AGREEMENT
THIS AGREEMENT, made this 5th day of May, 1997, among Northtown Mall
Partners, a California general partnership ("Seller"), Northtown Associates, a
Delaware general partnership, and state of Wisconsin Investment Board, an
independent state agency created pursuant to the laws of the state of Wisconsin
(collectively, "Lender"), and Northtown LLP, a Minnesota limited liability
partnership in which the sole partners are Lender ("Buyer").
RECITALS
Seller owns the Northtown Mall Shopping Center in the City of Blaine,
Anoka County, Minnesota (the "Shopping Center").
Lender and Seller are parties to (i) a Loan Agreement dated March 15,
1991, between Lender, as lender, and Seller, as borrower, providing for a loan
(the "Loan") of up to $58,000,000 (the "Loan Agreement"); (ii) a $58,000,000
promissory note dated March 15, 1991, between Seller, as maker, and Lender, as
payee (the "Note") which evidences the Loan; (iii) a Combination Mortgage,
Security Agreement and Fixture Financing Statement dated March 15, 1991, between
Seller, as mortgagor, and Lender, as mortgagee, mortgaging the Shopping Center
as security for the Note (the "Mortgage"); (iv) a Collateral Assignment of Rents
and Leases dated March 15, 1991, between Seller, as assignor, and Lender, as
assignee, assigning leases and rents and other income from the Shopping Center
as additional security for the Note (the "Assignment of Rents:); (v) a
Collateral Assignment of Licenses and contracts dated march 15, 1991, between
Seller, as assignor, and Lender, as assignee, assigning licenses, contracts and
other items as additional security for the Note (the "Collateral Assignment");
(vi) a Tax and Insurance Premium Deposit Agreement dated March 15, 1991, among
Seller, Lender and Norwest Bank Minnesota (the "Tax Deposit Agreement"),
providing for the creation and funding of a tax and insurance escrow account
which has been established and is being maintained as Norwest Bank account
#12628300 (the "Tax Account"); (vii) a Reserve Account Deposit Agreement dated
March 15, 1991, among Seller, Lender and Norwest Bank Minnesota (the
"Improvement Deposit Agreement"), providing, among other things, for the
creation, investment and distribution of a "5% Reserve Account" which has been
established and is being maintained as Norwest Bank account #12628400 (the
"Reserve Account"); (viii) an Option Agreement dated March 15, 1991, between
Seller, as optionor, and Lender, as optionee, granting Lender an option to
purchase the Shopping Center (the "Option Agreement"); (ix) a Grant of Right of
First Refusal and Restriction on Transfer dated March 15, 1991, between Seller
and Lender, granting Lender a right of first refusal to purchase the Shopping
Center (the "First Refusal Agreement"); and (x) a Collateral Assignment of Real
Estate Management Agreement dated March 15, 1991, between Seller and Lender,
collaterally assigning to Lender seller's interest under the management
agreement for the Shopping Center (the "Management Agreement Assignment"). The
Note, Mortgage, Assignment of Rents, Collateral Assignment, Option Agreement,
First Refusal Agreement and Management Agreement Assignment are called
collectively the "Loan Documents".
Because the contractor for the improvement of the HomePlace space in
the Shopping Center has not been paid in full, the mechanics liens listed on
Exhibit A hereto (the "Liens") have been filed against the Shopping Center by
the contractor and some of its subcontractors. In addition, the leasing
commission payable to Madison Marquette Realty Services and co-broker in the
amount of $207,192.00 (the "HomePlace Commission") with respect to the HomePlace
lease has not been paid. An action to foreclose the Liens captioned C.F. Haglin
& Sons, Inc. vs. Northtown Mall Partners, et. al., Court File No. C1-97-898 (the
"Action") has been commenced in the district court for the Tenth Judicial
District of Minnesota.
Lender has exercised its option to purchase the Shopping Center
pursuant to the Option Agreement, with a May 12, 1997, closing date established
by Lender's notice of exercise, and has assigned its purchase right to Buyer.
The unpaid balance of the Note is about $51,500.000. The Purchase price for the
Shopping Center as determined pursuant to the procedure established by the
Option Agreement is $43,000,000. Since the principal balance of the Note
exceeds the purchase price under the Option Agreement, no cash is payable to
Seller under the Option Agreement. However, based upon negotiations prompted by
Lender's desire to close its purchase of the Shopping Center before May 12 and
by certain claims made by Seller for reimbursement of HomePlace costs, the
parties have discussed a $1,200,000 payment to Seller at closing of the Shopping
Center sale on the following terms:
(i) the Shopping Center will be conveyed to Buyer concurrently with
execution and delivery of this Agreement, with the conveyance
on and subject to the terms of the Option Agreement except as
modified or supplemented by this Agreement;
(ii) Buyer will pay Seller $1,200,000 at closing in wired funds;
(iii) Seller may retain the balance in First Bank, Account #0002 01
031 00, (the "Cash Account"), which represents cash on hand
from Shopping Center operations.
(iv) Buyer will pay the transfer tax, if any, payable with respect
to the sale of the Shopping Center to Buyer;
(v) Seller will not be required to pay or provide a credit for any
real estate taxes or special assessments relating to the
Shopping Center or any accrued and unpaid interest on the Note;
(vi) the Tax Account, the Reserve Account, any real estate tax
refunds less payments now or hereafter owing to Marvin F. Poer,
Inc. and any insurance premium refunds to which seller may be
or become entitled will be transferred to Buyer;
(vii) Buyer will pay the Liens and the HomePlace Commission, and
secure dismissal of the Action;
(viii)Seller will pay all accounts payable relating to operation or
maintenance of the Shopping Center other than (a) the Liens and
the HomePlace Commission and (b) accounts payable relating to
operation and maintenance of the Shopping Center after March
31, 1997;
(ix) the economic closing of the sale of the Shopping Center to
Buyer shall be as of April 1, 1997, i.e., the April Mortgage
payment and all other April expenses would be paid from April
rents, and any excess would go to Buyer;
(x) all tenant payments received by Buyer and all tenant payments
received by Seller after March 31, 1997 (collectively "Post-
March Tenant Payments") shall be retained by Buyer or paid by
Seller to Buyer, as the case may be, even if they represent
rents or reimbursement payments attributable to the period
before closing, and Seller shall at Buyer's option either
dismiss or substitute Buyer as plaintiff in actions relating to
the Premises or the leases;
(xi) the Loan Agreement, Tax Deposit Agreement and Improvement
Deposit Agreement will be terminated, but the Loan Documents
will remain outstanding;
(xii) Seller will be released by Lender and Buyer from all
indebtedness, claims and liability under the Loan Agreement,
Tax Deposit Agreement, Improvement Deposit Agreement and Loan
Documents and all other claims and liability except for claims
arising from third party claims and claims arising under this
Agreement or instruments or agreements executed and delivered
by Seller pursuant to this Agreement or the Option Agreement;
and
(xiii) Buyer and Lender will be released by seller from all claims and
liability under the Loan Agreement, Tax Deposit Agreement,
Improvement Deposit Agreement and Loan Documents and all other
claims and liabilities except for claims arising from third
party claims and claims arising under this Agreement or
instruments or agreements executed and delivered pursuant to
this Agreement or the Option Agreement.
NOW THEREFORE, the parties hereto hereby agree as follows:
1. Closing of Sale. Concurrently with execution and delivery of
this Agreement, Seller and Buyer are closing the sale of the Shopping Center to
Buyer (the "Closing") in accordance with the terms of the Option Agreement
except as it is modified or supplemented by this Agreement. The parties agree
that the purchase price under the Option Agreement is $43,000,000.
2. Implementation of Additional Provisions. Concurrent with the
Closing, (a) Buyer is paying Seller $1,200,000 in wired funds, (b) pursuant to
instructions from Seller and Lender, Norwest Bank is transferring the Reserve
Account to the title insurance company conducting the Closing, and the funds
from that account are being used to pay the Liens and HomePlace Commission and
to obtain a dismissal of the Action, with any excess paid to Buyer, (c) the Tax
Reserve Account is being transferred to Buyer, with the proceeds thereof wired
directly from Norwest Bank to Buyer, (d) Seller is transferring its rights to
any real estate tax refunds and contests and insurance premium refunds to Buyer
less any payments now or hereafter owing to Marvin F. Poer, Inc., (e) to the
extent not already paid, Seller is paying the accounts payable for which it is
responsible as set forth in the Recitals, (f) the Loan Agreement, Tax Deposit
Agreement and Improvement Deposit Agreement are being terminated, (g) Seller is
executing and delivering a release to Lender and buyer, and (h) Lender and Buyer
are executing and delivering a release to Seller.
3. Closing Statement; Transfer Tax. The closing statement or
statements delivered by the parties at the Closing reflect the provisions of
this Agreement, including the Recitals. Buyer agrees to indemnify, defend and
hold harmless Seller with respect to any transfer tax (plus any penalty and
interest thereon) payable by reason of the transfer of the Shopping Center to
Buyer.
4. Cash Account. Lender and Buyer hereby waive and release any and
all claims to the Cash Account.
5. Post-March Tenant Payments. Seller hereby assigns to Buyer all
of its right, title and interest in and to all Post-March Tenant Payments.
6. No Merger. The Loan Documents shall not merge in Buyer's title
or be discharged, merged or released by any other matter or thing other than
instruments of discharge duly signed by Lender.
7. Due Authorization, Etc. Lender and buyer, on the one hand, and
Seller, on the other, each represents to the other that it has full power to
execute, deliver and carry out the terms of the Option Agreement and this
Agreement and has taken all steps necessary to authorize the execution, delivery
and performance of this Agreement and the performance of the Option Agreement,
and that the individual or individuals executing this Agreement and the
agreements delivered pursuant hereto on behalf of Lender, Buyer or Seller, as
the case may be, is duly authorized to do so.
8. Entire Agreement. This Agreement and the Agreements delivered
pursuant hereto constitute the entire agreement of the parties dealing with the
subject matter hereof.
9. Governing Law. This Agreement is governed by Minnesota law.
10. Attorney's Fees. In any action arising under or based upon this
Agreement, the party which does not prevail in the action shall pay the
attorney's fees and costs incurred by the prevailing party in the action.
11. Counterparts. This Agreement may be signed in separate
counterparts which, taken together, constitute a single agreement.
IN WITNESS WHEREOF, the parties hereto have caused these presents to
be made as of the day and year first above stated.
NORTHTOWN MALL PARTNERS
By Angeles Income Properties, Ltd. III, a
California limited partnership, its general
partner
By Angeles Realty Corporation II, its
general partner
By /s/ Robert D. Long, Jr.
Its Vice President
And Angeles Income Properties, Ltd. IV, a
California limited partnership, its general
partner
By Angeles Realty Corporation II, its
general partner
By /s/ Robert D. Long, Jr.
Its Vice President
And Angeles Realty Corporation II, its general
partner
By /s/ Robert D. Long, Jr.
Its Vice President
NORTHTOWN ASSOCIATES, a Delaware
general partnership
By Northtown Mall I, B.V., its partner
By US Alpha, Inc., its agent and attorney
in fact
By /s/ Raymond H. Bottorf
Its President
And Northtown Mall II, B.V., its partner
By US Alpha, Inc., its agent and attorney
in fact
By /s/ Raymond H. Bottorf
Its President
STATE OF WISCONSIN INVESTMENT
BOARD
By /s/ Charles R. Carpenter
Assistant Investment Director
Real Estate & Mortgages
NORTHTOWN LLP, a Minnesota limited liability
partnership,
By State of Wisconsin Investment Board, its
partner
By /s/ Charles R. Carpenter
Assistant Investment Director
Real Estate & Mortgages
And Northtown Associates, its partner
By Northtown Mall I, B.V., its partner
By US Alpha, Inc., its agent and
attorney in fact
By /s/ Raymond H. Bottorf
Its President
And Northtown Mall II, B.V., its partner
By US Alpha, Inc., its agent and
attorney in fact
By Raymond H. Bottorf
Its President