SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported) August 28, 1998
BALCOR EQUITY PENSION INVESTORS-IV
A REAL ESTATE LIMITED PARTNERSHIP
------------------------------------------------------------
Exact Name of Registrant
Illinois 0-15648
- ---------------------------- ----------------------
State or other jurisdiction Commission file number
2355 Waukegan Road
Suite A200
Bannockburn, Illinois 36-3447130
- ---------------------------- ----------------------
Address of principal I.R.S. Employer
executive offices Identification
Number
60015
- ----------------------------
Zip Code
Registrant's telephone number, including area code:
(847) 267-1600
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
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Evanston Plaza
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. On August 28, 1998, the Partnership and the
purchaser extended the date by which certain conditions to closing must be
met to September 25, 1998. On September 10, 1998, the Partnership and
purchaser agreed to reduce the sale price to $3,500,000, principally as a
result of environmental issues at the property.
The closing continues to be subject to the satisfaction of certain terms and
conditions. There can be no assurance that all of the terms and conditions
will be complied with and, therefore, it is possible the sale of the property
may not occur.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
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(A) FINANCIAL STATEMENTS AND EXHIBITS:
None
(B) PRO FORMA FINANCIAL INFORMATION:
None
(C) EXHIBITS:
(2) (a) Third Amendment to Agreement of Sale relating to the
sale of Evanston Plaza, Evanston, Illinois.
(2) (b) Fourth Amendment to Agreement of Sale relating to the
sale of Evanston Plaza, Evanston, Illinois.
(2) (c) Environmental Remediation Agreement relating to the sale of
Evanston Plaza, Evanston, Illinois.
No information is required under Items 1, 3, 4, 5, 6 and 8 and these
items have, therefore, been omitted.
Signature
- -------------
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 hereunto duly authorized.
BALCOR EQUITY PENSION INVESTORS-IV
A REAL ESTATE LIMITED PARTNERSHIP
By: Balcor Equity Partners-IV, an Illinois
general partnership, its general
partner
By: The Balcor Company,
a Delaware corporation,
a partner
By: /s/ Jerry M. Ogle
-----------------------------------------
Jerry M. Ogle, Senior Managing Director
and General Counsel
Dated: September 21, 1998
<PAGE>
THIRD AMENDMENT TO AGREEMENT OF SALE
------------------------------------
THIS THIRD AMENDMENT TO AGREEMENT OF SALE (this "Amendment") is made as of
the 28 day of August, 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 ("Original Agreement"), as amended by the First
Amendment to Agreement of Sale ("First Amendment") and the Second Amendment to
Agreement of Sale dated July 24, 1998 ("Second Amendment" together with the
Original Agreement and the First Amendment, 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 acknowledge that Seller has exercised its rights pursuant
to Paragraph 29.8 of the Agreement. Seller and Purchaser further acknowledge
that pursuant to the Second 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 August 28, 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
twenty-eight (28) 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 September 25, 1998.
<PAGE>
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
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:
-----------------------------
Name:
-----------------------------
Its:
-----------------------------
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:
------------------------------
Name:
------------------------------
Its:
------------------------------
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:
--------------------------------
Name:
--------------------------------
Its:
--------------------------------
<PAGE>
FOURTH AMENDMENT TO AGREEMENT OF SALE
-------------------------------------
THIS FOURTH AMENDMENT TO AGREEMENT OF SALE (this "Amendment") is made as
of the 10 day of September, 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
("Original Agreement") made as of December 8, 1997, as amended by the First
Amendment to Agreement of Sale dated May 28, 1998 ("First Amendment"), the
Second Amendment to Agreement of Sale dated July 24, 1998 ("Second Amendment")
and the Third Amendment to Agreement of Sale dated August 27, 1998 ("Third
Amendment" together with the Original Agreement, the First Amendment and the
Second Amendment, 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 provide
that the Purchase Price shall be reduced to Three Million Five Hundred Thousand
and No/100 Dollars ($3,500,000.00) at Closing;
WHEREAS, Seller and Purchaser desire to amend the Agreement to establish
conditions precedent to and to set a Closing Date;
WHEREAS, Seller and Purchaser desire to amend the Agreement to acknowledge
the satisfaction and/or waiver of certain conditions precedent to Closing;
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. Purchase Price. Paragraph 1 of the Agreement of Sale is hereby
amended by deleting the sum of "Seven Million Two Hundred Thousand And No/100
Dollars ($7,200,000.00)" and by inserting the sum of "Three Million Five
Hundred Thousand and No/100 Dollars ($3,500,000.00)" in lieu thereof.
3. Title and Survey. Paragraph 3.1 of the Agreement is hereby amended
by deleting the following language from the seventh grammatical sentence
beginning on the seventeenth line from the top of page 2:
"and a commitment to issue a 3.1 zoning endorsement with parking and
loading with respect to the redevelopment work contemplated in the
"Dominick's Lease" (as hereinafter defined) to the extent such an
endorsement is available based upon a site plan of such redevelopment
as opposed to plans and specifications."
<PAGE>
4. Environmental Reports. Paragraph 7.2.A of the Agreement is hereby
amended by deleting the first grammatical sentence in its entirety and by
inserting the following language in lieu thereof:
"Seller has delivered to Purchaser the following environmental
reports:
(i) Phase I Environmental Site Assessment of Evanston Plaza,
dated June 13, 1997, prepared by EMG (the "Phase I");
(ii) Phase II Environmental Assessment of Evanston Plaza
Shopping Center, dated June 13, 1997, prepared by EMG (the "Phase
II");
(iii) Phase I Environmental Site Assessment, dated April 27,
1994, prepared by ATEC Associates, Inc. ("ATEC") ("ATEC Phase I");
(iv) Phase I Environmental Site Assessment, dated June 2, 1993,
prepared by Nova Environmental Services, Inc. ("Nova Phase I");
(v) Letter drafted by the Illinois Environmental Protection
Agency, dated November 7, 1997 (the "IEPA Letter");
(vi) Site Investigation Report, Comprehensive Site
Investigation, dated June 15, 1998, prepared by Bradburne, Briller &
Johnson, LLC ("BBJ") ("BBJ Site Investigation Report");
(vii) Remedial Objectives Report, dated June 15, 1998,
prepared by BBJ;
(viii) Remedial Action Plan, dated June 15, 1998, prepared by
BBJ; and
(ix) Site Investigation Report, dated June 21, 1997,
prepared by EMG.
Collectively, the Phase I, Phase II, ATEC Phase I, Nova Phase I, IEPA
Letter, BBJ Site Investigation Report, Remedial Objectives Report, Remedial
Action Plan and Site Investigation Report shall be referred herein to as the
"Existing Report"."
All references to the "Existing Report" in the Agreement shall have the meaning
set forth in this Paragraph 3 of this Amendment.
Paragraph 7.2.A. of the Agreement is further amended by deleting the fifth
grammatical sentence therein in its entirety.
5. Environmental Conditions. Paragraphs 7.2.B, 7.3.A, 7.3.B, 7.3.C,
7.4, 7.5, and 7.6 of the Agreement are hereby deleted in their entirety.
Paragraph 7.7 of the Agreement is hereby amended by deleting the following
language from the fourth grammatical sentence:
"except for Seller's obligations to deposit funds into the
Environmental Escrow, as set forth in Paragraph 7.4 herein."
<PAGE>
6. Closing Date. Paragraph 8 of the Agreement is hereby amended by
deleting the first grammatical sentence in its entirety and by inserting the
following language in lieu thereof:
"The Closing of this transaction (the "Closing") shall occur seven
(7) days after the satisfaction of the Conditions Precedent (as
hereinafter defined) (the "Closing Date"), but in no event earlier
than October 1, 1998, at the office of the Title Insurer, Chicago,
Illinois, at which time Seller shall deliver possession of the
Property, subject to the terms of the Leases (as hereinafter defined)
to Purchaser."
7. Closing Documents. Paragraph 9.2 of the Agreement is hereby amended
by deleting the following subparagraphs in their entirety:
"9.2.12. the Environmental Escrow Agreement,"
"9.2.15. an assignment and assumption of the Fretter's Agreement of
Sale and the Toys "R" Us Agreement of Sale in accordance with the
terms of Paragraph 29.6 herein."
8. Representations and Warranties. Paragraph 16.1 of the Agreement of
Sale is hereby amended by deleting the following language from the third line
of the first grammatical sentence: "Michael Conter (the asset manager
responsible for the property)" and by inserting the following language in lieu
thereof: "Jerry Ogle". The name "Michael Conter" should be deleted in the
tenth line of Paragraph 16.1 and the name "Jerry Ogle" should be inserted in
lieu thereof.
9. Tenant Certificates. Seller and Purchaser hereby acknowledge that
Seller has delivered all the Tenant Certificates required pursuant to Paragraph
27 of the Agreement and Purchaser acknowledges that such delivery is sufficient
to satisfy the requirements of Paragraph 27. Purchaser hereby waives the
Estoppel Condition set forth in Paragraph 27.4 and waives any rights in
connection with Paragraph 27 to (a) require the delivery of any Seller Tenant
Certificates, (b) receive any credit at Closing or (c) terminate this
Agreement.
10. IRPTA. Paragraph 28 of the Agreement is hereby amended by deleting
said Paragraph in its entirety and by inserting the following language in lieu
thereof:
"Seller and Purchaser hereby indicate that they are aware of the
purpose and intent of the Illinois Responsible Property Transfer Act
(the "Act") and the disclosure document referred to in the Act.
Seller and Purchaser hereby agree and acknowledge that said
disclosure document is not required in this transaction. Purchaser
hereby agrees to waive any right to terminate this Agreement pursuant
to the Act."
11. Unsatisfied Lease Obligations. Paragraph 26.1 of the Agreement is
hereby amended by deleting said Paragraph in its entirety.
<PAGE>
12. Representations and Warranties. Section 16 of the Agreement is
hereby amended by inserting the following subparagraph:
"16.2.11. All Tenant improvement obligations and leasing commissions
have been satisfied and paid in full, other than in connection with
that certain Second Amendment to Lease dated as of August 17, 1998
(the "Second Amendment"), with Office Depot, which Second Amendment
and tenant improvement obligations Purchaser has agreed to assume at
Closing."
13. Purchaser's Conditions to Closing. Paragraph 29 of the Original
Agreement, Paragraphs 2 and 3 of the First Amendment and Paragraph 2 of the
Second Amendment are hereby deleted in their entirety.
14. Conditions Precedent. The obligations of Seller and Purchaser under
this Agreement are contingent upon the satisfaction of the following conditions
(the "Conditions Precedent") on or before October 30, 1998:
(a) Seller obtaining approval of the revised Remedial Action Plan
(the "Revised RAP") by the Illinois Environmental Protection Agency ("IEPA").
Prior to Seller's submittal of the Revised RAP to the IEPA, Seller will provide
Purchaser with a copy of the Revised RAP and Purchaser shall have five (5)
business days in which to approve the revisions contained in the Revised RAP.
Purchaser acknowledges that it has already approved the Remedial Action Plan
submitted to the IEPA as of June 15, 1998. Upon Purchaser's approval of the
Revised RAP or after the expiration of said five (5) day period, Seller shall
submit the Revised RAP to the IEPA. If Purchaser disapproves of the Revised
RAP, this condition precedent shall not be fulfilled.
(b) Seller holding a public meeting to be held in Evanston,
Illinois, regarding the proposed Revised RAP (the "Notice Meeting"); provided,
however, that to the extent Seller amends or modifies the Revised RAP as a
result of comments considered at the Notice Meeting, said amendments or
modifications shall be submitted to Purchaser for approval or disapproval as
provided in subsection (a) above. In the event Seller amends or modifies the
Revised RAP, subsection (a) above shall not be satisfied until Seller, upon
Purchaser's approval, resubmits the Revised RAP to the IEPA and obtains IEPA's
approval of the resubmitted Revised RAP.
If any of the Conditions Precedent set forth above are not fulfilled
as of October 30, 1998, Purchaser or Seller may terminate this Agreement by
giving written notice of such termination to the other party by November 4,
1998, in which event Seller shall promptly return to Purchaser all Earnest
Money deposited, together with any interest earned thereon, and neither
Purchaser nor Seller shall have any right, obligation or liability under this
Agreement, except for Purchaser's obligation to indemnify Seller and restore
the Property, as more fully set forth in Paragraph 7.1; provided, however, that
Purchaser shall have the right to waive the satisfaction of the Conditions
Precedent by written notice to Seller on or before October 30, 1998.
15. Fretter Bankruptcy Claim. Seller and Purchaser hereby agree that
Seller shall retain any and all claims arising out of the Fretter, Inc.
bankruptcy; provided, however, that Seller agrees to cooperate with Purchaser
so that Purchaser may acquire the Fretter's Parcel out of the bankruptcy.
<PAGE>
16. Tax Abatement. Seller and Purchaser hereby agree that Seller shall
retain any and all rights to any real estate tax abatements or refunds relating
to any period prior to the Closing Date to the extent any such real estate tax
abatement or refund relates to any space in the Shopping Center which is vacant
or to the extent such real estate tax abatement or refund is not owed to a
tenant under such tenant's Lease.
17. Indemnification by Purchaser.
The Existing Report specifically identifies certain types of
environmental contamination existing on the Property in excess of
industrial/commercial remediation objectives (such excess contamination is
collectively referred to as the "Contamination"). Due to the presence of the
Contamination, Seller has agreed to reduce the Purchase Price as reflected
elsewhere herein. In exchange for such reduction, Purchaser has agreed to
provide the limited indemnifications set forth below. For purposes of the
limited indemnifications set forth below, "Indemnitees" shall mean Evanston
Plaza Investors a Real Estate Limited Partnership, an Illinois limited
partnership ("EPI"), and the general and limited partners (and their
successors) in EPI. Subject to the Cap (hereinafter defined), Purchaser hereby
agrees to indemnify Indemnitees and hold Indemnitees harmless from any
out-of-pocket cost or expense actually incurred by Indemnitees after the
Closing in connection with any action by the IEPA (or any other Illinois
agency) or any local or federal agency pursuant to applicable law requiring
remediation of the Contamination on the Property ("Governmental Enforcement
Indemnification"). Purchaser hereby further agrees to indemnify Indemnitees
and hold Indemnitees harmless from any out-of-pocket cost or expenses actually
incurred by Indemnitees after the Closing arising out of Purchaser's
exacerbation of the Contamination on the Property to the extent, but only to
the extent, Purchaser or its agents are actually responsible for exacerbating
the Contamination. Notwithstanding anything to the contrary: (i) Purchaser
shall not have any indemnification obligation to Indemnitees until the total of
all indemnifiable costs exceeds $5,000; and (ii) in no event shall Purchaser's
Governmental Enforcement Indemnification obligations exceed, in the aggregate,
the Cap (as the same may be reduced as provided below). The foregoing
indemnifications shall expire on the date which is four (4) years after the
Closing. The Governmental Enforcement Indemnification shall not include, and
shall specifically exclude, any third-party tort claims (including, without
limitation, personal injury and property damage claims arising from or out of
any contamination in the soil, water or air). Notwithstanding anything to the
contrary, the Purchaser's indemnities shall be personal to Indemnitees and may
not be enforced against Purchaser by any third parties or governmental
agencies. For purposes hereof, the Cap shall initially be equal to
$3,700,000.00, but shall be reduced, dollar for dollar, for each and every
dollar paid by Purchaser to non-affiliates of Purchaser as reflected by paid
invoices in connection with arm's-length contracts for remediating, containing,
monitoring or otherwise responding to any Contamination whatsoever, including,
without limitation, testing, monitoring, excavating, backfilling, preparation
and submission of additional reports to the IEPA, attorney's and consultant's
fees, and all other costs, fees or charges associated in connection therewith.
Seller and Purchaser agree that the indemnification obligations set forth above
shall survive the delivery of title, shall not merge into the deed and shall
survive closing as provided herein.
<PAGE>
Within thirty (30) days after an Indemnitee acquires knowledge of an event
that may give rise to an indemnification obligation of Purchaser hereunder
("Occurrence"), Indemnitees shall give written notice to Purchaser describing
the event in reasonable detail, the failure of which shall permit Purchaser to
offset against its indemnification obligation hereunder an amount equal to the
amount of any increased or additional costs or expenses incurred as a result of
such failure to give Purchaser timely notice, including, without limitation,
any increased cost of remediation. Such notice shall include a copy of all
relevant notices, pleadings and the like. Indemnitees and Purchaser shall
cooperate with each other and jointly develop a strategy for responding to the
Occurrence. In no event shall Seller and/or any of the Indemnitees agree or
acknowledge any obligation to remediate the Property without the prior written
consent of Purchaser, which consent Purchaser shall not unreasonably withhold.
Purchaser shall respond to a request for its consent within twenty (20) days.
Any failure to obtain Purchaser's consent as required above shall vitiate
Purchaser's indemnification obligations arising out of such Occurrence. Prior
to incurring any indemnifiable costs, Indemnitees shall give Purchaser ten (10)
days' advance written notice, which notice shall specify the estimated amount
to be incurred and shall specify, in reasonable detail, the purpose for
incurring such costs. Purchaser shall have no obligation to indemnify
Indemnitees for any indemnifiable costs for which Purchaser has not received
such notice. Upon receipt of such notice, Purchaser may object to any such
cost or the purpose for which it is intended to be incurred, in which event
Seller and Purchaser shall diligently proceed in good faith to resolve the
objection. If Indemnitees and Purchaser are not able to resolve the objection,
the matter shall be resolved through binding arbitration. At anytime from and
after an Occurrence, Purchaser shall have the right, but not the obligation, to
(i) assume the negotiation, challenge and/or defense concerning the Occurrence,
and to resolve any such matter in any lawful manner; and/or (ii) remediate
and/or contain (including, without limitation, installing barriers and/or
monitoring equipment) the Contamination which is the subject of the Occurrence.
Seller shall promptly execute such documents as reasonably requested by
Purchaser and shall otherwise cooperate with Purchaser in connection with the
foregoing.
18. Environmental Remediation Agreement. Upon the Closing of this
transaction, Purchaser agrees that Purchaser, or its successors or assigns,
shall execute and deliver to Seller the Environmental Remediation Agreement
attached hereto as Exhibit A.
19. 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/Lawrence Freed
--------------------------
Name: Lawrence Freed
--------------------------
Its: Manager
--------------------------
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/Jayne Kosik
-------------------------
Name: Jayne Kosik
-------------------------
Its: Chief Financial Officer
-------------------------
<PAGE>
EXHIBIT A
ENVIRONMENTAL REMEDIATION AGREEMENT
<PAGE>
ENVIRONMENTAL REMEDIATION AGREEMENT
THIS ENVIRONMENTAL REMEDIATION AGREEMENT ("Agreement") dated September ,
1998, is entered into by and between JOSEPH FREED HOLDINGS, L.L.C., an Illinois
limited liability company (hereinafter "JFH"), and [Purchasing Entity]
("Purchasing Entity") (JFH and Purchasing Entity are hereinafter collectively
referred to as "Freed"), 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 ("Evanston Plaza
Investors") (Trustee and Evanston Plaza Investors are hereinafter collectively
referred to as "Indemnitees").
WHEREAS, JFH, Trustee and Evanston Plaza Investors are parties to a
certain Agreement of Sale dated December 8, 1997, as amended by that First
Amendment to Agreement of Sale dated May 28, 1998, Second Amendment to
Agreement of Sale dated July 24, 1998, Third Amendment to Agreement of Sale
dated August 28, 1998 and Fourth Amendment to Agreement of Sale dated September
10, 1998 (collectively referred to as the "Sale Agreement") for the real
property commonly known as Evanston Plaza, Evanston, Illinois (the "Property");
WHEREAS, certain response action is being performed at the Property
pursuant to the Illinois Site Remediation Program ("SRP"), 35 Ill. Admin. Code
Part 740, and the Tiered Approach to Corrective Action Objectives ("TACO"), 35
Ill. Admin. Code Part 742;
WHEREAS, Evanston Plaza Investors expects to seek in the future
reimbursement of all response costs incurred in connection with such response
action from responsible third parties under federal and/or state laws
including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA"), 42 U.S.C. e9601 et seq., as
amended;
WHEREAS, due to certain developments in negotiations between JFH and
Evanston Plaza Investors relating to the sale and purchase of the Property, JFH
and Indemnitees have agreed it is necessary to enter into this Agreement; and
NOW THEREFORE, in consideration of the matters set forth in the foregoing
recitals, the mutual promises and covenants contained herein, and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Environmental Reports. Evanston Plaza Investors, through its
consultants, has conducted and performed extensive tests, studies, borings and
other analysis of the Property, all as set forth in the Existing Report (as
that term is defined in the Fourth Amendment to Agreement of Sale, dated
September __, 1998). The Existing Report includes, without limitation, the
Remediation Objectives Report dated June 1998 ("RO Report") and the Remedial
Action Plan dated June 1998, as revised ___________, 1998 ("RAP").
2. Remedial Activities. In consideration of Evanston Plaza Investors'
agreements contained herein, Freed agrees to perform certain response action on
<PAGE>
the Property (but not off the Property) for those releases of hazardous
substances in soil identified in the Site Investigation Report that exceed the
remediation objectives identified in the RO Report (such response action
hereinafter referred to as the "Remedial Activities") as follows:
a. Freed agrees to perform the Remedial Activities in substantial
compliance with the RAP, as the RAP may from time to time be amended, modified
or revised with the approval of the Illinois Environmental Protection Agency
("IEPA") and in accordance with the terms contained herein;
b. Freed agrees to submit to Evanston Plaza Investors for review and
approval any proposed amendment, modification or revision to the RAP
(individually or collectively, an "Amendment"), such approval not to be
unreasonably withheld based upon the following factors:
(1) The Amendment shall not violate applicable environmental law and
regulation;
(2) The Amendment shall be, when evaluated as a whole, in
substantial compliance with 35 Ill. Adm. Code Parts 740 and 742; and
(3) The Amendment shall not prevent Freed from obtaining a "No
Further Remediation Letter" for the Property, issued by the IEPA, in accordance
with 35 Ill. Adm. Code Sections 740.605 and 740.610; and
(4) The Amendment shall not alter the RAP in such a way as to cause
the Remedial Activities to not be consistent with the National Contingency
Plan, 40 C.F.R. Part 300.
Upon its receipt of a proposed Amendment, Evanston Plaza Investors shall
have twenty-one (21) days in which to approve or disapprove of an Amendment by
written notice to Freed. If Evanston Plaza Investors does not give Freed
written notice within said twenty-one (21) day period, said Amendment shall be
deemed approved by Evanston Plaza Investors.
c. Freed agrees to permit representatives of Evanston Plaza Investors to
observe and monitor on-site work implementing the RAP, and Freed agrees to
consider any comments or suggestions concerning the substantial compliance of
the work with the RAP.
d. Evanston Plaza Investors must give Freed written notice within
forty-five (45) days of any breach by Freed of its obligations in this
paragraph 2 or in paragraph 3 herein. Freed shall have sixty (60) days to cure
such breach. In the event Evanston Plaza Investors does not give Freed timely
notice of an alleged breach, and Freed can establish that it was materially
prejudiced by Evanston Plaza Investors' failure to give timely notice, Evanston
Plaza Investors shall be deemed to have waived and covenanted not to sue Freed
for any such breach. Evanston Plaza Investors and Freed agree that Freed shall
be deemed to be materially prejudiced within the meaning of the previous
sentence (but without limiting the scope of materially prejudiced) in the event
that Evanston Plaza Investors fails to give Freed notice of any claim by
Evanston Plaza Investors that Freed failed to perform some or all of the
Remedial Activities in substantial compliance with RAP before Freed submits to
IEPA a remedial action completion report in accordance with 35 Ill.Admin.Code
Section 740.455.
<PAGE>
e. As a condition antecedent to Freed's obligations under this paragraph
2 and paragraph 3 herein to perform Remedial Activities, Dominick's must have
entered into a lease agreement, acceptable to Freed in its sole discretion,
causing the construction of a grocery store on the Property and the Toys R Us
Parcel and the Fretters Parcel must have been purchased.
3. Remediation Costs. Freed shall pay for all Remedial Activities at
its sole cost and expense, including, but not limited to, all labor, materials,
expenses, equipment, machinery, reports, paperwork, consulting and shall use
its best efforts to obtain a Focused No Further Remediation ("NFR") Letter for
the Property from the Illinois Environmental Protection Agency ("IEPA"). The
Remedial Activities also include, without limitation, any monitoring
requirements of the IEPA included in the NFR Letter and any further remedial
activities necessary to remedy and correct any adverse results of the
monitoring, as determined by the IEPA.
4. Remediation Claims. Freed hereby assigns to Evanston Plaza Investors
and its successors and assigns the sole and exclusive right to seek in the
future reimbursement of any and all response costs incurred in connection with
the Remedial Activities from responsible third parties under CERCLA, or any
other federal, state or local laws for a maximum claim amount not to exceed
$3,700,000, excluding counsel and consultant costs incurred by Evanston Plaza
Investors in connection with the Remedial Activities (the "Remediation Claim"),
whether such response costs were originally incurred by Evanston Plaza
Investors or Freed. Freed hereby waives and releases any and all rights to the
Remediation Claim.
5. Permits and Approvals. Freed agrees to obtain the necessary permits,
authorizations, or approvals from IEPA and other federal, state or local
governmental agencies which have jurisdiction over the Remedial Activities
prior to the commencement of the Remedial Activities. Freed shall promptly
provide Evanston Plaza Investors with copies of all correspondence, reports,
tests and any other documents submitted to or received from the IEPA or any
other governmental agency relating to the Remedial Activities.
6. Evanston Plaza Investors Cooperation. Evanston Plaza Investors agree
that it will provide Freed with such reasonable cooperation necessary to enable
Freed to acquire the necessary permits, authorizations, or approvals from IEPA
and other governmental agencies which have jurisdiction over the Remedial
Activities. Evanston Plaza Investors will cooperate with Freed in timely
reviewing and executing such reports and documents to be submitted to and
approved by the IEPA or other governmental agencies. No documents or reports
shall be filed with or provided to the IEPA or any other third party without
the prior review of Evanston Plaza Investors or its counsel. Freed shall
provide Evanston Plaza Investors with copies of all letters, responses, reports
and other documents received from the IEPA or other third parties in connection
with the Remedial Activities promptly upon receipt of the same. Indemnitees
acknowledge and agree that Freed shall (a) control the Remedial Activities, (b)
determine the extent of the Remedial Activities, (c) communicate, negotiate and
deal with any regulatory authority asserting jurisdiction over the Property or
the Remedial Activities, without interference or direct participation by the
Indemnitees, and (d) have discretion to agree to the scope, form, substance and
conditions of the NFR to be issued by the IEPA, and to implement any such NFR
issued by IEPA.
<PAGE>
7. Remediation Status Reports. On or before the 10th day of each month,
commencing with the second month after the date of execution of this Agreement,
Freed shall provide to Evanston Plaza Investors, for delivery to and review by
Evanston Plaza Investors and its counsel and consultants, written reports
detailing the status of the Remedial Activities for the preceding month (the
"Reporting Period"), including, without limitation (a) work completed to date
through and including the Reporting Period, (b) work intended for the month
following the Reporting Period, (c) an updated schedule for the completion of
the Remedial Activities and (d) an updated detailed accounting of costs
incurred in connection with the Remedial Activities. The written reports shall
follow the format provided in Exhibit A. Freed's obligation to provide reports
in accordance with this paragraph shall terminate upon Freed's submittal of the
Completion Report to IEPA.
8. Remedies. In the event that Freed fails to fulfill its obligations
under this Agreement, Indemnitees reserve the right to pursue any and all
remedies available under the Sale Agreement, this Agreement, at law or in
equity as a result of such violation or default. In the event that the
Indemnitees fail to fulfill its obligations under this Agreement, Freed
reserves the right to pursue any and all remedies available.
9. Indemnification. Freed shall protect, indemnify, defend and hold
harmless Indemnitees and their respective partners, stockholders, affiliates
(including, but not limited to, The Balcor Company, The Balcor Company
Holdings, Inc., National Express Company and American Express Company),
directors, officers, employees, agents (collectively referred to hereinafter as
"Indemnified Parties") from and against any and all claims, causes of action,
demands, losses, damages, costs, expenses, liability or fees (including
attorney's fees and costs) for injury to or death of any person, or from damage
to or destruction of property, and for any other similar costs, damages,
expenses, liabilities, fines, penalties or losses (individually and
collectively, the "Losses") incurred by or claimed against Indemnitees by third
parties arising out of Freed's negligent performance of the Remedial Activities
or any material breach by Freed of any covenant, representation or agreement
set forth in this Agreement.
As a condition antecedent to Freed's assignment of the Remediation Claim
in Paragraph 4 herein to Evanston Plaza Investors, its successors or assigns,
such assignment shall be valid and effective if and only if Evanston Plaza
Investors, its successors or assigns agree to indemnify, defend and hold
harmless Freed from any loss, cost, damage or expense arising out of the
assertion against responsible third parties by Evanston Plaza Investors, its
successors or assigns, of any Remediation Claim. Evanston Plaza hereby
indemnifies, defends and holds harmless Freed from any loss, cost, damage or
expense arising out of the assertion against responsible third parties by
Evanston Plaza, its successors or assigns, of any Remediation Claim.
10. Notices. Any notice or demand which either party hereto is required
or may desire to give or deliver to or make upon the other party shall be in
writing and may be personally delivered or given or made by overnight courier
such as Federal Express, by facsimile transmission or made by United States
registered or certified mail addressed as follows:
<PAGE>
TO EVANSTON PLAZA INVESTORS: c/o The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A-200
Bannockburn, Illinois 60015
Attention: Jayne Kosik
(847) 317-4458 (FAX)
with copies to: c/o The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A-200
Bannockburn, Illinois 60015
Attention: Jerry Ogle, Esq.
(847) 317-4380
(847) 317-4458 (FAX)
with copies to: Katten Muchin & Zavis
525 West Monroe Street
Suite 1600
Chicago, Illinois 60661-3693
Attention: Daniel J. Perlman, Esq.
(312) 902-5532
(312) 902-1061 (FAX)
TO FREED: Joseph Freed Holdings, L.L.C.
1400 South Wolf Road, Building 100
Wheeling, Illinois 60090
Attention: Mr. Norris Eber
(847) 215-5500
(847) 215-5282 (FAX)
and one copy to: Baker & McKenzie
One Prudential Plaza
130 East Randolph Drive
Chicago, Illinois 60601
Attention: James P. O'Brien, Esq.
(312) 861-7588
(312) 861-2898 (FAX)
11. Miscellaneous.
a. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Illinois without regard to conflict of
law rules.
b. Headings and titles of paragraphs and other sub-parts of this
Agreement are for convenience of reference only and shall not be considered in
interpreting the text of this Agreement. Modifications or amendments to this
Agreement must be in writing and executed by duly authorized representatives of
each party.
<PAGE>
c. In the event that any portion or all of this Agreement is held
to be void or unenforceable, the remaining portions shall remain valid and
enforceable and the parties agree to negotiate in good faith to reach an
equitable agreement which shall effect the intent of the parties as set forth
in this Agreement.
d. The prevailing party in any litigation between the parties
hereto arising out of this Agreement shall be entitled to reasonable attorneys'
fees and costs to be paid by the non-prevailing party.
e. The provisions of this Agreement which by their nature are
intended to survive the termination, cancellation, completion or expiration of
this Agreement shall continue as valid and enforceable obligations of the
parties notwithstanding any such termination, cancellation, completion or
expiration; provided, however, that in all events Freed's obligations (except
for Freed's assignment of the Remediation Claim in paragraph 4 herein) under
this Agreement shall terminate and be of no further force or effect upon the
issuance of a NFR Letter concerning the Property by IEPA.
f. Neither party to this Agreement shall assign its duties and
obligations hereunder without the prior written consent of the other party.
12. Entire Agreement. Except as otherwise provided in the Sale
Agreement, this Agreement constitutes the entire agreement between the parties
with regard to the subject matter hereof and supersedes and cancels any prior
agreements, understandings, or representations, whether in writing or oral.
<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:
-----------------------------
Name:
-----------------------------
Its:
-----------------------------
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:
---------------------------
Name:
---------------------------
Its:
---------------------------
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:
--------------------------
Name:
--------------------------
Its:
--------------------------
<PAGE>
EXHIBIT A
EVANSTON PLAZA MONTHLY REMEDIATION STATUS REPORT
Reporting Period:
------------------------------
I. General Description of Work Completed to Date Through and Including
Report Period
II. General Description of Work Intended for the Month Following the
Reporting Period
III. Schedule for Completion of Remaining Tasks Constituting the Remedial
Activities
IV. Attach Copies of Invoices for Remedial Activities Paid During
Reporting Period
<PAGE>
