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) September 12, 1995
PAINE WEBBER GROWTH PROPERTIES TWO LP
(Exact name of registrant as specified in its charter)
Delaware 0-12085 04-2798594
(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)
FORM 8-K
CURRENT REPORT
PAINE WEBBER GROWTH PROPERTIES TWO LP
ITEM 2 - DISPOSITION OF ASSETS
Hudson Apartments - Tyler, Texas
Disposition Date - September 12, 1995
On September 12, 1995, the Partnership sold its joint venture interest in the
Hudson Apartments, located in Tyler, TX, for $350,000 to its co-venture partner.
While such proceeds are substantially less than the amount of the Partnership's
original investment, of $2,600,000, management believes that the offer is
reflective of the current fair market value of the Partnership's interest. In
the mid-to-late 1980s, the Hudson joint venture was unable to meet its
contractual debt service requirements. As a result, the venture entered into
several debt modifications aimed at alleviating the need for the Partnership to
fund cash flow deficits. In October 1990, in order to take advantage of the
discounted debt pay-off offer from the existing mortgage lender and to avoid
possibly losing the property through foreclosure proceedings, the venture
admitted a new partner who contributed the $600,000 necessary to complete the
proposed refinancing transaction. Although this recapitalization saved the
property from likely foreclosure, it resulted in a 50% dilution of the
Partnership's interest and created a 15% preferred return on the new partner's
$600,000 investment. Based on current market factors, management does not
foresee significant appreciation in the value of the Partnership's interest in
the Hudson joint venture in the near-term. Furthermore, since the venture's new
mortgage financing was expected to have a five-year prohibition on prepayment,
and thereafter any sale of the property would require the consent of the co-
venturer, management believed that it was an opportune time to sell the
Partnership's investment.
ITEM 7 - FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements: None
(b) Exhibits:
(1) Hudson Partners Agreement For Redemption of Partnership Interest
between PaineWebber Hudson Partners, LTD., Hudson Associates, LTD.,
Horn-Barlow Partnership and Woodhaven Investors, Inc.
(2) First Amendment to the Amended and Restated Partnership Agreement of
Hudson Partners between PaineWebber Hudson Partners, LTD., Hudson
Associates, LTD., Horn-Barlow Partnership and Woodhaven Investors,
Inc.
Exhibit 1
HUDSON PARTNERS
AGREEMENT FOR REDEMPTION OF PARTNERSHIP INTEREST This agreement is
entered into September 12, 1995, among HUDSON ASSOCIATES,
LTD., a Texas limited partnership ("HA"); PAINEWEBBER HUDSON PARTNERS, LTD., a
Texas limited partnership ("PW"); HORN-BARLOW PARTNERSHIP, a Texas general
partnership ("Horn-Barlow"), and WOODHAVEN INVESTORS, INC., a Texas corporation
("Woodhaven").
HA, PW, Horn-Barlow, and Woodhaven are the four partners in Hudson
Partners, a Texas general partnership ("HP"), created by an amended and restated
Partnership Agreement dated October 30, 1990 (the "Agreement"). Horn-Barlow
and Woodhaven were admitted as partners in HP with the consent of HA and PW on
September 6, 1995.
PW no longer wishes to be a member of HP, and the other partners in HP have
agreed that HP will redeem the partnership interest of PW. Accordingly, HP
hereby agrees to redeem the entire partnership interest of PW in HP for the sum
of $350,000.00 cash paid to PW by HP. PW agrees to accept such sum in complete
redemption of PW's partnership interest in HP.
HA, Horn-Barlow, and Woodhaven agree that PW, as of September 12, 1995,
shall have no further obligations to HA, Horn-Barlow, or Woodhaven under the
Agreement, and HP, Horn-Barlow, and Woodhaven waive forever, on behalf of the
Partnership, themselves, and all successors-in-interest, any claim, known or
unknown, against PW that may arise or has arisen, directly or indirectly, as a
result of PW's ownership of a partnership interest in Hudson Partners.
The apartment project in Tyler, Texas owned by HP is being refinanced, and
the closing (the "Closing") of such refinancing is scheduled to take place prior
to September 15, 1995. The redemption will occur immediately prior to the
Closing, and the payment to PW will be made concurrently with the funding of the
refinanced loan. The refinancing is being closed in escrow with Ticor Land
Title Company (the "Title Company") in Dallas, Texas. HP shall cause the Title
Company to pay to PW the sum of $350,000.00 in good funds at the Closing.
The parties agree that no further documentation of the redemption is
required and that the interest of PW in Hudson Partners is redeemed effective
immediately prior to the Closing, subject to the condition subsequent that the
title company pay to PW $350,000.00 at the Closing.
PAINEWEBBER HUDSON PARTNERS, LTD HUDSON ASSOCIATES, LTD.
By: Paine Webber Growth Properties Two LP
a Delaware limited partnership,
General Partner By:/s/ C. Jay Barlow
C. Jay Barlow, General Partner
By: Second PW Growth Properties, Inc.
Limited Partner
By: /s/ Stephen D. Brady By:/s/ Gerald Horn
By: Stephen D. Brady By:Gerald Horn, General Partner
Vice President Vice President
HORN-BARLOW PARTNERSHIP WOODHAVEN INVESTORS, INC..
a Texas general partnership a Texas Corporation, General
Partner
By: /s/ C. Jay Barlow By:/s/ Michael H. Monier
C. Jay Barlow, General Partner Michael H. Monier, Vice President
By:/s/ Gerald Horn
Gerald Horn, General Partner
Exhibit 2
FIRST AMENDMENT TO THE
AMENDED AND RESTATED PARTNERSHIP AGREEMENT OF
HUDSON PARTNERS
This First Amendment to the Amended and Restated Partnership Agreement of
Hudson Partners (the "First Amendment") is entered into September 6, 1995, among
PAINEWEBBER HUDSON PARTNERS, LTD., a Texas limited partnership ("PW") HUDSON
ASSOCIATES, LTD., a Texas limited partnership ("HA"), HORN-BARLOW PARTNERSHIP,
a Texas general partnership ("Horn-Barlow") , and WOODHAVEN INVESTORS, INC., a
Texas corporation ("Woodhaven").
RECITALS:
A. HA and PW entered into an Amended and Restated Partnership Agreement
of Hudson Partners (the "Partnership Agreement") on October 30, 1990, which
governs the organization and operation of Hudson Partners, a Texas general
partnership (the "Partnership"). B. HA and PW wish to admit additional
partners to the Partnership, and Horn-Barlow and Woodhaven wish to become
partners in the Partnership.
C. After the admission of the new partners, PW desires to withdraw from
the Partnership and wants the partnership to redeem the partnership interest of
PW in the Partnership, and the parties hereto have agreed that such redemption
and withdrawal shall take place immediately following the execution of this
agreement.
AGREEMENT:
In consideration of the mutual agreements contained herein, the parties
agree as follows:
1. Horn-Barlow and Woodhaven are hereby admitted to the Partnership as
additional partners. Each of them has contributed $100.00 to the capital of the
Partnership.
2. The Partnership Agreement is amended as follows, such amendments to
take effect immediately and automatically upon the redemption of PW's
partnership interest:
a. The terms defined above shall have the same meaning in the
Partnership Agreement. Certain other terms used in the Partnership
Agreement are amended to mean the following:
i. The term "allocated between the Partners" shall mean
"allocated among the Partners."
ii. The term "allocated equally between the Partners" shall mean
"allocated among the Partners in the Sharing Ratio."
iii. The term "approved by both Partners" shall mean "approved by
all Partners."
iv. The term "both Partners" shall mean "all Partners."
v. The term "either Partner" shall mean "any Partner."
vi. The term "other Partner" shall mean "other Partners."
vii. The term "Second Partner" shall mean "other Partners."
b. Wherever the Partnership Agreement requires the approval by PW,
it is amended to require the approval of HA.
c. The following new definition is added to the Partnership
Agreement: "'Sharing Ratio' shall mean Hudson Associates, 99.0%; Horn-
Barlow, 0.5%; and Woodhaven, 0.5%."
d. Section 3.01(a) is amended by adding the following sentence:
"Horn-Barlow and Woodhaven have each contributed $100.00 to the capital of
the Partnership concurrently with the execution of the First Amendment."
e. Section 3.01(b) is amended in its entirety to read as follows:
"Capital contributions in excess of the amounts provided in Section 3.01(a)
shall be required only if Approved by the Partners and, unless otherwise
Approved by the Partners, shall be made by the partners in the Sharing
Ratio."
f. Section 4.02(3) is amended to read as follows: "any remaining
amounts, to the Partners in the Sharing Ratio."
g. Section 5.01 is amended by deleting subsection (5), renumbering
subsection (6) as (5), and amending it to read as follows: "any remaining
amounts, to the Partners in the Sharing Ratio."
h. Section 6.02(a)(iii) is amended to read as follows: "Third, all
remaining items shall be allocated among the Partners in the Sharing
Ratio."
i. Section 6.02(d) is amended as follows:
i. Subsection (ii) is deleted.
ii. Subsection (iii) is renumbered (ii) and amended to read as
follows: "Second, to any of the Partners in the amount, if any,
necessary to cause their respective Capital Account balances, when
reduced by the amounts described in subparagraph (i) of the this
Section 6.02(d), to be in the Sharing Ratio."
iii. Subsection (iv) is renumbered (iii) and amended to read as
follows: "Third, among the Partners in the Sharing Ratio."
j. Section 6.02(e) is amended as follows:
i. Subsection (i) is amended to read as follows: "First, if the
Capital Accounts of all Partners have positive balances greater than
their respective amounts described in Sections 6.01(d)(i) and (ii)
hereof, and treating such balances as being reduced by such respective
amounts for all other purposes of this Section 6.02(e)(i), among the
Partners in such a manner as will cause their respective positive
Capital Account balances to be in the Sharing Ratio (as nearly as is
possible) until the balances are reduced to zero;"
ii. Subsection (ii) is deleted.
iii. Subsection (iii) is renumbered (ii) and amended to read as
follows: "Next, to HA until its positive Capital Account balance is
reduced to zero; and"
iv. Subsection (iv) is renumbered (iii) and amended to read as
follows: "Last, among the Partners in the Sharing Ratio."
k. Section 7.04(a) is amended by adding the following sentence at
the end: "If more than one of the other Partners wishes to purchase such
interest, they shall be each entitled to purchase a portion of the interest
in proportion to their Sharing Ratios."
l. Section 8.02 is amended by changing the names and addresses for
the giving of notices to the following:
i. If to HA at:
Hudson Associates
8333 Douglas Avenue, Suite 1330
Dallas, Texas 75225
Attention: C. Jay Barlow
with a copy to:
Lewis T. Sweet, Jr.
Sweet & Brousseau
2515 McKinney Avenue
Suite 800
Dallas, Texas 752501
ii. if to Horn-Barlow:
Horn-Barlow Partnership
8333 Douglas Avenue, Suite 1330
Dallas, Texas'
Attention: C. Jay Barlow
with a copy to:
Lewis T. Sweet, Jr.
Sweet & Brousseau
2515 McKinney Avenue McKinney Avenue
Suite 800
Dallas, Texas 752501
iii. if to Woodhaven:
Woodhaven Investors, Inc.
181 Maple
Stowe, Vermont 05672
Attention: Edward D. Herrick
3. As of December 31, 1994, the Partnership's books contained a
consulting fee liability for $33,000 payable to an affiliate of Crow-Western
#7- Tyler Partners, Ltd., a former partner of the Partnership, which liability
was payable solely from distributions by the Partnership no later than April 1,
1990. Because of the applicable statute of limitations, the liability is no
longer collectible and, accordingly, to the extent the Partnership shall receive
debt forgiveness with respect to such liability, any income resulting from the
debt forgiveness shall be allocated 100% to PW. In addition, as of December 31,
1994, the Partnership's books contained a "partners' notes" liability in the
principal amount of $236,987 and $156,753 for accrued interest thereon, which
liability was payable solely from distributions by the Partnership ("Liability
One") and (ii) a "partners' notes" liability in the principal amount of $168,350
and $85,910 for accrued interest thereon, which liability was payable solely
from distributions by the Partnership ("Liability Two"). PW hereby assumes
Liability One and Liability Two, to the extent due and payable. Such assumption
shall be treated on the books of the Partnership as a contribution to the
capital of the Partnership. PW shall hold the Partnership harmless from all
claims by any party for the payment of the Deferred Debt.
4. As amended hereby, the Partnership Agreement shall continue in full
force and effect.
5. This First Amendment may be executed in multiple counterparts, all of
which together shall create one instrument, and it is not necessary that all
parties execute the same counterpart.
Executed as of the date first above mentioned.
PAINEWEBBER HUDSON PARTNERS, LTD.,
a Texas limited partnership
By: PaineWebber Growth Properties Two LP, a
Delaware limited partnership,
General Partner
By: Second PW Growth Properties, Inc.,
General Partner
By:/s/ Stephen Brady
Stephen Brady
Vice President
HUDSON ASSOCIATES, LTD.,
a Texas limited partnership
By:/s/ C. Jay Barlow
C. Jay Barlow, General Partner
By:/s/ Gerald Horn
Gerald Horn, General Partner
HORN-BARLOW PARTNERSHIP By WOODHAVEN INVESTORS, INC..
a Texas general partnership a Texas Corporation, General Partner
By:/s/ Gerald Horn By:/s/ Michael H. Monier
Gerald Horn, General Partner Michael H. Monier, Vice President
By:/s/ C. Jay Barlow
C. Jay Barlow, General Partner
FORM 8-K
CURRENT REPORT
PAINE WEBBER GROWTH PROPERTIES TWO LP
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 GROWTH PROPERTIES TWO LP
(Registrant)
By:/s/ Walter V. Arnold
Walter V. Arnold
Senior Vice President and
Chief Financial Officer
Date: September 20, 1995
