SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported) October 3, 2003
WINTHROP CALIFORNIA INVESTORS LIMITED PARTNERSHIP
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(Exact Name of Registrant as Specified in Its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
0-14536 04-2869812
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(Commission File Number) (I.R.S. Employer Identification No.)
7 Bulfinch Place, Boston, Massachusetts 02114
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(Address of Principal Executive Offices) (Zip Code)
(617) 570-4600
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(Registrant's Telephone Number, Including Area Code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
ITEM 5. OTHER EVENTS.
On October 3, 2003, Winthrop California Investors Limited Partnership,
a Delaware limited partnership (the "Partnership"), entered into a settlement
agreement (the "Settlement Agreement") with Crow Irvine #2, a California limited
partnership ("Crow"), pursuant to which certain disputes between the parties
were settled, including the disputes which were the subject of the cases pending
in the Superior Court of the State of California, County of Orange, as Case No.
00CC004296 and Case No. 812346 (the "Lawsuits"). The Partnership had been
engaged in the Lawsuits with Crow relating to certain matters concerning Crow
Winthrop Development Limited Partnership, a Maryland limited partnership of
which Crow is the General Partner and the Partnership is the Limited Partner
(the "Development Partnership"). A copy of the Settlement Agreement is attached
hereto as Exhibit 99.1 and incorporated herein by reference.
Concurrently with the execution of the Settlement Agreement, Crow and
the Partnership executed a Fifth Amendment to the Partnership Agreement of the
Development Partnership dated effective October 3, 2003 (the "Fifth Amendment").
The Fifth Amendment amended certain provisions of the Limited Partnership
Agreement and Certificate of Amendment of the Development Partnership (the
"Development Partnership Agreement"). As more fully described in the Fifth
Amendment, a copy of which is attached hereto as Exhibit 99.2 and incorporated
herein by reference, the Fifth Amendment provides, among other things, for the
following:
1. EXCHANGE OF PARTNERSHIP INTEREST. If (i) the Partnership Preference
(as defined below) and any accrued and unpaid Yield (as defined below), if
applicable, is not paid to the Partnership as provided in paragraph 3 below by
October 3, 2008, or (ii) the Partnership prevails in an action as provided in
paragraph 4 below, then, automatically and without further action by Crow or the
Partnership, Crow shall become the limited partner of the Development
Partnership with all of the rights and obligations of the Limited Partner now
possessed by the Partnership, other than the Partnership's right to receive
distributions of Capital Proceeds (as such term is defined in the Fifth
Amendment) from a Capital Transaction (as such term is provided in the Fifth
Amendment) as provided in paragraph 3 below and the Partnership's right to
receive distributions upon termination and winding up of the Development
Partnership as provided in paragraph 3 below, and the Partnership shall become
the General Partner of the Development Partnership with all of the rights and
obligations of the General Partner now possessed by Crow, including but not
limited to all fees and contractual rights to which Crow or its Affiliates are
entitled, other than Crow's right to receive distributions of Capital Proceeds
from a Capital Transaction as provided in paragraph 3 below and Crow's right to
receive distributions upon termination and winding up of the Development
Partnership as provided in paragraph 3 below.
2. DISTRIBUTION OF CASH FLOW. Cash Flow (as such term is defined in the
Fifth Amendment) for each calendar year (or fractional portion thereof) shall be
distributed as follows: (i) to Crow, an amount of Cash Flow which, when added to
all fees and other payments made to Crow or any Affiliate of Crow by the
Development Partnership and/or any entity in which the Development Partnership
has a direct or indirect interest in such calendar year, shall equal $3,500,000
(or, in the case of any fractional portion of a calendar year, an amount equal
to the product of $3,500,000 and a fraction, the numerator of which is the
number of days in such fractional portion of a calendar year, and the
denominator of which is 365), unless Crow is in default under the Settlement
Agreement or the Partnership is the General Partner as provided in paragraph 1
above; and (ii) to the Partnership, an amount of Cash Flow which, when added to
all fees and other payments made to the Partnership or any Affiliate of the
Partnership by the Development Partnership and/or any entity in which the
Development Partnership has a direct or indirect interest in such calendar year,
shall equal $3,500,000 (or, in the case of any fractional portion of a calendar
year, an amount equal to the product of $3,500,000 and a fraction, the numerator
of which is the number of days in such fractional portion of a calendar year,
and the denominator of which is 365), if Crow is in default under the Settlement
Agreement or the Partnership is the General Partner as provided in paragraph 1
above. Any Cash Flow that is not distributed shall be held in reserves or used
to pay expenses of the Development Partnership other than those payable to Crow
if clause (i) above is in effect or the Partnership, if clause (ii) above is in
effect.
3. DISTRIBUTION OF PROCEEDS OF A CAPITAL TRANSACTION. Capital Proceeds
arising from a Capital Transaction shall be applied in the following order of
priority: (i) an amount thereof, not to exceed a cumulative total of $8,000,000,
may be reserved by the Development Partnership for payment of (1) Operating
Expenses (as such term is defined in the Development Partnership Agreement), (2)
the cost of capital improvements to any asset of the Development Partnership (or
of any entity in which the Development Partnership has a direct or indirect
interest) made in accordance with the terms and conditions of the Development
Partnership Agreement, (3) to the extent not covered by clause (1) and clause
(2) above, interest reserves, capital repairs, capital replacements, capital
improvements, governmental fees, assessments and bonds, and pre-development
expenses relating to the Excess Land (as such term is defined in the Development
Partnership Agreement) and any Improvements (as such term is defined in the
Development Partnership Agreement) thereon or any other assets and Improvements
owned by the Development Partnership or any entity in which the Development
Partnership has a direct or indirect interest, or (4) inter-company loans and
the repayment of same between the Development Partnership and the Development
Partnership Subsidiaries (as such term is defined in the Fifth Amendment) or
between the Development Partnership Subsidiaries, but in no event shall any of
the expenditures as provided in this paragraph 3 be paid to Crow or any
Affiliate of Crow; (ii) subject to the limitation described in (i) above, the
remaining amount of such Capital Proceeds shall be distributed to the
Partnership promptly after the consummation of such Capital Transaction,
provided that such amount shall not exceed a cumulative total of $22,000,000
(the "the Partnership Preference"); and (iii) after the Partnership Preference
and any accrued and unpaid Yield, if applicable, has been paid in full to the
Partnership, all other Capital Proceeds shall be distributed to Crow. If after
October 3, 2005, any portion of the Partnership Preference remains unpaid, then,
commencing November 3, 2005, the Partnership shall be entitled to receive an
additional sum (the "Yield") equal to six percent (6%) per annum times the
Partnership Preference (or the remaining unpaid portion thereof). The Yield
shall be payable semi-annually on the first day of April 2006 and on the first
day of each sixth (6th) month anniversary thereafter until the Partnership
Preference and any accrued and unpaid Yield, if applicable, has been paid in
full. The Yield shall be paid from Cash Flow that is not distributed to Crow or
the Partnership, as the case may be, as provided in paragraph 2 above, and to
the extent that such Cash Flow is insufficient to pay the Yield in full as and
when the Yield is due and payable, the Yield shall be paid by Crow from its own
funds.
Upon payment to the Partnership of the Partnership Preference and the
Yield, if any, the Partnership shall surrender its interest in the Development
Partnership to Crow and the Partnership will no longer have any rights in the
Development Partnership.
4. REMEDY UPON DEFAULT, FRAUD, ETC. In the event Crow is in default of
the terms of the Development Partnership Agreement (as amended by the Fifth
Amendment), Crow shall have ten (10) days to cure any such default after receipt
from the Partnership of notice setting forth the existence of the specific
default to be cured. If (i) Crow fails to cure a default of which it has been
given notice within ten (10) days of receipt of such notice, and the Partnership
initiates an action and is granted a judgment against Crow to the effect that
Crow committed such default and failed to cure such default within ten (10) days
of receipt of such notice, or (ii) the Partnership initiates an action for
fraud, embezzlement, conversion, misappropriation of funds, breach of fiduciary
duty, self-dealing or similar cause of action, and the Partnership is granted a
judgment against Crow in such action on any such cause of action, then the
Partnership will become the General Partner of the Development Partnership and
Crow will become the Limited Partner as provided in paragraph 2 above.
Thereafter, the Partnership will remain the General Partner of the Development
Partnership and Crow will remain the Limited Partner, only until such time as
the Partnership has been paid the Partnership Preference and any unpaid Yield,
if applicable, at which time the Partnership will surrender its Development
Partnership interest pursuant to paragraph 3 above. If the Partnership initiates
an action against Crow seeking remedy of a default of the Development
Partnership Agreement (as amended by the Fifth Amendment) or for fraud,
embezzlement, conversion, misappropriation of funds, breach of fiduciary duty,
self-dealing or similar cause of action, and Crow is the prevailing party then,
in addition to any other relief awarded to Crow, Crow will recover from the
Partnership the sum of two (2) times the attorney's fees actually incurred by
Crow in defense of such action.
5. CERTAIN LIMITATIONS AND RESTRICTIONS. The Partnership and Crow agree
to certain additional limitations or restrictions on Crow's authority to take
certain actions on behalf of the Development Partnership, including: (i) making
certain additional loans to the Development Partnership; (ii) entering into
certain agreements or executory contracts; (iii) contributing Development
Partnership assets to a joint venture or other entity or forming a subsidiary of
the Development Partnership; (iv) entering into any agreement the effect of
which would be (a) to prevent or inhibit the execution or enforcement of the
Partnership's rights under the Development Partnership Agreement, including but
not limited to the exchange of the General Partner's rights and obligations as
provided in paragraph 1 above or (b) to diminish the potential Capital Proceeds
that could be derived from a Capital Transaction with respect to any Development
Partnership asset (or any entity in which the Development Partnership has a
direct or indirect interest) in order to increase the Cash Flow of the
Development Partnership; and (v) entering into, approving or consummating
certain Capital Transactions with Affiliates. Such limitations and restrictions
are more fully described in the Development Partnership Agreement.
Concurrently with the execution of the Settlement Agreement, on October 3, 2003,
Crow and certain of its affiliates and other persons ("Crow Parties") and the
Partnership and certain of its affiliates other persons ("Winthrop Parties")
executed a Mutual General Release of Past Claims (the "Release") pursuant to
which each of the Crow Parties unconditionally and irrevocably released the
Winthrop Parties, and each of the Winthrop Parties unconditionally and
irrevocably released the Crow Parties, from all actions or claims which it now
has or hereafter may have, by reason of any matter, cause or act from the
inception of time until, but not including, the date of the Settlement
Agreement, relating to or otherwise in respect of the Development Partnership,
Crow Winthrop Operating Partnership (the "Operating Partnership"), any entity in
which either the Development Partnership or the Operating Partnership has a
direct or indirect interest, and/or any asset of the Development Partnership,
the Operating Partnership or any such other entity, including, without
limitation, the Lawsuits. A copy of the Release is attached hereto as Exhibit
99.3 and incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits
The following exhibits are filed as part of this report:
99.1 Settlement Agreement dated October 3, 2003 between Crow Irvine
#2 and Winthrop California Investors Limited Partnership.
99.2 Fifth Amendment to Limited Partnership Agreement and Certificate
of Amendment of Crow Winthrop Development Limited Partnership
dated effective October 3, 2003 by and between Crow Irvine #2
and Winthrop California Investors Limited Partnership.
99.3 Mutual General Release of Past Claims dated October 3, 2003
between Crow Irvine #2, Winthrop California Investors Limited
Partnership and the "Crow Parties" and "Winthrop Parties" named
therein.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized on this 10th day of October, 2003.
WINTHROP CALIFORNIA INVESTORS
LIMITED PARTNERSHIP
By: Winthrop Financial Associates,
A Limited Partnership, as
Managing General Partner
By: /s/ Peter Braverman
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Peter Braverman
Executive Vice President
EXHIBIT INDEX
Exhibit Page
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99.1 Settlement Agreement dated October 3, 2003 between Crow Irvine #2 and Winthrop
California Investors Limited Partnership. 7
99.2 Fifth Amendment to Limited Partnership Agreement and Certificate of
Amendment of Crow Winthrop Development Limited Partnership dated
effective October 3, 2003 by and between Crow Irvine #2 and Winthrop
California Investors Limited Partnership. 14
99.3 Mutual General Release of Past Claims dated October 3, 2003 between
Crow Irvine #2, Winthrop California Investors Limited Partnership and
the "Crow Parties" and "Winthrop Parties" named therein. 28