BOSTON CAPITAL TAX CREDIT FUND IV L.P. _______________________________________
CERTIFICATION AND AGREEMENT
OF
PEAR VILLAGE LIMITED _______________________________________
CERTIFICATION AND AGREEMENT made as of August 1, 1996, by PEAR VILLAGE
LEITCHFIELD AFFORDABLE HOUSING, LLC, a Kentucky limited liability company (the
"Operating General Partner"); WABUCK DEVELOPMENT COMPANY, INC., a Kentucky
corporation (the "Original General Partner"); and XXXXX X. XXXXXXX and XXXXXX
X. XXXXXXX (the "Original Limited Partners") for the benefit of BOSTON CAPITAL
TAX CREDIT FUND IV L.P., a Delaware limited partnership (the "Investment
Partnership"), BCTC 94, INC., a Delaware corporation ("Boston Capital"),
PEABODY & XXXXX and certain other persons or entities described herein.
WHEREAS, the Operating Partnership proposes to admit the Investment
Partnership and Boston Capital as limited partners thereof pursuant to an
Agreement of Limited Partnership of the Operating Partnership dated as of
August 1, 1996 (the "Operating Partnership Agreement"), in accordance with
which the Investment Partnership will make substantial capital contributions
to the Operating Partnership;
WHEREAS, the Investment Partnership and Boston Capital have relied
upon
certain information and representations described herein in evaluating the
merits of investment by the Investment Partnership in the Operating
Partnership; and
WHEREAS, Peabody & Xxxxx, as counsel for the Investment
Partnership and Boston Capital, will rely upon such information and
representations in connection with its delivery of certain opinions with
respect to this transaction;
NOW, THEREFORE, to induce the Investment Partnership and Boston
Capital
to enter into the Operating Partnership Agreement and become limited partners
of the Operating
Partnership, and 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, the Original General Partner and
the Original Limited Partners hereby agree as follows for the benefit of the
Investment Partnership, Boston Capital, Peabody & Xxxxx and certain other
persons hereinafter described.
1. Representations, Warranties and Covenants of the Operating Partnership,
the Operating GeneralPartner, the Original General Partner and theOriginal
Limited Partners
The Operating Partnership, the Operating General Partner, the
Original General Partner and the Original Limited Partners jointly and
severally represent, warrant and certify to the Investment Partnership, Boston
Capital, and Peabody & Xxxxx that, with respect to the Operating Partnership,
as of the date hereof:
1.01 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 own its apartment complex (the
"Apartment Complex") and conduct its business; the Operating Partnership, the
Operating General Partner, the Original General Partner and the Original
Limited Partners have 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, the
Original General Partner and the Original Limited Partners have 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 or any
Operating General Partner, Original General Partner or Original Limited
Partner is bound or any law, regulation, judgment, decree or order applicable
to the Operating Partnership or any Operating General Partner, Original
General Partner or Original Limited Partner or any of their respective
properties; this Certification and Agreement constitutes the valid and binding
agreement of the Operating Partnership, the Operating General Partner, the
Original General Partner and the Original Limited Partners, enforceable
against each of them in accordance with its terms.
1.02 The Original General Partner and Operating General Partner
have delivered to the Investment Partnership, Boston Capital or their
affiliates all documents and information which would be material to a prudent
investor in deciding whether to invest in the Operating Partnership. All
factual information, including without limitation the information set forth in
Exhibit A hereto, provided to the Investment Partnership, Boston Capital or
their affiliates either in writing or orally, did not, at the time given, and
does not, on the date hereof, contain 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. Since the date of the financial statements for the
Operating General Partner previously delivered, there has been
no material adverse change in the financial position of the Operating General
Partner. The estimates of occupancy rates, operating expenses, cash flow,
depreciation and tax credits set forth on Exhibit A are reasonable in light of
the knowledge and experience of the Original General Partner and the Operating
General Partner.
1.03 As of the date hereof, each of the
representations contained in Exhibit B attached hereto is true, accurate and
complete as to each of the Operating Partnership, the Operating General
Partner, the Original General Partner and the Original Limited Partners and as
to any of their affiliates, any of their predecessors and their affiliates,
predecessors, any of their directors, officers, 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.
1.04 Each of the representations and warranties contained in the
Operating Partnership Agreement is true and correct as of the date hereof.
1.05 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 covenant or agreement is required on or prior to the date
hereof.
1.06 All conditions to admission of the Investment
Partnership and Boston Capital as the investment limited partner and the
special limited partner, respectively, of the Operating Partnership contained
in the Operating Partnership Agreement have been satisfied.
1.07 No default has occurred and is continuing
under the Operating Partnership Agreement or any of the Project Documents (as
said term is defined in the Operating Partnership Agreement) for the Operating
Partnership.
1.08 The Operating General Partner agrees to take
all actions necessary to claim the Projected Credit, including, without
limitation, the filing of Form(s) 8609 with the Internal Revenue Service.
1.09 No person or entity other than the Operating
Partnership holds any equity interest in the Apartment Complex.
1.10 The Operating Partnership has the sole
responsibility to pay all maintenance and operating costs, including all taxes
levied and all insurance costs, attributable to the Apartment Complex.
1.11 The Operating Partnership, except to the
extent it is protected by insurance and excluding any risk borne by lenders,
bears 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.
1.12 No person or entity except the Operating
Partnership has the right to any proceeds, after payment of all indebtedness,
from the sale, refinancing, or leasing of the Apartment Complex.
1.13 The Operating General Partner is not related in any manner to
the Investment Partnership, nor is the Operating General Partner acting as an
agent of the Investment Partnership.
1.14 The Apartment Complex contains no substance known to be
hazardous, such as hazardous waste, lead-based paint, asbestos, methane gas,
urea formaldehyde insulation, oil, toxic substances, underground storage
tanks, polychlorinated biphenals (PCBs), and radon; the Apartment Complex is
not affected by the presence of oil, toxic substances, or other pollutants
that could be a detriment to the Apartment Complex nor is the Operating
Partnership in violation of any local, state, or federal law or regulation;
and no violation of the Clean Air Act, Clean Water Act, Resource Conservation
and Recovery Act, Toxic Substance Control Act, Safe Drinking Water Control
Act, Comprehensive Environmental Resource Compensation and Liability Act, or
Occupational Safety and Health Act has occurred or is continuing. Neither the
Operating Partnership nor the Operating General Partner, the Original General
Partner or either of the Original Limited Partners has received any notice
from any source whatsoever of the existence of any such hazardous condition
relating to the Apartment Complex or of any violation of any local, state or
federal law or regulation with respect to the Apartment Complex.
1.15 The fair market value of the Apartment Complex exceeds the
total amount of indebtedness encumbering the Apartment Complex and is expected
to continue to do so throughout the term of such indebtedness.
1.16 As of December 31, 1995, the Operating Partnership owned the
Apartment Complex for Federal income tax purposes and had a basis in the
Apartment Complex equal to at least 10% of its anticipated basis in the
Apartment Complex as of December 31, 1997, and all buildings in the Apartment
Complex will be placed in service for purposes of Section 42 of the Code not
later than December 31, 1997.
1.17 The Apartment Complex does not receive
assistance under the HUD Section 8 Moderate Rehabilitation Program other than
under the Xxxxxxx X. XxXxxxxx Homeless Assistance Act of 1988.
1.18 The Apartment Complex is not in violation of any State or local
health or building code or regulation.
2. Indemnification
2.01 The Operating General Partner and the Original General Partner
(for purposes of this Section 2.01, the "Indemnifying Parties" or,
individually, an "Indemnifying Party") each agree to indemnify and hold
harmless the Investment Partnership and Boston Capital (for purposes of this
Section 2.01, the "Indemnified Parties" or, individually, an "Indemnified
Party") and each officer, director, employee and person, if any, who controls
any party 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, insofar
as such Liabilities or actions in respect thereof arise out of or are based
upon (i) a breach by such Indemnifying Party of any of his representations,
warranties or covenants to such Indemnified Party or any such of its officers,
directors, employees or controlling persons under
this Certification and Agreement or (ii) liability under any statute,
regulation, ordinance, or other provision of federal, state, or local law or
any civil action pertaining to the protection of the environment or otherwise
pertaining to public health or employee health and safety, including, without
limitation, protection from hazardous waste, leadbased paint, asbestos,
methane gas, urea formaldehyde insulation, oil, toxic substance, underground
storage tanks, polychlorinated biphenals (PCBs), and radon; 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 no Indemnifying
Party shall 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 such 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 an Indemnifying Party may otherwise have.
2.02 No Indemnifying Party shall be liable under the indemnity
agreements contained in Section 2.01 unless the Indemnified Party shall have
notified the Indemnifying Party in writing within forty-five (45) 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 an 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 2.01. 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 noti-fied, 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.
3. Miscellaneous
3.01 This Certification and Agreement is made solely for the benefit
of the Operating Partnership, the Operating General Partner, the Original
General Partner, the Original
Limited Partners and Boston Capital, Peabody & Xxxxx and the Investment
Partnership (and, to the extent provided in Section 2, the 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.
3.02 This Certification and Agreement may be executed
in several
counterparts, each of which shall be deemed to be an original, all of which
together shall constitute one and the same instrument.
3.03 Terms defined in the Operating Partnership
Agreement dand
used but not otherwise defined herein shall have the meanings given to them in
the Operating Partnership Agreement.
IN WITNESS WHEREOF, the undersigned have set their
hands and seals as of the date first above written.
OPERATING PARTNERSHIP
PEAR VILLAGE LIMITED
By: Leitchfield Affordable Housing, LLC
By: Wabuck Development Company, Inc. a member
By: /s/ Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx, President
By: The Housing Foundation, Inc.
By: /s/Xxxxxx X. Xxxx
Its: Vice President
OPERATING GENERAL PARTNER
LEITCHFIELD AFFORDABLE HOUSING, LLC
By: Wabuck Development Company, Inc., a member
By: /s/Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx, President
By: The Housing Foundation, Inc.
By: /s/Xxxxxx X. Xxxx
Its Vice President
ORIGINAL LIMITED PARTNERS
/s/Xxxxx X. Xxxxxxx
XXXXX X. XXXXXXX
/s/Xxxxxx X. Xxxxxxx
XXXXXX X. XXXXXXX
ORIGINAL GENERAL PARTNER
WABUCK DEVELOPMENT COMPANY, INC.
By: /s/Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx, President
Exhibit A
PEAR VILLAGE
FACT SHEET
1. Construction/Permanent Financing
A. First Mortgage Loan
1. Lender: First Federal Savings
Bank of Leitchfield
2. Mortgage Amount: $227,000
3. Note Date: anticipated July, 1996
4. Interest Rate:
Lender's Prime Rate during the
construction period; 2.5%
per annum thereafter based on a 30
year amortization period.
5. Term: 15 years from Final
Closing
(with an estimated $135,354.89
balloon payment at maturity)
6. Guarantors: None
B. Second Mortgage Loan
1. Lender: The Kentucky Housing Corpor
ation
(with Kentucky HOME Investment
Partnerships Program funds)
2. Mortgage Amount: $300,000
3. Note Date: anticipated July, 1996.
4. Interest Rate: fixed at 1% per annum based
on a
25-year
amortization period
(interest
deferred until maturity)
5. Term: 25 years
6. Guarantors: Xxxxx X. Xxxxxxx and Xxxxx
Xxxxxxx
(in the maximum
amount of $330,000
until approximately
one year from
the date of Final
Closing
2. Eligible Basis: $951,000
3. Qualified Basis: $951,000
4. GP Capital Contribution: $100
5. Type of Credit: 9%
6. Rent-up Schedule:
13% occupancy by January 31, 1997
26% occupancy by February 28, 1997
39% occupancy by March 31, 1997
52% occupancy by April 30, 1997
65% occupancy by May 31, 1997
78% occupancy by June 30, 1997
91% occupancy by July 31, 1997
100% occupancy by August 31, 1997
7. Projected Credit to the
Investment Partnership: $828,511
A. $51,782 for 1997,
B. $82,851 per annum for each of the years 1998
Through 2006, and
C. $ 31,069 for 2007.
8. Total Projected Credit: $836,880
A. $52,305 for 1997,
B. $83,688 per annum for each of the years 1998 through 2006,
and
C. $31,383 for 2007.
9. Tax Credit Approval:
A. Application
1. Date: August 23, 1995
2. Credit Amount Requested: Not listed in application
B. Reservation
1. Date: October 2, 1995
2. Credit Amount Reserved: $85,140
C. Allocation
1. Date: December 28, 1995
2. Credit Amount Allocated: $85,140
D. LIHC Rate on Form 8609 N/A
10. Apartment Complex:
A. Name: Pear Village Apartments
B. Address: Xxxx 00-00, Xxxxxx
Xxxxx
Xxxxxxx Section 4,
Leitchfield,
Kentucky
C. County: Grayson
D. Type of Project: Family
11. Area Median Income: $23,400
12. Type of Apartments:
Unit Tax Credit Utility
Number Square Ft. Rent Allowance
3-Bedroom 16 1,200 $200 $74
13. Rental Assistance: None
14. Annual Operating Expenses
(beginning 1998): $26,960
15. Operating Reserve Account $10,000 from the Second Installment
16. Projected gross annual
Cash Flow: $____________
(beginning 1998)
17. Amount of Annual Asset
Management Fee to Boston
Capital $ 1,000
(cumulative, beginning 1997)
18. Amount of Partnership Management
Fee to General Partner:
(non-cumulative, beginning 1997) $1,000
19. Amount of Annual Incentive
Management Fee from available: 2% of gross rental income
Cash Flow (non-cumulative, beginning 1997)
20. Amount of Total Depreciable
Base Allocated to Personal
Property: $38,400
21. Projected Completion Date: April 30, 1997
22. Total Capital Contribution of
Investment Partnership: $488,822
23. Schedule of Capital Contributions
A. $244,412 on the later of
(i) the Admission Date or
(ii) Initial Closing;
B. $122,205 on the later of
(i) State Designation;
(ii) Substantial Completion;
(iii) Cost Certification; or
(iv) receipt by the Investment Partnership of evidence from
the
Contractor that all amounts payable to it pursuant
to the
Construction Contract have been paid in full;
C. $112,205 on the later of
(i) the Initial 87% Occupancy Date;
(ii) Final Closing;
(iii) receipt by Investment Partnership of the legal opinion
provided for in Section 5.04(b) of the Operating Partnership
Agreement; or
(iv) Rental Achievement; and
D. $10,000 on Rental Achievement Confirmation.
24. Fees, Special Distributions and Other Items to be paid from
Capital Contributions
A. Construction and Development Fee: $200,000
B. Development Overhead: $1,922
C. Direct Development Costs: $286,900
25. Construction and Development Fee
Interest Payable From Cash Flow: None
26. General Partner(s): Leitchfield Affordable Housing, LLC
Address: c/o Wabuck Development Company, Inc.
0000 Xxxxxxxxx Xxxx
X.X. Xxx 000
Xxxxxxxxxxx, XX 00000
Telephone Number: (000) 000-0000
Contact Person: Xxxxx X.Xxxxxxx
27. Ownership Interests
Normal Capital Cash
Operation Transaction Flow
General Partner 1% 50% 50
Investment Partnership 98.99% 50% 50%
Special Limited Partner .01% none none
28. Management Agent: Homeland, Inc.
Contact Person: Xxxxxxx Xxxxxxx, President
Address: 000 Xxxx Xxxxxx Xxxxxx,
Xxxxx 0, X.X. Xxx 000
Xxxxxxxxxxx, Xxxxxxxx 00000
Telephone Number: (000) 000-0000
Amount of Fee: 6% of gross revenues
29. Builder: Xxxxxxx Xxxxxxx Construction, Inc.
Address: 0000 Xxxxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxxx 00000
Amount of Compensation: $705,000
Builder's Profit: $60,000
30. Architect: Xxxx X. Xxxxxx, AIA
Address: X.X. Xxx 000
Xxxxxxx Xxxxx, Xxxxxxxx 00000
Amount of Fee: $12,000
31. Auditor: Xxxxxxx, Xxxxxx & Xxxxxxxxx, CPA's
Address: 0000 Xxxx-Xxxx Xxxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Telephone Number: (000) 000-0000
32. Tax Return Preparer: Xxxxxx X. Xxxxx, CPA
Address 000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxx 00000
Telephone Number: (000) 000-0000
33. Federal Taxpayer ID Number: 00-0000000
34. Operating Deficit Guaranty:
The General Partner shall be obligated commencing from and after the
Final Closing Date through the end of the Compliance Period to advance funds
in an aggregate amount not to exceed $200,000, which will be necessary to meet
Operating Deficits. In order to fund Operating Deficits, the General Partner
is required to purchase a treasury xxxx or interest-bearing government
security in an amount of not less than $100,000, which shall be held in escrow
by First Federal Savings Bank of Leitchfield, Kentucky (the "Escrow Agent")
pursuant to an Escrow Agreement of even date herewith by and between the
General Partner, the Investment Limited Partner and the Escrow Agent.
Interest received by the General Partner on the treasury xxxx or government
security shall be deposited in a depository account with the Escrow Agent (the
"Interest Account") pursuant to Section 8.18(c) of the Partnership Agreement
to be used solely by the General Partner for the purpose of funding Operating
Deficits.
35. Replacement Reserve: The General Partner shall cause the
Partnership to deposit at least
$4,000 annually into the
Replacement
Reserve.
36. Building Breakdown:
#1 #2 #3 #4 #5 #6
#7 #8
A. # of Units 2 2 2 2 2 2 2 2
B. Unit #s 2 2 2 2 2 2 2 2
C. Bin # KY95- 13401 13402 13403 13404 13405 13406 13407 13408
cc: Boston Capital Communications Limited Partnership Accounting Department
Exhibit B
certificate of Operating Partnership,
Operating General Partner, Original General Partner and
Original Limited Partners
Re: Lack of Disqualifications
The Operating Partnership, its Operating General Partner, its
Original General Partner and its Original Limited Partners (as identified on
the Certification and Agreement to which this Certificate is attached as
Exhibit B) hereby represent to you that neither (i) the Operating Partnership,
(ii) any predecessor of the Operating Partnership, (iii) any of the Operating
Partnership's affiliates ("affiliate" meaning a person that controls or is
controlled by, or is under common control with, the Operating Partnership),
(iv) any sponsor (meaning any person who (1) is directly or indirectly
instrumental in organizing the Operating Partnership or (2) will directly or
indirectly manage or participate in the management of the Operating
Partnership or (3) will regularly perform, or select the person or entity who
will regularly perform, the primary activities of the Operating Partnership),
(v) any officer, director, principal or general partner of the Operating
Partnership or of any sponsor, (vi) any officer, director, principal, promoter
or general partner of any, Original General Partner or Operating General
Partner, (vii) any beneficial owner of ten per cent or more of any class of
the equity securities of the Operating Partnership 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), (viii) any
promoter of the Operating Partnership (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 Operating
Partnership or any person who, in connection with the founding and organizing
of the business or enterprise of the Operating Partnership, 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 Operating
Partnership or ten per cent or more of the proceeds from the sale of any class
of such securities; provided, however, a person who receives such securities
or proceeds either solely as underwriting commissions or solely in
consideration of property shall not be deemed a promoter if such person does
not otherwise take part in founding and organizing the enterprise) presently
connected with the Operating Partnership 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 a any refusal order or stop order
thereunder entered within five years prior to the date hereof;
(2) Has been convicted of or pleaded nolo contendere to a
misde-xxxxxx 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 within five years prior to the date hereof entered or issued by
or procured from a state securities commission or administrator, the
Securities and Exchange Commission ("SEC"), 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 deceit,
theft, fraud or fraudulent conduct, or breach of fiduciary duty, or which is
based upon a state banking, insurance, real estate or securities law or (c)
has been the subject of any administrative order, judgment or decree in any
state 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 SEC 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 of competent jurisdiction entered within five years prior
to the date hereof, 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 date hereof, 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 SEC, 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 or associated person
of any of the foregoing, or prohibiting 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 SEC 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 date hereof 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 or is the subject of sanctions imposed by any state or federal
securities agency or self-regulatory agency;
(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 has been adjudged a
bankrupt or made a general assignment for the benefit of creditors; 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 Operating Partnership is subject to the requirements of Section
12, 14 or 15(d) of the Securities Exchange Act of 1934, then the Operating
Partnership has filed all reports required by those Sections to be filed
during the 12 calendar months preceding the date hereof (or for such shorter
period that the Operating Partnership was required to file such reports).
