BOSTON CAPITAL TAX CREDIT FUND IV L.P.
_______________________________________
CERTIFICATION AND AGREEMENT
for
MAPLE LIMITED PARTNERSHIP
_______________________________________
CERTIFICATION AND AGREEMENT made as of February 25, 1997, by Maple
Limited Partnership, a Connecticut limited partnership (the "Operating
Partnership"); Maple Hill of Massachusetts LLC, a Connecticut limited
liability company (the"Operating General Partner"); 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 (the "Special
Limited Partner"), ▇▇▇▇▇▇▇▇,▇▇▇▇▇ & ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇, Tobin, Carberry,
▇'▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇,PC and certain other persons or entities described
herein. The Investment Partnership and the Special Limited Partner shall
hereinafter be referred to as the "Limited Partners";
WHEREAS, the Operating Partnership proposes to admit the Limited
Partners as the additional limited partners thereof pursuant to the Amended
and Restated Agreement of Limited Partnership of the Operating Partnership
dated as of February __, 1997 (the "Operating Partnership Agreement"), in
accordance with which the Special Limited Partner will make a capital
contribution of $10 to the Operating Partnership and the Investment
Partnership will make certain capital contributions to the Operating
Partnership;
WHEREAS, the Limited Partners have relied upon certain information and
representations described herein in evaluating the merits of investment by
the Limited Partners in the Operating Partnership;
WHEREAS, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇, as counsel for the Limited Partners,
will rely upon such information and representations in connection with its
delivery of certain opinions with respect to this transaction; and
WHEREAS, Peabody & ▇▇▇▇▇ and Tobin, Carberry, ▇'▇▇▇▇▇▇, ▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, PC, as counsel for the Operating Partnership and the Operating
General Partner, 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 Limited Partners to enter into the
Operating Partnership Agreement and become the 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 and the Operating General Partner hereby agree as
follows for the benefit of the Limited Partners, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ & ▇▇▇▇▇, Tobin, Carberry, ▇'▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, PC and certain
other persons hereinafter described.
1. Representations, Warranties and Covenants of the Operating Partnership
and the Operating General Partner
The Operating Partnership and the Operating General Partner jointly and
severally represent, warrant and certify to the Limited Partners, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇ & ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇ and Tobin, Carberry, ▇'▇▇▇▇▇▇, ▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, PC, 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 the 32-unit rental housing
project located in Meriden, Connecticut known as Maple Hill Apartments (the
"Apartment Complex") and conduct its business; the Operating Partnership and
the Operating General Partner 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 and the Operating
General Partner 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 instru-
ment by which the Operating Partnership or the Operating General Partner is
bound or any law, regulation, judgment, decree or order applicable to the
Operating Partnership or the Operating General Partner or any of their res-
pective properties; this Certification and Agreement constitutes the valid
and binding agreement of the Operating Partnership and the Operating General
Partner enforceable against each of them in accordance with its terms.
1.02 All factual information, including without limitation the
information set forth in Exhibit A hereto,provided to the Limited Partners 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. The Operating General Partner has also delivered
to the Limited Partners or their affiliates all documents and other inform-
ation which has been requested by such parties. Since the date of the ▇▇▇▇▇-
cial statements for the Operating General Partner previously delivered, there
has been no material adverse change in the financial position of theOperating
General Partner. The estimates of occupancy rates,operating expenses and tax
credits set forth on Exhibit A are reasonable in light of the knowledge and
experience of 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
both the OperatingPartnership and the Operating General Partner and as to any
of its affiliates, any of its predecessors and its affiliates' predecessors,
any of its directors, officers, general partners and/or beneficial owners of
ten percent (10%) or more of any class of its 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 it in any capacity.
1.04 Each of the representations and warranties contained in
the OperatingPartnership 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 Limited Partners as
limited partners 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 such 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 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 Except as previously disclosed to the Special Limited
Partner, the Operating General Partner is not related in any manner to either
of the Limited Partners, nor is the Operating General Partner acting as an
agent of the Limited Partners.
1.14 To the best of the undersigned's knowledge after due
inquiry,and except as may have been disclosed in that certain report entitled
"Environmental Site Assessment and Limited EnvironmentalCompliance Review" by
GZA GeoEnvironmental, Inc. of Vernon, Connecticut, dated February 1997, the
Apartment Complex does not contain in a level above that deemed safe by all
applicable governmental agencies, any 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 RecoveryAct,
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 have 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 To the best of the undersigned's knowledge, based on that
certain real estate appraisal prepared by Italia & ▇▇▇▇, Inc. dated May 7,
1997 and based upon the level of permanent debt financing for the Project,
there is a reasonable expectation that the fair market value of the Operating
Partnership's building(s) at the end of each year will be greater than the
total amount of the Operating Partnership's liabilities, including accrued
interest on such liabilities.
1.16 [Intentionally Omitted].
1.17 First Atlantic Housing, Inc., a Massachusetts
corporation, BCP Connecticut Limited Partnership, a Massachusetts limited
partnership and American Housing Preservation Corporation,a Maine corporation
are the sole members of the Operating General Partner. If any member or other
affiliate of the Operating General Partner is a tax-exempt entity and either
of such Operating General Partner is a "controlled entity"in relation to such
tax-exempt entity, a timely election will be made under Code Section
168(h)(6)(F) so that no portion of the Apartment Complex will be treated as
"tax exempt use property" as defined in Code Section 168(h).
1.18 All representations made by the Operating General Partner
in the Operating Partnership Agreement are incorporated herein by reference
and are confirmed.
1.19 There is a reasonable expectation that the Operating
Partnership will be able to repay, as due, the principal and interest on the
projected loans to the Operating Partnership based on the projected value of
the Operating Partnership's property and building(s).
1.20 An Extended Use Commitment (as defined in the Operating
Partnership Agreement) within the meaning of Code Section 42(h)(6) will be in
effect and recorded in the appropriate land evidence records with respect to
the building(s)in the Apartment Complex not later than the end of the taxable
year in which any Tax Credit is taken with respect to any building. If not in
effect as of the date hereof, the Operating General Partner agree (i) to
deliver a valid and binding Extended Use Agreement and evidence that it has
been recorded no later than the end of the first taxable year in which anyTax
Credit is taken with regarding to any building and (ii) to ensure that all
Partnership lenders subordinate their mortgage liens on the Apartment Complex
to the Extended Use Agreement at the time it is recorded.
1.21 The amounts payable in development and property
management fees to the Operating General Partner and its affiliates are fair
in light of the value and magnitude of the services rendered in consideration
or such fees,and the services performed in consideration for the development
fees relate solely to the acquisition or construction of the Apartment
Complex.
1.22 The Mortgage Loans (other than the Preservation Loan) are
being financed through the issuance of tax-exempt bonds, the interest on
which is exempt under Section 103 of the Code; the bonds are taken into
account under Section 146 of the Code; and the principal payments on the
Mortgage Loans (other than the Preservation Loan) will be applied within a
reasonable period to redeem the bonds, the proceeds of which were used to
provide the Mortgage Loans (other than the Preservation Loan).
1.23 The Low-Income Housing Tax Credits allocated to the
Apartment Complex will not exceed the amount the Agency determines is
necessary for the financial feasibility of the Apartment Complex and its
viability as a qualified low-income housing project throughout the credit
period.
1.24 To the best of the Operating General Partner's knowledge,
the proposed operations of the Apartment Complex and the Partnership satisfy
the requirements of Connecticut's Qualified Allocation Plan, including any
specific targeting, set-asides or other factors upon which the Connecticut
HousingFinance Authority based its determination that the proposed operations
of the Apartment Complex and the Partnership satisfy the Qualified Allocation
Plan.
1.25 The Operating Partnership has elected pursuant to Code
Section 42 to lock in the applicable Tax Credit rate prior to placement in
service of each building.
1.26 [Intentionally Omitted].
1.27 The Operating General Partner will not reduce its
aggregate interest, as Operating General Partner, in the Partnership below 1%
of all material items of the Partnership income, gain, loss, deduction, and
credit. The 1% interest will be calculated without regard to any limited
partner interest or interests in the Partnership that the Operating General
Partner have or may obtain.
1.28 The Operating General Partner and any entity that is
related to the Operating General Partner or to the Operating Partnership and
that receives a fee from the Operating Partnership,directly or indirectly, is
on the accrual method of accounting for tax purposes. If any fee received by
the Operating General Partner is treated as a guaranteed payment underSection
707(c) of the Code, the Operating General Partner will recognize such fee as
income at the time such fee is accrued by the Operating Partnership.
1.29 The Operating General Partner will be actively involved
in the management and operation of the Operating Partnership, will devote
substantial and continuing attention to the activities of the Operating
Partnership, and will provide substantial services to the Operating
Partnership.
1.30 The development and leasing activity in which the
Operating Partnership will engage will not contain personal or recreational
benefit for the partners of the Operating Partnership.
1.31 The Operating Partnership will keep active records and
carry out the proposed activity in a manner consistent with profitable
businesses in the same activity.
1.32 The Operating Partnership will have an objective to carry
on businesses for profit and divide the gains therefrom.
1.33 The Operating Partnership may earn a profit, including
profit from appreciation in the value of the Apartment Complex.
1.34 The Mortgage Loans and all other debt financing of the
Apartment Complex require the noncontingent repayment of principal on or
before a fixed maturity date, and will be considered and treated as a loan by
the Lenders.
1.35 None of the Operating Partnership's Lenders is a party
from whom the Operating Partnership acquired any portion of the Apartment
Complex, and none of the financing was issued in exchange for any portion of
the Apartment Complex. None of the Operating Partnership's Lenders will
receive a fee with respect to the Operating Partnership's investment in the
Apartment.
1.36 Following is a description of any and all existing or
proposed financing of the Apartment Complex that involves any direct or
indirect grant or federal subsidy (including, without limitation, federal
grants, below-market interest rate loans, and tax-exempt bonds): the
Connecticut Housing Finance Authority is making the Mortgage Loans, which are
being funded by the issuance of Connecticut's 1996 Multi-Family Housing
Revenue Bonds.
1.37 The Project will not receive moderate rehabilitation
assistance under Section 8(e)(2) of the United States Housing Act of 1937
(unless pursuant to the ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Homeless Assistance Act of 1988).
1.38 If the Apartment Complex is a scattered site project
within the meaning of Code Section 42, 100% of the rental units in the
Apartment Complex will be rent-restricted within the meaning of Code Section
42.
1.39 All Units in the Apartment Complex are to be of equal
quality and all Apartment Complex amenities are to be made available to all
tenants on a comparable basis without separate fees except for one unit in
which the on-site manager shall reside.
1.40 There will be no direct or indirect personal liability of
the Operating Partnership or of any of the Partners for the repayment of the
principal of and payment of interest on the Mortgage Loans, and the sole
recourse of theLender under the Mortgage Loans, with respect to the principal
thereof and interest thereon, shall be to the property securing the
indebtedness.
1.41 All representations and disclosures made by the Operating
General Partner to the Agency with respect to the Project and the Partnership
in connection with the Low Income Housing Tax Credit Allocation Application
remain true and correct on the date hereof and the Partnership has complied
with all conditions to the allocation of Tax Credits imposed by the Agency.
1.42 At least 50% of the aggregate basis of the Land and
buildings comprising the Apartment Complex will be financed by the Mortgage
Loans.
2. Indemnification
2.01 The Operating General Partner (for purposes of this
Section 2.01, the "Indemnifying Parties" or, individually, an "Indemnifying
Party") agrees to indemnify and hold harmless the Limited Partners (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 Indemnified 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 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 or (ii) liability in connection with the
Land and/or the Apartment Complex, as each term is defined in the Operating
Partnership Agreement, 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, lead-based paint, 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 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.
2.02 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 IndemnifyingParty or parties similarly
notified, to assume the defense thereof, with counsel who shall be reasonably
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.
3. Miscellaneous
3.01 This Certification and Agreement is made solely for the
benefit of the Operating Partnership,the Operating General Partner, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇ & ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇ and Tobin, Carberry, ▇'▇▇▇▇▇▇, ▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, PC, the Limited Partners (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 used in this Certification and Agreement but not
otherwise defined herein shall have the meanings given 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:
MAPLE LIMITED PARTNERSHIP
By: MAPLE HILL OF MASSACHUSETTS
LLC, its General Partner
By: FIRST ATLANTIC HOUSING, INC., its Manager
By: s/▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President
OPERATING GENERAL PARTNER:
MAPLE HILL OF MASSACHUSETTS LLC
By: FIRST ATLANTIC HOUSING, INC., its Manager
By: s/▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President
Exhibit A
Maple Limited Partnership Fact Sheet
1. Sources and Uses of Funds
Sources of Funds
Application of Funds
Total Construction Cost
Soft Costs
Land
Development Fee
2. Financing
A. Lender:
B. Mortgage Amount:
C. Interest Rate:
D. Term:
3. Construction and Permanent Junior Financing: N/A
4. Eligible Basis:
5. Qualified Basis:
6. GP Capital Contribution:
8. Rent-up Schedule:
9. Projected Credit to the
Investment Partnership (99%):
A. for year 1
B. for year 2
C. for years 3 through 10
D. for year 11
10. Total Projected Credit to the
Operating Partnership (100%):
A. for year 1
B. for year 2
C. for years 3 through 10
D. for year 11
E. for year 12
11. Tax Credit Approval:
A. Application:
1. Date:
2. Credit Amount Requested:
B. Credit Reservation: N/A (Tax Exempt Bonds)
1. Date: N/A
2. Estimated Credit Amount Reserved:
C. Carryover Allocation: N/A
1. Date: N/A
2. Credit Amount Allocated: N/A
D. Credit Rate Lock-in Agreement
1. Date:
2. Rate locked-in:
E. Form 8609
1. Date: To be Determined
2. Credit Amount Allocated: To be Determined
12. Apartment Complex:
A. Name:
B. Address:
C. County:
D. Type of Project:
13. 1996 Area Median Income:
14. Type of Units:
Unit Basic Utility
Number Square Ft. Rent Allowance
1-Bedroom
1-Bedroom
2-Bedroom
2- Bedroom
15. Difference between rents allowed
by FmHA and rents allowed under
the Rent Restriction Test: N/A
16. Rental Assistance:
17. (Projected) Annual Operating Expenses:
18. Replacement Reserve Account
A. Annual:
19. Operating Reserve Account:
(from proceeds of Second Installment)
20. Amount of Annual Asset Management Fee
to Boston Capital Communications
Limited Partnership:
21. Amount of Annual Partnership
Management Fee:
22. Amount of Total Depreciable
Basis Allocated to Personal
Property:
23. Completion Date:
24. Total Capital Contribution of
Investment Partnership:
25. Schedule of Capital Contributions
26. Fees, Special Distributions and Other Items to be paid from Capital
Contributions
A. Development Fee:
B. Special Return of GP Capital N/A
27. Consulting Fee to Boston Capital N/A
Partners, Inc.
28. A. Managing General Partner:
Attn:
Address:
Telephone Number:
B. General Partner:
Attn:
Address:
Telephone Number:
29. Developer:
Attn:
Address:
Telephone Number:
30. Ownership Interests
Capital Cash
Transactions Flow
31. Management Agent:
Attn:
Address:
Telephone Number:
Amount of Fee:
32. Builder:
Attn:
Address:
Telephone Number:
Amount of Compensation:
Builder's Profit: $________________
33. Subcontractor:
Attn:
Address:
Telephone Number:
34. Architect:
Attn:
Address:
Telephone Number:
Amount of Fee:
35. Auditor:
Attn:
Address:
Telephone Number:
36. Tax Return Preparer:
Attn:
Address:
Telephone Number:
37. Federal Taxpayer ID Number:
38. State Housing Credit Agency:
39. State Housing Agency LIHTC Project Number:
40. Operating Deficit Guaranty
41. Guarantor:
cc: Boston Capital Communications Limited Partnership Accounting Department
Exhibit B
Certificate of Operating Partnership and
Operating General Partner Re: Lack of Disqualifications
The Operating Partnership and its Operating General Partner (as
identified
on the Certification and Agreement to which this Certificate is attached as
Exhibit B)hereby represent to you that none of (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 Partne-
ship or (3) will regularly perform, or select the person or entity who will
rgularly perform, the primary activities of the Operating Partnership), (v)
(v) any officer, director, principal or general partner of the Operating
Partnership or of any sponsor, (vi) the officer, director, principal,
promoter or general partner of any Operating General Partner, (vii) any
beneficial owner of ten percent (10%) or more of any class of the equity
securities of the Operating Partnership or ofany 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 considera-
tion of services or property, or both services and property, ten percent
(10%) or more of any class of securities of the Operating Partnership or
ten percent (10%) 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 (5) years prior to the date hereof;
(2) Has been convicted of or pleaded nolo contendere to a
misdemeanor or felony or, within the last ten (10) 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 StatesCode 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 (5) 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 (5) 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 (5) 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
en joins 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 (5) 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 Title 39 of the United States 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(5)
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 Securities Act of the State or for any broker-dealer or
issuer with knowledge that such broker-dealer or issuer had not or has not
complied with the Securities Act of the State.
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 twelve (12) calendar months preceding the date hereof (or for
such shorter period that the Operating Partnership was required to file
such reports).
