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
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EXCHANGE ACT OF 1934.
For the quarterly period ended June 30, 1998
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OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
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EXCHANGE ACT OF 1934.
For the transition period from to
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Commission file number 0-15648
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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
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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
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<PAGE>
BALCOR EQUITY PENSION INVESTORS - IV
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
BALANCE SHEETS
June 30, 1998 and December 31, 1997
(Unaudited)
ASSETS
1998 1997
-------------- --------------
Cash and cash equivalents $ 3,267,158 $ 3,032,525
Accounts and accrued interest receivable 169,033 186,505
Deferred expenses, net of accumulated
amortization of $23,749 in 1998 and
$20,955 in 1997 32,135 34,929
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3,468,326 3,253,959
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Investment in real estate:
Land 2,265,275 3,164,353
Buildings and improvements 6,301,213 8,802,135
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8,566,488 11,966,488
Less accumulated depreciation 5,407,860 5,288,524
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Investment in real estate, net of
accumulated depreciation 3,158,628 6,677,964
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$ 6,626,954 $ 9,931,923
============== ==============
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 95,677 $ 37,205
Due to affiliates 45,319 26,497
Accrued real estate taxes 1,001,474 1,007,379
Security deposits 9,883 9,883
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Total liabilities 1,152,353 1,080,964
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Commitments and contingencies
Limited Partners' capital (185,486
Interests issued and outstanding) 5,713,379 8,889,587
General Partner's deficit (238,778) (38,628)
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Total partners' capital 5,474,601 8,850,959
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$ 6,626,954 $ 9,931,923
============== ==============
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 six months ended June 30, 1998 and 1997
(Unaudited)
1998 1997
-------------- --------------
Income:
Rental $ 754,283 $ 1,608,874
Service 488,310 554,116
Interest on short-term investments 77,866 198,327
Settlement income 276,068
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Total income 1,320,459 2,637,385
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Expenses:
Depreciation 119,336 361,076
Property operating 151,465 540,524
Real estate taxes 494,832 591,124
Property management fees 56,753 106,550
Administrative 474,431 225,451
Provision for investment property
writedown 3,400,000
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Total expenses 4,696,817 1,824,725
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(Loss) income before gain on sale of property (3,376,358) 812,660
Gain on sale of property 4,218,099
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Net (loss) income $ (3,376,358) $ 5,030,759
============== ==============
Net (loss) income allocated to General
Partner $ (200,150) $ 156,195
============== ==============
Net (loss) income allocated to Limited
Partners $ (3,176,208) $ 4,874,564
============== ==============
Net (loss) income per Limited Partnership
Interest (185,486 issued and outstanding) -
Basic and Diluted $ (17.12) $ 26.28
============== ==============
Distributions to General Partner None $ 93,274
============== ==============
Distributions to Limited Partners None $ 2,475,453
============== ==============
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 six months ended June 30, 1998 and 1997
(Unaudited)
1998 1997
-------------- --------------
Distributions per Limited Partnership
Interest:
Taxable None $ 13.40
============== ==============
Tax-exempt None $ 13.34
============== ==============
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 June 30, 1998 and 1997
(Unaudited)
1998 1997
-------------- --------------
Income:
Rental $ 380,765 $ 633,683
Service 367,232 398,733
Interest on short-term investments 42,696 147,573
Settlement income 276,068
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Total income 790,693 1,456,057
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Expenses:
Depreciation 59,668 159,064
Property operating 81,642 215,240
Real estate taxes 250,369 277,215
Property management fees 34,831 51,412
Administrative 204,985 164,938
Provision for investment property
writedown 3,400,000
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Total expenses 4,031,495 867,869
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(Loss) income before gain on sale of property (3,240,802) 588,188
Gain on sale of property 4,218,099
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Net (loss) income $ (3,240,802) $ 4,806,287
============== ==============
Net (loss) income allocated to General
Partner $ (64,594) $ 115,441
============== ==============
Net (loss) income allocated to Limited
Partners $ (3,176,208) $ 4,690,846
============== ==============
Net (loss) income per Limited Partnership
Interest (185,486 issued and outstanding) -
Basic and Diluted $ (17.12) $ 25.29
============== ==============
Distribution to General Partner None $ 46,637
============== ==============
Distribution to Limited Partners None $ 419,733
============== ==============
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 June 30, 1998 and 1997
(Unaudited)
1998 1997
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Distribution per Limited Partnership
Interest:
Taxable None $ 2.29
============== ==============
Tax-exempt None $ 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 six months ended June 30, 1998 and 1997
(Unaudited)
1998 1997
-------------- --------------
Operating activities:
Net (loss) income $ (3,376,358) $ 5,030,759
Adjustments to reconcile net (loss) income
to net cash provided by operating
activities:
Gain on sale of property (4,218,099)
Depreciation of properties 119,336 361,076
Amortization of deferred expenses 2,794 2,794
Provision for investment property
writedown 3,400,000
Net change in:
Accounts and accrued interest
receivable 17,472 (113,705)
Prepaid expenses 38,439
Accounts payable 58,472 (14,508)
Due to affiliates 18,822 17,953
Accrued real estate taxes (5,905)
Security deposits (53,001)
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Net cash provided by operating activities 234,633 1,051,708
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Investing activities:
Proceeds from sale of property 13,300,000
Payment of selling costs (525,090)
Distribution from joint
venture - affiliates 76,101
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Net cash provided by investing activities 12,851,011
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Financing activities:
Distributions to Limited Partners (2,475,453)
Distributions to General Partner (93,274)
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Cash used in financing activities (2,568,727)
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Net change in cash and cash equivalents 234,633 11,333,992
Cash and cash equivalents at beginning
of period 3,032,525 5,184,704
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Cash and cash equivalents at end of period $ 3,267,158 $ 16,518,696
============== ==============
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 Policies:
(a) For financial statement purposes, the capital accounts of the General
Partner and the Limited Partners have been adjusted to appropriately reflect
their remaining economic interests as provided for in the Partnership
Agreement.
(b) In the opinion of management, all adjustments necessary for a fair
presentation have been made to the accompanying statements for the six months
and quarter ended June 30, 1998, 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. The Partnership sold one property during 1997 and has entered
into a contract to sell its remaining property, the Evanston Plaza Shopping
Center. The Partnership has retained a portion of the cash from the property
sales to satisfy obligations of the Partnership as well as to establish a
reserve for contingencies. The timing of the termination of the Partnership and
final distribution of cash will depend upon the timing of the sale of the
Evanston Plaza Shopping Center and the nature and extent of liabilities and
contingencies which exist or may arise. Such contingencies may include legal
and other fees and costs stemming from litigation involving the Partnership
including, but not limited to, the lawsuit discussed in Note 5 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 continues to exist or arises, reserves may be held by the
Partnership for a longer period of time.
3. Provision for Investment Property Writedown:
During the quarter ended June 30, 1998, the General Partner determined that an
impairment of the asset value of the Evanston Plaza Shopping Center located in
Evanston, Illinois, had occurred. As a result, the Partnership recognized a
provision for investment property writedown of $3,400,000, to an amount
representing the Partnership's estimate of the property's sales value, less
estimated closing costs. The decline in value is primarily attributable to the
discussions with the proposed buyer of the property relating to a purchase
price reduction due primarily to estimated expenditures that could be necessary
to correct environmental issues at the property.
<PAGE>
4. Transactions with Affiliates:
Fees and expenses paid and payable by the Partnership to affiliates for the six
months and quarter ended June 30, 1998 are:
Paid
-------------------------
Six Months Quarter Payable
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Reimbursement of expenses to
the General Partner, at cost $ 23,507 $ 9,590 $ 45,319
5. Contingency:
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, which is pending.
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 of
the Partnership. The Partnership believes it has meritorious defenses to
contest the claims.
<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. Prior to 1998, the Partnership sold one
property and the property which collateralized the acquisition loan was
acquired through foreclosure and was subsequently sold. Currently, the
Partnership owns one property, the Evanston Plaza Shopping Center, which is
under a contract for sale.
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 1997 for a more complete understanding of
the Partnership's financial position.
Operations
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Summary of Operations
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During the quarter ended June 30, 1998, the Partnership recognized a provision
related to a decline in the fair value of the Evanston Plaza Shopping Center.
In May 1997, the Partnership sold the Gleneagles Apartments and recognized a
gain in connection with its sale. As a result of these events, the Partnership
recognized a net loss during the six months and quarter ended June 30, 1998 as
compared to net income during the same periods in 1997. Further discussion of
the Partnership's operations is summarized below.
1998 Compared to 1997
- ---------------------
Unless otherwise noted, discussions of fluctuations between 1998 and 1997 refer
to both the six months and quarters ended June 30, 1998 and 1997.
The Partnership sold the Gleneagles Apartments in May 1997 and recognized a
gain of $4,218,099 in connection with the sale for financial statement
purposes. As a result, rental income, depreciation, property operating
expense, real estate taxes and property management fees decreased during 1998
as compared to 1997.
As a result of lower real estate tax reimbursements from tenants at the
Evanston Plaza Shopping Center primarily due to lower occupancy levels, service
income decreased during 1998 as compared to 1997.
<PAGE>
Higher average cash balances were available for investment in 1997 primarily
due to the proceeds received in connection with the May 1997 sale of the
Gleneagles Apartments prior to distribution to Limited Partners in July 1997.
This resulted in a decrease in interest income on short-term investments during
1998 as compared to 1997.
In April 1997, the Partnership entered a settlement agreement with the
manufacturer of the roof at the Evanston Plaza Shopping Center relating to
alleged defects. The Partnership received $276,068 in satisfaction of its
claims. The amount received was recognized by the Partnership as settlement
income for financial statement purposes.
In addition to the decrease in depreciation expense due to the sale of the
Gleneagles Apartments, depreciation expense also decreased during 1998 due to a
writedown of the basis of the Evanston Plaza Shopping Center as a result of a
decline in the fair value of the property.
Primarily as a result of legal and environmental consulting expenses incurred
during 1998 related to environmental issues at the Evanston Plaza Shopping
Center, administrative expenses increased in 1998 as compared to 1997.
Provisions are charged to income when the General Partner believes an
impairment has occurred to the value of its property. Determinations of fair
value are made periodically on the basis of assessments of property operations
and the property's estimated sales price less closing costs. Determinations of
fair value represent estimations based on many variables which affect the value
of real estate, including economic and demographic conditions. During the
quarter ended June 30, 1998, the Partnership recognized a provision for
investment property writedown of $3,400,000 to provide for a change in the
estimate of the fair value of the Evanston Plaza Shopping Center. The decline
in value is primarily attributable to the discussions with the proposed buyer
of the property relating to a purchase price reduction due primarily to
estimated expenditures that could be necessary to correct environmental issues
at the property.
Liquidity and Capital Resources
- -------------------------------
The cash position of the Partnership increased by approximately $235,000 as of
June 30, 1998, when compared to December 31, 1997 due to cash flow provided by
operating activities. These activities consisted of the cash flow generated by
operations at the Evanston Plaza Shopping Center and interest income earned on
short-term investments, which were partially offset by payment of
administrative expenses, including legal and environmental consulting expenses
related to environmental issues at Evanston Plaza Shopping Center.
The Partnership defines cash flow generated from the operations of its
properties as an amount equal to the property's revenue receipts less property
related expenditures. The Gleneagles Apartments generated positive cash flow
prior to its sale in May 1997. During 1998 and 1997, the Evanston Plaza
Shopping Center generated positive cash flow. As of June 30, 1998, the
Evanston Plaza Shopping Center had an occupancy rate of 78%.
<PAGE>
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. The Partnership sold one property during 1997 and has entered into
a contract to sell its remaining property, the Evanston Plaza Shopping Center.
The current sale price is $7,200,000, although the sale price is being
re-evaluated in light of environmental issues concerning the property. See
"Item 5. Other Information" for additional information. The Partnership has
retained a portion of the cash from the property sales to satisfy obligations
of the Partnership as well as to establish a reserve for contingencies. The
timing of the termination of the Partnership and final distribution of cash
will depend upon the timing of the sale of the Evanston Plaza Shopping Center
and the nature and extent of liabilities and contingencies which exist or may
arise. Such contingencies may include legal and other fees and costs stemming
from litigation involving the Partnership including, but not limited to, the
lawsuit discussed in Note 5 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 continues to exist or
arises, reserves may be held by the Partnership for a longer period of time.
To date, Limited Partners have received cumulative distributions of $179.28 per
$250 Taxable Interest, of which $97.71 represents Cash Flow from operations and
$81.57 represents a return of Original Capital, and $177.10 per $250 Tax-exempt
Interest, of which $95.53 represents Cash Flow from operations and $81.57
represents a return of Original Capital. Since only one property remains,
future quarterly distributions from Cash Flow are unlikely to be made. A future
distribution is expected to be made from the proceeds from the pending sale of
the Evanston Plaza Shopping Center and available Cash Flow reserves. Amounts
allocated to the Repurchase Fund will be distributed at the termination of the
Partnership. In light of results to date, Limited Partners will not recover
all of their original investment.
In February 1997, the Partnership discontinued the repurchase of Interests from
Limited Partners. As of June 30, 1998, there were 3,192 Interests and cash of
$320,854 in the Repurchase Fund.
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
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As previously reported, on December 8, 1997, the Partnership contracted to sell
the Evanston Plaza Shopping Center, Evanston, Illinois, to an unaffiliated
party, Joseph Freed Holdings, L.L.C., an Illinois limited liability company,
for a sale price of $7,200,000. The Partnership and the proposed buyer have
had discussions relating to a possible purchase price reduction due primarily
to estimated expenditures that could be necessary to correct environmental
issues at the property. The Partnership filed a remediation plan with the
Illinois Environmental Protection Agency (IEPA) on June 15, 1998. The closing
of the sale is scheduled to occur 30 days after the satisfaction of certain
conditions described in the agreement of sale, all of which have not been
satisfied as of this date. The date by which the conditions must be satisfied
has been extended from May 29, 1998 through August 28, 1998. Additionally, a
public hearing will also be held at the property, currently expected for
September 1998, to discuss the remediation.
Item 6. Exhibits and Reports on Form 8-K
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(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.
(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.
(ii) Amendment to Agreement of Sale and Escrow Agreement dated November 10,
1996, relating to the sale of Gleneagles Apartments, Dade County, Florida, as
previously filed as Exhibit (10)(a)(ii) to the Registrant's Report on Form 10-K
for the year ended December 31, 1996 is incorporated herein by reference.
(iii) Second Amendment to Agreement of Sale and Escrow Agreement dated January
3, 1997, relating to the sale of Gleneagles Apartments, Dade County, Florida,
as previously filed as Exhibit (10)(a)(iii) to the Registrant's Report on Form
10-K for the year ended December 31, 1996 is incorporated herein by reference.
<PAGE>
(iv) Third Amendment to Agreement of Sale and Escrow Agreement dated January
15, 1997, relating to the sale of Gleneagles Apartments, Dade County, Florida,
as previously filed as Exhibit (10)(a)(iv) to the Registrant's Report on Form
10-K for the year ended December 31, 1996 is incorporated herein by reference.
(v) Fourth Amendment to Agreement of Sale dated January 31, 1997, relating to
the sale of Gleneagles Apartments, Dade County, Florida, as previously filed as
Exhibit (10)(a)(v) to the Registrant's Report on Form 10-K for the year ended
December 31, 1996 is incorporated herein by reference.
(vi) Letter Agreement dated February 25, 1997, relating to the sale of the
Gleneagles Apartments, Dade County, Florida, as previously filed as
Exhibit(10)(vi) to the Registrant's Report on Form 10-K for the year ended
December 31, 1996 is incorporated herein by reference.
(vii) Letter dated March 14, 1997, relating to the cancellation of the
Agreement of Sale of the Gleneagles Apartments, Dade County, Florida, as
previously filed as Exhibit (10)(a)(vii) to the Registrant's Report on Form
10-K for the year ended December 31, 1996 is incorporated herein by reference.
(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, previously filed as Exhibit (10)(a)(viii) to the
Registrant's Report on Form 10-Q for the quarter ended March 31, 1997 is
incorporated herein by reference.
(b)(i) Agreement of Sale and attachment thereto relating to the sale of
Evanston Plaza Shopping Center, Evanston, Illinois, previously filed as Exhibit
(2) to the Registrant's Current Report on Form 8-K dated December 8, 1997 is
incorporated herein by reference.
(ii) Extension letter dated February 24, 1998 relating to the sale of Evanston
Plaza Shopping Center, Evanston, Illinois, previously filed as Exhibit
(10)(b)(ii) to the Registrant's Report on Form 10-K for the year ended December
31, 1997 is incorporated herein by reference.
(iii) Extension letter dated March 24, 1998 relating to the sale of Evanston
Plaza Shopping Center, Evanston, Illinois, previously filed as Exhibit
(10)(b)(iii) to the Registrant's Report on Form 10-K for the year ended
December 31, 1997 is incorporated herein by reference.
(iv) First Amendment to Agreement of Sale dated May 25, 1998 relating to the
sale of the Evanston Plaza Shopping Center, Evanston, Illinois, is attached
hereto.
(v) Second Amendment to Agreement of Sale dated July 21, 1998 relating to the
sale of the Evanston Plaza Shopping Center, Evanston, Illinois, is attached
hereto.
(27) Financial Data Schedule of the Registrant for the six months ending June
30, 1998 is attached hereto.
(b) Reports on Form 8-K: No Reports on Form 8-K were filed during the quarter
ended June 30, 1998.
<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
Senior Managing Director and Chief Financial
Officer (Principal Accounting Officer) of
Balcor Equity Partners - IV, the General
Partner
Date: August 14, 1998
-----------------
<PAGE>
FIRST AMENDMENT TO AGREEMENT OF SALE
THIS FIRST AMENDMENT TO AGREEMENT OF SALE (this "Amendment") is made as of
the 28th day of May, 1998 by and between JOSEPH FREED HOLDINGS, L.L.C., an
Illinois limited liability company ("Purchaser"), 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 ("Trustee") and
EVANSTON PLAZA INVESTORS A REAL ESTATE LIMITED PARTNERSHIP, an Illinois limited
partnership ("Beneficiary") (Trustee and Beneficiary are hereinafter together
referred to as "Seller").
WHEREAS, Seller and Purchaser entered into that certain Agreement of Sale
made as of December 8, 1997 ("Agreement") pursuant to which Purchaser agreed to
purchase and Seller agreed to sell that certain property commonly known as
Evanston Plaza, Evanston, Illinois, legally described on Exhibit A of the
Agreement;
WHEREAS, Seller and Purchaser desire to amend the Agreement to extend the
date for the satisfaction of the conditions precedent as set forth in
Paragraphs 29.1, 29.2, 29.3, 29.4 and 29.5 of the Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
1. Defined Terms. All capitalized terms used herein and not otherwise
defined shall have the meaning ascribed to them in the Agreement.
2. Extension of the Date for Satisfaction of the Conditions Precedent.
Seller and Purchaser hereby acknowledge that Seller has exercised Seller's
right to extend the date for satisfaction of the conditions precedent contained
in Paragraphs 29.1, 29.2, 29.3 and 29.4 for three (3) consecutive thirty (30)
day periods following the last date for satisfaction for each condition
precedent pursuant to Paragraph 29.8. Seller and Purchaser acknowledge that
the date for the satisfaction of the conditions precedent contained in
Paragraphs 29.1, 29.2, 29.3 and 29.4 is May 29, 1998. Seller and Purchaser
hereby agree that notwithstanding anything contained in Paragraph 29 to the
contrary, the date for the satisfaction of any of the conditions precedent
contained in Paragraphs 29.1, 29.2, 29.3 and 29.4 shall be extended for an
additional sixty (60) day period. Seller and Purchaser agree that the date for
satisfaction of the conditions precedent contained in Paragraph 29.1, 29.2,
29.3 and 29.4 shall be July 29, 1998.
3. Extension of Date for Obtaining IEPA's Approval. Seller and
Purchaser hereby acknowledge that Seller has exercised Seller's right to extend
the date for satisfaction of the condition precedent contained in Paragraph
29.5 for one (1) consecutive thirty (30) day period pursuant to Paragraph 29.8.
Seller and Purchaser acknowledge that the date for the satisfaction of the
condition precedent contained in Paragraph 29.5 is May 29, 1998. Seller and
Purchaser hereby agree that notwithstanding anything contained in Paragraph 29
to the contrary, the date for the satisfaction of the condition precedent
contained in Paragraph 29.5 shall be extended until October 31, 1998.
<PAGE>
4. Full Force and Effect and Counterparts. Except as amended hereby,
the Agreement shall be and remain unchanged and in full force and effect in
accordance with its terms. This Amendment may be executed in counterparts,
each of which shall be deemed an original, but all of which, when taken
together shall constitute one and the same instrument. To facilitate the
execution of this Amendment, Seller and Purchaser may execute and exchange by
telephone facsimile counterparts of the signature pages, with each facsimile
being deemed an "original" for all purposes.
[EXECUTION PAGE FOLLOWS]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of
the date first set forth above.
PURCHASER:
JOSEPH FREED HOLDINGS, L.L.C., an
Illinois limited liability company
By:/s/Laurance H. Freed
---------------------
Name: Laurance H. Freed
------------------
Its: Managing Member
------------------
SELLER:
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TRUSTEE:
-------
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
By:/s/Mark Degrazia
-----------------
Name: Mark Degrazia
-----------------
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 Powell
-----------------
Name: John Powell
-----------------
Its: Senior Vice President
----------------------
<PAGE>
SECOND AMENDMENT TO AGREEMENT OF SALE
THIS SECOND AMENDMENT TO AGREEMENT OF SALE (this "Amendment") is made as
of the 24th day of July, 1998 by and between JOSEPH FREED HOLDINGS, L.L.C., an
Illinois limited liability company ("Purchaser"), 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 ("Trustee") and
EVANSTON PLAZA INVESTORS A REAL ESTATE LIMITED PARTNERSHIP, an Illinois limited
partnership ("Beneficiary") (Trustee and Beneficiary are hereinafter together
referred to as "Seller").
WHEREAS, Seller and Purchaser entered into that certain Agreement of Sale
made as of December 8, 1997, as amended by the First Amendment to Agreement of
Sale ("First Amendment," together with the Agreement of Sale, the "Agreement"),
pursuant to which Purchaser agreed to purchase and Seller agreed to sell that
certain property commonly known as Evanston Plaza, Evanston, Illinois, legally
described on Exhibit A of the Agreement;
WHEREAS, Seller and Purchaser desire to amend the Agreement to extend the
date for the satisfaction of the conditions precedent as set forth in
Paragraphs 29.1, 29.2, 29.3 and 29.4 of the Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
1. Defined Terms. All capitalized terms used herein and not otherwise
defined shall have the meaning ascribed to them in the Agreement.
2. Extension of the Date for Satisfaction of the Conditions Precedent.
Seller and Purchaser hereby acknowledge that Seller has exercised Seller's
right to extend the date for satisfaction of the conditions precedent contained
in Paragraphs 29.1, 29.2, 29.3 and 29.4 of the Agreement for three (3)
consecutive thirty (30) day periods following the last date for satisfaction
for each condition precedent pursuant to Paragraph 29.8 of the Agreement.
Seller and Purchaser further acknowledge that pursuant to the First Amendment
the date for the satisfaction of the conditions precedent contained in
Paragraphs 29.1, 29.2, 29.3 and 29.4 of the Agreement is July 29, 1998. Seller
and Purchaser hereby agree that notwithstanding anything contained in the
Agreement to the contrary, the date for the satisfaction of any of the
conditions precedent contained in Paragraphs 29.1, 29.2, 29.3 and 29.4 of the
Agreement shall be extended for an additional thirty (30) day period. Seller
and Purchaser agree that the date for satisfaction of the conditions precedent
contained in Paragraph 29.1, 29.2, 29.3 and 29.4 of the Agreement shall be
August 28, 1998.
3. Full Force and Effect and Counterparts. Except as amended hereby,
the Agreement shall be and remain unchanged and in full force and effect in
accordance with its terms. This Amendment may be executed in counterparts,
each of which shall be deemed an original, but all of which, when taken
<PAGE>
together shall constitute one and the same instrument. To facilitate the
execution of this Amendment, Seller and Purchaser may execute and exchange by
telephone facsimile counterparts of the signature pages, with each facsimile
being deemed an "original" for all purposes.
[EXECUTION PAGE FOLLOWS]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of
the date first set forth above.
PURCHASER:
JOSEPH FREED HOLDINGS, L.L.C., an
Illinois limited liability company
By: /s/Laurance H. Freed
--------------------
Name: Laurance H. Freed
------------------
Its: Managing Member
-------------------
SELLER:
TRUSTEE:
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
By: /s/Mark Degrazia
-----------------
Name: Mark Degrazia
-----------------
Its: Trust Officer
-----------------
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/ Jerry M. Ogle
------------------
Name: Jerry M. Ogle
------------------
Its: Managing Director and Secretary
--------------------------------
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 3267
<SECURITIES> 0
<RECEIVABLES> 169
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3436
<PP&E> 8566
<DEPRECIATION> 5408
<TOTAL-ASSETS> 6627
<CURRENT-LIABILITIES> 1152
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 5475
<TOTAL-LIABILITY-AND-EQUITY> 6627
<SALES> 0
<TOTAL-REVENUES> 1320
<CGS> 0
<TOTAL-COSTS> 703
<OTHER-EXPENSES> 594
<LOSS-PROVISION> 3400000
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3376)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3376)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3376)
<EPS-PRIMARY> (17.12)
<EPS-DILUTED> (17.12)
</TABLE>
