate. Additionally, the
unaffiliated venture partner loaned Carlyle Seattle $15,000,000 (bearing
interest at a rate of 9% per annum with accrued interest and unpaid
principal due on January 1, 1997) which was secured by the remaining 50.05%
of Carlyle Seattle's interest in First Interstate. The exercise price for
the remaining 50.05% interest was to be $21,350,000 if the purchase option
was exercised on or before December 22, 1995 and increasing 7% per annum
thereafter until the termination of the option period. The $5,000,000
option purchase price and the balance of unpaid principal and accrued
interest on the $15,000,000 Carlyle Seattle loan could be applied toward
the exercise price. In connection with the sale transaction, the First
Interstate joint venture agreement was amended to cause the joint venture
to be converted to a limited partnership in which Carlyle Seattle was the
sole limited partner and the unaffiliated venture partner was the sole
general partner. Additionally, the amendment states that no profits,
income or gain was to be allocable to Carlyle Seattle except to the extent
that Carlyle Seattle received distributions from First Interstate and
operating losses were to be allocated to the extent of Carlyle Seattle's
positive capital account balance and thereafter at 25.025%. The amended
Venture Agreement provided that any distributions to Carlyle Seattle were
subordinate to the joint venture partner's preferred return (as defined).
No distributions were made to Carlyle Seattle from operations subsequent to
the initial sale transaction. Additionally, effective December 1, 1994 and
through the final disposition date, the equity method of accounting was
applied with respect to Carlyle Seattle's interest in First Interstate as
Carlyle Seattle's interest decreased to less than 50% and was converted to
a limited partnership interest. The Partnership's share of proceeds from
this transaction was approximately $10,754,000. Carlyle Seattle recognized
a gain of $34,583,869 (of which the Partnership's share was $9,373,572) for
financial reporting purposes in 1994 and a gain of $83,565,440 (of which
the Partnership's share was $22,340,642) for Federal income tax purposes in
1994.
On December 15, 1995, the unaffiliated venture exercised its option to
purchase the Partnership's remaining 50.05% interest in Carlyle Seattle for
$21,350,000. The exercise price was satisfied by applying the $5,000,000
option purchase price paid at the initial closing and applying the balance
of unpaid principal ($15,000,000) and accrued interest ($1,406,250) on the
Carlyle Seattle loan. Therefore, there are no additional cash proceeds
from the sale of Carlyle Seattle's remaining 50.05% interest. As a result
of this transaction, Carlyle Seattle realized a gain on sale of
approximately $21,406,000 for financial reporting purposes in 1995 of which
the Partnership's share is approximately $5,715,000.
The office building was managed by an affiliate of the First
Interstate joint venture partner for a fee computed at 2% of base and
percentage rents.
GREENWAY TOWER OFFICE BUILDING
Greenway Associates had been discussing a potential buyout of its
interest in the Greenway Tower Joint Venture by its venture partner. On
December 26, 1996 the venture partner purchased Greenway Associates
interest in the Greenway Tower Joint Venture for $850,000, which was paid
in cash at closing. The Partnership received the entire $850,000 of sale
proceeds as repayment of disproportionate contributions and accrued but
unpaid return on such contributions as defined in the Greenway Associates
amended venture agreement (discussed below). As a result of this
transaction, the venture recognized a loss of approximately $366,000 of
which the Partnership's share was a gain of approximately $3,740,000 for
financial reporting purposes and a gain of approximately $1,539,000 of
which the Partnership's share was approximately $601,000 for Federal income
tax purposes in 1996.
In January 1988, the Partnership and its venture partner agreed to
amend the existing partnership agreement for the Greenway Associates
Partnership which is a venture partner in Greenway Tower Joint Venture
("Greenway Tower"), discussed below. The amendment provided, among other
changes, that distributions of net sales or refinancing proceeds first be
used to pay back to any disproportionate contributions (as defined) and any
accrued but unpaid return on such contributions made by either partner.
Any remaining proceeds were then to be allocated first to the venture
partner up to $2,800,000 and then to the Partnership up to $11,200,000.
All remaining proceeds were to be allocated with respect to the venture
ownership percentages.
In September 1987, Greenway Associates entered into an agreement with
an additional venture partner to form a new venture, Greenway Tower. The
terms of the Greenway Tower agreement called for contributions of the
property, subject to the original first mortgage loan, plus additional cash
contributions from both partners.
In October 1992, the Greenway Tower venture refinanced the first and
second mortgage notes with a new first mortgage note of $9,000,000. The
initial advance of the note was $5,750,000 and allowed for additional
advances of up to $3,250,000 for approved tenant improvements, leasing
commissions, interest advances, capital improvements and under certain
circumstances borrower equity repayments. Such replacement financing
matures October 31, 1999 and requires monthly installments of interest
equal to the "Contract Interest Rate", computed as 3.75% per annum in
excess of the lender's composite commercial paper rate. To the extent such
rate exceeded 9% in year one, 9.5% in year two, 10% in years three and four
and 10.5% in years five through seven ("Applicable Base Percentage Rate"),
the venture may defer the difference for a given month provided that the
total interest deferred does not exceed 10% of the existing loan balance.
Any deferred interest was due when and to the extent that in any one month
the Contract Index Rate was less than the Applicable Base Percentage Rate
along with the existing principal balance upon maturity of the loan.
Pursuant to the replacement financing, the lender participates in 50% of
the net cash flow from the property as well as in 50% of any net proceeds
resulting from the sale of the property. In addition, the Greenway Tower
Joint Venture agreement was amended to reflect a 45% interest for Greenway
Associates and a 55% interest for the venture partner. In 1995 or 1996, no
such excess cash flow or sale proceeds participation had been paid or
accrued by Greenway. In order to secure the replacement financing, the
venture had been required to make a capital contribution of $635,574
($286,008 of which was paid by the Partnership); however, portions of this
contribution could have been refunded to the venture. The Partnership had
received a partial refund of approximately $261,000 (including interest) of
its original contribution.
PARK PLACE
In April 1986, as a result of defaults by the venture partner in its
obligations under the joint venture partnership and related agreements, the
venture partner transferred its interest in the joint venture to the
Partnership and the two individual principals of the venture partner signed
non-interest bearing promissory notes in the aggregate amount of $1,000,000
payable to the joint venture on April 24, 1991. The notes had not been
recorded in the accompanying consolidated financial statements due to the
unlikelihood of their collection. The Partnership obtained judgments
against the makers of the notes aggregating $1,024,000 for which
enforcement was pursued. However, it was unlikely the Partnership would be
able to collect fully upon these judgements as it was uncertain whether
these individuals had sufficient assets to satisfy the judgments in whole
or in part. During 1995, the Partnership received $30,000 and title to a
certain parcel of residential real estate as settlement of such judgements.
Such residential real estate was sold in 1996 for nominal proceeds.
SILVERMINE APARTMENTS
On November 29, 1994, the Partnership through its venture, Victoria
Apartments Partnership, sold the land, buildings, related improvements and
personal property of the Silvermine Apartments, located in Victoria, Texas
for $5,750,000. After retirement of the related mortgage note, payment of
a mortgage prepayment fee, closing costs and prorations, cash proceeds from
the sale was $1,635,663, of which the Partnership received $1,143,216. As
a result of the sale, the Partnership recognized a net gain of $1,601,796
(comprised of a gain on sale of investment property of $1,748,652 and an
extraordinary loss of $146,856 due to the prepayment fee and the retirement
of deferred expenses related to the mortgage note for financial reporting
purposes, net of the venture partner's share of $1,150,550). In addition,
the Partnership recognized a gain in 1994 of $3,161,480 for Federal income
tax purposes.
GARRET MOUNTAIN
On January 25, 1995, the Partnership sold its interest in the Garret
Mountain venture to its venture partner. The sale price was $300,000,
represented by $50,000 in cash at closing and an interest bearing note for
$250,000 originally due February 1, 1997. The note earned interest at 10%
per annum and was payable in monthly payments of interest only until
maturity when the full principal balance was scheduled to be due. The note
provided that at any time on or prior to April 25, 1995, the venture
partner could prepay the note in whole, without penalty or additional
interest, by the payment to the Partnership of a discounted sum of
$225,000, together with any accrued but unpaid interest then owing on the
outstanding principal balance of the note on the date of such discounted
prepayment. The venture partner exercised this option on April 24, 1995,
therefore, the sale price was adjusted to $275,000 to reflect the
discounted payment.
As a result of the sale of its interest, the Partnership had
recognized in 1995 a gain of $1,350,289 for financial reporting purposes
and $1,631,285 for Federal income tax purposes.
The Garret Mountain venture had approached the first mortgage lender
in an effort to negotiate debt service relief on the 12-5/8% first mortgage
note secured by the Garret Mountain Office Center in West Paterson, New
Jersey. Effective November 1, 1993, the venture began making cash flow
debt service payments. The venture remitted cash flow from the property to
the first mortgage lender through March 1994, at which time an agreement
was reached whereby reduced monthly payments were submitted while
negotiations continued. The venture was unable to finalize a modification
of the debt with the first mortgage lender and subsequently reached an
agreement with another mortgage lender to retire the first and second
mortgage notes with a new first mortgage note.
In October 1989, the venture obtained a short-term (one year) second
mortgage in the amount of $1,000,000 secured by the Garret Mountain Office
Center, located in West Paterson, New Jersey, and the venture. The second
mortgage was subsequently extended to September 1, 1991, August 1, 1992,
August 1, 1993 and July 31, 1996 and was assumed by the venture partner at
sale of the Partnership's interest.
HOLLY POND OFFICE CENTER
On January 19, 1996, the mortgage lender realized upon its security
and took title to the property.
The Holly Pond venture ceased making debt service payments, effective
August 1, 1990, on the long-term, non-recourse mortgage note secured by
Holly Pond Office Center located in Stamford, Connecticut and sought a
modification of the note terms. In November 1991, the lender commenced
proceedings to obtain title to the property. In conjunction with the
lender's actions, it came to the venture's attention that there were traces
of petroleum-based contaminant evident in a sump well located in the
building's garage. The venture's initial environmental investigation
indicated that, although some contamination was located on the property,
the cause of the problem was most likely a result of certain activities of
the owner of a neighboring land parcel. The Partnership notified the owner
of the neighboring land parcel and had subsequently initiated litigation
regarding the responsibility for the clean-up of the contaminant
("Environmental Action"). As a result, the lender suspended its efforts to
obtain title to the property pending the results of the venture's
investigation and litigation. Although the Partnership believed the owner
of the neighboring parcel would ultimately bear financial responsibility
for the clean-up, the Partnership had accrued $21,600 for potential future
costs related to the clean-up. Such accrual is reflected in accounts
payable in the accompanying 1995 consolidated balance sheet. Because the
venture had been unable to secure debt service relief, the Partnership had
decided, based upon current and anticipated future market conditions and
other considerations relating to the property and the Partnership's
portfolio, not to commit any additional amounts to the property. As part
of the property turnover, the Partnership assigned to the lender or its
assignee the right to proceed with the Environmental Action and obtained
from the lender release of liability associated with the above described
environmental condition. The loan has been classified at December 31, 1995
as a current liability in the accompanying consolidated financial
statements.
The Partnership recognized a gain of $3,404,444 for Federal income tax
purposes without any corresponding distributable proceeds in 1996 due to
the transfer of title as discussed above. The accompanying consolidated
financial statements include $8,107,825 (net of venture partners' share of
$8,116) of extraordinary gain on extinguishment of debt upon the lender
taking title to the property for the twelve months ended December 31, 1996.
In addition, the Partnership recorded a provision for value impairment of
$3,248,506 (net of venture partners' share of $751,494) as of January 1,
1996 to reflect the then estimated fair value of the property based upon
the use of an appropriate capitalization rate on the property's net
operating income. As the Partnership had previously committed to a plan to
sell or dispose of the property, such provision has been reflected as the
cumulative effect of an accounting change (related to the adoption of SFAS
121, as described above) in the accompanying consolidated financial
statements. In addition, as the property was classified as held for sale
or disposition January 1, 1996, the property was no longer subject to
continued depreciation.
SUNRISE MALL
The Partnership was conducting a feasibility study to determine a
financially competitive expansion and renovation of Sunrise Mall to
accommodate certain retail tenants who had indicated an interest in
possibly opening stores at the mall. Given the complexity of an expansion
and renovation, the lengthy time span likely needed to complete the project
and the Partnership's desire to wind up its affairs, the Partnership
determined it would be better for a buyer with a longer-term ownership
perspective to undertake the expansion and renovation.
As the Partnership had committed to a plan to sell or dispose of the
property, the property was classified as held for sale or disposition as of
July 1, 1996 and therefore was not subject to continued depreciation.
On October 23, 1996, the Partnership, sold the land and related
improvements known as the Sunrise Mall. The purchaser was not affiliated
with the Partnership or its General Partners and the sale price was
determined by arm's-length negotiations. The sale price of the land and
improvements was approximately $12,120,000 (after deducting selling costs),
which was paid in cash at closing. A significant portion of the sales
proceeds was utilized to retire the mortgage debt with an outstanding
balance of approximately $11,557,000. The Partnership agreed to pay the
lender a portion of the net sales proceeds (after certain adjustments) as a
mortgage prepayment fee. This amount was $146,982 and is reflected as an
extraordinary item in 1996 in the accompanying consolidated financial
statements. As a result of the sale, the Partnership realized a gain of
$5,364,077 for financial reporting purposes and $5,707,893 for Federal
income tax purposes in 1996.
LONG-TERM DEBT - GENERAL
Long-term debt of the Partnership and its consolidated ventures
consists of the following at December 31, 1996 and 1995:
1996 1995
----------- -----------
11-1/2% mortgage note; secured by the
Holly Pond office building in Stamford,
Connecticut; payable in monthly install-
ments of $53,009, (including interest)
subject to call on June 1, 1997 when
the remaining balance was scheduled to
be payable; satisfied in full in
January 1996 by the lender realizing
upon its security interest in the
property . . . . . . . . . . . . . . . $ -- 5,196,401
9-3/8% mortgage note; secured by the
Sunrise Mall shopping center in
Brownsville, Texas; payable in monthly
installments of $113,415 (including
interest) until January 1, 2001 when the
remaining balance of $10,149,489 is payable,
retired in October 1996 at sale. . . . -- 11,778,943
---------- ----------
Total debt. . . . . . . . . . . . . -- 16,975,344
Less current portion
of long-term debt . . . . . . . . -- 5,464,428
---------- ----------
Total long-term debt. . . . . . . . $ -- 11,510,916
========== ==========
PARTNERSHIP AGREEMENT
Pursuant to the terms of the Partnership Agreement, net profits and
losses of the Partnership from operations were allocated 96% to the Limited
Partners and 4% to the General Partners. Profits from the sale,
refinancing or other disposition of investment properties were to be
allocated to the General Partners to the greater of any cash distributions
of the proceeds of any such sale, refinancing or other disposition (as
described below) or 1% of the profits from the sale, refinancing or other
disposition. Losses from the sale, refinancing or other disposition of
investment properties were to be allocated 1% to the General Partners. The
remaining sale, refinancing or other disposition profits and losses were to
be allocated to the Limited Partners. During 1996, a reallocation of gains
was made among the partners for financial reporting purposes. Such
reallocation did not have an effect on total assets, total partners'
capital or net earnings.
The General Partners were not required to make any capital
contributions except under certain limited circumstances upon dissolution
and termination of the Partnership. Accordingly, immediately prior to
termination and dissolution, the General Partners contributed $48,935 to
the Partnership which was included in the final liquidating distribution to
the Limited Partners. Distributions of "net cash receipts" of the
Partnership were to be allocated 90% to the Limited Partners and 10% to the
General Partners (of which 6.25% constitutes a management fee to the
Corporate General Partner for services in managing the Partnership).
The Partnership Agreement provided that the General Partners were to
receive as a distribution from the sale of a real property by the
Partnership 3% of the selling price, and that the remaining proceeds (net
after expenses and retained working capital) be distributed 85% to the
Limited Partners and 15% to the General Partners. However, the Limited
Partners were to receive 100% of such net sale proceeds until the Limited
Partners (i) received cash distributions of sale or refinancing proceeds in
an amount equal to the Limited Partners' aggregate initial capital
investment in the Partnership and (ii) received cumulative cash
distributions from the Partnership's operations which, when combined with
sale or refinancing proceeds previously distributed, equal a 6% annual
return on the Limited Partners' average capital investment for each year
(their initial capital investment as reduced by sale or refinancing
proceeds previously distributed) commencing with the third calendar
quarter of 1981. The Limited Partners did not receive cash distributions
to satisfy these requirements.
In addition, the Partnership Agreement provided that notwithstanding
any allocation contained in the Agreement, if, at any time profits are
realized by the Partnership, any current or anticipated event would cause
the deficit balance in absolute amount in the Capital Account of the
General Partners to be greater than their share of the Partnership's
indebtedness (as defined) after such event, then the allocation of Profits
to the General Partners shall be increased to the extent necessary to cause
the deficit balance in the Capital Account of the General Partners to be no
less than their respective shares of the Partnership's indebtedness after
such event. A portion of the 1996, 1995 and 1994 Partnership gains for
Federal income tax purposes were reallocated to the General Partners in
accordance with this provision. In general, the effect of this provision
was to allow the deferral of recognition of taxable gain to the Limited
Partners.
MANAGEMENT AGREEMENTS
Physical management of the properties was performed by the joint
venture partners or their affiliates or by an affiliate of the General
Partners. Cash flow deficits were normally the responsibility of each of
the ventures and compensation to the managers was generally calculated at a
percentage of gross receipts, a portion of which was subordinated to the
Partnership's receipt of its preferential returns.
An affiliate of the General Partners of the Partnership managed the
Sunrise Mall in Brownsville, Texas. Management fees were calculated at a
percentage of the certain gross revenues from the property.
LEASES - AS PROPERTY LESSOR
The Partnership had determined that all leases relating to Sunrise
Mall were properly classified as operating leases; therefore, rental income
was reported when earned, and the cost of each of the properties, excluding
the cost of land, was depreciated over their estimated useful lives.
TRANSACTIONS WITH AFFILIATES
The Partnership, pursuant to the Partnership Agreement, was permitted
to engage in various transactions involving the Corporate General Partner
and its affiliates including the reimbursement for salaries and salary-
related expenses of its employees, certain of its officers, and other
direct expenses relating to the administration of the Partnership and the
operation of the Partnership's investments. Fees, commissions and other
expenses required to be paid by the Partnership to the General Partners and
their affiliates as of December 31, 1996, 1995 and 1994 are as follows:
UNPAID AT
DECEMBER 31,
1996 1995 1994 1996
-------- -------- -------- ------------
Property management
and leasing fees . . . . $130,425 183,387 178,247 --
Management fees to
corporate general
partner. . . . . . . . . -- 52,081 41,669 --
Insurance commissions . . 6,018 13,310 (3,924) --
Reimbursement (at cost)
for accounting services. 11,568 76,361 81,796 --
Reimbursement (at cost)
for portfolio manage-
ment services. . . . . . 24,874 30,497 5,537 --
Reimbursement (at cost)
for legal services . . . 8,932 2,906 8,768 --
Reimbursement (at cost)
for administrative
charges and other
out-of-pocket expenses . 11,467 71,941 4,397 --
-------- -------- -------- -----
$193,284 430,483 316,490 --
======== ======== ======== =====
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
There were no changes of or disagreements with accountants during
fiscal year 1996 and 1995.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP
The Corporate General Partner of the Partnership was JMB Realty
Corporation ("JMB"), a Delaware corporation, substantially all of the
outstanding stock of which is owned, directly or indirectly, by certain of
its officers, directors, members of their families and their affiliates.
JMB had responsibility for all aspects of the Partnership's operations,
subject to the requirement that sales of real property must be approved by
the Associate General Partner of the Partnership, ABPP Associates, L.P.
ABPP Associates, L.P., an Illinois limited partnership with JMB as its sole
general partner, was directed by a majority in interest of its limited
partners (who are generally officers, directors and affiliates of JMB or
its affiliates) as to whether to provide its approval of any sale of real
property (or any interest therein) of the Partnership. The Partnership was
subject to certain conflicts of interest arising out of its relationships
with the General Partners and their affiliates as well as the fact that the
General Partners and their affiliates are engaged in a range of real estate
activities. Certain services have been provided to the Partnership or its
investment properties by affiliates of the General Partners, including
property management services and insurance brokerage services. In general,
such services were provided on terms no less favorable to the Partnership
than could be obtained from independent third parties and were otherwise
subject to conditions and restrictions contained in the Partnership
Agreement. The Partnership Agreement permitted the General Partners and
their affiliates to provide services to, and otherwise deal and do business
with, persons who may be engaged in transactions with the Partnership, and
permitted the Partnership to borrow from, purchase goods and services from,
and otherwise to do business with, persons doing business with the General
Partners or their affiliates. The General Partners and their affiliates
may have been in competition with the Partnership under certain
circumstances, including, in certain geographical markets, for tenants for
properties and/or for the sale of properties. Because the timing and
amount of cash distributions and profits and losses of the Partnership may
have been affected by various determinations by the General Partners under
the Partnership Agreement, including whether and when to sell or refinance
a property, the establishment and maintenance of reasonable reserves, the
timing of expenditures and the allocation of certain tax items under the
Partnership Agreement, the General Partners may have had a conflict of
interest with respect to such determinations.
The names, positions held and length of service therein of each
director and the executive and certain other officers of the Corporate
General Partner of the Partnership are as follows:
SERVED IN
NAME OFFICE OFFICE SINCE
- ---- ------ ------------
Judd D. Malkin Chairman 5/03/71
Director 5/03/71
Chief Financial Officer 2/22/96
Neil G. Bluhm President 5/03/71
Director 5/03/71
Burton E. Glazov Director 7/01/71
Stuart C. Nathan Executive Vice President 5/08/79
Director 3/14/73
A. Lee Sacks Director 5/09/88
John G. Schreiber Director 3/14/73
H. Rigel Barber Chief Executive Officer 8/01/93
Executive Vice President 1/02/87
Glenn E. Emig Executive Vice President 1/01/93
Chief Operating Officer 1/01/95
Gary Nickele Executive Vice President 1/01/92
General Counsel 2/27/84
Gailen J. Hull Senior Vice President 6/01/88
Howard Kogen Senior Vice President 1/02/86
Treasurer 1/01/91
There is no family relationship among any of the foregoing directors
or officers. The foregoing directors have been elected to serve a one-year
term until the annual meeting of the Corporate General Partner to be held
on June 7, 1997. All of the foregoing officers have been elected to serve
one-year terms until the first meeting of the Board of Directors held after
the annual meeting of the Corporate General Partner to be held on June 7,
1997. There are no arrangements or understandings between or among any of
said directors or officers and any other person pursuant to which any
director or officer was elected as such.
JMB is the corporate general partner of Carlyle Real Estate Limited
Partnership-VII ("Carlyle-VII"), Carlyle Real Estate Limited Partnership-IX
("Carlyle -IX"), Carlyle Real Estate Limited Partnership-XI ("Carlyle-XI"),
Carlyle Real Estate Limited Partnership-XII ("Carlyle-XII"), Carlyle Real
Estate Limited Partnership-XIII ("Carlyle-XIII"), Carlyle Real Estate
Limited Partnership-XIV ("Carlyle-XIV"), Carlyle Real Estate Limited
Partnership-XV ("Carlyle-XV"), Carlyle Real Estate Limited Partnership-XVI
("Carlyle-XVI"), Carlyle Real Estate Limited Partnership-XVII ("Carlyle-
XVII"), JMB Mortgage Partners, Ltd.-III ("Mortgage Partners-III"), JMB
Mortgage Partners, Ltd.-IV ("Mortgage Partners-IV"), Carlyle Income Plus,
Ltd. ("Carlyle Income Plus"), Carlyle Income Plus, Ltd.-II ("Carlyle Income
Plus-II"), and the managing general partner of JMB Income Properties, Ltd.-
IV ("JMB Income-IV"), JMB Income Properties, Ltd.-V ("JMB Income-V"), JMB
Income Properties, Ltd.-VI ("JMB Income-VI"), JMB Income Properties, Ltd.-
VII ("JMB Income-VII"), JMB Income Properties, Ltd. -X ("JMB Income-X"),
JMB Income Properties, Ltd.-XI ("JMB Income-XI"), JMB Income Properties,
Ltd.-XII ("JMB Income-XII") and JMB Income Properties, Ltd.-XIII ("JMB
Income-XIII"). JMB is also the sole general partner of the associate
general partner of most of the foregoing partnerships. Most of the
foregoing directors and officers are also officers and/or directors of
various affiliated companies of JMB including Income Growth Managers, Inc.
(the corporate general partner of IDS/JMB Balanced Income Growth, Ltd.
("IDS/BIG")), Arvida/JMB Managers, Inc. (the general partner of Arvida/JMB
Partners, L.P. ("Arvida")) and Arvida/JMB Managers-II, Inc. (the general
partner of Arvida/JMB Partners, L.P.-II ("Arvida-II")). Most of such
directors and officers are also partners of certain partnerships which are
associate general partners in the following real estate limited
partnerships: Carlyle-VII, Carlyle-IX, Carlyle-XI, Carlyle-XII, Carlyle-
XIII, Carlyle-XIV, Carlyle-XV, Carlyle-XVI, Carlyle-XVII, JMB Income-VI,
JMB Income-VII, JMB Income-X, JMB Income-XI, JMB Income-XII, JMB Income-
XIII, Mortgage Partners-III, Mortgage Partners-IV, Carlyle Income Plus,
Carlyle Income Plus-II and IDS/BIG.
The business experience during the past five years of each such
director and officer of the Corporate General Partner of the Partnership in
addition to that described above is as follows:
Judd D. Malkin (age 59) is an individual general partner of JMB
Income-IV and JMB Income-V. Mr. Malkin has been associated with JMB since
October 1969. Mr. Malkin is a director of Urban Shopping Centers, Inc.
("USC, Inc."), an affiliate of JMB that is a real estate investment trust
in the business of owning, managing and developing shopping centers. He is
a Certified Public Accountant.
Neil G. Bluhm (age 59) is an individual general partner of JMB Income-
IV and JMB Income-V. Mr. Bluhm has been associated with JMB since August
1970. Mr. Bluhm is a director of USC, Inc. He is a member of the Bar of
the State of Illinois and a Certified Public Accountant.
Burton E. Glazov (age 58) has been associated with JMB since June 1971
and served as an Executive Vice President of JMB until December 1990. He
is a member of the Bar of the State of Illinois and a Certified Public
Accountant.
Stuart C. Nathan (age 55) has been associated with JMB since July
1972. Mr. Nathan is also a director of Sportmart Inc., a retailer of
sporting goods. He is a member of the Bar of the State of Illinois.
A. Lee Sacks (age 63) (President and Director of JMB Insurance Agency,
Inc.) has been associated with JMB since December 1972.
John G. Schreiber (age 50) has been associated with JMB since
December, 1970 and served as an Executive Vice President of JMB until
December 1990. Mr. Schreiber is President of Schreiber Investments, Inc.,
a company which is engaged in the real estate investing business. He is
also a senior advisor and partner of Blackstone Real Estate Partners, an
affiliate of the Blackstone Group, L.P. Since 1994, Mr. Schreiber has also
served as a Trustee of Amli Residential Property Trust, a publicly-traded
real estate investment trust that invests in multi-family properties. Mr.
Schreiber is also a director of USC, Inc. and also a director of a number
of investment companies advised or managed by T. Rowe Price Associates and
affiliates. He holds a Masters degree in Business Administration from
Harvard University Graduate School of Business.
H. Rigel Barber (age 47) has been associated with JMB since March,
1982. He holds a J.D. degree from the Northwestern Law School and is a
member of the Bar of the State of Illinois.
Glenn E. Emig (age 49) has been associated with JMB since December,
1979. Prior to becoming Executive Vice President of JMB in 1993, Mr. Emig
was Executive Vice President and Treasurer of JMB Institutional Realty
Corporation. He holds a Masters degree in Business Administration from the
Harvard University Graduate School of Business and is a Certified Public
Accountant.
Gary Nickele (age 44) has been associated with JMB since February,
1984. He holds a J.D. degree from the University of Michigan Law School
and is a member of the Bar of the State of Illinois.
Gailen J. Hull (age 48) has been associated with JMB since March,
1982. He holds a Masters degree in Business Administration from Northern
Illinois University and is a Certified Public Accountant.
Howard Kogen (age 61) has been associated with JMB since March, 1973.
He is a Certified Public Accountant.
ITEM 11. EXECUTIVE COMPENSATION
The Partnership has no officers or directors. The Partnership was
required to pay a management fee to the Corporate General Partner and the
General Partners were entitled to receive a share of cash distributions,
when and as cash distributions were made to the Limited Partners, and a
share of profits or losses. In 1996, 1995 and 1994, the General Partners
received distributions of $0, $31,248 and $25,001, respectively.
Management fees earned by the Corporate General Partner in 1996, 1995 and
1994 were $0, $52,081 and $41,669, respectively. In addition, the General
Partners received $930,513 of Partnership income for Federal income tax
purposes in 1996.
The Partnership was permitted to engage in various transactions
involving affiliates of the Corporate General Partner of the Partnership.
The relationship of the Corporate General Partner to its affiliates is set
forth in Item 10 above.
An affiliate of the Corporate General Partner provided property
management services to the Partnership in 1996 for the Sunrise Mall. In
1996, such affiliate earned property management fees amounting to $130,425
for such services, all of which were paid as of December 31, 1996. As set
forth in the Prospectus of the Partnership, the Corporate General Partner
must negotiate such agreements on terms no less favorable to the
Partnership than those customarily charged for similar services in the
relevant geographical area (but in no event at rates greater than 5% of the
gross income from a property), and such agreements must be terminable by
either party thereto, without penalty, upon 60 days' notice.
JMB Insurance Agency, Inc., an affiliate of the Corporate General
Partner of the Partnership, is entitled to receive insurance brokerage
commissions in connection with providing insurance coverage for certain of
the real property investments of the Partnership. Such commissions are at
rates set by insurance companies for the classes of coverage involved.
Fees of $6,018 were received by the Corporate General Partner in 1996.
The General Partners were reimbursed for their direct expenses
relating to the administration of the Partnership and the operation of the
Partnership's real property investments. In 1996, the Corporate General
Partner of the Partnership was due reimbursement for such out-of-pocket
expenses in the amount of $11,467, all of which was paid at December 31,
1996.
Additionally, the General Partners were reimbursed for salaries,
salary-related expenses and direct expenses of officers and employees of
the Corporate General Partner and its affiliates while directly engaged in
the administration of the Partnership and in the operation of the
Partnership's real property investments. In 1996, such costs were $45,374,
all of which was paid as of December 31, 1996.
The General Partners contributed $48,935 in 1996 to the Partnership
which was included in the final liquidating distribution to the Limited
Partners.
<TABLE>
<CAPTION>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) The following or group was known by the Partnership to have owned beneficially more than 5% of the
outstanding Interests of the Partnership (immediately prior to final liquidating distribution).
NAME AND
ADDRESS OF AMOUNT AND NATURE
BENEFICIAL OF BENEFICIAL PERCENT
TITLE OF CLASS OWNER OWNERSHIP OF CLASS
- -------------- ---------- ----------------- --------
<S> <C> <C> <C>
Limited Partner-
ship Interest Liquidity Fund Investment 5,898.50 Interests 5.90%
Corporation indirectly (as in-
1900 Powell Street vestment manager or,
Suite 730 through affiliated
Emeryville, California entities, general
partner partner of 12 general
94608 investment funds)
(b) The Corporate General Partner, its officers and directors and the Associate General Partner owned as a
group the following Interests of the Partnership (immediately prior to final liquidating distribution):
NAME OF AMOUNT AND NATURE
BENEFICIAL OF BENEFICIAL PERCENT
TITLE OF CLASS OWNER OWNERSHIP OF CLASS
- -------------- ----------- ----------------- --------
Limited Partner-
ship Interests JMB Realty Corporation 95 Interests directly Less than 1%
Limited Partner-
ship Interests Corporate General 103 Interests directly (1) Less than 1%
Partner, its officers
and directors and the
Associate General
Partner as a group
<FN>
(c) There existed no arrangement, known to the Partnership, the operation of which would have resulted in a
change in control of the Partnership.
(1) Included 8 Interests owned by officers or their relatives for which each officer had investment and
voting power as to such interests so owned.
Reference is made to Item 10 for information concerning ownership of the Corporate General Partner.
No officer or director of the Corporate General Partner of the Partnership possessed a right to acquire
beneficial ownership of Interests of the Partnership.
</TABLE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There were no significant transactions or business relationships with
the Corporate General Partner, affiliates or their management other than
those described in Items 10 and 11 above.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
(1) Financial Statements (See Index to Financial Statements
filed with this annual report).
(2) Exhibits.
3-A. The Prospectus of the Partnership dated May 29,
1980, as supplemented on August 4, 1980, November 12, 1980, November 24,
1980, January 30, 1981 and February 10, 1981, as filed with the Commission
pursuant to Rules 424(b) and 424(c), is incorporated herein by reference to
Exhibit 3-A to the Partnership's Report for December 31, 1992 on Form 10-K
(File No. 0-9726) dated March 19, 1993. Copies of pages 6-13, 101-103, A-5
to A-9 and A-11 to A-17 are hereby incorporated herein by reference to
Exhibit 3-A to the Partnership's Report for December 31, 1992 on Form 10-K
(File No. 0-9726) dated March 19, 1993.
3-B. Amended and Restated Agreement of Limited
Partnership set forth as Exhibit A to the Prospectus incorporated herein by
reference to the Partnership's Registration Statement on Form S-11 (File
No. 0-9726) dated November 24, 1980.
3-C. Acknowledgement of rights and duties of the
General Partners of the Partnership between ABPP Associates, L.P. (a
successor Associated General Partner of the Partnership) and JMB Realty
Corporation as of December 31, 1995 is incorporated herein by reference to
the Partnership's Report for September 30, 1996 on Form 10-Q/A (File No. 0-
9726) dated November 25, 1996.
4. Long-term mortgage note documents relating to the
note secured by the Sunrise Mall located in Brownsville, Texas are
incorporated herein by reference to the Partnership's Registration
Statement on Post-Effective Amendment No. 2 dated November 24, 1980 to Form
S-11 (File No. 0-9726).
10-A. Acquisition documents relating to the purchase by
the Partnership of an interest in the Sunrise Mall located in Brownsville,
Texas are incorporated herein by reference to the Partnership's
Registration Statement on Post-Effective Amendment No. 2 dated November 24,
1980 to Form S-11 (File No. 0-9726).
10-B. Agreement for Purchase and Sale of Real Estate and
Related Property, dated October 13, 1994, by and between DMC-Silvermine
Apartments limited ("Seller") and TGM Realty Corp. #3 ("Purchaser") is
incorporated herein by reference to the Partnership's Report for November
29, 1994 on Form 8-K (File No. 0-9726) dated March 23, 1995.
10-C. Letter regarding Sale/Option and Partnership
Amendment, dated May 15, 1994, between Carlyle Seattle Associates and 999
Third Avenue, Ltd. relating to the first Interstate Center in Seattle,
Washington is hereby incorporated herein by reference to the Partnership's
Report for June 30, 1994 on Form 10-Q (File No. 0-9726) dated August 12,
1994.
10-D. Agreement of Limited Partnership of Wright-Carlyle
Seattle Limited Partnership, dated November 30, 1994, between Wright
Runstad Properties L.P., and Carlyle Seattle Associates is incorporated
herein by reference to the Partnership's Report for December 1, 1994 on
Form 10-Q (File No. 0-9726) dated March 23, 1995.
10-E. Documents relating to the sale of the
Partnership's interest in the Garret Mountain venture are incorporated
herein by reference to the Partnership's report for March 31, 1995 on Form
10-Q (File No. 0-9726) dated May 11, 1995.
10-F. Agreement by and among The Prudential Insurance
Company of America and Holly Pond Associates Limited Partnership relating
to the disposition of Holly Pond Office Center dated January 16, 1996 is
incorporated herein by reference to the Partnership's Report for December
31, 1995 on Form 10-K (File No. 0-9726) dated March 25, 1996.
10-G. Documents relating to the sale of Sunrise Mall in
Brownsville, Texas are incorporated herein by reference to the
Partnership's Report for October 23, 1996 on Form 8-K (File No. 0-9726)
dated November 7, 1996.
10-H. Documents relating to the sale of the Partner-
ship's interest in the Greenway Tower Joint
Venture dated December 26, 1996 are filed herewith.
24. Powers of Attorney
27. Financial Data Schedule
---------------
(b) The following report on Form 8-K was filed since the beginning
of the last quarter of the period covered by this report.
(i) The Partnership's Report on Form 8-K (File No. 0-9726) for
October 23, 1996 (describing the sale transaction of Sunrise Mall in
Brownsville, Texas) was filed. This report was dated November 7, 1996.
No annual report for the fiscal year 1996 or proxy material has been
sent to the Partners of the Partnership. An annual report will be sent to
the Partners subsequent to this filing.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Partnership has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
By: JMB Realty Corporation
Corporate General Partner
GAILEN J. HULL
By: Gailen J. Hull
Senior Vice President
Date: March 21, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
By: JMB Realty Corporation
Corporate General Partner
JUDD D. MALKIN*
By: Judd D. Malkin, Chairman and
Chief Financial Officer
Date: March 21, 1997
NEIL G. BLUHM*
By: Neil G. Bluhm, President and Director
Date: March 21, 1997
H. RIGEL BARBER*
By: H. Rigel Barber, Chief Executive Officer
Date: March 21, 1997
GLENN E. EMIG*
By: Glenn E. Emig, Chief Operating Officer
Date: March 21, 1997
GAILEN J. HULL
By: Gailen J. Hull, Senior Vice President
Principal Accounting Officer
Date: March 21, 1997
A. LEE SACKS*
By: A. Lee Sacks, Director
Date: March 21, 1997
STUART C. NATHAN*
By: Stuart C. Nathan, Executive Vice President
and Director
Date: March 21, 1997
*By: GAILEN J. HULL, Pursuant to Power of Attorney
GAILEN J. HULL
By: Gailen J. Hull, Attorney-in-Fact
Date: March 21, 1997
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
EXHIBIT INDEX
DOCUMENT
INCORPORATED
BY REFERENCE PAGE
------------ ----
3-A. Pages 6-13, 101-103, A-5
to A-9 and A-11 to A-17
of the Prospectus of the
Partnership dated May 29, 1980 Yes
3-B. Amended and Restated Agreement
of Limited Partnership Yes
3-C. Acknowledgement of rights and
duties of the General Partners
of the Partnership Yes
4. Long-term mortgage note documents
related to the Sunrise Mall Yes
10-A. Acquisition documents related to
the Sunrise Mall Yes
10-B. Agreement related to Silvermine Sale Yes
10-C. Letter regarding sale of interest in
First Interstate Yes
10-D. Agreement of Limited Partnership of
Wright Carlyle Seattle Yes
10-E. Documents relating to sale of Garret
Mountain Office Center Yes
10-F. Agreement relating to disposition of
Holly Pond Yes
10-G. Documents relating to sale of
Sunrise Mall Yes
10-H. Documents relating to sale of
interest in Greenway Tower Joint
Venture No
24. Powers of Attorney No
27. Financial Data Schedule No
ATTACHMENT - 10-H
- -----------------
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT is made and entered into as of the 23rd day
of December, 1996, by and between GREENWAY ASSOCIATES, LTD., a Texas
limited partnership ("SELLER"), and FOLSOM MANAGEMENT, INC., a Texas
corporation ("BUYER").
R E C I T A L S
---------------
A. Seller is a partner in Greenway Tower Joint Venture, a Texas
general partnership (the "OPERATING PARTNERSHIP"), which was created by
that certain partnership agreement captioned "JOINT VENTURE AGREEMENT OF
GREENWAY TOWER JOINT VENTURE", dated as of September 25, 1987 (the
"ORIGINAL OPERATING PARTNERSHIP AGREEMENT"), by and among Seller and Folsom
Investments, Inc., a Texas corporation ("FOLSOM").
B. Folsom assigned its interest to Independence Development, Inc.,
a Texas corporation ("Independence") pursuant to an assignment dated
effective December 31, 1991 and the Original Operating Partnership
Agreement was amended by instrument captioned "AMENDMENT TO THE JOINT
VENTURE AGREEMENT OF GREENWAY TOWER JOINT VENTURE", dated as of October
29,
1992, between Independence and Seller (the Original Operating Partnership
Agreement as so amended being herein called the "OPERATING PARTNERSHIP
AGREEMENT").
C. Buyer desires to purchase, and Seller desires to sell, Seller's
partnership interest (the "SUBJECT PARTNERSHIP INTEREST") in the Operating
Partnership on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual undertakings of the
parties hereto, it is hereby agreed as follows:
1. PURCHASE AND SALE. Seller shall sell to Buyer, and Buyer shall
purchase from Seller, the Subject Partnership Interest, on the terms and
conditions hereinafter set forth.
2. PURCHASE PRICE. The purchase price for the Subject Partnership
Interest shall be the sum of $850,000 (the "PURCHASE PRICE").
3. PAYMENT OF PURCHASE PRICE. The Purchase Price shall be paid to
Seller by wire transfer of immediately available federal funds (through the
escrow described in Section 5) on the "Closing Date", as hereinafter
defined.
4. CONDITIONS PRECEDENT.
4.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER. The obligations
of Buyer to consummate the transactions contemplated by this Agreement are
subject to the satisfaction on or prior to the Closing Date of each of the
following conditions (compliance with which or the occurrence of which may
be waived in whole or in part by Buyer):
4.1.1ACCURACY OF REPRESENTATION AND WARRANTIES. The
representations and warranties of Seller contained herein shall be true and
correct in all material respects on and as of the Closing Date with the
same force and effect as though made on and as of the Closing Date.
4.1.2PERFORMANCE OF AGREEMENTS. Seller shall have performed
in all material respects all obligations and agreements and complied in all
material respects with all covenants and conditions contained in this
Agreement to be performed or complied with by it on or prior to the Closing
Date.
4.1.3COMPLIANCE CERTIFICATE OF SELLER. Seller shall have
furnished Buyer with a certificate, dated the Closing Date, to the effect
that the representations and warranties of Seller contained herein are true
and correct in all material respects on and as of the Closing Date with the
same force and effect as though made on and as of the Closing Date.
4.1.4CONSENTS AND APPROVALS. All consents and approvals of
any third parties required in connection with the execution and delivery of
this Agreement and the consummation of the purchase and sale of the Subject
Partnership Interest shall have been obtained and delivered to Buyer.
4.1.5OTHER DELIVERIES. Seller shall have delivered the
documents and instruments required to be delivered by it under Section
5.2.1 of this Agreement.
4.2 CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER. The obligations
of Seller to consummate the transactions contemplated by this Agreement are
subject to the satisfaction on or prior to the Closing Date of each of the
following conditions (compliance with which or the occurrence of which may
be waived in whole or in part by Seller):
4.2.1ACCURACY OF REPRESENTATION AND WARRANTIES. The
representations and warranties of Buyer contained herein shall be true and
correct in all material respects on and as of the Closing Date with the
same force and effect as though made on and as of the Closing Date.
4.2.2PERFORMANCE OF AGREEMENTS. Buyer shall have performed in
all material respects all obligations and agreements and complied in all
material respects, with all covenants and conditions contained in this
Agreement to be performed or complied with by it on or prior to the Closing
Date.
4.2.3COMPLIANCE CERTIFICATE OF BUYER. Buyer shall have
furnished Seller with a certificate, dated the Closing Date, to the effect
that the representations and warranties of Buyer contained herein are true
and correct in all material respects on and as of the Closing Date with the
same force and effect as though made on and as of the Closing Date.
4.2.4CONSENTS AND APPROVALS. All consents and approvals of
any third parties required in connection with the execution and delivery of
this Agreement and the consummation of the purchase and sale of the Subject
Partnership Interest shall have been obtained and delivered by Seller.
4.2.5RELEASES. Seller shall have received releases,
reasonably satisfactory in form and substance reasonably satisfactory to
Seller and its counsel, from all liabilities and obligations under the
agreements and obligations listed in Exhibit "A".
4.2.6OTHER DELIVERIES. Buyer shall have delivered the
documents and instruments required to be delivered by it under Section
5.2.2 of this Agreement.
5. CLOSING PROCEDURE. Subject to the terms and conditions set
forth in this Agreement, the sale and purchase herein provided shall be
consummated (the "CLOSING") in accordance with such procedures as the
parties may reasonably agree. As used herein, "CLOSING DATE" means
December 23, 1996, or such earlier date as may be agreed upon by Seller and
Buyer.
5.1 ESCROW. On the Closing Date, Buyer shall wire to Southwest
Land Title Company, attn: Dorothy Haight (the "Title Company") the Purchase
Price in immediately available federal funds. Such delivery shall be made
pursuant to escrow instructions ("ESCROW INSTRUCTIONS") to be executed
among Buyer, Seller and Title Company in form reasonably acceptable to such
parties in order to effectuate the intent hereof. The conditions to the
closing of such escrow shall include the Title Company's receipt of the
Purchase Price and a notice from Buyer and Seller authorizing Title Company
to close the transactions as contemplated herein (Buyer and Seller being
obligated to deliver such authorization notice at the Closing as soon as it
is reasonably satisfied that the conditions precedent to its obligations
under Section 4 have been fulfilled and that the other parties are in a
position to deliver the items to be delivered by such other party under
subsection 5.2 below).
5.2 DELIVERY TO THE PARTIES. Upon the satisfaction of the
conditions set forth in the Escrow Instructions, then (x) the Purchase
Price shall be paid to Seller in accordance with Section 3 and (y), the
following items shall be delivered:
5.2.1SELLER DELIVERIES. Seller shall deliver, or cause to be
delivered, to Buyer the following:
(a) A duly executed Assignment and Assumption Agreement
("ASSIGNMENT AND ASSUMPTION AGREEMENT") in the form of Exhibit "B";
(b) Evidence reasonably satisfactory to Buyer
respecting the due organization of Seller and the due authorization and
execution by Seller of this Agreement and the documents required to be
delivered by it hereunder;
(c) A duly executed Release in the form of Exhibit "C";
and
(d) Such additional documents as may be reasonably
required by Buyer or Title Company in order to consummate the transactions
hereunder (provided the same do not materially increase the costs to, or
liability or obligations of, Seller in a manner not otherwise provided for
herein).
5.2.2BUYER'S DELIVERIES. Buyer shall deliver, or cause to be
delivered to Seller the following:
(a) A duly executed and acknowledged Assignment and
Assumption Agreement;
(b) Evidence reasonably satisfactory to Seller
respecting the due organization of Buyer and the due authorization and
execution of this Agreement and the documents required to be delivered by
it hereunder:
(c) A Release, duly executed by the Operating
Partnership and Buyer in the form of Exhibit "D"; and
(d) Such additional documents as may be reasonably
required by Seller or Title Company in order to consummate the transactions
hereunder (provided the same do not materially increase the costs to, or
liability or obligations of, Buyer in a manner not otherwise provided for
herein).
5.3 CLOSING COSTS. Seller and Buyer shall each pay one-half of the
escrow fees of Escrow Holder.
5.4 PRORATIONS. THERE WILL BE NO PRORATIONS.
6. REPRESENTATIONS AND WARRANTIES.
6.1 REPRESENTATIONS AND WARRANTIES OF SELLER.
6.1.1GENERAL DISCLAIMER. Except as specifically set forth in
subsection 6.1.2 below, the sale of the Subject Partnership Interest
hereunder is and will be made on an "as is" basis, without representations
and warranties of any kind or nature, express, implied or otherwise,
including any representation or warranty concerning the Operating
Partnership or its assets. Buyer acknowledges that Independence, an
affiliate of Buyer, is the managing partner of the Operating Partnership
and is familiar with the Operating Partnership and its assets. Except as to
matters specifically set forth in subsection 6.1.2 below, Buyer will
proceed with the closing contemplated hereby solely on the basis of its own
physical, financial and other examinations, reviews and inspections.
6.1.2LIMITED REPRESENTATIONS AND WARRANTIES OF SELLER.
Subject to the provisions of subsection 6.1.1 above, Seller hereby
represents and warrants to Buyer as follows:
(a) ORGANIZATION, ETC. Seller is a limited partnership
duly formed and validly existing under the laws of the State of Texas and
has all requisite partnership power and partnership authority to own and
lease its properties, including the Subject Partnership Interest, and to
carry on its business as presently conducted.
(b) AUTHORIZATION. Seller has all requisite
partnership power and partnership authority to execute and deliver this
Agreement and the other agreements and instruments to be executed and
delivered by it hereunder and to consummate the transactions contemplated
hereby and thereby. The execution, delivery and performance by Seller of
this Agreement and such other agreements and instruments has been duly and
validly authorized by the partners of Seller, and no other partnership
action or authorization on behalf of Seller is required in connection
therewith.
(c) VALIDITY AND ENFORCEABILITY. This Agreement has
been duly authorized, executed and delivered by Seller and constitutes and
the other agreements and instruments to be executed and delivered hereunder
by Seller, when executed and delivered by Seller, will constitute, legal,
valid and binding obligations of Seller enforceable against Seller in
accordance with their respective terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or affecting the enforcement of creditors' rights generally or
by general equitable principles.
(d) NO CONFLICT. Neither the execution and delivery of
this Agreement by Seller nor the execution and delivery by Seller of the
other agreements and instruments to be executed and delivered by it
hereunder, nor the consummation of the transactions contemplated hereunder
or thereunder, will (i) conflict with or result in a breach or violation
of, or constitute a default under, or result in the creation of any lien,
charge or encumbrance upon, any of the properties or assets of Seller
pursuant to the limited partnership agreement of Seller or any indenture,
mortgage, lease, loan agreement or other agreement or instrument to which
Seller is a party or by which it is bound or to which any of its properties
or assets is subject or (ii) violate any law, statute, rule, regulation,
judgment or decree applicable to Seller. Except for the consent of General
Electric Capital Corporation ("GE"), no third party consents are required
by the terms of any indenture, mortgage, lease, loan agreement or other
agreement or instrument to which Seller is a party or by which it is bound
or to which any of its properties or assets is subject for the execution
and delivery of this Agreement or any other agreement or instrument to be
executed and delivered by Seller hereunder or the consummation of the
transactions provided for herein or therein.
(e) NO GOVERNMENTAL CONSENT OR APPROVAL REQUIRED. No
consent, approval or authorization of, or declaration to or filing with,
any governmental or regulatory authority is required for the valid
execution and delivery by Seller of this Agreement or any other agreement
or instrument to be executed and delivered by Seller hereunder or the
consummation of the transactions provided for herein or therein.
(f) SUBJECT PARTNERSHIP INTEREST. Seller has not sold,
encumbered or otherwise transferred the Subject Partnership Interest or any
other interest in the Partnership except for (i) the assignment and
security interest provided for in Section 3.04 of the Operating Partnership
Agreement and (ii) the rights in favor of Buyer created by this Agreement.
(g) RIGHT OF FIRST REFUSAL. Carlyle Real Estate
Limited Partnership-X, the general partner of Seller ("Carlyle"), has given
such notice to Las Colinas/First Dearborn Properties Limited Partnership
("First Dearborn") of the transactions contemplated hereby as required by
Seller's limited partnership agreement, and First Dearborn has not elected
to purchase Carlyle's interest in Seller.
(h) NO OBLIGATIONS. To the actual knowledge (without
imputation or any duty to investigate) of Seller's
representative, Julie Strocchia, Seller has not created any obligation or
liability of the Operating Partnership on behalf of the Operating
Partnership other than those created in accordance with the Operating
Partnership Agreement, or in a writing executed by Seller and Independence
or Folsom, or otherwise disclosed in writing to or known to Independence or
Folsom.
6.2 REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer hereby
represents and warrants to Seller as follows:
6.2.1ORGANIZATION, ETC. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Texas and has all requisite corporate power and corporate
authority to own and lease its properties and to carry on its business as
presently conducted.
6.2.2AUTHORIZATION. Buyer has all requisite corporate power
and corporate authority to execute and deliver this Agreement and the other
agreements and instruments to be executed and delivered by it hereunder and
to consummate the transactions contemplated hereby and thereby. The
execution, delivery and performance by Buyer of this Agreement and such
other agreements and instruments has been duly and validly authorized by
the board of directors of Buyer, and no other action or authorization on
behalf of Buyer is required in connection therewith.
6.2.3VALIDITY AND ENFORCEABILITY. This Agreement has been
duly authorized, executed and delivered by Buyer and constitutes and the
other agreements and instruments to be executed and delivered hereunder by
Buyer, when executed and delivered by Buyer, will constitute, legal, valid
and binding obligations of Buyer enforceable against Buyer in accordance
with their respective terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws relating
to or affecting the enforcement of creditors' rights generally or by
general equitable principles.
6.2.4NO CONFLICT. Neither the execution and delivery of this
Agreement by Buyer nor the execution and delivery by Buyer of the other
agreements and instruments to be executed and delivered by it hereunder,
nor the consummation of the transactions contemplated hereunder or
thereunder, will (i) conflict with or result in a breach or violation of,
or constitute a default under, or result in the creation of any lien,
charge or encumbrance upon, any of the properties or assets of Buyer or the
Operating Partnership pursuant to the Operating Partnership Agreement, the
certificate of incorporation or by-laws of Buyer or any indenture,
mortgage, lease, loan agreement or other agreement or instrument to which
Buyer or the Operating Partnership is a party or by which it is bound or to
which any of its properties or assets is subject or (ii) violate any law,
statute, rule, regulation, judgment or decree applicable to Buyer or the
Operating Partnership. Except for the consent of GE, no third party
consents are required by the terms of any indenture, mortgage, lease, loan
agreement or other agreement or instrument to which Buyer or the Operating
Partnership is a party or by which any of them is bound or to which any of
their respective properties or assets is subject for the execution and
delivery of this Agreement or any other agreement or instrument to be
executed and delivered by Buyer hereunder or the consummation of the
transactions provided for herein or therein.
6.2.5NO GOVERNMENTAL CONSENT OR APPROVAL REQUIRED. No
consent, approval or authorization of, or declaration to or filing with,
any governmental or regulatory authority is required for the valid
execution and delivery by Buyer of this Agreement or any other agreement or
instrument to be executed and delivered by Buyer hereunder or the
consummation of the transactions provided for herein or therein.
6.2.6INVESTMENT INTENT, ETC. Buyer (i) is acquiring the
Subject Partnership Interest for its own account for investment, not as
nominee or agent, and not with a view to or for sale in connection with any
distribution of any part thereof and (ii) has no present intention of
selling, granting participations in, or otherwise distributing the same.
Buyer understands that the Subject Partnership Interest has not been
registered under the Securities Act of 1933, as amended (the "SECURITIES
ACT") by reason of, in the event the Subject Partnership Interest
constitutes a security under the Securities Act, the reliance by Seller on
exemptions from the registration requirements of the Securities Act
pursuant to Section 4(2) thereof or under any "Blue Sky" law of any state
by reason of the reliance by Seller on exemptions thereunder, and that
Seller's reliance is predicated in part on Buyer's representations set
forth herein. By reason of its business and financial experience, Buyer has
the capacity to protect its own interests in connection with the
transactions contemplated hereby and is able to bear the economic risk
thereof. Buyer understands that, in the event the Subject Partnership
Interest constitutes a security under the Securities Act, the Subject
Partnership Interest may not be sold, transferred, or otherwise disposed of
without registration under the Securities Act and applicable state "Blue
Sky" laws or exemptions therefrom, and that, in the event the Subject
Partnership Interest constitutes a security under the Securities Act, in
the absence of an effective registration statement covering the same or
available exemptions from registration under the Securities Act, the
Subject Partnership Interest must be held indefinitely.
6.2.7NO OBLIGATIONS. To the actual knowledge (without
imputation or any duty to investigate) of Buyer's representative, Robert W.
Kennedy, neither Folsom nor Independence has created any obligation or
liability of the Operating Partnership on behalf of the Operating
Partnership other than those created in accordance with the Operating
Partnership Agreement, or in a writing executed by Buyer, Folsom or
Independence and Seller, or otherwise disclosed in writing to or known to
Seller.
7. COVENANTS.
7.1 INTERIM COVENANTS OF BUYER. Until the Closing Date or the
sooner termination of this Agreement:
7.1.1REPRESENTATIONS. Buyer covenants and agrees that it will not
take any action or enter into any transaction which would cause any
representation contained in Section 6.2 of this Agreement to be inaccurate
in any material respect if remade immediately after the occurrence of such
action or transaction.
7.1.2ADDITIONAL ACTIONS. Buyer will use reasonable, diligent
efforts to take, or cause to be taken, all action, and to do, or cause to
be done, all things necessary proper or advisable to consummate the
transactions contemplated by this Agreement including obtaining the consent
of GE and releases of Seller under all agreements and obligations listed in
Exhibit "A", provided Buyer is not obligated to incur any significant cost
in connection therewith.
7.2 INTERIM COVENANTS OF SELLER. Until the Closing Date or the
sooner termination of this Agreement:
7.2.1REPRESENTATIONS. Seller covenants and agrees that it will not
take any action or enter into any transaction which would cause any
representation contained in Section 6.1.2 of this Agreement to be
inaccurate in any material respect if remade immediately after the
occurrence of such action or transaction.
7.2.2NO DISPOSITION OF SUBJECT PARTNERSHIP INTEREST. Seller will
not sell, transfer, encumber or otherwise dispose of the Subject
Partnership Interest.
7.2.3ADDITIONAL ACTIONS. Seller will use reasonable, diligent
efforts to take, or cause to be taken, all action, and to do, or cause to
be done, all things necessary proper or advisable to consummate the
transactions contemplated by this Agreement, provided Seller is not
obligated to incur any significant cost in connection therewith.
8. INDEMNIFICATION.
8.1 INDEMNIFICATION OF SELLER. If the Closing occurs, then Buyer
shall protect, defend, indemnify and hold Seller harmless from and against
(1) any Claim (as hereinafter defined) in any way related to the Operating
Partnership, the Operating Partnership Agreement or the assets of the
Operating Partnership, accruing on or after the Closing Date (including a
breach of contract or tort occurring on or after the Closing Date);
excluding only (a) any Claim to the extent based on an obligation or
liability of the Operating Partnership created by Seller in its capacity as
a partner of the Operating Partnership on behalf of the Operating
Partnership other than an obligation or liability created prior to the
Closing Date (i) in accordance with the Operating Partnership Agreement, or
(ii) in a writing executed by Seller and Independence or Folsom, or (iii)
otherwise disclosed in writing to or known to Independence or Folsom, and
(b) any breach or default of this Agreement by Seller, or (2) any Claim to
the extent based on an obligation or liability created by Folsom or
Independence the non-disclosure of which is a breach of the representation
contained in Section 6.2.7 of this Agreement, or the bad faith or willful
misconduct of Folsom or Independence. "CLAIM" means any obligation,
liability, claim (including any claim for damage to property or injury to
or death of any persons), lien or encumbrance, loss, damage, cost or
expense (including any judgment, award, settlement, reasonable attorneys'
fees and other costs and expenses incurred in connection with the defense
of any actual or threatened action, proceeding or claim [including
appellate proceedings], and any collection costs or enforcement costs).
8.2 INDEMNIFICATION OF BUYER. If the Closing occurs, then Seller
shall protect, defend, indemnify and hold Buyer and the Operating
Partnership harmless from and against any claim by any third party (i.e.,
any party not associated or affiliated with Seller) against Buyer or the
Operating Partnership for any action taken by Seller in its capacity as a
partner of the Operating Partnership where such action has been taken in
bad faith or constituted willful misconduct or to the extent based on an
obligation or liability incurred by Seller the non-disclosure of which is a
breach of the representation contained in Section 6.1.2(h) of this
Agreement.
8.3 GENERAL PROVISIONS. The indemnification obligations under this
Agreement shall be subject to the following provisions:
8.3.1PROCEDURE. The party seeking indemnification ("INDEMNITEE")
shall notify the other party ("INDEMNITOR") of any Claim against Indemnitee
within fifteen (15) days after it has notice of such Claim, but failure to
notify Indemnitor shall in no case prejudice the rights of Indemnitee under
this Agreement unless Indemnitor shall be prejudiced by such failure and
then only to the extent of such prejudice. Indemnitee shall have the right
to employ its own counsel in any such case, but the fees and expenses of
such counsel shall be at the expense of Indemnitee unless: (a) the
employment of such counsel shall have been authorized in writing by
Indemnitor in connection with the defense of such action, (b) Indemnitor
shall not have employed counsel reasonably approved by Indemnitee to direct
the defense of such action or such counsel has not reasonably and
diligently defended such action, or (c) Indemnitee shall have reasonably
concluded that there may be defenses available to it which are different
from or additional to those available to Indemnitor (in which case
Indemnitor shall not have the right to direct the defense of such action or
of Indemnitee), in any of which events such fees and expenses shall be
borne by Indemnitor.
8.3.2BENEFICIARIES. The indemnification obligations under this
Agreement shall also extend to any present or future advisor, trustee,
director, officer, partner, member, employee, beneficiary, shareholder,
participant or agent of or in Indemnitee or any entity now or hereafter
having a direct or indirect ownership interest in Indemnitee.
9. TAX MATTERS.
9.1 PREPARATION OF 1996 TAX RETURN. Seller shall cause to be
prepared the tax return of the Operating Partnership for calendar year 1996
(the "1996 Tax Return"). The cost of preparing the Tax Return shall be
shared equally by Buyer and Seller.
9.2 DECISIONS AS TO THE 1996 TAX RETURN; TAX MATTERS PARTNER.
Seller shall be the Tax Matters Partner with respect to the 1996 Tax
Return. Without limitation on the foregoing, Seller shall retain the right
to make all decisions as to accounting matters and tax elections required
or permitted to be made by in connection with or on the 1996 Tax Return,
provided, however, the 1996 Tax Return shall be subject to the review and
approval of Buyer, which approval shall not be delayed or withheld if the
1996 Tax Return is prepared in accordance with Operating Partnership
Agreement.
9.3 CLOSING OF BOOKS IN CONNECTION WITH SALE OF SUBJECT
PARTNERSHIP
INTEREST. Without limiting the generality of the foregoing, Buyer and
Seller agree that, in connection with the sale of the Subject Partnership
Interest, the books of the Operating Partnership shall be closed in
accordance with Section 706(d) of the Code, and consistent therewith: (a)
items of income, deduction, gain, loss or credit of the Operating
Partnership that are recognized prior to the Closing Date shall be
allocated among those persons or entities who are Partners in the Operating
Partnership as constituted prior to the Closing; and (b) items of income,
deduction, gain, loss or credit of the Operating Partnership that are
recognized on or after the Closing Date shall be allocated among the
persons or entities who are Partners in the Operating Partnership as
constituted after the Closing.
9.4 COOPERATION. Buyer shall cause the Operating Partnership (as
constituted after the Closing) to cooperate fully and to the extent
reasonably requested by Seller in connection with the preparation of the
1996 Tax Return and any audit, litigation or other proceeding with respect
to the Operating Partnership (as constituted prior to the Closing). Such
cooperation shall include the retention and revision of Operating
Partnership records and other information which is reasonably relevant to
any such audit, litigation or other proceeding and making employees
available on a mutually convenient basis to provide additional information
and explanation of any material provided hereunder. The costs and expenses
of Seller in accordance with this Section 9.4 shall be shared equally by
Buyer and Seller.
9.5 TAX RECORDS. Seller shall provide Buyer with the 1996 Tax
Return and shall reasonably cooperated with Buyer (at Buyer's expense) in
obtaining copies of all prior year Operating Partnership tax returns
prepared by accountants engaged by Seller for the Operating Partnership,
and all workpapers and schedules related thereto.
10. MISCELLANEOUS.
10.1 BROKERS. Seller represents and warrants to Buyer, and Buyer
represents and warrants to Seller that no broker or finder has been engaged
by it, respectively, in connection with any of the transactions
contemplated by this Agreement or to its knowledge is in any way connected
with any of such transactions. In the event of a claim for broker's or
finder's fee or commissions in connection herewith, then Seller shall
indemnify and defend Buyer from the same if it shall be based upon any
statement or agreement alleged to have been made by Seller; and Buyer shall
defend and indemnify Seller from the same if it shall be based upon any
statement or agreement alleged to have been made by Buyer. The
indemnification obligations under this Section 10.1 shall survive the
closing of the transactions hereunder or the earlier termination of this
Agreement.
10.2 LIMITATION OF LIABILITY. No constituent member in or agent of
Seller, nor any advisor, trustee, director, officer, employee, beneficiary,
shareholder, partner, member, participant, representative or agent of any
partnership, limited liability company, corporation or trust that is or
becomes a constituent partner in Seller shall have any personal liability,
directly or indirectly, under or in connection with this Agreement or any
agreement made or entered into under or pursuant to the provisions of this
Agreement, or any amendment or amendments to any of the foregoing made at
any time or times, heretofore or hereafter, and Buyer and its successors
and assigns and, without limitation, all other persons and entities, shall
look solely to Seller's assets for the payment of any claim or for any
performance, and Buyer, on behalf of itself and its successors and assigns,
hereby waives any and all such personal liability. Notwithstanding anything
to the contrary contained in this Agreement, neither the negative capital
account of any constituent member in Seller (or in any other constituent
member or partner of Seller), nor any obligation of any constituent partner
in Seller (or in any other constituent member of Seller) to restore a
negative capital account or to contribute capital to Seller (or to any
other constituent member of Seller), shall at any time be deemed to be the
property or an asset of Seller or any such other constituent member (and
neither Buyer nor any of its successors or assigns shall have any right to
collect, enforce or proceed against or with respect to any such negative
capital account of member's or partner's obligation to restore or
contribute). No constituent member in or agent of Buyer, nor any advisor,
trustee, director, officer, employee, beneficiary, shareholder, partner,
member, participant, representative or agent of any partnership, limited
liability company, corporation or trust that is or becomes a constituent
partner in Buyer shall have any personal liability, directly or indirectly,
under or in connection with this Agreement or any agreement made or entered
into under or pursuant to the provisions of this Agreement, or any
amendment or amendments to any of the foregoing made at any time or times,
heretofore or hereafter, and Seller and its successors and assigns and,
without limitation, all other persons and entities, shall look solely to
Buyer's assets for the payment of any claim or for any performance, and
Seller, on behalf of itself and its successors and assigns, hereby waives
any and all such personal liability.
10.3 MODIFICATION. This Agreement may not be modified or amended
except by written agreement signed by all parties.
10.4 MATTERS OF CONSTRUCTION.
10.4.1 INCORPORATION OF EXHIBITS. All exhibits attached and
referred to in this Agreement are hereby incorporated herein as fully set
forth in (and shall be deemed to be a part of) this Agreement.
10.4.2 ENTIRE AGREEMENT. This Agreement contains the entire
agreement between the parties respecting the matters herein set forth and
supersedes all prior agreements between the parties hereto respecting such
matters.
10.4.3 TIME OF THE ESSENCE. Subject to subsection 10.4.4 below,
time is of the essence of this Agreement.
10.4.4 NON-BUSINESS DAYS. Whenever action must be taken
(including the giving of notice or the delivery of documents) under this
Agreement during a certain period of time (or by a particular date) that
ends (or occurs) on a non-business day, then such period (or date) shall be
extended until the immediately following business day. As used herein,
"BUSINESS DAY" means any day other than a Saturday, Sunday or federal or
Texas or Illinois state holiday.
10.4.5 SEVERABILITY. If any term or provision of this Agreement
or the application thereof to any person or circumstance shall, to any
extent, be invalid or unenforceable, the remainder of this Agreement, or
the application of such term or provision to persons or circumstances other
than those as to which it is held invalid or unenforceable, shall not be
affected thereby, and each such term and provision of this Agreement shall
be valid and be enforced to the fullest extent permitted by law.
10.4.6 INTERPRETATION. Words used in the singular shall include
the plural, and vice-versa, and any gender shall be deemed to include the
other. Whenever the words "including", "include" or "includes" are used in
this Agreement, they should be interpreted in a non-exclusive manner. The
captions and headings of the Sections of this Agreement are for convenience
of reference only, and shall not be deemed to define or limit the
provisions hereof. Except as otherwise indicated, all Exhibit and Section
references in this Agreement shall be deemed to refer to the Exhibits and
Sections in this Agreement. Each party acknowledges and agrees that this
Agreement (a) has been reviewed by it and its counsel; (b) is the product
of negotiations between the parties, and (c) shall not be deemed prepared
or drafted by any one party. In the event of any dispute between the
parties concerning this Agreement, the parties agree that any ambiguity in
the language of the Agreement is to not to be resolved against Seller or
Buyer, but shall be given a reasonable interpretation in accordance with
the plain meaning of the terms of this Agreement and the intent of the
parties as manifested hereby.
10.4.7 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF TEXAS
(WITHOUT REGARD TO CONFLICTS OF LAW).
10.4.8 THIRD PARTY BENEFICIARIES. Except as provided in
Sections 8.3.2 and 10.2, Seller and Buyer do not intend by any provision of
this Agreement to confer any right, remedy or benefit upon any third party,
and no third party shall be entitled to enforce or otherwise shall acquire
any right, remedy or benefit by reason of any provision of this Agreement.
10.5 EFFECTIVENESS OF AGREEMENT. In no event shall any draft of
this Agreement create any obligations or liabilities, it being intended
that only a fully executed and delivered copy of this Agreement will bind
the parties hereto.
10.6 POST-CLOSING ACCESS. For a period of five years subsequent to
the Closing, Seller and its respective employees, agents and
representatives shall be entitled to access during normal business hours to
all documents, books and records of the Operating Partnership applicable to
the period Seller was a partner of the Operating Partnership upon
reasonable prior notice to Buyer, and shall have the right to make copies
of such documents, books and records at Seller's expense.
10.7 SUCCESSORS AND ASSIGNS. Buyer may not assign or transfer its
rights or obligations under this Agreement without the prior written
consent of Seller (in which event such transferee shall assume in writing
all of the transferor's obligations hereunder, but such transferor shall
not be released from its obligations hereunder); provided, however, that,
upon delivery of an Assumption Agreement satisfactory to Seller, Seller
will not withhold its consent to the assignment by Buyer to a limited
partnership in which Buyer is the managing general partner and has not less
than a 51% interest in capital and profits in such limited partnership. No
consent given by Seller to any transfer or assignment of Buyer's rights or
obligations hereunder shall be construed as a consent to any other transfer
or assignment of Buyer's rights or obligations hereunder. No transfer or
assignment in violation of the provisions hereof shall be valid or
enforceable. Subject to the foregoing, this Agreement and the terms and
provisions hereof shall inure to the benefit of and be binding upon the
successors and assigns of the parties.
10.8 NOTICES. Any notice which a party is required or may desire to
give the other shall be in writing and shall be sent by personal delivery
or by mail (either [i] by United States registered or certified mail,
return receipt requested, postage prepaid, or [ii] by Federal Express or
similar generally recognized overnight carrier regularly providing proof of
delivery), addressed as follows (subject to the right of a party to
designate a different address for itself by notice similarly given):
TO BUYER:
c/o Folsom Investments, Inc.
16475 Dallas Parkway, Suite 800
Dallas, Texas 75248
Attention: Mr. Robert W. Kennedy
Telecopier: (972) 250-2387
Telephone: (972) 931-7400
With Copy To:
Geary, Porter & Donovan, P.C.
16475 Dallas Parkway, Suite 550
Dallas, Texas 75248
Attention: James T. Porter, Esq.
Telecopier: (972) 931-9208
Telephone: (972) 931-9901
TO SELLER:
c/o JMB Realty Corporation
900 North Michigan Avenue
12th Floor
Chicago, Illinois 60611
Attention: Ms. Julie A. Strocchia
Telecopier: (312) 915-2399
Telephone: (312) 915-2348
With Copy To:
Pircher, Nichols & Meeks
1999 Avenue of the Stars
Suite 2600
Los Angeles, California 90067
Attention: Real Estate Notices (SAC)
Telecopier: (310) 201-8922
Telephone: (310) 201-8900
TO ESCROW AGENT:
Southwest Land Title Company
2900 Lincoln Plaza
500 North Akard
Dallas, Texas 75201
Attention: Dorothy Haight
Telecopier: (214) 720-4083
Telephone: (214) 720-1020
Any notice so given by mail shall be deemed to have been given as of the
date of delivery (whether accepted or refused) established by U.S. Post
Office return receipt or the overnight carrier's proof of delivery, as the
case may be. Any such notice not so given shall be deemed given upon
receipt of the same by the party to whom the same is to be given.
10.9 LEGAL COSTS. The parties hereto agree that they shall pay
directly any and all legal costs which they have incurred on their own
behalf in the preparation of this Agreement, all other agreements
pertaining to this transaction and that such legal costs shall not be part
of the closing costs. In addition, if any party hereto brings any suit or
other proceeding with respect to the subject matter or the enforcement of
this Agreement, the prevailing party or parties (as determined by the
court, agency or other authority before which such suit or proceeding is
commenced), in addition to such other relief as may be awarded, shall be
entitled to recover reasonable attorneys' fees, expenses and costs of
investigation actually incurred from the non-prevailing party or parties.
The foregoing includes attorneys' fees, expenses and costs of investigation
(including those incurred in appellate proceedings), costs incurred in
establishing the right to indemnification, or in any action or
participation in, or in connection with, any case or proceeding under
Chapter 7, 11 or 13 of the Bankruptcy Code (11 United States Code Sections
101 et seq.), or any successor statutes.
10.10COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same document.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
SELLER:
GREENWAY ASSOCIATES, LTD.,
a Texas limited partnership
By: CARLYLE REAL ESTATE
LIMITED PARTNERSHIP-X,
an Illinois limited partnership,
General Partner
By: JMB REALTY CORPORATION,
a Delaware corporation,
General Partner
By:
-------------------------
Name:
-------------------------
Title:
-------------------------
BUYER:
FOLSOM MANAGEMENT, INC.
a Texas corporation
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
ESCROW HOLDER'S ACKNOWLEDGEMENT
-------------------------------
The undersigned hereby executes this Agreement to evidence its agreement to
act as Escrow Holder in accordance with the terms of this Agreement.
Date: _______________, 1996 SOUTHWEST LAND TITLE COMPANY
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
EXHIBIT LIST
------------
"A" - List of Agreements and Obligations to be Released
"B" - Assignment and Assumption Agreement
"C" - Form of Release to be executed by Seller
"D" - Form of Release to be executed by Buyer and
Operating Partnership
EXHIBIT "A"
-----------
ALL LOAN DOCUMENTS WITH GENERAL ELECTRIC CAPITAL CORPORATION
EXHIBIT "B"
-----------
[Assignment and Assumption Agreement]
ASSIGNMENT OF PARTNERSHIP INTEREST AND ASSUMPTION
THIS ASSIGNMENT OF PARTNERSHIP INTEREST AND ASSUMPTION, dated as of
the ______ day of December, 1996, by and between GREENWAY ASSOCIATES, LTD.,
a Texas limited partnership ("Assignor"), and FOLSOM MANAGEMENT, INC., a
Texas corporation ("Assignee").
W I T N E S S E T H:
WHEREAS, Assignor is a partner in that certain Texas general
partnership known as "GREENWAY TOWER JOINT VENTURE" (the "Partnership"),
which is currently governed by that certain partnership agreement (the
"Partnership Agreement") captioned "JOINT VENTURE AGREEMENT OF GREENWAY
TOWER JOINT VENTURE", dated as of September 25, 1987, by and between
Assignor and Folsom Investments, Inc., a Texas corporation ("Folsom"); and
WHEREAS, Assignor desires to assign to Assignee Assignor's entire
partnership interest in the Partnership (the "Partnership Interest") and
Assignee desires to acquire the Partnership Interest; and
WHEREAS, it is intended that Assignee become a substituted partner in
the Partnership;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Assignor hereby unconditionally assigns, sells, transfers,
conveys and sets over to Assignee all of Assignor's right, title and
interest in and to the Partnership Interest, including without limitation,
all of Assignor's interest in the capital and the profits and losses of the
Partnership and all rights to receive distributions of money, profits and
other assets from the Partnership. Except as specifically set forth in
subsection 6.1.2 of that certain purchase agreement (the "Purchase
Agreement") captioned "PURCHASE AGREEMENT", dated as of December 23, 1996,
among Assignor and Assignee, the Partnership Interest is being assigned,
sold, transferred, conveyed and set over by Assignor to Assignee on an "AS
IS" basis without representations and warranties of any kind or nature,
express, implied or otherwise, including any representation or warranty
concerning the Partnership or its assets. Nothing in this Assignment of
Partnership Interest and Assumption shall limit Assignor's or Assignee's
rights under the Purchase Agreement.
2. Assignee hereby accepts the assignment of the Partnership
Interest and hereby expressly assumes all of Assignor's obligations to the
Partnership whether now existing or hereafter incurred, including, without
limitation, any obligation of Assignor to make capital contributions
pursuant to the provisions of the Partnership Agreement, but excluding any
of Assignor's obligations pursuant to the Purchase Agreement.
3. This Assignment of Partnership Interest and Assumption shall be
interpreted, construed and enforced in accordance with the laws of the
State of Texas.
4. This Assignment of Partnership Interest and Assumption shall be
binding upon and shall inure to the benefit of the respective parties
hereto and their respective legal representatives, successors and assigns.
5. This Assignment of Partnership Interest and Assumption may be
executed in counterparts, each of which shall constitute an original and
all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
of Partnership Interest and Assumption as of the day and year first above
written.
ASSIGNOR:
GREENWAY ASSOCIATES, LTD.
a Texas limited partnership
By: CARLYLE REAL ESTATE LIMITED
PARTNERSHIP-X, an Illinois limited partnership, General Partner
By: JMB REALTY CORPORATION,
a Delaware corporation, General
Partner
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
ASSIGNEE:
FOLSOM MANAGEMENT, INC.,
a Texas corporation
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
EXHIBIT "C"
-----------
[Form of Release to be Executed by Seller]
GENERAL RELEASE
1. RELEASE. For good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, GREENWAY ASSOCIATES, LTD., a
Texas limited partnership ("Seller"), for itself, its successors and
assigns and all persons claiming by, under or through it (collectively, the
"Releasing Parties"), does hereby absolutely and irrevocably waive,
release, and forever discharge each of GREENWAY TOWER JOINT VENTURE, a
Texas general partnership (the "Partnership"), and FOLSOM INVESTMENTS,
INC., a Texas corporation ("Folsom"), INDEPENDENCE DEVELOPMENT, INC., a
Texas corporation, and SABRE REALTY MANAGEMENT, INC., a Texas corporation,
and their direct and indirect partners, and their respective partners,
trustees, beneficiaries, officers, shareholders, directors, agents,
servants, contractors, employees, associated or affiliated corporations,
partnerships, and limited liability companies and predecessors-in-interest
(collectively the "Released Parties") from any and all claims, rights,
demands, actions, suits, causes of actions, damages, counterclaims,
defenses, losses, costs, obligations, liabilities and expenses of every
kind or nature (collectively, "Claims"), known or unknown, suspected or
unsuspected, fixed or contingent, foreseen or unforeseen, arising out of or
relating directly or indirectly to any circumstances or state of facts
pertaining to the Partnership or the partnership agreement (the
"Partnership Agreement") of the Partnership captioned "JOINT VENTURE
AGREEMENT OF GREENWAY TOWER JOINT VENTURE", dated as of September 25, 1987,
by and between Seller and Folsom, or any nonperformance of any agreement or
obligation related thereto, or any statements, representations, acts or
omissions, intentional, willful, negligent or innocent, by any of the
Released Parties in any way connected with, relating to or affecting,
directly or indirectly, the Partnership or the Partnership Agreement;
provided, however, that the foregoing shall not constitute a release of (i)
any of the obligations of FOLSOM MANAGEMENT, INC., a Texas corporation
("Buyer"), its successors and assigns, or any other Released Party under
that certain purchase agreement captioned "PURCHASE AGREEMENT", dated as of
December 23, 1996, between Seller and Buyer or (ii) any of the obligations
of Buyer, its successors and assigns, or any of the Released Parties under
any agreement, instrument or other document executed and delivered in
connection therewith.
2. NON-RELIANCE. Seller hereby acknowledges that it has not
relied upon any representation of any kind made by the Partnership or
Folsom in making the foregoing release.
3. NO TRANSFER OF CLAIMS. Seller represents and warrants that it
has not heretofore assigned, or transferred, or purported to assign or to
transfer, to any person or entity, any Claim released hereunder or any
portion thereof or interest therein, and each of the Releasing Parties
agrees to indemnify, defend and hold the Released Parties harmless from and
against any and all such Claims based on or arising out of any such
assignment or transfer or purported assignment or transfer.
4. ADVICE OF COUNSEL. Seller hereby agrees, represents and
warrants that it has had advice of counsel of its own choosing in
negotiations for and the preparation of this Release, including the
foregoing release, that it has read the provisions of this Release, and
that it is fully aware of its contents and legal effect.
5. DAMAGES AND ATTORNEY'S FEES. Each of the Releasing Parties
agrees that if it hereafter commences, joins in, or in any manner seeks,
relief through any suit arising out of, based upon, or relating to any of
the Claims or in any manner asserts against such Released Parties, or any
of them, any of the Claims, then the undersigned will pay to such Released
Parties, and each of them, in addition to any other damages caused to such
Released Parties thereby, all attorneys' fees incurred by such Released
Parties in defending or otherwise responding to said suit or claim.
Dated: December 23, 1996.
GREENWAY ASSOCIATES, LTD.,
a Texas limited partnership
By: CARLYLE REAL ESTATE LIMITED
PARTNERSHIP-X, an Illinois limited
partnership,
General Partner
By: JMB REALTY CORPORATION,
a Delaware corporation, General
Partner
By:
--------------------------
Name:
--------------------------
Title:
--------------------------
EXHIBIT "D"
-----------
[Form of Release to be Executed by Operating Partnership and Buyer]
GENERAL RELEASE
1. RELEASE. For good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, each of GREENWAY TOWER JOINT
VENTURE, a Texas general partnership (the "Partnership"), and FOLSOM
INVESTMENTS, INC., a Texas corporation ("Folsom"), INDEPENDENCE
DEVELOPMENT, INC., a Texas corporation, and SABRE REALTY MANAGEMENT, INC.,
a Texas corporation ("Manager"), for themselves, their respective
successors and assigns and all persons claiming by, under or through them
(collectively, the "Releasing Parties"), does hereby absolutely and
irrevocably waive, release, and forever discharge GREENWAY ASSOCIATES,
LTD., a Texas limited partnership ("Seller"), and its direct and indirect
partners, and their respective partners, trustees, beneficiaries, officers,
shareholders, directors, agents, servants, contractors, employees,
associated or affiliated corporations, partnerships, and limited liability
companies and predecessors-in-interest (collectively the "Released
Parties") from any and all claims, rights, demands, actions, suits, causes
of action, damages, counterclaims, defenses, losses, costs, obligations,
liabilities and expenses of every kind or nature (collectively, "Claims"),
known or unknown, suspected or unsuspected, fixed or contingent, foreseen
or unforeseen, arising out of or relating directly or indirectly to any
circumstances or state of facts pertaining to the Partnership or the
partnership agreement (the "Partnership Agreement") of the Partnership
captioned "JOINT VENTURE AGREEMENT OF GREENWAY TOWER JOINT VENTURE",
dated
as of September 25, 1987, by and between Seller and Folsom, or any
nonperformance of any agreement or obligation related thereto (including,
without limitation, any management agreement between the Partnership and
Manager), or any statements, representations, acts or omissions,
intentional, willful, negligent or innocent, by any of the Released Parties
in any way connected with, relating to or affecting, directly or
indirectly, the Partnership or the Partnership Agreement; provided,
however, that the foregoing shall not constitute a release of (i) any of
the obligations of Seller or any other Released Party under that certain
purchase agreement captioned "PURCHASE AGREEMENT", dated as of December 23,
1996, between Seller and Folsom Management, Inc., a Texas corporation
("Buyer") or (ii) any of the obligations of any of the Released Parties
under any agreement, instrument or other document executed and delivered in
connection therewith.
2. NON-RELIANCE. Each of the Releasing Parties hereby
acknowledges that it has not relied upon any representation of any kind
made by Seller in making the foregoing release.
3. NO TRANSFER OF CLAIMS. Each of the Releasing Parties
represents and warrants that it has not heretofore assigned, or
transferred, or purported to assign or to transfer, to any person or
entity, any Claim released hereunder or any portion thereof or interest
therein, and each of the Releasing Parties agrees to indemnify, defend and
hold the Released Parties harmless from and against any and all such Claims
based on or arising out of any such assignment or transfer or purported
assignment or transfer.
4. ADVICE OF COUNSEL. Each of the Releasing Parties hereby
agrees, represents and warrants that it has had advice of counsel of its
own choosing in negotiations for and the preparation of this Release,
including the foregoing release, that it has read the provisions of this
Release, and that it is fully aware of its contents and legal effect.
5. DAMAGES AND ATTORNEY'S FEES. Each of the Releasing Parties
agrees that if it hereafter commences, joins in, or in any manner seeks,
relief through any suit arising out of, based upon, or relating to any of
the Claims or in any manner asserts against such Released Parties, or any
of them, any of the Claims, then the undersigned will pay to such Released
Parties, and each of them, in addition to any other damages caused to such
Released Parties thereby, all attorneys' fees incurred by such Released
Parties in defending or otherwise responding to said suit or claim.
Dated: December 23, 1996.
FOLSOM: THE PARTNERSHIP:
FOLSOM INVESTMENTS, INC., GREENWAY TOWER JOINT VENTURE,
a Texas corporation a Texas general partnership
By: ______________________ By: INDEPENDENCE DEVELOPMENT,
Name: ____________________ INC., a Texas corporation
Title: ___________________
By:
---------------------------
Name:
---------------------------
Title:
---------------------------
MANAGER: INDEPENDENCE:
SABRE REALTY MANAGEMENT, INC., INDEPENDENCE DEVELOPMENT,
a Texas corporation INC., a Texas corporation
By: By:
-------------------- --------------------
Name: Name:
-------------------- --------------------
Title: Title:
-------------------- --------------------
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officers of JMB
Realty Corporation, the corporate general partner of CARLYLE REAL ESTATE
LIMITED PARTNERSHIP - X, do hereby nominate, constitute and appoint GARY
NICKELE, GAILEN J. HULL, DENNIS M. QUINN or any of them, attorneys and
agents of the undersigned with full power of authority to sign in the name
and on behalf of the undersigned officers a Report on Form 10-K of said
partnership for the fiscal year ended December 31, 1996, and any and all
amendments thereto, hereby ratifying and confirming all that said attorneys
and agents and any of them may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned have executed this Power of
Attorney the 22nd day of January, 1997.
H. RIGEL BARBER
- -----------------------
H. Rigel Barber Chief Executive Officer
GLENN E. EMIG
- -----------------------
Glenn E. Emig Chief Operating Officer
The undersigned hereby acknowledge and accept such power of authority
to sign, in the name and on behalf of the above named officers, a Report on
Form 10-K of said partnership for the fiscal year ended December 31, 1996,
and any and all amendments thereto, the 22nd day of January, 1997.
GARY NICKELE
-----------------------
Gary Nickele
GAILEN J. HULL
-----------------------
Gailen J. Hull
DENNIS M. QUINN
-----------------------
Dennis M. Quinn
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officers of JMB
Realty Corporation, the corporate general partner of CARLYLE REAL ESTATE
LIMITED PARTNERSHIP - X, do hereby nominate, constitute and appoint GARY
NICKELE, GAILEN J. HULL, DENNIS M. QUINN or any of them, attorneys and
agents of the undersigned with full power of authority to sign in the name
and on behalf of the undersigned officers a Report on Form 10-K of said
partnership for the fiscal year ended December 31, 1996, and any and all
amendments thereto, hereby ratifying and confirming all that said attorneys
and agents and any of them may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned have executed this Power of
Attorney the 22nd day of January, 1997.
NEIL G. BLUHM
- ----------------------- President and Director
Neil G. Bluhm
JUDD D. MALKIN
- ----------------------- Chairman and Chief Financial Officer
Judd D. Malkin
A. LEE SACKS
- ----------------------- Director of General Partner
A. Lee Sacks
STUART C. NATHAN
- ----------------------- Executive Vice President
Stuart C. Nathan Director of General Partner
The undersigned hereby acknowledge and accept such power of authority
to sign, in the name and on behalf of the above named officers, a Report on
Form 10-K of said partnership for the fiscal year ended December 31, 1996,
and any and all amendments thereto, the 22nd day of January, 1997.
GARY NICKELE
-----------------------
Gary Nickele
GAILEN J. HULL
-----------------------
Gailen J. Hull
DENNIS M. QUINN
-----------------------
Dennis M. Quinn
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1995 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
INCLUDED IN SUCH REPORT.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 5,296,735
<SECURITIES> 0
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<CURRENT-ASSETS> 5,296,735
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0
0
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<EPS-PRIMARY> 78.32
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</TABLE>
