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