March 30, 2000
United States
Securities and Exchange Commission
Washington, D.C. 20549
RE: Angeles Income Properties, Ltd. II
Form 10-KSB
File No. 0-11767
To Whom it May Concern:
The accompanying Form 10-KSB for the year ended December 31, 1999 describes a
change in the method of accounting to capitalize exterior painting and major
landscaping, which would have been expensed under the old policy. The
Partnership believes that this accounting principle change is preferable because
it provides a better matching of expenses with the related benefit of the
expenditures and it is consistent with industry practice and the policies of the
Managing General Partner.
Please do not hesitate to contact the undersigned with any questions or comments
that you might have.
Very truly yours,
Stephen Waters
Real Estate Controller
<PAGE>
FORM 10-KSB--Annual or Transitional Report Under
Section 13 or 15(d)
Form 10-KSB
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [No Fee Required]
For the fiscal year ended December 31, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [No Fee Required]
For the transition period _________to _________
Commission file number 0-11767
ANGELES INCOME PROPERTIES, LTD. II
(Name of small business issuer in its charter)
California 95-3793526
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
55 Beattie Place, PO Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(864) 239-1000
Issuer's telephone number
Securities registered under Section 12(b) of the Exchange Act:
None
Securities registered under Section 12(g) of the Exchange Act:
Units of Limited Partnership Interest
(Title of class)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes X No___
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of the registrant's knowledge in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]
State issuer's revenues for its most recent fiscal year. $6,767,000
State the aggregate market value of the voting partnership interests held by
non-affiliates computed by reference to the price at which the partnership
interests were sold, or the average bid and asked prices of such partnership
interests as of December 31, 1999. No market exists for the limited partnership
interests of the Registrant, and, therefore, no aggregate market value can be
determined.
DOCUMENTS INCORPORATED BY REFERENCE
None
<PAGE>
PART I
Item 1. Description of Business
Angeles Income Properties, Ltd. II (the "Partnership" or "Registrant") is a
publicly held limited partnership organized under the California Uniform Limited
Partnership Act on October 12, 1982. The Partnership's managing general partner
is Angeles Realty Corporation II, a California corporation (the "Managing
General Partner" or "ARC II"). ARC II was wholly-owned by MAE GP Corporation
("MAE GP"). Effective February 25, 1998, MAE GP was merged into Insignia
Properties Trust ("IPT"). Effective February 26, 1999, IPT was merged into
Apartment Investment and Management Company ("AIMCO"). Thus, the Managing
General Partner is now wholly-owned by IPT (see "Transfer of Control"). The
Elliott Accommodation Trust and the Elliott Family Partnership, Ltd., California
limited partnerships, were the non-managing general partners. Effective December
31, 1997 the Elliott Family Partnership, Ltd. acquired the Elliott Accommodation
Trust's general partner interest in the Registrant. The Managing General Partner
and the non-managing general partner are herein collectively referred to as the
"General Partners". The Partnership Agreement provides that the Partnership is
to terminate on December 31, 2037 unless terminated prior to such date.
The Partnership, through its public offering of Limited Partnership Units, sold
100,000 units aggregating $50,000,000. The General Partners contributed capital
in the amount of $1,000 for a 1% interest in the Partnership. The Partnership
was formed for the purpose of acquiring fee and other forms of equity interests
in various types of real estate property. The Partnership presently owns and
operates three apartment properties and one commercial property, which was sold
subsequent to December 31, 1999. (See "Item 2. Properties"). Since its initial
offering, the Registrant has not received, nor are limited partners required to
make, additional capital contributions.
The Partnership has no full time employees. Management and administrative
services are provided by the Managing General Partner and by agents retained by
the Managing General Partner. An affiliate of the Managing General Partner
provided such property management services for the residential properties for
the years ended December 31, 1999 and 1998. Effective October 1, 1998, property
management services for the commercial property were provided by an unrelated
party.
The real estate business in which the Partnership is engaged is highly
competitive. There are other residential properties within the market area of
the Partnership's properties. The number and quality of competitive properties,
including those which may be managed by an affiliate of the Managing General
Partner in such market area, could have a material effect on the rental market
for apartment properties owned by the Partnership and the rents that may be
charged for such apartments. While the Managing General Partner and its
affiliates own and/or control a significant number of apartment units in the
United States, such units represent an insignificant percentage of total
apartment units in the United States and competition for the apartments is
local.
There have been, and it is possible there may be other, Federal, state and local
legislation and regulations enacted relating to the protection of the
environment. The Partnership is unable to predict the extent, if any, to which
such new legislation or regulations might occur and the degree to which such
existing or new legislation or regulations might adversely affect the properties
owned by the Partnership.
The Partnership monitors its properties for evidence of pollutants, toxins and
other dangerous substances, including the presence of asbestos. In certain cases
environmental testing has been performed. See discussion of ongoing
environmental clean-up project at Princeton Meadows in "Note G" of the
consolidated financial statements included in "Item 7. Financial Statements" of
this Form 10-KSB.
Both the income and expenses of operating the properties owned by the
Partnership are subject to factors outside of the Partnership's control, such as
changes in the supply and demand for similar properties resulting from various
market conditions, increases/decreases in unemployment or population shifts,
changes in the availability of permanent mortgage financing, changes in zoning
laws, or changes in patterns or needs of users. In addition, there are risks
inherent in owning and operating residential properties because such properties
are susceptible to the impact of economic and other conditions outside of the
control of the Partnership.
A further description of the Partnership's business is included in "Management's
Discussion and Analysis or Plan of Operations" included in "Item 6" of this Form
10-KSB.
Transfer of Control
Pursuant to a series of transactions which closed on October 1, 1998 and
February 26, 1999, Insignia Financial Group, Inc. ("Insignia") and IPT merged
into AIMCO, a publicly traded real estate investment trust, with AIMCO being the
surviving corporation (the "Insignia Merger"). As a result, AIMCO acquired 100%
ownership interest in the Managing General Partner. The Managing General Partner
does not believe that this transaction has had or will have a material effect on
the affairs and operations of the Partnership.
Item 2. Description of Properties:
The following table sets forth the Partnership's investment in properties:
<TABLE>
<CAPTION>
Date of
Property Purchase Type of Ownership Use
Continuing Operations
<S> <C> <C>
Deer Creek Apartments 09/28/83 Fee ownership subject to Apartments
Plainsboro, NJ a first mortgage 288 units
Georgetown Apartments 11/21/83 Fee ownership subject to Apartments
South Bend, IN a first and second 200 units
mortgage (1)
Landmark Apartments 12/16/83 Fee ownership subject to Apartments
Raleigh, NC a first mortgage 292 units
Discontinued Operation
Atlanta Crossing (2) 09/27/83 100% Leasehold Interest Retail Center
Shopping Center 169,168 s.f.
Montgomery, AL
</TABLE>
(1) Property is held by a limited partnership in which the Registrant owns a 99%
interest.
(2) Property was sold subsequent to December 31, 1999.
The Partnership had a 14.4% interest in the Princeton Meadows Golf Course
("Joint Venture") Joint Venture. On February 26, 1999, the Joint Venture sold
its only investment property, Princeton Meadows Golf Course, to an unaffiliated
third party (see "Note G" of the consolidated financial statements included in
"Item 7. Financial Statements").
Schedule of Properties:
Set forth below for each of the Registrant's properties is the gross carrying
value, accumulated depreciation, depreciable life, method of depreciation and
Federal tax basis.
<TABLE>
<CAPTION>
Gross
Carrying Accumulated Federal
Property Value Depreciation Rate Method Tax Basis
(in thousands) (in thousands)
Continuing Operations
<S> <C> <C> <C> <C> <C>
Deer Creek Apartments $12,305 $7,453 5-20 yrs (1) $ 4,505
Georgetown Apartments 7,555 5,674 5-20 yrs (1) 1,052
Landmark Apartments 12,527 9,471 5-20 yrs (1) 2,421
32,387 22,598 7,978
Discontinued Operation
Atlanta Crossing
Shopping Center 5,318 4,905 5-20 yrs (1) 1,269
$37,705 $27,503 $ 9,247
</TABLE>
(1) Straight line and accelerated.
See "Note A" of the consolidated financial statements included in "Item 7.
Financial Statements" for a description of the Partnership's depreciation policy
and "Note M - Change in Accounting Principle".
<PAGE>
Schedule of Property Indebtedness:
The following table sets forth certain information relating to the loans
encumbering the Registrant's properties.
<TABLE>
<CAPTION>
Principal Principal
Balance At Balance
December 31, Interest Period Maturity Due At
Property 1999 Rate Amortized Date Maturity (2)
(in thousands) (in thousands)
Deer Creek
<S> <C> <C> <C> <C> <C>
1st mortgage $ 6,100 7.33% 30 yrs 11/2003 $ 5,779
Georgetown
1st mortgage 5,175 7.83% 28.67 yrs 10/2003 4,806
2nd mortgage 173 7.83% (1) 10/2003 173
Landmark
1st mortgage 6,391 7.33% 30 yrs 11/2003 6,054
17,839 $16,812
Less unamortized
discount (55)
$17,784
</TABLE>
(1) Interest only payments.
(2) See "Item 7. Financial Statements - Note C" for information with respect
to the Partnership's ability to prepay these loans and other specific
details about the loans.
Rental Rates and Occupancy:
Average annual rental rate and occupancy for 1999 and 1998 for each property:
<TABLE>
<CAPTION>
Average Annual Average Annual
Rental Rate Occupancy
Property 1999 1998 1999 1998
Continuing Operations
<S> <C> <C> <C> <C>
Deer Creek Apartments 9,397/unit 8,920/unit 98% 97%
Georgetown Apartments 7,775/unit 7,624/unit 96% 96%
Landmark Apartments 8,518/unit 8,308/unit 92% 92%
Discontinued Operation
Atlanta Crossing
Shopping Center (1) $4.17/s.f. $4.51/s.f. 57% 59%
</TABLE>
(1) Bruno's, an anchor tenant, declared bankruptcy and vacated its space in
Atlanta Crossing during February of 1998. This tenant was subleasing the
space and the previous tenant is liable for, and the Partnership expects
that it will continue to pay, its rental payments through the year 2007.
Atlanta Crossing's average occupancy for 1999 and 1998 shown above
represents the center's physical occupancy. Because the original tenant has
continued making the rental payments, the center's economic average
occupancy for the years ended December 31, 1999 and 1998 is 88% and 90%,
respectively.
As noted under "Item 1. Description of Business", the real estate industry is
highly competitive. All of the properties of the Partnership are subject to
competition from other residential apartment complexes and commercial buildings
in the area. The Managing General Partner believes that all of the properties
are adequately insured. Each residential property is an apartment complex which
leases its units for lease terms of one year or less. No residential tenant
leases 10% or more of the available rental space. All of the properties are in
good physical condition, subject to normal depreciation and deterioration as is
typical for assets of this type and age.
Schedule of Lease Expirations:
The following is a schedule of the commercial lease expirations for the years
2000-2009:
<TABLE>
<CAPTION>
Number of Annual % of Gross
Atlanta Crossing Expirations Square Feet Rent Annual Rent
(in thousands)
<S> <C> <C> <C> <C> <C>
2000 2 3,200 25 3.81%
2001 -- -- -- --
2002 3 9,282 89 13.48%
2003 3 8,812(1) 118 17.93%
2004 2 11,971(1) 77 11.66%
2005 1 --(1) 28 4.28%
2006 2 55,009 214 32.50%
2007 1 53,820 65 9.85%
2008-2009 -- -- -- --
</TABLE>
(1) Includes a tenant that holds a ground lease and is not included in the
total square footage for the property (See "Note I" for further
information).
The following schedule reflects information on tenants occupying 10% or more of
the leasable square feet for the commercial property:
Nature of Annual Rent Lease
Business Leased Per Square Foot Expiration
Atlanta Crossing Shopping Center
Grocery Store 53,820 $1.21 03/05/07
Discount Store 50,000 3.30 02/28/06
<PAGE>
Schedule of Real Estate Taxes and Rates:
Real estate taxes and rates in 1999 for each property were:
1999 1999
Billing Rate
(in thousands)
Continued Operations
Deer Creek Apartments $ 285 2.67%
Georgetown Apartments 133* 9.40%
Landmark Apartments 122 1.26%
Discontinued Operation
Atlanta Crossing
Shopping Center $ 53 3.45%
*Amount per 1998 billings; tax bills for 1999 not yet received.
Capital Improvements:
Continuing Operations:
Deer Creek
During the year ended December 31, 1999, the Partnership spent approximately
$521,000 on capital improvements consisting primarily of building improvements,
parking lot improvements, air conditioning unit replacement, major landscaping,
and interior improvements. These improvements were funded primarily from
Partnership reserves. The Partnership is currently evaluating the capital
improvement needs of the property for the upcoming year. The minimum amount to
be budgeted is expected to be $300 per unit or $86,400. Additional improvements
may be considered and will depend on the physical condition of the property as
well as replacement reserves and anticipated cash flow generated by the
property.
Georgetown
During the year ended December 31, 1999, the Partnership spent approximately
$168,000 on capital improvements consisting primarily of carpet and vinyl
replacement, window replacements, major landscaping, and appliances. These
improvements were funded primarily from Partnership reserves and operating cash
flow. The Partnership is currently evaluating the capital improvement needs of
the property for the upcoming year. The minimum amount to be budgeted is
expected to be $300 per unit or $60,000. Additional improvements may be
considered and will depend on the physical condition of the property as well as
replacement reserves and anticipated cash flow generated by the property.
Landmark
During the year ended December 31, 1999, the Partnership spent approximately
$371,000 on capital improvements consisting primarily of carpet and vinyl
replacement, exterior painting, and structural improvements. These improvements
were funded primarily from Partnership reserves and operating cash flow. The
Partnership is currently evaluating the capital improvement needs of the
property for the upcoming year. The minimum amount to be budgeted is expected to
be $300 per unit or $87,600. Additional improvements may be considered and will
depend on the physical condition of the property as well as replacement reserves
and anticipated cash flow generated by the property.
Discontinued Operation:
Atlanta Crossing
During the year ended December 31, 1999, the Partnership spent approximately
$5,000 on capital improvements consisting primarily of tenant improvements. The
property was sold subsequent to December 31, 1999.
Item 3. Legal Proceedings
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs named as defendants, among others,
the Partnership, the Managing General Partner and several of their affiliated
partnerships and corporate entities. The action purports to assert claims on
behalf of a class of limited partners and derivatively on behalf of a number of
limited partnerships (including the Partnership) which are named as nominal
defendants, challenging the acquisition by Insignia Financial Group, Inc.
("Insignia") and entities which were, at one time, affiliates of Insignia
("Insignia Affiliates") of interests in certain general partner entities, past
tender offers by Insignia Affiliates to acquire limited partnership units, the
management of partnerships by Insignia Affiliates and the Insignia Merger (see
"Item 7. Financial Statements, Note B - Transfer of Control"). The plaintiffs
seek monetary damages and equitable relief, including judicial dissolution of
the Partnership. On June 25, 1998, the Managing General Partner filed a motion
seeking dismissal of the action. In lieu of responding to the motion, the
plaintiffs have filed an amended complaint. The Managing General Partner filed
demurrers to the amended complaint which were heard February 1999. Pending the
ruling on such demurrers, settlement negotiations commenced. On November 2,
1999, the parties executed and filed a Stipulation of Settlement, settling
claims, subject to final court approval, on behalf of the Partnership and all
limited partners who own units as of November 3, 1999. Preliminary approval of
the settlement was obtained on November 3, 1999 from the Superior Court of the
State of California, County of San Mateo, at which time the Court set a final
approval hearing for December 10, 1999. Prior to the December 10, 1999 hearing
the Court received various objections to the settlement, including a challenge
to the Court's preliminary approval based upon the alleged lack of authority of
class plaintiffs' counsel to enter the settlement. On December 14, 1999, the
Managing General Partner and its affiliates terminated the proposed settlement.
Certain plaintiffs have filed a motion to disqualify some of the plaintiffs'
counsel in the action. The Managing General Partner does not anticipate that
costs associated with this case will be material to the Partnership's overall
operations.
The Partnership is unaware of any other pending or outstanding litigation that
is not of a routine nature arising in the ordinary course of business.
Item 4. Submission of Matters to a Vote of Security Holders
The unit holders of the Partnership did not vote on any matter during the
quarter ended December 31, 1999.
<PAGE>
PART II
Item 5. Market for the Partnership's Common Equity and Related Security Holder
Matters
The Partnership, a publicly-held limited partnership, offered and sold 100,000
Limited Partnership Units aggregating $50,000,000. The Partnership currently has
2,043 holders of record owning an aggregate of 99,784 units. Affiliates of the
Managing General Partner owned 48,624 units or 48.729% at December 31, 1999. No
public trading market has developed for the Units, and it is not anticipated
that such a market will develop in the future.
The following table sets forth the distributions made by the Partnership for the
years ended December 31, 1998 and 1999:
Distributions
Per Limited
Aggregate Partnership Unit
(in thousands)
01/01/98 - 12/31/98 $ 1,487 (1) $14.75
01/01/99 - 12/31/99 $ 2,200 (2) $21.83
(1) Distribution was made from cash from operations. (See "Item 6" for further
details).
(2) Consists of $700,000 of cash from operations paid in 1999 and consists of
$1,074,000 of cash from operations and $426,000 of cash from the sale
proceeds from the sale of Princeton Meadows Golf Course Joint Venture
payable at December 31, 1999 (see "Item 6" for further details).
Future cash distributions will depend on the levels of cash generated from
operations, the availability of cash reserves and the timing of debt maturities,
refinancings and/or property sales. The Partnership's distribution policy is
reviewed on a semi-annual basis. There can be no assurance, however, that the
Partnership will generate sufficient funds from operations after required
capital expenditures to permit additional distributions to its partners in the
year 2000 or subsequent periods.
Several tender offers were made by various parties, including affiliates of the
Managing General Partner, during the years ended December 31, 1999 and 1998. As
a result of these tender offers, AIMCO and its affiliates currently own 48,624
limited partnership units in the Partnership representing 48.729% of the
outstanding units. It is possible that AIMCO or its affiliates will make one or
more additional offers to acquire additional limited partnership interests in
the Partnership for cash or in exchange for units in the operating partnership
of AIMCO. Consequently, AIMCO is in a position to significantly influence all
voting decisions with respect to the Registrant. Under the Partnership
Agreement, unitholders holding a majority of the Units are entitled to take
action with respect to a variety of matters. When voting on matters, AIMCO would
in all likelihood vote the Units it acquired in a manner favorable to the
interest of the Managing General Partner because of their affiliation with the
Managing General Partner.
<PAGE>
Item 6. Management's Discussion and Analysis or Plan of Operation
The matters discussed in this Form 10-KSB contain certain forward-looking
statements and involve risks and uncertainties (including changing market
conditions, competitive and regulatory matters, etc.) detailed in the disclosure
contained in this Form 10-KSB and the other filings with the Securities and
Exchange Commission made by the Registrant from time to time. The discussions of
the Registrant's business and results of operations, including forward-looking
statements pertaining to such matters, does not take into account the effects of
any changes to the Registrant's business and results of operations. Accordingly,
actual results could differ materially from those projected in the
forward-looking statements as a result of a number of factors, including those
identified herein.
This item should be read in conjunction with "Item 7. Financial Statements" and
other items contained elsewhere in this report.
Results of Operations
The Partnership's net income for the year ended December 31, 1999, was
approximately $1,098,000 compared to approximately $60,000 for the year ended
December 31, 1998. (See "Note D" of the financial statements for a
reconciliation of these amounts to the Registrant's federal taxable income.) The
increase in net income for the year ended December 31, 1999 is due to an
increase in total revenues, a decrease in total expenses and the increase in
equity in income of the joint venture due to the sale of Princeton Meadows Golf
Course as discussed below, which was partially offset by a decrease in income
from discontinued operation. The Partnership had income from continuing
operations of approximately $988,000 for the year ended December 31, 1999 as
compared to a loss of approximately $111,000 for the year ended December 31,
1998. This increase in income is due to an increase in total revenues and a
decrease in total expenses.
The increase in total revenues is due to an increase in rental income which was
partially offset by a decrease in other income. The increase in rental income is
the result of increased average rental rates at all of the Partnership's
residential properties and increased occupancy at Deer Creek Apartments. The
decrease in other income is primarily due to a decrease in interest income as a
result of lower average cash balances in interest-bearing accounts.
Total expenses decreased for the year ended December 31, 1999 due to decreases
in operating expense which was partially offset by an increase in general and
administrative expenses. The decrease in operating expenses was primarily due to
decreased spending on repairs and maintenance. These repairs were mostly related
to a renovation project at Landmark Apartments which was completed during 1998.
This renovation project included the correction of drainage problems and related
foundation repairs along with exterior building repairs in order to improve the
appearance of the property. In addition, insurance expense decreased due to the
change of insurance carriers late in 1998. The Partnership recorded losses on
disposal of property of approximately $35,000 and $157,000 for the years ended
December 31, 1999 and 1998, respectively. These losses are included in operating
expenses. Both the 1999 and 1998 losses resulted from the write-off of siding at
Deer Creek Apartments. Both of these write-offs were the result of assets not
being fully depreciated at the time of replacement. General and administrative
expenses increased due to increased legal expenses due to the settlement of a
lawsuit as disclosed in the Partnership's Annual Report on Form 10-KSB for the
year ended December 31, 1998 and an increase in a management fee accrued to the
Managing General Partner based on a percentage of positive cash flow as allowed
in the Partnership Agreement. These increases were partially offset by reduced
expense reimbursements to the Managing General Partner. Included in general and
administrative expenses at both December 31, 1999 and 1998, are reimbursements
to the Managing General Partner allowed under the Partnership Agreement
associated with its management of the partnership. Costs associated with the
quarterly and annual communications with investors and regulatory agencies and
the annual audit required by the Partnership Agreement are also included.
In March 2000, Atlanta Crossing Shopping Center, located in Montgomery, Alabama,
was sold to an unaffiliated party for $2,875,000. After payment of closing
expenses, the net sales proceeds received by the Partnership were approximately
$2,746,000. For financial statement purposes, the sale resulted in a gain of
approximately $2,060,000, which was recognized in the first quarter of 2000.
Atlanta Crossing Shopping Center was the only commercial property owned by the
Partnership and represented one segment of the Partnership's operations. Due to
the sale of this property, the net assets of this property have been classified
as "Investment in discontinued operation" as of December 31, 1999, on the
balance sheet. The investment in discontinued operation on the balance sheet as
of December 31, 1999 includes the investment property and the remaining
receivables and payables of Atlanta Crossing Shopping Center. The results of the
commercial segment have been shown as income from discontinued operation.
Revenues of this property were approximately $563,000 and $803,000 for 1999 and
1998, respectively. Income from operations was approximately $111,000 and
$171,000 for 1999 and 1998, respectively.
The Partnership had a 14.4% investment in Princeton Meadows Golf Course Joint
Venture. On February 26, 1999, the Joint Venture sold the Princeton Meadows Golf
Course to an unaffiliated third party for gross sale proceeds of $5,100,000. The
Joint Venture received net proceeds of $3,411,000 after payment of closing
costs, and repayment of the mortgage principal and accrued interest. The Joint
Venture recorded a gain on sale of approximately $3,090,000 after the write-off
of undepreciated fixed assets. For the year ended December 31, 1999 the
Partnership realized equity in income of the Joint Venture of approximately
$419,000, which included its equity in the gain on disposal of Princeton Meadows
Golf Course of $445,000 and the equity in loss on operations of $26,000, as
compared to equity in loss of the Joint Venture of approximately $2,000 for the
year ended December 31, 1998.
Effective January 1, 1999, the Partnership changed its method of accounting to
capitalize the cost of exterior painting and major landscaping on a prospective
basis. The Partnership believes that this accounting principle change is
preferable because it provides a better matching of expenses with the related
benefit of the expenditures and it is consistent with industry practice and the
policies of the Managing General Partner. The effect of the change in 1999 was
to increase net income by approximately $182,000 ($1.80 per limited partnership
unit). The cumulative effect, had this change been applied to prior periods, is
not material. The accounting principle change will not have an effect on cash
flow, funds available for distribution or fees payable to the Managing General
Partner and affiliates.
As part of the ongoing business plan of the Partnership, the Managing General
Partner monitors the rental market environment of each of its investment
properties to assess the feasibility of increasing rents, maintaining or
increasing occupancy levels and protecting the Partnership from increases in
expense. As part of this plan, the Managing General Partner attempts to protect
the Partnership from the burden of inflation-related increases in expenses by
increasing rents and maintaining a high overall occupancy level. However, due to
changing market conditions, which can result in the use of rental concessions
and rental reductions to offset softening market conditions, there is no
guarantee that the Managing General Partner will be able to sustain such a plan.
Liquidity and Capital Resources
The Partnership had cash and cash equivalents of approximately $4,229,000 at
December 31, 1999, compared to approximately $2,063,000 at December 31, 1998.
The increase in cash and cash equivalents of approximately $2,166,000 since
December 31, 1998, is due to approximately $2,988,000 of cash provided by
operating activities and approximately $103,000 of cash provided by investing
activities, which was partially offset by approximately $925,000 of cash used in
financing activities. Cash provided by investing activities consisted of net
withdrawals from escrow accounts maintained by the mortgage lenders, a
distribution from the Joint Venture and repayment of an advance to the Joint
Venture, which was partially offset by property improvements and replacements.
Cash used in financing activities consisted of a distribution to the partners
and, to a lesser extent, payments of principal made on the mortgages encumbering
the Partnership's properties. The Partnership invests its working capital
reserves in money market accounts.
The sufficiency of existing liquid assets to meet future liquidity and capital
expenditure requirements is directly related to the level of capital
expenditures required at the various properties to adequately maintain the
physical assets and other operating needs of the Partnership and to comply with
Federal, state, and local legal and regulatory requirements. The Partnership is
currently evaluating the capital improvement needs of the properties for the
upcoming year. The minimum amount to be budgeted is expected to be $300 per unit
or $234,000. Additional improvements may be considered and will depend on the
physical condition of the properties as well as anticipated cash flow generated
by the properties. The capital expenditures will be incurred only if cash is
available from operations or from Partnership reserves. To the extent that such
budgeted capital improvements are completed, the Registrant's distributable cash
flow, if any, may be adversely affected at least in the short term.
The Partnership's current assets are thought to be sufficient for any near-term
needs (exclusive of capital improvements) of the Partnership. The mortgage
indebtedness of approximately $17,784,000, net of discount, is amortized over
periods ranging from 29 to 30 years with balloon payments due in 2003. The
Managing General Partner will attempt to refinance such indebtedness and/or sell
the properties prior to such maturity date. If the properties cannot be
refinanced or sold for a sufficient amount, the Partnership may risk losing such
properties through foreclosure.
During the year ended December 31, 1999, the Partnership made a distribution in
the amount of $700,000 (approximately $693,000 to the limited partners or $6.95
per limited partnership unit) from operations. As of December 31, 1999, the
Partnership declared a distribution of approximately $1,500,000 of which
approximately $1,074,000 (approximately $1,063,000 to the limited partners or
$10.65 per limited partnership unit) is from operations and approximately
$426,000 (approximately $422,000 to the limited partners or $4.23 per limited
partnership unit) is from proceeds from the sale of Princeton Meadows Golf
Course Joint Venture. This distribution was paid in January 2000. During the
year ended December 31, 1998, the Partnership made a distribution in the amount
of $1,487,000 (approximately $1,472,000 to the limited partners or $14.75 per
limited partnership unit) from operations. Future cash distributions will depend
on the levels of cash generated from operations, the availability of cash
reserves and the timing of debt maturities, refinancings and/or property sales.
The Partnership's distribution policy is reviewed on a semi-annual basis. There
can be no assurance, however, that the Partnership will generate sufficient
funds from operations after required capital expenditures to permit additional
distributions to its partners during the year 2000 or subsequent periods.
Tender Offer
Several tender offers were made by various parties, including affiliates of the
Managing General Partner, during the years ended December 31, 1999 and 1998. As
a result of these tender offers, AIMCO and its affiliates currently own 48,624
limited partnership units in the Partnership representing 48.729% of the
outstanding units. It is possible that AIMCO or its affiliates will make one or
more additional offers to acquire additional limited partnership interests in
the Partnership for cash or in exchange for units in the operating partnership
of AIMCO. Consequently, AIMCO is in a position to significantly influence all
voting decisions with respect to the Registrant. Under the Partnership
Agreement, unitholders holding a majority of the Units are entitled to take
action with respect to a variety of matters. When voting on matters, AIMCO would
in all likelihood vote the Units it acquired in a manner favorable to the
interest of the Managing General Partner because of their affiliation with the
Managing General Partner.
Year 2000 Compliance
General Description
The Year 2000 issue is the result of computer programs being written using two
digits rather than four digits to define the applicable year. The Partnership is
dependent upon the Managing General Partner and its affiliates for management
and administrative services ("Managing Agent"). Any of the Managing Agent's
computer programs or hardware that had date-sensitive software or embedded chips
might have recognized a date using "00" as the year 1900 rather than the year
2000. This could have resulted in a system failure or miscalculations causing
disruptions of operations, including, among other things, a temporary inability
to process transactions, send invoices, or engage in similar normal business
activities.
Computer Hardware, Software and Operating Equipment
In 1999, the Managing Agent completed all phases of its Year 2000 program by
completing the replacement and repair of any hardware or software system or
operating equipment that was not yet Year 2000 compliant. The Managing Agent's
hardware and software systems and its operating equipment are now Year 2000
compliant. No material failure or erroneous results have occurred in the
Managing Agent's computer applications related to the failure to reference the
Year 2000 to date.
Third Parties
To date, the Managing Agent is not aware of any significant supplier or
subcontractor (external agent) or financial institution of the Partnership that
has a Year 2000 issue that would have a material impact on the Partnership's
results of operations, liquidity or capital resources. However, the Managing
Agent has no means of ensuring or determining the Year 2000 compliance of
external agents. At this time, the Managing Agent does not believe that a Year
2000 issue of any non-compliant external agent will have a material impact on
the Partnership's financial position or results of operations.
Costs
The total cost of the Managing Agent's Year 2000 project was approximately $3.2
million and was funded from operating cash flows.
Risks Associated with the Year 2000
The Managing Agent completed all necessary phases of its Year 2000 program in
1999, and did not experience system or equipment malfunctions related to a
failure to reference the Year 2000. The Managing Agent or Partnership have not
been materially adversely effected by disruptions in the economy generally
resulting from the Year 2000 issue.
At this time, the Managing Agent does not believe that the Partnership's
businesses, results of operations or financial condition will be materially
adversely effected by the Year 2000 issue.
Contingency Plans Associated with the Year 2000
The Managing Agent has not had to implement contingency plans such as manual
workarounds or selecting new relationships for its banking or elevator operation
activities in order to avoid the Year 2000 issue.
<PAGE>
Item 7. Financial Statements
ANGELES INCOME PROPERTIES, LTD. II
LIST OF FINANCIAL STATEMENTS
Report of Ernst & Young LLP, Independent Auditors
Consolidated Balance Sheet - December 31, 1999
Consolidated Statements of Operations - Years ended December 31, 1999 and 1998
Consolidated Statements of Changes in Partners' Deficit - Years ended December
31, 1999 and 1998
Consolidated Statements of Cash Flows - Years ended December 31, 1999 and 1998
Notes to Consolidated Financial Statements
<PAGE>
Report of Ernst & Young LLP, Independent Auditors
The Partners
Angeles Income Properties, Ltd. II
We have audited the accompanying consolidated balance sheet of Angeles Income
Properties, Ltd. II as of December 31, 1999, and the related consolidated
statements of operations, changes in partners' deficit and cash flows for each
of the two years in the period ended December 31, 1999. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. 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 Partnership's management, 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 financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Angeles Income
Properties, Ltd. II at December 31, 1999, and the consolidated results of its
operations and its cash flows for each of the two years in the period ended
December 31, 1999, in conformity with accounting principles generally accepted
in the United States.
As discussed in Note M to the consolidated financial statements, the Partnership
changed its method of accounting to capitalize the cost of exterior painting and
major landscaping effective January 1, 1999.
/s/ERNST & YOUNG LLP
Greenville, South Carolina
March 21, 2000
<PAGE>
ANGELES INCOME PROPERTIES, LTD. II
CONSOLIDATED BALANCE SHEET
(in thousands, except unit data)
December 31, 1999
<TABLE>
<CAPTION>
Assets
<S> <C>
Cash and cash equivalents $ 4,229
Receivables and deposits 342
Restricted escrows 315
Other assets 350
Investment in joint venture 2
Investment properties (Notes C and F):
Land $ 1,984
Buildings and related personal property 30,403
32,387
Less accumulated depreciation (22,598) 9,789
Investment in discontinued operation (Note N) 833
$ 15,860
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 243
Tenant security deposit liabilities 281
Accrued property taxes 140
Other liabilities 442
Due to affiliates (Note E) 228
Distribution payable 1,500
Mortgage notes payable (Notes C and F) 17,784
Partners' Deficit
General partners $ (487)
Limited partners (99,784 units issued and
outstanding) (4,271) (4,758)
$ 15,860
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
ANGELES INCOME PROPERTIES, LTD. II
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except unit data)
<TABLE>
<CAPTION>
Years Ended
December 31,
1999 1998
Revenues: (restated)
<S> <C> <C>
Rental income $ 6,370 $ 6,170
Other income 397 472
Total revenues 6,767 6,642
Expenses:
Operating 2,072 2,837
General and administrative 532 344
Depreciation 1,616 1,601
Interest 1,439 1,439
Property taxes 539 530
Total expenses 6,198 6,751
Income (loss) before equity in income (loss) of joint
venture, extraordinary item, and discontinued operation 569 (109)
Equity in income (loss) of joint venture (Note G) 419 (2)
Income (loss) form continuing operations 988 (111)
Equity in extraordinary loss on early extinguishment of
debt of joint venture (Note G) (1) --
Net income $ 1,098 $ 60
Net income allocated to general partners (1%) $ 11 $ 1
Net income allocated to limited partners (99%) 1,087 59
$ 1,098 $ 60
Per limited partnership unit:
Income (loss) from continuing operations $ 9.80 $ (1.10)
Extraordinary item (0.01) --
Income from discontinued operation 1.10 1.69
Net income $ 10.89 $ 0.59
Distributions per limited partnership unit $ 21.83 $ 14.75
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
ANGELES INCOME PROPERTIES, LTD. II
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' DEFICIT
(in thousands, except unit data)
<TABLE>
<CAPTION>
Limited
Partnership General Limited
Units Partners Partners Total
<S> <C> <C> <C> <C>
Original capital contributions 100,000 $ 1 $50,000 $50,001
Partners' deficit
at December 31, 1997 99,784 $ (462) $(1,767) $(2,229)
Distribution to partners (15) (1,472) (1,487)
Net income for the year ended
December 31, 1998 -- 1 59 60
Partners' deficit at
December 31, 1998 99,784 (476) (3,180) (3,656)
Distribution to partners (22) (2,178) (2,200)
Net income for the year
ended December 31, 1999 -- 11 1,087 1,098
Partners' deficit
at December 31, 1999 99,784 $ (487) $(4,271) $(4,758)
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
ANGELES INCOME PROPERTIES, LTD. II
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
Years Ended December 31,
1999 1998
Cash flows from operating activities:
<S> <C> <C>
Net income $ 1,098 $ 60
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 1,759 1,867
Amortization of discounts, loan costs and lease
commissions 95 96
Bad debt expense, net 119 117
Equity in (income) loss of joint venture (419) 2
Equity in extraordinary loss on early extinguishment of
Debt of joint venture 1 --
Loss on disposal of property 35 157
Change in accounts:
Receivables and deposits 185 (207)
Other assets (197) (45)
Accounts payable (31) (46)
Tenant security deposit liabilities 20 8
Accrued property taxes (115) 1
Due to affiliates 183 --
Other liabilities 255 66
Net cash provided by operating activities 2,988 2,076
Cash flows from investing activities:
Property improvements and replacements (908) (1,672)
Net withdrawals from restricted escrows 537 255
Repayment of advances to joint venture 46 --
Distributions from joint venture 428 --
Net cash provided by (used in) investing
activities 103 (1,417)
Cash flows from financing activities:
Payments on mortgage notes payable (225) (208)
Distributions to partners (700) (1,487)
Net cash used in financing activities (925) (1,695)
Net increase (decrease) in cash and cash equivalents 2,166 (1,036)
Cash and cash equivalents at beginning of the year 2,063 3,099
Cash and cash equivalents at end of year $ 4,229 $ 2,063
Supplemental disclosure of cash flow information:
Cash paid for interest $ 1,344 $ 1,360
Supplemental disclosure of non-cash activity:
Distribution payable $ 1,500 $ --
Property improvements and replcements included in
accounts payable $ 157 $ --
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
ANGELES INCOME PROPERTIES, LTD. II
Notes to Consolidated Financial Statements
December 31, 1999
Note A - Organization and Significant Accounting Policies
Organization: Angeles Income Properties, Ltd. II (the "Partnership" or
"Registrant") is a California limited partnership organized on October 12, 1982
to acquire and operate residential and commercial real estate properties. The
Partnership's managing general partner responsible for management of the
Partnership's business, is Angeles Realty Corporation II ("ARC II"). ARC II was
wholly-owned by MAE GP Corporation ("MAE GP"). Effective February 25, 1998, MAE
GP was merged into Insignia Properties Trust ("IPT"). Effective February 26,
1999, IPT was merged into Apartment Investment and Management Company ("AIMCO")
(see "Note B - Transfer of Control"). Thus, the Managing General Partner is now
wholly-owned by AIMCO. The Elliott Accommodation Trust and the Elliott Family
Partnership, Ltd., California limited partnerships, were the non-managing
general partners. Effective December 31, 1997 the Elliott Family Partnership,
Ltd. acquired the Elliott Accommodation Trust's general partner interest in the
Registrant. The Managing General Partner and the non-managing general partner
are herein collectively referred to as the "General Partners". The directors and
officers of the Managing General Partner also serve as executive officers of
AIMCO. The Partnership Agreement provides that the Partnership is to terminate
on December 31, 2037 unless terminated prior to such date. The Partnership
commenced operations on October 12, 1982. As of December 31, 1999, the
Partnership operates three residential properties and one commercial property,
which was sold subsequent to December 31, 1999, located in or near major urban
areas in the United States.
Principles of Consolidation: The consolidated financial statements of the
Partnership include all accounts of the Partnership and its 99% limited
partnership interest in Georgetown AIP II, LP and its 100% owned limited
liability corporation interest in AIPL II GP, LLC. Although legal ownership of
the respective asset remains with these entities, the Partnership retains all
economic benefits from the properties. As a result, the Partnership consolidates
its interests in these two entities, whereby all accounts are included in the
consolidated financial statements of the Partnership with all inter-entity
accounts being eliminated.
Joint Venture: The Partnership accounted for its 14.4% investment in Princeton
Meadows Joint Venture ("Joint Venture") using the equity method of accounting
(see "Note G").
Allocations and Distributions to Partners: In accordance with the Partnership
Agreement, any gain from the sale or other disposition of Partnership assets
will be allocated first to the Managing General Partner to the extent of the
amount of any brokerage compensation and incentive interest to which the
Managing General Partner is entitled. Any gain remaining after said allocation
will be allocated to the General Partners and limited partners in proportion to
their interests in the Partnership.
The Partnership will allocate other profits and losses 1% to the General
Partners and 99% to the limited partners.
Except as discussed below, the Partnership will allocate distributions 1% to the
General Partners and 99% to the limited partners.
<PAGE>
Upon the sale or other disposition, or refinancing, of any asset of the
Partnership, the distributable net proceeds shall be distributed as follows:
First, to the partners in proportion to their interests until the limited
partners have received proceeds equal to their original capital investment
applicable to the property. Second, to the partners until the limited partners
have received distributions from all sources equal to their 6% cumulative
distribution; Third, to the Managing General Partners until it has received its
brokerage compensation; Fourth, to the partners in proportion to their interests
until the limited partners have received distributions from all sources equal to
their additional 2% cumulative distribution; and thereafter, 85% to the limited
partners and non-managing general partners in proportion to their interests and
15% ("Incentive Interest") to the Managing General Partner.
Depreciation: Depreciation is provided by the straight-line method over the
estimated lives of the apartment and commercial properties and related personal
property. For Federal income tax purposes, the accelerated cost recovery method
is used (1) for real property over 15 years for additions prior to March 16,
1984, 18 years for additions after March 15, 1984 and before May 9, 1985, and 19
years for additions after May 8, 1985, and before January 1, 1987, and (2) for
personal property over 5 years for additions prior to January 1, 1987. As a
result of the Tax Reform Act of 1986, for additions after December 31, 1986, the
modified accelerated cost recovery method is used for depreciation of (1) real
property over 27 1/2 years and (2) personal property additions over 5 years.
Effective January 1, 1999 the Partnership changed its method of accounting to
capitalize the costs of exterior painting and major landscaping (Note M).
Cash and Cash Equivalents: Cash and cash equivalents include cash on hand and in
banks and money market accounts. At certain times, the amount of cash deposited
at a bank may exceed the limit on insured deposits.
Tenant Security Deposits: The Partnership requires security deposits from all
apartment lessees for the duration of the lease and such deposits are included
in receivables and deposits. The security deposits are refunded when the tenant
vacates the apartment provided the tenant has not damaged the space and is
current on rental payments.
Investment Properties: Investment properties consist of three apartment
complexes and one commercial shopping center and are stated at cost. Acquisition
fees are capitalized as a cost of real estate. In accordance with Statement of
Financial Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of", the
Partnership records impairment losses on long-lived assets used in operations
when events and circumstances indicate the assets might be impaired and the
undiscounted cash flows estimated to be generated by those assets are less than
the carrying amounts of those assets. Costs of investment properties that have
been permanently impaired have been written down to appraised value. No
adjustments for impairment of value were necessary for the years ending December
31, 1999 or 1998.
Loan Costs: Loan costs, included in other assets on the consolidated balance
sheet, of approximately $557,000 are being amortized on a straight-line basis
over the lives of the related loans. Current accumulated amortization is
approximately $293,000 and is also included in other assets on the consolidated
balance sheet. Amortization of loan costs is included in interest expense in the
accompanying consolidated statements of operations.
Lease Commissions: Lease commissions are being amortized using the straight line
method over the term of the respective leases.
Leases: The Partnership generally leases apartment units for twelve-month terms
or less. The Partnership recognizes income as earned on its residential leases.
Commercial building lease terms are generally from twelve months to twenty-five
years. For leases containing fixed rental increases during their term, rents are
recognized on a straight-line basis over the terms of the lease. For all other
commercial leases, rents are recognized over the terms of the leases as earned.
In addition, the Managing General Partner's policy is to offer rental
concessions during periods of declining occupancy or in response to heavy
competition from other similar complexes in the area. Concessions are charged
against rental income as incurred.
Use of Estimates: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Fair Value: SFAS No. 107, "Disclosures about Fair Value of Financial
Instruments", as amended by SFAS No. 119, "Disclosures about Derivative
Financial Instruments and Fair Value of Financial Instruments", requires
disclosure of fair value information about financial instruments, whether or not
recognized in the balance sheet, for which it is practicable to estimate fair
value. Fair value is defined in the SFAS as the amount at which the instruments
could be exchanged in a current transaction between willing parties, other than
in a forced or liquidation sale. The Partnership believes that the carrying
amount of its financial instruments (except for long term debt) approximates
their fair value due to the short term maturity of these instruments. The fair
value of the Partnership's long term debt, after discounting the scheduled loan
payments to maturity, approximates its carrying balance.
Restricted Escrows:
Capital Improvement Reserves - At the time of the refinancing of Deer
Creek and Landmark Apartments, $1,313,000 of the proceeds for Deer Creek
Apartments and $150,000 of the proceeds for Landmark Apartments were
designated for "Capital Improvement Escrows" for certain capital
improvements. During 1999 all the required improvements were completed and
the remaining funds were returned to the properties.
Reserve Account - In addition to the Capital Improvement Reserves, general
Reserve Accounts of $80,000 were established with the refinancing proceeds
for the Georgetown Apartments. These funds were established to cover
necessary repairs and replacements of existing improvements, debt service,
out-of-pocket expenses incurred for ordinary and necessary administrative
tasks, and payment of real property taxes and insurance premiums. The
Partnership is required to deposit net operating income (as defined in the
mortgage note) from the refinanced property to the reserve account until
the reserve account equals a minimum of $200 and a maximum of $400 per
apartment unit, for a total of approximately $40,000 to $80,000. At
December 31, 1999, the balance was $47,000, which includes interest earned
on these funds.
Replacement Reserve - A replacement reserve account is maintained for Deer
Creek Apartments and Landmark Apartments. Each property has a required
monthly payment into its account to cover the costs of capital
improvements and replacements. The balance of these accounts at December
31, 1999, is approximately $268,000 which includes interest.
Segment Reporting: SFAS No. 131, "Disclosure about Segments of an Enterprise and
Related Information" established standards for the way that public business
enterprises report information about operating segments in annual financial
statements and requires that those enterprises report selected information about
operating segments in interim financial report. It also establishes standards
for related disclosures about products and services, geographic areas, and major
customers. (See "Note K" for detailed disclosures of the Partnership's
segments).
Advertising: The Partnership expenses the cost of advertising as incurred.
Advertising costs of approximately $59,000 and $58,000 for the years ended
December 31, 1999 and 1998, respectively, were charged to operating expense as
incurred.
Reclassifications: Certain reclassifications have been made to the 1998 balances
to conform to the 1999 presentation.
Note B - Transfer of Control
Pursuant to a series of transactions which closed on October 1, 1998 and
February 26, 1999, Insignia Financial Group, Inc. ("Insignia") and IPT merged
into AIMCO, a publicly traded real estate investment trust, with AIMCO being the
surviving corporation (the "Insignia Merger"). As a result, AIMCO acquired 100%
ownership interest in the Managing General Partner. The Managing General Partner
does not believe that this transaction has had or will have a material effect on
the affairs and operations of the Partnership.
Note C - Mortgage Notes Payable
The principle terms of mortgage notes payable are as follows:
<TABLE>
<CAPTION>
Principal Monthly Principal
Balance At Payment Stated Balance
December 31, Including Interest Maturity Due At
Property 1999 Interest Rate Date Maturity
(in thousands) (in thousands)
Deer Creek Apartments
<S> <C> <C> <C> <C> <C>
1st mortgage $ 6,100 $ 43 7.33% 11/2003 $ 5,779
Georgetown Apartments
1st mortgage 5,175 41 7.83% 10/2003 4,806
2nd mortgage 173 1 7.83% 10/2003 173
Landmark Apartments
1st mortgage 6,391 45 7.33% 11/2003 6,054
17,839 $ 130 $16,812
Less unamortized
discounts (55)
$17,784
</TABLE>
The Partnership exercised an interest rate buy-down option for Georgetown
Apartments when the debt was refinanced, reducing the stated rate from 8.13% to
7.83%. The fee for the interest rate reduction amounted to $113,000 and is being
amortized as a mortgage discount on the effective interest method over the life
of the loan. The unamortized discount fee is reflected as a reduction of the
mortgage notes payable and increases the effective rate of the debt to 8.13%.
The mortgage notes payable are nonrecourse and are secured by pledge of certain
of the Partnership's rental properties and by pledge of revenues from the
respective rental properties. Certain of the notes require prepayment penalties
if repaid prior to maturity.
Scheduled principal payments of mortgage notes payable subsequent to December
31, 1999, are as follows (in thousands):
2000 $ 242
2001 261
2002 281
2003 17,055
$17,839
Note D - Income Taxes
The Partnership has received a ruling from the Internal Revenue Service that it
will be classified as a partnership for Federal income tax purposes.
Accordingly, no provision for income taxes is made in the consolidated financial
statements of the Partnership. Taxable income or loss of the Partnership is
reported in the income tax returns of its partners.
The following is a reconciliation of reported net income and Federal taxable
income (in thousands, except per unit data):
1999 1998
Net income as reported $ 1,098 $ 60
Add (deduct):
Depreciation differences 1,161 999
Unearned income 58 (45)
Accrued audit 25 23
Other (168) 271
Federal taxable income $ 2,174 $ 1,308
Federal taxable income per limited
partnership unit $ 21.47 $ 12.98
The following is a reconciliation between the Partnership's reported amounts and
Federal tax basis of net assets and liabilities (in thousands):
Net deficit as reported $(4,758)
Land and buildings 4,074
Accumulated depreciation (5,029)
Syndication and distribution costs 6,148
Investment in Joint Venture 197
Unearned income 209
Distributions payable 1,500
Other (252)
Net assets - Federal tax basis $ 2,089
<PAGE>
Note E - Transactions with Affiliated Parties
The Partnership has no employees and is dependent on the Managing General
Partner and its affiliates for the management and administration of all
Partnership activities. The Partnership Agreement provides for certain payments
to affiliates for services and reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership. The following payments were paid or
accrued to the Managing General Partner and affiliates during the years ended
December 31, 1999 and 1998:
1999 1998
(in thousands)
Property management fees (included in
operating expenses) $ 339 $ 350
Partnership management fees (included in general and
administrative expense) (1) 228 45
Reimbursement for services of affiliates (included in
operating expense, general and administrative
expense, and investment properties) 262 264
(1) The Partnership Agreement provides for a fee equal to 10% of "net cash
flow from operations", as defined in the Partnership Agreement to be paid
to the Managing General Partner for executive and administrative
management services.
During the years ended December 31, 1999 and 1998, affiliates of the Managing
General Partner were entitled to receive 5% of gross receipts from all of the
Registrant's residential properties for providing property management services.
The Registrant paid to such affiliates approximately $339,000 and $327,000 for
the years ended December 31, 1999 and 1998, respectively. During the nine months
ending September 30, 1998, affiliates of the Managing General Partner were
entitled to varying percentages of gross receipts from the Registrant's
commercial property for providing property management services. These services
were performed by affiliates of the Managing General Partner during the nine
months ending September 30, 1998 and were approximately $23,000. Effective
October 1, 1998 (the effective date of the Insignia Merger), these services for
the commercial property were provided by an unrelated party.
An affiliate of the Managing General Partner received reimbursement of
accountable administrative expenses amounting to approximately $262,000 and
$264,000 for the years ended December 31, 1999 and 1998, respectively, including
approximately $132,000 and $90,000, respectively, in construction oversight
costs.
Additionally, the Partnership paid approximately $57,000 during the year ended
December 31, 1998 to an affiliate of the Managing General Partner for lease
commissions at the Partnership's commercial property. These lease commissions
are included in investment in discontinued operation and are amortized over the
terms of the respective leases.
Angeles Mortgage Investment Trust, ("AMIT"), a real estate investment trust,
provided financing (the "AMIT Loan") to the Joint Venture (see "Note G").
Pursuant to a series of transactions, affiliates of the Managing General Partner
acquired ownership interests in AMIT. On September 17, 1998, AMIT was merged
with and into IPT, the entity which controlled the Managing General Partner.
Effective February 26, 1999, IPT was merged into AIMCO. As a result, AIMCO
became the holder of the AMIT loan. On February 26, 1999, Princeton Meadows Golf
Course was sold to an unaffiliated third party. Upon closing, the AMIT principal
balance of $1,567,000 plus accrued interest of approximately $17,000 was paid
off.
Several tender offers were made by various parties, including affiliates of the
Managing General Partner, during the years ended December 31, 1999 and 1998. As
a result of these tender offers, AIMCO and its affiliates currently own 48,624
limited partnership units in the Partnership representing 48.729% of the
outstanding units. It is possible that AIMCO or its affiliates will make one or
more additional offers to acquire additional limited partnership interests in
the Partnership for cash or in exchange for units in the operating partnership
of AIMCO. Consequently, AIMCO is in a position to significantly influence all
voting decisions with respect to the Registrant. Under the Partnership
Agreement, unitholders holding a majority of the Units are entitled to take
action with respect to a variety of matters. When voting on matters, AIMCO would
in all likelihood vote the Units it acquired in a manner favorable to the
interest of the Managing General Partner because of their affiliation with the
Managing General Partner.
Note F - Real Estate and Accumulated Depreciation
<TABLE>
<CAPTION>
Initial Cost
To Partnership
(in thousands)
Buildings Cost
and Related Capitalized
Personal Subsequent to
Description Encumbrances Land Property Acquisition
(in thousands) (in thousands)
Continuing Operations
<S> <C> <C> <C> <C>
Deer Creek Apartments $ 6,100 $ 953 $ 8,863 $ 2,489
Georgetown Apartments 5,348 294 6,545 716
Landmark Apartments 6,391 738 9,885 1,904
17,839 1,985 25,293 5,109
Discontinued Operation
Atlanta Crossing
Shopping Center -- 213 6,071 (966)
Totals $17,839 $ 2,198 $31,364 $ 4,143
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Gross Amount At Which Carried
At December 31, 1999
(in thousands)
Buildings
And Related
Personal Accumulated Date Depreciable
Description Land Property Total Depreciation Acquired Life-Years
(in thousands)
Continuing Operations
<S> <C> <C> <C> <C> <C> <C> <C>
Deer Creek $ 953 $11,352 $12,305 $ 7,453 09/28/83 5-20 yrs
Georgetown 293 7,262 7,555 5,674 11/21/83 5-20 yrs
Landmark 738 11,789 12,527 9,471 12/16/83 5-20 yrs
1,984 30,403 32,387 22,598
Discontinued Operation
Atlanta Crossing
Shopping Center 213 5,105 5,318 4,905 09/27/83 5-20 yrs
Totals $2,197 $35,508 $37,705 $27,503
</TABLE>
Reconciliation of "Investment Properties and Accumulated Depreciation":
Years Ended December 31,
1999 1998
(in thousands)
Investment Properties
Balance at beginning of year $36,790 $35,800
Property improvements 1,065 1,617
Write-offs due to replacements (150) (627)
Balance at end of year $37,705 $36,790
Accumulated Depreciation
Balance at beginning of year $25,859 $24,462
Additions charged to expense 1,759 1,867
Write-offs due to replacements (115) (470)
Balance at end of year $27,503 $25,859
The aggregate cost of the real estate for Federal income tax purposes at
December 31, 1999 and 1998, is approximately $41,779,000 and $40,829,000,
respectively. The accumulated depreciation taken for Federal income tax purposes
at December 31, 1999 and 1998, is approximately $32,532,000 and $32,053,000.
<PAGE>
Note G - Investment in Joint Venture
The Partnership had a 14.4% investment in Princeton Meadows Golf Course Joint
Venture ("Joint Venture"). On February 26, 1999, the Joint Venture sold its only
investment property, Princeton Meadows Golf Course, to an unaffiliated third
party. The sale resulted in net proceeds of approximately $3,411,000 after
payment of closing costs, and repayment of mortgage principal and accrued
interest. The Joint Venture recorded a gain on sale of approximately $3,090,000
after the write-off of undepreciated fixed assets. In connection with the sale,
a commission of approximately $153,000 was paid to the Joint Venture's managing
general partner in accordance with the Joint Venture Agreement. The
Partnership's 1999 pro-rata share of this gain is approximately $445,000 and its
equity in loss on operations of the Joint Venture amounted to approximately
$26,000. The Joint Venture also recognized an extraordinary loss on early
extinguishment of debt of approximately $7,000 as a result of unamortized loan
costs being written off. The Partnership's pro-rata share of this extraordinary
loss is approximately $1,000.
Condensed balance sheet information of the Joint Venture at December 31, 1999,
is as follows (in thousands):
Assets
Cash $ 17
Total $ 17
Liabilities and Partners' Capital
Other liabilities $ 7
Partners' capital 10
Total $ 17
The condensed statement of operations of the Joint Venture for the years ended
December 31, 1999 and 1998, are summarized as follows (in thousands):
Years Ended
December 31,
1999 1998
Revenues $ 104 $ 1,667
Costs and expenses (283) (1,681)
Loss before gain on sale of
investment property and extraordinary
loss on extinguishment of debt (179) (14)
Gain on sale of investment property 3,090 --
Extraordinary loss on extinguishment
of debt (7) --
Net income (loss) $ 2,904 $ (14)
<PAGE>
The Partnership recognized its 14.4% equity income of approximately $419,000 and
equity loss of approximately $2,000 in the Joint Venture for the years ended
December 31, 1999 and 1998, respectively. The Partnership also recognized an
extraordinary loss on extinguishment of debt of $1,000 for the year ended
December 31, 1999.
The Princeton Meadows Golf Course property had an underground fuel storage tank
that was removed in 1992. This fuel storage tank caused contamination to the
area. Management installed monitoring wells in the area where the tank was
formerly buried. Some samples from these wells indicated lead and phosphorous
readings that were higher than the range prescribed by the New Jersey Department
of Environmental Protection ("DEP"). The Joint Venture notified the DEP of the
findings when they were first discovered. However, the DEP did not give any
directives as to corrective action until late 1995.
In November 1995, representatives of the Joint Venture and the New Jersey DEP
met and developed a plan of action to clean-up the contamination site at
Princeton Meadows Golf Course. The Joint Venture engaged an engineering firm to
conduct consulting and compliance work and a second firm to perform the field
work necessary for the clean-up. Field work commenced, with skimmers installed
at three test wells on the site. These skimmers were in place to detect any
residual fuel that may still be in the ground. Upon the sale of the Golf Course,
as noted above, the Joint Venture was released from any further responsibility
or liability with respect to the clean-up.
Note H - Operating Leases
Tenants of the commercial properties are responsible for their own utilities and
maintenance of their space, and payment of their proportionate share of common
area maintenance, utilities, insurance and real estate taxes. Tenants are
generally not required to pay a security deposit. Bad debt expense has been
within the Managing General Partner's expectations.
As of December 31, 1999, the Partnership had minimum future rentals under
non-cancelable leases with terms ranging from twelve months to twenty years.
(in thousands)
2000 $ 667
2001 653
2002 601
2003 467
2004 430
Thereafter 1,072
$3,890
Note I - Ground Lease
The Partnership assumed three operating leases in connection with the
acquisition of a leasehold interest in the Atlanta Crossing Shopping Center. The
aggregate annual lease expense for both of the years ended December 31, 1999 and
1998, was approximately $61,000. Such amounts are included in the statements of
operations as income from discontinued operation. The terms of these leases
provide for increases in rent every five years, based on the Consumer Price
Index.
As of December 31, 1999, the aggregate minimum rental payments under the land
leases were as follows:
(in thousands)
2000 61
2001 61
2002 61
2003 61
2004 61
Thereafter 1,098
$1,403
Note J - Distributions
During the year ended December 31, 1999, the Partnership made a distribution in
the amount of $700,000 (approximately $693,000 to the limited partners or $6.95
per limited partnership unit) from operations. As of December 31, 1999, the
Partnership declared a distribution of approximately $1,500,000 of which
approximately $1,074,000 (approximately $1,063,000 to the limited partners or
$10.65 per limited partnership unit) is from operations and approximately
$426,000 (approximately $422,000 to the limited partners or $4.23 per limited
partnership unit) is from proceeds from the sale of Princeton Meadows Golf
Course Joint Venture. The distribution was paid in January 2000. During the year
ended December 31, 1998, the Partnership made a distribution in the amount of
$1,487,000 (approximately $1,472,000 to the limited partners or $14.75 per
limited partnership unit) from operations.
Note K - Segment Reporting
The Partnership had two reportable segments: residential properties and
commercial properties. The Partnership's residential property segment consists
of three apartment complexes in New Jersey, Indiana, and North Carolina. The
Partnership rents apartment units to tenants for terms that are typically twelve
months or less. The commercial property segment consisted of a retail shopping
center located in Montgomery, Alabama. This property leases space to a discount
store, various specialty retail outlets, and several restaurants at terms
ranging from 12 months to twenty years. The commercial property was sold
subsequent to December 31, 1999 (see "Note N").
The Partnership evaluates performance based on segment profit (loss) before
depreciation. The accounting policies of the reportable segment are the same as
those described in the summary of significant policies.
The Partnership's reportable segments are investment properties that offer
different products and services. The reportable segments are each managed
separately because they provide distinct services with different types of
products and customers.
<PAGE>
Segment information for the years 1999 and 1998 is shown in the tables below (in
thousands). The "Other" column includes Partnership administration related items
and income and expense not allocated to the reportable segments.
<TABLE>
<CAPTION>
1999 Residential Commercial Other Totals
(discontinued)
<S> <C> <C> <C> <C>
Rental income $ 6,370 $ -- $ -- $ 6,370
Other income 344 -- 53 397
Interest expense 1,439 -- -- 1,439
Depreciation 1,616 -- -- 1,616
General and administrative
expense -- -- 532 532
Equity in income of joint
venture -- -- 419 419
Equity in extraordinary loss on
the early extinguishment of
debt of joint venture -- -- (1) (1)
Income from discontinued
operation -- 111 -- 111
Segment profit (loss) 1,048 111 (61) 1,098
Total assets 12,921 833 2,106 15,860
Capital expenditures for
investment properties 1,060 5 -- 1,065
</TABLE>
<TABLE>
<CAPTION>
1998 Residential Commercial Other Totals
(Discontinued)
<S> <C> <C> <C> <C>
Rental income $ 6,170 $ -- $ -- $ 6,170
Other income 375 -- 97 472
Interest expense 1,439 -- -- 1,439
Depreciation 1,601 -- -- 1,601
General and administrative
expense -- -- 344 344
Equity in loss of joint
venture -- -- (2) (2)
Income from discontinued
operation -- 171 -- 171
Segment profit (loss) 138 171 (249) 60
Total assets 13,091 1,111 1,015 15,217
Capital expenditures for
investment properties 1,537 80 -- 1,617
</TABLE>
Note L - Legal Proceedings
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs named as defendants, among others,
the Partnership, the Managing General Partner and several of their affiliated
partnerships and corporate entities. The action purports to assert claims on
behalf of a class of limited partners and derivatively on behalf of a number of
limited partnerships (including the Partnership) which are named as nominal
defendants, challenging the acquisition by Insignia Financial Group, Inc.
("Insignia") and entities which were, at one time, affiliates of Insignia
("Insignia Affiliates") of interests in certain general partner entities, past
tender offers by Insignia Affiliates to acquire limited partnership units, the
management of partnerships by Insignia Affiliates and the Insignia Merger (see
"Note B - Transfer of Control"). The plaintiffs seek monetary damages and
equitable relief, including judicial dissolution of the Partnership. On June 25,
1998, the Managing General Partner filed a motion seeking dismissal of the
action. In lieu of responding to the motion, the plaintiffs have filed an
amended complaint. The Managing General Partner filed demurrers to the amended
complaint which were heard February 1999. Pending the ruling on such demurrers,
settlement negotiations commenced. On November 2, 1999, the parties executed and
filed a Stipulation of Settlement, settling claims, subject to final court
approval, on behalf of the Partnership and all limited partners who own units as
of November 3, 1999. Preliminary approval of the settlement was obtained on
November 3, 1999 from the Superior Court of the State of California, County of
San Mateo, at which time the Court set a final approval hearing for December 10,
1999. Prior to the December 10, 1999 hearing the Court received various
objections to the settlement, including a challenge to the Court's preliminary
approval based upon the alleged lack of authority of class plaintiffs' counsel
to enter the settlement. On December 14, 1999, the Managing General Partner and
its affiliates terminated the proposed settlement. Certain plaintiffs have filed
a motion to disqualify some of the plaintiffs' counsel in the action. The
Managing General Partner does not anticipate that costs associated with this
case will be material to the Partnership's overall operations.
The Partnership is unaware of any other pending or outstanding litigation that
is not of a routine nature arising in the ordinary course of business.
Note M - Change in Accounting Principle
Effective January 1, 1999, the Partnership changed its method of accounting to
capitalize the cost of exterior painting and major landscaping on a prospective
basis. The Partnership believes that this accounting principle change is
preferable because it provides a better matching of expenses with the related
benefit of the expenditures and it is consistent with industry practice and the
policies of the Managing General Partner. The effect of the change in 1999 was
to increase net income by approximately $182,000 ($1.80 per limited partnership
unit). The cumulative effect, had this change been applied to prior periods, is
not material. The accounting principle change will not have an effect on cash
flow, funds available for distribution or fees payable to the Managing General
Partner and affiliates.
<PAGE>
Note N - Discontinued Operation
In March 2000, Atlanta Crossing Shopping center, located in Montgomery, Alabama,
was sold to an unaffiliated party for $2,875,000. After payment of closing
expenses, the net sales proceeds received by the Partnership were approximately
$2,746,000. For financial statement purposes, the sale resulted in a gain of
approximately $2,060,000, which was recognized in the first quarter of 2000. The
sale transaction is summarized as follows (amounts in thousands):
Net sales price, net of selling costs $ 2,746
Net real estate (1) (419)
Net other assets (267)
Gain on sale of real estate $ 2,060
(1) Real estate at cost, net of accumulated depreciation of approximately
$4,905,000.
Atlanta Crossing Shopping Center was the only commercial property owned by the
Partnership and represented one segment of the Partnership's operations. Due to
the sale of this property, the net assets of this property have been classified
as "Investment in discontinued operation" as of December 31, 1999, on the
balance sheet. The investment in discontinued operation on the balance sheet as
of December 31, 1999 includes the investment property and the remaining
receivables and payables of Atlanta Crossing Shopping Center. The results of the
commercial segment have been shown as income from discontinued operation on the
statement of operations. Revenues of this property were approximately $563,000
and $803,000 for 1999 and 1998, respectively. Income from operations was
approximately $111,000 and $171,000 for 1999 and 1998, respectively.
Item 8. Changes in and Disagreements with Accountant on Accounting and Financial
Disclosure
None.
<PAGE>
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
with Section 16(a) of the Exchange Act
The names of the directors and executive officers of Angeles Realty Corporation
II ("ARC II" or Managing General Partner), the Managing General Partner of
Angeles Income Properties, Ltd. II (the "Partnership" or "Registrant") as of
December 31, 1999, their ages and the nature of all positions with ARC II
presently held by them are as follows:
Name Age Position
Patrick J. Foye 42 Executive Vice President and Director
Martha L. Long 40 Senior Vice President and Controller
Patrick J. Foye has been Executive Vice President and Director of the Managing
General Partner since October 1, 1998. Mr. Foye has served as Executive Vice
President of AIMCO since May 1998. Prior to joining AIMCO, Mr. Foye was a
partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP from 1989 to
1998 and was Managing Partner of the firm's Brussels, Budapest and Moscow
offices from 1992 through 1994. Mr. Foye is also Deputy Chairman of the Long
Island Power Authority and serves as a member of the New York State
Privatization Council. He received a B.A. from Fordham College and a J.D. from
Fordham University Law School.
Martha L. Long has been Senior Vice President and Controller of the Managing
General Partner and AIMCO since October 1998, as a result of the acquisition of
Insignia Financial Group, Inc. From June 1994 until January 1997, she was the
Controller for Insignia, and was promoted to Senior Vice President - Finance and
Controller in January 1997, retaining that title until October 1998. From 1988
to June 1994, Ms. Long was Senior Vice President and Controller for The First
Savings Bank, FSB in Greenville, South Carolina.
Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to
the Registrant under Rule 16a-3(e) during the Registrant's most recent fiscal
year and Form 5 and amendments thereto furnished to the Registrant with respect
to its most recent fiscal year, the Registrant is not aware of any director,
officer, beneficial owner of more than ten percent of the units of limited
partnership interest in the Registrant that failed to file on a timely basis, as
disclosed in the above Forms, reports required by Section 16(a) of the Exchange
Act during the most recent fiscal year or prior fiscal years.
Item 10. Executive Compensation
No remuneration was paid by the Partnership to any officer or director of the
Managing General Partner during the year ended December 31, 1999.
<PAGE>
Item 11. Security Ownership of Certain Beneficial Owners and Management
Except as noted below, no person or entity was known by the Registrant to be the
beneficial owner of more than 5% of the Limited Partnership Units of the
Registrant as of December 31, 1999.
Entity Number of Units Percentage
Cooper River Properties, LLC
(an affiliate of AIMCO) 5,864 5.877%
Insignia Properties LP
(an affiliate of AIMCO) 3,990 3.998%
Broad River Properties, LLC
(an affiliate of AIMCO) 8,908 8.927%
AIMCO Properties, LP
(an affiliate of AIMCO) 29,862 29.927%
Cooper River Properties, LLC, Insignia Properties LP, and Broad River
Properties, LLC are indirectly ultimately owned by AIMCO. Their business address
is 55 Beattie Place, Greenville, South Carolina 29602.
AIMCO Properties, LP is indirectly ultimately controlled by AIMCO. Its business
address is 2000 South Colorado Boulevard, Denver, Colorado 80222.
The Partnership knows of no contractual arrangements, the operation of the terms
of, which may at a subsequent date result in a change in control of the
Partnership, except for: Article 12.1 of the Agreement, which provide that upon
a vote of the limited partners holding more than 50% of the then outstanding
limited partnership units the general partners may be expelled from the
Partnership upon 90 days written notice. In the event that successor general
partners have been elected by limited partners holding more than 50% of the then
outstanding limited partnership Units and if said limited partners elect to
continue the business of the Partnership, the Partnership is required to pay in
cash to the expelled general partners an amount equal to the accrued and unpaid
management fee described in Article 10 of the Agreement and to purchase the
general partners' interest in the Partnership on the effective date of the
expulsion, which shall be an amount equal to the difference between the balance
of the general partners' capital account and the fair market value of the share
of distributable net proceeds to which the general partners would be entitled.
Such determination of the fair market value of the share of distributable net
proceeds is defined in Article 12.2(b) of the Agreement.
<PAGE>
Item 12. Certain Relationships and Related Transactions
The Partnership has no employees and is dependent on the Managing General
Partner and its affiliates for the management and administration of all
Partnership activities. The Partnership Agreement provides for certain payments
to affiliates for services and reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership. The following payments were paid or
accrued to the Managing General Partner and affiliates during the years ended
December 31, 1999 and 1998:
1999 1998
(in thousands)
Property management fees $ 339 $ 350
Partnership management fees (1) 228 45
Reimbursement for services of affiliates 262 264
(1) The Partnership Agreement provides for a fee equal to 10% of "net cash
flow from operations", as defined in the Partnership Agreement to be paid
to the Managing General Partner for executive and administrative
management services.
During the years ended December 31, 1999 and 1998, affiliates of the Managing
General Partner were entitled to receive 5% of gross receipts from all of the
Registrant's residential properties for providing property management services.
The Registrant paid to such affiliates approximately $339,000 and $327,000 for
the years ended December 31, 1999 and 1998, respectively. During the nine months
ending September 30, 1998, affiliates of the Managing General Partner were
entitled to varying percentages of gross receipts from the Registrant's
commercial property for providing property management services. These services
were performed by affiliates of the Managing General Partner during the nine
months ending September 30, 1998 and were approximately $23,000. Effective
October 1, 1998 (the effective date of the Insignia Merger), these services for
the commercial property were provided by an unrelated party.
An affiliate of the Managing General Partner received reimbursement of
accountable administrative expenses amounting to approximately $262,000 and
$264,000 for the years ended December 31, 1999 and 1998, respectively, including
approximately $132,000 and $90,000, respectively, in construction oversight
costs
Additionally, the Partnership paid approximately $57,000 during the year ended
December 31, 1998 to an affiliate of the Managing General Partner for lease
commissions at the Partnership's commercial property. These lease commissions
are included in investment in discontinued operations and are amortized over the
terms of the respective leases.
Angeles Mortgage Investment Trust, ("AMIT"), a real estate investment trust,
provided financing to the Princeton Meadows Golf Course Joint Venture ("Joint
Venture") (see "Part II. Item 7. Financial Statements, Note G - Investment in
Joint Venture"). Pursuant to a series of transactions, affiliates of the
Managing General Partner acquired ownership interests in AMIT. On September 17,
1998, AMIT was merged with and into IPT, the entity which controlled the
Managing General Partner.
<PAGE>
Effective February 26, 1999, IPT was merged into AIMCO. As a result, AIMCO
became the holder of the AMIT loan. On February 26, 1999, Princeton Meadows Golf
Course was sold to an unaffiliated third party. Upon closing, the AMIT principal
balance of $1,567,000 plus accrued interest of approximately $17,000 was paid
off.
Several tender offers were made by various parties, including affiliates of the
Managing General Partner, during the years ended December 31, 1999 and 1998. As
a result of these tender offers, AIMCO and its affiliates currently own 48,624
limited partnership units in the Partnership representing 48.729% of the
outstanding units. It is possible that AIMCO or its affiliates will make one or
more additional offers to acquire additional limited partnership interests in
the Partnership for cash or in exchange for units in the operating partnership
of AIMCO. Consequently, AIMCO is in a position to significantly influence all
voting decisions with respect to the Registrant. Under the Partnership
Agreement, unitholders holding a majority of the Units are entitled to take
action with respect to a variety of matters. When voting on matters, AIMCO would
in all likelihood vote the Units it acquired in a manner favorable to the
interest of the Managing General Partner because of their affiliation with the
Managing General Partner.
<PAGE>
PART IV
Item 13. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit 18, Independent Accountants' Preferability Letter for Change
in Accounting Principle, is filed as an exhibit to this report.
Exhibit 27, Financial Data Schedule, is filed as an exhibit to this
report.
(b) Reports on Form 8-K filed in the fourth quarter of calendar year 1999:
None.
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ANGELES INCOME PROPERTIES, LTD. II
By: Angeles Realty Corporation II
Managing General Partner
By: /s/Patrick J. Foye
Patrick J. Foye
Executive Vice President
By: /s/Martha L. Long
Martha L. Long
Senior Vice President
and Controller
Date:
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities on the date
indicated.
/s/Patrick J. Foye Executive Vice President Date:
Patrick J. Foye and Director
/s/Martha L. Long Senior Vice President Date:
Martha L. Long and Controller
<PAGE>
ANGELES INCOME PROPERTIES, LTD. II
EXHIBIT INDEX
Exhibit Number Description of Exhibit
2.1 Agreement and Plan of Merger, dated as of October 1, 1998, by and between
AIMCO and IPT incorporated by reference to Exhibit 2.1 filed with
Registrant's Current Report on Form 8-K dated October 1, 1998.
3.1 Amendment Agreement of Limited Partnership of the Partnership dated October
12, 1982 filed in Form 10K dated November 30, 1983, incorporated herein by
reference
3.2 Amended Agreement of Limited Partnership of the Partnership dated March 31,
1983 filed in the Prospectus, of the Partnership, as Exhibit A, dated March
31, 1983 incorporated herein by reference
10.1 Agreement of Purchase and of Real Property with Exhibits - Executive Plaza
filed in Form 8K dated September 27, 1983, incorporated herein by reference
10.2 Agreement of Purchase and Sale of Real Property with Exhibits - Atlanta
Crossing Shopping Center filed in Form 8K dated September 27, 1983,
incorporated herein by reference
10.3 Agreement of Purchase and Sale of Real Property with Exhibits - Deer Creek
Apartments filed in Form 8K dated September 28, 1983, incorporated herein
by reference
10.4 Agreement of Purchase and Sale of Real Property with Exhibits - Georgetown
Apartments filed in Form 8K dated November 21, 1983, incorporated herein by
reference
10.5 Agreement of Purchase and Sale of Real Property with Exhibits - Landmark
Apartments filed in Form 8K dated December 16, 1983, incorporated herein by
reference
10.6 Multifamily Note - Deer Creek Apartments, dated June 11, 1986 filed in Form
10K dated February 25, 1987, incorporated herein by reference.
10.7 Multifamily Note - Georgetown Apartments, dated June 16, 1985, incorporated
herein by reference
10.8 Additional Financing - Deer Creek Apartments, dated September 22, 1987.
Funded November 1988 filed in Form 10K dated March 29, 1989, incorporated
herein by reference
10.9 Additional Financing - Georgetown Apartments, dated September 22, 1989,
incorporated herein by reference
10.10Purchase and Sale Agreement with Exhibits - dated July 26, 1991 between
Princeton Golf Course Joint Venture and Lincoln Property Company No. 199
filed in Form 10-K dated March 27, 1992, incorporated herein by reference
10.11Princeton Golf Course Joint Venture Agreement with Exhibits - dated August
21, 1991 between the Partnership, Angeles Partners XI and Angeles Partners
XII filed in Form 10-K dated March 27, 1992, incorporated herein by
reference
10.12Stock Purchase Agreement dated November 24, 1992 showing the purchase of
100% of the outstanding stock of Angeles Realty Corporation II, a
subsidiary of MAE GP Corporation, filed in Form 8-K dated December 31,
1993, which is incorporated herein by reference
10.13Deed in Lieu of Foreclosure between Executive Plaza, L.P. and Capshaw
Investment Company, L.L.C. dated March 20, 1995, incorporated herein by
reference
10.14Multifamily Note - Deercreek Apartments between Angeles Income Properties,
Ltd. II and Lehman Brothers Holdings, Inc. d/b/a Lehman Capital, a division
of Lehman Brothers Holdings, Inc. dated November 1, 1996
10.15Multifamily Note - Landmark Apartments between Angeles Income Properties,
Ltd. II and Lehman Brothers Holdings, Inc. d/b/a Lehman Capital, a division
of Lehman Brothers Holdings, Inc. dated November 1, 1996
10.16Purchase and Sale Contract between Registrant and Atlanta Crossing,
L.L.C., an Alabama limited liability company, dated October 25, 1999, is
incorporated by reference to the Annual Report on Form 10-KSB for the year
ended December 31, 1999.
10.17Amendment to Purchase and Sale Contract between Registrant and Atlanta
Crossing, L.L.C., dated February 7, 2000, is incorporated by reference to
the Annual Report on Form 10-KSB for the year ended December 31, 1999.
10.18Second Amendment to Purchase and Sale Contract between Registrant and
Atlanta Crossing, L.L.C., dated March 8, 2000, is incorporated by reference
to the Annual Report on Form 10-KSB for the year ended December 31, 1999.
16 Letter from the Registrant's former accountant regarding its concurrence
with the statements made by the registrant is incorporated by reference to
the Exhibit filed with Form 8-K dated September 1, 1993
18 Independent Accountants' Preferability Letter for Change in Accounting
Principle.
27 Financial Data Schedule.
<PAGE>
Exhibit 18
February 7, 2000
Mr. Patrick J. Foye
Executive Vice President
Angeles Realty Corporation II
Managing General Partner of Angeles Income Properties, Ltd. II
55 Beattie Place
P.O. Box 1089
Greenville, South Carolina 29602
Dear Mr. Foye:
Note M of Notes to the Consolidated Financial Statements of Angeles Income
Properties, Ltd. II included in its Form 10-KSB for the year ended December 31,
1999 describes a change in the method of accounting to capitalize exterior
painting and major landscaping, which would have been expensed under the old
policy. You have advised us that you believe that the change is to a preferable
method in your circumstances because it provides a better matching of expenses
with the related benefit of the expenditures and is consistent with policies
currently being used by your industry and conforms to the policies of the
Managing General Partner.
There are no authoritative criteria for determining a preferable method based on
the particular circumstances; however, we conclude that the change in the method
of accounting for exterior painting and major landscaping is to an acceptable
alternative method which, based on your business judgment to make this change
for the reasons cited above, is preferable in your circumstances.
Very truly yours,
/s/Ernst & Young LLP
<PAGE>
Exhibit 10.16
PURCHASE AND SALE CONTRACT
BY AND BETWEEN
Angeles Income Properties, Ltd. II
AS SELLER
AND
Atlanta Crossing L.L.C.
AS PURCHASER
Atlanta Crossing Shopping Center
Montgomery, Alabama
<PAGE>
PURCHASE AND SALE CONTRACT
THIS PURCHASE AND SALE CONTRACT ("Purchase Contract") is entered into as
of October 25, 1999 (the "Effective Date") by and between ANGELES INCOME
PROPERTIES, LTD. II, a California limited partnership, having a principal
address at c/o AIMCO, 1873 Bellaire Street, Suite 1700, Denver, Colorado 80222
("Seller") and ATLANTA CROSSING L.L.C., an Alabama limited liability company,
having a principal address at 2828 W. Edgemont Avenue, Montgomery, AL 36101
("Purchaser").
NOW, THEREFORE WITNESSETH: that for and in consideration of mutual
covenants and agreements herein after set forth, Seller and Purchaser hereby
agree as follows:
RECITALS
R-1...Seller holds fee title to a portion, and leasehold title to the remaining
portion of the real estate more particularly described in Exhibit A attached
hereto and made a part hereof located in the Montgomery, Alabama on which
improvements have been constructed.
R-2...The aforementioned leasehold interests were created pursuant to the
following documents:
(A) that Agreement of Lease dated as of August 29, 1997 by and between
Wylie P. Johnson, Landlord, and Angeles Income Properties, Ltd. II, Tenant,
recorded in the Office of the Judge of Probate of Montgomery County, Alabama in
Real Property Book 1853, Page 394; and
(B) that Assignment of Lease dated September 26, 1983, executed by East
Commerce Development, Inc. and East Commerce Development Company, recorded in
the Office of Judge of Probate of Montgomery County, Alabama in Real Property
Book 630, Page 870, and corrected in Real Property Book, 643, Page 515,
assigning interests created under that Agreement of Lease dated September 24,
1974, by and between Frances E. Raoul, Landlord, and East Commerce Development,
Inc., Tenant, recorded in the Office of the Judge of Probate of Montgomery
County, Alabama in Real Property Book 247, Page 157, as amended, including, but
not limited to, the amendments created by the following documents: (i) that
Agreement of Sublease dated March 1, 1976, by and between East Commerce
Development, Inc., Tenant, and East Commerce Development Company, Subtenant,
recorded in the Office of the Judge of Probate of Montgomery County, Alabama in
Real Property Book 304, Page 962; (ii) that Amendment to Agreement of Lease
dated November 21, 1979, by and between Frances E. Raoul, Landlord, and East
Commerce Development, Inc., Tenant, recorded in the Office of the Judge of
Probate of Montgomery County, Alabama in Real Property Book 468, Page 852; (iii)
that Second Amendment to Agreement of Lease dated January 10, 1980, by and
between Frances E. Raoul, Landlord, and East Commerce Development, Inc., Tenant,
recorded in the Office of the Judge of Probate of Montgomery County, Alabama in
Real Property Book 471, Page 969; (iv) that Amendment to Agreement of Lease
dated January 10, 1980, by and between Frances E. Raoul, Landlord, East Commerce
Development, Inc., Tenant, and East Commerce Development Company, Subtenant,
recorded in Real Property Book 471, Page 975; (v) that Amendment to Agreement of
Lease dated May 20, 1981, by and between Frances E. Raoul, Landlord, and East
Commerce Development, Inc., Tenant, recorded in the Office of the Judge of
Probate of Montgomery County, Alabama in Real Property Book 546, page 410; and
(C) that Assignment of Lease dated September 26, 1983, executed by East
Commerce Development, Inc. and East Commerce Development Company, recorded in
the Office of Judge of Probate of Montgomery County, Alabama in Real Property
Book 630, Page 870, and corrected in Real Property Book, 643, Page 515,
assigning interests created under that Agreement of Lease dated September 24,
1974, by and between Robert L. Gunn and Stella E. Gunn, Landlord, and East
Commerce Development, Inc., Tenant, recorded in the Office of the Judge of
Probate of Montgomery County, Alabama in Real Property Book 247, Page 147, as
amended, including, but not limited to, the amendments created by the following
documents: (i) that Agreement of Sublease dated March 1, 1976, by and between
East Commerce Development, Inc., Tenant, and East Commerce Development Company,
Subtenant, recorded in the Office of the Judge of Probate of Montgomery County,
Alabama in Real Property Book 304, Page 948; (ii) that Amendment to Agreement of
Lease dated January 10, 1980 by and between Robert L. Gunn and wife, Stella E.
Gunn, Landlord, and East Commerce Development, Inc., Tenant, recorded in the
Office of the Judge of Probate of Montgomery County, Alabama in Real Property
Book 471, Page 961
Collectively, the above documents are referred to as the "Ground Leases."
R-3...Purchaser desires to purchase and Seller has agreed to sell such land,
improvements and certain associated property, defined below as the "Property",
on the terms and conditions set forth below (which terms and conditions shall
control in the event of any conflict with these Recitals), such that on the
Closing Date, as defined in this Purchase Contract, the Property will be
conveyed by limited warranty deed to Purchaser;
R-4...Purchaser has agreed to pay to Seller the Purchase Price for the Property,
and Seller has agreed to sell the Property to Purchaser on the terms and
conditions set forth below.
ARTICLE 1
DEFINED TERMS
1.1 Terms with initial capital letters in this Purchase Contract shall have
the meanings set forth in this Article 1 below.
1.1.1 "Business Day" means any day other than a Saturday or Sunday or
federal holiday or legal holiday in the State of Alabama.
1.1.2 "Closing" means the consummation of the purchase and sale and
related transactions contemplated by this Purchase Contract in
accordance with the terms and conditions of this Purchase Contract.
1.1.3 "Closing Date" means November 30, 1999 (or such earlier date as
Purchaser may designate in writing to Seller by at least 5 days'
advance Notice), subject, however, to Seller's express rights of
extension stated in this Purchase Contract, on which date the
Closing of the conveyance of the Property shall be held under the
terms and conditions of this Purchase Contract and on which date
full payment of the Purchase Price for the Property shall have been
paid to and received by Seller in immediately available U.S. funds.
1.1.4 "Commercial Lease(s)" means the interest of Seller in and to all
leases, subleases and other occupancy agreements (including any land
leases or ground leases not otherwise included within the defined
term "Ground Leases"), whether or not of record, which provide for
the use or occupancy of space or facilities on or relating to the
Property scheduled on Exhibit 1.1.4 attached hereto; provided,
however, that the term "Commercial Leases" (i) shall also include
any modifications to such leases after the Effective Date and any
new leases entered into after the Effective Date (subject to the
approval of Purchaser as provided in Section 6.1.5.1, which approval
shall not be unreasonably withheld or delayed), and (ii) shall
exclude any leases expiring or terminating pursuant to the terms and
conditions thereof or terminated by Seller prior to the Closing Date
upon default thereunder.
1.1.5 "Purchase Contract" means this Purchase and Sale Purchase Contract
by and between Seller and Purchaser.
1.1.6 "Effective Date" means the date first set forth above, being the
date in which Seller accepts this Purchase Contract by executing the
same.
1.1.7 "Fixtures and Tangible Personal Property" means all fixtures,
furniture, furnishings, fittings, equipment, machinery, apparatus,
appliances and other articles of personal property now located on
the Land or in the Improvements as of the date of this Purchase
Contract and used or usable in connection with any present or future
occupation or operation of all or any part of the Property. The term
"Fixtures and Tangible Personal Property" does not include (i)
equipment leased by Seller and the interest of Seller in any
equipment provided to the Property for use, but not owned or leased
by Seller, or (ii) property owned or leased by Tenants and guests,
employees or other persons furnishing goods or services to the
Property or (iii) property and equipment owned by Seller, which in
the ordinary course of business of the Property is not used
exclusively for the business, operation or management of the
Property or (iv) the property and equipment, if any, expressly
identified in Exhibit 1.1.7.
1.1.8 "Land" means all of that certain tract of land located in the County
of Montgomery, State of Alabama, commonly known as the Atlanta
Crossing Shopping Center, more particularly described in Exhibit A
attached hereto and made a part hereof and all rights, privileges
and appurtenances pertaining thereto.
1.1.9 "Property" means the Land and Improvements and all rights of Seller
relating to the Land and the Improvements, including without
limitation, any rights, title and interest of Seller, if any, in and
to (i) any strips and gores adjacent to the Land and any land lying
in the bed of any street, road, or avenue opened or proposed, in
front of or adjoining the Land, to the center line thereof; (ii) any
unpaid award for any taking by condemnation or any damage to the
Property by reason of a change of grade of any street or highway;
(iii) any easements, rights, privileges, and appurtenances belonging
or in any way appertaining to the Property; together with all
Fixtures and Tangible Personal Property, the right, if any and only
to the extent transferable (without consent being required or, if
consent shall be required, if the required consent shall have been
obtained), of Seller in and to Property Contracts, Commercial
Leases, Permits (other than Excluded Permits), Miscellaneous
Property Assets and Ground Leases.
1.1.10"Property Contracts" means all purchase orders, maintenance,
service, or utility contracts and similar contracts, which relate to
the ownership, maintenance, construction or repair and/or operation
of the Property scheduled on Exhibit 1.1.10 attached hereto, in any
event excluding Commercial Leases and excluding the Management
Contract.
1.1.11 "Improvements" means all buildings and improvements located on
the Land taken "as is".
1.1.12"Management Contract" means the management and leasing
arrangements, contractual or otherwise, between Seller and
Insignia/ESG relating to the management and operation of the
Property.
1.1.13"Miscellaneous Property Assets" means all contract rights, leases,
concessions, warranties, plans, drawings and other items of
intangible personal property relating to the ownership or operation
of the Property and owned by Seller which are located on the
Property and used in its operation, excluding, however, (i)
receivables, (ii) Property Contracts, (iii) Commercial Leases, (iv)
Permits, (v) cash or other funds, whether in petty cash or house
"banks," or on deposit in bank accounts or in transit for deposit,
(vi) refunds, rebates or other claims, or any interest thereon, for
periods or events occurring prior to the Closing Date, (vii) utility
and similar deposits, (viii) insurance or other prepaid items, (ix)
books and records, except to the extent that Seller receives a
credit on the Closing Statement for any such item, and (x) Ground
Leases.
1.1.14"Permits" means all licenses and permits granted by governmental
authorities having jurisdiction over the Property in respect of the
matter to which the applicable license or permit applies and owned
by Seller or used in or relating to the ownership, occupancy or
operation of the Property or any part thereof not subject to a
Commercial Lease other than those Permits which, under applicable
law, are nontransferable and such other Permits as may be designated
as Excluded Permits on Exhibit 1.1.14, if any, attached hereto.
1.1.15"Permitted Exceptions" means those exceptions or conditions
permitted to encumber the title to the Property in accordance with
the provisions of Section 4.1.
1.1.16 "Purchase Price" means the total consideration to be paid by
Purchaser to Seller for the purchase of the Property.
1.1.17 "Survey" shall have the meaning ascribed thereto in Section 4.10.
1.1.18 "Tenant" means any person or entity entitled to occupy any
portion of the Property under a Commercial Lease.
1.1.19 "Title Commitment" or "Title Commitments" shall have the meaning
ascribed thereto in Section 4.1.1.
1.1.20 "Title Insurer" shall have the meaning set forth in Section 4.1.1.
ARTICLE 2
PURCHASE AND SALE OF PROPERTY
2.1 Seller agrees to sell and convey the Property to Purchaser and Purchaser
agrees to purchase the Property from Seller, in accordance with the terms
and conditions set forth in this Purchase Contract.
ARTICLE 3
PURCHASE PRICE & DEPOSIT
3.1 The total purchase price ("Purchase Price") for the Property shall be
Three Million Three Hundred Thousand Dollars ($3,300,000.00) in cash,
which shall be paid by Purchaser, as follows:
3.1.1 On the Effective Date, Purchaser shall deliver to Fidelity National
Title Insurance Company, 700 Louisiana, Suite 2600, Houston, Texas
77002 ("Escrow Agent") a deposit in the sum of Fifty-Thousand
Dollars ($50,000.00) in cash, (such sum, together with any interest
or earnings thereon, being hereinafter collectively referred to and
held as the "Deposit"). Purchaser and Seller each approve the form
of Escrow Agreement attached as Exhibit B and Purchaser agrees to
sign the Escrow Agreement in such form and deliver a counterpart of
the same to the Escrow Agent along with the Deposit and a
counterpart of the same to Seller.
3.1.2 The Escrow Agent shall hold the Deposit and make delivery of the
Deposit to the party entitled thereto under the terms hereof. Escrow
Agent shall invest the Deposit in such interest-bearing bank
accounts, money market funds or accounts, bank certificates of
deposit or bank repurchase agreements as Escrow Agent, in its
discretion, deems suitable (provided that Escrow Agent shall invest
the Deposit as jointly directed by Seller and Purchaser should
Seller and Purchaser each in their respective sole discretion
determine to issue such joint investment instructions to the Escrow
Agent) and all interest and income thereon shall become part of the
Deposit and shall be remitted to the party entitled to the Deposit,
as set forth below.
3.1.3 If the sale of the Property is closed by the date fixed therefor (or
any extension date provided for by the mutual written consent of the
parties hereto, given or withheld in their respective sole
discretion), monies held as the Deposit shall be applied (and paid
over to the Seller) on the Date of Closing and the Deposit shall be
credited to the Purchase Price. If the sale of the Property is not
closed by the date fixed therefor (or any such extension date) owing
to failure of satisfaction of a condition precedent to Purchaser's
obligations, the Deposit shall be returned and refunded to
Purchaser, and neither party shall have any further liability
hereunder.
3.1.4.If the sale of the Property is not closed by the date fixed
therefor (or any such extension date) owing to failure of
performance by Seller, Purchaser shall be entitled to the remedies
set forth in ARTICLE 10 hereof. If the sale of the Property is not
closed by the date fixed therefor (or any such extension date) owing
to failure of performance by Purchaser, the Deposit shall be
forfeited by Purchaser and the sum thereof shall go to Seller
forthwith as liquidated damages for the lost opportunity costs and
transaction expenses incurred by Seller, as more fully set forth in
ARTICLE 10 below.
3.2 On the Closing Date, Purchaser shall pay Seller the amount of Three
Million Three Hundred Thousand Dollars ($3,300,000.00), subject to credit
and adjustment as provided herein, in cash or by wire-transfer of current
funds through escrow pursuant to wire instructions provided by Seller.
ARTICLE 4
TITLE
4.1 Purchaser agrees to accept title to the Land and Improvements, so long as
the same is insurable at ordinary rates, and any conveyance by limited
warranty deed pursuant to this Purchase Contract shall be subject only to
the following exceptions, all of which shall be deemed "Permitted
Exceptions", and Purchaser agrees to accept the deed and title subject
thereto:
4.1.1 All exceptions shown in the Title Commitment issued by Fidelity
National Title Insurance Company ("Title Insurer") on June 4, 1999,
as revised on August 24, 1999, File No. 191492 ("Title Committment")
(other than mechanics' liens arising out of work performed by or on
behalf of Seller prior to Closing, taxes due and payable in respect
of the period preceding Closing, and rights of parties in possession
other than those claiming under the Commercial Leases and the
Property Contracts as provided in Sections 4.1.2 and 4.1.3 hereof),
including without limitation, the leasehold right of first refusal
referenced in the Short Form Ground Sublease, between Seller as
Landlord and IHOP Properties, Inc. as Tenant, dated July 23, 1998,
recorded in the Office of the Judge of Probate of Montgomery County,
Alabama in Real Property Book 1889, Page 180, and the purchase
option and refusal option set forth in the Lease Agreement between
East Commerce Development Company as Lessor and Union Bank & Trust
Company as Lessee, dated January 4, 1977, recorded in the Office of
the Judge of Probate of Montgomery County, Alabama in Real Property
Book 356, Page 865, and any other exceptions noted on Exhibit B to
the form of Limited Warranty Deed set forth as Exhibit 5.2.1.1
attached hereto; and
4.1.2 The Ground Leases; and
4.1.3 All Commercial Leases; and
4.1.4 All Property Contracts (other than those contracts, if any, which
are identified for termination by Purchaser on Exhibit 4.1.4
attached hereto); and
4.1.5 Real estate taxes and other property taxes, special assessments and
installments thereof, to the extent not due and payable prior to the
Closing Date; and
4.1.6 Such exceptions and matters as the Title Insurer shall be willing to
omit as exceptions to coverage; and
4.1.7 The existence of an error in the legal description in Warranty Deed
dated September 26, 1983, recorded in the Office of the Judge of
Probate of Montgomery County, Alabama in Real Property Book 630,
Page 866, as re-recorded in the Office of the Judge of Probate of
Montgomery County, Alabama in Real Property Book 631, Page 838, as
corrected and again recorded in the Office of the Judge of Probate
of Montgomery County, Alabama in Real Property Book 643, Page 510 ,
whereby each of said deeds included the following: "thence North 820
43' 45" East along Dalphon Road a distance of 33.22 feet . . .",
wherein the correct distance indicated should have been 332.2 feet
rather than 33.22 feet.
4.1.8 Other defects and exceptions, if any, in addition to those
referenced in Sections 4.1.1, 4.1.2, 4.1.3, 4.1.4, 4.1.5, 4.1.6 and
4.1.7 which in the opinion of Purchaser do not materially and
adversely affect the condition of title to the Property and its use
as of the Effective Date.
4.2 The existence of other mortgages, liens, or encumbrances shall not be
objections to title, provided that properly executed instruments in
recordable form necessary to satisfy and remove the same of record are
delivered to the Purchaser at Closing or, in the alternative, with respect
to any mortgage or deed of trust liens, that payoff letters from the
holder of the mortgage or deed of trust liens shall have been delivered to
and accepted by the Title Insurer (sufficient to remove the same from, or
insure over the same in, any policy to be issued at Closing pursuant to
the Title Commitment), together in either case, with recording and/or
filing fees.
4.3 Unpaid liens for taxes, charges, and assessments shall not be objections
to title, but the amount thereof past due and payable plus interest and
penalties thereon shall be deducted from the Purchase Price to be paid for
the applicable Property hereunder and allowed to Purchaser, subject to the
provisions for apportionment of taxes and charges contained herein.
4.4 Unpaid franchise or business corporation taxes of any corporations in the
chain of title shall not be an objection to title, provided that the Title
Insurer agrees to insure against collection out of the Property or
otherwise against Purchaser or its affiliates, and provided further that
the Title Insurer agrees to either omit from, or insure over in, the
policy available to be issued at Closing pursuant to the Title Commitment
if Purchaser requests, such taxes as exceptions to coverage with respect
to any lender's mortgagee insurance policy.
4.5 If on the Closing Date there shall be conditional bills of sale or Uniform
Commercial Code financing statements that were filed on a day more than
Five (5) years prior to such Closing, and such financing statements have
not been extended by the filing of UCC-3 continuation statements within
the past Five (5) years prior to such Closing, such financing statements
shall not be deemed to be an objection to title.
4.6 If, on the Closing Date, the state of title is other than in accordance
with the Title Commitment and the requirements set forth in this Purchase
Contract or if any condition to be fulfilled by Seller shall not be
satisfied, Purchaser shall provide Seller with written Notice thereof at
such time, or such title objection or unfulfilled condition shall be
deemed waived by Purchaser (in which event, to the extent relating to the
state of title, the waived objection shall become an additional "Permitted
Exception" hereunder) and Purchaser and Seller shall proceed to consummate
the Closing on the Closing Date. If Purchaser timely gives Seller such
Notice, Seller, at its sole option and within Seven (7) calendar days
following receipt of such Notice, may elect to cure such objection or
unfulfilled condition no later than December 7, 1999. If Seller is able to
cure such title objection or condition, or if Seller is able to cause the
Title Insurer or other title insurance company to insure over the same by
the Closing Date or any postponed Closing Date, or if Purchaser waives
such objection or condition within such period for cure (in which event,
to the extent relating to the state of title, the waived objection shall
become an additional "Permitted Exception" hereunder), then the Closing
shall take place on or before December 7, 1999.
4.7 If Seller is unable or unwilling, in its sole discretion or opinion, to
eliminate such title objection or cause the Title Insurer or other title
insurance company to insure over such matter or satisfy such unfulfilled
condition, Seller shall give Purchaser written Notice thereof, and if
Purchaser does not waive such objection by written Notice delivered to
Seller and the Title Insurer on or before Seven (7) calendar days
following the date Seller gives such Notice, then this Purchase Contract
shall automatically terminate, in which event Purchaser shall release and
quitclaim all of Purchaser's right and interest in such Property to
Seller, and the parties hereto shall have no further obligations to each
other.
4.8 Seller covenants that it will not voluntarily create or cause any lien or
encumbrance (other than Commercial Leases and Property Contracts in the
ordinary course of business) to attach to the Property between the
Effective Date and the Closing Date; any such monetary lien or encumbrance
so attaching by voluntary act of Seller shall be discharged by the Seller
at or prior to Closing on the Closing Date or any postponed Closing Date.
Except as expressly provided above, Seller shall not be required to
undertake efforts to remove any other lien, encumbrance, security
interest, exception, objection or other matter, to make any expenditure of
money or institute litigation or any other judicial or administrative
proceeding, and Seller may elect not to discharge the same. If Purchaser
gives Seller Notice of objection to Seller's election not to discharge any
matter identified in this Section 4.8 not later than ten (10) days after
Seller shall so notify Purchaser that Seller does not elect to discharge
such matter, this Purchase Contract shall terminate and be of no further
force and effect, and Escrow Agent shall promptly return the Deposit to
Purchaser, but otherwise and in all other respects Purchaser shall be
deemed to have waived objections to the discharge of any matters
identified in this Section 4.8 and any such matters shall become a
Permitted Exception.
4.9 Anything to the contrary notwithstanding, Purchaser shall not have any
right to terminate this Purchase Contract or object to any lien,
encumbrance, exception or other matter that is a Permitted Exception or
that has been waived or deemed to have been waived by Purchaser.
4.10 As of the Effective Date, Purchaser, at its expense, may cause to be
prepared an American Land Title Association ("ATLA") ATLA/ACSM Land Title
Survey for the Property ("Survey") to be delivered to Purchaser and
Seller. The Survey (i) shall be prepared in accordance with and shall
comply with the minimum requirements of the ALTA; (ii) shall be in a form,
and shall be certified as of a date satisfactory to Title Insurer to
enable Title Insurer to delete standard survey exceptions from the title
insurance policy to be issued pursuant to the Title Commitments, except
for any Permitted Exceptions; (iii) shall specifically show all
improvements, recorded easements to the extent locatable, set back lines,
and such other matters shown as exceptions by the Title Commitments; (iv)
shall specifically show the right of way for all adjacent public streets;
(v) shall specifically disclose whether (and, if so, what part of) any of
the Property is in an area designated as requiring flood insurance under
applicable federal laws regulating lenders; (vi) shall contain a perimeter
legal description of the Property which may be used in the limited
warranty deed, showing the separate tracts held in fee and by leasehold
title (including the separate parcels subject to the Ground Leases); (vii)
shall be certified to Purchaser, Seller and Title Insurer as being true
and correct; (viii) shall certify that the legal description set forth
therein describes the same, and comprises all of, the real estate
comprising the Property to be purchased by Purchaser pursuant to the terms
of this Purchase Contract; and (ix) shall state that the property shown is
the same property described in the Warranty Deed dated September 26, 1983,
recorded in the Office of the Judge of Probate of Montgomery County,
Alabama in Real Property Book 630, Page 866, as re-recorded in the Office
of the Judge of Probate of Montgomery County, Alabama in Real Property
Book 631, Page 838, as corrected and again recorded in the Office of the
Judge of Probate of Montgomery County, Alabama in Real Property Book 643,
Page 510 . To the extent the perimeter legal description of the Property
contained in the Survey differs from the legal descriptions contained in
(i) the deed or deeds by which Seller took title to the Property, as
corrected to remedy the error described in Section 4.1.7 and which is
correctly set forth in the Title Commitment, and (ii) the Ground Leases,
the legal descriptions contained in the deed (or deeds) and Ground Leases
shall be used in the limited warranty deed delivered to Purchaser at
Closing, and the Survey legal shall be used in a quitclaim deed to the
Property executed by Seller which also shall be delivered to Purchaser at
Closing.
4.10.1Purchaser agrees to make payment in full of all costs of obtaining
the Survey required by this Purchase Contract on or before Closing
or termination of this Purchase Contract.
ARTICLE 5
CLOSING
5.1 Dates, Places Of Closing, Prorations, and Delinquent Rent.
5.1.1 The Closing shall take place on the Closing Date, in the offices of
the Title Insurer or its agent, Edward J. Azar, 260 Washington
Avenue, Montgomery, Alabama 36197, or such other place as the
parties shall mutually agree, at 11:00 a.m. Alabama Time on the
Closing Date, subject, however, to Seller's express rights of
extension stated in this Purchase Contract. The parties shall
conduct closing through an escrow, whereby Seller, Purchaser and its
attorneys need not be physically present at the Closing and may
deliver documents by overnight air courier or other means.
5.1.2 The Closing Date may be extended without penalty at the option of
Seller to a date not later than December 7, 1999, to satisfy a
condition to be satisfied by Seller, or such later date as is
mutually acceptable to Seller and Buyer.
5.1.3.All normal and customarily proratable items, including, without
limitation, Rents (as defined below), operating expenses, personal
property taxes, other operating expenses and fees, shall be prorated
as of the Closing Date, Seller being entitled to, or responsible
for, and charged or credited for, as the case may be, all of same
attributable to the period up to the Closing Date (and credited for
any amounts paid by Seller attributable to the period on or after
the Closing Date) and Purchaser being responsible for, and credited
or charged, as the case may be, for all of same attributable to the
period on and after the Closing Date; provided, however, that any
sums owing in respect of base rent under the Commercial Leases and
remaining more than 30 days past due and delinquent as of the
Closing Date ("Delinquent Rent") shall not be reflected in an
adjustment on the Closing Date but shall be collected and
apportioned as set forth in Section 5.1.5 below. All unapplied
deposits under Commercial Leases, if any, shall be transferred by
Seller to Purchaser at the Closing, and Purchaser shall assume all
liability for the same. Purchaser shall assume at Closing the
obligation to pay any accrued but unpaid tenant improvement
allowances and leasing commissions, together with any payments due
parties to other agreements affecting the Property which survive
Closing, to the extent such items are scheduled on Exhibit 1.1.4 or
are hereafter approved in writing by Purchaser. Any real estate ad
valorem or similar taxes for the Property, or any installment of
assessments payable in installments which installment is payable in
the year of Closing, shall be prorated to the date of Closing, based
upon actual days involved. The proration of real property taxes or
installments of assessments shall be based upon the assessed
valuation and tax rate figures for the year in which the Closing
occurs to the extent the same are available; provided, that in the
event that actual figures (whether for the assessed value of the
Property or for the tax rate) for the year of Closing are not
available at the Closing Date, the proration shall be made using
figures from the preceding year. For purposes of this Section
5.1.3., Section 5.1.4. and Section 5.1.5. the terms "Rent" and
"Rents" shall include, without limitation, base rents, additional
rents, tax payments, insurance payments, percentage rents, operating
expense escalations or payments, and common area maintenance charges
under the Commercial Leases. The provisions of this Section 5.1.3.
shall survive the Closing and shall apply during the Proration
Period (as defined below).
5.1.4.If any of the items subject to proration hereunder cannot be
prorated at the Closing because the information necessary to compute
such proration is unavailable or incomplete, or if a period-end
reconciliation is required under the relevant Commercial Lease or
Ground Lease, or if any errors or omissions in computing prorations
at the Closing are discovered subsequent to the Closing, or if any
real estate ad valorem or similar taxes for the Property are
reevaluated subsequent to the Closing, then such item shall be
reapportioned and such errors, omissions and/or reevaluations
corrected as soon as practicable after the Closing Date and the
proper party reimbursed, which obligation shall survive the Closing
for a period from the Closing Date until October 1, 2000 (the
"Proration Period"). Neither party hereto shall have the right to
require a recomputation of a Closing proration or a correction of an
error or omission in a Closing proration unless within the Proration
Period one of the parties hereto (i) has obtained the previously
unavailable information, has completed the required reconciliation
under the relevant Commercial Lease, or has discovered the error or
omission, and (ii) has given Notice thereof to the other party
together with a copy of its good faith recomputation of the
proration and copies of all substantiating information used in such
recomputation. In connection with the reconciliations subsequent to
the Closing Date with respect to any annual, quarter-annual, monthly
or other period during which the Closing shall occur, Seller shall
provide Purchaser with tenant reconciliation information, including
applicable invoices, receipts and other documentation backing up the
tenant charges with respect to the period prior to the Closing Date,
and Purchaser shall share with Seller similar information with
respect to the period on and after the Closing Date; and Seller and
Purchaser agree to cooperate in good faith in the computation,
billing and collection and/or adjustments associated with such
reconciliations.
5.1.5.If on the Closing Date any Tenant is more than 30 days past due and
delinquent in any base rent payment under any Commercial Lease (the
"Delinquent Rent"), any Delinquent Rent received by Purchaser and
Seller from such Tenant after the Closing shall be applied to
amounts due and payable by such Tenant during the following periods
in the following order of priority: (i) first, to the period of time
after the Closing Date, and (ii) second, to the period of time
before the Closing Date. If Delinquent Rent or any portion thereof
received by Seller or Purchaser after the Closing are due and
payable to the other party by reason of this allocation, the
appropriate sum, less a proportionate share of any reasonable
attorneys' fees and costs and expenses expended in connection with
the collection thereof, shall be promptly paid to the other party.
After the Closing, Seller shall continue to have the right, but not
the obligation, in its own name, to demand payment of and to collect
Delinquent Rent owed to Seller by any Tenant, which right shall
include, without limitation, the right to continue or commence legal
actions or proceedings against any Tenant (provided, that Seller
shall not commence any legal actions or proceedings against any
Tenant which continues as a Tenant at the Property after Closing
without the prior consent of Purchaser, which will not be
unreasonably withheld or delayed), and the delivery of the
Assignment as defined in Section 5.2.1.3 shall not constitute a
waiver by Seller of such right. Purchaser agrees to cooperate with
Seller at no cost or liability to Purchaser in connection with all
efforts by Seller to collect such Delinquent Rent and to take
reasonable steps, whether before or after the Closing Date, as may
be necessary to carry out the intention of the foregoing, including,
without limitation, the delivery to Seller, upon demand, of any
relevant books and records (including, without limitation, rent
statements, receipted bills and copies of tenant checks used in
payment of such rent), the execution of any and all consents or
other documents, and the undertaking of any act reasonably necessary
for the collection of such Delinquent Rent by Seller; provided,
however, that Purchaser's obligation to cooperate with Seller
pursuant to this sentence shall not obligate Purchaser to terminate
any Commercial Lease with an existing Tenant or evict any existing
Tenant from the Property. The provisions of this Section 5.1.5.
shall survive the Closing and shall apply during the Proration
Period.
5.1.6 All Ground Rents (as defined below) under the Ground Leases shall be
prorated as of the Closing Date, Seller being responsible for, and
charged or credited for, as the case may be, all of the same
attributable to the period up to the Closing Date (and credited for
any amounts paid by Seller attributable to the period on or after
the Closing Date) and Purchaser being responsible for, and credited
or charged, as the case may be, for all of same attributable to the
period on and after the Closing Date (and charged for any amounts
paid by Seller attributable to the period on or after the Closing
Date). All of Seller's rights and interest in deposits under the
Ground Leases, if any, shall be transferred by Seller to Purchaser
at the Closing, and Purchaser shall be charged for the same at
Closing. For the purposes of this Section 5.1.5, the terms "Ground
Rent" and "Ground Rents" shall include, without limitation, base
rents, additional rents, tax payments, percentage rents, operating
expense escalations or payments, and common area maintenance charges
under the Ground Leases. The provisions of this Section 5.1.5 shall
survive the Closing and shall apply during the Proration Period.
5.1.7 Purchaser shall pay all premiums, charges and costs associated with
the Title Commitment and the Survey. In the event Purchaser elects
to have a Standard Owner's Policy Title Policy (1992 ALTA Form B)
issued for the Property in an amount equal to the Purchase Price
("Title Policy"), then Seller shall pay at Closing one-half (1/2) of
the cost of the Title Policy and Purchaser shall pay the balance of
the cost of the Title Policy, including the costs of extended
coverage, endorsements or affirmative insurance.
5.1.8 Purchaser and Seller shall split the escrow fee charged by the
Escrow Agent incidental to the Closing, but otherwise Purchaser
shall pay all recording fees, stamp taxes, deed taxes, intangibles
taxes, documentary fees and other assessments, if any, attendant
upon the transfer of the Property, including any fees associated
with closing services described in Section 5.1.1.
5.2 Items To Be Delivered Prior To Or At Closing.
5.2.1 Seller. At Closing, Seller shall deliver to Purchaser, each of the
following items, as applicable:
5.2.1.1 Limited warranty deed, with assignment of Ground Leases
(the "Limited Warranty Deed" or "Deed" or "deed"), in the
form attached as Exhibit 5.2.1.1 to Purchaser. The
acceptance of the deed at Closing shall be deemed to be
full performance of, and discharge of, every agreement and
obligation on Seller's part to be performed under this
Purchase Contract, except for those that this Purchase
Contract specifically provides shall survive Closing.
5.2.1.2 A Bill of Sale in the form attached as Exhibit 5.2.1.2,
covering Fixtures and Tangible Personal Property required
to be transferred to Purchaser with respect to such
Property. Purchaser shall countersign the same so as to
effect an assumption by Purchaser of liability therefor.
5.2.1.3 An Assignment (to the extent assignable without required
consents) without recourse or warranty in the form attached
as Exhibit 5.2.1.3, of Seller's right, title and interest,
if any, in and to the Permits (other than Excluded
Permits), the Miscellaneous Property Assets the Property
Contracts (except those excluded as listed on Exhibit
5.2.4) and the Commercial Leases, Permits (other than
Excluded Permits). Purchaser shall countersign the same so
as to effect an assumption by Purchaser of obligations
thereunder and liability therefor.
5.2.1.4 A closing statement executed by Seller.
5.2.1.5 A vendor's affidavit or at Seller's option an indemnity, as
applicable, in the customary form reasonably acceptable to
Seller to enable Title Insurer to delete the standard
exceptions for mechanic liens relating to work performed by
or on behalf of Seller prior to Closing and for rights of
parties in possession, other than under the Commercial
Leases and the Property Contracts (except those excluded as
listed on Exhibit 4.1.4); provided that such affidavit does
not subject Seller to any greater liability, or impose any
additional obligations, other than as set forth in this
Purchase Contract.
5.2.1.6 A certification of Seller's non-foreign status pursuant to
Section 1445 of the Internal Revenue Code of 1986, as
amended, in the form attached as Exhibit 5.2.1.6.
5.2.1.7 Tenant Estoppel Certificates, in substantially the form
attached as Exhibit 5.2.1.7, from (i) seventy-five percent
(75%) of the total number of Tenants under the Commercial
Leases, and (ii) all Tenants under the Commercial Leases
leasing five thousand (5,000) square feet of space or more,
such certificates to be dated no earlier than thirty (30)
days prior to the Effective Date; provided, however, that
in the event that Seller fails to obtain any Tenant
Estoppel Certificates as provided herein, in lieu thereof
Seller shall deliver to Purchaser at Closing an affidavit
in substantially the form of Exhibit 5.2.1.7, certifying
the accuracy of the information contained in such Tenant
Estoppel Certificates not received from Tenants of the
Property.
5.2.1.8 The Commercial Leases of the Property.
5.2.1.9 The Property Contracts (excepting those excluded as listed
on Exhibit 4.1.4) pertaining to the Property.
5.2.1.10 A certificate of Seller certifying the accuracy of a rent
roll updating the information set forth on Exhibit 1.1.4,
further certifying that the Commercial Leases and those
Property Contracts delivered to Purchaser at Closing are
true and complete, and further certifying that there have
been no material and adverse changes to the Commercial
Leases or those Property Contracts delivered to Purchaser
at Closing since the Effective Date, either voluntarily
made or expressly consented to by Seller, unless with the
written consent of Purchaser (excluding, in any event, the
exercise of any rights pursuant to the terms of the
Commercial Leases or those Property Contracts, including,
without limitation, rights of termination, extension, etc.,
which shall be permissible without the written consent of
Purchaser).
5.2.1.11 Evidence of termination of the Management Contract.
5.2.1.12 Such other instruments, documents or certificates, if any,
as are required to be delivered by Seller to Purchaser in
accordance with any other provision of this Purchase
Contract.
5.2.2 Purchaser. At Closing, Purchaser shall deliver to Seller the following
items:
5.2.2.1 The full Purchase Price as required by ARTICLE 3 hereof
plus or minus the adjustments or prorations required by
this Purchase Contract. If at Closing there are any liens
or encumbrances on the Property that Seller is obligated or
elects to pay and discharge, Seller may use any portion of
the Purchase Price for the Property(s) to satisfy the same
out of the escrow at Closing, provided that Seller shall
have delivered such instruments in recordable form
sufficient to satisfy such liens and encumbrances of record
(or, as to any mortgages or deeds of trust, appropriate
payoff letters as shall be sufficient to satisfy the
reasonable requirements of the Title Insurer for deletion
or affirmative insurance over the same in connection with
the issuance of any policy pursuant to the Title
Commitment), together with the cost of recording or filing
such instruments. The existence of any such liens or
encumbrances shall not be deemed objections to title if
Seller shall comply with the foregoing requirements.
5.2.2.2 A closing statement executed by Purchaser.
5.2.2.3 A countersigned counterpart of the Bill of Sale in the form
attached as Exhibit 5.2.1.2.
5.2.2.4 A countersigned counterpart of the Assignment in the form
attached as Exhibit 5.2.1.3.
5.2.2.5 A countersigned counterpart of the limited warranty deed,
with assignment of ground leases, in the form attached as
Exhibit 5.2.1.1.
5.2.2.6 Such other instruments, documents or certificates as are
required to be delivered by Purchaser to Seller in
accordance with any of the other provisions of this
Purchase Contract.
ARTICLE 6
REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER AND PURCHASER
6.1 Representations And Warranties Of Seller.
6.1.1 For the purpose of inducing Purchaser to enter into this Purchase
Contract and to consummate the sale and purchase of the Property in
accordance herewith, Seller represents and warrants to Purchaser the
following, subject (as appropriate) to the conditions set forth in
Section 8.2, as of the Effective Date:
6.1.1.1 Seller is lawfully and duly organized, and in good standing
under the laws of the state of its formation set forth in
the initial paragraph of this Purchase Contract; and has
the power and authority to sell and convey the Property and
will be empowered and authorized to execute the documents
to be executed by Seller at Closing, and has taken as of
the Effective Date or will have taken by the Closing Date,
as applicable, all corporate, partnership, limited
liability company or equivalent entity actions required for
the execution and delivery of this Purchase Contract, and
the consummation of the transactions contemplated by this
Purchase Contract. The compliance with or fulfillment of
the terms and conditions hereof will not conflict with, or
result in a breach of, the terms, conditions or provisions
of, or constitute a default under, any Purchase Contract to
which Seller is a party or by which Seller is otherwise
bound. Seller has not made any other Purchase Contract for
the sale of, or given any other person the right to
purchase, all or any part of any of the Property;
6.1.1.2 Seller owns insurable fee or leasehold title to the
Property, including all real property contained therein
required to be sold to Purchaser, subject only to the
Permitted Exceptions;
6.1.1.3 There are no adverse or other parties in possession of the
Property, except for occupants, guests and tenants under
the Commercial Leases and the Property Contracts or
otherwise as set forth in Exhibit 6.1.1.3;
6.1.1.4 Other than any consents, waivers and/or releases which may
be required in connection with the Ground Leases, the
joinder of no person or entity other than Seller is
necessary to convey the Property fully and completely to
Purchaser at Closing, or to fulfill Seller's obligations,
and Seller has all necessary right and authority to convey
and assign to Purchaser all contract rights and warranties
required to be conveyed and assigned to Purchaser
hereunder;
6.1.1.5 Purchaser has no duty to collect withholding taxes for
Seller pursuant to the Foreign Investors Real Property Tax
Act of 1980, as amended;
6.1.1.6 To Seller's knowledge, there are no actions, proceedings,
litigation or governmental investigations or condemnation
actions either pending or threatened against the Property
or against Seller which will, if successful, result in a
lien against the Property, as applicable;
6.1.1.7 To Seller's knowledge, there are no claims for labor
performed, materials furnished or services rendered in
connection with constructing, improving or repairing any of
the Property, as applicable, caused by Seller and which
remain unpaid beyond the date for which payment was due and
in respect of which liens may or could be filed against any
of the Property, as applicable;
6.1.1.8 To Seller's knowledge, the copies of the Commercial Leases
delivered to Purchaser on or about the Effective Date are
correct and complete copies thereof, and except as
expressly provided in such Commercial Leases or noted on
Exhibit 1.1.4, no such tenants are entitled to any unpaid
allowances for repairs or improvements and there are no
leasing commissions accrued or unpaid.
6.1.1.9 Seller has not dealt with any broker, finder or any other
person, in connection with the sale of or the negotiation
of the sale of the Property that might give rise to any
claim for commission against Purchaser or lien or claim
against the Property, except Broker (as such term is
defined in Section 8.1).
6.1.1.10 To Seller's knowledge, Seller has not received from any
governmental body having authority any written order,
citation or notice with regard to air emissions, water
discharges, noise emissions or Hazardous Substances (as
hereinafter defined). For purposes of this Section 6.1.1.10,
"Hazardous ---------------- Substances" shall mean "toxic
substances," "toxic materials," "hazardous waste,"
"hazardous substances," "pollutants," or "contaminants" as
those terms are defined in the Resource, Conservation and
Recovery Act of 1976, as amended (42 U.S.C.ss. 6901 et.
seq.), the Comprehensive Environmental Response -- ---
Compensation and Liability Act of 1980, as amended (42
U.S.C. ss. 9601 et. seq.), the Hazardous Materials
Transportation Act, -- --- as amended (49 U.S.C.ss.1801 et.
seq.), the Toxic Substances -- --- Control Act of 1976, as
amended (15 U.S.C.ss.2601 et. seq.), -- --- the Clean Air
Act, as amended (42 U.S.C.ss.1251 et. seq.) and -- --- any
other federal, state or local law, statute, ordinance, rule,
regulation or code relating to health, safety or the
environment; asbestos or asbestos-containing materials; lead
or lead-containing materials; oils; petroleum-derived
compounds; pesticides; or polychlorinated biphenyls.
6.1.1.11 To Seller's knowledge, Seller has received no written
notice of a violation of (or outstanding obligation
pertaining to) any zoning, building, health, fire,
environmental, safety or similar law or ordinance, order or
regulation, or of any certificate of occupancy issued or to
be issued for the Property, or written notice of violation
of any rights, ordinances, orders, regulations or
requirements affecting any portion of the Property.
6.1.2 Except for the representations and warranties expressly set forth
above in Section 6.1.1 or in the instruments delivered by Seller at
Closing pursuant to Section 5.2.1, the Property is expressly
purchased and sold "AS IS," "WHERE IS," and "WITH ALL FAULTS." The
Purchase Price and the terms and conditions set forth herein are the
result of arm's-length bargaining between entities familiar with
transactions of this kind, and said price, terms and conditions
reflect the fact that Purchaser shall have the benefit of, and is
relying upon, no information provided by Seller and no statements,
representations or warranties, express or implied, made by or
enforceable directly against Seller, including, without limitation,
any relating to the value of the Property, the physical or
environmental condition of the Property, the suitability of the
Property, compliance or lack of compliance of the Property with any
federal, state, county or local law, ordinance, order, permit, or
regulation, or any other attribute or matter of or relating to the
Property (other than any covenants of title contained in the deeds
conveying the Property and the representations set forth above).
Purchaser represents and warrants that as of the Closing Date, it
shall have reviewed and conducted such independent analyses,
studies, reports, investigations and inspections as they deem
appropriate in connection with the Property. If Seller provides or
has provided any documents, opinions or work product of consultants,
surveyors, architects, engineers, title companies, governmental
authorities or any other person or entity with respect to the
Property, Purchaser and Seller agree that Seller has done so or
shall do so only for the convenience of both parties, Purchaser
shall not rely thereon and the reliance by Purchaser upon any such
documents, opinions or work product shall not create or give rise to
any liability of or against Seller, Seller's partners or affiliates
or any of their respective partners, officers, directors,
participants, employees, contractors, attorneys, consultants,
representatives, agents, successors, assigns or
predecessors-in-interest. Except for the specific warranty of title
set forth in the deed delivered at Closing pursuant to Section
5.2.1.1, Purchaser shall rely only upon any title insurance obtained
by Purchaser with respect to title to the Property. Except for the
specific representations and warranties expressly set forth in
Section 6.1.1 or in the instruments delivered by Seller at Closing
pursuant to Section 5.2.1, Purchaser acknowledges and agrees that no
representation has been made and no responsibility is assumed by
Seller with respect to current and future applicable zoning or
building code requirements or the compliance of the Property with
any other laws, rules, ordinances or regulations, the financial
earning capacity or expense history of the Property, the
continuation of contracts, continued occupancy levels of the
Property, or any part thereof, or the continued occupancy by tenants
of any Commercial Leases or, without limiting any of the foregoing,
occupancy at Closing. Prior to Closing, Seller shall have the right,
but not the obligation, to enforce its rights against any and all
Property occupants, guests or tenants. Purchaser agrees that the
departure, prior to Closing, of any of such guests, occupants or
tenants shall not be the basis for, nor shall it give rise to, any
claim on the part of Purchaser, nor shall it affect the obligations
of Purchaser under this Purchase Contract in any manner whatsoever;
and Purchaser shall close title and accept delivery of the deed with
or without such tenants in possession and without any allowance or
reduction in the Purchase Price under this Purchase Contract.
Purchaser hereby releases Seller from any and all claims and
liabilities relating to the foregoing matters, except as provided in
Section 6.1.3 below.
6.1.3 Seller and Purchaser agree that those representations contained in
Section 6.1.1 shall survive Closing for a period of One (1) year
(that is, any proceeding based on the breach of a representation
contained in Section 6.1.1 that survives Closing must be commenced
within One (1) year subsequent to the date of such representation),
except for the representations contained in Sections 6.1.1.2,
6.1.1.3, 6.1.1.7 and 6.1.1.8, which shall not survive the Closing
but shall be merged into the deed, the assignment, the vendor's
affidavit or indemnity, and the Tenant Estoppel Certificates or
affidavit delivered at Closing pursuant to Sections 5.2.1.1,
5.2.1.3, 5.2.1.5, and 5.2.1.7. In the event that Seller breaches any
representation contained in Section 6.1.1 and Purchaser has
knowledge of such breach, however, Purchaser shall be deemed to have
waived any right of recovery and Seller shall not have any liability
in connection therewith.
6.1.4 Any statement contained in the representations and warranties in
this Section 6.1 and made to the "knowledge" of Seller shall mean
ONLY the actual knowledge of Seller based upon the information
communicated to Seller by a representative of the management company
managing the Property as of the date of this Purchase Contract, in a
certification addressed to Purchaser and Seller and dated as of the
Effective Date, a copy of which has been furnished to Purchaser on
or prior to the Effective Date; and otherwise any reference to the
"knowledge" of Seller shall not be deemed to imply any duty of
investigation or inquiry by Seller, and shall not be construed to
include the knowledge of any member, partner, officer, director,
agent, employee or representative of the Seller or any affiliate of
the Seller, imputed to Seller or constructively attributed to
Seller.
6.1.5 Covenants of Seller
6.1.5.1 Seller shall not, without the consent of Purchaser
(which consent will not be unreasonably withheld), enter
into any new commercial leases or property contracts
affecting the Property, or terminate or agree to
terminate any Commercial Leases. For purposes of this
Section 6.1.5.1, Purchaser's failure to respond to
Seller's written request for consent within five (5)
business days shall be deemed consent on the part of the
Purchaser. All new leases or contracts entered into in
accordance with the provisions of this Section 6.1.5.1
shall be deemed "Commercial Leases" and "Property
Contracts", respectively, as defined herein. Seller
shall provide Purchaser with copies of any Commercial
Leases and Property Contracts entered into or modified
after the Effective Date.
6.2 Representations And Warranties Of Purchaser
6.2.1 For the purpose of inducing Seller to enter into this Purchase
Contract and to consummate the sale and purchase of the Property in
accordance herewith, Purchaser represents and warrants to Seller the
following as of the Effective Date and as of the Closing Date:
6.2.2 With respect to Purchaser and its business, Purchaser represents and
warrants, in particular, that:
6.2.2.1 Atlanta Crossing L.L.C. is a limited liability company,
validly existing and in good standing under the laws of the
State of Alabama.
6.2.2.2 Purchaser, acting through any of its duly empowered and
authorized officers, partners, managers or members, has all
necessary power and authority to own and use its properties
and to transact the business in which it is engaged, and
has full power and authority to enter into this Purchase
Contract and will be empowered and authorized, to execute
and deliver the documents and instruments required of
Purchaser herein, and to perform its obligations hereunder;
and no consent of any other party or person is required to
so empower or authorize Purchaser.
6.2.2.3 No pending or, to the knowledge of Purchaser, threatened
litigation exists which if determined adversely would
restrain the consummation of the transactions contemplated
by this Purchase Contract or would declare illegal, invalid
or non-binding any of Purchaser's obligations or covenants
to Seller.
6.2.2.4 Purchaser is duly authorized to execute and deliver, acting
through its duly empowered and authorized officers,
managers, partners and members, respectively, and perform
this Purchase Contract and all documents and instruments
and transactions contemplated hereby or incidental hereto,
and such execution, delivery and performance by Purchaser
do not (i) violate any of the provisions of its respective
certificates of incorporation, bylaws, partnership
agreements or articles of association, (ii) violate any
provision of any law, governmental rule or regulation
currently in effect, (iii) violate any judgment, decree,
writ, injunction, award, determination or order currently
in effect that name or is specifically directed at one or
both Purchaser or its property, and (iv) require the
consent, approval, order or authorization of, or any filing
with or notice to, any court or other governmental
authority.
6.2.2.5 The joinder of no person or entity other than Purchaser is
necessary to consummate the transactions to be performed by
Purchaser and Purchaser has all necessary right and
authority to perform such acts as are required and
contemplated by this Purchase Contract.
6.2.3 Purchaser has not dealt with any broker, finder or any other person,
in connection with the purchase of or the negotiation of the
purchase of the Property that might give rise to any claim for
commission against Seller or lien or claim against the Property,
except Broker (as such term is defined in Section 8.1).
ARTICLE 7
CONDITIONS PRECEDENT TO CLOSING
7.1 Purchaser's obligation to close under this Purchase Contract, shall be
subject to and conditioned upon the fulfillment of each and all of the
following conditions precedent:
7.1.1 All of the documents required to be delivered by Seller to Purchaser
at Closing pursuant to the terms and conditions hereof shall have
been delivered and shall be in form and substance reasonably
satisfactory to Purchaser;
7.1.2Each of the representations and warranties of Seller contained herein
shall be true in all material respects as of the Closing Date;
7.1.3 Seller shall have complied with, fulfilled and performed in all
material respects each of the covenants, terms and conditions to be
complied with, fulfilled or performed by Seller hereunder;
7.1.4 Purchaser shall have received, within seven (7) days prior to the
Closing Date, pursuant to Section 5.2.1.7, Tenant Estoppel
Certificates in substantially the form set forth in Exhibit 5.2.1.7
(subject to modifications included by the Tenants or modifications
consistent with the requirements of the Commercial Leases) from
Tenants of the Property, or in lieu thereof with respect to any
Tenant for which a Tenant Estoppel Certificate shall not be so
delivered, the affidavit of Seller described in Section 5.2.1.7, to
be delivered on the Closing Date.
7.1.5 Seller shall have obtained any necessary consents or approvals
required under the Ground Leases to convey the Property.
7.1.6 Notwithstanding anything to the contrary, there are no other
conditions on Purchaser's obligation to Close except as expressly
set forth in this Purchase Contract.
7.2 Without limiting any of the rights of Seller elsewhere provided for in
this Purchase Contract, Seller's obligation to close with respect to
conveyance of the Property under this Purchase Contract shall be subject
to and conditioned upon the fulfillment of each and all of the following
conditions precedent:
7.2.1 Purchaser's representations and warranties set forth in this
Purchase Contract shall have been true and correct in all material
respects when made, and shall be true and correct in all material
respects as of the Closing Date as though such representations and
warranties were made at and as of such date and time.
7.2.2 Purchaser shall have fully performed and complied with all
covenants, conditions, and other obligations in this Purchase
Contract to be performed or complied with by them at or prior to
Closing including, without limitation, payment in full of the
Purchase Price.
7.2.4 Purchaser shall have produced evidence reasonably satisfactory to
Seller of Purchaser's compliance with Hart-Scott-Rodino Act
requirements or of the non-applicability thereof to the transactions
contemplated by this Purchase Contract.
7.2.4 Seller shall have obtained any necessary consents or approvals
required under the Ground Leases to convey the Property.
7.2.5 Prior to the Closing Date, Seller shall have obtained, at no cost to
or obligation of the parties, from the lessee (or its successors or
assigns), under the Lease Agreement between East Commerce
Development Company, Lessor, and Union Bank & Trust Company, Lessee,
dated January 4, 1977, recorded in the Office of the Judge of
Probate of Montgomery County, Alabama in Real Property Book 356,
Page 865, a written waiver and/or release of any purchase option or
right of first refusal of such lessee affecting the Property.
7.2.6 Prior to the Closing Date, Seller shall have obtained, at no cost to
or obligations of the parties, the waiver and/or release of any
other option to purchase or right of first refusal granted under any
Commercial Lease. It is expressed understood by the parties that the
rights of Purchaser to purchase the Property and any obligations of
Seller to sell the Property are subject to the waiver and/or release
of any and all prior and paramount rights and interests under the
Commercial Lease.
ARTICLE 8
BROKERAGE
8.1 Seller represents and warrants to Purchaser that it has dealt only
Pinnacle Realty ("Broker") in connection with this Purchase Contract.
Seller and Purchaser each represent and warrant to the other that other
than Pinnacle Realty, they have not dealt with or utilized the services of
any other real estate broker, sales person or finder in connection with
this Purchase Contract, and each party agrees to indemnify the other party
from and against all claims for brokerage commissions and finder's fees
arising from or attributable to the acts of omissions of the indemnifying
party.
8.2 Seller agrees to pay Broker a commission according to the terms of a
separate agreement. Broker shall not be deemed a party or third party
beneficiary of this Purchase Contract.
8.3 Broker assumes no responsibility for the condition of the Property or
representation for the performance of this Purchase Contract by Seller or
Purchaser.
ARTICLE 9
POSSESSION
9.1 Possession of the Property, subject to the Permitted Exceptions shall be
delivered to Purchaser at the Closing.
ARTICLE 10
DEFAULTS AND REMEDIES
10.1 In the event Purchaser terminates this Purchase Contract for any reason
other than failure of an express condition to Purchaser' obligations to
close herein or Seller's inability to convey title as required by this
Purchase Contract, or in the event Purchaser otherwise defaults hereunder
prior to the Closing Date, and consummation of the Closing does not occur
by reason of such termination or default by Purchaser, Seller and
Purchaser agree that it would be impractical and extremely difficult to
estimate the damages which Seller may suffer. Therefore, Seller and
Purchaser hereby agree that, the reasonable estimate of the total net
detriment that Seller would suffer in the event that Purchaser terminates
this Purchase Contract or defaults hereunder prior to the Closing Date is
and shall be, as Seller's sole remedy (whether at law or in equity), the
right to receive from the Escrow Agent and retain the full amount of the
Deposit. The payment and performance of the above as liquidated damages is
not intended as a forfeiture or penalty within the meaning of applicable
law and is intended to settle all issues and questions about the amount of
damages suffered by Seller in the applicable event, irrespective of the
time when the inquiry about such damages may take place. Upon any such
failure by Purchaser hereunder, this Purchase Contract shall be
terminated, and neither the Seller nor the Purchaser shall have any
further rights or obligations hereunder to each other and Seller shall
have the right to collect the Deposit.
10.2 Provided that Purchaser has not terminated this Purchase Contract and is
not otherwise in default hereunder, if the Closing does not occur as a
result of Seller's default hereunder, Purchaser's sole remedy shall be to
elect to terminate this Purchase Contract and receive reimbursement of the
Deposit (or so much thereof as has been received by Escrow Agent) or to
enforce specific performance of this Purchase Contract (along with
recovery, by the prevailing party, of its attorneys' fees and court
costs).
ARTICLE 11
RISK OF LOSS OR CASUALTY
11.1 The risk of loss or damage to the Property by fire or other casualty until
the date of Closing is assumed by Seller, provided that Seller's
responsibility shall be only to the extent of any recovery from insurance
now carried on the Property. If any of the Improvements shall be destroyed
or damaged prior to the Closing, and the estimated cost of repair or
replacement (as reasonably estimated by an independent contractor selected
by Seller) exceeds Three Hundred and Thirty Thousand and No/100 Dollars
($330,000.00), Purchaser may, by Notice given to Seller within five (5)
days after receipt of Notice from Seller of such damage or destruction,
elect to terminate this Purchase Contract, in which event the Deposit
shall immediately be returned by Escrow Agent to Purchaser and except as
expressly provided herein, the rights, duties, obligations, and
liabilities of the parties hereunder shall immediately terminate and be of
no further force or effect. If Purchaser does not elect to terminate this
Purchase Contract pursuant to this Section 11.1, or have no right to
terminate this Purchase Contract (because the estimated cost of repairing
or replacing the damage or destruction does not exceed $330,000.00), and
the sale of the Property is consummated, Purchaser shall be entitled to
receive all insurance proceeds paid or payable to Seller by reason of such
destruction or damage under the insurance policies carried by Seller (less
amounts of insurance theretofore received and applied by Seller to
restoration); provided that in the event the insurance proceeds, if any,
shall be insufficient to defray the estimated cost of repairing or
replacing the damage or destruction, then the amount of the insufficiency
may be claimed by Purchaser, by Notice of such claim given to Seller prior
to Closing, as an additional adjustment at Closing pursuant to Section
5.1.3 above, unless Seller elects, at its sole option, by so advising
Purchaser in writing at or prior to the Closing, to terminate this
Purchase Contract, in which event the Deposit shall be returned to
Purchaser and except as expressly provided herein, the rights, duties,
obligations and liabilities of the parties hereunder shall immediately
terminate and be of no further force and effect. If the amount of said
casualty proceeds is not settled by the date of Closing, Seller shall
execute at Closing all proofs of loss, assignments of claim, and other
similar instruments to ensure that Purchaser shall receive all of Seller's
right, title, and interest in and under said insurance proceeds. Seller
shall not, in any event, be obligated to effect any repair, replacement,
and/or restoration, but may do so at its option in which case Seller may
apply the insurance proceeds to the costs of restoration.
ARTICLE 12
RATIFICATION
12.1 This Purchase Contract shall be null and void unless signed by Purchaser
on or before October 19, 1999 and accepted by Seller on or before October
26, 1999.
ARTICLE 13
EMINENT DOMAIN
13.1 In the event that at the time of Closing all or any part of the Property
is (or has previously been) acquired, by authority of any governmental
agency in purchase in lieu thereof (or in the event that at such time
there are any pending proceedings for such acquisition by any such
governmental agency), Purchaser shall have the right, at Purchaser's
option, to terminate this Purchase Contract by giving written Notice
within Five (5) days after the Purchaser are notified in writing of the
occurrence of such event and recover the Deposit hereunder, or to settle
in accordance with the terms of this Purchase Contract for the full
Purchase Price and receive the full benefit or any condemnation award. It
is expressly agreed between the parties hereto that this paragraph shall
in no way apply to customary dedications for public purposes which may be
necessary for the development of the Property.
ARTICLE 14
MISCELLANEOUS
14.1 Exhibits And Schedules
All Exhibits and Schedules annexed hereto are a part of this
Purchase Contract for all purposes.
14.2 Assignability
This Purchase Contract and the interests of Purchaser herein shall
not be assignable without first obtaining the prior written approval
of Seller, except that Purchaser shall be permitted, without
Seller's consent but upon prior written notice to Seller, to assign
its interests hereunder to an entity owned and controlled by
Purchaser, or under common ownership and control with Purchaser,
provided that Purchaser delivers to Seller a copy of a written
assumption in favor of Seller, under which named Purchaser and
assignee shall both agree to be jointly and severally liable for all
duties and obligations of "Purchaser" under this Purchase Contract.
14.3 Binding Effect
This Purchase Contract shall be binding upon and inure to the
benefit of Seller and Purchaser, and its respective successors,
heirs and permitted assigns.
14.4 Captions
The captions, headings, and arrangements used in this Purchase
Contract are for convenience only and do not in any way affect,
limit, amplify, or modify the terms and provisions hereof.
14.5 Number And Gender Of Words
Whenever herein the singular number is used, the same shall include
the plural where appropriate, and words of any gender shall include
each other gender where appropriate.
14.6 Notices
All notices, demands, requests and other communications required
pursuant to the provisions of this Purchase Contract ("Notice")
shall be in writing and shall be deemed to have been properly given
or served for all purposes (i) if sent by Federal Express or other
nationally recognized overnight carrier for next business day
delivery, on the first business day following deposit of such Notice
with such carrier, or (ii) if personally delivered, on the actual
date of delivery, or (iii) if sent by certified mail, return receipt
requested postage prepaid, on the fifth (5th) business day following
the date of mailing addressed as follows:
If to Seller: If to Purchaser:
Angeles Income Properties, Ltd. II Atlanta Crossing L.L.C.
c/o AIMCO 2828 W. Edgemont Avenue (36108)
1873 South Bellaire Street P.O. Box 1148
Suite 1700 Montgomery, Alabama 36101-1148
Denver, Colorado 80222 Attention: Duncan Liles
Attention: Harry Alcock
and with a copy to:
David Marquette Jesse Williams, Esq.
Argent Real Estate Rushton, Stakely, Johnston &
1401 Brickell Avenue, Suite 520 Garrett, P.A.
Miami, Florida 33131 184 Commerce Street
Montgomery, Alabama 36104
with copies to:
Richard A. Cohn, Esq.
Bryan Cave LLP
700 Thirteenth Street, N.W.
Washington, D.C. 20005-3960
and
David M. Unseth, Esq.
Bryan Cave LLP
One Metropolitan Sq.
Suite 3600
St. Louis, Missouri 63102-2750
Any of the parties may designate a change of address by Notice in writing
to the other parties. Whenever in this Purchase Contract the giving of
Notice by mail or otherwise is required, the giving of such Notice may be
waived in writing by the person or persons entitled to receive such
Notice.
14.7 Governing Law And Venue
The laws of the State of Alabama shall govern the validity,
construction, enforcement, and interpretation of this Purchase
Contract, unless otherwise specified herein except for the conflict
of laws provisions thereof. All claims, disputes and other matters
in question arising out of or relating to this Purchase Contract, or
the breach thereof, shall be decided by proceedings instituted and
litigated in the United States District Court for the district in
which the Property is situated, and the parties hereto expressly
consent to the venue and jurisdiction of such court.
14.8 Entirety And Amendments
This Purchase Contract embodies the entire agreement between the
parties relating to the subject matter hereof and supersedes all
prior purchase contracts and understandings, if any, relating to the
Property, and may be amended or supplemented only by an instrument
in writing executed by all parties.
14.9 Severability
If any of the provisions of this Purchase Contract is held to be
illegal, invalid, or unenforceable under present or future laws,
such provision shall be fully severable. The Purchase Contract shall
be construed and enforced as if such illegal, invalid, or
unenforceable provision had never comprised a part of this Purchase
Contract; and the remaining provisions of this Purchase Contract
shall remain in full force and effect and shall not be affected by
the illegal, invalid, or unenforceable provision or by its severance
from this Purchase Contract.
14.10 Multiple Counterparts
This Purchase Contract may be fully executed in a number of
identical counterparts. If so fully executed, each of such
counterparts shall be deemed an original for all purposes and all
such counterparts shall, collectively, constitute one Purchase
Contract. In making proof of this Purchase Contract, it shall not be
necessary to produce or account for more than one such counterparts.
14.11 Further Acts
In addition to the acts and deeds recited herein and contemplated
and performed, executed and/or delivered by Seller and Purchaser,
Seller and Purchaser agree to perform, execute and/or deliver or
cause to be performed, executed and/or delivered any and all such
further acts, deeds, and assurances as may be necessary to
consummate the transactions contemplated hereby.
14.12 Construction
No provision of this Purchase Contract shall be construed in favor
of, or against, any particular party by reason of any presumption
with respect to the drafting of this Purchase Contract; both
parties, being represented by counsel, having fully participated in
the negotiation of this instrument.
14.13 Confidentiality
Purchaser shall not disclose the terms and conditions contained in
this Purchase Contract, shall keep the same confidential, provided
that Purchaser may disclose the terms and conditions of this
Purchase Contract (i) as required by law, (ii) to consummate the
terms of this Purchase Contract, or any financing relating thereto,
or (iii) to Purchaser's or Seller's lenders, attorneys and
accountants. Any information provided by Seller to Purchaser under
the terms of this Purchase Contract is for informational purposes
only. In providing such information to Purchaser, Seller makes no
representation or warranty, express, written, oral, statutory, or
implied, and all such representations and warranties are hereby
expressly excluded. Purchaser shall not in any way be entitled to
rely upon the accuracy of such information. Such information is also
confidential and Purchaser shall be prohibited from making such
information public to any other person or entity other than its
agents and legal representatives, without Seller's prior written
authorization, which may be granted or denied in Seller's sole
discretion. If this Purchase Contract is terminated prior to
Closing, Purchaser agrees to return to Seller within seven (7) days
all documents produced to Purchaser by Seller pertaining to the
ownership or operation of the Property including, without
limitation, the following: (1) Property Contracts; (2) Commercial
Leases; (3) architectural and engineering plans; (4) reports and
studies relating to the condition of the Property; (5) a list of
Fixtures and Tangible Personal Property; (6) tenant correspondence
files with respect to the Commercial Leases; (7) service and repair
requests and work orders relating to the Property; (8) a list of
accounts receivable; and (9) copies of governmental permits, alarm
registrations and other permits and licenses necessary for the
operation of the Property.
14.14 Time Of The Essence
It is expressly agreed by the parties hereto that time is of the
essence with respect to this Purchase Contract.
14.15 Cumulative Remedies And Waiver
Except as otherwise provided herein, no remedy herein conferred or
reserved is intended to be exclusive of any other available remedy
or remedies, but each and every such remedy shall be cumulative and
shall be in addition to every other remedy given under this Purchase
Contract or now or hereafter existing at law or in equity. No delay
or omission to exercise any right or power accruing upon any
default, omission, or failure of performance hereunder shall impair
any right or power or shall be construed to be a waiver thereof, but
any such right and power may be exercised from time to time and as
often as may be deemed expedient. No waiver, amendment, release, or
modification of this Purchase Contract shall be established by
conduct, custom, or course of dealing.
14.16 Litigation Expenses
In the event either party hereto commences litigation against the
other to enforce its rights hereunder, the prevailing party in such
litigation shall be entitled to recover from the other party its
reasonable attorneys' fees and expenses incidental to such
litigation.
14.17 Time Periods
Should the last day of a time period fall on a weekend or legal
holiday, the next Business Day thereafter shall be considered the
end of the time period.
14.18 Closing Costs
Purchaser and Seller agree to each pay their own attorneys fees and
closing costs.
14.19 Exchange
At Seller's sole cost and expense, Seller may structure the sale of
the Property to Purchaser as a Like Kind Exchange under Internal
Revenue Code Section 1031 whereby Seller will acquire certain
property (the "Like Kind Exchange Property") in conjunction with the
sale of the Property (the "Like Kind Exchange"). Purchaser shall
cooperate fully and promptly with Seller's conduct of the Like Kind
Exchange, provided that all costs and expenses associated with the
Like Kind Exchange shall be borne solely by Seller, and Purchaser
shall not be required to take title to or contract for the purchase
of any other property. If Seller uses a qualified intermediary to
effectuate the exchange, any assignment of the rights or obligations
of Seller hereunder shall not relieve, release or absolve Seller of
its obligations to Purchaser. In no event shall the Closing Date be
delayed by the Like Kind Exchange. Seller shall indemnify and hold
harmless Purchaser from and against any and all cost or liability
arising from and out of the Like Kind Exchange.
14.20 Access to Property
Purchaser shall have the right from time to time to enter onto the
Property solely for the purpose of viewing the improvements located
on the Property incidental to planning for Purchaser's occupancy of
the Property. Purchaser shall give Notice to Seller five (5)
business days prior to entry onto the Property and shall permit the
Seller to have a representative present during any inspection
conducted with the Property. In no event shall Purchaser conduct any
environmental assessment, testing or other invasive inspection of
the Property.
[The remainder of this page has been intentionally left blank.]
<PAGE>
NOW WHEREFORE, the parties hereto have executed this Purchase
Contract as of the date first set forth above.
SELLER:
ANGELES INCOME PROPERTIES, LTD. II,
a California limited partnership
By: ANGELES REALTY CORPORATION II,
a California corporation,
its Managing General Partner
By: Name: Title:
PURCHASER:
ATLANTA CROSSING L.L.C., an Alabama
limited liability company
By:
Name:
Title:
<PAGE>
EXHIBIT A
LEGAL DESCRIPTION
(Insert legal description from Title Commitment)
<PAGE>
EXHIBIT B
FORM OF ESCROW AGREEMENT
THIS ESCROW AGREEMENT ("Escrow Agreement") made this 25th day of October,1999 by
and among ANGELES INCOME PROPERTIES, LTD., II, a California limited partnership
("Seller"); ATLANTA CROSSING L.L.C., an Alabama limited liability company
("Purchaser"); and FIDELITY NATIONAL TITLE INSURANCE CO. ("Escrow Agent");
WITNESSETH:
Whereas Purchaser and Seller are parties to a certain Purchase and Sale
Contract (the "Purchase Contract") made and dated as of the 25th day of October,
1999; and
Whereas, the Purchase Contract requires that Purchaser provide a Deposit
in the amount of Fifty Thousand Dollars ($50,000.00) in cash to be held pursuant
to an escrow agreement approved by Purchaser and Seller.
Now, therefore, the parties agree to the following:
1. Establishment of Escrow. Escrow Agent hereby acknowledges receipt Fifty
Thousand Dollars ($50,000.00) in cash (the "Escrow Fund") pursuant to Section
3.1.1 of the Purchase Contract, to be deposited, held, invested, and disbursed
for the benefit of Seller and Purchaser and their respective successors and
assigns, as provided herein and as provided in the Purchase Contract.
2. Investment of Escrow Fund. All funds received by Escrow Agent shall be held
in insured accounts and invested in such money market funds or accounts,
interest bearing bank accounts, bank certificates of deposit or bank repurchase
agreements as Escrow Agent, in its discretion, deems suitable (provided that
Escrow Agent shall invest the Escrow Fund as jointly directed by Seller and
Purchaser should Seller and Purchaser each in their respective sole discretion
determine to issue such joint investment instructions to the Escrow Agent) and
all interest and income thereon shall become part of the Escrow Fund and shall
be remitted to the party entitled to the Escrow Fund, as set forth below.
3. Application of Escrow Fund. Escrow Agent shall hold the Escrow Fund as
provided above and (a) if the sale of the Property is closed by the date fixed
therefore (or any extension date provided for by mutual written consent of the
parties hereto, given or withheld in their respective sole discretion), Escrow
Agent shall deliver the Escrow Fund to Seller in immediately available funds by
wire transfer in accordance with the instructions of Seller on the Closing Date
as set forth in the Purchase Contract, (b) if the sale of the Property is not
closed by the date fixed therefor (or any such extension date) owing to failure
of satisfaction of a condition precedent to Purchaser's obligations, the Escrow
Agent shall return and refund the Escrow Fund to Purchaser, (c) if the sale of
the Property is not closed by the date fixed therefor (or any such extension
date) owing to failure of performance by Seller, Purchaser shall give Notice to
the Escrow Agent and Seller and in such Notice shall state whether Purchaser
elects as Purchaser's remedy return of the Escrow Fund or specific performance
of the Purchase Contract; if Purchaser elects return of the Escrow Fund, Escrow
Agent shall return and refund the Escrow Fund to Purchaser, and (d) if the sale
of the Property is not closed by the date fixed therefor (or any such extension
date) owing to failure of performance by Purchaser, Escrow Agent shall forthwith
deliver to Seller the Escrow Fund in immediately available funds by wire
transfer in accordance with the instructions of Seller.
If on or prior to the termination of the Escrow Agreement, the Seller or
the Purchaser claim to be entitled to payment of the Escrow Fund under the
provisions referred to, such party shall give Notice to the Escrow Agent and the
other party of the claim in writing, describing in such Notice the nature of the
claim, and the provisions of the Purchase Contract on which the claim is based.
Unless the other party sends the Escrow Agent a written objection to the claim,
with a copy concurrently to the claiming party, within Ten (10) days after
delivery of the Notice of claim, the claim shall be conclusively presumed to
have been approved. In such case, or in the event of mutual written consent of
the parties hereto, given or withheld in their respective sole discretion,
Escrow Agent shall, within Two (2) business days thereafter, pay the claim as
demanded. Notwithstanding the foregoing, Escrow Agent shall deliver the Escrow
Fund to Seller forthwith upon Closing in accordance with the terms of subpart
(a) of the immediately preceding paragraph.
When all monies held by Escrow Agent have been finally distributed in
accordance herewith, this Escrow Agreement shall terminate.
4. Liability. Escrow Agent will be obligated to perform only the duties that are
expressly set forth herein. In case of conflicting demands upon Escrow Agent, it
may (i) refuse to comply therewith as long as such disagreement continues and
make no delivery or other disposition of any funds or property then held (and
Escrow Agent shall not be or become liable in any way for such failure or
refusal to comply with such conflicting or adverse claims or demands, except for
its failure to exercise due care, willful breach and willful misconduct); and
(ii) continue to so refrain and so refuse to act until all differences have been
adjusted by agreement and, Escrow Agent has been notified thereof in writing
signed jointly by Seller and Purchaser or (iii) to interplead the portion of
Escrow Fund in dispute.
5. No Obligation to Take Legal Action. Escrow Agent shall not be under any
obligation to take any legal action in connection with this Escrow Agreement or
for its enforcement, or to appear in, prosecute, or defend any action or legal
proceeding which, in its opinion, would or might involve it in any costs,
expense, loss, or liability, unless and as often as required by it, it is
furnished with satisfactory security and indemnity against all such costs,
expenses, losses, or liabilities.
6. Status of Escrow Agent. Escrow Agent is to be considered and regarded as a
depository only, and shall not be responsible or liable (except for its failure
to exercise due care, willful breach or willful misconduct) for the sufficiency
or correctness as to form, manner of execution, or validity of any instrument
deposited pursuant to this Escrow Agreement, nor as to the identity, authority,
or rights of any person executing the same. Escrow Agent's duties hereunder
shall be limited to the safekeeping and investment of money, instruments, and
securities received by it as Escrow Agent and for their disbursement in
accordance with the written escrow instructions given it in accordance with this
Escrow Agreement.
7. Written Instructions of Parties. Notwithstanding any contrary provision
contained herein, Escrow Agent shall, at all times, have full right and
authority and the duty and obligation to pay over and disburse the principal,
interest and quitclaim deed of the Escrow Fund in accordance with the joint
written instructions signed by Seller and Purchaser.
8. Notices. Any required or permitted Notice or other communication under this
Escrow Agreement ("Notice") shall be given as follows. All Notices, requests,
demands and other communications hereunder shall be deemed to have been duly
given if the same shall be in writing and shall be delivered personally or sent
by Federal Express or other recognized national overnight courier service
maintaining records of delivery, or sent by registered or certified mail,
postage pre-paid, and addressed as set forth below:
If to Seller: If to Purchaser:
Angeles Income Properties, Ltd. II Atlanta Crossing L.L.C.
c/o AIMCO 2828 W. Edgemont Avenue (36108)
1873 South Bellaire Street P.O. Box 1148
Suite 1700 Montgomery, Alabama 36101-1148
Denver, Colorado 80222 Attention: Duncan Liles
Attention: Harry Alcock
and with a copy to:
David Marquette Jesse Williams, Esq.
Argent Real Estate Rushton, Stakely, Johnston & Garrett,
1401 Brickell Avenue, Suite 520 P.A.
Miami, Florida 33131 184 Commerce Street
Montgomery, Alabama 36104
with copies to:
Richard A. Cohn, Esq.
Bryan Cave LLP
700 Thirteenth Street, N.W.
Washington, D.C. 20005-3960
and
David M. Unseth, Esq.
Bryan Cave LLP
One Metropolitan Sq.
Suite 3600
St. Louis, Missouri 63102-2750
If to Escrow Agent:
Fidelity National Title Insurance Company
700 Louisiana, Suite 2600
Houston, TX 77002
Attention: Lolly Avant
Any party may change the address to which Notices are to be addressed by
giving the other parties Notice in the manner herein set forth. All such
Notices, requests, demands and other communications shall be deemed to have been
delivered (i) as of the day of receipt, in the case of personal delivery, or
(ii) as of the day of receipt or attempted delivery date in the case of delivery
by air courier, or (iii) as of the date of receipt or first attempted delivery,
as evidenced by the return receipt card, in the case of mailing by certified or
registered United States mail.
9. Fee. Escrow Agent shall receive a fee of Three Hundred Dollars ($300.00) for
its services hereunder, and be paid or reimbursed for all expenses,
disbursements and advances, including reasonable attorney's fees, incurred or
paid in connection with carrying out its duties hereunder, all amounts to be
payable by Purchaser and not out of the Escrow Fund. Non-payment of such fee by
Purchaser shall not entitle Escrow Agent to refuse or fail to act as required by
this Escrow Agreement.
10. Titles and Section Headings. Titles of sections and subsections contained in
this Escrow Agreement are inserted for convenience of reference only, and
neither form a part of this Escrow Agreement nor are to be used in its
construction or interpretation.
11. Counterparts. This Escrow Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
12. Non-Waiver. No waiver by either party of any breach of any term or condition
of this Escrow Agreement shall operate as a waiver of any other breach of such
term or condition or of any other term or condition. No failure to enforce such
provision shall operate as a waiver of such provision or of any other provision
hereof, or constitute or be deemed a waiver or release of any other party for
anything arising out of, connected with, or based upon this Escrow Agreement.
13. Binding Effect. This Escrow Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective transferees, successors, and
assigns. The parties recognize and acknowledge that the powers and authority
granted Escrow Agent herein are each irrevocable and coupled with an interest.
Escrow Agent shall have no liability to any Seller for any mistakes in judgment
in the performance of any function hereunder, except for failure to exercise due
care, willful breach and willful misconduct.
14. Nonlimitation of Liability. Nothing contained herein shall in any way limit
the liabilities, obligations and remedies of Seller and Purchaser as set forth
in the Purchase Contract.
15. Governing Law. This Escrow Agreement shall be governed by and construed in
accordance with the laws of the State of Alabama.
16. Time of Essence. Time is of the essence of this Escrow Agreement.
17. Entire Agreement; Modification. This Escrow Agreement supersedes all prior
agreements and constitutes the entire agreement with respect to the subject
matter hereof. It may not be altered or modified without the written consent of
all parties.
20. Joint and Several Liability. Aegis and Liles hereby agree that any and all
representations, warranties, covenants, agreements, duties and obligations of
Purchaser in this Purchase Agreement shall be binding upon Aegis and Liles
jointly and severally in all respects.
[The remainder of this page has been intentionally left blank.]
<PAGE>
In witness whereof each of the parties hereto have caused this Escrow
Agreement to be executed on its behalf by duly authorized persons, all as of the
day and year first above written.
SELLER:
ANGELES INCOME PROPERTIES, LTD. II,
a California limited partnership
By: ANGELES REALTY CORPORATION II,
a California corporation,
its Managing General Partner
By:
Name:
Title:
PURCHASER:
ATLANTA CROSSING L.L.C., an Alabama limited
liability company
By:
Name:
Title:
ESCROW AGENT:
FIDELITY NATIONAL TITLE INSURANCE CO.
By:
Name:
Title:
<PAGE>
EXHIBIT 1.1.4
SCHEDULE OF COMMERCIAL LEASES
<PAGE>
EXHIBIT 1.1.7
FIXTURES AND TANGIBLE PERSONAL PROPERTY
-NONE-
<PAGE>
EXHIBIT 1.1.10
PROPERTY CONTRACTS
<PAGE>
EXHIBIT 1.1.14
EXCLUDED PERMITS
-NONE-
<PAGE>
EXHIBIT 4.1.4
PROPERTY CONTRACTS IDENTIFIED FOR TERMINATION
<PAGE>
EXHIBIT 5.2.1.1
LIMITED WARRANTY DEED
(with Assignment of Ground Leases)
STATE OF )
) ss:
COUNTY OF )
THIS INDENTURE, Made the 25th day of October in the Year of Our Lord One
Thousand Nine Hundred and Ninety-Nine, between ANGELES INCOME PROPERTIES, LTD.
II, a California limited partnership, as party of the first part, hereinafter
called "Grantor," and ATLANTA CROSSING L.L.C., an Alabama limited liability
company, as part of the second part, hereinafter called "Grantee" (the words
"Grantor" and "Grantee" to include their respective successors and assigns where
the context requires or permits).
WITNESSETH that Grantor, for and in consideration of the sum of Ten
Dollars in hand paid, at and before the sealing and delivery of these presents,
the receipt of which is hereby acknowledged:
(a) by these presents does assign, transfer and set over, grant, bargain,
sell and convey unto Grantee all right, title and interest of Grantor in and to
that certain real estate located in the County of Montgomery, State of Alabama,
as more particularly described on Exhibit A attached hereto and made a part
hereof ("Tract A"), which right, title and interest were acquired by Grantor and
arose pursuant to that Agreement of Lease dated as of August 29, 1997 ("Ground
Lease A"), by and between Wylie P. Johnson, Landlord, and Angeles Income
Properties, Ltd. II, Tenant, recorded in the Office of the Judge of Probate of
Montgomery County, Alabama in Real Property Book 1853, Page 394;
(b) by these presents does assign, transfer and set over, grant, bargain,
sell and convey unto Grantee all right, title and interest of Grantor in and to
that certain real estate located in the County of Montgomery, State of Alabama,
as more particularly described on Exhibit B attached hereto and made a part
hereof ("Tract B1"), which right, title and interest were acquired by Grantor
pursuant to that Assignment of Lease dated September 26, 1983, executed by East
Commerce Development, Inc. and East Commerce Development Company, recorded in
the Office of Judge of Probate of Montgomery County, Alabama in Real Property
Book 630, Page 870, and corrected in Real Property Book, 643, Page 515,
assigning interests created under that Agreement of Lease dated September 24,
1974 ("Ground Lease B1"), by and between Frances E. Raoul, Landlord, and East
Commerce Development, Inc., Tenant, recorded in the Office of the Judge of
Probate of Montgomery County, Alabama in Real Property Book 247, Page 157, as
amended, including, but not limited to, the amendments effected by the following
documents: (i) that Agreement of Sublease dated March 1, 1976, by and between
East Commerce Development, Inc., Tenant, and East Commerce Development Company,
Subtenant, recorded in the Office of the Judge of Probate of Montgomery County,
Alabama in Real Property Book 304, Page 962; (ii) that Amendment to Agreement of
Lease dated November 21, 1979, by and between Frances E. Raoul, Landlord, and
East Commerce Development, Inc., Tenant, recorded in the Office of the Judge of
Probate of Montgomery County, Alabama in Real Property Book 468, Page 852; (iii)
that Second Amendment to Agreement of Lease dated January 10, 1980, by and
between Frances E. Raoul, Landlord, and East Commerce Development, Inc., Tenant,
recorded in the Office of the Judge of Probate of Montgomery County, Alabama in
Real Property Book 471, Page 969; (iv) that Amendment to Agreement of Lease
dated January 10, 1980, by and between Frances E. Raoul, Landlord, East Commerce
Development, Inc., Tenant, and East Commerce Development Company, Subtenant,
recorded in Real Property Book 471, Page 975; (v) that Amendment to Agreement of
Lease dated May 20, 1981, by and between Frances E. Raoul, Landlord, and East
Commerce Development, Inc., Tenant, recorded in the Office of the Judge of
Probate of Montgomery County, Alabama in Real Property Book 546, page 410; and
(c) by these presents does assign, transfer and set over, grant, bargain,
sell and convey unto Grantee all right, title and interest of Grantor in and to
that certain real estate located in the County of Montgomery, State of Alabama,
as more particularly described on Exhibit C attached hereto and made a part
hereof ("Tract B2"), which right, title and interest were acquired by Grantor
pursuant to that Assignment of Lease dated September 26, 1983, executed by East
Commerce Development, Inc. and East Commerce Development Company, recorded in
the Office of Judge of Probate of Montgomery County, Alabama in Real Property
Book 630, Page 870, and corrected in Real Property Book, 643, Page 518,
assigning interests created under that Agreement of Lease dated September 24,
1974 ("Ground Lease B2"), recorded in the Office of the Judge of Probate of
Montgomery County, Alabama in Real Property Book 247, Page 147, as amended,
including, but not limited to, the amendments effected by the following
documents: (i) that Agreement of Sublease dated March 1, 1976, by and between
East Commerce Development, Inc., Tenant, and East Commerce Development Company,
Subtenant, recorded in the Office of the Judge of Probate of Montgomery County,
Alabama in Real Property Book 304, Page 948; (ii) that Amendment to Agreement of
Lease dated January 10, 1980 by and between Robert L. Gunn and wife, Stella E.
Gunn, Landlord, and East Commerce Development, Inc., Tenant, recorded in the
Office of the Judge of Probate of Montgomery County, Alabama in Real Property
Book 471, Page 961; and
(d) by these presents does grant, bargain, sell and convey unto Grantee
certain real estate located in the County of Montgomery, State of Alabama, more
particularly described on Exhibit D attached hereto and made a part hereof
("Tract C");
SUBJECT TO the exceptions (the "Exceptions") more particularly described
in Exhibit E attached hereto and made a part hereof;
TO HAVE AND TO HOLD the leaseholds in Tract A, Tract B1 and Tract B2, with
all and singular rights, members and appurtenances thereof, to the same being,
belonging, or in anywise appertaining, to the only proper use, benefit and
behoof of the said Grantee, FOREVER; Grantor hereby covenanting that it will
warrant and forever defend the right, title and interest in and to Tract A,
Tract B1 and Tract B2 and under, respectively, Ground Lease A, Ground Lease B1,
as amended, and Ground Lease B2, as amended (Ground Lease A, Ground Lease B1, as
amended, and Ground Lease B2, as amended, being collectively referred to as the
"Ground Leases") unto Grantee against the claims of all persons owning, holding
or claiming by, through or under Grantor, but NONE OTHER, and NOT, in any event,
the EXCEPTIONS; and Grantee, by acceptance hereof, does hereby assume all terms
and covenants in the Ground Leases to be kept, preserved and performed by the
lessee therein and do hereby agree to indemnify and save Grantor harmless from
and against any and all claims, expenses, suits, demands or liabilities arising
under or in connection with the Ground Leases and accruing on or after the date
hereof.
TO HAVE AND TO HOLD Tract C, with all and singular rights, members and
appurtenances thereof, to the same being, belonging, or in anywise appertaining,
to the only proper use, benefit and behoof of said Grantee, in FEE SIMPLE
FOREVER; Grantor hereby covenanting that it will warrant and forever defend the
right and title to Tract C against the claims of all persons owning, holding or
claiming by, through or under Grantor, but NONE OTHER, and NOT, in any event,
the EXCEPTIONS.
IN WITNESS WHEREOF, the said Grantor has signed and sealed this deed, the
day and year above written.
Witnesses: GRANTOR:
ANGELES INCOME PROPERTIES, LTD. II,
a California limited partnership
By: ANGELES REALTY CORPORATION II,
a California corporation,
its Managing General Partner
By:
Name:
Title:
<PAGE>
STATE OF )
) ss:
COUNTY OF )
I, __________________________, a Notary public in and for said county in
said state, hereby certifies that ________________________, whose name as
_____________________ of Angeles Realty Corporation II, a California
corporation, as Managing General Partner of Angeles Income Properties, Ltd. II,
a California limited partnership, is signed to the foregoing conveyance, and who
is known to me, acknowledged before me on this day that, being informed of the
contents of the conveyance, he, as such officer and with full authority,
executed the same voluntarily for and as the act of said corporation, in its
capacity as Managing General Partner.
Given under my hand this _______ day of ______________, A.D. 19____.
Notary Public
(Notarial Stamp or Seal)
<PAGE>
EXHIBIT A TO LIMITED WARRANTY DEED
Legal Description of Tract A
<PAGE>
EXHIBIT B TO LIMITED WARRANTY DEED
Legal Description of Tract B1
<PAGE>
EXHIBIT C TO LIMITED WARRANTY DEED
Legal Description of Tract B2
<PAGE>
EXHIBIT D TO LIMITED WARRANTY DEED
Legal Description of Tract C
<PAGE>
EXHIBIT E TO LIMITED WARRANTY DEED
Permitted Encumbrances
1. General and personal property taxes not delinquent for the year 1999 and
all subsequent years.
2. Special taxes or assessments.
3. Unrecorded easements, discrepancies or conflicts in boundary lines,
shortage in area and encroachments which an accurate and complete survey
would disclose.
4. Rights of eminent domain, governmental rights of police power and other
governmental or quasi-governmental rights.
5. Rights of tenants in possession of the Property pursuant to unrecorded
leases, as tenants only.
6. Visible and apparent easements and all underground easements, if any, the
existence of which may arise by unrecorded grant or by use.
7. Present and future laws, ordinances, restrictions, resolutions, orders and
regulations and all present and future ordinances, laws, regulations and
orders of all federal, state, county, municipal or other governments,
agencies, boards, bureaus, commissions, authorities and bodies now or
hereafter having or acquiring jurisdiction of the Property and the use and
improvement thereof, including any restricting or regulating or prohibiting
the occupancy, use or enjoyment of the Property, or regulating the
character, dimensions or location of any improvement now or hereafter
erected on the Property, or prohibiting a separation in ownership or a
reduction in the dimensions or area of the Property, and the effect of any
violation of such law, ordinance or governmental regulation.
8. Easements to the Water Works and Sanitary Sewer Board of the City of
Montgomery recorded in the Office of the Judge of Probate of Montgomery
County, Alabama in Real Property Book 103, Pages 989, 994 and 997, as to
Tract B.
9. Easements to the Alabama Power Company recorded in the Office of the Judge
of Probate of Montgomery County, Alabama in Real Property Book 499, Page
697, Real Property Book 475, Page 934 and Real Property Book 499, Page
702, as to Tracts B and C.
10. Easement for storm drainage sewer to the City of Montgomery, Alabama
recorded in the Office of the Judge of Probate of Montgomery County,
Alabama in Real Property Book 534, Page 937, as to Tracts B and C.
11. Easement for sewer lines and water mains to the Water Works and Sanitary
Sewer Board of the City of Montgomery recorded in the Office of the Judge
of Probate of Montgomery County, Alabama in Real Property Book 540, Page
947, as to Tracts B and C.
12. Easements which appear on the map of East Commerce Development Plat No. 8,
recorded in the Office of the Judge of Probate of Montgomery County,
Alabama in Plat Book 27, Page 316, except Lot 2, Block D.
13. Easements as shown on the map of East Commerce Development Plat No. 7,
recorded in the Office of the Judge of Probate of Montgomery County,
Alabama in Plat Book 27, Page 297, as to Tract B, Parcels A and C (Lot 2,
Block D).
14. Lease between East Commerce Development Company, Inc. and Service
Merchandise Company, dated June 29, 1979 (unrecorded) and subsequent
Memorandum of Lease dated July 8, 1987 between Angeles Income Properties,
Ltd., as Landlord, and Service Merchandise Company, Inc., as Tenant,
recorded in the Office of the Judge of Probate of Montgomery County,
Alabama in Real Property Book 899, page 295, as to Tracts A and C.
15. Encroachment of Service Merchandise Store over the easements for storm
drainage and the easement for sanitary sewer which easements are shown on
the map of East Commerce Development Plat No. 8, recorded in the Office of
the Judge of Probate of Montgomery County, Alabama in Real Property Book
27, Page 316, as to Tracts A and C.
16. Terms, conditions and provisions contained in Agreement of Lease dated as
of August 29, 1997, between Wylie P. Johnson, as Landlord, and Angeles
Income Properties, Ltd. II, a California limited partnership, as Tenant,
recorded in the Office of the Judge of Probate of Montgomery County,
Alabama in Real Property Book 1853, page 394, as to Tract A.
17. Terms, conditions and provision contained in the following documents: (i)
Short Form Ground Sublease between Angeles Income Properties, Ltd., II, as
Landlord, and IHOP Properties, Inc., as Tenant, dated July 23, 1998,
recorded in the Office of the Judge of Probate of Montgomery County,
Alabama in Real Property Book 1889, Page 180, and (ii) Attornment and
Non-disturbance Agreement between Wylie P. Johnson and IHOP Properties,
Inc., dated July 28, 1998, recorded in the Office of the Judge of Probate
of Montgomery County, Alabama in Real Property Book 1889, Page 185, as to
Tract A.
18. Terms, conditions and provisions contained in the following documents: (i)
Agreement of Lease dated September 24, 1974, by and between Frances E.
Raoul, Landlord, and East Commerce Development, Inc., Tenant, recorded in
the Office of the Judge of Probate of Montgomery County, Alabama in Real
Property Book 247, Page 157; (ii) Agreement of Sublease dated March 1,
1976, by and between East Commerce Development, Inc., Tenant, and East
Commerce Development Company, Sub-tenant, recorded in the Office of the
Judge of Probate of Montgomery County, Alabama in Real Property Book 304,
Page 962; (iii) Amendment to Agreement of Lease dated November 21, 1979 by
and between Frances E. Raoul, Landlord, and East Commerce Development,
Inc., Tenant, recorded in the Office of the Judge of Probate of Montgomery
County, Alabama in Real Property Book 468, Page 852; (iv) Second Amendment
to Agreement of Lease dated January 10, 1980 by and between Frances E.
Raoul, Landlord, and East Commerce Development, Inc., Tenant, recorded in
the Office of the Judge of Probate of Montgomery County, Alabama in Real
Property Book 471, Page 969; (v) Amendment to Agreement of Lease dated
January 10, 1980 by and between Frances E. Raoul, Landlord, East Commerce
Development, Inc., Tenant, and East Commerce Development Company,
Subtenant, recorded in the Office of the Judge of Probate of Montgomery
County, Alabama in Real Property Book 471, Page 975; (vi) Amendment to
Agreement of Lease dated May 20, 1981 by and between Frances E. Raoul,
Landlord, and East Commerce Development, Inc., Tenant, recorded in the
Office of the Judge of Probate of Montgomery County, Alabama in Real
Property Book 546, page 410; (vii) Assignment of Lease dated September 26,
1983, executed by East Commerce Development, Inc. and East Commerce
Development Company, recorded in the Office of the Judge of Probate of
Montgomery County, Alabama in Real Property Book 630, Page 870, and
corrected in Real Property Book 643, Page 518, Tract B, Parcels A and B.
19. Lease Agreement by and between East Commerce Development Company, Lessor,
and Union Bank & Trust Company, Lessee, dated January 4, 1977, recorded in
the Office of the Judge of Probate of Montgomery County, Alabama in Real
Property Book 356, Page 865, as to a portion of Tract B, Parcels A and C.
20. Statement of Commencement of Ground Lease Term dated November 28, 1984 by
and between Angeles Income Properties, Ltd. II, Lessor, and Burger King
Corporation, Lessee, recorded in the Office of the Judge of Probate of
Montgomery County, Alabama in Real Property Book 715, Page 798, as to
Tract B, Parcel A.
21. Terms, conditions and provisions contained in the following documents: (i)
Agreement of Lease dated September 24, 1974, by and between Robert L. Gunn
and wife, Stella E. Gunn, Landlord, and East Commerce Development, Inc.,
Tenant, recorded in the Office of the Judge of Probate of Montgomery
County, Alabama in Real Property Book 247, Page 147; (ii) Agreement of
Sublease dated March 1, 1976 by and between East Commerce Development,
Inc., Tenant, and East Commerce Development Company, Sub-tenant, recorded
in the Office of the Judge of Probate of Montgomery County, Alabama in Real
Property Book 304, Page 948; (iii) Amendment to Agreement of Lease dated
January 10, 1980 by and between Robert L. Gunn and wife, Stella E. Gunn,
Landlord, and East Commerce Development, Inc., Tenant, recorded in the
Office of the Judge of Probate of Montgomery County, Alabama in Real
Property Book 471, Page 961; (iv) Assignment of Lease dated September 26,
1983, executed by East Commerce Development, Inc. and East Commerce
Development Company, recorded in the Office of the Judge of Probate of
Montgomery County, Alabama in Real Property Book 630, Page 870, and
corrected in Real Property Book, 643, Page 518, as to Tract B, Parcel C.
22. Terms, conditions and provisions contained in the following documents: (i)
Ground Lease from East Commerce Development Company, a general partnership,
to Albertson's Inc., dated March 6, 1979, recorded in the Office of the
Judge of Probate of Montgomery County, Alabama, in Real Property Book 447,
Page 311; (ii) First Amendment, dated March 7, 1979, recorded in the Office
of the Judge of Probate of Montgomery County, Alabama in Real Property Book
466, Page 181, relating to development and payment for development of
common areas of Union Square Shopping Center; (iii) an instrument, dated
August 2, 1979, recorded in the Office of the Judge of Probate of
Montgomery County, Alabama, in Real Property Book 456, Page 868, amending
the description attached to aforesaid Ground Lease; (iv) Second Amendment,
dated October 18, 1979, recorded in the Office of the Judge of Probate of
Montgomery County, Alabama in Real Property Book 466, Page 668; and (v) an
instrument, dated February 1, 1980, recorded in the Office of the Judge of
Probate of Montgomery County, Alabama in Real Property Book 476, Page 205,
assigning aforesaid Ground Lease to Spokmont Associated Limited
Partnership, a Connecticut limited partnership, as to Tract B, Parcels A
and B.
23. Error in legal description in Warranty Deed dated September 26, 1983,
recorded in the Office of the Judge of Probate of Montgomery County,
Alabama in Real Property Book 630, Page 866, as re-recorded in the Office
of the Judge of Probate of Montgomery County, Alabama in Real Property Book
631, Page 838, as corrected and again recorded in the Office of the Judge
of Probate of Montgomery County, Alabama in Real Property Book 643, Page
510 , whereby each of said deeds included the following: "thence North 820
43' 45" East along Dalphon Road a distance of 33.22 feet . . .", wherein
the correct distance indicated should have been 332.2 feet rather than
33.22 feet.
24. Other covenants, conditions, limitations, restrictions, rights,
rights-of-way, liens, encumbrances, encroachments, defects, reservations,
easements, agreements and other matters of record, if any.
<PAGE>
EXHIBIT 5.2.1.2
FORM OF BILL OF SALE
Dated: October 25, 1999.
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, ANGELES INCOME PROPERTIES, LTD. II, a California
limited partnership ("Seller"), in connection with the sale of certain real
property ("Property") located in the County of Montgomery, State of Alabama,
which is more particularly described on Exhibit "A" attached hereto and by this
reference incorporated herein, hereby quitclaim ATLANTA CROSSING L.L.C., an
Alabama limited liability company ("Purchaser"), without recourse or warranty to
Seller, all of Seller's right, title and interest in and to the personal
property more particularly described on Exhibit "B" hereto ("Personal Property")
used in, held for use in connection with, or necessary for the operation of the
Property as of the date hereof.
WITH RESPECT TO ALL MATTERS TRANSFERRED, WHETHER TANGIBLE OR
INTANGIBLE, PERSONAL OR REAL, SELLER EXPRESSLY DISCLAIMS A WARRANTY OF
MERCHANTABILITY AND WARRANTY FOR FITNESS FOR A PARTICULAR USE OR ANY OTHER
WARRANTY EXPRESSED OR IMPLIED THAT MAY ARISE BY OPERATION OF LAW OR UNDER THE
UNIFORM COMMERCIAL CODE FOR THE STATE IN WHICH THE PROPERTY IS LOCATED.
[The remainder of this page has intentionally been left blank]
<PAGE>
Purchaser hereby accepts the Personal Property on and subject to the
conditions and disclaimers above, and assume, jointly and severally, all
responsibility and liability for the Personal Property as of the date hereof.
SELLER:
ANGELES INCOME PROPERTIES, LTD. II,
a California limited partnership
By: ANGELES REALTY CORPORATION II,
a California corporation,
its Managing General Partner
By:
Name:
Title:
PURCHASER:
ATLANTA CROSSING L.L.C., an Alabama limited liability
company
By:
Name:
Title:
<PAGE>
EXHIBIT A TO BILL OF SALE
Legal Description of Real Property
<PAGE>
EXHIBIT B TO BILL OF SALE
Description of Personal Property
-None-
<PAGE>
EXHIBIT 5.2.1.3
FORM OF ASSIGNMENT
This Assignment ("Assignment") is executed by ANGELES INCOME PROPERTIES, LTD.
II, a California limited partnership] ("Seller"), in favor of ATLANTA CROSSING
L.L.C., an Alabama limited liability company ("Purchaser").
Seller and Purchaser have entered into that certain Purchase and Sale
Contract dated as of the 25th day of October, 1999 ("Purchase Contract"), in
which Seller has agreed to sell and Purchaser has agreed to purchase the real
property described in Exhibit "A" attached hereto and the improvements located
thereon (collectively, the "Project").
Pursuant to the Purchase Contract, Seller has agreed to assign, without
recourse or warranty, to Purchaser all of Seller's right, title and interest, if
any, in and to the Property (as hereinafter defined).
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Seller and Purchaser agree as
follows:
1. As used herein, the term "Property" shall mean the following property
to the extent said property is owned by Seller and used in, held for use in
connection with, or necessary for the operation of the Project:
a. Books and Records. All of Seller's rights, IF ANY, in and to files,
records, and books of account of the Project.
b. Licenses and Permits. All of Seller's rights and interests, IF ANY, in and
to plans, specifications, reports, rights, privileges, licenses, permits,
surveys, entitlements, maps, agreements, and authorizations utilized with
respect to the Project, excluding any "Excluded Permits" identified as such
in the Purchase Contract.
c. Property Contracts. All of Seller's rights and interests in and to
maintenance, service or utility contracts which relate to the maintenance,
repair or operation of the Project scheduled on Exhibit "B" attached
hereto.
d. Commercial Leases. All of Seller's rights and interests in and to leases,
subleases, and other occupancy agreements, whether or not of record, which
provide for use or occupancy of space or facilities on or relating to the
Project scheduled on Exhibit "C" attached hereto.
The term "Property" shall not include any of the foregoing: (i) to
the extent the same are reserved to Seller pursuant to the Purchase Contract to
which Seller and Purchaser are parties; and (ii) to the extent that the sale or
transfer thereof requires consent or approval of any third party, which consent
or approval is not obtained by Seller. Nothing herein shall create a transfer or
assignment of intellectual property or similar assets of Seller.
2. Assignment. Seller hereby assigns, sells and transfers, without
recourse or warranty, to Purchaser all of Seller's right, title and interest, if
any, in and to the Property Contracts and the Commercial Leases, subject to any
rights of consent as provided therein. Seller agrees to indemnify, defend and
hold Purchaser harmless from and against any and all cost, loss, or harms which
may arise with respect to the Property Contracts and the Commercial Leases which
accrued prior to the date hereof.
3. Assumption. Purchaser expressly agrees to assume and hereby assumes all
liabilities and obligations of the Seller in connection with the Property and
agree to perform all of the covenants and obligations of Seller thereunder
including without limitation, all liabilities and obligations of landlord under
the Commercial Leases and all liabilities and obligations of the contracting
parties under the Property Contracts, including responsibility for refunding
security deposits. Purchaser further agrees to indemnify, defend and hold Seller
harmless from and against any and all cost, loss, harm or damage which may arise
in connection with the Property, including the Commercial leases and Property
Contracts.
4. Counterparts. This Assignment may be executed in counterparts, each of
which shall be deemed an original, and both of which together shall
constitute one and the same instrument.
5. Miscellaneous. This Assignment shall be without recourse to or warranty by
Seller except only as explicitly set forth to the contrary herein.
6. Attorneys' Fees. If any action or proceeding is commenced by either party
to enforce its rights under this Assignment, the prevailing party in such
action or proceeding shall be entitled to recover all reasonable costs and
expenses incurred in such action or proceeding, including reasonable
attorneys' fees and costs, in addition to any other relief awarded by the
court.
7. Applicable Law. This Assignment shall be governed by and interpreted in
accordance with the laws of the State of Alabama.
8. Titles and Section Headings. Titles of sections and subsections contained
in this Assignment are inserted for convenience of reference only, and
neither form a part of this Assignment or are to be used in its
construction or interpretation.
9. Binding Effect. This Assignment shall be binding upon and inure to the
benefit of the parties hereto and their respective transferees, successors,
and assigns.
10. Entire Agreement; Modification. This Assignment supersedes all prior
agreements and constitutes the entire agreement with respect to the subject
matter hereof. It may not be altered or modified without the written
consent of all parties.
WITH RESPECT TO ALL MATTERS TRANSFERRED, WHETHER TANGIBLE OR
INTANGIBLE, PERSONAL OR REAL, SELLER EXPRESSLY DISCLAIMS A WARRANTY OF
MERCHANTABILITY AND WARRANTY FOR FITNESS FOR A PARTICULAR USE OR ANY OTHER
WARRANTY EXPRESSED OR IMPLIED THAT MAY ARISE BY OPERATION OF LAW OR UNDER THE
UNIFORM COMMERCIAL CODE FOR THE STATE IN WHICH THE PROPERTY IS LOCATED.
Dated:, 1999
SELLER:
ANGELES INCOME PROPERTIES, LTD. II,
a California limited partnership
By: ANGELES REALTY CORPORATION II,
a California corporation,
its Managing General Partner
By:
Name:
Title:
Accepted to and agreed by:
PURCHASER:
ATLANTA CROSSING L.L.C., an Alabama limited
liability company
By:
Name:
Title:
<PAGE>
EXHIBIT A TO ASSIGNMENT
Legal Description
<PAGE>
EXHIBIT B TO ASSIGNMENT
Property Contracts (Assigned to Purchaser)
[Property Contracts listed on Exhibit 1.1.10, excepting those listed on Exhibit
4.1.4]
<PAGE>
EXHIBIT C TO ASSIGNMENT
Commercial Leases
<PAGE>
EXHIBIT 5.2.1.6
SELLER'S CERTIFICATION OF NON-FOREIGN STATUS
A. Federal FIRPTA Certificate
To inform ATLANTA CROSSING L.L.C., an Alabama limited liability company
("Transferee"), that withholding of tax under Section 1445 of the Internal
Revenue Code of 1986, as amended (the "Code"), will not be required upon the
transfer of certain rights relating to real property, located in the County of
Montgomery, State of Alabama, to Transferees, by ANGELES INCOME PROPERTIES, LTD.
II, a California limited partnership ("Transferor"), Transferor hereby certifies
to Transferees:
1. Transferor is not a foreign corporation, foreign partnership, foreign
trust, or foreign estate (as those terms are defined in the Code and the
Income Tax Regulations promulgated thereunder);
2. Transferor's U.S. tax identification number is 95-3793526;and
3. Transferor's office address is c/o AIMCO, 1873 South Bellaire Street, Suite
1700, Denver, CO 80222.
Transferor understands that this Certification may be disclosed to the
Internal Revenue Service by Transferees and that any false statement contained
herein could be punished by fine, imprisonment, or both.
Transferor understands that Transferees are relying on this Certification
in determining whether withholding is required upon said transfer.
Under penalty of perjury the undersigned declares that it has examined
this Certification and to the best of its knowledge and belief it is true,
correct and complete, and it further declares that it has authority to sign this
Certification on behalf of Transferor.
SELLER:
ANGELES INCOME PROPERTIES, LTD. II,
a California limited partnership
By: ANGELES REALTY CORPORATION II,
a California corporation,
its Managing General Partner
By:
Name:
Title:
<PAGE>
EXHIBIT 5.2.1.7
FORM OF TENANT ESTOPPEL CERTIFICATE
TO: Atlanta Crossing L.L.C.
2828 W. Edgemont Avenue
Montgomery, Alabama 36101
Attention: Duncan Liles
Re: Lease Agreement (the "Lease") dated ______________, by and
between ____________________________ ("Landlord") and
_____________________("Tenant")
The undersigned is the tenant under the Lease, whereby Tenant leases
from Landlord certain space in the Atlanta Crossing Shopping Center, located at
1333 Eastern By-Pass, Montgomery, Alabama on the real property described in
Exhibit A attached hereto (the "Property"). Tenant understands that Atlanta
crossing l.l.c. ("Prospective Purchaser") may be purchasing the Property from
Landlord and Tenant certifies to Landlord and Prospective Purchaser as follows:
1. The Lease is in full force and effect on the date hereof.
2. The term of the Lease began on _____________________. The termination date
of the present term of the Lease, excluding unexercised renewals, is
-------------------.
3. Tenant has paid rent for the Property for the period up to and including
----------------.
4. As of the date hereof, Landlord is holding $______________ as a security
deposit for the Lease.
5. As of the date hereof, Tenant is occupying the Property and is open for
business.
6. To Tenant's knowledge, Landlord is not in default under the Lease beyond
applicable cure periods in the performance of any covenant, agreement,
term, provision or condition contained in the Lease.
7. The undersigned is authorized to execute this Estoppel Certificate on
behalf of Tenant.
<PAGE>
Dated this _____ day of _____________, 1999.
TENANT:
------------------------------,
a ______________ ___________________
By:________________________________
Name:______________________________
Title:_______________________________
<PAGE>
EXHIBIT A TO TENANT ESTOPPEL CERTIFICATE
Legal Description
<PAGE>
EXHIBIT 6.1.1.3
PARTIES IN POSSESSION OF PROPERTY
-NONE-
<PAGE>
Exhibit 10.17
REINSTATEMENT OF AND FIRST AMENDMENT TO
PURCHASE AND SALE CONTRACT
This Reinstatement of and First Amendment to Purchase and Sale Contract
(this "First Amendment") is made and entered into as of this _____ day of
February, 2000, by and between ANGELES INCOME PROPERTIES, LTD. II ("Seller")
and ATLANTA CROSSING L.L.C. ("Purchaser").
RECITALS
WHEREAS, Seller and Purchaser entered into that certain Purchase and Sale
Contract, dated October 25, 1999 (the "Purchase Contract"), pursuant to which
Seller agreed to sell, and Purchaser agreed to purchase, certain real estate
located in Montgomery, Alabama (the "Property").
WHEREAS, the Purchase Contract terminated by its terms and by reason of
the failure of conditions.
WHEREAS, Seller and Purchaser desire to reinstate and modify the Purchase
Contract, on and subject to the terms and conditions contained herein.
W I T N E S S E T H
NOW, THEREFORE, for and in consideration of the premises, the mutual
agreements herein, and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Seller and Purchaser agree as
follows:
1. The Purchase Contract is hereby reinstated, subject to the
modifications and agreements expressly set forth below. Except as so amended by
the modifications and agreements herein, the terms and conditions of the
Purchase Contract shall be effective and shall remain in full force and effect.
Any capitalized terms used herein but not defined shall have the meaning set
forth in the Purchase Contract. In the event of a conflict between the terms of
the Purchase Contract and the terms of this First Amendment, the terms of this
First Amendment shall govern and control.
2. Section 1.1.3 of the Purchase Contract is hereby deleted in its entirety
and replaced with the following:
"Closing Date" means thirty (30) days after the date of the First
Amendment (or such earlier date as Purchaser may designate in
writing to Seller by at least 5 days' advance Notice), subject,
however, to Seller's express rights of extension stated in this
Purchase Contract, on which date the Closing of the conveyance of
the Property shall be held under the terms and conditions of this
Purchase Contract and on which date the Purchase Price for the
Property shall have been paid to and received by Seller pursuant to
Article 3 of this Purchase Contract.
3. Article 3 of the Purchase Contract is hereby deleted in its entirety and
replaced with the following:
3.1 The total purchase price (the "Purchase Price") for the Property
shall be Two Million Eight Hundred Seventy-Five Thousand Dollars
($2,875,000.00), which shall be paid by Purchase as follows:
3.1.1 As of the Effective Date, Purchaser delivered to Fidelity
National Title Insurance Company, 700 Louisiana, Suite
2600, Houston, Texas 77002 ("Escrow Agent") a deposit in
the sum of Fifty-Thousand Dollars ($50,000.00) in cash,
(such sum, together with any interest or earnings thereon,
being hereinafter collectively referred to as the "First
Deposit'). By execution of the First Amendment, Purchaser
directs the Escrow Agent to pay over the amount of the
First Deposit immediately to Seller, according to written
wire instructions received from Seller, and the Escrow
Agent may rely conclusively upon the First Amendment in
making such payment over to Seller. By execution of the
First Amendment, Purchaser also waives any and all claims
or defenses to the release of the First Deposit to Seller,
including, but not limited to, those claims or defenses
enumerated in correspondence dated December 3, 1999, and
December 9, 1999, addressed by Jesse M. Williams, III of
the Firm of Rushton, Stakely, Johnston & Garrett to David
M. Unseth of the Firm of Bryan Cave LLP.
3.1.2 As of the date of the First Amendment, Purchaser shall
deliver to the Escrow Agent an additional deposit in the
sum of Twenty Thousand Dollars ($20,000.00) in cash (such
sum being hereinafter referred to as the "Second Deposit").
Purchaser and Seller each approve the form of Escrow
Agreement attached as Exhibit A and Purchaser agrees to
sign the Escrow Agreement in such form and deliver a
counterpart of the same to the Escrow Agent along with the
Second Deposit and a counterpart of the same to Seller.
3.1.3 The Escrow Agent shall hold the Second Deposit and make
delivery of the Second Deposit to the party entitled
thereto under the terms hereof. Escrow Agent shall invest
the Second Deposit in such interest-bearing bank accounts,
money market funds or accounts, bank certificates of
deposit or bank repurchase agreements as Escrow Agent, in
its discretion, deems suitable (provided that Escrow Agent
shall invest the Second Deposit as jointly directed by
Seller and Purchaser should Seller and Purchaser each in
their respective sole discretion determine to issue such
joint investment instructions to the Escrow Agent) and all
interest and income thereon shall become part of the Second
Deposit and shall be remitted to the party entitled to the
Second Deposit, as set forth below.
3.1.4 The First Deposit and the Second Deposit (collectively, the
"Deposit") shall only be required to be refunded to
Purchaser if the sale of the Property under the Purchase
Contract shall not be consummated by reason of: (a) the
failure of any of the conditions expressly stated in
Article 7 of the Purchase Contract, (b) the occurrence of a
casualty resulting in the termination of the Purchase
Contract pursuant to the terms of Section 11.1 of the
Purchase Contract, (c) the occurrence of a condemnation
resulting in the termination of the Purchase Contract
pursuant to the terms of Section 13.1 of the Purchase
Contract, or (d) the election of Seller to terminate the
Purchase Contract by reason of the failure of the
conditions precedent set forth in Sections 7.2.4, 7.2.5 or
7.2.6 of the Purchase Contract (unless Seller's failure to
secure the consents, approvals, waivers and/or releases is
a direct result of Purchaser's actions). If the sale of the
Property is closed by the Closing Date (or any valid
extension date thereof), the Deposit shall be credited to
the Purchase Price.
3.2 On the Closing Date, Purchaser shall pay the Purchase Price to
Seller, net of the Deposit credited at Closing and subject to
credit and adjustment as provided herein, in cash or by
wire-transfer of current funds through escrow pursuant to wire
instructions provided by Seller.
4. Section 5.1.2 of the Purchase Contract is hereby deleted in its entirety
and replaced with the following:
"The Closing Date may be extended without penalty at the option of
Seller to a date not later than thirty (30) days after the date
determined by reference to the definition of "Closing Date."
5. Sections 5.2.1.7, 5.2.1.8 and 5.2.1.9 of the Purchase Contract are hereby
deleted in their entirety.
6. Section 7.1.4 of the Purchase Contract is hereby deleted in its entirety.
7. Seller shall take reasonable efforts to assist Purchaser in securing
documentation from the Tenants of the Property as required by Purchaser's
Lender, provided, however, that securing such documentation shall be
neither a condition of Seller's performance under the Purchase Contract nor
a condition precedent to Purchaser's performance under the Purchase
Contract.
8. This First Amendment, and the reinstated and modified Purchase Contract
effected by this First Amendment, shall be null and void unless signed by
Purchaser on or before February 4, 2000, and accepted by Seller on or
before February 11, 2000."
9. This First Amendment shall be binding upon, and shall inure to the benefit
of, the parties hereto, and their respective successors and permitted
assigns.
10. This First Amendment may be executed in counterparts and by facsimile, each
of which shall be deemed an original, and all of which together shall be
deemed one and the same document.
IN WITNESS WHEREOF, the undersigned have executed this First Amendment to
Purchase and Sale Contract as of the date first above written.
SELLER:
ANGELES INCOME PROPERTIES, LTD. II,
a California limited partnership
By: ANGELES REALTY CORPORATION II,
a California corporation,
its Managing General Partner
By:
Name:
Title:
PURCHASER:
ATLANTA CROSSING L.L.C., an Alabama limited
liability company
By:
Name:
Title:
<PAGE>
Exhibit 10.18
SECOND AMENDMENT TO PURCHASE AND SALE CONTRACT
This Second Amendment to Purchase and Sale Contract (this "Second
Amendment") is made and entered into as of this 8th day of March, 2000, by and
between ANGELES INCOME PROPERTIES, LTD. II ("Seller") and ATLANTA CROSSING
L.L.C. ("Purchaser").
RECITALS
WHEREAS, Seller and Purchaser entered into that certain Purchase and Sale
Contract, dated October 25, 1999, as reinstated and amended on February 7, 2000
(the "Purchase Contract"), pursuant to which Seller agreed to sell, and
Purchaser agreed to purchase, certain real estate located in Montgomery,
Alabama.
WHEREAS, the Purchase Contract contemplates a Closing Date of March 8,
2000.
WHEREAS, Purchaser desires to extend the Closing Date until March 15,
2000.
WHEREAS, Seller and Purchaser desire to modify the Purchase Contract, on
and subject to the terms and conditions contained herein.
W I T N E S S E T H
NOW, THEREFORE, for and in consideration of the premises, the mutual
agreements herein, and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Seller and Purchaser agree as
follows:
1. Except as so amended by the modifications and agreements herein, the
terms and conditions of the Purchase Contract shall be effective and shall
remain in full force and effect. Any capitalized terms used herein but not
defined shall have the meaning set forth in the Purchase Contract. In the event
of a conflict between the terms of the Purchase Contract and the terms of this
Second Amendment, the terms of this Second Amendment shall govern and control.
2. Section 1.1.3 of the Purchase Contract is hereby deleted in its
entirety and replaced with the following:
"Closing Date" means March 15, 2000 (or such earlier date as
Purchaser and Seller may mutually agree), subject, however, to
Seller's express rights of extension stated in this Purchase
Contract, on which date the Closing of the conveyance of the
Property shall be held under the terms and conditions of this
Purchase Contract and on which date the Purchase Price for the
Property shall have been paid to and received by Seller pursuant to
Article 3 of this Purchase Contract.
3. In consideration for Seller's agreement to extend the Closing Date
until March 15, 2000, Purchaser shall deliver to the Escrow Agent an additional
deposit in the sum of Twenty Thousand Dollars ($20,000.00) in cash (such sum
being hereinafter referred to as the "Closing Extension Deposit") as of the date
of this Second Amendment. Seller and Purchaser hereby agree that the Closing
Extension Deposit shall be held by the Escrow Agent on the same basis as the
Escrow Agent holds the Escrow Fund pursuant to the terms and conditions of that
certain Escrow Agreement by and among Seller, Purchaser and Escrow Agent, dated
February 7, 2000.
4. This Second Amendment shall be binding upon, and shall inure to the
benefit of, the parties hereto, and their respective successors and permitted
assigns.
5. This Second Amendment may be executed in counterparts and by facsimile,
each of which shall be deemed an original, and all of which together shall be
deemed one and the same document.
IN WITNESS WHEREOF, the undersigned have executed this Second Amendment to
Purchase and Sale Contract as of the date first above written.
SELLER:
ANGELES INCOME PROPERTIES, LTD. II,
a California limited partnership
By: ANGELES REALTY CORPORATION II,
a California corporation,
its Managing General Partner
By:
Name:
Title:
PURCHASER:
ATLANTA CROSSING L.L.C., an Alabama limited
liability company
By:
Name:
Title:
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Angeles
Income Properties, Ltd. II 1999 Fourth Quarter 10-KSB and is qualified in its
entirety by reference to such 10-KSB filing.
</LEGEND>
<CIK> 0000711642
<NAME> ANGELES INCOME PROPERTIES, LTD. II
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 4,229
<SECURITIES> 0
<RECEIVABLES> 342
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0 <F1>
<PP&E> 32,387
<DEPRECIATION> (22,598)
<TOTAL-ASSETS> 15,860
<CURRENT-LIABILITIES> 0 <F1>
<BONDS> 17,784
0
0
<COMMON> 0
<OTHER-SE> (4,758)
<TOTAL-LIABILITY-AND-EQUITY> 15,860
<SALES> 0
<TOTAL-REVENUES> 6,767
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 6,198
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,439
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> (1)
<CHANGES> 0
<NET-INCOME> 1,098
<EPS-BASIC> 10.89 <F2>
<EPS-DILUTED> 0
<FN>
<F1> Registrant has an unclassified balance sheet. <F2> Multiplier is 1.
</FN>
</TABLE>
