SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- -----
EXCHANGE ACT OF 1934.
For the quarterly period ended March 31, 1997
------------------
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- -----
EXCHANGE ACT OF 1934.
For the transition period from to
------------ ------------
Commission file number 0-15648
-------
BALCOR EQUITY PENSION INVESTORS-IV
A REAL ESTATE LIMITED PARTNERSHIP
-------------------------------------------------------
(Exact name of registrant as specified in its charter)
Illinois 36-3447130
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2355 Waukegan Road
Bannockburn, Illinois 60015
- ---------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (847) 267-1600
--------------
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
<PAGE>
BALCOR EQUITY PENSION INVESTORS - IV
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
BALANCE SHEETS
March 31, 1997 and December 31, 1996
(Unaudited)
ASSETS
1997 1996
------------ ------------
Cash and cash equivalents $ 3,619,820 $ 5,184,704
Accounts and accrued interest receivable 158,964 139,281
Prepaid expenses 13,163 38,439
Deferred expenses, net of accumulated
amortization of $16,764 in 1997 and
$15,367 in 1996 39,120 40,517
------------ ------------
3,831,067 5,402,941
------------ ------------
Investment in real estate:
Land 5,694,341 5,694,341
Buildings and improvements 20,730,600 20,730,600
------------ ------------
26,424,941 26,424,941
Less accumulated depreciation 10,182,050 9,980,038
------------ ------------
Investment in real estate, net of
accumulated depreciation 16,242,891 16,444,903
------------ ------------
Investment in joint venture
with affiliates 76,101 76,101
------------ ------------
$20,150,059 $21,923,945
============ ============
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
Accounts payable $ 18,517 $ 31,703
Due to affiliates 57,376 59,177
Accrued liabilities, principally
real estate taxes 1,111,694 995,568
Security deposits 65,743 62,883
------------ ------------
Total liabilities 1,253,330 1,149,331
------------ ------------
<PAGE>
BALCOR EQUITY PENSION INVESTORS - IV
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
BALANCE SHEETS
March 31, 1997 and December 31, 1996
(Unaudited)
(Continued)
Commitments and contingencies
Limited Partners' capital (185,486
Interests issued and
outstanding) 18,987,032 20,859,034
General Partner's deficit (90,303) (84,420)
------------ ------------
Total partners' capital 18,896,729 20,774,614
------------ ------------
$20,150,059 $21,923,945
============ ============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR EQUITY PENSION INVESTORS - IV
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the quarters ended March 31, 1997 and 1996
(Unaudited)
1997 1996
------------ ------------
Income:
Rental $ 975,191 $ 1,008,520
Service 155,383 154,512
Interest on short-term investments 50,754 42,355
------------ ------------
Total income 1,181,328 1,205,387
------------ ------------
Expenses:
Depreciation 202,012 202,012
Property operating 325,284 276,972
Real estate taxes 313,909 324,237
Property management fees 55,138 56,414
Administrative 60,513 54,070
------------ ------------
Total expenses 956,856 913,705
------------ ------------
Income before participation in
income of joint venture with affiliates 224,472 291,682
Participation in income of joint
venture with affiliates 12,390
------------ ------------
Net income $ 224,472 $ 304,072
============ ============
Net income allocated to General Partner $ 40,754 $ 48,714
============ ============
Net income allocated to Limited Partners $ 183,718 $ 255,358
============ ============
Net income per Limited Partnership Interest
(185,486 issued and outstanding) $ 0.99 $ 1.38
============ ============
Distribution to General Partner $ 46,637 $ 46,637
============ ============
Distribution to Limited Partners $ 2,055,720 $ 419,733
============ ============
Distribution per Limited Partnership
Interest:
Taxable $ 11.11 $ 2.29
============ ============
Tax-exempt $ 11.08 $ 2.26
============ ============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR EQUITY PENSION INVESTORS - IV
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
STATEMENTS OF CASH FLOWS
for the quarters ended March 31, 1997 and 1996
(Unaudited)
1997 1996
------------ ------------
Operating activities:
Net income $ 224,472 $ 304,072
Adjustments to reconcile net income
to net cash provided by
operating activities:
Participation in income of
joint venture with affiliates (12,390)
Depreciation of properties 202,012 202,012
Amortization of deferred expenses 1,397 1,397
Net change in:
Accounts and accrued interest
receivable (19,683) (38,782)
Prepaid expenses 25,276 26,948
Accounts payable (13,186) (65,524)
Due to affiliates (1,801) 10,084
Accrued liabilities (183,874) (192,939)
Security deposits 2,860 (2,912)
------------ ------------
Net cash provided by operating activities 237,473 231,966
------------ ------------
Investing activity:
Receipt of earnest money from purchaser 300,000
Distribution from joint
venture - affiliates 61,188
------------ ------------
Cash provided by investing activity 300,000 61,188
------------ ------------
Financing activities:
Distribution to Limited Partners (2,055,720) (419,733)
Distribution to General Partner (46,637) (46,637)
------------ ------------
Cash used in financing activities (2,102,357) (466,370)
------------ ------------
Net change in cash and cash equivalents (1,864,884) (173,216)
Cash and cash equibalents at beginning
of period 5,184,704 3,389,826
------------ ------------
Cash and cash equivalents at end of period $ 3,319,820 $ 3,216,610
============ ============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR EQUITY PENSION INVESTORS-IV
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
1. Accounting Policy:
In the opinion of management, all adjustments necessary for a fair presentation
have been made to the accompanying statements for the quarter ended March 31,
1997, and all such adjustments are of a normal and recurring nature.
2. Partnership Termination:
The Partnership Agreement provides for the dissolution of the Partnership upon
the occurrence of certain events, including the disposition of all interests in
real estate. During 1996, the Partnership sold its minority joint venture
interest in the 45 West 45th Street Office Building. Currently, the Partnership
has entered into contracts to sell the Evanston Plaza Shopping Center and
Gleneagles Apartments. The timing of the termination of the Partnership and
final distribution of cash will depend upon the nature and extent of
liabilities and contingencies which exist or may arise. Such contingencies may
include legal and other fees stemming from litigation involving the Partnership
including, but not limited to, the lawsuits discussed in Note 4 of Notes to the
Financial Statements. In the absence of any contingency, the reserves will be
paid within twelve months of the last property being sold. In the event a
contingency exists, reserves may be held by the Partnership for a longer period
of time.
3. Transactions with Affiliates:
Fees and expenses paid and payable by the Partnership to affiliates during the
quarter ended March 31, 1997 are:
Paid Payable
------------ ---------
Reimbursement of expenses to
the General Partner, at cost $19,314 $57,376
4. Contingencies:
(a) The Partnership is currently involved in a lawsuit whereby the Partnership,
the General Partner and certain third parties have been named as defendants
seeking damages relating to tender offers to purchase interests in the
Partnership and nine affiliated partnerships initiated by the third party
defendants in 1996. The defendants continue to vigorously contest this action.
The action has been dismissed with prejudice and plaintiffs have filed an
appeal. It is not determinable at this time whether or not an unfavorable
decision in this action would have a material adverse impact on the financial
position, operations and liquidity of the Partnership. The Partnership believes
it has meritorious defenses to contest the claims.
<PAGE>
(b) The Partnership is currently involved in a lawsuit whereby the Partnership
and certain affiliates have been named as defendants alleging certain federal
securities law violations with regard to the adequacy and accuracy of
disclosures of information concerning, as well as the marketing efforts related
to, the offering of the Limited Partnership Interests of the Partnership. The
defendants continue to vigorously contest this action. A plaintiff class has
not yet been certified, and no determination of the merits have been made. It
is not determinable at this time whether or not an unfavorable decision in this
action would have a material adverse impact on the financial position,
operations and liquidity of the Partnership. The Partnership believes it has
meritorious defenses to contest the claims.
5. Subsequent Event:
In April 1997, the Partnership paid a distribution of $419,733 ($2.29 per
Taxable Interest and $2.26 per Tax-exempt Interest) to the holders of Limited
Partnership Interests representing the regular quarterly distribution of Cash
Flow for the first quarter of 1997.
<PAGE>
BALCOR EQUITY PENSION INVESTORS-IV
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS
Balcor Equity Pension Investors-IV A Real Estate Limited Partnership (the
"Partnership") is a limited partnership formed in 1986 to make first mortgage
loans and to invest in and operate income-producing real property. The
Partnership raised $46,371,500 through the sale of Limited Partnership
Interests and utilized these proceeds to fund one acquisition loan and acquire
two real property investments. During 1996, the Partnership sold the property
in which it held a minority joint venture interest. Currently, the Partnership
has entered into contracts to sell the Evanston Plaza Shopping Center and
Gleneagles Apartments.
Inasmuch as the management's discussion and analysis below relates primarily to
the time period since the end of the last fiscal year, investors are encouraged
to review the financial statements and the management's discussion and analysis
contained in the annual report for 1996 for a more complete understanding of
the Partnership's financial position.
Operations
- ----------
Summary of Operations
- ---------------------
Primarily due to increased property operating expenses at the Evanston Plaza
Shopping Center, net income decreased during the quarter ended March 31, 1997
as compared to the same period in 1996. Further discussion of the Partnership's
operations is summarized below.
1997 Compared to 1996
- ---------------------
Discussions of fluctuations between 1997 and 1996 refer to the quarters ended
March 31, 1997 and 1996.
Due to higher average cash balances as a result of the proceeds received in
connection with the sale of the 45 West 45th Street Office Building prior to
distribution to Limited Partners, interest income on short-term investments
increased during 1997 as compared to 1996.
Property operating expense increased in 1997 as compared to 1996 primarily due
to an increase in snow removal expenditures at the Evanston Plaza Shopping
Center.
Higher legal fees resulting from class action litigation for the Partnership,
was the primary reason for the increase in administrative expenses in 1997 as
compared to 1996.
<PAGE>
The 45 West 45th Street Office Building, in which the Partnership held a
minority joint venture interest, was sold during November 1996. As a result,
the Partnership did not recognize any participation in income of joint venture
with affiliates during 1997 as compared to 1996.
Liquidity and Capital Resources
- -------------------------------
The cash position of the Partnership decreased by approximately $1,565,000 as
of March 31, 1997 as compared to December 31, 1996 primarily due to the special
distribution made to Limited Partners from the proceeds of the sale of the 45
West 45th Street Office Building in January 1997. Cash flow of approximately
$237,000 was provided by operating activities during 1997 consisting of cash
flow from the operations of properties and interest income on short-term
investments, which was partially offset by the payment of administrative
expenses. Cash from the Partnership's investing activities consisted of
$300,000 representing earnest money received from the purchaser of the
Gleneagles Apartments. See Item 5. Other Information for additional
information. Financing activities consisted of distributions to the Partners of
approximately $2,102,000.
The Partnership classifies the cash flow performance of its properties as
either positive, a marginal deficit, or a significant deficit, each after
consideration of debt service payments unless otherwise indicated. A deficit is
considered significant if it exceeds $250,000 annually or 20% of the property's
rental and service income. The Partnership defines cash flow generated from its
properties as an amount equal to the property's revenue receipts less property
related expenditures. During 1997 and 1996, each of the Gleneagles Apartments
and Evanston Plaza Shopping Center generated positive cash flow. The 45 West
45th Street Office Building, in which the Partnership held a minority joint
venture interest with affiliates, generated positive cash flow prior to its
sale in November 1996. As of March 31, 1997, the Gleneagles Apartments and
Evanston Plaza Shopping Center had occupancy rates of 97% and 85%,
respectively.
Currently, the Partnership has entered into contracts to sell the Evanston
Plaza Shopping Center and Gleneagles Apartments in all cash sales for
$8,100,000 and $13,300,000, respectively. The timing of the termination of the
Partnership and final distribution of cash will depend upon the nature and
extent of liabilities and contingencies which exist or may arise. Such
contingencies may include legal and other fees stemming from litigation
involving the Partnership. In the absence of any contingency, the reserves will
be paid within twelve months of the last property being sold. In the event a
contingency exists, reserves may be held by the Partnership for a longer period
of time.
The 45 West 45th Street Office Building was owned by a joint venture consisting
of the Partnership and three affiliates. During November 1996, the joint
venture sold the property. Pursuant to the terms of the sale, $500,000 of the
sale proceeds was retained by the joint venture until April 1997, at which time
the funds were released in full. The Partnership's share of these proceeds is
$76,101.
<PAGE>
In April 1997, the Partnership paid a distribution of $419,733 ($2.29 per
Taxable Interest and $2.26 per Tax-exempt Interest) to the holders of Limited
Partnership Interests. This distribution represents the regular quarterly
distribution of Cash Flow for the first quarter of 1997 and is consistent with
the amount distributed for the fourth quarter of 1996. Including the April 1997
distribution, Limited Partners have received cumulative distributions of
$104.49 per $250 Taxable Interest, of which $95.42 represents Cash Flow from
operations and $9.07 represents a return of Original Capital, and $102.34 per
$250 Tax-exempt Interest, of which $93.27 represents Cash Flow from operations
and $9.07 represents a return of Original Capital. In April 1997, the
Partnership also paid $34,978 to the General Partner as its distributive share
of the first quarter of 1997 distribution, and made a contribution to the
Repurchase Fund of $11,659. Regular quarterly distributions from Cash Flow may
be terminated after the first quarter 1997 distribution depending on the timing
of the sale of the remaining properties. In light of results to date, the
General Partner does not anticipate that investors will recover all of their
original investment.
In February 1997, the Partnership discontinued the repurchase of Interests from
Limited Partners.
Changing interest rates can impact real estate values in several ways.
Generally, declining interest rates may lower the cost of capital allowing
buyers to pay more for a property whereas rising interest rates may increase
the cost of capital and lower the price of real estate.
Inflation has several types of potentially conflicting impacts on real estate
investments. Short-term inflation can increase real estate operating costs
which may or may not be recovered through increased rents and/or sales prices
depending on general or local economic conditions. In the long-term, inflation
can be expected to increase operating costs and replacement costs and may lead
to increased rental revenues and real estate values.
<PAGE>
BALCOR EQUITY PENSION INVESTORS-IV
(An Illinois Limited Partnership)
PART II - OTHER INFORMATION
Item 5. Other Information
- --------------------------
Evanston Plaza
- --------------
As previously reported, on March 18, 1997, the Partnership contracted to sell
Evanston Plaza, Evanston, Illinois to an unaffiliated party, Crosstown Asset
Corp. I, a Delaware corporation, for a sale price of $8,100,000. On April 7,
1997, the purchaser exercised its option to terminate the agreement.
Subsequently, on April 15, 1997, the Partnership and purchaser reinstated the
agreement of sale and agreed to extend the closing date from April 30, 1997 to
a date no later than May 28, 1997.
Gleneagles Apartments
- ---------------------
As previously reported, on October 24, 1996, the Partnership contracted to sell
the Gleneagles Apartments, Dade County, Florida, to an unaffiliated party,
Ceebraid-Signal Corporation, a Florida corporation ("the "Purchaser"), for a
sale price of $13,675,000. The Purchaser failed to consummate the sale on the
scheduled closing date and the Partnership terminated the contract in March
1997. The $300,000 (the "First Deposit") in earnest money previously deposited
and interest accrued thereon was paid to the Partnership. The Partnership
continued marketing the property for sale. Subsequently, the Purchaser advised
the Partnership that it wanted to renew negotiations to purchase the property.
On April 25, 1997, the agreement was reinstated by the Partnership and the
Purchaser, but at a reduced sale price of $13,300,000. The new closing date is
scheduled for May 12, 1997. The Purchaser has deposited $300,000 (the "Second
Deposit") with the Partnership, which amount is refundable to the Purchaser
only in the event of a default under the terms of the agreement by the
Partnership. If the sale closes on or before May 12, 1997, the Purchaser will
receive credits against the sale price, for the First Deposit and the Second
Deposit, totaling $600,000.
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits:
(4) Form of Subscription Agreement set forth as Exhibit 4.1 to Amendment No. 1
to Registrant's Registration Statement on Form S-11 dated November 28, 1986
(Registration No. 33-7133) and Form of Confirmation regarding Interests in the
Registrant set forth as Exhibit 4.2 to the Registrant's Report on Form 10-Q for
the quarter ended June 30, 1992 (Commission File No. 0-15648) are incorporated
herein by reference.
<PAGE>
(10) Material Contracts:
(a)(i) Agreement of Sale and attachment thereto relating to the sale of the
Gleneagles Apartments located in Dade County, Florida previously filed as
Exhibit 2 to the Registrant's Report on Form 8-K dated October 24, 1996 is
incorporated herein by reference.
(a)(ii) Amendment to Agreement of Sale and Escrow Agreement dated November 10,
1996, relating to the sale of Gleneagles Apartments, Dade County, Florida, is
incorporated herein by reference.
(a)(iii) Second Amendment to Agreement of Sale and Escrow Agreement dated
January 3, 1997, relating to the sale of Gleneagles Apartments, Dade County,
Florida, is incorporated herein by reference.
(a)(iv) Third Amendment to Agreement of Sale and Escrow Agreement dated January
15, 1997, relating to the sale of Gleneagles Apartments, Dade County, Florida,
is incorporated herein by reference.
(a)(v) Fourth Amendment to Agreement of Sale dated January 31, 1997, relating
to the sale of Gleneagles Apartments, Dade County, Florida, is incorporated
herein by reference.
(a)(vi) Letter Agreement dated February 25, 1997, relating to the sale of the
Gleneagles Apartments, Dade County, Florida, is incorporated herein by
reference.
(a)(vii) Letter dated March 14, 1997, relating to the sale of the cancellation
of the Agreement of Sale of the Gleneagles Apartments, Dade County, Florida, is
incorporated herein by reference.
(a)(viii) Reinstatement and Fifth Amendment to Agreement of Sale and Escrow
Agreement dated April 25, 1997, relating to the sale of Gleneagles Apartments,
Dade County, Florida, is attached hereto.
(b)(i) Agreement of Sale and attachment thereto relating to the sale of
Evanston Plaza, Evanston, Illinois, is incorporated herein by reference.
(b)(ii) Letter of termination dated April 7, 1997, relating to the sale of
Evanston Plaza, Evanston, Illinois, is attached hereto.
(b)(iii) Ratification and Amendment of Agreement of Sale dated April 15, 1997,
relating to the sale of Evanston Plaza, Evanston, Illinois, is attached hereto.
(27) Financial Data Schedule of the Registrant for the quarter ending March 31,
1997 is attached hereto.
(b) Reports on Form 8-K: No reports were filed on Form 8-K during the quarter
ended March 31, 1997.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BALCOR EQUITY PENSION INVESTORS-IV
A REAL ESTATE LIMITED PARTNERSHIP
By: /s/ Thomas E. Meador
------------------------------
Thomas E. Meador
President and Chief Executive Officer
(Principal Executive Officer) of Balcor
Equity Partners - IV, the General Partner
By: /s/ Jayne A. Kosik
------------------------------
Jayne A. Kosik
Managing Director and Chief Financial
Officer (Principal Accounting Officer) of
Balcor Equity Partners - IV, the General
Partner
Date: May 9, 1997
-----------------
<PAGE>
REINSTATEMENT AND FIFTH AMENDMENT TO AGREEMENT OF SALE
AND ESCROW AGREEMENT
THIS REINSTATEMENT AND FIFTH AMENDMENT TO AGREEMENT OF SALE AND ESCROW
AGREEMENT (this "Fifth Amendment") is made and entered into as of the 25th day
of April, 1997, between CEEBRAID-SIGNAL CORPORATION, a Florida corporation
("Purchaser"), GLENEAGLES INVESTORS A REAL ESTATE LIMITED PARTNERSHIP, an
Illinois Limited Partnership ("Seller") and PARTNERS TITLE COMPANY, agent for
Chicago Title Insurance Company ("Escrow Agent").
W I T N E S S E T H:
A. Seller and Purchaser are parties to that certain Agreement of Sale
entered into as of October 24, 1996 (as heretofore amended, the "Agreement"),
pursuant to which Seller agreed to sell to Purchaser, and Purchaser agreed to
purchase from Seller, the "Property" (as defined in the Agreement);
B. Seller, Purchaser and Escrow Agent are parties to that certain Escrow
Agreement entered into as of October , 1996 (as heretofore amended, the
"Escrow Agreement");
C. Pursuant to the terms of the Agreement and the Escrow Agreement,
Purchaser terminated its obligations thereunder on or about March 10, 1997.
D. Seller and Purchaser desire to reinstate and amend the Agreement and
the Escrow Agreement in accordance with the terms of this Fifth Amendment.
NOW, THEREFORE, for and in consideration of the premises and mutual
agreements contained herein, the payment of Ten and No/100 Dollars ($10.00) and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Seller and Purchaser hereby agree as follows:
1. All capitalized terms used in this Amendment, to the extent not
otherwise expressly defined herein, shall have the same meanings ascribed to
such terms in the Agreement and the Escrow Agreement.
2. Lines two (2) and three (3) of Paragraph One (1) of the Agreement are
hereby deleted in their entirety and the following is hereby inserted in lieu
thereof: "at the price of Thirteen Million Three Hundred Thousand and No/100
Dollars ($13,300,000.00)("Purchase Price"), that certain real property in Dade
County, Florida, more".
3. Lines one (1) and two (2) of Paragraph 8 of the Agreement are hereby
deleted in their entirety, and the following is hereby inserted in lieu
thereof: "8. CLOSING. The Closing ("Closing") of this transaction shall be on
May 12, 1997 ("Closing Date"), at the office of the Title Insurer, at which
time Seller shall deliver".
4. Line one (1) of Paragraph 2 of the Escrow Agreement is hereby deleted
in its entirety and the following is hereby inserted in lieu thereof: "On May
12, 1997, or at such other date as Seller and Purchaser may, in".
<PAGE>
5. Paragraph 15 of the Agreement is hereby deleted in its entirety and
the following is hereby inserted in lieu thereof:
"15. BROKER. The parties hereto acknowledge that Insignia Mortgage &
Investment Company ("Broker") is the only real estate broker involved in this
transaction. Seller agrees to pay Broker a commission or fee ("Fee") pursuant
to a listing agreement between Seller and Broker. However, this Fee is due and
payable only from the proceeds of the Purchase Price received by Seller.
Purchaser agrees to indemnify, defend and hold harmless the Seller and any
partner, affiliate, parent of Seller, and all shareholders, employees, officers
and directors of Seller or Seller's partner, parent or affiliate (each of the
above is individually referred to as a "Seller Indemnitee") and Broker from all
claims, including attorneys' fees and costs incurred by a Seller Indemnitee as
a result of anyone's claiming by or through Purchaser any fee, commission or
compensation on account of this Agreement, its negotiation or the sale hereby
contemplated. Purchaser does now and shall at all times consent to a Seller
Indemnitee's and Broker's selection of defense counsel. Seller agrees to
indemnify, defend and hold harmless the Purchaser and all shareholders,
employees, officers and directors of Purchaser or Purchaser's parent or
affiliate (each of the above is individually referred to as a "Purchaser
Indemnitee") from all claims, including attorneys' fees and costs incurred by a
Purchaser Indemnitee as a result of anyone's claiming by or through Seller any
fee, commission or compensation on account of this Agreement, its negotiation
or the sale hereby contemplated. Seller does now and shall at all times
consent to a Purchaser Indemnitee's selection of defense counsel." Seller
shall be responsible for any fees or commission due to CB Commercial.
6. Simultaneously with the execution of this Fifth Amendment, Purchaser
shall pay Three Hundred Thousand and No/100 Dollars ($300,000.00) (the "Third
Deposit") to Seller, which amount shall be non-refundable to Purchaser in all
events. In the event that the transaction contemplated by the Agreement (as
hereby amended) closes on the Closing Date, the amount of the Third Deposit
shall be credited against the Purchase Price at Closing unless seller is in
default under the Agreement.
7. In the event that the transaction contemplated by the Agreement (as
amended hereby) closes on or before the Closing Date, Purchaser shall also
receive a credit at Closing in the amount of Three Hundred Thousand and No/100
Dollars ($300,000.00) which sum represents prior earnest money deposits
previously delivered by Escrow Agent to Seller pursuant to the terms of the
Agreement and the Escrow Agreement. In the event that the transaction
contemplated hereby does not close on or before the Closing Date, said deposit
shall remain non-refundable and Purchaser shall not be entitled to a return of
said money.
8. Purchaser acknowledges that it has completed its due diligence review
of the Property and that Purchaser's and Seller's execution of this Fifth
Amendment provides no due diligence termination rights to Purchaser.
9. Except as amended herein, the terms and conditions of the Agreement
and the Escrow Agreement shall continue in full force and effect and are hereby
ratified in their entirety.
10. This Amendment may be executed in multiple counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same agreement.
<PAGE>
11. Notwithstanding both Seller's and Purchaser's execution of this Fifth
Amendment, Purchaser hereby acknowledges that this Fifth Amendment shall not be
enforceable against Seller until Seller has received the Third Deposit from
Purchaser.
12. The parties hereto agree and acknowledge that a facsimile copy of any
party's signature on this Amendment shall be enforceable against such party as
an original.
13. If requested by Purchaser, Seller agrees that title to the property
shall at closing be conveyed by Seller to Ceebraid-Signal Portfolio I L.P., or
its successors.
Executed as of the date first written above.
PURCHASER:
CEEBRAID-SIGNAL CORPORATION, a Florida
corporation
By: /s/ Richard Schlesinger
------------------------------
Name: Richard Schlesinger
------------------------------
Its: Managing Director
------------------------------
SELLER:
GLENEAGLES INVESTORS A REAL ESTATE LIMITED
PARTNERSHIP, an Illinois limited partnership
By: Balcor Equity Partners-IV, an Illinois
general partnership, its general partner
By: The Balcor Company, a Delaware
corporation, a general partner
By: /s/ James E. Mendelson
-----------------------------
Name: James E. Mendelson
-----------------------------
Its: Senior Vice President
-----------------------------
ESCROW AGENT:
PARTNERS TITLE COMPANY, agent for
Chicago Title Insurance
By:
-----------------------------
Name:
-----------------------------
Its:
-----------------------------
<PAGE>
April 7, 1997
American National Bank and Trust
Company of Chicago, not personally
but as Trustee under Trust Agreement
dated April 24, 1987 and known
as Trust No. 102332-03
and
Evanston Plaza Investors A Real Estate Limited
Partnership ("Seller")
c/o The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A-200
Bannockburn, Illinois 60015
Attention: Ilona Adams
Near North National Title Corporation ("Escrow Agent")
222 North LaSalle Street
First Floor
Chicago, Illinois 60601
Attention: Lou Cohen
Re: Purchase Agreement dated March 18, 1997 (the "Purchase Agreement")
between Seller and Crosstown Asset Corp. I ("Purchaser") for Evanston
Plaza, Evanston, Illinois
Ladies and Gentlemen:
Purchaser hereby terminates the Purchase Agreement pursuant to Section 7.1
thereof. Attached is the required Due Diligence Termination Notice. Escrow
Agent is hereby directed to return the earnest money together with all interest
accrued thereon to Purchaser in accordance with the attached wiring
instructions.
Sincerely,
CROSSTOWN ASSET CORP. I, a Delaware corporation
By: /s/ Timothy Scott Clark
------------------------------------
Name: Timothy Scott Clark
------------------------------------
Its: Asst. Vice President
------------------------------------
<PAGE>
cc: The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A-200
Bannockburn, Illinois 60015
Attention: James Mendelson
Katten Muchin & Zavis
525 West Monroe Street
Suite 1600
Chicago, Illinois 60661-3693
Attention: Daniel J. Perlman, Esq.
DUE DILIGENCE TERMINATION NOTICE
April 7, 1997
Crosstown Asset Corp.I, a Delaware corporation, as Purchaser under that
certain Agreement of Sale dated March 18, 1997, providing for the sale of
property located in Evanston, Illinois and known as Evanston Plaza has
terminated the Agreement of Sale pursuant to Paragraph 7.1 thereof.
The undersigned demands return of all earnest money deposited under the
Agreement of Sale pursuant to its right therein.
CROSSTOWN ASSET CORP. I, a Delaware
corporation
By: /s/ Timothy Scott Clark
-----------------------------------
Name: Timothy Scott Clark
-----------------------------------
Its: Asst. Vice President
-----------------------------------
<PAGE>
RATIFICATION AND AMENDMENT OF AGREEMENT OF SALE
THIS RATIFICATION AND AMENDMENT OF AGREEMENT OF SALE (this "Amendment") is
entered into as of the 15th day of April, 1997, by and between CROSSTOWN ASSET
CORP. I, a Delaware corporation ("Purchaser"), and AMERICAN NATIONAL BANK AND
TRUST COMPANY OF CHICAGO, not personally but as Trustee under Trust Agreement
dated April 24, 1987 and known as Trust Number 102332-03 ("Trust") and EVANSTON
PLAZA INVESTORS A REAL ESTATE LIMITED PARTNERSHIP, an Illinois limited
partnership ("Beneficiary") (Trust and Beneficiary are hereinafter together
referred to as "Seller").
RECITALS
A. Purchaser and Seller entered into that certain Agreement of Sale
dated March 18, 1997 (the "Agreement") pursuant to which Purchaser agreed to
purchase and Seller agreed to sell the property commonly known as Evanston
Plaza, Evanston, Illinois and more particularly described in the Agreement (as
defined in the Agreement, the "Property").
B. Purchaser subsequently terminated the Agreement by providing Seller
with the notice required under the Agreement.
C. Purchaser now desires to purchase and Seller now desires to sell the
Property on the same terms and conditions set forth in the Agreement, except as
amended by this Amendment.
NOW THEREFORE, Purchaser and Seller hereby agree as follows:
1. Ratification of Agreement. Purchaser agrees to purchase and Seller
agrees to sell the Property on the terms and conditions set forth in the
Agreement, except as expressly modified by this Amendment. Purchaser hereby
directs Escrow Agent to hold the Earnest Money (as defined in Section 2.1 of
the Agreement) in accordance with the provisions of the Escrow Agreement (as
defined in Section 2.1 of the Agreement).
2. Inspection Period. The Inspection Period (as defined and described
in Section 7.1 of the Agreement) is hereby extended and will end at 5:00 p.m.
Chicago time on the later of (i) May 14, 1997 or (ii) three business days after
Purchaser receives the written results of the Phase II Testing (as defined in
Paragraph 4) but in any event no later than May 28, 1997.
3. Closing Date. The Closing Date (as defined in Section 8 of the
Agreement) is hereby changed to a date that is 30 days after the last day of
the Inspection Period, as extended by this Amendment, provided, however, that
if such date is not a business day, then the Closing Date shall be the next
business day.
4. Environmental Testing. Purchaser has requested that additional
Phase II environmental testing (the "Phase II Testing") of the Property be
done. Purchaser and Seller agree to jointly review the proposal from the
environmental consultant selected by Purchaser and reasonably acceptable to
Seller to determine the scope and cost of the Phase II Testing. As soon as
reasonably practical following Purchaser's and Seller's approval of the scope
<PAGE>
and cost of the Phase II Testing, Purchaser shall engage the environmental
consultant to perform the approved Phase II Testing. If Purchaser does not
purchase the Property pursuant to the Agreement, Seller agrees to pay the cost
of the approved Phase II Testing (or reimburse Purchaser, within two business
days following a termination of the Agreement, in the event Purchaser has
already paid such costs). Any changes to the scope or cost of the Phase II
Testing must be approved by both Purchaser and Seller in writing. Upon
completion of the Phase II Testing, both Purchaser and Seller shall be provided
with copies of any report or data issued by the environmental consultant.
5. Agreement in Full Force and Effect. Except as set forth in this
Amendment, the terms, covenants, conditions and agreements of the Agreement
shall remain unmodified and otherwise in full force and effect. In the event
of any inconsistency between the terms of the Agreement and terms of this
Amendment, the terms of this Amendment shall control. The term, "Agreement"
shall now mean the Agreement as modified by this Amendment.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and delivered as of the date first set forth above.
PURCHASER:
CROSSTOWN ASSET CORP.I, a Delaware
corporation
By: /s/ Jeffrey A. Parker
---------------------------------
Name: Jeffrey A. Parker
---------------------------------
Its: Vice President
---------------------------------
SELLER:
TRUST:
AMERICAN NATIONAL BANK AND TRUST
COMPANY OF CHICAGO, not personally, but
as Trustee under the Trust Agreement dated
April 24, 1987, and known as Trust No. 102332-03
By: /s/ Anita Lutkus
-------------------------------------
Name: Anita Lutkus
-------------------------------------
Its: Trust Officer
-------------------------------------
<PAGE>
BENEFICIARY:
EVANSTON PLAZA INVESTORS A REAL ESTATE
LIMITED PARTNERSHIP, an Illinois limited
partnership
By: Balcor Equity Partners-IV, an Illinois
general partnership, its general partner
By: The Balcor Company, a Delaware
corporation, its general partner
By: /s/ John K. Powell
-------------------------------
Name: John K. Powell, Jr.
-------------------------------
Its: Senior Vice President
-------------------------------
This instrument is executed by the undersigned Land Trustee
not personally but solely as Trustee in the exercise of the power and
authority conferred upon and vested in it as such Trustee. It is
expressly understood and agreed that all the warranties, indemnities,
representations, covenants, undertakings and agreements herein made on
the part of the Trustee are undertaken by it solely in its capacity as Trustee
and not personally. No personal liability or personal responsbility is
assumed by or shall at any time be asserted or enforceable against the
Trustee on account of any warranty, indemnity, representation, covenant,
undertaking or agreement of the Trustee in this instrument.
<PAGE>
JOINDER
The undersigned executes this joinder solely for the purposes of
effectuating its obligations arising under Paragraph 28 of the Agreement.
THE BALCOR COMPANY, a Delaware corporation
By: /s/ John K. Powell, Jr.
-------------------------------
Name: John K. Powell, Jr.
-------------------------------
Its: Senior Vice President
-------------------------------
ACKNOWLEDGMENT BY ESCROW AGENT
Escrow Agent hereby acknowledges that Escrow Agent is holding the Earnest
Money (as defined in Section 2.1 of the Agreement) pursuant to the terms of the
Escrow Agreement(as defined in the Section 2.1 of the Agreement).
ESCROW AGENT:
NEAR NORTH NATIONAL TITLE CORPORATION,
as agent for First American Title
Insurance Company
By: /s/ Mike Bench
------------------------------------
Its: Authorized Representative
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 3620
<SECURITIES> 0
<RECEIVABLES> 159
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3792
<PP&E> 26425
<DEPRECIATION> 10182
<TOTAL-ASSETS> 20150
<CURRENT-LIABILITIES> 1253
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 18897
<TOTAL-LIABILITY-AND-EQUITY> 20150
<SALES> 0
<TOTAL-REVENUES> 1181
<CGS> 0
<TOTAL-COSTS> 694
<OTHER-EXPENSES> 263
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 224
<INCOME-TAX> 0
<INCOME-CONTINUING> 224
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 224
<EPS-PRIMARY> 0.99
<EPS-DILUTED> 0.99
</TABLE>
