Back to GetFilings.com
Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, D.C. 20549
Re: Carlyle Real Estate Limited Partnership - XIII
Commission File No. 0-12791
Form 10-K
Gentlemen:
Transmitted, for the above-captioned registrant, is the electronically filed
executed copy of registrant's current report on Form 10-K for the year ended
December 31, 1993. The financial statements included in such Form 10-K do not
reflect a change from the preceding year in any accounting principles or
practices, or in the method of applying any such principles or practices.
Also, as required, the filing fee in the amount of $250.00 has been posted to
our account at the Melon Bank.
Thank you.
Very truly yours,
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
By: JMB Realty Corporation
Corporate General Partner
By: C. SCOTT NELSON
________________________________
C. Scott Nelson, Vice President
Accounting Officer
CSN:kg
Enclosures
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Act of 1934
For the fiscal year
ended December 31, 1993 Commission File Number 0-12791
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(Exact name of registrant as specified in its charter)
Illinois 36-3207212
(State of organization) (I.R.S. Employer Identification No.)
900 N. Michigan Ave., Chicago, Illinois 60611
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code 312-915-1987
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
- ------------------- ------------------------------
None None
Securities registered pursuant to Section 12(g) of the Act:
LIMITED PARTNERSHIP INTERESTS
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K - X
State the aggregate market value of the voting stock held by non-affiliates of
the registrant. Not applicable.
Certain pages of the prospectus of the registrant dated June 9, 1983 and filed
with the Commission pursuant to Rules 424(b) and 424(c) under the Securities
Act of 1933 are incorporated by reference in Part II and Part III of this
Annual Report on Form 10-K.
TABLE OF CONTENTS
Page
----
PART I
Item 1. Business. . . . . . . . . . . . . . . . . . . . 1
Item 2. Properties. . . . . . . . . . . . . . . . . . . 8
Item 3. Legal Proceedings . . . . . . . . . . . . . . . 10
Item 4. Submission of Matters to a Vote of
Security Holders. . . . . . . . . . . . . . . . 10
PART II
Item 5. Market for the Partnership's Limited Partnership
Interests and Related Security Holder Matters . 10
Item 6. Selected Financial Data . . . . . . . . . . . . 11
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations . 21
Item 8. Financial Statements and Supplementary Data . . 33
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure. . . . . 98
PART III
Item 10. Directors and Executive Officers
of the Partnership. . . . . . . . . . . . . . . 98
Item 11. Executive Compensation. . . . . . . . . . . . . 101
Item 12. Security Ownership of Certain Beneficial Owners
and Management. . . . . . . . . . . . . . . . . 103
Item 13. Certain Relationships and Related Transactions. 104
PART IV
Item 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K . . . . . . . . . . . . 104
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . 107
i
PART I
ITEM 1. BUSINESS
Unless otherwise indicated, all references to "Notes" are to Notes to
Consolidated Financial Statements contained in this report.
The registrant, Carlyle Real Estate Limited Partnership-XIII (the
"Partnership"), is a limited partnership formed in late 1982 and currently
governed by the Revised Uniform Limited Partnership Act of the State of
Illinois to invest in improved income-producing commercial and residential
real property. The Partnership sold 366,177.57 limited partnership interests
(the "Interests") commencing on June 9, 1983, pursuant to a Registration
Statement on Form S-11 under the Securities Act of 1933 (Registration No. 2-
81125 and No. 2-87033). A total of 366,177.57 Interests have been sold to
the public at $1,000 per Interest. The offering closed on May 22, 1984. No
Limited Partner has made any additional capital contribution after such date.
The Limited Partners of the Partnership share in their portion of the benefits
of ownership of the Partnership's real property investments according to the
number of Interests held.
The Partnership is engaged solely in the business of the acquisition,
operation and sale and disposition of equity real estate investments. Such
equity investments are held by fee title, leasehold estates and/or through
joint venture partnership interests. The Partnership's real estate
investments are located throughout the nation and it has no real estate
investments located outside of the United States. A presentation of
information about industry segments, geographic regions, raw materials or
seasonality is not applicable and would not be material to an understanding of
the Partnership's business taken as a whole. Pursuant to the Partnership
agreement, the Partnership is required to terminate on or before December 31,
2033. Accordingly, the Partnership intends to hold the real properties it
acquires for investment purposes until such time as sale or other disposition
appears to be advantageous. Unless otherwise described, the Partnership
expects to hold its properties for long-term investment. Due to certain
market conditions, the Partnership is not able to determine the holding period
for its remaining properties. At sale of a particular property, the net
proceeds, if any, are generally distributed or reinvested in existing
properties rather than invested in acquiring additional properties.
The Partnership has made the real property investments set forth in the
following table:
SALE OR DISPOSITION
DATE OR IF OWNED
AT DECEMBER 31, 1993,
NAME, TYPE OF PROPERTY DATE OF ORIGINAL INVESTED
AND LOCATION (g) SIZE PURCHASE CAPITAL PERCENTAGE (a) TYPE OF OWNERSHIP (b)
- ---------------------- ---------- -------- ---------------------- ---------------------
1. Copley Place multi-use complex
Boston, Massachusetts . 1,220,000 sq.ft.
n.r.a. 9/1/83 24% fee ownership of improvements
and leasehold interest in air
rights (through joint venture
partnership) (c)(d)(h)
2. 1001 Fourth Avenue Plaza
office building
Seattle, Washington . . 678,000 sq.ft.
n.r.a. 9/1/83 11/1/93 fee ownership of land and
improvements (i)
3. Plaza Tower office building
Knoxville, Tennessee. . 418,000 sq.ft.
n.r.a. 10/26/83 4% fee ownership of land and
improvements
4. Gables Corporate Plaza
office building
Coral Gables, Florida . 106,000 sq.ft.
n.r.a. 11/15/83 2% fee ownership of land and
improvements (through joint
venture partnership) (c)
5. University Park
office building
Sacramento, California. 120,000 sq.ft.
n.r.a. 1/16/84 2% fee ownership of land and
improvements
6. Sherry Lane Place
office building
Dallas, Texas . . . . . 286,000 sq.ft.
n.r.a. 12/1/83 6% fee ownership of land and
improvements (through joint
venture partnerships) (c)
7. Allied Automotive Center
Southfield, Michigan . 192,000 sq.ft.
n.r.a. 3/30/84 10/10/90 fee ownership of land and
improvements (e)
DATE OR IF OWNED
AT DECEMBER 31, 1993,
NAME, TYPE OF PROPERTY DATE OF ORIGINAL INVESTED
AND LOCATION (g) SIZE PURCHASE CAPITAL PERCENTAGE (a) TYPE OF OWNERSHIP (b)
- ---------------------- ---------- -------- ---------------------- ---------------------
8. Commercial Union Building
Quincy, Massachusetts. 172,000 sq.ft.
n.r.a. 3/12/84 8/15/91 fee ownership of land and
improvements (f)
9. 237 Park Avenue Building
New York, New York . . 1,140,000 sq.ft.
n.r.a. 8/14/84 4% fee ownership of land and
improvements (through joint
venture partnerships) (c)(h)
10. 1290 Avenue of the Americas
Building
New York, New York . . 2,000,000 sq.ft.
n.r.a. 7/27/84 8% fee ownership of land and
improvements (through joint
venture partnerships) (c)(h)
11. 2 Broadway Building
New York, New York . . 1,600,000 sq.ft.
n.r.a. 8/14/84 5% fee ownership of land and
improvements (through joint
venture partnerships) (c)(h)
12. Long Beach Plaza shopping center
Long Beach, California. 559,000 sq.ft.
g.l.a. 6/22/83 4% fee ownership of land and
improvements and leasehold
interest in the parking
structure (d)
13. Marshalls Aurora Plaza
shopping center
Aurora (Denver), Colorado 123,000 sq.ft.
g.l.a. 4/1/83 1% fee ownership of land and
improvements
14. Old Orchard shopping center
Skokie (Chicago), Illinois 843,000 sq.ft.
g.l.a. 4/1/84 8/30/93 fee ownership of land and
improvements (through a joint
venture partnership) (c)(j)
15. Heritage Park-II Apartments
Oklahoma City, Oklahoma 244 units 7/1/83 3/26/92 fee ownership of land and
improvements (through a joint
venture partnership) (c)(e)
SALE OR DISPOSITION
DATE OR IF OWNED
AT DECEMBER 31, 1993,
NAME, TYPE OF PROPERTY DATE OF ORIGINAL INVESTED
AND LOCATION (g) SIZE PURCHASE CAPITAL PERCENTAGE (a) TYPE OF OWNERSHIP (b)
- ---------------------- ---------- -------- ---------------------- ---------------------
16. Quail Place Apartments
Oklahoma City, Oklahoma 180 units 7/1/83 3/26/92 fee ownership of land and
improvements (through a joint
venture partnership) (c)(e)
17. Lake Point Apartments
Charlotte, North Carolina 208 units 9/15/83 12/29/89 fee ownership of land and
improvements
18. Eastridge Apartments
Tucson, Arizona . . . . 456 units 8/23/83 1% fee ownership of land and
improvements (through a joint
venture partnership) (c)
19. Rio Cancion Apartments
Tucson, Arizona . . . . 380 units 8/18/83 3/31/93 fee ownership of land and
improvements (e)
20. Bridgeport Apartments
Irving, Texas . . . . . 312 units 9/30/83 4/2/92 fee ownership of land and
improvements (e)
21. Carrollwood Station Apartments
Tampa, Florida. . . . . 336 units 12/16/83 1% fee ownership of land and
improvements (through a joint
venture partnership) (c)
22. Greenwood Creek II Apartments
Benbrook (Fort Worth), Texas 152 units 3/30/84 4/6/93 fee ownership of land and
improvements (e)
23. The Glades Apartments
Jacksonville, Florida. 360 units 10/9/84 1% fee ownership of land and
improvements (through a joint
venture partnership) (c)
- -----------------------
(a) The computation of this percentage for properties held at December 31,
1993 does not include amounts invested from sources other than the original
net proceeds of the public offering as described above and in Item 7.
(b) Reference is made to Note 4 and to Note 3 of the Combined Financial
Statements of JMB/NYC Office Building Associates and the Schedule XI's to the
Consolidated Financial Statements and Combined Financial Statements filed with
this annual report for the current outstanding principal balances and a
description of the long-term mortgage indebtedness secured by certain of the
Partnership's real property investments.
(c) Reference is made to Note 3 for a description of the joint venture
partnership or partnerships through which the Partnership has made this real
property investment.
(d) Reference is made to Note 8(b) for a description of the leasehold
interest, under a ground lease or air-rights lease, in the land or air-rights
on which this real property investment is situated.
(e) This property has been sold. Reference is made to Note 7 for a
description of the sale of such real property investment.
(f) The lender has concluded proceedings to realize upon its security and
took title to the property. Reference is made to Note 4(b)(9).
(g) Reference is made to Item 8 - Schedules X and XI to the Consolidated
Financial Statements and Combined Financial Statements filed with this annual
report for further information concerning real estate taxes and depreciation.
(h) Reference is made to Item 6 - Selected Financial Data for additional
operating and lease expiration data concerning this investment property.
(i) The Partnership transferred title to the lender via a deed in lieu.
Reference is made to Note 4(b)(4).
(j) The venture sold its interest in the property. Reference is made to
Note 3(d).
The Partnership's real property investments are subject to competition
from similar types of properties (including in certain areas, properties owned
or advised by affiliates of the General Partners or properties owned by
certain of the joint venture partners) in the respective vicinities in which
they are located. Such competition is generally for the retention of existing
tenants. Additionally, the Partnership is in competition for new tenants in
markets where significant vacancies are present. Reference is made to Item 7
below for a discussion of competitive conditions and capital improvement plans
of the Partnership and certain of its significant investment properties.
Approximate occupancy levels for the properties are set forth in the table in
Item 2 below to which reference is hereby made. The Partnership maintains the
suitability and competitiveness of its properties in its markets primarily on
the basis of effective rents, tenant allowances and services provided to
tenants. In the opinion of the Corporate Managing General Partner of the
Partnership, all of the investment properties held at December 31, 1993 are
adequately insured. Although there is earthquake insurance coverage for a
portion of the value of the Partnership's investment properties, the Corporate
General Partner does not believe that such coverage for the entire replacement
cost of the investment properties is available on economic terms.
In March 1993, the Partnership sold the land, related improvements and
personal property of the Rio Cancion Apartments located in Tucson, Arizona, as
described in the Partnership's Report on Form 8-K (File No. 0-12791) for March
31, 1993, which description is hereby incorporated herein by reference to such
reports. Reference is made to Note 7(e) for a further description of such
transaction.
In April 1993, the Partnership sold the land, related improvements and
personal property of the Greenwood Creek II Apartments located in Benbrook
(Fort Worth), Texas. Reference is made to Note 7(f) for a further description
of such transaction.
In May 1993, the Partnership negotiated another loan modification for the
existing mortgage note secured by Eastridge Apartments located in Tucson,
Arizona. Reference is made to Note 4(b)(5) for a further description of such
transaction.
In August 1993, the Partnership, through Orchard Associates, sold its
interest in the Old Orchard Shopping Center located in Skokie, Illinois, as
described in the Partnership's Report on Form 8-K (File No. 0-12791) for
August 30, 1993, which description is hereby incorporated herein by reference
to such report. Reference is also made to Note 3(d) for a further description
of such transaction.
In September 1993, Carrollwood Station Associates, Ltd. refinanced the
existing mortgage note secured by the Carrollwood Apartments, located in
Tampa, Florida. Reference is made to Note 4(b)(11) for a further description
of such transaction.
In November 1993, the Partnership transferred title to the 1001 Fourth
Avenue Plaza Office Building located in Seattle, Washington, as described in
the Partnership's Report on Form 8-K (File No. 0-12791) for November 1, 1993,
which description is hereby incorporated herein by reference to such report.
Reference is also made to Note 4(b)(4) for a further description of such
transaction.
In November 1993, the Partnership negotiated another loan modification
for the existing mortgage note secured by Sherry Lane Place Office Building,
located in Dallas, Texas. Reference is made to Note 4(b)(1) for a further
description of such transaction.
In January 1994, the Partnership transferred title to the University Park
Office Building located in Sacramento, California. Reference is made to Notes
4(b)(6) and 11 (b) for a further description of such transaction.
In January 1994, the Partnership transferred title to the Gables
Corporate Plaza Office Building located in Coral Gable, Florida. Reference is
made to Notes 4(b)(7) and 11(b) for a further description of such transaction.
Reference is made to Note 8(a) and to Note 4 of Notes to Combined
Financial Statements filed with this annual report for a schedule of minimum
lease payments to be received in each of the next five years, and in the
aggregate thereafter, under leases in effect at certain of the Partnership's
properties as of December 31, 1993.
At December 31, 1993, the Partnership had 23 full-time and 3 part-time
personnel, none of whom are officers or directors of the Corporate General
Partner of the Partnership. Such persons perform on-site duties at certain of
the Partnership's properties.
The terms of transactions between the Partnership, the General Partners
and their affiliates are set forth in Item 11 below to which reference is
hereby made for a description of such terms and transactions.
ITEM 2. PROPERTIES
The Partnership owns directly or through joint venture partnerships the properties or interests in the properties
referred to under Item 1 above to which reference is hereby made for a description of said properties.
The following is a listing of principal businesses or occupations carried on in and approximate occupancy levels by
quarter during fiscal years 1993 and 1992 for the Partnership's investment properties owned during 1993:
1992 1993
------------------------------- ------------------------------
At At At At At At At At
Principal Business 3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
------------------ ---- ---- ---- ----- ---- ---- ----- -----
1. Greenwood Creek II Apartments
Benbrook (Fort Worth), Texas. . . . . Residential 93% 93% 95% 97% 93% N/A N/A N/A
2. Marshalls Aurora Plaza
shopping center
Aurora (Denver), Colorado . . . . . . Retail 91% 91% 91% 91% 90% 91% 88% 91%
3. Carrollwood Station Apartments
Tampa, Florida. . . . . . . . . . . . Residential 95% 89% 93% 93% 94% 95% 96% 98%
4. Long Beach Plaza shopping center
Long Beach, California. . . . . . . . Retail 85% 85% 86% 85% 87% 81% 81% 81%
5. The Glades Apartments
Jacksonville, Florida . . . . . . . . Residential 94% 92% 98% 95% 94% 93% 98% 96%
6. Gables Corporate Plaza office building
Coral Gables, Florida . . . . . . . . Financial Services 87% 84% 84% 86% 85% 83% 83% 83%
7. Rio Cancion Apartments
Tucson, Arizona . . . . . . . . . . . Residential 97% 91% 91% 88% N/A N/A N/A N/A
8. Sherry Lane Place office building
Dallas, Texas . . . . . . . . . . . . Legal and
Financial Services 98% 91% 90% 89% 93% 90% 95% 96%
9. Eastridge Apartments
Tucson, Arizona . . . . . . . . . . . Residential 95% 91% 93% 92% 96% 89% 95% 95%
10. Copley Place multi-use complex
Boston, Massachusetts . . . . . . . . Retail/Business
Machines/Financial
Services 84% 84% 85% 92% 87% 94% 94% 93%
11. Old Orchard shopping center
Skokie (Chicago), Illinois. . . . . . Retail 61% 62% 62% 64% 62% 53% N/A N/A
12. 1001 Fourth Avenue Plaza office building
Seattle, Washington . . . . . . . . . Legal and
Financial Services 94% 96% 95% 95% 95% 92% 69% N/A
13. Plaza Tower office building
Knoxville, Tennessee. . . . . . . . . Financial Services 93% 93% 92% 86% 91% 92% 92% 91%
1992 1993
------------------------------- ------------------------------
At At At At At At At At
Principal Business 3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
------------------ ---- ---- ---- ----- ---- ---- ----- -----
14. University Park office building
Sacramento, California. . . . . . . . Engineering and
Financial Services 98% 98% 98% 98% 98%* 52% 65% 65%
15. 237 Park Avenue Building
New York, New York. . . . . . . . . . Advertising/Insurance/
Paper/Real Estate
Investment 100% 100% 100% 98% 100% 99% 99% 98%
16. 1290 Avenue of the Americas Building
New York, New York. . . . . . . . . . Financial Services 97% 97% 97% 97% 97% 95% 95% 98%
17. 2 Broadway Building
New York, New York. . . . . . . . . . Financial Services 59% 59% 59% 59% 59% 59% 29%** 30%
- -----------------
Reference is made to Item 6, Item 7, Note 8 and to Note 4 of Notes to Combined Financial Statements for further information
regarding property occupancy, competitive conditions and tenant leases at the Partnership's investment properties.
An "N/A" indicates that the property was sold or disposed and was not owned by the Partnership at the end of
the period.
* University Park office building's major tenant, California Vision Services, vacated its space of 70,697
square feet (59% of the building) upon expiration of its lease in April 1993.
** 2 Broadway Building's major tenant, Merrill Lynch, Pierce, Fenner & Smith, Incorporated vacated its space
of approximately 497,000 square feet (30% of the building) upon expiration of its lease in August 1993.
/TABLE
ITEM 3. LEGAL PROCEEDINGS
The Partnership is not subject to any material legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during 1992
and 1993.
PART II
ITEM 5. MARKET FOR THE PARTNERSHIP'S LIMITED PARTNERSHIP INTERESTS
AND RELATED SECURITY HOLDER MATTERS
As of December 31, 1993, there were 37,803 record holders of Interests in
the Partnership. There is no public market for Interests and it is not
anticipated that a public market for Interests will develop. Upon request,
the Corporate General Partner may provide information relating to a
prospective transfer of Interests to an investor desiring to transfer his
Interests. The price to be paid for the Interests, as well as any other
economic aspects of the transaction, will be subject to negotiation by the
investor. Reference is made to Article XVI of the Partnership Agreement
(included as Exhibit 3 to the Partnership's Report on Form 10-K (File No. 0-
12791) for the year ended December 31, 1992 filed on March 30, 1993 for
provisions governing the transferability of Interests which are hereby
incorporated by reference thereto.
Reference is made to Item 6 below for a discussion of cash distributions
made to the Limited Partners. Reference is made to Note 5 for a description
of the provisions of the Partnership Agreement relating to cash distributions
to the partners.
ITEM 6. SELECTED FINANCIAL DATA
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
DECEMBER 31, 1993, 1992, 1991, 1990 AND 1989
(NOT COVERED BY INDEPENDENT AUDITORS' REPORT)
1993 1992 1991 1990 1989
------------- ------------- ------------- ------------- -------------
Total income . . . . . . . . . . . . . . . $ 85,193,793 93,609,884 94,185,836 104,515,625 105,566,302
============ ============ ============ ============ ============
Operating loss . . . . . . . . . . . . . . $ 30,620,211 37,939,335 35,902,441 39,193,788 29,217,538
Partnership's share of loss from operations
of unconsolidated ventures. . . . . . . . 22,416,922 8,007,990 13,356,918 11,982,325 9,279,214
Venture partners' share of loss of ventures'
operations. . . . . . . . . . . . . . . . (2,008,939) (3,376,600) (6,392,827) (6,198,135) (4,540,864)
------------ ------------ ------------ ------------ ------------
Net operating loss . . . . . . . . . . . . 51,028,194 42,570,725 42,866,532 44,977,978 33,955,888
Gain on sale or disposition of
investment properties and extinguishment
of debt . . . . . . . . . . . . . . . . . (11,083,791) (2,132,879) (1,476,395) (3,123,908) (2,381,353)
Gain on sale of interest in unconsolidated
venture. . . . . . . . . . . . . . . . . (7,898,727) -- -- -- --
Loss on venture partner's relinquishment of
interest in investment property . . . . . -- -- 1,161,626 -- --
------------ ------------ ------------ ------------ ------------
Net loss before extraordinary items. . . . 32,045,676 40,437,846 42,551,763 41,854,070 31,574,535
Extraordinary items. . . . . . . . . . . . 141,776 (7,139,936) -- -- --
------------ ------------ ------------ ------------ ------------
Net loss . . . . . . . . . . . . . . . . . $ 32,187,452 33,297,910 42,551,763 41,854,070 31,574,335
============ ============ ============ ============ ============
Net loss per Interest (b):
Net operating loss . . . . . . . . . . . $ 134.92 111.62 112.38 113.76 89.02
Net loss / (gain) on sale or disposition of
investment properties and extinguishment
of debt . . . . . . . . . . . . . . . . (29.97) (5.77) (3.99) (4.15) (6.44)
Gain on sale of interest in unconsolidated
venture . . . . . . . . . . . . . . . . (21.35) -- -- -- --
Loss on venture partner's relinquishment of
interest in investment property . . . . -- -- 3.14 -- --
Extraordinary items. . . . . . . . . . . .38 (19.31) -- -- --
------------ ------------ ------------ ------------ ------------
Net loss . . . . . . . . . . . . . . . . . $ 83.98 86.54 111.53 109.61 82.58
============ ============ ============ ============ ============
Total assets . . . . . . . . . . . . . . . $374,787,300 489,687,072 530,051,709 558,756,999 607,572,814
Long-term debt . . . . . . . . . . . . . . $360,881,897 464,855,926 501,003,779 518,197,289 547,860,118
Cash distributions per Interest (c). . . . $ -- .50 4.25 13.50 10.00
============ ============ ============ ============ ============
- -------------
(a) The above selected financial data should be read in conjunction with
the consolidated financial statements and the related notes appearing
elsewhere in this annual report.
(b) The net loss per Interest is based upon the number of Interests
outstanding at the end of each period (366,183).
(c) Cash distributions to the Limited Partners since the inception of the
Partnership have not resulted in taxable income to such Limited Partners and
have therefore represented a return of capital. Each Partner's taxable loss
from the Partnership in each year is equal to his allocable share of the
taxable loss of the Partnership, without regard to the cash generated or
distributed by the Partnership.
/TABLE
SIGNIFICANT PROPERTY - SELECTED RENTAL AND OPERATING DATA AS OF DECEMBER 31, 1993
Property
- --------
Copley Place
multi-use complex a) The historical occupancy rate and average base rent per square foot
(excluding percentage rent) for the last five years were as follows:
Year Ending GLA Avg. Base Rent Per
December 31, Occupancy Rate (1) Square Foot (2)
------------ ----------------- ------------------
1989 . . . . . 86% $31.35
1990 . . . . . 87% 29.85
1991 . . . . . 84% 26.09
1992 . . . . . 92% 25.00
1993 . . . . . 93% 25.00
(1) As of December 31 of each year.
(2) Average base rent per square foot is based on GLA occupied as of December 31 of each year.
Base Rent Scheduled Lease Lease
b) Significant Tenants Square Feet Per Annum Expiration Date Renewal Option(s)
------------------- ----------- --------- --------------- ------------------
Neiman Marcus 104,372 $1,043,320 1/2014 N/A
(Department Store)
International Business
Machines Corporation (IBM) 279,432 7,683,640 4/1994 N/A
(Business Machines)
Bain & Company 116,763 3,543,757 8/2004 N/A
(Investments)
/TABLE
c) The following table sets forth certain information with respect to the expiration of leases
for the next ten years at the Copley Place multi-use complex:
Annualized Percent of
Number of Approx. Total Base Rent Total 1993
Year Ending Expiring GLA of Expiring of Expiring Base Rent
December 31, Leases Leases (1)(2) Leases Expiring
------------ --------- --------------- ----------- ----------
1994 20 412,424 $11,678,376 41%
1995 15 59,184 1,494,192 5%
1996 6 14,664 417,252 1%
1997 10 17,871 530,400 2%
1998 7 50,785 1,401,984 5%
1999 10 85,307 1,870,164 7%
2000 13 61,723 1,575,984 6%
2001 8 43,775 1,243,356 4%
2002 12 93,154 2,864,244 10%
2003 3 21,159 536,340 2%
(1) Excludes leases that expire in 1994 for which renewal leases or leases with replacement tenants have
been executed as of March 25, 1994.
(2) Includes anchors which lease space but not anchors which own space.
Property
- --------
1290 Avenue of
the Americas
Office Building a) The historical occupancy rate and average base rent per square foot
(excluding percentage rent) for the last five years were as follows:
Year Ending GLA Avg. Base Rent Per
December 31, Occupancy Rate (1) Square Foot (2)
------------ ----------------- ------------------
1989 . . . . . 92% $27.84
1990 . . . . . 97% 36.11
1991 . . . . . 97% 36.25
1992 . . . . . 97% 36.94
1993 . . . . . 98% 35.78
(1) As of December 31 of each year.
(2) Average base rent per square foot is based on GLA occupied as of December 31 of each year.
Base Rent Scheduled Lease Lease
b) Significant Tenants Square Feet Per Annum Expiration Date Renewal Option(s)
------------------- ----------- --------- --------------- ------------------
John Blair & Co. 253,193 $11,616,239 12/1998 1-5 year option
(Television
Communications Firm)
/TABLE
c) The following table sets forth certain information with respect to the expiration of leases
for the next ten years:
Annualized Percent of
Number of Approx. Total Base Rent Total 1993
Year Ending Expiring GLA of Expiring of Expiring Base Rent
December 31, Leases Leases (1) Leases Expiring
------------ --------- --------------- ----------- ----------
1994 20 157,517 $ 3,490,940 5%
1995 104 335,349 12,958,029 19%
1996 6 71,794 1,307,170 2%
1997 4 36,430 1,478,056 2%
1998 20 396,004 17,442,893 25%
1999 6 78,300 2,559,644 4%
2000 4 7,540 220,980 --
2001 1 96,700 3,771,300 5%
2002 9 172,933 7,161,745 10%
2003 9 182,543 7,405,102 11%
(1) Excludes leases that expire in 1994 for which renewal leases or leases with replacement tenants have
been executed as of March 25, 1993.
Property
- --------
2 Broadway
Office Building a) The historical occupancy rate and average base rent per square foot
(excluding percentage rent) for the last five years were as follows:
Year Ending GLA Avg. Base Rent Per
December 31, Occupancy Rate (1) Square Foot (2)
------------ ----------------- ------------------
1989 . . . . . 96% $23.93
1990 . . . . . 68% 32.77
1991 . . . . . 59% 30.46
1992 . . . . . 59% 27.96
1993 . . . . . 30% 46.88
(1) As of December 31 of each year.
(2) Average base rent per square foot is based on GLA occupied as of December 31 of each year.
Base Rent Scheduled Lease Lease
b) Significant Tenants Square Feet Per Annum Expiration Date Renewal Option(s)
------------------- ----------- --------- --------------- ------------------
Bear Stearns Co. 186,498 $6,398,620 4/1994 N/A
(Securities Firm)
/TABLE
c) The following table sets forth certain information with respect to the expiration of leases
for the next ten years:
Annualized Percent of
Number of Approx. Total Base Rent Total 1993
Year Ending Expiring GLA of Expiring of Expiring Base Rent
December 31, Leases Leases (1) Leases Expiring
------------ --------- --------------- ----------- ----------
1994 10 319,250 $10,288,006 46%
1995 - -- -- --
1996 7 46,586 650,142 3%
1997 3 24,822 501,984 2%
1998 3 29,411 1,013,645 5%
1999 - -- -- --
2000 - -- -- --
2001 2 29,117 296,294 1%
2002 1 5,501 114,000 1%
2003 3 5,110 246,373 1%
(1) Excludes leases that expire in 1993 for which renewal leases or leases with replacement tenants have
been executed as of March 25, 1993.
Property
- --------
237 Park Avenue
Office Building a) The historical occupancy rate and average base rent per square foot
(excluding percentage rent) for the last five years were as follows:
Year Ending GLA Avg. Base Rent Per
December 31, Occupancy Rate (1) Square Foot (2)
------------ ----------------- ------------------
1989 . . . . . 100% $27.04
1990 . . . . . 100% 34.98
1991 . . . . . 100% 35.03
1992 . . . . . 98% 33.35
1993 . . . . . 98% 30.85
(1) As of December 31 of each year.
(2) Average base rent per square foot is based on GLA occupied as of December 31 of each year.
Base Rent Scheduled Lease Lease
b) Significant Tenants Square Feet Per Annum Expiration Date Renewal Option(s)
------------------- ----------- --------- --------------- ------------------
J. Walter Thompson 456,132 $ 9,529,966 8/2006 N/A
Company
(Advertising Agency)
North American 251,952 10,101,248 8/2001 N/A
Reinsurance Company
(Insurance Company)
/TABLE
c) The following table sets forth certain information with respect to the expiration of leases
for the next ten years:
Annualized Percent of
Number of Approx. Total Base Rent Total 1993
Year Ending Expiring GLA of Expiring of Expiring Base Rent
December 31, Leases Leases (1) Leases Expiring
------------ --------- --------------- ----------- ----------
1994 2 57,936 $1,806,484 5%
1995 1 900 40,000 --
1996 2 34,630 1,527,700 4%
1997 2 29,121 1,505,072 4%
1998 - -- -- --
1999 6 121,165 5,155,499 15%
2000 1 3,450 189,750 1%
2001 9 255,047 10,220,240 30%
2002 - -- -- --
2003 2 18,388 754,975 2%
(1) Excludes leases that expire in 1994 for which renewal leases or leases with replacement tenants have
been executed as of March 25, 1993.
/TABLE
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
On June 9, 1983, the Partnership commenced an offering of $260,000,000 of
Limited Partnership Interests pursuant to a Registration Statement on Form
S-11 under the Securities Act of 1933. On October 7, 1983, the Partnership
registered an additional $140,000,000 of Limited Partnership Interests. A
total of 366,177.57 Interests were sold to the public at $1,000 per interest
(fractional interests are due to the Distribution Reinvestment Program)
between June 9, 1983 and May 22, 1984 pursuant to a public offering.
After deducting selling expenses and other offering costs, the Partner-
ship had approximately $326,000,000 with which to make investments in
income-producing commercial and residential real property, to pay legal fees
and other costs (including acquisition fees) related to such investments and
to satisfy working capital requirements. A portion of the proceeds was
utilized to acquire the properties described in Item 1 above.
At December 31, 1993, the Partnership and its consolidated ventures had
cash and cash equivalents of approximately $5,362,000. Such funds and short-
term investments of approximately $23,096,000 are available for distributions
to partners, leasing and capital improvement costs and/or operating deficits
at Long Beach Plaza and the Plaza Tower Office Building, and for the paydown
of the mortgage obligation at the Marshall's Aurora Plaza and for working
capital requirements and potential future operating deficits and significant
leasing and tenant improvement costs at certain of the Partnership's other
investment properties. The Partnership and its consolidated ventures have
currently budgeted in 1994 approximately $7,203,000 for tenant improvements
and other capital expenditures. The Partnership's share of such items and its
share of such similar items for its unconsolidated ventures in 1994 is
currently budgeted to be $5,697,000. Actual amounts expended may vary
depending on a number of factors including actual leasing activity, results of
property operations, liquidity considerations and other market conditions over
the course of the year. The source of capital for such items and for both
short-term and long-term future liquidity and distributions is expected to be
through the net cash generated by the Partnership's investment properties and
through the sale or refinancing of such investments. The Partnership's and
its ventures' mortgage obligations are generally non-recourse and therefore
the Partnership and its ventures generally are not personally obligated to pay
such mortgage indebtedness.
Many of the Partnership's investment properties currently operate in
overbuilt markets which are characterized by lower than normal occupancies
and/or reduced rent levels. Such competitive conditions have resulted in the
operating deficits described below. Based upon estimated operations of
certain of the Partnership's investment properties and on the anticipated
requirements of the Partnership to fund its share of potential leasing and
capital improvement costs at these properties, the Partnership reduced
operating cash distributions to the Limited and General Partners effective as
of the third quarter of 1991 and subsequently suspended all distributions
effective as of the first quarter of 1992.
As described more fully in Note 4, the Partnership has received or is
negotiating mortgage note modifications (certain of which have expired and
others of which expire at various dates commencing October 1996) on the Sherry
Lane Place office building, Glades Apartments, Eastridge Apartments, Long
Beach Plaza, Carrollwood Apartments, Marshall's Aurora Plaza and Copley Place
multi-use complex. The Partnership had been unsuccessful in its efforts to
obtain modifications of the loans secured by the 1001 Fourth Avenue office
building, University Park office building and the Gables Corporate Plaza, as
further discussed below and in Note 4. The Partnership has not remitted the
required debt service payments pursuant to the loan agreements on the Gables
Corporate Plaza, Long Beach Plaza, and University Park office building as
discussed below. Therefore, at December 31, 1993, the corresponding balances
of their respective mortgage notes and related deferred accrued interest
thereon have been classified as current liabilities in the accompanying
Consolidated Financial Statements (see Note 4(a)). In March 1993, the
Partnership sold its interest in the Rio Cancion Apartments and the related
mortgage loan was discharged out of the sales proceeds (reference is made to
Notes (4)(b)(3) and 7(e)). In April 1993, the Partnership sold its interest
in the Greenwood Creek II Apartments and the related mortgage loan was
discharged by the lender (reference is made to Note (4)(b)(8) and Note 7(f)).
In August 1993, Orchard Associates sold its interest in the Old Orchard
shopping center (reference is made to Note 3(d)). In November 1993, the
Partnership transferred title to the 1001 Fourth Avenue office Building to the
lender and the related mortgage loan was discharged by the lender (reference
is made to note 4(b)(4)). In January 1994, the Partnership transferred title
to the University Park Office Building to the lender and the related mortgage
loan was discharged by the lender (reference is made to note 11(b)). In
January 1994, the Partnership through Gables Corporate Plaza Associates
transferred title to the Gables Corporate Plaza Office Building to the lender
and the related mortgage loan was discharged by the lender (reference is made
to note 11(a)). For those investment properties where modifications are being
sought, or with expired modifications or short-term modifications, if the
Partnership is unable to secure new or additional modifications to the loans,
based upon current and anticipated market conditions, the Partnership may
decide not to commit any significant additional amounts to any of the
properties which are incurring, or in the future do incur, operating deficits.
This would result in the Partnership no longer having an ownership interest in
such property and would result in gain for financial reporting and Federal
income tax purposes to the Partnership with no corresponding distributable
proceeds. Such decisions would be made on a property-by-property basis.
The underlying indebtedness on certain other of the Partnership's
investment properties matures and is due and payable commencing in 1994 and
subsequent years (reference is made to Note 4 and to Note 3 of Notes to the
Combined Financial Statements). The source of repayment is expected to be
from proceeds from sale or refinancing, or extension of such indebtedness.
However, there can be no assurance that any such sales, refinancings or
extensions will occur.
Copley Place
Although occupancy at the property increased due to recent leasing
activity, the Boston office market remains very competitive due to the large
supply of available space and to the prevalence of concessions being offered
to attract and retain tenants.
Commencing January 1, 1992, cash deficits and funding requirements are
allocated equally between the Partnership and the joint venture partner. The
joint venture has obtained a modification of the existing first mortgage note
effective March 1, 1992. The modification lowered the pay rate from 12% to 9%
per annum through August 1993, and at that time, further reduced it to 7-1/2%
per annum through August 1998. The contract rate has been lowered to 10% per
annum through August 1993 and at that time further reduced to 8-1/2% per annum
through August 1998. After each monthly payment, the difference between the
contract interest rate on the outstanding principal balance of the loan,
including deferred interest, and interest paid at the applicable pay rate (as
defined) will be added to the principal balance and will accrue interest at
the contract interest rate. The outstanding principal balance, including the
unpaid deferred interest, is due and payable on August 31, 1998. In return,
the lender will be entitled to receive, as additional interest, a minority
residual participation of 10% of net proceeds (as defined) from a sale or
refinancing after the Partnership and its joint venture partner have recovered
their investments (as defined). Any cash flow from the property, after all
capital and leasing expenditures, will be escrowed for the purpose of paying
for future capital and leasing requirements. As a result of the debt
modification, the property produced cash flow in 1993, which has been escrowed
for future potential leasing requirements as set forth in the current loan
modification.
In 1994, the property is expected to experience a significant loss in
rental income in connection with the expiration of the IBM lease (245,339
square feet in April 1994 and 34,093 square feet in October 1994) representing
23% of the leasable office space in the aggregate. Although the structure of
the modification of the first mortgage loan took into account the potential
downsizing of IBM, it was originally anticipated that IBM would renew
approximately 80,000 square feet. However, IBM has notified the joint venture
that it intends to renew only 10,000 square feet. Therefore, the property's
operations will be insufficient to pay the modified debt service. The joint
venture has initiated discussions with the first mortgage lender regarding an
additional modification of the loan. There can be no assurances such
remodification will be consummated. If the joint venture is unable to secure
such remodification, the joint venture may decide not to commit any
significant additional amounts to the property. This could result in the
joint venture no longer having an ownership interest in the property and would
result in a gain for financial reporting and Federal income tax purposes with
no corresponding distributable proceeds. The joint venture is aggressively
marketing IBM's upcoming vacant space. In addition, the manager, an affiliate
of the General Partners, has agreed to defer certain management fees.
Orchard Associates
On September 2, 1993, effective August 30, 1993, Orchard Associates (in
which the Partnership and an affiliated partnership sponsored by the Corporate
General Partner each have a 50% interest) sold its interest in the Old Orchard
shopping center (reference is made to Note 3(d)). The Partnership is
currently retaining its share of the net proceeds from the sale for working
capital purposes.
JMB/NYC
At the 2 Broadway building, occupancy increased slightly to 30% during
the fourth quarter 1993, up from 29% in the previous quarter. The Downtown
Manhattan office leasing market remains depressed due to the significant
supply of, and the relatively weak demand for, tenant space. As previously
reported, Merrill Lynch, Pierce, Fenner & Smith, Incorporated's lease of
approximately 497,000 square feet of space (31% of the building's total space)
expired in August 1993. A majority of the remaining tenant roster at the
property includes several major financial services companies whose leases
expire in 1994. Most of these companies maintain back office support
operations in the building which can be easily consolidated or moved. The
Bear Stearns Co.'s lease of approximately 186,000 square feet of space (12% of
the building's total space), which expires in April 1994, is not expected to
be renewed. In addition to the competition for tenants in the Downtown
Manhattan market from other buildings in the area, there is ever increasing
competition from less expensive alternatives to Manhattan, such as locations
in New Jersey and Brooklyn, which are also experiencing high vacancy levels.
Rental rates in the Downtown market continue to be at depressed levels and
this can be expected to continue while the large amount of vacant space is
gradually absorbed. Little, if any, new construction is planned for Downtown
over the next few years. It is expected that 2 Broadway will continue to be
adversely affected by a high vacancy rate and the low effective rental rates
achieved upon releasing of space under existing leases which expire over the
next few years. In addition, the property is in need of a major renovation in
order to compete in the office leasing market. However, there are currently
no plans for a renovation because of the potential sale of the property
discussed below and because the effective rents that could be obtained under
current market conditions may not be sufficient to justify the costs of the
renovation.
Occupancy at 1290 Avenue of the Americas increased to 98%, up from 95% in
the previous quarter primarily due to Prudential Bache Securities, Inc.
occupying 25,158 square feet. The Midtown Manhattan office leasing market
remains very competitive. It is expected that the property will continue to
be adversely affected by low effective rental rates achieved upon releasing of
space covered by existing leases which expire over the next couple years and
may be adversely affected by an increased vacancy rate over the next few
years. Negotiations are currently being conducted with certain tenants who in
the aggregate occupy in excess of 300,000 square feet for the renewal of their
leases that expire in 1994 and 1995. John Blair & Co., ("Blair") a major
lessee at 1290 Avenue of the Americas (leased space approximates 253,000
square feet or 13% of the building), has filed for Chapter XI bankruptcy.
Because much of the Blair space is subleased, the 1290 venture is collecting
approximately 70% of the monthly rent due under the leases from the
subtenants. There is uncertainty regarding the collection of the balance of
the monthly rents from Blair. Accordingly, a provision for doubtful accounts
related to the rent and other receivables and accrued rents receivable
aggregating $7,659,366 has been recorded at December 31, 1993 in the
accompanying combined financial statements related to this tenant.
Occupancy at 237 Park Avenue decreased slightly to 98% in the fourth
quarter 1993, down from 99% in the previous quarter. It is expected that the
property will be adversely affected by the low effective rental rates achieved
upon releasing of existing leases which expire over the next few years and may
be adversely affected by an increased vacancy rate over the next few years.
JMB/NYC has had a dispute with the unaffiliated venture partners who are
affiliates (hereinafter sometimes referred to as the "Olympia & York
affiliates") of Olympia and York Developments, Ltd. (hereinafter sometimes
referred to as "O & Y") over the calculation of the effective interest rate
with reference to the first mortgage loan, which covers all three properties,
for the purpose of determining JMB/NYC's deficit funding obligation commencing
in 1992, as described more fully in Note 3(c). Under JMB/NYC's interpretation
of the calculation of the effective rate of interest, 2 Broadway operated at a
deficit for the year ended December 31, 1993. During the first quarter of
1993, an agreement was reached between JMB/NYC and the Olympia & York
affiliates which rescinded the default notices previously received by JMB/NYC
and eliminated any alleged operating deficit funding obligation of JMB/NYC for
the period January 1, 1992 through June 30, 1993. Accordingly, during this
period, JMB/NYC recorded interest expense at 1-3/4% over the short-term U.S.
Treasury obligation rate (subject to a minimum rate of 7% per annum), which is
the interest rate on the underlying first mortgage loan. Under the terms of
this agreement, during this period, the amount of capital contributions that
the Olympia & York affiliates and JMB/NYC would have been required to make to
the Joint Ventures, as if the first mortgage loan bore interest at a rate of
12.75% per annum (the Olympia & York affiliates' interpretation), became a
priority distribution level to the Olympia & York affiliates from the Joint
Ventures' annual cash flow or net sale or refinancing proceeds. The agreement
also entitles the Olympia & York affiliates to a 7% per annum return on such
unpaid priority distribution level amount. It was also agreed that during
this period, the excess available operating cash flow after the payment of the
priority distribution level discussed above from any of the Three Joint
Ventures will be advanced in the form of loans to pay operating deficits
and/or unpaid priority distribution level amounts of any of the other Three
Joint Ventures. Such loans will bear a market rate of interest, have a final
maturity of ten years from the date when made and will be repayable only out
of first available annual cash flow or net sale or refinancing proceeds. The
agreement also provides that except as specifically agreed otherwise, the
parties each reserves all rights and claims with respect to each of the Three
Joint Ventures and each of the partners thereof, including, without
limitation, the interpretation of or rights under each of the joint venture
partnership agreements for the Three Joint Ventures. The agreement expired on
June 30, 1993. Therefore, effective July 1, 1993, JMB/NYC is recording
interest expense at 1-3/4% over the short-term U.S. Treasury obligation rate
plus any excess operating cash flow after capital costs of the Three Joint
Ventures, such sum not to be less than 7% nor exceed a 12-3/4% per annum
interest rate. The Olympia & York affiliates dispute this calculation and
contend that the 12-3/4% per annum fixed rate applies.
JMB/NYC continues to seek, among other things, a restructuring of the
joint venture agreements or otherwise to reach an acceptable understanding
regarding its long-term funding obligations. If JMB/NYC is unable to achieve
this, based upon current and anticipated market conditions mentioned above,
JMB/NYC may decide not to commit any additional amounts to 2 Broadway and 1290
Avenue of the Americas, which could, under certain circumstances, result in
the loss of the interest in the related ventures. The loss of an interest in
a particular venture could, under certain circumstances, permit an
acceleration of the maturity of the related Purchase Note (each Purchase Note
is secured by JMB/NYC's interest in the related venture). The failure to
repay a Purchase Note could, under certain circumstances, constitute a default
that would permit an immediate acceleration of the maturity of the Purchase
Notes for the other ventures. In such event, JMB/NYC may decide not to repay,
or may not have sufficient funds to repay, any of the Purchase Notes and
accrued interest thereon. This could result in JMB/NYC no longer having an
interest in any of the related ventures, which in that event would result in
substantial net gain for financial reporting and Federal income tax purposes
to JMB/NYC (and through JMB/NYC and the Partnership, to the Limited Partners)
with no distributable proceeds. In addition, under certain circumstances as
more fully discussed in Note 3(c), JMB/NYC may be required to make additional
capital contributions to certain of the Joint Ventures in order to fund the
deficit restoration obligation associated with a deficit balance in its
capital account, and the Partnership could be required to bear a share of such
capital contributions obligation.
If JMB/NYC is successful in its negotiations to restructure the Three
Joint Ventures agreements and retains an interest in one or more of these
investment properties, there would nevertheless need to be a significant
improvement in current market and property operating conditions (including a
major renovation of the 2 Broadway building) resulting in a significant
increase in value of the properties before JMB/NYC would receive any share of
future net sale or refinancing proceeds. The Joint Ventures that own the 2
Broadway building and land have no plans for a renovation of the property
because of the potential sale of the property discussed below and because the
effective rents that could be obtained under the current office market
conditions may not be sufficient to justify the costs of the renovation.
Given the current market and property operating conditions, it is likely that
the property would sell at a price significantly lower than the allocated
portion of the underlying debt. The first mortgage lender and JMB/NYC would
need to approve any sale of this property.
The O&Y affiliates have informed JMB/NYC that they have now received a
written proposal for the sale of 2 Broadway for a net purchase price of $15
million. The first mortgage lender has preliminarily agreed to the concept of
a sale of the building but has not approved the terms of any proposed offer
for purchase. Accordingly, a sale pursuant to the proposal received by the
O&Y affiliates would be subject to, among other things, the approval of the
first mortgage lender as well as JMB/NYC. While there can be no assurance
that a sale would occur pursuant to such proposal or any other proposal, if
this proposal were to be accepted by or consented to by all required parties
and the sale completed pursuant thereto, and if discussions with the O&Y
affiliates relating to the proposal were finalized to allocate the unpaid
first mortgage indebtedness currently allocated to 2 Broadway to 237 Park and
1290 Avenue of the Americas after completion of the sale, then the 2 Broadway
Joint Ventures would incur a significant loss for financial reporting
purposes. Accordingly, a provision for value impairment has been recorded for
financial reporting purposes for $192,627,560, net of the non-recourse portion
of the Purchase Notes including related accrued interest related to the 2
Broadway Joint Venture interests that are payable by JMB/NYC to the O&Y
affiliates in the amount of $46,646,810. The provision for value impairment
has been allocated $136,534,366 and $56,093,194 to the O&Y affiliates and
JMB/NYC, respectively. Such provision has been allocated to the partners to
reflect their respective ownership percentages before the effect of the non-
recourse promissory notes including related accrued interest. The provision
for value impairment is not a loss recognizable for Federal income tax
purposes.
There are certain risks and uncertainties associated with the
Partnership's investments made through joint ventures, including the
possibility that the Partnership's joint venture partners might become unable
or unwilling to fulfill their financial or other obligations, or that such
joint venture partners may have economic or business interests or goals that
are inconsistent with those of the Partnership. O & Y and certain of its
affiliates have been involved in bankruptcy proceedings in the United States
and Canada and similar proceedings in England. The Olympia & York affiliates
have not been directly involved in these proceedings. During the quarter
ended March 31, 1993, O & Y emerged from bankruptcy protection in the Canadian
proceedings. In addition, a reorganization of the company's United States
operations has been completed, and affiliates of O & Y are in the process of
renegotiating or restructuring a number of loans affecting various properties
in the United States in which they have an interest. The Partnership is
unable to assess and cannot presently determine to what extent these events
may adversely affect the willingness and ability of the Olympia & York
affiliates either to meet their own obligations to the Joint Ventures and
JMB/NYC or otherwise reach an understanding with JMB/NYC regarding any funding
obligation of JMB/NYC. However, the financial difficulties of O&Y and its
affiliates may be adversely affecting the Three Joint Ventures' efforts to
restructure the mortgage loan and to re-lease vacant space in the building.
During the fourth quarter of 1992, the Joint Ventures received a notice
from the first mortgage lender alleging a default for failure to meet certain
reporting requirements of the Olympia & York affiliates contained in the first
mortgage loan documents. No monetary default has been alleged. The Olympia &
York affiliates have responded to the lender that the Joint Ventures are not
in default. JMB/NYC is unable to determine if the Joint Ventures are in
default. Accordingly, the balance of the first mortgage loan has been
classified as a current liability in the accompanying combined financial
statements at December 31, 1992 and 1993. There have not been any further
notices from the first mortgage lender. However, the Olympia & York
affiliates, on behalf of the Three Joint Ventures, continue to negotiate with
representatives of the lender (consisting of a steering committee of holders
of notes evidencing the mortgage loan) to restructure certain terms of the
existing mortgage loan in order to provide for, among other things, a fixed
rate of interest on the loan during the remaining loan term until maturity.
In conjunction with the negotiations, the Olympia & York affiliates reached an
agreement with the first mortgage lender whereby effective January 1, 1993,
the Olympia & York affiliates are limited to taking distributions of $250,000
on a monthly basis from the Three Joint Ventures reserving the remaining
excess cash flow in a separate interest-bearing account to be used exclusively
to meet the obligations of the Three Joint Ventures as approved by the lender.
There is no assurance that a restructuring of the loan will be obtained.
Interest on the first mortgage loan is calculated based upon a variable rate
related to the short-term U.S. Treasury obligation rate, subject to a minimum
rate on the loan of 7% per annum. A significant increase in the short-term
U.S. Treasury obligation rate could result in increased interest payable on
the first mortgage loan by the Three Joint Ventures.
Long Beach Plaza
In March 1993, the Partnership completed a settlement of its litigation
with Australian Ventures, Inc. ("AVI") involving a long-term ground and
improvement lease for approximately 144,000 square feet at the shopping
center. Under the terms of the settlement, AVI paid the Partnership $550,000,
and the parties terminated the ground and improvement lease. In addition,
both parties dismissed their respective claims in the lawsuit with prejudice.
The Partnership has paid the $550,000 received from AVI to the mortgage lender
for the property as scheduled debt service due for April and part of May 1993
on the loan secured by the property. The Partnership is seeking a replacement
tenant for the vacated space. In January 1994, the Partnership received an
offer to lease approximately 27,200 square feet of the first floor of the
vacated Buffum's building from Ross Dress for Less. In addition, Gold's Gym
has offered to lease approximately 34,000 square feet of the third floor of
the vacated Buffum's building and relocate from their current 9,813 square
foot space on Pine Avenue. The Partnership has several prospects for the
smaller Gold's Gym space. There can be no assurance these leases will be
consummated. The Partnership had discussions with several other tenants
regarding their requests for temporary rent relief of approximately $500,000
in the aggregate in 1992. The tenants indicated that, due to the poor sales
levels of their stores at the mall, such relief was necessary if they were to
continue to operate. After review of those tenants requesting relief, the
Partnership decided to grant temporary relief (approximately 50% of their
minimum rent) to certain tenants through December 31, 1992. The Partnership
had re-evaluated each tenant's sales level and financial situation for 1993.
Based on discussions with the tenants, additional relief was granted for 1993
and the tenants may be granted additional relief in 1994. As a result of the
foregoing, the Partnership has initiated discussions with the first mortgage
lender regarding a modification of its mortgage loan secured by the property.
Due to declining retail sales at the center along with one of the center's
anchor tenants vacating its space in 1991, the Partnership has not remitted
all of the scheduled debt service payments since June 1993. There can be no
assurance that such modification will be consummated (reference is made to
Note 4(b)(13)).
Greenwood Creek II
On April 6, 1993, the Partnership transferred title to the Greenwood
Creek II Apartments to the lender for a transfer price of $100,000 (before
selling costs and prorations) in excess of the existing mortgage balance. The
Partnership recognized a gain in 1993 for financial reporting purposes and
recognized a gain for Federal income tax purposes in 1993. Reference is made
to Note 7(f).
University Park
University Park office building's major tenant, California Vision
Services, vacated its space of 70,697 square feet (59% of the building) upon
the expiration of its lease in April 1993. The tenant's anticipated space
requirements over the next several years were expected to grow over 200,000
square feet which the property is unable to accommodate. The Partnership had
actively marketed the vacated space. As a result of Cal-Vision's move out,
the Partnership was unable to remit the full debt service payment and has
submitted cash flow from the property for April through November, 1993. In
addition, the Partnership's discussions with the first mortgage lender to
further modify the note had been unsuccessful. The Partnership transferred
title to the property to the lender in January 1994. Given the current
vacancy level of the building and the current and projected market conditions,
the likelihood of recovering any additional cash investment necessary to
retain ownership of the building would have been remote. This has resulted in
the Partnership no longer having an ownership interest in the property and
will result in net gain for financial reporting and Federal income tax
purposes to the Partnership in 1994 with no corresponding distributable
proceeds (reference is made to Note 4(b)(6)).
Rio Cancion
On March 31, 1993, the Partnership sold the Rio Cancion Apartments. The
mortgage loan was satisfied in full from the sales proceeds (reference is made
to Note 7(e)).
Carrollwood
In September 1993, the venture refinanced the mortgage loan, secured by
the property, with a third party lender (reference is made to Note 4(b)(11)).
The venture did not receive any significant proceeds upon refinancing.
1001 Fourth Avenue
In recent years, the Seattle, Washington office market has been very
competitive due to significant overbuilding, especially in the Central
Business District where 1001 Fourth Avenue Plaza is located. Current vacancy
rates exceed 15%, and rental rates remain significantly depressed. In
addition, a substantial amount of sublease space had become available in the
immediate downtown area.
Given the current and projected market conditions, the likelihood of
recovering the additional cash investment necessary to fund anticipated
operating deficits would for 1001 Fourth Avenue Plaza have been remote.
As discussed more fully in Note 1, the Partnership recorded, as a matter
of prudent accounting practice, a provision at June 30, 1992, for value
impairment to reduce the net carrying value of the 1001 Fourth Avenue Plaza
office building to the then outstanding balance of the related non-recourse
financing due to the uncertainty of the Partnership's ability to recover the
net carrying value of the investment property through future operations or
sale.
In addition, certain disputes had arisen between the Partnership and the
lender regarding a $2,000,000 letter of credit maintained by the Partnership
as additional security for the lender in connection with the existing loan
modification. As a result of defaults alleged by the lender, the lender
attempted to draw on the $2,000,000 letter of credit prior to its expiration
in November 1992. The Partnership obtained a temporary restraining order from
the Supreme Court of the State of New York disallowing the lender from drawing
on the letter of credit in consideration for the Partnership renewing the
letter of credit for a period of ninety days to allow the parties to attempt
to resolve their differences. In February 1993, the Partnership extended the
letter of credit for an additional sixty days in an attempt to resolve the
disputes with the lender. Subsequently, in March 1993, the temporary
restraining order expired. The Supreme Court of the State of New York agreed
to extend the temporary restraining order providing the Partnership post a
$2,000,000 bond by April 1, 1993. The Partnership posted a $2,000,000 bond on
April 1, 1993. The lender appealed this entire order. On April 29, 1993, the
Partnership was notified by the Supreme Court of the State of New York that a
decision was rendered in favor of the Partnership regarding the disputes
surrounding the letter of credit. In late June 1993 an order was entered by
the court reflecting said decision. The lender notified the Partnership that
it had intended to appeal the order. As a result, the lender claimed that the
release of the bond and the return of the letter of credit had been stayed
pending the appeal. Negotiations with the lender for a loan modification have
been unsuccessful. On November 1, 1993, the Partnership transferred title to
the 1001 Fourth Avenue Plaza office building in full satisfaction of the
Partnership's mortgage obligation (which had an outstanding balance, including
accrued interest, of approximately $102,607,000). In exchange for the
transfer of title, the lender had agreed to settle its litigation against the
Partnership and return the Partnership's bond and letter of credit. This
transfer has resulted in the Partnership no longer having an ownership
interest in the property. Reference is made to Note 4(b)(4).
Eastridge Apartments
The Partnership reached an agreement with the lender for another
modification effective May 1, 1993 on the mortgage loan secured by the
property. Reference is made to Note 4(b)(5) for a description of the loan
modification.
Sherry Lane Place
The Partnership reached an agreement with the lender for another
modification effective November 1993 on the mortgage loan secured by the
property. Reference is made to Note 4(b)(1) for a description of the loan
modification.
Marshall's Aurora Plaza
In January 1994, the Partnership reached an agreement with the lender for
a loan modification and extension on the mortgage loan secured by the property
effective November 1993. Reference is made to Note 4(b)(12) for a description
of the loan modification.
Gables Corporate Plaza
In January 1994, the venture transferred title to the property to the
lender. Therefore, neither the venture nor the Partnership have an ownership
interest in the property. This transfer will result in net gain for financial
reporting and Federal income tax purposes in 1994 with no corresponding
distributable proceeds. Reference is made to Note 4(b)(7) and 11(a).
Plaza Tower
The first mortgage loan secured by the property matures in November 1994.
The property produced cash flow in 1993 and is expected to operate at or near
the break even level in 1994. This is due primarily to anticipated leasing
costs associated with the rollover in tenant leases in 1994 and 1995.
Currently, the Partnership is exploring its refinancing possibilities.
However, there can be no assurance that the Partnership will be able to
refinance the mortgage loan or obtain a loan extension.
General
An affiliate of the General Partners that acts as the property manager at
a number of the Partnership's investment properties has deferred receipt of
its property management and leasing fees. The cumulative amount of deferred
property management and leasing fees at December 31, 1993 was approximately
$13,671,000 (approximately $37 per $1,000 Interest). The amounts do not bear
interest and are payable in the future.
A number of the Partnership's investments have been made through joint
venture investments. There are certain risks associated with the
Partnership's investments made through joint ventures including the
possibility that the Partnership's joint venture partners might become unable
or unwilling to fulfill their financial or other obligations or, that such
joint venture partners may have economic or business interests or goals that
are inconsistent with those of the Partnership.
Due to the market conditions and property specific factors discussed
above and the general lack of buyers of real estate today, it is likely that
the Partnership may hold some of its investment properties longer than
originally anticipated in order to maximize the recovery of its investments
and any potential return thereon. However, in light of the current severely
depressed real estate markets, it currently appears that the Partnership's
goal of capital appreciation will not be achieved. Although the Partnership
expects to distribute from sale proceeds some portion of the Limited Partners'
original capital, without a dramatic improvement in market conditions, the
Limited Partners will not receive a full return of their original investment.
RESULTS OF OPERATIONS
The increase in cash and cash equivalents and short-term investments at
December 31, 1993 as compared to December 31, 1992 is due primarily to the
distributions of $16,978,465 from Orchard Associates as a result of its
redemption (sale) of its interest in Old Orchard shopping center as more fully
described in Note 3(d). In addition, the increase in cash is due to cash flow
generated from property operations at the Copley Place multi-use complex being
reserved to fund budgeted capital improvements pursuant to the loan
modification agreement as more fully described in Note 4(b)(10) and the
receipt of sales proceeds from the sales of the Rio Cancion Apartments in
March 1993 and the Greenwood Creek II Apartments in April 1993. Reference is
made to Notes 7(e) and 7(f).
The decrease in restricted funds at December 31, 1993 as compared to
December 31, 1992 is due primarily to the Partnership being released from its
letter of credit obligation as a result of the transfer of title to the 1001
Fourth Avenue office building as more fully described in Note 4(b)(4).
The increase in escrow deposits and accrued real estate taxes at December
31, 1993 as compared to December 31, 1992 is due primarily to the timing of
real estate tax payments at certain of the Partnership's investment
properties.
The decrease in investment in unconsolidated venture at equity at
December 31, 1993 as compared to December 31, 1992 is due primarily to the
distributions of $16,978,465 from Orchard Associates as a result of its
redemption of interest in Old Orchard Shopping Center. In addition, the
decrease was partially offset by the Partnership's share of gain on sale of
interest in unconsolidated venture of $7,898,727 as a result of the above
event (Note 3(d)). Also, the decrease was partially offset by the $1,200,400
investment, which represents the Partnership's paid-in capital obligation, in
Carlyle Investors, Inc. (the general partner of Carlyle-XIII Associates, L.P.)
and Carlyle Managers, Inc. (the general partner of JMB Office Building
Associates, L.P.) of which the Partnership is a 20% shareholder (see Note
3(c)). The corresponding increase in amounts due affiliates is primarily the
result of the above stated obligation.
The increase in venture partners' subordinated equity in ventures at
December 31, 1993 as compared to December 31, 1992 and the corresponding
decrease in venture partners' share of loss from ventures operations for the
twelve months ended December 31, 1993 as compared to the twelve months ended
December 31, 1992 and 1991 is due primarily to the decrease in operating
losses which resulted from the lower accrual rate on the loan modification as
well as higher occupancy at the Copley Place multi-use complex.
The increase in rents and other receivables at December 31, 1993 as
compared to December 31, 1992 is due primarily to the timing of escalations
from tenants relating to 1993 at certain of the partnership investment
properties.
The decreases in prepaid expenses, land and leasehold interests, building
and improvements, accumulated depreciation, deferred expenses, accrued rents
receivable, current portion of long term debt, unearned rents, tenant security
deposits and long term debt at December 31, 1993 as compared to December 31,
1992 and the related decreases in rental income, mortgage and other interests,
depreciation property operating expenses and general and administrative
expenses and the increase in amortization for the year ended December 31, 1993
as compared to the year ended December 31, 1992 are due primarily to the
transfer of title to the 1001 Fourth Avenue office building in November 1993
(reference is made to Note 4(b)(4) and the sales of the Rio Cancion Apartments
in March 1993 and the Greenwood Creek II Apartments in April 1993 (reference
is made to Notes 7(e) and 7(f)).
The decrease in rental income, mortgage and other interest, depreciation,
and general and administrative expenses for the twelve months ended December
31, 1992 as compared to the twelve months ended December 31, 1991 is due
primarily to the sales of Quail Place and Heritage Park II Apartments in March
1992 and Bridgeport Apartments in April 1992 (as more fully discussed in Note
7).
The decrease in interest income for the year ended December 31, 1993 as
compared to the year ended December 31, 1992 and 1991 is due primarily to
lower yields and lower average balances held in interest bearing U.S.
government obligations in the subsequent periods.
The increase in property operating expenses for the year ended December
31, 1992 as compared to the year ended December 31, 1991 is primarily due to
increased repairs and maintenance and utilities expense during 1992 at the
Copley Place multi-use complex. The increase is partially offset by the sales
of the Quail Place and Heritage Park II Apartments in March 1992 and
Bridgeport Apartments in April 1992 (as more fully discussed in Note 7).
The increase in professional services for the year ended December 31,
1992 as compared to the year ended December 31, 1991 is primarily attributable
to legal fees associated with the litigation involving the Long Beach Plaza.
The increase in amortization of deferred expenses for the year ended
December 31, 1992 as compared to the year ended December 31, 1991 is due to
increased leasing commissions recorded and amortized at certain of the
investment properties during 1992.
The provision for value impairment of $6,409,039 at December 31, 1992 is
due primarily to the reduction of the net carrying value of the 1001 Fourth
Avenue office building as of June 30, 1992. (See Note 1.)
The increase in the Partnership's share of the loss from operations of
unconsolidated ventures and the related increase in the Partnership's deficit
investment in unconsolidated venture for the year ended December 31, 1993 as
compared to the year ended December 31, 1992 is due primarily to (i) a
$192,627,560 provision for value impairment recorded in 1993 for 2 Broadway
due to the potential sale of the property at a sales price significantly below
its net carrying value, as more fully discussed above, (ii) an $11,946,285
provision for doubtful accounts recorded by JMB/NYC due to the uncertainty of
collectibility of amounts due from the Olympia & York affiliates to the Three
Joint Ventures, (iii) an $11,551,049 provision for doubtful accounts recorded
by JMB/NYC due to the uncertainty of collectibility of amounts due from
tenants at the Three Joint Ventures' real estate investment properties, and
(iv) increased aggregate interest accrued with reference to the Three Joint
Ventures' mortgage loan commencing July 1, 1993 as a result of the expiration
of the agreement with the Olympia & York affiliates, as more fully discussed
in Note 3(c).
The decrease in the Partnership's share of loss of operations of
unconsolidated ventures for the year ended December 31, 1992 as compared to
the year ended December 31, 1991 is primarily due to (i) the change in profit
and loss allocation from 1991 to 1992 pursuant to the Three Joint Ventures'
agreements, as more fully described in Note 3(c) of Notes to Financial
Statements, (ii) the collection in 1992 of $6,069,444 of a total $13,340,601
bankruptcy claim against Drexel Burnham Lambert, a former tenant of the 2
Broadway Building, and (iii) the reduced aggregate interest accrued on the
joint ventures' mortgage loan commencing in 1992 based upon the interest
accrual determined by JMB/NYC, as more fully described above.
The net gain of $11,083,791 consists of a gain on the sale of the Rio
Cancion Apartments of $2,524,958 (see Note 7(e)), a gain on the sale of the
Greenwood Creek II Apartments of $1,787,073 (see Note 7(f)), a gain on the
transfer of title to the 1001 Fourth Avenue office building of $6,771,760 (see
Note 4(b)(4)).
The extraordinary item is the Partnership's share of prepayment penalty
of $141,776 relating to the refinancing of the original mortgage note at the
Carrollwood Apartments (see Note 4(b)(11)).
The net gain on sale in 1992 of $9,422,815 related to the sales of the
Quail Place and Heritage Park II Apartments in March 1992, and Bridgeport
Apartments in April 1992 has been reflected as a gain on sales of $2,132,879,
and an extraordinary gain of forgiveness of indebtedness of $7,289,936 (as
more fully discussed in Note 7). In addition, the extraordinary item includes
the Partnership's share of the prepayment penalty (of $150,000) related to the
refinancing of the original mortgage note at the Glades Apartments (as more
fully discussed in Note 4(b)(2)).
INFLATION
Due to the decrease in the level of inflation in recent years, inflation
generally has not had a material effect on rental income or property operating
expenses.
To the extent that inflation does have an adverse impact on property
operating expenses, the increased expense may be offset by amounts recovered
from tenants, as many long-term leases at the Partnership's commercial
properties have escalation clauses covering increases in the cost of operating
and maintaining the properties as well as real estate taxes. Therefore, the
effect on operating earnings generally will depend upon whether properties
remain substantially occupied. In addition, substantially all of the leases -
at the Partnership's shopping center investments contain provisions which
entitle the property owner to participate in gross receipts of tenants above
fixed minimum amounts.
Future inflation may also tend to cause capital appreciation of the
Partnership's investment properties over a period of time as rental rates and
replacement costs of properties increase.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
INDEX
Independent Auditors' Report
Consolidated Balance Sheets, December 31, 1993 and 1992
Consolidated Statements of Operations, years ended December 31,
1993, 1992 and 1991
Consolidated Statements of Partners' Capital Accounts (Deficits),
years ended December 31, 1993, 1992 and 1991
Consolidated Statements of Cash Flows, years ended December 31,
1993, 1992 and 1991
Notes to Consolidated Financial Statements
SCHEDULE
--------
Supplementary Income Statement Information X
Consolidated Real Estate and Accumulated Depreciation XI
SCHEDULES NOT FILED:
All schedules other than those indicated in the index have been omitted
as the required information is inapplicable or the information is presented in
the consolidated financial statements or related notes.
JMB/NYC OFFICE BUILDING ASSOCIATES
AND UNCONSOLIDATED VENTURES
INDEX
Independent Auditors' Report
Combined Balance Sheets, December 31, 1993 and 1992
Combined Statements of Operations, years ended December 31,
1993, 1992 and 1991
Combined Statements of Partners' Capital Accounts (Deficit),
years ended December 31, 1993, 1992 and 1991
Combined Statements of Cash Flows, years ended December 31,
1993, 1992 and 1991
Notes to Combined Financial Statements
SCHEDULE
--------
Supplementary Income Statement Information X
Combined Real Estate and Accumulated Depreciation XI
SCHEDULES NOT FILED:
All schedules other than those indicated in the index have been omitted
as the required information is inapplicable or the information is presented in
the combined financial statements or related notes.
INDEPENDENT AUDITORS' REPORT
The Partners
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII:
We have audited the consolidated financial statements of Carlyle Real
Estate Limited Partnership - XIII, a limited partnership, (the Partnership),
and consolidated ventures as listed in the accompanying index. In connection
with our audits of the consolidated financial statements, we also have audited
the financial statement schedules as listed in the accompanying index. These
consolidated financial statements and financial statement schedules are the
responsibility of the General Partners of the Partnership. Our responsibility
is to express an opinion on these consolidated financial statements and
financial statement schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by the General Partners of the Partnership, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of the
Partnership and consolidated ventures at December 31, 1993 and 1992, and the
results of their operations and their cash flows for each of the years in the
three-year period ended December 31, 1993, in conformity with generally
accepted accounting principles. Also in our opinion, the related financial
statement schedules, when considered in relation to the basic consolidated
financial statements taken as a whole, present fairly, in all material
respects, the information set forth therein.
As discussed in Note 3(c) to the consolidated financial statements, the
Partnership and its affiliated partners in JMB/NYC Office Building Associates,
L.P. (JMB/NYC) are in dispute with the unaffiliated partners in the real
estate ventures over the calculation of the effective interest rate with
reference to the first mortgage loan which covers all the real estate owned
through JMB/NYC's joint ventures. The Partnership and its affiliated partners
in JMB/NYC believe that, for purposes of calculating cash flow deficits and
for financial reporting purposes, the joint venture agreements for JMB/NYC's
real estate joint ventures require interest to be computed at an effective
rate of 1-3/4% over the short-term U.S. Treasury obligation rate (subject to a
minimum rate of 7% per annum) plus any excess monthly Net Cash Flow of the
real estate owned through JMB/NYC's joint ventures, such sum not to exceed 12-
3/4% per annum. The unaffiliated partners in the real estate joint ventures
contend that a 12-3/4% per annum interest rate applies. The Partnership's
share of disputed interest aggregated $2,386,000 at December 31, 1993. The
ultimate outcome of the dispute cannot presently be determined. Accordingly,
the Partnership's share of the disputed interest has not been included in the
Partnership's share of operations of unconsolidated ventures for 1993. In
(Continued)
addition, as described in Notes 3 and 4 of the notes to the consolidated
financial statements, the Partnership is in dispute or negotiations with
various lenders and venture partners in connection with certain of its
investment properties. Such disputes or negotiations could result, under
certain circumstances, in the Partnership no longer having an ownership
interest in these investment properties. The ultimate outcome of these
disputes or negotiations cannot be presently determined. The consolidated
financial statements do not include any adjustments that might result from
these uncertainties.
KPMG PEAT MARWICK
Chicago, Illinois
March 28, 1994
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1993 AND 1992
ASSETS
1993 1992
------------ -----------
Current assets:
Cash and cash equivalents (note 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,362,152 2,627,520
Short-term investments (note 1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,095,901 4,624,942
Restricted funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 538,800 2,857,906
Rents and other receivables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,711,359 3,280,727
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 397,109 498,106
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,918,882 3,284,294
------------ ------------
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,024,203 17,173,495
Investment properties, at cost (notes 2, 3 and 4) - Schedule XI:
Land and leasehold interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,002,062 39,324,545
Buildings and improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 447,201,128 588,491,034
------------ ------------
474,203,190 627,815,579
Less accumulated depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149,914,951 178,425,639
------------ ------------
Total investment properties, net of accumulated depreciation . . . . . . . . . . . . . . . . 324,288,239 449,389,940
------------ ------------
Investment in unconsolidated venture, at equity (notes 1 and 3). . . . . . . . . . . . . . . . . . . . 2,446,681 9,598,799
Deferred expenses (note 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,983,034 7,214,461
Accrued rents receivable (note 1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 487,289 3,243,021
Venture partners' deficits in ventures (note 1). . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,557,854 3,067,356
------------ ------------
$374,787,300 489,687,072
============ ============
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED BALANCE SHEETS - CONTINUED
1993 1992
------------ -----------
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
Current liabilities:
Current portion of long-term debt (note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 94,086,630 96,553,360
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,397,159 2,387,568
Amounts due to affiliates (note 9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,894,459 13,668,292
Unearned rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 770,237 1,128,152
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,591,163 7,988,024
Accrued real estate taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,064,479 1,373,462
------------ ------------
Total current liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122,804,127 123,098,858
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 880,056 999,795
Investment in unconsolidated venture, at equity (notes 1, 3 and 10). . . . . . . . . . . . . . . . . . 72,546,193 50,385,319
Long-term debt, less current portion (note 4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 360,881,897 464,855,926
------------ ------------
Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 557,112,273 639,339,898
Venture partners' subordinated equity in venture (note 1). . . . . . . . . . . . . . . . . . . . . . . 330,185 814,880
Partners' capital accounts (deficits) (notes 1 and 5):
General partners:
Capital contributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000 1,000
Cumulative net losses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (19,664,338) (18,232,317)
Cumulative cash distributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,039,022) (1,039,022)
------------ ------------
(20,702,360) (19,270,339)
------------ ------------
Limited partners (366,183 interests):
Capital contributions, net of offering costs . . . . . . . . . . . . . . . . . . . . . . . . . . 326,224,167 326,224,167
Cumulative net losses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (458,202,076) (427,446,645)
Cumulative cash distributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (29,974,889) (29,974,889)
------------ ------------
(161,952,798) (131,197,367)
------------ ------------
Total partners' capital (deficits) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (182,655,158) (150,467,706)
------------ ------------
Commitments and contingencies (notes 2, 3, 4, 7, 8 and 11)
$374,787,300 489,687,072
============ ============
See accompanying notes to consolidated financial statements.
/TABLE
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
1993 1992 1991
------------ ------------ ------------
Income:
Rental income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 84,609,796 92,814,257 93,080,468
Interest income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 583,997 795,627 1,105,368
------------ ------------ ------------
85,193,793 93,609,884 94,185,836
------------ ------------ ------------
Expenses (Schedule X):
Mortgage and other interest. . . . . . . . . . . . . . . . . . . . . . . . . . 50,753,647 57,574,370 64,090,897
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,343,123 19,490,916 20,391,223
Property operating expenses. . . . . . . . . . . . . . . . . . . . . . . . . . 43,065,564 45,068,702 43,979,318
Professional services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 708,403 681,645 576,360
Amortization of deferred expenses. . . . . . . . . . . . . . . . . . . . . . . 2,410,540 1,671,011 284,201
Management fees to general partners. . . . . . . . . . . . . . . . . . . . . . -- 12,715 108,075
General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . 532,727 640,821 658,203
Provision for value impairment (note 1). . . . . . . . . . . . . . . . . . . . -- 6,409,039 --
------------ ------------ ------------
115,814,004 131,549,219 130,088,277
------------ ------------ ------------
Operating loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,620,211 37,939,335 35,902,441
Partnership's share of loss from operations of
unconsolidated ventures (notes 1 and 10) . . . . . . . . . . . . . . . . . . . 22,416,922 8,007,990 13,356,918
Venture partners' share of loss of ventures' operations. . . . . . . . . . . . . (2,008,939) (3,376,600) (6,392,827)
------------ ------------ ------------
Net operating loss . . . . . . . . . . . . . . . . . . . . . . . . . . . 51,028,194 42,570,725 42,866,532
Gain on sale or disposition of investment properties and
extinguishment of debt (notes 4 and 7) . . . . . . . . . . . . . . . . . . . . (11,083,791) (2,132,879) (1,476,395)
Gain on sale of interest in unconsolidated venture (note 3(d)) . . . . . . . . . (7,898,727) -- --
Loss on venture partners' relinquishment of interest
in investment property (note 3(e)) . . . . . . . . . . . . . . . . . . . . . . -- -- 1,161,626
------------ ------------ ------------
Net loss before extraordinary items. . . . . . . . . . . . . . . . . . . 32,045,676 40,437,846 42,551,763
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF OPERATIONS - CONTINUED
1993 1992 1991
------------ ------------ ------------
Extraordinary items (notes 4(b)(2), 7(b) and (c)). . . . . . . . . . . . . . . . 141,776 (7,139,936) --
------------ ------------ ------------
Net loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 32,187,452 33,297,910 42,551,763
============ ============ ============
Net loss per limited partnership interest (note 1):
Net operating loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 134.92 111.62 112.38
Gain on sale or disposition of investment properties
and extinguishment of debt . . . . . . . . . . . . . . . . . . . . . . . . (29.97) (5.77) (3.99)
Gain on sale of interest in unconsolidated venture . . . . . . . . . . . . . (21.35) -- --
Loss on venture partners' relinquishment of interest
in investment property . . . . . . . . . . . . . . . . . . . . . . . . . . -- -- 3.14
Extraordinary items. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38 (19.31) --
------------ ------------ ------------
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 83.98 86.54 111.53
============ ============ ============
See accompanying notes to consolidated financial statements.
/TABLE
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
GENERAL PARTNERS LIMITED PARTNERS (366,183 INTERESTS)
-------------------------------------------------------- ------------------------------------------------
CONTRI-
BUTIONS
NET NET OF NET
CONTRI- EARNINGS CASH OFFERING EARNINGS CASH
BUTIONS (LOSS) DISTRIBUTIONS TOTAL COSTS (LOSS) DISTRIBUTIONS TOTAL
------- ---------- ------------- ----------- ------------ ------------ ------------- ------------
Balance (deficit)
December 31, 1990 . $1,000 (14,910,702) (966,548) (15,876,250) 326,224,167 (354,918,587) (28,235,517) (56,929,937)
Net loss . . . . . . -- (1,711,514) -- (1,711,514) -- (40,840,249) -- (40,840,249)
Cash distributions
($4.25 per limited
partnership
interest) . . . . . -- -- (64,845) (64,845) -- -- (1,556,280) (1,556,280)
------ ----------- ---------- ----------- ------------ ------------ ----------- ------------
Balance (deficit)
December 31, 1991 . 1,000 (16,622,216) (1,031,393) (17,652,609) 326,224,167 (395,758,836) (29,791,797) (99,326,466)
Net loss . . . . . . -- (1,610,101) -- (1,610,101) -- (31,687,809) -- (31,687,809)
Cash distributions
($.50 per limited
partnership
interest) . . . . . -- -- (7,629) (7,629) -- -- (183,092) (183,092)
------ ----------- ---------- ----------- ------------ ------------ ----------- ------------
Balance (deficit)
December 31, 1992 . 1,000 (18,232,317) (1,039,022) (19,270,339) 326,224,167 (427,446,645) (29,974,889) (131,197,367)
Net loss . . . . . . -- (1,432,021) -- (1,432,021) -- (30,755,431) -- (30,755,431)
Cash distributions
($0 per limited
partnership
interest) . . . . . -- -- -- -- -- -- -- --
------ ----------- ---------- ----------- ------------ ------------ ----------- ------------
Balance (deficit)
December 31, 1993 . $1,000 (19,664,338) (1,039,022) (20,702,360) 326,224,167 (458,202,076) (29,974,889) (161,952,798)
====== =========== ========== =========== ============ ============ =========== ============
See accompanying notes to consolidated financial statements.
/TABLE
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
1993 1992 1991
------------ ------------ ------------
Cash flows from operating activities:
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(32,187,452) (33,297,910) (42,551,763)
Items not requiring (providing) cash or cash equivalents:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,343,123 19,490,916 20,391,223
Amortization of deferred expenses. . . . . . . . . . . . . . . . . . . . . . 2,410,540 1,671,011 284,201
Amortization of discount on long-term debt . . . . . . . . . . . . . . . . . 103,298 91,671 81,354
Long-term debt - deferred accrued interest . . . . . . . . . . . . . . . . . 13,461,723 13,710,342 13,040,330
Partnership's share of loss from operations of unconsolidated ventures,
net of distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,416,922 8,007,990 13,356,918
Venture partners' share of ventures' operations. . . . . . . . . . . . . . . (2,008,939) (3,376,600) (6,392,827)
Gain on sale of investment property and extinguishment of debt . . . . . . . (11,083,791) (2,132,879) (1,476,395)
Provision for value impairment (note 1). . . . . . . . . . . . . . . . . . . -- 6,409,039 --
Extraordinary items. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141,776 (7,139,936) --
Gain on sale of interest in unconsolidated venture . . . . . . . . . . . . . (7,898,727) -- --
Loss on venture partner's relinquishment of interest of investment property. -- -- 1,161,626
Changes in:
Restricted funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,319,106 (272,906) --
Rents and other receivables. . . . . . . . . . . . . . . . . . . . . . . . . (430,632) 1,227,951 393,766
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,997 50,122 (38,636)
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (634,588) (2,054,307) 175,311
Accrued rents receivable . . . . . . . . . . . . . . . . . . . . . . . . . . 2,755,732 824,390 (7,307)
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,591 (1,224,442) 343,870
Unearned rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (357,915) (26,887) 314,346
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,957,457 546,217 2,272,377
Accrued real estate taxes. . . . . . . . . . . . . . . . . . . . . . . . . . 691,017 179,232 40,859
Amounts due to affiliates. . . . . . . . . . . . . . . . . . . . . . . . . . 26,167 2,390,394 2,485,952
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . . . . . . (119,739) (305,083) 353,786
------------ ------------ ------------
Net cash provided by operating activities. . . . . . . . . . . . . . . 10,015,666 4,768,325 4,228,991
------------ ------------ ------------
Cash flows from investing activities:
Cash proceeds from sale of investment properties, net of selling expenses (note 7) 1,220,737 338,196 --
Additions to investment properties . . . . . . . . . . . . . . . . . . . . . . (3,188,425) (6,144,928) (3,741,972)
Cash expended in disposition of investment properties. . . . . . . . . . . . . (55,111) -- --
Net sales (purchases) of short-term investments. . . . . . . . . . . . . . . . (18,470,959) 3,311,641 --
Partnership's distributions from unconsolidated ventures . . . . . . . . . . . 16,978,465 -- 2,772,501
Partnership's contributions to unconsolidated ventures . . . . . . . . . . . . (983,668) (1,796,723) (2,895,937)
Payment of deferred expenses . . . . . . . . . . . . . . . . . . . . . . . . . (1,030,569) (2,444,529) (2,062,606)
------------ ------------ ------------
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
1993 1992 1991
------------ ------------ ------------
Net cash used in investing activities. . . . . . . . . . . . . . . . . (5,529,530) (6,736,343) (5,928,014)
------------ ------------ ------------
Cash flows from financing activities:
Proceeds from refinancing of long-term debt. . . . . . . . . . . . . . . . . . 4,253 10,840,261 --
Retirement of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . -- (10,726,327) --
Proceeds from long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . -- -- 4,210,508
Principal payments on long-term debt . . . . . . . . . . . . . . . . . . . . . (1,789,503) (841,946) (1,575,082)
Venture partners' contributions to ventures. . . . . . . . . . . . . . . . . . 33,746 158,931 290,979
Distributions to limited partners. . . . . . . . . . . . . . . . . . . . . . . -- (183,092) (1,556,280)
Distributions to general partners. . . . . . . . . . . . . . . . . . . . . . . -- (7,629) (64,845)
------------ ------------ ------------
Net cash provided by (used in) financing activities. . . . . . . . . . (1,751,504) (759,802) 1,305,280
------------ ------------ ------------
Net increase (decrease) in cash and cash equivalents . . . . . . . . . $ 2,734,632 (2,727,820) (393,743)
============ ============ ============
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest. . . . . . . . . . . . . . . . . . . $ 35,628,310 43,340,504 48,442,796
============ ============ ============
Total sales price of investment properties, net of selling expenses. . . . . . $ 18,479,297 18,442,566 --
Mortgage loan payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . (17,258,560) (18,104,370) --
------------ ------------ ------------
Cash sales proceeds from sale of investment properties,
net of selling expenses. . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,220,737 338,196 --
============ ============ ============
Proceeds from refinancing of long-term debt (note 3(l)). . . . . . . . . . . . $ 7,455,000 -- --
Payoff of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,160,425) -- --
Prepayment penalty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (141,776) -- --
Refinancing costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (148,546) -- --
------------ ------------ ------------
Proceeds from refinancing of long-term debt. . . . . . . . . . . . . . $ 4,253 -- --
============ ============ ============
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
1993 1992 1991
------------ ------------ ------------
Non-cash investing and financing activities:
Contributions payable to unconsolidated venture (note 3(b)) . . . . . . . $ 1,200,000 -- --
============ ============ ============
Disposition of investment properties (notes 1 and 4(b)(9)):
Balance due on long-term debt cancelled. . . . . . . . . . . . . . . . $ -- -- 13,660,000
Reduction of accrued interest payable. . . . . . . . . . . . . . . . . -- -- 1,038,448
Reduction of investment properties . . . . . . . . . . . . . . . . . . -- -- (13,214,358)
Disposition costs. . . . . . . . . . . . . . . . . . . . . . . . . . . -- -- (7,695)
------------ ------------ ------------
Non-cash gain recognized due to lender realizing upon security. . . . . . $ -- -- 1,476,395
============ ============ ============
Principal balance due on mortgages payable. . . . . . . . . . . . . . . . $ -- 13,589,936 --
Payment on long-term debt from sale of investment properties. . . . . . . -- (6,300,000) --
------------ ------------ ------------
Extraordinary items - non-cash gain recognized on forgiveness of
indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ -- 7,289,936 --
============ ============ ============
Total sales price, net of selling expenses (notes 7(e) and (f)) . . . . . $ 18,479,297 -- --
Reduction in land . . . . . . . . . . . . . . . . . . . . . . . . . . . . (12,322,483) -- --
Reduction in buildings and improvements . . . . . . . . . . . . . . . . . (143,821,518) -- --
Reduction in accumulated depreciation . . . . . . . . . . . . . . . . . . 46,196,996 -- --
Balance due on long-term debt cancelled (note 4(b)(4)). . . . . . . . . . 102,606,610 -- --
Cash expended in disposition of investment property . . . . . . . . . . . (55,111) -- --
------------ ------------ ------------
Gain on sale of investment property and extinguishment of debt . . . . $ 11,083,791 -- --
============ ============ ============
See accompanying notes to consolidated financial statements.
/TABLE
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993, 1992 AND 1991
(1) BASIS OF ACCOUNTING
The accompanying consolidated financial statements include the accounts
of the Partnership and its consolidated ventures (note 3) - Partridge Place
Limited Partnership ("Heritage"), Quail Springs Limited Partnership ("Quail"),
Eastridge Associates Limited Partnership ("Eastridge"), Copley Place
Associates ("Copley Place"), Gables Corporate Plaza Associates ("Gables"),
Carrollwood Station Associates, Ltd. ("Carrollwood"), Jacksonville Cove I
Associates, Ltd. ("Glades") and Sherry Lane Associates ("Sherry Lane"). The
effect of all transactions between the Partnership and the ventures has been
eliminated.
The equity method of accounting has been applied in the accompanying
consolidated financial statements with respect to the Partnership's interests
in Orchard Associates (note 3(d)) and the Partnership's indirect interest in
(through Carlyle-XIII Associates, L.P.) JMB/NYC Office Building Associates,
L.P. ("JMB/NYC" note 3(c)).
The Partnership records are maintained on the accrual basis of accounting
as adjusted for Federal income tax reporting purposes. The accompanying
consolidated financial statements have been prepared from such records after
making appropriate adjustments to present the Partnership's accounts in
accordance with generally accepted accounting principles ("GAAP") and to
consolidate the accounts of the ventures as described above. Such adjustments
are not recorded on the records of the Partnership. The effect of these items
for the years ended December 31, 1993 and 1992 is summarized as follows:
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
1993 1992
------------------------------ ------------------------------
GAAP BASIS TAX BASIS GAAP BASIS TAX BASIS
------------ ----------- ------------- ------------
Total assets . . . . . . . . . . . . . . . . . . . . . . . $374,787,300 99,599,312 489,687,072 97,192,182
Partners' capital accounts (deficits) (note 5):
General partners. . . . . . . . . . . . . . . . . . . . (20,702,360) (34,839,564) (19,270,339) (38,961,003)
Limited partners. . . . . . . . . . . . . . . . . . . . (161,952,798) (218,137,769) (131,197,367) (240,626,413)
Net earnings (loss) (note 5):
General partners. . . . . . . . . . . . . . . . . . . . (1,432,021) 4,121,438 (1,610,101) (1,598,313)
Limited partners. . . . . . . . . . . . . . . . . . . . (30,755,431) 22,488,643 (31,687,809) (26,035,220)
Net earnings (loss) per limited partnership interest . . . (83.98) 61.41 (86.54) (71.10)
============ ============ ============ ============
/TABLE
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
The net loss per limited partnership interest is based upon the limited
partnership interests outstanding at the end of the period (366,183). Deficit
capital accounts will result, through the duration of the Partnership, in net
gain for financial reporting and Federal income tax purposes.
Certain reclassifications have been made to the 1992 financial statements
in order to conform with the 1993 presentation.
Statement of Financial Accounting Standards No. 95 requires the
Partnership to present a statement which classifies receipts and payments
according to whether they stem from operating, investing or financing
activities. The required information has been segregated and accumulated
according to the classifications specified in the pronouncement. Partnership
distributions from unconsolidated ventures are considered cash flow from
operating activities only to the extent of the Partnership's cumulative share
of net earnings. In addition, the Partnership records amounts held in U.S.
Government obligations at cost, which approximates market. For the purposes
of these statements, the Partnership's policy is to consider all such amounts
held with original maturities of three months or less (none and $500,000 at
December 31, 1993 and 1992, respectively) as cash equivalents with any
remaining amounts reflected as short-term investments.
The Partnership terminated negotiations for a partial renewal of the
lease of the primary tenant at the Commercial Union Building, which expired in
June 1991. Due to the extreme softness of the metropolitan Boston real estate
market, the Partnership decided not to commit any significant additional
capital to this property (see note 4(b)(9)). In August 1991, the second
mortgage lender realized upon its security interest by taking title to the
Commercial Union Building as a result of the Partnership not remitting the
required debt service payments. This resulted in the Partnership no longer
having an ownership interest in the property and resulted in a gain to the
Partnership of approximately $1,476,000 for financial reporting purposes and
$3,240,000 for Federal income tax purposes with no corresponding distributable
proceeds in 1991.
In July 1992, the Partnership executed a lease with the 1001 Fourth
Avenue Plaza office building's largest tenant, Seattle-First National Bank,
for a renewal of a portion of their current space effective October 1993, when
its existing 259,000 square foot lease expired. The renewal resulted in
Seattle-First National Bank leasing 95,000 square feet for a ten year period.
The new lease, which included a significant free rent period for the tenant,
as well as considerable tenant improvement costs, had a material negative
impact on the cash flow from the property commencing in late 1993 and placed
the property in a position whereby the net operating income would have been
insufficient to cover both debt service payments and leasing costs (see note
4(b)(4)). Due to the uncertainty of the Partnership's ability to recover the
net carrying value of the 1001 Fourth Avenue office building investment
property through future operations and sales, as of June 30, 1992, the
Partnership recorded, as a matter of prudent accounting practice, a provision
for value impairment of such investment property of $6,409,039. Such
provision was recorded to reduce the net carrying value of the investment
property to the then outstanding balance of the related non-recourse
financing.
Due to the extreme softness of the Seattle, Washington office market and
other factors, the Partnership decided not to commit any significant
additional capital to this property (see note 4(b)(4)). In November 1993, the
Partnership agreed with the mortgage lender to transfer title to the 1001
Fourth Avenue Office Building to the lender. This has resulted in 1993 in the
Partnership no longer having an ownership interest in the property and has
resulted in a net gain to the Partnership of approximately $6,772,000 for
financial reporting purposes and gain of approximately $27,567,000 for Federal
income tax purposes with no corresponding distributable proceeds.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
As more fully discussed in Note 3(c) due to the potential sale of the 2
Broadway building at a sales price significantly below its net carrying value
and due to discussions with the O & Y affiliates regarding the reallocation of
the unpaid first mortgage indebtedness currently allocated to 2 Broadway, the
2 Broadway venture has made a provision for value impairment on such
investment property of $192,627,560. The provision for value impairment has
been allocated to the partners to reflect their respective ownership
percentages before the effect of the non-recourse promissory notes, in the
amounts of $136,534,366 and $56,093,194 to the O & Y affiliates and to
JMB/NYC, respectively.
Due to the uncertainty of the 1290 Associates venture's ability to
recover the net carrying value of the 1290 Avenue of the Americas Building
through future operations and sale, the 1290 Associates venture made a
provision for value impairment on such investment property of $51,423,084.
Such provision at September 30, 1992 was recorded to effectively reduce the
net carrying value of the investment property and the related deferred
expenses to the then outstanding balance of the related non-recourse financing
allocated to the joint venture and its property. This provision was allocated
to the unaffiliated venture partners in accordance with the terms of the
venture agreement and accordingly is not included in the financial statements
(see notes 1, 3 and 5 in Notes to Combined Financial Statements).
Deferred expenses are comprised principally of leasing fees which are
amortized using the straight-line method over the terms stipulated in the
related agreements, and commitment fees which are amortized over the related
commitment periods.
Although certain leases of the Partnership provide for tenant occupancy
during periods for which no rent is due and/or increases in minimum lease
payments over the term of the lease, the Partnership accrues prorated rental
income for the full period of occupancy on a straight-line basis.
Statement of Financial Accounting Standards No. 107, "Disclosures about
Fair Value of Financial Instruments", requires entities with total assets
exceeding $150 million at December 31, 1993 to disclose the SFAS 107 value of
all financial assets and liabilities for which it is practicable to estimate.
Value is defined in the Statement as the amount at which the instrument could
be exchanged in a current transaction between willing parties, other than in a
forced or liquidation sale. The Partnership believes the carrying amount of
its financial instruments classified as current assets and liabilities
(excluding current portion of long-term debt) approximates SFAS 107 value due
to the relatively short maturity of these instruments. There is no quoted
market value available for any of the Partnership's other instruments. As the
debt secured by the University Park office building, Long Beach Plaza and
Gables Corporate Plaza has been classified by the Partnership as a current
liability at December 31, 1993 (see note 4(b)), and because the resolution of
such defaults are uncertain, as the debt on the University Park Office
Building and the Gables Corporate Plaza was satisfied in January 1994 pursuant
to deeds in lieu and because the resolution of Long Beach Plaza is uncertain,
the Partnership considers the disclosure of such long-term debt to be
impracticable. The remaining debt, with a carrying balance of $454,968,527,
has been calculated to have an SFAS 107 value of $362,710,962 by discounting
the scheduled loan payments to maturity. Due to restrictions on
transferability and prepayment, and the inability to obtain comparable
financing due to previously modified debt terms or other property specific
competitive conditions, the Partnership would be unable to refinance these
properties to obtain such assumed debt amounts reported (see note 4). The
Partnership has no other significant financial instruments.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
No provision for State or Federal income taxes has been made as the
liability for such taxes is that of the partners rather than the Partnership.
However, in certain instances, the Partnership has been required under
applicable law to remit directly to the tax authorities amounts representing
withholding from distributions paid to partners.
(2) INVESTMENT PROPERTIES
(a) General
The Partnership has acquired, either directly or through joint ventures
(note 3), nine apartment complexes, three shopping centers, ten office
buildings and a multi-use complex. Nine properties have been sold or disposed
of by the Partnership as of December 31, 1993. All of the remaining
properties owned at December 31, 1993 were operating. In January 1994, the
lender took title to the University Park office building and Gables Corporate
Plaza as described in Notes 4(b)(6), 4(b)(7) and 11(a) and (b). The cost of
the investment properties represents the total cost to the Partnership or its
ventures plus miscellaneous acquisition costs.
Significant betterments and improvements are capitalized and depreciated
over their estimated useful lives. Maintenance and repair expenses are
charged to operations as incurred.
Depreciation on the operating properties has been provided over the
estimated useful lives of 5 to 30 years using the straight-line method.
All investment properties are pledged as security for the long-term debt,
for which generally there is no recourse to the Partnership. A portion of the
long-term debt on the Copley Place multi-use complex and Gables Corporate
Plaza represent mortgage loans which are subordinated to the existing senior
mortgage loans.
(b) Long Beach Plaza
The Partnership purchased Long Beach Plaza located in Long Beach,
California for $45,839,458 (net of discount on long-term debt of $10,330,542).
In January 1981, Australian Ventures, Inc. ("AVI") signed a 99 year ground and
improvement lease at the Long Beach Plaza shopping center located in Long
Beach, California for approximately 144,000 square feet. AVI sublet the space
to Buffum's Department Store, an affiliate of AVI. In March 1991, Buffum's
filed for protection from creditors under Chapter XI of the United States
Bankruptcy Code. In May 1991, Buffum's vacated the leased premises. As a
result and pursuant to certain provisions of the ground and improvement lease
that, among other things, requires continuous operation of a store at the
premises during the lease term, the Partnership sought a termination of the
lease and to obtain possession of the premises. In March 1993, the
Partnership completed a settlement of its litigation with AVI involving the
lease. Under the terms of the settlement, AVI paid the Partnership $550,000,
and the parties terminated the ground and improvement lease. In addition,
both parties dismissed their respective claims in the lawsuit with prejudice.
The Partnership paid the $550,000 received from AVI to the mortgage lender for
the property as scheduled debt service due for April and part of May 1993 on
the loan secured by the property. The Partnership has initiated discussions
with the first mortgage lender regarding a modification of its mortgage loan
secured by the property. There can be no assurance that such modification
will be consummated. If the Partnership is unable to secure a modification to
the loan, the Partnership may decide not to commit any significant additional
amounts of the property. This would result in the Partnership no longer
having an ownership interest in such property and would result in gain for
financial reporting and Federal income tax purposes to the Partnership with no
corresponding distributable proceeds.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(3) VENTURE AGREEMENTS
(a) General
The Partnership at December 31, 1993 is a party to nine operating joint
venture agreements. Pursuant to such agreements, the Partnership made initial
capital contributions of approximately $231,529,000 (before legal and other
acquisition costs and its share of operating deficits as discussed below). In
general, the joint venture partners, who are either the sellers (or their
affiliates) of the property investments being acquired, or parties which have
contributed an interest in the property being developed, or were subsequently
admitted to the ventures, make no cash contributions to the ventures, but
their retention of an interest in the property, through the joint venture, is
taken into account in determining the purchase price of the Partnership's
interest, which was determined by arm's-length negotiations. Under certain
circumstances, either pursuant to the venture agreements or due to the
Partnership's obligations as a general partner, the Partnership may be
required to make additional cash contributions to the ventures.
The Partnership has acquired, through the above ventures, three apartment
complexes, five office buildings, and a multi-use complex. The joint venture
partners (who were primarily responsible for constructing the properties)
contributed any excess of cost over the aggregate amount available from the
Partnership contributions and financing and, to the extent such funds exceeded
the aggregate costs, were to retain such excesses. Certain of the venture
properties have been financed under various long-term debt arrangements as
described in Note 4 and 3 and to Note 5 of Notes to the Combined Financial
Statements.
The Partnership generally has a cumulative preferred interest in net cash
receipts (as defined) from the properties. Such preferential interest relates
to a negotiated rate of return on contributions made by the Partnership.
After the Partnership receives its preferential return, the venture partner is
generally entitled to a non-cumulative return on its interest in the venture;
net cash receipts are generally shared in a ratio relating to the various
ownership interests of the Partnership and its venture partners. During 1993,
1992 and 1991, two, three and three, respectively, of the ventures' properties
produced net cash receipts. In addition, the Partnership generally has
preferred positions (related to the Partnership's cash investment in the
ventures) with respect to distribution of sale or refinancing proceeds from
the ventures. In general, operating profits and losses are shared in the same
ratio as net cash receipts; however, if there are no net cash receipts,
substantially all profits or losses are allocated to the partners in
accordance with their respective economic interest.
Physical management of the properties generally was performed by
affiliates of the venture partners during the development period and rent-up
period. The managers were responsible for cash flow deficits (after debt
service requirements). Compensation to the managers during such periods for
management and leasing was limited to specified payments made by the ventures,
plus any excess net cash receipts generated by the properties during the
periods. Thereafter, the management agreements generally provide for an
extended term during which the management fee is calculated as a percentage of
certain types of cash income from the property. The management terms are in
the extended term for all of the ventures.
There are certain risks associated with the Partnership's investments
made through joint ventures including the possibility that the Partnership's
joint venture partners in an investment might become unable or unwilling to
fulfill their financial or other obligations, or that such joint venture
partners may have economic or business interests or goals that are
inconsistent with those of the Partnership.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
The terms of certain of the venture agreements are summarized as follows:
(b) Copley Place
The Partnership acquired in 1983, through a joint venture with the
developer, an interest in a portion of Copley Place, a multi-use complex in
Boston, Massachusetts.
Initially, the Partnership purchased an interest in the complex from the
developer for a purchase price of $20,000,000 which was paid by giving a
purchase price note to the developer. Subsequently, the Partnership and the
developer formed Copley Place Associates which purchased the balance of the
office and retail portion of the complex from the developer for $245,000,000.
The Partnership contributed its previously acquired interest in the property
and made total cash contributions of $60,000,000 for its interest in Copley
Place Associates.
In December 1984, an affiliate of the Corporate General Partner of the
Partnership acquired ownership of the joint venture partner (see note 9).
The joint venture partner was obligated to fund (through capital
contributions and loans, as defined) any deficiency in the Partnership's
guaranteed return to 1989 and any operating deficits (as defined). Commencing
January 1, 1990, the Partnership was entitled to a preferred return of
$6,000,000 per year through December 31, 1991 of any available cash flow. The
joint venture partner was obligated through December 31, 1991 to loan amounts
to pay for any operating deficits (as defined). The joint venture partner has
loaned approximately $13,398,000 through December 31, 1993 to fund its
required obligations. The loan accrues interest at the contract rate based on
the joint venture partner's line of credit. The line of credit bears interest
at a floating rate (currently averaging 4.75% at December 31, 1993). The loan
is to be repaid from future available cash flow, as defined. In addition, the
Partnership and the joint venture partner were obligated to equally contribute
towards tenant improvement and other capital costs beginning in 1990. The
Partnership contributed $958,000 in 1991 and $847,022 in 1990 as its 50% share
of capital and tenant improvement costs at the property. In addition, the
venture partner and the Partnership each contributed $7,786,931 in October
1990 to retire a line of credit (see note 4(b)(10)). Commencing January 1,
1992, the Partnership and the venture partner are required to equally fund all
cash deficits of the property. In addition, commencing January 1, 1992,
annual cash flow (as defined) after repayment to the venture partner of
operating deficit loans, is to be allocated equally between the Partnership
and joint venture partner.
Operating profits and losses of the joint venture are 50% to the
Partnership and 50% to the joint venture partner.
The joint venture agreement further provides that, in general, upon any
sale or refinancing of the complex the first $60,000,000 of net proceeds will
be distributed equally between the Partnership and the joint venture partner.
The Partnership will then be entitled to receive an amount equal to any
cumulative deficiencies of its annual preferred return of cash flow for 1990
and 1991 (balance at December 31, 1993 is $12,000,000). The Partnership will
then be entitled to receive the next $190,000,000 plus an amount equal to
certain interest which has been paid or is payable to the developer on its
$20,000,000 purchase price note. The joint venture partner will then be
entitled to receive the next $190,000,000 plus an amount equal to certain
interest paid to it on the $20,000,000 purchase price note, with any remaining
proceeds distributable equally to the Partnership and the joint venture
partner. Reference is made to Note 4(b)(10) for a discussion of the
modification of the mortgage loan (effective March 1, 1992) for the property.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
An affiliate of the joint venture partner manages the portion of the
complex owned by the joint venture, pursuant to an agreement similar to those
described in Note 3(a).
(c) JMB/NYC
The Partnership owns indirectly through Carlyle-XIII Associates, L.P. and
JMB/NYC an interest in (i) the 237 Park Avenue Associates venture which owns
an existing 23-story office building, (ii) the 1290 Associates venture which
owns an existing 44-story office building, and (iii) the 2 Broadway Associates
and 2 Broadway Land Co. ventures which own an existing 32-story office
building (together "Three Joint Ventures" and individually a "Joint Venture").
All of the buildings are located in New York, New York. In addition to
JMB/NYC, the partners of the Three Joint Ventures include O&Y Equity Company,
L.P. and O&Y NY Building Corp. (hereinafter sometimes referred to as the
"Olympia & York affiliates"), both of which are affiliates of Olympia and York
Developments, Ltd. (hereinafter sometimes referred to as "O&Y").
JMB/NYC is a joint venture among Carlyle-XIII Associates, L.P. (of which
the Partnership holds a 99% limited partnership interest), Carlyle-XIV
Associates, L.P. and Property Partners, L.P. as limited partners and Carlyle
Managers, Inc. as the sole general partner. Effective March 25, 1993, the
Partnership became a 20% shareholder of Carlyle Managers, Inc. Related to
this investment, the Partnership has an obligation to fund $600,000 of
additional paid-in capital to Carlyle Managers, Inc. (reflected in amounts due
to affiliates in the accompanying financial statements). The terms of the
JMB/NYC venture agreement generally provide that JMB/NYC's share of the Three
Joint Ventures' annual cash flow, sale or refinancing proceeds, operating and
capital costs (to the extent not covered by cash flow from a property) and
profit and loss will be distributed to, contributed by or allocated to the
Partnership in proportion to its (indirect) share of capital contributions to
JMB/NYC. In March 1993, JMB/NYC, originally a general partnership, was
converted to a limited partnership, and the Partnership's interest in JMB/NYC,
which previously had been held directly, was contributed to Carlyle-XIII
Associates, L.P. As a result of these transactions, the Partnership currently
holds, indirectly as a limited partner of Carlyle-XIII Associates, L.P., an
approximate 25% limited partnership interest in JMB/NYC. The sole general
partner of Carlyle-XIII Associates, L.P. is Carlyle Investors, Inc., of which
the Partnership became a 20% shareholder effective March 25, 1993. Related to
this investment, the Partnership has an obligation to fund $600,000 of
additional paid-in capital (reflected in amounts due to affiliates in the
accompanying financial statements). The general partner in each of JMB/NYC
and Carlyle-XIII Associates, L.P. is an affiliate of the Partnership. For
financial reporting purposes, the allocation of profits and losses of JMB/NYC
to the Partnership is 25%.
There are certain risks and uncertainties associated with the
Partnership's investments made through joint ventures, including the
possibility that the Partnership's joint venture partners might become unable
or unwilling to fulfill their financial or other obligations (as discussed
below), or that such joint venture partners may have economic or business
interests or goals that are inconsistent with those of the Partnership.
JMB/NYC purchased a 46.5% interest in each of the Three Joint Ventures
for approximately $173,600,000, subject to a long-term first mortgage loan
which has been allocated among the individual Joint Ventures. A portion of
the purchase price is represented by four 12-3/4% promissory notes (the
"Purchase Notes") which have an aggregate outstanding principal balance of
$34,158,225 at December 31, 1993 and 1992. Such Purchase Notes, which contain
cross-default provisions, and are non-recourse to JMB/NYC, are secured by
JMB/NYC's interests in the Three Joint Ventures, and such Purchase Note
relating to the purchase of the interest in the ventures owning the 2 Broadway
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Building is additionally secured by JMB/NYC's interest in $19,000,000 of
distributable sale proceeds from the other two Joint Ventures. A default
under the Purchase Notes would include, among other things, a failure by
JMB/NYC to repay a Purchase Note upon acceleration of the maturity, and could
cause an immediate acceleration of the Purchase Notes for the other ventures.
Beginning in 1992, the Purchase Notes provide for monthly interest only
payments on the principal and accrued interest based upon the level of
distributions payable to JMB/NYC discussed below. If there are no
distributions payable to JMB/NYC or if the distributions are insufficient to
cover monthly interest on the Purchase Notes, then the shortfall interest (as
defined) accrues and compounds monthly. Interest accruals total $78,605,523
at December 31, 1993. During 1993, no payments were made on the Purchase
Notes. All of the principal and accrued interest on the Purchase Notes is due
in 1999 or, if earlier, on the sale or refinancing of the related property.
Prior to 1992, operating profits (excluding depreciation and
amortization) were allocated 30% to JMB/NYC and 70% to the Olympia & York
affiliates, and operating losses (excluding depreciation and amortization)
were allocated 96% to JMB/NYC and 4% to the Olympia & York affiliates.
Depreciation and amortization were allocated 46.5% to JMB/NYC and 53.5% to the
Olympia & York affiliates. Subsequent to 1991, pursuant to the agreement
between JMB/NYC and the Olympia & York affiliates, for the period January 1,
1992 to June 30, 1993, as discussed below, gross income is allocable to the
Olympia & York affiliates to the extent of the distributions of excess monthly
cash flow received for the period with the balance of operating profits or
losses allocated 46.5% to JMB/NYC and 53.5% to the Olympia & York affiliates.
Beginning July 1, 1993, operating profits or losses, in general, are allocated
46.5% to JMB/NYC and 53.5% to the Olympia & York affiliates.
The Three Joint Ventures agreements further provide that, in general,
upon sale or refinancing of the properties, net sale or refinancing proceeds
will be distributable 46.5% to JMB/NYC and 53.5% to the Olympia & York
affiliates subject to, as described above, repayment by JMB/NYC of its
Purchase Notes.
Under the terms of the Three Joint Ventures agreements, JMB/NYC was
entitled to a preferred return of annual cash flow, with any additional cash
flow distributable 99% to the Olympia & York affiliates and 1% to JMB/NYC,
through 1991. The Olympia & York affiliates were obligated to make capital
contributions to the Three Joint Ventures to pay any operating deficits (as
defined) and to pay JMB/NYC's preferred return through December 31, 1991.
JMB/NYC did not receive its preferred return for the fourth quarter 1991.
Subsequent to 1991, capital contributions to pay for property operating
deficits and other requirements that may be called for under the Three Joint
Ventures agreements are required to be shared 46.5% by JMB/NYC and 53.5% by
the Olympia & York affiliates.
Pursuant to the Three Joint Ventures agreements between the Olympia &
York affiliates and JMB/NYC, the effective rate of interest with reference to
the first mortgage loan for calculating JMB/NYC's share of operating cash flow
or deficits through 1991 was as though the rate were fixed at 12-3/4% per
annum (versus the short-term U.S. Treasury obligation rate plus 1-3/4% per
annum (with a minimum 7%) payable on the first mortgage loan). JMB/NYC
believes that, commencing in 1992, the joint venture partnership agreements
for the Three Joint Ventures require an effective rate of interest with
reference to the first mortgage loan, based upon each Joint Venture's
allocable share of the loan, to be 1-3/4% over the short-term U.S. Treasury
obligation rate plus any excess monthly operating cash flow after capital
costs of the Three Joint Ventures, such sum not to be less than a 7% nor
exceed a 12-3/4% per annum interest rate, rather than the 12-3/4% per annum
fixed rate that applied prior to 1992. The Olympia & York affiliates dispute
this calculation of interest expense for the period commencing July 1, 1993
and contend that the 12-3/4% per annum fixed rate applies.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
During the quarter ended March 31, 1993, an agreement was reached between
JMB/NYC and the Olympia & York affiliates which rescinded default notices
previously received by JMB/NYC alleging defaults for failing to make capital
contributions and eliminated the alleged operating deficit funding obligation
of JMB/NYC for the period January 1, 1992 through June 30, 1993. Accordingly,
during this period, JMB/NYC recorded interest expense at 1-3/4% over the
short-term U.S. Treasury obligation rate (subject to a minimum rate of 7% per
annum), which is the interest rate on the underlying first mortgage loan.
Under the terms of this agreement, during this period, the amount of capital
contributions that the Olympia & York affiliates and JMB/NYC would have been
required to make to the Three Joint Ventures as if the first mortgage loan
bore interest at a rate of 12.75% per annum (the Olympia & York affiliates'
interpretation), became a priority distribution level to the Olympia & York
affiliates from the Three Joint Ventures' annual cash flow or net sale or
refinancing proceeds. The agreement also entitles the Olympia & York
affiliates to a 7% per annum return on such unpaid priority distribution
level. It was also agreed that during this period, the excess available
operating cash flow after the payment of the priority distribution level
discussed above from any of the Three Joint Ventures will be advanced in the
form of loans to pay operating deficits and/or unpaid priority distribution
level amounts of any of the Three Joint Ventures. Such loans will bear a
market rate of interest, have a final maturity of ten years from the date when
made and will be repayable only out of first available annual cash flow or net
sale or refinancing proceeds. The agreement also provides that except as
specifically agreed otherwise, the parties each reserves all rights and claims
with respect to each of the Three Joint Ventures and each of the partners
thereof, including, without limitation, the interpretation of or rights under
each of the joint venture partnership agreements for the Three Joint Ventures.
As a result of the above noted agreement with the Olympia & York affiliates,
for the six months ended June 30, 1993, $32,523,137 represents the minimum 7%
per annum interest. Excess net cash flow, as defined, through June 30, 1993
totalled $11,648,285. Pursuant to an agreement with the first mortgage lender
discussed below, $250,000 per month is payable as a distribution to the
Olympia & York affiliates. During the period January 1, 1993 through June 30,
1993, $6,257,236 was distributed to the O&Y affiliates. The balance of
$15,067,149 represents a priority distribution level to the Olympia & York
affiliates payable from the Three Joint Ventures' annual cash flow or net sale
or refinancing proceeds, if any. The cumulative priority distribution level
payable to the Olympia & York affiliates at December 31, 1993 is $48,522,601.
The agreement expired on June 30, 1993. Therefore, effective July 1, 1993,
JMB/NYC is recording interest expense at 1-3/4% over the short-term U.S.
Treasury obligation rate plus any excess operating cash flow after capital
costs of the Three Joint Ventures, such sum not to be less than 7% nor exceed
a 12-3/4% per annum interest rate. The Olympia & York affiliates dispute this
calculation and contend that the 12-3/4% per annum fixed rate applies. Based
upon the Olympia & York affiliates' interpretation, interest expense for the
Three Joint Ventures for the six months ended December 31, 1993 was
$58,962,793. Based upon the amount of interest determined by JMB/NYC for the
six months ended December 31, 1993, interest expense for the Three Joint
Ventures was $38,441,967. Pursuant to an agreement with the first mortgage
lender, $1,500,000 of the interest payable to the Olympia & York affiliates of
$6,079,237 for the six months ended December 31, 1993 was paid. The remaining
$4,570,237 is due to the Olympia & York affiliates.
O & Y and certain of its affiliates have been involved in bankruptcy
proceedings in the United States and Canada and similar proceedings in
England. The Olympia & York affiliates have not been directly involved in
these proceedings. During the quarter ended March 31, 1993, O & Y emerged
from bankruptcy protection in the Canadian proceedings. In addition, a
reorganization of the management of the company's United States operations has
been completed, and affiliates of O & Y are in the process of renegotiating or
restructuring a number of loans affecting various properties in the United
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
States in which they have an interest. The Partnership is unable to assess
and cannot presently determine to what extent these events may adversely
affect the willingness and ability of the Olympia & York affiliates either to
meet their own obligations to the Three Joint Ventures and JMB/NYC or to
negotiate a restructuring of the joint venture agreements, or otherwise reach
an understanding with JMB/NYC regarding any future funding obligation of
JMB/NYC.
During the fourth quarter of 1992, the Three Joint Ventures received a
notice from the first mortgage lender alleging a default for failure to meet
certain reporting requirements of the Olympia & York affiliates contained in
the first mortgage loan documents. No monetary default has been alleged. The
Olympia & York affiliates have responded to the lender that the Three Joint
Ventures are not in default. JMB/NYC is unable to determine if the Three
Joint Ventures are in default. Accordingly, the balance of the first mortgage
loan has been classified as a current liability in the accompanying combined
financial statements at December 31, 1993 and 1992. There have not been any
further notices from the first mortgage lender. The Olympia & York
affiliates, on behalf of the Three Joint Ventures, continue to negotiate with
representatives of the lender (consisting of a steering committee of holders
of notes evidencing the mortgage loan), to restructure certain terms of the
existing mortgage loan in order to provide for, among other things, a
potential sale of the 2 Broadway building and a fixed rate of interest on the
loan during the remaining loan term until maturity. In conjunction with the
negotiations, the Olympia & York affiliates reached an agreement with the
first mortgage lender whereby effective January 1, 1993, the Olympia & York
affiliates are limited to taking distributions of $250,000 on a monthly basis
from the Three Joint Ventures reserving the remaining excess cash flow in a
separate interest-bearing account to be used exclusively to meet the
obligations of the Three Joint Ventures as approved by the lender. There is
no assurance that a restructuring of the loan will be obtained. Interest on
the first mortgage loan is calculated based upon a variable rate related to
the short-term U.S. Treasury obligation rate, subject to a minimum rate on the
loan of 7% per annum. An increase in the short-term U.S. Treasury obligation
rate could result in increased interest payable on the first mortgage loan by
the Three Joint Ventures.
The Olympia & York affiliates and certain other affiliates of O & Y
reached an agreement with the City of New York to defer the payment of real
estate taxes owed in July 1992 and January 1993 on properties in which O&Y
affiliates have an ownership interest, including the 237 Park Avenue, 1290
Avenue of the Americas and 2 Broadway buildings. Payment of the July 1992
real estate taxes was made in six equal monthly installments from July through
December of 1992. A similar payment program existed for the period January
through December of 1993. The March 1994 monthly real estate tax installment
payment related to the 2 Broadway building has not been paid and there is
uncertainty regarding the remittance of future installment payments related to
the building.
JMB/NYC continues to seek, among other things, a restructuring of the
joint venture partnership agreements or otherwise to reach an acceptable
understanding regarding its long-term funding obligations. If JMB/NYC is
unable to achieve this, based upon current and anticipated market conditions
mentioned above, JMB/NYC may decide not to commit any additional amounts to
the Three Joint Ventures, which could, under certain circumstances, result in
the loss of the interest in the related ventures. The loss of an interest in
a particular venture could, under certain circumstances, permit an
acceleration of the maturity of the related Purchase Note (each Purchase Note
is secured by JMB/NYC's interest in the related venture). Under certain
circumstances, the failure to repay a Purchase Note could constitute a default
under, and permit an immediate acceleration of, the maturity of the Purchase
Notes for the other ventures. In such event, JMB/NYC may decide not to repay,
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
or may not have sufficient funds to repay, any of the Purchase Notes and
accrued interest thereon. This could result in JMB/NYC no longer having an
interest in any of the related ventures, which would result in substantial net
gain for financial reporting and Federal income tax purposes to JMB/NYC with
no distributable proceeds. In such event, the Partnership would then proceed
to terminate its affairs.
If JMB/NYC is successful in its negotiations to restructure the Three
Joint Venture agreements and retains an interest in one or more of these
investment properties, there would nevertheless need to be a significant
improvement in current market and property operating conditions resulting in a
significant increase in value of the properties before JMB/NYC would receive
any share of future net sale or refinancing proceeds. Although the 2 Broadway
building is in need of a major renovation, the Joint Ventures that own the 2
Broadway building and land have no plans for a renovation of the property
because of a potential sale of the building and because the effective rents
that could be obtained under the current office market conditions may not be
sufficient to justify the costs of the renovation. Given the current market
and property operating conditions, it is likely that the property would sell
at a price significantly lower than the allocated portion of the underlying
debt. The first mortgage lender and JMB/NYC would need to approve any sale of
this property.
The O & Y affiliates have informed JMB/NYC that they have now received a
written proposal for the sale of 2 Broadway for a net purchase price of
$15,000,000. The first mortgage lender has preliminarily agreed to the
concept of a sale of the building but has not approved the terms of any
proposed offer for purchase. Accordingly, a sale pursuant to the proposal
received by the O & Y affiliates would be subject to, among other things, the
approval of the first mortgage lender as well as JMB/NYC. While there can be
no assurance that a sale would occur pursuant to such proposal or any other
proposal, if this proposal were to be accepted by or consented to by all
required parties and the sale completed pursuant thereto, and if discussions
with the O & Y affiliates relating to the proposal were finalized to allocate
the unpaid first mortgage indebtedness currently allocated to 2 Broadway to
237 Park and 1290 Avenue of the Americas after completion of the sale, then
the 2 Broadway Joint Ventures would incur a significant loss for financial
reporting purposes. Accordingly, a provision for value impairment has been
recorded for financial reporting purposes for $192,627,560, net of the non-
recourse portion of the Purchase Notes related to the 2 Broadway Joint Venture
interests that are payable by JMB/NYC to the O & Y affiliates in the amount of
$46,646,810. The provision for value impairment has been allocated
$136,534,366 and $56,093,194 to the O & Y affiliates and to JMB/NYC,
respectively. Such provisions has been allocated to the partners to reflect
their respective ownership percentages before the effect of the non-recourse
promissory notes, including related accrued interest. The provision for value
impairment is not a loss recognizable for Federal income tax purposes.
In the event of a dissolution and liquidation of a Joint Venture, the
terms of the joint venture partnership agreements between the Olympia & York
affiliates and JMB/NYC for the Three Joint Ventures provide that if there is a
deficit balance in the tax basis capital account of JMB/NYC, after the
allocation of profits or losses and the distribution of all liquidation
proceeds, then JMB/NYC generally would be required to contribute cash to the
Joint Venture in the amount of its deficit capital account balance. Taxable
gain arising from the sale or other disposition of a Joint Venture's property
generally would be allocated to the joint venture partner or partners then
having a deficit balance in its or their respective capital accounts in
accordance with the terms of the joint venture partnership agreement.
However, if such taxable gain is insufficient to eliminate the deficit balance
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
in its account in connection with a liquidation of a Joint Venture, JMB/NYC
would be required to contribute funds to the Joint Venture (regardless of
whether any proceeds were received by JMB/NYC from the disposition of the
Joint Venture's property) to eliminate any remaining deficit capital account
balance.
The Partnership's liability for such contribution, if any, would be its
share, if any, of the liability of JMB/NYC and would depend upon, among other
things, the amounts of JMB/NYC's and the Olympia & York affiliates' respective
capital accounts at the time of a sale or other disposition of Joint Venture
property, the amount of JMB/NYC's share of the taxable gain attributable to
such sale or other disposition of the Joint Venture property and the timing of
the dissolution and liquidation of the Joint Venture. In such event, the
Partnership could be required to sell or dispose of its other assets in order
to satisfy any obligation attributable to it as a partner of JMB/NYC to make
such contribution. Although the amount of such liability could be material,
the Limited Partners of the Partnership would not be required to make
additional contributions of capital to satisfy such obligation of the
Partnership. The Partnership's deficit investment balance in JMB/NYC as
reflected in the balance sheet (aggregating $72,546,193 at December 31, 1993)
does not necessarily represent the amount, if any, the Partnership would be
required to pay to satisfy its deficit restoration obligation.
The properties are being managed by an affiliate of the Olympia & York
affiliates under a long-term agreement for a management fee equal to 1% of
gross receipts. An affiliate of the Olympia & York affiliates performs
certain maintenance and repair work and construction of certain tenant
improvements at the investment properties. Additionally, the Olympia & York
affiliates have lease agreements and occupy approximately 95,000 square feet
of space at 237 Park Avenue at rental rates which approximate market.
(d) Orchard Associates
The Partnership's interest in Old Orchard shopping center (through
Orchard Associates and Old Orchard Urban Venture ("OOUV") was sold in
September 1993, as described below.
The maturity date for Orchard Associates' loan in the amount of
$18,000,000 from a commercial bank, secured solely by its interest in Old
Orchard shopping center, and originally due October 1, 1991, was extended to
December 31, 1993. The agreement required monthly installments of interest
only at the prime rate plus 1% per annum. Orchard Associates continued to
negotiate with the lender for permanent financing of this note prior to its
payoff in September 1993 as described below.
On September 2, 1993, effective August 30, 1993, OOUV and an unaffiliated
third party contributed the Old Orchard shopping center and $60,366,572 in
cash (before closing costs and prorations), respectively, to a newly formed
limited partnership. Immediately at closing, the new partnership distributed
to OOUV $60,366,572 in cash (before closing costs and prorations) in
redemption of approximately 89.5833% of OOUV's interest in the new
partnership. OOUV, the limited partner, has retained a 10.4167% interest in
the new limited partnership after such redemption. OOUV is also entitled to
receive up to an additional $4,300,000 based upon certain events (as defined)
and may earn up to an additional $3,400,000 based upon certain future earnings
of the property (as defined).
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Contemporaneously with the formation of the new limited partnership, OOUV
redeemed Orchard Associates' ("Orchard") interest in OOUV for $56,689,747
(before closing costs and prorations). Orchard used a portion of these
redemption proceeds to repay in full its $18,000,000 loan obligation plus
accrued interest. This transaction has resulted in Orchard having no
ownership interest in the property as of the effective date of the redemption
agreement. Orchard recognized a gain of $15,797,454 for financial reporting
purposes ($7,898,727 allocable to the Partnership) and recognized a gain for
Federal income tax reporting purposes of $32,492,776, $16,246,388 allocable to
the Partnership in 1993.
OOUV and Orchard have also entered into a contribution agreement whereby
they have agreed to share future gains and losses which may arise with respect
to potential revenues and liabilities from events which predated the
contribution of the property to the new venture (including, without
limitation, potential future distributions to OOUV the $4,300,000 and
$3,400,000 amounts as described above) in accordance with their pre-
contribution percentage interests. Upon receipt of all or a portion of these
contingent amounts, Orchard and the Partnership would expect to recognize
additional gain for Federal income tax and financial reporting purposes in the
year of such receipts. However, there can be no assurance that any portion of
these contingent amounts will be received.
(e) Eastridge Apartments
In late 1986, an affiliate of the Corporate General Partner assumed
management of the Eastridge Apartments. The apartment complex had been
managed by the venture partner who defaulted in its obligations under the
joint venture partnership and management agreements. In July 1991, the
Partnership finalized an agreement with the joint venture partner whereby the
partner relinquished its interest in the joint venture in return for a full
release of all past and future obligations. Upon the venture partner's
relinquishment, the balance of the venture partner's deficit capital account
was deemed uncollectible. Accordingly, in 1991, the Partnership recorded a
loss on relinquishment of venture partner's interest of $1,161,626. Such loss
was recorded to eliminate the venture partner's deficit capital account.
(4) LONG-TERM DEBT
(a) General
As described in Note 4(b) and in response to operating deficits incurred
at certain properties, the Partnership is seeking and/or has received mortgage
note modifications on certain properties. Certain of the modifications
received which have expired and others expire on various dates commencing
October 1996. In addition, certain properties have loans with scheduled
maturities commencing November 1994. Upon expiration of such modifications or
at maturity , should the Partnership be unable to secure new or additional
modifications to or refinancing of the loans, based upon current and
anticipated future market conditions, the Partnership may not commit any
significant additional amounts to these properties. This generally would
result in the Partnership no longer having an ownership interest in such
properties and may result in gain for financial reporting and Federal income
tax purposes without any net distributable proceeds. Such decisions would be
made on a property-by-property basis.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Long-term debt consists of the following at December 31, 1993 and 1992:
1993 1992
------------ -----------
11.5% Purchase Price mortgage note; secured by Copley Place multi-use complex in Boston,
Massachusetts; accruing interest through August 31, 1998 when the entire balance is
payable (note 3(b)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 62,818,952 56,025,355
12% mortgage note due August 1998; secured by Copley Place multi-use complex in Boston,
Massachusetts; balance originally payable in monthly installments of principal
and interest of $2,184,042 from October 1, 1983 through September 30, 1993 and
thereafter at the then prevailing market terms of such financing (The note has
been modified; see note 4(b)(10)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209,716,711 208,858,722
12.5% to 13.875% mortgage note originally due June 15, 1999; secured by the
1001 Fourth Avenue Plaza office building in Seattle, Washington and a $2,000,000
letter of credit secured by Partnership investments in U.S. Government obligations
in an equal amount; originally payable in monthly installments of principal and
interest of $897,458, $937,337 and $969,688 for five year periods ending June 15,
1989, 1994 and 1999, respectively. (The note has been modified and was satisfied
in 1993; see note 4(b)(4)). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 101,185,922
9-5/8% mortgage note; secured by the Plaza Tower office building in Knoxville,
Tennessee; payable in monthly installments of principal and interest of $184,421
until November 1, 1994 when the remaining principal of $17,758,395 is payable . . . . . . . 18,160,291 18,602,047
12.80% mortgage note; secured by the Gables Corporate Plaza office building in
Coral Gables, Florida; originally payable in monthly installments of principal
and interest until May 1, 1993 when the remaining principal balance was payable
(The note has been modified and was discharged in January 1994; see notes 4(b)(7)
and 11(a)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,967,836 20,389,624
13-1/8% mortgage note; secured by the Sherry Lane Place office building in Dallas,
Texas; originally payable in monthly installments of principal and interest until
December 27, 1995 when the remaining principal balance is payable. (The note has
been remodified; see note 4(b)(1)). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,498,538 40,166,829
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
1993 1992
------------ -----------
13% mortgage note secured by the Long Beach Plaza shopping center in Long Beach,
California; payable in monthly installments of principal and interest of $372,583
until June 27, 1994 when the remaining principal balance of $33,651,475 is payable . . . . 33,734,354 33,782,085
12-1/4% mortgage note; secured by the Rio Cancion apartment complex in Tucson,
Arizona; originally payable in monthly installments of principal and interest
of $123,703 until January 10, 1993 when the remaining principal balance of
$10,974,572 was scheduled to be payable. (The note has been remodified and
satisfied in 1993; see notes 4(b)(3) and 7(e)). . . . . . . . . . . . . . . . . . . . . . . -- 11,946,741
12-1/2% mortgage note; secured by the University Park office building in
Sacramento, California; originally payable in monthly installments of interest
only at the rate of 11% per annum with the difference accruing until maturity on
July 1, 1993. (The note has been modified and was discharged in January 1994;
see notes 4(b)(6) and 11(b)). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,294,125 14,593,476
Other Mortgage Loans:
Gables Corporate Plaza office building, 12.9%, due 1996 (satisfied in 1993,
see notes 4(b)(7) and 11(a)). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 2,958,900
Long Beach Plaza shopping center, non-interest bearing, (net of $9,082,213 and
$9,185,511 unamortized discount at 12% at December 31, 1993 and 1992, respectively),
due 2014. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 917,787 814,489
Marshalls Aurora Plaza shopping center, 12-3/4%; originally payable in monthly
installments of principal and interest until June 30, 1993 when the remaining
principal balance was scheduled to be payable. (The note has been modified;
see note 4(b)(12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,468,313 6,532,937
Eastridge apartment complex, 10.34%, due 1995 (modified July 1, 1987,
see note 4(b)(5)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,752,617 10,385,522
Greenwood Creek II apartment complex, 13-1/4%, due 1997 (satisfied in 1993,
see notes 4(b)(8) and 7(f)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 3,746,866
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
1993 1992
------------ -----------
Glades apartment complex, 6.1%, due 2002 (refinanced in 1992,
see note 4(b)(2)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,890,000 9,890,000
Glades apartment complex, 6% (plus, subsequent to April 1995,
50% of cash flows (as defined)), accruing interest through
October 1, 2002 when the entire balance is payable (refinanced
in 1992, see note 4(b)(2)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 950,261 950,261
Carrollwood apartment complex, 7.45%, due 1998 (refinanced in 1993, see note 4(b)(11)) . . 7,400,309 7,181,077
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,398,433 13,398,433
------------ ------------
Total debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 454,968,527 561,409,286
Less current portion of long-term debt (see note 4(b)) . . . . . . . . . . . . . . 94,086,630 96,553,360
------------ ------------
Total long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $360,881,897 464,855,926
============ ============
/TABLE
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Included in the above total long-term debt is $62,095,000 and
$69,355,510, for 1993 and 1992, respectively, which represents mortgage
interest accrued but not currently payable pursuant to the terms of the
various notes.
Five year maturities of long-term debt are as follows:
1994. . . . . . . . . . . . . . $94,086,630
1995. . . . . . . . . . . . . . 782,482
1996. . . . . . . . . . . . . . 6,159,597
1997. . . . . . . . . . . . . . 573,288
1998. . . . . . . . . . . . . . 331,738,472
===========
(b) Long-term Debt Modifications
(1) Sherry Lane Place Office Building
The existing long-term note secured by the Sherry Lane Place office
building located in Dallas, Texas was modified effective February 1, 1988 to
lower both the contract and payment interest rates. The contract interest
rate was reduced to 9% per annum for the period from March 1, 1988 through
February 28, 1993 and to 10% per annum for the period from March 1, 1993
through April 1, 1998. Interest only was payable at 6.5% per annum from
February 1, 1988 through July 31, 1991, at 8% per annum from August 1, 1991
through July 31, 1994 and at 10% per annum from August 1, 1994 through March
1, 1998. The difference between the contract rate and the interest paid was
to be deferred and bore interest at 13.125% per annum from February 1, 1988
through February 28, 1988, at 9% per annum from March 1, 1988 through February
28, 1993 and at 10% per annum from March 1, 1993 through April 1, 1998. In
addition, upon the earlier of the subsequent sale of the property or maturity
of the note, the lender was entitled to a residual participation equal to 40%
of the applicable value (as defined).
In connection with the modification, the Partnership prepaid $1,665,000
of principal without a prepayment penalty, and paid a loan modification fee of
$2,335,000.
In November 1993, the Partnership reached an agreement with the current
lender to further modify the existing long-term non-recourse mortgage note
secured by the property. Under the terms of the remodification, the existing
mortgage balance was divided into two notes. The first note of $22,000,000
bears a contract interest rate of 8% per annum for the period retroactive from
January 1, 1993 through December 31, 1994, increasing to 8.5% per annum for
the period from January 1, 1995 through April 1, 1998. Interest only is
payable on the first note at 5.75% per annum for the period retroactive to
January 1, 1993 through December 31, 1993, at 8% per annum from January 1,
1994 through December 31, 1994 and at 8.5% per annum from January 1, 1995
through April 1, 1998. The second note, consisting of the remaining unpaid
principal and accrued interest, has a zero pay and accrual rate. All excess
cash flow above debt service on the first note is to be applied first against
accrued interest on the first note and then as contingent interest on the
second note (as defined).
(2) The Glades Apartments
The long-term mortgage note secured by the Glades Apartments located in
Jacksonville, Florida was modified whereby the interest payment rate was
reduced for the period December 1, 1987 to November 30, 1989 and the
difference between the contract rate and the interest paid was deferred until
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
December 1, 1989 when the accrued interest and the then outstanding principal
balance began to amortize over a thirty year period at the original interest
rate. The entire balance was to be due and payable on October 1, 1995.
The venture received a remodification from the lender to extend the
initial payment terms of the modification through the January 1, 1991 payment.
Subsequently, the venture reached an agreement to further extend the initial
payment terms of the modification through the January 1, 1992 payment. The
venture was negotiating with the first mortgage lender regarding an additional
modification or refinancing, and submitted debt service payments under the
previously modified terms to the extent of available property cash flow
through September 30, 1992. On October 1, 1992, the venture refinanced the
existing long-term mortgage note (of approximately $10,426,000) with a first
and second mortgage note. The venture paid a prepayment penalty relating to
the original mortgage of $300,000 in connection with the refinancing. The
Partnership recognized its share of $150,000 as an extraordinary item for
financial reporting purposes. The new first mortgage loan of $9,890,000
provides for interest only payments of 6.1% from October 1, 1992 through March
31, 1995. Thereafter, monthly installments of principal and interest will be
due (amortized over a 30 year term) through the maturity of the loan on
October 1, 2002. The second mortgage loan of $950,261 accrues simple interest
of 6% per annum and requires quarterly payments of 50% of the net cash flow
(as defined) beginning April 1, 1995 through the earlier of the repayment or
maturity of the loan on October 1, 2002. There were no distributable proceeds
from the refinancing.
(3) Rio Cancion Apartments
The mortgage note secured by the Rio Cancion apartments located in
Tucson, Arizona and related deferred interest was satisfied on March 31, 1993
upon sale of the property (see note 7(e)).
The first mortgage loan was modified, effective November 1, 1987, to
lower the interest payable for a period of two years. The terms of the first
mortgage loan were modified to lower the interest payable from 12.25% per
annum to 10.25% per annum with the difference being added to the outstanding
principal balance and due upon the earlier of available cash flow (as defined)
or maturity of the loan.
The Partnership reached an agreement to remodify the first mortgage loan,
effective upon the expiration of the first modification agreement. Under the
terms of the new agreement, the Partnership was obligated to pay interest only
at a rate of 10.25% per annum from December 1989 through November 1991 on the
balance of the outstanding principal and deferred interest as of October 31,
1989. On June 9, 1992, the Partnership reached an agreement for an additional
modification to the first mortgage loan effective November 1, 1991. Through
December 31, 1992, the Partnership was required to submit debt service
payments under the previously remodified terms. On January 1, 1993, the
contract rate of 12.25% per annum and the pay rate of 10.25% per annum was
permanently lowered to 10%. The additional modification also extended the
maturity date to January 1, 1997. In return, the lender was entitled to, as
additional interest, a minority residual participation of 25% of net sales
proceeds (as defined) after the Partnership had recovered its investment (as
defined).
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(4) 1001 Fourth Avenue Plaza
The Partnership transferred title to the property to the lender on
November 1, 1993, as discussed below.
The long-term mortgage note secured by the 1001 Fourth Avenue Plaza
office building located in Seattle, Washington was modified effective June 16,
1987 to lower both the contract and payment interest rates. The contract
interest rate had been reduced to 9% per annum for the period from June 16,
1987 through December 15, 1992, to 10% per annum for the period from December
16, 1992 through May 15, 1994 and to 12% per annum for the period from May 16,
1994 through May 15, 1995. In addition, the interest payment rate had been
reduced to 7% per annum from June 16, 1987 through May 15, 1989, at 8% per
annum from May 16, 1989 through December 15, 1992 and at 9% per annum from
December 16, 1992 through May 15, 1995. The difference between the contract
rate and the interest paid was deferred and bore interest at 9% per annum. In
addition, any Net Cash Flow (as defined) from the property was escrowed for
future capital improvements. On May 16, 1995, the note was to revert to its
original terms. In addition, upon the subsequent sale of the property, the
lender would have been entitled to a minority residual participation beginning
at 30% and decreasing to 15% of Net Proceeds (as defined) from such sale or
refinancing.
The Partnership continued to maintain a $2,000,000 letter of credit as
additional security for the lender for the modification of interest rates,
repayment schedule and other terms of the original loan. The letter of credit
was secured by the Partnership's investments in U.S. government obligations in
an equal amount. The letter of credit was to be renewed annually until the
earlier of June 15, 1995 or the date on which Operating Income (as defined)
from the property equaled at least 1.2 times the original debt service for a
twelve month period. In October 1992, the Partnership notified the lender of
its intent not to renew the letter of credit based on the property generating
sufficient Operating Income (as defined) to meet the calculation requirement
described above. As a result, the lender subsequently notified the
Partnership that the Partnership was in default for non-submittal of Net Cash
Flow (as defined). Although the Partnership had escrowed certain amounts for
1991 and 1992, the Partnership did not believe it was in default with respect
to such escrow obligations. As a result of the alleged defaults, the lender
subsequently attempted to draw on the $2,000,000 letter of credit prior to the
letter of credit expiring in November 1992. The Partnership obtained a
temporary restraining order from the Supreme Court of the State of New York
disallowing the lender from drawing on the letter of credit in consideration
for the Partnership renewing the letter of credit for a period of ninety days
to allow the parties to attempt to resolve their differences. In February
1993, the Partnership extended the letter of credit for an additional sixty
days in a further attempt to resolve the disputes with the lender.
Subsequently, in March 1993, the temporary restraining order expired. The
Supreme Court of the State of New York had agreed to extend the temporary
restraining order providing the Partnership post a $2,000,000 bond by April
1, 1993. The Partnership posted a $2,000,000 bond on April 1, 1993. The
lender appealed this entire order. On April 29, 1993, the Partnership was
notified by the Supreme Court of the State of New York that a decision was
rendered in favor of the Partnership regarding the disputes surrounding the
letter of credit. In late June 1993, an order was entered by the court
reflecting said decision. The lender notified the Partnership that they
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
intended to appeal the order. As a result, the lender claimed that the
release of the bond and the return of the letter of credit had been stayed
pending the appeal. As previously reported, the Partnership was attempting to
obtain an additional loan modification from the mortgage lender. Such
negotiations proved to be unsuccessful and in November 1993, the Partnership
transferred title to the property in full satisfaction of the Partnership's
mortgage obligation. As part of the agreement to transfer title, the lender
agreed to settle the litigation and agreed to the return of the Partnership's
bond and letter of credit. The transfer of the Partnership's ownership
interest resulted in a net gain of $6,771,760 for financial reporting purposes
and a gain of $27,567,458 for Federal income tax purposes with no
corresponding distributable proceeds in 1993.
(5) Eastridge Apartments
In August 1990, the Partnership reached an agreement to remodify the
mortgage note effective July 1, 1989 to lower both the contract rate (as
defined) and interest payment rates for a thirty-six month period. The
contract interest rate is based on a floating index tied to the weighted
average cost of funds to members of the Federal Home Loan Bank of San
Francisco, as defined, which is adjusted on the first of each month. Interest
only was payable at 7.54% per annum from August 1, 1989 through July 1, 1990,
at 7.78% per annum from August 1, 1990 through July 1, 1991, and at 8.29% per
annum from August 1, 1991 through July 1, 1992. The difference between the
contract rate and the interest paid was deferred and bore interest when added
to the outstanding principal balance of the note on July 1, 1992. Thereafter,
monthly installments, payable at 10.34% per annum, of principal and interest
were due (amortized on a 30 year term) until maturity of the loan in March
1995. The Partnership was negotiating with the first mortgage lender
regarding an additional modification or refinancing of the first mortgage
loan. As of August 1992, the Partnership had been remitting debt service
payments under the previously remodified terms. However, the Partnership was
notified that the loan had been sold to a third party. The Partnership
continued its negotiations with the new lender and reached an agreement for
another modification on the existing loan. The remodification extended the
maturity date to May 1, 1998 and adjusted the contract rate to 8% per annum.
The remodification became effective May 1, 1993 and the Partnership is
required to submit equal payments of principal and interest (amortized over
approximately 22 years) until maturity when all outstanding principal and
interest is due. The remodification establishes release prices for the
mortgage obligation (as defined), upon execution until May 1, 1995.
(6) University Park Office Building
Effective July 1989, the Partnership remodified the note such that the
interest payment rate was reduced to 10% per annum for a period of two years,
at which time the loan was to be due and payable. The difference between the
contract rate and the interest paid is deferred and is accruing at 12.5% per
annum. The Partnership exercised its option to extend the maturity date from
July 1991 to July 1993, during which time interest only payments were due at a
rate of 10.66% per annum.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
In April 1993, the Partnership began submitting cash flow debt service
payments to the lender due to the move-out of the building's primary tenant.
The Partnership's discussions with the first mortgage lender to further modify
the note were unsuccessful. The Partnership transferred to the lender title
to the property in January 1994. This resulted in the Partnership no longer
having an ownership interest in the property, and will result in net gain for
financial reporting and Federal income tax purposes to the Partnership with no
corresponding distributable proceeds in 1994. Payments of interest in arrears
were approximately $884,000 at the date of transfer (see note 11(b)).
(7) Gables Corporate Plaza
The Gables venture reached an agreement to modify the long-term first
mortgage note secured by Gables Corporate Plaza located in Coral Gables,
Florida. Effective April 1, 1989, the contract rate was permanently lowered
from 12.8% to 10.75% per annum from January 1, 1989 through December 31, 1993;
interest only payments were due at a rate of 7% per annum. The difference
between the interest paid and the contract rate was deferred and was accrued
at the contract rate. Deferred interest is due monthly from cash flow or upon
maturity of the note. From April 1, 1994 through maturity in 1996, interest
only payments was due at the original contract rate.
In addition, the Partnership agreed with the joint venture partner to
defer interest payments on its second and third mortgage notes for the same
five year period. The interest rate was permanently lowered for the five
years from 12.9% per annum to 11.99% per annum. The Partnership also agreed
with the joint venture partner to reduce the consolidated second and third
mortgage notes by $230,000 and treat this amount as a capital contribution by
the joint venture partner. The Partnership agreed to pay operating deficits
at the property of up to $1,200,000 from January 1, 1989 through December 31,
1993.
Gables venture had recently negotiated for an additional modification or
refinancing of the first mortgage loan. Since January 1991, interest only
payments were remitted at a 5% pay rate instead of the required 7% rate to the
extent of available property cash flow. Negotiations with the lender were
unsuccessful and the Partnership on behalf of the venture decided to not
commit any significant additional amounts to the property. On May 3, 1993,
the lender appointed a receiver and took possession and control of the
property. In addition, the venture entered into an agreement with the lender
whereby the venture would transfer title to the lender in January, 1994.
During this period, the venture attempted to sell the property. The venture
was unable to sell the property during the allotted time, and therefore,
transferred title of the property to the lender in accordance with its
previous agreement. This resulted in the venture no longer having an
ownership interest and will result in net gain for financial reporting and
Federal income tax purposes without any net distributable proceeds in 1994.
Accordingly, the balances of the mortgage note and related accrued interest
with a combined outstanding balance of approximately $24,970,000 and
$20,390,000 at December 31, 1993 and at December 31, 1992, respectively, have
been classified as current liabilities in the accompanying consolidated
financial statements at December 31, 1993. Payments of principal and interest
in arrears were approximately $944,000 at the date of transfer (see note
11(a)).
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(8) Greenwood Creek II Apartments
The Partnership was negotiating for modification of the long-term
mortgage note secured by Greenwood Creek II Apartments located in Benbrook
(Fort Worth), Texas. As a result of the negotiations, the Partnership made
monthly debt service payments of interest only at a rate of 8% per annum
between January 1989 and January 1990. In February 1990, the Partnership
ceased making debt service until March 1991. The Partnership had reached an
agreement in principle with the lender to submit the monthly cash flow as debt
service payments beginning April 1991 while continuing to negotiate for the
modification. However, the Partnership was notified that the loan had been
sold to a third party. The Partnership was not successful in securing a
modification. On April 6, 1993, the Partnership transferred title of the
property to the lender for a transfer price of $100,000 (before selling costs
and prorations) in excess of the existing mortgage balance. The Partnership
recognized a gain for financial reporting and recognized a gain for Federal
income tax purposes in 1993 (see note 7(f)). As of the date of sale, payments
of principal and interest in arrears were approximately $598,000.
(9) Commercial Union
The Partnership had been unsuccessful in its attempts to obtain another
primary tenant for the Commercial Union Office Building and due to the extreme
softness of the Metropolitan Boston real estate market, the Partnership
decided not to commit any significant additional capital to this property.
Therefore, the Partnership negotiated an agreement with the second mortgage
lender to realize upon its security interest in full satisfaction of the
Partnership's first and second mortgage obligations. On August 15, 1991, the
second mortgage lender concluded proceedings to realize upon its security
interest. This resulted in the Partnership no longer having an ownership
interest in the property and resulted in taxable income to the Partnership of
approximately $3,200,000 with no corresponding distributable proceeds in 1991.
The Partnership recognized a gain of approximately $1,476,000 for financial
reporting purposes in 1991. As a result of the second mortgage lender
realizing upon its security, the litigation involving, among others, the
Partnership and the building's primary tenant was settled by all parties
dismissing their claims.
(10) Copley Place Associates
The joint venture modified the existing first mortgage note effective
March 1, 1992. The modification lowers the pay rate from 12% to 9% per annum
through August 1993, and at that time, further reduces it to 7-1/2% per annum
through August 1998. The contract rate has been lowered to 10% per annum
through August 1993 and, at that time is further reduced to 8-1/2% per annum
through August 1998. After each monthly payment, the difference between the
contract interest rate on the outstanding principal balance on the loan,
including deferred interest, and interest paid at the applicable pay rate (as
defined), will be added to the principal balance and will accrue interest at
the contract interest rate. All outstanding principal balance, including the
unpaid deferred interest, is due and payable on August 31, 1998. In return,
the lender will be entitled to receive, as additional interest, a minority
residual participation of 10% of net proceeds (if any, as defined) from a sale
or refinancing after the Partnership and its joint venture partner have
recovered their investments (as defined). Any cash flow from the property,
after all capital and leasing expenditures, will be escrowed for the purpose
of paying for future capital and leasing requirements.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
As a result of the debt modification, the property produced cash flow in
1993. This cash flow has been escrowed for future potential leasing
requirements as set forth in the loan modification. The property is expected
to experience a significant loss of rental income due to the expiration of a
major tenant's lease. Based on this fact, the joint venture has initiated
discussions with the first mortgage lender regarding an additional
modification of the loan. There can be no assurances such remodification will
be consummated. If the joint venture is unable to secure such remodification,
it may decide not to commit any significant additional amounts to the
property. This would result in the joint venture no longer having an
ownership interest in the property and would result in a net gain for
financial reporting and Federal income tax purposes with no corresponding
distributable proceeds. The joint venture is aggressively marketing the
upcoming vacant space.
(11) Carrollwood Apartments
In September 1993, the venture refinanced with a third party lender the
existing underlying mortgage loan with a balance of approximately $7,200,000
payable at 12-3/4% per annum due in 1995. The new loan is in the amount of
$7,455,000. The loan is payable in monthly installments of principal and
interest and bears interest at 7.45% per annum for a five year period until
maturity. The venture paid a prepayment penalty relating to the original
mortgage of approximately $143,200 in connection with the refinancing. The
Partnership recognized its share of approximately $141,700 as an extraordinary
loss for financial reporting purposes. In addition, the venture was obligated
to establish an escrow account for future capital improvements. The escrow
account was initially funded by the Partnership's capital contribution to the
venture and is subsequently funded by the operations of the venture. As of
the date of this report, no amounts have been withdrawn.
(12) Marshall's Aurora Plaza
The long-term note secured by the Marshall's Aurora Plaza shopping center
located in Aurora, Colorado reached its scheduled maturity in June 1993. The
mortgage note has an outstanding balance of approximately $6,470,000 at
December 31, 1993. The Partnership had been remitting debt service under the
original terms of the loans. In January 1994, effective November 1993, the
Partnership reached an agreement with the current lender to modify and extend
the existing long-term note. The modification lowered the pay and accrual
rates from 12.75% per annum to 8.375% per annum and extended the loan for a
three year period to October 1996. Concurrent with the closing of the
modification, the Partnership paid down the existing mortgage balance in the
amount of $250,000.
(13) Long Beach Plaza
The Partnership has initiated discussions with the first mortgage lender
regarding a modification of the mortgage loan secured by the Long Beach Plaza
located in Long Beach, California. There can be no assurance that any
modification agreement will be executed. If the Partnership is unable to
secure such modification, it may decide not to commit any significant
additional amounts to the property. This would result in the Partnership no
longer having an ownership interest in the property and would result in a net
gain for financial reporting and Federal income tax purposes with no
corresponding distributable proceeds. The Partnership has not remitted all of
the scheduled debt service payments since June 1993. Accordingly, the
combined balances of the mortgage note and related accrued interest of
approximately $35,449,000 at December 31, 1993 have been classified as current
liabilities in the accompanying consolidated financial statements. As of the
date of this report, payments of principal and interest in arrears are
approximately $2,236,000.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(5) PARTNERSHIP AGREEMENT
Pursuant to the terms of the Partnership Agreement, net profits and
losses of the Partnership from operations are allocated 96% to the Limited
Partners and 4% to the General Partners. Profits from the sale of investment
properties are to be allocated to the General Partners to the greatest of (i)
1% of such profits, (ii) the amount of cash distributions to the General
Partners, or (iii) an amount which will reduce the General Partners' capital
account deficits (if any) to a level consistent with the gain anticipated to
be realized from the sale of properties. Losses from the sale of properties
are to be allocated 1% to the General Partners. The remaining profits and
losses will be allocated to the Limited Partners.
The General Partners are not required to make any additional capital
contributions except under certain limited circumstances upon termination of
the Partnership. Distributions of "Net cash receipts" of the Partnership are
allocated 90% to the Limited Partners and 10% to the General Partners (of
which 6.25% constitutes a management fee to the Corporate General Partner for
services in managing the Partnership).
The Partnership Agreement provides that, subject to certain conditions,
the General Partners shall receive as a distribution from the sale of a real
property by the Partnership up to 3% of the selling price, and that the
remaining proceeds (net after expenses and retained working capital) be
distributed 85% to the Limited Partners and 15% to the General Partners.
However, prior to such distributions being made, the Limited Partners are
entitled to receive 99% of net sale and financing proceeds and the General
Partners shall receive 1% until the Limited Partners (i) have received cash
distributions of sale or refinancing proceeds in an amount equal to the
Limited Partners' aggregate initial capital investment in the Partnership and
(ii) have received cumulative cash distributions from the Partnership's
operations which, when combined with sale or refinancing proceeds previously
distributed, equal a 6% annual return on the Limited Partners' average capital
investment for each year (their initial capital investment as reduced by sale
or refinancing proceeds previously distributed). If upon the completion of
the liquidation of the Partnership and the distribution of all Partnership
funds, the Limited Partners have not received the amounts in (i) and (ii)
above, the General Partners will be required to return all or a portion of the
1% distribution of sale or financing proceeds described above in an amount
equal to such deficiency in payments to the Limited Partners pursuant to (i)
and (ii) above.
(6) MANAGEMENT AGREEMENTS - OTHER THAN VENTURES
The Partnership has entered into agreements for the operation and
management of the investment properties. Such agreements are summarized as
follows:
The Partnership entered into an agreement with an affiliate of the seller
for the operation and management of Marshall's Aurora Plaza, Aurora, Colorado
for a management fee calculated at a percentage of certain types of cash
income from the property.
The Long Beach Plaza in Long Beach, California, Plaza Tower office
building in Knoxville, Tennessee, the two apartment complexes known as Quail
Place Apartments and Heritage Park II Apartments in Oklahoma City, Oklahoma
(prior to their sales in March 1992), Greenwood Creek II Apartments in
Benbrook, Texas, (prior to its sale in April 1993) Rio Cancion Apartments
(prior to its sale in March 1993) and Eastridge Apartments in Tucson, Arizona,
University Park office building in Sacramento, California, (prior to
transferring the property to the lender in January 1994) 1001 Fourth Avenue
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Plaza office building in Seattle, Washington, (prior to transferring the
property to the lender in November 1993), Sherry Lane Place office building in
Dallas, Texas, Commercial Union Building in Quincy, Massachusetts (prior to
the lender realizing upon its security in August 1991), Gables Corporate Plaza
in Coral Gables, Florida (prior to transferring the property to the lender in
January 1994), and the Bridgeport Apartments in Irving, Texas (prior to its
sale in April 1992) are or were managed by an affiliate of the Corporate
General Partner for a fee equal to a percentage of defined gross income from
the property.
(7) SALE OF INVESTMENT PROPERTIES
(a) Allied Automotive Center
On October 10, 1990, the Partnership sold the land, building, and related
improvements of the Allied Automotive Center located in Southfield, Michigan
for $19,613,121 (in cash before prorations and cost of sale).
The sale included the adjacent undeveloped land, building and
improvements owned by two other partnerships affiliated with the Corporate
General Partner. The Partnership has retained title to a defined 1.9 acre
piece of land (the "Parcel"). During the buyer's due diligence investigation,
the buyer found traces of contamination located on a portion of the Parcel as
well as on a portion of the land owned by the two affiliated selling entities.
It was subsequently determined that such contamination was most likely the
result of certain activities of the previous owner. As a result, the purchase
price was reduced by approximately $682,000 for the Partnership's excluded
land. The land may be purchased by the buyer after the environmental clean-up
is completed. As a condition of the sale, the Partnership has agreed to
conduct investigations to determine all contaminants and to conduct clean-up
of any such contaminants. The Partnership was also required to indemnify the
buyer from specified potential clean-up related liabilities. If the clean-up
is successful, the buyer will purchase the excluded land for $682,000, the
purchase price adjustment. In addition, the Partnership has reached an
agreement with the previous owner of the Allied Automotive Center, who has
agreed to cause such investigation and clean-up to be done at the previous
owner's expense. The previous owner has also indemnified the Partnership from
specified potential clean-up related liabilities. As a result of such
agreements, the Partnership has offset any liability for such costs against
amounts to be paid by the previous owners. The Partnership, in cooperation
with the previous owner, is currently working on a plan to clean up the land.
The gain associated with this Parcel, approximately $543,000, will be
recognized when the closing occurs. There can be no assurance that the sale
of this Parcel will be consummated.
(b) Heritage Park-II Apartments
On March 26, 1992 the Partnership, through Partridge Place Limited
Partnership, sold the land, related improvements, and personal property of the
Heritage Park-II Apartments, located in Oklahoma City, Oklahoma for $4,326,000
(before selling costs and prorations) which was paid in cash at closing. In
addition, the buyer paid to the Partnership incentive management fees of
$199,960. The seller paid an outside broker's commission of $126,000 from the
sales proceeds. In conjunction with the sale, the mortgage note and related
accrued interest of approximately $8,173,000 was satisfied in full through a
discounted payment of approximately $4,200,000. The Partnership recognized a
net gain from this transaction in 1992 of approximately $2,688,000 (reflected
as a loss on sale of approximately $1,285,000 and an extraordinary gain on
forgiveness of indebtedness of approximately $3,973,000) for financial
reporting purposes and recognized a gain of approximately $4,624,000 for
Federal income tax purposes.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(c) Quail Place Apartments
On March 26, 1992 the Partnership, through Quail Springs Limited
Partnership, sold the land, related improvements, and personal property of the
Quail Place Apartments, located in Oklahoma City, Oklahoma for $2,163,000
(before selling costs and prorations) which was paid in cash at closing. In
addition, the buyer paid to the Partnership incentive management fees of
$175,180. The seller paid an outside broker's commission of $63,000 from the
sales proceeds. In conjunction with the sale, the mortgage note and related
accrued interest of approximately $5,417,000 was satisfied in full through a
discounted payment of approximately $2,100,000. The Partnership recognized a
net gain from this transaction in 1992 of approximately $1,659,000 (reflected
as a loss on sale of approximately $1,658,000 and an extraordinary gain on
forgiveness of indebtedness of approximately $3,317,000) for financial
reporting purposes and recognized a gain of approximately $2,879,000 for
Federal income tax purposes.
(d) Bridgeport Apartments
On April 2, 1992, the Partnership sold the land, related improvements and
personal property of the Bridgeport Apartments, located in Irving, Texas to
the existing lender for $430,000 in excess of the existing mortgage note
(before closing costs and prorations) which was paid in cash at closing. As a
result of the sale, the Partnership will not have any further liability or
obligation under the mortgage note which had an unpaid principal balance of
approximately $9,342,000 and an unpaid accrued interest balance of
approximately $2,462,000 at the date of the sale. The Partnership recognized
a gain in 1992 of approximately $5,076,000 for financial reporting purposes
and recognized a gain of approximately $6,142,000 for Federal income tax
purposes.
(e) Rio Cancion Apartments
On March 31, 1993, the Partnership sold the land, related improvements,
and personal property of the Rio Cancion Apartments, located in Tucson,
Arizona for $13,700,000 (before selling costs and prorations) which was paid
in cash at closing. In conjunction with the sale, the mortgage note and
related accrued interest with a balance of approximately $12,157,000 was
satisfied in full. The lender received, as its 25% minority residual
participation (as defined), approximately $317,000 (see note 4(b)(3)). The
Partnership received net sales proceeds of approximately $809,000. The
Partnership recognized a gain from this transaction in 1993 of $2,524,958 for
financial reporting purposes and recognized a gain of $7,865,633 for Federal
income tax purposes in 1993.
(f) Greenwood Creek II Apartments
On April 6, 1993, the Partnership transferred title to the existing
lender to the land, related improvements, and personal property of the
Greenwood Creek II Apartments, located in Benbrook, (Fort Worth) Texas for a
transfer price of $100,000 (before selling costs and prorations) in excess of
the existing mortgage balance of approximately $3,747,000 (see note 4(b)(8)).
The Partnership recognized a gain for financial reporting purposes in 1993 of
$1,787,073 and recognized a gain of $1,823,988 for Federal income tax purposes
in 1993.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(8) LEASES
(a) As Property Lessor
At December 31, 1993, the Partnership and its consolidated ventures'
principal assets are five office buildings, two shopping centers, a multi-use
complex and three apartment complexes. The Partnership has determined that
all leases relating to these properties are properly classified as operating
leases; therefore, rental income is reported when earned and the cost of each
of the properties, excluding cost of land, is depreciated over the estimated
useful lives. Leases with commercial tenants range in term from one to 30
years and provide for fixed minimum rent and partial reimbursement of
operating costs. In addition, leases with shopping center tenants generally
provide for additional rent based upon percentages of tenants' sales volumes.
With respect to the Partnership's shopping center investments, a substantial
portion of the ability of retail tenants to honor their leases is dependent
upon the retail economic sector.
Apartment complex leases in effect at December 31, 1993 are generally for
a term of one year or less and provide for annual rents of approximately
$5,719,000.
Cost and accumulated depreciation of the leased assets are summarized as
follows at December 31, 1993:
Shopping centers:
Cost. . . . . . . . . . . . . $ 51,183,724
Accumulated depreciation. . (16,384,628)
------------
34,799,096
------------
Office buildings:
Cost. . . . . . . . . . . . 106,451,082
Accumulated depreciation. . (31,940,110)
------------
74,510,972
------------
Multi-use complex:
Cost. . . . . . . . . . . . 285,870,905
Accumulated depreciation. . (91,998,239)
------------
193,872,666
------------
Apartment complexes:
Cost. . . . . . . . . . . . 30,697,479
Accumulated depreciation. . (9,591,974)
------------
21,105,505
------------
Total . . . . . . . $324,288,239
============
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Minimum lease payments receivable including amounts representing
executory costs (e.g., taxes, maintenance, insurance), and any related profit
in excess of specific reimbursements, to be received in the future under the
above operating commercial lease agreements, are as follows:
1994. . . . . . . . . . . $ 43,284,626
1995. . . . . . . . . . . 35,684,088
1996. . . . . . . . . . . 33,052,124
1997. . . . . . . . . . . 30,827,874
1998. . . . . . . . . . . 28,067,260
Thereafter. . . . . . . . 88,555,330
============
Additional rent based upon percentages of tenants' sales volumes included
in rental income aggregated approximately $1,804,123, $1,464,841 and
$1,010,529 for the years ended December 31, 1993, 1992 and 1991, respectively.
(b) As Property Lessee
The following lease agreements have been determined to be operating
leases:
The Partnership owns the leasehold rights to the parking structure
adjacent to the Long Beach, California shopping center. The lease has an
initial term of 50 years which commenced in 1981 with one 49-year renewal
option exercisable by a local municipal authority. The lease provides for
annual rental of $745,000, which is subject to decrease based on formulas
which relate to the amount of real estate taxes assessed against the shopping
center and the parking structure. The rental expense for 1993, 1992 and 1991
under the above operating lease was $528,276, $538,962 and $532,653,
respectively, and consisted exclusively of minimum rent.
The Copley Place venture has leased the air rights over the Massachusetts
Turnpike located beneath the Boston, Massachusetts multi-use complex. The
lease has a term of 99 years which commenced in 1978. The total rent due
under the terms of the air rights lease was prepaid by the seller and is being
amortized over the term of the air rights lease.
(9) TRANSACTIONS WITH AFFILIATES
In December 1984, Urban Holdings, Inc., an affiliate of the Corporate
General Partner of the Partnership, purchased all the outstanding stock of the
developer (joint venture partner) and property manager of the Old Orchard
shopping center and the Copley Place multi-use complex. Consequently, the
developer is an affiliate of the Corporate General Partner and continues to
possess all of the rights and obligations granted the developer under the
terms of the respective acquisition and related agreements.
Fees, commissions and other expenses required to be paid by the
Partnership and its consolidated ventures to the General Partners and their
affiliates as of December 31, 1993 and for the years ended December 31, 1993,
1992 and 1991 are as follows:
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
UNPAID AT
DECEMBER 31,
1993 1992 1991 1993
---------- --------- --------- --------------
Property management and leasing fees . . . . . . . . . . . . . . $3,001,759 5,042,311 5,904,944 13,670,682
Insurance commissions. . . . . . . . . . . . . . . . . . . . . . 214,278 223,748 320,110 --
Reimbursement (at cost) for accounting services. . . . . . . . . 148,712 180,688 127,675 148,712
Reimbursement (at cost) for legal services . . . . . . . . . . . 30,381 36,411 66,522 30,381
Reimbursement (at cost) for out-of-pocket expenses . . . . . . . 45,143 210,065 210,664 --
Management fees to corporate general partner . . . . . . . . . . -- 12,715 108,075 --
Reimbursement (at cost) for out-of-pocket salary and salary related
expenses relating to on-site and other costs for the Partnership
and its investment properties. . . . . . . . . . . . . . . . . -- -- 2,823 --
---------- ---------- ---------- ----------
$3,440,273 5,705,938 6,740,813 13,849,775
========== ========== ========== ==========
/TABLE
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Payment of certain property management and leasing fees payable under the
terms of the management agreements ($13,671,000, approximately $37 per $1,000
interest) at December 31, 1993 has been deferred. All amounts currently
payable do not bear interest and are expected to be paid in future periods.
(10) INVESTMENT IN UNCONSOLIDATED VENTURES
Summary combined financial information for JMB/NYC and its unconsolidated
ventures (note 3(c)) as of and for the years ended December 31, 1993 and 1992
are as follows:
1993 1992
------------- -------------
Current assets . . . . . . . . . . . $ 17,668,206 20,133,526
Current liabilities (includes $923,041,198
and $931,654,790 of current portion
of long-term debt at December 31, 1993
and December 31, 1992, respectively) (940,836,999) (947,314,271)
------------- -------------
Working capital (deficit). . . . (923,168,793) (927,180,745)
------------- -------------
Investment property, net . . . . . . 746,632,895 977,278,400
Accrued rent receivable. . . . . . . 50,369,613 58,019,584
Deferred expenses. . . . . . . . . . 11,096,044 12,358,603
Other liabilities. . . . . . . . . . (114,381,260) (100,815,520)
Venture partners' deficit (equity) . 156,904,193 (70,045,641)
------------- -------------
Partnership's capital (deficit). $ (72,547,308) (50,385,319)
============= =============
Represented by:
Invested capital . . . . . . . . . $ 43,728,411 43,723,411
Cumulative net losses. . . . . . . (106,901,970) (84,734,981)
Cumulative cash distributions. . . (9,373,749) (9,373,749)
------------- -------------
$ (72,547,308) (50,385,319)
============= =============
Total income . . . . . . . . . . . . $ 168,002,257 177,682,092
============= =============
Expenses applicable to operating loss $ 411,977,853 243,630,397
============= =============
Net loss . . . . . . . . . . . . . . $(243,975,596) (65,948,305)
============= =============
Also, for the year ended December 31, 1991, total income was
$176,041,995, expenses applicable to operating loss were $244,372,557 and the
net loss was $68,330,562 for JMB/NYC and the unconsolidated ventures.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONCLUDED
(11) SUBSEQUENT EVENTS
(a) Gables Corporate Plaza
On January 5, 1994, the Partnership, through Gables Corporate Plaza
Associates, ("the Venture") transferred title to the Gables Corporate Plaza
office building as previously agreed upon in full satisfaction of the
Venture's mortgage obligation. The mortgage had an outstanding balance,
including accrued interest, of approximately $24,967,000. As a result of the
transfer, neither the Partnership nor the Venture have an ownership interest
in the property. The transfer will result in a net gain of approximately
$10,524,000 for financial reporting purposes. The Partnership expects to
recognize a gain of approximately $12,460,000 for Federal income tax purposes
in 1994 with no corresponding distributable proceeds (see Note 4(b)(7)).
(b) University Park office building
As a result of the Partnership's unsuccessful negotiations with the
mortgage lender, the Partnership transferred title to the University Park
office building on January 10, 1994 in full satisfaction of the Partnership's
mortgage obligation. The mortgage had an outstanding balance, including
accrued interest, of approximately $16,294,000. As a result of the transfer,
the Partnership no longer has an ownership interest in the property. The
transfer will result in a net gain of approximately $5,620,000 for financial
reporting purposes and expects to recognize a gain of approximately $6,885,000
for Federal income tax purposes in 1994 with no corresponding distributable
proceeds (see note 4(b)(6)).
SCHEDULE X
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
SUPPLEMENTARY INCOME STATEMENT INFORMATION
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
CHARGED TO COSTS AND EXPENSES
----------------------------------------------
1993 1992 1991
------------ ------------ ------------
Maintenance and repairs. $ 8,393,532 9,544,259 7,728,419
Depreciation . . . . . . 18,343,123 19,490,916 20,391,223
Amortization . . . . . . 2,410,540 1,671,011 284,201
Taxes:
Real estate . . . . . 11,372,379 11,077,556 11,645,018
Other . . . . . . . . 87,928 20,786 162,829
Advertising. . . . . . . 441,742 533,259 729,591
============ ============ ============
SCHEDULE XI
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1993
COSTS
CAPITALIZED
INITIAL COST TO SUBSEQUENT TO GROSS AMOUNT AT WHICH CARRIED
PARTNERSHIP (a) ACQUISITION AT CLOSE OF PERIOD (b)
-------------------------- ------------- ------------------------------------------
LAND AND BUILDINGS LAND LAND AND BUILDINGS
LEASEHOLD AND BUILDINGS AND LEASEHOLD AND
DESCRIPTION ENCUMBRANCE INTEREST IMPROVEMENTS IMPROVEMENTS INTEREST IMPROVEMENTS TOTAL(m)
- ----------- ----------- ----------- ------------ -------------- ---------- ------------ ----------
APARTMENT BUILDINGS:
Irving, Texas (j) . . .$ -- 1,746,622 7,886,542 (9,633,164) -- -- --
Tucson, Arizona (k) . . -- 1,935,049 13,129,268 (15,064,317) -- -- --
Oklahoma City, Oklahoma
(e)(i) . . . . . . . . -- 779,748 4,370,567 (5,150,315) -- -- --
Oklahoma City, Oklahoma
(e)(i) . . . . . . . . -- 745,101 6,844,687 (7,589,788) -- -- --
Tampa, Florida(e) . . . 7,400,309 1,092,010 7,408,618 221,691 1,092,010 7,630,309 8,722,319
Tucson, Arizona(e). . . 9,752,617 1,673,067 8,429,627 263,131 1,673,067 8,692,758 10,365,825
Fort Worth, Texas (l) . -- 804,874 4,037,342 (4,842,216) -- -- --
Jacksonville, Florida(e)10,840,261 1,905,940 9,664,038 39,357 1,815,262 9,794,073 11,609,335
OFFICE BUILDINGS:
Seattle, Washington(d). -- 10,198,309 111,051,956 (121,250,265) -- -- --
Knoxville, Tennessee(f) 18,160,291 -- 28,884,725 3,910,724 1,508,417 31,287,032 32,795,449
Coral Gables, Florida(e)24,967,836 2,884,661 15,864,501 1,929,703 2,884,661 17,794,204 20,678,865
Dallas, Texas(e). . . . 40,498,538 7,902,979 35,029,347 (5,072,944) 6,198,484 31,660,898 37,859,382
Sacramento, California. 16,294,125 1,508,526 11,907,858 1,561,876 1,508,526 13,469,734 14,978,260
Quincy, Massachusetts(h) -- 2,033,367 17,404,970 (19,438,337) -- -- --
Southfield, Michigan(g) -- 1,715,373 -- (1,576,247) 139,126 -- 139,126
SHOPPING CENTERS:
Long Beach, California. 34,652,141 3,801,066 42,765,277 (4,215,322) 3,376,877 38,974,144 42,351,021
Aurora, Colorado. . . . 6,468,313 2,035,721 6,674,891 122,091 2,035,721 6,796,982 8,832,703
MULTI-USE COMPLEX:
Boston, Massachusetts
(c)(e) . . . . . . . .285,934,096 4,769,913 271,584,219 9,516,773 4,769,912 281,100,993 285,870,905
------------ ----------- ----------- ----------- ----------- ----------- -----------
Total . . . . . . .$454,968,527 47,532,326 602,938,433 (176,267,569) 27,002,063 447,201,127 474,203,190
============ =========== =========== =========== =========== =========== ===========
/TABLE
SCHEDULE XI - CONTINUED
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1993
LIFE ON WHICH
DEPRECIATION
IN LATEST
STATEMENT OF 1993
ACCUMULATED DATE OF DATE OPERATION REAL ESTATE
DESCRIPTION DEPRECIATION(n) CONSTRUCTION ACQUIRED IS COMPUTED TAXES
- ----------- ---------------- ------------ ---------- --------------- -----------
APARTMENT BUILDINGS:
Irving, Texas (j) . . . . . . . . . . . . . $ -- 1983 9/30/83 5-30 years --
Tucson, Arizona (k) . . . . . . . . . . . . -- 1983 8/18/83 5-30 years 45,125
Oklahoma City, Oklahoma
(e)(i) . . . . . . . . . . . . . . . . . . -- 1983 7/1/83 5-30 years --
Oklahoma City, Oklahoma
(e)(i) . . . . . . . . . . . . . . . . . . -- 1984 7/1/83 5-30 years --
Tampa, Florida(e) . . . . . . . . . . . . . 2,871,053 1984 12/16/83 5-30 years 207,021
Tucson, Arizona(e). . . . . . . . . . . . . 3,446,759 1984 8/23/83 5-30 years 142,144
Fort Worth, Texas (l) . . . . . . . . . . . -- 1984 3/30/84 5-30 years --
Jacksonville, Florida(e). . . . . . . . . . 3,274,162 1985 10/9/84 5-30 years 213,469
OFFICE BUILDINGS:
Seattle, Washington(d). . . . . . . . . . . -- 1969 9/1/83 5-30 years 758,739
Knoxville, Tennessee(f) . . . . . . . . . . 10,206,630 1979 10/26/83 5-30 years 895,382
Coral Gables, Florida(e). . . . . . . . . . 6,234,925 1983 11/15/83 5-30 years 152,654
Dallas, Texas(e). . . . . . . . . . . . . . 11,204,248 1983 12/1/83 5-30 years 517,699
Sacramento, California. . . . . . . . . . . 4,294,307 1981 1/16/84 5-30 years 134,537
Quincy, Massachusetts(h). . . . . . . . . . -- 1981 3/12/84 5-30 years --
Southfield, Michigan(g) . . . . . . . . . . -- 1974 3/30/84 5-30 years (778)
SHOPPING CENTERS:
Long Beach, California. . . . . . . . . . . 13,936,858 1982 6/22/83 5-30 years 945,986
Aurora, Colorado. . . . . . . . . . . . . . 2,447,770 1982 4/1/83 5-30 years 108,019
MULTI-USE COMPLEX:
Boston, Massachusetts
(c)(e) . . . . . . . . . . . . . . . . . . 91,998,239 1983 9/1/83 5-30 years 7,252,382
------------ -----------
Total . . . . . . . . . . . . . . . . . $149,914,951 11,372,379
============ ===========
SCHEDULE XI - CONTINUED
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1993
- ---------------
Notes:
(a) The initial cost to the Partnership represents the original purchase price of the properties, including amounts
incurred subsequent to acquisition which were contemplated at the time the property was acquired.
(b) The aggregate cost of real estate owned at December 31, 1993 for Federal income tax purposes was approximately
$98,358,000.
(c) Property operated under air rights; see Note 8(b).
(d) Purchase price subject to adjustment. Property recorded a provision for value impairment in 1992. The Partnership
transferred title of the property to the lender in November 1993.
(e) Properties owned and operated by joint ventures; see Note 3.
(f) The Partnership purchased the land underlying Plaza Tower office building in December 1985.
(g) Property sold except for a 1.9 acre parcel; see Note 7(a).
(h) Property recorded a provision for value impairment in 1990; Lender realized upon its security and took title
to property August 1991, see Note 4(b)(9).
(i) Property sold March 1992; see Note 7.
(j) Property sold April 1992; see Note 7.
(k) Property sold March 1993.
(l) Property sold April 1993.
/TABLE
SCHEDULE XI - CONTINUED
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1993
1993 1992 1991
------------- ------------- -------------
(m) Reconciliation of real estate carrying costs:
Balance at beginning of period . . . . . . . $627,815,579 650,806,083 664,568,420
Additions during period. . . . . . . . . . . 3,188,425 6,144,928 3,741,972
Reductions during period . . . . . . . . . . (156,800,814) (29,135,432) (17,504,309)
------------ ------------ ------------
Balance at end of period . . . . . . . . . . $474,203,190 627,815,579 650,806,083
============ ============ ============
(n) Reconciliation of accumulated depreciation:
Balance at beginning of period . . . . . . . $178,425,639 165,375,392 149,274,120
Depreciation expense . . . . . . . . . . . . 18,343,123 19,490,916 20,391,223
Reductions during period . . . . . . . . . . (46,853,811) (6,440,669) (4,289,951)
------------ ------------ ------------
Balance at end of period . . . . . . . . . . $149,914,951 178,425,639 165,375,392
============ ============ ============
/TABLE
INDEPENDENT AUDITORS' REPORT
The Partners
CARLYLE REAL ESTATE LIMITED PARTNERSHIP-XIII:
We have audited the combined financial statements of JMB/NYC Office
Building Associates, L.P. (JMB/NYC) and unconsolidated ventures as listed in
the accompanying index. In connection with our audits of the combined
financial statements, we also have audited the financial statement schedules
as listed in the accompanying index. These combined financial statements and
financial statement schedules are the responsibility of the General Partners
of Carlyle Real Estate Limited Partnership-XIII (the Partnership). Our
responsibility is to report on these combined financial statements and
financial statement schedules based on the results of our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by the General Partners of the Partnership, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our report.
In our opinion, the 1992 and 1991 combined financial statements referred
to above present fairly, in all material respects, the financial position of
JMB/NYC and unconsolidated ventures as of December 31, 1992, and the results
of their operations and their cash flows for the years ended December 31, 1992
and 1991, in conformity with generally accepted accounting principles. Also
in our opinion, the related 1992 and 1991 financial statement schedules, when
considered in relation to the basic combined financial statements taken as a
whole, present fairly, in all material respects, the information set forth
therein.
As discussed in Note 3 of the Partnership's notes to the financial
statements incorporated by reference in Note 2 of the combined financial
statements, JMB/NYC is in dispute with the unaffiliated partners in the real
estate ventures over the calculation of the effective interest rate with
reference to the first mortgage loan, which covers all the real estate owned
through JMB/NYC's joint ventures. JMB/NYC believes that, for purposes of
calculating cash flow deficits and for financial reporting purposes, the joint
venture agreements for JMB/NYC's real estate joint ventures require interest
to be computed at an effective rate of 1-3/4% over the short-term U.S.
Treasury obligation rate (subject to a minimum rate of 7% per annum) plus any
excess monthly Net Cash Flow of the real estate owned through JMB/NYC's joint
ventures, such sum not to exceed 12-3/4% per annum. The unaffiliated partners
in the real estate joint ventures contend that a 12-3/4% per annum interest
rate applies. The disputed interest aggregated $20,521,000 at December 31,
1993. The ultimate outcome of the dispute cannot presently be determined.
Accordingly, the disputed interest has not been included in mortgage and other
interest for 1993 in the accompanying combined financial statements.
The accompanying combined financial statements and financial statement
schedules have been prepared assuming that JMB/NYC and the unconsolidated
ventures will continue as going concerns. As discussed in Note 3 of the
Partnership's notes to financial statements, incorporated by reference in Note
2 of the combined financial statements, certain of the unconsolidated ventures
(Continued)
have suffered recurring losses from operations and expect to incur cash flow
deficits in the future. Such deficits may be impacted by the resolution of
the dispute referred to above. JMB/NYC's interest in each of the ventures is
pledged to secure its obligations under the joint venture agreements,
including its obligations to fund possible cash flow deficits incurred by the
real estate ventures commencing July 1, 1993. There can be no assurance that
either the unaffiliated venture partners or JMB/NYC will be able to fund
possible cash flow deficits in the future. Also, as described in Note 3,
during 1992, the holder of the first mortgage loan alleged certain technical
defaults under the loan agreements. Such defaults are currently being
disputed by the unaffiliated venture partners. These circumstances raise
substantial doubt about JMB/NYC and the unconsolidated ventures' ability to
continue as going concerns. The General Partners' plans in regard to these
matters are also described in Note 3 of the Partnership's Notes to the
Financial Statements. The combined financial statements and financial
statement schedules do not include any adjustments that might result from the
outcome of this uncertainty.
Because of the effects on the combined financial statements and financial
statement schedules of such adjustments, if any, as might have been required
had the outcome of the uncertainties described in the preceding two paragraphs
been known, we are unable to, and do not express, an opinion on the
accompanying 1993 combined financial statements and financial statement
schedules.
KPMG PEAT MARWICK
Chicago, Illinois
March 28, 1994
JMB/NYC OFFICE BUILDING ASSOCIATES, L.P.
AND UNCONSOLIDATED VENTURES
COMBINED BALANCE SHEETS
DECEMBER 31, 1993 AND 1992
ASSETS
------
1993 1992
-------------- --------------
Current assets:
Cash (including amounts held by property managers) . . . . . . . . . . . . . . . . . . . . . $ 839,552 4,868,371
Restricted funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,638,258 --
Rents and other receivables (net of allowance for doubtful accounts of $5,777,252 for 1993
and $1,900,622 for 1992. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,985,810 2,279,185
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 457,098 254,034
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,508,043 1,483,549
Tenant notes receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 239,445 478,327
Due from affiliates (net of allowance for uncollectibility of $11,946,284
at December 31, 1993) (note 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 10,770,060
-------------- --------------
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,668,206 20,133,526
-------------- --------------
Investment properties, at cost (notes 1, 2 and 3) -- Schedule XI:
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168,798,314 183,979,962
Buildings and improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 954,150,721 1,132,409,431
-------------- --------------
1,122,949,035 1,316,389,393
Less accumulated depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 376,316,140 339,110,993
-------------- --------------
Total investment properties, net of accumulated depreciation . . . . . . . . . . . . 746,632,895 977,278,400
-------------- --------------
Accrued rents receivable (note 1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,369,613 58,019,584
Deferred expenses (note 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,096,044 12,358,603
-------------- --------------
$ 825,766,758 1,067,790,113
============== ==============
JMB/NYC OFFICE BUILDING ASSOCIATES, L.P.
AND UNCONSOLIDATED VENTURES
COMBINED BALANCE SHEETS - CONTINUED
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
-----------------------------------------------------
1993 1992
-------------- --------------
Current liabilities:
Current portion of long-term debt (note 3) . . . . . . . . . . . . . . . . . . . . . . . . . $ 923,041,198 931,654,790
Accounts payable and accrued expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,492,409 4,789,399
Tenant allowances payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,369,373 3,553,916
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,384,407 5,434,655
Unearned rent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,979,375 1,881,511
Interest payable to the O&Y affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,570,237 --
-------------- --------------
Total current liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 940,836,999 947,314,271
Notes payable (note 5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,158,225 34,158,225
Deferred interest payable (note 5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78,605,523 65,173,746
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,617,512 1,483,549
-------------- --------------
Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,055,218,259 1,048,129,791
Partners' capital accounts (note 2):
Carlyle-XIII:
Capital contributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43,728,411 43,723,411
Cumulative net losses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (106,901,970) (84,734,981)
Cumulative cash distributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9,373,749) (9,373,749)
-------------- --------------
(72,547,308) (50,385,319)
-------------- --------------
Venture partners:
Capital contributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 608,381,190 607,265,180
Cumulative net losses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (683,400,633) (461,592,026)
Cumulative cash distributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (81,884,750) (75,627,513)
-------------- --------------
(156,904,193) 70,045,641
-------------- --------------
Total partners' capital accounts (deficit) . . . . . . . . . . . . . . . . . . . . . (229,451,501) 19,660,322
-------------- --------------
Commitments and contingencies (notes 1 and 2)
$ 825,766,758 1,067,790,113
============== ==============
See accompanying notes to combined financial statements.
/TABLE
JMB/NYC OFFICE BUILDING ASSOCIATES, L.P.
AND UNCONSOLIDATED VENTURES
COMBINED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
1993 1992 1991
------------ ------------ ------------
Income:
Rental income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 167,820,507 177,499,667 175,864,368
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181,750 182,425 177,627
------------- ------------ ------------
168,002,257 177,682,092 176,041,995
------------- ------------ ------------
Expenses - Schedule X:
Mortgage and other interest (note 3). . . . . . . . . . . . . . . . . . . . . . 86,030,245 78,390,256 130,655,792
Depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,102,045 41,410,478 41,696,115
Property operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 66,232,722 67,994,678 67,030,647
Professional services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,314,088 1,286,443 664,560
Amortization of deferred expenses . . . . . . . . . . . . . . . . . . . . . . . 2,173,860 2,321,741 2,236,756
Provision for value impairment (note 1) . . . . . . . . . . . . . . . . . . . . 192,627,560 51,423,084 --
Provision for doubtful accounts (note 2). . . . . . . . . . . . . . . . . . . . 23,497,333 803,717 2,088,687
------------- ------------ ------------
411,977,853 243,630,397 244,372,557
------------- ------------ ------------
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(243,975,596) (65,948,305) (68,330,562)
============= ============ ============
See accompanying notes to combined financial statements.
/TABLE
JMB/NYC OFFICE BUILDING ASSOCIATES, L.P.
AND UNCONSOLIDATED VENTURES
COMBINED STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS (DEFICIT)
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
CARLYLE REAL
ESTATE LIMITED VENTURE
PARTNERSHIP-XIII PARTNERS
----------------- ---------------
Balance at December 31, 1990 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (28,606,693) 161,273,005
Capital contributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,000 44,226,669
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (12,323,342) (56,007,219)
Cash distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,375,000) (11,762,000)
------------- ------------
Balance at December 31, 1991 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (43,296,035) 137,730,455
Capital contributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,000 15,139,959
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,124,284) (58,824,021)
Cash distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- (24,000,752)
------------- ------------
Balance at December 31, 1992 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (50,385,319) 70,045,641
Capital contributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000 1,116,010
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (22,166,989) (221,808,607)
Cash distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- (6,257,237)
------------- ------------
Balance at December 31, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (72,547,308) (156,904,193)
============= ============
See accompanying notes to combined financial statements
/TABLE
JMB/NYC OFFICE BUILDING ASSOCIATES, L.P.
AND UNCONSOLIDATED VENTURES
COMBINED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
1993 1992 1991
------------ ------------ ------------
Cash flows from operating activities:
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(243,975,596) (65,948,305) (68,330,562)
Items not requiring (providing) cash:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,102,045 41,410,478 41,696,115
Amortization of deferred expenses. . . . . . . . . . . . . . . . . . . . . . 2,173,860 2,321,741 2,236,756
Provision for value impairment . . . . . . . . . . . . . . . . . . . . . . . 192,627,560 51,423,084 --
Provision for doubtful accounts. . . . . . . . . . . . . . . . . . . . . . . 23,497,333 803,717 2,088,687
Changes in:
Rents and other receivables. . . . . . . . . . . . . . . . . . . . . . . . . (4,583,255) (192,043) 364,238
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (203,064) (35,972) 181,322
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (24,494) (11,376) 23,287
Tenant notes receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . 238,882 (164,720) 147,224
Due from the O&Y affiliates. . . . . . . . . . . . . . . . . . . . . . . . . -- -- 705,251
Accrued rents receivable . . . . . . . . . . . . . . . . . . . . . . . . . . (24,448) 152,092 (5,730,142)
Interest payable to the O&Y affiliates . . . . . . . . . . . . . . . . . . . 4,570,237 (1,171,214) 307,929
Accounts payable and other accrued expenses. . . . . . . . . . . . . . . . . (1,296,990) 621,288 (1,876,251)
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (50,248) (4,545,929) (73,026)
Unearned rent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97,864 (1,869,845) 197,097
Deferred interest payable. . . . . . . . . . . . . . . . . . . . . . . . . . 13,431,777 11,831,860 10,422,516
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . . . . . . 133,963 11,376 (23,287)
------------ ------------ ------------
Net cash provided by (used in) operating activities . . . . . . . . . . 25,715,426 34,636,232 (17,662,846)
------------ ------------ ------------
Cash flows from investing activities:
Restricted funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (11,638,258) -- --
Additions to investment properties, net of tenant allowances
payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,785,586) (1,709,278) (6,463,169)
Payment of deferred expenses . . . . . . . . . . . . . . . . . . . . . . . . . (1,394,358) (943,675) (947,528)
------------ ------------ ------------
Net cash used in investing activities . . . . . . . . . . . . . . . . . (14,818,202) (2,652,953) (7,410,697)
------------ ------------ ------------
JMB/NYC OFFICE BUILDING ASSOCIATES, L.P.
AND UNCONSOLIDATED VENTURES
COMBINED STATEMENTS OF CASH FLOWS - CONTINUED
1993 1992 1991
------------ ------------ ------------
Cash flows from financing activities:
Capital contributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,121,010 15,174,959 44,235,669
Advances to O&Y affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . (1,176,224) (10,770,060) --
Principal payments on long-term debt . . . . . . . . . . . . . . . . . . . . . (8,613,592) (7,694,263) (6,873,039)
Distributions to partners. . . . . . . . . . . . . . . . . . . . . . . . . . . (6,257,237) (24,000,752) (14,137,000)
------------ ------------ ------------
Net cash provided by (used in) financing activities . . . . . . . . . . (14,926,043) (27,290,116) 23,225,630
------------ ------------ ------------
Net increase (decrease) in cash and
cash equivalents. . . . . . . . . . . . . . . . . . . . . . . . . . . $ (4,028,819) 4,693,163 (1,847,913)
============ ============ ============
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest. . . . . . . . . . . . . . . . . . $ 68,078,479 71,104,325 120,306,302
Non-cash investing and financing activities:
Retirement of investment property. . . . . . . . . . . . . . . . . . . . $ 1,896,898 -- 1,494,965
============ ============ ============
See accompanying notes to combined financial statements.
/TABLE
JMB/NYC OFFICE BUILDING ASSOCIATES
AND UNCONSOLIDATED VENTURES
NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1993, 1992 AND 1991
(1) BASIS OF ACCOUNTING
The accompanying combined financial statements have been prepared for the
purpose of complying with Rule 3.09 of Regulation S-X of the Securities and
Exchange Commission. The entities included in the combined financial
statements are as follows:
JMB/NYC Office Building Associates ("JMB/NYC") (a)
- 237 Park Avenue Associates (b)}
- 1290 Associates (b) } - (together "Three Joint Ventures")
- 2 Broadway Associates and }
2 Broadway Land Company (b)}
(a) The Partnership owns an indirect ownership interest in this
unconsolidated venture through Carlyle-XIII Associates, L.P., an
unconsolidated venture.
(b) The Partnership owns an indirect ownership interest in these joint
ventures through JMB/NYC an unconsolidated venture.
For purposes of preparing the combined financial statements, the effect of all
transactions between JMB/NYC and the Three Joint Ventures has been eliminated.
The records of JMB/NYC and the Three Joint Ventures (the "Combined
Ventures") are maintained on the accrual basis of accounting as adjusted for
Federal income tax reporting purposes. The accompanying combined financial
statements have been prepared from such records after making appropriate
adjustments to present the Three Joint Ventures' accounts in accordance with
generally accepted accounting principles. Such adjustments are not recorded
on the records of the Three Joint Ventures.
Statement of Financial Accounting Standards No. 95 requires the Combined
Ventures to present a statement which classifies receipts and payments
according to whether they stem from operating, investing or financing
activities. The required information has been segregated and accumulated
according to the classifications specified in the pronouncement.
In conjunction with the negotiations with representatives of the first
mortgage lender regarding a loan restructure, the Olympia & York affiliates
reached an agreement with the first mortgage lender whereby effective January
1, 1993, the Olympia & York affiliates are limited to taking distributions of
$250,000 on a monthly basis from the Three Joint Ventures reserving the
remaining excess cash flow in a separate-interest bearing account to be used
exclusively to meet the obligations of the Three Joint Ventures as approved by
the lender. Such reserved amounts, aggregating approximately $11,638,000, are
classified as restricted funds in the accompanying combined balance sheet.
As more fully discussed in Note 3(c) of Carlyle-XIII's financial
statements filed with this annual report, due to the potential sale of the 2
Broadway building at a sales price significantly below its net carrying value
and due to discussions with the O&Y affiliates regarding the reallocation of
the unpaid first mortgage indebtedness currently allocated to 2 Broadway, the
2 Broadway venture has made a provision for value impairment on such
investment property of $192,627,560. The provision for value impairment has
been allocated $136,534,366 and $56,093,194 to the O&Y affiliates and to
JMB/NYC, respectively. Such provision has been allocated to the partners to
reflect their respective ownership percentages before the effect of the non-
recourse promissory notes including related accrued interest.
JMB/NYC OFFICE BUILDING ASSOCIATES
AND UNCONSOLIDATED VENTURES
NOTES TO COMBINED FINANCIAL STATEMENTS - CONTINUED
In response to persistent operating deficits and vacancy levels at the 2
Broadway Building and due to the uncertainty of the 2 Broadway joint ventures'
ability to recover the net carrying value of the investment property through
future operations and sale, the 2 Broadway joint ventures made a provision for
value impairment on such investment property of $38,689,928. Such provision
at December 31, 1990 was recorded to effectively reduce the net carrying value
of the investment property to the then outstanding balance of the related non-
recourse financing allocated to the joint ventures and their property and was
allocated to the unaffiliated venture partners in accordance with the terms of
the venture agreement (see notes 3 and 5).
Due to the uncertainty of the 1290 Associates venture's ability to
recover the net carrying value of the 1290 Avenue of the Americas Building
through future operations and sale, the 1290 Associates venture made a
provision for value impairment on such investment property of $51,423,084.
Such provision at September 30, 1992 was recorded to effectively reduce the
net carrying value of the investment property and the related deferred
expenses to the then outstanding balance of the related non-recourse financing
allocated to the joint venture and its property. This provision was allocated
to the unaffiliated venture partners in accordance with the terms of the
venture agreement (see notes 3 and 5).
Prior to their agreement with the underlying first mortgage lender, which
became effective January 1, 1993, the Olympia & York affiliates borrowed cash
generated from the Three Joint Ventures aggregating $11,946,284 and
$10,770,060, respectively at December 31, 1993 and 1992. Due to the financial
difficulties of O & Y and its affiliates, as more fully discussed in Note 3(c)
of Carlyle XIII filed with this annual report, and the resulting uncertainty
of collectibility of these amounts from the Olympia & York affiliates, JMB/NYC
has recorded a provision for doubtful accounts at December 31, 1993 for the
full receivable amount ($11,946,285) at December 31, 1993, which is reflected
in the accompanying combined financial statements.
Due to the uncertainty of collectibility of amounts due from certain
tenants at the Three Joint Venture investment properties, a provision for
doubtful accounts of $11,551,048, $803,717 and $2,088,687 at December 31,
1993, 1992 and 1991, respectively, is reflected in the accompanying combined
financial statements. The provision recorded at December 31, 1993 includes
approximately $7,659,000 of past due and future rents (included in accrued
rents receivable in the accompanying combined financial statements) from John
Blair & Co., a major lessee at the 1290 Avenue of the Americas building, due
to a filing of Chapter XI bankruptcy by the tenant.
Deferred expenses are comprised of leasing and renting costs which are
amortized using the straight-line method over the terms of the related leases.
No provision for State or Federal income taxes has been made as the
liability for such taxes is that of the venture partners rather than the
ventures.
Depreciation on the investment properties has been provided over the
estimated useful lives of 5 to 30 years using the straight-line method.
Although certain leases of the Three Joint Ventures' investment
properties provide for tenant occupancy during periods for which no rent is
due, the ventures accrue prorated rental income for the full period of
occupancy. In addition, although certain leases provide for step increases in
rent during the lease term, the ventures recognize the total rent due on a
straight-line basis over the entire lease. Such amounts are reflected in
accrued rents receivable in the accompanying combined balance sheets.
Straight-line rental income (reduction) was $24,448, $(152,092) and $5,730,142
for the years ended December 31, 1993, 1992 and 1991, respectively.
JMB/NYC OFFICE BUILDING ASSOCIATES
AND UNCONSOLIDATED VENTURES
NOTES TO COMBINED FINANCIAL STATEMENTS - CONTINUED
Maintenance and repair expenses are charged to operations as incurred.
Significant betterments and improvements are capitalized and depreciated over
their estimated useful lives. An affiliate of the joint venture partners
perform certain maintenance and repair work and construction of certain tenant
improvements at the investment properties.
Certain amounts in the 1992 and 1991 combined financial statements have
been reclassified to conform with the 1993 presentation.
Statement of Financial Accounting Standards No. 107 ("SFAS 107"),
"Disclosures about Fair Value of Financial Instruments", requires entities
with total assets exceeding $150,000,000 at December 31, 1993 to disclose the
SFAS 107 value of all financial assets and liabilities for which it is
practicable to estimate. Value is defined in the Statement as the amount at
which the instrument could be exchanged in a current transaction between
willing parties, other than in a forced or liquidation sale. The Combined
Ventures believe the carrying amount of its financial instruments classified
as current assets and liabilities (excluding current portion of long-term
debt) approximates SFAS 107 value due to the relatively short maturity of
these instruments. SFAS 107 states that quoted market prices are the best
evidence of the SFAS 107 value of financial instruments, even for instruments
traded only in thin markets. The first mortgage loan is evidenced by certain
bonds which are traded in extremely thin markets. As of December 31, 1993 and
through the date of this report, a limited number of bonds have been sold and
purchased in transactions arranged by brokers for amounts ranging from
approximately $.60 to $.70 on the dollar. Assuming a rate of $.60 on the
dollar, the implied SFAS 107 value of the bonds (with an aggregate carrying
balance of $923,041,198, in the accompanying Combined Financial Statements)
would be approximately $554,000,000. Due to the significant discount at which
the bonds are currently trading, the SFAS 107 value of the promissory notes
payable and related deferred interest (aggregating $112,763,748) would be at a
discount significantly greater than that at which the bonds are currently
traded. Due to, among other things, the likely inability to obtain comparable
financing under current market conditions and other property specific
competitive conditions, and due to the disputes with the venture partner
including the alleged defaults on the first mortgage loan, the Combined
Ventures would likely be unable to refinance these properties to obtain such
calculated debt amounts reported (see notes 3 and 5). The Combined Ventures
have no other significant financial instruments.
(2) VENTURE AGREEMENTS
A description of the venture agreements is contained in Note 3(c) of
Notes to Financial Statements filed with this annual report. Such note is
incorporated herein by reference.
(3) LONG-TERM DEBT
Long-term debt consists of the following at December 31, 1993 and 1992:
1993 1992
------------------------
First mortgage loan bearing interest at the
short-term U.S. Treasury obligation note rate
plus 1-3/4% with a minimum rate on the loan of
7% per annum; allocated among and cross-
collaterally secured by the 237 Park Avenue
JMB/NYC OFFICE BUILDING ASSOCIATES
AND UNCONSOLIDATED VENTURES
NOTES TO COMBINED FINANCIAL STATEMENTS - CONTINUED
1993 1992
------------------------
Building, 1290 Avenue of the Americas Building,
2 Broadway Land and 2 Broadway Building;
payments of principal and interest based upon
a 30-year amortization schedule are due monthly,
however, commencing on a date six months
following the attainment of a certain level
of annualized cash flow, any interest in
excess of 12% per annum may be accrued, to the
extent that monthly cash flow is insufficient
to pay the full monthly debt service, by
adding such deferred amount to the outstanding
balance of the loan; the loan is in non-monetary
default at December 31, 1992 and 1993 (Reference
is made to Note 3(c) of Notes to Carlyle Real
Estate Limited Partnership-XIII Financial
Statements filed with this annual report as
to the calculation of interest rate with
reference to this first mortgage loan);
the stated maturity of principal of
$857,784,000 and accrued interest is
March 1999. . . . . . . . . . . . . . . . . $923,041,198 931,654,790
Less current portion of long-term debt . . 923,041,198 931,654,790
------------ -----------
Total long-term debt . . . . . . . $ -- --
============ ===========
The allocation of the first mortgage loan among the joint ventures is as
follows (which is non-recourse to the joint ventures) (see note 1):
1993 1992
------------ ------------
237 Park Avenue Associates. . . $214,107,494 216,105,492
1290 Avenue Associates. . . . . 453,194,197 457,423,293
2 Broadway Land Company . . . . 17,842,291 18,008,791
2 Broadway Associates . . . . . 237,897,216 240,117,214
------------ ------------
$923,041,198 931,654,790
============ ============
(4) LEASES
At December 31, 1993, the properties in the combined group consisted of
three office buildings. All leases relating to the properties are properly
classified as operating leases; therefore, rental income is reported when
earned and the cost of each of the properties, excluding the cost of land, is
depreciated over the estimated useful lives. Leases with commercial tenants
range in term from one to 25 years and provide for fixed minimum rent and
partial to full reimbursement of operating costs. Affiliates of the joint
venture partners have lease agreements and occupy approximately 95,000 square
feet of space at 237 Park Avenue at rental rates which approximate market.
During 1993 and 1992, 2 Broadway Associates collected $4,781,158 and
$6,069,444 of a total $13,340,601 bankruptcy claim against Drexel Burnham
Lambert, a former tenant of the 2 Broadway Building and is included in rental
income in the 1993 and 1992 accompanying combined income statement. All
remaining claims against Drexel Burnham Lambert were sold during 1993.
JMB/NYC OFFICE BUILDING ASSOCIATES
AND UNCONSOLIDATED VENTURES
NOTES TO COMBINED FINANCIAL STATEMENTS - CONTINUED
Minimum lease payments including amounts representing executory costs
(e.g., taxes, maintenance, insurance), and any related profit in excess of
specific reimbursements, to be received in the future under the above
operating commercial lease agreements, are as follows:
1994. . . . . . . .$ 92,366,352
1995. . . . . . . . 83,462,935
1996. . . . . . . . 74,169,081
1997. . . . . . . . 69,897,639
1988. . . . . . . . 66,432,323
Thereafter. . . . . 324,714,863
------------
$711,043,193
============
(5) NOTES PAYABLE
Notes payable consist of the following at December 31, 1993 and 1992:
1993 1992
-----------------------
Promissory notes payable to an affiliate of
the unaffiliated venture partners in the
Three Joint Ventures, bearing interest at
12.75% per annum; cross-collaterally secured
by JMB/NYC's interest in the Three Joint
Ventures one of which is additionally secured
by $19,000,000 of distributable proceeds from
two of the Three Joint Ventures; interest
accrues and is deferred, compounded monthly,
until December 31, 1991; monthly payments of
accrued interest, based upon the level of
distributions to JMB/NYC, thereafter until
maturity; principal and accrued interest
due March 20, 1999. Accrued deferred
interest of $78,605,523 and $65,173,746
is outstanding at December 31, 1993
and 1992, respectively. . . . . . . . . . . . $34,158,225 34,158,225
----------- ----------
Less current portion of notes payable . . -- --
----------- ----------
Long-term notes payable . . . . . . . . . $34,158,225 34,158,225
=========== ==========
The allocation of the promissory notes and related deferred interest
among the joint ventures is as follows:
1993 1992
----------------------
237 Park Avenue Associates. . . . . . . . $ 14,902,454 13,127,359
1290 Associates . . . . . . . . . . . . . 32,214,484 28,377,278
2 Broadway Land Company . . . . . . . . . 2,877,196 2,534,480
2 Broadway Associates . . . . . . . . . . 62,769,614 55,292,854
-----------------------
$112,763,748 99,331,971
=======================
SCHEDULE X
JMB/NYC OFFICE BUILDING ASSOCIATES
AND UNCONSOLIDATED VENTURES
SUPPLEMENTARY INCOME STATEMENT INFORMATION
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
CHARGED TO COSTS AND EXPENSES
----------------------------------------------
1993 1992 1991
------------ ------------ ------------
Depreciation . . . . . . $39,102,045 41,410,478 41,696,115
Amortization . . . . . . 2,173,860 2,321,741 2,236,756
Real estate taxes. . . . 39,589,367 40,609,489 38,358,812
Repairs and maintenance. 8,954,975 9,441,699 10,892,232
=========== ========== ===========
SCHEDULE XI
JMB/NYC OFFICE BUILDING ASSOCIATES
AND UNCONSOLIDATED VENTURES
COMBINED REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1993
COSTS
CAPITALIZED
INITIAL COST TO SUBSEQUENT TO GROSS AMOUNT AT WHICH CARRIED
UNCONSOLIDATED VENTURES(A) TO ACQUISITION AT CLOSE OF PERIOD (B)
-------------------------- -------------- --------------------------------------
BUILDINGS BUILDINGS
AND BUILDINGS AND AND
DESCRIPTION ENCUMBRANCE(C) LAND IMPROVEMENTS IMPROVEMENTS LAND IMPROVEMENTS TOTAL (E)
- ----------- -------------- ----------- ------------ -------------- ---------- ------------ ----------
OFFICE BUILDINGS:
New York, New York
(237 Park Avenue). $214,107,494 79,653,996 226,634,894 1,208,552 79,653,996 227,843,446 307,497,442
New York, New York
(1290 Avenue of
the Americas). . . 453,194,197 90,952,993 556,434,718 (9,814,514) 84,285,719 553,287,478 637,573,197
New York, New York
(2 Broadway) . . . 255,739,507 26,421,677 378,445,199 (226,988,480) 4,858,599 173,019,797 177,878,396
------------ ----------- ------------- ------------ ----------- ------------- -------------
Total. . . . . . $923,041,198 197,028,666 1,161,514,811 (235,594,442) 168,798,314 954,150,721 1,122,949,035
============ =========== ============= ============ =========== ============= =============
/TABLE
SCHEDULE XI - CONTINUED
JMB/NYC OFFICE BUILDING ASSOCIATES
AND UNCONSOLIDATED VENTURES
SUPPLEMENTARY INCOME STATEMENT INFORMATION
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
LIFE ON WHICH
DEPRECIATION
IN LATEST
STATEMENT OF 1993
ACCUMULATED DATE OF DATE OPERATION REAL ESTATE
DESCRIPTION DEPRECIATION(F) CONSTRUCTION ACQUIRED IS COMPUTED TAXES
- ----------- ---------------- ------------ ---------- --------------- -----------
OFFICE BUILDINGS:
New York, New York
(237 Park Avenue). . . . . . . . . . . . . $ 70,997,283 1981 8/14/84 5-30 years 10,356,858
New York, New York
(1290 Avenue of the Americas). . . . . . . 188,932,678 1963 7/27/84 5-30 years 19,040,331
New York, New York
(2 Broadway) . . . . . . . . . . . . . . . 116,386,179 1959 8/14/84 5-30 years 10,192,178
------------ ----------
Total. . . . . . . . . . . . . . . . . . $376,316,140 39,589,367
============ ==========
- -----------------
Notes:
(A) The initial cost represents the original purchase price of the property, including amounts incurred subsequent to
acquisition which were contemplated at the time the property was acquired.
(B) The aggregate cost of real estate owned at December 31, 1993 for Federal income tax purposes was approximately
$1,361,603,548 (see Note 1 of Notes to Combined Financial Statements).
(C) Reference is made to Note 5 of Combined Financial Statements for the current outstanding principal balances and
a description of the notes payable secured by JMB/NYC's interests in the Three Joint Ventures which are not included in the
amounts stated above.
(D) Includes provision for value impairment at 2 Broadway of $192,144,503 recorded December 31, 1993, 1290 Avenue of
the Americas of $50,446,010 recorded September 30, 1992 and 2 Broadway of $38,689,928 recorded December 31, 1990. See Note 1
of Notes to Combined Financial Statements for further discussion.
/TABLE
SCHEDULE XI - CONTINUED
JMB/NYC OFFICE BUILDING ASSOCIATES
AND UNCONSOLIDATED VENTURES
SUPPLEMENTARY INCOME STATEMENT INFORMATION
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(E) Reconciliation of real estate owned:
1993 1992 1991
-------------- -------------- -------------
Balance at beginning of period . . . . . . . $1,316,389,393 1,366,280,363 1,365,517,662
Additions during period. . . . . . . . . . . 601,043 555,040 2,257,666
Provision for value impairment . . . . . . . (192,144,503) (50,446,010) --
Retirements during period. . . . . . . . . . (1,896,898) -- (1,494,965)
-------------- ------------- -------------
Balance at end of period . . . . . . . . . . $1,122,949,035 1,316,389,393 1,366,280,363
============== ============= =============
(F) Reconciliation of accumulated depreciation:
Balance at beginning of period . . . . . . . $ 339,110,993 297,700,515 257,499,365
Depreciation expense . . . . . . . . . . . . 39,102,045 41,410,478 41,696,115
Retirements during period. . . . . . . . . . (1,896,898) -- (1,494,965)
-------------- ------------- -------------
Balance at end of period . . . . . . . . . . $ 376,316,140 339,110,993 297,700,515
============== ============= =============
/TABLE
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure
There were no changes in or disagreements with accountants during fiscal
year 1993 and 1992.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP
The Corporate General Partner of the Partnership is JMB Realty
Corporation ("JMB"), a Delaware corporation. JMB as the Corporate General
Partner has responsibility for all aspects of the Partnership's operations,
subject to the requirement that sales of real property must be approved by the
Associate General Partner of the Partnership, Realty Associates-XIII L.P., an
Illinois Limited Partnership with JMB as the sole general partner. The
Associate General Partner shall be directed by a majority in interest of its
limited partners (who are generally officers, directors and affiliates of JMB
or its affiliates) as to whether to provide its approval of any sale of real
property (or any interest therein) of the Partnership. Various relationships
of the Partnership to the Corporate General Partner and its affiliates are
described under the caption "Conflicts of Interest" at pages 12-18 of the
Prospectus, of which description is hereby incorporated herein by reference to
Exhibit 28-A to the Partnership's Report for December 31, 1992 on Form 10-K
(File No. 0-12791) dated March 30, 1993.
The names, positions held and length of service therein of each director
and executive officer and certain officers of the Managing General Partner of
the Partnership are as follows:
SERVED IN
NAME OFFICE OFFICE SINCE
- ---- ------ ------------
Judd D. Malkin Chairman 5/03/71
Director 5/03/71
Neil G. Bluhm President 5/03/71
Director 5/03/71
Jerome J. Claeys III Director 5/09/88
Burton E. Glazov Director 7/01/71
Stuart C. Nathan Executive Vice President 5/08/79
Director 3/14/73
A. Lee Sacks Director 5/09/88
John G. Schreiber Director 3/14/73
H. Rigel Barber Chief Executive Officer 8/01/93
and Executive Vice President 1/02/87
Jeffrey R. Rosenthal Chief Financial Officer 8/01/93
Gary Nickele Executive Vice President 1/01/92
General Counsel 2/27/84
Ira J. Schulman Executive Vice President 6/01/88
Gailen J. Hull Senior Vice President 6/01/88
Howard Kogen Senior Vice President 1/02/86
Treasurer 1/01/91
There is no family relationship among any of the foregoing directors or
officers. The foregoing directors have been elected to serve one-year terms
until the annual meeting of the Corporate General Partner to be held on June
7, 1994. All of the foregoing officers have been elected to serve one-year
terms until the first meeting of the Board of Directors held after the annual
meeting of the Corporate General Partner to be held on June 7, 1994. There
are no arrangements or understandings between or among any of said directors
or officers and any other person pursuant to which any director or officer was
elected as such.
JMB is the Corporate General Partner of Carlyle Real Estate Limited
Partnership-VII ("Carlyle-VII"), Carlyle Real Estate Limited Partnership-IX
("Carlyle-IX"), Carlyle Real Estate Limited Partnership-X ("Carlyle-X"),
Carlyle Real Estate Limited Partnership-XI ("Carlyle-XI"), Carlyle Real Estate
Limited Partnership-XII ("Carlyle-XII"), Carlyle Real Estate Limited
Partnership-XIV ("Carlyle-XIV"), Carlyle Real Estate Limited Partnership-XV
("Carlyle-XV"), Carlyle Real Estate Limited Partnership-XVI ("Carlyle-XVI"),
Carlyle Real Estate Limited Partnership-XVII ("Carlyle-XVII"), JMB Mortgage
Partners, Ltd. ("Mortgage Partners"), JMB Mortgage Partners, Ltd.-II
("Mortgage Partners-II"), JMB Mortgage Partners, Ltd.-III ("Mortgage
Partners-III"), JMB Mortgage Partners, Ltd-IV ("Mortgage Partners-IV"),
Carlyle Income Plus, Ltd. ("Carlyle Income Plus") and Carlyle Income Plus,
L.P.-II ("Carlyle Income Plus-II") and the managing general partner of JMB
Income Properties, Ltd.-IV ("JMB Income-IV"), JMB Income Properties, Ltd.-V
("JMB Income-V"), JMB Income Properties, Ltd.-VI ("JMB Income-VI"), JMB Income
Properties, Ltd.-VII ("JMB Income-VII"), JMB Income Properties, Ltd.-VIII
("JMB Income-VIII"), JMB Income Properties, Ltd.-IX ("JMB Income-IX"), JMB
Income Properties, Ltd.-X ("JMB Income-X"), JMB Income Properties, Ltd.-XI
("JMB Income-XI"), JMB Income Properties, Ltd.-XII ("JMB Income-XII"), and JMB
Income Properties, Ltd.-XIII ("JMB Income-XIII"). Most of the foregoing
directors and officers are also officers and/or directors of various
affiliated companies of JMB including Arvida/JMB Managers, Inc. (the general
partner of Arvida/JMB Partners, L.P. ("Arvida")), Arvida/JMB Managers-II, Inc.
(the general partner of Arvida/JMB Partners, L.P.-II ("Arvida-II")), and
Income Growth Managers, Inc. (the corporate general partner of IDS/JMB
Balanced Income Growth, Ltd. ("IDS/BIG")). Most of such directors and
officers are also partners, directly or indirectly, of certain partnerships
which are associate general partners in the following real estate limited
partnerships: the Partnership, Carlyle-VII, Carlyle-IX, Carlyle-X,
Carlyle-XI, Carlyle-XII, Carlyle-XIV, Carlyle-XV, Carlyle-XVI, Carlyle-XVII,
JMB Income-VI, JMB Income-VII, JMB Income-VIII, JMB Income-IX, JMB Income-X,
JMB Income-XI, JMB Income-XII, JMB Income-XIII, Mortgage Partners, Mortgage
Partners-II, Mortgage Partners-III, Mortgage Partners-IV, Carlyle Income Plus,
Carlyle Income Plus-II and IDS/BIG.
The business experience during the past five years of each such director
and officer of the Corporate General Partner of the Partnership in addition to
that described above is as follows:
Judd D. Malkin (age 56) is an individual general partner of JMB
Income-II, JMB Income-IV and JMB Income-V. Mr. Malkin has been associated
with JMB since October, 1969. He is a Certified Public Accountant.
Neil G. Bluhm (age 56) is an individual general partner of JMB Income-II,
JMB Income-IV and JMB Income-V. Mr. Bluhm has been associated with JMB since
August, 1970. He is a member of the Bar of the State of Illinois and a
Certified Public Accountant.
Jerome J. Claeys III (age 51) (Chairman and Director of JMB Institutional
Realty Corporation) has been associated with JMB since September, 1977. He
holds a Masters degree in Business Administration from the University of Notre
Dame.
Burton E. Glazov (age 55) has been associated with JMB since June, 1971
and served as an Executive Vice President of JMB until December 1990. He is a
member of the Bar of the State of Illinois and a Certified Public Accountant.
Stuart C. Nathan (age 52) has been associated with JMB since July, 1972.
He is a member of the Bar of the State of Illinois.
A. Lee Sacks (age 60) (President of JMB Insurance Agency, Inc.) has been
associated with JMB since December, 1972.
John G. Schreiber (age 47) has been associated with JMB since December,
1970 and served as an Executive Vice President of JMB until December 1990. He
holds a Masters degree in Business Administration from Harvard University
Graduate School of Business.
H. Rigel Barber (age 45) has been associated with JMB since March, 1982.
He holds a J.D. degree from the Northwestern Law School and is a member of the
Bar of the State of Illinois.
Jeffrey R. Rosenthal (age 43) has been associated with JMB since
December, 1987. He is a Certified Public Accountant.
Gary Nickele (age 41) has been associated with JMB since February, 1984.
He holds a J.D. degree from the University of Michigan Law School and is a
member of the Bar of the State of Illinois.
Ira J. Schulman (age 42) has been associated with JMB since February,
1983. He holds a Masters degree in Business Administration from the
University of Pittsburgh.
Gailen J. Hull (age 45) has been associated with JMB since March, 1982.
He holds a Masters degree in Business Administration from Northern Illinois
University and is a Certified Public Accountant.
Howard Kogen (age 58) has been associated with JMB since March, 1973. He
is a Certified Public Accountant.
ITEM 11. EXECUTIVE COMPENSATION
The Partnership has no officers or directors. The Partnership is
required to pay a management fee to the Corporate General Partner and the
General Partners are entitled to receive a share of cash distributions, when
and as cash distributions are made to the Limited Partners, and a share of
profits or losses as described under the caption " Compensation and Fees" at
pages 8-11, "Cash Distributions" at pages 69-71, "Allocation of Profits or
Losses for Tax Purposes" at pages 68-69 of the Prospectus and at pages A-7 to
A-12 of the Partnership Agreement, included as an exhibit to the Prospectus,
which descriptions are incorporated herein by reference to Exhibit 28-A to the
Partnership's Report for December 31, 1992 on Form 10-K (File No. 0-12791)
dated March 30, 1993. Reference is also made to Notes 5 and 9 for a
description of such transactions, distributions and allocations. In 1993,
1992 and 1991, the General Partners received distributions of $0, $7,629 and
$64,845, respectively, and the Corporate General Partner received a management
fee of $0, $12,715 and $108,075, respectively. The General Partners received
a share of Partnership gains for tax purposes aggregating $4,121,438 in 1993
and losses aggregating, $1,598,313 and $2,214,779 in 1992 and 1991,
respectively. Such losses may benefit the General Partners (or the partners
thereof) to the extent that such losses may be offset against taxable income
from the Partnership or other sources.
The Partnership is permitted to engage in various transactions involving
affiliates of the Corporate General Partner of the Partnership, as described
under the captions "Compensation and Fees" at pages 8-11, "Conflicts of
Interest" at pages 12-18 of the Prospectus and at pages A-14 to A-20 of the
Partnership Agreement, included as an exhibit to the Prospectus, which
descriptions are hereby incorporated herein by reference to Exhibit 28-A to
the Partnership's Report for December 31, 1992 on Form 10-K (File No. 0-12791)
dated March 30, 1993. The relationship of the Corporate General Partner (and
its directors and officers) to its affiliates is set forth above in Item 10.
An affiliate of the Corporate General Partner provided property
management services for all or part of 1993 for the 1001 Fourth Avenue Plaza
office building in Seattle, Washington, the University Park office building in
Sacramento, California, the Plaza Tower office building in Knoxville,
Tennessee, the Rio Cancion Apartments in Tucson, Arizona, the Long Beach Plaza
in Long Beach, California, the Eastridge Apartments in Tucson, Arizona, the
Copley Place multi-use complex in Boston, Massachusetts, the Gables Corporate
Plaza in Coral Gables, Florida, the Greenwood Creek II Apartments in Benbrook,
Texas, and the Sherry Lane Place office building in Dallas, Texas at various
fees calculated based upon the gross income from the properties. In 1993,
such affiliate earned property management and leasing fees amounting to
$3,001,759 for such services. The cumulative amount of property management
and leasing fees owed to an affiliate of the Corporate General Partner as of
December 31, 1993 was $13,670,682. As set forth in the Prospectus of the
Partnership, the Corporate General Partner must negotiate such agreements on
terms no less favorable to the Partnership than those customarily charged for
similar services in the relevant geographical area (but in no event at rates
greater than 6% of the gross income from a property), and such agreements must
be terminable by either party thereto, without penalty, upon 60 days' notice.
JMB Insurance Agency, Inc., an affiliate of the Corporate General
Partner, earned insurance brokerage commissions in 1993 aggregating $214,278
in connection with the providing of insurance coverage for certain of the real
property investments of the Partnership, all of which was paid at December 31,
1993. Such commissions are at rates set by insurance companies for the
classes of coverage provided.
The General Partners of the Partnership or their affiliates may be
reimbursed for their direct expenses or out-of-pocket expenses and salaries
and related salary expenses relating to the administration of the Partnership
and the acquisition and operation of the Partnership's real property
investments. In 1993, the Corporate General Partner of the Partnership was
due reimbursement for such out-of-pocket expenses in the amount of $45,143,
all of which was paid at December 31, 1993. Additionally, the General
Partners are also entitled to reimbursements for legal and accounting
services. Such costs for 1993 were $148,712 and $30,381, respectively, all of
which were unpaid as of December 31, 1993.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) No person or group is known by the Partnership to own beneficially more than 5% of the outstanding Interests of the
Partnership.
(b) The Corporate General Partner and its officers and directors own the following Interests of the Partnership:
NAME OF AMOUNT AND NATURE
BENEFICIAL OF BENEFICIAL PERCENT
TITLE OF CLASS OWNER OWNERSHIP OF CLASS
- -------------- ---------- ----------------- --------
Limited Partnership Interests JMB Realty Corporation 5 Interests directly Less than 1%
Limited Partnership Interests Corporate General 6.79 Interests directly (1) Less than 1%
Partner and its
officers and directors
as a group
(1) Includes 1.79 Interests owned by officers or their relatives for which each officer has investment and voting power
as to such Interests so owned.
No officer or director of the Corporate General Partner of the Partnership possesses a right to acquire beneficial
ownership of Interests of the Partnership.
(c) There exists no arrangement, known to the Partnership, the operation of which may at a subsequent date result in a
change in control of the Partnership.
/TABLE
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There were no significant transactions or business relationships with the
Corporate General Partner, affiliates or their management other than those
described in Items 10 and 11 above.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
(1) Financial Statements (See Index to Financial Statements filed
with this annual report).
(2) Exhibits.
3.* Amended and Restated Agreement of Limited Partnership set
forth as Exhibit A to the Prospectus, and which is hereby incorporated by
reference.
4-A. Documents relating to the mortgage loan secured by the
1001 Fourth Avenue Plaza in Seattle, Washington are also hereby incorporated
herein by reference to Post-Effective Amendment No. 2 in the Partnership's
Registration Statement on Form S-11 (File No. 2-81125) dated June 9, 1983.
4-B. Documents relating to the mortgage loan secured by the
Copley Place multi-use complex, in Boston Massachusetts, are also hereby
incorporated herein by reference to Post-Effective Amendment No. 2 in the
Partnership's Registration Statement on Form S-11 (File No. 2-81125) dated
June 9, 1983.
4-C.* Documents relating to the modification of the mortgage
loan secured by 1001 Fourth Avenue Plaza are hereby incorporated herein by
reference.
4-D.* Documents relating to the modification of the mortgage
loan secured by the Copley Place multi-use complex are hereby incorporated
herein by reference.
10-A. Acquisition documents relating to the purchase by the
Partnership of an interest in the 1001 Fourth Avenue Plaza
in Seattle, Washington, are hereby incorporated herein by reference to Post-
Effective Amendment No. 2 to the Partnership's Registration Statement on Form
S-11 (File No. 2-81125) dated June 9, 1983.
10-B. Acquisition documents relating to the purchase by the
Partnership of an interest in the Copley Place multi-use complex in Boston,
Massachusetts, are hereby incorporated herein by reference to Post-Effective
Amendment No. 2 to the Partnership's Registration Statement on Form S-11 (File
No. 2-81125) dated June 9, 1983.
10-C. Documents relating to the sale by the Partnership of an
interest in the Allied Automotive Center, in Southfield, Michigan, are hereby
incorporated herein by reference to the Partnership's Report on Form 8-K (File
No. 0-12791) for October 10, 1990, dated October 30, 1990.
10-D. Documents describing the transferred title of the
Partnership's interest in the Commercial Union Office Building to the second
mortgage lender, are hereby incorporated herein by reference to the
Partnership's Report on Form 8-K (File No. 0-12791) for August 15, 1991,
dated September 18, 1991.
10-E. Agreement dated March 25, 1993 between JMB/NYC and the
Olympia & York affiliates regarding JMB/NYC's deficit funding obligations from
January 1, 1992 through June 30, 1993 are filed herewith.
10-F. Agreement of Limited Partnership of Carlyle-XIII
Associates L.P. is hereby incorporated by reference to the
Partnership's Report on Form 10-Q (File No. 0-12791) dated May 14, 1993.
10-G. Documents relating to the sale by the Partnership of its
interest in the Rio Cancion Apartments in Tucson, Arizona,
are herein incorporated by reference to the Partnership's Report on Form 8-K
(File No. 0-12791) for March 31, 1993, dated May 14, 1993.
10-H. Documents relating to the sale by the Partnership of its
interest in the Old Orchard Urban Venture are herein incorporated by reference
to the Partnership's Report on Form 8-K (File No. 0-12791) for August 30,
1993, dated November 12, 1993.
10-I. Documents describing the transferred title of the
Partnership's interest in the 1001 Fourth Avenue Office Building to the first
mortgage lender, are hereby incorporated herein by reference to the
Partnership's Report on Form 8-K (File No. 0-12791) for November 1, 1993,
dated November 12, 1993.
10-J. Second Amended and Restated Articles of Partnership of
JMB/NYC Office Building Associates, a copy of which is filed herewith.
10-K. Amended and Restated Certificate of Incorporation of
Carlyle-XIV Managers, Inc., a copy of which is filed herewith.
10-L. Amended and Restated Certificate of Incorporation of
Carlyle-XIII Managers, Inc., a copy of which is filed herewith.
10-M. $600,000 demand note between Carlyle-XIII Associates, L.P.
and Carlyle Managers, Inc., a copy of which is filed herewith.
10-N. $600,000 demand note between Carlyle-XIII Associates, L.P.
and Carlyle Investors, Inc., a copy of which is filed herewith.
10-O. Settlement Agreement between Gables Corporate Plaza
Associates and Aetna Life Insurance Company, a copy of which is filed
herewith.
21. List of Subsidiaries.
24. Powers of Attorney.
99-A. The Partnership's Report on Form 10-Q (File No. 0-12791)
for May 14, 1993 and exhibits thereto are hereby incorporated herein by
reference.
99-B. The Partnership's Report on Form 8-K (File No. 0-12791)
for May 14, 1993 and exhibits thereto are hereby incorporated herein by
reference.
99-C. The Partnership's Report on Form 8-K (File No. 0-12791)
for November 12, 1993 and exhibits thereto are hereby incorporated herein by
reference.
99-D. The Partnership's Report on Form 8-K (File No. 0-12791)
for November 12, 1993 and exhibits thereto are hereby incorporated herein by
reference.
Although certain additional long-term debt instruments of the
Registrant have been excluded from Exhibit 4 above, pursuant to Rule
601(b)(4)(iii), the Registrant commits to provide copies of such agreements to
the SEC upon request.
(b) The following Report on Form 8-K has been filed for the
quarter covered by this report.
(1) The Partnership's Report on Form 8-K (File No. 0-
12791) for November 1, 1993 (describing under Item 2
of such report the Partnership's transfer of the land, related improvements
and personal property as of the 1001 Fourth Avenue Office Building) was filed.
The report is dated November 12, 1992. No financial statements were required
to be filed therewith.
----------------
* Previously filed as Exhibits 3, 4-C and 4-D, respectively, to the
Partnership's Report on Form 10-K to the Securities Exchange Act of 1934 (File
No. 0-12791) dated March 30, 1993 are hereby incorporated herein by reference.
No annual report or proxy material for the fiscal year 1993 has been sent to
the Partners of the Partnership. An annual report will be sent to the
Partners subsequent to this filing.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Partnership has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
By: JMB Realty Corporation
Corporate General Partner
GAILEN J. HULL
By: Gailen J. Hull
Senior Vice President
Date:March 28, 1994
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
By: JMB Realty Corporation
Corporate General Partner
JUDD D. MALKIN*
By: Judd D. Malkin, Chairman and Director
Date:March 28, 1994
NEIL G. BLUHM*
By: Neil G. Bluhm, President and Director
Date:March 28, 1994
H. RIGEL BARBER*
By: H. Rigel Barber, Chief Executive Officer
Date:March 28, 1994
JEFFREY R. ROSENTHAL*
By: Jeffrey R. Rosenthal, Chief Financial Officer
Principal Financial Officer
Date:March 28, 1994
GAILEN J. HULL
By: Gailen J. Hull, Senior Vice President
Principal Accounting Officer
Date:March 28, 1994
By: A. LEE SACKS*
A. Lee Sacks, Director
Date:March 28, 1994
By: STUART C. NATHAN*
Stuart C. Nathan, Executive Vice President
and Director
Date:March 28, 1994
*By:GAILEN J. HULL, Pursuant to a Power of Attorney
GAILEN J. HULL
By: Gailen J. Hull, Attorney-in-Fact
Date:March 28, 1994
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
EXHIBIT INDEX
Document
Incorporated
By Reference Page
------------ ----
3. Amended and Restated Agreement of
Limited Partnership set forth as
Exhibit A to the Prospectus Yes
4-A. Mortgage loan documents secured by the
1001 Fourth Avenue Plaza Yes
4-B. Mortgage loan documents secured by the
Copley Place multi-use complex Yes
4-C. Remodification of mortgage loan documents
secured by 1001 Fourth Avenue Plaza Yes
4-D. Remodification of mortgage loan documents
secured by Copley Place multi-use complex.Yes
10-A. Acquisition documents related to the
1001 Fourth Avenue Plaza Yes
10-B. Acquisition documents related to the
Copley Place multi-use complex Yes
10-C. Documents related to the sale of Allied
Automotive Center. Yes
10-D. Documents related to the transferred
title of Commercial Union Office Building Yes
10-E. Agreement relating to JMB/NYC's deficit
funding obligations from January 1, 1992
through June 30, 1993. Yes
10-F. Agreement of Limited Partnership of
Carlyle-XIII Associates L.P. Yes
10-G. Documents relating to the sale by
the Partnership of its interest in
the Rio Cancion Apartments Yes
10-H. Documents relating to the sale of
its interest in the Old Orchard
Urban Venture Yes
10-I. Documents related to the transferred
title to the Commercial Union Office
Building Yes
10-J. Second Amended and Restated Articles
of Partnership of JMB/NYC Office
Building Associates No
10-K. Amended and Restated Certificate
of Incorporation of Carlyle-XIV
Managers, Inc. No
10-L. Amended and Restated Certificate
of Incorporation of Carlyle-XIII
Managers, Inc. No
10-M. $600,000 demand note between
Carlyle-XIII Associates, Ltd. and
Carlyle Managers, Inc. No
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
EXHIBIT INDEX - CONTINUED
Document
Incorporated
By Reference Page
------------ ----
10-N. $600,000 demand note between
Carlyle-XIII Associates, Ltd. and
Carlyle Investors, Inc. No
10-O. Settlement Agreement between Gables
Corporate Plaza Associates and Aetna
Life Insurance Company No
21. List of Subsidiaries Yes
24. Powers of Attorney Yes
99-A. Form 10-Q for May 14, 1993 and exhibits
thereto Yes
99-B. Form 8-K for May 14, 1993 and exhibits
thereto Yes
99-C. Form 8-K for November 12, 1993 and exhibits
thereto Yes
99-D. Form 8-K for November 12, 1993 and exhibits
thereto Yes
- ------------------
* Previously filed as exhibits to the Partnership's Registration
Statement on Form S-11 (as amended) under the Securities Exchange Act of 1933
and the Partnership's prior Reports on Form 8-K and Form 10-K of the
Securities Exchange Act of 1934.
AGREEMENT FOR THE DELIVERY OF A DEED
IN LIEU OF FORECLOSURE
AGREEMENT made as of the 29th day of October, 1993, between 1001
FOURTH AVENUE ASSOCIATES, an Illinois general partnership having its principal
place of business and post office address at c/o JMB Realty Corporation, 900
North Michigan Avenue, Suite 1900, Chicago, Illinois 60611 ("Mortgagor") and
SEAFO, INC., a Delaware corporation, having a post office address at c/o the
Comptroller of the State of New York As Trustee of the Common Retirement Fund
of the State of New York ("CRF"), 270 Broadway, New York, New York 10007
("Mortgagee").
RECITALS
A. Mortgagor is the owner of certain fee and leasehold
interests in the real property having a street address of 1001 Fourth Avenue,
Seattle, Washington and the improvements located thereat.
B. Mortgagee is the holder of a certain Deed of Trust Note,
dated as of April 26, 1984, between Mortgagor and the Comptroller of the State
of New York as Trustee of the Common Retirement Fund of the State of New York
("CRF"), as amended by the Deed of Trust Note Modification Agreement, dated as
of October 5, 1987 (the "Existing Deed of Trust Note"), and the beneficiary of
a certain deed of trust securing such Existing Deed of Trust Note (the
"Existing Deed of Trust").
C. Mortgagor desires to convey, assign and transfer such real
property and improvements and all of Mortgagor's interests therein to
Mortgagee, in satisfaction of its obligations under the Existing Deed of Trust
and Existing Deed of Trust Note, and Mortgagee is willing to accept same from
Mortgagor, upon the terms and subject to the conditions hereinafter set forth.
AGREEMENT:
NOW, THEREFORE, in consideration of the premises and covenants
herein and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereby agree as follows:
1. Definitions
In this Agreement, the following terms shall have the following
meanings:
1.1 "Assignment and Assumption of Contracts" has the meaning
set forth in Section 7.2.4.
1.2 "Assignment and Assumption of Leases" has the meaning set
forth in Section 7.2.3.
1.3 "Assignment and Assumption of the Tax and Insurance Escrow
Account" has the meaning set forth in Section 7.2.6.
1.4 "Assignment of Future Tax or Insurance Refunds" has the
meaning set forth in Exhibit 7.2.7.
1.5 "Assignment of Intangible Property" has the meaning set
forth in Section 7.2.5.
1.6 Intentionally Deleted.
1.7 "Building Complex" means the Land, the Improvements and
the Personal Property.
1.8 "Closing" has the meaning set forth in Section 7.1.
1.9 "Contracts" means those service, maintenance and other
contracts and agreements and all equipment and other leases (excluding
Existing Leases) affecting all or any portion of the Building Complex and
binding upon Mortgagor which the parties have agreed will be assigned to
Mortgagee at the Closing. The Contracts are listed in Exhibit B attached
hereto.
1.10 "Deed" has the meaning set forth in Section 7.2.1.
1.11 "Excess Net Cash Flow" has the meaning set forth in Section
7.2.15.
1.12 "Existing Deed of Trust" has the meaning set forth in the
Recitals.
1.13 "Existing Deed of Trust Note" has the meaning set forth in
the Recitals.
1.14 "Existing Loan Documents" means all documents evidencing
or securing the Existing Deed of Trust Note, as the same may have heretofore
been modified from time to time.
1.15 "Existing Leases" means those existing leases affecting
portions of the Improvements and binding upon Mortgagor as landlord.
1.16 "Improvements" means the buildings and all other
structures and improvements (on, over or below the surface of the Land) at the
Building Complex.
1.17 "Land" means, that certain parcel of land situated in the
City of Seattle, County of King, State of Washington, as more particularly
described in Exhibit A.
1.18 "Letter of Credit" shall mean that Two Million and 00/100
Dollars ($2,000,000) irrevocable letter of credit at Chemical Bank, No. C-
237248, dated November 9, 1987, and as amended from time to time, held as
collateral for the performance of certain obligations of Mortgagor under the
Existing Deed of Trust.
1.19 "Mortgagee's Agents" means Mortgagee's attorneys,
employees, agents, engineers, lenders, consultants, financial advisors and
representatives.
1.20 "Notice" has the meaning set forth in Section 9.
1.21 "Permits" has the meaning set forth in Section 3.5.
1.22 "Personal Property" means all appliances, apparatus,
fixtures and equipment (including, without limitation all heating,
ventilating, incinerating, lighting, plumbing, electrical and air-conditioning
fixtures and equipment), machinery, fittings and other articles of personal
property now situate in or on or attached to the Building Complex, including
all furniture, fixtures and equipment in the management office, and excluding
only personal property owned by tenants under the Existing Leases or by
parties other than Mortgagor under the Contracts and the Unassumed Contracts.
1.23 "Property" means the Land, the Improvements, the Personal
Property and the property described in Section 3 and specifically excludes the
Unassumed Contracts.
1.24 "Review Materials" shall mean, collectively, the Existing
Leases, the Contracts and other materials relating to the ownership,
construction, renovation, leasing or operation of the Property.
1.25 "Title Company" means Chicago Title Insurance Company.
1.26 "Unassumed Contracts" means those service, maintenance and
other contracts and agreements and all equipment and other leases (excluding
Existing Leases) affecting all or any portion of the Building Complex and
binding upon Mortgagor other than the Contracts.
2. Agreement to Convey
2.1 Agreement to Convey and Accept Such Conveyance. Mortgagor
agrees to convey, assign and transfer the Property to Mortgagee, without
recourse or warranty except as expressly set forth herein, and Mortgagee
agrees to accept such conveyance of the Property from Mortgagor, upon the
terms and subject to the conditions set forth herein, without consideration
other than the covenants and conditions herein.
3. Other Property Included in the Conveyance
For this Agreement, all right, title and interest of Mortgagor,
if any, in and to the following shall be included within the term "Property."
3.1 all easements, rights of way, strips, gores, privileges,
licenses, appurtenances and other rights and benefits running with the owner
of the Property;
3.2 any land lying in the bed of any street, road or avenue
adjoining or below the Land;
3.3 the Existing Leases, all unapplied security deposits made
by tenants under the Existing Leases, all guarantees by third parties of the
obligation of tenants thereunder, and all letters of credit and other
instruments or property issued or given as security for the obligation of
tenants thereunder;
3.4 all advance rentals, and other advance payments made by
tenants under the Existing Leases;
3.5 the certificates of occupancy with respect to the
Improvements and, to the extent maintained by or on behalf of Mortgagor, all
other transferable licenses, certificates and permits issued by any
governmental or quasi-governmental authority with respect to the Property or
the use, maintenance and operation thereof (collectively, the "Permits");
3.6 all architectural, mechanical, engineering and other plans
and specifications within Mortgagor's possession or subject to its control
relating to the completed construction or renovation of or other work at the
Building Complex and any unexpired warranties, guaranties or sureties in favor
of Mortgagor with respect thereto;
3.7 all promotional advertising literature and materials,
catalogs, booklets and manuals relating to the Property or the use, operation
and maintenance thereof;
3.8 all of the Contracts and all deposits made by Mortgagor
thereunder, to the extent transferable by their terms;
3.9 all intangible personal property relating to the
ownership, construction, renovation, operation and leasing of the Property,
including, without limitation, the good will pertaining thereto;
3.10 all environmental reports, asbestos reports and files
relating to asbestos work within Mortgagor's possession;
3.11 all accounting, financial and operating information
located at the Property; and
3.12 all transferable or assignable warranties, guaranties,
contract rights and miscellaneous rights, if any, with respect to the
Property, including any of the property described in Sections 3.1 through 3.11
above.
4. Release
4.1 Release. Mortgagor and Mortgagee hereby mutually
release each other from any and all obligations and liabilities remaining
under the Existing Loan Documents.
5. Mortgagee's Inspection of the Property
5.1 Condition. Mortgagee acknowledges that Mortgagee has
inspected the Building Complex and will accept same "as is" as of the date
hereof. Mortgagee shall assume responsibility for the physical condition of
the Building Complex.
6. Brokerage, Management and Site Personnel
6.1 Brokerage.
6.1.1 The Mortgagee hereby retains JMB Properties Company, an
Illinois corporation, ("Properties") as its leasing agent with respect to
pending negotiations for leases at the Property with persons or entities set
forth in Exhibit D, and Properties accepts such assignment. In the event that
Mortgagee executes a lease, lease renewal or lease expansion for space in the
Property with any person or entities listed on Exhibit D on or before February
28, 1994, then and in each such event, Mortgagee shall pay and Properties
shall be entitled to receive, a brokerage commission with respect thereto
payable, one-half of such commission on execution of such lease, lease renewal
or lease expansion and one-half of such commission on the entry into
substantial occupancy by the tenant thereunder, at the following commission
rates:
(i) For leases other than month-to-month -- $1.50 per rentable
square foot, for new leases, renewal leases or expansion space; and
(ii) For month to month leases -- no commission.
6.1.2 No brokerage commission shall be earned until a lease,
lease renewal or lease expansion has been fully executed by Mortgagee.
Properties shall provide the services of Steven Hisken to perform its
obligations hereunder, and shall pay all compensation to him, including any
leasing commissions, by separate agreement. In the event Properties has been
paid all commissions in accordance with the foregoing, Properties shall
indemnify and hold Mortgagee harmless from any claims of Steven Hisken
including reasonable legal fees, for brokerage commissions for any lease,
lease renewal or lease expansion executed by Mortgagee with any person listed
on Exhibit D at any time on or before February 28, 1994.
6.2 Site Employees.
6.2.1 Employees. Properties shall make available to
Mortgagee's managing agent and Mortgagee the persons through December 31, 1993
listed on Exhibit P to perform the services for Mortgagee and Mortgagee's
managing agent under their direction as such persons have been performing
services for Properties and Mortgagor prior to the Closing. In consideration
for the providing of such employees, Mortgagee, has on even date herewith,
paid Properties the sum of $ 52,091.00, by allowing Mortgagor to deduct such
sum from moneys otherwise being transmitted to Mortgagee pursuant to Section
7.2.14. On or before January 31, 1994, Properties shall deliver a statement
to Mortgagee showing the actual out-of-pocket salaries, bonus and benefit
costs of such employees for the period between the Closing and December 31,
1993. Mortgagee and Properties shall thereafter promptly adjust the payment
to reflect the actual employee costs, but in no event shall actual out-of-
pocket salary bonus and benefit costs exceed $57,300.00 for the purpose of
such adjustment.
6.2.2 Severance. In addition, Mortgagee shall on January 31,
1994, pay any severance payment owed to any such employee in accordance with
severance amounts indicated on Exhibit P in the event that such employee is
terminated by Mortgagee or its managing agent on or before December 31, 1993,
unless such termination was for cause, or unless such employee continues in
the employ of Properties after January 1, 1994 or is offered a comparable
position and similar salary by Mortgagee or Mortgagee's managing agent.
6.3. Termination of Management Agreement. Mortgagor and
Properties hereby terminate the Management Agreement between them relating to
the Property. Properties hereby releases Mortgagee from any claim for fees or
compensation under such Management Agreement, except as provided in Section
6.1, 6.2, and 6.4 hereof.
6.4. Management Fees. Mortgagee has paid Properties
$43,406.00, being an amount equal to those management fees estimated to arise
between Closing and December 31, 1993 calculated at three (3%) percent of
gross revenue from the Property, the actual amount to be reconciled on or
before January 31, 1994 with Mortgagee and Properties to promptly adjust the
payment to reflect the actual amount of gross revenue from the Property during
that period. Payment has been made by allowing Mortgagor to deduct such
amount from moneys otherwise being transmitted to Mortgagee pursuant to
Section 7.2.14.
6.5 Survival. The provisions of this Article 6 shall survive
the Closing.
7. Closing
7.1 Time and Place. The closing contemplated by this
Agreement (the "Closing"), shall take place at the time of the
execution of this Agreement at the offices of Rogers & Wells, 200 Park Avenue,
New York, New York 10166.
7.2 Mortgagor's Closing Documentation and Requirements. At
the Closing, Mortgagor shall deliver the following to Mortgagee:
7.2.1 a deed in lieu of foreclosure without covenants (the
"Deed"), duly executed by Mortgagor and acknowledged and in recordable form,
in substantially the form of Exhibit F hereto;
7.2.2 a bill of sale, duly executed by Mortgagor and
acknowledged, transferring to Mortgagee title to the Personal Property, in
substantially the form of Exhibit G hereto;
7.2.3 an assignment and assumption of leases (the "Assignment
and Assumption of Leases"), duly executed and acknowledged, assigning and
transferring to Mortgagee the lessor's interest under the Existing Leases and
any security deposits and advance rentals made under the Existing Leases, in
substantially the form of Exhibit H hereto;
7.2.4 an assignment and assumption of contracts (the
"Assignment and Assumption of Contracts"), duly executed and acknowledged,
assigning and transferring to Mortgagee all right, title and interest of
Mortgagor in and to the Contracts and all deposits and advance payments made
by Mortgagor thereunder, in substantially the form of Exhibit I hereto;
7.2.5 an assignment of intangible property (the "Assignment of
Intangible Property"), duly executed and acknowledged, assigning and
transferring to Mortgagee those items referred to in Sections 3.1, 3.5, 3.6,
3.7, 3.9 3.10, 3.11 and 3.12 in substantially the form of Exhibit J hereto;
7.2.6 an release to CRF of the tax and insurance escrow account
(the "Tax and Insurance Escrow Account"), which Tax and Insurance Escrow
Account is currently held by CRF, in substantially the form of Exhibit M
hereto;
7.2.7 an assignment of all future refunds from any taxing
authority or insurer with respect to premiums paid for insurance on the
Property (the "Assignment of Future Tax or Insurance Refunds"), (which refunds
Mortgagor shall hold in trust for the benefit of Mortgagee) duly executed and
acknowledged, assigning and transferring to Mortgagee all right title and
interest of Mortgagor in and to all future tax or insurance refunds, in
substantially the form of Exhibit N hereto;
7.2.8 an affidavit executed by Mortgagor stating, under penalty
of perjury, its United States taxpayer identification number and that
Mortgagor is not a "foreign person" as defined in Section 1445(f)(3) of the
Internal Revenue Code of 1986, as amended, and otherwise in the form
prescribed by the Internal Revenue Service;
7.2.9 executed originals of the Existing Leases;
7.2.10 notices to tenants under the Existing Leases of the
sale, in substantially the form of Exhibit C hereto, and to be executed by
Mortgagor;
7.2.11 originals (or copies certified by Mortgagor) of the
Contracts, the Permits and those items specified in Section 3 (to the extent
reduced to writing);
7.2.12 a Statement of Net Cash Flow with respect to the Property,
in the form of Exhibit E hereto;
7.2.13 Intentionally Deleted.
7.2.14 the payment, as of Closing, by wire transfer, in
accordance with the wire instructions as set forth on Exhibit O, of Net Cash
Flow.
7.2.15 a release to CRF of any positive Net Cash Flow in excess
of the Approved Working Reserve ("Excess Net Cash Flow"), pursuant to the
Commitment for Modification of First Deed of Trust Note between CRF and
Mortgagor, dated October 5, 1987, which Excess Net Cash Flow is currently held
by CRF, in substantially the form of Exhibit K hereto;
7.2.16 Intentionally Deleted.
7.2.17 a real estate excise tax affidavit to be filed with the
State of Washington Department of Revenue, duly executed by Mortgagor and
Mortgagee;
7.2.18 an estoppel affidavit duly executed by Mortgagor,
pursuant to the requirements of the Title Company; and
7.2.19 such other documents and instruments as Mortgagee may
reasonably request in order to consummate the transaction herein contemplated.
7.3 Mortgagee's Closing Documentation and Requirements. At or
prior to the Closing, Mortgagee shall deliver the following to Mortgagor:
7.3.1 the Letter of Credit;
7.3.2 the Existing Deed of Trust Note endorsed as cancelled;
7.3.3 an executed and acknowledged copy of the Assignment and
Assumption of Leases, and the Assignment and Assumption of Contracts; and
7.3.4 Litigation Settlement. At Closing, Mortgagee shall
deliver executed copies of all documents relating to the settlement of all
pending litigation matters between Mortgagor, CRF, Jones Lang Wootton Realty
Advisors and Chemical Bank, in substantially the form of Exhibit L hereto.
The Mortgagee shall concurrently deliver a letter to Chemical Bank in the form
annexed as Exhibit Q.
7.3.5 Such other documents and instruments as Mortgagor may
reasonably request in order to effectuate the immediate return to Mortgagor of
any collateral for the Letter of Credit and any collateral for the bond
previously furnished in the pending litigation described in Section 7.3.4.
7.4 Further Assurances. After the Closing, either party
shall, upon the reasonable request of the other party, but at no expense to
it, execute any instruments to confirm, assure or validate the transaction
contemplated by this Agreement.
8. Expenses
8.1 Expenses of Mortgagee. Mortgagee shall pay (a) the
premium for the Title Policy and the cost of all endorsements and any extended
coverage obtained by Mortgagee under the Title Policy; (b) the cost of the
Survey; and (c) all state, county and city transfer taxes with respect to the
transaction contemplated hereby. Mortgagee shall indemnify and hold Mortgagor
harmless from and against all claims, expenses and costs (including reasonable
attorneys' fees) relating to such transfer taxes. The parties shall at their
separate expense cooperate in good faith and in a timely manner with respect
to preparing and delivering submissions, filings and other supporting
documentation required in connection with transfer taxes.
8.2 Attorneys' Fees and Other Expenses. Each party shall pay
its own attorneys' fees and all of its other expenses, except as otherwise
expressly set forth herein.
9. Notices
Any notice, demand, consent, authorization or other
communication (collectively, a "Notice") which either party is required or may
desire to give to or make upon the other party pursuant to this Agreement
shall be effective and valid only if in writing, signed by the party giving
such Notice, to the other party or sent by facsimile transmission with receipt
acknowledged, express courier or delivery service or by registered or
certified mail of the United States Postal Service, return receipt requested,
and addressed to the other party as follows (or to such other address or
person as either party or person entitled to notice may, by notice to the
other specify):
To Mortgagor:
JMB Realty Corporation
900 North Michigan Avenue
Suite 1900
Chicago, Illinois 60611
Attention: Norman Geller,
Senior Vice President
with copies to:
Pircher,
Nichols & Meeks
1999 Avenue of the Stars
Los Angeles, California 90067
Attention: Real Estate Notices
To Mortgagee:
Jones Lang Wootton Realty Advisors
101 East 52nd Street
New York, New York 10022
Attention: Frank L. Sullivan, Jr.,
Managing Director
with copies to:
Common Retirement Fund of
the State of New York
Office of the State Comptroller
270 Broadway
Suite 2300
New York, New York 10007
Attention: Robert J. Steves,
Assistant Deputy Comptroller
and to:
Common Retirement Fund
of the State of New York
Office of the State Comptroller
270 Broadway
Suite 2300
New York, New York 10007
Attention: Marjorie Tsang, Esq.,
Legal Department -
Real Estate Bureau
and to:
Rogers & Wells
200 Park Avenue
New York, New York 10166
Attention: Lewis Bart Stone, Esq.
Fax: (212) 878-8375
and to:
Carney Badley Smith & Spellman
2200 Columbia Center
701 Fifth Avenue
Seattle, Washington 96104-7091
Attention: Stephen C. Sieberson, Esq. and
William M. Wood, Esq.
Unless otherwise specified, Notices shall be deemed given when
received, but if delivery is not accepted, on the earlier of the date delivery
is refused or the fourth day after the same is deposited with the United
States Postal Service.
10. General Provisions
10.1 Successors and Assigns. This Agreement shall bind and
inure to the benefit of the respective successors and permitted assigns of the
parties hereto.
10.2 Gender and Number. Whenever the context so requires, the
singular number shall include the plural and the plural the singular, and the
use of any gender shall include all genders.
10.3 Entire Agreement. This Agreement contains the complete
and entire agreement between the parties respecting the transaction
contemplated herein, and supersedes all prior negotiations, agreements,
representations and understandings, if any, between the parties respecting
such matters.
10.4 Counterparts. This Agreement may be executed in any
number of original counterparts, all of which evidence only one agreement and
only one of which need be produced for any purpose.
10.5 Modifications. This Agreement may not be modified,
discharged or changed in any respect whatsoever, except by a further agreement
in writing duly executed by the parties. However, any consent, waiver,
approval or authorization shall be effective if signed by the party granting
or making such consent, waiver, approval or authorization.
10.6 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York. Mortgagor and
Mortgagee hereby irrevocably agree that all actions or proceedings in any way,
manner or respect, arising out of or from or related to this Agreement shall
be litigated only in courts having situs within the State of New York.
Mortgagor and Mortgagee hereby consent and submit to the jurisdiction of any
state court located within the County of New York or federal court located
within the Southern District of New York. Each party hereby irrevocably
waives any right it may have to transfer or change the venue from New York of
any litigation brought against it by the other party pursuant to this
Agreement. Notwithstanding the foregoing, any documents of conveyance,
assignment or encumbrance relating to the Property shall be governed by the
laws of the State of Washington, excluding its rules relating to the choice of
laws.
10.7 Captions. The captions of this Agreement are for
convenience and reference only, and in no way define, describe, extend or
limit the scope, meaning or intent of this Agreement.
10.8 Severability. The invalidation or unenforceability in any
particular circumstance of any provision of this Agreement shall in no way
affect any of the other provisions hereof, which shall remain in full force
and effect.
10.9 No Joint Venture. This Agreement shall not be construed as
in any way establishing a partnership, joint venture, express or implied
agency, or employer-employee relationship between the parties.
10.10 No Third-Party Beneficiaries. This Agreement is for the
sole benefit of the parties hereto, their respective successors and permitted
assigns, and no other person or entity shall be entitled to rely upon or
receive any benefit from this Agreement or any term hereof.
10.11 Execution. The submission of this Agreement for
examination does not constitute an offer by or to either party. This
Agreement shall be effective and binding only after due execution and delivery
by the parties hereto.
10.12 Exculpation. Notwithstanding anything to the contrary in
this Agreement or in any of the closing documents, neither any present or
future constituent partner in or agent of Mortgagor, nor any shareholder,
officer, director, employee, trustee, beneficiary or agent of any corporation
or trust that is or becomes a constituent partner in Mortgagor shall be
personally liable, directly or indirectly, under or in connection with this
Agreement or any of the closing documents or any other instrument or
certificate executed in connection herewith or the Closing or any amendments
or modifications to any of the foregoing made at this time or times,
heretofore or hereafter; and Mortgagee and each of its successors and assigns
waives any such personal liability. As used herein, a "constituent partner"
in a particular partnership means a partner having an interest in a
partnership that has a direct or indirect interest (through one or more
partnerships) in such particular partnership. In the event of any
inconsistency between the provisions of this Section 10.12 and the provisions
of any closing document, the provisions of this Section 10.12 shall govern.
10.13 Payment of Operating Expenses. Mortgagee agrees to
indemnify and save Mortgagor and Properties harmless from and against any
unpaid operating expenses of the Property as follows:
(a) For operating expenses incurred by or for the
account of Mortgagor in connection with operation of the Property from January
1, 1991 through December 31, 1992, Mortgagee's obligation shall be limited to
an aggregate of $100,000.
(b) For operating expenses incurred by or for the
account of Mortgagor in connection with the operation of the Property from
January 1, 1993 through the Closing, Mortgagee's obligation shall be limited
to an aggregate of One Million Four Hundred Thousand ($1,400,000) Dollars plus
Mortgagee's obligation as landlord under the Seafirst lease dated May 18,
1992, Mortgagee's obligations under the Contracts, Mortgagee's obligations to
pay real estate taxes and Mortgagee's obligation to pay ordinary operating
expenses, usually billed on a monthly basis, incurred in the month of October
1993.
(c) Mortgagee shall have no obligation under this
Section 10.13 (i) for any expense for which an invoice or bill is submitted to
Mortgagor or its agent on or after January 1, 1995 relating to operating
expenses incurred prior to October 22, 1993, or (ii) for any expense incurred
by or any invoice or bill submitted by any affiliate of Mortgagor, except as
expressly provided in Article 6.
(d) Mortgagor shall upon the receipt of any invoice for
operating expenses which are to be paid by Mortgagee hereunder, promptly
submit the same for payment to Mortgagee, and shall at Mortgagee's request
provide such information as it or its affiliates may have as may be reasonably
necessary to determine the propriety of such bill and shall cooperate with
Mortgagee in connection with any dispute of any such bill which Mortgagee
reasonably decides to dispute, but shall not be obligated to incur any out-of-
pocket expense. Mortgagor shall and shall cause its affiliates to preserve
records kept by them to enable Mortgagee to ascertain the validity of bills to
which this section applies and to enable Mortgagee to object thereto in proper
circumstances. To the extent Mortgagee shall not have given notice on or
before April 1, 1995 as to any record or information pertaining to a bill to
which this section may apply, Mortgagor's obligation to maintain such records
hereunder shall expire.
(e) Mortgagee shall hold Mortgagor harmless from any
expenses, costs or liabilities (including reasonable legal fees) relating to
any failure to carry out Mortgagee's obligations under this Section 10.13.
10.14 Survival. The provisions of Article 4, Sections 7.2.19,
7.3.5, 7.4 and Articles 8, 9 and 10 shall survive the Closing.
10.15 Tenants' Tax Refunds. To the extent a tenant of the
Property shall become entitled, pursuant to its lease to any portion of a tax
refund which refund has been released pursuant to Exhibit N, Mortgagee shall
indemnify and hold harmless Mortgagor and Properties (including reasonable
legal fees) from any claims of such tenant against Mortgagor or Properties
with respect thereto.
IN WITNESS WHEREOF, the parties have caused this instrument to
be executed as of the date first above written.
MORTGAGOR:
1001 FOURTH AVENUE ASSOCIATES
an Illinois general partnership
By: Carlyle Real Estate Limited
Partnership - XIII,
Managing General Partner
By: JMB Realty Corporation,
Corporate General Partner of
Carlyle Real Estate Limited
Partnership - XIII
By:
Julie A. Strocchia
Its: Vice President
MORTGAGEE:
SEAFO, INC.
By:
Its:
Agreed:
JMB PROPERTIES COMPANY
By: __________________________
Julie A. Strocchia
Its: Vice President
EXHIBIT A
LEGAL DESCRIPTION
[TO BE ATTACHED]
EXHIBIT B
CONTRACTS
1. Agreement for Provision of Security Services dated September 1, 1983,
between 1001 Fourth Avenue Associates, as Owner, and Seattle-First National
Bank, as Contractor;
2. Vertical Transportation Contract, dated July 1, 1992, between 1001
Fourth Avenue Associates, as Owner, and Schindler Elevator Corporation, as
Contractor;
3. Modernization/Repair Contract and all Supplemental Proposals thereto,
dated October 6, 1992, between 1001 Fourth Avenue Associates, by JMB
Properties Company, as agent, and Schindler Elevator Corporation;
4. Master Agreement, dated May 31, 1991, as amended by the Master Agreement
Extension and Amendment Agreement No. 1, dated December 30, 1992, between
Turner Construction Company, as Contractor, and JMB Properties Company, as
agent for the property owner;
5. Work/Construction Agreement, dated August 20, 1993, between 1001 Fourth
Avenue Associates, as Owner, and Auburn Mechanical, Inc., as Contractor;
6. Settlement and Mutual Release of All Claims, dated September 16, 1993,
between 1001 Fourth Avenue Associates, by and through JMB Properties Company,
its agent, the Municipality of Metropolitan Seattle, Mortrude Floor Company
and Tri-State Construction, Inc.;
7. Continuing Service Agreement, dated, August 20, 1993, between 1001
Fourth Avenue Associates by JMB Properties Company, as agent, and P&G Plant
Company; and
8. Property Operation and Maintenance Agreement, dated March 23, 1993,
between JMB Properties Company, as agent for the property owner, and Urban
Engineering Co., as Contractor.
9. Work Construction Agreement, dated April 5, 1993, between 1001 Fourth
Avenue Associates, as Owner, and Aluminum and Bronze Fabricators, Inc., as
Contractor.
EXHIBIT C
NOTICES TO EXISTING TENANTS
November 1, 1993
BY CERTIFIED MAIL
RETURN RECEIPT REQUESTED
All Tenants of 1001 Fourth Avenue
Seattle, Washington
Re: 1001 Fourth Avenue
Seattle, Washington
Gentlemen and Ladies:
Please take notice that the property known as 1001 Fourth Avenue,
Seattle, Washington (the "Property") has been conveyed on the date hereof to
Seafo, Inc. ("Purchaser"), and, simultaneously herewith, 1001 Fourth Avenue
Associates ("Owner") has assigned to Purchaser all of Owner's interest in your
lease at the Property.
All future rental or other payments under your lease (including
any payments now due or overdue) should be made payable to Purchaser until you
are otherwise directed by Purchaser and should be sent to:
Seafo, Inc.
P.O. Box 34936
Department 4002
Seattle, Washington
98124-1936
Furthermore, please be advised (i) that any security deposit under
your lease has been transferred to Purchaser; and (ii) that Seafo, Inc. should
be added as an additional insured to the insurance policies which you are
required to carry under your lease.
Thank you for your cooperation in this matter.
Sincerely,
1001 FOURTH AVENUE ASSOCIATES
By_____________________________
Name:
Title:
EXHIBIT D
Pending Leases
1. Cowan & Kerr
2. Palmer Groth & Pietka
3. Schwabe Law Firm
4. Nippon Kaiji Kyokai
5. Kobe Trade Information Office
6. Sinsheimer Meltzer Inc.
EXHIBIT E
STATEMENT OF NET CASH FLOW
[TO BE ATTACHED]
EXHIBIT F
DEED
Filed for Record at Request of:
Rogers & Wells
200 Park Avenue
New York, New York 10166
Attention: Lewis Bart Stone, Esq.
QUIT CLAIM DEED IN LIEU OF FORECLOSURE
The Grantor, 1001 Fourth Avenue Associates, an Illinois general
partnership, for and in consideration of the sum of Ten Dollars ($10.00) and
other good and valuable consideration, and in lieu of foreclosure of the
below-mentioned Deed of Trust, conveys and quit claims to Seafo, Inc., a
Delaware corporation, the following described real estate, situated in the
County of King, State of Washington (the "Property"):
See Exhibit A attached.
This deed is an absolute conveyance of title in effect as well as
in form, and is not intended as a mortgage, trust conveyance, or security of
any kind. Consideration for this deed consists of full release of the Grantor
from all debts and obligations of Grantor as secured by the deed of trust on
the Property dated April 26, 1984 and recorded on the same date under
Recording No. 8404260342, Records of King County, Washington, as modified by a
Modification of Deed of Trust dated October 5, 1987 and recorded November 17,
1987 under Recording No. 8711171151, Records of King County, Washington (the
"Deed of Trust"). This deed fully satisfies the indebtedness of the Deed of
Trust and terminates in all respects the Deed of Trust, the note secured
thereby, and all related security documents.
DATED this ___, day of October, 1993.
1001 FOURTH AVENUE ASSOCIATES
an Illinois general partnership
By: Carlyle Real Estate Limited
Partnership - XIII,
Managing General Partner
By: JMB Realty Corporation,
Corporate General Partner of
Carlyle Real Estate Limited
Partnership - XIII
By:
Authorized Signatory
Its:
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the ______ day of October, 1993, before me personally came
sworn, Julie A. Strocchia, did depose and say that she resides at 900 North
Michigan Avenue, Chicago, Illinois; that she is the Vice President of JMB
REALTY CORPORATION, the corporation described in and which executed the
foregoing instrument as a general partner of CARLYLE REAL ESTATE LIMITED
PARTNERSHIP - XIII, as a general partner of 1001 FOURTH AVENUE ASSOCIATES; and
that she signed her name there by like order.
_________________________
Notary Public
My Commission expires: ___________________.
City of Residence: _______________________.
EXHIBIT G
BILL OF SALE
This Bill of Sale is made as of this ____ day of November, 1993 by
1001 FOURTH AVENUE ASSOCIATES, an Illinois general partnership ("Mortgagor")
to SEAFO, INC., a Delaware corporation ("Mortgagee"). Terms not otherwise
defined herein shall have the same meanings as set forth in that certain
Agreement For the Delivery of a Deed in Lieu of Foreclosure dated as of
October 29, 1993, between Mortgagor and Mortgagee.
WITNESSETH, that Mortgagor, for and in consideration of the sum of
Ten Dollars ($10.00) and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, does hereby ASSIGN, TRANSFER
and DELIVER to Mortgagee all appliances, apparatus, fixtures, equipment
(including, without limitation, all heating, ventilating, incinerating,
lighting, plumbing, electrical and air-conditioning fixtures and equipment),
machinery, fittings and other articles of personal property now situate in or
on or attached to the Building Complex (collectively, the "Personal
Property"). Notwithstanding the foregoing, the term "Personal Property" shall
exclude all such above listed items to the extent owned by tenants under the
Existing Leases or by parties other than Mortgagor under the Contracts.
TO HAVE AND TO HOLD the Personal Property unto Mortgagee, its
successors and assigns, forever. And the Mortgagor shall warrant and defend
the title to the Personal Property unto Mortgagee, its successors and assigns
forever against the lawful claims of all persons and entities claiming by,
through or under Mortgagor.
IN WITNESS WHEREOF, the parties have caused this instrument to be
duly executed as of the date and year first above written.
MORTGAGOR:
1001 FOURTH AVENUE ASSOCIATES
an Illinois general partnership
By: Carlyle Real Estate Limited
Partnership - XIII,
Managing General Partner
By: JMB Realty Corporation, Corporate
General Partner of Carlyle Real Estate
Limited Partnership - XIII
By: ______________________
Julie Strocchia
Vice President
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the day of November, 1993, before me personally came Julie
Strocchia, to me known, who, being by me duly sworn, did depose and say that
she resides at 900 North Michigan Avenue, Chicago, Illinois; that she is the
Vice President of JMB REALTY CORPORATION, the corporation described in and
which executed the foregoing instrument as a general partner of CARLYLE REAL
ESTATE LIMITED PARTNERSHIP - XIII, as a general partner of 1001 FOURTH AVENUE
ASSOCIATES; and that she signed her name there by like order.
Notary Public
My Commission expires: .
City of Residence: .
EXHIBIT H
RECORD AND RETURN TO:
Rogers & Wells
200 Park Avenue
New York, New York 10166
Attn: Lewis Bart Stone, Esq.
ASSIGNMENT AND ASSUMPTION OF LEASES AND RENTS
This Assignment and Assumption of Leases, made as of this 1st day
of November, 1993 between 1001 FOURTH AVENUE ASSOCIATES, an Illinois general
partnership ("Assignor") and SEAFO, INC., a Delaware corporation ("Assignee").
WITNESSETH, that Assignor, for and in consideration of the sum of
Ten Dollars ($10.00) and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, does hereby ASSIGN,
TRANSFER, AND CONVEY unto Assignee, its successors and assigns, all right,
title and interest of Assignor in, to and under all existing leases, together
with all security deposits, advance rentals and other advance payments payable
by tenants thereunder (collectively, the "Leases") demising portions of the
improvements located on the real property described in Exhibit "A" attached
hereto.
TO HAVE AND TO HOLD the Leases, together with all rights and
privileges thereunto belonging unto Assignee, its successors and assigns,
including, without limitation, all security deposits, any documents or
instruments securing the obligations of the tenants thereunder and advance
rentals paid for the month of November, 1993 or thereafter and other advance
payments made or given thereunder, for and during the remainder of the terms
of the Leases, as well as all rents received by Assignor on or after October
23, 1993.
Assignee does hereby covenant to and agree with Assignor that
Assignee accepts the foregoing assignment and assumes all of the terms,
covenants and provisions of the Leases on the part of Assignee thereunder to
be performed and arising or accruing on and after the date hereof.
This Assignment and Assumption of Leases shall be governed by and
construed in accordance with the internal laws of the State of Washington
without regard to principles of conflict of law.
IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be duly executed as of the day and year first above written.
ASSIGNOR:
1001 FOURTH AVENUE ASSOCIATES
an Illinois general partnership
By: Carlyle Real Estate Limited
Partnership - XIII,
Managing General Partner
By: JMB Realty Corporation,
Corporate General Partner of
Carlyle Real Estate Limited
Partnership - XIII
By:
Julie Strocchia
Vice President
ASSIGNEE:
SEAFO, INC.
By:
Its:
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the day of November, 1993, before me personally came Julie
Strocchia, to me known, who, being by me duly sworn, did depose and say that
she resides at 900 North Michigan Avenue, Chicago, Illinois; that she is the
Vice President of JMB REALTY CORPORATION, the corporation described in and
which executed the foregoing instrument as a general partner of CARLYLE REAL
ESTATE LIMITED PARTNERSHIP - XIII, as a general partner of 1001 FOURTH AVENUE
ASSOCIATES; and that she signed her name there by like order.
Notary Public
My Commission expires: .
City of Residence: .
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the day of November, 1993, before me personally came
, to me known, who, being by me duly sworn, did depose
and say that he resides at ; that he
is the of SEAFO, INC., the corporation described in
and which executed the foregoing instrument; and that he signed his name there
by like order.
Notary Public
My Commission expires: .
City of Residence: .
EXHIBIT I
RECORD AND RETURN TO:
Rogers & Wells
200 Park Avenue
New York, New York 10166
Attn: Lewis Bart Stone, Esq.
ASSIGNMENT AND ASSUMPTION OF CONTRACTS
This Assignment and Assumption of Contracts made as of this ____
day of November, 1993, between 1001 FOURTH AVENUE ASSOCIATES, an Illinois
general partnership ("Assignor"), and SEAFO, INC., a Delaware corporation
("Assignee").
WITNESSETH, that Assignor, for and in consideration of the sum of
Ten Dollars ($10.00) and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, does hereby ASSIGN,
TRANSFER, AND CONVEY unto Assignee, its successors and assigns, all right,
title and interest of Assignor in, to and under those certain service,
maintenance and other contracts and agreements and equipment and other leases
(excluding space leases) more fully described in Exhibit "A" attached hereto
and made a part hereof (collectively, the "Contracts") with respect to the
improvements and personal property located on the real property described in
Exhibit "B" attached hereto.
TO HAVE AND TO HOLD the Contracts, together with all rights and
privileges thereunto belonging and all transferable or assignable deposits
made by Assignor thereunder, unto Assignee, its successors and assigns, for
and during the remainder of the terms of the Contracts.
Assignee does hereby covenant to and agree with Assignor that
Assignee accepts the foregoing assignment and assumes all of the terms,
covenants and provisions of the Contracts on the part of Assignee thereunder
to be performed or complied with and arising or accruing on and after the date
hereof.
This Assignment and Assumption of Contracts shall be governed by
and construed in accordance with the internal laws of the State of Washington
without regard to principles of conflict of law.
IN WITNESS WHEREOF, the parties have caused this instrument to be
duly executed as of the day and year first above written.
ASSIGNOR:
1001 FOURTH AVENUE ASSOCIATES
an Illinois general partnership
By: Carlyle Real Estate Limited Partnership - XIII
Managing General Partner
By: JMB Realty Corporation,
Corporate General Partner of Carlyle
Real Estate Limited Partnership - XIII
By:
Julie Strocchia
Vice President
ASSIGNEE:
SEAFO, INC.
By:
Its:
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the day of November, 1993, before me personally came Julie
Strocchia, to me known, who, being by me duly sworn, did depose and say that
she resides at 900 North Michigan Avenue, Chicago, Illinois; that she is the
Vice President of JMB REALTY CORPORATION, the corporation described in and
which executed the foregoing instrument as a general partner of CARLYLE REAL
ESTATE LIMITED PARTNERSHIP - XIII, as a general partner of 1001 FOURTH AVENUE
ASSOCIATES; and that she signed her name there by like order.
Notary Public
My Commission expires: .
City of Residence: .
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the day of November, 1993, before me personally came
, to me known, who, being by me duly sworn, did depose
and say that he resides at ; that he
is the of SEAFO, INC., the corporation described in
and which executed the foregoing instrument; and that he signed his name there
by like order.
Notary Public
My Commission expires: .
City of Residence: .
EXHIBIT J
ASSIGNMENT OF INTANGIBLE PROPERTY
WITNESSETH, that 1001 FOURTH AVENUE ASSOCIATES, an Illinois
general partnership (collectively, "Assignor"), for and in consideration of
the sum of Ten Dollars ($10.00) and other good and valuable consideration to
it in hand paid by SEAFO, INC., a Delaware corporation ("Assignee"), the
receipt and sufficiency of which are hereby acknowledged, has ASSIGNED,
TRANSFERRED, SET OVER, DELIVERED AND CONVEYED and by these presents does
hereby ASSIGN, TRANSFER, SET OVER, DELIVER AND CONVEY unto Assignee, its
successors and assigns all right, title and interest of Assignor in and to all
of the following (hereinafter collectively referred to as the "Assigned
Property") to the extent that the same apply to that certain real property
described in "Exhibit A" attached hereto and the improvements located thereon
and subject to the terms and conditions of that certain Agreement for the
Delivery of a Deed In Lieu of Foreclosure dated as of October 29, 1993,
between Assignor and Assignee (the "Agreement") (all capitalized terms not
otherwise defined herein shall have the meaning as set forth in the
Agreement):
(1) the certificates of occupancy with respect to the
Improvements and, to the extent maintained by or on behalf of Assignor, all
other transferable licenses, certificates and permits issued by any
governmental or quasi-governmental authority with respect to the Property or
the use, maintenance and operations thereof;
(2) all architectural, mechanical, engineering and other plans
and specifications within Assignor's possession or subject to its control
relating to the completed construction or renovation of or other work at the
Building Complex and any unexpired warranties, guaranties or sureties in favor
of Assignor with respect thereto;
(3) all promotional advertising literature and materials,
catalogs, booklets and manuals relating to the Property or the use, operation
or maintenance thereof;
(4) all intangible personal property relating to the ownership,
construction, renovation, operation and leasing of the Property, including,
without limitation, the good will pertaining thereto;
(5) all environmental reports, asbestos reports and files
relating to asbestos work within Assignor's possession;
(6) all accounting, financial and operating information located
at the Property;
(7) the Order Granting Summary Judgment Against UCAQ
International, Inc., as entered as Case No. 92-2-13158-7, and entitled 1001
Fourth Avenue Associates, a corporation, Plaintiff v. UCAQ International,
Inc., a corporation, and Masao Matsumoto, an individual and the marital
community thereof, Defendants, in the Superior Court of the State of
Washington for King County;
(8) the Default Judgment against Masao Matsumoto, as entered as
Case No. 92-2-13158-7, in the Superior Court of the State of Washington for
King County;
(9) the Judgment and Order Directing Issuance of Writ of
Restitution, as entered as Case No. 90-2-21313-7, and entitled 1001 Fourth
Avenue Associates, an Illinois General Partnership, Plaintiff v. Mirabeau,
Inc., a Washington corporation, Defendant, in the Superior Court of the State
of Washington in and for the County of King;
(10) the First Amended Complaint For Unlawful Detainer, as
entered as Case No. 93-2-23702-2, and entitled 1001 Fourth Avenue Associates,
an Illinois general partnership, Plaintiff, v. Trans Pacific Stores, Ltd., a
corporation, Defendant, in the Superior Court of the State of Washington in
and for the County of King; and
(11) all transferable or assignable warranties, guaranties,
contract rights and miscellaneous rights, if any, with respect to the
Property, including any of the property described in items (1) through (10)
above.
TO HAVE AND TO HOLD the Assigned Property, together with all
rights and privileges thereunto belonging unto Assignee, its successors and
assigns, forever.
This Assignment of Intangible Property shall be governed by and
construed in accordance with the internal laws of the State of Washington
without regard to principles of conflict of law.
EXECUTED AND DELIVERED this day of November, 1993.
ASSIGNOR:
1001 FOURTH AVENUE ASSOCIATES
an Illinois general partnership
By: Carlyle Real Estate Limited
Partnership - XIII,
Managing General Partner
By: JMB Realty Corporation,
Corporate General Partner
of Carlyle Real Estate
Limited Partnership - XIII
By: _________________________
Julie Strocchia
Vice President
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the day of November, 1993, before me personally came Julie
Strocchia, to me known, who, being by me duly sworn, did depose and say that
she resides at 900 North Michigan Avenue, Chicago, Illinois; that she is the
Vice President of JMB REALTY CORPORATION, the corporation described in and
which executed the foregoing instrument as a general partner of CARLYLE REAL
ESTATE LIMITED PARTNERSHIP - XIII, as a general partner of 1001 FOURTH AVENUE
ASSOCIATES; and that she signed her name there by like order.
Notary Public
My Commission expires: .
City of Residence: .
EXHIBIT K
RELEASE OF EXCESS NET CASH FLOW
1001 FOURTH AVENUE ASSOCIATES
c/o JMB Realty Corporation
900 North Michigan Avenue
Suite 1900
Chicago, Illinois 60611
November 1, 1993
Common Retirement Fund of
the State of New York
Office of the State Comptroller
270 Broadway
New York, NY 10007
Gentlemen:
Reference is made to that certain Agreement for the Delivery of a
Deed In Lieu of Foreclosure dated as of October 29, 1993 between 1001 Fourth
Avenue Associates, as Mortgagor, and Seafo, Inc., as Mortgagee (the
"Agreement"). All capitalized terms used herein which are not otherwise
defined herein shall have the respective meanings ascribed to them in the
Agreement.
This letter shall confirm our understanding, that pursuant to
Mortgagor's closing requirements under Section 7.2.15 of the Agreement, the
undersigned, JMB Realty Corporation ("JMB"), hereby releases to the Common
Retirement Fund of the State of New York ("CRF") and hereafter shall have no
future claim, right or title to any positive Net Cash Flow in excess of the
Approved Working Reserve ("Excess Net Cash Flow"), as such term is defined in
the Commitment for Modification of First Deed of Trust Note between CRF and
Mortgagor, dated October 5, 1987. Such Excess Net Cash Flow is currently
being held by CRF.
Very truly yours,
1001 FOURTH AVENUE ASSOCIATES
an Illinois general partnership
By: Carlyle Real Estate Limited
Partnership - XIII,
Managing General Partner
By: JMB Realty Corporation,
Corporate General Partner of
Carlyle Real Estate Limited
Partnership - XIII
By: _____________________________
Julie Strocchia
Vice President
EXHIBIT L
LITIGATION SETTLEMENT DOCUMENTS
SUPREME COURT OF THE STATE OF NEW YORK
APPELLATE DIVISION - FIRST DEPARTMENT
- - - - - - - - - - - - - - - - - - - - -x
1001 FOURTH AVENUE ASSOCIATES,
Plaintiff/Appellant/Cross-Respondent,
- against -
JONES LANG WOOTTON REALTY ADVISORS, and
COMPTROLLER OF THE STATE OF NEW YORK
AS TRUSTEE OF THE COMMON RETIREMENT
FUND OF THE STATE OF NEW YORK,
Defendants/Respondents/Cross-Appellants,
- and -
:
:
:
:
:
:
:
:
:
New York County
Clerk's Index No.
30222/92
STIPULATION
WITHDRAWING APPEALS
AND CROSS-APPEAL
CHEMICAL BANK,
Defendant/Respondent.
:
:- - - - - - - - - - - - - - - - - - - -x
IT IS HEREBY STIPULATED, by and between the parties hereto,
through their undersigned counsel, that each appeal and cross-appeal taken in
this action is, and the same hereby are, withdrawn and dismissed with
prejudice, each party to bear its own costs, expenses and attorneys' fees.
Dated: New York, New York
October __, 1993
_____________________________ _______________________
OBER, KALER, GRIMES & SHRIVER ROGERS & WELLS
Attorneys for 1001 Fourth Avenue Attorneys for Jones Lang
Associates Wootton Realty Advisors
1345 Avenue of the Americas and
New York, New York 10105 Comptroller of The State of
212-315-3200 New York as Trustee of The
Common Retirement Fund of
The State of New York
200 Park Avenue
New York, New York 10166
212-878-8000
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
- - - - - - - - - - - - - - - - - - - - -x
1001 FOURTH AVENUE ASSOCIATES,
Plaintiff,
- against -
JONES LANG WOOTTON REALTY ADVISORS,
COMPTROLLER OF THE STATE OF NEW YORK AS
TRUSTEE OF THE COMMON RETIREMENT FUND OF
THE STATE OF NEW YORK and CHEMICAL BANK,
Defendants.
:
:
:
:
:
:
:Index No. 30222/92
Hon. Burton S. Sherman
IAS Part 19
STIPULATION AND ORDER
DISCONTINUING ACTION
WITH PREJUDICE - - - - - - - - - - - - - - - - - - - -x
IT IS HEREBY STIPULATED AND AGREED, by and among the parties
hereto, through their undersigned counsel, that all claims of the plaintiff
against all defendants in this action, and all claims of defendants against
the bond posted in this action by or on behalf of the plaintiff, are hereby
discontinued with prejudice, each party to bear its own costs, expenses and
attorneys' fees.
Dated: New York, New York
October , 1993
_____________________________ _______________________
OBER, KALER, GRIMES & SHRIVER ROGERS & WELLS
Attorneys for 1001 Fourth Avenue Attorneys for Jones Lang
Associates Wootton Realty Advisors
1345 Avenue of the Americas and
New York, New York 10105 Comptroller of The State of
212-315-3200 New York as Trustee of The
Common Retirement Fund of
The State of New York
200 Park Avenue
New York, New York 10166
212-878-8000
Page 1 of 2
CHEMICAL BANK LEGAL DEPARTMENT
By:___________________________
Andrew N. Keen, Esq.
Attorneys for Defendant
Chemical Bank
270 Park Avenue - 39th Floor
New York, New York 10017
212-270-0088
SO ORDERED:
Justice Burton S. Sherman
October __, 1993
Page 2 of 2
EXHIBIT M
RELEASE OF TAX AND INSURANCE ESCROW ACCOUNT
1001 FOURTH AVENUE ASSOCIATES
c/o JMB Realty Corporation
900 North Michigan Avenue
Suite 1900
Chicago, Illinois 60611
November 1, 1993
Common Retirement Fund of
the State of New York
Office of the State Comptroller
270 Broadway
New York, NY 10007
Gentlemen:
Reference is made to that certain Agreement for the Delivery of a
2Deed In Lieu of Foreclosure dated as of October 29, 1993 between 1001 Fourth
Avenue Associates, as Mortgagor, and Seafo, Inc., as Mortgagee (the
"Agreement"). All capitalized terms used herein which are not otherwise
defined herein shall have the respective meanings ascribed to them in the
Agreement.
This letter shall confirm our understanding, that pursuant to
Mortgagor's closing requirements under Section 7.2.6 of the Agreement, the
undersigned, JMB Realty Corporation ("JMB"), hereby releases to the Common
Retirement Fund of the State of New York ("CRF") and hereafter shall have no
future claim, right or title to that certain tax and insurance escrow account
relating to the Property (the "Tax and Insurance Escrow Account"). The Tax
and Insurance Escrow Account is currently being held by CRF.
Very truly yours,
1001 FOURTH AVENUE ASSOCIATES
an Illinois general partnership
By: Carlyle Real Estate Limited
Partnership - XIII,
Managing General Partner
By: JMB Realty Corporation,
Corporate General Partner of
Carlyle Real Estate Limited
Partnership - XIII
By: _____________________________
Julie Strocchia
Vice President
EXHIBIT N
ASSIGNMENT OF FUTURE TAX OR INSURANCE REFUNDS
WITNESSETH, that 1001 FOURTH AVENUE ASSOCIATES, an Illinois
general partnership (collectively, "Assignor"), for and in consideration of
the sum of Ten Dollars ($10.00) and other good and valuable consideration to
it in hand paid by SEAFO, INC., a Delaware corporation ("Assignee"), the
receipt and sufficiency of which are hereby acknowledged, has ASSIGNED,
TRANSFERRED, SET OVER, DELIVERED AND CONVEYED and by these presents does
hereby ASSIGN, TRANSFER, SET OVER, DELIVER AND CONVEY unto Assignee, its
successors and assigns all right, title and interest of Assignor in and to all
of the following (hereinafter collectively referred to as the "Assigned
Property") to the extent that the same apply to that certain real property
described in "Exhibit A" attached hereto and the improvements located thereon
and subject to the terms and conditions of that certain Agreement for the
Delivery of a Deed In Lieu of Foreclosure dated as of October 29, 1993,
between Assignor and Assignee (the "Agreement") (all capitalized terms not
otherwise defined herein shall have the meaning as set forth in the
Agreement):
(1) all future refunds from any taxing
authority (which refunds Assignor shall hold in trust for the benefit of
Assignee); and
(2) all future refunds from any insurer with
respect to premiums paid for insurance on the Property (which refunds Assignor
shall hold in trust for the benefit of Assignee).
TO HAVE AND TO HOLD the Assigned Property, together with all
rights and privileges thereunto belonging unto Assignee, its successors and
assigns, forever.
This Assignment of Future Tax or Insurance Refunds shall be
governed by and construed in accordance with the internal laws of the State of
Washington without regard to principles of conflict of law.
EXECUTED AND DELIVERED this day of November, 1993.
ASSIGNOR:
1001 FOURTH AVENUE ASSOCIATES
an Illinois general partnership
By: Carlyle Real Estate Limited
Partnership - XIII,
Managing General Partner
By: JMB Realty Corporation,
Corporate General Partner
of Carlyle Real Estate
Limited Partnership-XIII
By: _________________________
Julie Strocchia
Vice President
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the day of November, 1993, before me personally came Julie
Strocchia, to me known, who, being by me duly sworn, did depose and say that
she resides at 900 North Michigan Avenue, Chicago, Illinois; that she is the
Vice President of JMB REALTY CORPORATION, the corporation described in and
which executed the foregoing instrument as a general partner of CARLYLE REAL
ESTATE LIMITED PARTNERSHIP - XIII, as a general partner of 1001 FOURTH AVENUE
ASSOCIATES; and that she signed her name there by like order.
Notary Public
My Commission expires: .
City of Residence: .
EXHIBIT O
WIRE INSTRUCTIONS
[TO BE ATTACHED]
EXHIBIT P
SITE EMPLOYEES
EXHIBIT Q
LETTER TO CHEMICAL BANK
State of New York
Office of the State Comptroller
Albany, New York 12236
October 29, 1993
Mr. Anthony Capasso
Vice President
Chemical Bank
Letter of Credit
Department
55 Water Street - Room 1708
New York, New York 10017
Re: Chemical Bank Letter of Credit No. C-237248,
dated November 9, 1987, as amended
and
The action entitled: 1001 Fourth Avenue Associates vs.
Jones Lang, et al., Index No. 30222/92, pending in the Supreme Court of the
State of New York for the County of New York
Dear Mr. Capasso:
In connection with the above letter of credit issued to the benefit of
the New York State Employees Retirement System (the "Credit"), this is to
advise Chemical Bank that all drawings on the Credit, including the drawing
submitted on or about November 6, 1992 by Jones Lang Wootton Realty Advisors
("JLW"), are hereby withdrawn, and the undersigned acknowledges that the
Credit has expired and that there will not be any further drawings on the
Credit. The documents presented to Chemical Bank by JLW with respect to the
Credit should please be returned to the undersigned.
Very truly yours,
COMPTROLLER OF THE STATE OF
NEW YORK AS TRUSTEE OF THE
COMMON RETIREMENT FUND
By:_________________________
John E. Hull
Deputy Comptroller, Division of
Investments and Cash Management
AGREEMENT FOR THE DELIVERY OF A DEED IN LIEU OF FORECLOSURE
BETWEEN
1001 FOURTH AVENUE ASSOCIATES
MORTGAGOR
and
SEAFO, INC.
MORTGAGEE
1001 FOURTH AVENUE PLAZA BUILDING
SEATTLE, WASHINGTON
Dated: as of October 29, 1993
AGREEMENT FOR THE DELIVERY OF
A DEED IN LIEU OF FORECLOSURE
BETWEEN
1001 FOURTH AVENUE ASSOCIATES
MORTGAGOR
and
SEAFO, INC.
MORTGAGEE
TABLE OF CONTENTS
Article Page
1. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Agreement to Convey. . . . . . . . . . . . . . . . . . . . . . . . . 3
3. Other Property Included in the Conveyance. . . . . . . . . . . . . . 4
4. Release. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
5. Mortgagee's Inspection of the Property . . . . . . . . . . . . . . . 5
6. Brokerage, Management and Site Personnel . . . . . . . . . . . . . . 5
7. Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
8. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
9. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
10. General Provisions . . . . . . . . . . . . . . . . . . . . . . . . . 11
EXHIBITS
A - Legal Description
B - Contracts
C - Notices to Existing Tenants
D - Pending Leases
E - Statement of Net Cash Flow
F - Deed
G - Bill of Sale
H - Assignment and Assumption of Leases
I - Assignment and Assumption of Contracts
J - Assignment of Intangible Property
K - Release of Excess Net Cash Flow
L - Litigation Settlement Documents
M - Release of Tax and Insurance Escrow Account
N - Assignment of Future Tax or Insurance Refunds
O - Wire Instructions
P - Site Employees
Q - Letter to Chemical Bank
BILL OF SALE
This Bill of Sale is made as of this 1st day of November, 1993
by 1001 FOURTH AVENUE ASSOCIATES, an Illinois general partnership
("Mortgagor") to SEAFO, INC., a Delaware corporation ("Mortgagee"). Terms not
otherwise defined herein shall have the same meanings as set forth in that
certain Agreement For the Delivery of a Deed in Lieu of Foreclosure dated as
of October 29th, 1993, between Mortgagor and Mortgagee.
WITNESSETH, that Mortgagor, for and in consideration of the sum
of Ten Dollars ($10.00) and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, does hereby ASSIGN, TRANSFER
and DELIVER to Mortgagee all appliances, apparatus, fixtures, equipment
(including, without limitation, all heating, ventilating, incinerating,
lighting, plumbing, electrical and air-conditioning fixtures and equipment),
machinery, fittings and other articles of personal property now situate in or
on or attached to the Building Complex (collectively, the "Personal
Property"). Notwithstanding the foregoing, the term "Personal Property" shall
exclude all such above listed items to the extent owned by tenants under the
Existing Leases or by parties other than Mortgagor under the Contracts.
TO HAVE AND TO HOLD the Personal Property unto Mortgagee, its
successors and assigns, forever. And the Mortgagor shall warrant and defend
the title to the Personal Property unto Mortgagee, its successors and assigns
forever against the lawful claims of all persons and entities claiming by,
through or under Mortgagor.
IN WITNESS WHEREOF, the parties have caused this instrument to
be duly executed as of the date and year first above written.
MORTGAGOR:
1001 FOURTH AVENUE ASSOCIATES
an Illinois general partnership
By: Carlyle Real Estate Limited
Partnership - XIII,
Managing General Partner
By: JMB Realty Corporation, Corporate General
Partner of Carlyle Real Estate
Limited Partnership - XIII
By:
--------------------------
Julie A. Strocchia
Its: Vice President
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 1st day of November, 1993, before me personally came
JULIE A. STROCCHIA, to me known, who, being by me duly sworn, did depose and
say that she resides at 900 North Michigan Avenue, Chicago, Illinois; that she
is the Vice President of JMB REALTY CORPORATION, the corporation described in
and which executed the foregoing instrument as a general partner of CARLYLE
REAL ESTATE LIMITED PARTNERSHIP - XIII, as a general partner of 1001 FOURTH
AVENUE ASSOCIATES; and that she signed her name there by like order.
------------------------------
Notary Public
My Commission expires:
--------------
City of Residence:
------------------
RECORD AND RETURN TO:
Rogers & Wells
200 Park Avenue
New York, New York 10166
Attn: Lewis Bart Stone, Esq.
ASSIGNMENT AND ASSUMPTION OF CONTRACTS
This Assignment and Assumption of Contracts made as of this 1st
day of November, 1993, between 1001 FOURTH AVENUE ASSOCIATES, an Illinois
general partnership ("Assignor"), and SEAFO, INC., a Delaware corporation
("Assignee").
WITNESSETH, that Assignor, for and in consideration of the sum
of Ten Dollars ($10.00) and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, does hereby ASSIGN,
TRANSFER, AND CONVEY unto Assignee, its successors and assigns, all right,
title and interest of Assignor in, to and under those certain service,
maintenance and other contracts and agreements and equipment and other leases
(excluding space leases) more fully described in Exhibit "A" attached hereto
and made a part hereof (collectively, the "Contracts") with respect to the
improvements and personal property located on the real property described in
Exhibit "B" attached hereto.
TO HAVE AND TO HOLD the Contracts, together with all rights and
privileges thereunto belonging and all transferable or assignable deposits
made by Assignor thereunder, unto Assignee, its successors and assigns, for
and during the remainder of the terms of the Contracts.
Assignee does hereby covenant to and agree with Assignor that
Assignee accepts the foregoing assignment and assumes all of the terms,
covenants and provisions of the Contracts on the part of Assignee thereunder
to be performed or complied with and arising or accruing on and after the date
hereof.
This Assignment and Assumption of Contracts shall be governed by
and construed in accordance with the internal laws of the State of Washington
without regard to principles of conflict of law.
IN WITNESS WHEREOF, the parties have caused this instrument to
be duly executed as of the day and year first above written.
ASSIGNOR:
1001 FOURTH AVENUE ASSOCIATES
an Illinois general partnership
By: Carlyle Real Estate Limited Partnership
- - XIII,
Managing General Partner
By: JMB Realty Corporation,
Corporate General Partner of
Carlyle Real Estate Limited Partnership - XIII
By: _________________________
Julie A. Strocchia
Its: Vice President
ASSIGNEE:
SEAFO, INC.
By: __________________________________
Its: _____________________________
STATE OF NEW YORK)
) ss.:
COUNTY OF NEW YORK )
On the 1st day of November, 1993, before me personally came JULIE
A. STROCCHIA, to me known, who, being by me duly sworn, did depose and say
that she resides at 900 North Michigan Avenue, Chicago, Illnois; that she is
the Vice President of JMB REALTY CORPORATION, the corporation described in and
which executed the foregoing instrument as a general partner of CARLYLE REAL
ESTATE LIMITED PARTNERSHIP - XIII, as a general partner of 1001 FOURTH AVENUE
ASSOCIATES; and that she signed her name there by like order.
_____________________________
Notary Public
My Commission expires: _____________ .
City of Residence: _________________ .
STATE OF NEW YORK)
) ss.:
COUNTY OF NEW YORK )
On the 1st day of November, 1993, before me personally came
______________________________, to me known, who, being by me duly sworn, did
depose and say that he resides at _______________ _________________________;
that he is the _______________________ of SEAFO, INC., the corporation
described in and which executed the foregoing instrument; and that he signed
his name there by like order.
_____________________________
Notary Public
My Commission expires: _____________ .
City of Residence: _________________ .
EXHIBIT A
CONTRACTS
1. Agreement for Provision of Security Services dated September 1, 1983,
between 1001 Fourth Avenue Associates, as Owner, and Seattle-First National
Bank, as Contractor;
2. Vertical Transportation Contract, dated July 1, 1992, between 1001
Fourth Avenue Associates, as Owner, and Schindler Elevator Corporation, as
Contractor;
3. Modernization/Repair Contract and all Supplemental Proposals thereto,
dated October 6, 1992, between 1001 Fourth Avenue Associates, by JMB
Properties Company, as agent, and Schindler Elevator Corporation;
4. Master Agreement, dated May 31, 1991, as amended by the Master Agreement
Extension and Amendment Agreement No. 1, dated December 30, 1992, between
Turner Construction Company, as Contractor, and JMB Properties Company, as
agent for the property owner;
5. Work/Construction Agreement, dated August 20, 1993, between 1001 Fourth
Avenue Associates, as Owner, and Auburn Mechanical, Inc., as Contractor;
6. Settlement and Mutual Release of All Claims, dated September 16, 1993,
between 1001 Fourth Avenue Associates, by and through JMB Properties Company,
its agent, the Municipality of Metropolitan Seattle, Mortrude Floor Company
and Tri-State Construction, Inc.;
7. Continuing Service Agreement, dated, August 20, 1993, between 1001
Fourth Avenue Associates by JMB Properties Company, as agent, and P&G Plant
Company; and
8. Property Operation and Maintenance Agreement, dated March 23, 1993,
between JMB Properties Company, as agent for the property owner, and Urban
Engineering Co., as Contractor.
9. Work Construction Agreement, dated April 5, 1993, between 1001 Fourth
Avenue Associates, as Owner, and Aluminum and Bronze Fabricators, Inc., as
Contractor.
1001 FOURTH AVENUE ASSOCIATES
C/O JMB REALTY CORPORATION
900 NORTH MICHIGAN AVENUE
SUITE 1900
CHICAGO, ILLINOIS 60611
November 1, 1993
Common Retirement Fund of
the State of New York
Office of the State Comptroller
270 Broadway
New York, NY 10007
Gentlemen:
Reference is made to that certain Agreement for the Delivery of
a Deed In Lieu of Foreclosure dated as of October 29, 1993 between 1001 Fourth
Avenue Associates, as Mortgagor, and Seafo, Inc., as Mortgagee (the
"Agreement"). All capitalized terms used herein which are not otherwise
defined herein shall have the respective meanings ascribed to them in the
Agreement.
This letter shall confirm our understanding, that pursuant to
Mortgagor's closing requirements under Section 7.2.15 of the Agreement, the
undersigned, JMB Realty Corporation ("JMB"), hereby releases to the Common
Retirement Fund of the State of New York ("CRF") and hereafter shall have no
future claim, right or title to any positive Net Cash Flow in excess of the
Approved Working Reserve ("Excess Net Cash Flow"), as such term is defined in
the Commitment for Modification of First Deed of Trust Note between CRF and
Mortgagor, dated October 5, 1987. Such Excess Net Cash Flow is currently
being held by CRF.
Very truly yours,
1001 FOURTH AVENUE ASSOCIATES
an Illinois general partnership
By: Carlyle Real Estate Limited
Partnership - XIII,
Managing General Partner
By: JMB Realty Corporation,
Corporate General Partner of
Carlyle Real Estate Limited
Partnership - XIII
By: _____________________________
Julie A. Strocchia
Its: Vice President
1001 FOURTH AVENUE ASSOCIATES
C/O JMB REALTY CORPORATION
900 NORTH MICHIGAN AVENUE
SUITE 1900
CHICAGO, ILLINOIS 60611
November 1, 1993
Common Retirement Fund of
the State of New York
Office of the State Comptroller
270 Broadway
New York, NY 10007
Gentlemen:
Reference is made to that certain Agreement for the Delivery of
a Deed In Lieu of Foreclosure dated as of October 29, 1993 between 1001 Fourth
Avenue Associates, as Mortgagor, and Seafo, Inc., as Mortgagee (the
"Agreement"). All capitalized terms used herein which are not otherwise
defined herein shall have the respective meanings ascribed to them in the
Agreement.
This letter shall confirm our understanding, that pursuant to
Mortgagor's closing requirements under Section 7.2.6 of the Agreement, the
undersigned, JMB Realty Corporation ("JMB"), hereby releases to the Common
Retirement Fund of the State of New York ("CRF") and hereafter shall have no
future claim, right or title to that certain tax and insurance escrow account
relating to the Property (the "Tax and Insurance Escrow Account"). The Tax
and Insurance Escrow Account is currently being held by CRF.
Very truly yours,
1001 FOURTH AVENUE ASSOCIATES
an Illinois general partnership
By: Carlyle Real Estate Limited
Partnership - XIII,
Managing General Partner
By: JMB Realty Corporation,
Corporate General Partner of
Carlyle Real Estate Limited
Partnership - XIII
By: _____________________________
Julie A. Strocchia
Its: Vice President
Filed for Record at Request of:
Rogers & Wells
200 Park Avenue
New York, New York 10166
Attention: Lewis Bart Stone, Esq.
QUIT CLAIM DEED IN LIEU OF FORECLOSURE
The Grantor, 1001 Fourth Avenue Associates, an Illinois general
partnership, for and in consideration of the sum of Ten Dollars ($10.00) and
other good and valuable consideration, and in lieu of foreclosure of the
below-mentioned Deed of Trust, conveys and quit claims to Seafo, Inc., a
Delaware corporation, the following described real estate, situated in the
County of King, State of Washington (the "Property"):
See Exhibit A attached.
This deed is an absolute conveyance of title in effect as well as
in form, and is not intended as a mortgage, trust conveyance, or security of
any kind. Consideration for this deed consists of full release of the Grantor
from all debts and obligations of Grantor as secured by the deed of trust on
the Property dated April 26, 1984 and recorded on the same date under
Recording No. 8404260342, Records of King County, Washington, as modified by a
Modification of Deed of Trust dated October 5, 1987 and recorded November
17,1987 under Recording No. 8711171151, Records of King County, Washington
(the "Deed of Trust"). This deed fully satisfies the indebtedness of the Deed
of Trust and terminates in all respects the Deed of Trust, the note secured
thereby, and all related security documents.
DATED this 29th day of October, 1993.
1001 FOURTH AVENUE ASSOCIATES
an Illinois general partnership
By: Carlyle Real Estate Limited
Partnership - XIII,
Managing General Partner
By: JMB Realty Corporation,
Corporate General Partner of
Carlyle Real Estate Limited
Partnership - XIII
By:
Authorized Signatory
Its:
-------------------------
RECORD AND RETURN TO:
Rogers & Wells
200 Park Avenue
New York, New York 10166
Attn: Lewis Bart Stone, Esq.
ASSIGNMENT AND ASSUMPTION OF LEASES AND RENTS
This Assignment and Assumption of Leases, made as of this 1st
day of November, 1993 between 1001 FOURTH AVENUE ASSOCIATES, an Illinois
general partnership ("Assignor") and SEAFO, INC., a Delaware corporation
("Assignee").
WITNESSETH, that Assignor, for and in consideration of the sum
of Ten Dollars ($10.00) and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, does hereby ASSIGN,
TRANSFER, AND CONVEY unto Assignee, its successors and assigns, all right,
title and interest of Assignor in, to and under all existing leases, together
with all security deposits, advance rentals and other advance payments payable
by tenants thereunder (collectively, the "Leases") demising portions of the
improvements located on the real property described in Exhibit "A" attached
hereto.
TO HAVE AND TO HOLD the Leases, together with all rights and
privileges thereunto belonging unto Assignee, its successors and assigns,
including, without limitation, all security deposits, any documents or
instruments securing the obligations of the tenants thereunder and advance
rentals paid for the month of November, 1993 or thereafter and other advance
payments made or given thereunder, for and during the remainder of the terms
of the Leases, as well as all rents received by Assignor on or after October
23, 1993.
Assignee does hereby covenant to and agree with Assignor that
Assignee accepts the foregoing assignment and assumes all of the terms,
covenants and provisions of the Leases on the part of Assignee thereunder to
be performed and arising or accruing on and after the date hereof.
This Assignment and Assumption of Leases shall be governed by
and construed in accordance with the internal laws of the State of Washington
without regard to principles of conflict of law.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be duly executed as of the day and year first above written.
ASSIGNOR:
1001 FOURTH AVENUE ASSOCIATES
an Illinois general partnership
By: Carlyle Real Estate Limited
Partnership - XIII,
Managing General Partner
By: JMB Realty Corporation,
Corporate General Partner of
Carlyle Real Estate Limited
Partnership - XIII
By: ____________________________
Julie A. Strocchia
Its: Vice President
ASSIGNEE:
SEAFO, INC.
By:________________________________
Its:_______________________________
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 1st day of November, 1993, before me personally came JULIE
A. STROCCHIA, to me known, who, being by me duly sworn, did depose and say
that she resides at 900 North Michigan Avenue, Chicago, Illinois; that she is
the Vice President of JMB REALTY CORPORATION, the corporation described in and
which executed the foregoing instrument as a general partner of CARLYLE REAL
ESTATE LIMITED PARTNERSHIP - XIII, as a general partner of 1001 FOURTH AVENUE
ASSOCIATES; and that she signed her name there by like order.
______________________________
Notary Public
My Commission expires: ______________.
City of Residence: __________________.
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 1st day of November, 1993, before me personally came
_________________, to me known, who, being by me duly sworn, did depose and
say that he resides at ____________________________ ___________; that he is
the ________________________ of SEAFO, INC., the corporation described in and
which executed the foregoing instrument; and that he signed his name there by
like order.
______________________________
Notary Public
My Commission expires: ______________.
City of Residence: __________________.
ASSIGNMENT OF INTANGIBLE PROPERTY
WITNESSETH, that 1001 FOURTH AVENUE ASSOCIATES, an Illinois
general partnership (collectively, "Assignor"), for and in consideration of
the sum of Ten Dollars ($10.00) and other good and valuable consideration to
it in hand paid by SEAFO, INC., a Delaware corporation ("Assignee"), the
receipt and sufficiency of which are hereby acknowledged, has ASSIGNED,
TRANSFERRED, SET OVER, DELIVERED AND CONVEYED and by these presents does
hereby ASSIGN, TRANSFER, SET OVER, DELIVER AND CONVEY unto Assignee, its
successors and assigns all right, title and interest of Assignor in and to all
of the following (hereinafter collectively referred to as the "Assigned
Property") to the extent that the same apply to that certain real property
described in "Exhibit A" attached hereto and the improvements located thereon
and subject to the terms and conditions of that certain Agreement for the
Delivery of a Deed In Lieu of Foreclosure dated as of October 29th, 1993,
between Assignor and Assignee (the "Agreement") (all capitalized terms not
otherwise defined herein shall have the meaning as set forth in the
Agreement):
(1) the certificates of occupancy with respect to the
Improvements and, to the extent maintained by or on behalf of Assignor, all
other transferable licenses, certificates and permits issued by any
governmental or quasi-governmental authority with respect to the Property or
the use, maintenance and operations thereof;
(2) all architectural, mechanical, engineering and other plans
and specifications within Assignor's possession or subject to its control
relating to the completed construction or renovation of or other work at the
Building Complex and any unexpired warranties, guaranties or sureties in favor
of Assignor with respect thereto;
(3) all promotional advertising literature and materials,
catalogs, booklets and manuals relating to the Property or the use, operation
or maintenance thereof;
(4) all intangible personal property relating to the
ownership, construction, renovation, operation and leasing of the Property,
including, without limitation, the good will pertaining thereto;
(5) all environmental reports, asbestos reports and files
relating to asbestos work within Assignor's possession;
(6) all accounting, financial and operating information located
at the Property;
(7) the Order Granting Summary Judgment Against UCAQ
International, Inc., as entered as Case No. 92-2-13158-7, and entitled 1001
Fourth Avenue Associates, a corporation, Plaintiff v. UCAQ International,
Inc., a corporation, and Masao Matsumoto, an individual and the marital
community thereof, Defendants, in the Superior Court of the State of
Washington for King County;
(8) the Default Judgment against Masao Matsumoto, as entered
as Case No. 92-2-13158-7, in the Superior Court of the State of Washington for
King County;
(9) the Judgment and Order Directing Issuance of Writ of
Restitution, as entered as Case No. 90-2-21313-7, and entitled 1001 Fourth
Avenue Associates, an Illinois General Partnership, Plaintiff v. Mirabeau,
Inc., a Washington corporation, Defendant, in the Superior Court of the State
of Washington in and for the County of King;
(10) the First Amended Complaint For Unlawful Detainer, as
entered as Case No. 93-2-23702-2, and entitled 1001 Fourth Avenue Associates,
an Illinois general partnership, Plaintiff, v. Trans Pacific Stores, Ltd., a
corporation, Defendant, in the Superior Court of the State of Washington in
and for the County of King; and
(11) all transferable or assignable warranties, guaranties,
contract rights and miscellaneous rights, if any, with respect to the
Property, including any of the property described in items (1) through (10)
above.
TO HAVE AND TO HOLD the Assigned Property, together with all
rights and privileges thereunto belonging unto Assignee, its successors and
assigns, forever.
This Assignment of Intangible Property shall be governed by and
construed in accordance with the internal laws of the State of Washington
without regard to principles of conflict of law.
EXECUTED AND DELIVERED this 1st day of November, 1993.
ASSIGNOR:
1001 FOURTH AVENUE ASSOCIATES
an Illinois general partnership
By: Carlyle Real Estate Limited
Partnership - XIII,
Managing General Partner
By: JMB Realty Corporation,
Corporate General Partner
of Carlyle Real Estate
Limited Partnership - XIII
By: _________________________
Julie A. Strocchia
Its: Vice President
STATE OF NEW YORK)
) ss.:
COUNTY OF NEW YORK)
On the 1st day of November, 1993, before me personally came
JULIE A. STROCCHIA, to me known, who, being by me duly sworn, did depose and
say that she resides at 900 North Michigan Avenue, Chicago, Illinois; that she
is the Vice President of JMB REALTY CORPORATION, the corporation described in
and which executed the foregoing instrument as a general partner of CARLYLE
REAL ESTATE LIMITED PARTNERSHIP - XIII, as a general partner of 1001 FOURTH
AVENUE ASSOCIATES; and that she signed her name there by like order.
_____________________________
Notary Public
My Commission expires: _____________ .
City of Residence: _________________ .
ASSIGNMENT OF FUTURE TAX OR INSURANCE REFUNDS
WITNESSETH, that 1001 FOURTH AVENUE ASSOCIATES, an Illinois
general partnership (collectively, "Assignor"), for and in consideration of
the sum of Ten Dollars ($10.00) and other good and valuable consideration to
it in hand paid by SEAFO, INC., a Delaware corporation ("Assignee"), the
receipt and sufficiency of which are hereby acknowledged, has ASSIGNED,
TRANSFERRED, SET OVER, DELIVERED AND CONVEYED and by these presents does
hereby ASSIGN, TRANSFER, SET OVER, DELIVER AND CONVEY unto Assignee, its
successors and assigns all right, title and interest of Assignor in and to all
of the following (hereinafter collectively referred to as the "Assigned
Property") to the extent that the same apply to that certain real property
described in "Exhibit A" attached hereto and the improvements located thereon
and subject to the terms and conditions of that certain Agreement for the
Delivery of a Deed In Lieu of Foreclosure dated as of October 29, 1993,
between Assignor and Assignee (the "Agreement") (all capitalized terms not
otherwise defined herein shall have the meaning as set forth in the
Agreement):
(1) all future refunds from any taxing
authority (which refunds Assignor shall hold in trust for the benefit of
Assignee); and
(2) all future refunds from any insurer
with respect to premiums paid for insurance on the Property (which refunds
Assignor shall hold in trust for the benefit of Assignee).
TO HAVE AND TO HOLD the Assigned Property, together with all
rights and privileges thereunto belonging unto Assignee, its successors and
assigns, forever.
This Assignment of Future Tax or Insurance Refunds shall be
governed by and construed in accordance with the internal laws of the State of
Washington without regard to principles of conflict of law.
EXECUTED AND DELIVERED this 1st day of November, 1993.
ASSIGNOR:
1001 FOURTH AVENUE ASSOCIATES
an Illinois general partnership
By: Carlyle Real Estate Limited
Partnership - XIII,
Managing General Partner
By: JMB Realty Corporation,
Corporate General Partner
of Carlyle Real Estate
Limited Partnership - XIII
By: _________________________
Julie A. Strocchia
Its: Vice President
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK)
On the 1st day of November, 1993, before me personally came
JULIE A. STROCCHIA, to me known, who, being by me duly sworn, did depose and
say that she resides at 900 North Michigan Avenue, Chicago, Illinois; that she
is the Vice President of JMB REALTY CORPORATION, the corporation described in
and which executed the foregoing instrument as a general partner of CARLYLE
REAL ESTATE LIMITED PARTNERSHIP - XIII, as a general partner of 1001 FOURTH
AVENUE ASSOCIATES; and that she signed her name there by like order.
_____________________________
Notary Public
My Commission expires: _____________ .
City of Residence: _________________ .
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
CARLYLE-XIII MANAGERS, INC.
WHEREAS, this corporation desires to change its name to Carlyle
Investors, Inc.
NOW, THEREFORE, the Certificate of Incorporation as filed with the
Delaware Secretary of State on March 25, 1993 is hereby amended and restated
to read as follows:
ARTICLE ONE: The name of this corporation is Carlyle Investors, Inc.
ARTICLE TWO: The address of its registered office in the State of Delaware is
Corporation Trust Center, 1209 Orange Street, in the City of Wilmington,
County of New Castle, 19801. The name of its registered agent at such address
is The Corporation Trust Company.
ARTICLE THREE: The nature of the business or purpose to be conducted or
promoted is: to engage in any lawful act or activity for which corporations
may be organized under the General Corporation Law of Delaware.
ARTICLE FOUR: The total number of shares of stock which this corporation
shall have authority to issue is 1,000 and the par value of each of such
shares is One Dollar ($1.00) amounting in the aggregate to One Thousand
Dollars ($1,000.00).
ARTICLE FIVE: The number of directors constituting the Board of Directors
shall be that number as shall be fixed by the by-laws of this Corporation.
ARTICLE SIX: The corporation is to have perpetual existence.
ARTICLE SEVEN: In furtherance and not in limitation of the powers conferred
by statute, the Board of Directors of this corporation is expressly authorized
to make, alter or repeal the by-laws of this corporation.
ARTICLE EIGHT: Elections of directors need not be by written ballot unless
the by-laws of this corporation shall so provide. Meetings of the
stockholders may be held within or without the State of Delaware, as the by-
laws may provide. The books of this corporation may be kept (subject to any
provision contained in the statutes) outside the State of Delaware at such
place or places as may be designated from time to time by the Board of
Directors or in the by-laws of this corporation.
ARTICLE NINE: The corporation reserves the right to amend, alter, change or
repeal any provision contained in this Amended and Restated Certificate of
Incorporation, in the manner now and hereafter prescribed by statute, and all
rights conferred upon stockholders herein are granted subject to this
reservation.
ARTICLE TEN: To the fullest extent permitted by the General Corporation Law
of the State of Delaware as it now exists or may hereafter be amended, no
director of this corporation shall be liable to this corporation or its
stockholders for monetary damages arising from a breach of fiduciary duty owed
to this corporation.
ARTICLE ELEVEN: This Amended and Restated Certificate of Incorporation was
duly adopted by the stockholders of this corporation pursuant to Section 242
of the General Corporation Law of Delaware on March 29, 1993.
This Amended and Restated Certificate of Incorporation
was duly adopted by the stockholders of this corporation pursuant to Section
242 of the General Corporation Law of Delaware on April 6, 1993.
IN WITNESS WHEREOF, the President has signed, and the Secretary has
attested,
this Amended and Restated Certificate of Incorporation this 6th day of April,
1993.
NEIL G. BLUHM
-------------
Neil G. Bluhm
President
ATTEST:
Kevin B. Yates
Secretary
STATE OF ILLINOIS )
) ss
COUNTY OF COOK )
I, the undersigned, a Notary Public in and for said County, in the
State aforesaid, DO HEREBY CERTIFY that Kevin B. Yates, the Secretary of
Carlyle-XIII Managers, Inc., acknowledged that the statements set forth in the
foregoing instrument are true and correct, and that he signed the foregoing
instrument as his free and voluntary act for the uses and purposes therein set
forth.
Subscribed and sworn to before me this 6th day of April, 1993.
Mona Sarnoff
Notary Public
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
CARLYLE-XIV MANAGERS, INC.
WHEREAS, this corporation desires to change its name to Carlyle
Managers, Inc.
NOW, THEREFORE, the Certificate of Incorporation as filed with the
Delaware Secretary of State on March 25, 1993 is hereby amended and restated
to read as follows:
ARTICLE ONE: The name of this corporation is Carlyle Managers, Inc.
ARTICLE TWO: The address of its registered office in the State of Delaware is
Corporation Trust Center, 1209 Orange Street, in the City of Wilmington,
County of New Castle, 19801. The name of its registered agent at such address
is The Corporation Trust Company.
ARTICLE THREE: The nature of the business or purpose to be conducted or
promoted is: to engage in any lawful act or activity for which corporations
may be organized under the General Corporation Law of Delaware.
ARTICLE FOUR: The total number of shares of stock which this corporation
shall have authority to issue is 1,000 and the par value of each of such
shares is One Dollar ($1.00) amounting in the aggregate to One Thousand
Dollars ($1,000.00).
ARTICLE FIVE: The number of directors constituting the Board of Directors
shall be that number as shall be fixed by the by-laws of this Corporation.
ARTICLE SIX: The corporation is to have perpetual existence.
ARTICLE SEVEN: In furtherance and not in limitation of the powers conferred
by statute, the Board of Directors of this corporation is expressly authorized
to make, alter or repeal the by-laws of this corporation.
ARTICLE EIGHT: Elections of directors need not be by written ballot unless
the by-laws of this corporation shall so provide. Meetings of the
stockholders may be held within or without the State of Delaware, as the by-
laws may provide. The books of this corporation may be kept (subject to any
provision contained in the statutes) outside the State of Delaware at such
place or places as may be designated from time to time by the Board of
Directors or in the by-laws of this corporation.
ARTICLE NINE: The corporation reserves the right to amend, alter, change or
repeal any provision contained in this Amended and Restated Certificate of
Incorporation, in the manner now and hereafter prescribed by statute, and all
rights conferred upon stockholders herein are granted subject to this
reservation.
ARTICLE TEN: To the fullest extent permitted by the General Corporation Law
of the State of Delaware as it now exists or may hereafter be amended, no
director of this corporation shall be liable to this corporation or its
stockholders for monetary damages arising from a breach of fiduciary duty owed
to this corporation.
This Amended and Restated Certificate of Incorporation
was duly adopted by the stockholders of this corporation pursuant to Section
242 of the General Corporation Law of Delaware on April 6, 1993.
IN WITNESS WHEREOF, the President has signed, and the Secretary has
attested,
this Amended and Restated Certificate of Incorporation this 6th day of April,
1993.
NEIL G. BLUHM
-------------
Neil G. Bluhm
President
ATTEST:
Kevin B. Yates
Secretary
STATE OF ILLINOIS )
) ss
COUNTY OF COOK )
I, the undersigned, a Notary Public in and for said County, in the
State aforesaid, DO HEREBY CERTIFY that Kevin B. Yates, the Secretary of
Carlyle-XIV Managers, Inc., acknowledged that the statements set forth in the
foregoing instrument are true and correct, and that he signed the foregoing
instrument as his free and voluntary act for the uses and purposes therein set
forth.
Subscribed and sworn to before me this 6th day of April, 1993.
Mona Sarnoff
Notary Public
DEMAND NOTE
$600,000.00 March 25, 1993
FOR VALUE RECEIVED, the undersigned, Carlyle Real Estate Limited
Partnership-XIII, an Illinois limited partnership (hereinafter referred to as
"Payor"), hereby promises to pay Carlyle Investors, Inc., a Delaware
corporation (hereinafter referred to as "Payee"), on demand the principal sum
of $600,000.00 (hereinafter referred to as the "Principal Amount"). The
Principal Amount shall bear interest at the Alternate Federal Short-Term rate
(the "Rate") as of the date hereof, which rate shall change to the Rate then
in effect as of every six months from the date hereof (the "Compounding
Date"); all interest shall be compounded as of every Compounding Date.
Payor may at any time elect to prepay all or any portion of the
Principal Amount, together with any accrued but unpaid interest thereon,
without premium or penalty.
IN WITNESS WHEREOF, Payor has executed this Demand Note this 25th day of
March, 1993.
CARLYLE REAL ESTATE
LIMITED PARTNERSHIP-XIII
By: JMB Realty Corporation
a Delaware corporation
Corporate General Partner
By:
NEIL G. BLUHM
--------------
Neil G. Bluhm
President
DEMAND NOTE
$600,000.00 March 25, 1993
FOR VALUE RECEIVED, the undersigned, Carlyle Real Estate Limited
Partnership-XIII, an Illinois limited partnership (hereinafter referred to as
"Payor"), hereby promises to pay Carlyle Managers, Inc., a Delaware
corporation (hereinafter referred to as "Payee"), on demand the principal sum
of $600,000.00 (hereinafter referred to as the "Principal Amount"). The
Principal Amount shall bear interest at the Alternate Federal Short-Term rate
(the "Rate") as of the date hereof, which rate shall change to the Rate then
in effect as of every six months from the date hereof (the "Compounding
Date"); all interest shall be compounded as of every Compounding Date.
Payor may at any time elect to prepay all or any portion of the
Principal Amount, together with any accrued but unpaid interest thereon,
without premium or penalty.
IN WITNESS WHEREOF, Payor has executed this Demand Note this 25th day of
March, 1993.
CARLYLE REAL ESTATE
LIMITED PARTNERSHIP-XIII
By: JMB Realty Corporation
a Delaware corporation
Corporate General Partner
By:
Neil G. Bluhm
President
SECOND AMENDED AND RESTATED ARTICLES OF PARTNERSHIP OF
JMB/NYC OFFICE BUILDING ASSOCIATES
These Second Amended and Restated Articles of Partnership made and
entered into as of March 30, 1993, by and between Carlyle-XIV Managers, Inc.,
an Delaware corporation (hereinafter referred to as "General Partner"), and
Carlyle-XIII Associates, L.P., an Delaware limited partnership, Carlyle-XIV
Associates, L.P., a Delaware limited partnership, and Property Partners, L.P.,
a Delaware limited partnership, as the limited partners (hereinafter
collectively referred to as the "Limited Partners").
W I T N E S S E T H
THAT WHEREAS, this partnership (hereinafter referred to as the
"Partnership") was heretofore formed pursuant to the Uniform Partnership Act
of the State of Illinois by Carlyle Real Estate Limited Partnership-XIII, an
Illinois limited partnership, Carlyle Real Estate Limited Partnership-XIV, an
Illinois limited partnership, and JMB/NYC Associates, an Illinois general
partnership (hereinafter collectively referred to as the "Original Partners");
and
THAT WHEREAS, the Original Partners have each individually assigned
their respective partnership interests to the Limited Partners pursuant to
that certain Amendment No. 1 to the Amended and Restated Agreement of
Partnership of the Partnership (the "Agreement"); and
THAT WHEREAS, the parties hereto desire to continue the partnership as a
limited partnership pursuant to the Revised Uniform Limited Partnership Act as
in effect in the State of Illinois, as amended (the "Act"), for the purposes
and on the terms and conditions hereinafter set forth; and
THAT WHEREAS, the General Partner desires to: (i) be admitted into the
Partnership as a general partner, (ii) perform all of the duties and
responsibilities of a general partner under the Act, and (iii) acquire a
general partnership interest in the Partnership, and the Limited Partners, by
their execution hereof, desire to evidence their consent to said admission and
to the continuance of the Partnership as a limited partnership; and
THAT WHEREAS, the parties hereto desire to amend and restate the
partnership so that it appears in its entirety as follows.
NOW THEREFORE, the undersigned hereby continue the partnership as a
limited partnership under the provisions of the Act, except as hereinafter
provided, for the purposes and on the terms and conditions as hereinafter set
forth, and do hereby agree:
1. Name of Partnership. The name of the Partnership shall be
"JMB/NYC Office Building Associates, L.P."
2. Character of the Partnership's Business. The character of the
business of the Partnership will be to acquire, hold, and otherwise use for
profit an interest in each of the following general partnerships: 237 Park
Avenue Associates, 1290 Associates, 2 Broadway Land Company and 2 Broadway
Associates which partnerships own the land (and improvements thereon) more
particularly described on Exhibit A attached hereto, and to engage in any and
all activities related or incidental thereto. Whenever the term "Property"
appears in these Articles such term shall mean any property, real or personal,
tangible or intangible, at any time owned by the Partnership, including the
Partnership's respective interests in the aforementioned general partnerships
and any property at any time owned by a partnership or joint venture in which
the Partnership is a partner.
3. Location of the Principal Place of Business. The location of the
principal place of business of the Partnership shall be 900 North Michigan
Avenue, Chicago, Illinois 60611 or such other location as shall be designated
by the Partners.
4. Names and Places of Residence of Partners. The names of the
Partners of the Partnership and their respective addresses are as set forth
after each respective name as follows:
General Partner Residence
Carlyle-XIV Managers, Inc. 900 North Michigan
Chicago, IL 60611
Limited Partners Residence
Carlyle-XIII Associates, L.P. 900 North Michigan
Chicago, IL 60611
Carlyle-XIV Associates, L.P. 900 North Michigan
Chicago, IL 60611
Property Partners, L.P. 900 North Michigan
Chicago, IL 60611
As used herein, the term "Partner" shall refer to any of the General Partner
or Limited Partners and the term "Partners" shall refer to the General Partner
and the Limited Partners collectively and shall include their respective
successors and assigns, as the case may be.
5. Term of Partnership. The term for which the Partnership shall
exist shall be until December 31, 2034 unless sooner terminated as hereinafter
provided.
6. Contributions of the Members of the Partnership.
A. Contributions. The Original Partners have contributed the
sums set forth opposite each Partner's name on the attached Exhibit B. Each
of the Limited Partners have contributed hereto the partnership interests in
the Partnership assigned to them by each of the Original Partners,
respectively. In the event that any Partner makes an additional contributions
to the Partnership or receives a return of all or part of its contributions to
the Partnership, Exhibit B shall be promptly and appropriately amended to
reflect such additional or returned contribution.
B. Withdrawals of Capital. Except as otherwise herein
provided, no Partner shall be entitled to withdraw capital or to receive
distributions of or against capital without the prior written consent of, and
upon the terms and conditions specified by, the General Partner.
C. Capital Accounts. The Partnership shall maintain for each
of the Partners a Capital Account, which shall be the aggregate amount of the
contributions to the Partnership made by such Partner, as set forth in Exhibit
B, reduced by the aggregate amount of any losses allocated, and any
distributions of cash or the fair market value of other assets of the
Partnership made, to such Partner and increased by the aggregate amount of any
profits allocated to such Partner.
D. Loans. Except as provided in Section 8D hereof, all
advances or payments to the Partnership by any Partner shall be deemed to be
loans by such Partner to the Partnership, and the Partner making the same
shall be entitled to interest thereon at such rates per annum as the General
Partner may determine, and the same, together with interest as aforesaid,
shall be repaid before any distribution shall be made hereunder to the other
Partners. No such loan to the Partnership shall be made without the prior
written consent of the General Partner and, unless all of the Partners
otherwise agree, shall be required to be made by all of the Partners in
proportion to their respective Partnership Shares (as hereinafter defined).
7. Partnership Shares.
A. As used herein, "profits and losses" include, without
limitation, each item of Partnership income, gain, loss and deduction as
determined for Federal income tax purposes, and "Partnership Share" means the
percentage for each Patner as set forth in Exhibit B. All net profits or
losses from the operations of the Partnership for a fiscal year or part
thereof shall be allocated to the Partners based upon their respective
Partnership Shares.
Any credits of the Partnership for a fiscal year shall be allocated in
the same manner as are profits of the Partnership pursuant to this Section 7A
(without regard to Section 7B), except that any investment tax credit shall be
allocated only among those Partners who were partners (for Federal income tax
purposes) on the date the property with respect to which such credit is earned
was placed in service.
B. There shall be allocated to each Partner (i) the amount of
any profits attributable to interest, "points", financing fees and other
amounts paid by such Partner to the Partnership with respect to loans made by
the Partnership to such Partner and (ii) the amount of any losses attributable
to interest, "points", financing fees and other amounts paid by the
Partnership to a third party lender with respect to borrowings incurred by the
Partnership to make loans by the Partnership to such Partner.
C. (i) All net profits or losses from the sale or other
disposition of all or any substantial portion of the Property shall be
allocated to the Partners in accordance with their respective Partnership
Shares on the date on which the Partnership recognized such profits or losses
for Federal income tax purposes. Notwithstanding allocations in the first
sentence of this Section 7C(i) if, at any time profit or loss, as the case may
be, is realized by the Partnership on the sale or other disposition of all or
any substantial portion of the Property, the Capital Account balances of the
Partners are not in the ratio of their respective Partnership Shares (the
"Equalization Ratio"), then gain shall be allocated to those Partners whose
Capital Account balances are less than they would be if they were in the
Equalization Ratio (or loss shall be allocated to those Partners whose Capital
Account balances are greater than they would be if they were in the
Equalization Ratio), in either case up to and in proportion to the amount
necessary to cause the Capital Account balances of the Partners to be in the
Equalization Ratio and then in accordance with the first sentence in this
Section 7C(i). Notwithstanding any adjustment of the allocation of profits or
losses provided in this Agreement by any judicial body or governmental agency,
the allocations of profits of losses provided in this Agreement shall control
for purposes of this Agreement (or any amendment hereto pursuant to Section
12B), including without limitation, the determination of the Partners' Capital
Accounts.
(ii) The portion of any gain allocated under Section 7C(i) above
that represents ordinary income attributable to "Unrealized Receivables" and
"Substantially Appreciated Inventory Items", as such terms are defined in
Section 751(c) and (d), respectively, of the Internal Revenue Code of 1954, as
amended (the "Code"), shall be allocated among the Partners in the proportions
in which depreciation deductions on the Partnership Property sold, or tax
benefits attributable to or giving rise to such Unrealized Receivables or
Substantially Appreciated Inventory Items, were originally allocated to their
Partnership interests. No Partner shall relinquish such Partner's share of
"Unrealized Receivables" (as such term is defined in Section 751(c) of the
Code) attributable to depreciation recapture in the case of a distribution or
constructive distribution of property arising in connection with admission to
the Partnership of another person as Person.
D. Each distribution to the Partners of cash or other assets of
the Partnership made prior to the dissolution of the Partnership, including,
but not limited to, each distribution of net proceeds received by the
Partnership from the sale or refinancing of all or any substantial portion of
the Property, shall be made to the Partners in accordance with their
respective Partnership Shares owned on the date of such distribution;
provided, however, that if, at the time of any such distribution, the Capital
Account balances of the Partners are not in the Equalization Ratio, then the
proceeds of any such distribution shall be distributed first to the Partners
having Capital Account balances greater than they would be if the Capital
Account balances of all Partners were in the Equalization Ratio, up to and in
proportion to the amount necessary to cause the Capital Account balances of
all Partners to be in the Equalization Ratio, and then in accordance with the
respective Partnership Shares of the Partners on the date of such
distribution. Each distribution of cash or other assets of the Partnership
made after dissolution of the Partnership shall be made in accordance with
Section 11C. Distributions to the Partners will be made in such amounts and
at such times as shall be determined by the General Partner.
E. The Partnership Shares of each of the Partners are as
follows: 1% to the General Partner, 24.75% to Carlyle-XIII Associates, L.P.,
49.5% to Carlyle-XIV Associates, L.P., and 24.75% to Property Partners, L.P.
8. Powers, Rights and Duties of the Partners.
A. Except as otherwise provided herein, the General Partner
alone shall have the full, exclusive and complete power, authority and
responsibility to manage and control the affairs and funds of the Partnership
in the ordinary course of its activities for the purposes herein stated,
including the power to take (or omit) all or any such action as he may from
time to time deem appropriate or desirable in connection therewith. In
furtherance of the powers granted to the General Partner herein, and in no way
in limitation thereof, the General Partner, for and on behalf of the
Partnership, shall have full, exclusive and complete power and responsibility
to enter into agreements of whatever nature necessary to effect the
acquisition of the Partnership's assets, and such amendments and restatements
thereof and supplements and modifications thereto as it amy consider to be in
the best interests of the Partnership to perform all duties and obligations,
and exercise all rights, as provided under such agreements in such manner as
it may determine; to act on behalf of the Partnership in dealing with third
parties and to manage, operate and undertake the funds and affairs of the
Partnership for the purposes of conducting its business and of making,
holding, conducting and disposing of assets and investments. The president or
any vice president of the General Partner may act for and in the name of the
Partnership in the exercise by the Partnership of any of its rights and powers
hereunder. In dealing with the president or any vice president of the General
Partner, no person shall be required to inquire into the authority of such
individual acting on behalf of the Partnership to bind the Partnership.
Persons dealing with the Partnership are entitled to rely conclusively on the
power and authority of the president or any vice president of the General
Partner as set forth in this Agreement.
B. Notwithstanding any provision of this Agreement to the
contrary, in the event that the Partners cannot reach unanimous agreement
concerning a decision regarding the sale of all or any substantial portion of
the Property (other than any property owned by a partnership or joint venture,
directly or indirectly through another partnership or joint venture, in which
the Partnership is a partner), the Partner or Partners desiring a sale thereof
(the "Notifying Party") shall give notice to the other Partner or Partners
(the "Notified Party") of the proposed transaction and shall deliver to the
Notified Party with such notice a copy of the bona fide written offer from the
prospective purchaser setting forth the name of the prospective purchaser and
all of the material terms and conditions on which it is intended that the
Property, or specified portion thereof, be sold. The Notified Party shall
then have 30 days after receiving such notice to elect (by giving notice of
the same to the Notifying Party) either (a) to purchase the specified Property
(other than any property owned by a partnership or joint venture, in which the
Partnership is a partner) for the purchase price and on the terms and
conditions as set forth in such offer or (b) to acquire a proportionate share
of the Notifying Party's interest in the Partnership for an amount equal to
the amount which the Notifying Party would have received as its share of the
net proceeds from the sale of the specified Property. In the event that the
Notified Party makes either such election, the Partners shall close on the
transaction as elected by the Notified Party within a period equal to the
later of 90 days after the making of such election or the closing date
specified in such written offer, with the time, place and date (within such
period) as specified by the Notified Party by notice to the Notifying Party
within 30 days after the making of such election. If the Notified Party does
not make either election, then the Notifying Party may conclude a sale of such
specified Property, without the agreement of the Notified Party, at any time
or times within 180 days after the giving of notice of the proposed sale
thereof, for a purchase price and on terms which are at least as favorable to
the Partnership as those contained in the written offer and only to the
purchaser identified in such written offer or to an "Affiliate" (as
hereinafter defined) of such purchaser, if the Affiliate is specified in such
written offer or such notice, but if a sale is not consummated within such
period, then the right of the Notified Party to receive notice and to purchase
or to acquire as aforesaid will continue as to any future proposed sale. In
the event that the Notified Party includes more than one Partner, the election
made by the Notified Party must be consented to by each such Partner and the
purchase from the Notifying Party shall be made by the Partners comprising the
Notified Partner based upon their respective Partnership Shares at the time of
such election; provided, however, that if one such Partner fails or refuses to
consent to either election, the other such Partner may, at its option, make
the election of its choice and undertake the entire purchase or acquisition
from the Notifying Party.
C. Neither the General Partner nor any of its Affiliates shall
be required to manage the Partnership as its sole and exclusive function and
it may have other business interests and may engage in other activities in
addition to those relating to the Partnership, including the making or
management of other investments. Without limitation on the generality of the
foregoing, each Partner recognizes that each Partner was formed for the
purpose of investing in, operating, transferring, leasing and otherwise using
real property and interests therein for profit and engaging in any and all
activities related or incidental thereto and that each Partner will or may
make other investments consistent with such purpose. Neither the Partnership
nor any Partner shall have any right by virtue of this Agreement or the
Partnership relationship created hereby in or to such other ventures or
activities or to the income or proceeds derived therefrom, and the pursuit of
such other ventures or activities by each Partner or any of their Affiliates,
even if competitive with the business of the Partnership, is hereby consented
to by all Partners and shall not be deemed wrongful or improper. Except as
otherwise permitted in this Agreement or in any agreement among the Partners,
no Partner or any Affiliate of a Partner shall be obligated to present any
particular investment opportunity to the Partnership even if such opportunity
is of a character which, if presented to the Partnership, could be taken by
the Partnership, and each Partner or any Affiliate of a Partner shall have the
right to take for its own account, or to recommend to others, any such
particular investment opportunity.
D. "Affiliate(s)" of a person means (i) any officer, director,
employee, shareholder, partner or relative within the third degree of kindred
of such person: (ii) any corporation, partnership, trust or other entity
controlling, controlled by or under common control with such person or any
such relative of such person; and (iii) any officer, director, trustee,
general partner or employee of any entity described in (ii) above. Affiliates
of a Partner may receive commissions when the Partnership buys or sells the
Property or any portion thereof and may be employed to provide property
management for the Partnership or any of the Property, but no commissions or
compensation payable to such Affiliate for the same may exceed the normal and
competitive rates for similar services in the locality where provided. The
Partnership may borrow funds for the purpose of lending such funds to all or
any of its Partners; provided, however, that the cost of such funds charged to
the Partnership (including financing fees, "points" and interest charged with
respect to such funds) by a third party shall not exceed the amount charged by
the Partnership to such Partner or Partners for the use of such funds. The
Partnership may enter into agreements with Affiliates of a Partner to provide
insurance brokerage or similar services to the Partnership or any of the
Property; provided that any such services by Affiliates shall be at rates at
least as favorable to the Partnership as those available from unaffiliated
parties. The validity of any transaction, agreement or payment involving the
Partnership and any Affiliate of a Partner shall not be affected by reason of
the relationship between the Partner and such Affiliate or the approval of
said transaction, agreement or payment by officers, directors or partners of
such Affiliate all or some of whom are also Affiliates of a Partner or are
officers, directors or partners or are otherwise interested in or related to
such Partner or its Affiliates.
E. No Partner nor any Affiliate of any Partner nor any officer,
director, shareholder, employee or partner of any such Affiliate shall be
liable, responsible or accountable in damages or otherwise to the Partnership
or to any other Partner for any action taken or failure to act on behalf of
the Partnership within the scope of the authority conferred on such Partner or
such Affiliate or such other person by this Agreement or by law unless such
action or omission was performed or omitted fraudulently or in bad faith or
constituted wanton and willful misconduct.
F. The Partnership shall indemnify and hold harmless each
Partner, any Affiliate of any Partner and any officer, director, shareholder,
employee or partner of any such Affiliate (the "Indemnified Parties") from and
against any loss, expense, damage or injury suffered or sustained by any
Indemnified Party by reason of any acts, omissions or alleged acts or
omissions arising out of its activities on behalf of the Partnership or in
furtherance of the interest of the Partnership, including, but not limited to,
any judgment, award, settlement, reasonable attorneys' fees and other costs
and expenses incurred in connection with the defense of any actual or
threatened action, proceeding or claim; provided that the acts or omissions or
alleged acts or omissions upon which such actual or threatened action,
proceeding or claim are based were performed or omitted in good faith and were
not performed or omitted fraudulently or in bad faith or as a result of wanton
and willful misconduct.
G. The Limited Partners shall not participate in the management
or control of the Partnership's business, nor shall they transact any business
for the Partnership, nor shall they have the power to act for or bind the
Partnership, said powers being vested solely and exclusively in the General
Partner as provided herein (and except as provided herein). The Limited
Partners shall not have any personal liability whatever, whether to the
Partnership, to any Partner or to the creditors of the Partnership, for the
debts of the Partnership or any of its losses once it has paid to the
Partnership the amount of its capital contribution set forth in Exhibit B.
The partnership interest of the Limited Partners in the Partnership shall be
fully paid and non-assessable.
H. The General Partner may in its sole discretion, make or seek
to revoke the election referred to in Section 745 of the Internal Revenue Code
of 1986, as amended, (herein the "Code") or any similar provision exacted in
lieu thereof. Each of the Partners will upon request supply the information
necessary to properly give effect to any such election.
I. The General Partner shall, at the Partnership's expense and
within a reasonable time after the close of each fiscal year, cause each
Partner to be furnished with such statements of the Partnership's assets and
liabilities as of the close of such year (if any), such profit and loss
statement for such year (if any), such statement of the capital and profit
account of each Partner (if any), and such other reports (if any), all as the
General Partner may deem appropriate.
J. The General Partner shall, at the Partnership's expense,
cause the Partnership's Federal and state income and other tax returns to be
prepared and filed and shall furnish copies to each Partner of any information
on such returns needed for the preparation of each Partner's own tax returns.
9. Books and Records of the Partnership; Fiscal Year. The General
Partner shall keep and maintain the books and records of the Partnership at
the principal place of business of the Partnership. The fiscal year of the
Partnership shall end on the 31st day of December in each year. The books of
the Partnership shall be kept on the cash or accrual basis, and the
Partnership shall be on the cash or accrual basis for tax purposes, as
determined by the General Partner. The books and records of the Partnership
shall be audited at such times and by such accountants as shall be determined
from time to time by the General Partner. The funds of the Partnership shall
be deposited in such bank accounts or invested in such interest-bearing or
non-interest-bearing investments as shall be determined by the General
Partner.
10. Transfer of Partnership Interest.
A. No Partner may sell, assign, transfer, encumber or
hypothecate the whole or any part of its Partnership interest (including, but
not limited to, its interest in the capital or profits of the Partnership)
without prior written consent of the General Partner.
B. Any party or person admitted to the Partnership as a
substituted Partner shall be subject to and bound by all of the provisions of
this Agreement as if originally a party to this Agreement and as a condition
to such admission shall be required to execute a copy of this Agreement as
amended to the date of such admission.
C. A Partner shall have no liability hereunder (including, but
not limited to, any liability as a surety but excluding the repayment of any
outstanding principal and interest on loans made by the Partnership to such
Partner) for any obligations accruing under or in connection with the
Partnership and relating to events occurring after such Partner shall have
sold, assigned or transferred its entire Partnership interest.
11. Dissolution of the Partnership.
A. No act, thing, occurrence, event or circumstances shall
cause or result in the dissolution of the Partnership except the matters
specified in subsection B below.
B. The happening of any one of the following events shall work
a dissolution of the Partnership:
(1) The bankruptcy, resignation, legal incapacity,
dissolution, termination, or expulsion of the General Partner; provided,
however, that in such event the remaining Partners shall have the right to
elect to continue the Partnership's business by depositing at the office of
the Partnership a writing evidencing such an election. No other act shall be
required to effect such continuation;
(2) The sale of all or substantially all of the assets of
the Partnership;
(3) The unanimous agreement in writing by all of the
Partners to dissolve the Partnership; or
(4) The termination of the term of the Partnership
pursuant to Section 5 hereof. Without limitation on the other provisions
hereof, the admission of a new Partner shall not work a dissolution of the
Partnership. Except as otherwise provided in this Agreement, each Partner
agrees that, without the consent of the General Partner, a Partner may not
withdraw from or cause a voluntary dissolution of the Partnership.
C. Upon the occurrence of any of the events specified in
subsection B above causing a dissolution of the Partnership and except as
otherwise provided in subsection B above, the remaining Partner or Partners
shall commence to wind up the affairs of the Partnership and to liquidate its
investments (and in this connection shall have full right and unlimited
discretion to determine in good faith the time, manner and terms of any sale
or sales of Partnership Property). The Partner or Partners obligated to wind
up the affairs of the Partnership as aforesaid shall herein be called the
"Winding-Up Party". The Partners and their legal representatives, successors
and assignees shall continue to share in profits and losses during the period
of liquidation in the same manner and proportion as immediately before the
dissolution. Following the payment of all debts and liabilities of the
Partnership and all expenses of liquidation and subject to the right of the
Winding-Up Party to set up such cash reserves as, and for so long as, it may
deem reasonably necessary, the proceeds of the liquidation and any other funds
of the Partnership shall be distributed to the Partners (after deducting from
the distributive share of a Partner any sum such Partner owes the Partnership)
in accordance with Section 7 hereof. No Partner shall have any right to
demand or receive property other than cash upon dissolution or termination of
the Partnership. Upon the completion of the liquidation of the Partnership
and of the distribution of all Partnership funds, the Partnership shall
terminate and the Winding-Up Party shall have the authority to execute any and
all documents required in its judgment to effectuate the dissolution and
termination of the Partnership. Each Partners shall look solely to the assets
of the Partnership for all distributions with respect to the Partnership and
its capital contributions thereto and share of profits or losses therefrom,
and shall have no recourse therefor against any Partner; provided that nothing
herein contained shall relieve any Partner of such Partner's obligation to pay
any liability or indebtedness owing to the Partnership by such Partner.
12. Notices; Amendment.
A. Any notice which a Partner is required or may desire to give
any other Partner shall be in writing, and may be given by personal delivery
or by mailing the same by United States registered or certified mail, return
receipt required, to the Partner to whom such notice is directed at the
address of such Partner as hereinabove set forth, subject to the right of a
Partner to designate a different address for itself by notice similarly given.
Any notice so given by United States mail shall be deemed to have been given
on the second day after the same is deposited in the United States mail as
registered or certified mail, addressed as above provided, with postage
thereon fully prepaid. Any such notice not given by registered or certified
mail as aforesaid shall be deemed to be given upon receipt of the same by the
party to whom the same is to be given.
B. This Agreement may be amended by written agreement of
amendment executed by all the Partners, but not otherwise.
13. New General Partner. All of the Partners may agree in writing
from time to time to admit to the Partnership one or more new General
Partners. The General Partner may, on behalf of all Partners, cause Exhibit B
hereto and the Partnership's Certificate of Limited Partnership to be
appropriately amended and cause the same to be recorded in the event of each
such appointment. No such addition or substitution of a new General Partner
shall work a dissolution of the Partnership or otherwise affect the continuity
of the Partnership.
14. Miscellaneous. Each Partner hereby irrevocably waives any and all
rights that it may have to maintain any action for partition of any of the
Partnership Property. This Agreement constitutes the entire agreement between
the parties. This Agreement supersedes any prior agreement or understanding
between the parties. This Agreement and the rights of the parties hereunder
shall be governed by and interpreted in accordance with the laws of the State
of Illinois. Except as herein otherwise specifically provided, this Agreement
shall be binding upon and inure to the benefit of the parties and their legal
representatives, successors and assignees. Captions contained in the
Agreement in no way define, limit or extend the scope or intent of this
Agreement. If any provision of this Agreement, or the application of such
provision to any person or circumstance shall be held invalid, the remainder
of this Agreement, or the application of such provision to other persons or
circumstances, shall not be affected thereby. This Agreement may be executed
in several counterparts, each of which shall be deemed an original but all of
which shall constitute one and the same instrument. The opinion of the
independent certified public accountants retained by the Partnership from time
to time shall be final and binding with respect to all computations and
determinations required to be made under Section 7 hereof (including
computations and determinations in connection with any distribution following
or in connection with dissolution of the Partnership). If the Partnership or
any Partner obtains a judgment against any other party by reason of breach of
this Agreement or failure to comply with the provisions hereof, a reasonable
attorneys' fee as fixed by the court shall be included in such judgment. Any
Partner shall be entitled to maintain, on its own behalf or on behalf of the
Partnership, any action or proceeding against any other Partner or the
Partnership (including, without limitation, any action for damages, specific
performance or declaratory relief) for or by reason of breach by such party of
this Agreement, notwithstanding the fact that any or all of the parties to
such proceeding may then be a partner in the Partnership, and without
dissolving the Partnership as a partnership. No remedy conferred upon the
Partnership or any partner in this Agreement is intended to be exclusive of
any other remedy herein or by law provided or permitted, but each shall be
cumulative and shall be in addition to every other remedy given hereunder or
now or hereafter existing at law or in equity or by stature (subject, however,
to the limitations expressly herein set forth). No waiver by a Partner or the
Partnership of any breach of this Agreement shall be deemed to be a waiver of
any other breach of any kind or nature and no acceptance of payment or
performance by a Partner of the Partnership after any such breach shall be
deemed to be a waiver of any breach of this Agreement whether or not such
Partner or the Partnership knows of such breach at the time it accepts such
payment or performance. No failure or delay on the part of a Partner or the
Partnership to exercise any right it may have shall prevent the exercise
thereof by such Partner or the Partnership at any time such other Partner may
continue to be so in default, and no such failure or delay shall operate as a
waiver of any default.
Power of Attorney
The undersigned Partners of JMB/NYC Office Building Associates, L.P., a
limited partnership pursuant to the laws of the State of Illinois, hereby
jointly and severally irrevocably constitute and appoint the General Partner
with full power of substitution, their true and lawful attorney-in-fact, in
their name, place and stead to make, execute, sign, acknowledge, record and
file, on behalf of them and on behalf of the Partnership the following:
(i) A Certificate of Limited Partnership and any other
certificates or instruments which may be required to be filed by the
Partnership or the Partners under the laws of the State of Illinois and any
other jurisdiction whose laws may be applicable;
(ii) Such instruments or documents as may be deemed necessary or
desirable by the General Partner in connection with the termination of the
Partnership's business;
(iii) Any and all amendments of the instruments described in
clauses (i) and (ii) above, provided such amendments either are required by
law to be filed or are consistent with the Agreement of Limited Partnership of
the Partnership as it may exist from time to time, or have been authorized by
the particular Partner or Partners; and
(iv) Any amendment of this Agreement authorized to be made by the
General Partner under this Agreement.
The foregoing grant of authority:
(i) Is a Special Power of Attorney coupled with an interest, is
irrevocable and shall survive the death or incapacity of the Partner granting
the power;
(ii) May be exercised by the General Partner on behalf of each
Partner by a facsimile signature or by listing all of the Partners executing
any instrument with a single signature as attorney-in-fact for all of them;
and
(iii) Shall survive the withdrawal, dissolution, legal incapacity,
bankruptcy or resignation of a Partner from the Partnership or the delivery of
an assignment by a Partner of the whole or any portion of his interest in the
Partnership.
IN WITNESS WHEREOF, the undersigned have executed these Second Amended
and Restated Articles of Limited Partnership of JMB/NYC Office Building
Associates, L.P. as of the day and year first above written.
General Partner Limited Partners
CARLYLE-XIV MANAGERS, INC., CARLYLE-XIII ASSOCIATES, L.P.,
a Delaware corporation a Delaware limited partnership
NEIL G. BLUHM By: CARLYLE INVESTORS, INC.,
By: ------------- a Delaware corporation,
Neil G. Bluhm Corporate General Partner
President
By:
NEIL G. BLUHM
--------------
Neil G. Bluhm
President
CARLYLE-XIV ASSOCIATES, L.P.,
a Delaware limited partnership
By: CARLYLE INVESTORS, INC.,
a Delaware corporation,
Corporate General Partner
By:
NEIL G. BLUHM
-------------
Neil G. Bluhm
President
PROPERTY PARTNERS, L.P.,
a Delaware limited partnership
By: CARLYLE INVESTORS, INC.,
a Delaware corporation,
General Partner
By:
NEIL G. BLUHM
-------------
Neil G. Bluhm
President
EXHIBIT A
1. An approximate 1-1/2 acre site bounded by the Helmsley Building located on
Park Avenue on the west, East 46th Street on the north, Lexington Avenue on
the east and East 45th Street on the south in the Grand Central District of
Midtown Manhattan, New York, New York and known as 237 Park Avenue.
2. An approximate 2.1 acre site bounded by the Avenue of the Americas on the
west, West 52nd Street on the north and West 51st Street on the south in the
Rockefeller Center District of Midtown Manhattan, New York, New York and known
as 1290 Avenue of the Americas.
3. A leasehold estate in an approximately 1.7 acre site bounded by Broadway on
the west, Beaver and Marketfield Streets on the north, Broad and New Streets on
the east and Stone Street on the south in the Financial District of Downtown
Manhattan, New York, New York and known as 2 Broadway.
4. The lessor's estate in the approximately 1.7 acre site described in 3
above.
EXHIBIT B
AMOUNT OF AGREED PARTNERSHIP
CAPITAL CONTRIBUTION SHARE
GENERAL PARTNER
Carlyle-XIV Managers, Inc. $ 100 1%
LIMITED PARTNERS
Carlyle-XIII Associates, L.P. $42,014,983 24.75%
Carlyle-XIV Associates, L.P. $84,029,965 49.5%
Property Partners, L.P. $42,014,983 24.75%
SETTLEMENT AGREEMENT
This Agreement (this "Agreement") made and entered into
this 21st day of April, 1993 by and between Gables Corporate
Plaza Associates, a Florida general partnership consisting of
Carlyle Real Estate Limited Partnership-XIII, an Illinois limited
partnership ("Carlyle"), and Gables Corporate Plaza, Ltd., a
Florida limited partnership, for and on behalf of itself, its
successors and assigns, (hereinafter sometimes collectively
referred to as "Gables Associates" or "Borrower"), Gables
Corporate Plaza, Ltd., a Florida limited partnership ("Gables
Limited'') and Aetna Life Insurance Company, a Connecticut
corporation, for and on behalf of itself and its successors and
assigns (hereinafter referred to as "Aetna").
W I T N E S S E T H:
WHEREAS, Southeast First National Bank of Miami, a
national banking association ("Southeast") extended a loan to
Gables Corporate Plaza, a Florida general partnership ("GCP") in
the amount of Twelve Million Dollars ($12,000,000.00), evidenced
by a Promissory note dated July 7, 1981 (the "First Note");
WHEREAS, on July 7, 1981, GCP executed and delivered to
Southeast a mortgage (the "First Mortgage") securing payment of
the First Note to Southeast. The First Mortgage was recorded in
Official Records 11151, Page 40 of the Public Records of Dade
County, Florida;
WHEREAS, to further secure the payment of the First
Note, GCP executed and delivered to Southeast that certain
Conditional Assiqnment of Rents and Leases (the "First Rents
Assignment") assiqning to Southeast any right, title and interest
of GCP in, to and under all leases affecting the Property (as
hereinafter defined) and granting the right to receive and
collect all of the rents, income and profits as they become due
from the Property and under any and all leases of all or any part
of the Property, as more particularly set forth in the First
Rents Assignment, which is recorded in Official Records Book
11151, Page 45, of the Public Records of Dade County, Florida;
WHEREAS, Gables Corporate Plaza, Ltd., a Florida
limited partnership ("Gables Limited") acquired title to the
Property by virtue of that certain Quit Claim Deed executed and
delivered by GCP in favor of Gables Limited dated March 9, 1982
and recorded March 31, 1982 in Official Records Book 11396, Page
617 of the Public Records of Dade County, Florida;
WHEREAS, in connection with the acquisition of the
Property by Gables Limited, GCP and Gables Limited executed and
Southeast approved that certain Assumption and Assignment
Acreement dated as of March 9, 1982, and recorded in Official
Records Book 11411, Page 1335 of the Public Records of Dade
County, Florida, whereby among other things Gables Limited
assumed all of the obligations set forth in the loan documents
originally executed by GCP;
WHEREAS, on Auqust 9, 1982, Gables Limited executed and
delivered to Southeast that certain Future Advance Note dated
Auqust 9, 1982 in the original principal amount of One Million
($l,000,000.00) Dollars (the "Second Note");
WHEREAS, the Second Note was executed pursuant to the
provisions of Paraqraph 16 of the First Mortgage which allows for
future advances to be made up to a maximum of one hundred fifty
percent (150%) of the original principal balance;
WHEREAS, on August 9, 1982, Gables Limited executed and
delivered to Southeast that certain Notice of Advances to be made
dated August 9, 1982, and recorded Auqust 10, 1982, in Official
Records Book 11523, Page 2073, of the Public Records of Dade
County, Florida (the "Notice of Advances to be Made");
WHEREAS, on Auqust 9, 1982, Gables Limited executed and
delivered to Southeast that certain UCC-l Financing Statement
recorded on August 16, 1982 with the Secretary of State, State of
Florida under File Number 1820113943 (the "First Gables Limited
UCC-1-State"). The First Gables Limited UCC-l-State fully
assigned to Aetna pursuant to that certain UCC-3 filed with the
Secretary of State, State of Florida, on March 14, was 1983,
under File Number 3830011076. The First Gables Limited
UCC-l-State was continued pursuant to that certain UCC-3 filed
with the Secretary of State, State of Florida on August 14, 1987
under File Number 3870055193;
WHEREAS, on or about February 11, 1983, Gables Limited
executed and delivered to Southeast that certain Promissory Note
dated February 11, 1983, in the original principal amount of Five
Million Two Hundred and Fifty Thousand ($5,250,000.00) Dollars
(the "Third Note");
WHEREAS, on February 11, 1983, Gables Limited executed
and delivered to Southeast a mortgage (the "Second Mortgage")
dated February 11, 1983 and recorded February 16, 1983, in
Official Records Book 11700, Page 1564 of the Public Records of
Dade County, Florida in order to secure repayment of the Third
Note;
WHEREAS, on February 11, 1983, Gables Limited executed
and delivered to Southeast, a Supplemental Assiqnment of Rents
and Leases dated the llth day of February, 1983 and recorded on
February 16, 1983 in Official Records Book 11700, Page 1569 of
the Public Records of Dade County, Florida (the "First
Supplemental Assignment of Rents and Leases");
WHEREAS, on February 11, 1983, Gables Limited executed
and delivered to Southeast a UCC-l-Financing Statement recorded
on February 16, 1983 in Official Records Book 11700, Page 1576 of
the Public Records of Dade County, Florida (the "Gables Limited
UCC-l-Local''). The Gables Limited UCC-l-Local was continued and
fully assigned to Aetna pursuant to that certain UCC-3 recorded
in Official Records Book 13553, Page 2549 of the Public Records
of Dade County, Florida;
WHEREAS, on February 11, 1983, Gables Limited executed
and delivered to Southeast a UCC-l-Financing Statement filed on
February 18, 1983 with the Secretary of State, State of Florida
under File Number 1830025592 (the "Second Gables Limited
UCC-l-State"). The Second Gables Limited UCC-l-State was fully
assigned to Aetna pursuant to that certain UCC-3 filed with the
Secretary of State, State of Florida, on March 14, 1983, under
File Number 3830011075. The Second Gables Limited UCC-l-State
was continued and assigned to Aetna pursuant to that certain
UCC-3 filed with the Secretary of State, State of Florida on
January 28, 1988 under File Number 3880005857;
WHEREAS, on February 16, 1983, the First Note, the
Second Note and the Third Note, together with the First Mortgage
and the Second Mortgage were consolidated and modified by that
certain Note and Mortgage Modification Agreement dated February
16, 1983, and recorded February 16, 1983, in Official Records
Book 11700, Page 1579, of the Public Records of Dade County,
Florida ("the First Note and Mortgage Modification Agreement");
WHEREAS, on February 28, 1983, Aetna purchased from
Southeast the First Note, the Second Note and the Third Note
(collectively, the "Notes"), and the First Mortgage and the
Second Mortgage (collectively, the "Mortgages"), as consolidated
and modified by the First Note and Mortgage Modification
Agreement and all related loan documents, and Southeast assiqned
its interest in said loan documents pursuant to that certain
Assignment dated February 28, 1983 and recorded on February 28,
1983, in Official Records Book 11711, Page 417 of the Public
Records of Dade County, Florida (the "Assignment");
WHEREAS, on or about November 7, 1983, Gables
Associates acquired title to the Property by virtue of that
certain Special Warranty Deed executed and delivered by Gables
Limited in favor of Gables Associates dated November 7, 1983,
and recorded November 14, 1983, in Official Records Book 11967,
Page 476, of the Public Records of Dade County, Florida;
WHEREAS, on May 21, 1984, Aetna and Gables Associates
entered into that certain Note and Mortgage Modification
Agreement dated May 21, 1984, and recorded May 25, 1984, and
Official Records Book 12158, Paqe 2601, Public Records of Dade
County, Florida (the "Second Note and Mortgage Modification
Agreement");
WHEREAS, on May 21, 1984, Gables Associates executed
and delivered that certain Supplemental Assiqnment of Rents and
Leases dated May 21, 1984 and recorded on May 25, 1984 in
Official Records Book 12158, Page 2596 of the Public Records of
Dade County, Florida (the "Second Supplemental Assignment of
Rents and Leases");
WHEREAS, on May 21, 1984, Gables Associates executed
and delivered to Aetna that certain UCC-l Financing Statement
filed with the Secretary of State, State of Florida on May 29,
1984 under File Number 1840092087 (the "Gables Associates
UCC-l-State") The Gables Associates UCC-l-State was continued
pursuant to that certain UCC-3 filed with the Secretary of State,
State of Florida, on May 5, 1989 under File Number 89-0000123298;
WHEREAS, on May 21, 1984, Gables Associates executed
and delivered that certain UCC-l Financing Statement to Aetna
recorded on May 25, 1984 in Official Records Book 12158, Page
2610 of the Public Records of Dade County, Florida (the "Gables
Associates UCC-l-Local"). The Gables Associates UCC-l-Local was
continued pursuant to that certain UCC-3 recorded on May 5, 1989
in Official Records Book 14096, Page 1495 of the Public Records
of Dade County, Florida;
WHEREAS, on June 26, 1990, Aetna and Gables Associates
entered into that certain Note and Mortgage Modification
Agreement effective as of the 1st day of March, 1989, and
recorded July 13, 1990, in Official Records Book 14624, Page 848,
of the Public Records of Dade County, Florida (the "Third Note
and Mortgage Modification Agreement");
WHEREAS, in connection with the Third Note and Mortgage
Modification Agreement, Gables Associates executed and delivered
to Aetna that certain Restated Renewal Note dated March 1, 1989,
in the amount of Sixteen Million Six Hundred Sixty-Seven Thousand
Five Hundred Sixteen and 89/100 Dollars ($16,667,516.89), (the
"Restated Renewal Note").
The First Note, First Mortgage, First Rents Assignment,
Second Note, Notice of Advances to be Made, First Gables Limited
UCC-l-State, Third Note, Second Mortgage, First Supplemental
Assiqnment of Rents and Leases, Gables Limited UCC-1-Local,
Second Gables Limited UCC-l-State, First Note and Mortgage
Modification Agreement, Second Note and Mortgage Modification
Agreement, Second Supplemental Assignment of Rents and Leases,
Gables Associates UCC-l-State, Gables Associates UCC-l-Local,
Third Note and Mortgage Modification Agreement, the Restated
Renewal Note and any other documents executed in connection with
the foregoing documents are hereinafter sometimes collectively
referred to as the "Loan Documents".
WHEREAS, due to a default under the Loan Documents,
Aetna has declared the full amount payable under the terms of the
Restated Renewal Note and the other Loan Documents to be due;
WHEREAS, Gables Associates acknowledges and agrees that
Aetna is due Sixteen Million Six Hundred Sixty-Seven Thousand
Five Hundred Sixteen and 89/100 Dollars ($16,667,516.89) as
principal under the Restated Renewal Note plus interest thereon
as set forth in said note, as well as costs expended by Aetna in
connection with the collection of the sums due under the Restated
Renewal Note, including, but not limited to attorneys' fees and
costs; and
WHEREAS, for the purpose of avoiding lengthy and
expensive litigation and in order to reach an amicable resolution
of their differences, Borrower on the one hand, and Aetna on the
other hand, desire to reach a final compromise and settlement of
any and all claims, demands, controversies, disputes, defenses,
counterclaims and causes of action which each of them may have
had, may now have, or may in the future have against the other
arising out of or in connection with the Loan Documents.
NOW, THEREFORE, in consideration of the premises, the
covenants set forth herein, and other good and valuable
considerations as set forth more fully below, the receipt and
sufficiency of which are hereby acknowledqed by each of the
parties hereto, the parties hereby agree as follows:
ARTICLE I
Whereas Clauses and Definitions
1.1 Whereas Clauses. The parties hereto agree
that the above recitals are true and correct, and are hereby
incorporated by reference.
1.2 Certain Defined Terms. As used herein the
following terms shall have the following meanings (such meanings
shall be applicable to both the singular and plural forms of the
terms defined):
1.2.1 "Agreement" shall mean this Settlement
Agreement executed by Gables Associates and Aetna.
1.2.2 "Closing" shall mean the execution and
delivery of all documents contemplated by this Agreement to be
executed and delivered on the Closing Date, and the delivery of
such documents to the parties entitled thereto.
1.2.3 "Closing Date" shall be April 20, 1993.
1.2.4 "Escrow Agent" shall mean Steel Hector & Davis,
with an office and mailing address at 200 South Biscayne
Boulevard, Suite 4000, Miami, Florida 33131-2398, Attn: Thomas
V. Eagan, P.A.
1.2.5 "Escrow Agreement" shall mean that certain
escrow agreement attached hereto as Exhibit B.
1.2.6 "Improvements" shall mean one (1) approximately
106,289 net rentable square foot 13-story office building and
internal deck for approximately 285 automobiles located at 2100
Ponce de Leon Boulevard, Coral Gables, Dade county, Florida, and
any and all other improvements on the Land.
1.2.7 "Land" shall mean the land, the legal
description of which is set forth in Exhibit A attached hereto,
and also including, without limitation, Gables Associates' right,
title and interest (if any) in any walks, ways, strips and gores
of land, streets, alleys, passages, all reversions in adjacent
streets, and all easements and appurtenances whatsoever adjacent
to or in any way belonging, relating or appertaining to any of
the aforesaid real property.
1.2.8 "Leases" shall mean any and all leases,
subleases, licenses or other occupancy agreements (written or
verbal) which grant any possessory interest in any space situated
on the Property and as more particularly described in Exhibit C
attached hereto.
1.2.9 "Lease Summary" shall mean the list of
tenants and Leases set forth in Exhibit C attached hereto.
1.2.10 "Licenses" shall mean all permits,
certificates, authorizations, approvals and licenses necessary
to operate the Improvements, including, but not limited to, those
described in Exhibit D attached hereto.
1.2.11 "Miscellaneous Property" shall; mean all
miscellaneous property related to the Land or the Improvements
constructed thereon, including, but not limited to the books and
records; contract rights; claims and counterclaims against third
parties or to the design or construction of the Improvements;
escrow accounts and other deposits and accounts with respect to
the Property; appraisals; surveys; site pians; plans and
specifications (including construction and as-built plans and
specifications); the most recent landscape designs and
architectural drawinqs relative to the Land or the Improvements;
unpaid insurance proceeds and condemnation awards relative to the
Land or the Improvements except as otherwise provided in this
Agreement; Licenses; third party warranties and guaranties (to
the extent assignable); general intangibles and goodwill of every
nature used or usable in connection with the Land or the
Improvements; utility agreements and allocations; development
rights or orders; other rights relative to the Land or the
Improvements; and other assets of Gables Associates related to
the Land or the Improvements.
1.2.12 "Permitted Exceptions" shall mean (a) the
exceptions to title listed in-Exhibit E, and (b) the Leases.
1.2.13 "Personal Property" shall mean all
apparatus, equipment, machinery, fittings, furniture,
furnishings, minor movables, fixed asset supplies and inventories
and other intangibles and articles of personal property of every
kind and nature whatsoever attached to or located on the Land and
used or usable in connection With the Property and owned by
Gables Associates, including without limitation the items of
personal property listed in Exhibit F attached hereto, but
excluding the items of personal property owned or stored by the
tenants under the Leases as described in Exhibit C attached
hereto.
1.2.14 "Property" shall mean the Land, the
Improvements, the Personal Property and the Miscellaneous
Property.
1.2.15 "Security Deposits" shall mean the security
deposits paid by tenants to the landlord under the Leases as
described in Exhibit G attached hereto.
1.2.16 "Service Contract" shall mean any service,
maintenance, supply, management, operating or employment
contracts, as amended affecting the use, ownership, management,
leasing, maintenance or operation of all or any part of the
Property, including, without limitation, the contracts listed in
Exhibit H attached hereto.
1.2 17 "Utility Deposits" shall mean any security
deposit held by any electric, telephone, or other utility company
supplyinq services to the Property, as described in Exhibit 1
attached hereto.
1.3 Other Terms All defined terms (denoted by
capitalization or other indication. of special definition such as
quotation marks) used in this Agreement which are not defined
This Article I, shall have the meaning set forth elsewhere in
this Agreement.
ARTICLE II
Preservation of Property
2.1 Appointment of Receiver. In order to best
preserve and protect the Property, the parties have mutually
agreed that Hank Brenner should be appointed receiver (the
"Receiver") by the court, at such time as Aetna files its
foreclosure action. Gables Associates agrees to fully cooperate
with the Receiver in his efforts to take possession of, operate
and maintain the Property.
ARTICLE III
Closing
3.1 Place and Time. The Closing shall take place
at the offices of Steel Hector & Davis, 200 South Biscayne
Boulevard, Suite 4000, Miami, Florida 33131-2398 at 2:00 p.m. on
the Closing Date at which time all instruments due to be made,
executed and delivered at Closing shall be made, executed and
delivered by the respective parties to the Escrow Agent to be
held in escrow pursuant to the terms of the Escrow Agreement. The
parties agree to have a pre-closing telephone conference the day
before the Closing Date commencing at 10:00 a.m.
3.2 Closinq Costs.
3.2.1 Gables Associates' Closing Cost. Gables
Associates shall pay the cost of recording any document required
to satisfy any liens against the Property.
3.2.2 Aetna's Closinq Cost. Aetna shall pay the
cost of any title search fee or title insurance commitment fee,
the cost of the owner's title insurance premium, the expense of
recording the Special Warranty deed, including the documentary
stamp taxes and surtaxes required to be paid in connection with
recording said deed, and the consulting fees incurred by Aetna in
the course of conducting due diligence on the Property.
3.2.3 Attorneys Fees. Except as provided in
Section 14 5, attorneys fees shall be paid by the party incurring
said expense.
3.3. Rents, revenues and receipts
(a) Any rents, revenues and receipts paid to
Gables Associates after the Closing Date shall be applied by
Gables Associates towards the operation and maintenance of the
Property and the debt service owed pursuant to the Loan
Documents; provided, however, that after April 30, 1993, all such
rents, revenues and receipts shall be paid by Gables Associates
to the Receiver.
(b) Insurance Proceeds Any proceeds of loss of
rent or business interruption insurance shall be payable to Aetna
regardless of the period during which the loss is sustained.
3.3 1 Security Deposits. At the time that the
Receiver is appointed, Gables Associates shall transfer to the
Receiver all Security Deposits and advance rent under the Leases,
which have not been applied by Gables Associates under the terms
and conditions of the Leases.
ARTICLE IV
Deliveries
4.1 Gables Associates Deliveries. Gables Associates
will furnish to Aetna on or before the Closing Date, the
following:
4.1.1 Leases. Copies of the Leases, identified
in Exhibit C and letters of intent or other information relating
to the Leases or prospective leases for office space in the
Property, including, without limitation, any and all side letters
concerning concessions given to tenants whether or not such
concessions are still outstanding.
4.1.2 Taxes. Copies of the 1991 and 1992 real
estate and personal property tax statements for the Property.
4.1.3 Survey. Copy of Gables Associates' most
recent survey of the Land.
4.1.4 Utility Bills. Copies of the most recent
utility bills regarding the Property
4.1.5 Service Contracts. Copies of all Service
Contracts.
4.1.6 Licenses. Copies of all Licenses
4.1.7 Warranties and Guaranties Copies of all
warranties and guaranties relating to the Property.
4.1 8 Permits To the extent in Gables
Associates' possession or control, copies of building permits,
Zoning variances (if any), certificates of occupancy, subdivision
plats, governmental permits, approvals, development orders,
orders, certificates and other licenses relating to the
construction, use, occupancy and operation of the Property and
other correspondence with governmental author ties related to the
foregoing (including, without limitation, any default notices)
4.1.9 Certificates of Occupancy Copies of all
certificates of occupancy relating to the Property.
4.1.10 Insurance Policies. Copies of all
insurance policies relating to the Property.
4.1.11 Orqanizational Documents. Copies of the
partnership agreements for Gables Associates, Carlyle Real Estate
Limited Partnership-XIII, an Illinois limited partnership and
Gables Limited, as well as the articles of incorporation and
by-laws of JMB Realty Corporation, a Delaware corporation.
ARTICLE V
Gables Associates' Representations, Warranties and Covenants
5.1 The Property. Gables Associates represents,
warrants and covenants with Aetna as of the date hereof as
follows:
5.1.1 Ownership. Gables Associates is the owner
of good and marketable title in fee simple to the Land and
Improvements free and clear of all liens, claims and other
encumbrances whatsoever, except the Permitted Exceptions and such
other matters as Gables Associates shall cause to be removed at
or prior to Closing. The Personal Property and the Miscellaneous
Property are owned by Gables Associates free and clear of any and
all liens, encumbrances and security interests other than the
Permitted Exceptions and such other matters as Gables Associates
shall cause to be removed at or prior to the Closing.
5.1.2 Leases. As of the date hereof, there are
no rights to use, occupy or purchase the Land or Improvements or
any portion thereof other than the Leases and the rights of
Gables Associates, and the Lease Summary is a true, accurate and
complete list of all Leases, true, complete and correct copies Of
which will be submitted to Aetna pursuant to Section 4.1.1. As of
the date hereof, except as otherwise set forth in the r ease
Summary attached hereto as Exhibit C: (a) the Leases are in full
force and effect; (b) the landlord is not in default in the
performance of any covenant, agreement or condition contained in
any of the Leases; (c) the tenants are not n default in the
performance of any covenant, agreement or condition contained in
any of the Leases; and (d) all tenants are in possession of their
respective premises.
5.1.3 Contracts and Warranties. Exhibit K is a
correct and complete list of all warranties and guaranties
pertaining to the Property, true and correct copies of which will
be delivered to Aetna pursuant to Section 4.1 7. Exhibit H is a
correct and complete list of all Service Contracts, true and
correct copies of which will be delivered to Aetna pursuant to
Section 4.1 5. Except as set forth on Exhibit H, the Service
Contracts are in full force and effect and unmodified, no default
exists under any Service Contract, and the Service Contracts are
freely assignable, do not run with the Land, and can be cancelled
upon no more than thirty (30) days notice from either party.
Gables Associates represents that it has not sent or received any
notice regarding the cancellation or termination of any Service
Contract.
5.1.4 Ability to Perform. Gables Associates
has full power to execute, deliver and carry out the terms and
provisions of this Agreement and has taken all necessary action
to authorize the execution, delivery and performance of this
Agreement. The execution, delivery and performance of this
Agreement by Gables Associates, in accordance with its terms will
not violate its partnership agreement, or any law, regulation,
contract, agreement, commitment, order, judgment or decree to
which Gables Associates is a party or by which it is bound. The
persons executing this Agreement on behalf of Gables Associates
have been duly authorized to do so, and this Agreement
constitutes the legal, valid and binding obligation of Gables
Associates enforceable in accordance with its terms, except as
limited by applicable bankruptcy or other laws relating to
creditors rights generally. No order, permission, consent,
approval, license, authorization, registration or validation of,
or filing with, or exemption by, any governmental agency,
commission, board or public authority is required to authorize,
or is required in connection with, the execution, delivery and
performance of this Agreement by Gables Associates or the taking
by Gables Associates of any action contemplated by this
Agreement. Upon request from Aetna or its counsel, Gables
Associates shall deliver reasonable evidence of Gables
Associates' authority to execute and deliver the documents
necessary to consummate the Closing.
5.1.5 Solvency If requested by Aetna, Gables
Associates shall provide Aetna with a solvency affidavit
regarding Gables Associates at the time of closing in the form
attached hereto as Exhibit L, or Gables Associates shall provide
such other affidavit as the title insurance underwriter may
reasonably require
5.1 6 No Actions. Except as set forth in
Exhibit M attached hereto and made a part hereof, Gables
Associates has received no written notice of and there do not
exist, any actions or proceedings pending or threatened against
or relating to the construction. ownership, use, possession or
operation of the Property, including, without limitation, actions
for condemnation of the Property or any part thereof.
5.1.7 Compliance with Law Except as itemized
in Exhibit N attached hereto and made a part hereof, Gables
Associates has received no written notice from any governmental
authorities and has no other reason to believe that the present
physical condition or use of the Property is in violation of an
laws, regulations, permits, orders and insurance requirements
applicable to such use. Gables Associates has received no
written notice and otherwise has no reason to believe that any of
the permits, certificates, licenses and approvals required for
the use and operation of the Property for its existing uses, is
not in full force and effect. Without limiting the generality of
the foregoing, Gables Associates has received no written notice
or citation:
(a) from any federal, state, county or municipal
authority alleging any fire, health, safety, building, pollution,
environmental, zoning or other violation of any law, regulation,
permit, order or directive in respect of the Property or any part
thereof;
(b) concerning the condemnation or any threatened
condemnation of any part of the Land and Improvements, or the
widening, change of grade of any roads, rights-of-way, etc. or
concerning any special taxes or assessments levied against the
Land and Improvements or any part thereof;
(c) from any insurance company or bonding company
of any defects or inadequacies in the Property or any part
thereof, which would adversely affect the insurability of the
same or of any termination or threatened termination of any
policy of insurance or bond;
(d) concerning any change in the land use
classification or the zoning classification of the Land and
Improvements or any part thereof;
(e) concerning the possible or anticipated
revocation, non-renewal or disapproval of any of the Licenses; or
(f) of any other impediment to the continued use
and operation of the Property for its existing uses
If any such written notice is received prior to
the Closing, Gables Associates shall notify Aetna promptly
thereof, and, to the extent that actions are required thereby to
be taken by Gables Associates prior to Closing, shall cause such
actions to be taken; provided, however, that Gables Associates
shall not be required to advance any of its monies in order to
comply with any such notice.
5.1.8 Utilities. There is no pending or
threatened curtailment of any utility service presently being
supplied to the Land and Improvements.
5.1.9 Assessments. No special assessments for
public improvements have been made against the Property which are
unpaid, including, without limitation, those for construction of
sewer, water and other utility lines, streets, sidewalks and
curbs, and there are no pending liens on account thereof.
5.1.10 Environmental. Gables Associates
represents and warrants that: (a) Gables Associates has not been
involved in, and Gables Associates is not aware of any prior
owner of the Property having been involved in the generation,
storage, transportation, disposal, release or discharge of
hazardous materials, hazardous waste, hazardous substances, solid
waste or pollution upon, in, over or under the Property and that,
to the best of Gables Associates' knowledge, no such materials or
pollution has migrated to the Property from neighboring property;
(b) Gables Associates has not received any notice from any
governmental agency or authority or from any tenant or other
occupant with respect to any generation, storage, transportation,
disposal, release or discharge of hazardous materials, hazardous
waste, hazardous substances, solid waste or pollution upon, in,
over or under the Property; (c) there is no asbestos or
asbestos-containing materials, PCB's, radon gas, urea
formaldehyde foam insulation or underground storage tank(s) at or
within the Property; (d) that Gables Associates and any tenant of
the Property is not and will not become involved in operations at
the Property or at other
locations owned or operated by Gables Associates which would lead
to the imposition on Gables Associates of liability under Chapter
403, Florida Statutes. the Resource Conservation and Recovery
Act, 42 U.S.C. 6901 et seq. ("RCRA"), the Comprehensive
Enviromental Response Compensation and Liability Act of 1980, 42
U.S.C. 9601 et seq. ("CERCLA") or any other federal, state or
local ordinances, laws or regulations regarding environmental
matters or hazardous substances, (e) Gables Associates will
cooperate with the Receiver in complying with, and will take such
action as may be required in order to promptly comply with, the
requirements of Chapter 403, Florida Statutes, RCRA, CERCLA and
all federal, state and local laws and regulations regarding
environmental matters or hazardous substances as the same may
each be amended from time to time (including all federal, state
and local laws and regulations regarding underground storage
tanks), and all such laws and regulations relating to asbestos
and asbestos-containing materials, PCB's, radon gas, urea
formaldehyde foam insulation (provided, however, Gables
Associates shall not be required to spend any monies in order to
comply with any of the foregoing requirements), and wil' notify
Aetna promptly in the event of any release or discharge or a
threatened release or discharge of hazardous materials, hazardous
wastes, hazardous substances, solid waste or pollution upon, in,
over or under the Property as those terms are defined in Chapter
403, Florida Statutes and any federal, state or local ordinances,
laws or regulations regarding environmental matters or hazardous
substances, or the presence of asbestos or asbestos-containing
materials, PCB's, radon gas or urea formaldehyde foam insulation
at the Property, or of the receipt by Gables Associates of any
notice from any governmental agency or authority or from any
tenant or other occupant or from any other person or entity with
respect to any alleged such release or presence promptly upon
discovery of such release, or promptly upon receipt of such
notice, and will promptly send Aetna copies of all results of any
tests regarding same on the Property and (f) there are no
electrical transformers located on the Property.
5.1.11 Landfill. The Property has not been used
as a solid waste or liquid waste landfill, or trash dump.
5.1.12 Licenses. Exhibit D contains a correct
and complete list of all Licenses, true and correct copies of
which will be delivered to Aetna pursuant to Section 4.1.6.
5.1.13 Brokeraqe Commissions. There are no
commitments, agreements or contracts for brokerage commissions or
similar compensation due (or to become due in connection with
renewals of leases) tO any broker or similar person in connection
with any Lease and future Lease, except as set forth in Exhibit
C.
5.1.14 Orqanization and Authority. Gables
Associates is a general partnership duly formed and validly
existing in Florida, with full power and authority to carry on
its business as now conducted.
5.1.15 Zoning. Gables Associates represents that
the Property is zoned CB (commercial use) pursuant to the City of
Coral Gables Zoning Code, that said classification allows for
office building use, and there are no ordinances or regulations
affecting the Land and the Improvements which would serve to
restrict or prohibit the use of the Land and the Improvements in
conformity with such zoning. Gables Associates represents that
to the best of Gables Associates' knowledge, the Property is in
compliance with zoning laws, as well as all other applicable
laws, ordinances and regulations.
5.1.16 Commitments to Governmental Authorities.
Gables Associates has made no commitments to any governmental
authority, utility company, school board, church or any other
religious body regarding the Property which would impose an
obligation upon Aetna or its successors or assigns to make a
contribution of money or dedications of land, or to construct,
install or maintain any improvements of a public or private
nature on or off the Property.
5.1.17 Notices. Gables Associates has not
received any written notices from any insurance company of any
defects or inadequacies in the Property or any part thereof which
would materially and adversely affect the insurability of the
Property or the premiums for the insurance thereof, and no notice
has been given by any insurance company which has issued a policy
with respect to any portion of the Property or by any board of
fire underwriters (or other body exercising similar functions)
requesting the performance of any alterations or other work which
has not been complied with.
5.1.18 Possession. There are no parties in
possession of any portion of the Property except for the tenants
described in Exhibit C attached hereto and made a part hereof,
and such other tenants as may be added pursuant to Section 9.1.
5.1.19 Disclosure. Except for the condition of
the commercial leasing market in Dade County, Florida, there is
no fact regarding the Property within Gables Associates'
knowledge which adversely affects the Property in a material
fashion which has not been set forth in this Agreement or an
exhibit hereto or in a certificate or writing furnished in
connection herewith. In the event that Gables Associates becomes
aware of any fact regarding the Property which adversely affects
the Property in a material fashion, Gables Associates
will promptly notify Aetna, in writing, of such fact
5.1.20 Other Contracts. Gables Associates is not
obligated under any contract; or agreement which has not been
disclosed in connection herewith or a true copy of which have
been previously delivered to Aetna.
5.1.21 Condition of Property Gables Associates
represents that the Propersy (including the plumbing systems and
fixtures, electrical systems and fixtures and sprinkler systems
(if any)) is in good condition and repair, is termite free and
that all electrical and mechanical appliances and equipment of
whatever kind and nature are in good working condition, and that
the Improvements are free from structural defect.
ARTICLE VI
Aetna's Representations, Warranties and Covenants
Aetna represents. warrants and covenants with Gables
Associates as of the date hereof as follows:
6.1 Organization and Authority. Aetna is a Connecticut
corporation duly formed and validly existing under the laws of
the State of Connecticut with full power and authority to carry
on its business as now conducted and as is contemplated from and
after the consummation of the transaction which is the subject of
this Agreement.
6.2 Ability to Perform. Aetna has full power to
execute, deliver and carry out the terms and provisions of this
Agreement and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement The
persons executing this Agreement on behalf of Aetna have been
duly authorized to do so, and this Agreement constitutes the
legal, valid and binding obligation of Aetna enforceable in
accordance with its terms, except as limited by applicable
bankruptcy or other laws relating to creditor's rights generally.
No order, permission, consent, approval, license, authorization,
registration or validation of, or filing with, or exemption by,
any governmental agency, commission, board or public authority is
required to authorize, or is required in connection with the
execution, delivery and performance of this Agreement by Aetna or
the taking by Aetna of any action contemplated by this Agreement.
6.3 No Violation. The execution, delivery and
performance of this Agreement, in accordance with its terms, will
not violate, conflict with or result in the breach of any
provision of the articles of incorporation of Aetna, or any law,
regulation, contract, agreement, commitment order, judgement or
decree tO which Aetna is a party or by which it may be bound
ARTICLE VII
Conditions Precedent to Closinq
7.1 Aetna's Conditions Precedent to Closing The
following shall be express conditions precedent to the
obligations of Aetna under this Agreement, and are for the
benefit of Aetna but may be waived by Aetna in whole or in part
in its sole discretion:
7.1 1 No Default No breach or default under
this Agreement shall have occurred on the part of Gables
Associates which is continuing uncured at Closing.
7.1.2 Closinq Obliqations and Representations.
Gables Associates shall have complied in all respects with the
requirements of Article IV and Article X, as of the Closing Date,
and the representations and warranties in the certificate to be
delivered under Section 10.7 shall be true and correct in all
respects as of the Closing Date.
7.1.3 Inspections. Gables Associates shall
provide to Aetna and/or its designee access to the Property at
reasonable times prior to the Closing for the purposes of
conducting inspections of same, including, but not limited to
termite inspections, roof inspections, structural integrity
inspections, environmental inspections and other inspections of
the Property
7.1.4 Title. Good, marketable and fee simple
title of record and in fact to the Land and the Improvements
shall be vested in Gables Associates at Closing, subject only to
the Permitted Exceptions and such other matters as Gables
Associates shall cause to be removed at or prior to Closing. In
the event that title is found to be other than good and
marketable, free from liens, reverters, restrictions and other
encumbrances and clouds, except for the Permitted Exceptions, it
shall be the duty and obligation of Gables Associates to remove
any such defects or objections on or before the Closing Date.
7.1.5 Estoppel Certificates. Gables Associates
shall cooperate with the Manager in obtaining and delivering to
Aetna prior to the Closing Date estoppel certificates from each
utility company furnishing services to any portion of the
Property in the form attached hereto as Exhibit O, and in the
event that the Manager is unable to obtain said estoppel
certificates, Gables Associates shall use its best efforts to
obtain and deliver same to Aetna prior to the Closing. In the
event that the Manager or Gables Associates are not able to
deliver said utility estoppel certificates to Aetna prior to the
Closing Date, Gables Associates shall substitute its own estoppel
letter in the form attached hereto as Exhibit O.
7.1.6 Possession. At the Closing, Gables
Associates shall deliver full possession of The Property to Aetna
(i) free of all tenants or occupants, except the tenants under
the Leases reflected on Exhibit C and such other tenants as may
be added pursuant to the provisions of Section 9.1, and (ii) not
subject to any encumbrance other than the Permitted Exceptions.
7.1.7 Tenant Estoppel Letters. Gables
Associates shall use its best efforts to obtain and deliver
estoppel letters in the form attached hereto as Exhibit P prior
to the Closing from all of the tenants identified in Exhibit C.
Notwithstanding the foregoing, in the event that Gables
Associates is unable to deliver said tenant estoppel letters to
Aetna at or prior to the Closing from all of the tenants
identified in Exhibit C, Gables Associates shall substitute its
own estoppel letter in the form attached hereto as Exhibit P for
those tenants from whom Gables Associates was unable to obtain
estoppel letters.
7.1.8 No Material Chanqe. No material
adverse change shall have occurred with respect to the Property
since the date hereof.
7.1.9 Closing Documents.
7.1.9.1 Property Conveyance. The Land and
the Improvements shall be conveyed by Special Warranty Deed, the
Personal Property shall be conveyed by a proper Bill of Sale
(with warranties of title) and the Miscellaneous Property,
Licenses, Leases and Service Contracts shall be conveyed by a
proper assignment.
7.1.9.2 Removal of Liens. Gables Associates
shall cause to be made and delivered to Aetna an Affidavit of No
Lien (Mechanic's Lien Affidavit) as to the Land and the
Improvements in the form attached hereto as Exhibit Q. Gables
Associates shall deliver to Aetna original lien waivers as well
as releases from all contractors, subcontractors and/or
materialmen who have not been paid and who have performed work or
furnished materials prior to the Closing and/or for work in
progress or who have pending liens on the Property.
7.1.10 No Cancellation of Lease. No
condemnation or casualty which allows any tenant to cancel its
lease pursuant to the terms thereof shall have occurred.
7.1.11 UCC Search. Gables Associates shall
deliver to Aetna prior to the Closing Date a UCC Financing
Statement search indicating that there are no outstanding
financing statements or security agreements regarding Gables
Associates or the Property which remain unsatisfied other than
the UCC-ls in favor of Aetna, or provide payoff letters
(satisfactory to Aetna) from any secured party for any
outstanding financing statements at time of Closing.
7.1.12 Stipulation and Final Judgment of
Foreclosure. Gables Associates hereby instructs its counsel to
execute the Stipulation and Final Judgment in form and substance
as appears on Exhibit V attached hereto and made a part hereof
(the "Stipulation") and to deliver the Stipulation in escrow to
the Escrow Agent at time of Closing, to be held pursuant to the
terms of the Escrow Agreement.
7.1.13 Stipulation and Joint Motion for Ex
Parte Appointment of Receiver. Gables Associates hereby
instructs its counsel to execute the Stipulation and Joint Motion
for Ex Parte Appointment of Receiver in form and substance as it
appears on Exhibit X attached hereto and made a part hereof and
to deliver the Stipulation and Joint Motion for Ex Parte
Appointment of Receiver to Aetna at the time of Closing. Aetna
shall be free to file the Stipulation and Joint Motion for Ex
Parte Appointment of Receiver at any time after the filing of its
foreclosure action to enforce the Loan Documents on April 30,
l993 .
7.2 Gables Associates' Conditions Precedent to
Closing. The following shall be express conditions precedent
to the obligations of Gables Associates under this Agreement, and
are for the benefit of Gables Associates, but may be waived by
Gables Associates, in whole or in part in its sole discretion:
7.2.1 No Default. No breach or default under
this Aqreement shall have occurred on the part of Aetna which is
continuing and uncured at Closing.
7.2.2 Closing Obligations and Representations.
Aetna shall have complied in all respects with the requirements
on Aetna's part to be complied with under Article XI hereof, and
the representations and warranties of Aetna contained in the
certificate to be delivered under Section 11.1 shall be true and
correct in all respects as of the Closing Date.
ARTICLE VIII
Insurance, Casualty, Condemnation
8.1 Fire or Casualty. If the Property or any
portion whereof is damaged or destroyed by fire or other casualty
prior to the Closing, Aetna shall proceed with the transaction
contemplated herein, and Aetna shall be entitled to such
insurance as is paid on the claim of loss.
8.2 Condemnation. In the event that all or any
portion of the Property becomes the subject of a condemnation
proceeding or threat thereof by a public or quasi-public
authority having the power of eminent domain prior to the
Closing, Gables Associates shall immediately notify Aetna whereof
in writing, and Aetna shall proceed with the transaction
contemplated herein and shall be entitled to receive all proceeds
of any award or payment in lieu thereof resulting from such
proceedings or threat thereof.
ARTICLE IX
Obligations Pending Closing
9.1 Access, Riqht of Inspection and Termination.
(a) Aetna, its engineers, appraisers, attorneys
and other representatives shall have the right, at Aetna's sole
cost, risk and expense, to enter onto the Property during normal
business hours on reasonable notice and in a reasonable manner,
without interference with the operation of the Property, for the
purpose of making such tests and inspections as Aetna deems
necessary or appropriate in connection with this Agreement.
(b) Gables Associates shall make all of its
files and records relating to the operation of the Property
available to Aetna for copying, which obligation shall survive
the Closing.
9.2 Notice of Changes. Each party shall promptly
give written notice to the other of the occurrence of any event
materially affecting the substance of the representations made
hereunder.
ARTICLE X
Gables Associates' Closing Obligations
10.1 Deliveries at Closing. At the Closing,
Gables Associates shall deliver or cause to be delivered the
following documents to the Escrow Agent to be held in escrow
pursuant to the terms of the Escrow Aqreement:
10.1.1 an executed and acknowledged Special
Warranty Deed in form and substance as appears on Exhibit S
transferring fee simple title to the Land and Improvements to
Aetna or its designee, subject only to the Permitted Exceptions;
Notwithstanding anything to the contrary contained in
this Agreement or the exhibits attached hereto, it is the intent
of the parties hereto that the transfer of title to the Property
from Gables Associates to Aetna shall not act as a merger of
title as to any security interests Aetna may currently hold in
the Property pursuant to the Loan Documents.
10.1.2 an executed and acknowledged assignment
assigning Gables Associates' interest in, among other things, the
Service Contracts, Leases, Licenses, warranties and guaranties in
form and substance as appears on Exhibit T;
10.1.3 an executed and acknowledged assignment
assigning to Aetna all of the Utility Deposits;
10.1.4 an executed and acknowledged Bill of
Sale (with warranties of title) transferring to Aetna the
Personal Property and any remaining items of Miscellaneous
Property not otherwise assigned or conveyed in form and substance
as appears on Exhibit U.
10.1.5 an executed and acknowledged
satisfaction of mortgage in form satisfactory to the title
insurance underwriter from Gables Limited, the holder of a second
mortgage and a third mortgage on the Property.
10.2 Lien Waivers. Gables Associates shall
deliver to Aetna original lien waivers as well as releases from
all contractors, subcontractors and/or materialmen who have not
been paid and who have performed work or furnished materials
prior to the Closing and/or for work in progress or who have
pending liens on the Property.
10.3 Service Contracts. Executed counterparts of
all other Service Contracts other than Service Contracts which
are permitted to be terminated in accordance with this Agreement
or, if Gables Associates is unable to produce the same, a copy of
any such Service Contracts certified by Gables Associates to be
true, correct and complete.
10.4 Tax Receipts. A receipt or receipts from the
appropriate taxing authorities evidencing that all personal and
real property taxes affecting the Property which were due and
payable have been paid.
10.5 Documents. Original copies of the most
recent site plans, surveys, soil and substrata studies,
architectural drawings, plans and specifications, graphic boards,
schematic plans, renderings, engineering plans and studies, floor
plans, landscape plans and other plans or studies of any kind
that relate to all or any part of the Property in the possession
or control of Gables Associates. Gables Associates shall also
deliver (i) original copies of all then effective guaranties and
warranties made by any person for the benefit of Gables
Associates, with respect to the Property or any of its
components, and (ii) originals of all Licenses and Miscellaneous
Property, except that photocopies may be substituted if the
originals are required to be posted at the Property.
10.6 Licenses. The Licenses, provided that
photocopies may be substituted if the originals are required to
be posted at the Property.
10.7 Certificate of Article V Representations,
Warranties and Covenants. A certificate of Gables Associates
updating the representations and warranties contained in Article
V hereof.
10.8 Estoppel Certificates. The estoppel
certificates or other deliveries described in Sections 7.1.5 and
7.1.7 to the extent not previously delivered.
l0.9 Other Documents. Any other document (i)
required by this Agreement to be delivered by Gables Associates
or (ii) otherwise reasonably necessary to consummate the
transaction contemplated hereby and in form reasonably acceptable
to Aetna and Aetna's counsel.
l0.10 Authority. Evidence of Gables Associates'
authority for the execution of this Agreement and the
consummation of the transactions contemplated by this Agreement
including such evidence as may be reasonably requested by Aetna
and Aetna's counsel.
l0.11 No Foreign Person. Affidavit, under penalty
of perjury, confirming Gables Associates' United States taxpayer
identification number is 36-3298386 and stating that Gables
Associates is not a foreign person, in a form sufficient to
exempt Aetna from the withholding provisions of Section 1445 of
the Code.
10.12 Deliveries required by the Title Commitment.
Satisfactions, releases or other documents required by Attorneys'
Title Insurance Fund, Inc. Title Insurance Commitment bearing
File No. 01-93-10244M, in order to delete all of the requirements
contained in Schedule B-I.
10.13 Delivery of Leases/Rent Roll. To the extent
in Gables Associates' possession, the landlord's original
executed counterparts of all Leases and related documents In
addition, an executed and acknowledged current rent roll for the
Property certified by Gables Associates to be true and correct,
including a statement as to the current status of payment for all
tenants.
10.14 Rent Records. To the extent in Gables
Associates' possession, originals of all rent records (including
Lease summaries in the same format as the Lease Summary attached
as Exhibit C dated as of the Closing Date), and related documents
in the possession or under the control of Gables Associates.
10.15 Letters to Tenants. A sufficient quantity
of original letters to tenants under the Leases, contractors
under Service Contracts, utilities or others, advising such
persons of the transfer of ownership to Aetna and of the address
to which further notices and rental payments are to be made.
10.16 Solvency Affidavit. If requested by Aetna,
Gables Associates shall provide Aetna with the Solvency Affidavit
regarding Gables Associates in the form attached hereto as
Exhibit L, or such other affidavit as may be reasonably required
by the title insurance underwriter.
ARTICLES XI
Aetna's Closing Obligations
At the Closing, Aetna shall deliver to Gables
Associates or as otherwise provided below, or cause to happen:
11.1 Certificate of Aetna's Representations. A
certificate of Aetna updating the representations and warranties
of Aetna contained in Article VI hereof.
11.2 Aetna's Authority. Evidence of Aetna's
authority for the consummation of the transactions contemplated
hereunder including evidence of incumbency and such other
evidence of authority as may be reasonably requested by Gables
Associates.
11.3 Other Documents. All other documents (i)
required by this Agreement to be delivered by Aetna, or (ii)
otherwise reasonably necessary to consummate the transaction
contemplated hereby and in form reasonably satisfactory to Gables
Associates and Gables Associates' counsel on, at or before the
Closing; provided, however, that any request hereunder shall be
made on a timely basis so that Aetna shall have a reasonable
period of time to satisfy such request.
ARTICLE XII
Continuing Obligations
12.1 Sale of Property. After the Closing date,
Gables Associates shall continue to attempt to sell the Property
for a purchase price of at least $8,000,000.00. Should Gables
Associates enter into a contract for sale and purchase on or
before April 30, 1993 and close and disburse the proceeds from
said sale prior to June 30. 1993, Aetna will release its first
mortgage on the Property upon receipt of a sum in the amount of
$7,680,000.00
In the event that the purchase price of $8,000,000.00 is
increased by a figure up to $100,000.00, then Aetna will release
its first mortgage encumbering the Property upon receipt of
$7,680,000.00, plus 20% of said increase.
In the event that the purchase price is increased above
$8,100,000.00 by a figure up to $100,000.00, then Aetna will
release its first mortgage encumbering the Property upon receipt
of $7,680,000.00, plus 20% of the first $100,000.00 above
$8,000,000.00, and 50% of the next $100,000.00 above
$8,100,000.00.
In the event that the purchase price is increased above
$8,200,000.00, then Aetna will release its first mortgage
encumbering the Property upon receipt of $7,680,000.00, plus 20%
of the first $100,000.00 above $8,000,000.00, 50% of the next
$100,000.00 above $8,100,000.00, and any additional monies above
$8,200,000.00, unless Aetna, in writing, agrees to another
arrangement as to the payment of monies in excess of
$8,200,000.00.
Gables Associates hereby represents to Aetna that
Gables Associates, Carlyle Real Estate Limited Partnership XIII,
Gables Corporate Plaza, Ltd., Michael L. Katz, Alberto Socol,
and/or any related or affiliated persons, entities or parties
(hereinafter collectively referred to as the "Seller") will not
be receiving monies or other valuable consideration of any nature
in connection with the sale of the Property, including, but not
limited to the payoff of the second and/or third mortgages
encumbering the Property, real estate brokerage commission(s) or
fee(s), participation interest, or contingent interest, in excess
of the amount set forth below in connection with the specified
purchase price, to wit:
(i) Purchase Price of $8,000,000.00 - Seller will
not receive monies or other consideration in excess of
$320,000.00.
(ii) Purchase Price in excess of $8,000,000.00, but
less than $8,100,001.00 - Seller will not receive monies or other
consideration in excess of $400,000.00.
(iii) Purchase Price in excess of $8,100,000.00 -
Seller will not receive monies or other consideration in excess
of $450,000.00.
12.2 Escrow Agent. The Escrow Agent is hereby
instructed, and the Escrow Agreement shall provide that (i) the
Escrow Agent shall destroy the documents delivered to it in
escrow in the event that Gables Associates sells and closes on
the Property pursuant to the provisions of Sections 12.1, or
otherwise sells and closes on the Property prior to January 5,
1994 on terms and conditions acceptable to Aetna, in Aetna's sole
discretion; and (ii) the Escrow Agent shall release the documents
held in escrow to Aetna on January 5, 1994, which may then be
filed by Aetna in the Circuit Court of Dade County, Florida,
recording in the Public Records of Dade County, Florida, or
otherwise held or disbursed by Aetna, as appropriate, in the
event that Gables Associates has not sold and closed on the
Property pursuant to the provisions of Section 12.1, or otherwise
sold and closed on the property prior to January 5, 1994 on terms
acceptable to Aetna, in Aetna's sole discretion.
12.3 Further Assurances. After the Closing Date,
Gables Associates and Aetna shall cooperate with one another at
reasonable times and on reasonable conditions and shall execute
and deliver such instruments and documents as may be reasonably
necessary in order fully to carry out the intent and purposes of
the transactions contemplated hereby.
12.4 Survival. All representations and warranties
made by Gables Associates under Article V and made by Aetna under
Article VI of this Agreement and in certificates delivered at
Closing pursuant to Section 10.7 by Gables Associates and Section
11.1 by Aetna, as well as all other covenants set forth in this
Agreement shall survive the Closing until,such time as Aetna
acquires title to the Property, excluding the provisions of this
Section 12.4, as well as the provisions of Article XIV which
shall under all circumstances survive the Closing; provided,
however, that Gables Associates and its partners shall have no
personal liability for money damages arising out of the
inaccuracy or falsity of the above described representations and
warranties if Gables Associates o its partners do not take any
action after the date of this Agreement to thwart, deter, hinder
or delay Aetna or its designee from taking title to the Property,
or otherwise frustrate the purpose of this Agreement.
Notwithstanding the foregoing, it is the intention and the agreement
of the parties hereto that the expiration of the above described
representations, warrarnties and covenants then Aetna acquires
title to the Property shall not be applicable to or in any way
effect the representations, warranties or covenants set forth in
the Special Warranty Deed, Bill of Sale, Assignment, Mechanics'
Lien Affidavit, Solvency Affidavit, satisfactions for the
subordinate mortgages described in Section 10.1.5 or any other
affidavit or document required by the title insurance underwriter
(the "Real Estate Closing Documents") or the Stipulation and
Final Judqment of Foreclosure, and the Stipulation and Joint
Motion for Ex Parte Appointment of Receiver.
ARTICLE XIII
Remedies
13.1 Default
13.1.1 Aetna's Default. In the event Aetna
shall fail to perform its obligations hereunder by or on the
Closing Date, and all conditions to such performance have then
been satisfied, Gables Associates shall have the right to pursue
such remedies as are available at law or in equity and to assert
Gables Associates' rights under Section 14.5.
13.1.2 Gables Associates' Default or Force
Majeure. In the event that Gables Associates shall fail to
perform its obligations hereunder by or on the Closing Date, and
that all conditions to Gables Associates' performance have been
satisfied on the Closing Date, and Aetna is not in default
hereunder, Aetna shall have the right to pursue such remedies as
are available at law or in equity, including the riqht to bring
an action for specific performance to enforce this Agreement and
to assert Aetna's rights under Section 14.5, provided, however,
notwithstanding anything to the c ontrary in this Agreement or in
any "Ancillary Agreement" (i.e., any agreement, stipulation,
instrument, pleading, judgment, court order or other document
executed or otherwise created in connection herewith, including,
but not limited to, the Real Estate Closing Documents), the
remedies of Aetna or any other person or entity for a default or
breach under this Agreement or under any of the Ancillary
Documents shall be limited to Aetna's rights against the
Property; and Gables Associates, Carlyle Real Estate Limited
Partnership-XIII ("Carlyle") and Gables Limited and the direct or
indirect general partners of Carlyle or of Gables Limited shall
not have any personal liability under or in connection with this
Agreement or any of the Ancillary Documents, except that each of
said parties shall have personal liability for monetary damages
incurred by Aetna to the extent caused by any respective action
taken by such party after the date of this
Agreement with the intent to thwart, deter, hinder or delay Aetna
or its designee from taking title to the Property notwithstanding
the foregoing: (1) in no event shall any direct or indirect
partner in Carlyle have any personal liability under or in
connection with this Agreement or any Ancillary Document; and (2)
in no event shall a negative capital account or any contribution
or payment obligation of a direct or indirect partner in Gables
Associates (or Carlyle) be deemed to be an asset of Gables
Associates (or Carlyle) or otherwise subject to recourse by Aetna
for the purpose of satisfying any liability or obligation under
the Loan. Documents, this Agreement, or any Ancillary Document.
The provisions of this Section 13.1.2 shall survive any
termination of this Agreement or the consummation of any of the
transactions contemplated hereby, including, but not limited to
the delivery of the Ancillary Documents to Aetna pursuant to the
Escrow Agreement and the recording Of the Special Warranty Deed
in the Public Records of Dade County, Florida.
13.2 Use of Proceeds to Clear Title. All unpaid
taxes, assessments, water charges and sewer rents, together with
the interest and penalties thereon to the time of the Closing,
and all other liens and encumbrances which Gables Associates is
obligated to pay and discharge, together with the cost of
recording or filing any instruments necessary to discharge such
liens and encumbrances of record, shall be paid by Gables
Associates at the Closing
ARTICLE XIV
Miscellaneous Provisions
14.1 Exhibits. Exhibits A through X attached
hereto are hereby made a part hereof as fully as if set forth in
the text of this Agreement (it being understood that no signatory
to this Agreement shall be deemed liable as a result of this
Section 14.1 for any agreement attached as an exhibit hereto to
which such signatory is not a party).
14.2 Purchasinq Entity; Successors and Assigns.
Aetna may assign all of its riqht, title and interest in this
Agreement to a wholly owned subsidiary of Aetna.
14.3 Governinq Law. This Agreement shall be
governed and construed in accordance with the laws of the State
of Florida, without regard to conflict of law principles
thereunder.
14.4 Headings. Headings and captions at the
beginning of each numbered section of this Agreement are solely
for the reference of the parties and are not a part of or affect
the interpretation of this Agreement.
14.5 Attorneys' fees. In the event of any
litigation arising out of a breach or claimed breach of this
Agreement or of the Escrow Agreement, the prevailing party shall
be entitled to recover all costs and expenses incurred, including
reasonable attorneys' fees. References to "reasonable attorneys'
fees" herein shall be deemed to include all such fees in
connection with litigation, including any trial or appeal.
14.6 WAIVER OF JURY TRIAL: AETNA AND GABLES
ASSOCIATES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
THE RIGHT ANY ONE OR MORE OF THEM MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER
OR IN CONNECTION WITH THE LOAN OR ANY AGREEMENT EXECUTED IN
CONJUNCTION THEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY
PARTY HERETO. THIS PROVISION IS A MATERIAL INDUCEMENT TO AETNA
TO ENTER INTO THIS AGREEMENT.
14.7 Counterparts. This Agreement may be executed
in two or more counterparts, each of which shall be an original
but all of which shall together constitute one and the same
agreement.
14.8 Interpretation. This Agreement shall be
construed without regard to any presumption or other rule
requiring construction against the party causing this Agreement
to be drafted. If any words or phrases in this Agreement shall
have been stricken out or otherwise eliminated, whether or not
any other words or phrases have been added, and initialed by the
party against which such words or phrases are construed, this
Agreement shall be construed as if the words or phrases so
stricken out or otherwise eliminated were never included in this
Agreement and no implication or inference shall be drawn from the
fact that such words or phrases were so stricken out or otherwise
eliminated. If any provision of this Agreement shall not be
enforceable or shall be determined by any court to be invalid,
all other provisions of this Agreement shall be unaffected
thereby and shall remain in full force and effect. All terms and
words used in this Agreement, regardless of the number or gender
in which they are used, shall be deemed to include any other
number and any other gender as the context may require.
14.9 Amendment. This Agreement can be modified or
rescinded only by writing expressly referring to this Agreement
and signed by all of the parties.
14.10 Notices. Any notice, report, demand or other
instrument authorized or required to be given or furnished to
either party under this Agreement shall be sent to such party at
the address of such party set forth below and mailed registered
or certified mail, return receipt requested, or overnight
delivery service, postage paid and shall be deemed given on the
earliest to occur of (i) receipt therof (ii) the third day after
deposit in the United States Postal Service with propoer postage
affixed, or (iii) the day following the delivery to such
overnight delivery service. The addresses of the parties are as
follows:
If to Gables Associates:
Carlyle Real Estate Limited
Partnership - XIII
900 North Michigan Avenue
19th Floor
Chicago, Illinois 60611
Attn: Mr. Norman Geller
Gables Corporate Plaza, Ltd.
1401 Brickell Avenue
Suite 803
Miami, Florida 33131
Attn: Mr. Michael L. Katz
with a copy to:
Rubin, Baum, Levin, et al.
200 South Biscayne Boulevard
Suite 2500
Miami, Florida 33131-2398
Attn: Brian L. Bilzin, Esq.
If to Aetna:
Aetna Life & Casualty Insurance Company
City Place
151 Farmington Avenue
Hartford, Connecticut 06156-3419
Attn: Garrett Delehanty, Esq.
with a copy to:
Steel Hector & Davis
200 South Biscayne Boulevard
Suite 4000
Miami, Florida 33131-2398
Attn: Thomas V. Eagan, P.A.
Each party may change the address to which any such notice,
report, demand or other instrument is to be mailed, by furnishing
written notice of such change to the other party.
14.11 Entire Agreement. All understandings and
agreements heretofore made between the parties are merged in this
Agreement. There are no oral promises, conditions,
representations, understandings, interpretations or terms of any
kind as conditions or inducements to the execution of this
Agreement in effect between the parties. No change or
modification of this Agreement shall be valid unless the same is
in writing and signed by the parties hereto. No waiver of any of
the provisions of this Agreement shall be valid unless the same
is in writing and is signed by the party against which it is
sought to be enforced and shall be valid only for the particular
time and circumstances for which it is obtained.
14.10 Document Evidencing Termination. In the
event this Agreement shall be terminated by either party in
accordance with the terms hereof, either party shall, at the
request of the other, execute and deliver an agreement in form
reasonably satisfactory to Gables Associates and Aetna evidencing
such termination. The obligations of Gables Associates and Aetna
under this Section 14.12 shall survive the termination of this
Agreement.
14.13 Time of the Essence. Time is of the essence
in the performance by the parties hereto of each and every
obligation under this Agreement.
14.14 Confidentiality. The parties hereto
acknowledge and agree that the terms and conditions of this
Agreement shall be held in confidence by the parties hereto and
shall not be disclosed to any party at anytime without the
express written consent of the parties hereto. In the event that
either party hereto discloses the terms and conditions of this
Agreement without the prior written consent of the other party
hereto, then the disclosing party shall be held liable for any
and all damages suffered by the other party hereto resulting from
such disclosure, including, but not limited to court costs and
attorneys' fees on the trial court and any appellate levels.
14.15 Liens Unimpaired. The parties hereby agree that
the execution of this Agreement will not discharge, interrupt,
impair, abate or otherwise modify the priority or validity of any
lien or security interest securing payment of the obligations or
indebtedness evidenced and secured by any of the Loan Documents.
The parties further agree that in all respects, the Note, the
Mortgage and all other Loan Documents remain in full force and
effect and unabated and Gales Associates hereby reaffirms its
obligations under the Loan Documents. At such time as the Third
Note and Mortgage Modification Agreement and related Loan
Documents are satisfied of record, Aetna will deliver the
original and Restated Renewal Note marked "Paid and Cancelled" to
Gales Associates.
14.16 No Third Party Beneficiaries. The parties
hereto, for themselves and their heirs, personal representatives,
successors and assigns agree that there are no third party
beneficiaries to this Agreement, any exhibits attached hereto or
any document referenced herein. Nothing in this Agreement or in
any of the documents references herein or to be executed in
connection herewith, whether expressed or implied, is intended to
confer any rights or remedies on any persons, entities or
associations other than the parties to this Agreement, nor is
anything in this Agreement or in any of the documents referenced
herein or to be executed in connection herewith intended to
relieve or discharge the obligation or liability of any third
persons or (except as expressly provided to the contrary herein)
any party to this Agreement or any of the documents referenced
herein or to be executed in connection herewith which survives
the execution of this Settlement Agreement.
14.17 No Admission. The undersigned agree that
the actions by the parties hereto do not constitute an admission
of liability by any party hereto, and that the payment being made
and value being tendered constitutes simply the compromise of
doubtful and disputed claims.
14.18 Advice of Counsel. By their execution of
this Agreement, or any and all counterparts thereof, each of the
parties does hereby expressly acknowledge that they have executed
the same freely and voluntarily and they have had advice of
counsel of their choice, accountants and financial advisors
regarding the effect of the execution and delivery of this
Agreement or a counterpart of it and the originals or
counterparts of the documents attached hereto as exhibits. It is
understood and agreed by the parties hereto that the monetary
facts with respect to which this Agreement is made may hereafter
prove to be different from the monetary facts now known by the
parties hereto or any of them or believed by any of them to be
true. Each of the parties hereto expressly accepts and assumes
the risk of the monetary facts proven to be so different, and
each of the parties hereto agrees that all terms, covenants, and
conditions of this Agreement are in all respects effective and
not subject to termination or rescission by any such difference
in such monetary facts.
14.19 Benefit of Agreement. All of the terms,
covenants, conditions, agreements, and undertakings contained in
this Agreement and in the exhibits attached hereto have been made
by the undersigned solely and exclusively for their benefit, and
no other person, corporation or entity shall, under any
circumstances, be deemed to be a beneficiary, including an
incidental or third party beneficiary, of such terms, covenants,
conditions, agreements, and undertakings.
14.20 Effective Date. The effective date of this
Settlement Agreement shall be the date this Settlement Agreement
has been executed by the last party required to execute this
Settlement Agreement or any counterpart thereof (the "Effective
Date").
14.21 Tolling Agreement. In the event that Aetna,
in its sole discretion, deems it necessary or desirable to
hereafter file an action to collect upon or enforce any of the
Loan Documents, Gables Associates expressly agrees to and does
hereby waive any right or privilege to object or raise any
defense to such an action based, in whole or in part, upon the
passage of time, including, without limitation, any statute of
limitation or the equitable doctrine of laches, and Gables
Associates does hereby further agree not to plead or assert any
defense or objection in such action based, in whole or in part,
upon the passage of time, including, without limitation, any
statute of limitation or the equitable doctrine of laches.
Notwithstanding anything to the contrary in this Agreement, the
provisions of this paragraph 14.21 shall survive the Closing and
any termination of this Agreement and shall remain in full force
and effect for a period of seven (7) years from the date of this
Agreement.
14.22 Waiver of Bankruptcy Stay. Gables
Associates hereby agrees that it shall consent, and shall not
oppose, any request by Aetna for relief of stay in the event that
it seeks relief under the United States Bankruptcy Code at any
time after executing this Agreement. Notwithstanding anything to
the contrary in this Agreement, the provisions of this paragraph
14.22 shall survive the Closing and any termination of this
Agreement and shall remain in full force and effect for a period
of seven (7) years from the date of this Agreement.
14.23 Foreclosure Action. Gables Associates
agrees that Aetna may, at any time after April 30, 1993, file its
foreclosure action to enforce the Loan Documents against the
Property, as well s the Plaintiff's Verified Motion for
Appointment of Receiver and Alternatively for Sequestration of
Rents attached hereto as Exhibit W and made a part hereof.
Gables Associates, Gables Limited and Carlyle Real Estate Limited
Partnership - XIII, an Illinois limited partnership hereby
designate Brian L. Bilzin, Esquire of the law firm of Rubin,
Baum, Levin, et al., 200 South Biscayne Boulevard, Suite 2500,
Miami, Florida 33131-2398 as designated and authorized agent to
accept service of process and all papers to be filed and served
in connection with the above-described foreclosure action, as
well as to sign the Stipulation and Joint Motion for Ex Parte
Appointment of Receiver, and the Stipulation and Final Judgment
of Foreclosure.
14.24 Frustration of Purpose. Gables Associates
represents that it will not take any action to thwart, deter,
hinder or delay Aetna or its designee from taking title to the
Property pursuant to the Special Warranty Deed or otherwise
tristrate the purpose of this Agreement.
IN WITNESS WHEREOF, the parties have executed this
Agreement in multiple original counterparts, each of which shall
be deemed to be an original hereof, as of the day and year first
written above.
Signed, sealed and delivered AETNA LIFE INSURANCE COMPANY
in the presence of: a Connecticut corporation
S/Marianna Petrocelli By: S/Matilda Alfonso
S/ Name: MATILDA ALFONSO
Title: VICE PRESIDENT
(Corporate Seal)
GABLES CORPORATE PLAZA
ASSOCIATES, a Florida general
partnership
Carlyle Real Estate Limited
Partnership-XIII, an Illinois
limited partnership, general
partner
By: JMB Realty Corporation, a
Delaware corporation,
general partner
S/Lisa K. McGready By: S/Julie A. Strocchia
S/Debra A. Jackson Name: JULIE A. STROCCHIA
Title: VICE PRESIDENT
Gables Corporate Plaza, Ltd.,
a Florida limited partnership,
general partner
S/ By: S/Albert J. Socol
Albert J. Socol, general
S/ partner
S/ By: S/Michael L. Katz
Michael L. Katz, general
S/ partner
GABLES CORPORATE PLAZA, LTD.,
a Florida limited partnership
S/ By: S/Albert J. Socol
Albert J. Socol, general
S/ partner
S/ By: S/Michael L. Katz
Michael L. Katz, general
S/ partner
JDS/4013
Exhibit 21
LIST OF SUBSIDIARIES
The Partnership is a partner of Gables Corporate Plaza Associates, a
general partnership which holds title to the Gables Corporate Plaza in Coral
Gables, Florida. The developer of the property is a partner in the joint
venture. The Partnership is a partner of Sherry Lane Associates, a general
partnership which holds title to the Sherry Lane Place Office Building in
Dallas, Texas. The Partnership is a limited partner of Eastridge Associates
Limited Partnership, a limited partnership which holds title to the Eastridge
Apartments in Tucson, Arizona. An affiliate of the General Partners of the
Partnership is the general partner in the joint venture. The Partnership is a
partner of Copley Place Associates, a limited partnership which holds title to
Copley Place in Boston, Massachusetts. The developer of the property is a
partner in the joint venture. The Partnership is a partner of Carrollwood
Station Associates, Ltd., a limited partnership which holds title to the
Carrollwood Station Apartments in Tampa, Florida. The developer of the
property is a partner in the joint venture. The Partnership is a partner of
Jacksonville Cove Associates, Ltd., a limited partnership which holds title to
The Glades Apartments in Jacksonville, Florida. The developer of the property
is a partner in the joint venture. The Partnership is a 20% shareholder in
Carlyle Managers, Inc. and 20% shareholder in Carlyle Investors, Inc.
Reference is made to Note 3 for a description of the terms of such joint
venture partnerships. The Partnership's interest in the joint ventures and
the results of its operations are included in the Consolidated Financial
Statements of the Partnership filed with this annual report.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officers and
directors of JMB Realty Corporation, the managing general partner of CARLYLE
REAL ESTATE LTD. -XIII, do hereby nominate, constitute and appoint GARY NICKELE,
GAILEN J. HULL, DENNIS M. QUINN or any of them, attorneys and agents of the
undersigned with full power of authority to sign in the name and on behalf of
the undersigned officer or directors a Report on Form 10-K of said partnership
for the fiscal year ended December 31, 1993, and any and all amendments
thereto, hereby ratifying and confirming all that said attorneys and agents and
any of them may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned have executed this Power of
Attorney the 23rd day of March, 1994.
JUDD D. MALKIN
- ------------------- Chairman and Director
Judd D. Malkin
NEIL G. BLUHM
- ------------------- President and Director
Neil G. Bluhm
H. RIGEL BARBER
- ------------------- Chief Executive Officer
H. Rigel Barber
JEFFREY R. ROSENTHAL
- ----------------------- Chief Financial Officer
Jeffrey R. Rosenthal
The undersigned hereby acknowledge and accept such power of authority
to sign, in the name and on behalf of the above named officer and directors,
a Report on Form 10-K of said partnership for the fiscal year ended
December 31, 1993, and any and all amendments thereto, the 23rd day of
March, 1994.
GARY NICKELE
------------
Gary Nickele
GAILEN J. HULL
---------------
Gailen J. Hull
DENNIS M. QUINN
---------------
Dennis M. Quinn
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer and
directors of JMB Realty Corporation, the managing general partner of CARLYLE
REAL ESTATE LTD. - XI, do hereby nominate, constitute and appoint GARY NICKELE,
GAILEN J. HULL, DENNIS M. QUINN or any of them, attorneys and agents of the
undersigned with full power of authority to sign in the name and on behalf of
the undersigned officer or directors a Report on Form 10-K of said partnership
for the fiscal year ended December 31, 1993, and any and all amendments
thereto, hereby ratifying and confirming all that said attorneys and agents and
any of them may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned have executed this Power of Attorney
the 26th day of January, 1994.
STUART C. NATHAN
_________________________ Executive Vice President and Director of
Stuart C. Nathan General Partner
A. LEE SACKS
_________________________ Director of General Partner
A. Lee Sacks
The undersigned hereby acknowledge and accept such power of authority to
sign, in the name on behalf of the above named officer and directors, a Report
on Form 10-K of said partnership for the fiscal year ended December 31, 1993,
and any and all amendments thereto, the 26th day of January, 1994.
GARY NICKELE
______________________
Gary Nickele
GAILEN J. HULL
______________________
Gailen J. Hull
DENNIS M. QUINN
___________________________
Dennis M. Quinn