EXHIBIT 10.12 AGREEMENT FOR DEED-IN-LIEU-OF FORECLOSURE
Parties: Angeles Partners XV, a California limited partnership ("Borrower");
and Angeles Mortgage Investment Trust, a California business trust
("Lender")
Property: Property in Cuyahoga County, Ohio. The property is legally
described in Schedule 1 attached hereto.
Date: September 6, 1995
R E C I T A L S
A. Borrower is the owner of fee simple title to the Property. Lender
is the owner and holder of the loan documents (the "Loan Documents") described
in Schedule 2 attached hereto.
B. The Loan Documents secure outstanding principal indebtedness and
accrued interest (the "Indebtedness") in excess of One Million Five Hundred
Thousand Dollars ($1,500,000.00). The maturity date of such Indebtedness is
June 30, 1994 (the "Maturity Date"). Borrower has failed to pay the
Indebtedness by the Maturity Date, and has proposed to Lender that the parties
resolve Borrower's default by providing for the transfer and conveyance of the
Property to Lender in exchange for Lender's agreements and consideration that
are hereinafter provided in order to avoid time-consuming and expensive
litigation.
C. Upon the terms and conditions set forth below, Borrower has agreed
to convey the Property to Lender and to release Lender from any and all rights
and claims arising out if the Loan Documents, and the Lender, upon the
occurrence of the conveyance, has agreed to release and forgive the Indebtedness
of the Borrower as more fully hereinafter provided.
D. Lender, in its sole discretion, may elect to assign some or all of
its rights under this Agreement and/or direct that conveyance of the Property be
made to a purchaser designated by Lender.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
provisions and covenants made herein, and the receipt of other good and valuable
consideration, the receipt and sufficiency whereof are hereby acknowledged,
Borrower and Lender hereby agree that:
Agreements
1. Consideration. The consideration for the conveyance of the Property
to Lender by Borrower shall be (a) Lender's forgiveness of the Indebtedness, and
the release of Borrower from any and all liability under or in connection with
the Loan Documents as more fully provided in the form of instrument attached
hereto as Schedule 3 and made a part hereof ("Release") and (b) a payment of
Five Thousand Dollars ($5,000.00) to Borrower by Lender. It is the intention of
the parties hereto that the delivery of the Deed (as hereinafter defined) and
the Release shall constitute a final and complete settlement of all obligations
between them arising from, related to or connected with the Indebtedness, the
Property and the Loan Documents.
2. Conveyance. The Property shall be conveyed by Borrower to Lender,
or at Lender's option, to Lender's designee, in lieu of Lender foreclosing upon
the Loan Documents by a good and sufficient limited warranty deed ("Deed")
warranting the Property to be free and clear of liens and encumbrances by, from,
through, or under the Borrower except matters of record, including without
limitation, (a) liens and encumbrances of record, (b) zoning ordinances, (c)
easements and rights of way of record, and (d) conditions, limitations, and
restrictions of record.
3. Title Exceptions. Borrower and Lender have been furnished with a
copy of a Preliminary Judicial Report (4851 Van Epps Property) filed in Case No.
279719 in the Court of Common Pleas, Cuyahoga County, Ohio, Angeles Mortgage
Investment Trust, Plaintiff v. Angeles Partners XV, Defendant, showing that in
addition to the Loan Documents, the Property is subject to (a) a lien for
delinquent taxes and assessments for the second half of 1993 and thereafter,
plus penalties and interest, (b) a Lease between Roger M. Haendies, Lessor, and
Burrows Brothers, Inc., Lessee, recorded in Volume 498, page 427 of Cuyahoga
County Records, and (c) a center line exception for Van Epps Road (collectively,
the "Title Exceptions"). On the date the Deed is filed for record, Lender shall
be furnished with an updated Preliminary Judicial Report or other title report
issued by Surety Title Agency, Inc., Order No. ST 10082B, confirming that the
Property is released from the Loan Documents and subject only to the Title
Exceptions (the "Confirmatory Report").
4. Representations and Warranties. Lender represents and warrants that
it has the power and authority to perform this Agreement, and that the officer
signing this Agreement on its behalf, is duly authorized.
5. Escrow. As promptly as possible, and in any event, on or before
September 6, 1995, Lender shall deposit in escrow with the Surety Title Agency,
Inc. ("Title Company") (a) two signed counterparts of the Release, (b) the
signed Note described in Schedule 2 hereof, (c) a satisfaction of the mortgage
described in Schedule 2 hereof in recordable form (the "Satisfaction"), and (d)
$5,000.00. As promptly as possible, and in any event, on or before September 6,
1995, Borrower shall deposit in escrow with the Title Company (a) the Deed and
(b) two signed counterparts of the Release. As promptly after the foregoing
items are deposited in escrow as is possible, and in any event within three (3)
business days after such items are deposited, the Title Company shall consummate
the transaction provided for herein by (a) filing the Deed for record, (b)
delivering to Lender and Borrower each a fully signed counterpart of the
Release, (c) furnishing Lender with the Confirmatory Report, and (d) delivering
to Borrower the signed Note, and (e) filing the Satisfaction for record.
6. Casualty and Condemnation. (a) In the case of damage or destruction
to the Property before the Deed is filed for record, Borrower shall promptly
give Lender written notice of the damage or destruction, together with such
reasonable details of which Borrower may have knowledge, including, without
limitation, an estimate of the reasonable and necessary cost of restoration of
the Property as nearly as practicable to its condition immediately before that
damage or destruction. After Borrower's notice is given, Lender may at its
option terminate this Agreement without further obligation under this Agreement,
or if Lender shall elect not to terminate this Agreement, the parties to this
Agreement shall close the transaction as contemplated in accordance with the
terms of this Agreement and Borrower shall assign to Lender or Lender's designee
all insurance proceeds, including rental loss insurance proceeds, if any, for
the period from and after the Deed is filed until the Property is fully
restored, for such damage or destruction.
(b) If before the Deed is filed, written notice shall be received by
Borrower of any action, suit, or proceeding to condemn or take all or any part
of the Property under the powers of eminent domain, Lender shall have the right
to terminate its obligations under this Agreement by notice in writing to
Borrower given before the Deed is filed. If the Lender shall elect not to
terminate its obligations under this Agreement, Lender shall receive an absolute
assignment on the date the Deed is filed of the entire proceeds of or right to
the condemnation award. Borrower shall convey the Property less that part so
taken or subject to the condemnation proceeding, as the case may be.
7. Prorations. Taxes and assessments, tenant rents and utility costs,
shall not be prorated. The operating account for the Property, including all
tenant rents, deposits and cash, shall be transferred from Borrower to Lender.
8. Expenses. Lender or Lender's designee shall pay the cost of filing
the Deed for record, the escrow fee of the Title Company, and the title
examination charges and related costs of obtaining the Preliminary Judicial
Report appertaining to the Title Exceptions and the Confirmatory Report.
9. Broker. Borrower represents that the Property is not listed for
sale with a real estate broker or agent, and Borrower and Lender agree that upon
the filing of the Deed for record, no commission or other payment shall be due
or payable to any entity or person.
10. Failure of Title. If for any reason whatsoever, the Title Company
cannot furnish Lender with the Confirmatory Report, this Agreement shall
terminate, and Borrower and Lender shall be released of all liabilities and
obligations hereunder, and the $5,000 deposited in escrow by the Lender with the
Title Company, shall be returned to the Lender; provided, however, that (a) the
Lender may waive any title exception or defect which is not among Title
Exceptions, and (b) Borrower shall have thirty (30) days after being advised by
the Title Company of such a title exception or defect not so waived in which to
cure the same.
11. Restoration of Rights and Remedies. If for any reason whatsoever
this Agreement shall terminate and not be consummated in accordance with its
terms and conditions, the Lender shall be fully restored to all rights and
remedies which it has at law or in equity, or pursuant to the terms of the Loan
Documents, and Borrower shall not be entitled to, and shall not raise the
existence or termination of this Agreement as a defense to any action which
Lender may institute against Borrower pursuant to the Loan Documents.
12. Notices. All notices, demands and requests given or required or
desired to be given hereunder shall be in writing and shall be delivered in
person or by overnight express delivery or by United States certified mail,
return receipt requested, postage prepaid, as follows:
To Borrower: Angeles Partners XV
c/o Insignia Financial Group
One Insignia Financial Plaza
Greenville, South Carolina 29602
Attention: John LeBeau
To Lender: Angeles Mortgage Investment Trust
340 N. Westlake Blvd.
Suite 230
Westlake Village, CA 91362
Attention: Ann Merguerian
with a copy to : Squire, Sanders & Dempsey
4900 Society Center
127 Public Square
Cleveland, Ohio 44114
Attention: Mary Yuen-Ng
13. Counterparts. This Agreement may be executed in several
counterparts, each of which shall, for all purposes, be deemed an original. All
of such counterparts, taken together, shall constitute one and the same
agreement.
14. Entire Agreement. This Agreement, the Deed, the Release and any
other instrument delivered hereunder, constitutes the entire agreement of the
parties hereto as to the subject matter hereof, and there are no agreements,
representations, warranties or promises as to the subject matter hereof which
are not set forth herein.
15. Successors and Assigns. This Agreement shall be binding on and
inure to the benefit of Borrower and Lender, their respective successors,
assigns, grantees, and legal representatives.
Borrower and Lender have executed this Agreement by and through their
respective duly authorized officers and partners on September 6, 1995.
ANGELES PARTNERS XV,
a California limited partnership
By: Angeles Realty Corporation II
a California corporation
Its General Partner
By: Robert D. Long, Jr.
Name: Robert D. Long, Jr.
Its: CAO/Controller
ANGELES MORTGAGE INVESTMENT TRUST
a California business trust
By: Anna Merguerian
Name: Anna Merguerian
Its: Vice President
Schedule 1
Legal Description
Situated in the Village of Brooklyn Heights, County of Cuyahoga, State of Ohio
and known as being part of Original Brooklyn Township Lot No. 90, and part of
Sublot No. 10 in Edwin Foote's Estate partitioned as recorded in Volume 65, Page
140 of Cuyahoga County Common Pleas Court Records, and together forming a parcel
of land bounded and described as follows:
Beginning on the centerline of Van Epps Road, at the Southwesterly corner of
land conveyed to Walter P. Gailey and Jean A. Gailey, by deed dated September
11, 1953 and recorded in Volume 7899, Page 647 of Cuyahoga County Records;
thence Southerly along the centerline of Van Epps Road, about 274.15 ft. to the
Southwesterly corner of land conveyed to Charles Kender and Viola Martha Kender,
by deed dated July 12, 1948 and recorded in Volume 6636, Page 497 of Cuyahoga
County Records; thence Easterly along the Southerly line of land so conveyed,
600 ft. to the Southwesterly corner of land conveyed to Associate Japanning by
deed dated December 5, 1972 and recorded in Volume 13176, Page 891 of Cuyahoga
County Records; thence Northerly along the Westerly line of land so conveyed 100
ft. to the Northwesterly corner thereof; thence Easterly along the Northerly
line of land so conveyed to the Southeasterly line of land so conveyed to
Charles and Viola Martha Kender, as aforesaid; thence Northeasterly along the
Southeasterly line of land so conveyed to Charles and Viola Martha Kender, to
the Southeasterly corner of land conveyed to Walter P. and Jean A. Gailey, as
aforesaid; thence Westerly along the Southerly line of land so conveyed, 1219.35
ft. to the place of beginning, as appears by said plat, be the same more or
less, but subject to all legal highways.
Schedule 2
Loan Documents
1. $1,500,000.00 Promissory Note Secured by Mortgage dated as of June 30,
1989 made by Angeles Partners XV to the order of Angeles Mortgage
Investment Trust ("Note").
2. Mortgage, Assignment of Leases and Rents, and Security Agreement recorded
on November 28, 1989 in Volume 89-6574, Page 48 of Cuyahoga County records
("Mortgage").
3. Security Agreement dated as of June 30, 1989 from Angeles Partners XV to
Angeles Mortgage Investment Trust.
Schedule 3
FORGIVENESS OF INDEBTEDNESS, MUTUAL RELEASES
AND COVENANTS NOT TO SUE
THIS FORGIVENESS OF INDEBTEDNESS, MUTUAL RELEASE AND COVENANT NOT TO SUE,
is made as of this 6th day of September, 1995 by and between ANGELES MORTGAGE
INVESTMENT TRUST, a California business trust ("Lender") and ANGELES PARTNERS
XV, a California limited partnership ("Borrower").
RECITALS:
A. Borrower is the owner of fee simple title to the property described
in Exhibit A hereto ("Property"). Lender is the owner and holder of the loan
documents ("Loan Documents") described in Exhibit A hereto.
B. The Loan Documents secure outstanding principal indebtedness and
accrued interest in excess of One Million Five Hundred Thousand Dollars
($1,500,000.00) ("Indebtedness"). The maturity date of such Indebtedness is
June 30, 1994 (the "Maturity Date"). Borrower has failed to pay the
Indebtedness by the Maturity Date, and has proposed to Lender that the parties
resolve Borrower's default by providing for the transfer adn conveyance of the
Property to Lender in order to avoid time-consuming and expensive litigation.
C. Pursuant to the terms of that certain Agreement For Deed-In-Lieu of
Foreclosure between Lender and Borrower dated September 5, 1995, Borrower has
agreed to convey the Property to Lender, or at Lender's option, to Lender's
designee, in consideration for, among other things, Lender's forgiveness of the
Indebtedness, and the release of Borrower from any and all liability under or in
connection with the Loan Documents.
NOW THEREFORE, in consideration of the foregoing recitals and the mutual
provisions and covenants made herein, and the receipt of other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Borrower and Lender hereby agree that:
1. As an inducement to Borrower to convey the Property to Lender, or at
Lender's option, to Lender's designee, by a deed in lieu of foreclosure, and in
consideration thereof, the Lender hereby completely releases adn forgives the
payment of all Indebtedness and of any other indebtedness which the Borrower,
its general partner, their successors and assigns, may be obligated to pay to or
for the benefit of the Lender under the terms of the Loan Documents, or arising
from or in connection with the Property.
2. Lender hereby surrenders, releases, discharges and forever quit-
claims unto Borrower, its general partner, their successors and assigns, any and
all rights, claims, demands, debts, defenses, obligations, or causes of action
which Lender now has or in the future may have against Borrower, arising under
or out of, directly or indirectly, the Indebtedness, the Loan Documents and the
Property.
3. Borrower hereby surrenders, releases, discharges adn forever quit-
claims unto Lender, its successors and assigns, any and all rights, claims,
demands or causes of action which Borrower now has or in the future may have
against Lender, arising under or out of, directly or indirectly, the
Indebtedness, the Loan Documents and the Property.
4. Lender shall not hereafter at any time whatsoever, directly or
indirectly, commence or prosecute, or aid in the commencement or prosecution of,
any claim, action, suit or proceeding, whether legal, equitable, or
administrative, against Borrower, its general partner, their successors adn
assigns, or any other person, firm or corporation, seeking recovery of the
Indebtedness, or enforcement of the Loan Documents.
5. Borrower shall not hereafter at any time whatsoever, directly or
indirectly, commence or prosecute, or aid in the commencement or prosecution of,
any claim, action, suit or proceeding, whether legal, equitable or
administrative, against Lender, its successors and assigns, or any other person,
firm or corporation, arising out of, related to or connected with the
Indebtedness or the Loan Documents, provided, however, that this provision shall
not prohibit or prevent Borrower (a) from continuing to assert or prosecute
claims or actions of Borrower against third parties which are presently pending
or (b) from defending any claim or action asserted by a third party against
Borrower in connection with the Property.
This instrument may be executed in any number of counterparts, each of
which shall be deemed to be an original, but all of which shall constitute one
and the same instrument.
Signed by the parties hereto as of the dates of their respective
acknowledgments set forth below.
Signed in the presence of: ANGELES MORTGAGE INVESTMENT TRUST
a California business trust
Donna Sivachenko By: Anna Merguerian
Signature of Witness
Name: Anna Merguerian
Donna Sivachenko
Printed Name of Witness Its: Vice President
Ronald J. Consiglio
Signature of Witness
Ronald J. Consiglio
Printed Name of Witness
ANGELES PARTNERS XV
a California limited partnership
By: Angeles Realty Corporation II
Its: General Partner
John C. LeBeau By: Robert D. Long, Jr.
Signature of Witness
Name: Robert D. Long, Jr.
John C. LeBeau
Printed Name of Witness Its: CAO/Controller
Lee Ann Price
Signature of Witness
Lee Ann Price
Printed Name of Witness
STATE OF CALIFORNIA )
) SS:
COUNTY OF VENTURA )
The foregoing instrument was acknowledged before me this 5th day of
September, 1995, by Anna Merguerian, Vice President of ANGELES MORTGAGE
INVESTMENT TRUST, a California business trust, on behalf of such trust.
(Notarial Seal) Jennifer L. Hester
Notary Public
My commission expires: 3/12/01
STATE OF SOUTH CAROLINA )
) SS:
COUNTY OF GREENVILLE )
The foregoing instrument was acknowledged before me this 5th day of
September, 1995 by Robert D. Long, Jr., CAO/Controller, of Angeles Realty
Corporation II, general partner of ANGELES PARTNERS XV, a California limited
partnership, on behalf of such partnership.
(Notarial Seal) Jennifer L. Hester
Notary Public
My commission expires: 3/12/01
This instrument prepared by:
Mary Yuen-Ng
Squire, Sanders & Dempsey
4900 Society Center
127 Public Square
Cleveland, Ohio 44114
EXHIBIT A
Loan Documents
1. $1,500,000.00 Promissory Note Secured by Mortgage dated as of June 30,
1989 made by Angeles partners XV to the order of Angeles Mortgage
Investment Trust ("Note").
2. Mortgage, Assignment of Leases and Rents, and Security Agreement recorded
on November 28, 1989 in Volume 89-6574, Page 48 of Cuyahoga County Records
("Mortgage").
3. Security Agreement dated as of June 30, 1989 from Angeles Partners XV to
Angeles Mortgage Investment Trust.