SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported) November 17, 1998
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PaineWebber Income Properties Seven Limited Partnership
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(Exact name of registrant as specified in its charter)
Delaware 0-15037 04-2870345
- --------------------------------------------------------------------------------
(State or other jurisdiction) (Commission (IRS Employer
of incorporation File Number) Identification No.)
265 Franklin Street, Boston, Massachusetts 02110
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 439-8118
(Former name or address, if changed since last report)
<PAGE>
FORM 8-K
CURRENT REPORT
PAINEWEBBER INCOME PROPERTIES SEVEN LIMITED PARTNERSHIP
ITEM 2 - Disposition of Assets
Colony Square Shopping Center - Mount Prospect, Illinois
Disposition Date - November 17, 1998
On November 17, 1998, Chicago Colony Square Associates, a joint venture in
which the Partnership has an interest, sold its operating investment property,
the Colony Square Shopping Center, located in Mount Prospect, Illinois, to an
unrelated party for $2.3 million. The sale generated net proceeds of
approximately $1,014,000, after the repayment of the outstanding first mortgage
loan of approximately $864,000, accrued interest of approximately $13,000
(including a prepayment penalty of $9,000), closing proration adjustments of
approximately $221,000 and closing costs of approximately $188,000. The
Partnership received 100% of the net proceeds in accordance with the terms of
the joint venture agreement. The Partnership is expected to make a special
distribution of the net proceeds from the sale of Colony Square to the Limited
Partners by December 15, 1998.
As previously reported, the Partnership and its co-venture partner had
begun exploring potential opportunities for the sale of the Colony Square
property. As part of that plan, discussions were held with real estate brokerage
firms with a specialty in small retail centers like Colony Square. During the
third quarter of fiscal 1998, the Partnership and its co-venture partner
selected a real estate brokerage firm to begin marketing this asset for sale.
Subsequently, an offer was received to purchase the Colony Square Shopping
Center from a prospective third-party buyer that met the Partnership's and
co-venture partner's sale criteria. A purchase and sale agreement was signed on
July 9, 1998 with this prospective buyer, and the transaction closed on November
17, 1998, as described above.
With the sale of Colony Square, the Partnership now has one remaining real
estate investment, the Colony Apartments. This property is currently being
actively marketed for sale, and the Partnership expects to sign a purchase and
sale agreement prior to the end of calendar 1998. This would allow for the
completion of a liquidation of the Partnership by March 31, 1999. However, since
the sale of the Colony Apartments property remains contingent upon, among other
things, negotiation of a definitive sales agreement and satisfactory completion
of the buyer's due diligence, there are no assurances that the sale of the final
asset and the liquidation of the Partnership will be completed within this time
frame.
ITEM 7 - Financial Statements and Exhibits
(a) Financial Statements: None
(b) Exhibits:
(1) Purchase and Sale Agreement by and between Chicago Colony
Square Associates and Keiko Iseda or Nominee, dated July 9,
1998.
(2) First Amendment to Purchase and Sale Agreement by and among Chicago
Colony Square Associates, Keiko Iseda and Hanjo, L.L.C. dated
September 1, 1998.
(3) Second Amendment to Purchase and Sale Agreement by and among Chicago
Colony Square Associates and Hanjo, L.L.C., dated October 27, 1998.
<PAGE>
FORM 8-K
CURRENT REPORT
PAINEWEBBER INCOME PROPERTIES SEVEN LIMITED PARTNERSHIP
(4) Special Warranty Deed by Chicago Colony Square Associates to Hanjo,
L.L.C., dated November 17, 1998.
(5) Assignment and Assumption of Leases and Security Deposits by and
between Chicago Colony Square Associates and Hanjo, L.L.C., dated
November 17, 1998.
(6) Assignment and Assumption of Contracts and Intangibles by and
between Chicago Colony Square Associates and Hanjo, L.L.C., dated
November 17, 1998.
(7) Bill of Sale from Chicago Colony Square Associates to Hanjo, L.L.C.
dated November 17, 1998.
(8) Closing Statement between Chicago Colony Square Associates and
Hanjo, L.L.C., dated November 17, 1998.
<PAGE>
FORM 8-K
CURRENT REPORT
PAINEWEBBER INCOME PROPERTIES SEVEN LIMITED PARTNERSHIP
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PAINEWEBBER INCOME PROPERTIES SEVEN LIMITED PARTNERSHIP
(Registrant)
By: Seventh Income Properties Fund, Inc.
By: /s/ Walter V. Arnold
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Walter V. Arnold
Chief Financial Officer and
Senior Vice President
Date: November 30, 1998
<PAGE>
PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
CHICAGO COLONY SQUARE ASSOCIATES (SELLER)
AND
KEIKO ISEDA OR NOMINEE (BUYER)
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS 1
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ARTICLE 2 PURCHASE AND SALE 1
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ARTICLE 3 PURCHASE PRICE; DEPOSIT; ADJUSTMENTS 2
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ARTICLE 4 PRECLOSING OPERATION 4
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ARTICLE 5 ACCESS, INSPECTION, DILIGENCE 5
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ARTICLE 6 TITLE, SURVEY, CONDITIONS AND REPRESENTATIONS 10
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ARTICLE 7 CLOSING 12
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ARTICLE 8 CASUALTY AND CONDEMNATION 14
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ARTICLE 9 BROKERAGE COMMISSIONS 15
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ARTICLE 10 DEFAULT, TERMINATION AND REMEDIES 15
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ARTICLE 11 MISCELLANEOUS 16
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ARTICLE 12 IRS FORM 1099-S DESIGNATION 20
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SCHEDULE A Legal Description of the Real Property
SCHEDULE B Description of Personal Property and Intangible Property
SCHEDULE C Rent Roll
SCHEDULE D 1099 Designation Agreement
SCHEDULE E Form of Tenant Estoppel Certificate
SCHEDULE F Form of Escrow Provisions
SCHEDULE G Form of Warranty Deed
SCHEDULE H Form of Bill of Sale
SCHEDULE I Form of Assignment and Assumption of Leases
SCHEDULE J Form of Assignment and Assumption of Contracts and Intangibles
SCHEDULE K Form of Certificate of Non-Foreign Status
<PAGE>
Purchase and Sale Agreement
This Purchase and Sale Agreement (this Agreement) is entered into as of
the 9th day of July, 1998 by and between Seller and Buyer, upon the following
terms and conditions:
ARTICLE 1
DEFINITIONS
References in this Agreement to the following terms shall have the
following meanings:
BUYER: Keiko Iseda or Nominee
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SELLER: Chicago Colony Square Associates, an Illinois
- ------ general partnership
PROPERTY: The Real Property and Personal Property
- -------- constituting Colony Square Shopping Center,
Mount Prospect, Illinois
REAL PROPERTY: The land and the buildings, structures,
- ------------- improvements and fixtures (collectively, the
Improvements) now located thereon and the rights
appurtenant thereto, all as more particularly
described in Schedule A attached hereto
PERSONAL PROPERTY: The personal and intangible property, if any,
- ----------------- described in Schedule B attached hereto
PURCHASE PRICE: $2,300,000.00
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TITLE COMPANY: Ticor Title Insurance Company
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ARTICLE 2
PURCHASE AND SALE
2.1 In consideration of the undertakings and mutual covenants of the
parties set forth in this Agreement, and for other good and valuable
consideration, the receipt and legal sufficiency of which are hereby
acknowledged, Seller hereby agrees to sell and convey the Property to Buyer and
Buyer hereby agrees to buy and pay the Purchase Price for the Property on the
terms and conditions contained herein.
ARTICLE 3
PURCHASE PRICE; DEPOSIT; ADJUSTMENTS
3.1 The Purchase Price shall be as specified in Article 1 above and shall
be paid on the Closing Date (as hereinafter defined) by wire transfer of
immediately available federal funds, subject to adjustment to reflect
application of the Escrowed Amount, including interest on the Escrowed Amount,
and such other adjustments herein contained.
3.2 Buyer shall within two (2) business days after Seller has delivered to
Buyer a fully executed copy of this Agreement, deposit with the Title Company
the sum of Fifty Thousand Dollars ($50,000.00) (the Escrowed Amount) to secure
Buyer's obligations under this Agreement. The Escrowed Amount shall be held by
the Title Company in an interest-bearing account pursuant to the terms of this
Agreement and pursuant to the terms of the Escrow Provisions contained in
Schedule F attached hereto and made a part hereof. Additionally, concurrently
with the execution of this Agreement, Buyer shall deliver to Seller the sum of
One Hundred Dollars ($100.00) (the Inspection Fee) as consideration for Buyer's
information review and property inspection rights set forth herein. The
Inspection Fee shall remain the property of Seller in all instances.
3.3 All real estate taxes, assessments, special taxes, special assessments
and any other tax or assessment attributable to the Property through the Closing
Date shall be prorated and adjusted as of the Closing Date unless such items are
paid directly by tenants to the applicable taxing authority, in which case no
adjustment or proration shall be made for the items paid directly by the
tenants. If the tax statements for the fiscal year during which the Closing Date
occurs are not finally determined, then the tax figures for the immediately
prior fiscal year multiplied by 107.5% shall be used for the purposes of
prorating taxes on the Closing Date, provided that there shall be no further
adjustment to be made after the Closing Date. Any tax refunds or proceeds
(including interest thereon) on account of a favorable determination resulting
from a challenge, protest, appeal or similar proceeding relating to taxes and
assessments relating to the Property (i) for all tax periods occurring prior to
the applicable tax period in which the Closing occurs shall be retained by and
paid exclusively to Seller and (ii) for the applicable tax period in which the
Closing occurs shall be prorated as of the Closing Date after reimbursement to
Seller and Buyer, as applicable, for all fees, costs and expenses (including
reasonable Attorney's and consultants fees) incurred by Seller or Buyer, as
applicable, in connection with such proceedings such that Seller shall retain
and be paid that portion of such tax refunds or proceeds as is applicable to the
portion of the applicable tax period prior to the Closing Date and Buyer shall
retain and be paid that portion of such tax refunds or proceeds as is applicable
to the portion of the applicable tax period from and after the Closing Date.
Neither Seller nor Buyer shall settle any tax protests or proceedings in which
taxes for the tax period for which the other party is responsible are being
adjudicated without the consent of such party, which consent should shall not be
unreasonably withheld, conditioned or delayed. Buyer and Seller shall cooperate
in pursuit of any such proceedings and in responding to reasonable requests of
the other for information concerning the status of and otherwise relating to
such proceedings; provided, however, that neither party shall be obligated to
incur any out-of-pocket fees, costs or expenses in responding to the requests of
the other. In no event shall any such proceeding be commenced by Seller
following the Closing Date without Buyer's prior written consent; provided,
however, that Seller shall be entitled to continue its existing proceeding.
3.4 Prepaid or past due amounts under any Contracts (as defined in Section
5.2 below) which are assigned to Buyer at Closing shall be prorated and adjusted
as of the Closing Date.
3.5 Seller shall cause all meters for electricity, gas, water, sewer or
other utility usage at the Property to be read on the Closing Date, and Seller
shall pay all charges for such utilities which have accrued on or prior to the
Closing Date; provided, however, that if and to the extent such charges are paid
directly by tenants, no such reading or payment shall be required. If the
utility companies are unable or refuse to read meters for which payment by
Seller is required, all charges for such utilities to the extent unpaid shall be
prorated and adjusted as of the Closing Date based on the most recent bills
therefor. Seller shall provide notice to Buyer within five (5) days before the
Closing Date setting forth (i) whether utility meters will be read as of the
Closing Date and (ii) a copy of the most recent bill for any utility charges
which are to be prorated and adjusted as of the Closing Date. If the meters
cannot be read as of the Closing Date and, therefore, the most recent bill is
used to prorate and adjust as of the Closing Date, then to the extent that the
amount of such prior bill proves to be more or less than the actual charges for
the period in question, a further adjustment shall be made after the Closing
Date as soon as the actual charges for such utilities are available.
3.6 Collected rents for the then current period; security deposits which
have not been previously applied by Seller; prepaid rentals; collected or
prepaid common area maintenance charges; collected or prepaid promotional
charges; collected or prepaid service charges; collected or prepaid tax charges,
and all other collected or prepaid incidental expenses and charges paid by
tenants shall be apportioned and full value shall be adjusted as of the Closing
Date, and the net amount thereof, if in favor of Seller, shall be added to the
Purchase Price, or if in favor of Buyer, shall be deducted from the Purchase
Price. From and after Closing all security deposits credited to Buyer shall
thereafter be deemed transferred to Buyer and Buyer shall assume and be solely
responsible for the payments of security deposits (for which Buyer was credited
at Closing) to tenants in accordance with the Leases (as hereinafter defined)
and applicable law. Seller shall be entitled to retain and/or receive a credit
for any utility deposits and any deposits for third parties under any of the
Contracts (as hereinafter defined).
3.6.1 All rentals and other tenant charges payable in arrears and
uncollected and all other uncollected rents (including, but not limited
to, percentage rents, common area maintenance charges and real estate tax
charge annual adjustments thereto) for the current and prior rental
periods, less the reasonable expenses of collection thereof, shall be
apportioned (if and when collected by either party); provided, however,
that Buyer shall proceed in a commercially reasonable manner consistent
with Buyer's customary practice for tenants owing past due rent to it to
collect such uncollected rents from existing tenants listed on the Rent
Roll (as hereinafter defined); provided that Buyer shall not be obligated
to commence suit against any tenant and Buyer shall first apply rents
subsequently received to rent due and owing for rental periods accruing
after the Closing Date. Buyer shall not settle or release (i) tenants from
any obligations for such uncollected rents or (ii) rights under any claims
listed in Section 3.6.2 below, in each case, without Seller's prior
written approval. Buyer shall provide Seller with written evidence of its
collection efforts, such evidence shall include, but not be limited to
providing copies of letters and invoices to tenants, copies of reports
regarding follow-up efforts and cash receipts and aged delinquency
reports. Buyer shall provide such written evidence of its collection
efforts within fifteen (15) days of demand therefor provided that Seller
may request such evidence no more than on a quarterly basis. Seller shall
agree not to commence suit against tenants listed on the Rent Roll for
obligations owed to it unless Buyer fails to fulfill its obligations under
this Section 3.6.1.
3.6.2 Seller shall retain all rights to all refunds, receivables,
past due rent and claims, including, but not limited to, termination fees
or damages from all former tenants or occupants of the Property which are
not listed on the Rent Roll, causes of action and rights of reimbursement
from third parties, bonds, accounts receivable and any other claims for
payments Seller may have to the extent arising or relating to the period
prior to the Closing.
3.6.3 In the event, on the Closing Date, the precise figures
necessary for any of the foregoing adjustments are not capable of
determination, then, at Buyer's option, those adjustments shall be made
either (i) on the basis of good faith estimates of Seller and Buyer using
currently available information, and final adjustments shall be made
promptly after precise figures are determined or available or (ii) when
all information for all final adjustments are determined or available.
3.7 At the Closing, Seller shall pay the amount due for (a) state and
county transfer tax (or any tax substituted therefor) imposed in connection with
the consummation of the transaction contemplated hereby (the Transfer Tax); (b)
recording charges for documents to clear title, evidence Seller's authority or
enable Seller to convey; (c) Seller's Attorney's fees; (d) the cost of the
standard owners title insurance policy referred to in Article 6, below; (e) the
cost of the ALTA survey referred to in Article 6, below; and (f) the cost of the
Phase I environmental study referred to in Article 6, below.
3.8 At the Closing, Buyer shall pay for (a) any local tax or mortgage tax
other than the Transfer Tax; (b) charges to record the deed, and evidence of
Buyer's existence or authority; (c) survey charges; (d) Buyer's Attorney's fees
and all costs related to Buyer's due diligence; and (e) costs as to additional
title insurance coverages or endorsements, including the cost of a new lenders
title policy.
3.9 The provisions of this Article 3 shall survive the Closing.
ARTICLE 4
PRECLOSING OPERATION
4.1 A rent roll prepared by Seller's property manager (the Rent Roll)
containing a list of all current occupants of the Property is attached hereto as
Schedule C. The leases listed on the Rent Roll, together with leases entered
into pursuant to this Article 4 are collectively referred to herein as the
Leases.
4.2 Seller shall not, after the date hereof; (i) enter into any new Leases
or materially amend or terminate any existing Leases, (ii) enter into or modify
any service contracts, operating agreements, or reciprocal easement agreements,
(iii) alter the zoning classification of the Property or (iv) materially alter
any Improvements, without the written consent of Buyer in any such instance,
which consent shall not be unreasonably withheld or delayed. If Buyer does not
notify Seller in writing of its denial of consent within five (5) days after
written request therefor from Seller, Buyer shall be deemed to have consented to
such requested action. In the event Buyer denies its consent, Buyer shall
specify its reasons for denial in its written notice thereof. In the event
Seller's requested action with respect to a Lease is consented to or deemed
consented to by Buyer, Buyer shall pay for tenant improvements and leasing
commissions as disclosed on Seller's request for consent.
4.3 At all times prior to Closing, Seller shall continue (a) to conduct
business with respect to the Property in the same manner in which said business
has been heretofore conducted and (b) to insure the Property substantially as
currently insured.
4.4 Buyer shall, by written notice to Seller, on or before the Diligence
Date, identify any Contracts (as defined in Section 5.2 below) which it elects
to have assigned to it and therefore will assume. Buyer shall be deemed to have
elected not to assume any Contracts which are not identified as to be assigned
and assumed. Seller shall terminate any Contracts at Closing which are not
identified by Buyer as specified in this section as to be assigned and assumed
at Closing, provided that such Contracts may be terminated without cost or
liability to Seller.
4.5 Seller shall use commercially reasonable efforts to obtain tenant
estoppel certificates, from all tenants currently occupying their space under
the Lease in the form attached hereto as Schedule E or in a form reasonably
acceptable to Buyer's lender. Seller shall not be obligated to expend more than
nominal funds or commence litigation in pursuit of such estoppel certificates
and receipt of such estoppel certificates shall not be a condition precedent to
Closing.
ARTICLE 5
ACCESS, INSPECTION, DILIGENCE
5.1 Seller agrees that Buyer and its authorized agents or representatives
shall be entitled to enter upon the Real Property and the Improvements during
normal business hours after three (3) days advance written notice to Seller (in
each case subject to the rights of tenants under the Leases) to make such
reasonable investigations, studies, and tests as Buyer deems necessary or
advisable; provided, however, that Buyer shall not be permitted to conduct
physical testing or conduct interviews with tenants without Seller's prior
written approval, which approval shall not be unreasonably withheld, conditioned
or delayed. Seller shall use its commercially reasonable efforts to make its
personnel available for such inspections or interviews upon three (3) days prior
written notice. Seller's prior written approval for physical inspections may be
conditioned on receipt of a detailed description of the proposed physical
inspection, a list of the contractors who will be performing the physical
inspection, evidence of insurance satisfactory to Seller, and such other
information as Seller reasonably requires in connection with such proposed
inspection. Buyer may not interview tenants unless a duly authorized
representative of Seller accompanies Buyer. Seller also agrees to make available
to Buyer during normal business hours upon advance written notice to Seller all
books, records, plans, building specifications, contracts, agreements or other
instruments or documents contained in Seller's files relating to the
construction, operation and maintenance of the Property and the files of the
current manager of the Property that relate to the Property.
5.2 Seller shall provide Buyer, promptly after Seller's execution of this
Agreement, with copies of all (i) Leases and (ii) all maintenance, service,
supply, vendor, equipment rental, management and leasing contracts affecting the
Property (collectively, the Contracts) which it has in its files and shall
instruct its property manager to make such Leases and Contracts available to
Buyer for inspection. To the extent Seller has any of the following in its
possession or control, Seller agrees to make the same available for inspection
by Buyer or its agents:
(a) Copies of property tax bills and assessment notices for the
preceding year and the current year.
(b) Copies of insurance policies and premiums.
(c) Copies of as-built plans and specifications, soil reports, plot
plans, site plans, building plans, and Illinois Department of
Transportation traffic and highway plans.
(d) Copies of guarantees associated with any Lease.
(e) Explanation of how tenants are billed for utility costs
including water and trash removal.
(f) Operating statements of the Property for the last three (3) full
years and the current year to date.
(g) Copies of Certificate(s) of Occupancy.
(h) Copies of tax bills for the last three (3) years.
(i) Engineering and physical inspection reports on the Property.
(j) Financial statements and credit conditions of all tenants.
(k) Sales history on all tenants for preceding three years.
(l) Copies of all existing mortgage information.
(m) Listing of all capital expenditures of $10,000 or more for the
last three (3) years.
(n) Copies of all environmental reports, correspondence or
information pertaining to the Property as well as any adjoining property
or properties in the area(s) that have or are suspected of having
environmental problems.
(o) Listing of tenants security deposits.
(p) List of all tenant bad-debt write-offs for the last full year
and the current year-to-day.
(q) Information regarding any pending litigation.
(r) Copies of any prior or pending tax appeals.
(s) List of accounts receivable as of the date of this Agreement.
(t) Historical tenant billing statements.
(u) List of premises address for each tenant.
(v) Copies of all correspondence from governmental agencies.
(w) Copies of all correspondence from each tenant.
(x) Information regarding any pending zoning changes.
Leases, Contracts and the documents described in this Section 5.2 shall be
referred to collectively as the Information Materials. Buyer shall notify Seller
within three (3) days of receipt of the Information Materials whether any
Information Materials are missing. Seller makes no representation or warranty
whatsoever regarding the existence or availability of the foregoing and Seller
shall not be obligated to create or obtain any of the foregoing which are not in
existence and available to Seller. To the extent that any of these items do not
exist or are not in Seller's possession or at its reasonable disposal, Seller
will send a side letter to Buyer so stating. Buyer acknowledges and agrees that
any and all information, documents, surveys, studies and reports provided to
Buyer are provided for informational purposes only and do not constitute
representations or warranties of Seller of any kind.
5.3 Buyer shall promptly commence and actively pursue its due diligence on
the Property, including, but not limited to the following items:
(a) Review of title and survey matters;
(b) Review of Contracts and Information Materials;
(c) Obtain and review engineering reports on structural condition
of the mechanical systems;
(d) Obtain and review environmental reports on oil, hazardous
waste, and asbestos;
(e) Review of applicable zoning and other land use controls, and
other permits, licenses, permissions, approvals and consents;
(f) Conduct tenant interviews, subject to Section 5.1 above;
(g) Review of all Leases affecting the Property;
(h) Review zoning and building code changes that may affect future
tenants; and
(i) Obtain and review an appraisal of the Property.
Buyer shall complete its due diligence including, but not limited to the
foregoing, no later than thirty (30) days after the date of this Agreement (the
Diligence Date), which Diligence Date may be extended pursuant to the provisions
of this Section 5.3. In the event that Buyer's due diligence shall reveal any
matters which are not acceptable to Buyer in Buyer's sole and absolute
discretion for any reason or for no reason, Buyer may elect, by written notice
to Seller, received by Seller on or before the Diligence Date, not to proceed
with this purchase, in which event this Agreement shall terminate, the Escrowed
Amount and all interest on the Escrowed Amount shall be returned to Buyer and
this Agreement shall be null and void without recourse to either party hereto
(except to the extent such recourse arises in connection with a provision of
this Agreement which is intended to survive termination); provided, however,
that the Inspection Fee shall remain the property of Seller. In the event Buyer
does not terminate this Agreement on or before the Diligence Date, the Escrowed
Amount shall become nonrefundable.
Notwithstanding anything to the contrary contained herein, if, as of the
Diligence Date, Buyer has not completed its due diligence, then Buyer may extend
the Diligence Date for an additional fifteen (15) days (the Extended Diligence
Date) by providing written notice to Seller of such election, provided that
Buyer shall deposit with the Title Company the sum of Twenty-Five Thousand
Dollars ($25,000.00) (the Additional Escrowed Amount). If Buyer elects to extend
the Diligence Date, references throughout this Agreement to the Diligence Date
shall be deemed to refer to the Extended Diligence Date and references to the
Escrowed Amount shall be deemed to include the Additional Escrowed Amount.
Buyer acknowledges that as of the Closing it will have had an opportunity
to conduct diligence on the Property and is acquiring the Property in its
current condition based on its diligence. Buyer further acknowledges that
neither Seller nor its employees, agents or representatives have made any
representation or warranty as to the condition of the Property or the presence
or absence of any hazardous materials on, in, under or within the Property or a
portion thereof which survive the Closing hereunder except as expressly provided
in this Agreement. THE BUYER ACKNOWLEDGES AND AGREES THAT THE PROPERTY IS TO BE
CONVEYED BY SELLER TO BUYER AS IS, WITH ALL FAULTS, AND SUBSTANTIALLY IN ITS
CURRENT CONDITION. BUYER FURTHER ACKNOWLEDGES AND AGREES THAT, EXCEPT AS
EXPRESSLY CONTAINED IN THIS AGREEMENT, NEITHER SELLER NOR ANY AGENT, EMPLOYEE OR
OTHER REPRESENTATIVE OF SELLER (OR PURPORTED AGENT, EMPLOYEE OR OTHER
REPRESENTATIVE OF SELLER) HAS MADE ANY GUARANTEE, REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED (AND SELLER SHALL NOT HAVE ANY LIABILITY WHATSOEVER) AS TO
THE VALUE, USES, HABITABILITY, CONDITION, DESIGN, OPERATION, FINANCIAL CONDITION
OR PROSPECTS, OR FITNESS FOR PURPOSE OR USE OF THE PROPERTY (OR ANY PART
THEREOF) OR THE INFORMATION MATERIALS NOT PREPARED BY SELLER, OR ANY OTHER
GUARANTEE, REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH
RESPECT TO ANY PORTION OF THE PROPERTY (OR ANY PART THEREOF) OR THE INFORMATION
MATERIALS SUPPLIED TO BUYER. FURTHER, SELLER SHALL HAVE NO LIABILITY FOR ANY
LATENT, HIDDEN, OR PATENT DEFECT AS TO THE PROPERTY OR THE FAILURE OF THE
PROPERTY, OR ANY PART THEREOF, TO COMPLY WITH ANY APPLICABLE LAWS AND
REGULATIONS. IN PARTICULAR, BUYER ACKNOWLEDGES AND AGREES THAT THE INFORMATION
MATERIALS PROVIDED UNDER THIS AGREEMENT (AND ANY OTHER INFORMATION BUYER MAY
HAVE OBTAINED REGARDING IN ANY WAY ANY OF THE PROPERTY, INCLUDING WITHOUT
LIMITATION, ITS OPERATIONS OR ITS FINANCIAL HISTORY OR PROSPECTS FROM SELLER OR
ITS AGENTS, EMPLOYEES OR OTHER REPRESENTATIVES BUT NOT INCLUDING INFORMATION
PREPARED BY SELLER) IS DELIVERED TO BUYER AS A COURTESY, WITHOUT REPRESENTATION
OR WARRANTY AS TO ITS ACCURACY OR COMPLETENESS (EXCEPT AS EXPRESSLY PROVIDED IN
THIS AGREEMENT), AND NOT AS AN INDUCEMENT TO ACQUIRE THE PROPERTY; THAT NOTHING
CONTAINED IN SUCH DELIVERIES SHALL CONSTITUTE OR BE DEEMED TO BE A GUARANTEE,
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, IN ANY REGARD AS TO ANY OF THE
PROPERTY (EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT); AND THAT BUYER IS
RELYING ONLY UPON THE PROVISIONS OF THIS AGREEMENT AND ITS OWN INDEPENDENT
ASSESSMENT OF THE PROPERTY AND ITS PROSPECTS IN DETERMINING WHETHER TO ACQUIRE
THE PROPERTY. The provisions of this paragraph shall survive the Closing.
5.4 Return of Documents. If this Agreement is terminated for any reason
whatsoever, Buyer shall promptly deliver to Seller all documents, plans,
surveys, contracts, Leases and the like delivered to Buyer or Buyer's agents,
representatives or designees by Seller or Seller's agents, representatives or
employees pursuant to this Agreement. In addition, Buyer shall promptly deliver
to Seller copies of all materials prepared by third-parties obtained in
connection with Buyer's diligence. The return of the Escrowed Amount to Buyer
under this Agreement shall be contingent upon Buyer's fulfillment of the
obligations under this Section 5.4.
5.5 Confidentiality. Each party hereto agrees to maintain in confidence,
and not to discuss with or to disclose to any person or entity who is not a
party to this Agreement, any material term of this Agreement or any aspect of
the transactions contemplated hereby, except as provided in this Section. Seller
may publicly disclose the existence of this Agreement provided that the identity
of Buyer is not disclosed. Each party hereto may discuss with and disclose to
its directors, officers and employees, accountants, Attorney's, existing or
prospective lenders, investment bankers, underwriters, rating agencies,
partners, consultants and other advisors to the extent such parties reasonably
need to know such information and are bound by a confidentiality obligation
identical in all material respects to the one created by this Section.
Additionally, each party may discuss and disclose such matters to the extent
necessary to comply with any requirements of the Securities and Exchange
Commission or in order to comply with any securities law or interpretation
thereof. This provision shall survive termination of this Agreement but shall
terminate upon Closing. Buyer and Seller do not contemplate issuing a press
release until after the Diligence Date. Any press release to be made regarding
any matter which is the subject of the confidentiality obligation created in
this Section shall be subject to the reasonable approval of Buyer and Seller,
respectively both as to timing and content. Buyer agrees that neither it nor any
affiliate will acquire or enter into any agreement to acquire, either directly
or indirectly any interest in Seller.
5.6 Indemnity. If any inspection or test disturbs any of the Property,
Buyer will restore the Property to substantially the same condition as existed
prior to any such inspection or test. Buyer shall keep the Property free and
clear of any liens and will indemnify, defend, and hold Seller harmless from all
losses, costs and damages including reasonable Attorney's fees incurred by
Seller as a result of such entry or investigation by or on behalf of Buyer other
than loss, cost or damage which is discovered (and not caused) by such
investigation as a result of pre-existing conditions. This indemnity obligation
of Buyer shall survive the termination of this Agreement for any reason.
5.7 Buyer's Release of Seller. SELLER AND ITS PROPERTY MANAGER ARE HEREBY
RELEASED FROM ALL RESPONSIBILITY AND LIABILITY REGARDING THE CONDITION
(INCLUDING THE PRESENCE IN THE SOIL, AIR, STRUCTURES AND SURFACE AND SUBSURFACE
WATERS, OF MATERIALS OR SUBSTANCES THAT HAVE BEEN OR MAY BE IN THE FUTURE
DETERMINED TO BE TOXIC, HAZARDOUS, UNDESIRABLE OR SUBJECT TO REGULATION AND THAT
MAY NEED TO BE SPECIALLY TREATED, HANDLED AND/OR REMOVED FROM THE PROPERTY UNDER
CURRENT OR FUTURE FEDERAL, STATE AND LOCAL LAWS, REGULATIONS OR GUIDELINES),
VALUATION, SALABILITY OR UTILITY OF THE PROPERTY, OR ITS SUITABILITY FOR ANY
PURPOSE WHATSOEVER. BUYER ACKNOWLEDGES THAT ANY INFORMATION OF ANY TYPE WHICH
BUYER HAS RECEIVED OR MAY RECEIVE FROM SELLER, ITS PROPERTY MANAGER OR THEIR
RESPECTIVE AGENTS, INCLUDING, WITHOUT LIMITATION, ANY ENVIRONMENTAL REPORTS AND
SURVEYS, IS FURNISHED ON THE EXPRESS CONDITION THAT BUYER SHALL MAKE AN
INDEPENDENT VERIFICATION OF THE ACCURACY OF SUCH INFORMATION, ALL SUCH
INFORMATION BEING FURNISHED WITHOUT ANY WARRANTY WHATSOEVER.
ARTICLE 6
TITLE, SURVEY, CONDITIONS AND REPRESENTATIONS
6.1 Promptly following the execution of this Agreement Seller shall
provide Buyer with
(a) an updated ALTA as-built survey of the Real Property certified
to the Title Company and Buyer's lender (the Survey);
(b) a commitment for an ALTA Owners Policy of Title Insurance
showing Purchaser as insured, fee simple title to the Real Property
as the insured estate and the Purchase Price as the insurance
coverage amount (the Title Commitment). The Title Commitment shall
be for a policy with extended coverage along with a commitment to
issue a zoning endorsement and a contiguity endorsement, such
additional charges beyond the cost of a standard policy shall be at
Buyer's cost and expense; and
(c) a Phase I Environmental Inspection Report prepared by Dames &
Moore (the Phase I).
If (i) any matter disclosed on the Survey; (ii) matters listed as
exceptions in the Title Commitment; (iii) matters disclosed in the Phase I
report; or (iv) matters disclosed in any property condition report delivered to
Buyer pursuant to Section 5.2 (the Property Condition Report) are not each
satisfactory to Buyer, it shall, within fourteen (14) days following receipt of
the Title Commitment, provide Seller with written notice of such objections and
if Seller is unable or unwilling to cure such objections, prior to the Diligence
Date, Buyer may terminate this Agreement as provided in Section 5.3 above or
waive such objection and proceed to Closing. In the event that the Phase I
report or the Property Condition Report reveal property defects with an
estimated remediation or repair cost of less than $10,000.00, then, upon the
reasonable approval of Seller, Seller shall give Buyer a credit at Closing in
the amount of the estimated remediation or repair cost up to $10,000.00;
however, in no event shall this amount exceed $10,000.00. Seller shall in all
events be obligated to cure all objections constituting mortgages or other
voluntary encumbrances securing the repayment of money on or before the Closing
Date. To enable Seller to convey, Seller may, at the Closing use the Purchase
Price or any portion thereof to clear title. Those exceptions or title
deficiencies that appear on the Title Commitment are not objected to by Buyer
shall be the Permitted Encumbrances.
6.2 On the Closing Date, Seller shall convey by Warranty Deed to Buyer,
title to all of the Real Property and the Improvements free and clear of all
liens, encumbrances, conditions, easements, assessments, restrictions and other
conditions, except for the following:
(a) The lien, if any, for real estate taxes not yet due
and payable;
(b) All matters listed on the Title Commitment and as would be
disclosed on a current Survey and not objected to pursuant to Section 6.1
above;
(c) All Leases disclosed to Buyer;
(d) All zoning, building and other laws applicable to the Property;
and
(e) All matters which arise after the effective date of the Title
Commitment which are agreed upon or consented to by Buyer in writing.
6.3 At the Closing, Seller shall assign the Leases and Contracts which are
not to be terminated and intangible property, if any, to Buyer and Buyer shall
assume Seller's obligations thereunder from and after the Closing Date and
Seller shall convey the Personal Property to Buyer by quitclaim bill of sale.
6.4 Representations and Warranties
6.4.1 Seller hereby represents and warrants to Buyer as of the date
of this Agreement as follows:
(a) Organization and Power. Seller is a general partnership validly
existing under the laws of the State of Illinois with all necessary legal
power to enter into and perform its obligations hereunder and under any
document or instrument required hereunder to be executed and delivered on
behalf of Seller.
(b) Authorization and Execution. The execution and delivery of this
Agreement and the consummation of the transaction contemplated hereby have
been duly authorized by all necessary parties and no other proceedings on
the part of Seller are necessary in order to permit it to consummate the
transaction contemplated hereby. This Agreement has been duly executed and
delivered by Seller and (assuming valid execution and delivery by Buyer)
is a legal, solid and binding obligation of Seller enforceable against it
in accordance with its terms.
(c) Rent Roll. The rent roll attached hereto as Schedule C has been
prepared by Seller's property manager based on the Leases and is true,
accurate and complete in all material respects.
(d) Governmental Notices. Seller has not received any written notice
from a government agency that the location, construction, occupancy,
operation, and use of the Property (including any improvements and
equipment forming any part thereof) violate any applicable law, statute,
ordinance, rule, regulation, order or determination of any governmental
authority or any board of fire underwriters (or similar body), or any
restrictive covenant or deed restriction or zoning ordinance or
classification affecting the Property, including, without limitation, all
applicable building codes, flood disaster laws, and health and
environmental laws and regulations (hereinafter sometime collectively
called Applicable Laws). Seller has not received any written notice from a
governmental agency that the Property and Seller are currently subject to
any existing pending or threatened investigation or inquiry by any
governmental authority or to any remedial obligations under any Applicable
Laws pertaining to health or the environment.
6.4.2 The representations and warranties contained in Section
6.4.1(c) and (d) are hereby qualified to Seller's actual knowledge without
further inquiry, except as provided below. Each representation or warranty
contained in Section 6.4.1 is subject to being updated by Seller in writing on
or before the Diligence Date and shall be deemed to have been amended and
updated by any information delivered to or made available to Buyer and any other
information obtained by Buyer in connection with its diligence (including but
not limited to tenant estoppel certificates). For purposes of Section 6.4.1
actual knowledge of Seller without further inquiry shall mean the actual
awareness of Rock M. D'Errico provided that such individual has no obligation to
make further inquiry of any persons other than reasonable inquiry of its
property manager.
6.4.3 Buyer hereby represents and warrants to Seller as of the date
of this Agreement as follows:
(a) Organization and Power. Buyer is a __________________ organized,
existing and in good standing under the laws of the State of ___________
and has the requisite power and authority to enter into and perform the
terms of this Agreement.
(b) Authorization and Execution. The execution and delivery of this
Agreement and the consummation of the transaction contemplated hereby have
been duly authorized by all necessary parties and no other proceedings on
the part of Buyer are necessary in order to permit it to consummate the
transaction contemplated hereby. This Agreement has been duly executed and
delivered by Buyer and (assuming valid execution and delivery by Seller)
is a legal, valid and binding obligation of Buyer enforceable against it
in accordance with its terms.
6.4.4 The representations and warranties of Seller contained in
Section 6.4.1 shall not survive Closing.
6.5 The obligations of Buyer to consummate the transaction contemplated by
this Agreement are subject to:
(a) The representations and warranties made by Seller in this
Agreement being true and correct in all material respects on and as of the
Closing Date with the same force and effect as though such representations
and warranties had been made as of the Closing Date.
6.6 The obligations of Seller to consummate the transaction contemplated
by this Agreement are subject to:
(a) The representations and warranties made by Buyer in this
Agreement being true and correct in all material respects on and as of the
Closing Date with the same force and effect as though such representations
and warranties had been made as of the Closing Date.
ARTICLE 7
CLOSING
7.1 The consummation of the purchase and sale contemplated in this
Agreement (the Closing) shall occur at the offices of the Title Company, on the
date that is thirty (30) days after the Diligence Date (the Closing Date). It is
agreed that time is of the essence in this Agreement.
7.2 On the Closing Date Seller shall deliver or cause to be delivered each
of the following items to Buyer:
(a) A duly executed and acknowledged Warranty Deed conveying the
Real Property and the Improvements to Buyer in the form attached hereto as
Schedule G;
(b) Duly executed quitclaim bill of sale conveying the Personal
Property to Buyer in the form attached hereto as Schedule H;
(c) Duly executed assignment and assumption of Leases (the
Assignment of Leases) in the form attached hereto as Schedule I;
(d) Duly executed assignment and assumption of Contracts, and
intangible property (the Assignment of Contracts) in the form attached
hereto as Schedule J;
(e) Transfer tax statements (or similar affidavits or forms), if
required of the Seller by local law to effect transfer or recordation of
the Deed;
(f) Certificate or certificates of non-foreign status from Seller in
the form attached hereto as Schedule K;
(g) Customary affidavits and indemnities sufficient for the Title
Company to delete any exceptions for mechanics or materialmen's' liens
from Buyer's title policy and such other affidavits relating to such title
policy as the Title Company may reasonably request;
(h) Counterpart original of the closing statement setting forth the
Purchase Price, the closing adjustments and the application of the
Purchase Price as adjusted (the Closing Statement);
(i) Original tenant estoppel certificates, to the extent received;
(j) All business and accounting records pertaining to the operation
of the Property in Seller's possession;
(k) All original Leases and tenant correspondence in each case, if
in Seller's possession;
(l) Keys to all locks which manager has in its possession;
and
(m) Notice letters from Seller to tenants of the sale of the
Property and assignment of the Leases;
(n) At Seller's expense (except for the cost of any endorsements
which are to be paid by Buyer), an Owners Title Policy based on the Title
Commitment; and
(o) All documents customarily and reasonably required by Title
Company confirming Seller's authority to sell the Property.
(p) Such other instruments as Buyer or Buyer's lender may reasonably
request to effectuate the transaction contemplated by this Agreement.
7.3 On the Closing Date Buyer shall deliver or cause to be delivered at
its expense each of the following to Seller:
(a) Purchase Price for the Property, as such Purchase Price may have
been further adjusted pursuant to the provisions of this Agreement and
credited for any portion of the Escrowed Amount, including interest on the
Escrowed Amount, paid to Seller, in the manner provided for in Article 3;
(b) Duly executed Assignment of Leases;
(c) Duly executed Assignment of Contracts;
(d) Counterpart original of the Closing Statement; and
(e) Such other instruments as Seller may reasonably request to
effectuate the transaction contemplated by this Agreement.
ARTICLE 8
CASUALTY AND CONDEMNATION
8.1 If the Improvements are materially damaged by fire or any other
casualty and are not substantially restored to the condition immediately prior
to such casualty before the Closing Date, Buyer shall have the following
elections:
(a) to purchase the Property in its then condition and pay the
Purchase Price, in which event Seller shall pay over or assign to Buyer as
the case may be, on the Closing Date, all amounts recovered or recoverable
by Seller on account of any insurance as a result of such casualty plus
the amount of any applicable deductible, less any amounts reasonably
expended by Seller for partial restoration; or
(b) if any portion of the Improvements shall have been substantially
destroyed (in Buyer's sole and absolute discretion), to terminate this
Agreement by giving notice of termination to Seller on or before that date
which is thirty (30) days after the occurrence of the fire or other
casualty or on the Closing Date, whichever occurs first, in which event
the Title Company shall return the Escrowed Amount and all interest
incurred on the Escrowed Amount to Buyer, this Agreement shall terminate
and neither Seller nor Buyer shall have any recourse against the other
(except to the extent such recourse arises in connection with a provision
of this Agreement which is intended to survive termination). For purposes
of this subparagraph (b), substantially destroyed shall mean damage, in
Seller's reasonable judgment, greater than $500,000.
8.2 If any portion of or interest in the Property shall be taken or is in
the process of being taken by exercise of the power of eminent domain or if any
governmental authority notifies Seller prior to the Closing Date of its intent
to take or acquire any portion of or interest in the Property (each an Eminent
Domain Taking), Seller shall give notice promptly to Buyer of such event and
Buyer shall have the option to terminate this Agreement by providing notice to
Seller to such effect on or before the date which is ten (10) days from Seller's
notice to Buyer of such Eminent Domain Taking or on the Closing Date, whichever
occurs first, in which event the Title Company shall return the Escrowed Amount
to Buyer, this Agreement shall terminate, and neither Seller nor Buyer shall
have any recourse against the other. If Buyer does not timely notify Seller of
its election to terminate this Agreement, Buyer shall purchase the Property and
pay the Purchase Price, and Seller shall pay over or assign to Buyer on delivery
of the deed all awards recovered or recoverable by Seller on account of such
Eminent Domain Taking, less any amounts reasonably expended by Seller in
obtaining such award.
ARTICLE 9
BROKERAGE COMMISSIONS
Seller represents and warrants to Buyer that Seller has not used or
employed any broker or brokers in connection with the negotiation, execution or
consummation of the transaction contemplated by this Agreement other than Mr.
Daniel Chalifoux (Seller's Agent). Seller will indemnify, defend and hold Buyer
harmless from and against any claims of Seller's Agent for any commission,
finders fee, or other compensation in connection with the transactions
contemplated by this Agreement. Seller agrees to pay Seller's Agent its
commission in accordance with a separate agreement between Seller and Seller's
Agent.
Buyer represents and warrants to Seller that Buyer has not used or
employed any broker or brokers in connection with the negotiation, execution or
consummation of the transaction contemplated by this Agreement.
Buyer and Seller each hereby agree to indemnify, defend and hold the other
harmless from and against any claims, losses, damages, costs, or expenses
(including, but not limited to, reasonable Attorney's fees) of any kind or
character which arise as a result of breach of the foregoing representation and
warranty. This Section 9 shall survive the Closing or earlier termination of the
Agreement.
ARTICLE 10
DEFAULT, TERMINATION AND REMEDIES
10.1 In the event that Seller shall have failed in any material respect
adverse to Buyer on the Closing Date to have performed any of the covenants and
agreements contained in this Agreement which are to be performed by Seller on or
before the Closing Date, Buyer shall have the following remedies, (i) the right
to take any and all legal actions necessary to compel Seller's specific
performance hereunder (it being acknowledged that damages at law would be an
inadequate remedy), and to consummate the transaction contemplated by this
Agreement in accordance with the provisions of this Agreement (such conveyance
shall be deemed to satisfy and waive any other remedy) or (ii) the right to
terminate this Agreement and receive the Escrowed Amount.
10.2 In the event that Buyer shall have failed in any material respect
adverse to Seller on the Closing Date to have performed any of the covenants and
agreements contained in this Agreement which are to be performed by Buyer on or
before the Closing Date, or if Buyer defaults in its obligation to close
hereunder, Seller shall be entitled to receive the Escrowed Amount as liquidated
damages, in lieu of all other remedies available to Seller at law or in equity
for such default, and Buyer shall direct the Title Company to release the
Escrowed Amount to Seller. Seller and Buyer agree that the damages resulting to
Seller as a result of such default by Buyer as of the date of this Agreement are
difficult or impossible to ascertain and the liquidated damages set forth in the
preceding sentence constitute Buyer's and Seller's reasonable estimate of such
damages.
ARTICLE 11
MISCELLANEOUS
11.1 Buyer may only assign or transfer its rights under this Agreement to
an entity owned, or controlled by Buyer or which owns or controls Buyer. The
covenants and agreements contained in this Agreement shall extend to and be
obligatory upon the permitted successors and assigns of the respective parties
to this Agreement.
11.2 Except as otherwise specifically provided herein, any notice required
or permitted to be delivered under this Agreement shall be in writing and shall
be deemed given if (i) delivered by hand during regular business hours, (ii)
sent by United States Postal Service, registered or certified mail, postage
prepaid, return receipt requested, (iii) sent by a reputable overnight express
mail service that provides tracing and proof of receipt or refusal of items
mailed, or (iv) sent by telecopier or facsimile transmission with confirmation
copy by notice methods (i), (ii) or (iii) above addressed to Seller or Buyer, as
the case may be, at the address or addresses set forth below or such other
addresses as the parties may designate in a notice similarly sent. Any notice
given by a party to Title Company shall be simultaneously given to the other
party. Any notice given by a party to the other party relating to its
entitlement to the Escrowed Amount shall be simultaneously given to the Title
Company.
(1) If to Buyer:
Ms. Keiko Iseda
c/o Kampai Restaurant
2330 S. Elmhurst Road
Mt. Prospect, IL 60056
Telecopy: (847) 640-6760
with a copy to:
Drost & Kivlahan, Ltd.
11 S. Dunton Avenue
Arlington Heights, IL 60005
Attention: George T. Drost, Esq.
Telecopy: (847) 577-2204
(2) If to Seller:
Chicago Colony Square Associates
c/o PaineWebber Income Properties Seven Limited Partnership
265 Franklin Street, 16th Floor
Boston, MA 02110
Attention: Mr. Rock D'Errico
Telecopy: (617) 478-4725
and
Chicago Colony Square Company, Ltd.
c/o Paragon Group
1401 South Brentwood Boulevard
St. Louis, MO 63144
Attention: Mr. Lewis A. Levey
Telecopy: (314) 963-9715
with a copy to:
Goodwin, Procter and Hoar LLP
Exchange Place
Boston, Massachusetts 02109
Attention: Andrew C. Sucoff, Esq.
Telecopy: (617) 277-8591
(3) If to the Title Company:
Ticor Title Insurance Company
203 North LaSalle Street
Suite 1390
Chicago, Illinois 60601
Attention: Jim Kelsch
Telecopy: (312) 621-5062
11.3 Words of any gender used in this Agreement shall be held and
construed to include any other gender, and words of a singular number shall be
held to include the plural and vice versa, unless the context requires
otherwise.
11.4 The captions used in connection with the Articles of this Agreement
are for convenience only and shall not be deemed to extend, limit or otherwise
define or construe the meaning of the language of this Agreement.
11.5 Nothing in this Agreement, express or implied, is intended to confer
upon any person, other than the parties hereto and their respective successors
and assigns, any rights or remedies under or by reason of this Agreement.
11.6 This Agreement may be amended only by a written instrument executed
by Seller and Buyer (or Buyer's assignee or transferee).
11.7 This Agreement embodies the entire agreement between Seller and Buyer
with respect to the transaction contemplated in this Agreement, and there have
been and are no covenants, agreements, representations, warranties or
restrictions between Seller and Buyer with regard thereto other than those set
forth or provided for in this Agreement.
11.8 This Agreement shall be construed under and in accordance with the
laws of the State of Illinois.
11.9 This Agreement may be executed in two (2) or more counterparts, each
of which shall be an original but such counterparts together shall constitute
one and the same instrument notwithstanding that both Buyer and Seller are not
signatory to the same counterpart.
11.10 The Title Company has executed this Agreement only for the purpose
of agreeing to perform the duties assigned to it under this Agreement. Prior to
the Diligence Date, Title Company is hereby authorized and directed to release
the Escrowed Amount to Buyer promptly upon Buyer's written request, without
joinder by Seller and not withstanding any objection interposed by Seller. This
Agreement shall terminate upon any such request from Buyer pursuant to Section
5.3 above. From and after the Diligence Date the Title Company shall, upon
receiving a copy of a notice given by a party in accordance with this Agreement
claiming entitlement to all or a portion of the Escrowed Amount, give a notice
to the other party that such claim of entitlement has been made. If the Escrowed
Amount is in the form of a letter of credit and the expiry thereof has not been
extended, Title Company shall cause the letter of credit to be drawn upon and
hold the proceeds as the Escrowed Amount. The Title Company shall not cause or
permit any portion of the Escrowed Amount to be disbursed until the expiration
of five (5) days of giving such notice whereupon, if the party to whom such
notice was given has not given the Title Company notice of its objection to a
disbursement in accordance with the claim of entitlement, the Title Company
shall cause a disbursement of the Escrowed Amount as requested. If such party
timely objects, however, the Title Company shall retain the Escrowed Amount and
not disburse any portion of the same unless directed by the mutual written
direction of the parties. The Title Company shall at all times disburse the
Escrowed Amount as required in a mutual written direction of the parties.
11.11 In the event of any disagreement between the parties, the Title
Company shall retain all deposits pending instructions mutually agreed to by
Seller and Buyer. In the event there is no mutual agreement by Seller and Buyer
for disbursements, the Title Company shall hold said deposits pending a court
order to disburse. The Title Company may conclusively rely on the authenticity,
validity and effectiveness of any writing delivered to it, and Title Company
shall not be obligated to make any investigation or determination, except as
provided in the case of disputes as to the truth and accuracy of any information
contained therein. Buyer and Seller agree to defend, indemnify and hold Title
Company harmless from any liabilities, suits, claims, or expenses arising from
or out of or in connection with Title Company's acts or failure to act
hereunder, unless caused or created as a result of Title Company's gross
negligence, and Title Company shall be entitled to reimbursement by Buyer and/or
Seller for all reasonable costs and expenses incurred in the performance of its
duties hereunder including, without limitation, all out-of-pocket expenses and
reasonable Attorney's fees of counsel retained by Title Company. Any such costs
and expenses not paid by the parties after billing and supporting documentation
by Title Company may be paid by Title Company out of the Escrowed Amount. If
there is a settlement by Buyer and Seller prior to a court order, Buyer and
Seller will share equally in the expenses incurred by the Title Company.
Otherwise, the non-prevailing party shall assume full responsibility for the
Title Company's expenses. Title Company is not required to advance or expend or
risk its own funds or otherwise incur personal liability in performance of its
duties hereunder and it may require advancement of funds by the parties.
11.12 Time is expressly declared to be of the essence of this Agreement.
11.13 The obligations of Seller hereunder shall be binding only on the
Property and neither Buyer nor anyone claiming by, through or under Buyer shall
be entitled to obtain any judgment extending liability beyond the Property or
creating personal liability on the part of the officers, directors,
shareholders, or agents of Seller or any of their successors. The obligations of
Buyer hereunder shall be binding only on the assets of Buyer and neither Seller
nor anyone claiming by, through or under Seller shall be entitled to obtain any
judgment creating personal liability on the part of the partners, officers,
shareholders, or agents of Buyer or any of their successors or any affiliated
entities.
11.14 As used herein, the term business day shall mean any day other than
on Saturday, Sunday, or federal holiday.
11.15 Property Conveyed AS IS. (a) NOTWITHSTANDING ANYTHING CONTAINED
HEREIN TO THE CONTRARY, IT IS UNDERSTOOD AND AGREED THAT, EXCEPT AS EXPRESSLY
SET FORTH HEREIN, SELLER AND ITS PROPERTY MANAGER HAVE NOT MADE AND ARE NOT NOW
MAKING, AND THEY SPECIFICALLY DISCLAIM, ANY OTHER WARRANTIES, REPRESENTATIONS OR
GUARANTIES OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST,
PRESENT OR FUTURE, WITH RESPECT TO THE PROPERTY, INCLUDING, BUT NOT LIMITED TO,
WARRANTIES, REPRESENTATIONS OR GUARANTIES AS TO (I) MATTERS OF TITLE (OTHER THAN
SELLER'S WARRANTY OF TITLE SET FORTH IN THE DEED (HEREINAFTER DEFINED) TO BE
DELIVERED AT CLOSING), (II) ENVIRONMENTAL MATTERS RELATING TO THE PROPERTY OR
ANY PORTION THEREOF, (III) GEOLOGICAL CONDITIONS, INCLUDING, WITHOUT LIMITATION,
SUBSIDENCE, SUBSURFACE CONDITIONS, WATER TABLE, UNDERGROUND WATER RESERVOIRS,
LIMITATIONS REGARDING THE WITHDRAWAL OF WATER, AND EARTHQUAKE FAULTS AND THE
RESULTING DAMAGE OF PAST AND/OR FUTURE EARTHQUAKES, (IV) WHETHER, AND TO THE
EXTENT TO WHICH THE PROPERTY OR ANY PORTION THEREOF IS AFFECTED BY ANY STREAM
(SURFACE OR UNDERGROUND), BODY OF WATER, FLOOD PRONE AREA, FLOOD PLAIN, FLOODWAY
OR SPECIAL FLOOD HAZARD, (V) DRAINAGE, (VI) SOIL CONDITIONS, INCLUDING THE
EXISTENCE OF INSTABILITY, PAST SOLID REPAIRS, SOIL ADDITIONS OR CONDITIONS OF
SOIL FILL, OR SUSCEPTIBILITY TO LANDSLIDES, OR THE SUFFICIENCY OF ANY
UNDERSHORING, (VII) ZONING TO WHICH THE PROPERTY OR ANY PORTION THEREOF MAY BE
SUBJECT, (VIII) THE AVAILABILITY OF ANY UTILITIES TO THE PROPERTY OR ANY PORTION
THEREOF INCLUDING, WITHOUT LIMITATION, WATER, SEWAGE, GAS AND ELECTRIC, (IX)
USAGES OF ADJOINING PROPERTY, (X) ACCESS TO THE PROPERTY OR ANY PORTION THEREOF,
(XI) THE VALUE, COMPLIANCE WITH THE PLANS AND SPECIFICATIONS, SIZE, LOCATION,
AGE, USE, DESIGN, QUALITY, DESCRIPTION, SUITABILITY, STRUCTURAL INTEGRITY,
OPERATION, TITLE TO, OR PHYSICAL OR FINANCIAL CONDITION OF THE PROPERTY OR ANY
PORTION THEREOF, OR ANY INCOME, EXPENSES, CHARGES, LIENS, ENCUMBRANCES, RIGHTS
OR CLAIMS ON OR AFFECTING OR PERTAINING TO THE PROPERTY OR ANY PART THEREOF, OR
ANY INCOME, EXPENSES, CHARGES, LIENS, ENCUMBRANCES, RIGHTS OR CLAIMS ON OR
AFFECTING OR PERTAINING TO THE PROPERTY OR ANY PART THEREOF, (XII) THE PRESENCE
OF HAZARDOUS SUBSTANCES IN OR ON, UNDER OR IN THE VICINITY OF THE PROPERTY,
(XIII) THE CONDITION OR USE OF THE PROPERTY OR COMPLIANCE OF THE PROPERTY WITH
ANY OR ALL PAST, PRESENT OR FUTURE FEDERAL, STATE OR LOCAL ORDINANCES, RULES,
REGULATIONS OR LAWS, BUILDING, FIRE OR ZONING ORDINANCES, CODES OR OTHER SIMILAR
LAWS, (XIV) THE EXISTENCE OR NON-EXISTENCE OF UNDERGROUND STORAGE TANKS, (XV)
ANY OTHER MATTER AFFECTING THE STABILITY OR INTEGRITY OF THE REAL PROPERTY,
(XVI) THE POTENTIAL FOR FURTHER DEVELOPMENT OF THE PROPERTY, (XVII) THE
EXISTENCE OF VESTED LAND USE, ZONING OR BUILDING ENTITLEMENTS AFFECTING THE
PROPERTY, (XVIII) THE MERCHANTABILITY OF THE PROPERTY OR FITNESS OF THAT
PROPERTY FOR ANY PARTICULAR PURPOSE (BUYER AFFIRMING THAT BUYER HAS NOT RELIED
ON SELLER'S OR ITS PROPERTY MANAGERS SKILL OR JUDGMENT TO SELECT OR FURNISH THE
PROPERTY FOR ANY PARTICULAR PURPOSE, AND THAT SELLER MAKES NO WARRANTY THAT THE
PROPERTY IS FIT FOR ANY PARTICULAR PURPOSE), OR (XIX) TAX CONSEQUENCES.
(b) BUYER HAS NOT RELIED UPON AND WILL NOT RELY UPON, EITHER
DIRECTLY OR INDIRECTLY, ANY REPRESENTATION OR WARRANTY OF SELLER OR ITS PROPERTY
MANAGER OR ANY OF THEIR RESPECTIVE AGENTS, EXPECT AS EXPRESSLY SET FORTH HEREIN,
AND ACKNOWLEDGES THAT NO OTHER SUCH REPRESENTATIONS HAVE BEEN MADE. BUYER
REPRESENTS THAT IT IS A KNOWLEDGEABLE, EXPERIENCED AND SOPHISTICATED BUYER OF
REAL ESTATE AND THAT IT IS RELYING SOLELY ON ITS OWN EXPERTISE AND THAT OF
BUYER'S CONSULTANTS IN PURCHASING THE PROPERTY. BUYER WILL CONDUCT SUCH
INSPECTIONS AND INVESTIGATIONS OF THE PROPERTY AS BUYER DEEMS NECESSARY,
INCLUDING, BUT NOT LIMITED TO, THE PHYSICAL AND ENVIRONMENTAL CONDITIONS
THEREOF, AND SHALL RELY UPON SAME. UPON CLOSING, BUYER SHALL ASSUME THE RISK
THAT ADVERSE MATTERS, INCLUDING, BUT NOT LIMITED TO, ADVERSE PHYSICAL AND
ENVIRONMENTAL CONDITIONS, MAY NOT HAVE BEEN REVEALED BY BUYER'S INSPECTIONS AND
INVESTIGATIONS. BUYER ACKNOWLEDGES AND AGREES THAT UPON CLOSING, SELLER SHALL
SELL AND CONVEY TO BUYER AND BUYER SHALL ACCEPT THE PROPERTY AS IS, WHERE IS,
WITH ALL FAULTS. BUYER FURTHER ACKNOWLEDGES AND AGREES THAT THERE ARE NO ORAL
AGREEMENTS, WARRANTIES OR REPRESENTATIONS, COLLATERAL TO OR AFFECTING THE
PROPERTY BY SELLER, ANY AGENT OF SELLER OR ANY THIRD PARTY. THE TERMS AND
CONDITIONS OF THIS SECTION 11.4(B) SHALL EXPRESSLY SURVIVE THE CLOSING, NOT
MERGE WITH THE PROVISIONS OF ANY CLOSING DOCUMENTS AND SHALL BE INCORPORATED
INTO THE DEED. SELLER IS NOT LIABLE OR BOUND IN ANY MANNER BY ANY ORAL OR
WRITTEN STATEMENTS, REPRESENTATIONS, OR INFORMATION PERTAINING TO THE PROPERTY
FURNISHED BY ANY REAL ESTATE BROKER, AGENT, EMPLOYEE, SERVANT OR OTHER PERSON,
UNLESS THE SAME ARE SPECIFICALLY SET FORTH OR REFERRED TO HEREIN. BUYER
ACKNOWLEDGES THAT THE PURCHASE PRICE REFLECTS THE AS IS NATURE OF THIS SALE AND
ANY FAULTS, LIABILITIES, DEFECTS OR OTHER ADVERSE MATTERS THAT MAY BE ASSOCIATED
WITH THE PROPERTY. BUYER HAS FULLY REVIEWED THE DISCLAIMERS AND WAIVERS SET
FORTH IN THIS AGREEMENT WITH ITS COUNSEL AND UNDERSTANDS THE SIGNIFICANCE AND
EFFECT THEREOF.
--------------
Buyer's Initials
ARTICLE 12
IRS FORM 1099-S DESIGNATION
12.1 In order to comply with information reporting requirements of Section
6045(e) of the Internal Revenue Code of 1986, as amended, and the Treasury
Regulations thereunder, the parties agree (1) to execute an IRS Form 1099-S
Designation Agreement in the form attached hereto as Schedule D at or prior to
the Closing to designate the Title Company (the Designee) as the party who shall
be responsible for reporting the contemplated sale of the Property to the
Internal Revenue Service (the IRS) on IRS Form 1099-S; (2) to provide the
Designee with the information necessary to complete Form 1099-S; (3) that the
Designee shall not be liable for the actions taken under this Agreement, or for
the consequences of those actions, except as they may be the result of gross
negligence or willful misconduct on the part of the Designee; and (4) that the
Designee shall be indemnified by the parties for any costs or expenses incurred
as a result of the actions taken hereunder, except as they may be the result of
gross negligence or willful misconduct on the part of the Designee. The Designee
shall provide all parties to this transaction with copies of the IRS Forms
1099-S filed with the IRS and with any other documents used to complete IRS Form
1099-S.
IN WITNESS WHEREOF, the parties have executed this instrument as of the
day and year first set forth above.
SELLER:
Chicago Colony Square Associates
By: Chicago Colony Square Company, Ltd.
By: /s/ Lewis A. Levey
------------------
Name: Lewis A. Levey
Title: President
By: PaineWebber Income Properties Seven
Limited Partnership, its
General Partner
By: Seventh Income
Properties Fund, Inc.,
its General Partner
By: /s/ Rock M. D'Errico
--------------------
Name: Rock M. D'Errico
Title: Vice President
BUYER:
Keiko Iseda
By: /s/ Keiko Iseda
---------------
TITLE COMPANY:
Ticor Title Insurance Company
By: /s/ Christine A. Hathaway
-------------------------
Name: Christine A. Hathaway
Title: National Escrow
Closer/Coordinator
<PAGE>
First Amendment to Purchase and Sale Agreement
This First Amendment to Purchase and Sale Agreement is entered into as of
this 1st day of September, 1998 by and among Chicago Colony Square Associates,
an Illinois general partnership (Seller), Keiko Iseda, an individual residing at
816 South Burton, Arlington Heights, Illinois (Buyer) and HANJO, L.L.C., an
Illinois limited liability company (the Assignee), for the purpose of amending
that certain Purchase and Sale Agreement dated as of July 9, 1998 (the
Agreement) between Seller and Buyer with respect to the Property described
therein known as Colony Square Shopping Center. Capitalized terms used in this
Agreement, if not otherwise defined, shall have the same meaning as in the
Agreement.
WHEREAS, the Diligence Date described in paragraph 5 below expires on this
date, and Buyer and Seller have agreed to extend the Diligence Date as described
below; and
WHEREAS, Buyer desires to assign to Assignee all of her right, title and
interest as Buyer under or in connection with the Agreement, including without
limitation, all right, title and interest of the Buyer to the Escrowed Amount;
NOW THEREFORE, for good and valuable consideration, the receipt of which
is hereby acknowledged, Buyer, Seller and Assignee hereby agree as follows:
1. Diligence Date. Pursuant to Section 5.3 of the Agreement,
Buyer hereby gives notice of satisfaction of due diligence
matters relating to the Property, with the exception of the
physical condition of the Property as it relates to
environmental matters. Buyer and Seller agree to extend
the Diligence Date as it relates to environmental matters
at the Property to Friday, September 11, 1998. Buyer shall
continue to have the right to terminate this Agreement with
respect to its obligations to purchase of the Property for
any reason relating to the physical condition of the
Property as it relates solely to environmental matters at
any time up to and including Friday, September 11, 1998,
such right to be exercised in accordance with Section 5.3
of the Agreement.
2. Closing Date. Buyer and Seller agree that the Closing Date shall be
Monday, October 12, 1998, or such other date as the parties shall
mutually agree upon in writing.
3. Assignment. Buyer hereby assigns to Assignee all of her
right, title and interest as Buyer under or in connection
with the Agreement, including without limitation, all
right, title and interest of the Buyer to the Escrowed
Amount and Assignee hereby assumes and agrees to perform
all of Buyers obligations and liabilities under or in
connection with the Agreement, including without
limitation, all obligations and liabilities in connection
with the Escrowed Amount.
<PAGE>
Executed as a sealed instrument as of the date set forth above.
SELLER:
CHICAGO COLONY SQUARE ASSOCIATES,
an Illinois general partnership
By: Chicago Colony Square Company, Ltd.
By: /s/ Lewis A. Levey
-------------------
Lewis A. Levey
By: PaineWebber Income Properties Seven Limited
Partnership, a Delaware limited partnership
By: Seventh Income Properties, Inc.,
a Delaware corporation
By: /s/ Rock M. D'Errico
--------------------
Name: Rock M. D'Errico
Title: Vice President
BUYER:
KEIKO ISEDA
By: /s/ Keiko Iseda
---------------
ASSIGNEE:
HANJO, L.L.C.
By: /s/ Keiko Iseda
---------------
Name: Keiko Iseda
Title: President
<PAGE>
Second Amendment to Purchase and Sale Agreement
This Second Amendment to Purchase and Sale Agreement is entered into as of
this 27th day of October, 1998 by and among Chicago Colony Square Associates, an
Illinois general partnership (Seller), and HANJO, L.L.C., an Illinois limited
liability company (Buyer), for the purpose of amending that certain Purchase and
Sale Agreement dated as of July 9, 1998 as amended by that certain First
Amendment to Purchase and Sale Agreement dated as of September 1, 1998 (as
amended, the Agreement) between Seller and Buyer with respect to the Property
described therein known as Colony Square Shopping Center. Capitalized terms used
in this Agreement, if not otherwise defined, shall have the same meaning as in
the Agreement.
WHEREAS, the Diligence Date as it relates to environmental matters only
expires on this date, and Buyer and Seller have reached an agreement with
respect to remediation of the environmental contamination at the Star Cleaners
site;
NOW THEREFORE, for good and valuable consideration, the receipt of which
is hereby acknowledged, Buyer and Seller hereby agree as follows:
1. Buyer's Assumption of Liability; Release of Claims and Indemnity.
(a) Buyer acknowledges that it has had an opportunity to review
available documents concerning environmental matters affecting the
Property and to conduct such other investigations of environmental
matters as it deems necessary.
(b) Upon the sale and purchase of the Property, Buyer shall (i)
assume responsibility for Remediation of the environmental
contamination as specifically described in the Focused Phase II
Environmental Site Investigation/Remediation (the Report) prepared
by Dames & Moore dated October 8, 1998 (Remediation) and (ii) be
obligated to carry out the Remediation in a timely manner. In
addition, upon the sale and purchase of the Property, Buyer and
anyone claiming by, through or under Buyer shall relinquish any
rights which it may have against Seller at any time, and shall
release Seller from any and all claims which it may have at any
time, with respect to the Remediation and environmental
contamination by the chemicals described in the Report under any
common law theory, or any law, regulation, rule, ordinance, or
by-law at the federal, state or local level, whether existing as of
the date hereof, previously enforced or subsequently enacted.
(c) Buyer agrees to indemnify and hold harmless Seller, its
officers, employees, agents, successors, and assigns (the
Indemnitees), against and in respect of, any and all damages,
losses, liabilities, expenses, costs, claims, actions, suits,
proceedings, assessments, orders, judgments, fines, and penalties,
which may be imposed upon, incurred by, or asserted against any of
the Indemnitees by any other party or parties (including, without
limitation, a governmental entity) relating directly to the
Remediation.
2. Credit at Closing. Seller hereby agrees to give Buyer a credit at
Closing in the amount of One Hundred Fifty Thousand Dollars
($150,000.00) so that Buyer may carry out the Remediation. Seller
reserves any rights it may have against Star Cleaners and/or
previous tenants at the Star Cleaners site for claims relating to
the Remediation and the environmental contamination at the Star
Cleaners site.
3. Closing Date. Buyer and Seller hereby (i) acknowledge that all
conditions to Closing have been satisfied and (ii) agree that the
Closing Date shall be Monday, November 16, 1998, or such other date
as the parties shall mutually agree upon in writing.
<PAGE>
Executed as a sealed instrument as of the date set forth above.
SELLER:
CHICAGO COLONY SQUARE ASSOCIATES,
an Illinois general partnership
By: Chicago Colony Square Company, Ltd.
By: /s/ Lewis A. Levey
------------------
Lewis A. Levey
By: PaineWebber Income Properties Seven
Limited Partnership, a Delaware
limited partnership
By: Seventh Income Properties, Inc.,
a Delaware corporation
By: /s/ Rock M. D'Errico
--------------------
Name: Rock M. D'Errico
Title: Vice President
BUYER:
HANJO, L.L.C.
By: /s/ Keiko Iseda
---------------
Name: Keiko Iseda
Title: President
<PAGE>
Special Warranty Deed
Know all men by these presents that, Chicago Colony Square Associates
(Grantor), an Illinois general partnership with an address c/o PaineWebber
Properties, 265 Franklin Street, Boston, MA 02110, for and in consideration of
Two Million Three Hundred Thousand Dollars ($2,300,000.00), in hand paid does
remise, release, alien and convey to HANJO, L.L.C. (Grantee), an Illinois
limited liability company with an address c/o The Kampai Restaurant, 2330 South
Elmhurst Road, Mount Prospect, IL 60056, the land and improvements legally
described in Exhibit A attached hereto and incorporated herein with all
appurtenances thereunto belonging, subject to and excepting all encumbrances of
record.
TO HAVE AND TO HOLD the above-described property, unto said Grantee and
Grantees successors and assigns forever; and Grantor does hereby bind itself and
its successors and assigns against every person whomsoever lawfully claiming the
same or any part thereof by, through or under Grantor but not otherwise.
WITNESS my hand and seal this 7th day of November, 1998.
GRANTOR:
CHICAGO COLONY SQUARE
ASSOCIATES
By: Chicago Colony Square
Company, Ltd., general
partner
By: /s/ Lewis A. Levey
------------------
Name: Lewis A. Levey
Title: President
By: PaineWebber
Income Properties Seven
Limited Partnership,
general partner
By: Seventh Income
Properties Fund,
Inc., its
managing general
partner
By: /s/ Rock M. D'Errico
--------------------
Name: Rock M. D'Errico
Title: Vice President
<PAGE>
Assignment and Assumption of Leases and Security Deposits
THIS ASSIGNMENT OF LEASES AND SECURITY DEPOSITS (Assignment) is made
and entered into effective this 17th day of November, 1998, by and between
CHICAGO COLONY SQUARE ASSOCIATES, an Illinois general partnership (Assignor) and
HANJO, L.L.C., an Illinois limited liability company, (Assignee).
The parties enter into this Assignment on the basis of and in
reliance upon the following facts:
A. Assignor has conveyed contemporaneously herewith to Assignee that
certain improved parcel of land located in the Mount Prospect, Illinois, more
particularly described on EXHIBIT A attached hereto and by this reference
incorporated herewith (the Property).
B. Assignor has previously, in its capacity as owner of the Property,
entered into certain occupancy leases at the Property, which are currently in
force and effect, as described in EXHIBIT B attached hereto and by this
reference incorporated herewith (Leases).
C. Assignor now desires to assign and transfer to Assignee all of the
Leases, together with any security deposits paid pursuant to the terms thereof
and listed on EXHIBIT B attached hereto and made a part hereof for all purposes,
and Assignee desires to accept the Leases and all of Assignors right, title,
interest and obligations in, to and under the Leases, as set forth herein.
NOW, THEREFORE, in consideration of (i) Ten Dollars ($10.00) and
other good and valuable cash consideration and (ii) the mutual covenants and
promises of the parties provided for herein, Assignor and Assignee agree as
follows:
1. Assignment. Assignor hereby assigns all of its right, title and
interest in, to and under the Leases and any security deposits paid pursuant
thereto as set forth on EXHIBIT B to Assignee.
2. Assumption. Assignee hereby accepts said assignment and assumes all of
the obligations of Assignor under the Leases from and after the date hereof.
<PAGE>
IN WITNESS WHEREOF, the undersigned parties have executed this Assignment
effective as of the 17th day of November, 1998.
ASSIGNOR:
CHICAGO COLONY SQUARE ASSOCIATES
By: PaineWebber Income Properties
Seven Limited Partnership,
general partner
By: Seventh Income
Properties Fund, Inc.,
its managing general
partner
By: /s/ Rock M. D'Errico
---------------------
Name: Rock M. D'Errico
Title: Vice President
By: Chicago Colony Square
Company, Limited Partnership,
general partner
By: /s/ Lewis A. Levey
------------------
Name: Lewis A. Levey
Title: President
ASSIGNEE:
HANJO, L.L.C.
By: /s/ Keiko Iseda
---------------
Name: Keiko Iseda
Title: President
<PAGE>
Assignment and Assumption of Contracts and Intangibles
This Assignment and Assumption of Contracts and Intangibles (this
Assignment) is made and entered into as of this 17th day of November, 1998, by
and between Chicago Colony Square Associates, an Illinois general partnership,
(Assignor), and HANJO, L.L.C., an Illinois limited liability company (Assignee).
WITNESSETH:
Assignor hereby assigns, sells, transfers, sets over and delivers unto
Assignee all of Assignors estate, right, title and interest in and to the
following:
1. all licenses, permits, certificates of occupancy, approvals,
entitlement, dedications, and subdivision maps issued, approved or granted by
any governmental authorities or otherwise in connection with the real property
known as Colony Square Shopping Center (Property) described in Exhibit A
attached hereto; the use of the name Colony Square Shopping Center and any other
trade names, trademarks, and logos used by Assignor in the operation and
identification of the Property; all development rights and other intangible
rights, titles, interests, privileges and appurtenances of Assignor related to
or used in connection with the Property and its operation; and all licenses,
consents, easements, rights of way and approvals issued, approved or granted by
any private parties to make use of utilities and to insure vehicular and
pedestrian ingress and egress to the Property (collectively, Licenses and
Permits);
2. all plans and specifications respecting any buildings or improvements
located on the Property; and all building inspection reports pertaining to the
Property which are owned by and within the possession or control of Assignor
(collectively, Records and Plans);
3. all warranties and guaranties in effect with respect to the Property
and all contracts for services and all operating agreements currently in effect
with respect to the Property (the Contracts); and
4. the interest of Assignor in all other intangible personalty relating to
the use and operation of the Property including good will if any (the
Intangibles).
Assignor makes no warranties of any kind or nature, express or implied,
regarding the Licenses and Permits, Records and Plans and Contracts and
Intangibles.
Assignee hereby assumes the performance of all of the terms, convents and
conditions imposed upon Assignor under the Licenses and Permits, Records and
Plans and Contracts arising on or after the date of delivery of this Assignment.
Assignor shall be responsible for the performance of all of the terms, covenants
and conditions imposed upon Assignor under the Licenses and Permits, Records and
Plans and Contracts arising prior to the date of delivery of this Assignment.
This Assignment may be executed in one or more counterparts, each of which
shall be deemed an original, and all of such counterparts, taken together, shall
constitute one and the same instrument.
The terms and provisions of this Assignment shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.
<PAGE>
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment as
of the date first written above.
ASSIGNOR:
CHICAGO COLONY SQUARE ASSOCIATES
By: PaineWebber Income Properties
Seven Limited Partnership,
general partner
By: Seventh Income
Properties Fund, Inc.,
its managing general
partner
By: /s/ Rock M. D'Errico
---------------------
Name: Rock M. D'Errico
Title: Vice President
By: Chicago Colony Square
Company, Ltd., general partner
By: /s/ Lewis A. Levey
------------------
Name: Lewis A. Levey
Title: President
ASSIGNEE:
HANJO, L.L.C.
By: /s/ Keiko Iseda
----------------
Name: Keiko Iseda
Title: President
<PAGE>
Bill of Sale
This Bill of Sale is made as of this 17th day of November, 1998 from
Chicago Colony Square Associates, an Illinois general partnership, having an
office at c/o PaineWebber Properties Incorporated, 265 Franklin Street, Boston,
Massachusetts 02110 (the Seller) to HANJO, L.L.C., an Illinois limited liability
company, having an office at 2330 South Elmhurst Road, Mt. Prospect, Illinois
60056 (the Purchaser).
WHEREAS, in connection with the conveyance of the real property commonly
known as Colony Square Shopping Center, Mount Prospect, Illinois, (the Real
Property), Seller is obligated to convey, transfer, set over and assign to
Purchaser all of the Sellers right, title and interest, if any, in and to all
personal property owned by Seller located at the Real Property, including all
furniture, carpeting, appliances, equipment, machinery, inventories, supplies,
signs and other tangible personal property of every kind and nature, if any,
owned by Seller and installed, located at and used in connection with the
ownership, occupation and operation of the Real Property, including, without
limitation, the personal property listed on Schedule A attached hereto, but
specifically excluding (i) any items of personal property owned by tenants at or
on the Real Property, and (ii) any items of personal property owned by third
parties and leased to Seller (collectively Personal Property).
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Seller does hereby sell, deliver,
transfer, set over and assign unto Purchaser the Personal Property in its as is
condition without express or implied warranty of any kind or nature except as
expressly set forth in the Purchase and Sale Agreement by and between Seller and
Purchaser, to have and to hold the same unto Purchaser and the Purchasers
successors and assigns, forever.
<PAGE>
EXECUTED UNDER SEAL as of the date first written above.
CHICAGO COLONY SQUARE ASSOCIATES
By: PaineWebber Income Properties
Seven Limited Partnership,
general partner
By: Seventh Income
Properties Fund, Inc.,
its managing general
partner
By: /s/ Rock M. D'Errico
--------------------
Name: Rock M. D'Errico
Title: Vice President
By: Chicago Colony Square
Company, Ltd, general partner
By: /s/ Lewis A. Levey
------------------
Name: Lewis A. Levey
Title: President
<PAGE>
Closing Statement
CHICAGO COLONY SQUARE ASSOCIATES (Seller)
sale to
HANJO, L.L.C. (Buyer)
Colony Square Shopping Center
Mount Prospect, Illinois
- --------------------------------------------------------------------------------
Funds Due to Seller
- --------------------------------------------------------------------------------
Purchase Price $2,300,000.00
Deductions
Credit for Property Condition $10,000.00
Credit for Remediation $150,000.00
Deposit & Interest (held by
Title Company) $75,609.48
Rent $22,143.00
Security Deposits $30,732.00
Real Estate Taxes $168,451.97
Total Deductions $456,936.45 ($456,936.45)
Additions
Items Paid in Advance $464.38
Total Additions $464.38 $464.38
Gross Funds Due To Seller $1,843,527.93
=============
Sellers Disbursements
Sellers Closing Costs
(see schedule) $905,594.12
Total Sellers Disbursements $905,594.12 ($905,594.12)
Net Funds Due to Seller $937,933.81
===========
Deposits Plus Interest Released
by Title Co. to Seller $75,609.48
==========
Total Funds Due to Seller $1,013,543.29
=============
<PAGE>
Funds Due from Buyer
Purchase Price $2,300,000.00
Deductions
Credit for Property Condition $10,000.00
Credit for Remediation $150,000.00
Deposit & Interest (held by
Title Company) $75,609.48
Rent $22,143.00
Security Deposits $30,732.00
Real Estate Taxes $168,451.97
Total Deduction $456,936.45 ($456,936.45)
Additions
Items Paid in Advance $464.38
Total Additions $464.38 $464.38
Net Funds Due From Buyer $1,843,527.93
=============
Buyers Disbursements
Buyers Closing Costs $63,073.50
Total Buyers Disbursements $63,073.50 $63,073.50
Total Funds Due From Buyer $1,906,601.43
=============
<PAGE>
Sellers Closing Costs
State Transfer Tax $2,300.00
County Transfer Tax $1,150.00
Recording Charges (to clear title) $100.00
Cost of Standard Owners $1,530.00
Title Policy
One-Half of Escrow and Closing Fees $300.00
Survey (POC)
Environmental Report (POC)
Broker's Fee $23,000.00
UNUM Loan Payoff $877,214.12
Total: $905,594.12
===========
