PINERIDGE APARTMENTS PARTNERSHIP, A
LOUISIANA PARTNERSHIP IN COMMENDAM
CERTIFICATION AND AGREEMENT
CERTIFICATION AND AGREEMENT made as of July 10, 1998, by
Pineridge Apartments Partnership, A Louisiana Partnership In
Commendam (the Partnership); X. Xxxxxx Xxxxxxx, Jr., as its
Managing General Partner (the Managing General Partner); and
T.F. Management, Inc., its limited partner (the Withdrawing
Original Limited Partner) for the benefit of Boston Capital
Tax Credit Fund IV, L.P., a Delaware limited partnership
(specifically Series 32 thereof) (the Investment Limited
Partner); BCTC 94, Inc., a Delaware corporation, and Peabody
& Xxxxx, and certain other persons or entities described
herein.
WHEREAS, the Partnership proposes to admit the Investment
Limited Partner and the Special Limited Partner as limited
partners thereof pursuant to First Amended and Restated
Articles of Partnership In Commendam of the Partnership,
dated as of July 10, 1998 (the Partnership Agreement), and
in accordance with which the Investment Limited Partner will
make substantial capital contributions to the Partnership;
WHEREAS, the Investment Limited Partner, the Special Limited
Partner and Boston Capital have relied upon certain
information and representations described herein in
evaluating the merits of investment by the Investment
Limited Partner in the Operating Partnership; and
WHEREAS, Peabody & Xxxxx, as counsel for the Investment
Limited 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 Investment Limited Partner and
the Special Limited Partner to enter into the Partnership
Agreement and become limited partners of the Partnership,
and for $1.00 and other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the
Partnership, the Managing General Partner and the
Withdrawing Original Limited Partner hereby agree as follows
for the benefit of the Investment Limited Partner, the
Special Limited Partner, Boston Capital and Peabody & Xxxxx,
and certain other persons hereinafter described.
1. Representations, Warranties and Covenants of the
Partnership and the Managing General Partner
The Partnership and the Managing General Partner jointly and
severally, and in solido, represent, warrant and certify to
the Investment Limited Partner, the Special Limited Partner,
Boston Capital, and Peabody & Xxxxx that, with respect to
the Partnership, as of the date hereof:
1.01 The Partnership is duly organized as a limited
partnership pursuant to the laws of the State of Louisiana
with full power and authority to own the apartment complex
(the Apartment Complex) and conduct its business; the
Partnership, the Managing General Partner and the
Withdrawing Original Limited 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 Partnership, the Managing General
Partner and the Withdrawing Original Limited Partner 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 Partnership or Managing General Partner or Withdrawing
Original Limited Partner are bound or any law, regulation,
judgment, decree or order applicable to the Partnership or
the Managing General Partner or the Withdrawing Original
Limited Partner or any of their respective properties; this
Certification and Agreement constitutes the valid and
binding agreement of the Partnership, the Managing General
Partner and the Withdrawing Original Limited Partner,
enforceable against each of them in accordance with its
terms.
1.02 The Managing General Partner has delivered to the
Investment Limited Partner, the Special Limited Partner and
Boston Capital or their affiliates all documents and
information which would be material to a prudent investor in
deciding whether to invest in the Partnership. All factual
information, including without limitation the information
set forth in Exhibit A hereto, provided to the Investment
Limited Partner, the Special Limited Partner, 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. The financial
statement for the Managing General Partner and his
affiliates previously delivered fairly present the financial
condition of such parties as of the dates of said financial
statements and since the date of such financial statements
there has been no material adverse change in the financial
position of the Managing General Partner or such
affiliates. 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 Managing 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 Partnership, the Managing General
Partner and the Withdrawing Original Limited Partner 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
percent (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 Partnership Agreement is true and correct
as of the date hereof.
1.05 Each of the covenants and agreements of the
Partnership and the Managing General Partner contained in
the Partnership Agreement have 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
Limited Partner and the Special Limited Partner as the
limited partners of the Partnership contained in the
Partnership Agreement have been satisfied.
1.07 No default has occurred and is continuing under
the Partnership Agreement or any of the Project Documents
(as said term is defined in the Partnership Agreement) for
the Partnership.
1.08 The Managing General Partner agrees to take all
actions necessary to claim the Projected Credit, including,
without limitation, the filing of a Form 8609 with the
Internal Revenue Service.
1.09 No person or entity other than the Partnership
holds any equity interest in the Apartment Complex.
1.10 The 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.
The Partnership, except to the extent it is protected by
insurance and excluding any risk borne by the 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 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 General Partners are not related in any manner
to the Investment Limited Partner, the Special Limited
Partner or Boston Capital nor is the Managing General
Partner acting as an agent of the Investment Limited
Partner, the Special Limited Partner or Boston Capital.
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
biphenyls (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 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
Partnership nor the Managing General Partner nor the
Withdrawing Original Limited 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 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 The Apartment Complex is not in violation of any
State of local health or building code or regulation.
1.17 The 1998 low-income housing tax credit
authorization in the amount of at least $208,620 per annum
for the Property has been obtained by the Partnership from
the tax credit agency of the State of Louisiana and is in
full force and effect.
1.18 The Partnership has validly elected under Section
42(b)(2)(A)(ii) of the Code to lock in a credit percentage
of 8.45% with respect to the qualified basis of the
Property.
1.19 All 40 dwelling units in the Property will be
leased to persons who satisfy the income restrictions under
Section 42(g)(1) of the Code at rents satisfying the rent
restrictions of Section 42(g)(2) of the Code.
1.20 All qualified low income dwelling units in the
Property will be occupied by tenants under leases with terms
of not less than six months.
1.21 All rental units in the Property are of equal
quality with comparable amenities available to low-income
tenants on a comparable basis without separate fees.
1.22 The Apartment Complex does not receive assistance
under HUD Section 8 Moderate Rehabilitation Program.
1.23 The Partnership will, as of December 31, 1998, own
the Apartment Complex and have a basis in the Apartment
Complex equal to at least 10% of its anticipated basis in
the Apartment Complex as of December 31, 2000, and all
buildings in the Apartment Complex will be placed in service
for the purposes of the Code not later than December 31,
2000.
1.24 The allocation of 1998 low income housing tax
credit to the Property was not made pursuant to the
nonprofit set aside provisions of Section 42 of the Code.
1.25 The Apartment Complex is located in a difficult to
develop area for the purposes of Section 42(d)(5)(B) of the
Code.
2. Indemnification
2.01 The Managing General Partner (for purposes of this
Section 2.01, (the Indemnifying Party) agrees to indemnify
and hold harmless the Investment Limited Partner, the
Special Limited Partner 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, lead-based paint, asbestos, methane gas,
urea formaldehyde insulation, oil, toxic substance,
underground storage tanks, polychlorinated biphenyls (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 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 The Indemnifying Party shall not 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 their own expense in the defense, or, if they
so elect, in accordance with arrangements satisfactory to
the any 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 Party 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 Partnership, the Managing General
Partner, the Withdrawing Original Limited Partner, the
Investment Limited Partner, the Special Limited Partner,
Boston Capital and Peabody & Xxxxx (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 Partnership Agreement and used but
not otherwise defined herein shall have the meanings given
to them in the Partnership Agreement.
IN WITNESS WHEREOF, the undersigned have set their
hands and seals as of the date first above written.
PARTNERSHIP: PINERIDGE APARTMENTS
PARTNERSHIP, A LOUISIANA
PARTNERSHIP IN COMMENDAM
/s/ X. Xxxxxx Xxxxxxx, Jr.
By: X. Xxxxxx Xxxxxxx, Jr.
Its: Managing General Partner
GENERAL PARTNERS: X. XXXXXX XXXXXXX, JR.
/s/ X. Xxxxxx Xxxxxxx, Jr.
WITHDRAWING ORIGINAL T.F. MANAGEMENT, INC.
LIMITED PARTNER: By: Xxxxxx X. Xxxx
Its: President
/s/ Xxxxxx X. Xxxx
Exhibit A
PINERIDGE APARTMENTS PARTNERSHIP, A
LOUISIANA PARTNERSHIP IN COMMENDAM
FACT SHEET
A. Sources
i. Permanent First Mortgage $93,806
ii. Permanent Second Mortgage $400,000
iii. LIHTC Equity $1,501,914
General Partner Equity $100
TOTAL $1,995,820
B. Uses
Acquisition Costs
Land $85,220
Construction Costs
Building Costs $1,235,240
Site Work $251,560
General Requirements $89,100
Bond Premium $15,000
Legal/Organizational
Legal $20,000
Title & Recording $20,000
Construction Financing
Interest during Construction $15,000
Soft Costs
Architect/Engineering $23,600
Taxes during Construction $2,000
Construction Insurance $2,000
Tax Credit Fees $18,500
Appraisal $5,000
Cost Certification $4,500
Contingencies $38,000
Other Costs
Developer Fee $160,000
Developer Overhead Reimbursement $11,100
TOTAL $1,995,820
2. Construction Financing
A. Lender Hibernia National
Bank
B. Mortgage Amount $850,000
i. Note Date May 12, 1998
ii. Interest Rate 8.95%
iii. Term 12 months
3. Permanent Financing
Lender (First Mortgage) Hibernia National
Bank
Mortgage Amount: $93,806
i. Note Date: May 12, 1998
ii. Interest Rate: 8.80% adjusted on
5th and
10th anniversary
iii. Term: 15 years
iv. Amortization: 300 months
Lender (Second Mortgage) Louisiana Housing Finance
Agency
Mortgage Amount $400,000
Note Date: July 10, 1998
i. Interest Rate: 5.88%
Term: 40 years
Amortization 40 years
Total Construction Costs: $1,575,900
5. Construction Commencement: July, 1998
6. Construction Completion: January, 1999
7. Eligible Basis: $1,899,500
8. Qualified Basis: $2,469,350
(130% Basis Multiplier)
9. Capital Contributions:
General Partners $100
Investment Limited Partner $1,501,914
10. Type of Credit: New construction
11. Rent-up Schedule: 100% occupancy by April,
1999
12. Projected Credit to the Investment
Limited Partner (99.99%): $182,524 for 1999
($208,599; new construction) $208,599 for 2000 to
2008
$26,075 for 2009
13. Total Projected Credit to the
Partnership (100%): $182,543 for 1999
($208,620; new construction) $208,620 for 2000 to
2008
$26,078 for 2009
14. Tax Credit Approval:
A. Application
i. Filing Date: March 19, 1997
ii. Credit Amount
Requested: $208,620
B. Reservation
i. Date: October 15, 1997
ii. Credit Amount
Reserved: $208,620
C. Allocation
i. Date: N/A
ii. Credit Amount
Allocated:
15. Apartment Complex
A. Name: Pineridge Apartments
Address: Franklinton, Louisiana
Type of Project: Elderly
16. Area Median Income: $28,000
(4 Person MFI
17. Type of Apartments: Xxxxxx Xxxxxxxxxx
# Xxxx Xx. Basic Util
Ft. Rent Allow. Total Rent
1 BR (50% median) 12 800 217 40 257
2 BR (50% median) 4 950 259 50 309
2 BR (60% median) 18 950 320 50 370
4 BR (60% median) 6 1,250 477 70 407
18. Number of Units Receiving
Rental Assistance: -0-
19. Annual Operating Expenses
(beginning 1999): $92,037
20. Replacement Reserve Account
A. Annual: $8,000
B. Required Total Accumulation: $80,000
21. Operating Reserve Account: -0-
22. Amount of Annual Reporting
Fee to Boston Capital: $4,000
23. Amount of Partnership
Management Fee: $4,000
24. Amount of Total Depreciable Base
Allocated to Personal Property: $29,981
25. Total Capital Contribution of
Investment Limited Partner: $1,501,914
26. Schedule of Capital Contributions
$1,126,436 on the latest to occur of:
Tax Credit Set-Aside;
Admission Date;
Construction Loan Closing;
Permanent Mortgage Loan Commitment; or
Permanent Second Mortgage closing.
$150,191 on the latest to occur of:
Completion;
State Designation; or
Cost Certification.
$225,287 on the latest to occur of:
the Initial 100% Occupancy Date;
Permanent Mortgage Commencement;
receipt by the Limited Partners of the Partnership's owner's
title policy;
opinion of counsel to the Partnership; or
Breakeven Point.
27. General Partner: X. Xxxxxx Xxxxxxx, Jr.
000 Xxxx Xxxxxx
X.X. Xxxxxx 000
Xxxxxxxxx, XX 00000
28. Ownership Interests:
Tax Credits Profits &
& Cost Recovery Losses
(depreciation) Other Capital Cash
deductions losses Transactions Flow
A. Managing
G.P.: .001% .001% 50% 50%
B. Investment
L.P.: 99.99% 99.99% 49.999% 50%
C. Special
L.P. -0- -0- .001% -0-
29. Management Agent: Xxxxxxx Property Management,
L.L.C.
Contact Person: Xxxxxx X. Xxxxxxx
Address: 000 Xxxx Xxxxxx, X.X. Xxxxxx 000
Xxxxxxxxx, XX 00000
Telephone Number: 000-000-0000
Fax Number 000-000-0000
Amount of Management Fees: (5% of gross rental receipts)
30. Builder: Xxxxxxx Builders, L.L.C.
Contact Person: Xxxxxx Xxxx
Address: 000 Xxxx Xxxxxx, X.X. Xxxxxx 000
Xxxxxxxxx, XX. 00000
B. Telephone Number: 000-000-0000
C. Fax Number: 000-000-0000
D. Construction Contract $2,721,391
31. Architect: Xxxxxx & Xxxxxx Architects, Ltd.
Contact Person: Xxxxxx Xxxxxx
Address: 000 Xxxxx Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
B. Telephone Number: 000-000-0000
C. Fax Number: 000-000-0000
D. Amount of Fee: $23,600
32. Auditor and Tax Return
Preparer: Little & Banks
Contact Person: Xxxx Xxxxxx
Address: X.X. Xxx 0000
000X Xxxxxxxx Xxxxxx
Xxxx Xxxxxx, XX 00000
B. Telephone Number: 000-000-0000
C. Fax Number: 000-000-0000
D. Fee: $4,500
33. Federal Taxpayer I.D. Number: 00-0000000
34. Operating Deficit Guaranty: X. Xxxxxx Xxxxxxx, Jr.
X. Xxxxxx Xxxxxxx, Jr., individually, and on behalf of
the Partnership, shall be obligated to make Subordinated
Loans to the Partnership to cover debt service, operating
expenses and the Replacement Reserve Fund to the extent
these exceed available operating income.
35. Building Breakdown
A. # of units: 40
B. # of Buildings: 14
C. BIN: LA-98-00163 to 00176
cc: Boston Capital Accounting Department
Exhibit B
Certificate of Partnership, Managing General Partner
and Withdrawing Original Limited Partner
Re: Lack of Disqualifications
The Partnership, its Managing General Partner and its
Withdrawing Original Limited Partner (as identified on the
Certification and Agreement to which this Certificate is
attached as Exhibit B) hereby represent to you that neither
(i) the Partnership, (ii) any predecessor of the
Partnership, (iii) any of the Partnership's affiliates
(affiliate meaning a person that controls or is controlled
by, or is under common control with, the Partnership) , (iv)
any sponsor (meaning any person who (1) is directly or
indirectly instrumental in organizing the Partnership or (2)
will directly or indirectly manage or participate in the
management of the Partnership or (3) will regularly perform,
or select the person or entity who will regularly perform,
the primary activities of the Partnership), (v) any officer,
director, principal or general partner of the Partnership or
of any sponsor, (vi) any officer, director, principal,
promoter or general partner of the Managing General Partner,
(vii) any beneficial owner of ten per cent or more of any
class of the equity securities of the 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
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
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 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
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 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 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 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) If the 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 Partnership was required to file
such reports).