ASSET MANAGEMENT AGREEMENT
THIS ASSET MANAGEMENT AGREEMENT (the "Agreement") is made and
entered into as of October 1, 1995, by and among HISTORIC PRESERVATION
PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership ("HPP 1987"),
HISTORIC PRESERVATION PROPERTIES 1988 LIMITED PARTNERSHIP, a Delaware
limited partnership ("HPP 1988"), HISTORIC PRESERVATION PROPERTIES 1989
LIMITED PARTNERSHIP, a Delaware limited partnership ("HPP 1989"), HISTORIC
PRESERVATION PROPERTIES 1990 L.P. TAX CREDIT FUND, a Delaware limited
partnership ("HPP 1990") and CLAREMONT MANAGEMENT CORPORATION, a
Massachusetts corporation ("Claremont").
RECITALS
A. HPP 1987, HPP 1988, HPP 1989 and HPP 1990 are sometimes individually
referred to herein as an "HPP Partnership" and collectively referred to as the
"HPP Partnerships."
B. The HPP Partnerships were formed to organized and invest in certain
joint ventures (the "Project Partnerships") which own real properties (the
"Properties") which qualify for the rehabilitation tax credit under Section
48 of the Internal Revenue Code of 1986, as amended (the "Code").
C. The general partner of HPP 1987 is Boston Historic Partners Limited
Partnership, a Massachusetts limited partnership ("BHP"). The business of
HPP 1987 is governed by its Amended and Restated Limited Partnership
Agreement dated as of May 15, 1987 (the "HPP 1987 Partnership Agreement").
HPP 1987 owns an interest in each of the Project Partnerships listed on
Exhibit A attached hereto.
D. The general partner of HPP 1988 is BHP. The business of HPP 1988 is
governed by its Amended and Restated Limited Partnership Agreement dated as
of February 24, 1988 (the "HPP 1988 Partnership Agreement"). HPP 1988 owns
an interest in each of the Project Partnerships listed on Exhibit B attached
hereto.
E. The general partner of HPP 1989 is BHP. The business of HPP 1989 is
governed by its Amended and Restated Limited Partnership Agreement dated as
of December 19, 1988 (the "HPP 1989 Partnership Agreement"). HPP 1989 owns
an interest in each of the Project Partnerships and the property listed on
Exhibit C attached hereto.
F. The general partner of HPP 1990 is Boston Historic Partners II Limited
Partnership, a Massachusetts limited partnership ("BHP II"). The business of
HPP 1990 is governed by its Amended and Restated Limited Partnership
Agreement dated as of May 30, 1990 (the "HPP 1990 Partnership Agreement").
HPP 1990 owns an interest in each of the Project Partnerships listed on
Exhibit D attached hereto.
G. The HPP 1987 Partnership Agreement, HPP 1988 Partnership Agreement,
HPP 1989 Partnership Agreement and HPP 1990 Partnership Agreement are sometimes
individually referred to as an "HPP Partnership Agreement" and collectively
referred to as the "HPP Partnership Agreements."
H. Each of the HPP Partnerships desire to engage Claremont to manage
certain of the business and affairs of the HPP Partnerships and provide the
services set forth in this Agreement on the terms and conditions hereinafter
set forth.
I. Claremont desires to perform such services on the terms and
conditions hereinafter set forth.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
Section 1. Engagement of Claremont.
Each HPP Partnership hereby engages and designate Claremont as the
manager of certain of the business affairs of the HPP Partnerships as more
fully set forth herein. Claremont hereby accepts such engagement and
designation and hereby agrees to perform its obligations under this Agreement
in a businesslike and professional manner. Claremont shall at all times act
only at the specific direction of BHP or BHP II. Every act performed by
Claremont or any agent or employee of Claremont pursuant to the authority
granted by this Agreement shall be done as an independent contractor on
behalf of the HPP Partnerships and all obligations or expenses incurred
hereunder shall be for the account of and at the expense of the HPP
Partnerships, except as otherwise specifically provided hereunder.
Section 2. Duties of Claremont.
2.1 Duties. It shall be the obligation of Claremont to perform the
following duties on behalf of HPP Partnerships (the "Services"):
(a) Asset Management Services. Claremont shall assist BHP and BHP II
in monitoring the operations of the Properties to the extent specifically
directed by BHP and BHP II from time to time and shall periodically meet as
reasonably requested with representatives of BHP and BHP II to discuss
current property operations. Unless otherwise explicitly directed by BHP or
BHP II in writing, a representative of Claremont will visit and meet with the
independent third party property management company, where applicable, those
properties (the "Properties") indicated on Exhibits A through D, at least
once a year so long as such Properties are owned by an HPP Partnership or a
Project Partnership having an HPP Partnership as a partner. A representative
of Claremont will visit any other properties from time to time owned by an
HPP Partnership of a Project Partnership only on an as-needed basis as
specifically requested in writing by BHP or BHP II.
(b) Accounting Services. Claremont will assist BHP and BHP II in
maintaining all accounting records for the HPP Partnerships and
preparing work paper packages and quarterly and annual financial statements
for the HPP Partnerships as applicable, assist BHP and BHP II in the
preparation of tax returns and other reports to investors as applicable.
Claremont shall assist BHP and BHP II in keeping books and records relating
to the HPP Partnerships in accordance with generally accepted accounting
principles, uniformly and consistently applied from year to year, take all
reasonable steps to assist the HPP Partnerships in keeping records of all
transactions, make available for inspection by BHP and BHP II, at all
reasonable times the books and records relating to the HPP Partnerships, and
furnish such information concerning the HPP Partnerships to such persons as
BHP and BHP II may, in writing, reasonably request. In addition, Claremont
will assist BHP and BHP II in preparing and filing all reports required by
the Securities and Exchange Commission, including those items required by
Section 8.4 of each of the HPP 89 and HPP 90 Partnership Agreements. HPP 87
and HPP 88 do not file with the SEC based upon a hardship exemption but they
do provide investors and brokers with a complete unaudited Annual Report.
(c) Investor Services. Claremont will assist BHP and BHP II in
the preparation and distribution of (i) quarterly and annual reports to the
investors in HPP90 Partnership, annual reports for HPP 87, HPP 88, and HPP
89. (ii) the annual form K-1 that enables the investors to file their
respective tax returns, and (iii) responding to and serving investors and
their related broker/dealer and representatives as required. HPP 89 will
also provide copies of the quarterly 10-Q upon request. Copies of the above
correspondences shall be distributed to Brokers of Record and the
DueDiligence officers of selling broker dealer firms consistent with prior
levels of service.
(d) Xxxxxxxxx.Xx performing Services, Claremont will utilize its
staff and make available to the assignment, professional, competent
individuals who can effectively perform the Services at a level anticipated
by both Claremont and HPP. All employees shall be employees of Claremont,
but are subject to reimbursement pursuant to Section 3.2.
(e) Office Space. Claremont will provide allocable office space
for its personnel as may be necessary to perform the Services. The HPP
Partnerships hereby agree to pay the amount equal to allocable rent changes
as set forth in the operating budget.
(f) Support Staff. Claremont will provide or arrange for the
provision of appropriate office support to perform the Services, including
secretarial staff and office equipment, salaries of employees and other
general overhead of Claremont, costs of accounting, statistical or
bookkeeping services and computing on accounting equipment, travel,
telephone communications and other general and administrative expenses. All
costs are to be reimbursed pursuant to Section 3.2.
(g) Cooperation by HPP. The HPP Partnerships shall deliver to
Claremont copies of all documents in the possession of, or available to, the
HPP Partnerships which relate to the HPP Partnerships and/or the financing,
operation, management and leasing of each Property. The HPP Partnerships
acknowledge that the Services provided by Claremont will be based in large
part on information received from the HPP Partnerships. Claremont shall be
entitled to assume that all such information (including, without limitation,
financial statements and other financial data) received from the HPP
Partnerships shall be complete and accurate, and that such information will
not contain, or omit to contain, any statement of material fact known by the
HPP Partnerships to be false or misleading. Claremont will not (and shall
have no obligation to the HPP Partnerships to) undertake to make an
independent verification of any such information unless specifically
requested to do so by the HPP Partnerships in writing. The HPP Partnerships
hereby represent to Claremont that no information furnished or to be
furnished by the HPP Partnerships hereunder or in connection with the
consulting services to be provided by Claremont hereunder, contains or will
contain any untrue statement of a material fact, or omits or will omit to
state a material fact necessary to make such information not misleading.
The HPP Partnerships hereby agree that they have an affirmative obligation
hereunder to disclose any material facts necessary to enable Claremont to
provide its Services hereunder.
2.2 Amount of Time, Etc., Required of the Designated Personnel. The
parties acknowledge that the officers, directors and employees of Claremont
may engage in significant real estate, financial and securities-related
businesses during the term of this Agreement in addition to those
contemplated by this Agreement. Some of these activities may be competitive
with the activities of the HPP Partnerships. The HPP Partnerships hereby
consent to the officers, directors and employees of Claremont engaging in
such competitive activities. Under no circumstances will Claremont or any
of its personnel or agents be required to devote all of their time, resources or
personnel to the performance of this Agreement but only will be required to
devote such time, resources and personnel as is necessary for them to fulfill
their obligations hereunder.
Section 3.Compensation and Reimbursement.
3.1 Base Fee. The HPP Partnerships shall pay to Claremont a base
monthly fee of $1,600 per property for each Property owned directly or
indirectly by such HPP Partnership, as noted on Exhibits A, B, C or D
(the "Base Fee"). The Base Fee shall be due and payable in monthly
installments on the tenth business day of each month throughout the term of
this Agreement. Such fee shall be prorated for any partial year for which
services are performed hereunder. The Base Fee shall be in the following
amounts through June 30, 1996 and will be adjusted at that time to properly
reflect the number of properties/investee partnerships in place at that time
for the next reporting period, ending June 30, 1997:
HPP 1987 - $76,800
HPP 1988 - $76,800
HPP 1989 - $76,800
HPP 1990 - $38,400
3.2 Reimbursement. The HPP Partnerships shall pay the directly
allocable costs incurred by Claremont in providing the Services and the
costs and expenses set forth in the budget for the period October 1, 1995
thru June 30, 1996 attached hereto as Exhibit E (the "Budget"). The Budget
has been approved by the HPP Partnerships. A new budget will be prepared for
the period July 1, 1996 through June 30, 1997. Total charges which are more
than 10% in excess of the Budget must be approved by the HPP Partnerships in
advance. Payments to Claremont under this Section 3.2 will be made monthly.
All such costs shall be allocated to and paid by the HPP Partnerships as
follows for the period October 1, 1995 thru June 30, 1996 fiscal year:
HPP 1987 -18.41 %
HPP 1988 -28.22 %
HPP 1989 -16.37 %
HPP 1990 -37.00 %
These allocations will be reviewed and reset if appropriate for the following
fiscal year.Claremont shall provide a new annual budget by May 15, 1996 for
fiscal year July 1,1996 - June 30, 1997. Expense allocations may change from
year to year based on various factors. The July 1, 1996 - June 30, 1997
budget must be approved in advance by the HPP Partnerships by June 15, 1996.
3.3 Extra Services. If requested in writing from BHP or BHP II from
time to time, in addition to the Services, Claremont shall provide extra
services. Claremont shall xxxx the relevant HPP Partnership at the market
rate for such services rendered. Bills for such extra services will be
rendered and paid monthly.
3.4 Miscellaneous. This Agreement shall in no way obligate Claremont
or any employee of Claremont to pay any costs or expenses of any HPP
Partnership if monies are not available for the payment of such costs or
expenses from the income or reserves established by or on behalf of such HPP
Partnership. In addition, in the event that any of the fees or
reimbursements described in this Section 3 are not paid when due, the accrued
amounts owed to Claremont will bear interest at the Fleet prime rate until
paid.
3.5 Allocation of Costs. In the event that any services are performed
both for HPP Partnership and for other entities, Claremont will make such
allocation of the expense of such services among the HPP Partnership and such
other entities as Claremont determines is appropriate, any such allocation
made in good faith by Claremont shall be final and binding on the parties
hereto.
Section 4.Indemnification.
4.1 Indemnification by Claremont. Claremont agrees to defend and hold
the HPP Partnerships harmless from and indemnify the HPP Partnerships against
any and all liability, loss, damages, court costs and reasonable expenses,
including reasonable attorney's fees (hereinafter collectively referred to
as "Liabilities") which the HPP Partnerships may incur or suffer, which
Liabilities result from the gross negligence, bad faith, fraud or willful
misconduct on the part of Claremont, its employees, agents or others under
the direction or control of Claremont in performing its obligations under
this Agreement. For purposes of this Section 4.1 only, the term "HPP
Partnerships" shall also include any partner, officer, director, employee or
agent of the HPP Partnerships in the event any such person incurs or suffers
any such Liability as a result of such gross negligence, bad faith, fraud,
or willful misconduct. This Section 4.1 shall survive any termination of the
Agreement.
4.2 Indemnification by HPP Partnership. Claremont and the HPP
Partnerships hereby acknowledge that the acts of Claremont hereunder are
solely as agent for the HPP Partnerships and Claremont shall not be liable
to the HPP Partnerships or any other person or entity for any of its actions
or services provided hereunder in relation to the management and operation of
the Properties or otherwise. Each HPP Partnership agrees to defend and
hold Claremont harmless from and indemnify Claremont against any and all
liabilities which Claremont may incur or suffer as a result of any claim
against Claremont arising out of any action taken, omitted, or suffered by
it in good faith and in accordance with general of specific instructions
from the HPP Partnerships of the General Partners, except where such
liabilities result from the negligence, bad faith, fraud or willful
misconduct on the part of Claremont, its employees, agents or others under
the direction or control of Claremont. For purposes of this Section 4.2
only, the term "Claremont" shall also include any officer, director, employee
or agent of Claremont in the event any such person incurs or suffers any
such liability as a result of activities undertaken on behalf of or under
the direction or control of Claremont in connection with its services
performed for the HPP Partnerships. Such indemnification shall include
payment by the HPP Partnerships of all reasonable expenses and reasonable
legal fees incurred in defending a civil or criminal action or proceeding in
advance of the final disposition of such action or proceeding, receipt of an
undertaking by the party or person indemnified to repay such payment if it,
he or she shall be adjudicated to be not entitled to indemnification under
this Section 4.2; and provided further, that no indemnification shall be
provided for Claremont, its directors, officers, agents or employees with
resect to any matter as to which it shall have been finally adjudicated in
any action or proceeding that Insignia, its directors, officers, agents or
employees had acted with negligence, willful misconduct or fraud. This
Section 4.2 shall survive any termination of the Agreement.
Section 5.Term and Termination.
5.1 Term. The term of this Agreement shall commence on October 1, 1995
(the "Commencement Date"), and shall terminate on June 30, 1997, unless
previously terminated by the parties hereto pursuant to Section 5.2 or
extended pursuant to Section 5.3.
5.2 Termination. This agreement will expire on June 30, 1997, subject
to the following terms and conditions:
(a) If the HPP Partnerships elect to terminate this Agreement, they
must perform or cause to be performed all of the following items:
(i) Settlement to Claremont of all amounts due Claremont under
this Agreement by payment or documentation of a binding mutually agreed to
Note Agreement.
(ii) Effect the termination of any liability that Claremont
has entered into.
5.3 Extension. This Agreement shall automatically be extended from
year to year on the same terms and conditions unless terminated in
accordance with this Section 5 or unless any party provides notice no later
than sixty (60) days (May 1, 1997 for the initial term) in advance of the
expiration date of its intention not to extend the Agreement.
5.4 Breach. This Agreement may be terminated by the HPP Partnership or
Claremont upon the default by the other party of any of such other party's
material obligations hereunder; provided, however, that the non-defaulting
party shall have delivered to the other party a written notice specifying
such default in reasonable detail and that the defaulting party shall not
have cured such default within thirty (30) days after receipt of such notice.
5.5 Payment of Fees. Upon any termination pursuant to this Section 5,
Claremont shall have the right to receive any unpaid fees or unreimbursed
expense owed to it under Section 3. Any such amount shall be prorated on a
per diem basis from the date of the last monthly fee payment to the effective
date of any such termination. If any individual HPP Partnership is unable to
pay its share of liabilities because of a lack of cash, then such debts
shall be formally recognized in a binding mutually agreed to Note Agreement.
Section 6.Miscellaneous Provisions.
6.1 Notices. Any notice or communication hereunder must be in writing,
and shall be personally delivered or mailed postage prepaid, by registered or
certified mail, return receipt requested, and if given by registered or
certified mail same shall be deemed to have been given and received when
personally delivered or three (3) days after its mailing. Such notices or
communications shall be given to the parties hereto at their respective
following addresses:
If to the HPP Partnerships:c/o Boston Bay Capital, Inc.
Xxx Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxxxxx
If to Claremont: Xxxxxxx X. Xxxxx, Xx.
Claremont Management Corporation
Batterymarch Park III
Xxxxxx, XX 00000
with a copy to: Xxxxxxxxx, Xxxxxx and Xxxxxxx
Xxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxx, Esq.
Xxxxx X. XxXxxxxxx, Esq.
Any party hereto may at any time by giving ten (10) days' written notice to
the other party hereto designate any other address in substitution of the
foregoing address to which such notice or communication shall be given.
6.2 Severability. If any term, covenant, or condition of this
Agreement or the application thereof to any person or circumstance shall, to
any extent, be invalid or unenforceable, the remainder of this Agreement or
the application of such term, covenant or condition to persons or
circumstances other than those to which it is held invalid or unenforceable,
shall not be affected thereby, and each term, covenant or condition of this
Agreement or such other documents shall be valid and shall be enforced to the
fullest extent permitted by law.
6.3 Applicable Law. This Agreement shall be governed and construed in
accordance with the law as of the Commonwealth of Massachusetts.
6.4 Successors and Assigns. No party hereto may assign any of its
rights or duties hereunder except with the prior written consent of the other
parties.
6.5 Captions. Captions in this Agreement are inserted for convenience
or reference only and do not define, describe or limit the scope or intent of
this Agreement or any of the terms hereof.
6.6 No Partnership. Nothing contained in this Agreement or in the
relationship of the HPP Partnerships and Claremont shall be deemed to
constitute a partnership, joint venture or any other relationship and
Claremont shall at all times be deemed an independent contractor for purposes
of this Agreement.
6.7 No Assignment. Claremont may not assign or in any way voluntarily
transfer this Agreement without the prior written approval of BHP and BHP II.
6.8 Modification or Amendment. This Agreement (including the exhibits
hereto) constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof, supersedes all prior agreements between
the parties relating to the matters contained herein and may not be modified,
waived or terminated orally and may only be amended by an agreement in
writing signed by the parties hereto.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
HISTORIC PRESERVATION PROPERTIES
LIMITED PARTNERSHIP, a Delaware
limited partnership, by its general partner,
BOSTON HISTORIC PARTNERS
LIMITED PARTNERSHIP, a
Massachusetts limited partnership, by its
general partners
PORTFOLIO ADVISORY SERVICES, INC., a
Massachusetts corporation
By
Xxxxxxxx X. Xxxxxxxx, President
By
Xxxxxxxx X. Xxxxxxxx, 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
Xxxxxxxx X. Xxxxxxxx, President
By
Xxxxxxxx X. Xxxxxxxx, 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
Xxxxxxxx X. Xxxxxxxx, President
By
Xxxxxxxx X. Xxxxxxxx, General Partner
HISTORIC PRESERVATION PROPERTIES
1990 X.X.XXX 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
Xxxxxxxx X. Xxxxxxxx, President
By
Xxxxxxxx X. Xxxxxxxx, General Partner
BOSTON HISTORIC PARTNERS II LIMITED
PARTNERSHIP, a Massachusetts limited
partnership, by its general partner, BHP II
ADVISORS LIMITED PARTNERSHIP,
by its general partners
PORTFOLIO ADVISORY SERVICES II, INC.,
a Massachusetts corporation
By
Xxxxxxxx X. Xxxxxxxx, President
By
Xxxxxxxx X. Xxxxxxxx, General Partner
CLAREMONT MANAGEMENT CORPORATION
a Massachusetts Corporation
By
Xxxxxxx Xxxxxx, Chairman
By
Xxxxxxx X. Xxxxx, President
Exhibit A
LIST OF PROPERTIES - HPP 1987
Name of Project Partnership Name of Project Location
0000 Xxxx Xxxxxx Xxxxxxxxxx Xxxxxxxx Xxxxxxxx Xxxxxxxxxxxx,
XX
Limited Partnership
000 Xxxxx Xxxxxx Associates Gallery Row New Orleans, LA
Limited Partnership
Ceresota Mill Limited Ceresota Mill Minneapolis, MN
Partnership
Xxxxx Mill Plaza Associates Xxxxx Mill Plaza Concord, NC
Limited Partnership
Exhibit B
LIST OF PROPERTIES - HPP 1988
Name of Project Partnership Name of Project Location
Union Station Associates Union Station Providence, RI
000 Xxxxx Xxxxxx Associates The Rotunda New Orleans, LA
Limited Partnership
New Bedford Historic Stores CWT Building New Bedford, MA
Associates Limited Partnership
Coastline Associates Limited Coastline Center Wilmington, NC
Exhibit C
LIST OF PROPERTIES - HPP 1989
Name of Project Partnership Name of Project Location
Historic Preservation PropertiesThe Cosmopolitan St. Xxxx, MN
1989 L.P. Building
Xxxxxxx Court Associates Xxxxxxx Court Jenkintown,
PA
Limited Partnership
Portland Lost Associates Xxxxxxxx Hardware Portland, OR
Limited Partnership Lofts
000 Xxxxx Xxxxxx Associates The Lofts New Orleans, LA
Limited Partnership
Exhibit B
LIST OF PROPERTIES - HPP 1990
Name of Project Partnership Name of Project Location
Xxxxxxxxx'x Wharf Baltimore, Xxxxxxxxx'x Wharf Baltimore, MD
L.P. (Inn/Apartments)
Xxxxxxxxx'x Wharf Xxxxxx, Xxxxxxxxx'x Wharf Baltimore, MD
L.P. Marina
