UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(Mark One)
[x] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 [Fee Required]
For the fiscal year ended December 31, 1995
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[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 [Fee Required]
For the transition period from to
Commission file Number 33-31778
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Historic Preservation Properties 1990 L.P. Tax Credit Fund
(Exact name of registrant as specified in its charter)
Delaware 04-3066191
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Batterymarch Park II, Quincy, MA 02169
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(Address of principal executive offices)
Registrant's telephone number, including area code 617-472-1000
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Previous Address: One Liberty Square, Third Floor, Boston, MA 02109
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Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on
which registered
None
Securities registered pursuant to Section 12(g) of the act:
None
(Title of class)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
[x] Yes [ ] No
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K (229.405 of this chapter) is not contained
herein, and will not contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by reference in
Part III of this Form 10-K or any amendment to this Form 10-K.
HISTORIC PRESERVATION PROPERTIES 1990 L.P. TAX CREDIT FUND
1995 FORM 10-K/A ANNUAL REPORT
TABLE OF CONTENTS
Sequential
Page No. Page No.
PART I
Item 1 Business K-3 4
Item 2 Properties K-9 10
Item 3 Legal Proceedings K-9 10
Item 4 Submission of Matters
to a Vote of Unit Holders K-9 10
PART II
Item 5 Market for Registrant's
Units and Related Unit
Holder Matters K-10 11
Item 6 Selected Financial Data K-11 12
Item 7 Management's Discussion and
Analysis of Financial
Condition and Results of
Operations K-12 13
Item 8 Financial Statements and
Supplementary Data K-15 16
Item 9 Changes in and Disagreements
with Accountants on Accounting
and Financial Disclosure K-15 16
PART III
Item 10 Directors and Executive
Officers of the Registrant K-16 17
Item 11 Executive Compensation K-17 18
Item 12 Unit Ownership of Certain
Beneficial Owners and
Management K-17 18
Item 13 Certain Relationships and
Related Transactions K-18 19
PART IV
Item 14 Exhibits, Financial Statement
Schedules and Reports on
Form 8-K K-19 20
SIGNATURES K-26 27
SUPPLEMENTAL INFORMATION K-27 28
K-2
DOCUMENTS INCORPORATED BY REFERENCE
Part of the Form 10-K Document
into which Incorporated Incorporated by Reference
- ----------------------- -------------------------
I Prospectus of the Registrant
dated March 30, 1990 (the
"Prospectus").
Supplement No. 1 to the
Prospectus dated August 1,
1990.
Supplement No. 2 to the
Prospectus dated December 3,
1990.
III The Prospectus.
K-1
PART I
Item 1. Business.
Historic Preservation Properties 1990 L.P. Tax Credit Fund (the
Partnership), a Delaware limited partnership, was organized under the
Delaware Revised Uniform Limited Partnership Act on October 4, 1989 for the
purpose of investing in a portfolio of real properties which qualify for
rehabilitation tax credits (Rehabilitation Tax Credits) afforded by Section
47 of the Internal Revenue Code of 1986, as amended (the Code), and
rehabilitating such properties (or acquiring such properties in the process
of rehabilitation and completing such rehabilitation) in a manner intended
to render the cost of such rehabilitation eligible for classification as
"Qualified Rehabilitation Expenditures", as such term is defined in the
Code, and thus eligible for Rehabilitation Tax Credits. The Partnership
was initially capitalized with contributions of $100 from its general
partner and $100 from each of three initial limited partners. On October
26, 1989, the Partnership filed a Registration Statement on Form S-11, File
Number 33-31778 (the Registration Statement), with the Securities and
Exchange Commission (the Commission) with respect to the public offering of
units of limited partnership interest (Units) in the Partnership. The
Registration Statement, covering the offering of up to 50,000 Units at a
purchase price of $1,000 per Unit (an aggregate of $50,000,000), was
declared effective on March 30, 1990. The offering of Units terminated on
December 31, 1990, at which time the Partnership had received gross
offering proceeds of $16,361,000 from 1,391 investors.
The general partner of the Partnership (the General Partner) is
Boston Historic Partners II Limited Partnership, a Massachusetts limited
partnership. The general partner of the General Partner is BHP II Advisors
Limited Partnership (BHP II Advisors). The general partners of BHP II
Advisors are Terrence P. Sullivan and Portfolio Advisory Services II, Inc.
(PAS II) a corporation whose controlling shareholder, director and
president is Mr. Sullivan (Sullivan).
The Partnership does not have any employees. Through September
30, 1995, accounting, asset management and investor services were performed
by Portfolio Advisory Services, Inc. (PAS), a Massachusetts corporation
whose sole shareholder is Sullivan. PAS is related to BHP II through
certain common ownership and management and whose sole shareholder is
Sullivan. The original contract was for one year, commencing July 1, 1993,
and was extended through September 30, 1995. PAS received no fee for these
services but was reimbursed by the Partnership for all operating expenses
of providing such services.
Effective October 1, 1995, the Partnership engaged Claremont
Management Corporation, an unaffiliated Massachusetts Corporation to
perform accounting, asset management and investor services for an annual
fee of $38,400 and reimbursement of all operating expenses of providing
such services. The contract expires June 30, 1997 and is automatically
renewed on a yearly basis unless otherwise terminated as provided for in
the agreement.
K-3
The Partnership's only business is investing in real properties
which are expected to qualify for Rehabilitation Tax Credits. A
presentation of information about industry segments is not applicable and
would not be helpful in understanding the Partnership's business taken as a
whole. The Partnership's investment objectives and policies are described
in pages 28-36 of its prospectus dated March 30, 1990 (the Prospectus)
under the caption "Investment Objectives and Policies," which description
is incorporated herein by this reference. The Prospectus was filed with
the Commission pursuant to Rule 424(b) on April 6, 1990.
During 1990, the Partnership acquired interests in the following
real estate, collectively referred to as the "Ventures". The Partnership's
purchases of the Ventures were made on substantially the same terms
described in Supplement No. 1 to the Prospectus dated August 1, 1990
(Supplement No. 1) and Supplement No. 2 to the Prospectus dated December 3,
1990 (Supplement No. 2). Both Supplement No. 1 and Supplement No. 2 are
incorporated herein by this reference. Supplement No. 1 and Supplement No.
2 were filed pursuant to Rule 424(b) on August 14, 1990 and December 4,
1990, respectively. As of December 31, 1995, 100% of the limited partners'
capital contributions (net of selling commission, organizational and sales
costs, acquisition fees and reserves) had been invested in real property
investments:
Henderson's Wharf Baltimore, L.P. (the Building Venture) is a
Delaware limited partnership formed on July 20, 1990 to acquire a fee
interest in a seven-story building on 1.5 acres of land located at 1000
Fell Street, Baltimore, Maryland and to rehabilitate the building into
residential units, 149 indoor parking spaces and a 38 room inn. The
building contains 137 residential units as of December 31, 1995, 125 of
which were currently owned by the Building Venture and 12 of which were
owned by unrelated parties.
In 1994, the Building Venture entered into contracts to purchase
three condominium units and parking spaces (the Property) owned by
unrelated parties. The purchase price of the Property is the greater of
the seller's outstanding mortgage balance as of the date of purchase or the
fair market value of the property as defined in the contracts. The Building
Venture has possession of the property, bears the risk of loss and damage
to the Property, receives all of the rents and other income generated by
the Property and is responsible for payment of all related costs which
include but are not limited to debt service, taxes and condominium fees.
On February 27, 1996, the Building Venture purchased the three units for
approximately $314,800.
The building has been renovated and certain of the related
renovation costs have qualified for Rehabilitation Tax Credits. The
Building Venture purchased the building for $6,812,500 which included
seller financing of $6,350,000. The Building Venture and the seller
entered into an agreement (Agreement) whereby the seller extended the
original December 31, 1990 maturity date on this note to December 31, 1992
in exchange for the payment of $1,000,000 of this note in December 1990.
On December 7, 1992 the Building Venture entered into an agreement with the
seller to extend the maturity date on the note until January 2, 1994. In
consideration for the extension, the Building Venture was obligated to pay
$150,000 on the earlier of January 2, 1994 or the date of any optional
prepayment of the note in full. In April 1994, the seller extended the
K-4
maturity date of the note to December 31, 1995 and added the $150,000
extension fee to the outstanding principal balance of the note along with
unpaid interest totaling $89,168 on the note, for the period March 16,
1994 through May 15, 1994 and unpaid interest on the extension fee totaling
$1,250 for the period April 16, 1994 through May 15, 1994. Interest through
the date of refinancing (February 27, 1996) was due monthly on the new
principal balance of the note at the annual rate of 10%. In addition, the
seller required the Building Venture to establish a real estate tax escrow
account (Tax Escrow) which was funded on a monthly basis through the date
of refinancing (February 27, 1996). The balance of the Tax Escrow at
December 31, 1995 was approximately $49,000.
On February 27, 1996, HPP 1990 obtained a $6,000,000 deed of
trust note with a third party lender which provided funds for the Building
Venture to refinance the outstanding balance of the seller financed
purchase money note totaling $5,590,418, to pay $109,582 to the seller in
release of the contingent purchase price promissory note, and to purchase
in part three condominium units and parking spaces owned by unrelated
parties for an aggregate purchase price of $314,800. The deed of trust
note bears interest at 7.85% and requires monthly principal and interest
payments in the amount of $49,628 commencing in April 1996. The deed of
trust note amortizes over a 20 year schedule and all remaining unpaid
principal and interest is due in March 2006. Under the deed of trust note,
the lender has the option with six months written notice to call amounts
outstanding under the deed of trust note at the end of ten years or anytime
thereafter. The deed of trust note is secured by the Building Venture's
property, rents and assignment of leases and is guaranteed by the Building
Venture. This transaction will release approximately $1,000,000 of
suspended rehabilitation tax credits to the Partnership from the Building
Venture in 1996.
The Building Venture was placed in service in December 1990 and
commenced lease-up in January 1991 and currently is fully operational. As
of December 31, 1995, approximately 93% of the apartment units have been
leased. The inn was opened in May 1991 and is also fully operational. The
average occupancy for the inn in 1995 and 1994 was 74% and 65%,
respectively. No Rehabilitation Tax Credits have been allocated to the
Partnership in 1995, 1994 and 1993 from the Building Venture.
The Partnership may invest in other real estate ventures as set
forth on pages 28-36 of the Prospectus (which pages are hereby incorporated
by this reference) upon the remaining lease-up and refinancing of this
property.
Henderson's Wharf Marina, L.P. (the Marina Venture) is a Delaware
limited partnership formed on July 20, 1990 to acquire a 1.92 acre parcel
of land together with a 256-slip marina which is adjacent to the Building
Venture's property. The Marina Venture owns the fee interest in the
property. The Marina Venture purchased the property for $1,266,363 which
included seller financing of $1,187,500.
Under the Second Amended and Restated Agreement of Limited
Partnership of Henderson's Wharf Baltimore, L.P. dated February 1, 1991,
Henderson's Wharf Development Corporation (HWDC), a Delaware corporation
that is wholly owned by the Partnership, was admitted as a general partner
of the Building Venture (the Partnership and HWDC are collectively referred
to as "Henderson's General Partners"). Hillcrest Management, Inc. (HMI), a
K-5
Massachusetts corporation, was admitted as the limited partner of the
Building Venture. Generally, allocations of net profits and losses, as
well as cash flow, are to be allocated 99%, .9% and .1% to the Partnership,
HWDC and HMI, respectively. The overall management and control of the
business and affairs of the Building Venture are solely vested in
Henderson's General Partners.
The Second Amended and Restated Agreement of Limited Partnership
of Henderson's Wharf Marina, L.P. dated February 1, 1991 provided ownership
and management identical to that of the Building Venture described in the
preceding paragraph. On August 1, 1991, Amendment No. 1 to the Second
Amended and Restated Agreement of Limited Partnership was executed. HWDC
became the sole general partner of the Marina Venture and HMI and the
Partnership became limited partners. Generally, allocations of net profits
and losses, as well as cash flow under this agreement, were allocated
98.9%, 1% and .1% to the Partnership, HWDC and HMI, respectively. The
overall management and control of the business and affairs of the Marina
Venture is solely vested with the general partner of the Marina Venture.
On February 1, 1991, the Building Venture entered into a long
term property management and brokerage agreement (Management Agreement), an
inn lease (Inn Lease) and a consulting agreement (Consulting Agreement)
with HMI. The Management Agreement expired on December 31, 1991 and was
originally extended until December 31, 1993, and subsequently terminated as
of July 31, 1993, and required the payment of management fees to HMI equal
to 6% of gross rental receipts, as defined in the agreement. The
Management Agreement also required the payment of a one time lease-up fee
during the lease-up phase equal to one month's rent. Management and lease-
up fees paid to HMI totaled $82,766 for the period January 1 through July
31, 1993. The Inn Lease originally expired on December 31, 1995 and was
also terminated as of July 31, 1993 and required the payment to HMI of 50%
of the operating profit, as defined in the agreement, relating to the 38
room inn. If total management fees earned based on the inn's gross rental
receipts were less than $75,000 for any one year, then the Inn Lease
required payments to HMI equal to the difference between actual management
fees paid and $75,000. No amounts were paid under the Inn Lease during
1993.
The Consulting Agreement which expired on December 31, 1991
required the Building Venture to pay HMI a $15,000 refinancing fee upon the
closing of any refinancing of the existing Building Venture's financing.
The Consulting Agreement also required the Building Venture to pay HMI an
incentive fee equal to 1% of the gross sales proceeds resulting from the
sale of the building property to an unaffiliated third party buyer. These
commitments survive the December 31, 1991 expiration date of the Consulting
Agreement and the termination of all other agreements with HMI (see below).
The Building Venture paid the $15,000 refinancing fee to HMI in March 1996 as a
result of refinancing its purchase money note on February 27, 1996, as
mentioned above.
On January 1, 1992, the Marina Venture entered into a long term
property management agreement with HMI. This agreement provided for
payment of management fees to HMI equal to 9% of gross operating revenues,
as defined in the agreement. In addition, the property management
agreement required the Marina Venture to pay HMI an incentive management
fee equal to 6% of the gross sales proceeds and an incentive brokerage fee
K-6
equal to 3% of gross sales proceeds. The incentive management and brokerage
fees were required to be paid to the extent that the partners of the Marina
Venture have received a return of their capital contributions, as defined
in the Third Amended and Restated Agreement of Limited Partnership.
Management fees paid to HMI for the period January 1, 1993 through July 31,
1993 totaled $2,494.
On January 1, 1992, the Partnership (herein referred to as HPP
1990) hired Hillcrest Asset Management, Inc. (Hillcrest), a company related
to HMI through common ownership, to assist the general partner in providing
accounting, asset management and investor services. Hillcrest provided
such services for a management fee of $12,000 annually plus reimbursement
of all its costs of providing such services. This contract expired on June
30, 1993 and was not renewed. For the period January 1, 1993 to June 30,
1993 management fees paid to HMI totaled $6,000, and expense reimbursements
paid to HMI totaled $54,469.
After evaluating the marina property over the initial years
following acquisition, the Marina Venture had determined that it was in its
best interest to either renegotiate the debt or restructure the Marina
Venture before proceeding with the development of the marina. As such, the
Marina Venture did not pay the interest due on the mortgage for 1992 and
1991. Accordingly, the mortgage was in default and the seller, at its
option could have demanded immediate payment of the note.
Based on the fair market value of marina land and improvements
determined by independent appraisal and the priority distribution of
proceeds from capital transactions as provided for in the Marina Venture's
Third Amended and Restated Agreement of Limited Partnership, the
Partnership had reserved $845,672 against its investment in the marina land
and improvements at December 31, 1992. On December 31, 1992, the seller
(HWFP, Inc.) agreed to reduce the original principal amount of the purchase
money note from $1,187,500 to $350,000 and forgave $237,500 of accrued
interest. Also on December 31, 1992, the Third Amended and Restated
Agreement of Limited Partnership of Henderson's Wharf Marina L.P. was
executed. HWFP, Inc., a Maryland corporation, received a 50% limited
partnership interest in the Marina Venture. Concurrently, HMI withdrew as
a limited partner in the Marina Venture, HPP 1990's limited partnership
interest in the Marina Venture was reduced to 49% and HWDC retained a 1%
general partnership interest in the Marina Venture. The minority interest
was initially recorded at fair market value based on an independent
appraisal and priority distribution of proceeds from capital transactions
as provided for in the Marina Venture's Third Amended and Restated
Agreement of Limited Partnership.
On February 27, 1996, HPP 1990, HWPC and HWPF, Inc. executed the
First Amendment to the Third Amended and Restated Agreement of Limited
Partnership of Henderson's Wharf Marina L.P. HWFP redeemed its 50% limited
partnership interest in the Marina Venture in return for a $225,000 first
mortgage secured by the marina property. The note bears interest at 7.50%,
matures in March 2006, and requires monthly principal and interest payments
in the amount of $2,086. As a result, HPP 1990's limited partnership
interest in the Marina Venture increased to 98%, while HWDC's ownership in
the Marina Venture increased to a 1% limited partnership interest and a 1%
general partnership interest.
K-7
On July 1, 1993, HPP 90 engaged Portfolio Advisory Services, Inc.,
a Massachusetts corporation, which is related to BHP II through certain
common ownership and management, and in which Terrence P. Sullivan is the
sole shareholder, for a twelve month period, to assist the general partner
in providing accounting, asset management and investor services. The
original contract was for one year and was extended through September 1995.
PAS receives no fee for its services, however it was reimbursed for all
operating costs of providing these services. Expense reimbursement to PAS
for the period January 1, 1995 through September 30, 1995, the year ended
December 31, 1994, and the period July 1, 1993 through December 31, 1993,
totaled $65,903, $46,063, and $24,964, respectively.
Effective July 31, 1993, the Ventures terminated their respective
Management Agreement and Inn Lease (Contracts) with HMI. As of December
31, 1993, HPP 1990 had not reached an agreement with HMI as to whether any
additional payments were due under the Contracts as a result of the
termination. Consequently, HPP 1990 was unable to reasonably estimate
amounts due to HMI, if any, and no liability was recorded as of December
31, 1993. During October 1994, HPP 1990 and HMI agreed in principle to an
agreement whereby the parties would settle their differences to put rest to
all further controversy and to avoid substantial expense of burdensome and
protracted litigation. In January 1995, HPP 1990 entered into an agreement
on behalf of the Ventures to pay HMI contract termination settlement
payments (Settlement Payments) totaling $271,108 which was included in
accrued expenses as of December 31, 1994. The Settlement Payments required
an initial payment of $36,000 due on January 27, 1995 and requires monthly
payments of $3,221 commencing September 1995 through the earlier of
September 2001 or the occurrence of certain events as defined in the
agreement. The Settlement Payments are secured by 100% of HPP 1990's
economic interest as a partner, as defined in the agreements, in the
Ventures; net sales and refinancing proceeds; cash flow; return of capital
contributions; all of HPP 1990's cash and marketable equity securities in
excess of $150,000; and all of the Venture's cash in excess of the greater
of $200,000 or reserves required by lenders. No distributions to the
partners of HPP 1990 are permitted until all Settlement Payments are paid
in full. As of December 31, 1995, unpaid settlement payments included in
accrued expenses and other liabilities totaled $222,224.
On August 23, 1993 the Ventures engaged McKenna Management
Associates, Inc. (McKenna) as the independent onsite property management
company. The management agreement with McKenna originally expired in
August 1995 and was extended until October 31, 1995. The agreement
required the payment of $9,000 per month for the first year and $7,650 per
month for the second year (and additional months) for the total complex.
On November 1, 1995, the Building and Marina Venture entered into
property management contracts with Claremont Management Corporation (CMC),
an unaffiliated Massachusetts corporation, to manage the apartments, inn
and marina operations. The property management contracts with the
apartments and inn provide for payment of management fees to CMC equal to
4% and 4.5% respectively, of gross receipts, as defined. The marina
property management agreement with CMC provides for payment of management
fees equal to 9% of gross receipts, as defined. The agreements expire on
June 30, 1997, and are automatically extended on a year to year basis
unless otherwise terminated as provided for in the agreements. A condition
K-8
of the agreements requires the Ventures to maintain with CMC, for the
benefit of the Ventures, operating cash and contingency reservesof $190,000
and $70,000, respectively. To facilitate the transition of property
management and through an arrangement with CMC, McKenna continued to
provide management services to the apartments, inn and marina operations
through December 31, 1995. Management fees paid to CMC and McKenna by the
Ventures totaled $94,841, $102,600, and $38,334, for the years ended 1995,
1994 and 1993, respectively.
Item 2. Properties.
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See Item 1 above.
Item 3. Legal Proceedings.
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The Partnership is not a party to, nor, to the best knowledge of
the General Partner, are any of the Ventures or real properties owned by
the Ventures subject to, any material pending legal proceedings.
Item 4. Submission of Matters to a Vote of Unit Holders.
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No matters were submitted to a vote of Unit holders.
K-9
PART II
Item 5. Market For Registrant's Units and Related Unit Holder Matters.
- ------- --------------------------------------------------------------
(a) There is no active market for the Units and no such
market is expected to develop. Trading in the Units is
sporadic and occurs solely through private transactions.
(b) As of March 15, 1996, there were 1,392 holders of
Units.
The Amended and Restated Agreement of Limited Partnership
(Partnership Agreement) requires that any Cash Flow (as defined therein) be
distributed quarterly to the investor limited partners (Limited Partners)
in specified proportions and priorities and that Sale or Refinancing
Proceeds (as defined therein) be distributed as and when available. As
discussed in Item 1, there are some restrictions on the Partnership's
present and future ability to make distributions of Cash Flow or Sale or
Refinancing Proceeds. For the periods ended December 31, 1994, 1993 and
1992, no distributions of Cash Flow or Sale or Refinancing Proceeds were
paid or accrued to the Limited Partners.
K-10
Item 6. Selected Financial Data.
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<TABLE>
<CAPTION>
Periods Ended December 31,
1995 1994 1993 1992 1991
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenues $ 2,769,347 $ 2,501,562 $ 2,220,822 $ 2,256,736 $ 1,106,631
Net Loss before extraordinary
gain $ (359,021) $ (667,504) $ (917,379) $(2,009,440) $(2,165,604)
Extraordinary Gain $ 0 $ 0 $ 0 $ 1,075,000 $ 0
Net Loss $ (359,021) $ (667,504) $ (917,379) $( 934,440) $(2,165,604)
Net Loss per units of Investor
Limited Partnership Interest
based on Unit outstanding:
Loss before extraordinary gain $ (21.72) $ (40.39) $ (55.51) $ (121.59) $ (131.04)
Extraordinary gain $ 0 $ 0 $ 0 $ 65.05 $ 0
Net Loss $ (21.72) $ (40.39) $ (55.51) $ (56.54) $ (131.04)
Total Assets as of December 31, $15,483,025 $ 15,849,184 $16,276,877 $16,997,456 $18,843,454
Long Term Debt as of December 31, $ 5,590,418 $ 5,590,418 $ 5,350,000 $ 5,530,000 $ 6,537,500
Cash Distributions per weighted
average Unit outstanding $ 0 $ 0 $ 0 $ 0 $ 0
Rehabilitation Tax Credit per Unit $ 0 $ 0 $ 0 $ 0 $ 26.60
</TABLE>
See Item 7 for a discussion of the factors that may materially affect the
foregoing information in future years.
K-11
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Liquidity and Capital Resources. The Partnership terminated its
offering of Units on December 31, 1990, at which time Limited Partners had
purchased 16,361 Units, representing gross capital contributions of
$16,361,000. As of December 31, 1995, the Partnership had invested an
aggregate of $12,461,719 in the Building and Marina Ventures. The
rehabilitation of the Building Venture is intended to qualify for
Rehabilitation Tax Credits.
Such amount contributed in the Building and Marina Ventures
represents approximately 100% of the Limited Partners' capital contribution
after deducting selling commissions, organizational and sales costs,
acquisition fees and reserves. The Partnership does not anticipate making
any additional investments in new real estate.
As of December 31, 1995, the Ventures and HPP 1990 had
unrestricted cash of $196,606 and $186,747, respectively. HPP 1990's cash
is used primarily to fund general and administrative expenses of running
the public fund. The Venturers' cash is used to fund operating expenses of
the properties. In addition, to the extent available, the Building Venture
distributes cash to HPP 1990 to help fund general and administrative
expenses of running the public fund. As mentioned in Item 1, on February
27, 1996, the Building Venture obtained mortgage financing of $6,000,000 at
7.85% which requires principal and interest monthly payments of $49,628 for
ten years based on a 20 year amortization and matures in March 2006. The
short term liquidity of the Building Venture depends upon its ability to
pay its debt service, real estate taxes, operating expenses and have
sufficient cash to distribute to HPP 1990. The short term liquidity of the
Building Venture depends on its ability to generate sufficient rental
income to fund operating expenses and debt service requirements and have
sufficient cash to distribute to HPP 1990.
Settlement Payments due HMI, that were negotiated as part of the
contract termination (See Item 1), are secured by 100% of HPP 1990's
economic interest as a partner, as defined in the agreements, in the
Ventures; net sales and refinancing proceeds; cash flow; return of capital
contributions; all of HPP 1990's cash and marketable equity securities in
excess of $150,000; and all of the Ventures' cash in excess of the greater
of $200,000 or reserves required by potential lenders.
Cash flow generated from the Partnership's present investment
properties and the Partnership's share of the proceeds from the sale of
such properties is expected to be the source of future long-term liquidity.
Results of Operations. The Partnership incurred total losses
under generally accepted accounting principles of $359,021 in 1995 which
includes depreciation and amortization of $568,217. The Partnership was
not allocated any Rehabilitation Tax Credits from the Building Venture in
1995.
In 1995, the Building Venture was fully operational during the
entire year, and the Marina Venture had available approximately 240 slips
for use, of which a minimal number of slips were fully operational offering
various utility hook-ups. The results of the Partnership's operations in
K-12
future years should be comparable to 1995 numbers provided the Ventures are
able to maintain greater than 90% occupancy in the Apartments and greater
than 60% in the Inn. Expense levels should increase with the rate of
inflation but, it is anticipated that the monthly rents and the average
daily room rate revenues should increase accordingly.
In recent years, the occupancy of the apartments has increased
from previous years as a result of management's decision to enter into
more traditional long term, annual, leases. The Apartments have achieved
stabilized occupancy in 1995 and 1994 with occupancy rates of 94% and 93%,
respectively. In addition, a market study of the competition was
prepared, and the Building Ventures' monthly rental rates were adjusted to
reflect market rates for a property located in the Fells Point, Baltimore
neighborhood. Management is projecting economic occupancy for the
Apartments to be approximately 93% for calendar year 1996 which will be
indicative of the expected levels for future years.
The average occupancy of the Inn increased from 47% in 1993 to
64% in 1994 to 74% in 1995. Also, the average daily rate from room rentals
increased approximately 4% in 1994 and approximately 7% in 1995, respectively,
from previous years. The Building Venture made a decision in the
third quarter of 1993 to hire a full time hospitality manager to generate
new business from previously untapped markets. The increase in occupancy
of the Inn for 1995 was due in part to a major competitor temporarily
discontinuing operations for major renovations. That major competitor
reopened in early 1996. In addition, the hospitality market nationwide
experienced an increase from previous years. Management is projecting Inn
occupancy of 67% for calendar year 1996 and Inn occupancy in future years
is expected to stay at the same level, depending upon market constraints.
Certain expense items, including condominium assessments, real
estate taxes, and depreciation which remained consistent throughout 1993,
1994, and 1995, are not variable expenses and are not effected by changes in
operational activity. Payroll services and other operating expenses
experienced a reduction from 1993 to 1994 due to certain efficiencies
implemented by the full time hospitality manager; these expense items
increased from 1994 to 1995 primarily due to the increased activity of the
Inn. Management fees were reduced in 1994 and 1995 as a direct result of the
negotiated contract with the hospitality manager. The decrease from 1993 to
1994 and the increase from 1994 to 1995, in operating and administrative
expenses are due to the fees and other administrative expenses associated
with engaging third party entities in 1993 and 1995 to perform asset
management, accounting and investor services for HPP 1990.
During 1994, HPP 1990 entered into an agreement to make
settlement payments to HMI (see Item 1) totaling $271,108 which has been
recorded in the fourth quarter of 1994 and included in accrued expenses and
other liabilities at December 31, 1994. As of December 31, 1995, unpaid
settlement payments included in accrued expenses and other liabilities
totaled $222,224.
The Building Venturer's $5,350,000 purchase money note was
originally due on December 31, 1990. During 1991, the maturity date of the
purchase money note was extended to December 31, 1992. During 1992, the
fmaturity date of the purchase money note was extended to January 2, 1994.
During 1993, the maturity date was extended to March 2, 1994. On April 15,
K-13
1994, the holder of the purchase money note (the Lender) extended the
maturity date to December 31, 1995 and added $150,000 of extension fees and
approximately two months of unpaid interest to the principal balance under
the purchase money note. The lender also required the Building Venture to
make monthly payments to a Tax Escrow account for the exclusive purpose of
funding real estate tax payments by the required due date.
On February 27, 1996, HPP 1990 obtained a $6,000,000 deed of
trust note with a third party lender which provided funds for the Building
Venture to refinance the outstanding balance of the seller financed
purchase money note totaling $5,590,418 to pay $109,582 to the seller in
release of the contingent purchase price promissory note, and to purchase
in part three condominium units and parking spaces owned by unrelated
parties for an aggregate purchase price of $314,800. The deed
of trust note bears interest at 7.85% and requires monthly principal and
interest payments in the amount of $49,628 commencing in April 1996. All
remaining unpaid principal and interest is due in March 2006. Under the
deed of trust note, the lender had the option with six months written
notice to call amounts outstanding under the deed of trust note at the end
of ten years or anytime thereafter. The deed of trust note is secured by
the Building Venture's property, rents and assignment of leases and is
guaranteed by the Building Venture. This transaction will release
approximately $1,000,000 of suspended rehabilitation tax credits to the
Partnership from the Building Venture in 1996.
The Marina Venture requires substantial rehabilitation to become
fully operational. After evaluating the marina over the past few years,
the Marina Venture determined that it was in its best interest to
restructure the Marina Venture before proceeding with the development of
the marina. The Marina Venture did not pay the real estate taxes in 1991 or
the interest due on its property's mortgage in 1992 and 1991. Accordingly,
the mortgage was in default and the lender could, at its option, demand
immediate payment of the note.
Based on management's analysis completed during the fourth
quarter of 1992 which considered the fair market value of marina land and
improvements determined by independent appraisal and priority distribution
of proceeds from capital transactions as provided for in the Marina
Venture's Third Amended and Restated Agreement of Limited Partnership, the
Partnership reserved $845,672 against its investment in the marina land and
improvements as of December 31, 1992.
On December 31, 1992, the seller (HWFP, Inc.) agreed to reduce
the original principal amount of the purchase money note from $1,187,500 to
$350,000 and forgave $237,500 of accrued interest. As a result, the
Partnership recognized an extraordinary gain of $1,075,000 in 1992. Also
on December 31, 1992, the Third Amended and Restated Agreement of Limited
Partnership of Henderson's Wharf Marina L.P. was executed. HWFP, Inc., a
Maryland corporation, received a 50% limited partnership interest in the
Marina Venture. Concurrently, HMI withdrew as a limited partner in the
Marina Venture, HPP 1990's limited partnership interest in the Marina
Venture was reduced to 49% and HWDC retained a 1% general partnership
interest in the Marina Venture. HWFP, Inc.'s minority interest in the
Marina Venture was recorded at fair market value based on an independent
appraisal and priority distribution of proceeds from capital transactions
K-14
as provided for in the Marina Venture's Third Amended and Restated
Agreement of Limited Partnership.
On February 27, 1996, HPP 1990, HWDC and HWFP, Inc. entered into
the First Amendment to the Third Amended and Restated Agreement of Limited
Partnership of Henderson's Wharf Marina, L.P. by which HWFP, Inc. redeemed
its 50% limited partnership interest in the Marina Venture in return for a
$225,000 first mortgage note secured by the marina property. The note
bears interest at 7.50%, matures on March 15, 2006, and requires monthly
principal and interest payments in the amount of $2,086. As a result of
the redemption of HWFP's interest, HPP 1990's limited partnership interest
in the Marina Venture increased to 98% and HWDC received a 1% limited
partnership interest and maintained its 1% general partnership interest in
the Marina Venture.
Inflation and Other Economic Factors
------------------------------------
Recent economic trends have kept inflation relatively low
although the Partnership cannot make any predictions as to whether recent
trends will continue. The assets of the Partnership are highly leveraged
in view of the fact that the Building Venture was subject to a substantial
purchase money note as of December 31, 1995, and remains subject to a
substantial mortgage note based on the refinancing effective February 27,
1996. Operating expenses and rental revenues of each property are subject
to inflationary factors. Low rates of inflation could result in slower
rental rate increases, and to the extent that these factors are not offset
by similar increases in property operating expenses (which could arise as a
result of general economic circumstances such as an increase in the cost of
energy or fuel, or from local economic circumstances), the operations of
the Partnership could be adversely affected. Actual deflation in prices
generally would, in effect, increase the economic burden of the mortgage
debt service with a corresponding adverse effect. High rates of inflation,
on the other hand, raise the operating expenses for projects and to the
extent they cannot be passed on to tenants through higher rents, such
increases could also adversely affect Partnership operations. Although, to
the extent rent increases are commensurable, the burden imposed by the
mortgage leverage is reduced with a favorable effect. Low levels of new
construction of similar projects and high levels of interest rates may
foster demand for existing properties through increasing rental income and
appreciation in value.
Item 8. Financial Statements and Supplementary Data.
- ------- --------------------------------------------
See the Financial Statements of the Partnership included as part
of this Annual Report on Form 10-K.
Item 9. Changes in and Disagreements with Accountants on Accounting and
- ------- Financial Disclosure.
None
K-15
PART III
Item 10. Directors and Executive Officers of the Registrant.
- -------- ---------------------------------------------------
(a) and (b) Identification of Directors and Executive Officers.
The following table sets forth the name and age of the director
and executive officer of BHP II Advisors and the offices held by such
person.
Name Office Age
---- ------ ---
Terrence P. Sullivan President and Director 49
Mr. Sullivan has served as a director and executive officer of
BHP II Advisors since the organization of PAS II in June 1989. Since that
time he has also been a general partner of BHP II Advisors. He will
continue to serve in the capacity indicated above until his successor is
elected and qualified. Mr. Sullivan is also an executive officer of Boston
Capital Planning.
(c) Family Relationships.
---------------------
None.
(e) Business Experience.
--------------------
The background and experience of the executive officer and
director of BHP II Advisors and Boston Capital Planning identified above in
Items 10(a) and 10(b) are as follows:
Terrence P. Sullivan, 49, is the founder and sole shareholder of
Boston Capital Planning, a financial consulting and real estate syndication
firm, and its wholly-owned subsidiary, Boston Bay Capital, Inc. (Boston Bay
Capital). Founded in 1979, Boston Bay Capital was an NASD-Registered
broker/dealer specializing in placement of interests in real estate limited
partnerships which own historic and restoration properties. From 1986
through December 31, 1989, Boston Bay Capital participated in the placement
of limited partnership interest in 98 real estate programs, over 60 of
which were historic rehabilitation or restoration partnerships, placing a
total of approximately $140,000,000 in equity. In addition, from 1987 to
1990, Boston Bay Capital served as dealer manager in connection with the
sale of units of limited partnership interest in Historic Preservation
Properties Limited Partnership, Historic Preservation Properties 1988
Limited Partnership, Historic Preservation Properties 1989 Limited
Partnership and the Partnership, the first four public programs sponsored
by Affiliates of the General Partner. Such public programs sold an
aggregate of approximately $82 million of Units of limited partnership
interest. From 1972 to 1978, Mr. Sullivan was the Tax Shelter coordinator
for the Boston office of White, Weld & Co., Inc., an investment banking
firm. Mr. Sullivan graduated from Worcester Polytechnic Institute in 1968
with a Bachelor of Science degree in mechanical engineering. He received a
Masters in Business Administration degree from the University of
Massachusetts (Amherst) in 1971. Mr. Sullivan serves as a general partner
of BBC Restoration Properties Limited Partnership and BBC Restoration
Properties II Limited Partnership. In addition, an entity controlled by
Mr. Sullivan serves as the general partner of Institutional Credit Partners
K-16
Limited Partnership (ICP), a partnership organized to invest in a
diversified portfolio of properties which qualify for low income housing
tax credits, Rehabilitation Tax Credits, or both. In 1989, ICP completed a
private placement of $5,790,000 of limited partnership interest to
corporations and other institutional investors.
(f)-(g) Involvement in Certain Legal Proceedings.
None
Item 11. Executive Compensation.
- -------- -----------------------
The director and executive officer of PAS II and Boston Capital
Planning received no remuneration from the Partnership.
Under the Partnership Agreement, the General Partner and its
affiliates are entitled to receive various fees, expense reimbursements,
commissions, cash distributions, allocations of taxable income or loss and
tax credits from the Partnership. The amounts of these items and the times
at which they are payable to the General Partner or its affiliates are
described at pages 14-16 and 36-39 of the Prospectus under the captions
"Management Compensation" and "Cash Distributions and Net Profits and Net
Losses", respectively, which descriptions are incorporated herein by this
reference.
No commissions, fees, or cash distributions were paid by the
Partnership to the General Partner or its affiliates for the years ended
December 31, 1995, 1994 and 1993. The Partnership reimbursed an affiliate
of the General Partner $65,903, $46,063, and $24,964 for administrative
expenses for the years ended December 31, 1995, 1994 and 1993,
respectively.
For the year ended December 31, 1995, the Partnership allocated
approximately $6,800 of taxable loss and no Rehabilitation Tax Credits to
the General Partner. See Note 6 to Financial Statements for additional
information about transactions between the Partnership and the General
Partner and its affiliates.
Item 12. Unit Ownership of Certain Beneficial Owners and Management.
- -------- -----------------------------------------------------------
(a) Unit Ownership of Certain Beneficial Owners.
--------------------------------------------
The Spiegel Corporation, 1515 West 22nd Street, Oak Brook,
Illinois 60522, is known by the Partnership to be the beneficial owner of
more than 5% of the outstanding Units at March 15, 1996 (2,000 units
12.22%). Under the Partnership Agreement, the voting rights of the Limited
Partners are limited and, in some circumstances, are subject to the prior
receipt of certain opinions of counsel or judicial decisions.
Under the Partnership Agreement, the right to manage the
business of the Partnership is vested solely in the General Partner,
although the consent of a majority in interest of the Limited Partners is
required for the sale at one time of all or substantially all of the
Partnership's assets and with respect to certain other matters. See Item 1
above for a description of the General Partner and its general partners.
K-17
(b) Unit Ownership of Management.
-----------------------------
No director or executive officer of BHP II Advisors, Boston
Capital Planning or their affiliates had any beneficial ownership of Units
as of March 15, 1996. No officer or director of BHP II Advisors or Boston
Capital Planning, nor any general partner of the General Partner, nor any
of their respective affiliates, possesses the right to acquire Units.
(c) Change in Control.
------------------
There exists no arrangement known to the Partnership which
may at a subsequent date result in a change in control of the Partnership.
Item 13. Certain Relationships and Related Transactions.
- -------- -----------------------------------------------
See Note 6 of Notes to Financial Statements for information about
transactions between the Partnership and the General Partner and its
affiliates. See Item 11 above for information concerning the fees,
commissions, reimbursements and cash distributions which the Partnership
paid to or accrued for the account of the General Partner and its
affiliates for the years ended December 31, 1995, 1994 and 1993.
K-18
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
- -------- -----------------------------------------------------------------
(a) The following documents are filed as part of this report:
1. Financial Statements - The Financial Statements
listed on the accompanying Index to Financial Statements and
Schedule are filed as a part of this Annual Report.
2. Financial Statement Schedules - The Financial
Statement Schedules listed on the accompanying Index
to Financial Statements and Schedules are filed as a part of
this Annual Report.
3. Exhibits
--------
3(a) Certificate of Limited Partnership of Historic
Preservation Properties 1990 L.P. Tax Credit Fund dated
as of September 29, 1989, (filed as exhibit 3A to the
Partnership's Registration Statement on Form S-11, File
No. 33-31778, and incorporated herein by this
reference).
3(b) Certificate of Amendment of Historic
Preservation Properties 1990 L.P. Tax Credit Fund dated
as of October 23, 1989, (filed as exhibit 3C to the
Partnership's Registration Statement on Form S-11, File
No. 33-31778, and incorporated herein by this
reference).
3(c) Amended and Restated Agreement of Limited
Partnership of Historic Preservation Properties 1990
L.P. Tax Credit Fund dated as of March 30, 1990, as
currently in effect, other than amendments thereto
which provide solely for the admission or withdrawal of
investors as limited partners of the Partnership
(attached as Exhibit A to Prospectus of the Partnership
included as part of its Registration Statement on Form
S-11, File No. 33-31778, and incorporated herein by
reference).
4. See Exhibits 3(a), 3(b) and 3(c).
10(a) Escrow Deposit Agreement between Historic
Preservation Properties 1990 L.P. Tax Credit Fund and
Wainwright Bank and Trust Company, (filed as exhibit 10A to
the Partnership's Registration Statement of Form S-11, File
No. 33-31778, and incorporated herein by this reference).
K-18
10(b) Documents relating to the acquisition of
partnership interests in Henderson's Wharf Baltimore, L.P.
and Henderson's Wharf Marina, L.P. and material contracts of
these partnerships:
I. Certificate of Limited Partnership of Henderson's
Wharf Baltimore, L.P. dated as of July 12, 1990 and
filed in the Office of the Secretary of State of
Delaware on July 20, 1990. (1)
II. Certificate of Limited Partnership of Henderson's
Wharf Marina, L.P. dated as of July 12, 1990 and filed
in the Office of the Secretary of State of Delaware on
July 20, 1990. (1)
III. Agreement of Limited Partnership of Henderson's
Wharf Baltimore, L.P. dated as of July 18, 1990. (1)
IV. Agreement of Limited Partnership of Henderson's
Wharf Marina, L.P. dated as of July 18, 1990. (1)
V. Certificate of Amendment of Certificate of Limited
Partnership of Henderson's Wharf Baltimore, L.P. dated
as of February 14, 1991 and filed in the Office of the
Secretary of State of Delaware on March 5, 1991. (2)
VI. Certificate of Amendment of Certificate of Limited
Partnership of Henderson's Wharf Marina, L.P. dated as
of February 14, 1991 and filed in the Office of the
Secretary of State of Delaware on March 5, 1991. (2)
VII. Amended and Restated Agreement of Limited
Partnership of Henderson's Wharf Baltimore, L.P. dated
as of July 31, 1990. (1)
VIII. Second Amended and Restated Agreement of
Limited Partnership of Henderson's Wharf Baltimore,
L.P. dated February 1, 1991. (2)
IX. Amended and Restated Agreement of Limited
Partnership of Henderson's Wharf Marina, L.P. dated as
of July 31, 1990. (1)
X. Second Amended and Restated Agreement of Limited
Partnership of Henderson's Wharf Marina, L.P. dated
February 1, 1991. (2)
(1) Previously filed as part of exhibit 10B to the Partnership's
Registration Statement on Form S-11, File No. 33-31778, and incorporated
herein by this reference.
(2) Previously filed as part of exhibit 10(b) to the Partnership's
Annual Report on Form 10-K for the year ended December 31, 1990 and
incorporated herein by this reference.
K-20
XI. Agreement for Sale of Henderson's Wharf, the
Fastlands and Marina among HWFP, Inc., Kenneth M.
Stein, J.E. Robert, the United Brotherhood of
Carpenters and Joiners of America and Historic
Preservation Properties 1990 L.P. Tax Credit Fund dated
June 19, 1990. (1)
XII. Assignment and Assumption Agreement Regarding
Contract Rights between Historic Preservation
Properties 1990 L.P. Tax Credit Fund and Henderson's
Wharf Baltimore, L.P. dated July 31, 1990. (1)
XIII. Assignment and Assumption Agreement Regarding
Contract Rights between Historic Preservation
Properties 1990 L.P. Tax Credit Fund and Henderson's
Wharf Marina, L.P. dated July 31, 1990. (1)
XIV. Deed dated July 31, 1990 from Joseph E. Robert,
Jr., Kenneth M. Stein and HWFP, Inc. to Henderson's
Wharf Baltimore, L.P. (1)
XV. Deed dated July 31, 1990 from Joseph E. Robert,
Jr., Kenneth M. Stein and HWFP, Inc. to Henderson's
Wharf Marina, L.P. (1)
XVI. Assignment and Blanket Transfer from HWFP, Inc.
and the United Brotherhood of Carpenters and Joiners of
America to Henderson's Wharf Baltimore, L.P. dated July
31, 1990. (1)
XVII. Assignment and Blanket Transfer from HWFP, Inc.
and the United Brotherhood of Carpenters and Joiners of
America to Henderson's Wharf Marina, L.P. dated July 31,
1990. (1)
XVIII. Purchase Money Promissory Note of Henderson's
Wharf Baltimore, L.P. to HWFP, Inc. dated July 31, 1990
in the principal amount of $6,350,000. (1)
XIX. Purchase Money Promissory Note of Henderson's
Wharf Marina, L.P. to HWFP, Inc. dated July 31, 1990 in
the principal amount of $1,187,500. (1)
XX. Contingent Purchase Price Promissory Note of
Henderson's Wharf Baltimore, L.P. to HWFP, Inc. dated
July 31, 1990 in the principal amount of $1,150,000.
(1)
XXI. Purchase Money Deed of Trust between Henderson's
Wharf Baltimore, L.P. and Kenneth M. Stein and Joseph
E. Robert, Jr., Trustees, dated July 31, 1990. (1)
(1)Previously filed as part of exhibit 10B to the Partnership's
Registration Statement on Form S-11, File No. 33-31778, and incorporated
herein by this reference.
K-21
XXII. Purchase Money Deed of Trust between
Henderson's Wharf Marina, L.P. and Kenneth M. Stein and
Joseph E. Robert, Jr., Trustees, dated July 31, 1990.
(1)
XXIII. First Amendment to Amended and Restated
Henderson's Wharf Disposition Agreement among
Henderson's Wharf Baltimore, L.P., Henderson's Wharf
Marina, L.P. and the Mayor and City Council of
Baltimore, Maryland dated July 31, 1990. (1)
XXIV. Second Amendment to Pedestrian Promenade
Easement Agreement among Henderson's Wharf Baltimore,
L.P. Henderson's Wharf Marina, L.P. and the Mayor and
City Council of Baltimore, Maryland dated July 31,
1990. (1)
XXV. Property Management and Brokerage Agreement
between Henderson's Wharf Baltimore, L.P. and Richland
Management, Inc. dated as of July 31, 1990. (1)
XXVI. Development Agreement between Henderson's
Wharf Baltimore, L.P. and Richland #1, L.P. dated as of
July 31, 1990. (1)
XXVII. Inn Lease between Henderson's Wharf
Baltimore, L.P. and Hillcrest Management, Inc. dated as
of July 31, 1990. (1)
XXVIII. Property Management and Brokerage Agreement
between Henderson's Wharf Baltimore, L.P. and Hillcrest
Management, Inc. dated as of February 1, 1991. (2)
XXIX. Consulting Agreement between Henderson's
Wharf Baltimore, L.P. and Hillcrest Management, Inc.
dated as of February 1, 1991. (2)
XXX. Settlement Agreement between Historic Preservation
Properties 1990 L.P. Tax Credit Fund, Henderson's Wharf
Baltimore, L.P. Henderson's Wharf Marina, L.P. and
Richard F. Holland, Richland #1 L.P., Richland
Management, Inc., Richland Partners, Inc., Richland
Construction, Inc., Richland Historic Properties, Inc.
and Richland #2 L.P. dated February 1, 1991. (2)
(1) Previously filed as part of exhibit 10B to the Partnership's
Registration Statement on Form S-11, File No. 33-31778, and incorporated
herein by this reference.
(2) Previously filed as part of exhibit 10(b) to the Partnership's
Annual Report on Form 10-K for the year ended December 31, 1990 and
incorporated herein by this reference.
K-22
XXXI. Amendment No. 1 to the Second Amended and
Restated Agreement of Limited Partnership between
Henderson's Wharf Development Corporation, Historic
Preservation Properties 1990 L.P. Tax Credit Fund and
Hillcrest Management, Inc. dated August 1, 1991. (3)
XXXII. Settlement Agreement between Historic
Preservation Properties 1990 L.P. Tax Credit Fund,
Boston Historic Partners II Limited Partnership, BHP II
Advisors Limited Partnership, Terrence P. Sullivan,
Portfolio Advisory Services II, Inc., Boston Capital
Planning Group, Inc., Boston Bay Capital, Inc. and
Daniels Printing Company dated July 6, 1992. (4)
XXXIII. Second Amendment to Note 1, the Purchase
Money Promissory Note, between Henderson's Wharf
Baltimore, L.P. and HWFP, Inc. dated December 7, 1992.
(4)
XXXIV. Release of Deed of Trust securing $1,187,500
Purchase money Promissory Note between HWFP, Inc.
Joseph E. Robert, Jr., S. Herbert Tinley, III and
Henderson's Wharf Marina L.P. dated December 31, 1992.
(4)
XXXV. Third Amended and Restated Agreement of
Limited Partnership of Henderson's Wharf Marina, L.P.
dated December 31, 1992. (4)
XXXVI. Agreement regarding refund of real estate
taxes pertaining to Henderson's Wharf Baltimore L.P.
and HWFP, Inc. dated December 31, 1992. (4)
XXXVII. Property Management Agreement between
Henderson's Wharf Marina, L.P. and Hillcrest
Management, Inc. dated January 1, 1992. (4)
(3) Previously filed as part of exhibit 10(c) to the Partnership's
Annual Report on Form 10-K for the year ended December 31, 1991 and
incorporated herein by this reference.
(4) Previously filed as part of exhibit 10(b) to the Partnership's
Annual Report on Form 10-K for the year ended December 31, 1992 and
incorporated herein by this reference.
K-23
XXXVIII. Property Management Agreement between
Henderson's Wharf Marina L.P., Henderson's Wharf
Baltimore, L.P. and the Residences and Inn at
Henderson's Wharf, collectively referred to as
"Henderson's Wharf" and McKenna Management Associates,
Inc., dated August 23, 1993. (5)
XXXIX. Third Amendment to Note 1, the Purchase Money
Promissory Note, Between Henderson's Wharf Baltimore,
L.P. and HWFP, Inc. dated December 31, 1993. (5)
XL. Fourth Amendment to Note 1, the Purchase Money
Promissory Note, between Henderson's Baltimore, L.P.
and HWFP, Inc. dated February 22, 1994. (5)
XLI. Promissory Note between Historic Preservation
Properties 1990 L.P. Tax Credit Fund and Lew Cohen
dated July 1, 1993. (6)
XLII. Settlement documents which include the
Settlement Agreement and Mutual Release, Agreement of
Purchase and Sale, Deed, Escrow Agreement, Special
Power of Attorney, Option Agreement, Maryland
Residential Property Disclaimer Statement with Joseph
and Eileen Mason for Unit # 433, dated June 1, 1994.
(6)
XLIII. Settlement documents which include the
Settlement Agreement and Mutual Release, Agreement of
Purchase and Sale, Deed, Escrow Agreement, Special
Power of Attorney, Option Agreement, Maryland
Residential Property Disclaimer Statement and Lease
with Colvin Ryan for Unit # 510, dated June 1, 1994.
(6)
XLIV. Settlement documents which include the
Agreement of Purchase and Sale, Deed, Escrow Agreement,
Special Power of Attorney and Option Agreement with
Anne B. Cook for Unit # 409. (6)
XLV. Promissory Note between Historic Preservation
Properties 1990 L.P. Tax Credit Fund and Hillcrest
Asset Management, Inc. dated December 30, 1994. (6)
XLVI. Pledge Agreement between Historic
Preservation Properties, Henderson's Wharf Baltimore,
L.P., Henderson's Wharf Marina, L.P. and Hillcrest
Asset Management, Inc., dated December 30, 1994. (6)
(5) Previously filed as part of exhibit 10(b) to the Partnership's
Annual Report on Form 10-K for the year ended December 31, 1993 and
incorporated herein by this reference.
(6) Previously filed as part of exhibit 22 to the Partnership's
Annual Report on Form 10-K for the year ended December 31, 1994 and
incorporated herein by this reference.
K-24
XLVII. Property Management Agreement between
Henderson's Wharf Marina L.P., Henderson's Wharf
Baltimore, L.P. and the Residences and Inn at
Henderson's Wharf, collectively referred to as
"Henderson's Wharf" and Claremont Management
Corporation, dated November 1, 1995.
XLVIII. Asset Management Agreement between Historic
Preservation Properties 1990 L.P. Tax Credit Fund and
Claremont Management Corporation dated October 1, 1995.
10 (c) Asset Management Agreement between Historic
Preservation Properties 1990 L.P. Tax Credit Fund and
Hillcrest Asset Management, Inc. dated January 1, 1992.
(5)
22 List of Ventures. (5)
28 (ii) (a) Supplement No. 1 to the Partnership's Prospectus dated
August 1, 1990. (7)
(b) Supplement No. 2 to the Partnership's Prospectus
dated December 3, 1990. (7)
(c) Pages 14-16, 28-36 and 36-39 of the Partnership's
Prospectus dated March 30, 1990 and filed with the
Commission pursuant to Rule 424(b) on April 6, 1990. (7)
(5) Previously filed as part of exhibit 22 to the Partnership's Annual
Report on Form 10-K for the year ended December 31, 1993 and incorporated
herein by this reference.
(7) Previously filed as part of exhibit 28 (ii) (a) to the
Partnership's Annual Partnership Report on Form 10-K for the year ended
December 31, 1990 and incorporated herein by this reference.
K-25
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of
the Securities Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
HISTORIC PRESERVATION PROPERTIES 1990 L.P.
TAX CREDIT FUND
By: BOSTON HISTORIC PARTNERS II LIMITED
PARTNERSHIP, GENERAL PARTNER
By: BHP II ADVISORS LIMITED PARTNERSHIP
By: PORTFOLIO ADVISORY SERVICES II, INC.
Date: March 28, 1996 By:_______________________
Terrence P. Sullivan,
President
and
Date: March 28, 1996 By:_______________________
Terrence P. Sullivan,
General Partner
Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated.
Signature Title
____________________ Individual General Partner of
Terrence P. Sullivan BHP II Advisors Limited Partnership
and as President and Principal
Date: March 28, 1996 Executive Officer of Portfolio
-------------- Advisory Services II, Inc.,
General Partner of BHP II
Advisors Limited Partnership
Principal Financial and
____________________ Principal Accounting Officer
Terrence P. Sullivan of Portfolio Advisory Services II,
Inc., General Partner of BHP II
Date: March 28, 1996 Advisors Limited Partnership
--------------
K-26
Supplemental Information to be Furnished with Reports Filed Pursuant to
Section 15(d) of the Act by Registrants Which Have Not Registered
Securities Pursuant to Section 12 of the Act.
An annual report will be furnished to Unit holders
subsequent to filing of this Form 10-K.
K-27
HISTORIC PRESERVATION PROPERTIES 1990 L.P. TAX CREDIT FUND
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED
DECEMBER 31, 1995, 1994 AND 1993
TOGETHER WITH INDEPENDENT AUDITORS' REPORTS
ANNUAL REPORT ON FORM 10-K/A
Items 14(a) (1) and (2)
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
Consolidated Financial Statements of
Historic Preservation Properties
1990 L.P. Tax Credit Fund
Independent Auditors' Report F-3
Consolidated Balance Sheets as of December
31, 1995 and 1994 F-4
Consolidated Statements of Operations for
the Years Ended December 31, 1995,
1994 and 1993 F-5
Consolidated Statements of Partners' Equity
(Deficiency) for the Years Ended December 31,
1995, 1994 and 1993 F-6
Consolidated Statements of Cash Flows for the
Years Ended December 31, 1995,
1994 and 1993 F-7
Notes to Consolidated Financial Statements F-8
Independent Auditors' Report on Accompanying
Information F-18
Consolidated Financial Statement Schedule:
Schedule III - Real Estate and Accumulated
Depreciation F-19
Independent Auditors Report
---------------------------
The Partners
Historic Preservation Properties 1990
L.P. Tax Credit Fund
Quincy, Massachusetts
We have audited the accompanying consolidated balance sheets of
HISTORIC PRESERVATION PROPERTIES 1990 L.P. TAX CREDIT FUND, a Delaware
limited partnership (the "Partnership"), as of December 31, 1995 and 1994,
and the related consolidated statements of operations, partners' equity
(deficiency) and cash flows for each of the years in the three-year period
ended December 31, 1995. These financial statements are the responsibility
of the Partnership'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 disclosure 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 consolidated financial position of
HISTORIC PRESERVATION PROPERTIES 1990 L.P. TAX CREDIT FUND as of December
31, 1995 and 1994, and the results of its operations and cash flows for
each of the years in the three-year period ended December 31, 1995, in
conformity with generally accepted accounting principles.
Lefkowitz, Garfinkel, Champi & DeRienzo, P.C.
Providence, Rhode Island
March 7, 1996
HISTORIC PRESERVATION PROPERTIES 1990 L.P. TAX CREDIT FUND
CONSOLIDATED BALANCE SHEETS - DECEMBER 31, 1995 AND 1994
ASSETS
1995 1994
INVESTMENT IN REAL ESTATE
Building and building improvements $14,736,101 $14,736,101
Land 97,034 97,034
Furniture and equipment 964,378 950,491
Marina - land and improvements 1,352,790 1,352,790
----------- -----------
17,150,303 17,136,416
Less accumulated depreciation 2,573,713 2,035,160
----------- -----------
14,576,590 15,101,256
Reserve for realization of Marina
land and improvements (845,672) (845,672)
----------- -----------
13,730,918 14,255,584
CASH, including restricted cash
(1995, $86,716; 1994, $101,326) 474,835 505,501
ESCROW DEPOSITS 54,270 44,299
DEFERRED EVALUATION AND ACQUISITION
COSTS, net of accumulated amortization
(1995, $137,822; 1994, $110,258) 964,778 992,342
OTHER DEFERRED COSTS, net of accumulated
amortization
(1995, $0; 1994, $17,400) 51,121 2,100
OTHER ASSETS 207,103 49,358
------------ -----------
$15,483,025 $15,849,184
============ ===========
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES:
Note payable $ 5,590,418 $ 5,590,418
Accrued expenses and other liabilities 402,064 358,200
Security deposits 86,716 101,326
----------- -----------
Total liabilities 6,079,198 6,049,944
----------- -----------
COMMITMENTS (Notes 5 and 6)
MINORITY INTEREST 268,325 304,717
PARTNERS' EQUITY
Limited Partners' equity-Units of Investor
Limited Partnership Interest, $1,000
stated value per Unit-issued and
outstanding - 16,361 units 9,186,508 9,541,939
General Partner's equity deficiency (51,006) (47,416)
----------- -----------
Total partners' equity 9,135,502 9,494,523
----------- -----------
$15,483,025 $15,849,184
============ ============
The accompanying notes are an integral part of these financial statements.
HISTORIC PRESERVATION PROPERTIES 1990 L. P. TAX CREDIT FUND
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
1995 1994 1993
REVENUES:
Rental and related income $2,706,446 $2,456,887 $2,082,011
Interest and other income 62,901 44,675 138,811
---------- ---------- ----------
2,769,347 2,501,562 2,220,822
---------- ---------- ----------
EXPENSES:
Operating and administrative 120,957 62,152 117,010
Professional fees 100,006 41,661 51,011
Depreciation and amortization 568,217 571,366 571,026
Property operating expenses:
Payroll services 572,506 448,351 491,577
Condominium assessments 357,060 357,060 315,906
Real estate taxes 249,994 269,682 243,133
Management fees 94,841 102,600 123,594
Other operating 541,785 520,156 558,505
---------- --------- ---------
2,605,366 2,373,028 2,471,762
---------- --------- ---------
Income (Loss) from operations 163,981 128,534 (250,940)
---------- --------- ---------
OTHER EXPENSES:
Interest expense and ext fee (559,394) (551,448) (685,204)
Contract termination settlement - (271,108) -
----------- --------- ---------
(559,394) (822,556) (685,204)
----------- --------- ---------
MINORITY INTEREST IN LOSS ON MARINA
VENTURE 36,392 26,518 18,765
----------- --------- ---------
NET LOSS $ (359,021) $(667,504) $(917,379)
============= ========== ===========
NET LOSS ALLOCATED
TO GENERAL PARTNER $ (3,590) $ (6,675) $ (9,174)
============= ========== ===========
NET LOSS ALLOCATED
TO LIMITED PARTNERS $ (355,431) $(660,829) $(908,205)
============= ========== ===========
NET LOSS PER UNIT OF INVESTOR
LIMITED PARTNERSP INT, BASED
ON 16,361 UNITS OUTSTANDING: $ (21.72) $ (40.39) $ (55.51)
============== ========== ===========
The accompanying notes are an integral part of these financial statements.
HISTORIC PRESERVATION PROPERTIES 1990 L. P. TAX CREDIT FUND
CONSOLIDATED STATEMENTS OF PARTNERS' EQUITY (DEFICIENCY)
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
Units of
Investor
Limited Investor
Partner- Limited General
ship Partners' Partner's
Interest Equity Deficiency Total
--------- ------------- ------------- ------------
<S> <C> <C> <C> <C>
BALANCE,
December 31, 1992 16,361 $ 11,110,973 $ (31,567) $ 11,079,406
Net loss - (908,205) (9,174) (917,379)
--------- ------------- ------------- -------------
BALANCE,
December 31, 1993 16,361 10,202,768 (40,741) 10,162,027
Net loss - (660,829) (6,675) (667,504)
--------- ------------- ------------ -------------
BALANCE,
December 31, 1994 16,361 9,541,939 (47,416) 9,494,523
Net loss - (355,431) (3,590) (359,021)
--------- ------------- ----------- -------------
BALANCE,
December 31, 1995 16,361 $ 9,186,508 $ (51,006) $ 9,135,502
========= ============= ============ =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
HISTORIC PRESERVATION PROPERTIES 1990 L. P. TAX CREDIT FUND
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
1995 1994 1993
CASH FLOWS FROM OPER ACTIVITIES:
Net loss $ (359,021) $(667,504) $ (917,379)
Adjustments to reconcile net loss
to net cash
provided by (used in) operating act-
Depreciation and amortization 568,217 571,366 571,026
Loss on disposal of equipment 18,339
Deferred interest expense and extension
fee payable added to the principal
of note payable 240,418
Contract termination settlement 271,108
Minority int in loss on Marina Venture (36,392) (26,518) (18,765)
Inc (dec) in accrued expenses and
other liabilities (7,523) (245,197) 215,683
Increase in escrow deposits (9,971) (44,299)
(Increase) decrease in other assets (157,745) 27,546 (10,253)
--------- --------- ----------
Net cash provided by (used in)
operating activities (2,435) 145,259 (159,688)
--------- --------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to Marina - - (11,668)
Purchase of furniture and equipment (3,827) (13,083) (1,140)
Payment of deferred costs (24,404) - -
---------- -------- ----------
Cash used in investing activities (28,231) (13,083) (12,808)
CASH FLOWS FROM FINANCING ACTIVITIES:
Decrease in minority interest - - (118)
---------- -------- ----------
NET INCREASE (DECREASE) IN CASH (30,666) 132,176 (172,614)
CASH, BEGINNING OF YEAR 505,501 373,325 545,939
---------- --------- -----------
CASH, END OF YEAR $ 474,835 $ 505,501 $ 373,325
========== ========= ===========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest $ 559,044 $ 461,030 $ 535,000
========== ========= ===========
The accompanying notes are an integral part of these financial statements.
HISTORIC PRESERVATION PROPERTIES 1990 L.P. TAX CREDIT FUND
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(1) Organization
Historic Preservation Properties 1990 L.P. Tax Credit Fund (HPP
1990) was formed on October 4, 1989 under the Delaware Revised Uniform
Limited Partnership Act. The purpose of HPP 1990 is to invest in a
portfolio of real properties which are intended to qualify for
rehabilitation tax credits (Rehabilitation Tax Credits) afforded by Section
47 of the Internal Revenue Code of 1986, as amended, and to rehabilitate
such properties (or acquire such properties in the process of
rehabilitation and complete such rehabilitation) in a manner intended to
render a portion of the costs thereof eligible for Rehabilitation Tax
Credits.
Boston Historic Partners II Limited Partnership (BHP II), a
Delaware limited partnership, is the general partner of HPP 1990, and
officers of Boston Capital Planning Group, Inc. (BCPG), an affiliate of BHP
II, were the initial limited partners of HPP 1990. The initial limited
partners withdrew as limited partners upon the first admission of Investor
Limited Partners (Limited Partners). Prior to admission of the Limited
Partners, all costs incurred by HPP 1990 were paid by BHP II. On June 29,
1990, the first Limited Partners were admitted to HPP 1990 and operations
commenced.
The Amended and Restated Agreement of Limited Partnership
(Partnership Agreement) of HPP 1990 generally provides that all net
profits, net losses, tax credits and cash distributions of HPP 1990 from
normal operations subsequent to admissions of Limited Partners shall be
allocated 99% to the Limited Partners and 1% to BHP II. Proceeds from
sales or refinancing generally will be distributed 100% to the Limited
Partners until they have received an amount equal to their Adjusted Capital
Contributions (as defined in the Partnership Agreement) plus priority
returns and additional incentive priority returns for certain Limited
Partners admitted to HPP 1990 on or prior to certain specified dates.
(2) General Partner - BHP II
BHP II was formed in June 1989 for the purpose of organizing,
syndicating, and managing publicly offered real estate limited partnerships
(Public Rehabilitation Partnerships).
During 1995, 1994 and 1993, BHP II incurred unaudited losses of
approximately $13,000, $14,000 and $24,000 respectively. BHP II's
unaudited deficit at December 31, 1995 was approximately $737,000.
BHP II has a substantial amount of unpaid obligations to trade
creditors. In the event BHP II is not able to generate sufficient cash to
fund BHP II's operations, commitments and contingencies in the future,
there might be unfavorable consequences to HPP 1990.
(2) General Partner - BHP II (Continued)
Under the Partnership Agreement, a bankruptcy of BHP II could
result in the dissolution of HPP 1990, if at any time BHP II were to be
adjudicated bankrupt (either by way of a voluntary filing or by an issuance
of an order for relief in the event of an involuntary filing) and BHP II
continued to be the sole general partner of HPP 1990. If an additional
general partner was admitted to HPP 1990 prior to a bankruptcy of BHP II,
the business of HPP 1990 would be able to continue.
If BHP II were to be adjudicated bankrupt, and at the time BHP II
was the sole general partner of HPP 1990, HPP 1990 would not be dissolved
upon the occurrence of such an event if a majority in interest of the
Limited Partners elect, within 90 days, to continue the business of HPP
1990 and another general partner is elected (under Delaware law, within 90
days a unanimous vote of the Limited Partners to continue HPP 1990 is
required).
Although the Partnership Agreement provides for the above
mechanisms for continuing the business of HPP 1990, BHP II's general
partners believe the most likely course of action would be to seek a
successor or additional general partner for HPP 1990.
If such events were to happen whereby BHP II and/or HPP 1990
could not consummate the above, HPP 1990 could be dissolved, resulting in
adverse tax consequences to the Limited Partners, including recapture of a
portion of the Rehabilitation Tax Credits allocated to them.
(3) Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include the accounts of HPP
1990, Henderson's Wharf Baltimore, L.P. and Henderson's Wharf Marina, L.P.
after elimination of all intercompany transactions and accounts.
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
(3) Summary of Significant Accounting Policies (Continued)
Real Estate
Real estate is held for lease and stated at cost. During the
construction period, all carrying costs, principally real estate taxes and
interest, were capitalized. Depreciation is provided over the estimated
economic useful lives of the assets using the straight-line method.
Cash
At December 31, 1995 and 1994, HPP 1990 had $204,684 and
$268,975, respectively, of cash in banks which is in excess of amounts
insured by the Federal Deposit Insurance Corporation.
Deferred Evaluation and Acquisition Costs
Expenditures related to the purchase of real estate have been
capitalized and are being amortized on a straight-line basis over the
estimated life of real property (40 years).
Income Taxes
No provision (benefit) for income taxes is reflected in the
accompanying consolidated financial statements of HPP 1990. All partners
are required to report on their tax returns their allocable share of
income, gains, losses, deductions and credits determined on a tax basis.
Syndication Costs
Syndication costs were treated as a direct reduction of the
Limited Partners' equity accounts.
Deferred Costs
Organization costs were capitalized and amortized on a straight-
line basis over a 60-month period. Other deferred costs relating to the
refinancing of the Partnership's note payable will be amortized on a
straight-line basis over the term of the new mortgage note.
Revenue Recognition
Revenue from residential units, principally under short-term
operating leases, is recorded when due. Revenue from rentals of inn units
is recognized when earned.
(4) Investment in Real Estate
During 1990, HPP 1990 acquired an interest in the following
entities (see below for subsequent changes in ownership):
Henderson's Wharf Baltimore, L.P. (the Building Venture) is a
Delaware limited partnership formed on July 20, 1990 to acquire a fee
interest in a seven-story building on 1.5 acres of land and to rehabilitate
the building into 125 residential units, 149 indoor parking spaces and a 38
room inn located at 1000 Fell Street, Baltimore, Maryland. The building
contains a total of 137 residential units, 12 of which are owned by
unrelated parties. The building has been substantially renovated and
certain renovation costs qualify for Rehabilitation Tax Credits. The
Building Venture purchased its interest for $6,812,500, which included
seller financing of $6,350,000, and a contingent purchase price promissory
note (see Note 5). Contributions by HPP 1990 to the Building Venture
totaled $12,214,500 as of December 31, 1995.
HPP 1990 has made all required capital contributions to the
Building Venture in accordance with the Building Venture's partnership
agreement, and is not required to make additional contributions, although
at its sole discretion, may do so.
The renovation of the residential units was substantially
complete and a certificate of occupancy was received on December 31, 1990.
The Building Venture commenced lease-up in 1991 and has been fully
operational since 1992. At December 31, 1995, 93% of the residential units
had been leased. During 1995, the average occupancy for the inn was 74%.
During 1994, the Building Venture entered into contracts to
purchase three condominium units and parking spaces (the Property) owned by
unrelated parties. The purchase price of the Property is the greater of the
seller's outstanding mortgage balance as of the date of purchase or the
fair market value of the property as defined in the contracts. The Building
Venture has possession of the property, bears the risk of loss and damage
to the Property, receives all of the rents and other income generated by
the Property and is responsible for payment of all related costs which
include, but are not limited to debt service, taxes and condominium fees.
During 1996, the Building Venture purchased the three condominium units in
conjunction with the refinancing of its note payable (see Note 5).
HPP 1990's operations, principally accounting, investor services
and other general and administrative costs, are funded from distributions
by the Building Venture. During 1995, the Building Venture distributed
$223,138 to HPP 1990.
(4) Investment in Real Estate (Continued)
Henderson's Wharf Marina, L.P. (the Marina Venture) is a Delaware
limited partnership formed on July 20, 1990 to acquire a fee interest in a
1.92 acre parcel of land together with a 256-slip marina located in
Baltimore, Maryland. HPP 1990 purchased the Marina Venture for $1,266,363,
which included seller financing of $1,187,500 (see Note 5). Contributions
to the Marina Venture by HPP 1990 totalled $247,219 as of December 31,
1995. The Marina Venture operated a minimal number of slips from 1991
through 1995 due to the significant repairs necessary to be fully
operational. HPP 1990 is required to make capital contributions to the
Marina Venture to provide funds not otherwise available to make real estate
tax and insurance payments. HPP 1990 may make additional capital
contributions to the Marina Venture as provided in the Marina Venture's
partnership agreement, but is not required to do so.
Under the Second Amended and Restated Agreements of Limited
Partnership dated February 1, 1991 of Henderson's Wharf Baltimore, L.P. and
Henderson's Wharf Marina, L.P., Henderson's Wharf Development Corporation
(HWDC), a Delaware corporation wholly owned by HPP 1990, was admitted as a
general partner of the Ventures (HPP 1990 and HWDC are collectively
referred to as the "Henderson's General Partners"), and Hillcrest
Management, Inc.(HMI), a Massachusetts corporation, was admitted as the
Limited Partner of the Ventures and became a minority interest holder in
the ventures. On August 1, 1991 the Second Amended and Restated Agreement
of Limited Partnership of Henderson's Wharf Marina, L.P. was amended. The
amendment provided for the withdrawal by HPP 1990 as a limited partner.
Consequently, HWDC became the sole general partner in the Marina Venture.
On December 31, 1992, the Third Amended and Restated Agreement of
Limited Partnership of Henderson's Wharf Marina L.P. was executed. HWFP,
Inc. (HWFP), a Maryland corporation and the original holder of the purchase
money note relating to the purchase of the marina property, received a 50%
limited partnership interest in the Marina Venture and became the holder of
a minority interest (see Note 5). Concurrently, HMI withdrew as a limited
partner in the Marina Venture, HPP 1990's limited partnership interest in
the Marina Venture was reduced to 49% and HWDC retained a 1% general
partnership interest in the Marina Venture. The minority interest granted
was recorded
(4) Investment in Real Estate (Continued)
at fair market value based on an independent appraisal and a priority
distribution of proceeds from capital transactions as provided for in the
Marina Venture's Third Amended and Restated Agreement of Limited
Partnership.
In accordance with the termination of all HMI contracts (see Note
6), effective January 1, 1995 HMI withdrew from the Building Venture as a
.1% limited partner and was replaced by HWDC.
Based on the fair market value of marina land and improvements
determined by independent appraisal and the priority distribution of
proceeds from capital transactions as provided for in the Marina Venture's
Third Amended and Restated Agreement of Limited Partnership, the
Partnership has reserved against its investment in the marina land and
improvements.
Generally, allocations of net profits and losses as well as cash
flow of the Building Venture and Marina Venture are allocated in accordance
with the Second Amended and Restated Agreement of Limited Partnership and
Third Amended and Restated Agreement of Limited Partnership, respectively,
as defined in the agreements. The overall management and control of the
business and affairs of the Ventures is solely vested in Henderson's
General Partners.
As discussed in Note 5, on February 27, 1996, HWFP, Inc. redeemed
its 50% limited partnership interest in the Marina Venture in return for a
$225,000 first mortgage secured by the marina property. As a result of this
redemption, HPP 1990's limited partnership interest in the Marina Venture
was increased to 98% and HWDC received a 1% limited partnership interest
and maintained its 1% general partnership interest in the Marina Venture.
(5) Notes Payable and Subsequent Events
The Building Venture financed $6,350,000 of the purchase price of
the property by issuing a purchase money note to the seller, HWFP. HPP
1990 paid $1,000,000 of principal under this note in December 1990,
reducing the balance to $5,350,000 at December 31, 1990. During 1992, the
maturity date of the note was extended until January 2, 1994. In
consideration for extending the maturity date of the note, the Building
Venture was required to pay $150,000 to the holder of the purchase money
note (the Lender) on the earlier of January 2, 1994 or a refinancing of the
purchase money note. In April 1994, the Lender extended the maturity date
on the note until December 31, 1995 and added the $150,000 extension fee to
the outstanding principal balance of the note along with unpaid interest
totalling $89,168 on the note (for the period March 16, 1994 through May
15, 1994) and unpaid interest on the extension fee totaling $1,250 (for the
period April 16, 1994 through May15, 1994). Interest through the date of
refinancing (see below) was due monthly on the new principal balance of the
note at the annual rate of 10%. In addition, the Lender required the
Building Venture to establish a real estate tax escrow account (Tax Escrow)
which was being funded on a monthly
(5) Notes Payable and Subsequent Events (Continued)
basis through the date of refinancing. The balance of the Tax Escrow at
December 31, 1995 was $48,930. The note was secured by the property, rents
and assignment of leases.
In conjunction with issuing a purchase money note to the seller,
the Building Venture entered into a contingent purchase price promissory
note with the seller for $1,250,000. Payment on the note was contingent
upon the cash flow (as defined) generated from the future sale of apartment
units in the Building Venture. The note was unsecured, bore no interest,
and had no maturity date. As discussed below, the Building Venture paid
off the contingent purchase price promissory note for $109,582 on February
27, 1996.
On February 27, 1996, HPP 1990 obtained a $6,000,000 deed of
trust note with a third party lender which provided funds for the Building
Venture to refinance the outstanding balance of the seller financed
purchase money note totaling $5,590,418, to pay $109,582 to the seller in
release of the contingent purchase price promissory note, and to purchase
in part three condominium units and parking spaces owned by unrelated
parties for an aggregate purchase price of $314,800 (see Note 4). The deed
of trust note bears interest at 7.85% and requires monthly principal and
interest payments in the amount of $49,628 commencing in April 1996. The
note amortizes over a 20 year schedule and all remaining unpaid principal
and interest is due in March 2006. Under the deed of trust note, the
lender has the option with six months written notice to call amounts
outstanding under the deed of trust note at the end of ten years or anytime
thereafter. The deed of trust note is secured by the Building Venture's
property, rents and assignment of leases and is guaranteed by the Building
Venture.
On February 27, 1996, HPP 1990, HWDC and HWFP, Inc. entered into
the First Amendment to the Third Amended and Restated Agreement of Limited
Partnership of Henderson's Wharf Marina, L.P. by which HWFP, Inc. redeemed
its 50% limited partnership interest in the Marina Venture in return for a
$225,000 first mortgage note secured by the marina property. The note
bears interest at 7.50%, matures in March 2086, and requires monthly
principal and interest payments in the amount of $2,086 commencing April
1996. As a result of the redemption of HWFP's interest, HPP 1990's limited
partnership interest in the Marina Venture increased to 98% and HWDC
received a 1% limited partnership interest and maintained its 1% general
partnership interest in the Marina Venture.
(6) Transactions With Related Parties and Commitments
On February 1, 1991, the Building Venture entered into a long
term property management and brokerage agreement (Management Agreement), an
inn lease (Inn Lease), and a consulting agreement (Consulting Agreement)
with HMI. The Management Agreement originally expired on December 31, 1993
and the Inn Lease originally expired on December 31, 1995. The Management
Agreement required the payment of management fees to HMI equal to 6% of
gross rental receipts, as defined in the agreement. The Management
Agreement also required the payment of a one time lease up fee for leasing
residential units during the lease-up phase equal to one month's rent. The
Inn Lease required the payments to HMI of 50% of the operating profit, as
defined in the agreement, relating to the 38 room inn. If the total
management fees earned based on the inn's gross rental receipts were less
than $75,000 for any one year, then the Inn Lease required a payment to
HMI equal to the difference between actual management fees paid and
$75,000. The Management Agreement and Inn Lease were terminated by the
Building Venture on July 31, 1993. Management fees paid to HMI totaled
$82,766 in 1993. No amounts were paid under the Inn Lease during 1993.
The Consulting Agreement, which expired on December 31, 1991,
required the Building Venture to pay HMI a $15,000 refinancing fee upon the
closing of any refinancing of the existing Building Venture's financing.
The Consulting Agreement also required the Building Venture to pay HMI an
incentive fee equal to 1% of the gross sales proceeds resulting from the
sale of the building property to an unaffiliated third party buyer. These
commitments survive the December 31, 1991 expiration date of the Consulting
Agreement and the termination of all other agreements with HMI (see below).
The Building Venture paid the $15,000 refinancing fee to HMI in March 1996
as a result of refinancing its purchase price promissory note as discussed
in Note 5.
On January 1, 1992, the Marina Venture entered into a long term
Property Management Agreement with HMI. The agreement provided for payment
of management fees to HMI equal to 9% of the Gross Operating Revenues, as
defined in the agreement. Management fees paid to HMI for the Marina
Venture totaled $2,494 in 1993.
Effective July 31, 1993, the Venture's terminated their
respective Management Agreements and Inn Lease (the Contracts) with HMI. As
of December 31, 1993, HPP 1990 had not reached an agreement with HMI as to
whether any additional payments were due under the Contracts as a result of
the termination. Consequently, HPP 1990 was unable to reasonably estimate
amounts due to HMI, if any, and no liability was recorded as of December
31, 1993.
(6) Transactions With Related Parties and Commitments (Continued)
During October 1994, HPP 1990 and HMI agreed in principle to an
agreement whereby the parties would settle their differences to put to rest
all further controversy and to avoid substantial expense of burdensome and
protracted litigation. In January 1995, HPP 1990 entered into an agreement
on behalf of the Venture's to pay HMI contract termination settlement
payments (Settlement Payments) totaling $271,108 which was recorded during
the fourth quarter of 1994 and which was included in accrued expenses and
other liabilities as of December 31, 1994. The Settlement Payments
required an initial payment of $36,000 due on January 27, 1995 and require
monthly payments of $3,221 commencing September 1995 through the earlier of
September 2001 or the occurrence of certain events as defined in the
agreement. The Settlement Payments are secured by 100% of HPP 1990's
economic interest as a partner in the Venturers, as defined in the
agreements; net sales and refinancing proceeds; cash flow; return of
capital contributions; all of HPP 1990's cash and marketable securities in
excess of $150,000; and all of the Venturers' cash in excess of the greater
of $200,000 or reserves required by lenders. No distributions to the
partners of HPP 1990 are permitted until all Settlement Payments are paid
in full. As of December 31, 1995, unpaid Settlement Payments included in
accrued expenses and other liabilities totaled $222,224.
On August 23, 1993, the Ventures hired McKenna Management
Associates, Inc. (McKenna) as the independent onsite property management
company. The management agreement with McKenna originally expired in
August 1995 and was extended until October 31, 1995. The agreement
required the payment of $9,000 per month for the first year and $7,650 per
month for the second year from the Ventures.
On November 1, 1995, the Building and Marina Venture entered into
property management contracts with Claremont Management Corporation (CMC),
an unaffiliated Massachusetts corporation, to manage the apartment, inn and
marina operations. The property management contracts provide for payment
of management fees to CMC equal to 4% and 4.5% of apartment and inn gross
receipts, as defined, respectively, and 9% of marina gross receipts, as
defined. The agreements expire on June 30, 1997, and are automatically
extended on a year to year basis unless otherwise terminated as provided
for in the agreements. A condition of the agreements requires the Ventures
to maintain with CMC, for the benefit of the Ventures, operating cash and
contingency reserves of $190,000 and $70,000, respectively. To facilitate
the transition of property management and through an arrangement with CMC,
McKenna continued to provide management services to the apartment, inn and
marina operations through December 31, 1995.
Management fees paid to McKenna and CMC by the Ventures totaled
$94,841, $102,600 and $38,334 for the years ended 1995, 1994 and 1993,
respectively.
(6) Transactions With Related Parties and Commitments (Continued)
On January 1, 1992, HPP 1990 hired Hillcrest Asset Management,
Inc. (Hillcrest), a company related to HMI through common ownership, to
assist the general partner in providing accounting, asset management and
investor services. Hillcrest provided such services for a management fee
plus reimbursement of all its costs of providing such services. This
contract expired on June 30, 1993 and was not renewed. For the period
January 1, 1993 to June 30, 1993, management fees and expense
reimbursements totaled $6,000 and $54,469, respectively.
On July 1, 1993, HPP 1990 engaged Portfolio Advisory Services,
Inc. (PAS), a Massachusetts corporation, which is related to BHP II through
certain common ownership and management, to provide accounting, asset
management and investor services. The original contract was for one year
and was extended through September 30, 1995. PAS received no fee for its
services, however it was reimbursed for all operating costs of providing
these services. Expense reimbursements to PAS for the period January 1,
1995 through September 30, 1995, for the year ended December 31, 1994, and
for the period July 1, 1993 to December 31, 1993, totaled $65,903 $46,063,
and $24,964, respectively.
On October 1, 1995, HPP 1990 engaged CMC to provide accounting,
asset management and investor services. CMC provides such services for an
annual management fee of $38,400, plus reimbursement of all its costs of
providing these services. The initial term of the agreement expires on
June 30, 1997, and is automatically extended on a year to year basis unless
terminated as provided for in the agreement. For the period October 1,
1995 to December 31, 1995, CMC received management fees of $9,600 and
expense reimbursement totaling $40,336.
On November 1, 1995, the third party lender who eventually
provided financing to HPP 1990 in February 1996, issued a commitment letter
to provide the aforementioned financing. The third pary lender earned a
loan placement fee of $90,000 which was recorded at closing of the
financing on February 27, 1996.
(7) Fair Value of Financial Investments
The carrying amounts of cash, escrow deposits, accrued expenses
and other liabilities, and security deposits approximate their fair values
due to their short maturities. The fair value of the Building Venture's
note payable is equal to its carrying amount based on the refinancing at
the principal amount outstanding that occurred subsequent to year end. All
financial statements are held for non-trading purposes.
Independent Auditors' Report on Accompanying Information
--------------------------------------------------------
The Partners
Historic Preservation Properties 1990
L.P. Tax Credit Fund
Quincy, Massachusetts
We have audited, in accordance with generally accepted auditing
standards, the consolidated financial statements of Historic Preservation
Properties 1990 L.P. Tax Credit Fund as of December 31, 1995 and 1994, and
for each of the years in the three year period ended December 31, 1995
included in this Form 10-K and have issued our report hereon dated March 7,
1996. Our audits were made for the purpose of forming an opinion on the
1995 and 1994 basic consolidated financial statements taken as a whole.
The supplemental schedule is the responsibility of the Partnership's
management and is presented for the purposes of complying with the
Securities and Exchange Commission's rules and is not part of the basic
consolidated financial statements. The information included in this
schedule has been subjected to the auditing procedures applied in the audit
of the basic consolidated financial statements, and in our opinion fairly
states in all material respects the financial data required to be set forth
therein in relation to the basic consolidated financial statements as a
whole.
Lefkowitz, Garfinkel, Champi & DeRienzo, P.C.
Providence, Rhode Island
March 7, 1996
<TABLE>
HISTORIC PRESERVATION PROPERTIES 1990 L.P.TAX CREDIT FUND
SCHEDULE III
REAL ESTATE & ACCUMULATED DEPRECIATION
DECEMBER 31, 1995
(IN THOUSANDS)
<CAPTION>
Cost Capitalized
Initial Costs Subseq to Acquis Gross Amts (Note 6)
------------------------- -------------------- -------------------------
(Note 5) Building Building Accumul
Description and Encum- Improve- Improve- Carrying Improve- Total Decprec
Ownership % brances Land ments ments Costs Land ments (Note 2) (Note 3)
- -------------------------------------------------------------------------------------------
Resid Building/Inn
Henderson's Wharf
L/P Baltimore, Md
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
99.9% $5,590 $ 97 $ 6,715 $ 7,671 $350 $ 97 $14,736 $ 14,833 $1,821
Marina
L/P Baltimore, Md
49% (Note 5) 0 1,187 0 87 79 387 87 474 135
------ ------- ------- ------ ----- ------- ------- -------- ------
$5,590 $ 1,284 $ 6,715 $7,758 $ 429 $ 484 $14,823 $ 15,307 $1,956
====== ======= ======= ====== ===== ======= ======= ======== ======
<CAPTION>
Date of Date Deprec
Constr or Interest Life
Rehabil Acquired (years)
--------- -------- -------
<S> <C> <C> <C>
Residential Bldg/Inn 9/90 7/20/90 40
Marina n/a 7/20/90 40
</TABLE>
Note 1: The aggregate cost of each property on a tax basis net
of the reduction due to the rehabilitation tax credit at
December 31 are as follows:
1995 1994 1993
Henderson's Wharf Baltimore $ 14,281 $ 14,281 $ 14,281
Henderson's Wharf Marina 527 527 527
-------- -------- --------
Total $ 14,808 $ 14,808 $ 14,808
======== ======== ========
Note 2: The changes in total costs of land, building and improvements to
the years ended December 31, 1995, 1994, and 1993 are as follows:
1995 1994 1993
Balance at the beg of period $ 15,307 $ 15,295 $ 15,295
Additions:
Land,Bldg & improvements 0 12 12
-------- -------- --------
$ 15,307 $ 15,307 $ 15,307
======== ======== ========
Note 3: The changes in accumulated depreciation for the period ended
December 31 are as follows:
1995 1994 1993
Balance at beginning of period $ 1,554 $ 1,152 $ 750
Depreciation during the year
Buildings and Improvements 402 402 402
-------- -------- -------
$ 1,956 $ 1,554 $ 1,152
======== ======== =======
Note 4: This schedule excludes furniture and equipment with a cost of
$964,000 and $950,000 and accumulated depreciation of $618,000 and
$481,000 at December 31, 1995 and 1994, respectively.
Note 5: In 1994, the Lender added $150,000 of unpaid extension fees and
approximately $90,000 of unpaid interest to the original
principal amount of Henderson's Wharf Baltimore Limited
Partnership's purchase money note.
Note 6: The Partnership has provided for a reserve for realization of
Marina land and improvements in the amount of $879,000 net
of accumulated depreciation of $34,000, based on fair market
determined by independent appraisal and priority distribution
of proceeds from capital transactions as provided for in The
Third Amended and Restated Agreement of Limited Partnership.
ASSET MANAGEMENT AGREEMENT
THIS ASSET MANAGEMENT AGREEMENT (the "Agreement") is made and
entered into as of October 1, 1995, by and among HISTORIC PRESERVATION
PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership ("HPP 1987"),
HISTORIC PRESERVATION PROPERTIES 1988 LIMITED PARTNERSHIP, a Delaware
limited partnership ("HPP 1988"), HISTORIC PRESERVATION PROPERTIES 1989
LIMITED PARTNERSHIP, a Delaware limited partnership ("HPP 1989"), HISTORIC
PRESERVATION PROPERTIES 1990 L.P. TAX CREDIT FUND, a Delaware limited
partnership ("HPP 1990") and CLAREMONT MANAGEMENT CORPORATION, a
Massachusetts corporation ("Claremont").
RECITALS
A. HPP 1987, HPP 1988, HPP 1989 and HPP 1990 are sometimes individually
referred to herein as an "HPP Partnership" and collectively referred to as the
"HPP Partnerships."
B. The HPP Partnerships were formed to organized and invest in certain
joint ventures (the "Project Partnerships") which own real properties (the
"Properties") which qualify for the rehabilitation tax credit under Section
48 of the Internal Revenue Code of 1986, as amended (the "Code").
C. The general partner of HPP 1987 is Boston Historic Partners Limited
Partnership, a Massachusetts limited partnership ("BHP"). The business of
HPP 1987 is governed by its Amended and Restated Limited Partnership
Agreement dated as of May 15, 1987 (the "HPP 1987 Partnership Agreement").
HPP 1987 owns an interest in each of the Project Partnerships listed on
Exhibit A attached hereto.
D. The general partner of HPP 1988 is BHP. The business of HPP 1988 is
governed by its Amended and Restated Limited Partnership Agreement dated as
of February 24, 1988 (the "HPP 1988 Partnership Agreement"). HPP 1988 owns
an interest in each of the Project Partnerships listed on Exhibit B attached
hereto.
E. The general partner of HPP 1989 is BHP. The business of HPP 1989 is
governed by its Amended and Restated Limited Partnership Agreement dated as
of December 19, 1988 (the "HPP 1989 Partnership Agreement"). HPP 1989 owns
an interest in each of the Project Partnerships and the property listed on
Exhibit C attached hereto.
F. The general partner of HPP 1990 is Boston Historic Partners II Limited
Partnership, a Massachusetts limited partnership ("BHP II"). The business of
HPP 1990 is governed by its Amended and Restated Limited Partnership
Agreement dated as of May 30, 1990 (the "HPP 1990 Partnership Agreement").
HPP 1990 owns an interest in each of the Project Partnerships listed on
Exhibit D attached hereto.
G. The HPP 1987 Partnership Agreement, HPP 1988 Partnership Agreement,
HPP 1989 Partnership Agreement and HPP 1990 Partnership Agreement are sometimes
individually referred to as an "HPP Partnership Agreement" and collectively
referred to as the "HPP Partnership Agreements."
H. Each of the HPP Partnerships desire to engage Claremont to manage
certain of the business and affairs of the HPP Partnerships and provide the
services set forth in this Agreement on the terms and conditions hereinafter
set forth.
I. Claremont desires to perform such services on the terms and
conditions hereinafter set forth.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
Section 1. Engagement of Claremont.
Each HPP Partnership hereby engages and designate Claremont as the
manager of certain of the business affairs of the HPP Partnerships as more
fully set forth herein. Claremont hereby accepts such engagement and
designation and hereby agrees to perform its obligations under this Agreement
in a businesslike and professional manner. Claremont shall at all times act
only at the specific direction of BHP or BHP II. Every act performed by
Claremont or any agent or employee of Claremont pursuant to the authority
granted by this Agreement shall be done as an independent contractor on
behalf of the HPP Partnerships and all obligations or expenses incurred
hereunder shall be for the account of and at the expense of the HPP
Partnerships, except as otherwise specifically provided hereunder.
Section 2. Duties of Claremont.
2.1 Duties. It shall be the obligation of Claremont to perform the
following duties on behalf of HPP Partnerships (the "Services"):
(a) Asset Management Services. Claremont shall assist BHP and BHP II
in monitoring the operations of the Properties to the extent specifically
directed by BHP and BHP II from time to time and shall periodically meet as
reasonably requested with representatives of BHP and BHP II to discuss
current property operations. Unless otherwise explicitly directed by BHP or
BHP II in writing, a representative of Claremont will visit and meet with the
independent third party property management company, where applicable, those
properties (the "Properties") indicated on Exhibits A through D, at least
once a year so long as such Properties are owned by an HPP Partnership or a
Project Partnership having an HPP Partnership as a partner. A representative
of Claremont will visit any other properties from time to time owned by an
HPP Partnership of a Project Partnership only on an as-needed basis as
specifically requested in writing by BHP or BHP II.
(b) Accounting Services. Claremont will assist BHP and BHP II in
maintaining all accounting records for the HPP Partnerships and
preparing work paper packages and quarterly and annual financial statements
for the HPP Partnerships as applicable, assist BHP and BHP II in the
preparation of tax returns and other reports to investors as applicable.
Claremont shall assist BHP and BHP II in keeping books and records relating
to the HPP Partnerships in accordance with generally accepted accounting
principles, uniformly and consistently applied from year to year, take all
reasonable steps to assist the HPP Partnerships in keeping records of all
transactions, make available for inspection by BHP and BHP II, at all
reasonable times the books and records relating to the HPP Partnerships, and
furnish such information concerning the HPP Partnerships to such persons as
BHP and BHP II may, in writing, reasonably request. In addition, Claremont
will assist BHP and BHP II in preparing and filing all reports required by
the Securities and Exchange Commission, including those items required by
Section 8.4 of each of the HPP 89 and HPP 90 Partnership Agreements. HPP 87
and HPP 88 do not file with the SEC based upon a hardship exemption but they
do provide investors and brokers with a complete unaudited Annual Report.
(c) Investor Services. Claremont will assist BHP and BHP II in
the preparation and distribution of (i) quarterly and annual reports to the
investors in HPP90 Partnership, annual reports for HPP 87, HPP 88, and HPP
89. (ii) the annual form K-1 that enables the investors to file their
respective tax returns, and (iii) responding to and serving investors and
their related broker/dealer and representatives as required. HPP 89 will
also provide copies of the quarterly 10-Q upon request. Copies of the above
correspondences shall be distributed to Brokers of Record and the
DueDiligence officers of selling broker dealer firms consistent with prior
levels of service.
(d) Personnel.In performing Services, Claremont will utilize its
staff and make available to the assignment, professional, competent
individuals who can effectively perform the Services at a level anticipated
by both Claremont and HPP. All employees shall be employees of Claremont,
but are subject to reimbursement pursuant to Section 3.2.
(e) Office Space. Claremont will provide allocable office space
for its personnel as may be necessary to perform the Services. The HPP
Partnerships hereby agree to pay the amount equal to allocable rent changes
as set forth in the operating budget.
(f) Support Staff. Claremont will provide or arrange for the
provision of appropriate office support to perform the Services, including
secretarial staff and office equipment, salaries of employees and other
general overhead of Claremont, costs of accounting, statistical or
bookkeeping services and computing on accounting equipment, travel,
telephone communications and other general and administrative expenses. All
costs are to be reimbursed pursuant to Section 3.2.
(g) Cooperation by HPP. The HPP Partnerships shall deliver to
Claremont copies of all documents in the possession of, or available to, the
HPP Partnerships which relate to the HPP Partnerships and/or the financing,
operation, management and leasing of each Property. The HPP Partnerships
acknowledge that the Services provided by Claremont will be based in large
part on information received from the HPP Partnerships. Claremont shall be
entitled to assume that all such information (including, without limitation,
financial statements and other financial data) received from the HPP
Partnerships shall be complete and accurate, and that such information will
not contain, or omit to contain, any statement of material fact known by the
HPP Partnerships to be false or misleading. Claremont will not (and shall
have no obligation to the HPP Partnerships to) undertake to make an
independent verification of any such information unless specifically
requested to do so by the HPP Partnerships in writing. The HPP Partnerships
hereby represent to Claremont that no information furnished or to be
furnished by the HPP Partnerships hereunder or in connection with the
consulting services to be provided by Claremont hereunder, contains or will
contain any untrue statement of a material fact, or omits or will omit to
state a material fact necessary to make such information not misleading.
The HPP Partnerships hereby agree that they have an affirmative obligation
hereunder to disclose any material facts necessary to enable Claremont to
provide its Services hereunder.
2.2 Amount of Time, Etc., Required of the Designated Personnel. The
parties acknowledge that the officers, directors and employees of Claremont
may engage in significant real estate, financial and securities-related
businesses during the term of this Agreement in addition to those
contemplated by this Agreement. Some of these activities may be competitive
with the activities of the HPP Partnerships. The HPP Partnerships hereby
consent to the officers, directors and employees of Claremont engaging in
such competitive activities. Under no circumstances will Claremont or any
of its personnel or agents be required to devote all of their time, resources or
personnel to the performance of this Agreement but only will be required to
devote such time, resources and personnel as is necessary for them to fulfill
their obligations hereunder.
Section 3.Compensation and Reimbursement.
3.1 Base Fee. The HPP Partnerships shall pay to Claremont a base
monthly fee of $1,600 per property for each Property owned directly or
indirectly by such HPP Partnership, as noted on Exhibits A, B, C or D
(the "Base Fee"). The Base Fee shall be due and payable in monthly
installments on the tenth business day of each month throughout the term of
this Agreement. Such fee shall be prorated for any partial year for which
services are performed hereunder. The Base Fee shall be in the following
amounts through June 30, 1996 and will be adjusted at that time to properly
reflect the number of properties/investee partnerships in place at that time
for the next reporting period, ending June 30, 1997:
HPP 1987 - $76,800
HPP 1988 - $76,800
HPP 1989 - $76,800
HPP 1990 - $38,400
3.2 Reimbursement. The HPP Partnerships shall pay the directly
allocable costs incurred by Claremont in providing the Services and the
costs and expenses set forth in the budget for the period October 1, 1995
thru June 30, 1996 attached hereto as Exhibit E (the "Budget"). The Budget
has been approved by the HPP Partnerships. A new budget will be prepared for
the period July 1, 1996 through June 30, 1997. Total charges which are more
than 10% in excess of the Budget must be approved by the HPP Partnerships in
advance. Payments to Claremont under this Section 3.2 will be made monthly.
All such costs shall be allocated to and paid by the HPP Partnerships as
follows for the period October 1, 1995 thru June 30, 1996 fiscal year:
HPP 1987 -18.41 %
HPP 1988 -28.22 %
HPP 1989 -16.37 %
HPP 1990 -37.00 %
These allocations will be reviewed and reset if appropriate for the following
fiscal year.Claremont shall provide a new annual budget by May 15, 1996 for
fiscal year July 1,1996 - June 30, 1997. Expense allocations may change from
year to year based on various factors. The July 1, 1996 - June 30, 1997
budget must be approved in advance by the HPP Partnerships by June 15, 1996.
3.3 Extra Services. If requested in writing from BHP or BHP II from
time to time, in addition to the Services, Claremont shall provide extra
services. Claremont shall bill the relevant HPP Partnership at the market
rate for such services rendered. Bills for such extra services will be
rendered and paid monthly.
3.4 Miscellaneous. This Agreement shall in no way obligate Claremont
or any employee of Claremont to pay any costs or expenses of any HPP
Partnership if monies are not available for the payment of such costs or
expenses from the income or reserves established by or on behalf of such HPP
Partnership. In addition, in the event that any of the fees or
reimbursements described in this Section 3 are not paid when due, the accrued
amounts owed to Claremont will bear interest at the Fleet prime rate until
paid.
3.5 Allocation of Costs. In the event that any services are performed
both for HPP Partnership and for other entities, Claremont will make such
allocation of the expense of such services among the HPP Partnership and such
other entities as Claremont determines is appropriate, any such allocation
made in good faith by Claremont shall be final and binding on the parties
hereto.
Section 4.Indemnification.
4.1 Indemnification by Claremont. Claremont agrees to defend and hold
the HPP Partnerships harmless from and indemnify the HPP Partnerships against
any and all liability, loss, damages, court costs and reasonable expenses,
including reasonable attorney's fees (hereinafter collectively referred to
as "Liabilities") which the HPP Partnerships may incur or suffer, which
Liabilities result from the gross negligence, bad faith, fraud or willful
misconduct on the part of Claremont, its employees, agents or others under
the direction or control of Claremont in performing its obligations under
this Agreement. For purposes of this Section 4.1 only, the term "HPP
Partnerships" shall also include any partner, officer, director, employee or
agent of the HPP Partnerships in the event any such person incurs or suffers
any such Liability as a result of such gross negligence, bad faith, fraud,
or willful misconduct. This Section 4.1 shall survive any termination of the
Agreement.
4.2 Indemnification by HPP Partnership. Claremont and the HPP
Partnerships hereby acknowledge that the acts of Claremont hereunder are
solely as agent for the HPP Partnerships and Claremont shall not be liable
to the HPP Partnerships or any other person or entity for any of its actions
or services provided hereunder in relation to the management and operation of
the Properties or otherwise. Each HPP Partnership agrees to defend and
hold Claremont harmless from and indemnify Claremont against any and all
liabilities which Claremont may incur or suffer as a result of any claim
against Claremont arising out of any action taken, omitted, or suffered by
it in good faith and in accordance with general of specific instructions
from the HPP Partnerships of the General Partners, except where such
liabilities result from the negligence, bad faith, fraud or willful
misconduct on the part of Claremont, its employees, agents or others under
the direction or control of Claremont. For purposes of this Section 4.2
only, the term "Claremont" shall also include any officer, director, employee
or agent of Claremont in the event any such person incurs or suffers any
such liability as a result of activities undertaken on behalf of or under
the direction or control of Claremont in connection with its services
performed for the HPP Partnerships. Such indemnification shall include
payment by the HPP Partnerships of all reasonable expenses and reasonable
legal fees incurred in defending a civil or criminal action or proceeding in
advance of the final disposition of such action or proceeding, receipt of an
undertaking by the party or person indemnified to repay such payment if it,
he or she shall be adjudicated to be not entitled to indemnification under
this Section 4.2; and provided further, that no indemnification shall be
provided for Claremont, its directors, officers, agents or employees with
resect to any matter as to which it shall have been finally adjudicated in
any action or proceeding that Insignia, its directors, officers, agents or
employees had acted with negligence, willful misconduct or fraud. This
Section 4.2 shall survive any termination of the Agreement.
Section 5.Term and Termination.
5.1 Term. The term of this Agreement shall commence on October 1, 1995
(the "Commencement Date"), and shall terminate on June 30, 1997, unless
previously terminated by the parties hereto pursuant to Section 5.2 or
extended pursuant to Section 5.3.
5.2 Termination. This agreement will expire on June 30, 1997, subject
to the following terms and conditions:
(a) If the HPP Partnerships elect to terminate this Agreement, they
must perform or cause to be performed all of the following items:
(i) Settlement to Claremont of all amounts due Claremont under
this Agreement by payment or documentation of a binding mutually agreed to
Note Agreement.
(ii) Effect the termination of any liability that Claremont
has entered into.
5.3 Extension. This Agreement shall automatically be extended from
year to year on the same terms and conditions unless terminated in
accordance with this Section 5 or unless any party provides notice no later
than sixty (60) days (May 1, 1997 for the initial term) in advance of the
expiration date of its intention not to extend the Agreement.
5.4 Breach. This Agreement may be terminated by the HPP Partnership or
Claremont upon the default by the other party of any of such other party's
material obligations hereunder; provided, however, that the non-defaulting
party shall have delivered to the other party a written notice specifying
such default in reasonable detail and that the defaulting party shall not
have cured such default within thirty (30) days after receipt of such notice.
5.5 Payment of Fees. Upon any termination pursuant to this Section 5,
Claremont shall have the right to receive any unpaid fees or unreimbursed
expense owed to it under Section 3. Any such amount shall be prorated on a
per diem basis from the date of the last monthly fee payment to the effective
date of any such termination. If any individual HPP Partnership is unable to
pay its share of liabilities because of a lack of cash, then such debts
shall be formally recognized in a binding mutually agreed to Note Agreement.
Section 6.Miscellaneous Provisions.
6.1 Notices. Any notice or communication hereunder must be in writing,
and shall be personally delivered or mailed postage prepaid, by registered or
certified mail, return receipt requested, and if given by registered or
certified mail same shall be deemed to have been given and received when
personally delivered or three (3) days after its mailing. Such notices or
communications shall be given to the parties hereto at their respective
following addresses:
If to the HPP Partnerships:c/o Boston Bay Capital, Inc.
One Liberty Square
Boston, MA 02109
Attn: Terrence P. Sullivan
If to Claremont: Charles M. Moran, Jr.
Claremont Management Corporation
Batterymarch Park III
Quincy, MA 02169
with a copy to: Sherburne, Powers and Needham
One Beacon Street
Boston, MA 02108
Attn: William Machen, Esq.
James E. McDermott, Esq.
Any party hereto may at any time by giving ten (10) days' written notice to
the other party hereto designate any other address in substitution of the
foregoing address to which such notice or communication shall be given.
6.2 Severability. If any term, covenant, or condition of this
Agreement or the application thereof to any person or circumstance shall, to
any extent, be invalid or unenforceable, the remainder of this Agreement or
the application of such term, covenant or condition to persons or
circumstances other than those to which it is held invalid or unenforceable,
shall not be affected thereby, and each term, covenant or condition of this
Agreement or such other documents shall be valid and shall be enforced to the
fullest extent permitted by law.
6.3 Applicable Law. This Agreement shall be governed and construed in
accordance with the law as of the Commonwealth of Massachusetts.
6.4 Successors and Assigns. No party hereto may assign any of its
rights or duties hereunder except with the prior written consent of the other
parties.
6.5 Captions. Captions in this Agreement are inserted for convenience
or reference only and do not define, describe or limit the scope or intent of
this Agreement or any of the terms hereof.
6.6 No Partnership. Nothing contained in this Agreement or in the
relationship of the HPP Partnerships and Claremont shall be deemed to
constitute a partnership, joint venture or any other relationship and
Claremont shall at all times be deemed an independent contractor for purposes
of this Agreement.
6.7 No Assignment. Claremont may not assign or in any way voluntarily
transfer this Agreement without the prior written approval of BHP and BHP II.
6.8 Modification or Amendment. This Agreement (including the exhibits
hereto) constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof, supersedes all prior agreements between
the parties relating to the matters contained herein and may not be modified,
waived or terminated orally and may only be amended by an agreement in
writing signed by the parties hereto.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
HISTORIC PRESERVATION PROPERTIES
LIMITED PARTNERSHIP, a Delaware
limited partnership, by its general partner,
BOSTON HISTORIC PARTNERS
LIMITED PARTNERSHIP, a
Massachusetts limited partnership, by its
general partners
PORTFOLIO ADVISORY SERVICES, INC., a
Massachusetts corporation
By
Terrence P. Sullivan, President
By
Terrence P. Sullivan, General Partner
HISTORIC PRESERVATION PROPERTIES
1988 LIMITED PARTNERSHIP, a
Delaware limited partnership, by its
general partner, BOSTON HISTORIC
PARTNERS LIMITED PARTNERSHIP, a
Massachusetts limited partnership, by its
general partners
PORTFOLIO ADVISORY SERVICES, INC., a
Massachusetts corporation
By
Terrence P. Sullivan, President
By
Terrence P. Sullivan, General Partner
HISTORIC PRESERVATION PROPERTIES
1989 LIMITED PARTNERSHIP, a
Delaware limited partnership, by its
general partner, BOSTON HISTORIC
PARTNERS LIMITED PARTNERSHIP, a
Massachusetts limited partnership, by its
general partners
PORTFOLIO ADVISORY SERVICES, INC. a
Massachusetts corporation
By
Terrence P. Sullivan, President
By
Terrence P. Sullivan, General Partner
HISTORIC PRESERVATION PROPERTIES
1990 L.P.TAX CREDIT FUND, a
Delaware limited partnership, by its
general partner, BOSTON HISTORIC
PARTNERS II LIMITED
PARTNERSHIP, a Massachusetts limited
partnership, by its general partners
PORTFOLIO ADVISORY SERVICES II, INC.,
a Massachusetts corporation
By
Terrence P. Sullivan, President
By
Terrence P. Sullivan, General Partner
BOSTON HISTORIC PARTNERS II LIMITED
PARTNERSHIP, a Massachusetts limited
partnership, by its general partner, BHP II
ADVISORS LIMITED PARTNERSHIP,
by its general partners
PORTFOLIO ADVISORY SERVICES II, INC.,
a Massachusetts corporation
By
Terrence P. Sullivan, President
By
Terrence P. Sullivan, General Partner
CLAREMONT MANAGEMENT CORPORATION
a Massachusetts Corporation
By
Patrick Carney, Chairman
By
Charles M. Moran, President
Exhibit A
LIST OF PROPERTIES - HPP 1987
Name of Project Partnership Name of Project Location
1027 Arch Street Associates Pitcairn Building Philadelphia,
PA
Limited Partnership
432 Julia Street Associates Gallery Row New Orleans, LA
Limited Partnership
Ceresota Mill Limited Ceresota Mill Minneapolis, MN
Partnership
Locke Mill Plaza Associates Locke Mill Plaza Concord, NC
Limited Partnership<PAGE>
Exhibit B
LIST OF PROPERTIES - HPP 1988
Name of Project Partnership Name of Project Location
Union Station Associates Union Station Providence, RI
330 Julia Street Associates The Rotunda New Orleans, LA
Limited Partnership
New Bedford Historic Stores CWT Building New Bedford, MA
Associates Limited Partnership
Coastline Associates Limited Coastline Center Wilmington, NC
Exhibit C
LIST OF PROPERTIES - HPP 1989
Name of Project Partnership Name of Project Location
Historic Preservation PropertiesThe Cosmopolitan St. Paul, MN
1989 L.P. Building
Jenkins Court Associates Jenkins Court Jenkintown,
PA
Limited Partnership
Portland Lost Associates Honeyman Hardware Portland, OR
Limited Partnership Lofts
402 Julia Street Associates The Lofts New Orleans, LA
Limited Partnership
Exhibit B
LIST OF PROPERTIES - HPP 1990
Name of Project Partnership Name of Project Location
Henderson's Wharf Baltimore, Henderson's Wharf Baltimore, MD
L.P. (Inn/Apartments)
Henderson's Wharf Marina, Henderson's Wharf Baltimore, MD
L.P. Marina
MANAGEMENT AGREEMENT
This Agreement is made this 1st day of November
1995, by and between Henderson's Wharf
Baltimore, L.P. (the "Owner") and Claremont
Management Corporation (the "Agent").
Section 1 - APPOINTMENT OF MANAGING AGENT
1.1 APPOINTMENT OF MANAGING ACCEPTANCE
Owner hereby appoints Agent as sole and
exclusive agent of Owner to lease and
manage the property described in paragraph
1.2 upon the terms and conditions provided
herein. Agent accepts the appointment and
agrees to furnish the services of its
organization for the leasing and
management of the Premises; and Owner
agrees to pay all expenses in connection
with those services.
1.2 DESCRIPTION OF PREMISE
The property to be managed by Agent under
this Agreement (the "Premises") is known
as Henderson's Wharf located at 1000
Fell Street, Baltimore, MD, consisting of
the land, building, and other improvements
described as 128 units of residential
rental in the state of Maryland.
1.3 TERM
The terms of the Agreement shall be for an
initial period of 20 months (the "initial
term") from the 1st day of November 1995,
to including the 30th day of June 1997;
and thereafter shall be automatically
renewed from year to year unless
terminated as provided in sections 21 or
27 herein. Each of said one-year renewal
periods is referred to as a "term year".
1.4 MANAGEMENT OFFICE
Owner shall provide adequate space on the
Premises for a management office. This
office can be shared with other
properties. Owner shall pay all expenses
related to such office, including, but not
limited to, furnishings, equipment,
postage and office supplies, electricity
and other utilities, and telephone. All
costs to be prorated to appropriate
properties.
1.5 APARTMENT FOR ON-SITE STAFF
Owner shall provide a suitable
apartment(s) on the Premises, if deemed
appropriate by mutual consent of both
parties, for the use of an on-site manager
and/or a resident janitor and their
families, rent free, except that such
resident staff shall pay for heat and
utilities in the same manner as other
tenants. The specific apartment(s) shall
be the Owner's choice.
Section 2 - Bank Accounts
The various bank accounts established
under this Agreement shall at all times be
established in Owner's name but under
Agent's control. Agent's and Owner's
designees shall be the only parties
authorized to draw upon such accounts. No
amounts deposited in any accounts
established under this Agreement shall in
any event be commingled with any other
funds of Agent.
2.1 OPERATING (AND/OR) RESERVE ACCOUNT(S)
Agent shall establish a separate
account(s) known as the Henderson's Wharf
Baltimore L.P. Apartments Operating
(and/or) Reserve Account(s), separate and
apart from Agent's corporate accounts, for
the deposit of receipts collected as
described herein, in a bank or other
institution whose deposits are insured by
the federal government. Such depository
shall be selected by the Agent upon the
consent of the Owner. However, Agent
shall not be held liable in the event of
bankruptcy or failure of a depository.
Funds in the Operating (and/or) Reserve
Account(s) remain the property of Owner
subject to disbursement of expenses by
Agent as described in the Agreement.
2.1.1 INITIAL DEPOSIT AND CONTINGENCY
RESERVE
Immediately upon commencement of this
Agreement, Owner shall remit to Agent the
sum $135,000 to be deposited in the
Operating (and/or) Reserve Account(s) as
an initial deposit representing the
estimated disbursements to be made in the
first month following the commencement of
this Agreement, plus an additional sum of
$50,000 as a contingency reserve. If this
contingency reserve is drawn down, then
they shall be replenished from operations
as soon as economically feasible. Owner
and Agent shall review the amount of the
contingency reserve from time to time and
shall agree in writing on a new
contingency reserve amount when such is
required.
2.2 SECURITY DEPOSIT ACCOUNT
Agent shall, if required by law, maintain
a separate interest bearing account for
tenant security deposits and advance
rentals. Such account shall be maintained
in accordance with applicable state or
local laws, if any.
2.3 FIDELITY BOND
The Agent will furnish, at its own
expense, a fidelity bond in the principal
sum of $1,000,000, which is at least equal
to the gross potential income for two
months and is conditioned to protect the
Owner and the Mortgagee against
misappropriation of funds of the Premises
by the Agent and its employees. The Agent
will obtain a bond of like kind to cover
the on-site personnel expressed in Section
9.1 and it shall be paid for from Premises
income. The other terms and conditions of
the bond, and the surety thereon, will be
subject to approval of the Owner and the
Mortgagee.
Section 3 - COLLECTION OF RENTS AND OTHER
RECEIPTS
3.1 AGENT'S AUTHORITY
Agent shall collect (and give receipts
for, if necessary) all rents, charges and
other amounts receivable on Owner's
account in connection with the management
and operation of the Premises. Such
receipts (except tenants' security
deposits and advance rentals, which shall
be handled as specified in paragraphs 2.2
and 3.3 hereof; and special charges, which
shall be handled as specified in paragraph
3.2 hereof) shall be deposited in the
Operating (and/or) Reserve Account(s)
maintained by Agent for the Premises.
3.2 SPECIAL CHARGES
If permitted by applicable law, Agent may
collect from tenants any or all of the
following: and administrative charge for
late payment of rent, a charge for
returned or non-negotiable checks, a
credit report fee, an administrative
charge and/or commission for subleasing.
3.3 SECURITY DEPOSITS
Agent shall collect, deposit, and disburse
tenants' security deposits in accordance
with the terms of each tenant's lease.
Agent shall pay from operations tenants
interest upon such security deposits only
if required by law to do so. Agent shall
comply with all applicable state or local
laws concerning the responsibility for
security deposits and interest, if any.
Section 4 - DISBURSEMENT FROM OPERATING
(AND/OR) RESERVE ACCOUNT(S)
4.1 OPERATING EXPENSES
From the Operating (and/or) Reserve
Account(s), Agent is hereby authorized to
pay or reimburse itself for all expenses
and costs of operating the Premises in
accordance with approved annual budget
under Section 6.2 and for all other sums
due Agent under this Agreement, including
Agent's compensation under section 17.
4.2 DEBT SERVICE
Owner shall give Agent advance written
notice of at least 10 days if Owner
desires Agent to make any additional
monthly or recurring payments (such as
mortgage indebtedness, general taxes, or
special assessments, or fire, steam
boiler, or other insurance premiums) out
of the proceeds from the Premises. If
Owner notifies Agent to make such payments
after the beginning of the term of this
Agreement, Agent shall have the authority
to name a new contingency, and Owner shall
maintain this new contingency reserve
amount at all times in the Operating
(and/or) Reserve Account(s).
4.3 NET PROCEEDS
To the extent that funds are available,
and after maintaining the cash contingency
reserve amount as specified in paragraph
2.1.1, Agent shall transmit cash balances
to Owner periodically, as follows. Such
periodic cash balances shall be remitted
to the following person(s), in the
percentage(s) specified, address(es)
shown: as directed from time to time by
Owner.
Section 5 - AGENT NOT REQUIRED TO ADVANCE FUNDS
In the event the balance in the Operating
(and/or) Reserve Account(s) is at any time
insufficient to pay disbursements due and
payable under paragraphs 4.1, 4.2 and 6.2.
Owner shall immediately upon notice, remit
to Agent sufficient funds to cover the
deficiency and replenish the contingency
reserve. In no event shall Agent be
required to use its own funds to pay such
disbursements. Nor shall Agent be
required to advance any monies to Owner,
to the Security Deposit Account, or to the
Operating (and/or) Reserve Account(s).
If Agent elects to advance any money in
connection with the Premises to pay any
expenses for Owner, such advances shall be
considered a loan subject to repayment
with interest, and Owner hereby agrees to
reimburse Agent, including interest as
provided in paragraph 17.7 and hereby
authorizes Agent to deduct such amounts
from any monies due Owner.
Section 6 - FINANCIAL AND OTHER REPORTS
6.1 REPORTING REQUIREMENTS
By the 20th day of each month, Agent will
provide to the Owner the following
schedules for the preceding month, which
include, but are not limited to: balance
sheet, income statement with comparisons
to budget, general ledger, rent roll, bank
statements and cash reconciliations, aged
listing of accounts receivables, listing
of prepaids, additions to fixed assets
over $500, intercompany reconciliation,
listing of accruals and other prepaids,
tenant security deposit listing, and cash
flow statement. In addition, Agent shall,
on a mutually acceptable schedule, prepare
and submit to Owner such other reports as
are agreed on by both parties.
6.2 BUDGETS
Annual operating budgets for the Premises
will be approved by the Owner. Except as
permitted under Section 10.1 below, annual
disbursements for each type of operating
expenses itemized in the budget shall not
materially exceed the amount authorized by
the approved budget without prior consent
of the Owner. The Agent will prepare a
recommended operating budget for each
fiscal year beginning during the term of
this Agreement, and will submit the same
to the Owner at least forty-five (45) days
before the beginning of the fiscal year.
The Owner will promptly inform the Agent
of any changes incorporated in the
approved budget, and the Agent will keep
the Owner informed of any anticipated
deviation from the receipts or
disbursements stated in the approved
budget.
6.3 OWNER'S RIGHT TO AUDIT
Owner shall have the right to request
periodic audits of all applicable accounts
managed by Agent, and the cost of such
audit(s) shall be paid by Owner.
6.4 TAX ASSESSMENTS
Agent will inform Owner of changes in the
amount of real or personal property tax
assessments and assist Owner in compiling
all necessary information in connection
with any contest or appeal of any
assessments.
Section 7 - ADVERTISING
Agent is authorized to advertise the
Premises or portions thereof for rent
using periodicals, signs, plans,
brochures, or displays, or such other
means as Agent may deem proper and
advisable and in accordance with Section
6.2. Agent is authorized to place signs
on the Premises advertising the Premises
for rent, provided such signs comply with
applicable laws. The cost of such
advertising shall be paid out of the
Operating (and/or) Reserve Account(s).
All advertising shall make clear that
Agent is the manager and NOT the Owner of
the Premises. Newspaper ads that share
space with other properties managed by the
Agent shall be prorated on a reasonable
basis.
Section 8 - LEASING AND RENTING
8.1 AGENT'S AUTHORITY TO LEASE PREMISES
Agent shall use all reasonable efforts to
keep the Premises rented by procuring
tenants for the Premises. Agent is
authorized to negotiate, prepare, and
execute all leases, including all renewals
and extensions of leases (and expansions
of space in the Premises, if applicable)
and to cancel and modify existing leases.
Agent shall execute all leases as Agent
for the Owner. All costs of leasing shall
be paid out of the Operating (and/or)
Reserve Account(s). No lease shall be in
excess of two year(s) without written
approval of Owner. The form of the lease
shall be agreed upon by Owner and Agent.
8.2 NO OTHER RENTAL AGENT
During the time of this Agreement. Owner
shall not authorize any other person,
firm, or corporation to negotiate or act
as leasing or rental agent with respect to
any leases for space in the Premises.
Owner agrees to promptly forward all
inquiries about leases to Agent.
8.3 RENTAL RATES
Agent, with the consent of the Owner, is
authorized to establish and change or
revise all rents, fees, or deposits, and
any other charges chargeable with respect
to the Premises.
8.4 ENFORCEMENT OF LEASES
Agent is authorized to institute, in
Owner's name, all legal actions or
proceedings for the enforcement of any
lease term, for the collection of rent or
other income from the Premises or for the
evicting or dispossessing of tenants or
other persons from the Premises. Agent is
authorized to sign and serve such notices
as Agent deems necessary for lease
enforcement, including the collection of
rent or other income. Agent is
authorized, when expedient, to settle,
compromise, and release such legal actions
or suits or reinstate such tenancies. Any
monies for such settlements paid out by
Agent shall not exceed $5,000 without
prior approval by Owner. Attorney's fees,
filing fees, court costs, and other
necessary expenses incurred in connection
with such actions and not recovered from
tenants shall be paid out of the Operating
(and/or) Reserve Account(s) or reimbursed
directly to Agent by Owner. Agent may
select the attorney of its choice to
handle such litigation upon the advise and
consent of Owner.
Section 9 - EMPLOYEES
9.1 AGENT'S AUTHORITY TO HIRE
Agent is authorized to hire, supervise,
discharge, and pay all servants,
employees, contractors or other personnel
necessary to be employed in the
management, maintenance, and operation of
the Premises in accordance with the
approved budget mentioned in Section 6.2.
All employees shall be deemed employees of
the Agent.
9.2 OWNER PAYS EMPLOYEE EXPENSES
All wages and fringe benefits payable to
such employees hired per paragraph 9.1
above, and all local, state, and federal
taxes and assessment (including but not
limited to Social Security taxes,
unemployment insurance and workers'
compensation insurance) incident to the
employment of such personnel, shall be
reimbursed to the Agent out of the
Operating (and/or) Reserve Account(s) in
accordance with the approved budget, and
shall be treated as operating expenses.
9.3 AGENT'S AUTHORITY TO FILE RETURNS
Agent shall do and perform all acts
required of an employer with respect to
the Premises and shall execute and file
all tax and other returns required under
the applicable federal, state and local
laws, regulations, and/or ordinances
governing employment, and all other
statements and reports pertaining to labor
employed in connection with the Premises
and under any similar federal or state law
now or hereafter in force. In connection
with such filing, Owner shall be
responsible for all amounts required to be
paid under the foregoing laws, and Agent
shall pay the same from the Operating
(and/or) Reserve Account(s). Any
penalties assessed to Owner and incurred
due to the negligence of Agent shall be
paid for by Agent.
9.4 WORKER'S COMPENSATION INSURANCE
Agent shall, at Owner's expense, maintain
worker's compensation insurance covering
all liability of the employer under
established worker's compensation laws.
9.5 HOLD HARMLESS, LABOR LAWS
Agent shall be responsible for compliance
with all applicable state or federal labor
laws. Owner shall indemnify, defend, and
save Agent harmless from all claims,
investigations, and suites, or from
Owner's action or failures to act, with
respect to any alleged or actual violation
of state or federal labor laws.
Conversely, Agent shall indemnify, defend
and save Owner harmless from all claims,
investigations, and suits, or from Agent's
actions or failure to act with respect to
any alleged or actual violations of state
or federal labor laws. Agent's or Owner's
obligation with respect to such
violation(s) shall include payment of all
settlements, judgments, damages,
liquidated damages, penalties,
forfeitures, back pay awards, court costs,
litigation expenses, and attorney's fees.
Section 10 - MAINTENANCE AND REPAIR
Agent is authorized to make or cause to be
made, through contracted services or
otherwise, all ordinary repairs and
replacements reasonably necessary to
preserve the Premises in its present
condition and for the operating efficiency
of the Premises, and all alterations
required to comply with lease
requirements, governmental regulations, or
insurance requirements. Agent is also
authorized to decorate the Premises and to
purchase or rent, on Owner's behalf, all
equipment, tools, appliances, materials,
maintenance, or operation of the Premises.
Such maintenance and decorating expenses
shall be made in accordance to approved
budget and shall be paid out of the
Operating (and/or) Reserve Account(s).
This section applies except where
decorating and/or maintenance are at
tenants' expense as stipulated in a lease.
10.1 APPROVAL FOR EXCEPTIONAL MAINTENANCE
EXPENSE
The expense to be incurred for any one
item of maintenance alteration,
refurbishing, or repair shall not exceed
the sum of $5,000 unless such expense is
specifically authorized by Owner or is
incurred under such circumstances as Agent
shall reasonable deem to be an emergency.
In an emergency where repairs are
immediately necessary for the preservation
and safety of the Premises, or to avoid
the suspension of any essential service to
the Premises, or to avoid danger to life
or property, or to comply with federal,
state, or local law, such emergency
repairs shall be made by Agent at Owner's
expense prior approval.
Section 11 - CONTRACTS, UTILITIES AND SERVICES
Agent is authorized to negotiate contracts
for non-recurring items of expense, not to
exceed $5,000, unless approved by Owner,
and to enter into agreements in Owner's
name for all necessary repairs,
maintenance, minor alterations, and
utility services. Agent shall, in Owner's
name and at Owner's expense, make
contracts on Owner's behalf for
electricity, gas, telephone, fuel, or
water, and such other services as Agent
shall deem necessary or prudent for the
operation of the Premises. All utility
deposits shall be the Owner's
responsibility, except that Agent may pay
same from the Operating (and/or) Reserve
Account(s) at Owner's request.
Section 12 - RELATIONSHIP OF AGENT TO OWNER
The relationship of the parties to this
Agreement shall be that of Principal and
Agent, and all duties to be performed by
Agent under this Agreement shall be for
and on behalf of Owner, in Owner's name
and for Owner's account. In taking any
under the Agreement, Agent shall be acting
only as Agent for Owner, and nothing in
this Agreement shall be construed as
creating a partnership, joint venture, or
any other relationship between the parties
to this Agreement except that of Principal
and Agent, or as requiring Agent to bear
any portion of losses arising out of or
connected with the ownership or operation
of the Premises. Nor shall Agent at any
time during the period of this Agreement
to be considered a direct employee of
Owner. Neither party shall have the owner
to bind or obligate the other except as
expressly set forth in this Agreement
except that Agent is authorized to act
with such additional authority and power
as may be necessary to carry out the
spirit and intent of this Agreement.
Section 13 - SAVE HARMLESS
The Owner will indemnify the Agent
harmless against and hold the Agent
harmless from and against any liabilities,
damages, costs and expenses (including
reasonable attorney's fees) sustained or
incurred for injury to any person or
property in, about, and in conjunction
with the buildings, unless such injury
shall be caused by the Agent's own
negligence or willful misconduct; and any
liability, damages, penalties, costs and
expenses (including reasonable attorney's
fees) statutory or otherwise, for all acts
performed by the Agent in accordance with
the terms of this Agreement or pursuant to
the instructions of the Owner, provided,
in each of the foregoing instances, that
the Agent promptly advises the Owner of
its receipt of information concerning any
such injury and the amount of any such
liability, damages, penalties, costs and
expenses.
The Agent will indemnify the Owner
harmless against and hold the Owner
harmless from and against; any
liabilities, damages, costs and expenses
(including reasonable attorney's fees)
sustained or incurred for injury to any
person or property in, about, and in
conjunction with the buildings caused by
the Agent's own negligence or willful
misconduct; and any liability, damages,
penalties, costs and expenses (including
reasonable attorney's fees) statutory or
otherwise, for all acts performed by the
Agent not in accordance with the terms of
this Agreement or not pursuant to the
instructions of the Owners.
Section 14 - LIABILITY INSURANCE
Owner and Agent shall obtain and keep in
force adequate insurance against physical
damage (e.g. fire with extended coverage
endorsement, boiler and machinery, etc.)
and against liability for loss, damage, or
injury to property or persons which might
arise out of the occupancy, management,
operation, or maintenance of the Premises.
The amounts and types of insurance shall
be acceptable to both Owner and Agent, and
any deductible required under each
insurance policies shall be Owner's
expense. Agent shall be covered as
additional insured on all liability
insurance maintained with respect to the
Premises. Liability insurance shall be
adequate to protect the interest of both
Owner and Agent and in form, substance,
and amounts reasonable satisfactory to
Agent. Owner agrees to furnish Agent with
certificates evidencing such insurance or
with duplicate copies of such policies
within 10 days of the execution of this
Agreement. If Owner fails to do so, Agent
may but shall not be obligated to place
said insurance and charge the cost thereof
to the Operating (and/or) Reserve
Account(s). Said policies shall provide
that notice of default or cancellation
shall be sent to Agent as well as Owner
and shall require a minimum of 30 days
written notice to Agent before any
cancellation of or changes to said
policies.
Section 15 - AGENT ASSUMES NO LIABILITY
Agent assumes no liability whatsoever for
any acts or omissions of Owner or any
previous owners of the Premises, or any
previous management or other agent of
either. Agent assumes no liability for
any failure of or default by any tenant
in the payment of any rent or other
charges due Owner or in the performance
of any obligations owned by any tenant to
Owner pursuant to any lease or otherwise.
Nor does Agent assume any liability for
previously unknown violations or
environmental or other regulations which
may become unknown during the period of
this Agreement is in effect. Any such
regulatory violations or hazards
discovered by Agent shall be brought to
the attention of the Owner in writing and
Owner shall promptly cure them.
Section 16 - OWNER RESPONSIBLE FOR ALL EXPENSES
OF LITIGATION
Owner shall reimburse all reasonable
expenses incurred by Agent, including but
not limited to, attorneys' fee and Agent's
costs and time, any liability, fines,
penalties or the like, in connection with
any claim, proceeding, or suit involving
an alleged violation by Agent or Owner, or
both, of any law pertaining to fair
employment, fair credit reporting,
environmental protection, rent control,
taxes, or fair housing, including, but not
limited to, any law prohibiting or making
illegal discrimination on the basis or
race, sex, creed, color, religion,
national origin, or mental or physical
handicap, provided, however, that Owner
shall not be responsible to Agent for any
such expenses in the event Agent is
finally adjudged to have personally, and
not in a representative capacity, violated
any such law. Nothing contained in this
Agreement shall obligate Agent to employ
legal counsel to represent Owner in any
such proceeding or suit.
16.1 FEES FOR LEGAL ADVICE
Owner shall pay reasonable expenses
incurred by Agent in obtaining legal
advice regarding compliance with any law
affecting the Premises or activities
related to them. If such expenditure also
benefits others for whom Agent in this
Agreement acts in a similar capacity,
Owner agrees to pay an apportioned amount
of such expense.
Section 17 - AGENT'S COMPENSATION AND EXPENSES
As compensation for the services provided
by Agent under this Agreement (and
exclusive of reimbursement of expenses to
which Agent is entitled hereunder). Owner
shall pay Agent as follows:
17.1 FOR MANAGEMENT SERVICES
The greater of (i) $ N/A per month or (ii)
4% of the total monthly gross receipts
from the premises, payable by the 10th day
of the current month for the duration of
this Agreement. Payments due Agent for
Periods of less than a calendar month
shall be prorated over the number of days
for which compensation is due. The
percentage amount set forth in (ii) above
shall be based upon the total gross
receipts from the premises during the
preceding month.
The term "gross receipts" shall be deemed
to include all collected rents and other
income and charges from the normal
operation of the Premises, including, but
not limited to, rents, parking fees,
laundry income, forfeited security
deposits, pet deposits, other fees and
deposits, special charges listed in
paragraph 3.2, or excess interest on
security deposits (from paragraph 3.3),
and other miscellaneous income. Gross
receipts shall NOT be deemed to include
the value of units provided to on-site
staff nor income arising out of the sale
of real property or settlement of fire or
other casualty losses and items of a
similar nature.
17.2 FOR APARTMENT LEASING
N/A.
17.3 FOR COMMERCIAL LEASING
N/A.
17.4 FOR MODERNIZATION
(REHABILITATION/CONSTRUCTION)
N/A.
17.5 FOR FIRE RESTORATION
10% of total restoration if Claremont
Management Corporation acts as general
contractor.
17.6 FOR OTHER ITEMS OF MUTUAL AGREEMENT
To be determined if situation arises.
17.7 INTEREST ON UNPAID SUMS
Any sums due Agent under any provisions of
this Agreement, and not paid within 30
days after such sums have become due,
shall bear interest at the rate of the
Fleet prime rate.
Section 18 - REPRESENTATIONS
Owner represents and warrants: That Owner
has full power and authority to enter this
Agreement; that there are no written or
oral agreements affecting the Premises
other than tenant leases, copies of which
have been furnished to Agent; that there
are no recorded easements, restrictions,
reservations, or rights of way which
adversely affect the use of the Premises
for the purposes intended under this
Agreement; that to the best of Owner's
knowledge, the property is zoned for the
intended use; that all leasing and other
permits for the operation of the Premises
have been secured and are current; that
the building and its been secured and are
current; that the building and its
construction and operation do not violate
any applicable statutes, laws, ordinances,
rules regulations, orders, or the like
(including, but not limited to, those
pertaining to hazardous or toxic
substances); that the building does not
contain any asbestos, urea, formaldehyde,
radon, or other toxic or hazardous
substance; and that no unsafe conditions
exists.
Section 19 - STRUCTURAL CHANGES
Owner expressly withholds from Agent any
power or authority to make any structural
changes in any building, or to make any
other major alterations or additions in or
to any such building or to any equipment
to any such building, or to incur any
expense chargeable to Owner other than
expenses related to exercising the express
powers vested in Agent through this
Agreement, without the prior written
consent of the following person or his
designee:
Terrence Sullivan
Boston Bay Capital, Inc.
One Liberty Square
Boston, MA 02109
However, such emergency repairs as may be
required because of danger to life or
property, or which are immediately
necessary for the preservation and safety
of the Premises or the safety of the
tenants and occupants thereof, or required
to avoid the suspension of any necessary
service to the Premises, or to comply with
any applicable federal, state, or local
laws, regulations, or ordinances, shall be
authorized pursuant to paragraph 10.1 of
this Agreement, and Agent shall notify
Owner appropriately.
Section 20 - BUILDING COMPLIANCE
Agent does not assume and is given no
responsibility for compliance of the
Premises or any building thereon or any
equipment therein with the requirements of
any building codes or with any statue,
ordinance, law, or regulation or any
governmental body or of any public
authority or official thereof having
jurisdiction, except to notify Owner
promptly or forward to Owner promptly any
complaints, warnings, notices, or summons
received by Agent relating to such
matters. Owner represents that to the
best of Owner's knowledge the Premises and
all such equipment comply with all such
requirements, and Owner authorizes Agent
to disclose the ownership of the Premises
to any such officials and agrees to
indemnify and hold Agent, its
representatives, servants, and employees,
harmless of and from all loss, cost,
expense, and liability whatsoever which
may be imposed by reason of any present or
future violation or alleged violation of
such laws, ordinances, statues, or
regulations.
Section 21 - TERMINATION
21.1 TERMINATION BY EITHER PARTY
This Agreement may be terminated by either
Owner or Agent, with or without cause, at
the end of the initial term or of any
following term year upon the giving of 30
days' written notice prior to the end of
said initial term or following terming
year.
21.2 TERMINATION FOR CAUSE
Notwithstanding the foregoing, the
Agreement shall terminate in any event,
and all obligations of the parties
hereunder shall cease (except as to
liabilities or obligations which have
accrued or arisen prior to such
termination, or which accrue pursuant to
paragraph 21.3 as a result of such
termination, and obligations to insure and
indemnify), upon the occurrence of any of
the following events:
a. BREACH OF AGREEMENT - Thirty (30)
days after the receipt of notice by either
party to the other specifying in detail a
material breach of this Agreement, if such
breach has not been cured within said
thirty (30) day period; or if such breach
is of a nature that it cannot be cured
within said (30) day period but can not be
cured with a reasonable time thereafter,
if efforts to cure such breach have not
commenced or/and such efforts are not
proceeding and being continued diligently
both during and after such thirty (30) day
period prior to the breach being cured.
HOWEVER, the breach of any obligation of
either party hereunder to pay any monies
to the other party under the terms of this
Agreement shall be deemed to be curable
within thirty (30) days.
21.2 TERMINATION FOR CAUSE (Cont.)
b. FAILURE TO ACT, ETC. - In the event
that any insurance required of Owner is not
maintained without any lapse, or it is
alleged or charged that the Premises, or
any portion thereof, or any act or failure
to act by Owner, its agent and employees
with respect to the Premises, fails to
comply with any law or regulations, or any
order or ruling of any public authority,
and Agent, in its sole discretion,
considers that the action or position of
Owner or its representatives with respect
thereto may result in damage or liability
to Agent, or disciplinary proceeding with
respect to Agent's license. Agent shall
have the right to terminate this Agreement
at any time by written notice to Owner of
its election to do so, which termination
shall be effective upon the service of
such notice. Such termination shall not
release the indemnities of Owner set forth
herein.
c. EXCESSIVE DAMAGE - Upon the
destruction of or substantial damage to
the Premises by any cause, or the taking
of all or a substantial portion of the
Premise of the Premises by eminent domain,
in either case making it impossible or
impracticable to continue operation of the
Premises.
d. INADEQUATE INSURANCE - If Agent deems
that the liability insurance obtained by
Owner per section 14 is not reasonable
satisfactory to protect its interest under
this Agreement, and if Owner and Agent
cannot agree as to adequate insurance.
Agent shall have the right to cancel this
Agreement upon the service of notice to
Owner.
21.3 TERMINATION COMPENSATION
If (i) Owner terminates this Agreement
before the end of the initial term or any
subsequent term year as provided in
paragraph 21.1 above for any reason other
than for a breach by Agent under paragraph
21.2 (a) above, or if (ii) Agent
terminates this Agreement for a breach by
Owner under paragraph 21.2 (a) above or
pursuant to the provisions of paragraph
21.2 (b) or 21.2 (d) above, then in any
such event, Owner shall be obligated to
pay Agent as liquidated damages an amount
equal to the management fee earned by
Agent, as determined under paragraph 17.1
above, for the calendar month immediately
preceding the month in which the notice of
termination is given to Agent or to Owner,
multiplied by the number of months and/or
portions thereof remaining from the
termination date until the end of the
initial term or term year in which the
termination occurred. Such damages, plus
any amounts accruing to Agent prior to
such termination, shall be due and payable
upon termination of this Agreement. To
the extent that funds are available, such
sums shall be payable from the Operating
(and/or) Reserve Account(s). Any amount
due in excess of the funds available from
the Operating (and/or) Reserve Account(s)
shall be paid by Owner to Agent upon
demand.
21.4 OWNER RESPONSIBLE FOR PAYMENTS
Upon Termination or withdrawal from this
Agreement, Owner shall assume the
obligations of any contract or outstanding
bill executed by Agent under this
Agreement for and on behalf of Owner and
responsibility for payment of all unpaid
bills. In addition, Owner shall furnish
Agent security, in an amount satisfactory
to Agent, against any obligations or
liabilities with Agent may have properly
incurred on Owner's behalf under this
Agreement.
Agent may withhold funds for ninety (90)
days after the end of the month in which
this Agreement is terminated, in order to
pay bills previously incurred by not yet
invoiced and to close accounts. Agent
shall deliver to Owner, within ninety (90)
days after the end of the month in which
this Agreement is terminated, any balance
of monies due Owner or of tenant security
deposits, or both which were held by Agent
with respect to the Premises, as well as a
final accounting reflecting the balance of
income and expenses with respect to the
Premises as of the date of termination or
withdrawal, and all records, contracts,
leases, receipts for deposits, and other
papers or documents which pertain to the
Premises.
21.5 SALE OF PREMISES
In the event that the Premises are sold by
Owner during the period of this Agreement,
Agent may, upon agreement with Owner and
in accordance with Owner's partnership
agreement, obtain rights of representation
in the sale as stated in a specific sales
agreement to be negotiated separately.
Upon transfer of ownership, this Agreement
shall terminate by mutual consent of Owner
and Agent under the term and conditions
set forth below:
The agreement shall automatically
terminate upon sale of premises to a
bona fide Third Party without
penalty. A minimum of sixty days
notice is required.
Section 22 - INDEMNIFICATION SURVIVES
TERMINATION
All representatives and warranties of the
parties contained herein shall survive the
termination of this Agreement. All
provisions of this Agreement that require
Owner to have insured or to defend,
reimburse, or indemnify Agent (including,
but not limited to, paragraphs, 2.1, 2.3,
5, 8.4, 9.2, 13, 14, 15, 16, 17.7, 20,
21.3 and 21.4) shall survive any
termination; and if Agent is or becomes
involved in any proceedings or litigation
by reason of having been Owner's Agent,
such provisions shall apply as if this
Agreement were still in effect.
Section 23 - HEADINGS
All headings and subheadings employed
within this Agreement and in the
accompanying List of Provisions are
inserted only for convenience and ease of
reference and are not to be considered in
the construction or interpretation of any
provision of this Agreement.
Section 24 - FORCE MAJEUR
Any delays in the performance of any
obligation of Agent under this Agreement
shall be excused to the extent that such
delays are caused by wars, national
emergencies, natural disasters, strikes,
labor disputes, utility failures,
governmental regulations, riots, adverse
weather, and other similar causes not
within the control of Agent, and any time
periods required for performance shall be
extended accordingly.
Section 25 - COMPLETE AGREEMENT
This Agreement, including any specified
attachments, constitutes the entire
agreement between Owner and Agent with
respect to the management and operation of
the Premises and supersedes and replaces
any and all previous management agreements
entered into or/and negotiated between
Owner and Agent relating to the Premises
covered by this Agreement. No change to
this Agreement shall be valid unless made
by supplemental written agreement executed
and approved by Owner and Agent. Except
as otherwise provided herein, any and all
amendments, additions, or deletions to
this Agreement shall be null and void
unless approved by Owner and Agent in
writing. Each party to this Agreement
hereby acknowledges and agrees that the
other party has made no warranties,
representations, covenants, or agreements,
express or implied, to such party, other
than those expressly set forth herein, and
that each party, in entering into and
executing this Agreement, has relied upon
no warranties, representations, covenants,
or agreement, express or implied, to such
party, other than those expressly set
forth herein.
Section 26 - RIGHTS CUMULATIVE; NO WAIVER
No right or remedy herein conferred upon
or reserved to either of the parties to
this Agreement is extended to be exclusive
of any other right or remedy, and each and
every right and remedy shall be cumulative
and in addition to any other right or
remedy given under this Agreement or now
or thereafter legally existing upon the
occurrence of an event or default under
this Agreement. The failure of either
party to this Agreement to insist at any
time upon the strict observance or
performance of any of the provisions of
this Agreement, or to exercise any right
or remedy as provided in this Agreement,
shall not impair any such right or remedy
with respect to subsequent defaults.
Every right and remedy given by this
Agreement to the parties to it may be
exercised from time to time and as often
as may be deemed expedient by those
parties.
Section 27 - APPLICABLE LAW AND PARTIAL
INVALIDITY
The Execution, interpretation, and
performance of this Agreement shall in all
respects be controlled and governed by the
laws of the State of Massachusetts. If
any part of this Agreement shall be
declared invalid or unenforceable, Agent
shall have the option to terminate this
Agreement by notice to Owner.
Any notices, demands, consents, and report
necessary or provided for under this
Agreement shall be in writing and shall be
addressed as follows, or at such other
address as Owner and Agent individually
may specify hereafter in writing:
Agent: Claremont Management
Corporation
Batterymarch Park II
Quincy, MA 02169
ATTN: Charles M. Moran, Jr.
Owner: Henderson's Wharf Baltimore L.P.
c/o Boston Bay Capital, Inc.
One Liberty Square
Boston, MA 02109
ATTN: Terrence P. Sullivan
Such notice or other communication may be
mailed by United States registered or
certified mail, return receipt requested,
postage prepaid, and may be deposited in a
United States Post Office or a depository
for the receipt of mail regularly
maintained by the post office. Such
notices, demands, consents, and reports
may also be delivered by hand or by any
other receipted method or means permitted
by law. For purposes of this Agreement,
notices shall be deemed to have been
"given" or "delivered" upon personal
delivery thereof forty-eight (48) hours
after having been deposited in the United
States mails as provided herein.
Section 28 - AGREEMENT BINDING UPON SUCCESSORS
AND ASSIGNS
This Agreement shall be binding the
parties hereto and their respective
personal representatives, heirs,
administrators, executors, successors and
assigns.
SIGNATURES
IN WITNESS WHEREOF, the parties hereto
have affixed or caused to be affixed their
respective signatures this _________ day of
_______________ 1995.
Witnesses: Henderson's Wharf
Baltimore, L.P.
a Delaware Limited
Partnership ("Borrower")
By: Henderson's Wharf
Development Corporation.
a Delaware
Corporation, General Partner of
Henderson's
Wharf Baltimore, L.P.
__________________________ By:
_________________________________
Terrence P.
Sullivan, President
By: Historic
Preservation Properties 1990 L.P.
TAX CREDIT
FUND, a Delaware L.P., General
Partner of
Henderson's Wharf Baltimore, L.P.
By: Boston
Historic Partners II L.P., General
Partner of Historic Preservation Properties
1990 L.P. Tax
Credit Fund
By:
Portfolio Advisory Services II, Inc.
General
Partner of BHP II Advisors L.P.
___________________________ By:
____________________________
Terrence P. Sullivan, President of
Portfolio Advisory Services II, Inc.
___________________________ By:
_________________________________
Terrence
P. Sullivan, General Partner of
BHP II
Advisors L.P.
Agent:
Firm:
Claremont Management Corporation
___________________________
By: _______________________________
Charles
M. Moran, Jr., President
MANAGEMENT AGREEMENT
This Agreement is made this 1st day of November 1995, by
and between The Council of Unit Owners of the Residences
and Inn at Henderson's Wharf, A Condominium, Inc. (the
"Owner") and Claremont Management Corporation (the
"Agent").
Section 1 - APPOINTMENT OF MANAGING AGENT
1.1 APPOINTMENT OF MANAGING ACCEPTANCE
Owner hereby appoints Agent as sole and exclusive
agent of Owner to manage the property described in
paragraph 1.2 upon the terms and conditions provided
herein. Agent accepts the appointment and agrees to
furnish the services of its organization for the
management of the Premises; and Owner agrees to pay
all expenses in connection with those services.
1.2 DESCRIPTION OF PREMISE
The property to be managed by Agent under this
Agreement (the "Premises") is known as The Council
of Unit Owners of the Residences and Inn at
Henderson's Wharf, A Condominium, Inc., located at
1000 Fell Street, Baltimore, MD, consisting of the
land, building, and other improvements described as
137 residential units and a 38 room inn, all of
which constitute the condominium association in the
state of Maryland.
1.3 TERM
The terms of the Agreement shall be for an initial
period of 20 months (the "initial term") from the
1st day of November 1995, to including the 30th day
of June 1997; and thereafter shall be automatically
renewed from year to year unless terminated as
provided in sections 19 or 25 herein. Each of said
one-year renewal periods is referred to as a "term
year".
1.4 MANAGEMENT OFFICE
Owner shall provide adequate space on the Premises
for a management office. This office can be shared
with other properties. Owner shall pay all expenses
related to such office, including, but not limited
to, furnishings, equipment, postage and office
supplies, electricity and other utilities, and
telephone. All costs to be prorated to appropriate
properties.
Section 2 - Bank Accounts
The various bank accounts established under this
Agreement shall at all times be established in
Owner's name but under Agent's control. Agent's and
Owner's designees shall be the only parties
authorized to draw upon such accounts. No amounts
deposited in any accounts established under this
Agreement shall in any event be commingled with any
other funds of Agent.
2.1 OPERATING (AND/OR) RESERVE ACCOUNT(S)
Agent shall establish a separate account(s) known as
the Council of Unit Owners of the Residences and Inn
at Henderson's Wharf, a Condominium, Inc., Operating
(and/or) Reserve Account(s), separate and apart from
Agent's corporate accounts, for the deposit of
receipts collected as described herein, in a bank or
other institution whose deposits are insured by the
federal government. Such depository shall be
selected by the Agent upon the consent of the Owner.
However, Agent shall not be held liable in the event
of bankruptcy or failure of a depository. Funds in
the Operating (and/or) Reserve Account(s) remain the
property of Owner subject to disbursement of
expenses by Agent as described in the Agreement.
2.1.1 INITIAL DEPOSIT AND CONTINGENCY RESERVE
Within the first two weeks of the commencement of
this Agreement, Owner shall see that the Agent is
remitted the sum of $25,000 to be deposited in the
Operating (and/or) Reserve Account(s) as an initial
deposit representing the estimated disbursements to
be made in the first month following the
commencement of this Agreement, plus an additional
sum of $1,000 as a contingency reserve. If this
contingency reserve is drawn down, then they shall
be replenished from operations as soon as
economically feasible. Owner and Agent shall review
the amount of the contingency reserve from time to
time and shall agree in writing on a new contingency
reserve amount when such is required.
2.2 FIDELITY BOND
The Agent will furnish, at its own expense, a
fidelity bond in the principal sum of $1,000,000,
which is at least equal to the gross potential
income for two months and is conditioned to protect
the Owner and the Mortgagee against
misappropriation of funds of the Premises by the
Agent and its employees. The Agent will obtain a
bond of like kind to cover the on-site personnel
expressed in Section 7.1 and it shall be paid for
from Premises income. The other terms and
conditions of the bond, and the surety thereon, will
be subject to approval of the Owner and the
Mortgagee.
Section 3 - COLLECTION OF RENTS AND OTHER RECEIPTS
3.1 AGENT'S AUTHORITY
Agent shall collect (and give receipts for, if
necessary) all charges and other amounts receivable
on Owner's account in connection with the management
and operation of the Premises. Such receipts shall
be deposited in the Operating (and/or) Reserve
Account(s) maintained by Agent for the Premises.
3.2 SPECIAL CHARGES
If permitted by applicable law, Agent may collect
from owners any or all of the following: and
administrative charge for late payment of fees, a
charge for returned or non-negotiable checks, and
other administrative charges as required.
Section 4 - DISBURSEMENT FROM OPERATING (AND/OR) RESERVE
ACCOUNT(S)
4.1 OPERATING EXPENSES
From the Operating (and/or) Reserve Account(s),
Agent is hereby authorized to pay or reimburse
itself for all expenses and costs of operating the
Premises in accordance with approved annual budget
under Section 6.2 and for all other sums due Agent
under this Agreement, including Agent's compensation
under section 15.
4.2 RECURRING PAYMENTS
Owner shall give Agent advance written notice of at
least 10 days if Owner desires Agent to make any
additional monthly or recurring payments (such as
general taxes, or special assessments, or fire,
steam boiler, or other insurance premiums) out of
the proceeds from the Premises. If Owner notifies
Agent to make such payments after the beginning of
the term of this Agreement, Agent shall have the
authority to name a new contingency, and Owner shall
maintain this new contingency reserve amount at all
times in the Operating (and/or) Reserve Account(s).
4.3 NET PROCEEDS
To the extent that funds are available, and after
maintaining the cash contingency reserve amount as
specified in paragraph 2.1.1, Agent shall transmit
cash balances to Owner periodically, as follows.
Such periodic cash balances shall be remitted to the
following person(s), in the percentage(s) specified,
address(es) shown: as directed from time to time by
Owner.
Section 5 - AGENT NOT REQUIRED TO ADVANCE FUNDS
In the event the balance in the Operating (and/or)
Reserve Account(s) is at any time insufficient to
pay disbursements due and payable under paragraphs
4.1, 4.2 and 6.2. Owner shall immediately upon
notice, remit to Agent sufficient funds to cover the
deficiency and replenish the contingency reserve.
In no event shall Agent be required to use its own
funds to pay such disbursements. Nor shall Agent be
required to advance any monies to Owner, or to the
Operating (and/or) Reserve Account(s).
If Agent elects to advance any money in connection
with the Premises to pay any expenses for Owner,
such advances shall be considered a loan subject to
repayment with interest, and Owner hereby agrees to
reimburse Agent, including interest as provided in
paragraph 15.4 and hereby authorizes Agent to deduct
such amounts from any monies due Owner.
Section 6 - FINANCIAL AND OTHER REPORTS
6.1 REPORTING REQUIREMENTS
By the 20th day of each month, Agent will provide to
the Owner the following schedules for the preceding
month, which include, but are not limited to:
balance sheet, income statement with comparisons to
budget, general ledger, rent roll, bank statements
and cash reconciliations, aged listing of accounts
receivables, listing of prepaids, additions to fixed
assets over $500, intercompany reconciliation,
listing of accruals and other prepaids, tenant
security deposit listing, and cash flow statement.
In addition, Agent shall, on a mutually acceptable
schedule, prepare and submit to Owner such other
reports as are agreed on by both parties.
6.2 BUDGETS
Annual operating budgets for the Premises will be
approved by the Owner. Except as permitted under
Section 8.1 below, annual disbursements for each
type of operating expenses itemized in the budget
shall not materially exceed the amount authorized by
the approved budget without prior consent of the
Owner. The Agent will prepare a recommended
operating budget for each fiscal year beginning
during the term of this Agreement, and will submit
the same to the Owner at least forty-five (45) days
before the beginning of the fiscal year. The Owner
will promptly inform the Agent of any changes
incorporated in the approved budget, and the Agent
will keep the Owner informed of any anticipated
deviation from the receipts or disbursements stated
in the approved budget.
6.3 OWNER'S RIGHT TO AUDIT
Owner shall have the right to request periodic
audits of all applicable accounts managed by Agent,
and the cost of such audit(s) shall be paid by
Owner.
Section 7 - EMPLOYEES
7.1 AGENT'S AUTHORITY TO HIRE
Agent is authorized to hire, supervise, discharge,
and pay all servants, employees, contractors or
other personnel necessary to be employed in the
management, maintenance, and operation of the
Premises in accordance with approved budget
mentioned in Section 6.2. All employees shall be
deemed employees of the Agent.
7.2 OWNER PAYS EMPLOYEE EXPENSES
All wages and fringe benefits payable to such
employees hired per paragraph 7.1 above, and all
local, state, and federal taxes and assessment
(including but not limited to Social Security taxes,
unemployment insurance and workers' compensation
insurance) incident to the employment of such
personnel, shall be reimbursed to the Agent out of
the Operating (and/or) Reserve Account(s) in
accordance with the approved budget and shall be
treated as operating expenses.
7.3 AGENT'S AUTHORITY TO FILE RETURNS
Agent shall do and perform all acts required of an
employer with respect to the Premises and shall
execute and file all tax and other returns required
under the applicable federal, state and local laws,
regulations, and/or ordinances governing employment,
and all other statements and reports pertaining to
labor employed in connection with the Premises and
under any similar federal or state law now or
hereafter in force. In connection with such filing,
Owner shall be responsible for all amounts required
to be paid under the foregoing laws, and Agent shall
pay the same from the Operating (and/or) Reserve
Account(s). Any penalties assessed to Owner and
incurred due to the negligence of Agent shall be
paid for by Agent.
7.4 WORKER'S COMPENSATION INSURANCE
Agent shall, at Owner's expense, maintain worker's
compensation insurance covering all liability of the
employer under established worker's compensation
laws.
7.5 HOLD HARMLESS, LABOR LAWS
Agent shall be responsible for compliance with all
applicable state or federal labor laws. Owner shall
indemnify, defend, and save Agent harmless from all
claims, investigations, and suites, or from Owner's
action or failures to act, with respect to any
alleged or actual violation of state or federal
labor laws. Conversely, Agent shall indemnify,
defend and save Owner harmless from all claims,
investigations, and suits, or from Agent's actions
or failure to act with respect to any alleged or
actual violations of state or federal labor laws.
Agent's or Owner's obligation with respect to such
violation(s) shall include payment of all
settlements, judgments, damages, liquidated damages,
penalties, forfeitures, back pay awards, court
costs, litigation expenses, and attorney's fees.
Section 8 - MAINTENANCE AND REPAIR
Agent is authorized to make or cause to be made,
through contracted services or otherwise, all
ordinary repairs and replacements reasonably
necessary to preserve the Premises in its present
condition and for the operating efficiency of the
Premises, and all alterations required to comply
with the condominium document requirements,
governmental regulations, or insurance requirements.
Agent is also authorized to decorate the Premises
and to purchase or rent, on Owner's behalf, all
equipment, tools, appliances, materials,
maintenance, or operation of the Premises. Such
maintenance and decorating expenses shall be paid
out of the Operating (and/or) Reserve Account(s).
8.1 APPROVAL FOR EXCEPTIONAL MAINTENANCE EXPENSE
The expense to be incurred for any one item of
maintenance alteration, refurbishing, or repair
shall not exceed the sum of $5,000 unless such
expense is specifically authorized by Owner or is
incurred under such circumstances as Agent shall
reasonable deem to be an emergency. In an emergency
where repairs are immediately necessary for the
preservation and safety of the Premises, or to avoid
the suspension of any essential service to the
Premises, or to avoid danger to life or property, or
to comply with federal, state, or local law, such
emergency repairs shall be made by Agent at Owner's
expense prior approval.
Section 9 - CONTRACTS, UTILITIES AND SERVICES
Agent is authorized to negotiate contracts for non-
recurring items of expense, not to exceed $5,000,
unless approved by Owner, and to enter into
agreements in Owner's name for all necessary
repairs, maintenance, minor alterations, and utility
services. Agent shall, in Owner's name and at
Owner's expense, make contracts on Owner's behalf
for electricity, gas, telephone, fuel, or water, and
such other services as Agent shall deem necessary or
prudent for the operation of the Premises. All
utility deposits shall be the Owner's
responsibility, except that Agent may pay same from
the Operating (and/or) Reserve Account(s) at Owner's
request.
Section 10 - RELATIONSHIP OF AGENT TO OWNER
The relationship of the parties to this Agreement
shall be that of Principal and Agent, and all duties
to be performed by Agent under this Agreement shall
be for and on behalf of Owner, in Owner's name and
for Owner's account. In taking any under the
Agreement, Agent shall be acting only as Agent for
Owner, and nothing in this Agreement shall be
construed as creating a partnership, joint venture,
or any other relationship between the parties to
this Agreement except that of Principal and Agent,
or as requiring Agent to bear any portion of losses
arising out of or connected with the ownership or
operation of the Premises. Nor shall Agent at any
time during the period of this Agreement to be
considered a direct employee of Owner. Neither
party shall have the owner to bind or obligate the
other except as expressly set forth in this
Agreement except that Agent is authorized to act
with such additional authority and power as may be
necessary to carry out the spirit and intent of this
Agreement.
Section 11 - SAVE HARMLESS
The Owner will indemnify the Agent harmless against
and hold the Agent harmless from and against any
liabilities, damages, costs and expenses (including
reasonable attorney's fees) sustained or incurred
for injury to any person or property in, about, and
in conjunction with the buildings, unless such
injury shall be caused by the Agent's own negligence
or willful misconduct; and any liability, damages,
penalties, costs and expenses (including reasonable
attorney's fees) statutory or otherwise, for all
acts performed by the Agent in accordance with the
terms of this Agreement or pursuant to the
instructions of the Owner, provided, in each of the
foregoing instances, that the Agent promptly advises
the Owner of its receipt of information concerning
any such injury and the amount of any such
liability, damages, penalties, costs and expenses.
The Agent will indemnify the Owner harmless against
and hold the Owner harmless from and against; any
liabilities, damages, costs and expenses (including
reasonable attorney's fees) sustained or incurred
for injury to any person or property in, about, and
in conjunction with the buildings caused by the
Agent's own negligence or willful misconduct; and
any liability, damages, penalties, costs and
expenses (including reasonable attorney's fees)
statutory or otherwise, for all acts performed by
the Agent not in accordance with the terms of this
Agreement or not pursuant to the instructions of the
Owners.
Section 12 - LIABILITY INSURANCE
Owner and Agent shall obtain and keep in force
adequate insurance against physical damage (e.g.
fire with extended coverage endorsement, boiler and
machinery, etc.) and against liability for loss,
damage, or injury to property or persons which might
arise out of the occupancy, management, operation,
or maintenance of the Premises. The amounts and
types of insurance shall be acceptable to both Owner
and Agent, and any deductible required under each
insurance policies shall be Owner's expense. Agent
shall be covered as additional insured on all
liability insurance maintained with respect to the
Premises. Liability insurance shall be adequate to
protect the interest of both Owner and Agent and in
form, substance, and amounts reasonable satisfactory
to Agent. Owner agrees to furnish Agent with
certificates evidencing such insurance or with
duplicate copies of such policies within 10 days of
the execution of this Agreement. If Owner fails to
do so, Agent may but shall not be obligated to place
said insurance and charge the cost thereof to the
Operating (and/or) Reserve Account(s) said policies
shall provide that notice of default or cancellation
shall be sent to Agent as well as Owner and shall
require a minimum of 30 days written notice to Agent
before any cancellation of or changes to said
policies.
Section 13 - AGENT ASSUMES NO LIABILITY
Agent assumes no liability whatsoever for any acts
or omissions of Owner or any previous owners of the
Premises, or any previous management or other agent
of either. Agent assumes no liability for any
failure of or default by any tenant in the payment
of any rent or other charges due Owner or in the
performance of any obligations owned by any tenant
to Owner pursuant to any lease or otherwise. Nor
does Agent assume any liability for previously
unknown violations or environmental or other
regulations which may become unknown during the
period of this Agreement is in effect. Any such
regulatory violations or hazards discovered by
Agent shall be brought to the attention of the
Owner in writing and Owner shall promptly cure
them.
Section 14 - OWNER RESPONSIBLE FOR ALL EXPENSES OF
LITIGATION
Owner shall reimburse all reasonable expenses
incurred by Agent, including but not limited to,
attorneys' fee and Agent's costs and time, any
liability, fines, penalties or the like, in
connection with any claim, proceeding, or suit
involving an alleged violation by Agent or Owner, or
both, of any law pertaining to fair employment, fair
credit reporting, environmental protection, rent
control, taxes, or fair housing, including, but not
limited to, any law prohibiting or making illegal
discrimination on the basis or race, sex, creed,
color, religion, national origin, or mental or
physical handicap, provided, however, that Owner
shall not be responsible to Agent for any such
expenses in the event Agent is finally adjudged to
have personally, and not in a representative
capacity, violated any such law. Nothing contained
in this Agreement shall obligate Agent to employ
legal counsel to represent Owner in any such
proceeding or suit.
14.1 FEES FOR LEGAL ADVICE
Owner shall pay reasonable expenses incurred by
Agent in obtaining legal advice regarding compliance
with any law affecting the Premises or activities
related to them. If such expenditure also benefits
others for whom Agent in this Agreement acts in a
similar capacity, Owner agrees to pay an apportioned
amount of such expense.
Section 15 - AGENT'S COMPENSATION AND EXPENSES
As compensation for the services provided by Agent
under this Agreement (and exclusive of reimbursement
of expenses to which Agent is entitled hereunder).
Owner shall pay Agent as follows:
15.1 FOR MANAGEMENT SERVICES
The sum of $850 per month to be paid on the first of
each month in advance.
15.2 FOR FIRE RESTORATION
10% of total restoration if Claremont Management
Corporation acts as general contractor.
15.3 FOR OTHER ITEMS OF MUTUAL AGREEMENT
To be determined if situation arises.
15.4 INTEREST ON UNPAID SUMS
Any sums due Agent under any provisions of this
Agreement, and not paid within 30 days after such
sums have become due, shall bear interest at the
rate of Fleet prime rate.
Section 16 - REPRESENTATIONS
Owner represents and warrants: That Owner has full
power and authority to enter this Agreement; that
there are no written or oral agreements affecting
the Premises other than tenant leases, copies of
which have been furnished to Agent; that there are
no recorded easements, restrictions, reservations,
or rights of way which adversely affect the use of
the Premises for the purposes intended under this
Agreement; that to the best of Owner's knowledge,
the property is zoned for the intended use; that all
leasing and other permits for the operation of the
Premises have been secured and are current; that the
building and its been secured and are current; that
the building and its construction and operation do
not violate any applicable statutes, laws,
ordinances, rules regulations, orders, or the like
(including, but not limited to, those pertaining to
hazardous or toxic substances); that the building
does not contain any asbestos, urea, formaldehyde,
radon, or other toxic or hazardous substance; and
that no unsafe conditions exists.
Section 17 - STRUCTURAL CHANGES
Owner expressly withholds from Agent any power or
authority to make any structural changes in any
building, or to make any other major alterations or
additions in or to any such building or to any
equipment to any such building, or to incur any
expense chargeable to Owner other than expenses
related to exercising the express powers vested in
Agent through this Agreement, without the prior
written consent of the following person or his
designee:
Terrence Sullivan
Boston Bay Capital, Inc.
One Liberty Square
Boston, MA 02109
However, such emergency repairs as may be required
because of danger to life or property, or which are
immediately necessary for the preservation and
safety of the Premises or the safety of the tenants
and occupants thereof, or required to avoid the
suspension of any necessary service to the Premises,
or to comply with any applicable federal, state, or
local laws, regulations, or ordinances, shall be
authorized pursuant to paragraph 8.1 of this
Agreement, and Agent shall notify Owner
appropriately.
Section 18 - BUILDING COMPLIANCE
Agent does not assume and is given no responsibility
for compliance of the Premises or any building
thereon or any equipment therein with the
requirements of any building codes or with any
statue, ordinance, law, or regulation or any
governmental body or of any public authority or
official thereof having jurisdiction, except to
notify Owner promptly or forward to Owner promptly
any complaints, warnings, notices, or summons
received by Agent relating to such matters. Owner
represents that to the best of Owner's knowledge the
Premises and all such equipment comply with all such
requirements, and Owner authorizes Agent to disclose
the ownership of the Premises to any such officials
and agrees to indemnify and hold Agent, its
representatives, servants, and employees, harmless
of and from all loss, cost, expense, and liability
whatsoever which may be imposed by reason of any
present or future violation or alleged violation of
such laws, ordinances, statues, or regulations.
Section 19 - TERMINATION
19.1 TERMINATION BY EITHER PARTY
This Agreement may be terminated by either Owner or
Agent, with or without cause, at the end of the
initial term or of any following term year upon the
giving of 30 days' written notice prior to the end
of said initial term or following terming year.
19.2 TERMINATION FOR CAUSE
Notwithstanding the foregoing, the Agreement shall
terminate in any event, and all obligations of the
parties hereunder shall cease (except as to
liabilities or obligations which have accrued or
arisen prior to such termination, or which accrue
pursuant to paragraph 19.3 as a result of such
termination, and obligations to insure and
indemnify), upon the occurrence of any of the
following events:
a. BREACH OF AGREEMENT - Thirty (30) days after
the receipt of notice by either party to the other
specifying in detail a material breach of this
Agreement, if such breach has not been cured within
said thirty (30) day period; or if such breach is of
a nature that it cannot be cured within said (30)
day period but can not be cured with a reasonable
time thereafter, if efforts to cure such breach have
not commenced or/and such efforts are not proceeding
and being continued diligently both during and after
such thirty (30) day period prior to the breach
being cured. HOWEVER, the breach of any obligation
of either party hereunder to pay any monies to the
other party under the terms of this Agreement shall
be deemed to be curable within thirty (30) days.
19.2 TERMINATION FOR CAUSE (Cont.)
b. FAILURE TO ACT, ETC. - In the event that any
insurance required of Owner is not
maintained without any lapse, or it is alleged or
charged that the Premises, or any portion thereof,
or any act or failure to act by Owner, its agent and
employees with respect to the Premises, fails to
comply with any law or regulations, or any order or
ruling of any public authority, and Agent, in its
sole discretion, considers that the action or
position of Owner or its representatives with
respect thereto may result in damage or liability to
Agent, or disciplinary proceeding with respect to
Agent's license. Agent shall have the right to
terminate this Agreement at any time by written
notice to Owner of its election to do so, which
termination shall be effective upon the service of
such notice. Such termination shall not release the
indemnities of Owner set forth herein.
c. EXCESSIVE DAMAGE - Upon the destruction of or
substantial damage to the Premises by any cause, or
the taking of all or a substantial portion of the
Premise of the Premises by eminent domain, in either
case making it impossible or impracticable to
continue operation of the Premises.
d. INADEQUATE INSURANCE - If Agent deems that the
liability insurance obtained by Owner per section 12
is not reasonable satisfactory to protect its
interest under this Agreement, and if Owner and
Agent cannot agree as to adequate insurance. Agent
shall have the right to cancel this Agreement upon
the service of notice to Owner.
19.3 TERMINATION COMPENSATION
If (i) Owner terminates this Agreement before the
end of the initial term or any subsequent term year
as provided in paragraph 19.1 above for any reason
other than for a breach by Agent under paragraph
19.2 (a) above, or if (ii) Agent terminates this
Agreement for a breach by Owner under paragraph 19.2
(a) above or pursuant to the provisions of paragraph
19.2 (b) or 19.2 (d) above, then in any such event,
Owner shall be obligated to pay Agent as liquidated
damages an amount equal to the management fee earned
by Agent, as determined under paragraph 15.1 above,
for the calendar month immediately preceding the
month in which the notice of termination is given to
Agent or to Owner, multiplied by the number of
months and/or portions thereof remaining from the
termination date until the end of the initial term
or term year in which the termination occurred.
Such damages, plus any amounts accruing to Agent
prior to such termination, shall be due and payable
upon termination of this Agreement. To the extent
that funds are available, such sums shall be payable
from the Operating (and/or) Reserve Account(s). Any
amount due in excess of the funds available from the
Operating (and/or) Reserve Account(s) shall be paid
by Owner to Agent upon demand.
19.4 OWNER RESPONSIBLE FOR PAYMENTS
Upon Termination or withdrawal from this Agreement,
Owner shall assume the obligations of any contract
or outstanding bill executed by Agent under this
Agreement for and on behalf of Owner and
responsibility for payment of all unpaid bills. In
addition, Owner shall furnish Agent security, in an
amount satisfactory to Agent, against any
obligations or liabilities with Agent may have
properly incurred on Owner's behalf under this
Agreement.
Agent may withhold funds for ninety (90) days after
the end of the month in which this Agreement is
terminated, in order to pay bills previously
incurred by not yet invoiced and to close accounts.
Agent shall deliver to Owner, within ninety (90)
days after the end of the month in which this
Agreement is terminated, any balance of monies due
Owner or of tenant security deposits, or both which
were held by Agent with respect to the Premises, as
well as a final accounting reflecting the balance of
income and expenses with respect to the Premises as
of the date of termination or withdrawal, and all
records, contracts, leases, receipts for deposits,
and other papers or documents which pertain to the
Premises.
Section 20 - INDEMNIFICATION SURVIVES TERMINATION
All representatives and warranties of the parties
contained herein shall survive the termination of
this Agreement. All provisions of this Agreement
that require Owner to have insured or to defend,
reimburse, or indemnify Agent (including, but not
limited to, paragraphs, 2.1, 2.2, 5, 7.2, 11, 12,
13, 14, 15.4, 18, 19.3 and 19.4) shall survive any
termination; and if Agent is or becomes involved in
any proceedings or litigation by reason of having
been Owner's Agent, such provisions shall apply as
if this Agreement were still in effect.
Section 21 - HEADINGS
All headings and subheadings employed within this
Agreement and in the accompanying List of Provisions
are inserted only for convenience and ease of
reference and are not to be considered in the
construction or interpretation of any provision of
this Agreement.
Section 22 - FORCE MAJEUR
Any delays in the performance of any obligation of
Agent under this Agreement shall be excused to the
extent that such delays are caused by wars, national
emergencies, natural disasters, strikes, labor
disputes, utility failures, governmental
regulations, riots, adverse weather, and other
similar causes not within the control of Agent, and
any time periods required for performance shall be
extended accordingly.
Section 23 - COMPLETE AGREEMENT
This Agreement, including any specified attachments,
constitutes the entire agreement between Owner and
Agent with respect to the management and operation
of the Premises and supersedes and replaces any and
all previous management agreements entered into
or/and negotiated between Owner and Agent relating
to the Premises covered by this Agreement. No
change to this Agreement shall be valid unless made
by supplemental written agreement executed and
approved by Owner and Agent. Except as otherwise
provided herein, any and all amendments, additions,
or deletions to this Agreement shall be null and
void unless approved by Owner and Agent in writing.
Each party to this Agreement hereby acknowledges and
agrees that the other party has made no warranties,
representations, covenants, or agreements, express
or implied, to such party, other than those
expressly set forth herein, and that each party, in
entering into and executing this Agreement, has
relied upon no warranties, representations,
covenants, or agreement, express or implied, to such
party, other than those expressly set forth herein.
Section 24 - RIGHTS CUMULATIVE; NO WAIVER
No right or remedy herein conferred upon or reserved
to either of the parties to this Agreement is
extended to be exclusive of any other right or
remedy, and each and every right and remedy shall be
cumulative and in addition to any other right or
remedy given under this Agreement or now or
thereafter legally existing upon the occurrence of
an event or default under this Agreement. The
failure of either party to this Agreement to insist
at any time upon the strict observance or
performance of any of the provisions of this
Agreement, or to exercise any right or remedy as
provided in this Agreement, shall not impair any
such right or remedy with respect to subsequent
defaults. Every right and remedy given by this
Agreement to the parties to it may be exercised from
time to time and as often as may be deemed expedient
by those parties.
Section 25 - APPLICABLE LAW AND PARTIAL INVALIDITY
The Execution, interpretation, and performance of
this Agreement shall in all respects be controlled
and governed by the laws of the State of
Massachusetts. If any part of this Agreement shall
be declared invalid or unenforceable, Agent shall
have the option to terminate this Agreement by
notice to Owner.
Any notices, demands, consents, and report necessary
or provided for under this Agreement shall be in
writing and shall be addressed as follows, or at
such other address as Owner and Agent individually
may specify hereafter in writing:
Agent: Claremont Management Corporation
Batterymarch Park II
Quincy, MA 02169
ATTN: Charles M. Moran, Jr.
Owner: The Council of Unit Owners of the
Residences and Inn at Henderson's Wharf, A
Condominium, Inc.
c/o Boston Bay Capital, Inc.
One Liberty Square
Boston, MA 02109
ATTN: Terrence P. Sullivan
Such notice or other communication may be mailed by
United States registered or certified mail, return
receipt requested, postage prepaid, and may be
deposited in a United States Post Office or a
depository for the receipt of mail regularly
maintained by the post office. Such notices,
demands, consents, and reports may also be delivered
by hand or by any other receipted method or means
permitted by law. For purposes of this Agreement,
notices shall be deemed to have been "given" or
"delivered" upon personal delivery thereof forty-
eight (48) hours after having been deposited in the
United States mails as provided herein.
Section 26 - AGREEMENT BINDING UPON SUCCESSORS AND
ASSIGNS
This Agreement shall be binding the parties hereto
and their respective personal representatives,
heirs, administrators, executors, successors and
assigns.
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have affixed
or caused to be affixed their respective signatures this
_________ day of _______________ 1995.
Witnesses: The Council of
Unit Owners of the
Residences and Inn at
Henderson's Wharf,
__________________________ A Condominium,
Inc.
By:
_______________________________
Terrence P.
Sullivan, President
Agent:
Firm: Claremont
Management Corporation
__________________________
By: _______________________________
Charles M.
Moran, Jr., President
MANAGEMENT AGREEMENT
This Agreement is made this 1st day of November 1995, by
and between Henderson's Wharf Baltimore, L.P. (the
"Owner") and Claremont Management Corporation (the
"Agent").
Section 1 - APPOINTMENT OF MANAGING AGENT
1.1 APPOINTMENT OF MANAGING ACCEPTANCE
Owner hereby appoints Agent as sole and exclusive
agent of Owner to operate and manage the property
described in paragraph 1.2 upon the terms and
conditions provided herein. Agent accepts the
appointment and agrees to furnish the services of
its organization for the operation and management of
the Premises; and Owner agrees to pay all expenses
in connection with those services.
1.2 DESCRIPTION OF PREMISE
The property to be managed by Agent under this
Agreement (the "Premises") is known as The Inn At
Henderson's Wharf located at 1000 Fell Street,
Baltimore, MD, consisting of the land, building, and
other improvements described as a 38 room inn in the
state of Maryland.
1.3 TERM
The terms of the Agreement shall be for an initial
period of 20 months (the "initial term") from the
1st day of November 1995, to including the 30th day
of June 1997; and thereafter shall be automatically
renewed from year to year unless terminated as
provided in sections 21 or 27 herein. Each of said
one-year renewal periods is referred to as a "term
year".
1.4 MANAGEMENT OFFICE
Owner shall provide adequate space on the Premises
for a management office. This office can be shared
with other properties. Owner shall pay all expenses
related to such office, including, but not limited
to, furnishings, equipment, postage and office
supplies, electricity and other utilities, and
telephone. All costs to be prorated to appropriate
properties.
1.5 APARTMENT FOR INN MANAGER
Owner shall provide a suitable apartment(s) on the
Premises, if deemed appropriate by mutual consent of
both parties, for the use of an on-site manager
and/or a resident janitor and their families, rent
free, except that such resident staff shall pay for
heat and utilities in the same manner as other
tenants. The specific apartment(s) shall be the
Owner's choice.
Section 2 - Bank Accounts
The various bank accounts established under this
Agreement shall at all times be established in
Owner's name but under Agent's control. Agent's and
Owner's designees shall be the only parties
authorized to draw upon such accounts. No amounts
deposited in any accounts established under this
Agreement shall in any event be commingled with any
other funds of Agent.
2.1 OPERATING (AND/OR) RESERVE ACCOUNT(S)
Agent shall establish a separate account(s) known as
the The Inn At Henderson's Wharf Operating (and/or)
Reserve Account(s), separate and apart from Agent's
corporate accounts, for the deposit of receipts
collected as described herein, in a bank or other
institution whose deposits are insured by the
federal government. Such depository shall be
selected by the Agent upon the consent of the Owner.
However, Agent shall not be held liable in the event
of bankruptcy or failure of a depository. Funds in
the Operating (and/or) Reserve Account(s) remain the
property of Owner subject to disbursement of
expenses by Agent as described in the Agreement.
2.1.1 INITIAL DEPOSIT AND CONTINGENCY RESERVE
Immediately upon commencement of this Agreement,
Owner shall remit to Agent the sum $50,000 to be
deposited in the Operating (and/or) Reserve
Account(s) as an initial deposit representing the
estimated disbursements to be made in the first
month following the commencement of this Agreement,
plus an additional sum of $15,000 as a contingency
reserve. If this contingency reserve is drawn down,
then they shall be replenished from operations as
soon as economically feasible. Owner and Agent
shall review the amount of the contingency reserve
from time to time and shall agree in writing on a
new contingency reserve amount when such is
required.
2.2 SECURITY DEPOSIT ACCOUNT
Agent shall, if required by law, maintain a separate
interest bearing account for tenant/guests security
deposits and advance rentals. Such account shall be
maintained in accordance with applicable state or
local laws, if any.
2.3 FIDELITY BOND
The Agent will furnish, at its own expense, a
fidelity bond in the principal sum of $1,000,000,
which is at least equal to the gross potential
income for two months and is conditioned to protect
the Owner and the Mortgagee against
misappropriation of funds of the Premises by the
Agent and its employees. The Agent will obtain a
bond of like kind to cover the on-site personnel
expressed in Section 9.1 and it shall be paid for
from Premises income. The other terms and
conditions of the bond, and the surety thereon, will
be subject to approval of the Owner and the
Mortgagee.
Section 3 - COLLECTION OF RENTS AND OTHER RECEIPTS
3.1 AGENT'S AUTHORITY
Agent shall collect (and give receipts for, if
necessary) all room income, rents, charges and other
amounts receivable on Owner's account in connection
with the management and operation of the Premises.
Such receipts (except tenants'/guests' advance
rentals, which shall be handled as specified in
paragraph 2.2 hereof; and special charges, which
shall be handled as specified in paragraph 3.2
hereof) shall be deposited in the Operating (and/or)
Reserve Account(s) maintained by Agent for the
Premises.
3.2 SPECIAL CHARGES
If permitted by applicable law, Agent may collect
from tenants/guests any or all of the following: an
administrative charge for late payments and a charge
for returned or non-negotiable checks.
Section 4 - DISBURSEMENT FROM OPERATING (AND/OR) RESERVE
ACCOUNT(S)
4.1 OPERATING EXPENSES
From the Operating (and/or) Reserve Account(s),
Agent is hereby authorized to pay or reimburse
itself for all expenses and costs of operating the
Premises in accordance with approved annual budget
under Section 6.2, and for all other sums due Agent
under this Agreement, including Agent's compensation
under section 17.
4.2 DEBT SERVICE
Owner shall give Agent advance written notice of at
least 10 days if Owner desires Agent to make any
additional monthly or recurring payments (such as
mortgage indebtedness, general taxes, or special
assessments, or fire, steam boiler, or other
insurance premiums) out of the proceeds from the
Premises. If Owner notifies Agent to make such
payments after the beginning of the term of this
Agreement, Agent shall have the authority to name a
new contingency, and Owner shall maintain this new
contingency reserve amount at all times in the
Operating (and/or) Reserve Account(s).
4.3 NET PROCEEDS
To the extent that funds are available, and after
maintaining the cash contingency reserve amount as
specified in paragraph 2.1.1, Agent shall transmit
cash balances to Owner periodically, as follows.
Such periodic cash balances shall be remitted to the
following person(s), in the percentage(s) specified,
address(es) shown: as directed from time to time by
Owner.
Section 5 - AGENT NOT REQUIRED TO ADVANCE FUNDS
In the event the balance in the Operating (and/or)
Reserve Account(s) is at any time insufficient to
pay disbursements due and payable under paragraphs
4.1, 4.2 and 6.2. Owner shall immediately upon
notice, remit to Agent sufficient funds to cover the
deficiency and replenish the contingency reserve.
In no event shall Agent be required to use its own
funds to pay such disbursements. Nor shall Agent be
required to advance any monies to Owner, or to the
Operating (and/or) Reserve Account(s).
If Agent elects to advance any money in connection
with the Premises to pay any expenses for Owner,
such advances shall be considered a loan subject to
repayment with interest, and Owner hereby agrees to
reimburse Agent, including interest as provided in
paragraph 17.7 and hereby authorizes Agent to deduct
such amounts from any monies due Owner.
Section 6 - FINANCIAL AND OTHER REPORTS
6.1 REPORTING REQUIREMENTS
By the 20th day of each month, Agent will provide to
the Owner the following schedules for the preceding
month, which include, but are not limited to:
balance sheet, income statement with comparisons to
budget, general ledger, rent roll, bank statements
and cash reconciliations, aged listing of accounts
receivables, listing of prepaids, additions to fixed
assets over $500, intercompany reconciliation,
listing of accruals and other prepaids, tenant
security deposit listing, and cash flow statement.
In addition, Agent shall, on a mutually acceptable
schedule, prepare and submit to Owner such other
reports as are agreed on by both parties.
6.2 BUDGETS
Annual operating budgets for the Premises will be
approved by the Owner. Except as permitted under
Section 10.1 below, annual disbursements for each
type of operating expenses itemized in the budget
shall not materially exceed the amount authorized by
the approved budget without prior consent of the
Owner. The Agent will prepare a recommended
operating budget for each fiscal year beginning
during the term of this Agreement, and will submit
the same to the Owner at least forty-five (45) days
before the beginning of the fiscal year. The Owner
will promptly inform the Agent of any changes
incorporated in the approved budget, and the Agent
will keep the Owner informed of any anticipated
deviation from the receipts or disbursements stated
in the approved budget.
6.3 OWNER'S RIGHT TO AUDIT
Owner shall have the right to request periodic
audits of all applicable accounts managed by Agent,
and the cost of such audit(s) shall be paid by
Owner.
6.4 TAX ASSESSMENTS
Agent will inform Owner of changes in the amount of
real or personal property tax assessments and assist
Owner in compiling all necessary information in
connection with any contest or appeal of any
assessments.
Section 7 - ADVERTISING
Agent is authorized to advertise the Premises or
portions thereof, using periodicals, signs, plans,
brochures, or displays, or such other means as Agent
may deem proper and advisable and in accordance with
Section 6.2. Agent is authorized to place signs on
the Premises advertising the Premises, provided such
signs comply with applicable laws. The cost of such
advertising shall be paid out of the Operating
(and/or) Reserve Account(s). All advertising shall
make clear that Agent is the manager and NOT the
Owner of the Premises. Newspaper ads that share
space with other properties managed by the Agent
shall be prorated on a reasonable basis.
Section 8 - LEASING AND RENTING
8.1 AGENT'S AUTHORITY TO LEASE PREMISES
Agent shall use all reasonable efforts to keep the
Premises occupied by procuring tenants/guests for
the Premises. Agent is authorized to negotiate,
prepare, and execute room rates. Agent shall
operate the inn as Agent for the Owner.
8.2 NO OTHER RENTAL AGENT
During the time of this Agreement. Owner shall not
authorize any other person, firm, or corporation to
negotiate or act as hotel consultant or agent for
the Premises. Owner agrees to promptly forward all
inquiries about room availability to the Agent.
8.3 RENTAL RATES
Agent, with the consent of the Owner, is authorized
to establish and change or revise all room rates,
rents, fees, or deposits, and any other charges
chargeable with respect to the Premises.
8.4 ENFORCEMENT OF LEASES
Agent is authorized to institute, in Owner's name,
all legal actions or proceedings for the enforcement
of any room occupancy term, for the collection of
room income, rent or other income from the Premises
or for the evicting or dispossessing of
tenants/guests or other persons from the Premises.
Agent is authorized to sign and serve such notices
as Agent deems necessary for enforcement, including
the collection of room income, rent or other income.
Agent is authorized, when expedient, to settle,
compromise, and release such legal actions or suits
or reinstate such tenancies. Any monies for such
settlements paid out by Agent shall not exceed
$5,000 without prior approval by Owner. Attorney's
fees, filing fees, court costs, and other necessary
expenses incurred in connection with such actions
and not recovered from tenants/guests shall be paid
out of the Operating (and/or) Reserve Account(s) or
reimbursed directly to Agent by Owner. Agent may
select the attorney of its choice to handle such
litigation upon the advise and consent of Owner.
Section 9 - EMPLOYEES
9.1 AGENT'S AUTHORITY TO HIRE
Agent is authorized to hire, supervise, discharge,
and pay all servants, employees, contractors or
other personnel necessary to be employed in the
management, maintenance, and operation of the
Premises in accordance with approved budget
mentioned in Section 6.2. All employees shall be
deemed employees of the Agent.
9.2 OWNER PAYS EMPLOYEE EXPENSES
All wages and fringe benefits payable to such
employees hired per paragraph 9.1 above, and all
local, state, and federal taxes and assessment
(including but not limited to Social Security taxes,
unemployment insurance and workers' compensation
insurance) incident to the employment of such
personnel, shall be reimbursed to the Agent out of
the Operating (and/or) Reserve Account(s) in
accordance with the approved budget and shall be
treated as operating expenses.
9.3 AGENT'S AUTHORITY TO FILE RETURNS
Agent shall do and perform all acts required of an
employer with respect to the Premises and shall
execute and file all tax and other returns required
under the applicable federal, state and local laws,
regulations, and/or ordinances governing employment,
and all other statements and reports pertaining to
labor employed in connection with the Premises and
under any similar federal or state law now or
hereafter in force. In connection with such filing,
Owner shall be responsible for all amounts required
to be paid under the foregoing laws, and Agent shall
pay the same from the Operating (and/or) Reserve
Account(s). Any penalties assessed to Owner and
incurred due to the negligence of Agent shall be
paid by Agent.
9.4 WORKER'S COMPENSATION INSURANCE
Agent shall, at Owner's expense, maintain worker's
compensation insurance covering all liability of the
employer under established worker's compensation
laws.
9.5 HOLD HARMLESS, LABOR LAWS
Agent shall be responsible for compliance with all
applicable state or federal labor laws. Owner shall
indemnify, defend, and save Agent harmless from all
claims, investigations, and suites, or from Owner's
action or failures to act, with respect to any
alleged or actual violation of state or federal
labor laws. Conversely, Agent shall indemnify,
defend and save Owner harmless from all claims,
investigations, and suits, or from Agent's actions
or failure to act with respect to any alleged or
actual violations of state or federal labor laws.
Agent's or Owner's obligation with respect to such
violation(s) shall include payment of all
settlements, judgments, damages, liquidated damages,
penalties, forfeitures, back pay awards, court
costs, litigation expenses, and attorney's fees.
Section 10 - MAINTENANCE AND REPAIR
Agent is authorized to make or cause to be made,
through contracted services or otherwise, all
ordinary repairs and replacements reasonably
necessary to preserve the Premises in its present
condition and for the operating efficiency of the
Premises, and all alterations required to comply
with lease requirements, governmental regulations,
or insurance requirements. Agent is also authorized
to decorate the Premises and to purchase or rent, on
Owner's behalf, all equipment, tools, appliances,
materials, maintenance, or operation of the
Premises. Such maintenance and decorating expenses
shall be made in accordance to approved budget and
shall be paid out of the Operating (and/or) Reserve
Account(s). This section applies except where
decorating and/or maintenance are at tenants'
expense as stipulated in a lease.
10.1 APPROVAL FOR EXCEPTIONAL MAINTENANCE EXPENSE
The expense to be incurred for any one item of
maintenance alteration, refurbishing, or repair
shall not exceed the sum of $5,000 unless such
expense is specifically authorized by Owner or is
incurred under such circumstances as Agent shall
reasonable deem to be an emergency. In an emergency
where repairs are immediately necessary for the
preservation and safety of the Premises, or to avoid
the suspension of any essential service to the
Premises, or to avoid danger to life or property, or
to comply with federal, state, or local law, such
emergency repairs shall be made by Agent at Owner's
expense prior approval.
Section 11 - CONTRACTS, UTILITIES AND SERVICES
Agent is authorized to negotiate contracts for non-
recurring items of expense, not to exceed $5,000,
unless approved by Owner, and to enter into
agreements in Owner's name for all necessary
repairs, maintenance, minor alterations, and utility
services. Agent shall, in Owner's name and at
Owner's expense, make contracts on Owner's behalf
for electricity, gas, telephone, fuel, or water, and
such other services as Agent shall deem necessary or
prudent for the operation of the Premises. All
utility deposits shall be the Owner's
responsibility, except that Agent may pay same from
the Operating (and/or) Reserve Account(s) at Owner's
request.
Section 12 - RELATIONSHIP OF AGENT TO OWNER
The relationship of the parties to this Agreement
shall be that of Principal and Agent, and all duties
to be performed by Agent under this Agreement shall
be for and on behalf of Owner, in Owner's name and
for Owner's account. In taking any under the
Agreement, Agent shall be acting only as Agent for
Owner, and nothing in this Agreement shall be
construed as creating a partnership, joint venture,
or any other relationship between the parties to
this Agreement except that of Principal and Agent,
or as requiring Agent to bear any portion of losses
arising out of or connected with the ownership or
operation of the Premises. Nor shall Agent at any
time during the period of this Agreement to be
considered a direct employee of Owner. Neither
party shall have the owner to bind or obligate the
other except as expressly set forth in this
Agreement except that Agent is authorized to act
with such additional authority and power as may be
necessary to carry out the spirit and intent of this
Agreement.
Section 13 - SAVE HARMLESS
The Owner will indemnify the Agent harmless against
and hold the Agent harmless from and against any
liabilities, damages, costs and expenses (including
reasonable attorney's fees) sustained or incurred
for injury to any person or property in, about, and
in conjunction with the buildings, unless such
injury shall be caused by the Agent's own negligence
or willful misconduct; and any liability, damages,
penalties, costs and expenses (including reasonable
attorney's fees) statutory or otherwise, for all
acts performed by the Agent in accordance with the
terms of this Agreement or pursuant to the
instructions of the Owner, provided, in each of the
foregoing instances, that the Agent promptly advises
the Owner of its receipt of information concerning
any such injury and the amount of any such
liability, damages, penalties, costs and expenses.
The Agent will indemnify the Owner harmless against
and hold the Owner harmless from and against; any
liabilities, damages, costs and expenses (including
reasonable attorney's fees) sustained or incurred
for injury to any person or property in, about, and
in conjunction with the buildings caused by the
Agent's own negligence or willful misconduct; and
any liability, damages, penalties, costs and
expenses (including reasonable attorney's fees)
statutory or otherwise, for all acts performed by
the Agent not in accordance with the terms of this
Agreement or not pursuant to the instructions of the
Owners.
Section 14 - LIABILITY INSURANCE
Owner and Agent shall obtain and keep in force
adequate insurance against physical damage (e.g.
fire with extended coverage endorsement, boiler and
machinery, etc.) and against liability for loss,
damage, or injury to property or persons which might
arise out of the occupancy, management, operation,
or maintenance of the Premises. The amounts and
types of insurance shall be acceptable to both Owner
and Agent, and any deductible required under each
insurance policies shall be Owner's expense. Agent
shall be covered as additional insured on all
liability insurance maintained with respect to the
Premises. Liability insurance shall be adequate to
protect the interest of both Owner and Agent and in
form, substance, and amounts reasonable satisfactory
to Agent. Owner agrees to furnish Agent with
certificates evidencing such insurance or with
duplicate copies of such policies within 10 days of
the execution of this Agreement. If Owner fails to
do so, Agent may but shall not be obligated to place
said insurance and charge the cost thereof to the
Operating (and/or) Reserve Account(s). Said
policies shall provide that notice of default or
cancellation shall be sent to Agent as well as Owner
and shall require a minimum of 30 days written
notice to Agent before any cancellation of or
changes to said policies.
Section 15 - AGENT ASSUMES NO LIABILITY
Agent assumes no liability whatsoever for any acts
or omissions of Owner or any previous owners of the
Premises, or any previous management or other agent
of either. Agent assumes no liability for any
failure of or default by any tenant in the payment
of any rent or other charges due Owner or in the
performance of any obligations owned by any tenant
to Owner pursuant to any lease or otherwise. Nor
does Agent assume any liability for previously
unknown violations or environmental or other
regulations which may become unknown during the
period of this Agreement is in effect. Any such
regulatory violations or hazards discovered by
Agent shall be brought to the attention of the
Owner in writing and Owner shall promptly cure
them.
Section 16 - OWNER RESPONSIBLE FOR ALL EXPENSES OF
LITIGATION
Owner shall reimburse all reasonable expenses
incurred by Agent, including but not limited to,
attorneys' fee and Agent's costs and time, any
liability, fines, penalties or the like, in
connection with any claim, proceeding, or suit
involving an alleged violation by Agent or Owner, or
both, of any law pertaining to fair employment, fair
credit reporting, environmental protection, rent
control, taxes, or fair housing, including, but not
limited to, any law prohibiting or making illegal
discrimination on the basis or race, sex, creed,
color, religion, national origin, or mental or
physical handicap, provided, however, that Owner
shall not be responsible to Agent for any such
expenses in the event Agent is finally adjudged to
have personally, and not in a representative
capacity, violated any such law. Nothing contained
in this Agreement shall obligate Agent to employ
legal counsel to represent Owner in any such
proceeding or suit.
16.1 FEES FOR LEGAL ADVICE
Owner shall pay reasonable expenses incurred by
Agent in obtaining legal advice regarding compliance
with any law affecting the Premises or activities
related to them. If such expenditure also benefits
others for whom Agent in this Agreement acts in a
similar capacity, Owner agrees to pay an apportioned
amount of such expense.
Section 17 - AGENT'S COMPENSATION AND EXPENSES
As compensation for the services provided by Agent
under this Agreement (and exclusive of reimbursement
of expenses to which Agent is entitled hereunder).
Owner shall pay Agent as follows:
17.1 FOR MANAGEMENT SERVICES
The greater of (i) $ N/A per month or (ii) 4.5% of
the total monthly gross receipts from the premises,
payable by the 10th day of the current month for the
duration of this Agreement. Payments due Agent for
Periods of less than a calendar month shall be
prorated over the number of days for which
compensation is due. The percentage amount set
forth in (ii) above shall be based upon the total
gross receipts from the premises during the
preceding month.
The term "gross receipts" shall be deemed to include
all collected room income, and other income and
charges from the normal operation of the Premises,
including, but not limited to, room income, rents,
parking fees, food and beverage income, guest
services and meetings income, and special charges
listed in paragraph 3.2, and other miscellaneous
income. Gross receipts shall NOT be deemed to
include the value of units provided to on-site staff
if applicable, nor income arising out of the sale of
real property or settlement of fire or other
casualty losses and items of a similar nature.
17.2 FOR APARTMENT LEASING
N/A.
17.3 FOR COMMERCIAL LEASING
N/A.
17.4 FOR MODERNIZATION (REHABILITATION/CONSTRUCTION)
N/A.
17.5 FOR FIRE RESTORATION
10% of total restoration if Claremont Management
Corporation acts as general contractor.
17.6 FOR OTHER ITEMS OF MUTUAL AGREEMENT
To be determined if situation arises.
17.7 INTEREST ON UNPAID SUMS
Any sums due Agent under any provisions of this
Agreement, and not paid within 30 days after such
sums have become due, shall bear interest at the
rate of the Fleet prime rate.
Section 18 - REPRESENTATIONS
Owner represents and warrants: That Owner has full
power and authority to enter this Agreement; that
there are no written or oral agreements affecting
the Premises; that there are no recorded easements,
restrictions, reservations, or rights of way which
adversely affect the use of the Premises for the
purposes intended under this Agreement; that to the
best of Owner's knowledge, the property is zoned for
the intended use; that all leasing and other permits
for the operation of the Premises have been secured
and are current; that the building and its been
secured and are current; that the building and its
construction and operation do not violate any
applicable statutes, laws, ordinances, rules
regulations, orders, or the like (including, but not
limited to, those pertaining to hazardous or toxic
substances); that the building does not contain any
asbestos, urea, formaldehyde, radon, or other toxic
or hazardous substance; and that no unsafe
conditions exists.
Section 19 - STRUCTURAL CHANGES
Owner expressly withholds from Agent any power or
authority to make any structural changes in any
building, or to make any other major alterations or
additions in or to any such building or to any
equipment to any such building, or to incur any
expense chargeable to Owner other than expenses
related to exercising the express powers vested in
Agent through this Agreement, without the prior
written consent of the following person or his
designee:
Terrence Sullivan
Boston Bay Capital, Inc.
One Liberty Square
Boston, MA 02109
However, such emergency repairs as may be required
because of danger to life or property, or which are
immediately necessary for the preservation and
safety of the Premises or the safety of the tenants
and occupants thereof, or required to avoid the
suspension of any necessary service to the Premises,
or to comply with any applicable federal, state, or
local laws, regulations, or ordinances, shall be
authorized pursuant to paragraph 10.1 of this
Agreement, and Agent shall notify Owner
appropriately.
Section 20 - BUILDING COMPLIANCE
Agent does not assume and is given no responsibility
for compliance of the Premises or any building
thereon or any equipment therein with the
requirements of any building codes or with any
statue, ordinance, law, or regulation or any
governmental body or of any public authority or
official thereof having jurisdiction, except to
notify Owner promptly or forward to Owner promptly
any complaints, warnings, notices, or summons
received by Agent relating to such matters. Owner
represents that to the best of Owner's knowledge the
Premises and all such equipment comply with all such
requirements, and Owner authorizes Agent to disclose
the ownership of the Premises to any such officials
and agrees to indemnify and hold Agent, its
representatives, servants, and employees, harmless
of and from all loss, cost, expense, and liability
whatsoever which may be imposed by reason of any
present or future violation or alleged violation of
such laws, ordinances, statues, or regulations.
Section 21 - TERMINATION
21.1 TERMINATION BY EITHER PARTY
This Agreement may be terminated by either Owner or
Agent, with or without cause, at the end of the
initial term or of any following term year upon the
giving of 30 days' written notice prior to the end
of said initial term or following terming year.
21.2 TERMINATION FOR CAUSE
Notwithstanding the foregoing, the Agreement shall
terminate in any event, and all obligations of the
parties hereunder shall cease (except as to
liabilities or obligations which have accrued or
arisen prior to such termination, or which accrue
pursuant to paragraph 21.3 as a result of such
termination, and obligations to insure and
indemnify), upon the occurrence of any of the
following events:
a. BREACH OF AGREEMENT - Thirty (30) days after
the receipt of notice by either party to the other
specifying in detail a material breach of this
Agreement, if such breach has not been cured within
said thirty (30) day period; or if such breach is of
a nature that it cannot be cured within said (30)
day period but can not be cured with a reasonable
time thereafter, if efforts to cure such breach have
not commenced or/and such efforts are not proceeding
and being continued diligently both during and after
such thirty (30) day period prior to the breach
being cured. HOWEVER, the breach of any obligation
of either party hereunder to pay any monies to the
other party under the terms of this Agreement shall
be deemed to be curable within thirty (30) days.
21.2 TERMINATION FOR CAUSE (Cont.)
b. FAILURE TO ACT, ETC. - In the event that any
insurance required of Owner is not
maintained without any lapse, or it is alleged or
charged that the Premises, or any portion thereof,
or any act or failure to act by Owner, its agent and
employees with respect to the Premises, fails to
comply with any law or regulations, or any order or
ruling of any public authority, and Agent, in its
sole discretion, considers that the action or
position of Owner or its representatives with
respect thereto may result in damage or liability to
Agent, or disciplinary proceeding with respect to
Agent's license. Agent shall have the right to
terminate this Agreement at any time by written
notice to Owner of its election to do so, which
termination shall be effective upon the service of
such notice. Such termination shall not release the
indemnities of Owner set forth herein.
c. EXCESSIVE DAMAGE - Upon the destruction of or
substantial damage to the Premises by any cause, or
the taking of all or a substantial portion of the
Premise of the Premises by eminent domain, in either
case making it impossible or impracticable to
continue operation of the Premises.
d. INADEQUATE INSURANCE - If Agent deems that the
liability insurance obtained by Owner per section 14
is not reasonable satisfactory to protect its
interest under this Agreement, and if Owner and
Agent cannot agree as to adequate insurance. Agent
shall have the right to cancel this Agreement upon
the service of notice to Owner.
21.3 TERMINATION COMPENSATION
If (i) Owner terminates this Agreement before the
end of the initial term or any subsequent term year
as provided in paragraph 21.1 above for any reason
other than for a breach by Agent under paragraph
21.2 (a) above, or if (ii) Agent terminates this
Agreement for a breach by Owner under paragraph 21.2
(a) above or pursuant to the provisions of paragraph
21.2 (b) or 21.2 (d) above, then in any such event,
Owner shall be obligated to pay Agent as liquidated
damages an amount equal to the management fee earned
by Agent, as determined under paragraph 17.1 above,
for the calendar month immediately preceding the
month in which the notice of termination is given to
Agent or to Owner, multiplied by the number of
months and/or portions thereof remaining from the
termination date until the end of the initial term
or term year in which the termination occurred.
Such damages, plus any amounts accruing to Agent
prior to such termination, shall be due and payable
upon termination of this Agreement. To the extent
that funds are available, such sums shall be payable
from the Operating (and/or) Reserve Account(s). Any
amount due in excess of the funds available from the
Operating (and/or) Reserve Account(s) shall be paid
by Owner to Agent upon demand.
21.4 OWNER RESPONSIBLE FOR PAYMENTS
Upon Termination or withdrawal from this Agreement,
Owner shall assume the obligations of any contract
or outstanding bill executed by Agent under this
Agreement for and on behalf of Owner and
responsibility for payment of all unpaid bills. In
addition, Owner shall furnish Agent security, in an
amount satisfactory to Agent, against any
obligations or liabilities with Agent may have
properly incurred on Owner's behalf under this
Agreement.
Agent may withhold funds for ninety (90) days after
the end of the month in which this Agreement is
terminated, in order to pay bills previously
incurred by not yet invoiced and to close accounts.
Agent shall deliver to Owner, within ninety (90)
days after the end of the month in which this
Agreement is terminated, any balance of monies due
Owner or of tenant security deposits, or both which
were held by Agent with respect to the Premises, as
well as a final accounting reflecting the balance of
income and expenses with respect to the Premises as
of the date of termination or withdrawal, and all
records, contracts, leases, receipts for deposits,
and other papers or documents which pertain to the
Premises.
21.5 SALE OF PREMISES
In the event that the Premises are sold by Owner
during the period of this Agreement, Agent may, upon
agreement with Owner and in accordance with Owner's
partnership agreement, obtain rights of
representation in the sale as stated in a specific
sales agreement to be negotiated separately. Upon
transfer of ownership, this Agreement shall
terminate by mutual consent of Owner and Agent under
the term and conditions set forth below:
The agreement shall automatically terminate
upon sale of premises to a bona fide Third
Party without penalty. A minimum of sixty days
notice is required.
Section 22 - INDEMNIFICATION SURVIVES TERMINATION
All representatives and warranties of the parties
contained herein shall survive the termination of
this Agreement. All provisions of this Agreement
that require Owner to have insured or to defend,
reimburse, or indemnify Agent (including, but not
limited to, paragraphs, 2.1, 2.3, 5, 8.4, 9.2, 13,
14, 15, 16, 17.7, 20, 21.3 and 21.4) shall survive
any termination; and if Agent is or becomes involved
in any proceedings or litigation by reason of having
been Owner's Agent, such provisions shall apply as
if this Agreement were still in effect.
Section 23 - HEADINGS
All headings and subheadings employed within this
Agreement and in the accompanying List of Provisions
are inserted only for convenience and ease of
reference and are not to be considered in the
construction or interpretation of any provision of
this Agreement.
Section 24 - FORCE MAJEUR
Any delays in the performance of any obligation of
Agent under this Agreement shall be excused to the
extent that such delays are caused by wars, national
emergencies, natural disasters, strikes, labor
disputes, utility failures, governmental
regulations, riots, adverse weather, and other
similar causes not within the control of Agent, and
any time periods required for performance shall be
extended accordingly.
Section 25 - COMPLETE AGREEMENT
This Agreement, including any specified attachments,
constitutes the entire agreement between Owner and
Agent with respect to the management and operation
of the Premises and supersedes and replaces any and
all previous management agreements entered into
or/and negotiated between Owner and Agent relating
to the Premises covered by this Agreement. No
change to this Agreement shall be valid unless made
by supplemental written agreement executed and
approved by Owner and Agent. Except as otherwise
provided herein, any and all amendments, additions,
or deletions to this Agreement shall be null and
void unless approved by Owner and Agent in writing.
Each party to this Agreement hereby acknowledges and
agrees that the other party has made no warranties,
representations, covenants, or agreements, express
or implied, to such party, other than those
expressly set forth herein, and that each party, in
entering into and executing this Agreement, has
relied upon no warranties, representations,
covenants, or agreement, express or implied, to such
party, other than those expressly set forth herein.
Section 26 - RIGHTS CUMULATIVE; NO WAIVER
No right or remedy herein conferred upon or reserved
to either of the parties to this Agreement is
extended to be exclusive of any other right or
remedy, and each and every right and remedy shall be
cumulative and in addition to any other right or
remedy given under this Agreement or now or
thereafter legally existing upon the occurrence of
an event or default under this Agreement. The
failure of either party to this Agreement to insist
at any time upon the strict observance or
performance of any of the provisions of this
Agreement, or to exercise any right or remedy as
provided in this Agreement, shall not impair any
such right or remedy with respect to subsequent
defaults. Every right and remedy given by this
Agreement to the parties to it may be exercised from
time to time and as often as may be deemed expedient
by those parties.
Section 27 - APPLICABLE LAW AND PARTIAL INVALIDITY
The Execution, interpretation, and performance of
this Agreement shall in all respects be controlled
and governed by the laws of the State of
Massachusetts. If any part of this Agreement shall
be declared invalid or unenforceable, Agent shall
have the option to terminate this Agreement by
notice to Owner.
Any notices, demands, consents, and report necessary
or provided for under this Agreement shall be in
writing and shall be addressed as follows, or at
such other address as Owner and Agent individually
may specify hereafter in writing:
Agent: Claremont Management Corporation
Batterymarch Park II
Quincy, MA 02169
ATTN: Charles M. Moran, Jr.
Owner: Henderson's Wharf Baltimore, L.P.
c/o Boston Bay Capital, Inc.
One Liberty Square
Boston, MA 02109
ATTN: Terrence P. Sullivan
Such notice or other communication may be mailed by
United States registered or certified mail, return
receipt requested, postage prepaid, and may be
deposited in a United States Post Office or a
depository for the receipt of mail regularly
maintained by the post office. Such notices,
demands, consents, and reports may also be delivered
by hand or by any other receipted method or means
permitted by law. For purposes of this Agreement,
notices shall be deemed to have been "given" or
"delivered" upon personal delivery thereof forty-
eight (48) hours after having been deposited in the
United States mails as provided herein.
Section 28 - AGREEMENT BINDING UPON SUCCESSORS AND
ASSIGNS
This Agreement shall be binding the parties hereto
and their respective personal representatives,
heirs, administrators, executors, successors and
assigns.
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have affixed
or caused to be affixed their respective signatures this
_________ day of _______________ 1995.
Witnesses: Henderson's Wharf
Baltimore, L.P.
a Delaware Limited Partnership
("Borrower")
By: Henderson's Wharf
Development Corporation.
a Delaware Corporation,
General Partner of
Henderson's Wharf
Baltimore, L.P.
__________________________ By:
_________________________________
Terrence P. Sullivan,
President
By: Historic Preservation
Properties 1990 L.P.
TAX CREDIT FUND, a
Delaware L.P., General
Partner of Henderson's
Wharf Baltimore, L.P.
By: Boston Historic
Partners II L.P., General
Partner of
Historic Preservation Properties
1990 L.P. Tax Credit
Fund
By: Portfolio Advisory
Services II, Inc.
General Partner of BHP
II Advisors L.P.
___________________________ By:
____________________________
Terrence
P. Sullivan, President of
Portfolio
Advisory Services II, Inc.
___________________________ By:
_________________________________
Terrence P.
Sullivan, General Partner of
BHP II Advisors
L.P.
Agent:
Firm: Claremont
Management Corporation
___________________________ By:
_______________________________
Charles M. Moran,
Jr., President
MANAGEMENT AGREEMENT
This Agreement is made this 1st day of November 1995, by
and between Henderson's Wharf Marina L.P. (the "Owner")
and Claremont Management Corporation (the "Agent").
Section 1 - APPOINTMENT OF MANAGING AGENT
1.1 APPOINTMENT OF MANAGING ACCEPTANCE
Owner hereby appoints Agent as sole and exclusive
agent of Owner to lease and manage the property
described in paragraph 1.2 upon the terms and
conditions provided herein. Agent accepts the
appointment and agrees to furnish the services of
its organization for the leasing and management of
the Premises; and Owner agrees to pay all expenses
in connection with those services.
1.2 DESCRIPTION OF PREMISE
The property to be managed by Agent under this
Agreement (the "Premises") is known as Henderson's
Wharf Marina located at 1000 Fell Street, Baltimore,
MD, consisting of the land, and other improvements
described as a 256 slip marina in the state of
Maryland.
1.3 TERM
The terms of the Agreement shall be for an initial
period of 20 months (the "initial term") from the
1st day of November 1995, to including the 30th day
of June 1997; and thereafter shall be automatically
renewed from year to year unless terminated as
provided in sections 21 or 27 herein. Each of said
one-year renewal periods is referred to as a "term
year".
1.4 MANAGEMENT OFFICE
Owner shall provide adequate space on or near the
Premises for a management office. This office can
be shared with other properties. Owner shall pay
all expenses related to such office, including, but
not limited to, furnishings, equipment, postage and
office supplies, electricity and other utilities,
and telephone. All costs to be prorated to
appropriate properties.
Section 2 - Bank Accounts
The various bank accounts established under this
Agreement shall at all times be established in
Owner's name but under Agent's control. Agent's and
Owner's designees shall be the only parties
authorized to draw upon such accounts. No amounts
deposited in any accounts established under this
Agreement shall in any event be commingled with any
other funds of Agent.
2.1 OPERATING (AND/OR) RESERVE ACCOUNT(S)
Agent shall establish a separate account(s) known as
the Henderson's Wharf Marina L.P. Operating
(and/or) Reserve Account(s), separate and apart from
Agent's corporate accounts, for the deposit of
receipts collected as described herein, in a bank or
other institution whose deposits are insured by the
federal government. Such depository shall be
selected by the Agent upon the consent of the Owner.
However, Agent shall not be held liable in the event
of bankruptcy or failure of a depository. Funds in
the Operating (and/or) Reserve Account(s) remain the
property of Owner subject to disbursement of
expenses by Agent as described in the Agreement.
2.1.1 INITIAL DEPOSIT AND CONTINGENCY RESERVE
Immediately upon commencement of this Agreement,
Owner shall remit to Agent the sum $5,000 to be
deposited in the Operating (and/or) Reserve
Account(s) as an initial deposit representing the
estimated disbursements to be made in the first
month following the commencement of this Agreement,
plus an additional sum of $5,000 as a contingency
reserve. If this contingency reserve is drawn down,
then they shall be replenished from operations as
soon as economically feasible. Owner and Agent
shall review the amount of the contingency reserve
from time to time and shall agree in writing on a
new contingency reserve amount when such is
required.
2.2 SECURITY DEPOSIT ACCOUNT
Agent shall, if required by law, maintain a separate
interest bearing account for tenant security
deposits and advance rentals. Such account shall be
maintained in accordance with applicable state or
local laws, if any.
2.3 FIDELITY BOND
The Agent will furnish, at its own expense, a
fidelity bond in the principal sum of $1,000,000,
which is at least equal to the gross potential
income for two months and is conditioned to protect
the Owner and the Mortgagee against
misappropriation of funds of the Premises by the
Agent and its employees. The Agent will obtain a
bond of like kind to cover the on-site personnel
expressed in Section 9.1 and it shall be paid for
from Premises income. The other terms and
conditions of the bond, and the surety thereon, will
be subject to approval of the Owner and the
Mortgagee.
Section 3 - COLLECTION OF RENTS AND OTHER RECEIPTS
3.1 AGENT'S AUTHORITY
Agent shall collect (and give receipts for, if
necessary) all rents, charges and other amounts
receivable on Owner's account in connection with the
management and operation of the Premises. Such
receipts (except tenants' security deposits and
advance rentals, which shall be handled as specified
in paragraphs 2.2 and 3.3 hereof; and special
charges, which shall be handled as specified in
paragraph 3.2 hereof) shall be deposited in the
Operating (and/or) Reserve Account(s) maintained by
Agent for the Premises.
3.2 SPECIAL CHARGES
If permitted by applicable law, Agent may collect
from tenants any or all of the following: and
administrative charge for late payment of rent, a
charge for returned or non-negotiable checks, a
credit report fee, and any administrative charges.
3.3 SECURITY DEPOSITS
Agent shall collect, deposit, and disburse tenants'
security deposits in accordance with the terms of
each tenant's lease. Agent shall pay from
operations tenants interest upon such security
deposits only if required by law to do so. Agent
shall comply with all applicable state or local laws
concerning the responsibility for security deposits
and interest, if any.
Section 4 - DISBURSEMENT FROM OPERATING (AND/OR) RESERVE
ACCOUNT(S)
4.1 OPERATING EXPENSES
From the Operating (and/or) Reserve Account(s),
Agent is hereby authorized to pay or reimburse
itself for all expenses and costs of operating the
Premises in accordance with approved annual budget
under Section 6.2, and for all other sums due Agent
under this Agreement, including Agent's compensation
under section 17.
4.2 DEBT SERVICE
Owner shall give Agent advance written notice of at
least 10 days if Owner desires Agent to make any
additional monthly or recurring payments (such as
mortgage indebtedness, general taxes, or special
assessments, or fire, steam boiler, or other
insurance premiums) out of the proceeds from the
Premises. If Owner notifies Agent to make such
payments after the beginning of the term of this
Agreement, Agent shall have the authority to name a
new contingency, and Owner shall maintain this new
contingency reserve amount at all times in the
Operating (and/or) Reserve Account(s).
4.3 NET PROCEEDS
To the extent that funds are available, and after
maintaining the cash contingency reserve amount as
specified in paragraph 2.1.1, Agent shall transmit
cash balances to Owner periodically, as follows.
Such periodic cash balances shall be remitted to the
following person(s), in the percentage(s) specified,
address(es) shown: as directed from time to time by
Owner.
Section 5 - AGENT NOT REQUIRED TO ADVANCE FUNDS
In the event the balance in the Operating (and/or)
Reserve Account(s) is at any time insufficient to
pay disbursements due and payable under paragraphs
4.1, 4.2 and 6.2. Owner shall immediately upon
notice, remit to Agent sufficient funds to cover the
deficiency and replenish the contingency reserve.
In no event shall Agent be required to use its own
funds to pay such disbursements. Nor shall Agent be
required to advance any monies to Owner, to the
Security Deposit Account, or to the Operating
(and/or) Reserve Account(s).
If Agent elects to advance any money in connection
with the Premises to pay any expenses for Owner,
such advances shall be considered a loan subject to
repayment with interest, and Owner hereby agrees to
reimburse Agent, including interest as provided in
paragraph 17.7 and hereby authorizes Agent to deduct
such amounts from any monies due Owner.
Section 6 - FINANCIAL AND OTHER REPORTS
6.1 REPORTING REQUIREMENTS
By the 20th day of each month, Agent will provide to
the Owner the following schedules for the preceding
month, which include, but are not limited to:
balance sheet, income statement with comparisons to
budget, general ledger, rent roll, bank statements
and cash reconciliations, aged listing of accounts
receivables, listing of prepaids, additions to fixed
assets over $500, intercompany reconciliation,
listing of accruals and other prepaids, tenant
security deposit listing, and cash flow statement.
In addition, Agent shall, on a mutually acceptable
schedule, prepare and submit to Owner such other
reports as are agreed on by both parties.
6.2 BUDGETS
Annual operating budgets for the Premises will be
approved by the Owner. Except as permitted under
Section 10.1 below, annual disbursements for each
type of operating expenses itemized in the budget
shall not materially exceed the amount authorized by
the approved budget without prior consent of the
Owner. The Agent will prepare a recommended
operating budget for each fiscal year beginning
during the term of this Agreement, and will submit
the same to the Owner at least forty-five (45) days
before the beginning of the fiscal year. The Owner
will promptly inform the Agent of any changes
incorporated in the approved budget, and the Agent
will keep the Owner informed of any anticipated
deviation from the receipts or disbursements stated
in the approved budget.
6.3 OWNER'S RIGHT TO AUDIT
Owner shall have the right to request periodic
audits of all applicable accounts managed by Agent,
and the cost of such audit(s) shall be paid by
Owner.
6.4 TAX ASSESSMENTS
Agent will inform Owner of changes in the amount of
real or personal property tax assessments and assist
Owner in compiling all necessary information in
connection with any contest or appeal of any
assessments.
Section 7 - ADVERTISING
Agent is authorized to advertise the Premises or
portions thereof for rent using periodicals, signs,
plans, brochures, or displays, or such other means
as Agent may deem proper and advisable and in
accordance with Section 6.2. Agent is authorized to
place signs on the Premises advertising the Premises
for rent, provided such signs comply with applicable
laws. The cost of such advertising shall be paid
out of the Operating (and/or) Reserve Account(s).
All advertising shall make clear that Agent is the
manager and NOT the Owner of the Premises.
Newspaper ads that share space with other properties
managed by the Agent shall be prorated on a
reasonable basis.
Section 8 - LEASING AND RENTING
8.1 AGENT'S AUTHORITY TO LEASE PREMISES
Agent shall use all reasonable efforts to keep the
Premises rented by procuring tenants for the
Premises. Agent is authorized to negotiate,
prepare, and execute all leases, including all
renewals and extensions of leases (and expansions of
space in the Premises, if applicable) and to cancel
and modify existing leases. Agent shall execute all
leases as Agent for the Owner. All costs of leasing
shall be paid out of the Operating (and/or) Reserve
Account(s). No lease shall be in excess of two
year(s) without written approval of Owner. The form
of the lease shall be agreed upon by Owner and
Agent.
8.2 NO OTHER RENTAL AGENT
During the time of this Agreement. Owner shall not
authorize any other person, firm, or corporation to
negotiate or act as leasing or rental agent with
respect to any leases for space in the Premises.
Owner agrees to promptly forward all inquiries about
leases to Agent.
8.3 RENTAL RATES
Agent, with the consent of the Owner, is authorized
to establish and change or revise all rents, fees,
or deposits, and any other charges chargeable with
respect to the Premises.
8.4 ENFORCEMENT OF LEASES
Agent is authorized to institute, in Owner's name,
all legal actions or proceedings for the enforcement
of any lease term, for the collection of rent or
other income from the Premises or for the evicting
or dispossessing of tenants or other persons from
the Premises. Agent is authorized to sign and serve
such notices as Agent deems necessary for lease
enforcement, including the collection of rent or
other income. Agent is authorized, when expedient,
to settle, compromise, and release such legal
actions or suits or reinstate such tenancies. Any
monies for such settlements paid out by Agent shall
not exceed $5,000 without prior approval by Owner.
Attorney's fees, filing fees, court costs, and other
necessary expenses incurred in connection with such
actions and not recovered from tenants shall be paid
out of the Operating (and/or) Reserve Account(s) or
reimbursed directly to Agent by Owner. Agent may
select the attorney of its choice to handle such
litigation upon the advise and consent of Owner.
Section 9 - EMPLOYEES
9.1 AGENT'S AUTHORITY TO HIRE
Agent is authorized to hire, supervise, discharge,
and pay all servants, employees, contractors or
other personnel necessary to be employed in the
management, maintenance, and operation of the
Premises in accordance with approved budget
mentioned in Section 6.2. All employees shall be
deemed employees of the Agent.
9.2 OWNER PAYS EMPLOYEE EXPENSES
All wages and fringe benefits payable to such
employees hired per paragraph 9.1 above, and all
local, state, and federal taxes and assessment
(including but not limited to Social Security taxes,
unemployment insurance and workers' compensation
insurance) incident to the employment of such
personnel, shall be reimbursed to the Agent out of
the Operating (and/or) Reserve Account(s) and shall
be treated as operating expenses.
9.3 AGENT'S AUTHORITY TO FILE RETURNS
Agent shall do and perform all acts required of an
employer with respect to the Premises and shall
execute and file all tax and other returns required
under the applicable federal, state and local laws,
regulations, and/or ordinances governing employment,
and all other statements and reports pertaining to
labor employed in connection with the Premises and
under any similar federal or state law now or
hereafter in force. In connection with such filing,
Owner shall be responsible for all amounts required
to be paid under the foregoing laws, and Agent shall
pay the same from the Operating (and/or) Reserve
Account(s). Any penalties assessed to Owner and
incurred due to the negligence of Agent shall be
paid for by Agent.
9.4 WORKER'S COMPENSATION INSURANCE
Agent shall, at Owner's expense, maintain worker's
compensation insurance covering all liability of the
employer under established worker's compensation
laws.
9.5 HOLD HARMLESS, LABOR LAWS
Agent shall be responsible for compliance with all
applicable state or federal labor laws. Owner shall
indemnify, defend, and save Agent harmless from all
claims, investigations, and suites, or from Owner's
action or failures to act, with respect to any
alleged or actual violation of state or federal
labor laws. Conversely, Agent shall indemnify,
defend and save Owner harmless from all claims,
investigations, and suits, or from Agent's actions
or failure to act with respect to any alleged or
actual violations of state or federal labor laws.
Agent's or Owner's obligation with respect to such
violation(s) shall include payment of all
settlements, judgments, damages, liquidated damages,
penalties, forfeitures, back pay awards, court
costs, litigation expenses, and attorney's fees.
Section 10 - MAINTENANCE AND REPAIR
Agent is authorized to make or cause to be made,
through contracted services or otherwise, all
ordinary repairs and replacements reasonably
necessary to preserve the Premises in its present
condition and for the operating efficiency of the
Premises, and all alterations required to comply
with lease requirements, governmental regulations,
or insurance requirements. Agent is also authorized
to decorate the Premises and to purchase or rent, on
Owner's behalf, all equipment, tools, appliances,
materials, maintenance, or operation of the
Premises. Such maintenance and decorating expenses
shall be made in accordance to approved budget and
shall be paid out of the Operating (and/or) Reserve
Account(s). This section applies except where
decorating and/or maintenance are at tenants'
expense as stipulated in a lease.
10.1 APPROVAL FOR EXCEPTIONAL MAINTENANCE EXPENSE
The expense to be incurred for any one item of
maintenance alteration, refurbishing, or repair
shall not exceed the sum of $5,000 unless such
expense is specifically authorized by Owner or is
incurred under such circumstances as Agent shall
reasonable deem to be an emergency. In an emergency
where repairs are immediately necessary for the
preservation and safety of the Premises, or to avoid
the suspension of any essential service to the
Premises, or to avoid danger to life or property, or
to comply with federal, state, or local law, such
emergency repairs shall be made by Agent at Owner's
expense prior approval.
Section 11 - CONTRACTS, UTILITIES AND SERVICES
Agent is authorized to negotiate contracts for non-
recurring items of expense, not to exceed $5,000,
unless approved by Owner, and to enter into
agreements in Owner's name for all necessary
repairs, maintenance, minor alterations, and utility
services. Agent shall, in Owner's name and at
Owner's expense, make contracts on Owner's behalf
for electricity, gas, telephone, fuel, or water, and
such other services as Agent shall deem necessary or
prudent for the operation of the Premises. All
utility deposits shall be the Owner's
responsibility, except that Agent may pay same from
the Operating (and/or) Reserve Account(s) at Owner's
request.
Section 12 - RELATIONSHIP OF AGENT TO OWNER
The relationship of the parties to this Agreement
shall be that of Principal and Agent, and all duties
to be performed by Agent under this Agreement shall
be for and on behalf of Owner, in Owner's name and
for Owner's account. In taking any under the
Agreement, Agent shall be acting only as Agent for
Owner, and nothing in this Agreement shall be
construed as creating a partnership, joint venture,
or any other relationship between the parties to
this Agreement except that of Principal and Agent,
or as requiring Agent to bear any portion of losses
arising out of or connected with the ownership or
operation of the Premises. Nor shall Agent at any
time during the period of this Agreement to be
considered a direct employee of Owner. Neither
party shall have the owner to bind or obligate the
other except as expressly set forth in this
Agreement except that Agent is authorized to act
with such additional authority and power as may be
necessary to carry out the spirit and intent of this
Agreement.
Section 13 - SAVE HARMLESS
The Owner will indemnify the Agent harmless against
and hold the Agent harmless from and against any
liabilities, damages, costs and expenses (including
reasonable attorney's fees) sustained or incurred
for injury to any person or property in, about, and
in conjunction with the buildings, unless such
injury shall be caused by the Agent's own negligence
or willful misconduct; and any liability, damages,
penalties, costs and expenses (including reasonable
attorney's fees) statutory or otherwise, for all
acts performed by the Agent in accordance with the
terms of this Agreement or pursuant to the
instructions of the Owner, provided, in each of the
foregoing instances, that the Agent promptly advises
the Owner of its receipt of information concerning
any such injury and the amount of any such
liability, damages, penalties, costs and expenses.
The Agent will indemnify the Owner harmless against
and hold the Owner harmless from and against; any
liabilities, damages, costs and expenses (including
reasonable attorney's fees) sustained or incurred
for injury to any person or property in, about, and
in conjunction with the buildings caused by the
Agent's own negligence or willful misconduct; and
any liability, damages, penalties, costs and
expenses (including reasonable attorney's fees)
statutory or otherwise, for all acts performed by
the Agent not in accordance with the terms of this
Agreement or not pursuant to the instructions of the
Owners.
Section 14 - LIABILITY INSURANCE
Owner and Agent shall obtain and keep in force
adequate insurance against physical damage (e.g.
fire with extended coverage endorsement, boiler and
machinery, etc.) and against liability for loss,
damage, or injury to property or persons which might
arise out of the occupancy, management, operation,
or maintenance of the Premises. The amounts and
types of insurance shall be acceptable to both Owner
and Agent, and any deductible required under each
insurance policies shall be Owner's expense. Agent
shall be covered as additional insured on all
liability insurance maintained with respect to the
Premises. Liability insurance shall be adequate to
protect the interest of both Owner and Agent and in
form, substance, and amounts reasonable satisfactory
to Agent. Owner agrees to furnish Agent with
certificates evidencing such insurance or with
duplicate copies of such policies within 10 days of
the execution of this Agreement. If Owner fails to
do so, Agent may but shall not be obligated to place
said insurance and charge the cost thereof to the
Operating (and/or) Reserve Account(s). Said
policies shall provide that notice of default or
cancellation shall be sent to Agent as well as Owner
and shall require a minimum of 30 days written
notice to Agent before any cancellation of or
changes to said policies.
Section 15 - AGENT ASSUMES NO LIABILITY
Agent assumes no liability whatsoever for any acts
or omissions of Owner or any previous owners of the
Premises, or any previous management or other agent
of either. Agent assumes no liability for any
failure of or default by any tenant in the payment
of any rent or other charges due Owner or in the
performance of any obligations owned by any tenant
to Owner pursuant to any lease or otherwise. Nor
does Agent assume any liability for previously
unknown violations or environmental or other
regulations which may become unknown during the
period of this Agreement is in effect. Any such
regulatory violations or hazards discovered by
Agent shall be brought to the attention of the
Owner in writing and Owner shall promptly cure
them.
Section 16 - OWNER RESPONSIBLE FOR ALL EXPENSES OF
LITIGATION
Owner shall reimburse all reasonable expenses
incurred by Agent, including but not limited to,
attorneys' fee and Agent's costs and time, any
liability, fines, penalties or the like, in
connection with any claim, proceeding, or suit
involving an alleged violation by Agent or Owner, or
both, of any law pertaining to fair employment, fair
credit reporting, environmental protection, rent
control, taxes, or fair housing, including, but not
limited to, any law prohibiting or making illegal
discrimination on the basis or race, sex, creed,
color, religion, national origin, or mental or
physical handicap, provided, however, that Owner
shall not be responsible to Agent for any such
expenses in the event Agent is finally adjudged to
have personally, and not in a representative
capacity, violated any such law. Nothing contained
in this Agreement shall obligate Agent to employ
legal counsel to represent Owner in any such
proceeding or suit.
16.1 FEES FOR LEGAL ADVICE
Owner shall pay reasonable expenses incurred by
Agent in obtaining legal advice regarding compliance
with any law affecting the Premises or activities
related to them. If such expenditure also benefits
others for whom Agent in this Agreement acts in a
similar capacity, Owner agrees to pay an apportioned
amount of such expense.
Section 17 - AGENT'S COMPENSATION AND EXPENSES
As compensation for the services provided by Agent
under this Agreement (and exclusive of reimbursement
of expenses to which Agent is entitled hereunder).
Owner shall pay Agent as follows:
17.1 FOR MANAGEMENT SERVICES
The greater of (i) $ N/A per month or (ii) 9% of the
total monthly gross receipts from the premises,
payable by the 10th day of the current month for the
duration of this Agreement. Payments due Agent for
Periods of less than a calendar month shall be
prorated over the number of days for which
compensation is due. The percentage amount set
forth in (ii) above shall be based upon the total
gross receipts from the premises during the
preceding month.
The term "gross receipts" shall be deemed to include
all collected slip rents and other income and
charges from the normal operation of the Premises,
including, but not limited to, rents, parking fees,
forfeited security deposits, other fees and
deposits, special charges listed in paragraph 3.2,
or excess interest on security deposits (from
paragraph 3.3), and other miscellaneous income.
17.2 FOR APARTMENT LEASING
N/A.
17.3 FOR COMMERCIAL LEASING
N/A.
17.4 FOR MODERNIZATION (REHABILITATION/CONSTRUCTION)
N/A.
17.5 FOR FIRE RESTORATION
10% of total restoration if Claremont Management
Corporation acts as general contractor.
17.6 FOR OTHER ITEMS OF MUTUAL AGREEMENT
To be determined if situation arises.
17.7 INTEREST ON UNPAID SUMS
Any sums due Agent under any provisions of this
Agreement, and not paid within 30 days after such
sums have become due, shall bear interest at the
rate of Fleet prime rate.
Section 18 - REPRESENTATIONS
Owner represents and warrants: That Owner has full
power and authority to enter this Agreement; that
there are no written or oral agreements affecting
the Premises other than tenant leases, copies of
which have been furnished to Agent; that there are
no recorded easements, restrictions, reservations,
or rights of way which adversely affect the use of
the Premises for the purposes intended under this
Agreement; that to the best of Owner's knowledge,
the property is zoned for the intended use; that all
leasing and other permits for the operation of the
Premises have been secured and are current; that the
land and its been secured and are current; that the
land and its construction and operation do not
violate any applicable statutes, laws, ordinances,
rules regulations, orders, or the like (including,
but not limited to, those pertaining to hazardous or
toxic substances); that the land does not contain
any asbestos, urea, formaldehyde, radon, or other
toxic or hazardous substance; and that no unsafe
conditions exists.
Section 19 - STRUCTURAL CHANGES
Owner expressly withholds from Agent any power or
authority to make any changes in any land, or to
make any other major alterations or additions in or
to any such land or improvements, or to incur any
expense chargeable to Owner other than expenses
related to exercising the express powers vested in
Agent through this Agreement, without the prior
written consent of the following person or his
designee:
Terrence Sullivan
Boston Bay Capital, Inc.
One Liberty Square
Boston, MA 02109
However, such emergency repairs as may be required
because of danger to life or property, or which are
immediately necessary for the preservation and
safety of the Premises or the safety of the tenants
and occupants thereof, or required to avoid the
suspension of any necessary service to the Premises,
or to comply with any applicable federal, state, or
local laws, regulations, or ordinances, shall be
authorized pursuant to paragraph 10.1 of this
Agreement, and Agent shall notify Owner
appropriately.
Section 20 - BUILDING COMPLIANCE
Agent does not assume and is given no responsibility
for compliance of the Premises or any building
thereon or any equipment therein with the
requirements of any building codes or with any
statue, ordinance, law, or regulation or any
governmental body or of any public authority or
official thereof having jurisdiction, except to
notify Owner promptly or forward to Owner promptly
any complaints, warnings, notices, or summons
received by Agent relating to such matters. Owner
represents that to the best of Owner's knowledge the
Premises and all such equipment comply with all such
requirements, and Owner authorizes Agent to disclose
the ownership of the Premises to any such officials
and agrees to indemnify and hold Agent, its
representatives, servants, and employees, harmless
of and from all loss, cost, expense, and liability
whatsoever which may be imposed by reason of any
present or future violation or alleged violation of
such laws, ordinances, statues, or regulations.
Section 21 - TERMINATION
21.1 TERMINATION BY EITHER PARTY
This Agreement may be terminated by either Owner or
Agent, with or without cause, at the end of the
initial term or of any following term year upon the
giving of 30 days' written notice prior to the end
of said initial term or following terming year.
21.2 TERMINATION FOR CAUSE
Notwithstanding the foregoing, the Agreement shall
terminate in any event, and all obligations of the
parties hereunder shall cease (except as to
liabilities or obligations which have accrued or
arisen prior to such termination, or which accrue
pursuant to paragraph 21.3 as a result of such
termination, and obligations to insure and
indemnify), upon the occurrence of any of the
following events:
a. BREACH OF AGREEMENT - Thirty (30) days after
the receipt of notice by either party to the other
specifying in detail a material breach of this
Agreement, if such breach has not been cured within
said thirty (30) day period; or if such breach is of
a nature that it cannot be cured within said (30)
day period but can not be cured with a reasonable
time thereafter, if efforts to cure such breach have
not commenced or/and such efforts are not proceeding
and being continued diligently both during and after
such thirty (30) day period prior to the breach
being cured. HOWEVER, the breach of any obligation
of either party hereunder to pay any monies to the
other party under the terms of this Agreement shall
be deemed to be curable within thirty (30) days.
21.2 TERMINATION FOR CAUSE (Cont.)
b. FAILURE TO ACT, ETC. - In the event that any
insurance required of Owner is not
maintained without any lapse, or it is alleged or
charged that the Premises, or any portion thereof,
or any act or failure to act by Owner, its agent and
employees with respect to the Premises, fails to
comply with any law or regulations, or any order or
ruling of any public authority, and Agent, in its
sole discretion, considers that the action or
position of Owner or its representatives with
respect thereto may result in damage or liability to
Agent, or disciplinary proceeding with respect to
Agent's license. Agent shall have the right to
terminate this Agreement at any time by written
notice to Owner of its election to do so, which
termination shall be effective upon the service of
such notice. Such termination shall not release the
indemnities of Owner set forth herein.
c. EXCESSIVE DAMAGE - Upon the destruction of or
substantial damage to the Premises by any cause, or
the taking of all or a substantial portion of the
Premise of the Premises by eminent domain, in either
case making it impossible or impracticable to
continue operation of the Premises.
d. INADEQUATE INSURANCE - If Agent deems that the
liability insurance obtained by Owner per section 14
is not reasonable satisfactory to protect its
interest under this Agreement, and if Owner and
Agent cannot agree as to adequate insurance. Agent
shall have the right to cancel this Agreement upon
the service of notice to Owner.
21.3 TERMINATION COMPENSATION
If (i) Owner terminates this Agreement before the
end of the initial term or any subsequent term year
as provided in paragraph 21.1 above for any reason
other than for a breach by Agent under paragraph
21.2 (a) above, or if (ii) Agent terminates this
Agreement for a breach by Owner under paragraph 21.2
(a) above or pursuant to the provisions of paragraph
21.2 (b) or 21.2 (d) above, then in any such event,
Owner shall be obligated to pay Agent as liquidated
damages an amount equal to the management fee earned
by Agent, as determined under paragraph 17.1 above,
for the calendar month immediately preceding the
month in which the notice of termination is given to
Agent or to Owner, multiplied by the number of
months and/or portions thereof remaining from the
termination date until the end of the initial term
or term year in which the termination occurred.
Such damages, plus any amounts accruing to Agent
prior to such termination, shall be due and payable
upon termination of this Agreement. To the extent
that funds are available, such sums shall be payable
from the Operating (and/or) Reserve Account(s). Any
amount due in excess of the funds available from the
Operating (and/or) Reserve Account(s) shall be paid
by Owner to Agent upon demand.
21.4 OWNER RESPONSIBLE FOR PAYMENTS
Upon Termination or withdrawal from this Agreement,
Owner shall assume the obligations of any contract
or outstanding bill executed by Agent under this
Agreement for and on behalf of Owner and
responsibility for payment of all unpaid bills. In
addition, Owner shall furnish Agent security, in an
amount satisfactory to Agent, against any
obligations or liabilities with Agent may have
properly incurred on Owner's behalf under this
Agreement.
Agent may withhold funds for ninety (90) days after
the end of the month in which this Agreement is
terminated, in order to pay bills previously
incurred by not yet invoiced and to close accounts.
Agent shall deliver to Owner, within ninety (90)
days after the end of the month in which this
Agreement is terminated, any balance of monies due
Owner or of tenant security deposits, or both which
were held by Agent with respect to the Premises, as
well as a final accounting reflecting the balance of
income and expenses with respect to the Premises as
of the date of termination or withdrawal, and all
records, contracts, leases, receipts for deposits,
and other papers or documents which pertain to the
Premises.
21.5 SALE OF PREMISES
In the event that the Premises are sold by Owner
during the period of this Agreement, Agent may, upon
agreement with Owner and in accordance with Owner's
partnership agreement, obtain rights of
representation in the sale as stated in a specific
sales agreement to be negotiated separately. Upon
transfer of ownership, this Agreement shall
terminate by mutual consent of Owner and Agent under
the term and conditions set forth below:
The agreement shall automatically terminate
upon sale of premises to a bona fide Third
Party without penalty. A minimum of sixty days
notice is required.
Section 22 - INDEMNIFICATION SURVIVES TERMINATION
All representatives and warranties of the parties
contained herein shall survive the termination of
this Agreement. All provisions of this Agreement
that require Owner to have insured or to defend,
reimburse, or indemnify Agent (including, but not
limited to, paragraphs, 2.1, 2.3, 5, 8.4, 9.2, 13,
14, 15, 16, 17.7, 20, 21.3 and 21.4) shall survive
any termination; and if Agent is or becomes involved
in any proceedings or litigation by reason of having
been Owner's Agent, such provisions shall apply as
if this Agreement were still in effect.
Section 23 - HEADINGS
All headings and subheadings employed within this
Agreement and in the accompanying List of Provisions
are inserted only for convenience and ease of
reference and are not to be considered in the
construction or interpretation of any provision of
this Agreement.
Section 24 - FORCE MAJEUR
Any delays in the performance of any obligation of
Agent under this Agreement shall be excused to the
extent that such delays are caused by wars, national
emergencies, natural disasters, strikes, labor
disputes, utility failures, governmental
regulations, riots, adverse weather, and other
similar causes not within the control of Agent, and
any time periods required for performance shall be
extended accordingly.
Section 25 - COMPLETE AGREEMENT
This Agreement, including any specified attachments,
constitutes the entire agreement between Owner and
Agent with respect to the management and operation
of the Premises and supersedes and replaces any and
all previous management agreements entered into
or/and negotiated between Owner and Agent relating
to the Premises covered by this Agreement. No
change to this Agreement shall be valid unless made
by supplemental written agreement executed and
approved by Owner and Agent. Except as otherwise
provided herein, any and all amendments, additions,
or deletions to this Agreement shall be null and
void unless approved by Owner and Agent in writing.
Each party to this Agreement hereby acknowledges and
agrees that the other party has made no warranties,
representations, covenants, or agreements, express
or implied, to such party, other than those
expressly set forth herein, and that each party, in
entering into and executing this Agreement, has
relied upon no warranties, representations,
covenants, or agreement, express or implied, to such
party, other than those expressly set forth herein.
Section 26 - RIGHTS CUMULATIVE; NO WAIVER
No right or remedy herein conferred upon or reserved
to either of the parties to this Agreement is
extended to be exclusive of any other right or
remedy, and each and every right and remedy shall be
cumulative and in addition to any other right or
remedy given under this Agreement or now or
thereafter legally existing upon the occurrence of
an event or default under this Agreement. The
failure of either party to this Agreement to insist
at any time upon the strict observance or
performance of any of the provisions of this
Agreement, or to exercise any right or remedy as
provided in this Agreement, shall not impair any
such right or remedy with respect to subsequent
defaults. Every right and remedy given by this
Agreement to the parties to it may be exercised from
time to time and as often as may be deemed expedient
by those parties.
Section 27 - APPLICABLE LAW AND PARTIAL INVALIDITY
The Execution, interpretation, and performance of
this Agreement shall in all respects be controlled
and governed by the laws of the State of
Massachusetts. If any part of this Agreement shall
be declared invalid or unenforceable, Agent shall
have the option to terminate this Agreement by
notice to Owner.
Any notices, demands, consents, and report necessary
or provided for under this Agreement shall be in
writing and shall be addressed as follows, or at
such other address as Owner and Agent individually
may specify hereafter in writing:
Agent: Claremont Management Corporation
Batterymarch Park II
Quincy, MA 02169
ATTN: Charles M. Moran, Jr.
Owner: Henderson's Wharf Marina L.P.
c/o Boston Bay Capital, Inc.
One Liberty Square
Boston, MA 02109
ATTN: Terrence P. Sullivan
Such notice or other communication may be mailed by
United States registered or certified mail, return
receipt requested, postage prepaid, and may be
deposited in a United States Post Office or a
depository for the receipt of mail regularly
maintained by the post office. Such notices,
demands, consents, and reports may also be delivered
by hand or by any other receipted method or means
permitted by law. For purposes of this Agreement,
notices shall be deemed to have been "given" or
"delivered" upon personal delivery thereof forty-
eight (48) hours after having been deposited in the
United States mails as provided herein.
Section 28 - AGREEMENT BINDING UPON SUCCESSORS AND
ASSIGNS
This Agreement shall be binding the parties hereto
and their respective personal representatives,
heirs, administrators, executors, successors and
assigns.
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have affixed
or caused to be affixed their respective signatures this
_________ day of _______________ 1995.
Witnesses: Henderson's Wharf Marina,
L.P.
a Delaware Limited Partnership
("Borrower")
By: Henderson's Wharf
Development Corporation.
a Delaware Corporation,
General Partner of
Henderson's Wharf
Baltimore, L.P.
__________________________ By:
_________________________________
Terrence P. Sullivan,
President
By: Historic Preservation
Properties 1990 L.P.
TAX CREDIT FUND, a
Delaware L.P., General
Partner of Henderson's
Wharf Baltimore, L.P.
By: Boston Historic
Partners II L.P., General
Partner of
Historic Preservation Properties
1990 L.P. Tax Credit
Fund
By: Portfolio Advisory
Services II, Inc.
General Partner of BHP
II Advisors L.P.
___________________________ By:
____________________________
Terrence
P. Sullivan, President of
Portfolio
Advisory Services II, Inc.
___________________________ By:
_________________________________
Terrence P.
Sullivan, General Partner of
BHP II Advisors
L.P.
Agent:
Firm: Claremont
Management Corporation
___________________________ By:
_______________________________
Charles M. Moran,
Jr., President
