-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, J9+2YRLyjYWISxbBmgtDC3cHCzJ0zWmE3tQHU8E+PyJiFRGGe4quKCYea3zzB1iN qYKq0Q9vuNA7I1Y8veMe2A== 0000857004-97-000015.txt : 19970430 0000857004-97-000015.hdr.sgml : 19970430 ACCESSION NUMBER: 0000857004-97-000015 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 14 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970331 DATE AS OF CHANGE: 19970408 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HISTORIC PRESERVATION PROPERTIES 1990 LP TAX CREDIT FUND CENTRAL INDEX KEY: 0000857004 STANDARD INDUSTRIAL CLASSIFICATION: 6500 IRS NUMBER: 043066191 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-19257 FILM NUMBER: 97574620 BUSINESS ADDRESS: STREET 1: BATTERYMARCH PARK II CITY: QUINCY STATE: MA ZIP: 02169 BUSINESS PHONE: 6174721000 MAIL ADDRESS: STREET 1: C/O HISTORIC PRESERVATION PROPERTIES STREET 2: ONE BATTERYMARCH PARK II CITY: QUINCY STATE: MA ZIP: 02169 10-K 1 10-K HP90 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
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 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.
EX-99.1 2 EXHIBITS TO 10K 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 EX-99.2 3 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 EX-99.3 4 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: ) EX-99.4 5 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) EX-99.5 6 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. EX-99.6 7 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 EX-99.7 8 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 EX-99.8 9 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 EX-99.9 10 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 EX-99.10 11 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 EX-99.11 12 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. EX-99.12 13 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 EX-27 14
5 12-MOS DEC-31-1996 DEC-31-1996 478898 0 0 0 0 0 18675093 3267294 15932204 0 6123084 0 0 0 0 15392204 0 2909744 0 2630434 (3344) 0 541643 (258989) 0 0 0 0 0 (258989) (15.67) 0
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