UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-KSB
X ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1994
OR
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 0-9380
CAPITAL PROPERTIES, INC.
(Name of small business issuer in its charter)
Rhode Island 05-0386287
(State or other jurisdiction of IRS Employer Identification No.
incorporation or organization)
One Hospital Trust Plaza, Ste. 920, Providence, Rhode Island 02903
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (401) 331-0100
Securities registered under Section 12(b) of the Exchange Act:
Name of each exchange
Title of each class on which registered
Common Stock-$1.00 par value Boston Stock Exchange
Securities registered under Section 12(g) of the Exchange Act:
None
(Title of Class)
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past
12 months and (2) has been subject to such filing requirements for
the past 90 days. Yes X No
Check if there is no disclosure of delinquent filers in response
to Item 405 of Regulation S-B contained in this form and no
disclosure will be contained, to the best of issuer's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form l0-KSB or any amendment to this
Form 10-KSB. [X]
For the year ended December 31, 1994, the issuer's revenues
totalled $2,832,000.
As of March 1, 1995, the aggregate market value of the voting
stock held by non-affiliates of the issuer was $3,083,000. (For
this purpose, all directors of the issuer are considered
affiliates.)
As of March 1, 1995, the issuer had 1,000,000 shares of Common
Stock outstanding.
Documents Incorporated by Reference - Portions of the proxy
statement for the 1995 annual meeting of shareholders are
incorporated by reference into Part III. Portions of the annual
report to shareholders of Capital Properties, Inc. for the year
ended December 31, 1994 are incorporated by reference into Parts
I, II, and IV.
Exhibit Index - Page IV-1.
Transitional Small Business Disclosure Format. Yes No X
PART I
Item 1. - Description of the Business
Business Development
The Issuer was organized as a business corporation under the
laws of Rhode Island in 1983 as Providence and Worcester Company,
and is the successor by merger in 1983 to a corporation also named
Providence and Worcester Company which was organized under the
laws of Delaware in 1979. The Issuer's corporate name was changed
to Capital Properties, Inc. in 1984.
Business of Issuer
The Issuer conducts petroleum terminal operations (see
"Petroleum Terminal Property" in Item 2 below), holds certain
properties in downtown Providence, Rhode Island (see "Land Under
Long-Term Leases," "Land Under Short-Term Leases," and "Land
Available for Leasing" in Item 2 below) and operates a public
parking garage and other downtown Providence properties as public
parking facilities (see "Parking Garage" in Item 2 below).
The Issuer owns all of the outstanding capital stock of Tri-
State Displays, Inc., through which the Issuer conducts a business
which consists of the leasing of land and boards along interstate
and primary highways for outdoor advertising purposes.
References hereinafter to the "Issuer" are, unless the context
indicates otherwise, collectively to the Issuer and its wholly-
owned subsidiary and its predecessors.
Miscellaneous
For information relating to the Issuer's dependence on one or
a few major customers, see Note 5 of Notes to Consolidated Finan-
I-l
cial Statements in the Issuer's 1994 Annual Report to shareholders
attached hereto as Exhibit 13 (hereinafter referred as the "1994
Annual Report"), which note is incorporated herein by reference.
During the last two years, no monies were expended by the
Issuer and its subsidiaries on material research and development
activities.
Compliance with federal, state and local provisions which have
been enacted or adopted regulating the discharge of materials into
the environment, or otherwise relating to the protection of the
environment, has not had a material effect upon the capital
expenditures, earnings or competitive position of the Issuer.
On December 31, 1994, the Issuer employed a total of 5
persons.
Item 2. - Description of Property
Principal Facilities
The Issuer's principal executive offices occupy 2,300 square
feet in premises located in Providence, Rhode Island and held
under a three-year lease, expiring in March 1998.
Investment Policies
The Issuer has no established policy for the purchase of
additional developed or undeveloped property. However, should
suitable parcels become available in the general area of the
Issuer's current land holdings, the Issuer would consider such an
acquisition depending on current levels of cash and the availa-
bility of financing. Any properties acquired would most likely be
leased primarily to developers or tenants under long-term leases.
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Description of Real Estate and Operating Data
All of the properties described below (except the petroleum
terminal property) are shown on a map on page 6 of the Issuer's
1994 Annual Report, which map is incorporated herein by reference.
All the properties described below are owned in fee by the
Issuer. There are no mortgages, liens or other encumbrances on
such properties except for the Parking Garage (including the
underlying land) and Parcel 22. For a description of the current
principal amount, interest rate and maturity date of the
obligation secured thereby, see Note 6 of the Notes to
Consolidated Financial Statements in the Issuer's 1994 Annual
Report, which note is incorporated herein by reference.
In the opinion of management, all of the properties described
below are adequately covered by insurance. Insurance is also
required of all tenants, with the Issuer being named as an
additional insured.
Petroleum Terminal Property - The Issuer holds title to
approximately 8 acres of land fronting on the Seekonk River in
East Providence, Rhode Island. The property is used and operated
primarily as a petroleum terminal with aggregate storage capacity
of 342,000 barrels. Although the Issuer has no present plan
therefor, the property can be further developed to contain several
more storage tanks.
The Issuer also has the perpetual right to use the Wilkesbarre
Pier in the Port of Providence and its deep-water berth for
receiving petroleum products by tanker, and the additional perpet-
ual right to transport such products from the Pier to its terminal
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property through pipelines owned by a third party. The Issuer
also has the right to use a barge dock in the Seekonk River owned
by a third party for the off-loading of petroleum products.
This is the only independent petroleum storage terminal
facility with deep-water access in the market area.
The terminal property is leased to a single tenant under a
lease which expires in 1996 unless the tenant exercises its option
to renew the lease for an additional five-year period. The annual
rental is $183,000 ($.53 per square foot). Tenant also has the
option to purchase the terminal property at any time during the
first five-year period. The purchase price during the first year
of the lease was $4,500,000 and is increased by an inflation
factor in each of the remaining four years ($4,961,000 at December
31, 1994). All of the petroleum storage tanks and buildings are
owned by the Issuer.
The following schedule sets forth certain information on the
federal tax basis of that portion of the petroleum terminal
property which is depreciated:
<TABLE>
<CAPTION>
Buildings Tanks
<S> <C> <C>
Federal Tax Basis (cost).. $191,021 $2,246,787
Rate ..................... 2.5% to 5% 3.33% to 20%
Method.................... S/L S/L
Life (Years).............. 20 to 40 5 to 33
</TABLE>
The 1994 real estate taxes, which are paid by the tenant, are
$88,137 using a $35.36 tax rate.
Parking Garage - The Issuer owns a 360-car parking garage
adjacent to a rail passenger station in downtown Providence, Rhode
Island, together with the underlying land (the Parking Garage).
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The Parking Garage is operated by the Issuer under a management
agreement with a firm experienced in parking operations, which
agreement is cancellable by either party on short notice. The
Issuer has no present plan for the future improvement of this
property.
The Parking Garage is surrounded by parcels owned by the
Issuer on which there is surface parking. (See "Land Under Short-
Term Leases" below for a discussion of future development.)
Several of these parcels are leased to the firm mentioned above.
Also, there is a parking garage under an apartment building
adjacent to the Parking Garage which, at this time, is available
for public parking. However, since the apartment building is
fully occupied, its garage is not a competitive factor. A 1,680-
car parking garage, constructed in connection with the Convention
Center Project in downtown Providence, opened in 1992, but has not
affected the operations of the Issuer's Parking Garage and
adjacent parking facilities.
The federal tax basis of the Parking Garage (exclusive of the
underlying land) is $2,500,000, which is being depreciated on the
straight-line method at the rate of 2.5% over a 40-year life.
The 1994 real estate taxes are $87,212 on the Parking Garage
and $21,460 on the underlying land using a $28.17 tax rate.
Land Under Long-Term Leases - The Issuer owns approximately
20.5 acres of land within the Capital Center Project area of
downtown Providence, including 1.9 acres of air rights over
Amtrak's Northeast Corridor railroad tracks which run through
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downtown Providence. (The land underlying the Parking Garage
described above is also included in this acreage.) See the map on
page 6 of the Issuer's 1994 Annual Report, which map is
incorporated herein by reference.
At December 31, 1994, land leases for three separate land
parcels within this area have commenced with remaining terms of up
to 98 years. These leases have scheduled rent increases over
their terms. For further information on the development of these
parcels by the tenants, reference is made to the President's
Report at pages 4 and 5 in the Issuer's 1994 Annual Report, which
report is incorporated herein by reference.
The Issuer had a lease on a fourth parcel, which lease had not
commenced due to the inability of the developer to secure
financing. The lease was terminated in 1994. Such termination
has no impact on the operation and liquidity of the Issuer.
Land Under Short-Term Leases - Parcels 3E, 3W, 4E and 4W in
the Capital Center Project area and Parcels 21 and 22 immedi-
ately adjacent to this area are leased to the same firm that
operates the Parking Garage described above for surface parking
purposes. However, the Issuer continues to seek developers for
these parcels, and these leases can be terminated on short notice
should suitable development opportunities arise.
In connection with Parcel 4E, in 1989 the Issuer entered into
a letter of intent with a developer who proposes to construct an
office building. However, due to the current economic conditions
in New England and the difficulty in obtaining credit for
commercial real estate development, the developer has delayed the
project.
I-6
The Issuer is the largest single landowner in the Capital
Center Project area but is nevertheless subject to some measure of
competition from other landowners.
The State of Rhode Island had been storing concrete blocks on
Parcel 9 in the Capital Center Project area in connection with the
moving of two rivers in this area but ceased using the parcel for
storage as of December 31, 1994. The State's final reimbursement
to the Issuer for the property taxes on this parcel will be in
April 1995. The Issuer is currently evaluating the use of the
parcel for surface parking, and a preliminary report indicates
that it may be a viable project. If the Issuer can obtain
appropriate permits for such usage, the site may be ready for
leasing in the second quarter of 1995.
Land Available for Lease - Parcel 6 in the Capital Center
Project area, which is available for lease, is operated by the
Issuer for surface parking under the same management agreement
described above in "Parking Garage."
Item 3. Legal Proceedings
Petition for Assessment of Damages - For a discussion of the
litigation currently pending with the State of Rhode Island,
reference is made to the President's Report at pages 3 and 4 in
the 1994 Annual Report, which report is incorporated herein by
reference.
Arbitration Proceedings - In August 1994, a leak was
discovered in a 25,000 barrel storage tank at the Issuer's
petroleum terminal facilities which are leased to a third party.
The leak allowed the escape of a small amount of fuel oil. The
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tank was emptied, and all required notices were made to the
appropriate environmental agency. No soil contamination has been
detected as a result of this leak, and monitoring wells have to
date shown no groundwater contamination. Accordingly, the
Issuer's engineering consultants have determined that no
additional remediation is necessary at this time. The Issuer is
of the opinion that the tenant of these facilities is solely
responsible for the payment of all costs to repair the tank,
including related professional fees, and for remediation of any
damage caused by such leak. These costs are presently estimated
at $66,000. The tenant does not agree that it is responsible for
the payment of such costs and has instituted arbitration
proceedings to resolve the matter. By mutual agreement of the
parties, the proceedings are being held in abeyance pending the
outcome of settlement discussions.
Item 4. Submission of Matters to a Vote to Security Holders
Not applicable.
I-8
PART II
Item 5. Market for Common Equity and Related Stockholder Matters
See page 24 of the Issuer's 1994 Annual Report, which
page is incorporated herein by reference.
Item 6. Management's Discussion and Analysis
See pages 7 through 10 of the Issuer's 1994 Annual
Report, which pages are incorporated herein by reference.
Item 7. Financial Statements
The following consolidated financial statements of the
Issuer and its subsidiary, set forth at pages 12 through 22 of the
Issuer's 1994 Annual Report, are incorporated herein by reference:
Consolidated balance sheet - December 31, 1994
Consolidated statements of income (loss) - years ended
December 31, 1994 and 1993
Consolidated statements of shareholders' equity - years
ended December 31, 1994 and 1993
Consolidated statements of cash flows - years ended
December 31, 1994 and 1993
Notes to consolidated financial statements - years ended
December 31, 1994 and 1993
Item 8. Changes In and Disagreements With Accountants on
Accounting and Financial Disclosure
Not applicable.
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PART III
Item 9. Directors, Executive Officers, Promoters and Control
Persons of the Issuer.
For information with respect to the directors and control
persons of the Issuer, see Pages 2, 3 and 4 of the Issuer's
definitive proxy statement for the 1995 annual meeting of its
shareholders, which pages are incorporated herein by reference.
The following are the executive officers of the Issuer:
<TABLE>
<CAPTION>
Date of First
Name Age Office Held Election to Office
<S> <C> <C> <C>
Joseph R. DiStefano 57 President l983
Linda Eder 54 Vice President l986
Barbara J. Dreyer 56 Secretary-Treasurer l987
</TABLE>
All officers hold their respective offices until their
successors are duly elected and qualified.
Item 10. Executive Compensation.
See page 3 of the Issuer's definitive proxy statement for
the 1995 annual meeting of its shareholders, which page is incor-
porated herein by reference.
Item 11. Security Ownership of Certain Beneficial Owners and
Management
See pages 3 and 4 of the Issuer's definitive proxy state-
ment for the 1995 annual meeting of its shareholders, which pages
are incorporated herein by reference.
Item 12. Certain Relationships and Related Transactions
See pages 3 and 4 of the Issuer's definitive proxy
statement for the 1995 annual meeting of its shareholders, which
pages are incorporated herein by reference.
III-1
PART IV
Item 13. Exhibits And Reports on Form 8-K
(a) Index of Exhibits:
(3) Articles of Incorporation and By Laws, as
amended, (incorporated by reference to Exhibit
3 to the Issuer's annual report on Form 10-K
for the year ended December 31, 1988 and
Exhibit 3 to the Issuer's annual report on
Form 10-KSB for the year ended December 31,
1993)
(10) Material contracts:
(a) Note from Providence and Worcester Rail-
road Company to Issuer dated January 1, 1988
(incorporated by reference to Exhibit 10(a) to
the Issuer's annual report on Form 10-KSB for
the year ended December 31, 1992)
(b) Lease between Whiteco Metrocom, Inc. and
Issuer dated June 25, 1985 (incorporated by
reference to Exhibit 10(b) to the Issuer's
annual report on Form 10-KSB for the year
ended December 31, 1992)
(c) Leases between Metropark, Ltd., and
Issuer:
(i) Dated November 10, 1994; see Page IV-2
(ii) Dated November 10, 1994; see Page IV-3
(iii) Dated November 10, 1994; see Page IV-4
(13) Annual report to shareholders for the year
ended December 31, 1994; see Page IV-5
(21) Subsidiary of the Issuer; see Page IV-6
(99) Plan of the Issuer's parcels in downtown
Providence (incorporated by reference to Page
6 of the Issuer's annual report to
shareholders for the year ended December 31,
1994), filed as Exhibit 13 hereto.
(b) For the quarter ended December 31, 1994, no reports
on Form 8-K were filed.
IV-1
SIGNATURES
In accordance with of Section 13 or 15(d) of the Exchange Act, the
Issuer caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CAPITAL PROPERTIES, INC.
By s/Joseph R. DiStefano
Joseph R. DiStefano
President
Dated: March 24, 1995
In accordance with the Exchange Act, this report has been signed
below by the following persons on behalf of the Issuer and in the
capacities and on the dates indicated.
Signature Title Date
s/Joseph R. DiStefano
Joseph R. DiStefano President and Director March 24, 1995
(Principal Executive
Officer)
s/Barbara J. Dreyer
Barbara J. Dreyer Secretary-Treasurer March 24, 1995
and Director
(Principal Financial
Officer and Principal
Accounting Officer)
s/Theodore P. Cohen
Theodore P. Cohen Director March 27, 1995
L E A S E
THIS INDENTURE OF LEASE made as of the tenth day of November,
1994, by and between CAPITAL PROPERTIES,INC., a Rhode Island
corporation (hereinafter referred to as "Landlord"), and
METROPARK, LTD., a Rhode Island corporation (hereinafter referred
to as "Tenant").
W I T N E S S E T H T H A T:
In consideration of the rents, covenants and agreements to be
paid, kept and performed by Tenant, as hereinafter provided,
Landlord hereby demises and leases to Tenant, and Tenant hereby
hires and takes from Landlord the real property known as Parcels
3W and 4W in the Capital Center, in Providence, Rhode Island, as
shown on a plan attached to this Lease as Exhibit A (hereinafter
called the "Premises").
TO HAVE AND TO HOLD the Premises, together with all rights,
privileges, easements and appurtenances thereunto belonging and
attaching, unto Tenant for a term of one year (hereinafter called
the "Term") commencing as of December 1, 1994, and ending on
November 30, 1995.
This Lease is made upon the covenants and agreements herein
set forth on the part of the respective parties, all of which the
parties respectively agree to observe and comply with during the
term hereof.
1. RENTAL.
The annual rental shall be One Hundred Twenty Thousand
($120,000) Dollars payable in equal monthly installments of Ten
Thousand ($10,000) Dollars.
2. UTILITIES AND OTHER CHARGES.
Tenant will pay directly before the same become
delinquent all charges, duties, rates, license and permit fees
and other amounts of every description to which the Premises or
any part thereof or any improvement thereon erected or used by
Tenant may, during the term hereof, be assessed or become liable
for electricity, refuse collection, telephone or any other
utilities or services or any connection or meters therefor,
whether assessed to or payable by Landlord or Tenant. Tenant
will, within ten (10) days after receipt of written demand by
Landlord, furnish Landlord with receipts or other evidence
indicating that all such amounts have been paid. Provided,
however, that Tenant shall only be responsible for those charges
and assessments which are for the period of its occupancy of the
Premises.
3. TAXES AND ASSESSMENTS.
Landlord will pay and keep current the real estate taxes
assessed against the premises.
4. COMPLIANCE WITH LAWS AND REGULATIONS.
Tenant will at all times during the term hereof keep the
Premises in good order and a strictly sanitary condition and
observe and perform all laws, ordinances, orders, rules and
regulations now or hereafter made by any governmental authority
for the time being applicable to the Premises or any improvement
thereon or use thereof, and with the orders, rules and
regulations of the National Board of Fire Underwriters or similar
organization so far as the same may relate to the use of the
Premises, and will indemnify Landlord against all actions, suits,
damages and claims by whomsoever brought or made by reason of the
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nonobservance or nonperformance of such laws, ordinances, orders,
rules and regulations, or of this covenant. Nothing herein shall
obligate the Tenant to construct any additional improvements on
the Premises.
5. INSPECTION.
Tenant will permit Landlord and its agents at all
reasonable times during the term hereof to enter the Premises and
examine the state of repair and condition thereof, and the use
being made of the same. Landlord may also enter upon the
Premises to perform any repairs or maintenance which Tenant has
failed to perform hereunder, and to show the premises to
prospective purchasers, tenants and mortgagees. Further,
Landlord shall have the right to have test borings done on the
premises on weekends, but done in such a manner as not to
unreasonably interfere with Tenant's business thereon.
6. REPAIR AND MAINTENANCE.
Tenant will, at its own expense, from time to time and
at all times during the term hereof, well and substantially
repair, maintain, amend and keep the Premises, together with all
fixtures and items of personal property used or useful in
connection therewith, with all necessary reparations and
amendments whatsoever in as good order and condition as they now
are or may be put in, reasonable wear and tear and damage by the
elements and such unavoidable casualty against which insurance is
not required hereunder excepted. Tenant will maintain the signs
on the Premises and fix all potholes that may develop. Tenant
will have the benefit of all warranties pertaining thereto.
Tenant will remove snow from the Premises and keep the sidewalks
clean and free from ice and snow.
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7. USE.
Tenant shall use the Premises only for the operation of
a parking lot and other accessory uses relating to motor
vehicles.
8. NOTICES RE PREMISES.
Landlord will forthwith furnish Tenant copies of any
notices it receives regarding the Premises from any third parties
which notices relate to the Tenant's use and occupancy of the
Premises.
9. CANCELLATION OF LEASE.
Landlord and Tenant may cancel this Lease upon thirty
(30) days' notice to the other.
10. INSURANCE.
Tenant will, at its own cost and expense, effect and
maintain during the term hereof, a policy or policies of
comprehensive general liability insurance, or its equivalent,
with minimum limits of not less than $500,000 for injury to one
or more persons in any one occurrence, and also insurance in the
sum of not less than $1,000,000 against claims for property
damage in any one accident, such policy or policies to name
Landlord as additional assured, to require the insurer to give
Landlord at least ten days' written notice of its intention to
cancel, terminate or amend the insurance policy or policies in
any material respect, and to cover the entire Premises. Tenant
may insure premises as part of a blanket policy.
11. LANDLORD'S COSTS AND EXPENSES.
If Tenant shall fail to comply with any of its
obligations hereunder, Landlord may, upon ten (10) days' prior
written notice to Tenant (or without notice in case of
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emergency), take such action as may be reasonably required to
cure any such default by Tenant. Tenant will pay to Landlord, on
demand, all costs and expenses, including reasonable attorneys'
fees, incurred by Landlord in collecting any delinquent rents, or
other charges payable by Tenant hereunder, or in connection with
any litigation commenced by or against Tenant (other than
condemnation proceedings) to which Landlord, without any fault on
its part, shall be made a party. All such amounts owing to
Landlord shall constitute additional rent hereunder.
12. INDEMNIFICATION OF LANDLORD.
12.1. Tenant shall indemnify and save harmless Landlord
(regardless of Tenant's covenant to insure) against and from any
and all claims by or on behalf of any person or persons, firm or
firms, corporation or corporations, arising from the use,
occupancy, conduct or management of the Premises, unless done by
or contributed to Landlord, any of its agents, contractors,
servants, employees or licensees, and shall further indemnify and
save Landlord harmless against and from any and all claims
arising during the term hereof from any condition of the
Premises, or arising from any breach or default on the part of
Tenant in the performance of any covenant or agreement on the
part of Tenant to be performed pursuant to the terms of this
Lease, or arising from any act of Tenant or any of its agents,
contractors, servants or employees to any person, firm or
corporation occurring during the term hereof in or about the
Premises or upon or under said areas, and from and against all
costs, counsel fees, expenses or liabilities incurred in or about
any such claim or action or proceeding brought thereon.
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12.2 Tenant shall pay and indemnify Landlord against
all legal costs and charges incurred in obtaining possession of
the Premises after the default of Tenant or upon expiration or
earlier termination of the term hereof, other than by reason of
any default of Landlord, or in enforcing any covenant or
agreement of Tenant herein contained.
13. LIENS.
13.1 Tenant will not commit, suffer any act or neglect
whereby the Premises or any improvements thereon or the estate of
Landlord therein shall at any time during the term hereof become
subject to any attachment, judgment, lien, charge or encumbrance
whatsoever, except as herein expressly provided, and will
indemnify and hold Landlord harmless from and against all loss,
costs and expenses, including reasonable attorneys' fees, with
respect thereto.
13.2 If due to any act or neglect of Tenant, any
mechanic's, laborer's or materialmen's lien shall at any time be
filed against the premises or any part hereof, Tenant, within
thirty (30) days after notice of the filing thereof shall cause
the same to be discharged of record by payment, bonding or
otherwise, and if Tenant shall fail to cause the same to be
discharged, then Landlord may, in addition to any other right or
remedy, cause the same to be discharged, either by paying the
amount claimed to be due, or by procuring the discharge of such
lien by deposit or by bonding proceedings, and all amounts so
paid by Landlord, together with all reasonable costs and expenses
incurred in connection therewith, and together with interest
thereon at the rate of ten percent (10%) per annum from the
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respective dates of payment, shall be paid by Tenant to Landlord,
on demand, as additional rent hereunder.
13.3 Nothing in this Lease contained shall be deemed or
construed in any as constituting the consent or request of
Landlord, express or implied by inference or otherwise, to any
contractor, subcontractor, laborer, materialmen, architect or
engineer for the performance of any labor or the furnishing of
any materials or services for or in connection with the Premises
or any part thereof. Notice is hereby given that Landlord shall
not be liable for any labor or materials or services furnished or
to be furnished to Tenant upon credit, and that no mechanic's or
other lien for any such labor, materials, or services shall
attach to or affect the fee or reversionary or other estate or
interest of Landlord in the Premises of and in this Lease.
14. DEFAULT.
14.1 In the event that during the term hereof any of
the following events shall occur (each of which shall be an
"Event of Default"):
(a) Tenant shall default in the payment of any
installment of the Rent for ten (10) days after the same shall
become due, during which ten-dayperiod Tenant may cure the
default;
(b) Tenant or any permitted assignee of Tenant shall
(i) apply for or consent to an appointment of a receiver, a
trustee or liquidator of it or of all or a substantial part of
its assets; (ii) make a general assignment for the benefit of
creditors; (iii) be adjudicated a bankrupt or insolvent; (iv)
file a voluntary petition in bankruptcy or a petition or an
answer seeking reorganization or an arrangement with creditors to
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take advantage of any insolvency law or an answer admitting the
material allegations of a petition filed against it in any
bankruptcy, reorganization or insolvency proceeding or corporate
action shall be taken by it for the purpose of effecting any of
the foregoing;
(c) An order, judgment or decree shall be entered,
without the application, approval or consent of Tenant or any
permitted assignee of Tenant by any court of competent
jurisdiction, approving a petition seeking reorganization of
Tenant or such assignee or appointing a receiver, trust or
liquidator of Tenant or such assignee or of all or a substantial
part of its assets and such order, judgment or decree shall
continue unstayed and in effect for any period of sixty (60)
consecutive days; or
(d) Any other default by Tenant in performing any of
its other obligations hereunder shall continue uncorrected for
ten (10) days after receipt of written notice thereof from
Landlord, during which period Tenant or such assignee may cure
the default; then Landlord may, by giving written notice to
Tenant, either (a) terminate this Lease, (b) re-enter the
Premises by summary proceedings or otherwise, expelling Tenant
and removing all of Tenant's property therefrom, and relet the
Premises and receive the rent therefrom, or (c) exercise any
other remedies permitted by law. Tenant shall also be liable for
the reasonable cost of obtaining possession of and reletting the
Premises and of any repairs and alterations or other payments
necessary to prepare them for reletting. Any and all such
amounts shall be payable to Landlord upon demand.
Notwithstanding anything contained herein to the contrary, no
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termination of this Lease prior to the last day of the term
hereof, except as provided in Section 15 hereof, shall relieve
Tenant of its liability and obligations under this Lease, and
such liability and obligations shall survive any such
termination.
14.2 In the event of any breach by Tenant of any of the
covenants, agreements, terms or conditions contained in this
Lease, Landlord shall be entitled to enjoin such breach or
threatened breach and shall have the right to invoke any right
and remedy allowed at law or in equity, or by statute or
otherwise, as though reentry, summary proceedings and other
remedies were not provided for in this Lease.
14.3 Each right and remedy of Landlord provided for in
this Lease shall be cumulative and shall be in addition to every
other right or remedy provided for in this Lease or now or
hereafter existing, at law or in equity, or by statute or
otherwise, and the exercise or beginning of the exercise by
Landlord of any one or more of the rights or remedies provided
for in this Lease, or now or hereafter existing at law or in
equity, or by statute or otherwise, shall not preclude the
simultaneous or later exercise by Landlord of any or all other
rights or remedies provided for in this Lease, or now or
hereafter existing at law or in equity, or by statute or
otherwise.
15. EMINENT DOMAIN.
If the whole or any part of the demised premises shall
be condemned or acquired by eminent domain for any public or
quasi- public use or purpose, then the term of this Lease shall
cease and terminate as of the date of vesting of title in such
-9-
proceeding and all rentals shall be paid up to the date of the
vacating of the premises by Tenant and Tenant shall have no claim
against Landlord nor the condemning authority for the value of
any unexpired term of this Lease.
In the event of any condemnation or taking as aforesaid,
whether whole or partial, Tenant shall not be entitled to any
part of the award paid for such condemnation and Landlord is to
receive the full amount of such award, Tenant hereby expressly
waiving any right or claim to any part thereof.
16. CONDITION OF PREMISES.
Tenant represents that the Premises, the sidewalks and
structures adjoining the same, and any subsurface conditions
thereof, and the present uses and non-uses thereof, have been
examined by Tenant, and Tenant agrees that it will accept the
same in the condition or state in which they, or any of them, now
are, without representation or warranty, express or implied in
fact or by law, by Landlord, and without recourse to Landlord as
to the nature, condition or usability thereof, or the use or uses
to which the Premises, or any part thereof, may be put.
17. INDEPENDENT COVENANTS--NO WAIVER.
17.1 Each and every of the covenants and agreements
contained in this Lease shall be for all purposes construed to be
separate and independent covenants and the waiver of the breach
of any covenant contained hereby by Landlord shall in no way or
manner discharge or relieve Tenant from Tenant's obligation to
perform each and every of the covenants contained herein.
17.2 If any term or provision of this Lease or the
application thereof to any person or circumstance shall to any
extent be invalid or unenforceable, the remainder of this Lease,
-10-
or the application of such term or provision to persons or
circumstances other than those as to which it is invalid or
unenforceable, shall not be affected thereby, and each term and
provision of this Lease shall be valid and shall be enforced to
the fullest extent permitted by law.
17.3 The failure of Landlord to insist in any one or
more cases upon the strict performance of any of the covenants of
this Lease shall not be construed as a waiver or a relinquishment
for the future of such covenant. A receipt by Landlord of rent
with knowledge of the breach of any covenant hereof shall not be
deemed a waiver of such breach, and no waiver by Landlord of any
provision of this Lease shall be deemed to have been made unless
expressed in writing and signed by Landlord. All remedies to
which Landlord may resort under the terms of this Lease or by law
provided shall be cumulative.
18. SUBORDINATION.
This Lease and the rights of Tenant hereunder are
subject and subordinate in all respects to all matters of record,
including, without limitation, deeds and all mortgages which may
now or hereafter be placed on or affect the Premises, or any part
thereof, and/or Landlord's interest or estate therein, and to
each advance made and/or hereafter to be made under any such
mortgages, and to all renewals, modifications, consolidations,
replacements and extensions thereof, and all substitutions
therefor; provided, however, that before such subordination shall
be effective, Landlord shall cause the mortgagee, or other party
in interest, as the case may be, to deliver to Tenant an assent
to this Lease, in proper form for recording whereby such
mortgagee or other party agrees that no foreclosure of such
-11-
mortgage or any action taken with respect thereto, by such
mortgagee or any other person claiming by or through or under
such mortgage (or other interest) shall disturb the possession of
Tenant under this Lease so long as Tenant is not in default
hereunder, and that the validity and continuance of this Lease
will be so recognized. Simultaneously with the delivery of such
an agreement, Tenant agrees to execute and deliver an instrument
in proper form for recording, wherein Tenant agrees to and does
subordinate this Lease to the liens of the mortgagees and others
as above-mentioned, and to all renewals, modifications,
consolidations and replacements and extensions of such mortgages
thereunder, and to any persons claiming by, through or under such
mortgages or other such interest.
19. QUIET ENJOYMENT.
Landlord covenants that Tenant, upon paying the rent and
performing the covenants hereof on the part of Tenant to be
performed shall and may peaceably and quietly have, hold and
enjoy the Premises and all related appurtenances, rights,
privileges and easements throughout the term hereof without any
lawful hindrance by Landlord and any person claiming by, through
or under it.
20. RETURN OF PREMISES.
At the expiration or other temination of the term
hereof, Tenant will remove from the Premises its property and
that of all claiming under it and will peaceably yield up to
Landlord the Premises in as good condition in all respects as the
same were at the commencement of this Lease, except for ordinary
wear and tear, damage by the elements, by any exercise of the
right of eminent domain or by public or other authority, or
-12-
damage which Landlord is required herein to replace, restore or
rebuild or damage for which no insurance is required hereunder.
21. CONSTRUCTION.
The mention of the parties hereto by name or otherwise
shall be construed as including and referring to their respective
successors and assigns as well as to the parties themselves
whenever such construction is required or admitted by the
provisions hereof; and all covenants, agreements, conditions,
rights, powers and privileges hereinbefore contained shall inure
to the benefit of and be binding upon the successors and assigns
of such parties, unless otherwise provided.
22. PERMITS.
Tenant, at its cost, shall obtain any necessary permits
for the Premises from the City of Providence.
23. NOTICES.
Whenever notice shall be given under this Lease, the
same shall be in writing and shall be sent by certified or
registered mail, return receipt requested as follows:
To the Landlord: One Hospital Trust Plaza
Suite 920
Providence, Rhode Island 02903
To the Tenant: c/o Charles Meyers
56 Pine Street
Providence, Rhode Island 02903
To the Tenant's Alan T. Dworkin, Esq.
Attorney: 164 Airport Road
Warwick, Rhode Island 02889
or to such other address or addresses as each party may from time
to time designate by like notice to the other. Said notice shall
be valid and times begin to run hereunder upon receipt of the
party to which said notice is given.
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IN WITNESS WHEREOF, the parties hereto have caused these
presents to be executed in duplicate as of the day and year first
above written.
CAPITAL PROPERTIES, INC.
By
Barbara J. Dreyer, Treasurer
METROPARK, LTD.
By
Charles Meyers, President
STATE OF RHODE ISLAND
COUNTY OF PROVIDENCE
In Providence, in said County on the 10th day of November
1994, before me personally appeared BARBARA J. DREYER, Treasurer
of CAPITAL PROPERTIES, INC., to me known and known by me to be
the person executing the foregoing instrument on behalf of said
corporation, and she acknowledged said instrument by her executed
to be her free act and deed and the free act and deed of said
corporation.
Notary Public
STATE OF RHODE ISLAND
COUNTY OF PROVIDENCE
In Providence, in said County on the 10th day of November
1994, before me personally appeared CHARLES MEYERS, President of
METROPARK, LTD., to me known and known by me to be the person
executing the foregoing instrument on behalf of said corporation,
and he acknowledged said instrument by him executed to be his
free act and deed and the free act and deed of said corporation.
Notary Public
-14-
GUARANTEE
In consideration of the execution of the foregoing lease by
the Landlord, the undersigned (jointly and severally, if more
than one) guarantees that the Tenant will pay all rent thereunder
and will perform all other terms, conditions or agreements on its
part to be performed or fulfilled, and agrees that the foregoing
lease may be amended from time to time by the parties thereto
without notice to the undersigned. The undersigned consents that
extensions of time of payment or any other indulgences may be
granted to the Tenant without notice to and without releasing or
affecting in any way the liability of the undersigned and the
undersigned waives demand and notice of default. This guarantee
is in addition to any other security which the Landlord may have
for the performance of the Tenant's obligations and the Landlord
may have the recourse to this guarantee without first pursuing
the Landlord's remedies against such other security, if any. The
Landlord may release, in whole or in part, any other security
without releasing or affecting in any way the liability of the
undersigned. In addition, the undersigned will pay to the
Landlord all costs and expenses (including attorneys' fees)
incurred in connection with the enforcement of this guarantee.
Executed this 10th day of November, 1994.
Charles Meyers
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<PAGE>
L E A S E
THIS INDENTURE OF LEASE made as of the tenth day of
November, 1994, by and between CAPITAL PROPERTIES,INC., a
Rhode Island corporation (hereinafter referred to as
"Landlord"), and METROPARK, LTD., a Rhode Island corporation
(hereinafter referred to as "Tenant").
W I T N E S S E T H T H A T:
In consideration of the rents, covenants and agreements to
be paid, kept and performed by Tenant, as hereinafter
provided, Landlord hereby demises and leases to Tenant, and
Tenant hereby hires and takes from Landlord the real property
known as Parcels 3E and 4E in the Capital Center, in
Providence, Rhode Island, as shown on a plan attached to this
Lease as Exhibit A (hereinafter called the "Premises").
TO HAVE AND TO HOLD the Premises, together with all
rights, privileges, easements and appurtenances thereunto
belonging and attaching, unto Tenant for a term of two years
(hereinafter called the "Term") commencing as of August 1,
1994, and ending on July 31, 1996.
This Lease is made upon the covenants and agreements
herein set forth on the part of the respective parties, all of
which the parties respectively agree to observe and comply
with during the term hereof.
1. RENTAL.
During the period from August 1, 1994 to July 31,
1995, Tenant shall pay to Landlord an annual rental of Ninety-
six Thousand ($96,000) Dollars payable in monthly installments
of Eight Thousand ($8,000) Dollars on the first day of each
month. During the period from August 1, 1995 to July 31,
1996, Tenant shall pay to Landlord an annual rental of One
Hundred Two Thousand ($102,000) Dollars payable in monthly
installments of Eight Thousand Five Hundred ($8,500) Dollars
on the first day of each month.
2. UTILITIES AND OTHER CHARGES.
Tenant will pay directly before the same become
delinquent all charges, duties, rates, license and permit fees
and other amounts of every description to which the Premises
or any part thereof or any improvement thereon erected or used
by Tenant may, during the term hereof, be assessed or become
liable for electricity, refuse collection, telephone or any
other utilities or services or any connection or meters
therefor, whether assessed to or payable by Landlord or
Tenant. Tenant will, within ten (10) days after receipt of
written demand by Landlord, furnish Landlord with receipts or
other evidence indicating that all such amounts have been
paid. Provided, however, that Tenant shall only be
responsible for those charges and assessments which are for
the period of its occupancy of the Premises.
3. TAXES AND ASSESSMENTS.
Landlord will pay and keep current the real estate
taxes assessed against the premises.
4. COMPLIANCE WITH LAWS AND REGULATIONS.
Tenant will at all times during the term hereof keep
the Premises in good order and a strictly sanitary condition
and observe and perform all laws, ordinances, orders, rules
and regulations now or hereafter made by any governmental
authority for the time being applicable to the Premises or any
-2-
improvement thereon or use thereof, and with the orders, rules
and regulations of the National Board of Fire Underwriters or
similar organization so far as the same may relate to the use
of the Premises, and will indemnify Landlord against all
actions, suits, damages and claims by whomsoever brought or
made by reason of the nonobservance or nonperformance of such
laws, ordinances, orders, rules and regulations, or of this
covenant. Nothing herein shall obligate the Tenant to
construct any additional improvements on the Premises.
5. INSPECTION.
Tenant will permit Landlord and its agents at all
reasonable times during the term hereof to enter the Premises
and examine the state of repair and condition thereof, and the
use being made of the same. Landlord may also enter upon the
Premises to perform any repairs or maintenance which Tenant
has failed to perform hereunder, and to show the premises to
prospective purchasers, tenants and mortgagees. Further,
Landlord shall have the right to have test borings done on the
premises on weekends, but done in such a manner as not to
unreasonably interfere with Tenant's business thereon.
6. REPAIR AND MAINTENANCE.
Tenant will, at its own expense, from time to time
and at all times during the term hereof, well and
substantially repair, maintain, amend and keep the Premises,
together with all fixtures and items of personal property used
or useful in connection therewith, with all necessary
reparations and amendments whatsoever in as good order and
condition as they now are or may be put in, reasonable wear
and tear and damage by the elements and such unavoidable
-3-
casualty against which insurance is not required hereunder
excepted. Tenant will maintain the signs on the Premises and
fix all potholes that may develop. Tenant will have the
benefit of all warranties pertaining thereto. Tenant will
remove snow from the Premises and keep the sidewalks clean and
free from ice and snow.
7. USE.
Tenant shall use the Premises only for the operation
of a parking lot and other accessory uses relating to motor
vehicles.
8. NOTICES RE PREMISES.
Landlord will forthwith furnish Tenant copies of any
notices it receives regarding the Premises from any third
parties which notices relate to the Tenant's use and occupancy
of the Premises.
9. CANCELLATION OF LEASE.
Landlord and Tenant may cancel this Lease upon thirty
(30) days' notice to the other.
10. INSURANCE.
Tenant will, at its own cost and expense, effect and
maintain during the term hereof, a policy or policies of
comprehensive general liability insurance, or its equivalent,
with minimum limits of not less than $500,000 for injury to
one or more persons in any one occurrence, and also insurance
in the sum of not less than $1,000,000 against claims for
property damage in any one accident, such policy or policies
to name Landlord as additional assured, to require the insurer
to give Landlord at least ten days' written notice of its
intention to cancel, terminate or amend the insurance policy
-4-
or policies in any material respect, and to cover the entire
Premises. Tenant may insure premises as part of a blanket
policy.
11. LANDLORD'S COSTS AND EXPENSES.
If Tenant shall fail to comply with any of its
obligations hereunder, Landlord may, upon ten (10) days' prior
written notice to Tenant (or without notice in case of
emergency), take such action as may be reasonably required to
cure any such default by Tenant. Tenant will pay to Landlord,
on demand, all costs and expenses, including reasonable
attorneys' fees, incurred by Landlord in collecting any
delinquent rents, or other charges payable by Tenant
hereunder, or in connection with any litigation commenced by
or against Tenant (other than condemnation proceedings) to
which Landlord, without any fault on its part, shall be made a
party. All such amounts owing to Landlord shall constitute
additional rent hereunder.
12. INDEMNIFICATION OF LANDLORD.
12.1. Tenant shall indemnify and save harmless
Landlord (regardless of Tenant's covenant to insure) against
and from any and all claims by or on behalf of any person or
persons, firm or firms, corporation or corporations, arising
from the use, occupancy, conduct or management of the
Premises, unless done by or contributed to Landlord, any of
its agents, contractors, servants, employees or licensees, and
shall further indemnify and save Landlord harmless against and
from any and all claims arising during the term hereof from
any condition of the Premises, or arising from any breach or
default on the part of Tenant in the performance of any
-5-
covenant or agreement on the part of Tenant to be performed
pursuant to the terms of this Lease, or arising from any act
of Tenant or any of its agents, contractors, servants or
employees to any person, firm or corporation occurring during
the term hereof in or about the Premises or upon or under said
areas, and from and against all costs, counsel fees, expenses
or liabilities incurred in or about any such claim or action
or proceeding brought thereon.
12.2 Tenant shall pay and indemnify Landlord against
all legal costs and charges incurred in obtaining possession
of the Premises after the default of Tenant or upon expiration
or earlier termination of the term hereof, other than by
reason of any default of Landlord, or in enforcing any
covenant or agreement of Tenant herein contained.
13. LIENS.
13.1 Tenant will not commit, suffer any act or
neglect whereby the Premises or any improvements thereon or
the estate of Landlord therein shall at any time during the
term hereof become subject to any attachment, judgment, lien,
charge or encumbrance whatsoever, except as herein expressly
provided, and will indemnify and hold Landlord harmless from
and against all loss, costs and expenses, including reasonable
attorneys' fees, with respect thereto.
13.2 If due to any act or neglect of Tenant, any
mechanic's, laborer's or materialmen's lien shall at any time
be filed against the premises or any part hereof, Tenant,
within thirty (30) days after notice of the filing thereof
shall cause the same to be discharged of record by payment,
bonding or otherwise, and if Tenant shall fail to cause the
-6-
same to be discharged, then Landlord may, in addition to any
other right or remedy, cause the same to be discharged, either
by paying the amount claimed to be due, or by procuring the
discharge of such lien by deposit or by bonding proceedings,
and all amounts so paid by Landlord, together with all
reasonable costs and expenses incurred in connection
therewith, and together with interest thereon at the rate of
ten percent (10%) per annum from the respective dates of
payment, shall be paid by Tenant to Landlord, on demand, as
additional rent hereunder.
13.3 Nothing in this Lease contained shall be deemed
or construed in any as constituting the consent or request of
Landlord, express or implied by inference or otherwise, to any
contractor, subcontractor, laborer, materialmen, architect or
engineer for the performance of any labor or the furnishing of
any materials or services for or in connection with the
Premises or any part thereof. Notice is hereby given that
Landlord shall not be liable for any labor or materials or
services furnished or to be furnished to Tenant upon credit,
and that no mechanic's or other lien for any such labor,
materials, or services shall attach to or affect the fee or
reversionary or other estate or interest of Landlord in the
Premises of and in this Lease.
14. DEFAULT.
14.1 In the event that during the term hereof any of
the following events shall occur (each of which shall be an
"Event of Default"):
(a) Tenant shall default in the payment of any
installment of the Rent for ten (10) days after the same shall
-7-
become due, during which ten-day period Tenant may cure the
default;
(b) Tenant or any permitted assignee of Tenant
shall (i) apply for or consent to an appointment of a
receiver, a trustee or liquidator of it or of all or a
substantial part of its assets; (ii) make a general assignment
for the benefit of creditors; (iii) be adjudicated a bankrupt
or insolvent; (iv) file a voluntary petition in bankruptcy or
a petition or an answer seeking reorganization or an
arrangement with creditors to take advantage of any insolvency
law or an answer admitting the material allegations of a
petition filed against it in any bankruptcy, reorganization or
insolvency proceeding or corporate action shall be taken by it
for the purpose of effecting any of the foregoing;
(c) An order, judgment or decree shall be entered,
without the application, approval or consent of Tenant or any
permitted assignee of Tenant by any court of competent
jurisdiction, approving a petition seeking reorganization of
Tenant or such assignee or appointing a receiver, trust or
liquidator of Tenant or such assignee or of all or a
substantial part of its assets and such order, judgment or
decree shall continue unstayed and in effect for any period of
sixty (60) consecutive days; or
(d) Any other default by Tenant in performing any
of its other obligations hereunder shall continue uncorrected
for ten (10) days after receipt of written notice thereof from
Landlord, during which period Tenant or such assignee may cure
the default; then Landlord may, by giving written notice to
Tenant, either (a) terminate this Lease, (b) re-enter the
-8-
Premises by summary proceedings or otherwise, expelling Tenant
and removing all of Tenant's property therefrom, and relet the
Premises and receive the rent therefrom, or (c) exercise any
other remedies permitted by law. Tenant shall also be liable
for the reasonable cost of obtaining possession of and
reletting the Premises and of any repairs and alterations or
other payments necessary to prepare them for reletting. Any
and all such amounts shall be payable to Landlord upon demand.
Notwithstanding anything contained herein to the contrary, no
termination of this Lease prior to the last day of the term
hereof, except as provided in Section 15 hereof, shall relieve
Tenant of its liability and obligations under this Lease, and
such liability and obligations shall survive any such
termination.
14.2 In the event of any breach by Tenant of any of
the covenants, agreements, terms or conditions contained in
this Lease, Landlord shall be entitled to enjoin such breach
or threatened breach and shall have the right to invoke any
right and remedy allowed at law or in equity, or by statute or
otherwise, as though reentry, summary proceedings and other
remedies were not provided for in this Lease.
14.3 Each right and remedy of Landlord provided for
in this Lease shall be cumulative and shall be in addition to
every other right or remedy provided for in this Lease or now
or hereafter existing, at law or in equity, or by statute or
otherwise, and the exercise or beginning of the exercise by
Landlord of any one or more of the rights or remedies provided
for in this Lease, or now or hereafter existing at law or in
equity, or by statute or otherwise, shall not preclude the
-9-
simultaneous or later exercise by Landlord of any or all other
rights or remedies provided for in this Lease, or now or
hereafter existing at law or in equity, or by statute or
otherwise.
15. EMINENT DOMAIN.
If the whole or any part of the demised premises
shall be condemned or acquired by eminent domain for any
public or quasi- public use or purpose, then the term of this
Lease shall cease and terminate as of the date of vesting of
title in such proceeding and all rentals shall be paid up to
the date of the vacating of the premises by Tenant and Tenant
shall have no claim against Landlord nor the condemning
authority for the value of any unexpired term of this Lease.
In the event of any condemnation or taking as
aforesaid, whether whole or partial, Tenant shall not be
entitled to any part of the award paid for such condemnation
and Landlord is to receive the full amount of such award,
Tenant hereby expressly waiving any right or claim to any part
thereof.
16. CONDITION OF PREMISES.
Tenant represents that the Premises, the sidewalks
and structures adjoining the same, and any subsurface
conditions thereof, and the present uses and non-uses thereof,
have been examined by Tenant, and Tenant agrees that it will
accept the same in the condition or state in which they, or
any of them, now are, without representation or warranty,
express or implied in fact or by law, by Landlord, and without
recourse to Landlord as to the nature, condition or usability
-10-
thereof, or the use or uses to which the Premises, or any part
thereof, may be put.
17. INDEPENDENT COVENANTS--NO WAIVER.
17.1 Each and every of the covenants and agreements
contained in this Lease shall be for all purposes construed to
be separate and independent covenants and the waiver of the
breach of any covenant contained hereby by Landlord shall in
no way or manner discharge or relieve Tenant from Tenant's
obligation to perform each and every of the covenants
contained herein.
17.2 If any term or provision of this Lease or the
application thereof to any person or circumstance shall to any
extent be invalid or unenforceable, the remainder of this
Lease, or the application of such term or provision to persons
or circumstances other than those as to which it is invalid or
unenforceable, shall not be affected thereby, and each term
and provision of this Lease shall be valid and shall be
enforced to the fullest extent permitted by law.
17.3 The failure of Landlord to insist in any one or
more cases upon the strict performance of any of the covenants
of this Lease shall not be construed as a waiver or a
relinquishment for the future of such covenant. A receipt by
Landlord of rent with knowledge of the breach of any covenant
hereof shall not be deemed a waiver of such breach, and no
waiver by Landlord of any provision of this Lease shall be
deemed to have been made unless expressed in writing and
signed by Landlord. All remedies to which Landlord may resort
under the terms of this Lease or by law provided shall be
cumulative.
-11-
18. SUBORDINATION.
This Lease and the rights of Tenant hereunder are
subject and subordinate in all respects to all matters of
record, including, without limitation, deeds and all mortgages
which may now or hereafter be placed on or affect the
Premises, or any part thereof, and/or Landlord's interest or
estate therein, and to each advance made and/or hereafter to
be made under any such mortgages, and to all renewals,
modifications, consolidations, replacements and extensions
thereof, and all substitutions therefor; provided, however,
that before such subordination shall be effective, Landlord
shall cause the mortgagee, or other party in interest, as the
case may be, to deliver to Tenant an assent to this Lease, in
proper form for recording whereby such mortgagee or other
party agrees that no foreclosure of such mortgage or any
action taken with respect thereto, by such mortgagee or any
other person claiming by or through or under such mortgage (or
other interest) shall disturb the possession of Tenant under
this Lease so long as Tenant is not in default hereunder, and
that the validity and continuance of this Lease will be so
recognized. Simultaneously with the delivery of such an
agreement, Tenant agrees to execute and deliver an instrument
in proper form for recording, wherein Tenant agrees to and
does subordinate this Lease to the liens of the mortgagees and
others as above-mentioned, and to all renewals, modifications,
consolidations and replacements and extensions of such
mortgages thereunder, and to any persons claiming by, through
or under such mortgages or other such interest.
-12-
19. QUIET ENJOYMENT.
Landlord covenants that Tenant, upon paying the rent
and performing the covenants hereof on the part of Tenant to
be performed shall and may peaceably and quietly have, hold
and enjoy the Premises and all related appurtenances, rights,
privileges and easements throughout the term hereof without
any lawful hindrance by Landlord and any person claiming by,
through or under it.
20. RETURN OF PREMISES.
At the expiration or other temination of the term
hereof, Tenant will remove from the Premises its property and
that of all claiming under it and will peaceably yield up to
Landlord the Premises in as good condition in all respects as
the same were at the commencement of this Lease, except for
ordinary wear and tear, damage by the elements, by any
exercise of the right of eminent domain or by public or other
authority, or damage which Landlord is required herein to
replace, restore or rebuild or damage for which no insurance
is required hereunder.
21. CONSTRUCTION.
The mention of the parties hereto by name or
otherwise shall be construed as including and referring to
their respective successors and assigns as well as to the
parties themselves whenever such construction is required or
admitted by the provisions hereof; and all covenants,
agreements, conditions, rights, powers and privileges
hereinbefore contained shall inure to the benefit of and be
binding upon the successors and assigns of such parties,
unless otherwise provided.
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22. PERMITS.
Tenant, at its cost, shall obtain any necessary
permits for the Premises from the City of Providence.
23. NOTICES.
Whenever notice shall be given under this Lease, the
same shall be in writing and shall be sent by certified or
registered mail, return receipt requested as follows:
To the Landlord: One Hospital Trust Plaza
Suite 920
Providence, Rhode Island 02903
To the Tenant: c/o Charles Meyers
56 Pine Street
Providence, Rhode Island 02903
To the Tenant's Alan T. Dworkin, Esq.
Attorney: 164 Airport Road
Warwick, Rhode Island 02889
or to such other address or addresses as each party may from
time to time designate by like notice to the other. Said
notice shall be valid and times begin to run hereunder upon
receipt of the party to which said notice is given.
IN WITNESS WHEREOF, the parties hereto have caused these
presents to be executed in duplicate as of the day and year
first above written.
CAPITAL PROPERTIES, INC.
By
Barbara J. Dreyer, Treasurer
METROPARK, LTD.
By
Charles Meyers, President
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STATE OF RHODE ISLAND
COUNTY OF PROVIDENCE
In Providence, in said County on the 10th day of November,
1994, before me personally appeared BARBARA J. DREYER,
Treasurer of CAPITAL PROPERTIES, INC., to me known and known
by me to be the person executing the foregoing instrument on
behalf of said corporation, and she acknowledged said
instrument by her executed to be her free act and deed and the
free act and deed of said corporation.
Notary Public
STATE OF RHODE ISLAND
COUNTY OF PROVIDENCE
In Providence, in said County on the 10th day of November,
1994, before me personally appeared CHARLES MEYERS, President
of METROPARK, LTD., to me known and known by me to be the
person executing the foregoing instrument on behalf of said
corporation, and he acknowledged said instrument by him
executed to be his free act and deed and the free act and deed
of said corporation.
Notary Public
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GUARANTEE
In consideration of the execution of the foregoing lease by
the Landlord, the undersigned (jointly and severally, if more
than one) guarantees that the Tenant will pay all rent
thereunder and will perform all other terms, conditions or
agreements on its part to be performed or fulfilled, and
agrees that the foregoing lease may be amended from time to
time by the parties thereto without notice to the undersigned.
The undersigned consents that extensions of time of payment or
any other indulgences may be granted to the Tenant without
notice to and without releasing or affecting in any way the
liability of the undersigned and the undersigned waives demand
and notice of default. This guarantee is in addition to any
other security which the Landlord may have for the performance
of the Tenant's obligations and the Landlord may have the
recourse to this guarantee without first pursuing the
Landlord's remedies against such other security, if any. The
Landlord may release, in whole or in part, any other security
without releasing or affecting in any way the liability of the
undersigned. In addition, the undersigned will pay to the
Landlord all costs and expenses (including attorneys' fees)
incurred in connection with the enforcement of this guarantee.
Executed this 10th day of November, 1994.
Charles Meyers
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<PAGE>
L E A S E
THIS INDENTURE OF LEASE made as of the 10th day of
November, 1994, by and between CAPITAL PROPERTIES,INC., a Rhode
Island corporation (hereinafter referred to as "Landlord"), and
METROPARK, LTD., a Rhode Island corporation (hereinafter
referred to as "Tenant").
W I T N E S S E T H T H A T:
In consideration of the rents, covenants and agreements to
be paid, kept and performed by Tenant, as hereinafter provided,
Landlord hereby demises and leases to Tenant, and Tenant hereby
hires and takes from Landlord the real property bounded by
North Main Street, Elizabeth Street, Canal Street and Blair
Lane and the real property bounded by North Main Street,
Steeple Street, a gangway and Blair Lane, in Providence, Rhode
Island, identified as Parcels 21 and 22 on a plan attached to
this Lease as Exhibit A (hereinafter called the "Premises").
TO HAVE AND TO HOLD the Premises, together with all rights,
privileges, easements and appurtenances thereunto belonging and
attaching, unto Tenant for a term (hereinafter called the
"Term") commencing as of May 1, 1994, and ending on April 30,
1996.
This Lease is made upon the covenants and agreements herein
set forth on the part of the respective parties, all of which
the parties respectively agree to observe and comply with
during the term hereof.
1. RENTAL.
During the period from May 1, 1994 to April 30, 1995
Tenant shall pay to Landlord an annual rental of One Hundred
Thousand ($100,000) Dollars payable in monthly installments of
Eight Thousand Three Hundred Thirty-three and 33/100
($8,333.33) Dollars on the first day of each month. During the
period from May 1, 1995 to April 30, 1996, Tenant shall pay to
Landlord an annual rental of One Hundred Two Thousand
($102,000) Dollars payable in monthly installments of Eight
Thousand Five Hundred ($8,500) Dollars on the first day of each
month.
2. UTILITIES AND OTHER CHARGES.
Tenant will pay directly before the same become
delinquent all charges, duties, rates, license and permit fees
and other amounts of every description to which the Premises or
any part thereof or any improvement thereon erected or used by
Tenant may, during the term hereof, be assessed or become
liable for electricity, refuse collection, telephone or any
other utilities or services or any connection or meters
therefor, whether assessed to or payable by Landlord or Tenant.
Tenant will, within ten (10) days after receipt of written
demand by Landlord, furnish Landlord with receipts or other
evidence indicating that all such amounts have been paid.
Provided, however, that Tenant shall only be responsible for
those charges and assessments which are for the period of its
occupancy of the Premises.
3. TAXES AND ASSESSMENTS.
Landlord will pay and keep current the real estate
taxes assessed against the premises.
4. COMPLIANCE WITH LAWS AND REGULATIONS.
Tenant will at all times during the term hereof keep
the Premises in good order and a strictly sanitary condition
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and observe and perform all laws, ordinances, orders, rules and
regulations now or hereafter made by any governmental authority
for the time being applicable to the Premises or any
improvement thereon or use thereof, and with the orders, rules
and regulations of the National Board of Fire Underwriters or
similar organization so far as the same may relate to the use
of the Premises, and will indemnify Landlord against all
actions, suits, damages and claims by whomsoever brought or
made by reason of the nonobservance or nonperformance of such
laws, ordinances, orders, rules and regulations, or of this
covenant. Nothing herein shall obligate the Tenant to
construct any additional improvements on the Premises.
5. INSPECTION.
Tenant will permit Landlord and its agents at all
reasonable times during the term hereof to enter the Premises
and examine the state of repair and condition thereof, and the
use being made of the same. Landlord may also enter upon the
Premises to perform any repairs or maintenance which Tenant has
failed to perform hereunder, and to show the premises to
prospective purchasers, tenants and mortgagees. Further,
Landlord shall have the right to have test borings done on the
premises on weekends, but done in such a manner as not to
unreasonably interfere with Tenant's business thereon.
6. REPAIR AND MAINTENANCE.
Tenant will, at its own expense, from time to time and
at all times during the term hereof, well and substantially
repair, maintain, amend and keep the Premises, together with
all fixtures and items of personal property used or useful in
connection therewith, with all necessary reparations and
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amendments whatsoever in as good order and condition as they
now are or may be put in, reasonable wear and tear and damage
by the elements and such unavoidable casualty against which
insurance is not required hereunder excepted. Tenant will
maintain the signs on the Premises and fix all potholes that
may develop. Tenant will have the benefit of all warranties
pertaining thereto. Tenant will remove snow from the Premises
and keep the sidewalks clean and free from ice and snow.
7. USE.
Tenant shall use the Premises only for the operation
of a parking lot and other accessory uses relating to motor
vehicles.
8. NOTICES RE PREMISES.
Landlord will forthwith furnish Tenant copies of any
notices it receives regarding the Premises from any third
parties which notices relate to the Tenant's use and occupancy
of the Premises.
9. CANCELLATION OF LEASE.
Landlord and Tenant may cancel this Lease upon thirty
(30) days' notice to the other.
10. INSURANCE.
Tenant will, at its own cost and expense, effect and
maintain during the term hereof, a policy or policies of
comprehensive general liability insurance, or its equivalent,
with minimum limits of not less than $500,000 for injury to
one or more persons in any one occurrence, and also insurance
in the sum of not less than $1,000,000 against claims for
property damage in any one accident, such policy or policies
to name Landlord as additional assured, to require the insurer
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to give Landlord at least ten days' written notice of its
intention to cancel, terminate or amend the insurance policy
or policies in any material respect, and to cover the entire
Premises. Tenant may insure premises as part of a blanket
policy.
11. LANDLORD'S COSTS AND EXPENSES.
If Tenant shall fail to comply with any of its
obligations hereunder, Landlord may, upon ten (10) days' prior
written notice to Tenant (or without notice in case of
emergency), take such action as may be reasonably required to
cure any such default by Tenant. Tenant will pay to Landlord,
on demand, all costs and expenses, including reasonable
attorneys' fees, incurred by Landlord in collecting any
delinquent rents, or other charges payable by Tenant
hereunder, or in connection with any litigation commenced by
or against Tenant (other than condemnation proceedings) to
which Landlord, without any fault on its part, shall be made a
party. All such amounts owing to Landlord shall constitute
additional rent hereunder.
12. INDEMNIFICATION OF LANDLORD.
12.1. Tenant shall indemnify and save harmless
Landlord (regardless of Tenant's covenant to insure) against
and from any and all claims by or on behalf of any person or
persons, firm or firms, corporation or corporations, arising
from the use, occupancy, conduct or management of the
Premises, unless done by or contributed to Landlord, any of
its agents, contractors, servants, employees or licensees, and
shall further indemnify and save Landlord harmless against and
from any and all claims arising during the term hereof from
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any condition of the Premises, or arising from any breach or
default on the part of Tenant in the performance of any
covenant or agreement on the part of Tenant to be performed
pursuant to the terms of this Lease, or arising from any act
of Tenant or any of its agents, contractors, servants or
employees to any person, firm or corporation occurring during
the term hereof in or about the Premises or upon or under said
areas, and from and against all costs, counsel fees, expenses
or liabilities incurred in or about any such claim or action
or proceeding brought thereon.
12.2 Tenant shall pay and indemnify Landlord against
all legal costs and charges incurred in obtaining possession
of the Premises after the default of Tenant or upon expiration
or earlier termination of the term hereof, other than by
reason of any default of Landlord, or in enforcing any
covenant or agreement of Tenant herein contained.
13. LIENS.
13.1 Tenant will not commit, suffer any act or
neglect whereby the Premises or any improvements thereon or
the estate of Landlord therein shall at any time during the
term hereof become subject to any attachment, judgment, lien,
charge or encumbrance whatsoever, except as herein expressly
provided, and will indemnify and hold Landlord harmless from
and against all loss, costs and expenses, including reasonable
attorneys' fees, with respect thereto.
13.2 If due to any act or neglect of Tenant, any
mechanic's, laborer's or materialmen's lien shall at any time
be filed against the premises or any part hereof, Tenant,
within thirty (30) days after notice of the filing thereof
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shall cause the same to be discharged of record by payment,
bonding or otherwise, and if Tenant shall fail to cause the
same to be discharged, then Landlord may, in addition to any
other right or remedy, cause the same to be discharged, either
by paying the amount claimed to be due, or by procuring the
discharge of such lien by deposit or by bonding proceedings,
and all amounts so paid by Landlord, together with all
reasonable costs and expenses incurred in connection
therewith, and together with interest thereon at the rate of
ten percent (10%) per annum from the respective dates of
payment, shall be paid by Tenant to Landlord, on demand, as
additional rent hereunder.
13.3 Nothing in this Lease contained shall be deemed
or construed in any as constituting the consent or request of
Landlord, express or implied by inference or otherwise, to any
contractor, subcontractor, laborer, materialmen, architect or
engineer for the performance of any labor or the furnishing of
any materials or services for or in connection with the
Premises or any part thereof. Notice is hereby given that
Landlord shall not be liable for any labor or materials or
services furnished or to be furnished to Tenant upon credit,
and that no mechanic's or other lien for any such labor,
materials, or services shall attach to or affect the fee or
reversionary or other estate or interest of Landlord in the
Premises of and in this Lease.
14. DEFAULT.
14.1 In the event that during the term hereof any of
the following events shall occur (each of which shall be an
"Event of Default"):
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(a) Tenant shall default in the payment of any
installment of the Rent for ten (10) days after the same shall
become due, during which ten-dayperiod Tenant may cure the
default;
(b) Tenant or any permitted assignee of Tenant
shall (i) apply for or consent to an appointment of a
receiver, a trustee or liquidator of it or of all or a
substantial part of its assets; (ii) make a general assignment
for the benefit of creditors; (iii) be adjudicated a bankrupt
or insolvent; (iv) file a voluntary petition in bankruptcy or
a petition or an answer seeking reorganization or an
arrangement with creditors to take advantage of any insolvency
law or an answer admitting the material allegations of a
petition filed against it in any bankruptcy, reorganization or
insolvency proceeding or corporate action shall be taken by it
for the purpose of effecting any of the foregoing;
(c) An order, judgment or decree shall be entered,
without the application, approval or consent of Tenant or any
permitted assignee of Tenant by any court of competent
jurisdiction, approving a petition seeking reorganization of
Tenant or such assignee or appointing a receiver, trust or
liquidator of Tenant or such assignee or of all or a
substantial part of its assets and such order, judgment or
decree shall continue unstayed and in effect for any period of
sixty (60) consecutive days; or
(d) Any other default by Tenant in performing any
of its other obligations hereunder shall continue uncorrected
for ten (10) days after receipt of written notice thereof from
Landlord, during which period Tenant or such assignee may cure
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the default; then Landlord may, by giving written notice to
Tenant, either (a) terminate this Lease, (b) re-enter the
Premises by summary proceedings or otherwise, expelling Tenant
and removing all of Tenant's property therefrom, and relet the
Premises and receive the rent therefrom, or (c) exercise any
other remedies permitted by law. Tenant shall also be liable
for the reasonable cost of obtaining possession of and
reletting the Premises and of any repairs and alterations or
other payments necessary to prepare them for reletting. Any
and all such amounts shall be payable to Landlord upon demand.
Notwithstanding anything contained herein to the contrary, no
termination of this Lease prior to the last day of the term
hereof, except as provided in Section 15 hereof, shall relieve
Tenant of its liability and obligations under this Lease, and
such liability and obligations shall survive any such
termination.
14.2 In the event of any breach by Tenant of any of
the covenants, agreements, terms or conditions contained in
this Lease, Landlord shall be entitled to enjoin such breach
or threatened breach and shall have the right to invoke any
right and remedy allowed at law or in equity, or by statute or
otherwise, as though reentry, summary proceedings and other
remedies were not provided for in this Lease.
14.3 Each right and remedy of Landlord provided for
in this Lease shall be cumulative and shall be in addition to
every other right or remedy provided for in this Lease or now
or hereafter existing, at law or in equity, or by statute or
otherwise, and the exercise or beginning of the exercise by
Landlord of any one or more of the rights or remedies provided
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for in this Lease, or now or hereafter existing at law or in
equity, or by statute or otherwise, shall not preclude the
simultaneous or later exercise by Landlord of any or all other
rights or remedies provided for in this Lease, or now or
hereafter existing at law or in equity, or by statute or
otherwise.
15. EMINENT DOMAIN.
If the whole or any part of the demised premises
shall be condemned or acquired by eminent domain for any
public or quasi-public use or purpose, then the term of this
Lease shall cease and terminate as of the date of vesting of
title in such proceeding and all rentals shall be paid up to
the date of the vacating of the premises by Tenant and Tenant
shall have no claim against Landlord nor the condemning
authority for the value of any unexpired term of this Lease.
In the event of any condemnation or taking as
aforesaid, whether whole or partial, Tenant shall not be
entitled to any part of the award paid for such condemnation
and Landlord is to receive the full amount of such award,
Tenant hereby expressly waiving any right or claim to any part
thereof.
16. CONDITION OF PREMISES.
Tenant represents that the Premises, the sidewalks
and structures adjoining the same, and any subsurface
conditions thereof, and the present uses and non-uses thereof,
have been examined by Tenant, and Tenant agrees that it will
accept the same in the condition or state in which they, or
any of them, now are, without representation or warranty,
express or implied in fact or by law, by Landlord, and without
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recourse to Landlord as to the nature, condition or usability
thereof, or the use or uses to which the Premises, or any part
thereof, may be put.
17. INDEPENDENT COVENANTS--NO WAIVER.
17.1 Each and every of the covenants and agreements
contained in this Lease shall be for all purposes construed to
be separate and independent covenants and the waiver of the
breach of any covenant contained hereby by Landlord shall in
no way or manner discharge or relieve Tenant from Tenant's
obligation to perform each and every of the covenants
contained herein.
17.2 If any term or provision of this Lease or the
application thereof to any person or circumstance shall to any
extent be invalid or unenforceable, the remainder of this
Lease, or the application of such term or provision to persons
or circumstances other than those as to which it is invalid or
unenforceable, shall not be affected thereby, and each term
and provision of this Lease shall be valid and shall be
enforced to the fullest extent permitted by law.
17.3 The failure of Landlord to insist in any one or
more cases upon the strict performance of any of the covenants
of this Lease shall not be construed as a waiver or a
relinquishment for the future of such covenant. A receipt by
Landlord of rent with knowledge of the breach of any covenant
hereof shall not be deemed a waiver of such breach, and no
waiver by Landlord of any provision of this Lease shall be
deemed to have been made unless expressed in writing and
signed by Landlord. All remedies to which Landlord may resort
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under the terms of this Lease or by law provided shall be
cumulative.
18. SUBORDINATION.
This Lease and the rights of Tenant hereunder are
subject and subordinate in all respects to all matters of
record, including, without limitation, deeds and all mortgages
which may now or hereafter be placed on or affect the
Premises, or any part thereof, and/or Landlord's interest or
estate therein, and to each advance made and/or hereafter to
be made under any such mortgages, and to all renewals,
modifications, consolidations, replacements and extensions
thereof, and all substitutions therefor; provided, however,
that before such subordination shall be effective, Landlord
shall cause the mortgagee, or other party in interest, as the
case may be, to deliver to Tenant an assent to this Lease, in
proper form for recording whereby such mortgagee or other
party agrees that no foreclosure of such mortgage or any
action taken with respect thereto, by such mortgagee or any
other person claiming by or through or under such mortgage (or
other interest) shall disturb the possession of Tenant under
this Lease so long as Tenant is not in default hereunder, and
that the validity and continuance of this Lease will be so
recognized. Simultaneously with the delivery of such an
agreement, Tenant agrees to execute and deliver an instrument
in proper form for recording, wherein Tenant agrees to and
does subordinate this Lease to the liens of the mortgagees and
others as above-mentioned, and to all renewals, modifications,
consolidations and replacements and extensions of such
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mortgages thereunder, and to any persons claiming by, through
or under such mortgages or other such interest.
19. QUIET ENJOYMENT.
Landlord covenants that Tenant, upon paying the rent
and performing the covenants hereof on the part of Tenant to
be performed shall and may peaceably and quietly have, hold
and enjoy the Premises and all related appurtenances, rights,
privileges and easements throughout the term hereof without
any lawful hindrance by Landlord and any person claiming by,
through or under it.
20. RETURN OF PREMISES.
At the expiration or other temination of the term
hereof, Tenant will remove from the Premises its property and
that of all claiming under it and will peaceably yield up to
Landlord the Premises in as good condition in all respects as
the same were at the commencement of this Lease, except for
ordinary wear and tear, damage by the elements, by any
exercise of the right of eminent domain or by public or other
authority, or damage which Landlord is required herein to
replace, restore or rebuild or damage for which no insurance
is required hereunder.
21. CONSTRUCTION.
The mention of the parties hereto by name or
otherwise shall be construed as including and referring to
their respective successors and assigns as well as to the
parties themselves whenever such construction is required or
admitted by the provisions hereof; and all covenants,
agreements, conditions, rights, powers and privileges
hereinbefore contained shall inure to the benefit of and be
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binding upon the successors and assigns of such parties,
unless otherwise provided.
22. PERMITS.
Tenant, at its cost, shall obtain any necessary
permits for the Premises from the City of Providence.
23. NOTICES.
Whenever notice shall be given under this Lease, the
same shall be in writing and shall be sent by certified or
registered mail, return receipt requested as follows:
To the Landlord: One Hospital Trust Plaza
Suite 920
Providence, Rhode Island 02903
To the Tenant: c/o Charles Meyers
56 Pine Street
Providence, Rhode Island 02903
To the Tenant's Alan T. Dworkin, Esq.
Attorney: 164 Airport Road
Warwick, Rhode Island 02889
or to such other address or addresses as each party may from
time to time designate by like notice to the other. Said
notice shall be valid and times begin to run hereunder upon
receipt of the party to which said notice is given.
IN WITNESS WHEREOF, the parties hereto have caused these
presents to be executed in duplicate as of the day and year
first above written.
CAPITAL PROPERTIES, INC.
By
Barbara J. Dreyer, Treasurer
METROPARK, LTD.
By
Charles Meyers, President
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STATE OF RHODE ISLAND
COUNTY OF PROVIDENCE
In Providence, in said County on the 10th day of November,
1994, before me personally appeared BARBARA J. DREYER,
Treasurer of CAPITAL PROPERTIES, INC., to me known and known
by me to be the person executing the foregoing instrument on
behalf of said corporation, and she acknowledged said
instrument by her executed to be her free act and deed and the
free act and deed of said corporation.
Notary Public
STATE OF RHODE ISLAND
COUNTY OF PROVIDENCE
In Providence, in said County on the 10th day of November,
1994, before me personally appeared CHARLES MEYERS, President
of METROPARK, LTD., to me known and known by me to be the
person executing the foregoing instrument on behalf of said
corporation, and he acknowledged said instrument by him
executed to be his free act and deed and the free act and deed
of said corporation.
Notary Public
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GUARANTEE
In consideration of the execution of the foregoing lease by
the Landlord, the undersigned (jointly and severally, if more
than one) guarantees that the Tenant will pay all rent
thereunder and will perform all other terms, conditions or
agreements on its part to be performed or fulfilled, and
agrees that the foregoing lease may be amended from time to
time by the parties thereto without notice to the undersigned.
The undersigned consents that extensions of time of payment or
any other indulgences may be granted to the Tenant without
notice to and without releasing or affecting in any way the
liability of the undersigned and the undersigned waives demand
and notice of default. This guarantee is in addition to any
other security which the Landlord may have for the performance
of the Tenant's obligations and the Landlord may have the
recourse to this guarantee without first pursuing the
Landlord's remedies against such other security, if any. The
Landlord may release, in whole or in part, any other security
without releasing or affecting in any way the liability of the
undersigned. In addition, the undersigned will pay to the
Landlord all costs and expenses (including attorneys' fees)
incurred in connection with the enforcement of this guarantee.
Executed this 10th day of November, 1994.
Charles Meyers
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BRIEF DESCRIPTION OF
THE COMPANY'S BUSINESS
The Company's business consists of the leasing of certain of
its real estate interests in downtown Providence, Rhode
Island, the operation of other downtown Providence
properties as public parking facilities, and the leasing of
its petroleum storage terminal facilities in East
Providence, Rhode Island. Through its wholly-owned
subsidiary, Tri-State Displays, Inc., the Company also
leases outdoor advertising locations and boards along
interstate and primary highways for outdoor advertising
purposes.
PRESIDENT'S REPORT
In the accompanying financial statements for the calendar
year 1994, the Company is reporting income before taxes of
$339,000.
The Company's income is derived primarily from rentals,
garage and surface parking operations, and interest. The
rental income results from leasing certain real estate in
downtown Providence, petroleum storage facilities in East
Providence and outdoor advertising locations and boards
along interstate and primary highways in Rhode Island and
Massachusetts. The Company operates a public parking garage
together with surface parking on land adjacent to the
garage. Interest income results primarily from a 20-year
promissory note issued to the Company on January 1, 1988 by
Providence and Worcester Railroad Company in connection with
the transfer of ownership by the Company of all of the stock
of the Railroad, its former wholly-owned subsidiary,
directly to the Company's shareholders.
The Company's common stock is listed on the Boston Stock
Exchange under the symbol "CPI," and is also traded over-
the-counter.
During 1994, the Company paid a dividend of $.40 per share
on the Company's outstanding stock. The Company has been
classified as a personal holding company (PHC) for federal
income tax purposes due to the present composition of the
Company's stock ownership and revenues. A PHC is subject to
an additional tax on amounts classified as undistributed PHC
income. This classification did not affect the Company's
federal income tax liability because the Company made
sufficient dividend distributions to shareholders.
DOWNTOWN PROVIDENCE REAL ESTATE
The Company owns approximately 20.5 acres of land within the
Capital Center Project area ("Capital Center") of downtown
Providence, including 1.9 acres of air rights over Amtrak's
Northeast Corridor (Boston to New York City) railroad
tracks. These properties are shown on the plan which
appears on page 6 of this Report, and the various parcels of
land and improvements hereinafter referred to are identified
on that plan.
Capital Center is a massive railroad relocation/urban
redevelopment cooperative project which involved the
federal, state and city governments along with Amtrak and
the Company. The project commenced in 1983 with the
relocation within downtown Providence of Amtrak's Northeast
Corridor railroad tracks in order to make available for
private commercial development land adjacent to the existing
financial district, much of which had previously been used
for railroad purposes. A new Amtrak rail passenger station
has been constructed (marked "E" on the plan), together with
an adjacent below grade parking garage owned by the Company
and located on Parcel 7A. Also completed are a new highway
interchange connecting Capital Center to Interstate Route 95
and all of the remaining infrastructure including additional
roads, bridges, utilities and public parks and plazas. With
the exception of a few minor items, the construction of all
of the public elements of Capital Center has been completed.
All construction within Capital Center (both public and
private) is regulated by a special commission created by the
Rhode Island State Legislature called the Capital Center
Commission.
In 1988, the State and the City began construction of the
so-called River Relocation Project under which two rivers
flowing through Capital Center were to be relocated. The
purpose of such relocation was to reclaim Providence's
waterfront heritage and to
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use the rivers as an attraction
for private development as well as for public recreation and
entertainment. Both of the rivers (marked "D" on the plan)
have been relocated. The rivers will be lined with
pedestrian riverwalks, some of which have already been
completed, and these riverwalks will be extended as private
development occurs along the rivers. Insofar as Capital
Center is concerned, all public improvements related to
river relocation have been substantially completed. The
final phase of construction under the River Relocation
Project is now taking place outside of Capital Center but
adjacent thereto. It will involve substantial public
improvements to the Providence River including the removal
of decking over the river exposing more of the river to
public view and the development of riverwalks and public
spaces along the river, as well as making the rivers capable
of handling such amenities as water taxi service. This
final phase is expected to be completed by November 1995.
In addition to the parcel described above (Parcel 7A), the
Company owns within Capital Center Parcels 2, 3S, 3W, 3E,
4W, 4E, 5, 6, 8 and 9, as shown on the plan. Some of these
parcels have either already been developed or are the
subject of discussions with potential developers as
hereinafter described. The Company also owns a 15,000
square foot parcel (Parcel 22) and a 3,000 square foot
parcel (Parcel 21) which are located outside of but
immediately adjacent to Capital Center.
The parking garage and the properties not yet developed
(except Parcels 2 and 9) are being operated by the Company
for public parking purposes under a management agreement
with a firm experienced in parking operations, except that
Parcels 3E, 4E, 3W, 4W, 21 and 22 have been leased to the
same firm for surface parking purposes under leases which
can be terminated on short notice should suitable
development opportunities arise.
Construction of a new convention center partially within
Capital Center was completed and opened for use in December
1993. The Convention Center was constructed at public
expense and is owned and operated by a state agency known as
the Rhode Island Convention Center Authority. The
Convention Center contains 100,000 square feet of exhibition
space, a 20,000 square foot banquet hall, and two parking
garages with combined capacity for 2,400 cars. A 363-room
Westin Hotel, located on the grounds of the Convention
Center and also constructed at public expense, was opened in
November 1994. The Convention Center, Westin Hotel and
related facilities (marked "F" on the plan) are adjacent to
the Company's properties. The Convention Center is expected
to spur new growth and development in downtown Providence.
At the request of the Governor of Rhode Island, I have been
serving by gubernatorial appointment since January 1994 as
Chairman of the Rhode Island Convention Center Authority, an
unpaid and part-time position. In my view, the success of
the Convention Center will enhance the economic well-being
of downtown Providence.
RIVER RELOCATION AND RELATED CONDEMNATION
When the River Relocation Project was first proposed, the
Company, concerned primarily that the relocation plan would
delay the availability of its properties for development
purposes, opposed the relocation and, in 1985, brought suit
for damages against the State and the City. However, in
January 1987, the Company entered into a Settlement
Agreement with the State which resulted in a dismissal of
that lawsuit.
In order to accommodate the relocation of the rivers, the
State condemned a portion of the Company's property in
November 1987. The State and City had previously agreed to
share all land condemnation costs. As part of the
aforementioned Settlement Agreement, the State, in 1989,
deeded to the Company a 72,000 square foot parcel of land in
Capital Center (Parcel 9). As payment for Parcel 9, the
Company was required
-3-
to return to the State an amount equal
to the State's share of the condemnation award, but the
Company was entitled to retain the balance of such award.
In April 1988, the Company filed a petition in the Rhode
Island Superior Court for an increased condemnation award
alleging that the award paid to date ($2,600,000) was
inadequate. In January 1992, the Superior Court awarded the
Company an additional condemnation award of $401,000 plus
interest from the date of condemnation. The Company had
asserted in the Superior Court that it was entitled to an
additional condemnation award in excess of $6,000,000 plus
interest, and accordingly, in February 1992, the Company
appealed the decision of the Superior Court to the Rhode
Island Supreme Court. In an Opinion issued in January 1994,
the Supreme Court overturned the Superior Court decision and
returned the matter to the Superior Court for a retrial of
the case. It is expected that the case will be retried in
the second quarter of 1995. The Company cannot now
determine what amount, if any, will be awarded beyond that
already paid at the time of condemnation. Under the
Settlement Agreement, the Company may be required to return
to the State a share of the condemnation award as and when
finally determined.
PRIVATE DEVELOPMENT
In 1988, the Company and CFG Associates, L.P. (CFG) entered
into a 99-year land lease under which CFG, in 1990,
completed the construction of an office building containing
approximately 235,000 gross square feet on Parcel 3S. The
general partner in CFG is a subsidiary of Citizens Financial
Group, Inc. whose commercial banking affiliate is the
building's principal tenant. Citizens Financial Group, Inc.
is, in turn, an affiliate of Royal Bank of Scotland.
In 1988, the Company and Gateway Eight Limited Partnership
(Gateway Eight) entered into a 102-year land lease under
which Gateway Eight, in 1990, completed the construction of
an office building containing approximately 114,000 gross
square feet on Parcel 8. Gateway Eight is an affiliate of
Congress Group Ventures, Inc. of Cambridge, Massachusetts.
The building is completely occupied by First Data
Corporation.
In 1988, the Company and Parcel Five Limited Partnership
(Parcel Five L.P.) entered into a 102-year land lease under
which Parcel Five L.P., in 1991, completed the construction
of an apartment building containing approximately 454,000
gross square feet on Parcel 5. Parcel Five L.P. is
affiliated with a Harvard University endowment fund.
In 1990, the Company and an affiliate of Congress Group
Ventures, Inc., entered into a land lease under which the
lessee proposed to construct a hotel on a 58,000 square foot
portion of Parcel 2. The Capital Center Commission had
previously approved the plans for this development. The
lease was not to begin until the commencement of
construction which was delayed beyond the date provided in
the lease; and accordingly, the Company opted to terminate
the lease effective December 31, 1994. The Company and
Congress Group Ventures, Inc., are now discussing terms of a
proposed new land lease for the same parcel.
The Company, in 1989, entered into a letter of intent with
One Park Row East Corporation (One Park Row), an affiliate
of First Quebec Corporation of Montreal, Canada, under which
One Park Row proposes to construct an office building
containing approximately 95,000 gross square feet on Parcel
4E. The plans for this development have already been
approved by the Capital Center Commission, but construction
will not commence until such time as One Park Row has
identified tenants to occupy a significant portion of the
building. When such tenants have been identified, the
-4-
letter of intent will be supplanted by a formal land lease
yet to be fully negotiated. In the interim, One Park Row
has obtained all permits necessary to commence construction.
OTHER OPERATIONS
In 1991, the Company's petroleum storage facilities were
leased to Coastal Oil New England, Inc., an affiliate of
Coastal Corporation, under a five-year lease with the right
in Coastal to extend the lease term for an additional five
years. At any time during the first five years of the
lease, Coastal may exercise an option to purchase the
petroleum storage facilities.
Tri-State Displays, Inc., the Company's wholly-owned
subsidiary, owns or controls 22 locations along interstate
and primary highways in Rhode Island and Massachusetts which
are leased to outdoor advertising companies for commercial
advertising purposes. These locations contain a total of 42
billboard faces. The outdoor advertising companies own these
structures at all these locations except one location (2
billboard faces) which is owned by Tri-State. All of the
billboard faces are the large painted bulletins normally
seen along interstate and primary highways. The Company has
additional locations along interstate and primary highways
in Rhode Island, Massachusetts and Connecticut, and, in
cooperation with outdoor advertising companies, is
attempting to obtain public permits to use some of these
additional locations for outdoor advertising purposes. At
yearend, a large majority of the Company's outdoor
advertising locations are leased to Whiteco Metrocom, a
division of Whiteco Industries, Inc. of Merrillville,
Indiana. In addition to its outdoor advertising activities,
Whiteco owns and/or operates 25 hotels and family
entertainment centers and does business in 35 states.
John W. Wall will be retiring from service as a director of
the Company in April of this year. Although Mr. Wall served
only for one year, his wise counsel was of inestimable value
to the Company during his period of service. All of us in
management will miss him.
Sincerely,
s/Joseph R. DiStefano
Joseph R. DiStefano
President
March 6, 1995
-5-
MAP IN ANNUAL REPORT
The map in the Annual Report to Shareholders is a plan of a
portion of downtown Providence, Rhode Island, which indicates those
parcels owned by the Issuer in that area known as "Capital Center" and
immediately adjacent thereto. A legend contains the Parcel Number, the
Parcel Size and the Development on the Parcels as follows:
<TABLE>
<CAPTION>
Parcel No. Square Feet
CAPITAL PARCEL SIZE DEVELOPMENT ON PARCELS
CENTER
<S> <C> <C>
2 92,000
3S 48,000....... 13 Story Office Building -
235,000 gross square feet
3W 35,000
3E 24,000
4W 46,000
4E 22,000
5 54,000....... 8 Story Luxury Apartment Building -
454,000 gross square feet
6 386,000 (Land, 303,000; Air Rights, 83,000)
7A 76,000....... 360 Car Public Parking Garage
8 36,000....... 4 Story Office Building -
114,000 gross square feet
9 72,000
<CAPTION>
OUTSIDE
CAPITAL
CENTER
<S> <C>
21 3,000
22 15,000
</TABLE>
(See President's Report, Pages 5 and 6, for discussion of the
development on the parcels.)
-6-
CAPITAL PROPERTIES, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Financial condition:
In 1988, in accordance with a plan of distribution, the
Company transferred the ownership of its then wholly-owned
subsidiary, Providence and Worcester Railroad Company
(Railroad), to the Company's shareholders. As part of the
plan, the Company received a promissory note in the amount
of $9,377,000 payable over a period of twenty years with
interest at 12% per year. During 1994 and 1993, Railroad
made voluntary prepayments totalling $300,000 and $710,000,
respectively, resulting in present monthly installments of
$84,000. The Company presently intends to hold the note to
maturity. The note is secured by a first mortgage on a
significant portion of Railroad's right-of-way in
Massachusetts. The note, which had an outstanding principal
balance of $6,682,000 at December 31, 1994, has been pledged
as collateral for a note payable to a bank with a balance of
$2,053,000 at December 31, 1994.
In addition to the note from Railroad, the Company's
principal assets consist of land, a public parking garage,
petroleum storage facilities, and outdoor advertising sites.
A significant portion of the land consists of approximately
20.5 acres, including 1.9 acres of air rights, in downtown
Providence, Rhode Island, held for development. As of
December 31, 1994, the Company has entered into three long-
term land leases covering approximately 3.2 acres of land.
On one of the parcels, the tenant has constructed an office
building which is now fully occupied. On another of the
parcels, the tenant has constructed an office building which
is now approximately 92% occupied. On a third parcel, the
tenant has constructed an apartment building which is now
fully leased. The Company is negotiating a lease on a
fourth parcel and is engaged in discussions concerning the
possible development of other parcels but is unable to
predict when leases on additional parcels will commence.
However, the Company will continue to use the available
parcels for public surface parking. The Company anticipates
that future development of the remaining properties will
consist primarily of long-term ground leases under which the
significant portion of future rental income will not be
earned until the buildings are completed by the tenants and
occupied.
Certain of the Company's land leases provide for scheduled
rent increases over their terms which extend to the year
2091. In accordance with the provisions of Financial
Accounting Standards Board Statement No. 13 (Accounting for
Leases) and certain of its interpretations, the Company is
recognizing the rental income on the straight-line basis
over the terms of the leases; however, the Company does not
report as income that portion of such straight-line rentals
which management cannot conclude is realizable (collectible)
due to the length of the lease terms and other related
uncertainties. At December 31, 1994, the cumulative amount
not reported as income is $7,698,000.
During 1993, two of the Company's leases had scheduled rent
increases totalling $225,000 on an annual basis ($135,000
commencing April 1993 and $90,000 commencing October 1993).
During 1994, one of the Company's leases had a scheduled
rent increase of $47,000 on an annual basis commencing
October 1994. One of the Company's leases provides for a
scheduled rent increase of approximately $27,000 on an
annual basis commencing February 1995.
-7-
The Company had a lease on another parcel, which lease had
not commenced due to the inability of the developer to
secure financing. The lease was terminated in 1994. Such
termination has no impact on the operations and liquidity of
the Company.
Effective October 1, 1991, the Company's petroleum storage
facilities were leased under a five-year lease under which
the tenant has the right to extend the lease term for an
additional five years. At any time during the first five
years of the lease, the tenant can exercise an option to
purchase the petroleum storage facilities. The purchase
price during the first year of the lease was $4,500,000 and
is increased by an inflation factor in each of the remaining
four years ($4,961,000 at December 31, 1994). The Company
has not been advised by the tenant as to whether it will
extend the term of the lease beyond September 1996 or
whether it will purchase the terminal. The tenant must
advise the Company by September 30, 1995 whether it intends
to extend the lease term for an additional five years. The
Company is presently unaware of the tenant's intentions
either to extend the lease or to acquire the terminal. In
the event the tenant neither extends the lease nor purchases
the terminal, the Company believes it will have sufficient
time to locate a successor tenant.
In connection with the petroleum storage terminal
facilities, the Company believes that its exposure to loss
from environmental matters, if any, is minimal because the
Company is indemnified by the tenant which is a wholly-owned
subsidiary of a large publicly-traded corporation.
In August 1994, a leak was discovered in a 25,000 barrel
storage tank at the petroleum terminal facilities which
allowed the escape of a small amount of fuel oil. The tank
was emptied, and all required notices were made to the
appropriate environmental agency. No soil contamination has
been detected as a result of this leak, and monitoring wells
have to date shown no groundwater contamination.
Accordingly, the Company's engineering consultants have
determined that no additional remediation is necessary at
this time. The Company is of the opinion that the tenant of
these facilities is solely responsible for the payment of
all costs to repair the tank, including related professional
fees, and for remediation of any damage caused by such leak.
These costs are presently estimated at $66,000 and are
included as a receivable from the tenant and a liability on
the accompanying consolidated balance sheet. The tenant
does not agree that it is responsible for the payment of
such costs. The lease provides for arbitration in the event
the parties cannot reach agreement on the matter.
In management's opinion, the Company will continue to be
able to generate adequate amounts of cash to meet
substantially all of its operating expenditures.
In 1993 and 1994, the Company paid dividends of $.32 and
$.40 per share, respectively, on the Company's outstanding
common stock. The Company expects to be in a position to
continue dividend payments on a semi-annual basis; however,
the declaration of any dividend and the amount thereof will
depend on the Company's future earnings, financial condition
and other relevant factors.
Since 1988, the Company repurchased and subsequently retired
34,968 shares of its outstanding common stock. In June
1993, the Company's articles of incorporation were amended
to reduce the number of common shares authorized from
1,400,000 to 1,000,000. The Company does not presently plan
to purchase any additional shares of its own stock.
In connection with river relocations in downtown Providence,
Rhode Island, the State of Rhode Island condemned a portion
of the Company's property and paid an award of $2,600,000 in
1987. As part of an agreement to purchase another parcel of
land from the State, the Company was required to return to
the State a portion of the
-8-
condemnation award ($1,600,000).
In April 1988, the Company filed a petition in the Rhode
Island Superior Court for an increased condemnation award
alleging that the award paid to date was inadequate. In
January 1992, the Superior Court awarded the Company an
additional condemnation award of $401,000 plus interest at
12% per annum from the date of the condemnation. The
Company had asserted in the Superior Court that it was
entitled to an additional condemnation award in excess of
$6,000,000 plus interest, and accordingly, in February
1992, the Company appealed the decision of the Superior
Court to the Rhode Island Supreme Court. In an opinion
issued in January 1994, the Supreme Court overturned the
Superior Court decision and returned the matter to the
Superior Court for a retrial of the case. It is expected
that the case will be retried in the second quarter of 1995.
The Company cannot now determine what amount, if any, will
be awarded beyond that already paid at the time of
condemnation. Under the aforementioned agreement, the
Company may be required to return to the State a portion of
any final award as and when finally determined.
In connection with the purchase of a parcel of land in 1990,
the Company increased the principal amount of a note
previously given to a bank from $800,000 to $1,425,000, with
interest at 1% over prime payable in monthly installments of
principal in the amount of $8,000, plus interest. The note
was further extended to December 1994. During 1993, a
portion of the funds received from Railroad as voluntary
prepayments of principal were used to make prepayments on
this note totalling $650,000. In 1994, the Company prepaid
the remaining balance.
In 1990, the Company refinanced a note with a bank of
$2,500,000 by making a principal payment of $50,000 and by
issuing a new note in the amount of $2,450,000 with interest
at 1% over prime due in July 1993. This note was extended
to December 1994 and further extended to December 1999, and
provides for monthly installments of principal and interest
of approximately $27,000 with a final payment of $1,281,000.
The note is secured by the Company's parking garage which
collateralized the original note and the note receivable
from Railroad.
The Company does not know if Railroad will continue to make
voluntary prepayments of principal on its note. However, if
such prepayments are made, it is the intention of the
Company to make prepayments on its remaining note after
evaluating its cash position at that time.
The Company has no established policy for the purchase of
additional land. However, should suitable parcels become
available in the general area of the Company's current land
holdings, the Company would consider such an acquisition
depending on current levels of cash and the availability of
financing.
Under an agreement with the State of Rhode Island entered
into in 1990, the Company will owe the State $158,000 sixty
days after the completion by the State of a construction
contract for certain public improvements affecting one of
the Company's parcels. The Company anticipates that such
payment will not be due until the third quarter of 1995 at
the earliest and will be reimbursable by the developer of
such parcel. The agreement is secured by a mortgage on one
of the Company's parcels. The agreement further provides
that, should the amount not be paid when it is due, interest
will accrue from the due date at the rate of prime plus 1%.
Except as discussed above, none of the Company's remaining
properties and equipment are pledged as collateral for any
of the Company's obligations.
For the two years ended December 31, 1994, the Company has
been classified as a personal holding company (PHC) for
federal income tax purposes due to the present composition
of the Company's stock ownership and revenues. A PHC is
-9-
subject to an additional tax of 39.6% on amounts classified
as undistributed PHC income. This classification did not
affect the Company's federal income tax liability because
the Company made sufficient dividend distributions to
shareholders.
Effective January 1, 1993, the Company adopted Financial
Accounting Standards Board Statement No. 109 (FAS l09). The
adoption of FAS 109 changed the Company's method of
accounting for income taxes from the deferred method
(Accounting Principles Board Opinion No. 11) to an asset and
liability method. Previously the Company deferred the past
tax effects of timing differences between financial
reporting and taxable income. The asset and liability
method requires the recognition of deferred tax liabilities
and assets for the expected future tax consequences of
temporary differences between tax bases and financial
reporting bases of other assets and liabilities. The
cumulative effect of this change is reported as a charge to
income in the 1993 statement of loss and equalled $866,000
or $.86 per common share.
Future cash outlays for income taxes will be a more
significant portion of total tax expense and presently
exceeds tax expense for financial reporting purposes. This
results principally from the recognition of rental income on
a contractual basis for tax reporting purposes and
additional depreciation claimed for financial reporting
purposes.
Results of operations:
The Company's total income for 1994 increased 5% over the
1993 level. The increase in rental income results
principally from long-term land leases. The decrease in
interest income on the note receivable from Railroad results
from voluntary prepayments in 1994 and 1993 totalling
$300,000 and $710,000, respectively, and the scheduled
amortization of the principal balance due.
The Company operates a parking garage in downtown
Providence. The Company is also operating surface parking
adjacent to the garage and leases certain parcels for
surface parking under short-term arrangements pending future
development of the various parcels. For 1994, income
applicable to garage and surface parking increased 11% over
the 1993 level due to an increased number of vehicles
parking. Expenses applicable to garage and surface parking
have remained approximately at the 1993 level.
Expenses applicable to rental income increased 14% over the
1993 level principally due to an increase in repairs and
maintenance.
General and administrative expenses increased 5% over the
1993 level principally due to an increase in payroll and
related costs offset in part by a decrease in legal and
professional fees.
Interest expense decreased from 1993 due to the prepayments
on one of the notes to a bank previously discussed, offset
in part by an increase in the prime rate in effect during
the year.
-10-
LEFKOWITZ, GARFINKEL, CHAMPI & DeRIENZO P.C.
Certified Public Accountants/Business Consultants
One Hospital Trust Plaza, Suite 700
Providence, Rhode Island 02903
INDEPENDENT AUDITORS' REPORT
Board of Directors
Capital Properties, Inc.
Providence, Rhode Island
We have audited the accompanying consolidated balance sheet
of Capital Properties, Inc. and subsidiary as of December
31, 1994, and the related consolidated statements of income
(loss), shareholders' equity and cash flows for the years
ended December 31, 1994 and 1993. These financial
statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that
we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial
position of Capital Properties, Inc. and subsidiary as of
December 31, 1994, and the results of their operations and
their cash flows for the years ended December 31, 1994 and
1993, in conformity with generally accepted accounting
principles.
As discussed in Note 1, the Company changed its method of
accounting for income taxes in 1993.
s/Lefkowitz, Garfinkel, Champi & DeRienzo P.C.
March 6, 1995
-11-
CAPITAL PROPERTIES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1994
<TABLE>
<CAPTION>
ASSETS
<C> <C>
Properties and equipment (net of accumulated
depreciation) (Notes 2 and 6)....................... $ 9,793,000
Cash and cash equivalents............................. 757,000
Note receivable, Providence and Worcester
Railroad Company (Notes 3 and 6).................... 6,682,000
Other receivables (Note 4)............................ 252,000
Accrued rental income of $7,849,000 less amount for which
realization is not assured of $7,698,000 (Note 5)... 151,000
Prepaid and other..................................... 168,000
__________
$17,803,000
__________
__________
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Note payable, bank (Note 6)......................... $ 2,053,000
Accounts payable.................................... 47,000
Income taxes payable................................ 78,000
Accrued expenses:
Property taxes..................................... 352,000
Other.............................................. 171,000
Deferred income taxes (Note 7)...................... 1,535,000
__________
4,236,000
__________
Commitments (Note 8)
Shareholders' equity (Note 9):
Common stock, $1 par; authorized, issued
and outstanding 1,000,000 shares................... 1,000,000
Capital in excess of par............................ 10,828,000
Retained earnings................................... 1,739,000
__________
13,567,000
__________
$17,803,000
__________
__________
</TABLE>
See notes to consolidated financial statements.
-12-
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
YEARS ENDED DECEMBER 31, 1994 AND 1993
<TABLE>
<CAPTION>
1994 1993
_________ _________
<S> <C> <C>
Income:
Rentals (Note 5)......................... $1,533,000 $1,387,000
Garage and surface parking revenues...... 443,000 398,000
Interest:
Providence and Worcester Railroad
Company (Note 3)....................... 835,000 913,000
Other................................... 21,000 11,000
_________ _________
2,832,000 2,709,000
_________ _________
Expenses:
Expenses applicable to:
Rental income........................... 617,000 543,000
Garage and surface parking.............. 611,000 601,000
General and administrative............... 1,067,000 1,020,000
Interest................................. 198,000 226,000
_________ _________
2,493,000 2,390,000
_________ _________
Income before income taxes and cumulative effect
of change in accounting principle........ 339,000 319,000
_________ _________
Income tax expense (benefit) (Note 7):
Current.................................. 269,000 184,000
Deferred................................. (123,000) (95,000)
_________ _________
146,000 89,000
_________ _________
Income before cumulative effect of change in
accounting principle..................... 193,000 230,000
Cumulative effect of change in accounting
principle................................ 866,000
_________ _________
Net income (loss).......................... $ 193,000 $ (636,000)
_________ _________
_________ _________
Earnings (loss) per common share (Note 10):
Income before cumulative effect of change in
accounting principle.................... $ .19 $ .23
Cumulative effect of change in accounting
principle............................... (.86)
_____ _____
Net income (loss) per common share....... $ .19 $(.63)
_____ _____
_____ _____
</TABLE>
See notes to consolidated financial statements.
-13-
CAPITAL PROPERTIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1994 AND 1993
<TABLE>
<CAPTION>
Common Capital in Retained
stock excess of par earnings
__________ ___________ __________
<S> <C> <C> <C>
Balance, January 1, 1993.... $1,010,000 $10,894,000 $2,903,000
Net loss for the year....... (636,000)
Dividends on common stock,
$.32 per share............ (321,000)
Repurchase and retirement of
9,500 shares of common stock (10,000) (66,000)
__________ ___________ __________
Balance, December 31, 1993.. 1,000,000 10,828,000 1,946,000
Net income for the year..... 193,000
Dividends on common stock,
$.40 per share............ (400,000)
__________ ___________ __________
$1,000,000 $10,828,000 $1,739,000
__________ ___________ __________
__________ ___________ __________
</TABLE>
See notes to consolidated financial statements.
-14-
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1994 AND 1993
<TABLE>
<CAPTION>
1994 1993
_________ _________
<S> <C> <C>
Cash flows from operating activities:
Net income (loss)........................ $ 193,000 $ (636,000)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Cumulative effect of change in
accounting principle................... 866,000
Depreciation............................ 382,000 383,000
Accrued rental income................... 33,000 44,000
Deferred income taxes................... (123,000) (95,000)
Changes in assets and liabilities:
Increase in:
Other receivables..................... (58,000)
Prepaid and other..................... (29,000)
Income taxes payable.................. 1,000
Accrued expenses...................... 57,000
Decrease in:
Other receivables..................... 19,000
Prepaid and other..................... 20,000
Accounts payable...................... (20,000) (31,000)
Income taxes payable.................. (23,000)
Accrued expenses...................... (7,000)
_________ _________
Net cash provided by operating activities 436,000 540,000
_________ _________
Cash flows from investing activities:
Purchase of properties and equipment.... (24,000) (110,000)
Proceeds from collection of notes receivable:
Providence and Worcester Railroad Company 506,000 904,000
Other................................. 63,000
_________ _________
Net cash provided by investing activities 482,000 857,000
_________ _________
Cash flows from financing activities:
Payment of:
Notes payable, bank.................... (574,000) (850,000)
Dividends.............................. (400,000) (321,000)
Repurchase and retirement of common stock (76,000)
_________ _________
Cash used in financing activities....... (974,000) (1,247,000)
_________ _________
Increase (decrease) in cash and cash equivalents (56,000) 150,000
Cash and cash equivalents, beginning....... 813,000 663,000
_________ _________
Cash and cash equivalents, ending.......... $ 757,000 $ 813,000
_________ _________
_________ _________
Supplemental disclosures:
Cash paid for interest.................. $ 212,000 $222,000
_________ _________
_________ _________
Cash paid for income taxes.............. $ 268,000 $ 205,000
_________ _________
_________ _________
</TABLE>
See notes to consolidated financial statements.
-15-
CAPITAL PROPERTIES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1994 AND 1993
1. Basis of presentation and summary of significant
accounting policies:
Basis of presentation and principles of consolidation:
The accompanying consolidated financial statements
include the accounts of the Company and its wholly-owned
subsidiary, Tri-State Displays, Inc. (TSD). All
significant intercompany accounts and transactions
between the Company and TSD have been eliminated in
consolidation.
Description of business:
The Company operates in one business segment as a lessor
of properties and equipment and as an operator of
adjacent public parking facilities principally in the
Providence, Rhode Island area.
Cash and cash equivalents:
The Company considers all highly liquid investments with
a maturity of three months or less when purchased to be
cash equivalents.
Properties and equipment:
Properties and equipment are stated at cost. Effective
January 1, 1993, the cost of certain assets were
restated as a result of the implementation of Financial
Accounting Standards Board Statement No. 109 (FAS 109).
Depreciation is being provided by the straight-line
method over the estimated useful lives of the respective
assets.
Income taxes:
The Company and its subsidiary file a consolidated
Federal income tax return.
Income taxes are provided based on earnings reported for
financial statement purposes. The provision for income
taxes differs from the amounts currently payable because
of temporary differences in the recognition of certain
income and expense items for financial reporting and tax
reporting purposes.
Effective January 1, 1993, the Company adopted FAS l09
which changed the Company's method of accounting for
income taxes from the deferred method (Accounting
Principles Board Opinion No. 11) to an asset and
liability method. Previously the Company deferred the
past tax effects of timing differences between financial
reporting and taxable income. The asset and liability
method requires the recognition of deferred tax
liabilities and assets for the expected future tax
consequences of temporary differences between tax bases
and financial reporting bases of assets and liabilities.
The cumulative effect of this change is reported as a
charge to income in the 1993 statement of loss and
equalled $866,000 or $.86 per common share.
-16-
Rental income:
The Company's properties and equipment leased to others
are under operating leases. The Company reports rental
income when earned under the operating method.
Certain of the Company's land leases provide for
scheduled rent increases over their remaining terms (19
to 98 years). In accordance with the provisions of
Financial Accounting Standards Board Statement No. 13
(Accounting for Leases) and certain of its
interpretations, the Company is recognizing the rental
income on the straight-line basis over the terms of the
leases; however, the Company does not report as income
that portion of such straight-line rentals which
management cannot conclude is realizable (collectible)
due to the length of the lease terms and other related
uncertainties.
2. Properties and equipment:
Properties and equipment consist of the following:
<TABLE>
<S> <C>
Properties and equipment on lease or held for lease:
Land and land improvements.................. $ 6,130,000
Buildings and structures.................... 389,000
Equipment, petroleum storage tanks.......... 4,163,000
__________
10,682,000
__________
Other:
Land and land improvements.................. 192,000
Buildings, principally parking garage....... 2,536,000
Equipment................................... 99,000
__________
2,827,000
__________
13,509,000
__________
Less accumulated depreciation:
Properties and equipment on lease or held for lease
3,203,000
Other....................................... 513,000
__________
3,716,000
__________
$ 9,793,000
__________
__________
</TABLE>
3. Note receivable, Providence and Worcester Railroad
Company:
On January 1, 1988, in accordance with a plan of
distribution, the Company transferred the ownership of
Providence and Worcester Railroad Company (Railroad) to
the Company's shareholders. The Company and Railroad
have a common controlling shareholder. As part of the
plan, the Company received a promissory note in the
amount of $9,377,000 payable over a period of twenty
years with interest at 12% per year and present monthly
installments of $84,000. Railroad made voluntary
prepayments totalling $300,000 and $710,000 during 1994
and 1993 respectively. The term of the note is not
affected by prepayments. The Company presently intends
to hold the note to maturity.
-17-
CAPITAL PROPERTIES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1994 AND 1993
3. Note receivable, Providence and Worcester Railroad
Company (continued):
The note is secured by a first mortgage on a significant
portion of Railroad's operating right-of-way in
Massachusetts. Due to the active railroad use of the
collateral, the Company may not have immediate access
thereto in the event of non-payment by Railroad. In the
opinion of management, the collateral is of sufficient
value to satisfy the obligation.
The note has been pledged as collateral for the note
payable to a bank (see Note 6).
4. Other receivables:
<TABLE>
<S> <C>
Rentals, principally tenant property tax reimbursements $114,000
Interest, Providence and Worcester Railroad Company 67,000
Petroleum terminal tenant....................... 66,000
Other........................................... 5,000
________
$252,000
________
________
</TABLE>
5. Description of leasing arrangements:
At December 31, 1994, the Company has entered into land
leases for three separate land parcels with remaining
terms of up to 98 years. The Company also leases
petroleum storage facilities and various parcels of land
(leased principally for outdoor advertising and surface
parking) for remaining terms of up to 19 years.
For those leases with scheduled rent increases, the
cumulative excess of straight-line over contractual
rentals (considering scheduled rent increases over the
initial 20 to 102 year terms of the leases) amounted to
$7,849,000 through December 31, 1994. Commencing in
1992, management has been able to conclude that a
portion of the excess of straight-line over contractual
rentals ($151,000 through December 31, 1994) is
realizable when payable over the terms of the leases.
Effective October 1, 1991, the Company's petroleum
storage facilities were leased under a five-year lease
under which the tenant has the right to extend the lease
term for an additional five years. At any time during
the first five years of the lease, the tenant may
exercise an option to purchase the petroleum storage
facilities. The purchase price during the first year of
the lease was $4,500,000 and is increased by an
inflation factor in each of the remaining four years
($4,961,000 at December 31, 1994). The Company has not
been advised by the tenant as to whether it will extend
the term of the lease beyond September 1996 or whether
it will purchase the terminal. The tenant must advise
the Company by September 30, 1995 whether it intends to
extend the lease term for an additional five years.
-18-
Several leases provide that the tenants reimburse the
Company for property taxes ($297,000 and $289,000 in
1994 and 1993, respectively), which amounts are excluded
from rental income and expenses applicable to rental
income on the accompanying consolidated statements of
income (loss).
Minimum future contractual rental payments to be
received from non-cancellable leases as of December 31,
1994 are:
<TABLE>
<S> <C>
Year ending December 31,
1995............................ $ 1,259,000
1996............................ 1,199,000
1997............................ 1,047,000
1998............................ 1,108,000
1999............................ 1,151,000
2000 to 2091.................... 161,562,000
____________
$167,326,000
____________
____________
</TABLE>
Rental income from major tenants as a percentage of the
Company's total rental income is as follows:
<TABLE>
<CAPTION>
Tenant 1994 1993
_____ _____
<S> <C> <C>
A............................. 20.3% 21.8%
B............................. 17.7 17.0
C............................. 17.6 19.2
D............................. 15.8 11.1
E............................. 12.0 13.2
</TABLE>
In the event of tenant default, the Company has the
right to reclaim its leased assets together with any
improvements thereon.
In August 1994, a leak was discovered in a 25,000 barrel
storage tank at the petroleum terminal facilities which
allowed the escape of a small amount of fuel oil. The
tank was emptied, and all required notices were made to
the appropriate environmental agency. No soil
contamination has been detected as a result of this
leak, and monitoring wells have to date shown no
groundwater contamination. Accordingly, the Company's
engineering consultants have determined that no
additional remediation is necessary at this time. The
Company is of the opinion that the tenant of these
facilities is solely responsible for the payment of all
costs to repair the tank, including related professional
fees, and for remediation of any damage caused by such
leak. These costs are presently estimated at $66,000
and are included as a receivable from the tenant and a
liability on the accompanying consolidated balance
sheet. The tenant does not agree that it is responsible
for the payment of such costs. The lease provides for
arbitration in the event the parties cannot reach
agreement on the matter.
-19-
CAPITAL PROPERTIES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1994 AND 1993
6. Note payable, bank:
In 1990, the Company refinanced a note of $2,500,000 by
making a principal payment of $50,000 and by issuing a
new note in the amount of $2,450,000 with interest at
1% over prime due July 1993. This note was extended to
December 1994 and was further extended to December 1999
and provides for monthly installments of principal and
interest of approximately $27,000 with a final payment
of $1,281,000. The note is secured by the Company's
parking garage and the note receivable from Railroad
(see Note 3).
In connection with the purchase of a parcel of land in
1990, the Company increased the principal amount of a
note previously given to the bank from $800,000 to
$l,425,000, with interest at 1% over prime payable
monthly until October 1990, and thereafter with monthly
installments of principal in the amount of $8,000 plus
interest. The note was further extended to December
1994. During 1993 the Company made prepayments on its
note to the bank totalling $650,000. In 1994, the
Company prepaid the remaining balance.
7. Income taxes:
A reconciliation of the income tax provision as computed
by applying the United States income tax rate (34%) to
income before income taxes is as follows:
<TABLE>
<CAPTION>
1994 1993
________ ________
<S> <C> <C>
Computed "expected" tax expense.......... $115,000 $108,000
Increase (decrease) in taxes resulting from:
State income tax net of Federal income
tax benefit............................ 38,000 18,000
Statutory and other..................... (7,000) (13,000)
Alternative minimum tax credit.......... (24,000)
________ ________
$146,000 $ 89,000
________ ________
________ ________
</TABLE>
Deferred income taxes are recorded based upon
differences between the financial statement and tax
basis of assets and liabilities and available tax credit
carryforwards. The tax effect of temporary differences
which give rise to deferred tax assets and liabilities
at December 31, 1994, were as follows:
<TABLE>
<S> <C>
Gross deferred tax liabilities:
Property having a financial statement basis in
excess of its tax basis...................... $1,589,000
Excess of straight line over contractual rental income 58,000
__________
1,647,000
Gross deferred tax assets, principally professional fees (112,000)
__________
$1,535,000
__________
__________
</TABLE>
-20-
8. Commitments:
Under an agreement with the State of Rhode Island entered
into in 1990, the Company will owe the State $158,000
sixty days after the completion by the State of a
construction contract for certain public improvements
affecting one of the Company's parcels. The Company
anticipates that such payment will not be due until the
third quarter of 1995 at the earliest and will be
reimbursable by the developer of such parcel.
Accordingly, the Company has not provided for such
obligation on the accompanying consolidated financial
statements. The agreement is secured by a mortgage on ne
of the Company's parcels. The agreement further provides
that, should the amount not be paid when it is due,
interest will accrue from the due date at the rate of
prime plus 1%.
The Company leases certain properties and equipment under
noncancellable leases which expire at various dates to
1999. In most cases, management expects that in the
normal course of business, leases that expire will be
renewed or replaced by other leases. Rent expense
amounted to $111,000 and $96,000 in 1994 and 1993
respectively. Future minimum lease payments under
noncancellable leases at December 31, 1994 are as
follows: 1995, $117,000; 1996, $107,000; 1997, $99,000;
1998, $55,000; and 1999, $28,000.
9. Repurchase of common stock and reduction of authorized shares:
Since 1988, the Company repurchased and subsequently
retired 34,968 shares of its outstanding common stock,
9,500 shares of which were purchased in 1993 on the open
market at $8 per share. The excess of the purchase price
over the par value was charged to capital in excess of
par on the accompanying consolidated statements of
shareholders' equity.
In June 1993, the Company's articles of incorporation
were amended to reduce the number of common shares
authorized from 1,400,000 to 1,000,000. The Company does
not presently plan to purchase any additional shares of
its own stock.
10. Income (loss) per common share:
The income per common share for the year ended December
31, 1994 was calculated by dividing the net income by the
number of shares outstanding (1,000,000 shares). The
loss per common share for the year ended December 31,
1993 was calculated by dividing the net loss by the
weighted average of shares outstanding for the period
(1,003,958 shares).
11. Transactions with related parties:
A trust for the benefit of the controlling shareholder is
the holder of rights with respect to the use of a pier,
two petroleum pipelines and a barge dock located in East
Providence, Rhode Island. Since February 1983, the
Company and the tenant of its petroleum storage
-21-
CAPITAL PROPERTIES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1994 AND 1993
11. Transactions with related parties (continued):
facilities have had the right to utilize the facilities
for the transportation of petroleum products, in
consideration for which the Company and the tenant are
obligated to pay the trust a fee based upon the number
of barrels of product transported through the pipelines
or over the barge dock. The fee is subject to
adjustment as of October 1 of each year to reflect
changes in the Consumer Price Index.
Under the terms of the 1991 lease of the Company's
petroleum storage facilities in East Providence, Rhode
Island (see Note 5), the tenant pays a significant
portion of the amount due to the trust for the usage of
the pipeline. The Company's share of of the pipeline
usage fee amounted to $24,000 and $16,000 for the years
1994 and 1993, respectively, which amounts are included
in expenses applicable to rental income in the
accompanying consolidated statements of income (loss).
12. Pending litigation:
In connection with the River Relocation Project, the
State of Rhode Island condemned a portion of the
Company's property and paid an award of $2,600,000 in
1987. As part of an agreement to purchase another
parcel of land from the State, the Company was required
to return to the State a portion of the condemnation
award ($1,600,000).
In April 1988, the Company filed a petition in the Rhode
Island Superior Court for an increased condemnation
award alleging that the award paid to date was
inadequate. In January 1992, the Superior Court awarded
the Company an additional condemnation award of $401,000
plus interest at 12% per annum from the date of the
condemnation. The Company had asserted in the Superior
Court that it was entitled to an additional condemnation
award in excess of $6,000,000 plus interest, and
accordingly, in February 1992, the Company appealed the
decision of the Superior Court to the Rhode Island
Supreme Court. In an Opinion issued in January 1994,
the Supreme Court overturned the Superior Court decision
and returned the matter to the Superior Court for a
retrial of the case. It is expected that the case will
be retried in the second quarter of 1995. The Company
cannot now determine what amount, if any, will be
awarded beyond that already paid at the time of
condemnation. Under the aforementioned agreement, the
Company may be required to return to the State a portion
of the final award as and when finally determined.
-22-
DIRECTORS AND OFFICERS
OF CAPITAL PROPERTIES, INC.
<TABLE>
<S> <C>
Joseph R. DiStefano, Director and President of Capital
President Properties, Inc.
Linda Eder, Vice President Vice President of
Capital
Properties, Inc.
Barbara J. Dreyer, Director and Secretary-Treasurer of
Secretary-Treasurer Capital Properties,
Inc.
Theodore P. Cohen, Director Attorney-at-law
New York, New York
John W. Wall, Director Consultant
Providence, Rhode
Island
Henry S. Woodbridge, Jr., Director Consultant
Pomfret, Connecticut
TRANSFER AGENT INDEPENDENT AUDITORS
Fleet National Bank Lefkowitz, Garfinkel,
Stock Transfer Department Champi & DeRienzo P.
C.
Post Office Box 366 One Hospital Trust
Plaza
Providence Providence
Rhode Island 02901 Rhode Island 02903
</TABLE>
-23-
MARKET FOR THE COMPANY'S COMMON STOCK
AND
RELATED SECURITY HOLDER MATTERS
The Company's common stock is traded on the Boston Stock
Exchange, symbol "CPI." The following table shows the high
and low trading prices for the Company's common stock during
the quarterly periods indicated, as obtained from the Boston
Stock Exchange, together with dividends paid per share
during such periods.
<TABLE>
<CAPTION>
Trading Prices Dividends
____________ ________
High Low Paid
____ ____ ____
<S> <C> <C> <C>
1994
1st Quarter............... 8 7/8 7 1/4 -0-
2nd Quarter............... 7 7/8 7 1/4 .10
3rd Quarter............... 8 1/2 7 7/8 -0-
4th Quarter............... 8 5/8 6 .30
1993
1st Quarter............... 8 1/2 7 -0-
2nd Quarter............... 9 3/4 7 1/2 .10
3rd Quarter............... 8 1/2 7 3/4 -0-
4th Quarter............... 8 3/4 7 .22
</TABLE>
At March 1, 1995 there were 514 holders of record of the
Company's common stock.
-24-
EXHIBIT 21
CAPITAL PROPERTIES, INC. AND SUBSIDIARY
SUBSIDIARY OF THE ISSUER
(AS OF MARCH 1, 1995)
Subsidiary State of Incorporation
Tri-State Displays, Inc. Rhode Island
IV-6
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM SEC FORM
10KSB AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 757,000
<SECURITIES> 0
<RECEIVABLES> 6,934,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 13,509,000
<DEPRECIATION> 3,716,000
<TOTAL-ASSETS> 17,803,000
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 1,000,000
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 17,803,000
<SALES> 0
<TOTAL-REVENUES> 2,832,000
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,295,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 198,000
<INCOME-PRETAX> 339,000
<INCOME-TAX> 146,000
<INCOME-CONTINUING> 193,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 193,000
<EPS-PRIMARY> .19
<EPS-DILUTED> 0
</TABLE>
