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) July 23, 1999
PAINEWEBBER EQUITY PARTNERS THREE LIMITED PARTNERSHIP
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(Exact name of registrant as specified in its charter)
Virginia 0-17881 04-2985890
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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)
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FORM 8-K
CURRENT REPORT
PAINEWEBBER EQUITY PARTNERS THREE LIMITED PARTNERSHIP
ITEM 2 - Disposition of Assets
DeVargas Mall - Santa Fe, New Mexico
Disposition Date - July 23, 1999
On July 23, 1999, PaineWebber Equity Partners Three Limited Partnership
("the Partnership"), sold its interest in the DeVargas Center Joint Venture,
which owns the DeVargas Mall, to its joint venture partner for a total
consideration price of $11,067,485. This price included the Partnership's
original net investment and the Partnership's preferred return through the date
of the sale transaction. The Partnership's original net investment in the joint
venture was $10,800,000, which is the amount the Partnership would have received
from a third-party sale of the property at any sale price between $16,450,000
and $19,850,000. Under the terms of the DeVargas Mall joint venture agreement,
the Partnership was entitled to the first $10,800,000 as a first priority from
the net sale proceeds after the payment of closing costs and adjustments as well
as the mortgage indebtedness of approximately $5,200,000. The co-venture partner
was entitled to the next $3,285,000. Under these terms, the Partnership would
not have received any amount above $10,800,000 until the sale price of the
property to a third-party buyer exceeded $19,850,000. The most recent estimated
valuation of the DeVargas Mall property was $18,000,000.
DeVargas Mall was 92% leased and occupied at June 30, 1999. This compared
with 92% leased and 91% occupied at the end of last quarter. A new tenant,
Starbucks, which signed a lease for 1,764 square feet moved into its new space
in May 1999. During the next year, fifteen leases representing a total of 25,873
square feet, or 10.4% of the Mall's total rentable area, come up for renewal. As
previously reported, Albertson's, a major grocery chain that currently operates
a 39,000 square feet grocery store at DeVargas Mall, acquired the Montgomery
Ward site which abuts DeVargas Mall. While Albertson's planned expansion to
build their new 55,000 square foot prototypical Super Store is still expected to
have a positive impact on DeVargas Mall, Albertson's plans have been delayed
until sometime next year. Notwithstanding the leasing changes expected to occur
at DeVargas Mall over the next two years, the Partnership believed it was in the
best interests of the Limited Partners to sell its interest in the Center now
rather than wait and take the risk of lease-up and any potential near-term
negative changes in the economy that could affect the retail segment of the real
estate markets. The total net sale proceeds of approximately $11 million, or
$218.99 per original $1,000 investment, will be included in the Final
Distribution to the Limited Partners. As a result of the disposition of the
remaining real estate investment in its portfolio, the Partnership is in the
process of completing a liquidation. As part of the liquidation, a Final
Distribution of approximately $15,763,000, or $312.34 per original $1,000
investment, will be made on August 13, 1999 to unitholders of record on July 23,
1999, the date of the sale of the Partnership's interest in DeVargas Mall. A
formal liquidation of the Partnership is being finalized and will be completed
by August 16, 1999.
ITEM 7 - Financial Statements and Exhibits
(a) Financial Statements: None
(b) Exhibits:
(1) Assignment of Joint Venture Interest, Release and Dissolution of
Joint Venture by and between Weingarten Realty Investors and
PaineWebber Equity Partners Three Limited Partnership, dated July
23, 1999.
<PAGE>
FORM 8-K
CURRENT REPORT
PAINEWEBBER EQUITY PARTNERS THREE 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.
PAINEWEBBER EQUITY PARTNERS
THREE LIMITED PARTNERSHIP
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(Registrant)
By: Third Equity Partners, Inc.
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Managing General Partner
By: /s/Thomas W. Boland
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Thomas W. Boland
Vice President and Controller
Date: August 9, 1999
<PAGE>
ASSIGNMENT OF JOINT VENTURE INTEREST,
RELEASE AND DISSOLUTION OF JOINT VENTURE
This Assignment of Joint Venture Interest, Release and Dissolution of
Joint Venture ("Agreement") entered into by and between WEINGARTEN REALTY
INVESTORS, a Texas real estate investment trust ("WRI"), and PAINEWEBBER EQUITY
PARTNERS THREE LIMITED PARTNERSHIP, a Virginia limited partnership
("PaineWebber").
W I T N E S S E T H:
That the undersigned parties, WRI 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 April 18, 1988, DeVargas Center Joint Venture (the "Venture")
was formed by the execution of that certain Joint Venture Agreement of DeVargas
Center Joint Venture (the "Original Joint Venture Agreement"), between
WRI/DeVargas, Inc. ("DeVargas"), a Texas corporation that was a wholly-owned
subsidiary of WRI, on the one hand, and PaineWebber, on the other hand.
B. The Venture acquired and owns a certain tract of land situated in Santa Fe,
Santa Fe County, New Mexico, 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 "DeVargas Center".
C. The Original Joint Venture Agreement was amended by (i) a letter agreement
between DeVargas and PaineWebber dated April 27, 1988; (ii) that certain
instrument entitled "First Amendment of Joint Venture Agreement" between WRI and
PaineWebber dated November 30, 1990, but effective as of September 26, 1990; and
(iii) that certain instrument effective as October 29, 1992 entitled "Second
Amendment of Joint Venture Agreement" between WRI and PaineWebber (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.
D. The interest of DeVargas in the Venture was assigned to WRI pursuant to that
certain Assignment of Joint Venture Interest, executed as of April 1, 1989, from
DeVargas to WRI.
E. PaineWebber has agreed to sell and convey to WRI the entirety of the interest
in the Venture (being a 50% ownership interest, as stated in Section 1.6 of the
Original Joint Venture Agreement) heretofore and now owned by PaineWebber, and
WRI has agreed to purchase and acquire such Joint Venture Interest from
PaineWebber for mutually agreed consideration. Pursuant to such transaction, the
Parties have agreed to release each other from all claims relating to the
Venture or DeVargas Center. Further, by virtue of the fact that 100% of the
interest in the Venture shall, following and as a result of such assignment, be
owned by WRI, there would be only one Venturer in the Venture, with the result
that the Venture would be dissolved.
II. Assignment of Joint Venture Interest
PaineWebber, as Assignor, for and in consideration of the sum of
$11,067,484.92 (which sum is the total of $10,800,000 plus an amount equal to 8%
per annum on such $10,800,000 from April 1, 1999 to the Effective Date hereof)
and other good and valuable consideration to Assignor in hand paid by WRI, as
Assignee,
HAS GRANTED, SOLD, TRANSFERRED, ASSIGNED, and CONVEYED, and does hereby
GRANT, SELL, TRANSFER, ASSIGN, and CONVEY unto Assignee, a 50% 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 Distributable Funds, Net Proceeds and all other distributions,
preferences, and other benefits which accrue to the Assigned Interest from and
after the Effective Date of this Assignment (or have heretofore accrued to the
Assigned Interest but have not been distributed to and received by Assignor).
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 right, 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; (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; (vi) Assignor has not
incurred any obligation or liability on behalf of or binding upon the Venture,
other than those created in writing, executed (x) jointly by both Assignor and
Assignee or (y) singly by Assignor with the express written consent of Assignee
which written consent specifically identifies such obligation or liability; and
(vii) there are no attachments, executions, assignments for the benefit of
creditors, or voluntary or involuntary proceedings in bankruptcy or under any
other debtor relief law contemplated by or pending or threatened against
Assignor, or any property (real or personal) of Assignor. Assignor hereby agrees
to indemnify and hold the Venture and Assignee harmless from and against any
loss, damage, liability, cost, or expense (including reasonable attorneys' fees)
resulting from or arising out of a breach of any warranty, representation,
covenant, or agreement made by Assignor herein.
Assignor agrees to cooperate with Assignee and the Venture and to execute
such other and further agreements, instruments, and documents as may be
reasonably required or desired by Assignee or the Venture to reflect or confirm
the assignment of the Assigned Interest to Assignee; the legal fees incurred by
Assignor for the review of such further agreements, instruments and documents to
be borne by Assignee.
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 items of
Venture Assets (as hereinafter defined); 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. Mutual Releases and Indemnities
A. PaineWebber hereby releases WRI and the Venture 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 PaineWebber relating to the Venture or DeVargas Center;
provided, however, that nothing herein releases WRI from its assumption
obligations or other obligations under this instrument. Without limiting the
generality of the foregoing, PaineWebber acknowledges that it has received all
Distributable Funds, Net Proceeds and other funds, distributions and payments
which it has or will acquire any right to receive under the Amended Joint
Venture Agreement.
B. WRI and the Venture hereby release PaineWebber its 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, (i) the duties and obligations under
that certain Consolidated Amended and Restated Promissory Note dated effective
as of June 1, 1997 in the original principal amount of $5,000,000 (as
subsequently amended or increased or modified the "Note"), and all loan
documents executed in connection with the Note (and all modifications thereof),
and (ii) 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 WRI or the Venture;
provided, however, that nothing herein releases PaineWebber from any of its
representations or warranties under this instrument.
IV. Dissolution of Venture
A. Heretofore and at the time of execution and delivery of this instrument, WRI
owned a 50% interest in the Venture. By virtue of the assignment from
PaineWebber to WRI as referred to in Section II of this instrument, WRI acquired
the other 50% interest in the Venture heretofore owned by PaineWebber. WRI
therefore now owns 100% of the interests in the Venture. Accordingly, inasmuch
as there is only one Venturer in the Venture (namely, WRI), the Venture
automatically, by operation of law, dissolved, and the entire 100% interest in
the Land, the Improvements and all other assets of the Venture (collectively,
the "Venture Assets") have become vested and are vested in WRI, as the sole
owner thereof, subject (as to the Land and Improvements) to the lien, easements,
leases and other matters of record which are still in effect and are still
binding on such land.
B. In implementation and in confirmation of the vesting of all Venture Assets in
WRI as result of the aforesaid dissolution of the Venture, by operation of law,
DeVargas Center Joint Venture, as Grantor, has GRANTED, SOLD, and CONVEYED, and
by these presents does GRANT, SELL, and CONVEY unto WRI, as Grantee, all of the
following described property (herein collectively referred to as the "Venture
Assets"), to-wit:
1. The Land, together with all Improvements, all equipment,
furniture, fixtures, and personalty owned by the Venture situated on the
Land;
2. To the extent they are assignable, all bonds and all warranties
and guaranties (express or implied, issued in connection with or arising
out of (i) the purchase and repair of all fixtures, fittings, appliances,
apparatus, equipment, machinery, and other personal property owned by
Grantor and affixed or attached to or placed or situated upon, or used or
acquired in connection with the Land and Improvements; or (ii) the
construction, alteration, maintenance, and repair of any of the
Improvements;
3. All raw materials, work and materials in progress, equipment and
other tangible personal property owned by Grantor and situated on the
Land;
4. Copies of all leasing records, accounts receivable, leasing
applications, tenant credit reports, and maintenance, and operating
records, all keys and telephone exchange numbers relating to the Land and
Improvements;
5. Copies of all plans and specifications and structural,
mechanical, or engineering reports relating to the Land and Improvements;
6. All of the rights, powers, estates, and privileges of the
landlord or lessor under all leases affecting the Land or Improvements,
including, without limitation, entitlement to all rent accrued and to
accrue thereunder, and all of the rights of reversion and all other rights
and benefits belonging or accruing to the benefit of the lessor or
landlord under the aforesaid leases;
7. All security deposits and other deposits relating to the
aforesaid leases or Improvements;
8. All service contracts relating to the aforesaid Improvements;
9. All other assets of the Venture (whether similar to or
dissimilar from those above mentioned).
With respect to the Land and Improvements only (but not any other Venture
Assets), this conveyance is made subject to matters (referred to as the
"Permitted Exceptions") of record in Santa Fe County, New Mexico, to the extent
(but only to the extent) that such matters are still in effect and are still
enforceable against the land or improvements;
TO HAVE AND TO HOLD the Venture Assets, subject to the Permitted
Exceptions, unto WRI, as Grantee, its successors and assigns forever; and the
Venture, as Grantor, does hereby warrant and agree to forever defend title to
the Venture Assets, subject to the Permitted Exceptions, unto WRI, as Grantee,
its successors and assigns, against all persons claiming or to claim the same or
any part thereof by, through, or under Grantor, but not otherwise; provided,
however, PaineWebber shall not have any liability with respect to this warranty
except as to actions, if any, taken by PaineWebber itself in derogation of title
to the Venture Assets.
C. WRI 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.
D. 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 WRI for any liability for such fees, costs or expenses.
E. In addition, WRI 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 on the transfer of the Venture Assets) which fees, costs and
expenses were incurred by WRI on behalf of the Venture.
F. PaineWebber and WRI 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 dissolution, liquidation and termination of the Venture.
V. General Provisions
A. The obligations of PaineWebber hereunder shall be binding only on
PaineWebber to the extent of the consideration paid by WRI for the Assigned
Interest, and neither WRI, the Venture nor anyone claiming by, through or under
WRI 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.
B. With respect to the Venture Assets, WRI acknowledges that, as a
Venturer, it is familiar with the condition of the Venture Assets; has had the
opportunity to conduct a due diligence of the investigation of the Venture
Assets; and has obtained a title report covering the Venture real estate assets.
With respect to physical condition, WRI accepts the conveyance of the Venture
Assets, in their current condition "as-is" and "with all faults". With respect
to title to the real property (which is included in the Venture Assets), WRI
relies on the aforesaid title report and the warranties herein set forth.
C. With respect to the Assigned Interest, WRI has obtained a UCC search
and in acquiring the Assigned Interest has relied on the results of such UCC
search and on the representations and warranties of PaineWebber as herein set
forth.
D. WRI 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 Venture Assets except as
expressly provided in this Agreement.
E. Notwithstanding anything to the contrary contained in the Amended Joint
Venture Agreement, in consideration of the acquisition by WRI from PaineWebber
of the Assigned Interest, PaineWebber and WRI acknowledge and agree that
PaineWebber shall not receive, after March 31, 1999, the 8% per annum simple
interest return on $10,800,000 as set forth in Section 4.3(c)(ii) of the Amended
Joint Venture Agreement or any other amount of Distributable Funds or Net
Proceeds which shall have accrued after March 31, 1999, all of which
Distributable Funds and Net Proceeds are hereby allocated to WRI. All
allocations of profits, losses, income, deductions, credits and gains for tax
reporting purposes shall be based on the interim closing of the books of the
Joint Venture as of the Effective Date.
F. WRI agrees to cause a copy of the Form 1065 U.S. Partnership Return of
Income and/or PaineWebber's Federal Schedule K-1, to be delivered to PaineWebber
on or before ninety (90) days after the Effective Date.
G. WRI further agrees to cooperate, and cause its auditors to cooperate,
with PaineWebber in preparing financial reporting information relating to the
period from January 1, 1999 through the Effective Date necessitated by
PaineWebber's SEC reporting requirements or tax returns; provided that
PaineWebber shall be responsible for the fees and expenses of the aforesaid
auditors in performing the above-described services.
EXECUTED in multiple counterparts, each of which shall have the
force and effect of an original, this the 23rd day of July, 1999 (the "Effective
Date").
WEINGARTEN REALTY INVESTORS, a
Texas real estate investment
By: /s/ Bill Robertson, Jr.
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Bill Robertson, Jr.
Executive Vice President/CFO
"WRI"
PAINEWEBBER EQUITY PARTNERS THREE LIMITED PARTNERSHIP,
a Virginia limited partnership
By: THIRD EQUITY PARTNERS, INC., a Delaware
corporation, its managing general partner
By: /s/ Peter F. Sullivan
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Name: Peter F. Sullivan
Title: Vice President
"PaineWebber"
DEVARGAS CENTER JOINT VENTURE
By: Weingarten Realty Investors
By: /s/ Bill Robertson, Jr.
----------------------
Bill Robertson, Jr.
Executive Vice President/CFO
By: PaineWebber Equity Partners Three Limited
Partnership, a Virginia limited partnership
By: Third Equity Partners, Inc., a Delaware
corporation, its managing general partner
By: /s/ Peter F. Sullivan
----------------------
Name: Peter F. Sullivan
Title: Vice President
"Venture"
<PAGE>
EXHIBIT "A"
All the following described lot or parcels of land and real estate situate,
lying and being in the City and County of Santa Fe, State of New Mexico, more
particularly described as follows, to-wit:
All of Lots Two (2) and Three (3) in Block One (1) as shown on plat of survey
entitled, "AMENDED PLAT DEVARGAS CENTER SUBDIVISION, WARD 3, SANTA FE, NEW
MEXICO," prepared by Jack G. Horne, P.E. & L.S. No. 889 dated 12 Aug. 1971 and
filed for record in the office of the County Clerk of Santa Fe County, New
Mexico as Document Number 336,878, appearing in Plat Book 23 of Maps at page 34.
LESS AND EXCEPT any portion thereof conveyed to the New Mexico State Highway
Commission by deeds recorded in Book 281 Miscl., pages 798, 799, 800, 801, 802,
803 and 804, records of Santa Fe County, New Mexico.
