UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(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, 1996
[ ] 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
Historic Preservation Properties 1990 L.P. Tax Credit Fund
(Exact name of registrant as specified in its charter)
Delaware 04-3066191
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Batterymarch Park II, Quincy, MA 02169
(Address of principal executive offices)
Registrant's telephone number, including area code 617-472-1000
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. [x]
HISTORIC PRESERVATION PROPERTIES 1990 L.P. TAX CREDIT FUND
1996 FORM 10-K ANNUAL REPORT
TABLE OF CONTENTS
Sequential
Page No. Page No.
PART I
Item 1 Business K-3 4
Item 2 Properties K-8 9
Item 3 Legal Proceedings K-8 9
Item 4 Submission of Matters
to a Vote of Unit Holders K-8 9
PART II
Item 5 Market for Registrant's
Units and Related Unit
Holder Matters K-9 10
Item 6 Selected Financial Data K-10 11
Item 7 Management's Discussion and
Analysis of Financial
Condition and Results of
Operations K-11 12
Item 8 Financial Statements and
Supplementary Data K-14 15
Item 9 Changes in and Disagreements
with Accountants on Accounting
and Financial Disclosure K-14 15
PART III
Item 10 Director and Executive
Officer of the Registrant K-15 16
Item 11 Executive Compensation K-16 17
Item 12 Unit Ownership of Certain
Beneficial Owners and
Management K-16 17
Item 13 Certain Relationships and
Related Transactions K-17 18
PART IV
Item 14 Exhibits, Financial Statement
Schedules and Reports on
Form 8-K K-18 19
SIGNATURES K-26 27
SUPPLEMENTAL INFORMATION K-27 28
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.
PART I
Item 1. Business.
Historic Preservation Properties 1990 L.P. Tax Credit Fund (the
Partnership or HPP'90), 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 (CMC), 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.
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 purchase of the Ventures was 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, 1996, 100% of the limited
partners' capital contributions (net of selling commissions, 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, 1996, 128 of
which are owned by the Building Venture and 9 of which are owned by
unrelated parties.
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.
On February 27, 1996, HPP'90 issued a $6,000,000 deed of trust
note to 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 $332,682.
The deed of trust note bears interest at 7.85% and requires monthly
principal and interest payments in the amount of $49,628 which commenced
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 2016.
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 (February 2006) 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 released approximately $1,057,000 of
suspended Rehabilitation Tax Credits to the Partnership from the Building
Venture in 1996. These credits had been suspended due to the fact
that original financing was seller provided. No Rehabilitation Tax
Credits have been allocated to the Partnership in 1995 and 1994 from the
Building Venture.
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, 1996, approximately 95% 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 1996 and 1995 was 71%
and 74%, respectively.
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 for $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 Massachusetts corporation, was
admitted as the limited partner of the Building Venture. Generally,
allocations of net profits and losses, as well as cash flow, were 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 management agreement and inn lease (Contracts), as well as
consulting agreement (Consulting Agreement) with HMI. 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.
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.
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. The property is
carried at the lower of cost or net realizable value.
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'90'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'90, HWDC and HWFP, Inc. executed
the First Amendment to the Third Amended and Restated Agreement of
Limited Partnership of Henderson's Wharf Marina L.P. the Partnership
redeemed HWFP's 50% limited partnership interest in the Marina Venture
by issuing a $225,000 promissory note 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 of
this transaction, HPP'90's limited partnership interest in the Marina
Venture increased to 98%, while HWDC's general partnership interest
increased to 2%.
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.
In 1993, the Ventures terminated the Contracts with
HMI. Initially, HPP'90 did not reach an agreement with HMI as to whether
any additional payments were due under the Contracts as a result of
the termination. During October 1994, HPP'90 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 the substantial expense of
burdensome and protracted litigation. In January 1995, HPP'90 entered into
an agreement on behalf of the Ventures to pay HMI contract termination
settlement payments (Settlement Payments) totaling $271,108. The
Settlement Payments required an initial payment of $36,000 due on
January 27, 1995 and requires monthly payments of $3,221 which commenced
September 1995 and are payable 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'90'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'90'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'90 are permitted until all Settlement Payments are
paid in full. As of December 31, 1996 and 1995, unpaid settlement payments
included in accrued expenses and other liabilities totaled $183,576 and
$222,224, respectively.
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 CMC 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 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. As of December 31, 1996, the
Ventures' operating cash and contingency reserves totaled $262,481. 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
$124,438, $94,841, and $102,600, for the years ended December 31, 1996,
1995 and 1994, respectively.
Item 2. Properties.
See Item 1 above.
Item 3. Legal Proceedings.
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.
No matters were submitted to a vote of Unit holders.
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, 1997, 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, 1996, 1995 and
1994, no distributions of Cash Flow or Sale or Refinancing
Proceeds were paid or accrued to the Limited Partners.
Item 6. Selected Financial Data.
Periods Ended December 31,
1996 1995 1994 1993 1992
Revenues $2,909,744 $ 2,769,347 $2,501,562 $2,220,822 $ 2,256,736
Net Loss before extraordinary gain
$ (258,989) $(359,021)$ (667,504) $ (917,379) $(2,009,440)
Extraordinary gain
$ 0 $ 0 $ 0 $ 0 $ 1,075,000
Net Loss $(258,989) $ (359,021) $(667,504) $(917,379)$ (934,440)
Net Loss per unit of Investor
Limited Partnership Interest
based on Units outstanding:
Loss before extraordinary gain
$ (15.67) $ (21.72) $ (40.39) $ (55.51) $ (121.59)
Extraordinary gain
$ 0 $ 0 $ 0 $ 0 $ 65.05
Net Loss $ (15.67) $ (21.72) $ (40.39) $ (55.51)$ (56.54)
Total Assets as of December 31,
$15,392,204 $ 15,483,025 $15,849,184 $16,276,877 $16,997,456
Long Term Debt as of December 31,
$ 6,123,084 $ 5,590,418 $ 5,590,418 $ 5,350,000 $ 5,350,000
Cash Distributions per weighted
average Unit outstanding
$ 0 $ 0 $ 0 $ 0 $ 0
Rehabilitation Tax Credit per Unit
$ 63.94 $ 0 $ 0 $ 0 $ 0
See Item 7 for a discussion of the factors that may materially affect
the foregoing information in future years.
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, 1996, 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, 1996, the Ventures and HPP'90 had
cash, excluding security deposit cash, of $284,996 and $99,538,
respectively. HPP'90'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'90
to fund general and administrative expenses of running the public fund.
As mentioned in Item 1, on February 27, 1996, the Building Venture obtained
financing of $6,000,000 at 7.85% which requires principal and interest
monthly payments of $49,628 based on a 20 year amortization and matures in
March 2016. 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 (February 2006) or anytime thereafter.
The deed of trust note is secured by the BuildingVenture's property,
rents and assignment of leases and is guaranteed by the Building Venture.
HPP'90's short-term liquidity depends upon its ability
to receive distributions from the Building Venture. 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'90.
Settlement Payments due HMI, that were negotiated as part of
the contract termination (See Item 1), are secured by 100% of HPP'90'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'90'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 a total loss
under generally accepted accounting principles of $258,989 in 1996 which
includes depreciation and amortization of $591,751. The Partnership
released previously suspended Rehabilitation Tax Credits of approximately
$1,057,000 from the Building Venture in 1996.
The Building Venture was fully operational during the entire
year. The Marina Venture had operated on a minimal number of its 256
slips since 1991 due to significant repairs necessary to be fully
operational and, during 1996, the Marina Venture added $23,049 of
utility, safety and other improvements, increasing the number of
fully operational slips to 118. Substantial repairs are still needed
to bring the entire Marina to full operation.
The results of the Partnership's operations in future years
should be comparable to 1996 numbers provided the Building Venture is
able to maintain greater than 90% occupancy in the Apartments and greater
than 65% occupancy in the Inn. Expense levels are expected to 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 annual leases. The Apartments have achieved
stabilized occupancy with occupancy rates of 95%, 94% and 93% for the
years 1996, 1995 and 1994, respectively. Management is projecting
economic occupancy for the Apartments to be approximately 93% for
calendar year 1997 which will be indicative of the expected levels for
future years.
The average occupancy of the Inn for the years 1996, 1995 and
1994 was 71%, 74%, and 64%, respectively. The average daily rate for room
rentals increased approximately 7% in 1996, approximately 7% in 1995 and
approximately 4% in 1994, respectively, from previous years. 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
1997 and Inn occupancy in future years is expected to stay at the same
level, depending upon market conditions.
The Partnership's net loss for 1996 decreased by
approximately $100,000 when compared to 1995, primarily due to increased
rental revenue. The increase in rental and related revenue for 1996,
compared to 1995, was primarily due to increases in rental rates at the
Inn and Apartments. The increase in rental and related revenue in 1995,
compared to 1994, is due to increased occupancy at the Inn and increased
rental rates at both the Inn and Apartments. The increases in interest and
other income from 1994 to 1995 and 1995 to 1996 is a result of the
increased activity at the Inn.
Operating and administrative expenses from 1994 to 1995 and 1995
to 1996 increased due to the fees and other administrative expenses
associated with engaging third party entities to perform asset
management, accounting and investor services for HPP'90. (Professional
fees increased in 1995 from 1994 and decreased from 1995 to 1996 due to
professional services incurred to analyze the Partnership's property
acquisitions and financing transactions). Payroll services increased in
1995 from 1994 due to increased activity of the Inn and decreased in
1996 compared to 1995 due to certain efficiencies implemented by
management. Management fees decreased in 1995 from 1994 as a direct
result of the negotiated reduced fixed fee contract with the previous
property manager. The increase in management fees in 1996 from 1995 is
due to the current property management agreement, executed in the fourth
quarter of 1995, which calculates management fees based on gross
receipts and increased revenues of 1996.
During 1994, HPP'90 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. As of December 31, 1996 and 1995,
unpaid settlement payments included in accrued expenses and other
liabilities totaled $183,576 and $222,224, respectively.
On February 27, 1996, HPP'90 issued a $6,000,000 deed of trust
note to 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
$332,682 (see Note 4 of the financial statements). The deed of
trust note bears interest at 7.85% and requires monthly principal and
interest payments in the amount of $49,628 which commenced in April
1996. All remaining unpaid principal and interest is due in March 2016.
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 (February 2006) 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 released approximately $1,057,000 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.
Based on 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. The property is
carried at the lower of cost or net realizable value.
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'90'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 as provided for in the Marina
Venture's Third Amended and Restated Agreement of Limited Partnership.
On February 27, 1996, HPP'90, 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 the
Partnership redeemed HWFP's 50% limited partnership interest in the Marina
Venture by issuing a $225,000 promissory 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'90's limited
partnership interest in the Marina Venture increased to 98% and HWDC's
general partnership interest in the Marina Venture increased to 2%.
The Marina Venture had operated a minimal number of slips
since 1991 due to the significant repairs necessary to be fully
operational. During 1996 the Marina Venture added $23,049 of utility,
safety and other improvements, and increased the number of fully
operational slips to 118. Substantial repairs are still needed to bring
the entire marina to full operation.
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 Ventures are subject to substantial
mortgage debt as of December 31, 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
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 50
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, 50, 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
II Limited Partnership. In addition, an entity controlled by Mr. Sullivan
serves as the general partner of Institutional Credit Partners 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, 1996, 1995 and 1994. The Partnership reimbursed an
affiliate of the General Partner $65,903 and $46,063 for administrative
expenses for the years ended December 31, 1995 and 1994. No reimbursments
were made for the year ended December 31, 1996.
For the year ended December 31, 1996, the Partnership
allocated approximately $6,800 of taxable loss and Rehabilitation Tax
Credits of approximately $10,600 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, 1997 (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.
(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, 1997. 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, 1996, 1995 and 1994.
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. 3331778, 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). 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.
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.
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.
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(b) 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.
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 10(b) to the Partnership's
Annual Report on Form 10-K for the year ended December 31, 1994 and
incorporated herein by this reference.
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. (7)
XLVIII. Asset Management Agreement between Historic
Preservation Properties 1990 L.P. Tax Credit Fund and
Claremont Management Corporation dated
October 1, 1995.(7)
XLIX. Deed of Trust Note between Historic
Preservation Properties 1990 L.P. Tax Credit Fund and Aid
Association for Lutherans, dated February 27, 1996.
L. Guaranty among Historic Preservation Properties 1990
L.P. Tax Credit Fund, Henderson's Wharf Baltimore L.P.
and Aid Association for Lutherans, dated February 27,
1996.
LI. Indemnity Deed of Trust and Security Agreement
between Henderson's Wharf Baltimore L.P. and Aid
Association for Lutherans, dated February 27, 1996.
LII. Assignment of Rents and Leases between Henderson's
Wharf Baltimore L.P. and Aid Association for Lutherans,
dated February 27, 1996.
LIII. Escrow Agreement among Henderson's Wharf
Baltimore L.P., Calvin Gregg Ryan and Douglas G. Worrall,
dated February 27, 1996.
LIV. Attorney's letter concerning purchase of condominium
and parking units sold by Joseph and Eileen Mason to
Henderson's Wharf Baltimore L.P., dated February 20,
1996.
LV. Attorney's letter concerning purchase of condo
condominium and parking units sold by Anne B. Cook to
Henderson's Wharf Baltimore L.P., dated February 20,
1996.
LVI. Partnership Interest Redemption Agreement among
Henderson's Wharf Marina L.P., HWFP, Inc., Henderson's
Wharf Development Corporation, and Historic Preservation
Properties 1990 L.P. Tax Credit Fund, dated February 27,
1996.
(7) Previously filed as part of exhibit 10(b) to the Partnership's Annual
Report on Form 10-K for the year ended December 31, 1995 and incorporated
herein by this reference.
LVII. Promissory Note between Henderson's Wharf
Marina L.P. and HWFP, Inc., dated February 27, 1996.
LIX. Assignment of Leases and Rents between Henderson's
Wharf Marina L.P. and HWFP, Inc., dated February 27,
1996.
10 (c) Asset Management Agreement between Historic
Preservation Properties 1990 L.P. Tax Credit Fund and
Hillcrest Asset Management, Inc. dated January 1, 1992.(8)
22 List of Ventures. (9)
28 (ii) (a) Supplement No. 1 to the Partnership's Prospectus
dated August 1, 1990. (10)
(b) Supplement No. 2 to the Partnership's Prospectus
dated December 3, 1990. (10)
(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. (10)
(8) 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.
(9) 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.
(10) 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.
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 15, 1997 By:
Terrence P. Sullivan, President
and
Date: March 15, 1997 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 15, 1997 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 15, 1997 Advisors Limited Partnership
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.
HISTORIC PRESERVATION PROPERTIES 1990 L.P. TAX CREDIT FUND
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED
DECEMBER 31, 1996, 1995 AND 1994
TOGETHER WITH INDEPENDENT AUDITORS' REPORTS
ANNUAL REPORT ON FORM 10-K 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, 1996 and 1995......................................... F-4
Consolidated Statements of Operations for
the Years Ended December 31, 1996,
1995 and 1994............................................. F-5
Consolidated Statements of Partners' Equity
(Deficiency) for the Years Ended December 31,
1996, 1995 and 1994....................................... F-6
Consolidated Statements of Cash Flows for the
Years Ended December 31, 1996,
1995 and 1994............................................. F-7
Notes to Consolidated Financial Statements................... F-8
Independent Auditors' Report on Accompanying
Information.................................................. F-19
Consolidated Financial Statement Schedule:
Schedule III - Real Estate and Accumulated
Depreciation.............................................. F-20
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, 1996 and 1995,
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, 1996. 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 disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
HISTORIC PRESERVATION PROPERTIES 1990 L.P. TAX CREDIT FUND as of December
31, 1996 and 1995, and the results of its operations and cash flows for
each of the years in the three-year period ended December 31, 1996, in
conformity with generally accepted accounting principles.
Lefkowitz, Garfinkel, Champi & DeRienzo P.C.
Providence, Rhode Island
March 4, 1997
HISTORIC PRESERVATION PROPERTIES 1990 L.P. TAX CREDIT FUND
CONSOLIDATED BALANCE SHEETS - DECEMBER 31, 1996 AND 1995
ASSETS
1996 1995
INVESTMENT IN REAL ESTATE
Building and building improvements $ 15,178,365 $ 14,736,101
Land 97,034 97,034
Furniture and equipment 961,236 964,378
Marina - land and improvements 1,335,858 1,352,790
Deferred evaluation and acquisition
costs 1,102,600 1,102,600
18,675,093 18,252,903
Less accumulated depreciation and
and amortization 3,267,294 2,711,535
15,407,799 15,541,368
Reserve for realization of Marina
land and improvements (845,672) (845,672)
14,562,127 14,695,696
CASH AND CASH EQUIVALENTS, including security
deposit cash
(1996, $94,364; 1995, $86,716) 478,898 474,835
ESCROW DEPOSITS 100,204 54,270
DEFERRED COSTS, net of accumulated
amortization (1996, $16,192; 1995, $0) 178,096 51,121
OTHER ASSETS 72,879 207,103
$ 15,392,204 $ 15,483,025
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES:
Notes payable $ 6,123,084 $ 5,590,418
Accrued expenses and other liabilities 303,840 402,064
Security deposits 88,767 86,716
Total liabilities 6,515,691 6,079,198
COMMITMENTS (Notes 5 and 6)
MINORITY INTEREST - 268,325
PARTNERS' EQUITY
Limited Partners' equity-Units of Investor
Limited Partnership Interest, $1,000
stated value per Unit-issued and
outstanding - 16,361 units 8,930,109 9,186,508
General Partner's deficiency (53,596) (51,006)
Total partners' equity 8,876,513 9,135,502
$ 15,392,204 $ 15,483,025
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, 1996, 1995 AND 1994
1996 1995 1994
REVENUES:
Rental and related income $2,840,240 $2,706,446 $ 2,456,887
Interest and other income 69,504 62,901 44,675
2,909,744 2,769,347 2,501,562
EXPENSES:
Operating and administrative 182,618 120,957 62,152
Professional fees 61,797 100,006 41,661
Depreciation and amortization 591,751 568,217 571,366
Property operating expenses:
Payroll services 505,988 572,506 448,351
Condominium assessments 366,156 357,060 357,060
Real estate taxes 264,104 249,994 269,682
Management fees 124,438 94,841 102,600
Other operating expenses 533,582 541,785 520,156
Contract termination settlement - - 271,108
2,630,434 2,605,366 2,644,136
INCOME (LOSS) FROM OPERATIONS 279,310 163,981 (142,574)
INTEREST EXPENSE (541,643) (559,394) (551,448)
MINORITY INTEREST IN LOSS ON MARINA
VENTURE 3,344 36,392 26,518
NET LOSS $(258,989) $(359,021) $ (667,504)
NET LOSS ALLOCATED TO GENERAL PARTNER
$ (2,590) $ (3,590) $ (6,675)
NET LOSS ALLOCATED TO LIMITED PARTNERS
$(256,399) $(355,431) $ (660,829)
NET LOSS PER UNIT OF INVESTOR
LIMITED PARTNERSHIP INTEREST, BASED
ON 16,361 UNITS OUTSTANDING: $ (15.67) $ (21.72) $ (40.39)
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, 1996, 1995 AND 1994
Units of
Investor
Limited Investor
Partner- Limited General
ship Partners' Partner's
Interest Equity Deficiency Total
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
Net Loss - (256,399) (2,590) (258,989)
BALANCE, December 31, 1996 16,361 $ 8,930,109 $(53,596) $8,876,513
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, 1996, 1995 AND 1994
1996 1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (258,989) $ (359,021) $ (667,504)
Adjustments to reconcile net loss
to net cash provided by (used in)
operating activities-
Depreciation and amortization 591,751 568,217 571,366
Loss on disposal of equipment
18,339
Gain on sale of asset (7,000) - -
Deferred interest expense and
extension fee payable added
to principal of note payable - - 240,418
Contract termination settlement - - 271,108
Minority interest in loss on
Marina Venture (3,344) (36,392) (26,518)
Decrease in accrued expenses and
other liabilities (96,173) (7,523) (245,197)
Increase in escrow deposits (45,934) (9,971) (44,299)
(Increase) Decrease in other
assets 134,224 (157,745) 27,546
Net cash provided by (used in)
operating activities 314,535 (2,435) 145,259
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to building and
improvements (442,264) - -
Purchase of furniture & equipment (16,658) (3,827) (13,083)
Additions to Marina (23,049) - -
Proceeds from sale of asset 7,000 - -
Net cash used in investing
activities (474,971) (3,827) (13,083)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from refinancing
of mortgage note payable 6,000,000 - -
Payment of mortgage note payable (5,590,418) - -
Principal payments of mortgage
note payable (101,916) - -
Payment of deferred costs (143,167) (24,404) -
Net cash provided by (used in)
financing activities 164,499 (24,404) -
NET INCREASE (DECREASE) IN CASH 4,063 (30,666) 132,176
CASH AND CASH EQUIVALENTS,
BEGINNING OF YEAR 474,835 505,501 373,325
CASH AND CASH EQUIVALENTS,
END OF YEAR $ 478,898 $ 474,835 $ 505,501
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest $ 522,522 $ 559,044 $ 461,030
Non-cash financing activity: On February 27, 1996, the Partnership redeemed
the minority interest in the Marina Venture by issuing a $225,000 note
payable. The transaction resulted in a $39,981 reduction of basis in the
marina property.
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, 1996, 1995 AND 1994
(1) Organization
Historic Preservation Properties 1990 L.P. Tax Credit Fund
(HPP'90) was formed on October 4, 1989 under the Delaware Revised Uniform
Limited Partnership Act. The purpose of HPP'90 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, 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, and to operate such
properties.
Boston Historic Partners II Limited Partnership (BHP II), a
Delaware limited partnership, is the general partner of HPP'90, and
officers of Boston Capital Planning Group, Inc. (BCPG), an affiliate of BHP
II, were the initial limited partners of HPP'90. 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'90 were paid by BHP II. On June 29,
1990, the first Limited Partners were admitted to HPP'90 and operations
commenced.
The Amended and Restated Agreement of Limited Partnership
(Partnership Agreement) of HPP'90 generally provides that all net profits,
net losses, tax credits and cash distributions of HPP'90 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'90 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 1996, 1995 and 1994, BHP II incurred unaudited losses of
approximately $13,000, $13,000 and $14,000, respectively. BHP II's
unaudited deficit at December 31, 1996 was approximately $750,000.
HISTORIC PRESERVATION PROPERTIES 1990 L.P. TAX CREDIT FUND
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(2) General Partner - BHP II (Continued)
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'90.
Under the Partnership Agreement, a bankruptcy of BHP II could
result in the dissolution of HPP'90, 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'90. If an additional
general partner was admitted to HPP'90 prior to a bankruptcy of BHP II, the
business of HPP'90 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'90, HPP'90 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'90 and
another general partner is elected (under Delaware law, within 90 days a
unanimous vote of the Limited Partners to continue HPP'90 is required).
Although the Partnership Agreement provides for the above
mechanisms for continuing the business of HPP'90, BHP II's general partners
believe the most likely course of action would be to seek a successor or
additional general partner for HPP'90.
If such events were to happen whereby BHP II and/or HPP'90 could
not consummate the above, HPP'90 could be dissolved.
(3) Summary of Significant Accounting Policies Principles of Consolidation
At December 31, 1996, HPP'90 held a 99% general partner interest
in Henderson's Wharf Baltimore Limited Partnership (HWB). At December 31,
1996, HPP'90 held a 98% limited partner interest and Henderson's Wharf
Development Corp. (HWDC), a wholly-owned subsidiary of HPP'90, held a 2%
general partner interest in Henderson's Wharf Marina Limited Partnership
(HWM). All operating and financial policy decisions of (HWB) and (HWM) are
controlled by HPP'90 and HWDC.
The consolidated financial statements include the accounts of
HPP'90, Henderson's Wharf Baltimore, L.P. and Henderson's Wharf Marina,
L.P. after elimination of all intercompany transactions and accounts.
HISTORIC PRESERVATION PROPERTIES 1990 L.P. TAX CREDIT FUND
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(3) Summary of Significant Accounting Policies (Continued)
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.
Real Estate
Real estate is held for lease and stated at the lower of cost or
net realizable value. 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.
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 economic useful life of real property (40 years).
Cash, Cash Equivalents, and Concentration of Credit Risk
HPP'90 considers all highly liquid investments with a maturity of
three months or less when purchased as cash equivalents. Cash equivalents
at December 31, 1996 totaled $371,383.
At December 31, 1996 and 1995, HPP'90 had $263,307 and $204,684
of cash and cash equivalents, respectively, in banks which is in excess of
amounts insured by the Federal Deposit Insurance Corporation.
Deferred Costs
Deferred costs relating to HPP'90's notes payable are being
amortized on a straight-line basis over the terms of the notes.
Syndication Costs
Syndication costs were treated as a direct reduction of the
Limited Partners' equity accounts.
HISTORIC PRESERVATION PROPERTIES 1990 L.P. TAX CREDIT FUND
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(3) Summary of Significant Accounting Policies (Continued)
Revenue Recognition
Revenue from residential units, principally under annual
operating leases, is recorded when due. Revenue from rentals of inn units
is recognized when earned.
Income Taxes
No provision (benefit) for income taxes is reflected in the
accompanying consolidated financial statements of HPP'90. 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.
Reclassifications
Certain amounts in the 1995 financial statements and 1994
statements of operations and cash flows have been reclassified to conform to
the 1996 presentation.
(4) Investment in Real Estate
During 1990, HPP'90 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 residential apartment units with 152 indoor parking
spaces and a 38 room inn located at 1000 Fell Street, Baltimore, Maryland.
In addition to the inn, the building contains a total of 137 residential
units, 9 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'90 to the
Building Venture totaled $12,214,500 as of December 31, 1996.
HPP'90 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.
HISTORIC PRESERVATION PROPERTIES 1990 L.P. TAX CREDIT FUND
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(4) Investment in Real Estate (Continued)
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. The average occupancy for the year ended December
31, 1996 for the residential units was 95% and the average occupancy for
the inn was 71%.
On February 27, 1996, the Building Venture purchased three
condominium units and parking spaces owned by unrelated parties, in
conjunction with the refinancing of its note payable (see Note 5).
HPP'90's operations, principally accounting, investor services
and other general and administrative costs, are funded from distributions
by the Building Venture. During the year ended December 31, 1996, the
Building Venture distributed $203,000 to HPP'90.
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'90 purchased the Marina Venture for $1,266,363,
which included seller financing of $1,187,500. Contributions to the Marina
Venture by HPP'90 totaled $247,219 as of December 31, 1996.
HPP'90 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.
The Marina Venture had operated a minimal number of slips since
1991 due to the significant repairs necessary to be fully operational.
During 1996, the Marina Venture added $23,049 of utility, safety and other
improvements, and increased the number of fully operational slips to 118.
Substantial repairs are still needed to bring the entire marina to full
operation.
The Building Venture and the Marina Venture are collectively
referred to as "the Ventures".
HISTORIC PRESERVATION PROPERTIES 1990 L.P. TAX CREDIT FUND
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(4) Investment in Real Estate (Continued)
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'90, was admitted as a
general partner of the Ventures 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'90 as a general partner. Consequently, HWDC became the
sole general partner in the Marina Venture. HPP'90 and HWDC are
collectively referred to as the "Henderson's General Partners."
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'90'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 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.
During the year ended December 31, 1992, 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 reserved against its investment in
the marina land and improvements in the amount of $845,672. Consequently,
the property is carried at the lower of cost or net realizable value at
December 31, 1996.
In accordance with the termination of all HMI contracts (see Note
6), effective January 1, 1995 HMI also withdrew from the Building Venture
as a .1% limited partner and was replaced by HWDC.
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.
HISTORIC PRESERVATION PROPERTIES 1990 L.P. TAX CREDIT FUND
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(4) Investment in Real Estate (Continued)
On February 27, 1996, the Partnership redeemed HWFP's 50% limited
partnership interest in the Marina Venture by issuing a $225,000 promissory
note payable secured by the marina property (see Note 5). As a result of
this redemption, HPP'90's limited partnership interest in the Marina
Venture increased to 98% and HWDC's general partnership interest in the
Marina Venture increased to 2% as of the date of redemption.
(5) Notes Payable
The Building Venture originally financed $6,350,000 of the
purchase price of the property by issuing a purchase money note to the
seller, HWFP. 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'90 issued a $6,000,000 deed of trust
note to a third party lender which provided funds for the Building Venture
to refinance the then 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 $332,682. The deed of trust note bears
interest at 7.85%, amortizes over a 20-year schedule and requires monthly
principal and interest payments in the amount of $49,628, which commenced
April 1996 with the remaining unpaid principal and interest due in March
2016. 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 (February 2006) 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.
HISTORIC PRESERVATION PROPERTIES 1990 L.P. TAX CREDIT FUND
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(5) Notes Payable (Continued)
As mentioned in Note 4, on February 27, 1996, HPP'90, HWDC and
HWFP entered into the First Amendment to the Third Amended and Restated
Agreement of Limited Partnership of Henderson's Wharf Marina, L.P. by which
the Partnership redeemed HWFP's 50% limited partnership interest in the
Marina Venture by issuing a $225,000 promissory note payable 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 which commenced April 1996. The transaction resulted in a $39,981
reduction of basis in the marina property. HPP'90's limited partnership
interest in the Marina Venture increased to 98% and HWDC's general
partnership interest in the Marina Venture increased to 2% as of the date
of the redemption.
Approximate aggregate annual maturities of the deed of trust note
and promissory note for each of the next five years are as follows:
Year Ending December 31, Amount
1997 145,598
1998 157,425
1999 170,212
2000 183,997
2001 198,985
(6) Transactions With Related Parties, Commitments and Contingencies
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. On January 1,
1992, the Marina Venture entered into a long term Property Management
Agreement with HMI.
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. 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. The incentive fee commitment survives the December 31, 1991
expiration date of the Consulting Agreement and the termination of all
other agreements with HMI (see below).
HISTORIC PRESERVATION PROPERTIES 1990 L.P. TAX CREDIT FUND
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(6) Transactions With Related Parties, Commitments and Contingencies
(Continued)
Effective July 31, 1993, the Ventures terminated their respective
Management Agreement and Inn Lease with HMI.
During October 1994, HPP'90 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'90 entered into an agreement on
behalf of the Ventures to pay HMI contract termination settlement payments
(Settlement Payments) totaling $271,108. 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'90's economic
interest as a partner in the Ventures, as defined in the agreements; net
sales and refinancing proceeds; cash flow; return of capital contributions;
all of HPP'90's cash and marketable securities in excess of $150,000; and
all of the Ventures' cash in excess of the greater of $200,000 or reserves
required by lenders. No distributions to the partners of HPP'90 are
permitted until all Settlement Payments are paid in full. As of December
31, 1996 and 1995, unpaid Settlement Payments included in accrued expenses
and other liabilities totaled $183,576 and $222,224, respectively.
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. As of December 31, 1996, the Ventures'
operating cash and contingency reserves totaled $262,481. 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.
HISTORIC PRESERVATION PROPERTIES 1990 L.P. TAX CREDIT FUND
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(6) Transactions With Related Parties, Commitments and Contingencies
(Continued)
Management fees paid to McKenna and CMC by the Ventures totaled
$124,438, $94,841 and $102,600 for the years ended 1996, 1995 and 1994,
respectively.
On July 1, 1993, HPP'90 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, and for the year ended December 31, 1994,
totaled $65,903 and $46,063, respectively.
On October 1, 1995, HPP'90 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. Expense reimbursements to CMC
for the year ended December 31, 1996 and for the period October 1, 1995
through December 31, 1995 totaled $98,254 and $40,336, respectively.
According to a provision in one purchase and sale contract of one
of three condominiums purchased on February 27, 1996, the purchase price
for that condominium is the greater of the seller's outstanding mortgage
balance as of the date of purchase or the fair market value of the property
determined by independent appraisal through a period extending through June
1, 1999. At the February 27, 1996 closing, the purchase price paid was the
then outstanding balance of the seller's mortgage. If, through June 1,
1999, the fair market value is determined to be greater than the amount
paid at the closing, HWB will be required to pay the excess of the
determined fair market value over the purchase price paid at the closing to
the seller. As a part of the purchase agreement, HWB has established a
$25,000 collateral escrow in the event that an additional payment has to
be made to the seller.
HISTORIC PRESERVATION PROPERTIES 1990 L.P. TAX CREDIT FUND
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(7) Fair Value of Financial Instruments
The carrying amounts of cash and cash equivalents, escrow
deposits, accrued expenses and other liabilities, and security deposits at
December 31, 1996 and 1995 approximate their fair values due to their short
maturities. The fair value of the notes payable at December 31, 1996 and
1995 approximate their carrying amounts based on the interest rates
currently available to HPP'90 for similar financing arrangements. All
financial instruments 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, 1996 and 1995, and
for each of the years in the three-year period ended December 31, 1996
included in this Form 10-K and have issued our report thereon dated March
4, 1997. Our audits were made for the purpose of forming an opinion on the
1996 and 1995 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 4, 1997
HISTORIC PRESERVATION PROPERTIES 1990 L.P. TAX CREDIT FUND
SCHEDULE
REAL ESTATE & ACCUMULATED DEPRECIATION DECEMBER 31, 1996
IN THOUSANDS
Csts Capital
Initial Costs Subseq to Acq Gross Amounts
<TABLE>
<CAPTION>
Date of
Bldg Bldg Accum Construct Date Deprec
Descript and Encum- Improve Improve- Carrying Improve- Total Deprec Rehabili- Int Life
Ownership % brances Land ments ments Costs Land ments (Note 2) (Note 3) tation Acct (Years)
Residential/Building/Inn
Henderson's Wharf Baltimore L.P.
Baltimore, Maryland
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
99.9% (Note 5) $5,904 $ 97 $6,715 $8,463 $350 $ 97 $15,178 $15,275 $ 2,195 9/90 7/20/90 40
Marina
Henderson's Wharf Marina L.P.
Baltimore, Maryland
98% (Notes 6 and 7)
$219 1,187 0 103 79 387 103 490 135 N/A 7/20/90 34
$6,123 $ 1,284 $6,715 $8,566 $429 $ 484 $15,265 $15,765 $ 2,365
Note 1: The aggregate cost of each property on a tax basis net Note 2: The changes in total costs of land,
of the reduction due to rehabilitation tax credits. building and improvements due to the
rehabilitation tax credit at December 31
are as follows:
1996 1995 1994 1996 1995 1994
Henderson's Wharf Baltimore$ 14,723 $14,281 14,281 Bal at the beg of period $15,340 $15,340 $15,328
Henderson's Wharf Marina 549 527 527 Additions:
Total $15,272 $ 14,808 $ 14,808 Land, Bldg & Improv 465 0 12
$15,765 $15,340 $15,340
Note 3: The changes in accumulated depreciation for the years ended Note 4: This schedule excludes furniture and
December 31 are as follows: equipment with a cost of approximately $961,000
$64,000 and accumulated depreciation of approximately
$737,000 and $617,000 at December 31, 1996 and 1995
respectively.
1996 1995 1994
Balance at beginning of period $1,956 $ 1,554 $ 1,152
Depreciation during the year
Buildings & Improvements 409 402 402
$2,365 $1,956 $ 1,554
Note 5: In 1996, the Partnership refinanced the seller financing on
the Henderson's Wharf Baltimore property with third party financing of
$6,000,000. For additional information, see the footnotes to financial
statements.
Note 6: In 1996, the minority interest holder in the Henderson's Wharf
Marina property redeemed its interest for a $225,000 mortgage on the property.
The transaction resulted in a reduction of basis of approximately $40,000. For
additional information. see the footnotes to
the financial statements.
Note 7: The Partnership has provided for a reserve for realization
of Marina Land and Improvements of approximately $846,000 net of accumulated
depreciation, 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.
</TABLE>
DEED OF TRUST NOTE
$6,000,000.00 Baltimore, Maryland
February 27, 1996
For Value Received, HISTORIC PRESERVATION PROPERTIES 1990 L.P. TAX
CREDIT FUND, a Delaware limited partnership ("Borrower"), having an
address at c/o Claremont Management 'Corp., Batterymarch Park II,
Quincy, Massachusetts 02169, hereby promises to pay to the order
of AID ASSOCIATION FOR LUTHERANS, a Wisconsin corporation (AAL),
the principal sum of Six Million Dollars ($6,000,000.00) (the
"Loan"), and to pay interest from the date that AAL disburses the
Loan at the rate of seven and eighty-five hundredths percent
(7.85%) per annum to be paid in legal tender of the United States
of America. Payments shall be by preauthorized Automated
Clearinghouse transaction (ACH) or by such other reasonable method
as AAL directs, to its account at Harris Trust and Savings Bank,
Chicago, Illinois, Attention: Aid Association for Lutherans, Loan
No. 74530, or at such other place as AAL may from time to time
designate to Borrower in writing.
The principal and interest of this Deed Of Trust Note ("Note")
shall be due and payable in consecutive, equal monthly payments of
Forty Nine Thousand Six Hundred Twenty Eight Dollars ($49,628)
each, commencing on the fifteenth (15th) of April, 1996,
("Commencement Date") and continuing on the same day of each and
every month thereafter until this Note shall be paid in full.
Notwithstanding anything to the contrary, the remaining unpaid
principal balance and accrued interest thereon shall be due and
payable on the fifteenth (15th) of March, 2016. Each monthly
payment shall be applied first to payment of accrued interest and
then to the reduction of principal. Interest on this Note will be
computed on the basis of a 360-day year composed of twelve 30-day
months.
In the event the Loan is disbursed more than one month preceding
the "Commencement Date", interest is payable thirty (30) days'
prior to the Commencement Date. If the Loan is disbursed less than
one month preceding the Commencement Date, interest will be payable
on the Commencement Date, and the first installment of principal
and interest will be due one month later.
Borrower reserves no right to prepay the Loan during loan years one
through three (1 through 3), inclusive. A loan year is each twelve
(12) month period starting one month prior to the Commencement
Date. Commencing with the fourth (4th) loan year through the sixth
(6th) month of the tenth (10th) loan year (premium prepayment
period), Borrower shall have the right, following the giving of not
less than sixty (60) days, prior written notice to AAL, to prepay
all (and not less than all) of the then outstanding principal
balance of this Note, together with all interest accrued, but
unpaid thereon to the date of prepayment, plus a premium equal to
the amount prepaid times the privilege rate. The privilege rate
shall be equal to the product obtained by taking the difference
between (1) the interest rate oh the Loan and (2) the market yield
of U.S. Treasury issues as quoted daily in The Wall Street Journal
which have the closest maturity date (month and year) to the date
the Loan can be prepaid at par and multiplying this difference by
the remaining term of the premium prepayment period (the remaining
term to be expressed as a fraction 'equal to the number of days
remaining in the premium prepayment period over 365). The
prepayment privilege fee will be reduced to a present value on a
per period basis discounted at the above Treasury issues rate. In
no event, however, shall the fee be less than one percent (it) of
the outstanding principal balance of the Loan. After the sixth
(6th) month of the tenth (loth) loan year, the Loan may be prepaid
at par, upon sixty (60) days' prior written notice to AAL.
However, if there is a Disposition as described under Section 1.3,
Dispositions, of the Deed of Trust (hereinafter defined) and such
Disposition requires AAL's consent and AAL specifically refuses to
give such consent, Borrower may prepay with a premium of four
percent (4%) of the outstanding principal balance of the Loan
during loan years one through three (1 through 3) and at all other
times fifty percent (50%) of the applicable prepayment premium or
one percent (1%) of the outstanding principal balance of the Loan,
whichever is greater.
UPON AT LEAST SIX (6) MONTHS' PRIOR WRITTEN NOTICE, AAL HAS THE
OPTION TO DEC THE ENTIRE UNPAID PRINCIPAL BALANCE OF THE NOTE
AND ALL UNPAID, ACCRUED INTEREST THEREON, IMMEDIATELY DUE AND
PAYABLE AT THE END OF THE TENTH (IOTH) LOAN YEAR OR ANY TIME
THEREAFTER.
Time is of the essence with respect to each and every obligation of
Borrower set forth in this Note. In the event that Borrower fails
to transmit any monthly payment of this Note when due, a late
payment privilege fee of three percent (3%) of the overdue payment
(but in no event less than Five Hundred and No/100 Dollars
($500.00)) shall be due, which fee at AAL's option may be either
required in addition to the monthly payment or Added to principal.
Borrower acknowledges this fee is reasonable under the
circumstances existing at the time this Note is made to compensate
AAL for its additional costs and expenses inc'ident to the handling
of such delinquent installment, including, without limitation,
disruption of AAL's accounting and bookkeeping operations, caused
by Borrower's failure to make payment when due, and the loss of
AAL's ability to promptly reinvest the payments.
The payment of this Note is secured by: An Indemnity Deed of Trust
and Security Agreement ("Deed of Trust") of even date given by
Henderson's Wharf Baltimore, L.P., a Delaware limited partnership
("Guarantor") , as grantor, to certain trustees therein for the
benefit of AAL, as beneficiary, encumbering certain real property
located in the City of Baltimore, State of Maryland. The Deed of
Trust and all other documents ansi agreements executed and delivered
as security for this Note are referred to collectively as the "Loan
Documents." Reference is hereby made to the Loan Documents for a
description of the nature and extent of such security and the
rights of AAL with respect to these,agreements.
Upon the occurrence of any of the following events ("Events of
Default"), AAL may, at its sole option, to be exercised at any time
thereafter, with notice to the Borrower of such option being hereby
expressly waived, declare the entire unpaid principal balance of
this Note and all unpaid, accrued interest thereon, immediately due
and payable:
(a) Failure of Borrower to make any payment of principal and/or
interest on this Note within ten (10) days of its due date;
(b) Failure of Borrower to comply with any provisions, obligations
or other representations contained in this Note or any of the Loa@
Documents and such failure is not cured by the performance so
required, and the remediation of any consequences the delay in such
performance may have caused, within fifteen (15) days after notice
of such failure is given to Borrower, provided, however, any
failure shall be deemed an Event of Default upon the occurrence
thereof (for which no notice shall be required and no cure period
shall be available to Borrower) if such failure (i) is the third
(3rd) to occur within any period of twelve (12) consecutive months
(and notice of the f irst two (2) failures has been sent to
Borrower) , regardless of whether the same or dif f erent failures are
involved and notwithstanding that Borrower may have cured within
any applicable cure period any previous failures occurring within
such twelve (12) month period, or (ii) in the reasonable discretion
of AAL, constitutes or creates a clear and present emergency or
threat to property described in the Deed of Trust or the lien or
security interest created in any of the Loan Documents. In the
event the f if teen (15) days cure period applies to a failure under
this subparagraph (b) and such f ailure cannot, in the sole
discretion of AAL, reasonably be cured within said f if teen (15) day
period, Borrower shall have an additional thirty (30) days to cure
such failure so long as Borrower is diligently pursuing said cure.
In no event shall the cure period exceed the total of forty-five
(45) days.
The failure of AAL to exercise the foregoing option or any other
right or remedy available hereunder, under any Loan Document, at
law, or in equity, shall not constitute a waiver of, or impair, the
right to exercise said option or any other right or remedy in the
event of any continuing or @sequent such failure.
Any amount payable under this Note which is unpaid at the maturity
thereof (whether by acceleration following an Event of Default,
AAL's election to declare this Note due at or after the end of the
tenth (10th) loan year, or at fixed maturity) shall bear interest
until paid at fifteen percent (15%) per annum ("Default Rate") from
and after maturity or the highest rate allowed by law, whichever is
less.
Notwithstanding the above, Borrower agrees that upon the occurrence
of an Event of Default, followed by acceleration of the maturity of
this Note, a tender of an amount necessary to satisfy the entire
indebtedness shall be deemed a voluntary prepayment, and to the
extent permitted by law, shall include the foregoing prepayment
privilege fee; provided further that if such tender occurs in a
period in which there is no prepayment privilege, Borrower shall
pay a prepayment privilege fee in an amount equal to the amount
prepaid times the privilege rate defined above, but in no event
shall the fee be less than eight percent (8%-) of the outstanding
principal balance of the Loan.
This Note shall in all respects be governed and construed in
accordance with the laws of the State of Maryland. The parties
intend and believe that each provision in this Note comports with
all applicable local, state, and federal laws and judicial
decisions. However, if any provision of this Note is found by a
court of law to be illegal, unenforceable, or contrary to public
policy, then it is the intent of all parties hereto that such
provision be given force to the fullest possible extent permitted
by law, and that the remainder of this Note be construed as if such
illegal provision were not contained therein, and that the rights,
obligations, and interests of Borrower and AAL under the remainder
of this Note shall continue in full force and effect. For example,
if from any circumstances whatsoever, fulfillment of any provision
in this Note or the Loan Documents, would result in an amount paid
or agreed to be paid which exceeds the highest lawful rate
permissible under applicable usury laws, then, the obligation to be
fulfilled shall be reduced to the limit of such validity, and if
AAL shall receive as interest an amount which would exceed the
highest lawful rate, such amount shall be applied to the reduction
of the unpaid principal balance due hereunder in the inverse order
of maturity, and not to the payment of interest.
In the event of any inconsistency between provisions of this Note
and those of the Loan Documents, the provisions of this Note shall
control over those of the Loan Documents.
All persons or corporations or other entities now or at any time
liable, whether primarily or secondarily, for payment of the
indebtedness evidenced by this Note, expressly waive presentment
for payment, notice of dishonor, protest, notice of protest, and
diligence in collection; and consent that the time of payment may
be extended or released by AAL without in any way modifying,
releasing, or limiting Borrower's liability on the Deed of Trust.
Enforcement of Borrower's liability hereunder shall be limited to
the mortgaged property, and any other collateral AAL may hold to
secure payment of this Note, and AAL shall not be entitled to seek
or obtain any def iciency judgment against Borrower, except that
Borrower (but not its constituent partners) shall be and remain
fully personally liable for the following:
(i) tenant security deposits in respect of each lease to the
extent not used to satisfy tenant arfearages of rent or to satisfy
damages caused by tenant default;
(ii) rents paid more than one (1) month in advance of its due
date;
(iii) rents and other similar sums received by Borrower or
Guarantor from the mortgaged property after an Event of Default
unless applied to (A) normal and necessary operating expenses of
the mortgaged property or (B) the indebtedness evidenced by this
Note (It is understood and agreed that all revenues derived from
the mortgaged property are to be held by Borrower and Guarantor as
a trust fund to be used first for the payments due under this Note
and the then due and payable legitimate operating expenses of the
mortgaged property and only after such payments shall the revenues
be used for Borrower's or Guarantor's personal use and/or
distribution);
(iv) insurance or condemnation proceeds used for purposes
other than those set forth in Section 1.4 or in Article III of the
Deed of Trust, or as otherwise approved in writing by AAL;
(v) amounts necessary to pay taxes, assessments or any other
charges by a governmental entity which are a lien upon the
mortgaged property at the time AAL takes actual possession of the
mortgaged property or has a receiver appointed;
(vi) amounts necessary to pay any construction lien,
mechanics, liens, materialmen's liens or similar type lien against
the mortgaged property arising out of the act or omissions of
Borrower or Guarantor, provided, however, that Borrower and
Guarantor shall have the right to contest the amount or validity of
any such lien, by appropriate legal proceedings if: (x) the legal
proceedings shall operate to prevent the collection of such lien
and (y) Borrower and Guarantor shall deposit. with AAL or with the
appropriate court or other governmental authority or title
insurance company satisfactory to AAL an amount, with such
subsequent additions thereto as may be necessary or sufficient in
AAL's opinion to pay such liens, together with all estimated
interest and penalties in connection therewith;
(vii) taxes and fees required to be paid to any government
entity for the transfer of title;
(viii) damages suffered by AAL due to material
misrepresentation or waste committed by Borrower, Guarantor or
their respective agents or employees; and
(ix) all actual attorneys' fees and other costs incurred by
AAL in order to recover from Borrower and/or Guarantor any amounts
for which Borrower or Guarantor remains personally liable as
provided in subparagraphs (i) through (viii) above.
Further, Borrower (but not its constituent partners) shall
remain personally liable for the prompt payment of the Loan, to the
extent of the then outstanding principal amount of the Loan, plus
accrued but unpaid interest thereon and any other sums due pursuant
to this Note or the Loan Documents, and actual attorneys' fees and
all other costs of collection, upon the occurrence of any of the
following:
(i) Borrower or Guarantor used fraud to induce AAL to make
the Loan evidenced by this Note;
(ii) AAL is prevented from acquiring title to the mortgaged
property following an Event of Default and AAL is unsuccessful in
collecting on any title insurance policy that it holds in
connection with the mortgaged property because of forfeiture of
Borrower's or Guarantor's title under federal, state or local laws;
(iii) Borrower or Guarantor voluntarily files a petition or
commences any case or proceeding under any provision or chapter of
the United States Bankruptcy Code or any partner of Borrower or
Guarantor, or Terrence P. Sullivan or any entity controlled by
Terrence P. Sullivan files an involuntary petition against Borrower
or Guarantor;
(iv) Borrower or Guarantor makes an unconsented transfer of
interest in the mortgaged property as defined in Section 1.3
("Dispositions") of the Deed of Trust.
The obligations of the general partners of Borrower are joint and
several under this Note and the Loan Documents.
If Borrower or Guarantor fails to perform any of the required
covenants in this Note or the Deed of Trust or any other Loan
Document, or if AAL is made a party to any litigation by reason of
this Note or the Deed of Trust or any other Loan Document or if AAL
asserts or defends any of its rights in a bankruptcy proceeding,
then the Borrower shall pay all out-of -pocket expenses of AAL
(including but not limited to actual fees and disbursements of
counsel retained by AAL and the allocated costs for services of
AAL's in-house counsel) incurred, together with interest thereon at
the Default Rate from the date such expenses are incurred.
Borrower further covenants and agrees to pay any tax which is due
or becomes due in respect to the issuance or recording of the Loan
Documents or any security interest created thereby, and agrees to
hold harmless and indemnify AAL against any liability incurred by
reason of the imposition of any such tax.
In addition to all liens upon, and rights of setoff against, the
money, securities or other property of Borrower given to AAL by
law, Borrower hereby pledges, assigns, conveys, and transfers to
AAL a lien upon, security title to, a security interest in, and
right of setoff against all money, securities and other property of
Borrower now or hereafter in the possession of or on deposit with
AAL, whether held in a general or special account or deposit with
AAL, or for safe-keeping or otherwise, and every such lien,
security title, security interest, and right of setoff may be
exercised without demand upon or notice to Borrower. No lien,
security title, security interest, or right of setoff shall be
deemed to have been waived by any act or conduct on the part of
Lender, or by any neglect to exercise such right of setof f or to
enforce such lien, security title or security interest, or by any
delay in so doing, and every lien, security title, security
interest, and right of setof f shall continue in full force and
effect until specifically waived or released by an instrument in
writing executed by AAL.
Borrower waives trial by jury in any action brought on, under or by
virtue of this Note.
Any litigation in connection with, or arising out of, this Note
shall be brought in the state or federal court for the Baltimore
City, Maryland. Borrower and AAL hereby consent to such court' a
exercise of personal jurisdiction over them. Borrower irrevocably
appoints Terrence P. Sullivan, c/o Claremont Management
Corporation, Batterymarch Park II, Quincy, Massachusetts, 02169, as
Borrower's agent for receipt of service of process on Borrower's
behalf in connection with any suit, writ, attachment, execution or
discovery or supplementary proceedings in connection with the
enforcement of this Note. Service shall be effected by any means
permitted by the court in which any action is filed, or, at AAL's
option, by mailing process, postage prepaid, by certified mail,
return receipt requested, either to Borrower's agent at the
foregoing address or to Borrower at Borrower' a address set forth on
the f irst page of this Note. Service shall be deemed ef f ective
upon receipt. Borrower and AAL may designate a change of address
for purposes of this paragraph by written notice to the other given
by certified mail, return receipt requested, at least ten (10) days
before such change of address is to become effective.
In Witness Whereof, the Borrower has caused this Note to be duly
executed as of the day and year first above written.
"Borrower"
HISTORIC PRESERVATION PROPERTIES 1990 L.P. TAX
CREDIT FUND, a Delaware limited partnership
By: BOSTON HISTORIC PARTNERS L.P., a Delaware
limited partnership, its sole general
partner
By: BHP II ADVISORS L.P., a Delaware
limited partnership, its sole
general partner
By: PORTFOLIO ADVISORY SERVICES II,
INC., a Massachusetts
corporation, general partner
by: Terrence P. Sulivan,
President
and
By: Terrence P. Sullivan
General Partner
This is to certify that this is this Note described in a certain
Indemnity Deed of Trust and Security Agreement dated as of even
date herewith on the mortgaged property located in Baltimore City,
Maryland, described therein on a loan made by Aid Association for
Lutherans. This Note and the Indemnity Deed of Trust and Security
Agreement securing same were executed in presence.
Notary Public
Joseph Flynn
My Commission Expires
8/27/97
GUARANTY
In consideration of the making of a loan (the "Loan") (by AID
ASSOCIATION FOR LUTHERANS, a Wisconsin corporation ("AAL") to
HISTORIC PRESERVATION PROPERTIES 199O L.P. TAX CREDIT FUND, a
Delaware limited partnership ("Borrower"), in the principal amount
of Six Million Dollars ($6,000,000.00), evidenced by a Deed of
Trust Note (the "Note") which loan, pursuant and subject to the
terms of the Note, is with limited recourse as to Borrower, and
which loan AAL would be unwilling to make without the execution of
this Guaranty, and for other consideration, HENDERSON'S WHARF
BALTIMORE L.P., a Delaware limited partnership ("Guarantor"),
having an address at c/o Claremont Management Corp., Batterymarch
Park II, Quincy, Massachusetts 02169, directly, unconditionally
and independently of any liability it may have by virtue of its
affiliation with Borrower, hereby guarantees to AAL, its successors
and assigns the prompt payment at maturity of the Loan, whether
fixed or accelerated, whether as maker, indorser or otherwise, to
the extent and only to the extent of the outstanding principal
amount of the loan, plus accrued but unpaid interest thereon and
any other sums due pursuant to the Note or the Loan Documents (as
such term is defined in the Note), and actual attorney's fees and
all other costs of collection. Guarantor is not primarily liable
for the Loan, but has agreed to guaranty repayment of the amounts
due under the Note pursuant to the terms hereof.
The obligations of Guarantor under this Guaranty are secured
by, among other things, that certain Indemnity Deed of Trust and
Security Agreement (the "Deed of Trust") of even date, given by
Guarantor, as grantor, to certain trustees therein for the benefit
of AAL, as beneficiary, encumbering certain real properties located
in the City of Baltimore, State of Maryland and that certain
Assignment of Rents and Leases covering certain of the premises
located at 1000 Fell Street, Baltimore, Maryland (the "Mortgaged
Property").
Enforcement of Guarantor's and the constituent partners' of
Guarantor liability hereunder shall be limited to the Mortgaged
Property, and any other collateral AAL may hold to secure payment
of the Note and this Guaranty, and AAL shall not be entitled to
seek or obtain any deficiency judgment in excess of the amount
described in the previous sentence against Borrower, Guarantor or
any constituent partners of Guarantor, except that Borrower,
Guarantor and the constituent general partners of Guarantor shall
be and remain fully personally liable for the following:
(i) tenant security deposits in respect of each lease to the
extent not used to satisfy tenant arrearages of rent or to satisfy
damages caused by tenant default;
(ii) rents paid more than one (1) month in advance of its due
date;
(iii) rents and other similar sums received by Borrower or
Guarantor from the Mortgaged Property after an Event of Default (as
such term is defined in the Note and the Deed of Trust) unless
applied to (A) normal and necessary operating expenses of the
Mortgaged Property or (B) the indebtedness evidenced by this Note
(It is understood and agreed that all revenues derived from the
Mortgaged Property are to be held by Borrower and Guarantor as a
trust fund to be used first for the payments due under the Note and
the then due and payable legitimate operating expenses of the
Mortgaged Property and only after such payments shall the revenues
be used for Borrower's or Guarantor's personal use and/or
distribution.);
(iv) insurance or condemnation proceeds used for purposes
other than those set forth in Section 1.4 or in Article III of the
Deed of Trust, or as otherwise approved in writing by AAL;
(v) amounts necessary to pay taxes, assessments or any other
charges by a governmental entity which are a lien upon the
Mortgaged Property at the time AAL takes actual possession of the
Mortgaged Property or has a receiver appointed;
(vi) amounts necessary to pay any construction lien,
mechanics' liens, materialmen's liens or similar type lien against
the Mortgaged Property arising out of the act or omissions of
Borrower or Guarantor, provided, however, that Borrower and
Guarantor shall have the right to contest the amount or validity of
any such lien, by appropriate legal proceedings if: (x) the legal
proceedings shall operate to prevent the collection of such lien
and (y) Borrower and Guarantor shall deposit with AAL or with the
appropriate court or other governmental authority or title
insurance company satisfactory to AAL an amount, with such
subsequent additions thereto as may be necessary or sufficient in
AAL's opinion to pay such liens, together with all estimated
interest and penalties in connection therewith;
(vii) taxes and fees required to be paid to any government
entity for the transfer of title;
(viii) damages suffered by AAL due to material
misrepresentation or waste committed by Borrower, Guarantor or
their respective agents or employees; and
(ix) all actual attorneys' fees and other costs incurred by
AAL in order to recover from Borrower and/or Guarantor any amounts
for which Borrower or Guarantor remains personally liable as
provided in subparagraphs (i) through (viii) above.
Further, Borrower and Guarantor shall remain personally liable
for the prompt payment of the Loan, to the extent of the then
outstanding principal amount of the Loan, plus accrued but unpaid
interest thereon and any other sums due pursuant to the Note, this
Guaranty or the Loan Documents, and actual attorneys' fees and all
other costs of collection, upon the occurrence of any of the
following:
(i) Borrower or Guarantor used fraud to induce AAL to make
the Loan evidenced by the Note;
(ii) AAL is prevented from acquiring title to the Mortgaged
Property following an Event of Default and AAL is unsuccessful in
collecting on any title insurance policy that it holds in
connection with the Mortgaged Property because of forfeiture of
Borrower's or Guarantor's title under federal, state or local laws;
(iii) Borrower or Guarantor voluntarily files a petition or
commences any case or proceeding under any provision or chapter of
the United States Bankruptcy Code or any partner of Borrower or
Guarantor, or Terrence P. Sullivan or any entity controlled by
Terrence P. Sullivan files an involuntary petition against Borrower
or Guarantor;
(iv) Borrower or Guarantor makes an unconsented transfer of
interest in the Mortgaged Property as defined in Section 1.3
("Dispositions") of the Deed of Trust.
Guarantor expressly agrees that Guarantor's liability to AAL
shall, at AAL's option, upon the occurrence of an Event of Default,
become at once fixed, liquidated, due and payable, without
condition, offset or counterclaim, and AAL shall not be required to
make demand upon or first seek satisfaction from Borrower, or from
any other guarantor or any indorser, surety or other party or any
security or collateral, or to pursue any other remedy whatsoever,
notwithstanding any demand or request therefor by Guarantor, but
any payment of principal or interest thereafter by Borrower shall
toll the statute of limitations against Guarantor.
This Guaranty shall be a continuing guaranty and shall bind
Guarantor and its respective successors and assigns, and Guarantor
shall remain liable for all obligations and liabilities of Borrower
(construed and determined without regard to the non-recourse
provisions of the Note) as specified above, from the date hereof
until the principal, accrued interest and all other sums due
pursuant to the Note or the Loan Documents are paid and discharged
in accordance with the terms thereof. Otherwise, this Guaranty
shall remain in full force and effect.
Guarantor consents and agrees that AAL may, without prejudice
to any claim against Guarantor hereunder, and without affecting in
any manner the liability of Guarantor hereunder at any time or from
time to time, in its discretion with or without consideration, and
without notice to Guarantor: (1) extend or change the time of
payment, or the manner, place or terms of payment of or otherwise
modify any obligation hereby guaranteed; (2) exchange, release or
surrender all or any collateral security for any such obligation;
(3) sell and itself purchase any such collateral security at public
or private sale and apply the proceeds in its discretion to any
indebtedness of Borrower; and (4) settle or compromise with
Borrower or with any other person primarily or secondarily liable
with Borrower, any obligation hereby guaranteed, or subordinate the
payment of any such obligation to payment of any other debt which
may be owing to AAL.
Guarantor waives notice of acceptance, presentment, demand,
protest, all other notices of every kind and the benefit of all
homestead and other exemptions and valuation and appraisement laws.
Guarantor, to the fullest extent permitted by law, waives any
defense arising by reason of any disability or other defense of
Borrower or by reason of the cessation from any cause whatsoever of
Borrower, and agrees that this Guaranty shall be valid and
enforceable without regard to the regularity, validity or
enforceability of any liability or obligation of Borrower.
Specifically, but without limitation, Guarantor's obligations
hereunder shall not be impaired, changed, limited or released by
Borrower's bankruptcy. Guarantor shall have no right of
subrogation, and waives any right to enforce any remedy which AAL
now has or may hereinafter have against Borrower, and waives any
benefit of and any right to participate in any security now or
hereafter held by AAL.
Guarantor agrees to pay AAL's actual attorney's fees and all
other costs of collection in enforcing this Guaranty.
All rights under this Guaranty shall inure to the benefit of
AAL, its successors and assigns, and any holder (whether with or
without recourse) of any or all of the loan covered by this
Guaranty.
Waiver of any right, covenant or benefit herein by AAL shall
not waive any other or further right, covenant or benefit or bind
AAL again to waive the same provision. If maturity of the
obligation hereby guaranteed is accelerated as against Borrower,
such maturity shall also be accelerated hereunder, without demand
or notice.
This Guaranty shall be governed by and construed in accordance
with the laws of the jurisdiction wherein the Mortgaged Property is
located.
Guarantor hereby consents to the exercise of personal
jurisdiction over it by any federal or state court in the State of
Maryland and consents to the laying of venue in any jurisdiction or
locality in the State of Maryland. Guarantor irrevocably appoints
as Guarantor's agent for receipt of service of process on his
behalf in connection with any suit, writ, attachment, execution or
discovery or supplementary proceedings in connection with the
enforcement of this Guaranty. Service shall be effected by any
means permitted by the court in which any action is filed, or, at
AAL's option, by mailing process, postage prepaid, by certified
mail, return receipt requested, either to Guarantor's agent at the
foregoing address or to Guarantor at Guarantor's address set forth
on the first page of this Guaranty. Service shall be deemed
effective upon receipt. Guarantor may designate a change of
address for purposes of this paragraph by written notice to AAL
given by certified mail, return receipt requested, at least
ten (10) days before such change of address is to become effective.
Signed and sealed this _27th__ day of February, 1996.
GUARANTOR:
WITNESS: HENDERSON'S WHARF BALTIMORE L.P.,
a Delaware limited partnership
By: HISTORIC PRESERVATION PROPERTIES 1990
L.P. TAX CREDIT FUND, general partner
By: BOSTON HISTORIC PARTNERS II LIMITED
PARTNERSHIP, its sole general
partner
By: BHP II ADVISORS LIMITED
PARTNERSHIP, its sole general
partner
By: PORTFOLIO ADVISORY
SERVICES, INC.
By: Terrence P. Sullivan
President
and
By: Terrence P. Sullivan,
General Partner
and
By: HENDERSON'S WHARF DEVELOPMENT CORP.,
general partner
By: Terrence P. Sullivan
President
After recordation, this instrument
should be returned to:
Kenneth E. Podell, Esq.
Aid Association for Lutherans
4321 North Ballard Road
Appleton, WI 54919
INDEMNITY DEED OF TRUST AND SECURITY AGREEMENT
IN THE AMOUNT OF
$6,000,000
FROM
HENDERSON"S WHARF BALTIMORE, L.P.,
as Grantor,
TO
ALAN P. VOLLMANN AND GREGORY B. NUCCI,
as Trustee,
FOR THE BENEFIT OF
AID ASSOCIATION FOR LUTHERANS,
a Wisconsin corporation,
as Beneficiary.
Dated as of February 27, 1996
INDEMNITY DEED OF TRUST AND SECURITY AGREEMENT
This Indemnity Deed of Trust and Security Agreement ("Deed of
Trust") is made and entered into as of the ____ day of February,
1996, from HENDERSON"S WHARF BALTIMORE. L.P. ("Grantor"), a
Delaware limited partnership, to ALAN P. VOLLMANN and GREGORY B.
NUCCI, either of whom may act (together, "Trustee"), for the
benefit of AID ASSOCIATION FOR LUTHERANS, a Wisconsin corporation
("Beneficiary"):
A. Recitals.
1. Beneficiary made a loan (the "Loan") in the amount of
$6,000,000.00 to Historic Preservation Properties 1990 L.P. Tax
Credit Fund, a Delaware limited partnership ("Borrower"), as
evidenced by a Deed of Trust Note ("Note") of even date, in the
aggregate principal sum of Six Million Dollars ($6,000,000), both
principal and interest of the Note being payable at the office of
Beneficiary as more specifically set forth therein. As a condition
of making the Loan, Beneficiary required that Grantor execute and
deliver a certain Guaranty (the "Guaranty") of even date. Grantor
is not primarily liable for the Loan, but has agreed to guaranty
repayment of the amounts due under the Note pursuant to the terms
of the Guaranty.
2. Grantor and Beneficiary desire and intend that the Note
be secured by, among other things, (1) this Deed of Trust; (2)
Assignment of Rents and Leases, (3) Financing Statements; and (4)
other and sundry documents and agreements. This Deed of Trust and
all other documents and agreements given as security for the
Guaranty or the Note are referred to collectively as the "Loan
Documents" and singularly as a "Loan Document."
B. Granting Clause.
To secure the payment of the principal, interest, and premium,
if any, on the Guaranty and to secure the performance by Grantor of
each and every term, covenant, agreement and condition contained in
the Guaranty and the Loan Documents, Grantor does hereby mortgage,
convey, and grant, with general warranty of title, to Trustee, in
trust for the benefit of Beneficiary, its successors and assigns,
forever, in fee simple, with power of sale, to have and to hold all
and singular, in the following described properties:
1. The real estate ("Land") described and set forth in
Exhibit A which is attached to and hereby made a part of this Deed
of Trust;
2. All right, title, and interest of Grantor, now or at any
time hereafter existing, in and to all highways, roads, streets,
alleys and other public and private thoroughfares, bordering on or
adjacent to the Land, together with all right, title, and interest
of Grantor to the Land lying within such highways, roads, streets,
alleys, and other public thoroughfares and all heretofore or
hereafter vacated highways, roads, streets, alleys and public and
private thoroughfares and all strips and gores adjoining or within
the Land or any part thereof;
3. All buildings, structures, improvements, plants, works,
and fixtures now or at any time hereafter located on the Land and,
without any further act, all articles of personal property now or
hereafter owned by Grantor used in connection with the Land and
such buildings, structures, improvements, plants, works and
fixtures, all extensions, additions, betterments, substitutions,
and replacements thereof;
4. All rights, privileges, permits, licenses, easements,
consents, tenements, hereditaments, and appurtenances now or at any
time hereafter belonging to or in any wise appertaining to the Land
or to any property now or at any time hereafter comprising a part
of the property subject to this Deed of Trust; and all right, title
and interest of Grantor, whether now or at any time hereafter
existing, in all reversions and remainder to the Land and such
other property, and all rents, income, issues, profits, royalties,
and revenues derived from or belonging to such Land and other
property subject to this Deed of Trust or any part thereof;
5. Any and all proceeds of the conversion, whether voluntary
or involuntary, of all or any part of the Land and other property
and interests subject to this Deed of Trust into cash or liquidated
claims, including without limitation by reason of specification,
proceeds of insurance and condemnation awards;
6. All causes of action and recoveries for any damage, loss
or diminution in value of the property; and
7. All other personal property identified in Exhibit B set
forth hereto and, without limiting the generality of the foregoing,
a security interest in all of Grantor"s present and future
"fixtures," "equipment," "general intangibles," "contract rights,"
and "accounts receivable" (as said quoted terms are defined in or
encompassed by the Uniform Commercial Code of the State of Maryland).
Any reference herein to the "Premises" shall be deemed to
apply to the above-described Land and all other property, interests
and items covered by this Granting Clause, unless the context shall
require otherwise. Any reference herein to the "Collateral" shall
be deemed to apply to personalty located on the Premises.
C. Warranties.
Grantor hereby warrants to and covenants with Beneficiary, its
successors and assigns, that:
1. Grantor has good and indefeasible title to the Premises
in fee simple, free and clear of all liens, charges, and
encumbrances whatever except those specifically set forth in the
lender"s title insurance policy delivered to Beneficiary with this
Deed of Trust which have been approved in writing by Beneficiary
(the "Permitted Encumbrances");
2. Grantor has the full right and authority to execute and
deliver to Beneficiary the Note and the Loan Documents;
3. Grantor has taken all action required by law or otherwise
necessary to make the Note and Loan Documents the valid, binding,
and legal obligations of Grantor;
4. The lien and security interest created by this Deed of
Trust are and will be kept a first lien and security interest upon
the Premises, except for the Permitted Encumbrances, and Grantor
will forever warrant and defend the same to Beneficiary, its
successors and assigns, against any and all claims and demands
whatever; and
5. Grantor is a business or commercial organization within
the meaning of Sections 12-101(c) and 12-103(e) of the Commercial
Law Article of the Annotated Code of Maryland and further
represents and warrants that the Loan was made and transacted
solely for the purpose of carrying on or acquiring a business or
commercial investment.
Provided always, and upon the express condition that if all of
the principal, interest and premium, if any, on the Note shall be
paid and discharged in accordance with the terms and conditions
therein contained, and if all other agreements and obligations of
Grantor under the Guaranty, the Loan Documents, and all other
agreements between Grantor and Beneficiary, whether now or at any
time hereafter existing, shall be discharged in accordance with the
terms and conditions therein and herein expressed, then these
presents to be void, otherwise this Deed of Trust to remain in full
force and effect.
ARTICLE I
COVENANTS OF GRANTOR
Grantor does hereby covenant and agree with Beneficiary, its
successors and assigns, as follows:
1.1 Payment. Grantor shall duly and punctually pay the
principal, interest, and premium, if any, on the Guaranty hereby
secured, when and as the same shall become due and payable in
accordance with the terms thereof, and shall duly and punctually
perform and observe all of the terms, covenants, and conditions to
be performed or observed by Grantor in the Guaranty and the Loan
Documents.
1.2 Security. All of the Premises shall stand as security
for the Guaranty and for the performance or observance by Grantor
of the terms, covenants, and agreements to be performed or observed
by Grantor in the Guaranty, the Loan Documents, and all other
agreements between Grantor and Beneficiary, whether now or at any
time hereafter existing, and the lien and security interest hereof,
subject only to the exceptions herein noted, is and shall be a
valid and continuing first lien and security interest upon all of
the Premises. From time to time upon the request by Beneficiary,
Grantor shall, at its expense, execute and deliver such
supplemental mortgages, security agreements, additional assignments
of leases and any further conveyances and instruments as may, in
the reasonable opinion of Beneficiary, be necessary or desirable in
order to effectuate, continue and preserve the lien and security
interest created by this Deed of Trust and the Loan Documents and
the priority thereof upon all the Premises and to make subject to
the lien hereof any property hereafter to be subjected to the lien
of this Deed of Trust.
1.3 Negative Covenants. So long as any indebtedness secured
hereby remains unpaid, Grantor covenants and agrees with Beneficiary
that it will not, directly or indirectly, without the
prior written consent of Beneficiary:
Liens. Create, permit to exist, or assume any mortgage,
pledge, or other lien or encumbrance upon the Premises or any
part thereof or any interest therein other than (1) the Deed
of Trust lien and security interest of Beneficiary created by
the Loan Documents; and (2) the Permitted Encumbrances, or
Dispositions. Sell, transfer, assign, convey, or
otherwise dispose of or permit the sale, transfer, assignment,
conveyance or other disposition of in any manner, whether
voluntarily or involuntarily, by operation of the law or
otherwise, the Premises or any part thereof or any interest
therein. For purposes of this subparagraph, a sale of the
Premises shall mean (1) any transfer or other alteration in
any interest which any member, general partner or shareholder,
specifically including Terrence P. Sullivan, holds (directly
or indirectly) in Grantor or in any entity which holds an
interest in Grantor, including any transfer of any membership
interests, general partnership interests or controlling shares
of any limited liability company, partnership or corporate
Grantor (except a corporate trustee) to any person or persons
other than those holding such interests or shares (i) on the
date this Deed of Trust is executed with regard to any limited
liability company, partnership or corporate Grantor, or (ii)
on the date of a permitted assignment of the beneficial
interest in Grantor, with regard to a successor limited
liability company, partnership or corporate Grantor in the
event of such a permitted assignment; (2) any termination of
limited liability company, partnership or corporate existence
by any partnership or corporate Grantor; and (3) any grant of
an option to purchase, an installment sales contract or land
contract.
Notwithstanding the foregoing paragraph, transfers
resulting from the death or incapacity of Terrence P. Sullivan
are permitted upon written consent of Beneficiary, which
consent shall not be unreasonably withheld and upon the
payment of a One Thousand and No/100 Dollars ($1,000.00)
review fee to Beneficiary and the payment of all fees and
expenses incurred by Beneficiary or its counsel, and upon
delivery to Beneficiary of all documents required by
Beneficiary to maintain all of Beneficiary"s security under
any Loan Documents or other security related to the Note.
1.4 Affirmative Covenants. So long as all or any part
of the principal, interest, premium, or any other amount due
Beneficiary under the Note, the Guaranty, any of the Loan
Documents or any other agreement between Grantor and
Beneficiary whether now or at any time hereafter existing,
remains outstanding and unpaid, Grantor hereby further
covenants and agrees that it shall:
Property Taxes. Pay and discharge all taxes, assessments
and governmental charges of every character lawfully imposed
upon the Premises, and Grantor shall not suffer any of the
Premises to be sold or forfeited for any tax, special
assessment, governmental charge or claim whatsoever. Promptly
following payment of taxes, assessments and governmental
impositions upon the Premises, Grantor shall deliver to
Beneficiary a copy of the bill therefor showing payment
thereof.
Liens. Pay and discharge all claims for labor,
materials, or supplies, which if unpaid, might by law become
a lien or charge against the Premises.
Mortgage Taxes. Pay and discharge all taxes,
assessments, and governmental charges of every character
whatever that may be levied upon or on account of this Deed of
Trust or the indebtedness secured hereby whether levied
against Grantor or otherwise. In the event payment by grantor
of any tax, assessment or charge referred to in the foregoing
sentence would result in the payment of interest in excess of
the rate permitted by law, then Beneficiary may, at its
option, (i) declare the entire principal balance of the
indebtedness secured hereby, together with interest thereon,
to be due and payable immediately, without notice, or (ii) pay
that amount or portion of such tax, assessment or governmental
charge as renders payment of the balance thereof by Grantor
not in excess of the interest rate permitted by law, in which
event the Grantor shall pay the balance of such tax,
assessment or governmental charge.
Deposits. Pay to the Beneficiary monthly, in addition to
each payment required under the Note, a sum equivalent to one-
twelfth (1/12) of the amount estimated by Beneficiary to be
sufficient to enable Beneficiary to pay, at least thirty (30)
days before they become due, all taxes, assessments and other
similar charges levied against the Premises.
Beneficiary. shall not be required to hold such sums in segregated
accounts, and no interest shall be payable by Beneficiary to
Grantor with respect to any amounts paid by Grantor pursuant
to this subparagraph. Upon demand by Beneficiary, Grantor
shall deliver and pay over to Beneficiary such additional sums
as are necessary to satisfy any deficiency in the amount
necessary to enable Beneficiary to fully pay any of the items
hereinabove mentioned before the same become due. In the
event of an Event of Default (as hereinafter defined), or any
default by Grantor in the performance of any terms, covenants,
or conditions contained herein, in the Guaranty, or in any of
the Loan Documents, Beneficiary may apply against the
indebtedness secured hereby, in such manner as Beneficiary may
determine, any funds of Grantor then held by Beneficiary under
this subparagraph. In the event of a sale of the Premises,
any funds on deposit with Beneficiary automatically, and
without the necessity of further notice or written assignment,
shall be transferred and held thereafter for the account of
the new owner to be applied in accordance with this paragraph;
provided, however, no sale of the Premises shall be made
subject to this Deed of Trust without Grantor first obtaining
the prior written consent of Beneficiary as herein required.
Maintenance, Waste, Use. Maintain, preserve, and keep
the Premises and all parts thereof, in good repair, working
order and condition, and from time to time make all needful
and proper repairs, renewals and replacements thereto so as at
all times to maintain the efficiency thereof. Grantor shall
abstain from and will not suffer the commission of waste on
the Premises and will promptly notify Beneficiary in writing
of the occurrence of any loss or damage to the Premises.
Grantor shall not materially alter the buildings,
improvements, fixtures, equipment, machinery or other property
now or hereafter upon the Land comprising the Premises, or
remove the same therefrom, or permit any tenant or other
person to do so, without the written consent of Beneficiary.
Grantor will, at its sole cost and expense, promptly remove,
or cause the removal of, any and all hazardous or toxic
substances or wastes or solid wastes or the effects thereof at
any time identified as being on, in, under, or affecting the
Premises which in the sole and absolute judgment of
Beneficiary lessen the value of the Premises. Grantor will
not permit any portion of the Premises to be used for any
unlawful purpose or for any purpose other than that for which
the same is now being used or intended to be used, as
represented in writing by Grantor to Beneficiary. Grantor
will comply promptly with all laws, statutes, ordinances,
regulations, rules and orders of all public authorities having
jurisdiction thereof and with all covenants, agreements and
restrictions relating to the Premises or the use, occupancy
and maintenance thereof. Beneficiary shall have the right at
any time, and from time to time, to enter the Premises for the
purpose of inspecting the same. Nonpayment of any taxes,
assessments or other governmental charges levied or assessed
upon the Premises, or any part thereof, shall constitute
waste.
Survey of Independent Inspector. Allow the Beneficiary,
at any time and from time to time, based on a good faith
reason or purpose, to engage an independent inspector to
survey the adequacy of the maintenance of the Premises. If
such maintenance is found to be inadequate, such inspector
shall determine the estimated cost of such repairs and
replacements necessary to protect and preserve the rentability
and useability of the said Premises. In such event, at the
option of the Beneficiary and within fifteen (15) days after
written demand therefor, a sum equal to the amount of such
estimated cost shall thereupon become due and payable by
Grantor to be applied upon the indebtedness unless within such
period Grantor, at its own cost and expense, shall have
completed or shall have commenced and thereafter with
diligence, completes such repairs and replacements. In such
event, the Grantor shall also reimburse the Beneficiary the
cost of such survey, the same being secured hereby. If the
survey determines such maintenance to be adequate, then the
cost therefor shall be at the expense of Beneficiary.
Conduct of Business. Do or cause to be done all things
necessary to preserve and keep in full force and effect its
legal existence and all licenses, rights, and privileges
necessary for the conduct of its business and comply with all
valid and applicable statutes, laws, rules, and regulations.
Insurance. Grantor shall keep the Premises insured
against loss or damage by fire, tornado, windstorm and
extended coverage perils and such other hazards as may
reasonably be required by Beneficiary, for the full
replacement value, including without limitation on the
generality of the foregoing, war damage insurance whenever in
the opinion of Beneficiary such protection is necessary and is
available from an agency of the United States of America.
Grantor shall also provide liability insurance with such
limits for personal injury and death and property damage as
Beneficiary may require in the minimum amount of Two Million
and No/100 Dollars ($2,000,000.00). Grantor shall also
procure and keep in force with responsible insurers, insurance
in such amounts as may be determined by Beneficiary to cover
loss, total or partial, of rentals and other revenues derived
from the Premises for a period of at least twelve (12) months
as required by Beneficiary in the minimum amount of Two
Million Five Hundred Thousand and No/100 Dollars
($2,500,000.00). All policies of insurance to be furnished
hereunder shall be in forms and amounts satisfactory to
Beneficiary, with A+, A or A- rated companies that have a
financial size of X or better as shown in a current Best"s Key
Rating Guide (or comparable guide book acceptable to
Beneficiary if Best"s should become unavailable), with the New
York standard mortgagee clause endorsement attached to all
policies in favor of and in form satisfactory to Beneficiary,
including a provision requiring that the coverage evidenced
thereby shall not be terminated or materially modified without
thirty (30) days" prior written notice to Beneficiary.
Grantor shall deliver all policies, including additional and
renewal policies, together with evidence of payment of
premiums thereon, to Beneficiary, and in the case of insurance
about to expire, shall deliver renewal policies not less than
thirty (30) days" prior to their respective dates of
expiration.
Adjustment of Losses with Insurer and Application of
Proceeds of Insurance. Give immediate notice to Beneficiary
in the event of any loss or damage covered by insurance
required to be carried hereunder. Beneficiary may thereupon
make proof of such loss or damage, if the same is not promptly
made by Grantor. All proceeds of insurance, in the event of
such loss or damage, shall be payable to Beneficiary and any
affected insurance company is authorized and directed to make
payment thereof directly to Beneficiary. Beneficiary is
authorized and empowered to settle, adjust, or compromise any
claims for loss, damage, or destruction, under any such policy
or policies of insurance. Beneficiary shall give written
notice within a reasonable time to Grantor of any such
adjustment or compromise. The power granted hereby shall be
deemed to be coupled with an interest and to be irrevocable.
In the event of damage or destruction if (a) there is
projected net annual income from the Premises from (x) the
leases for the residential units remaining in full force and
effect after such damage or destruction plus (y) projected net
annual income from the anticipated operations of the Inn at
Henderson"s Wharf, a condominium unit at the Premises, after
reconstruction thereof, based upon historical occupancy levels
in an amount not greater than seventy percent (70%), as
determined by Beneficiary in its sole and absolute, but
reasonable discretion, equal to or greater than one hundred
twenty percent (120%) of the sum of the annual principal and
interest payments of the Note, the annual taxes and
assessments and the insurance premiums, (b) during the period
of repair, there is sufficient rental income including rental
abatement insurance which is sufficient to pay scheduled
principal and interest payments on the Note and sufficient to
comply with the other provisions of this section, (c) the
insurance proceeds are insufficient to pay off the outstanding
balance of the Note, (d) restoration and repair is reasonably
estimated to be concluded at least three (3) months prior to
the maturity of the Note or at least three (3) months prior to
any date the Note may be called due and payable, (e) the
insurers do not deny liability as to the insureds, and (f)
there is no breach or default under the terms of the Note, the
Guaranty or the Loan Documents, such proceeds, after deducting
therefrom any expenses incurred in the collection thereof,
shall be used to reimburse Grantor for the cost of the
rebuilding or restoration of buildings or improvements on said
Premises. The buildings and improvements shall be so restored
or rebuilt as to be of at least equal value and substantially
the same character as prior to such damage or destruction. In
the event Grantor is entitled to reimbursement out of
insurance proceeds, such proceeds shall be made available,
from time to time, upon Beneficiary being furnished with
satisfactory evidence of the estimated cost of completion
thereof and with such architect"s certificates, waivers of
lien, contractors" sworn statements and other evidence of cost
and of payments as Beneficiary may reasonably require and
approve. If the estimated cost of the work exceeds One
Hundred Thousand Dollars ($100,000) Beneficiary shall also be
furnished with all plans and specifications for such
rebuilding or restoration as the Beneficiary may reasonably
require and approve. No payment made prior to the final
completion of the work shall exceed ninety percent (90%) of
the value of the work performed from time to time, and at all
times the undisbursed balance of said proceeds remaining in
the hands of Beneficiary shall be at least sufficient to pay
for the cost of completion of the work free and clear of
liens. If the amount of such insurance proceeds is
insufficient to cover the cost of building or restoration,
Grantor shall pay such cost in excess of the insurance
proceeds before being entitled to any reimbursement out of the
insurance proceeds. Any surplus which may remain out of the
insurance proceeds after payment of such cost of repair or
rebuilding shall, at the option of Beneficiary, be applied on
account of the indebtedness secured hereby (whether then due
or not). In the event Grantor is not entitled to
reimbursement out of such proceeds, then, at the option of the
Beneficiary, such proceeds shall be applied without prepayment
premium in payment or reduction of the indebtedness secured
hereby, whether due or not.
Financial Statements. Deliver without expense to
Beneficiary, within ninety (90) days after the end of each
Grantor"s fiscal year, copies of a detailed statement of
income and expenses of Grantor, Borrower and the Premises
containing a balance sheet as at the close of such fiscal year
and an income statement for such fiscal year, which shall be
in the form and contain information of the type customary in
businesses of the kind conducted by Grantor and shall be
prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods
involved, and shall be in reasonable detail and be certified
by Grantor and Borrower. Such financial statements shall
include a current rent roll of the Premises, certified by
Grantor, showing, with respect to each tenant, the name of the
tenant, the space occupied, the date and term of such lease,
the amount of annual rental, percentage rental (if any) and
additional rental, and all renewal, purchase and termination
options. Where the leases require tenants to furnish
financial statements, Grantor shall cause similar financial
statements to be furnished to Beneficiary for all such tenants
of the Premises, or any portion thereof, and all guarantors of
any lease(s) of the Premises, or any portion thereof. Grantor
shall deliver to Beneficiary, with reasonable promptness, such
other data and information as Beneficiary may reasonably
request.
Payment of Obligations. Pay all sums, the failure to pay
which may result in the imposition of a lien, charge or
encumbrance on all or any portion of the Premises or which may
result in conferring upon a tenant of any part of the Premises
a right to recover such sums as prepaid rent or to deduct such
sums from future rental payments.
Operation of Premises. At all times operate the Premises
in a sound and efficient manner and not acquire any fixtures,
equipment, furnishings or other property covered, or intended
to be covered, by the Loan Documents subject to any lien,
charge or encumbrance taking precedence over the lien of this
Deed of Trust.
Further Instruments. Execute, acknowledge, deliver, and
cause to be recorded or filed in the manner and place required
by any present or future law any instrument that may be
requested by Beneficiary, to publish notice, protect or
continue the lien of the Loan Documents or the interest of
Beneficiary in the Premises, and Grantor will pay or cause to
be paid (i) all filing and recording taxes and fees incident
to each filing and recording, (ii) all expenses incurred by
Beneficiary in connection with the preparation,execution, and
acknowledgement of all such instruments, other taxes, duties,
imposts, assessments, and charges arising out of or in
connection with the execution and delivery of such
instruments.
Compliance with Agreements. Perform and comply with all
of the terms, covenants, and conditions to be performed and
complied with by Grantor under the Guaranty, the Loan
Documents and all other agreements now or at any time
hereafter existing between Grantor and Beneficiary.
Lessee Deposits. Hold in trust, in a manner approved by
Beneficiary, all sums received by Grantor from any firm,
corporation, person, or persons as security for the
performance of the terms, covenants, or conditions contained
in any lease or agreement for the use or occupancy of the
Premises or any part thereof.
Compliance with Leases. Promptly observe and perform all
covenants, conditions, and agreements contained in any lease
or leases or other agreements now or hereafter affecting or
relating to the Premises, or any portion thereof, on the part
of the Grantor to be observed and performed; enforce the
observance and performance of all covenants, conditions, and
agreements by other parties to such leases and agreements; not
accept any prepayment of rent or any installments of rent
under such leases for more than one (1) month in advance;
furnish to Beneficiary a copy of such lease or agreement,
forthwith upon its execution; and do or cause to be done all
things necessary to preserve, intact and unencumbered, any and
all easements, appurtenances, and other interests and rights
in favor of or constituting any portion of the Premises. It
is understood and agreed that all rents deriving from or
arising from the Premises received by Grantor are to be held
by Grantor as a trust fund to be used first for payments
required and due under the Note and/or Guaranty and legitimate
operating expenses of the Premises and any excess may be
retained by Grantor.
Restoration. If any of the Premises shall be damaged or
destroyed, in whole or in part, by fire or other casualty or
by taking in condemnation proceedings or the exercise of any
right of eminent domain, then promptly restore, replace, or
rebuild the same to as nearly as possible the value, quality,
and condition, they were in immediately prior to such fire or
other casualty or taking, with such alterations or changes as
may be approved in writing by Beneficiary, provided, however,
if Beneficiary has no obligation under the insurance portion
of this Section 1.4 to make insurance or condemnation proceeds
available for such purpose, and Beneficiary does not otherwise
elect to make any such proceeds so available, Grantor"s
obligations under this restoration provision shall not include
the obligation referred to above but only an obligation to
make such repairs as are necessary to make the remaining
undamaged portion of such improvements (if any) useable for
their intended purpose.
Property Management. Any management company involved
with the management of the Premises and any management
contracts relating to the Premises (and any amendments
thereto) must be acceptable to Beneficiary in its sole
discretion. Any management agreement shall provide that it
shall be terminable upon not more than thirty (30) days"
notice at Beneficiary"s option in the event of an occurrence
of an Event of Default and be subordinate to Beneficiary"s
rights under the Note, the Guaranty and Loan Documents, and
the management agreement shall so provide.
1.5 Anti-forfeiture. Grantor hereby represents and warrants
to Beneficiary that there has not been committed by Grantor or any
other person involved with the Premises any act or omission
affording the federal government or any state or local government
the right of forfeiture as against the Premises or any part thereof
or any monies paid in performance of Grantor"s obligations under
the Guaranty or under any of the other Loan Documents.Grantor
hereby covenants and agrees not to commit, permit or suffer to
exist any act or omission affording such right of forfeiture. In
furtherance thereof, Grantor hereby indemnifies Beneficiary and
agrees to defend and hold Beneficiary harmless from and against any
loss, damage or injury by reason of the breach of the covenants and
agreements or the warranties and representations set forth in this
Section 1.5. Without limiting the generality of the foregoing, the
filing of formal charges or the commencement of proceedings against
Grantor, Beneficiary or all or any part of the Premises under any
federal or state law for which forfeiture of the Premises or any
part thereof or of any monies paid in performance of Grantor"s
obligations under the Loan Documents is a potential result, shall,
at the election of Beneficiary, constitute an Event of Default
hereunder without notice or opportunity to cure.
1.6 Americans with Disabilities Act. Except as disclosed in
the existing building inspection report dated May 20, 1995, a true
and complete copy of which has been delivered to Beneficiary,
Grantor hereby represents to Beneficiary that the Premises are in
compliance with the Americans with Disabilities Act (the "ADA Act")
and all regulations promulgated thereunder. Grantor hereby
covenants and agrees not to permit, commit or suffer to exist any
condition which might result in a violation to the ADA Act, and if
any such condition should occur to immediately remedy any such
condition. Grantor hereby indemnifies and agrees to defend and
hold Beneficiary harmless from and against any loss, cost or damage
by reason of the breach of the covenants, agreements and indemnities
set forth in this Section 1.6.
1.7 Cure of Grantor"s Default. If Grantor shall fail to
comply with any of the terms, covenants, and agreements contained
herein or in the Guaranty or any of the Loan Documents, then
Beneficiary may (but shall not be obligated to do so) without
further demand upon Grantor and without waiving or releasing
Grantor from any such obligation, remedy such default for the
account of Grantor. Grantor agrees to repay, upon demand by
beneficiary, all sums advanced by Beneficiary to remedy such
default, together with interest at the rate at which interest
accrues on amounts due under the Note after the same become due.
All such sums, together with interest as aforesaid, shall become
additional indebtedness secured by the Deed of Trust. No such
payment by Beneficiary shall be deemed to relieve Grantor from any
default hereunder.
Beneficiary is hereby authorized, in the place and stead of
Grantor, relating to taxes, assessments, water rents and charges,
sewer rents and charges and other governmental or municipal
charges, fines, impositions or liens asserted against the Premises
to make such payments according to any bill, statement or estimate
procured from the appropriate public office without inquiry into
the accuracy of the bill, statement or estimate or into the
validity of any tax, assessment, sale, forfeiture, tax lien or
title or claim thereof. Relating to any apparent or threatened
adverse title, lien, statement of lien, encumbrance, claim or
charge, Beneficiary, acting reasonably, shall be the sole judge of
the legality or validity of same. Beneficiary may do so whenever,
in its judgment and discretion, such advance or advances shall seem
necessary or desirable to protect the full security intended to be
created by this instrument.
1.8 Condominium. Grantor will faithfully, promptly and
diligently take all steps necessary, appropriate and advisable in
order to (i) maintain in effect the condominium created pursuant to
the Declaration, (ii) comply with all applicable laws, rules and
regulations of all federal, state and local agencies having
jurisdiction and the following requirements:
(a) None of the condominium documents shall, during the
term of this Deed of Trust, be altered, amended, supplemented,
terminated, surrendered, released, cancelled or annulled,
without the prior written consent of Beneficiary in each
instance. Grantor shall provide to Beneficiary copies of all
documents and information deemed necessary by Beneficiary for
its evaluation of such request, including, without limitation,
the approvals of any governmental agencies having
jurisdiction. Beneficiary may condition its consent on
receipt of a legal opinion, in form and substance satisfactory
to Beneficiary, that the condominium documents comply with the
requirements of the laws of the jurisdiction in which the
Premises are located and all rules and regulations issued
pursuant thereto. Grantor shall reimburse Beneficiary for the
reasonable fees and disbursements of Beneficiary"s counsel in
connection with the review and approval of such documents.
(b) At such time as all applicable requirements of this
Section have been satisfied and Beneficiary approves the
amendments to the condominium documents, Beneficiary shall
instruct Trustee to join in and consent to such documents
and/or by appropriate instrument subordinate the lien of this
Deed of Trust thereto.
(c) Grantor shall provide an endorsement to
Beneficiary"s title insurance policy insuring the lien of this
Deed of Trust to reflect the recordation of the amendment(s)
to the condominium documents and to date down the policy and
the condominium endorsement to a date subsequent to the
recording of said documents.
(d) Grantor without the prior written consent of
Beneficiary in each instance, shall not vote or cause its vote
to be made or any other act to be taken at any meeting of the
council of co-owners of the condominium, that would in any
manner alter or affect the condominium, the condominium plat,
Declaration, bylaws, or other condominium documents, or which,
in connection with any matter other than a matter of ordinary
maintenance or operation, may result in a charge or assessment
or lien against the units in the condominium. Grantor shall
notify Beneficiary, from time to time, of all matters of which
Grantor has received notice, or with respect to which Grantor
has been placed on inquiry, which indicates that a default has
occurred or may occur or is threatened under the condominium
plat, Declaration, bylaws or other condominium documents, and
in such event, Grantor shall do all things necessary to cure
such default. Grantor shall promptly deliver to Beneficiary
a correct and complete copy of any notice of default received
by Grantor with respect to any of its obligations under the
laws of the jurisdiction in which the Premises are located.
In the event of any such default, (A) Beneficiary shall have
the same rights and privileges which the owner of a unit has
by virtue of the laws of the jurisdiction in which the
Premises are located as though Beneficiary were in fact a unit
owner, including, without limitation, all voting rights
accruing to such a unit owner; (B) Beneficiary may exercise
any and all of said rights; (C) while any such default
continues, Grantor hereby nominates and appoints Beneficiary
irrevocably as Grantor"s proxy to vote and, as Grantor"s
agent, to act with respect to all such rights; and (D) written
notice of any such default from Beneficiary to the board of
directors of the council of owners administering the
condominium shall be deemed conclusive as to such right of
Beneficiary to vote and to exercise all such rights.
(e) All of the provisions of this Section shall be
deemed to be covenants and warranties of Grantor, and the
failure of Grantor to comply strictly with all such
requirements shall be deemed to be a default hereunder, and
shall entitle Beneficiary, and Trustee at the direction of
Beneficiary, to exercise all of the rights and privileges
provided for herein in respect of any default hereunder,
including, without limitation, the right, in the place and
stead of Grantor, to take any and all actions which Grantor,
as fee owner of the Premises, would have the right by law to
take relative to maintaining the condominium, marketing and
selling the units, and conveying title thereto; and said right
to take any and all such action shall be deemed to be
necessary, advisable and proper to conserve the Premises.
(f) As further security for the payment of the
indebtedness and the performance of the obligations, covenants
and agreements secured hereby, Grantor hereby transfers, sets
over and assigns to Trustee all rights, options, and
privileges of Grantor in connection with the submission of the
Premises to the horizontal property regime and all rights,
options and privileges expressly or impliedly reserved or
granted to Grantor under the condominium plat, the
Declaration, the bylaws of the council of owners and the other
condominium documents, and all rights, options and privileges
granted to Grantor under applicable laws of the jurisdiction
in which the Premises are located, together with all of the
proceeds of all of the foregoing; reserving to Grantor,
however, so long as Grantor is not in default hereunder, the
right to exercise any and all such rights, options and
privileges as aforesaid, subject to and in accordance with the
terms, conditions and requirements of this Deed of Trust. In
no event shall Trustee or Beneficiary (or any successor to
Beneficiary by foreclosure or deed in lieu of foreclosure) be
liable as declarant under the condominium documents unless and
until Beneficiary has elected such status by written notice to
all other unit owners of the condominium.
ARTICLE II
EVENTS OF DEFAULT: REMEDIES
2.1 Events of Default; Acceleration. If any one or more of
the following events (hereinafter defined and designated as "Events
of Default") shall occur:
(a) an Event of Default as defined in the Note;
(b) a failure in the payment of all or any other sum
under the Guaranty, this Deed of Trust or in any other
agreement between Grantor and Beneficiary, whether now or at
any time hereafter existing, within ten (10) days of its due
date; or
(c) any warranty or material representation in the Note,
the Guaranty, this Deed of Trust, or in any material statement
or certificate furnished pursuant to any of the foregoing,
shall be false, misleading or inaccurate; or
(d) a failure in the due observance or performance of
any other covenant, condition, or agreement to be observed or
performed pursuant to the provisions of the Guaranty, the Loan
Documents, or in any other agreement between Grantor and
Beneficiary, whether now or at any time hereafter existing and
such failure is not cured by the performance so required, and
the remediation of any consequences the delay in such
performance may have caused, within fifteen (15) days after
notice of such failure is given to Grantor, provided, however,
any failure shall be deemed an Event of Default upon the
occurrence thereof (for which no notice shall be required and
no cure period shall be available to Grantor) if such failure
(i) is the third to occur within any period of twelve (12)
consecutive months (and notice of the first two failures has
been sent to Grantor), regardless of whether the same or
different failures are involved and notwithstanding that
Grantor may have cured within any applicable cure period any
previous failures occurring within such twelve (12) month
period, or (ii) in the reasonable discretion of Beneficiary,
constitutes or creates a clear and present emergency or threat
to property described in this Deed of Trust or the lien or
security interest created in any of the Loan Documents. In
the event the fifteen (15) day cure period applies to a
failure under this subparagraph (d) and such failure cannot,
in the sole discretion of Beneficiary, reasonably be cured
within said fifteen (15) day period, Grantor shall have an
additional thirty (30) days to cure such failure so long as
Grantor is diligently pursuing said cure. In no event shall
the cure period exceed the total of forty-five (45) days; or
(e) any judgment shall be recovered against Grantor or
any attachment or other court process shall issue, which shall
become or create a lien upon the Premises or any part thereof
and such judgment, attachment or other court process shall not
be discharged or effectually secured or execution thereon
stayed within sixty (60) days from the entry thereof;
then and in any such case, Beneficiary may accelerate the Note as
provided therein and, by written notice to Grantor, demand payment
in full under the Guaranty to be forthwith due and payable, and
upon such declaration, the principal, together with interest
accrued thereon and to the extent permitted by law, any premium
which is then payable on the Note upon a prepayment of principal,
shall become due and payable by Guarantor under the terms of the
Guaranty, anything in this Deed of Trust or in the Note to the
contrary notwithstanding.
Grantor declares that, upon the occurrence of any Event of
Default (A) Grantor does assent to the passing of a decree for the
sale of the Premises or any portion thereof in accordance with the
Real Property Article of the Code of Public General Laws of
Maryland and subtitle W of the Maryland Rules, and any additions or
supplements thereto, and (B) Beneficiary, Trustee, or such other
person or entity designated by Beneficiary, shall have the power to
and may sell the Premises at public auction. Any such public
auction may be adjourned by Trustee by announcement at the time and
place appointed for such sale or for such adjourned sale(s),and,
without further notice or publication, such sale may be made at the
time and place to which same shall be so adjourned. Upon the
completion of any sale, Trustee shall execute and deliver to the
purchaser(s) a good and sufficient deed of conveyance, or
assignment and transfer, lawfully conveying, assigning and
transferring the property sold. The receipt of Trustee, after
payment to them of such purchase money, shall be full and
sufficient discharge of any purchaser(s) of the Premises, sold as
aforesaid for the purchase money, and no such purchaser(s), or its
representatives, grantees, or assigns, after paying such purchase
money and receiving such receipt, shall be bound to see to the
application of such purchase money. Upon any sale made under or by
virtue of this Deed of Trust, Beneficiary shall be a competent
bidder at such sale.
2.2 Receiver. It is expressly understood and agreed by
Grantor that, at any time after an Event of Default, Beneficiary
shall be entitled to as a matter of right, without notice and
without giving bond to Grantor, or anyone claiming under it,
without regard to the solvency or insolvency of Grantor or any
person liable for any indebtedness hereby secured or to the value
of the Premises or occupancy hereof as a homestead, to have itself
appointed as a "Mortgagee in Possession" or have a receiver
appointed of all or any part of the Premises and of the earnings,
income, rents, issues, and profits thereof, pending such
proceedings, with such powers as the court making such appointment
shall confer, and Grantor does hereby irrevocably consent to such
appointment.
2.3 Possession by Beneficiary. Upon the happening of an
Event of Default, then and in every such case Beneficiary, either
itself or by its agents or attorneys, may, in its discretion, enter
upon and take possession of the Premises, or any part or parts
thereof, and may exclude Grantor and its agents and employees
wholly therefrom, and having and holding the same, Beneficiary may
use, operate, manage, and control the Premises or any part thereof,
and conduct the business thereof, either personally or by
superintendents, managers, agents, employees and attorneys, and
from time to time, by purchase, repair or construction, may
maintain and restore and may insure and keep insured, the
buildings, structures, improvements, fixtures, and other property,
real and personal, comprising the Premises. After paying the
expense of operating the Premises, including a reasonable
commission, Beneficiary shall apply the moneys arising therefrom to
the amount then due on the Note.
2.4 Sale by Beneficiary. Any real estate or any interest or
estate therein sold pursuant to the terms of this Deed of Trust or
any court order or decree obtained pursuant to the Deed of Trust
shall be sold in one parcel, as an entirety, or in such parcels and
in such manner or order as Beneficiary, in its sole discretion, may
elect, to the maximum extent permitted by the laws of the state in
which the Premises are situated.
2.5 Purchase by Beneficiary. In the case of any sale of the
Premises pursuant to any judgment or decree of any court or at
public auction or otherwise in connection with the enforcement of
any of the terms of this Deed of Trust, Beneficiary, its successors
or assigns, may become the purchaser, and for the purpose of making
settlement for or payment of the purchase price, shall be entitled
to deliver over and use the Guaranty and any claims for interest
accrued and unpaid thereon, together with all other sums, with
interest, advanced and unpaid hereunder, in order that there may be
credited as paid on the purchase price the sum then due under the
Guaranty including principal and interest thereon and all other
sums with interest, advanced and unpaid hereunder. Specifically,
but not as a limitation, on foreclosure of this Deed of Trust there
shall be included in the computation of the amount due the amount
of a reasonable fee for legal services (including, without
limitation, the allocated costs for services of Beneficiary"s in-
house counsel) rendered to the Beneficiary in connection with in
the foreclosure proceedings and other collection efforts, including
the reasonable costs of an environmental audit of the Premises, an
engineering report, as well as costs of title evidence, appraisals
and all disbursements, allowances, and costs provided by law.
2.6 Payment of Indebtedness and Other Expenses. In any case
in which Beneficiary has the right to sell the Premises or to
institute foreclosure proceedings, Grantor agrees to pay to the
Beneficiary the whole amount then due and payable thereon for
interest and principal and, to the extent permitted by law,
premium, if any, with interest on overdue principal and interest at
the rate specified in the Note from the date the same become
payable whether by lapse of time, acceleration or otherwise. In
the event Beneficiary commences any proceeding to foreclose this
Deed of Trust or any other suit in equity, action at law or other
appropriate proceeding to enforce its rights under the Guaranty or
any of the Loan Documents, Grantor covenants and agrees to pay to
Beneficiary all costs and expenses (including actual attorneys"
fees) paid or incurred by Beneficiary in connection therewith,
which costs and expenses may be included in any judgment in
Beneficiary"s favor in any such suit, action or proceeding.
2.7 Trustee"s Commissions. Upon foreclosure, Trustee shall
be entitled to retain as compensation a commission not exceeding
one percent (1%) of the proceeds of sale on foreclosure, less any
amounts paid to Trustee pursuant to the following sentence.
Immediately upon the first insertion of an advertisement of any
sale of the Premises, or any part thereof, under this Deed of
Trust, there shall be and become due and owing by Grantor, a one-
half of one percent (.5%) commission on the total amount of the
indebtedness, and Beneficiary shall not be required to receive the
principal and interest only of the indebtedness in satisfaction
thereof, but said sale may be proceeded with unless, prior to the
day appointed therefor, tender is made of said principal, interest,
commissions and all expenses and costs incident to such sale.
2.8 Remedies Cumulative. No remedy herein conferred upon or
otherwise available to Beneficiary is intended to be or shall be
construed to be exclusive of any other remedy or remedies; but each
and every such remedy shall be cumulative and shall be in addition
to every other remedy given hereunder and under any of the Loan
Documents and now or hereafter existing at law or in equity or by
statute. No delay or omission to exercise any right or power
accruing upon any default shall impair any such right or power, or
shall be construed to be a waiver of any such default, or an
acquiescence therein; nor shall the giving, taking or enforcement
of any other or additional security, collateral or guaranty for the
payment of the indebtedness secured under this Deed of Trust
operate to prejudice, waive or affect the security of this Deed of
Trust or any rights, powers or remedies hereunder; nor shall
Beneficiary be required to first look to, enforce, or exhaust any
such other or additional security, collateral, or guaranty.
2.9 Waiver of Rights. To the extent that such rights may
then be lawfully waived, Grantor hereby covenants that it will not
at any time insist upon or plead, or in any manner whatever claim
or take any benefit or advantage of, (i) any stay or extension or
moratorium law now or at any time hereafter in force; (ii) any law
now or hereafter in force providing for the valuation or
appraisement of the Premises or any part thereof prior to any sale
or sales thereof to be made pursuant to any provisions herein
contained, or pursuant to the decree, judgment or order of any
court of competent jurisdiction; (iii) any law now or at any time
hereafter made or enacted granting a right to redeem the property
so sold or any part thereof; and (iv) any right to trial by jury of
any claim or issue arising hereunder or in connection herewith. To
the extent permitted by law, Grantor expressly waives for itself
and on behalf of each and every person acquiring any interest in or
title to the Premises or any part thereof, subsequent to the date
of this Deed of Trust, all benefit and advantage of any such law or
laws; and covenants that it will not invoke or utilize any such law
or laws or otherwise hinder, delay or impede the execution of any
power herein granted and delegated to Beneficiary, but will suffer
and permit the execution of every such power as though no such law
or laws had been made or enacted.
2.10 Indulgences by Beneficiary. In the event that
Beneficiary (a) grants any extension of time or forbearance with
respect to the payment of any indebtedness secured by this Deed of
Trust; (b) takes other or additional security for the payment
thereof; (c) waives or fails to exercise any right granted herein
or under the Note, the Guaranty or any of the Loan Documents; (d)
grants any release, with or without consideration, of the whole or
any part of the security held for the payment of the debt secured
hereby or the release of any person liable for payment of such
debt; (e) amends or modifies in any respect any of the terms and
provisions hereof or of the Note (including substitution of another
note(s)) or any of the Loan Documents; then and in any such event,
such act or omission to act shall not, unless otherwise agreed in
writing by Beneficiary, release Grantor, or any co-makers,
sureties, guarantors, shareholders, under any covenant of the Note
or any Loan Document, nor preclude Beneficiary from exercising any
right, power, or privilege herein granted or intended to be granted
in the event of any other default then made or any subsequent
default or Event of Default, and without in any way impairing or
affecting the lien or priority of this Deed of Trust or of any Loan
Document.
2.11 Application of Proceeds. The proceeds of any sale or
sales of the Premises or any part thereof pursuant to this Article
II shall be applied in the following order:
(a) To the payment of all costs of the sale and the
foreclosure proceedings, including, without limitation,
Trustee"s fees, actual attorneys" fees and the cost of title
searches, abstracts, surveys, engineering reports, appraisals
and environmental investigations;
(b) To the payment of all other expenses of Beneficiary,
including, without limitation, all moneys expended by
Beneficiary and all other amounts payable by Grantor to
Beneficiary hereunder or under the Loan Documents, with
interest thereon; and all taxes, assessments or liens superior
to the lien thereof;
(c) To the payment of the principal, interest and
premium, if any, on the Guaranty;
(d) To the payment of any other sums owed by Grantor to
Beneficiary; and
(e) To the payment of the surplus, if any, to Grantor or
to whomsoever shall be entitled thereto.
2.12 Abandonment of Proceedings. In case Beneficiary shall
have proceeded to enforce any right under this Deed of Trust by
foreclosure, sale, entry or otherwise, and such proceedings shall
have been discontinued or abandoned for any reason or shall have
been determined adversely, then, and in every such case, Grantor
and Beneficiary shall be restored to their former positions and
rights hereunder with respect to the Premises subject to the lien
hereof.
2.13 Partial Payments. Acceptance by Beneficiary of any
payment which is less than payment in full of all amounts due and
payable at the time of such payment shall not constitute a waiver
of Beneficiary"s right to demand payment of the balance due, or any
other rights of the Beneficiary at that time or any subsequent
time.
2.14 Tender of Payment After Acceleration. In case, after
legal proceedings are instituted to foreclose the lien of this Deed
of Trust, tender is made of the entire indebtedness due hereunder,
Beneficiary shall be entitled to reimbursement for expenses
incurred in connection with legal proceedings, including such
expenditures as are enumerated above, and if the Note provides for
a "prepayment privilege fee" at the time tender of payment is made,
then the amount necessary to pay the loan in full shall include the
prepayment privilege fee in addition to all expenses, and such
expenses and prepayment privilege fee shall be so much additional
indebtedness secured by this Deed of Trust, and no such suit or
proceedings shall be dismissed or otherwise disposed of until such
fees, expenses, and charges shall have been paid in full.
ARTICLE III
POSSESSION AND RELEASE OF THE PREMISES
3.1 Release and Replacement of Equipment. Grantor may,
without obtaining any release from Beneficiary, sell or otherwise
dispose of, free from the lien of this Deed of Trust, any of the
Premises described in Paragraph (3) of the Granting Clause hereof
which may have become obsolete, inadequate, worn out, or otherwise
unsuitable or unnecessary for use in connection with the Premises,
provided, however, that Grantor shall have theretofore and since
the date hereof acquired replacements therefor (in such manner as
shall extend to Beneficiary a first lien or security interest
therein) which, while not being necessarily of the same character,
will be of comparable value and efficiency. Grantor shall have the
right to finance the acquisition of any new personal property it
acquires in connection with the operation of the Premises only with
the prior written consent of Beneficiary, which consent shall not
be unreasonably withheld provided that the new personal property
being acquired does not effectively replace any personal property
theretofore unencumbered other than by this Deed of Trust.
3.2 Condemnation. If all or any part of the Premises is
damaged, taken, or acquired, either temporarily or permanently, in
any condemnation proceeding, by exercise of the right of eminent
domain, by sale in lieu of condemnation or eminent domain, or by
the alteration of the grade of any street affecting the said
Premises, the amount of any award or other payment for such taking
or damages made in consideration thereof, to the extent of the full
amount of the then remaining unpaid indebtedness secured hereby, is
hereby assigned to Beneficiary, who is empowered to collect and
receive the same and to give proper receipts therefor in the name
of Grantor, and the same shall be paid forthwith to Beneficiary.
Any award or payment so received by Beneficiary may,at the option
of Beneficiary, be retained and applied, in whole or in part, to
the indebtedness secured hereby (whether or not then due and
payable), in such manner as Beneficiary may determine except as
specifically limited hereinafter, or released, in whole or in part,
to Grantor for the purpose of altering, restoring, or rebuilding
any remaining part of the Premises which may have been altered,
damaged, or destroyed as the result of such taking, alteration, or
proceeding, but Beneficiary shall not be obligated to see to the
application of any amounts so released. Any applicable prepayment
fee which results from the application of the award to the
prepayment of the indebtedness shall be paid as part of the award
and not in addition thereto. Until such time as such award or
other payment is actually received by Beneficiary and applied to
the indebtedness secured hereby and Beneficiary has agreed in
writing to a reduction of the monthly payments, Grantor shall
continue paying the constant monthly payment for principal and
interest on the unpaid principal balance of the Note at the rate of
interest therein specified.
3.3 Satisfaction of Deed of Trust. Whenever Grantor shall
pay or cause to be paid the entire principal, interest and premium,
if any, due and to become due upon the Guaranty, and shall have
performed and observed all of the terms, covenants, and conditions
by it to be performed or observed under the Guaranty, this Deed of
Trust, and all other agreements now or at any time hereafter
existing between Grantor and Beneficiary, then and in such event
the Premises shall revert to Grantor; and Beneficiary or Trustee
(at Beneficiary"s direction) shall forthwith execute and deliver to
Grantor an appropriate instrument of release, satisfaction and
discharge.
ARTICLE IV
SECURITY AGREEMENT
This Deed of Trust is hereby deemed to be as well a Security
Agreement for the purpose of creating hereby a security interest
securing the indebtedness. Without derogating any of the
provisions of this Deed of Trust, Grantor by this Deed of
Trust:
(a) grants to Beneficiary a security interest in all of
the Grantor"s right, title and interest in and to all
Collateral and fixtures, together with all additions,
accessions and substitutions and all similar property
hereafter acquired and used or obtained for use on, or in
connection with the Premises. The proceeds of said Collateral
and fixtures are intended to be secured hereby; however, such
intent shall never constitute an express or implied consent on
the part of Beneficiary to the sale of any or all Collateral
or fixtures;
(b) agrees that the security interest hereby granted by
this Deed of Trust shall secure the payment of the
indebtedness specifically described and shall also secure
payment of any future debt or advancement owing by Grantor to
Beneficiary with respect to the Premises;
(c) agrees not to sell, convey, mortgage or grant a
security interest in, or otherwise dispose of or encumber, any
of the Collateral or fixtures or any of Grantor"s right,
title or interest therein without first securing Beneficiary"s
written consent unless such Collateral or fixture is replaced
with Collateral or fixtures of comparable value and efficiency
(in such manner as shall extend to Beneficiary a first lien or
security interest therein); and Beneficiary may, at its sole
option, require Grantor to apply the proceeds from the
disposition of Collateral or fixtures in reduction of the
indebtedness secured hereby;
(d) agrees that if Grantor"s rights in the Collateral
are voluntarily or involuntarily transferred, whether by sale,
creation of a security interest, attachment, levy, garnishment
or other judicial process, without the written consent of
Beneficiary, such transfer constitutes an Event of Default by
Grantor under the terms of this Deed of Trust;
(e) agrees that upon or after the occurrence of any
Event of Default hereunder, Beneficiary may, with or without
notice to Grantor, exercise its rights to declare all
indebtedness secured by the security interest created hereby
immediately due and payable, in which case Beneficiary shall
have all rights and remedies granted by law and more
particularly the Uniform Commercial Code as enacted in the
State of Maryland, including, but not limited to, the right to
take possession of the Collateral, and for this purpose may
enter upon any premises on which any or all of the Collateral
is situated without being deemed guilty of trespass and
without liability for damages thereby occasioned, and take
possession of and operate said Collateral or remove it
therefrom. Beneficiary shall have the further right to take
any action it deems necessary, appropriate or desirable, at
its option and in its discretion, to repair, refurbish or
otherwise prepare the Collateral for sale, lease or other use
or disposition, and to sell at public or private sales or
otherwise dispose of, lease or utilize the Collateral and any
part thereof in any manner authorized or permitted by law and
to apply the proceeds thereof toward payment of any costs and
expenses, to the extent permitted by law, thereby incurred by
Beneficiary and toward payment of Grantor"s obligations
including the Note and all other indebtedness described in
this Deed of Trust, in such order and manner as Beneficiary
may elect. To the extent permitted by law, Grantor expressly
waives any notice of sale or other disposition of the
Collateral and any other rights or remedies of a debtor or
formalities prescribed by law relative to a sale or
disposition of the Collateral or to exercise any other right
or remedy existing after default hereunder; and to the extent
any notice is required and cannot be waived Grantor agrees
that if such notice is deposited for mailing, postage prepaid,
certified mail, to Grantor at the address designated in
Section 5.4 hereof at least fifteen (15) days before the time
of sale or disposition, such notice shall be deemed reasonable
and shall fully satisfy any requirements for giving of said
notice;
(f) agrees, to the extent permitted by law and without
limiting any rights and privileges herein granted to
Beneficiary, that Beneficiary may dispose of any or all of the
Collateral at the same time and place upon giving the same
notice provided for in this Deed of Trust, and in the same
manner as provided under the terms and conditions of this Deed
of Trust; and
(g) authorizes Beneficiary to file, in the jurisdiction
where this Deed of Trust will be given effect, financing
statements including renewal or confirmation thereof, covering
the Collateral; and at the request of Beneficiary, Grantor
will join Beneficiary in executing one or more such financing
statements including amendment, renewal or confirmation
thereof, pursuant to the Uniform Commercial Code as enacted in
the State of Maryland in a form satisfactory to Beneficiary,
and will pay the cost of filing the same in all public offices
at any time and from time to time wherever Beneficiary deems
filing or recording of any financing statements including
renewal or confirmation thereof or of this instrument to be
desirable or necessary.
ARTICLE V
MISCELLANEOUS
5.1 Severability. If any term, covenant, or condition of the
Note or any Loan Document, or the application thereof to any person
or circumstance shall, to any extent, be invalid or unenforceable,
the remainder of the Note, and the Loan Documents, and the
application of such term, covenant, or condition to persons or
circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby and each term,
covenant, or condition of the Note and the Loan Documents shall be
valid and be enforced to the fullest extent permitted by law.
5.2 Counterparts. This Deed of Trust may be simultaneously
executed in any number of counterparts, and all said counterparts
executed and delivered, each as an original, shall constitute but
one and the same instrument.
5.3 Subrogation. Beneficiary shall be subrogated to all
liens, although released of record, which are paid out of the
proceeds of the Note or other indebtedness secured by this Deed of
Trust.
5.4 Notices. Whenever in this Deed of Trust it shall be
required or permitted that notice be given by any party to the
other, such notice shall be in writing, and any notice so sent
shall be deemed to have been given on the date that the same is
deposited in the United States mail, postage prepaid. Notices
shall be addressed to Beneficiary at 4321 North Ballard Road,
Appleton, Wisconsin 54919, Attention Investment Division, and to
the Grantor at c/o Claremont Management Corp., Batterymarch Park
II, Quincy, Massachusetts 02169with a copy to Richard Rubin, Esq.,
Neuberger, Quinn, Gielen, Rubin & Gibber, P.A., 27th Floor,
Commerce Place, One South Street, Baltimore, Maryland 21202 or at
such other address as either party may from time to time designate
in writing in lieu thereof.
5.5 Change in Taxation of Mortgages. In the event of the
passage, after the date of this Deed of Trust, of any law deducting
from the value of the real property comprising the Premises, for
the purpose of taxation, any lien thereon, or changing in any way
the laws now in force for the taxation of mortgages, deeds of
trust, or debts secured thereby, for state or local purposes, or
the manner of the operation of any such taxes so as to affect the
interest of Beneficiary, then in such event, Grantor shall bear and
pay the full amount of such taxes, provided, however, that if for
any reason payment by Grantor of any such taxes would be unlawful,
or if the payment thereof would constitute usury or render the loan
or indebtedness secured hereby wholly or partially usurious under
any of the terms or provisions of the Note, the Deed of Trust or
otherwise, Beneficiary may, at its option, declare the whole sum
secured by this Deed of Trust with interest thereon to be
immediately due and payable, without a prepayment fee, or
Beneficiary may, at its option, pay that amount or portion of such
taxes as renders the loan or indebtedness secured hereby unlawful
or usurious, in which event Grantor shall concurrently therewith
pay the remaining lawful and non-usurious portion or balance of
said taxes.
5.6 No Excess Interest. If any charge in the nature of
interest provided for herein, in the Note, or in any instrument
evidencing indebtedness secured hereby shall result, because of the
monthly reduction of principal or for any reason at any time during
the life of the Note, in an effective rate of interest which, for
any month, transcends the limit of the usury or any other law(s)
applicable to the loan evidenced by the Note, then all sums in
excess of those lawfully collectible as interest for the period in
question shall, without further agreement of notice between or by
any party hereto, be applied upon principal immediately upon
receipt of such moneys by the holder of the Note, with the same
force and effect as if the Grantor had specifically designated such
extra sums to be so applied to principal and the holder of the Note
had agreed to accept such extra payment(s) as a premium-free
prepayment. In no event shall any agreed to or actual exaction as
consideration for the loan evidenced by the Note transcend the
limits imposed or provided by the law applicable to this
transaction for the use or detention of money or for the
forbearance in seeking its collection.
5.7 Waivers by Grantor. To the fullest extent permitted by
applicable law, Grantor, for itself, its successors and assigns,
and each and every person with any interest in the Premises, or any
part thereof, whether now owned or hereafter acquired, hereby
waives notice of maturity, demand, presentment for payment,
diligence in collection, and notice of non-payment and protest;
hereby consents and agrees to any extension of time, whether one or
more, for the payment thereof and/or to any and all renewals
thereof; and hereby consents and agrees that Beneficiary may amend
the terms thereof, may release all or any part of the security for
the payment thereof, and may release any party liable for the
payment thereof, without, in any event, affecting the terms or
effect of this Deed of Trust or the obligations or liabilities
hereunder of Grantor, its successors or assigns, or any person with
any interest in the Premises, or any part thereof, whether now
owned or hereafter acquired.
5.8 Additional Instruments. Grantor, from time to time,
within fifteen (15) days after request by Beneficiary, shall
execute, acknowledge, and deliver to Beneficiary such mortgages,
chattel mortgages, security agreements, or other similar security
instruments, in form and substance satisfactory to Beneficiary,
covering all property of any kind, whatsoever, owned by Grantor or
in which Grantor may have any interest which, in the sole opinion
of Beneficiary, is essential to the operation of the property
covered by this Deed of Trust. Neither a request so made by
Beneficiary, nor the failure of Beneficiary to make such a
request, shall be construed as a release of such property, or any part
thereof, from the lien of this Deed of Trust, it being understood
and agreed that this covenant and any such chattel mortgage,
security agreement, or other similar security instrument, delivered
to Beneficiary, are cumulative and given as additional security.
5.9 Applicable Law. This Deed of Trust shall be interpreted
in accordance with and, in all respects, governed by the internal
laws of the State of Maryland.
5.10 Expenses of Beneficiary.
(a) If Beneficiary is made a party to any suit or
proceeding by reason of the interest of Beneficiary in the
Premises, or if the Guaranty or any Loan Document is placed in
the hands of an attorney or attorneys to defend or enforce any
rights of Beneficiary, then Grantor shall reimburse
Beneficiary for all costs and expenses, including by way of
representation only, actual attorneys" fees, travel and
lodging expenses, recording fees, incurred by Beneficiary in
connection therewith. All amounts incurred by Beneficiary
hereunder shall be secured hereby and shall be due and payable
by Grantor to Beneficiary forthwith on demand, with interest
thereon at the rate at which interest accrues on amounts due
under the Note after the same became due.
(b) In the event Grantor initiates any request to
Beneficiary for (a) changes to this Deed of Trust or any
collateral documents thereto, (b) releases of any part of the
Premises or other property upon which a security interest has
been given to secure the indebtedness, or (c) any other
waivers, opinions or other documentary changes (other than a
satisfaction or assignment of the Deed of Trust at maturity or
in connection with a permitted prepayment), then Grantor shall
reimburse Beneficiary for any actual legal fees and expenses
incurred by Beneficiary in connection with the preparation and
review of such documentation. The need for legal review and
preparation of documentation shall be in the unrestricted
discretion of Beneficiary.
5.11 Successors of Grantor. In the event of the sale or
transfer of all or any part of the Premises, by operation of law or
otherwise and regardless of whether or not such sale or transfer
constitutes an Event of Default, Beneficiary is authorized and
empowered to deal with the transferee with reference to this deed
of Trust, the Premises, or the debt secured hereby, or with
reference to any of the terms or conditions contained herein, as
fully and to the same extent as it might deal with Grantor and
without in any way releasing or discharging any liabilities of
Grantor hereunder or under the Note or the Loan Documents.
5.12 Estoppel Certificates. Grantor, upon request of
Beneficiary, shall, from time to time, certify to Beneficiary or to
any proposed assignee of this Deed of Trust, by an instrument in
form satisfactory to Beneficiary, duly acknowledged, the amount
then owing on the sums secured hereby and the date on which
interest hereon has been paid and whether any offsets or defenses
exist against payment thereof or performance of any obligation of
Grantor under the Guaranty, this Deed of Trust, or any of the Loan
Documents, within ten (10) days. Beneficiary and any proposed
assignee of this Deed of Trust shall have the right to rely on any
such certification.
5.13 Amendment. Neither this Deed of Trust nor any term,
covenant, or condition contained herein may be amended, modified,
or terminated, except by an agreement in writing, signed by the
party against whom enforcement of the amendment, modification, or
termination is sought.
5.14 Construction. By execution of this Deed of Trust,
Grantor acknowledges both parties having participated in the
drafting of the document, the parties agree that the Note, this
Deed of Trust, and the Loan Documents shall be construed without
regard to any presumption or rule requiring construction against
the party causing such instruments to be drafted. The headings and
captions contained in this Deed of Trust are solely for convenience
of reference and shall not affect its interpretation. All terms
and words used in this Deed of Trust, whether singular or plural
and regardless of the gender thereof, shall be deemed to include
any other number and any other gender as the context may require.
5.15 Receipt by Grantor. Grantor hereby acknowledges that a
full, true, and complete copy of this Deed of Trust (including
Exhibits A and B hereto) was delivered to and received by it on the
date of actual execution hereof by Grantor, as set forth below.
5.16 Substitution of Trustee.
(a) Beneficiary shall have the irrevocable power, to be
exercised at any time or times hereafter and with or without
cause for any reason whatsoever, to substitute a trustee or
trustees in place of Trustee herein named, by an instrument in
writing duly executed, acknowledged and recorded among the
land records of the jurisdiction where the Premises are
located; and when such instrument is so recorded, all the
estate of Trustee thus superseded shall terminate and all the
right, title and interest of Trustee hereunder shall be vested
in the trustee or trustees named as its successor, and such
successor trustee or trustees shall have the same powers,
rights and duties which Trustee so superseded had under this
Deed of Trust. The exercise of this right to appoint a
successor trustee, no matter how often exercised, shall not be
deemed an exhaustion of said right. Irrespective of whether
Trustee consists of one or more persons or entities,
Beneficiary may name one or more persons or entities as
successor trustee as Beneficiary may determine.
(b) Trustee shall have the right to resign as trustee
hereunder at any time upon not less than ten (10) days" prior
written notice to Grantor and Beneficiary, in which event
Beneficiary shall exercise the right to appoint a successor
trustee pursuant to paragraph (a) of this Section before such
resignation becomes effective.
5.17 Authorization Regarding Trustee. Trustee may act
hereunder and may sell and convey the Premises, or any part
thereof, although said Trustee has been, may now be, or is
hereafter the attorneys or agents of Beneficiary with respect to
the loan, or with respect to any other matter or business
whatsoever, and Grantor and Beneficiary hereby irrevocably waive
any conflict of interest which may arise from any such relationship
between Trustee and Beneficiary. Trustee shall not be required to
take any action toward the execution and enforcement of this Deed
of Trust or to institute, appear in or defend any action, suit or
other proceeding in connection therewith where in the opinion of
Trustee such action will be likely to involve Trustee in expense or
liability, unless requested so to do by a written instrument signed
by Beneficiary and, if Trustee so requests, unless Trustee is
tendered security and indemnity satisfactory to Trustee against any
and all costs, expenses and liabilities arising therefrom.
5.18 Standard of Conduct of Trustee; Indemnification.
Trustee, by acceptance hereof, hereby covenants faithfully
to erform and fulfill the trusts herein created; provided,
however, that Trustee shall be liable hereunder only for gross
negligence, willful misconduct or bad faith. In any event, Trustee
shall be indemnified and forever held harmless by Beneficiary from
all loss or damage of any kind which Trustee may incur in acting as
Trustee hereunder, except for such loss or damage as may result from
the gross negligence, willful misconduct or bad faith of
Trustee.
5.19 Effective Date. The effective date of this Deed of Trust
shall be the date on the first page hereof notwithstanding that
this Deed of Trust may have been executed on a date prior to such
date.
5.20 Right to Contest. Grantor shall have the right to
contest in good faith the validity or amount of any tax assessment
or lien arising from any work performed at or materials furnished
to the premises which right, however, is conditional upon (i) such
contest having the effect of preventing the collection of the tax,
assessment or lien so contested and the sale or forfeiture of the
premises or any part thereof or interest therein to satisfy the
same, (ii) Grantor giving Beneficiary written notice of its
intention to contest the same in a timely manner, which, with
respect to any contested tax or assessment, shall mean before any
such tax, assessment or lien has been increased by any penalties or
costs, and with respect to any contested mechanic"s lien
claim, shall mean within thirty (30) days after Grantor receives actual
notice of the filing thereof, (iii) Grantor making and thereafter
maintaining with Beneficiary or such other depositary as
Beneficiary may designate, a deposit of cash (or United States
government securities, in discount form, or other security as may,
in Beneficiary"s sole discretion, be acceptable to Beneficiary, and
in either case having a present value equal to the amount herein
specified) in an amount no less than One Hundred Fifty Percent
(150%) of the amount which, in Beneficiary"s reasonable opinion,
determined from time to time, shall be sufficient to pay in full
such contested tax, assessment or lien and penalties, costs and
interest that may become due thereon in the event of a final
determination thereof adverse to Grantor or in the event Grantor
fails to prosecute such contest as herein required, or in lieu
thereof, Grantor providing to Beneficiary title insurance over such
matters in form and substance reasonably acceptable to Beneficiary,
and (iv) Grantor diligently prosecuting such contest by appropriate
legal proceedings. In the event Grantor shall fail to prosecute
such contest with reasonable diligence or shall fail to maintain
sufficient funds, or other security as aforesaid, on deposit as
hereinabove provided, Beneficiary may, at its option, liquidate the
securities deposited with Beneficiary, and apply the proceeds
thereof and other monies deposited with Beneficiary in payment of,
or on account of, such taxes, assessments, or liens or any portion
thereof then unpaid, including the payment of all penalties and
interest thereon.
IN WITNESS WHEREOF, Grantor has executed this Indemnity
Deed of Trust and Security Agreement as of the date first aforesaid.
WITNESS: HENDERSON"S WHARF BALTIMORE L.P.,
a Delaware limited partnership
By: HISTORIC PRESERVATION PROPERTIES 1990
L.P. TAX CREDIT FUND, general partner
By: BOSTON HISTORIC PARTNERS II LIMITED
PARTNERSHIP, its sole general
By: BHP II ADVISORS LIMITED
PARTNERSHIP, its sole general
partner
By: PORTFOLIO ADVISORY
SERVICES, INC.
By: Terrence P.Sullivan
President
and
By: Terrence P. Sullivan,
General Partner
and
By: HENDERSON"S WHARF DEVELOPMENT CORP.,
general partner
By: Terrence P. Sullivan
President
)
) ss:
)
On this the _____ day of February, 1996, before me
____________________, the undersigned officer, personally appeared
Terrence P. Sullivan, who acknowledged himself to be a general
partner of BHP II Advisors Limited Partnership, the general partner
of Boston Historic Partners II Limited Partnership, the general
partner of Henderson"s Wharf Baltimore L.P., and executed the
forgoing Indemnity Deed of Trust and Security Agreement on behalf
of Henderson"s Wharf Baltimore L.P. for the purposes therein contained.
IN WITNESS WHEREOF, I have hereunto set my hand and
official seal.
______________________________
Notary Public
[SEAL]
My commission expires:
)
) ss:
)
After recordation, this instrument
should be returned to:
Kenneth E. Podell, Esq.
Aid Association for Lutherans
4321 North Ballard Road
Appleton, WI 54919
ASSIGNMENT OF RENTS AND LEASES
THIS ASSIGNMENT OF RENTS AND LEASES (hereinafter
referred to as this "Assignment") made and effective as of the 27th
day of February, 1996, by HENDERSON'S WHARF BALTIMORE L.P., a
Delaware limited partnership, with an address at c/o Claremont
Management Corp., Batterymarch Park II, Quincy, Massachusetts 02169,
(hereinafter referred to as "Assignor") to AID ASSOCIATION
FOR LUTHERANS, a Wisconsin corporation, with an address at 4321
North Ballard Road, Appleton, Wisconsin 54919 (hereinafter
referred to as "Assignee");
W I T N E S S E T H :
WHEREAS, concurrently with the delivery hereof,
Assignee has loaned and advanced to or on behalf of HISTORIC PRESERVATION
PROPERTIES 199O L.P. TAX CREDIT FUND, a Delaware limited
partnership ("Borrower") the sum of $6,000,000, and Borrower
has made and delivered to Assignee a Deed of Trust Note
(hereinafter referred to as the "Note") in the principal amount of
$6,000,000; and
WHEREAS, Assignor is the owner of certain real property
(the "Property") located in Baltimore City, Maryland, and more
particularly described in Exhibit A, which is attached
hereto and hereby incorporated herein; and
WHEREAS, the Note is guaranteed by, among other things,
a certain Guaranty (the "Guaranty") of even date from Assignor
for the benefit of Assignee; and
WHEREAS, as security for the Guaranty, Assignor has,
concurrently with the execution and delivery hereof,
executed and delivered to Assignee an Indemnity Deed of Trust and
Security Agreement (hereinafter referred to as the "Deed of Trust"),
of even date herewith, encumbering the Property (this Assignment,
the Deed of Trust, the Guaranty and all other documents and
agreements heretofore, herewith, or hereafter given as security for the
Note and the loan or loans represented thereby being hereinafter
referred to collectively as the "Loan Documents" and
sometimes singularly as a "Loan Document"); and
WHEREAS, as further security for the Note and the
Guaranty, Assignor and Assignee desire that Assignor assign to
Assignee all of the right, title, and interest of Assignor in, to, and
under any and all leases and agreements for the use or occupancy of
the Property, or any part thereof, whether now or hereafter
existing, and Assignor desires and intends by this instrument to
assign to Assignee all of the right, title, and interest of Assignor
in, to, and under any and all such leases and agreements; and
WHEREAS, all acts and proceedings required by law and
by the partnership agreement of Assignor necessary to make the
Guaranty, the Deed of Trust, this Assignment, and the other Loan
Documents to which Assignor is a party the valid, binding, and legal
obligations of Assignor and all acts and proceedings required by law and
by the partnership agreement of Assignor to constitute this
Assignment a valid, binding, and legal encumbrance upon the Property,
subject only to the lien of the Deed of Trust and the permitted
exceptions as defined in the Deed of Trust, have been done and taken,
and the execution and delivery by Borrower of the Note and by
Assignor of the Deed of Trust, the Guaranty, this Assignment, and the
other Loan Documents have been in all respects duly authorized;
NOW, THEREFORE, in consideration of the premises, one
dollar in hand paid, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged,
and in order to secure the payment of the principal, interest, and
premium, if any, under the Guaranty and the Note and to
secure the performance by Assignor of each and every term, covenant,
agreement, and condition contained herein, in the Guaranty,
in the Deed of Trust, and in the other Loan Documents, Assignor,
being legally advised in the premises and intending to be legally
bound hereby, does hereby covenant, promise, and agree as follows,
to- wit:
ARTICLE I
ASSIGNMENT; SECURITY
1.1. Assignment. Assignor does hereby sell, assign,
transfer, and set over unto Assignee, its successors and
assigns, all of the right, title, and interest of Assignor in, to,
and under the leases and agreements, for the use or occupancy of the
whole or any part of the Property, whether such leases and agreements
are now or at any time hereafter existing (all such leases and
agreEments for the use or occupancy of the whole or any part
of the Property being hereinafter referred to collectively as the
"Leases" and sometimes singularly as a "Lease"), including all
amendments of, supplements to, and renewals and extensions of the
Leases at any time made; together with all rents, earnings, income,
issues and profits arising from the Property or from the Leases and
all other sums due or to become due under and pursuant thereto;
together with any and all guarantees of or under any of the
Leases; together with all proceeds payable under any policy of
insurance covering loss of rents under any Lease for any cause;
together with all proceeds of and rights of Assignor in connection with
any condemnation proceeding, exercise of the right of eminent
domain, sale in lieu of condemnation or eminent domain, or
alteration of the grade of any street affecting the Property or any part
thereof; together with all tax refunds, rebates, and returns relating
to the Property or any part thereof; together with all rights,
powers, privileges, options, and other benefits of Assignor, as
lessor under the Leases, including, but not by way of limitation,
(a) the immediate and continuing right to receive and collect all
Rents (as hereinafter defined), (b) the right to accept or reject any
offer made by the tenant pursuant to its Lease to purchase the
Property, or any part thereof, and/or any other property subject to
the Lease as therein provided and to perform all other necessary or
appropriate acts with respect to such purchases as agent and
attorney-in-fact for Assignor, and (c) the right to make all
waivers, agreements, and settlements, to give and receive
all notices, consents, and releases, to take such action upon
the happening of a default under any Lease, including the
commencement, conduct, and consummation of proceedings at law or in equity
as shall be permitted under any provision of any Lease or by
law, and to do any and all other things, whatsoever, which Assignor
is or may become entitled to do under the Leases; and together
with all other rights, powers, privileges, options, and benefits of
Assignor in connection with the Property, including, but not by way
of limitation, the right to use and possession of the Property,
and all parts thereof, and all personal property located on or
used or usable in connection therewith, all parking lot fees, liquor
licenses, building permits, zoning variances, plans,
specifications, and contracts with architects, contractors,
and subcontractors; SUBJECT, however, to the right and license
hereinafter granted by Assignee to Assignor.
For purposes herein the definition of "Rents" or
"Rent" as used in this Assignment shall mean: all of the rents,
revenues, income, profits and other benefits arising from the use and
enjoyment of all or any portion of the Property, including,
but not limited to, (i) all rents, income and profits due or to
become due under the Leases, or any of them; (ii) all security
deposits, advance rentals, and similar payments to Assignor under the
Leases, or any of them; (iii) any payments in lieu of rent made by
any lessee under a Lease; (iv) all sums to which Assignor may
become entitled in any court proceeding involving any lessee under
a Lease in any bankruptcy, insolvency, or reorganization proceedings
in any state or federal court; (v) any payments to Assignor under
any guaranty or surety agreement with respect to the obligations
of any lessee under a Lease; and (vi) any condemnation award,
administrative rents, use and occupancy payments, damages,
moneys, and security payable to or receivable by Assignor under or
with respect to any Lease.
1.2. Security. This Assignment shall remain in full
force and effect until, (i) the payment in full of all principal,
interest, and premium, if any, on the Note and (ii) the full
and complete performance and observance by Assignor of all of
the terms, covenants, and conditions to be performed or observed
by Assignor under the Guaranty, this Assignment, the Deed of
Trust, And the other Loan Documents.
ARTICLE II
REPRESENTATIONS; COVENANTS; WAIVERS
2.1. Representations and Warranties. Assignor hereby
represents and warrants to Assignee that the Leases
described in the Borrower's and Guarantor's Affidavit and Solvency
Certificate dated as of even date herewith and delivered to Assignee are
each and all in full force and effect, without amendment or
modification, oral or written, except as described in said
Affidavit; that no default exists under any such Lease and
no condition exists thereunder which, with the giving of notice
or the passing of time, or both, would constitute such a default;
that true and correct copies of all such Leases and amendments
thereof have been delivered to Assignee; that such Leases constitute
all of the Leases relating to the use or occupancy of the Property,
or any part thereof, as of the date hereof; that Assignor has good
right and authority to make this Assignment; that Assignor has not
heretofore alienated, assigned, pledged, or otherwise
disposed of or encumbered any Leases, or any of the sums due or to
become due thereunder; that Assignor has not performed any acts or
executed any other instruments which might prevent Assignee from
operating under any of the terms and conditions of this Assignment or
which would limit Assignee in such operation; that all
improvements and leased space demised and let pursuant to each Lease has been
completed to the satisfaction of all of the tenants thereof;
that all tenants have accepted possession of such leased space
and are open for business; and that Assignor has not accepted or
collected Rent or any other payments under any Lease for any period
subsequent to the current period for which such Rent or
other payment has already become due and payable.
2.2. Affirmative Covenants. Assignor hereby covenants
and agrees that it will:
(a) upon default hold in trust in a trust account
for the benefit of Assignee all Rents not applied towards
necessary operating expenses or repairs of the Property
or not immediately paid to Assignee;
(b) observe, perform, and discharge, duly and
punctually, all and singular, the obligations, terms,
covenants, conditions, and warranties of the Guaranty,
THis Assignment, the Deed of Trust, the other Loan
Documents, and any and all Leases on the part of Assignor to be kept,
observed, and performed;
(c) enforce the performance of each and every
obligation, term, covenant, condition, and agreement in each
Lease by any tenant to be performed, and, at the request of
Assignee, enforce all remedies available to Assignor against
any tenant under or guarantor of a Lease in case of a default
thereunder;
(d) appear in and defend any action or proceeding
arising under, occurring out of, or in any manner connected
with any Lease or the obligations, duties, or liabilities of
Assignor or any tenant thereunder, and, upon request by
Assignee, to do so in the name and on behalf of Assignee, but
at the expense of Assignor;
(e) upon request of Assignee, deliver to Assignee,
forthwith upon the execution of each and every Lease and
amendment thereof, now or at any time hereafter affecting the
Property, or any portion thereof, a specific assignment of
such new or amended Lease, affirming that such Lease is
subject to all of the terms, covenants, and conditions hereof;
(f) deliver to Assignee, annually with Assignor's
financial statements as described in the Deed of Trust,a
complete list of each and every Lease, showing unit number,
type, name and address of tenant, monthly rental, date to
which Rent is paid, term of Lease, date of occupancy, date of
expiration, security deposit, and each and every special
provision, concession, or inducement granted to the tenant
thereunder;
(g) deliver to Assignee, at the request of Assignee any
time after an Event of Default (as hereinafter defined), all
security deposits under all Leases, which funds shall be held
by Assignee, without interest payable to Assignor, as part of
and commingled with the general funds of Assignee, but which
funds shall, however, be repayable to the subject tenants,
pursuant to the terms and provisions of the Leases under which
such security deposits were made;
(h) give immediate notice to Assignee of any notice of
default, on the part of Assignor, under any Lease, and any
notice of cancellation of any Lease, which is received by
Assignor from or on behalf of any tenant under a Lease,and
furnish Assignee with a copy of each such notice; and
(i) at the request of Assignee, execute and deliver to
Assignee such further instruments and do and perform such
other acts and things as Assignee may deem necessary or
appropriate, from time to time, to make effective this
Assignment and the various covenants of Assignor herein
contained and to more effectively vest in and secure to
Assignee the sums due or hereafter to become due under the
Leases, including, without limitation, the execution of such
additional assignments as shall be deemed necessary by
Assignee to effectively vest in and secure to Assignee all
Rents, income, and profits from and under any and all Leases.
2.3. Negative Covenants. Assignor hereby covenants and
agrees that it will not, without in each instance obtaining
the prior written consent of Assignee:
(a) enter into any Lease on terms and conditions which
have not been approved in advance by Assignee and which do not
include an agreement on the part of each tenant under such
Lease: to recognize and agree to be bound by all of the
terms, covenants, and conditions of this Assignment; to
recognize all claims made by Assignee under or in connection
with such Lease and/or this Assignment; and that no statute of
limitations shall begin to run with respect to the enforcement
of any breach of or failure to timely and fully perform an
obligation of such tenant under such Lease until Assignee has
received written notice of such breach or failure;
(b) change, amend, alter, or modify any Lease or any of
the terms or provisions thereof, or grant any concession in
connection therewith, either orally or in writing;
(c) change, amend, alter, or modify any guaranty of any
Lease, or any of the terms or provisions of such a guaranty,
cancel or terminate any such guaranty, or grant any concession
in connection with any such guaranty;
(d) exercise any right of election, whether specifically
set forth in a Lease or otherwise, which would in any way
diminish the liability of a tenant under a Lease or have the
effect of shortening the stated term of a Lease;
(e) suffer or permit to occur any release of liability
of any tenant under or any guarantor of a Lease or the
withholding of Rent or of any other payment under a Lease;
(f) consent to the release or reduction of any
obligation of a tenant under or guarantor of any Lease;
(g) reduce or discount the Rent or any other payments
under any Lease;
(h) accept payment of any installment of Rent or any
other payment under any Lease in advance of the due date
thereof;
(i) cancel any Lease or accept a surrender thereof;
(j) consent to an assignment of the interest of any
tenant under any Lease or to a subletting thereof;
(k) assign, pledge, encumber, or otherwise transfer any
Lease or any right or interest of Assignor thereunder or in
any Rent or other payment thereunder;
(l) request, consent to, agree to, or accept a
subordination of any Lease to any mortgage or other
encumbrance now or hereafter affecting the Property; or
(m) incur any indebtedness for borrowed money or
otherwise to a tenant under or guarantor of any Lease, which
may, under any circumstances, be availed of as an offset
against Rent or other payments thereunder.
(n) Notwithstanding the provisions of any Lease,Assignor
shall not, without the prior written consent of Assignee,
relocate any tenant to any location other than the Property.
2.4. Indemnity by Assignor.
(a) Assignor hereby agrees to indemnify and hold
Assignee and its agents, servants, and employees harmless of,
from, and against any and all liability, loss, damage, cost,
and expense, which Assignee or its agents, servants, or
employees may or might incur under or by reason of this
Assignment and of, from, and against any and all claims and
demands, whatsoever, which may be asserted against Assignee or
its agents, servants, or employees by reason of any alleged
obligation or undertaking on the part of Assignee to perform
or discharge any of the terms, covenants, or agreements
contained herein or in the Leases. Should Assignee or any of
its agents, servants, or employees incur any such liability,
loss, or damage under or by reason of this Assignment, or in
defense against any such claims or demands, then the amount
thereof, including all costs, expenses, and actual attorneys'
fees (including, without limitation, the allocated costs for
services rendered by Assignee's in-house counsel) incurred in
connection therewith, together with interest thereon at the
rate of interest set forth in the Note for amounts past due,
shall be secured by this Assignment and by the Loan Documents;
Assignor shall reimburse Assignee therefor immediately upon
demand; and upon failure of Assignor so to do, Assignee may
declare all sums secured hereby, and the same shall thereupon
become, immediately due and payable.
(b) Nothing contained herein shall operate or be
construed to obligate Assignee to perform any of the terms,
covenants or conditions contained in any Lease, or to take any
measures, legal or otherwise, to enforce collection of any
Rents due under such Lease, or otherwise to impose any
obligation upon Assignee with respect to any of the Leases,
including, but not limited to, any obligation arising out of
any covenant of quiet enjoyment therein contained, in the
event that any lessee under a Lease shall have been joined as
a party defendant in any action to foreclose the Deed of Trust
in which the estate of such lessee shall have been thereby
terminated.
2.5. Waivers by Assignor. Assignor, for itself, its
successors and assigns, and each and every person with any
interest in the Property, or any part thereof, whether now owned or
hereafter acquired, hereby consents and agrees to any
extension of time, whether one or more, for the payment thereof and/or to
any and all renewals thereof; and hereby consents and agrees
that Assignee may amend the terms thereof, may release all or any
part of the security for the payment thereof, and may release any
party liable for the payment thereof, without, in any event,
affecting the terms or effect of this Assignment or the obligations or
liabilities hereunder of Assignor, its successors or
assigns, or any person with any interest in the Property, or any part
thereof, whether now owned or hereafter acquired.
ARTICLE III
DEFAULT; ACTIVATION
3.1. Events of Default. For purposes of this
Assignment, each of the following shall constitute an "Event of
Default":
(a) failure in the payment of principal or interest or
premium, if any, on the indebtedness evidenced by the Note in
the manner and at the times therein provided;
(b) failure in the payment taxes, assessments, and other
similar charges levied upon the Property before the same
become delinquent;
(c) failure in the payment of sums required by the terms
of the Note or any of the Loan Documents to be paid by
Assignor to the Assignee or to any third party for or on
account of the payment of taxes, assessments, and other
similar charges levied or expected to be levied against the
Property and for or on account of the payment of insurance
premiums, when said sums are due and payable;
(d) failure in the payment to Assignee of any insurance
proceeds or condemnation proceeds required by the terms of the
Note or any of the Loan Documents to be paid by Assignor to
Assignee when said sums are due and payable;
(e) failure to do any of the following, except to the
extent that the same are expressly excused or waived by the
terms of the Note or the Loan Documents:
(1) maintain the Property in good condition
and repair;
(2) repair, replace, restore, orrebuild any
part of the Property damaged or destroyed by any
casualty or as the result of any condemnation
proceeding, exercise of the power of eminent
domain, or alteration of the grade of any street;
(3) comply with all statutes, ordinances,
orders, rules, regulations, and requirements of all
governmental authorities relating to the Property
and with all covenants, agreements, and
restrictions relating to the Property or to the
use, occupancy, or maintenance thereof;
(4) observe and perform all covenants,
conditions, and agreements contained in any Lease
now or hereafter affecting the Property, or any
portion thereof, to be observed or performed on the
part of Assignor;
(5) pay all charges for utilities or services
relating to the Property and reimburse Assignee for
such charges as Assignee may pay;
(6) reimburse Assignee for all sums expended
by Assignee to sustain the lien of the Deed of
Trust or its priority, to protect any of the rights
of Assignee thereunder, or to recover any
indebtedness secured thereby;
(7) pay over to Assignee the amount of any
award or other payment for a taking in connection
with any condemnation proceeding, exercise of the
power of eminent domain, or alteration of the grade
of any street; or
(8) allow Assignee and agents of Assignee to
enter upon and inspect the Property and to inspect
and examine the books of record and account of
Assignor respecting the Property; and furnish
Assignee with any and all information Assignee may
request or demand regarding the Property.
(f) performance by Assignor of any of the following acts
or omissions, except to the extent that the same are expressly
permitted by the terms of the Note or the Loan Documents:
(1) commission or sufferance of commission of
any act of waste upon the Property;
(2) demolition, removal, or substantial
structural alteration of any of the buildings,
structures, or improvements on the Property;
(3) creation or sufferance of creation of any
charge, lien, or encumbrance upon the Property or
any part thereof;
(4) transfer or conveyance of the Property or
any legal or equitable interest of Assignor
therein;
(5) assignment of the Rents of the Property
or impairment in any other manner of the security
of Assignee hereunder, under the Deed of Trust, or
under any other Loan Document;
(6) acceptance of prepayments of Rent or
other payments under any Lease more than one (1)
month in advance; or
(7) modification, release, or renewal of any
Lease of the Property, or any part thereof, which
diminishes the obligations of the tenant thereunder
or which settles any claim with respect thereto;
It being the intention hereof that the performance of any act or
omission contained in this subparagraph (f) shall constitute an
Event of Default immediately upon its performance;
(g) failure to perform any other term, condition,or
covenant of the Note, Guaranty, this Assignment, or any of the
other Loan Documents;
(h) institution or filing by or against Assignor of
bankruptcy, receivership, insolvency, arrangement, or
reorganization proceedings;
(i) the entering of any judgment or the institution or
filing of any action or proceeding against Assignor by any
person, provided such judgment, action, or proceeding affects
the Property or is to foreclose any lien thereon; or
(j) any warranty or representation of Assignor contained
herein or otherwise made or given by Assignor to Assignee in
writing shall be false, misleading, or materially inaccurate.
3.2. Declaration of Activation. Upon or at any time after
the occurrence of an Event of Default, Assignee, without in any way
waiving any default, may, at its option, execute and deliver, by
depositing in the United States Mail, postage prepaid, certified
mail, addressed to Assignor at the address noted in Section
5.7 of this Assignment, a Declaration of Activation of Assignment
of Rents (hereinafter referred to as a "Declaration of Activation"),
declaring that, by reason of the occurrence of an Event of
Default, Assignee terminates the license granted to Assignor pursuant
to Section 4.5 hereof and thereafter shall exercise its rights
under this Assignment and declares that constructive possession of
the Property is vested in Assignee and that all of the legal and
equitable interest in the Rents of the Property is vested in
Assignee. Said Declaration of Activation shall not be deemed
ineffective or deficient by reason of the fact that it may contain
any matter or matters in addition to the foregoing or by reason of
the fact that no specific Event of Default is set forth therein.
Said Declaration of Activation shall be in effect immediately upon
its deposit in the United States Mail.
3.3. Event of Activation. For purposes of this Assignment,
each of the following shall constitute an "Event of Activation":
(a) the deposit in the United States Mail, postage
prepaid, certified mail, of a Declaration of Activation,
addressed to Assignor at the address noted in Section 5.7 of
this Assignment; or
(b) the taking of possession of the Property by
Assignee; or
(c) the appointment of a receiver for the Property; or
(d) the commencement of an action to foreclose the Deed
of Trust.
ARTICLE IV
RIGHTS OF ASSIGNEE
4.1. Powers of Assignee. At any time after the occurrence of
an Event of Activation, Assignee, without in any way waiving any
default, shall, at its option, have the complete right,
power, and authority:
(a) to terminate the right and license granted to
Assignor hereunder and thereafter, without taking possession,
demand, collect, receive, and sue for the Rents and other sums
payable under the Leases; and
(b) without regard to the adequacy of the security, with
or without process of law, personally, by agent, by attorney,
by Assignee under the Deed of Trust, or by a receiver to be
appointed by court, to enter upon, take, and maintain
possession of and operate the Property, or any part thereof,
together with all documents, books, records, papers, and
accounts relating thereto; exclude Assignor, its agents and
servants, therefrom; and hold, operate, manage, and control
the Property, or any part or parts thereof, as fully and to
the same extent as Assignor could do if in possession,and, in
such event, without limitation and at the expense of Assignor,
from time to time:
(1) rent or lease the whole or any part or
parts of the Property for such term or terms and on
such conditions as may seem proper to Assignee,
including leases for terms expiring beyond the
maturity of the indebtedness secured by the Loan
Documents, and cancel any lease or sublease for any
cause or on any ground which would entitle Assignor
to cancel the same;
(2) demand, collect, and receive from the
tenant or tenants now or hereafter in possession of
the Property, or any part thereof, or from other
persons liable therefor, all of the Rents and other
revenues from such tenant or tenants or other
persons which may now be due and unpaid and which
may hereafter become due;
(3) institute and prosecute any and all suits
for the collection of Rents and all other revenues
from the Property which may now be due and unpaid
and which may hereafter become due; institute and
carry on all legal proceedings necessary for the
protection of the Property, including such
proceedings as may be necessary to recover the
possession of the whole or of any part thereof;
institute and prosecute summary proceedings for
the removal of any tenant or tenants or other
persons from the Property; and pay the costs and
expenses of all such suits and proceedings out of
the Rents and other revenues received;
(4) maintain the Property and keep the same
in repair, and pay, out of the Rents and other
revenues received, the costs of said maintenance
and repairs, including the costs and expenses of
all services of all employees, including their
equipment, and of all operating expenses and
expenses of maintaining and keeping the Property in
repair and in proper condition;
(5) employ an agent or agents to rent and
manage the Property and to collect the Rents and
other revenues thereof and pay the reasonable value
of its or their services out of the Rents and other
revenues received;
(6) effect and maintain general liability
insurance, fire insurance, boiler insurance, plate
glass insurance, rent insurance, worker's
compensation insurance, and generally such other
insurance as is customarily effected by an owner of
real property of a style and kind similar to the
Property, or as Assignee may deem advisable or
necessary to effect, and pay the premiums and other
charges therefor out of the Rents and other
revenues received;
(7) pay, out of the Rents and other revenues
received, all sums, and the interest thereon, now
due to Assignee under the Note, the Guaranty, the
Deed of Trust, and the other Loan Documents, and
hereafter to become so due, and all taxes,
assessments, and other charges now due and unpaid
and which may hereafter become due and a charge or
lien upon the Property;
(8) execute and comply with all applicable
laws, rules, orders, ordinances, and requirements
of any and all governmental authorities affecting
the Property and with all covenants, agreements,
and restrictions relating to the Property or to the
use, occupancy, or maintenance thereof, and pay the
costs thereof out of the Rents and other revenues
received;
(9) act exclusively and solely in the place
and stead of Assignor and to have all of the powers
of Assignor for the purposes aforesaid; and
(10) from time to time determine to which one
or more of the aforesaid purposes the Rents and
other revenues shall be applied and the amount to
be applied thereto.
4.2. Application of Rents. After payment of all proper
charges and expenses, including the just and reasonable
ompensation for the services of Assignee, its attorneys,
agents,clerks, servants, and others employed by Assignee in
connection with the operation, management, and control of the Property
and the conduct of the business thereof, and such further sums as
may be sufficient to indemnify Assignee from and against any
liability, loss, damage, cost, and expense on account of any matter or
thing done in good faith in pursuance of the rights and powers of
Assignee hereunder, Assignee may, at its option, retain and
apply the net amount of Rents arising from the Property, in whole
or in part, to any and all amounts due or owing to Assignee from
Assignor under the terms and provisions of the Guaranty, this
Assignment, the Loan Documents, or any other agreement now or at any
time hereafter existing between Assignor and Assignee. The
manner of the application of such net amount of Rents and the
obligations to which the same shall be applied shall be within the sole
discretion of Assignee. The balance of such net amount of Rents shall
be released to or upon the order of Assignor.
4.3. Attorney-in-Fact. Assignor hereby irrevocably appoints
Assignee as its true and lawful attorney-in-fact, coupled with an
interest, hereby grants and gives Assignee the full power and
authority as principal for all purposes set forth herein, together
with full power and authority to appoint a substitute or substitutes
to perform any of the same and the right to revoke any
such appointment at pleasure, and hereby ratifies and
confirms whatsoever Assignee, as such attorney-in-fact, and its
substitutes shall do by virtue of this appointment and grant of
authority.
4.4. Direction to Tenants. Assignor hereby consents to and
irrevocably authorizes and directs the tenants under the Leases and
any successors to the interest of said tenants, upon demand and
notice from Assignee of the right of Assignee to receive the Rent
and other amounts payable under such Leases, to pay to Assignee the
Rents and other amounts due or to become due under the Leases, and
said tenants shall have the right to rely upon such demand and
notice from Assignee and shall pay such Rents and other amounts to
Assignee without any obligation or right to determine the actual
existence of the right of Assignee to receive such Rents and other
amounts, notwithstanding any notice from or claim of Assignor to
the contrary, and Assignor shall have no right or claim against
said tenants for any such Rents and other amounts so paid by said
tenants to Assignee. Assignor hereby agrees that, at the request
of Assignee, Assignor will furnish each tenant under any Lease with
a true and complete copy of this Assignment. If the Property or
any part thereof is now or at any time hereafter used or occupied
by Assignor as a homestead or otherwise, then Assignor shall pay to
Assignee, upon written demand by Assignee, such sum per month as,
in the opinion of Assignee, is reasonable rent for the Property so
used or occupied, to be applied by Assignee as herein provided,
and, upon demand by Assignee, Assignor shall vacate the Property to
Assignee.
4.5. License to Assignor. Notwithstanding the foregoing
provisions making and establishing a present and absolute transfer
and assignment of the Leases and the Rents arising therefrom, so
long as no Event of Activation shall have occurred, Assignor shall
have the right and license to occupy the Property as landlord or
otherwise, to collect, use, and enjoy the Rents payable under and
by virtue of any Lease, but only as the same become due under the
provisions of such Lease, and to enforce the covenants of each
Lease. Upon the occurrence of any Event of Activation, such right
and license of the Assignor shall immediately terminate and become
void and of no effect; and such right and license shall not at any
time thereafter be, or be deemed to be, reinstated except with the
express written consent of Assignee specifically reinstating such
right and license.
Notwithstanding the foregoing, Assignor acknowledges that it
is the intention of the parties hereto that this Assignment fully
and presently perfects the interest of Assignee in all leases,
Rents and profits arising from the Property without the necessity
of an Event of Activation. Assignor shall have no right to grant
any other assignment of any Rents or other benefits of the Property
subject to this Assignment without the express prior written
consent of Assignee; the existence of such right and license shall
not at any time operate to subordinate this Assignment to any
subsequent assignment by Assignor, in whole or in part; and any
such subsequent assignment by Assignor shall be subject in all
respects to the rights of Assignee hereunder and under the Deed of
Trust and other Loan Documents.
4.6. Rights Optional. Assignee shall not be obligated to
perform or discharge any obligation, duty, or liability of
Assignor, nor shall Assignee be responsible for its failure to
exercise or enforce any rights granted to it under this Assignment.
Any failure or omission by Assignee to enforce this Assignment for
any period of time shall not impair the force or effect hereof or
prejudice the rights of Assignee, and Assignee shall not be
required under this Assignment to exercise or enforce any of the
rights herein granted to it, it being understood that all matters
contained herein are strictly within the discretion of Assignee.
4.7. Rights Cumulative. No right or remedy herein conferred
upon or otherwise available to Assignee is intended to be or shall
be construed to be exclusive of any other right or remedy, but each
and every one of the rights and remedies of Assignee hereunder are
cumulative and not in lieu of, but in addition to, any rights or
remedies which Assignee may have under the Note, the Loan
Documents, at law, or in equity, any and all of which such
rights and remedies may be exercised by Assignee prior to,
simultaneously with, or subsequent to any action taken hereunder.
Any and all rights and remedies of Assignee may be exercised from time
to time and as often as Assignee deems such exercise to be
expedient, and the delay or failure of Assignee to avail itself of any of
the terms, provisions, and conditions of this Assignment for any
period of time, at any time or times, shall not be construed or
deemed to be or constitute a waiver or impairment thereof. No delay or
omission to exercise any right or power accruing upon any default
or Event of Default shall impair any such right or power or shall
be construed to be a waiver of any such default or Event of Default
or an acquiescence therein; nor shall the giving, taking, or
enforcement of any other or additional security, collateral, or
guaranty for the payment of the indebtedness secured under this
Assignment operate to prejudice, waive, or affect the security of
this Assignment or any rights, powers, or remedies hereunder; nor
shall Assignee be required to first look to, enforce, or exhaust,
any such other or additional security, collateral, or guaranty.
Assignor hereby further agrees that (a) none of the rights or
remedies of Assignee available under the Deed of Trust or any other
Loan Document or otherwise shall be delayed or in any way
prejudiced by this Assignment; (b) notwithstanding any variation or
modification, at any time, of the terms of the Note, the Deed of
Trust, and/or any other Loan Document or any extension of time for
payment thereunder or under the Note or the Guaranty, or any
release of part or parts of the security conveyed under any of the
Loan Documents, the Leases and all of the benefits assigned
hereunder shall continue as additional security in accordance with
the terms hereof; and (c) each and all of the Leases shall remain
in full force and effect, irrespective of any merger of the
interest of a lessor and tenant thereunder.
4.8. Rights Throughout Redemption. The right of
Assignee to collect and receive the Rents and other revenues assigned
hereunder, to take possession of the Property, and/or to
exercise any of the rights or powers herein granted to Assignee
shall, to the extent not prohibited by applicable law, also extend to
the period from and after the filing of any suit to foreclose the lien
of the Deed of Trust, including any period allowed by law for the
redemption of the Property, whether before or after any foreclosure sale.
4.9. No Waiver. Assignor hereby agrees that the collection
of Rents and the application as aforesaid, the entry upon and
taking of possession of the Property, or any part thereof, or the
exercise of any other right or remedy by Assignee shall not cure or
waive any Event of Default hereunder; waive, modify, or affect any
Declaration of Activation or other notice given hereunder; cure or
waive any default; waive, modify, or affect any notice of default
under the Note, the Guaranty or the Deed of Trust; affect or impair
any other right or remedy of Assignee; or invalidate any act done
pursuant to any such Declaration of Activation or other notice.
The enforcement of any right or remedy by Assignee, onceexercised,
shall continue for so long as Assignee shall elect, and if Assignee
shall thereafter elect to discontinue the exercise of any such
right or remedy, then the same or any other right or remedy
hereunder or otherwise available may be reasserted at anyt ime and
from time to time upon any subsequent or continuing default
.
4.10. Indulgences by Assignee. In the event that
Assignee (a) grants any extension of time or forbearance with
respect to the payment of any indebtedness secured by this
Assignment; (b) takes other or additional security for the payment
thereof; (c) waives or fails to exercise any right granted herein
or under the Note or any Loan Document; (d) grants any release,
with or without consideration, of the whole or any part of the
security held for the payment of the debts secured hereby or the
release of any person liable for payment of such debts; (e) amends
or modifies, in any respect, any of the terms and provisions hereof
or of the Note (including substitution of another Note) or any of
the Loan Documents; then and in any such event, such act or
omission to act shall not release Assignor or any co-makers,
sureties, or guarantors of this Assignment or of the Guaranty,
under any covenant of this Assignment or of the Guaranty, nor
preclude Assignee from exercising any right, power, or privilege
herein granted or intended to be granted in the event of any other
default or Event of Default then made or any subsequent default or
Event of Default, nor in any way impair or affect the lien or
priority of this Assignment or any other Loan Document.
ARTICLE V
MISCELLANEOUS PROVISIONS
5.1. Assignee Not a Mortgagee in Possession. The acceptance
by Assignee of this Assignment, with all of the rights, powers,
privileges, and authority so created, shall not, prior to actual
entry upon and taking possession of the Property by Assignee, (a)
be deemed or construed to constitute Assignee a mortgagee in
possession; (b) thereafter, at any time or in any event, impose any
obligation, whatsoever, upon Assignee to appear in or defend any
action or proceeding relating to the Leases or the Property; to
take any action hereunder; to expend any money or incur any
expenses; to perform or discharge any obligation, duty, or
liability under the Leases; or to assume any obligation or
responsibility for any security deposits or other deposits
delivered to Assignor by or on behalf of any tenant under any Lease
and not assigned and actually delivered to Assignee; or (c) render
Assignee liable in any way for any injury or damage to person or
property sustained by any person or persons, firm, or corporation
in or about the Property.
5.2. Successors of Assignor. In the event of the sale or
transfer of all or any part of the Property, by operation of law or
otherwise, and regardless of whether or not such sale or transfer
constitutes an Event of Default, Assignee is authorized and
empowered to deal with the transferee with reference to this
Assignment, the Property, or the debts secured hereby, or with
reference to any of the terms or conditions contained herein, as
fully and to the same extent as it might deal with Assignor and
without in any way releasing or discharging any liabilities of
Assignor hereunder or under the Guaranty or the Loan Documents.
5.3. Successors and Assigns. This Assignment shall be
assignable by Assignee, and all representations, warranties,
covenants, powers, and rights herein contained shall be binding
upon Assignee and Assignor, and their respective successors and
assigns, and shall inure to the benefit of Assignee, and its
successors and assigns, and Assignor, and, but only to the extent
permitted hereunder, its successors and assigns.
5.4. Lender/Borrower. The relationship between Assignee and
Assignor is and shall remain solely that of a lender and borrower,
and nothing contained herein, in the Loan Documents, or in any
other agreement shall in any manner be construed as making Assignee
and Assignor partners or joint venturers or as creating any
relationship between Assignee and Assignor other than that of
lender and borrower.
5.5. No Third-Party Beneficiaries. It is expressly intended,
understood, and agreed that (a) this Assignment and the Loan
Documents are made and entered into for the sole protection and
benefit of Assignor and Assignee and their respective successors
and assigns (but in the case of the assigns of Assignor, only to
the extent permitted hereunder), and no other person or persons
shall have any right of action hereon or rights to any loan funds
or other funds now or at any time hereafter secured or to be
secured hereby; (b) that such loan funds do not constitute a trust
fund for the benefit of any third party; (c) that no third party
shall under any circumstances be entitled to any equitable lien on
any undisbursed loan or other proceeds at any time; and (d) that
Assignee shall have a lien upon and the right to direct application
of any undisbursed loan funds as additional security for the
Guaranty, this Assignment, and the other Loan Documents.
5.6. Expenses of Assignee. If Assignee is made a party to
any suit or proceeding by reason of the interest of Assignee in the
Property, or if the Note, the Guaranty, this Assignment, or any
other Loan Document is placed in the hands of an attorney or
attorneys to defend or enforce any rights of Assignee, then
Assignor shall reimburse Assignee for all costs and expenses,
including actual attorneys' fees, incurred by Assignee in
connection therewith. All amounts incurred by Assignee hereunder
shall be secured hereby and shall be due and payable by Assignor to
Assignee forthwith on demand, with interest thereon at the rate at
which interest accrues on amounts due under the Note after the same
become due.
5.7. Notices. All notices, demands, or documents of any kind
which may be required or permitted to be served by either party
hereto upon or to the other shall be sufficiently served by
delivering the same personally or by depositing a copy of the same
in the United States Mail, postage prepaid, certified mail,
addressed to Assignor or Assignee, as the case may be, at its
address, as set forth above, or at such other address as either
Assignor or Assignee may from time to time designate by like notice
to the other. Any notice so mailed shall be deemed to have been
given on the date so mailed.
5.8. Applicable Law. This Assignment shall be interpreted in
accordance with and governed, in all respects, by the internal laws
of the State of Maryland.
5.9. Amendment. Neither this Assignment nor any term,
covenant, or condition hereof may be amended, modified, or
terminated, except by an agreement in writing, signed by the party
against whom enforcement of the amendment, modification, or
termination is sought.
5.10. Construction. The Note, the Guaranty, this Assignment,
and the other Loan Documents shall be construed without regard to
any presumption or rule requiring construction against the party
causing such instruments to be drafted. The headings and captions
contained in this Assignment are solely for convenience of
reference and shall not affect its interpretation. All terms and
words used in this Assignment, whether singular or plural and
regardless of the gender thereof, shall be deemed to include any
other number and any other gender as the context may require.
5.11. Severability. If any term, covenant, or condition of
the Note, the Guaranty, this Assignment, or any other Loan
Document, or the application thereof to any person or circumstance,
shall, to any extent, be invalid or unenforceable, then the
remainder of the Note, the Guaranty, this Assignment, or such Loan
Document, or the application of such term, covenant, or condition
to persons or circumstances other than those as to which it is held
invalid or unenforceable, shall not be affected thereby, and each
term, covenant, and condition of the Note, the Guaranty, this
Assignment, and the Loan Documents shall be valid and enforceable
to the fullest extent permitted by applicable law.
5.12. Counterparts. This Assignment may be executed,
acknowledged, and delivered in any number of counterparts, each of
which shall constitute an original, but, all together, only one
instrument.
5.13. Duration. This Assignment shall become null, void, and
of no further force or effect upon the payment in full of all
indebtedness under the Note, the Guaranty, this Assignment, and the
other Loan Documents and the full performance of all other obligations of
Assignor hereunder and thereunder. Upon recordation
of a release of the Deed of Trust, this Assignment shall terminate.
5.14. Receipt by Assignor. Assignor hereby acknowledges that
a full, true, and complete copy of this Assignment (including
Exhibit A hereto) was delivered to and received by Assignor on the
date of actual execution hereof by Assignor, as set forth below.
5.15. No Merger of Assigned Leases. As against Assignee, at
all times during which this Assignment shall be in effect, there
shall be no merger of the Leases or the leasehold estates created
thereby with the fee simple estate in the Property by reason of the
fact that the Leases or any interest therein may be held by or for
the account of any person, firm or corporation which may be or
become the owner of said fee estate, unless Assignee shall consent
in writing to said merger.
5.16. Effective Date. The effective date of this Assignment
shall be the date on the first page hereof notwithstanding the fact
that this Assignment may have been executed on a date other than
such date.
IN WITNESS WHEREOF, Assignor has caused these presents to be
duly executed, sealed, and delivered in Baltimore City, Maryland as
of the day and year first above written.
WITNESS: HENDERSON'S WHARF BALTIMORE L.P.,
a Delaware limited partnership
By: HISTORIC PRESERVATION PROPERTIES 1990
L.P. TAX CREDIT FUND, general partner
By: BOSTON HISTORIC PARTNERS II LIMITED
PARTNERSHIP, its sole general partner
By: BHP II ADVISORS LIMITED
PARTNERSHIP, its sole general partner
By: PORTFOLIO ADVISORY
SERVICES, INC.
By: Terrence P.Sullivan
President
and
By: Terrence P. Sullivan,
General Partner
and
By: HENDERSON'S WHARF DEVELOPMENT CORP.,
general partner
By: Terrence P. Sullivan
President
)
) ss:
)
On this the _____ day of February, 1996, before me
____________________, the undersigned officer, personally appeared
Terrence P. Sullivan, who acknowledged himself to be a general
partner of BHP II Advisors Limited Partnership, the general partner
of Boston Historic Partners II Limited Partnership, the general
partner of Henderson's Wharf Baltimore L.P., and executed the
forgoing Assignment of Rents and Leases on behalf of Henderson's
Wharf Baltimore L.P. for the purposes therein contained.
IN WITNESS WHEREOF, I have hereunto set my hand and
official seal.
______________________________
Notary Public
[SEAL]
My commission expires:
)
) ss:
)
On this the _____ day of February, 1996, before me
____________________, the undersigned officer, personally appeared
Terrence P. Sullivan, who acknowledged himself to be the President
of Portfolio Advisory Services II, Inc., a general partner of BHP
II Advisors Limited Partnership, the general partner of Boston
Historic Partners II Limited Partnership, the general partner of
Henderson's Wharf Baltimore L.P., and executed the forgoing
Assignment of Rents and Leases on behalf of Henderson's Wharf
Baltimore L.P. for the purposes therein contained.
IN WITNESS WHEREOF, I have hereunto set my hand and
official seal.
______________________________
Notary Public
[SEAL]
My commission expires:
)
) ss:
)
On this the _____ day of February, 1996, before me
____________________, the undersigned officer, personally appeared
Terrence P. Sullivan, who acknowledged himself to be the President
of Henderson's Wharf Development Corp., a general partner of
Henderson's Wharf Baltimore L.P., and executed the forgoing
Assignment of Rents and Leases on behalf of Henderson's Wharf
Baltimore L.P. for the purposes therein contained.
IN WITNESS WHEREOF, I have hereunto set my hand and
official seal.
______________________________
Notary Public
[SEAL]
My commission expires:
I hereby certify that I am a member of the Bar of the
Court of Appeals of Maryland and that the foregoing Assignment of
Rents and Leases was prepared under my supervision.
______________________________
Alan P. Vollmann
Exhibit A
(Legal description)
LEGAL DESCRIPTION
PARCEL A
ALL of those 275 Condominium Units in the Condominium Regime known
as The Residences and Inn at Henderson's Wharf assuch Condominium regime
is established by a Declaration dated August 30,1988 and recorded among
the Land Records of Baltimore City in Liber SEB 821, folio 20, said
Declaration having been amended by the following:
a. Amendment to Declaration dated April 3, 1989, by HWFP, INC.
and PAUL ADLER and ROBERT W. GRANIK,,Substitute Trustees, and recorded
among the Land Records of Baltimore City in Liber SEB 2061, folio 329.
b. Second Amendment to Declaration dated July 31, 1990, by
HENDERSON'S WHARF BALTIMORE, L.P. and recorded among the aforesaid
Land Records in Liber SEB 2563, folio 230, and
C. Third Amendment to Declaration dated December 14,1992, by
HENDERSON'S WHARF BALTIMORE, L.P. and THE COUNCIL of UNIT OWNERS OF
THE RESIDENCES AND INN AT HENDERSON'S WHARF, and recorded among
the aforesaid Land Records in Liber SEB 3578, folio 30;
and pursuant to the Plats entitled, "The Residences and
Inn at Henderson's Wharf, A Condominium" recorded among
the Land Records of Baltimore City as Condominium
Plat SEE No. 232, as amended by Amended Condominium Plat
recorded Among the Land Records of Baltimore City as
Plat SEB No. 298, the 275 Condominium Units which are part of
this Parcel A being listed on Scheule attached hereto.
Together with the undivided percentage interests appurtenant to
each unit, as set forth on Exhibit A, in the common elements, common
expenses and common profits of the aforesaid Condominium and all of the
rights, privileges and powers reserved for the benefit of each and every
unit owner under and pursuant to the aforesaid Declaration, as so
amended, and By-Laws attached thereto.
Together with the benefit of the following:
a. Amended and Restated Henderson's Wharf Disposition Agreement
dated October 10, 1984, by and between CARLEY CAPITAL GROUP and
MAYOR AND CITY COUNCIL OF BALTIMORE, and recorded among the
aforesaid Land Records in Liber SEB 335, folio 62, amended by First
Amendment to Amended and Restated Henderson's Wharf Disposition
Agreement recorded as aforesaid in Liber SEB 2563, folio 264.
CONTINUATION OF LEGAL DESCRIPTION
File No. 1951576
b. Reciprocal Easement Agreement dated August 31,1988, by and
between CARLEY CAPITAL GROUP and THE COUNCIL OF UNIT OWNERS OF THE
RESIDENCES AND INN AT HENDERSON'S WHARF, A CONDOMINIUM,
INCORPORATED, and recorded among the Land Records of Baltimore City
in Liber SEB 1824, folio 162 as amended by the following:
(i) Amendment to Reciprocal Easement Agreement dated July 31,
1990, and recorded as aforesaid in Liber SEB 2822, folio
447; and
(ii) Second Amendment to reciprocal Easement Agreement dated
Februry 27, 1996 and- recorded as aforesaid in Liber
SEB No.' folio -.
C. Pedestrian and Vehicular Right of Way Easement and Maintenance
Easement established by Declaration and Easement by and among
Henderson's Wharf Baltimore, L.P., et al, and The Council of
unit Owners of The Residences and inn at Henderson's Wharf
dated P-February 27, 1996 and recorded among the Land Records
of Baltimore City in Liber SEB No. , folio
Saving and Excepting therefrom, all waters, water rights, water
courses and riparian rights now or hereafter appertaining to the above
described land or any part thereof other than such riparian rights and
privileges as shall be reasonably necessary to use, maintain, and re-
construct the Promenade Deck, including the pedestrian promenade to be
constructed, maintained and replaced in accordance with the Pedestrian
Promenade Easement, Agreement dated October 19, 1984 by and between
CARLEY CAPITAL GROUP and MAYOR AND CITY COUNCIL OF BALTIMORE, and
recorded among the aforesaid Land Records in Liber SEB 335, folio 204,
as amended by the following:
(i) Amendment to Pedestrian Promenade Easement Agreement dated
April 6, 1987 and recorded as aforesaid In Liber SER 1308,
folio 589; and
(ii) Second Amendment to Pedestrian Promenade Easement Agreement
dated July 31, 1990 and recorded as aforesaid in Liber SER
2563, folio 241.
Unit 433 and Parking Unit P-43 -
ALL of those Condominium Units designated as Unit 433 and Parking
Unit P-43 in the Condominium Regime known as The Residences and Inn at
Henderson's Wharf as such condominium regime is established by a
Declaration dated August 30,1988 and recorded among the Land Records of
Baltimore City in Liber SEB 1821, folio 20, said Declaration having been
amended by the following;
a. Amendment to Declaration dated April 3, 1989, by HWFP, INC. and
PAUL ADLER and ROBERT W. GRANIK, Substitute Trustees, and recorded
among the Land Records of Baltimore City in Liber SEB 2081, folio
329.
CONTINUATION OF LEGAL DESCRIPTION
File No. 1951576
b. Second Amendment to Declaration dated July 31, 1990, by
HENDERSON'S WHARF BALTIMORE, L.P. and recorded among the aforesaid
Land Records in Liber SEE 2563, folio 230, and
C. Third Amendment to Declaration dated December 14,1992, by
liENDERSON'S WHARF BALTIMORE, L.P. and THE COUNCIL OF UNIT OWNERS OF
THE RESIDENCES @ INN AT HENDERSON'S WHARF, and recorded among the
aforesaid Land Records in Liber SEE 3578, folio 30;
and pursuant to the Plats entitled, "The Residences and Inn at
Henderson's Wharf, A Condominium" recorded among the Land Records of
Baltimore City as Condominium Plat SEE No. 232, as amended by Amended
Condominium Plat recorded among the Land Records of Baltimore City as
Plat SEB No. 298.
Unit 510 and Parking 'Unit P-60
ALL of those Condominium Units designated as Unit 510 and Parking
Unit P-68 in the Condominium Regime known as The Residences and Inn at
Henderson's) Wharf as .such condominium regime is established by a
Declaration dated August 30,1988 and recorded among the Land Records of
Baltimore City in Liber SEB 1821, folio 20, said Declaration having been
amended by the following:
a. Amendment to Declaration dated April 3, 1989, by and between
HWFP, INC. and PAUL ADLER and ROBERT W. GRANIK, Substitute
Trustees, and recorded among the Land Records of Baltimore City in
Liber SEB 2081, folio 329.
b. Second Amendment to Declaration dated July 31, 1990, by
HENDERSON'S WHARF BALTIMORE, L.P. and recorded among the aforesaid
Land Records in Liber SEB 2563, folio 230, and
UNIT 510 and-Parking Unit P-68 - continued
C. Third Amendment to Declaration dated December 14,1992, by
HENDERSON'S WHARF BALTIMORE, L.P. and THE COUNCIL OF UNIT OWNERS OF
THE RESIDENCES AND INN AT HENDERSONS WHARF, and recorded among the
aforesaid Land Records in Liber SEB 3578, folio 30;
and pursuant to the Plats entitled, "The Residences and Inn at
Henderson's Wharf, A Condominium recorded among the Land Records of
Baltimore City as Condominium Plat SEE No. 232, as amended by Amended
Condominium Plat recorded among the Land Records of Baltimore City as
Plat SEB No. 298.
CONTINUATION OF LEGAL DESCRIPTION
File No. 1951576
Unit 409 AND Parking unit P-57
ALL of those Condominium Units designated as Unit 409 and Parking
Unit P-57 in the Condominium Regime known as The Residences and Inn at
Henderson's Wharf as such condominium regime is established by a
Declaration dated August 30,1988 and recorded among the Land Records of
Baltimore City in Liber SEB 1821, folio 20, said Declaration having been
amended by the following:
a. Amendment to Declaration dated April 3, 1989, by HWFP, INC. and
PAUL ADLER and ROBERT W. GRANIK, Substitute Trustees, and recorded
among the Land Records of Baltimore City in Liber SEE 2081, folio
329.
b. Second Amendment to Declaration dated July 31, 1990, by
HENDERSON'S WHARF BALTIMORE, L.P. and recorded among the aforesaid
Land Records in Liber SEB 2563, folio 230, and
C. Third Amendment to Declaration dated December 14,1992, by
HENDERSON'S WHARF BALTIMORE, L.P. and THE COUNCIL OF UNIT OWNERS OF
THE RESIDENCES AND INN AT HENDERSON'S WHARF, and recorded among the
aforesaid Land Records in Liber SEB 3578, folio 30;
and pursuant to the Plats entitled, "The Residences and Inn at
Henderson's Wharf, A Condominium" recorded among the Land Records of
Baltimore City as Condominium Plat SEB No. 232, as amended by Amended
Condominium Plat recorded among the Land Records of Baltimore City as
Plat SEE No. 298.
EXHIBIT C
ESCROW AGREEMENT
THIS ESCROW AGREEMENT is made on this _____ day of
_________________, 19__, by and among COLVIN GREGG RYAN ("Ryan"),
HENDERSON'S WHARF BALTIMORE L.P., a Delaware limited partnership
("HWBLP"), and DOUGLAS G. WORRALL (the "Escrow Agent").
Background
Pursuant to an Agreement of
Purchase and Sale dated June 1, 1994 (the
"Agreement"), Ryan agreed to sell, and HWBLP
agreed to buy, Condominium Unit No. 510 in
THE RESIDENCES AND INN AT HENDERSON'S WHARF,
A CONDOMINIUM, together with all
appurtenances and advantages thereunto
pertaining, and Parking Unit No. 68 and an
undivided percentage interest in the common
elements, common expenses and common profits
in the condominium regime (collectively, the
"Property").
In accordance with the Agreement,
HWBLP is obligated to pay to Ryan an amount
equal to the difference between the appraised
value of the Property as of June 1, 1999 and
the purchase price paid for the Property on
February 27, 1996 (the "Difference").
The Agreement provides that the
payment of the Difference shall be secured by
collateral in the form of a letter of credit,
bond or cash in the amount of $25,000 (the
"Collateral"). The Agreement further
provides that the Collateral is to be held by
the Escrow Agent.
Agreements
NOW, THEREFORE, for and in consideration of the
premises and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties
agree as follows:
1. Deposit of Collateral. Simultaneously with the
execution of this Escrow Agreement, HWBLP shall deposit with the
Escrow Agent cash in the amount of Twenty Five Thousand Dollars
($25,000), which Collateral shall be held in escrow in accordance
with the terms of this Escrow Agreement in an interest-bearing
account with a federally-insured financial institution doing
business and having an office in the State of Maryland.
2. Release of Collateral. Within three (3) business
days after the issuance by the appraiser of the value of the
Property as of June 1, 1999, in accordance with section 2(a) of
the Agreement, the parties shall so notify the Escrow Agent who,
within five (5) business days after receipt of such notice, shall
deliver by hand or overnight receipted delivery a check in the
amount of the Difference (if greater than zero) to Ryan and a
check in the amount of the balance of the Collateral to HWBLP.
In the event that the Escrow Agent does not receive the
Instructions on or before December 27, 1999, or in the event
there is at any time a dispute between HWBLP and Ryan concerning
the disposition of the Collateral, the Escrow Agent shall file an
interpleader action in the Circuit Court for Baltimore City,
Maryland, and interplead HWBLP and Ryan, in which event the
Escrow Agent shall be relieved of any further obligations under
this Escrow Agreement.
3. Compensation and Expenses. The Escrow Agent shall
receive no compensation for his services performed under this
Escrow Agreement. The Escrow Agent shall not be reimbursed for
attorneys' fees or costs incurred as a result of any dispute
between HWBLP and Ryan or as a result of any interpleader;
provided, however, the Escrow Agent shall be reimbursed for
filing fees as a result of any such interpleader, in which event
such filing fees shall be reimbursed one-half by HWBLP and one-
half by Ryan.
4. Notices. All notices hereunder shall be in
writing and shall be (i) delivered via commercial messenger
delivery service with same day or overnight receipted delivery,
or (ii) mailed, registered or certified U.S. mail, return receipt
requested, first class postage prepaid, and shall be addressed as
follows:
If to HWBLP: Henderson's Wharf Baltimore L.P.
c/o Claremont Management
Corporation
Batterymarch Park II
Quincy, Massachusetts 02169
Attn: Mr. Terrence Sullivan
Telecopy No. (617) 472-3670
With a copy to: Richard Rubin, Esq.
Neuberger, Quinn, Gielen,
Rubin & Gibber, P.A.
Commerce Place
One South Street
27th Floor
Baltimore, Maryland 21202
Telecopy No. (410) 332-8594
If to Ryan: Mr. Colvin Gregg Ryan
Unit 510
1000 Fell Street
Baltimore, Maryland 21231
Telecopy No. (410) 752-0715
If to the Escrow Agent: Douglas G. Worrall, Esq.
Smith, Somerville & Case
100 Light Street
Baltimore, Maryland 21202
Telecopy No. (410) 385-8060
Notices that are delivered by commercial messenger shall be
deemed effective upon delivery to the commercial messenger.
Notices that are sent by registered or certified mail shall be
deemed delivered and effective the day the same is deposited in
the U.S. mails. Each party may change its address or telecopy
number by giving written notice as provided above. All notices
shall also be sent via telecopy to the number set forth above on
the same day as such notice is deposited with the messenger or in
the U.S. mails.
5. Binding Effect. This Escrow Agreement and all of
the provisions hereof shall be binding upon and shall inure to
the benefit of the parties hereto and their respective heirs,
devisees, legatees, personal representatives, successors and
assigns.
IN WITNESS WHEREOF, the parties hereto have caused this
Escrow Agreement to be duly executed under seal on the date first
above written.
WITNESS: HENDERSON'S WHARF BALTIMORE L.P.
By: Henderson's Wharf Development
Corporation, General Partner
___________________________________By:______________________(SEAL)
Name:_________________
Title:________________
WITNESS:
___________________________________By:____________________(SEAL)
COLVIN GREGG RYAN
WITNESS:
___________________________________By:_____________________(SEAL)
DOUGLAS G. WORRALL,
as Escrow Agent
Law Offices
NEUBERGER, QUINN, GIELEN, RUBIN & GIBBER, P.A.
27th floor
BALTIMORE. MARYLAND 21202-3201
(410) 332-8550
HOWARD S. SCHWARTZ (FAX NO,)
(410)332-8536 February 20, 1996 (410) 332-8594
VIA FACSIMILE
AND FIRST-CLASS MAIL
Douglas G. Worrall, Esquire
Smith, Somerville & Case
100 Light Street
Baltimore, Maryland 21202-1084
Re: Henderson's Wharf/Purchase of Condominium and
Parking Units Owned by Joseph & Eileen Mason
Dear Doug:
This letter will confirm our clients, agreement with
respect to the captioned transaction. My clients, Henderson's
Wharf Baltimore, L.P., Henderson's Wharf Marina, L.P., and the
Council of Unit owners of the Residences and Inn at Henderson's
Wharf (collectively, "buyer") , have agreed to make an
outright purchase of the condominium unit and parking unit
(collectively, "Unit") owned by your clients, Joseph and Eileen Mason
("Seller") , for the purchase price of approximately $92,000.
The purchase price is composed of the payoff amount of the
Seller's mortgage (currently approximately $87,000) plus a
premium of $5,000.00. Accordingly, it will not be necessary
to conduct an appraisal of the Unit as originally contemplated
by Seller and Buyer in the Agreement of Purchase and sale by and
between Seller and Buyer and dated June 1, 1994 (the "Agreement").
In order to complete this transaction, you will deliver
to me the Deed (in the Form of Exhibit D-1 attached to the
Agreement) that was fully executed by seller (Deed") , as well as
Buyer's $1,500.00 and interest thereto that have been held in an
escrow account and Seller's portion of the transfer and recordation
taxes that will come out of Seller's escrow account ("Funds"). I
will call you the day before settlement so that you may properly
date the Deed and cut a check for the Funds. Upon your delivery of
the Deed, Buyer's escrowed funds and the Funds, I will deliver to
you: (1) $5,000.00; (2) a Settlement Sheet showing the payoff of
the Seller's mortgage; and (3) written authorization to disburse
Seller's remaining escrowed funds.
Sincerely,
HOWARD S. SCHWARTZ
HSS/tms
CC: Mr. Terrence Sullivan
Mr. Charles Intravaia
Richard A. Monfred,Esquire
Law Offices
Neuberger, Quinn, Gielen, Rubin & Gibber, P. A
27TH FLOOR
COMMERCE PLACE
ONE SOUTH STREET
BALTIMORE,MARYLAND 21202-3201
(410)332-8550
FEBRUARY 20, 1996
HOWARD S. SCHWARTZ
FAX NO.
(410)332-8536
(410)332-8594
VIA FACSIMILE TRANSMISSION
AND FIRST-CLASS MAIL
William l. Balfour, Esquire
OBER, KALER, GRIMES & SHRIVER, P.C.
120 East Baltimore Street
Baltimore, Maryland 21202-1643
Re: Henderson's Wharf/Purchase of
Unit Owned by Anne Cook
Dear Bill:
This letter will confirm our clients' agreement with
respect to the captioned transaction. My Client,
Henderson's Wharf Baltimore, L.P. ("Buyer"), has agreed to
make an outright purchase of the condominium unit and
parking unit (collectively, "Unit") owned by your client,
Anne B. Cook ("seller"), for the purchase price of
approximately $92,000. The purchase price is composed of
the payoff amount of the Seller's mortgage (currently
approximately $87,000) plus a premium of $5,000.00.
Accordingly, it will not be necessary to conduct an
appraisal of the Unit as originally contemplated by Seller
and Buyer in the Agreement of Purchase and sale by and
between Seller and Buyer and dated October 24, 1994 (the
"Agreement"). Additionally, Buyer has agreed to pay all
transfer and recordation taxes in connection with this
transaction.
In order to complete this transaction, you will deliver
to me the Deed (in the Form of Exhibit D-1 attached to the
Agreement) that was fully executed by seller ("Deed"). I
will call you the day before settlement so that you may
properly date the Deed. Along with the Deed, you will
deliver to me the Buyer's $1,500.00 and interest thereto
that have been held in an escrow account ("Funds"). I will
hold the deed and the Funds in escrow pending my delivery to
you of: (1) $5,000.00; (2) a Settlement Sheet
showing the payoff of the Seller's mortgage; and (3) written
authorization to disburse Seller's escrowed funds.
Sincerely,
HOWARD S. SCHWARTZ
HSS/tms
cc: Mr. Terrence Sullivan
Mr. Charles Intravaia
Richard A. Monfred, Esquire
00048493.09
January 26, 1996
PARTNERSHIP INTEREST REDEMPTION AGREEMENT
THIS PARTNERSHIP INTEREST REDEMPTION AGREEMENT is made
this 27th day of February 1996, by and among HENDERSON'S WHARF
MARINA, L.P., a Delaware limited partnership (the "Partnership")
and HWFP, INC., a Maryland corporation (the "Selling Partner"),
and HENDERSON'S WHARF DEVELOPMENT CORPORATION, a Delaware
corporation ("HWDC"), and HISTORIC PRESERVATION PROPERTIES 1990
L.P. TAX CREDIT FUND, a Delaware limited partnership ("HPP")
(HWDC and HPP are, collectively, the "Partnership Parties"), who
signed for the purposes hereinafter set forth.
EXPLANATORY STATEMENT
A. The Partnership was formed pursuant to an
Agreement of Limited Partnership dated as of July 18, 1990 and a
Certificate of Limited Partnership dated as of July 12, 1990 and
filed with the Office of the Secretary of State of the State of
Delaware on July 20, 1990. The affairs of the Partnership are
now governed by the Third Amended and Restated Agreement of
Limited Partnership, dated as of December 31, 1992 (the
"Partnership Agreement").
B. The Partnership owns the fee simple interest in a
parcel of land known as the Marina at Henderson's Wharf located
in Baltimore, Maryland (the "Marina").
C. The Partners of the Partnership, and their
respective partnership interests are: HENDERSON'S WHARF
DEVELOPMENT CORPORATION, a Delaware corporation ("HWDC"), with a
1% general partnership interest; HISTORIC PRESERVATION PROPERTIES
1990 L.P. TAX CREDIT FUND, a Delaware limited partnership
("HPP"), with a 49% limited partnership interest; and Selling
Partner with a 50% limited partnership interest. HWDC, HPP, and
Selling Partner own all of the general and limited partnership
interests in the Partnership.
D. Simultaneously with the execution of this
Partnership Interest Redemption Agreement (the "Agreement"),
Henderson's Wharf Baltimore, L.P., a Delaware limited partnership
and an affiliated entity to the Partnership, is paying to the
Selling Partner Five Million Seven Hundred Thousand Dollars
($5,700,000.00) for a full release of a First Deed of Trust and a
Contingent Purchase Price Promissory Note from the Selling
Partner in connection with a piece of property adjacent to the
Marina containing approximately 275 condominium units and a 38-
room inn.
E. The Selling Partner has agreed to sell and the
Partnership has agreed to redeem all of the Selling Partner's
right, title and interest as a limited partner in the Partnership
pursuant to the terms and conditions of this Agreement.
AGREEMENTS
NOW, THEREFORE, in light of the foregoing and for good
and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties agree as follows:
1. Agreement to Sell Partnership Interest.
At the Closing hereunder, the Selling Partner shall
sell, transfer and assign to the Partnership and the Partnership
shall redeem at the price, and upon the terms and conditions
hereinafter set forth (the "Redemption"), the Selling Partner's
entire 50% limited partner interest in the Partnership (the
"Interest").
2. Purchase Price.
The purchase price for the Redemption of the
Interest shall be TWO HUNDRED TWENTY FIVE THOUSAND DOLLARS
($225,000.00) (the "Purchase Price"), which Purchase Price shall
be evidenced by and payable in accordance with the terms and
conditions of a promissory note (the "Note") in the form attached
hereto as Exhibit A.
3. Closing.
3.1. Closing Date. Closing shall take place no
later than February ____, 1996 or such other date as may be
mutually agreed to by the parties (the "Closing Date"), at the
offices of the Partnership or at such other location as is agreed
upon by the parties.
3.2. Actions To Be Taken By the Selling Partner
At Closing. Prior to or at the Closing, the Selling Partner
shall execute and deliver or cause to be delivered to the
Partnership:
3.2.1 an Assignment of Partnership Interest
and Bill of Sale (the "Assignment") in the form attached hereto
as Exhibit B; and
3.2.2 the First Amendment to the Partnership
Agreement (the "Amendment") in the form attached hereto as
Exhibit C.
3.2.3 a Release of $1,187,500 Deed of Trust
(the "Release") in the form attached hereto as Exhibit D.
3.2.4 two (2) original Terminations of
Financing Statement dated July 31, 1990 in the form attached
hereto as Exhibit E.
3.3. Actions To be Taken by the Partnership at
Closing. Prior to or at the Closing, the Partnership shall
execute and deliver or cause to be delivered to the Selling
Partner the Required Documents which shall be defined as:
3.3.1 the Note;
3.3.2 a Deed of Trust securing the Note in
the form attached hereto as Exhibit F (the "Deed of Trust"),
which Deed of Trust shall be recorded by the Selling Partner at
its sole expense immediately subsequent to the recordation of a
Second Amendment to Reciprocal Easement Agreement in the form
attached hereto as Exhibit G;
3.3.3 Assignment of Leases and Rents
securing the Note in the form attached hereto as Exhibit F;
3.3.4 UCC-1 Financing Statement naming the
Selling Partner as the secured party; and
3.3.5 the Amendment.
4. Selling Partner's Representations and Warranties.
The Selling Partner represents and warrants as follows each of
which shall be deemed to be re-made at Closing.
4.1. The Selling Partner is the sole legal and
beneficial owner of the Interest. The Selling Partner has not
sold, transferred or encumbered any or all of the Interest. The
Selling Partner has the full and sufficient right at law and in
equity to transfer and assign the entire Interest, and is
transferring and assigning the Interest to the Partnership free
and clear of any and all right, title or interest of any other
person or entity whatsoever; and
4.2. The Selling Partner has no knowledge of any
actions, suits or proceedings which have been instituted or
threatened against or affecting it at law or in equity or before
any Federal, State or municipal governmental department,
commission, board, bureau, agency or instrumentality that will
impose any liability on the Partnership as a result of its
Redemption of the Interest.
4.3. The Selling Partner has duly and validly
authorized, executed and delivered this Agreement, and neither
the execution nor the delivery of this Agreement nor its
performance are restricted by or violate any contractual or other
obligation of the Selling Partner.
4.4. Upon the closing of the transaction
contemplated herein and the execution and delivery, respectively,
by the Selling Partner and by the Partnership of the documents
listed in subsections 3.2 and 3.3 hereof, the Selling Partner
acknowledges that it will have no claims against the Partnership
with respect to the Selling Partner having been a partner of the
Partnership or with respect to the Interest.
5. Partnership's Representations and Warranties.
5.1 The Partnership represents and warrants to
the Selling Partner that it is authorized to execute and deliver
this Agreement, and to perform its obligations hereunder, and
that neither the execution nor the delivery of this Agreement nor
its performance hereunder are restricted by or violate any
contractual or other obligation of the Partnership.
5.2 Upon the closing of the transaction
contemplated herein and the execution and delivery, respectively,
by the Selling Partner and the Partnership, of the documents
listed in subsections 3.2 and 3.3 hereof, the Partnership
acknowledges that it will have no claims against the Selling
Partner with respect to the Selling Partner having been a Partner
of the Partnership or with respect to the Interest.
6. Releases.
The Partnership and the Partnership Parties, on
the one hand, and the Selling Partner on the other hand, for
themselves and for, as applicable, their general partners,
limited partners, officers, directors, employees, agents,
principals, stockholders, and for all of their respective
successors and assigns, hereby release and forever discharge each
other and, as applicable, all of their general partners, limited
partners, officers, directors, employees, agents, principals,
stockholders, and for all of their respective successors and
assigns, from all sums of money, accounts, actions, suits,
proceedings, judgments, liabilities, and causes of action,
demands of claims whatsoever, known or unknown, past, present, or
future, that either party had, has, or will have against the
other, for, by reason of, or with respect to, any act, cause,
matter, or thing that has occurred or existed from the beginning
of time to the date of this Agreement. Notwithstanding the
foregoing or any other provision of this Agreement to the
contrary, the foregoing release does not apply to any claims
arising out of or relating to (i) the rights and liabilities of
the Partnership, the Selling Partner, and the Partnership Parties
under this Agreement or any Exhibits thereto, and (ii) the
obligations of the Partnership and/or Partnership Partners under
the Note, Deed of Trust, and Assignment of Leases and Rents.
7. Indemnification.
7.1 By Selling Partner. The Selling Partner
shall defend, indemnify and hold harmless the Partnership and the
Partnership Parties against and from any and all liability, claim
of liability or expense including reasonable attorneys fees
arising out of any failure of the Selling Partner's
representations contained in the provisions of Section 4 to be
true, accurate and complete in all material respects, including,
without limitation, the payment of reasonable attorneys fees.
7.2 By the Partnership. The Partnership shall
defend, indemnify and hold harmless the Selling Partner against
and from any and all liability, claim of liability or expense
including reasonable attorneys fees arising out of any failure of
the Partnership's representations contained in the provisions of
Section 5 to be true, accurate and complete in all material
respects, including, without limitation, the payment of
reasonable attorneys fees.
8. Further Assurances. The Selling Partner agrees to
execute, acknowledge, and deliver any such further assignments,
conveyances, certificates and other assurances, documents, and
instruments as may reasonably be requested by the Partnership for
the purpose of effecting and consummating the transactions
contemplated hereby.
9. Default and Remedies. In the event of a default
hereunder by the Selling Partner or the Partnership, the non-
defaulting party may pursue any remedy available at law or in
equity against such defaulting party, including a suit for
specific performance.
10. Real Estate Brokers. The parties hereto represent
and warrant to each other that no brokerage or real estate agent
was employed or utilized by any Selling Partner or Partnership
with regard to the sale contemplated herein. The Selling Partner
agrees to indemnify and hold harmless the Partnership from any
claim for compensation made by any broker or agent with respect
to this purchase and sale because of the actions of the Selling
Partner herein. The Partnership agrees to indemnify and hold
harmless the Selling Partner from any claim for compensation made
by any broker or agent with respect to this purchase and sale
because of the actions of the Partnership herein.
11. Notice. Any notice to be given under this
Agreement by Partnership to Selling Partner shall be deemed to be
given if and when hand delivered with receipted delivery or
delivered by the United States Registered or Certified Mail,
postage prepaid, return receipt requested, addressed to Selling
Partner at:
c/o J.E. Robert Companies
1650 Tysons Boulevard
Suite 1600
McLean, Virginia 22102
Attn: Stephen E. Cox
With a copy to:
Leslie A. Kaplan, Esquire
Dickstein Shapiro & Morin, L.L.P.
2101 L Street, N.W.
Washington, D.C. 20037-1526
and any notice to be given by Selling Partner to the Partnership
shall be deemed to be given if and when hand-delivered or
delivered by the United States Registered or Certified Mail,
postage prepaid, return receipt requested, addressed to the
Partnership at:
c/o Claremont Management Corporation
Batterymarch Park II
Quincy, Massachusetts 02169
with a copy to: Richard Rubin, Esquire
Neuberger, Quinn, Gielen, Rubin & Gibber,P.A.
27th Floor
Commerce Place
One South Street
Baltimore, Maryland 21202
12. Miscellaneous.
12.1. This Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their
respective heirs, personal representatives, successors and
assigns. None of the parties shall have any right to assign this
Agreement.
12.2. The recitals are an integral part of this
Agreement.
12.3. This Agreement shall be construed in
accordance with the laws of the State of Maryland.
12.4. This Agreement may be executed
simultaneously in two or more counterparts each of which shall be
deemed an original, and all of which when taken together shall
constitute one and the same instrument binding on the parties
hereto. The signature of any party to any counterpart shall be
deemed a signature to and may be appended to any other
counterpart.
12.5. Time shall be of the essence with respect
to this Agreement.
12.6. This Agreement constitutes the entire
understanding among the parties hereto as to the subject matter
hereof, and supersedes all prior written or oral negotiations,
representations, guaranties, warranties, promises, statements or
agreements among the parties hereto as to the Interest.
IN WITNESS WHEREOF, the undersigned have caused these
presents to be executed under seal on the day and year first
above written.
WITNESS: SELLING PARTNER:
HWFP, INC.
______________________________By:____________________________(SEAL)
WITNESS: THE PARTNERSHIP:
HENDERSON'S WHARF MARINA, L.P.,
By: Henderson's Wharf Development
Corporation, its general partner
_____________________________ By:________________________________
Terrence P. Sullivan,
president
THE PARTNERSHIP PARTIES:
HENDERSON'S WHARF DEVELOPMENT CORPORATION
______________________________ By:____________________________________
Terrence P. Sullivan,
president
HISTORIC PRESERVATION PROPERTIES 1990
L.P. TAX CREDIT FUND
By: Boston Historic II Partners Limited
Limited Partnership,its general
partner
By: BHP II Advisors Limited
Partnership, its general partner
______________________________ By:_____________________________
Terrence P. Sullivan,
general partner
By: Portfolio Advisory
Services II, Inc.,
its general partner
______________________________ By:_____________________________
Terrence P. Sullivan,
president
EXHIBITS TO
PARTNERSHIP INTEREST REDEMPTION AGREEMENT
A. Promissory Note
B. Assignment of Partnership Interest and Bill of Sale
C. First Amendment to Partnership Agreement
D. Release of $1,187,500 Deed of Trust
E. Termination of Financing Statement dated July
31, 1990
F. Deed of Trust
G. Second Amendment to Reciprocal Easement Agreement
H. Assignment of Leases and Rents
EXHIBIT A
PROMISSORY NOTE
EXHIBIT B
ASSIGNMENT OF PARTNERSHIP INTEREST
AND BILL OF SALE
(Attached)
EXHIBIT B
ASSIGNMENT OF PARTNERSHIP INTEREST
AND BILL OF SALE
FOR VALUE RECEIVED, the receipt and sufficiency of
which are hereby acknowledged, HWFP, Inc., a Maryland corporation
("Selling Partner"), hereby sells, assigns, sets over, transfers,
and permits to be redeemed, without recourse or warranty of any
nature whatsoever, express or implied, except as specifically set
forth in the Partnership Interest Redemption Agreement by and
among the parties hereto and of even date herewith, unto
Henderson's Wharf Marina, L.P., a Delaware limited partnership
(the "Partnership"), its successors and assigns, all of the
Selling Partner's right, title and interest in the Partnership
(the "Interest"), currently standing in the Selling Partner's
name on the books of the Partnership, including, without
limitation, the right to receive the share of profits or other
compensation or losses to which the Selling Partner would
otherwise be entitled, and the right to the return of the
contribution, if any, of the Selling Partner to the capital of
the Partnership. Effective upon the execution and delivery
hereof, the Partnership shall have the right to exercise all of
the rights and privileges which the Selling Partner, as limited
partner, had in the Partnership.
The Selling Partner agrees that it will execute and
deliver such further instruments of sale, conveyance and transfer
and take such further actions as the Partnership may reasonably
request in order to effectuate the conveyance intended herein.
This Assignment of Partnership Interest and Bill of
Sale shall inure to the benefit of the Partnership and its
successors and assigns.
IN WITNESS WHEREOF, the undersigned has executed this
Assignment of Partnership Interest and Bill of Sale as of the
27th day of February, 1996.
WITNESS: HWFP, Inc.
______________________________By:_______________________(SEAL)
Acknowledged and Accepted as
of this ____ day of _____________
THE PARTNERSHIP:
HENDERSON'S WHARF MARINA, L.P.,
By: Henderson's Wharf Development
Corporation
By:__________________________________
Terrence P. Sullivan,
President
THE PARTNERSHIP PARTIES:
HENDERSON'S WHARF DEVELOPMENT CORPORATION
By:______________________________________
Terrence P. Sullivan,
President
HISTORIC PRESERVATION PROPERTIES 1990
L.P. TAX CREDIT FUND
By: Boston Historic II Partners
Limited Partnership, its sole
general partner
By: BHP II Advisors Limited
Partnership, its sole general
partner
By:___________________________
Terrence P. Sullivan,
general partner
By: Portfolio Advisory
Services II, Inc.
By:_______________________
Terrence P. Sullivan,
President
EXHIBIT C
FIRST AMENDMENT TO THE THIRD AMENDED
AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
(Attached)
EXHIBIT D
RELEASE OF $1,187,500 DEED OF TRUST
RELEASE
THIS RELEASE made as of the 31st day of December, 1992,
by and among HWFP., Inc., a Maryland Corporation ("Lender"),
JOSEPH E. ROBERT, JR., a trustee and HENDERSON'S WHARF MARINA,
L.P., a Delaware limited partnership ("Borrower").
WITNESSETH, THAT WHEREAS, by that certain Purchase Money
Deed of Trust (the "Deed of Trust") dated as of July 31, 1990,
and recorded among the Land Records of Baltimore City, Maryland,
in Liber 2563, folio 193, Borrower conveyed to Kenneth M. Stein
and Joseph E. Robert, Jr., as trustees (collectively and
singularly the "Trustees"), all of that real property in the said
City which is described therein (the "Property"), as security for
the debt referred to therein and owed to Lender, and for
Borrower's performance of Borrower's other obligations
thereunder; and
WHEREAS, by that certain Deed of Appointment of
Substitute Trustee dated September 25, 1991, and recorded among
the land Records of Baltimore City, Maryland, in Liber 3010 folio
51, the said Kenneth M. Stein was removed from his position as a
trustee under the Deed of Trust and Harley D. Cook was appointed
in his place as a trustee under the Deed of Trust; and
WHEREAS, by that certain Deed of Appointment of
Substitute Trustee dated August 31, 1992, and recorded among the
land Records of Baltimore City, Maryland, in Liber 3388 folio
273, the said Harley D. Cook was removed from his position as a
trustee under the Deed of Trust, and S. Herbert Tinley, III, was
appointed in his place as a trustee under the Deed of Trust; and
WHEREAS, the said S. Herbert Tinley, III, resigned as a
trustee under the Deed of Trust and has not been replaced; and
WHEREAS, the Deed of Trust authorizes any one Trustee to
act on behalf of the Trustees in all matters, and that such
action when so taken shall be considered for all purposes as if
taken by the Trustees; and
WHEREAS, such debt has been fully satisfied and,
consequently, Borrower has asked that Lender and the Trustees
release from the lien, operation and effect of the Deed of Trust
the Property, and Lender is willing to do so and has authorized
the Trustees to do so.
NOW, THEREFORE, IN CONSIDERATION OF Borrower's payment to
Lender of Ten and 00/100 Dollars ($10.00) and for other good and
valuable consideration, the receipt and adequacy of which are
hereby acknowledged by each party hereto, Lender and the Trustees
hereby release, quit, remise and abandon unto Borrower, from the
lien, operation and effect of the Deed of Trust, all of the
Property which is now subject thereto, so that the Property is
now and hereafter shall be free and clear of the lien, operation
and effect of the Deed of Trust as if it had never been executed
and as if the Property had never been subject thereto.
LENDER AND THE TRUSTEES hereby agree to give such further
assurance of the foregoing as may be requisite.
IN WITNESS WHEREOF, Lender and the Trustees have executed
and ensealed this Release or caused it to be executed and
ensealed on their behalves by their duly authorized
representatives, as of the day and year first above written.
WITNESS or ATTEST: LENDER:
HWFP, INC.
______________________________By:__________________________
Joseph E. Robert, Jr.
Vice President
TRUSTEES:
______________________________________________________________
JOSEPH E. ROBERT, JR., Trustee
STATE OF _____________)
) to wit:
COUNTY OF ____________)
I HEREBY CERTIFY, that on this ____ day of February,
1996 before me, a Notary Public in and for the State and County
aforesaid, personally appeared JOSEPH E. ROBERT, JR., known to me
or satisfactorily proven to be the person whose name is
subscribed to the within instrument, who acknowledged that he is
the Vice President of HWFP, INC., a Maryland corporation, that he
has been duly authorized to execute, and has executed, such
instrument on his behalf for the purpose therein set forth, and
that the same is its act and deed.
IN WITNESS WHEREOF, I have set my hand and Notarial
Seal, the day and year first above written.
________________________________
Notary Public
My Commission Expires:
______________________
STATE OF _____________)
) to wit:
COUNTY OF )
I HEREBY CERTIFY, that on this ____ day of February,
1996 before me, a Notary Public in and for the State and County
aforesaid, personally appeared JOSEPH E. ROBERT, JR., known to me
or satisfactorily proven to be the person whose name is
subscribed to the within instrument, who acknowledged that he is
the person named as Trustee in the deed of trust referred to
therein, that he has been duly authorized to execute, and has
executed, such instrument on his behalf for the purpose therein
set forth, and that the same is its act and deed.
IN WITNESS WHEREOF, I have set my hand and Notarial
Seal, the day and year first above written.
________________________________
Notary Public
My Commission Expires:
______________________
THIS IS TO CERTIFY THAT THIS INSTRUMENT WAS PREPARED BY
OR UNDER THE SUPERVISION OF THE UNDERSIGNED, AN ATTORNEY DULY
ADMITTED TO PRACTICE BEFORE THE COURT OF APPEALS OF MARYLAND.
________________________________
Richard Rubin
AFTER RECORDING,
PLEASE RETURN TO:
Richard Rubin, Esquire
Neuberger, Quinn, Gielen, Rubin & Gibber, P.A.
27th Floor, Commerce Place
One South Street
Baltimore, Maryland 21202-3201
EXHIBIT E
TERMINATION OF FINANCING STATEMENT
DATED JULY 31, 1990
TO BE RECORDED IN THE FINANCING STATEMENT RECORDS OF
THE MARYLAND STATE DEPARTMENT OF ASSESSMENTS AND TAXATION
TERMINATION STATEMENT
This Termination Statement is presented to a filing officer
pursuant to the Maryland Uniform Commercial Code.
1. NAME AND ADDRESS OF DEBTOR:
HENDERSON'S WHARF MARINA, L.P.
c/o Claremont Management Corporation
Batterymarch Park II
Quincy, Massachusetts 02169
2. NAME AND ADDRESS OF SECURED PARTY:
HWFP, INC.
c/o J. E. Robert Companies
1650 Tysons Boulevard
Suite 1600
McLean, Virginia 22102
3. This Statement refers to the original Financing
Statement No. 102397805 filed August 27, 1990, and recorded at
Film 3265, Folio 0884.
4. The Secured Party of record no longer claims a
security interest under the Financing Statement bearing the above
file number.
Secured Party:
HWFP, INC.
By:_________________________________
Title:______________________________
Return to: Richard Rubin, Esquire
Neuberger, Quinn, Gielen, Rubin &
Gibber, P.A.
27th Floor, Commerce Place
One South Street
Baltimore, Maryland 21202
EXHIBIT F
DEED OF TRUST
EXHIBIT G
SECOND AMENDMENT TO RECIPROCAL EASEMENT AGREEMENT
EXHIBIT H
ASSIGNMENT OF LEASES AND RENTS
PROMISSORY NOTE
DATE OF NOTE: February 27, 1996
AMOUNT OF NOTE: $225,000.00
MATURITY DATE: March 15, 2006
INTEREST RATE: Seven and one-half percent (7.5%) per annum
For Value Received, HENDERSON'S WHARF MARINA, L.P., a Delaware
limited partnership (the "Maker"), promises to pay to the order
of HWFP, INC., a Maryland corporation, or its successors and
assigns (collectively, the "Payee"), the principal sum of TWO
HUNDRED TWENTY-FIVE THOUSAND DOLLARS ($225,000.00), plus
interest on the unpaid principal balance (herein called the
"Principal Amount") at the rate of seven and one-half percent
(7.5%) per annum from the date of this Note until paid in full.
1. PAYMENTS. Interest from the date of this Note until March
14, 1996 shall be due and payable on March 15, 1996.
Thereafter, this Note shall be payable in one hundred twenty
(120) successive monthly payments of principal and interest,
each in the amount of Two Thousand Eighty-five and 78/00 Dollars
($2085.78), commencing on April 15, 1996 and continuing on the
first day of each succeeding calendar month until the entire
outstanding Principal Amount and all accrued and unpaid interest
thereon and all other sums payable hereunder shall be paid in
full. All payments on this Note shall be applied first to late
charges and other fees payable hereunder, if any, then to
accrued and unpaid interest and then in reduction of the
Principal Amount. All payments of principal and interest and
any other charges due hereunder shall be payable at HWFP, Inc.,
c/o J.E. Robert Companies, 1650 Tysons Boulevard, Suite 1600,
McLean, Virginia 22102, Attention: Stephen E. Cox, or such
other place as the Payee may designate in writing. Interest
shall be calculated based upon a 360-day year comprised of
twelve (12) months of thirty (30) days each, and actual number
of days elapsed.
2. MATURITY DATE. The entire outstanding Principal Amount,
together with all accrued and unpaid interest thereon and all
other sums payable hereunder, shall mature and be due and
payable in full to the Payee on March 15, 2006 (the "Maturity
Date").
3. ACCELERATION; EXPENSES. The Payee may accelerate the
Maturity Date if an Event of Default (as defined in the
hereinafter referenced Mortgage) shall occur, regardless of any
prior forbearance. The Maker shall pay all of the costs and
expenses incurred by the Payee in connection with collecting or
attempting to collect any sums due under this Note or enforcing
any provision of this Note, the Mortgage or any of the other
Loan Documents (hereinafter defined), including, but not limited
to, attorneys' fees and disbursements and applicable statutory
costs, whether incurred out of court or in litigation, including
pre-trial, appellate and bankruptcy proceedings.
4. LATE PAYMENTS AND DEFAULT INTEREST. If any amount due under
this Note is not received by the Payee within five (5)calendar
days after the date such amount is due, the Maker shall pay to
the Payee a late charge equal to five (5%) percent of such
overdue amount, which late charge shall be immediately due and
payable without notice or demand by the Payee. During the
continuance of an Event of Default, interest on the Principal
Amount shall accrue at the rate of five percent (5%) per annum
in excess of the then applicable rate of interest hereunder (the
"Default Rate") until the Principal Amount, together with all
accrued interest thereon, is paid in full. The foregoing shall
not be construed as a waiver by Payee of its right to pursue any
other remedies available to it under this Note, the Mortgage, or
any other document or instrument now or hereafter executed or
delivered in connection with the loan evidenced hereby (together
with all extensions, renewals, modifications, amendments and
substitutions thereof or therefor, the "Loan Documents"). All
amounts evidenced hereby shall bear interest at the Default Rate
from the date of maturity of this Note, by acceleration or
otherwise, until paid.
5. PREPAYMENT. This Note may be prepaid in whole or in part at
any time without premium or penalty. All prepayments shall be
applied against the Principal Amount in the inverse order of
maturity and shall not extend or postpone the due date of any
subsequent monthly installments or change the amount of such
installments, unless the Payee shall agree otherwise in writing.
6. WAIVER; NO RELEASE; REMEDIES CUMULATIVE. Presentment,
demand, notice of dishonor, notice of protest and protest are
hereby waived by all makers, sureties, guarantors and endorsers
hereof. This Note shall be the joint and several obligation of
all makers, sureties, guarantors and endorsers, and shall be
binding upon them and their successors and assigns. No release
of any person liable for the indebtedness evidenced hereby, and
no release of any security for the indebtedness evidenced by
this Note, or any portion thereof, and no extension, alteration,
amendment, subordination or waiver of any provision of this Note
or of any other Loan Document made by agreement between the
Payee and any other person or party shall release, discharge,
modify, change or affect the liability of the Maker or any
other person now or hereafter liable under this Note or under such
other Loan Document. The remedies provided the Payee in
this Note, the Mortgage and the other Loan Documents shall be
cumulative and concurrent, and shall be in addition to every
other right or remedy now or hereafter provided by law or
equity. Such remedies may be pursued singly, successively or
together against the Maker, any of the property subject to the
Mortgage, or any other security at the option of the Payee. The
Maker hereby expressly waives any right to make a claim for or
relating to the marshaling of assets. The Maker hereby
expressly waives any right to grace, right of offset or defenses
of any kind. The failure to exercise or delay in exercising any
such remedy shall not be construed as a waiver or release thereof.
7. THE MORTGAGE; GOVERNING LAW. The indebtedness evidenced by
this Note is secured by, among other things, a deed of trust
dated as of the date hereof, encumbering premises known as
Henderson's Wharf Marina, located in Baltimore, Maryland (the
"Mortgage"), and is subject to all of the terms and conditions
thereof. Reference is made thereto and the other
Loan Documents for certain rights as to acceleration of the
indebtedness evidenced by this Note. Upon the occurrence of an
Event of Default, the Principal Amount and all accrued and
unpaid interest thereon, and all other amounts secured by the
Mortgage shall, at the option of the Payee, become immediately
due and payable. This Note shall be governed by the laws of the
State of Maryland, without regard to conflicts of law provisions.
8. LEGAL RATE OF INTEREST. This Note is subject to the express
condition that at no time shall the Maker be obligated or
required to pay interest on the Principal Amount at a rate in
excess of the maximum rate which the Maker is permitted by law
to contract or agree to pay. If by the terms of this Note, the
Maker at any time is required or obligated to pay interest on
the Principal Amount at a rate in excess of such maximum rate,
then the rate of interest hereunder shall be deemed to be
reduced immediately and automatically to such maximum rate,
interest payable hereunder shall be computed at such maximum
rate and any prior interest payment made in excess of such
maximum rate shall be immediately and automatically applied to,
and shall be deemed to have been payment made in reduction of,
the Principal Amount.
9. INVALIDITY. In the event any one or more of the provisions
contained in this Note or any other Loan Document shall for any
reason be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall
not affect any other provision of this Note or such other Loan
Document, but this Note and the other Loan Documents shall be
construed as if such invalid, illegal or unforceable provision
had never been contained herein or therein.
10. CAPTIONS. The captions and headings set forth in this Note
are for convenience purposes only and shall not limit, define or
otherwise have any effect on the interpretation of the
agreements and understandings set forth herein.
11. RELATIONSHIP OF PARTIES. The Payee shall in no event be
construed for any purpose to be a partner, joint venturer or
associate of the Maker, or of any lessee, operator,
concessionaire or licensee of the Maker, in the conduct of their
respective businesses.
12. MODIFICATION. This Note may not be modified, amended,
discharged or waived orally, but only by an agreement in writing
signed by the party against whom such modification, amendment,
discharge or waiver is sought to be enforced.
13. PURPOSE OF LOAN. The Maker warrants and represents that the
loan evidenced hereby is being made for business or investment
purposes.
WITNESS OR ATTEST: HENDERSON'S WHARF MARINA, L.P.
[CORPORATE SEAL] a Delaware limited partnership
By: Henderson's Wharf DevelopmentCorporation,
a Delaware corporation, its sole general
partner
By:
Terrence P. Sullivan,
President
Maker's Address:
c/o Claremont Management Corporation
Battermarch Park II
Quincy, Massachusetts 02169
1DEED OF TRUST
THIS DEED OF TRUST, made this 27 day of February, 1996, by
and between (i) HENDERSON'S WHARF MARINA, L.P., a Delaware
limited partnership ("Grantor"), and (ii) STEPHEN E. COX and
JOSEPH E. ROBERT, JR., as trustees (collectively "Trustees") for
the benefit of HWFP, INC., a Maryland corporation, its
successors and assigns (collectively "Beneficiary").
W I T N E S S E T H T H A T :
WHEREAS, the Grantor is indebted to the Beneficiary in the
principal amount of Two Hundred Twenty-five Thousand Dollars
($225,000.00), or so much thereof as shall remain outstanding,
as evidenced by a promissory note of even date herewith, made by
the Grantor and payable to the order of the Beneficiary in the
original principal amount of Two Hundred Twenty-five Thousand
Dollars ($225,000.00) (together with all extensions, renewals
and modifications of, and substitutions for, such note, the
"Note").
NOW, THEREFORE, to secure the indebtedness of the Grantor
evidenced by the Note, plus all accrued and unpaid interest and
other charges thereon, and to secure the prompt performance of
each and every covenant, term and condition made or to be
complied with pursuant to this Deed of Trust, the Note or any
document executed in connection herewith or therewith
(collectively, the "Documents"), the terms and conditions of
each of which are made a part hereof and incorporated herein by
reference, and further to secure all of the costs and expenses
incurred with respect to the Note or any instrument now or
hereafter evidencing or securing any of the referenced
indebtedness, including without limitation costs and attorneys'
fees incurred or paid by either of the Trustees (or any
substitute trustees hereunder) or by any other person hereby
secured, whether suit be brought or not, or on account of any
litigation at law or in equity which may arise with respect to
this Deed of Trust, the Note or the hereinafter referenced
property, and to secure payment of all money which may be
advanced as provided herein, plus interest on all such costs and
advances from the date hereof (all of the foregoing being herein
collectively referred to as the "Indebtedness"), the Grantor has
granted, bargained, sold and conveyed and by these presents does
grant, bargain, sell and convey unto the Trustees, their
survivor and other successor or successors in trust:
All those certain lots, pieces or parcels of land and all
buildings and improvements now or hereafter erected thereon,
situate, lying and being in the City of Baltimore, State of
Maryland, as more fully described on Schedule "A" attached
hereto and made a part hereof by reference;
TOGETHER with all and singular the tenements, hereditaments,
easements, rights of way, franchises, licenses, permits and
appurtenances now or hereafter thereunto belonging or in anyway
appertaining, and the reversion or reversions, remainder and
remainders; and also all present and future leases of said real
property or any part thereof, and all extensions, renewals and
modifications thereof, or substitutions therefor, and all rents,
issues and profits therefrom, including, without limitation, all
amounts received from the periodic rental of boat slips; and also
all the estate, right, title, interest, property, claim and
demand whatsoever of the Grantor, of, in and to the same, and
of, in and to every part and parcel thereof;
TOGETHER with all right, title and interest of the Grantor, if
any, in and to the land lying in the bed of any street, alley,
road or avenue, opened or proposed, in front of or adjoining the
above described real estate to the center line thereof;
TOGETHER with all machinery, apparatus, equipment, fittings,
fixtures, furniture and articles of personal property of very
kind and nature whatsoever (excluding property owned by tenants
which according to the terms of any applicable leases may be
removed by such tenants at the expiration of such leases), now
or hereafter located in or upon the real estate or any part
thereof, and used or usable in connection with any present or
future operation of such real estate (collectively "Equipment"),
whether now owned or hereafter acquired by the Grantor and all
of the right, title and interest of the Grantor in and to any
Equipment which may be subject to any title retention or
security agreement or instrument superior in lien of this Deed
of Trust. It is understood and agreed that all Equipment is to
be deemed part and parcel of the subject real estate and
appropriated to the use of such real estate and, whether affixed
or annexed or not, shall for the purpose of this Deed of Trust
be deemed conclusively to be real estate and conveyed hereby.
This Deed of Trust shall also constitute a Security Agreement
between the Grantor, as debtor, and the Beneficiary, as secured
party, as to both chattel and fixture items of every type now or
hereafter owned by the Grantor and used or usable in conjunction
with the subject real estate, and the proceeds thereof,
including but not limited to those types of items hereinabove
itemized as constituting "Equipment". The Grantor agrees to
execute and deliver from time to time such further instruments
as may be requested by the Beneficiary to confirm and/or perfect
the lien of this Deed of Trust on any Equipment or other chattel
items or fixtures;
TOGETHER with all building materials, supplies and equipment
now or hereafter delivered to the property and intended to be
installed or incorporated in any improvements thereon;
AND TOGETHER with any and all awards or payments, including
interest thereon, and the right to receive such awards or payments,
which may be made with respect to the above described
property as a result of (a) the exercise of the right of eminent
domain, (b) the alteration of the grade of any street, or (c)
any other injury to or decrease in the value of the Premises, to the
extent of all amounts which may be secured by this Deed of Trust
at the date of receipt of any such award or payment by the
Beneficiary, and of the attorneys' fees, costs and disbursements
incurred by the Beneficiary in connection with the collection of
such award or payment and the Grantor agrees to execute and
deliver, from time to time, such further instruments as may be
requested by the Beneficiary to confirm and/or perfect the
assignment to the Beneficiary of any such award or payment.
TO HAVE AND TO HOLD the above granted and described property
with the appurtenances, and any after-acquired title the Grantor
may subsequently obtain therein (all of which is herein collectively
called the "Premises"), to the Trustees, their
survivor, or other successor or successors in trust, forever;
and the Grantor warrants specially the title to the Premises and
will execute such further assurances of title as may be requisite.
PROVIDED, ALWAYS, that if the Grantor, or the heirs, executors,
administrators, successors or assigns of the Grantor, shall pay
to the Beneficiary the entire Indebtedness and all costs,
charges, expenses, prepayment charges and commissions incurred
hereunder at the time and in the manner prescribed in the Note,
and shall comply with each and every covenant and condition set
forth herein, in the Note and in every other of the Documents,
then these presents and the estate hereby granted shall lease,
terminate and be void; provided, however, that until the
occurrence of any event which gives the Beneficiary the option
to cause the entire Indebtedness to become due and payable, the
Grantor shall have the right to possess and enjoy the Premises
and to receive the rents, issues and profits therefrom; and
provided, further, that upon full payment of the Indebtedness
and all costs, charges, expenses, prepayment charges and
commissions incurred at any time hereunder, the Trustees shall
be entitled to a fee, not exceeding Two Hundred Dollars
($200.00) each, for the release and reconveyance of the
Premises to (and at the cost of) the Grantor.
AND the Grantor covenants and agrees as follows:
1. Payment of the Indebtedness. The Grantor will pay the
entire Indebtedness at the time and in the manner prescribed in
the Note.
2. Payment of Taxes, Assessments, Fees, Etc. The Grantor will
pay when due all taxes, assessments, water rates, sewer rents
and other charges, and any rents and/or other sums payable with
reference to the Premises, or now or hereafter assessed as liens
on or levied against the Premises. Upon the request of the
Beneficiary, the Grantor will exhibit to the Beneficiary
receipts for the payment of all items specified in this
paragraph prior to the date when the same shall become
delinquent. If the Grantor shall fail to pay any such sum when
it is due and payable, the Beneficiary may, without notice or
demand to the Grantor, make such payment, and all sums paid by
the Beneficiary in discharge of taxes, assessments, water rates,
sewer rents, other charges, rents and/or prior liens shall be
added to the amount of the Indebtedness, payable on demand,and
be secured by this Deed of Trust.
3. Insurance.
(a) The Grantor will keep the Premises, including without
limitation all buildings and Equipment, insured for the benefit
of the Beneficiary against loss or damage by fire, lightning,
windstorm, hail, explosion, aircraft, vehicles and smoke, for an
amount equal to the aggregate principal amount of the Note or
100% of full insurable value, whichever is less, but in all
events for an amount sufficient to prevent any co-insurance
clause in any referenced insurance policy from coming into
effect. All insurance required hereunder shall be in form and
with companies approved by the Beneficiary, and, regardless of
the types of amounts of insurance required and approved by the
Beneficiary, the Grantor will assign and deliver to the
Beneficiary as collateral and further security for the payment
of the Indebtedness, all policies of insurance which insure
against any loss or damage to the Premises, naming the
Beneficiary as mortgagee pursuant to a standard mortgage clause,
without contribution, and being in all other respects
satisfactory to the Beneficiary. If the Grantor fails to insure
the Premises or to assign and deliver the policies as herein
required, the Beneficiary may, at its option, effect such
insurance from year to year and pay the premiums therefor,
and the amount of such premiums shall be added to the amount of
the Indebtedness, payable on demand, and be secured by this Deed
of Trust.
(b) If the Beneficiary by reason of any such insurance
receives any money for loss or damage, such amount may, at the
option of the Beneficiary, be retained and applied by the
Beneficiary as a prepayment of the Indebtedness, or be paid over
wholly or in part to the Grantor for the repair of the buildings
or for the erection of new buildings on the Premises or for any
other purpose or object satisfactory to the Beneficiary, but the
Beneficiary shall not be obligated to see to the proper application
of any amount paid over to the Grantor.
(c) Not less than ten (10) days prior to the expiration dates
of each policy required of the Grantor pursuant to this paragraph,
the Grantor will deliver to the Beneficiary a renewal
policy or policies marked "premium paid" or accompanied by other
evidence of payment satisfactory to the Beneficiary.
(d) In the event of a foreclosure of this Deed of Trust by
virtue of judicial proceedings or otherwise, the Beneficiary
shall succeed to all rights of the Grantor in and to all
policies of insurance maintained by the Grantor with respect to
the Premises, including without limitation any right to receive
unearned premiums.
4. Removal of Equipment. No building or other property covered
by the lien of this Deed of Trust shall be removed, demolished
or materially altered, without the prior written consent of the
Beneficiary, except that the Grantor shall have the right to
remove and dispose of such Equipment as may become worn out or
obsolete, provided that either (a) simultaneously with or prior
to removal any such Equipment which is necessary or desirable
for the use or operation of the Premises is replaced with other
Equipment of a value equal to or greater than that of the
replaced Equipment and free from any title retention, security
agreement or other encumbrance, or (b) any net cash proceeds
received from such disposition shall be paid over promptly to
the Beneficiary to be applied as a prepayment of the
Indebtedness. In the event new Equipment is installed by the
Grantor hereunder, it shall be deemed to be subject to the lien
of this Deed of Trust from the date of installation.
5. Events of Default. The entire Indebtedness shall become
immediately due and payable at the option of the Beneficiary
upon the occurrence of any of the following events (each of
which is an "Event of Default" under this Deed of Trust): (a)
default in the payment of any installment of principal and/or
interest on the Note, or any other portion of the Indebtedness
when due, which default shall continue beyond the expiration of
ten (10) days following written notice of default (provided,
however, that only one (1) such notice shall be required to be
given to Grantor in any twelve (12) month period); or (b)
default in the payment when due of any tax, assessment, water
rate, sewer rent or other charge, rent or prior lien relating to
the Premises; or (c) default either in assigning and delivering
or keeping in force the policies of insurance hereinreferred to
or in reimbursing the Beneficiary for premiums paid on such
insurance; or (d) default upon request in furnishing a statement
of the amount due under the Note or any other statement required
under paragraph 8 hereof, which default shall continue beyond
the expiration of fifteen (15) days following written notice of
default; or (e) the actual or threatened waste, removal or
demolition of, or material alteration to, any part of the
Premises, except as permitted herein; or (f) except in
connection with any subordinate financing approved in writing by
the Beneficiary, assignment by the Grantor of the whole or any
part of the rents, income or profits arising from the Premises
without the prior written consent of the Beneficiary; or (g)
default in the removal of any federal or local tax lien on the
Premises, which lien is for taxes which are in default; or (h)
default in the observance or performance of any other covenants
or agreements of the Grantor hereunder or under any of the other
Documents which default shall continue beyond the expiration of
thirty (30) days following written notice of default; or (i) the
election of the Beneficiary to accelerate the maturity of any
other indebtedness of the Grantor pursuant to any instrument
which may be held by the Beneficiary; or (j) by order of a court
of competent jurisdiction, (i) the appointment of a receiver or
liquidator or trustee of the Grantor, or of any of its property,
which shall not have been discharged within thirty (30) days or,
(ii) any sequestration of the property of the Grantor, which
decree shall have continued undischarged and unstayed for thirty
(30) days after the entry thereof; or (k) the filing by the
Grantor of a voluntary petition in bankruptcy or a petition for
reorganization under any applicable state or federal law; or (l)
the filing of any involuntary petition against the Grantor under
any such law, which shall not have been discharged within thirty
(30) days after the filing thereof; or (m) an assignment by the
Grantor for the benefit of creditors; or (n) consent by the
Grantor to the appointment of a receiver, trustee or liquidator
of the Grantor, or of all or any part of its property.
6. Performance of Covenants; Costs. In the event of any
default in the performance of any of the Grantor's covenants or
agreements herein or any other Document, or under any ground
lease (if Grantor's interest in all or any portion of the land
is a leasehold estate), the Beneficiary may, at its sole option,
perform the same, and the cost of such performance shall be
added to the Indebtedness, and be secured by this Deed of Trust.
7. Appointment of a Receiver. In any action to foreclose this
Deed of Trust, or upon the occurrence of any actual or
threatened waste to any part of the Premises, or upon default
hereunder, the Beneficiary shall be at liberty to apply for the
appointment of a receiver of the rents and profits of the
Premises without notice, and shall be entitled to the
appointment of such a receiver as a matter of right, without
consideration of the value of the Premises as security for the
amounts due the Beneficiary or the solvency of any person liable
for the payment of such amounts.
8. Estoppel Certificates. The Grantor, upon the Beneficiary's
request, shall certify in writing to the Beneficiary or to an
proposed assignee of the Indebtedness, the amount of principal,
interest and other fees and charges, if any, then owing on the
Note and whether any offsets or defenses exist against the
payment in full of the Indebtedness or against this Deed of
Trust. The Beneficiary, upon the Grantor's request, shall
certify to the Grantor the amount of principal, interest and
other fees and charges, if any, then owing on the Note. Such
certification shall be made by the Grantor or Beneficiary, as
the case may be, within fifteen (15) days of request.
9. Notice. All notices, demands, requests, consents,or
approvals required under this Deed of Trust shall be deemed to
have been properly given if and when delivered in writing
personally, with receipt of delivery, or mailed by certified or
registered U.S. mail, return receipt requested, to the Grantor
(with a copy to Richard Rubin, Esq.) or to the Beneficiary at
the respective address set forth below, or to such other address
as the Grantor or Beneficiary shall have furnished to the other
in writing, mailed as aforesaid.
10. Change in Tax Law; Additional Taxes. In the event of the
passage after the date of this Deed of Trust of any law of the
jurisdiction in which the Premises are located changing in any
way the laws for the taxation of deeds of trust or debts secured
by deed of trust for state or local purposes, or the manner of
collecting any such taxes, and imposing a tax (with the
exception of income tax or excise tax), either directly or
indirectly, on this Deed of Trust, the Note or any other
instrument providing security therefor, the Beneficiary shall
have the right to declare the entire Indebtedness, together with
all fees and charges, if any, to be due in full on a date to be
specified by not less than thirty (30) days written notice to be
given to the Grantor; provided, however, that if the Grantor is
permitted by law to pay the whole of such tax in addition to all
other payments required hereunder, and if the Grantor prior to
the specified date does pay such tax and agrees to pay any such
tax when thereafter levied or assessed, then the Indebtedness
shall not be accelerated on the condition that all future tax
payments be made by the Grantor and the condition of such
forbearance by the Beneficiary shall constitute a modification
of this Deed of Trust.
11. Protection of the Lien of the Deed of Trust. If the
Beneficiary or any Trustees shall incur or expend any sums,
including attorneys' fees, whether in connection with any action
or proceeding or not, to sustain the lien of this Deed of Trust
or its priority, or to protect or enforce any of its or their
rights hereunder, or to recover any portion of the Indebtedness,
or for any title examination relating to the title to the
Premises, all such sums shall be added to the Indebtedness, due
on demand with interest at the then current rate of interest
payable on the Note, and shall be deemed to be secured by this
Deed of Trust. In any action or proceeding to foreclose this
Deed of Trust, or to collect any part of the Indebtedness, the
provisions of the law respecting the recovery of costs,
disbursements and allowances shall prevail unaffected by this
covenant; provided, however, that in the event of litigation,
attorneys' fees shall be awarded to the prevailing party.
Notwithstanding the foregoing, the Beneficiary and the Grantor
shall each pay one-half of the cost of any title examination or
lender's policy of title insurance obtained by or for the
benefit of the Beneficiary in connection with closing the
transaction contemplated by this Deed of Trust.
12. Maintenance of the Premises. The Grantor will maintain the
Premises in substantially the same condition and repair as
exists on the date hereof, will not commit or suffer any waste
of the Premises, and will comply with, or cause to be complied
with, all statutes, ordinances and requirements of any
governmental authority relating the Premises. The Grantor will
promptly repair, restore, replace or rebuild any part of the
Premises which may be damaged or destroyed by any casualty or
which may be affected by any condemnation, taking or similar
proceeding, and will complete and pay for any structure at any
time in the process of construction on the Premises. The
Grantor will at all times keep the Premises free and clear of
any mechanics' and/or materialmen's liens; and, without the
written consent of the Beneficiary, which shall not be
unreasonably withheld, the Grantor will not initiate, join in or
consent to any change in any private restrictive covenant,
zoning ordinance, or other public or private restrictions
limiting or defining the uses which may be made of any portion
of the Premises.
13. Eminent Domain. Notwithstanding any taking by eminent
domain, alteration of the grade of any street or other injury to
or decrease in value of the Premises by any public or
quasi-public authority or corporation, the Grantor shall
continue to repay the Indebtedness as required in the Note until
any award or payment shall have been actually received by the
Beneficiary. Upon receipt by the Beneficiary, such payment may
be applied in reduction of the Indebtedness or be paid over
wholly or in part to the Grantor for the purpose of altering,
restoring or rebuilding any part of the Premises which may have
been altered, damaged or destroyed as a result of any such
taking, alteration of grade, or other injury to the Premises, or
for any other purpose satisfactory to the Beneficiary in its
sole discretion; provided, however, that the Beneficiary shall
not be obligated to see to the application of any amount paid
over to the Grantor hereunder. Notwithstanding any provision
herein or in the Note forbidding or limiting deficiency
judgments, and whether or not a deficiency judgment on this Deed
of Trust shall have been sought, recovered or denied, if prior
to receipt by the Beneficiary of such award or payment the
Premises shall have been sold by foreclosure of this Deed of
Trust, the Beneficiary shall have the right to receive a portion
of such award or payment equal to any deficiency due upon foreclosure.
14. Inspection. The Beneficiary and any persons authorized by
the Beneficiary shall have the right to enter and inspect the
Premises at all reasonable times, and if, at any time after an
Event of Default shall have occurred with respect to any of the
terms, covenants or provisions of this Deed of Trust, the Note
or any other Document, the management and maintenance of the
Premises shall be determined by the Beneficiary to be
unsatisfactory, the Grantor shall for the duration of such
default employ as managing agent of the Premises any person or
firm from time to time designated by the Beneficiary, all at the
Grantor's sole cost and expense.
15. Financial Statements. The Grantor will, within ninety (90)
days following the termination of the annual accounting period
adopted by the Grantor in the operation of the Premises, deliver
to the Beneficiary, to the extent applicable (a) a statement in
such reasonable detail as the Beneficiary may request, certified
by the Grantor, of the leases relating to the Premises, if any,
and (b) a statement in such reasonable detail as the Beneficiary
may request, certified by a certified public accountant, or by
the Grantor, of the gross annual income and expenses of the
Premises for such preceding annual accounting period. In
addition, on demand of the Beneficiary, the Grantor will make
available to the Beneficiary copies of any leases of the Premises.
16. Rents and Profits From the Premises. The Grantor will not
collect the rents, issues and profits arising from the Premises
more than one month in advance of the due date (except for boat
slip rentals which may be collected not more than one year in
advance), or assign any part of the present or future rents,
income or profits arising from the Premises without the prior
written consent of the Beneficiary, and any such assignment
without the Beneficiary's consent shall be null and void. In
the event of any default by the Grantor under this Deed of
Trust, the Note or any of the other Documents, for the
Beneficiary or Trustees may enter upon and take possession of
the Premises with or without the appointment of a receiver or an
application therefor and let the same, either in its or their
own name, or in the name of the Grantor, receive the rents,
issues and profits of the Premises under any and all leases of
the Premises and apply the same, after the payment of all
necessary charges and expenses, including reasonable management
fees, as a prepayment of the Indebtedness. All present and
future rents and profits are, in the event of any such default,
hereby assigned to the Beneficiary and upon notice and demand
the Grantor will transfer and assign to the Beneficiary, in a
form satisfactory to the Beneficiary, the lessor's interest in
any lease or leases now or hereafter affecting the whole or any
part of the Premises. The Grantor agrees to execute and
deliver, from time to time, such further instruments as may be
requested by the Beneficiary to confirm the assignment to the
Beneficiary of the present or future leases of the Premises.
17. Ground Lease. If the Grantor's interest in the Premises or
in any substantial part thereof shall be a leasehold estate,the
Grantor covenants and agrees to perform when due all covenants
and agreements set forth in the applicable lease or leases, and
will provide the Beneficiary, within five (5) days after receipt
by the Grantor, with a copy of any notice of default or
termination received by the Grantor from the lessor under the
applicable ground lease or leases.
18. Enforcement of Remedies. The Beneficiary shall have the
right from time to time to enforce any legal or equitable remedy
against the Grantor and to sue for any sums, whether interest,
principal or any installment thereof, taxes, assessments, sewer
rates, water rents, or any installment thereof, or any other
sums required to be paid under the terms of this Deed of Trust,
as such sums become due, without regard to whether or not any
portion of the Indebtedness shall be due, and without prejudice
to the right of the Beneficiary to enforce any appropriate
remedy against the Grantor, including foreclosure, or any other
action, for any existing or previous default.
19. Waivers and Releases. Any failure by the Beneficiary to
insist upon the strict performance by the Grantor of any of the
terms and provisions hereof shall not be deemed to be a waiver
of any of the terms and provisions hereof, and the Beneficiary,
notwithstanding any such failure, shall have the right
thereafter to insist upon the strict performance by the Grantor
of any and all of the terms and provisions of this Deed of
Trust. Neither the Grantor nor any other person now or
hereafter obligated for the payment of the whole or any part of
the Indebtedness shall be relieved of such obligation by reason
of (i) the failure of the Beneficiary to comply with any request
of the Grantor, (ii) the failure of the Beneficiary to take
action to foreclose this Deed of Trust or otherwise enforce any
of the provisions of this Deed of Trust or any of the other
Documents, (iii) the release, regardless of consideration, of
the whole or any part of the security held for the Indebtedness,
or (iv) any agreement or stipulation between any subsequent
owner(s) of the Premises and the Beneficiary extending the time
of payment or modifying the terms of the Note or Deed of Trust,
without first having obtained the consent of the Grantor or such
other person; and regardless of the occurrence of any such
event, the Grantor and all such other persons shall continue to
be liable to make payments hereunder unless expressly released
and discharged in writing by the Beneficiary. Regardless of
consideration and without the necessity for any notice to or
consent by the holder of any subordinate lien on the Premises,
the Beneficiary may release the obligation of anyone at any time
liable for any of the Indebtedness or any part of the security
held for the Indebtedness, resort for the payment of the
Indebtedness to any other security held by the Beneficiary in
such order and manner as the Beneficiary may elect, or extend
the time of payment or otherwise modify the terms of the Note,
this Deed of Trust or any of the other Documents without in any
way impairing or affecting the lien of this Deed of Trust or its
priority over any subordinate lien. The holder of any
subordinate lien shall have no right to terminate any lease
affecting the Premises whether or not such lease is subordinate
to this Deed of Trust.
20. Foreclosure Sale; Assent to Decree and Power of Sale. If
at the maturity of the Indebtedness, however such maturity may
be brought about, default should be made in the payment of the
Indebtedness or any part thereof, subject to any applicable cure
period, the Trustees shall thereupon or at any time thereafter,
at the request of the Beneficiary, declare all the debts and
obligations secured hereby to be at once due and payable, take
possession of the Premises and sell the Premises or any portion
thereof requested by the Beneficiary to be sold (together with
any fixtures or personal property encumbered by this instrument,
which may be sold at the same sale as the real property or in
one or more separate sales, in such order as the person
conducting such sale or sales in his sole discretion may elect),
as an entirety or in parcels, by one sale or by several sales,
at one time or at different times, and with such postponement of
sales as may be deemed by the Trustees to be appropriate,
without regard to any right of the Grantor or any other person
to the marshaling of assets. Such sales shall take place at
public auction, at such time, at such place, and upon such terms
and conditions as the Trustees shall deem appropriate. In the
event the Trustees or Beneficiary elect to institute proceedings
for foreclosure under this Deed of Trust, the Grantor hereby
assents to the passage of a decree for the sale of the Premises
and/or authorizes and empowers the Trustees to sell the
Premises. Once the terms of sale have been complied with the
Trustees shall convey to and at the cost of the purchaser the
Premises so sold, free and discharged of and from all estate,
right, title or interest of the Grantor, legal or equitable, and
upon any sale of the Premises under this Deed of Trust, whether
under the assent to a decree, the power of sale, or by equitable
foreclosure, the proceeds of sale shall be applied (after paying
(i) all expenses of sale, including reasonable attorneys' fees
and a commission to the Trustees making the sale of one percent
(1%) of the amount of the sale or sales, (ii) all taxes and
assessments, rents and prior liens thereon due which the
Trustees or Beneficiary deem it advisable or expedient to pay,
and (iii) all sums advanced as herein provided for, plus
interest) to the payment of the Indebtedness, including without
limitation all interest thereon and all other applicable fees
and charges, if any, to the date of payment; the surplus, if
any, shall be paid to the Grantor or any other person entitled
thereto. Immediately upon the first insertion of any
advertisement or notice of sale with respect to the Premises,
the Grantor shall be liable for all expenses incident to the
advertisement or notice, all court costs and all expenses
incident to any foreclosure proceedings under this Deed of
Trust, including without limitation reasonable attorneys' fees
and a commission on the total amount of the Indebtedness,
principal and interest, equal to one-half percent (1/2%) of the
amount then secured hereby; no payment on account of the
Indebtedness shall be accepted unless accompanied by a tender of
all such expenses, costs and commission. The assent to decree
and power of sale herein granted shall not be deemed to be
exhausted in the event that a foreclosure proceeding is
dismissed before the Indebtedness is paid in full. In the event
of default by any purchaser to go to settlement, or if
settlement does not occur for any other reason, the Trustees
shall have the power to resell the Premises.
21. Tax Stamps. If at any time the United States of America or
any state or territory thereof shall require internal revenue or
other tax stamps to be affixed to the Note (other than in the
nature of income tax), the Grantor will pay the applicable fee,
plus any interest or penalties imposed in connection therewith.
22. Joint and Several Liability. If the Grantor consists of
more than one party, they shall be jointly and severally liable
under this Deed of Trust for the performance of all obligations,
covenants and agreements of the Grantor contained herein.
23. No Exclusive Remedies. The rights, powers, privileges and
discretions of the Beneficiary and Trustees arising under this
Deed of Trust shall be separate, distinct and cumulative;
anything to the contrary notwithstanding, no act of the
Beneficiary shall be construed as an election to proceed under
any one provision of this Deed of Trust to the exclusion of any
other provision.
24. Substitution of Trustees. The Grantor hereby grants to the
Beneficiary, with warranty of further assurances, the
irrevocable power to appoint a substitute trustee or trustees
and to remove any Trustee from time to time acting hereunder.
Such power may be exercised at any time hereafter, with or
without cause, without notice and without specifying any reason
therefor, by filing for record in the office where this Deed of
Trust is recorded a Deed of Appointment. The power of
appointment granted hereunder may be exercised as often and
whenever the Beneficiary deems it advisable, and the exercise of
such power of appointment, no matter how often, shall not be
exhausted. Upon the recordation of any such Deeds of
Appointment, the substitute trustee or trustees so appointed
shall, without any further act, deed or conveyance, become fully
vested with identically the same title and estate in and to the
Premises and with all the rights, powers, trusts and duties of
the original Trustees, as if the substitute trustees were
originally named as Trustees hereunder. Whenever in this Deed
of Trust reference is made to the Trustees, it shall be
construed to mean the trustee or trustees for the time being,
whether original or successors in trust, and all title, estate,
rights, powers, trusts and duties of the Trustees hereunder
shall be in each of the Trustees, so that any action of any one
trustee (original or substitute) shall for all purposes be
considered to be as effective as the action of all Trustees.
25. Subordinate Leases. If the Grantor shall hereafter demise
the Premises or any part thereof by leases subordinate or junior
(either by the date thereof or by the express terms thereof) to
the lien of this Deed of Trust, any such lease shall be subject
to the condition that in the event of any foreclosure sale
hereunder, by virtue of judicial proceedings or otherwise, such
lease shall continue in full force and effect and the tenant
thereunder will, upon request, attorn to and acknowledge the
foreclosure purchaser(s) at such sale as landlords, unless the
Beneficiary or such purchaser(s), or the Trustees, shall, at or
prior to the time of sale or within sixty (60) days thereafter,
notify the tenant in writing to vacate and surrender the leased
premises within ninety (90) days from the date of sale upon
which date the subject lease shall terminate. Any such lease
shall be subject to the further condition that if such lease
shall continue in full force and effect, the tenant shall not be
credited as against such purchasers with any rent prepaid by the
tenant to any party other than the purchaser(s) and allocable to
the period after such sale, except that with respect to the
rental of boat slips, the tenant shall not be credited with any
rent prepaid more than one (1) year in advance by the tenant to
any party other than the purchaser(s).
26. Miscellaneous. This Deed of Trust and the Note secured
hereby, and all other Documents, shall be binding upon the
parties thereto and their respective heirs, executors,
administrators, personal representatives, successors and
assigns, and may not be changed orally, but only by an agreement
in writing and signed by the parties against whom enforcement of
any waiver, change, modification or discharge is sought. The
validity and construction of this Deed of Trust are to be
determined according to the laws of the jurisdiction in which
the Premises are located.
27. Prepayments. Whenever a prepayment shall be made to the
Beneficiary hereunder, from whatever source, all such payments
shall be applied by the Beneficiary to the Indebtedness, in
accordance with the provisions of the Note; such prepayments
shall not relieve the Grantor or any parties otherwise liable
for the payment of the Indebtedness from the obligation to make
periodic payments of principal, interest and/or other charges on
the Note as and when such payments would otherwise be due.
28. Ownership of the Premises. The Premises shall at all times
be owned by the Grantor, both legally and equitably, except with
respect to the interest conveyed to the Beneficiary hereunder.
Without the Beneficiary's prior written consent: (i) the
Premises shall not be the subject matter of any transaction
whereby the legal or equitable title to all or any part of the
Premises shall be transferred to anyone else, except with
respect to subordinate financing approved by the Beneficiary in
writing and the periodic rental of boat slips and the rental of
the fastland portion of the Premises, (ii) no general
partnership interest of the Grantor, if the Grantor is a
partnership, or voting common stock of the Grantor, if the
Grantor is a corporation, shall be sold, transferred, conveyed,
encumbered or assigned to any parties, except that general
partner interest of the Grantor may be sold, transferred or
assigned to an affiliate directly or indirectly related to the
Grantor without the Beneficiary's consent, provided that the
Beneficiary receive prompt notice thereof, and (iii) the
Premises shall not be further encumbered except for such junior
or subordinate financing as the Beneficiary shall specifically
approve in writing, and except for purchase money financing of
equipment to be used or installed solely for or on the Premises.
Subject to the foregoing, if legal or equitable title to the
Premises or any part thereof shall change by any means, then the
Indebtedness shall become immediately due and payable on the
demand of the Beneficiary.
29. Lien Priority. It is understood and agreed that upon
recordation of this Deed of Trust, the lien of this Deed of
Trust is a first lien on the fee simple interest of the property
described herein.
30. Addresses. The address of the Grantor is: c/o Claremont
Management Corporation, Batterymarch Park II, Quincy,
Massachusetts 02169. The address of Richard Rubin, Esq. is
Neuberger, Quinn, Gielen, Rubin & Gibber, P.A., 27th Floor,
Commerce Building, One South Street, Baltimore, Maryland 21202.
The address of the Beneficiary is c/o J.E. Robert Companies,
1650 Tysons Boulevard, Suite 1600, McLean, Virginia 22102.
31. Removal of Liens. The Grantor will keep and maintain the
Premises free and clear of all mechanics' and materialmen's and
from all federal, state and local tax liens for taxes which are
in default and if any such liens are filed against the Premises,
the Grantor shall cause the same to be released completely of
record (either by payment and discharge or by the posting of
substitute collateral therefor in accordance with applicable
laws) within twenty (20) days of the filing therefor.
32. Deeds of Dedication, Subdivision, Easement, Etc. The
Beneficiary shall cause the Trustees to join with the Grantor in
executing deeds of dedication, deeds of resubdivision and
deeds of easement for the resubdivision and development of the
Premises into lots or parcels and for the dedication of
streets and roads for public use, and the granting of easements or
rights of way, as such deeds and grants shall be approved by the
Beneficiary in its sole but reasonable discretion.
33. Environmental Matters.
(i) No part of the Premises is being or has been or will be
used by any person or entity for the disposal of wastes or
hazardous or toxic wastes, substances or materials of any kind
(collectively "Hazardous Materials"), or as a landfill or site
for the storage of Hazardous Materials, or as a site for the
discharge into the environment of Hazardous Materials, nor have
any Hazardous Materials from the Premises been disposed of off
site. No part of the Premises has been listed or proposed for
listing on the National Priorities List established by the
United States Environmental Protection Agency, or any other list
purporting to identify properties posing the threat of existence
of pollution or contamination due to the presence of Hazardous
Materials. The Grantor hereby agrees to indemnify and hold the
Beneficiary harmless from and against any and all damages,
obligations, liabilities, claims, costs and expenses of every
kind and nature whatsoever, including without limitation
attorneys' fees, incurred by or made against the Beneficiary by
virtue of any part of the Premises being or having been used by
any person or entity for the disposal of Hazardous Materials, or
as a site for the discharge into the environment of Hazardous
Materials, or by virtue of any Hazardous Materials from the
Premises having been disposed of off site; provided, however,
that the foregoing indemnification shall be limited to acts,
events and/or conditions occurring or arising from and after the
date on which the Grantor became the owner of the Premises.
This indemnification shall remain in full force and effect
forever, and shall survive payment of the Note.
(ii) In the event the Premises contain asbestos, the Grantor
agrees that prior to the commencement of any demolition the
Grantor shall remove and dispose of, or cause the removal and
disposal of, such asbestos in accordance with all applicable
federal, state and local laws, rules and regulations. Without
limiting any other indemnification or other provision of this
Deed of Trust, the Grantor agrees to indemnify and hold the
Beneficiary harmless from and against any and all damages,
obligations, liabilities, claims, costs and expenses of every
kind and nature whatsoever, including, without limitation,
attorneys' fees, incurred by or made against the Beneficiary by
virtue of the Grantor's failure to remove and dispose of
asbestos as set forth herein.
34. Relationship of the parties. It is expressly understood
and agreed that the Beneficiary shall not be construed or held
to be a partner, joint venturer or associate of the Grantor.
The relationship between the parties hereto is and shall at
all times remain that of creditor and debtor.
35. Captions. The captions of the paragraphs of this Deed of
Trust are for the purpose of convenience only and are not
intended to be a part of this Deed of Trust and shall not be
deemed to modify, explain, enlarge or restrict any of the
provisions hereof.
36. Further Assurances. The Grantor shall do, execute,
acknowledge and deliver, at its sole cost and expense, any and
all such further acts, deeds, conveyances, mortgages,
assignments, estoppel certificates, notices of assignment,
transfers and assurances as the Beneficiary may reasonably
require from time to time in order to better assure, convey,
assign, transfer and confirm unto the Beneficiary, the
rights now or hereafter intended to be granted to the Beneficiary
under this Deed of Trust.
37. Multiple Obligations. If this Deed of Trust shall secure
multiple notes or indebtedness', it is understood and agreed
that each such note or indebtedness shall be co-equal and
coordinate as to its right of payment, and each shall be secured
hereby on a pro rata basis, without any of them having any
preference or priority over the others.
IN WITNESS WHEREOF, the Grantor has executed this Deed of Trust
or has caused the same to be executed by its representatives
thereunto duly authorized.
WITNESS OR ATTEST: HENDERSON'S WHARF MARINA, L.P.
a Delaware limited partnership
By: Henderson's Wharf Development
Corporation,
a Delaware corporation, its
sole general partner
[SEAL]
By______________________________
Terrence P. Sullivan,
President
County of _______________ )
) SS:
State of Maryland )
Before me, a Notary Public in and for the jurisdiction
aforesaid, personally appeared this date TERRENCE P. SULLIVAN,
personally well known (or satisfactorily proven) to me to be the
president of Henderson's Wharf Development Corporation, which is
the sole general partner of HENDERSON'S WHARF MARINA, L.P., a
Delaware limited partnership, who, being by me first duly sworn,
did acknowledge that he, being authorized so to do, executed the
foregoing and annexed Instrument dated ________________, in the
name and on behalf of said corporation, which is the general
partner of HENDERSON'S WHARF MARINA, L.P., as its free act and
deed for the uses and purposes therein contained.
WITNESS my hand and official seal this day of
______, 1996 .
Notary Public
[Notarial Seal]
My Commission Expires
THIS IS TO CERTIFY that the within instrument was prepared by
or under the supervision of the undersigned, an attorney duly
admitted to practice before the Court of Appeals of Maryland.
_________________
Leslie A Kaplan, Esq.
ASSIGNMENT OF LEASES AND RENTS
THIS ASSIGNMENT OF LEASES AND RENTS is made this 27th day of
February, 1996, by HENDERSON'S WHARF MARINA, L.P. , a Delaware
limited partnership located at c/o Claremont Management
Corporation, Batterymarch Park II, Quincy, Massachusetts 2169
(the "Borrower"), to HWFP, INC., a Maryland corporation, whose
address is c/o J.E. Robert Companies, 1650 Tysons Boulevard,
Suite 1600, McLean, Virginia 22102 (the "Lender");
Borrower is indebted to Lender in the amount of Two Hundred
Twenty-five Thousand Dollars ($225,000) (the "Loan"), evidenced
by a Note made by Borrower dated as of the date hereof (together
with all renewals, extensions, modifications, and substitutions
thereof or therefor, the "Obligation"), and secured by, among
other things, a deed of trust from Borrower to trustees for the
benefit of Lender dated as of the date hereof (the "Deed of
Trust"), which Deed of Trust is to be a first lien upon the
property commonly known as Henderson's Wharf Marina, which
property is more fully described in Exhibit "A" hereto (the
"Premises").
As a condition of the granting of the Loan, Borrower has agreed
to assign to Lender all of the rents, issues and profits,
including, without limitation, amounts received from the
periodic rental of boat slips (herein collectively referred to
as "Rents") of and from the Premises, as additional security for
the payment of the Loan.
Therefore, in consideration of the granting of the Loan by
Lender to Borrower, Borrower does hereby sell, pledge, assign,
transfer and set over unto Lender any and all leases, occupancy
agreements, subleases, franchises, contracts, licenses,
agreements and other understandings, heretofore or hereafter
made, regardless of whether written or oral, and any extensions
or renewals thereof, of or relating to the Premises or any part
thereof (the "Assigned Leases"), and all of the Rents and other
proceeds of and from the Premises, including, but not limited
to, any insurance proceeds heretofore or hereafter paid by
reason of any use or occupancy loss, business interruption or
interruption of rental payments under the Assigned Leases or any
part thereof (herein referred to as the "Rental Insurance Proceeds").
This constitutes a present assignment of the Assigned Leases,
Rents and other proceeds described above. Nevertheless, so long
as no Event of Default (as defined in the Deed of Trust) has
occurred under the terms of the Deed of Trust, or under any
other instruments or documents now or hereafter executed or
delivered in connection with the Loan (collectively, the "Loan
Documents"), Borrower shall have a license to collect, receive
and apply for its own account all Rents accruing by virtue of
the Assigned Leases or from or out of the Premises or
any part thereof, and deliver proper receipts and acquittances
therefor.
Immediately upon the occurrence of an Event of Default under
the Deed of Trust or any of the other Loan Documents the license
hereinbefore referred to shall terminate and this Assignment
shall remain operative and in full force and effect upon the
occurrence and during the continuance of any such default, upon
the following terms and conditions:
1. In furtherance of the foregoing Assignment, Borrower hereby
authorizes Lender by its employees or agents, at its option,
after the occurrence of an Event of Default as aforesaid, to
enter upon the Premises and to demand, collect, sue for, attach,
levy, recover, receive, compromise and adjust, make, execute and
deliver proper receipts and releases for and in the name of
Borrower or in its own name as Assignee, (a) Rents accrued but
unpaid and in arrears at the date of such default, as well as
Rents thereafter accruing and becoming payable; and to this end,
Borrower further agrees that it will facilitate in all
reasonable ways Lender's collection of Rents and will, upon
request by Lender, execute a written notice to the tenants of
Borrower (including, without limitation, commercial tenants and
persons renting boat slips) directing the tenant- shareholders
and such other tenants to pay Rents to Lender, and; (b) all
Rental Insurance Proceeds paid or thereafter to be paid by
reason of any use or occupancy loss, business interruption or
interruption of rental payments under the Assigned Leases or any
part thereof, or any leases, subleases, franchises, contracts,
licenses, agreements or other understandings thereafter entered
into affecting the Premises or any part thereof.
2. Borrower also hereby authorizes Lender upon such entry, at
its option, to take over and assume the management, operation
and maintenance of the Premises, including without limitation,
the right to: (i) cause the Premises to be operated, maintained
and repaired, and in connection therewith to hire and pay
security personnel, contractors and other maintenance and
operating personnel, and enter into contracts and agreements
with contractors, materialmen and suppliers; (ii) purchase
public liability, fire and extended coverage insurance, and any
other types of insurance coverage; (iii) hire and engage a
managing agent, and engineers, architects, accountants and
attorneys; (iv) institute and prosecute suits for the collection
of Rents; (v) lease any part of the Premises; and (vi) pay all
taxes, insurance premiums, wages, salaries, commissions, fees,
expenses and charges of every kind and amount arising out of or
in connection with the foregoing (collectively the "Expenses");
all to the same extent as Borrower might do, Borrower hereby
releasing all claims against Lender arising out of such
management, operation and maintenance, except claims resulting
from Lender's gross negligence or willful misconduct.
3. Lender shall, after payment of all Expenses and after the
accumulation of a reserve to meet taxes, assessments, water and
sewer rents, and fire and liability insurance premiums in requisite
amounts, credit the net amount of income received by
it from the Premises by virtue of this Assignment to any amounts
due and owing to it by Borrower under the terms of the Deed of
Trust, the Obligation secured thereby and the other Loan Documents,
but the manner of this application of such net
income and what items shall be credited shall be determined in the
sole discretion of Lender. Lender shall not be accountable for
more money than it actually receives from the Premises.
4. Irrespective of the existence or occurrence of a default
under the Deed of Trust or any of the other Loan Documents,
Borrower hereby covenants and warrants to Lender that it has not
executed for the benefit of any person or corporation (other
than Lender) any other assignment or pledge of Rents of the
Premises, nor any assignment or pledge of its interest in any
lease pertaining to the Premises. Borrower also hereby
covenants and agrees not to make any further assignment or
pledge of Rents of the Premises or its interest in any lease
therein (except as may otherwise be agreed to by Lender in
writing), not to collect Rents of the Premises more than one (1)
month in advance (except with respect to the rental of boat
slips, which rent may not be collected more than one (1) year in
advance), and not to effect any modification of any leases nor
do any other act which would destroy or impair the benefits of
Lender under this Assignment.
5. Any demand by Lender of any tenants of Borrower for Rents
pursuant to this Assignment shall be sufficient authorization
for said tenants to pay to Lender Rents owing by them pursuant
to their leases, and it shall not be necessary for Lender to
obtain from Borrower any further authorization or direction to
tenants to pay Rents to Lender, nor shall it be required of
Lender to establish to the satisfaction of the tenants that the
prerequisite default exists.
6. Lender shall not be liable for any loss sustained by
Borrower resulting from Lender's failure to let the Premises
after default or from any other act or omission of Lender in
managing the Premises after default, except for losses resulting
from Lender's gross negligence or willful misconduct. Nor shall
Lender be obligated to perform or discharge, nor does Lender
hereby undertake to perform or discharge, any obligation, duty
or liability under any Assigned Leases or under or by reason of
this Assignment, and Borrower shall and does hereby agree to
indemnify Lender for and to hold Lender harmless from and
against any and all loss, cost, damage, expense,
claim or liability which may or might be incurred under any
Assigned Lease or under or by reason of this Assignment, and
from and against any and all claims and demands whatsoever which
may be asserted against Lender by reason of any alleged
obligations or undertakings on its part to perform or
discharge any of the terms covenants or agreements contained in any
Assigned Lease.
Should the Lender incur any such liability under any Assigned
Lease, or under or by reason of this Assignment, or in defense
of any such claim or demand, the amount thereof, including
costs, expenses and reasonable attorneys' fees, shall be secured
hereby and Borrower shall reimburse Lender therefor immediately
upon demand. It is further understood that this Assignment
shall not operate to place responsibility for the control, care,
management or repair of the Premises upon Lender, nor for the
carrying out of any of the terms and conditions in any Assigned
Lease, nor shall it operate to make Lender responsible or liable
for any waste committed on the Premises by the shareholders,
tenants, occupants or any other person, or for any dangerous or
defective condition of the Premises, or for any negligence in
the management, upkeep, repair or control of the Premises,
resulting in loss or injury or death to any shareholder, tenant,
occupant, licensee, employee or stranger.
7. It is not the intention of the parties hereto that any entry
by Lender upon the Premises under the terms of this Assignment
shall render Lender a "mortgagee in possession" in contemplation
of law, except at the option of Lender.
8. Nothing herein shall be construed as a limitation upon or
variance of the terms, conditions, covenants and agreements as
contained in the Deed of Trust, the Obligation or the other Loan
Documents, and, in particular, the rights of Lender in case of
default as therein set forth shall not be, in any manner, waived
by this Assignment or the collection of Rents hereunder.
9. This Assignment shall remain in full force and effect as
long as any sums due under the Obligation, the Deed of Trust or
any other Loan Document shall remain unpaid in whole or in part.
10. Whenever used, the singular number shall include the
plural, the plural the singular, and the use of any gender shall
be applicable to all genders.
11. The provisions of this Assignment shall be binding upon
Borrower and its legal representatives, successors and assigns,
and shall inure to the benefit of Lender and any subsequent
holder of the Obligation. This Assignment shall be governed by
the laws of the state in which the Premises are located without
giving effect to the principles of conflicts of laws. This
Assignment may not be modified or amended, except by a written
instrument signed by the person against whom such modification
or amendment is sought to be enforced.
IN WITNESS WHEREOF, Borrower has hereunto executed this
Assignment.
WITNESS OR ATTEST: HENDERSON'S WHARF MARINA, L.P.
a Delaware limited partnership
[CORPORATE SEAL]
By: Henderson's Wharf Development Corporation,
a Delaware corporation, its sole general
partner
By:
Terrence P. Sullivan,
President
County of _______________ )
) SS:
State of Maryland )
Before me, a Notary Public in and for the jurisdiction
aforesaid, personally appeared this date TERRENCE P.SULLIVAN,
personally well known (or satisfactorily proven) to me to be the
president of Henderson's Wharf Development Corporation, which is
the sole general partner of HENDERSON'S WHARF MARINA, L.P., a
Delaware limited partnership, who, being by me first duly sworn,
did acknowledge that he, being authorized so to do, executed the
foregoing and annexed Instrument dated _________________, in the
name and on behalf of said corporation, which is the general
partner of HENDERSON'S WHARF MARINA, L.P., as its free act and
deed for the uses and purposes therein contained.
WITNESS my hand and official seal this day of
_______________, 199_ .
Notary Public
[Notarial Seal]
My Commission Expires
THIS IS TO CERTIFY that the within instrument was prepared by
or under the supervision of the undersigned, an attorney duly
admitted to practice before the Court of Appeals of Maryland.
_________________
Leslie A Kaplan, Esq.
EXHIBIT A
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 478898
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 18675093
<DEPRECIATION> 3267294
<TOTAL-ASSETS> 15932204
<CURRENT-LIABILITIES> 0
<BONDS> 6123084
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 15392204
<SALES> 0
<TOTAL-REVENUES> 2909744
<CGS> 0
<TOTAL-COSTS> 2630434
<OTHER-EXPENSES> (3344)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 541643
<INCOME-PRETAX> (258989)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (258989)
<EPS-PRIMARY> (15.67)
<EPS-DILUTED> 0
</TABLE>
