-----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, QCmWVIP8HHcaFkZJA9lcQ+xBcuql4lYvC06Kt2k8ryMN8AaClGMj23bpbMgDn6el F+7GbpeyBthuNDITvtNA/g== 0000857004-99-000003.txt : 19990326 0000857004-99-000003.hdr.sgml : 19990326 ACCESSION NUMBER: 0000857004-99-000003 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990325 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HISTORIC PRESERVATION PROPERTIES 1990 LP TAX CREDIT FUND CENTRAL INDEX KEY: 0000857004 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 043066191 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: SEC FILE NUMBER: 000-19257 FILM NUMBER: 99573141 BUSINESS ADDRESS: STREET 1: C/O HISTORIC PRESERVATION PROPERTIES STREET 2: 45 BROAD STREET CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 6174225815 MAIL ADDRESS: STREET 1: C/O HISTORIC PRESERVATION PROPERTIES STREET 2: 45 BROAD STREET CITY: BOSTON STATE: MA ZIP: 02109 10-K 1 10-K FOR THE PERIOD ENDING 12/31/98 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------------------------- FORM 10-K |X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR FISCAL YEAR ENDED DECEMBER 31, 1998 OR |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) For the transition period from ______ to _______ . Commission File Number: 3331778 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.) 45 Broad Street, Boston, Massachusetts 02109 - ------------------------------------------ ----- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (617) 338-6900 -------------- Securities registered pursuant to Section 12(b) of the Act: (Title of class) None Securities registered pursuant to Section 12(g) of the Act: (Title of class) None Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be 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. Yes |X| No |_|. 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. Yes |X| No |_|. HISTORIC PRESERVATION PROPERTIES 1990 L.P. TAX CREDIT FUND 1998 FORM 10-K ANNUAL REPORT TABLE OF CONTENTS Sequential Page Page No. PART I Item 1 Business K-3 4 Item 2 Properties K-7 8 Item 3 Legal Proceedings K-7 8 Item 4 Submission of Matters to a Vote of Unit Holders K-7 8 Part II Item 5 Market for Registrant's Units and Related Unit Holder Matters K-8 9 Item 6 Selected Financial Data K-9 10 Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations K-10 11 Item 8 Financial Statements and Supplementary Data K-13 14 Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure K-13 14 Part III Item 10 Directors and Executive Officers of the Registrant K-14 15 Item 11 Executive Compensation K-15 16 Item 12 Unit Ownership of Certain Beneficial Owners and Management K-15 16 Item 13 Certain Relationships and Related Transactions K-16 17 Part IV Item 14 Exhibits, Financial Statement Schedules and Reports on Form 8-K K-17 18 Signatures K-25 26 Supplemental Information K-26 27 K-2 DOCUMENTS INCORPORATED BY REFERENCE Part of the Form 10-K Document into which Incorporated Incorporated by Reference I Prospectus of the Registrant dated March 30, 1990 (the "Prospectus"). Supplement No. 1 to the Prospectus dated August 1, 1990. Supplement No. 2 to the Prospectus dated December 3, 1990. III The Prospectus. 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 for which the cost of rehabilitating acquired properties qualified 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 is Boston Historic Partners II Limited Partnership (the General Partner), 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 (Sullivan) and Portfolio Advisory Services II, Inc. (PAS II) a corporation whose controlling shareholder, director and president is Sullivan. The Partnership does not have any employees. 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 agreement expired on June 30, 1998. Effective July 1, 1998, HPP'90 engaged Gunn Financial, Incorporated (GFI) an unaffiliated Massachusetts corporation, to provide accounting, asset management and investor services. GFI provides such services for an annual management fee of $36,000, plus reimbursement of all its costs of providing these services. The agreement expires the earlier of June 30, 2006 or upon the disposition of the Ventures' properties, as defined. The Partnership's only business is investing in real properties for which the cost of rehabilitating acquired properties qualified for Rehabilitation Tax Credits and operating such properties. 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, 1998 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 which was 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, 153 indoor parking spaces and a 38 room inn. The building contains 137 residential units, 129 of which are owned by the Building Venture and 8 of which are owned by unrelated parties as of December 31, 1998. 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. Lease-up of the residential units commenced in January 1991 and the inn opened in May 1991. 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. The overall management and control of the business and affairs of the Building Venture are solely vested in Henderson's General Partners. On February 1, 1991, the Building Venture and the Marina Venture (discussed below) entered into long-term management agreements and an inn lease (Contracts) which were scheduled to expire on December 31, 1993, as well as a consulting agreement (Consulting Agreement) with HMI. The Consulting Agreement, which, expired on December 31, 1991, required the Building Venture to pay HMI certain fees, the commitment for which survived the December 31, 1991 expiration date of the Consulting Agreement and the termination of all other agreements with HMI. In 1993, the Ventures terminated the Contracts with, and commitments under the Consulting Agreement to HMI. 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. The Settlement Payments may be prepaid, as defined in the agreement, without penalty. As of December 31, 1998 and 1997, unpaid settlement payments included in accrued expenses and other liabilities totaled $106,280 and $144,928, respectively. In accordance with the termination of all HMI contracts, effective January 1, 1995 HMI withdrew from the Building Venture as a limited partner and was replaced by HWDC. 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 a 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. 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 refinancing 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. Rehabilitation Tax Credits generated by the Building Venture and previously allocated to HPP'90's Limited Partners totaled $3,174,059 since inception. As of December 31, 1996, 100% of all Rehabilitation Tax Credits were fully vested. On March 17, 1998, the Building Venture exchanged a condominium unit and parking spaces with an unrelated party in return for that unrelated party's condominium unit, parking spaces and $135,000. The transaction resulted in net cash proceeds of $122,843 after closing costs. On November 3, 1998, the Building Venture purchased a condominium unit and parking space owned by an unrelated party for a purchase price of $110,000. The Building Venture's investment property competes in the residential rental real estate and hotel markets. The Building Venture's apartment units generally compete on the basis of location, price, square footage and amenities with approximately six other similar complexes in the Fells Point area. The Building Venture's apartment units also compete with the local single family home market, which in recent years has become more competitive due to the increased availability of low mortgage rates. The Building Venture's inn generally competes with the smaller hotels and bed and breakfast establishments on the basis of room rates, location and amenities. There are approximately three other competitors for the inn in the Fells Point area, with the number of available rooms for each competitor ranging from four (4) to eighty-eight (88). As of December 31, 1998 and 1997, the apartment units had an economic occupancy rate of approximately 96% and 97%, respectively. The average occupancy for the inn for the years ended December 31, 1998 and 1997 was 73% and 71%, 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). Henderson's Wharf Marina, L.P. (the Marina Venture) is a Delaware limited partnership which was formed on July 20, 1990 to acquire a 1.92 acre parcel of land together with a 256-slip marina which is adjacent to the Building Venture's property. The Marina Venture owns the fee interest in the property. The Marina Venture purchased the property for $1,266,363 which included seller financing of $1,187,500. 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 above. 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. 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. 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. 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. 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 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 bore interest at 7.50%, was scheduled to mature in March 2006, and required 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%, and HWDC's general partnership interest increased to 2%. On September 30, 1997, the Building Venture advanced $200,000 to the Marina Venture. The Marina Venture then settled in full the promissory note payable to HWFP. The Marina Venture had operated a minimal number of its 256 slips from 1991 to 1995 due to significant repairs necessary to be fully operational. During 1998, 1997 and 1996, the Marina Venture added $282,791, $33,727 and $23,049, respectively, of utility, safety and other improvements increasing the number of fully operational slips to 256. Substantial repairs are still needed to maintain the Marina Venture's land which provides parking to the Marina and Inn. The Marina Venture estimates the cost of replacing the bulkhead to retain the land to be in excess of $2,300,000. The Partnership anticipates that capital resources to fund the repairs are likely to be provided by additional contributions to the Partnership. Included in escrow deposits as of December 31, 1998, is $404,681 that the Partnership has reserved for future capital improvements. The Marina Venture competes with approximately seven other marinas located in the inner harbor of Fells Point. The marinas generally compete on the basis of slip fee rates (seasonal and year round), marina services and amenities. The Marina Venture has no marina services and offers minimum boating amenities. Item 2. Properties. See Item 1 above. Item 3. Legal Proceedings. At December 31, 1998, the Partnership and the Ventures are not party to, to the best knowledge of the General Partner, any material pending legal proceedings. In 1997, the Building Venture and the condominium association to which it belongs had filed suit against one unit owner for failure to pay condominium assessments and nuisance and the unit owner had filed a counterclaim against the Building Venture, the condominium association, and other third parties for alleged breach of contract and related counts. On November 3, 1998, the Building Venture, the condominium association and other third parties settled the lawsuits with the unit owner. As part of the settlement, the Building Venture paid $110,000 to purchase the condominium unit and parking space, as well as a $65,000 additional payment. 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 established public trading market for the Units and no such market is expected to develop. Trading in the Units is limited and sporadic and occurs solely through private transactions. (b) As of March 18, 1999, 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 certain 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, 1998, 1997 and 1996, no distributions of Cash Flow or Sale or Refinancing Proceeds were paid or accrued to the Limited Partners. Item 6. Selected Financial Data.
1998 1997 1996 1995 1994 ------------------------------------------------------------ Revenues $ 3,656,389 $ 3,261,261 $2,909,744 $2,769,347 $2,501,562 Net Income (Loss) $ 344,889 $ 211,825 $ (258,989)$ (359,021) $ (667,504) Net Income (Loss) per unit of Investor Limited Partnership Interest based on Units outstanding $ 20.87 $ 12.82 $ (15.67) $ (21.72) $ (40.39) Total Assets as of December 31, $ 15,469,324 $15,224,121 $15,392,204 $15,483,025 $15,849,184 Long Term Debt as of December 31, $ 5,619,134 $ 5,767,197 $ 6,123,084 $ 5,590,418 $5,590,418 Cash Distributions Per weighted average Unit outstanding $ 0 $ 0 $ 0 $ 0 $ 0 Rehabilitation Tax Credit per Unit $ 0 $ 0 $ 63.94 $ 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, 1998 the Partnership had invested an aggregate of $12,461,719 in the Building and Marina Ventures. 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, 1998, the Ventures and HPP'90 had cash and cash equivalents, excluding security deposit cash, of $400,555 and $139,743, respectively. HPP'90's cash and cash equivalents are used primarily to fund general and administrative expenses of running the public fund. The Venturers' cash and cash equivalents are used to fund operating expenses and debt service of the properties. In addition, to the extent available, the Building Venture distributes cash to HPP'90 to fund general and administrative expenses of managing the public fund and to fund reserves for the capital needs of the Ventures. For the years ended December 31, 1998, 1997 and 1996, the Building Venture distributed $1,159,000, $501,000, and $203,000, respectively, to HPP'90. Within the next several years, significant repairs are needed to maintain the Marina Venture's land which provides parking to the marina and inn. The Marina Venture estimates the cost of repairs to maintain the land to be in excess of $2,300,000. The Partnership anticipates that capital resources to fund the repairs are likely to be provided by additional contributions to the Partnership. Included in the escrow deposits as of December 31, 1998, is $404,681 that the Partnership has reserved for future capital improvements. At December 31, 1998, the Ventures have entered into contracts for various building improvements and furniture and equipment purchases totaling approximately $382,300 and has made deposits on such contracts of approximately $141,200. 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. No distributions to the partners of HPP'90 are permitted until all settlement payments are paid in full. The Settlement Payments may be prepaid, as defined in the agreement, without penalty. As of December 31, 1998 and 1997, unpaid Settlement Payments included in accrued expenses and other liabilities totaled $106,280 and $144,928, respectively. On March 17, 1998, the Building Venture exchanged a condominium unit and parking spaces with an unrelated party in return for that unrelated party's condominium unit, parking spaces and $135,000. The transaction resulted in net cash proceeds of $122,843 after closing costs. On November 3, 1998, the Building Venture purchased a condominium unit and parking space owned by an unrelated party for a purchase price of $110,000. As mentioned in Item 1, on February 27, 1996, the Building Venture obtained financing of $6,000,000 at 7.85% which requires monthly principal and interest payments totaling $49,628 based on a 20 year amortization. The deed of trust note matures in March 2016, however, 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. Also as mentioned in Item 1, 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 bore interest at 7.50%, originally matured on March 15, 2006, and required monthly principal and interest payments in the amount of $2,086. On September 30, 1997, the Building Venture loaned the Marina Venture $200,000 and the Marina Venture settled in full the remaining outstanding principal balance of $212,532 and all accrued interest due under the promissory note payable to HWFP. HPP'90's short-term liquidity depends upon its ability to receive distributions from the Building Venture the need to and make contributions to the Marina Venture to maintain the land which provides parking to the marina and inn. 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. The short-term liquidity of the Marina Venture depends on its ability to generate sufficient rental income to fund operating expenses. HPP'90 has advanced approximately $918,000 to the Marina through December 31, 1998 to fund operations. It is not expected that the Marina Venture will generate sufficient short-term liquidity to repay advances made by HPP'90. 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 generated net income under generally accepted accounting principles of $344,889 in 1998 which includes depreciation and amortization of $475,872. The Building Venture was fully operational during the entire year. The Marina Venture had operated a minimal number of its 256 slips from 1991 to 1995 due to significant repairs necessary to be fully operational. During 1998, 1997 and 1996, the Marina Venture added $282,791, $33,727 and $23,049, respectively, of utility, safety and other improvements increasing the number of fully operational slips to 256. However, other substantial repairs are still needed to maintain the marina land that provides parking to the marina and inn. The results of the Partnership's operations in future years should be comparable to 1998 numbers provided the Building Venture is able to maintain greater than 90% economic 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. The Apartments have achieved stabilized occupancy with economic occupancy rates of 96%, 97% and 95% for the years 1998, 1997 and 1996, respectively. Management is projecting economic occupancy for the Apartments to be approximately 95% as well as an approximately 3% increase in rental rates for calendar year 1999. Management expects economic occupancy to remain around 95% and rental rates to increase between 3% to 5% in future years after 1999. The average occupancy of the Inn for the years 1998, 1997 and 1996 was 73%, 71%, and 71%, respectively. Management is projecting Inn occupancy of 73%, as well as a 5% increase in the average daily room rate for calendar year 1999. The Inn occupancy in future years is expected to stay at the same level, absent any significant adverse market conditions or increase in existing market competition. Management expects the Inn's average daily room rate to increase between 3% to 5% in future years after 1999. The Partnership recorded net income of approximately $345,000 for the year ended December 31, 1998, as compared to net income of approximately $212,000 for the year ended December 31, 1997. This favorable increase in net income is primarily due to an increase in revenue of approximately $395,000 and a decrease in interest expense of approximately $24,000, offset by an increase in expenses of approximately $286,000. The increase in revenue is due to increases of approximately 13% in average daily room rates at the Inn, approximately 6% in rental rates at the Apartments and a slight increase in occupancy at the Inn. The decrease in interest expense in 1998, compared to 1997, is due to the settlement of the Marina promissory note payable, which was paid in full in September of 1997, and also the amortization of the Building Venture's mortgage note payable. Expenses increased in 1998, compared to 1997, due to increases in other operating expenses, payroll services and management fees, offset by a decrease in depreciation and amortization. Other operating expenses increased mainly due to increased food and beverage activity at the Inn, the settlement payment of $65,000 to settle a lawsuit (see Item 3), and repair and maintenance expenditures at the Inn, Apartments and Marina. Payroll services increased due to additional staffing at the Ventures' and management fees, which are based on gross receipts, increased as a result of the increased revenues. Depreciation and amortization decreased because the Building Venture had fully depreciated its furniture and fixtures in the second quarter of 1998. The Partnership recorded net income of approximately $212,000 for the year ended December 31, 1997, an increase of approximately $471,000, compared to a net loss of approximately $259,000 for the year ended December 31, 1996. The increase in net income in 1997, compared to 1996, is attributed to an increase in income of approximately $350,000 and decreases in expenses of approximately $52,000 and interest expense of approximately $71,000. The increases in income in 1997, compared to 1996, are primarily due to the increased room, rental and parking rates at both the Inn and Apartments and a slight increase in occupancy at the apartments and Marina. Both the average daily rate for inn rooms and apartment rental income rates increased approximately 7% in 1997, compared to 1996. Management fees, which were based on gross receipts, increased in 1997 compared to 1996 due to the increase in revenue. Interest expense decreased in 1997, compared to 1996, due to the amortization of the loan balances and the settlement of the marina debt in September 1997. As of February 27, 1996, the Partnership no longer records minority interest due to the redemption of HWFP's 50% limited partnership interest in the Marina Venture. Inflation and Other Economic Factors Recent economic trends have kept inflation relatively low although the Partnership cannot make any predictions as to whether recent trends will continue. The assets of the Partnership are highly leveraged in view of the fact that the Building Venture is subject to a substantial mortgage debt as of December 31, 1998. 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. Year 2000 Issues The Partnership and the Ventures have analyzed the effect of the Year 2000 on their respective financial and computer systems and have incorporated and/or expect to have incorporated the necessary modifications to avert any negative consequences. The Partnership does not anticipate Year 2000 issues to have any material effect on its operations or the operations of the Ventures, or incur substantial costs to address Year 2000 issues. 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 52 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, 52, 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, 1998, 1997 and 1996. No reimbursements were made for the years ended December 31, 1998, 1997 or 1996. For the year ended December 31, 1998, the Partnership allocated approximately $676 of taxable income to the General Partner. See Note 5 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, 1999 (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, 1999. 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 5 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, 1998, 1997 and 1996. PART IV Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K. (a) The following documents are filed as part of this report: 1. Financial Statements - The Financial Statements listed on the accompanying Index to Financial Statements and Schedule are filed as a part of this Annual Report. 2. Financial Statement Schedules - The Financial Statement Schedules listed on the accompanying Index to Financial Statements and Schedules are filed as a part of this Annual Report. 3. Exhibits 3(a) Certificate of Limited Partnership of Historic Preservation Properties 1990 L.P. Tax Credit Fund dated as of September 29, 1989, (filed as exhibit 3A to the Partnership's Registration Statement on Form S-11, File No. 33-31778, and incorporated herein by this reference). 3(b) Certificate of Amendment of Historic Preservation Properties 1990 L.P. Tax Credit Fund dated as of October 23, 1989, (filed as exhibit 3C to the Partnership's Registration Statement on Form S-11, File No. 33-31778, and incorporated herein by this reference). 3(c) Amended and Restated Agreement of Limited Partnership of Historic Preservation Properties 1990 L.P. Tax Credit Fund dated as of March 30, 1990, as currently in effect, other than amendments thereto which provide solely for the admission or withdrawal of investors as limited partners of the Partnership (attached as Exhibit A to Prospectus of the Partnership included as part of its Registration Statement on Form S-11, File No. 33-31778, and incorporated herein by reference). 4. See Exhibits 3(a), 3(b) and 3(c). 10(a) Escrow Deposit Agreement between Historic Preservation Properties 1990 L.P. Tax Credit Fund and Wainwright Bank and Trust Company, (filed as exhibit 10A to the Partnership's Registration Statement of Form S-11, File No. 33-31778, and incorporated herein by this reference). 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, dated October 24, 1994. (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.(8) 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. (8) LI. Indemnity Deed of Trust and Security Agreement between Henderson's Wharf Baltimore L.P. and Aid Association for Lutherans, dated February 27, 1996. (8) LII. Assignment of Rents and Leases between Henderson's Wharf Baltimore L.P. and Aid Association for Lutherans, dated February 27, 1996. (8) LIII. Escrow Agreement among Henderson's Wharf Baltimore L.P., Calvin Gregg Ryan and Douglas G. Worrall, dated February 27, 1996. (8) 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 27, 1996. (8) 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 27, 1996. (8) (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. (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, 1996 and incorporated herein by this reference. 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.(8) LVII. Promissory Note between Henderson's Wharf Marina L.P. and HWFP, Inc., dated February 27, 1996. (8) LIX. Assignment of Leases and Rents between Henderson's Wharf Marina L.P. and HWFP, Inc., dated February 27, 1996. (8) LX. Settlement letter on prepayment of Promissory Note between Henderson's Wharf Marina L.P. and HWFP, Inc., dated September 30, 1997. (9) LXI. Closing documents which include Purchase and Sale Agreement and Deed of Exchange with Joseph V. Brady for the exchange of Unit 610 for Unit 422, date March 17, 1998. LXII.Primary Property and Marina Management Agreements between Henderson's Wharf Baltimore, L.P., Henderson's Wharf Marina, L.P. Gunn Financial Incorporated, dated May 18, 1998. LXIII.Asset Management Agreement between Historic Preservation Properties 1990 L.P. Tax Credit Fund and Gunn Financial Incorporated dated July 1, 1998. LXIV. Closing documents which include Settlement Agreement, Mutual Release, and Agreement of Sale and Purchase, and Deed between Henderson's Wharf Baltimore L.P. and Richard Sassi for Unit 406, dated November 3, 1998. - -------------------- (8) Previously filed as part of exhibit 10(b) to the Partnership's Annual Report on Form 10-K for year ended December 31, 1996 and incorporated herein by this reference. (9) Previously filed as part of exhibit 10 (b) to the Partnership's Annual Report on Form 10-K for the year ended December 31, 1997 and incorporated herein by this reference. 10 (c) Asset Management Agreement between Historic Preservation Properties 1990 L.P. Tax Credit Fund and Hillcrest Asset Management, Inc. dated January 1, 1992. (4) 22 List of Ventures. (2) 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) (2) Previously filed as part of exhibit 22 to the Partnership's Annual Report on Form 10-K for the year ended December 31, 1990 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. (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 18, 1999 By: /s/ Terrence P. Sullivan Terrence P. Sullivan, President and Date: March 18, 1999 By: /s/ Terrence P. Sullivan 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 /s/ Terrence P. Sullivan Individual General Partner of Terrence P. Sullivan BHP II Advisors Limited Partnership and as President and Principal Date: March 18, 1999 Executive Officer of Portfolio Advisory Services II, Inc., General Partner of BHP II Advisors Limited Partnership /s/ Terrence P. Sullivan Principal Financial and Terrence P. Sullivan Principal Accounting Officer of Portfolio Advisory Services II, Date: March 18, 1999 Inc., General Partner of BHP II 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, 1998, 1997 AND 1996 TOGETHER WITH INDEPENDENT AUDITORS' REPORTS ANNUAL REPORT ON FORM 10-K ITEMS 14 (A) (1) AND (2) INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Independent Auditors' Report F-3 Consolidated Balance Sheets as of December 31, 1998 and 1997 F-4 Consolidated Statements of Operations for the Years Ended December 31, 1998, 1997 and 1996 F-5 Consolidated Statements of Partners' Equity (Deficit) for the Years Ended December 31, 1998, 1997 and 1996 F-6 Consolidated Statements of Cash Flows for the Years Ended December 31, 1998, 1997 and 1996 F-7 Notes to Consolidated Financial Statements F-8 Independent Auditors' Report on Accompanying Information F-14 Consolidated Financial Statement Schedule: Schedule III - Real Estate and Accumulated Depreciation F-15 F-2 Independent Auditors' Report The Partners Historic Preservation Properties 1990 L.P. Tax Credit Fund Boston, 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, 1998 and 1997, and the related consolidated statements of operations, partners' equity (deficit) and cash flows for each of the years in the three-year period ended December 31, 1998. 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, 1998 and 1997, and the results of its operations and cash flows for each of the years in the three-year period ended December 31, 1998, in conformity with generally accepted accounting principles. Lefkowitz, Garfinkel, Champi & DeRienzo P.C. Providence, Rhode Island March 18, 1999 F-3 HISTORIC PRESERVATION PROPERTIES 1990 L.P. TAX CREDIT FUND CONSOLIDATED BALANCE SHEETS DECEMBER 31, 1998 AND 1997 ASSETS 1998 1997 ----------------- ---------------- INVESTMENT IN REAL ESTATE Building and building improvements $ 15,145,302 $ 15,178,365 Land 97,034 97,034 Furniture and equipment 980,447 970,736 Marina - land and improvements 1,659,050 1,376,259 Deferred evaluation and acquisition costs 1,102,600 1,102,600 ----------------- ---------------- 18,984,433 18,724,994 Less accumulated depreciation and amortization 4,242,639 3,830,865 ----------------- ---------------- 14,741,794 14,894,129 Reserve for realization of Marina land and improvements (845,672) (845,672) ----------------- ---------------- 13,896,122 14,048,457 CASH AND CASH EQUIVALENTS 540,298 670,811 CASH EQUIVALENT, SECURITY DEPOSITS 85,958 86,641 ESCROW DEPOSITS 546,834 152,212 DEFERRED COSTS, net of accumulated amortization (1998, $51,761; 1997, $33,492) 130,924 149,193 OTHER ASSETS 269,188 116,807 ----------------- ---------------- $ 15,469,324 $ 15,224,121 ================= ================ LIABILITIES AND PARTNERS' EQUITY LIABILITIES: Note payable $ 5,619,134 $ 5,767,197 Accrued expenses and other liabilities 338,908 286,315 Security deposits 78,055 82,271 ----------------- ----------------- Total liabilities 6,036,097 6,135,783 ----------------- ----------------- COMMITMENTS (Note 5) PARTNERS' EQUITY Limited Partners' equity-Units of Investor Limited Partnership Interest, $1,000 stated value per Unit-16,361 issued and outstanding units 9,481,256 9,139,816 General Partner's deficit (48,029) (51,478) ----------------- ---------------- Total partners' equity 9,433,227 9,088,338 ----------------- ----------------- $ 15,469,324 $ 15,224,121 ================= ================= The accompanying notes are an integral part of these financial statements. F-4 HISTORIC PRESERVATION PROPERTIES 1990 L. P. TAX CREDIT FUND CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 1998 1997 1996 ---------- ---------- ----------- REVENUE: Rental and related income $3,611,487 $3,230,009 $ 2,894,221 Interest and other income 44,902 31,252 15,523 ---------- ---------- ----------- 3,656,389 3,261,261 2,909,744 ---------- ---------- ----------- EXPENSES: Operating and administrative 245,565 245,895 244,415 Property operating expenses: Payroll services 584,655 510,085 505,988 Condominium assessments 379,894 382,632 366,156 Real estate taxes 256,005 258,426 264,104 Management fees 152,980 142,088 124,438 Other operating expenses 769,540 457,067 533,582 Depreciation and amortization 475,872 582,710 591,751 ---------- ---------- ----------- 2,864,511 2,578,903 2,630,434 ---------- ---------- ----------- INCOME FROM OPERATIONS 791,878 682,358 279,310 INTEREST EXPENSE 446,989 470,533 541,643 MINORITY INTEREST IN LOSS ON MARINA VENTURE - - 3,344 ---------- ---------- ----------- NET INCOME (LOSS) $ 344,889 $ 211,825 $ (258,989) ========== ========== =========== NET INCOME (LOSS) ALLOCATED TO GENERAL PARTNER $ 3,449 $ 2,118 $ (2,590) ========== ========== =========== NET INCOME (LOSS) ALLOCATED TO LIMITED PARTNERS $ 341,440 $ 209,707 $ (256,399) ========== ========== =========== NET INCOME (LOSS) PER UNIT OF LIMITED PARTNERSHIP INTEREST, BASED ON 16,361 UNITS OUTSTANDING $ 20.87 $ 12.82 $ (15.67) ========== ========== =========== The accompanying notes are an integral part of these financial statements. F-5 HISTORIC PRESERVATION PROPERTIES 1990 L.P. TAX CREDIT FUND CONSOLIDATED STATEMENTS OF PARTNERS' EQUITY (DEFICIT) FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 Units of Investor Investor Limited Limited General Partnership Partners' Partner's Interest Equity Deficit Total ----------- ------------ ------------ ----------- 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 Net income - 209,707 2,118 211,825 ----------- ------------ ------------ ---------- BALANCE, December 31, 1997 16,361 9,139,816 (51,478) 9,088,338 Net income - 341,440 3,449 344,889 ----------- ------------ ------------ ---------- BALANCE, December 31, 1998 16,361 $ 9,481,256 $ (48,029) $ 9,433,227 ========== ============ ============ ========== The accompanying notes are an integral part of these financial statements. F-6 HISTORIC PRESERVATION PROPERTIES 1990 L.P. TAX CREDIT FUND CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 1998 1997 1996 --------- --------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ 344,889 $ 211,825 $ (258,989) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 475,872 582,710 591,751 Gain on sale of asset -- -- (7,000) Minority interest in loss on Marina -- -- (3,344) Venture Decrease (increase) in security (3,533) 1,227 (5,597) deposits, net Decrease in accrued expenses and other liabilities (3,692) (24,199) (98,224) Increase in escrow deposits (394,622) (52,008) (45,934) Decrease (increase) in other assets (152,381) (34,164) 134,224 --------- --------- ----------- Net cash provided by operating activities 266,533 685,391 306,887 --------- --------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Additions to building and improvements (114,346) -- (442,264) Proceeds from exchange of building and building Improvements 122,843 -- -- Purchase of furniture & equipment (9,711) (9,500) (16,658) Additions to Marina (247,769) (33,727) (23,049) Proceeds from sale of asset -- -- 7,000 --------- --------- ----------- Net cash used in investing activities (248,983) (43,227) (474,971) --------- --------- ----------- 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 (148,063) (355,887) (101,916) Payment of deferred costs -- -- (143,167) --------- --------- ----------- Net cash provided by (used in) financing activities (148,063) (355,887) 164,499 --------- --------- ----------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (130,513) 286,277 (3,585) CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 670,811 384,534 388,119 --------- --------- ----------- CASH AND CASH EQUIVALENTS, END OF YEAR $ 540,298 $ 670,811 $ 384,534 ========= ========= =========== SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid for interest $ 447,473 $ 471,665 $ 522,522 ========= ========= =========== 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. F-7 HISTORIC PRESERVATION PROPERTIES 1990 L.P. TAX CREDIT FUND NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 (1) Organization and General Partner - BHPII 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. BHP II was formed in June 1989 for the purpose of organizing, syndicating, and managing publicly offered real estate limited partnerships (Public Rehabilitation Partnerships). 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) Summary of Significant Accounting Policies Principles of Consolidation HPP'90 holds a 99% general partner interest and Henderson's Wharf Development Corp. (HWDC), a wholly owned subsidiary of HPP'90, holds a total general and limited partner interest of 1% in Henderson's Wharf Baltimore Limited Partnership (HWB). At December 31, 1998, HPP'90 holds a 98% limited partner interest and HWDC holds 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. 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 revenue and expenses during the reporting period. Actual results could differ from those estimates. Real Estate and Depreciation Real estate is held for lease and stated at the lower of cost or net realizable value. Depreciation is provided over the estimated economic useful lives of the assets using the straight-line method. Depreciation expense for the years ended December 31, 1998, 1997 and 1996 totaled $430,039, $536,007 and $547,996, respectively. 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). Amortization expense relating to deferred evaluation and acquisition costs totaled $27,564 in each of the years ended December 31, 1998, 1997 and 1996. F-8 HISTORIC PRESERVATION PROPERTIES 1990 L.P. TAX CREDIT FUND NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 (2) Summary of Significant Accounting Policies (Continued) 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 to be cash equivalents. Cash equivalents at December 31, 1998 and 1997 totaled $449,934 and $654,677, respectively. At December 31, 1998 and 1997, HPP'90 had $823,168 and $615,312 of cash and cash equivalents and escrow deposits, respectively, on deposit in banks in excess of amounts insured by the Federal Deposit Insurance Corporation or otherwise not insured. Deferred Costs Deferred costs relating to HPP'90's note payable are being amortized on a straight-line basis over the term of the note. Amortization expense relating to deferred costs for the years ended December 31, 1998, 1997 and 1996 totaled $18,269, $19,139 and $16,191, respectively. Revenue Recognition Revenue from residential units, principally under annual operating leases, is recorded when due. Revenue from rental 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 1996 and 1997 financial statements have been reclassified to conform to the 1998 presentation. (3) Investment in Real Estate HPP'90 has an interest in the following entities: Henderson's Wharf Baltimore, L.P. (the Building Venture) is a Delaware limited partnership formed on July 20, 1990 to acquire and retain a fee interest in a seven-story building on 1.5 acres of land and to rehabilitate the building into residential apartment units with 153 indoor parking spaces (the Apartments) and a 38 room inn (the Inn) located at 1000 Fell Street, Baltimore, Maryland. In addition to the inn, the building contains a total of 137 residential units, 8 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 4). Contributions by HPP'90 to the Building Venture totaled $12,214,500 as of December 31, 1998. 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. The economic occupancy for the year ended December 31, 1998 for the residential units was 96% (unaudited) and the average occupancy for the inn was 73% (unaudited). 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 4). On March 17, 1998, the Building Venture exchanged a condominium unit and parking spaces with an unrelated party in return for that unrelated party's condominium unit, parking spaces and $135,000. The transaction resulted in net cash proceeds of $122,843, after closing costs. On November 3, 1998, as part of a negotiated settlement as discussed in Note 4, the F-9 HISTORIC PRESERVATION PROPERTIES 1990 L.P. TAX CREDIT FUND NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 (3) Investment in Real Estate (Continued) Building Venture purchased a condominium unit and parking space owned by an unrelated party, with whom the Building Venture was engaged in a lawsuit and countersuit, for a purchase price of $110,000. HPP'90's operations, principally consisting of accounting, investor services and other general and administrative costs, are funded from distributions by the Building Venture. Also, distributions from the Building Venture are used to fund reserves for the capital needs of HPP'90's real property entities. For the years ended December 31, 1998, 1997, and 1996, the Building Venture distributed to HPP'90 $1,159,000, $501,000, and $203,000, respectively. Rehabilitation Tax Credits generated by the Building Venture and previously allocated to HPP'90's Limited Partners totaled $3,174,059 since inception. As of December 31, 1996, 100% of the credits were fully vested. Henderson's Wharf Marina, L.P. (the Marina Venture) is a Delaware limited partnership formed on July 20, 1990 to acquire and retain 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 $728,544 as of December 31, 1998. 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 from 1991 through 1995 due to the significant repairs necessary to be fully operational. During the years ended December 31, 1998, 1997 and 1996, the Marina Venture added $282,791, $33,727 and $23,049, respectively, of utility, safety and other improvements, increasing the number of fully operational slips to 256. Substantial repairs are still needed to maintain the Marina Venture's land which provides parking to the Marina and Inn (see Note 5). 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 4). 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. 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. On September 30, 1997, the Building Venture advanced the Marina Venture $200,000, and the Marina Venture then settled in full the promissory note payable to HWFP (see Note 4). The Building Venture and the Marina Venture are collectively referred to as "the Ventures". 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 Ventures' respective amended partnership agreements. (4) Note 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. 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. 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 F-10 HISTORIC PRESERVATION PROPERTIES 1990 L.P. TAX CREDIT FUND NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 (4) Note Payable (Continued) $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. As mentioned in Note 3, 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 bore interest at 7.50%, matured in March 2006, and required 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 during the year ended December 31, 1996. 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. On September 30, 1997, the Building Venture advanced the Marina Venture $200,000, and the Marina Venture settled in full the remaining outstanding principal balance of $212,532 and all accrued interest due under the promissory note to HWFP. As of December 31 1998, aggregate annual maturities under the deed of trust note for each of the next five years are as follows: Year Ending December 31 Amount 1999 $ 160,113 2000 173,145 2001 187,236 2002 202,475 2003 218,954 (5) Transactions With Related Parties, Commitments and Contingencies The Building Venture entered into a consulting agreement (Consulting Agreement), which expired on December 31, 1991, that required the Building Venture to pay Hillcrest Management Inc., (HMI) a Massachusetts corporation and former limited partner of the Ventures with whom the Ventures had several contracts, 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 4. 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). HPP'90 entered into an agreement on behalf of the Ventures to pay contract termination settlement payments (Settlement Payments) totaling $271,108 to HMI. The Settlement Payments required an initial payment of $36,000 on January 27, 1995 and require monthly payments of $3,221 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. The Settlement Payments may be prepaid, as defined in the agreement, without penalty. As of December 31, 1998 and 1997, unpaid Settlement Payments included in accrued expenses and other liabilities totaled $106,280 and $144,928, respectively. F-11 HISTORIC PRESERVATION PROPERTIES 1990 L.P. TAX CREDIT FUND NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 (5) Transactions With Related Parties, Commitments and Contingencies (Continued) On November 1, 1995, the Building Venture 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 provided 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 expired on June 30, 1998. For the period January 1, 1998 through June 30, 1998 and for the years ended December 31, 1997 and 1996, management fees paid to CMC by the Ventures totaled $74,668, $142,088 and $124,438, respectively. Effective July 1, 1998, the Building Venture and Marina Venture entered into property management contracts with Gunn Financial, Incorporated (GFI), an unaffiliated Massachusetts corporation, to oversee the property management of the apartment, inn and marina operations. The property management contracts will provide for the payment of management fees to GFI equal to 4% of apartment gross receipts, 4% of inn gross receipts, and 4% of marina gross receipts, as defined, respectively. The agreements expires the earlier of June 30, 2006 or upon the disposition of the Ventures' properties, as defined. Also, effective July 1, 1998, GFI subcontracted Winn Management Company, an unaffiliated Massachusetts corporation who manages numerous properties throughout the East Coast, to provide certain on site property management services to the apartment, inn and marina operations. Management fees paid to GFI by the Ventures totaled $78,312 for the period July 1, 1998 through December 31, 1998. On October 1, 1995, HPP'90 engaged CMC to provide accounting, asset management and investor services. CMC provided such services for an annual management fee of $38,400, plus reimbursement of all its costs of providing these services. The agreement expired on June 30, 1998. For the period January 1, 1998 through June 30, 1998 and for the years ended December 31, 1997 and 1996, expense reimbursements paid to CMC totaled $83,080, $127,075 and $136,654, respectively. Effective July 1, 1998, HPP'90 engaged GFI to provide accounting, asset management and investor services. GFI provides such services for an annual management fee of $36,000, plus reimbursement of all its costs of providing these services. The agreement expires the earlier of June 30, 2006 or upon the disposition of the Ventures' properties, as defined. Expense reimbursements to GFI for the period July 1, 1998 through December 31, 1998 totaled $96,162. 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. On November 3, 1998, the Building Venture and the condominium association to which it belongs settled a lawsuit against one unit owner for failure to pay condominium assessments and nuisance, and a counterclaim filed by that unit owner against the Building Venture, the condominium association, and other third parties for alleged breach of contract and related counts. As part of the settlement, the Building Venture paid $110,000 to purchase the condominium unit and parking space, as well as an additional $65,000 which has been included in other operating expenses for the year ended December 31, 1998. In late 1998, the condominium association to which the Building Venture belongs engaged an engineering firm to conduct a capital needs assessment of its property. Based on that study, the condominium association assessed its owners in 1999 a special assessment totaling $160,000 to provide reserves for certain replacement items. The Building Venture's share of the special assessment payable in 1999 is approximately $152,000. F-12 HISTORIC PRESERVATION PROPERTIES 1990 L.P. TAX CREDIT FUND NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 (5) Transactions With Related Parties, Commitments and Contingencies (Continued) Within the next several years, significant repairs are needed to maintain the Marina Venture's land which provides parking to the marina and inn. HPP'90 now anticipates that capital resources to fund the repairs are likely to be provided by additional contributions to the Partnership. The Marina Venture estimates the cost of replacing the bulkhead to retain the land to be in excess of $2,300,000. Also, the Partnership is investigating other potential sources of available parking for the Marina and Inn. It is reasonably possible that the outcome of this uncertainty might be determined in the near term. Included in escrow deposits as of December 31, 1998 is $404,681 that the Partnership has reserved for future capital improvements. At December 31, 1998, the Building Venture and Marina Venture have entered into contracts for various building improvements and furniture and equipment purchases totaling $369,586 and $12,691, respectively. Included in other assets at December 31, 1998 are deposits made on such contracts totaling $141,230. (6) Fair Value of Financial Instruments The carrying amounts of cash and cash equivalents, cash equivalent security deposits, escrow deposits, accrued expenses and other liabilities, and security deposits at December 31, 1998 and 1997 approximate their fair values due to their short maturities. The fair value of the note payable at December 31, 1998 and 1997 approximates its carrying amount based on the interest rates currently available to HPP'90 for similar financing arrangements. All financial instruments are held for non-trading purposes. F-13 Independent Auditors' Report on Accompanying Information The Partners Historic Preservation Properties 1990 L.P. Tax Credit Fund Boston, 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, 1998 and 1997, and for each of the years in the three-year period ended December 31, 1998 included in this Form 10-K and have issued our report thereon dated March 18, 1999. Our audits were made for the purpose of forming an opinion on the 1998 and 1997 basic consolidated financial statements taken as a whole. The supplemental schedule is the responsibility of the Partnership's management and is presented for the purpose 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 18, 1999 F-14 HISTORIC PRESERVATION PROPERTIES 1990 L.P. TAX CREDIT FUND SCHEDULE REAL ESTATE & ACCUMULATED DEPRECIATION DECEMBER 31, 1998 IN THOUSANDS Cost Capitalized Initial Costs Subsequent to Acquisition -------------------- ------------------------- Description and Building and Carrying Ownership Percentage Encumbrance Land Improvement Improvements Costs - ------------------ -------- -------- ---------- ------------ -------- Residential/Building/Inn Henderson's Wharf Baltimore L.P. Baltimore, Maryland 99.9% $ 5,619 $ 97 $ 6,715 $ 8,080 $ 350 Marina Henderson's Wharf Marina L.P. Baltimore, Maryland 98% (Notes 5 and 6) 0 1,187 0 433 79 -------- ------- -------- -------- -------- $ 5,619 $1,284 $ 6,715 $ 8,513 $ 429 ======== ======= ======== ======== ======== F-15 HISTORIC PRESERVATION PROPERTIES 1990 L.P. TAX CREDIT FUND SCHEDULE REAL ESTATE & ACCUMULATED DEPRECIATION DECEMBER 31, 1998 IN THOUSANDS Gross Amounts At Which Carried at Close of Period ----------------------------------------------------- Accumulated Description and Building and Total Depreciation Ownership Percentage Land Improvements (Note 2) (Note 3) - ------------------------- ---------- ---------- ---------- ---------- Residential/Building/Inn Henderson's Wharf Baltimore L.P. Baltimore, Maryland 99.9% $ 97 $ 15,145 $ 15,242 $ 2,905 Marina Henderson's Wharf Marina L.P. Baltimore, Maryland 98% (Notes 5 and 6) 301 512 813 215 ---------- ---------- ---------- ---------- $ 398 $ 15,657 $ 16,055 $ 3,120 ========== ========== ========== ========== F-16 HISTORIC PRESERVATION PROPERTIES 1990 L.P. TAX CREDIT FUND SCHEDULE REAL ESTATE & ACCUMULATED DEPRECIATION DECEMBER 31, 1998 IN THOUSANDS Date of Depreciable Description and Construction Date Life Partnership Percentage Rehabilitation Acquired (Years) - ----------------------------------- ------------------- ------- -------- Residential/Building/Inn Henderson's Wharf Baltimore L.P. Baltimore, Maryland 99.9% 9/90 7/20/90 40 Marina Henderson's Wharf Marina L.P. Baltimore, Maryland 98% (Notes 5 and 6) N/A 7/20/90 34 Note 1: The aggregate cost of each property on a tax basis net of the reduction due to rehabilitation tax credits. 1998 1997 1996 --------- --------- ------------ Henderson's Wharf Baltimore $ 14,016 $ 14,075 $ 14,075 Henderson's Wharf Marina 837 589 549 --------- --------- ------------ Total $ 14,853 $ 14,664 $ 14,624 ========= ========= ============ Note 2: The changes in total costs of land, building and improvements at December 31 are as follows: 1998 1997 1996 --------- --------- ------------ Balance at the beginning of $ 15,806 $ 15,766 $ 15,311 period Additions: Land, building & improvements purchased 418 40 455 Building & improvements acquired through exchange 89 - - Disposals: Building and improvements, cost of unit exchanged (258) - - --------- --------- ------------ Total $ 16,055 $ 15,806 $ 15,766 ========= ========= ============ F-17 HISTORIC PRESERVATION PROPERTIES 1990 L.P. TAX CREDIT FUND SCHEDULE REAL ESTATE & ACCUMULATED DEPRECIATION DECEMBER 31, 1998 IN THOUSANDS Note 3: The changes in accumulated depreciation for the years ended 1998 1997 1996 --------- --------- ------------ Balance at the beginning of $ 2,761 $ 2,396 $ 1,987 period Depreciation during the year: Buildings & improvements 405 365 409 Disposals: Buildings & improvements relating to unit exchanged (46) - - --------- --------- ------------ $ 3,120 $ 2,761 $ 2,396 ========= ========= ============ Note 4: This schedule excludes furniture and equipment with a cost of approximately $980,000 and $971,000 and accumulated depreciation of approximately $902,000 and $876,000 at December 31, 1998 and 1997, respectively. Note 5: 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 6: 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. F-18 EX-27 2
5 12-MOS DEC-31-1998 DEC-31-1998 540,298 0 0 0 0 0 18,984,433 4,242,639 15,469,324 0 5,619,134 0 0 0 0 15,469,324 0 3,656,389 0 2,864,511 0 0 446,989 344,889 0 0 0 0 0 344,889 20.87 20.87
EX-10 3 AGREEMENT OF PURCHASE AND SALE AGREEMENT OF PURCHASE AND SALE THIS AGREEMENT OF PURCHASE AND SALE (this "Agreement") is made on this 17 day of March 1998 (the "Execution Date"), by and between HENDERSON'S WHARF BALTIMORE L.P., a Delaware limited partnership ("Seller") and JOSEPH V. BRADY, a Maryland resident ("Buyer"),. Background Seller is the owner of Condominium Unit No. 610 (the "Unit") in The Residences and Inn at Henderson's Wharf, a Condominium (the "Condominium"), together with all appurtenances and advantages thereunto pertaining, and Parking Unit No. P-70 and Parking Unit No. P-71 and an undivided percentage interest in the common elements, common expenses and common profits in the condominium regime, and together with all appliances, fixtures, equipment and personalty located in the Unit (collectively, the "Property"). Buyer is the owner of Condominium Unit No. 422 (the "Exchange Unit") in the Condominium, together with all appurtenances and advantages thereunto pertaining, and Parking Unit No. P-45 and Parking Unit No. P-46 and an undivided percentage interest in the common elements, common expenses and common profits in the condominium regime, and together with all appliances, fixtures, equipment and personalty located in the Exchange Unit (collectively, the "Exchange Property"). Seller desires to sell and convey to Buyer, and Buyer desires to purchase from Seller, the Property upon the terms and conditions set forth in this Agreement. Agreements NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Buyer agree as follows: 1. PURCHASE AND SALE. On the Closing Date (as hereinafter defined), Seller shall sell and convey to Buyer, and Buyer shall purchase from Seller, the Property. 2. PURCHASE PRICE AND PAYMENT. (a) The purchase price for the Property (the "Purchase Price") shall be the payment from Buyer to Seller of One Hundred Thirty Five Thousand Dollars ($135,000.00) and the conveyance from Buyer to Seller of the Exchange Unit. (b) The Purchase Price shall be paid at Closing (as hereinafter defined) as follows: (i) the payment from Buyer to Seller of One Hundred Thirty Five Thousand Dollars ($135,000.00) by bank wire, title company or cashier's check; and (ii) the conveyance by Buyer to Seller of the Exchange Unit, in accordance with the terms and conditions of this Agreement. 3. POSSESSION; RISK OF LOSS. (a) At Closing, Seller shall deliver to Buyer possession of the Property in "AS IS" condition, free of any and all tenancies created by Seller. (b) The risk of loss and damage to the Property shall pass to Buyer at Closing. (c) At Closing, Buyer shall deliver to Seller possession of the Exchange Property in "AS IS" condition, free of any and all tenancies created by Buyer. (d) The risk of loss and damage to the Exchange Property shall pass to Seller at Closing. 4. TITLE. (a) Fee simple title in and to the Property shall be marketable, insurable at standard rates on an ALTA Form B policy of owner's title insurance, and free and clear of all liens, encumbrances, leases, easements, covenants, conditions and restrictions, except for those matters shown on the title report attached hereto as Exhibit A and incorporated herein by reference (collectively, the "Permitted Property Exceptions"). From and after the Execution Date Seller shall not do or cause to be done anything which will affect the status of title of the Property. (b) Fee simple title in and to the Exchange Property shall be marketable, insurable at standard rates on an ALTA Form B policy of owner's title insurance, and free and clear of all liens, encumbrances, leases, easements, covenants, conditions and restrictions, except for those matters shown on the title report attached hereto as Exhibit B and incorporated herein by reference (collectively, the "Permitted Exchange Property Exceptions"). From and after the Execution Date Buyer shall not do or cause to be done anything which will affect the status of title of the Exchange Property. 5. SELLER'S REPRESENTATIONS AND WARRANTIES. Seller makes the following representations and warranties to Buyer, each of which shall be true and correct on the Execution Date and on the Closing Date and shall survive the Closing: (a) The execution and delivery of this Agreement by Seller, and the performance by Seller of all terms and conditions contained herein, do not violate the ten-ns of, are not in conflict with, and will not result in the breach of or default under (i) any agreement, commitment, obligation, contract or instrument under which Seller or the Property is bound or affected or (ii) any law, rule, regulation or court order by which the Property or Seller is affected. (b) As of the Execution Date, all taxes, assessments, condominium fees or other charges affecting or pertaining to the Unit have been paid in full. 6. BUYER'S REPRESENTATIONS AND WARRANTIES. Buyer makes the following representations and warranties to Seller, each of which shall be true and correct on the Execution Date and on the Closing Date and shall survive the Closing: (a) The execution and delivery of this Agreement by Buyer, and the performance by Buyer of all terns and conditions contained herein, do not violate the terms of, are not in conflict with, and will not result in the breach of or default under (i) any agreement, commitment, obligation, contract or instrument under which Buyer or the Exchange Property is bound or affected or (ii) any law, rule, regulation or court order by which the Exchange Property or Buyer is affected. (b) As of the Execution Date, all taxes, assessments, condominium fees or other charges affecting or pertaining to the Exchange Unit have been paid in full. 7. CONDITIONS PRECEDENT TO CLOSING. (a) The obligation of Buyer to purchase the Property pursuant to this Agreement shall be expressly conditioned upon and subject to the satisfaction (or written waiver by Buyer) of each of the following conditions: (i) Each of the representations and warranties of Seller contained in section 5 shall be true as of the Closing Date; (ii) Seller shall not be in default of any of its obligations under this Agreement; and (iii) The current tenant (as of the Execution Date) of the Exchange Unit elects not to exercise its right to purchase the Exchange Unit pursuant to the provisions of Article 13, Sections 46-55 of the Baltimore City Code (1976 Edition, as amended). If any one or more of such conditions precedent are not satisfied (or the satisfaction thereof is not waived in writing by Buyer) as of the Closing Date, then Buyer shall have the right, at its option, to terminate this Agreement by written notice thereof to Seller, and thereafter neither party shall have any further liability or obligation hereunder. (b) The obligation of Seller to sell the Property pursuant to this Agreement shall be expressly conditioned upon and subject to the satisfaction (or written waiver by Seller) of each of the following conditions: (i) Each of the representations and warranties contained in section 6 shall be true as of the Closing Date; (ii) Buyer shall not be in default of any of its obligations under this Agreement; and (iii) The current tenant (as of the Execution Date) of the Exchange Unit elects not to exercise its right to purchase the Exchange Unit pursuant to the provisions of Article 13, Sections 46-5 5 of the Baltimore City Code (1976 Edition, as amended). If any one or more of such conditions precedent are not satisfied (or the satisfaction thereof is not waived in writing by Seller) as of the Closing Date, then Seller shall have the right, at its option, to terminate this Agreement by written notice thereof to Buyer, and thereafter neither party shall have any further liability or obligation hereunder. 8. CLOSING; CLOSING COSTS; ADJUSTMENTS. (a) The consummation of the transactions contemplated by this Agreement (the "Closing") shall take place at the offices of Neuberger, Quinn, Gielen, Rubin & Gibber, P.A., 27th Floor, One South Street, Baltimore, Maryland 21202, or at such other location in Baltimore City designated by Buyer, on March 17, 1998 at a time designated by Buyer ("Closing Date"). If the Closing Date as provided herein falls on a Saturday, Sunday or legal holiday, then the Closing Date shall be extended to the next day which is a business day. (b) Buyer shall pay the costs of examination of title and title insurance premiums for the Property. Seller shall pay the costs of examination of title and title insurance premiums for the Exchange Property. Each party shall pay its own attorneys' fees. (c) All condominium fees, all taxes, general or special, and all other public and governmental charges or assessments against the Property which are or may be payable on an annual or semi-annual basis (including metropolitan and other benefit charges, assessments, liens or encumbrances) shall be adjusted and apportioned as of the Closing and are to be assumed and paid thereafter by Buyer, whether or not the assessments have been levied as of the Closing. (d) All condominium fees, all taxes, general or special, and all other public and governmental charges or assessments against the Exchange Property which are or may be payable on an annual or semi-annual basis (including metropolitan and other benefit charges, assessments, liens or encumbrances) shall be adjusted and apportioned as of the Closing and are to be assumed and paid thereafter by Seller, whether or not the assessments have been levied as of the Closing. (e) All water and sewer bills for the Property shall be adjusted as of the Closing based on prior bills and all gas and/or electric bills shall be adjusted as of the Closing based on meter reading or prior bills. (f) All water and sewer bills for the Exchange Property shall be adjusted as of the Closing based on prior bills and all gas and/or electric bills shall be adjusted as of the Closing based on meter reading or prior bills. 9. RECORDATION AND TRANSFER TAXES, OTHER COSTS. (a) SECTION 14-104 OF THE REAL PROPERTY ARTICLE OF THE ANNOTATED CODE OF MARYLAND PROVIDES THAT, UNLESS OTHERWISE NEGOTIATED IN THE CONTRACT OR PROVIDED BY STATE OR LOCAL LAW, THE COST OF ANY RECORDATION TAX OR STATE OR LOCAL TRANSFER TAX SHALL BE SHARED EQUALLY BY BUYER AND SELLER. This statement is provided for informational purposes only. Except as provided in subsection (b) below, Seller shall pay the total cost of all documentary stamps, recordation taxes and transfer taxes imposed upon the transfer of the Property and the Exchange Property. (b) This subsection applies if Buyer is a first-time Maryland home buyer who will reside in the Property. If there are two or more Buyers, then each Buyer must be someone who is a first-time Maryland home buyer, or someone who will not occupy the house as a principal residence and who is a co-maker or guarantor of a purchase money deed of trust or mortgage for the benefit of the first-time Maryland home buyer. A "first-time Maryland home buyer" means an individual who has never owned in the State of Maryland residential real property that has been his or her principal residence. Section 14-104 of the Real Property Article of the Annotated Code of Maryland provides that: (i) Buyer's portion of the State transfer tax is waived; (ii) State transfer tax will be reduced to 0.25% of the sales price of the property; (iii) the entire amount of the State transfer tax shall be paid by Seller; and (iv) the entire amount of recordation tax and local transfer tax shall be paid by Seller unless there is an express agreement between Buyer and Seller that the recordation tax and local transfer tax will not be paid entirely by Seller. In this Agreement, the parties agree that the costs of transfer tax and recordation tax shall be paid by Seller. check if first-time Maryland Home Buyer. 10. DEFAULT. (a) If Buyer shall have fully performed its obligations hereunder and Seller breaches this Agreement or otherwise fails to perform or observe any of the covenants or obligations to be performed or observed by Seller hereunder, or if any of Seller's representations or warranties hereunder is incorrect or untrue as of the Closing Date, Buyer shall have the right to (i) enforce Buyer's right of specific performance, (ii) bring suit for all damages suffered by reason of Seller's action or inaction, and/or (iii) enforce any and all other remedies available to Buyer at law or in equity. (b) If Seller shall have fully performed its obligations hereunder and Buyer breaches this Agreement or otherwise fails to perform or observe any of the covenants or obligations to be perforined or observed by Buyer hereunder, Seller shall have the right to (i) enforce Seller's right of specific performance, (ii) bring suit for all damages suffered by reason of Buyer's action or inaction, and/or (iii) enforce any and all other remedies available to Seller at law or in equity. 11. CLOSING DOCUMENTS. (a) At Closing, Seller and Buyer shall execute and deliver to the closing officer or title company representative a special warranty deed, with covenants of further assurances, in the form attached hereto as Exhibit C and incorporated herein by reference, conveying fee simple title to the Property to Buyer free and clear of all liens, encumbrances, leases, easements, covenants, conditions, restrictions and other title exceptions other than the Permitted Property Exceptions, and conveying fee simple title to the Exchange Property to Seller free and clear of all liens, encumbrances, leases, easements, covenants, conditions, restrictions and other title exceptions other than the Permitted Exchange Property Exceptions. (b) On the Closing Date, Seller and Buyer shall execute, acknowledge and deliver, as appropriate, all additional documents that may reasonably be necessary or appropriate to carry out the provisions hereof. (c) On the Closing Date, Buyer shall pay the monetary portion of the Purchase Price. 12. OPERATIONS PENDING CLOSING. From and after the dates listed below, the parties shall perform as follows: (a) From and after the Execution Date, Seller shall promptly furnish to Buyer copies of any and all notices or communications that Seller receives from (1) any governmental or quasi-governmental entities, (ii) any other body having jurisdiction with respect to the use and occupancy or physical condition of the Property, and/or (iii) any other notice or communication relating to the Property. (b) From and after the Execution Date, Seller shall promptly furnish to Buyer written notice of any event or condition that causes or may tend to cause a change in the facts relating to, or the accuracy, completeness or truth of, any of the representations, warranties, covenants, or any of the information provided herein. (c) From and after the Execution Date, neither Seller nor Seller's agents, affiliates or employees shall sell, offer for sale, permit the use of, negotiate with respect to, or otherwise deal in the sale, lease or other transfer of the Property or any interest therein. (d) From and after the Execution Date, Buyer shall promptly furnish to Seller copies of any and all notices or communications that Buyer receives from (i) any governmental or quasi-governmental entities, (ii) any other body having jurisdiction with respect to the use and occupancy or physical condition of the Exchange Property, and/or (iii) any other notice or communication relating to the Exchange Property. (e) From and after the Execution Date, Buyer shall promptly furnish to Seller written notice of any event or condition that causes or may tend to cause a change in the facts relating to, or the accuracy, completeness or truth of, any of the representations, warranties, covenants, or any of the information provided herein. (f) From and after the Execution Date, neither Buyer nor Buyer's agents, affiliates or employees shall sell, offer for sale, permit the use of, negotiate with respect to, or otherwise deal in the sale, lease or other transfer of the Exchange Property or any interest therein. 13. BROKERAGE. Each party represents and warrants to the other that it has dealt with no agent, broker or finder in connection with this Agreement, and each party shall indemnify, defend and save harmless the other from and against any loss, cost, damage or expense (including reasonable attorneys' fees) arising from a breach of such representation or warranty. 14. 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 Seller: Henderson's Wharf Baltimore L.P. c/o Claremont Management Corp. Batterymarch Park II Quincy, MA 02169 ATTN: Charles Intravaia Telecopy No. (617) 472-3670 With a copy to: Richard Rubin, Esquire Neuberger, Quinn, Gielen,Rubin & Gibber, P.A. Commerce Place, 27th Floor One South Street Baltimore, Maryland 21202-3201 Telecopy No. (410) 332-8594 If to Buyer: Dr. and Mrs. Joseph Brady Unit 610 The Residences and Inn at Henderson's Wharf 1000 Fell Street Baltimore, Maryland 21231 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 U.S. Post Office. 15. RESALE NOTICE. SELLER IS REQUIRED BY LAW TO FURNISH TO BUYER NOT LATER THAN FIFTEEN (15) DAYS PRIOR TO THE CLOSING CERTAIN INFORMATION CONCERNING THE CONDOMINIUM WHICH IS DESCRIBED IN ss.11-135 OF THE MARYLAND CONDOMINIUM ACT. THIS INFORMATION MUST INCLUDE AT LEAST THE FOLLOWING: (I) A COPY OF THE DECLARATION (OTHER THAN THE PLATS); (II) A COPY OF THE BYLAWS; (III) A COPY OF THE RULES AND REGULATIONS OF THE CONDOMINIUM; (IV) A CERTIFICATE CONTAINING: (1) A STATEMENT DISCLOSING THE EFFECT ON THE PROPOSED CONVEYANCE OF ANY RIGHT OF FIRST REFUSAL OR OTHER RESTRAINT ON THE FREE ALIENABILITY OF THE UNIT, OTHER THAN ANY RESTRAINT CREATED BY THE UNIT OWNER; (2) A STATEMENT OF THE AMOUNT OF THE MONTHLY COMMON EXPENSE ASSESSMENT AND ANY UNPAID COMMON EXPENSE OR SPECIAL ASSESSMENT CURRENTLY DUE AND PAYABLE FROM THE SELLING UNIT OWNER; (3) A STATEMENT OF ANY OTHER FEES PAYABLE BY THE UNIT OWNERS TO THE COUNCIL OF UNIT OWNERS; (4) A STATEMENT OF ANY CAPITAL EXPENDITURES APPROVED BY THE COUNCIL OF UNIT OWNERS OR ITS AUTHORIZED DESIGNEE PLANNED AT THE TIME OF THE CONVEYANCE WHICH ARE NOT REFLECTED IN THE CURRENT OPERATING BUDGET INCLUDED IN THE CERTIFICATE; (5) THE MOST RECENTLY PREPARED BALANCE SHEET AND INCOME AND EXPENSE STATEMENT, IF ANY, OF THE CONDOMINIUM; (6) THE CURRENT OPERATING BUDGET OF THE CONDOMINIUM, INCLUDING DETAILS CONCERNING THE AMOUNT OF THE RESERVE FUND FOR REPAIR AND REPLACEMENT OF ITS INTENDED USE, OR A STATEMENT THAT THERE IS NO RESERVE FUND; (7) A STATEMENT OF ANY JUDGMENTS AGAINST THE CONDOMINIUM AND THE EXISTENCE OF ANY PENDING SUITS TO WHICH THE COUNCIL OF UNIT OWNERS IS A PARTY; (8) A STATEMENT GENERALLY DESCRIBING ANY INSURANCE POLICIES PROVIDED FOR THE BENEFIT OF THE UNIT OWNERS, A NOTICE THAT THE POLICIES ARE AVAILABLE FOR INSPECTION STATING THE LOCATION AT WHICH THEY ARE AVAILABLE, AND A NOTICE THAT THE TERMS OF THE POLICY PREVAIL OVER THE GENERAL DESCRIPTION; (9) A STATEMENT AS TO WHETHER THE COUNCIL OF UNIT OWNERS HAS KNOWLEDGE THAT ANY ALTERATION OR IMPROVEMENT TO THE UNIT OR TO THE LIMITED COMMON ELEMENTS ASSIGNED TO THE UNIT VIOLATES ANY PROVISION OF THE DECLARATION, BYLAWS, OR RULES OR REGULATIONS; (10) A STATEMENT AS TO WHETHER THE COUNCIL OF UNIT OWNERS HAS KNOWLEDGE OF ANY VIOLATION OF THE HEALTH OR BUILDING CODES WITH RESPECT TO THE UNIT, THE LIMITED COMMON ELEMENTS ASSIGNED TO THE UNIT, OR ANY OTHER PORTION OF THE CONDOMINIUM; (11) A STATEMENT OF THE REMAINING TERM OF ANY LEASEHOLD ESTATE AFFECTING THE CONDOMINIUM AND THE PROVISIONS GOVERNING ANY EXTENSION OR RENEWAL OF IT; AND (12) A DESCRIPTION OF ANY RECREATIONAL OR OTHER FACILITIES WHICH ARE TO BE USED BY THE UNIT OWNERS OR MAINTAINED BY THEM OR THE COUNCIL OF UNIT OWNERS, AND A STATEMENT AS TO WHETHER OR NOT THEY ARE TO BE A PART OF THE COMMON ELEMENTS; AND (V) A STATEMENT BY THE UNIT OWNER AS TO WHETHER THE UNIT OWNER HAS KNOWLEDGE: (1) THAT ANY ALTERATION TO THE UNIT OR TO THE LIMITED COMMON ELEMENTS ASSIGNED TO THE UNIT VIOLATES ANY PROVISION OF THE DECLARATION, BYLAWS, OR RULES AND REGULATIONS; (2) OF ANY VIOLATION OF THE HEALTH OR BUILDING CODES WITH RESPECT TO THE UNIT OR THE LIMITED COMMON ELEMENTS ASSIGNED TO THE UNIT; AND (3) THAT THE UNIT IS SUBJECT TO AN EXTENDED LEASE UNDER ss.11-137 OF THE MARYLAND CONDOMINIUM ACT OR UNDER LOCAL LAW, AND IF SO, A COPY OF THE LEASE MUST BE PROVIDED. BUYER WILL HAVE THE RIGHT TO CANCEL THIS AGREEMENT WITHOUT PENALTY, AT ANY TIME WITHIN SEVEN (7) DAYS FOLLOWING DELIVERY TO BUYER OF ALL OF THIS INFORMATION. HOWEVER, AFTER THE CLOSING, BUYER'S RIGHT TO CANCEL THIS AGREEMENT IS TERMINATED. 16. RESALE NOTICE. BUYER IS REQUIRED BY LAW TO FURNISH TO SELLER NOT LATER THAN FIFTEEN (15) DAYS PRIOR TO THE CLOSING CERTAIN INFORMATION CONCERNING THE CONDOMINIUM WHICH IS DESCRIBED IN ss.11-135 OF THE MARYLAND CONDOMINIUM ACT. THIS INFORMATION MUST INCLUDE AT LEAST THE FOLLOWING: (I) A COPY OF THE DECLARATION (OTHER THAN THE PLATS); (II) A COPY OF THE BYLAWS; (III) A COPY OF THE RULES AND REGULATIONS OF THE CONDOMINIUM; (IV) A CERTIFICATE CONTAINING: (1) A STATEMENT DISCLOSING THE EFFECT ON THE PROPOSED CONVEYANCE OF ANY RIGHT OF FIRST REFUSAL OR OTHER RESTRAINT ON THE FREE ALIENABILITY OF THE UNIT, OTHER THAN ANY RESTRAINT CREATED BY THE UNIT OWNER; (2) A STATEMENT OF THE AMOUNT OF THE MONTHLY COMMON EXPENSE ASSESSMENT AND ANY UNPAID COMMON EXPENSE OR SPECIAL ASSESSMENT CURRENTLY DUE AND PAYABLE FROM THE SELLING UNIT OWNER; (3) A STATEMENT OF ANY OTHER FEES PAYABLE BY THE UNIT OWNERS TO THE COUNCIL OF UNIT OWNERS; (4) A STATEMENT OF ANY CAPITAL EXPENDITURES APPROVED BY THE COUNCIL OF UNIT OWNERS OR ITS AUTHORIZED DESIGNEE PLANNED AT THE TIME OF THE CONVEYANCE WHICH ARE NOT REFLECTED IN THE CURRENT OPERATING BUDGET INCLUDED IN THE CERTIFICATE; (5) THE MOST RECENTLY PREPARED BALANCE SHEET AND INCOME AND EXPENSE STATEMENT, IF ANY, OF THE CONDOMINIUM; (6) THE CURRENT OPERATING BUDGET OF THE CONDOMINIUM, INCLUDING DETAILS CONCERNING THE AMOUNT OF THE RESERVE FUND FOR REPAIR AND REPLACEMENT OF ITS INTENDED USE, OR A STATEMENT THAT THERE IS NO RESERVE FUND; (7) A STATEMENT OF ANY JUDGMENTS AGAINST THE CONDOMINIUM AND THE EXISTENCE OF ANY PENDING SUITS TO WHICH THE COUNCIL OF UNIT OWNERS IS A PARTY; (8) A STATEMENT GENERALLY DESCRIBING ANY INSURANCE POLICIES PROVIDED FOR THE BENEFIT OF THE UNIT OWNERS, A NOTICE THAT THE POLICIES ARE AVAILABLE FOR INSPECTION STATING THE LOCATION AT WHICH THEY ARE AVAILABLE, AND A NOTICE THAT THE TERMS OF THE POLICY PREVAIL OVER THE GENERAL DESCRIPTION; (9) A STATEMENT AS TO WHETHER THE COUNCIL OF UNIT OWNERS HAS KNOWLEDGE THAT ANY ALTERATION OR IMPROVEMENT TO THE UNIT OR TO THE LIMITED COMMON ELEMENTS ASSIGNED TO THE UNIT VIOLATES ANY PROVISION OF THE DECLARATION, BYLAWS, OR RULES OR REGULATIONS; (10) A STATEMENT AS TO WHETHER THE COUNCIL OF UNIT OWNERS HAS KNOWLEDGE OF ANY VIOLATION OF THE HEALTH OR BUILDING CODES WITH RESPECT TO THE UNIT, THE LIMITED COMMON ELEMENTS ASSIGNED TO THE UNIT, OR ANY OTHER PORTION OF THE CONDOMINIUM; (11) A STATEMENT OF THE REMAINING TERM OF ANY LEASEHOLD ESTATE AFFECTING THE CONDOMINIUM AND THE PROVISIONS GOVERNING ANY EXTENSION OR RENEWAL OF IT; AND (12) A DESCRIPTION OF ANY RECREATIONAL OR OTHER FACILITIES WHICH ARE TO BE USED BY THE UNIT OWNERS OR MAINTAINED BY THEM OR THE COUNCIL OF UNIT OWNERS, AND A STATEMENT AS TO WHETHER OR NOT THEY ARE TO BE A PART OF THE COMMON ELEMENTS; AND (V) A STATEMENT BY THE UNIT OWNER AS TO WHETHER THE UNIT OWNER HAS KNOWLEDGE: (1) THAT ANY ALTERATION TO THE UNIT OR TO THE LIMITED COMMON ELEMENTS ASSIGNED TO THE UNIT VIOLATES ANY PROVISION OF THE DECLARATION, BYLAWS, OR RULES AND REGULATIONS; (2) OF ANY VIOLATION OF THE HEALTH OR BUILDING CODES WITH RESPECT TO THE UNIT OR THE LIMITED COMMON ELEMENTS ASSIGNED TO THE UNIT; AND (3) THAT THE UNIT IS SUBJECT TO AN EXTENDED LEASE UNDER ss.11-137 OF THE MARYLAND CONDOMINIUM ACT OR UNDER LOCAL LAW, AND IF SO, A COPY OF THE LEASE MUST BE PROVIDED. SELLER WILL HAVE THE RIGHT TO CANCEL THIS AGREEMENT WITHOUT PENALTY, AT ANY TIME WITHIN SEVEN (7) DAYS FOLLOWING DELIVERY TO SELLER OF ALL OF THIS INFORMATION. HOWEVER, AFTER THE CLOSING, SELLER'S RIGHT TO CANCEL THIS AGREEMENT IS TERMINATED. 17. DISCLOSURE/DISCLAIMER STATEMENT. (a) Attached hereto as Exhibit D and incorporated herein by reference is a notice to Buyer advising Buyer of Buyer's rights under ss.10-702 of the Real Property Article of the Annotated Code of Maryland. Buyer acknowledges receipt of, and has executed, a copy of such notice. Pursuant to the provisions of ss.10-702 of the Real Property Article of the Annotated Code of Maryland, Seller has delivered to Buyer the written residential property disclaimer statement on the form attached hereto as Exhibit E and incorporated herein by reference. (b) Attached hereto as Exhibit D and incorporated herein by reference is a notice to Seller advising Seller of Seller's rights under ss. 10-702 of the Real Property Article of the Annotated Code of Maryland. Seller acknowledges receipt of, and has executed, a copy of such notice. Pursuant to the provisions of ss. 10-702 of the Real Property Article of the Annotated Code of Maryland, Buyer has delivered to Seller the written residential property disclaimer statement on the form attached hereto as Exhibit E and incorporated herein by reference. 18. FIRPTA WITHHOLDING. (a) At Closing, Seller shall provide Buyer with either (i) an affidavit in substantially the form attached hereto as Exhibit F, stating that Seller is not a foreign person (as that term is defined in Section 1445 of the Internal Revenue Code) and providing Seller's tax identification number; or (ii) a "Qualifying Statement" as such term is defined by Section 1445 of the Internal Revenue Code. (b) At Closing, Buyer shall provide Seller with either (i) an affidavit in substantially the form attached hereto as Exhibit F, stating that Buyer is not a foreign person (as that term is defined in Section 1445 of the Internal Revenue Code) and providing Buyer's tax identification number; or (ii) a "Qualifying Statement" as such term is defined by Section 1445 of the Internal Revenue Code. 19. BALTIMORE CITY - TENANT'S RIGHT OF FIRST REFUSAL. If the Property or Exchange Property is or has been, within six (6) months of the date hereof, a single family residential rental dwelling in Baltimore City, Maryland, the validity of this Agreement of Purchase and Sale is contingent upon compliance with the provisions of Article 13, Sections 46-55 of the Baltimore City Code (1976 Edition, as amended). 20. MISCELLANEOUS PROVISIONS. (a) This Agreement contains the sole, final and entire agreement between the parties and is intended to be an integration of all prior and contemporaneous agreements, conditions and undertakings between the parties. There are no promises, agreements, conditions, undertakings, warranties or representations, oral or written, express or implied, between the parties other than as herein set forth. (b) This Agreement may be amended by and only by an instrument executed and delivered by Seller and Buyer. (c) This Agreement and all of the provisions hereof shall be binding upon and shall inure to the benefit of the parties and their respective heirs, devisees, legatees, legal representatives, successors and assigns. (d) This Agreement shall be governed by and construed in accordance with the laws of the State of Maryland. (e) All provisions hereof shall survive the Closing Date, unless otherwise provided herein. (f) Each of the parties agrees to execute and deliver upon reasonable demand of the other any document or instrument that such other party reasonably deems necessary or desirable to evidence or accomplish the rights herein conferred or to implement or consummate the purposes and intent hereof (g) No determination by any court, governmental or administrative entity or otherwise that any provision of this Agreement or any amendment hereof is invalid or unenforceable in any instance shall affect the validity or enforceability of (a) any other such provision, or (b) such provision in any circumstance not controlled by such determination. Each such provision shall be valid and enforceable to the fullest extent allowed by, and shall be construed wherever possible as being consistent with, applicable law. (h) The following exhibits are attached to, and made a part of, this Agreement: A - Title Report-Property B - Title Report- Exchange Property C - Form of Deed D - Notice to Purchaser - Property Disclosure E - Property Disclaimer Statement F - FIRPTA Affidavit IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement under seal on the date first above written. WITNESS: SELLER: HENDERSON'S WHARF BALTIMORE L.P. By: Henderson's Wharf Development Corporation, General Partner By: (SEAL) Terrence P. Sullivan, President WITNESS: BUYER: (SEAL) JOSEPH V. BRADY Exhibit A I . Declaration of The Residences and Inn at Henderson's Wharf, a condominium, by Carley Capital Group dated August 30, 1988 and recorded among the Land Records of Baltimore City in Liber SEB no. 1821, folio 20, as amended by the following: a) Amendment to Declaration dated April 3, 1989 and recorded among the aforesaid Land Records in Liber SEB No. 2081, folio 329; b) Second Amendment to Declaration dated July 31, 1990 and recorded among the aforesaid Land Records in Liber SEB No. 2563, folio 230; and c) Third Amendment to Declaration dated December 14, 1992 and recorded among the aforesaid Land Records in Liber SEB No. 3578, folio 030. 2. Amended and Restated Henderson's Wharf Disposition Agreement dated October 10, 1984 and recorded among the Land Records of Baltimore City in Liber SEB No. 335, folio 062, as amended by First Amendment to Amended and Restated Henderson's Wharf Disposition Agreement dated July 31, 1990 and recorded among the aforesaid Land Records in Liber SEB No. 2563, folio 264. 3. Building Perimeter Easement and Connecting Easement established by Pedestrian Promenade Easement Agreement dated October 19, 1984 and recorded among the Land Records of Baltimore City in Liber SEB no. 335, folio 204, by and between Carley Capital Group and Mayor and City Council of Baltimore, as amended by the following: a) Amendment of Pedestrian Promenade Easement Agreement dated April 6, 1987 and recorded among the aforesaid Land Records in Liber SEB No. 1308, folio 589; and b) Second Amendment to Pedestrian Promenade Easement Agreement dated July 31, 1990 and recorded among the aforesaid Land Records in Liber SEB No. 2563, folio 241; Said easements being shown on "ALTA/ACSM Land Title Survey Henderson's Wharf Baltimore, L.P." by Beavin Company dated December 20, 1995 and last revised February 9, 1996. Company insures that the Fast Land Easement, Alternate Fast Land Easement and Fell Street Easement described is said Pedestrian Promenade Easement Agreement, as amended, do not affect the Land described in Schedule A hereof. 4. Easement to the benefit of the Marina Owner over the Building Perimeter Easement and Commercial Courtyard Area as shown on "ALTA/ACSM Land Title Survey Henderson's Wharf Baltimore, L.P." by Beavin Company dated December 20, 1995 and last revised February 9, 1996, as established by Reciprocal Easement Agreement dated August 31, 1988 and recorded among the Land Records of Baltimore City in Liber SEB No. 1824, folio 162, by and between Carley Capital Group and The Council of Unit owners of The Residences and Inn at Henderson's Wharf, a Condominium, Incorporated, as amended by: (a) Amendment to Reciprocal Easement Agreement dated July 31, 199C, and recorded among the aforesaid Land Records in Liber SEB No. 2822, folio 477; and (b) Second Amendment to Reciprocal Easement Agreement dated and recorded among the aforesaid Land Records in Liber SEB folio . 5. Terms, conditions, easements, restrictions and other criteria as shown on the Plats entitled "The Residences at Henderson's Wharf, a Condominium", as follows: (a) Sheets 1 of 11 through 11 of 11 dated August, 1988 and recorded as Condominium Plat SEB No. 232; and (b) Sheets 1 of 11 through 11 of 11 dated September, 1988 and revised December 14, 1992 and recorded as Condominium Plat SEB No. 298. 6. The portion of the Land included within the description of the Land insured hereunder which comprises filled land shown on the plat of survey entitled "ALTA/ACSM Land Title Survey Henderson's Wharf Baltimore, L.P." dated December 20, 1995, and last revised February 9, 1996, prepared by Beavin Company, as follows: (a) "area shown as 'Condominium Common Element (fast land not deeded as fast land in Liber SEB 1795, folio 449) part of commercial courtyard area limited element class El on survey entitled 'Property Survey Henderson's Wharf' dated July 30, 1990 by Beavin Company"; (b) "Inn Promenade Deck limited common element"; and (c) "12' Building Perimeter Easement" is subject to the navigation servitude and regulatory power of the Federal Government including the power to cause removal of said filled land without payment of compensation and is also subject to the regulatory power of the State of Maryland over wetlands including the power, in event of failure to comply with state law, to require restoration of said land to its former condition. 7. Rights or claims of parties other than the insured in actual possession of any or all of the property. Exhibit B I. Declaration of The Residences and Inn at Henderson's Wharf, a condominium, by Carley Capital Group dated August 30, 1988 and recorded among the Land Records of Baltimore City in Liber SEB no. 1821, folio 20, as amended by the following: a) Amendment to Declaration dated April 3, 1989 and recorded among the aforesaid Land Records in Liber SEB No. 2081, folio 329; b) Second Amendment to Declaration dated July 31, 1990 and recorded among the aforesaid Land Records in Liber SEB No. 2563, folio 230; and c) Third Amendment to Declaration dated December 14, 1992 and recorded among the aforesaid Land Records in Liber SEB No. 3578, folio 030. 2. Amended and Restated Henderson's Wharf Disposition Agreement dated October 10, 1984 and recorded among the Land Records of Baltimore City in Liber SEB No. 335, folio 062, as amended by First Amendment to Amended and Restated Henderson's Wharf Disposition Agreement dated July 31, 1990 and recorded among the aforesaid Land Records in Liber SEB No. 2563, folio 264. 3. Building Perimeter Easement and Connecting Easement established by Pedestrian Promenade Easement Agreement dated October 19, 1984 and recorded among the Land Records of Baltimore City in Liber SEB no. 335, folio 204, by and between Carley Capital Group and Mayor' and City Council of Baltimore, as amended by the following: a) Amendment of Pedestrian Promenade Easement Agreement dated April 6, 1987 and recorded among the aforesaid Land Records in Liber SEB No. 1308, folio 589; and b) Second Amendment to Pedestrian Promenade Easement Agreement dated July 31, 1990 and recorded among the aforesaid Land Records in Liber SEB No. 2563, folio 241; Said easements being shown on "ALTA/ACSM Land Title Survey Henderson's Wharf Baltimore, L.P." by Beavin Company dated December 20, 1995 and last revised February 9, 1996. Company insures that the Fast Land Easement, Alternate Fast Land Easement and Fell Street Easement described is said Pedestrian Promenade Easement Agreement, as amended, do not affect the Land described in Schedule A hereof. 4. Easement to the benefit of the Marina Owner over the Building Perimeter Easement and Commercial Courtyard Area as shown on "ALTA/ACSM Land Title Survey Henderson's Wharf Baltimore, L.P." by Beavin Company dated December 20, 1995 and last revised February 9, 1996, as established by Reciprocal Easement Agreement dated August 31, 1988 and recorded among the Land Records of Baltimore City in Liber SEB No. 1824, folio 162, by and between Carley Capital Group and The Council of Unit owners of The Residences and Inn at Henderson's Wharf, a Condominium, Incorporated, as amended by: (a) Amendment to Reciprocal Easement Agreement dated July 31, 199C and recorded among the aforesaid Land Records in Liber SEB No. 2822, folio 477; and (b) Second Amendment to Reciprocal Easement Agreement dated and recorded among the aforesaid Land Records in Liber SEB folio 5. Terms, conditions, easements, restrictions and other criteria as shown on the Plats entitled "The Residences at Henderson's Wharf, a Condominium", as follows: (a) Sheets 1 of 11 through 11 of 11 dated August, 1988 and recorded as Condominium Plat SEB No. 232; and (b) Sheets 1 of 11 through 11 of 11 dated September, 1988 and revised December 14, 1992 and recorded as Condominium Plat SEB No. 298. 6. The portion of the Land included within the description of the Land insured hereunder which comprises filled land shown on the plat of survey entitled "ALTA/ACSM Land Title Survey Henderson's Wharf Baltimore, L.P." dated December 20, 1995, and last revised February 9, 1996, prepared by Beavin Company, as follows: (a) "area shown as 'Condominium Common Element (fast land not deeded as fast land in Liber SEB 1795, folio 449) part of commercial courtyard area limited element class El on survey entitled 'Property Survey Henderson's Wharf' dated July 30, 1990 by Beavin Company"; (b) "Inn Promenade Deck limited common element"; and (c) "12' Building Perimeter Easement" is subject to the navigation servitude and regulatory power of the Federal Government including the power to cause removal of said filled land without payment of compensation and is also subject to the regulatory power of the State of Maryland over wetlands including the power, in event of failure to comply with state law, to require restoration of said land to its former condition. 7. Rights or claims of parties other than the insured in actual possession of any or all of the property. EXHIBIT C DEED OF EXCHANGE THIS DEED OF EXCHANGE ("Deed of Exchange") is made on this day of , 1998, by and between HENDERSON'S WHARF BALTIMORE L.P., a Delaware limited partnership ("Henderson's Wharf') and JOSEPH BRADY ("Brady"). WHEREAS, Henderson's Wharf is the owner of a condominium unit and parking units situate in Baltimore City, Maryland, being known and designated as Condominium Unit No. 610 and Parking Unit No. P-70 and Parking Unit No. P-71 in THE RESIDENCES AND INN AT HENDERSON'S WHARF, A CONDOMINIUM, as established pursuant to a Declaration dated August 30, 1988, and recorded among the Land Records of Baltimore City (the "Land Records") at Liber S.E.B. No. 1821, page 20, as amended by Amendment to Declaration dated April 3, 1989 and recorded among the Land Records at Liber S.E.B. No. 2081, folio 329, and as further amended by Second Amendment to Declaration dated July 31, 1990, and recorded among the Land Records at Liber S.E.B. No. 2563, folio 230, and as further amended by Third Amendment to Declaration dated as of December 14, 1992, and recorded among the Land Records at Liber S.E.B. No. 3578, folio 30 (as amended, the "Declaration"), and the Bylaws attached thereto (the "Bylaws"), and as shown on those certain plats entitled "Condominium Plat, The Residences and Inn at Henderson's Wharf, a Condominium," dated August, 1988, and recorded among the Plat Records of Baltimore City at Condominium Plat Record Book S.E.B. No. 232, Sheets I through 11, as amended by condominium plats dated December 14, 1992, and recorded among the Plat Records of Baltimore City at Condominium Plat Record Book S.E.B. 298, Sheets I through 11 (as amended, the "Condominium Plats"). The improvements thereon being known as 1000 Fell Street, Unit No. 610, along with Parking Unit No. P-70 and Parking Unit No. P-71 are hereinafter referred to as the "Henderson Unit"; and WHEREAS, Brady is the owner of a condominium unit and parking units situate in Baltimore City, Maryland, being known and designated as Condominium Unit No. 422 and Parking Unit No. P-45 and Parking Unit No. P-46 in THE RESIDENCES AND INN AT HENDERSON'S WHARF, A CONDOMINIUM, as established pursuant to the Declaration and the Bylaws, and as shown on the Condominium Plats. The improvements thereon being known as 1000 Fell Street, Unit No. 422, along with Parking Unit No. P-45 and Parking Unit No. P-46 are hereinafter referred to as the "Brady Unit"; and WHEREAS, Henderson's Wharf and Brady wish to exchange between each other the Henderson Unit and the Brady Unit. NOW, THEREFORE, WITNESSETH: That for and in consideration of: (i) the sum of One Hundred Thirty Five Thousand Dollars ($135,000.00), and (ii) the conveyance by Brady to Henderson's Wharf of the Brady Unit, the receipt and sufficiency of which are hereby acknowledged, Henderson's Wharf does hereby grant, convey and assign unto Brady, his personal representatives, heirs and assigns, in fee simple, the Henderson Unit. BEING a portion of the property which by Deed dated July 31, 1990, and recorded among the Land Records of Baltimore City at Liber SEB 2563, folio 119, was granted and conveyed by Joseph E. Robert, Jr. and Kenneth M. Stein, Trustees and HWFP, Inc., a Maryland corporation, to Henderson's Wharf. TOGETHER WITH all improvements contained in the Henderson Unit, and all appurtenances and advantages thereunto pertaining, including an undivided percentage interest in the common elements, common expenses and common profits in the condominium regime as set forth in the Declaration, the Bylaws and the Condominium Plats. TO HAVE AND TO HOLD the Henderson Unit to Brady, his personal representatives, heirs and assigns, in fee simple, but subject to the operation and effect of all matters of record. AND Henderson's Wharf hereby covenants that it has not done or suffered to be done any act, matter or thing whatsoever to encumber the property hereby granted and conveyed by Henderson's Wharf; that it will warrant specially the property hereby granted and conveyed by Henderson's Wharf, and that it will execute such further assurances of the same as may be requisite. AND FURTHER WITNESSETH: That for and in consideration of: (i) the sum of zero dollars ($0.00); and (ii) in partial consideration of the conveyance of the Henderson Unit to Brady, Brady does hereby grant, convey and assign unto Henderson's Wharf, its successors and assigns, in fee simple, the Brady Unit. BEING the same property which by Deed dated August 4, 1989 and recorded among the Land Records of Baltimore City at Liber S.E.B. 2193, folio 355, was granted and conveyed by Joseph E. Robert, Jr. and Kenneth M. Stein, Trustees and HWFP, Inc., a Maryland corporation, to Brady. TOGETHER WITH all improvements contained in the Brady Unit, and all appurtenances and advantages thereunto pertaining, including an undivided percentage interest in the common elements, common expenses and common profits in the condominium regime as set forth in the Declaration, the Bylaws and the Condominium Plats. TO HAVE AND TO HOLD the Brady Unit to Henderson's Wharf, its successors and assigns, in fee simple, but subject to the operation and effect of all matters of record. AND Brady hereby covenants that he has not done or suffered to be done any act, matter or thing whatsoever to encumber the property hereby granted and conveyed by Brady; that he will warrant specially the property hereby granted and conveyed by Brady; and that he will execute such further assurances of the same as may be requisite. IN WITNESS WHEREOF, Henderson's Wharf and Brady have executed this Deed of Exchange under seal on the date first above written. WITNESS: HENDERSON'S WHARF: HENDERSON'S WHARF BALTIMORE L.P. By: Henderson's Wharf Development Corporation, General Partner By: (SEAL) WITNESS: BRADY: (SEAL) Joseph Brady STATE OF MARYLAND ) )to wit: COUNTY OF ) I HEREBY CERTIFY that on this day of 1998, before me, the subscriber, a Notary Public of the State of Maryland, personally appeared of Henderson's Wharf Development Corporation, General Partner of Henderson's Wharf Baltimore L.P., and that he/she as such officer, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing in my presence the name of the corporation by himself as such officer. IN WITNESS WHEREOF, I have hereunto set my hand and Notarial Seal. Notary Public My Commission Expires: STATE OF MARYLAND ) )to wit: COUNTY OF ) I HEREBY CERTIFY that on this _ day of 1998, before me, the subscriber, a Notary Public of the State of Maryland, personally appeared JOSEPH BRADY, known to me (or satisfactorily proven) to be the person whose name is subscribed to the within instrument, and he acknowledged that he executed the foregoing instrument for the purposes therein contained. IN WITNESS WHEREOF, I have hereunto set my hand and Notarial Seal. Notary Public My Commission Expires: CERTIFICATE THE UNDERSIGNED, AN ATTORNEY ADMITTED TO PRACTICE BEFORE THE COURT OF APPEALS OF MARYLAND, HEREBY CERTIFIES THAT THE ABOVE INSTRUMENT WAS PREPARED BY ME OR UNDER MY SUPERVISION. Richard Rubin, Attorney MR./MS. CLERK: AFTER THIS DEED OF EXCHANGE HAS BEEN RECORDED, PLEASE RETURN TO: Richard Rubin, Esq. Neuberger, Quinn, Gielen, Rubin & Gibber, P.A. Commerce Place, 27th Floor One South Street Baltimore, Maryland 21202-3201 EXHIBIT D NOTICE TO BUYER OF BUYER'S RIGHT UNDER MARYLAND'S PROPERTY DISCLOSURE LAW NOTE: This Notice does not apply to: (1) The initial sale of single family residential real property; (2) a transfer that is exempt from the transfer tax under ss.13-207 of the Tax-Property Article, except land installment contracts of sale under ss.13-207(11) of the Tax-Property Article and options to purchase real property under ss.13-207(12) of the Tax-Property Article; (3) a sale by a lender acquiring the real property by foreclosure or deed in lieu of foreclosure; (4) a sheriff's sale, tax sale, or sale by foreclosure, partition or by court appointed trustee; (5) a transfer by a fiduciary in the course of the administration of a decedent's estate, guardianship, conservatorship, or trust; or (6) a transfer of single family residential real property to be converted by the buyer into a use other than residential use or to be demolished. SECTION 10-702 OF THE REAL PROPERTY ARTICLE OF THE ANNOTATED CODE OF MARYLAND ("SECTION 10-702") REQUIRES THAT SELLERS OF SINGLE FAMILY RESIDENTIAL PROPERTY PROVIDE YOU, THE BUYER, ON OR BEFORE ENTERING INTO A CONTRACT OF SALE, EITHER: (A) A WRITTEN PROPERTY CONDITION DISCLOSURE STATEMENT LISTING ALL DEFECTS OR INFORMATION OF WHICH THE SELLER HAS ACTUAL KNOWLEDGE IN RELATION TO THE FOLLOWING: (I) WATER AND SEWER SYSTEMS, INCLUDING THE SOURCE OF HOUSEHOLD WATER, WATER TREATMENT SYSTEMS, AND SPRINKLER SYSTEMS; (II) INSULATION; (III) STRUCTURAL SYSTEMS, INCLUDING THE ROOF, WALLS, FLOORS, FOUNDATION, AND ANY BASEMENT; (IV) PLUMBING, ELECTRICAL, HEATING, AND AIR CONDITIONING SYSTEMS; (V) INFESTATION OF WOOD-DESTROYING INSECTS; (VI) LAND USE MATTERS; (VII) HAZARDOUS OR REGULATED MATERIALS, INCLUDING ASBESTOS, LEAD-BASED PAINT, RADON, UNDERGROUND STORAGE TANKS, AND LICENSED LANDFILLS; AND (VIII) ANY OTHER MATERIAL DEFECTS KNOWN TO THE SELLER; OR (B) A WRITTEN DISCLAIMER STATEMENT PROVIDING THAT: (I) THE SELLER MAKES NO REPRESENTATIONS OR WARRANTIES AS TO THE CONDITION OF THE REAL PROPERTY OR ANY IMPROVEMENTS ON THE REAL PROPERTY; AND (II) THE BUYER WILL BE RECEIVING THE REAL PROPERTY "AS IS", WITH ALL DEFECTS THAT MAY EXIST, EXCEPT AS OTHERWISE PROVIDED IN THE CONTRACT OF SALE. AT THE TIME THE DISCLOSURE OR DISCLAIMER STATEMENT IS DELIVERED TO YOU, YOU ARE REQUIRED TO DATE AND SIGN A WRITTEN ACKNOWLEDGEMENT OF RECEIPT, WHICH SHALL BE INCLUDED IN OR ATTACHED TO THE CONTRACT OF SALE. YOU ARE HEREBY NOTIFIED THAT, IN CERTAIN CIRCUMSTANCES, YOU HAVE THE RIGHT TO RESCIND YOUR CONTRACT OF SALE WITH THE SELLER IF THE SELLER FAILS TO DELIVER TO YOU THE WRITTEN PROPERTY CONDITION DISCLOSURE STATEMENT. SECTION 10-702 PROVIDES THAT A BUYER WHO DOES NOT RECEIVE THE DISCLOSURE STATEMENT ON OR BEFORE ENTERING INTO THE CONTRACT OF SALE HAS THE UNCONDITIONAL RIGHT, UPON WRITTEN NOTICE TO THE SELLER OR SELLER'S AGENT: (I) TO RESCIND THE CONTRACT OF SALE AT ANY TIME BEFORE THE RECEIPT OF THE DISCLOSURE STATEMENT OR WITHIN 5 DAYS FOLLOWING RECEIPT OF THE DISCLOSURE STATEMENT; AND (II) TO THE IMMEDIATE RETURN OF ANY DEPOSITS MADE ON ACCOUNT OF THE CONTRACT. IF THE DISCLOSURE STATEMENT IS DELIVERED TO YOU LATER THAN 3 DAYS AFTER THE SELLER ENTERS INTO A CONTRACT OF SALE WITH YOU, THE CONTRACT IS VOID. YOUR RIGHT TO RESCIND THE CONTRACT OF SALE UNDER SECTION 10-702 TERMINATES IF NOT EXERCISED BEFORE MAKING A WRITTEN APPLICATION TO A LENDER FOR A MORTGAGE LOAN, IF THE LENDER DISCLOSES IN WRITING AT OR BEFORE THE TIME APPLICATION IS MADE THAT THE RIGHT TO RESCIND TERMINATES ON SUBMISSION OF THE APPLICATION. YOUR RIGHTS AS A BUYER UNDER SECTION 10-702 MAY NOT BE WAIVED IN THE CONTRACT OF SALE AND ANY ATTEMPTED WAIVER IS VOID. YOUR RIGHTS AS THE BUYER TO TERMINATE THE CONTRACT UNDER SECTION 10-702 ARE WAIVED CONCLUSIVELY IF NOT EXERCISED BEFORE: (I) CLOSING OR OCCUPANCY BY YOU, WHICHEVER OCCURS FIRST, IN THE EVENT OF A SALE; OR (II) OCCUPANCY, IN THE EVENT OF A LEASE WITH OPTION TO PURCHASE. THE INFORMATION CONTAINED IN THE PROPERTY CONDITION DISCLOSURE STATEMENT IS THE REPRESENTATION OF THE SELLER AND NOT THE REPRESENTATION OF THE REAL ESTATE BROKER OR SALESPERSON, IF ANY. THE SELLER IS NOT REQUIRED TO UNDERTAKE OR PROVIDE AN INDEPENDENT INVESTIGATION OR INSPECTION OF THE PROPERTY IN ORDER TO MAKE THE DISCLOSURES REQUIRED BY SECTION 10-702. THE SELLER IS NOT LIABLE FOR AN ERROR, INACCURACY OR OMISSION IN THE DISCLOSURE STATEMENT IF THE ERROR, INACCURACY, OR OMISSION WAS BASED UPON INFORMATION THAT WAS NOT WITHIN THE ACTUAL KNOWLEDGE OF THE SELLER; OR WAS PROVIDED TO THE SELLER BY A THIRD PARTY. YOU HAVE THE RIGHT TO OBTAIN PROFESSIONAL ADVICE ABOUT THE PROPERTY OR OBTAIN AN INSPECTION OF THE PROPERTY. THE UNDERSIGNED BUYER(S) ACKNOWLEDGES RECEIPT OF THIS NOTICE ON THE DATE INDICATED BELOW. WITNESS: BUYER DATE BUYER DATE EXHIBIT E MARYLAND RESIDENTIAL PROPERTY DISCLAIMER STATEMENT NOTICE TO SELLER AND BUYER Section ss. 10-702 of the Real Property Article, Annotated Code of Maryland, requires the owner of certain residential real property to furnish to the BUYER either (a) a RESIDENTIAL PROPERTY DISCLAIMER STATEMIENT stating that the owner is selling the property "as is" and makes no representations or warranties as to the condition of the property or any improvements on the real property, except as otherwise provided in the contract of sale, or (b) a RESIDENTIAL PROPERTY DISCLOSURE STATENIENT disclosing defects or other information about the condition of the real property actually known by the owner. Certain transfers of residential property are excluded from this requirement (see the exemptions listed below). MARYLAND RESIDENTIAL PROPERTY DISCLAIMER STATEMENT NOTICE TO OWNER(S): Sign this statement only if you elect to sell the property without representations and warranties as to its condition, except as otherwise provided in the contract of sale; otherwise, complete and sign the RESIDENTIAL PROPERTY DISCLOSURE STATEMENT. Property Address: Legal Description: The undersigned owner(s) of the real property described above make no representations or warranties as to the condition of the real property or any improvements thereon, and the BUYER will be receiving the real property "as is", with all defects which may exist, except as otherwise provided in the real estate contract of sale. The owner(s) acknowledge having carefully examined this statement and further acknowledge that they have been informed of their rights and obligations under Section ss.10-702 of the Maryland Real Property Article. Owner: Date: Owner: Date: The BUYER(s) acknowledge receipt of a copy of this disclaimer statement and further acknowledge that they have been informed of their rights and obligations under Section ss.10-702 of the Maryland Real Property Article. BUYER: Date: BUYER: Date: MARYLAND RESIDENTIAL PROPERTY DISCLOSURE ACT 10-702. Exeptions. - The following are specifically excluded from the provisions of Section 10-702: 1. The initial sale of single family Residential Real Property; 2. A transfer that is exempt from the transfer tax under ss.13-207 of the Tax-Property Article, except land installment contracts of sale under ss.13-207(11) of the Tax-Property Article except hand installment Contracts of Sale under ss. 13-207(l 1) of the Tax Property Article and options to purchase real property under ss.13-207(12) of the Tax-Property Article; 3. A sale by a lender acquiring the Real Property by foreclosure or deed in lieu of foreclosure; 4. A sheriff's sale, tax sale, or sale by foreclosure, partition, or by court appointed trustee; 5. A transfer by a fiduciary in the course of the administration of a decedent's estate, guardianship, conservatorship, or trust; or 6. A transfer of single family Residential Real Property to be converted by the Buyer into a use other than residential use or to be demolished. EXHIBIT F CERTIFICATION OF NON-FOREIGN STATUS REGARDING WITHHOLDING OF TAX ON DISPOSITION OF UNITED STATES REAL PROPERTY INTERESTS Section 1445 of the Internal Revenue Code provides that a transferee of a U.S. real property interest must withhold tax if the transferor is a foreign person. To inform ("Transferee") that withholding of tax is not required upon my disposition of a U.S. real property interest, I hereby certify the following to Transferee: 1. I am not a nonresident alien for purposes of U.S. income taxation; 2. My U.S. taxpayer identifying number is ;and 3. My home address is I understand that this certificate may be disclosed to the Internal Revenue Service by Transferee and that any false statement I have made here could be punished by fine, imprisonment, or both. Under penalties of perjury, I declare that I have examined this certification and to the best of my knowledge and belief it is true, correct and complete. DEED OF EXCHANGE THIS DEED OF EXCHANGE ("Deed of Exchange") is made on this 17 day of March, 1998, by and between HENDERSON'S WHARF BALTIMORE L.P., a Delaware limited partnership ("Henderson's Wharf') and JOSEPH BRADY ("Brady"). WHEREAS, Henderson's Wharf is the owner of a condominium unit and parking units situate in Baltimore City, Maryland, being known and designated as Condominium Unit No. 610 and Parking Unit No. P-70 and Parking Unit No. P-71 in THE RESIDENCES AND INN AT HENDERSON'S WHARF, A CONDOMINIUM, as established pursuant to a Declaration dated August 30, 1988, and recorded among the Land Records of Baltimore City (the "Land Records") at Liber S.E.B. No. 1821, page 20, as amended by Amendment to Declaration dated April 3, 1989 and recorded among the Land Records at Liber S.E.B. No. 2081, folio 329, and as further amended by Second Amendment to Declaration dated July 31, 1990, and recorded among the Land Records at Liber S.E.B. No. 2563, folio 230, and as further amended by Third Amendment to Declaration dated as of December 14, 1992, and recorded among the Land Records at Liber S.E.B. No. 3578, folio 30 (as amended, the "Declaration"), and the Bylaws attached thereto (the "Bylaws"), and as shown on those certain plats entitled "Condominium Plat, The Residences and Inn at Henderson's Wharf, a Condominium," dated August, 1988, and recorded among the Plat Records of Baltimore City at Condominium Plat Record Book S.E.B. No. 232, Sheets I through 11, as amended by condominium plats dated December 14, 1992, and recorded among the Plat Records of Baltimore City at Condominium Plat Record Book S.E.B. 298, Sheets 1 through I I (as amended, the "Condominium Plats"). The improvements thereon being known as 1000 Fell Street, Unit No. 610, along with Parking Unit No. P-70 and Parking Unit No. P-71 are hereinafter referred to as the "Henderson Unit"; and WHEREAS, Brady is the owner of a condominium unit and parking units situate in Baltimore City, Maryland, being known and designated as Condominium Unit No. 422 and Parking Unit No. P-45 and Parking Unit No. P-46 in THE RESIDENCES AND INN AT HENDERSON'S WHARF, A CONDOMINIUM, as established pursuant to the Declaration and the Bylaws, and as shown on the Condominium Plats. The improvements thereon being known as 1000 Fell Street, Unit No. 422, along with Parking Unit No. P-45 and Parking Unit No. P-46 are hereinafter referred to as the "Brady Unit"; and WHEREAS, Henderson's Wharf and Brady wish to exchange between each other the Henderson Unit and the Brady Unit. NOW, THEREFORE, WITNESSETH: That for and in consideration of: (i) the sum of One Hundred Thirty Five Thousand Dollars ($135,000.00), and (ii) the conveyance by Brady to Henderson's Wharf of the Brady Unit, the receipt and sufficiency of which are hereby acknowledged, Henderson's Wharf does hereby grant, convey and assign unto Brady, his personal representatives, heirs and assigns, in fee simple, the Henderson Unit. BEING a portion of the property which by Deed dated July 31, 1990, and recorded among the Land Records of Baltimore City at Liber SEB 2563, folio 119, was granted and conveyed by Joseph E. Robert, Jr. and Kenneth M. Stein, Trustees and HWFP, Inc., a Maryland corporation, to Henderson's Wharf TOGETHER WITH all improvements contained in the Henderson Unit, and all appurtenances and advantages thereunto pertaining, including an undivided percentage interest in the common elements, common expenses and common profits in the condominium regime as set forth in the Declaration, the Bylaws and the Condominium Plats. TO HAVE AND TO HOLD the Henderson Unit to Brady, his personal representatives, heirs and assigns, in fee simple, but subject to the operation and effect of all matters of record. AND Henderson's Wharf hereby covenants that it has not done or suffered to be done any act, matter or thing whatsoever to encumber the property hereby granted and conveyed by Henderson's Wharf-, that it will warrant specially the property hereby granted and conveyed by Henderson's Wharf, and that it will execute such further assurances of the same as may be requisite. AND FURTHER WITNESSETH: That for and in consideration of: (i) the sum of zero dollars ($0.00); and (ii) in partial consideration of the conveyance of the Henderson Unit to Brady, Brady does hereby grant, convey and assign unto Henderson's Wharf, its successors and assigns, in fee simple, the Brady Unit. BEING the same property which by Deed dated August 4, 1989 and recorded among the Land Records of Baltimore City at Liber S.E.B. 2193, folio 355, was granted and conveyed by Joseph E. Robert, Jr. and Kenneth M. Stein, Trustees and HWFP, Inc., a Maryland corporation, to Brady. TOGETHER WITH all improvements contained in the Brady Unit, and all appurtenances and advantages thereunto pertaining, including an undivided percentage interest in the common elements, common expenses and common profits in the condominium regime as set forth in the Declaration, the Bylaws and the Condominium Plats. TO HAVE AND TO HOLD the Brady Unit to Henderson's Wharf, its successors and assigns, in fee simple, but subject to the operation and effect of all matters of record. AND Brady hereby covenants that he has not done or suffered to be done any act, matter or thing whatsoever to encumber the property hereby granted and conveyed by Brady; that he will warrant specially the property hereby granted and conveyed by Brady; and that he will execute such further assurances of the same as may be requisite. IN WITNESS WHEREOF, Henderson's Wharf and Brady have executed this Deed of Exchange under seal on the date first above written. WITNESS: HENDERSON'S WHARF: HENDERSON'S WHARF BALTIMORE L.P. By: Henderson's Wharf Development Corporation, General Partner By: (SEAL) Terrence P. Sullivan, President BRADY: (SEAL) Joseph Brady STATE OF MASSACHUSETTS ) )to wit CITY/COUNTY OF ) I HEREBY CERTIFY that on this 17 day of March 1998, before me the subscriber, a Notary Public of the State of Massachusetts, personally appeared Terrence P Sullivan, President of Henderson's Wharf Development Corporation, General Partner o Henderson's Wharf Baltimore L.P., and that he as such officer, being authorized so to do executed the foregoing instrument for the purposes therein contained, by signing in my presence the name of the corporation by himself as such officer. IN WITNESS WHEREOF, I have hereunto set my hand and Notarial Seal. Notary Public My Commission Expires: STATE OF MARYLAND ) ) to wit: CITY OF BALTIMORE ) I HEREBY CERTIFY that on this 17 day of March 1998, before me, the subscriber, a Notary Public of the State of Maryland, personally appeared JOSEPH BRADY, known to me (or satisfactorily proven) to be the person whose name is subscribed to the within instrument, and he acknowledged that he executed the foregoing instrument for the purposes therein contained. IN WITNESS WHEREOF, I have hereup4,y set my hand and Notarial Seal. Notary Public My Commission Expires: CERTIFICATE THE UNDERSIGNED, AN ATTORNEY ADMITTED TO PRACTICE BEFORE THE COURT OF APPEALS OF MARYLAND, HEREBY CERTIFIES THAT THE ABOVE INSTRUMENT WAS PREPARED BY ME OR UNDER MY SUPERVISION. Richard Rubin, Attorney MR./MS. CLERK: AFTER THIS DEED OF EXCHANGE HAS BEEN RECORDED, PLEASE RETURN TO: Richard Rubin, Esq. Neuberger, Quinn, Gielen, Rubin & Gibber, P.A. Commerce Place, 27th Floor One South Street Baltimore, Maryland 21202-3201 EX-10 4 MANAGEMENT AGREEMENT PRIMARY PROPERTY MANAGEMENT AGREEMENT This Agreement is made this 18th day of May, 1998 between Henderson's Wharf Baltimore L.P. ("Owner") and Gunn Financial Incorporated ("Agent"). 1. Appointment and Acceptance. The Owner appoints the Agent as exclusive agent for the property described in Section 2 of this Agreement, and the Agent accepts the appointment subject to the terms and conditions set forth in this Agreement. 2. Description of Project. The property to be managed by the Agent under this Agreement (the "Project") is a housing development consisting of the land, buildings and other improvements. The Project is further described as follows: NAME: Henderson's Wharf LOCATION: 1000 Fell St., Baltimore, MD NO. OF DWELLINGS: 128 Apartment Units 38 Room Inn 152 Space Parking Garage 3. Marketing. The Agent will carry out marketing in accordance with the approved marketing plan. 4. Rentals. The Agent will offer for rent and will rent the dwelling units. Incident thereto, the following provisions will apply: A. The Agent will set up and maintain a Management Office to service the Project, or make other arrangements acceptable to the Owner. B. The Agent will follow an approved marketing plan as agreed to by the Owner and the Agent. C. The Agent will show the premises to prospective tenants. D. The Agent will take and process applications for rentals during normal business hours and at other times as may be required by the Owner. The Agent agrees to review each prospective applicant and related applicant data prior to the acceptance or rejection of said applicant. E. The Agent will prepare all dwelling leases and will execute the same in its name, identifying itself thereon as Agent for the Owner. (Dwelling leases will be in a form approved by the Owner, but individual dwelling leases need not be submitted for the approval of the Owner). F. The Owner will furnish the Agent with any approved rent schedule and any other charges for facilities and services. G. The Agent will maintain and submit financial records and accounts of the operation of the property. H. The Agent will maintain a current list of acceptable prospective tenants in accordance with the provisions of any approved marketing plan and will handle all arrangements necessary to assure full occupancy. 5. Collection of rents and Other Receipts. The Agent will collect and deposit rents in accordance with the terms of each tenants lease. All funds collected by the Agent shall be deposited promptly by the Agent in a bank account in an institution whose deposits are insured by an agency of the United States of America; this account shall be used exclusively by the Agent for funds of this project and be known as the Rental Agency account. All security deposit funds received by the Agent shall be deposited in a separate interest bearing escrow account insured by an agency of the United States of America in accordance with the Laws of the State of Maryland. 6. Enforcement of Leases. The Agent will secure full compliance of each tenant with the terms of his lease. The Agent will lawfully terminate any tenancy when, in the Agents judgment, sufficient cause (including, but not limited to, non payment of rent) for such termination occurs under the term of the tenant's lease. For this purpose, the Agent is authorized to consult with legal counsel of its choice to bring actions for evictions, and to execute notices to vacate and judicial pleadings incident to such actions. Attorneys fees other necessary costs incurred in connection with such actions will be paid from the Rental Agency Account as project expenses. Notwithstanding anything herein to the contrary, the Agent agrees to review each prospective termination with the Owner prior to commencement of the termination process. In the event of a dispute between the Agent and the Owner with respect to enforcement of lessee (Paragraph 6), the Agent and Owner agree to mediation. 7. Maintenance and Repair. The Agent will cause the Project to be maintained and repaired, in accordance with state and local codes, in a condition at all times acceptable to the Owner, including but not limited to cleaning, painting, decorating, plumbing, carpentry, grounds care and such other maintenance and repair work as may be necessary. Incident thereto the following provisions will apply: A. Special attention will be given to preventative maintenance. B. The Agent is authorized to purchase all materials, equipment, tools, appliances, supplies, and services necessary for proper maintenance and repair in accordance with the budget established with the Owner. C. Notwithstanding any of the foregoing provisions, the prior approval of the Owner for any expenditure which exceeds $1,500 in any one instance for labor, materials and otherwise for maintenance in connection within the maintenance and repair of the Project; except for recurring expenses within the limits of and already included in the operating budget or for emergency repairs involving manifest danger to persons or property, or required to avoid suspension of any necessary service to the Project. In the latter event, the Agent will inform the Owner of the facts as promptly as possible. D. The Agent shall take such action as may be necessary to comply with any and all orders or requirements affecting the premises, municipal authority having jurisdiction thereof, as well as authorities of the Board of Fire Underwriters or other similar bodies; the Agent is nonetheless subject to the same limitation contained in Paragraph C. of this section in connection with the making of repairs and alterations. The Agent shall not take any action under this Paragraph D so long as the Primary Manager is contesting, or has affirmed his intention to contest, any such order or requirement. 8. Utilities & Services. The Primary Manager, unless the Agent is authorized in writing, will make arrangements for water , electricity, gas fuel, oil, sewage and trash disposal, pest extermination, decorating and laundry facilities. The Primary Manager, unless the Agent is authorized in writing, will make such contracts as may be necessary to secure utilities and services. 9. Disbursements from Rental Agency Account. A. From the funds collected and deposited by the Agent in the Rental Agency Account, pursuant to Section 5. above, the Agent will make the following disbursements promptly when payable: (1) Compensation payable to the Agent pursuant to Section 18. below for its service hereunder and reimbursement to the Agent for compensation payable to the employees, specified in Section 18. below, and for the taxes and assessments payable to local, state and federal governments in connection with the employment of such personnel. (2) The single aggregate payment required to be made monthly by the Owner to the Mortgagee, including the amounts due under the mortgage for principal amortization, interest, mortgage insurance premiums, ground rents, taxes and assessments, fire and other hazards, and insurance premiums and the amount specified (or an amount agreed upon) for allocation to the Reserve for Replacement escrow. (3) All sums otherwise due and payable by the Owner as expenses of the Project, authorized to be incurred by the Agent under the terms of this Agreement. B. Except for the disbursements mentioned in Section 9.A(1)-(3) above, funds will be disbursed or transferred from the Rental Agency Account only as the Owner may from time to time direct in writing. C. In the event that the balance in the Rental Agency Account is at any time insufficient to pay disbursements due, the Agent will within thirty days inform the Owner of the fact, and the Owner will then remit to the Agent sufficient funds to cover the deficiency. In no event will the Agent be required to use its funds to pay such disbursements. 10. Budgets. Annual operating budgets for the project will exist, as approved by the Owner; the Agent will use best efforts to see that each type of operating expense itemized in the budget will not exceed the annual amount authorized by the approved budget. In addition to preparation and submission of a recommended operating budget for the initial fiscal year, the Agent will prepare a recommended operating budget for each subsequent fiscal year and will submit the same to the Owner at least sixty (60) days before the beginning of each new fiscal year. The Owner will promptly inform the Agent, of changes, if any, incorporated in the annual budget, and the Agent will keep the Owner informed of any anticipated deviation from the receipts or disbursements stated in the approved budget. 11. Records and Reports. In addition to any other requirements specified in this Agreement, the Agent will have the following responsibilities with respect to records and reports: A. The Agent will establish and maintain a comprehensive system of records, books and accounts. B. Within twenty (20) days following the end of each fiscal year of the project, the Owner shall be furnished with all information necessary to prepare for an audit of the financial statements of the project including an examination of the books, records and detailed itemized statement of all income and expenditures. Owner and/or its designated certified public accounts shall have access to accounting records at the Agent's home office to perform the annual audit. C. By the fifteenth (15) day of each month, the Agent will furnish the Owner with a balance sheet, statement of receipts and disbursements for the previous month, schedules of accounts receivable and payables, and reconciled bank statements for the Rental Agency Account and Deposit Account as of the end of the previous month, and any other documentation reasonably requested by the Owner. 12. Bids, Discounts, Rebates, etc. The Agent will obtain contracts, materials, supplies, utilities, and services on the most advantageous terms to the Project. It is required to solicit bids in writing for all costs greater than $2,000 for those items that can be obtained from more than one source. The Agent will secure and credit to the Owner, and not receive or retain for itself, all discounts, rebates, or commissions obtainable with respect to purchases, service contracts, and or all other transactions regarding the Project. 13. Emergency Answering Services. The Agent will provide emergency telephone and repair capability on a twenty-four (24) hour basis. 14. Insurance. The Owner shall direct the Agent top purchase insurance coverage for the premises and the operations thereof, then, within ten (10) days of such direction, the Owner shall provide written notice to the Agent as to the company, coverage, policy limits, and the named insured that are to be included in such insurance. The Agent will pay all insurance premiums from the Operating Account, which premiums will be treated as operating expenses. The Owner agrees that such coverage shall include, as a minimum, Commercial General Liability coverage written on an assurance form, having limits of liability of not less than $1,000,000 each occurrence and $2,000,000 general aggregate. The Agent shall be designated on any and all such policies as an additional insured. In addition, Agent shall purchase fidelity insurance in the amount of $1,000,000 with a comp[any satisfactory to it with respect to all such employees of Agent who are responsible for or are involved in the collection of safekeeping of receipts or other funds hereunder received by Agent; the cost of such coverage shall not be included as an operating expense. 15. Compliance with Government Orders. The Agent will take such action as may be necessary to comply promptly with any and all government orders or other requirements affecting the Project, whether imposed by federal, state, county or municipal authority, subject, however, to the limitation stated in Section 7.D. with respect to repairs. The Agent shall, however, take no such action so long as the Owner is contesting, or has affirmed his intentions to contest, any such order or requirement. The Agent will notify the Owner, in writing, of all notices of such governmental orders or other requirements within seventy-two (72) hours of the time of their receipt. 16. Nondiscrimination. In the performance of its obligations under this Agreement, the Agent will comply with the provisions of any federal, state or local law prohibiting the discrimination in housing on the grounds of race, color, creed, sex, familial status, handicap or national origin. 17. Employees. The number, qualifications, and duties of personnel to be employed in the management of the Project, including an on-site General Manager, an Assistant Property Manager/Leasing Agent, Resident Superintendent, or their maintenance, bookkeeping, management and clerical employees will be determined by the Owner and the Agent in accordance with the approved budget. All such employees will be deemed employees of the Agent, not the Owner (unless they are the same), and will be hired, paid, supervised and discharged by the Agent, subject to the following conditions: A. The compensation, including payroll taxes and fringe benefits, of all employees will be within the Agent's sole discretion, provided that minimum wage standards are met. B. The Owner will reimburse the Agent for compensation, including fringe benefits, Payable to all full and part time on-site personnel and for all local, state and federal taxes and assessments (including but not limited to Social Security taxes, unemployment insurance, and workmen's compensation insurance) incident to the employment of such personnel. Such reimbursement will be paid from the Rental Agency Account and will be treated as a Project expense. Part-time maintenance and administrative employee compensation properly attributable to the Project shall be paid from the Rental Account. 18. Agent's Compensation. The annual compensation which the Agent shall be entitled to receive for management services performed under this Agreement shall be a fee in the amount equivalent to 4% percent of total rent collections. Such fees shall be paid by the Owner to the Agent monthly, no later than the fifteenth (15) day of each month, unless otherwise agreed by the parties hereto. If any apartment is unrentable due to lead paint, casualty loss or requires rehabilitation resulting in failure to pass required inspections, Agent will be allowed to include the apartments approved monthly rent as collected income. This is for the purpose of calculating the management fee only. 19. Indemnity. The Owner will indemnify, defend and hold the Agent harmless from all liabilities, including all loss,, costs, and expenses, arising from the premises, including the Owner's acts or omissions, and including all acts or omissions of the Agent in the performance of his duties as described in this Agreement. 20. Terms of Agreement. This Agreement shall be in force beginning on the 1st day of July, 1998 and will expire on the earlier of June 30, 2006 or the date of the disposition of the property. Owner may terminate this Agreement for cause immediately upon written notice to Agent. Cause is defined as fraud, negligence, or misconduct or breach of an expressed provision of this Agreement. This Agreement shall be terminable by the Lender as noted in the Indemnity Deed of Trust dated February 27, 1996. This Agreement shall also be subject to termination upon any of the following conditions: A. In the event a petition in bankruptcy is filed by or against the Agent or Owner, or in the event that either of the aforementioned makes an assignment for the benefit of creditors or takes advantage of any solvency act, the other party may terminate this Agreement provided that prompt written notice of such termination is given. B. Upon the termination, the Agent will submit to the Owner any financial statements requested by the Owner. After the Agent and the Owner have accounted to each other, with respect to all matters outstanding as of the termination date, the Owner will furnish the Agent security, in the form and principal amount satisfactory to the Agent, against any obligations or liabilities which the Agent may properly have incurred on behalf of the Owner hereunder. C. The Agent is prohibited from making a tender offer to the limited partners of Historic Preservation Properties 1990 L.P. Tax Credit Fund or any of its affiliated entities without prior written permission. D. If this Agreement is terminated during any of the first twenty four (24) months, the Agent is entitled to an amount equal to the fee that would be collected in one year (12 mos.) as liquidated damages. Said damages are payable at termination provided that the Agent is not retained by the new owner in the case of a sale. 21. Sub Agent. The Agent has the right, with the prior written consent of the Owner, to engage a sub agent to perform its duties and responsibilities under this Agreement. 22. Interpretive Provision. This Agreement constitutes the entire Agreement between the Owner and the Agent with respect to the management and operation of the Project, and no change will be valid unless made by supplemental written agreement, executed and approved in the same manner as this Agreement. 23. Notices. Any notice under this Agreement shall be given by mailing such notice to the address(es) indicated below, by certified mail return receipt requested or by hand delivery, or to such other address as the parties shall specify in writing provided in the manner described in this paragraph. If to Owner: Henderson's Wharf Baltimore L.P. c/o Gunn Financial Incorporated 45 Broad Street Boston, MA 02109 If to Agent: Gunn Financial Incorporated 45 Broad Street Boston, MA 02109 IN WITNESS WHEREOF, their principal parties have, by their duly authorized officers, executed this Agreement on the date first above written. OWNER: AGENT: By: _______________________ By: ______________________ Title: _______________________ Title: ______________________ PRIMARY MARINA MANAGEMENT AGREEMENT This Agreement is made this 18th day of May, 1998 between Henderson's Wharf Marina L.P. ("Owner") and Gunn Financial Incorporated ("Agent"). 1. Appointment and Acceptance. The Owner appoints the Agent as exclusive agent for the property described in Section 2 of this Agreement, and the Agent accepts the appointment subject to the terms and conditions set forth in this Agreement. 2. Description of Project. The property to be managed by the Agent under this Agreement (the "Project") is a housing development consisting of the land, buildings and other improvements. The Project is further described as follows: NAME: Henderson's Wharf Marina LOCATION: 1000 Fell St., Baltimore, MD NO. OF DWELLINGS: 256 slip marina and Fastlands containing approx. two acres providing parking for the Inn and Marina. 3. Marketing. The Agent will carry out marketing in accordance with the approved marketing plan. 4. Rentals. The Agent will offer for rent and will rent the dwelling units. Incident thereto, the following provisions will apply: A. The Agent will set up and maintain a Management Office to service the Project, or make other arrangements acceptable to the Owner. B. The Agent will follow an approved marketing plan as agreed to by the Owner and the Agent. C. The Agent will show the premises to prospective tenants. D. The Agent will take and process applications for rentals during normal business hours and at other times as may be required by the Owner. The Agent agrees to review each prospective applicant and related applicant data prior to the acceptance or rejection of said applicant. E. The Agent will prepare all dwelling leases and will execute the same in its name, identifying itself thereon as Agent for the Owner. (Dwelling leases will be in a form approved by the Owner, but individual dwelling leases need not be submitted for the approval of the Owner). F. The Owner will furnish the Agent with any approved rent schedule and any other charges for facilities and services. G. The Agent will maintain and submit financial records and accounts of the operation of the property. H. The Agent will maintain a current list of acceptable prospective tenants in accordance with the provisions of any approved marketing plan and will handle all arrangements necessary to assure full occupancy. 5. Collection of rents and Other Receipts. The Agent will collect and deposit rents in accordance with the terms of each tenants lease. All funds collected by the Agent shall be deposited promptly by the Agent in a bank account in an institution whose deposits are insured by an agency of the United States of America; this account shall be used exclusively by the Agent for funds of this project and be known as the Rental Agency account. All security deposit funds received by the Agent shall be deposited in a separate interest bearing escrow account insured by an agency of the United States of America in accordance with the Laws of the State of Maryland. 6. Enforcement of Leases. The Agent will secure full compliance of each tenant with the terms of his lease. The Agent will lawfully terminate any tenancy when, in the Agents judgment, sufficient cause (including, but not limited to, non payment of rent) for such termination occurs under the term of the tenant's lease. For this purpose, the Agent is authorized to consult with legal counsel of its choice to bring actions for evictions, and to execute notices to vacate and judicial pleadings incident to such actions. Attorneys fees other necessary costs incurred in connection with such actions will be paid from the Rental Agency Account as project expenses. Notwithstanding anything herein to the contrary, the Agent agrees to review each prospective termination with the Owner prior to commencement of the termination process. In the event of a dispute between the Agent and the Owner with respect to enforcement of lessee (Paragraph 6), the Agent and Owner agree to mediation. 7. Maintenance and Repair. The Agent will cause the Project to be maintained and repaired, in accordance with state and local codes, in a condition at all times acceptable to the Owner, including but not limited to cleaning, painting, decorating, plumbing, carpentry, grounds care and such other maintenance and repair work as may be necessary. Incident thereto the following provisions will apply: A. Special attention will be given to preventative maintenance. B. The Agent is authorized to purchase all materials, equipment, tools, appliances, supplies, and services necessary for proper maintenance and repair in accordance with the budget established with the Owner. C. Notwithstanding any of the foregoing provisions, the prior approval of the Owner for any expenditure which exceeds $1,500 in any one instance for labor, materials and otherwise for maintenance in connection within the maintenance and repair of the Project; except for recurring expenses within the limits of and already included in the operating budget or for emergency repairs involving manifest danger to persons or property, or required to avoid suspension of any necessary service to the Project. In the latter event, the Agent will inform the Owner of the facts as promptly as possible. D. The Agent shall take such action as may be necessary to comply with any and all orders or requirements affecting the premises, municipal authority having jurisdiction thereof, as well as authorities of the Board of Fire Underwriters or other similar bodies; the Agent is nonetheless subject to the same limitation contained in Paragraph C. of this section in connection with the making of repairs and alterations. The Agent shall not take any action under this Paragraph D so long as the Primary Manager is contesting, or has affirmed his intention to contest, any such order or requirement. 8. Utilities & Services. The Primary Manager, unless the Agent is authorized in writing, will make arrangements for water , electricity, gas fuel, oil, sewage and trash disposal, pest extermination, decorating and laundry facilities. The Primary Manager, unless the Agent is authorized in writing, will make such contracts as may be necessary to secure utilities and services. 9. Disbursements from Rental Agency Account. A. From the funds collected and deposited by the Agent in the Rental Agency Account, pursuant to Section 5. above, the Agent will make the following disbursements promptly when payable: (1) Compensation payable to the Agent pursuant to Section 18. below for its service hereunder and reimbursement to the Agent for compensation payable to the employees, specified in Section 18. below, and for the taxes and assessments payable to local, state and federal governments in connection with the employment of such personnel. (2) The single aggregate payment required to be made monthly by the Owner to the Mortgagee, including the amounts due under the mortgage for principal amortization, interest, mortgage insurance premiums, ground rents, taxes and assessments, fire and other hazards, and insurance premiums and the amount specified (or an amount agreed upon) for allocation to the Reserve for Replacement escrow. (3) All sums otherwise due and payable by the Owner as expenses of the Project, authorized to be incurred by the Agent under the terms of this Agreement. B. Except for the disbursements mentioned in Section 9.A(1)-(3) above, funds will be disbursed or transferred from the Rental Agency Account only as the Owner may from time to time direct in writing. C. In the event that the balance in the Rental Agency Account is at any time insufficient to pay disbursements due, the Agent will within thirty days inform the Owner of the fact, and the Owner will then remit to the Agent sufficient funds to cover the deficiency. In no event will the Agent be required to use its funds to pay such disbursements. 10. Budgets. Annual operating budgets for the project will exist, as approved by the Owner; the Agent will use best efforts to see that each type of operating expense itemized in the budget will not exceed the annual amount authorized by the approved budget. In addition to preparation and submission of a recommended operating budget for the initial fiscal year, the Agent will prepare a recommended operating budget for each subsequent fiscal year and will submit the same to the Owner at least sixty (60) days before the beginning of each new fiscal year. The Owner will promptly inform the Agent, of changes, if any, incorporated in the annual budget, and the Agent will keep the Owner informed of any anticipated deviation from the receipts or disbursements stated in the approved budget. 11. Records and Reports. In addition to any other requirements specified in this Agreement, the Agent will have the following responsibilities with respect to records and reports: A. The Agent will establish and maintain a comprehensive system of records, books and accounts. B. Within twenty (20) days following the end of each fiscal year of the project, the Owner shall be furnished with all information necessary to prepare for an audit of the financial statements of the project including an examination of the books, records and detailed itemized statement of all income and expenditures. Owner and/or its designated certified public accounts shall have access to accounting records at the Agent's home office to perform the annual audit. C. By the fifteenth (15) day of each month, the Agent will furnish the Owner with a balance sheet, statement of receipts and disbursements for the previous month, schedules of accounts receivable and payables, reconciled bank statements for the Rental Agency Account and Deposit Account as of the end of the previous month, and any other documentation reasonably requested by the Owner. 12. Bids, Discounts, Rebates, etc. The Agent will obtain contracts, materials, supplies, utilities, and services on the most advantageous terms to the Project. It is required to solicit bids in writing for all costs greater than $2,000 for those items that can be obtained from more than one source. The Agent will secure and credit to the Owner, and not receive or retain for itself, all discounts, rebates, or commissions obtainable with respect to purchases, service contracts, and or all other transactions regarding the Project. 13. Emergency Answering Services. The Agent will provide emergency telephone and repair capability on a twenty-four (24) hour basis. 14. Insurance. The Owner shall direct the Agent top purchase insurance coverage for the premises and the operations thereof, then, within ten (10) days of such direction, the Owner shall provide written notice to the Agent as to the company, coverage, policy limits, and the named insured that are to be included in such insurance. The Agent will pay all insurance premiums from the Operating Account, which premiums will be treated as operating expenses. The Owner agrees that such coverage shall include, as a minimum, Commercial General Liability coverage written on an assurance form, having limits of liability of not less than $1,000,000 each occurrence and $2,000,000 general aggregate. The Agent shall be designated on any and all such policies as an additional insured. In addition, Agent shall purchase fidelity insurance in the amount of $1,000,000 with a comp[any satisfactory to it with respect to all such employees of Agent who are responsible for or are involved in the collection of safekeeping of receipts or other funds hereunder received by Agent; the cost of such coverage shall not be included as an operating expense. 15. Compliance with Government Orders. The Agent will take such action as may be necessary to comply promptly with any and all government orders or other requirements affecting the Project, whether imposed by federal, state, county or municipal authority, subject, however, to the limitation stated in Section 7.D. with respect to repairs. The Agent shall, however, take no such action so long as the Owner is contesting, or has affirmed his intentions to contest, any such order or requirement. The Agent will notify the Owner, in writing, of all notices of such governmental orders or other requirements within seventy-two (72) hours of the time of their receipt. 16. Nondiscrimination. In the performance of its obligations under this Agreement, the Agent will comply with the provisions of any federal, state or local law prohibiting the discrimination in housing on the grounds of race, color, creed, sex, familial status, handicap or national origin. 17. Employees. The number, qualifications, and duties of personnel to be employed in the management of the Project, including an on-site General Manager, an Assistant Property Manager/Leasing Agent, Resident Superintendent, or their maintenance, bookkeeping, management and clerical employees will be determined by the Owner and the Agent in accordance with the approved budget. All such employees will be deemed employees of the Agent, not the Owner (unless they are the same), and will be hired, paid, supervised and discharged by the Agent, subject to the following conditions: A. The compensation, including payroll taxes and fringe benefits, of all employees will be within the Agent's sole discretion, provided that minimum wage standards are met. B. The Owner will reimburse the Agent for compensation, including fringe benefits, Payable to all full and part time on-site personnel and for all local, state and federal taxes and assessments (including but not limited to Social Security taxes, unemployment insurance, and workmen's compensation insurance) incident to the employment of such personnel. Such reimbursement will be paid from the Rental Agency Account and will be treated as a Project expense. Part-time maintenance and administrative employee compensation properly attributable to the Project shall be paid from the Rental Account. 18. Agent's Compensation. The annual compensation which the Agent shall be entitled to receive for management services performed under this Agreement shall be a fee in the amount equivalent to 4% percent of total rent collections. Such fees shall be paid by the Owner to the Agent monthly, no later than the fifteenth (15) day of each month, unless otherwise agreed by the parties hereto. If any apartment is unrentable due to lead paint, casualty loss or requires rehabilitation resulting in failure to pass required inspections, Agent will be allowed to include the apartments approved monthly rent as collected income. This is for the purpose of calculating the management fee only. 19. Indemnity. The Owner will indemnify, defend and hold the Agent harmless from all liabilities, including all loss,, costs, and expenses, arising from the premises, including the Owner's acts or omissions, and including all acts or omissions of the Agent in the performance of his duties as described in this Agreement. 20. Terms of Agreement. This Agreement shall be in force beginning on the 1st day of July, 1998 and will expire on the earlier of June 30, 2006 or the date of the disposition of the property. Owner may terminate this Agreement for cause immediately upon written notice to Agent. Cause is defined as fraud, negligence, or misconduct or breach of an expressed provision of this Agreement. This Agreement shall also be subject to termination upon any of the following conditions: A. In the event a petition in bankruptcy is filed by or against the Agent or Owner, or in the event that either of the aforementioned makes an assignment for the benefit of creditors or takes advantage of any solvency act, the other party may terminate this Agreement provided that prompt written notice of such termination is given. B. Upon the termination, the Agent will submit to the Owner any financial statements requested by the Owner. After the Agent and the Owner have accounted to each other, with respect to all matters outstanding as of the termination date, the Owner will furnish the Agent security, in the form and principal amount satisfactory to the Agent, against any obligations or liabilities which the Agent may properly have incurred on behalf of the Owner hereunder. C. The Agent is prohibited from making a tender offer to the limited partners of Historic Preservation Properties 1990 L.P. Tax Credit Fund or any of its affiliated entities without prior written permission. D. If this Agreement is terminated during any of the first twenty four (24) months, the Agent is entitled to an amount equal to the fee that would be collected in one year (12 mos.) as liquidated damages. Said damages are payable at termination provided that the Agent is not retained by the new owner in the case of a sale. 21. Sub Agent. The Agent has the right, with the prior written consent of the Owner, to engage a sub agent to perform its duties and responsibilities under this Agreement. 22. Interpretive Provision. This Agreement constitutes the entire Agreement between the Owner and the Agent with respect to the management and operation of the Project, and no change will be valid unless made by supplemental written agreement, executed and approved in the same manner as this Agreement. 23. Notices. Any notice under this Agreement shall be given by mailing such notice to the address(es) indicated below, by certified mail return receipt requested or by hand delivery, or to such other address as the parties shall specify in writing provided in the manner described in this paragraph: If to Owner: Henderson's Wharf Marina L.P. c/o Gunn Financial Incorporated 45 Broad Street Boston, MA 02109 If to Agent: Gunn Financial Incorporated 45 Broad Street Boston, MA 02109 IN WITNESS WHEREOF, their principal parties have, by their duly authorized officers, executed this Agreement on the date first above written. OWNER: AGENT: By: _______________________ By: ______________________ Title: _______________________ Title: ______________________ EX-10 5 ASSETMANAGEMENT AGREEMENT ASSET MANAGEMENT AGREEMENT THIS ASSET MANAGEMENT AGREEMENT ( the "Agreement") is made and entered into as of July 1, 1998 by and among HISTORIC PRESERVATION PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership ("HPP 1987"), HISTORIC PRESERVATION PROPERTIES 1988 LIMITED PARTNERSHIP, a Delaware limited partnership ("HPP 1988"), HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP, a Delaware limited partnership ("HPP 1989"), HISTORIC PRESERVATION PROPERTIES 1990 L.P. TAX CREDIT Fund, a DELAWARE limited partnership ("HPP 1990") and Gunn Financial Incorporated, a Massachusetts corporation ("Gunn"). RECITALS A. HPP 1987, HPP 1988, HPP 1989 and HPP 1990 are sometimes individually referred to herein as an "HPP Partnership" and collectively referred to as "HPP Partnerships." B. The HPP Partnerships were organized and formed to invest in certain joint ventures ( the "project Partnerships") which own real properties (the "Properties") which qualify for the rehabilitation tax credit under Section 48 of the Internal Revenue Code of 1986, as amended (the "Code"). C. The general partner of HPP 1987 is Boston Historic Partners Limited Partnership, a Massachusetts limited partnership ("BHP"). The business of HPP 1987 is governed by its Amended and Restated Limited Partnership Agreement dated as of May 15, 1987 (the "HPP 1987 Partnership Agreement"). HPP owns an interest in each of the Project Partnerships listed on Exhibit A attached hereto. D. The general partner of HPP 1988 is BHP. The business of HPP 1988 is governed by its Amended and Restated Limited Partnership Agreement dated as of February 24, 1988 (the "HPP 1988 Partnership Agreement"). HPP 1988 owns an interest in each of the Project Partnerships listed on Exhibit B attached hereto. E. The general partner of HPP 1989 is BHP. The business of HPP 1989 is governed by its Amended and Restated Limited Partnership Agreement dated as of December 19, 1988 (the "HPP 1989 Partnership Agreement"). HPP 1989 owns an interest in each of the Project Partnerships and the property listed on Exhibit C attached hereto. F. The general partner of HPP 1990 is Boston Historic Partners II Limited Partnership, a Massachusetts limited partnership ("BHP II"). The business of HPP 1990 is governed by its Amended and Restated Limited Partnership Agreement dated as of May 30, 1990 (the "HPP 1990 Partnership Agreement"). HPP 1990 owns an interest in each of the Project Partnerships listed on Exhibit D attached hereto. G. The HPP 1987 Partnership Agreement, HPP 1988 Partnership Agreement, HPP 1989 Partnership Agreement and HPP 1990 Partnership Agreement are sometimes individually referred to as an "HPP Partnership Agreement" and collectively referred to as the "HPP Partnership Agreements." H. Each of the HPP Partnerships desires to engage Gunn to manage certain of the business affairs of the HPP Partnerships and provide the services set forth in this Agreement on the terms and conditions hereinafter set forth. I. Gunn desires to perform such services on the terms and conditions hereinafter set forth. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: Section 1. Engagement of Gunn Each HPP Partnership hereby engages and designates Gunn as the manager of certain of the business affairs of the HPP Partnerships as more fully set forth herein. Gunn hereby accepts such engagement and designation and hereby agrees to perform its obligations under this agreement in a businesslike and professional manner. Gunn shall at all times act only at the specific direction of BHP or BHP II. Every act performed by Gunn or any agent or employee of Gunn pursuant to the authority granted by this Agreement shall be done as an independent contractor on behalf of the HPP Partnerships and all obligations or expenses incurred hereunder shall be for the account of and at the expense of the HPP Partnerships, except as otherwise specifically provided hereunder. Section 2. Duties of Gunn 2.1 Duties. It shall be the obligation of Gunn to perform the following duties on behalf of HPP Partnerships (the "Services"): (a) Asset Management Services. Gunn Shall assist BHP and BHP II in monitoring the operations of the Properties to the extent specifically directed by BHP and BHP II from time to time and shall periodically meet as reasonably requested with representatives of BHP and BHP II to discuss current property operations. Unless otherwise specifically directed by BHP or BHP II in writing, a representative of Gunn will visit and meet with the independent third party property management company, where applicable, for those properties (the "Properties") indicated on Exhibits A through D, at least once a year so long as such Properties are owned by an HPP Partnership a Project Partnership having an HPP Partnership as a partner. A representative of Gunn will visit any other properties from time to time owned by an HPP Partnership of a Project Partnership only on an as-needed basis as specifically requested in writing by BHP or BHP II. (b) Accounting Services. Gunn will assist BHP and BHP II in Maintaining all accounting records for the HPP Partnerships and preparing work paper packages and quarterly and annual financial statements for the HPP Partnerships as applicable, assist BHP and BHP II in the preparation of tax returns and other reports to investors as applicable. Gunn shall assist BHP and BHP II in keeping books and records relating to the HPP Partnerships in accordance with generally accepted accounting principles, uniformly and consistently applied from year to year, take all reasonable steps to assist the HPP Partnerships in keeping records of all transactions, make available for inspection by BHP and BHP II, at all reasonable times the books and records relating to the HPP Partnerships, and furnish such information concerning the HPP Partnerships to such persons as BHP and BHP II may, in writing, reasonably request. In addition, Gunn will assist BHP and BHP II in preparing and filing all reports required by the Securities and Exchange Commission, including those items required by Section 8.4 of each of the HPP 89 and HPP 90 Partnership Agreements. HPP 87 and HPP 88 do not file with the SEC based on a hardship exemption but they do provide investors with a complete unaudited Annual Report. (c) Investor Services. Gunn will assist BHP and BHP II in the preparation and distribution of (I) quarterly and annual reports to the investors in the HPP 90 Partnership, annual reports for HPP 87, HPP 88, and HPP 89. (ii) the annual form K-1 that enables the investors to file their respective tax returns, and (iii) responding to and serving investors and their related broker/dealer and representatives as required. HPP 89 will also provide copies of the quarterly 10-Q upon request. Copies of the above correspondences shall be distributed to Brokers of Record and the Due Diligence officers of selling broker dealer firms consistent with prior levels of service. (d) Personnel. In performing Services, Gunn will utilize its staff and make available to the assignment, professional, competent individuals who can effectively perform the Services at a level anticipated by both Gunn and HPP. All employees be employees of Gunn, but are subject to reimbursement pursuant to Section 3.2. (e) Office Space. Gunn will provide allocable office space for its personnel as may be necessary to perform the Services. The HPP Partnerships hereby agree to pay the amount equal to allocable rent charges as set forth in the operating budget. (f) Support Staff. Gunn will provide or arrange for the provision of appropriate office support to perform the Services, including secretarial staff and office equipment, salaries of employees and other general overhead of Gunn, costs of accounting, statistical or bookkeeping services and computing or accounting equipment, travel, telephone communications and other general and administrative expenses. All costs are to be reimbursed pursuant to Section 3.2. (g) Cooperation by HPP. The HPP Partnerships shall deliver to Gunn copies of all documents in the possession of, or available to, the HPP Partnerships which relate to the HPP Partnerships and/or the financing, operation, management and leasing of each Property. The HPP Partnerships acknowledge that the Services provided by Gunn will be based in large part on information received from the HPP Partnerships. Gunn shall be entitled to assume that all such information (including, without limitation, financial statements and other financial data) received from the HPP Partnerships shall be complete and accurate, and that such information will nit contain, or omit to contain, any statement of material fact known by the HPP Partnerships to be false or misleading. Gunn will not (and shall have no obligation to the HPP Partnerships to) undertake to make an independent verification of any such information unless specifically requested to do so by the HPP Partnerships in writing. The HPP Partnerships hereby represent to Gunn that no information furnished or to be furnished by the HPP Partnerships hereunder or in connection with the consulting services to be provided by Gunn hereunder, contains or will contain any untrue statement of material fact, or omits or will omit to state a material fact necessary to make such information not misleading. The HPP Partnerships hereby agree that they have an affirmative obligation hereunder to disclose any material facts necessary to enable Gunn to provide its Services hereunder. 2.2 Amount of Time, Etc., Required of the Designated Personnel. The parties acknowledge that the officers, directors and employees of Gunn may engage in significant real estate, financial and securities related businesses during the term of this Agreement in addition to those contemplated by this Agreement. Some of these activities may be competitive with the activities of the HPP Partnerships. The HPP Partnerships hereby consent to the officers, employees and directors of Gunn engaging in such competitive activities. Under no circumstances will Gunn or any of its personnel or agents be required to devote all of their time, resources or personnel to the performance of this Agreement but only be required to devote such time . resources and personnel as is necessary for them to fulfill their obligations hereunder. Section 3. Compensation and Reimbursement. 3.1 Base Fee. The HPP Partnerships shall pay to Gunn a base monthly fee of $1,500 per property (except as indicated on Exhibit C) for each Property owned directly or indirectly by such HPP Partnership, as noted on Exhibits A, B, C or D (the "Base Fee"). The Base Fee shall be due and payable in monthly installments on the tenth business day of each month throughout the term of this Agreement. The Base Fee shall be in the following amounts through June 30, 1999 and will be adjusted at that time to properly reflect the number of properties/investee partnerships in place at that time for the next reporting period, ending June 30, 2000: HPP 1987 $36,000 HPP 1988 $72,000 HPP 1989 $63,000 HPP 1990 $36,000 3.2 Reimbursement. The HPP Partnerships shall pay the directly allocable costs incurred by Gunn in providing the Services and the costs and expenses set forth in the budget for the period July 1, 1998 through December 31, 1998 attached hereto as Exhibit E (the "Budget"). The Budget has been approved by the HPP Partnerships. A new budget will be prepared for the period from January 1, 1999 through December 31, 2000. Total charges which are more than 10% in excess of the Budget must be approved by the HPP Partnerships in advance. Payments to Gunn under this Section 3.2 will be made monthly. All such costs shall be allocated to and paid by the HPP Partnerships as follows for the period July 1, 1998 through December 31, 1998 fiscal year: HPP 1987 4.80% HPP 1988 26.65% HPP 1989 24.28% HPP 1990 44.27% These allocations will be reviewed and reset, if appropriate in the following fiscal year. Gunn shall provide a new annual budget by November 15, 1998 for fiscal year January 1, 1999 through December 31, 1999. Expense allocations may change from year to year based on various factors. The budget must be approved in advance in advance by the HPP Partnerships by December 15th of each year. 3.3 Extra Services. If requested in writing by BHP or BHP II from time to time, in addition to the Services, Gunn shall provide extra services. Gunn shall bill the relevant HPP Partnership at the market rate for such services rendered. Bills for such extra services will be rendered and paid monthly. 3.4 Miscellaneous. This Agreement shall in no way obligate Gunn or any employee of Gunn to pay any costs or expenses of any HPP Partnership if moneys are not available for the payment of such costs or expenses from the incomes or reserves established by or on behalf of such HPP Partnership. In addition, in the event that any of the fees or reimbursements described in this Section 3 are nit paid when due, the accrued amount owed to Gunn shall bear interest at the prime rate published in the Wall Street Journal until paid. 3.4 Allocation of Costs. In the event that any services are performed both for HPP Partnership and for other entities, Gunn shall make such allocation of the expense of such services among the HPP Partnership and such other entities as Gunn shall determine is appropriate, any such allocation made in good faith by Gunn shall be final and binding on the parties hereto. Section 4. Indemnification. 4.1 Indemnification by Gunn. Gunn agrees to defend and hold the HPP Partnerships harmless from and indemnify the HPP Partnerships against any and all liability, loss, damages, court costs and reasonable expenses, including reasonable attorneys fees (hereinafter collectively referred to as "Liabilities") which the HPP Partnerships may incur or suffer, which Liabilities result from the gross negligence, bad faith, fraud or willful misconduct on the part of Gunn, its employees, agents or others under the direction or control of Gunn in performing its obligations under this Agreement. For purposes of this Section 4.1 only, the term "HPP Partnerships" shall also include any partner, officer, director, employee or agent of the HPP Partnerships in the event any such person incurs or suffers any such Liability as a result of such gross negligence, bad faith, fraud or willful misconduct. This Section 4.1 shall survive any termination of the Agreement. 4.2 Indemnification by HPP Partnerships. Gunn and the HPP Partnerships hereby acknowledge that the acts of Gunn hereunder are solely as agent for HPP Partnerships and Gunn shall not be liable to the HPP Partnerships or any other person or entity for any of its actions or services provided hereunder in relation to the management and operations of the Properties or otherwise. Each HPP Partnership agrees to defend and hold Gunn harmless from and indemnify Gunn against any and all liabilities which Gunn may incur or suffer as a result of any claim against Gunn arising out of any action taken, omitted or suffered by it in good faith and in accordance with general or specific instructions from the HPP Partnerships or the General Partners, except where such liabilities result from the negligence, bad faith, fraud or willful misconduct on the part of Gunn, its employees, agents or others under the direction or control of Gunn. For purposes of this Section 4.2 only the term "Gunn" shall also include any officer, director, employee or agent of Gunn in the event any such person incurs or suffers any such liability as a result of activities on behalf of or under the direction or control of Gunn in connection with its services performed for the HPP Partnerships. Such indemnification shall include payment by the HPP Partnerships of all reasonable expenses and reasonable legal fees incurred in defending a civil or criminal action or proceeding in advance of the final disposition of such action or proceeding, receipt of an undertaking by the party or person indemnified to repay such payment if it, he or she shall be adjudicated to be not entitled to indemnification under this Section 4.2; and provided further, that no indemnification shall be provided for Gunn, its directors, officers, agents or employees with respect to any matter as to which it shall have been fully adjudicated in any action or proceeding that Gunn, its directors, officers, agents or employees had acted with negligence, willful misconduct or fraud. This Section 4.2 shall survive any termination of the Agreement. Section 5. Term and Termination. 5.1 Term. The term of this Agreement shall commence on July 1, 1998 (the "Commencement Date"), and shall terminate on June 30, 2006, unless previously terminated by the parties hereto pursuant to Section 5.2. 5.2 Termination. This Agreement will expire on June 30, 2006 unless an earlier termination date is mutually agreed upon by HPP Partnerships and Gunn. On an individual HPP Partnership basis, this contract will naturally terminate for a HPP Partnership on June 30th of the year following the calender year in which the disposition of the final property in that HPP Partnership occurs. 5.3 Breach. This Agreement may be terminated by the HPP Partnerships or Gunn upon the default by the other party of any such other party's material obligations hereunder; provided, however, that the non-defaulting party shall have delivered to the other party a written specifying such default in reasonable detail and that the defaulting party shall not have cured such default within thirty (30) days after the receipt of such notice. 5.4 Payment of Fees. Upon any termination pursuant to this Section 5, Gunn shall have the right to receive any unpaid fees or unreimbursed expenses owed to it under Section 3. Any such amount shall be prorated on a per diem basis from the date of the last monthly fee payment to the effective date of any such termination. If any individual HPP Partnership is unable to pay its share of liabilities because of a lack of cash, then such debts shall be formally recognized in a binding mutually agreed to Note Agreement. Section 6. Miscellaneous Provisions. 6.1 Notices. Any notice or communication hereunder must be in writing, and shall be personally delivered or mailed postage prepaid, by registered or certified mail, return receipt requested, or by courier (against confirmation of delivery or rejection of delivery) and if given by courier, registered or certified mail same shall be deemed to have been given and received when personally delivered or three days after its mailing. Such notices or communications shall be given to the parties hereto at their respective following addresses: If to the HPP Partnerships: c/o Boston Bay Capital 45 Broad Street Boston, MA 02109 Attn.: Terrence P. Sullivan If to Gunn: Robert Gunn Gunn Financial Incorporated 45 Broad Street Boston, MA 02109 Any party hereto may at any time by giving ten (10) days' written notice to the other party hereto designate any other address in substitution of the foregoing address to which such notice or communication shall be given. 6.2 Severability. If any term, covenant or condition of this Agreement or the application thereof to any person or circumstance shall , to any extent, be invalid or unenforceable, the remainder of this Agreement or the application of such term, covenant or condition to persons or circumstances other than those to which it is held invalid or unenforceable, shall not be affected thereby, and each term, covenant or condition of this Agreement or such other documents shall be valid and shall be enforced to the fullest extent permitted by law. 6.3 Applicable Law. This Agreement shall be governed and construed in accordance with the laws of the Commonwealth of Massachusetts. 6.4 Successors and Assigns. No party hereto may assign any of its rights or duties hereunder except with the prior written consent of the other parties. 6.5 Captions. Captions in this Agreement are inserted for convenience or reference only and do not define, describe or limit the scope or intent of this Agreement or any of the terms hereof. 6.6 No Partnership. Nothing contained in this Agreement or in the relationship of HPP Partnerships and Gunn shall be deemed to constitute a partnership, joint venture or any other relationship and Gunn shall at all times be deemed an independent contractor for the purposes of this Agreement. 6.7 No Assignment. Gunn may not assign or in any way voluntarily transfer this Agreement without the prior written approval of BHP and BHP II> 6.8 Modification or Amendment. This Agreement (including the exhibits hereto) constitutes the entire agreement between the parties hereto with respect to the subject matter hereof, supersedes all prior agreements between the parties relating to the matters contained herein and may not be modified, waived or terminated orally and may only be amended by an agreement in writing by the parties hereto. IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written. HISTORIC PRESERVATION PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership, by its general partner, BOSTON HISTORIC PARTNERS LIMITED PARTNERSHIP. a Massachusetts limited partnership, by its general partners PORTFOLIO ADVISORY SERVICES, INC., a Massachusetts corporation By _________________________________ Terrace P. Sullivan, President By __________________________________ Terrence P. Sullivan, General Partner HISTORIC PRESERVATION PROPERTIES 1988 LIMITED PARTNERSHIP, a Delaware limited partnership, by its general partner, BOSTON HISTORIC PARTNERS LIMITED PARTNERSHIP, a Massachusetts limited partnership, by its general partners PORTFOLIO ADVISORY SERVICES, INC., a Massachusetts corporation By ___________________________________ Terrence P. Sullivan, President By ___________________________________ Terrence P. Sullivan, General Partner HISTORIC PRESERVATION PROPERTIES 1989 LIMITED PARTNERSHIP, a Delaware limited partnership, by its general partner, BOSTON HISTORIC PARTNERS LIMITED PARTNERSHIP, a Massachusetts limited partnership, by its general partners PORTFOLIO ADVISORY SERVICES, INC. a Massachusetts corporation By ____________________________________ Terrence P. Sullivan, President By ____________________________________ Terrence P. Sullivan, General Partner HISTORIC PRESERVATION PROPERTIES 1990 L. P. TAX CREDIT FUND, a Delaware limited partnership, by its general partner, BOSTON HISTORIC PARTNERS II LIMITED PARTNERSHIP, a Massachusetts limited partnership, by its general partners PORTFOLIO ADVISORY SERVICES II INC., a Massachusetts corporation By _____________________________________ Terrence P. Sullivan, President By _____________________________________ Terrence P. Sullivan, General Partner BOSTONHISTORIC PARTNERS II LIMITED PARTNERSHIP, a Massachusetts limited partnership, by its general partner, BHP II ADVISORS LIMITED PARTNERSHIP, by its general partners PORTFOLIO ADVISORY SERVICES II, INC., a Massachusetts corporation By ____________________________________ Terrence P. Sullivan, President By ____________________________________ Terrence P. Sullivan, General Partner GUNN FINANCIAL, INCORPORATED a Massachusetts corporation By ____________________________________ Robert Gunn, President Exhibit A LIST OF PROPERTIES - HPP 1987 Name of Project Partnership Name of Project Location 1027 Arch Street Associates Pitcarin Building Philadelphia, PA Limited Partnership 432 Julia Street Associates Gallery Row New Orleans, LA Limited Partnership Exhibit B LIST OF PROPERTIES - HPP 1988 Name of Project Partnership Name of Project Location Union Station Associates Union Station Providence, RI 330 Julia Street Associates The Rotunda New Orleans, LA Limited Partnership New Bedford Historic Stores CWT Building New Bedford, MA Associates Limited Partnership Coastline Associates Limited Coastline Center Wilmington, NC Exhibit C LIST OF PROPERTIES - HPP 1989 Name of Project Partnership Name of Project Location Historic Preservation Properties The Cosmopolitan St. Paul, MN 1989 L. P. Building Jenkins Court Associates Jenkins Court Jenkintown, PA Limited Partnership (1) Portland Loft Associates Honeyman Portland, OR Limited Partnership Hardware Lofts 402 Julia Street Associates The Lofts New Orleans, LA Limited Partnership (1) 50% of standard Asset Management fee to monitor and collect receivable Exhibit D LIST OF PROPERTIES - HPP 1990 Name of Project Partnership Name of Project Location Henderson's Wharf Baltimore, Henderson's Wharf Baltimore, MD L.P. (Inn/ Apartments) Henderson's Wharf Baltimore, Henderson's Wharf Baltimore, MD L.P. Marina EX-10 6 SETTLEMENT AGREEMENT SETTLEMENT AGREEMENT THIS AGREEMENT ("Agreement") made this3rd day of November, 1998, by and between The COUNCIL OF UNIT OWNERS OF THE RESIDENCES AND INN AT HENDERSON'S WHARF, a Condominium, Incorporated (the "Council"), HENDERSON'S WHARF BALTIMORE L.P., a Delaware limited partnership ("HWLP"), CLAREMONT MANAGEMENT CORPORATION ("Claremont"), MCKENNA MANAGEMENT ASSOCIATES, INC. ("McKenna"), CREDIT SERVICE INTERNATIONAL BALTIMORE, INC. ("CSI"), TERENCE P. SULLIVAN ("Sullivan"), CHARLES M. MORAN, JR. ("Moran"), CHARLES S. INTRAVAIA ("Intravaia"), BRIAN M. KRASON ("Krason") and JOSEPH V. BRADY ("Brady") (Claremont, McKenna, CSI, Sullivan, Moran, Intravaia, Krason and Brady are sometimes collectively referred to herein as the "Third Party Defendants") and RICHARD SASSI, a Maryland resident ("Sassi"). EXPLANATORY STATEMENT The Council is the council of unit owners for the residential condominium known as The Residences and Inn at Henderson's Wharf, located at 1000 Fell Street in Fells Point, Baltimore City, Maryland (the "Condominium"). HWLP operates and manages the Condominium. Sassi is the owner of Condominium Unit No. 402 and Parking Unit No. P-61 in the Condominium (collectively, the -Unit"). The Council and HWLP filed a legal action against Sassi, known as The Council of Unit Owners of the Residences and Inn at Henderson's Wharf, A Condominium, Incorporated and Henderson's Wharf Baltimore, L.P: v. Richard Sassi, Civil Case No. 97-154-052-CC-2921, which is pending in the Circuit Court of Maryland for Baltimore City ("Lawsuit"). In the Lawsuit, the Council and HWLP assert claims against Sassi for delinquent condominium charges and assessments and nuisance (all of the Council's and HWLP's claims are hereinafter sometimes collectively referred to as the "Condominium's Claims"). Sassi filed a (1) counterclaim in the Lawsuit against the Council and HWLP, as applicable, for violations of the Fair Debt Collection Practices Act, breach of contract, deceit and trespass (all of such claims being sometimes collectively referred to herein as the "Counterclaim").and (ii) third party complaint in the Lawsuit against the Third Party Defendants, as applicable, for violations of the Fair Debt Collection Practices Act, breach of contract, negligence, deceit and trespass (all of such claims being sometimes collectively referred to herein as the -Third Party Complaint"). CSI filed a cross complaint in the Lawsuit against the Council. HWLP, Claremont, McKenna, Sullivan, Moran, Intravaia, Krason and Brady for indemnification for certain matters ("Cross Claim"). The parties have agreed to compromise and settle all claims which any party has asserted or may assert in the Lawsuit, Counterclaim, Third Party Complaint or Cross Claim, or which any party may have arising out of the use or ownership or operation of the Unit. or any part thereof. NOW, THEREFORE, for and in consideration of the foregoing explanatory statements and the agreements hereinafter set forth, the sufficiency and legal adequacy of which the parties acknowledge, they do hereby agree as follows: I . Purchase of Unit. HWLP shall purchase the Unit from Sassi for a purchase price of One Hundred Ten Thousand Dollars ($110,000.00) ("Purchase Price") in accordance with the terms of an Agreement of Sale and Purchase attached hereto as Exhibit A and incorporated herein by reference ("Agreement of Sale"). The parties agree that the Purchase Price represents the fair market value of the Unit. 2. Settlement Sum. At the Closing (as defined in the Agreement of Sale), HWLP shall pay to Sassi the Purchase Price (subject to any adjustments and apportionments as set forth in the Agreement of Sale) plus, in settlement of any claims for alleged damage to the Unit or to the fair market value of the Unit, the additional sum of Sixty-Five Thousand Dollars ($65,000.00) ("Additional Payment"). The Purchase Price and the Additional Sum are sometimes hereinafter collectively referred to as the "Settlement Sum". The Purchase Price shall be reported on Form 1099-S and the Additional Payment shall be reported on Form 1099-MISC., Box 3. 3. Attorneys' Fees. At Closing, HWLP shall pay to Sassi the sum of Twenty Thousand Dollars ($20,000.00) representing reimbursement of legal fees and other costs incurred by Sassi with respect to the Lawsuit, Counterclaim and Third Party Claim ("Sassi's Attorneys' Fees"). 4. Dismissal with Prejudice. At or before Closing, the Council, HWLP, Sassi and the Third Party Defendants shall execute a Notice of Dismissal with prejudice ("Notice of Dismissal") dismissing the Lawsuit, Counterclaim, Third Party Claim and Cross Claim. The Notice of Dismissal shall be filed promptly, the costs for which filing shall be split equally between HWLP and Sassi. 5. Releases. (a) The Council and HWLP, for themselves and for their officers, directors, employees, agents, principals and shareholders, and for all their respective successors and assigns, shall, at or by Closing, release and forever discharge, in the form attached hereto as Exhibit B (the "Release"), Sassi and the Third Party Defendants, their respective heirs, personal representatives, successors, assigns, officers, directors, employees, agents, principals and shareholders, from any and all claims, actions, suits, debts, counts, covenants, contracts, damages, judgments and demands of whatsoever kind or nature ("Claims"), which the Council and/or HVVLP, individually or collectively, ever had, or may now have, up to the date of the Release, pertaining in any way to the Unit (other than a breach by Sassi under the Agreement of Sale), including but not limited to any Claims which were raised or could have been raised in the Lawsuit. (b) Sassi, for himself and his heirs, personal representatives and assigns, shall, at or by Closing, release and forever discharge, in the form of Exhibit B, the Council, HWLP and the Third Party Defendants, their respective heirs, personal representatives, successors, assigns. officers, directors, employees, agents, principals and shareholders, from any and all Claims which Sassi ever had, or may now have, up to the date of the Release, pertaining in any way to the Unit (other than a breach by HWLP under the Agreement of Sale), including but not limited to any Claims which were raised or could have been raised in the Counterclaim or in the Third Party Complaint. (c) The Third Party Defendants, for themselves and for their officers, directors, employees, agents, principals and shareholders, and for all their respective heirs, personal representatives, successors and assigns, shall, at or by Closing, release and forever discharge, in the form of Exhibit B, Sassi, the Council and HWLP, their respective heirs, personal representatives, successors, assigns, officers, directors, employees, agents, principals and shareholders, from any and all Claims which the Third Party Defendants, individually and/or collectively, ever had, or may now have, up to the date of the Release, pertaining in any way to the Unit, including but not limited to any Claims which were raised or could have been raised in the Cross Complaint. 6. Contingency. The obligations of the parties as set out in this Agreement are contingent upon the simultaneous occurrence at or by Closing of the sale and purchase of the Unit pursuant to the terms of the Agreement of Sale, the payment of the Settlement Sum to Sassi. the payment of Sassi's Attorneys' Fees to Sassi, the execution of the Notice of Dismissal and the execution of the Release. 7. Not an Admission. The parties have entered into this Agreement as a full and complete settlement and compromise of their respective claims as set forth in the Lawsuit, Counterclaim, Third Party Complaint and Cross Claim, or otherwise referenced in this Agreement. It is expressly understood and agreed that neither the execution of this Agreement, nor the tender or receipt of any payment, is intended, nor shall it be understood, as an acknowledgment of responsibility, an admission of liability, or other expression reflecting upon the merits of the claims. and any such responsibility or liabilities are expressly denied. 8. Confidentiality . The parties agree that they shall not reveal to any third party the terms or conditions of this Agreement (except for the Agreement of Sale, which may be disclosed by the Council, HWLP or Sassi to anyone), except (i) with the express written consent of all parties; (ii) as reasonably may be required by any party's accountants, attorneys and other professionals; (111) as may be required by HWLP in connection with any securities or other regulatory filing; (iv) as may be required by HWLP in connection with any necessary or desirable communications with or among partners of HWLP; (v) as may be necessary to enforce the provisions of this Agreement or the Agreement of Sale; (vi) as may otherwise be required by law and (vii) except as may be required or desirable in connection with the administration or governance of the Condominium. The obligations under this paragraph shall survive any termination of this Agreement. 9. List of Exhibits. A. Form of Agreement of Sale B. Form of Release. 10. Miscellaneous. (a) This Agreement sets forth the entire agreement and understanding of the parties with respect to the subject matter hereof, and may not be amended, modified or terminated except by written amendment signed by all of the parties, and shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors, personal representatives, heirs, legatees and assigns. (b) Time is of the essence of performance of each of the obligations of the parties which are set forth above in this Agreement. (c) This Agreement shall be governed by and construed according to the laws of the State of Maryland. (d) This Agreement is made and entered into for the sole protection and benefit of the parties hereto, their successors and assigns, and no other person or entity shall directly or indirectly have any claims, rights or causes of action under, or be a beneficiary o any provision of this Agreement. (e) This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which when taken together shall constitute one and the same document. This Agreement may be delivered by facsimile transmission of an originally executed copy to be followed by immediate delivery of the original of such executed copy. IN WITNESS WHEREOF, the parties have duly executed and acknowledged this Agreement as of the date and year first written above. WITNESS/ATTEST: COUNCIL: THE COUNCIL OF UNIT OWNERS OF THE RESIDENCES AND INN AT HENDERSON'S WHARF, a Condominium, Incorporated. By:_________________________________ Name:________________________ Title:_________________________ HWLP: HENDERSON'S WHARF BALTIMORE L.P. By: Henderson's Wharf Development Corporation, General Partner By: Name: Title: CLAREMONT: CLAREMONT MANAGEMENT CORPORATION By: (SEAL) Name: Title: MCKENNA: MCKENNA MANAGEMENT ASSOCIATES, INC. By: (SEAL) Name: Title: CSI: CREDIT SERVICE INTERNATIONAL BALTIMORE, INC. By: (SEAL) Name: Title: SULLIVAN: (SEAL) Terence P. Sullivan MORAN: (SEAL) Charles M. Moran, Jr. INTRAVAIA: (SEAL) Charles S. Intravaia KRASON: (SEAL) Brian M. Krason BRADY: (SEAL) Joseph V. Brady SASSI: (SEAL) Richard Sassi EXHIBIT A TO SETTLEMENT AGREEMENT AGREEMENT OF SALE AND PURCHASE AGREEMENT OF SALE AND PURCHASE THIS AGREEMENT OF SALE AND PURCHASE (this "Agreement") is made on this day of -1 1998 (the "Effective Date"), by and between RICHARD SASSI, a Maryland resident ("Seller") and HENDERSON'S WHARF BALTIMORE L.P., a Delaware limited partnership ("Buyer"). Background Seller is the owner of Condominium Unit No. 402 (the "Unit") in The Residences and Inn at Henderson's Wharf, a Condominium (the "Condominium"). together with all appurtenances and advantages thereunto pertaining, and Parking Unit No. P-61 and an undivided percentage interest in the common elements, common expenses and common profits in the condominium regime. and together with all appliances, fixtures. equipment and personalty located in the Unit (collectively, the "Property"). Seller desires to sell and convey to Buyer. and Buyer desires to purchase from Seller. the Property upon the terms and conditions set forth in this Agreement. Agreements NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, and of other good and valuable consideration. the receipt and sufficiency of 9 which are hereby acknowledged, Seller and Buyer agree as follows: 1. . SALE AND PURCHASE. Subject to the terms and conditions set forth in this Agreement, Seller hereby agrees to sell to Buyer. and Buyer hereby agrees to purchase from Seller. the Property. 2. PURCHASE PRICE AND PAYMENT. The purchase price to be paid by Buyer to Seller for the Property (the "Purchase Price") shall be the sum of One Hundred Ten Thousand Dollars ($110,000.00). The Purchase Price shall be paid at Closing (as hereinafter defined) by bank. cashier's, certified or title company check or by bank wire. 3. POSSESSION: RISK OF LOSS. (a) At Closing, Seller shall deliver to Buyer possession of the Property, in broom clean condition, free of any and all tenancies. (b) Until Closing, the Seller shall bear the risk of any damage to or destruction of the Property. From and after the date hereof and until Closing, the Seller shall. at its expense, (a) keep the Property insured against fire and such other insurable casualties as are commonly insured against by an all-risk casualty insurance policy, to its full insurable value, and (b) cause each such policy to be endorsed to name the Buyer (in its capacity as contract purchaser hereunder) as an additional insured thereunder as its interest may appear. 4. TITLE. Fee simple title in and to the Property shall be marketable, insurable at standard rates on an ALTA Form B policy of owner's title insurance, and free and clear of all liens, encumbrances, leases, easements, covenants, conditions and restrictions, except for those matters shown on the title report attached hereto as Exhibit A and incorporated herein by reference (collectively, the "Permitted Property Exceptions"). From and after the Effective Date Seller shall not do or cause to be done anything which will affect the status of title of the Property. Notwithstanding anything to the contrary, Seller shall discharge any lien or encumbrance which is capable of being discharged by the payment of money. including anv deed of trust or mortgage. 5. SELLER'S REPRESENTATIONS AND WARRANTIES. Seller makes the following representations and warranties to Buyer. each of which shall be true and correct on the Effective Date and on the Closing Date (as hereinafter defined) and shall survive the Closing: (a) The execution and deliver,., of this Agreement by Seller, and the performance by Seller of all terms and conditions contained herein, do not violate the terms of, are not in conflict with, and will not result in the breach of or default under (1) any agreement, commitment, obligation, contract or instrument under which Seller or the Property is bound or affected or (ii) any law, rule, regulation or court order by which the Property or Seller is affected. (b) As of the Effective Date, all taxes, assessments, fees or other charges (other than condominium fees) affecting or pertaining to the Unit have been paid in full. (c) There are no leases or tenancies with respect to the Property or any part thereof and there have not been any for the preceding six months. The Property has never been a single family residential rental dwelling as such term is defined in Article 13, Sections 46-55 of the Baltimore City Code (1976 Edition. as amended). Seller will not lease the Unit prior to Closing. 6. CONDITIONS PRECEDENT TO CLOSING. The obligation of Buyer to purchase the Property pursuant to this Agreement shall be expressly conditioned upon and subject to the satisfaction (or written waiver by Buyer) of each of the following, conditions: (i) Each of the representations and warranties of Seller contained in Section 5 shall be true as of the Closing Date: and (ii) Seller shall not be in default of any of its obligations under this Agreement. If any one or more of such conditions precedent are not satisfied (or the satisfaction thereof is not waived in writing by Buyer) as of the Closing Date. then Buyer shall have the right, at its option, to terminate this Agreement by written notice thereof to Seller, and thereafter neither party shall have any further liability or obligation hereunder. 7. CLOSING; CLOSING COSTS, ADJUSTMENTS. (a) The consummation of the transactions contemplated by this Agreement (the "Closing") shall take place at the offices of Neuberger, Quinn, Gielen, Rubin & Gibber, P.A., 27th Floor, One South Street, Baltimore, Maryland 21202, or at such other location in Baltimore City designated by Buyer, within sixty (60) days from the date of this Agreement upon not less than five (5) days prior notice from Buyer to Seller, at a time designated by Buyer ("Closing Date"). If the Closing Date as provided herein falls on a Saturday, Sunday or legal holiday. then the Closing Date shall be extended to the next day which is a business day. (b) Buyer shall pay all recording costs and any costs charged by the council of unit owners of the Condominium in connection with such conveyance. (c) All fees (other than condominium fees). all taxes, general or special. and all other public and governmental charges or assessments against the Property which are or may be payable on an annual or semi-annual basis (including metropolitan and other benefit charges. assessments. liens or encumbrances) shall be adjusted and apportioned as of the Closing and are to be assumed and paid thereafter by Buyer, whether or not the assessments have been levied as of the Closing. (d) All outstanding condominium fees assessed against the Property up through the date of Closing shall be paid by Buyer at Closing. (e) All water and sewer bills for the Property shall be adjusted as of the Closing based on prior bills and all gas and/or electric bills shall be adjusted as of the Closing based on meter reading or prior bills. 8. RECORDATION AND TRANSFERTAXES. OTHER COSTS. (a) SECTION 14-104 OF THE REAL PROPERTY ARTICLE OF THE ANNOTATED CODE OF MARYLAND PROVIDES THAT, UNLESS OTHERWISE NEGOTIATED IN THE CONTRACT OR PROVIDED BY STATE OR LOCAL LAW, THE COST OF ANY RECORDATION TAX OR STATE OR LOCAL TRANSFER TAX SHALL BE SHARED EQUALLY BY BUYER AND SELLER. This statement is provided for informational purposes only. Except as provided in subsection (b) below, Buyer shall pay the total cost of all documentary stamps, recordation taxes and transfer taxes imposed upon the transfer of the Property. (b) This subsection applies if Buyer is a first-time Maryland home buyer who will reside in the Property. If there are two or more Buyers, then each Buyer must be someone who is a first-time Maryland home buyer, or someone who will not occupy the house as a principal residence and who is a co-maker or guarantor of a purchase money deed of trust or mortgage for the benefit of the first-time Maryland home buyer. A "first-time Maryland home buyer" means an individual who has never owned in the State of Maryland residential real property that has been his or her principal residence. Section 14-104 of the Real Property Article of the Annotated Code of Maryland provides that: (i) Buyer's portion of the State transfer tax is waived; (ii) State transfer tax will be reduced to 0.25% of the sales price of the property; (iii) the entire amount of the State transfer tax shall be paid by Seller; and (iv) the entire amount of recordation tax and local transfer tax shall be paid by Seller unless there is an express agreement between Buyer and Seller that the recordation tax and local transfer tax will not be paid entirely by Seller. In this Agreement, the parties agree that the costs of transfer tax and recordation tax shall be paid by Buyer. ___ check if first-time Maryland Home Buyer. 9. DEFAULT. (a) If Buyer shall have fully performed its obligations hereunder and Seller breaches this Agreement or otherwise falls to perform or observe any of the covenants or obligations to be performed or observed by Seller hereunder, or if any of Seller's representations or warranties hereunder is incorrect or untrue as of the Closing Date. Buyer shall have the right to (i) enforce Buyer's right of specific performance, (ii) bring suit for all damages suffered by reason of Seller's action or inaction, and/or (111) enforce any and all other remedies available to Buyer at law or in equity. (b) If Seller shall have fully performed its obligations hereunder and Buyer breaches this Agreement or otherwise fails to perform or observe any of the covenants or obligations to be performed or observed by Buyer hereunder. Seller shall have the right to (1) enforce Seller's right of specific performance, (11) bring suit for all damages suffered by reason of Buyer's action or inaction, and/or (111) enforce any and all other remedies available to Seller at law or in equity. (c) In the event of litigation, the prevailing party shall be entitled to reasonable attorneys' fees and costs of litigation. 10. CLOSING DOCUMENTS. (a) At Closing, upon payment of the Purchase Price, Seller shall execute and deliver to the closing officer or title company representative a special warranty deed, with covenants of further assurances, in the form attached hereto as Exhibit B and incorporated herein by reference, conveying fee simple title to the Property to Buyer free and clear of all liens, encumbrances, leases, easements, covenants, conditions. restrictions and other title exceptions other than the Permitted Property Exceptions. (b) On the Closing Date, Buyer shall execute, acknowledge and deliver all additional documents that may reasonably be necessary or appropriate to carry out the provisions hereof. 11. OPERATIONS PENDING CLOSING. From and after the dates listed below, the parties shall perform as follows: (a) From and after the Effective Date, Seller shall promptly furnish to Buyer copies of any and all notices or communications that Seller receives from (i) any governmental or quasi-governmental entities. or any other body having jurisdiction with respect to the use and occupancy or physical condition of the Property. and/or (ii) any other notice or communication relating to the Property. (b) From and after the Effective Date, Seller shall promptly furnish to Buyer written notice of any event or condition that causes or may tend to cause a change in the facts relating to, or the accuracy, completeness or truth of. any of the representations, warranties. covenants, or any of the information provided herein. (c) From and after the Effective Date, neither Seller nor Seller's agents. affiliates or employees shall sell, offer for sale, permit the use of, negotiate with respect to, or otherwise deal in the sale, lease or other transfer of the Property or any interest therein. 12. BROKERAGE. Each party represents and warrants to the other that it has dealt with no agent, broker or finder in connection with this Agreement. and each party shall indemnify, defend and save harmless the other from and against any loss, cost. damage or expense (including reasonable attorneys' fees) arising from a breach of such representation or warranty. 13. 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 Seller: Henderson's Wharf Baltimore L.P. c/o Gunn Financial, Inc. 45 Broad Street Boston, MA 02109 ATTN: Charles Intravaia Telecopy No. (617)338-6164 With a copy to: Richard Rubin, Esquire Neuberger, Quinn, Gielen, Rubin & Gibber, P.A. Commerce Place, 27th Floor One South Street Baltimore, Maryland 21202-3201 Telecopy No. (410) 332-8594 If to Buyer: Richard Sassi 10 East Lee Street Unit 1509 Baltimore. Maryland 21202 Telecopy No. (410)__________ With a copy to Bruce D. Brown, Esquire Siskind, Grady, Rosen & Hoover, P.A. Jefferson Building Two East Fayette Street Baltimore, Maryland 21202 Telecopy No. (410) 332-0269 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. malls. Each party may change its address or telecopy number 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 U.S. Post Office. 14. RESALE NOTICE. SELLER IS REQUIRED BY LAW TO FURNISH TO BUYER NOT LATER THAN FIFTEEN (15) DAYS PRIOR TO THE CLOSING CERTAIN INFORMATION CONCERNING THE CONDOMINIUM WHICH IS DESCRIBED IN ss.11-135 OF THE MARYLAND CONDOMINIUM ACT. THIS INFORMATION MUST INCLUDE AT LEAST THE FOLLOWING: (1) A COPY OF THE DECLARATION (OTHER THAN THE PLATS); (11) A COPY OF THE BYLAWS; (111) A COPY OF THE RULES AND REGULATIONS OF THE CONDOMINIUM; (IV) A CERTIFICATE CONTAINING: (1) A STATEMENT DISCLOSING THE EFFECT ON THE PROPOSED CONVEYANCE OF ANY RIGHT OF FIRST REFUSAL OR OTHER RESTRAINT ON THE FREE ALIENABILITY OF THE UNIT, OTHER THAN ANY RESTRAINT CREATED BY THE UNIT OWNER; (2) A STATEMENT OF THE AMOUNT OF THE MONTHLY COMMON EXPENSE ASSESSMENT AND ANY UNPAID COMMON EXPENSE OR SPECIAL ASSESSMENT CURRENTLY DUE AND PAYABLE FROM THE SELLING UNIT OWNER; (3) A STATEMENT OF ANY OTHER FEES PAYABLE BY THE UNIT OWNERS TO THE COUNCIL OF UNIT OWNERS; (4) A STATEMENT OF ANY CAPITAL EXPENDITURES APPROVED BY THE COUNCIL OF UNIT OWNERS OR ITS AUTHORIZED DESIGNEE PLANNED AT THE TIME OF THE CONVEYANCE WHICH ARE NOT REFLECTED IN THE CURRENT OPERATING BUDGET INCLUDED IN THE CERTIFICATE; (5) THE MOST RECENTLY PREPARED BALANCE SHEET AND INCOME AND EXPENSE STATEMENT, IF ANY, OF THE CONDOMINIUM; (6) THE CURRENT OPERATING BUDGET OF THE CONDOMINIUM, INCLUDING DETAILS CONCERNING THE AMOUNT OF THE RESERVE FUND FOR REPAIR AND REPLACEMENT OF ITS INTENDED USE, OR A STATEMENT THAT THERE IS NO RESERVE FUND; (7) A STATEMENT OF ANY JUDGMENTS AGAINST THE CONDOMINIUM AND THE EXISTENCE OF ANY PENDING SUITS TO WHICH THE COUNCIL OF UNIT OWNERS IS A PARTY; (8) A STATEMENT GENERALLY DESCRIBING ANY INSURANCE POLICIES PROVIDED FOR THE BENEFIT OF THE UNIT OWNERS, A NOTICE THAT THE POLICIES ARE AVAILABLE FOR INSPECTION STATING THE LOCATION AT WHICH THEY ARE AVAILABLE, AND A NOTICE THAT THE TERMS OF THE POLICY PREVAIL OVER THE GENERAL DESCRIPTION; (9) A STATEMENT AS TO WHETHER THE COUNCIL OF UNIT OWNERS HAS KNOWLEDGE THAT ANY ALTERATION OR IMPROVEMENT TO THE UNIT OR TO THE LIMITED COMMON ELEMENTS ASSIGNED TO THE UNIT VIOLATES ANY PROVISION OF THE DECLARATION, BYLAWS, OR RULES OR REGULATIONS; (10) A STATEMENT AS TO WHETHER THE COUNCIL OF UNIT OWNERS HAS KNOWLEDGE OF ANY VIOLATION OF THE HEALTH OR BUILDING CODES WITH RESPECT TO THE UNIT, THE LIMITED COMMON ELEMENTS ASSIGNED TO THE UNIT, OR ANY OTHER PORTION OF THE CONDOMINIUM; (11) A STATEMENT OF THE REMAINING TERM OF ANY LEASEHOLD ESTATE AFFECTING THE CONDOMINIUM AND THE PROVISIONS GOVERNING ANY EXTENSION OR RENEWAL OF IT; AND (12) A DESCRIPTION OF ANY RECREATIONAL OR OTHER FACILITIES WHICH ARE TO BE USED BY THE UNIT OWNERS OR MAINTAINED BY THEM OR THE COUNCIL OF UNIT OWNERS, AND A STATEMENT AS TO WHETHER OR NOT THEN' ARE TO BE A PART OF THE COMMON ELEMENTS; AND (V) A STATEMENT BY THE UNIT OWNER AS TO WHETHER THE UNIT OWNER HAS KNOWLEDGE: (1) THAT ANY ALTERATION TO THE UNIT OR TO THE LIMITED COMMON ELEMENTS ASSIGNED TO THE UNIT VIOLATES ANY PROVISION OF THE DECLARATION, BYLAWS, OR RULES AND REGULATIONS; (2) OF ANY VIOLATION OF THE HEALTH OR BUILDING CODES WITH RESPECT TO THE UNIT OR THE LIMITED COMMON ELEMENTS ASSIGNED TO THE UNIT; AND (3) THAT THE UNIT IS SUBJECT TO AN EXTENDED LEASE UNDER 11-137 OF THE MARYLAND CONDOMINIUM ACT OR UNDER LOCAL LAW, AND IF SO, A COPY OF THE LEASE MUST BE PROVIDED. BUYER WILL HAVE THE RIGHT TO CANCEL THIS AGREEMENT WITHOUT PENALTY, AT ANY TIME WITHIN SEVEN (7) DAYS FOLLOWING DELIVERY TO BUYER OF ALL OF THIS INFORMATION. HOWEVER, AFTER THE CLOSING, BUYER'S RIGHT TO CANCEL THIS AGREEMENT IS TERMINATED. 15. DISCLOSURE/DISCLAIMER STATEMENT. Attached hereto as Exhibit C and incorporated herein by reference is a notice to Buyer advising Buyer of Buyer's rights under 10-702 of the Real Property Article of the Annotated Code of Maryland. Buyer acknowledges receipt of. and has executed, a copy of such notice. Pursuant to the provisions of ss.10-702 of the Real Property Article of the Annotated Code of Maryland, Seller has delivered to Buyer the written residential property disclaimer statement on the form attached hereto as Exhibit D and incorporated herein by reference. 16. CERTIFICATE OF NON-FOREIGN STATUS. At Closing, Seller shall provide Buyer with either (i) an certificate of non-foreign status in substantially the form attached hereto as Exhibit E, stating that Seller is not a foreign person (as that term is defined in Section 1445 of the Internal Revenue Code) and providing Seller's tax identification number, or (ii) a "Qualifying Statement" as such term is defined by Section 1445 of the Internal Revenue Code. MISCELLANEOUS PROVISIONS. (a) This Agreement contains the sole, final and entire agreement between the parties and is intended to he an integration of all prior and contemporaneous agreements, conditions and undertakings between the parties. There are no promises, agreements, conditions, undertakings, warranties or representations, oral or written, express or implied, between the parties other than as herein set forth. (b) This Agreement may be amended by and only by an instrument executed and delivered by Seller and Buyer. (c) This Agreement and all of the provisions hereof shall be binding upon and shall inure to the benefit of the parties and their respective heirs. devisees. legatees, legal representatives. successors and assigns. (d) This Agreement shall be governed by and construed in accordance with the laws of the State of Maryland. (e) All provisions hereof shall survive the Closing Date, unless otherwise provided herein. (f) Each of the parties agrees to execute and deliver upon reasonable demand of the other any document or instrument that such other party reasonable, deems necessary or desirable to evidence or accomplish the rights herein conferred or to implement or consummate the purposes and intent hereof. (g) Time is of the essence. (h) No determination by any court, governmental or administrative entity or otherwise that any provision of this Agreement or any amendment hereof is invalid or unenforceable in any instance shall affect the validity or enforceability of (a) any other such provision, or (b) such provision in any circumstance not controlled by such determination. Each such provision shall be valid and enforceable to the fullest extent allowed by, and shall be construed wherever possible as being consistent with. applicable law. (i) This Agreement may be executed in one or more counterparts. each of which shall be deemed an original and all of which when taken together shall constitute one and the same document. This Agreement may be delivered by facsimile transmission of an originally executed copy to be followed by immediate delivery of the original of such executed copy. (j) The following exhibits are attached to, and made a part of. this Agreement: A - Permitted Property Exceptions B - Form of Deed C - Notice to Buyer - Property Disclosure D - Property Disclaimer Statement E - Certificate of Non-Foreign Status IN WITNESS WHEREOF. the parties hereto have duly executed this Agreement tinder seal on the date first above written. WITNESS/ATTEST: SELLER: (SEAL) Richard Sassi WITNESS: BUYER: HENDERSON'S WHARF BALTIMORE L.P. By:Henderson's Wharf Development Corporation. General Partner By: (SEAL) Name: Title EXHIBIT A TO AGREEMENT OF SALE AND PURCHASE PERMITTED PROPERTY EXCEPTIONS SCHEDULE B EXCEPTIONS FROM COVERAGE Policy No. File No.1980348 1 Taxes payable on an annual basis have been paid through the fiscal year ending June 30, 1999, and other public charges including assessments by any County, Municipality, Metropolitan District or Commission) payable on an annual basis have been paid through the year ending December 31-, 1998. This policy does insure against the balance of any public charges (including assessments by any County, Municipality, Metropolitan District or Commission) payable on an annual basis subsequent to the year ending December 31, 1998. Nor does this policy insure against possible future tax levies, nor against possible public charges as defined above that have not been levied or assessed, which future taxes, charges and assessments are not now due and payable. 3. Declaration of the Residences and Inn at Henderson's Wharf, a condominium, by Carley Capital Group dated August 30, 1988 and recorded among the Land Records of Baltimore City in Liber SEBNo. 1821, folio 20, as amended by the following: a) Amendment to Declaration dated April 3, 1989 and recorded among the aforesaid Land Records in Liber SEB No. 2081, folio 329' b) Second Amendment to Declaration dated July 31, 1990 and recorded among the aforesaid Land Records in Liber SEB No. 2563, folio 230; and c) Third Amendment to Declaration dated December 14, 1992 and recorded among the aforesaid Land Records in Liber SEB NO. 3578, folio 030. 4. Amended and Restated Henderson's Wharf Disposition Agreement dated October 19, 1984 and recorded among the Land Records of Baltimore City in Liber SEB No. 335, folio 362, as amended by First Amendment to Amended and Restated Henderson's Wharf Disposition Agreement dated July 31, 1990 and recorded among the aforesaid Land Records in Liber SEB No. 2563, folio 264. CONTINUATION OF SCHEDULE B PART I File No. 1951576 5. Building Perimeter Easement and Connecting Easement established by Pedstrian Promenade Easement Agreement dated October 19, 1984 and recorded among th Land Records of Baltimore City in Liber SEC No. 335, folio 204, by and between Carley Capital Group and Mayor and City Council of Baltimore, as amended by the following: a) Amendment of Pedestrain Promenade Easement Agreement dated April 6, 1987 and recorded amont the aforesaid Land Records in Liber SEB No. 1308, folio 589; and b) Second Amendment to Pedestrian Promenade Easement Agreement dated July 31 1990 and recorded among the aforesaid Land Records in Liber SEB No. 2563, folio 241; 6. Easement to the benefit of the Marina Owner over the Building Perimeter Easement and Commercial Courtyard Area, as established by Reciprocal Easement Agreement dated August 31, 1988 and recorded among the Land Records of Baltimore City in Liber SEB No. 1824, folio 162, by and between Carley Capital Group and The Council of Unit Owners of The Residences and Inn at Henderson's Wharf, a Condominium, Incorporated, as amended by: a) Amendment to Reciprocal Easement Agreement dated July 31, 1998 and recorded among the aforesaid Land Records in Liber SEB No. 2822, folio 277; and b) Second Amendment to Reciprocal Easement Agreement dated February 27, 1990 and recorded among the aforesaid Land Records in Liber SEB 5395, folio 91. 7.Terms, conditions, easements, restrictions and other criteria as shown on the Plats entitled "The Residences at Henderson's Wharf, a Condominium:, as follows: a) Sheets 1 of 11 through 11 of 11 dated August, 1988 and recorded as Condominium Plat SEB No. 232; and b) Sheets 1 of 11 through 11 of 11 dated September, 1988 and revised December 14, 1992 and recorded as Condominium Plat SEB No. 298. EXHIBIT B TO AGREEMENT OF SALE AND PURCHASE DEED DEED THIS DEED ("Deed") is made on this day of , 1998, from RICHARD SASSI ("Grantor") to HENDERSON'S WHARF BALTIMORE L.P., a Delaware limited partnership ("Grantee"). The Grantor for a consideration of One Hundred Ten Thousand Dollars ($110,000.00) grants, conveys and assigns to the Grantee, its successors and assigns, in fee simple. the real property located in Baltimore City, Maryland, and described as follows: Condominium Unit No. 402 ("Unit") and Parking Unit No. P-61 ("Parking Unit") in THE RESIDENCES AND INN AT HENDERSON'S WHARF, A CONDOMINIUM ("Condominium"), a condominium established under the provisions of Title I I of the Real Property Article of the Annotated Code of Maryland (1988 Replacement Volume as amended) by the operation and effect of a Declaration dated August 30, 1988. and recorded among the Land Records of Baltimore City (the "Land Records") at Liber S.E.B. No. 1821. page 20. et. seq.. made by Carley Capital Group (hereinafter together with any amendments thereto, referred to as the "Declaration"), all as the Unit, the Parking Unit and the Condominium are defined in tile Declaration and are shown on those certain plats entitled "Condominium Plat. The Residences and Inn at Henderson's Wharf, a Condominium." dated August. 1988. and recorded among the Plat Records of Baltimore City at Condominium Plat Record Book S.E.B. No. 232, Sheets I through 11, as amended (all of which plats, together with any supplements thereto, are hereinafter referred to collectively as the "Condominium Plats"). The improvements thereon being known as 1000 Fell Street, Unit No. 402, along with Parking Unit No. P-61 are hereinafter referred to as the "Property", and Being the same property described in a Deed from Carley Capital Group to Grantor dated September 6. 1988 and recorded among the Land Records in Liber 1856, folio 239. TOGETHER WITH all improvements contained in the Property. and all appurtenances and advantages thereunto pertaining, including an undivided percentage interest in the common elements, common expenses and common profits in the condominium regime as set forth in the Declaration, the Bylaws and the Condominium Plats. TO HAVE AND TO HOLD the property hereby conveyed to Grantee. its successors and assigns. in fee simple. forever. The Grantor hereby covenants that it has not done or suffered to be done anv act. matter or thing whatsoever to encumber the property hereby conveyed. that it will warrant specially the property hereby-, and that it will execute such further assurances of the same as may be requisite. IN WITNESS WHEREOF, the Grantor has executed this Deed under seal oil the date first above written. WITNESS: GRANTOR: (SEAL) Richard Sassi STATE OF MARYLAND ) ) ) to wit: COUNITY OF ) I HEREBY CERTIFY that on this day of . 1998. before me, the subscriber, a Notary Public of the State of Maryland, personally appeared RICHARD SASSI. known to me (or satisfactorily proven) to be the person whose name is subscribed to the within instrument. and he acknowledged that he executed the foregoing, instrument for the purposes therein contained. IN WITNESS WHEREOF, I have hereunto set rny hand and Notarial Seal. Notary Public My Commission Expires: CERTIFICATE THE UNDERSIGNED, AN ATTORNEY ADMITTED TO PRACTICE BEFORE THE COURT OF APPEALS OF MARYLAND, HEREBY CERTIFIES THAT THE ABOVE INSTRUMENT WAS PREPARED BY ME OR UNDER MY SUPERVISION. Susan M. Wilkins, Attorney MR./MS. CLERK: AFTER THIS DEED OF EXCHANGE HAS BEEN RECORDED, PLEASE RETURN TO: Susan M. Wilkins, Esq Neuberger, Quinn. Gielen. Rubin & Gibber. P.A. Commerce Place, 27th Floor One South Street Baltimore, Maryland 21202-3201 EXHIBIT C TO AGREEMENT OF SALE AND PURCHASE NOTICE TO BUYER-PROPERTY DISCLOSURE NOTICE TO BUYER OF BUYER'S RIGHT UNDER MARYLAND'S PROPERTY DISCLOSURE LAW NOTE: This Notice does not apply to: (1) The initial sale of single family residential real property; (2) a transfer that is exempt from the transfer tax under ss. 13-207 of the Tax-Property Article, except land installment contracts of sale under ss. 1 3-207(l 1) of the Tax-Property Article and options to purchase real property under ss. 13-207(12) of the Tax-Property Article; (3)a sale by a lender acquiring the real property by foreclosure or deed in lieu of foreclosure; (4) a sheriffs sale, tax sale, or sale by foreclosure, partition or by court appointed trustee; (5) a transfer by a fiduciary in the course of the administration of a decedent's estate, guardianship, conservatorship, or trust; or (6) a transfer of single family residential real property to be converted by the buyer into a use other than residential use or to be demolished. SECTION 10-702 OF THE REAL PROPERTY ARTICLE OF THE ANNOTATED CODE OF MARYLAND ("SECTION 10-702") REQUIRES THAT SELLERS OF SINGLE FAMILY RESIDENTIAL PROPERTY PROVIDE YOU. THE BUYER. ON OR BFFORF ENTERING INTO A CONTRACT OF SALE, EITHER: (A) A WRITTEN PROPERTY CONDITION DISCLOSURE STATEMENT LISTING ALL DEFECTS OR INFORMATION OF WHICH THE SELLER HAS ACTUAL KNOWLEDGE IN RELATION TO THE FOLLOWING: (I) WATER AND SEWER SYSTEMS, INCLUDING THE SOURCE OF HOUSEHOLD WATER, WATER TREATMENT SYSTEMS, AND SPRINKLER SYSTEMS, (II) INSULATION. (III) STRUCTURAL SYSTEMS, INCLUDING THE ROOF. WALLS. FLOORS. FOUNDATION. AND ANY BASEMENT, (IV) PLUMBING. ELECTRICAL. HEATING. AND AIR CONDITIONING SYSTEMS: (V) INFESTATION OF WOOD-DESTROYING INSECTS: (VI) LAND USE MATTERS. (VIl) HAZARDOUS OR REGULATED MATERIALS, INCLUDING ASBESTOS, LEAD-BASED PAINT. RADON. UNDERGROUND STORAGE TANKS, AND LICENSED LANDFILLS: AND (VIII) ANY OTHER MATERIAL DEFECTS KNOWN TO THE SELLER;OR (B) A WRITTEN DISCLAIMER STATEMENT PROVIDING THAT: (I) THE SELLER MAKES NO REPRESENTATIONS OR WARRANTIES AS TO THE CONDITION OF THE REAL PROPERTY OR ANY IMPROVEMENTS ON THE REAL PROPERTY; AND (II) THE BUYER WILL BE RECEIVING THE REAL PROPERTY "AS IS", WITH ALL DEFECTS THAT MAY EXIST, EXCEPT AS OTHERWISE PROVIDED IN THE CONTRACT OF SALE. AT THE TIME THE DISCLOSURE OR DISCLAIMER STATEMENT IS DELIVERED TO YOU, YOU ARE REQUIRED TO DATE AND SIGN A WRITTEN ACKNOWLEDGEMENT OF RECEIPT. WHICH SHALL BE INCLUDED IN OR ATTACHED TO THE CONTRACT OF SALE. YOU ARE HEREBY NOTIFIED THAT, IN CERTAIN CIRCUMSTANCES. YOU HAVE THE RIGHT TO RESCIND YOUR CONTRACT OF SALE WITH THE SELLER IF THE YOU SELLER FAILS TO DELIVER TO YOU THE WRITTEN PROPERTY CONDITION DISCLOSURE STATEMENT. SECTION 10-702 PROVIDES THAT A BUYER WHO DOES NOT RECEIVE THE DISCLOSURE STATEMENTON OR BEFORE ENTERING INTO THE CONTRACT OF SALE HAS THE UNCONDITIONAL RIGHT, UPON WRITTEN NOTICE TO THE SELLER OR SELLER'S AGENT: (I) TO RESCIND THE CONTRACT OF SALE AT ANY TIME BEFORE THE RECEIPT OF THE DISCLOSURE STATEMENT OR WITHIN 5 DAYS FOLLOWING RECEIPT OF THE DISCLOSURE STATEMENT, AND (II) TO THE IMMEDIATE RETURN OF ANY DEPOSITS MADE ON ACCOUNT OF THE CONTRACT. IF THE DISCLOSURE STATEMENT IS DELIVERED TO YOU LATER THAN 3 DAYS AFTER THE SELLER ENTERS INTO A CONTRACT OF SALE WITH YOU. THE CONTRACT IS VOID. YOUR RIGHT TO RESCIND THE CONTRACT OF SALE UNDER SECTION 10-702 TERMINATES IF NOT EXERCISED BEFORE MAKING A WRITTEN APPLICATION TO A LENDER FOR A MORTGAGE LOAN. IF THE LENDER DISCLOSES IN WRITING AT OR BEFORE THETINIE APPLICATION IS MADE THAT THE RIGHT TO RESCIND TERMINATES ON SUBMISSION OF THE APPLICATION. YOUR RIGHTS AS A BUYER UNDER SECTION 10-702 MAYNOT BE WAIVED IN THE CONTRACT OF SALE AND ANY ATTEMPTED WAIVER IS VOID. YOUR RIGHTS AS THE BUYER TO TERMINATE THE CONTRACT UNDER SECTION 10-702 ARE WAIVED CONCLUSIVELY IF NOT EXERCISED BEFORE: (I) CLOSING OR OCCUPANCY BY YOU, WHICHEVER OCCURS FIRST, IN THE EVENT OF A SALE; OR (II) OCCUPANCY, IN THE EVENT OF A LEASE WITH OPTION TO PURCHASE. THE INFORMATION CONTAINED IN THE PROPERTY CONDITION DISCLOSURE STATEMENT IS THE REPRESENTATION OF THE SELLER AND NOT THE REPRESENTATION OF THE REAL ESTATE BROKER OR SALESPERSON, IF ANY. THE SELLER IS NOT REQUIRED TO UNDERTAKE OR PROVIDE AN INDEPENDENT INVESTIGATION OR INSPECTION OF THE PROPERTY IN ORDER TO MAKE THE DISCLOSURES REQUIRED BY SECTION 10-702. THE SELLER IS NOT LIABLE FOR AN ERROR. INACCURACY OR OMISSION IN THE DISCLOSURE STATEMENT IF THE ERROR, INACCURACY. OR OMISSION %VAS BASED UPON INFORMATION THAT WAS NOT WITHIN THE ACTUAL KNOWLEDGE OF THE SELLER: OR \VAS PROVIDED TO THE SELLER BY A THIRD PARTY. YOU HAVE THE RIGHT TO OBTAIN PROFESSIONAL ADVICE ABOUT THE PROPERTY OR OBTAINAN INSPECTION OF THE PROPERTY. THE UNDERSIGNED BUYER(S) ACKNGWLEDGES RECEIPT OF THIS NOTICE ON THE DATE INDICATED BELOW. WITNESS: HENDERSON'S WHARF BALTIMORE L.P. By: Henderson's Wharf Development Corp., General Partner By: Narne: Titie: Date: EXHIBIT D TO AGREEMENT OF SALE AND PURCHASE PROPERTY DISCLAIMER STATEMENT MARYLAND RESIDENTIAL PROPERTY DISCLAIMER STATEMENT NOTICE TO SELLER AND BUYER Section 10-702 of the Real Property Article, Annotated Code of Maryland, requires the owner of certain residential real property to furnish to the BUYER either (a) a RESIDENTIAL PROPERTY DISCLAIMER STATEMENT stating that the owner is selling the property "as is" and makes no representations or warranties as to the condition of the property or any improvements on the real property, except as otherwise provided in the contract of sale, or (b) a RESIDENTIAL PROPERTY DISCLOSURE STATEMENT disclosing defects or other information about the condition of the real property actually known by the owner. Certain transfers of residential property are excluded from this requirement (see the exemptions listed below). MARYLAND RESIDENTIAL PROPERTY DISCLAIMER STATEMENT NOTICE TO OWNER(S): Sign this statement only if you elect to sell the property without representations and warranties as to its condition, except as otherwise provided in the contract of sale, otherwise, complete and sign the RESIDENTIAL PROPERTY DISCLOSURE STATEMENT. Property Address:1000 Fell Street, Condominium Unit No. 402, along with Parking Unit No. P-6 1. Legal Description: Condominium Unit No. 402 and Parking Unit No. P-61 in THE RESIDENCES AND INN AT HENDERSON'S WHARF, A CONDOMINIUM, as established pursuant to a Declaration dated August 30, 1988, and recorded among the Land Records of Baltimore City (the "Land Records") at Liber S.E.B. No. 1821, page 20. as amended by Amendment to Declaration dated April 3, 1989 and recorded among the Land Records at Liber S.E.B. No. 2081, folio 329. and as further amended by Second Amendment to Declaration dated July 31. 1990, and recorded among the Land Records at Liber S.E.B. No. 2563. folio 230. and as further amended by Third Amendment to Declaration dated as of December 14. 1992, and recorded among the Land Records at Liber S.E.B. No. 3578. folio 30 (as amended. the "Declaration"). and the Bylaws attached thereto (the "Bylaws"). and as shown on those certain plats entitled "Condominium Plat. The Residences and Inn at Henderson's Wharf, a Condominium." dated August, 1988, and recorded among the Plat Records of Baltimore City at Condominium Plat Record Book S.E.B. No. 232. Sheets I through 11. as amended by condominium plats dated December 14, 1992. and recorded among the Plat Records of Baltimore City at Condominium Plat Record Book S.E.B. 298, Sheets 1through 11(as arnended, the "Condominium Plats"). undersigned owner(s) of the real property described above make no representations or warranties as to the condition of the real property or any improvements thereon, and the BUYER will be receiving the real property "as is", with all defects which may exist, except as otherwise provided in the real estate contract of sale. The owner(s) acknowledge having carefully examined this statement and further acknowledge that they have been informed of their rights and obligations under Section ss. 10-702 of the Maryland Real Property Article. SELLER: (SEAL) Richard Sassi Date: The BUYER(s) acknowledge receipt of a copy of this disclaimer statement and further acknowledge that he has been informed of his rights and obligations under Section ss.10-702 of the Maryland Real Property Article. BUYER: HENDERSON'S WHARF BALTIMORE L.P. By:Henderson's Wharf Development Corporation, General Partner Date: By: (SEAL) Name: Title: MARYLAND RESIDENTIAL PROPERTY DISCLOSURE ACT 10-702. Exemptions. - The following are specifically excluded from the provisions of Section 10-702: 1. The initial sale of single family Residential Real Property 2. A transfer that is exempt from the transfer tax under 13-207 of the Tax-Property Article, except land installment contracts of sale under 13-207(11) of the Tax-Property Article except land installment Contracts of Sale under 13-207(11) of the Tax Property Article and options to purchase real property under 13-207(12) of the Tax-Property Article; 3. A sale by a lender acquiring the Real Property by foreclosure or deed in lieu of foreclosure; 4. A sheriff's sale, tax sale, or sale by foreclosure, partition, or by court appointed trustee; 5. A transfer by a fiduciary in the course of the administration of a decedent's estate, guardianship, conservatorship, or trust; or 6. A transfer of single family Residential Real Property to be converted by the Buyer into a use other than residential use or to be demolished. EXHIBIT E TO AGREEMENT OF SALE AND PURCHASE CERTIFICATE OF NON-FOREIGN STATUS CERTIFICATION OF NON-FOREIGN STATUS Section 1445 of the Internal Revenue Code provides that a transferee (buyer) of a U.S. real property interest must withhold tax if the transferor (seller) is a foreign person. To inform the transferee that withholding of tax is not required upon the undersigned's disposition of a U. S. real property interest, the undersigned does hereby certify the following: 1. The undersigned is not a nonresident alien for purposes of U.S. income taxation. 2. The undersigned's U.S. taxpayer identifying number is . 3. The undersigned's address is . The undersigned does understand that this certification may be disclosed to the Internal Revenue Service by the transferee and that any false statement made here could be punished by fine, imprisonment, or both. Under penalties of perjury, the undersigned does hereby declare that the undersigned has examined this certification and, to the best of the undersigned" knowledge and belief, it is true, correct, and complete. Dated: , 1998 By: Richard Sassi EXHIBIT B TO SETTLEMENT AGREEMENT RELEASE MUTUAL RELEASE This mutual release ("Release") made this day of , 1998, by and between The COUNCIL OF UNIT OWNERS OF THE RESIDENCES AND INN AT HENDERSON'S WHARF BALITIMORE L.P., a Delaware limited partnership ("HWLP"), CLAREMONT MANAGEMENT CORPORATION ("Claremont"), MCKENNA INTERNATIONAL BALTIMORE, INC. ("McKenna)", CREDIT SERVICE INTERNATIONAL BALTIMORE, INC. ("CSI"), TERRENCE P. SULLIVAN ("Sullivan"), CHARLES M. MORAN, JR. ("Moran"), CHARLES S. INTRAVAIA ("Intravaia"), BRIAN M. KRASON ("Krason") and JOSEPH V. BRADY ("Brady") (Claremont, McKenna, Sullivan, Intravaia, Krason and Brady are sometimes collectively referred to herein as the "Third Party Defendants") and RICHARD SASSI, a Maryland resident ("Sassi"). EXPLANATORY STATEMENT The Council is the council of unit owners for the residential condominium known as The Residences and Inn at Henderson's Wharf, located at the foot of Fell Street in Fells Point, Balitmore City, Maryland (the "Condominium"). HWLP operates and manages the Condominium. Sassi is the owner of Condominium Unit No. 402 and Parking Unit No. P-61 in the Condominium (collectively, the "Unit"). The Council and HWLP filed a legal action against Sassi, known as The Council of Unit Owners of the Residences and Inn at Henderson's Wharf, A Condominium, Incorporated and Henderson's Wharf Baltimore, L.P. v. Richard Sassi, Civil Case No. 97-154-052-CC-292, which is pending in the Circuit Court of Maryland for Baltimore City ("Lawsuit"). In the Lawsuit, the Council and HWLP assert caims against Sassi for delinquent condominium charges and assessments and nuisance (all of the Council's and HWLP's claims are hereinafter sometimes collectively referred to as the "Condominium's Claims"). Sassi filed a (I) counterclaim in the Lawsuit against the Council and HWLP, as applicable, for violations of Fair Debt Collection Practices Act, breach of contract, deceit and trespass (all of such claims being sometimes collectively referred to herein as the "Counterclaim"); and (ii) third party complaint in the Lawsuit against Claremont Management Corporation ("Claremont"0, McKenna Management Associates, Inc. ("McKenna"), Credit Service International Baltimore, Inc. ("CSI"), Terrence P. Sullivan ("Sullivan"), Charles M. Moran, Jr. ("Moran"), Charles S. Intravaia ("Intravaia"), Brian M. Krason ("Krason") and Joseph V. Brady ("Brady"), as applicable, for violations of Fair Debt Collection Practices Act, breach of contract, negligence, deceit and trespass (all of such claims being sometimes collectively referred to herein as the "Third Party Complaint"). Claremont, McKenna, Sullivan, Intravaia and Krason and Brady are sometimes collectively referred to herein as the "Third Party Defendants". CSI filed a cross complaint in the Lawsuit against the Council, HWLP, Claremont, McKenna, Sullivan, Moran, Intravaia, Krason and Brady for indemnification for certain matters ("Cross Claim"). The parties have agreed to compromise and settle all claims which any party has asserted or may assert in the Lawsuit, Counterclaim, Third Party Complaint or Cross Claim, or which any party has asserted or may assert in the Lawsuit, Counterclaim, Third Party Complaint or Cross Claim, or which any party may have arising out of the use of ownership or operation of the Unit, or any part thereof, pursuant to the terms of a Settlement Agreement of even date herewith between the parties ("Settlement Agreement"). NOW, THEREFORE, for and in consideration of the foregoing explanatory statements and the agreements hereinafter set forth, the sufficiency and legal adequacy of which the parties acknowledge, they do hereby agree as follows: 1. The Council and HWLP, for themselves and for their officers, directors, employees, agents, principals and shareholders, and for all their respective successors and assigns, hereby release and forever dischares Sassi and the Third Party Defendants, their respective heirs, personal representatives, successors, assigns, officers, directors, emplyees, agents, principals and shareholders, from any and all claims, actions, suits, debts, counts, covenants, contracts, damages, judgments and demands of whatsoever king or nature ("Claims"), which the Council and/or HWLP, individually or collectively, ever had, or may now have, up to the date of this Release, pertaining in any way to the Unit (other than a misrepresentation by Sassi under the Agreement of Sale, as defined in the Settlement Agreement), including but not limited to any Claims which ere raised or could have been raised in the Lawsuit. 2. Sassi, for himself and his heirs and personal representatives and assigns, hereby releases and forever discharges the Council, HWLP and the Third Party Defendants, their respective heirs, personal representatives, successors, assigns, officers, directors, employees, agents, principals and shareholders, from any and all Claims which Sassi ever had, or may now have, up to the date of this Release, pertaining in any way to the Unit, including but not limited to any Clains which were raised or could have been raised in the Counterclaim or in the Third Party Complaint. 3. The Third Party Defendants, for themselves and for their officers, directors, employees, agents, principals and shareholders, and for their respective heirs, personal representatives, successors and assigns, hereby releases and forever discharges Sassi, the Council and HWLP, their respective heirs, personal representatives, successors, assigns, officers, directors, employees, agents, principals and shareholders, from any and all Claims which the Third Party Defendants, individually and/or collectively, ever had, or may now have, up to the date of the Release, pertaining in any way to the Unit, including but not limited to any Claims which were raised or could have been raised in the Cross Complaint. 4. This Release contains the entire agreement between the parties and is the complete written integration of that agreement. This writing is intended by the parties as a final expression of that agreement and as a complete and exclusive statement of the terms thereof, all negotiations, considerations and representations between the parties having been incorporated herein. No course or prior dealings between the parties or their officers, employees, agents or affiliates shall be relevant or admissible to supplement, explain or vary any of the terms of this Release. None of the parties to this Release has any right to rely on any prior or contemporaneous representations made by anyone concerning this Release and none of the parties has so relied. 5. Each of the parties has read this Release and fully understands it. 6. This Release may be executed in one or more counterparts, each of which Shall be deemed an original and all of which when taken together shall constitute one and the same document. This Release may be delivered by facsimile transmission or an originally executed copy to be followed by immediate delivery of the original of such executed copy. IN WITNESS WHEREOF, the parties have executed this Release under seal as of the day of , 1998. WITTNESS/ATTEST: COUNCIL: THE COUNCIL OF UNIT OWNERS OF THE RESIDENCES AND INN AT HENDERSON'S WHARF, a Condominium, Incorporated By: (SEAL) Name: Title: HWLP: HENDERSON'S WHARF BALTIMORE L.P. By: Henderson's Wharf Development Corporation, General Partner By: (SEAL) Name: Title: CLAREMONT CLAREMONT MANAGEMENT CORPORATION By: (SEAL) Name: Title: MCKENNA: MCKENNA MANAGEMENT ASSOCIATES, INC. By: (SEAL) Name: Title: CSI: CREDIT SERVICE INTERNATIONAL BALTIMORE, INC. By: (SEAL) Name: Title: SULLIVAN: (SEAL) Terrence P. Sullivan MORAN: (SEAL) Charles M. Moran, Jr. INTRAVAIA: (SEAL) Charles S. Intravaia KRASON: (SEAL) Brian M. Krason BRADY: (SEAL) Joseph V. Brady SASSI: (SEAL) Richard Sassi STATE OF ) ) TO WIT: CITY/COUNTY OF ) I HEREBY CERTIFY that on this day of 1998 , before me, the subscriber, a Notary Publicof the State and City/County aforesaid, personally appeared , who acknowledged himself/herself to be the of The Council of Unit Owners of the Residences and Inn at Henderson's Wharf, a , and that he/she as such officer, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing in my presence the name of the corporation by himself/herself as suchofficer. In Witness Whereof. I have hereunto set my hand and official seal. Notary PublicMy Commission expires: STATE OF ) ) TO WIT: CITY/COUNTY OF ) I HEREBY CERTIFY that on this day of 1998 , before me, the subscriber, a Notary Publicof the State and City/County aforesaid, personally appeared , who acknowledged himself/herself to be the of Henderson's Wharf Development Corporation, general partner of Henderson's Wharf Baltimore, L.P., a Delaware limited partnership, and that he/she as such officer, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing in my presence the name of the corporation by himself/herself as suchofficer. In Witness Whereof. I have hereunto set my hand and official seal. Notary Public My Commission expires: STATE OF ) ) TO WIT: CITY/COUNTY OF ) I HEREBY CERTIFY that on this day of 1998 , before me, the subscriber, a Notary Publicof the State and City/County aforesaid, personally appeared , who acknowledged himself/herself to be the of Claremont Management Corporation, a , and that he/she as such officer, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing in my presence the name of the corporation by himself/herself as suchofficer. In Witness Whereof. I have hereunto set my hand and official seal. Notary Public My Commission expires: STATE OF ) ) TO WIT: CITY/COUNTY OF ) I HEREBY CERTIFY that on this day of 1998 , before me, the subscriber, a Notary Publicof the State and City/County aforesaid, personally appeared , who acknowledged himself/herself to be the of McKenna Management Associates, Inc., a , and that he/she as such officer, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing in my presence the name of the corporation by himself/herself as suchofficer. In Witness Whereof. I have hereunto set my hand and official seal. Notary Public My Commission expires: STATE OF ) ) TO WIT CITY/COUNTY OF ) I HEREBY CERTIFY that on this day of , 1998 , before me, the subscriber, a Notary Public of the State and City/County aforesaid, personally appeared , who acknowledged himself/herself to be the of Credit Service International Baltimore, Inc., a , and that he/she as such officer, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing in my presence the name of the corporation by himself/herself as such officer. In Witness Whereof, I have hereunto set my hand and official seal. Notary Public My Commission expires: STATE OF ) ) to wit: CITY/COUNTY OF ) I HEREBY CERTIFY that on this day of - . 1998, before me, the subscriber, a Notary Public of the State aforesaid, personally appeared Terence P. Sullivan, known to me (or satisfactorily proven) to be the persons whose name is subscribed to the within instrument, and he acknowledged that he executed the foregoing instrument for the purposestherein contained.IN WITNESS WHER-EOF. I have hereunto set my hand and Notarial Seal. Notarv PublicMy Commission Expires: STATE OF ) ) to wit: CITY/COUNTY OF ) I HEREBY CERTIFY that on this day of , 1998, before me, the subscriber,a Notary Public of the State afoiesaid, personally appeared Charles M. Moran, Jr., known to me (or satisfactorily proven) to be the persons whose name is subscribed to the within instrument, and he acknowledged that he executed the foregoing instrument for the purposes therein contained. IN WITNESS WHEREOF, I have hereunto set my hand and Notarial Seal. Notary Public My Commission Expires: STATE OF ) ) to wit: CITY/COUNTY OF ) I HEREBY CERTIFY that on this day of , 1998, before me, the subscriber, a Notary Public of the State aforesaid, personally appeared Charles S. Intravaia, known to me (or atisfactorily proven) to be the persons whose name is subscribed to the within instrument, and he acknowledged that he executed the foregoing instrument for the purposes therein contained. IN WITNESS WHEREOF, I have hereunto set my hand and Notarial Seal. Notary Public My Commission Expires: STATE OF ) ) to wit: CITY/COUNTY OF ) I HEREBY CERTIFY that on this day of , 1998, beforeme, the subscriber, a Notary Public of the State aforesaid, personally appeared Brian M. Krason,known to me (or satisfactorily proven) to be the persons whose name is subscribed to the withininstrument, and he acknowledged that he executed the foregoing instrument for the purposes thereincontained.IN WITNESS WHEREOF, I have hereunto set my hand and Notarial Seal. Notary Public My Commissior Expires: STATE OF ) ) to wit: CITY/COUNTY OF ) I HEREBY CERTIFY that on this day of , 1998, before me, the subscriber, a Notary Public of the State aforesaid, personally appeared Joseph V. Brady, known to me (or satisfactorily proven) to be the persons whose name is subscribed to the within instrument, and he acknowledged that lie executed the foregoing instrument for the purposes therein contained. IN WITNESS WHEREOF. I have hereunto set my hand and Notarial Seal. Notary Public My Commission Expires: STATE OF ) ) to wit: CITY/COUNTY OF ) I HEREBY CERTIFY that on this day of , 1998, before me, the subscriber, a Notary Public of the State aforesaid, personally appeared Richard Sassi, known to me (or satisfactorily proven) to be the persons whose name is subscribed to the within instrument, and he acknowledged that he executed the foregoing instrument for the purposes therein contained. IN WITNESS WHEREOF, I have hereunto set my hand and Notarial Seal. Notary Public My Commission Expires: MUTUAL RELEASE THIS MUTUAL RELEASE ("Release") made this 3RD day of November 1998, by and between The COUNCIL OF UNIT OWNERS OF THE RESIDENCES AND INN AT HENDERSON'S WHARF, a Condominium, Incorporated (the "Council"), HENDERSON'S WHARF BALTIMORE L.P., a Delaware limited partnership ("HWLP"), CLAREMONT MANAGEMENT CORPORATION ("Claremont"), MCKENNA MANAGEMENT ASSOCIATES, INC. ("McKenna"), CREDIT SERVICE INTERNATIONAL BALTIMORE, INC. ("CSI"), TERENCE P. SULLIVAN ("Sullivan"), CHARLES M. MORAN, JR. ("Moran"), CHARLES S. INTRAVAIA ("Intravaia"), BRIAN M. KRASON ("Krason") and JOSEPH V. BRADY ("Brady") (Claremont, McKenna, Sullivan, Intravaia, Krason and Brady are sometimes collectively referred to herein as the "Third Party Defendants") and RICHARD SASSI, a Maryland resident ("Sassi"). EXPLANATORY STATEMENT The Council is the council of unit owners for the residential condominium known as The Residences and Inn at Henderson's Wharf, located at the foot of Fell Street in Fells Point, Baltimore City, Maryland (the "Condominium"). HWLP operates and manages the Condominium. Sassi is the owner of Condominium Unit No. 402 and Parking Unit No. P-61 in the Condominium (collectively, the "Unit"). The Council and HWLP filed a legal action against Sassi, known as The Council of Unit Owners of the Residences and Inn at Henderson's Wharf, A Condominium, Incorporated and Henderson's Wharf Baltimore, L.P. v. Richard Sassi, Civil Case No. 97-154-052-CC-2921, which is pending in the Circuit Court of Maryland for Baltimore City ("Lawsuit"). In the Lawsuit, the Council and HWLP assert claims against Sassi for delinquent condominium charges and assessments and nuisance (all of the Council's and HWLP's claims are hereinafter sometimes collectively referred to as the "Condominium's Claims"). Sassi filed a (i) counterclaim in the Lawsuit against the Council and HWLP, as applicable, for violations of Fair Debt Collection Practices Act, breach of contract, deceit and trespass (all of such claims being sometimes collectively referred to herein as the "Counterclaim"); and (ii) third party complaint in the Lawsuit against Claremont Management Corporation ("Claremont"), McKenna Management Associates, Inc. ("McKenna"), Credit Service International Baltimore, Inc. ("CSI"), Terence P. Sullivan ("Sullivan"), Charles M. Moran, Jr. ("Moran"), Charles S. Intravaia ("Intravaia"), Brian M. Krason ("Krason") and Joseph V. Brady ("Brady"), as applicable, for violations of Fair Debt Collection Practices Act, breach of contract, negligence, deceit and trespass (all of such claims being sometimes collectively referred to herein as the "Third Party Complaint"). Claremont, McKenna, Sullivan, Intravaia and Krason and Brady are sometimes collectively referred to herein as the "Third Party Defendants". CSI filed a cross complaint in the Lawsuit against the Council, HWLP, Claremont, McKenna, Sullivan, Moran, Intravaia, Krason and Brady for indemnification for certain matters ("Cross Claim"). The parties have agreed to compromise and settle all claims which any party has asserted or may assert in the Lawsuit, Counterclaim, Third Party Complaint or Cross Claim, or which any party has asserted or may assert in the Lawsuit, Counterclaim, Third Party Complaint or Cross Claim, or which any party may have arising out of the use or ownership or operation of the Unit, or any part thereof, pursuant to the terms of a Settlement Agreement of even date herewith between the parties ("Settlement Agreement"). NOW, THEREFORE, for and in consideration of the foregoing explanatory statements and the agreements hereinafter set forth, the sufficiency and legal adequacy of which the parties acknowledge, they do hereby agree as follows: 1 . The Council and HWLP, for themselves and for their officers, directors, employees, agents, principals and shareholders, and for all their respective successors and assigns, hereby releases and forever discharges Sassi and the Third Party Defendants, their respective heirs. personal representatives, successors, assigns, officers, directors, employees, agents, principals and shareholders, from any and all claims, actions, suits, debts, counts, covenants. contracts, damages. judgments and demands of whatsoever kind or nature ("Claims"), which the Council and/or HWLP, individually or collectively, ever had, or may now have, up to the date of this Release, pertaining in any way to the Unit (other than a misrepresentation by Sassi under the Agreement of Sale, as defined in the Settlement Agreement), including but not limited to any Claims which were raised or could have been raised in the Lawsuit. 2. Sassi, for himself and his heirs and personal representatives and assigns, hereby releases and forever discharges the Council, 14WLP and the Third Party Defendants, their respective heirs, personal representatives, successors, assigns, officers, directors, employees, agents, principals and shareholders, from any and all Claims which Sassi ever had, or may now have, up to the date of this Release, pertaining in any way to the Unit. including but not limited to any Claims which were raised or could have been raised in the Counterclaim or in the Third Party Complaint. 3. The Third Party Defendants, for themselves and for their officers, directors, employees, agents, principals and shareholders, and for their respective heirs, personal representatives, successors and assigns, hereby releases and forever discharges Sassi, the Council and HWLP, their respective heirs, personal representatives, successors, assigns, officers, directors. employees, agents, principals and shareholders, from any and all Claims which the Third Party Defendants, individually and/or collectively, ever had, or may now have, up to the date of this Release, pertaining in any way to the Unit, including but not limited to any Claims which were raised or could have been raised in the Cross Complaint. 4. This Release contains the entire agreement between the parties and is the complete written integration of that agreement. This writing is intended by the parties as a final expression of that agreement and as a complete and exclusive statement of the terms thereof, all negotiations, considerations and representations between the parties having been incorporated herein. No course or prior dealings between the parties or their officers, employees, agents or affiliates shall be relevant or admissible to supplement, explain or vary any of the terms of this Release. None of the parties to this Release has any right to rely on any prior or contemporaneous representations made by anyone concerning this Release and none of the parties has so relied. 5. Each of the parties has read this Release and fully understands it. 6. This Release may be executed in one or more counterparts, each of which shall be deemed an original and all of which when taken together shall constitute one and the same document. This Release may be delivered by facsimile transmission of an originally executed copy to be followed by immediate delivery of the original of such executed copy. IN WITNESS WHEREOF, the parties have executed this Release under seal as of the 3rd day of November, 1998. WITNESS/ATTEST: COUNCIL: THE COUNCIL OF UNIT OWNERS OF THE RESIDENCES AND INN AT HENDERSON'S WHARF, a Condominium, Incorporated By: Name: Title: HWLP: HENDERSON'S WHARF BALTIMORE L.P. BY: Henderson's Wharf Development Corporation, General Partner By: (SEAL) Name: Title: CLAREMONT: CLAREMONT MANAGEMENT CORPORATION By: (SEAL) Name: Title: MCKENNA: MCKENNA MANAGEMENT ASSOCIATES, INC. By: (SEAL) Name: Title: STATE OF ) )TO WIT: CITY/C0UNTY0F ) I HEREBY CERTIFY that on this 29th day of September, 1998, before me, the subscriber, a Notary Public of the State and City/County aforesaid, personally appeared Jeffrey F. Ault, who acknowledged himself/herself to bc the President of Credit Service International Baltimore, Inc., a corporation,and that he/she as such officer, being authorized so to do, executed the foregoing instrument for the purpose therein contained by signing in my presence the name of the corporation by himself/herself as such officer. In-Witness Whereof, I have hereunto set my hand and official seal. Notary Public My Commission expires: STATE OF ) ) to wit: CITY/COUNTY OF ) I HEREBY CEPUIFY that on thisday of 1998, before me, the subscriber, a Notary Public of the State aforesaid, personally appeared Terence P. Sullivan, known to me (or satisfactorily proven) to be the persons whose name is subscribed to the within instrument, and he acknowledges that he executed the foregoing instrument for the purposes therein contained. IN WITNESS WHERE0F, I have hereunto set my hand and Notarial Seal. Notary Public My Commission Expires; CSI: CREDIT SERVICE INTERNATIONAL BALTIMORE, INC. By: (SEAL) Name: Tit1c: SULLIVAN: (SEAL) Terence P. Sullivan MORAN: (SEAL) Charles M. Moran, Jr. INTRAVAIA: (SEAL) Charles S. Intravaia KRASOIN: (SEAL) Brian M. Krason BRADY: Joseph Brady STATE OF ) ) to wit: CITY/COUNTY OF ) I HEREBY CERTIFY that on this dav of 1998. before me, the subscriber, a Notary Public of the State aforesaid, personally appeared Brian M. Krason, known to me (or satisfactorily proven) to be the persons whose name is subscribed to the within instrument, and he acknowledged that he executed the foregoing instrument for the purposes therein contained. IN WITNESS WHEREOF, I have hereunto set my hand and Notarial Seal. Notary Public My Commission Expires: STATE OF ) ) to wit: CITY/COUNTY 0F ) I HEREBY CERTIFY that on this 30th day of .October, 1998 before me, the subscriber, a Notary Public of the State aforesaid, personally appeared Joseph V. Brady, known to me (or satisfactori1v proven) to be the persons whose name is subscribed to the within instrument, and he acknowledged that he executed the foregoing instrument for the purposes therein contained. IN WITNESS WHEREOF. I have hereunto set my hand and Notarial Seal. Notary Public My Commission Expires: SASSI: (SEAL) Richard Sassi STATE OF ) )TO WIT: CITY/COUNTY OF ) I HEREBY CERTIFY that on this _ day of 1 1998 , before me, the subscriber, a Notary Public of the State and City/County aforesaid, personally appeared , who acknowledged himself/herself to be the of The Council of Unit Owners of the Residences and Inn at Henderson's Wharf, a Condominium Incorporated, and that he/she as such officer, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing in my presence the name of the corporation by himself/herself as such officer. In Witness Whereof, I have hereunto set my hand and official seal. Notary Public My Commission expires: STATE OF TO WIT: CITY/COUNTY OF I HEREBY CERTIFY that on this - day of 1 1998, before me, the subscriber, a Notary Public of the State and City/County aforesaid. personally appeared I who acknowledged himself/herself to be the of Henderson's Wharf Development Corporation, general partner of Henderson's Wharf Baltimore, L.P.,a Delaware limited partnership, and that he/she as such officer. being authorized so to do, executed the foregoing instrument for the purposes therein contained. by signing in my presence the name of the corporation by himself/herself as such officer. In Witness Whereof, I have hereunto set my hand and official seal. Notary Public My Commission expires: STATE OF ) )to wit: CITY/COUNTY OF ) I HEREBY CERTIFY that on this 3rd , of November , 1998, before me, the subscriber, a Notary Public of the State aforesaid, personally appeared Richard Sassi, known to me (or satisfactorily proven) to be the persons whose name is subscribed to the within instrument, and he acknowledged that he executed the foregoing instrument for the purposes therein contained. IN WITNESS WHEREOF, I have hereunto set my hand and Notarial Seal. Notarv Public My Commission Expires: AGREEMENT OF SALE AND PURCHASE THIS AGREEMENT OF SALE AND PURCHASE (this "Agreement") is made on this 3rd day of November, 1998 (the "Effective Date"), by and between RICHARD SASSI a Maryland resident ("Seller") and HENDERSON'S WHARF BALTIMORE L.P., a Delaware limited partnership ("Buyer"). Background Seller is the owner of Condominium Unit No. 402 (the "Unit") in The Residences and Inn at Henderson's Wharf, a Condominium (the "Condominium"), together with all appurtenances and advantages thereunto pertaining, and Parking Unit No. P-61 and an undivided percentage interest in the common elements, common expenses and common profits in the condominium regime, and together with all appliances, fixtures, equipment and personally located in the Unit (collectively, the "Property"). Seller desires to sell and convey to Buyer, and Buyer desires to purchase from Seller, the Property upon the terms and conditions set forth in this Agreement. Agreement NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Buyer agree as follows: 1. SALE AND PURCHASE. Subject to the terms and conditions set forth in this Agreement, Seller hereby agrees to sell to Buyer, and Buyer hereby agrees to purchase from Seller, the Property. 2. PURCHASE PRICE AND PAYMENT. The purchase price to be paid by Buyer to Seller for the Property (the "Purchase Price") shall be the sum of One Hundred Ten Thousand Dollars ($110,000.00). The Purchase Price shall be paid at Closing (as hereinafter defined) by bank, cashier's, certified or title company check or by bank wire. 3. POSSESSION; RISK OF LOSS. (a) At Closing, Seller shall deliver to Buyer possession of the Property, in broom clean condition, free of any and all tenancies. (b) Until Closing, the Seller shall bear the risk of any damage to or destruction of the Property. From and after the date hereof and until Closing, the Seller shall, at its expense, (a) keep the Property insured against fire and such other insurable casualties as are commonly insured against by an all-risk casualty insurance policy, to its full insurable value, and (b) cause each such policy to be endorsed to name the Buyer (in its capacity as contract purchaser hereunder) as an additional insured thereunder as its interest may appear. 4. TITLE. Fee simple title in and to the Property shall be marketable, insurable at standard rates on an ALTA Form B policy of owner's title insurance, and free and clear of all liens, encumbrances, leases, easements, covenants, conditions and restrictions, except for those matters shown on the title report attached hereto as Exhibit A and incorporated herein by reference (collectively, the "Permitted Property Exceptions"). From and after the Effective Date Seller shall not do or cause to be done anything which will affect the status of title of the Property. Notwithstanding anything to the contrary, Seller shall discharge any lien or encumbrance which is capable of being discharged by the payment of money, including any deed of trust or mortgage. 5. SELLER'S REPRESENTATIONS AND WARRANTIES. Seller makes the following representations and warranties to Buyer, each of which shall be true and correct on the Effective Date and on the Closing Date (as hereinafter defined) and shall survive the Closing: (a) The execution and delivery of this Agreement by Seller., and the performance by Seller of all terms and conditions contained herein, do not violate the terms of, are not in conflict with, and will not result in the breach of or default under (1) any agreement, commitment, obligation, contract or instrument under which Seller or the Property is bound or affected or (ii) any law, rule, regulation or court order by which the Property or Seller is affected. (b) As of the Effective Date, all taxes, assessments, fees or other charges (other than condominium fees) affecting or pertaining to the Unit have been paid in full. (c) There are no leases or tenancies with respect to the Property or any part thereof and there have not been any for the preceding six months. The Property has never been a single family residential rental dwelling as such term is defined in Article 13, Sections 46-55 of the Baltimore City Code (1976 Edition, as amended). Seller will not lease the Unit prior to Closing. 6. CONDITIONS PRECEDENT TO CLOSING. The obligation of Buyer to purchase the Property pursuant to this Agreement shall be expressly conditioned upon and subject to the satisfaction (or written waiver by Buyer) of each of the following conditions: (i) Each of the representations and warranties of Seller contained in Section 5 shall be true as of the Closing Date, and (ii) Seller shall not be in default of any of its obligations under this Agreement. If any one or more of such conditions precedent are not satisfied (or the satisfaction thereof is not waived in writing by Buyer) as of the Closing Date, then Buyer shall have the right, at its option, to terminate this Agreement by written notice thereof to Seller, and thereafter neither party shall have any further liability or obligation hereunder. 7. CLOSING; CLOSING COSTS; ADJUSTMENTS. (a) The consummation of the transactions contemplated by this Agreement (the "Closing") shall take place at the offices of Neuberger, Quinn, Gielen, Rubin & Gibber, P.A., 27th Floor, One South Street, Baltimore, Maryland 21202, or at such other location in Baltimore City designated by Buyer, within sixty (60) days from the date of this Agreement upon not less than five (5) days prior notice from Buyer to Seller, at a time designated by Buyer ("Closing Date"). If the Closing Date as provided herein falls on a Saturday, Sunday or legal holiday, then the Closing Date shall be extended to the next day which is a business day. (b) Buyer shall pay all recording costs and any costs charged by the council of unit owners of the Condominium in connection with such conveyance. (c) All fees (other than condominium fees), all taxes, general or special. and all other public and governmental charges or assessments against the Property which are or may be payable on an annual or semi-annual basis (including metropolitan and other benefit charges, assessments, liens or encumbrances) shall be adjusted and apportioned as of the Closing and are to be assumed and paid thereafter by Buyer. whether or not the assessments have been levied as of the Closing. (d) All outstanding condominium fees assessed against the Property up through the date of Closing shall be paid by Buyer at Closing. (e) All water and sewer bills for the Property shall be adjusted as of the Closing based on prior bills and all gas and/or electric bills shall be adjusted as of the Closing based on meter reading or prior bills. 8. RECORDATION AND TRANSFER TAXES, OTHER COSTS. (a) SECTION 14-104 OF THE REAL PROPERTY ARTICLE OF THE ANNOTATED CODE OF MARYLAND PROVIDES THAT, UNLESS OTHERWISE NEGOTIATED IN THE CONTRACT OR PROVIDED BY STATE OR LOCAL LAW, THE COST OF ANY RECORDATION TAX OR STATE OR LOCAL TRANSFER TAX SHALL BE SHARED EQUALLY BY BUYER AND SELLER. This statement is provided for informational purposes only. Except as provided in subsection (b) below, Buyer shall pay the total cost of all documentary stamps, recordation taxes and transfer taxes imposed upon the transfer of the Property. (b) This subsection applies if Buyer is a first-time Maryland home buyer who will reside in the Property. If there are two or more Buyers, then each Buyer must be someone who is a first-time Maryland home buyer, or someone who will not occupy the house as a principal residence and who is a co-maker or guarantor of a purchase money deed of trust or mortgage for the benefit of the first-time Maryland home buyer. A "first-time Maryland home buyer" means an individual who has never owned in the State of Maryland residential real property that has been his or her principal residence. Section 14-104 of the Real Property Article of the Annotated Code of Maryland provides that: (i) Buyer's portion of the State transfer tax is waived; (ii) State transfer tax will be reduced to 0.25% of the sales price of the property; (iii) the entire amount of the State transfer tax shall be paid by Seller; and (iv) the entire amount of recordation tax and local transfer tax shall be paid by Seller unless there is an express agreement between Buyer and Seller that the recordation tax and local transfer tax will not be paid entirely by Seller. In this Agreement, the parties agree that the costs of transfer tax and recordation tax shall be paid by Buyer. check if first-time Maryland Home Buyer. 9. DEFAULT. (a) If Buyer shall have fully performed its obligations hereunder and Seller breaches this Agreement or otherwise fails to perform or observe any of the covenants or obligations to be performed or observed by Seller hereunder, or if any of Seller's representations or warranties hereunder is incorrect or untrue as of the Closing Date, Buyer shall have the right to (i) enforce Buyer's right of specific performance, (ii) bring suit for all damages suffered by reason of Seller's action or inaction, and/or (iii) enforce any and all other remedies available to Buyer at law or in equity. (b) If Seller shall have fully performed its obligations hereunder and Buyer breaches this Agreement or otherwise fails to perform or observe any of the covenants or obligations to be performed or observed by Buyer hereunder, Seller shall have the right to (i) enforce Seller's right of specific performance, (ii) bring suit for all damages suffered by reason of Buyer's action or inaction, and/or (iii) enforce any and all other remedies available to Seller at law or in equity. (c) In the event of litigation, the prevailing party shall be entitled to reasonable attorneys' fees and costs of litigation. 10. CLOSING DOCUMENTS. (a) At Closing, upon payment of the Purchase Price, Seller shall execute and deliver to the closing officer or title company representative a special warranty deed, with covenants of further assurances, in the form attached hereto as Exhibit B and incorporated herein by reference, conveying fee simple title to the Property to Buyer free and clear of all liens, encumbrances, leases, easements, covenants, conditions, restrictions and other title exceptions other than the Permitted Property Exceptions. (b) On the Closing Date, Buyer shall execute, acknowledge and deliver all additional documents that may reasonably be necessary or appropriate to carry out the provisions hereof. 11. OPERATIONS PENDING CLOSING. From and after the dates listed below, the parties shall perform as follows: (a) From and after the Effective Date, Seller shall promptly furnish to Buyer copies of any and all notices or communications that Seller receives from (i) any governmental or quasi -governmental entities, or any other body having jurisdiction with respect to the use and occupancy or physical condition of the Property, and/or (ii) any other notice or communication relating to the Property. (b) From and after the Effective Date, Seller shall promptly furnish to Buyer written notice of any event or condition that causes or may tend to cause a change in the facts relating to, or the accuracy, completeness or truth of, any of the representations, warranties, covenants, or any of the information provided herein. (c) From and after the Effective Date, neither Seller nor Seller's agents, affiliates or employees shall sell, offer for sale., pen-nit the use of, negotiate with respect to, or otherwise deal in the sale, lease or other transfer of the Property or any interest therein. 12. BROKERAGE. Each party represents and warrants to the other that it has dealt with no agent, broker or finder in connection with this Agreement, and each party shall indemnify, defend and save harmless the other from and against any loss, cost, damage or expense (including reasonable attorneys' fees) arising from a breach of such representation or warranty. 13. 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 Seller: Henderson's Wharf Baltimore L.P. c/o Gunn Financial, Inc. 45 Broad Street Boston, MA 02109 ATTN: Charles Intravaia Telecopy No. (617) 338-6164 With a copy to: Richard Rubin, Esquire Neuberger, Quinn, Gielen,Rubin & Gibber, P.A. Commerce Place, 27th Floor One South Street Baltimore, Maryland 21202-3201 Telecopy No. (410) 332-8594 If to Buyer: Richard Sassi 10 East Lee Street Unit 1509 Baltimore, Maryland 21202 Telecopy No. (410)342-3155. With a copy to Bruce D. Brown, Esquire Siskind, Grady, Rosen & Hoover, P.A. Jefferson Building Two East Fayette Street Baltimore, Maryland 21202 Telecopy No. (410) 332-0269 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 U.S. Post Office. 14. RESALE NOTICE. SELLER IS REQUIRED BY LAW TO FURNISH TO BUYER NOT LATER THAN FIFTEEN (15) DAYS PRIOR TO THE CLOSING CERTAIN INFORMATION CONCERNING THE CONDOMINIUM WHICH IS DESCRIBED IN ss.11-135 OF THE MARYLAND CONDOMINIUM ACT. THIS INFORMATION MUST INCLUDE AT LEAST THE FOLLOWING: (I) A COPY OF THE DECLARATION (OTHER THAN THE PLATS); (II) A COPY OF THE BYLAWS; (III) A COPY OF THE RULES AND REGULATIONS OF THE CONDOMINIUM; (IV) A CERTIFICATE CONTAINING: (1) A STATEMENT DISCLOSING THE EFFECT ON THE PROPOSED CONVEYANCE OF ANY RIGHT OF FIRST REFUSAL OR OTHER RESTRAINT ON THE FREE ALIENABILITY OF THE UNIT, OTHER THAN ANY RESTRAINT CREATED BY THE UNIT OWNER; (2) A STATEMENT OF THE AMOUNT OF THE MONTHLY COMMON EXPENSE ASSESSMENT AND ANY UNPAID COMMON EXPENSE OR SPECIAL ASSESSMENT CURRENTLY DUE AND PAYABLE FROM THE SELLING UNIT OWNER; (3) A STATEMENT OF ANY OTHER FEES PAYABLE BY THE UNIT OWNERS TO THE COUNCIL OF UNIT OWNERS; (4) A STATEMENT OF ANY CAPITAL EXPENDITURES APPROVED BY THE COUNCIL OF UNIT OWNERS OR ITS AUTHORIZED DESIGNEE PLANNED AT THE TIME OF THE CONVEYANCE WHICH ARE NOT REFLECTED IN THE CURRENT OPERATING BUDGET INCLUDED IN THE CERTIFICATE; (5) THE MOST RECENTLY PREPARED BALANCE SHEET AND INCOME AND EXPENSE STATEMENT, IF ANY, OF THE CONDOMINIUM; (6) THE CURRENT OPERATING BUDGET OF THE CONDOMINIUM, INCLUDING DETAILS CONCERNING THE AMOUNT OF THE RESERVE FUND FOR REPAIR AND REPLACEMENT OF ITS INTENDED USE, OR A STATEMENT THAT THERE IS NO RESERVE FUND; (7) A STATEMENT OF ANY JUDGMENTS AGAINST THE CONDOMINIUM AND THE EXISTENCE OF ANY PENDING SUITS TO WHICH THE COUNCIL OF UNIT OWNERS IS A PARTY; (8) A STATEMENT GENERALLY DESCRIBING ANY INSURANCE POLICIES PROVIDED FOR THE BENEFIT OF THE UNIT OWNERS, A NOTICE THAT THE POLICIES ARE AVAILABLE FOR INSPECTION STATING THE LOCATION AT WHICH THEY ARE AVAILABLE, AND A NOTICE THAT THE TERMS OF THE POLICY PREVAIL OVER THE GENERAL DESCRIPTION; (9) A STATEMENT AS TO WHETHER THE COUNCIL OF UNIT OWNERS HAS KNOWLEDGE THAT ANY ALTERATION OR IMPROVEMENT TO THE UNIT OR TO THE LIMITED COMMON ELEMENTS ASSIGNED TO THE UNIT VIOLATES ANY PROVISION OF THE DECLARATION, BYLAWS, OR RULES OR REGULATIONS; (10) A STATEMENT AS TO WHETHER THE COUNCIL OF UNIT OWNERS HAS KNOWLEDGE OF ANY VIOLATION OF THE HEALTH OR BUILDING CODES WITH RESPECT TO THE UNIT, THE LIMITED COMMON ELEMENTS ASSIGNED TO THE UNIT, OR ANY OTHER PORTION OF THE CONDOMINIUM; (11) A STATEMENT OF THE REMAINING TERM OF ANY LEASEHOLD ESTATE AFFECTING THE CONDOMINIUM AND THE PROVISIONS GOVERNING ANY EXTENSION OR RENEWAL OF IT; AND (12) A DESCRIPTION OF ANY RECREATIONAL OR OTHER FACILITIES WHICH ARE TO BF USED BY THE UNIT OWNERS OR MAINTAINED BY THEM OR THE COUNCIL OF UNIT OWNERS, AND A STATEMENT AS TO WHETHER OR NOT THEY ARE TO BE A PART OF THE COMMON ELEMENTS; AND (V) A STATEMENT BY THE UNIT OWNER AS TO WHETHER THF UNIT OWNER HAS KNOWLEDGE: (1) THAT ANY ALTERATION TO THE UNIT OR TO THE LIMITED COMMON ELEMENTS ASSIGNED TO THE UNIT VIOLATES ANY PROVISION OF THE DECLARATION, BYLAWS, OR RULES AND REGULATIONS; (2) OF ANY VIOLATION OF THE HEALTH OR BUILDING CODES WITH RESPECT TO THE UNIT OR THE LIMITED COMMON ELEMENTS ASSIGNED TO THE UNIT; AND (3) THAT THE UNIT IS SUBJECT TO AN EXTENDED LEASE UNDER ss.11-137 OF THE MARYLAND CONDOMINIUM ACT OR UNDER LOCAL LAW, AND IF SO, A COPY OF THE LEASE MUST BE PROVIDED. BUYER WILL HAVE THE RIGHT TO CANCEL THIS AGREEMENT WITHOUT PENALTY, AT ANY TIME WITHIN SEVEN (7) DAYS FOLLOWING DELIVERY TO BUYER OF ALL OF THIS INFORMATION. HOWEVER, AFTER THE CLOSING, BUYER'S RIGHT TO CANCEL THIS AGREEMENT IS TERMINATED. 15. DISCLOSURE/DISCLAIMER STATEMENT. Attached hereto as Exhibit C and incorporated herein by reference is a notice to Buyer advising Buyer of Buyer's rights under ss. 10-702 of the Real Property Article of the Annotated Code of Maryland. Buyer acknowledges receipt of, and has executed, a copy of such notice. Pursuant to the provisions of ss.10-702 of the Real Property Article of the Annotated Code of Maryland, Seller has delivered to Buyer the written residential property disclaimer statement on the form attached hereto as Exhibit D and incorporated herein by reference. 16. CERTIFICATE OF NON-FOREIGN STATUS. At Closing, Seller shall provide Buyer with either (i) an certificate of non-foreign status in substantially the form attached hereto as Exhibit E, stating that Seller is not a foreign person (as that term is defined in Section 1445 of the Internal Revenue Code) and providing Seller's tax identification number; or (ii) a "Qualifying Statement" as such term is defined by Section 1445 of the Internal Revenue Code. 17. MISCELLANEOUS PROVISIONS. (a) This Agreement contains the sole, final and entire agreement between the parties and is intended to be an integration of all prior and contemporaneous agreements, conditions and undertakings between the parties. There are no promises, agreements, conditions, undertakings, warranties or representations, oral or written, express or implied, between the parties other than as herein set forth. (b) This Agreement may be amended by and only by an instrument executed and delivered by Seller and Buyer. (c) This Agreement and all of the provisions hereof shall be binding upon and shall inure to the benefit of the parties and their respective heirs, devisees, legatees, legal representatives, successors and assigns. (d) This Agreement hall be governed by and construed in accordance with the laws of the State of Maryland. (e) All provisions hereof shall survive the Closing Date, unless otherwise provided herein. (f) Each of the parties agrees to execute and deliver upon reasonable demand of the other any document or instrument that such other party reasonably deems necessary or desirable to evidence or accomplish the rights herein conferred or to implement or consummate the purposes and intent hereof. (g) Time is of the essence. (h) No determination by any court, governmental or administrative entity or otherwise that any provision of this Agreement or any amendment hereof is invalid or unenforceable in any instance shall affect the validity or enforceability of (a) any other such provision, or (b) such provision in any circumstance not controlled by such determination. Each such provision shall be valid and enforceable to the fullest extent allowed by, and shall be construed wherever possible as being consistent with, applicable law. (i) This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which when taken together shall constitute one and the same document. This Agreement may be delivered by facsimile transmission of an originally executed copy to be followed by immediate delivery of the original of such executed copy. (j) The following exhibits are attached to, and made a part of, this Agreement: A - Permitted Property Exceptions B - Form of Deed C - Notice to Buyer - Property Disclosure D - Property Disclaimer Statement E - Certificate of Non-Foreign Status IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement under seal on the date first above written. WITNESS/ATTEST: SELLER: (SEAL) Richard Sassi WITNESS: BUYER: HENDERSON'S WHARF BALTIMORE L.P. By: Henderson's Wharf Development Corporation, General Partner By: (SEAL) Name: Title: EXHIBIT A TO AGREEMENT OF SALE AND PURCHASE PERMITTED PROPERTY EXCEPTIONS SCHEDULE B EXCEPTIONS FROM COVERAGE Policy No. File No.1980348 1 . Taxes payable On an annual basis have been paid through the fiscal year ending June 30, 1999, and other public charges (including assessments by any County, Municipality, Metropolitan District or Commission) payable on an annual basis have been paid through the year ending December 31, 1998. This policy does not insure against the balance of any public charges including assessments by any County, Municipality, Metropolitan District or Commission)payable on an annual basis subsequent to the year ending December 31, 1998. Nor does this policy insure against possible future tax levies, nor against possible public charges as defined above that have not been levied or assessed, which future taxes, charges and assessments are not now due and payable. 3. Declaration of The Residences and Inn at Henderson's Wharf, a condominium, by Carley Capital Group dated August 30, 1988 and recorded among the Land Records of BaltimoreCity in Liber SEB no. 1821, folio 20, as amended by the following: a) Amendment to Declaration dated April 3, 1989 and recorded among the aforesaid Land Records in Liber SEB No. 2081, folio 329; b) Second Amendment to Declaration dated July 31, 1990 and recorded among the aforesaid Land Records in Liber SEB No. 2563, folio 230; and c) Third Amendment to Declaration dated December 14, 1992 and recorded among the aforesaid Land Records in Liber SEB No. 3578, folio 030. 4. Amended and Restated Henderson's Wharf Disposition Agreement dated October 10, 1984 and recorded among the Land Records of Baltimore City in Liber SEB No. 335, folio 062, as amended by First Amendment to Amended and Restated Henderson's Wharf Disposition agreement dated July 31, 1990 and recorded among he aforesaid Land Records in Liber SEB No. 2563, folio 264. CONTINUATION OF SCHEDULE B PART I File No. 1951576 5. Building Perimeter Easement and Connecting Easement established by Pedestrian Promenade Easement Agreement dated October 19, 1984 and recorded among the Land Records of Baltimore City in Liber SEB no. 335, folio 204, by and between Carley Capital Group and Mayor and City Council of Baltimore, as amended by the following: a) Amendment of Pedestrian Promenade Easement Agreement dated April 6, 1987 and recorded among the aforesaid Land Records in Liber SEB No. 1308, folio 589; and b) Second Amendment t o Pedestrian Promenade Easement Agreement dated July 31, 1990 and recorded among the aforesaid Land Records in Liber SEB No. 2563, folio 241; 6. Easement to the benefit of the Marina Owner over the Building Perimeter Easement and Commercial Courtyard Area, as established by Reciprocal Easement Agreement dated August 31, 1988 and recorded among the Land Records of Baltimore City in Liber SEB No. 1824, folio 162, by and between Carley Capital Group and The Council of Unit Owners of The Residences and Inn at Henderson's Wharf, a Condominium, Incorporated, as amended by: (a) Amended to Reciprocal Easement Agreement dated July 31, 1990 and recorded among the aforesaid Land Records in Liber SEB No. 2822, folio 477; and (b) Second Amendment to Reciprocal Easement Agreement dated February 27, 1996 and recorded among the aforesaid Land Records in Liber SEB 5395, folio 91. 7. Terms, conditions, easements, restrictions and other criteria as shown on the Plats entitled "The Residences at Henderson's Wharf, a Condominium", as follows: (a) Sheets 1 of 11 through 11 of 11 dated August, 1988 and recorded as Condominium Plat SEB No. 232; and (b) Sheets 1 of 11 through 11 of 11 dated September, 1988 and revised December 14, 1992 and recorded as Condominium Plat SEB No. 298. EXHIBIT B TO AGREEMENT OF SALE AND PURCHASE DEED DEED THIS DEED ("Deed") is made on this day of 1 1998, from RICHARD SASSI ("Grantor") to HENDERSON'S WHARF BALTIMORE L.P., a Delaware limited partnership ("Grantee"). The Grantor for a consideration of One Hundred Ten Thousand Dollars ($110,000.00) grants, conveys and assigns to the Grantee, its successors and assigns, in fee simple, the real property located in Baltimore City, Maryland, and described as follows: Condominium Unit No. 402 ("Unit") and Parking Unit No. P-61 ("Parking Unit") in THE RESIDENCES AND INN AT HENDERSON'S WHARF, A CONDOMINIUM ("Condominium"), a condominium established under the provisions of Title I I of the Real Property Article of the Annotated Code of Maryland (1988 Replacement Volume as amended) by the operation and effect of a Declaration dated August 30, 1988, and recorded among the Land Records of Baltimore City (the "Land Records") at Liber S.E.B. No. 1821, page 20, et. seq., made by Carley Capital Group (hereinafter together wit', any amendments thereto, referred to as the "Declaration"), all as the Unit, the Parking Unit and the Condominium are defined in the Declaration and are shown on those certain plats entitled "Condominium Plat, The Residences and Ian at Henderson's Wharf, a Condominium," dated August, 1988, and recorded among the Plat Records of Baltimore City at Condominium Plat Record Book S.E.B. No. 232, Sheets I through 11. as amended (all of which plats, together with any supplements thereto, are hereinafter referred to collectively as the "Condominium Plats"). The improvements thereon being known as 1000 Fell Street, Unit No. 402, along with Parking Unit No. P-61 are hereinafter referred to as the "Property"; and Being the same property described in a Deed from Carley Capital Group to Grantor dated September 6, 1988 and recorded among the Land Records in Liber 1856, folio 239. TOGETHER WITH all improvements contained in the Property, and all appurtenances and advantages thereunto pertaining, including an undivided percentage interest in the common elements, common expenses and common profits in the condominium regime as set forth in the Declaration, the Bylaws and the Condominium Plats. TO HAVE AND TO HOLD the property hereby conveyed to Grantee, its successors and assigns, in fee simple, forever. The Grantor hereby covenants that it has not done or suffered to be done any act. matter or thing whatsoever to encumber the property hereby conveyed-, that it will warrant specially the property hereby; and that it will execute such further assurances of the same as may be requisite. IN WITNESS WHEREOF, the Grantor has executed this Deed under seal on the date first above written. WITNESS: GRANTOR: (SEAL) Richard Sassi STATE OF MARYLAND ) ) to wit: COUNTY OF ) I HEREBY CERTIFY that on this day of -1 1998, before me. the subscriber, a Notary Public of the State of Maryland, personally appeared RICHARD SASSI. known to me (or satisfactorily proven) to be the person whose name is subscribed to the within instrument, and he acknowledged that he executed the foregoing instrument for the purposes therein contained. IN WITNESS WHEREOF, I have hereunto set my hand and Notarial Seal. Notary Public My Commission Expires: CERTIFICATE THE UNDERSIGNED, AN ATTORNEY ADMITTED TO PRACTICE BEFORE THE COURT OF APPEALS OF MARYLAND, HEREBY CERTIFIES THAT THE ABOVE INSTRUMENT WAS PREPARED BY ME OR UNDER MY SUPERVISION. Susan M. Wilkins, Attorney MR./MS. CLERK: AFTER THIS DEED OF EXCHANGE HAS BEEN RECORDED, PLEASE RETURN TO: Susan M. Wilkins, Esq. Neuberger, Quinn, Gielen, Rubin & Gibber, P.A. Commerce Place, 27th Floor One South Street Baltimore, Maryland 21202-3201 EXHIBIT C TO AGREEMENT OF SALE AND PURCHASE NOTICE TO BUYER-PROPERTY DISCLOSURE NOTICE TO BUYER OF BUYER'S RIGHT UNDER MARYLAND'S PROPERTY DISCLOSURE LAW NOTE: This Notice does not apply to: (1) The initial sale of single family residential real property; (2) a transfer that is exempt from the transfer tax under ss. 13-207 of the Tax-Property Article, except land installment contracts of sale under ss. 13 -207(l 1) of the Tax-Property Article and options to purchase real property under ss. 13 -207(12) of the Tax-Property Article; (3) a sale by a lender acquiring the real property by foreclosure or deed in lieu of foreclosure; (4) a sheriffs sale, tax sale, or sale by foreclosure, partition or by court appointed trustee; (5) a transfer by a fiduciary in the course of the administration of a decedent's estate, guardianship, conservatorship, or trust; or (6) a transfer of single family residential real property to be converted by the buyer into a use other than residential use or to be demolished. SECTION 10-702 OF THE REAL PROPERTY ARTICLE OF THE ANNOTATED CODE OF MARYLAND ("SECTION 10-702") REQUIRES THAT SELLERS OF SINGLE FAMILY RESIDENTIAL PROPERTY PROVIDE YOU, THE BUYER, ON OR BEFORE ENTERING INTO A CONTRACT OF SALE, EITHER: (A) A WRITTEN PROPERTY CONDITION DISCLOSURE STATEMENT LISTING ALL DEFECTS OR INFORMATION OF WHICH THE SELLER HAS ACTUAL KNOWLEDGE IN RELATION TO THE FOLLOWING: (I) WATER AND SEWER SYSTEMS, INCLUDING THE SOURCE OF HOUSEHOLD WATER, WATER TREATMENT SYSTEMS, AND SPRINKLER SYSTEMS; (II) INSULATION; (III) STRUCTURAL SYSTEMS, INCLUDING THE ROOF. WALLS. FLOORS, FOUNDATION, AND ANY BASEMENT; (IV) PLUMBING, ELECTRICAL. HEATING, AND AIR CONDITIONING SYSTEMS; (V) INFESTATION OF WOOD-DESTROYING INSECTS; (VI) LAND USE MATTERS; (VII) HAZARDOUS OR REGULATED MATERIALS, INCLUDING ASBESTOS, LEAD-BASED PAINT, RADON, UNDERGROUND STORAGE TANKS, AND LICENSED LANDFILLS; AND (VIII) ANY OTHER MATERIAL DEFECTS KNOWN TO THE SELLER;OR (B) A WRITTEN DISCLAIMER STATEMENT PROVIDING THAT: (I) THE SELLER MAKES NO REPRESENTATIONS OR WARRANTIES AS TO THE CONDITION OF THE REAL PROPERTY OR ANY IMPROVEMENTS ON THE REAL PROPERTY; AND (II) THE BUYER WILL BE RECEIVING THE REAL PROPERTY "AS IS", WITH ALL DEFECTS THAT MAY EXIST, EXCEPT AS OTHERWISE PROVIDED IN THE CONTRACT OF SALE. AT THE TIME THE DISCLOSURE OR DISCLAIMER STATEMENT IS DELIVERED TO YOU, YOU ARE REQUIRED TO DATE AND SIGN A WRITTEN ACKNOWLEDGEMENT OF RECEIPT, WHICH SHALL BE INCLUDED IN OR ATTACHED TO THE CONTRACT OF SALE. YOU ARE HEREBY NOTIFIED THAT, IN CERTAIN CIRCUMSTANCES. YOU HAVE THE RIGHT TO RESCIND YOUR CONTRACT OF SALE WITH THE SELLER IF THE SELLER FAILS TO DELIVER TO YOU THE WRITTEN PROPERTY CONDITION DISCLOSURE STATEMENT. SECTION 10-702 PROVIDES THAT A BUYER WHO DOES NOT RECEIVE THE DISCLOSURE STATEMENT ON OR BEFORE ENTERING INTO THE CONTRACT OF SALE HAS THE UNCONDITIONAL RIGHT, UPON WRITTEN NOTICE TO THE SELLER OR SELLER'S AGENT: (I) TO RESCIND THE CONTRACT OF SALE AT ANY TIME BEFORE THE RECEIPT OF THE DISCLOSURE STATEMENT OR WITHIN 5 DAYS FOLLOWING RECEIPT OF THE DISCLOSURE STATEMENT; AND (II) TO THE IMMEDIATE RETURN OF ANY DEPOSITS MADE ON ACCOUNT OF THE CONTRACT. IF THE DISCLOSURE STATEMENT IS DELIVERED TO YOU LATER THAN 3) DAYS AFTER THE SELLER ENTERS INTO A CONTRACT OF SALE WITH YOU. THE CONTRACT IS VOID. YOUR RIGHT TO RESCIND THE CONTRACT OF SALE UNDER SECTION 10-702 TERMINATES IF NOT EXERCISED BEFORE MAKING A WRITTEN APPLICATION TO A LENDER FOR A MORTGAGE LOAN, IF THE LENDER DISCLOSES IN WRITING AT OR BEFORE THE TIME APPLICATION IS MADE THAT THE RIGHT TO RESCIND TERMINATES ON SUBMISSION OF THE APPLICATION. YOUR RIGHTS AS A BUYER UNDER SECTION 10-702 MAY NOT BE WAIVED IN THE CONTRACT OF SALE AND ANY ATTEMPTED WAIVER IS VOID. YOUR RIGHTS AS THE BUYER TO TERMINATE THE CONTRACT UNDER SECTION 10-702 ARE WAIVED CONCLUSIVELY IF NOT EXERCISED BEFORE: (I) CLOSING OR OCCUPANCY BY YOU, WHICHEVER OCCURS FIRST, IN THE EVENT OF A SALE; OR (II) OCCUPANCY, IN THE EVENT OF A LEASE WITH OPTION TO PURCHASE. THE INFORMATION CONTAINED IN THE PROPERTY CONDITION DISCLOSURE STATEMENT IS THE REPRESENTATION OF THE SELLER AND NOT THE REPRESENTATION OF THE REAL ESTATE BROKER OR SALESPERSON, IF ANY. THE SELLER IS NOT REQUIRED TO UNDERTAKE OR PROVIDE AN INDEPENDENT INVESTIGATION OR INSPECTION OF THE PROPERTY IN ORDER TO MAKE THE DISCLOSURES REQUIRED BY SECTION 10-702. THE SELLER IS NOT LIABLE FOR AN ERROR, INACCURACY OR OMISSION IN THE DISCLOSURE STATEMENT IF THE ERROR, INACCURACY, OR OMISSION WAS BASED UPON INFORMATION THAT WAS NOT WITHIN THE ACTUAL KNOWLEDGE OF THE SELLER. OR WAS PROVIDED TO THE SELLER BY A THIRD PARTY. YOU HAVE THE RIGHT TO OBTAIN PROFESSIONAL ADVICE ABOUT THE PROPERTY OR OBTAIN AN INSPECTION OF THE PROPERTY. THE UNDERSIGNED BUYER(S) ACKNOWLEDGES RECEIPT OF THIS NOTICE ON THE DATE INDICATED BELOW. WITNESS: HENDERSON'S WHARF BALTIMORE L.P. By: Henderson's Wharf Development Corp General Partner By: Name: Title: Date: EXHIBIT D TO AGREEMENT OF SALE AND PURCHASE PROPERTY DISCLAIMER STATEMENT MARYLAND RESIDENTIAL PROPERTY DISCLAIMER STATEMENT NOTICE TO SELLER AND BUYER Section ss. 10-702 of the Real Property Article, Annotated Code of Maryland, requires the owner of certain residential real property to furnish to the BUYER either (a) a RESIDENTIAL PROPERTY DISCLAIMER STATEMENT stating that the owner is selling the property "as is" and makes no representations or warranties as to the condition of the property or any improvements on the real property, except as otherwise provided in the contract of sale, or (b) a RESIDENTIAL PROPERTY DISCLOSURE STATEMENT disclosing defects or other information about the condition of the real property actually known by the owner. Certain transfers of residential property are excluded from this requirement (see the exemptions listed below). MARYLAND RESIDENTIAL PROPERTY DISCLAIMER STATEMENT NOTICE TO OWNER(S): Sign this statement only if you elect to sell the property without representations and warranties as to its condition', except as otherwise provided in the contract of sale; otherwise, complete and sign the RESIDENTIAL PROPERTY DISCLOSURE STATFMENT. Property Address:1000 Fell Street, Condominium Unit No. 402, along with Parking Unit No. P-6 1. Legal Description: Condominium Unit No. 402 and Parking Unit No. P-61 in THE RESIDENCES AND INN AT HENDERSON'S WHARF, A CONDOMINIUM, as established pursuant to a Declaration dated August 30, 1988, and recorded among the Land Records of Baltimore City (the "Land Records") at Liber S.E.B. No. 1821, page 20, as amended by Amendment to Declaration dated April 3, 1989 and recorded among the Land Records at Liber S.E.B. No. 2081, folio 329, and as further amended by Second Amendment to Declaration dated July 31, 1990, and recorded among the Land Records at Liber S.E.B. No. 2563, folio 230, and as further amended by Third Amendment to Declaration dated as of December 14, 1992, and recorded among the Land Records at Liber S.E.B. No. 3578, folio 30 (as amended, the "Declaration"). and the Bylaws attached thereto (the "Bylaws"), and as shown on those certain plats entitled "Condominium Plat, The Residences and Inn at Henderson's Wharf, a Condominium," dated August, 1988, and recorded among the Plat Records of Baltimore City at Condominium Plat Record Book S.E.B. No. 232, Sheets I through 11, as amended by condominium plats dated December 14, 1992, and recorded among the Plat Records of Baltimore City at Condominium Plat Record Book S.E.B. 298, Sheets I through I I (as amended, the "Condominium Plats"). The undersigned owner(s) of the real property described above make no representations or warranties as to the condition of the real property or any improvements thereon, and the BUYER will be receiving the real property "as is", with all defects which may exist, except as otherwise provided in the real estate contract of sale. The owner(s) acknowledge having carefully examined this statement and further acknowledge that they have been informed of their rights and obligations under Section ss. 10-702 of the Maryland Real Property Article. SELLER: (SEAL) Richard Sassi Date: The BUYER(s) acknowledge receipt of a copy of this disclaimer statement and further acknowledge that he has been informed of his rights and obligations under Section ss. 10-702 of the Maryland Real Property Article. BUYER: HENDERSON'S WHARF BALTIMORE L.P. By: Henderson's Wharf Development Corporation, General Partner Date: By: Name: Title: MARYLAND RESIDENTIAL FROPERTY DISCLOSURE ACT 10-702. Exemptions. - The following are specifically excluded from the provisions of Section 10-702: 1. The initial sale of single family Residential Real Property; 2. A transfer that is exempt from the transfer tax under ss. 13 -207 of the Tax-Property Article, except land installment contracts of sale under ss.13-207(11) of the Tax-Property Article except hand installment Contracts of Sale under ss. 1 3-207(l 1) of the Tax Property Article and options to purchase real property under ss.13-207(12) of the Tax-Property Article; 3. A sale by a lender acquiring the Real Property by foreclosure or deed in lieu of foreclosure; 4. A sheriffs sale, tax sale, or sale by foreclosure, partition, or by court appointed trustee; 5. A transfer by a fiduciary in the course of the administration of a decedent's estate, guardianship, conservatorship, or trust; or 6. A transfer of single family Residential Real Property to be converted by the Buyer into a use other than residential use or to be demolished. EXHIBIT E TO AGREEMENT OF SALE AND PURCHASE PROPERTY DISCLAIMER STATEMENT CERTIFICATION OF NON-FOREIGN STATUS Section 1445 of the Internal Revenue Code provides that a transferee (buyer) of a U.S. real property interest must withhold tax if the transferor (seller) is a foreign person. To inform the transferee that withholding of tax is not required upon the undersigned's disposition of a U.S. real property interest, the undersigned does hereby certify the following: I . The undersigned is not a nonresident alien for purposes of U.S. income taxation. 2. The undersigned's U.S. taxpayer identifying number is 3. The undersigned's address is: The undersigned does understand that this certification may be disclosed to the Internal Revenue Service by the transferee and that any false statement made here could be punished by fine, imprisonment, or both. Under penalties of perjury, the undersigned does hereby declare that the undersigned has examined this certification and, to the best of the undersigned's knowledge and belief, it is true, correct, and complete. Dated: , 1998 By: Richard Sassi MUTUAL RELEASE THIS MUTUAL RELEASE ("Release") made this 3RD day of November 1998, by and between The COUNCIL OF UNIT OWNERS OF THE RESIDENCES AND INN AT HENDERSON'S WHARF, a Condominium, Incorporated (the "Council"), HENDERSON'S WHARF BALTIMORE L.P., a Delaware limited partnership ("HWLP"), CLAREMONT MANAGEMENT CORPORATION ("Claremont"), MCKENNA MANAGEMENT ASSOCIATES, INC. ("McKenna"), CREDIT SERVICE INTERNATIONAL BALTIMORE, INC. ("CSI"), TERENCE P. SULLIVAN ("Sullivan"), CHARLES M. MORAN, JR. ("Moran"), CHARLES S. INTRAVAIA ("Intravaia"), BRIAN M. KRASON ("Krason") and JOSEPH V. BRADY ("Brady") (Claremont, McKenna, Sullivan, Intravaia, Krason and Brady are sometimes collectively referred to herein as the "Third Party Defendants") and RICHARD SASSI, a Maryland resident ("Sassi"). EXPLANATORY STATEMENT The Council is the council of unit owners for the residential condominium known as The Residences and Inn at Henderson's Wharf, located at the foot of Fell Street in Fells Point, Baltimore City, Maryland (the "Condominium"). HWLP operates and manages the Condominium. Sassi is the owner of Condominium Unit No. 402 and Parking Unit No. P-61 in the Condominium (collectively, the "Unit"). The Council and HWLP filed a legal action against Sassi, known as The Council of Unit Owners of the Residences and Inn at Henderson's Wharf, A Condominium, Incorporated and Henderson's Wharf Baltimore, L.P. v. Richard Sassi, Civil Case No. 97-154-052-CC-2921, which is pending in the Circuit Court of Maryland for Baltimore City ("Lawsuit"). In the Lawsuit, the Council and HWLP assert claims against Sassi for delinquent condominium charges and assessments and nuisance (all of the Council's and HWLP's claims are hereinafter sometimes collectively referred to as the "Condominium's Claims"). Sassi filed a (i) counterclaim in the Lawsuit against the Council and HWLP, as applicable, for violations of Fair Debt Collection Practices Act, breach of contract, deceit and trespass (all of such claims being sometimes collectively referred to herein as the "Counterclaim"); and (ii) third party complaint in the Lawsuit against Claremont Management Corporation ("Claremont"), McKenna Management Associates, Inc. ("McKenna"), Credit Service International Baltimore, Inc. ("CSI"), Terence P. Sullivan ("Sullivan"), Charles M. Moran, Jr. ("Moran"), Charles S. Intravaia ("Intravaia"), Brian M. Krason ("Krason") and Joseph V. Brady ("Brady"), as applicable, for violations of Fair Debt Collection Practices Act, breach of contract, negligence, deceit and trespass (all of such claims being sometimes collectively referred to herein as the "Third Party Complaint"). Claremont, McKenna, Sullivan, Intravaia and Krason and Brady are sometimes collectively referred to herein as the "Third Party Defendants". CSI filed a cross complaint in the Lawsuit against the Council, HWLP, Claremont, McKenna, Sullivan, Moran, Intravaia, Krason and Brady for indemnification for certain matters ("Cross Claim"). The parties have agreed to compromise and settle all claims which any party has asserted or may assert in the Lawsuit, Counterclaim, Third Party Complaint or Cross Claim, or which any party has asserted or may assert in the Lawsuit, Counterclaim, Third Party Complaint or Cross Claim, or which any party may have arising out of the use or ownership or operation of the Unit, or any part thereof, pursuant to the terms of a Settlement Agreement of even date herewith between the parties ("Settlement Agreement"). NOW, THEREFORE, for and in consideration of the foregoing explanatory statements and the agreements hereinafter set forth, the sufficiency and legal adequacy of which the parties acknowledge, they do hereby agree as follows: 1 . The Council and HWLP, for themselves and for their officers, directors, employees, agents, principals and shareholders, and for all their respective successors and assigns, hereby releases and forever discharges Sassi and the Third Party Defendants, their respective heirs. personal representatives, successors, assigns, officers, directors, employees, agents, principals and shareholders, from any and all claims, actions, suits, debts, counts, covenants. contracts, damages. judgments and demands of whatsoever kind or nature ("Claims"), which the Council and/or HWLP, individually or collectively, ever had, or may now have, up to the date of this Release, pertaining in any way to the Unit (other than a misrepresentation by Sassi under the Agreement of Sale, as defined in the Settlement Agreement), including but not limited to any Claims which were raised or could have been raised in the Lawsuit. 2. Sassi, for himself and his heirs and personal representatives and assigns, hereby releases and forever discharges the Council, 14WLP and the Third Party Defendants, their respective heirs, personal representatives, successors, assigns, officers, directors, employees, agents, principals and shareholders, from any and all Claims which Sassi ever had, or may now have, up to the date of this Release, pertaining in any way to the Unit. including but not limited to any Claims which were raised or could have been raised in the Counterclaim or in the Third Party Complaint. 3. The Third Party Defendants, for themselves and for their officers, directors, employees, agents, principals and shareholders, and for their respective heirs, personal representatives, successors and assigns, hereby releases and forever discharges Sassi, the Council and HWLP, their respective heirs, personal representatives, successors, assigns, officers, directors. employees, agents, principals and shareholders, from any and all Claims which the Third Party Defendants, individually and/or collectively, ever had, or may now have, up to the date of this Release, pertaining in any way to the Unit, including but not limited to any Claims which were raised or could have been raised in the Cross Complaint. 4. This Release contains the entire agreement between the parties and is the complete written integration of that agreement. This writing is intended by the parties as a final expression of that agreement and as a complete and exclusive statement of the terms thereof, all negotiations, considerations and representations between the parties having been incorporated herein. No course or prior dealings between the parties or their officers, employees, agents or affiliates shall be relevant or admissible to supplement, explain or vary any of the terms of this Release. None of the parties to this Release has any right to rely on any prior or contemporaneous representations made by anyone concerning this Release and none of the parties has so relied. 5. Each of the parties has read this Release and fully understands it. 6. This Release may be executed in one or more counterparts, each of which shall be deemed an original and all of which when taken together shall constitute one and the same document. This Release may be delivered by facsimile transmission of an originally executed copy to be followed by immediate delivery of the original of such executed copy. IN WITNESS WHEREOF, the parties have executed this Release under seal as of the 3rd day of November, 1998. WITNESS/ATTEST: COUNCIL: THE COUNCIL OF UNIT OWNERS OF THE RESIDENCES AND INN AT HENDERSON'S WHARF, a Condominium, Incorporated By: Name: Title: HWLP: HENDERSON'S WHARF BALTIMORE L.P. BY: Henderson's Wharf Development Corporation, General Partner By: (SEAL) Name: Title: CLAREMONT: CLAREMONT MANAGEMENT CORPORATION By: (SEAL) Name: Title: MCKENNA: MCKENNA MANAGEMENT ASSOCIATES, INC. By: (SEAL) Name: Title: STATE OF ) )TO WIT: CITY/C0UNTY0F ) I HEREBY CERTIFY that on this 29th day of September, 1998, before me, the subscriber, a Notary Public of the State and City/County aforesaid, personally appeared Jeffrey F. Ault, who acknowledged himself/herself to bc the President of Credit Service International Baltimore, Inc., a corporation,and that he/she as such officer, being authorized so to do, executed the foregoing instrument for the purpose therein contained by signing in my presence the name of the corporation by himself/herself as such officer. In-Witness Whereof, I have hereunto set my hand and official seal. Notary Public My Commission expires: STATE OF ) ) to wit: CITY/COUNTY OF ) I HEREBY CEPUIFY that on thisday of 1998, before me, the subscriber, a Notary Public of the State aforesaid, personally appeared Terence P. Sullivan, known to me (or satisfactorily proven) to be the persons whose name is subscribed to the within instrument, and he acknowledges that he executed the foregoing instrument for the purposes therein contained. IN WITNESS WHERE0F, I have hereunto set my hand and Notarial Seal. Notary Public My Commission Expires; CSI: CREDIT SERVICE INTERNATIONAL BALTIMORE, INC. By: (SEAL) Name: Tit1c: SULLIVAN: (SEAL) Terence P. Sullivan MORAN: (SEAL) Charles M. Moran, Jr. INTRAVAIA: (SEAL) Charles S. Intravaia KRASOIN: (SEAL) Brian M. Krason BRADY: Joseph Brady STATE OF ) ) to wit: CITY/COUNTY OF ) I HEREBY CERTIFY that on this dav of 1998. before me, the subscriber, a Notary Public of the State aforesaid, personally appeared Brian M. Krason, known to me (or satisfactorily proven) to be the persons whose name is subscribed to the within instrument, and he acknowledged that he executed the foregoing instrument for the purposes therein contained. IN WITNESS WHEREOF, I have hereunto set my hand and Notarial Seal. Notary Public My Commission Expires: STATE OF ) ) to wit: CITY/COUNTY 0F ) I HEREBY CERTIFY that on this 30th day of .October, 1998 before me, the subscriber, a Notary Public of the State aforesaid, personally appeared Joseph V. Brady, known to me (or satisfactori1v proven) to be the persons whose name is subscribed to the within instrument, and he acknowledged that he executed the foregoing instrument for the purposes therein contained. IN WITNESS WHEREOF. I have hereunto set my hand and Notarial Seal. Notary Public My Commission Expires: SASSI: (SEAL) Richard Sassi STATE OF ) )TO WIT: CITY/COUNTY OF ) I HEREBY CERTIFY that on this _ day of 1 1998 , before me, the subscriber, a Notary Public of the State and City/County aforesaid, personally appeared , who acknowledged himself/herself to be the of The Council of Unit Owners of the Residences and Inn at Henderson's Wharf, a Condominium Incorporated, and that he/she as such officer, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing in my presence the name of the corporation by himself/herself as such officer. In Witness Whereof, I have hereunto set my hand and official seal. Notary Public My Commission expires: STATE OF TO WIT: CITY/COUNTY OF I HEREBY CERTIFY that on this - day of 1 1998, before me, the subscriber, a Notary Public of the State and City/County aforesaid. personally appeared I who acknowledged himself/herself to be the of Henderson's Wharf Development Corporation, general partner of Henderson's Wharf Baltimore, L.P.,a Delaware limited partnership, and that he/she as such officer. being authorized so to do, executed the foregoing instrument for the purposes therein contained. by signing in my presence the name of the corporation by himself/herself as such officer. In Witness Whereof, I have hereunto set my hand and official seal. Notary Public My Commission expires: STATE OF ) )to wit: CITY/COUNTY OF ) I HEREBY CERTIFY that on this 3rd , of November , 1998, before me, the subscriber, a Notary Public of the State aforesaid, personally appeared Richard Sassi, known to me (or satisfactorily proven) to be the persons whose name is subscribed to the within instrument, and he acknowledged that he executed the foregoing instrument for the purposes therein contained. IN WITNESS WHEREOF, I have hereunto set my hand and Notarial Seal. Notarv Public My Commission Expires: AGREEMENT OF SALE AND PURCHASE THIS AGREEMENT OF SALE AND PURCHASE (this "Agreement") is made on this 3rd day of November, 1998 (the "Effective Date"), by and between RICHARD SASSI a Maryland resident ("Seller") and HENDERSON'S WHARF BALTIMORE L.P., a Delaware limited partnership ("Buyer"). Background Seller is the owner of Condominium Unit No. 402 (the "Unit") in The Residences and Inn at Henderson's Wharf, a Condominium (the "Condominium"), together with all appurtenances and advantages thereunto pertaining, and Parking Unit No. P-61 and an undivided percentage interest in the common elements, common expenses and common profits in the condominium regime, and together with all appliances, fixtures, equipment and personally located in the Unit (collectively, the "Property"). Seller desires to sell and convey to Buyer, and Buyer desires to purchase from Seller, the Property upon the terms and conditions set forth in this Agreement. Agreement NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Buyer agree as follows: 1. SALE AND PURCHASE. Subject to the terms and conditions set forth in this Agreement, Seller hereby agrees to sell to Buyer, and Buyer hereby agrees to purchase from Seller, the Property. 2. PURCHASE PRICE AND PAYMENT. The purchase price to be paid by Buyer to Seller for the Property (the "Purchase Price") shall be the sum of One Hundred Ten Thousand Dollars ($110,000.00). The Purchase Price shall be paid at Closing (as hereinafter defined) by bank, cashier's, certified or title company check or by bank wire. 3. POSSESSION; RISK OF LOSS. (a) At Closing, Seller shall deliver to Buyer possession of the Property, in broom clean condition, free of any and all tenancies. (b) Until Closing, the Seller shall bear the risk of any damage to or destruction of the Property. From and after the date hereof and until Closing, the Seller shall, at its expense, (a) keep the Property insured against fire and such other insurable casualties as are commonly insured against by an all-risk casualty insurance policy, to its full insurable value, and (b) cause each such policy to be endorsed to name the Buyer (in its capacity as contract purchaser hereunder) as an additional insured thereunder as its interest may appear. 4. TITLE. Fee simple title in and to the Property shall be marketable, insurable at standard rates on an ALTA Form B policy of owner's title insurance, and free and clear of all liens, encumbrances, leases, easements, covenants, conditions and restrictions, except for those matters shown on the title report attached hereto as Exhibit A and incorporated herein by reference (collectively, the "Permitted Property Exceptions"). From and after the Effective Date Seller shall not do or cause to be done anything which will affect the status of title of the Property. Notwithstanding anything to the contrary, Seller shall discharge any lien or encumbrance which is capable of being discharged by the payment of money, including any deed of trust or mortgage. 5. SELLER'S REPRESENTATIONS AND WARRANTIES. Seller makes the following representations and warranties to Buyer, each of which shall be true and correct on the Effective Date and on the Closing Date (as hereinafter defined) and shall survive the Closing: (a) The execution and delivery of this Agreement by Seller., and the performance by Seller of all terms and conditions contained herein, do not violate the terms of, are not in conflict with, and will not result in the breach of or default under (1) any agreement, commitment, obligation, contract or instrument under which Seller or the Property is bound or affected or (ii) any law, rule, regulation or court order by which the Property or Seller is affected. (b) As of the Effective Date, all taxes, assessments, fees or other charges (other than condominium fees) affecting or pertaining to the Unit have been paid in full. (c) There are no leases or tenancies with respect to the Property or any part thereof and there have not been any for the preceding six months. The Property has never been a single family residential rental dwelling as such term is defined in Article 13, Sections 46-55 of the Baltimore City Code (1976 Edition, as amended). Seller will not lease the Unit prior to Closing. 6. CONDITIONS PRECEDENT TO CLOSING. The obligation of Buyer to purchase the Property pursuant to this Agreement shall be expressly conditioned upon and subject to the satisfaction (or written waiver by Buyer) of each of the following conditions: (i) Each of the representations and warranties of Seller contained in Section 5 shall be true as of the Closing Date, and (ii) Seller shall not be in default of any of its obligations under this Agreement. If any one or more of such conditions precedent are not satisfied (or the satisfaction thereof is not waived in writing by Buyer) as of the Closing Date, then Buyer shall have the right, at its option, to terminate this Agreement by written notice thereof to Seller, and thereafter neither party shall have any further liability or obligation hereunder. 7. CLOSING; CLOSING COSTS; ADJUSTMENTS. (a) The consummation of the transactions contemplated by this Agreement (the "Closing") shall take place at the offices of Neuberger, Quinn, Gielen, Rubin & Gibber, P.A., 27th Floor, One South Street, Baltimore, Maryland 21202, or at such other location in Baltimore City designated by Buyer, within sixty (60) days from the date of this Agreement upon not less than five (5) days prior notice from Buyer to Seller, at a time designated by Buyer ("Closing Date"). If the Closing Date as provided herein falls on a Saturday, Sunday or legal holiday, then the Closing Date shall be extended to the next day which is a business day. (b) Buyer shall pay all recording costs and any costs charged by the council of unit owners of the Condominium in connection with such conveyance. (c) All fees (other than condominium fees), all taxes, general or special. and all other public and governmental charges or assessments against the Property which are or may be payable on an annual or semi-annual basis (including metropolitan and other benefit charges, assessments, liens or encumbrances) shall be adjusted and apportioned as of the Closing and are to be assumed and paid thereafter by Buyer. whether or not the assessments have been levied as of the Closing. (d) All outstanding condominium fees assessed against the Property up through the date of Closing shall be paid by Buyer at Closing. (e) All water and sewer bills for the Property shall be adjusted as of the Closing based on prior bills and all gas and/or electric bills shall be adjusted as of the Closing based on meter reading or prior bills. 8. RECORDATION AND TRANSFER TAXES, OTHER COSTS. (a) SECTION 14-104 OF THE REAL PROPERTY ARTICLE OF THE ANNOTATED CODE OF MARYLAND PROVIDES THAT, UNLESS OTHERWISE NEGOTIATED IN THE CONTRACT OR PROVIDED BY STATE OR LOCAL LAW, THE COST OF ANY RECORDATION TAX OR STATE OR LOCAL TRANSFER TAX SHALL BE SHARED EQUALLY BY BUYER AND SELLER. This statement is provided for informational purposes only. Except as provided in subsection (b) below, Buyer shall pay the total cost of all documentary stamps, recordation taxes and transfer taxes imposed upon the transfer of the Property. (b) This subsection applies if Buyer is a first-time Maryland home buyer who will reside in the Property. If there are two or more Buyers, then each Buyer must be someone who is a first-time Maryland home buyer, or someone who will not occupy the house as a principal residence and who is a co-maker or guarantor of a purchase money deed of trust or mortgage for the benefit of the first-time Maryland home buyer. A "first-time Maryland home buyer" means an individual who has never owned in the State of Maryland residential real property that has been his or her principal residence. Section 14-104 of the Real Property Article of the Annotated Code of Maryland provides that: (i) Buyer's portion of the State transfer tax is waived; (ii) State transfer tax will be reduced to 0.25% of the sales price of the property; (iii) the entire amount of the State transfer tax shall be paid by Seller; and (iv) the entire amount of recordation tax and local transfer tax shall be paid by Seller unless there is an express agreement between Buyer and Seller that the recordation tax and local transfer tax will not be paid entirely by Seller. In this Agreement, the parties agree that the costs of transfer tax and recordation tax shall be paid by Buyer. check if first-time Maryland Home Buyer. 9. DEFAULT. (a) If Buyer shall have fully performed its obligations hereunder and Seller breaches this Agreement or otherwise fails to perform or observe any of the covenants or obligations to be performed or observed by Seller hereunder, or if any of Seller's representations or warranties hereunder is incorrect or untrue as of the Closing Date, Buyer shall have the right to (i) enforce Buyer's right of specific performance, (ii) bring suit for all damages suffered by reason of Seller's action or inaction, and/or (iii) enforce any and all other remedies available to Buyer at law or in equity. (b) If Seller shall have fully performed its obligations hereunder and Buyer breaches this Agreement or otherwise fails to perform or observe any of the covenants or obligations to be performed or observed by Buyer hereunder, Seller shall have the right to (i) enforce Seller's right of specific performance, (ii) bring suit for all damages suffered by reason of Buyer's action or inaction, and/or (iii) enforce any and all other remedies available to Seller at law or in equity. (c) In the event of litigation, the prevailing party shall be entitled to reasonable attorneys' fees and costs of litigation. 10. CLOSING DOCUMENTS. (a) At Closing, upon payment of the Purchase Price, Seller shall execute and deliver to the closing officer or title company representative a special warranty deed, with covenants of further assurances, in the form attached hereto as Exhibit B and incorporated herein by reference, conveying fee simple title to the Property to Buyer free and clear of all liens, encumbrances, leases, easements, covenants, conditions, restrictions and other title exceptions other than the Permitted Property Exceptions. (b) On the Closing Date, Buyer shall execute, acknowledge and deliver all additional documents that may reasonably be necessary or appropriate to carry out the provisions hereof. 11. OPERATIONS PENDING CLOSING. From and after the dates listed below, the parties shall perform as follows: (a) From and after the Effective Date, Seller shall promptly furnish to Buyer copies of any and all notices or communications that Seller receives from (i) any governmental or quasi -governmental entities, or any other body having jurisdiction with respect to the use and occupancy or physical condition of the Property, and/or (ii) any other notice or communication relating to the Property. (b) From and after the Effective Date, Seller shall promptly furnish to Buyer written notice of any event or condition that causes or may tend to cause a change in the facts relating to, or the accuracy, completeness or truth of, any of the representations, warranties, covenants, or any of the information provided herein. (c) From and after the Effective Date, neither Seller nor Seller's agents, affiliates or employees shall sell, offer for sale., pen-nit the use of, negotiate with respect to, or otherwise deal in the sale, lease or other transfer of the Property or any interest therein. 12. BROKERAGE. Each party represents and warrants to the other that it has dealt with no agent, broker or finder in connection with this Agreement, and each party shall indemnify, defend and save harmless the other from and against any loss, cost, damage or expense (including reasonable attorneys' fees) arising from a breach of such representation or warranty. 13. 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 Seller: Henderson's Wharf Baltimore L.P. c/o Gunn Financial, Inc. 45 Broad Street Boston, MA 02109 ATTN: Charles Intravaia Telecopy No. (617) 338-6164 With a copy to: Richard Rubin, Esquire Neuberger, Quinn, Gielen,Rubin & Gibber, P.A. Commerce Place, 27th Floor One South Street Baltimore, Maryland 21202-3201 Telecopy No. (410) 332-8594 If to Buyer: Richard Sassi 10 East Lee Street Unit 1509 Baltimore, Maryland 21202 Telecopy No. (410)342-3155. With a copy to Bruce D. Brown, Esquire Siskind, Grady, Rosen & Hoover, P.A. Jefferson Building Two East Fayette Street Baltimore, Maryland 21202 Telecopy No. (410) 332-0269 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 U.S. Post Office. 14. RESALE NOTICE. SELLER IS REQUIRED BY LAW TO FURNISH TO BUYER NOT LATER THAN FIFTEEN (15) DAYS PRIOR TO THE CLOSING CERTAIN INFORMATION CONCERNING THE CONDOMINIUM WHICH IS DESCRIBED IN ss.11-135 OF THE MARYLAND CONDOMINIUM ACT. THIS INFORMATION MUST INCLUDE AT LEAST THE FOLLOWING: (I) A COPY OF THE DECLARATION (OTHER THAN THE PLATS); (II) A COPY OF THE BYLAWS; (III) A COPY OF THE RULES AND REGULATIONS OF THE CONDOMINIUM; (IV) A CERTIFICATE CONTAINING: (1) A STATEMENT DISCLOSING THE EFFECT ON THE PROPOSED CONVEYANCE OF ANY RIGHT OF FIRST REFUSAL OR OTHER RESTRAINT ON THE FREE ALIENABILITY OF THE UNIT, OTHER THAN ANY RESTRAINT CREATED BY THE UNIT OWNER; (2) A STATEMENT OF THE AMOUNT OF THE MONTHLY COMMON EXPENSE ASSESSMENT AND ANY UNPAID COMMON EXPENSE OR SPECIAL ASSESSMENT CURRENTLY DUE AND PAYABLE FROM THE SELLING UNIT OWNER; (3) A STATEMENT OF ANY OTHER FEES PAYABLE BY THE UNIT OWNERS TO THE COUNCIL OF UNIT OWNERS; (4) A STATEMENT OF ANY CAPITAL EXPENDITURES APPROVED BY THE COUNCIL OF UNIT OWNERS OR ITS AUTHORIZED DESIGNEE PLANNED AT THE TIME OF THE CONVEYANCE WHICH ARE NOT REFLECTED IN THE CURRENT OPERATING BUDGET INCLUDED IN THE CERTIFICATE; (5) THE MOST RECENTLY PREPARED BALANCE SHEET AND INCOME AND EXPENSE STATEMENT, IF ANY, OF THE CONDOMINIUM; (6) THE CURRENT OPERATING BUDGET OF THE CONDOMINIUM, INCLUDING DETAILS CONCERNING THE AMOUNT OF THE RESERVE FUND FOR REPAIR AND REPLACEMENT OF ITS INTENDED USE, OR A STATEMENT THAT THERE IS NO RESERVE FUND; (7) A STATEMENT OF ANY JUDGMENTS AGAINST THE CONDOMINIUM AND THE EXISTENCE OF ANY PENDING SUITS TO WHICH THE COUNCIL OF UNIT OWNERS IS A PARTY; (8) A STATEMENT GENERALLY DESCRIBING ANY INSURANCE POLICIES PROVIDED FOR THE BENEFIT OF THE UNIT OWNERS, A NOTICE THAT THE POLICIES ARE AVAILABLE FOR INSPECTION STATING THE LOCATION AT WHICH THEY ARE AVAILABLE, AND A NOTICE THAT THE TERMS OF THE POLICY PREVAIL OVER THE GENERAL DESCRIPTION; (9) A STATEMENT AS TO WHETHER THE COUNCIL OF UNIT OWNERS HAS KNOWLEDGE THAT ANY ALTERATION OR IMPROVEMENT TO THE UNIT OR TO THE LIMITED COMMON ELEMENTS ASSIGNED TO THE UNIT VIOLATES ANY PROVISION OF THE DECLARATION, BYLAWS, OR RULES OR REGULATIONS; (10) A STATEMENT AS TO WHETHER THE COUNCIL OF UNIT OWNERS HAS KNOWLEDGE OF ANY VIOLATION OF THE HEALTH OR BUILDING CODES WITH RESPECT TO THE UNIT, THE LIMITED COMMON ELEMENTS ASSIGNED TO THE UNIT, OR ANY OTHER PORTION OF THE CONDOMINIUM; (11) A STATEMENT OF THE REMAINING TERM OF ANY LEASEHOLD ESTATE AFFECTING THE CONDOMINIUM AND THE PROVISIONS GOVERNING ANY EXTENSION OR RENEWAL OF IT; AND (12) A DESCRIPTION OF ANY RECREATIONAL OR OTHER FACILITIES WHICH ARE TO BF USED BY THE UNIT OWNERS OR MAINTAINED BY THEM OR THE COUNCIL OF UNIT OWNERS, AND A STATEMENT AS TO WHETHER OR NOT THEY ARE TO BE A PART OF THE COMMON ELEMENTS; AND (V) A STATEMENT BY THE UNIT OWNER AS TO WHETHER THF UNIT OWNER HAS KNOWLEDGE: (1) THAT ANY ALTERATION TO THE UNIT OR TO THE LIMITED COMMON ELEMENTS ASSIGNED TO THE UNIT VIOLATES ANY PROVISION OF THE DECLARATION, BYLAWS, OR RULES AND REGULATIONS; (2) OF ANY VIOLATION OF THE HEALTH OR BUILDING CODES WITH RESPECT TO THE UNIT OR THE LIMITED COMMON ELEMENTS ASSIGNED TO THE UNIT; AND (3) THAT THE UNIT IS SUBJECT TO AN EXTENDED LEASE UNDER ss.11-137 OF THE MARYLAND CONDOMINIUM ACT OR UNDER LOCAL LAW, AND IF SO, A COPY OF THE LEASE MUST BE PROVIDED. BUYER WILL HAVE THE RIGHT TO CANCEL THIS AGREEMENT WITHOUT PENALTY, AT ANY TIME WITHIN SEVEN (7) DAYS FOLLOWING DELIVERY TO BUYER OF ALL OF THIS INFORMATION. HOWEVER, AFTER THE CLOSING, BUYER'S RIGHT TO CANCEL THIS AGREEMENT IS TERMINATED. 15. DISCLOSURE/DISCLAIMER STATEMENT. Attached hereto as Exhibit C and incorporated herein by reference is a notice to Buyer advising Buyer of Buyer's rights under ss. 10-702 of the Real Property Article of the Annotated Code of Maryland. Buyer acknowledges receipt of, and has executed, a copy of such notice. Pursuant to the provisions of ss.10-702 of the Real Property Article of the Annotated Code of Maryland, Seller has delivered to Buyer the written residential property disclaimer statement on the form attached hereto as Exhibit D and incorporated herein by reference. 16. CERTIFICATE OF NON-FOREIGN STATUS. At Closing, Seller shall provide Buyer with either (i) an certificate of non-foreign status in substantially the form attached hereto as Exhibit E, stating that Seller is not a foreign person (as that term is defined in Section 1445 of the Internal Revenue Code) and providing Seller's tax identification number; or (ii) a "Qualifying Statement" as such term is defined by Section 1445 of the Internal Revenue Code. 17. MISCELLANEOUS PROVISIONS. (a) This Agreement contains the sole, final and entire agreement between the parties and is intended to be an integration of all prior and contemporaneous agreements, conditions and undertakings between the parties. There are no promises, agreements, conditions, undertakings, warranties or representations, oral or written, express or implied, between the parties other than as herein set forth. (b) This Agreement may be amended by and only by an instrument executed and delivered by Seller and Buyer. (c) This Agreement and all of the provisions hereof shall be binding upon and shall inure to the benefit of the parties and their respective heirs, devisees, legatees, legal representatives, successors and assigns. (d) This Agreement hall be governed by and construed in accordance with the laws of the State of Maryland. (e) All provisions hereof shall survive the Closing Date, unless otherwise provided herein. (f) Each of the parties agrees to execute and deliver upon reasonable demand of the other any document or instrument that such other party reasonably deems necessary or desirable to evidence or accomplish the rights herein conferred or to implement or consummate the purposes and intent hereof. (g) Time is of the essence. (h) No determination by any court, governmental or administrative entity or otherwise that any provision of this Agreement or any amendment hereof is invalid or unenforceable in any instance shall affect the validity or enforceability of (a) any other such provision, or (b) such provision in any circumstance not controlled by such determination. Each such provision shall be valid and enforceable to the fullest extent allowed by, and shall be construed wherever possible as being consistent with, applicable law. (i) This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which when taken together shall constitute one and the same document. This Agreement may be delivered by facsimile transmission of an originally executed copy to be followed by immediate delivery of the original of such executed copy. (j) The following exhibits are attached to, and made a part of, this Agreement: A - Permitted Property Exceptions B - Form of Deed C - Notice to Buyer - Property Disclosure D - Property Disclaimer Statement E - Certificate of Non-Foreign Status IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement under seal on the date first above written. WITNESS/ATTEST: SELLER: (SEAL) Richard Sassi WITNESS: BUYER: HENDERSON'S WHARF BALTIMORE L.P. By: Henderson's Wharf Development Corporation, General Partner By: (SEAL) Name: Title: EXHIBIT A TO AGREEMENT OF SALE AND PURCHASE PERMITTED PROPERTY EXCEPTIONS SCHEDULE B EXCEPTIONS FROM COVERAGE Policy No. File No.1980348 1 . Taxes payable On an annual basis have been paid through the fiscal year ending June 30, 1999, and other public charges (including assessments by any County, Municipality, Metropolitan District or Commission) payable on an annual basis have been paid through the year ending December 31, 1998. This policy does not insure against the balance of any public charges including assessments by any County, Municipality, Metropolitan District or Commission)payable on an annual basis subsequent to the year ending December 31, 1998. Nor does this policy insure against possible future tax levies, nor against possible public charges as defined above that have not been levied or assessed, which future taxes, charges and assessments are not now due and payable. 3. Declaration of The Residences and Inn at Henderson's Wharf, a condominium, by Carley Capital Group dated August 30, 1988 and recorded among the Land Records of BaltimoreCity in Liber SEB no. 1821, folio 20, as amended by the following: a) Amendment to Declaration dated April 3, 1989 and recorded among the aforesaid Land Records in Liber SEB No. 2081, folio 329; b) Second Amendment to Declaration dated July 31, 1990 and recorded among the aforesaid Land Records in Liber SEB No. 2563, folio 230; and c) Third Amendment to Declaration dated December 14, 1992 and recorded among the aforesaid Land Records in Liber SEB No. 3578, folio 030. 4. Amended and Restated Henderson's Wharf Disposition Agreement dated October 10, 1984 and recorded among the Land Records of Baltimore City in Liber SEB No. 335, folio 062, as amended by First Amendment to Amended and Restated Henderson's Wharf Disposition agreement dated July 31, 1990 and recorded among he aforesaid Land Records in Liber SEB No. 2563, folio 264. CONTINUATION OF SCHEDULE B PART I File No. 1951576 5. Building Perimeter Easement and Connecting Easement established by Pedestrian Promenade Easement Agreement dated October 19, 1984 and recorded among the Land Records of Baltimore City in Liber SEB no. 335, folio 204, by and between Carley Capital Group and Mayor and City Council of Baltimore, as amended by the following: a) Amendment of Pedestrian Promenade Easement Agreement dated April 6, 1987 and recorded among the aforesaid Land Records in Liber SEB No. 1308, folio 589; and b) Second Amendment t o Pedestrian Promenade Easement Agreement dated July 31, 1990 and recorded among the aforesaid Land Records in Liber SEB No. 2563, folio 241; 6. Easement to the benefit of the Marina Owner over the Building Perimeter Easement and Commercial Courtyard Area, as established by Reciprocal Easement Agreement dated August 31, 1988 and recorded among the Land Records of Baltimore City in Liber SEB No. 1824, folio 162, by and between Carley Capital Group and The Council of Unit Owners of The Residences and Inn at Henderson's Wharf, a Condominium, Incorporated, as amended by: (a) Amended to Reciprocal Easement Agreement dated July 31, 1990 and recorded among the aforesaid Land Records in Liber SEB No. 2822, folio 477; and (b) Second Amendment to Reciprocal Easement Agreement dated February 27, 1996 and recorded among the aforesaid Land Records in Liber SEB 5395, folio 91. 7. Terms, conditions, easements, restrictions and other criteria as shown on the Plats entitled "The Residences at Henderson's Wharf, a Condominium", as follows: (a) Sheets 1 of 11 through 11 of 11 dated August, 1988 and recorded as Condominium Plat SEB No. 232; and (b) Sheets 1 of 11 through 11 of 11 dated September, 1988 and revised December 14, 1992 and recorded as Condominium Plat SEB No. 298. EXHIBIT B TO AGREEMENT OF SALE AND PURCHASE DEED DEED THIS DEED ("Deed") is made on this day of 1 1998, from RICHARD SASSI ("Grantor") to HENDERSON'S WHARF BALTIMORE L.P., a Delaware limited partnership ("Grantee"). The Grantor for a consideration of One Hundred Ten Thousand Dollars ($110,000.00) grants, conveys and assigns to the Grantee, its successors and assigns, in fee simple, the real property located in Baltimore City, Maryland, and described as follows: Condominium Unit No. 402 ("Unit") and Parking Unit No. P-61 ("Parking Unit") in THE RESIDENCES AND INN AT HENDERSON'S WHARF, A CONDOMINIUM ("Condominium"), a condominium established under the provisions of Title I I of the Real Property Article of the Annotated Code of Maryland (1988 Replacement Volume as amended) by the operation and effect of a Declaration dated August 30, 1988, and recorded among the Land Records of Baltimore City (the "Land Records") at Liber S.E.B. No. 1821, page 20, et. seq., made by Carley Capital Group (hereinafter together wit', any amendments thereto, referred to as the "Declaration"), all as the Unit, the Parking Unit and the Condominium are defined in the Declaration and are shown on those certain plats entitled "Condominium Plat, The Residences and Ian at Henderson's Wharf, a Condominium," dated August, 1988, and recorded among the Plat Records of Baltimore City at Condominium Plat Record Book S.E.B. No. 232, Sheets I through 11. as amended (all of which plats, together with any supplements thereto, are hereinafter referred to collectively as the "Condominium Plats"). The improvements thereon being known as 1000 Fell Street, Unit No. 402, along with Parking Unit No. P-61 are hereinafter referred to as the "Property"; and Being the same property described in a Deed from Carley Capital Group to Grantor dated September 6, 1988 and recorded among the Land Records in Liber 1856, folio 239. TOGETHER WITH all improvements contained in the Property, and all appurtenances and advantages thereunto pertaining, including an undivided percentage interest in the common elements, common expenses and common profits in the condominium regime as set forth in the Declaration, the Bylaws and the Condominium Plats. TO HAVE AND TO HOLD the property hereby conveyed to Grantee, its successors and assigns, in fee simple, forever. The Grantor hereby covenants that it has not done or suffered to be done any act. matter or thing whatsoever to encumber the property hereby conveyed-, that it will warrant specially the property hereby; and that it will execute such further assurances of the same as may be requisite. IN WITNESS WHEREOF, the Grantor has executed this Deed under seal on the date first above written. WITNESS: GRANTOR: (SEAL) Richard Sassi STATE OF MARYLAND ) ) to wit: COUNTY OF ) I HEREBY CERTIFY that on this day of -1 1998, before me. the subscriber, a Notary Public of the State of Maryland, personally appeared RICHARD SASSI. known to me (or satisfactorily proven) to be the person whose name is subscribed to the within instrument, and he acknowledged that he executed the foregoing instrument for the purposes therein contained. IN WITNESS WHEREOF, I have hereunto set my hand and Notarial Seal. Notary Public My Commission Expires: CERTIFICATE THE UNDERSIGNED, AN ATTORNEY ADMITTED TO PRACTICE BEFORE THE COURT OF APPEALS OF MARYLAND, HEREBY CERTIFIES THAT THE ABOVE INSTRUMENT WAS PREPARED BY ME OR UNDER MY SUPERVISION. Susan M. Wilkins, Attorney MR./MS. CLERK: AFTER THIS DEED OF EXCHANGE HAS BEEN RECORDED, PLEASE RETURN TO: Susan M. Wilkins, Esq. Neuberger, Quinn, Gielen, Rubin & Gibber, P.A. Commerce Place, 27th Floor One South Street Baltimore, Maryland 21202-3201 EXHIBIT C TO AGREEMENT OF SALE AND PURCHASE NOTICE TO BUYER-PROPERTY DISCLOSURE NOTICE TO BUYER OF BUYER'S RIGHT UNDER MARYLAND'S PROPERTY DISCLOSURE LAW NOTE: This Notice does not apply to: (1) The initial sale of single family residential real property; (2) a transfer that is exempt from the transfer tax under ss. 13-207 of the Tax-Property Article, except land installment contracts of sale under ss. 13 -207(l 1) of the Tax-Property Article and options to purchase real property under ss. 13 -207(12) of the Tax-Property Article; (3) a sale by a lender acquiring the real property by foreclosure or deed in lieu of foreclosure; (4) a sheriffs sale, tax sale, or sale by foreclosure, partition or by court appointed trustee; (5) a transfer by a fiduciary in the course of the administration of a decedent's estate, guardianship, conservatorship, or trust; or (6) a transfer of single family residential real property to be converted by the buyer into a use other than residential use or to be demolished. SECTION 10-702 OF THE REAL PROPERTY ARTICLE OF THE ANNOTATED CODE OF MARYLAND ("SECTION 10-702") REQUIRES THAT SELLERS OF SINGLE FAMILY RESIDENTIAL PROPERTY PROVIDE YOU, THE BUYER, ON OR BEFORE ENTERING INTO A CONTRACT OF SALE, EITHER: (A) A WRITTEN PROPERTY CONDITION DISCLOSURE STATEMENT LISTING ALL DEFECTS OR INFORMATION OF WHICH THE SELLER HAS ACTUAL KNOWLEDGE IN RELATION TO THE FOLLOWING: (I) WATER AND SEWER SYSTEMS, INCLUDING THE SOURCE OF HOUSEHOLD WATER, WATER TREATMENT SYSTEMS, AND SPRINKLER SYSTEMS; (II) INSULATION; (III) STRUCTURAL SYSTEMS, INCLUDING THE ROOF. WALLS. FLOORS, FOUNDATION, AND ANY BASEMENT; (IV) PLUMBING, ELECTRICAL. HEATING, AND AIR CONDITIONING SYSTEMS; (V) INFESTATION OF WOOD-DESTROYING INSECTS; (VI) LAND USE MATTERS; (VII) HAZARDOUS OR REGULATED MATERIALS, INCLUDING ASBESTOS, LEAD-BASED PAINT, RADON, UNDERGROUND STORAGE TANKS, AND LICENSED LANDFILLS; AND (VIII) ANY OTHER MATERIAL DEFECTS KNOWN TO THE SELLER;OR (B) A WRITTEN DISCLAIMER STATEMENT PROVIDING THAT: (I) THE SELLER MAKES NO REPRESENTATIONS OR WARRANTIES AS TO THE CONDITION OF THE REAL PROPERTY OR ANY IMPROVEMENTS ON THE REAL PROPERTY; AND (II) THE BUYER WILL BE RECEIVING THE REAL PROPERTY "AS IS", WITH ALL DEFECTS THAT MAY EXIST, EXCEPT AS OTHERWISE PROVIDED IN THE CONTRACT OF SALE. AT THE TIME THE DISCLOSURE OR DISCLAIMER STATEMENT IS DELIVERED TO YOU, YOU ARE REQUIRED TO DATE AND SIGN A WRITTEN ACKNOWLEDGEMENT OF RECEIPT, WHICH SHALL BE INCLUDED IN OR ATTACHED TO THE CONTRACT OF SALE. YOU ARE HEREBY NOTIFIED THAT, IN CERTAIN CIRCUMSTANCES. YOU HAVE THE RIGHT TO RESCIND YOUR CONTRACT OF SALE WITH THE SELLER IF THE SELLER FAILS TO DELIVER TO YOU THE WRITTEN PROPERTY CONDITION DISCLOSURE STATEMENT. SECTION 10-702 PROVIDES THAT A BUYER WHO DOES NOT RECEIVE THE DISCLOSURE STATEMENT ON OR BEFORE ENTERING INTO THE CONTRACT OF SALE HAS THE UNCONDITIONAL RIGHT, UPON WRITTEN NOTICE TO THE SELLER OR SELLER'S AGENT: (I) TO RESCIND THE CONTRACT OF SALE AT ANY TIME BEFORE THE RECEIPT OF THE DISCLOSURE STATEMENT OR WITHIN 5 DAYS FOLLOWING RECEIPT OF THE DISCLOSURE STATEMENT; AND (II) TO THE IMMEDIATE RETURN OF ANY DEPOSITS MADE ON ACCOUNT OF THE CONTRACT. IF THE DISCLOSURE STATEMENT IS DELIVERED TO YOU LATER THAN 3) DAYS AFTER THE SELLER ENTERS INTO A CONTRACT OF SALE WITH YOU. THE CONTRACT IS VOID. YOUR RIGHT TO RESCIND THE CONTRACT OF SALE UNDER SECTION 10-702 TERMINATES IF NOT EXERCISED BEFORE MAKING A WRITTEN APPLICATION TO A LENDER FOR A MORTGAGE LOAN, IF THE LENDER DISCLOSES IN WRITING AT OR BEFORE THE TIME APPLICATION IS MADE THAT THE RIGHT TO RESCIND TERMINATES ON SUBMISSION OF THE APPLICATION. YOUR RIGHTS AS A BUYER UNDER SECTION 10-702 MAY NOT BE WAIVED IN THE CONTRACT OF SALE AND ANY ATTEMPTED WAIVER IS VOID. YOUR RIGHTS AS THE BUYER TO TERMINATE THE CONTRACT UNDER SECTION 10-702 ARE WAIVED CONCLUSIVELY IF NOT EXERCISED BEFORE: (I) CLOSING OR OCCUPANCY BY YOU, WHICHEVER OCCURS FIRST, IN THE EVENT OF A SALE; OR (II) OCCUPANCY, IN THE EVENT OF A LEASE WITH OPTION TO PURCHASE. THE INFORMATION CONTAINED IN THE PROPERTY CONDITION DISCLOSURE STATEMENT IS THE REPRESENTATION OF THE SELLER AND NOT THE REPRESENTATION OF THE REAL ESTATE BROKER OR SALESPERSON, IF ANY. THE SELLER IS NOT REQUIRED TO UNDERTAKE OR PROVIDE AN INDEPENDENT INVESTIGATION OR INSPECTION OF THE PROPERTY IN ORDER TO MAKE THE DISCLOSURES REQUIRED BY SECTION 10-702. THE SELLER IS NOT LIABLE FOR AN ERROR, INACCURACY OR OMISSION IN THE DISCLOSURE STATEMENT IF THE ERROR, INACCURACY, OR OMISSION WAS BASED UPON INFORMATION THAT WAS NOT WITHIN THE ACTUAL KNOWLEDGE OF THE SELLER. OR WAS PROVIDED TO THE SELLER BY A THIRD PARTY. YOU HAVE THE RIGHT TO OBTAIN PROFESSIONAL ADVICE ABOUT THE PROPERTY OR OBTAIN AN INSPECTION OF THE PROPERTY. THE UNDERSIGNED BUYER(S) ACKNOWLEDGES RECEIPT OF THIS NOTICE ON THE DATE INDICATED BELOW. WITNESS: HENDERSON'S WHARF BALTIMORE L.P. By: Henderson's Wharf Development Corp General Partner By: Name: Title: Date: EXHIBIT D TO AGREEMENT OF SALE AND PURCHASE PROPERTY DISCLAIMER STATEMENT MARYLAND RESIDENTIAL PROPERTY DISCLAIMER STATEMENT NOTICE TO SELLER AND BUYER Section ss. 10-702 of the Real Property Article, Annotated Code of Maryland, requires the owner of certain residential real property to furnish to the BUYER either (a) a RESIDENTIAL PROPERTY DISCLAIMER STATEMENT stating that the owner is selling the property "as is" and makes no representations or warranties as to the condition of the property or any improvements on the real property, except as otherwise provided in the contract of sale, or (b) a RESIDENTIAL PROPERTY DISCLOSURE STATEMENT disclosing defects or other information about the condition of the real property actually known by the owner. Certain transfers of residential property are excluded from this requirement (see the exemptions listed below). MARYLAND RESIDENTIAL PROPERTY DISCLAIMER STATEMENT NOTICE TO OWNER(S): Sign this statement only if you elect to sell the property without representations and warranties as to its condition', except as otherwise provided in the contract of sale; otherwise, complete and sign the RESIDENTIAL PROPERTY DISCLOSURE STATFMENT. Property Address:1000 Fell Street, Condominium Unit No. 402, along with Parking Unit No. P-6 1. Legal Description: Condominium Unit No. 402 and Parking Unit No. P-61 in THE RESIDENCES AND INN AT HENDERSON'S WHARF, A CONDOMINIUM, as established pursuant to a Declaration dated August 30, 1988, and recorded among the Land Records of Baltimore City (the "Land Records") at Liber S.E.B. No. 1821, page 20, as amended by Amendment to Declaration dated April 3, 1989 and recorded among the Land Records at Liber S.E.B. No. 2081, folio 329, and as further amended by Second Amendment to Declaration dated July 31, 1990, and recorded among the Land Records at Liber S.E.B. No. 2563, folio 230, and as further amended by Third Amendment to Declaration dated as of December 14, 1992, and recorded among the Land Records at Liber S.E.B. No. 3578, folio 30 (as amended, the "Declaration"). and the Bylaws attached thereto (the "Bylaws"), and as shown on those certain plats entitled "Condominium Plat, The Residences and Inn at Henderson's Wharf, a Condominium," dated August, 1988, and recorded among the Plat Records of Baltimore City at Condominium Plat Record Book S.E.B. No. 232, Sheets I through 11, as amended by condominium plats dated December 14, 1992, and recorded among the Plat Records of Baltimore City at Condominium Plat Record Book S.E.B. 298, Sheets I through I I (as amended, the "Condominium Plats"). The undersigned owner(s) of the real property described above make no representations or warranties as to the condition of the real property or any improvements thereon, and the BUYER will be receiving the real property "as is", with all defects which may exist, except as otherwise provided in the real estate contract of sale. The owner(s) acknowledge having carefully examined this statement and further acknowledge that they have been informed of their rights and obligations under Section ss. 10-702 of the Maryland Real Property Article. SELLER: (SEAL) Richard Sassi Date: The BUYER(s) acknowledge receipt of a copy of this disclaimer statement and further acknowledge that he has been informed of his rights and obligations under Section ss. 10-702 of the Maryland Real Property Article. BUYER: HENDERSON'S WHARF BALTIMORE L.P. By: Henderson's Wharf Development Corporation, General Partner Date: By: Name: Title: MARYLAND RESIDENTIAL FROPERTY DISCLOSURE ACT 10-702. Exemptions. - The following are specifically excluded from the provisions of Section 10-702: 1. The initial sale of single family Residential Real Property; 2. A transfer that is exempt from the transfer tax under ss. 13 -207 of the Tax-Property Article, except land installment contracts of sale under ss.13-207(11) of the Tax-Property Article except hand installment Contracts of Sale under ss. 1 3-207(l 1) of the Tax Property Article and options to purchase real property under ss.13-207(12) of the Tax-Property Article; 3. A sale by a lender acquiring the Real Property by foreclosure or deed in lieu of foreclosure; 4. A sheriffs sale, tax sale, or sale by foreclosure, partition, or by court appointed trustee; 5. A transfer by a fiduciary in the course of the administration of a decedent's estate, guardianship, conservatorship, or trust; or 6. A transfer of single family Residential Real Property to be converted by the Buyer into a use other than residential use or to be demolished. EXHIBIT E TO AGREEMENT OF SALE AND PURCHASE PROPERTY DISCLAIMER STATEMENT CERTIFICATION OF NON-FOREIGN STATUS Section 1445 of the Internal Revenue Code provides that a transferee (buyer) of a U.S. real property interest must withhold tax if the transferor (seller) is a foreign person. To inform the transferee that withholding of tax is not required upon the undersigned's disposition of a U.S. real property interest, the undersigned does hereby certify the following: I . The undersigned is not a nonresident alien for purposes of U.S. income taxation. 2. The undersigned's U.S. taxpayer identifying number is 3. The undersigned's address is: The undersigned does understand that this certification may be disclosed to the Internal Revenue Service by the transferee and that any false statement made here could be punished by fine, imprisonment, or both. Under penalties of perjury, the undersigned does hereby declare that the undersigned has examined this certification and, to the best of the undersigned's knowledge and belief, it is true, correct, and complete. Dated: , 1998 By: Richard Sassi -----END PRIVACY-ENHANCED MESSAGE-----