UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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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 5, 2000
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PAINE WEBBER INCOME PROPERTIES SIX LIMITED PARTNERSHIP
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(Exact name of registrant as specified in its charter)
Delaware 0-13129 04-2829686
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(State or other jurisdiction) (Commission (IRS Employer
of incorporation File Number) Identification No.)
265 Franklin Street, Boston, Massachusetts 02110
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 439-8118
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(Former name or address, if changed since last report)
<PAGE>
FORM 8-K
CURRENT REPORT
PAINE WEBBER INCOME PROPERTIES SIX LIMITED PARTNERSHIP
ITEM 2 - Disposition of Assets
------------------------------
Mall Corners Shopping Center - Gwinnett County, Georgia
Disposition Date - December 5, 2000
On December 5, 2000, the Partnership completed the disposition of its only
remaining real estate asset, the Mall Corners Shopping Center, a 304,000 square
foot retail center located in suburban Atlanta, Georgia. As previously reported,
the Partnership had been continuing to explore its strategic alternatives for
the Mall Corners Shopping Center investment and had continued marketing efforts
for the sale of the property. While the Partnership received interest from
several prospective buyers over the last 15 months to purchase the property, and
worked diligently through protracted negotiations with these prospective buyers,
none were willing to close on a sale transaction. Further, based on the current
leasing status of the Shopping Center, which was only 50% occupied as of
September 30, 2000, the property's operations were insufficient to meet its
mortgage loan obligation and the loan had gone into default as of November 1,
2000. Subsequently, the lender initiated foreclosure proceedings on November 6,
2000. However, shortly before the anticipated completion of foreclosure
proceedings by the lender, negotiations were reopened among the Partnership, its
joint venture partner and the Mall Corners' mortgage lender. As a result, and as
described further below, a foreclosure action was avoided and a disposition of
the Partnership's Mall Corners investment occurred on December 5, 2000.
While extensive efforts to sell Mall Corners were ongoing throughout
fiscal 2000, the Partnership was notified in August 2000 that the former theater
tenant, which had continued to pay rent under its lease obligation through July
2000, had filed for Chapter 11 bankruptcy protection on August 7, 2000. As a
result of the bankruptcy hearing held on August 30, 2000, the former theater
tenant was released from its lease obligation at Mall Corners Shopping Center
effective August 31, 2000 and did not make a full rent payment in August. The
termination of this lease agreement significantly reduced the property's
operating income. Consequently, for the months of September and October, the
property experienced shortfalls in cash flow, which the Partnership funded in
anticipation of a sale of the property to a third-party. By the Partnership
doing so, the property remained current on its mortgage loan obligation to
effect a potential assumption of the mortgage loan by the purchaser of the
property. Before continuing to fund any additional cash flow shortfalls at the
property, the Partnership carefully evaluated current operations at Mall Corners
as well as alternative disposition strategies. The Center's reduced cash flow,
which was insufficient to meet its mortgage loan obligation, negatively impacted
the marketability of the property and impeded the Partnership's ability to
negotiate an economically viable sale of the property. Further, it was
determined that efforts to re-lease and re-position the Center in the local
retail market for a potential sale opportunity in calendar year 2001 would have
required substantial commitments of both capital and time necessary to effect
improvement at the property, and there were no assurances that such commitments
would have proven successful. In consideration of the property's poor operating
performance and the uncertainty of a sale to a third-party, and in an effort to
preserve remaining cash reserves, the Partnership declined to fund additional
shortfalls required to meet the property's mortgage loan obligation.
Following the Partnership's conclusion that it was in the best interests
of the Limited Partners to preserve the Partnership's remaining cash reserves
and to discontinue funding Mall Corners' cash flow shortfalls, the Partnership
commenced discussions with the Mall Corners' lender in an attempt to facilitate
deeding the property back to the lender. In addition, the Partnership continued
to pursue with the lender the possible sale of the property. However, due to the
loan default occurring in November, the lender initiated foreclosure proceedings
on November 6, 2000, which were expected to be completed in early December. The
Partnership believed that, due to the property's current leasing status, Mall
Corners' current fair market value was approximately equal to the outstanding
balance of the first mortgage loan, and that the likelihood of any significant
near-term improvement in such value was remote. For that reason, the Partnership
was prepared to let the lender complete a foreclosure of the property. Shortly
before the anticipated completion of foreclosure proceedings by the lender, the
Partnership, its joint venture partner and the lender entered into negotiations
regarding the disposition of the Mall Corners investment. The joint venture
partner had indicated a willingness to invest the time and capital necessary to
attempt a re-leasing of the property and had threatened to interfere with the
Partnership's plans to allow the property to be foreclosed upon by the lender.
On December 5, 2000 an agreement for the assignment and transfer of the
Partnership's interest in Mall Corners Shopping Center was reached among the
three parties, whereby the joint venture partner cured the mortgage loan
default, and the Partnership assigned and transferred its ownership interest in
Mall Corners to an affiliate of the joint venture partner, which affiliate then
also assumed the property's mortgage loan. In exchange for transferring its
interest in the property, the Partnership received from the lender a release
from liabilities arising from and after the transfer and received from the
affiliate of the joint venture partner indemnification for past and future
liabilities and a payment of $350,000. This payment was a return of the
Partnership's June 2000 payment made to the joint venture partner in return for
the full and sole authority over all matters related to the property. As a
result, the disposition of the Mall Corners investment was completed on December
5, 2000.
As a result of the disposition of the Partnership's interest in the Mall
Corners Shopping Center, its remaining real estate investment, a Final
Distribution of $3,864,000, or $64.40 per original $1,000 investment, is
scheduled to be paid on December 20, 2000 to unit holders of record as of the
December 5, 2000 disposition date. This Final Distribution represents the
Partnership's remaining reserves after paying liquidation-related expenses. A
formal liquidation of the Partnership is being finalized and is expected to be
completed by December 29, 2000.
ITEM 7 - Financial Statements and Exhibits
------------------------------------------
(a) Financial Statements: None
(b) Exhibits:
(1) Assignment and Assumption of Partnership Interest, Release and
Indemnification by and between Mall Corners, Paine Webber Income
Properties Six Limited Partnership and Glenwood Lotz Mall Corners
Holding Company, LLC, dated December 5, 2000.
(2) Second Amendment to Statement of Partnership - Gwinnett Mall Corners
Associates - dated December 4, 2000.
(3) Loan Assumption Agreement - Transfer of Partnership Interest - dated
December 4, 2000.
<PAGE>
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 SIX LIMITED PARTNERSHIP
(Registrant)
By: Sixth Income Properties Fund, Inc.
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By: /s/ Walter V. Arnold
--------------------
Walter V. Arnold
Senior Vice President and
Chief Financial Officer
Date: December 15, 2000
<PAGE>
ASSIGNMENT AND ASSUMPTION OF PARTNERSHIP INTEREST,
RELEASE AND INDEMNIFICATION
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This Assignment and Assumption of Partnership Interest, Release and
Indemnification ("Agreement") entered into by and among MALL CORNERS III, LTD.,
a Georgia limited partnership ("Mall Corners III"), Mall Corners II, Ltd., a
Georgia limited partnership ("Mall Corners II"), Mall Corners, Ltd., a Georgia
limited partnership ("Mall Corners I"), Center Developers Incorporated, a
Georgia corporation ("CDI") and Charles A. Lotz, Jr. (individually, "Lotz" and
collectively, with Mall Corners III, Mall Corners II, Mall Corners I and CDI,
"Mall Corners"), PAINEWEBBER INCOME PROPERTIES SIX LIMITED PARTNERSHIP, a
Delaware limited partnership ("PaineWebber") and GLENWOOD LOTZ MALL CORNERS
HOLDING COMPANY, LLC, a Georgia limited liability company ("Glenwood").
W I T N E S S E T H:
-------------------
That the undersigned parties, Mall Corners and PaineWebber (each
individually a "Party" and collectively the "Parties"), hereby agree as follows
and hereby take the actions described below:
I. References and Recitals
A. Effective as of August 28, 1985, Gwinnett Mall Corners Associates (the
"Venture") was formed by the execution of that certain Partnership Agreement of
Gwinnett Mall Corners Associates (the "Original Joint Venture Agreement"),
between MCIII, on the one hand, and PaineWebber, on the other hand. In
connection with the formation of the Venture, a Statement of Partnership was
filed with the Records of Gwinnett County on August 29, 1985 (the "Original
Statement of Partnership").
B. The Venture acquired and owns a certain tract of land situated at
Venture Drive and Pleasant Hill Road in Gwinnett County, Georgia, more
particularly described in Exhibit A, which is attached hereto and incorporated
by reference herein for all purposes (the "Land"), together with improvements
thereon (the "Improvements"), generally known as "Mall Corners Shopping Center."
C. The Venture obtained a loan in the original principal sum of
$20,000,000 from Wells Fargo Bank, National Association, which loan was secured
by deed to secure debt dated December 1, 1995 on the Mall Corners Shopping
Center (the "Loan"). The Loan was subsequently assigned to Metropolitan Life
Insurance Company ("MetLife").
D. The Original Joint Venture Agreement was amended by an agreement among
Mall Corners and PaineWebber dated June 23, 2000 (such Original Joint Venture
Agreement, as amended as aforesaid, being referred to herein as the "Amended
Joint Venture Agreement"). Except as otherwise herein provided, all capitalized
terms defined in the Amended Joint Venture Agreement shall have the same
meanings when used herein as are ascribed to them respectively in the Amended
Joint Venture Agreement. Also in connection with the Amended Joint Venture
Agreement, the Original Statement of Partnership was amended by First Amendment
to Statement of Partnership for Gwinnett Mall Corners Associates which was filed
with the records of Gwinnett County on June 28, 2000 (such Original Statement of
Partnership, as amended as aforesaid, being referred to herein as the "Amended
Statement of Partnership").
E. PaineWebber has agreed to sell and convey to Lotz the entirety of its
interest in the Venture heretofore and now owned by PaineWebber, and Lotz has
agreed, with the consent of Mall Corners, to purchase and acquire such interest
from PaineWebber for mutually agreed consideration, and in connection therewith,
assume all obligations of PaineWebber and its affiliates under the Loan. Lotz
and Mall Corners are simultaneously contributing the Mall Corners Shopping
Center to Glenwood.
II. Assignment of Partnership Interest
PaineWebber, as Assignor, for and in consideration of the sum of $350,000
and other good and valuable consideration to Assignor in hand paid by Lotz, as
Assignee,
HAS GRANTED, SOLD, TRANSFERRED, ASSIGNED, and CONVEYED, and does hereby
GRANT, SELL, TRANSFER, ASSIGN, and CONVEY unto Assignee, its entire interest in
the Venture, such interest being the entire interest that was vested in Assignor
under the Original Joint Venture Agreement, which interest is still vested in
Assignor as of this date (the "Assigned Interest").
The Assigned Interest which is hereby conveyed expressly includes, inter
alia, all profits, losses, income, deductions, credits, gains, entitlements,
rights to Capital Proceeds, Net Cash Flow and all other distributions,
preferences, and other benefits which accrue to the Assigned Interest.
TO HAVE AND TO HOLD the Assigned Interest unto Assignee, its successors
and assigns forever. Assignor does hereby warrant and agree to forever defend
title to the Assigned Interest unto Assignee, its successors and assigns,
against every person whomsoever lawfully claiming or to claim the same or any
part thereof by, through, or under Assignor, but not otherwise. Assignor further
represents and warrants to Assignee that: (i) Assignor is the only party having
an ownership interest in the Assigned Interest; (ii) Assignor has not heretofore
sold, transferred, granted, assigned, conveyed, encumbered, pledged, or
hypothecated the Assigned Interest or any part thereof; (iii) Assignor has the
full fight, power, and authority to execute this Assignment; (iv) all requisite
partnership and corporation actions and consents necessary to authorize Assignor
to execute this Assignment have been taken and obtained; and (v) the joinder of
no other person or entity or the obtaining of consent or approval of no other
person, entity, or governmental authority is necessary to effectively grant,
sell, transfer, assign, and convey the Assigned Interest.
Upon the execution of this Assignment, Assignor retains no right, title,
or interest in or to the Venture or in any of the assets of the Venture,
including, but not limited to, the Land, the Improvements and the other assets
of the Venture; inasmuch as all such right, title, and interest are hereby
expressly conveyed to Assignee, Assignor after the Effective Date of this
Assignment expressly disclaims any interest in or to any funds of the Venture.
Assignee hereby assumes and agrees to perform all duties and obligations
of a Venturer owning the Assigned Interest in the Venture, in accordance with
the terms and provisions of the Amended Joint Venture Agreement which duties and
obligations are continuing and/or accrue from and after the Effective Date
hereof.
III. Release and Indemnity
A. Mall Corners and the Venture hereby release PaineWebber, its
affiliates, their respective partners, officers, directors, shareholders or
agents from all existing and future claims, demands and causes of action, known
or unknown, pending or not pending, threatened or not threatened, whether in
contract or in tort, whether based on common law or any judicial decision,
statute, regulation or ruling, including, without limiting the generality of the
foregoing claims for losses and damages of any kind (including actual damages,
exemplary and punitive damages, penalties, and consequential damages) arising
from any event, occurrence, fact or condition which has occurred from the
beginning of time until the date hereof, which have been or could have been
asserted in any court or forum in any jurisdiction by Mall Corners or the
Venture; provided, however, that nothing herein releases PaineWebber from any of
its representations or warranties under this instrument.
B. Mall Corners hereby agrees to indemnify, defend and hold harmless
PaineWebber, its affiliates, their respective partners, officers, directors,
shareholders or agents from and against any and all loss, cost, liability, claim
or action arising from any event, occurrence, fact or condition related to the
Venture, the Loan or Mall Corners Shopping Center, other than those due solely
to the gross negligence or intentional misconduct of PaineWebber of which Mall
Corners has no knowledge as of the Effective Date.
C. Glenwood hereby agrees to indemnify, defend and hold harmless
PaineWebber, its affiliates, their respective partners, officers, directors,
shareholders or agents from and against any and all loss, cost, liability, claim
or action arising from any event, occurrence, fact or condition related to (i)
any obligation which PaineWebber may have to Met Life under the nonrecourse
guaranty and environmental indemnity agreement issued by PaineWebber in
connection with the Loan, other than those due solely to the gross negligence or
intentional misconduct of PaineWebber of which Glenwood has no knowledge as of
the Effective Date and/or (ii) for breach of its covenants hereunder. Glenwood
hereby covenants and agrees that it will not sell or refinance the Mall Corners
Shopping Center involving the assumption of the Met Life Loan in a manner which
would leave any of PaineWebber's indemnity obligations to Met Life outstanding,
unless a credit worthy entity, acceptable to PaineWebber in its sole, but
reasonable discretion, indemnifies, defends and holds PaineWebber harmless from
any liability thereunder.
IV. General Provisions
A. Mall Corners will be responsible for its own legal fees and other costs
and expenses incurred by it in connection with this transaction, and will
indemnify PaineWebber for any liability for such fees, costs or expenses.
B. PaineWebber will be responsible for its own legal fees and other costs
and expenses incurred by it in connection with this transaction, and will
indemnify Mall Corners for any liability for such fees, costs or expenses.
C. In addition, Mall Corners will be responsible for legal fees of the
Venture and other costs and expenses of the Venture (including excise, transfer
or any other taxes assessed, if any, on the transfer of the Assigned Interests)
which fees, costs and expenses were incurred by Mall Corners on behalf of the
Venture.
D. PaineWebber and Mall Corners will each cooperate at the request of the
other of such parties (each party to bear its own related costs and expenses) in
the execution and filing of such certificates and documents (including, without
limiting the generality of the foregoing, withdrawal of assumed name
certificates, if applicable) as may be necessary or appropriate to evidence or
confirm the intent of this Agreement.
E. The obligations of PaineWebber hereunder shall be binding only on
PaineWebber to the extent of the consideration paid by Lotz for the Assigned
Interest, and neither Lotz, Mall Corners, the Venture nor anyone claiming by,
through or under Lotz, Mall Corners or the Venture shall be entitled to obtain
any judgment extending liability beyond such consideration or creating personal
liability beyond such consideration on the part of the officers, directors,
shareholders, or agents of PaineWebber or any of their successors.
F. With respect to the assets of the Venture, Lotz acknowledges that, as
an affiliate of MCIII, it is familiar with the condition of the assets of the
Venture and has had the opportunity to conduct a due diligence of the
investigation of the assets of the Venture. With respect to physical condition,
Lotz accepts the conveyance of the assets of the Venture, in their current
condition "as-is" and "with all faults".
G. Mall Corners further acknowledges that neither PaineWebber nor its
partners, employees, agents or representatives have made any representation or
warranty as to the condition of the Assigned Interest or the assets of the
Venture except as expressly provided in this Agreement.
H. Mall Corners agrees to cooperate, and cause its auditors to cooperate,
with PaineWebber in preparing financial reporting information relating to the
period from January 1, 2000 through the Effective Date necessitated by
PaineWebber's SEC reporting requirements or tax returns, including without
limitation the Form 1065 U.S. Partnership Return of Income and/or PaineWebber's
Federal Schedule K-1; provided that PaineWebber shall be responsible for the
fees and expenses of the aforesaid auditors in performing the above-described
services.
<PAGE>
EXECUTED in multiple counterparts, each of which shall have the force and
effect of an original, this the 5th day of December, 2000 (the "Effective
Date").
MALL CORNERS III, LTD., a Georgia limited
partnership
By: Mall Corners II, Ltd., its sole general
partner
By: Center Developers Incorporated, a
Georgia corporation, a general
partner
By: /s/ Charles A. Lotz, Jr.
-------------------------
Charles A. Lotz, Jr.
President
By: /s/ Charles A. Lotz, Jr.
-------------------------
Charles A. Lotz, Jr., a general
partner
<PAGE>
MALL CORNERS II, LTD., a Georgia limited
partnership
By: Center Developers Incorporated, a Georgia
corporation, a general partner
By: /s/ Charles A. Lotz, Jr.
-------------------------
Charles A. Lotz, Jr.
President
By: /s/ Charles A. Lotz, Jr.
-------------------------
Charles A. Lotz, Jr., a general partner
MALL CORNERS, LTD., a Georgia limited partnership
By: Center Developers Incorporated, a Georgia
corporation, a general partner
By: /s/ Charles A. Lotz, Jr.
-------------------------
Charles A. Lotz, Jr.
President
By: /s/ Charles A. Lotz, Jr.
-------------------------
Charles A. Lotz, Jr., a general partner
CENTER DEVELOPERS INCORPORATED, a Georgia
corporation
By: /s/ Charles A. Lotz, Jr.
-------------------------
Charles A. Lotz, Jr.
President
<PAGE>
/s/ Charles A. Lotz, Jr.
------------------------
Charles A. Lotz, Jr., individually
"Mall Corners"
<PAGE>
PAINEWEBBER INCOME PROPERTIES SIX LIMITED
PARTNERSHIP, a Delaware limited partnership
By: SIXTH INCOME PROPERTIES FUND, INC., a
Delaware corporation, its general partner
By: /s/ Walter V. Arnold
----------------------
Name: Walter V. Arnold
Title: SVP & CFO
"PaineWebber"
<PAGE>
GWINNETT MALL CORNERS ASSOCIATES
By: Mall Corners III, Ltd., a Georgia limited
partnership, a general partner
By: Mall Corners II, Ltd., a Georgia limited
partnership, sole general partner
By: /s/ Charles A. Lotz, Jr.
------------------------
Charles A. Lotz, Jr.
By: Center Developers Incorporated, a
Georgia corporation, a general partner
By: /s/ Charles A. Lotz, Jr.
------------------------
Charles A. Lotz, Jr.
By: /s/ Charles A. Lotz, Jr.
-------------------------
Charles A. Lotz, Jr., a general
partner
"Venture"
<PAGE>
"Glenwood" hereby executes this Agreement in multiple counterparts, each of
which shall have the force and effect of an original as of the Effective Date
hereof for the sole purpose of agreeing to Section III C. hereof.
GLENWOOD LOTZ MALL CORNERS HOLDING COMPANY, LLC,
a Georgia limited liability company
By: Glenwood Mall Corners Company, L.L.C., a
North Carolina limited liability company,
member and manager
By: /s/ John S. Amols
-----------------
John S. Amols, Manager
<PAGE>
SECOND AMENDMENT TO
STATEMENT OF PARTNERSHIP
GWINNETT MALL CORNERS ASSOCIATES
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GWINNETT MALL CORNERS ASSOCIATES (hereinafter referred to as the
Partnership), a general partnership created pursuant to the Laws of the State of
Georgia by Partnership Agreement dated August 28, 1985 (together with any
amendments thereto, hereinafter referred to as the Agreement) and maintaining
its principal place of business at 2472 Cobb Parkway, Smyrna, Georgia 30080,
originally comprised of (i) Paine Webber Income Properties Six Limited
Partnership, a Delaware limited partnership (hereinafter referred to as PWIP6)
with an office address at c/o Paine Webber Properties Incorporated, 265 Franklin
Street, Boston, Massachusetts 02110, and (ii) Mall Corners III, Ltd., a Georgia
limited partnership (hereinafter referred to as Mall Corners III) with an office
address at 2472 Cobb Parkway, Smyrna, Georgia 30080, desires to amend its
Statement of Partnership and publishes the following Second Amendment to
Statement of Partnership, as contemplated by the Uniform Partnership Act,
O.C.G.A. Section 14-8-1 et seq. (hereinafter referred to as the Act):
1. The name of the Partnership is GWINNETT MALL CORNERS ASSOCIATES.
2. The date of filing of the existing Statement of Partnership was August
29, 1985, as amended by First Amendment to Statement of Partnership filed June
28, 2000.
3. The place wherein the existing Statement of Partnership was recorded
was with the Superior Court Clerk of Gwinnett County, Georgia at Book 3134, Page
366, as amended by First Amendment to Statement of Partnership recorded with the
Superior Court Clerk of Gwinnett County, Georgia at Book, 20785, Page 210.
4. As of December 4th, 2000 (the Effective Date), PWIP6 has assigned all of
its partnership interest in the Partnership to Charles A. Lotz, Jr. (Lotz). From
the Effective Date, Mall Corners III and Lotz shall have the sole power and
authority to act on behalf of the Partnership in all matters. From the Effective
Date, PWIP6 is no longer a partner and shall have no authority to bind the
Partnership or encumber or dispose of any of its assets.
<PAGE>
IN WITNESS WHEREOF, the partners have executed this Second Amendment to
Statement of Partnership under seal as of the 4th day of December 2000.
Signed, sealed and delivered this GWINNETT MALL CORNERS
4th day of December, 2000, in ASSOCIATES, a Georgia general
the presence of: partnership
By: MALL CORNERS III, LTD., a
/s/ Brenda Bailey Georgia limited partnership,
------------------ General Partner
Unofficial Witness
By: Mall Corners II, Ltd., a
Georgia limited partnership,
/s/ Faye J. Randle sole general partner
-------------------
Notary Public
By: /s/ Charles A. Lotz, Jr.
------------------------
Charles A. Lotz, Jr.,
a general partner
By: Center Developers Incorporated, a
Georgia corporation, a general
partner
By: /s/ Charles A. Lotz, Jr.
------------------------
Charles A. Lotz, Jr.
President
By: /s/ Charles A. Lotz, Jr.
------------------------
Charles A. Lotz, a general partner
<PAGE>
ACKNOWLEDGEMENT OF THE
FOREGOING
Signed, sealed and delivered this PAINE WEBBER INCOME
1st day of Dec., 2000, in PROPERTIES SIX LIMITED
the presence of: PARTNERSHIP, a Delaware Limited
Partnership
/s/ Mark Dunne By: Sixth Income Properties Fund,
--------------- Inc., Managing General Partner
Unofficial Witness
/s/ Laurie Fulton By: /s/ Walter V. Arnold
------------------ --------------------
Notary Public
Attest: /s/ Frank Huemmer
-----------------
My commission expires: 8/9/07
(CORPORATE SEAL)
<PAGE>
Return to: FOLTZ MARTIN, LLC
J. Marshall Martin, III
Five Piedmont Center
Suite 750
Atlanta, Georgia 30305
LOAN ASSUMPTION AGREEMENT- TRANSFER OF PARTNERSHIP INTEREST
--------------------------------------------------------------------------------
THIS LOAN ASSUMPTION AGREEMENT- TRANSFER OF PARTNERSHIP INTEREST
(hereinafter referred to as this "Agreement") is made this 4th day of December,
2000, by and among GWINNETT MALL CORNERS ASSOCIATES, a Georgia general
partnership (hereinafter referred to as "Borrower"), PAINE WEBBER INCOME
PROPERTIES SIX LIMITED PARTNERSHIP (hereinafter referred to as "Assignor"), MALL
CORNERS III, LTD (hereinafter referred to as "Mall Corners"), CHARLES A. LOTZ,
JR. (hereinafter referred to as "Assignee") and METROPOLITAN LIFE INSURANCE
COMPANY (hereinafter referred to as "Lender").
WITNESSETH:
WHEREAS, Wells Fargo Bank, National Association made a $20,000,000.00 loan
(hereinafter referred to as the "Loan") to Borrower, which Loan was evidenced by
a Promissory Note secured by Deed to Secure Debt dated as of December 1, 1995
and evidenced and secured by a Loan Agreement of even date therewith and a Deed
to Secure Debt and Absolute Assignment of Rents and Leases of even date
therewith and certain other loan documents evidencing, securing or otherwise
relating to the Loan (collectively the "Loan Documents"); and
WHEREAS, Borrower is a Georgia general partnership originally composed of
Assignor and Mall Corners and both Assignor and Mall Corners executed and
delivered to Lender a Guaranty and Indemnity Agreement dated December 1, 1995
(the "Guaranty") pursuant to which they guaranteed certain obligations relating
to the Loan Documents, and a certain Environmental Indemnity Agreement (the
"Indemnity"); and
WHEREAS, Wells Fargo Bank, National Association assigned all of its right,
title and interest in the Loan, the loan documents and the Indemnity and
Guaranty to Lender; and
WHEREAS, Borrower and Lender entered into a Funding Agreement dated May
28, 1999, concerning $450,000.00 of improvement funds received in connection
with the former Levitz space (hereinafter referred to as the " Levitz Funding
Agreement"); and
WHEREAS, Borrower and Lender entered into a Funding Agreement dated April
______, 2000, concerning $1,200,000.00 of funds in connection with the former
Uptons space (hereinafter referred to as the "Uptons Funding Agreement"); and
WHEREAS, Borrower and Lender executed a First Amendment to Loan Documents
dated as of October 31, 2000 including the Levitz Funding Agreement and the
Uptons Funding Agreement (as amended, hereinafter referred to collectively as
the "Amended Loan Documents"); and
WHEREAS, the Loan is presently in default but Assignee desires to acquire
all of Assignor's interest in Borrower and cure the default and has requested
that Lender consent to such change in the composition of Borrower and reinstate
the Loan; and
WHEREAS, the parties desire to set forth certain agreements, terms and
conditions relating to such consent and reinstatement by Lender;
NOW, THEREFORE, for and in consideration of the sum of Ten and no/100
Dollars ($10.00) and other good and valuable considerations, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto do hereby
covenant and agree as follows:
1. Conditional Approval of Partnership Transfer and Reinstatement Loan.
Subject to the conditions set forth below and the other agreements
set forth herein, Lender consents to the Assignment by Assignor of
its partnership interest in Borrower to Assignee and Lender accepts
Borrower's tendered cure of the defaults and reinstates the Loan.
Such agreement by Lender is conditional upon the following:
(a) Assignment. Receipt by Lender of instruments and documents, in
form and substance satisfactory to Lender, evidencing the
assignment of all of the Assignor's right, title and interest
in Borrower to Assignee, without outstanding debt on the part
of Borrower or Assignee to Assignor. Assignee has no
outstanding obligations to Borrower other than those described
in the Assignment of Interest and related documents approved
by Lender and dated December 4, 2000.
(b) New Guaranty and Indemnity. Execution and delivery by
Assignee of a Guaranty and Indemnity Agreement and
Environmental Indemnity Agreement, all in form and substance
satisfactory to Lender, and delivery of same to Lender.
(c) UCC and Judgment Search; Financial Information. Receipt by
Lender of the results of a UCC search in the state of Georgia,
a tax and judgment lien search in Fulton and Gwinnett County,
Georgia and a bankruptcy search in the Northern District of
Georgia in the name of Lotz, with all search results being
satisfactory to Lender in its sole discretion. Receipt by
Lender of financial reports and other financial information
relating to Lotz, and such information being satisfactory to
Lender in Lender's sole discretion.
(d) Certificates. Execution by Assignee of a Borrower Certificate
in form and substance satisfactory to Lender.
(e) Legal Opinion. Receipt by Lender of a legal opinion from
Altman Kritzer and Levick in form and substance satisfactory
to Lender opining as to the validity and enforceability of the
assignment from Assignor to Assignee, the validity and
enforceability of this Agreement, and the due authorization,
execution, delivery and enforceability of the documents
required hereby including specifically, without limitation,
the Guaranty and Environmental Indemnity.
(f) Title Endorsement. Receipt by Lender of a title endorsement
updating the effective date of Lender's title insurance policy
and showing no new or intervening matters and providing such
other affirmative coverages as Lender may require.
(g) Cure Payment; Assumption Fee. Payment by Borrower to Lender,
in good funds, of the sums set forth on Exhibit "A" attached
hereto and by this reference made a part hereof to cure
Borrower's default and the associated costs, charges and
expenses which Lender has incurred in connection therewith.
Payment by Borrower to Lender of the assumption fee set forth
in Exhibit "B" hereto. It is understood and agreed that
such payment may be accomplished by disbursement of the
assumption fee from the Uptons escrow funds held pursuant to
the Uptons Funding Agreement and Borrower hereby requests
Lender to make such disbursement.
(h) Insurance. Receipt by Lender of evidence, satisfactory to
Lender, that all casualty, liability, rental loss and other
insurance coverages required by the Amended Loan Documents are
in place and paid in full.
2. Representations and Warranties of Borrower and Assignee. Borrower and
Assignee hereby represent and warrant to Lender that (i) Assignee has acquired
all of the partnership interest of Assignor, (ii) Assignee has assumed the
performance of Assignor's obligations under the Amended Loan Documents, (iii)
Assignee has not granted to Assignor any debt obligation or assignment of
partnership interest or other lien or conveyance in connection with the
assignment of Assignor's partnership interest, (iv) except for the payment
default of Borrower, there are no defaults or events of default or occurrences
which, with the passage of time or notice or both, would constitute an Event of
Default under the Amended Loan Documents, (v) there are no rights of setoff or
counterclaim, nor any defenses of any kind, whether legal, equitable, or
otherwise, which would enable Borrower to avoid or delay timely performance of
its obligations under the Amended Loan Documents, and Lender has performed all
of its obligations under the Amended Loan Documents with no default by Lender,
(vi) all of the financial information furnished to Lender in connection herewith
is true, complete and accurate in all material respects.
3. Representations and Warranties of Assignor. Assignor represents and
warrants to Lender that it has assigned all of its partnership interest in
Borrower to Assignee and that neither Assignee nor Borrower owe any indebtedness
to Assignor, and Assignor has no claim against Lender in connection with the
Loan, the Amended Loan Documents or with respect to any of the sums held
pursuant to the Levitz Funding Agreement or the Uptons Funding Agreement.
Assignor has not assigned any claim against Lender to Assignee.
4. Representations of Lender. Lender represents that, except for the
November and December payment defaults, as of the date hereof, Lender, without
investigation, has no knowledge of any other default under the Amended Loan
Documents.
5. Acknowledgement of Indebtedness. All parties acknowledge and agree that
the outstanding principal balance of the indebtedness will be $17,397,735.35,
assuming payment of the cure amounts set forth on Exhibit "A" hereto. All
parties acknowledge and agree that the funds held by Lender pursuant to the
Levitz Funding Agreement are $487,314.55 and that funds held pursuant to the
Uptons Funding Agreement are $1,066,401.08, subsequent to application of the sum
of $175,021.87 to payment of the assumption fee as contemplated in Section 1g
hereof. Borrower, Mall Corners, and Assignee acknowledge and agree that the
Loan, as evidenced and secured by the Amended Loan Documents, is a valid and
existing indebtedness payable by Borrower to Lender and that the Amended Loan
Documents constitute a valid and enforceable first in priority security title
and security interest in the collateral covered thereby.
6. Agreements Regarding Amended Loan Documents.
--------------------------------------------
a. Borrower, Mall Corners and Assignee acknowledge and agree that Lender's
consent to the assignment of Assignor's interest in the partnership constitutes
a transfer as contemplated by the Amended Loan Documents and that Lender is
entitled to the assumption fee set forth in Exhibit A. Borrower, Mall Corners
and Assignee agree that this assignment constitutes the "one time only" transfer
permitted to Borrower by Section 2.9 of the Loan Agreement and that Borrower has
no further right to transfer or assign either the Loan, the property encumbered
by the Loan, or to modify the ownership interests in Borrower without the prior
written consent of the Lender, which may be given or withheld in Lender's sole
discretion. Lender's consent to this transfer shall not constitute a consent to,
or waiver of the right to control, any future transfer governed by the Amended
Loan Documents.
b. The parties agree that after the date hereof, correct notice addresses
for Lender and Borrower are as follows:
Lender: Metropolitan Life Insurance Company
2400 LakeView Parkway
Alpharetta, Georgia 30004
Attention: Assistant Vice President - R.E.I.
With copy to: Metropolitan Life Insurance Company
2400 LakeView Parkway
Alpharetta, Georgia 30004
Attention: Law Department
Borrower: Gwinnett Mall Corners Associates
c/o Mark Levick, Esquire
Altman, Kritzer & Levick
6400 Powers Ferry Road, NW
Suite 224
Atlanta, Georgia 30339
c. The First Amendment to Loan Documents is hereby amended by deleting, in
their entirety, Sections 3 and 4 thereof.
7. Assumption. Assignee assumes the performance of all of Assignor's
obligations under the Amended Loan Documents.
8. Partial Release of Assignor. Lender hereby releases Assignor from any
and all of Assignor's obligations under the Amended Loan Documents, the Guaranty
and Indemnity to the extent that such obligations arise out of or are
attributable to events occurring wholly, but not in part, after the date hereof.
Assignor shall remain liable to Lender for any and all of its obligations which
arise out of or are attributable to events occurring in whole or in part prior
to the date hereof. Assignor agrees that the foregoing sentence shall apply
notwithstanding any subsequent transfer or transfers of the property securing
the Amended Loan Documents, and accordingly, Assignor agrees that:
(i) its guaranty executed in favor of Lender is amended by deleting from
Section 11 therein the following language:
"provided, however, except as to occurrence or events which give rise to
liability however on the part of Guarantor, this Guaranty shall be
released by Lender at such time as Borrower has transferred all of its
interest in and to the property to a third party accordance with, the Loan
Documents."
(ii) Clause 2(b)(ii) of the Environmental Indemnity executed by Assignor in
favor of Lender is deleted in its entirety.
9. No Waiver by Lender. Nothing contained herein shall be deemed a waiver
of any of Lender's rights or remedies under the Amended Loan Documents.
10. Relationship with Loan Documents. To the extent that this Agreement is
inconsistent with the Amended Loan Documents, this Agreement will control and
the Amended Loan Documents will be deemed to be amended hereby. Except as
expressly amended hereby, the Amended Loan Documents shall remain unchanged and
in full force and effect.
11. Partial Invalidity. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws, such provision
shall be fully severable, and this Agreement shall be construed and enforced as
if such illegal, invalid or unenforceable provision has never comprised a part
of this Agreement.
12. Entire Agreement. This Agreement and the documents contemplated to be
executed herewith constitutes the entire agreement among the parties hereto with
respect to the assignment or interest in Borrower and reinstatement of the Loan
and shall not be amended unless such amendment is in writing and executed by
each of the parties. The Agreement supersedes all prior negotiations regarding
the subject matter hereof.
13. Binding Effect. This Agreement and the documents contemplated to be
executed in connection herewith shall be binding upon and inure to the benefit
to the parties hereto and their respective successors and assigns.
14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Georgia.
IN WITNESS WHEREOF, the parties hereto have signed and sealed this Loan
Assumption Agreement as of the day and year first above written.
Signed, sealed and delivered METROPOLITAN LIFE INSURANCE
In the presence of: COMPANY, a New York corporation
/s/ Susan E. Fitzgerald By: /s/ William E. Faggerty
------------------------ ------------------------
Unofficial Witness Its: Assistant Vice President
/s/ Kathleen D. Coady
---------------------
Notary Public
My Commission Expires: 3/15/2003
[NOTARY SEAL]
Signed, sealed and delivered GWINNETT MALL CORNERS ASSOCIATES,
in the presence of: a Georgia general partnership
/s/ Brenda Bailey By: MALL CORNERS III, LTD., its
------------------ general partner
Unofficial Witness
/s/ Faye J. Randle By: MALL CORNERS II, LTD.,
------------------- general partner
Notary Public
My Commission Expires: By: /s/ Charles A. Lotz, Jr.
-------------------------
Charles A. Lotz, Jr.
[NOTARY SEAL] Managing General Partner
By: /s/ Charles A. Lotz, Jr.
------------------------
Charles A. Lotz, Jr., its general
partner
<PAGE>
Signed, sealed and delivered PAINEWEBBER INCOME PROPERTIES SIX
In the presence of: LIMITED PARTNERSHIP, its general
partner
/s/ Frank Huemmer By: Sixth Income Properties Fund, Inc,
------------------ Managing General Partner
Unofficial Witness
/s/ Laurie Fulton By: /s/ Walter V. Arnold
----------------- --------------------
Notary Public
My commission expires: 8/9/07
[NOTARY SEAL] [CORPORATE SEAL]
<PAGE>
Signed, sealed and delivered MALL CORNERS III, LTD.
in the presence of:
By: MALL CORNERS II, LTD.,
/s/ Brenda Bailey general partner
-----------------
Unofficial Witness
By: /s/ Charles A. Lotz, Jr.
-------------------------
/s/ Faye J. Randle Charles A. Lotz Jr.
------------------- Managing General Partner
Notary Public
[NOTARY SEAL]
Signed, sealed and delivered in the presence of:
/s/ Brenda Bailey By: /s/ Charles A. Lotz, Jr.
----------------- -------------------------
Unofficial Witness Charles A. Lotz Jr.
/s/ Faye J. Randle
------------------
Notary Public
[NOTARY SEAL]
<PAGE>
EXHIBIT "A"
CURRENT PRINCIPAL OUTSTANDING $17,502,186.77
Debt Service Due and Payable
November 1, 2000 P&I Payment: $159,410.88
November 1, 2000 Tax & Insurance Escrow: 34,231.39
December 1, 2000 P&I Payment: 159,410.88
December 1, 2000 Tax & Insurance Escrow: 34,231.39
-------------------------------------------------------------------------------
Subtotal Debt Service Due: 387,284.54
Other Amounts Due and Payable to MetLife
Late Charge for November 1, 2000 Payment: 6,376.44
MAI Appraisal Fee: 9,500.00
Phase I Environmental Report: 2,900.00
Legal Fees - Foltz Martin: 14,000.00
Legal Advertising Invoice - Gwinnett Daily Post: 1,040.00
--------------------------------------------------------------------------------
Subtotal Other Amounts Due 33,816.44
Subtotal of Amounts Due: 421,100.98
Less $100,000.00 credit for funds delivered
pursuant to First Amendment to Loan Documents
TOTAL DUE: $321,100.98
<PAGE>
EXHIBIT "B"
1% Transfer and Assumption Fee: $175,021.87
