SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported) December 29, 1995
Paine Webber Income Properties Two Limited Partnership
(Exact name of registrant as specified in its charter)
Delaware 0-10977 04-2689565
(State or other jurisdiction) (Commission (IRS Employer
of incorporation File Number) Identification No.)
265 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 439-8118
(Former name or address, if changed since last report)
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FORM 8-K
CURRENT REPORT
PAINE WEBBER INCOME PROPERTIES TWO LIMITED PARTNERSHIP
ITEM 2 - Disposition of Assets
Spanish Trace Apartments -
Disposition Date - December 29, 1995
On December 29, 1995 the Partnership sold its interest in the Spanish Trace
Apartments to an affiliate of the co-venture partner for a net cash price of
approximately $2.3 million. In addition, the Partnership will be entitled to its
share of the net cash flow generated by the Spanish Trace joint venture through
September 30, 1995 and a 10% return on the sale price of $2.3 million from
October 1, 1995 through the date of sale, or approximately $56,700. The net sale
price for the Partnership's equity interest is based on an agreed upon fair
market value of the property of approximately $13.3 million. The agreed upon
fair market value is supported by management's most recent independent appraisal
of the Spanish Trace Apartments and by the marketing efforts to third-parties
which have been conducted over the last year and a half. Under the terms of the
Spanish Trace joint venture agreement, the co-venture partner had the right to
match any third-party offer to purchase the property. Accordingly, a negotiated
sale to the co-venturer or its affiliate at the appropriate market price
represents the most expeditious and advantageous way for the Partnership to sell
this remaining investment. Conditions in the markets for multi-family
residential properties across the country have demonstrated gradual improvement
throughout fiscal 1995. The absence of significant new construction activity has
allowed the oversupply which existed in many markets as a result of the
overbuilding of the late 1980s to be absorbed. The results of this absorption
have been stabilized occupancy levels and a gradual improvement in rental rates,
which have had a positive impact on cash flow levels and, consequently, property
values. In addition, the implementation of the capital improvement program made
possible by the 1993 refinancing of Spanish Trace has supported management's
ability to increase rents and add value to the property. As a result, management
believes that it is an opportune time to sell the Partnership's interest in the
remaining operating investment property and proceed with a formal liquidation of
the Partnership in fiscal 1996. After payment of all liquidation-related
expenses, the Partnership is expected to have sufficient cash to make a final
distribution payment to the Limited Partners of approximately $149 per original
$1,000 investment.
ITEM 7 - Financial Statements and Exhibits
(a) Financial Statements: None
(b) Exhibits:
(1) Acquisition Agreement by and among Paragon Group, L.P., a Delaware
limited partnership, ("Purchaser"), Paine Webber Income Properties
Two Limited Partnership, a Delaware limited partnership "Seller" and
Title Insurance Agency, Inc., a Missouri corporation ("Escrow
Agent").
(2) Assignment of Partnership Interests by Paine Webber Income Properties
Two Limited Partnership, a Delaware limited partnership ("Seller")
<PAGE>
ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT (this "Agreement") is made and entered into as
of October 17, 1995 by and among PARAGON GROUP L.P., a Delaware limited
partnership ("Purchaser"), PAINE WEBBER INCOME PROPERTIES TWO LIMITED
PARTNERSHIP, a Delaware limited partnership ("Seller") and TITLE INSURERS
AGENCY, INC., a Missouri corporation ("Escrow Agent").
WHEREAS, Seller is a general partner and St. Louis Spanish Trace Company,
L.P., a Missouri limited partnership (the "Paragon General Partner"), is the
other general partner of Spanish Trace Associates, a Missouri general
partnership (the "Partnership"), pursuant to that certain Partnership Agreement
dated as of December 23, 1980, as subsequently amended (the "Partnership
Agreement");
WHEREAS, the Partnership is the owner of a 372 unit garden apartment
development situated on approximately 20 acres of land located in St. Louis
County, Missouri, and known as Spanish Trace Apartments (the "Property");
WHEREAS, the parties hereto desire that Purchaser acquire from Seller all
of Seller's right, title and interest in the Partnership (the "Partnership
Interest") upon the terms and conditions provided herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
and covenants set forth herein, the parties hereto hereby agree as follows:
ARTICLE I
TRANSFER AND PARTNERSHIP INTEREST
1.1 Partnership Interest to be Acquired. On the Closing Date (as
hereinafter defined), in accordance with the terms and conditions set forth
herein, Seller shall transfer to Purchaser, and Purchaser shall acquire from
Seller, the Partnership Interest; provided, that in lieu of acquiring the
Partnership Interest contemplated by this Agreement, Purchaser may, by providing
notice at or before providing the Closing Notice, elect to acquire the Property
from the Partnership for cash in an amount that would result in a cash
distribution to Seller equal to the Purchase Price (as hereinafter defined) (the
"Transaction").
1.2 Purchase Price; Payment. The total purchase price for the Partnership
Interest (the "Purchase Price") shall be $2,300,000 (subject to adjustment as
provided in Section 1.4 below).
The Purchase Price shall be payable to Seller at the Closing by wire
transfer of immediately available funds to an account which shall be identified
by Seller not less than three (3) days prior to the Closing Date.
1.3 Closing. The closing of the Transaction by Purchaser (the "Closing")
shall take place, subject to satisfaction or waiver of all conditions to Closing
set forth in Article V hereof, on such date (the "Closing Date") as specified in
a written notice (the "Closing Notice") from Purchaser to Seller, which notice
shall be provided to Seller not later than five (5) days prior to the Closing
Date stated in the Closing Notice.
1.4 Effective Date of Closing. In the event the Closing shall occur on or
before the Termination Date (as defined below), the Closing shall be deemed
effective as of October 1, 1995 and from and after October 1, 1995 Purchaser
shall be deemed the owner of the Partnership Interest and entitled to all the
rights and privileges associated with the ownership thereof. In addition, in the
event the Closing occurs on or before the Termination Date but after October 1,
1995 the Purchase Price shall be increased by an amount equal to $630 for each
calendar day which has expired after October 1, 1995 through and including the
actual date of Closing. In the event the Closing shall occur after the
Termination Date, the Closing shall be deemed effective on the actual date of
Closing and there shall be no adjustment in the Purchase Price.
1.5 At the Closing there shall be created a separate account into which
shall be deposited all undistributed net cash flow and/or proceeds of
refinancings and other capital transactions through the actual date of Closing
which cash flow and/or proceeds shall be distributed as and when permitted, to
Seller, the Paragon General Partner and Purchaser pursuant to the terms of the
Partnership Agreement and this Agreement (taking into account the effective date
of the transfer of the Partnership Interest as provided in Section 1.4 above).
1.6 Earnest Money. Upon the execution and delivery of this Agreement
Purchaser shall deposit the sum of Fifty Thousand and No/100 Dollars
($50,000.00) (the "Earnest Money Deposit") with Escrow Agent. Said Earnest Money
Deposit shall be deposited in the form of a check to be cashed and deposited in
an interest bearing account by Escrow Agent. All interest earned on such account
shall be added to and become a part of the Earnest Money Deposit. Upon Closing
of the transaction contemplated by this Agreement the then balance of the
Earnest Money Deposit shall be paid over to Seller and credited against
Purchaser's obligation to deliver the Purchase Price. In the event the Closing
has not occurred on or before the Termination Date because any one or more of
the conditions described in Section 5.1 has (have) not been satisfied or waived
(or deemed satisfied pursuant to Section 5.3 hereof) by the Termination Date
then upon receipt of written notice from Purchaser of such fact Escrow Agent
shall promptly deliver the then balance of the Earnest Money Deposit to
Purchaser. In all other circumstances the Earnest Money Deposit shall be held by
Escrow Agent and disbursed as provided in this Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLER
Seller hereby represents and warrants to Purchaser as follows:
2.1 Organization and Qualification. Seller is a limited partnership duly
organized, validly existing and in good standing under the laws of the State of
Delaware. The sole general partner of Seller is Second Income Properties, Inc.
("Second Income Properties"), a corporation duly organized and validly existing
under the laws of the State of Delaware. Each of Seller and Second Income
Properties has the requisite power and authority to carry on its business as it
is now being conducted and to engage in the Transaction.
2.2 Authorization. The execution and delivery of this Agreement by Seller
and the consummation by Seller of the transactions contemplated hereby have been
duly authorized by all necessary partnership and corporate action and no other
proceedings on the part of Seller are necessary to authorize this Agreement or
to consummate the transactions contemplated hereby.
Neither the execution and delivery of this Agreement by Seller, the
consummation by Seller of the Transaction, nor compliance by Seller with any of
the provisions hereof will (i) conflict with or result in any breach of any
provisions of the partnership agreement of Seller, (ii) result in a violation or
breach of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, cancellation or acceleration)
under any of the material terms, conditions or provisions of any note, bond,
mortgage, indenture, lease, license, contract, agreement, easement, restriction
or other instrument or obligation to which Seller is a party or by which Seller
may be bound, or (iii) violate any order, writ, injunction, decree, statute,
rule or regulation binding upon Seller.
2.3 Binding Obligation. This Agreement has been duly and validly executed
and delivered by Seller to Purchaser and constitutes a valid and binding
agreement of Seller, enforceable against Seller in accordance with its terms,
except that such enforcement may be subject to bankruptcy, conservatorship,
receivership, insolvency, moratorium or similar laws affecting creditors' rights
generally and to general principles of equity.
2.4 Brokers. Seller has not employed any broker or finder, or incurred any
liability therefor, in connection with the Transaction contemplated by this
Agreement.
2.5 Ownership of Partnership Interest.
(a) Except as otherwise provided in the Partnership Agreement, Seller
(i) owns the entire right, title and interest in and to the Partnership
Interest, (ii) has good and valid title in and to the Partnership Interest,
(iii) has the full right, power, capacity and authority to validly sell, assign,
convey and transfer the Partnership Interest, (iv) is not a party to any
agreement, executed or executory, to sell, hypothecate or otherwise dispose of
the Partnership Interest, (v) has not sold, hypothecated or otherwise disposed
of the Partnership Interest, and (vi) owns the Partnership Interest free and
clear of all mortgages, pledges, liens, claims, security interests, conditional
sales agreements, and any other encumbrances or charges ("Encumbrances").
(b) Except as otherwise provided in the Partnership Agreement, the
Partnership Interest to be transferred hereunder is transferable by Seller by
Seller's sole act and deed, and no consent on the part of any other person
(other than the Paragon General Partner) is necessary to validate the transfer
to Purchaser.
2.6 No Other Agreements to Sell. Except as otherwise provided in the
Partnership Agreement, Seller represents that it has made no agreement with, and
will not enter into any agreement prior to the termination of this Agreement
with, and has no obligation (absolute or contingent) to, any other person or
entity to sell, transfer or in any way encumber any part or all of the
Partnership Interest, or to enter into any agreement with respect to a sale,
transfer or encumbrance of or put or call right with respect to any part or all
of the Partnership Interest.
2.7 Proceedings, Etc. Seller is not subject to any judgment, order, writ,
injunction or decree of any governmental entity which would restrain or prohibit
the execution of this Agreement or the other documents and agreements to be
executed by Seller in connection herewith (collectively, the "Other Seller
Documents") or the consummation of the Transaction. There are no actions or
proceedings which are pending, and Seller has not received written notice of any
threatened action or proceeding seeking to restrain, prohibit or obtain damages
or other relief in connection with this Agreement or the Transaction.
2.8 Representations and Warranties to be True on Closing _
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Date. The representations and warranties made in this Article II will be true
and correct in all material respects on and as of the Closing Date with the same
force and effect as if such representations and warranties had been made on and
as of the Closing Date, except that any such representations and warranties
which expressly relate only to an earlier date shall be true and correct in all
material respects on the Closing Date as of such earlier date.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller as follows:
3.1 Organization, Power and Authority, and Qualification. Purchaser is a
limited partnership duly organized, validly existing and in good standing under
the laws of the State of Delaware. Purchaser has the requisite power and
authority to carry on its business as it is now being conducted and to engage in
the Transaction.
3.2 Authority Relative to this Agreement. The execution and delivery of
this Agreement by Purchaser and the consummation by Purchaser of the
transactions contemplated hereby have been duly authorized by all necessary
action and no other proceedings on the part of Purchaser are necessary to
authorize this Agreement or to consummate the transactions contemplated hereby.
Neither the execution and delivery of this Agreement by Purchaser, nor the
consummation by Purchaser of the Transaction, nor compliance by Purchaser with
any of the provisions hereof will (i) conflict with or result in any breach of
any provisions of the partnership agreement of Purchaser, (ii) result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, cancellation
or acceleration) under any of the material terms, conditions or provisions of
any note, bond, mortgage, indenture, lease, license, contract, agreement,
easement, restriction or other instrument or obligation to which Purchaser is a
party or by which Purchaser or any of its properties or assets may be bound, or
(iii) violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Purchaser or any of its properties or assets. The execution,
delivery and performance of this Agreement and the other documents and
agreements to be executed by Purchaser in connection herewith (collectively, the
"Other Purchase Documents"), and consummation of the Transaction by the
Purchaser, does not violate any applicable state or federal securities laws or
regulations and does not require registration or qualification thereunder except
as will not have a material adverse effect on Purchaser.
3.3 Binding Obligation. This Agreement has been duly and validly executed
and delivered by Purchaser to Seller and constitutes a valid and binding
agreement of Purchaser, except that such enforcement may be subject to
bankruptcy, conservatorship, receivership, insolvency, moratorium or similar
laws affecting creditors' rights generally or the rights of creditors of limited
partnerships and to general principles of equity
3.4 Brokers. Purchaser has not employed any broker or finder, or incurred
any liability therefor in connection with the Transaction contemplated by this
Agreement.
3.5 Consents. No consent, approval, order or authorization of, or
declaration, filing or registration with, any governmental entity is required to
be obtained or made by Purchaser in connection with the execution, delivery or
performance of this Agreement and the Other Purchaser Documents or the
consummation of the Transaction. No consent of any partner of the Partnership or
any lender, tenant or mortgagee of any Property is required for the Transaction,
other than the consent of the Paragon General Partner which is contained herein
and any consents required under the mortgage loan described in Section 5.1.5
hereof.
3.6 Proceedings, Etc. Purchaser is not subject to any judgment, order,
writ, injunction or decree of any governmental entity which would restrain or
prohibit the execution of this Agreement or the Other Purchaser Documents or the
consummation of the Transaction. There are no actions or proceedings which are
pending, and Purchaser has not received written notice of any threatened action
or proceeding seeking to restrain, prohibit or obtain damages or other relief in
connection with this Agreement or the Transaction.
3.7 Risk of Investment in the Partnership Interest. Purchaser acknowledges
that it is able to fend for itself, can bear the economic risk of its investment
in the Partnership Interest and has such knowledge and experience in financial
and business matters that it is capable of evaluating the merits and risks of an
investment in the Partnership Interest.
3.8 Qualification. Purchaser is duly qualified to conduct business in those
jurisdictions in which the failure to be so qualified would have a material and
adverse effect on the Purchaser.
3.9 No Distribution of Partnership Interest. Purchaser will acquire the
Partnership Interest on the Closing Date for investment and not with a view to
the distribution (within the meaning of section 2(11) of the Securities Act)
thereof.
3.10 Representations and Warranties to be True on Closing Date. The
representations and warranties made in this Article III will be true and correct
in all material respects on and as of the Closing Date with the same force and
effect as if such representations and warranties had been made on and as of the
Closing Date, except that any such representations and warranties which
expressly relate only to an earlier date shall be true and correct in all
material respects on the Closing Date as of such earlier date.
ARTICLE IV
COVENANTS AND AGREEMENTS
4.1 Restrictions on Transfer. Prior to the Closing, Seller shall not
directly or indirectly, voluntarily or involuntarily, by operation of law or
otherwise, (a) assign, sell, mortgage, pledge, hypothecate or otherwise dispose
of or encumber, or permit or suffer to exist any Encumbrance on all or any
portion of the Partnership Interest, Seller's direct or indirect, legal or
beneficial interest in the Partnership or Seller's rights and obligations under
either the Partnership Agreement or this Agreement, (b) change Seller's
ownership percentage in the Partership, or (c) transfer any rights or
obligations hereunder.
4.2 Covenant to Remedy Breaches. Each party to this Agreement covenants and
agrees to use all reasonable efforts within its control (a) to prevent the
breach of any representation or warranty made by such party hereunder, (b) to
satisfy all covenants of such party hereunder and (c) to promptly cure any
breach of a representation, warranty or covenant of such party hereunder upon
its learning of same.
4.3 Further Assurances. Each party to this Agreement shall from time to
time execute and deliver to the other party all such other and further
instruments and documents and take or cause to be taken all such other and
further action as the other party may reasonably request in order to effect the
transactions contemplated by this Agreement, including instruments or documents
deemed necessary or desirable by the other party to effect and evidence the
conveyance of the Partnership Interest in accordance with the terms of this
Agreement.
ARTICLE V
CONDITIONS TO CONSUMMATION OF TRANSACTION
5.1 Conditions to the Obligations of Purchaser. The obligations of
Purchaser to consummate the Transaction shall be subject to fulfillment (or
waiver) at or prior to the Closing Date of the following conditions:
5.1.1 Title Report. Purchaser shall have obtained and reviewed a
report regarding the status of title to the Property and have found such report
acceptable in Purchaser's sole and absolute discretion.
5.1.2 Survey. Purchaser shall have obtained a current as-built survey
of the Property and have found such survey acceptable in Purchaser's sole and
absolute discretion.
5.1.3 Physical Inspection. Purchaser shall have conducted (or shall
have had conducted) an inspection of the physical condition of the Property and
the condition of all equipment and personal property and have found such
condition acceptable in Purchaser's sole and absolute discretion.
5.1.4 Environmental Report. Purchaser shall have caused a study to be
made regarding compliance of the property with environmental and related laws
and regulations and have found the results of such study acceptable in
Purchaser's sole and absolute discretion.
5.1.5 Assumption of Indebtedness. Purchaser shall have obtained the
consent of the holder of the first lien indebtedness currently encumbering the
Property and the consent of the Department of Housing and Urban Development
permitting transfer of the Property to Purchaser subject to such indebtedness.
5.1.6 Representations, Warranties and Covenants. Except as otherwise
provided herein or therein, the representatives, warranties, covenants and
agreements made by Seller in this Agreement or in any document delivered by
Seller pursuant to this Agreement shall be true and correct in all material
respects when made and on and as of the Closing Date as though such
representations, warranties and covenants were made on and as of such date.
5.1.7 No Material Adverse Change. There shall have been no material
adverse change, since the date hereof, in the value of the Partnership Interest
or the value or condition of the Property or the Partnership, resulting from a
casualty or condemnation with respect to the Property or resulting from any
occurrence giving rise to any claim against the Partnership or any claim or
litigation having been instituted or made against the Partnership or the
Partnership Interest.
5.1.8 No Order or Injunction. The consummation of the Transaction shall not
have been restrained, enjoined or prohibited by any order or injunction of any
court or governmental authority of competent jurisdiction.
5.1.9 Opinion of Counsel. Purchaser shall have received from counsel
to Seller an opinion dated the Closing Date, in form and substance satisfactory
to Purchaser covering the matters set forth in Sections 2.1 and 2.2 hereof.
5.1.10 Delivery of Documents. Purchaser shall have received (or
Seller shall have delivered into escrow) each of the instruments and
certificates referred to in Sections 6.1(a), (b), (c), (d) and (e) hereof, each
duly executed on behalf of Seller.
5.2 Conditions to the Obligations of Seller. The obligations of Seller to
consummate the Transaction shall be subject to fulfillment (or waiver) at or
prior to the Closing Date of the following conditions:
5.2.1 Representations, Warranties and Covenants. Except as otherwise
provided herein or therein, the representations, warranties and covenants made
by Purchaser in this Agreement or in any document delivered by Purchaser
pursuant to this Agreement shall be true and correct (in all material respects)
when made and on and as of the Closing Date as though such representations,
warranties and covenants were made on and as of such date.
5.2.2 No Order or Injunction. The consummation of this Transaction shall
not have been restrained, enjoined or prohibited by any order or injunction of
any court or governmental authority of competent jurisdiction.
5.2.3 Consents and Waivers. All consents and waivers of third parties
requisite to the consummation of the Transaction by Purchaser shall have been
obtained.
5.2.4 Delivery of Documents and Purchase Price. Seller shall have
received (or Purchaser shall have delivered into escrow) the Purchase Price
pursuant to Section 6.2(a) and each of the instruments and certificates referred
to in Sections 6.2(b), (c) and (e) hereof, each duly executed on behalf of
Purchaser.
5.2.5 Opinion of Counsel. Seller shall have received from counsel to
Purchaser the opinion described in Section 6.2(d) hereof.
5.3 Review Period. Purchaser shall have a period equal to sixty (60) days
from and after the date hereof (the "Review Period") to satisfy itself that the
conditions provided in Sections 5.1.1, 5.1.2, 5.1.3 and 5.1.4 have been met. At
any time during the Review Period Purchaser may deliver to Escrow Agent a
written notice (the "Review Period Termination Notice") stating that any one or
more of said conditions has (have) not been satisfied and is (are) not likely to
be satisfied during the Review Period. Upon receipt of said notice Escrow Agent
shall promptly deliver the Earnest Money Deposit to Purchaser and this Agreement
shall terminate and no party hereto shall have any further rights or obligations
in connection therewith. In the event Purchaser does not deliver the Review
Period Termination Notice during the Review Period then at the expiration of the
Review Period the aforesaid conditions set forth in Sections 5.1.1, 5.1.2, 5.1.3
and 5.1.4 shall be deemed satisfied.
ARTICLE VI
THE CLOSING
6.1 Closing Deliveries by Seller. Seller shall deliver or cause to be
delivered the following at Closing; provided that Purchaser shall have the
option to require that Seller deliver the following in escrow, pursuant to
mutually acceptable escrow instructions, up to three (3) days prior to the
anticipated Closing Date:
(a) an Assignment of Partnership Interest, in form and substance
satisfactory to Purchaser (the "Assignment of Partnership Interest"), pursuant
to which Seller shall convey to Purchaser good and valid title to the
Partnership Interest, free and clear of all Encumbrances;
(b) a certification duly executed by Seller under penalty of perjury,
setting forth Seller's address and Federal tax identification number and
certifying that Seller is not a "foreign person" in accordance with and for the
purpose of the provisions of Section 1445 (as may be amended) of the Internal
Revenue Code of 1986, as amended, and any regulations promulgated thereunder;
(c) a certificate, dated the Closing Date, of an authorized officer
of the general partner of Seller to the effect that the representations and
warranties of Seller set forth in Article III hereof are true and accurate in
all material respects as of the Closing Date as if made again on and (except to
the extent any such representation and warranty expressly specifies otherwise)
as of such date and that all consents necessary for the execution and delivery
of this Agreement by Seller and the consummation of the Transaction by Seller
have been obtained.
(d) the opinion of counsel described in Section 5.1.9 hereof; and
(e) such other documents and instruments as Purchaser shall reasonably
require.
6.2 Closing Deliveries by Purchaser. At Closing, Purchaser shall deliver or
cause to be delivered the following:
(a) the Purchase Price in accordance with Section 1.2 (as adjusted, if
required, pursuant to the provisions of Section 1.4);
(b) an original, fully completed and executed Assignment of Partnership
Interest with respect to the Partnership Interest;
(c) a certificate, dated the Closing Date, of an authorized officer
of the general partner of Purchaser to the effect that (a) all of the conditions
set forth in Section 5.1 have been satisfied or waived and (b) all of the
representations and warranties of Purchaser set forth in Article III hereof are
true and accurate in all material respects as of the Closing Date as if made
again on and (except to the extent any such representation and warranty
expressly specifies otherwise) as of such date;
(d) an opinion of counsel to Purchaser dated the Closing Date in form
and substance satisfactory to Seller covering the matters set forth in Sections
3.1 and 3.2; and
(e) such other documents and instruments as Seller and Purchaser agree are
necessary or appropriate.
ARTICLE VII
TERMINATION AND REMEDIES
7.1 Termination. This Agreement may be terminated as follows:
(a) at any time prior to the Closing Date by mutual written consent of
Purchaser and Seller;
(b) (i) at any time prior to the Closing Date by Purchaser, if there
has been a breach by Seller of its representations, warranties, covenants or
agreements contained in this Agreement, or any such representation or warranty
shall have become untrue, such that if left uncured would cause Section 5.1.6
not to be satisfied and such breach has not been cured within twenty (20) days
following receipt by Seller of written notice of such breach;
(ii) at any time prior to the Closing Date by Seller, if there
has been a breach by Purchaser of any of its representations, warranties,
covenants or agreements contained in this Agreement, or any such representation
and warranty shall have become untrue, such that if left uncured would cause
Section 5.2.1 not to be satisfied and such breach has not been cured within
twenty (20) days following receipt by Purchaser of written notice of such
breach;
(c) by either Purchaser or Seller if the Closing Date has not
occurred prior to or on the Termination Date (as defined below); provided that
the right to terminate this Agreement under this Section 7.1(c) shall not be
available to any party whose breach of representations, warranties, covenants or
agreements contained in this Agreement has been the cause of, or resulted in,
the failure of the Closing to occur by such date or the inability of the
condition set forth in Section 5.1.6 or 5.2, as the case may be, to be
satisfied. As used herein, the "Termination Date" shall mean December 31, 1995;
(d) by Purchaser as provided in Section 5.3 above.
7.2 Effect of Termination. In the event of termination of this Agreement by
either Purchaser or Seller as provided in Section 7.1, this Agreement shall
forthwith become void and there shall be no liability or obligation on the part
of Purchaser or Seller or any of their respective partners, trustees, officers
or directors except (i) nothing herein shall relieve any party from any
liability provided herein for any breach hereof, and (ii) this Section 7.2 shall
remain in full force and effect.
7.3 Remedies.
7.3.1 Default by Seller. If Purchaser has the right to terminate this
Agreement pursuant to Section 7.1(b)(i), Purchaser shall be entitled:
(a) To require Seller to consummate and specifically perform
the Transaction in accordance with the terms of this Agreement, if necessary
through injunction or other court order or process.
(b) To terminate this Agreement pursuant to Section
7.1(b)(i) and to recover the Earnest Money Deposit and/or to pursue any other
remedies Purchaser has at law or in equity or otherwise.
(c) In addition to the other obligations of Seller under
this Section 7.3.1, Purchaser shall have the right to receive and Seller shall
pay all reasonable costs and expenses (including attorneys' fees) incurred by
reason of Purchaser's exercise of remedies provided for herein.
7.3.2 Default by Purchaser. If Seller has the right to terminate this
Agreement pursuant to Section 7.1(b)(ii), Seller shall be entitled:
(a) To terminate this Agreement pursuant to Section
7.1(b)(ii), and to receive the Earnest Money Deposit as Seller's sole and
exclusive remedy.
(b) Seller shall also have the right to receive and
Purchaser shall pay all reasonable costs and expenses (including attorneys'
fees) incurred by reason of Seller's exercise of remedies provided for herein.
7.4 Specific Performance. Seller acknowledges that the Partnership Interest
to be sold and delivered pursuant to this Agreement is unique and that Purchaser
has no adequate remedy at law if Seller shall fail to perform any of its
obligations to transfer the Partnership Interest hereunder, and Seller therefore
confirms and agrees that Purchaser's right to specific performance is essential
to protect the rights and interests of Purchaser. Accordingly, in addition to
any other remedies which Purchaser may have hereunder or at law or in equity or
otherwise, Seller hereby agrees that Purchaser shall have the right to have the
obligations to transfer the Partnership Interest pursuant to this Agreement
specifically performed by Seller and that Purchaser shall have the right to
obtain an order or decree of such specific performance in any of the courts of
the United States or of any state or other political subdivision having
jurisdiction as to this matter.
ARTICLE VIII
INDEMNIFICATION
8.1 Indemnification by Seller. Effective upon the execution and delivery of
the Assignment of Partnership Interest by Seller and the consummation of the
sale of the Partnership Interest in accordance with the terms and conditions of
this Agreement, Seller shall indemnify, protect, defend and hold harmless
Purchaser from and against any and all losses, damages, costs, expenses, claims,
liabilities and obligations, fixed or contingent (including, but not limited to,
attorneys' fees and court costs) suffered or incurred by Purchaser as a result
or by reason of (a) all liabilities or obligations, fixed or contingent,
relating to or arising out of the Partnership Interest accruing or arising out
of events occurring prior to the effective date of the Closing (as provided in
Section 1.4 above) or (b) any breach of the representations, warranties,
covenants and agreement given or made by Seller in this Agreement or any
instrument, certificate or document delivered by or on behalf of Seller pursuant
hereto.
8.2 Indemnification by Purchaser. Effective upon the execution and delivery
of the Assignment of Partnership Interest by Seller and the consummation of the
sale of the Partnership Interest in accordance with the terms and conditions of
this Agreement, Purchaser shall indemnify, protect, defend and hold harmless
Seller from and against any and all losses, damages, costs, expenses, claims,
liabilities and obligations, fixed or contingent (including, but not limited to,
attorneys' fees and court costs) suffered or incurred by Seller as a result or
by reason of (a) all liabilities or obligations, fixed or contingent, relating
to or arising out of the Partnership Interest accruing or arising out of events
occurring on or after the effective date of the Closing (as provided in Section
1.4 above) or (b) any breach of the representations, warranties, covenants and
agreement given or made by Purchaser in this Agreement or any instrument,
certificate or document delivered by or on behalf of Purchaser pursuant hereto.
8.3 Procedures, Conditions of Indemnification. With respect to any
indemnification provided pursuant to this Agreement, the indemnified party
agrees to give prompt written notice to the indemnifying party of any claim or
other assertion of liability by third parties (hereinafter called collectively
"Claims"), it being understood that the failure to give such notice shall not
affect the indemnified party's right to indemnification and the indemnifying
party's obligation to indemnify as set forth in this Agreement, unless that
indemnifying party's rights with respect to such Claim are thereby demonstrably
and materially prejudiced.
The obligations and liabilities of the parties hereto with respect to
their respective indemnities pursuant to this Agreement resulting from any Claim
shall be subject to the following terms and conditions:
(a) The indemnifying party shall have the right to undertake, by
counsel or other representatives of its own choosing, the defense of such Claim.
(b) In the event that the indemnifying party shall elect not to
undertake such defense, or within a reasonable time after notice of any such
Claim from the indemnified party shall fail to defend, the indemnified party
(upon further written notice to the indemnifying party) shall have the right to
undertake the defense, compromise or settlement of such Claim, by counsel or
other representatives of its own choosing, on behalf of and for the account and
risk of the indemnifying party (subject to the right of the indemnifying party
to assume defense of such Claim at any time prior to the settlement, compromise
or final determination thereof).
(c) Anything in this Section 8.3 to the contrary notwithstanding, (i)
if the indemnified party notifies the indemnifying party that the indemnified
party has concluded that a Claim may materially and adversely affect the
indemnified party other than as a result of money damages or other money
payments, the indemnified party shall have the right, at its own cost and
expense to participate in the defense, compromise or settlement of the Claim,
(ii) the indemnifying party shall not, without the indemnified party's written
consent, settle or compromise any Claim or consent to entry of any judgment that
does not include as an unconditional term thereof the giving by the claimant or
the plaintiff to the indemnified party of a release from all liability in
respect of such Claim, and (iii) in the event that the indemnifying party
undertakes defense of any Claim, the indemnified party, by counsel or other
representative of its own choosing and at its sole cost and expense, shall have
the right to consult with the indemnifying party and its counsel or other
representatives concerning such Claim and the indemnifying party and the
indemnified party and their respective counsel or other representatives shall
cooperate with respect to such Claim.
(d) Notwithstanding any other provision of this Section 8.3, the
indemnified party may at any time assume full control over the responsibility
for any Claim, by written notice to the indemnifying party releasing the
indemnifying party from any further indemnity obligation pursuant to this
Agreement with respect to said Claim.
(e) Notwithstanding any other provision of this Section 8.3, no claim
for indemnification may be made under this Article VIII as to liabilities or
obligations relating to or arising out of events occurring prior to the
effective date of the Closing or for any breach of the representations and
warranties contained or given pursuant to this Agreement and any instrument,
certificate or document delivered pursuant hereto after the expiration of one
year following the effective date of the Closing.
ARTICLE IX
GENERAL PROVISIONS
9.1 Survival of Representations and Warranties. All representations and
warranties made by the parties herein or in any schedule, certificate or exhibit
furnished in connection herewith shall survive for one year following the
effective date of the Closing and shall also survive and shall be unaffected by
(and shall not be deemed waived by) any investigation, audit, appraisal or
inspection at any time made by or on behalf of any party hereto.
9.2 Notices. All notices, demands, requests or other communications which
may be or are required to be given or made by either Seller or Purchaser to the
other pursuant to this Agreement shall be in writing and shall be hand delivered
or transmitted by certified mail, express overnight mail or delivery service,
telegram, telex or facsimile transmission to the parties at the following
addresses:
If to Seller:
Paine Webber Income Two Limited Partnership
c/o Second Income Properties, Inc.
265 Franklin Street
Boston, Massachusetts 02110
Attention: Paul G. Corrigan
Telecopy No.: (617) 345-8752
With a copy (which shall not constitute notice) to:
Hunton & Williams
Riverfront Plaza, East Tower
951 East Byrd Street
Richmond, Virginia 23219
Attention: Kenneth J. Alcott
Telecopy No.: (804) 788-8218
If to Purchaser:
Paragon Group L.P.
c/o Paragon Group Property Services, Inc.
7557 Rambler Road
Dallas, Texas 75231
Attention: William R. Cooper
Telecopy No.: (214) 891-2019
With a copy (which shall not constitute notice) to:
Paragon Group Property Services, Inc.
12400 Olive Boulevard
Suite 100
St. Louis, Missouri 63141
Attention: Gwen Knight
Telecopy No.: (314) 878-8724
And with a copy (which shall not constitute notice) to:
Stutzman & Bromberg,
A Professional Corporation
2323 Bryan Street
Suite 2200
Dallas, Texas 75201
Attention: Myron D. Stutzman
Telecopy No.: (214) 969-4999
If to Escrow Agent:
Title Insurers Agency, Inc.
226 South Meramec
Suite 100
St. Louis, Missouri 63105
Attention: Lawrence E. Kuder
Telecopy No.: (314) 721-2179
or such other address as the addressee may indicate by written notice to
the other parties.
Each notice, demand, request or communication which shall be given or
made in the manner described above shall be deemed sufficiently given or made
for all purposes at such time as it is delivered to the addressee (with the
delivery receipt, the affidavit of messenger or (with respect to a telex) the
answerback being deemed conclusive but not exclusive evidence of such delivery)
or at such time as delivery is refused by the addressee upon presentation.
9.3 GOVERNING LAW. THIS AGREEMENT, THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HERETO AND ANY CLAIMS OR DISPUTES RELATING THERETO SHALL BE GOVERNED BY
AND CONSTRUED UNDER THE LAWS OF THE STATE OF MISSOURI (BUT NOT INCLUDING THE
CHOICE OF LAW RULES THEREOF).
9.4 Benefit and Assignment. Neither Purchaser nor Seller shall assign this
Agreement, in whole or in part, whether by operation of law or otherwise,
without the prior written consent of the other party, which consent shall not be
unreasonably withheld, and any purported assignment contrary to the terms hereof
shall be null, void and of no force and effect; provided, however, that
Purchaser may assign this Agreement, without the consent of Seller, to any
person or entity controlled by or under common control with Purchaser, but any
such assignment shall not relieve Purchaser of its obligations hereunder.
This Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective successors and assigns as permitted
hereunder. No person or entity other than the parties hereto is or shall be
entitled to bring any action to enforce any provision of this Agreement against
any of the parties hereto, and the covenants and agreements set forth in this
Agreement shall be solely for the benefit of, and shall be enforceable only by,
the parties hereto or their respective successors and assigns as permitted
hereunder.
9.5 Severability. If any part of any provision of this Agreement or any
other agreement, document or writing given pursuant to or in connection with
this Agreement shall be invalid or unenforceable under applicable law, such part
shall be ineffective to the extent of such invalidity or unenforceability only,
without in any way affecting the remaining parts of such provisions or the
remaining provisions of said agreement so long as the economic and legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party.
9.6 Entire Agreement; Amendment. This Agreement contains the final and
entire agreement between the parties hereto with respect to the Transaction and
is intended to be an integration of all prior negotiations and understandings.
Seller and Purchaser shall not be bound by any terms, conditions, statements,
warranties or representations, oral or written, not contained or referred to
herein or therein. No amendment, change or modification of this Agreement shall
be valid unless the same is in writing and signed by the parties hereto.
9.7 No Waiver. No delay or failure on the part of any party hereto in
exercising any right, power or privilege under this Agreement or under any other
instrument or document given in connection with or pursuant to this Agreement
shall impair any such right, power or privilege or be construed as a waiver of
any default or any acquiescence therein. No single or partial exercise of any
such right, power or privilege shall preclude the further exercise of such
right, power or privilege. No waiver shall be valid against any party hereto
unless made in writing and signed by the party against whom enforcement of such
waiver is sought and then only to the extent expressly specified therein.
9.8 Counterparts. To facilitate execution, this Agreement may be executed
in as many counterparts as may be required; and it shall not be necessary that
the signatures of, or on behalf of, each party, or that the signatures of all
persons required to bind any party, appear on each counterpart; but it shall be
sufficient that the signature of, or on behalf of, each party, or that the
signatures of the persons required to bind any party, appear on one or more of
the counterparts. All counterparts shall collectively constitute a single
agreement. it shall not be necessary in making proof of this Agreement to
produce or account for more than a number of counterparts containing the
respective signatures of, or on behalf of, all of the parties hereto.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be duly executed and delivered on its behalf as of the date first above written.
SELLER:
PAINE WEBBER INCOME PROPERTIES
TWO LIMITED PARTNERSHIP
By: Second Income Properties, Inc.,
its general partner
By: /s/ Paul Corrigan
Name: Paul Corrigan
Title: Vice President
PURCHASER:
PARAGON GROUP L.P.
By: Paragon Group GP Holdings, Inc.
General Partner
By: /s/ Steven A. Means
Name: Steven A. Means
Title: Senior Vice President
ESCROW AGENT:
TITLE INSURERS AGENCY, INC.
By: /s/ Lawrence E. Kudor
Name: Lawrence E. Kudor
Title: Vice President
The undersigned hereby consents to the Transaction on the terms and
conditions set forth in the Agreement, waives any restrictions on the transfer
of the Partnership Interest as contemplated in the Agreement that might
otherwise apply under the terms of the Partnership Agreement and any right of
first refusal which the undersigned may have under the terms of the Partnership
Agreement.
PARAGON GENERAL PARTNER:
ST. LOUIS SPANISH TRACE COMPANY, L.P.
By: /s/ Lewis A. Levey
Lewis A. Levey,
Managing General Partner
<PAGE>
ASSIGNMENT OF PARTNERSHIP INTEREST
This ASSIGNMENT OF PARTNERSHIP INTEREST (this "Assignment") is made
as of October 1 1995 by PAINE WEBBER INCOME PROPERTIES TWO LIMITED PARTNERSHIP,
a Delaware limited partnership ("Seller").
WHEREAS, Seller is a general partner, and St. Louis Spanish Trace
Company, L.P., a Missouri limited partnership (the "Paragon General Partner"),
is the other general partner of Spanish Trace Associates, a Missouri general
partnership (the "Partnership"), pursuant to that certain Partnership Agreement
dated as of December 23, 1980, as subsequently amended (the "Partnership
Agreement");
WHEREAS, Seller and Paragon Group L.P., a Delaware limited
partnership ("Purchaser"), have entered into an Acquisition Agreement dated as
of October 17, 1995 (the "Acquisition Agreement"), pursuant to which Seller has
agreed to sell to Purchaser, and Purchaser has agreed to purchase from Seller,
all of Seller's partnership interest (the "Partnership Interest") in the
Partnership, all in accordance with and subject to the terms and conditions set
forth in the Acquisition Agreement.
WHEREAS, Purchaser has as of even date herewith assigned all its
right, title and interest to receive the Partnership Interest to Paragon Group -
Spanish Trace Partners, a Missouri general partnership ("Assignee").
NOW, THEREFORE, for and in consideration of the payment of the
Purchase Price (as defined in the Acquisition Agreement) pursuant to the
Acquisition Agreement, the receipt and sufficiency of which is hereby
acknowledged, and in further consideration of the mutual covenants and
agreements contained in the Acquisition Agreement, and pursuant to the terms of
the Acquisition Agreement, Seller does hereby bargain, sell, assign, transfer,
convey and deliver to Assignee, free and clear of all liens, encumbrances,
security interests and other claims, all of Seller's right, title and interest
in the Partnership Interest.
TO HAVE AND TO HOLD the same unto Assignee, its successors and
assigns, and Seller does further hereby withdraw as a partner of the
Partnership.
1. Seller fully and generally warrants to Assignee, its successors and
assigns, the right and title to the Partnership Interest.
2. This Assignment may be executed in any number of counterparts
which, when taken together, shall constitute a single, binding agreement.
3. Seller, Purchaser and Assignee agree to execute and deliver all
such other and further instruments and documents and take or cause to be taken
all such other and further action as may be reasonably necessary in order to
effect the transactions contemplated by this Assignment to effect and evidence
the conveyance of the Partnership Interest in accordance with the terms of this
Assignment and the Acquisition Agreement.
[SEE FOLLOWING PAGE FOR SIGNATURES]
IN WITNESS WHEREOF, the undersigned have caused this Assignment to be
duly executed as of the date first written above.
SELLER:
PAINE WEBBER INCOME PROPERTIES TWO
LIMITED PARTNERSHIP
By: Second Income Properties, Inc.,
General Partner
By:/s/ Paul Corrigan
Name: Paul Corrigan
Title: Vice President
Purchaser and Assignee hereby assume the obligations arising under
the Partnership Agreement with respect to the Partnership Interest arising from
and after the date hereof.
PURCHASER:
PARAGON GROUP L.P.
By: Paragon Group GP Holdings, Inc.,
General Partner
By: /s/ Steven A. Means
Name: Steven A. Means
Title: Senior Vice President
ASSIGNEE:
PARAGON GROUP - SPANISH TRACE PARTNERS
By: Paragon Group L.P.,
General Partner
By: Paragon Group GP Holdings,
Inc., General Partner
By: /s/ Lawrence E. Kudor
Name: Lawrence E. Kudor
Title: Vices President
The Paragon General Partner hereby consents to the transfer of
Seller's Partnership Interest in the Partnership to Assignee on the terms and
conditions set forth in the Acquisition Agreement and this Assignment, and
waives any restrictions on such transfer that might apply under the Partnership
Agreement. The Paragon General Partner hereby consents to the substitution of
Assignee into the Partnership as a general partner in the place and stead of
Seller.
PARAGON GENERAL PARTNER:
ST. LOUIS SPANISH TRACE COMPANY, L.P.
By: /s/ Lewis A. Levey
Lewis A. Levey,
Managing General Partner
<PAGE>
FORM 8-K
CURRENT REPORT
PAINE WEBBER INCOME PROPERTIES TWO LIMITED PARTNERSHIP
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PAINE WEBBER INCOME PROPERTIES
TWO LIMITED PARTNERSHIP
(Registrant)
By: /s/ Walter V. Arnold
Walter V. Arnold
Senior Vice President and
Chief Financial Officer
Date: December 28, 1995
<PAGE>
<TABLE>
<CAPTION>
BILATERAL SETTLEMENT STATEMENT
CLOSING DATE: 12/28/95 ESCROW NO: 00441-000075587-001
PROPERTY: TREAT COMMONS - PHASE II WALNUT CREEK, CA
SELLERS: BUYER/BORROWERS:
TCR WALNUT CREEK LIMITED PARTNERSHIP SECURITY CAPITAL PACIFIC TRUST
<S> <C> <C> <C> <C>
$12,124,500.00 Sales Price $12,124,500.00
Earnest Money Deposit $ 121,245.00
$ 7,295,529.97 PRINCIPAL BDALANCE -
PRUDENTIAL LOAN $ 7,295,529.97
EXTENSION DEPOSIT 12/21/95 $ 200,000.00
TRANSFER FROM PHASE I
CLOSING $ 5,008,130.22
INTEREST ON ESCROW DEPOSIT $ 538.30
Loan Charges to the Prudential Realty Group
$ 73,033.00 Assumption fee to
$ 338,938.00 BUYDOWN FEE
EXISTING LENDER FEES EXCLUDING
ASSUMPTION $ 10,000.00
$ 2,786.99 BALANCE OF LEGAL FEE DUE
STEEF, LEVITT & WEISS
$ 2,230.00 ENDORSEMENTS - FIRST AMERICAN
TITLE POLICY #763530
$ 2,655.95 COUNTY TRANSFER TAX (VALUE
LESS LIENS @ 1.10/1000) $2,655.95
Prorations and Adjustments
$ 1,708.31 County Taxes from 12/28/95 to 01/01/96$1,708.31
$ 388.62 DECEMBER SERVICE CONTRACTS $ 388.62
$62,722.00 SECURITY DEPOSITS $ 62,722.00
$ 1,122.39 PREPAID RENT - JANUARY 1996 $ 1,122.39
$ 16,816.00 RENTS @ 130,339.23 MO 12/28/95 - 1/1/96
$ 16,816.00
$151,566.25 Commission paid at Settlement
$ 750.00 Settlement or Closing fee $ 750.00
$ 4,485.50 Title Insurance to Chicago Title Company $ 4,485.50
ENDORSEMENTS TO TITLE POLICY $1,591.00
$ 100.00 Recording Fees $ 100.00
$ 7,500.00 Survey to
PREPAID INTEREST TO PRUDENTIAL
12/29/ - 1/14 @7.50% $25,838.30
$24,229.24 PREPAID ITEREST TO PRUDENTIAL
12/15 - 12/28 @ 8.54%
$7,984,465.29 TOTAL DEBITS/CHARGES $12,172,017.68
$12,126,596.93TOTAL CREDITS $12,706,103.88
$4,142,131.64 Net Proceeds to Seller
Net Refund to Buyer $ 534,086.20
APPROVED:
TCR Walnut Creek Limited Partnership Security Capital Pacific Trust
By: /s/ Peter F. Sullivan By:
Date: 12/28/95 Date:
</TABLE>
