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 Xxxx Financial
Incorporated, a Massachusetts corporation ("Xxxx").
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 Xxxx 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.
X. Xxxx 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 Xxxx
Each HPP Partnership hereby engages and designates Xxxx as the manager of
certain of the business affairs of the HPP Partnerships as more fully set forth
herein. Xxxx hereby accepts such engagement and designation and hereby agrees to
perform its obligations under this agreement in a businesslike and professional
manner. Xxxx shall at all times act only at the specific direction of BHP or BHP
II. Every act performed by Xxxx or any agent or employee of Xxxx 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 Xxxx
2.1 Duties. It shall be the obligation of Xxxx to perform the following
duties on behalf of HPP Partnerships (the "Services"):
(a) Asset Management Services. Xxxx 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 Xxxx 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 Xxxx 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. Xxxx 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. Xxxx 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, Xxxx 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. Xxxx 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, Xxxx 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
Xxxx and HPP. All employees be employees of Xxxx, but are subject to
reimbursement pursuant to Section 3.2.
(e) Office Space. Xxxx 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. Xxxx 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 Xxxx, 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 Xxxx
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 Xxxx will
be based in large part on information received from the HPP Partnerships. Xxxx
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. Xxxx 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 Xxxx
that no information furnished or to be furnished by the HPP Partnerships
hereunder or in connection with the consulting services to be provided by Xxxx
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 Xxxx 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 Xxxx 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 Xxxx engaging in such competitive activities. Under
no circumstances will Xxxx 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 Xxxx 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 Xxxx 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
Xxxx 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. Xxxx 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, Xxxx shall provide extra services. Xxxx 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 Xxxx or any
employee of Xxxx 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 Xxxx 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, Xxxx shall make such allocation of
the expense of such services among the HPP Partnership and such other entities
as Xxxx shall determine is appropriate, any such allocation made in good faith
by Xxxx shall be final and binding on the parties hereto.
Section 4. Indemnification.
4.1 Indemnification by Xxxx. Xxxx 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 Xxxx, its employees, agents or others under the direction or control of
Xxxx 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. Xxxx and the HPP Partnerships
hereby acknowledge that the acts of Xxxx hereunder are solely as agent for HPP
Partnerships and Xxxx 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 Xxxx harmless from and indemnify Xxxx
against any and all liabilities which Xxxx may incur or suffer as a result of
any claim against Xxxx 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 Xxxx, its employees, agents or others under the direction or control of Xxxx.
For purposes of this Section 4.2 only the term "Xxxx" shall also include any
officer, director, employee or agent of Xxxx 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 Xxxx 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 Xxxx, 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 Xxxx, 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 Xxxx.
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
Xxxx 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, Xxxx
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
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attn.: Xxxxxxxx X. Xxxxxxxx
If to Xxxx: Xxxxxx Xxxx
Xxxx Financial Incorporated
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
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 Xxxx shall be deemed to constitute a
partnership, joint venture or any other relationship and Xxxx shall at all times
be deemed an independent contractor for the purposes of this Agreement.
6.7 No Assignment. Xxxx 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 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 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 _____________________________________
Xxxxxxxx X. Xxxxxxxx, President
By _____________________________________
Xxxxxxxx X. Xxxxxxxx, 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 ____________________________________
Xxxxxxxx X. Xxxxxxxx, President
By ____________________________________
Xxxxxxxx X. Xxxxxxxx, General Partner
XXXX FINANCIAL, INCORPORATED
a Massachusetts corporation
By ____________________________________
Xxxxxx Xxxx, 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
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 Properties The Cosmopolitan St. Xxxx, MN
1989 L. P. Building
Xxxxxxx Court Associates Xxxxxxx Court Jenkintown, PA
Limited Partnership (1)
Portland Loft Associates Xxxxxxxx Portland, OR
Limited Partnership Hardware Lofts
000 Xxxxx Xxxxxx 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
Xxxxxxxxx'x Wharf Baltimore, Xxxxxxxxx'x Wharf Baltimore, MD
L.P. (Inn/ Apartments)
Xxxxxxxxx'x Wharf Baltimore, Xxxxxxxxx'x Wharf Baltimore, MD
L.P. Marina
