SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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): July 21, 2000
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PaineWebber Insured Mortgage Partners 1-B, L.P.
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(Exact name of registrant as specified in its charter)
Delaware 0-18076 04-3038480
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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
PAINEWEBBER INSURED MORTGAGE PARTNERS 1-B, L.P.
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ITEM 2 - Disposition of Assets
EMERALD COVE - GNMA Certificate and Participating Mortgage Loan
Disposition Date - July 21, 2000
On July 21, 2000, the Partnership received total consideration of
approximately $11,072,000 for the sale of its Participating Insured Mortgage
Loan secured by the Emerald Cove Apartments, a 276-unit facility located in
Charlotte, North Carolina. The Participating Insured Mortgage Loan consists of a
GNMA Certificate with an 8.75% coupon interest rate and a subordinated note
securing the Contingent Component of the Partnership's interest in the Emerald
Cove property. The Contingent Component of the Participating Insured Mortgage
Loan provides for the payment of Contingent Interest equal to 25% of the Net
Project Cash Flow, if any, and 25% of the Net Project Residuals, if any, derived
from the applicable Project. The face value of the GNMA Certificate as of the
date of the sale was approximately $10,426,000. The excess of the total proceeds
over the face amount of the GNMA Certificate reflects a premium on the GNMA
itself, accrued interest through the date of the sale and the value attributed
to the Contingent Component. As reported in the Partnership's Quarterly Report
on Form 10-Q for the quarter ended April 30, 2000, the Partnership had reached
an agreement with the Emerald Cove property owner regarding what the Partnership
would accept from a sale transaction as repayment in full of the Participating
Insured Mortgage Loan, provided that such a sale transaction was completed by
June 30, 2000. As reported in the Quarterly Report, if a near term prepayment of
the Emerald Cove investment was not completed, then the Partnership planned to
conduct a secondary market sale process similar to the one completed for the
Quarter Mill investment in January of 2000. Subsequent to the quarter ended
April 30, 2000, the potential sale transaction involving the Emerald Cove
property was terminated, and the Partnership engaged the services of a mortgage
brokerage firm to market the Emerald Cove Participating Loan for sale. As a
result of these marketing efforts, several offers were received. The winning
bidder funded a non-refundable deposit of $135,000 on July 11, and the remainder
of the proceeds were received on July 21. As a result of this transaction, the
Partnership no longer has any interest in the Emerald Cove property.
As a result of the disposition on July 21, 2000 of the Partnership's
investments secured by the Emerald Cove Apartments, the Partnership is currently
proceeding with an orderly liquidation. Management currently expects to make a
Liquidating Distribution, which will include the net proceeds of the Emerald
Cove transaction along with the remaining Partnership reserves after the payment
of all liquidation-related expenses, on or before August 31, 2000.
<PAGE>
ITEM 7 - Financial Statements and Exhibits
(a) Financial Statements: None
(b) Exhibits:
(1) Asset Sale Agreement dated July 11, 2000 by and between PaineWebber
Insured Mortgage Partners 1-B, L.P. (the Seller) and PNL Partners
2000, L.P. (the Buyer).
(2) Bill of Sale dated July 21, 2000.
(3) Allonge dated July 21, 2000.
(4) Assignment of Deed of Trust dated July 21, 2000.
(5) Closing Statement.
<PAGE>
FORM 8-K
CURRENT REPORT
PAINEWEBBER INSURED MORTGAGE PARTNERS 1-B, L.P.
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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 INSURED MORTGAGE PARTNERS 1-B, L.P.
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(Registrant)
First Insured Mortgage Partners, Inc.
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By: /s/ Walter V. Arnold
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Walter V. Arnold
Senior Vice President and
Chief Financial Officer
Date: August 1, 2000
<PAGE>
ASSET SALE AGREEMENT
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PaineWebber - Emerald Cove Partners Limited Partnership
Sale of GNMA Certificate (CUSIP #36220JAU0)
Sale of non-performing Subordinated Note in the amount of $10.00
Sale of non-interest bearing Promissory Note in the amount of $52,143.75
THIS ASSET SALE AGREEMENT ("Agreement"), entered into this 11th day of
July, 2000 by and between PaineWebber Insured Mortgage Partners 1-B, L. P. (the
"Seller"), and PNL Partners 2000, L.P. (the "Buyer") sets forth the terms and
conditions whereby the Seller agrees to sell and the Buyer agrees to purchase
the Loans identified herein.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Seller and the Buyer hereby
agree as follows:
1. Definitions. Capitalized terms shall be defined as set forth in this
Agreement, including in Appendix A to this Agreement.
2. Agreement to Purchase and Sell. Subject to and in accordance with the terms
and conditions of this Agreement, the Seller hereby agrees to sell, assign,
transfer and convey to the Buyer on the Closing Date, and the Buyer hereby
agrees to purchase and accept on the Closing Date, all rights, title, and
interests of the Seller, as of the Closing Date, in, to and under the Loans.
3. Closing. The closing shall occur on the Closing Date at the offices of
Bartlett, Hackett Feinberg ("Escrow Agent"), 10 High Street Suite #920 Boston,
MA 02109 or at such other place designated by Consultant, provided that the
parties may agree to delivery of closing documents by hand, overnight delivery
or mail. In the event a copy of the Seller's signature to this Agreement is not
delivered to Buyer within one Business Day after the Date hereof, the Buyer may
extend the Closing Date by one Business Day for each Business Day of such delay.
3.1 Payment of Adjusted Purchase Price. On the Closing Date, the Buyer
shall pay to the Seller, either in cash or by wire transfer in immediately
available funds, the amount of the Purchase Price, adjusted as follows: (i) less
the Earnest Money previously received by Seller, (ii) plus a prorated of the
interest portion of the August 15, 2000 scheduled payment on the Certificate.
All rights to past, present and future payments due on the Subordinated Note and
Promissory Note shall be for the benefit of the Buyer. The adjusted Purchase
Price shall be calculated on a settlement statement prepared by the Seller and
available for the Buyer's review one Business Day prior to the Closing Date.
3.2 Conveyance. Upon receipt of the Purchase Price, the Seller shall sell,
assign, transfer and convey the Loans to the Buyer subject to and in accordance
with the provisions of this Agreement.
3.3 Taxes, Fees, Etc. The Buyer shall pay all transfer, filing and
recording fees, taxes, costs and expenses, and any applicable documentary taxes,
required to be paid by either the Seller or the Buyer in connection with the
transactions contemplated hereby, and hereby agrees to indemnify and hold the
Seller harmless from and against any and all claims, liability, costs and
expenses arising out of or in connection with the failure of the Buyer to pay
any such amount on a timely basis. The Seller shall be entitled to require the
payment of any such fees, taxes, costs and expenses at or prior to the closing
and as a condition thereof.
3.4 Payments Subsequent to the Closing Date. From time to time after the
Closing Date the Seller shall pay to the Buyer, promptly after receipt thereof,
the net amount of any Collections received by the Seller on or after the Closing
Date (to the extent collected in good funds by the Seller) and not already so
paid to the Buyer, but only after all payments due to Seller from Buyer in
connection with the sale of the Loans have been paid to Seller, including,
without limitation, any costs and expenses related to any Collections.
4. Transfer of Loans.
4.1 Closing Documents. Not later than the Business Day prior to the
Closing Date, Seller shall deliver to Escrow Agent (i) a Bill of Sale in the
form attached hereto as Attachment 1, selling, assigning, transferring and
conveying to the Buyer all rights, title and interests of the Seller in, to and
under the Loans, all on the terms and conditions set forth in this Agreement;
(ii) an original Subordinated Note and an original or copy with lost note
affidavit (in form satisfactory to Buyer) of the Promissory Note, endorsed to
the Buyer in the form attached hereto as Attachment 2; and (iii) an assignment
of the Mortgage in the form attached hereto as Attachment 3 (collectively, to
the extent delivered to Escrow Agent, the "Closing Documents"). The endorsements
and assignments included in the Closing Documents shall be without recourse,
representation or warranty of any kind or nature. Such qualifying language on
the endorsements and assignments shall not affect, limit or enlarge the
obligations of the Seller and the rights, remedies and recourse of the Buyer
under this Agreement.
4.2 Escrow Agent's Delivery of Closing Documents. The Escrow Agent shall
have no obligation to review the Closing Documents for completeness,
authenticity, sufficiency, or otherwise. The Escrow Agent shall make the Closing
Documents available for review by the Buyer prior to the closing. The Escrow
Agent shall have the Closing Documents delivered to Buyer by hand or overnight
delivery upon Escrow Agent's receipt of notification from Seller that the Seller
has received the adjusted Purchase Price. In the event of a dispute or
disagreement concerning delivery of the Closing Documents or Escrow Agent's
duties hereunder, Escrow Agent shall take action at the written direction of
both the Buyer or Seller or upon an order of a court of competent jurisdiction.
4.3 Transfer of Certificate. Promptly after Seller's receipt of the
adjusted Purchase Price, Seller and Buyer shall cooperate to cause the
Certificate to be transferred from Seller to Buyer in accordance with the
procedures of the depository. Buyer and Seller shall each bear its own costs in
carrying out the book-entry transfer of the Certificate. If Buyer chooses to
receive the Certificate in a form other than book-entry, Buyer shall be solely
responsible for all costs incurred in connection with the transfer.
4.4 Delivery of Collateral Documents, Etc. Promptly after the closing, the
Seller shall deliver to the Buyer the entire Review File including, without
limitation, originals of each Collateral Document to the extent originals are in
the Seller's possession.
4.5 Execution of Separate Loan Assignments. At and after the closing, to
the extent prepared by Buyer, the Seller shall execute, and acknowledge if
appropriate, for delivery to the Buyer one or more additional documents to the
extent required by applicable public recording or filing laws to transfer to
such Buyer the rights, title and interests of the Seller in, to and under the
purchased Loans (collectively, "Separate Loan Assignments"). The Separate Loan
Assignments shall be without recourse, representation or warranty of any kind or
nature. Such qualifying language on the Separate Loan Assignments shall not
affect, limit or enlarge the obligations of the Seller and the rights, remedies
and recourse of the Buyer under this Agreement. Buyer shall prepare and furnish
any and all further Separate Loan Assignments, if necessary, in form
satisfactory to Seller. The Buyer shall promptly file or record each Separate
Loan Assignment, at its sole cost and expense.
4.6 Hazard, Liability Insurance, Etc. At the request and sole cost and
expense of the Buyer, the Seller shall cooperate with the Buyer in executing
written requests to each hazard, casualty and liability insurer, and to the
writing agent for each flood hazard insurer, issuing a policy of insurance
obtained by the Borrower with respect to the Loans, requesting an endorsement of
its policy of insurance effective on the Closing Date adding the Buyer as the
mortgagee, the loss payee and/or an insured named therein, as the case may be,
together with instructions that such endorsement be forwarded directly to the
Buyer, with a copy to the Seller at the address herein specified for notices.
Each such request shall be prepared by the Buyer at its sole cost and expense,
and any additional premium or other charge in connection therewith shall be paid
by the Buyer. The Buyer shall not be entitled to be added to or acquire an
interest in any policy of insurance obtained by the Seller. Any loss on or after
the Closing Date either to the Borrower, the Buyer or to the value or
collectability of the Loans due to the Seller's cancellation of collateral or
real property risk insurance or its failure to identify Buyer as loss payee,
mortgagee or other insured is the sole responsibility of the Buyer.
5. Representations and Warranties of the Buyer. The Buyer hereby represents
and warrants as follows:
5.1 Organization, Existence, Etc. The Buyer is duly formed or organized,
validly existing and in good standing under the laws of the jurisdiction of its
formation or organization, and is registered or qualified to conduct business in
all other jurisdictions in which the failure to be so registered or qualified
would materially and adversely affect the ability of Buyer to perform its
obligations hereunder.
5.2 Authority and Enforceability, Etc. The Buyer has the power and
authority to execute, deliver and perform each of the Sale Documents to which it
is a party and has taken all necessary action to authorize such execution,
delivery and performance. The Buyer's execution of this Agreement and its
performance of its obligations hereunder are not subject to any further
approval, vote or contingency from any person or committee. Assuming due
authorization, execution and delivery by the Seller, the Sale Documents and all
obligations of the Buyer thereunder are the legal, valid and binding obligations
of the Buyer, enforceable in accordance with the terms of the Sale Documents,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization or other laws affecting the enforcement of creditors' rights
generally and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
5.3 Conflict with Existing Laws or Contracts. The execution and delivery
of the Sale Documents and the performance by the Buyer of its obligations
thereunder will not conflict with or be a breach of any provision of any law,
regulation, judgment, order, decree, writ, injunction, contract, agreement or
instrument to which the Buyer is subject; and the Buyer has obtained any
consent, approval, authorization or order of any court or governmental agency or
body required for the execution, delivery and performance by the Buyer of the
Sale Documents.
5.4 Financial Condition. Neither the Buyer nor any general partner,
limited partner, shareholder or joint venturer in the Buyer is involved in any
financial difficulties which would impair or prevent a closing pursuant to this
Agreement on the Closing Date. The Buyer has now and will have as of the Closing
Date sufficient liquid assets, capital and net worth to meet its obligations
under the Sale Documents and to pay the Purchase Price without any financing or
other contingencies.
5.5 Decision to Purchase. The Buyer's bid and decision to purchase the
Loans is based upon its own comprehensive review and independent expert
evaluation and analysis of the Review File and other materials deemed relevant
by the Buyer and its agents. The Buyer has made such independent investigation
as the Buyer deems to be warranted into the nature, title, attachment,
perfection, priority, validity, enforceability, collectability, and value of the
Loans, the title, condition and value of any collateral securing the Loans, the
market conditions and other characteristics of the places where any such
collateral is located, and all other facts it deems material to the purchase of
the Loans.
5.6 No Reliance. In entering into this Agreement and the other Sale
Documents, the Buyer has not relied upon any oral or written information from
the Seller, Consultant, or any of their respective employees, agents, attorneys
or representatives, other than the limited representations and warranties of the
Seller contained herein. The Buyer acknowledges that no employee, agent,
attorney or representative of the Seller or Consultant has been authorized to
make, and that the Buyer has not relied upon, any statements, representations or
warranties other than those specifically contained in this Agreement.
5.7 Buyer a Sophisticated Investor. The Buyer is a sophisticated investor
(as that term is used in regulations promulgated under the Securities Act of
1933) who could withstand the loss of the entire Purchase Price.
5.8 Information True and Correct, Full Disclosure. The information
provided by the Buyer in connection with its qualification as a bidder, was true
and correct on the date provided and did not omit any information necessary to
the accuracy and full disclosure of information provided and such information is
accurate and complete on the date hereof except as the Buyer has otherwise
disclosed in writing to the Seller upon or prior to submitting its bid.
5.9 Confidentiality Agreement. The Buyer has not violated any of the terms
of the Confidentiality Agreement. At no time has Buyer or any of its
representatives or agents communicated with the Borrower or any of its
representatives or agents regarding the Loans. Buyer has no affiliation with,
any ownership interest in, or agreement with the Borrower or any of its
representatives or agents regarding the Loans.
5.10 Brokers. No broker or other party entitled to a commission is
involved in connection with this transaction other than Consultant.
6. Seller's Representations, Warranties and Recourse. This sale is made without
recourse against the Seller, or representation or warranty by the Seller,
whether expressed, implied or imposed by law, of any kind or nature except as
provided in Section 6 of this Agreement. The Seller has attempted to provide
accurate information to all prospective Bidders. Without limiting the generality
of the foregoing, the Seller does not represent, warrant or insure the accuracy
or completeness of any information or its sources of information contained in
the Bid Package or in the Review File, Collateral Documents, Certificate, Notes,
or Loans (whether contained in originals, duplicate originals, copies, or
magnetic media, including computer tapes and disks), including without
limitation any reports or other information prepared by accountants, engineers,
appraisers, environmental consultants or other professionals. The Seller has
not, does not and will not make any representations or warranties with respect
to the collectibility of the Loans or the value or condition of the Mortgaged
Property.
6.1 Representations and Warranties by the Seller. The Seller hereby
represents and warrants as follows:
6.1.1 Organization, Existence, Etc. The Seller is duly formed or
organized, validly existing and in good standing under the laws of the
jurisdiction of its formation or organization, and is registered or qualified to
conduct business in all other jurisdictions in which the failure to be so
registered or qualified would materially and adversely affect the ability of
Seller to perform its obligations hereunder.
6.1.2 Authority, Enforceability, Etc. The Seller has taken all necessary
action to authorize execution, delivery and performance of each of the Sale
Documents to which it is a party. Assuming due authorization, execution and
delivery by the Buyer, the Sale Documents and all the obligations of the Seller
thereunder are the legal, valid and binding obligations of the Seller
enforceable in accordance with the terms of the Sale Documents, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization or other
laws affecting the enforcement of creditors' rights generally and by general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
6.1.3 Conflict with Existing Laws or Contracts. The execution and delivery
of the Sale Documents and the performance by the Seller of its obligations
thereunder will not conflict with or be a breach of any material provision of
any law, regulation, judgment, order, decree, writ, injunction, contract,
agreement or instrument to which the Seller is subject; and to the best of
Seller's knowledge, the Seller has obtained any consent, approval, authorization
or order of any court or governmental agency or body required for the execution,
delivery and performance by the Seller of the Sale Documents.
6.1.4 Legal Action Against Seller. There is no action, suit or proceeding
of which the Seller has received actual notice pending against Seller in any
court or by or before any other governmental agency or instrumentality which
would materially affect the ability of Seller to carry out the transactions
contemplated by the Sale Documents.
6.1.5 Brokers. No broker or other party, claiming by, through or under
Seller, entitled to a commission is involved in connection with this transaction
other than Consultant.
6.2 Representations and Warranties by Seller as to the Loans. Except as
otherwise disclosed in the Review File, Seller hereby represents and warrants
that, as to the Loans, the following representations and warranties are true and
correct in all material respect as of the date hereof.
6.2.1 Title to Loans. To the best of Seller's knowledge, the Seller has
good title to and is the sole owner of the Loans, free and clear of any liens,
claims, encumbrances or other charges whatsoever. Except as disclosed in the
Review File, the Seller has not previously assigned, conveyed, participated or
transferred the Loans in whole or in part, nor entered into any agreement to do
any of the preceding
6.2.2 Enforceability. To the best of Seller's knowledge, the Notes and the
Mortgage are the legal, valid and binding obligations of the Borrower thereof,
enforceable against the Borrower in accordance with their terms (a) except as
such enforcement may be limited by bankruptcy, insolvency, reorganization or
other similar laws affecting the enforcement of creditors' rights generally and
by general equity principles (regardless of whether such enforcement is
considered in a proceeding in equity or at law) and (b) except particular
remedies, waivers and other provisions may not be enforceable, but to the best
of Seller's knowledge such unenforceability does not affect the practical
realization of the intended benefits of the Mortgage, meaning the ability of the
holder thereof to foreclose the Mortgage for any payment default by the maker or
obligor thereunder.
6.2.3 No Defense by Borrower. To the best of Seller's knowledge, the
Borrower has no valid defense that prevents enforcement by the holder thereof of
the provisions of the Notes or Mortgage, or realization by the holder thereof or
its assigns against the Mortgaged Property that arises from applicable local,
state or federal laws, regulations or other requirements pertaining to usury and
any or all other requirement of any federal, state or local law including,
without limitation, truth-in-lending, real estate settlement procedures,
consumer credit protection, and equal credit opportunity or disclosure laws
applicable to such Loans. To the best of Seller's knowledge, the Loans are not
subject to any valid right of rescission, set-off, abatement, diminution,
counterclaim or defense that prevents enforcement by the Seller thereof or its
assigns of the provisions of the Notes or Mortgage, or realization by the Seller
thereof or its assigns against the Mortgaged Property of the intended benefits
of such Mortgage and to best of Seller's knowledge no such claims have been
asserted as of the date hereof with respect to such Loan.
6.2.4 Mortgage Priority/Title Insurance. The holders of the Mortgage are
named insureds under certain loan title insurance policies which insure that the
Mortgage are valid perfected deeds of trust, subject only to the exclusions,
exceptions, conditions, stipulations, and limitations set forth in such loan
title insurance policies, attorney's certification of title or other reports or
documents contained in the Review File.
6.2.5 Certain Schedule Information. To the best of Seller's knowledge, the
statement of the principal balances and accrued and unpaid interest for the
Loans set forth in Schedule A is true and correct as of the date of calculation.
6.2.6 No Modification. Except by written instrument or other written
documentation contained in the Review File, neither the Seller nor, to the best
of Seller's knowledge, any prior holder of the Loans has modified the Notes or
the Mortgage or satisfied, canceled or subordinated the Notes or the Mortgage in
whole or in part or released all or any material portion of the Mortgaged
Property from the lien of the Mortgage or executed any instrument of release,
cancellation or satisfaction. The Certificate, the Notes, and the Mortgage and
any documents modifying their terms included in the Review File are true and
correct copies of the documents they purport to be and have not been superseded,
amended, modified, canceled or otherwise changed except as disclosed in the
Review File.
6.2.7 Review File. The Review File includes all material documents in the
possession of the Seller, or copies thereof, relating to the Loans.
6.2.8 Disbursement of Loan Proceeds. The Borrower does not have the right
to disbursement of additional loan proceeds or future advances with respect to
the Loans.
6.2.9 Cross-Collateralization. The Loans are not secured by the same
property as any other loan held by Seller or its affiliated entities which is
not the subject of this Agreement.
6.2.10 Litigation. Seller has been informed orally of the existence of a
judgement rendered by a court in the State of Georgia against Emerald Cove
Partners Limited Partnership and Ronald P. Curry said to be in the approximate
amount of $200,000, in favor of a real estate broker. Seller has no written
information and no further knowledge of such judgment. Except for the
aforementioned judgement, to the best of Seller's knowledge, the Seller has
received no notice of any litigation, proceeding or governmental investigation
pending, or any order, injunction or decree outstanding, existing or relating to
the Loans or Mortgaged Property.
6.2.11 Condemnation. To the best of the Seller's knowledge, the Seller has
received no notice of any pending or threatened condemnation proceeding or
similar proceeding affecting the Mortgaged Property or any part hereof which
could have an adverse effect upon the current use of the Mortgaged Property for
its intended purposes.
6.2.12 Compliance with Laws. To the best of the Seller's knowledge, except
as disclosed in the Review File, the Seller has received no written notice
issued by any governmental authority or any party entitled to enforce a
restrictive covenant affecting the Mortgaged Property to the effect that (i) any
zoning law, ordinance or regulation was violated as of the date of closing of
the Loans by the maintenance, operation, occupancy or use of any of the
Mortgaged Property such that the violation would adversely affect the current
operation, current occupancy or current use of the Mortgaged Property, (ii) any
building, or other federal, state or municipal law, ordinance, regulation, or
any restrictive covenant is currently violated by the current maintenance,
current operation, current occupancy, or current use of any of the Mortgaged
Property such that the violation would adversely affect the current operation,
current occupancy or current use of the Mortgaged Property or (iii) any
licenses, permits, inspections, authorizations, certifications and approvals
required by any governmental authorities having jurisdiction over the operation
of the Mortgaged Property, in its present manner, have not been performed or
issued and paid for and are not in full force and effect, in each case without
which the operation of the Mortgaged Property would be adversely affected.
6.2.13 Real Estate Taxes. To the best of Seller's knowledge, Seller has
not received any written notice of any unpaid real property taxes due and
payable against the Mortgaged Property or any penalties or interest thereon
except as disclosed in the municipal lien certificate included in the Review
File. For the purposes of this representation and warranty, real estate taxes
shall not be deemed to be due and payable until the Business Day immediately
preceding the date on which such taxes would become delinquent such that
interest would accrue or penalties would become assessable thereon.
6.2.14 Environmental Matters. To the best of Seller's knowledge, except as
disclosed in the Review File, and the Seller has not received any written notice
that the Mortgaged Property is contaminated by Hazardous Substances at a level
or in amount that poses a threat to human health or the environment sufficient
to require remediation under any federal or state law at a cost of more than
$100,000.
7. Conditions Precedent to Closing. The respective obligations of the Buyer and
the Seller to complete the purchase and sale of the Loans pursuant to this
Agreement are subject to the fulfillment on or prior to Closing Date of each of
the following additional conditions to be fulfilled by the other, unless the
same is specifically waived in writing by the party for whose benefit the same
is to be fulfilled:
7.1 Performance of Covenants. The Seller and the Buyer shall have
performed all of their respective covenants and agreements contained herein
which are required to be performed by them on or prior to the Closing Date.
7.2 Representations and Warranties. All representations and warranties of
the Buyer and Seller set forth in this Agreement shall be true in all material
respects at and as of the Closing Date.
7.3 Governmental Approvals. All requisite federal, state and local
governmental and regulatory approvals relating to the transactions contemplated
hereby, if any, shall have been obtained.
7.4 Other Approvals. Upon the request of the other, the Seller and the
Buyer shall provide certified copies of appropriate resolutions, directions and
consents approving the execution and delivery of the Sale Documents and the
consummation of the transactions contemplated thereby together with such other
certificates of incumbency and other evidences of authority as the Seller or the
Buyer or their respective counsel may reasonably require.
8. Certain Obligations of the Buyer.
8.1 Collection Practices. The Buyer will not violate any laws relating to
unfair credit collection practices in connection with the Loans. The Buyer
hereby agrees to indemnify the Seller and to hold it harmless from and against
any and all claims, demands, losses, damages, penalties, fines, forfeitures,
judgments, legal fees and any other costs, fees, and expenses incurred by the
Seller as a result of (1) a breach by the Buyer of the aforesaid warranty or (2)
any claim, demand, or assertion that, after the Closing Date, the Seller was in
any way involved in or had in any way authorized any unlawful collection
practices in connection with the Loans transferred to the Buyer pursuant to this
Agreement. The Buyer agrees to notify the Seller within ten (10) Business Days
of notice or knowledge of any such claim or demand.
8.2 Reporting to or for the Internal Revenue Service. The Buyer agrees to
submit all Internal Revenue Service Forms and Information Returns for the Loans
for the full year in which the closing occurs and thereafter.
9. Notice to Borrower. The Buyer shall, within five (5) Business Days after
the Closing Date, give notice of this transfer to the Borrower, with a copy to
the notice to the Seller, by first class U.S. Mail.
10. Notice of Claim. The Buyer shall immediately notify the Seller of any
claim, threatened claim, or any litigation against the Seller, Consultant, or
any of their predecessors or affiliates which may come to its attention relating
to the Loans.
11. Notices. All notices or deliveries required or permitted hereunder
shall be in writing and shall be deemed given when personally delivered to the
individual hereinafter designated or when actually received by means of
facsimile transmission, overnight mail, or registered or certified mail, return
receipt requested, at the following address, or such other address as either
party may hereafter designate by notice given in compliance with this Section to
the other party:
BUYER: PNL Partners 2000, L.P.
2121 San Jacinto, Suite 2900
Dallas, TX 75201
Attention: David Porter
Telephone Number: (214) 379-9000
Fax Number: (214) 379-9001
SELLER: PaineWebber Insured Mortgage Partners 1-B, L. P.
c/o PaineWebber Properties
265 Franklin Street, 15th Floor
Boston, MA 02110
Attention: Mark Dunne
Telephone Number: (617) 439-8110
Fax Number: (617) 345-8725
With copies to:
Jeffrey S. Nolan
35 Grosvenor Park #2
Lynn, MA 01902
Telephone Number: (617) 803-8019
Facsimile Number: (781) 592-0151
and:
Bartlett, Hackett, Feinberg P.C.
10 High Street Suite #920
Boston, MA 02110
Attention: Brian Plunkett, Esq.
Telephone Number: (617) 422-0200
Facsimile Number: (617) 422-0383
Any notice sent by fax must be confirmed by delivery of an original or hard copy
on the next Business Day following transmission.
12. Severability. Each part of this Agreement is intended to be severable. If
any term, covenant, condition or provision hereof is unlawful, invalid, or
unenforceable for any reason whatsoever, and such illegality, invalidity, or
unenforceability does not affect the remaining parts of this Agreement, then all
such remaining parts hereof shall be valid and enforceable and have full force
and effect as if the invalid or unenforceable part had not been included.
13. Construction. Unless the context otherwise requires, singular nouns and
pronouns (including defined terms), when used herein, shall be deemed to include
the plural and vice versa, and impersonal pronouns shall be deemed to include
the personal pronoun of the appropriate gender.
14. Assignment. This Agreement and the terms, covenants, conditions, provisions,
obligations, undertakings, rights and benefits hereof, including any attachments
hereto, shall be binding upon, and shall inure to the benefit of, the
undersigned parties and their respective heirs, executors, administrators,
representatives, successors, and assigns. Notwithstanding anything herein to the
contrary, however, Buyer shall not assign its rights under this Agreement
without the prior written consent of the Seller, and in any event no such
assignment shall relieve Buyer of any liability hereunder.
15. Prior Understandings. This Agreement supersedes any and all prior
discussions and agreements between the Seller and the Buyer with respect to the
purchase of the Loans and other matters contained herein, and this Agreement
contains the sole and entire understanding between the parties hereto with
respect to the transactions contemplated herein.
16. Survival. Each and every covenant made by the Buyer or the Seller in this
Agreement shall survive the closing and shall not merge into the closing
documents, but instead shall be independently enforceable, provided, however,
that the Seller's representations and warranties set forth in Section 6.1 and
6.2 shall expire (30) thirty days after the Closing Date, after which time no
claim for breach of Seller's representations or warranties may be made.
17. Choice of Law. This Agreement and claims arising out of or in connection
therewith shall be governed by and construed and enforced in accordance with the
laws of the state of the Seller's incorporation or organization, or, if Seller
is organized under the laws of the United States or a foreign jurisdiction, the
state of the Seller's principal place of business, and the Buyer consents to
jurisdiction in the federal or state courts situated in the city or county of
the Seller's principal place of business.
18. Time of the Essence. Time is of the essence of all provisions of this
Agreement.
19. Remedies and Recourse. In the event that the Seller shall have any liability
hereunder or in connection with the transactions contemplated hereby with
respect to the Loans, the Buyer's sole claim shall be against Seller and Buyer
shall not make any claim against Consultant, its parents, subsidiaries,
affiliates, agents or employees. Consultant shall not have any personal
liability hereunder or in connection with the transactions contemplated hereby.
20. Limitation of Damages. Neither party shall be liable to the other party for
any consequential, special or punitive damages. If after the Closing Date the
Seller breaches any representation or warranty set forth in Section 6 which has
not expired, the Buyer shall give written notice to the Seller within 30 days of
the date of this agreement and the Seller shall have the right to cure such
breach during a period of ninety (90) days after receipt of such notice. If such
breach or failure is not duly cured within such ninety (90) day period, or not
waived or consented to in writing by the Buyer, the Seller may elect, in its
sole discretion to either (i) repurchase the Loans at the Repurchase Price, or
(ii) to pay to Buyer the Buyer's actual damages directly caused by such breach,
up to an amount not exceeding the Repurchase Price. The Buyer's remedies set
forth in this Section 20, shall be the exclusive remedies of the Buyer, and the
Buyer shall not be entitled to any other rights, remedies or other relief, at
law or in equity, for Seller's breach of any representation or warranty set
forth in this Agreement.
[Remainder of Page Intentionally Left Blank]
<PAGE>
EXECUTED AS AN INSTRUMENT UNDER SEAL AS OF THE DATE WRITTEN ABOVE.
BUYER*: SELLER:
PNL Partners 2000, L.P. PaineWebber Insured Mortgage Partners 1-B, L. P.
By: /s/ David Porter By: /s/ Walter V. Arnold
------------------ --------------------
David Porter Walter V. Arnold
Title: Manager of GP Title: Senior Vice President
----------------- ----------------------
* THE BUYER ACKNOWLEDGES AND ACCEPTS THAT THE BID PROCESS SPECIFICALLY REQUIRED
THAT THIS AGREEMENT, THE OTHER SALE DOCUMENTS AND ALL OTHER DOCUMENTS CONTAINED
IN THE BID PACKAGE BE SIGNED WITHOUT MODIFICATION THERETO, AND THAT ANY SUCH
MODIFICATION, IF MADE BY THE BUYER, ARE OF NO FORCE AND EFFECT. THE BUYER AGREES
THAT THE FAILURE OR REFUSAL OF THE SELLER TO ALTER OR MODIFY IN ANY WAY THE
TERMS OR CONDITIONS OF THIS AGREEMENT SHALL NOT AFFECT THE OBLIGATION OF THE
BUYER TO PERFORM HEREUNDER.
PaineWebber - Emerald Cove Partners Limited Partnership
Sale of GNMA Certificate (CUSIP #36220JAU0)
Sale of non-performing Subordinated Note in the amount of $10.00
Sale of non-interest bearing Promissory Note in the amount of $52,143.75
<PAGE>
APPENDIX A
----------
Definitions
-----------
"Bid Form" means the form bid to purchase the Loans submitted by Buyer and
accepted by Seller in accordance with the terms of the Bid Package.
"Bid Package" means and includes all correspondence to Buyer concerning
this transaction, the Bid Form, the Confidentiality Agreement, this Agreement
and all documents relating hereto.
"Bid Percentage" means the percentage amount bid by the Buyer for the
Loans as shown on the Bid Form.
"Borrower" means Emerald Cove Partners Limited Partnership; except that in
reference to the Promissory Note, "Borrower" means Ronald P. Curry, A.G. Wise
and Ralph Abercia.
"Business Day" means any day other than a Saturday, Sunday or national
holiday.
"Buyer" is defined in the preamble hereto, and shall also mean and include
its heirs, personal representatives, successors and assigns.
"Calculation Date" is defined as July 20, 2000.
"Certificate" means the book-entry GNMA pass-through certificate (CUSIP
#36220JAU0) in the original amount of $10,873,900 dated April 1, 1992 issued by
Love Funding Corporation.
"Closing Date" is defined as July 21, 2000 or such other date as Seller
and Buyer may agree in writing.
"Closing Documents" is defined in Section 4.1 of this Agreement.
"Collateral Document" means the Mortgage, any assignments of leases and
rents, security agreements, financing statements, guaranties, and other
agreements or documents, whether an original or a copy and whether or not
similar to those enumerated, evidencing, securing, guarantying or otherwise
documenting or giving notice of the Loans and any performance or payment
obligations with respect thereto, and title insurance policies insuring the
liens thereof, provided, however, that the term "Collateral Document" shall
expressly exclude the Notes.
"Collections" means all payments, proceeds and/or awards, actually
received by the specified holder of the Notes, in cash, including checks which
have been reduced to good funds,
"Confidentiality Agreement" means any confidentiality agreement executed
by Buyer in favor of Seller relating to the sale of the Loans.
"Consultant" means Jeffrey S. Nolan (35 Grosvenor Park #2 Lynn,MA. 01902)
agent for Seller.
"Earnest Money" means the non-refundable payment under this agreement
equal to $135,000 which Buyer shall deliver to Seller no later than the close of
business on the Business Day following notice to Buyer from Seller of its
selection as the winning bidder.
"Escrow Agent" is defined in Section 3 of this Agreement, and shall also
mean and include its heirs, personal representatives, successors and assigns.
"Hazardous Substances" means any material or substance defined or
designated as a pollutant, contaminant, hazardous or toxic waste, hazardous,
extremely hazardous, toxic or acutely toxic waste, substance, material or
constituent or other similar term (including, without limitation, asbestos,
petroleum or any fractions thereof, infectious, carcinogenic or other etiologic
agents, and urea formaldehyde), by any Federal, state or local environmental
statute, regulation, or ordinance presently in effect.
"Loans" means (a) the Certificate; (b) the loan obligations and debts
evidenced by the, Subordinated Note and Promissory Note; (c) all rights to
payment and other rights, title and interests of the Seller in, to and under the
Certificate, Subordinated Note and Promissory Note, specifically including, all
accrued interest and late charges; (d) each Collateral Document; (e) all rights,
title, interests, powers, liens or security interests of the Seller in, to or
under each Collateral Document, including without limitation claims and rights
to and interests in proceeds of hazard or casualty insurance covering collateral
securing such Loan and awards in eminent domain and condemnation proceedings
affecting such collateral; (f) all Collections received by the Seller on or
after the date of this Agreement and then or thereafter actually collected in
good funds; (g) any right, claim or cause of action, and any liability or
counterclaim associated therewith, arising out of or in connection with
litigation pending, if any; (h) any judgment or execution based upon the
Certificate, Subordinated Note and Promissory Note or any Collateral Document,
to the extent attributable thereto, and any lien arising from any such judgment
or execution; and (i) all other documents held by Seller contained in the Review
File with respect to the Loans.
"Mortgage" means the Subordinated Deed of Trust given by Borrower dated
March 26, 1992 and recorded in the Mecklenburg County Registry of Deeds in Book
6825, Page 259, including, without limitation, all modifications,
restructurings, extensions consolidations and amendments thereof.
"Mortgaged Property" means the real property covered by the Mortgage.
"Notes" means the Certificate, Subordinated Note and Promissory Note.
"Promissory Note" means the non-interest bearing promissory note in the
amount of $52,143.75 dated March 30, 1992 made by Ronald P. Curry, A.G. Wise and
Ralph Abercia jointly and severally.
"Purchase Price" means the principal balance of the Certificate on the
Closing Date plus the agreed upon amount for the purchase of the
Subordinated Note and Promissory Note as stated in the Offer Acceptance
Agreement dated July 10, 2000.
"Repurchase Price" means with respect to the Loans, the price to be paid
by Seller for such Loans if repurchased from Buyer pursuant to the terms of this
Agreement, which shall be computed as follows:
(a) the adjusted Purchase Price for such Loans paid by Buyer;
minus
(b) all amounts paid by the Borrower or otherwise received
or collected by Buyer in respect of the Loans between
the Closing Date and the repurchase date (whether
characterized as principal, interest, principal and
interest, fees, expenses, proceeds and any other payment
of every kind and nature), which amounts shall be
evidenced and certified by Buyer to Seller as true and
accurate; minus
(c) any diminution in the value of the Loans since the
Closing Date attributable to the action, omission or
fault of Buyer; plus
(d) all (i) reasonable amounts paid by the Buyer in good
faith to third parties to collect principal, interest
and other amounts due under the Loans, and (ii)
commercially reasonable advances made by the Buyer to
third parties in order to protect the security of its
collateral and other advances made by the Buyer pursuant
to the Collateral Documents, in each case from the
Closing Date to the repurchase date (as evidenced by
invoices and canceled checks) and (iii) all accrued and
unpaid interest from the Closing Date through the
repurchase date on such Loans.
"Review File" means all instruments and documents, in the files of the
Seller pertaining to the Loans, including without limitation, the Notes and any
Collateral Documents and any loan summaries prepared by Consultant or the
Seller, but excluding any documents prepared by or for the use of Seller or
Consultant regarding the valuation of the Loans.
"Sale Documents" means the Bid Package, this Agreement and all attachments
hereto, and all other instruments, agreements, certificates and other documents
at any time executed and delivered by or on behalf of the Seller and/or Buyer in
connection with the sale of the Loans.
"Separate Loan Assignments" is defined in Section 4.5 of this Agreement.
"Seller" is defined in the preamble hereto and shall also mean and include
its successors and assigns.
"Seller; Sellers Knowledge" Whenever a representation is made to "the
Seller's knowledge," "the best of Seller's knowledge," or a term of similar
import, the accuracy of such representation shall be based solely on the actual
knowledge of Mark Dunne, without independent investigation or inquiry. Mark
Dunne is Seller's authorized agent who has had primary responsibility for the
sale of the Loan to Buyer. Notwithstanding any other provision of this
Agreement, if prior to the Closing, Buyer obtains actual knowledge that any
representation or warranty of Seller is inaccurate and Buyer nonetheless
proceeds with the Closing, Seller shall have no liability for any such matter
regarding which Buyer had actual knowledge prior to Closing.
"Subordinated Note" means the $10.00 Subordinated Note dated December 6,
1989 from Borrower payable to the order of Seller, including, without
limitation, all modifications, restructurings, extensions consolidations and
amendments thereof.
SCHEDULE A
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STATEMENT OF BALANCES
---------------------
Certificate: The current outstanding principal balance under the
Certificate as of 7/6/00 is $10,431,203.92. The next payment of principal and
interest under the Certificate, in the scheduled amount of $81,266.75 is due on
July 17, 2000. This payment will not be included in the sale. The principal
balance of the Certificate after the July 17th payment will be updated prior to
the closing date to reflect the principal payment associated with the July 17th
payment.
Subordinated Note (nominal principal amount of $10.00): Contingent
Interest payments due on this note have not been paid per the terms of the note.
No payments have been received during the term of this note.
Promissory Note in the amount of $52,143.75 dated March 30, 1992 executed
jointly and severally by Ronald P. Curry, A.G.Wise and Ralph Abercia. This is a
non-interest bearing note.
<PAGE>
BILL OF SALE
------------
PaineWebber Insured Mortgage Partners 1-B, L. P. (the "Seller"), for value
received and pursuant to the terms and conditions of that certain Asset Sale
Agreement dated July 11, 2000 between the Seller and PNL Partners 2000, L.P.
(the "Buyer"), does hereby sell, assign, transfer and convey to Buyer, its
heirs, administrators, representatives, successors and assigns, all rights,
title and interests of the Seller, as of the date hereof, in, to and under the
Loans described in the Asset Sale Agreement.
THIS BILL OF SALE IS EXECUTED WITHOUT RECOURSE AND WITHOUT REPRESENTATIONS
OR WARRANTIES OF ANY KIND OR NATURE, EXPRESSED, IMPLIED OR IMPOSED BY LAW,
EXCEPT AS PROVIDED IN THE ASSET SALE AGREEMENT.
EXECUTED this 21st day of July, 2000.
SELLER: PaineWebber Insured Mortgage Partners 1-B, L. P.
By: First Insured Mortgage Partners, L.P., its
general partner
By: First Insured Mortgage Partners, Inc., its
managing general partner
/s/ Margaret A. Fitts
---------------------
Name: Margaret A. Fitts
Title: Vice President
<PAGE>
Allonge
-------
Reference is made to the $10.00 Subordinated Note dated December 6, 1989
from Emerald Cove Partners Limited Partnership (the "Subordinated Note") payable
to the order of PaineWebber Insured Mortgage Partners 1-B, L. P. ("Assignor").
It is intended that this Allonge be attached to and made a permanent part of the
Note.
Pay to the order of PNL Partners 2000, L.P. ("Assignee"), without
recourse, representations or warranties of any kind.
Executed this 21st day of July, 2000.
PaineWebber Insured Mortgage Partners 1-B, L. P.
By: First Insured Mortgage Partners, L.P., its
general partner
By: First Insured Mortgage Partners, Inc., its
managing general partner
/s/ Margaret A. Fitts
---------------------
Name: Margaret A. Fitts
Title: Vice President
<PAGE>
ASSIGNMENT OF DEED OF TRUST
---------------------------
PaineWebber Insured Mortgage Partners 1-B, L. P. ("Assignor"), having an
address of c/o PaineWebber Properties Incorporated, 265 Franklin Street, Boston,
MA 02110, the beneficiary under the Subordinated Deed of Trust given by Emerald
Cove Partners Limited Partnership dated March 26, 1992 and recorded in the
Mecklenburg County Registry of Deeds in Book 6825, Page 259, (together with any
amendments, renewals, extensions, or modifications thereto, the "Deed of Trust")
hereby assigns the Deed of Trust, and the note(s) and claim(s) secured thereby,
to PNL Partners 2000, L.P. ("Assignee") with an address of 2121 San Jacinto,
Suite 2900, Dallas, TX 75201. This assignment is made without recourse,
representations or warranties of any kind.
Executed under seal this 21st day of July, 2000.
PaineWebber Insured Mortgage Partners 1-B, L. P.
By: First Insured Mortgage Partners, L.P., its
general partner
By: First Insured Mortgage Partners, Inc., its
managing general partner
/s/ Margaret A. Fitts
---------------------
Name: Margaret A. Fitts
Title: Vice President
<PAGE>
CLOSING STATEMENT
-----------------
Emerald Cove GNMA MBS (Pool #279119) with notes in the form of a
Subordinated Note secured by the Emerald Cove Apartments in Charlotte,
NC and unsecured Promissory Note.
SELLER: PAINEWEBBER INSURED MORTGAGE PARTNERS 1-B, L.P.
BUYER: PNL PARTNERS 2000, L.P. ("PNL PARTNERS")
CLOSING DATE: FRIDAY, JULY 21, 2000
Description Due on GNMA Due on Notes Total Due
----------- ----------- ------------ ---------
PURCHASE PRICE:
GNMA MBS (@ 100-30) $10,523,853.62 $10,523,853.62
NOTES $489,755.23 489,755.23
INTEREST ON GNMA
FROM 7/01/00 to
07/23/00 58,284.83 58,284.83
------------- ----------- --------------
SUBTOTALS 10,582,138.45 489,755.23 11,071,893.68
LESS: EARNEST MONEY HELD
BY SELLER 0.00 (135,000.00) (135,000.00)
-------------- ----------- --------------
TOTAL DUE TO SELLER $10,582,138.45 $354,755.23 $10,936,893.68
============== =========== ==============
To be transferred To be wired by
via PTC to Seller's PNL Partners to the
agent in accordance Seller's account
with instructions at State Street
previously provided. Bank in accordance
with wire instructions
previously provided.
<PAGE>
BY SIGNING BELOW, Buyer and Seller agree and accept the terms and provisions
in the Closing Statement.
SELLER:
PAINEWEBBER INSURED MORTGAGE PARTNERS 1-B, L.P., a Delaware limited partnership
By: First Insured Mortgage Partners, L.P., a Delaware limited partnership,
the General Partner of PaineWebber Insured Mortgage Partners 1-B, L.P.
By: First Insured Mortgage Partners, Inc., a Delaware corporation, the
Managing General Partner of First Insured Mortgage Partners, L.P.
By: /s/ Margaret A. Fitts
---------------------
Name: Margaret A. Fitts
Title: Vice President
BUYER:
PNL PARTNERS 2000, L.P.
By:
By: /s/ David Porter
----------------
Name: David Porter
Title: Manager of GP
