UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 0-11890
VISTA PROPERTIES
(Exact name of registrant as specified in its charter)
California 13-3179078
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
411 West Putnam Avenue, Greenwich, CT 06830
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 203-862-7000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on which
Title of each class registered
None None
Securities registered pursuant to Section 12(g) of the Act:
Units of Limited Partnership Interest, $500 Per Unit
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes[ X ] No [ ]
Exhibit index at page IV-1
<PAGE>
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ X ]
There is no public market for the Limited Partnership Units.
Accordingly, information with respect to the aggregate market value of Limited
Partnership Units held by nonaffiliates of Registrant has not been supplied.
<PAGE>
PART I
Item 1. Business
General Development of Business
Registrant (sometimes referred to as the "Partnership") is a California limited
partnership engaged in the business of investing in, holding and managing
commercial properties. Registrant was formed on March 14, 1983, with IR Vista
Realty Corp. (the "Management General Partner"), IR Acquisition Corp. (the
"Acquisitions General Partner") and Asta Associates Limited Partnership (the
"Associate General Partner") as its general partners (collectively, the "General
Partners"). The Management General Partner and the Acquisitions General Partner
are wholly-owned subsidiaries of Presidio Capital Corp. ("Presidio"). IR Vista
Realty Corp. and IR Acquisition Corp. were until November 3, 1994 wholly-owned
subsidiaries of Integrated Resources, Inc. ("Integrated "). On November 3, 1994,
Integrated consummated a plan of reorganization under Chapter 11 of the United
States Bankruptcy Code, at which time, pursuant to such plan of reorganization,
the newly formed Presidio purchased substantially all of Integrated's assets.
See the Prospectus, dated September 2, 1983 (the "Prospectus") and the
Supplements thereto dated October 17, 1983, November 11, 1983, November 29,
1983, January 25, 1984, March 2, 1984, July 9, 1984, August 8, 1984 and
September 14, 1984 (collectively, the "Supplements").
Asta Associates Limited Partnership notified the Partnership of its withdrawal
as Associate General Partner of the Partnership. The withdrawal was effective as
of March 28, 1995, 90 days following written notice to Limited Partners. Upon
the effective date of the withdrawal, Presidio Boram Corp. ("Boram"), a
subsidiary of Presidio became the Associate General Partner. In October 1996,
the parties determined that the withdrawal of Asta as Associate General Partner
and the appointment of Boram was based upon a mutual mistake and those
transactions were rescinded.
Effective with the consummation of Integrated's plan of reorganization, Presidio
entered into a management and administrative agreement with Concurrency
Management Corp. ("Concurrency "). Effective January 1, 1996, Wexford Management
Corp. (formerly Concurrency) assigned its agreement to provide administrative
services to Presidio and its subsidiaries to Wexford Management LLC ("Wexford").
Registrant presently owns property in Irving, Texas (the "Texas Property"), and
at 250 Park Avenue, New York City, New York (the " New York Property"). The
Texas Property and New York Property were acquired on December 15, 1983 and
January 4, 1984, respectively. Each property consists of improvements in which
Registrant owns a fee simple interest, and underlying land which Registrant
leases pursuant to long-term leases. The Texas Property is net-leased by
Registrant to a commercial tenant; the New York Property is operated by the
Receiver (as hereinafter defined). Registrant net-leases the Texas Property to
one tenant, but has several tenants in the New York Property. Further
information regarding these properties is set forth in Item 2 below.
The mortgage loan on the New York Property (the "New York Mortgage") permits the
Registrant to defer payment of some or all of the interest accrued on the New
York Mortgage, provided, among other things, that the Registrant does not defer
interest in an amount that at any time exceeds the aggregate debt service that
would have been due for the immediately preceding 84-month period. In August
1996, the Registrant received notice from the holder of the New York Mortgage
that the interest deferred on the New York Mortgage exceeded the permitted
deferral and that the full debt service payment for interest accrued during
<PAGE>
August 1996 (in the amount of $1,239,700) would be due and payable on September
1, 1996 and that if such payment was not received the New York Lender would be
entitled to accelerate the indebtedness secured by the New York Mortgage and
exercise all available remedies (including the commencement of a foreclosure
action against the New York Property). The Registrant did not have sufficient
funds to make the payment on September 1, 1996, and, in October 1996, the New
York Lender declared the entire outstanding principal balance of $90,160,000,
together with all accrued and unpaid interest of approximately $104,882,000,
immediately due and payable, and thereafter commenced an action to foreclose
upon the New York Property (the "Foreclosure Proceeding"). At such time, the
total outstanding indebtedness significantly exceeded the estimated fair market
value of the New York Property.
The Registrant was notified on or about November 12, 1996 that on November 7,
1996 the Supreme Court of the State of New York in the County of New York
appointed Darrell Paster, of Ferrer, Paster & Enriquez (the "Receiver") as a
receiver of all earnings, revenues, rents, issues, profits and income with
respect to the New York Property during the pendency of the foreclosure action.
A foreclosure of the New York Property would result in adverse tax consequences
to limited partners. If the New York Property is foreclosed upon, the Registrant
estimates that, as required by generally accepted accounting principles, it will
recognize a gain of approximately $103,000,000 ($1,099 per Unit of limited
partnership interest). The Registrant estimates that each limited partner would
recognize a taxable gain of approximately $1,412 per Unit, with no cash
available for distribution to the partners. Any such foreclosure also would have
a significant impact on future operating revenues and expenses and cash flow
from operations would be significantly reduced.
The Registrant had owned property in Orlando, Florida (the "Florida Property").
On January 12, 1996, Registrant entered into a Settlement Agreement (the
"Settlement Agreement") with AEW #2 Trust ("AEW") with respect to a pending
foreclosure of the mortgage loan made by AEW to the Registrant in the original
principal amount of $21,360,000 (the "Florida Loan"). The Florida Loan was
secured by a first mortgage lien on the leasehold estate on a parcel of land
located in Orange County, Florida and the improvements located thereon.
The Florida Loan became due and payable in accordance with its terms on October
26, 1995 and the Florida Loan was not satisfied on such date. As of November 30,
1995, the outstanding indebtedness of the Florida Loan was comprised of the
principal amount of $21,360,000 plus accrued and unpaid interest in the amount
of $14,454,058. The amount of such outstanding indebtedness exceeded the fair
market value of the Florida Property as of such date. AEW commenced an action to
foreclose on its mortgage on December 7, 1995 and a certificate of title was
issued in connection with such action on February 26, 1996. As a result of the
foreclosure, the Registrant, as required under generally accepted accounting
principals, recognized a gain of approximately $19,429,000 ($207 per Unit of
limited partnership interest) for the year ended December 31, 1996. Each limited
partner realized a taxable gain of $333 per full unit interest in 1996 in
connection with the foreclosure.
Registrant has only one industry segment: the ownership and operation of
commercial properties. See Item 8 below for a summary of Registrant's
operations.
For the year ended December 31, 1996, Registrant's revenues from (i) Showbiz
Pizza Time, Inc., which net- leases the Texas Property, and (ii) the tenants of
the New York Property accounted for 3% and 97%, respectively, of the gross
revenues of Registrant from its real estate operations.
<PAGE>
Competition
The real estate business is highly competitive, and, as discussed more
particularly below, the properties owned by Registrant may have active
competition from similar properties in the vicinity. In addition, various
limited partnerships have been formed by the Management General Partner and/or
its affiliates that engage in businesses that may be in competition with
Registrant. The Management General Partner respects the interests of each entity
individually. Additionally, the partnerships do not anticipate changes in their
current operations. As such, the Registrant does not differentiate in the
allocation of any opportunities. Registrant will also experience competition for
potential buyers at such time as it seeks to sell any of its properties.
Registrant's primary asset, the New York Property, which is an office building
leased to approximately 30 tenants, is located in midtown Manhattan. Leasing of
office buildings in the area is highly competitive, yet the building is
currently 97% occupied.
Compliance with Environmental Protection Provisions
Registrant is not aware of any non-compliance with Federal, State and local
provisions regulating the discharge of material into the environment or
otherwise relating to the protection of the environment and is not aware of any
condition that will have a material effect on the capital expenditures or
competitive position of Registrant.
Employees
Registrant does not have any employees. Wexford currently performs accounting,
secretarial, transfer and administrative services for Registrant. Wexford also
performs similar services for other affiliates of the General Partners. In
addition, Registrant has retained Vista Management to provide certain management
services regarding the properties owned by Registrant. See Item 13 below for
further information regarding Vista Management. Aside from these personnel, and
the directors and officers of the General Partners discussed below in Item 10,
Registrant has no employees.
Item 2. Description of Property
The following table sets forth information as of March 1, 1997 regarding the
properties presently owned by Registrant.
<TABLE>
<CAPTION>
Name of Property Location Date of Purchase Type of Property
- ---------------- -------- ---------------- ----------------
<S> <C> <C> <C>
Texas Property Irving, Texas 12/15/83 office building
New York Property 250 Park Avenue 1/04/84 office building
New York, NY
</TABLE>
In the case of both properties, Registrant has fee simple title to the
improvements and leases the land underlying the improvements on a long-term
basis. The Texas Property is subject to a net lease; the New York Property is
operated by the Receiver.
<PAGE>
Further information regarding these properties and Registrant's interest therein
is set forth under the heading Initial Property Acquisition at pp. 52-58 of the
Prospectus, and in the Supplements to the Prospectus dated January 25, 1984,
March 2, 1984 and July 9, 1984. There have been no additional purchases of
property subsequent to Registrant's initial property acquisition.
Item 3. Legal Proceedings
Registrant filed a Proof of Claim against Integrated in Integrated's Chapter 11
proceeding with respect to certain potential and unliquidated claims and
disputes involving Integrated and its affiliates. These claims and disputes have
been resolved and approved by the Bankruptcy Court and resulted in Registrant
receiving approximately $272,000 with respect thereto these claims during 1996.
In addition, the New York property is presently subject to the Foreclosure
Proceeding.
Item 4. Submission of Matters to a Vote of Security Holders
None.
<PAGE>
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters.
There is no established public trading market for the Units of Registrant.
As of March 1, 1997, there were approximately 4,221 record holders of Units,
holding an aggregate of 92,810 Units in Registrant.
It is not presently anticipated that Registrant will make any cash distributions
to investors.
Item 6. Selected Financial Data
<TABLE>
<CAPTION>
Year ended December 31,
------------------------------------------------------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Total revenues $ 21,267,482 $ 25,455,013 $ 25,931,770 $ 24,327,320 $ 24,130,097
Net Income (loss) $ 4,782,912(A) $ (11,140,689) $(12,282,498) $ (13,517,328) $ (13,363,394)
Net Income (loss) per
limited partnership unit $ 51.02(A) $ (118.84) $ (131.02) $ (144.19) $ (142.55)
Total assets $ 107,163,265 $ 128,006,273 $131,277,049 $ 131,541,536 $ 135,533,029
Mortgages Payable $ 99,160,000 $ 120,520,000 $120,520,000 $ 120,520,000 $ 120,520,000
Deferred Interest
Payable $ 115,022,636 $ 119,017,721 $111,924,239 $ 100,155,363 $ 90,772,093
(A) Includes gain on foreclosure of the Florida Property in the amount of
$19,429,198, or $207.25 per Unit.
</TABLE>
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
All cash flow from properties is currently applied to debt service. Registrant
uses working capital reserves to pay administrative expenses. As of December 31,
1996, such reserves aggregated $636,780. Reserves, which were initially provided
from the net proceeds of Registrant's initial public offering, increased during
1996 as a result of the receipt of (I) a cooperation payment (approximately
$307,000) in connection with the foreclosure of the Florida Loan and (ii)
$272,000 from the settlement of a claim against Integrated in Integrated's
Chapter 11 proceedings.
<PAGE>
Registrant suspended payment of property management fees to an affiliate of the
Management General Partner in 1991 in order to slow the depletion of
Registrant's working capital reserve balance. For 1996 $171,934 of fees were
deferred due to the suspension of property management fee payments as described
above.
With the exception of Registrant's working capital reserves of $636,780, cash
and cash equivalents for the year ended December 31, 1996 are being held by the
managing agent appointed by the Receiver prior to being applied to the
operations of, and Registrant's mortgage obligation on, the New York Property.
On November 15, 1984, Registrant terminated its initial public offering upon the
final admission of limited partners. The net proceeds to Registrant for the
92,800 Units sold pursuant to the public offering amounted to $41,040,800 (the
gross proceeds of $46,400,000 less underwriting commissions and organization and
offering expenses aggregating $5,359,200).
Registrant presently owns the Texas Property, which is net leased to Showbiz
Pizza Time, Inc., and the New York Property, which is leased to approximately 30
tenants. Occupancy rates at Registrant's properties are 100% and 97% for the
Texas Property and New York Property, respectively. The net lease of the Texas
Property expires in 1998. At the New York Property, one tenant occupies 16% of
the total square footage and this lease expires in 1997. The Receiver and
Registrant have agreed in principal on the terms of the renewal of such tenant's
lease through the year 2007. As of March 1, 1997, substantially all of the
tenants at each property are meeting their obligations and the expiring leases
are subject to renegotiation.
The Texas Mortgage permits the Registrant to defer payment of some or all of the
interest accrued on the Texas Mortgage, provided, among other things, that the
Registrant does not defer interest in an amount that at any time exceeds
$8,500,000. Registrant does not expect to exceed that maximum deferral amount
prior to the maturity date in December 1998. At that time, unless Registrant is
able to refinance the Texas Mortgage or agree with the holder of the Texas
Mortgage (the "Texas Lender") on a restructuring of the Texas Mortgage, the
Texas Lender may accelerate the indebtedness secured by the Texas Mortgage and
exercise all available remedies (including the commencement of a foreclosure
against the Texas Property). A foreclosure of the Texas Mortgage would have
significant adverse tax consequences to the limited partners of Registrant with
no cash available for distribution to the limited partners.
The mortgage loan on the New York Property permits the Registrant to defer
payment of some or all of the interest accrued on the New York Mortgage,
provided, among other things, that the Registrant does not defer interest in an
amount that at any time exceeds the aggregate debt service that would have been
due for the immediately preceding 84-month period. In August 1996, the
Registrant received notice from the holder of the New York Mortgage that the
interest deferred on the New York Mortgage exceeded the permitted deferral and
that the full debt service payment for interest accrued during August 1996 (in
the amount of $1,239,700) would be due and payable on September 1, 1996 and
that, if such payment was not received, the New York Lender would be entitled to
accelerate the indebtedness secured by the New York Mortgage and exercise all
available remedies (including the commencement of a foreclosure action against
the New York Property). The Registrant did not have sufficient funds to make the
payment on September 1, 1996, and, in October 1996, the New York Lender declared
the entire outstanding principal balance of $90,160,000, together with all
accrued and unpaid interest of approximately $104,882,000, immediately due and
payable, and thereafter commenced an action to foreclose upon the New York
Property. At such time, the total outstanding indebtedness significantly
exceeded the estimated fair market value of the New York Property.
<PAGE>
The Registrant was notified on or about November 12, 1996 that on November 7,
1996 the Supreme Court of the State of New York in the County of New York
appointed Darrell Paster, of Ferrer, Paster & Enriquez as a receiver of all
earnings, revenues, rents, issues, profits and income with respect to the New
York Property during the pendency of the foreclosure action.
A foreclosure of the New York Property would result in adverse tax consequences
to limited partners. If the New York Property is foreclosed upon, the Registrant
estimates that as required by generally accepted accounting principles, it will
recognize a gain of approximately $103,000,000 ($1,099 per Unit of limited
partnership interest). In addition, the Registrant estimates that each limited
partner would recognize a taxable gain of approximately $1,412 per Unit, with no
cash available for distribution to the partners. Any such foreclosure also would
have a significant impact on future operating revenues and expenses and cash
flow from operations would be significantly reduced. Registrant is reviewing
options available to it with respect to the potential foreclosure of the New
York Property. Such options include vigorous defense of the foreclosure and a
settlement thereof with the least adverse affect to the Registrant.
There is no assurance that the Registrant will be able to successfully avoid a
foreclosure of the New York Property, or refinance or restructure the Texas
Mortgage prior to the date that the Registrant will have deferred the maximum
amount of interest that may be deferred under the terms of the Texas Mortgage.
If both the New York Property and the Texas Property are foreclosed, the
Registrant would lose all sources of revenue and would be forced to dissolve.
See Treatment of Gain or Loss on Sale or Other Disposition of Property and Tax
Treatment of Mortgage Foreclosure at pp. 72-73 of the Prospectus.
On January 12, 1996, the Registrant entered into the Settlement Agreement with
AEW with respect to a pending foreclosure of the Florida Loan made by AEW to the
Partnership in the original principal amount of $21,360,000. The Florida Loan
was secured by a first mortgage lien on the leasehold estate on a parcel of land
located in Orange County, Florida, and the improvements located thereon.
The Florida Loan became due and payable in accordance with its term on October
26, 1995 and the Florida Loan was not satisfied on such date. As of November 30,
1995, the outstanding indebtedness of the Florida Loan was comprised of the
principal amount of $21,360,000 plus accrued and unpaid interest in the amount
of $14,454,058. The amount of such outstanding indebtedness exceeded the fair
market value of the Florida Property as of such date. AEW commenced an action to
foreclose its mortgage on December 7, 1995 and a certificate of title was issued
in connection with such action on February 26, 1996.
Under the terms of the Settlement Agreement, AEW agreed to pay to the Registrant
a fee in an amount not to exceed $400,000 and to bear substantially all costs
and expenses relating to the consummation of the foreclosure action provided the
Registrant cooperated with AEW in connection with the foreclosure action. After
related expenses, the Registrant received $306,572 from AEW on May 22, 1996.
As a result of the above transaction, the Registrant recognized during the first
quarter of 1996, a gain from the disposition of the Florida Property of
$19,429,198 ($207.25 per unit of limited partnership interest).
<PAGE>
RESULTS OF OPERATIONS
1996 vs 1995
Registrant experienced net income of $4,782,912 for the year ended December 31,
1996 compared to a net loss of $11,140,689 for the year ended December 31, 1995
primarily due to a gain on disposition from the Florida Property that was
foreclosed upon in February 1996. The foreclosure resulted in a gain of
$19,429,198 and a decrease in revenues and expenses from the loss of this
property.
Revenues decreased $4,187,531 for the year ended December 31, 1996 when compared
with the prior year primarily as a result of the disposition of the Florida
Property which resulted in the loss of approximately $3.6 million of rental
income and a decrease of revenue of approximately $837,000 at the New York
Property primarily as a result of a lease termination agreement with one tenant
in 1996. This was partially offset by other income of $272,605 which represents
cash proceeds received in April, 1996 for Proof of Claims against Integrated for
its Chapter 11 proceedings which were resolved and approved by the Bankruptcy
Court on January 22, 1996.
Expenses decreased $681,934 for the year ended December 31, 1996 when compared
with the prior year due to a decrease in mortgage loan interest expense of
approximately $2.4 million and a decrease in ground rent expense of
approximately $1.3 million, both primarily from the disposition of the Florida
Property. This was offset by an increase in depreciation and amortization
expense of approximately $3.0 million due to a one time write off of tenant
improvements and lease commissions for vacated tenants at the New York Property
of approximately $3.6 million which was offset by a depreciation savings of
approximately $600,000 from the disposition of the Florida Property.
<PAGE>
1995 vs. 1994
The net loss decreased $1,141,809 for the year ended December 31, 1995 compared
to the prior year due to a greater decrease in costs and expenses than the
decrease in revenues. Revenues decreased $476,757 and costs and expenses
decreased $1,618,566.
The decrease in revenues is due to a decrease of $549,717 in rental revenues
partially offset by a $72,120 increase in interest income. Rental revenue
decreased at the New York Property by $592,856 primarily as a result of a lease
termination agreement with a tenant which resulted in a one time payment of
$1,200,000 in 1994. This was partially offset by an increase in a rental income
due to higher occupancy rates in 1995 versus 1994. Rental income increased
$43,139 at the Florida Property as a result of increases in the consumer price
index, as outlined in the net lease agreement. Rental income at the Texas
Property remained consistent with the prior year and the tenant continues to
meet its obligations under the net lease. The Florida Property was foreclosed on
February 26, 1996; See Liquidity and Capital Resources for a discussion
regarding the foreclosure.
Costs and expenses decreased for the year ended December 31, 1995 when compared
with the prior year due to a $1,529,403 decrease in interest expense, a $150,954
decrease in operating expense, a $58,453 decrease in depreciation and
amortization expense, and a $4,821 decrease in property management fees,
partially off set by a $85,000 increase in ground rent expense, and a $40,065
increase in general and administrative expense. The decrease in interest expense
is primarily due to decreased accrued interest on the Florida Property of
$1,446,888. Deferred interest was not accrued on the Florida Property as a
result of the exercise of the mortgage call provision in June of 1995. The
$150,954 decrease in operating expense is primarily due a $118,109 decrease in
insurance expense, a $13,687 decrease in advertising, and a $10,599 decrease in
legal fees associated with the New York Property. The decrease in general
insurance is the results of a decrease in premiums while maintaining a similar
level of coverage. Advertising expense decreased due to higher occupancy rates
resulting in lower advertising initiatives for potential tenants. Legal fees
decreased as a result of decreased tenant issues at the New York Property.
Depreciation and amortization decreased primarily as a result of fewer leasing
commissions being amortized when compared to the prior year. The decrease in
property management fees of $4,821 is a result of the overall decrease in the
rental revenue at the New York Property. The increase in ground rent of $85,000
reflects the scheduled annual increases provided for in the Florida ground
lease. The $40,065 increase in general and administrative expense is due to an
increase in the costs associated with the administration of the Registrant.
<PAGE>
Item 8. Financial Statements and Supplementary Data
VISTA PROPERTIES
FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 and 1994
INDEX
Independent Auditors' report
Independent Auditors' report
Financial statements - years ended
December 31, 1996, 1995, and 1994
Balance sheets
Statements of operations
Statement of partners' deficit
Statements of cash flows
Notes to financial statements
Schedule III:
Real Estate and Accumulated Depreciation
All other schedules have been omitted because they are not applicable or the
required information is included in the financial statements and the notes
thereto.
<PAGE>
To the Partners of
Vista Properties
Greenwich, Connecticut
INDEPENDENT AUDITOR'S REPORT
We have audited the accompanying balance sheets of Vista Properties (a limited
partnership) as of December 31, 1996 and 1995, and the related statements of
operations, partners' deficit and cash flows for the years then ended. Our audit
also included the financial statement schedule listed in the Index at Item
14(a)2. These financial statements and the financial statement schedule are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on the financial statements and financial statement schedule based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
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 financial position of Vista Properties as of December
31, 1996 and 1995, and the results of its operations and its cash flows for the
years then ended in conformity with generally accepted accounting principles.
Also, in our opinion, such financial statement schedule, when considered in
relation to the basic financial statements taken as a whole, presents fairly in
all material respects the information set forth therein.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 6 to the
financial statements, the Partnership has received notice from one of its
mortgage lenders regarding a possible foreclosure of the New York Property. The
Partnership does not have, and is not anticipated to have, sufficient funds or
liquidity to satisfy this mortgage which raises substantial doubt about its
ability to continue as a going concern. Management's plans in regard to this
matter are also described in Note 6. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/Hays & Company
- ------------------
Hays & Company
February 25, 1997
New York, New York
<PAGE>
To the Partners of
Vista Properties
INDEPENDENT AUDITOR'S REPORT
We have audited the accompanying statements of operations, partners' deficit and
cash flows of Vista Properties (a California limited partnership) for the year
ended December 31, 1994. Our audit also included the financial statement
schedule listed in the Index at Item 14(a)2 as it relates to the year ended
December 31, 1994. These financial statements and the financial statement
schedule are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements and
financial statement schedule based on our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the results of operations and cash flows of Vista Properties for the
year ended December 31, 1994 in conformity with generally accepted accounting
principles. Also, in our opinion, such financial statement schedule, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.
As discussed in Note 6, the Partnership is uncertain as to its ability to
refinance or negotiate an extension of its mortgage loans at the call date or
upon maturity of such mortgage loans. If the Partnership is unable to refinance
or negotiate an extension of such loans, the Partnership's interest in the
related properties would likely be foreclosed and the limited partners would
suffer adverse tax consequences.
/s/Deloitte & Touche
- --------------------
Deloitte & Touche
March 16, 1995
<PAGE>
<TABLE>
<CAPTION>
VISTA PROPERTIES
(A limited partnership)
BALANCE SHEETS
December 31,
--------------------------------
1996 1995
------------- -------------
<S> <C> <C>
ASSETS
Real estate, net .................................. $ 93,890,271 $ 115,705,376
Cash and cash equivalents ......................... 3,121,247 2,404,119
Receivables and other assets ...................... 10,151,747 9,896,778
------------- -------------
$ 107,163,265 $ 128,006,273
============= =============
LIABILITIES AND PARTNERS' EQUITY
Liabilities
Deferred interest payable ......................... $ 115,022,636 $ 119,017,721
Mortgage loans payable ............................ 99,160,000 120,520,000
Due to affiliates ................................. 1,889,508 1,717,574
Accounts payable and accrued expenses ............. 544,797 691,829
Prepaid rents ..................................... 209,927 505,664
------------- -------------
Total liabilities ............................. 216,826,868 242,452,788
------------- -------------
Commitments and contingencies (Notes 3, 4, 6, 8, and 10)
Partners' deficit
Limited partners' deficit (92,810
units issued and outstanding) ................. (107,042,477) (111,777,560)
General partners' deficit .......................... (2,621,126) (2,668,955)
------------- -------------
Total partners' deficit ....................... (109,663,603) (114,446,515)
------------- -------------
$ 107,163,265 $ 128,006,273
============= =============
See notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
VISTA PROPERTIES
(A limited partnership)
STATEMENTS OF OPERATIONS
Year ended December 31,
------------------------------------------------
1996 1995 1994
------------ ------------ ------------
<S> <C> <C> <C>
Revenues
Rental income .............................. $ 20,924,317 $ 25,327,463 $ 25,877,180
Other income ............................... 273,676 1,450 610
Interest income ............................ 69,489 126,100 53,980
------------ ------------ ------------
21,267,482 25,455,013 25,931,770
------------ ------------ ------------
Costs and expenses
Mortgage loan interest expense ............. 17,661,137 20,093,060 21,622,466
Operating expense .......................... 8,219,918 8,096,151 8,247,102
Depreciation and amortization .............. 8,589,852 5,606,268 5,664,721
Ground rent ................................ 700,000 2,031,159 1,946,159
Property management fees ................... 587,941 611,599 616,420
Administrative expenses .................... 154,920 157,465 117,400
------------ ------------ ------------
35,913,768 36,595,702 38,214,268
------------ ------------ ------------
(14,646,286) (11,140,689) (12,282,498)
Gain on foreclosure of property (Note 4) ... 19,429,198 -- --
------------ ------------ ------------
Net income (loss) ............................... $ 4,782,912 $(11,140,689) $(12,282,498)
============ ============ ============
Net income (loss) attributable to
Limited partners ........................... 4,735,083 (11,029,282) (12,159,672)
General partners ........................... 47,829 (111,407) (122,826)
------------ ------------ ------------
$ 4,782,912 $(11,140,689) $(12,282,498)
============ ============ ============
Net income (loss) per unit of limited partnership
interest (92,810 units outstanding) ........ $ 51.02 $ (118.84) $ (131.02)
============ ============ ============
See notes to consolidated financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
VISTA PROPERTIES
(A limited partnership)
STATEMENT OF PARTNERS' DEFICIT
YEARS ENDED DECEMBER 31, 1994, 1995 AND 1996
General Limited Total
Partners' Partners' Partner's
Deficit Equity Equity
------------- ------------- -------------
<S> <C> <C> <C>
Balance, January 1, 1994 . $ (2,434,722) $ (88,588,606) $ (91,023,328)
Net loss - 1994 .......... (122,826) (12,159,672) (12,282,498)
------------- ------------- -------------
Balance, December 31, 1994 (2,557,548) (100,748,278) (103,305,826)
Net loss - 1995 .......... (111,407) (11,029,282) (11,140,689)
------------- ------------- -------------
Balance, December 31, 1995 (2,668,955) (111,777,560) (114,446,515)
Net income - 1996 ........ 47,829 4,735,083 4,782,912
------------- ------------- -------------
Balance, December 31, 1996 $ (2,621,126) $(107,042,477) $(109,663,603)
============= ============= =============
See notes to consolidated financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
VISTA PROPERTIES
(A limited partnership)
STATEMENT OF CASH FLOWS
Year ended December 31,
------------------------------------------------
1996 1995 1994
------------ ------------ ------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS
Cash flow from operating activities
Net income (loss) ............................... $ 4,782,912 $(11,140,689) $(12,282,498)
Adjustments to reconcile net income (loss) to net
cash provided by operating activities
Deferred mortgage loan interest ............. 10,458,973 7,093,482 11,768,876
Depreciation and amortization ............... 8,589,852 5,606,268 5,664,721
Straight-line adjustment for stepped
lease rentals ............................. (360,901) (1,182,902) (1,456,616)
Gain on foreclosure of property ............. (19,429,198) -- --
Changes in assets and liabilities
Receivable and other assets, net .............. (960,398) (262,918) (357,747)
Due to affiliates ............................. 171,934 329,619 341,055
Accounts payable and accrued expenses ......... (147,032) 234,892 (207,483
Prepaid rents ................................. (295,737) 211,920 115,561
------------ ------------ ------------
Net cash provided by operating activities . 2,810,405 889,672 3,585,869
------------ ------------ ------------
Cash flows from investinv activities
Additions to real estate ........................ (2,399,849) (1,294,819) (2,593,475)
Cash received from foreclosure of property ...... 306,572 -- --
------------ ------------ ------------
Net cash used in investing activities ..... (2,093,277) (1,294,819) (2,593,475)
------------ ------------ ------------
Net increase (decrease) in cash and cash
equivalents ..................................... 717,128 (405,147) 992,394
Cash and cash equivalents, beginning of year ....... 2,404,119 2,809,266 1,816,872
------------ ------------ ------------
Cash and cash equivalents, end of year ............. $ 3,121,247 $ 2,404,119 $ 2,809,266
============ ============ ============
Supplemental disclosure of cash flow information
Interest paid ................................... $ 7,202,164 $ 12,999,578 $ 9,853,590
============ ============ ============
See notes to financial statements
</TABLE>
<PAGE>
VISTA PROPERTIES
(A limited partnership)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
1 ORGANIZATION
Vista Properties (the "Partnership"), a limited partnership, was formed
in March, 1983, under the Uniform Limited Partnership Laws of the State
of California for the purpose of investing in and operating real
estate. The Partnership's properties were originally located in New
York, Texas and Florida. During 1996, the Partnership's Florida
Property was foreclosed upon by its mortgage lender (Note 4). The
Partnership will terminate on December 31, 2080 or sooner, in
accordance with the terms of the Agreement of Limited Partnership (the
"Limited Partnership Agreement").
Units of limited partnership interest were issued at a stated value of
$500 per unit. A total of 92,810 units of limited partnership interest,
including units to the initial limited partner, have been issued for
aggregate capital contributions of $46,405,000. In addition, the
general partners contributed a total of $39,700, to the capital of the
Partnership.
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Leases
The Partnership accounts for all of its leases under the operating
method. Under this method, revenue is recognized as rentals become due,
except for stepped leases where revenue is recognized on a
straight-line basis over the life of the lease.
Depreciation
Depreciation is computed using the straight-line method over the useful
life of the property, which is estimated to be 40 years for buildings
and 20 years for improvements. The cost of the buildings represents the
initial cost of the buildings to the Partnership plus acquisition and
closing costs. Repairs and maintenance are charged to operations as
incurred.
Write-down for impairment
A write-down for impairment is established based upon a quarterly
review of each of the properties in the Partnership's portfolio. Real
estate property is carried at the lower of depreciated cost or
estimated fair value. In performing this review, management considers
the estimated fair value of the property based upon the undiscounted
future cash flows, as well as other factors such as the current
occupancy, the prospects for the property and the economic situation in
the region where the property is located. Because this determination of
estimated fair value is based upon future economic events, the amounts
ultimately realized upon a disposition may differ materially from the
carrying value.
<PAGE>
VISTA PROPERTIES
(A limited partnership)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
The write-down is inherently subjective and is based upon management's
best estimate of current conditions and assumptions about expected
future conditions. The Partnership may provide for losses in the future
and such provisions could be material.
Financial statements
The financial statements include only those assets, liabilities and
results of operations which relate to the business of the Partnership.
Cash and cash equivalents
For purposes of the statements of cash flows, the Partnership considers
all short-term investments which have original maturities of three
months or less to be cash equivalents.
Principally all of the Partnership's cash and cash equivalents are held
at two separate financial institutions.
Fair value of financial instruments
The fair value of financial instruments is determined by reference to
market data and other valuation techniques as appropriate. The
Partnership's financial instruments include cash and cash equivalents
and mortgage loans payable. Unless otherwise disclosed, the fair value
of financial instruments approximates their recorded values.
Net income (loss) per unit of limited partnership interest
Net income (loss) per unit of limited partnership interest is computed
based upon the number of units outstanding (92,810) during the years
ended December 31, 1996, 1995 and 1994.
Income taxes
No provisions have been made for federal, state and local income taxes,
since they are the personal responsibility of the partners.
The income tax returns of the Partnership are subject to examination by
federal, state and local taxing authorities. Such examinations could
result in adjustments to Partnership income or losses, which changes
could affect the income tax liability of the individual partners.
Reclassifications
Certain reclassifications have been made to the financial statements
shown for the prior years in order to conform to the current year's
classifications.
<PAGE>
VISTA PROPERTIES
(A limited partnership)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
3 CONFLICTS OF INTEREST AND TRANSACTIONS WITH RELATED PARTIES
IR Vista Realty Corp., the Management General Partner of the
Partnership, and IR Acquisitions Corp., the Acquisitions General
Partner, were, until November 3, 1994, wholly-owned subsidiaries of
Integrated Resources, Inc. ("Integrated") at which time, pursuant to
the consummation of Integrated's Plan of Reorganization, substantially
all the assets of Integrated were sold to Presidio Capital Corp.
("Presidio"). The Associate General Partner is Asta Associates Limited
Partnership, whose general partner is Z Square G Partners II, a general
partnership consisting of former directors and officers of Integrated.
Asta Associates Limited Partnership notified the Partnership of its
withdrawal as Associate General Partner of the Partnership. The
withdrawal was effective as of March 28, 1995, 90 days following
written notice to Limited Partners. Upon the effective date of the
withdrawal, Presidio Boram Corp. ("Boram"), a subsidiary of Presidio
became the Associate General Partner. In October 1996, the parties
determined that the withdrawal of Asta as Associate General Partner and
the appointment of Boram was based upon a mutual mistake and those
transactions were rescinded. Affiliates of the general partners are
also engaged in businesses related to the acquisition and operation of
real estate. Presidio is also the parent of other corporations that
are, or may in the future, be engaged in businesses that may be in
competition with the Partnership. Accordingly, conflicts of interest
may arise between the Partnership and such other corporations.
Effective with the consummation of Integrated's Plan of Reorganization,
Presidio entered into a management and administrative agreement with
Concurrency Management Corp. ("Concurrency"). Effective January 1,
1996, Wexford Management Corp. (formerly Concurrency) assigned its
agreement to provide management and administrative services to Presidio
and its subsidiaries to Wexford Management LLC ("Wexford"). Wexford is
engaged to perform similar services for other entities which may be in
competition with the Partnership. Reimbursements made to Wexford during
1996 for management and administrative services rendered, amounted to
$31,812.
Subject to the rights of the Limited Partners under the Limited
Partnership Agreement, Presidio will control the Partnership through
its indirect ownership of all of the shares of the Management
and Acquisitions General Partners.
<PAGE>
VISTA PROPERTIES
(A limited partnership)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
3 CONFLICTS OF INTEREST AND TRANSACTIONS WITH RELATED PARTIES (continued)
Presidio is managed by Presidio Management Company, LLC ("Presidio
Management"), a company controlled by a director of Presidio. Presidio
Management is responsible for the day to day management of Presidio
and, among other things, has authority to designate directors of the
Management and Acquisitions General Partners. Presidio may, however
terminate its agreement with Presidio Management with or without cause.
Presidio is a liquidating company. Although it has no immediate plans
to do so, it will ultimately seek to dispose of the interests it
acquired from Integrated through liquidation; however, there can be no
assurance of the timing of such transaction or the effect it may have
on the Partnership.
Presidio has elected new directors for the Management General Partner.
However, one executive remains the same and certain of Integrated's
former employees who performed services with respect to the Partnership
have been hired by Wexford, which provides administrative services to
Presidio, and its direct and indirect subsidiaries, as well as the
Partnership.
The Partnership has entered into a supervisory management agreement
with IR Vista Management Corp. ("Vista Management"), an affiliate of
the general partners, to perform certain functions relating to the
management of the properties of the Partnership. A portion of the
property management fees payable to Vista Management were paid to
unaffiliated local management companies which were engaged to provide
local property management for one of the Partnership's properties. For
the years ended December 31, 1996, 1995 and 1994, Vista Management was
entitled to receive $587,941, $611,599 and $616,420, respectively, of
which $416,007, $281,981 and $275,365 was paid to the unaffiliated
local management companies. Fees are not charged for properties net
leased to tenants. The amount due to affiliates of $1,889,508 and
$1,717,574 at December 31, 1996 and 1995, respectively, represents
management fees payable to Vista Management for its supervisory
management services. The Management General Partner suspended payment
of these fees starting in 1991 in order to slow the depletion of the
Partnership's working capital reserve balance.
The general partners are entitled to receive 1% of distributable cash
from the operations, sales, financing and working capital reserve
account, and an allocation of 1% of the net income or loss of the
Partnership. Such amounts allocated and distributed to the general
partners are apportioned 80% to the Management General Partner, 10% to
the Acquisitions General Partner and 10% to the Associate General
Partner.
<PAGE>
VISTA PROPERTIES
(A limited partnership)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
4 REAL ESTATE
Real estate is summarized as follows:
<TABLE>
<CAPTION>
December 31,
-----------------------------------
1996 1995
------------- -------------
<S> <C> <C>
Buildings and improvements ......... $ 144,472,117 $ 170,379,274
Accumulated depreciation ........... (50,581,846) (54,673,898)
------------- -------------
$ 93,890,271 $ 115,705,376
============= =============
</TABLE>
Florida Property
The Florida Property, which was located in Orlando, was net leased to a
tenant under a lease which commenced on November 1, 1981 and was to
terminate on March 31, 1998. The initial annual rent was $2,393,268 and
increased in each subsequent year by a percentage equal to the rate of
increase in the Consumer Price Index, U.S. City Average, with a maximum
of 7% increase in any year. Rental income for the years ended December
31, 1995 and 1994 was $3,622,271 and $3,579,132, respectively.
On January 12, 1996, the Partnership entered into a Settlement
Agreement (the "Settlement Agreement") with AEW #2 Trust ("AEW") with
respect to a pending foreclosure of the mortgage loan made by AEW to
the Partnership in the original principal amount of $21,360,000 (the
"Loan"). The Loan was secured by a first mortgage lien on the leasehold
estate on a parcel of land located in Orange County Florida and the
improvements located thereon.
The Loan became due and payable in accordance with its terms on October
26, 1995 and the Loan was not satisfied on such date. As of November
30, 1995, the outstanding indebtedness of the Loan was comprised of the
principal amount of $21,360,000 plus accrued and unpaid interest in the
amount of $14,454,058. The amount of such outstanding indebtedness
exceeded the fair market value of the Florida Property as of such date.
The Lender commenced an action to foreclose its mortgage on December 7,
1995 and a certificate of title was issued in connection with such
action on February 26, 1996.
Under the terms of the Settlement Agreement, AEW agreed to pay to the
Partnership a fee not to exceed $400,000 and to bear substantially all
costs and expenses relating to the consummation of the foreclosure
action provided the Partnership agreed to cooperate with AEW in
connection with the foreclosure action. On May 21, 1996, the
Partnership received $306,572 with respect to this fee.
<PAGE>
VISTA PROPERTIES
(A limited partnership)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
4 REAL ESTATE (continued)
As a result of the above transaction, the Partnership recognized during
the first quarter of 1996, a gain on the foreclosure of the Florida
Property of $19,429,198 ($207.25 per unit of limited partnership
interest).
Texas Property
The Texas Property, which is located in Irving, was net leased to
Integra-A Hotel and Restaurant Company, formerly known as Brock Hotel
Corporation ("Integra") for a stated term of 15 years beginning on
April 29, 1983. The initial annual basic rent was $852,500 and was to
increase in the fourth, seventh, tenth, and thirteenth year of the net
lease by a percentage equal to the rate of increase in a certain index
subject to certain minimum and maximum rentals.
Integra ceased paying rent for the period from October 1, 1985 through
December 31, 1986 and was in default of its net lease obligations to
the Partnership. Pursuant to a settlement reached with Integra on
December 30, 1986, an agreement was entered into, resolving Integra's
default under its net lease. The Partnership waived payment of the
unpaid rent for the period October 1, 1985 through May 31, 1986, in the
amount of $568,333 and reduced the rent payable under the net lease to
$776,000 per year commencing June 1, 1986 and ending May 31, 1991.
In December 1990, following a subsequent Integra default, the net lease
was amended and assigned to Showbiz Pizza Time, Inc. ("Showbiz"), a
Kansas Corporation. Rent payable pursuant to this Second Amendment to
and Assignment of Net Lease was reduced to $459,000 per annum
commencing June 1, 1991 through November 30, 1996. Beginning December
1, 1996, and continuing through May 31, 1998, the rent shall be the
greater of (i) the fair market rental or (ii) $459,000 per annum. At
December 1, 1996, management and the tenant agreed to continue the rent
at $459,000 per annum through May 31, 1998. In connection with the
Second Amendment, Hallwood Group Incorporated ("Hallwood"), the
guarantor of the net lease to Integra, paid $452,667 to the Partnership
representing rent due from November 1, 1990 through and including May
31, 1991. The payment of $452,667, plus $25,000 in accrued late
charges, represented the entire satisfaction of Hallwood's obligation
as guarantor of the net lease, with respect to rent due.
Due to the soft market conditions in the Irving, Texas area and the
estimated fair value of the Texas Property, management recorded a
write-down for impairment of $3,000,000 during 1991. Management has
determined that no additional write-down for impairment was required
for the years ended December 31, 1996, 1995 and 1994.
<PAGE>
VISTA PROPERTIES
(A limited partnership)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
4 REAL ESTATE (continued)
Minimum future net lease rental receipts as of December 31, 1996, are
as follows:
<TABLE>
<CAPTION>
Year ending December 31,
<S> <C>
1997 $ 459,000
1998 191,250
-------
$ 650,250
==========
</TABLE>
New York Property
The Partnership acquired an office building located at 250 Park Avenue
in New York City, New York. Office space is leased to various
unaffiliated third parties under operating leases with original terms
ranging from 5 to 20 years.
Minimum future rental receipts, excluding operating escalations and
other charges, due from tenants pursuant to the terms of existing
noncancellable leases, as of December 31, 1996, are approximately as
follows:
<TABLE>
<CAPTION>
Year ending December 31,
<S> <C>
1997 $ 14,956,000
1998 12,535,000
1999 11,409,000
2000 11,315,000
2001 11,221,000
Thereafter 52,685,000
---------------
$ 114,121,000
===============
</TABLE>
Each of the Partnership's properties are collateralized by mortgages
payable.
The holder of the mortgage loan on the New York Property has asserted
that such mortage loan became due and payable during 1996 and the
lender is currently attempting to foreclose on the New York Property
(Note 6).
<PAGE>
VISTA PROPERTIES
(A limited partnership)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
5 RECEIVABLES AND OTHER ASSETS
Receivables and other assets consist of the following:
<TABLE>
<CAPTION>
December 31,
-------------------------------
1996 1995
----------- -----------
<S> <C> <C>
Step rental receivable ................. $ 5,115,223 $ 4,754,322
Prepaid real estate taxes .............. 2,035,363 2,150,517
Leasing commissions, net ............... 2,325,472 2,361,332
Other .................................. 675,689 630,607
----------- -----------
$10,151,747 $ 9,896,778
=========== ===========
</TABLE>
Amortization of leasing commissions amounted to $1,066,340, $416,375
and $419,868 for the years ended December 31, 1996, 1995 and 1994,
respectively.
6 MORTGAGE LOANS PAYABLE
Mortgage loans payable consist of the following:
<TABLE>
<CAPTION>
December 31,
------------------------------
1996 1995
------------ ------------
<S> <C> <C>
New York Property - wraparound purchase
money note and mortgage ................ $ 90,160,000 $ 90,160,000
Florida Property - wraparound purchase
money note and mortgage (Note 4) ....... -- 21,360,000
Texas Property - wraparound purchase
money note and mortgage ................ 9,000,000 9,000,000
------------ ------------
$ 99,160,000 $120,520,000
============ ============
</TABLE>
<PAGE>
VISTA PROPERTIES
(A limited partnership)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
6 MORTGAGE LOANS PAYABLE (continued)
New York PM Note
The New York PM Note, which commenced in January of 1984, has a term of
40 years and is payable interest only to the extent that there is cash
flow from property operations, for the first 15 years of its term.
Interest not paid currently from cash flow from the New York Property
is deferred. The note bears interest at the rate of 16.5% per annum
simple interest plus additional interest commencing January 1, 1986 in
the amount of 20% of the gross rental income from the New York Property
in excess of $10,000,000. However, at no time may the effective
cumulative compounded annual yield on the outstanding principal balance
exceed 16.5%. For the years ended December 31, 1996, 1995 and 1994,
additional interest was $1,862,367, $2,003,048 and $2,085,566,
respectively. After the 15th year of the New York PM Note, debt service
payments will be recomputed based upon the then outstanding principal
amount of the note and deferred interest so that the entire outstanding
indebtedness will be fully amortized over the next 25 years in equal
monthly installments in arrears. The New York PM Note is secured by a
nonrecourse all-inclusive wraparound purchase money mortgage which is
inclusive of, and subordinate to, the first wraparound and the
underlying mortgages.
The New York PM Note permits the Partnership to defer payment of some
or all of the interests accrued on the New York PM Note, provided,
among other things, that the Partnership does not defer interest in an
amount that any time exceeds the aggregate debt service that would have
been due for the immediately preceding 84-month period. In August 1996,
the Partnership received notice from the holder of the New York PM Note
that the interest deferred exceeded the permitted deferral and that the
full debt service payment for interest accrued during August 1996 (in
the amount of $1,239,700) would be due and payable on September 1, 1996
and that, if such payment was not received, the New York Lender would
be entitled to accelerate the indebtedness secured by the New York
Mortgage and exercise all available remedies (including the
commencement of a foreclosure action against the New York Property).
The Partnership did not have sufficient funds to make the payment on
September 1, 1996, and, in October 1996, the New York Lender declared
the entire outstanding principal balance of $90,160,000, together with
all accrued and unpaid interest of approximately $104,882,000,
immediately due and payable, and thereafter commenced an action to
foreclose upon the New York Property. The total outstanding
indebtedness (including related deferred interest payable)
significantly exceeds the estimated fair market value of the New York
Property.
<PAGE>
VISTA PROPERTIES
(A limited partnership)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
6 MORTGAGE LOANS PAYABLE (continued)
The Partnership was notified on November 12, 1996 that on November 7,
1996 the Supreme Court of the State of New York in the County of New
York appointed Darrell Paster, of Ferrer, Paster & Enriquez as a
receiver of all earnings, revenues, rents, issues, profits and income
with respect to the New York Property during the pendency of the
foreclosure action.
A foreclosure of the New York Property would result in adverse tax and
economic consequences to limited partners. If the New York Property is
foreclosed upon, the Partnership estimates that as required by
generally accepted accounting principles, it will recognize a gain of
approximately $103,000,000 ($1,099 per unit of limited partnership
interest). In addition, the Partnership estimates that each limited
partner would recognize a taxable gain of approximately $1,412 per unit
of limited partnership interest, with no cash available for
distribution to the Partners. Any such foreclosure also would have a
significant impact on future operating revenues and expenses and cash
flow resulting from operations would be significantly reduced. The
Partnership is reviewing the options available to it with respect to
the potential foreclosure of the New York Property. Such options
include vigorous defense of the foreclosure action and a settlement
thereof with the least adverse affect to the Partnership.
Florida PM Note
The Florida PM Note, which commenced in June of 1983 and was foreclosed
on February 26, 1996 (Note 4), had a term of 40 years with payments of
interest only, to the extent that there was cash flow from the net
lease, for the first 15 years of its term, and an original issue
discount of $100,000. Interest not paid currently from cash flow from
the net lease was deferred. The Florida PM Note was collaterallized by
a nonrecourse wraparound purchase money mortgage which was subject to
an existing $12,000,000 mortgage. The interest rate on the Florida PM
Note was 17.5% ($3,738,000 per annum) payable monthly, in arrears.
After the 15th year, debt service payments were to be recomputed so
that the entire outstanding principal balance ($21,360,000), together
with interest on that amount (but not on the deferred interest), would
be fully amortized over the next 25 years in equal monthly
installments, in arrears at 17.5% per annum. The Florida PM Note became
due and payable in accordance with its terms on October 26, 1995 and
the loan was not satisfied on such date.
Texas PM Note
The Texas PM Note, which commenced in December of 1983, has a term of
15 years, originally bore interest at the rate of 17% per annum and is
payable interest only ($1,530,000 per annum) to the extent that there
is cash flow from the net lease, for its entire term. Interest not paid
currently from cash flow from the net lease is deferred. The Texas PM
Note is secured by a nonrecourse purchase money deed of trust which
<PAGE>
VISTA PROPERTIES
(A limited partnership)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
6 MORTGAGE LOANS PAYABLE (continued)
encumbers the Partnership's interest in the Texas Property. The Texas
PM Note may be prepaid, in whole or in part, at any time during its
term. In addition, NCNB Texas ("NCNB"), the holder of the underlying
debt, has the right to require a mandatory prepayment of the Texas PM
Note, including all accrued and unpaid interest thereon, following any
sale, transfer or encumbrance of the Texas Property by the Partnership
without its consent. On the 15th anniversary of the Texas PM Note
(December 1998), the outstanding principal balance ($9,000,000),
together with all deferred but unpaid interest thereon, is due and
payable.
Following the 1986 default by Integra on its net lease obligations,
NCNB agreed to a modification of the Texas PM Note to reduce the
interest rate thereunder to 13.25% per annum for the period commencing
May 1, 1986 and ending April 30, 1991, at which time the interest rate
was to return to 17%. NCNB was entitled to receive, at the maturity
date of the Texas PM Note, an additional amount equal to 70% of the
sales price of the Texas Property or, in the event the property is not
sold, 70% of the market value of the property in excess of $15,142,000
up to $17,713,000 and 30% of any portion of the sales price or the
market value in excess of $17,713,000. NCNB has further agreed that its
rate of return on the Texas PM Note may not at any time exceed a
compound yield of 18% per annum and will reduce future payments to the
extent necessary to achieve an 18% return. In connection with the 1990
amendment and assignment of the net lease to Showbiz, NCNB agreed to a
modification to reduce the stated interest rate to 10.25% from June 1,
1991 through the maturity date.
The Texas PM Note permits the Partnership to defer payment of some or
all of the interest accrued on the Texas PM Note, provided, among other
things, that the Partnership does not defer interest in an amount that
at any time exceeds $8,500,000. The Partnership does not expect to
exceed that maximum deferral amount prior to the maturity date in
December 1998. At that time, unless the Partnership is able to
refinance the Texas Mortgage or agree with the holder of the Texas
Mortgage (the "Texas Lender") on a restructuring of the Texas Mortgage,
the Texas Lender may accelerate the indebtedness secured by the Texas
Mortgage and exercise all available remedies (including the
commencement of a foreclosure against the Texas Property). A
foreclosure of the Texas Mortgage would have significant adverse tax
consequences to the limited partners of the Partnership with no cash
available for distribution to the limited partners.
<PAGE>
VISTA PROPERTIES
(A limited partnership)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
6 MORTGAGE LOANS PAYABLE (continued)
There is no assurance that the Partnership will be able to successfully
avoid a foreclosure of the New York Property, or refinance or
restructure the Texas Mortgage prior to the date that the Partnership
will have deferred the maximum amount of interest that may be deferred
under the terms of the Texas Mortgage. If both the New York Property
and the Texas Property are foreclosed, the Partnership would lose all
sources of revenue and would be forced to dissolve.
For the years ended December 31, 1996, 1995 and 1994, the Partnership
paid $7,202,164, $12,999,578, and $9,853,590, respectively, toward its
current mortgage loan interest obligations for all the mortgage loans
noted above.
7 DEFERRED INTEREST PAYABLE
Deferred interest payable is summarized as follows:
<TABLE>
<CAPTION>
December 31,
--------------------------------
1996 1995
------------ ------------
<S> <C> <C>
New York PM Note ..................... $107,877,317 $ 97,981,844
Florida PM Note (Note 4) ............. -- 14,454,058
Texas PM Note ........................ 7,145,319 6,581,819
------------ ------------
$115,022,636 $119,017,721
============ ============
</TABLE>
The deferred interest payable does not accrue additional
interest.
8 GROUND LEASES
The Florida Property was located on a parcel of land which was net
leased to the Partnership under a Florida Ground Lease. The Florida
Ground Lease was for a 99-year term and had an initial base rent of
$300,000 per annum payable in equal monthly installments of $25,000.
The initial base rent increased annually by 14.5% per annum,
compounded, to a maximum of $1,331,920 which would have occurred in
1996. This Florida Property was foreclosed upon on February 26, 1996
(Note 4).
<PAGE>
VISTA PROPERTIES
(A limited partnership)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
8 GROUND LEASES (continued)
The Texas Property is located on a parcel of land which is net leased
to the Partnership under a Texas Ground Lease. The Texas Ground Lease
commenced on December 15, 1983, has a 99- year term and has a base rent
of $100,000 per annum payable in equal monthly installments of $8,333,
plus incentive rent equal to 10% of gross income from the Texas
Property in excess of $852,000. Other than the Partnership's
obligations to pay ground rent, the obligations of the Partnership will
be performed by the lessee's performance of its obligations under its
net lease. During 1996, the Partnership paid $100,000 in ground rent
expense.
The New York Property is located on a parcel of land which is owned by
the seller and net leased to the Partnership. The term of the New York
Ground Lease expires on March 31, 2011 and the Partnership has three
21-year renewal options. The New York Ground Lease has an initial base
rent of $600,000 per annum, payable in equal monthly installments of
$50,000, and will be increased in April 1998 to $615,000 per annum. The
annual rent payable for each optional renewal term will be fixed at the
beginning of such terms at the greater of $615,000 or an amount equal
to 6% of the then fair market value of the New York land. During 1996,
the Partnership paid $600,000 in ground rent expense.
Minimum future ground rent payments due under the Partnership's ground
leases, not including any incentive rent under the Texas Ground Lease,
is as follows:
<TABLE>
<CAPTION>
Texas New York
Property Property Total
----------- ----------- -----------
<S> <C> <C> <C>
Year ending December 31,
1997 $ 100,000 $ 600,000 $ 700,000
1998 100,000 611,250 711,250
1999 100,000 615,000 715,000
2000 100,000 615,000 715,000
2001 100,000 615,000 715,000
Thereafter 8,200,000 5,688,750 13,888,750
----------- ----------- -----------
$ 8,700,000 $ 8,745,000 $17,445,000
=========== =========== ===========
</TABLE>
<PAGE>
VISTA PROPERTIES
(A limited partnership)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
9 STOCK OPTIONS
On May 29, 1987, as a condition of the lease modification with Integra,
Integra issued warrants in registered form to purchase 93,747 shares of
Integra's common stock at an exercise price of $12.50 per share, of
which 937 shares were issued to the general partners. The individual
warrants to purchase one share of common stock are exercisable on or
before July 1, 2006. Limited partners received one warrant for each
limited partnership unit owned.
10 COMMITMENTS AND CONTINGENCIES
Status of Integrated
On February 13, 1990, Integrated, the sole shareholder of the
Management and Acquisitions General Partners, filed a voluntary
petition for reorganization under Chapter 11 of the United States
Bankruptcy Code. While Integrated's bankruptcy did not directly affect
the Partnership's operations, it has resulted in certain changes.
On August 8, 1994, The Bankruptcy Court confirmed a Plan of
Reorganization (the "Steinhardt Plan") proposed by Steinhardt
Management Company, Inc. and the Official Committee of Subordinated
Bondholders and on November 3, 1994, the Steinhardt Plan was
consummated. Presidio purchased substantially all of the assets of
Integrated including its interest in the Management and Acquisitions
General Partners. Presidio is a British Virgin Islands corporation
owned 12% by IR Partners, a general partnership, and 88% by former
creditors of Integrated.
The Partnership filed a Proof of Claim against Integrated in
Integrated's Chapter 11 proceeding with respect to certain potential
and unliquidated claims and disputes involving Integrated and its
affiliates. These claims and disputes have been resolved and approved
by the Bankruptcy Court on January 22, 1996. During 1996, the
Partnership received approximately $272,000 with respect to these
claims, which is included in other income in the statements of
operations.
<PAGE>
VISTA PROPERTIES
(A limited partnership)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
11 RECONCILIATION OF NET INCOME (LOSS) AND NET LIABILITIES PER FINANCIAL
STATEMENTS TO TAX BASIS
The Partnership files its tax returns on an accrual basis. The
Partnership has computed depreciation for tax purposes using the
Accelerated and Modified Accelerated Cost Recovery Systems, which is
not in accordance with generally accepted accounting principles.
A reconciliation of net income (loss) per financial statements to the
tax basis of accounting is as follows:
<TABLE>
<CAPTION>
Year ended December 31,
1996 1995 1994
------------ ------------ ------------
<S> <C> <C> <C>
Net income (loss) per
financial statements ........... $ 4,782,912 $(11,140,689) $(12,282,498)
Tax depreciation in excess of
financial statement depreciation (229,785) (3,875,102) (3,861,325)
Gain in foreclosure of property .... 11,788,724 -- --
Expense accruals recorded for
financial statements in excess
of tax basis ................... 809,456 -- --
Interest expense recorded for
financial statements in excess
of tax basis ................... 17,661,137 -- --
------------ ------------ ------------
Net income (loss) per tax basis .... $ 34,812,444 $(15,015,791) $(16,143,823)
============ ============ ============
</TABLE>
<PAGE>
VISTA PROPERTIES
(A limited partnership)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
11 RECONCILIATION OF NET INCOME (LOSS) AND NET LIABILITIES PER FINANCIAL
STATEMENTS TO TAX BASIS (continued)
The differences between the Partnership's net liabilities per financial
statements and the tax basis of accounting are as follows:
<TABLE>
<CAPTION>
December 31,
--------------------------------
1996 1995
------------- -------------
<S> <C> <C>
Net liabilities per financial statements .. $(109,663,603) $(114,446,515)
Write-down for impairment ................. 3,000,000 3,000,000
Cumulative tax depreciation in excess of
financial statement depreciation ...... (54,434,536) (61,604,070)
Deferred interest ......................... 17,661,137 --
Cost of tenant improvements written-off for
financial statement purposes .......... 3,954,756 --
50% of acquisition fees paid to affiliates
expensed for tax purposes ............. (2,569,976) (3,004,621)
Income and expense accruals ............... 809,456 --
Syndication costs ......................... 5,333,790 5,333,790
------------- -------------
Net liabilities per tax basis ............. $(135,908,976) $(170,721,416)
============= =============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
VISTA PROPERTIES
(A limited partnership)
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1996
Costs Reductions
Capitalized Recorded
Subsequent to Subsequent to
Initial Cost Acquisition Acquistion
----------------------- ----------------------------- -------------
Buildings
and
Description Encumbrances Land Improvements Improvements Carrying Costs Write-downs
<S> <C> <C> <C> <C> <C> <C>
Texas Property
Net leased to
Showbiz Pizzatime, Inc. $ 16,145,319 $ -- $ 10,000,000 $ -- $ 563,989 $3,000,000
New York, Property
New York, New York 198,037,317 -- 98,000,000 32,040,821 6,867,307 --
----------- ------ ------------ ------------ ----------- ----------
TOTALS $214,182,636 $ -- $108,000,000 $ 32,040,821 $ 7,431,296 $3,000,000
============ ====== ============ ============ =========== ==========
<CAPTION>
<PAGE>
Gross Amount at Which Life
Carried at Close of Period On Which
------------------------------------------ Depreciation in
Buildings Latest Income
and Accumulated Date of Date Statement is
Description Land Improvements Total Depreciation Construction Acquired Computed
----------- ---- ------------ ----- ------------ ------------ -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Texas Property $ --
Net leased to
Showbiz Pizzatime, Inc. $ 10,563,989 $ 10,563,989 $ 3,455,298 1982 12/83 40 years
--
New York, Property
New York, New York $ -- 133,908,128 133,908,128 47,126,548 1924 1/84 20-40 years
----- ------------- ------------ -----------
TOTALS $ -- $ 144,472,117 $144,472,117 $50,581,846
===== ============= ============ ===========
(1) Aggregate cost for federal income tax purposes is $148,856,897
(2) Consists of mortgage loans nd deferred interest payable at December 31,
1996
(3) Write-down for impairment due to decline in estimated fair value.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
VISTA PROPERTIES
(A limited partnership)
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
(A) RECONCILIATION OF REAL ESTATE OWNED:
Year Ended December 31,
------------------------------------------------
1996 1995 1994
------------- ------------- -------------
<S> <C> <C> <C>
Balance at the beginning of year (1) $ 170,379,274 $ 169,084,455 $ 166,490,980
Additions during year - purchases 2,399,849 1,294,819 2,593,475
------------- ------------- -------------
172,779,123 $ 170,379,274 $ 169,084,455
Other changes
Tenant improvements (2) (3,954,756) -- --
Foreclosure of
Florida Property (3) (24,352,250) -- --
------------ ------------ ------------
Balance at the end of year $144,472,117 $170,379,274 $169,084,455
============ ============ ============
(1) Includes the initial cost of the properties plus acquisition and closing
costs and write-downs for impairment.
(2) Includes tenant improvements at the New York Property which were
written-off during 1996.
(3) Represents the cost basis of the Florida Property which was foreclosed
during 1996.
</TABLE>
<PAGE>
(B) RECONCILIATION OF ACCUMULATED DEPRECIATION:
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------------
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Balance at the beginning of year $ 54,673,898 $ 49,484,005 $ 44,239,152
Additions during year-
depreciation (1) 7,523,512 5,189,893 5,244,853
------------ ------------- ------------
$ 62,197,410 $ 54,673,898 $ 49,484,005
Other changes
Tenant improvements (2) (3,954,756) -- --
Foreclosure of Florida
Property (3) (7,660,808) -- --
------------ ------------- ------------
Balance at the end of year $ 50,581,846 $ 54,673,898 $ 49,484,005
============ ============= ============
(1) Depreciation is provided on buildings using the straight-line method over
the useful life of the property, which is estimated to be 40 years for
buildings and 20 years for improvements.
(2) Includes tenant improvements at the New York Property which were
written-off during 1996.
(3) Represents the accumulated depreciation of the Florida Property which was
foreclosed during 1996.
</TABLE>
<PAGE>
Item 9. Disagreements on Accounting and Financial Disclosure
None.
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant
Acquisitions General Partner
As of March 1, 1997, the names, offices held and the ages of the executive
officers and directors of the Management and Acquisitions General Partners are
as follows, respectively:
<TABLE>
<CAPTION>
Has served as a Director and/or
Officer of the Managing General
Name Age Positions Held Partner since
---- --- -------------- -------------
<S> <C> <C> <C>
Frank Goveia 50 Vice President May 1990
Mark Plaumann 41 Director and Vice President March 1995
Frederick Simon 42 Director and President February, 1995
Jay L. Maymudes 36 Vice President, Secretary and November 1994
Treasurer
Arthur H. Amron 40 Vice President and Assistant November 1994
Secretary
Robert Holtz 29 Director and Vice President November 1994
</TABLE>
Each director and officer of the Management and Acquisitions General Partners
will hold office until the next annual meeting of the Management and/or
Acquisitions General Partner and until his next successor is elected and
qualified.
Frank Goveia has served as Chief Operating Officer and Senior Vice President of
Wexford Management Corp. since November 1995 and has been the Chief Operating
Officer and a Senior Vice President of Wexford since January 1996. Mr. Goveia
was associated with Integrated from February 1983 to November 1994, and was a
Senior Vice President since 1990, primarily involved in financial reporting and
controls.
Mark Plaumann has served as Director and Vice President of Presidio since March
1995. Mr. Plaumann has been a Senior Vice President of Wexford since January
1996. From February 1995 through December 1995, Mr. Plaumann had been a Vice
President of Wexford Management Corp. Mr. Plaumann has been a director of
Technology Service Group, Inc. a company engaged in the design, development,
manufacturing and sale of public communications products and services, since
March 1997, and a director in Wahlco Environmental Systems, Inc., a company
engaged in the sale of air pollution control and specialty engineered products,
since June 1996. Mr. Plaumann was employed by Alvarez and Marsel, Inc. as a
Managing Director from February 1990 through January 1995, by American
Healthcare Management Inc. from February 1985 to January 1990 and by Ernst &
Young from January 1973 to February 1985.
<PAGE>
Frederick Simon was a Senior Vice President of Wexford Management Corp. from
November 1995 to December 1995. Since January 1996, Mr. Simon has been a Senior
Vice President of Wexford. He is also a Vice President of Resurgence Properties
Inc. (AResurgence@), a company engaged in diversified real estate activities.
From January 1994 through November 1995, Mr. Simon was an independent real
estate investor. From 1984 through 1993, Mr. Simon was Executive Vice President
and a Partner of Greycoat Real Estate Corporation, the United States arm of
Greycoat PLC, a London stock exchange real estate investment and development
company.
Jay L. Maymudes has been the Chief Financial Officer, a Vice President and
Treasurer of Presidio since its formation in August 1994 and the Chief Financial
Officer and a Vice President of Resurgence since July 1994, Secretary of
Resurgence since January 1995 and Assistant Secretary from July 1994 to January
1995. Since January 1, 1996, Mr. Maymudes has been the Chief Financial Officer
and a Senior Vice President of Wexford and was the Chief Financial Officer and a
Vice President of Wexford Management Corp. from July 1994 to December 1995. From
December 1988 through June 1994, Mr. Maymudes was the Secretary and Treasurer,
and since February 1990 was the Senior Vice President of Dusco, Inc., a real
estate investment advisor.
Arthur H. Amron has been a Vice President of certain subsidiaries of Presidio
since November 1994. Since January 1996, Mr. Amron has been a Senior Vice
President and the General Counsel of Wexford. Also, from November 1994 to
December 1995, Mr. Amron was the General Counsel and, since March 1995, a Vice
President of Wexford Management Corp. From 1992 through November 1994, Mr. Amron
was an attorney with the law firm of Schulte, Roth and Zabel. Previously, Mr.
Amron was an attorney with the law firm of Debevoise & Plimpton.
Robert Holtz has been a Vice President and Secretary of Presidio since its
formation in August 1994 and a Vice President and Assistant Secretary of
Resurgence since its formation in March 1994. Since January 1, 1996, Mr. Holtz
has been a Senior Vice President and member of Wexford and was a Vice President
of Wexford Management Corp. from May 1994 to December 1995. From 1989 through
May 1994, Mr. Holtz was employed by, and since 1993 was a Vice President of,
Bear Stearns Real Estate Group, Inc., where he was responsible for analysis,
acquisitions and management of the assets owned by Bear Stearns Real Estate and
its clients.
<PAGE>
Associate General Partner
Asta Associates Limited partnership, a Connecticut limited partnership, is the
Associate General Partner of Registrant. Its general partner is Z Square G
Partners II, a New York general partnership which was formed in October, 1982.
Arthur H. Goldberg and Z Square Partners are the general partners of Z Square G
Partners II. Z Square Partners is a New York general partnership which was
formed in October, 1982. The general partners of Z Square Partners are Selig A.
Zises and Jay H. Zises. Asta Associates Limited Partnership notified the
Partnership of its withdrawal as Associate General Partner of the Partnership.
The withdrawal was effective as of March 28, 1995, 90 days following written
notice to Limited Partners. Upon the effective date of the withdrawal, Presidio
Boram Corp. ("Boram"), a subsidiary of Presidio became the Associate General
Partner. In October 1996, the parties determined that the withdrawal of Asta as
Associate General Partner and the appointment of Boram was based upon a mutual
mistake and those transactions were rescinded.
Arthur H. Goldberg, age 53, is the President of Manhattan Associates. He served
as President and Chief Operating Officer of Integrated for more than five years
prior to his resignation in January, 1990. Mr. Goldberg also served as Chief
Executive Officer of Integrated from February, 1989, as a member of the
Executive Committee of the Board of Directors from August, 1989, each until his
resignation in January, 1990. He has been a member of the Bar of the State of
New York since 1967. He is a graduate of New York University School of commerce
and its School of Law.
Selig A. Zises, age 54, was a Director of Integrated until April, 1990 and was
the Chairman of the Board of Integrated and Chief Executive Officer from 1969 to
1989. He is currently the President of Associated Ventures Management, a private
investment partnership.
Jay H. Zises, age 52, was a Director of Integrated until April 1990 and from
December 1977 to 1989 was Chairman of the Executive Committee of the Board of
Directors of Integrated. He is currently President and general partner of
Associated Capital, a private investment partnership.
Registrant believes, based on written representations received by it, that for
the year ended December 31, 1996 all filing requirements under Section 16(a) of
the Securities Exchange Act of 1934 applicable to beneficial owners of
Registrant's securities, Registrant's general partners and the officers and
directors of such general partners, were complied with.
Item 11. Executive Compensation
Registrant is not required to pay the officers or directors of the Management,
Acquisitions or Associate General Partners any direct compensation, and no such
compensation was paid during the fiscal year ended December 31, 1996. Certain
officers and directors of the Management General Partner receive compensation
from the Management General Partner and/or its affiliates (but not from
Registrant) for services performed for various affiliated entities, which may
include services performed for Registrant. See "Item 13. Certain Relationships
and Related Transactions."
Item 12. Security Ownership of Certain Beneficial Owners and Management
Security Ownership of Certain Beneficial Owners
As of March 1, 1997, no person owned of record or was known by Registrant to own
beneficially more than 5% of the Units of Registrant.
Security Ownership of Management
As of March 1, 1997, none of the Management, Acquisitions or Associate General
Partners beneficially owned any Units of Registrant.
<PAGE>
As of March 1, 1997, none of the officers and directors of the Management
General Partner or the Acquisitions General Partner was known by Registrant to
beneficially own Units or shares of Presidio, the parent of the Management
General Partner and the Acquisitions General Partner.
The following table sets forth certain information known to Registrant with
respect to beneficial ownership of the Class A Shares of Presidio as of March 1,
1997, by each person who beneficially owns 5% or more of the Class A Shares,
U.S. $.01 par value. The holders of Class A Shares are entitled to elect three
out of the five members of Presidio's Board of Directors with the remaining two
directors being elected by holders of the Class B Shares, U.S. $.01 par value of
Presidio. Both Class A and Class B shares are entitled to one vote. Class B
shares, if converted, are convertible to an equal number of Class A shares.
There are 8.8 million Class A shares and 1.2 million Class B shares.
<TABLE>
<CAPTION>
Beneficial Ownership
Name of Beneficial Owner Number of Shares Percentage Outstanding
- ------------------------ ---------------- ----------------------
<S> <C> <C>
Thomas F. Steyer/Fleur A. Fairman 4,553,560(1) 51.8%
John M. Angelo/Michael L. Gordon 1,231,762(2) 14.0%
Intermarket Corp. 1,000,918(3) 11.4%
M.H. Davidson & Co. 474,205(4) 5.4%
- --------------------
(1) As the managing partners of each of Farallon Capital Partners, L.P.
("FCP"), Farallon Capital Institutional Partners, L.P. ("FCIP"), Farallon
Capital Institutional Partners II, L.P. ("FCIP II") and Tinicum Partners,
L.P. ("Tinicum"), (collectively, the "Farallon Partnerships"), may each be
deemed to own beneficially for purposes of Rule 13d-3 of the Exchange Act
the 1,397,318, 1,610,730, 607,980 and 241,671 shares held, respectively, by
each of such Farallon Partnerships.
Farallon Capital Management, LLC ("FCMLLC"), the investment advisor to
certain discretionary accounts which collectively hold 695,861 shares and
Enrique H. Boilini, David I. Cohen, Joseph F. Downes, Jason M. Fish, Andrew
B. Fremder, William F. Mellin, Steven L. Millham, Meridee A. Moore and
Thomas F. Steyer, as a managing member of FCMLLC (collectively, the
"Managing Members") may be deemed to be the beneficial owner of all of the
shares owned by such discretionary accounts. FCMLLC and each Managing
Member disclaims any beneficial ownership of such shares.
Farallon Partners, LLC ("FPLLC") (the general partner of FCP, FCIP, FCIP II
and Tinicum), and each of Fleur A. Fairman, Mr. Boilini, Mr. Cohen, Mr.
Downes, Mr. Fish, Mr. Fremder, Mr. Mellin, Mr. Millham, Ms. Moore and Mr.
Steyer, each as managing member of FPLLC (collectively, the "Managing
Members"), may be deemed to be the beneficial owner of all of the shares
owned by FCP, FCIP, FCIP II and Tinicum. FPLLC and each managing Member
disclaims any beneficial ownership of such shares.
<PAGE>
(2) John M. Angelo and Michael L. Gordon, the general partners and controlling
persons of AG Partners, L.P., which is the general partner of Angelo,
Gordon & Co., L.P., may be deemed to have beneficial ownership under
Section 13(d) of the Exchange Act of the securities beneficially owned by
Angelo, Gordon & Co., L.P. and its affiliates. Angelo, Gordon & Co., L.P.,
a registered investment advisor, serves as general partner of various
limited partnerships and as investment advisor of third party accounts with
power to vote and direct the disposition of Class A Shares owned by such
limited partnerships and third party accounts.
(3) Intermarket Corp. serves as General Partner for certain limited
partnerships and as investment advisor to certain corporations and
foundations. As a result of such relationships, Intermarket Corp. may be
deemed to have the power to vote and the power to dispose of Class A shares
held by such partnerships, corporations and foundations.
(4) Marvin H. Davidson, Thomas L. Kempner Jr., Stephen M. Dowicz, Scott E.
Davidson and Michael J. Leffell, the general partners, members and
stockholders of certain entities that are general partners or investment
advisors of Davidson Kempner Endowment Partners, L.P., Davidson Kempner
Partners, L.P., Davidson Kempner Institutional Partners, L.P., M.H.
Davidson and Co. Davidson Kempner International Ltd. (collectively, the
"Investment Funds"), may be deemed to be the beneficial owners under
Section 13(d) of the Exchange Act of the securities beneficially owned by
the Investment Funds and their affiliates.
In addition, Mr. Kempner owns 800 shares and may be deemed to beneficially
own certain securities helb by certain foundations and trusts. Mr. Kempner
disclaims beneficial ownership of such shares.
</TABLE>
All of Presidio's Class B Shares are owned by IR Partners. Such Class B Shares
are convertible in certain circumstances into 1,200,000 Class A Shares; however,
such shares are not convertible at present. IR Partners is a general partnership
whose general partners are Steinhardt Management, certain of its affiliates and
accounts managed by it and Roundhill Associates. Roundhill Associates, is a
limited partnership whose general partner is Charles E. Davidson, the principal
of Presidio Management, the Chairman of the Board of Presidio and a Member of
Wexford. Joseph M. Jacobs, the Chief Executive Officer and President of Presidio
and a Member and the President of Wexford, has a limited partner's interest in
Roundhill Associates. Pursuant to Rule 13d-3 under the Exchange Act, each of
Michael H. Steinhardt, the controlling person of Steinhardt Management and its
affiliates and Charles E. Davidson may be deemed to be beneficial owners of such
1,200,000 shares.
Shares held by each Class A Director of Presidio were issued pursuant to a
Memorandum of Understanding Regarding Compensation of Class A Directors of
Presidio. (See "Executive Compensation - Compensation of Directors.")
The address of Thomas F. Steyer and the other individuals mentioned in footnote
1 to the table above (other than Fleur A. Fairman) is c/o Farallon Capital
Partners, L.P., One Maritime Plaza, San Francisco, California 94111 and the
address of Fleur A. Fairman is c/o Farallon Capital Management, Inc., 800 Third
Avenue, 40th Floor, New York, New York 10022. The address of Angelo, Gordon &
Co., L.P. and its affiliates is 245 Park Avenue, 26th Floor, New York, New York
10167. The address for Intermarket Corp. is 667 Madison Avenue, New York, New
York 10021. The address for M. H. Davidson is 885 Third Avenue, New York, New
York 10022
<PAGE>
Item 13. Certain Relationships and Related Transactions
with Management.
The financial interests in Registrant of the Management, Acquisitions and
Associate General Partners are set forth under the heading Profits and Losses
and Cash Distributions at pp. 58-59 of the Prospectus.
Taxable income generated by Registrant during the year ended December 31, 1996
allocated to each of the Management, Acquisitions and Associate General Partners
were $34,812, $34,812 and $278,500, respectively.
Transactions with Affiliates of Management
Vista Management has been retained by Registrant to perform certain property
management services for all properties of Registrant which are not subject to
long-term net leases. As compensation for such services, Vista Management is
entitled to receive up to 6% of the annual gross revenues of the properties
where it performs all leasing and re-leasing services and up to 3% of gross
revenues where it does not perform such services. The fee paid to Vista
Management is reduced by the amount of any fee paid to unaffiliated third
parties for such management. For the fiscal year ended December 31, 1996,
$587,941 was earned by Vista Management for such services, of which $416,007 was
paid to unaffiliated third parties. As of December 31, 1996, $1,889,508 of fees
due to Vista Management were deferred. The Management General Partner has
suspended payment of the fee earned by Vista Management to slow the depletion of
Registrant's working capital reserve balance.
Indebtedness of Management
No officer or director of the General Partners or any associate of the foregoing
was indebted to Registrant at any time during the fiscal year ended December 31,
1996.
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K.
(a) The following documents are filed as part of this report:
1. Financial Statements - The list of Financial
Statements appears on page 8.
2. Schedules - The list of Financial Statement
Schedules appears on page 8.
3. Exhibits - See the Exhibit Index at page 35 of this Annual Report on
Form 10-K.
(b) Reports on Form 8-K.
Registrant filed the following reports on Form 8-K during the last quarter of
the fiscal year.
Current report on Form 8-K dated December 6, 1996
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
VISTA PROPERTIES
By: IR VISTA REALTY CORP.
Management General Partner
By: /s/Frederick Simon Dated: April 10, 1997
------------------
Frederick Simon
President
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following persons on behalf of Registrant and in their
capacities as directors and/or officers (as to the Management General Partner)
on the date indicated.
Dated: April 10, 1997 By: /s/Frederick Simon
------------------
Frederick Simon
Director and President
(Principal Executive Officer)
Dated: April 10, 1997 By: /s/Mark Plaumann
----------------
Mark Plaumann
Director and Vice President
Dated: April 10, 1997 By: /s/Jay L. Maymudes
------------------
Jay L. Maymudes
Vice President, Secretary and
Treasurer
(Principal Financial Officer
and Principal
Accounting Officer)
<PAGE>
EXHIBIT INDEX
Exhibit
- -------
3(A) Second Amended and Restated Certificate of Limited Partnership.*
3(B) Second Amended and Restated Agreement of Limited Partnership*
10(A) Amended and Restated Agent's Agreement between Registrant and
Resources Property Management Corp. with respect to management
services.*
10(E) Amended and Restated Agreement dated July 6, 1983, between IR Vista
Realty Corp., Asta Associates Limited Partnership, Z Square G
Partners II and Integrated Resources, Inc. with respect to
consulting services.*
10(F) Ground Lease Agreement with respect to the Orlando Land from AEW # 2
Trust ("AEW") to the Registrant.*
10(G) Purchase Money Mortgage Note from Registrant to AEW.*
10(H) Mortgage and Security Agreement from Registrant to AEW.*
10(I) Assignment and Assumption of Martin Marietta Corporation Net Lease
("MMC Net Lease").*
10(J) Letter from Martin Marietta re: the MMC Net Lease.*
10(K) MMC Net Lease - Agreement of Lease.*
10(L) MMC Net Lease - First Amendment to Agreement of Lease.*
10(M) Option Agreement between Registrant and AEW.*
10(N) Mortgage and Security Agreement from AEW to Registrant ("Reciprocal
Mortgage").*
10(O) Collateral Assignment of Mortgage and Note from AEW to Registrant.*
10(P) Collateral Assignment of Leases and Rent from AEW to Registrant.*
10(Q) Paying Agent and Agency Agreement among Registrant, AEW and State
Street Bank and Trust Company.*
10(R) Deed of Trust Note dated December 15, 1983 from Registrant to
Republic-Bank Dallas, N.A., as Trustee ("RepublicBank").*
10(S) Deed of Trust dated December 15, 1983 from Registrant to Billy J.
Harris, as trustee, for the benefit of RepublicBank.*
10(T) Ground Lease Agreement dated December 15, 1983 between RepublicBank,
as lessor, and Registrant, as lessee.*
10(U) Net Lease Agreement dated as of April 29, 1983 between RepublicBank,
as landlord and Brock Hotel Corporation, as tenant.*
<PAGE>
10(V) Paying Agent Agreement dated December 15, 1983 among Registrant,
RepublicBank and Mellon Financial Services Real Estate Investment
Management Group.*
10(W) Consolidation Modification and Extension Agreement dated December
28, 1977 between Parkbuilt Associates, Inc. ("Parkbuilt") and
Emigrant Savings Bank ("Emigrant").*
10(X) Mortgage dated December 28, 1977 between Parkbuilt, as mortgagor,
and Emigrant, as mortgagee.*
10(Y) Collateral Assignment of Leases dated December 28, 1977 between
Parkbuilt, as assignor, and Emigrant, as assignee.*
10(Z) Mortgage dated December 28, 1977 between Febe Associates ("Febe"),
as mortgagor, and Bankers Life Company ("Bankers"), as mortgagee.*
10(aa) Collateral Assignment of Lease between Febe, as assignor, and
Bankers, as assignee.*
10(bb) Wraparound Mortgage Note dated January 4, 1984 by Park 250
Associates ("Park") to Bankers Trust Company, as Trustee ("BTC").*
10(cc) Wraparound Mortgage dated January 4, 1984 between Park, as
mortgagor, and BTC, as mortgagee.*
10(dd) First Amendment to Wraparound Mortgage dated January 4, 1984 among
Park, Registrant and BTC.*
10(ee) Purchase Money Mortgage Note dated January 4, 1984 by Registrant to
BTC.*
10(ff) Purchase Money Wraparound Mortgage dated January 4, 1984 between
Registrant, as mortgagor, and BTC, as mortgagee.*
10(gg) Agreement of Lease dated as of April 1, 1961 between New York State
Realty and Terminal Company, as lessor, and 250 Park Avenue
Corporation, as lessee.*
10(hh) Amendment to Agreement of Lease dated December 28, 1977 between Febe
Associates, as lessor, and 250 Park Avenue Corporation, as
lessee.*
10(ii) Paying Agent and Agency Agreement dated January 4, 1984 among
Registrant, BTC and State Street Bank and Trust Company.*
10(jj) Collateral Assignment of Mortgage dated January 4, 1984 between BTC,
as assignor, and Registrant, as assignee.*
10(kk) Reciprocal Mortgage dated January 4, 1984 between BTC, as mortgagor,
and Registrant, as mortgagee.*
10(ll) Land Option Agreement dated January 4, 1984 between BTC, as
optionor, and Registrant, as optionee.*
10(mm) Letter Agreement dated January 4, 1984 regarding survival of Land
Option Agreement.*
<PAGE>
10(nn) Option Agreement dated January 4, 1984 between Registrant, as
optionor, and BTC, as optionee.*
10(oo) First Amendment to Net Lease, dated as of June 1, 1986, between
Registrant and Brock.*
10(pp) Agreement of Modification of Deed of Trust and Note, dated as of May
1, 1986, between Registrant and the mortgagee.*
10(qq) Modification of Guaranty between Registrant and the Hallwood Group
Incorporated dated December 13, 1990.*
10(rr) Second Agreement of Modification of Deed of Trust and note between
Registrant and NCNB Texas dated December 31, 1990.*
10(ss) Second Amendment to and Assignment of Net Lease between Registrant,
Integra, and Showbiz Pizza Time Inc. dated December 13, 1990.*
10(tt) Settlement Agreement between Registrant and AEW #2 Trust dated
January 12, 1996.*
10(uu) Affidavit of Mark A. Albertson, a Director of Aldrich, Eastman &
Waltch, L.P., the attorney-in-fact for Plaintiff, Bankers Trust
Company, as Trustee for the General Motors Hourly-Rate Employees
Pension Trust, and as Trustee for the General Motors Retirement
Program for Salaried Employee's Trust "Plaintiff", in support of
application for appointment of a Receiver, as filed in the Supreme
Court of the State of New York County of New York on October 29,
1996 against Vista Properties "Defendant". (1)
10(vv) Summons filed by Bankers Trust Company, as Trustee for the General
Motors Hourly-Rate Employees Pension Trust, and as Trustee for the
General Motors Retirement Program for Salaried Employees Trust
against Vista Properties, as filed in the Supreme Court of the State
of New York County of New York on October 31, 1996. (1)
10(ww) Order appointing Receiver, at IAS Part 32 of the Supreme Court of
the State of New York, held in and for the County of New York, at
the Courthouse, 60 Centre Street, New York, New York on November 7,
1996. (1)
28(A) Prospectus of Registrant, dated September 2, 1983, as supplemented
on October 17, 1983, November 11, 1983, November 29, 1983, January
25, 1984, March 2, 1984, July 9, 1984, August 5, 1984 and September
14, 1984.*
28(B) Report of Registrant on Form 10-K for fiscal year ended December 31,
1983, pages 3-6.*
28(C) Report of Registrant on Form 8-K dated December 30, 1986.*
28(D) Report of Registrant on Form 8-K dated December 20, 1990.*
28(E) Report of Registrant on Form 8-K dated December 6, 1996*
- ------------
* Incorporated by Reference
(1) filed herewith
EXHIBIT 10(uu)
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
- ----------------------------------------x
BANKERS TRUST COMPANY, as Trustee :
for the General Motors Hourly-Rate
Employees Pension Trust, and as :
Trustee for the General Motors
Retirement Program for Salaried :
Employes Trust,
: Index No. _______
Plaintiff,
:
- against -
:
VISTA PROPERTIES, a California AFFIDAVIT OF
limited partnership, NORLANDER : MARK A. ALBERTSON
CONTRACTING CORPORATION, ACTION IN SUPPORT OF
GLASS CO., INC., NEW YORK CITY : APPLICATION FOR
ENVIRONMENTAL CONTROL BOARD, THE APPOINTMENT OF A
PEOPLE OF THE STATE OF NEW YORK, : RECEIVER
THE CITY OF NEW YORK, "JOHN DOE"
NOS. ONE TO ONE HUNDRED, "JOHN DOE :
CORPORATION" NOS. ONE TO ONE
HUNDRED, AND "JOHN DOE COMPANY" :
NOS. ONE TO ONE HUNDRED,
:
Defendants.
:
The Names of the "John Doe"
Defendants Being Fictitious and :
Unknown to Plaintiff, the Persons
and Entities Intended Being Those :
Who May Be in Possession of, or May
Have Rights, Possessory Liens or :
Other Interests in the Premises
Herein Described. :
- ----------------------------------------x
COMMONWEALTH OF MASSACHUSETTS )
) ss.:
COUNTY OF SUFFOLK )
MARK A. ALBERTSON, being duly sworn, deposes and says:
1. I am a Director of Aldrich, Eastman & Waltch, L.P., the
attorney-in-fact for plaintiff, Bankers Trust Company, as Trustee for the
General Motors Hourly-Rate Employees Pension Trust, and as Trustee for the
General Motors Retirement Program for Salaried Employes Trust ("Plaintiff"), and
I am personally familiar with the subject matter of this action. I respectfully
submit this affidavit in support of Plaintiff's application for the appointment
of a receiver of the Mortgaged Property (hereinafter described) during the
<PAGE>
pendency of this foreclosure action. As set forth more fully below, the Mortgage
(as hereinafter defined) that Plaintiff seeks to foreclose provides, in relevant
part, that, upon the occurrence of an Event of Default under the Mortgage, the
mortgagee will be entitled to "receive and collect the rent" under any and all
leases of space in the Mortgaged Property, and will be entitled to the
appointment of a receiver for such purpose; the Mortgage further provides that,
"after the happening of any Event of Default and the acceleration of the
maturity of the Indebtedness, immediately upon the commencement of any action or
proceeding by the Mortgagee to foreclose this Mortgage, the Mortgagor shall, if
requested by the Mortgagee, consent to the appointment of a receiver or
receivers of the Mortgaged Property or any part thereof or any business or
businesses conducted thereon and of all the earnings, revenues, rents, issues,
profits and income thereof".
2. Plaintiff is a New York banking corporation having an
office at 280 Park Avenue, New York, New York 10017, and, in its capacity as
Trustee for the General Motors Hourly-Rate Employees Pension Trust and for the
General Motors Retirement Program for Salaried Employees Trust (and not in its
individual capacity), is the owner of the Mortgage and the mortgage note secured
thereby.
3. Plaintiff commenced this action to foreclose a certain
Purchase Money Wraparound Mortgage, dated as of January 4, 1984, made by
defendant Vista Properties ("Vista") to Plaintiff (the "Mortgage"), encumbering
certain mortgage property consisting of, among other things, the ground lease
covering certain land located at 250 Park Avenue, New York, New York (Tax Map
Section 5, Block 1282, Lot 34), and certain improvements and other property, all
as more particularly described in Exhibit A annexed hereto (the "Mortgaged
Property"). The Mortgage was given by defendant Vista as collateral security for
a loan made to it by Plaintiff (the "Mortgage Loan").
The Note and the Mortgage
4. The data with respect to the Mortgage and the note secured
thereby is set forth with particularity in the verified complaint herein. Copies
of the summons, the verified complaint and the notice of pendency filed in
connection with this action are annexed hereto as Exhibit B. Vista's
indebtedness to Plaintiff in respect of the Mortgage Loan is evidenced by a
certain Purchase Money Mortgage Note, dated January 4, 1984, in
the original principal amount of $90,160,000 (the "Note"). A true and complete
copy of the Note is annexed hereto as Exhibit C.
5. In order to secure payment of the indebtedness evidenced by
the Note, Vista executed, acknowledged and delivered to Plaintiff the Mortgage,
a copy of which is annexed hereto as Exhibit D, wherein and whereby Vista, as
mortgagor, mortgaged to Plaintiff, as mortgagee, the Mortgaged Property. The
Mortgage was duly recorded.
6. Plaintiff is the owner of the Note and the Mortgage.
Pursuant to a Power of Attorney dated as of August 2, 1996, a copy of which is
annexed hereto as Exhibit E, Plaintiff appointed Aldrich, Eastman & Waltch, L.P.
as its attorney-in-fact to act on its behalf in connection with all matters
relating to the administration and enforcement of the Mortgage Loan, including,
without limitation, foreclosure of the Mortgage.
<PAGE>
7. The Mortgage constitutes a mortgage lien on, and security
interest in, the Mortgaged Property, and a collateral assignment to Plaintiff of
all leases, subleases, tenancies, sub tenancies and other agreements affecting
the use or occupancy of the Mortgaged Property, including, without limitation,
cash or securities deposited under such leases, subleases, tenancies, sub
tenancies and other agreements to secure performance by the tenants thereunder.
Event of Default; Acceleration
8. Vista has defaulted under the Mortgage by failing to pay in
full the interest and additional interest on the Note due and payable on October
1, 1996, and has failed to cure such default prior to the expiration of the
applicable ten (10) day grace period following written notice of such default
given to Vista by Plaintiff in the manner prescribed by the Mortgage.
9. The occurrence of the aforesaid payment default and the
continuation of such default beyond the applicable ten-day grace period
constituted and constitutes an Event of Default (as defined in the Mortgage)
under the Mortgage. Plaintiff notified Vista, in the manner prescribed by the
Mortgage, that such Event of Default had occurred and was continuing and, based
thereon, Plaintiff declared the entire principal of the Note then outstanding
and all accrued and unpaid interest, additional interest and other charges due
thereon and all other indebtedness due thereunder to be due and payable
immediately, and demanded immediate payment of all of such sums.
Appointment of Receiver
10. The Mortgage provides that, upon the occurrence of an
Event of Default under the Mortgage, the mortgagee (Plaintiff) will be entitled
to "receive and collect the rent" under any and all leases of space in the
Improvements. Moreover, Section 16(a)(iii) of the Mortgage provides that, if any
Event of Default under the Mortgage shall occur and be continuing, the mortgagee
will be entitled to "use, operate, manage and control the Mortgaged Property and
conduct the business thereof, either personally or by . . . receivers".
11. Section 16(d) of the Mortgage provides that "after the
happening of any Event of Default and the acceleration of the maturity of the
Indebtedness, immediately upon the commencement of any action or proceeding by
the Mortgagee to foreclose this Mortgage, the Mortgagor shall, if requested by
the Mortgagee, consent to the appointment of a receiver or receivers of the
Mortgaged Property or any part thereof or any business conducted thereon and of
all the earnings, revenues, rents, issues, profits and income thereof". Vista
has, therefore, pursuant to the terms of the Mortgage and Real Property Law
Section 254(10), waived notice of this application and has consented to the
appointment of a receiver. No other defendant is entitled to notice of this
application.
12. There is now due and payable to Plaintiff the principal
sum of $90,160,000.00, accrued and unpaid interest through September 30, 1996 in
the sum of $104,881,948.96, together with interest accrued thereafter and all
other indebtedness due under the Note, no part of which has been paid by Vista
or anyone claiming under Vista, although duly demanded.
13. The Mortgaged Property is highly complicated and
management-intensive, involving a high-rise building containing over 460,000
square feet of rentable area leased to thirty office and retail tenants.
Additional complexity arises from the age of the building (constructed in 1923),
the large number of tenant "rollovers" occurring in 1997-98 and the involvement
of a ground lease and senior mortgage affecting the Mortgaged Property.
<PAGE>
14. Upon information and belief, the aggregate amount of gross
rent payable under the occupancy leases currently in effect with respect to
space in the Mortgaged Property (collectively, the "Space Leases") is
approximately $19,800,000.00 per year ($1,650,000.00 per month).
15. It is essential that a receiver be appointed to preserve
the collateral by collecting the rents payable pursuant to the Space Leases and
ensuring that such rents are applied to pay the substantial operating expenses
of the Mortgaged Property (including, without limitation, ground lease rental,
real estate taxes and the costs of providing essential services to the tenants
under the Space Leases).
16. It is also essential that the appointed receiver have the
authority to retain a managing agent with the capacity, wherewithal and
experience to manage an office building of this size and type, subject to
compensation being paid to such managing agent out of the collections received
from the Mortgaged Property.
17. Upon information and belief, several rental spaces within
the Mortgaged Property are or are about to become vacant and not under lease,
and therefore a receiver is also necessary to market such rental spaces and
negotiate and enter into leases which will generate rents.
18. No previous application for the relief requested herein
has been made to this or to any other Court or to any Justice thereof.
WHEREFORE, it is respectfully requested that this Court enter
an Order appointing a receiver of the Mortgaged Property, and of the earnings,
revenues, rents, issues, profits and income thereof, during the pendency of this
foreclosure action, and that such receiver be vested with all of the usual
powers and duties of receivers in cases such as this foreclosure action.
/s/ Mark A. Albertson
---------------------
MARK A. ALBERTSON
Sworn to before me this
29th day of October, 1996
/s/
Notary Public
<PAGE>
EXHIBIT 10(vv)
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
- -------------------------------------x
BANKERS TRUST COMPANY, as Trustee
for the General Motors Hourly-Rate
Employees Pension Trust, and as
Trustee for the General Motors
Retirement Program for Salaried
Employes Trust,
Plaintiff, Index No. 96/_____
- against - Plaintiff designates
New York County as the
VISTA PROPERTIES, a California place of trial. The
limited partnership, NORLANDER basis of the venue is
CONTRACTING CORPORATION, ACTION the location of the real
GLASS CO., INC., NEW YORK CITY property which is the
ENVIRONMENTAL CONTROL BOARD, subject of this action
THE PEOPLE OF THE STATE OF NEW to foreclose a mortgage.
YORK, THE CITY OF NEW YORK and
"JOHN DOE" NOS. ONE TO ONE HUNDRED,
"JOHN DOE CORPORATION" NOS. ONE
TO ONE HUNDRED, AND "JOHN DOE
COMPANY" NOS. ONE TO ONE HUNDRED, SUMMONS
Defendants.
The Names of the "John Doe"
Defendants Being Fictitious and
Unknown to Plaintiff, the Persons
and Entities Intended Being Those Plaintiff's place of
Who May Be in Possession of, or May business is
Have Rights, Possessory Liens or 280 Park Avenue
Other Interests in the Premises New York, New York
Herein Described.
- -------------------------------------x
TO THE ABOVE-NAMED DEFENDANTS:
YOU ARE HEREBY SUMMONED to answer the verified complaint in
this action and to serve a copy of your answer, or, if the verified complaint is
not served with this summons, to serve a notice of appearance, on the
plaintiff's attorneys within twenty (20) days after the service of this summons,
exclusive of the day of service (or within thirty (30) days after the service is
complete if the summons is not personally delivered to you within the State of
New York). In the case of your failure to appear or answer, judgment will be
taken against you by default for the relief demanded in the verified complaint.
<PAGE>
Dated: New York, New York
October 29, 1996
BACHNER, TALLY, POLEVOY & MISHER LLP
380 Madison Avenue New York, New
York 10017
- and -
WACHTELL, LIPTON, ROSEN & KATZ 51
West 52nd Street New York, New York
10019
Attorneys for Plaintiff
Bankers Trust Company, as Trustee for
the General Motors Hourly-Rate Employees
Pension Trust, and as Trustee for the
General Motors Retirement Program for
Salaried Employes Trust
TO THE DEFENDANTS IDENTIFIED
ON THE ATTACHED SCHEDULE
SCHEDULE OF DEFENDANTS
VISTA PROPERTIES, a California limited partnership
c/o Wexford Management LLC
411 West Putnam Avenue
Greenwich, Connecticut 06830
NORLANDER CONTRACTING CORPORATION
10-61 Jackson Avenue
Long Island City, New York 11101
ACTION GLASS CO., INC.
572 Albany Avenue
Brooklyn, New York 11203
NEW YORK CITY ENVIRONMENTAL CONTROL BOARD
59-17 Junction Boulevard
Corona, New York 11368-5107
THE PEOPLE OF THE STATE OF NEW YORK
120 Broadway
New York, New York 10271
THE CITY OF NEW YORK
c/o Corporation Counsel
100 Church Street
New York, New York 10007
<PAGE>
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
- ----------------------------------------x
BANKERS TRUST COMPANY, as Trustee
for the General Motors Hourly-Rate
Employees Pension Trust, and as
Trustee for the General Motors
Retirement Program for Salaried
Employes Trust,
Index No. ________
Plaintiff,
- against-
VERIFIED COMPLAINT
VISTA PROPERTIES, a California
limited partnership, NORLANDER
CONTRACTING CORPORATION, ACTION
GLASS CO., INC., NEW YORK CITY
ENVIRONMENTAL CONTROL BOARD, THE
PEOPLE OF THE STATE OF NEW YORK,
THE CITY OF NEW YORK, "JOHN DOE"
NOS. ONE TO ONE HUNDRED, "JOHN DOE
CORPORATION" NOS. ONE TO ONE
HUNDRED, AND "JOHN DOE COMPANY"
NOS. ONE TO ONE HUNDRED,
Defendants.
The Names of the "John Doe"
Defendants Being Fictitious and
Unknown to Plaintiff, the Persons
and Entities Intended Being Those
Who May Be in Possession of, or May
Have Rights, Possessory Liens or
Other Interests in the Premises
Herein Described.
----------------------------------------x
Plaintiff Bankers Trust Company, as Trustee for the General
Motors Hourly-Rate Employees Pension Trust, and as Trustee for the General
Motors Retirement Program for Salaried Employes Trust ("Plaintiff"), by its
attorneys, Bachner, Tally, Polevoy & Misher LLP and Wachtell, Lipton, Rosen &
Katz, as and for its Verified Complaint in this action, respectfully alleges:
NATURE OF THE ACTION
1. This is an action to foreclose a certain Purchase Money
Wraparound Mortgage, dated as of January 4, 1984, from defendant Vista
Properties ("Vista") to Plaintiff (the "Mortgage"), on certain mortgaged
property consisting of the ground lease covering certain land located at 250
Park Avenue, New York, New York, and certain improvements and other property,
all as hereinafter described (the "Mortgaged Property"), given as collateral
security for a purchase money mortgage note hereinafter described.
<PAGE>
THE PARTIES
2. Plaintiff is and, at all relevant times hereinafter
mentioned, was a New York banking corporation having an office at 280 Park
Avenue, New York, New York 10017, and, in its capacity as Trustee for the
General Motors Hourly-Rate Employees Pension Trust and for the General Motors
Retirement Program for Salaried Employes Trust (and not in its individual
capacity) and is the lawful owner of the Mortgage being foreclosed herein and
the mortgage note secured thereby.
3. Upon information and belief, defendant Vista is and, at all
relevant times hereinafter mentioned, was a California limited partnership
having an office at 411 West Putnam Avenue, Greenwich, Connecticut 06830, the
mortgagor under the Mortgage and the owner of the Mortgaged Property.
4. Upon information and belief, defendant Norlander
Contracting Corporation is and, at all relevant times hereinafter mentioned, was
a New York corporation having an address at 10-61 Jackson Avenue, Long Island
City, New York 11101, and allegedly is the holder of a mechanic's lien in the
amount of $4,423.20 encumbering the Mortgaged Property, which mechanic's lien is
subject and subordinate to the Mortgage.
5. Upon information and belief, defendant Action Glass Co.,
Inc. is and, at all relevant times hereinafter mentioned, was a New York
corporation having an office at 572 Albany Avenue, Brooklyn, New York 11203, and
allegedly is the holder of a mechanic's lien in the amount of $5,000.00
encumbering the Mortgaged Property, which mechanic's lien is subject and
subordinate to the Mortgage.
6. Defendant New York City Environmental Control Board, an
agency of the City of New York, assesses and collects fines and obtains
judgments thereon, based on environmental code violations within the City of New
York, and is made a party defendant in this action to bar it from any right,
title or interest it may have, or may claim to have, by virtue of an
Environmental Control Board Judgment docketed October 1988 as violation number
056-990-744, in the amount of $300.00, which was filed against the Mortgage
Property and is subject and subordinate to the Mortgage.
7. Defendant The People of the State of New York, inter alia,
assesses and collects taxes and is made a party defendant in this action to bar
it from any right, title or interest it has, or may claim to have, in the
Mortgaged Property or any part thereof for any unpaid New York State franchise,
business, estate, gift or transfer taxes or such other charges as may constitute
a lien against the Mortgaged Property, to the extent such lien is subject and
subordinate to the Mortgage.
8. Defendant The City of New York, a municipal corporation,
inter alia, assesses and collects taxes and is made a party defendant in this
action to bar it from any right, title or interest it may have, or may claim to
have, in the Mortgaged Property for any unpaid New York City franchise or
business taxes or such other charges as may constitute a lien against the
Mortgaged Property, to the extent such lien is subject and subordinate to the
Mortgage.
9. Upon information and belief, the "John Doe" defendants
constitute those persons and/or entities having an interest or right in, or lien
upon, or who may be in possession of, the Mortgaged Property, the right, title,
interest or possession of said defendants being subsequent, subject and/or
subordinate to the lien of the Mortgage being foreclosed herein.
<PAGE>
THE MORTGAGE DOCUMENTS
10. On or about January 4, 1984, Vista, for the purpose of
evidencing a principal indebtedness in the amount of $90,160,000, together with
interest thereon, duly executed, acknowledged and delivered to Plaintiff a
certain Purchase Money Mortgage Note, dated January 4, 1984 (the "Note"),
wherein and whereby Vista was bound and promised to pay to Plaintiff the
principal sum of $90,160,000, with interest thereon at the rate described
herein.
11. On or about January 4, 1984, Vista, for the purpose of
securing payment of the indebtedness evidenced by the Note, executed,
acknowledged and delivered to Plaintiff the Mortgage, wherein and whereby Vista,
as mortgagor, mortgaged to Plaintiff, as mortgagee, the Mortgaged Property, all
as more fully described in Exhibit A annexed hereto and made a part hereof,
Vista then being the owner of the Mortgaged Property. The Mortgage was duly
recorded in the Office of the Register of the City of New York, County of New
York (the "Register's Office"), on January 10, 1984 in Reel 753, Page 555, and
the mortgage recording tax was then and there duly paid.
12. The Mortgage constitutes a mortgage lien on, and security
interest in, the Mortgaged Property, and a collateral assignment of all leases,
subleases, tenancies, sub tenancies and other agreements affecting the use or
occupancy of the Mortgaged Property, including, without limitation, cash or
securities deposited under such leases, subleases, tenancies, sub tenancies and
other agreements to secure performance by the tenants thereunder.
13. The Mortgage also constitutes a security agreement within
the meaning of the Uniform Commercial Code of New York with respect to Vista's
interest in any personal property covered by the Mortgage, which security
interest is further evidenced and perfected by the due filing of UCC-1 financing
statements and UCC-3 continuation statements in the Register's Office and with
the Secretary of State of the State of New York.
14. The Mortgage provides, inter alia, that:
(a) the failure to pay any "Interest" or other
"Obligations" due under the Note (as such terms are respectively defined in the
Note), when and as the same shall become due and payable, and the continuation
of such default for a period of ten days after written notice to the mortgagor,
constitutes an "Event of Default" (as such term is defined in the Mortgage)
under the Mortgage;
(b) if an Event of Default under the Mortgage shall
occur and be continuing, the mortgagee may (i) by written notice given to the
mortgagor, declare the entire principal of the Note then outstanding and all
accrued and unpaid interest and other charges due thereon to be due and payable
immediately, (ii) institute proceedings for the foreclosure of the Mortgage, and
(iii) enter into and upon the Mortgaged Property and exclude the mortgagor
therefrom, and collect and receive all earnings, revenues, rents, issues,
profits and income of the Mortgaged Property, either personally or by receivers;
(c) in an action for foreclosure of the Mortgage,
the mortgagee is entitled to the appointment of a receiver; and
(d) the mortgagee is entitled, in an action for
foreclosure, to the costs and expenses of the action, including attorneys' fees.
<PAGE>
FIRST CAUSE OF ACTION
15. Plaintiff repeats and realleges each and every allegation
contained in paragraphs 1 through 14 hereof with the same force and effect as if
fully set forth herein.
The Event of Default
16. Paragraph 17(a) of the Mortgage provides that, prior to
January 4, 1999, the failure by the mortgagor to pay any Interest on the Note or
any other charges due under the Note or the Mortgage will not constitute a
default or Event of Default under the Note or the Mortgage, provided (i) all
Annual Net Cash Flow (as defined in the Mortgage) of the Mortgaged Property is
paid on account of Interest on the Note, and (ii) the mortgagor is at no time in
arrears in the payment of all sums owing under the Note by more than an amount
equal to the aggregate debt service required to be paid under the Note for the
immediately preceding eighty-four (84) month period.
17. As of October 1, 1996, the aggregate debt service required
to be paid under the Note for the eighty-four (84) month period commencing
October 1, 1989 and ending September 30, 1996 was $104,134,800.00.
18. As of October 1, 1996, Vista was in arrears in the payment
of sums owing under the Note by an amount equal to $104,881,948.96; accordingly,
as of October 1, 1996, Vista was obligated to pay Interest on the Note for the
immediately preceding calendar month at the rate set forth in the Note.
19. Vista is in default under the Note and the Mortgage in
that it failed to pay when due the entire amount of Interest ($1,409,279.00)
accrued on the Note during the month of September 1996 and due and payable under
the Note on October 1, 1996.
20. By letter dated October 2, 1996 (the "Default Notice"),
Plaintiff notified Vista of the payment default described in paragraph 19 above
and of Vista's right to cure the default within ten days after written notice
thereof.
21. Notwithstanding the notice and opportunity to cure as
aforesaid, Vista has failed to pay the entire amount of Interest accrued under
the Note which was due and payable on October 1, 1996.
The Acceleration
22. By letter dated October 16, 1996, Plaintiff notified Vista
(a) that, by reason of the occurrence of the payment default specified in the
Default Notice and the continuation of such default beyond the applicable
ten-day grace period, an Event of Default had occurred under Paragraph 15(a)(i)
of the Mortgage, and (b) that, in accordance with Paragraph 16(a)(i) of the
Mortgage, Plaintiff was thereby declaring the entire principal sum due under the
Note and all accrued and unpaid Interest and other charges due thereon and all
other indebtedness thereunder to be due and payable immediately.
23. There is now justly due and payable to Plaintiff the
principal sum of $90,160,000.00, accrued and unpaid interest through September
30, 1996 in the sum of $104,881,948.96, together with interest accrued
thereafter and all other indebtedness due thereunder, no part of any of which
has been paid by Vista or anyone claiming under Vista, although duly demanded.
<PAGE>
24. In order to protect its security, Plaintiff may, during
the pendency of this action, advance monies or pay taxes, assessments, water
and/or sewer charges, insurance premiums, utility bills and other charges
affecting the Mortgaged Property, including amounts which may be due for labor
and materials furnished thereto, and improvements made thereon; pursuant to the
Mortgage, any such sums advanced by Plaintiff shall be added, with interest at
the rate provided in the Note, to the indebtedness secured by the Mortgage and
adjudged a valid lien on the Mortgaged Property.
25. No other action or proceeding has been commenced or
maintained or is now pending at law or otherwise for the foreclosure of the
Mortgage or for the recovery of the sums secured by the Mortgage or any part
thereof.
26. Upon information and belief, each of the above named
defendants is joined herein inasmuch as such defendant has, or may have, or
claims to have or may claim to have, rights and/or interests in the Mortgaged
Property or some part thereof, together with all improvements, fixtures and
personalty located therein, which interest or lien, if any, has accrued
subsequent to or is otherwise subordinate to the lien of the Mortgage.
27. Upon information and belief, no persons or entities other
than those described herein have, may have or claim to have any claim, interest
in or lien upon the Mortgaged Property which has accrued subsequent to
Plaintiff's interest in and lien upon the Mortgaged Property and is subject and
subordinate to the lien of the Mortgage.
28. Notwithstanding any other allegation of this complaint to
the contrary, The City of New York is made a party defendant herein solely for
the purpose of foreclosing those liens, if any, against the Mortgaged Property
which accrued, or may accrue, subsequent to the lien of the Mortgage by virtue
of unpaid liens and possible general corporation or New York City franchise or
business taxes which are or may be due, or may become due, to The City of New
York from any owner of record of the Mortgaged Property.
29. Notwithstanding any other allegation of this complaint to
the contrary, the People of the State of New York is made a party defendant
herein solely for the purpose of foreclosing those liens, if any, against the
Mortgaged Property which accrued, or may accrue, subsequent to the lien of the
Mortgage by virtue of possible unpaid corporation or franchise, business, estate
or gift taxes or license fees which are or may be due, or may become due, to the
People of the State of New York from any owner of record of the Mortgaged
Property.
30. Notwithstanding any other allegation of this complaint to
the contrary, the New York City Environmental Control Board is made a party
defendant herein solely for the purpose of foreclosing those liens, if any,
against the Mortgaged Property which accrued, or may accrue, subsequent to the
lien of the Mortgage by virtue of possible unpaid environmental judgments or
liens or assessments as aforesaid which are or may be due, or may become due, to
the New York City Environmental Control Board from any owner of record of the
Mortgaged Property.
<PAGE>
WHEREFORE, Plaintiff demands judgment that:
A. Defendants, or any of them, and all persons
claiming by, through or under all or any of them, and every person or entity
whose right, title, conveyance or encumbrance is recorded subsequent to the
commencement of this action and the filing of the notice of pendency of this
action be forever barred and foreclosed of and from all right, title, estate,
interest, claim, lien and equity of redemption in and to the Mortgaged Property,
including, without limitation, the buildings, improvements, fixtures, machinery,
equipment and other articles of personalty, and any other rights and interests
upon which the Mortgage is a lien or which are attached to or used in connection
with the Mortgaged Property;
B. The amount due to Plaintiff on the Note and the
Mortgage be adjudged;
C. The moneys arising from the sale of the Mortgaged
Property be brought into Court;
D. Plaintiff be paid the amounts due upon the Note
and the Mortgage, including, without limitation, Interest accrued and accruing
on the Note to the time of such payment, prepayment fees, the expenses of the
sale, costs, expenses, allowances and disbursements of this action, Plaintiff's
reasonable attorneys' fees, late fees and other charges as provided in the
Mortgage, together with any sums paid or advanced by Plaintiff to protect its
lien on the Mortgaged Property, any taxes, assessments, water charges, sewer
rents, insurance premiums, repairs to the Mortgaged Property and all other
charges, interest and penalties on the Mortgaged Property, with interest upon
said amounts from the dates of the respective payments and advances thereof, so
far as the amounts of such monies properly applicable thereto will pay the same;
E. The Mortgaged Property be decreed to be sold,
according to law, in "as is" physical order and condition subject to the
following: (a) any state of facts that an inspection of the Mortgaged Property
would disclose; (b) any state of facts that an accurate survey of the Mortgaged
Property would show; (c) the rights and interests of those defendants named
herein whose rights and interests Plaintiff elects not to foreclose; (d)
covenants, restrictions, easements reservations and public utility agreements of
record, if any; (e) building and zoning ordinances of the municipality in which
the Mortgaged Property is located and possible violations of same; (f) any
rights of tenants of the Mortgaged Property, as tenants only; (g) any equity of
redemption of the United States of America to redeem the Mortgaged Property
within 120 days from the date of sale; and (h) prior lien(s) of record, if any,
including, without limitation, any liens for unpaid taxes, assessments and water
rates with interest and penalties accrued;
F. The Mortgaged Property be decreed to be sold,
according to law, in one or more parcels until the entire amount owed to
Plaintiff under the Note and the Mortgage is paid in full;
G. The referee (or other officer) making such sale
be directed to pay from the proceeds of the Mortgaged Property sold all taxes,
assessments, and water rates which are liens on such property;
H. This Court forthwith appoint a receiver of the
Mortgaged Property, and of the earnings, revenues, rents, issues, profits and
income therefrom, with the usual powers and duties, during the pendency of this
action;
<PAGE>
I. In the event Plaintiff possesses any other
lien(s) against the Mortgaged Property, either by way of judgment, mortgage or
otherwise, Plaintiff requests that such other lien(s) not be merged in
Plaintiff's cause of action set forth in this Verified Complaint, but that
Plaintiff shall be permitted to enforce such other lien(s) and/or seek
determination of the priority thereof in one or more independent actions or
proceedings, including, without limitation, any surplus money proceedings; and
J. Plaintiff be granted such other and further
relief as may be just, proper and equitable in the premises, together with the
costs, disbursements and allowances in this action.
Dated: New York, New York
October 29, 1996
BACHNER, TALLY, POLEVOY & MISHER LLP
380 Madison Avenue New York, New
York 10017
-and-
WACHTELL, LIPTON, ROSEN & KATZ 51
West 52nd Street New York, New York
10019
Attorneys for Plaintiff
Bankers Trust Company, as Trustee for
the General Motors Hourly-Rate Employees
Pension Trust, and as Trustee for the
General Motors Retirement Program for
Salaried Employes Trust
<PAGE>
EXHIBIT A
Description of Mortgaged Property
(a) All of the mortgagor's right, title and interest, as
lessee, in and to the leasehold estate created under that certain Agreement of
Lease, dated as of April 1, 1961, between Febe Associates and 250 Park Avenue
Corporation, recorded on May 19, 1961 in the Register's Office in Liber 5150,
Page 371 (such Agreement of Lease, as the same has heretofore been amended,
being referred to hereinafter as the "Ground Lease"), under which Ground Lease
Plaintiff is the successor lessor and Vista is the successor lessee, covering
certain land (the "Land") located in the City, County and State of New York (Tax
Map Section 5, Block 1282, Lot 34) and more particularly described in Schedule
A-1 annexed hereto, and the appurtenances, easements and other rights
benefitting the Land, as more particularly described in the Ground Lease;
(b) Any and all other, further or additional estates, rights,
title or interests which may at any time be acquired by the mortgagor by reason
of amendments, modifications, supplements, extensions and renewals of the Ground
Lease;
(c) All of the mortgagor's right, title and interest in and to
all the buildings, structures and other improvements, including the building
fixtures therein (the "Improvements"), now or hereafter located on the Land,
including, without limitation, the walks, ways, signs and utilities now or
hereafter located on the Land;
(d) All of the mortgagor's right, title and interest in, to
and under a certain Land Option Agreement, dated as of January 4, 1984, between
Plaintiff, as optionor, and Vista, as optionee, with respect to the Land; and
(e) All right, title and interest of the mortgagor in and to
all machinery, apparatus, equipment, fittings, fixtures, furniture, furnishings
and articles of personal property of every kind and nature whatsoever owned by
the mortgagor and now or hereafter attached or affixed to the Improvements and
used or usable in connection with the use or maintenance of the Improvements or
the mortgagor's interest in the Land;
(f) All proceeds of the conversion, voluntary or involuntary,
of any of the foregoing into cash or liquidated claims, including, without
limitation, proceeds of insurance and condemnation awards with respect thereto;
(g) All leases, subleases, tenancies, sub tenancies and other
agreements affecting the use or occupancy of all or a portion of the real
property described in clauses (a), (b) and (c) above, now or hereafter entered
into, including, without limitation, all of the mortgagor's interest in any
Occupancy Lease (as defined in the Mortgage), including, without limitation,
cash or securities deposited thereunder to secure performances by the tenants
thereunder of their obligations thereunder, and including further the right,
upon the happening of an Event of Default (as defined in the Mortgage) under the
Mortgage, to receive and collect the rent under any and all Occupancy Leases;
(h) All tight, title and interest of the mortgagor in and to
all the tenements, hereditaments, easements, rights, privileges, servitudes,
licenses and appurtenances of the real property described in clauses (a), (b)
and (c) above at any time belonging to or in any way appertaining thereto; and
<PAGE>
(i) All estate, right, title, claim or demand whatsoever of
the mortgagor, either in law or in equity, in possession or expectancy, in and
to the real and personal property described in clauses (a)-(h) above or any part
thereof, whether now owned or hereafter acquired.
<PAGE>
SCHEDULE A-1
Legal Description of Land
All that parcel of land, in the Borough of Manhattan, City and State of New
York, hereinafter described:
BEGINNING at the corner formed by the intersection of the northerly line of 46th
Street with the westerly line of Park Avenue;
RUNNING THENCE westerly along the northerly line of 46th Street, one hundred
twenty-four (124) feet, four (4) inches more or less to the easterly line of
Vanderbilt Avenue;
THENCE northerly along said easterly line of Vanderbilt Avenue two hundred (200)
feet ten (10) inches more or less to the southerly line of 47th Street;
THENCE easterly along the southerly line of 47th Street one hundred twenty-four
(124) feet, four (4) inches more or less to the westerly line of Park Avenue;
and
THENCE southerly along the westerly line of Park Avenue two hundred (200) feet
ten (10) inches more or less to the point or place of BEGINNING.
Excepting, however, from the parcel of land above described, all that portion
thereof lying below a horizontal plane drawn at elevation 52.75 feet, and
intersecting the northerly, southerly, easterly and westerly bounds of the
parcels of land above described, together with all subsurface rights in and to
46th Street, 47th Street, Park Avenue and Vanderbilt Avenue, in the Borough of
Manhattan, City of New York.
The elevation above referred to has reference to the datum plane of The New York
Central Railroad Company, which takes for its elevation 0 feet 00 inches mean
high water mark of the East River, at the foot of East 26th Street, in the
Borough of Manhattan, City of New York, as in effect on June 1, 1905.
<PAGE>
VERIFICATION
COMMONWEALTH OF MASSACHUSETTS )
) ss.:
COUNTY OF SUFFOLK )
MARK A. ALBERTSON, being duly sworn, deposes and says:
1. I am a Director of Aldrich, Eastman & Waltch, L.P., the
attorney-in-fact for Bankers Trust Company, as Trustee for the General Motors
Hourly-Rate Employees Pension Trust, and as Trustee for the General Motors
Retirement Program for Salaried Employes Trust, the plaintiff in the within
action.
2. I have read the within complaint and know the contents
thereof and same are true to the best of my knowledge. As to those matters
alleged on information and belief, I believe them to be true to the best of my
knowledge. The grounds of my belief as to matters not stated upon my knowledge
are the books and records of the plaintiff.
/s/ Mark A. Albertson
---------------------
MARK A. ALBERTSON
Sworn to before me this
29th day of October, 1996.
/s/______________________
Notary Public
<PAGE>
ORIGINAL
- -----------------------------------------------------------------
_____ Affirmation
in the within action; I have read the
foregoing and know the contents thereof; the same is true to
my own knowledge, except as for the matters therein stated to
be alleged on information and belief, and as to those matters
I believe it to be true. The reason this verification is made
by me and not by ____
The ground of my belief as to all matters not stated upon my
own knowledge are as follows:
I affirm that the foregoing statement are true, under the penalties of perjury.
Dated:
_______________________________
The name signed must be printed
underneath
STATE OF COUNTY OF ss.:
___ Individual Verification
___ Corporate Verification
I, being duly sworn, depose
and say: I am the in the within action;
<PAGE>
I have read the foregoing and know the contents thereof; the same is
true to my own knowledge, except as to the matters therein stated to be
alleged on information and belief, and as to those matters, I believe
it to be true.
the of
a corporation and a party in
the within action; I have read the foregoing
and know the contents thereof; and the same is true to my own
knowledge, except as to the matters therein stated to be alleged upon
information and belief, and as to those matters I believe it to be
true. This verification is made by me because the above party is a
corporation and I am an officer thereof. The grounds of my belief as to
all matters not stated upon my own knowledge are as follows:
Sworn to before me on 19__ _______________________
The name signed must be
printed beneath
STATE OF COUNTY OF ss.: (If both boxes are checked -
indicate after names, type of
service used.)
I, being sworn say: I am not a party to
the action, am over 18 years of age and reside at
On 19__ I served the within
<PAGE>
___ Service
By Mail by depositing a true copy thereof enclosed in
a post-paid wrapper, in an official
depository under the exclusive care and
custody of the U.S. Postal Service within
this State, addressed to each of the
following persons at the last known address
set forth after each name.
___ Personal
Service on Individual
by delivering a true copy thereof personally
to each person named below at the address
indicated. I knew each person served to be
the person mentioned and described in said
papers as a party therein.
Sworn to before me on 19__ ______________________
The name signed must be
printed beneath
<PAGE>
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
BANKERS TRUST COMPANY, as Trustee for the General Motors Hourly-
Rate Employees Pension Trust and as Trustee for the General
Motors Retirement Program for Salaried Employes Trust,
Plaintiff,
- against -
VISTA PROPERTIES, a California limited partnership, NORLANDER
CONTRACTING CORPORATION, ACTION GLASS CO., INC., NEW YORK CITY
ENVIRONMENTAL CONTROL BOARD, THE PEOPLE OF THE STATE OF NEW YORK,
THE CITY OF NEW YORK, "JOHN DOE" NOS. ONE TO ONE HUNDRED, "JOHN
DOE CORPORATION" NOS. ONE TO ONE HUNDRED, AND "JOHN DOE COMPANY"
NOS. ONE TO ONE HUNDRED,
Defendants.
SUMMONS AND VERIFIED COMPLAINT
BACHNER, TALLY, POLEVOY & MISHER LLP
380 Madison Avenue
New York, New York 10017
<PAGE>
(212) 687-7000
AND
WACHTELL, LIPTON, ROSEN & KATZ
51 West 52nd Street
New York, New York 10019
(212) 403-1000
ATTORNEYS FOR PLAINTIFF
To Service of a copy of the within is
hereby admitted
Dated_______________ 19__
Attorney(s) for __________________________________
<PAGE>
EXHIBIT 10(ww)
At IAS Part 32 of the
Supreme Court of the State
of New York, held in and
for the County of New York,
at the Courthouse, 60
Centre Street, New York,
New York, on Nov. 7, 1996
P R E S E N T:
HON.
Justice.
- -------------------------------------x
BANKERS TRUST COMPANY, as Trustee
for the General Motors Hourly-Rate
Employees Pension Trust, and as
Trustee for the General Motors
Retirement Program for Salaried
Employes Trust,
Index No. 605459/96
Plaintiff,
- against -
VISTA PROPERTIES, a California ORDER APPOINTING
limited partnership NORLANDER RECEIVER
CONTRACTING CORPORATION, ACTION
GLASS CO., INC., NEW YORK CITY
ENVIRONMENTAL CONTROL BOARD, THE
PEOPLE OF THE STATE OF NEW YORK,
THE CITY OF NEW YORK, "JOHN DOE"
NOS. ONE TO ONE HUNDRED, "JOHN DOE
CORPORATION" NOS. ONE TO ONE
HUNDRED, AND "JOHN DOE COMPANY"
NOS. ONE TO ONE HUNDRED,
Defendants.
The Names of the "John Doe"
Defendants Being Fictitious and
Unknown to Plaintiff, the Persons
and Entities Intended Being Those
Who May Be in Possession of, or May
Have Rights, Possessory Liens or
Other Interests in the Premises
Herein Described.
- -------------------------------------x
Upon the summons, the verified complaint and the notice of
pendency of this action, all filed in the office of the Clerk of the County of
New York on October 31, 1996, and upon the annexed affidavit of Mark A.
Albertson, sworn to on October 29, 1996, with exhibits thereto, and it appearing
<PAGE>
to the satisfaction of this Court: that this action was brought to foreclose a
mortgage upon certain property hereinafter more particularly described, situate
in New York County; that in and by said mortgage it was covenanted and agreed by
the mortgagor that upon the occurrence of any event of default as specified
therein the mortgagee is entitled to the appointment of a receiver or receivers
of said mortgaged property and of all the earnings, revenues, rents, issues,
profits and income thereof; that said mortgage further contains an assignment to
the mortgagee of all leases, sub-leases, tenancies, sub tenancies and other
agreements affecting use and occupancy of all or a portion of the mortgaged
property and of all of the tenants' obligations thereunder; that the balance due
and unpaid on said mortgage is the principal sum of $90,160,000.00, together
with accrued and unpaid interest thereon through September 30, 1996 in the sum
of $104,881,948.96, and other fees and indebtedness due thereunder; that events
of default have occurred and are continuing under said mortgage; that the
mortgaged property is insufficient and inadequate security for the amount due
upon said mortgage; and that the appointment of a receiver of the rents, income
and profits of the mortgaged property is necessary for the protection of
Plaintiff;
NOW, on the motion of Bachner, Tally, Polevoy & Misher LLP and
Wachtell, Lipton, Rosen & Katz, attorneys for Plaintiff, it is
ORDERED, that Darrell Paster, of Farrer Paster & Enriquez, 270
Madison Avenue, New York, New York 10016, be and hereby is appointed, with the
usual powers and directions, receiver (the "Receiver") for the benefit of
Plaintiff of all the earnings, revenues, rents, issues, profits and income now
due or unpaid or to become due during the pendency of this action and issuing
out of the mortgaged property herein (the "Property") consisting of the ground
lease covering certain land located at 250 Park Avenue, New York, New York (Tax
Map Section 5, Block 1282, Lot 34), and certain improvements and other property,
all as more particularly described in "Exhibit A" annexed hereto; and it is
further
ORDERED, that before entering upon his duties, the Receiver
execute to the People of the State of New York, and file with the Clerk of this
Court, an undertaking in the amount of $5,775,000.00, conditioned for the
faithful performance of his duties as Receiver; and it is further
ORDERED, that the Receiver, prior to entering upon his duties,
execute and file an oath that he will faithfully and fairly discharge the trust
committed to him necessary to fulfill his duties as receiver; and it is further
ORDERED, that the Receiver be and hereby is empowered and
directed to demand, collect and receive from the tenants and subtenants in
possession of the Property or any portions thereof, or other persons liable
therefor, all the rents, use and occupancy thereof now due and unpaid or
hereafter to become due during the pendency of this action; and it is further
ORDERED, that the Receiver be and hereby is authorized to hire
and retain an entity or person to be agreed upon with the Plaintiff to act as
managing agent to operate the Property on the Receiver's behalf, said managing
agent to be compensated for the fair and reasonable value of the managing
agent's services solely out of the rents and profits of the Property; and it is
further
<PAGE>
ORDERED, that the Receiver be and hereby is authorized to
institute, prosecute and settle all legal proceedings necessary for the proper
care and protection of the Property or to recover possession of the whole , or
any part thereof, and to institute, prosecute and settle suits for the
collection of rents now due or hereafter to become due, and summary proceedings
for the removal of any tenant or tenants or subtenants or other persons
therefrom, subject to provisions of the rent control or rent stabilization laws,
where applicable, or to enforce this order, but not to employ counsel therefor
except pursuant to further order of this Court or upon consent of Plaintiff; and
it is further
ORDERED, that the Receiver be and hereby is directed, after
paying the expenses of the management and care of the Property as provided
herein, to retain the moneys which may come into his hands by virtue of the
receivership, to be held until the further order of the Court.
ORDERED, the Receiver promptly deposit all moneys received by
him at the time he receives the same into a separate interest-bearing account at
Citibank, 399 Park Avenue, New York, New York, (the "Depository"), such account
to be in his name, as Receiver, showing the name of the instant case; the
Depository shall furnish monthly statements of deposits into and withdrawals
from, said account, to the Receiver and also to Plaintiff's attorneys; and no
funds shall be withdrawn from said account except by order of this Court or by
draft or check signed by the Receiver and countersigned by the surety on his
undertaking; and it is further
ORDERED, that the Receiver be and hereby is authorized to keep
the Property insured against loss or damage by fire; to pay any taxes,
assessments and water rates and sewer rents upon the Property now due or
hereafter and during the pendency of this action to become due; to comply with
all requirements of any municipal department or other authority of The City of
New York; and to procure such liability insurance as may be necessary; and it is
further
ORDERED, that defendants, their agents, officers, employees,
representatives, servants and attorneys, and each and every one of them, turn
over to the Receiver all rents, income and profits of the Property currently in
their possession that have been derived from the Property subsequent to the
appointment of the Receiver; and it is further
ORDERED, that the Receiver be and hereby is authorized to (i)
take all necessary steps to preserve the Plaintiff's collateral; and (ii) use,
manage, control, maintain, repair, restore and otherwise operate every part of
the Property and to expend such sums as may be necessary therefor out of the
proceeds of his collections from the Property; provided, however, that such
expenses for capital improvements are not to exceed $5,000 for each such item of
capital improvement with respect to the Property without further authorization
of this Court or prior written consent of Plaintiff, and after making payment of
or provision for the foregoing amounts under clauses (i) and (ii) and such other
amounts as provided in this Order or as directed by this Court, to pay to
Plaintiff, from collections from the Property, rental payments due under the
Ground Lease and interest accrued on the Note in accordance with its terms
during the pendency of this foreclosure action; and it is further
ORDERED, that the Receiver be and hereby is authorized from
time to time, to rent or lease for a term not exceeding five years any part of
the Property at prevailing market rates for like space subject to Plaintiff's
approval; and it is further
<PAGE>
ORDERED, that the tenants or subtenants in possession of the
Property or such other persons as may be in possession thereof, be and they are
hereby directed to attorn to the Receiver, and until the further order of this
Court, to pay over to the Receiver all rents, use and occupancy of the Property
now due and unpaid or that may hereafter become due, and that all tenants and
subtenants of the Property and other persons liable for the rents, use and
occupancy be and they hereby are enjoined and restrained from paying any rent or
use and occupancy for the Property to defendants or their respective agents,
officers, employees, representatives, servants or attorneys; and it is further
ORDERED, that defendants, their respective agents, officers,
employees representatives, servants, attorneys and each and every one of them,
be and they hereby are enjoined and restrained from modifying or reducing the
rents of or derived from the Property, or Plaintiff's security interest therein,
from collecting the rents of or derived from the Property or any part thereof
and from interfering in any manner with the Property, or any part thereof, the
collection of rents by the Receiver, or possession thereof or the performance of
the Receiver's duties hereunder; and that defendants and their respective
agents, officers, employees, representatives, servants and attorneys forthwith
turn over and make available to the Receiver all books, records, escrows,
leases, subleases, ledgers, statements, rent rolls, accounts, keys,, security
deposits, contracts with vendors and suppliers, outstanding invoices and bills,
paid invoices and bills and other contracts, agreements, documents or materials
necessary for the Receiver to comply with his duties and obligations hereunder;
and it is further
ORDERED, that the Receiver, or any party hereto, may at any
time, upon proper and sufficient notice to all parties who may have appeared in
this action, apply to this Court for further or other instructions or additional
powers whenever such instructions or additional powers shall be deemed necessary
to enable the Receiver to perform properly and legally the duties of his office
as Receiver; and it is further
ORDERED, that the Receiver appointed herein shall comply with
section 36.3 of the Rules of the Chief Judge by filing OCA form 830.1 with the
Office of Court Administration. Any subsequent affidavit or affirmation of
service submitted to this Court must contain a statement indicating such
compliance and be accompanied by properly completed OCA form 830 and the
information attached thereto; and it is further
ORDERED, that the Receiver register with any Municipal
Department as provided by applicable law and expend rents and income and profits
as described in subdivision two of Real Property Actions and Proceedings Law
("RFAPL"), Section 1325, except that a priority shall be given to the correction
of immediately hazardous and hazardous violations of housing maintenance law
within the time set by orders of any municipal department, or, if not
practicable, seek a postponement of the time for compliance; and it is further
ORDERED, that the appointee comply with the annexed
informational sheet.
ENTER:
/s/ ______________________
J.S.C.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF THE DECEMBER 31, 1996 FORM 10K OF VISTA PROPERTIES AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 3,121,247
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 107,163,265
<CURRENT-LIABILITIES> 754,724
<BONDS> 214,182,636
0
0
<COMMON> 0
<OTHER-SE> (109,663,603)
<TOTAL-LIABILITY-AND-EQUITY> 107,163,265
<SALES> 0
<TOTAL-REVENUES> 21,267,482
<CGS> 0
<TOTAL-COSTS> 8,219,918
<OTHER-EXPENSES> 10,032,713
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 17,661,137
<INCOME-PRETAX> (14,696,286)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,782,912
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
