BOSTON CAPITAL TAX CREDIT FUND IV L.P.
BOSTON CAPITAL CORPORATE TAX CREDIT FUND IV,
A LIMITED PARTNERSHIP
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CERTIFICATION AND AGREEMENT
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CERTIFICATION AND AGREEMENT made as of April 16, 1996, by and among
XXXXX HOUSE II LIMITED PARTNERSHIP, a Massachusetts limited partnership (the
"Operating Partnership"), XXXXX II, INC., a Massachusetts corporation (the
"Operating General Partner"), and LOWER ROXBURY COMMUNITY CORPORATION, a
Massachusetts non-profit corporation (the "Guarantor"), for the benefit of
BOSTON CAPITAL TAX CREDIT FUND IV L.P., a Delaware limited partnership
("BCTC IV"), BOSTON CAPITAL ASSOCIATES IV L.P., a Delaware limited partnership
("BCA IV"), BOSTON CAPITAL CORPORATE TAX CREDIT FUND IV, A LIMITED
PARTNERSHIP, a Massachusetts limited partnership ("BCCTC IV"), C&M ASSOCIATES,
d/b/a BOSTON CAPITAL ASSOCIATES, a Massachusetts general partnership ("BCA"),
and BOSTON CAPITAL PARTNERS CORPORATION, a Massachusetts corporation ("BCPC")
(BCTC IV, BCA IV, BCCTC IV, BCA and BCPC are referred to collectively herein
as the "BC Parties"), and PEABODY & XXXXX and certain other persons or
entities described herein.
WHEREAS, the Operating Partnership has admitted BCTC IV and BCCTC IV as
limited partners thereof, and proposes to set forth all of the terms and
conditions of the investments by BCTC IV and BCCTC IV pursuant to an Amended
and Restated Agreement and Certificate of Limited Partnership of the Operating
Partnership dated as of April 1, 1996 (the "Operating Partnership Agreement"),
in accordance with which BCTC IV and BCCTC IV each will make substantial
capital contributions to the Operating Partnership; and
WHEREAS, the BC Parties have relied upon certain information and
representations described herein in evaluating the merits of investment by
BCTC IV and BCCTC IV in the Operating Partnership; and
WHEREAS, Peabody & Xxxxx, as counsel for BCTC IV and BCCTC IV, will rely
upon such information and representations in connection with its delivery of
certain opinions with respect to this transaction.
NOW, THEREFORE, for $1.00 and other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the Operating
Partnership, the Operating General Partner and the Guarantor hereby agree as
follows for the benefit of the BC Parties, Peabody & Xxxxx and certain other
persons hereinafter described.
1. Representations, Warranties and Covenants
of the Operating Partnership, the
Operating General Partner and the Guarantor
The Operating Partnership, the Operating General Partner and the
Guarantor jointly and severally represent, warrant and certify to the BC
Parties and Peabody & Xxxxx that, with respect to the Operating Partnership,
as of the date hereof:
1.1. The Operating Partnership is duly organized and in good
standing as a limited partnership pursuant to the laws of the state of its
formation with full power and authority to acquire and own its apartment
complex (the "Apartment Complex") and conduct its business; the Operating
Partnership, the Operating General Partner and the Guarantor each has the
power and authority to enter into and perform this Certification and
Agreement; the execution and delivery of this Certification and Agreement by
the Operating Partnership, the Operating General Partner and the Guarantor has
been duly and validly authorized by all necessary action; the execution and
delivery of this Certification and Agreement, the fulfillment of its terms and
consummation of the transactions contemplated hereunder do not and will not
conflict with or result in a violation, breach or termination of or constitute
a default under (or would not result in such a conflict, violation, breach,
termination or default with the giving of notice or passage of time or both)
any other agreement, indenture or instrument by which the Operating
Partnership, the Operating General Partner, or the Guarantor is bound or any
law, regulation, judgment, decree or order applicable to the Operating
Partnership, the Operating General Partner, the Guarantor or any of their
respective properties; this Certification and Agreement constitutes the valid
and binding agreement of the Operating Partnership, the Operating General
Partner and the Guarantor, enforceable against each of them in accordance with
its terms.
1.2. The Operating General Partner has delivered to the BC
Parties or their affiliates, all documents and information in its possession
which are material to decisions by BCTC IV and BCCTC IV to invest in the
Operating Partnership. All factual information, including without limitation
the information set forth in Exhibit A hereto, provided by the Operating
General Partner to the BC Parties and/or their affiliates, either in writing
or orally, did not contain at the time given and does not contain on the date
hereof, any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances under which they are made. The
estimates of occupancy rates, operating expenses, cash flow and tax credits
set forth on Exhibit A are reasonable in light of the knowledge and experience
of the Operating General Partner.
1.3. Neither the Operating Partnership, the Operating General
Partner, the Guarantor nor any affiliate or anyone acting on behalf of any of
the foregoing has, either directly or indirectly or through any agent, sold,
offered for sale, solicited offers to buy, or otherwise approached offerees
for, or negotiated in respect of, any interest in the Operating Partnership or
the Apartment Complex; neither the Operating Partnership, the Operating
General Partner, the Guarantor nor any affiliate thereof, has previously dealt
with, nor is presently under commitment to, any real estate, securities or
other broker, rental agent, finder or other intermediary with respect to the
interests being acquired by BCTC IV and BCCTC IV in the Operating Partnership
and in the Apartment Complex or any portion thereof, except for their
arrangements with the BC Parties; and the Operating General Partner and the
Guarantor, jointly and severally, shall indemnify and hold harmless the BC
Parties and their respective affiliates, agents and assignees from any and all
claims of any real estate, securities or other broker, rental agent, finder or
other intermediary with respect to the acquisition by BCTC IV and BCCTC IV of
their respective interests in the Operating Partnership and in the Apartment
Complex, and, at the request of the BC Parties (or any of them), the Operating
General Partner and the Guarantor shall assume the defense of any judicial
action(s) that might arise in connection with any such claim(s).
1.4. Neither the Operating Partnership, the Operating General
Partner, the Guarantor nor any affiliate nor anyone acting on behalf of any of
the foregoing has, either directly or indirectly or through any agent, sold,
offered for sale, solicited offers to buy, or otherwise approached offerees
for, or negotiated in respect of, or will, either directly or indirectly or
through any agent, sell, offer for sale, solicit offers to buy, or otherwise
approach offerees for, or negotiate in respect of, the purchase of interests
in real estate projects or entities which are or will be integrated with the
Apartment Complex or the Operating Partnership and treated as a single
offering under the Securities Act of 1933, as amended, the Securities Exchange
Act of 1934, as amended, and any applicable state securities or Blue Sky Laws
(collectively "Applicable Securities Laws").
1.5. As of the date hereof, the Operating Partnership and the
Operating General Partner make each of the representations contained in
Exhibit B attached hereto which are required to be made under the state
securities or Blue Sky laws of the jurisdictions in which Beneficial Assignee
Certificates in BCTC IV (the "BACs") and/or limited partnership interests in
BCCTC IV (the "Units") were offered and sold, both as to themselves and as to
any of their affiliates, any of their predecessors and their affiliates'
predecessors, any of their general partners and/or beneficial owners of ten
per cent (10%) or more of any class of their equity securities (beneficial
ownership meaning the power to vote or direct the vote and/or the power to
dispose or direct the disposition of such securities), as the case may be, and
any promoters presently connected with them in any capacity.
1.6. Each of the representations and warranties of the Operating
General Partner contained in the Operating Partnership Agreement is true and
correct as of the date hereof.
1.7. Each of the covenants and agreements of the Operating
Partnership and the Operating General Partner contained in the Operating
Partnership Agreement has been duly performed to the extent that performance
of any such covenant and agreement is required on or prior to the date hereof.
1.8. No default has occurred and is continuing under the
Operating Partnership Agreement or the Project Documents.
1.9. The Operating General Partner agrees to take all actions
necessary to claim the Projected Credit, including, without limitation, the
filing of Form 8609 with the Internal Revenue Service.
1.10. No person or entity other than the Operating Partnership
will hold any equity interest in the Apartment Complex after the Initial
Closing.
1.11. The Operating Partnership will have the sole responsibility
to pay all maintenance and operating costs, including all taxes levied and all
insurance costs, attributable to the Apartment Complex after the Initial
Closing.
1.12. The Operating Partnership, except to the extent it is
protected by insurance and excluding any risk borne by lenders, will bear the
sole risk of loss if the Apartment Complex is destroyed or condemned or there
is a diminution in the value of the Apartment Complex after the Initial
Closing.
1.13. No person or entity except the Operating Partnership will
have the right to any proceeds, after payment of all indebtedness, from the
sale, refinancing or leasing of the Apartment Complex after the Initial
Closing.
1.14. The Operating General Partner is not related in any manner
to BCTC IV or BCCTC IV, nor is the Operating General Partner acting as an
agent of BCTC IV or BCCTC IV.
2. Indemnification and Contribution With Respect to
Securities Matters
2.1. The Operating General Partner and the Guarantor, jointly and
severally (for purposes of this Section 2.1, the "Indemnifying Party"), agree
to indemnify and hold harmless the BC Parties and their respective affiliates
(for purposes of this Section 2.1, the "Indemnified Parties" or, individually,
an "Indemnified Party") and each officer, director, employee and person, if
any, who controls any Indemnified Party within the meaning of the Applicable
Securities Laws against any losses, claims, damages or liabilities
(collectively "Liabilities"), joint or several, to which any Indemnified Party
or such officer, director, employee or controlling person may become subject,
under the Applicable Securities Laws or otherwise, insofar as such Liabilities
or actions in respect thereof arise out of or are based upon a breach by such
Indemnifying Party of any of its representations, warranties or covenants to
such Indemnified Party or any such of its officers, directors, employees or
controlling persons under this Certification and Agreement; and to reimburse
each such Indemnified Party and each such officer, director, employee or
controlling person for any legal or other expenses reasonably incurred by it
or them in connection with investigating or defending against any such
Liability or action; provided, however, that the Indemnifying Party shall not
be required to indemnify any Indemnified Party or any such officer, director,
employee or controlling person for any payment made to any claimant in
settlement of any Liability or action unless such payment is approved by the
Indemnifying Party or by a court having jurisdiction of the controversy. This
indemnity agreement shall remain in full force and effect notwithstanding any
investigation made by any party hereto, shall survive the termination of any
agreement which refers to this indemnity and shall be in addition to any
liability which the Indemnifying Party may otherwise have.
2.2. The Indemnifying Party shall not be liable under the
indemnity agreements contained in Section 2.1 unless the Indemnified Party
shall have notified such Indemnifying Party in writing within ten (10)
business days after the summons or other first legal process giving
information of the nature of the claim shall have been served upon the
Indemnified Party or any such of its officers, directors, employees or
controlling persons, but failure to notify the Indemnifying Party of any such
claim shall not relieve it from any liability which it may have to the
Indemnified Party or any such of its officers, directors, employees or
controlling persons against whom action is brought otherwise than on account
of its indemnity agreement contained in Section 2.1. In case any action is
brought against any Indemnified Party or any such of its officers, directors,
employees or controlling persons upon any such claim, and it notifies the
Indemnifying Party of the commencement thereof as aforesaid, the Indemnifying
Party shall be entitled to participate at its own expense in the defense, or,
if it so elects, in accordance with arrangements satisfactory to any other
Indemnifying Party or parties similarly notified, to assume the defense
thereof, with counsel who shall be satisfactory to such Indemnified Party or
any such of its officers, directors, employees or controlling persons and any
other Indemnified Parties who are defendants in such action; and after notice
from the Indemnifying Party to such Indemnified Party or any such of its
officers, directors, employees or controlling persons of its election so to
assume the defense thereof and the retaining of such counsel by the
Indemnifying Party, the Indemnifying Party shall not be liable to such
Indemnified Party or any such of its officers, directors, employees or
controlling persons for any legal or other expenses subsequently incurred by
such Indemnified Party or any such of its officers, directors, employees or
controlling persons in connection with the defense thereof, other than the
reasonable costs of investigation.
2.3. If the right to indemnification provided for in Section 2.1
of this Certification and Agreement would by its terms be available to a party
or parties hereunder, but is determined by a court of competent jurisdiction
to be unenforceable under Applicable Securities Laws, then, in that event, the
Operating General Partner shall contribute to the aggregate of such losses,
claims, damages and liabilities as are contemplated in such Section 2.1
(including, but not limited to, any investigation, legal and other expenses
incurred in connection with, and any amount paid in settlement of, any claim,
action, suit or proceeding) to the extent of ninety per cent (90%) of the
aggregate of such losses, claims, damages and liabilities incurred by a
party(ies) who otherwise would be an Indemnified Party(ies) under and pursuant
to the provisions of such Section 2.1; provided, however, that no person
guilty of fraudulent misrepresentations within the meaning of Section 11(f) of
the Securities Act of 1933, as amended, shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
Any party entitled to contribution will, promptly after receipt of
notice of commencement of any action, suit or proceeding against him or it in
respect of which a claim for contribution may be made against another party or
parties, notify such other party or parties. Failure so to notify such other
party or parties shall not relieve such other party or parties from any other
obligation it or they may have hereunder or otherwise. If such other party or
parties are so notified, such other party or parties shall be entitled to
participate in the defense of such action, suit, proceeding or claim at their
own expense or in accordance with arrangements satisfactory to all parties who
may be required to contribute. After notice from such other party or parties
to the party entitled to contribution of its or their own defense, the party
or parties so electing shall not be liable for any legal or other expenses of
litigation subsequently incurred by the party entitled to contribution in
connection with the defense thereof, other than the reasonable costs of
investigation. No party shall be required to contribute with respect to any
action or claim settled without its consent.
3. Miscellaneous
3.1. This Certification and Agreement is made solely for the
benefit of Peabody & Xxxxx and the BC Parties (and, to the extent provided in
Section 2, the affiliates, officers, directors, partners, employees and
controlling persons referred to therein), and their respective successors and
assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement, and the term "successors and assigns" as used herein
shall not include any purchaser, as such, of any of the BACs and/or the Units.
3.2. This Certification and Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, and all of
which together shall constitute one and the same Certification and Agreement.
3.3. Terms defined in the Operating Partnership Agreement and
used but not otherwise defined herein shall have the meanings given to them in
the Operating Partnership Agreement.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties hereto have set their hands and seals as
of the date first above written.
XXXXX HOUSE II LIMITED PARTNERSHIP
By: Xxxxx II, Inc.,
General Partner
By: /s/ Xxxxxxx Xxxxx
President
XXXXX II, INC.
By: /s/ Xxxxxxx Xxxxx
President
LOWER ROXBURY COMMUNITY CORPORATION
By: /s/ Xxxxxxx Xxxxx
President
EXHIBIT B
CERTIFICATE OF ISSUER AND GENERAL PARTNER(S)
RE: LACK OF DISQUALIFICATIONS
The Issuer (for the purposes of this Exhibit B the term "Issuer" shall
be taken to refer to the "Operating Partnership" as identified in the
Certification and Agreement to which this document is attached as Exhibit B)
and its general partner (the "General Partner") hereby represent to you that
neither (i) the Issuer, (ii) any predecessor Issuer, (iii) any of the Issuer's
affiliates ("affiliate" meaning a person that controls or is controlled by, or
is under common control with, the Issuer), (iv) any sponsor (meaning any
person who (1) is directly or indirectly instrumental in organizing the
investment program, or (2) will directly or indirectly manage or participate
in the management of the investment program, or (3) will regularly perform, or
select the person or entity who will regularly perform, the primary activities
of the investment program), (v) any officer, director, principal or general
partner of the Issuer or of any sponsor, (vi) any officer, director,
principal, promoter or general partner of the General Partner, (vii) any
beneficial owner of ten per cent or more of any class of the equity securities
of the Issuer or of any sponsor (beneficial ownership meaning the power to
vote or direct the vote and/or the power to dispose or direct the disposition
of such securities), or (viii) any promoter of the Issuer (meaning any person
who, acting alone or in conjunction with one or more other persons, directly
or indirectly has taken, is taking or will take the initiative in founding and
organizing the business of the Issuer or any person who, in connection with
the founding and organizing of the business or enterprise of the Issuer,
directly or indirectly receives in consideration of services or property, or
both services and property, ten per cent or more of any class of securities of
the Issuer or ten per cent or more of the proceeds from the sale of any class
of such securities; however, a person who receives such securities or proceeds
either solely as underwriting commissions or solely in consideration of
property shall not be deemed to be a promoter if such person does not
otherwise take part in founding and organizing the enterprise) presently
connected with the Issuer in any capacity:
(1) has filed a registration statement which is the subject of
any pending proceeding or examination under the securities laws of any
jurisdiction, or which is the subject of any refusal order or stop order;
(2) has been convicted of or pleaded nolo contendere to a
misdemeanor or felony or, within the last ten years, been held liable in a
civil action by final judgment of a court based upon conduct showing moral
turpitude in connection with the offer, purchase or sale of any security,
franchise or commodity (which term, for the purposes of this Certificate shall
hereinafter include commodity futures contracts) or any other aspect of the
securities or commodities business, or involving racketeering, the making of a
false filing or a violation of Sections 1341, 1342 or 1343 of Title 18 of the
United States Code or arising out of the conduct of the business of an issuer,
underwriter, broker, dealer, municipal securities dealer, or investment
adviser, or involving theft, conversion, misappropriation, fraud, breach of
fiduciary duty, deceit or intentional wrongdoing including, but not limited
to, forgery, embezzlement, obtaining money under false pretenses, larceny,
fraudulent conversion or misappropriation of property or conspiracy to
defraud, or which is a crime involving moral turpitude, or within the last
five years of a misdemeanor or felony which is a criminal violation of
statutes designed to protect consumers against unlawful practices involving
insurance, securities, commodities, real estate, franchises, business
opportunities, consumer goods or other goods and services;
(3) is subject to (a) any administrative order, judgment or
decree entered or issued by or procured from a state securities commission or
administrator, the Securities and Exchange ("S.E.C."), the Commodities Futures
Trading Commission or the U.S. Postal Service, or to (b) any administrative
order or judgment arising out of the conduct of the business of an
underwriter, broker, dealer, municipal securities dealer, or investment
adviser, or involving theft, fraud or fraudulent conduct, or breach of
fiduciary duty, or (c) has been the subject in any state of any administrative
order, judgment, or decree in which fraud, deceit, or intentional wrongdoing,
including but not limited to making untrue statements of material fact or
omitting to state material facts, was found;
(4) is subject to any pending proceeding in any jurisdiction
relating to the exemption from registration of any security or offering, or to
any order, judgment or decree in which registration violations were found or
which prohibits, denies or revokes the use of any exemption from registration
in connection with the offer, purchase or sale of securities, or to an S.E.C.
censure or other order based on a finding of false filing;
(5) is subject to any order, judgment or decree of any court or
regulatory authority or competent jurisdiction temporarily or preliminarily
restraining or enjoining, or is subject to any order, judgment or decree of
any court or regulatory authority of competent jurisdiction, temporarily,
preliminarily or permanently restraining or enjoining, such persons from
engaging in or continuing any conduct or practice in connection with any
aspect of the securities or commodities business or involving the making of
any false filing or arising out of the conduct of the business of an
underwriter, broker, dealer, municipal securities dealer, or investment
adviser, or which restrains or enjoins such person from activities subject to
federal or state statutes designed to protect consumers against unlawful or
deceptive practices involving insurance, banking, commodities, real estate,
franchises, business opportunities, consumer goods and services, or is subject
to a United States Postal Service false representation order entered within
five years prior to the commencement of the Offering or is subject to a
temporary restraining order or preliminary injunction with respect to conduct
alleged to have violated section 3005 of Xxxxx 00, Xxxxxx Xxxxxx Code;
(6) is suspended or expelled from membership in, or suspended or
barred from association with a member of, an exchange registered as a national
securities exchange, an association registered as a national securities
association, or any self regulatory organization registered pursuant to the
Securities Exchange Act of 1934 or a Canadian securities exchange or
association or self-regulatory organization operating under the authority of
the Commodity Futures Trading Commission or is subject to any currently
effective order or order entered within the past five years of the S.E.C., the
Commodity Futures Trading Commission or any state securities administrator
denying registration to or revoking or suspending the registration of such
person as a broker-dealer, agent, futures commission merchant, commodity pool
operator, commodity trading adviser or investment adviser and associated
persons of any of the foregoing, or prohibits the transaction of business as a
broker-dealer or agent;
(7) has, in any application for registration or in any report
required to be filed with or in any proceeding before the S.E.C. or any state
securities commission or any regulatory authority, willfully made or caused to
be made any statement which was at the time and in the light of the
circumstances under which it was made false or misleading with respect to any
material fact, or has willfully omitted to state in any such application,
report or proceeding any material fact which is required to be stated therein
or necessary in order to make the statements made, in the light of the
circumstances under which they are made, not misleading, or has willfully
failed to make any required amendment to or supplement to such an application,
report or statement in a timely manner;
(8) has willfully violated any provision of the Securities Act
of 1933, the Securities Exchange Act of 1934, the Trust Indenture Act of 1939,
the Investment Advisers Act of 1940, the Investment Company Act of 1940, the
Commodity Exchange Act of 1974 or the securities laws of any state, or any
predecessor law, or of any rule or regulation under any of such statutes;
(9) has willfully aided, abetted, counseled, commanded, induced
or procured the violation by any other person of any of the statutes or rules
or regulations referred to in subsection (8) hereof;
(10) has failed reasonably to supervise his agents, if he is a
broker-dealer, or his employees, if he is an investment adviser, but no person
shall be deemed to have failed in such supervision if there have been
established procedures, and a system for applying such procedures, which would
reasonably be expected to prevent and detect, insofar as practicable, any
violation of statutes, rules or orders described in subsection (8) and if such
person has reasonably discharged the duties and obligations incumbent upon him
by reason of such procedures and system without reasonable cause to believe
that such procedures and system were not being complied with;
(11) is subject to a currently effective state administrative
order or judgment procured by a state securities administrator within five
years prior to the commencement of the Offering or is subject to a currently
effective United States Postal Service fraud order or has engaged in dishonest
or unethical practices in the securities business or has taken unfair
advantage of a customer;
(12) is insolvent, either in the sense that his liabilities
exceed his assets or in the sense that he cannot meet his obligations as they
mature, or is in such financial condition that he cannot continue his business
with safety to his customers, or has not sufficient financial responsibility
to carry out the obligations incident to his operations; or
(13) is selling or has sold, or is offering or has offered for
sale, in any state, securities through any unregistered agent required to be
registered under the Pennsylvania Securities Act of 1972, as amended (the
"Pennsylvania Act") or for any broker-dealer or issuer with knowledge that
such broker-dealer or issuer had not or has not complied with the Pennsylvania
Act.
If the Issuer is subject to the requirements of Sections 12, 14,
or 15(d) of the Securities Exchange Act of 1934, then, the Issuer has filed
all reports required by those Sections to be filed during the 12 calendar
months preceding the first sale of the Issuer's securities under Rule 505 (or
for such shorter period that the Issuer was required to file such
