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) January 26, 2000
----------------
PaineWebber Insured Mortgage Partners 1-B, L.P.
-----------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-18076 04-3038480
- --------------------------------------------------------------------------
(State or other jurisdiction) (Commission (IRS Employer
of incorporation File Number) Identification No.)
265 Franklin Street, Boston, Massachusetts 02110
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 439-8118
---------------
(Former name or address, if changed since last report)
<PAGE>
FORM 8-K
CURRENT REPORT
PAINEWEBBER INSURED MORTGAGE PARTNERS 1-B, L.P.
ITEM 2 - Disposition of Assets
QUARTER MILL - GNMA Certificate and Participating Mortgage Loan
Disposition Date - January 26, 2000
On January 26, 2000, the Partnership received total consideration of
approximately $7,747,000 for the sale of its Participating Insured Mortgage Loan
secured by the Quarter Mill Apartments, a 266-unit facility located in Richmond,
Virginia. The Participating Insured Mortgage Loan consists of a GNMA Certificate
with an 8.5% coupon interest rate and a subordinated note securing the
Contingent Component of the Partnership's interest in the Quarter Mill property.
The Contingent Component of the Participating Insured Mortgage Loan provides for
the payment of Contingent Interest equal to 30% 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 $7,074,000. 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 October 31, 1999, the Partnership had engaged the services of
a nationally recognized mortgage brokerage firm to market the Quarter Mill
Participating Loan for sale. Initial marketing materials were distributed to
over 100 buyers of these types of investments in the secondary market. All
offers were due by January 19, 2000 and a sale was expected to close shortly
thereafter if the offers equaled or exceeded a specified minimum price. As a
result of these marketing efforts, several offers were received and the minimum
sale price was exceeded. The winning bidder funded a non-refundable deposit of
$105,000 on January 20, and the remainder of the proceeds were received on
January 26. As a result of this transaction, the Partnership no longer has any
interest in the Quarter Mill property.
As a result of the disposition on January 26, 2000 of the Partnership's
investments secured by the Quarter Mill Apartments, the Partnership expects to
make a Special Distribution of the net proceeds of this transaction on or before
March 15, 2000 to unitholders of record as of January 26, 2000.
As also discussed further in the Partnership's Quarterly Report on Form
10-Q for the Quarter Ended October 31, 1999, the Partnership has been analyzing
potential disposition strategies for its remaining investments. Subsequent to
the disposition of the Partnership's Quarter Mill investment, management has
begun the process of liquidating the Partnership's portfolio of
non-participating mortgage-backed securities through secondary market sale
transactions. Such sales are expected to be completed by late February 2000. In
addition, the Partnership continues to evaluate the current economic benefits it
would receive if the owner of the Emerald Cove Apartments was to prepay its
Participating Loan in the near term. If a near term prepayment of the Emerald
Cove investment is not completed, in all likelihood, the Partnership will
conduct a secondary market sale process similar to the one completed for Quarter
Mill. Under either scenario, management expects to be able to complete a
liquidation of the Partnership by early in the second quarter of calendar year
2000. There are no assurances, however, that the dispositions of the remaining
assets and a liquidation of the Partnership will be completed within this time
frame.
ITEM 7 - Financial Statements and Exhibits
(a) Financial Statements: None
(b) Exhibits:
(1) Asset Sale Agreement dated January 20, 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 January 26, 2000.
(3) Allonge dated January 26, 2000.
(4) Assignment of Deed of Trust dated January 26, 2000.
(5) Closing Statement.
<PAGE>
FORM 8-K
CURRENT REPORT
PAINEWEBBER INSURED MORTGAGE PARTNERS 1-B, L.P.
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.
---------------------------
(Registrant)
First Insured Mortgage Partners, Inc.
By: /s/ Walter V. Arnold
--------------------
Walter V. Arnold
Senior Vice President and
Chief Financial Officer
Date: February 8, 2000
<PAGE>
ASSET SALE AGREEMENT
PaineWebber - Quarter Mill Loan Sale
THIS ASSET SALE AGREEMENT (Agreement), entered into this 20th day of
January, 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
Looney, Cohen, Reagan & Aisenberg (Escrow Agent), 109 State Street, Boston, MA
02109 or at such other place designated by Landauer, provided that the parties
may agree to delivery of closing documents by hand, overnight delivery or mail.
In the event a copy of the Sellers 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) less all principal
payments received by Seller on account of the Loans from the Calculation Date
through the Closing Date multiplied by the Bid Percentage, (iii) less any
escrows held by, or plus any escrows owed to, Seller relating to the Loans, (iv)
plus a proration of the interest portion of the scheduled payment on the
Certificate, (v) plus any protective advances made by Seller, in its reasonable
discretion between the Calculation Date and the Closing Date. The Purchase Price
shall not be adjusted for any Contingent Interest payment due on the
Subordinated Note. All Contingent Interest payments due on the Subordinated Note
with respect to calendar year 1999 and thereafter 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 Buyers review two
Business Days 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, endorsed to the Buyer by allonge in the form
attached hereto as Attachment 2; and (iii) an assignment of the Second 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 Agents 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 Agents 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 Agents
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 Sellers 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 Sellers 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 Sellers 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 Buyers 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 Buyers 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, Landauer, 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 Landauer 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 Landauer.
6. Sellers 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
Sellers 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 Landauer.
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 Sellers 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 Sellers knowledge, the Notes and the
Mortgages 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 Sellers knowledge such unenforceability does not affect the practical
realization of the intended benefits of the Mortgages, meaning the ability of
the holder thereof to foreclose the Mortgages for any payment default by the
maker or obligor thereunder.
6.2.3 No Defense by Borrower. To the best of Sellers knowledge, the
Borrower has no valid defense that prevents enforcement by the holder thereof of
the provisions of the Notes or Mortgages, 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 Sellers 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 Mortgages, or realization by the
Seller thereof or its assigns against the Mortgaged Property of the intended
benefits of such Mortgage and to best of Sellers 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 Mortgages are
named insureds under certain loan title insurance policies which insure that the
Mortgages are valid perfected deeds of trust, subject only to the exclusions,
exceptions, conditions, stipulations, and limitations set forth in such loan
title insurance policies, attorneys certification of title or other reports or
documents contained in the Review File.
6.2.5 Certain Schedule Information. 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 Sellers knowledge, any prior holder of the Loans has modified the Notes or
the Mortgages or satisfied, canceled or subordinated the Notes or the Mortgages
in whole or in part or released all or any material portion of the Mortgaged
Property from the lien of the Mortgages or executed any instrument of release,
cancellation or satisfaction. The Certificate, the Notes, and the Mortgages 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. To the best of Sellers 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 Sellers 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 Sellers 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. 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 Sellers 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, Landauer, 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: David Brooks
Telephone Number: (617) 439-8108
--------------
Fax Number: (617) 345-8725
--------------
With
copies to: Landauer Associates, Inc.
Loan Sale Advisory Group
60 Canal Street, 2nd Floor
Boston, MA 02114
Attention: Thomas R. Goodwin, Managing Director
Telephone Number: (617) 720-1515
Facsimile Number: (617) 367-4284
and: Looney, Cohen, Reagan & Aisenberg
109 State Street
Boston, MA 02109
Attention: William F. Looney III, Esq.
Telephone Number: (617) 371-1050
Facsimile Number: (617) 371-1051
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 Sellers representations and warranties set forth in Section 6.1 shall
expire six months after the Closing Date and the Sellers representations and
warranties set forth in Section 6.2 shall expire ninety days after the Closing
Date, after which time no claim for breach of Sellers 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 Sellers incorporation or organi-zation, or, if Seller
is organized under the laws of the United States or a foreign jurisdiction, the
state of the Sellers principal place of business, and the Buyer consents to
jurisdiction in the federal or state courts situated in the city or county of
the Sellers 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 Buyers sole claim shall be against Seller and Buyer
shall not make any claim against Landauer, its parents, subsidiaries,
affiliates, agents or employees. Landauer 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
discovery of such breach, 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 Buyers actual damages directly caused by such breach,
up to an amount not exceeding the Repurchase Price. The Buyers 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 Sellers breach of any representation or warranty set forth
in this Agreement.
[Signatures on Following Page]
[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/ Peter F. Sullivan
---------------- ---------------------
Title: Manager of GP Title: 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 - Quarter Mill Loan Sale
(Performing)
<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 Landauers 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 Quarter Mill Associates, L.P.
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 January 12, 2000.
Certificate means that certain book-entry GNMA pass-through certificate
evidencing the holders right to receive payments under the Senior Note.
Closing Date is defined as January 26, 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 Mortgages, 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 Certificate, the Notes.
Collections means all payments, proceeds and/or awards, actually received
by the specified holder of the Certificate and Note, in cash, including checks
which have been reduced to good funds, for current application to the
indebtedness of the Borrower under the Loans, whether or not so applied and, if
so applied, whether applied to principal, interest, fees, or any other such
indebtedness.
Confidentiality Agreement means any confidentiality agreement executed by
Buyer in favor of Seller relating to the sale of the Loans.
Earnest Money means the non-refundable payment under this agreement equal
to ten percent (10%) of the Purchase Price 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.
First Mortgage means the Deed of Trust given by Borrower dated August 1,
1989 and recorded August 2, 1989 in the Clerks Office, Circuit Court, County of
Henrico, Virginia in Book 2200, Page 1730, including, without limitation, all
modifications, restructurings, extensions consolidations and amendments thereof.
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.
Landauer means Landauer Associates, Inc., agent for the Seller.
Loans means the loan obligations and debts evidenced by the Certificate
and Subordinated Note and includes (a) the Certificate and Subordinated Note;
(b) all rights to payment and other rights, title and interests of the Seller
in, to and under the Certificate and Subordinated Note, specifically including,
all accrued interest and late charges; (c) each Collateral Document; (d) 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; (e) all Collections received by the
Seller on or after the date of this Agreement and then or thereafter actually
collected in good funds; (f) 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 and Subordinated 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.
Mortgages means the First Mortgage and the Second Mortgage
Mortgaged Property means the real property covered by the Mortgages.
Notes means the Senior Note and the Subordinated Note.
Purchase Price means the dollar amount bid by the Buyer for the Loans as
shown on the Bid Form.
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 Certificate,
the Notes and any Collateral Documents and any loan summaries prepared by
Landauer or the Seller, but excluding any documents prepared by or for the use
of Seller or Landauer 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.
Second Mortgage means the Deed of Trust given by Borrower dated August 1,
1989 and recorded August 2, 1989 in the Clerks Office, Circuit Court, County of
Henrico, Virginia in Book 2200, Page 1755, including, without limitation, all
modifications, restructurings, extensions consolidations and amendments thereof.
Senior Note means the $7,316,600.00 Deed of Trust Note dated August 1,
1989, from Borrower originally payable to the order of PW Funding Inc.
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 Sellers
knowledge, the best of Sellers knowledge, or a term of similar import, the
accuracy of such representation shall be based solely on the actual knowledge of
David Brooks, without independent investigation or inquiry. David Brooks is
Sellers First Vice President and the employee of Seller 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 Promissory Note dated
August 1, 1989 from Borrower payable to the order of Seller, including, without
limitation, all modifications, restructurings, extensions consolidations and
amendments thereof.
END OF APPENDIX A
<PAGE>
SCHEDULE A
STATEMENT OF BALANCES
Certificate: The outstanding principal balance under the Certificate and
the Senior Note is $7,073,562.81. The next payment of principal and interest
under the Certificate, in the scheduled amount of $55,031.31, is due February
15, 2000. This payment will not be included in the sale.
Subordinated Note (nominal principal amount of $10.00): Contingent
Interest from Income in the amount of $26,863.80 was paid to Seller in 1999 with
respect to Net Project Cash Flow (as defined in the Subordinated Note) for
calendar year 1998. Contingent Interest from Income with respect to Net Project
Cash Flow for calendar year 1999 will be determined on the basis of the projects
surplus cash as of December 31, 1999. A payment in the amount of 30% of Net
Project Cash Flow for calendar year 1999 will be due on April 3, 2000. Such
payment is included in the sale of the Loan.
<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 January 20, 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 26th day of January, 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 General Partner
By: /s/ Peter F. Sullivan
---------------------
Peter F. Sullivan,
Vice President
<PAGE>
ALLONGE
-------
Reference is made to the $10.00 Subordinated Promissory Note dated August
1, 1989 from Quarter Mill Associates, L.P. (the 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 26th day of January, 2000.
PaineWebber Insured Mortgage Partners 1-B, L. P.
/s/ Peter F. Sullivan
---------------------
By: Peter F. Sullivan
Its: 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,
Massachusetts 02110, the beneficiary under the Deed of Trust given by Quarter
Mill Associates, L.P., dated August 1, 1989 and recorded August 2, 1989 in the
Clerk's Office, Circuit Court, County of Henrico, Virginia in Book 2200, Page
1755 (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, Texas 75201. This assignment is
made without recourse, representations or warranties of any kind.
EXECUTED under seal this 26th day of January, 2000.
ASSIGNOR: 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 General Partner
By: /s/ Peter F. Sullivan
---------------------
Peter F. Sullivan,
Vice President
<PAGE>
CLOSING STATEMENT
Quarter Mill GNMA MBS (Pool #279985) with participation interest in the
form of a Subordinated Note secured by the 266-unit Quarter Mill
Apartments in Richmond, VA
SELLER: PAINEWEBBER INSURED MORTGAGE PARTNERS 1-B, L.P.
BUYER: PNL PARTNERS 2000, L.P. ("PNL Partners")
CLOSING DATE: WEDNESDAY, JANUARY 26, 2000
Due with Due with
Respect to Respect to Total due
Description GNMA Certificate Subordinated Note from Buyer
----------- ---------------- ----------------- ----------
PURCHASE PRICE:
GNMA MBS (@ 101-17) $7,181,876.75 $7,181,876.75
Subordinated Note $525,000.00 525,000.00
INTEREST ON GNMA
FROM 1/01/00 to 01/25/00 40,083.52 40,083.52
------------- ----------- -------------
SUBTOTALS 7,221,960.27 525,000.00 7,746,960.27
LESS: EARNEST MONEY HELD
BY SELLER 0.00 (105,000.00) (105,000.00)
------------- ----------- --------------
TOTAL DUE TO SELLER $7,221,960.27 $420,000.00 $7,641,960.27
============= =========== =============
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
by Seller to Landauer with wire instructions
Associates. previously provided
by Seller to Landauer
Associates.
<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/ Peter F. Sullivan
---------------------
Name: Peter F. Sullivan
Title: Vice President
BUYER:
PNL PARTNERS 2000, L.P.
By:
By: /s/ David Porter
----------------
Name: David Porter
Title: Manager of GP
